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AMERICAN ENTERTAINMENT GROUP, INC.
160 Bedford Road, Suite 306
Toronto, Ontario M5R 2K9
------------------------------
NOTICE OF SPECIAL ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 9, 1996
------------------------------
Notice is hereby given that a Special Annual Meeting of Shareholders (the
"Meeting") of AMERICAN ENTERTAINMENT GROUP, INC., a Colorado corporation (the
"Company"), will be held at 10:00 a.m. local time, on August 9, 1996, at The
Cincinnatian Hotel, 601 Vine Street, Cincinnati, Ohio 45202, for the following
purposes:
1. To elect five persons to the Company's Board of Directors, each such
Director to hold office until the next annual meeting of shareholders or until
their successors are elected and qualified;
2. To amend the Company's Articles of Incorporation to authorize
5,000,000 Preferred Shares, which would have such par value, classes and
preferences as the Company's Board of Directors may from time to time determine;
3. To ratify and approve Rollins & Associates, P.C. as the Company's
independent auditors for the fiscal year ended December 31, 1996; and
4. To consider and act upon any matters which may properly come before
the Meeting or any adjournment thereof. The Board of Directors are not aware of
any business to come before the Meeting.
Any action may be taken on any one of the foregoing proposals at the
Meeting on the date specified above, or on any date or dates to which the
Meeting may be adjourned. Only shareholders of record as of the close of
business on June 30, 1996, are entitled to notice of and to vote at the Meeting.
The stock transfer books of the Company will remain open. There is printed on
the following pages a Proxy Statement to which your attention is invited. Please
read it carefully.
You are requested to fill in and sign the enclosed form of Proxy which is
solicited by the management of the Company, and to mail it promptly. The Proxy
will not be used if you attend and vote at the Meeting in person.
By Order of the Board of Directors:
Joel Wagman
Chairman
July 7, 1996
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YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU
PLAN TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE, AND RETURN THE
ENCLOSED PROXY PROMPTLY. IF YOU ATTEND THIS MEETING, YOU MAY VOTE EITHER IN
PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN
PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
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AMERICAN ENTERTAINMENT GROUP, INC.
160 Bedford Road, Suite 306
Toronto, Ontario, Canada M5R 2K9
PROXY STATEMENT
SPECIAL ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 9, 1996
INTRODUCTORY STATEMENT
This Proxy Statement and accompanying Proxy are furnished in connection
with a solicitation of Proxies by the Board of American Entertainment Group,
Inc. (the "Company") for use at the Special Annual Meeting of Shareholders of
the Company, to be held at 10:00 a.m. local time, on August 9, 1996, at The
Cincinnatian Hotel, 601 Vine Street, Cincinnati, Ohio 45202, for the purposes
set forth in the accompanying Notice of Special Annual Meeting of Shareholders.
Shareholders of record at the close of business on June 30, 1996 will be
entitled to receive notice of and to vote at the meeting. Each share of common
stock is entitled to one vote for each matter submitted to a vote at the
meeting. Shares represented by executed and unrevoked Proxies will be voted in
accordance with the specifications made thereon. If the enclosed form of Proxy
is executed and returned, it nevertheless may be revoked by giving another Proxy
or by letter or telegram directed to the Company. Any such revocation must show
the shareholder's name and must be received prior to the commencement of the
meeting in order to be effective. Additionally, any shareholder attending the
meeting in person, who wishes to do so, may vote by ballot at the meeting,
thereby cancelling any Proxy previously given. Where no instructions are
indicated, Proxies will be voted "FOR" the nominees for directors indicated
below and "FOR" the proposals to be considered at the Special Annual Meeting or
any adjournment thereof. Proxy materials will be mailed to shareholders of
record on or about July 7, 1996.
VOTING SECURITIES, PRINCIPAL HOLDERS AND SECURITY
OWNERSHIP OF MANAGEMENT
The approval of an amendment to the Company's Articles of Incorporation to
authorize Preferred Shares, as set forth in this Proxy Statement, requires the
affirmative vote of a majority of the issued and outstanding common shares of
the Company.
The approval of the remainder of the proposals set forth in this Proxy
Statement requires the affirmative vote of a majority of the quorum of the
shares present and entitled to vote at the Special Annual Meeting of
Shareholders.
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All voting rights are vested exclusively in the holders of the Company's no
par value common stock, with each share entitled to one vote. Only shareholders
of record at the close of business on June 30, 1996 are entitled to notice of
and to vote at the meeting and any adjournment thereof.
As of December 31, 1995, there were an aggregate of 14,629,843 common
shares issued and outstanding. The following sets forth the number of shares of
the Company's no par value common stock beneficially owned by (i) each person
who, as of December 31, 1995, was known by the Company to own beneficially more
than five percent (5%) of its common stock, (ii) the individual Directors of the
Company, and (iii) the Officers and Directors of the Company as a group.
- ----------------------------------------------------------------------------
Name and Address Amount and Nature Percent of
of Beneficial Owner of Beneficial Ownership (1)(2) Class
- ----------------------------------------------------------------------------
Joel Wagman (3) 2,150,859 14.70%
160 Bedford Road
Suite 306
Toronto, Canada M5R 2K9
Allan R. Chapman 105,000 .72%
160 Bedford Road
Suite 306
Toronto, Canada M5R 2K9
J.R.Y Hugo (4) 237,801 1.63%
1 Clarendon Avenue
Suite 201
Toronto, Ontario M4V 1H8
Samuel C. Paul 77,967 .53%
160 Bedford Road
Suite 306
Toronto, Canada M5R 2K9
Jon D.Bridgman 39,835 .27%
1006 Streambank Drive
Mississauga, Canada
L4H 3Z1
Dirk Peper -0- -0-
1 Clarendon Road
Suite 605
Toronto, Canada MVA 1H8
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Harve Sherman (5) 2,220,078 15.18%
15 Lonsdale Road
Toronto, Canada
Officers and Directors 2,611,462 17.85%
as a Group (6 persons)
- -------------------------------------------------------------------------------
(1) All ownership is beneficial and of record except as specifically indicated
otherwise.
(2) Beneficial owners listed above have sole voting and investment power with
respect to the shares shown unless otherwise indicated.
(3) Owned by Mr. Wagman and children beneficially, including shares owned of
record by Falconette Corporation.
(4) Includes shares owned of record by Gloria Hugo, the wife of J.R.Y. Hugo and
600433 Ontario Ltd. and HMSG Corporation.
(5) Owned by Mr. Sherman and his wife beneficially, including shares owned of
record by various corporations. Mr. Sherman resigned from the Board of
Directors in June, 1995. See Legal Proceedings with respect to these
shares. The shares listed herein represent the Company's best information
and belief with respect to Mr. Sherman's direct and indirect ownership
thereof.
ACTION TO BE TAKEN UNDER THE PROXY
Proxies in the accompanying form that are properly executed and returned
will be voted at the Special Annual Meeting in accordance with the instructions
thereon. Any proxy upon which no instructions have been indicated with respect
to a specific matter will be voted as follows with respect to such matter: (a)
"FOR" the election of five (5) persons named in this Proxy Statement as
Management's nominees for election to the Board of Directors; (b) "FOR"
amendment to the Company's Articles of Incorporation to authorize 5,000,000
Preferred Shares, which would have such par value, classes and preferences as
the Company's Board of Directors may from time to time determine; (c) "FOR" the
ratification of Rollins & Associates, P.C. as the Company's independent public
accountants; and (d) "FOR" the transaction of any other business to come before
the Meeting, in the discretion of the holders of such Proxies.
Management knows of no other matters, other than those stated above, to be
presented for consideration at the Meeting. If, however, any other matters
properly come before the Meeting, the persons named in the enclosed proxy intend
to vote such proxy in accordance with their
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judgement on such matters. The persons named in the enclosed proxy may also,
if they deem it advisable, vote such proxy to adjourn the Meeting from time
to time.
ELECTION OF DIRECTORS
It is proposed that five (5) of the current Directors be elected to the
Board of Directors of the Company, each such Director to hold office until the
next annual meeting of shareholders or until their successors are elected and
qualified. The nominees are: Joel Wagman, J.R.Y. Hugo, Samuel C. Paul, Allan
P. Chapman, and Jon D. Bridgman. All are presently directors of the Company who
are standing for re-election.
It is the intention of the persons named in the accompanying form of Proxy
to vote such Proxy FOR the election of the persons listed below, unless
shareholders specifically indicate in their Proxies that they desire to abstain
from voting for the electing of certain Directors to office. The Board of
Directors does not contemplate that any nominee will be unable to serve as a
Director for any reason, but if that should occur prior to the meeting, the
Board of Directors reserves the right to substitute another person(s) of their
choice as nominee(s). Each nominee must be approved by an affirmative vote of a
majority of the quorum of the shares present and entitled to vote at the Special
Annual Meeting of Shareholders. The Board of Directors recommends that
shareholders vote FOR the election of each nominee.
VOTING
Pursuant to the terms of the Company's Articles of Incorporation every
shareholder voting for the election of directors is entitled to one vote for
each share. A shareholder may vote each share once for one nominee to each of
the director positions being filled. A shareholder may not accumulate votes.
The Board of Directors intends to vote the Proxies solicited by it (other
than Proxies in which the vote is withheld as to one or more nominees) for the
five candidates standing for election as directors nominated by the Board of
Directors. If any nominee is unable to serve, the shares represented by all
valid Proxies will be voted for the election of such substitute as the Board of
Directors may recommend. At this time the Board of Directors knows of no reason
why any nominee might be unavailable to serve.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
With the exception of the Compensation Committee established solely to
administer its compensation plan, the Company has no committees of the Board of
Directors. This Compensation Committee, which was composed of three members of
the Board of Directors: Joel Wagman (Chairman), J.R.Y. Hugo, and Allan P.
Chapman., had two meetings during the fiscal year ended December 31, 1995. No
incumbent director of the Company attended fewer then
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seventy-five percent (75%) of total meetings of the Board of Directors. The
Board of Directors conducted six meetings during the fiscal year ended
December 31, 1995.
The Company's Directors will serve in such capacity until the next annual
meeting of the Company's shareholders and until their successors have been
elected and qualified. The officers serve at the discretion of the Company's
Directors. There are no familial relationships among the Company's officers and
directors, nor are there any arrangements or understanding between any of the
directors or officers of the Company or any other person pursuant to which any
officer or director was or is to be selected as an officer or director.
The Directors and Executive Officers of the Company, their ages and
positions held in the Company as of December 31, 1995 are as follows:
NAME AGE POSITION HELD
- ---- --- -------------
Joel Wagman 63 Chief Executive Officer/President
Chairman of the Board
J.R.Y. Hugo 63 Vice Chairman and Director
Allan P. Chapman 57 Vice President/Distribution/
Director
Samuel C. Paul 62 Chief Accounting Officer/Treasurer
Director
Jon D. Bridgman 53 Vice President, Corporate
Affairs/Director
Dirk Peper 68 Chief Financial Officer
JOEL WAGMAN. Mr. Wagman has been the Chairman of the Board of Directors, Chief
Executive Officer and a Director since March, 1993. On October 18, 1995, Mr.
Wagman became President of the Company. Mr. Wagman received his Bachelor of
Arts Degree (BA), in 1955 from the University of Toronto (Toronto, Ontario).
Mr. Wagman is also a graduate of Osgoode Hall Law School (LL.B. York
University, Toronto, Canada)(1959). Mr. Wagman was appointed a "Queens Counsel"
in 1971. During the past five years, Mr. Wagman has been engaged in and with
corporations dealing with merchandising - telecommunications - television.
From September 1987 to July 1991, Mr. Wagman served as President and Chief
Executive Officer of the Telecommerce Corporation (at that time, a Canadian
public reporting company).
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While Mr. Wagman was President and CEO of Telecommerce, it was engaged in
data-telecommunications relating to the marketing and sale of goods and
services via Regional Bell Operating Companies (RBOC's).
From August, 1991 until December, 1991, Mr. Wagman served as President of
Corporatel America, Inc., a non-related U.S. private company, engaged in the
production of non-entertainment related Infomercials and the sale of goods and
services thereby. From January, 1992, until the date hereof, Mr. Wagman has at
various times served on a full-time basis as President, Chief Executive Officer
and Chairman of the Board of Corporatel International, Inc. (a subsidiary of
American Entertainment Group, Inc.).
J.R.Y. HUGO. Mr. Hugo has been the Vice Chairman and a Director since 1994. He
has been in the corporate and finance business since 1989. Prior to that time,
he was a practicing attorney in the corporate and securities area in Toronto. He
obtained undergraduate degrees from the University of Toronto and his law degree
from Osgoode Hall Law School in Toronto.
ALLAN P. CHAPMAN. Mr. Chapman became a Vice President and Director of the
Company in September, 1995. During the past thirty-four years, Mr. Chapman has
been associated with the Baton Broadcasting organization in various capacities,
including Vice President, Managing Director, and President of Glen-Warren
Productions Limited, a wholly-owned subsidiary of Baton Broadcasting
Incorporated and the largest full-service production company in Canada. From
1992 until he joined the Company, he was President of BBS Entertainment. Mr.
Chapman attended the University of Western Ontario.
SAMUEL C. PAUL. Mr. Paul has been a Director of the Company since March, 1994
and the Secretary/Treasurer since 1995. Mr. Paul graduated from McMaster
University (Hamilton, Ontario, Canada) in 1958 with a degree in Economics and
Business. In 1962, Mr. Paul received a Chartered Accountant designation (C.A.),
having completed post graduate work at Queens University, (Kingston, Ontario,
Canada).
Mr. Paul's career spans practicing both in public accounting firms and in
various management positions within the electronics and construction industry.
Until his retirement from public accounting practice in March 1994, Mr. Paul had
been a founding member of the chartered accounting firm of Paul and Paul, of
Toronto, Ontario, Canada, specializing in financial and consulting services to
small and medium sized clients, both of a private and public nature.
JON D. BRIDGMAN. Mr. Bridgman has been a Vice President and Director of the
Company since September, 1995. Mr. Bridgman has been involved in the investment
industry for over thirty years and has experience with three major Canadian
brokerage firms and a U.S. insurance company. He has been a co-founder of five
businesses and a Director of two public companies in Canada: Eclipse Capital,
Inc. and Rampart Mercantile, Inc. From 1992 to 1993 he was Executive Vice
President of Rampart Mercantile, Inc. From 1994 until he became associated with
the Company, he was President and Chief Executive Officer of United Mercantile,
Inc. From 1993
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to 1994, he was Executive Vice President of Rampart Mercantile, Inc. From
1991 to 1992, he was Director of US marketing for Eco Corporation. From 1988
to 1992, he owned J. Bridgman Consulting, a corporate finance consulting
firm. He has attended Concordia University of Montreal, Quebec and the
University of Manitoba.
DIRK PEPER. Mr. Peper has been the Chief Financial Officer since August 16,
1995. Mr. Peper was appointed a Director of the Company on August 10, 1995 and
resigned as a Director on September 27, 1995 and Chief Financial Officer on
April 2, 1996. From 1992 until he joined the Company, he was a Management
Consultant with Canadian Executive Overseas Services. From 1988 to 1992, he
served as Senior Vice President (Special Projects) for Central Capital
Corporation. From May, 1978 to April, 1988, Mr. Peper was the Treasurer of the
Ontario Hydro Electric Power Commission. From October, 1974 to May, 1978, he
served as Treasurer and Commissioner of Finance of the Regional Municipality of
Peel(Province of Ontario). From May, 1967 to September, 1974, he was Deputy
Minister of Finance for the Province of Newfoundland and Labrador. From 1963 to
1967, he was a Senior Management Consultant with Peat, Marwick, Mitchell &
Company. He was educated at Queensland University, Brisbane, Australia.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934.
Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act")
requires the Company's officers and directors and persons owning more than ten
percent of the Company's Common Stock, to file initial reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC").
Additionally, Item 405 of Regulation S-B under the 34 Act requires the Company
to identify in its Form 10-KSB and proxy statement those individuals for whom
one of the above referenced reports was not filed on a timely basis during the
most recent fiscal year or prior fiscal years. Given these requirements, the
Company has the following report to make under this section. Messrs. Chapman
and Bridgman made late filings of their Forms 3 and 5.
EXECUTIVE REMUNERATION
The following table sets forth the Summary Compensation Table for the Chief
Executive Officer and the other compensated executive officers other than the
Chief Executive Officer who were serving as executive officers at the end of the
last completed fiscal year. Except as indicated in the footnotes to this
section, no other compensation not covered in the following table was paid or
distributed by the Company to such persons during the period covered. Employee
Directors receive no additional compensation for service on the Board of
Directors.
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SUMMARY COMPENSATION TABLE
<TABLE>
Annual Compensation Long Term Compensation
------------------- ----------------------------
Awards Payouts
----------- ---------------
Name Other Restricted All
and Salary Annual Stock(1)(3) LTIP Other
Principal(1)(2) Compen- Bonus Compen- Award(s) Options/Payouts
sation sation
Position Year ($) ($) ($) SARs(#) ($)
- -------- ---- ------- ----- ------ ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Joel 1995 120,000 -- -- -- --
Wagman 1994 82,140 -- -- -- --
Chairman 1993 -- -- 34,500 -- --
J.R.Y. 1995 120,000 -- -- -- --
Hugo 1994 41,982 -- -- -- --
Vice Chrmn. 1993
Jon D. 1995 10,000 -- -- -- --
Bridgman 1994 -- -- -- -- --
Vice Pres. 1993 -- -- -- -- --
Samuel C. 1995 100,000 -- -- -- --
Paul 1994 38,982 -- 26,500 -- --
Treasurer 1993 -- -- 8,500 -- --
</TABLE>
(1) As of June 26, 1995, Messrs. Sherman and Waxman resigned as Officers and
Directors of the Company. Messrs. Sherman and Waxman were compensated a total of
$10,500 each, during the period from December 31, 1994 up to the date of their
resignations.
Under an amended agreement between the Company and Messrs. Wagman, Sherman
and Waxman, which was superseded by the written agreements, salaries under their
respective agreements were payable at the rate of $120,000 per annum for each
person in cash and/or in common shares at the rate of $0.25 per share. Further,
by amended agreement between the Company and Messrs. Stevens and Paul, which
expired on December 31, 1993, salaries under their respective agreements were
payable at the rate of $50,000 and $40,000, respectively, in cash and/or in
common shares at the rate of $0.50 per share. All such individuals were paid
such salaries and fees in common stock through June 30, 1993. Unpaid salaries
subsequent to June 30, 1993 have been accrued by the Company. It should be noted
that the valuation of $0.25 and $0.50 per share was arrived at through
negotiations between these executives and the Company and was based upon the
fair market value of the Company's shares at the time the share price was
negotiated. All shares were paid to these executives pursuant to their
employment arrangements and not under a stock option plan. No further shares of
common stock in lieu of cash salary are expected to be paid in the future under
any written or oral employment agreement.
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(2) As of March 11, 1994, Mr. Wagman executed a written employment contract
with the Company. This contract is for a period of seven years and is thereafter
renewable on a year-to-year basis. Mr. Wagman is to receive a salary of $120,000
per annum under his individual contract plus the reimbursement of automobile and
certain out-of-pocket expenses. In addition, for the fiscal year ended December
31, 1993 he was eligible to receive a salary bonus of 3% at such time as the
Company generated gross revenues of between $10,000,000 and $50,000,000; 2% of
the Company's gross revenues between $50,000,001 and $100,000,000; and 1% of the
Company's gross revenues in excess of $100,000,000. No such bonus is to be paid
under this bonus arrangement. For the fiscal year to end on December 31, 1995,
Mr. Wagman was to be eligible to participate, along with other Company
executives, in a Company bonus pool not to exceed 12% of the pre-tax operating
profits of the Company. The amount and allocation of distribution will be
determined in the sole discretion of the Compensation Committee of the Company
(of which Messrs. Wagman, Hugo, and Chapman are the members). Such bonuses will
be payable 80% within 90 days of the end of each fiscal quarter, with the
remainder due within 90 days of the end of each fiscal year.
Pursuant to stock options in his written employment agreement, Mr. Wagman
is eligible to exercise options of up to 800,000 common shares at any time on or
before January 1, 1997 at a price of $.50 per share, and up to an additional
1,000,000 shares vesting January 1, 1994, at a price of $2.00 per share, on a
schedule to exercise 333,333 shares each year, cumulative, beginning on January
1, 1996 and ending on January 1, 1998. On October 30, 1995, the exercise price
regarding 1,000,000 shares was amended to reflect the following: 200,000 options
exercisable at $.50 per share; 200,000 at $.75 per share; 200,000 at $1.00 per
share; 200,000 at $1.25 per share; 200,000 at $1.50 per share. The dates of
vesting and the term remain the same.
As of March 11, 1994, Mr. Paul executed a written employment contract with
the Company which superseded all prior agreements. This contract was for a
period of seven years and is thereafter renewable on a year-to-year basis. Mr.
Paul was to receive a salary of $50,000 per annum under his contract. Commencing
with the fiscal year end of December 31, 1994, Mr. Paul was eligible to
participate, along with other Company executives, in a Company bonus pool not to
exceed 12% of the pre-tax operating profits of the Company. The amount and
allocation of distribution will be determined in the sole discretion of the
Compensation Committee of the Company (of which Messrs. Wagman, Hugo, and
Chapman are the members). Such bonuses will be payable 80% within 90 days of the
end of each fiscal quarter, with the remainder due within 90 days of the end of
each fiscal year. On October 30, 1995, the salary of Mr. Paul was retroactively
increased to $100,000 per annum, commencing April 1, 1994.
On October 30, 1995, the employment contract with Mr. Paul was modified.
Pursuant to stock options in his written employment agreement, Mr. Paul had been
eligible to exercise options of up to 40,000 common shares at any time on or
before January 1, 1997 at a price of $.50 per share. As of March 1, 1996, Mr.
Paul's previous options were cancelled. He obtained options to acquire as an
aggregate of 1,800,000 shares in the common stock of the Company as
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follows: a) up to 800,000 common shares at any time on or before January 1,
1997 at a price of $.50 per share; and b) 200,000 options exercisable at
$.50 per share; 200,000 at $.75 per share; 200,000 at $1.00 per share;
200,000 at $1.25 per share; 200,000 at $1.50 per share. The dates of vesting
and the term remain the same.
As of April 15, 1994, John R.Y. Hugo executed a written employment contract
with the Company which superseded all prior agreements, save and except for an
option in favor of Mr. Hugo respecting 200,000 common shares to be issued to Mr.
Hugo at $.50 per share. Said option is to expire January 1, 1997. This
contract is for a period of seven years and is thereafter renewable on a year-
to-year basis. Mr. Hugo is to receive a salary of $120,000 per annum under the
contract.
Commencing with the fiscal year end of December 31, 1994, Mr. Hugo will be
eligible to participate, along with other Company executives, in a Company bonus
pool not to exceed 12% of the pre-tax operating profits of the Company. The
amount and allocation of distribution will be determined in the sole discretion
of the Compensation Committee of the Company (of which Messrs. Wagman, Hugo, and
Chapman are the members). Such bonuses will be payable 80% within 90 days of the
end of each fiscal quarter, with the remainder due within 90 days of the end of
each fiscal year.
Pursuant to stock options in his written employment agreement, Mr. Hugo is
eligible to exercise options of up to 600,000 common shares at any time on or
before January 1, 1997 at a price of $.50 per share, and up to an additional
1,000,000 shares vesting January 1, 1994, at a price of $2.00 per share, on a
schedule to exercise 333,333 shares each year, cumulative, beginning on January
1, 1996 and ending on January 1, 1998. On October 30, 1995, the exercise price
regarding 1,000,000 shares was amended to reflect the following: 200,000 options
exercisable at $.50 per share; 200,000 at $.75 per share; 200,000 at $1.00 per
share; 200,000 at $1.25 per share; 200,000 at $1.50 per share. The dates of
vesting and the term remain the same.
As of November 24, 1995, Mr. Jon Bridgman executed a written employment
contract with the Company which supersedes all prior agreements with Mr.
Bridgman. This contract is for a period of four years and is thereafter
renewable on a year to year basis. Pursuant to the contract, Mr. Bridgman is to
receive a salary of $60,000 per annum. Additionally, Mr. Bridgman was granted
common stock options in the Company, to expire on November 30, 1999, as follows:
200,000 shares at $.75 per share; 200,000 shares at $1.00 per share; 200,000
shares at $1.25 per share; and 200,000 shares at $1.50 per share.
(3) On October 30, 1995, the Company authorized a bonus to Messrs. Wagman, Hugo,
and Paul each of 250,000 restricted common shares of the Company. Although
authorized, no such shares have been issued any such person as of March 31,
1996.
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There are no other written employment contracts or stock options with
officers, directors, or employees of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As of November 19, 1993, the Company had a Compensation Committee, which is
currently made up of three members of the Board of Directors, Messrs. Wagman,
Hugo, and Chapman. This Compensation Committee had a total of two meetings
during the fiscal year ended December 31, 1995.
The Company has no retirement or pension plans covering its Officers and
Directors, but anticipates the formulation of such a plan, to be subsequently
approved by its Board of Directors, although no specific plan terms have been
formulated as of the date hereof. There is a recently implemented bonus plan
which is described in the preceding section.
AUTHORIZATION OF PREFERRED SHARES
The Company proposes to amend its Articles of Incorporation to authorize
the issuance of up to 5,000,000 Preferred Shares, which would have such par
value, classes and preferences as the Company's Board of Directors may from time
to time determine. This amendment would be made as soon as the Shareholders
approve the amendment to the Articles of Incorporation.
The present Articles of Incorporation of the Company only provide for the
issuance of Common Shares. The specific classes and preferences of the Preferred
Shares will be left to the Company's Board of Directors to determine at such
time as those Preferred Shares may be issued. This Amendment will have no effect
on the number of authorized or issued Common Shares, which will remain the same.
The issuance of these Preferred Shares could be used as an anti-takeover measure
and could have the effect of preventing those who do not presently control the
Company from mounting an effort to do so. Although the issuance of Preferred
Shares could be used for this purpose, this is not the intention of the Company
in proposing the authorization of Preferred Shares.
At the present time, the Company plans to issue 250,000 Preferred Shares in
the Peter A. Wray acquisition.On September 13, 1995, the Company entered into a
letter of Intent to acquire all of the business interests, both personal and
corporate, of Mr. Peter A. Wray. These interests consist of computerized
software for image and animation (and integrated processes in connection
therewith) relative to the creation and manipulation of motion pictures and
associates uses. Pursuant to an Agreement entered into between the Company and
Peter A. Wray dated January 15, 1995, all of Mr. Wray's interests regarding the
foregoing, in a company known as Imaginetics Inc. were purchased by the Company
in consideration of the sum of $US 500,000 which sum is evidenced by a
Promissory Note payable in Preferred Shares to be issued by the Company. The
Preferred Shares to be issued in this transaction would be issued at and would
have a $2.00 par value, would be convertible at any time into common shares at
$2.00 per
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share, would be redeemable by the Company at any time at par value, would not
be subject to the payment of dividends, and would have, upon the liquidation
or winding up of the Company, a priority on the assets of the Company ahead
of all common shareholders but equal to all other preferred shareholders.
Otherwise, the Company has no definite intention to issue Preferred Shares
and has made no arrangements with anyone for such an issue. However, as the
Company expands, there will be need for additional capital, and the Management
of the Company believes that it is in the best interests of the Company and its
shareholders to have the option to issue Preferred Shares as an additional
avenue to raise capital. In some cases, Preferred Shares can be used to acquire
capital without diluting the Common Shareholders. The Company has an ongoing
need for additional capital and wants to have as much flexibility as possible in
creating programs for raising such capital. The Company's Management believes
that the addition of Preferred Shares will be an important step in developing
that flexibility. This is the principal reason for the proposal to authorize
Preferred Shares. The approval of the Preferred Shares will also permit the
Company to issue the shares in the two foregoing transactions. This resolution
requires the affirmative vote of a majority of the issued and outstanding shares
of the Company. The Board of Directors recommends that shareholders vote FOR the
resolution.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company has appointed the Company's present independent public
accountants, Rollins & Associates, P.C., for the fiscal year ended December 31,
1996. This appointment will be submitted to the shareholders for ratification at
the Meeting.
Representatives of this firm are expected to be present at the
Shareholders' Meeting, will have an opportunity to make a statement if they
desire to do so, and are expected to be available to respond to appropriate
questions.
The submission of the appointment of Rollins & Associates, P.C. is not
required by law or the bylaws of the Company. The Board of Directors is
nevertheless submitting it to the shareholders to ascertain their views. If the
shareholders do not ratify the appointment, the selection of other independent
public accountants will be considered by the Board of Directors. To be adopted,
the resolution requires the affirmative vote of a majority of the shares voting
at the meeting. The Board of Directors recommends a vote FOR the resolution.
OTHER MATTERS
As of the date of this Proxy Statement, the Company's management has no
knowledge of any business, other than previously described herein, which should
be presented for consideration at the meeting. In the event that any other
business is presented at the meeting, it is intended that the persons named in
the enclosed Proxy will have authority to vote such Proxy in accordance with
their best judgment on such business.
12
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SHAREHOLDER PROPOSALS
According to Rule 14a-8 under the Securities Exchange Act of 1934, a
shareholder may require that certain proposals suggested by shareholders be
voted on at a shareholders meeting. Information concerning such proposals must
be submitted to the Company for inclusion in its proxy statement. Such
proposals for inclusion in the Company's proxy materials relating to the next
Annual Meeting of the Company must be received by the Company not later than
November 30, 1996.
ANNUAL REPORT TO SHAREHOLDERS
The Company's Annual Report to Shareholders, including financial
statements, has been mailed with these materials to all shareholders of record.
Any shareholder who has not received a copy of such Annual Report may obtain a
copy by writing to the Company. The Company hereby incorporates by reference
into this proxy solicitation material the financial statements, management's
discussion and analysis of financial condition and results of operations, and
changes in and disagreements with accountants on accounting and financial
disclosure from its Annual Report to Shareholders. Otherwise, such Annual Report
is not to be treated as part of the proxy solicitation material, nor as having
been incorporated by reference.
SOLICITATION OF PROXIES
The cost of solicitation will be borne by the Company. The Company will
reimburse brokerage firms and other custodians, nominees, and fiduciaries for
reasonable expenses incurred by them in sending proxy material to the beneficial
owners of common stock. In addition to solicitation by mail, directors,
officers, and regular employees of the Company may solicit Proxies personally or
by telegraph or telephone, without additional compensation.
NOTICE TO BANKS, BROKERS/DEALERS, VOTING TRUSTEES, AND THEIR NOMINEES
Please advise the Company, in care of its corporate address, whether any
other persons are the beneficial owners of the shares of common stock for which
Proxies are being solicited from you, and, if so, the number of copies of the
Proxy Statement, and other soliciting materials, you wish to receive in order to
supply copies to the beneficial owners of shares.
AMERICAN ENTERTAINMENT GROUP, INC.
By: Joel Wagman
--------------------------------
Chairman
Dated: July 7, 1996
13
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PROXY
AMERICAN ENTERTAINMENT GROUP, INC.
160 Bedford Road, Suite 306
Toronto, Ontario Canada M5R 2K9
PROXY FOR SPECIAL ANNUAL MEETING OF SHAREHOLDERS
OF AMERICAN ENTERTAINMENT GROUP, INC.
THE UNDERSIGNED hereby appoints and constitutes Joel Wagman and J.R.Y.
Hugo, and each of them, his true and lawful agents and proxies, with full
power of substitution and revocation in each, to attend, represent and to
vote the shares of common stock of the undersigned at the Special Annual
Meeting of Shareholders of AMERICAN ENTERTAINMENT GROUP, INC. (the Company),
to be held at The Cincinnatian Hotel, 601 Vine Street, Cincinnati, Ohio 45202
on August 9, 1996, at 10 a.m., local time, for the purposes set forth in the
accompanying Notice of Meeting of Shareholders and at any adjournment
thereof, on all matters coming before said meeting.
Management recommends a vote FOR items 1,2, 3, and 4, and SHARES WILL BE
SO VOTED UNLESS YOU INDICATE OTHERWISE:
1. Approval of the following individuals to serve on the Board of
Directors:
Joel Wagman FOR ___ AGAINST ___ ABSTAIN ___
J.R.Y. Hugo FOR ___ AGAINST ___ ABSTAIN ___
Samuel C. Paul FOR ___ AGAINST ___ ABSTAIN ___
Allen P. Chapman FOR ___ AGAINST ___ ABSTAIN ___
Jon D. Bridgman FOR ___ AGAINST ___ ABSTAIN ___
2. To amend the Company's Articles of Incorporation to authorize
5,000,000 Preferred Shares, which would have such par value, classes and
preferences as the Company's Board of Directors may from time to time
determine;
FOR ___ AGAINST ___ ABSTAIN ___
3. To ratify and approve Rollins & Associates, P.C. as the Company's
independent auditors for the fiscal year ended December 31, 1996; and
FOR ___ AGAINST ___ ABSTAIN ___
4. Approval of any other matter to come before the meeting.
FOR ___ AGAINST ___ ABSTAIN ___
Dated:________________________ , 1996
(Printed Name of Shareholder)_________________________________________________
(Signature of Shareholder)____________________________________________________
<PAGE>
This Proxy Must Be Signed Exactly As Your Name Appears On Your Stock
Certificate. Executors, Administrators, Trustees, Etc., Should Give Full
Title As Such. If The Signer Is A Corporation, Please Sign Full Corporate
Name By Duly Authorized Officer.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY. THE FAILURE TO
CHECK A BLOCK WILL BE TAKEN AS A VOTE FOR THE PROPOSITION.
