SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934
Check the appropriate box
[ X ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14c-
5(d)(2)
[ ] Definitive Information Statement
CELEBRITY ENTERTAINMENT, INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii) or 14c-5(g)
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
No Exhibit Index
Total Number of Pages:
CELEBRITY ENTERTAINMENT, INC.
NOTICE OF ACTION TAKEN BY
WRITTEN CONSENT OF MAJORITY SHAREHOLDERS
OCTOBER 14, 1996
To the Shareholders of CELEBRITY ENTERTAINMENT, INC.:
The majority shareholders of Celebrity Entertainment, Inc., a Delaware
corporation (the "Company"), holding 7,680,313 votes out of a total of
13,816,605 votes, or 55.6%, with respect to common and preferred stock, which
vote together as a class, have submitted to the Company written consents of
shareholders requesting and consenting to the following:
1) The Company's effectuating a reverse stock split of the Company's
Common Stock as soon as practicable on the basis of one share for every fifty
shares outstanding, issuing one whole share in lieu of any fraction of a share
otherwise issuable, and maintaining the number of authorized shares at the
current levels;
2) The amendment of the Company's By-Laws so as to provide for staggered,
three-year terms of members of the Board of Directors; and
3) The election of James J. McNamara to serve as the director of the
first class, until the third annual meeting following the effective date of the
consents; the election of J. William Metzger to serve as the director of the
second class, until the second annual meeting following the effective date of
the consents; and the election of David J. Critchfield to serve as the director
of the third class, until the first annual meeting following the effective date
of the consents.
This Information Statement is being sent to all shareholders of the
Company to inform you that the above actions will be taken by the Company as
soon as possible, but no earlier than November 4, 1996.
By Order of the Board of Directors,
Palm Beach, Florida J. William Metzger, Secretary
October 14, 1996
CELEBRITY ENTERTAINMENT, INC.
214 Brazilian Avenue
Suite 400
Palm Beach, Florida 33480
Telephone (561) 659-3832
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY
This Information Statement is first being sent to stockholders on or about
October 14, 1996.
The Company's Annual Report on Form 10-KSB for fiscal year 1995 is being
furnished to all stockholders herewith.
ACTIONS
TO BE EFFECTUATED PURSUANT TO
WRITTEN CONSENT OF MAJORITY SHAREHOLDERS
On [ ], the majority stockholders of Celebrity Entertainment, Inc.
(the "Company") delivered to the Company signed, written consents directing that
the Company effectuate a reverse stock split of its shares of Common Stock on a
one-for-fifty basis; that the Company's By-Laws be amended so as to provide for
staggered, three-year terms of members of the Board; and that James J. McNamara
be elected Director for a three-year term, J. William Metzger be elected
Director for a two-year term, and David J. Critchfield be elected Director for a
one-year term.
On the date of delivery to the Company of the consents, the directors held
a special meeting resolving to take the directed actions as soon as practicable.
The record date for determination of whether the consents delivered represented
a majority of all stockholders entitled to vote on the matter was fixed at such
date of delivery of the consent and the directors' meeting, in accordance with
Delaware law. The consents so delivered to the Company represent stockholders
who together on the record date held a majority of votes with respect to the
Company's outstanding common and preferred stock. Thus the reverse split,
amendment to By-Laws and election of Directors have been duly authorized by
shareholder action and, except with respect to the election of Directors, by
Director action, and no further shareholder or board consents are necessary.
Pursuant to regulations of the Securities and Exchange Commission, the actions
may not be taken any earlier than 20 days after the date of mailing of this
Information Statement to the Company's shareholders. The actions will be taken
as soon as possible after such date.
Delaware law does not provide for any appraisal rights or rights of
dissenters with respect to any of the matters directed by the majority
shareholders' written consents.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
As of [ ], the number of shares of Common Stock outstanding at the
close of business was [ ] shares, each share being entitled to one vote.
The number of shares of Preferred Stock outstanding at the close of business on
the same date was 589,000 shares, each share being entitled to two-fifths of one
vote, which totals 235,600 votes.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of [ ], certain information
as to the Common Stock of the Company beneficially owned by (i) each person
known by the Company to own more than 5% of the Company's Common Stock,
(ii) each director of the Company, (iii) each of the named executive officers;
and (iv) all officers and directors as a group.
Name and Address of Common Percent of
Beneficial Owner Stock Common Stock Owned
James J. McNamara
214 Brazilian Avenue, Suite 400
Palm Beach, FL 33480 174,786(1) 1.3 %
J. William Metzger
214 Brazilian Avenue, Suite 400
Palm Beach, FL 33480 174,786(1) 1.3 %
David J. Critchfield
214 Brazilian Avenue, Suite 400
Palm Beach, FL 33480 0 0 %
All Officers and Directors
As A Group (3 persons) 349,572 2.5 %
(1) Includes 74,786 shares directly owned and 100,000 shares beneficially owned
pursuant to options currently exercisable.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation paid for
services rendered to the Company during the last three fiscal years by the
Company's Chief Executive Officer during the last fiscal year and the Company s
most highly compensated executive officers who served as such during fiscal 1995
whose total annual salary and bonus exceeded $100,000. The Company had one
Chief Executive Officer during fiscal 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
Long Term Compensation
Annual Compensation Awards Payouts
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Other Restricted All Other
Name and Annual Stock Options/ LTIP Compen-
Principal Year Salary Bonus Compensa- Awards SARs (#) Payments (#) sation
Position ($) (1) ($) tion ($) ($)
($) (1)
James J.
McNamara 1995 26,250(2) - 103,511(3) - 50,000(4)(5) - -
CEO 50,000(5)(6)
1994 3,342 - - - 250,000(7) - -
42,925(2)
1993 - - - - - - -
J. William
Metzger 1995 26,250(2) - 103,511(3) - 50,000(4)(5) - -
50,000(5)(6)
1994 3,342 - - - 125,000(7) - -
42,925(2)
Chief Executive 1993 - - - - - - -
Officer(1)
</TABLE>
(1) Mr. McNamara became Chief Executive Officer of the Company in June 1993.
His compensation for his services as Chief Executive Officer of the Company
commenced as of the closing of the Company's Public Offering in January 1994.
(2) Earned but not paid.
(3) This figure represents the fair market value of common stock received upon
cashless exercise of stock option for forgiveness of indebtedness, minus the
amount of indebtedness forgiven.
(4) Exercise price $0.50 per share. Currently outstanding, expiring 9/1/98.
(5) All options indicated were granted in consideration of Messrs. McNamara's
and Metzger's waiving earned but unpaid salary in the amount of $42,925 each for
1994 and $26,250 each for 1995.
(6) Exercise price $2.50 per share. Currently outstanding, expiring 9/1/98.
(7) Cancelled by agreement.
Stock Options
The following table sets forth certain information with respect to options
exercised during fiscal 1995 by the executive officers named in the Summary
Compensation Table, and with respect to unexercised options held by such
individuals at the end of fiscal 1995.
Option/SAR Grants in Last Fiscal Year
[S] [C] [C] [C] [C]
Individual Grants
% of
Total
Options/
Number of SARs
Securities Granted
Underlying to Exercise
Options/SARs Employees or Base
Granted in Fiscal Price Expiration
Name (#) Year ($/Share) Date
James J. 100,000 33.3% $0.50 9/98
McNamara 50,000 16.7% 2.50 9/98
J. William 100,000 33.3% $0.50 9/98
Metzger 50,000 16.7% 2.50 9/98
<TABLE>
Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Values
<S> <C> <C> <C> <C> <C> <C>
Name Shares Number of Securities Value of
Acquired On Value Underlying Unexercised in the
exercise (#) Realized Options/SAR's at FY- Money Options/SAR's
End (#) at FY-End ($)
Exercisable Unexercisable Exercisable Unexercisable
James J. 50,000 $102,500 100,000 0 $100,000 0
McNamara
J. William 50,000 $102,500 100,000 0 $100,000 0
Metzger
</TABLE>
Mr. McNamara and Mr. Metzger are each a party to an employment agreement
with the Company providing for their services until December 31, 1998 at a
current annual salary of $55,125 each with a 5% annual escalation.
Directors are not compensated for their services as members of the Board
of Directors of the Company.
CORPORATE ACTIONS TO BE TAKEN PURSUANT TO SHAREHOLDER CONSENT
ITEM 1: REVERSE SPLIT
The first action to be effectuated pursuant to the majority shareholders'
written consents are a reverse split of the Company's common stock on a one-for-
fifty basis. When the reverse split is effectuated, every fifty outstanding
common shares will automatically be converted into one outstanding share. One
whole share will be issued in lieu of any fractional share otherwise issuable.
The trading price of the Company's shares will be adjusted by the Nasdaq to
reflect the reverse split on the date of the transaction. The reverse stock
split will be effectuated by filing with the Secretary of State of Delaware the
Certificate of Amendment in the form attached to this Statement as Exhibit A.
Replacement certificates evidencing the split will be issued on an as-traded
basis; i.e., no transmittal letters or other instructions will be sent to
shareholders.
The reverse stock split is anticipated to cause the trading price of the
Company's shares to meet Nasdaq requirements, which the Company's shares
currently do not meet. The common shares issuable in the reverse split will be
identical to the shares currently outstanding. Shareholder rights will not be
affected other than with respect to the actual number of shares held and the
trading price per share.
The Company is currently authorized to issue 25,000,000 shares of Common
Stock and 2,000,000 shares of Preferred Stock. As of the Record Date there were
[ ] shares of the Company's Common Stock outstanding and 589,000 shares of
Class A 8% Convertible Preferred Stock outstanding. The Company's Certificate
of Incorporation will not be amended with respect to the number of authorized
shares of Common Stock or Preferred Stock. After the reverse split, the number
and percentage of the shares of the Company's Common Stock that are authorized
but unissued will increase from [ ] or [ % ] of the authorized shares to [
] or [ %} of the authorized shares. This effectively constitutes an increase
in the number and proportion of shares of the Company's Common Stock that are
available for future issuance without further stockholder approval.
The reverse split is anticipated to cause the Company's Common Stock to
meet the minimum bid price required for continued listing on the Nasdaq. If the
Company's Common Stock is not listed on the Nasdaq, the Company's Common Stock
would be subject to certain rules imposing additional sales practice
requirements on broker-dealers. Because of such regulations, brokerage firms
often adopt internal policies or practices which discourage brokers from
recommending lower-priced stocks because of the burden of compliance with such
regulations and the general presumption that such stocks are speculative.
Management believes that the reverse split will result in a price level for the
Company's Common Stock which will allow continued quotation of the Common Stock
on the Nasdaq and reduced chances of the Common Stock's being subject to the
above-described regulations, policies or practices. However, there can be no
assurance that the reverse stock split will enable the Common Stock to continue
to be listed on the Nasdaq or that any increase in the per share market value
will occur or be sustained for any period of time.
ITEM 2: AMENDMENT TO THE COMPANY'S BY-LAWS
The second item to be effectuated pursuant to the majority shareholders'
written consents is an amendment to the Company's By-Laws so as to provide for
staggered three-year terms of the members of the Board. The text of the
resolution is set forth on Exhibit B hereto. The effect of the amendment, in
conjunction with the election of directors set forth below, is to provide that
Mr. McNamara will serve as director until the third Annual Meeting after the
consent; Mr. Metzger will serve as director until the second Annual Meeting
after the consent; and Mr. Critchfield will serve as director until the first
Annual Meeting after the consent. Directors elected at any Annual Meeting
subsequent to the consent will each be elected for a three-year term. Vacancies
which occur during the year may be filled by the Board of Directors to serve for
the remainder of the full term.
ITEM 3: ELECTION OF DIRECTORS
The third item to be effectuated pursuant to the majority shareholders'
written consents is the election of directors. Mr. McNamara has been elected
director for a three-year term; Mr. Metzger for a two-year term; and Mr.
Critchfield for a one-year term.
James J. McNamara, age 47, has been the President, Chief Executive Officer
and a director of the Company since June 1993 and founded Production Services
International, Inc. ("PSI") in 1991. During 1993-1994 Mr. McNamara created and
executively produced 61 half-hour episodes of "The NEWZ" television series for
PSI, which was acquired by the Company in 1993. In 1986, Mr. McNamara formed
Entertainment, Inc., a Florida corporation which became the managing general
partner of Premiere, Ltd., a limited partnership formed to develop motion
pictures and television projects. Premiere, Ltd. developed a portfolio of
projects including "Super Force," a half-hour action-adventure television series
produced in association with Viacom Enterprises, which also distributed the
series worldwide in first-run syndication. From 1988 until 1991, Mr. McNamara
created and executively produced 48 episodes of "Super-Force." Prior to that
time he developed various motion picture properties while maintaining offices at
Twentieth Century-Fox in Los Angeles. Mr. McNamara has been involved in the
music and entertainment business since 1971. Mr. McNamara is Chairman of DeNovo
Corporation, an Ontario, Canada corporation quoted on the Nasdaq Smallcap market
which is engaged in the publishing and distribution of several lifestyle and
entertainment periodicals. Mr. McNamara holds no directorships in any other
companies with a class of securities registered on a national exchange or which
are required to file annual, quarterly or other periodic reports with the
Commission.
J. William Metzger, age 47, has been Executive Vice President, Chief
Financial Officer, Controller, Secretary, Treasurer and a director of the
Company since June 1993 at which time the Company acquired PSI. Mr. Metzger has
worked with Mr. McNamara since 1981 as a development executive in the offices at
Twentieth Century- Fox and as Executive Vice-President of Entertainment, Inc.
and PSI and as a control person of Premiere. Mr. Metzger holds no directorships
in any other company with a class of securities registered on a national
exchange or which is required to file annual, quarterly, or other periodic
reports with the Commission. During the past five years, Mr. Metzger has
principally been involved in the production of television projects and the
management of the Company.
David J. Critchfield, age 44, has been a director of the Company since
May, 1995. He has been the Secretary and Treasurer of TeleMatrix, Inc., a
privately-held telephone manufacturer and retailer based in Coral Springs,
Florida, since its inception in November, 1992. From 1990 until 1992 he served
as Vice President and Secretary/Treasurer of TeleConcepts, Inc., a publicly
traded company involved in the telecommunications industry. From 1985 through
1990, Mr. Critchfield was Treasurer and Controller of Petro 85, Inc., an oil and
gas drilling and production company located in Kansas.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than-10% shareholders are required by the Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) forms that they file.
As of the date of this filing, the Company had not received required
[number] Forms 4 or 5 from Messrs. McNamara and Metzger.
EXHIBIT A TO INFORMATION STATEMENT
CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF
CELEBRITY ENTERTAINMENT, INC.
Celebrity Entertainment, Inc., a Delaware corporation, hereby certifies
that the following amendment to its Certificate of Incorporation has been duly
adopted in accordance with the provisions of section 242 of the General
Corporation Law of the State of Delaware by the directors and shareholders of
the corporation.
ARTICLE FOURTH of the Certificate of Incorporation is hereby amended in
its entirety to read as follows:
FOURTH. The total number of shares of stock which the corporation
shall have authority to issue is 27,000,000 shares, which shall be
divided into classes as follows: (i) 25,000,000 shares of common
stock, par value $.0001 per share (the "Common Stock"), and
(ii) 2,000,000 shares of Preferred Stock, par value $.01 per share
(the "Preferred Stock").
The Preferred Stock shall have such other designations,
preferences, and such relative, participating, optional or other
special rights as may be fixed by the corporation's Board of
Directors, with such qualifications, limitations or restrictions of
such preferences or rights as shall be stated and expressed in this
paragraph Fourth or in the resolution or resolutions as may be
adopted from time to time by the Board of Directors in accordance
with the laws of the State of Delaware.
Every fifty shares of Common Stock, $.0001 par value per
share, of the corporation outstanding or held in treasury
immediately prior to the effective date of this Amendment to Article
Fourth of the corporation's Certificate of Incorporation (the "Pre-
Reverse Common Stock") shall, without any action on the part of the
respective holders thereof, be reclassified as and changed into one
share of the corporation's common stock as it is constituted
immediately after the effective date of this Amendment (the "Post-
Reverse Common Stock"). No fractional shares of Post-Reverse Common
Stock shall be issued upon such reclassification and conversion, and
the number of shares of Post-Reverse Common Stock to be issued to
each holder of record shall be rounded up to the nearest whole
share. The capital of the corporation attributable to the shares of
Post-Reverse Common Stock into which the Pre-Reverse Common Stock
shall be reclassified and changed in the aggregate shall be the same
as the capital of the corporation attributable to the shares of Pre-
Reverse Common Stock so reclassified and changed. Each stock
certificate that, immediately prior to the time that this Amendment
becomes effective, represents shares of Pre-Reverse Common Stock
shall, from and after the time that this Amendment becomes
effective, automatically and without the necessity of presenting the
same for exchange, represent the same number of shares of Post-
Reverse Common Stock as shall be determined hereby.
This Amendment shall become effective on [effective date].
IN WITNESS WHEREOF, the undersigned, the duly elected and incumbent
Executive Vice President of Celebrity Entertainment, Inc., has set his hand this
_____ day of ______, 1996.
J. William Metzger, Exec. Vice
President
EXHIBIT B TO INFORMATION STATEMENT
AMENDMENT TO THE COMPANY'S BY-LAWS
The Company's By-Laws shall be amended as follows.
Section 2.1 of Article II of the Company's By-Laws shall be amended in its
entirety so as to read as follows:
Section 2.1. Number and Term of Office. The business and property
of the corporation shall be managed and controlled by the board of
directors. The number of directors which shall constitute the whole
board shall be not fewer than three (two if there are two
stockholders and one if there is one stockholder) nor more than
nine. Within the limits above specified, the number of directors
shall be determined by the board of directors pursuant to a
resolution adopted by a majority of the directors then in office.
The directors shall be divided into three classes. A director's
term of office (subject to the provisions, if any, of the
Certificate of Incorporation and to the provisions of the Delaware
Corporation Law) shall be from the date on which he is elected or
appointed until the third annual meeting following such election or
appointment; provided, however, that on the first date on which
directors are elected pursuant hereto, the director(s) in the first
class, who shall be specified by name, shall be elected to serve
until the third annual meeting after such election; the director(s)
in the second class, who shall be specified by name, shall be
elected to serve until the second annual meeting after such
election; and the director(s) in the third class, who shall be
specified by name, shall be elected to serve until the first annual
meeting after such election. Each director shall hold office for
the term for which elected and until his or her successor shall be
elected and shall qualify. Directors need not be stockholders.
The second sentence of Section 2.2 of Article II of the Company's By-Laws shall
be amended so as to read as follows:
All directors elected to fill vacancies shall hold office for the
entire remainder of the term applicable to such vacant seat(s).
