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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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 Section 240.14a-11(c) or Section 240.14a-12
ADDvantage Media Group, Inc.
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(Name of Registrant as Specified In Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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Notes:
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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 28, 1998
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 Meridian Tower Conference Room, 4th Floor, Meridian Tower, 5100 East
Skelly Drive, Tulsa, Oklahoma, on Thursday, May 28, 1998, at 10:00 a.m., local
time, for the following purposes:
1. To elect six directors for one year terms;
2. To consider and act upon a proposal to approve the ADDvantage Media
Group, Inc. 1998 Incentive Stock Plan;
3. To consider and act upon a proposal to ratify the appointment of Tullius
Taylor Sartain & Sartain LLP as the independent auditors of the Company
for 1998; 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 24, 1998,
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, 1998
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.
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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 28, 1998
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 28, 1998, or at any adjournment thereof (the
"Annual Meeting"), for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. This Proxy Statement and accompanying proxy were
first forwarded on or about April 28, 1998, to stockholders of record as of
April 24, 1998.
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 under "Election of Directors,"
(b) approval of the 1998 Incentive 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.
Attendance at the Annual Meeting will not, by itself, revoke a proxy.
The Company will bear the entire cost of this proxy solicitation, including
the cost of preparing and mailing this Proxy Statement and accompanying proxy.
Such cost 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 24, 1998 (the
"Record Date"), will be entitled to vote at the Annual Meeting. As of the
Record Date, there were issued and outstanding 5,906,584 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 and Preferred Stock is entitled to one vote.
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.
Votes will be tabulated by an inspector of election appointed by the Board of
Directors of the
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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,
approval of the 1998 Incentive Stock Plan or the ratification of the appointment
of the Company's independent auditors.
PROPOSAL ONE
ELECTION OF DIRECTORS
Stockholder action will be requested at the Annual Meeting with respect to
the 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 1999
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 six. The term of
all of the current members of the Board of Directors, consisting of J Larre
Barrett, John W. Condon, Charles H. Hood, Steven C. Oden, Stephen G. Smith and
Gary W. Young will expire at the Annual Meeting, and the accompanying proxy
solicits your vote for each of the current directors.
The Board of Directors has nominated J Larre Barrett, John W. Condon,
Charles H. Hood, Steven C. Oden, Stephen G. Smith and Gary W. Young for election
as directors. All nominees are presently directors of the Company. 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 all the nominees for director. 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
J Larre Barrett, age 59, was elected a director of the Company in January
1992. Mr. Barrett has served as a sales representative of the Company since
April 1, 1997. From January 1997 until April 1997, Mr. Barrett was self-
employed as a corporate media consultant. 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 62, 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.
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Steven C. Oden, age 46, was elected a director of the Company in April
1998. Since April 1998, Mr. Oden has served as Vice President, Marketing and
Sales for Tulsa Winch, Inc., a manufacturing company. From April 1996 to April
1998, he served as Vice President, Sales and Marketing of the Company. From May
1988 to April 1996, he served as Vice President, Sales for Lowrance Electronics,
a manufacturer of sonar and navigational equipment sold to retailers in the
marine, sporting goods and avionics markets. From June 1983 to May 1988, he
served as Sales Manager for Ramsey Industries, a manufacturer of winches, speed
reducers, and transmissions sold to various commercial users and other winches
and accessories sold to recreational markets. From 1974 to 1983, Mr. Oden
served in various positions, including Sales Manager and International Sales
Manager, with the Auto Crane Company, a manufacturer of electric and hydraulic
cranes. Mr. Oden received Bachelor of Arts degrees in Business Administration
and Psychology from Westminster College.
Stephen G. Smith, age 50, was elected a director of the Company in March
1998. Since 1996, Mr. Smith has served as President of Sales Insights, Dallas,
Texas, a consulting firm for the consumer packaged goods industry. He was
employed from 1991 to 1996 at Helene Curtis USA, serving as Director of Customer
Business from 1994 to 1996 and Director of Business Planning from 1991 to 1994.
From 1989 to 1990, Mr. Smith served as National Sales Manager of the Toiletries
Division of Alberto-Culver Company. He was employed by Procter & Gamble
Distributing Company from 1970 through 1989, last serving as Group Marketing
Manager--Wal-Mart Customer Team. Mr. Smith received a Bachelor of Science
degree in Business from Iowa State University.
Charles H. Hood, age 59, 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 56, 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.
COMPENSATION OF DIRECTORS
During 1997, the Company's directors received no compensation for their
services on the Board of Directors or any committee thereof. Beginning in 1998,
the Company's outside directors will receive $12,000 annually for their services
on the Board of Directors. Directors who are employees of the Company will
receive no additional compensation for their services on the Board of Directors.
In addition, directors will be eligible to receive awards under the 1998
Incentive Stock Plan discussed below under "Proposal Two" in the event the 1998
Incentive Stock Plan is approved by the Company's stockholders. All directors
are reimbursed by the Company for out-of-pocket expenses incurred by
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them in connection with their service on the Board of Directors and any
committee thereof. During 1997, J Larre Barrett and John W. Condon were each
granted options to purchase 10,000 shares of Common Stock at an exercise price
of $3.25 per share, the fair market value of the Company's Common Stock on the
date of grant. In January 1998, the exercise price of these options was
subsequently repriced to$2.00 per share, the fair market value of the Company's
Common Stock on the repricing date.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During 1997, 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 1997. The Board of
Directors has a standing Audit Committee and Compensation Committee.
The Audit Committee is composed of Messrs. Condon and Smith. Prior to March
21, 1998, the Audit Committee was 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 1997.
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 1997.
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.
PROPOSAL TWO
APPROVAL OF THE
1998 INCENTIVE STOCK PLAN
The Board of Directors is requesting that the stockholders approve the
ADDvantage Media Group, Inc. 1998 Incentive Stock Plan (the "Incentive Plan").
In January 1998, the Board of Directors adopted the Incentive Plan to provide
officers, directors and key employees with equity incentives to promote the
success of the Company, enable key employees to acquire equity interests in the
Company and to enable the Company to attract and retain key employees. A copy
of the Incentive Plan is attached to this Proxy Statement as Appendix A. A
summary of the features of the Incentive Plan are outlined below. 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 approval of the Incentive Plan.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE 1998
INCENTIVE STOCK PLAN.
GENERAL
The Incentive Plan provides for the grant or issuance of stock options or
restricted stock to officers, directors, key employees and consultants of the
Company. A total of 590,658 shares of Common Stock have initially been reserved
for issuance under the Incentive Plan. The Incentive Plan provides, however,
that the number of shares available for issuance 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 Incentive Plan, equals 10% of the number of outstanding shares
of Common Stock (excluding for purposes of determining the number of shares
available under the Incentive Plan all shares of Common Stock issued pursuant to
the Incentive Plan).
ADMINISTRATION
The Incentive Plan is administered by the Board of Directors of the
Company. The Board has the power to construe and interpret the Incentive Plan,
establish appropriate rules and regulations relating to the Plan, and, subject
to the provisions of the Incentive Plan, to determine the persons to whom and
the dates on which the awards will be granted, what type of award will be
granted, the exercise price, the time or times during the term of each award
within which all or a portion of such award may be exercised, the payment terms
and method, expiration date and other terms of the award.
ELIGIBLE PARTICIPANTS
Directors, officers, key employees and consultants of the Company who, in
the determination of the Board of Directors, may make contributions to the
growth, management and success of the Company, are eligible to participate in
the Incentive Plan. There are approximately 25 employees and directors eligible
to participate in the Incentive Plan.
SUMMARY OF AWARDS
Stock Options. Stock options granted pursuant to the Incentive Plan will
be nonstatutory stock options not intended to qualify as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended. The exercise price of any option granted under the Incentive Plan
will be determined by the Board of Directors. The exercise price of options
granted under the Incentive Plan will be payable in cash, by the delivery to the
Company of shares of Common Stock owned by the participant for a period of at
least six months and having a fair market value on the date of exercise equal to
the exercise price, or, if authorized by the Board of Directors, by (i) the
withholding of shares issuable upon exercise in an amount having a fair market
value on the date of exercise equal to the exercise price, (ii) a promissory
note, (iii) delivery of irrevocable instructions to a broker to promptly deliver
to the Company the amount of sale proceeds necessary to pay the exercise price,
or (iv) a combination of such methods. The vesting provisions and the exercise
periods of the options are determined by the Board of Directors. A participant
may elect to satisfy any federal, state or local tax withholding obligation
relating to the exercise of an option by paying cash, authorizing the
withholding of cash otherwise due the participant, or authorizing the Company to
withhold shares of stock otherwise issuable to the participant upon exercise of
such option.
The Board of Directors may provide in the terms of any option granted to
directors and employees for the automatic grant of "reload options" to replace
any shares of Common Stock delivered to the Company to pay the exercise price of
the option or any withholding tax. The exercise price of any such reload option
will be fair market value of the Common Stock at the time shares are
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delivered to the Company, and the reload option will be exercisable for the
remainder of the exercise period of the original option; provided, however, that
the reload option will not be exercisable before the earlier of one year after
its grant or the day prior to the expiration date of the original option. A
participant may defer the receipt of shares otherwise issuable upon the exercise
of a stock option by (i) delivering to the Board a written election to defer
such receipt no later than six months before the date of exercise and (ii)
paying the exercise price by delivering shares of Common Stock owned by the
participant for a period of at least six months. The shares otherwise
deliverable to a participant electing to defer the receipt thereof will be
delivered to the Company for the participant's benefit and credited to a
bookkeeping account. Any dividends or other distributions with respect to the
deferred shares will be credited to the participant's account. The deferral may
only be revoked by delivery of written notice of revocation before the exercise
of the option for which a deferral election has previously been delivered.
Restricted Stock Awards. The Incentive Plan also permits the Board of
Directors to award shares of restricted stock to eligible participants. Shares
of restricted stock will generally contain restrictions established by the Board
of Directors that restrict such shares from being sold, assigned, transferred,
pledged or otherwise encumbered during a specified period. Such restrictions
may lapse in whole or in installments as the Board of Directors determines.
Except for such restrictions on transfer and such other restrictions as the
Board of Directors 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 dividends. Upon a termination of
employment for any reason during the restriction period, other than resignation
for approved employment, death or disability, all shares still subject to
restriction will be forfeited by the participant.
ADJUSTMENT PROVISIONS
In the event of any change affecting the shares of Common Stock by reason
of any recapitalization, stock dividend or split, consolidation or
reclassification of shares, the Board of Directors may make any appropriate
adjustments to the aggregate number of shares which may be issued under the
Incentive Plan and the number and purchase price of shares subject to the
outstanding awards granted under the Incentive Plan as it deems necessary to
prevent accretion or protect against dilution.
CHANGE OF CONTROL
In the event of a "change of control" of the Company as defined in the
Incentive Plan, all outstanding awards under the Incentive Plan, regardless of
any restrictions or limitations, become fully exercisable and freed of all
restrictions. In such event, the Company will have the right to purchase all
outstanding options issued under the Incentive Plan by paying the difference
between the price per share established in the change of control and the
exercise price. The acceleration of any outstanding awards and the grant of the
right to purchase outstanding options in the event of a change of control may be
viewed as anti-takeover provisions, which may have the effect of discouraging a
proposal to acquire or otherwise obtain control of the Company.
TRANSFERABILITY
No options or restricted stock granted or awarded under the Incentive 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, (iii) transfers to the Company, or (iv) by
authorization of the Board of Directors of cashless exercise procedures with
third parties to facilitate the exercise of any award under the Incentive Plan.
The Board of Directors may permit awards to be transferred to and exercised
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by a participant's immediate family members, trusts of which the participant and
immediate family members are the only beneficiaries or charitable institutions,
pursuant to such terms and procedures the Board of Directors may establish.
TERMINATION AND AMENDMENT
The Incentive Plan will terminate on the date the Board of Directors
declares it terminated. The Incentive Plan may be altered, changed, modified,
amended or terminated by written amendment approved by the Board of Directors of
the Company.
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 Incentive Plan. The grant of an option will create no tax
consequences for the participant or the Company. Upon exercising an option, the
participant must generally recognize compensation income equal to the excess of
the fair market value of the stock acquired on the date of exercise over the
exercise price. The Company generally will be entitled to a deduction for the
amount recognized as compensation income by the participant. Upon disposition
of the shares acquired pursuant to the exercise of an option, the participant
will generally recognize a capital gain or loss equal to the difference between
the amount realized on such disposition and the fair market value of such shares
as of the date of exercise of the option. Such gain will be long or short-term
depending on how long the shares have been held prior to disposition.
Under the Incentive Plan, a participant who is granted a stock option may
elect to defer the receipt of a portion of the shares of Common Stock otherwise
deliverable upon the exercise of the option. Such election must be made in the
manner prescribed in the Incentive Plan and the participant must pay the
exercise price by delivery of shares of Common Stock held by the participant at
least six months prior to exercise. A participant who makes such an election in
accordance with the procedures established in the Incentive Plan will recognize
no taxable income at the time of the exercise. Upon such a "deferred exercise,"
the participant will receive a number of shares of Common Stock that equals the
number of shares delivered as payment of the exercise price. The participant
will realize and recognize ordinary income, and the Company will be entitled to
a deduction, in the amount of the value of the deferred shares when they are
actually delivered to the participant in accordance with his or her deferral
election. The value of the deferred shares at exercise will be subject to FICA,
FUTA and Medicare tax. Any distributions made to the participant in respect of
the deferred shares will be taxed to the participant as compensation income at
the time of such distributions, and the amount of such distributions will be
deductible by the Company.
Upon the acquisition or receipt of shares of restricted stock under a
restricted stock award, the recipient normally will recognize taxable ordinary
income equal to the excess of the fair market value of the stock over the
purchase price, if any. However, to the extent the stock is subject to certain
types of vesting restrictions, the taxable event will be delayed until the
earlier of the time at which the shares of stock become transferable or the
vesting restrictions lapse. With respect to employees, the Company will
generally be required to withhold from regular wages or supplemental wage
payments an amount based on the ordinary income recognized. The Company will
generally be entitled to a deduction equal to the ordinary income recognized by
the recipient. Slightly different tax rules may apply with respect to
recipients of restricted stock awards who are subject to Section 16 of the
Exchange Act. In certain circumstances, a participant may elect to be taxed at
the time of receipt of shares rather than at the time restrictions on
transferability or the risk of forfeiture lapse with respect to such shares.
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AWARDS GRANTED
As of March 31, 1998, stock options to purchase a total of 180,000 shares
at an exercise price of $2.00 per share had been granted under the Incentive
Plan, subject to stockholder approval. All of these options were granted at the
fair market value of the Common Stock on the date of grant. Options to purchase
90,000 shares of Common Stock were granted to each of Charles H. Hood, President
and Chairman, and Gary W. Young, Executive Vice President. At April 24, 1998,
the closing sales price of the Company's Common Stock on the Nasdaq SmallCap
Market was $2.375. Future awards under the Incentive Plan are not yet
determinable.
PROPOSAL THREE
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Tullius Taylor Sartain & Sartain LLP
as the independent auditors of the Company for the fiscal year ending December
31, 1998. Tullius Taylor Sartain & Sartain LLP 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 LLP as the Company's independent auditors. Stockholder ratification of
the appointment of the Company's independent auditors is not required by the By-
laws or otherwise. However, the Board is submitting the appointment of Tullius
Taylor Sartain & Sartain LLP to the stockholders as a matter of good corporate
practice. If the stockholders do not ratify the appointment of Tullius Taylor
Sartain & Sartain LLP, 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 LLP will be present at
the Annual Meeting. The representative will have the opportunity to make a
statement if he or she 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 LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR 1998.
PRINCIPAL STOCKHOLDERS AND
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of March 31, 1998, 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(10)
-------------------------------------- -----------------------------
Percentage of
Name and Address Number of Shares Percent of Number of Shares Percent Total Combined
of Beneficial Owner Beneficially Owned (1) Class(1) Beneficially Owned of Class Voting Power(10)
------------------- ---------------------- ---------- ------------------ --------- ----------------
<S> <C> <C> <C> <C> <C>
Charles H. Hood............ 633,800(2) 10.2% 65,000 28.5% 10.9%
3254 East 75th Street
Tulsa, OK 74136
Gary W. Young.............. 530,430(3) 8.5% 58,750 25.8% 9.1%
7417 South Florence
Tulsa, OK 74136
J Larre Barrett............ 129,680(4) 2.2% - - - - 2.1%
1055 Hardscrabble Road
Chappaqua, NY 10514
John W. Condon............. 132,080(5) 2.2% 12,750 5.6% 2.3%
1748 E. 30th Place
Tulsa, OK 74114
Steven C. Oden............. 43,000(6) * - - - - *
5607 S. 77/th/ E. Ave.
Tulsa, OK 74145
Stephen G. Smith........... 50,000(7) * - - - - *
3008 Stanford Avenue
Dallas, TX 75225
Robert W. Davis............ 170,150 2.9% 56,875 25.0% 3.7%
3129 S. Columbia Circle
Tulsa, OK 74105
William S. Atherton........ 235,000(8) 4.0% 12,500 5.5% 4.0%
759 Cal Cove Dr.
Fort Meyers, FL 33919
All executive officers and 1,553,990(9) 23.2% 136,500 59.9% 24.5%
directors as a group
(7 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 280,000 shares subject to stock options which are currently
exercisable.
(3) Includes 330,000 shares subject to stock options which are currently
exercisable.
(4) Includes 60,000 shares subject to stock options which are currently
exercisable.
(5) Includes 35,000 shares subject to stock options which are currently
exercisable.
(6) Includes 40,000 shares subject to stock options which are currently
exercisable.
(7) Includes 50,000 shares subject to stock options which are currently
exercisable.
-9-
<PAGE>
(8) Includes 30,000 shares which represents Mr. Atherton's beneficial ownership
interest in shares held by Atherton & Murphy Investment Company.
(9) Includes an aggregate of 830,000 shares subject to stock options which are
currently exercisable.
(10) 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 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. Each share of Preferred Stock
is presently entitled to one vote.
EXECUTIVE COMPENSATION
The following table sets forth certain information for each of the fiscal
years ended December 31, 1997, 1996 and 1995, 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 $100,000 during fiscal 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
----------------------------------------------- ----------------------
Number
Other of Shares
Annual Restricted Under- Long-Term
Compen- Stock lying Incentive
Name and Salary Bonus sation Awards Options Payouts
Principal Position Year ($) ($) ($)(2) ($) Granted ($)
- - --------------------- ----- ------- ------- ------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Charles H. Hood, 1997 150,000 150,000 6,688 -0- -0- -0-
President and 1996 125,000 125,000 4,500 -0- 45,000 -0-
Chairman 1995 106,250 143,750(1) 16,000 -0- 50,000 -0-
Gary W. Young, 1997 150,000 150,000 6,684 -0- -0- -0-
Executive Vice 1996 106,250 125,000 4,500 -0- 45,000 -0-
President 1995 106,250 143,750(1) 16,000 -0- 50,000 -0-
Steven C. Oden 1997 100,000 30,000 3,310 -0- -0- -0-
Vice President, 1996 62,565 32,500 -0- -0- 40,000 -0-
Sales & Marketing 1995 N/A N/A N/A N/A N/A N/A
</TABLE>
________________
(1) Represents a cash bonus in the amount of $50,000 paid to each of Mr. Hood
and Mr. Young and the fair market value at the date of award ($.625 per
share) of 150,000 shares of Common Stock awarded to each of Mr. Hood and
Mr. Young.
(2) Other annual compensation represents, in 1997 and 1996, Company
contributions on behalf of each of the individuals to the Company's 401(k)
Plan, and, in 1996, 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 $50,000 or 10% of the total amount of annual salary and bonus.
-10-
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
No stock options were granted by the Company to any of the named executive
officers during the year ended December 31, 1997.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
There were no stock options exercised by the named executive officers
during the year ended December 31, 1997. The following table sets forth
information regarding the value of unexercised stock options held by each of the
named executive officers as of the year ended December 31, 1997.
<TABLE>
<CAPTION>
Number of Shares of Common Value of Unexercised
Stock Underlying Unexercised In-The-Money Options at
Options at December 31, 1997(#) December 31, 1997($)(1)
------------------------------- --------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- - ----------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Charles H. Hood 190,000 -0- $290,000 $ -0-
Gary W. Young 240,000 -0- $374,375 $ -0-
Steven C. Oden 40,000 -0- $ 10,000 $ -0-
</TABLE>
- - ------------
(1) Calculated by determining the difference between the fair market value of
the Company's Common Stock as of December 31, 1997 ($2.0625 per share based
on the last sales price on such date), and the exercise price of the
underlying options.
CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS
In April 1997, the Company entered into an agreement with J Larre Barrett,
a director of the Company, whereby Mr. Barrett agreed to serve as a sales
representative to solicit advertising for the Shoppers Calculators from certain
potential advertisers in consideration for a monthly retainer of $6,250. During
1997, the Company paid Mr. Barrett $56,250 pursuant to the agreement. The
Company believes the terms of the agreement are no less favorable to the Company
than if the Company had to secure the same services from a third party having
the same or similar business experience and qualifications as Mr. Barrett.
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 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 1997.
-11-
<PAGE>
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 1997, 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) Steven
C. Oden filed late an initial ownership report upon becoming an executive
officer of the Company, and (b) John W. Condon filed late two reports, one
report with respect to three transactions each involving the sale of shares of
Common Stock and one report with respect to one transaction involving the sale
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 1999
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, 1998, to be considered for
inclusion in the Company's proxy statement and accompanying proxy for that
meeting.
By Order of the Board of Directors.
Lynnwood R. Moore, Jr.
Secretary
April 28, 1998
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 24, 1998, at the Annual Meeting of Stockholders of the Company to be
held on May 28, 1998, 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
Steven C. Oden Stephen G. Smith 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 ADDvantage Media Group, Inc. 1998 Incentive 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,
LLP 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: , 1998
------------------------------
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.
