<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For Use of the
Commission Only
(as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
RMS TITANIC, INC.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (set forth the amount on which the filing
fee is calculated and state how it was determined);
- --------------------------------------------------------------------------------
(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:
-0-
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
Registrant
- --------------------------------------------------------------------------------
(4) Date Filed:
December , 1999
- --------------------------------------------------------------------------------
<PAGE> 2
[PRELIMINARY COPIES]
RMS TITANIC, INC.
17 BATTERY PLACE
NEW YORK, NY 10004
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
February ___, 2000
---------------------------
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of RMS Titanic,
Inc., a Florida corporation (the "Company") will be held at __________________
______________________, Clearwater, Florida on February ___, 2000 at 10:00 a.m.
E.D.S.T., to consider the following:
1. The removal of George H. Tulloch as a director.
2. The removal of Allan C. Carlin as a director.
3. The removal of Kurt Hothorn as a director.
4. The removal of Paul-Henri Nargeolet as a director.
5. The election of Arnie Geller as a director until the next Annual Meeting of
Stockholders or until such earlier date as his successor is appointed.
6. The election of G. Michael Harris as a director until the next Annual
Meeting of Stockholders or until such earlier date as his successor is
appointed.
7. The election of Stephen Pennac as a director until the next Annual Meeting
of Stockholders or until such earlier date as his successor is appointed.
Copies of this Notice of Special Meeting of Shareholders, the related Proxy
Statement and Form of Proxy are being mailed on or about January ___, 2000. The
Board of Directors has determined January ___, 2000 at the close of business as
the record date for the determination of Shareholders entitled to receive
notice of and to vote at the meeting. The transfer books will not be closed.
It is desirable that as large a proportion as possible of stockholders be
represented in person or by proxy. Any consent previously executed in
connection with the removal of Mr. Tulloch, Mr. Carlin, Mr. Hothorn and Mr.
Nargeolet for which notice was provided to all stockholders has no relationship
to this solicitation.
Article III, Section 4 of the Company's bylaws provides that any or all of the
directors may be removed with or without cause by a vote of a majority of all
shares outstanding and entitled to vote at a special meeting of shareholders
called for that purpose. In no event shall a quorum consist of less than
one-third (1/3) of the shareholders entitled to vote at the meeting.
BY ORDER OF THE BOARD
OF DIRECTORS
ARNIE GELLER
G. MICHAEL HARRIS
January ___, 2000
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. WHETHER OR NOT YOU EXPECT TO
ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
AND RETURN IT IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES. IF YOU SUBMIT A PROXY, YOU MAY STILL VOTE YOUR STOCK IN
PERSON AT THE MEETING IF YOU SO DESIRE.
<PAGE> 3
[PRELIMINARY COPIES]
RMS TITANIC, INC.
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD
FEBRUARY ___, 2000
Date first sent or given to security holders: January ___, 2000.
I. SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement and accompanying form of proxy are provided in
connection with the solicitation by the Board of Directors of RMS Titanic,
Inc., a Florida corporation (the "Company"), of proxies to be used at the
Special Meeting of Shareholders, to be held February ___, 2000, at 10:00 a.m.
Eastern Daylight Savings Time, at ____________________________________,
Clearwater, Florida (the "Special Meeting"), and at any and all adjournments
thereof, for the purpose set forth in the accompanying notice of said meeting,
dated January ___, 2000.
This proxy statement is furnished and solicited by Arnie Geller and G.
Michael Harris in their capacity as Directors of the Company and the holders of
not less than one-tenth of all the shares entitled to vote at a special meeting
in accordance with Article II, Section 3 of the Company's Bylaws. Shareholders
present, in person or by proxy, holding at least one-third of the shares of the
Company entitled to vote shall constitute a quorum at all meetings of the
shareholders. Article III, Section 4 of the Company's bylaws provides that any
or all of the directors may be removed with or without cause by a vote of a
majority of all the shares outstanding and entitled to vote at a special
meeting of shareholders called for that purpose.
As this solicitation is being made by the Board of Directors of the
Company, any costs incurred in connection therewith will be borne by the
Company. Brokerage houses and other nominees of record will be requested to
forward all proxy solicitation material to the beneficial owners, and their
expenses in such regard will also be paid by the Company. All proxies are being
solicited by mail in the accompanying form, but further solicitation following
the original mailing may be made by Board representatives or agents by
telephone, telegraph, or personal contact with certain shareholders.
Execution of the enclosed white proxy will not effect a shareholder's
right to attend the meeting and vote in person. A shareholder giving a proxy
may revoke it at any time before exercise, by either notifying the Company of
its revocation, submitting a substitute proxy dated subsequent to the initial
one or attending the Special Meeting and voting in person.
II. BACKGROUND/REASONS FOR THE SPECIAL MEETING
The Company held an annual meeting of stockholders on August 9, 1999. At
the August 9, 1999 meeting George H. Tulloch, Allan H. Carlin, Arnie Geller, G.
Michael Harris, Kurt Hothorn and Paul-Henri Nargeolet were elected as Directors.
Pursuant to a Voting Agreement dated August 22, 1997 (the "Voting Agreement")
among Messrs. Carlin, Geller, Harris, Hothorn, and certain third parties,
including Mr. Carlin's spouse and Mr. Hothorn's spouse, all of such individuals
agreed that until August 31, 1999 to vote their shares of Common Stock of the
Company in favor of the election of George Tulloch, Allan H. Carlin, Arnie
Geller, G. Michael Harris and Kurt Hothorn as directors of the Company. Messrs.
Harris and Geller believe that this Annual Meeting of Shareholders was scheduled
to occur prior to the termination of the Voting Agreement specifically so that
Messrs.
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Carlin, Tulloch and Hothorn could continue as members of the Board of
Directors, even though the other parties to the Voting Agreement did not desire
these individuals to remain as directors of the Company.
Messrs. Harris and Geller communicated with Mr. Carlin and Mr. Tulloch,
the prior officers of the Company, advising these individuals that a new
shareholders' meeting should be convened which complied with Rule 14a-13(a)(3)
promulgated under the Securities Exchange Act of 1934, as amended, which
requires that a registrant make certain inquiries of record holders at least 20
days prior to the record date of a meeting of security holders. Certain security
holders of the Company communicated with Messrs. Carlin and Tulloch indicating
that such security holders never received the proxy materials. Messrs. Carlin
and Tulloch refused to convene a new shareholders' meeting in compliance with
Rule 14a-13.
Messrs. Geller and Harris also objected to certain actions taken by
Messrs. Carlin and Tulloch, including but not limited to, the improper
extension of the expiration date of options to acquire 500,000 shares of the
Company's common stock at an exercise price of $1.25 issued to Mr. Carlin,
legal fees paid to Mr. Carlin, and alleged 5 year oral employment agreements at
base salaries of $300,000 per year to Messrs. Tulloch and Carlin. The
allegations and statements set forth above have not been adjudicated on the
merits and are presently merely allegations of unproved facts. The shareholders
should not assume that events as asserted by Mr. Harris and Mr. Geller are in
fact true or can otherwise be substantiated in an adjudication on the merits.
As noted in a Schedule 13D filed by Mr. Geller and Mr. Harris and
another individual on or about October 21, 1998, these individuals disclosed
they were contemplating, or forming part of, a group that would acquire
additional securities of the Company for the purpose of effecting a change of
control of the Company through a change in the present Board of Directors and
management. On November 26, 1999, a Schedule 13D was filed by Messrs. Harris,
Geller and various other individuals and entities which disclosed the intent to
remove George H. Tulloch, Allan H. Carlin, Kurt Hothorn and Paul-Henri Nargeolet
as Directors of the Company. This removal was effectuated by the delivery to the
Company on November 26, 1999 of written consents executed by persons entitled to
vote a majority of the Company's outstanding shares. Immediately upon the
removal of Messrs. Tulloch, Carlin, Hothorn and Nargeolet as Directors, Messrs.
Tulloch and Carlin were removed as officers and Messrs. Harris and Geller became
the officers and the remaining Directors of the Company.
On November 26, 1999, Messrs. Harris and Geller obtained peaceful and
lawful possession of the Company's offices located in New York City. At
approximately 3:00 A.M., November 27, 1999, Mr. Carlin forcefully entered by
drilling the locks to the Company's offices and removed approximately 20 cartons
of the Company's documents and tapes and deleted most of the information
contained on the Company's computer equipment, which has now been restored. As
the result of such actions, Mr. Carlin was arrested and the District Attorney of
the County of New York asked a judge of the Criminal Court of the City of New
York to issue a temporary order of protection to require Mr. Carlin stay away
from the Company's business offices and to not make any contact with third
parties.
On or about December 14, 1999, Messrs. Geller and Harris on behalf of
the Company instituted an action against Messrs. Carlin, Tulloch, Hothorn and
Nargeolet in the Supreme Court of the State of New York - County of New York,
Case No. 99-605625. The purpose of this action was to validate the action by
written consent of a majority of shareholders whereby defendants, Carlin,
Tulloch, Hothorn and Nargeolet were removed as directors without cause, all
pursuant to the provisions of the Florida Business Corporation Act, and to
validate the appointment of Messrs. Geller and Harris as the officers of the
Company. In addition, the Complaint seeks to cause Chase Manhattan Bank to
recognize Messrs. Geller and Harris as signatories on the Company's bank
accounts.
On December 15, 1999, the Supreme Court of New York issued an Order to
Show Cause Granting Plaintiffs' Preliminary Injunction which enjoins and
restrains the Defendants from interfering with the business of the Company,
acting as a director or officer of the Company or holding themselves out to the
public as an officer or director of the Company. On December 22, 1999, a
hearing was held by the New York court in
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<PAGE> 5
which no decision was rendered. At that hearing the defendants argued the
proper venue for the adjudication of this dispute was in the United States
District Court - District of Connecticut because a lawsuit was filed in that
court first as described in the following paragraph. No evidentiary matters were
presented or testimony taken at this hearing.
On or about December 13, 1999, Messrs. Tulloch, Carlin, Hothorn and
Nargeolet on behalf of themselves and the Company, instituted an action in the
United States District Court - District of Connecticut, Case No. 399CV2401
against all of the individuals who executed the Schedule 13D filed on or about
November 26, 1999, the purpose of which was to remove Messrs. Tulloch, Carlin,
Hothorn and Nargeolet as Directors and officers of the Company. This Complaint
alleges fraud and violation of Sections 13 and 14 of the Securities Exchange Act
of 1934, as amended, breach of fiduciary duty, common law fraud,
misrepresentation, breach of a prior District Court of Connecticut stipulated
judgment and agreement, violation of Florida corporation laws including the
control share acquisition statute, unlawful entry and detainer, violation of the
Racketeering Influence and Corrupt Organizational Act and violation of the
Connecticut Unfair Trade Practice Act. The judge in this proceeding has granted
the plaintiff's request for expedited discovery and depositions. A hearing is
scheduled on January 7, 2000 regarding the plaintiff's request for an injunction
to invalidate the prior stockholder consent actions, which removed Messrs.
Tulloch, Carlin, Hothorn and Nargeolet as directors. The defendants intend to
challenge venue and jurisdiction and strongly disagree with the allegations set
forth in this complaint.
These litigation matters are in their early stages of discovery. It is
anticipated that all parties will aggressively defend each of these actions.
Messrs. Harris and Geller do not anticipate an adjudication on the merits of
these cases prior to the scheduled special meeting of stockholders on February
____, 2000.
The staff of the Securities and Exchange Commission has made inquiries
regarding the Schedule 13D filed on November 26, 1999. Copies of court
pleadings have been provided to the staff of the SEC. The Company anticipates
that the SEC's Division of Enforcement may commence an inquiry and
investigation regarding the activities and allegations set forth in these
various cases. Messrs. Harris and Geller intend to voluntarily cooperate with
any inquiries of the SEC staff.
Messrs. Harris and Geller believe that it is in the Company's best
interest to convene this Special Meeting of Stockholders. This Special Meeting
of Stockholders should eliminate any alleged improprieties of the August 9,
1999 annual meeting of stockholders and any alleged deficiencies in the action
taken by written consent of majority stockholders removing Messrs. Tulloch,
Carlin, Hothorn and Nargeolet as Directors on November 26, 1999. Also by
convening this Special Meeting Mr. Harris and Mr. Geller desire to reduce the
amount of legal fees the Company will incur in connection with these disputes.
III. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only shareholders of record as of January ___, 2000 will be entitled to
vote at the Special Meeting. At the close of business on such record date, there
were issued and outstanding approximately 16,193,119 shares of the Company's
Common Stock, par value $.0001 per share, ("Common Stock"), each of which was
entitled to one vote. There are no other classes of voting stock issued and
outstanding.
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The following table enumerates, as of January ___, 2000, the name,
address, and ownership, both by numerical holding and percentage of interest,
of, each beneficial owner or more than five percent (5%) of the Company's
outstanding Common Stock, the directors of the Company, individually, and its
directors and executive officers as a group. The information set forth below
regarding Titanic Ventures Limited Partnership and George Tulloch is obtained
from the Company's proxy statement for the August 9, 1999 Annual Meeting, which
was prepared by Mr. Tulloch and Mr. Carlin. The information regarding all other
shareholders is obtained from the Schedule 13D filed on November 26, 1999. This
table excludes security ownership of Mr. Tulloch, Mr. Carlin, Mr. Hothorn and
Mr. Nargeolet because these individuals are no longer considered directors of
the Company based upon their prior removal through action by written consent.
See the Company's proxy statement for the August 9, 1999 Annual Meeting for
information regarding these individuals stock ownership.
<TABLE>
<CAPTION>
Amount
Name and Address of Beneficially Common Stock
Beneficial Owner Class Owned Percentage
- ------------------- ------ ------------ ------------
<S> <C> <C> <C>
Titanic Ventures Limited Partnership (1)(2)(3) Common 5,721,667 35.3
204 Old Post Road
Southport, CT 06490
G. Michael Harris (4)(7)(8) Common 125,000 .8
16 Winston Drive
Belleair, FL 34616
Arnie Geller (5) Common 2,502,007(5) 15.5
720 Spring Street, N.W.
Atlanta, GA 30308
Stephen Pennac Common -- --
c/o RMS Titanic, Inc.
17 Battery Place
New York, NY
Joe Marsh (6)(8) Common 1,740,979 10.8
c/o RMS Titanic, Inc.
17 Battery Place
New York, NY 10004
TAG Acquisition, LLC (7)(8) Common 1,634,384 10.1
c/o G. Michael Harris
16 Winston Drive
Belleair, FL 34616
Stephen Sybesma (7)(8) Common 900,000 5.6
c/o RMS Titanic, Inc.
17 Battery Place
New York, NY 10004
All Officers and Directors as a Group Common 4,136,391 25.5
(3 persons)
</TABLE>
(1) George Tulloch is the President and sole shareholder of Oceanic Research
and Exploration Limited ("ORE"), a Delaware corporation, which serves as
the General Partner of Titanic Ventures Limited Partnership ("TVLP");
William Gasparrini is a limited partner of TVLP. The General Partner of
TVLP has the right to vote the shares of the Company without the consent of
the Limited Partners of TVLP, and may dispose of the shares of the Company
upon the consent of the Limited Partners of TVLP.
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<PAGE> 7
(2) Represents shares over which TVLP and Mr. Tulloch, as President of ORE,
exercise voting control, and includes 1,052,112 shares that ORE has
distributed to certain limited partners of TVLP, representing their
respective interest in shares of the Company owned by TVLP (the
"Distribution Shares"); also includes 87,388 shares which have been
retained for the payment of the pro-rata shares of TVLP's expenses
allocable to the limited partners who received the Distribution Shares. The
Distribution Shares are subject to a written proxy granting Mr. Tulloch the
right to vote such shares until June 17, 1999, with such proxies to
terminate upon the public market sale of such shares. As adjusted for
distribution of the Distribution Shares, TVLP has the power to dispose of
4,582,167 shares of the Company, representing 28.3% of the outstanding
Common Stock of the Company. By letter agreement dated June 12, 1996 Mr.
Tulloch had previously agreed, subject to the fulfillment of certain
conditions, to distribute eighty (80%) percent of each limited partner's
interest in the shares of the Company owned by TVLP, subject to the
execution of proxies by the limited partners granting to the General
Partner voting power over such shares until May 31, 1997, with such proxies
to terminate upon the public market sale of such shares. Mr. Tulloch and
the General Partner believe that such letter agreement is not enforceable
on the basis of a number of grounds, including but not limited to
fraudulent inducement, repudiation and the absence of consideration, and
accordingly will not distribute shares of the Company owned by TVLP to the
limited partners of TVLP in accordance with the terms thereof. Mr.
Gasparrini claims that such June 12, 1996 letter agreement is valid and
enforceable, and has also claimed that a certain document dated April 21,
1995, pursuant to which Mr. Tulloch allegedly agreed to distribute each
limited partner's interest in the shares of the Company owned by TVLP and
immediately granted each limited partner the right to vote the shares of
the Company's Common Stock owned by TVLP in proportion to their partnership
interests, is enforceable. Mr. Gasparrini has commenced legal proceedings
against Mr. Tulloch, ORE and TVLP in the Superior Court of Connecticut,
Judicial District of Stamford/Norwalk in order to enforce his rights under
the June 12, 1996 letter agreement and the purported April 21, 1995
agreement. Settlement discussions with respect to such litigation are
ongoing, and, if successfully consummated, it is likely that TVLP will
distribute the balance of all of its shares in the Company to the limited
partners of TVLP. In the event that such settlement discussions are not
successful, Mr. Tulloch, on behalf of ORE and TVLP, believes that there are
meritorious defenses to Mr. Gasparrini's claims and intends to defend their
position vigorously.
(3) In the event that TVLP distributes the balance of its shares in the Company
to the limited partners (see footnote 2 above) or Mr. Gasparrini
successfully enforces the alleged obligation of ORE to distribute the
shares pursuant to the June 12, 1996 letter agreement or the purported
April 21, 1995 agreement, as referenced in footnote (2), Mr. Gasparrini
will receive distribution of a maximum of 1,912,288 shares of the Company
owned by TVLP (as may be decreased for payment of TVLP's liabilities), and
Mr. Tulloch, through his ownership of ORE, will receive distribution of a
maximum of 511,152 shares of the Company owned by TVLP (as may be decreased
for payment of TVLP's liabilities). In the event of the distribution of
such TVLP shares, Mr. Gasparrini would have the power to vote and dispose
of a maximum of 24.4% of the outstanding Common Stock of the Company, Mr.
Tulloch, through his ownership of ORE and exclusive of the shares he
individually owns, would have the right to vote a maximum of 9.7% of the
outstanding Common Stock of the Company (including the Distribution
Shares), and Mr. Tulloch would have the right to dispose of a maximum of
3.2% of the Company.
(4) Mr. Harris owns 125,000 of his shares in a tenants by the entireties
account with his wife.
(5) Mr. Geller personally owns 1,450,000 shares and holds voting proxies for
1,052,007 shares from the following individuals or entities:
<TABLE>
<CAPTION>
<S> <C>
Financial Group of Kuwait 488,007
Fairline Limited 200,000
John Hill 80,000
Shirley Hill 25,000
James Hill 25,000
Anne Hill 234,000
---------
Total 1,052,007
=========
</TABLE>
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(6) Mr. Marsh acquired approximately 883,950 shares in open market purchases as
reported in his Schedule 13D filed on or about October 21, 1999. Since that
date, Mr. Marsh has acquired approximately 827,029 shares in private
transactions. In addition, Mr. Marsh has the beneficial ownership rights to
1,534,384 shares of Common Stock acquired by TAG Acquisition, LLC ("TAG")
from Gasparrini, et al when such shares are distributed by TAG. Mr. Marsh
is also the holder of a voting proxy for 30,000 shares from J. P. Utsick.
(7) TAG Acquisition, LLC ("TAG") acquired 1,634,384 shares of Common Stock from
William S. Gasparrini, et al on November 16, 1999. TAG is managed and owned
by Mr. Harris.
(8) On November 16, 1999, TAG acquired a total of 1,634,384 shares of Common
Stock from William S. Gasparrini, individually and on behalf of certain
affiliated entities, for $3.00 a share. These shares are subject to a
voting proxy granted to Jon Thompson, which expired December 25, 1999. The
funds for the purchase of these shares by TAG were provided by Joe Marsh
and Steven Sybesma. There is an oral understanding that Mr. Harris will
cause TAG to distribute 1,534,384 shares to Mr. Marsh and 100,000 shares to
Mr. Sybesma such that all of the Gasparrini shares acquired by TAG will
ultimately be owned by Mr. Marsh and Mr. Sybesma.
Other than as set forth above, the Company is not aware of any other
stockholders who beneficially own, individually or as a group, 5% or more of
the outstanding shares of Common Stock.
IV. REMOVAL OF GEORGE H. TULLOCH, ALLAN G. CARLIN, KURT HOTHORN,
PAUL-HENRY NARGEOLET AS DIRECTORS - PROPOSALS 1 THROUGH 4.
Proposals 1 through 4 request that stockholders ratify and approve the
removal of Mr. Tulloch, Mr. Carlin, Mr. Hothorn and Mr. Nargeolet as directors.
These individuals were previously removed through an action by written consent
of persons entitled to vote a majority of the Company's outstanding shares of
common stock effective November 26, 1999. These proposals seek to ratify and
reconfirm the actions taken by persons entitled to vote a majority of the
Company's outstanding common stock. Article III, Section 4 of the Company's
bylaws provide that any or all of the directors may be removed with or without
cause by a vote of a majority of all the shares outstanding and entitled to vote
at a special meeting of shareholders called for that purpose. Florida Statute
Section 607.0808 provides that shareholders may remove one or more directors
with or without cause unless the Articles of Incorporation provide that
directors may be removed only for cause. The Company's Articles of Incorporation
do not contain any such restriction. Mr. Geller and Mr. Harris recommend that
shareholders vote for each of proposals 1, 2, 3 and 4 to remove Mr. Tulloch, Mr.
Carlin, Mr. Hothorn and Mr. Nargeolet, respectively, as directors of the
Company. If these proposals are approved and Mr. Pennac is elected, the Board of
Directors will consist of Arnie Geller, G. Michael Harris and Stephen Pennac.
The removal of Mr. Tulloch, Mr. Carlin, Mr. Hothorn and Mr. Nargeolet creates
vacancies on the Board, which could be filled by a majority of the remaining
Board of Directors. Mr. Harris and Mr. Geller have indicated they have no
current plans or arrangements to fill the vacancies to created by the removal of
these directors, other than the appointment of Stephen Pennac as a director
until the next succeeding Annual Meeting or Special Stockholder Meeting called
for the purpose of electing directors.
V. ELECTION OF DIRECTORS - PROPOSALS 5 THROUGH 7
The Bylaws of the Company provide that its Board of Directors shall
consist of at least one director, as may be fixed from time to time by action
of the Board of Directors or of the shareholders. The Board of Directors
recommends that the exact number of directors not be determined by shareholder
action, thus permitting the Board to increase or decrease the number of
directors during the year and to fill any vacancy as it deems advisable to do
so. The Board is currently comprised of two members, Mr. Geller and Mr. Harris.
Each director will be elected to serve a one-year term expiring upon
occurrence of the next annual meeting of shareholders and the election and
qualification there of his successor.
Unless authority is withheld as to a particular nominee or as to all
such nominees, the shares represented by the Board of Directors' proxies
properly executed and timely received will be voted for the election of
directors of the three nominees named below. If any nominee shall cease to be a
candidate for election for any reason, the proxy will be voted for a substitute
nominee designated by the Board of Directors and for the remaining nominees so
listed. The Board has no reason to believe that any nominee will be unavailable
to serve if elected. Certain information with respect to each nominee is
hereafter set forth:
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<PAGE> 9
The directors, their ages and the year each person became a director of
the Company are shown below:
<TABLE>
<CAPTION>
COMPANY DIRECTOR
NAME AGE POSITION HELD SINCE
---- --- ------------- --------
<S> <C> <C> <C>
Arnie Geller 59 Director, Chief Executive Officer May 26, 1999
and President
G. Michael Harris 35 Executive Vice President, May 26, 1999
Chief Operating Officer,
Secretary and Director
Stephen Pennac -- Director [Nominee]
</TABLE>
All directors hold office until the next annual meeting of the
Company's shareholders and until their successors are fully elected and
qualified. Executive officers are appointed annually by the Board of
Directors and serve at the discretion of the Board.
Arnie Geller served as President and as a director of the Company from
May 1993 to May 1995, and has served as a director of the Company since
May 26, 1999. Prior to 1993, Mr. Geller had principally been engaged in
various executive capacities in the record industry for approximately
27 years. Mr. Geller is presently a self-employed corporate consultant.
G. Michael Harris is a promoter and agent of entertainment programs and
events, and is the principal of Worldwide Licensing and Merchandising,
Inc., a privately-held company involved in the presentation of an
exhibition having a Titanic theme in Orlando, Florida with a subsidiary
of SFX Entertainment and a third-party. Mr. Harris has served as a
director of the company since May 26, 1999.
Stephen Pennac is a conservator-restorer and has been responsible for
the conservation and restoration aspects of the Titanic collection
since 1987. Mr. Pennac is also President of ECCO, European
Confederation of Conservator/Restorer Organizations, and Vice President
of the FFCR, Federation Francaise des Conservateur-Restaurateurs. He is
chair of the subcommittee on professional issues at the ICOM CC board
(International Council of Museum, Conservation Committee).
No family relationship exists between or among any of the directors and
executive officers of the Company. Except as disclosed above, none of
the executive officers or directors are directors of any other company
having a class of equity securities registered under or required to
file periodic reports pursuant to the Securities Exchange Act of 1934,
as amended, or any company registered as an investment company under
the Investment Company Act of 1940, as amended.
Pursuant to an action by written consent of persons entitled to vote a
majority of the outstanding shares of the Company's Common Stock,
Messrs. Tulloch, Carlin, Hothorn and Nargeolet were removed as
directors and officers of the Company, effective November 26, 1999.
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<PAGE> 10
COMMITTEES
At the present time, the Company has no nominating, executive, or
compensation committees. The Board of Directors held three (3) meetings in the
fiscal year ended February 28, 1999, and acted on unanimous consent on one (1)
occasion.
DIRECTOR COMPENSATION
The Company does not have any arrangements for compensating directors
for services rendered as a director. No compensation has been paid to any
individual for services rendered as a director.
VI. EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION TABLE
The following table sets forth a summary of compensation paid or
accrued to the prior executive officers of the Company for the fiscal years
ended February 29, 1997, February 28, 1998 and February 28, 1999. This
information is obtained from the proxy statement prepared by Messrs. Carlin and
Tulloch relating to the August 9, 1999 Annual Meeting of Stockholders.
<TABLE>
<CAPTION>
Long-Term
Compensation
-------------------------
Common
Name Shares
And Other Subject to
Principal Year Annual Options
Position Ended February 28th (29th) Salary Compensation Granted
- --------- -------------------------- -------- ------------ -----------
<S> <C> <C> <C> <C>
George Tulloch 1999 $120,000 -0- -0-
Former President and Former 1998 $120,000 -0- -0-
Chief Financial Officer; 1997 $120,000 -0- -0-
Former Executive Director
of Corporate Public
Relations
</TABLE>
- ---------------
The foregoing compensation accrued for Mr. Tulloch is based upon an
annual salary of $120,000. The proxy statement relating to the August 9, 1999
Annual Meeting of Stockholders disclosed that the Company approved five year
employment agreements for George Tulloch and Allan H. Carlin, and that each of
them would be paid a base salary of $300,000 per year, effective April 1, 1999,
with such agreements to contain additional provisions to be negotiated in the
near future. Mr. Geller and Mr. Harris take the position that the Board of
Directors never ratified the final terms and conditions of such agreements and
that Mr. Tulloch and Mr. Carlin are not entitled to any compensation pursuant
to any agreements. To Mr. Geller's and Mrs. Harris' knowledge, no written
agreement was ever entered into between the Company and Mr. Tulloch and Mr.
Carlin.
STOCK OPTIONS
No stock options were granted to the executive officers of the Company
during the fiscal year ended February 28, 1999. The proxy statement for the
Annual Meeting of Stockholders held on August 9, 1999, discloses that Mr.
Carlin was paid compensation of $215,000 for services rendered as general
counsel to the Company during the fiscal year ended February 28, 1999. This
amount was in addition to Mr. Carlin's salary.
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<PAGE> 11
In addition, such proxy statement also discloses that during the fiscal year
ended February 28, 1999, the Company extended until April 6, 2004, options
granted to Mr. Carlin to purchase 500,000 shares of the Company's Common Stock
at an exercise price of $1.25, which options were scheduled to expire on April
6, 1999. Mr. Harris and Mr. Geller disagree with these statements and take the
position that these options are null and void because the Board of Directors
did not extend the expiration date of these options.
OPTION EXERCISES AND HOLDINGS
None of the executive officers of the Company exercised any stock
options during the fiscal year ended February 28, 1999.
COMPENSATION OF DIRECTORS
The Company does not have any arrangements for compensating directors
for services rendered as a director. No compensation has been paid to any
individual for services rendered as a director.
VII. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Subsequent to the year ended February 28, 1999, the Company entered into
an agreement with a subsidiary of SFX Entertainment, Inc., pursuant to which,
among other things, the Company licensed SFX the worldwide rights to exhibit the
Company's Titanic artifacts for a minimum of one year, commencing September 14,
1999 (the "License Agreement"). The agreement with SFX provides that the Company
shall have the right to receive twenty (20%) of the net profits from a Titanic
themed exhibition in Orlando, Florida which SFX is presenting with
third-parties. G. Michael Harris, a director and officer of the Company, is a
principal of one of the third-parties involved in such Orlando exhibition.
The Company loaned its former President, George Tulloch, the sum of
$72,367, as evidenced by a promissory note dated January 5, 1999, bearing
interest at the rate of 8% per annum and payable in full not later than
February 29,2000. Such loan is secured by alleged accruals for past salary owed
by the Company to Mr. Tulloch amounting to approximately $700,000 as of
February 28, 1999. The statements set forth in this paragraph are obtained from
the August 9, 1999 Proxy Statement prepared by Mr. Carlin and Mr. Tulloch. Mr.
Harris and Mr. Geller are currently investigating the background and
documentation of this transaction for proper dating of documents and corporate
approvals.
VIII. ANNUAL REPORT
The Company's Annual Report to Stockholders for the fiscal year ended
February 28, 1999, including financial statements and the opinion of Goldstein
Golub Kessler LLP thereon, and the Form 10-Q for quarter ended November 30,
1999, is being mailed herewith to each of the Company's stockholders of record
at the close of business January ____, 2000.
IX. PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the next annual
meeting of the Company must be received by the Company at its principal
executive offices by March 22, 2000 for inclusion in the Company's proxy
statement and form of proxy relating to that meeting and must comply with the
applicable requirements of the federal securities laws.
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<PAGE> 12
X. VOTE REQUIRED
Article III, Section 4 of the Company's bylaws provide that any or all
of the directors may be removed with or without cause by a vote of a majority
of all the shares outstanding and entitled to vote at a special meeting of
shareholders called for that purpose.
For other matters, including the election of directors, the affirmative
vote of a majority of the shares present at the meeting, either in person or by
valid proxy is required. In no event will a quorum consist of less than
one-third (1/3) of the shareholders entitled to vote at the meeting.
XI. OTHER MATTERS
The Board of Directors knows of no business which will be presented for
consideration at the Special Meeting other than that shown above. However, if
any such other business should come before the Special Meeting, it is the
intention of the persons named in the enclosed form of proxy to vote the
proxies with respect to any such business in accordance with their best
judgment.
XII. SOLICITATION INFORMATION
The entire expense of preparing, assembling, printing and mailing this
proxy statement and the accompanying form of proxy and the cost of soliciting
proxies shall be borne by the Company. Mr. Geller and Mr. Harris presently
estimate that the total expenditures relating to this solicitation will be
approximately $________. To date, the Company has paid $_____ with respect to
this proxy solicitation. In the event Mr. Geller or Mr. Harris are required to
pay any costs or expenses in connection with this solicitation, they intend to
seek reimbursement from the Company for such costs and expenses.
Proxies may be solicited by Mr. Geller or Mr. Harris, by mail,
telephone, telegram and personal solicitation. Mr. Geller or Mr. Harris will be
paid no compensation for this solicitation. Banks, brokerage houses and other
custodians, nominees and fiduciaries will be requested to forward proxy
solicitation materials to their customers and the Company will reimburse them
for their reasonable out-of-pocket expenses.
The Company may solicit proxies otherwise than by use of the mail, in
that certain officers and regular employees of the Company, without additional
compensation, may use their personal efforts, by telephone or otherwise, to
obtain Proxies. The Company will also request persons, firms, and corporations
holding shares in their names, or in the names of their nominees, which shares
are beneficially owned by others, to send this proxy material to and obtain
Proxies from such beneficial owners and will reimburse such holders for their
reasonable expenses in doing so.
The proxy may be revoked at any time before it is exercised by
submission of a later dated proxy, by written notice or such revocation to any
of the proxy holders named therein or to the Company or by voting in person at
the special meeting.
Each holder of shares of common stock at the record date shall be
entitled to one vote for every share of such stock standing in his name on the
record date. Shareholders may have their shares included in the votes at the
special meeting by appearing in person, through another party by an attorney in
fact or by proxy. Abstention votes shall be included in the determination of
quorum requirements and counted as no or against votes for each proposal. Broker
non-votes will not be included for purposes of determining the quorum or
approval requirements.
11
<PAGE> 13
The following table sets forth all purchases and sales of Common Stock
by Mr. Harris and Mr. Geller since January 1, 1998.
<TABLE>
<CAPTION>
MR. HARRIS
Number of Shares
Date Purchased (Sold)(1)
---- -------------------
<S> <C>
December, 1996 125,000
</TABLE>
<TABLE>
<CAPTION>
MR. GELLER
Number of Shares
Date Purchased (Sold)(2)
---- -------------------
<S> <C>
1993 1,450,000
</TABLE>
(1) Represents shares issued to Mr. Harris in connection with a Stipulated
Judgment dated December 10, 1996. These shares are held by tenants in the
entireties with his wife.
(2) Represents shares issued to Mr. Geller for past services.
ATTENTION: "STREET-NAME" HOLDERS
If your shares are held in the name of a brokerage firm or bank
nominee, only they can execute a proxy on your behalf. Please sign and return
the enclosed white proxy in the envelope that has been provided to you. To be
certain that your shares are voted, contact the person responsible for your
account and instruct him or her to execute a white proxy card on your behalf.
If you need assistance in voting your shares, please call our proxy
solicitor, The Carter Organization, Inc., at (___) ___-_____; in New York State
call collect (___) ___-____.
BY ORDER OF THE BOARD OF DIRECTORS
/s/
----------------------------------
Arnie Geller
/s/
----------------------------------
G. Michael Harris
New York, New York
January ___, 2000
12
<PAGE> 14
[Preliminary Copies]
RMS TITANIC, INC.
SPECIAL MEETING OF STOCKHOLDERS
REVOCABLE PROXY
_______________, 2000
The undersigned hereby appoints ARNIE GELLER and G. MICHAEL HARRIS and
each of them with full powers of substitution, to act as attorneys and proxies
for the undersigned to vote all shares of the Common Stock of RMS TITANIC,
INC., a Florida corporation (the "Corporation"), which the undersigned is
entitled to vote at the Special Meeting of Stockholders of the Corporation to
be held at ____________________________ Clearwater, Florida, at 10:00 a.m. on
February ___, 2000, and at any and all adjournments thereof as follows:
1. The removal of George H. Tulloch as a director.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. The removal of Allan C. Carlin as a director.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. The removal of Kurt Hothorn as a director.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. The removal of Paul-Henri Nargeolet as a director
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. The election of Arnie Geller as a director.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. The election of G. Michael Harris as a director.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
7. The election of Stephen Pennac as a director.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Mr. Harris and Mr. Geller as the directors of the Corporation recommend
a vote FOR each of the above items.
<PAGE> 15
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" EACH OF THE ABOVE PROPOSALS.
IF ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, THIS PROXY WILL BE
VOTED BY THOSE NAMED IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE
PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE
PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Should the undersigned be present and elect to vote at the Special
Meeting or at any adjournment thereof, and after notification of such
attendance at the Special Meeting of the Stockholder's decision to terminate
this proxy, then the power of said attorney and proxy shall be deemed
terminated and shall be of no further force and effect.
The undersigned acknowledges receipt from the Corporation, prior to the
execution of this Proxy, Notice of the Special Meeting and a Proxy Statement
dated January ___, 2000.
____________________________________ _____________________________________
Signature Signature
____________________________________ _____________________________________
Print Name Print Name
______________________________, 2000
Date of Proxy
Please sign exactly as your name appears on the envelope in which this Proxy
was mailed. When signing as attorney, executor, administrator, trustee or
guardian, please give your full title. Please remember to date your proxy.
- --------------------------------------------------------------------------------
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
- --------------------------------------------------------------------------------
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