<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 Section240.14a-11(c) or
Section240.14a-12
AMERICAN CINEMASTORES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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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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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
AMERICAN CINEMASTORES INC.
2300 SOUTH EASTERN AVENUE
COMMERCE, CALIFORNIA 90040
October 14, 1997
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held on Thursday, November 6, 1997 at 10:00 a.m. at the Loews Santa Monica
Hotel, 1700 Ocean Avenue, Santa Monica, California 90401.
The Notice of Annual Meeting and Proxy Statement which follow describe the
business to be conducted at the meeting.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted. After reading the enclosed Notice of
Annual Meeting and Proxy Statement, I urge you to promptly complete, sign, date
and return the enclosed proxy card in the envelope provided. If your address on
the accompanying material is incorrect, please advise our Transfer Agent,
Continental Stock Transfer & Trust Company, in writing, at 2 Broadway, New York,
New York 10004.
Your vote is very important, and we will appreciate a prompt return of your
signed Proxy card. We hope to see you at the meeting.
Cordially,
[/S/ KATHRYN VAN NESS]
Kathryn Van Ness,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
AMERICAN CINEMASTORES INC.
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, NOVEMBER 6, 1997
------------------------
To the Shareholders of
AMERICAN CINEMASTORES INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of American
CinemaStores Inc. (the "Company") will be held on Thursday, November 6, 1997 at
10:00 a.m. at the Loews Santa Monica Hotel, 1700 Ocean Avenue, Santa Monica,
California 90401 for the following purposes:
1. To elect four (4) directors to hold office until the next Annual Meeting
of Shareholders and until their respective successors have been duly
elected and qualified;
2. To approve an amendment to the Company's Certificate of Incorporation
changing the name of the Company to "Apparel Technologies, Inc.;" and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only shareholders of record at the close of business on October 3, 1997 are
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
By order of the Board of Directors
[/S/ KATHRYN VAN NESS]
Kathryn Van Ness,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
October 14, 1997
All shareholders are cordially invited to attend the meeting in person.
Whether or not you expect to attend the meeting, PLEASE COMPLETE AND SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. The giving of
your Proxy will not affect your right to vote in person should you later decide
to attend the meeting.
<PAGE>
AMERICAN CINEMASTORES INC.
2300 SOUTH EASTERN AVENUE
COMMERCE, CALIFORNIA 90040
(213) 725-4955
------------------------
PROXY STATEMENT
------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of American CinemaStores Inc. (the "Company")
for the Annual Meeting of Shareholders to be held on November 6, 1997 (the
"Annual Meeting") and any postponements or adjournments thereof. Any shareholder
giving a Proxy may revoke it before or at the meeting by providing a proxy
bearing a later date or by attending the meeting and expressing a desire to vote
in person. All proxies will be voted as directed by the shareholder on the Proxy
card; and, if no choice is specified, they will be voted (1) "FOR" the four
directors nominated by the Board of Directors, (2) "FOR" the proposed amendment
to the Company's Certificate of Incorporation changing the name of the
corporation to Apparel Technologies, Inc., and in the discretion of the persons
acting as Proxies, for any other matters.
Your cooperation in promptly returning the enclosed proxy will reduce the
Company's expenses and enable its management and employees to continue their
normal duties for your benefit with minimum interruption for follow-up proxy
solicitation.
Only shareholders of record at the close of business on October 3, 1997 are
entitled to receive notice of and to vote at the meeting. On that date, the
Company had outstanding 18,001,387 shares of Common Stock. The shares of Common
Stock vote as a single class. Holders of shares of Common Stock on the record
date are entitled to vote one vote for each share held. The presence at the
Annual Meeting, either in person or by proxy, of the holders of a majority of
the shares of Common Stock issued, outstanding and entitled to vote is necessary
to constitute a quorum for the transaction of business.
This Proxy Statement and the accompanying Notice of Annual Meeting and form
of Proxy are being mailed or delivered to shareholders on or about October 14,
1997.
In the event that sufficient votes in favor of the proposals are not
received by the date of the Annual Meeting, the persons named as proxies may
propose one or more adjournments of the Annual Meeting to permit further
solicitations of proxies. Any such adjournment will require the affirmative vote
of the holders of a majority of the shares of Common Stock present in person or
by proxy at the Annual Meeting. The persons named as proxies will vote in favor
of such adjournment or adjournments.
The cost of preparing, assembling, printing, and mailing the materials, the
Notice and the enclosed form of Proxy, as well as the cost of soliciting proxies
relating to the Annual Meeting, will be borne by the Company. The Company will
request banks, brokers, dealers, and voting trustees or other nominees to
forward solicitation materials to their customers who are beneficial owners of
shares, and will reimburse them for the reasonable out-of-pocket expenses of
such solicitations. The original solicitation of proxies by mail may be
supplemented by telephone, telegram, personal solicitation or other means by
officers and other regular employees or agents of the Company, but no additional
compensation will be paid to such individuals on account of such activities.
PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT AT AN EARLY DATE IN
THE ENCLOSED POSTAGE PREPAID RETURN ENVELOPE SO THAT, IF YOU ARE UNABLE TO
ATTEND THE ANNUAL MEETING, YOUR SHARES MAY BE VOTED.
1
<PAGE>
PROPOSAL NO. 1
ELECTION OF FOUR NOMINEES FOR DIRECTOR
NOMINEES AND VOTING
The Bylaws of the Company currently provide for a board of four directors.
Consequently, at the Annual Meeting four directors will be elected to serve
until the next Annual Meeting and until their successors are elected and
qualified. Proxies may not be voted for more than four persons. The Company has
nominated for election as directors the four persons named below. Each of these
nominees have indicated that they are able and willing to serve as directors.
Unless otherwise instructed, the Company's Proxy holders intend to vote the
shares of Common Stock represented by the Proxies in favor of the election of
these nominees. If for any reason any of these nominees will be unable or
unwilling to serve, the shares represented by the enclosed Proxy will be voted
for the election of the balance of those named and such other person or persons
as the board of Directors may recommend. The Board of Directors has no reason to
believe that any such nominee will be unable or unwilling to serve. Directors
are elected by a plurality of the votes cast.
The Company's nominees and directors are listed below, together with their
ages, offices with the Company and year in which each became a director of the
Company.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR"
THE ELECTION OF THE FOUR NOMINEES FOR DIRECTOR.
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION SINCE
- ------------------------------------------------ ----------- ------------------------------------------ -------------
<S> <C> <C> <C>
Kathryn Van Ness................................ 47 Chairman of the Board, Chief June 1997
Executive Officer and President
William P. Conlin............................... 64 Nominee
Samuel S. Guzik................................. 45 Nominee
C. Douglas Plank................................ 40 Nominee
</TABLE>
BUSINESS EXPERIENCE OF DIRECTORS AND NOMINEES DURING THE PAST FIVE YEARS
MS. KATHRYN VAN NESS was appointed as Chief Executive Officer and President
of the Company in June, 1997. Ms. Van Ness was previously with Authentic Fitness
Corporation (NYSE:ASM) where she served as President of the designer Speedo
swimwear and activewear wholesale apparel divisions whose major brands include:
Speedo, Anne Cole, Catalina, Cole of California, and Oscar de la Renta swimwear.
Ms. Van Ness has also held various other positions, including General
Manager/Vice President of Jantzen, Inc., a mens and womens swimwear/activewear
company which is part of V.F. Corporation (NYSE:VFC) and also President of White
Stag Sportswear, a Warnaco (NYSE:WAC) division. Ms. Van Ness also has an
extensive retail background, having spent over 15 years in various merchandising
and marketing positions for Federated Department Stores (NYSE:FED). Ms. Van Ness
served on the Board as President of the Princeton Ethics Committee Woodrow
Wilson School at Princeton University and is a member of the Young Presidents
Organization.
WILLIAM P. CONLIN is a retired president and chief executive officer of
CalComp Incorporated where he served in that position for 10 years until 1996.
CalComp is a premier computer graphic and computer distribution company. Prior
to joining CalComp, Mr. Conlin spent 23 years with Burroughs Corporation (now
UNISYS). While with Burroughs, he held a variety of marketing and general
management positions, including General Manager, National Accounts Region;
President, International Group; Senior Vice President, Corporate Product
Management; and President, Industry Systems Group. Mr. Conlin currently serves
on the Board of Directors as Lead Director of Structural Dynamics Research
Corporation, a mechanical design automation software and engineering services
company. Mr. Conlin also serves on the Board of Directors of Syntellect, Inc., a
publicly traded interactive communications company and has
2
<PAGE>
previously served on other boards for companies including: Ampad Corporation,
Archive Corporation, Micom Corporation and MAJ Systems. Mr. Conlin has been
listed in Who's Who in America since 1990 and is highly active in various
community and industry volunteer positions such as University of California
Irvine Foundation Board, the UCI Chancellor's Committee and Trustee of the World
Affairs Council of Orange County. In addition, Mr. Conlin has held a variety of
volunteer positions on the Board of the Orange County Council, Boy Scouts of
America, and Southern California Technology Executives Network, among numerous
other roles. Mr. Conlin received his BBA from the University of Massachusetts
and his MBA in Finance from the University of California in Berkeley.
SAMUEL S. GUZIK is a corporate and securities attorney practicing for over
19 years. Mr. Guzik is the founder and principal of Guzik & Associates, a Los
Angeles, California law practice concentrating in general business, corporate
finance, corporate securities transactions and securities litigation.
Organizations represented by Mr. Guzik range from entrepreneurs and closely held
companies to larger publicly traded companies. He has represented clients in a
variety of transactions, including private placements, SEC registrations,
initial and secondary public offerings, mergers and acquisitions, and
reorganizations. Mr. Guzik serves on the Board of Directors for Lakeside Health
Services and on the Boards of other private companies. Prior to forming Guzik &
Associates, he was a Partner with the law firm of Ervin, Cohen and Jessup in
Beverly Hills, California, where he had a similar practice including mergers and
acquisitions, venture capital and general business transactions for more than
ten years. Prior thereto, Mr. Guzik was an Associate Attorney at Willkie Farr &
Gallagher in New York City, New York. Mr. Guzik received his B.S. in Industrial
and Labor Relations at Cornell University and his J.D. Law Degree at Stanford
University. He is a member of the California and New York Bar.
C. DOUGLAS PLANK is Assistant Vice Chancellor for Pepperdine University,
Malibu, California and has served in that capacity since 1993. He is the Senior
Development Officer for the University's $300 million "Challenged to Lead"
capital campaign. Mr. Plank also developed and coordinated the Seaver College
Board and served as the Director of Alumni Relations responsible for both the
Annual Giving and University Capital Campaigns. Prior to this role he served as
Associate Dean and Director of Admissions at Pepperdine. Mr. Plank was
co-founder and Director for two non-profit charitable corporations, Project Drug
Free, an educational awareness and community prevention and GI-Gift Pac, a
nationwide program providing care packages for Gulf War soldiers. Previous
experience includes co-founding Terracom, Inc., Torrance, California, a medical
management software solutions company serving physicians, medical groups,
clinics and hospitals. Mr. Plank is on the Executive Board, Western Los Angeles
Council, Boy Scouts of America and the Executive Committee, Seaver College Board
of Visitors. Mr. Plank received his BA Organizational Communications from
Pepperdine University.
During the fiscal year ended May 31, 1997, the Board of Directors acted on
three occasions at meetings attended by all of the directors, either in person
or by telephone, or by unanimous written consent in lieu of a meeting. The
Company does not presently have any standing committees of the Board of
Directors. However, it intends to constitute an Audit Committee and a
Compensation Committee following the Annual Meeting of Shareholders.
3
<PAGE>
MANAGEMENT
Listed below are key employees of the Company who are not directors or
nominees.
SUSAN WEINSTOCK, 35, was appointed as Vice President of Susan Burrowes, Ltd,
a subsidiary of the Company, in June, 1997, immediately following its
acquisition by the Company. Ms. Weinstock served in various executive positions
at Susan Burrowes, Ltd. prior to its acquisition by the Company. Ms. Weinstock
has extensive experience in all aspects of the apparel business including sales,
management, manufacturing and administration.
CHRISTOPHER D. KELLY, 50, has served as President of Sierra Fixture and
Design, Inc., a subsidiary of the Company, since its formation in 1995. From
1987 to February 1995, Mr. Kelly served as a Vice-President of Mesa Verde
Fixture and Design, Inc., a shopping mall fixture and design manufacturing
company, which he co-founded. From 1969 to 1986, Mr. Kelly owned and operated
Rax Unlimited, a manufacturer of mall and retail store fixtures. Mr. Kelly
received a bachelor's degree in advertising and an MBA degree from Woodbury
University.
WILLIAM GRIER, 50, has served as the President of The Digital Group, Inc.
("The Digital Group") since its acquisition by the Company in September 1997.
Mr. Grier has more thn 25 years of experience in the digital printing industry,
including executive management, cross-functional product develpment, marketing
and research. From 1994 to 1997 he served as Chief Executive Officer of CACTUS,
which developed the first application laboratory for digital printing and
introduced the first commercial fabric digital printing system. From 1990 to
1994 he served as the Product Manager for CalComp, a division of Lockheed, where
he headed the team that developed wide format printing and film imaging
equipment and software. He also headed a multi-corporation development team to
manufacture the first chemical free image setter film and printing unit. From
1989 to 1990 he served as President of Retail Merchandising Group, where he
designed and managed a benchmark study by Procter & Gamble that proved the
retail value of account specific digital printing as a product mover.
WALTER WILHELM, 58, has served as the Executive Vice President of The
Digital Group since its acquisition by the Company in September 1997. Mr.
Wilhelm is an experts in the application of Quick Response (QR) in the apparel
and footwear industries and has experience in startup operations and the
marketing of high tech digital apparel production equipment in both domestic and
international markets. From 1995 to 1997 he was a partner at Wilhelm and Leslie
Consulting, a systems and management consulting firm, primarily for sewn goods.
Products which were successfully introduced to the footwear, apparel and retail
industries included networked PC technology, numerically controlled (NC)
cutting, CAD and CAM products to streamline design and manufacturing at all
levels. Mr. Wilhelm also obtained broad technology experience at Microdynamics,
Inc., where he served as a Senior Vice President and Director from 1980 to 1995.
While at Microdynamics he developed and managed the marketing strategies making
Microdynamics the innovator and leader in CAD and CAM applications for the
textile and apparel industry. Prior to serving at Microdynamics, Mr. Wilhelm was
General Manager, Industrial Automation Systems, at Hughes Aircraft Company.
While at Hughes he adapted and sold the Hughes AM-1 CAD System and a range of
lasercutters to the apparel and footwear industries.
ROGER WILSON, 59, has served as the Executive Vice President of The Digital
Group since its acquisition by the Company in September 1997. Prior to joining
the Digital Group, he was the Chairman and CEO of Bula, Inc., from 1995 to 1997,
and was its Vice Chairman since 1993. Bula is best known for its global ski
accessories and ski headwear. Between 1992 and 1995 Mr. Wilson was General
Manager of AAAMP Systems Marketing, a consortium of technology companies
dedicated to developing vertical digital manufacturing and printing for the
apparel industry. Between 1980 and 1992 Mr. Wilson served as Vice President of
Corporate Affairs for H.H. Cutler Company, now a division of V.F. Corporation.
He has served as a member of the Board of Directors of the American Apparel
Manufacturers Association (AAMA) and as Chairman of the International Committee
as well as being a former Senior Consultant for Kurt Salmon Associates.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table discloses for the fiscal years ended May 31, 1997, 1996
and 1995, compensation for Gill Champion, former Chairman of the Board and Chief
Executive Officer, and Steve Natale, former President and Chief Operating
Officer, the only other executive officer whose annual compensation exceeded
$100,000 during the fiscal year ended May 31, 1997. Messrs. Champion and Natale
(the "Named Executives") received no additional compensation for serving on the
Board of Directors.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------------- -------------------
OTHER ANNUAL SECURITIES
FISCAL COMPENSATION UNDERLYING OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY ($) (1)($) (#)
- ------------------------------------ ---- ---------- ------------ -------------------
<S> <C> <C> <C> <C>
Gill Champion,...................... 1997 126,875 7,657 --
Former Chief Executive Officer and 1996 126,875 7,657 --
Chairman of the Board(2) 1995 125,000 7,657 --
Steve Natale,....................... 1997 101,500 8,800 140,000
Former President, and 1996 100,000 5,796 --
Chief Operating Officer(3) 1995 100,000 5,796 --
</TABLE>
- ------------------------
(1) The amount reported in this column represents the annual amount paid as an
allowance for leasing and insuring an automobile for the Named Executives
and for reimbursement of automobile costs.
(2) Mr. Champion ceased to be an officer of the Company in June 1996.
(3) Mr. Natale ceased to be an officer of the Company in June 1997.
The following table sets forth information with respect to stock options
held by the Named Executives at May 31, 1997. No stock options were granted by
the Company to, or were exercised by, the Named Executives during such fiscal
year.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT MAY 31, 1997 AT MAY 31, 1997(1)
------------------------ ------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Steve Natale............... 140,000(2) -0- -0- -0-
</TABLE>
- ------------------------
(1) Options are "in-the-money" if the fair market value of a share of Common
Stock exceeds the exercise prices of such options. No options were
"in-the-money" at May 31, 1997.
(2) Incentive stock options granted under the Company's 1993 Stock Option Plan,
as amended, which became exercisable after one year from the date of grant,
and expired on July 15, 1997, 30 days after the termination of Mr. Natale's
employment with the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EMPLOYMENT AGREEMENT WITH KATHRYN VAN NESS
The Company entered into an employment agreement with Kathryn Van Ness,
effective June 1997, providing for her employment as President and Chief
Executive Officer of the Company for a term of not less than three years. Under
the terms of her Employment Agreement, Ms. Van Ness is entitled to a base
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salary of $200,000 per year for each year of the contract term and an additional
annual performance bonus if the Company meets or exceeds mutually agreed
performance criteria based upon the annual net income of the Company. If the
performance criteria is met in a fiscal year Ms. Van Ness will be paid a bonus
of $200,000; if the performance criteria is exceeded, then Ms. Van Ness is
entitled to additional bonus based upon the amount by which the performance is
exceeded.
The Employment Agreement provides for the grant of 1,500,000 shares of
Common Stock, of which 500,000 shares vest in June 1998, June 1999 and June
2000. The Employment Agreement also grants 750,000 stock options to Ms. Van Ness
at an exercise price of $.25 per share, which vests in three 250,000 share
installments in June 1998, June 1999 and June 2000.
The Company is entitled to terminate Ms. Van Ness' employment for "good
cause", and Ms. Van Ness is entitled to terminate her employment with the
Company for "good reason," in either case in accordance with the criteria set
forth in the Employment Agreement. If Ms. Van Ness' employment is terminated
other than for good cause, she is entitled to receive salary and bonus through
the end of the initial three year term and any unvested portion of her 750,000
share stock grant and 1,500,000 stock options. The Employment Agreement allows
Ms. Van Ness to terminate her employment for good cause if at any time a
majority of the Board of Directors has been appointed without her approval. Ms.
Van Ness has also entered into an agreement with First Fidelity Capital, Inc.
regarding election of directors of the Company. See "Change in Control" herein.
EMPLOYMENT TERMINATION AGREEMENTS
STEVE NATALE. The Company's former President, Steve Natale, was employed
under a two year employment agreement which expired in March 1999. Under such
agreement, Mr. Natale received base compensation at the annual rate of $125,000
as well as an automobile and life insurance. In June 1997, Mr. Natale resigned
as an officer and a director of the Company and entered into a severance
agreement with the Company whereby the Company agreed to pay 10.5 months of
severance consideration on his contract, totalling $110,000, in lieu of benefits
under the employment agreement.
CHRISTOPHER J. EBERT. The Company's former Chief Financial Officer,
Christopher Ebert, was employed under a two year employment agreement which
originally expired in March 1999. Under such agreement, Mr. Ebert received base
compensation at the annual rate of $110,000, as well as perquisites including
the use of an automobile and life insurance. In September 1997 the Company and
Mr. Ebert entered into a severance agreement providing for the termination of
his employment effective October 1997, and the payment to Mr. Ebert of $75,000,
payable in monthly installments between October 1997 and May 1998. The severance
agreement further provides that the installment payments cease if Mr. Ebert
obtains full time employment effective January 1998. In addition, under the
terms of the severance agreement Mr. Ebert will receive 100,000 shares of the
Company's stock for $.06 per share and is relinquishing his right under a June
1997 agreement to receive an additional 150,000 shares at $.06 per share. Under
the June 1997 agreement, Mr. Ebert was entitled to receive 250,000 shares of
Common Stock at $.06 per share in exchange for the surrender of 250,000
incentive stock options previously granted to Mr. Ebert.
GIL CHAMPION. In June 1996 Gill Champion agreed to resign as director,
Chairman of the Board and Chief Executive Officer of the Company. The Company
agreed to pay Mr. Champion his total unpaid salary and employment benefits under
his employment agreement through March 15, 1997, totalling approximately
$115,000, and the final payment was made in September 1997.
DIRECTOR COMPENSATION
Directors receive no cash compensation for serving on the Board. However,
non-employee directors are eligible to be granted non-statutory stock options
under the Company's 1993 Stock Option Plan, as amended. Nonstatutory stock
options may be granted for up to 10 years from the date of grant at such
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<PAGE>
exercise prices as the Board of Directors may determine. There are no
non-employee directors currently serving on the Board of Directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 22, 1997,
with respect to beneficial ownership of the Company's Common Stock by (i) each
person known by the Company to be a beneficial owner of more than 5% of the
outstanding shares of Common Stock; (ii) directors and nominees, (iii) the Named
Executives, and (iv) all directors and executive officers as a group. Except for
The Monument Trust Company, which disclaims beneficial ownership of the shares
held of record by it, the Company believes that all of the persons named in the
above table have sole voting and investment power with respect to all shares of
Common Stock beneficially owned by them.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF % OF BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OWNERSHIP
- ------------------------------------------------------- -------------------- -----------------
<S> <C> <C>
The Monument Trust Company(1).......................... 4,333,333 24.1
Steve Natale(2)........................................ 972,324 5.4
Kathryn Van Ness(3).................................... (4) --
William P. Conlin...................................... -- --
Samuel S. Guzik........................................ -- --
C. Douglas Plank....................................... -- --
All executive officers and directors as a group (two
persons)............................................. 100,000(4) (5)
</TABLE>
- ------------------------
(1) The address for The Monument Trust Company ("MTC") is c/o The Investors
Union Trust, 14 New Street, St. Peter Port, Guernsey 641 4LE, Channel
Islands. The Monument Trust Company is the record owner, and disclaims
beneficial ownership of these shares. These shares were acquired by MTC in
June 1997 upon the conversion of a $200,000 Convertible Note issued to MTC
in a Regulation S private placement in April 1997. The Note provided for a
conversion price of the lesser of the bid price of the Common Stock on the
date of issuance of the Note or 60% of the bid price on the date of
conversion. The Note was fully converted under this agreement in June 1997
at a conversion price of $.0375, which was 60% of the closing bid price on
the date of conversion.
(2) The address for Mr. Natale is 115 Hurricane Street, Marina Del Rey,
California 90292.
(3) The address for Ms. Van Ness is 2300 South Eastern Avenue, Commerce,
California 90040.
(4) Does not include 1,500,000 shares of Common Stock and options to purchase
750,000 shares at $.25 per share, which shares and options vest in three
equal installments in June 1998, 1999 and 2000. See "Certain Relationships
and Related Transactions."
(5) Less than one percent.
AGREEMENTS REGARDING CHANGE IN CONTROL
AGREEMENT WITH FIRST FIDELITY CAPITAL, INC. AND STEVE NATALE In April 1997
the Company and Steve Natale entered into an agreement with First Fidelity
Capital, Inc. ("FFC") to represent the Company on an exclusive basis for five
years in connection with financing transactions and strategic acquisitions for
the Company. The agreement provides that FFC is entitled to nominate a majority
of the Company's Board of Directors, at FFC's option, during the term of the
agreement, so long as such nominees are reasonably satisfactory to the Company.
The agreement, as amended, further provides that so long as Mr. Natale owns
Common Stock, he will vote his shares in favor of FFC nominees until October
2002. FFC has not exercised its rights under this agreement to nominate any
directors, and none of the Company's nominees have been nominated pursuant to
this agreement. The agreement was amended in September 1997 to
7
<PAGE>
provide that effective November 1, 1997, until October 1999, Mr. Natale will not
sell more than 70,000 shares of Common Stock in any two month period.
AGREEMENT WITH FFC AND KATHRYN VAN NESS. FFC and Ms. Van Ness entered into
an agreement effective June 1997, in connection with Ms. Van Ness' employment by
the Company. In this agreement FFC agreed to use its best efforts to cause Ms.
Van Ness to be nominated to serve as a Director of the Company during the term
of her employment by the Company and to consult with Ms. Van Ness during the
term of her employment with a view toward reaching a mutual agreement on
nominees to the Board of Directors.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and beneficial
owners of more than ten percent of the Common Stock, to file with the Securities
and Exchange Commission and the National Association of Securities Dealers, Inc.
reports of ownership and changes in ownership of the Common Stock. Copies of
such reports are required to be furnished to the Company. Based solely on its
review of the copies of such reports furnished to the Company, or written
representations that no reports were required, the Company believes that during
its fiscal year ended May 31, 1997, all filing requirements applicable to its
officers, directors, and ten percent beneficial owners were satisfied.
The Board of Directors of the Company recommends that the Shareholders vote
"FOR" election of the four nominees for director.
PROPOSAL NO. 2
PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION TO CHANGE THE NAME OF THE CORPORATION TO
APPAREL TECHNOLOGIES, INC.
Effective September 10, 1997, the Board of Directors adopted resolutions
approving an amendment to the Company's Certificate of Incorporation to change
the name of the corporation to "Apparel Technologies, Inc." (the "Amendment"),
and directing that the Amendment be presented to the Shareholders for approval
at the Company's Annual Meeting. The Amendment to the Certificate of
Incorporation is set forth as follows:
<TABLE>
<S> <C>
"FIRST: The name of the corporation is:
Apparel Technologies, Inc."
</TABLE>
Effective September 15, 1997, the Company began operating under the
fictitious trade name of "Apparel Technologies, Inc," pending shareholder
approval of the Amendment to the Company's Certificate of Incorporation to
change the formal legal name of the corporation. The change in the Company's
name reflects the refocusing of the Company's business to a technology oriented
apparel company, as recently evidenced by the Company's acquisition of The
Digital Group, in September 1997. The Digital Group has patent applications
pending for a proprietary system of digital printing for fabrics.
The affirmative vote of the holders of shares representing a majority of the
outstanding shares on the record date is required to authorize the Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE PROPOSED
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION.
8
<PAGE>
MISCELLANEOUS
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
BDO Seidman has audited and reported upon the financial statements of the
Company for the fiscal year ended May 31, 1997 and has been selected to serve as
the Company's independent auditors for the fiscal year ending May 31, 1998. A
representative of BDO Seidman is expected to be present at the Annual Meeting
with the opportunity to make a statement if he or she desires to do so and is
expected to be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Shareholder proposals complying with the applicable rules under the
Securities Exchange Act of 1934 intended to be presented at the 1998 Annual
Meeting of Shareholders must be received at the offices of the Company by August
15, 1998 to be considered by the Company for inclusion in the Company's proxy
statement and form of proxy relating to that meeting. Such proposals should be
directed to the attention of the Corporate Secretary, Apparel Technologies,
Inc., 2300 South Eastern Avenue, Commerce, California 90040.
OTHER MATTERS
Neither the Company no any of the persons named as proxies knows of matters
other than those above stated to be voted on at the Annual Meeting. However, if
any other matters are properly presented at the meeting, it is the intention of
the persons named as proxies to vote in accordance with their judgment on such
matters, subject to direction by the Board of Directors.
The 1997 Annual Report to Shareholders accompanies this Proxy Statement, but
is not to be deemed a part of the proxy soliciting material.
WHILE YOU HAVE THE MATTER IN MIND, PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED
PROXY CARD PROMPTLY.
9
<PAGE>
AMERICAN CINEMASTORES INC.
2300 SOUTH EASTERN AVENUE
COMMERCE, CALIFORNIA 90040
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 6, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Kathryn Van Ness and Samuel S. Guzik, and
each of them, Proxies, with full power of substitution in each of them, Proxies,
with full power of substitution in each of them, in the name, place and stead of
the undersigned, to vote at the Annual Meeting of Stockholders of American
CinemaStores, Inc. on Thursday, November 6, 1997, at 10:00 a.m. at the Loews
Santa Monica Hotel, 1700 Ocean Avenue, Santa Monica, California 90401 or at any
adjournment or adjournments thereof, according to the number of votes that the
undersigned would be entitled to vote if personally present, upon the following
matters:
1. ELECTION OF DIRECTORS:
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY BELOW). TO VOTE FOR ALL NOMINEES
LISTED BELOW.
Kathryn Van Ness, William P. Conlin, Samuel S. Guzik, C. Douglas Plank
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THE NOMINEE'S NAME IN THE SPACE BELOW.)
(CONTINUED ON THE REVERSE SIDE)
<PAGE>
2. PROPOSED AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO CHANGE
THE NAME OF THE CORPORATION TO APPAREL TECHNOLOGIES, INC.
/ / FOR / / AGAINST / / ABSTAIN
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ABOVE. IF NO
INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THOSE NOMINEES AND THE
PROPOSALS LISTED ABOVE.
DATED: _____________________, 1997
Please sign exactly as name
appears hereon. When shares are
held by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee
or guardian, please give full
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.
__________________________________
Signature
__________________________________
Signature if held jointly
/ / PLAN / / DO NOT PLAN TO
ATTEND THE ANNUAL MEETING
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
