SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
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
[ ] Definitive information statement by Rule 14c-6(d)(2))
AMERICAN GAMING & ENTERTAINMENT, LTD.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-6(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 (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:
--------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------------
(3) Filing Party:
--------------------------------------------------------------------------------
(4) Date Filed:
--------------------------------------------------------------------------------
<PAGE>
AMERICAN GAMING & ENTERTAINMENT, LTD.
51 Beech Road
Glen Rock, New Jersey 07452
September 1, 2000
Dear Stockholder:
Enclosed is an Information Statement regarding:
1) The election of Frank Fisbeck and Douglas E. May as directors of the
Company (the "Elections"), which persons, together with Mr. David McLane, a
current director of the Company, will constitute a majority of the
directors of the Company.
2) A proposed 1 for 6 reverse stock split (the "Reverse Stock Split"). As a
result of the Reverse Stock Split, each share of the Company's current
common stock, $0.01 par value would be reclassified into 0.1667 of a share
of new common stock, $0.01 par value; and
3) The proposed amendment and restatement of the Company's Certificate of
Incorporation to reflect the Reverse Stock Split and to provide for (a)
changing the name of the Company to "WOW Entertainment, Inc.", (b)
decreasing the number of authorized shares of capital stock to one hundred
fifty one million (151,000,000), consisting of one hundred fifty million
(150,000,000) shares of common stock and one million (1,000,000) shares of
preferred stock, (c) eliminating current Article TENTH, which refers to
gaming license issues, and (d) eliminating the Certificates of Designation
of Series A Preferred Stock, Series C Cumulative Preferred Stock, Series D
Cumulative Preferred Stock and Series E Preferred Stock (collectively with
the Reverse Stock Split, the "Proposals").
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The Company expects the Elections will become effective no more than ten (10)
days after the mailing of the enclosed Information Statement to each stockholder
who would be entitled to vote at a meeting for election of directors, which
effective date is anticipated to be on or about September 22, 2000.
Under Section 228 of the General Corporation Law of the State of Delaware,
action by stockholders to approve the Proposals may be taken without a meeting
by written consent of the holders of the requisite percentage of the shares of
capital stock of the Company entitled to vote thereon. Messrs. David B. McLane,
John F. Fisbeck and Carter M. Fortune (collectively, the "Control Group") have
each executed a written consent approving the Proposals as of September 1, 2000
(the "Consent Date"). The Control Group owns 343,561,540 shares of Common Stock
(with one vote per share) representing approximately 91.7% of the total voting
power of the Company as of the Consent Date.
The Company expects the Proposals will become effective twenty (20) days after
the mailing of the enclosed Information Statement and upon the filing of a
Restated Certificate of Incorporation with the State of Delaware, each of which
is anticipated to be on or about October 2, 2000.
The Elections and the Proposals are more fully described in the accompanying
Information Statement and in the exhibits thereto, all of which you are urged to
read carefully.
Sincerely,
David B. McLane
President and Chief Executive Officer
<PAGE>
INFORMATION STATEMENT
AMERICAN GAMING & ENTERTAINMENT, LTD.
51 Beech Road
Glen Rock, New Jersey 07452
Introduction
This Information Statement is being furnished by American Gaming &
Entertainment, Ltd., a Delaware corporation (the "Company"), to its stockholders
in connection with:
1) The election of Frank Fisbeck and Douglas E. May as directors of the
Company (the "Elections"), which persons, together with Mr. David McLane, a
current director of the Company, will constitute a majority of the
directors of the Company.
2) A proposed 1 for 6 reverse stock split (the "Reverse Stock Split"). As a
result of the Reverse Stock Split, each share of the Company's current
common stock, $0.01 par value (the "Prior Common Stock") would be
reclassified into 0.1667 of a share of new common stock, $0.01 par value
("Common Stock"); and
3) The proposed amendment and restatement of the Company's Certificate of
Incorporation to reflect the Reverse Stock Split and to provide for (a)
changing the name of the Company to "WOW Entertainment, Inc.", (b)
decreasing the number of authorized shares of capital stock to one hundred
fifty one million (151,000,000), consisting of one hundred fifty million
(150,000,000) shares of common stock and one million (1,000,000) shares of
preferred stock, (c) eliminating current Article TENTH, which refers to
gaming license issues, and (d) eliminating the Certificates of Designation
of Series A Preferred Stock, Series C Cumulative Preferred Stock, Series D
Cumulative Preferred Stock and Series E Preferred Stock (collectively, the
"Certificate Amendments", collectively with the Reverse Stock Split, the
"Proposals").
This Information Statement is first being sent or given to the Company's
stockholders on or about September 13, 2000.
History and Expected Effective Date of Elections
On September 1, 2000, Messrs. David B. McLane, John F. Fisbeck and Carter M.
Fortune (collectively, the "Control Group") collectively purchased 367,911,380
shares of Prior Common Stock pursuant to two Stock Purchase Agreements dated
July 28, 2000. One agreement was with Richard C. Breeden, who is the Bankruptcy
Trustee for the
<PAGE>
Bennett Funding Group, Inc. et al. (the "Estate") in a bankruptcy proceeding
pending in the United States Bankruptcy Court for the Northern District of New
York. This agreement provided for the purchase of 362,088,361 shares (the
"Estate Stock") of Common Stock from the Estate for $98,200 in cash. The Estate
Stock included 360,588,361 shares of Prior Common Stock which were converted
from the Company's Series C Cumulative Preferred Stock, Series D Cumulative
Preferred Stock and Series E Preferred Stock owned by the Estate pursuant to a
notice of conversion delivered to the Company dated as of July 21, 2000. The
other agreement was with Shamrock Holdings Group, Inc. ("Shamrock") and provided
for the purchase of 5,823,019 shares of Prior Common Stock (of which 1,399,565
shares were converted from the Company's Series A Preferred Stock owned by
Shamrock pursuant to a notice of conversion delivered to the Company dated as of
July 21, 2000) for $1,800 in cash.
Of the 367,911,300 shares purchased, 343,561,540 shares were purchased by the
Control Group. The right to purchase the remainder of the shares was assigned to
family members of the Control Group and employees and consultants of WOW
Entertainment, Inc., a company owned by the Control Group (which company will
become a wholly-owned subsidiary of the Company. The source of funds for all
purchases was from personal funds. Collectively, the stock purchased from the
Estate and Shamrock represent 98.2% of the outstanding Prior Common Stock of the
Company.
The Buyers have also agreed to cause AGEL to pay J. Douglas Wellington, the
Company's President and CEO, from post-closing funds to be contributed to AGEL
by the Buyers, a severance payment in the amount of $62,500 (which represents
one-half of the severance payment to be received under his current employment
agreement) and a car and rent allowance in the amount of $1,500. The Stock
Purchase Agreements also provided that immediately following closing of the
stock sale, the Company's Board of Directors will be expanded to not less than
three members (as determined by the Buyers) and the Board of Directors will fill
the vacancies with individuals designated by the Buyers. As part of the Stock
Purchase Agreements, the Company agreed to appoint a Board of Directors of at
least three members designated by the Buyers upon the closing of such agreements
and provided certain business and financial information about the Company. Mr.
McLane has already been elected to the Board. The Buyers have additionally
designated Frank Fisbeck and Douglas E. May to be elected to the Board. Mr. J.
Douglas Wellington is anticipated to resign from the Board shortly after the
effective date of the Elections.
Based on information supplied by the Control Group on a Schedule 13D dated July
28, 2000 , shortly after the closing of the stock sale, the Control Group plans
to engage in a transaction by which a company owned by the Control Group, WOW
Entertainment, Inc. ("WOW"), will become a wholly owned subsidiary of the
Company. The Control Group intend to change the name of the subsidiary to WOW -
Women of Wrestling, Inc. The Control Group is not anticipated to receive any
additional shares of the Company in connection with such transaction. Based in
Indianapolis, Indiana, WOW develops and produces sports entertainment
programming. WOW's first run syndicated television series, WOW-Women of
Wrestling, is scheduled to premiere in the fall of 2000.
The Company expects the Elections will become effective no more than ten (10)
days after the mailing this Information Statement to each stockholder who would
be entitled to vote at a meeting for election of directors, which effective date
is anticipated to be on or about September 22, 2000. The Company's only class of
voting securities is its Common Stock. As of the date of this Information
Statement, there were 374,549,676 shares of Common Stock. Each share of Common
Stock would be entitled to one vote at a meeting for election of directors. No
vote of any holders of the Common Stock is required in connection with the
Elections.
<PAGE>
History and Expected Effective Date of Proposals
On September 1, 2000, the Board of Directors of the Company unanimously adopted
resolutions declaring the advisability of the Proposals and directing that
written consents approving the Proposals be obtained from the Control Group, as
the largest stockholders of the Company, and that this Information Statement be
mailed thereafter to the other stockholders of the Company. Each of the members
of the Control Group executed a written consent approving the Proposals on
September 1, 2000 (the "Consent Date").
Under Delaware law, stockholders of the Company are not entitled to dissenter's
rights of appraisal in connection with the Proposals. The Company expects the
Proposals will become effective twenty (20) days after the mailing of this
Information Statement and upon the filing of a Restated Certificate of
Incorporation with the State of Delaware, each of which is anticipated to be on
or about October 2, 2000.
Approval of the Proposals by the Company's largest stockholders
The Company's only class of voting securities is its Common Stock. As of the
Consent Date, there were 374,549,676 shares of Common Stock outstanding and
entitled to vote with respect to the Proposals. Each share of Common Stock is
entitled to one vote with respect to the Proposals. Approval of the Proposals
requires 187,274,839 votes. As discussed below, no vote of any holders of the
Common Stock, other than the Control Group, is required in connection with the
Proposals.
Under Section 228 of the General Corporation Law of the State of Delaware (the
"DGCL"), any action required by law or permitted to be taken at an annual or
special meeting of stockholders of a Delaware corporation may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, is signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted. Prompt notice of such action by written consent
must be given to those stockholders who have not consented in writing.
Pursuant to Section 271 of the DGCL, the Proposals must be approved by a
majority of the outstanding stock entitled to vote thereon, that is, a majority
of the total voting power of the Company's outstanding voting securities.
The members of the Control Group, the record owners as of the Consent Date of an
aggregate of 343,561,540 shares of Common Stock, representing 343,561,540 votes
or approximately 91.7% of the total voting power of the Company's voting
securities, each executed a written consent, dated as of the Consent Date,
approving the Proposals. Therefore, no vote or further action of the Company's
stockholders is required in order to approve the Proposals.
<PAGE>
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The Company is required, in accordance with Rule 14c-2 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to mail this Information
Statement to stockholders of the Company no later than 20 days prior to the date
the Proposals will become effective. The Company anticipates that the Proposals
will become effective twenty (20) days after the mailing of this Information
Statement and upon the filing of a Restated Certificate of Incorporation with
the State of Delaware, each of which is anticipated to be on or about October 2,
2000. This Information Statement shall also constitute notice of the approval of
the Proposals by less than unanimous written consent to the stockholders who
have not so consented thereto as required by Section 228 of the DGCL.
The Company
The Company, with principal executive offices at 51 Beech Road, Glen Rock, New
Jersey 07452, and a telephone number of (201) 447-5360, owned equity interests
in various properties that, at the respective times of purchase, the Company
anticipated could be utilized in casino gaming projects. The Company is no
longer actively seeking to develop gaming projects and is currently seeking
other entertainment projects.
Summary Description of the Proposals.
o Each issued and outstanding share of Prior Common Stock be reclassified
into 0.1667 of a share of Common Stock.
o In lieu of issuing any fractional shares of Common Stock resulting from the
Reverse Stock Split, the Company shall pay an average market price for such
fractional shares.
o The name of the Company will be changed to "WOW Entertainment, Inc."
o The number of shares of capital stock will be decreased to one hundred
fifty one million (151,000,000), consisting of one hundred fifty million
(150,000,000) shares of common stock and one million (1,000,000) shares of
preferred stock.
o Current Article TENTH of the Company's Certificate of Incorporation, which
refers to gaming license issues, will be eliminated.
o The Certificates of Designation of Series A Preferred Stock, Series C
Cumulative Preferred Stock, Series D Cumulative Preferred Stock and Series
E Preferred Stock will be eliminated from the Company's Certificate of
Incorporation.
o A copy of the proposed Restated Certificate of Incorporation for the
Company, reflecting the Proposals, is attached hereto as Exhibit A.
Reasons for the Proposals. The Board of Directors of the Company believes that
the Proposals are in the best interests of the Company's stockholders for the
reasons set forth below.
<PAGE>
The Reverse Stock Split. As of the Consent Date, there were 374,549,676
shares of Prior Common Stock outstanding. For several years, the per share
market price of the Company's Prior Common Stock has been well below $1.00
per share. The Company's Common Stock currently trades on the OTC Bulletin
Board. The primary purpose of the Reverse Stock Split would be, management
hopes, to have the bid price of the Common Stock exceed $4.00 per share,
the minimum bid price for initial inclusion on the NASDAQ Small Cap Market
and thereby qualify the Common Stock for listing on that exchange. The
Company's per share market price would need to remain at or above $1.00 for
continued listing. (The initial listing requirements are more stringent
than the continued listing requirements.) There can be no assurance,
however, that the bid price of the Common Stock would exceed such amount.
In addition to the minimum bid price, there are other requirements for
listing on the NASDAQ Small Cap Market, many but not all of which the
Company believes that it does meet. In particular, the Company must comply
with certain corporate governance requirements, including the distribution
of annual and interim reports, electing a minimum of two independent
directors, establishing an audit committee, a majority of which are
independent directors, holding an annual shareholder meeting and
maintaining certain quorum requirements. The Company intends to adopt such
changes in its corporate organization in order to comply with these
corporate governance provisions.
Additionally, the Reverse Stock Split would, management hopes, have a
positive effect on the marketability of the Common Stock, since a number of
factors tend to discourage the trading of low-priced stocks, and possibly
encourage interest in the Common Stock and therefore promote greater
liquidity for the Company's stockholders.
Additionally, the Company believes that NASDAQ listing of the Common Stock
on the Small Cap Market would have a number of beneficial effects for the
Company's stockholders. The Company believes that listing will result in
current market price information for the Common Stock being more readily
available and news coverage of the Company being more widespread. The
Company also believes that listing may have the effect of increasing
investor interest in the Common Stock, which may have a beneficial effect
on the trading market and prices for the Common Stock as well as the
Company's ability to issue additional securities or to secure additional
financing. Because of these anticipated positive effects on the trading
market of the Common Stock and the gain of wider trading markets, the
Company believes that volatility of the Common Stock may be decreased as a
result of listing.
There can be no assurances that above described benefits will be obtained
for the Company's stockholders.
In addition, stocks with low per share prices are subject to additional
federal and state regulatory requirements. Because the market price of the
Prior Common Stock is less than
<PAGE>
$5 per share, the Prior Common Stock cannot be used as collateral for
margin loans. In addition, because the Prior Common Stock is priced at less
than $5 per share, it may be deemed a "penny stock" under federal
securities laws, and additional regulatory restrictions may therefore
apply. Although the Reverse Stock Split is expected to raise the per share
market price of the Common Stock, there is no assurance that the Company
will meet all the requirements for exemption from the definition of a
"penny stock" in the future.
The Company intends to seek listing of the Common Stock on the NASDAQ
system as soon as practicable upon the effective date the Reverse Split and
once it has complied with other requirements for the NASDAQ Small Cap
Market. However, there can be no assurance that the Company's application
will be successful. In addition, once the Company meets the initial listing
criteria for the NASDAQ Small Cap Market and its application is granted,
there can be no assurance that the Company will continue to meet NASDAQ's
continued listing criteria in the future (whether as a result of failure to
meet the minimum bid price requirement or other requirements imposed by
NASDAQ).
For the foregoing reasons, the Board of Directors has determined that a
recapitalization through the Reverse Stock Split would be in the best
interests of the Company and its stockholders.
The Certificate Amendments.
1) Changing the name of the Company to "WOW Entertainment, Inc." would better
reflect the business of the Company,
2) As a result of the conversion of all previously issued preferred stock and
the Reverse Stock Split, the Company no longer needs three billion one
million (3,001,000,000) authorized shares. The Company therefore proposes
decreasing the number of authorized shares of capital stock to one hundred
fifty one million (151,000,000), consisting of one hundred fifty million
(150,000,000) shares of common stock and one million (1,000,000) shares of
preferred stock.
3) The current Article TENTH of the Certificate of Incorporation refers to
gaming license issues. The Company is no longer actively seeking to develop
gaming projects, and therefore this provision can be eliminated.
4) The Company proposes eliminating the Certificates of Designation of Series
A Preferred Stock, Series C Cumulative Preferred Stock, Series D Cumulative
Preferred Stock and Series E Preferred Stock. No shares of such preferred
stock are currently outstanding and none will be issued.
Principal effects of the Proposals.
General Effects. The principal effect of the Reverse Stock Split would be
to decrease the number of outstanding shares of the Company's Common Stock.
Specifically, the 374,549,679 shares of Prior Common Stock issued and
outstanding on the Consent Date would, as a result of the Reverse Stock
Split, be converted into approximately 62,424,947 shares of Common Stock
(with the precise number
<PAGE>
depending upon the extent of fractional shares resulting from the Reverse
Stock Split, which will be converted to cash based upon the average of the
highest bid and lowest asked prices of Common Stock on the day before the
effective date of the Reverse Stock Split).
Effect on Securities. The Prior Common Stock is currently registered under
section 12(g) of the Exchange Act, and as a result, the Company is subject
to the periodic reporting and other requirements of the Exchange Act. The
Proposals will not affect the registration of the Common Stock under the
Exchange Act. As stated above, the Company hopes that, as a result of the
Reverse Stock Split, the bid price of the Common Stock will exceed $4.00
per share, the minimum bid price for initial inclusion on the NASDAQ Small
Cap Market and thereby qualify the Common Stock for listing on that
exchange. There can be no assurance, however, that the minimum bid price
will be achieved or maintained. The Company does not anticipate that the
Certificate Amendments will affect the price of the Common Stock.
Changes in Stockholders' Equity. The Proposals are expected to reduce the
Company's stated capital, which consists of the par value per share of
Common Stock multiplied by the number of such shares outstanding, from
approximately $374,550,000 to approximately $62,425,000 because the par
value will remain at $0.01 per share. The difference of approximately
$312,125,000 is expected to increase additional paid-in capital.
Disadvantages. The Company believes that, as a result of the Reverse Stock
Split, certain stockholders may incur increased expenses in selling odd-lot
shares of the Company's Common Stock.
No Fractional Shares. No fractional shares of Common Stock will be issued
as a result of the Reverse Stock Split, no certificates for any fractional
shares will be issued, and fractional share interests will not entitle the
holder thereof to exercise any right of a stockholder with respect thereto.
In lieu of such fractional shares, any holder of Prior Common Stock (after
aggregating all fractional shares of Common Stock issuable to such holder)
will, upon surrender of such holder's stock certificate(s) representing
Prior Common Stock to American Stock Transfer & Trust Company (the
"Exchange Agent"), be paid in cash an amount equal to the average of the
daily closing bid price for the Prior Common Stock quoted on the OTC
Bulletin Board for each of the 10 business days immediately preceding the
effective date of the Reverse Stock Split on which such quotes are
available, multiplied by the fraction represented by such fractional share
of Common Stock (any fraction of a cent to be adjusted upward to the
nearest whole cent).
Procedures for Exchange of Certificates. As soon as practicable after the
effective date of the Reverse Stock Split, the Exchange Agent will mail to
the registered holders of Common Stock (i) a Letter of Transmittal, and
(ii) instructions for the use of the Letter of Transmittal in effecting the
surrender of the Prior Common Stock certificates for certificates
representing shares of Common Stock. Upon surrender of a
<PAGE>
certificate to the Exchange Agent, together with a duly executed Letter of
Transmittal and such other documents as may reasonably be required by the
Exchange Agent or the Company, the holder of such certificate shall be
entitled to receive in exchange therefor a certificate representing the
whole number of shares of Common Stock that such holder has the right to
receive.
If any stock certificate has been lost, stolen or destroyed, the Company
may require the owner of such lost, stolen or destroyed certificate to
provide an appropriate affidavit and to deliver a bond as indemnity against
any claim that may be made against the Exchange Agent or the Company with
respect to such certificate.
STOCKHOLDERS SHOULD NOT SURRENDER THEIR STOCK CERTIFICATES FOR EXCHANGE
UNTIL THEY RECEIVE A LETTER OF TRANSMITTAL FROM THE EXCHANGE AGENT.
Federal Income Tax Consequences. The following summary of the federal
income tax consequences of the Reverse Stock Split is based on current law,
including the Internal Revenue Code of 1986, as amended, and is for general
information only. The tax treatment for any stockholder may vary depending
upon the particular facts and circumstances of such stockholder. Certain
stockholders, including insurance companies, tax-exempt organizations,
financial institutions, broker-dealers, non-resident aliens, foreign
corporations and persons who do not hold Common Stock of the Company as a
capital asset, may be subject to special rules not discussed below.
ACCORDINGLY, EACH STOCKHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER OF THE REVERSE
STOCK SPLIT, INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL
OR FOREIGN INCOME TAXES AND OTHER LAWS.
The receipt of whole shares of Common Stock (excluding fractional shares)
in the Reverse Stock Split should be non-taxable for federal income tax
purposes. Consequently, a stockholder receiving new shares of Common Stock
will not recognize either gain or loss, or any other type of income, with
respect to whole shares of Common Stock received as a result of the Reverse
Stock Split. In addition, the tax basis of such stockholder's shares of
Prior Common Stock will carry over as the tax basis of the stockholder's
Common Stock. The holding period of the new shares of Common Stock should
also include the stockholder's holding period of the Common Stock prior to
the Reverse Stock Split, provided that such Prior Common Stock was held by
the stockholder as a capital asset on the effective date of the Reverse
Stock Split.
Any stockholder who receives cash in lieu of a fractional share of Common
Stock pursuant to the Reverse Stock Split will recognize gain or loss equal
to the difference between the amount of cash received and the portion of
the aggregate tax basis in his or her shares of Prior Common Stock
allocable to such fractional share of Common Stock. If the shares of Common
Stock were held as a capital asset on the effective
<PAGE>
date of the Reverse Stock Split, then the stockholder's gain or loss will
be a capital gain or loss. Such capital gain or loss will be a long-term
capital gain or loss if the stockholder's holding period for the shares of
Common Stock is longer than twelve months and a short-term capital gain or
loss if the stockholder's holding period is twelve months or less.
Based on certain exceptions contained in regulations issued by the Internal
Revenue Service, the Company does not believe that it or its stockholders
would be subject to backup withholding or informational reporting with
respect to cash distributed in lieu of fractional shares of Common Stock.
Regulatory requirements. Other than the filing and mailing of this Information
Statement, there are no federal or state regulatory requirements that must be
complied with or approval that must be obtained in connection with the
Proposals.
Abandonment of Proposals by the Board. At any time prior to the effective date
of the Proposals, the Board of Directors of the Company is authorized to abandon
any of the Proposals without a further vote or consent of the stockholders of
the Company if, for any reason, the Board of Directors deems it advisable to so
abandon such Proposal.
Appraisal rights. Under Delaware law, the stockholders of the Company are not
entitled to dissenters' rights of appraisal in connection with the Proposals.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of the Consent Date with respect
to the only persons or groups known to the Company who may be deemed to own
beneficially more than 5% of the Company's voting securities (i.e. Common Stock
or Series A Preferred Stock). Unless otherwise noted, each holder has sole
voting and investment power with respect to the shares of the listed securities.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
Title of Class Name and Address of Amount and Nature of Percent of Class
Beneficial Owner Beneficial Ownership (1)(2)
<S> <C> <C> <C>
Common Stock David B. McLane 343,561,540 (3) 91.7%
Bank One Tower
111 Monument Circle
Suite 4600
Indianapolis, IN 46204
Common Stock John F. Fisbeck 343,561,540 (3) 91.7%
Bank One Tower
111 Monument Circle
Suite 4600
Indianapolis, IN 46204
<PAGE>
Common Stock Carter M. Fortune 343,561,540 (3) 91.7%
Bank One Tower
111 Monument Circle
Suite 4600
Indianapolis, IN 46204
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Based on information supplied by persons listed or as reported on the most
recent Schedule 13D filed by any such persons. As used in this table,
"beneficial ownership" of securities means the sole or shared power to
vote, or to direct the voting of, such securities, or the sole or shared
investment power with respect to such securities, including the power to
dispose of, or to direct the disposition of, such securities. In addition,
for purposes of this table, a person is deemed to have "beneficial
ownership" of any security that such person had the right to acquire within
60 days after the Consent Date.
(2) Shares of Prior Common Stock.
(3) As the Control Group, Messrs. McLane, John F. Fisbeck and Fortune
beneficially own 343,561,540 shares of Common Stock. Individually, each
person has sole dispositive and voting power over the following shares of
Common Stock: McLane, 113,445,513, John F. Fisbeck, 114,058,01 and Fortune,
116,058,014. Members of the Control Group assigned the right to purchase
certain additional shares of the Company pursuant to the Stock Purchase
Agreements to family members of the Control Group and employees and
consultants of WOW Entertainment, Inc., a company owned by the Control
Group (which company will become a wholly-owned subsidiary of the Company;
however, the members of the Control Group did not retain sole or shared
voting or dispositive power over such shares.
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
DIRECTOR
NAME AGE SINCE POSITION
<S> <C> <C> <C>
J. Douglas Wellington 47 1996 General Counsel, Secretary, Director
David B. McLane 40 2000 PresidentDirector
Douglas E. May 33 N/A Being elected as a Director; also serves as CFO
Frank Fisbeck 70 N/A Being elected as a Director
------------------------------------------------------------------------------------------------------
</TABLE>
The Company's current director serves until the next annual meeting of
stockholders and until his successor is duly elected and qualified. Mr.
Wellington was elected to the Board of Directors on April 11, 1996. Mr.
Wellington anticipates resigning as a director shortly after the effective date
of the Elections.
J. Douglas Wellington was elected CEO of the Company in September 1996, after
being elected President and Chief Operating Officer in August 1996. Mr.
Wellington resigned his positions as President and CEO in August 2000. Mr.
Wellington joined the Company
<PAGE>
in 1993. In April 1996, Mr. Wellington was elected to the Board of Directors.
Mr. Wellington was elected Controller (which position he held until September
1996) and Principal Accounting Officer in May 1996 and was elected interim
President and Chief Operating Officer in July 1996.
David B. McLane was appointed to the Board of Directors and became President of
the Company as of September 1, 2000. Mr. McLane along with Messrs. John F.
Fisbeck and Fortune formed WOW Entertainment, Inc. in May, 2000. WOW
Entertainment, Inc. become a subsidiary of the Company as of September, 2000 and
will change its name to WOW - Women of Wrestling, Inc. Mr. McLane has been
involved in various facets of wrestling for more than 20 years. In the 1980s, Mr
McLane worked for Dick the Bruiser's Championship Wrestling, Inc., an
Indianapolis-based wrestling promotion company. In 1985, Mr. McLane became the
president and principal shareholder of David McLane Enterprises, Inc., a
production and promotion company. Mr. McLane created, produced and promoted the
nationally syndicated women's wrestling program, GLOW (Gorgeous Ladies of
Wrestling) in the 1980s. Mr. McLane also develops and produces the Pro Beach
Hockey television series which is in its third season on ESPN.
Douglas E. May is
being elected to the Board of Directors which election will become effective no
more than ten (10) days after the mailing of this Information Statement. He
became the CFO of the Company in September, 2000. Mr. May, who is a certified
public accountant and certified financial planner, was a financial consultant
with Merrill Lynch from August, 1995 until August, 2000. Prior to joining
Merrill Lynch, Mr. May was with Price Waterhouse, LLP from 1990 to 1995.
Frank Fisbeck is being elected to the Board of Directors which election will
become effective no more than ten (10) days after the mailing of this
Information Statement. Mr. Fisbeck is the father of John F. Fisbeck, a member of
the Control Group. Mr. Fisbeck has been retired since 1988. Prior to his
retirement, Mr. Fisbeck was president of Mineweld Company, a wholesale
distributor of industrial gases and welding supplies with 17 offices in three
states.
(b) Significant Employees. None.
(c) Family Relationships. None.
(d) Involvement in Certain Legal Proceedings. None.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE REPORT
Section 16(a) of 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 an initial report of ownership of such securities on Form 3
and changes in ownership of such securities on Form 4 or 5 with the Commission.
Such officers, directors and 10% stockholders are required to furnish the
Company with copies of all Section 16(a) forms they file with the Commission.
<PAGE>
Based solely on its review of the copies of such forms received by it, or
written representations from certain such reporting persons that no Form 5's
were required for such persons, the Company believes that, for the fiscal year
ended December 31, 1999, its officers, directors and 10% stockholders complied
with all applicable Section 16(a) filing requirements.
INFORMATION CONCERNING BOARD MEETINGS AND COMMITTEES
The Board of Directors held ten meetings during fiscal 1999. Each incumbent
director attended all of the meetings of the Board of Directors and all
committees of the Board of Directors on which he served during fiscal 1999
during the period in which he was a director. The Company has no current
standing audit, nominating or compensation committees.
EXECUTIVE COMPENSATION
The following tables set forth certain information respecting the compensation
awarded to, earned by, or paid to the sole individual serving as the Company's
CEO during 1999. No other individual had a total annual compensation exceeding
$100,000 for the year ended December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Long Term
Compensation
Annual Compensation Awards
Other Annual Securities All Other
Name and Principal Year Salary ($) Bonus ($) Compensation Underlying Compensation ($)
Position ($) Options (#)
<S> <C> <C> <C> <C> <C> <C>
J. Douglas Wellington, CEO 1999 125,000 -- -- -- 18,422 (1)
1998 125,000 -- -- -- 23,432 (2)
1997 125,000 62,500 -- -- 21,275 (3)
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists of $12,022 for accrued vacation and sick time, $6,000 for car
allowance and $400 for home office expenses.
(2) Consists of $17,432 for accrued vacation and sick time and $6,000 for car
allowance.
(3) Consists of $15,148 for accrued vacation and sick time, $6,000 for car
allowance and $127 for interest on a letter of credit (discussed below).
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
Value of
Number of Unexercised Unexercised
Options in-the-money
At FY-End (#) Options at FY-End ($)
Shares Acquired on Value Realized Exercisable / Exercisable /
Name Exercise (#) ($) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
J. Douglas Wellington 0 $0 518,750/0 (1) $0/$0
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Wellington exercised options for 150,000 shares of Prior Common Stock
at $0.08 per share and 300,000 shares of Prior Common Stock at $0.0625 per
share in August 2000.
Compensation of Directors
The Company's non-employee directors were each paid a fee of $4,000 per month in
1999 as compensation for services as a director. Directors who are employed by
the Company receive no such compensation. Every director is reimbursed for
out-of-pocket expenses incurred in connection with attendance at meetings of the
Board of Directors and other Company business.
Employment Contracts and Termination of Employment
The Company and Mr. Wellington executed an employment agreement dated as of
December 31, 1999 (the "Employment Agreement") in connection with the execution
of the Letter Agreement. The Employment Agreement has a term of thirteen months,
and provides for compensation payable to Mr. Wellington of $135,417. The
Employment Agreement also provides for a severance payment of $125,000 to be
paid to Mr. Wellington from a reserve account set aside and controlled by
Shamrock in the event (a) there is no intervening voluntary bankruptcy by the
Company prior to January 31, 2001 without Shamrock's consent and the terms and
conditions of the Employment Agreement and the Letter Agreement are satisfied,
(b) Mr. Wellington is terminated "without cause", (c) a "substantial breach"
occurs or (d) Mr. Wellington resigns after a "change of control" (as such terms
are defined in the Employment Agreement).
As a result of change in control resulting from the purchase by the Buyers of
substantially all of the Common Stock, Mr. Wellington became entitled to the
severance payment provided for in the Employment Agreement. On September 1,
2000,the Company, WOW, the Control Group and Mr. Wellington entered into a
Severance and Consulting Agreement. Pursuant to such agreement, (a) Mr.
Wellington will receive his severance payment on January 31, 2001, (b) the
Company will pay Mr. Wellington his base salary under the Employment Agreement
through September 30, 2000, at which time the Company will pay Mr. Wellington
the remainder of his base salary under the Employment Agreement, and (c) on
September 30, 2000, the Company will pay Mr. Wellington $1,500 for car and rent
allowances through January 31, 2001. Additionally, the Company has engaged Mr.
Wellington as a consultant through January 31, 2002 and has agreed to grant Mr.
Wellington warrants to purchase 50,000 shares of Common Stock at $1.00 per share
on such date, exercisable immediately after grant, for a period of six years.
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of the Consent Date with respect
to (i) each director, (ii) all individuals serving as the Company's CEO during
1999, and (iii) all directors and all such executive officers as a group. Unless
otherwise noted, each holder has sole voting and investment power with respect
to the shares of the listed securities. An asterisk (*) indicates beneficial
ownership of less than 1%.
COMMON STOCK
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
Name and Address of Beneficial Amount and Nature of Beneficial Percent of Class
Owner Ownership (1)(2)
<S> <C> <C>
David B. McLane 343,561,540 (3) 91.7%
Bank One Tower
Suite 4600
Indianapolis, Indiana 46204
Douglas E. May 600,000 *
Bank One Tower
Suite 4600
Indianapolis, Indiana 46204
Frank Fisbeck 360,000 *
Bank One Tower
Suite 4600
Indianapolis, Indiana 46204
J. Douglas Wellington 500,000 *
c/o American Gaming &
Entertainment, Ltd.,
51 Beech Road,
Glen Rock, New Jersey, 07452
Executive Officers and 345,021,540 92.1%
Directors as a group (4 persons)
-------------------------------------------------------------------------------------------------------
</TABLE>
(1) As used in this table, "beneficial ownership" of securities means the sole
or shared power to vote, or to direct the voting of, such securities,
and/or the sole or shared investment power with respect to such securities
(i.e., the power to dispose of, or to direct the disposition of, such
securities). In addition, for purposes of this table, a person is deemed to
have "beneficial ownership" of any security which such person had the right
to acquire within 60 days after the Consent Date.
(2) Shares of Prior Common Stock.
(3) As a member of the Control Group, Mr. McLane along with Messrs. John F.
Fisbeck and Fortune beneficially own 343,561,540 shares of Common Stock.
Individually, each person has sole dispositive and voting power over the
following shares of Common Stock: McLane, 113,445,513, John F. Fisbeck,
114,058,013 and Fortune, 116,058,014.
<PAGE>
Distribution of Information Statement
The cost of distributing this Information Statement has been borne by the
Company. The distribution will be made by mail.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David B. McLane
--------------------------
David B. McLane, President
Dated: September 1, 2000
<PAGE>
Exhibit A
---------
RESTATED CERTIFICATE OF INCORPORATION OF
WOW ENTERTAINMENT, INC.
A DELAWARE CORPORATION
FIRST. The name of the Corporation is WOW Entertainment, Inc.
SECOND. The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.
THIRD. The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH. (1) The total number of shares of capital stock which this corporation
shall have the authority to issue is One Hundred Fifty One Million (151,000,000
consisting of (a) One Hundred Fifty Million (150,000,000) shares of common
stock, each having a par value of one cent ($0.01), amounting in the aggregate
to One Million Five Hundred Thousand Dollars ($1,500,000) ("Common Stock"), and
(b) One Million (1,000,000) shares of preferred stock, each having a par value
of one cent ($0.01), amounting in the aggregate to Ten Thousand Dollars ($10,000
("Preferred Stock").
(2) Effective at the close of business on the date that this Restated
Certificate of Incorporation is filed with the Secretary of State of the State
of Delaware, and without further action on the part of the Corporation or the
holders of its outstanding common stock, $0.01 par value per share ("Prior
Common Stock"), each issued and outstanding share of Prior Common Stock shall
automatically be reclassified as and changed into 0.1667 of a share of Common
Stock. Effective at the close of business on such date, each certificate
representing shares of Prior Common Stock shall be deemed to represent the same
number of shares of Common Stock multiplied by 0.1667. As promptly as
practicable thereafter, the Corporation, upon delivery and surrender of existing
certificates representing shares of Prior Common Stock by the holders thereof,
which certificates, if the Board of Directors so requests, shall be duly
endorsed to the Corporation in blank or accompanied by proper instruments of
transfer to the Corporation (such endorsements or instruments of transfer to be
in a form satisfactory to the Corporation), shall issue and deliver or cause to
be delivered to each such holder a certificate or certificates representing a
whole number of shares of Common Stock equal to the number of shares of Prior
Common Stock formerly represented by all existing certificates of such holder
multiplied by 0.1667; provided, however, that in lieu of issuing any fractional
shares of Common Stock resulting from such reclassification and change, the
Company shall pay to each stockholder of record who otherwise would have been
entitled to a fractional share of Common Stock cash (without interest) in an
amount determined by multiplying the average of the daily closing bid price for
the Prior Common Stock quoted on the OTC Bulletin Board for each of the 10
business days
<PAGE>
immediately preceding the effective date that this Restated Certificate of
Incorporation is filed with the Secretary of State of the State of Delaware by
the fraction represented by such fractional share of Common Stock (any fraction
of a cent to be adjusted upward to the nearest whole cent).
(3) Except as otherwise expressly provided by statute or by this Certificate,
and subject to the express terms and rights, if any, of any Preferred Stock
authorized by the Board of Directors pursuant to the authority granted in this
Article FOURTH, all voting rights shall be vested in the holders of the Common
Stock, who shall be entitled to one vote per share on all matters submitted to a
vote of holders of the Common Stock and shall be entitled to receive: (a) such
dividends on the Common Stock as may be declared and paid by the Corporation out
of assets legally available therefor; and (b) in the event of the liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
available for distribution to stockholders.
(4) The Board of Directors is authorized, subject to limitations prescribed by
statute and the provisions of this Article FOURTH, to provide for the issuance
of Preferred Stock, from time to time, in one or more series of any number of
shares, with a distinctive serial designation for each series, provided that the
aggregate number of shares issued and not cancelled of any and all such series
shall not exceed the total number of shares of Preferred Stock authorized by
this Article FOURTH, as shall hereafter be stated and expressed in the
resolution or resolutions providing for the issuance of such Preferred Stock
from time to time adopted by the Board of Directors. Subject to said
limitations, each series of Preferred Stock: (a) may have such voting powers,
full or limited, or may be without voting powers; (b) may be subject to
redemption at such time or times and at such prices; (c) may be entitled to
receive dividends (which may be cumulative or noncumulative) at such rate or
rates, on such conditions and at such times, and payable in preference to, or in
such relation to, the dividends payable on any other class or classes or series
of stock (d) may have such rights upon the dissolution of; or upon any
distribution of the assets of; the Corporation; (e) may be made convertible
into, or exchangeable for, shares of any other class or classes of or any other
series of the same or any other class or classes of stock of the Corporation or
any other issuer, at such price or prices or at such rates of exchange, and with
such adjustments; (f) may be entitled to the benefit of a sinking fund to be
applied to the purchase or redemption of shares of such series in such amount or
amounts; (g) may be entitled to the benefit of conditions and restrictions upon
the creation of indebtedness of the Corporation or any subsidiary, upon the
issue of any additional stock (including additional shares of such series or of
any other series) and upon the payment of dividends or the making of other
distributions on, and the purchase, redemption or other acquisition by the
Corporation or any subsidiary, of any outstanding stock of the Corporation; and
(h) may have such other relative, participating, optional or other special
rights, qualifications, limitations or restrictions thereon; all as shall be
stated in said resolution or resolutions providing for the issue of such series
of Preferred Stock.
(5) Shares of any series of Preferred Stock which have been redeemed (whether
through the operation of a sinking fund or otherwise) or which, if convertible
or exchangeable, have been converted into or exchanged for shares of stock of
any other
<PAGE>
class or classes, shall have the status of authorized and unissued shares of
Preferred Stock of the same series and maybe reissued as a part of the series of
which they were originally a part or may be reclassified and reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors or as part of any other series of Preferred Stock, all
subject to the conditions or restrictions on issuance set forth in the
resolution or resolutions adopted by the Board of Directors providing for the
issue of any such series of Preferred Stock.
FIFTH. The Corporation shall have perpetual existence.
SIXTH. In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to adopt, amend or repeal the
By-Laws of the Corporation in any manner not inconsistent with the provisions of
such By-Laws.
SEVENTH. Elections of directors need not be by written ballot unless the By-Laws
of the Corporation shall so provide.
Meetings of stockholders may be held within or without the State of Delaware as
the By-Laws may provide. The books of the Corporation may be kept (subject to
any provision contained in the statutes) outside the State of Delaware at such
place or places as may be designated from time to time by the Board of Directors
or in the By-Laws of the Corporation;
EIGHTH. A director of the Corporation shall have no personal liability to the
Corporation or to its stockholders for monetary damages for breach of fiduciary
duty as a director except to the extent that Section 102(b)(7) (or any successor
or additional provision) of the General Corporation Law of the State of
Delaware, as amended from time to time, expressly provides that the liability of
a director may not be eliminated or limited.
NINTH. The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate in the manner now or hereafter
prescribed by statute, and all rights conferred on stockholders herein are
granted subject to this reservation.
