<PAGE> 1
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:
<TABLE>
<S> <C>
/X/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
AMERICAN TECHNOLOGY CORPORATION
- --------------------------------------------------------------------------------
(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> 2
AMERICAN TECHNOLOGY CORPORATION
12725 Stowe Drive
Poway, California 92064
(619) 679-2114
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held March 24, 1997
Notice is hereby given that the Annual Meeting of Shareholders of
AMERICAN TECHNOLOGY CORPORATION (the "Company") will be held on March 24, 1997
at 2:00 o'clock p.m. (Pacific Time) at the California Center for the Arts,
Center Theater, 340 North Escondido Boulevard, Escondido, California, for the
following purposes:
1. To consider and vote upon a proposal to ratify
management's selection of BDO Seidman, LLP as the
Company's independent auditors.
2. To amend the certificate of incorporation to
authorize 5,000,000 shares of preferred stock.
3. To elect the board of directors.
4. To transact such other business as may properly come
before the meeting.
The Board of Directors unanimously recommends that shareholders vote
FOR the approval of the foregoing proposals. Only holders of record of the
Company's common stock at the close of business on February 18, 1997 (Record
Date) are entitled to receive notice of and to vote at the Annual Meeting. The
stock transfer books of the Company will not be closed.
Shareholders are urged to attend the meeting in person. However, if you
are unable to attend and wish that your shares be voted, you are requested to
mark, sign, date and return the accompanying form of Proxy to the Company at the
address listed above.
By Order of the Board of Directors
Robert Putnam
President
February __, 1997
<PAGE> 3
AMERICAN TECHNOLOGY CORPORATION
12725 Stowe Drive
Poway, California 92064
619-679-2114
PROXY STATEMENT
This Proxy Statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of AMERICAN TECHNOLOGY
CORPORATION, a Delaware corporation (the "Company"), for use in connection with
an Annual Meeting of Shareholders of the Company (the "Annual Meeting"), to be
held on March 24, 1997 at the California Center for the Arts, Center Theater,
340 North Escondido Boulevard, Escondido, California, at 2:00 o'clock p.m.
(Pacific Time), and any and all postponements and adjournments thereof.
The Board of Directors has fixed the close of business on February 18,
1997 (the "Record Date") for determining shareholders entitled to notice of and
to vote at the Annual Meeting. As of the Record Date, the Company had _________
shares of common stock, $.00001 par value per share ("Common Stock" or "Common
Shares") outstanding and entitled to vote. A majority in interest of the common
shareholders on the Record Date must be present, in person or by proxy, at the
Annual Meeting in order to constitute a quorum. Each share of Common Stock will
carry one vote on the proposals described below, as well as on any other matters
which may properly come before the Annual Meeting. The affirmative vote of a
majority of the votes cast by the holders of Common Shares at the Annual Meeting
is necessary to approve the proposals included in this Proxy Statement.
Abstentions and broker non-votes will be counted for purposes of determining the
presence or absence of a quorum for the transaction of business, but will not be
counted for purposes of determining whether a proposal has been approved or
ratified.
All valid proxies received in time for the Annual Meeting will be voted
as specified thereon. Unless otherwise indicated, the shares represented by
properly executed proxies will be voted FOR the proposals described below.
Shareholders who execute proxies may revoke them at any time before they are
exercisable by delivering a written notice of revocation to Mr. Richard M.
Wagner, Secretary of the Company, at the above address, or by submitting a duly
executed proxy bearing a later date, or by attending the Annual Meeting and
orally withdrawing the proxy. Attendance at the Annual Meeting will not in
itself revoke a proxy. It is anticipated that this Proxy Statement and form of
proxy will be mailed to shareholders on or about February 20, 1997. The
Company's telephone number is (619) 679-2114.
AVAILABLE INFORMATION
The Company is subject to the informational and reporting requirements
of Section 13 of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), and in accordance with those requirements files reports and other
information with the Securities and Exchange Commission ("SEC"). Such reports
and other information filed with the SEC are available for inspection and
copying at the Public Reference Branch of the SEC, located at Room 1024, 450
Fifth Street N.W., Washington, DC 20549, at prescribed rates.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of the Record Date, the stock
ownership of each executive officer and director of the Company, each director
nominee, of all officers and directors of the Company as a group, and of each
person known by the Company to be a beneficial owner of 5% or more of its Common
Stock. Except as otherwise noted, each person listed below is the sole
beneficial owner of the shares and has sole investment and voting power as to
such shares. No person listed below has any option, warrant or other right to
acquire additional securities of the Company, except as otherwise noted.
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<PAGE> 4
<TABLE>
<CAPTION>
Amount & Nature
Class of Name and Address of of Beneficial Percent
Security Beneficial Owner Ownership of Stock Owned
-------- ---------------- --------- --------------
<S> <C> <C> <C>
Common Stock, Elwood G. Norris 3,281,475 (1) 33.7%
par value 12725 Stowe Drive
$.00001 Poway, CA 92064
SAME Robert Putnam 620,000 (2) 6.7%
12725 Stowe Drive
Poway, CA 92064
SAME Richard M. Wagner 40,000 (3) 0.4%
12725 Stowe Drive
Poway, CA 92064
SAME Joel A. Barker None -
12725 Stowe Drive
Poway, CA 92064
All Directors and Executive Officers
as a group (3 persons) 3,941,475 (4) 39.5%
</TABLE>
(1) Includes 630,000 Common Shares issuable upon the exercise of
outstanding stock options and 100,000 Common Shares issuable upon the
exercise of outstanding stock purchase warrants.
(2) Includes 200,000 Common Shares issuable upon the exercise of
outstanding stock options.
(3) Includes 23,000 Common Shares issuable upon the exercise of outstanding
stock options.
(4) Includes 853,000 Common Shares issuable upon the exercise of
outstanding stock options and 100,000 Common Shares issuable upon the
exercise of outstanding stock purchase warrants. For purposes of this
computation the number of outstanding shares is increased to include
the 953,000 shares issuable upon the exercise of stock options and
warrants.
CHANGES IN CONTROL
No arrangements are known to the Company, including any pledge by any
person of securities of the Company, the operation of which may at a subsequent
date result in a further change in control of the Company.
DESCRIPTION OF SECURITIES
COMMON STOCK
The authorized capital stock of the Company consists of 20,000,000
shares of common stock, $.00001 par value per share. There are no preferred
shares authorized. As of the Record Date, a total of ________ Common Shares were
outstanding. The holders of Common Stock are entitled to one vote for each share
held. The affirmative vote of a majority of votes cast at a meeting which
commences with a lawful quorum is sufficient for approval of most matters upon
which shareholders may or must vote, including the questions presented for
approval or ratification at the Annual Meeting. However, removal of a director
from office or repeal of the certificate of incorporation in its entirety
require the affirmative vote of a majority of the total voting power for
approval, and certain other matters (such as shareholder amendment of the
bylaws, and amendment, repeal or adoption of any provision inconsistent with
provisions in the certificate of incorporation regarding indemnification of
directors, officers and others, exclusion of director liability, and the
Company's election not to be governed by statutory provisions concerning
business combinations with interested shareholders) require the affirmative vote
of two-thirds of the total voting power for approval. Common Shares do not carry
cumulative voting rights, and holders of more than 50% of the Common Stock have
the power to elect all directors and, as a practical matter, to
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<PAGE> 5
control the Company. Holders of Common Stock are not entitled to preemptive
rights, and the Common Stock is not subject to redemption.
A special meeting of shareholders may be called by or at the request of
the Chairman of the Board, the President or a majority of the Board of Directors
or the Executive Committee, and at the request of persons owning in the
aggregate not less than 10% of the issued and outstanding Common Shares entitled
to vote in elections for directors. Holders of Common Stock are entitled to
receive, pro rata, dividends when and as declared by the Board of Directors out
of funds legally available therefor. Upon liquidation, dissolution or winding-up
of the Company, holders of Common Stock are entitled to share ratably in the
Company's assets legally available for distribution to its shareholders.
TRANSFER AGENT AND REGISTRAR
Interwest Transfer Company, Inc., 1981 East 4800 South, Suite 100, Salt
Lake City, Utah 84117, acts as transfer agent and registrar for the Common Stock
of the Company. Their telephone number is (801) 272-9294.
DIVIDEND POLICY
The Company has not paid any cash dividends to date, and no cash
dividends will be declared or paid on the Common Shares in the foreseeable
future. Payment of dividends is solely at the discretion of the Company's board
of directors.
MATTERS TO BE ACTED UPON
PROPOSAL NUMBER 1: APPOINTMENT OF BDO SEIDMAN, LLP AS INDEPENDENT AUDITORS AND
ACCOUNTANTS.
The firm of BDO Seidman, LLP, certified public accountants, served as
the Company's independent auditors and accountants for the fiscal years ended
September 30, 1995 and 1996, and has been appointed by the Board of Directors as
the Company's independent auditors and accountants for the fiscal year ending
September 30, 1997. During the period that BDO Seidman, LLP has served as the
Company's auditors, there were no disagreements on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of such
firm, would have caused it to make a reference to the subject matter of the
disagreements in connection with its report. A representative of BDO Seidman,
LLP is not expected to be present at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF THIS
PROPOSAL. The affirmative vote of a majority of the votes cast will be required
to approve this proposal.
PROPOSAL NUMBER 2: TO AUTHORIZE 5,000,000 SHARES OF PREFERRED STOCK.
The Company's certificate of incorporation, as amended to date, does
not authorize the issuance of shares of preferred stock. The Board of Directors
has approved an amendment to the certificate of incorporation which would
authorize the Company to issue a maximum of 5,000,000 shares of preferred stock,
$.00001 par value per share.
Pursuant to the proposed amendment, the Board of Directors of the
Company would have the power, without further action by the stockholders, to
divide any and all shares of the Preferred Stock into series and to fix and
determine the relative rights and preferences of the Preferred Stock, such as
the designation of series and the number of shares constituting such series,
dividend rights, redemption and sinking fund provisions, liquidation and
dissolution preferences, conversion or exchange rights and voting rights, if
any.
With respect to voting rights, if the Preferred Stock were permitted to
vote in the election of directors or on other matters, each such share would be
entitled to one vote, and such shares may vote with the shares of common stock
or may vote as a separate class. Issuances of Preferred Stock by the
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<PAGE> 6
Board of Directors could result in such shares having dividend and/or
liquidation preferences senior to the rights of the holders of common stock and
could dilute the voting rights of the holders of common stock.
The purpose for the authorization of the Preferred Stock is to allow
the Board of Directors the flexibility to tailor classes of equity securities to
particular transactions or needs as they may arise, without returning to the
stockholders for authorization in each such instance. Obtaining shareholder
approval for any matter is cumbersome, time-consuming (at least 60 days) and
quite expensive. Preferred Stock is often useful in acquisitions, business
combinations and financings. Neither management nor the Board of Directors has
any plan or intention to use the Preferred Stock as a defense tool in any
takeover of the Company should a takeover be threatened.
PROPOSAL NUMBER 3: ELECTION OF DIRECTORS.
The Company's bylaws provide for a board of three to seven directors as
the Board determines, and the Board of Directors has fixed the number of members
of the board at four. All directors are elected for one-year terms at the annual
meeting of shareholders. Directors are elected by plurality vote, meaning that
(should more than one nominee vie for the same seat on the Board) the nominee
who receives the most votes will be elected for the term nominated, even if he
receives less than a majority of the votes cast.
Robert Putnam, Elwood G. Norris and Richard M. Wagner were elected to
the Board at the 1994 annual meeting of shareholders. Messrs. Putnam, Norris,
Wagner, and Barker have all been nominated by the Board of Directors to stand
for election to the Board. If elected, they will each serve a one-year term or
until their respective successors have been elected and qualified.
UNLESS OTHERWISE SPECIFIED, ALL PROXIES RECEIVED WILL BE VOTED FOR THE
ELECTION OF ALL NOMINEES. IF ANY NOMINEE SHOULD NOT STAND FOR ELECTION FOR ANY
REASON, YOUR PROXY WILL BE VOTED FOR ANY PERSON OR PERSONS DESIGNATED BY THE
BOARD OF DIRECTORS TO REPLACE SUCH NOMINEE. The Board has no reason to expect
that any of the nominees will not stand for election or decline to serve if
elected. There is no arrangement between any of the directors, the nominees or
executive officers and any other person or persons, pursuant to which he was or
is to be selected as a director, nominee or executive officer. There is no blood
relationship between or among the nominees, directors or executive officers of
the Company.
The following table sets forth information, including the principal
occupation and business experience, concerning the nominees for the Board of
Directors (and the executive officers) of the Company:
<TABLE>
<CAPTION>
POSITIONS WITH THE COMPANY, PRINCIPAL OCCUPATIONS HAS BEEN A
NAME AGE AND OTHER DIRECTORSHIPS DIRECTOR SINCE
<S> <C> <C> <C>
Robert Putnam 38 DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER 1984
Mr. Putnam has been a director of the Company since 1984
and also served as Secretary/Treasurer until February 1994
when he was appointed President and CEO. Since 1988 he
has also served as Secretary of Norris Communications Inc.
(NCI), a public company engaged in electronic product
development, distribution and sales. Since 1989 he has also
served as Secretary/Treasurer and Director of Patriot
Scientific Corporation ("Patriot"). Patriot is a public company
engaged in the development of microprocessor technology,
digital modem products and radar and antenna engineering.
He received a B.A. degree in Mass Communication/Advertising
from Brigham Young University in 1983. Mr. Putnam devotes
approximately 70% of his time to the Company.
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C> <C>
Richard M. Wagner 51 DIRECTOR, SECRETARY 1986
Mr. Wagner has served as a director since 1986 and was
appointed Secretary in February 1994. Since 1980 he
has been a self-employed real estate broker and
agent. In 1986 he founded and has since operated The
Mortgage Company and Scripps Escrow Co. to provide
full-service real estate services. He received a
Masters of Science degree from San Diego State
University in 1974.
Elwood G. Norris 58 DIRECTOR 1980
Director since August 1980, Mr. Norris served as
President from August 1980 to February 1994. He
currently manages the Company's research and
development activities. He has been a director of NCI
since 1988 and has served as its Chief Technology
Officer from October 1995 to January 1997 when he was
appointed interim Chief Executive Officer. From 1988
to October 1995 he served as NCI President. Since
August 1989, he has served as director of Patriot and
served as Chairman and Chief Executive Officer until
June 1994. From June 1995 until June 1996 when he was
reappointed Chairman, Mr. Norris served as temporary
President and Chief Executive Officer of Patriot,
upon the illness and subsequent death of its
Chairman, President and Chief Executive Officer. He
is an electronics engineer and an inventor with over
20 U.S. patents primarily in the fields of electrical
and acoustical engineering. He is the inventor of the
Company's ear-radio, HyperSonic Sound and other
technologies. Mr. Norris devotes only part-time
services to the Company approximating 20-30 hours per
week.
Joel A. Barker 52 DIRECTOR NOMINEE n/a
Since 1978 Mr. Barker has been President of Infinity Limited,
Inc. engaged as a futurist in speaking, consulting, publishing
and video production popularizing the concept of paradigm
shifts, change and vision. He is the author of the two
successful books, Future Edge and Paradigms: The
Business of Discovering the Future. He is the author and
host of five futurist videos and is a frequent speaker and
consultant to major world corporations and government
agencies in North America, Europe and Asia. From 1975 to
1978 he was Director of the Futures Studies Department of
the Science Museum of Minnesota. Mr. Barker obtained a
B.S. in English Education from the University of Minnesota in
1966.
</TABLE>
No director, executive officer or nominee for the Board has been
involved in any legal proceedings during the past five years which are material
to an evaluation of his or her ability or integrity. There are no material
proceedings adverse to the Company to which any director, executive officer,
nominee for the Board or any affiliate of the Company, or any associate of such
persons, or any shareholders, is a party or has any material interest adverse to
the Company.
The Company does not have any standing audit, nominating or
compensation committees of the Board of Directors. During the fiscal year ended
September 30, 1996, no formal meetings of the Board of Directors were held,
however, the Board of Directors took action on nine occasions by means of
written consent in lieu of a meeting after informal discussions, as permitted by
law, each member of the Board
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<PAGE> 8
participated in those discussions, and the written consents to action were
unanimous. The Company currently does not provide the directors with any
compensation for their services as directors.
No director of the Company has resigned or declined to stand for
re-election to the Board of Directors because of disagreement with the Company
on any matters relating to the Company's operations, policies or practices,
since the date of the last meeting of shareholders.
CONFLICTS OF INTEREST
Certain conflicts of interest now exist and will continue to exist
between the Company and its officers and directors due to the fact that they
have other employment or business interests to which they devote some attention
and they are expected to continue to do so. The Company has not established
policies or procedures for the resolution of current or potential conflicts of
interest between the Company and its management or management-affiliated
entities. There can be no assurance that members of management will resolve all
conflicts of interest in the Company's favor. The officers and directors are
accountable to the Company as fiduciaries, which means that they are legally
obligated to exercise good faith and integrity in handling the Company's
affairs. Failure by them to conduct the Company's business in its best interests
may result in liability to them.
It is conceivable that the respective areas of interest of the Company,
Patriot and NCI could overlap or conflict. The Company believes that although
each of the three corporations are involved in the electronics industry, the
respective areas of focus, products and technology directions of the three
companies are sufficiently distinct such that no conflict in business lines or
executive loyalties will result. Because of this unlikelihood, no steps have
been taken to resolve possible conflicts, and any such conflicts, should they
arise, will be addressed at the appropriate time.
Officer and director Robert Putnam also acts as secretary of NCI and
Secretary and Treasurer of Patriot where he reports to the Board of Directors of
each, of which Mr. Norris is Chairman. The possibility exists that these other
relationships could affect Mr. Putnam's independence as a director of the
Company. The Company has not provided a method of resolving this conflict and
probably will not do so, partly due to inevitable extra expense and delay any
such measures would occasion. Mr. Norris and Mr. Putnam are obligated to perform
their duties in good faith and to act in the best interest of the Company and
its shareholders, and any failure on their part to do so may constitute a breach
of their fiduciary duties and expose them to damages and other liability under
applicable law. While the directors and officers are excluded from liability for
certain actions, their is no assurance that Mr. Norris or Mr. Putnam would be
excluded from liability or indemnified if they breached their loyalty to the
Company.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding compensation paid
to the Company's Chief Executive Officer during the last three fiscal years. The
CEO's total annual salary and bonus did not exceed $100,000, nor did that of any
other executive officer.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Restricted No. of ($)
Principal ($) ($) ($) Stock Options LTIP All Other($)
Position Year Salary Bonus Other Awards($) & SARs Payouts Compensation
-------- ---- ------ ----- ----- --------- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert Putnam, 1996 $73,109 None None None None None None
President and CEO 1995 $45,462 None None None None None None
1994 $26,000 None None None None None None
</TABLE>
Except for stock options, discussed below, no person received any form
of non-cash compensation from the Company in the fiscal year ended September 30,
1996 or currently receives any
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such compensation. The Company does not provide health, medical, life or
disability insurance benefits for any person.
The Company has no employment contracts with any executive officer or
other key person.
Shown below is further information on grants of stock options pursuant
to the Company's 1992 Stock Option Plans to the Named Officer reflected in the
Table below.
OPTION GRANTS TABLE FOR FISCAL YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Percent of Total
Number of Options Granted Exercise Expiration
Name Options Granted to Employees in Fiscal Year Price Date
---- --------------- --------------------------- ----- ----
<S> <C> <C> <C> <C>
Robert Putnam 200,000 30.6% $0.50 2/21/2001
</TABLE>
There were no options exercised by Named Officers during the fiscal year ended
September 30, 1996. The following table provides information on unexercised
options at September 30, 1996:
OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of
Securities ($) Value of
Underlying Unexercised
Unexercised In-the-Money
Options Options
Number of at FY End at FY End
Shares Acquired ($) Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
---- ----------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Robert Putnam None None 350,000 (1)/None $2,187,500 / $Nil
</TABLE>
(1) Based on a price per share of $6.75, being the average of the high
bid and low asked prices at the close of business on the last
trading day of the fiscal year ended September 30, 1996.
The Company has no stock appreciation rights (SAR) plan in place and
has not awarded SAR's to any person. The Company has no long-term incentive
plans, as that term is defined in the rules and regulations of the Securities
and Exchange Commission.
During the fiscal year ended September 30, 1996, the Company did not
amend or reprice the exercise price of any stock options granted to any
executive officer.
COMPENSATION OF DIRECTORS
The Company does not directly or indirectly compensate and has not
compensated any person for serving as a director of the Company. The Company
will, however, reimburse out-of-pocket expenses of directors incurred in
attending directors' or committee meetings.
CERTAIN TRANSACTIONS
There were no transactions, or series of transactions, for fiscal 1995
or 1996, nor are there any currently proposed transactions, or series of
transactions, to which the Company is a party, in which the amount exceeds
$60,000, and in which to the knowledge of the Company any director, executive
officer, nominee, five percent or greater shareholder, or any member of the
immediate family of any of the foregoing persons, have or will have any direct
or indirect material interest other than as described below.
The Company is obligated to pay to Elwood G. Norris, a director, a 1%
royalty on all sales of radio equipment based on the gross amount received by
the Company less returns and allowances pursuant to
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a September 3, 1985 royalty agreement. Pursuant to an Addendum Agreement dated
December 2, 1996 the Company is also obligated to pay Mr. Norris a 2% royalty on
gross revenues received by the Company from the Global Positioning System and
HyperSonic Sound technologies.
Pursuant to an agreement dated as at March 23, 1988 between the Company
and NCI, the Company sold NCI all of the issued and outstanding shares in its
wholly-owned subsidiary Norcom Communications Corporation (now Jabra
Corporation) in consideration of receiving 700,000 common shares of NCI, subject
to escrow and earn-out provisions which were subsequently fulfilled. At the time
of the sale of Jabra to NCI, Jabra had a book value of $400. The Company still
owns 225,300 of these common shares of NCI as of the date of this proxy
statement. Jabra was subsequently sold by NCI.
The Company and Mr. Norris are each entitled to 1% royalties on certain
gross invoice amounts received by Jabra on devices using the EarPHONE
technology. The Company received its royalty right under agreements dated
January 25, 1988 and March 22, 1988 by which the Company transferred all right,
title and interest in and to the EarPHONE to Jabra. The March 1988 and January
1988 agreements fail to address specifically the payment of royalties pertaining
to licensing the EarPHONE technology, however the Company believes that the
royalties will be due on all amounts received by Jabra on applicable technology
whether from gross invoice amounts or royalties or other payments. By letter
agreement dated January 14, 1993 it was clarified that the Company's 1% royalty
would be due only on gross sales of Jabra products incorporating a wireless
receiver sold until the expiration of the last patent relating to the EarPHONE
technology. Jabra has not yet introduced a wireless product and therefore the
Company has not received any royalties and there can be no assurance it will
receive any royalties in the future.
On June 4, 1996, the Company paid $50,788 to Elwood G. Norris reducing
the principal balance of a 1991 note due and payable on October 1, 1996 to
$100,000. In connection with the placement of $220,000 of convertible notes to
other unrelated investors, the balance of the note to Mr. Norris was converted
into a new note on terms comparable to the unrelated investors. Accordingly the
Company executed a new unsecured 8% Convertible Subordinated Promissory Note due
May 31, 1999 payable to Mr. Norris for $100,000. Pursuant to the conversion
terms of the note, Mr. Norris converted the principal amount of the note into
100,000 shares of the Company's common stock at the conversion price of $1.00
per share on September 27, 1996. On the same terms as the other investors, Mr.
Norris was also granted warrants to purchase up to 100,000 of the Company's
common shares until May 31, 1998 at an exercise price of $1.00 per share.
During the fiscal year ended September 30, 1996, the Company paid
$39,086 to NCI for rent of its operating facility under the present and a prior
arrangement. The Company also paid NCI for contract manufacturing services on
ear-radio production totaling $37,300 and $11,885 for other services during
fiscal 1996. The Company believes these services were performed on terms
comparable to those from independent parties.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who beneficially own 10% or more of a class of
securities registered under Section 12 of the Exchange Act to file reports of
beneficial ownership and changes in beneficial ownership with the Securities and
Exchange Commission. Directors, executive officers and greater than 10%
shareholders are required by the rules and regulations of the SEC to furnish the
Company with copies of all reports filed by them in compliance with Section
16(a). Based solely on a review of copies of such reports furnished to the
Company and written representations that no other reports were required during
the fiscal year ended September 30, 1996, the Company believes that all persons
subject to the reporting requirements pursuant to Section 16(a) filed the
required reports on a timely basis with the SEC, except as follows:
- Mr. David G. Norris, a former director who resigned on
September 9, 1996, filed his final Form 4 after the due date
for such form.
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FINANCIAL AND OTHER INFORMATION
The Company's Annual Report on Form 10-KSB for the year ended September
30, 1996, including the annual statements, as filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934, constitutes the
annual report to shareholders and is being mailed with this Proxy Statement.
Also accompanying this Proxy Statement is the Company's quarterly report on Form
10-QSB for the first fiscal quarter ended December 31, 1996.
UPON REQUEST AND PAYMENT OF A REASONABLE FEE TO COVER THE COMPANY'S
EXPENSES, THE COMPANY WILL FURNISH ANY PERSON WHO WAS A SHAREHOLDER OF THE
COMPANY AS OF THE RECORD DATE, A COPY OF ANY EXHIBIT TO THE FORM 10-KSB FOR THE
FISCAL YEAR ENDED SEPTEMBER 30, 1996. ANY SUCH WRITTEN REQUEST MAY BE ADDRESSED
TO ROBERT PUTNAM, PRESIDENT, AMERICAN TECHNOLOGY CORPORATION, 12725 STOWE DRIVE,
POWAY, CALIFORNIA 92064. THE WRITTEN REQUEST MUST CONTAIN A GOOD FAITH
REPRESENTATION THAT, AS OF THE RECORD DATE, THE PERSON MAKING THE REQUEST WAS
THE BENEFICIAL OWNER OF COMMON STOCK OF THE COMPANY.
The Common Shares of the Company are quoted on the OTC Electronic
Bulletin Board under symbol "ATCO" and traded in the over-the-counter market.
SHAREHOLDER PROPOSALS
Any shareholder intending to present a proposal before the 1997 Annual
Meeting of Shareholders should submit the proposal in writing to the Secretary
of the Company at 12725 Stowe Drive, Poway, California 92064. The written
proposal must be received by the Secretary on or before November 30, 1997 in
order to be considered for inclusion in the proxy statement for that meeting.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before
the Annual Meeting. However, if any matters other than those referred to herein
should properly come before the Annual Meeting, it is the intention of the proxy
holders to vote such proxy in accordance with his or her best judgment.
SOLICITATION OF PROXIES, SHAREHOLDER PROPOSALS AND OTHER MATTERS
The Company will bear the costs of the solicitation of proxies from its
shareholders. In addition, to the use of the mails, proxies may be solicited by
the directors, officers and employees of the Company by personal interview,
telephone or telegram. Such directors, officers and employees will not be
additionally compensated, but may be reimbursed for out-of-pocket expense in
connection with such efforts. Arrangements may also be made with brokerage
houses and other custodians, nominees and fiduciaries for the forwarding of
solicitation material to the beneficial owners of stock held of record by such
persons, and the Company will reimburse such persons for reasonable expenses
incurred in forwarding such proxy material.
The directors and executive officers of the Company, together with
their respective affiliates, beneficially own approximately ____% of the
Company's outstanding common stock at the record date, and they have indicated
that they intend to vote their shares in favor of all proposals set forth in
this Proxy Statement.
By Order of the Board of Directors
Robert Putnam
February __, 1997 President, CEO and Director
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PROXY PROXY
AMERICAN TECHNOLOGY CORPORATION
THIS PROXY RELATES TO AN ANNUAL MEETING OF THE SHAREHOLDERS TO BE
HELD MARCH 24, 1997
The undersigned hereby appoints ROBERT PUTNAM and RICHARD M. WAGNER or
either of them, with full power of substitution, as attorneys and proxies to
vote all shares of Common Stock which the undersigned is entitled to vote, with
all powers which the undersigned would possess if personally present, at the
Annual Meeting of Shareholders of AMERICAN TECHNOLOGY CORPORATION ("Company") to
be held at 2:00 o'clock p.m. (Pacific Time) at the California Center for the
Arts, Center Theater, 340 North Escondido Boulevard, Escondido, California, on
March 24, 1997, and any postponements and adjournments thereof, as follows:
1. PROPOSAL TO RATIFY BDO SEIDMAN, LLP AS INDEPENDENT AUDITORS.
__ FOR __ AGAINST __ ABSTAIN
2. PROPOSAL TO AUTHORIZE 5,000,000 SHARES OF PREFERRED STOCK.
__ FOR __ AGAINST __ ABSTAIN
3. ELECTION OF DIRECTORS.
__ FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to (to vote for the nominees
the contrary below) listed below)
(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the line)
________________________________________________________________________________
Robert Putnam, Richard M. Wagner, Elwood G. Norris, Joel A. Barker
THIS PROXY HAS NOT BEEN SOLICITED BY OR FOR THE BENEFIT OF THE BOARD OF
DIRECTORS OF THE COMPANY. I UNDERSTAND THAT I MAY REVOKE THIS PROXY ONLY BY
WRITTEN INSTRUCTIONS TO THAT EFFECT, SIGNED AND DATED BY ME, WHICH MUST BE
ACTUALLY RECEIVED BY THE COMPANY PRIOR TO COMMENCEMENT OF THE ANNUAL MEETING.
DATED:__________ , 1997 Signature(s) X______________________
Print Name ______________________
(Please date and sign exactly as name or names appear on your stock
certificate(s). When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation, please sign in full
the corporate name by President or other authorized officer. If a partnership,
please sign in the partnership name by authorized person. IF THE STOCK IS HELD
JOINTLY, BOTH OWNERS MUST SIGN.)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS SPECIFIED THIS PROXY WILL BE VOTED FOR THE PROPOSALS NOTED ABOVE
AND, AS TO ANY OTHER BUSINESS CONSIDERED AT THE ANNUAL MEETING, IN ACCORDANCE
WITH THE BEST JUDGEMENT OF THE PROXIES.
Mail or Deliver this Proxy to:
AMERICAN TECHNOLOGY CORPORATION
12725 Stowe Drive
Poway, California 92064
(619) 679-2114
