<PAGE>
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ADDvantage Media Group, 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)(4) 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>
ADDVANTAGE MEDIA GROUP, INC.
5100 EAST SKELLY DRIVE
MERIDIAN TOWER, SUITE 1080
TULSA, OKLAHOMA 74135
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1997
To the Stockholders of
ADDVANTAGE MEDIA GROUP, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
ADDVantage Media Group, Inc., an Oklahoma corporation (the "Company"), will be
held in the Meeting Tower Conference Room, Meridian Tower, 4th Floor, 5100 East
Skelly Drive, Tulsa, Oklahoma, on Thursday, May 29, 1997, at 10:00 a.m., local
time, for the following purposes:
1. To elect four directors for one year terms;
2. To consider and act upon a proposal to approve an amendment to the
ADDvantage Media Group, Inc. 1991 Employee Stock Plan;
3. To consider and act upon a proposal to ratify the appointment of
Tullius Taylor Sartain & Sartain as the independent auditors of the
Company for 1997; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 25, 1997,
as the record date for the meeting, and only holders of shares of Common Stock
and Series A Preferred Stock of record at such time will be entitled to vote at
the meeting or any adjournment thereof. A complete list of the stockholders
entitled to vote at the meeting will be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of ten days prior to the date of the meeting at the offices
of the Company and at the time and place of the meeting.
By Order of the Board of Directors,
Lynnwood R. Moore, Jr.
Secretary
Tulsa, Oklahoma
April 28, 1997
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES. IF YOU DO ATTEND THE MEETING, YOU MAY WITHDRAW YOUR PROXY
AND VOTE IN PERSON.
<PAGE>
ADDVANTAGE MEDIA GROUP, INC.
5100 EAST SKELLY DRIVE
MERIDIAN TOWER, SUITE 1080
TULSA, OKLAHOMA 74135
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 29, 1997
SOLICITATION AND REVOCATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of ADDvantage Media Group, Inc., an Oklahoma corporation
(the "Company"), of proxies to be voted at the Annual Meeting of Stockholders of
the Company to be held on May 29, 1997, or at any adjournment thereof (the
"Annual Meeting"), for the purposes set forth in the accompanying Notice of
Annual Meeting. This Proxy Statement and accompanying proxy were first forwarded
on or about April 28, 1997, to stockholders of record as of April 25, 1997.
If the accompanying proxy is properly executed and returned, the shares
represented by the proxy will be voted at the Annual Meeting. If a stockholder
indicates in his or her proxy a choice with respect to any matter to be acted
upon, that stockholder's shares will be voted in accordance with such choice.
If no choice is indicated, such shares will be voted "FOR" (a) the election of
all of the nominees for directors listed below, (b) the approval of the
amendment to the ADDvantage Media Group, Inc. 1991 Employee Stock Plan and (c)
the ratification of the appointment of the independent auditors. A stockholder
giving a proxy may revoke it by giving written notice of revocation to the
Secretary of the Company at any time before it is voted, by executing another
valid proxy bearing a later date and delivering such proxy to the Secretary of
the Company prior to or at the Annual Meeting, or by attending the Annual
Meeting and voting in person.
The expenses of this proxy solicitation, including the cost of preparing
and mailing this Proxy Statement and accompanying proxy, will be borne by the
Company. Such expenses will also include the charges and expenses of banks,
brokerage firms and other custodians, nominees or fiduciaries for forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. Solicitation of proxies may be made by mail, telephone,
personal interviews or other means by the Board of Directors or the Company's
employees who will not be additionally compensated therefor but may be
reimbursed for their out-of-pocket expenses in connection therewith.
STOCKHOLDERS ENTITLED TO VOTE
Stockholders of record at the close of business on April 25, 1997 (the
"Record Date"), will be entitled to vote at the Annual Meeting. As of the
Record Date, there were issued and outstanding 5,856,584 shares of Common Stock,
par value $.01 per share (the "Common Stock"), and 227,750 shares of Series A
Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the
Company. Each share of Common Stock is entitled to one vote and each share of
Preferred Stock is entitled to 1.6 votes. There is no cumulative voting with
respect to the election of directors.
The presence in person or by proxy of the holders of a majority of the
aggregate shares of Common Stock and Preferred Stock issued and outstanding at
the Annual Meeting will constitute a quorum for the transaction of business.
Votes withheld from nominees for directors, abstentions and broker non-votes
will be counted for purposes of determining whether a quorum has been reached.
<PAGE>
Votes will be tabulated by an inspector of election appointed by the Board of
Directors of the Company. Abstentions from voting, which may be specified on
each proposal except the election of directors, will have the effect of a
negative vote. A broker non-vote will have no effect on the outcome of the
election of directors or the other proposal.
PROPOSAL ONE
ELECTION OF DIRECTORS
Stockholder action will be requested at the Annual Meeting with respect to
the re-election of each of the current members of the Board of Directors of the
Company (the "Board of Directors") for a one year term expiring at the 1998
Annual Meeting of Stockholders. The By-laws (the "By-laws") of the Company
provide that the Board of Directors shall consist of not less than one nor more
than nine directors, as determined from time to time by resolution of the Board
of Directors. The number of directors is currently fixed at four. The term of
all of the members of the Board of Directors, consisting of Charles H. Hood,
Gary W. Young, J. Larre Barrett and John W. Condon, will expire at the Annual
Meeting, and the accompanying proxy solicits your vote for four directors.
The Board of Directors has nominated Charles H. Hood, Gary W. Young, J.
Larre Barrett and John W. Condon, for re-election as directors. The persons
named as proxies in the accompanying proxy, who have been designated by the
Board of Directors, intend to vote, unless otherwise instructed in such proxy,
for the election of Messrs. Hood, Young, Barrett and Condon. Should any nominee
named herein become unable for any reason to stand for election as a director of
the Company, it is intended that the persons named in such proxy will vote for
the election of such other person or persons as the Board of Directors may
recommend. The Company knows of no reason why any of the nominees will be
unavailable or unable to serve. The affirmative vote of the holders of a
majority of the aggregate shares of Common Stock and Preferred Stock present in
person or by proxy at the Annual Meeting and entitled to vote is required for
the election of directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE FOLLOWING
NOMINEES FOR DIRECTORS.
NOMINEES FOR DIRECTORS
Charles H. Hood, age 58, has served as Chairman, President and a director
of the Company since its formation in September 1989. From 1987 to June 1990,
he served as Chairman of the Board of Directors of Ackerman, Hood & McQueen,
Inc., an advertising agency headquartered in Oklahoma, with offices located in
Tulsa and Oklahoma City, Oklahoma, Dallas, Texas, Washington, D.C., Cleveland,
Ohio and Fort Smith, Arkansas. From 1970 to 1987, Mr. Hood served as Chairman
of the Board of Directors of Hood, Hope and Associates, Inc., an advertising
agency he co-founded in 1970. Mr. Hood received a Bachelor of Journalism degree
from the University of Missouri.
Gary W. Young, age 55, joined the Company in December 1990 as Executive
President -Finance and Administration and a director. Mr. Young is also the
owner and President of Young Ideas Inc., a financial consulting and investment
company he founded in 1987. From 1980 to 1986, he served as Executive Vice
President and a Director of Geodyne Resources, Inc., an oil and gas acquisition
and exploration company headquartered in Tulsa, Oklahoma. From 1970 to 1980,
Mr. Young was Senior Vice President of Finance and Administration and a Director
of Cotton Petroleum Corporation, a Tulsa, Oklahoma, based oil and gas
exploration company. From 1963 to 1970, he was employed by Arthur Young &
Company (now Ernst & Young), a national accounting firm. Mr. Young received a
Bachelor of Science degree from Kansas State University and is a Certified
Public Accountant.
J. Larre Barrett, age 57, was elected a director of the Company in January,
1992. Mr. Barrett
2
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has served as a corporate media consultant since January 1997. From December
1994 through December 1996, he served as Vice President of Decker
Communications, Inc., a consulting firm dealing with communication and skills
building. From March 1993 to December 1994, Mr. Barrett served as Vice
President of Sales for Dorna USA. From 1989 to February 1993, he served as Vice
President -Olympic Marketing Sales of CBS, Inc. Prior to this position, Mr.
Barrett spent 24 years with the ABC Television Network, most recently serving as
its Vice President of Sports Sales and Vice President of Olympic Marketing and
Sales. Mr. Barrett received Bachelor of Journalism and Master of Arts in
Radio/Television Sales & Management degrees from the University of Missouri.
John W. Condon, age 60, has been a director of the Company since September
1989. He has been employed by United Graphics, Inc., a company specializing in
pre-printing negatives and color separation, since 1964 and has served as its
Executive Vice President since that time. Mr. Condon received a Bachelor of
Science degree in Commerce with a major in Marketing from the University of
Notre Dame.
COMPENSATION OF DIRECTORS
The Company's directors receive no additional compensation for their
services on the Board of Directors or any committee thereof. All directors are
reimbursed by the Company for out-of-pocket expenses incurred by them in
connection with their service on the Board of Directors and any committee
thereof.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1996, the Board of Directors held one meeting (all other action
being taken by unanimous written consent). Each director attended all meetings
of the Board and of the Committees on which he served during 1996. The Board of
Directors has a standing Audit Committee and Compensation Committee.
The Audit Committee is composed of Messrs. Barrett and Condon. The Audit
Committee annually considers the qualifications of the independent auditors of
the Company and makes recommendations to the Board of Directors on the
engagement of the independent auditors. The Audit Committee also reviews with
the independent auditors the scope and results of the Company's audits,
compliance with any of the Company's written policies and procedures, the
adequacy of the Company's system of internal accounting controls and the
professional services furnished by the independent auditors to the Company. The
Audit Committee met once during 1996.
The Compensation Committee is composed of Messrs. Hood, Barrett and Condon.
The Compensation Committee reviews and monitors performance of the officers of
the Company and takes final action for and on behalf of the Board of Directors
with respect to compensation and benefit provisions for the officers of the
Company. The Compensation Committee met once during 1996.
The Company does not have a standing nominating committee. Nominations of
candidates for election as directors of the Company may be made at a meeting of
stockholders by or at the direction of the Board of Directors or by any
stockholder entitled to vote at such meeting.
3
<PAGE>
PROPOSAL TWO
APPROVAL OF AMENDMENT TO
THE ADDVANTAGE MEDIA GROUP,INC.
1991 EMPLOYEE STOCK PLAN
GENERAL
The Board of Directors is requesting that the stockholders approve an
amendment to the ADDvantage Media Group,Inc. 1991 Employee Stock Plan (the
"Employee Plan"). The Board has adopted, subject to stockholder approval, an
amendment to the Employee Plan to reflect changes made by the Securities and
Exchange Commission in 1996 to Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "1934 Act"). Prior to the 1996 changes to Rule 16b-3,
grants and awards made under the Employee Plan to employees who are subject to
Section 16(b) of the 1934 Act ("16(b) persons") were exempted from certain
restrictions imposed by Section 16(b) only if (i) such grants and awards were
made by a committee of the Board of Directors comprised solely of "disinterested
persons" (as defined in Rule 16b-3 prior to the 1996 changes) and (ii) such
grant or award was not exercisable until at least six months after it was made.
Accordingly, the Employee Plan required that it be administered by such a
committee with respect to 16(b) persons and that awards were not exercisable for
six months. The 1996 changes to Rule 16b-3 eliminated both of these
requirements for exemption from the Section 16(b) restrictions, and the Board
has adopted an amendment to the Employee Plan to similarly provide for the
removal of these requirements. The amendment to the Employee Plan vests
administration of the Employee Plan in the Board of Directors as a whole and
eliminates the six-month holding period. Pursuant to the provisions of the
Employee Plan, the amendment requires stockholder approval. The affirmative
vote of a majority of the shares present in person or by proxy at the Annual
Meeting and entitled to vote is required for the approval of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE AMENDMENT TO THE
ADDVANTAGE MEDIA GROUP, INC. 1991 EMPLOYEE STOCK PLAN.
SUMMARY OF THE EMPLOYEE PLAN
General. On April 8, 1991, the Board of Directors adopted, and the
stockholders approved, the Employee Plan. Initially, 180,000 shares of Common
Stock were reserved for issuance under the Employee Plan. The Employee Plan
provides, however, that the number of shares available under the Employee Plan
is increased automatically without further action by the Board of Directors or
stockholders of the Company to that number which, when added to the number of
shares subject to grants or awards under the Employee Plan equals 10% of the
number of outstanding shares of Common Stock (excluding for purposes of
determining the number of shares available under the Employee Plan all shares of
Common Stock issued pursuant to the Employee Plan).
The Employee Plan provides for grants and awards to key employees of the
Company, including officers and directors who are also employees of the Company.
The Employee Plan is administered by the Board of Directors of the Company.
Summary of Awards. The Employee Plan permits the granting of any or all of
the following types of awards: (a) stock options, (b) stock appreciation rights
("SARs"), and (c) restricted stock. Generally, awards under the Employee Plan
are granted for no consideration other than prior and future services. Awards
granted under the Employee Plan may, in the discretion of the Board, be granted
alone or in addition to, in tandem with or in substitution for any other award
under the Employee Plan or other plan of the Company. Such grants could include
grants of options after a decline in the market price of the Company's Common
Stock in substitution for previously granted options having a higher exercise
price.
4
<PAGE>
Stock options granted pursuant to the Employee Plan may, at the discretion
of the Board, be either incentive stock options ("ISOs"), within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, or non-qualified
stock options. The exercise price of any option granted may not be less than
100% of the fair market value of the Common Stock on the date of grant. With
respect to ISOs, the aggregate fair market value (determined as of the time the
ISOs are granted) of the Common Stock with respect to which ISOs are first
exercisable by any employee during any calendar year under all option plans of
the Company shall not exceed $100,000. The exercise price is generally payable
in cash or, if authorized by the Board prior to the time an option is granted,
by (i) the surrender, at the fair market value on the date on which the option
is exercised, of shares of Common Stock owned by the participant, or (ii) the
withholding of shares issuable upon exercise in an amount having a fair market
value (as defined in the Employee Plan) on the date of exercise equal to the
exercise price, or (iii) a combination of such methods. The vesting provisions
and the exercise periods of the options are determined by the Board, except that
no options may be exercised after ten years from the date granted.
SARs may be granted and attached to an option at the time the option is
granted or at any time subsequent thereto, subject to certain conditions. SARs
entitle the grantee, upon surrender of an exercisable related option, or an
exercisable portion thereof, to receive from the Company an amount equal to the
fair market value (as defined in the Employee Plan) on the surrender date of the
shares that the grantee would have been entitled to purchase on that date
pursuant to the related options or portion thereof surrendered, less the amount
the grantee would have been required to pay to purchase such shares under the
related option. SARs which are related to shares of Common Stock but unrelated
to options may also be granted under the Employee Plan.
The Employee Plan also permits the Board to award one share of restricted
stock to a participant for each five or more shares of Common Stock issued upon
the exercise of an option, subject to the terms and conditions of the Employee
Plan. These terms will include a restriction period (the "Restriction Period")
of three years from the date of award during which the shares of restricted
stock may not be sold, assigned, transferred, pledged or otherwise encumbered.
Except for such restrictions on transfer and such other restrictions as the
Board may impose, the participant will have all the rights of a holder of Common
Stock as to such restricted stock, including the right to vote the shares and
the right to receive any cash distributions. Upon a termination of employment
for any reason during the Restriction Period other than in accordance with the
terms of a Company retirement plan or by reason of participant's death or
disability, all shares still subject to restriction will be forfeited by the
participant.
Once vested, options and SARs granted under the Employee Plan are
exercisable (a) at any time prior to termination of employment for any reason
other than death, disability, retirement or resignation for approved employment,
(b) for up to five years after the retirement of a participant (but not beyond
the original expiration date of the option); (c) for up to one year after the
death of the participant (in case of ISOs only, until the original expiration
date of an option); and (d) until the original expiration date of the option in
the event of the disability of the participant.
In the event of any change affecting the shares of Common Stock by reason
of any stock dividend or split, combination or reclassification of shares, the
aggregate number of shares which may be issued under the Employee Plan, and the
number and purchase price of shares subject to the outstanding awards granted
under the Employee Plan, shall be adjusted proportionately.
Transferability. No options, SARs or restricted stock granted or awarded
under the Employee Plan are transferable (including without limitation any
assignment, pledge, hypothecation and creation of a lien or other security
interest) otherwise than (i) by will or the laws of descent and distribution,
(ii) pursuant to qualified domestic relations orders, or (iii) to immediate
family members or to trusts of which the participant and immediate family
members are the only beneficiaries.
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<PAGE>
Termination and Amendment. The Employee Plan will terminate on the date
the Board of Directors declares it terminated. No ISOs may, however, be granted
after the tenth anniversary of stockholder approval of the Employee Plan. The
Employee Plan may be altered, changed, modified, amended or terminated by
written amendment approved by the Board of Directors of the Company; however, no
action of the Board of Directors may, without the approval of the stockholders
of the Company: (i) increase the total number of shares (a) that may be awarded
as restricted stock, (b) that may be purchased pursuant to the exercise of
options or (c) with respect to which SARs may be granted; (ii) waive the six-
month minimum holding period for options; (iii) decrease the minimum option
price, if any, at which options may be granted; (iv) withdraw administration of
the Employee Plan from the Board; or (v) increase the amount payable upon the
exercise of SARs under the Employee Plan. Subject to the restrictions described
in the preceding sentence, the Board may amend any award previously granted,
prospectively or retroactively. No such amendment may impair the rights of any
participant under any award without the consent of such participant (except for
any amendment made to cause the Employee Plan to qualify for any exemption
provided by Rule 16b-3 under the 1934 Act).
Federal Income Tax Consequences. The Company believes that under present
Federal tax laws the following are the Federal income tax consequences generally
arising with respect to awards granted under the Employee Plan. The grant of an
option or SAR, will create no tax consequences for the participant or the
Company. The participant will have no taxable income upon exercising an ISO
(except that the alternative minimum tax may apply) and the Company will receive
no deduction at that time. Upon exercising an option other than an ISO, the
participant must generally recognize ordinary income equal to the difference
between the exercise price and the fair market value of the freely transferable
and nonforfeitable stock acquired on the date of exercise. Upon exercising an
SAR, the participant must generally recognize ordinary income equal to the cash
or the fair market value of the freely transferable and nonforfeitable stock
received on the date of exercise. In each case, the Company generally will be
entitled to a deduction for the amount recognized as ordinary income by the
participant. The treatment to a participant of a disposition of shares acquired
upon the exercise of an SAR or option depends on how long the shares have been
held and on whether such shares are acquired by exercising an ISO or by
exercising an option other than an ISO. Generally, there will be no tax
consequences to the Company in connection with a disposition of shares acquired
under an option except that the Company will be entitled to a deduction (and the
employee will recognize ordinary taxable income) if shares acquired under an ISO
are disposed of before the applicable ISO holding periods have been satisfied.
Different tax rules apply with respect to participants who are subject to
Section 16 of the Securities Exchange Act of 1934, as amended.
With respect to awards granted under the Employee Plan involving stock that
is restricted as to transferability and subject to a substantial risk of
forfeiture, the participant must generally recognize ordinary income equal to
the fair market value of the shares received at the earlier of the time at which
the shares become transferable or not subject to a substantial risk of
forfeiture. The Company generally will be entitled to a deduction for the same
amount. In certain circumstances, a participant may elect to be taxed at the
time of receipt of shares rather than upon lapse of restrictions on
transferability or the substantial risk of forfeiture.
The foregoing provides only a very general description of the application
of Federal income tax laws to awards under the Employee Plan. The summary does
not address the effects of foreign, state and local tax laws. Because of the
complexities of the tax laws, participants are strongly urged to consult a tax
advisor regarding these matters.
Awards Granted. As of March 31, 1997, non-qualified stock options for a
total of 497,000 shares at an average exercise price of $0.90 per share are
outstanding under the Employee Plan. All of these options were granted at the
fair market value of the Common Stock on the date of grant, and expire at
various times during the years 2003 to 2006. No other awards have been granted
under the Employee Plan. Future awards under the Employee Plan are not yet
determinable.
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PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITOR
Stockholder action will be requested at the Annual Meeting to ratify the
Board of Directors' appointment of the Company's independent auditors for 1997.
The Board of Directors has appointed Tullius Taylor Sartain & Sartain as the
independent auditors of the Company for the fiscal year ending December 31,
1997. Tullius Taylor Sartain & Sartain has been the independent auditors of the
Company since 1994. A proposal will be presented at the Annual Meeting asking
the stockholders to ratify the appointment of Tullius Taylor Sartain & Sartain
as the Company's independent auditors. If the stockholders do not ratify the
appointment of Tullius Taylor Sartain & Sartain, the Board of Directors will
reconsider the appointment. The affirmative vote of the holders of a majority
of the shares present in person or by proxy at the Annual Meeting and entitled
to vote is required for the approval of this proposal.
A representative of Tullius Taylor Sartain & Sartain will be present at the
Annual Meeting. Such representative will be given the opportunity to make a
statement if he desires to do so and will be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF TULLIUS TAYLOR SARTAIN & SARTAIN AS THE COMPANY'S INDEPENDENT
AUDITORS FOR 1997.
PRINCIPAL STOCKHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 31, 1997, the number and
percentage of shares of Common Stock and Preferred Stock of the Company owned
beneficially, by class and on a combined basis, by (i) each director and nominee
for director of the Company, (ii) each executive officer named in the "Summary
Compensation Table" below, (iii) all executive officers and directors as a
group, and (iv) each person who is known by the Company to own beneficially more
than 5% of the Common Stock or Preferred Stock. Except as otherwise indicated,
the beneficial owners listed in the table have sole voting and investment powers
with respect to the shares.
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<TABLE>
<CAPTION>
Common Stock Series A Preferred Stock(8)
--------------------------------- ----------------------------
Percentage of
Name and Address Number of Shares Percent of Number of Shares Percent Total Combined
of Beneficial Owner Beneficially Owned Class(1) Beneficially Owned of Class Voting Power(8)
- - ---------------------------- ------------------ ---------- ------------------ -------- ---------------
<S> <C> <C> <C> <C> <C>
Charles H. Hood............. 568,800(2) 9.4% 65,000 28.5% 10.7%
3254 East 75th Street
Tulsa, OK 74136
Gary W. Young............... 450,430(3) 7.4% 58,750 25.8% 8.6%
7417 South Florence
Tulsa, OK 74136
J. Larre Barrett............ 119,680(4) 2.0% -0- - - 1.9%
1055 Hardscrabble Road
Chappaqua, New York 10514
John W. Condon.............. 131,080(5) 2.2% 12,750 5.6% 2.5%
1748 E. 30th Place
Tulsa, OK 74114
Robert W. Davis............. 170,150 2.9% 56,875 25.0% 4.3%
3129 S. Columbia Circle
Tulsa, OK 74105
William S. Atherton 240,000(6) 4.1% 12,500 5.5% 4.3%
759 Cal Cove Dr.
Fort Meyers, FL 33919
All executive officers and 1,279,990(7) 20.1% 136,500 59.9% 22.2%
directors as a group
(5 persons)
- - --------------------
</TABLE>
* Less than one percent.
(1) Shares of Common Stock which an individual has the right to acquire within
60 days pursuant to the exercise of options are deemed to be outstanding
for the purpose of computing the percentage ownership of such individual,
but are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person shown in the table or the
percentage ownership of all officers and directors as a group.
(2) Includes 190,000 shares subject to options which are currently exercisable.
(3) Includes 240,000 shares subject to stock options which are currently
exercisable.
(4) Includes 50,000 shares subject to stock options which are currently
exercisable.
(5) Includes 25,000 shares subject to stock options which are currently
exercisable.
(6) Includes 30,000 shares which represents Mr. Atherton's beneficial ownership
interest in shares held by Atherton & Murphy Investment Company.
(7) Includes an aggregate of 515,000 shares subject to stock options which are
currently exercisable.
(8) Each share of Preferred Stock is convertible into that number of shares of
Common Stock determined by dividing the sum of $4.00 plus the amount of
accrued but unpaid dividends, and accrued and unpaid interest thereon, by
$4.00. Holders of Preferred Stock are entitled to vote
8
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on all matters together with the holders of Common Stock and each share of
Preferred Stock is entitled to the number of votes equal to the number of
shares then issuable to the holder upon its conversion. For purposes of
this table, each share of Preferred Stock is entitled to approximately 1.6
votes.
EXECUTIVE COMPENSATION
The following table sets forth certain information for each of the fiscal
years ended December 31, 1996, 1995 and 1994, with respect to the compensation
paid for services rendered in all capacities to the Company by the Company's
chief executive officer and each executive officer whose total compensation
exceeded $100,000 during fiscal 1996. No other executive officer received
salary and bonus of greater than $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
-------------------------------------------- -----------------------
Number
of
Other Shares
Annual Restricted Under- Long-Term
Compen- Stock lying Incentive
Name and Salary Bonus sation Awards Options Payouts
Principal Position Year ($) ($) ($)(4) ($) Granted ($)
- - ------------------ ---- -------- -------- -------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles H. Hood, 1996 $125,000 $125,000 $ 2,091 -0- 45,000 -0-
President and 1995 106,250(1) 143,750(3) 16,000 -0- 50,000 -0-
Chairman 1994 100,000(1) -0- -0- -0- -0- -0-
Gary W. Young, 1996 $106,250 $125,000 $ 2,527 -0- 45,000 -0-
Executive Vice 1995 106,250(2) 143,750(3) 16,000 -0- 50,000 -0-
President 1994 80,000(2) -0- -0- -0- -0- -0-
</TABLE>
________________
(1) Commencing October 1, 1995, Mr. Hood was entitled to receive an annual base
salary of $125,000, and for the first nine months of 1995 and for 1994, he
was entitled to receive an annual base salary of $100,000. However, Mr.
Hood elected to forego receiving any salary commencing January 1, 1993
through August 1995, when the Company's working capital position improved
to allow the payment thereof. The salary was recorded as an expense during
each of these years and a liability accrued for the salary payable to Mr.
Hood. Mr. Hood received payments of $146,125 and $30,000 during 1996 and
1995, respectively, with respect to his accrued salary from prior years.
(2) Commencing October 1, 1995, Mr. Young became entitled to receive an annual
base salary of $125,000. Mr. Young was entitled to receive an annual base
salary of $100,000 for the first nine months of fiscal year 1995, and
$80,000 for fiscal year 1994. However, Mr. Young elected to forego
receiving any salary commencing January 1, 1993 through August 1995, when
the Company's working capital position improved to allow the payment
thereof. The salary was recorded as an expense during each of these years
and a liability accrued for the salary payable to Mr. Young. Mr. Young
received payments of $146,125 and $30,000 during 1996 and 1995,
respectively, with respect to his accrued salary from prior years.
(3) Represents a bonus in the amount of $50,000 to each of Mr. Hood and Mr.
Young and the fair market value at the date of award ($.625 per share) of
150,000 shares of Common Stock awarded to each of Mr. Hood and Mr. Young as
bonus compensation in connection with their services to the
9
<PAGE>
Company in 1995.
(4) Other annual compensation represents payments of a non-accountable expense
allowance. Amounts do not include the value of perquisites or other
personal benefits because the amount of such compensation, if any, does not
exceed the lesser of $50,000 or 10% of the total amount of annual salary
and bonus.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to stock
options granted by the Company to each of the named executive officers during
the year ended December 31, 1996.
<TABLE>
<CAPTION>
Percent of Total
Number of Shares Options Granted to
Underlying Options Employees Exercise Price
Name Granted in 1996 Per Share ($) Expiration Date
- - --------------- ------------------ ------------------ --------------- ---------------
<S> <C> <C> <C> <C>
Charles H. Hood 45,000 28.7% $1.25 7/09/2006
Gary W. Young 45,000 28.7% $1.25 7/09/2006
</TABLE>
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
There were no stock options exercised by the named executive officers
during the year ended December 31, 1996. The following table sets forth
information regarding the value of unexercised stock options held by each of the
named executive officers as of the year ended December 31, 1996.
<TABLE>
<CAPTION>
Number of Shares of Common Value of Unexercised
Stock Underlying Unexercised In-The-Money Options at
Options at December 31, 1996(#) December 31, 1996($)(1)
---------------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- - ----------------- ----------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C>
Charles H. Hood 190,000 -0- $759,063 $-0-
Gary W. Young 240,000(2) -0- $966,875 $-0-
</TABLE>
____________
(1) Calculated by determining the difference between the fair market value of
the Company's Common Stock as of December 31, 1996 ($4.53 per share based
on the average of the high and low bid price on such date) and the exercise
price of the underlying options.
EXECUTIVE RETIREMENT PLAN
In December 1995, the Company adopted the ADDvantage Media Group, Inc.
Supplemental Executive Retirement Plan, a nonqualified deferred compensation
plan (the "Retirement Plan"). The Retirement Plan is an unfunded plan
maintained to provide deferred compensation to certain highly compensated
employees of the Company. Participation in the Retirement Plan is limited to
senior management employees of the Company designated by the Company's Board of
Directors. Mr. Hood and Mr. Young have been designated by the Board of
Directors as eligible participants under the Retirement Plan.
10
<PAGE>
Under the Retirement Plan, a participant terminating employment upon
reaching age 62 (the "early retirement date") will be entitled to receive
monthly benefits of approximately $6,770 a month for a period of ten years.
Upon reaching age 65 (the "normal retirement date") or such later date
coinciding with the executive's termination of or retirement from employment,
each executive will be entitled to receive monthly payments of $10,417 (the
"normal retirement benefits") for a period of ten years. In the event of a
long-term disability (as determined by the Board of Directors), the executive
will be entitled to the normal retirement benefits under the Retirement Plan
commencing on the early retirement date. In the event of the death of an
executive participant prior to the termination of employment, such executive's
spouse or designated beneficiary will be entitled to the normal retirement
benefits under the Retirement Plan. If the executive participant's employment
with the Company is terminated prior to the early retirement date, no benefits
are payable under the Retirement Plan.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
the Company's Common Stock, to report their initial ownership of the Company's
Common Stock and any subsequent changes in that ownership to the Securities and
Exchange Commission ("SEC") and The Nasdaq Stock Market, and to furnish the
Company with a copy of each such report. SEC regulations impose specific due
dates for such reports, and the Company is required to disclose in this Proxy
Statement any failure to file by these dates during and for fiscal 1996.
To the Company's knowledge, based solely on the review of the copies
of such reports furnished to the Company and written representations that no
other reports were required, during and with respect to fiscal 1996, all Section
16(a) filing requirements applicable to its executive officers, directors and
more than ten percent stockholders were complied with, except as follows: (a)
Charles H. Hood filed late an annual report on Form 5 with respect to the grant
of stock options during 1996; (b) Gary W. Young reported late one transaction
covering the sale of stock purchase warrants and filed late an annual report on
Form 5 with respect to the grant of stock options during 1996; (c) J. Larre
Barrett filed late two reports with respect to a total of five transactions
involving the purchase of shares of Common Stock; and (d) John W. Condon filed
late three reports, two reports with respect to a total of six transactions
involving the sale of shares of Common Stock and one report with respect to one
transaction involving the purchase of shares of Common Stock.
OTHER MATTERS
MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
The Board of Directors knows of no matters other than those described in
this Proxy Statement which will be brought before the Annual Meeting for a vote
of the stockholders. If any other matter properly comes before the Annual
Meeting for a stockholder's vote, the persons named in the accompanying proxy
will vote thereon in accordance with their best judgment.
PROPOSALS OF STOCKHOLDERS
Proposals of stockholders intended to be presented at the Company's 1998
Annual Meeting of Stockholders must be received at the principal executive
offices of the Company, 5100 East Skelly Drive, Meridian Tower, Suite 1080,
Tulsa, Oklahoma 74135, on or before December 29, 1997, to be considered for
inclusion in the Company's proxy statement and accompanying proxy for that
meeting.
11
<PAGE>
By Order of the Board of Directors.
Lynnwood R. Moore, Jr.
Secretary
April 28, 1997
Tulsa, Oklahoma
12
<PAGE>
PROXY
ADDVANTAGE MEDIA GROUP, INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Charles H. Hood and Gary W. Young as Proxies,
each with the power to appoint his or her substitute, and hereby authorizes them
to represent and to vote, as designated below, all the shares of common stock of
ADDvantage Media Group, Inc. (the "Company") held of record by the undersigned
on April 25, 1997, at the Annual Meeting of Stockholders of the Company to be
held on May 29, 1997, and at any and all adjournments or postponements thereof.
1. Election of directors.
[ ] FOR all nominees listed below (except as indicated to the contrary
below and subject to the discretion of the Proxies as provided
herein).
J. Larre Barrett John W. Condon Charles H. Hood Gary W. Young
[ ] WITHHOLD AUTHORITY to vote for all the nominees above.
Instructions: To withhold authority for any individual nominee or
nominees, write their name(s) here:
- - --------------------------------------------------------------------------------
2. Proposal to approve the amendment to the ADDvantage Media Group, Inc. 1991
Employee Stock Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on the reverse side)
3. Proposal to approve the appointment of Tullius Taylor Sartain & Sartain as
the independent auditors of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy when properly executed will be voted at the Annual Meeting or any
adjournments or postponements thereof as directed herein by the undersigned
stockholder. If no specifications are made, this Proxy will be voted FOR
Proposals 1, 2 and 3. This Proxy is revocable at any time before it is
exercised.
IMPORTANT: Please date this Proxy and sign
exactly as your name appears to the left.
If shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give title as such. If a
corporation, please sign in full corporate
name by president or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
Dated: , 1997
--------------------------------
Signature(s)
--------------------------------
Signature(s)
--------------------------------
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED ENVELOPE.
NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.
