<PAGE> 1
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:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
STUART ENTERTAINMENT, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
__________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE> 2
STUART ENTERTAINMENT, INC.
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend
the 1995 Annual Meeting of Stockholders of Stuart Entertainment, Inc. (the
"Company") to be held at 10:00 a.m. local time on October 5, 1995 at the Red
Lion Hotel, 1616 Dodge Street, Omaha, Nebraska 68102.
At the Annual Meeting you are being asked to elect directors and to
ratify the Board of Directors' selection of Deloitte & Touche LLP to serve as
the Company's independent auditors for the year ending December 31, 1995.
You are urged to vote your Proxy even if you currently plan to attend
the Annual Meeting. Please remember to sign and date the proxy card;
otherwise, it is invalid. Returning your Proxy will not prevent you from
voting in person but will assure that your vote is counted if you are unable to
attend the meeting. Your vote is important, regardless of the number of shares
you own.
Sincerely,
/s/ Leonard A. Stuart
Leonard A. Stuart, Chairman
August 31, 1995
<PAGE> 3
STUART ENTERTAINMENT, INC.
3211 NEBRASKA AVENUE
COUNCIL BLUFFS, IOWA 51501
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 5, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders
(the "Meeting") of Stuart Entertainment, Inc. (the "Company") will be held at
the Red Lion Hotel, 1616 Dodge Street, Omaha, Nebraska 68102 on October 5, 1995
at 10:00 a.m. local time, for the following purposes:
1. To elect six directors to the Board of Directors.
2. To ratify the Board of Directors' selection of
Deloitte & Touche LLP as the Company's independent auditors for the
fiscal year ending December 31, 1995.
3. To transact such other business as may properly come
before the Meeting and at any and all adjournments, postponements or
continuations thereof.
Only stockholders of record at the close of business on August 31,
1995 are entitled to notice of and to vote at the Meeting or any postponements,
continuations or adjournments thereof.
You are cordially invited and urged to attend the Meeting. All
stockholders, whether or not they expect to attend the Meeting in person, are
requested to complete, date and sign the enclosed form of proxy (the "Proxy")
and return it promptly in the envelope provided for that purpose. By returning
your Proxy promptly you can help the Company avoid the expense of follow-up
mailings to ensure a quorum so that the Meeting can be held. Stockholders who
attend the Meeting may revoke a prior Proxy and vote in person as set forth in
the Proxy Statement.
THE ENCLOSED PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS OF THE
COMPANY. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSED ITEMS.
By Order of the Board of Directors
/s/ Michael A. Schalk
Michael A. Schalk, Secretary
Council Bluffs, Iowa
Dated: August 31, 1995
<PAGE> 4
STUART ENTERTAINMENT, INC.
3211 NEBRASKA AVENUE
COUNCIL BLUFFS, IOWA 51501
(712) 323-1488
------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 5, 1995
------------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors (the "Board") of Stuart Entertainment, Inc. (the
"Company") of proxies to be voted at the Annual Meeting of Stockholders of the
Company to be held at the Red Lion Hotel, 1616 Dodge Street, Omaha, Nebraska
68102 on October 5, 1995 at 10:00 a.m. local time, and at any and all
postponements, continuations or adjournments thereof (collectively, the
"Meeting"). This Proxy Statement, the accompanying form of proxy (the "Proxy")
and the Notice of Annual Meeting will be first mailed or given to the Company's
stockholders on or about September 6, 1995.
Because many of the Company's stockholders may be unable to attend the
Meeting in person, the Board solicits proxies by mail to give each stockholder
an opportunity to vote on all matters presented at the Meeting. Stockholders
are urged to: (i) read this Proxy Statement carefully; (ii) specify their
choice in each matter by marking the appropriate box on the enclosed Proxy
card; and (iii) sign, date and return the Proxy card by mail in the postage
paid, return addressed envelope provided for that purpose.
All shares of the Company's common stock, $.01 par value per share
(the "Shares") represented by properly executed and valid Proxies received in
time for the Meeting will be voted at the Meeting in accordance with the
instructions marked thereon or otherwise as provided therein, unless such
Proxies have previously been revoked. Unless instructions to the contrary are
marked, or if no instructions are specified, Shares represented by the Proxies
will be voted for the proposals set forth on the Proxy, and in the discretion
of the persons named as proxies on such other matters as may properly come
before the Meeting. Any Proxy may be revoked at any time prior to the exercise
thereof by submitting another Proxy bearing a later date or by giving written
notice of revocation to the Company at the Company's address indicated above or
by voting in person at the Meeting. Any notice of revocation sent to the
Company must include the stockholder's name and must be received prior to the
Meeting to be effective.
<PAGE> 5
VOTING
Only holders of record of Shares at the close of business on August
31, 1995 (the "Record Date") will be entitled to receive notice of and to vote
at the Meeting. On the Record Date there were 6,694,715 Shares outstanding,
each of which will be entitled to one vote on each matter properly submitted
for vote to the Company's stockholders at the Meeting. The presence, in person
or by proxy, of holders of a majority of Shares entitled to vote at the Meeting
constitutes a quorum for the transaction of business at the Meeting.
The Directors and officers (and their affiliates) of the Company held
voting power, as of the Record Date, with respect to an aggregate of 4,527,422
Shares (approximately 68% of the outstanding Shares).
The election of each director nominee requires the affirmative vote of
a plurality of the Shares cast in the election of directors. An affirmative
vote of a majority of the votes cast at the Meeting is required for all other
items being submitted to the stockholders for their consideration.
Votes cast by proxy will be tabulated by an automated system
administered by the Company's transfer agent. Votes cast by proxy or in person
at the Meeting will be counted by the persons appointed by the Company to act
as election inspectors for the Meeting. Abstentions and broker non-votes are
each included in the determination of the number of Shares present and voting.
Each will be tabulated separately. Abstentions will be counted in tabulations
of the votes cast on proposals presented to stockholders, whereas broker
non-votes are not counted for purposes of determining whether a proposal has
been approved.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
BACKGROUND
On December 13, 1994, the Company completed the acquisition (the
"Acquisition") of Len Stuart & Associates Limited, an Ontario, Canada
corporation ("LSA"). LSA's major asset was Bingo Press & Specialty Limited, an
Ontario, Canada corporation ("Bazaar"), a major manufacturer of bingo supplies
and related products in Canada. The Acquisition was completed pursuant to the
terms of a Stock Purchase Agreement (the "LSA Agreement") entered into by and
among the Company, 1089350 Ontario Inc., an Ontario, Canada corporation, Mr.
Leonard A. Stuart, the Chairman of the Board ("Mr. Stuart"), and LSA. As a
result of the Acquisition, the Company acquired all the issued and outstanding
capital stock of LSA from Mr. Stuart, who at the time of the Acquisition owned
all of the issued and outstanding stock of LSA and was the Chairman of the
Board and Chief Executive Officer of the Company. See "CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS."
2
<PAGE> 6
To facilitate the financing of the Acquisition, the Company entered
into a Securities Purchase Agreement (the "MLGA Agreement") with MLGA Fund II,
L.P. ("MLGA Fund") and Bingo Holdings Inc. ("Bingo Holdings"). MLGA Fund and
Bingo Holdings are affiliates of Morgan Lewis Githens & Ahn, Inc. ("MLGA"), an
investment banking firm located in Greenwich, Connecticut. On December 13,
1994, pursuant to the MLGA Agreement, Bingo Holdings purchased 3,130,435 newly
issued Shares and was issued warrants to purchase 775,000 Shares at an exercise
price of $5.75 per share, for an aggregate purchase price of $18,000,000 (the
"Equity Financing").
The consummation of the Acquisition and the Equity Financing resulted
in a change in control of the Company. Assuming the exercise of the MLGA
Warrants, Bingo Holdings owns approximately 52% of the issued and outstanding
Shares.
Simultaneously with the completion of the Acquisition and the Equity
Financing, all of the directors of the Company, with the exception of Mr.
Stuart, resigned from the Board. Immediately thereafter, the Board was
increased to six members and five new members were appointed to fill the
resulting vacancies. The current members of the Board were selected as
directors pursuant to the terms of a Securityholders' Agreement (the
"Securityholders Agreement") entered into among the Company, Mr. Stuart and
Bingo Holdings. The Securityholders' Agreement provides that the Board will be
comprised of up to nine members, three of whom Mr. Stuart may, but shall not be
required to, designate for nomination, which in his sole discretion may include
himself, four of whom Bingo Holdings may, but shall not be required to,
designate for nomination, and two of whom may, but shall not be required to, be
designated jointly by both Mr. Stuart and Bingo Holdings.
The Board has nominated Mr. Leonard A. Stuart, Mr. Albert F. Barber,
Mr. Timothy R. Stuart, Mr. Perry J. Lewis, Mr. Ira Starr and Mr. Sangwoo Ahn
for election to the Board at the Meeting, to serve until the 1996 Annual
Meeting of Stockholders or until their earlier resignation. Each nominee is
currently a member of the Board. Each of the nominees has consented to be a
nominee and to serve as a director if re-elected and it is intended that the
Shares represented by properly executed Proxies will be voted for the election
of the nominees except where authority to so vote is withheld. The Board has
no reason to believe that any of the nominees will be unable to serve as
directors or become unavailable for any reason. If, at the time of the
Meeting, any of the nominees shall become unavailable for any reason, the
persons entitled to vote the Proxy will vote for such substituted nominee or
nominees, if any, as such persons shall determine in his or her discretion.
THE BOARD RECOMMENDS THAT STOCKHOLDERS GRANT AUTHORITY FOR THE
ELECTION OF THE NOMINEES TO THE BOARD OF DIRECTORS.
3
<PAGE> 7
DIRECTORS
The following table sets forth the name and age of each nominee for
re-election, his principal occupation and business experience during the past
five years, and the year of commencement of his term as a director of the
Company.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION OR EMPLOYMENT DURING THE PAST
FIVE YEARS; OTHER DIRECTOR
NAME AND AGE DIRECTORSHIPS SINCE
------------ ------------- -----
<S> <C> <C>
Leonard A. Stuart Chairman of the Board since prior to 1989 and President 1985
(53) from prior to 1989 to March 1989 and from January 1990 to
July 1992. Chief Executive Officer of the Company until
December 1994. Mr. Stuart has served as President of
Bazaar, a manufacturer and distributor of bingo products,
since prior to 1988.
Albert F. Barber Chief Executive Officer of the Company and Vice Chairman 1994
(49) of the Board since December 1994. Consultant to the
Company from June 1, 1994 to December 1994; President of
CNBC, NBC cable affiliate, from 1990 to 1994; Executive
Vice President and Chief Financial Officer of NBC from
1987 to 1990. Mr. Barber served as President of GE
Railcar Services from 1984 to 1987.
Timothy R. Stuart President of the Company since July 1992; Executive Vice 1994
(42) President of the Company from October 1991 to July 1992;
Vice President Operations of the Company from March 1989
to October 1991 and General Manager of the Company from
prior to 1989 to March 1989.
Perry J. Lewis General Partner of MLGAL Partners, L.P. since 1982 and a 1994
(57) managing director of Morgan Lewis Githens & Ahn, Inc., an
investment banking firm, since 1982. Mr. Lewis also
serves as a director of Quaker Fabric Corporation, Haynes
International, Inc., Aon Corporation, Mayflower Group,
Inc., Tyler Corporation and Broadcasting Partners, Inc.
Ira Starr General Partner of MLGAL Partners, L.P. and a managing 1994
(36) director of Morgan Lewis Githens & Ahn, Inc., an
investment banking firm, since 1994 and Vice President of
Morgan Lewis Githens & Ahn, Inc. since May 1988. Mr.
Starr also serves as a director of Haynes International,
Inc. and Quaker Fabric Corporation.
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C> <C>
Sangwoo Ahn General Partner of MLGAL Partners, L.P. and a managing 1994
(57) director of Morgan Lewis Githens & Ahn, Inc., an
investment banking firm, since 1982. Mr. Ahn also serves
as a director of Kaneb Services, Inc., Kaneb Pipe Line
Partners, L.P., Haynes International, Inc., PAR Technology
Corp., Quaker Fabric Corporation and Broadcasting
Partners, Inc.
</TABLE>
Mr. Stuart and Timothy R. Stuart, President of the Company, are
brothers. Messrs. Lewis, Starr and Ahn are general partners of MLGAL Partners,
L.P. and managing directors of Morgan Lewis Githens & Ahn, Inc. which are
affiliates of Bingo Holdings. There are no other affiliations between Mr.
Stuart or Bingo Holdings and any designee named herein.
At each annual meeting of stockholders, the successors to the
directors whose terms then expire are elected to hold office for a term
expiring at the next succeeding annual meeting. Each director holds office
until his successor is elected and qualified.
BOARD AND COMMITTEE MEETINGS
During 1994, the Board met six times. No director attended fewer than
75% of the aggregate of (i) the total number of meetings of the Board during
1994; and (ii) the total number of meetings held by all Committees of the Board
on which he served during 1994.
AUDIT COMMITTEE. John W. Rich, Andrew P. Kerr and Richard S. Collins
served on the Audit Committee from January 1, 1994 to December 13, 1994 but
resigned as directors of the Company effective December 13, 1994 as a result of
the Acquisition. The current members of the Audit Committee are Messrs. Lewis,
Ahn and Starr. The Audit Committee's duties include the following: (i) making
recommendations to the Board as to the selection of the firm of independent
auditors; (ii) reviewing the results of the annual audit of the Company with
the independent auditors and appropriate management representatives; (iii)
reviewing with the independent auditors such major accounting policies of the
Company as are deemed appropriate for review by the Audit Committee; and (iv)
reporting to the Board at each meeting of the Board following a meeting of the
Audit Committee concerning the Audit Committee's activities. The Audit
Committee met two times in 1994 with each director serving on the Audit
Committee in attendance.
INDEPENDENT DIRECTORS COMMITTEE. The Board had an Independent
Directors Committee and its members were Messrs. Rich, Kerr and Collins.
During 1994 the Independent Directors Committee met four times with each
director serving on the Independent Directors Committee in attendance.
COMPENSATION COMMITTEE. Messrs. Rich, Kerr and Collins served on the
Compensation Committee from January 1, 1994 to December 13, 1994 but resigned
as directors of the Company effective December 13, 1994 as a result of the
Acquisition. The current members of
5
<PAGE> 9
the Compensation Committee are Messrs. Lewis, Ahn and Starr. The Compensation
Committee performs the following duties: (i) considering and making
recommendations to the Board and the officers of the Company with respect to
the overall compensation policies of the Company; (ii) approving the
compensation payable to all officers of the Company; (iii) reviewing proposed
compensation of executives as provided in the Company's executive compensation
plan; (iv) advising management on all other executive compensation matters as
requested; and (v) reporting to the Board as and when appropriate with respect
to all of the foregoing. The Compensation Committee did not meet in 1994.
STOCK OPTION COMMITTEE. Messrs Rich, Kerr and Collins served on the
Stock Option Committee from January 1, 1994 to December 13, 1994 but resigned
as directors of the Company effective December 13, 1994 as a result of the
Acquisition. The current members of the Stock Option Committee are Messrs.
Lewis, Ahn and Starr. The Stock Option Committee administers and interprets the
Company's various stock option plans and has authority to determine which
persons shall be granted options under the stock option plans and the terms and
conditions of the stock option grants. The Stock Option Committee met one time
in 1994 with each director serving on the Stock Option Committee in attendance.
The Board does not presently have a separate nominating committee, but
develops nominations for the Board as a whole.
COMPENSATION OF DIRECTORS
During 1994, the Company paid its independent directors an annual
retainer of $12,000 plus $500 for attending each meeting or any committee
thereof. All directors received reimbursement of travel expenses relating to
the attendance of each meeting.
EXECUTIVE OFFICERS
Information is set forth below regarding the executive officers of the
Company, including their age, principal occupation during the last five years
and the date each first became an executive officer of the Company.
<TABLE>
<CAPTION>
EXECUTIVE OFFICER
NAME AGE PRESENT EXECUTIVE OFFICE OF REGISTRANT SINCE
---- --- ------------------------ -------------------
<S> <C> <C> <C>
Leonard A. Stuart 53 Chairman of the Board since prior to 1989 and 1986
President from prior to 1989 to March 1989 and from
January 1990 to July 1992. Chief Executive Officer
of the Company until December 1994. Mr. Stuart has
served as President of Bazaar, a manufacturer and
distributor of bingo products, since prior to 1988.
</TABLE>
6
<PAGE> 10
<TABLE>
<S> <C> <C> <C>
Albert F. Barber 49 Chief Executive Officer of the Company and Vice 1994
Chairman of the Board since 1994. Consultant to the
Company from June 1, 1994 to December 1994;
President of CNBC, NBC cable affiliate, from 1990
to 1994; Executive Vice President and Chief
Financial Officer of NBC from 1987 to 1990. Mr.
Barber served as President of GE Railcar Services
from 1984 to 1987.
Timothy R. Stuart 42 President since July 1992; Executive Vice President 1989
from October 1991 to July 1992; Vice President
Operations from March 1989 to October 1991; General
Manager from prior to 1989 to March 1989.
Clement F. Chantiam 36 Executive Vice President since November 1992; Vice 1989
President Manufacturing from March 1989 to November
1992; Plant Manager from prior to 1989 to March
1989.
Roy L. Lister 37 Executive Vice President since 1994. Executive 1994
Vice President of Bazaar since August 1992. Vice
President of Operations for the Company from
October 1991 to August 1992.
Gary L. Loebig 47 Senior Vice President of Market and Product 1991
Development since January 1995. Vice President
Marketing and Regulatory Compliance from October
1991 to January 1995; Director of Marketing and
Regulatory Compliance from January 1990 to October
1991; Branch General Manager from prior to 1989 to
January 1990.
Paul C. Tunink 36 Vice President Finance and Administration, 1995
Treasurer and Chief Financial Officer since April
1995. Division Vice President for Younkers, Inc.
from April 1992 to April 1995. Director of
Corporate Accounting for Commtran Corp. from prior
to 1989 to April 1992.
Donald S. Kuzina 44 Vice President Electronic Sales and Development 1991
since October 1991; Director of Branch Operations
from prior to 1989 to October 1991; Branch Manager
from prior to 1989 to March 1989.
Gary D. Phillips 41 Vice President of Gaming Ticket Operations since 1995
January 1995. Director of Manufacturing from
September 1988 to January 1995.
</TABLE>
7
<PAGE> 11
<TABLE>
<S> <C> <C> <C>
Robert P. McNeill 34 Vice President of Manufacturing since January 1995. 1995
Director of Manufacturing for Bazaar from 1990 to
January 1995. Plant Manager for the Company from
1984 to 1990.
Michael A. Schalk 48 Corporate Secretary since January 1991. Associate, 1991
Frumkin, Shralow and Cerullo, P.C., and its
predecessors from prior to 1989 to November 1990,
when he joined the Company.
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning
compensation paid by the Company to the Chief Executive Officer and any
executive officer whose total annual salary and bonus exceeded $100,000 for the
last fiscal year:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
-------------------------------------- -----------------------------------
(A) (B) (C) (D) (E) (F)
NAME AND PRINCIPAL ALL OTHER
------------------ SECURITIES UNDERLYING COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) OPTIONS/SARS (#) ($) (1)
-------- ---- ---------- --------- ---------------- -------
<S> <C> <C> <C> <C> <C>
Leonard A. Stuart, 1994 195,833 0 0 0
Chairman of the Board(3) 1993 175,833 0 0 0
1992 200,000 0 0 0
Albert F. Barber 1994 9,231 75,000 900,000 204,677(4)
Chief Executive
Officer(2)
Timothy R. Stuart, 1994 116,200 0 0 2,304
President 1993 107,762 0 15,000 2,153
1992 101,447 10,000 0 3,343
Clement F. Chantiam, 1994 116,100 0 0 2,304
Executive Vice President 1993 108,837 0 15,000 2,153
1992 101,447 10,000 0 3,343
- ------------------
</TABLE>
(1) The stated amounts are Company contributions to a defined contribution
pension plan available to all Company employees.
(2) Mr. Barber has been Chief Executive Officer of the Company since December
13, 1994.
(3) Mr. Stuart served as Chief Executive Officer of the Company until December
13, 1994.
(4) Represents amounts paid to Mr. Barber while serving as a consultant to the
Company during 1994.
The foregoing compensation tables do not include certain fringe
benefits made available on a nondiscriminatory basis to all Company employees
such as group health insurance, dental insurance, long-term disability
insurance, vacation and sick leave. In addition, the Company
8
<PAGE> 12
makes available certain non-monetary benefits to its executive officers with a
view to acquiring and retaining qualified personnel and facilitating job
performance. The Company considers such benefits to be ordinary and incidental
business costs and expenses. The aggregate value of such benefits in the case
of each executive officer and of the group listed in the above table, which
cannot be precisely ascertained but which is less than the lesser of (a) ten
percent of the cash compensation paid to each such executive officer or to the
group, respectively, or (b) $50,000 or $50,000 times the number of individuals
in the group, as the case may be, is not included in such table.
OPTION/SAR GRANTS DURING 1994
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR OPTION
INDIVIDUAL GRANTS TERM(1)
-------------------------------------------------------------- -----------------------------
(A) (B) (C) (D) (E) (F) (G) (H)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO
OPTIONS/SARS EMPLOYEES IN EXERCISE OR EXPIRATION
NAME (#) FISCAL YEAR(4) BASE PRICE ($/SH) DATE 5% ($) 10% ($) 0% ($)
---- ------------- -------------- ----------------- ---- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Leonard A. Stuart 0
Albert F. Barber 100,000(2) 11% 5.00 7/26/04 396,500 924,500 50,000
50,000 66 5.00 12/13/04 65,815 251,815 0
200,000(3) 22 10.00 12/13/04 0 7,260 0
250,000(3) 28 15.00 12/13/04 0 0 0
300,000(3) 33 20.00 12/13/04 0 0 0
Timothy R. Stuart 0
Clement F. Chantiam 0
- -----------------
</TABLE>
(1) Potential realizable value is based on an assumption that the price of
the Shares appreciates at the annual rate shown (compounded annually)
from the date of grant until the end of the five-year option term for
the non- qualified stock options and until the end of the ten-year
option term for the incentive stock options. These numbers are
calculated based on the requirements promulgated by the Securities and
Exchange Commission and do not reflect the Company's estimate of
future stock price growth.
(2) Options granted to Mr. Barber while serving as a consultant to the
Company during 1994.
(3) One-half are currently exercisable and the remainder become
exercisable on December 31, 1995.
(4) Options granted to employees during fiscal 1994 totaled 900,000.
9
<PAGE> 13
OPTION EXERCISE AND YEAR-END VALUE TABLE
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR END VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
AT FY-END (1) AT FY-END ($)(1)
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Leonard A. Stuart 0 0 10,000/0 20,000/0
Albert F. Barber 0 0 525,000/375,000 0/0
Timothy R. Stuart 0 0 33,000/5,000 49,135/0
Clement F. Chantiam 3,000 8,250 28,500/5,000 38,375/0
- ----------------
</TABLE>
(1) The closing sale price of the Shares on December 30, 1994 ($4.50) was used
to calculate option value.
EMPLOYMENT AGREEMENTS
LEONARD A. STUART. On December 13, 1994 the Company entered into an
employment agreement (the "Stuart Agreement"), with Mr. Stuart, the Chairman of
the Board. Pursuant to the Stuart Agreement, Mr. Stuart will be employed for a
period of five years beginning December 13, 1994. The Stuart Agreement
provides that after expiration of the initial employment term (the
"Expiration"), Mr. Stuart's employment shall be automatically renewed on an
annual basis, subject to termination as described below. Mr. Stuart will be
paid an annual salary of $200,000 ("Annual Salary"). In addition, the Company
shall reimburse him for 80% of the following expenses related to the operation
of an office in Fort Lauderdale, Florida: rent for such office; salary and
benefits for one administrative assistant; telephone; stationery; postage and
similar items. He also will be entitled to participate in customary employee
benefits programs maintained by the Company, including health, life, and
disability insurance to the extent provided to other senior executives of the
Company.
The Company may terminate the Stuart Agreement at any time for cause
and in such event, all of Mr. Stuart's rights to compensation would cease upon
his termination. If the termination is without cause, the Company will pay to
Mr. Stuart in addition to the amounts accrued in the respective periods prior
to the termination, severance pay in an amount equal to the Annual Salary until
the later of the Expiration or for one year after the termination of the Stuart
Agreement. Mr. Stuart may also terminate the Stuart Agreement for "Good
Reason" as in the Stuart Agreement. If Mr. Stuart terminates the Stuart
Agreement for Good Reason, the Company will pay Mr. Stuart his Annual Salary
and any benefits until the later of the Expiration or for one year after
termination of the Stuart Agreement.
10
<PAGE> 14
ALBERT F. BARBER. The Company also entered into a consulting and
employment agreement, dated June 1, 1994, with Albert F. Barber, the Chief
Executive Officer and Vice Chairman of the Board (the "Barber Agreement").
From June 1, 1994 to December 13, 1994, Mr. Barber served as a consultant to
the Company. On December 13, 1994, Mr. Barber was appointed Chief Executive
Officer and elected Vice Chairman of the Board of the Company. Pursuant to the
Barber Agreement, Mr. Barber will be employed until December 31, 1996. The
Barber Agreement provides that Mr. Barber's employment shall be automatically
extended indefinitely until either the Company or Mr. Barber terminates the
Barber Agreement, at which time the Barber Agreement will terminate six months
after such notice.
Effective December 13, 1994, in his capacity as Vice Chairman and
Chief Executive Officer, Mr. Barber will receive an annual base salary (the
"Base Salary") of $300,000 to be increased to $330,000 beginning in 1996. In
addition, Mr. Barber is eligible to receive a cash bonus (the "Bonus") for
services rendered during each calendar year covered by the Barber Agreement
pursuant to the following terms. Mr. Barber will be paid a bonus equal to 50%
of the Base Salary when the Company's earnings before interest and income taxes
("EBIT") exceed the EBIT targeted amount (the "Targeted Amount"), as approved
by the Board each year, and an additional increase of 10% of Base Salary to the
extent EBIT equals or exceeds 105% of the EBIT Targeted Amount and an
additional 2% to 4% of the Base Salary when the Company's EBIT exceeds 105% of
the Targeted Amount by a specific percentage.
In addition, Mr. Barber was granted options to purchase 900,000 Shares
subject to various provisions relating to vesting and exercise price. The
Company is required to reimburse Mr. Barber for all reasonable out-of-pocket
expenses incurred by him in performing his duties and is also entitled to
participate in customary employee benefit programs maintained by the Company.
The Company may terminate Mr. Barber's employment at any time for
cause and in such event, all of Mr. Barber's rights to compensation would cease
upon his termination. If the termination is without cause, or as a result of a
disability or death, the Company will pay Mr. Barber, in addition to amounts
accrued in respective periods prior to the termination, his Base Salary for the
greater of the period through December 31, 1996 or one year from the date of
termination (or, in the case of death, the proceeds of a life insurance policy
to be obtained by the Company on Mr. Barber's behalf), and the Bonus, prorated
to the time of termination, in a lump sum to be payable at the time the Bonus
for such calendar year would normally be paid. In the event Mr. Barber
terminates his employment within 90 days of a change of control of the Company,
Mr. Barber will continue to receive his Base Salary for two years from the date
of such termination and the applicable Bonus prorated and paid as described
above.
COMPENSATION PURSUANT TO PLANS
STOCK OPTION PLANS. Prior to December 12, 1994, the Company had three
stock option plans under which options could be granted: the 1985 Non-qualified
Stock Option Plan, the 1992 Non-qualified Stock Option Plan and the 1992
Incentive Stock Option Plan (the "Prior Plans").
11
<PAGE> 15
On December 12, 1994, the stockholders of the Company approved its 1994
Performance Stock Option Plan (the "New Plan"). No options to purchase Shares
were granted to directors or executive officers under the Prior Plans during
1994 and all future options will be granted under the New Plan. Options to
purchase 900,000 Shares were granted to directors or executive officers under
the New Plan during 1994.
EMPLOYEE BENEFIT PLANS. The Company maintains a defined contribution
pension plan covering substantially all of its employees, including all
executive officers. Eligible employees may contribute up to 15% of their
salaries, not to exceed a government established maximum. Company
contributions are the sum of the Company's match of the first 2% of the
employee's elective contribution and a discretionary contribution of up to 2%
of the salaries of all employees eligible under the plan. Company
contributions vest over a seven-year period. During 1994 the Company's
contribution to the 401(k) Plan was $165,000.
The Company maintains a voluntary defined contribution plan covering
substantially all of its employees in Canada (the "Canadian Plan"). Eligible
employees may contribute up to 2 1/2% of their wages eligible under the
Canadian Plan and the Company will match the contribution up to 2-1/2%.
Eligible employees may contribute additional amounts in excess of the 2-1/2%,
but they are not matched by the Company. For the period from December 14, 1994
to December 31, 1994, the Company's contributions were $5,000.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
There are no "interlocks," as defined by the Securities and Exchange
Commission with respect to any member of the Compensation Committee. The
following non-employee directors served on the Compensation Committee during
fiscal 1994: Richard S. Collins, Andrew P. Kerr and John W. Rich.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE
COMPANY'S PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES EXCHANGE ACT OF 1934 THAT MIGHT INCORPORATE FUTURE FILINGS,
INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT AND
THE PERFORMANCE GRAPH ON PAGE 14 SHALL NOT BE INCORPORATED BY REFERENCE INTO
ANY SUCH FILINGS.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
Currently, Mr. Barber, Chief Executive Officer of the Company, is
compensated pursuant to the Barber Agreement. See "Employment
Agreements--Albert F. Barber." During 1994, Mr. Stuart served as Chief
Executive Officer from January 1, 1994 until December 13, 1994 pursuant to an
employment agreement whereby he was entitled to receive an annual salary of
$200,000 per year. In addition, Mr. Stuart was eligible to receive cash and
grants of options to purchase Shares, but did not receive any such bonuses or
option grants during 1994.
12
<PAGE> 16
Messrs. Rich, Kerr and Collins served on the Compensation Committee
from January 1, 1994 to December 13, 1994 but resigned as directors of the
Company effective December 13, 1994 as a result of the Acquisition. The
current members of the Compensation Committee are Messrs. Lewis, Ahn and Starr.
The Compensation Committee did not meet in 1994.
Other than the bonus paid to Mr. Barber, no bonuses or salary
increases were given to executive officers in the calendar year ending December
31, 1994.
Section 162(m) of the Internal Revenue Code (the "Code"), enacted in
1993 and effective for taxable years beginning after January 1, 1994, generally
limits to $1 million per individual per year the federal income tax deduction
for compensation paid by a publicly-held company to "covered employees."
Covered employees are defined as the chief executive officer and the four most
highly compensated officers. For the purpose of determining whether the
$1,000,000 limitation is applicable the following do not count as remuneration:
(i) compensation paid on a commission basis, (ii) non-taxable fringe benefits,
(iii) payments to or from a tax-qualified pension plan, (iv) "performance based
compensation" (as defined in Section 162(m)(4)(C) of the Code), and (v)
payments made pursuant to a binding written contract in effect on February 17,
1994 and not modified in any material respect after such date prior to the
grant of compensation. The Compensation Committee currently does not
anticipate that any covered employee will be paid compensation by the Company
in excess of $1 million in any year (including amounts that do not qualify as
performance- based compensation under the Code). However, if compensation
granted by the Compensation Committee exceeds $1,000,000 in any year and does
not fall within any of the exceptions to the definition of remuneration, then
the Company may lose part of the deductions it would otherwise be entitled to
take with respect to covered employees.
COMPENSATION COMMITTEE:
Perry J. Lewis
Sangwoo Ahn
Ira Starr
REPORTS UNDER SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 and the rules
thereunder require the Company's officers and directors, and persons who own
more than ten percent of a registered class of the Company's equity securities,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission and with the NASDAQ and to furnish the Company with copies.
Based solely on its review of the copies of the Section 16(a) forms
received by it, or written representations from certain reporting persons, the
Company believes that, during the last fiscal year, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-percent
beneficial owners were complied with.
13
<PAGE> 17
PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG STUART ENTERTAINMENT, INC., NASDAQ
STOCK MARKET AND A GROUP OF PEER
COMPANIES ENGAGED IN THE MANUFACTURE
OF GAMING PRODUCTS.
[PERFORMANCE GRAPH]
Date Company Index Market Index Peer Index
12/29/89 100.000 100.000 100.000
01/31/90 83.721 91.340 88.397
02/28/90 102.326 93.858 88.065
03/30/90 93.023 96.581 92.883
04/30/90 97.674 93.424 88.292
05/31/90 111.628 102.249 88.605
06/29/90 125.581 102.995 81.917
07/31/90 139.535 97.817 77.100
08/31/90 116.279 85.460 65.006
09/28/90 93.023 77.356 51.681
10/31/90 93.023 74.309 41.975
11/30/90 93.023 81.399 45.679
12/31/90 111.628 84.926 44.449
01/31/91 74.419 94.339 58.154
02/28/91 134.884 103.414 75.750
03/28/91 148.837 110.333 83.440
04/30/91 176.744 111.033 96.819
05/31/91 176.744 116.129 111.902
06/28/91 213.954 109.056 104.918
07/31/91 241.860 115.511 122.360
08/30/91 195.349 121.253 134.178
09/30/91 195.349 121.696 130.625
10/31/91 186.047 125.731 158.312
11/29/91 232.558 121.517 161.214
12/31/91 223.256 136.351 196.147
01/31/92 325.582 144.324 223.673
02/28/92 316.279 147.593 262.414
03/31/92 409.302 140.627 288.538
04/30/92 353.488 134.594 240.768
05/29/92 362.791 136.343 237.820
06/30/92 316.279 131.013 229.548
07/31/92 344.186 135.650 295.446
08/31/92 311.628 131.505 299.628
09/30/92 362.791 136.393 305.801
10/30/92 325.582 141.766 328.943
11/30/92 334.884 153.044 383.552
12/31/92 306.977 158.679 420.257
01/29/93 320.930 163.196 458.718
02/26/93 269.768 157.109 417.662
03/31/93 269.768 161.655 445.825
04/30/93 269.768 154.757 423.942
05/28/93 297.674 164.002 511.495
06/30/93 288.372 164.760 525.346
07/30/93 241.861 164.957 465.425
08/31/93 288.372 173.481 510.528
09/30/93 241.861 178.647 549.446
10/29/93 232.558 182.668 524.016
11/30/93 232.558 177.229 461.325
12/31/93 213.954 182.168 458.769
01/31/94 195.349 187.689 447.143
02/28/94 204.651 185.979 456.951
03/31/94 195.349 174.527 432.030
04/29/94 148.837 172.264 405.303
05/31/94 167.442 172.694 348.102
06/30/94 195.349 166.399 293.635
07/29/94 195.349 169.811 300.337
08/31/94 176.744 180.630 355.974
09/30/94 195.349 180.171 328.852
10/31/94 204.651 183.681 305.463
11/30/94 176.744 177.571 274.205
12/30/94 167.442 178.114 278.098
14
<PAGE> 18
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board, upon recommendation of the Audit Committee, has selected
Deloitte & Touche LLP to serve as independent auditors of the Company for the
fiscal year ending December 31, 1995. Representatives of Deloitte & Touche LLP
will be present at the Meeting and will have the opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions from stockholders.
Although it is not required to do so, the Board is submitting its
selection of the Company's independent auditors for ratification by the
stockholders at the Meeting, in order to ascertain the views of stockholders
regarding such selection. Whether the proposal is approved or defeated the
Board may reconsider its selection.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION OF
THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT AUDITORS OF THE COMPANY
FOR THE FISCAL YEAR ENDING DECEMBER 31, 1995.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information regarding
beneficial ownership of outstanding Shares as of August 31, 1995 by (i) each
person who is known by the Company to own beneficially five percent or more of
the outstanding Shares, (ii) the Company's directors, Chief Executive Officer
and executive officers whose total compensation exceeded $100,000 for the last
fiscal year and (iii) all directors and executive officers as a group.
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY OF
NAME OWNED(1) CLASS
- ---- ----- -----
<S> <C> <C>
Leonard A. Stuart 1,351,887 19.9%
c/o Stuart Entertainment, Inc.
3211 Nebraska Avenue
Council Bluffs, Iowa 51501
Albert F. Barber 525,000 7.3%
c/o Stuart Entertainment, Inc.
3211 Nebraska Avenue
Council Bluffs, Iowa 51501
Timothy R. Stuart 288,000 4.1%
</TABLE>
15
<PAGE> 19
<TABLE>
<S> <C> <C>
Clement F. Chantiam 67,332 1.0%
Perry Lewis(2) 3,915,735 52.4%
c/o MLGA Fund II, L.P.
Two Greenwich Plaza
Greenwich, Connecticut 06830
Ira Starr(2) 3,907,935 52.3%
c/o MLGA Fund II, L.P.
Two Greenwich Plaza
Greenwich, Connecticut 06830
Sangwoo Ahn(2)(3) 3,940,435 52.5%
c/o MLGA Fund II, L.P.
Two Greenwich Plaza
Greenwich, Connecticut 06830
Bingo Holdings, Inc. 3,905,435 52.3%
c/o MLGA Fund II, L.P.
Two Greenwich Plaza
Greenwich, Connecticut 06830
All executive officers and directors
as a group (14 persons) 6,383,202(1) 77.7%
</TABLE>
__________________________________
(1) Shares are considered beneficially owned, for purposes of this table, only
if held by the person indicated, or if such person, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise has
or shares the power to vote, to direct the voting of and/or to dispose of or to
direct the disposition of, such security, or if the person has the right to
acquire beneficial ownership within 60 days, unless otherwise indicated. The
foregoing share amounts include the following number of Shares which may be
acquired pursuant to stock options or warrants exercisable within 60 days of
August 31, 1995: Mr. Barber, 525,000 Shares; Mr. Leonard A. Stuart, 110,000
Shares; Mr. Timothy R. Stuart, 265,000 Shares; Mr. Chantiam, 42,332 Shares; Mr.
Lewis, 775,000 Shares; Mr. Ahn, 775,000 Shares; Mr. Starr 775,000 Shares; Bingo
Holdings, Inc., 775,000 Shares; and all executive officers and directors as a
group, 1,845,780 Shares. (2) Includes 3,130,435 shares owned by Bingo Holdings,
Inc. and 775,000 Shares owned by Bingo Holdings, Inc. pursuant to a currently
exercisable warrant. Bingo Holdings, Inc. is a subsidiary of MLGA Fund II,
L.P. The general partner of MLGA Fund II, L.P. is MLGAL Partners, L.P.
Messrs. Lewis, Starr and Ahn are general partners of MLGAL Partners, L.P. and
are deemed to beneficially own these Shares. Messrs. Lewis, Starr and Ahn
disclaim any beneficial interest in all Shares owed by Bingo Holdings, Inc. (3)
Includes 15,000 Shares owned by Mr. Ahn's children and 10,000 Shares owned by a
family limited partnership of which Mr. Ahn is a general partner. Mr. Ahn
disclaims any beneficial interest in all Shares owned by his children and the
family limited partnership.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ACQUISITION OF BINGO PRESS & SPECIALTY LIMITED
The Acquisition was consummated on December 13, 1994 at which time the
Company acquired all the issued and outstanding capital stock of LSA from Mr.
Stuart, who at the time of the Acquisition owned all of the issued and
outstanding stock of LSA and was the Chairman of the Board and Chief Executive
Officer of the Company. Pursuant to the terms of the LSA Agreement, the
Company paid Mr. Stuart an aggregate purchase price of $35,000,000 which
16
<PAGE> 20
was paid as follows: $30,000,000 in cash, issuance of a warrant to purchase
100,000 Shares at an exercise price of $5.75 per share and the issuance of a
senior subordinated note of the Company in the principal amount of $5,000,000,
which bears interest at 10% and matures on March 31, 2000. Subsequent to the
Acquisition and pursuant to the results of a post-closing audit, the Company is
obligated to pay Mr. Stuart an additional $1,642,000 as a purchase price
adjustment. The Company has paid Mr. Stuart $720,000 of the purchase price
adjustment and the remaining balance will accrue interest at 2 1/4% over the
prime rate shown in The Wall Street Journal.
Prior to the Acquisition, Mr. Stuart was the sole shareholder of LSA
which was the majority shareholder of Bazaar. The Company and Bazaar sell
merchandise to each other in the normal course of business. Prices for sales
to and purchases from Bazaar were reviewed by the IDC to ensure that prices are
fair and reasonable when compared to the general level of prices existing
within the bingo industry. During the period ended December 13, 1994, the
Company had sales totaling $1,521,000 to Bazaar and its Canadian affiliates.
Purchases from Bazaar and its Canadian affiliates totaled $713,000 during the
same period.
KENNETH STUART
Kenneth Stuart ("K. Stuart") is the brother of Mr. Stuart. K. Stuart
is retained by the Company as an independent consultant for sales, marketing
and product development of ink products. During 1994, K. Stuart earned
commissions totaling approximately $292,000.
In 1991, the Company accepted a promissory note from K. Stuart in the
amount of $270,000 in satisfaction of the net amount owed the Company by K.
Stuart and Ken Stuart Corporation, Inc. as of January 31, 1991. The promissory
note was paid in full in November 1994.
OTHER TRANSACTIONS
In October 1992, the Company sold the assets of its retail branch in
Hollywood, Florida to Bingo Video Entertainment, Inc. ("Bingo Video"), a
company owned by a brother-in-law of Mr. Stuart. In exchange for assets sold,
the Company received a promissory note ("Bingo Video Note") totaling $261,629.
The Bingo Video Note bears interest at a rate of one percent above the
Company's borrowing rate on its short-term line of credit, is collateralized by
the assets of Bingo Video and is guaranteed by Mr. Stuart's brother-in-law and
Len Stuart & Associates, Inc., a U.S. company owned by Mr. Stuart. The
principal balance of the Bingo Video Note at December 31, 1994 was $203,000.
Sales to Bingo Video in 1994 totaled approximately $572,000.
17
<PAGE> 21
SOLICITATION OF PROXIES
This solicitation is being made by mail on behalf of the Board, but
may also be made without additional remuneration by officers or employees of
the Company by telephone, telegraph, facsimile transmission or personal
interview. The expense of the preparation, printing and mailing of this Proxy
Statement and the enclosed form of Proxy and Notice of Annual Meeting, and any
additional material relating to the Meeting which may be furnished to
stockholders by the Board subsequent to the furnishing of this Proxy Statement,
has been or will be borne by the Company. The Company will reimburse banks and
brokers who hold Shares in their name or custody, or in the name of nominees
for others, for their out-of-pocket expenses incurred in forwarding copies of
the proxy materials to those persons for whom they hold such Shares. To obtain
the necessary representation of stockholders at the Meeting, supplementary
solicitations may be made by mail, telephone or interview by officers of the
Company or selected securities dealers. It is anticipated that the cost of
such supplementary solicitations, if any, will not be material.
ANNUAL REPORT
The Annual Report of the Company for the 1994 fiscal year, including a
copy of the Company's Annual Report on Form 10-K for the year ended December
31, 1994, as filed with the Securities and Exchange Commission, has been mailed
to stockholders along with this Proxy Statement.
OTHER MATTERS
The Company is not aware of any business to be presented for
consideration at the Meeting, other than that specified in the Notice of Annual
Meeting. If any other matters are properly presented at the Meeting, it is the
intention of the persons named in the enclosed Proxy to vote in accordance with
their best judgment.
STOCKHOLDER PROPOSALS
Any stockholder who intends to submit a proposal at the 1996 Annual
Meeting of Stockholders and who wishes to have the proposal considered for
inclusion in the proxy statement and form of proxy for that meeting must, in
addition to complying with the applicable laws and regulations governing
submission of such proposals, deliver the proposal to the Company for
consideration no later than January 15, 1996. Such proposals should be sent to
the Corporate Secretary of the Company at 3211 Nebraska Avenue, Council Bluffs,
Iowa 51501.
18
<PAGE> 22
NOTICE TO BANKS, BROKER-DEALERS AND
VOTING TRUSTEES AND THEIR NOMINEES
Please advise the Company whether other persons are the beneficial
owners of the Shares for which proxies are being solicited from you, and, if
so, the number of copies of this Proxy Statement and other soliciting materials
you wish to receive in order to supply copies to the beneficial owners of the
Shares.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. STOCKHOLDERS,
WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING IN PERSON, ARE REQUESTED TO
COMPLETE, DATE AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT PROMPTLY IN
THE ENVELOPE PROVIDED FOR THAT PURPOSE. BY RETURNING YOUR PROXY PROMPTLY YOU
CAN HELP THE COMPANY AVOID THE EXPENSE OF FOLLOW-UP MAILINGS TO ENSURE A QUORUM
SO THAT THE MEETING CAN BE HELD. STOCKHOLDERS WHO ATTEND THE MEETING MAY
REVOKE A PRIOR PROXY AND VOTE THEIR PROXY IN PERSON AS SET FORTH IN THIS PROXY
STATEMENT.
By Order of the Board of Directors
/s/ Michael A. Schalk
Michael A. Schalk, Secretary
Council Bluffs, Iowa
August 31, 1995
19
<PAGE> 23
PROXY
STUART ENTERTAINMENT, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
STUART ENTERTAINMENT, INC.
The undersigned hereby appoints Paul C. Tunink and Michael A. Schalk,
and each of them, as proxies for the undersigned, each with the power to
appoint his substitute, and hereby authorizes them to represent and to vote, as
designated below, all Shares of the $.01 par value common stock of Struart
Entertainment, Inc. (the "Company") with the undersigned is entitled to vote at
the Annual Meeting of Stockholders of the Company to be held on October 5, 1995
(the "Meeting"), or at any and all postponements, continuations or adjournments
thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED (i) FOR THE PROPOSAL TO ELECT SIX DIRECTORS TO THE BOARD OF DIRECTORS,
AND (ii) FOR THE PROPOSAL TO RATIFY THE SELECTION OF DELOITTE & TOUCHE LLP TO
SERVE AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER
31, 1995.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND RETURN PROMPTLY
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH ITEM.
<TABLE>
<S> <C>
FOR AGAINST ABSTAIN
1. Election of Directors. 2. Ratify the Board of Directors / / / / / /
selection of Deloitte &
NOMINEES: Perry J. Lewis, Sangwoo Ahn, Ira Starr, Touche LLP to serve as the
Leonard A. Stuart, Albert F. Barber Company's independent auditors
Timothy Stuart. for the fiscal year ending
December 31, 1995
FOR WITHHELD FOR AGAINST ABSTAIN
/ / / / 3. To transact such other / / / / / /
MARK HERE business as may properly come
FOR ADDRESS / / before the Meeting and at any
/ /___________________________________ CHANGE AND and all postponements or any
For all nominees except as noted above NOTE BLOW adjournments thereof.
IMPORTANT before returning the Proxy, please sign your name or names on the
line(s) below exactly as shown hereon. Executors, administrators, trustees,
guardians or corporate officers should indicate their full titles when
signing. Where shares are registered in the name of joint tenants or
trustees, each joint tenant or trustee should sign.
Signature: ______________________________________ Date _________________
Signature: ______________________________________ Date _________________
</TABLE>
