AMP Productions, Inc.
5296 SOUTH 300 WEST
SALT LAKE CITY, UTAH 84107
Tel. (801) 262-5300
August 1, 2000
Charles McCarty, Senior Counsel
Securities and Exchange Commission
Washington, D.C. 20549
RE: AMP Productions, Inc.
Registration Statement on Form SB-2
File No. 333-39042
Dear Mr. McCarty:
This letter responds to your Comment Letter dated July 17, 2000. The
numbered responses below correspond to the Comment Numbers in your letter.
We have added disclosure indicating this is the Company's initial
public offering.
Disclosure regarding pricing of the shares has been added. See page 1
of the Prospectus.
We have amended the Registration Statement extensively to comply with
Rule 419 of Regulation C. Risk factors, the Prospectus summary, Business and
Description of securities have all been augmented substantially to disclose
the fact that AMP may be considered a blank check company. Please note that
we are not selling any shares or raising any proceeds with this offering.
We have added disclosures to the Prospectus summary, risk factors and
Business that we lack the resources to commence operations and cannot predict
the timing or likelihood of raising such proceeds.
We have added disclosures about management.
We have modified the wording in Liquidity and disclose prominently that
we are unable to provide the information discussed in your comment.
We disclose prominently that we are unable to predict our ability to
commence operations and generate revenue.
We disclose the terms of our issuance and recent sale of the 2,000,000
shares of unregistered common stock in Part II pursuant to Item 701.
Disclosure regarding dilution pursuant to Item 506 has been added to page 9 of
the Prospectus.
A copy of the accountant's license or their license number will be
forwarded to you as soon as I have received it. The firm recently changed
its name and filed the necessary documents with the State of Utah. We have
been told they expect the records to be updated in the next few days.
We have revised the financial statements to account for the offering
costs as expenses.
Thank you for your cooperation and attention. If you have any questions,
please call me at the number listed above.
Sincerely,
David P. Brown
As Filed with the Securities and Exchange Commission on JulyneAugust,___ 2000
(File No. 333-39042)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
Pre-Effective Amendment No. 1
FORM SB_2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_______________
AMP Productions, Inc.
(Name of Small Business Issuer in Its Charter)
Nevada 7922 87-0654585
(State or Other Jurisdiction (Primary Standard (I.R.S. Employer
of Incorporation or Industrial Classification
Identification No.)
Organization) Code Number)
(Address and Telephone Number of Executive Offices)
David Brown
5296 South 300 West
Salt Lake City, Utah 84107
(801) 262-5300
(Name, Address and Telephone Number of Agent for Service)
COPIES TO:
Stephen B. Schneer, Esq.
Stephen B. Schneer LLC
605 Third Avenue
New York, NY 10158
Telephone -972-1100
Facsimile -983-5271
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: From time to time after the effective date of this registration
statement.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 of the Securities Act
of 1933, check the following box: |x |
If this Form is filed to register additional securities for an offering
under rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. | |
If this Form is a post-_effective amendment filed under rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration
statement for the same offering. | |
If this Form is a post-_effective amendment filed under rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration
statement for the same offering. | |
If the delivery of the prospectus is expected to be made under rule 434,
please check the following box. | |
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Title of Each Amount to Be Proposed Proposed Amount of
Class of Be offering Aggregate Registration Fee
Securities to Be Registered per Share (1) offeringPrice (1)
shares of common
stock,$.001 par
value
("commonstock") 333,333 $ 16.00 $2,000,000 $528
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
under rule 457 under the Securities Act of 1933.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE TIME UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933
OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH
DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
================================================================
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to completion
Preliminary prospectus dated AugustJune ___, 2000.
PROSPECTUS
AMP PRODUCTIONS, INC.
2,000,000333,333 SHARES OF COMMON STOCK
$6.00 PER SHARE
AMP PRODUCTIONS, INC is registering 2,000,000333,333 shares of its common
stock, all of which is held by founders and other shareholders. This
prospectus may be used only in connection with the resale by the founders and
other shareholders of shares of the common stock of AMP. There currently is no
market for our shares of common stock, and no assurances can be given that
such a market will develop. We hope to have our common stock quoted on the
OTC Bulletin Board. This offering effectively serves asis our initial public
offering.
We issued the shares of common stock to the founders for services
rendered and received only nominal cash consideration therefore. We also
issued shares to certain shareholders pursuant to rule 505 of Regulation D in
May of 2000. The shares of common stock offered hereby may be resold from
time to time by the founders and other shareholders, collectively referred to
in this prospectus as the "selling stockholders" or "selling shareholders." We
will not receive any of the proceeds from the sale of the shares by the
selling stockholders.
The selling shareholders may, without limitation, offer pursuant to this
prospectus shares of common stock to purchasers from time to time in
negotiated transactions, transactions that may take place on the over-the-
counter market, brokerage transactions, private transactions or otherwise, or
by a combination of these methods, at $6.00 per share fixed prices that may be
changed, at market prices prevailing at the time of sale, at prices related to
such market prices or at negotiated prices. Sales of the shares may be
effected through broker-dealers, who may receive compensation from the Selling
Stockholders in the form of discounts or commissions.
<TABLE>
<S> <C><C>
AMP PRODUCTIONS, INC.: THE OFFERING:
AMP Productions, Inc., 5296 South AMP is registering 333,333 shares of
common stock.
300 West Salt Lake City, Utah 84107
(801) 262-5300
Proposed OTC symbol: AMPP
</TABLE>
THE INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE ___ .
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal offense. The
information in this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed with the SEC is
effective. This prospectus is not an offer to sell these securities and we
are not soliciting offers to buy these securities in any state where the offer
or sale is not permitted.
-------------------
This prospectus is dated August_____, 2000.
Prospectus ROSPECTUS SUMMARYsummary
We were established in February 2000 to promote concerts, festivals and
other entertainment events. Our strategy will beis to feature nationally known
artists and groups and utilize arenas having capacities ranging from 5,000 to
12,000 seats, as well as promoting family-oriented entertainment festivals in
vacation resorts. Competition in these niches is intense but fragmented.
We will work closely with the major agencies that manage the more well
known artists and groups. Some of the founders were involved with other
entities whose activities included promoting performances by The Beach Boys,
Credence Clearwater Revisited, Collin Raye, Patty Loveless, Travis Tritt, John
Michael Montgomery and others.
We are unable to estimate a time period as to when we will commence
promotional activities because of our extremely limited financial resources.
The timing of the implementation of our business strategy is dependent on our
ability to obtain sufficient financing to undertake our plans. We cannot
provide any assurances of the likelihood of our obtaining sufficient financing
to undertake our operating plan. If we are unable to undertake our operating
plan, we would be described as a "shell" company, whose principal purpose would
be to locate and consummate a merger or acquisition with a private entity.
These proposed business activities also classify us as a "blank check" company.
The offering
<TABLE>
<S> <C>
Securities offered by us None
Common stock offered by selling
shareholders 333,333 shares
Common stock outstanding 333,333 shares.
Use of proceeds We will not receive any of the
proceeds from the sales of
shares of common stock
</TABLE>
The 2,000,000 shares currently outstanding were issued for a total
consideration of $10,000.
Risk factors
You should carefully consider each of the following risks and all of the
other information set forth in this prospectus before deciding to invest in
shares of our common stock. Some of the following risks relate principally to
our business in general and the industry in which we operate. Other risks
relate principally to the securities markets and ownership of our stock.
If any of the following risks and uncertainties develop into actual
events, our business, financial condition or results of operations could be
materially adversely affected. In that case, the trading price of our common
stock could decline, and you may lose all or part of your investment.
Our business is subject to the following risks, which include risks relating
to the industry in which we operate.
Because our operating history is limited from the period since February 2000,
we may not be able to successfully manage our business or achieve profitability.
We will commence operations in 2000 if we obtain sufficient financing to cover
minimum event guarantees. and haveWe have no operating history upon which to
evaluate our future performance and prospects. Our prospects must be
considered in light of the risks, expenses, delays, problems and difficulties
frequently encountered in the establishment of a new business. Our principal
risks are:
Ability to negotiate acceptable contracts with artists and groups;
Ability to negotiate acceptable arrangements with venues; and
Ability to arrange for promotional spots with radio stations in the
areas covered by the venues.
There can be no assurance that we will be able to generate significant
revenues or achieve profitable operations or that our operations will generate
positive cash flow.
We may never be able to implement our business plan because of our limited
amount of financial resources. If we cannot implement our business plan, we
may be considered a blank check company that may seek to merge with or acquire
an operating company.
We have neither conducted, nor have others made available to us, results of
market research indicating that market demand exists for the transactions that
may be contemplated by us. Moreover, we do not have, and do not have the
resources to establish, a marketing or planning organization. While we intend
to seek business combination(s) with entities having established operating
histories, there can be no assurance that we will be successful in locating
candidates meeting such criteria. We currently have no arrangement, agreement
or understanding for a possible merger or acquisition with any entity. We have
not identified any particular industry or specific business within an industry
for evaluation. We have not established any criteria to evaluate prospective
opportunities. It is possible that we may enter into a business combination
with a business opportunity having:
no significant operating history,
losses,
limited or no potential for earnings,
limited assets,
negative net worth, or
other negative characteristics.
If we seek a business combination, our management and directors anticipate
devoting up to ten hours per month to the our business. We have not entered
into any written employment agreement with any member of management or our
board of directors and are not expected to do so in the foreseeable future.
In the event that we complete a business combination, of which there can be no
assurance, the success of our future operations will likely be dependent upon
management and resources of the acquired firm or venture partner firm. A
business combination involving the issuance of shares of our common stock
will, in all likelihood, result in shareholders of an acquired company
obtaining a controlling interest in us. It is also likely that our management
may be required to sell or transfer all or a portion of our common shares held
by them or resign.
We would be a very minor participant in a business acquisition market
niche and will lack the resources to expand our position in that niche.
If we decide to pursue an acquisition of an operating company or entity, we
will be an insignificant participant in the business of seeking mergers with and
acquisitions of small private and public entities. A large number of
established and well-financed entities, including venture capital firms, are
active in mergers and acquisitions of companies that may be desirable target
candidates for us. Nearly all of these competing entities have significantly
greater financial resources, technical expertise and managerial capabilities
than we have. Therefore, we will be at a competitive disadvantage in
identifying possible business opportunities and successfully completing a
business combination.
Current and future members of our management have or are likely to have
conflicts of interest that may not be resolved in our favor.
All members of our management and board of directors may serve in similar
capacities with other companies, including other blank check companies. There
can be no assurances that they will refer opportunities to us instead of to
other entities.
We may acquire a business in which our promoters, management or their
affiliates own a beneficial interest. In that event, the transaction may be
considered a related party transaction not at arms-length. No related party
transaction is presently contemplated. If a related party transaction is
contemplated sometime in the future, we do not intend to seek stockholder
approval through a vote of stockholders.
Forward looking information
This prospectus contains forward-looking statements that involve risks
and uncertainties. These statements relate to:
our future plans;
objectives;
expectations and intentions; and
the assumptions underlying or relating to any of these statements.
We use words like as "expects," "anticipates," "intends," "plans" and
similar expressions to identify forward-looking statements.
DILUTION
Our net tangible book value as of April 30, 2000 was ($.0025) per share.
Net tangible book value per share represents the amount of our total tangible
assets reduced by the amount of our total liabilities and divided by the total
number of shares of common stock outstanding. Dilution in net tangible book
value per share represents the difference between the amount per share paid
by purchasers of shares of common stock in this offering and the net tangible
book value per share of common stock immediately after the completion of this
offering. After giving effect to the sale of 333,333 shares of common stock
offered by us at an assumed initial public offering price of $6.00 per share,
and after deducting offering expenses payable by us, our net tangible book at
April 30, 2000 would have been approximately ($5,000) or ($.0025) per share of
common stock. None of the proceeds of the sale of shares of our common stock
is going to us which means that the sales will result in This represents no
increase in net tangible book value to existing stockholders and an immediate
dilution of $6.00 per share to new investors of common stock.
Our business
We were established in February 2000 to promote concerts, festivals and
other entertainment events. Our strategy will beis to feature nationally known
artists and groups and utilize arenas having capacities ranging from 5,000 to
12,000 seats, as well as promoting family- oriented entertainment festivals in
vacation resorts. Competition in these niches is fragmented.
We will plan to work closely with the major agencies that manage well
known artists and groups, including ICM and the William Morris Agency. Mr.
Jenkins, one of our foiunders,Some of our founders wasere involved with other
entities whose activities included promoting performances by The Beach Boys,
Credence Clearwater Revisited, Collin Raye, Patty Loveless, Travis Tritt,
John Michael Montgomery and others.
We are unable to estimate a time period as to when we will commence
promotional activities because of our extremely limited financial resources.
The timing of the implementation of our business strategy is dependent on our
ability to obtain sufficient financing to undertake our plans. We cannot
provide any assurances of the likelihood of our obtaining sufficient financing
to undertake our operating plan.
General strategies
We have identified a specific market niche that we believe maximizes the
likelihood of profits and minimizes the risk of loss normally associated with
the entertainment business. The key elements of this strategy are:
Artists and groups - We plan to promote concerts featuring nationally known
artists and groups because these types of artists and groups have sufficiently
large followings so as to reduce the need for advertising and promotion. We
will emphasize artists and groups who are well known but who do not currently
have a recording at the top of the charts. This strategy will enable us to
benefit from the followings of groups without assuming the risk associated
with large minimum guarantees. These large guarantees are the principal reason
that promoters lose money on concerts. Avoiding large minimum guarantees is at
the heart of our strategy.
We plan to promote artists and groups with whom one of our founders has
an established relationship, either directly or through managers or agents.
This policy enables us to reduce its guarantees to a minimum and also
increases the likelihood of scheduling multiple concerts or tours.
Venues - A venue is a facility in which an event is held or takes place.
Venue-related costs are generally the second most expensive production cost,
exceeded only by the cost of the artist or group. Our strategy for venues is
to use facilities with capacities ranging from 5,000 to 12,000 located in
suburban areas or small cities. Facilities that have capacities lower than
5,000 are unlikely to allow us to meet our goals and larger facilities
generally requireguarantees at levels that make the risk of loss unacceptably
high. In evaluating venues, we will seek facilities having low minimum
guarantees, low operating costs, as well as good location and parking. For the
most part, we will seek and use facilities that are not unionized and that do
not rely on concerts or similar entertainment events as their primary source
of revenue.
We will consider using venues throughout the country. The number of
acceptable facilities is quite large and includes athletic facilities located
on college campuses and arenas located in medium-sized cities.
Business strategy
We will promote events that we believe are likely to be successful given
the demographics of the area surrounding the selected venue. For example,
country artists are likely to be popular in many areas in the South, Oldies
groups tend to be popular in retirement communities, rock groups on college
campuses if classes are in session, etc. The basic approach is summarized as:
Step One - Match a venue with a group or artist likely to be successful given
the venue's demographics.
Step Two - Negotiate an agreement with the venue. We will endeavor to reduce
the advance payment requirements to a minimum. A basic agreement usually
covers rent, ushers, tickets stagehands and concessions.
Step Three - Negotiate terms with the artist or group. These negotiations
generally take place with an agent or attorney. Well known artists normally
receive guaranteed minimum payments against a percentage of the gate.
Step Four - Analyze the data using a standard event worksheet. Summarize all
costs of the proposed events after estimating ancillary costs such as hotels
and meals for the artist, advertising, etc. After all costs are known, we will
determine ticket prices that must generally be sufficient to permit the event
to breakeven if ticket sales achieve 50 percent of the venue's capacity. The
ticket price calculated in this manner must be realistic given the nature of
the event and the demographics of the area. If these conditions are met, we will
actively consider the event. If not, we will not pursue the event.
Step Five - Enter into the necessary agreements.
Step Six - Promote the event through the medium considered most effective in
the area. Wherever possible, barter tickets for services and consider teaming
with a local radio station and other sponsors.
Step Seven - On the day of the event, ensure that the artist has been picked
up at the airport or hotel and the venue is ready for the event. Institute
procedures to ensure that we obtain accurate information about ticket counts
and concession sales. The amount of oversight necessary in these areas is a
direct function of our founders' past relationship with the venue's
management. In almost all cases, this function will be performed on-site by us
or our representative.
Step Eight - Attend the settlement or closing meeting to ensure that all
contract requirements have been met.
It is more efficient to negotiate multiple events with artists.
Likewise, use of the same venue several times a year reduces negotiating time
and increases the likelihood of minimizing requirements for large advances.
Other opportunities - We will consider sponsoring occasional three or four-day
festivals in conjunction with various sponsors. These festivals will coincide
with holiday weekends and will feature family style entertainment. Two other
avenues of opportunity are:
Co-promoting major events in large city arenas or stadiums. We would only
participate in these events on a "co-promoter" basis to minimize the risk
of loss associated with large events while at the same time benefiting from
being a part of a major event.
Managing artists and groups to take advantage of our contacts, as well as
legal and financial experience.
Competition
The market in which we expect to compete is highly competitive, and we
will face competition from one or more entities in all geographic areas where
we expect to operate. In addition, we anticipate that competition will
increase in the future. Many of our competitors are larger businesses and
have substantially greater financial resources than we will have.
Alternative strategy
We may lack the resources to implement our primary strategy effectively
and may be unable to obtain the necessary financing in the future. As such,
we would be described as a "shell" company, whose principal purpose would be
to locate and consummate a merger or acquisition with a private entity. These
proposed business activities also classify us as a "blank check" company.
Transferability of the shares of our common stock is very limited because many
states have enacted regulations restricting or, in some instances,
prohibiting, the initial sale and subsequent resale of securities of blank
check companies such as us. In addition, many states, while not specifically
prohibiting or restricting blank check companies, will not register our
securities for sale or resale in their states. Because of these regulations,
we currently have no plan to register any of our securities with any state
having these restrictions. To ensure that state laws are not violated through
the resale of our securities, we will refuse to register the transfer of any
of our securities to residents of any state which prohibits the resale of
securities issued by blank check companies.
Implementing the alternative strategy
We may implement the alternative strategy concurrent with our primary
plan. Our purpose under this alternative strategy is to seek, investigate and,
if the investigation warrants, acquire an interest in business opportunities
presented to us by firms that desire to seek the perceived advantages of an
Exchange Act registered corporation. We will not restrict our search to any
specific business, industry, or geographical location. We may participate in
a business venture of virtually any kind or nature. This discussion of the
proposed business is purposefully general and is not meant to be restrictive
of our virtually unlimited discretion to search for and enter into potential
business opportunities. We anticipate that we may be able to participate in
only one potential business merger or acquisition because we have nominal
assets and limited financial resources. This lack of diversification should be
considered a substantial risk to our shareholders because it will not permit
us to offset potential losses from one venture against gains from another.
We may seek a business opportunity with entities that have recently commenced
operations, or more established entities that wish to utilize the public
marketplace in order to raise additional capital in order to expand into new
products or markets, to develop a new product or service, or for other
corporate purposes. We may acquire assets and establish wholly- owned
subsidiaries in various businesses or acquire existing businesses as
subsidiaries.
We may advertise and promote our efforts in newspapers, magazines and on the
Internet, although we have not yet prepared any notices or advertisement.
We believe that the selection of a business opportunity in which to
participate will be complex and extremely risky. We also believe that there
are numerous firms seeking the perceived benefits of a publicly registered
corporation. These perceived benefits may include:
facilitating or improving the terms on which additional equity financing
may be sought,
providing liquidity for incentive stock options or similar benefits to
key employees,
providing liquidity (subject to restrictions of applicable statutes), for
all shareholders, and
other factors.
A combination with us may appear attractive because a merger candidate may
attempt to avoid what it deems to be adverse consequences of undertaking its
own public offering by seeking a business combination with us. These adverse
consequences may include, but are not limited to:
time delays of the registration process,
significant expenses to be incurred to complete an offering,
loss of voting control to public shareholders, and
the inability to enter into an underwriting agreement on acceptable
terms.
It is possible that available business opportunities may occur in many
different industries and at various stages of development, all of which will
make the task of comparative investigation and analysis extremely difficult
and complex.
We have, and will continue to have, no cash or other assets to offer or
provide to the owners of business opportunities as part of a merger or
acquisition transaction. However, we believe that we will be able to offer
owners of acquisition candidates the opportunity to acquire a controlling
ownership interest in a publicly registered company without incurring the
cost and time required to conduct an initial public offering. The owners of the
business opportunities will, however, incur significant legal, accounting and
other professional service costs in connection with this type of acquisition,
including the costs of preparing Form 8-K's, 10-K's or 10-KSB's, agreements
and related reports and documents. Section 13 and 15(d) of the Securities
Exchange Act of 1934 require subject companies to provide specified
information about significant acquisitions, including certified financial
statements for the company acquired, covering one, two or three years,
depending on the relative size of the acquisition. The time and additional costs
that may be incurred by some target entities to prepare such statements may
preclude consummation of an otherwise desirable acquisition by us. Acquisition
prospects that do not have or are unable to obtain the required audited
financial statements may not be appropriate for acquisition so long as the
reporting requirements of the Exchange Act are applicable.
We have not conducted market research and are not aware of statistical data
that would support the extent to which private business owners and
entrepreneurs perceive there to be benefits from a merger or acquisition
transaction with a public entity, although we are aware that numerous
transactions of that type take place each year.
The analysis of new business opportunities will be undertaken by, or under the
supervision of, Messrs. Brown, Heil and Jenkins, who may not be considered
professional business analysts. We intend to concentrate on identifying
preliminary prospective business opportunities that may be brought to our
attention through our present associations. In analyzing prospective
business opportunities, we will consider such matters as:
available technical, financial and managerial resources;
working capital and other financial requirements;
history of operations, if any;
prospects for the future;
nature of present and expected competition;
quality, experience and depth of management;
potential need for further research, development, or exploration;
potential for growth or expansion;
the potential for profit;
the perceived public recognition or acceptance of products, services, or
trades;
name identification; and
other relevant factors.
We may not meet personally with management and key personnel of the business
opportunity as part of our investigation because of the lack of financial
resources. To the extent possible, we intend to utilize written reports and
investigation to evaluate the above factors. We will not acquire or merge
with any company for which audited financial statements cannot be obtained or
are not available.
We believe that we may utilize outside consultants or advisors to effectuate
our business plan. However, if we do retain the services of an outside
consultant or advisor, substantially all, if not all, of the cash fee earned
will need to be paid by the prospective merger/acquisition candidate, since we
have no cash assets to use for that purpose. We currently have no contracts or
agreements with any outside consultants.
We will not restrict our search for any specific kind of firms, but may
acquire a venture that is:
in its preliminary or development stage,
already in operation, or
in essentially any stage of its corporate life.
It is impossible to predict at this time the status of any business with which
we may become engaged. It is possible that potential candidates may need to
seek additional capital. However, we do not intend to seek or obtain funds to
finance the operation of any acquired business opportunity until we have
successfully consummated a merger or acquisition with that entity.
We anticipate that we will incur nominal expenses implementing our business
plan. Because we have no capital with which to pay these anticipated expenses,
it is likely that our principal shareholders will pay them in the form of
interest free loans.
Implementing the alternative business strategy
In designing and implementing a structure for a particular business
acquisition, we may become a party to a:
merger,
consolidation,
reorganization,
joint venture, or
licensing agreement with another corporation or entity.
We may also acquire stock or assets of an existing business. On the
consummation of a transaction, it is probable that our management and
shareholders will not be in control of the combined company. In addition, our
directors may, as part of the terms of the acquisition transaction, resign and
be replaced by new directors without a vote of our shareholders or may sell
their stock. Any terms of sale of the shares presently held by our officers
and/or directors will not be afforded to all other shareholders. Any and all
sales will only be made in compliance with the securities laws of the United
States and any applicable state or jurisdiction.
We believe that any securities issued to carry out our business plan would be
issued in reliance upon exemption from registration available under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of a transaction, we may agree to register all or a part of
the newly-issued securities immediately after the transaction is consummated
or at specified times thereafter. If we do register newly-issued
securities, of which there can be no assurance, the process will be undertaken
by the combined entity after we have successfully consummated a merger or
acquisition and are no longer considered a "shell" company. The issuance of
substantial additional securities and their potential sale into any
trading market that may develop in our securities may have a depressive effect
on the value of our securities in the future. No assurance can be given,
however, that any market for our securities will ever develop or be maintained.
While the actual terms of a transaction to which we may be a party cannot be
predicted, it may be expected that the parties to the business transaction
will find it desirable to avoid the creation of a taxable event and thereby
structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code. In order to obtain
tax-free treatment under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In that event, our shareholders would retain less than 20% of the
issued and outstanding shares of the surviving combined entity,
which would result in significant dilution in the equity of those shareholders.
Negotiations with target company management are expected to focus on the
percentage of our equity that the target company's shareholders would acquire
in exchange for all of their shareholdings in the target company. Depending
upon, among other things, the target company's assets and liabilities, our
shareholders will, in all likelihood, hold a substantially lesser percentage
ownership interest in the combined company following any merger or acquisition.
The percentage ownership may be subject to significant reduction in the event
that we acquire a target company with substantial assets.
We will participate in a business opportunity only after the negotiation and
execution of appropriate written agreements. Although the terms of these
agreements cannot be predicted, generally these type of agreements:
require some specific representations and warranties by all parties,
specify events of default,
detail the terms of closing and the conditions which must be satisfied
by each of the parties prior to and after closing,
outline the manner of bearing costs, including costs associated with
attorneys and accountants,
set forth remedies on default, and
include miscellaneous other deal specific terms.
We do not intend to provide our security holders with a complete disclosure
document, including audited financial statements, concerning an acquisition or
merger candidate and our business prior to the consummation of any acquisition
or merger transaction, except if required to do so by appropriate laws or
regulations.
Competition relating to the alternative business plan
We are and will remain an insignificant participant among the firms that
engage in the acquisition of business opportunities. There are many
established venture capital and financial concerns that have significantly
greater financial and personnel resources and technical expertise than do we.
In view of our extremely limited financial resources and management
availability, we will continue to be at a significant competitive disadvantage
compared to our competitors.
Maanagement
We have assembled a management team possessing a wide array of
experience. We believe that this management team, augmented by a small staff,
is capable of overseeing an active schedule. Our future success will be
materially dependent upon continued services and contributions of Messrs.
Brown, Heil, Jenkins and Burghardour founders, all of whom are actively
engaged in other business ventures. Messrs. Brown and Jenkins have
each had experience in promoting concerts. Messrs. Brown, Heil, Jenkins and
Burghard all have experience in structuring financial transactions. Mr.
Burghard, one of our founders, is not an officer or director but serves as an
unpaid advisor to us.Furthermore, the loss of the services of Mr. Brown could
have a material adverse effect on our business, financial condition and results
of operations.
Our senior management team, Messrs. Brown, Jenkins and Heil also serve in
executive and director positions with other businesses. Although they will be
active in our management, they are not required to spend a specified amount of
time with us nor are they able to devote all of their time and resources to
us. Further, we do not have employment agreements with them. We do not
anticipate hiring fulltime employees until the earnings from our operations
permits us to do so.
Facilities
We do not anticipate leasing facilities until the revenues from our
business permits us to do so. We will use the personal and business facilities
of Messrs. Brown and Jenkins which will be provided to us at no charge.
Management
Our management consists of:
<TABLE>
<S> <C> <C>
Name Age Title
David P. Brown 59 President, Chief Financial
Officer and
Chairman
Edward A. Heil 48 Vice President, Director
R. Bret Jenkins 41 Secretary, Director
</TABLE>
DAVID P. BROWN is an attorney in Salt Lake City, Utah engaged in limited
private practice since 1995. He teaches business law and alternative dispute
resolution at the University of Phoenix. He served as the chairman of the
securities law section of the Utah State Bar Association from 1993 to 1994.
Mr. Brown was a shareholder in the law firm of Brown, Larson, Jenkins and
Halliday from 1991 to 1995 and was a shareholder in the law firm of Mckay,
Burton and Thurman from 1985 to 1991. He holds a Juris Doctorate degree from
the University of Utah and is a member of the Utah State Bar Association. Mr.
Brown will devote approximately 50 percent of his time.
EDWARD A. HEIL is a certified public accountant. and He has been a
managing director, since January 1992, in Independent Network Group, Inc., a
financial consulting firm based in Bohemia, NY. From 1984 through December
1991 he was a partner in the accounting firm, Deloitte & Touche, LLP. From
1973 to 1984 he was employed in various professional capacities by Deloitte &
Touche, LLP. He presently serves as a director of World Financial Holdings,
Inc., a Utah-based marketing company and of Laminaire Corporation, a New
Jersey-based public company and. He is also the chairman of the board of
eSAFETYWORLD Inc., a New York company that completed a public offering in
February of 2000. Mr. Heil holds Bachelor of Arts and Master of Business
Administration degrees from New York University. Mr. Heil will devote
approximately 5 to10 percent of his time to us.
R. BRET JENKINS is an attorney in Salt Lake City, Utah engaged in limited
private practice since 1997. He presently serves as a director of World
Financial Holdings, Inc., a Utah-based marketing company and a director and a
director and chief financial officerCFO of eSAFETYWORLD, Inc., a New York
company that completed a public offering in February of 2000. Mr. Jenkins
was a shareholder in the law firm of Brown, Larson, Jenkins and Halliday
from 1991 to 1997 and was a associate in the law firm of McKay, Burton and
Thurman from 1987 to 1991. He received a Juris Doctorate degree from the
University of Utah in 1987 and a Bachelor of Arts degree in accounting from
the University of Utah in 1984. Mr. Jenkins is a member of the Utah State Bar
Association and the securities law section. He will devote 5 to10 percent of
his time to us.
Board of directors
All directors hold office until the completion of their term of office, which
is not longer than three years, or until their successors have been elected.
All officers are appointed annually by the board of directors and serve at the
discretion of the board.
The board of directors will have audit and compensation committees. The audit
committee will review the results and scope of the audit and other services
provided by our independent auditors, review and evaluate our system of
internal controls. The compensation committee will manage our anticipated
stock option plan and review and recommend compensation arrangements for our
officers.
Directors shall receive $4,000 per year and $350 per meeting as
compensation for serving on the board of directors provided that we have the
resources to pay director fees.. All directors are entitled to be reimbursed
by us for any expenses incurred in attending directors' meetings. We also
intend to obtain officers and directors liability insurance, although no
assurance can be given that it will be able to do so.
Executive compensation
No officer, director or employee has received annual compensation of
$100,000, and no director, officer or employee has a contract or commitment to
receive annual compensation in excess of $100,000.
Conflicts of interest
None of our key personnel is required to commit full time to our affairs and,
accordingly, these individuals may have conflicts of interest in allocating
management time among their various business activities. Certain of these key
personnel may in the future become affiliated with entities, including other
"blank check" companies engaged in business activities similar to those
intended to be conducted by us. In the course of their other business
activities, certain key personnel may become aware of investment and business
opportunities which may be appropriate for presentation to us, as well as the
other entities with which they are affiliated. As such, they may have
conflicts of interest in determining to which entity a particular
business opportunity should be presented.
Each officer and director is, so long as he is officer or director subject to
the restriction that all opportunities contemplated by our plan of operation
that come to his attention, either in the performance of his duties or in any
other manner, will be considered opportunities of, and be made available to us
and the companies that he is affiliated with on an equal basis. A breach of
this requirement will be a breach of the fiduciary duties of the officer or
director. If we or the companies to which the officer or director is
affiliated each desire to take advantage of an opportunity, then the
applicable officer or director would abstain from negotiating and voting
upon the opportunity. However, the officer or director may still take
advantage of opportunities if we should decline to do so. Except as set forth
above, we have not adopted any other conflict of interest policy in
connection with these types of transactions.
There are no agreements or understandings for either David Brown, Edward A.
Heil or R. Bret Jenkins to resign at the request of another person. In
addition, they are not acting on behalf of or will not act at the direction of
any other person except at the time of the acquisition or merger and at the
request of the controlling persons of the acquisition or merger candidate. We
expects that the controlling persons of the acquisition or merger candidate
will ask all of the current officers and directors to resign at the time of
the acquisition or merger because they will become controlling persons of the
combined company.
Stock option plan
We have a stock option plan which expires ten years from July 15, 2000,
the date adopted and enables us to grant incentive stock options, nonqualified
options and stock appreciation rights for up to an aggregate of 1,500,000
shares of our common stock. Incentive stock options granted under the plan
must conform to applicable federal income tax regulations and have an
exercise price not less than the fair market value of shares at the date of
grant (110% of fair market value for ten percent or more stockholders). Other
options and SARs may be granted on terms determined by the board of directors
or a committee of the board of directors. No options or other awards have been
granted as of July 28, 2000.
Management's Discussion and analysis of results of operations and financial
condition
We have not yet commenced operations.
Liquidity
We do not have any credit facilities or other commitments for debt or
equity. Our plan is to rely on borrowings from shareholders to fund the needs
for concert advances. No assurances can be given that advances will be made
available to us by shareholders and others when needed.
Our fixed expenses are nominal at this time and will remain so until we
commence operations. We cannot predict tour cash requirements to undertake
operations. Those requirements would be determined by the artists who are
booked, the venues selected and the number of shows scheduled. Each factor
causes a significant variation in requirements. We will not undertake any
event unless we have obtained sufficient financing to meet the minimum
guarantees associated with that event.
New Accounting Pronouncements
No new pronouncement issued by the Financial Accounting Standards Board, the
American Institute of Certified Public Accountants or the Securities and
Exchange Commission is expected to have a material impact on our financial
position or reported results of operations.
Description of common stock
General
We are authorized to issue up to 24,000,000 shares of common stock with
par value of $.001. At April 30, 2000 we had 2,000,000 shares of common stock
outstanding held by approximately 30 holders of record. These shares were
issued for an aggregate consideration of $10,000. The holders of common stock
are entitled to one vote for each share of common stock on all matters on
which the holders of common stock are entitled to vote. The holders of
common stock are entitled to receive ratably dividends when, as and if
declared by our board of directors out of funds legally available for the
payment of dividends. In the event that we liquidate, dissolve or wind up our
business, the holders of common stock are entitled, subject to the rights of
holders of our preferred stock, if any, to share ratably in all assets remaining
available for distribution after payment of liabilities and after provision is
made for each class of stock having preference over the common stock.
The holders of common stock have no preemptive or conversion rights, and
we may not subject them to further calls or assessments. There are no
redemption or sinking fund provisions applicable to the common stock. The
outstanding shares of common stock are fully paid and nonassessable.
We are serving as our own transfer agent and registrar for our common
stock.
DIVIDENDS
We have never paid any cash dividends on shares of common stock and do not
anticipate that we will pay dividends in the foreseeable future. We intend to
apply any earnings to fund the development of our business. Purchase of
shares of common stock is inappropriate for investors seeking current or near
term income.
Other
We intend to file a Form 2-11 to have our shares of common stock listed
and traded on the Over-the-Counter Electronic Bulletin Board. We cannot give
any assurances as to whether we will be successful in having our shares listed
on the Electronic Bulletin Board. The selling stockholders and any of their
pledgees, assignees and successors-in-interest may, from time to time, sell
any or all of their shares of common stock on any stock exchange, market or
trading facility on which the shares become traded or in private transactions.
These sales may be at fixed or negotiated prices. The selling stockholders may
use any one or more of the following methods when selling shares:
ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal to
facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-
dealer forits account;
an exchange distribution in accordance with the rules of the
applicable exchange;
privately negotiated transactions;
short sales;
broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a the offering stipulated price per share;
a combination of any of the above methods of sale; or
any other method permitted pursuant to applicable law.
Broker-dealers who act in connection with the sale of the common stock may
also be deemed to be underwriters. Profits on any resale of the common stock
as a principal by such broker- dealers and any commissions received by the
broker-dealers may be deemed to be underwriting discounts and commissions
under the Securities Act of 1933, as amended.
If required, the following information will be disclosed in a prospectus
supplement or, if necessary, an amendment to the registration statement:
the names of any of agent, dealer or underwriter;
the price at which the common stock is to be sold;
the number of shares of common stock involved;
any applicable commissions or discounts; and
other facts material to the transaction.
Under applicable rules and regulations under the Securities Exchange Act of
1934, any person engaged in a distribution of our common stock may not
simultaneously engage in market making activities for the common stock for a
period beginning when such person becomes a distribution participant and
ending upon the person's completion of participation in a distribution,
including stabilization activities in the common stock to effect covering
transactions, to impose penalty bids or to effect passive market making bids.
In addition and without limiting the foregoing, in connection with
transactions in our common stock, we and the selling stockholders will be
subject to applicable provisions of the Securities Exchange Act of 1934 and
the rules and regulations issued under this act, including, without
limitation, Rule 10b-5 and, insofar as we and the selling stockholders are
distribution participants, Regulation M and Rules 100, 101, 102, 103,
104 and 105 of that act. All of the foregoing may affect the marketability of
our common stock.
The selling stockholders will pay all commissions and other expenses
associated with their sale of our common stock. We are paying to register the
common stock issued hereby.
General market risks
There is no public market for our common stock, and there can be no
assurance that any market will develop in the foreseeable future. Transfer
of our common stock may also be restricted under the securities or blue sky
laws of various states and foreign jurisdictions. Consequently, investors may
not be able to liquidate their investments and should be prepared to hold the
common stock for an indefinite period of time. Our proposed trading symbol
does not simply that a liquid and active market will be developed or
sustained for our common stock.
The market price for our common stock, if publicly traded, is likely to be
highly volatile and subject to wide fluctuations in response to factors, many
of which are beyond our control, including the following:
actual or anticipated variations in quarterly operating results;
changes in financial estimates by securities analysts;
announcements by us or our competitors of significant acquisitions,
strategic partnerships, joint ventures or capital commitments;
additions or departures of key personnel;
release of lock-up or other transfer restrictions on our outstanding
shares of common stock or sales of additional shares of common
stock; and
potential litigation.
The market prices of the securities of microcap companies have been especially
volatile. Broad market and industry factors may adversely affect the market
price of our common stock, regardless of our actual operating performance. In
the past, following periods of volatility in the market price of their stock,
many companies have been the subject of securities class action litigation. A
shareholder lawsuit could result in substantial costs and a diversion of
management's attention and resources and would adversely affect our stock price.
We have 24,000,000 authorized shares of common stock. The board of directors,
without stockholder approval, could issue up to 22,000,000 shares of common
stock and 1,000,000 shares of blank check preferred stock upon whatever terms
it determines to whomever it determines, including persons or entities that
would help our present management.
Penny stock restrictions
Until our shares of common stock qualify for inclusion in the Nasdaq system,
the trading of our securities, if any, will be in the over-the-counter markets
which are commonly referred to as the "pink sheets" or on the OTC Bulletin
Board. As a result, an investor may find it difficult to dispose of, or to
obtain accurate quotations as to the price of the securities offered.
Rule 15g-9 establishes the definition of a "penny stock," for purposes
relevant to us, as any equity security that has a market price of less than
$5.00 per share or with an exercise price of less than $5.00 per share,
subject to a limited number of exceptions. For any transaction involving a
penny stock, unless exempt, the penny stock rules require that:
a broker or dealer approve a person's account for transactions in
penny stocks; and
the broker or dealer receive from the investor a written agreement to
the transaction setting forth the identity and quantity of the penny stock to
be purchased.
In order to approve a person's account for transactions in penny stocks, the
broker or dealer must:
obtain financial information and investment experience and objectives
of the person; and
make a reasonable determination that the transactions in penny
stocks are suitable for that person and that person has sufficient knowledge
and experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny
stock, a disclosure schedule prepared by the Commission relating to the penny
stock market, which, in highlight form sets forth:
the basis on which the broker or dealer made the suitability
determination; and
that the broker or dealer received a signed, written agreement from
the investor prior to the transaction.
Disclosure also has to be made about:
the risks of investing in penny stock in both public offering and in
secondary trading, and
commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and the rights and
remedies available to an investor in cases of fraud in penny stock
transactions.
Finally, monthly statements have to be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks.
In order to continue to be included on NASDAQ, a company must maintain:
$2,000,000 in net tangible assets, or
$35,000,000 in market capitalization, or
$500,000 of net income in latest fiscal year or two of the last three
fiscal years, a $1,000,000 market value of its publicly-traded securities
and 500,000 shares in public float.
Continued inclusion requires two market-makers and a minimum bid price of
$1.00 per share.
We intend to seek a transaction with any merger or acquisition candidate
that will allow our securities to be traded without the penny stock
limitations. However, there can be no assurances that, upon a successful
merger or acquisition, our securities will qualify for listing on NASDAQ or
some other national exchange, or be able to maintain the maintenance criteria
necessary to ensure continued listing.
Litigation
We are not involved in any litigation.
Indemnification of Officers and Directors
Our bylaws provide that we shall indemnify our officers, directors,
employees and other agents to the fullest extent permitted by Nevada law. In
addition, our certificate of incorporation provides that, to the fullest
extent permitted by Nevada law, our directors will not be liable for
monetary damages for breach of the directors' fiduciary duty of care to us or
our shareholders. This provision in the certificate of incorporation does not
eliminate the directors' duty of care, and in appropriate circumstances
equitable remedies including an injunction or other forms of nonmonetary
relief would remain available under Nevada law. Each director will continue
to be liable for breach of the director's duty of loyalty to us or our
shareholders, for acts or omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for any transaction from which the
director derived an improper personal benefit and for improper distributions
to shareholders. In addition, this provision does not affect a director's
responsibilities under any other laws, including federal securities laws or
state or federal environmental laws.
We have been advised that, in the opinion of the SEC, this type of
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against these types of liabilities, other than the payment by
us of expenses incurred or paid by a director, officer or controlling person
in the successful defense of any action, suit or proceeding, is asserted by a
director, officer or controlling person in connection with the securities
being registered, we will submit the question of whether indemnification by us
is against public policy to an appropriate court and will be governed by the
final adjudication of the case.
There is no pending litigation or proceeding involving a director or
officer as to which indemnification is or may be sought.
Principal and Selling Shareholders
The following table sets forth information known to us regarding
beneficial ownership of our common stock at the date of this prospectus by:
each person known by us to own, directly or beneficially, more than
5% of our common stock,
each of our directors, and
all of our officers and directors as a group.
Except as otherwise indicated, we believe that the beneficial owners of
the common stock listed below, have sole investment and voting power in
connection with the shares. The table showing the shares of common stock
owned after the offering assumes that the officers and directors do not buy
any shares in the offering.
<TABLE>
<S> <C>
Name Percentage of
Shares Owned
Beneficially (1)
Name Percentage of
shares owned
David Brown 125,000
Edward A. Heil 500,000
R. Bret Jenkins 500,000
Claire HeilK. Ivan F. Gothner 75,000
James Brownfiel 75,000
Raymond T. Burghard 500,000
Stephen B. Schneer 75,000
Diane Kohli 75,000
Bridget C. Owens 75,000
</TABLE>
Legal matters
The validity of the common stock offered hereby will be passed upon for
us by Stephen B. Schneer, LLC, New York.
Experts
The financial statements as of April 30, 2000 (inception date) included
in this prospectus have been so included in reliance on the report of HJ &
Associates, LLC independent certified public accountants, given on the
authority of that firm as experts in auditing and accounting.
Additional information
We will file reports, proxy statements and other information with the
SEC. Those reports, proxy statements and other information may be obtained:
At the public reference room of the SEC, Room 1024, Judiciary Plaza,
450 Fifth Street, N.W. Washington, D.C. 20549;
At the public reference facilities at the SEC's regional offices
located at Seven World Trade Center, 13th Floor, New York, NY 10048 or
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661;
By writing to the SEC, Public Reference Section, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549;
From the Internet site maintained by the SEC at http://www.sec.gov,
which contains reports, proxy information statements and other information
regarding issuers that file electronically with the SEC.
We have filed with the SEC a registration statement under the Securities
Act of 1933, for the common stock offered in this prospectus. This prospectus,
which is a part of the registration statement, does not contain all the
information included in that registration statement, some portions of which
have been omitted under the rules and regulations of the SEC. For further
information regarding us and our common stock, please read that registration
statement, including exhibits filed with it, copies of which may be inspected
and copied at the facilities of the SEC. Copies of the registration
statement, including exhibits, may be obtained from the Public Reference
Section of the SEC at the address listed above upon payment of the fee
prescribed by the SEC. Information regarding the operation of the SEC's
public reference facilities may be obtained by calling the SEC at
1-800-SEC-0330.
We intend to distribute to our stockholders annual reports containing
financial statements audited and reported upon by our independent public
accountants after the close of each fiscal year, and will make available
other periodic reports as we determine to be appropriate or as may be
required by law. Our fiscal year ends December 31 each year.
AMP PRODUCTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
APRIL 30, 2000
C O N T E N T S
Independent Auditors'= Report. . . . . . . . . . . . . . . F-3
Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . F-4
Statement of Operations. . . . . . . . . . . . . . . . . . F-5
Statement of Stockholders'= DeficiencyEquity . . . . . . . F-6
Statement of Cash Flows. . . . . . . . . . . . . . . . . . .F-7
Notes to the Financial Statements. . . . . . . . . . . . . F-8
INDEPENDENT AUDITORS'= REPORT
To the Board of Directors
AMP Productions, Inc.
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of AMP Productions, Inc. (a
development stage company) as of April 30, 2000 and the related statements of
operations, stockholders deficiencyequity and cash flows from inception on
February 16, 2000 through April 30, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AMP Productions, Inc. (a
development stage company) as of April 30, 2000 and the results of its
operations and its cash flows from inception on February 16, 2000 through
April 30, 2000 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company is a development stage company with no
significant operating revenues to date, which raises substantial doubt about
its ability to continue as a going concern. Managements plans in regard
to these matters are also described in Note 3. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/
HJ & Associates, LLC
Salt Lake City, Utah
May 12, 2000
F-3
AMP PRODUCTIONS, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
April 30,
2000
CURRENT ASSETS
Cash $ 10,000
Total Current Assets 10,000
OTHER ASSETS
Deferred offering costs (Note 5) 15,000
Total Other Assets 15,000
TOTAL ASSETS $ 1025,000
LIABILITIES AND STOCKHOLDERS' DEFOICIENCYEQUITY
CURRENT LIABILITIES
Accrued expenses $ 15,000
Total Current Liabilities 15,000
STOCKHOLDERS'= DeficiencyEQUITY
Preferred stock at $0.001 par value; 1,000,000 shares
authorized, -0- outstanding -
Common stock at $0.001 par value; authorized 24,000,000
shares; 2,000,000 shares issued and outstanding 2,000
Additional paid-in capital 8,000
Loss accumulated in development stage
(15,000)
Total Stockholders' Deficiency= Equity (510,000)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCYEQUITY $1025,000
See notes to financial statements.
F-4
AMP PRODUCTIONS, INC.
(A Development Stage Company)
Statement of Operations
From
Inception on
February 16,
2000 Through
April 30,
2000
REVENUE $ -
EXPENSES 15,000-
NET LOSS $ (15,000)-
BASIC LOSS PER SHARE $(.01)-
See notes to financial statements.
F-5
AMP PRODUCTIONS, INC.
(A Development Stage Company)
Statement of Stockholders'= DeficiencyEquity
From Inception on February 16, 2000 Through April 30, 2000
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
Inception on
February 16, 2000 - $ - - $ -
Common stock
issued for cash
at $0.005 per
share 2,000,000 2,000 8,000 -
Net loss
for the
period ended
April 30, 2000 - - 15,000) -
Balance,
April 30,
2000 2,000,000$ 2,000 8,000 (15,000)
See notes to financial statements.
F-6
AMP PRODUCTIONS, INC.
(A Development Stage Company)
Statement of Cash Flows
From February 16, 2000 (Inception) to April 30, 2000
From
Inception on
February 16,
2000 Through
April 30,
2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (15,000)
Changes in operating assets and liabilities:
(Increase) decrease in deferred offering costs (15,000)
Increase (decrease) in accrued expenses 15,000
Net Cash (Used) by Operating Activities -
CASH FLOWS FROM INVESTING ACTIVITIES -
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock for cash 10,000
Net Cash Provided by Financing Activities 10,000
INCREASE IN CASH AND CASH EQUIVALENTS 10,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD -
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 10,000
Cash Paid For:
Interest $ -
Income taxes $ -
See notes to financial statements.
F-7
AMP PRODUCTIONS, INC.
(A Development Stage Company)
Notes to the Financial Statements
April 30, 2000
NOTE 1 - ORGANIZATION
AMP Productions, Inc. (the "Acompany"@) was incorporated under the laws
of the State of Nevada on February 16, 2000 (inception). The Company, which
has not yet begun operations, will promote concerts, festivals and other
entertainment events.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting. The Company has elected a fiscalcalendar year ending on April
30.
b. Provision for Taxes
No provision for income taxes has been made due to the limited
activities of the Company.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
d. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
e. Basic Loss Per Common Share
Basic loss per common share has been calculated based on the weighted
average number of shares outstanding during the period.
April 30, 2000
Numerator - loss $ -
Denominator - weighted average number of
shares outstanding 1,250,000
Loss per share $ 0.00
F-8
AMP PRODUCTIONS, INC.
(A Development Stage Company)
Notes to the Financial Statements
April 30, 2000
NOTE 3 - GOING CONCERN
The Company'=s financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business.
The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. It is the
intent of the Company to complete a limited offering of its common stock. In
the interim, the shareholder of the Company have committed to meeting its
minimal operating expenses.
NOTE 4 - STOCK TRANSACTIONS
On February 16, 2000, the Board of Directors issued 2,000,000 shares
of common stock for $10,000 to the founding shareholders of the Company.
The Company has a stock option plan which expires ten years from July
15, 2000, the date adopted, and enables it to grant incentive stock options,
nonqualified options and stock appreciation rights for up to an aggregate of
1,500,000 shares of its common stock. Incentive stock options granted
under the plan must conform to applicable federal income tax regulations and
have an exercise price not less than the fair market value of shares at the
date of grant (110% of fair market value for ten percent or more stockholders).
Other options and SARs may be granted on terms determined by the board of
directors or a committee of the board of directors. No options or other
awards have been granted as of July 29, 2000.
NOTE 5 - DEFERRED OFFERING COSTS
The Company has deferred and capitalized certain costs related to
raising money. These costs of $15,000 will be netted against paid-in capital
when the offeringis complete.
MAIN DOCUMENT ONLY.PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 22. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has a provision in its charter, by-laws, or other contracts
providing for indemnification of its officers and directors.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any such
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 23. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses payable by the Registrant in connection with the
registration and distribution of the Common Stock registered hereby are as
follows:
<TABLE>
<S> <C>
SEC Filing fee $528
Accounting fees 1,000
Legal and professional 7,500
Other 5972
Total $15,000
</TABLE>
ITEM 24. RECENT SALES OF UNREGISTERED SECURITIES.
All issuances were under Section 4(2) unless otherwise indicated. The
issuances under 4(2) were to officers, directors or employees or a limited
number of unaffiliated persons or entities.
ITEM 25. EXHIBITS.
The following exhibits can be found as exhibits to the filings listed.
<TABLE>
<S> <C>
3.1 Articles of Incorporation*
3.2 By-Laws*
4.1 Specimen of Certificate of Common Stock*
5.1 Opinion of Stephen B. Schneer LLC*
10.7 Stock Option Plan
22.1 Consent of HJ Associates, LLC
23.2 Consent of Stephen B. Schneer LLC (included
in exhibit 5.1)*
27.1 Financial Data Schedule
* Filed Previously
</TABLE>
ITEM 26. UNDERTAKINGS.
Subject to the terms and conditions of Section 15(d) of the Securities
and Exchange Act of 1934, the undersigned registrant hereby undertakes to file
with the Securities and Exchange Commission such supplementary and periodic
information, documents and reports as may be prescribed by any rule or
regulation of the Commission hereto before or hereafter duly adopted
pursuant to authority conferred in that section.
The Registrant further undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b). If, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this SB-2 Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Salt Lake City,
State of Utah, on the _81__th day of JuneAugust, 2000.
AMP PRODUCTIONS, INC.
By /s/ David Brown
------------------------------------
David Brown, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ---------
/s/ Edward A. Heil Director August 1June 9, 2000
-------------------------------
Edward A. Heil
/s/ R. Bret Jenkins Director August 1 Jne 9, 2000
-------------------------------
R. Bret Jenkins
Exhibit 10.7
AMP PRODUCTIONS, INC.
2000 STOCK INCENTIVE PLAN
1. Purpose.
The purpose of this Plan is to enable AMP Productions, Inc. and its
affiliates to recruit and retain capable employees for the successful conduct
of its business and to provide an additional incentive to directors, officers
and other eligible key employees, consultants and advisors upon whom rest major
responsibilities for the successful operation and management of the Company
and its affiliates.
2. Definitions.
For purposes of the Plan:
2.1 "Adjusted Fair Market Value" means, in the event of a
Change in Control, the greater of (i) the highest price per Share of Common
Stock paid to holders of the Shares of Common Stock in any transaction (or
series of transactions) constituting or resulting in a Change in Control or
(ii) the highest Fair Market Value of a Share during the ninety (90) day
period ending on the date of a Change in Control.
2.2 "Affiliate Corporation" or "Affiliate" shall mean any corporation,
directly or indirectly, through one of more intermediaries, controlling,
controlled by or under common control with the Company.
2.3 "Agreement" means the written agreement between the Company and an
Optionee evidencing the grant of an Award.
2.4 "Award" means an Incentive Stock Option, Nonqualified
Stock Option or Stock Appreciation Right granted or to be granted pursuant to
the Plan.
2.5 "Board" means the Board of Directors of the Company.
2.6 "Cause" means:
(a) Solely with respect to Nonemployee Directors, the commission of an
act of fraud or an act of embezzlement, misappropriation or conversion of
assets or opportunities of the Company or any Affiliate, and
(b) For all other purposes, unless otherwise defined in
the Agreement evidencing a particular Award, an Optionee (other than a
Nonemployee Director) (i) intentional failure to perform reasonably assigned
duties, (ii) dishonesty or willful misconduct in the performance of duties,
(iii) involvement in a transaction in connection with the performance of
duties to the Company which transaction is adverse to the interests of the
Company and which is engaged in for personal profit, or (iv) willful
violation of any law, rule or regulation in connection with the performance of
duties (other than traffic violations or similar offenses).
2.7 "Change in Capitalization" means any increase or reduction in the
Number of Shares, or any change (including, but not limited to, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, spin-off, split-up,
issuance of warrants or rights or debentures, stock dividend, stock split or
reverse stock split, combination or exchange of shares, repurchase of
shares, change in corporate structure or otherwise.
2.8 A "Change in Control" shall mean the occurrence during the term of the
Plan of either of any "person" (as such term is used in Section 13(c) and
14(d) of the Exchange Act), other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or a corporation
owned directly or indirectly by the stockholders of the Company, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of Securities of the Company representing 50% or more
of the total voting power represented by the Company's then outstanding voting
securities, except that the issuance of shares of Common Stock in a public
offering made pursuant to the Securities Act of 1933, as amended shall not
constitute a Change of Control.
2.9 "Code" means the Internal Revenue Code of 1986, as amended.
2.10 "Committee" means a committee, as described in Section
3.1, appointed by the Board to administer the Plan and to perform the
functions set forth herein.
2.11 "Company" means AMP Productions, Inc (including any and all
subsidiaries currently existing or hereafter acquired or established).
2.12 "Director Option" means an Option for Shares, Stock Appreciation
Rights or Units granted pursuant to Section 6.
2.13 "Disability" means a physical or mental infirmity which impairs an
Optionee's ability to perform substantially his or her duties for a period of
one hundred eighty (180) consecutive days.
2.14 "Disinterested Director" means a director of the Company who is
"disinterested" within the meaning of Rule 16b-3 under the Exchange Act.
2.15 "Eligible Individual" means any director (other than a Nonemployee
Director), officer or employee of, or consultant or advisor to, the Company or
an Affiliate who is receiving cash compensation and who is designated by the
Committee as eligible to receive Awards subject to the conditions set forth
herein.
2.16 "Employee Option" means an option granted pursuant to Section 5.
2.17 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.18 "Fair Market Value" on any date means the average of the high and low
sales prices of the Shares on such date on the principal securities exchange
on which such Shares are listed, or if such Shares are not so listed or
admitted to trading, the arithmetic mean of the per Share closing bid price
and closing asked price per Share on such date as quoted on the quotation
system of the Nasdaq Stock Market, Inc. or such other market in which such
prices are regularly quoted, or, if there have been no published bid or asked
quotations with respect to Shares on such date, the Fair Market Value as
established by the Board in good faith and, in the case of an Incentive Stock
Option, in accordance with Section 422 of the Code.
2.19 "Incentive Stock Option" means an Option satisfying the requirements of
Section 422 of the Code and designated by the Committee as an Incentive Stock
Option.
2.20 "Nonemployee Director" means a director of the Company who is not an
employee of the Company or an Affiliate.
2.21 "Nonqualified Stock Option" means an Option which is not an Incentive
Stock Option.
2.22 "Option" means a Nonqualified Stock Option, an Incentive Stock Option,
a Director Option, an Employee Option or any or all of them.
2.23 "Optionee" means a person to whom an Option is being granted under the
Plan.
2.24 "Outside Director" means a director of the Company who is an "outside
director" within the meaning of Section 162(m) of the Code and the regulations
promulgated thereunder.
2.25 "Parent" means any corporation which is a parent corporation (within the
meaning of Section 424(e) of the Code) with respect to the Company.
2.26 "Plan" means The SL Group, Inc. 1999 Stock Option Plan.
2.27 "Pooling Transaction" means an acquisition of the Company in a
transaction which is intended to be treated as a "pooling of interests" under
generally accepted accounting principles as defined in Opinion No. 16 of
the Accounting Principles Board and the amendments thereto.
2.28 "Shares" means the common stock, par value $.001 per share, of the Company
and any securities or other consideration issuable in respect of Shares in
connection with a Change in Capitalization or Change in Control.
2.29 "Stock Appreciation Right" or "SARs" means a right to receive all or some
portion of the increase in the value of the Shares as provided in Section 8
hereof.
2.30 "Subsidiary" means any corporation which is a subsidiary corporation
(within the meaning of Section 424(f) of the Code) with respect to the Company.
2.31 "Successor Corporation" means a corporation, or a parent or subsidiary
thereof within the meaning of 424(a) of the Code, which issues or assumes a
stockoption in a transaction to which Section 424(a) of the Code applies.
2.32 "Ten Percent Stockholder" means an Eligible Individual, who, at the time an
Incentive Stock Option is to be granted to him or her owns (within the meaning
of Section 422(b) (6) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company, or of a Parent or a Subsidiary thereof.
3. Administration.
3.1 The Plan shall be administered by the Committee which shall hold meetings
at such times as may be necessary for the proper administration of the Plan.
The Committee shall keep minutes of its meetings. A quorum shall consist of
not fewer than two (2) members of the Committee and a majority of a quorum
may authorize any action. Any decision or determination reduced to writing
and signed by a majority of all of the members shall be as fully effective as
if made by a majority vote at a meeting duly called and held. The Committee
shall consist of at least two (2) directors of the Company. If the Board of
Directors has any Disinterested Directors or Outside Directors, at least one
such Disinterested or Outside Director shall be on the Committee. No member of
the Committee shall be liable for any action, failure to act, determination or
interpretation made in good faith with respect to this Plan or any transaction
hereunder, except for liability arising from his or her own willful misfeasance,
gross negligence or reckless disregard of his or her duties. The Company
hereby agrees to indemnify each member of the Committee for all costs and
expenses and, to the extent permitted by applicable law, any liability
incurred in connection with defending against, responding to, negotiating for
the settlement of or otherwise dealing with any claim, cause of action or
dispute of any kind arising in connection with any actions in administering
this Plan or in authorizing or denying authorization to any transaction
hereunder.
3.2 Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time to:
(a) determine those Eligible Individuals to whom Employee Options shall be
granted under the Plan and the number of Employee Options to be granted and to
prescribe the terms and conditions (which need not be identical) of each such
Employee Option, including the purchase price per Share subject to each
Employee Option, and make any amendment or modification to any Option
Agreement consistent with the terms of this Plan;
(b) construe and interpret the Plan and the Options granted hereunder and to
establish, amend and revoke rules and regulations for the administration of
the Plan, including, but not limited to, correcting any defect or supplying
any omission, or reconciling any inconsistency in the Plan or in any Agreement,
in the manner and to the extent it shall deem necessary or advisable so that
the Plan complies with applicable law, including Rule 16b-3 under the Exchange
Act and the Code to the extent applicable, and otherwise to make the Plan
fully effective. All decisions and determinations by the Committee or the
exercise of this power shall be final, binding and conclusive upon the
Company, its Affiliate Corporations, the Options, and all other persons having
any interest therein;
(c) determine the duration and purposes for leaves of absence which may be
granted to an Optionee on an individual basis without constituting a
termination of employment or service for purposes of this Plan;
(d) exercise its discretion with respect to the powers and rights granted to
it as set forth in the Plan; and
(e) exercise such powers and perform such acts as it deems necessary or
advisable to promote the best interests of the Company with respect to the Plan.
4. Stock Subject to the Plan.
4.1 The maximum number of Shares that may be made the subject of Options
granted under the Plan is 1,500,000. Upon a Change in Capitalization the
maximum number of Shares shall be adjusted in number and kind pursuant to
Section 11. The Company shall reserve for purposes of the Plan, out of its
authorized but unissued Shares or out of Shares held in the Company's
treasury, or partly out of each, such number of Shares as shall be determined
by the Board.
4.2 Upon the granting of an Option, the number of Shares available
under Section 4.1 for the granting of further Options shall be reduced by the
number of shares subject to such Option granted. Whenever any outstanding
Option or portion thereof expires, is canceled or is otherwise terminated for
any reason without having been exercised or payment having been made in
respect of the entire Option, the Shares allocable to the expired,
canceled or otherwise terminated portion of the Option may again be the
subject of Options granted hereunder.
5. Option Grants for Eligible Individuals.
5.1 Authority of Committee. Subject to the provisions of the Plan, the
Committee shall have full and final authority to select those Eligible
Individuals who will receive Employee Options, the terms and conditions of
which shall be set forth in an Agreement.
5.2 Purchase Price. The purchase price or the manner in which the
purchase price is to be determined for Shares under each Employee Option shall
be determined by the Committee and set forth in the Agreement; provided,
however, that the purchase price per Share under each Incentive Stock Option
shall not be less than 100% of the Fair Market Value of a Share on the date
the Incentive Stock Option is granted (110% in the case of an Incentive Stock
Option granted to a Ten-Percent Stockholder).
5.3 Maximum Duration. Employee Options granted hereunder shall be
for such term as the Committee shall determine, provided that an Incentive
Stock Option granted hereunder shall not be exercisable after the expiration
of ten (10) years from the date it is granted (five (5) years in the case of
an Incentive Stock Option granted to a Ten-Percent Stockholder), and a
Nonqualified Stock Option shall not be exercisable after the expiration of
ten (10) years from the date it is granted. The Committee may, subsequent to
the granting of any Employee Option, extend the term thereof but in no event
shall the term as so extended exceed the maximum term provided for in the
preceding sentence.
5.4 Vesting. Subject to Section 7.5 hereof, each Employee Option
shall become exercisable in such installments (which need not be equal) and at
such times as may be designated by the Committee and set forth in the
Agreement. To the extent not exercised, installments shall accumulate and be
exercisable, in whole or in part, at any time after becoming exercisable, but
not later than the date the Employee Option expires. The Committee may
accelerate the exercisability of any Option or portion thereof at any time.
5.5 Modification. No modification of an Employee Option shall
adversely alter or impair any rights or obligations under the Employee Option
without the Optionee's consent.
6. Option Grants for Nonemployee Directors.
6.1 Purchase Price. The purchase price for Shares or SARs under
each Director Option shall be not less than to 100% of the Fair Market Value
of such Shares on the date immediately preceding the date of the grant
unless specifically determined to be otherwise by the Committee.
6.2 Vesting. Subject to Sections 6.3 and 7.5 each Director
Option shall become exercisable within four (4) equal annual installments
beginning on the date of grant; provided, however, that the Optionee
continues to serve as a Director as of such dates. If an Optionee ceases to
serve as a Director for any reason, the Optionee shall have no rights
with respect to that portion of a Director Option which has not then vested
pursuant to the preceding sentence and the Optionee shall automatically
forfeit thatportion of the Director Option which remains unvested.
6.3 Limitations on Amendment. The provisions in this Section 6
and Section 7.1 shall not be amended more than once every six (6) months,
other than to comport with changes in the Code or the rules and regulations
thereunder.
7. Terms and Conditions Applicable to All Options.
7.1 Duration. Each Option shall terminate on the date which is
the tenth anniversary of the grant date, unless terminated earlier as follows:
(a) If an Optionee's employment or service terminates for any
reason other than Disability, death or Cause, the Optionee may for a period
of three (3) months after such termination exercise his or her Option to the
extent, and only to the extent, such Option or portion thereof was vested and
exercisable as of the date of the Optionee's employment or service terminated,
after which time the Option shall automatically terminate in full.
(b) If an Optionee's employment or service terminates by
reason of the Optionee's Disability, the Optionee may, for a period of one
(1) year after such termination, exercise his or her Option to the
extent, and only to the extent, such Option or portion thereof was vested and
exercisable as of the date the Optionee's employment or service terminated,
after which time the Option shall automatically terminate in full.
(c) If an Optionee's employment or service terminates for
Cause, the Option granted to the Optionee hereunder shall immediately
terminate in full and no rights thereunder may be exercised.
(d) If an Optionee dies while employed or in the service of
the Company or an Affiliate or within the three (3) month or twelve (12) month
period described in clause (a) or (b), respectively, of this Section 7.1 the
Option granted to the Optionee may be exercised at any time within twelve
(12) months after the Optionee's death by the person or persons to whom such
rights under the Option shall pass by will, or by the laws of descent and
distribution, after which time the Option shall terminate in full; provided,
however, that an Option may be exercised to the extent, and only to the
extent, such Option or portion thereof was exercisable on the date of
death or earlier termination of the Optionee's services as a Director.
Notwithstanding clauses (a) through (d) above, the Agreement evidencing the
grant of an Employee Option may, in the Committee's sole and absolute
discretion, set forth additional or different terms and conditions applicable
toEmployee Options upon a termination or change in status of the employment or
service of an Eligible Individual. Such terms and conditions may be
determined at the time the Employee Option is granted or thereafter.
7.2 Non-transferability. No Option granted hereunder shall be
transferable by the Optionee to whom granted except by will or the laws of
descent and distribution, and an Option may be exercised during the lifetime
of such Optionee only by the Optionee or his or her guardian or legal
representative. The terms of such Option shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
7.3 Method of Exercise. The exercise of an option shall be made
only by a written notice delivered in person or by mail to the Secretary or
Chief Financial Officer of the Company at the Company's principal executive
office, specifying the number of Shares to be purchased and accompanied by
payment therefor and otherwise in accordance with the Agreement pursuant to
which the Option was granted. The purchase price for any Shares purchased
pursuant to the exercise of an Option shall be paid in full in cash upon such
exercise. Notwithstanding the foregoing, the Committee shall have discretion to
determine at the time of grant of each Employee Option or at any later date
(up to and including the date of exercise) that the form of payment acceptable
in respect of the exercise of such Employee Option may consist of either of
the following (or any combination thereof): (i) cash or (ii) the transfer of
Shares to the Company upon such terms and conditions as determined by the
Committee. The Optionee shall deliver the Agreement evidencing the Option to
the Secretary or Chief Financial Officer of the Company who shall endorse
thereon a notation of such exercise and return such Agreement to the
Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon
exercise of an Option and the number of Shares that may be purchased upon
exercise shall be rounded to the nearest number of whole Shares.
7.4 Rights of Optionees. No Optionee shall be deemed for any
purpose to be the owner of any Shares subject to any Option unless and until
(i) the Option shall have been exercised pursuant to the terms thereof, (ii)
the Company shall have issued and delivered the Shares to the Optionee and
(iii) the Optionee's name shall have been entered as a stockholder of record
on the books of the Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such Shares, subject to
such terms and conditions as may be set forth in the applicable Agreement.
7.5 Effect of Change in Control. In the event of a Change in
Control, all Options outstanding on the date of such Change in Control shall
become immediately and fully vested and exercisable. In addition, to the
extent set forth in an Agreement evidencing the grant of an Employee Option,
an Optionee will be permitted to surrender for cancellation within sixty (60)
days after such Change in Control, any Employee Option or portion of an
Employee Option to the extent not yet exercised and the Optionee will be
entitled to receive a cash payment in an amount equal to the excess, if any of
(x) (A) in the case of a Nonqualified Stock Option, the greater of (1) the
Fair Market Value, on the date preceding the date of surrender, of
the Shares subject to the Employee Option or portion thereof surrendered or
(2) the Adjusted Fair Market Value of the Shares subject to the Employee
Option or portion thereof surrendered or (B) in the case of an Incentive Stock
Option, the Fair Market Value, on the date preceding the date of surrender, of
the Shares subject to the Employee Option or portion thereof surrendered,
over (y) the aggregate purchase price for such Shares under the Employee
Option or portion thereof surrendered; provided, however, that in the case of
an Employee Option granted within six (6) months prior to the Change in
Control to any Optionee who may be subject to liability under Section 16(b) of
the Exchange Act, such Optionee shall be entitled to surrender for
cancellation his or her Option during the sixty (60) day period commencing upon
the expiration of six (6) months from the date of grant of any such Employee
Option. In the event an Optionee's employment or service with the Company is
terminated by the Company following a Change in Control, each Option held by
the Optionee that was exercisable as of the date of termination
of the Optionee's employment or service shall remain exercisable for a period
ending not before the earlier of the first anniversary of the termination
of the Optionee's employment or service or the expiration of the stated term
of the Option.
8. Stock Appreciation Rights. The Committee may, in its discretion,
either alone or in connection with the grant of an Employee Option, grant
Stock Appreciation Rights in accordance with the Plan, the terms and
conditions of which shall be set forth in an Agreement. If granted in
connection with an Option, a Stock Appreciation Right shall cover the same
Shares covered by the Option (or such lesser number of Shares as the
Committee may determine) and shall, except as provided in this Section 8, be
subject to the same terms.
8.1 Time of Grant. A Stock Appreciation Right may be granted
(i) at any time if unrelated to an Option, or (ii) if related to an Option,
either at the time of grant, or at any time thereafter during the term of the
Option.
8.2 Stock Appreciation Right Related to an Option.
(a) Exercise. Subject to Section 8.8, a Stock Appreciation
Right granted in connection with an Option shall be exercisable at such time
or times and only to the extent that the related Options are exercisable, and
will not be transferable except to the extent the related Option may be
transferable. A Stock Appreciation Right granted in connection with an
Incentive Stock Option shall be exercisable only if the Fair Market Value of
a Share on the date of exercise exceeds the purchase price specified in the
related Incentive Stock Option Agreement.
(b) Amount Payable. Upon the exercise of a Stock Appreciation
Right related to an Option, the holder shall be entitled to receive an amount
determined by multiplying (A) the excess of the Fair Market Value of a Share
on the date preceding the date of exercise of such Stock Appreciation Right
over the per Share purchase price under the related Option, by (B) the number
of Shares as to which such Stock Appreciation Right is being exercised.
Notwithstanding the foregoing, the Committee may limit, in any manner, the
amount payable with respect to any Stock Appreciation Right by including such
a limit in the Agreement evidencing the Stock Appreciation Right at the time
it is granted.
(c) Treatment of Related Options and Stock Appreciation
Rights Upon Exercise. Upon the exercise of a Stock Appreciation Right granted
in connection with an Option, the Option shall be canceled to the extent of
the number of Shares as to which the Stock Appreciation Right is exercised,
and upon the exercise of an Option granted in connection with a Stock
Appreciation Right or the surrender of such Option pursuant to Section 7.3,
the Stock Appreciation Right shall be canceled to the extent of the number of
Shares as to which the Option is exercised or surrendered.
8.3 Stock Appreciation Right Unrelated to an Option.
The Committee may grant to Eligible Individuals Stock Appreciation Rights
unrelated to Options. Stock Appreciation Rights unrelated to Options shall
not have a term of greater than ten (10) years. Upon exercise of a Stock
Appreciation Right unrelated to an Option, the holder shall be entitled
to contain such terms and conditions as to exercisability (subject to Section
8.8), vesting and duration as the Committee shall determine, but, in no event,
shall they have a term of greater than ten (10) years. Upon exercise of a
Stock Appreciation Right unrelated to an Option, the holder shall be entitled
to receive an amount determined by multiplying (A) the excess of the Fair
Market Value of a Share on the date preceding the date of exercise of such
Stock Appreciation Right over the Fair Market Value of a Share on the date the
Stock Appreciation Right was granted, by (B) the number of Shares as to
which the Stock Appreciation Right is being exercised. Notwithstanding the
foregoing, the Committee may limit, in any manner, the amount payable with
respect to any Stock Appreciation Right by including such a limit in the
Agreement evidencing the same Stock Appreciation Right at the time it is
granted.
8.4 Method of Exercise. Stock Appreciation Rights shall be
exercised by a holder only by a written notice delivered in person or by mail
to the Secretary or Chief Financial Officer of the Company at the Company's
principal executive office, specifying the number of Shares with respect to
which the Stock Appreciation Right is being exercised. If requested by the
Committee, the holder shall deliver the Agreement evidencing the Stock
Appreciation Right being exercised and the Agreement evidencing any related
Option to the Secretary or Chief Financial Officer of the Company who shall
endorse thereon a notation of such exercise and return such Agreement to the
holder.
8.5 Form of Payment. Payment of the amount determined under
Sections 8.2(b) or 8.3 may be made in the discretion of the Committee, solely
in whole Shares in a number determined at their Fair Market Value in the date
preceding the date of exercise of the Stock Appreciation Right, or solely in
cash, or in acombination of cash and Shares. If the Committee decides to make
full payment in Shares and the amount payable results in a fractional Share,
payment for the fractional Share will be made in cash. Notwithstanding the
foregoing, no payment in the form of cash may be made upon the exercise of a
Stock Appreciation Right pursuant to Sections 8.2(b) or 8.3 to an officer of
the Company who is subject to liability under Section 16(b) of the Exchange Act,
unless the exercise of such Stock Appreciation Right is made either (i) during
the period beginning on the third business day and ending on the twelfth
business day following the date of release for publication of the Company's
quarterly or annual statements of earnings (the "Window Period") or (ii)
pursuant to an irrevocable election to receive cash made at least six (6)
months prior to the exercise of such Stock Appreciation Right.
8.6 Modification. No modification of an Award shall adversely
alter or impair any rights or obligations under the Agreement without the
holder's consent.
8.7 Effect of Change in Control. In the event of a Change in
Control, all Stock Appreciation Rights shall become immediately and fully
exercisable. In addition, to the extent set forth in an Agreement evidencing
the grant of a Stock Appreciation Right, a holder will be entitled to receive
a payment in cash or stock, in either case, with a value equal to the excess,
if any, of (A) the greater of (x) the Fair Market Value, on the date preceding
the date of exercise, of the underlying Shares subject to the Stock
Appreciation Right or portion thereof exercised and (y) the Adjusted Fair
Market Value, on the date preceding the date of exercise, of the Shared
over (B) the aggregate Fair Market Value, on the date the Stock Appreciation
Right was granted, of the Shares subject to the Stock Appreciation Right or
portion thereof exercised; provided, however, that in the case of a Stock
Appreciation Right granted within six (6) months of the Change in Control to
any holder who may be subject to liability under Section 15(b) of the Exchange
Act, such holder shall be entitled to exercise his or her Stock Appreciation
Right during the sixty (60) day period commencing upon the expiration of six
months from the date of grant of any such Stock Appreciation Right. In the
event of a holder's employment or service with the Company is terminated by
the Company following a Change in Control, each Stock Appreciation Right held
by the holder that was exercisable as of the date of termination of the
holder's employment or service shall remain exercisable for a period ending
but not before the earlier of the first anniversary of the termination of the
holder's employment or service or the expiration of the stated term of the
Stock Appreciation Right.
9. Adjustment Upon Changes n Capitalization.
(a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to the (i) maximum
number of Shares with respect to which Options may be granted under the Plan,
(ii) maximum number of Shares with respect to which Options may be granted to
any Eligible Individual during the term of the Plan, (iii) the number of
Shares which are subject to outstanding Options granted under the Plan, and
the purchase price therefor, if applicable, and (iv) the number of Shares in
respect of which Director Options are to be granted under Section 6.
(b) Any such adjustment in the Shares subject to Incentive Stock
Options (including any adjustments in the purchase price) shall be made in
such manner as not to constitute a modification as defined by Section 424(h)
(3) of the Code and only to the extent otherwise permitted by Sections 422
and 424 of the Code.
(c) If, by reason of a Change of Capitalization, an Optionee shall
be entitled to exercise an Option with respect to new, additional or different
shares of stock, such new, additional or different shares shall thereupon be
subject to all of the conditions, restrictions and performance criteria which
were applicable to the Shares subject to the Option, prior to such Change in
Capitalization.
10. Effect of Certain Transactions. Subject to Sections 7.5 and 8.7
or as otherwise provided in an Agreement, in the event of (i) the liquidation
or dissolution of the Company or (ii) a merger or consolidation of the
Company, the Plan and the Options issued hereunder shall continue in effect in
accordance with their respective terms.
11. Interpretation.
(a) The Plan is intended to comply with Rule 16b-3 promulgated
under the Exchange Act and the Committee shall interpret and administer the
provisions of the Plan or any Agreement in a manner consistent therewith.
Any provisions inconsistent with such Rule shall be inoperative and shall not
affect the validity of the Plan.
(b) The Director Options described in Section 6 are intended to
qualify as formula awards under Rule 16b-3 promulgated under the Exchange Act
(thereby preserving the disinterested status of Nonemployee Directors
receiving such Awards) and the Committee shall generally interpret and
administer the provisions of the Plan or any Agreement in a manner consistent
therewith. Any provisions inconsistent with the foregoing intent shall be
inoperative and shall interpret and administer the provisions of the
Plan or any Agreement in a manner consistent therewith. Any provisions
inconsistent with the foregoing intent shall be inoperative and shall not
affect the validity of the Plan.
(c) Unless otherwise expressly stated in the relevant Agreement,
each Option granted under the Plan is intended to be performance-based
compensation within the meaning of Section 162(m)(4)(C) of the Code. The
Committee shall not be entitled to exercise any discretion otherwise
authorized hereunder with respect to such Options if the ability to exercise
such discretion or the exercise of such discretion itself would cause the
compensation attributable to such Options to fail to qualify as
performance-based compensation.
12. Pooling Transactions.
Notwithstanding anything contained in the Plan or any Agreement to
the contrary, in the event of a Change in Control which is also intended to
constitute a Pooling Transaction, the Committee shall take such actions, if
any, which are specifically recommended by an independent public accounting
firm engaged by the Company to the extent reasonably necessary in order to
assure that the Pooling Transaction will qualify as such, including but not
limited to (i) deferring the vesting, exercise, payment or settlement in
respect of any Option, (ii) providing that the payment or settlement in
respect of any Option be made in the form of cash, Shares or securities of a
successor or acquiree of the Company, or a combination of the foregoing,
and (iii) providing for the extension of term of any Option to the extent
necessary to accommodate the foregoing, but not beyond the maximum term
permitted for any Option.
13. Termination and Amendment of the Plan.
The Plan shall terminate on the preceding the tenth anniversary of
the date of its adoption by the stockholders of the Company, and no Option may
be granted thereafter. Subject to Section 6.5, the Board may sooner terminate
the Plan, and the Board may at any time and from time to time amend, modify or
suspend the Plan; provided, however, that:
(a) No such amendment, modification, suspension or termination
shall impair or adversely alter any Award already granted under the Plan,
except with the consent of the Optionee or holder of an SAR nor shall
any amendment, modification or termination deprive any Optionee or holder of
an SAR of any Shares which he or she may have acquired through or as a result
of the Plan; and
(b) To the extent necessary under Section 16(b) of the Exchange Act
and the rules and regulations promulgated thereunder or other applicable law,
no amendment shall be effective unless approved by the stockholders of the
Company in accordance with applicable law and regulations.
14. Non-Exclusivity of the Plan.
The adoption of the Plan by the Board shall not be construed as
amending, modifying or rescinding any previously approved incentive
arrangement or as creating any limitations on the power of the Board to adopt
such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the
Plan, and such arrangements may be either applicable generally or only in
specific cases.
15. Limitation of Liability.
As illustrative of the limitations of liability of the Company, but
not intended to be exhaustive thereof, nothing in the Plan shall be construed
to:
(a) give any person any right to be granted an Option other
than at the sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to
Shares except as specifically provided in the Plan;
(c) limit in any way the right of the Company to terminate the
employment of any person at any time; or
(d) be evidence of any agreement or understanding, expressed
or implied, that the Company will employ any person at any particular rate of
compensation or for any particular period of time.
16. Regulations and Other Approvals; Governing Law.
16.1 Except as to matters of Federal law, this Plan and the rights
of all persons claiming hereunder shall be construed and determined in
accordance with the laws of the State of New York.
16.2 The obligation of the Company to sell or deliver Shares with
respect to Options granted under the Plan shall be subject to all applicable
laws, rules and regulations, including all applicable Federal and state
securities laws, and the obtaining of all such approvals by governmental
agencies as may be deemed necessary or appropriate by the Committee.
16.3 The Board may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Individuals granted Incentive Stock
Options the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.
16.4 Each Option is subject to the requirement that, if at any time
the Committee determines, in its discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by
any securities exchange or under any state or federal law, or the consent or
approval or any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or the issuance of
Shares, no Options shall be granted or payment made or Shares issued, in whole
or in part, unless listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions as acceptable to the
Committee.
16.5 Notwithstanding anything contained in the Plan or any
Agreement to the contrary, in the event that the disposition of Shares
acquired pursuant to the Plan is not covered by a then current registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
and is not otherwise exempt from such registration, such Shares shall be
restricted against transfer to the extent required by the Securities Act and
Rule 144 or other regulations thereunder. The Committee may require an
individual receiving Shares pursuant to an Award granted under the Plan, as a
condition precedent to receipt of such Shares, to represent and warrant to the
Company in writing that the Shares acquired by such individual are acquired
without a view to any distribution thereof and will not be sold or transferred
other than pursuant to an exemption applicable under the Securities Act
as amended, or the rules and regulations promulgated thereunder. The
certificates evidencing any of such Shares shall be appropriately amended to
reflect their status as restricted securities as aforesaid.
17. Miscellaneous.
17.1 Multiple Agreements. The terms of each Award granted to an
Eligible Individual may differ from other Awards granted under the Plan at the
same time, or at some other time. The Committee may also grant more than one
Award to a given Eligible Individual during the term of the Plan, either in
addition to, or in substitution for, one or more Awards previously granted to
that Eligible Individual.
17.2 Withholding of Taxes.
(a) At such times as an Optionee or holder of an SAR recognizes
taxable income in connection with the receipt of Shares or cash hereunder (a
"Taxable Event"), the Optionee or holder shall pay other amounts as may be
required by law to be withheld by the Company in issuance or release from
escrow of such Shares or the payment of such cash. The Company shall have
the right to deduct from any payment of cash to an Optionee or holder an
amount equal to the Withholding Taxes in satisfaction of the obligation to pay
Withholding Taxes. In satisfaction of the obligation to pay Withholding Taxes
to the Company, the Optionee or holder may make a written election (the
"Tax Election"), which may be accepted or rejected in the discretion of the
Committee to have withheld a portion of the Shares then issuable to him or her
having an aggregate Fair Market Value, on the date preceding the date of such
issuance, equal to the Withholding Taxes, provided that in respect of an
Optionee or holder who may be subject to liability under Section 16(b) of the
Exchange Act either; (i)(A) the Tax Election is made at least six (6) months
prior to the date of the Taxable Event and (B) the Tax Election is
irrevocable with respect to all Taxable Events of a similar nature occurring
prior to the expiration of six (6) months following a revocation of the Tax
Election; or (ii)(A) the Tax Election is made at least six (6) months after
the date the Award was granted, (B) the Award is exercised during the Window
Period and (C) the Tax Election is made during the Window Period in which the
related Award is exercised or prior to such Window Period and subsequent to the
immediately preceding Window Period. Notwithstanding the foregoing, the
Committee may, by the adoption of rules or otherwise, (i) modify this Section
17.2 (other than as regards Director Options) or impose such other
restrictions or limitations on Tax Elections to be made at such times and
subject to such other conditions as the Committee determines will constitute
exempt transactions under Section 16(b) of the Exchange Act.
(b) If an Optionee makes a disposition, within the meaning of
Section 424 (c) of the Code and regulations promulgated thereunder, of any
Share or Shares issued to such Optionee pursuant to the exercise of an
Incentive Stock Option within the two-year period commencing on the day after
the date of the grant or within the one-year period commencing on the day
after the date of transfer of such Share or Shares to the Optionee pursuant to
such exercise, the Optionee shall, within ten (10) days of such disposition,
notify the Company thereof, by delivery of written notice to the Company at
its principal executive office.
17.3 Effective Date. The effective date of the Plan shall be as
determined by the Board, subject only to the approval by the affirmative vote
of the stockholders.
Consent of HJ & Associates, LLC
Exhibit 22.1
HJ & Associates, LLC
Key Bank Tower, Suite 1450
50 South Main Street
Salt Lake City, Utah 84144
Tel. (801) 328-4408
Fax (801) 328-4461
Board of Directors
AMP Productions, Inc.
5296 South 300 West Suite 300
Salt Lake City, Utah 84107
We hereby consent to the use in this Registration Statement of AMP
Productions, Inc. on Form SB-2, of our report dated May 12, 2000 of AMP
Productions, Inc. for the period ended April 30, 2000, which are part of the
Registration Statement and to all references to our firm included in this
Registration Statement.
/s/
HJ & Associates LLC
Salt Lake City, Utah
June 7August 1, 2000
June 9August 1, 2000
Salt Lake City, Utah
[LEGEND]
This schedule contains summary financial information extracted from the
Balance Sheet at April 30,2000 and the Statement of Operations from inception
through April 30, 2000 and is qualified in its entirety by reference to such
financial statements.
[/LEGEND]
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-2000
[PERIOD-END] APRIL-30-2000
[CASH] 0
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 10,000
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 2510,000
[CURRENT-LIABILITIES] 0
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 10,000
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] 2510,000
[SALES] 0
[TOTAL-REVENUES] 0
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] 0
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 0(15,000)
[EPS-BASIC] 0
[EPS-DILUTED] 0
