SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported) May 22, 1998
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AMBASSADORS INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
0-26420 91-1688605
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(Commission File Number) (I.R.S. Employer
Identification No.)
Dwight D. Eisenhower Building, 110 So. Ferrall St.,
Spokane, Washington 99202
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(Address of Principal Executive Offices) (Zip Code)
(509) 534-6200
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed
Since Last Report)
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Item 2. Acquisition or Disposition of Assets
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On May 22, 1998 (the "Closing Date"), Ambassador Performance Group,
Inc., a Delaware corporation ("APG"), a wholly-owned subsidiary of
Ambassadors International, Inc. (the "Company"), acquired all of the
outstanding shares of common stock (the "Shares") of Incentive
Associates, Inc., a California corporation ("IAI"), pursuant to a
certain Agreement and Plan of Merger dated May 22, 1998 by and among
APG, the Company, IAI, Wayne Wright and Russ Medevic (the latter two
individuals collectively referred to as the "Selling Shareholders").
The Shares were acquired for $4,300,000 as follows: $1,800,000 paid
in cash (subject to adjustment as described below) and $2,500,000
delivered in the form of 85,672 shares of the Company's common stock.
The Selling Shareholders were granted certain "piggyback" registration
rights with respect to the shares they received.
For each of the twelve-month periods ending March 31, 1999, 2000,
2001, and 2002, the Company will be required to make additional
payments to the Selling Shareholders in the following amounts: (i) for
the first year, an amount equal to 80% of IAI's revenues from clients,
prospects and account executives as of the Closing Date, less program
costs ("Gross Profits"), between $2,000,000 and $3,200,000, 50% of the
Gross Profits between $3,200,000 and $4,000,000, and 15% of the Gross
Profits in excess of $4,000,000; and (ii) for each of the second,
third and fourth years, 60% of the Gross Profits between $2,200,000
and $3,000,000, 50% of the Gross Profits between $3,000,000 and
$4,000,000, and 15% of the Gross Profits in excess of $4,000,000. Each
such additional payment will be paid one-half in cash and one-half in
the Company's common stock at its market value on the date of such
payment.
The cash portion of the purchase price is subject to adjustment as
follows. Within six months after the Closing Date, a determination
will be made, as of April 1, 1998, as to the difference between (i)
the sum of cash, prepaid expenses and collected accounts receivable of
IAI and (ii) the sum of the liabilities and deposits of IAI. If the
amount calculated in (i) exceeds the amount calculated in (ii), the
Company will pay the difference to the Selling Shareholders; if the
amount calculated in (ii) exceeds the amount calculated in (i), the
Selling Shareholders will pay the difference to the Company. Of the
$1,800,000 cash portion of the purchase price required to be paid by
the Company on the Closing Date, there was a "holdback" of $50,000
until the above calculations are finalized.
The purchase price for the Shares was arrived at through arms' length
negotiations between the Company and the Selling Shareholders, neither
of whom is an affiliate of the Company. The cash portion of the
purchase price came from funds raised in previous public offerings of
the Company's common stock.
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IAI has been in the business of providing travel incentive, business
meeting and conference planning services from its offices in Orange
County, California. Its operations will be consolidated with those of
APG in Newport Beach, California.
The Selling Shareholders have each entered into five-year employment
agreements and non-competition agreements with APG, pursuant to which,
among other things, each was granted, as of the Closing Date, options
to purchase 7,500 shares of the Company's Common Stock, and the
opportunity to receive further options based on achievement of certain
incentive targets.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
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(a) Financial Statements of Business Acquired
The financial statements required to be included in this report
on Form 8-K/A will be filed by amendment to this Form 8-K/A not
later than August 5, 1998.
(b) Pro Forma Financial Information
The pro forma financial information to be included in this report
on Form 8-K/A will be filed by amendment to this Form 8-K/A not
later than August 5, 1998.
(c) Exhibits
2.5 Agreement and Plan of Merger, dated May 22, 1998 by and
among Ambassadors International, Inc., Ambassador
Performance Group, Inc., Incentive Associates, Inc., Wayne
Wright and Russ Medevic. (Previously filed with the
Securities and Exchange Commission as Exhibit 2.5 to a
Current Report on Form 8-K, which was filed on June 5, 1998,
and is herein incorporated by reference.)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunder duly authorized.
Dated: July 22, 1998
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AMBASSADORS INTERNATIONAL, INC.
By /s/ John A. Ueberroth
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John A. Ueberroth, President
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