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 Rule 14a-11(c) or Rule 14a-12
Ambassadors International, Inc.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Not Applicable
------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-
6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] 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:
------------------------------------------------------------
3) Per unit price or other underlying 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:
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<PAGE>
[ ] Fee paid by written 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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<PAGE>
AMBASSADORS INTERNATIONAL, INC.
Dwight D. Eisenhower Building
110 South Ferrall Street
Spokane, Washington 99202
April 14, 1997
To Our Stockholders:
You are cordially invited to attend the 1996 Annual Meeting (the
"Annual Meeting") of Stockholders of Ambassadors International, Inc.
(the "Company"), which will be held at 10:00 a.m., local time, on May
16, 1997, at The Red Lion Hotel, 3050 Bristol Street, Costa Mesa,
California 92626. All holders of the Company's outstanding common
stock as of April 7, 1997, are entitled to vote at the Annual Meeting.
Enclosed is a copy of the Notice of Annual Meeting of Stockholders,
Proxy Statement and Proxy.
We hope you will be able to attend the Annual Meeting. Whether or not
you expect to attend, it is important that you complete, sign, date
and return the Proxy in the enclosed envelope in order to make certain
that your shares will be represented at the Annual Meeting.
Sincerely,
Jeffrey D. Thomas
Secretary
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
Dwight D. Eisenhower Building
110 South Ferrall Street
Spokane, Washington 99202
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 16, 1997
----------------------------------------
NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders
(the "Annual Meeting") of Ambassadors International, Inc., a Delaware
corporation (the "Company"), will be held at 10:00 a.m., local time,
on May 16, 1997, at The Red Lion Hotel, 3050 Bristol Street, Costa
Mesa, California 92626 for the following purposes:
1. To elect two (2) Class II directors to hold office for a three-
year term and until their respective successors are elected and
qualified.
2. To ratify the selection of Coopers & Lybrand L.L.P. as the
Company's independent accountants for the year ending December 31,
1997.
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 7,
1997, as the record date for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting and all
adjourned meetings thereof.
By Order of the Board of Directors
/s/Jeffrey D. Thomas
----------------------------------
Jeffrey D. Thomas
Secretary
Dated: April 14, 1997
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
RETURN ENVELOPE FURNISHED FOR THAT PURPOSE AS PROMPTLY AS POSSIBLE,
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. IF YOU LATER
DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOU MAY DO SO IN THE
MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT.
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
Dwight D. Eisenhower Building
110 South Ferrall Street
Spokane, Washington 99202
-------------------------------
PROXY STATEMENT
GENERAL INFORMATION
-------------------
This proxy statement is being furnished in connection with the
solicitation of proxies by the Board of Directors of Ambassadors
International, Inc. (the "Company") for use at the 1996 Annual Meeting
of Stockholders (the "Annual Meeting") to be held at 10:00 a.m., local
time, on May 16, 1997, at The Red Lion Hotel, 3050 Bristol Street,
Costa Mesa, California 92626 and at any adjournment thereof. When
such proxy is properly executed and returned, the shares it represents
will be voted in accordance with any directions noted thereon. Any
shareholder giving a proxy has the power to revoke it at any time
before it is voted by written notice to the Secretary of the Company,
by issuance of a subsequent proxy, or by voting at the Annual Meeting
in person.
At the close of business on April 7, 1997, the record date for
determining stockholders entitled to notice of and to vote at the
Annual Meeting, the Company had issued and outstanding 6,754,337
shares of Common Stock, $0.01 par value per share ("Common Stock").
Each share of Common Stock entitles the holder of record thereof to
one vote on any matter coming before the Annual Meeting. Only
stockholders of record at the close of business on April 7, 1997 are
entitled to notice of and to vote at the Annual Meeting or any
adjournments thereof.
The enclosed proxy, when properly signed, also confers discretionary
authority with respect to amendments or variations to the matters
identified in the Notice of Annual Meeting and with respect to other
matters which may be properly brought before the Annual Meeting. At
the time of printing this Proxy Statement, the management of the
Company is not aware of any other matters to be presented for action
at the Annual Meeting. If, however, other matters which are not now
known to the management should properly come before the Annual
Meeting, the proxies hereby solicited will be exercised on such
matters in accordance with the best judgment of the proxyholders.
The Company will pay the expenses of soliciting proxies for the Annual
Meeting, including the cost of preparing, assembling, and mailing the
proxy solicitation materials. Proxies may be solicited personally, by
mail, by telex, or by telephone, by directors, officers, and regular
employees of the Company who will not be additionally compensated
therefor. It is anticipated that this proxy statement and
accompanying proxy will be mailed on or about April 14, 1997 to all
stockholders entitled to vote at the Annual Meeting.
The matters to be considered and acted upon at the Annual Meeting are
referred to in the preceding notice and are more fully discussed
below.
<PAGE>
ELECTION OF DIRECTORS
(Item 1 of the Proxy Card)
--------------------------
The Company has a classified Board of Directors consisting of two
Class I Directors (Peter V. Ueberroth and Richard D. C. Whilden), two
Class II Directors (John A. Ueberroth and James L. Easton), and two
Class III Directors (John C. Spence and Rafer L. Johnson), who will
serve until the annual meetings of stockholders to be held in 1998,
1997, and 1999, respectively, and until their respective successors
are elected and qualify. At each annual meeting of stockholders,
directors are elected for a full term of three years to succeed those
directors whose terms expire on the annual meeting dates.
Management's nominees for election at the Annual Meeting as Class II
directors are John A. Ueberroth and James L. Easton. If elected, the
nominees will serve as directors until the Company's annual meeting of
stockholders in the year 2000, and until their successors are elected
and qualified. If either nominee declines to serve or becomes
unavailable for any reason, or if a vacancy occurs before the election
(although management knows of no reason to anticipate that this will
occur), the proxies may be voted for such substitute nominees as
management may designate.
If a quorum is present and voting, the two nominees for Class II
directors receiving the highest number of votes will be elected as
Class II directors. Abstentions and shares held by brokers that are
present, but not voted because the brokers were prohibited from
exercising discretionary authority, i.e., "broker non-votes," will be
counted as present for purposes of determining if a quorum is present.
The table below sets forth for the current directors, including the
Class II nominees to be elected at this meeting, certain information
with respect to age and background.
Name Position with Company Age Director Since
--------------------- ----------------------- --- --------------
CLASS I DIRECTORS WHOSE TERM EXPIRES AT THE 1997 ANNUAL MEETING OF
STOCKHOLDERS (TO BE HELD IN 1998):
Peter V. Ueberroth Chairman of the Company 59 1995
Richard D. C. Whilden Director 63 1995
CLASS II DIRECTORS WHO ARE CURRENTLY UP FOR RE-ELECTION:
John A. Ueberroth President and Chief
Executive Officer 53 1995
James L. Easton Director 61 1995
CLASS III DIRECTORS WHOSE TERM EXPIRES AT THE 1998 ANNUAL MEETING OF
STOCKHOLDERS (TO BE HELD IN 1999):
John C. Spence Director 67 1995
Rafer L. Johnson Director 61 1995
<PAGE>
Business Experience
-------------------
Directors and Nominees for Directors
CLASS I DIRECTORS
PETER V. UEBERROTH has served as Chairman of the Board of the Company
since 1995. From 1989 to the present, Mr. Ueberroth has served as
Managing Director of The Contrarian Group, a business management
company. From 1984 to 1989, Mr. Ueberroth served as the sixth
Commissioner of Major League Baseball. From 1979 to 1984, he served
as President and Chief Executive Officer of the Los Angeles Olympic
Organizing Committee. Mr. Ueberroth founded First Travel Corporation
in 1962, and sold it to the Carlson Travel Group in 1979. Today Mr.
Ueberroth serves as a director of Candlewood Hotel Company, Inc., The
Coca Cola Company, CB Commercial Real Estate Services Group,
Doubletree Hotels Corporation, and Transamerica Corporation.
RICHARD D.C. WHILDEN has served as a director of the Company since
1995. From 1990 until the present, Mr. Whilden has been a principal
of The Contrarian Group, a business management company. He is also
chairman of the Internet Travel Network. From April 1993 to August
1994, Mr. Whilden was the Chairman of the Board of Directors of
Caliber Bank in Phoenix, Arizona and, from December 1993 to August
1994, he was the Chief Executive Officer, President and Chairman of
the Board of Directors of the bank's holding company, Independent
Bankcorp of Arizona, Inc. In addition, Mr. Whilden remained as a
director of the holding company and of the bank until they were sold
in 1995. From 1959 until 1989, Mr. Whilden was employed by TRW,
during which time he served as Executive Vice President from 1984
until 1989. He also served as Managing Director for the recently
completed Council on California Competitiveness.
CLASS II DIRECTORS
JOHN A. UEBERROTH has served as President, Chief Executive Officer and
a director of the Company since 1995. From June 1995 until August
1996, he also served as the Chief Executive Officer and President of
Ambassador Programs, Inc. ("API"), the Company's wholly owned
subsidiary. From 1989 until the present, Mr. Ueberroth has been a
principal of The Contrarian Group, a business management company.
From 1990 to 1993, he served as Chairman and Chief Executive Officer
of Hawaiian Airlines. Hawaiian Airlines filed for bankruptcy
protection pursuant to Chapter 11 of the Bankruptcy Code in 1993 and
emerged from bankruptcy in 1994. Prior to that time, from 1980 to
1989, he served as President of Carlson Travel Group. In addition,
Mr. Ueberroth has served as Chairman of the Travel Industry
Association of America (1986-1987) and President of the United States
Tour Operator Association (1987-1988).
JAMES L. EASTON has served as a director of the Company since 1995.
Since 1973, Mr. Easton has served as Chairman and President of Jas. D.
Easton Inc. and Easton Sports Inc., a diversified international
sporting goods company. He is one of only three United States
citizens to serve as a member of the International Olympic Committee.
He also serves as President of Federation Internationale de Tir
<PAGE>
a l'Arc (FITA -- International Archery Association), is a member of
the Board of Visitors of John E. Anderson Graduate School of
Management at UCLA, and is an Executive Board Member of the Salt Lake
City Organizing Committee and the U.S. Olympic Committee.
CLASS III DIRECTORS
RAFER L. JOHNSON has served as a director of the Company since 1995.
Mr. Johnson is a World and Olympic record holder in the decathlon.
Mr. Johnson devotes innumerable hours to mentally and physically
handicapped children and adults. He has been associated with
California Special Olympics since its inception in 1969, served as the
President of the Board of Directors for ten years, and currently is
Chairman of the Board of Governors. He has been appointed to national
and international foundations and Presidential Commissions, with a
concentration on youth development. Mr. Johnson also is National Head
Coach for Special Olympics International and a member of their Board
of Directors, as well as serving on a variety of special boards and
committees in the world of sports and community services.
JOHN C. SPENCE has served as a director of the Company since 1995.
Since April 1993, Mr. Spence has been President of Avco Insurance
Services, a provider of credit and credit-related insurance to
financial institutions, and a wholly-owned subsidiary of Avco
Financial Services, Inc. From October 1990 to April 1993, he served
as President of Endovascular Instruments, Inc., a manufacturer of
medical devices. Prior to that time, Mr. Spence was an independent
business consultant. He is also a director of Avco Financial
Services, Inc., a wholly-owned subsidiary of Textron, Inc.,
Endovascular Instruments, Inc., and BMW Medical Inc., a manufacturer
of vascular access devices.
EXECUTIVE OFFICERS
JEFFREY D. THOMAS, age 30, has served as Chief Financial Officer, Vice
President of Finance and Secretary of the Company since January 1996,
and from October 1995 through December 1995, he was Assistant Vice
President of Finance of the Company. Mr. Thomas also serves as
President (since August 1996) and Chief Financial Officer (since
January 1996) of API and Vice President, Secretary, and Treasurer
(since December 1996) of Ambassador Performance Improvement, Inc., a
wholly-owned subsidiary of the Company. From July 1994 to October
1995, Mr. Thomas was Director of Business Development for Adia
Personnel Services, one of the largest personnel companies in the
world. From September 1993 to July 1994, Mr. Thomas was employed by
The Contrarian Group, a business management company, and from 1989 to
1993, he was a Consultant for Corporate Decisions, Inc., an
international business consulting firm.
John A. Ueberroth and Peter V. Ueberroth are brothers. Jeffrey D.
Thomas is the son-in-law of Peter V. Ueberroth. Other than these
relationships, there are no family relationships among the directors
and the executive officers of the Company.
<PAGE>
BOARD OF DIRECTORS MEETINGS AND
COMMITTEES OF THE BOARD OF DIRECTORS
There were four meetings of the Board of Directors during the fiscal
year ended December 31, 1996. Four of the six directors attended all
four meetings and one director attended three of the meetings. Mr.
Johnson attended 50% of such meetings. The Board of Directors has
authorized an Audit Committee and a Compensation Committee. There is
no nominating committee and the members of each committee are
nominated by the majority vote of the Board of Directors.
AUDIT COMMITTEE
---------------
The Board of Directors has an Audit Committee which makes
recommendations for selection of the Company's independent public
accountants, reviews with the independent public accountants the plans
and results of the audit engagement, approves professional services
provided by the independent public accountants, reviews the
independence of the independent public accountants, considers the
range of audit and any non-audit fees, and reviews the adequacy of the
Company's internal accounting controls and financial management
practices. The Audit Committee consists of Messrs. John A. Ueberroth,
Spence and Johnson. There were four meetings of the Audit Committee
held during the fiscal year ended December 31, 1996. Mr. Johnson
attended two of the four meetings. The other members attended all of
the meetings.
COMPENSATION COMMITTEE
----------------------
The Compensation Committee (the "Compensation Committee") is
responsible for determining compensation for the Company's executive
officers and for administering the Company's Incentive Plan. The
Compensation Committee consists of Messrs. Peter V. Ueberroth, Easton
and Whilden. There were four meetings of the Compensation Committee
during the fiscal year ended December 31, 1996.
DIRECTOR COMPENSATION
---------------------
Each of the Company's non-employee directors receives fees of $10,000
per year plus $1,000 per attended board meeting for serving on the
Company's Board of Directors. In addition, each director is
reimbursed for certain out of pocket expenses incurred in connection
with attendance at board and committee meetings. Pursuant to the
Company's 1995 Equity Participation Plan, each of the Company's
non-employee directors, on the date they are first elected to the
board, receives a grant of non-qualified stock options to purchase
10,000 shares of the Company's Common Stock at the fair market value
of the Common Stock on the date of grant. The directors' options vest
in equal increments over four years.
<PAGE>
EXECUTIVE COMPENSATION
----------------------
The following table sets forth the compensation for the Chief
Executive Officer and each of the executive officers whose individual
remuneration exceeded $100,000 for the fiscal year ended December 31,
1996 (the "Named Executives"):
Summary Compensation Table
--------------------------
Annual Compensation Long-term
Name and Principal ---------------------- Compensation
Position Year Salary($) Bonus($) Options
---------------------- ---- --------- --------- ------------
John A. Ueberroth, 1996 50,000 - -
President and Chief 1995 50,000 - -
Executive Officer 1994 n/a n/a n/a
Jeffrey D. Thomas, 1996 101,780 40,720 25,000 (1)
Chief Financial 1995 19,999 - 25,000 (1)
Officer and Secretary 1994 n/a n/a n/a
-------------
(1) The stock options were granted under the Company's 1995 Equity
Participation Plan.
<PAGE>
OPTION GRANTS
-------------
The following table sets forth information regarding stock option
grants to each of the Named Executives during the fiscal year ended
December 31, 1996:
Option Grants in Last Fiscal Year
---------------------------------
<TABLE>
<CAPTION>
Percent of Total
Number of Shares Options Granted to
Underlying Employees in Exercise Price
Name Options Granted Fiscal Year ($/Share) Expiration Date
--------------------- --------------- ------------------ -------------- ---------------
<S> <C> <C> <C> <C>
John Ueberroth - - - -
Jeffrey D. Thomas (1) 25,000 23% $11.38 August 9, 2006
----------
(1) 6,250 vest each on August 9, 1997, 1998, 1999, and 2000,
respectively.
</TABLE>
YEAR END OPTION TABLE
---------------------
The following table sets forth information regarding unexercised
options held by the Named Executives. No options were exercised
during the fiscal year ended December 31, 1996:
<TABLE>
<CAPTION>
Aggregated Option Exercise in Last Fiscal Year
and Fiscal Year End Option Values
----------------------------------------------------------
Number of Unexercised Options Value of In-The-Money
at Fiscal Year End Options at Fiscal Year End
Name Exercisable/Unexercisable Exercisable/Unexercisable
------------------- ----------------------------- --------------------------
<S> <C> <C>
John A. Ueberroth -/- n/a
Jeffery D. Thomas 6,250/43,750 $0/$0
</TABLE>
<PAGE>
COMPENSATION PLANS AND ARRANGEMENTS
-----------------------------------
The 1995 Equity Participation Plan
----------------------------------
In August 1995, the Company adopted the 1995 Equity Participation Plan
of Ambassadors International, Inc. (the "Incentive Plan") to attract
and retain officers, key employees, consultants and directors. An
aggregate of 600,000 shares of the Common Stock (or their equivalent
in other equity securities), subject to adjustment for stock splits,
stock dividends and similar events, were authorized for issuance upon
exercise of options, stock appreciation rights ("SARs"), and other
awards, or as restricted or deferred stock awards under the Incentive
Plan. The Compensation Committee administers the Incentive Plan and
determines to whom options, SARs, restricted stock, and other awards
are to be granted and the terms and conditions, including the number
of shares and the period of exercisability thereof, except that
outside directors are automatically granted options pursuant to a
formula discussed below.
The Incentive Plan authorizes the grant or issuance of various options
and other awards to employees and consultants, and the terms of each
such option or award will be set forth in separate agreements. In
addition, non-employee directors (including the directors who
administer the plan) are eligible to receive non-discretionary grants
of nonqualified stock options ("NQSOs") under the Incentive Plan
pursuant to a formula. Pursuant to such formula, each of the
Company's non-employee directors received prior to the Company's
initial public offering in August 1995, and all new non-employee
directors will receive upon election, a grant of NQSOs to purchase
10,000 shares of the Company's Common Stock at the then fair market
value. NQSOs may be granted to an employee or consultant for any term
specified by the Compensation Committee and will provide for the right
to purchase Common Stock at a specified price which, except with
respect to NQSOs intended to qualify as performance-based compensation
under Section 162(m) of the Internal Revenue Code (the "Code"), may be
less than fair market value on the date of grant (but not less than
par value), and may become exercisable (in the discretion of the
Compensation Committee) in one or more installments after the grant
date. NQSOs granted to non-employee directors become exercisable in
cumulative annual installments of 25% on each of the first, second,
third and fourth anniversaries of the date of option grant, and the
term of each such option shall be ten years without variation or
acceleration under the Incentive Plan, except that any option granted
to a non-employee director shall become immediately exercisable in
full upon the retirement of the non-employee director in accordance
with the Company's retirement policy applicable to directors.
Incentive stock options may be granted only to employees and, if
granted, will be designed to comply with the provisions of the Code
and will be subject to restrictions contained in the Code, including
having an exercise price equal to at least 100% of the fair market
value of the Common Stock on the grant date and a ten year restriction
on their term, but may be subsequently modified to disqualify them
from treatment as an incentive stock option. SARs may be granted to
employees and consultants and may be granted in connection and
simultaneously with the grant of an option, with respect to a
<PAGE>
previously granted option or independent of an option. Participants
may receive dividend equivalents representing the value of the
dividends per share paid by the Company, calculated with reference to
the number of shares covered by the stock options, SARs or performance
awards held by the participant. Performance awards may be granted by
the Compensation Committee to employees and consultants and may
include bonus or "phantom" stock awards that provide for payments
based upon increases in the price of the Company's Common Stock over a
predetermined period. Restricted stock may be sold to employees and
consultants at various prices (but not below par value) and made
subject to such restrictions as may be determined by the Compensation
Committee. Deferred stock may be awarded to employees and
consultants, typically without payment of consideration, but subject
to vesting conditions based on continued employment or on performance
criteria established by the Compensation Committee. Whereas
purchasers of restricted stock will have voting rights and will
receive dividends prior to the time when the restrictions lapse,
recipients of deferred stock generally will have no voting or dividend
rights prior to the time when vesting conditions are satisfied. Stock
payments may be awarded to employees and consultants and the number of
shares shall be determined by the Compensation Committee and may be
based upon the fair market value, book value, net profits or other
measure of the value of Common Stock or other specific performance
criteria.
Payments for the shares purchased upon the exercise of options may be
in cash or, at the discretion of the Compensation Committee (or the
Board, in the case of NQSOs granted to non-employee directors), with
shares of Common Stock owned by the optionee (or issuable upon
exercise of the option) or with other lawful consideration, including
services rendered.
No restricted stock, deferred stock, option, SAR or other right to
acquire Common Stock granted under the Incentive Plan may be assigned
or transferred by the grantee, except by will or the laws of intestate
succession, although such shares or the shares underlying such rights
may be transferred if all applicable restrictions have lapsed. During
the lifetime of the holder of any option or right, the option or right
may be exercised only by the holder.
The Compensation Committee has the right to accelerate, in whole or in
part, from time to time, including upon a change in control of the
Company, conditionally or unconditionally, the right to exercise any
option or other award granted under the Incentive Plan; provided,
however, such acceleration shall not be permitted with respect to
NQSOs granted to non-employee directors to the extent that such
discretion would be inconsistent with the requirements of Rule 16b-3.
Amendments of the Incentive Plan to increase the number of shares as
to which options, SARs, restricted stock and other awards may be
granted (except for adjustments resulting from stock splits and the
like) require the approval of the Company's stockholders. The
provisions of the Incentive Plan relating to options granted to
non-employee directors shall not be amended more than once in any
six-month period other than to comport with changes in the Code, the
Employee Retirement Income Security Act, or the respective rules
<PAGE>
thereunder. In all other respects the Incentive Plan can be amended,
modified, suspended or terminated by the Compensation Committee,
unless such action would otherwise require stockholder approval as a
matter of applicable law, regulation or rule. Amendments of the
Incentive Plan will not, without the consent of the participant,
affect such person's rights under an award previously granted, unless
the award itself otherwise expressly so provides. The Incentive Plan
will terminate after the earlier of the expiration of ten years from
the date the Incentive Plan is adopted by the Board or the expiration
of ten years from the date the Plan is approved by the Company's
stockholders.
During the fiscal year ended December 31, 1996, a total of 109,400
stock options were granted under the Incentive Plan, of which 241,363
were outstanding and 187,838 were forfeited at December 31, 1996. The
exercise prices of the outstanding options range from $8.25 to $11.25
and all options granted have a term of ten years from the date of
grant and vest over four years.
Profit Sharing Plan
-------------------
Effective January 1, 1993, the Company established a noncontributory
profit sharing plan (the "Profit Sharing Plan"), available to
employees of the Company who have completed two years of service and
have reached the age of 21 and who are not governed by a collective
bargaining agreement under which the retirement benefits have been the
subject of good faith bargaining, unless such agreement expressly
provides for the participation in this Plan. The Plan provides full
vesting upon eligibility and permits employees to direct the
investment of the accounts. Contributions by the Company are
determined at the discretion of the Board of Directors. The amount
allocated to each participant's account is proportionately based on
the employee's compensation compared to the total compensation for all
participants in the group. Employees become 100% vested in their
accounts immediately upon the effective date of participation.
Participants' vested accounts are distributable upon the participant's
disability, death, retirement, or termination of employment.
Distributions are subject to income taxes which may be deferred or
reduced by various methods. No contributions were made for the year
ended December 31, 1995.
During 1996, the assets of the Plan were transferred into a new 401(k)
Profit-Sharing Plan (the "401(k) Plan"). Employees are eligible to
participate in the Plan upon one year of service and 21 years of age.
Employees may contribute up to 15% of their salary, subject to the
maximum contribution allowed by the Internal Revenue Service. The
Company's matching contribution is discretionary based upon approval
by management. Employees are 100% vested in their contributions and
vest in Company matching contributions equally over four years.
During the year ended December 31, 1996, the Company contributed
approximately $57,000 to the 401(k) Plan.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the amount of shares of the Company
beneficially owned as of March 31, 1997 by the Named Executives, each
person known by the Company to own beneficially more than 5% of the
outstanding shares of the Company's outstanding Common Stock, and all
directors and executive officers as a group. Unless otherwise
indicated below, the business address of each individual is the same
as the address of the Company's principal executive offices.
Amount and Nature
of Beneficial
Ownership of Percent of Class
Name of Beneficial Owner Common Stock (1) of Common Stock
----------------------------- ----------------- ----------------
Peter V. Ueberroth(2) 1,352,575 20.0%
John A. Ueberroth(3) 1,551,585 23.0%
Jeffrey D. Thomas(4) 117,600 1.7%
James L. Easton(5) 2,500 *
John C. Spence(6) 3,500 *
Rafer L. Johnson(7) 2,500 *
Richard D.C. Whilden(8) 5,120 *
All Directors and Executive
Officers of the Company as
a Group (7 people) 3,025,380 44.9%
5% Shareholders
-----------------------------
The Kaufmann Fund, Inc.(9) 750,000 11.1%
T. Rowe Price Associates,
Inc.(10) 788,000 11.7%
---------
*less than 1%
(1) Includes shares issuable upon the exercise of options or warrants
that are exercisable within 60 days of the date of this Proxy
Statement. The shares underlying such options or warrants are
deemed to be outstanding for the purpose of computing the
percentage of outstanding stock owned by such persons
individually and by each group of which they are a member, but
are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
(2) Chairman of the Company. Mr. Ueberroth's address is 500 Newport
Center Drive, Suite 900, Newport Beach, CA 92660. These shares
are held in a family trust of which Mr. Ueberroth is a co-
trustee.
(3) President and Chief Executive Officer of the Company. Mr.
Ueberroth's address is 500 Newport Center Drive, Suite 900,
Newport Beach, CA 92660.
<PAGE>
(4) Secretary and Chief Financial Officer of the Company. Consists
of 111,350 shares of Common Stock held in a family trust and
6,250 shares of Common Stock issuable upon exercise of employee
stock options.
(5) Director. Mr. Easton's address is 7855 Haskell Avenue, Van Nuys,
CA 91406. Consists of 2,500 shares of Common Stock issuable
upon exercise of director options.
(6) Director. Mr. Spence's address is 18581 Teller Avenue, Irvine,
CA 92715. Includes 2,500 shares of Common Stock issuable upon
exercise of director options.
(7) Director. Mr. Johnson's address is 501 Colorado Avenue, Suite
200, Santa Monica, CA 90401. Consists of 2,500 shares of Common
Stock issuable upon exercise of director options.
(8) Director. Mr. Whilden's address is 500 Newport Center Drive,
Suite 900, Newport Beach, CA 92660. Includes 2,500 shares of
Common Stock issuable upon exercise of director options.
(9) As reported in a Schedule 13G filed with the Securities and
Exchange Commission by The Kaufmann Fund, Inc., whose address is
140 E. 45th Street, 43rd Floor, New York, NY 10017.
(10) As reported in a Schedule 13G filed with the Securities and
Exchange Commission. These securities are owned by various
individual and institutional investors, including T. Rowe Price
New Horizon Funds, Inc. (which owns 433,000 shares), for which
T. Rowe Price Associates, Inc. serves as an investment advisor
with power to direct investments and/or sole power to vote the
securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, T. Rowe Price Associates, Inc.
is deemed to be a beneficial owner of such securities; however,
T. Rowe Price Associates, Inc. expressly disclaims that it is, in
fact, the beneficial owner of such securities.
<PAGE>
CERTAIN TRANSACTIONS
In January, 1995, John A. Ueberroth and Peter V. Ueberroth
(collectively referred to herein as the "Ueberroths"), John T. Tatham,
Trudy K. Tatham, Emanuele F. Portolese, and Joe M. Sample (Ms. Tatham
and Messrs. Tatham, Portolese, and Sample are collectively referred to
herein as the "Former Stockholders"), and International Ambassador
Programs, Inc., a Washington corporation and the predecessor of the
Company ("IAP"), agreed that the Ueberroths would purchase a portion
of the Former Stockholders' shares of Common Stock for a purchase
price of $1.9 million, in cash, and the Company would redeem an
equivalent portion of the Former Stockholders' shares of Common Stock
for approximately $1.8 million in cash, effective as of January 1,
1995. Following such transaction, in order to reincorporate in
Delaware, IAP merged with and into the Company, pursuant to which
merger the issued and outstanding shares of Common Stock of the
Company prior to the merger were canceled and each share of IAP common
stock was converted into 1,310 shares of the Company's Common Stock.
Each of these transactions was contingent upon the consummation of the
Company's initial public offering, which was completed in August 1995.
In August, 1995, the Ueberroths and the Former Stockholders also
entered into an agreement pursuant to which they agreed to rescind the
transaction completed in January 1995. Pursuant to the terms of the
agreement, (i) the Company redeemed a portion of the Selling
Stockholders' shares of Common Stock, (ii) the Ueberroths purchased
the remainder of the Former Stockholders' shares of Common Stock, and
(iii) the Company entered into employment agreements with each Former
Stockholder providing for base salary, incentive compensation and
consideration for an agreement not to compete. As a result of the
rescission, the original transaction is deemed not to have occurred.
In connection with the Company's initial public offering, the Company
granted the Ueberroths, their family members and certain others
holding shares of the Company's Common Stock demand and incidental, or
"piggyback," registration rights which allow them to require that the
Company register under the Securities Act all or part of the Common
Stock held by them. The Company also granted the Former Stockholders
certain piggyback registration rights which allow the Former
Stockholders to include their remaining shares of Common Stock in any
registered public offering of shares in which the Ueberroths
participate.
In March 1995, the Company loaned $1.0 million to each of John and
Peter Ueberroth under notes receivable bearing interest at 7.25% per
annum and due on December 31, 1995. In June 1995, both notes were
repaid in full and the Company recognized approximately $36,000 of
interest income in the second quarter of 1995.
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's executive officers and
directors and persons who beneficially own more than 10% of a
registered class of the Company's Common Stock to file initial reports
of ownership and reports of changes in ownership with the Securities
and Exchange Commission ("Commission"). Such officers, directors, and
stockholders are required by Commission regulations to furnish the
Company with copies of all such reports that they file.
Mr. Thomas filed two late reports relating to four transactions.
Based solely upon the Company's review of such forms furnished to the
Company and written representations from certain reporting persons,
the Company believes that all other filing requirements applicable to
the Company's executive officers, directors and more than 10%
stockholders were complied with.
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
(Item 2 of the Proxy Card)
The Board of Directors has selected Coopers & Lybrand L.L.P. ("Coopers
& Lybrand") as the Company's independent accountants for the year
ending December 31, 1997, and has further directed that management
submit the selection of independent accountants for ratification by
the shareholders at the Annual Meeting. Coopers & Lybrand has no
financial interest in the Company and neither it nor any member or
employee of the firm has had any connection with the Company in the
capacity of promoter, underwriter, voting trustee, director, officer
or employee. The Delaware General Corporation Law does not require
the ratification of the selection of independent accountants by the
Company's shareholders, but in view of the importance of the financial
statements to the shareholders, the Board of Directors deems it
advisable that they pass upon such selection. A representative of
Coopers & Lybrand is not expected to be present at the Annual Meeting.
In the event the shareholders fail to ratify the selection of Coopers
& Lybrand, the Audit Committee of the Board of Directors will
reconsider whether or not to retain the firm. Even if the selection
is ratified, the Audit Committee and the Board of Directors in their
discretion may direct the appointment of a different independent
accounting firm at any time during the year if they determine that
such a change would be in the best interests of the Company and its
shareholders.
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF
RATIFICATION OF THE SELECTION OF THE INDEPENDENT ACCOUNTANTS
FORM 10-KSB REPORT
------------------
A copy of the Company's annual report to the Securities and Exchange
Commission on Form 10-KSB is available without charge to stockholders
and may be obtained by writing to Jeffrey D. Thomas, Chief Financial
Officer, Ambassadors International, Inc., Dwight D. Eisenhower
Building, 110 South Ferrall Street, Spokane, Washington 99202.
SHAREHOLDER PROPOSALS
---------------------
Any proposals of security holders which are intended to be presented
at next year's Annual Meeting must be received by the Company at its
principal executive offices on or before December 15, 1997, in order
to be considered for inclusion in the Company's proxy materials
relating to that meeting.
OTHER MATTERS
-------------
The Board of Directors knows of no other matters to be brought before
the Annual Meeting. However, if other matters should come before the
Annual Meeting, it is the intention of the person named in the proxy
to vote such proxy in accordance with his judgment on such matters.
By Order of the Board of Directors
/s/Jeffrey D. Thomas
----------------------------------
Jeffrey D. Thomas, Secretary
Spokane, Washington
April 14, 1997
Please complete, date, and sign the enclosed Proxy and return it
promptly in the enclosed reply envelope. No postage is required if
mailed in the United States.
<PAGE>
