UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 o
Check the appropriate box:
o Preliminary Proxy Statement | o Confidential, For Use of the |
x Definitive Proxy Statement | Commission Only (as permitted by |
o Definitive Additional Materials | Rule 14a-6(e)(2)) |
o Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 |
GLOBAL ENTERTAINMENT CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
| x | No fee required. |
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| 1) | Title of each class of securities to which transaction applies: |
| 2) | Aggregate number of securities to which transaction applies: |
| 3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| 4) | Proposed maximum aggregate value of transaction: |
| 5) | Total fee paid: |
| o | Fee paid previously with preliminary materials: |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
| 1) | Amount previously paid: |
| 2) | Form, Schedule or Registration Statement No.: |
| 3) | Filing Party: |
| 4) | Date Filed: |
GLOBAL ENTERTAINMENT CORPORATION
1600 North Desert Drive, Suite 301
Tempe, AZ 85281
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 15, 2009
To the shareholders of Global Entertainment Corporation:
You are hereby notified that Global Entertainment Corporation (the Company) will hold an annual meeting (the Meeting) of its shareholders on October 15, 2009, at 9:00 a.m. at 1600 North Desert Drive, Suite 301, Tempe, AZ 85281. Only shareholders of the Company may attend the Meeting. Shareholders who own shares registered in their names will be admitted to the Meeting upon verification of record share ownership. Shareholders who own shares through banks, brokerage firms, nominees or other account custodians must present proof of beneficial share ownership (such as a brokerage account statement) to be admitted.
The following items of business will be addressed at the Meeting:
1. The election of seven members to the Board of Directors to serve until the next annual meeting of shareholders and until their successors are elected;
2. To ratify the selection of Semple, Marchal & Cooper, LLP to serve as our independent registered public accounting firm for the fiscal year ending May 31, 2010; and
3. To transact such other business as may properly come before the Meeting or any postponements or adjournments thereof. Management is presently aware of no other business to come before the Meeting.
Details relating to the above proposals are set forth in the attached Proxy Statement. All shareholders of record of our common stock as of the close of business on August 24, 2009, will be entitled to notice of and to vote at the Meeting and any adjournment or postponements thereof.
A copy of our 2009 Annual Report to Shareholders is enclosed. Management cordially invites you to attend the Meeting. Please mark, sign, date and promptly return the enclosed proxy card so that your shares can be voted, regardless of whether you expect to attend the Meeting. If you attend, you may withdraw your proxy and vote in person.
By Order of the Board of Directors,
James Domaz
Secretary
Tempe, Arizona
September 18, 2009
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON OCTOBER 15, 2009:
This Proxy Statement, including the Notice of Annual Meeting of Shareholders, the Company’s 2009 Annual Report and the Annual Report on Form 10-K are each available on the Internet at www.cfpproxy.com/6383.
GLOBAL ENTERTAINMENT CORPORATION
1600 North Desert Drive, Suite 301
Tempe, AZ 85281
PROXY STATEMENT
GENERAL
Our Board of Directors is providing this Proxy Statement in connection with the solicitation of proxies to be voted at the Annual Meeting of Shareholders (the Meeting) to be held on October 15, 2009 at 9:00 a.m., local Arizona time, at 1600 North Desert Drive, Suite 301, Tempe, AZ 85281, and at any adjournments or postponements of the Meeting. This Proxy Statement and accompanying notice of the Meeting are first being mailed to shareholders on or about September 18, 2009.
At our Annual Meeting, shareholders will act upon the matters outlined in the notice of meeting on the cover page of this Proxy Statement, including the election of directors and the ratification of the appointment of our independent registered public accounting firm. In addition, management will report on the performance of the Company and respond to questions from shareholders.
VOTING RIGHTS AND COST OF MAILING
Our common stock is the only type of security entitled to vote. On August 24, 2009, the record date for determination of shareholders entitled to vote, we had 6,633,112 shares of common stock outstanding. Each shareholder of record on the record date was entitled to one vote for each share of common stock held by such shareholder on that date. Shares of common stock may not be voted cumulatively.
The shares represented by all proxies that are properly executed and submitted will be voted at the Meeting in accordance with the instructions indicated thereon. Unless otherwise directed, votes will be cast (i) for the election of the nominees for directors hereinafter named; (ii) for the ratification of Semple, Marchal & Cooper, LLP as our independent registered public accounting firm and (iii) in accordance with the best judgment of the persons acting under the proxy concerning other matters as may properly come before the Meeting or any postponements or adjournments thereof. Shareholders who hold their shares in “street name” (i.e., in the name of a bank, broker or other record holder) must vote their shares in the manner prescribed by their brokers. After a quorum is declared, the holders of a majority of the shares represented at the Meeting in person or by proxy and entitled to vote will be required to approve any proposed matters.
We will bear the entire cost of the preparation, assembly, printing and mailing of this Proxy Statement. Copies of this Proxy Statement will be furnished to brokerage houses, fiduciaries and custodians holding shares in their names that are beneficially owned by others so that they may forward this material to such beneficial owners. In addition, we may reimburse these persons for their costs of forwarding the material to the beneficial owners.
QUORUM REQUIREMENT
Our Bylaws and Nevada law provide that the holders of a majority of our common stock issued and outstanding and entitled to vote, either in person or by proxy shall constitute a quorum for the transaction of business at a shareholders’ meeting. As of the record date, 6,633,112 shares of common stock, representing the same number of votes, were outstanding. Thus, the presence of the holders of common stock representing at least 3,316,557 votes will be required to establish a quorum. In determining the presence of a quorum at the Meeting, proxies received but marked as abstentions are counted as present and broker non-votes are not counted as present. A broker “non-vote” occurs when a broker, bank or other holder of record holding shares for a beneficial owner does not vote on a particular proposal because the broker, bank or other holder of record does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.
VOTES REQUIRED
With respect to the election of the seven director nominees and the ratification of our independent registered public accountants, the holders of a majority of the issued and outstanding shares of voting stock must approve the actions taken.
HOW TO VOTE
By Mail or Facsimile
Be sure to complete, mark, sign and date the proxy card or voting instruction card and return it in the envelope provided or via facsimile to 480-994-0759. Votes submitted by mail must be received on or before October 8, 2009. If you are a shareholder of record and you return your signed proxy card but do not indicate your voting preferences, the persons named in the proxy card will vote the shares represented by that proxy as recommended by the Board.
All shareholders may vote in person at the Meeting. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other holder of record and present it to the inspectors of election with your ballot to be able to vote at the Meeting.
CHANGING YOUR VOTE AFTER YOU RETURN YOUR PROXY CARD
Any shareholder of record giving a proxy may revoke it at any time before it is voted at the Meeting by delivering to the Company written notice of revocation or a proxy bearing a later date, or by attending the Meeting in person and casting a ballot, although attendance at the Meeting will not by itself revoke a previously granted proxy. You may change your vote by using any one of these methods regardless of the procedure used to cast your previous vote.
If you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other holder of record. You may also vote in person at the Meeting if you obtain a legal proxy as described in the response to the previous question.
DISSENTER’S RIGHTS OR APPRAISAL
Pursuant to applicable Nevada law, there are no dissenter’s or appraisal rights relating to the matters to be acted upon at the Meeting.
BOARD’S RECOMMENDATIONS
Unless you give other instructions on your proxy card, the persons named as proxy holders on the proxy card will vote in accordance with the recommendations of the Board. The Board’s recommendations are set forth together with the description of each item in this Proxy Statement. In summary, the Board recommends a vote:
| · | FOR the election as directors of the nominees named in this Proxy Statement. (See Proposal 1). |
| · | FOR the ratification of the appointment of Semple, Marchal & Cooper LLP as our independent registered public accounting firm. (See Proposal 2). |
| · | In accordance with the best judgment of the persons acting under the proxy concerning other matters that are properly brought before the Meeting and at any adjournment or postponement thereof. |
The Board of Directors currently consists of seven members. These seven members of the Board were nominated by the Nominating and Corporate Governance Committee, and are standing for, re-election.
JAMES TRELIVING is a member of the Board of Directors of the Company and WPHL Holdings, Inc. and serves as the Chairman of each board. Mr. Treliving is a chairman and owner of Boston Pizza International, Inc., an $800 million (Canadian) full-service pizza and pasta restaurant franchise chain with over 300 locations in Canada. Mr. Treliving has won the Pacific Canada Ernst & Young “Entrepreneur of the Year” award for Hospitality and Tourism and the British Columbia American Marketing Association’s “Marketer of the Year” award. Boston Pizza was named one of Canada’s “50 Best Managed Companies” since 1993 and has won the Pinnacle “Company of the Year” award. Mr. Treliving is also involved in the oil and gas, property construction and development industries. Prior to purchasing Boston Pizza with George Melville in 1983, Mr. Treliving owned and operated multiple franchised Boston Pizza restaurants.
2
RICHARD KOZUBACK is a member of our Board of Directors and is the President and CEO of the Company. He is also a member of the Board of Directors of WPHL Holdings, Inc. Mr. Kozuback has over 30 years of experience in the hockey industry, having played Canadian Junior Hockey and having coached and managed various hockey teams in Canada and the United States. From 1993 to 1994, Mr. Kozuback was Head Coach and General Manager of the Tri-City Americans, a Western Hockey League team, as well as Head Coach of the Phoenix Cobras, a Roller Hockey International team. From 1991 to 1993, Mr. Kozuback was Associate Coach of the Phoenix Roadrunners, a member of the International Hockey League and farm team to the Los Angeles Kings, a National Hockey League team. Mr. Kozuback was Head Hockey Coach at the University of Wisconsin River Falls from 1986-1989 where his team won an NCAA Championship in the 1987-1988 season. From 1982 to 1986 Mr. Kozuback was owner, General Manager and Coach of the Penticton Knights Junior A Hockey team; Canadian Champions in 1985-1986. Mr. Kozuback attended the University of Alberta, Canada, where he received a degree in Education and taught at the high school level for eight years (British Columbia) and at the collegiate level (Wisconsin) for three years.
MICHAEL L. BOWLIN became a member of our Board of Directors in April 2006. Mr. Bowlin has served as Chairman of the Board and Chief Executive Officer, President and as a Director of Bowlin Travel Centers, Inc. since August of 2000. Mr. Bowlin served as Chairman of the Board and Chief Executive Officer of Bowlin Outdoor Advertising and Travel Centers, Inc. (Bowlin Outdoor) from 1991 through January of 2001, and as President from 1983 through 1991. Mr. Bowlin had been employed by Bowlin Outdoor since 1968. Mr. Bowlin holds a Bachelor’s degree in Business Administration from Arizona State University.
TERRY S. JACOBS has been a member of our Board of Directors since 2000, and is Chairman, President and Chief Executive Officer of The JFP Group, LLC, a private real estate development, management and investment group since September 2005. Mr. Jacobs served as Chairman of the Board and Chief Executive Officer of Regent Communications, a Nasdaq listed company, which is the owner and operator of 75 radio stations in 15 markets, from its founding in September 1996 to September 2005. He currently serves as a member of the Board of Directors of American Financial Group, Inc., a New York Stock Exchange listed company and until September 2006, when the company was acquired, he was a member of the Board of Directors of Capital Title Group, Inc., a Nasdaq listed company. Mr. Jacobs’ business experience includes the founding of Jacor Communications, Inc. in 1979, serving as Chairman and Chief Executive Officer as the company grew to be the ninth largest radio group in the United States, as well as the founding of Regent Communications, Inc. Mr. Jacobs holds a Bachelor of Business Administration and Master of Actuarial Science from Georgia State University and is a Fellow of the Casualty Actuarial Society and Member of the American Academy of Actuaries. Mr. Jacobs is a member of the Board of the National Football Foundation and College Hall of Fame.
STEPHEN A McCONNELL became a member of our Board of Directors in April 2006. Mr. McConnell has served as the President of Solano Ventures, an investment fund devoted to small and mid-sized companies. Mr. McConnell was Chairman and majority stockholder of G-L Industries, LLC, a Salt Lake City-based manufacturer of wood glue-lam beams used in the construction industry, from 1998 to 2004. Mr. McConnell served as Chairman of the Board of Mallco Lumber & Building Materials, Inc., a wholesale distributor of construction lumber and doors from September 1991 to June 1997. From 1991 to 1995, Mr. McConnell served as President of Belt Perry Associates, Inc., a property tax appeal firm. Mr. McConnell served as President and Chief Executive Officer of N-W Group, Inc., a publicly held corporation, from 1985 through 1991. Mr. McConnell currently serves on the board of Mobile Mini, Inc., a publicly held company. Mr. McConnell holds a Bachelor’s degree from Harvard College and an MBA from Harvard Business School.
GEORGE MELVILLE is a member of our Board of Directors and was previously a director of WPHL, Inc. from its inception in 1995 until May 2003. He also serves as a director and as Vice President of WPHL Holdings. Mr. Melville currently serves as one of two chairmen and owners of Boston Pizza. Together with Mr. Treliving, the other chairman of Boston Pizza, Mr. Melville has won the Pacific Canada Ernst & Young “Entrepreneur of the Year” award for Hospitality and Tourism and the British Columbia American Marketing Association’s “Marketer of the Year” award. Boston Pizza was named one of Canada’s “50 Best Managed Companies” since 1993 and has won the Pinnacle “Company of the Year” award. Mr. Melville is also involved in the oil and gas, property construction and development industries. Prior to purchasing Boston Pizza with Mr. Treliving in 1983, Mr. Melville owned and operated multiple franchised Boston Pizza restaurants and was an accountant with Peat, Marwick, Mitchell & Co. Mr. Melville is an accredited Chartered Accountant.
3
MARK SCHWARTZ is a member of our Board of Directors. Previously, he served as a director of Cragar Industries, dating back to January 1993. Mr. Schwartz is President and CEO of G&S Metal Products Company, Inc., the largest producer of metal bakeware for the consumer market in the United States. G&S Metal Products also imports and distributes a wide range of kitchen accessory and household items. Through a subsidiary, G&S Metal is one of the major U.S. manufacturers of aluminum fencing for residential and commercial markets. Its customers include major U.S. and international retailers in virtually every segment of the trade, including supermarkets, mass merchants, and television retailers. Mr. Schwartz has been with G&S for well over 30 years and has been President and Chief Executive Officer for over 15 years.
All nominees have consented to be named and have indicated that they will serve if re-elected. If re-elected, each director will hold office until the next annual meeting of shareholders or until a successor is elected and qualified. If any nominee is not able to serve, the Board intends to fill the vacancy until another director nominee can be elected. The Board is unaware of any circumstance likely to make the nominees named above unavailable for election. Additional information about each of the directors can be found in the “Directors and Executive Officers” section below.
The Board of Directors unanimously recommends a vote “FOR” the election of all nominees.
The Board of Directors, upon the recommendation of the Audit Committee, has selected Semple, Marchal & Cooper, LLP, an independent registered public accounting firm, to audit the books, records, and accounts of the Company and its subsidiaries for the year ending May 31, 2010.
The firm of Semple, Marchal & Cooper, LLP audits our books annually, has offices in or convenient to the localities in the United States where the Company or its subsidiaries operate and is considered to be well qualified. Semple, Marchal & Cooper, LLP has audited our books since 2000.
Shareholder ratification of the selection of Semple, Marchal & Cooper, LLP as our independent registered public accounting firm is not required by our Bylaws or otherwise. Despite shareholder ratification of the selection of Semple, Marchal & Cooper, LLP, the Audit Committee and the Board in their discretion may direct the appointment of different independent registered public accounting firms at any time if they determine that such an appointment would be in the best interests of the Company and its shareholders.
Semple, Marchal & Cooper, LLP has no direct or indirect material financial interest in the Company or any of its subsidiaries. A representative of Semple, Marchal & Cooper, LLP is expected to be available at the Meeting and will be given the opportunity to make a statement on behalf of Semple, Marchal & Cooper, LLP, if they so desire. The representative also will be available to respond to questions raised by shareholders in attendance at the Meeting.
PRINICIPAL ACOUNTANT FEES AND SERVICES
AUDIT FEES
The aggregate fees billed by Semple, Marchal & Cooper, LLP for professional services rendered for the audit of our annual financial statements and review of our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q or 10QSB, for the fiscal years ended May 31, 2009 and 2008, were approximately $152,000 and $203,000, respectively.
AUDIT RELATED FEES
In each of the last two fiscal years, there were no fees billed for assurance and related services rendered by the principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under the “AUDIT FEES” paragraph above.
TAX FEES
Semple, Marchal & Cooper, LLP prepared the company’s tax returns for state and federal purposes. Tax return preparation fees for the fiscal years ended May 31, 2009 and 2008, were approximately $15,000 and $17,000, respectively.
ALL OTHER FEES
Other than the services described above under “Audit Fees’, during the fiscal year ended May 31, 2009, Semple, Marchal & Cooper, LLP also provided services related to a Securities and Exchange Commission compliance matter and billed related fees of approximately $16,000.
4
AUDIT COMMITTEE REPORT
The Audit Committee oversees the financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Committee reviewed the audited financial statements in the Annual Report on Form 10-K with management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.
The Committee reviewed and discussed with the independent registered public accountants, who are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles in the United States, their judgments as to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Committee under generally accepted auditing standards.
The Committee discussed with the Company’s independent registered public accountants, who are responsible for expressing an opinion on the conformity of the Company’s audited financial statements with generally accepted accounting principles in the United States, all matters required to be discussed by Statement on Auditing Standards No. 61. In addition, our independent registered public accountants also provided to the committee the written disclosures required by the applicable requirements of the Public Company Accounting Oversight Board relating to the independent registered public accountant’s communications with the Committee concerning independence. The Committee discussed with our independent registered public accounting firm the overall scope and plans for their audit.
In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors (and the Board approved) that the audited financial statements be included in the Annual Report on Form 10-K for the year ended May 31, 2009, for filing with the Securities and Exchange Commission.
Terry S. Jacobs
Stephen A McConnell
George Melville
Dated: September 18, 2009
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
All of the 2009 and 2008 audit services provided by Semple, Marchal & Cooper, LLP were approved by the Audit Committee. The Audit Committee implemented pre-approval policies and procedures related to the provision of audit and non-audit services. Under these procedures, the Audit Committee pre-approves both the type of services to be provided by our independent registered public accounting firm and the estimated fees related to these services. During the approval process, the Audit Committee considers the impact of the types of services and related fees on the independence of the registered public accounting firm. These services and fees must be deemed compatible with the maintenance of the registered public accounting firm’s independence, in compliance with the SEC rules and regulations. Throughout the year, the Audit Committee and, if necessary, the Board of Directors, reviews revisions to the estimates of audit and non-audit fees initially approved.
The Board of Directors unanimously recommends a vote “FOR” ratification of the appointment of Semple, Marchal &Cooper, LLP
as our independent registered public accounting firm.
5
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The directors, executive officers, and other key employees of the Company and their ages as of October 1, 2009, are as follows:
| Name | Age | Position | |||
| James Treliving | 68 | Director and Chairman of the Board | |||
| Richard Kozuback | 55 | Director, CEO and President | |||
| Michael L. Bowlin | 67 | Director | |||
| Terry S. Jacobs | 67 | Director | |||
| Stephen A McConnell | 56 | Director | |||
| George Melville | 65 | Director | |||
| Mark Schwartz | 59 | Director | |||
| James Yeager | 59 | Senior Vice President, Chief Financial Officer and Treasurer | |||
| James Domaz | 53 | Senior Vice President, General Counsel and Secretary | |||
JAMES TRELIVING is a member of the Board of Directors of the Company and WPHL Holdings, Inc. and serves as the Chairman of each board. Mr. Treliving is a chairman and owner of Boston Pizza International, Inc., an $800 million (Canadian) full-service pizza and pasta restaurant franchise chain with over 300 locations in Canada. Mr. Treliving has won the Pacific Canada Ernst & Young “Entrepreneur of the Year” award for Hospitality and Tourism and the British Columbia American Marketing Association’s “Marketer of the Year” award. Boston Pizza was named one of Canada’s “50 Best Managed Companies” since 1993 and has won the Pinnacle “Company of the Year” award. Mr. Treliving is also involved in the oil and gas, property construction and development industries. Prior to purchasing Boston Pizza with George Melville in 1983, Mr. Treliving owned and operated multiple franchised Boston Pizza restaurants.
RICHARD KOZUBACK is a member of our Board of Directors and is the President and CEO of the Company. He is also a member of the Board of Directors of WPHL Holdings, Inc. Mr. Kozuback has over 30 years of experience in the hockey industry, having played Canadian Junior Hockey and having coached and managed various hockey teams in Canada and the United States. From 1993 to 1994, Mr. Kozuback was Head Coach and General Manager of the Tri-City Americans, a Western Hockey League team, as well as Head Coach of the Phoenix Cobras, a Roller Hockey International team. From 1991 to 1993, Mr. Kozuback was Associate Coach of the Phoenix Roadrunners, a member of the International Hockey League and farm team to the Los Angeles Kings, a National Hockey League team. Mr. Kozuback was Head Hockey Coach at the University of Wisconsin River Falls from 1986-1989 where his team won an NCAA Championship in the 1987-1988 season. From 1982 to 1986 Mr. Kozuback was owner, General Manager and Coach of the Penticton Knights Junior A Hockey team; Canadian Champions in 1985-1986. Mr. Kozuback attended the University of Alberta, Canada, where he received a degree in Education and taught at the high school level for eight years (British Columbia) and at the collegiate level (Wisconsin) for three years.
MICHAEL L. BOWLIN became a member of our Board of Directors in April 2006. Mr. Bowlin has served as Chairman of the Board and Chief Executive Officer, President and as a Director of Bowlin Travel Centers, Inc. since August of 2000. Mr. Bowlin served as Chairman of the Board and Chief Executive Officer of Bowlin Outdoor Advertising and Travel Centers, Inc. (Bowlin Outdoor) from 1991 through January of 2001, and as President from 1983 through 1991. Mr. Bowlin had been employed by Bowlin Outdoor since 1968. Mr. Bowlin holds a Bachelor’s degree in Business Administration from Arizona State University.
TERRY S. JACOBS has been a member of our Board of Directors since 2000, and is Chairman, President and Chief Executive Officer of The JFP Group, LLC, a private real estate development, management and investment group since September 2005. Mr. Jacobs served as Chairman of the Board and Chief Executive Officer of Regent Communications, a Nasdaq listed company, which is the owner and operator of 75 radio stations in 15 markets, from its founding in September 1996 to September 2005,. He currently serves as a member of the Board of Directors of American Financial Group, Inc., a New York Stock Exchange listed company and until September 2006, when the company was acquired, he was a member of the Board of Directors of Capital Title Group, Inc., a Nasdaq listed company. Mr. Jacobs’ business experience includes the founding of Jacor Communications, Inc. in 1979, serving as Chairman and Chief Executive Officer as the company grew to be the ninth largest radio group in the United States, as well as the founding of Regent Communications, Inc. Mr. Jacobs holds a Bachelor of Business Administration and Master of Actuarial Science from Georgia State University and is a Fellow of the Casualty Actuarial Society and Member of the American Academy of Actuaries. Mr. Jacobs is a member of the Board of the National Football Foundation and College Hall of Fame.
6
STEPHEN A McCONNELL became a member of our Board of Directors in April 2006. Mr. McConnell has served as the President of Solano Ventures, an investment fund devoted to small and mid-sized companies. Mr. McConnell was Chairman and majority stockholder of G-L Industries, LLC, a Salt Lake City-based manufacturer of wood glue-lam beams used in the construction industry, from 1998 to 2004. Mr. McConnell served as Chairman of the Board of Mallco Lumber & Building Materials, Inc., a wholesale distributor of construction lumber and doors from September 1991 to June 1997. From 1991 to 1995, Mr. McConnell served as President of Belt Perry Associates, Inc., a property tax appeal firm. Mr. McConnell served as President and Chief Executive Officer of N-W Group, Inc., a publicly held corporation, from 1985 through 1991. Mr. McConnell currently serves on the board of Mobile Mini, Inc., a publicly held company. Mr. McConnell holds a Bachelor’s degree from Harvard College and an MBA from Harvard Business School.
GEORGE MELVILLE is a member of our Board of Directors and was previously a director of WPHL, Inc. from its inception in 1995 until May 2003. He also serves as a Director and as Vice President of WPHL Holdings. Mr. Melville currently serves as one of two chairmen and owners of Boston Pizza. Together with Mr. Treliving, the other chairman of Boston Pizza, Mr. Melville has won the Pacific Canada Ernst & Young “Entrepreneur of the Year” award for Hospitality and Tourism and the British Columbia American Marketing Association’s “Marketer of the Year” award. Boston Pizza was named one of Canada’s “50 Best Managed Companies” since 1993 and has won the Pinnacle “Company of the Year” award. Mr. Melville is also involved in the oil and gas, property development, and construction industries. Prior to purchasing Boston Pizza with Mr. Treliving in 1983, Mr. Melville owned and operated multiple franchised Boston Pizza restaurants and was an accountant with Peat, Marwick, Mitchell & Co. Mr. Melville is an accredited Chartered Accountant.
MARK SCHWARTZ is a member of our Board of Directors. Previously, he served as a director of Cragar Industries, dating back to January 1993. Mr. Schwartz is President and CEO of G&S Metal Products Company, Inc., the largest producer of metal bakeware for the consumer market in the United States. G&S Metal Products also imports and distributes a wide range of kitchen accessory and household items. Through a subsidiary, G&S Metal is one of the major U.S. manufacturers of aluminum fencing for residential and commercial markets. Its customers include major U.S. and international retailers in virtually every segment of the trade, including supermarkets, mass merchants, and television retailers. Mr. Schwartz has been with G&S for well over 30 years and has been President and Chief Executive Officer for over 15 years.
JAMES YEAGER has served as our Senior Vice President and Chief Financial Officer since August 2007. Mr. Yeager most recently served as Vice President, Controller, and Chief Financial Officer of Capital Title Group, Inc., a Nasdaq listed company, from April 2004 through May 2007, until its acquisition by LandAmerica Financial Group, Inc. Prior to that Mr. Yeager served as Executive Vice President and Chief Financial Officer of Styling Technology Corporation, a Nasdaq listed company, from June 2000 to December 2003.
JAMES DOMAZ has served as our Senior Vice President, General Counsel and Secretary since August 2007. Prior to joining the Company, Mr. Domaz was with the law firm of Cheifetz Iannitelli Marcolini, P.C. from 2005 to 2007; and prior to that he served as Senior Vice President, Corporate Counsel and Secretary for MicroAge, Inc. a Fortune 500 company listed on the Nasdaq exchange from 1993-2003.
Under current standards of the NYSE Amex, Messrs. Bowlin, Jacobs, McConnell, Melville, Schwartz and Treliving are independent directors.
We have a code of business ethics (“Code”) that applies to all of our employees, including our principal executive officer, principal financial officer and principal accounting officer. This code embodies our principles and practices relating to the ethical conduct of our business and its commitment to honesty, fair dealing and full compliance with all laws and regulations affecting our business.
We will provide a copy of the Code upon request made in writing to us at our address provided herein. We intend to satisfy the disclosure requirement under Item 5.05 of the Form 8-K regarding an amendment to, or waiver from, a provision of this Code by posting such information on our website, www.globalentertainment2000.com., and to the extent required, by filing a Current Report on Form 8-K with the SEC disclosing such information.
BENEFICIAL OWNERSHIP OF THE COMPANY’S SECURITIES
The following table sets forth, as of August 31, 2009, the number and percentage of outstanding shares of our common stock beneficially owned by i) each person known by us to beneficially own more than 5% of such stock, (ii) each of our directors, (iii) the Chief Executive Officer and each of the other named executive officers, and (iv) all directors and officers as a group. Except as otherwise indicated, we believe that each of the beneficial owners of its common stock listed below, based on information furnished by such owners, has sole investment and voting power with respect to such shares, subject to community property laws where applicable.
7
| Shares | ||||||||||
| Beneficially | Percent of | |||||||||
| Name and Address of Beneficial Owner (1) | Owned(2) | Total (3) | ||||||||
| James Treliving (4) | 337,457 | 5.03 | % | |||||||
| Richard Kozuback (5) | 489,768 | 7.34 | % | |||||||
| Michael L. Bowlin (6) | 10,857 | 0.16 | % | |||||||
| Michael L. Hartzmark, Ph.D. (7) | 19,215 | 0.29 | % | |||||||
| Terry S. Jacobs (8) | 93,171 | 1.40 | % | |||||||
| Stephen A McConnell (9) | 30,443 | 0.46 | % | |||||||
| George Melville (10) | 416,236 | 6.21 | % | |||||||
| Mark Schwartz (11) | 183,614 | 2.76 | % | |||||||
| Rudy R. Miller (12) | 519,210 | 7.72 | % | |||||||
| WPHL Holdings, Inc. (13) | 2,750,000 | 41.46 | % | |||||||
| Ron Thom (14) | 370,726 | 5.59 | % | |||||||
| James Yeager (15) | 3,750 | 0.06 | % | |||||||
| James Domaz (16) | 2,500 | 0.04 | % | |||||||
| All executive officers and directors | ||||||||||
| as a group (9 persons) (17) | 1,567,796 | 22.79 | % | |||||||
| (1) | Unless otherwise noted, the mailing address of each of the listed shareholders is c/o Global Entertainment Corporation, 1600 North Desert Drive, Suite 301, Tempe, AZ 85281. |
| (2) | A person is deemed to be the beneficial owner of securities that that beneficial owner has the right to acquire within 60 days from August 31, 2009. |
| (3) | In calculating percentage ownership, all shares of common stock that the named shareholder has the right to acquire within 60 days of August 31, 2009, are deemed to be outstanding for the purpose of computing the percentage of common stock owned by such stockholder, but are not deemed outstanding for the purpose of computing the percentage of common stock owned by any other stockholder. Shares and percentages beneficially owned are based upon 6,633,112 shares outstanding on August 31, 2009. |
| (4) | Includes 72,500 shares purchasable upon exercise of options, 262,819 shares beneficially owned by Mr. Treliving through his beneficial ownership interest in WPHL Holdings, Inc., 1,138 shares beneficially owned by Mr. Treliving through his beneficial ownership interest in S&T Holdings LTD, and 1,000 shares issuable October 17, 2009, upon vesting of restricted stock. |
| (5) | Includes 40,000 shares purchasable upon exercise of options by Mr. Kozuback, 52,560 shares held directly and 397,208 shares beneficially owned by Mr. Kozuback through his beneficial ownership interest in WPHL Holdings, Inc. |
| (6) | Includes 9,857 shares held directly, and 1,000 shares issuable October 17, 2009, upon vesting of restricted stock. |
| (7) | Includes 12,534 shares held directly and 6,681 shares beneficially owned by Dr. Hartzmark through his beneficial ownership interest in MDA Financial, Inc. |
| (8) | Includes 20,000 shares purchasable upon exercise of options, 72,171 shares held directly and 1,000 shares issuable October 17, 2009, upon vesting of restricted stock. |
| (9) | Includes 29,443 shares held directly and 1,000 shares issuable October 17, 2009, upon vesting of restricted stock. |
| (10) | Includes 72,500 shares purchasable upon exercise of options, 341,598 shares beneficially owned by Mr. Melville through his beneficial ownership interest in WPHL Holdings, Inc., 1,138 shares beneficially owned by Mr. Melville through his beneficial ownership interest in S&T Holdings LTD, 2,000 shares held directly and 1,000 shares issuable October 17, 2009, upon vesting of restricted stock. |
| (11) | Includes 30,000 shares purchasable upon exercise of options, 93,182 shares held directly, 59,432 shares beneficially owned though Mr. Schwartz’s beneficial ownership in a trust and 1,000 shares issuable October 17, 2009, upon vesting of restricted stock. |
8
| (12) | Includes 426,210 shares owned by Miller Capital Corporation (MCC), for which Mr. Miller serves as Chairman, President, and Chief Executive Officer, 500 shares held directly by Mr. Miller, 32,500 shares purchasable upon exercise of options by Mr. Miller, and 60,000 shares purchasable upon exercise of warrants by MCC. Mr. Miller beneficially owns all of the shares of our common stock and warrants to purchase such shares held by MCC. |
| (13) | Shares of our common stock held by WPHL Holdings, Inc. are beneficially owned by the following persons who are the beneficial owners of more than 5% of our common stock (in the amounts indicated): Ron Thom (370,726), George Melville (341,598), James Treliving (262,819) and Richard Kozuback (397,208). |
| (14) | Includes 370,726 shares held by Mr. Thom through his beneficial ownership interest in WPHL Holdings, Inc. |
| (15) | Includes 3,750 shares issuable October 17, 2009, upon vesting of restricted stock. |
| (16) | Includes 2,500 shares issuable October 17, 2009, upon vesting of restricted stock. |
| (17) | Includes Messrs. Treliving, Kozuback, Bowlin, McConnell, Melville, Jacobs, Schwartz, Yeager and Domaz. |
BOARD MEETINGS AND COMMITTEES
The Board of Directors held six meetings during the fiscal year ended May 31, 2009. During this period, each Board member attended or participated in at least 75% of (i) the total number of meetings of the Board that were held while he was a member and (ii) the total number of meetings held by all committees of the Board on which he was a member and while he was a member.
We have an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The Audit Committee and Compensation Committee were each formed in October 2000 and the Nominating and Corporate Governance Committee was formed in April 2006.
The Audit Committee consists of Messrs. Jacobs, McConnell and Melville. The Audit Committee, which has adopted a formal written charter, makes recommendations to the Board concerning the selection of outside auditors, reviews our financial statements and considers such other matters in relation to the internal controls and external audit of our financial affairs as may be necessary or appropriate in order to facilitate accurate and timely financial reporting. On our website, www.globalentertainment2000.com, we make available, free of charge, our Audit Committee Charter. The Audit Committee is comprised of outside directors who are not officers or employees of the Company or its subsidiaries. In the opinion of the Board, and as “independent” is defined under the current standards of the NYSE Amex, Messrs. Jacobs, McConnell and Melville and are independent of management and free of any relationship that would interfere with their exercise of independent judgment as members of this committee. The Board has determined that Mr. Jacobs is an “audit committee financial expert,” as that term is defined in the rules and regulations promulgated by the Securities and Exchange Commission. In addition, the Board has determined that all members of the Audit Committee are financially literate, knowledgeable, and qualified to review our financial statements. The Audit Committee held six meetings during the fiscal year ended May 31, 2009.
The Compensation Committee is currently comprised of Messrs. Treliving, Bowlin and Schwartz. The Compensation Committee determines the salary and incentive compensation of our officers and provides recommendations for the salaries and incentive compensation for other employees. The Compensation Committee also administers our long-term incentive plans, including reviewing management recommendations with respect to option and restricted stock grants and taking other actions as may be required in connection with its compensation and incentive plans. Among other items, the Compensation Committee reviews the profitability of the Company and industry standards in determining executive and director compensation. The Compensation Committee, following consultation with the Chief Executive Officer, makes recommendations to the Board of Directors regarding the amount and form of compensation of directors, executives and employees. The Compensation Committee members are all “independent” as defined under the current standards of the NYSE Amex. The Compensation Committee held two meetings during the fiscal year ended May 31, 2009. The Compensation Committee does not currently have a charter.
The Nominating and Corporate Governance Committee develops and recommends to the full Board of Directors, a set of corporate governance principles and makes recommendations for nominees to the Board of Directors. The Nominating and Corporate Governance Committee is comprised of Messrs. Schwartz, Bowlin, Jacobs and McConnell all of whom are “independent” as defined under the current standards of the NYSE Amex. This Committee held no meetings during the fiscal year ended May 31, 2009. For the fiscal year ended May 31, 2009, the business of the Committee was conducted during meetings of the full Board of Directors. The Nominating and Corporate Governance Committee does not currently have a charter.
All current committee members are expected to be nominated for re-election at a Board meeting to be held following the Meeting.
9
Any shareholder wishing to send communications to the Board of Directors or to any individual member of the Board should forward a written communication to the attention of the Secretary of the Company at the address listed on this information statement, and the Secretary will then forward such communications to the intended recipients. All written communications that pertain to legitimate shareholder interests and to legitimate business matters of the Company and that are otherwise appropriate matters for the Board to consider will be forwarded. The Board does not have a written policy regarding the attendance at annual meetings by all Directors.
DIRECTOR NOMINATION PROCESS
Nominations of candidates for election as directors may be made by the Board of Directors upon recommendation by the Nominating and Corporate Governance Committee.
In evaluating the suitability of potential nominees for membership on the Board, the Nominating and Governance Committee will consider the Board’s current composition, including expertise, diversity, and balance of inside, outside and independent directors, and consider the general qualifications of the potential nominees, such as:
Unquestionable integrity and honesty;
The ability to exercise sound, mature and independent business judgment in the best interests of the shareholders as a whole;
Recognized leadership in business or professional activity;
A background and experience that will complement the talents of the other board members;
Willingness and capability to take the time to actively participate in board and committee meetings and related activities;
Ability to work professionally and effectively with other board members and the Company’s management;
An age to enable the director to remain on the Board long enough to make an effective contribution; and
Lack of realistic possibilities of conflict of interest or legal prohibition.
The Committee will also see that all necessary and appropriate inquiries are made into the backgrounds of such candidates. There are no stated minimum criteria for director nominees, although the Nominating and Corporate Governance Committee may also consider such other factors as it may deem to be in the best interests of the Company and its shareholders. The Committee does not have a policy with respect to consideration of nominations by shareholders.
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash (1) ($) | Stock Awards (2) ($) | Option Awards ($) | Non-Equity Incentive Plan Compen-sation ($) | Nonqualified Deferred Compensation Earnings ($) | All other Compensation ($) | Total ($) | |||||||||||||||||||||
| James Treliving | 14,008 | 2,000 | — | — | — | — | 16,008 | |||||||||||||||||||||
| Michael L. Bowlin | 14,248 | 2,000 | — | — | — | — | 16,248 | |||||||||||||||||||||
| Michael L. Hartzmark, Ph. D | 12,416 | ¾ | — | — | — | — | 12,416 | |||||||||||||||||||||
| Terry S. Jacobs | 21,120 | 2,000 | — | — | — | — | 23,120 | |||||||||||||||||||||
| Stephen A McConnell | 16,748 | 2,000 | — | — | — | — | 18,748 | |||||||||||||||||||||
| George Melville | 16,113 | 2,000 | — | — | — | — | 18,113 | |||||||||||||||||||||
| Mark Schwartz | 17,454 | 2,000 | — | — | — | — | 19,454 | |||||||||||||||||||||
| (1) | Includes amounts paid in the fiscal year ended May 31, 2009, for fees. |
| (2) | All stock awards reflected are valued at the closing market price of our common stock on the grant date of $1.00 per share. |
Effective August 2, 2006, we revised the director compensation to include paying non-employee directors an annual retainer of $10,000, $1,000 per meeting and $500 per phone-conference meeting. In addition, each director shall receive $500 for each Committee meeting. The Chairman of the Audit Committee receives an additional annual retainer of $5,000 and other committee chairmen receive an annual retainer of $2,500. Directors will initially be awarded 2,000 restricted shares and will receive an additional 2,000 restricted shares following each year that they serve as a director to the Company.
10
For the fiscal year ended May 31, 2008, only, the Board of Directors voted to: (i) forego the annual stock grant to non-employee directors and (ii) reduce the non-employee director cash compensation by one-half.
EXECUTIVE COMPENSATION AND OTHER RELATED INFORMATION
The following table provides certain summary information concerning the compensation earned during the fiscal years ended May 31, 2009 and 2008, by our Chief Executive Officer and each officer whose salary and bonus was in excess of $100,000, for services rendered in all capacities to the Company and its subsidiaries. The individuals included in the following table will be referred to in this Proxy Statement as the named executive officers.
SUMMARY COMPENSATION TABLE
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||
| Richard | 2009 | 200,000 | — | — | — | — | — | 3,600 | 203,600 | ||||||||||||||||||||||||
| Kozuback | 2008 | 200,000 | — | — | — | — | — | 3,600 | 203,600 | ||||||||||||||||||||||||
| James | 2009 | 162,000 | ¾ | ¾ | ¾ | ¾ | ¾ | ¾ | 162,000 | ||||||||||||||||||||||||
| Domaz | 2008 | 128,250 | (1) | — | 22,750 | (2) | — | — | — | — | 151,000 | ||||||||||||||||||||||
| James | 2009 | 157,008 | ¾ | ¾ | ¾ | ¾ | ¾ | ¾ | 157,008 | ||||||||||||||||||||||||
| Yeager | 2008 | 120,171 | (1) | — | 34,125 | (2) | — | — | — | — | 154,296 | ||||||||||||||||||||||
| (1) | Messrs. Domaz and Yeager were not employed by the Company for the full fiscal year ended May 31, 2008. |
| (2) | All stock awards reflected are valued at the closing market price of our common stock on the grant date of $4.55 per share. |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options Exercisable(1) (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares of Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
| Richard | 20,000 | — | — | 5.75 | 02/23/2015 | — | — | — | — | |||||||||||||||||||||||||||
| Kozuback | 10,000 | — | — | 5.40 | 06/01/2015 | — | — | — | — | |||||||||||||||||||||||||||
| 10,000 | — | — | 8.50 | 11/18/2015 | — | — | — | — | ||||||||||||||||||||||||||||
| James | ||||||||||||||||||||||||||||||||||||
| Domaz | — | — | — | — | — | — | — | 5,000 | 3,950 | (2) | ||||||||||||||||||||||||||
| James | ||||||||||||||||||||||||||||||||||||
| Yeager | — | — | — | — | — | — | — | 7,500 | 5,925 | (2) | ||||||||||||||||||||||||||
11
| (1) | All options held by our named executive officers at May 31, 2009, are fully vested and exercisable. There were no options granted to our directors or executive officers during the fiscal year ended May 31, 2009. |
| (2) | Calculated by taking the closing market price of our common stock on May 31, 2009, of $0.79 per share, multiplied by the number of shares granted. The amounts in these columns may not represent amounts actually realized by these officers. |
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
Effective April 18, 2009, the employment agreement with Mr. Kozuback automatically renewed for one year at an annual base salary of $200,000.
EQUITY COMPENSATION PLAN INFORMATION (as of May 31, 2009)
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants, and rights (a) | Weighted-average exercise price of outstanding options, warrants, and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) | ||||||||||
| Equity compensation plans approved by security holders | |||||||||||||
| (a) 2000 Long-Term Incentive Plan | 295,500 | $ | 5.00 | 302,649 | |||||||||
| (b) 2007 Long-Term Incentive Plan (1) | N/A | N/A | 273,100 | ||||||||||
| Total | 295,500 | (2) | $ | 5.00 | (2) | 575,749 | |||||||
| (1) | 2007 Long-Term Incentive plan awards take the form of grants of restricted stock, as described more fully below. |
| (2) | Restricted stock issued under the 2007 Long-Term Incentive plan has been excluded from calculation of totals for columns (a) and (b). |
2000 LONG-TERM INCENTIVE PLAN
The Board of Directors and shareholders have adopted the Global Entertainment Corporation 2000 Long-Term Incentive Plan. The principal purpose of the plan is to promote the success, and enhance the value, of the Company by linking the personal interests of its key employees to those of its stockholders and by providing its key employees with an incentive for outstanding performance. The plan provides for a variety of compensation awards, including non-qualified stock options, incentive stock options that are within the meaning of Section 422 of the Internal Revenue Code, and restricted stock awards. A total of 750,000 shares of common stock are reserved for issuance under the plan. As of May 31, 2009, we had outstanding options to purchase 295,500 shares of common stock under the 2000 Long-Term Incentive Plan, with a weighted average exercise price of $5.00 per share. As of May 31, 2009, options to acquire 151,851 shares of common stock had been exercised, leaving 302,649 options available for issuance under the 2000 Long-Term Incentive Plan.
2007 LONG-TERM INCENTIVE PLAN
During 2007, the Board of Directors and shareholders adopted the 2007 Long-Term Incentive Plan. The 2007 Plan authorizes the Board of Directors to grant restricted stock awards to selected officers, employees, outside consultants and directors of the Company or its wholly owned subsidiaries for up to an aggregate of 320,000 shares of our common stock. Awards to non-employee directors shall vest over two years, awards to officers and employees shall vest over four years, and awards made to consultants or advisors shall be determined by the Compensation Committee of the Board of Directors.
As of May 31, 2009, we had issued 16,000 shares of restricted stock with two year vesting terms to various directors as compensation for service on the Board, 12,500 shares to officers with various vesting terms, 6,400 shares to employees with various vesting terms and 12,000 shares of restricted stock with one year vesting terms as part of our financial consulting agreement with Miller Capital Corporation.
The Board of Directors, or the Compensation Committee of the Board of Directors, designates the participants in the plan, determines the type and amount of awards granted, the terms and conditions of each award, sets the exercise price of the awards, and makes all other decisions relating to the issuance of awards under the plan.
12
The Board of Directors, or the Compensation Committee of the Board of Directors, is authorized to terminate, amend or modify the plan. We have attempted to structure the plan in a manner such that remuneration attributable to stock options and other awards will not be subject to the deduction limitation contained in Section 162(m) of the Internal Revenue Code.
CERTAIN RELATIONSHIPS AND RELATED PARTIES
Miller Capital Corporation (MCC) and Miller Capital Markets, LLC (MCM), are part of The Miller Group, which is involved in private corporate finance, mergers and acquisitions, and management and investor relations consulting, owns stock in the Company, and its Chairman, President and Chief Executive Officer, Rudy R. Miller, was formerly a member of our Board of Directors. MCC was retained independently by both the Company and Cragar prior to the execution of the merger agreement between the Company and Cragar. In order to avoid any potential conflict, Mr. Miller resigned from his position as a director of the Company prior to the approval and execution of the merger agreement and MCC waived any potential fee pursuant to its financial advisory agreement with the Company dated July 18, 2001 in connection with the merger. However, pursuant to a financial advisory agreement with Cragar dated November 9, 2001, MCC was entitled to receive, upon consummation of the merger, a financial advisory fee of $250,000.
In addition, effective February 14, 2008, MCC and MCM have entered into exclusive financial advisory agreements with the Company pursuant to which MCC and MCM act as investment banker and management consultant to and as exclusive financial advisor for the Company. Pursuant to these agreements, MCC will provide services that include the development of strategic financial plans to the extent required by the Company and, when applicable, to provide shareholder relation services. As compensation for such services, MCC receives a monthly fee of $15,000 for 24 months and is entitled to receive a success fee equal to 4% of any private debt financing, 1.25% to 2.75% of any public equity or debt financing, 10% of any private equity financing, and a graduated fee ranging from 1% to 5% of the consideration received by us in connection with any future merger or acquisition transaction. The consulting agreement provides for restricted stock grant consisting of 6,000 shares of common stock. During the fiscal year ended May 31, 2009, MCC and MCM were paid $290,000 under these agreements.
SHAREHOLDER PROPOSALS FOR 2009 SHAREHOLDERS MEETING
Shareholders are entitled to present proposals for action at a forthcoming meeting if they comply with the requirements of the proxy rules promulgated by the SEC and our Bylaws. Proposals of stockholders of the Company intended to be presented for consideration at our 2010 Annual Meeting of Shareholders and included in our proxy statement for that year must be received by the Company no later than May 31, 2010, in order that they be included in any proxy statement and form of proxy related to that meeting.
OTHER BUSINESS
The Board does not know of any other business to be presented at the Meeting and does not intend to bring before the Meeting any matter other than the proposals described herein. However, if any other business should come before the Meeting, or any adjournments thereof, the persons named in the accompanying proxy will have discretionary authority to vote all proxies.
Regardless of the number of shares you own, it is important that your shares be represented at the Meeting. Accordingly, you are respectfully requested to mark, sign, date, and return the accompanying proxy card at your earliest convenience.
By order of the Board of Directors,
James Yeager
Chief Financial Officer
Tempe, Arizona
September 18, 2009
13
