UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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| Definitive Additional Materials |
| Soliciting Material Pursuant to Section 240.14a-12 |
American Vantage Companies
(Name of Registrant as Specified In Its Charter)
Not Applicable
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American Vantage Companies
Notice of Annual Meeting of Stockholders
December 11, 2006
To the Stockholders of
American Vantage Companies:
NOTICE IS HEREBY GIVEN that the Annual Meeting (the “Annual Meeting”) of Stockholders of American Vantage Companies (the “Company”) will be held at The Orleans Las Vegas Hotel & Casino, located at 4500 West Tropicana Avenue, Las Vegas, Nevada, on Monday, December 11, 2006, commencing at 10:00 a.m. (local time), for the following purposes:
| 1. | To elect one person to the Board of Directors of the Company as a Class B director, to serve until the third succeeding annual meeting of stockholders of the Company following the Annual Meeting or until such person shall resign, be removed or otherwise leave office; and |
| 2. | To consider and act upon any other proposal as may properly come before the Annual Meeting. |
The foregoing matters are more fully described in the Proxy Statement accompanying this Notice, to which your attention is directed.
Only stockholders of record on the books of the Company at the close of business on October 12, 2006 will be entitled to vote at the Annual Meeting. You are requested to sign, date and return the enclosed proxy card at your earliest convenience in order that your shares may be voted for you as specified.
| | | |
| | |
| | By Order of the Board of Directors, |
|
|
|
| | /s/ Jeanne Hood |
| |
Jeanne Hood, Assistant Secretary |
| | |
November 6, 2006
Las Vegas, Nevada
American Vantage Companies
4735 South Durango Drive
Suite 105
Las Vegas, Nevada 89147
Proxy Statement
Annual Meeting of Stockholders
December 11, 2006
The 2006 Annual Meeting of Stockholders of American Vantage Companies, a Nevada corporation, will be held on Thursday, December 11, 2006, at The Orleans Las Vegas Hotel & Casino, located at 4500 West Tropicana Avenue, Las Vegas, Nevada, commencing at 10:00 a.m., local time, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. This proxy statement is being furnished in connection with the solicitation of proxies by and on behalf of our board of directors for use at the annual meeting, and at any adjournments and postponements of the annual meeting. We will bear the entire costs of such solicitation. The approximate date on which this proxy statement and the enclosed proxy card are being first mailed to our stockholders is November 6, 2006.
If the proxy card in the accompanying form is duly completed, executed, dated and returned, the shares represented by such proxy card will be voted as specified, subject to any applicable voting or irrevocable proxy agreements. Any person executing a proxy card may revoke it prior to its use. You are directed to the section entitled “Procedure for Voting by Proxy” for further information concerning a stockholder’s ability to vote by proxy and to revoke a proxy once given.
Throughout this proxy statement, the terms “we,” “us,” “our” and “our company” refers to American Vantage Companies and, unless the context indicates otherwise, our subsidiaries on a consolidated basis; and “you” and “your” refers to the stockholders of our company.
Record Date
We have established October 12, 2006 as the record date for the annual meeting. Only holders of record of our voting securities at the close of business on such date will be eligible to vote at the annual meeting. Our common stock currently is the only class of our securities entitled to be voted at the annual meeting. A list of stockholders entitled to vote at the annual meeting will be available for examination by any stockholder, for any purpose relating to the annual meeting, at our executive offices during ordinary business hours for the ten days immediately prior to the annual meeting. The stockholder list also will be available for examination at the annual meeting.
Proposals to be Considered at the Meeting
You will be asked to consider and vote at the annual meeting on the matters listed in the accompanying Notice of Annual Meeting of Stockholders and described in this proxy statement.
We do not expect that any other matter will be brought before the annual meeting. If, however, other matters are properly presented, the individuals named on your proxy card will vote on these other matters in accordance with their judgment and to the extent permitted by applicable law.
Vote Required to Approve the Proposals
Holders of our common stock are entitled to one vote per share on each of the proposals scheduled for vote at the annual meeting. We had issued and outstanding 5,729,107 shares of our common stock as of the record date. Accordingly, there are 5,729,107 votes eligible to be cast at the annual meeting.
The election of directors (proposal number 1) is by a plurality of votes cast.
Abstentions will not be included in the vote totals and, in instances where brokers are prohibited from exercising discretionary authority for beneficial owners who have not returned a proxy card to the brokers, so called “broker non-votes,” those votes will not be included in the vote totals for purposes of determining whether proposals have received the requisite number of affirmative votes cast. Therefore, abstentions and broker non-votes will have no effect on the vote on all of the proposals scheduled for vote at the annual meeting. Abstentions and broker non-votes, however, will be counted in the determination of whether a quorum exists for the purposes of transacting business at the annual meeting.
Our directors, director-nominees and executive officers control approximately 30.1% of the voting power entitled to be cast at the annual meeting. We anticipate that these directors and executive officers will cast all of their votes in favor of each of the director-nominees.
Quorum
We must have a quorum in order to carry on business at the annual meeting. Under our bylaws, as amended through the record date, we must have present, in person or by proxy, holders of at least a majority of the entire number of votes entitled to be cast at the annual meeting in order for a quorum to exist. Accordingly, we must have present, in person or by proxy, holders owning of record at least 2,864,554 shares of our common stock in order for any business to be conducted at the annual meeting. Abstentions and broker non-votes will count for quorum purposes.
Procedure for Voting by Proxy
A form of proxy card is enclosed for your use. To vote without attending the annual meeting in person, you should complete, sign, date and return the proxy card in the accompanying envelope, which is postage-paid if mailed in the United States.
If you properly fill in your proxy card in the accompanying form and send it to us in time to be voted, your shares will be voted as you have directed on the proxy card, subject to any applicable voting or irrevocable proxy agreements to which you may be a party. If you sign the proxy card, but do not make specific choices, the individuals named on your proxy card will vote your shares FOR approval of each of the company proposals scheduled for vote at the annual meeting.
You can still vote in person at the annual meeting, even if you have completed and returned a proxy. You may revoke your proxy at any time before it is voted by:
| | · | | submitting a new proxy with a later date; |
| | · | | by voting in person at the annual meeting; or |
| | | | by filing with our corporate secretary a written revocation of the proxy. |
Attendance at the annual meeting will not of itself constitute revocation of a proxy. You must note your appearance with the inspector(s) of election, tell the inspector(s) that you previously granted a proxy with respect to the annual meeting, which you are revoking and request a ballot in order to personally vote at the annual meeting.
If you hold shares through a broker, you should contact your broker to determine the procedures through which you can vote your shares in person.
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Our common stock is the only class of our voting securities presently outstanding.
The following table sets forth information with respect to the beneficial ownership of shares of our common stock as of the record date for the annual meeting by:
| | | | each person known by us to beneficially own 5% or more of the outstanding shares of such class of stock, based on filings with the Securities and Exchange Commission and certain other information, |
| | | | each of our current “named executive officers” and directors, and |
| | | | all of our current executive officers and directors as a group. |
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment power. In addition, under SEC rules, a person is deemed to be the beneficial owner of securities which may be acquired by such person upon the exercise of options and warrants or the conversion of convertible securities within 60 days from the date on which beneficial ownership is to be determined.
The term “named executive officers” is defined in the SEC rules as those executive officers who are required to be listed in the Summary Compensation Table provided in the discussion in this proxy statement concerning proposal number 1.
Except as otherwise indicated in the notes to the following table,
| we believe that all shares are beneficially owned, and investment and voting power is held by, the persons named as owners, and |
| the address for each beneficial owner listed in the table is American Vantage Companies, 4735 South Durango Drive - Suite 105, Las Vegas, Nevada 89147. |
| Name and Address of Stockholder | | Amount and Nature of Beneficial Ownership | | Percentage of Outstanding Shares | |
| Ronald J. Tassinari (1) | | | 720,329 | (2) (3) | | 12.6 | |
| Audrey K. Tassinari (4) | | | 720,329 | (2) (5) | | 12.6 | |
| Viviendi Universal Entertainment LLLP (6) | | | 524,939 | (7) | | 8.4 | |
| Engex, Inc. (8) | | | 474,500 | (9) | | 8.3 | |
| Corriente Partners, L.P., Corriente Capital Management, | | | | | | | |
| L.P., Corriente Advisors, LLC and Mark L. Hart, III (10) | | | 461,285 | (11) | | 8.1 | |
| Rosalind Davidowitz (12) | | | 437,747 | (13) | | 7.6 | |
| Jay H. and Sharyn Brown (14) | | | 348,211 | (15) | | 6.0 | |
| Blueridge Associates (2) | | | 367,279 | (2) (16) | | 6.4 | |
| White Rock Partners, Krest LLC, ET Holdings, L.L.C., | | | | | | | |
| Hampstead Associates, L.L.C., Ridgeview Associates, | | | | | | | |
| LLC, Michael R. Milken and Lowell J. Milken (17) | | | 336,505 | (2) (18) | | 5.9 | |
| Anna M. Morrison (19) | | | 140,300 | (20) | | 2.4 | |
| Jeanne Hood (21) | | | 97,501 | (2) (22) | | 1.7 | |
| Steven G. Barringer (23) | | | 65,000 | (2) (24) | | 1.1 | |
| Randolph C. Read (25) | | | 45,000 | (2) (26) | | 0.8 | |
| | | | | | | | |
| All executive officers and directors as a group | | | | | | | |
| (six persons) (27) | | | 1,785,941 | (2) (28) | | 30.1 | |
| (1) | Mr. Tassinari is our President and Chief Executive Officer. Mr. Tassinari also serves as Chairman of our board of directors. Mr. Tassinari is the husband of Audrey K. Tassinari, another director of our company. |
| (2) | Does not include 824,811 shares of our common stock held by certain stockholders who have granted our board of directors a limited power to vote such shares. These stockholders acquired such 824,811 shares in connection with the dissolution of YaYa, LLC (“YaYa”). We issued such 824,811 shares to YaYa as the consideration for the April 2003 acquisition from YaYa of certain assets and the YaYa business. Such stockholders have granted our board of directors a limited power to direct how they are to vote their aggregate 824,811 shares of our common stock pursuant to a voting agreement dated as of January 1, 2005. This power has been granted to our board as a group, and not to any individual director. We believe that such voting power is not held by any individual since our board is required to act by plurality. As such, no individual director named in this stockholder table is listed as the beneficial owner of the 824,811 shares owned by the former YaYa creditors as of the above schedule date, although such shares are included in the aggregate amount held by all executive officers and directors as a group. The stockholders include White Rock Partners (“White Rock”), which acquired 55,236 shares, Krest LLC (“Krest”), which acquired 281,269 shares, and Blueridge Associates LLC (“Blueridge”), which acquired 324,178 shares. See note (15) below for further information regarding White Rock and Krest. The address for Blueridge is c/o Maron & Sandler, 1250 Fourth Street - Suite 500, Santa Monica, California, 90401. |
| (3) | Includes (a) 3,698 shares of our common stock owned of record by Mr. Tassinari, his wife and child, as joint tenants, (b) 443,293 shares owned by the Tassinari Family Trust, a family trust in which Mr. Tassinari and his wife are trustees and beneficiaries, (c) 5,000 shares owned of record by his spouse, (d) 230,555 shares issuable upon exercise of options granted to Mr. Tassinari, which shares are exercisable within the next 60 days, and (d) 27,778 shares issuable upon exercise of options granted to Mr. Tassinari’s spouse, which shares are exercisable within the next 60 days. Mr. Tassinari disclaims beneficial ownership to the (x) 27,778 shares underlying options granted his spouse, (y) 5,000 shares owned of record by his spouse and (z) 221,646 shares held by the Tassinari Family Trust in excess of his pecuniary interest in such trust. Does not include 100,000 shares of our common stock issuable upon exercise of an option granted to Mr. Tassinari, which shares are not exercisable within the next 60 days. |
| (4) | Ms. Tassinari resigned as our Executive Vice President, effective July 31, 2002. Ms. Tassinari continues to serve as one of our directors. Ms. Tassinari is the wife of Ronald J. Tassinari. |
| (5) | Includes (a) 3,698 shares of our common stock owned of record by Ms. Tassinari, her spouse and child as joint tenants, (b) 443,293 shares owned by the Tassinari Family Trust, a family trust in which Ms. Tassinari and her husband are trustees and beneficiaries, (c) 27,778 shares issuable upon exercise of options granted to Ms. Tassinari, which shares are exercisable within the next 60 days, (d) 230,555 shares issuable upon exercise of options granted to Ms. Tassinari’s husband which are exercisable within the next 60 days and (e) 10,005 shares held of record by Ms. Tassinari’s husband. Ms. Tassinari disclaims beneficial ownership to the (x) 230,555 shares underlying options granted her husband, (y) 221,647 shares held by the Tassinari Family Trust in excess of her pecuniary interest in such trust and (z) 10,005 shares held of record by Ms. Tassinari’s husband. |
| (6) | The address for Vivendi Universal Entertainment LLLP (“Viviendi) is 100 Universal City Plaza - Building 1280-6, Universal City, California, 91608. |
| (7) | Represents 524,939 shares of our common stock issuable upon exercise of warrants held by Vivendi, which shares are exercisable within the next 60 days. |
| (8) | The address for Engex, Inc. is 44 Wall Street, New York, New York, 10005. |
| (9) | According to the Schedule 13D of Engex, Inc. filed with the SEC on July 10, 2003, Engex claims to have sole voting and dispositive power with respect to 474,500 shares of our common stock. Such amount does not include 12,300 shares owned directly by the chairman of Engex, Inc., J. Morton Davis, or 437,747 shares owned by Mr. Davis’s wife, Rosalind Davidowitz. According to the proxy statement of Engex filed with the SEC on January 11, 2005, the principal stockholders of Engex are (a) Mr. Davis, the reported beneficial owner of 6.2% of the outstanding common stock of Engex, (b) Ms. Davidowitz, the reported beneficial owner of 28.2% of the outstanding common stock of Engex, (c) Kinder Investments L.P., the reported beneficial owner of 11.2% of the outstanding common stock of Engex, and (d) Venturetek LP, the reported beneficial owner of 11.4% of the outstanding common stock of Engex. The Engex proxy statement also reports that Dov Perlysky, the managing member of the general partner of Kinder Investments, is a member of the immediate family of Mr. Davis. According to the Schedule 13G/A of Kinder Investments, Nesher, LLC and Dov Perlysky filed with the SEC on July 24, 2003, Kinder Investments is the owner of an additional 274,100 shares of our common stock and Mr. Perlysky, the managing member of the general partner of Kinder Investments, has sole voting and dispositive powers with respect to such 274,100 shares. The shares listed in the principal stockholders table are limited to those shares set forth in Schedule 13D of Engex as being beneficially owned by Engex. See Note (13) for further information with respect to Mr. Davis’ and Ms. Davidowitz’s ownership interest in our outstanding common stock. |
| (10) | The address for the Corriente Partners, L.P. (“CP”), Corriente Capital Management, L.P. (“CCM”), Corriente Advisors, LLC (“CA”) and Mark L. Hart, III (“Hart”) is 301 Commerce Street, Suite 1840, Fort Worth, Texas, 76102. |
| (11) | According to the Schedule 13G of CP, CCM, CA and Hart filed with the SEC on July 20, 2006, CCM is the sole general partner of CP, CA is the sole general partner of CCM and is the investment advisor to CP. Because of the described relationships, CCM, CA and Hart may be deemed to be the beneficial owners of the 461,285 of our common stock owned and/or held by or for the account or benefit of CP. CCM, CA and Hart expressly disclaim beneficial ownership of shares owned and/or held by or for the account or benefit of CP, except to the extent of the pecuniary interest of CCM, CA or Hart is such shares. |
| (12) | The address of Rosalind Davidowitz is 7 Sutton Place South, Lawrence, New York, 11563. |
| (13) | According to the Schedule 13G/A of Rosalind Davidowitz filed with the SEC on February 7, 2006, Ms. Davidowitz claims to have sole voting and dispositive powers with respect to 437,747 shares of our common stock owned directly by her and that she may be deemed the beneficial owner of 12,300 shares owned by J. Morton Davis, Mrs. Davidowitz’s husband. Ms. Davidowitz’s Schedule 13G/A states that Mr. Davis has the sole power to dispose or to direct the disposition of the 12,300 shares owned by him. The shares listed in the principal stockholders table are limited to those shares set forth in Ms. Davidowitz’s Schedule 13G as being beneficially owned by her. See Note (9) for further information concerning Ms. Davidowitz’s ownership interest in Engex, another stockholder of our company, and other related matters. |
| (14) | These stockholders hold 260,711 shares of our common stock of record as tenants-in-common. Mr. Brown provides legal services to us from time to time and previously served as a member of our advisory group formed to assist our management in evaluating merger and acquisition candidates. Mr. Brown received an option to purchase 87,500 shares of our common stock upon his appointment to the advisory group, which shares were to become exercisable upon consummation of a merger or acquisition transaction involving our company during the term of the advisory group. Such an acquisition transaction was consummated on April 16, 2003. The address for Mr. and Ms. Brown is 1801 Waldman Avenue, Las Vegas, Nevada, 89102. |
| (15) | Includes 87,500 shares of our common stock that are issuable upon exercise of an option granted to Mr. Brown, which shares are exercisable within the next 60 days. |
| (16) | Includes 43,101 shares of our common stock issuable upon exercise of warrants held by Blueridge, which shares are exercisable within the next 60 days. Such shares are not subject to the voting agreement referred to in note (2) above. |
| (17) | According to a Schedule 13D/A filed with the Securities and Exchange Commission on January 10, 2005 by YaYa, White Rock, Krest, ET Holdings, L.L.C. (“ET”), Hampstead Associates, L.L.C. (“Hampstead”), Ridgeview Associates, LLC (“Ridgeview)”, Michael R. Milken (“M. Milken”) and Lowell J. Milken (“L. Milken”), YaYa, the former record holder of 824,811 shares of our common stock, was dissolved. In connection with the dissolution of YaYa, the shares of our common stock held by YaYa were distributed to the creditors of YaYa, including White Rock and Krest. According to our stock records, 55,236 shares were transferred to and are currently held of record by White Rock and 281,269 were transferred to and are currently held of record by Krest. We have no knowledge, nor do our stock records show, of any shares of our common stock being transferred to or held by ET, Hampstead, Ridgeview, M. Milken or L. Milken. The Schedule 13D/A reports White Rock as having sole voting and dispositive power with respect to 55,236 shares of our common stock and Krest as having sole voting and dispositive power with respect to 281,269 shares of our common stock and shared voting and dispositive power with respect to 55,236 shares of our common stock. The Schedule 13D/A reports each of ET, Hampstead, Ridgeview, M. Milken and L. Milken as having sole voting and dispositive power with respect to no shares of our common stock and shared voting and dispositive power with respect to 336,505 shares of our common stock. The Schedule 13D/A does not provide any information regarding the relationship or agreements by which these persons and entities share any voting and dispositive power with each other, except that (a) the secretary of YaYa is Stanley E. Maron, (b) the general partner of White Rock is Mapleleaf Partners whose general manager is Mr. Maron, (c) the secretary of Krest is Mr. Maron, (d) the assistant secretary of ET holdings is Mr. Maron and (e) the manager of Hampstead is Ridgeview whose manager is M. Milken. In the original schedule 13D filed with the SEC on April 28, 2003 by YaYa, White Rock, ET, Hampstead, Ridgeview, M. Milken, L. Milken and others, (x) Hampstead is the manager of an entity, ET Consolidated, L.L.C. (“ET Consolidated”), which is the manager of ET, (y) Mr. Milken and L. Milken are each managers of Ridgeview, directors of ET, ET Consolidated and Hampstead and may be deemed a controlling person of Ridgeview. The address for each of White Rock, Krest, ET, Hampstead, Ridgeview, M. Milken and L. Milken, according to the original Schedule 13D, is 1250 Fourth Street - Suite 580, Santa Monica, California, 90401. In a letter dated December 12, 2005, our company was advised that Krest had distributed Krest’s 281,269 shares of our common stock to six of its members as follows: Arrowleaf Partners (513 shares), ET (144,774 shares), Thomas Kalinske (1,721 shares), David Kyman (23 shares), M. Milken (4,988 shares) and Mollusk Holdings LLC (129,250 shares). |
| (18) | Does not include (a) 102,183 shares of our common stock issuable upon exercise of warrants held by Knowledge Universe (“KU”), which shares are exercisable within the next 60 days, (b) 60,114 shares of our common stock issuable upon exercise of warrants held by Blue Rock Partners (“BRP”), which shares are exercisable within the next 60 days, and (c) 8,620 shares of our common stock issuable upon exercise of warrants held by Pinecrest Associates, LLC (“PA”), which shares are exercisable within the next 60 days. We believe that KU, BRP and/or PA may be affiliates of one or more of White Rock, Krest, ET, Hampstead, Ridgeview, M. Milken and L. Milken. |
| (19) | Ms. Morrison became our Chief Accounting Officer on April 16, 2003. |
| (20) | Includes 106,000 shares of our common stock issuable upon exercise of an option granted to Ms. Morrison, which shares are exercisable within the next 60 days. |
| (21) | Ms. Hood is a director of our company. |
| (22) | Includes 80,834 shares of our common stock issuable upon exercise of options granted to Ms. Hood that are exercisable within the next 60 days. |
| (23) | Mr. Barringer is a director of our company. |
| (24) | Represents 65,000 shares of our common stock issuable upon exercise of options granted to Mr. Barringer, which shares are exercisable within the next 60 days. |
| (25) | Mr. Read is a director of our company. |
| (26) | Includes 45,000 shares of our common stock issuable upon exercise of an option granted to Mr. Read, which shares are exercisable within the next 60 days. |
| (27) | Includes only current executive officers and directors. |
| (28) | Includes those shares beneficially owned by our current executive officers and directors, as set forth in notes (3), (5), (20), (22), (24) and (26). |
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
Our board of directors currently is divided into three classes. Under our bylaws as currently in effect, each class of directors is to be as nearly equal in number as possible, with no class having fewer than 25% of the total number of our directors. Each director, no matter what class, is elected to serve for a three-year term, unless the director shall resign, become disqualified, disabled or shall otherwise be removed from office. Only a plurality of votes cast is necessary for the election of directors.
Set forth below are the members of each class of our directors and the year in which the term of each director class expires.
Class A | Class B | Class C |
(To Serve Until | (To Serve Until | (To Serve Until |
the Annual Meeting | the Annual Meeting | the Annual Meeting |
of Stockholders in 2007) | of Stockholders in 2006) | of Stockholders in 2008) |
| Audrey K. Tassinari | Randolph C. Read | Steven G. Barringer |
| Ronald J. Tassinari | | Jeanne Hood |
Director-Nominees for the 2006 Annual Meeting
The independent directors, as such term is defined in the Marketplace Rules of The Nasdaq Stock Market, of our board of directors, have nominated Randolph C. Read for election at the annual meeting as our sole Class B director.
Shares represented by executed proxy cards in the form accompanying this proxy statement will be voted, if authority to do so is not withheld, for the election of Randolph C. Read as the Class B director of our company, unless such nominee shall be unavailable, in which case such shares will be voted for a substitute nominee designated by our board of directors. Our board of directors has no reason to believe that Mr. Read will be unavailable or, if elected, will decline to serve.
Our board of directors has not established a nominating committee, nor did it adopt a nominating committee charter. Our board believes that its size negates the need for establishing a separate nominating committee. However, all of our board’s nominees for election as directors of our company are approved by our directors who meet the definition of “independent” under the Marketplace Rules of The Nasdaq Stock Market. Those independent directors consist of Steven G. Barringer, Jeanne Hood and Randolph C. Read.
Our independent directors will consider recommendations for election as directors submitted by our stockholders. These recommendations will be discussed at board meetings and appropriate candidates will be invited to meet with our independent directors and entire board to discuss their qualifications for serving on our board. Our board has not established minimum qualifications for candidates recommended by our stockholders. Any determination to include a stockholder-recommended candidate as a board nominee remains a subjective determination to be made by our independent directors.
Information Concerning Our Directors and Executive Officers
Set forth below is a brief description of the background of each of our current directors and executive officers, based on information provided to us by them.
| | | Principal Positions and | Director |
Name | Age | Offices with our Company | Since |
| | | | |
| Ronald J. Tassinari | 63 | Chief Executive Officer, President, Chairman of the Board of | 1979 |
| | | Directors | |
| Steven G. Barringer | 50 | Director (Corporate Governance Liaison) | 1998 |
| Jeanne Hood | 78 | Director (Chairwoman of the Audit Committee) | 1994 |
| Randolph C. Read | 54 | Director (Chairman of the Compensation and Acquisition Committees) | 2003 |
| Audrey K. Tassinari | 66 | Director | 1985 |
| Anna M. Morrison | 50 | Chief Accounting Officer | n/a |
Ronald J. Tassinari, an original founder of our company, has served as our chief executive officer, president and chairman of our board of directors since our company’s inception in August 1979. Mr. Tassinari also is a member of our advisory group formed to evaluate mergers and acquisitions candidates. Mr. Tassinari is the husband of Audrey K. Tassinari, another director of our company.
Steven G. Barringer has served as a director of our company since February 1998 and our corporate governance liaison since July 2003. Mr. Barringer has been a member of Holland & Hart LLP since April 2006. Mr. Barringer was a member of the government relations firm of MGN, Inc. in Washington, D.C. from November 2000 to April 2006. Mr. Barringer also has maintained his own law practice, Steven G. Barringer, P.L.L.C., in Washington, D.C. since November 2000.
Jeanne Hood has been a director of our company since February 1994 and chairman of our audit committee since March 2002. Ms. Hood was a gaming consultant to our company from February 1994 to April 2000. Ms. Hood served as a director of Pioneer Citizens Bank (a Nevada statewide bank) until its merger in 2000 with Zions, a large regional bank with offices in seven states. Since January 2000, she has served on the board of Southwest USA Bank.
Randolph C. Read was elected to our board of directors in May 2003. He has been president and chief executive officer of American Strategic Investments, L.P., an investment fund that focuses on established commercial business operations and investing in both debt and/or equity of those entities, since 2002. Mr. Read served as president of Knowledge Universe Business Group and president of Knowledge Universe Capital Co. from 1999 to 2002.
Audrey K. Tassinari has been a director of our company since March 1985. Ms. Tassinari served as our executive vice president from April 1986 until July 2002, when she resigned such position in connection with our corporate restructuring. During her tenure as an officer of our company, she was responsible for our management and employee training programs at Table Mountain Casino that grew from approximately 45 employees in 1989 to 850 employees in 1999. From 1973 to 1985, Ms. Tassinari held key management positions in the hotel/casino industry. Ms. Tassinari is the wife of Ronald J. Tassinari, our Chief Executive Officer and President.
Anna M. Morrison was appointed our chief accounting officer in April 2003. From August 2002 to April 2003, she provided financial and accounting services to us as an outside consultant. She was president of Morrison Business Resources, Inc. and an associate with Resources Connection, Inc. and Robert Half International, Inc. from 1997 to August 2002. Ms. Morrison served as a manager and an associate for Price Waterhouse LLP, a predecessor of PricewaterhouseCoopers LLP from 1987 to 1992 and from 1993 to 1996. Ms. Morrison is a certified public accountant.
Director Compensation
Non-employee directors receive $15,000 per annum for serving on our board of directors.
Jeanne Hood and Randolph C. Read each received an annual payment of $10,000 for serving as the chairpersons for the audit and compensation committees. Steven G. Barringer also received an annual payment of $10,000 for serving as our corporate governance liaison. In 2005, our board created an acquisition committee consisting of Randolph C. Read and Ronald J. Tassinari to identify and investigate possible acquisition targets. Mr. Read receives a monthly fee of $10,000 for serving as chairman of the acquisition committee.
We also reimburse our directors for their reasonable expenses incurred in attending meetings of our board of directors.
We also refer you to the subsection entitled “Certain Relationships and Transactions” for additional information concerning other compensation we have paid, or have agreed to pay, to certain of our directors in consideration for other services performed, or to be performed, on our behalf.
Committees of Our Board of Directors
Our board of directors has established three standing committees to assist it in the discharge of the board’s duties; an audit committee, a compensation committee and an acquisitions committee.
Our audit committee currently is composed of Jeanne Hood, Randolph C. Read and Steven G. Barringer, with Ms. Hood serving as its chairwoman. We believe that each of these committee members are “independent,” within the meaning of such term under Rule 4200(a)(15) of the Marketplace Rules of The Nasdaq Stock Market, Inc. and that Ms. Hood is an “audit committee financial expert” as defined in Item 401(e) of Regulation S-B promulgated by the SEC. The duties of our audit committee include recommending the engagement of independent auditors, reviewing and considering actions of management in matters relating to audit functions, reviewing with independent auditors the scope and results of its audit engagement, reviewing reports from various regulatory authorities, reviewing our system of internal controls and procedures and reviewing the effectiveness of our procedures intended to prevent violations of law and regulations. A copy of the charter for our audit committee was attached as appendix A to the proxy statement for our 2004 annual meeting of stockholders.
Our compensation committee currently is composed of Randolph C. Read, Steven G. Barringer and Jeanne Hood, with Mr. Read serving as its chairman. The duties of our compensation committee include recommending to the full board of directors remuneration to be paid our executive officers, determining the number and conditions to awards/options granted pursuant to our various stock plans and recommending the establishment of and monitoring a compensation and incentive program for all of our executive officers. Our compensation committee also administers our 2004 Employee Stock Purchase Plan.
The acquisition committee, consisting of Randolph C. Read and Ronald J. Tassinari, was created by the board in 2005 to identify and investigate possible acquisition targets.
Stockholder Communications
Stockholders wishing to communicate with our board, other than to submit proposals for action at meetings of our stockholders pursuant to SEC Rule 14a-8, should do so in writing, addressed to “Steven G. Barringer, Independent Director and Corporate Governance Liaison, American Vantage Companies, P.O. Box 81920, Las Vegas, Nevada 89180.” The envelope delivering such written communications should be marked “Stockholder Communication.”
Meetings of the Board of Directors and its Committees
Our board of directors held seven formal meetings and took action by written consent in lieu of a meeting on no occasions during our fiscal year ended December 31, 2005. Our audit committee held four formal meetings and our compensation committee held no formal meetings and took action by written consent in lieu of a meeting on one occasion during our 2005 fiscal year. Each member of our board of directors attended, in person or telephonically, at least 75% of the total number of meetings of our board and each committee of the board on which the director serves.
Our board has not established any procedure with respect to director attendance at our annual meetings of stockholders. Except for Stephen G. Barringer, all of our directors were present at our annual meeting of stockholders held on December 8, 2005.
Audit Committee Report
This report of the audit committee of our board of directors does not constitute soliciting material and shall not be deemed filed or incorporated by reference into any of our other filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate this report by reference in such other filings.
The audit committee of our board of directors consists of three members, all of whom we believe meet the definition of “independent” under the listing standards of The Nasdaq Stock Market, Inc. as currently in effect. None of the audit committee members is a current officer or employee of our company. We further believe that each member of the audit committee has the expertise and experience to adequately serve our stockholders’ interests while serving on the audit committee.
Our board of directors has adopted a written charter for the audit committee. The charter is reviewed and reassessed periodically by our board and the audit committee. The charter sets forth the responsibilities, authority and specific duties of the audit committee. The charter also specifies, among other things, the structure and membership requirements of the audit committee, as well as the relationship of the audit committee to our independent accountants and management. A copy of the audit committee charter was included as appendix A to the proxy statement for our 2004 annual meeting of stockholders.
The audit committee charter notes that management is responsible for the preparation and integrity of our financial statements, as well as establishing appropriate internal controls and the financial reporting processes. Deloitte & Touche LLP is responsible for performing an independent audit of our financial statements and issuing a report on such financial statements. The audit committee’s responsibility is to monitor and oversee these processes.
The audit committee reviewed our audited financial statements for the year ended December 31, 2005 and met with both management and the independent auditors, separately and together, to discuss such financial statements. Management and the auditors have represented to the audit committee that the financial statements were prepared in accordance with accounting principles generally accepted in the United States. The audit committee also received written disclosures and a letter from our auditors regarding their independence from us, as required by Independence Standards Board Standard No. 1 and discussed with the auditors such auditors’ independence with respect to all services that it rendered to us. The audit committee also discussed with the auditors any matters required to be discussed by Statement on Statement on Auditing Standards No. 61, as amended by Statement on Auditing Standards No. 90. Based upon these reviews and discussions, the audit committee recommended to our board of directors that the audited financial statements be included in our Annual Report on Form 10-KSB for the year ended December 31, 2005.
The Audit Committee of the Board of Directors
of American Vantage Companies
Jeanne Hood, Chairwoman
Steven G. Barringer
Randolph C. Read
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely upon a review of Forms 3, 4 and 5 and amendments to these forms furnished to us, together with written representations received by us from applicable parties that no Form 5 was required to be filed by such parties, all parties subject to the reporting requirements of Section 16(a) of the Exchange Act filed all such required reports during and with respect to our fiscal year ended December 31, 2005.
Executive Compensation
The following table sets forth, with respect to our fiscal years ended December 31, 2005, December 31, 2004 and December 31, 2003, all compensation earned by our chief executive officer and our other officers who were serving as executive officers of our company as of the close of business on December 31, 2005 and whose total annual salary and bonus earned during the fiscal year ended December 31, 2005 exceeded $100,000. In February 2004, we changed our fiscal year to end on December 31 from July 31 of each calendar year. Due to the overlap of periods constituting the twelve months ended December 31, 2003 and the fiscal year ended July 31, 2003, information included in the twelve month period ended December 31, 2003 may be duplicative of information included in the fiscal year ended July 31, 2003.
Summary Compensation Table
| | | Annual Compensation | | | | |
| Name and Principal Position(s) | | | Period | | | Salary | | | Bonus | | | | | | Securities Underlying Options | |
| Ronald J. Tassinari, | | | Fiscal year ended 12/31/05 | | $ | 316,857 | | $ | - | | $ | 41,000(1 | ) | | - | |
| Chief Executive Officer | | | Fiscal year ended 12/31/04 | | | 300,923 | | | - | | | 41,000(1 | ) | | - | |
| and President | | | Twelve months ended 12/31/03 | | | 287,857 | | | 100,000 | | | 40,000(3 | ) | | 275,000(4 | ) |
| | | Fiscal year ended 7/31/03 | | | 272,473 | | | - | | | 40,000(3 | ) | | 25,000(7 | ) |
| | | | | | | | | | | | | | | | | |
| Anna M. Morrison, | | | Fiscal year ended 12/31/05 | | $ | 208,462 | | $ | - | | $ | 41,000(1 | ) | | 50,000(2 | ) |
| Chief Accounting Officer | | | Fiscal year ended 12/31/04 | | | 160,308 | | | - | | | 41,000(1 | ) | | - | |
| | | Twelve months ended 12/31/03 | | | 92,349 | | | 15,000 | | | 25,539(5 | ) | | 60,000(6 | ) |
| | | Fiscal year ended 7/31/03 | | | 33,798 | | | - | | | 8,808(8 | ) | | 50,000(9 | ) |
| (1) | Includes SAR/SEP retirement plan contributions totaling $41,000 we made on the named executive officer’s behalf. |
| (2) | Represents options to purchase 50,000 of our company’s common stock at an exercise price of $0.93. |
| (3) | Includes SAR/SEP retirement plan contributions totaling $40,000 we made on the named executive officer’s behalf. |
| (4) | Represents option to purchase 25,000 of our company’s common stock at an exercise price of $1.41 per share and 250,000 shares at an exercise price of $2.87 per share. |
| (5) | Includes SAR/SEP retirement plan contributions totaling $25,539 we made on the named executive officers’ behalf. |
| (6) | Represents options to purchase 50,000 of our company’s common stock at an exercise price of $1.41 per share and 10,000 shares at an exercise price of $2.87 per share. |
| (7) | Represents an option to purchase 25,000 of our company’s common stock at an exercise price of $1.41 per share. |
| (8) | Includes SAR/SEP retirement plan contributions totaling $8,808 we made on the named executive officer’s behalf. |
| (9) | Represents an option to purchase 50,000 of our company’s common stock at an exercise price of $1.41 per share. |
Option Grants in Last Fiscal Year
The following table sets forth:
| | · | The number of shares underlying options we granted during the twelve months ended December 31, 2005, December 31, 2004, December 31, 2003 and our fiscal year ended July 31, 2003 to each of the named executive officers listed in the Summary Compensation Table contained in the “Executive Compensation” subsection of this Form 10-KSB, |
| | · | The percentage that the option grant represents of the total options granted to all of our employees during the twelve month periods and our 2003 fiscal year, |
| | · | The per share exercise price of each option, |
| | · | and the expiration date of each option. |
In February 2004, we changed our fiscal year to end on December 31 from July 31 of each calendar year. Due to the overlap of periods constituting the twelve months ended December 31, 2003 and the fiscal year ended July 31, 2003, information included in the twelve month period ended December 31, 2003 may be duplicative of information included in the fiscal year ended July 31, 2003.
| Name | | Period | | Number of Securities Underlying Options Granted | | Percentage of Total Options Granted to All Employees in Fiscal Year | | Exercise Price | | Expiration Date | |
| | | | | | | | | | | | |
| Ronald J. Tassinari | | | Fiscal year ended 12/31/05 | | | 0 | | | 0.0 | % | $ | — | | | — | |
| | | Fiscal year ended 12/31/04 | | | 0 | | | 0.0 | | | — | | | — | |
| | | Twelve months ended 12/31/03 | | | 25,000 | | | 4.9 | | | 1.41 | | | 04/15/13 | |
| | | | | | | 250,000 | | | 49.0 | | | 2.87 | | | 12/10/13 | |
| | | Fiscal year ended 7/31/03 | | | 25,000 | | | 9.1 | | | 1.41 | | | 04/15/13 | |
| | | | | | | | | | | | | | | | | |
| Anna M. Morrison | | | Fiscal year ended 12/31/05 | | | 50,000 | | | 100.0 | | | 0.93 | | | 12/20/15 | |
| | | Fiscal year ended 12/31/04 | | | 0 | | | 0.0 | | | — | | | — | |
| | | Twelve months ended 12/31/03 | | | 50,000 | | | 9.8 | | | 1.41 | | | 04/15/13 | |
| | | | | | | 10,000 | | | 2.0 | | | 2.87 | | | 12/10/13 | |
| | | Fiscal year ended 7/31/03 | | | 50,000 | | | 18.2 | | | 1.41 | | | 04/15/13 | |
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values
None of the named executive officers listed in the Summary Compensation Table contained in the “Executive Compensation” subsection of this proxy statement exercised any of their options during our fiscal year ended December 31, 2005.
The following table sets forth:
| | | | the total number of unexercised options held, as of December 31, 2005, by each of the named executive officers listed in the Summary Compensation Table contained in the “Executive Compensation” subsection of this proxy statement, separately identified between those exercisable and those not exercisable, and |
| | | | the aggregate value of in-the-money, unexercised options held, as of December 31, 2005, by each of the named executive officers, separately identified between those exercisable and those not exercisable. |
| Name | | Shares Acquired on Exercise | | Value Realized | | Number of Securities Underlying Unexercised Options at FY-End Exercisable / Unexercisable (1) | | Value of Unexercised In-The-Money Options at FY-End ($) Exercisable / Unexercisable (1) | |
| | | | | | | | | | |
| Ronald J. Tassinari | | | 0 | | $ | 0 | | | 180,555 / 150,000 | | $ | 0 / $0 | |
| | | | | | | | | | | | | | |
| Anna M. Morrison | | | 0 | | $ | 0 | | | 79,000 / 31,000 | | $ | 23,250 / $23,250 | |
The value of unexercised in-the-money options is calculated by subtracting the aggregate exercise price of the options from the aggregate market price of the shares underlying the options as of December 31, 2005 of $0.93 per share.
Employment and Severance Agreements
Effective January 1, 2006, we entered into a new employment agreement with Ronald J. Tassinari. We entered into this new employment agreement in order to comply with new Internal Revenue Code rules and regulations concerning recognition of deferred income. With the exception of the timing of certain severance payments, the new employment agreement has substantially similar compensation and other provisions as provided in Mr. Tassinari’s old employment agreement. Mr. Tassinari’s January 2006 employment agreement provides for him to continue to serve as our company’s Chief Executive Officer and President. The January 2006 agreement with Mr. Tassinari provides, among other matters, for (a) an initial annual base salary of $326,400, subject to adjustments in the event of increases we provide to any of our other executives or increases in a specified cost-of-living index, (b) reimbursement for his personal legal and financial consulting expenses up to a maximum of 3% of his prior calendar year’s base salary, (c) his right to designate the beneficiary on a $2,000,000 term life policy on his life and (d) reimbursement of all normal expenses relating to the use of his personal automobile. We also retained the right in the January 2006 employment agreement to otherwise increase Mr. Tassinari’s base salary and grant Mr. Tassinari other incentive compensation, such as stock options or bonuses. Mr. Tassinari’s January 2006 agreement also contains indemnification provisions relating to his performance of services on our behalf, and confidentiality, non-disparagement, non-competition and non-solicitation provisions.
Mr. Tassinari’s January 2006 employment agreement further provides that, upon his death during the agreement’s term, we are obligated to pay his designee or estate a lump sum death benefit equal to the sum of (a) the annualized average of the base salary paid to him during the five calendar years immediately preceding his death, plus (b) the annualized average of the incentive awards granted to him during the five calendar years immediately preceding his death. The January 2006 agreement also provides for disability coverage, including continuing to pay him his base salary and keeping in effect any incentive awards during an initial period and then continuing to pay him for a one-year period at a rate equal to the annualized average of the base salary, plus the value of any incentive compensation, paid to him during the prior five calendar years.
Mr. Tassinari’s January 2006 employment agreement provides for payments in the event of his termination “without cause” or if he terminates his employment for “good reason,” including if he terminates his employment following a “change in control” of our company, as such terms are defined in the agreement. These payments include (a) payment of a sum equal to 2.99 times the annualized average of the base salary, plus the value of any incentive compensation, paid to him during the prior five calendar years, (b) reimbursement of certain legal fees up to $100,000, (c) continuation of, or the payment of an amount equal in value to, all employee benefits which he was entitled to receive immediately prior to termination for the remaining term of the employment agreement and (d) continuation of, or the payment of an amount equal in value to, all medical insurance coverage for him and his family for a twelve month period following termination. The maximum amount of all of these payments may not exceed the amount which would otherwise result in an “excess parachute payment” under section 280G of the Internal Revenue Code, minus $1.00.
We entered into a new employment agreement with Anna M. Morrison, our Chief Accounting Officer, as of January 1, 2006. We entered into this new employment agreement in order to comply with new Internal Revenue Code rules and regulations concerning recognition of deferred income. With the exception of the timing of certain severance payments, the new employment agreement has substantially similar compensation and other provisions as provided in Ms. Morrison’s old employment agreement. This agreement has a term expiring on December 31, 2006 (subject to extension) and provides for a base salary of $215,500 per year. We have the right under this agreement to increase Ms. Morrison’s base salary and to grant her incentive compensation, such as additional options or bonuses. Ms. Morrison’s agreement contains severance or “golden parachute” provisions providing for payments equal to 100% of Ms. Morrison’s base salary as in effect on the date of such termination, if she is terminated without cause or she terminates her employment following a change in control of our company.
Our Stock Plans and Other Outstanding Options and Warrants
We currently have outstanding options granted under four stock plans, our 1991 Officers Stock Option Plan, 1992 Employee Stock Option Plan, 1996 Stock Option Plan and 2003 Nonqualified Stock Option Plan. There were 11,696 shares of our common stock issuable upon exercise of options granted under the 1991 plan, 83,970 shares issuable upon exercise of options granted under the 1992 plan, 693,335 shares issuable upon exercise of options granted under the 1996 plan, and 340,000 shares issuable upon exercise of options granted under the 2003 plan, each as of the record date for the annual meeting. We are no longer able to grant additional options under the 1991, 1992 and 1996 plans, in accordance with the terms of such plans. The 2003 plan has available for issuance 410,000 shares of our common stock, in addition to the shares underlying options outstanding as of the record date for the annual meeting.
The following table sets forth, as of December 31, 2005:
| | | | the number of shares of our common stock issuable upon exercise of outstanding options, warrants and rights, separately identified by those granted under equity incentive plans approved by our stockholders and those granted under plans, including individual compensation contracts, not approved by our stockholders (column A), |
| | | | the weighted average exercise price of such options, warrants and rights, also as separately identified (column B), and |
| | | | the number of shares remaining available for future issuance under such plans, other than those shares issuable upon exercise of outstanding options, warrants and rights (column C). |
| | Column A | | Column B | | Column C | |
| | | Number of shares to be issued upon exercise of outstanding options, warrants and rights | | Weighted average exercise price of outstanding options, warrants and rights | | Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in Column A) | |
| | | | | | | | |
| Equity incentive plans | | | 1,229,001 | | $ | 2.08 | | | 410,000 | |
| approved by stockholders | | | | | | | | | | |
| | | | | | | | | | | |
| Equity incentive plans not | | | 25,000 | | | 1.65 | | | Not applicable | |
| approved by stockholders | | | | | | | | | | |
| | | | | | | | | | | |
| Totals | | | 1,254,001 | | $ | 2.06 | | | 410,000 | |
The shares to be issued upon exercise of outstanding options, warrants and rights granted under plans not approved by stockholders consist of:
| | | 25,000 warrants granted to Gerard, Klauer, Mattison, Inc. on May 3, 2002 in connection with such firm’s rendering of investment banking services to our company. Each of these warrants entitles its holder to purchase one share of our common stock, at a purchase price of $1.65 per share and expires on May 3, 2007. |
Certain Relationships and Related Transactions
As compensation for serving on our board or as a board committee chair, on December 21, 2005, we granted to each of Steven G. Barringer, Jeanne Hood and Randolph C. Read non-qualified stock options to purchase 30,000 of our company’s common stock each at an exercise price of $0.93 per share. One-third of the options became exercisable on the date of grant and one-third become exercisable on each of the first and second anniversary of the date of grant. The options expire upon the earlier of (i) ten years from the date of grant or (ii) the removal or resignation of such person as a director of our company.
Effective June 30, 2004, our company arranged with SouthwestUSA Bank (“SouthwestUSA”) a $2,500,000 credit facility. Jeanne Hood, a director of our company, is a director of SouthwestUSA. At April 5, 2005, our company paid the SouthwestUSA Line of Credit principal balance of $2,500,000 by surrendering the $2,500,000 certificate of deposit held as collateral for the SouthwestUSA Line of Credit.
See the subsection entitled “Employment and Severance Agreements” for a discussion of our employment agreements with Ronald J. Tassinari and Anna M. Morrison.
Recommendation of Our Board of Directors
Our board of directors recommends that stockholders vote FOR the election as the Class B director of the board’s nominee as listed above.
INDEPENDENT ACCOUNTANTS
Effective May 4, 2006, Piercy Bowler Taylor & Kern was appointed as our independent certified public accountants. With respect to our fiscal year ended December 31, 2005, Deloitte and Touche LLP served as our independent certified public accountants. Representatives of Piercy Bowler Taylor & Kern are expected to be present at the annual meeting, will have the opportunity to make a statement, if they desire to do so, and are expected to be available to respond to appropriate questions.
During our two most recent fiscal years, there were no disagreements between us and Deloitte & Touche, whether or not resolved, on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to such accounting firm’s satisfaction would have caused such accounting firm to make reference to the subject matter of the disagreement(s) in connection with its reports.
Principal Accountant Fees and Services
The following table sets forth the fees billed by our independent accountants for the years ended December 31, 2005 and 2004 for the categories of services indicated.
| Category | | 2005 | | 2004 | |
| | | | | | |
| Audit fees (1) | | $ | 209,000 | | $ | 182,000 | |
| Audit-related fees (2) | | | 0 | | | 9,000 | |
| Tax fees (3) | | | 83,000 | | | 22,000 | |
| All other fees (4) | | | 0 | | | 0 | |
| | (1) | Consists of fees billed for the audit of our financial statements, review of financial statements included in our Quarterly Reports on Form 10-QSB and services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements. |
| | (2) | Consists of assurance and related services that are reasonably related to the performance of the audit and reviews of our financial statements that are not included in “audit fees” in this table. |
| | (3) | Consists of professional services rendered for tax preparation, compliance, advice, and planning. |
| | (4) | Our current and previous independent certified public accountants, Piercy Bowler Taylor & Kern and Deloitte & Touche LLP, respectively, did not provide any other services during the two most recent fiscal years. |
Audit Committee Pre-Approval Policy
In addition to auditing our consolidated financial statements for our fiscal year, we may also retain our certified public accountants to provide other auditing and advisory services to us. We understand the need for our certified public accountants to maintain objectivity and independence in its audit of our financial statements. To minimize relationships that could appear to impair the objectivity of our accountants, our audit committee has restricted the non-audit services that they may provide to us primarily to tax services and merger and acquisition due diligence and audit services, and has determined that we would obtain even these non-audit services from our accountants only when the services offered thereby are more effective or economical than services available from other service providers.
Our audit committee also has adopted policies and procedures for pre-approving all non-audit work performed by our accountants and any other accounting firms we may retain. Specifically, the audit committee has pre-approved the use of our certified public accountants for detailed, specific types of services within the following categories of non-audit services: merger and acquisition due diligence and audit services; tax services; internal control reviews; and reviews and procedures that we request to be undertaken to provide assurances of accuracy on matters not required by laws or regulations. Our audit committee has designated its chairperson, Jeanne Hood, to pre-approve permissible non-audit services provided by the independent registered public accounting firm. Generally, the entire audit committee pre-approves audit services to be performed on quarterly and annual financial statements. The chairperson presents all pre-approved services to the full audit committee for their review and ratification. The percentage of services set forth above in the categories “Audit fees,” “Audit-related fees,” “Tax fees” and “All other fees” that were approved by our audit committee was 100%. The audit committee may also pre-approve particular services on a case-by-case basis.
OTHER MATTERS
Our board of directors is not aware of any business to be presented at the annual meeting, other than the matters set forth in the notice of annual meeting and described in this proxy statement. If any other business does lawfully come before the annual meeting, it is the intention of the persons named in the enclosed proxy card to vote on such other business in accordance with their judgment.
EXPENSES OF SOLICITATION
We will pay the cost of soliciting proxies for the annual meeting. In addition to soliciting by mail, our directors, officers and other employees may solicit proxies in person, or by telephone, facsimile transmission or other means of electronic communication. We also will pay brokers, nominees, fiduciaries and other custodians their reasonable fees and expenses for sending proxy materials to beneficial owners and obtaining their voting instructions.
STOCKHOLDER PROPOSALS
Stockholder Proposals for Inclusion in Next Year’s Proxy Statement
To be considered for inclusion in our next year’s proxy statement, stockholder proposals must be received at our principal executive offices no later than the close of business on June 26, 2007. Proposals should be addressed to Ronald J. Tassinari, President and Chief Executive Officer, American Vantage Companies, P.O. Box 89180, Las Vegas, Nevada, 89128.
Other Stockholder Proposals for Presentation at Next Year’s Annual Meeting
For any proposal that is not submitted for inclusion in our next year’s proxy statement, but is instead sought to be presented directly at next year’s annual meeting, SEC rules will permit management to vote proxies in its discretion if we:
| | | receive notice of the proposal before the close of business on September 7, 2007 and advise our stockholders in our proxy statement for next year’s annual meeting about the nature of the matter and how management intends to vote on such matter, or |
| | | do not receive notice of the proposal prior to the close of business on September 7, 2007. |
Notices of intention to present proposals at next year’s annual meeting should be addressed to Ronald J. Tassinari, President and Chief Executive Officer, American Vantage Companies, P.O. Box 89180, Las Vegas, Nevada, 89128.
AVAILABILITY OF OUR FORM 10-KSB
We will provide without charge to any stockholder as of the record date, copies of our Annual Report on Form 10-KSB, upon written request delivered to Ronald J. Tassinari, President and Chief Executive Officer, American Vantage Companies, P. O. Box 89180, Las Vegas, Nevada 89128.
By order of the Board of Directors,
/s/ Jeanne Hood
Jeanne Hood, Assistant Secretary
Las Vegas, Nevada
November 6, 2006
American Vantage Companies
The undersigned hereby appoints Ronald J. Tassinari and Anna M. Morrison, or either of them, attorneys and proxies with full power of substitution in each of them, in the name and stead of the undersigned, to vote as proxy all the shares of the undersigned in American Vantage Companies, a Nevada corporation (the “Corporation”), at the 2006 Annual Meeting of the Stockholders of the Corporation, scheduled to be held on December 11, 2006, and any adjournments or postponements thereof, as follows:
This proxy is being solicited on behalf of the Board of Directors of the Corporation. The board recommends a vote FOR the listed director-nominee.
| 1. | Election of the following nominee to Class B of the Board of Directors of the Corporation: |
Randolph C. Read
o FOR the nominee listed above o WITHHOLD authority to vote for the nominee
| 2. | Upon such other business as may properly come before the Annual Meeting or any adjournment thereof: |
o GRANT AUTHORITY o WITHHOLD AUTHORITY
THE SHARES REPRESENTED HEREBY SHALL BE VOTED BY THE PROXIES, OR EITHER OF THEM, AS SPECIFIED AND, IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED FOR THE ABOVE-LISTED DIRECTOR-NOMINEE AS SET FORTH ON THE REVERSE HEREOF. RECEIPT OF THE CORPORATION’S PROXY STATEMENT, DATED NOVEMBER 6, 2006, IS HEREBY ACKNOWLEDGED.
Dated: _________, 2006
| | _________________________________________________________________ [L.S.] |
| | |
| | _________________________________________________________________ [L.S.] |
| | (Note: Please sign exactly as your name appears hereon. Executors, administrators, trustees, etc. should so indicate when signing, giving full title as such. If signer is a corporation, execute in full corporate name by authorized officer. If shares are held in the name of two or more persons, all should sign.) |
PLEASE MARK, DATE, SIGN AND RETURN
THIS PROXY IN THE ACCOMPANYING ENVELOPE
