SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 240.14a-11(C)
or Rule 240.14a-12
CHAMPIONS SPORTS, INC.
----------------------
(Name of Registrant as Specified In Its Charter)
CHAMPIONS SPORTS, INC.
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(Name of Person(s) Filing Proxy Statement)
[X] $125 per Exchange Act Rules 0- II (c)(1)(ii),
14a-6(I)(1) or 14a-60)(2).
[ ] $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- II.
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- I 1:
4) Proposed maximum aggregate value of transaction:
[ ] 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:
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CHAMPIONS SPORTS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Arlington, Virginia
November 13,1996
The Annual Meeting of Stockholders of Champions Sports, Inc. will be held at
2500 Wilson Boulevard, Suite 305, Arlington, Virginia on Friday, December 20,
1996, at 4:00 p.m., Eastern Standard Time, for the following purposes:
1. To elect three directors for the ensuing year.
2. To transact such other business as may properly come before the meeting or
any adjournment thereof.
Holders of record of the Company's Common Stock at the close of business on
November 13, 1996, will be entitled to notice of and to vote at the meeting or
any adjournment thereof.
James E. McCollam,
Secretary
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CHAMPIONS SPORTS, Inc.
2500 Wilson Blvd
Suite 305
Arlington, Virginia 22201
PROXY STATEMENT
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished to the holders of the Common Stock,
$0.001 par value per share ("Common Stock"), of Champions Sports, Inc. (the
"Company") in connection with the solicitation of proxies on behalf of the Board
of Directors of the Company for use at the Annual Meeting of Stockholders to be
held on December 20, 1996, or at any adjournment thereof, pursuant to the
accompanying Notice of Annual Meeting of Stockholders. The purposes of the
meeting and the matters to be acted upon are set forth in the accompanying
Notice of Annual Meeting of Stockholders. The Board of Directors knows of no
other business that will come before the meeting.
Proxies for use at the meeting accompanied by the Company's Annual
Report on Form 10-KSB, Form 10-QSB for the quarter ended July 31, 1996 and Form
8-K will be mailed to stockholders on or about November 20, 1996, and will be
solicited chiefly by mail, but additional solicitations may be made by telephone
or telegram by the officers or regular employees of the Company. The Company may
enlist the assistance of brokerage houses or proxy solicitors in soliciting
proxies. All solicitation expenses, including costs of preparing, assembling and
mailing proxy material, will be borne by the Company.
Revocability and Voting of Proxy
A form of proxy for use at the meeting and a return envelope for the
proxy are enclosed. Stockholders may revoke the authority granted by their
execution of proxies at any time before their effective exercise by filing with
the Secretary of the Company a written revocation or duly executed proxy bearing
a later date or by voting in person at the meeting. Shares represented by
executed and unrevoked proxies will be voted in accordance with the choice or
instructions specified thereon. Shares represented by executed proxies which
abstain from one or all matters to be acted upon at the meeting will be
considered for the purpose of determining whether or not a quorum is present at
the meeting but will not be considered in determining whether or not the matter
abstained from is approved by an affirmative vote of the requisite percentage of
the shares voting on such matter. If no specifications are given, the proxies
intend to vote the shares represented thereby to elect each of the proposed
directors and to approve the Proposed Amendment as set forth in the accompanying
Notice of Annual Meeting of Stockholders and in accordance with their best
judgment on any other matters that may properly come before the meeting.
Record Date and Voting Rights
Only stockholders of record at the close of business on November 13, 1996,
are entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. The Company had outstanding, on October 20, 1996, 8,500,564 shares of
Common Stock, each of which is entitled to one vote upon the matters to be
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presented at the meeting. The affirmative vote of the holders of a majority of
the shares of Common Stock present or represented at the meeting is required for
the election of directors.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information as of October 20, 1996, regarding the
beneficial ownership of the Company's Common Stock of: (I) each person known to
the Company to own beneficially more than 5% of the Company's outstanding Common
Stock,
Name and Address of Amount and Nature of Percentage of
Beneficial Owner Beneficial Ownership Common Stock (1)
---------------- -------------------- ----------------
James M. Martell 1,748,000 (2) 19.8%
2500 Wilson Blvd.
Arlington, VA 20001
Robert Scheuermann 641,500 7.3%
4720 65th. Avenue, NE
Olympia, WA 98516
and
(ii) all present Officers and Directors of the Company as a group.
Name and Address of Amount and Nature of Percentage of
Beneficial Owner Beneficial Ownership Common Stock (1)
---------------- -------------------- ----------------
James M. Martell 1,748,000 (2) 19.8%
2500 Wilson Blvd.
Arlington, VA 22201
Michael Tomic 225,000 2.6%
2500 Wilson Blvd.
Arlington, VA 20001
All present Officers 2,075,000 23.5%
and Directors as a group
(4 persons)(2)(3)
(1) Assumes no conversion of the Company's outstanding Preferred
Stock.
(2) Includes 200,000 shares subject to outstanding options which are
currently exercisable.
(3) Includes 100,000 shares subject to outstanding options which are
currently exercisable.
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BENEFICIAL OWNERSHIP OF SERIES A PREFERRED STOCK
The following table sets forth information as of October 20, 1996,
regarding the beneficial ownership of the Company's Preferred Stock of (i) each
person known to the Company to own beneficially more than 5% of the Company's
outstanding Preferred Stock and (ii) all present Officers and Directors of the
Company as a group.
Name and Address of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership of Preferred Stock
- ---------------- -------------------- ------------------
NONE - -
All present Officers and Directors
as a group (4 persons)
NONE
ELECTION OF THREE DIRECTORS
Three directors (constituting the entire Board) are to be elected at
the meeting. Unless otherwise specified, the enclosed proxy will be voted in
favor of the persons named below to serve until the next annual meeting of
stockholders and until their successors shall have been duly elected and shall
qualify. In the event any of these nominees shall be unable to serve as a
director, discretionary authority is reserved to vote for a substitute. The
Board of Directors has no reason to believe that any of these nominees will be
unable to serve.
The nominees, their ages, the year in which each first became a
director, their principal occupations or employment during the past five years,
and the number and percentage of shares of Common Stock beneficially owned by
each as of October 20, 1996, are:
Year First Amount Percentage
Became of Common of Common
Nominee Age Director Stock Held Stock
------- --- -------- ---------- -----
James Martell 50 1985 1,748,000 (1) 19.8%
Michael Tomic 50 1985 225,000 2.6%
George A. Naddaff 66 1996 -
(1) Includes 200,000 shares subject to outstanding options which are
currently exercisable.
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The backgrounds of the nominees are as follows:
James M. Martell has served as Chairman of the Board since November
1991, as President and Chief Executive Officer from May 1990 to June 1992,from
January 1993 to September 1993 and since March 1994. Mr. Martell has served as a
Director of the Company since its inception on June 4, 1985. Additionally, he
served the Company as Vice President from October 1988 to May 1990, as Treasurer
from June 1985 to January 1989, and as Secretary, from June 1985 to January
1986. From 1983 to 1987, Mr. Martell was a partner along with Mr. Tomic in Tomar
Associates, a consulting company specializing in European-American joint
ventures, venture capital financing and corporate finance.
George A. Naddaff was appointed to the Board of Directors of CSI in
October 1996. He is the sole officer, director and stockholder of Business
Expansion Capital Corporation ("BECC"), which he founded in 1987. BECC invests
in developing enterprises capable of expansion through replication of a
successful prototype operation. From 1994 to 1996, Mr. Naddaff served as
Chairman and Director of Food Trends Acquisition Corporation a publicly traded
company which merged with Silver Diner, Inc., a company for which he presently
serves as a Director. Since 1995, Mr. Naddaff has been a Director of Vie de
France, a publicly-traded manufacturer of frozen foods. In September 1995, Mr.
Naddaff was named as Vice-Chairman of First Mortgage Network, Inc., a privately
held national company providing mortgage services, In September 1992. he
cofounded Olde World Bakeries, Ltd. ("0WB") with Douglas M. Suliman, Jr. and
since, inception, was its Chief Executive Officer. OWB was a commercial bread
bakery which developed a chain of retail gourmet coffee and breakfast shops, In
December 1994, OWB sold its assets and discontinued its business. From 1988
until June 1992, Mr. Naddaff was Chairman, Chief Executive Officer and a
Director of New Boston Chicken, Inc. ("Boston Chicken") and from 1988 until
1989, he also served as its President. Boston Chicken, which is now quoted on
the Nasdaq National Market, operates and franchises limited service restaurants
that specialize in complete meals featuring rotisserie roasted chicken. In
addition, to formulating overall strategic direction, he was in charge of Boston
Chicken's franchise expansion program and was primarily responsible for site
selection for both franchised and Boston Chicken-owned locations. Mr. Naddaff
also was active in the development of Mulberry Child Care Centers, Inc. ("MCC"),
which developed a chain of child care centers in the northeast United States.
Mr. Naddaff was Chairman of MCC until 1991 when he sold his interest. Boston
Chicken and MCC were organized with the assistance of BECC during BECC's first
15 months of operations.
Michael M. Tomic has served as a Director of the Company since its
inception on June 4, 1985. From June 1985 to January 1986, he also served as
Vice President of the Company. From 1983 to 1987, Mr. Tomic was a partner along
with Mr. Martell in Tomar Associates, a consulting company specializing in
European-American joint ventures, venture capital financing, technology
transfer, and corporate finance. From 1977 to the present, he has been the
owner/partner of The Tennis Factory, a sports equipment, retail, wholesale, and
export business.
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During the 1996 fiscal year, the Board of Directors held two meetings.
Each director attended all of the Board meetings. The Board of Directors
currently has no committees.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ABOVE NOMINEES AND IT IS
INTENDED THAT THE PROXIES RECEIVED WILL BE VOTED "FOR" THESE NOMINEES UNLESS
OTHERWISE PROVIDED THEREIN.
EXECUTIVE COMPENSATION
The following table sets forth the compensation for services rendered
during fiscal years 1996, 1995 and 1994, which were paid by the Company to its
Chief Executive Officer. No other executive officer received compensation that
exceeded $100,000 in any such year.
Name and FY Annual Other
Principal Position Year Compensation Compensation
- ------------------ ---- ------------ ------------
James M. Martell, 1996 $87,000 $34,200
Chairman, President 1995 87,000 36,168
& Chief Executive 1994 87,000 17,390
Officer
The Board of Directors has the right to change and increase the
compensation of executive officers at any time. The Company has no arrangement
by which any of its directors are compensated for services solely as directors,
and these individuals will not receive any additional remuneration for their
services as directors. The Company may from time to time pay consulting fees to
its officers and directors.
Employment Agreement
The Company entered into a five-year employment agreement with Mr.
Martell in September 1993, under which Mr. Martell received a base annual salary
of $128,000 and options to purchase 200,000 shares of the Company's Common Stock
at $1.00 per share at any time prior to September 6, 2001, whether or not Mr.
Martell is an employee at such time. If there is a change in the management of
the Company and such management acts contrary to the policy of the current
Board, or if Mr. Martell's position as Chairman is terminated, Mr. Martell may
resign and become entitled to liquidated damages determined pursuant to a
formula prescribed in the contract. Mr. Martell, at the present, is temporarily
receiving an annual base salary of $87,000 plus 20% of all fees received from
international locations.
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OPTIONS GRANTED IN LAST FISCAL YEAR
Number of % Of Total
Securities Options
Underlying Granted to Exercise
Options Employees in Base Price Expiration
Name Granted Fiscal Year ($/Share) Date
---- ------- ----------- --------- ----
James M. Martell 1,200,000 92.31% $0.05 7/24/2000(1)
James E. McCollam 100,000 7.69% $0.05 7/24/2000
(1) In FY 1996, Mr. Martell exercised this option for 1,200,000 shares for
$60,000.
OTHER AGREEMENTS
On October 4, 1996, Champions Sports, Inc. signed a joint venture letter of
agreement with Business Expansion Capital Corporation, a privately held
corporation, to assist Champions Sports, Inc. in actively searching and
selection of merger or acquisitions candidate(s). Business Expansion Capital
Corporation is owned by George A. Naddaff. The term of the agreement is for two
years. Champions Sports, Inc issued 8,500,000 performance based warrants
exercisable at $0.11 per share, subject to Champions Sports, Inc. approval of a
successful acquisition or merger.
The Company has a Stock Option Plan intended to assist the Company in
securing and retaining key employees and consultants by allowing them to
participate in the ownership and growth of the Company through the grant of
incentive and nonqualified options. Incentive stock options granted under the
Plan are intended to be "Incentive Stock Options" as defined by Section 422 of
the Internal Revenue Code. An aggregate of 840,000 shares of Common Stock has
been reserved for issuance under the Plan. As of April 30, 1996 all 840,000
shares are reserved and available for issuance.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
Pannell Kerr Forster have been the independent accountants for the Company
and will serve in that capacity for the 1997 fiscal year. A representative of
Pannell Kerr Forster will be present at the Annual Meeting, will have an
opportunity to make a statement if he desires to do so, and will be available to
respond to appropriate questions from stockholders.
STOCKHOLDER PROPOSALS
All stockholder proposals that are intended to be presented at next year's
Annual Meeting of Stockholders of the Company must be received by the Company no
later than July 1, 1997, for inclusion in the Board of Directors proxy statement
and form of proxy relating to the meeting.
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OTHER BUSINESS
The Board of Directors knows of no other business to be acted upon at the
meeting. However, if any other business properly comes before the meeting, it is
the intention of the persons named in the enclosed proxy to vote on such matters
in accordance with their best judgment.
The prompt return of your proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
meeting, please sign the proxy and return it in the enclosed envelope.
By Order of the Board of Directors
James E. McCollam
Secretary
Dated: November 13, 1996
CERTAIN FINANCIAL INFORMATION REGARDING THE COMPANY IS INCORPORATED BY REFERENCE
TO THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB AND QUARTERLY REPORT ON FORMS 10-
QSB FOR THE QUARTER ENDED JULY 31, 1996 AND FORM 8-K WHICH ARE BEING DELIVERED
TO ALL STOCKHOLDERS ALONG WITH THIS PROXY STATEMENT.
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