<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for use of
[ ] Definitive Proxy Statement the Commission only
[ ] Definitive Additional Materials (as permitted by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to Rule 14a-ll(c) or Rule 14a-12
AMERICAN CASINO ENTERPRISES, INC.
(Name of Registrant as Specified In Its Charter)
AMERICAN CASINO ENTERPRISES, INC.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(I)(4) and
0-11.
(1) Title of each class of securities to which transaction
applies:___________________________
(2) Aggregate number of securities to which transaction
applies:__________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule
0-11:1________________________
(4) Proposed maximum aggregate value of
transaction:_____________________
(5) Total fee paid:__________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-ll(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:$______________
(2) Form, Schedule or Registration Statement No.: ________________
(3) Filing Party: _________________
(4) Date Filed: __________________
<PAGE> 2
AMERICAN CASINO ENTERPRISES, INC.
6787 West Tropicana, Suite 200
Las Vegas, Nevada 89103
(702) 896-8888
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
MARCH 24, 1997
To the Stockholders of American Casino Enterprises, Inc.:
You are cordially invited to attend the Annual Meeting (the "Annual
Meeting") of the Stockholders of American Casino Enterprises, Inc., which will
be held at the Treasure Island Hotel & Casino, 330 South Las Vegas Boulevard,
Las Vegas, Nevada 89103, at 10:00 a.m., Pacific time, on March 24, 1997, to
consider and act upon the following matters:
(1) To elect one Class B Director of the Company to serve for the ensuing
three years or until his successor is duly elected and qualified and to
elect two Class C Directors for the ensuing two years or until their
successors are duly elected and qualified. The Board of Directors has
nominated Roy K. Keefer for election to serve as a Class B Director and
to elect Douglas R. Sanderson and Jeanne Hood as Class C Directors.
(2) To approve the Company's 1996 Stock Option Plan.
(3) To amend the Articles of Incorporation of the Company to change its name
to American Vantage Companies.
(4) To ratify the appointment of Bradshaw, Smith & Co. as the Company's
independent public accountants for the year ended July 31, 1997.
(5) To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
Only stockholders of record at the close of business on January 24, 1997
will be entitled to notice of, and to vote at, the Annual Meeting or any
adjournments thereof.
Date: Las Vegas, Nevada By Order of the Board of Directors,
February 24, 1997 Roy K. Keefer, Secretary
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE PROMPTLY COMPLETE,
SIGN AND DATE THE ENCLOSED PROXY CARD, WHICH IS SOLICITED BY THE BOARD OF
DIRECTORS OF THE COMPANY, AND RETURN IT TO THE COMPANY IN THE ENCLOSED POSTAGE
PAID ENVELOPE. THE PROXY MAY BE REVOKED AT ANY TIME BEFORE IT IS VOTED.
STOCKHOLDERS EXECUTING PROXIES MAY ATTEND THE MEETING AND VOTE IN PERSON SHOULD
THEY SO DESIRE.
<PAGE> 3
PRELIMINARY COPY
AMERICAN CASINO ENTERPRISES, INC.
6787 West Tropicana, Suite 200
Las Vegas, Nevada 89103
(702) 896-8888
PROXY STATEMENT
Annual Meeting of Stockholders
March 24, 1997
These proxy materials are furnished in connection with the solicitation
of proxies by the Board of Directors of American Casino Enterprises, Inc., a
Nevada corporation (the "Company"; the term "Company" also includes the
subsidiaries of the Company), for use at the Annual Meeting of Stockholders of
the Company and for any adjournment or adjournments thereof (the "Annual
Meeting"), to be held at the Treasure Island Hotel & Casino, 330 South Las Vegas
Boulevard, Las Vegas, Nevada 89103, at 10:00 a.m., Pacific time, on March 24,
1997, for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. A Board of Directors' proxy (the "Proxy") for the Annual Meeting
is enclosed herewith, by means of which you may indicate your votes as to each
of the proposals described in this Proxy Statement.
All Proxies which are properly completed, signed and returned to the
Company prior to the Annual Meeting, and which have not been revoked, will be
voted in accordance with the stockholder's instructions contained in such Proxy.
Shares represented by proxies which are marked "abstain" for Items 2, 3 and 4 on
the proxy card and proxies which are marked to deny discretionary authority on
all other matters will not be included in the vote totals, and therefore will
have no effect on the vote. In addition, where brokers are prohibited from
exercising discretionary authority for beneficial owners who have not provided
voting instructions (commonly referred to as "broker non-votes"), those shares
will not be included in the vote totals. The affirmative vote by holders of a
plurality of the Common Stock represented at the Annual Meeting is required for
the election of Directors. The vote of a majority of the Common Stock
represented and voting on the question is required for approval of an amendment
to the Articles of Incorporation to change the name of the Company, for
ratification of the Company's 1996 Stock Option Plan, and for the ratification
of Bradshaw, Smith & Co. as the Company's independent public accountants. If no
specification is made, shares represented by such Proxy will be voted FOR the
election of the nominees for Directors as set forth herein; FOR the ratification
of the adoption of the Company's 1996 Stock Option Plan; FOR approval of the
amendment to the Company's Articles of Incorporation; and FOR the ratification
of the appointment of Bradshaw, Smith & Co. as the Company's independent public
accountants.
The Board of Directors anticipates that its nominees will be available
for election and does not know of any other matter that may be brought before
the Annual Meeting. In the event that any other matter shall come before the
Annual Meeting or the nominee is not available for election, the persons named
in the enclosed Proxy will have discretionary authority to vote all Proxies not
marked to the contrary with respect to such matter in accordance with their best
judgment.
A stockholder may revoke his or her Proxy at any time before it is
exercised by filing with the Secretary of the Company at its executive offices
in Las Vegas, Nevada, either a written notice of revocation or a duly executed
Proxy bearing a later date, or by appearing in person at the Annual Meeting and
expressing a desire to vote his or her shares in person. All costs of this
solicitation are to be borne by the Company.
A list of stockholders entitled to vote at the Annual Meeting will be
open to examination by any stockholder, for any purpose germane to the meeting,
at the executive offices of the Company, 6787 West Tropicana, Suite 200, Las
Vegas, Nevada 89103, during ordinary business hours for ten days prior to the
Annual Meeting. Such list shall also be available during the Annual Meeting.
This Proxy Statement, the accompanying Notice of Annual Meeting of
Stockholders, the Proxy and the 1996 Annual Report to Stockholders are expected
to be mailed, to stockholders of record on January 24, 1997, commencing on
February 24, 1997.
<PAGE> 4
VOTING SECURITIES
The record date fixed for the determination of stockholders entitled to
notice of and to vote at the Annual Meeting or any adjournment or adjournments
thereof is January 24, 1997. As of that date, the Company had outstanding
14,867,992 shares of Common Stock, the only outstanding voting securities of the
Company. Stockholders are entitled to one vote for each share owned upon all
matters to be considered at the Annual Meeting.
The following table sets forth, as of January 24, 1997, certain
information concerning those persons known to the Company to be the beneficial
owners (as such term is defined in Rule 13d-3 under the Securities Exchange Act
of 1934 (the "Exchange Act") of more than five (5%) percent of the outstanding
shares of Common Stock of the Company; the number of shares of Common Stock of
the Company beneficially owned by all Directors of the Company, individually, by
each officer named in the Summary Compensation Table and by all Directors and
executive officers of the Company as a group and the percentage of outstanding
shares of Common Stock beneficially owned by each:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership(1) of Class(2)
<S> <C> <C>
Ronald J. Tassinari (3) 1,951,248 (4) 12.3%
Audrey K. Tassinari (3) 1,270,236 (5) 8.2%
Roy K. Keefer (3) 575,000 (6) 3.8%
Douglas R. Sanderson 81,000 (7) .5%
2800 Crystal Cove Drive
Las Vegas, NV 89117
Jeanne Hood 150,000 (8) 1.0%
2316 Timberline Way
Las Vegas, NV 89117
Jay H. Brown 1,379,857 (9) 9.1%
520 South Fourth Street
Las Vegas, NV 89101
All officers and directors 4,027,484 (10) 23.6%
as a group (5 persons)
</TABLE>
- ---------
(1) Unless otherwise noted, all shares are beneficially owned and the sole
voting and investment power is held by the persons indicated.
(2) Based on 14,867,992 shares outstanding as of October 23, 1996.
(3) This person's address is c/o the Company, 6787 West Tropicana, Suite
200, Las Vegas, NV 89103.
(4) Includes 11,094 shares owned of record by Mr. Tassinari as custodian
for his son and 971,333 shares issuable upon exercise of stock options.
Does not include options to acquire 342,667 shares which are not
currently exercisable. Such shares exclude the following shares as to
which Mr. Tassinari disclaims beneficial ownership: 1,270,236 shares of
Common Stock beneficially owned by Audrey K. Tassinari, Mr. Tassinari's
wife. If such excluded shares were included, Mr. Tassinari would be
deemed to hold 19.6% of the Common Stock.
(5) Includes an aggregate of 560,666 shares issuable upon exercise of stock
options. Does not include options to acquire 171,334 shares which are
not currently exercisable. In addition, such shares exclude the
following shares as to which Mrs. Tassinari disclaims beneficial
ownership: 1,951,248 shares of Common Stock beneficially owned by
Ronald J. Tassinari, Mrs. Tassinari's husband. If such excluded shares
were included, Mrs. Tassinari would be deemed to hold 19.6% of the
Common Stock.
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<PAGE> 5
(6) Includes 460,666 shares underlying Stock Options. Does not include
options to acquire 188,000 shares, which are not currently exercisable.
(7) Includes 65,000 shares underlying stock options.
(8) Represents options to acquire 150,000 shares.
(9) Includes an aggregate of 23,167 shares of Common Stock and 324,074
Warrants beneficially owned by Mr. Brown's son and 23,500 shares of
Common Stock beneficially owned by Mr. Brown's wife.
(10) Includes options to purchase an aggregate of 2,207,665 shares of Common
Stock referred to in notes 3, 4, 5, 6 and 7 above.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors consists of five persons. Roy K.
Keefer, a Class B Director, is standing for re-election to a term of three years
ending in 2000 or until his successor is elected and qualified. Jeanne Hood and
Douglas R. Sanderson, Class C Directors, are standing for reelection to terms of
two years ending in 1999 or until their successors are elected and qualified.
The terms of the Company's remaining Directors, Ronald J. Tassinari and Audrey
K. Tassinari, both Class A Directors, expire in 1998. Accordingly, no vote is
being taken on their re-election at this Annual Meeting. It is intended that the
accompanying form of Proxy will be voted FOR the election of the foregoing
persons as Directors unless the Proxy contains contrary instructions. Proxies
which abstain and do not direct the Proxy holders to vote for or withhold
authority in the matter of electing Directors will be voted for the election of
such persons as Directors. Proxies cannot be voted for a greater number of
persons than the number of nominees named in the Proxy Statement.
Management believes that the nominees will be able to serve as
Directors. However, in the event that the nominees should become unable or
unwilling to serve as Directors, the Proxy will be voted for the election of
such persons as shall be designated by the Directors.
The persons listed in the table below are all currently serving as
Directors of the Company.
<TABLE>
<CAPTION>
Year First
Became a
Name and Age Positions Director
- ------------ --------- ----------
<S> <C> <C>
Ronald J. Tassinari President and Director 1979
(53) (Class A)
Audrey K. Tassinari Executive Vice President 1985
(58) and Director (Class A)
Roy K. Keefer Chief Financial Officer, 1992
(52) Secretary/Treasurer and
Director (Class B)
Douglas R. Sanderson Director (Class C) 1992
(50)
Jeanne Hood Director (Class C) 1992
(69)
</TABLE>
All Directors are elected to serve for three years, or until their
successors are elected and qualified (except that at least twenty five percent
of all Directors must be elected in each year). Officers serve at the discretion
of the Board of Directors subject to any contracts of employment. The Board of
Directors has an Audit Committee to review auditing issues and to assist in the
selection of independent auditors and a Compensation Committee to review
compensation paid
3
<PAGE> 6
to officers, directors and employees. Both committees are comprised of Jeanne
Hood and Douglas Sanderson. The Board of Directors does not have a nominating
committee.
Ronald J. Tassinari has been President and a Director of the Company
since its inception in August 1979.
Audrey K. Tassinari has been a Director of the Company since March 1985
and Vice President since April 1986. Mrs. Tassinari is the wife of Ronald J.
Tassinari, the Company's President.
Roy K. Keefer has been Chief Financial Officer and Secretary/Treasurer
of the Company since April 1992. Mr. Keefer has been a Director of the Company
since December 1992. He served as Manager of Corporate Accounting for the
Schulman Group, a major residential and commercial real estate developer in Las
Vegas, Nevada from June 1991 to April 1992.
Douglas R. Sanderson has been a Director of the Company since December
1992. Since June 1994, Mr. Sanderson has been President of Sega Enterprises,
Inc., an electronic games manufacturer located in Las Vegas, Nevada. From
November 1992 to June 1994, he was Director of National Casino Sales for Bally
Gaming, Inc., where he managed and directed sales in major gaming centers of the
United States. From October 1990 to October 1992, he was Sales Director for
International Game Technology, a Nevada based gaming equipment manufacturer.
Jeanne Hood has been a Director of the Company since February 1994.
Since February 1994, Ms. Hood has served as a gaming consultant to the Company.
See "Item 12. Certain Relationships and Related Transactions." From 1985 to
1993, Ms. Hood served as President and Chief Executive Officer of Elsinore
Corporation, a publicly traded gaming company, and of Four Queens, Inc., a
wholly-owned subsidiary of Elsinore Corporation, which subsidiary owns and
operates the Four Queens Hotel Casino in Las Vegas, Nevada.
The Company held four meetings of the Board of Directors during the
fiscal year ended July 31, 1996. Each member of the Board of Directors attended
the four meetings either in person or telephonically.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation awarded to, earned by,
or paid for all services rendered to the Company, a small business issuer, by
the Company's Chief Executive Officer and all other executive officers whose
total annual compensation exceeded $100,000, during the fiscal years ended July
31, 1994, 1995 and 1996.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------------ ---------------------------
Awards
---------------------------
Name and Restricted
Principal Other Annual Stock
Position Year Salary($) Bonus($) Compensation($) Award(s)($) Options(#)
- --------- ---- --------- -------- --------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Ronald J.
Tassinari, 1996 $375,695 $ 270,000 $58,905(1) -0- 400,000(2)
Chief Executive 1995 $245,425(3) $ 135,000 $40,517(1) -0- 764,000(4)(5)
Officer and 1994 $ 74,520(6) $ 20,000 $27,593(1) -0- 500,000(7)
President
Audrey K. 1996 $132,887 $ 130,000 $42,392(1) -0- 250,000(2)
Tassinari, 1995 $100,440(3) $ 82,500 $40,869(1) -0- 382,000(8)(5)
Executive
Vice President
Roy K. Keefer 1996 $124,393 $ 60,000 $47,029(1) -0- 150,000(9)
Chief Financial 1995 $112,751 $ 40,000 $32,290(1) -0- 407,000(10)(5)
Officer
</TABLE>
- ---------------------------------
(1) This amount includes, but is not limited to, Directors fees, medical
insurance premiums, car payments and pension plan payments.
4
<PAGE> 7
(2) Represents options which were granted in October 1995 at an exercise
price of $1.75 per share, canceled and re-granted in October 1996 at
$1.375 per share.
(3) This amount does not include $12,500 in Casino Board of Directors fees
paid to this person in Fiscal 1995.
(4) Includes options to purchase 500,000 shares which were granted in
December 1993 at $1.54 per share, canceled and re-granted in November
1994 at $.76 per share.
(5) The Board re-granted such options at a price closer to the fair market
value of the Company's Common Stock in order to provide a better
incentive to these officers.
(6) This amount does not include $35,703 in salary and $12,000 in Casino
Board of Directors Fees paid to this person in Fiscal 1994. The salary
payments from the casino to Mr. Tassinari ceased in April 1994.
(7) These options were canceled in November 1994.
(8) Includes options to purchase 250,000 shares which were granted in
December 1993 at $1.54 per share, canceled and re-granted in November
1994 at $.76 per share.
(9) Represents options which were granted in October 1995 at an exercise
price of $1.75 per share, cancelled and regranted in October 1996 at
$1.25 per share.
(10) Includes options to purchase 275,000 shares which were granted in
December 1993 at $1.40 per share, canceled and re-granted in November
1994 at $.69 per share.
OPTION GRANTS IN LAST FISCAL YEAR (INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
% of Total
Shares Options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted (#) Fiscal Year ($/sh) Date
- ---- ----------- ------------ -------- ----------
<S> <C> <C> <C> <C>
Ronald J. Tassinari 400,000 50% $1.38 10/9/01
Audrey K. Tassinari 250,000 31% $1.38 10/9/01
Roy K. Keefer 150,000 19% $1.25 10/9/01
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-The-Money
Shares Options at Options at
Acquired FY-End (#) FY-End ($)
on Exer- Value Exercisable/ Exercisable/
Name cise (#) Realized ($) Unexercisable Unexercisable(1)
- ---- -------- ------------ -------------- ----------------
<S> <C> <C> <C> <C>
Ronald J. Tassinari 0 $0 1,321,333/342,667 $592,459/$143,920
Audrey K. Tassinari 0 $0 710,666/171,334 $287,980/$71,960
Roy K. Keefer 0 $0 419,000/188,000 $139,810/$92,120
</TABLE>
- -------------------------------
(1) The closing price for the Company's Common Shares on July 31, 1996 was
$1.18 per share.
5
<PAGE> 8
DIRECTORS FEES
Directors receive $1,000 for each meeting of the Board of Directors
they attend. They are also compensated for expenses incurred in attending the
meetings. Certain of the Company's directors have received stock options from
the Company. See "Certain Relationships and Related Transactions."
EMPLOYMENT AGREEMENTS
On July 20, 1995, the Company entered into substantially similar
employment agreements with Ronald J. Tassinari, to serve as the Company's Chief
Executive Officer and President, Audrey K. Tassinari, to serve as the Company's
Vice President, and Roy K. Keefer to serve as the Company's Chief Financial
Officer (collectively, the "Employees"). The employment agreements provide for a
term which concludes on March 31, 2002. The agreements provide for annual
salaries of $390,000, $145,000, and $125,000, respectively, for Mr. Tassinari,
Mrs. Tassinari and Mr. Keefer. The agreements further provide that the Employees
are entitled to receive minimum annual increases in their salaries every
December equal to the greater of (i) the annual increases provided to the
Company's other salaried executives or (ii) the increase in the Annual Average
All Items Index of the U.S. City Average Consumer Price Index. Under the
agreements, the Employees are entitled to receive incentive stock options under
the Company's stock option plans, and the Company is required to reimburse
Employees for their personal legal and financial consulting expenses, subject to
a maximum of three percent of their prior calendar year's base salary. Mr.
Tassinari is entitled to a term life insurance policy with a minimum death
benefit of $2,000,000, payable to a beneficiary of Mr. Tassinari's designation.
Mrs. Tassinari and Mr. Keefer are entitled to policies with $1,500,000 and
$1,000,000 minimum death benefits, respectively, payable to beneficiaries of
their designation. The Company has agreed to provide the Employees with an
automobile allowance or, in lieu thereof, will pay them an equal monthly cash
stipend. In the event that the Company requires the Employee to relocate from
Las Vegas, Nevada, the Company has agreed to pay their relocation expenses and
to provide second mortgages on their new permanent residences of up to $100,000.
The employment agreements also provide for indemnification of the Employees in
connection with their service to the Company.
If the employment of any of the Employees is terminated by reason of
death, the Company shall pay the balance of the monies due under the agreement
to the estate of the decreased Employee. If the employment of any of the
Employees is terminated by reason of disability, the Employee shall be entitled
to one year of severance pay at full salary and then severance pay at half
salary for the remainder of the term. If any of the Employees are terminated
without cause, or the Employees terminate their own employment following: (a) a
change in control (as defined below); (b) a significant change in the Employee's
duties under the agreements; (c) a removal of the Employee from the positions or
offices set forth in the agreements; (d) a substantial reduction in
compensation, unless all senior executives receive comparable reductions; (e) a
breach by the Company of the relocation provisions set forth in the agreements;
(f) the refusal of a successor to the Company to assume the Company's
obligations under the agreements; (g) a relocation of the Company's executive
offices without the Employee's consent; (h) a failure by the Company to increase
the Employee's salary; or (i) the Employee remains employed following a change
in control, but then resigns within two years, then the Company shall pay as
liquidated damages, or severance pay, or both to the Employee on the fifth day
following the termination date, a lump sum equal to the product of (i) an amount
equal to the sum of the annual base salary in effect as of the termination date
plus any incentive compensation most recently paid or payable to the Employees,
multiplied by (ii) two and ninety-nine one hundredths (2.99), (iii) plus any and
all accrued salary, accrued vacation pay and accrued bonus in addition to any
other consideration due under the agreements. In addition, the agreements
provide that in the event that an Employee terminates his or her employment
following a change in control, the Company shall make a cash payment on the 91st
day after such termination to the Employee in an amount equal to the excess, if
any, of (1) the number of options then held by the Employee which have not
terminated other than as a result of termination of employment multiplied by the
market price of the Company's common stock as of the date of termination, over
(2) the aggregate exercise price for all options then held by the Employee.
For purposes of the employment agreements, a "change in control of the
Company" shall be deemed to have occurred if (i) a third person becomes the
beneficial owner (as such term is defined in Rule 13d-3 promulgated pursuant to
the Securities Exchange Act of 1934, as amended (the "Act")) of the securities
of the Company having twenty percent (20%) or more of the combined voting power
of all classes of the Company's securities entitled to vote in an election of
Directors of the Company; (ii) there occurs a tender offer or exchange offer by,
a merger or other business combination with, or a sale of substantially all of
the assets of the Company to any third Person; (iii) a stockholder or
stockholders holding five percent (5%) or more of the outstanding common stock
of the Company proposes a reconstitution of additions to or deletions from the
Board and as a result, obtains a majority thereof; or (iv) during any period of
two consecutive years during the term of the agreements, individuals who at the
beginning of such period constitute the Board cease for any reason other than
death or disability to constitute at least a majority thereof.
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<PAGE> 9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Jeanne Hood, a Director of the Company, has provided consulting
services to the Company since February 1994. She has been compensated at the
rate of $6,000 per month for such services.
On November 23, 1994, the Board of Directors granted stock options to
Robert J. Michaels, Jeanne Hood and Douglas R. Sanderson, Directors or former
Directors of the Company, to purchase 50,000, 50,000 and 12,500 shares of Common
Stock, respectively. The options were immediately exercisable at $.69 per share
in recognition of prior services rendered to the Company and expire on November
23, 1997.
On May 31, 1995, the Company loaned $125,000 to Ronald J. Tassinari,
the Company's President and a Director. Such amount was repaid on July 24, 1995,
together with interest of $2,109, which had been accrued at the rate of eleven
percent (11%) per annum.
On September 1, 1995, the Company loaned $100,000 to Ronald J.
Tassinari, the Company's President and a Director. Such amount was repaid on
September 21, 1995, together with interest of $206, which had been accrued at
the rate of ten and three-quarters percent (10.75%) per annum.
On September 13, 1995, the Company loaned $100,000 to Ronald J.
Tassinari, the Company's President and a Director. Such amount was repaid on
October 23, 1995, together with interest of $1,178, which had been accrued at
the rate of ten and three-quarters percent (10.75%) per annum.
On November 15, 1995, the Company loaned $150,000 to Ronald J.
Tassinari, the Company's President and a Director. Such amount was repaid on
January 26, 1996, together with interest of $2,429, which had been accrued at
the rate of ten and three-quarters percent (10.75%) per annum.
On October 19, 1995, the Board of Directors granted stock options to
Robert J. Michaels, Jeanne Hood and Douglas R. Sanderson, Directors of the
Company, to purchase 50,000, 100,000 and 15,000 shares of Common Stock,
respectively. The options were immediately exercisable at $1.75 per share in
recognition of prior services rendered to the Company and expire on October 18,
2005. These options were re-granted on October 7, 1996 to Ms. Hood and Mr.
Sanderson at an exercise price of $1.25 per share.
On October 19, 1995, the Board of Directors granted stock options to
Ronald J. Tassinari, Audrey K. Tassinari and Roy K. Keefer, each an Officer and
Director of the Company, to purchase 400,000, 250,000 and 150,000 shares of
Common Stock, respectively. The options were immediately exercisable at $1.75
per share in recognition of prior services rendered to the Company and expire on
October 18, 2005. On October 7, 1996, the foregoing options were canceled and
re-granted at an exercise price of $1.25 per share for Mr. Keefer and $1.38 per
share for the Tassinaris.
Until December 1995, Mr. and Mrs. Tassinari were guarantors of one of
the Company's two revolving lines of credit, in the amount of $1,000,000. In
December 1996, the Company renewed this line of credit, which bears interest at
2.5% above prime (8.25% at October 31, 1996) and expires in December 1997. The
line is collateralized by certificates of deposit totaling $500,000. At October
31, 1996, no amounts were outstanding on either of the lines of credit.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no Form 5's were
required for those persons, the Company believes that, during the period from
August 1, 1995 through July 31, 1996, all filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were complied
with.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" THE NOMINEES LISTED
IN THE FOREGOING PROPOSAL 1.
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PROPOSAL 2
APPROVAL OF AMERICAN CASINO ENTERPRISES, INC.
1996 STOCK OPTION PLAN
The Board of Directors of the Company, subject to the approval of
stockholders, adopted the American Casino Enterprises, Inc. 1996 Stock Option
Plan (the "Plan"), which authorizes the grant of options to purchase an
aggregate of 2,500,000 shares of Common Stock. No options have been granted
under the Plan.
GENERAL
The Board of Directors has deemed it in the best interest of the
Company to establish the Plan so as to provide employees and other persons
involved in the continuing development and success of the Company and its
subsidiaries an opportunity to acquire a proprietary interest in the Company by
means of grants of options to purchase Common Stock. The Plan supplements the
Company's 1992 Incentive Stock Option Plan (the "Existing Plan"). See "Voting
Securities" and "Executive Compensation" herein for information concerning
options granted to employees under existing plans. A total of 2,740,000 options
have been granted and are outstanding under the Existing Plan, and an additional
552,500 options have been granted outside of any plan. The Existing Plan was
previously approved by the Company's Stockholders. It is the opinion of the
Board of Directors that by providing the Company's employees and other
individuals contributing to the Company and its subsidiaries the opportunity to
acquire an equity investment in the Company, the Plan will maintain and
strengthen their desire to remain with the Company, stimulate their efforts on
the Company's behalf and also attract other qualified personnel to provide
services on behalf of the Company. The affirmative vote of a majority of those
casting votes on the matter, assuming a quorum is present, is required for
approval of the Plan.
SUMMARY OF THE PLAN
The following statements summarize certain provisions of the Plan. All
statements are qualified in their entirety by reference to the text of the Plan,
copies of which are available for examination at the Securities and Exchange
Commission and at the principal office of the Company, 6787 West Tropicana,
Suite 200, Las Vegas, Nevada 89103.
The Plan allows the Company to grant Stock Options ("ISOs"), as defined
in Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code"),
Non-Qualified Stock Options ("NQSOs") not intended to qualify under Section
422(b) of the Code and Stock Appreciation Rights ("SARs"). ISO's, NQSO's and
SAR's may be collectively referred to as "Options." The Plan is not subject to
ERISA.
ELIGIBILITY FOR PARTICIPATION
Under the Plan, ISOs or ISOs in tandem with SARs, subject to the
requirements set forth in Temp. Reg. Section 14a.422A-1, A-39 (a)-(e), may be
granted, from time to time, to employees of the Company, including officers, but
excluding Directors who are not otherwise employees of the Company. NQSO's and
NQSO's in tandem with SARs may be granted from time to time, under the Plan, to
employees of the Company or its subsidiaries, officers, Directors, independent
contractors, consultants and other individuals who are not employees of, but are
involved in the continuing development and success of the Company or its
subsidiaries (persons entitled to receive ISOs, NQSOs, and/or SARs are
hereinafter referred to as "Participants"). ISOs and ISOs in tandem with SARs
may not be granted under the Plan to any person for whom shares first become
exercisable under the Plan or any other stock option plan of the Company in any
calendar year having an aggregate fair market value (measured at the respective
time of grant of such options) in excess of $100,000. Any grant in excess of
such amount shall be deemed a grant of a NQSO. Furthermore, the maximum number
of Options which can be granted to a Participant in any calendar year is
250,000. To date, the Company has approximately 10 employees (three of whom are
also Directors), who are eligible for grants of one or more types of Options
under the Plan. In addition, another Director is a consultant who is eligible,
exclusive of being a Director, for grants of NQSO's and/or SAR's in tandem with
NQSO's under the Plan. The Company cannot presently compute the number of
non-employees who may be entitled to NQSOs and/or SAR's in tandem with NQSO's.
ADMINISTRATION
The Plan is to be administered by the Board of Directors of the Company
and/or by a stock option or compensation committee (the administrator of the
Plan, whether the Board of Directors itself or a committee thereof, is
hereinafter referred to as the "Committee" unless the context otherwise
requires) composed solely of two or more "outside directors" (the term outside
directors having the meaning ascribed to it under Section 162(n) of the Internal
Revenue Code of 1986 (the "Code") as amended). The Board of Directors currently
has one outside director under the
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above definition. The Board of Directors may elect additional "outside
directors" to fill vacancies on the Board of Directors. The Board of Directors
or the Committee will have the authority, in its discretion, to determine the
persons to whom options shall be granted, the character of such options and the
number of shares of Common Stock to be subject to each option. The Board of
Directors may administer the Plan, provided, however, that in the event a
Committee has been appointed, the Committee will administer the Plan with
respect to employees included within the term "covered employee" under Section
162(n) of the Code.
TERMS OF OPTIONS
The terms of Options granted under the Plan are to be determined by the
Board or its Committee. Each Option is to be evidenced by a stock option
agreement between the Company and the person to whom such option is granted, and
is subject to the following additional terms and conditions:
(a) Exercise of the Option: The Committee will determine the time
periods during which Options granted under the Plan may be exercised. An Option
must be granted within ten (10) years from the date the Plan was adopted or the
date the Plan is approved by the Stockholders of the Company, whichever is
earlier. Options will be exercisable in whole or in part at any time during the
period but will not have an expiration date later than ten (10) years from the
date of grant. Unless otherwise provided in any option agreement issued under
the Plan, any Option granted under the Plan may be exercisable in whole or in
part at any time during the exercise period and must become fully exercisable
within five years from the date of its grant, and not less than 20% of the
Option shall become exercisable on an aggregate basis by the end of any of the
first five years of the Option. The Committee may, in its sole discretion,
accelerate any such vesting period after the grant thereof. Notwithstanding the
above, ISOs or SARs granted in tandem with ISOs, granted to holders owning
directly or through attribution more than 10% of the Company's Common Stock are
subject to the additional restriction that the expiration date shall not be
later than five (5) years from the date of grant. An Option is exercised by
giving written notice of exercise to the Company specifying the number of full
shares of Common Stock to be purchased and tendering payment of the purchase
price to the Company in cash or certified check, or if permitted by the
instrument of grant, with respect to an ISO, or at the discretion of the
Committee with respect to NQSOs, by delivery of Common Stock having a fair
market value equal to the Option Price, by delivery of an interest bearing
promissory note having an original principal balance equal to the Option Price
and an interest rate not below the rate which would result in imputed interest
under the Code or by a combination of cash, shares of Common Stock and
promissory notes. Furthermore, in the case of a NQSO, at the discretion of the
Committee, the Participant may have the Company withhold from the Common Stock
to be issued upon exercise of the Option that number of shares having a fair
market value equal to the exercise price and/or the withholding amount due.
(b) Option Price: The option price of an NQSO or an SAR granted in
tandem with an NQSO granted pursuant to the Plan, is determined by the Committee
at its sole discretion.
In no event may the option price of an ISO or SAR granted in tandem
with an ISO be less than the fair market value on the date of grant. Such fair
market value of an ISO shall be determined by the Committee and, if the Common
Shares are listed on a national securities exchange or traded on the
over-the-counter market, the fair market value shall be the closing price on
such exchange, or the mean of the reported bid and asked prices of the Common
Shares on the over-the-counter market as reported by NASDAQ, the NASD OTC
Bulletin Board or the National Quotation Bureau, Inc., as the case may be, on
such date. ISOs or SARs granted in tandem with ISOs, granted to holders owning
directly or through attribution, more than 10% of the Company's Common Stock are
subject to the additional restriction that the option price must be at least
110% of the fair market value of the Company's Common Shares on the date of
grant.
(c) Termination of Employment or Consulting Agreement; Death: Except as
provided in the Plan, or otherwise extended by the Committee in its sole
discretion, upon termination of employment with the Company, or, in the case of
a consultant, his consulting agreement, for any reason, a holder of an Option
under the Plan may exercise such Option within thirty (30) days after the date
of termination, to the extent such Option was exercisable as of the date of
termination. However, unless otherwise determined by the Committee in its sole
discretion, any Options granted under the Plan shall immediately terminate in
the event the optionee is convicted of a felony committed against the Company.
Unless extended by the Committee, if the holder of an Option granted
under the Plan dies (i) while employed by the Company or a subsidiary or parent
corporation or (ii) within three (3) months after the termination of such
holder's employment, such option may be exercised within twelve months, less one
day, of death by a legatee or legatees of such option under such individual's
last will or by such individual's estate, to the extent such option was
exercisable as of the date of death or date of termination of employment,
whichever date is earlier.
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If the holder of an Option under the Plan becomes disabled within the
definition of section 22(e)(3) of the Code while employed by the Company or a
subsidiary or parent corporation, such Option may be exercised at any time
within six months, less one day, after such holder's termination of employment
due to the disability.
An Option may not be exercised except to the extent that the holder was
entitled to exercise the option at the time of termination of employment or
death unless otherwise extended by the Committee in its sole discretion, and in
any event may not be exercised after the original expiration date of the option.
(d) Nontransferability of Options; No Liens: An ISO or SAR in tandem
with an ISO option is nontransferable and non-assignable by the optionee, other
than by will or the laws of descent and distribution, and is exercisable during
the lifetime of the optionee and only by the optionee, or in the event of his or
her death, by a person who acquires the right to exercise the option by bequest
or inheritance or by reason of the death of the optionee. The Board or its
Committee has the right to grant options other than ISO's or SAR's in tandem
with ISO's which may or may not be transferable or assignable.
The option agreement may contain such other terms, provisions and
conditions not inconsistent with the Plan as may be determined by the Committee.
TERMINATION; MODIFICATION AND AMENDMENT
The Plan (but not options previously granted under the Plan) shall
terminate ten years from the earlier of the date of its adoption by the Board of
Directors or the date the Plan is approved by the Stockholders of the Company.
No Option will be granted after termination of the Plan.
The Board of Directors of the Company may terminate the Plan at any
time prior to its expiration date, or from time to time make such modifications
or amendments of the Plan, as it deems advisable. However, the Board of
Directors may not, without the approval of a majority of the then outstanding
shares of the Company entitled to vote thereon, except under conditions
described under "Adjustments Upon Changes in Capitalization," increase the
maximum number of shares as to which options may be granted under the Plan,
materially change the standards of eligibility under the Plan, or materially
increase the benefits granted participants if such increased benefit would be
deemed to create a new plan under Rule 16b-3.
No termination, modification or amendment of the Plan may adversely
affect the terms of any outstanding Options without the consent of the holders
of such Options.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event that the number of outstanding shares of Common Stock of
the Company is changed by reason of recapitalization, reclassification, stock
split, stock dividend, combination, exchange of shares, or the like, the Board
of Directors of the Company will make an appropriate adjustment in the aggregate
number of shares of Common Stock available under the Plan, in the number of
shares of Common Stock reserved for issuance upon the exercise of then
outstanding Options and in the exercise prices of such Options. Any adjustment
in the number of shares will apply proportionately only to the unexercised
portion of Options granted under the Plan. Fractions of shares resulting from
any such adjustment shall be revised to the next higher whole number of shares.
In the event of the proposed dissolution or liquidation of
substantially all of the assets of the Company, all outstanding Options will
automatically terminate, unless otherwise provided by the Board.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion is only a summary of the principal federal
income tax consequences of the Options granted under the Plan and is based on
existing federal law, which is subject to change, in some cases retroactively.
This discussion is also qualified by the particular circumstances of individual
optionees, which may substantially alter or modify the federal income tax
consequences herein discussed.
Generally, under present law, when an option qualifies as an ISO under
Section 422 of the Code (i) an employee will not realize taxable income either
upon the grant or the exercise of the option, (ii) the amount by which the fair
market value of the shares acquired by the exercise of the option at the time of
exercise exceeds the option price is included in alternative minimum taxable
income for purposes of determining the employee's alternative minimum tax, (iii)
any gain or loss (the difference between the net proceeds received upon the
disposition of the shares and the
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option price paid therefor) upon a qualifying disposition of the shares acquired
by the exercise of the option will be treated as capital gain or loss if the
stock qualifies as a capital asset in the hands of the employee, and (iv) no
deduction will be allowed to the Company for federal income tax purposes in
connection with the grant or exercise of an Stock Option or a qualifying
disposition of the shares. A disposition by an employee of shares acquired upon
exercise of an ISO will constitute a qualifying disposition if it occurs after
the holder's death or more than two years after the grant of the option and one
year after the issuance of the shares to the employee. If such shares are
disposed of by the employee before the expiration of those time limits, the
transfer would be a "disqualifying disposition" and the employee, in general,
will recognize ordinary income (and the Company will receive an equivalent
deduction) equal to the lesser of (i) the aggregate fair market value of the
shares as of the date of exercise less the option price, or (ii) the amount
realized on the disqualifying disposition less the option price. Ordinary income
from a disqualifying disposition will constitute compensation for which
withholding may be required under federal and state law. Currently under the
Code, the maximum rate of tax on ordinary income is greater than the rate of tax
on long-term capital gains. Many proposals have been made and legislation passed
the House of Representatives to reduce the marginal rate of tax on capital
gains. However, to date, no such proposals or legislation have been enacted into
law. Furthermore, in the future, the rate of tax on such gains may be increased.
No assurance can be given of when, if ever, new tax legislation will be enacted
into law, and the effective date of any such legislation.
In the case of a non-qualified stock option granted under the Plan, no
income generally is recognized by the optionee at the time of the grant of the
option assuming such non-qualified stock option does not have a readily
ascertainable fair market value. The optionee generally will recognize ordinary
income when the non-qualified stock option is exercised equal to the aggregate
fair market value of the shares acquired less the option price. Ordinary income
from non-qualified stock options will constitute compensation for which
withholding may be required under federal and state law, and the Company will
receive an equivalent deduction, subject to the limitations of Section 162(m) of
the Code which limits the amount a publicly held corporation may deduct with
respect to remuneration generally paid to an executive officer of the
Corporation to $1,000,000. Income recognized by such executive officer on the
exercise of a NQSO or SAR would be deemed remuneration. However, there are
certain requirements, which if met, will allow income from the exercise of a
NQSO or SAR to be excluded from remuneration for such purposes. The requirements
include the Plan being administered solely by two "outside directors." An
outside director does not include consultants who also is a director. enable the
Company to fully deduct the amount to which it would otherwise be entitled who
is not directly or indirectly employed or otherwise engaged (i.e., as a
consultant) by the Company. However, the Company does not currently have the
outside directors. No assurance can be given that such requirement or other
requirements will be satisfied in the future so as to which the Company may
avail itself if the Plan is administered by two directors who are not directly
or indirectly employed by the Company and certain other tests are met by the
Company. The Company expects to meet such tests. at any time that executive
officers exercise an NQSO or SAR and their respective remuneration exceeds
$1,000,000.
Shares acquired upon exercise of non-qualified stock options will have
a tax basis equal to their fair market value on the exercise date or other
relevant date on which ordinary income is recognized and the holding period for
the shares generally will begin on the date of the exercise or such other
relevant date. Upon subsequent disposition of the shares, the optionee will
recognize capital gain or loss if the stock is a capital asset in his hands.
Provided the shares are held by the optionee for more than one year prior to
disposition, such gain or loss will be long-term capital gain or loss. As set
forth above, the maximum rate of tax on ordinary income is currently greater
than the rate of tax on long-term capital gains. To the extent an optionee
recognizes a capital loss, such loss may currently generally offset capital
gains and $3,000 of ordinary income. Any excess capital loss is carried forward
indefinitely.
The grant of an SAR is generally not a taxable event for the optionee.
Upon the exercise of an SAR the optionee will recognize ordinary income in an
amount equal to the amount of cash and with respect to SARs granted in tandem
with NQSOs, the fair market value of any shares of Common Stock received upon
such exercise, and the Company will be entitled to a deduction equal to the same
amount. However, if the sale of any shares received would be subject to Section
16(b) of the Securities Exchange Act of 1934, ordinary income attributable to
such shares received will be recognized on the date such sale would not give
rise to a Section 16(b) action, valued at the fair market value at such later
time, unless the optionee has made a Section 83(b) election within 30 days after
the date of exercise to recognize ordinary income as of the date of exercise
based on the fair market value at the date of exercise.
The foregoing discussion is only a brief summary of the applicable
Federal income tax laws as in effect on this date and should not be relied upon
as being a complete statement. The Federal tax laws are complex, and they are
subject to legislative changes and new or revised judicial or administrative
interpretations at any time. In addition to the federal income tax consequences
described herein, an optionee may also be subject to state and/or local income
tax consequences in the jurisdiction in which the grantee works and/or resides.
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NEW PLAN BENEFITS
No options to purchase shares of Common Stock have been granted or
allocated under the Plan.
The favorable vote of a majority of stockholders voting is required for
approval of the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF
THE COMPANY'S 1996 STOCK OPTION PLAN.
PROPOSAL 3
APPROVAL OF AN AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
CHANGING ITS NAME TO AMERICAN VANTAGE COMPANIES.
The Company believes that the scope of its current and anticipated
operations transcend the limited appellation "Casino". Consequently, the Board
of Directors has adopted a resolution to change the name of the Company as
indicated. The affirmative vote of a majority of stockholders voting is required
to approve the action of the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE
STOCKHOLDERS VOTE "FOR" THIS PROPOSAL 3 TO
AMEND THE COMPANY'S ARTICLES OF INCORPORATION.
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Bradshaw, Smith & Co., independent
public accountants, to continue as the Company's auditors and to audit the books
of account and other records of the Company for the fiscal year ending July 31,
1997. Bradshaw, Smith & Co., Las Vegas, Nevada has audited the Company's
financial statements since the fiscal year ended July 31, 1993. They have no
financial interests, either direct or indirect, in the Company. Representatives
of Bradshaw, Smith & Co. are expected to be present at the Annual Meeting to
respond to appropriate questions from stockholders and to make a statement if
they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE "FOR" THE FOREGOING PROPOSAL 4.
OTHER MATTERS
The Board of Directors is not aware of any business to be presented at
the Annual Meeting except the matters set forth in the Notice and described in
this Proxy Statement. Unless otherwise directed, all shares represented by Board
of Directors' Proxies will be voted in favor of the proposals of the Board of
Directors described in this Proxy Statement. If any other matters come before
the Annual Meeting, the persons named in the accompanying Proxy will vote on
those matters according to their best judgment.
EXPENSES
The entire cost of preparing, assembling, printing and mailing this
Proxy Statement, the enclosed Proxy and other materials, and the cost of
soliciting Proxies with respect to the Annual Meeting, will be borne by the
Company. The Company will request banks and brokers to solicit their customers
who beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for the reasonable out-of-pocket expenses of
such solicitations. The original solicitation of Proxies by mail may be
supplemented by telephone and telegram by officers and other regular employees
of the Company, but no additional compensation will be paid to such individuals.
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STOCKHOLDER PROPOSALS
No person who intends to present a proposal for action at a forthcoming
stockholders' meeting of the Company may seek to have the proposal included in
the proxy statement or form of proxy for such meeting unless that person (a) is
a record beneficial owner of at least 1% or $1,000 in market value of shares of
Common Stock, has held such shares for at least one year at the time the
proposal is submitted, and such person shall continue to own such shares through
the date on which the meeting is held, (b) provides the Company in writing with
his name, address, the number of shares held by him and the dates upon which he
acquired such shares with documentary support for a claim of beneficial
ownership, (c) notifies the Company of his intention to appear personally at the
meeting or by a qualified representative under Nevada law to present his
proposal for action, and (d) submits his proposal timely. A proposal to be
included in the proxy statement or proxy for the Company's next annual meeting
of stockholders, will be submitted timely only if the proposal has been received
at the Company's principal executive office no later than October 27, 1997. If
the date of such meeting is changed by more than 30 calendar days from the date
such meeting is scheduled to be held under the Company's By-Laws, or if the
proposal is to be presented at any meeting other than the next annual meeting of
stockholders, the proposal must be received at the Company's principal executive
office at a reasonable time before the solicitation of proxies for such meeting
is made.
Even if the foregoing requirements are satisfied, a person may submit
only one proposal with a supporting statement of not more than 500 words, if the
latter is requested by the proponent for inclusion in the proxy materials, and
under certain circumstances enumerated in the Securities and Exchange
Commission's rules relating to the solicitation of proxies, the Company may be
entitled to omit the proposal and any statement in support thereof from its
proxy statement and form of proxy.
AVAILABLE INFORMATION
Copies of the Company's Annual Report on Form 10-KSB
for the fiscal year ended July 31, 1996 as filed with the Securities and
Exchange Commission, including the financial statements, can be obtained without
charge by stockholders (including beneficial owners of the Company's Common
Stock) upon written request to Roy K. Keefer, the Company's Secretary, American
Casino Enterprises, Inc., 6787 West Tropicana, Suite 200, Las Vegas, Nevada
89103 or on the Commission's Web Site at www.sec.gov.
BY ORDER OF THE BOARD OF DIRECTORS
Las Vegas, Nevada Roy K. Keefer
February 24, 1997 Secretary
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PRELIMINARY COPY
AMERICAN CASINO ENTERPRISES, INC.
6787 WEST TROPICANA, SUITE 200
LAS VEGAS, NEVADA 89103
PROXY
The undersigned, a holder of Common Stock of American Casino
Enterprises, Inc. a Nevada corporation (the "Company"), hereby appoints Ronald
J. Tassinari and Roy K. Keefer, and each of them, the proxies of the
undersigned, each with full power of substitution, to attend, represent and vote
for the undersigned, all of the shares of the Company which the undersigned
would be entitled to vote, at the Annual Meeting of Stockholders of the Company
to be held on March 24, 1997 and any adjournments thereof, as follows:
1. ELECTION OF DIRECTORS, as provided in the Company's Proxy
Statement:
[ ] FOR the nominees listed below.
[ ] WITHHOLD AUTHORITY to vote for the nominee listed below.
(Instructions: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH OR OTHERWISE STRIKE OUT HIS NAME BELOW)
Roy K. Keefer
Douglas R. Sanderson
Jeanne Hood
2. To ratify the adoption of the Company's 1996 Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To approve an amendment to the Company's Articles of Incorporation
to change its name to American Vantage Companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify the appointment of Bradshaw, Smith & Co., as the
Company's independent auditors for the year ended July 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Upon such other matters as may properly come before the meeting or
any adjournments thereof.
The undersigned hereby revokes any other proxy to vote at such Annual
Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH
THE INSTRUCTIONS HEREON. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE ELECTION OF THE DIRECTORS NAMED IN PROPOSAL 1, FOR THE ADOPTION OF PROPOSALS
2, 3 AND 4, AND AS SAID PROXIES SHALL DEEM ADVISABLE ON SUCH OTHER BUSINESS AS
MAY COME BEFORE THE MEETING. EACH MATTER ABOVE WAS PROPOSED BY THE BOARD OF
DIRECTORS.
The undersigned acknowledges receipt of a copy of the Notice of Annual
Meeting and accompanying Proxy Statement dated February 24, 1997 relating to
the Annual Meeting, and the 1996 Annual Report to Stockholders.
_________________________________________
_________________________________________
Signature(s) of Stockholder(s)
The signature(s) hereon should correspond exactly with the name(s) of
the Stockholder(s) appearing on the Stock Certificate. If stock is jointly held,
all joint owners should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If signer is a corporation,
please sign the full corporate name, and give title of signing officer.
Date:____________________________, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF AMERICAN
CASINO ENTERPRISES, INC.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE> 17
AMERICAN CASINO ENTERPRISES, INC.
1996 STOCK OPTION PLAN
1. Purposes.
The AMERICAN CASINO ENTERPRISES, INC. 1996 STOCK OPTION PLAN (the
"Plan") is intended to provide the employees, directors, independent contractors
and consultants of American Casino Enterprises, Inc. (the "Company") with an
added incentive to commence and/or continue their services to the Company and to
exert their maximum efforts toward the Company's success. By thus encouraging
employees, directors, independent contractors and consultants, promoting their
continued association with the Company and aligning their interests more closely
with those of the stockholders of the Company through stock ownership, the Plan
may be expected to benefit both the Company and its stockholders. The Plan
allows the Company to grant Incentive Stock Options ("ISOs"), as defined in
Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code"),
Non-Qualified Stock Options ("NQSOs") not intended to qualify under Section
422(b) of the Code and ISOs or NQSOs in tandem with Stock Appreciation Rights
("SARs"; collectively, "Options").
2. Shares Subject to the Plan.
The total number of shares of Common Stock of the Company that may be
subject to Options granted under the Plan shall be 2,500,000 (Two Million, Five
Hundred Thousand), subject to adjustment as provided in Paragraph 8 of the Plan;
however, the grant of an ISO or NQSO to a person together with a tandem SAR
shall only require one share of Common Stock available subject to the Plan to
satisfy such joint Option. The Company shall at all times, while the Plan is in
force, reserve such number of shares of Common Stock as will be sufficient to
permit the exercise of all outstanding Options granted under the Plan. In the
event any Option granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, the unpurchased shares subject thereto shall
again be available for granting of Options under the Plan.
3. Eligibility.
ISOs or ISOs in tandem with SARs (provided the SAR meets the
requirements set forth in Temp. Reg. Section 14a.422A-1, A-39, (a) through (e)
inclusive, under the Code) may be granted from time to time under the Plan to
one or more employees of the Company or of a "subsidiary" or "parent" of the
Company, as the quoted terms are defined within Section 424 of the Code. An
officer is an employee for the above purposes. However, a director of the
Company who is not otherwise an employee is not deemed an employee for such
purposes. NQSOs and NQSOs in tandem with SARs may be granted from time to time
under the Plan to one or more employees of the Company, officers, members of the
Board of Directors, independent contractors, consultants and other individuals
who are not employees of, but are involved in the continuing development and
success of the Company and/or of the Parent or a subsidiary of the Company,
including persons who have previously been granted Options under the Plan.
4. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors of the
Company as such Board of Directors may be composed from time to time and/or by a
Stock Option Committee (the "Committee") which shall be composed solely of at
least two Non-Employee Directors (as such term is defined in Rule 16b-3(b) of
the Securities Exchange Act of 1934 (the "1934 Act")) appointed by the Board of
Directors of the Company. As and to the extent authorized by the Board of
<PAGE> 18
Directors, the Committee may exercise the power and authority vested in the
Board of Directors under the Plan. Within the limits of the express provisions
of the Plan, the Board of Directors or Committee shall have the authority, in
its discretion, to determine the individuals to whom, and the time or times at
which, Options shall be granted, the character of such Options (whether ISOs,
NQSOs and/or SARs in tandem with ISOs or NQSOs) and the number of shares of
Common Stock to be subject to each Option, the manner and form in which the
optionee can tender payment upon the exercise of his Option, and to interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to the
Plan, to determine the terms and provisions of Option agreements that may be
entered into in connection with Options (which need not be identical), subject
to the limitation that agreements granting ISOs must be consistent with the
requirements for the ISOs being qualified as "incentive stock options" as
provided in Section 422 of the Code, and to make all other determinations and
take all other actions necessary or advisable for the administration of the
Plan. In making such determinations, from time to time, the Board of Directors
or the Committee may take into account the nature of the services rendered by
such individuals, their present and potential contributions to the Company's
success, and such other factors as the Board of Directors or the Committee, in
its discretion, shall deem relevant. The Board of Directors' or the Committee's
determinations on the matters referred to in this Paragraph shall be conclusive.
(b) With respect to persons subject to Section 16 of the 1934 Act,
transactions under the Plan are intended, to the extent possible, to comply with
all applicable conditions of Rule 16b-3, as amended from time to time (and its
successor provisions, if any), under the 1934 Act and Section 162(m)(4)(C) of
the Code. To the extent any provision of the Plan or action by the Board of
Directors or Committee fails to so comply, it shall be deemed null and void to
the extent permitted by law and deemed advisable by the Board of Directors or
the Committee.
5. Terms of Options.
Within the limits of the express provisions of the Plan, the Board of
Directors or the Committee may grant either ISOs or NQSOs and/or SARs in tandem
with ISOs or NQSOs. An ISO or an NQSO enables the optionee to purchase from the
Company, at any time during a specified exercise period, a specified number of
shares of Common Stock at a specified price (the "Option Price"). The optionee,
if granted a SAR in tandem with a NQSO or ISO, may receive from the Company, in
lieu of exercising his option to purchase shares pursuant to his NQSO or ISO,
during the exercise period of the NQSO or ISO or at any specified time or times
fixed for that purpose by the Board of Directors or the Committee, the excess of
the fair market value upon such exercise (as determined in accordance with
subparagraph (b) of this Paragraph 5) of one share of Common Stock over the
Option Price per share specified upon grant of the Option multiplied by the
number of shares of Common Stock covered by the SAR so exercised. The character
and terms of each Option granted under the Plan shall be determined by the Board
of Directors or the Committee consistent with the provisions of the Plan,
including the following:
(a) An Option granted under the Plan must be granted within 10 years
from the date the Plan is adopted, or the date the Plan is approved by the
stockholders of the Company, whichever is earlier.
(b) The Option Price of the shares of Common Stock subject to each ISO
and each SAR issued in tandem with an ISO shall not be less than the fair market
value of such shares of Common Stock at the time such ISO is granted. Such fair
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market value shall be determined by the Board of Directors and, if the shares of
Common Stock are listed on a national securities exchange or traded on the
over-the-counter market, the fair market value shall be the closing price on
such exchange, or the mean of the closing bid and asked prices of the shares of
Common Stock on the over-the-counter market, as reported by the Nasdaq Stock
Market, the National Association of Securities Dealers OTC Bulletin Board or the
National Quotation Bureau, Inc., as the case may be, on the day on which the
Option is granted or, if there is no closing price or bid or asked price on that
day, the closing price or mean of the closing bid and asked prices on the most
recent day preceding the day on which the Option is granted for which such
prices are available. If an ISO or SAR in tandem with an ISO is granted to any
individual who, immediately before the ISO is to be granted, owns (directly or
through attribution) more than 10% of the total combined voting power of all
classes of capital stock of the Company or a subsidiary or parent of the
Company, the Option Price of the shares of Common Stock subject to such ISO
shall not be less than 110% of the fair market value per share of the shares of
Common Stock at the time such ISO is granted.
(c) The Option Price of the shares of Common Stock subject to an NQSO or
a SAR in tandem with a NQSO granted pursuant to the Plan shall be determined by
the Board of Directors or the Committee, in its discretion, but in no event
shall it be less than 85% of the fair market value per share of the Common Stock
at the time of grant.
(d) In no event shall any Option granted under the Plan have an
expiration date later than 10 years from the date of its grant, and all Options
granted under the Plan shall be subject to earlier termination as expressly
provided in Paragraph 6 hereof. If an ISO or a SAR in tandem with an ISO is
granted to any individual who, immediately before the ISO is granted, owns
(directly or through attribution) more than 10% of the total combined voting
power of all classes of capital stock of the Company or of a subsidiary or
parent of the Company, such ISO shall by its terms expire and shall not be
exercisable after the expiration of five (5) years from the date of its grant.
(e) An SAR may be exercised at any time during the exercise period of
the ISO or NQSO with which it is granted in tandem and prior to the exercise of
such ISO or NQSO. Notwithstanding the foregoing, the Board of Directors or the
Committee shall in their discretion determine from time to time the terms and
conditions of SAR's to be granted, which terms may vary from the above-described
conditions, and which terms shall be set forth in a written stock option
agreement evidencing the SAR granted in tandem with the ISO or NQSO. The
exercise of an SAR granted in tandem with an ISO or NQSO shall be deemed to
cancel such number of shares subject to the unexercised Option as were subject
to the exercised SAR. The Board of Directors or the Committee also has the
discretion to alter the terms of the SARs if necessary to comply with Federal or
state securities law. Amounts to be paid by the Company in connection with a SAR
may, in the Board of Director's or the Committee's discretion, be made in cash,
Common Stock or a combination thereof.
(f) An Option granted under the Plan shall become exercisable, in whole
at any time or in part from time to time, but in no event may an Option (i) be
exercised as to less than one hundred (100) shares of Common Stock at any one
time, or the remaining shares of Common Stock covered by the Option if less than
one hundred (100), and (ii) except with respect to performance-based Options,
become fully exercisable more than five years from the date of its grant nor
shall less than 20% of the Option become exercisable in any of the first five
years of the Option. The Board of Directors or the Committee, in its discretion,
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<PAGE> 20
may set one or more performance standards with respect to one or more Options
upon which vesting is conditioned (which performance standards may vary among
the Options). The Board of Directors or the Committee, in its discretion, may at
such time or times as it deems appropriate, if ever, accelerate all or part of
the vesting provisions with respect to one or more outstanding options. The
acceleration of one Option shall not imply that any other Option is or is to be
accelerated.
(g) An Option granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal office (to the attention
of the Secretary) of written notice of the number of full shares of Common Stock
with respect to which the Option is being exercised, accompanied by payment of
the Option Price for such shares in full, which payment at the option of the
holder of the Option shall be in the form of (i) cash or certified or bank check
payable to the order of the Company or, (ii) if permitted by the Committee or
the Board of Directors, as determined by the Committee or the Board of Directors
in its discretion at the time of the grant of the Option with respect to an ISO
and at or prior to the time of exercise with respect to a NQSO, by the delivery
of shares of Common Stock having a fair market value equal to the Option Price
or the delivery of an interest-bearing promissory note having an original
principal balance equal to the Option Price and an interest rate not below the
rate which would result in imputed interest under the Code (provided, in order
to qualify as an ISO, more than two years shall have passed between the date of
grant and the date of exercise, and an additional one year shall have passed
between the date of exercise and the date of sale), or (iii) at the option of
the Committee or the Board of Directors, determined in its discretion at the
time of the grant of the Option with respect to an ISO and at or prior to the
time of exercise with respect to a NQSO, by any combination of cash, promissory
note and shares of Common Stock (subject to the restriction above) that have a
fair market value together with such cash and principal amount of any promissory
note that shall equal the Option Price, and, in the case of a NQSO, at the
discretion of the Committee or Board of Directors, by having the Company
withhold from the shares of Common Stock to be issued upon exercise of the
Option that number of shares having a fair market value equal to the exercise
price and the tax withholding amount due, or otherwise provide for withholding
as set forth in Paragraph 9(c) hereof, or in the event an employee is granted an
ISO or NQSO in tandem with a SAR and desires to exercise such SAR, such written
notice shall so state such intention. To the extent permitted by law, the Option
Price may also be paid in full by a broker-dealer to whom the holder of the
Option has submitted an exercise notice consisting of a fully endorsed Option,
or through any other medium of payment as the Board of Directors or the
Committee, in its discretion, shall authorize.
(h) The holder of an Option shall have none of the rights of a
stockholder with respect to the shares of Common Stock covered by such holder's
Option until such shares of Common Stock shall be issued to such holder upon the
exercise of the Option.
(i) ISOs or SARs in tandem with ISOs shall not be transferable otherwise
than by will or the laws of descent and distribution, nor may they be exercised
during the lifetime of the holder thereof only by the holder. Other Options may
be transferable in the discretion of the Board of Directors or the Committee. No
Option shall be subject to execution, attachment or other process.
(j) For any holder, the aggregate fair market value, determined as of
the time any ISO or SAR in tandem with an ISO is granted and in the manner
provided for by Subparagraph (b) of this Paragraph 5, of the shares of Common
Stock with
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<PAGE> 21
respect to which ISOs granted under the Plan (and any other stock option plan of
the Company or its parent or subsidiaries) are exercisable for the first time
during any calendar year shall not exceed $100,000 for such holder. Any grant of
Options in excess of such amount shall be deemed a grant of a NQSO.
(k) Notwithstanding anything contained herein to the contrary, a SAR
which was granted in tandem with an ISO shall (i) expire no later than the
expiration of the underlying ISO; (ii) be for no more than 100% of the spread at
the time the SAR is exercised; (iii) only be transferable when the underlying
ISO is transferable; (iv) only be exercised when the underlying ISO is eligible
to be exercised; and (v) only be exercisable when there is a positive spread.
(l) In no event shall an employee be granted Options for more than
200,000 (Two Hundred Thousand) shares of Common Stock during any calendar year
period; provided, however, that the limitation set forth in this paragraph shall
be subject to adjustment as provided in Section 8 herein.
6. Death or Termination of Employment/Consulting Relationship.
(a) Except as provided herein, and except as otherwise determined by the
Board of Directors or the Committee in its discretion, if the employment or
services of a holder of an Option granted under the Plan shall be terminated for
any reason other than cause or the death or disability of the holder or a
holder's voluntary termination of his employment with or services to the
Company, such holder's Options shall expire three (3) months after such
termination, unless they expire earlier by their terms. Except as otherwise
determined by the Board of Directors or the Committee in its discretion, if the
employment or services of a holder of Options shall terminate for cause or if a
holder shall voluntarily terminate his employment by the Company, then any
unexercised Option granted to the holder shall expire at the time of
termination.
(b) If the holder of an Option granted under the Plan dies (i) while
employed by or providing consulting services to the Company or a subsidiary or
parent corporation or (ii) within three (3) months after the termination of such
holder's employment/services, such Options may, subject to the provisions of
subparagraph (d) of this Paragraph 6, be exercised by a legatee or legatees of
such Option under such individual's last will or by such individual's personal
representatives or distributees at any time within such period as determined by
the Board of Directors or the Committee in its discretion, but in no event for
less than six months after the individual's death, to the extent such Options
were exercisable as of the date of death or date of termination of employment,
whichever date is earlier.
(c) If the holder of an Option under the Plan becomes disabled within
the definition of section 22(e)(3) of the Code while employed by the Company or
a subsidiary or parent corporation, such Option may, subject to the provisions
of subparagraph (d) of this Paragraph 6, be exercised at any time within six
months (less one day) after such holder's termination of employment due to the
disability.
(d) Except as otherwise determined by the Board of Directors or the
Committee in its discretion, an Option may not be exercised pursuant to this
Paragraph 6 except to the extent that the holder was entitled to exercise the
Option at the time of termination of employment/services or death, and in any
event may not be exercised after the original expiration date of the Option.
Notwithstanding anything contained herein which may be to the contrary,
termination or death of a holder prior to vesting may be deemed by the Board of
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<PAGE> 22
Directors or the Committee to occur at a time when the holder was not entitled
to exercise the Option.
7. Leave of Absence.
For the purposes of the Plan, an individual who is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90) days or such longer period as
such individual's right to reemployment is guaranteed either by statute or by
contract.
8. Adjustment Upon Changes in Capitalization.
(a) In the event that the outstanding shares of Common Stock are
hereafter changed by reason of recapitalization, reclassification, stock split,
combination or exchange of shares of Common Stock or the like, or by the
issuance of dividends payable in shares of Common Stock, an appropriate
adjustment shall be made by the Board of Directors, as determined by the Board
of Directors or the Committee, in the aggregate number of shares of Common Stock
available under the Plan, in the number of shares of Common Stock issuable upon
exercise of outstanding Options and in the Option Price per share. In the event
of any consolidation or merger of the Company with or into another company, or
the conveyance of all or substantially all of the assets of the Company to
another company solely for stock and/or securities, each then outstanding Option
shall upon exercise thereafter entitle the holder thereof to such number of
shares of Common Stock or other securities or property to which a holder of
shares of Common Stock of the Company would have been entitled upon such
consolidation, merger or conveyance; and in any such case appropriate
adjustment, as determined by the Board of Directors of the Company (or successor
entity) shall be made as set forth above with respect to any future changes in
the capitalization of the Company or its successor entity. In the event of the
dissolution or liquidation of the Company, or, except as provided in (b) below,
the sale of substantially all of the assets of the Company in exchange for
property other than solely stock and/or securities, all outstanding Options
under the Plan will automatically terminate, unless otherwise provided by the
Board of Directors of the Company or any authorized committee thereof.
(b) Any Option granted under the Plan may, at the discretion of the
Board of Directors of the Company and said other corporation, be exchanged for
options to purchase shares of capital stock of another corporation with which
the Company or a subsidiary thereof is merged or consolidated, or to which the
Company sells all or a substantial portion of its property or stock. The terms,
provisions and benefits to the optionee of such substitute option(s) shall in
all respects be identical to the terms, provisions and benefits of optionee
under his Option(s) prior to said substitution. To the extent the above may be
inconsistent with Sections 424(a)(1) and (2) of the Code, the above shall be
deemed interpreted so as to comply therewith.
(c) Any adjustment in the number of shares of Common Stock shall apply
proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of shares of Common Stock would result from any such
adjustment, the adjustment shall be revised to the next higher whole number of
shares of Common Stock.
9. Further Conditions of Exercise.
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<PAGE> 23
(a) Unless the shares of Common Stock issuable upon the exercise of an
Option have been registered with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended, prior to the exercise of the Option,
an optionee must represent in writing to the Company that such shares of Common
Stock are being acquired for his own account for investment purposes only and
not with a view towards the further resale or distribution thereof, and must
supply to the Company such other documentation as may be required by the
Company, unless in the opinion of counsel to the Company such representation,
agreement or documentation is not necessary to comply with said Act.
(b) The Company shall not be obligated to deliver any shares of Common
Stock until they have been listed on each securities exchange and trading
association on which the Common Stock shall then be listed and until there has
been qualification under or compliance with such state or federal laws, rules or
regulations as the Company may deem applicable.
(c) The Board of Directors or Committee may make such provisions and
take such steps as it may deem necessary or appropriate for the withholding of
any taxes that the Company is required by any law or regulation of any
governmental authority, whether federal, state or local, domestic or foreign, to
withhold in connection with the exercise of any Option, including, but not
limited to, (i) the withholding of payment of all or any portion of such Option
until the holder reimburses the Company for the amount the Company is required
to withhold with respect to such taxes, or (ii) the cancelling of any number of
shares of Common Stock issuable upon exercise of such Option in an amount
sufficient to reimburse the Company for the amount it is required to so withhold
(iii) the selling of any property contingently credited by the Company for the
purpose of exercising such Option, in order to withhold or reimburse the Company
for the amount it is required to so withhold or (iv) withholding the amount due
from such employee's wages if the employee is employed by the Company, its
parent or any subsidiary thereof.
10. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earlier of the date of its adoption by the
Board of Directors or the date the Plan is approved by the stockholders of the
Company, or shall terminate as hereinafter provided, and no Option shall be
granted after termination of the Plan.
(b) The Plan may from time to time be terminated, modified or amended by
the affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote thereon.
(c) The Board of Directors of the Company may at any time terminate the
Plan or from time to time make such modifications or amendments of the Plan as
it may deem advisable; provided, however, that the Board of Directors shall not,
without approval by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock of the Company entitled to vote thereon,
increase (except as provided by Paragraph 8) the maximum number of shares of
Common Stock as to which Options or shares may be granted under the Plan or
materially change the standards of eligibility under the Plan. Any amendment to
the Plan which, in the opinion of counsel to the Company, will be deemed to
result in the adoption of a new Plan, will not be effective until approved by
the affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote thereon.
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<PAGE> 24
(d) No termination, modification or amendment of the Plan may adversely
affect the rights under any outstanding Option without the consent of the
individual to whom such Option shall have been previously granted.
11. Effective Date of the Plan.
The Plan shall become effective upon adoption by the Board of Directors
of the Company. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon within one year before or after adoption of the
Plan by the Board of Directors.
12. Not a Contract of Employment.
Nothing contained in the Plan or in any option agreement executed
pursuant hereto shall be deemed to confer upon any individual to whom an Option
is or may be granted hereunder any right to remain in the employ of the Company
or of a subsidiary or parent of the Company or in any way limit the right of the
Company, or of any parent or subsidiary thereof, to terminate the employment of
any employee.
13. Other Compensation Plans.
The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the Company, nor
shall the Plan preclude the Company from establishing any other form of stock
option plan, incentive plan or any other compensation plan.
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