CREATOR CAPITAL LIMITED
Cedar House, 41 Cedar Street
Hamilton, HM12, Bermuda
May 1, 2002
To Our Shareholders:
You are cordially invited to attend the 2001 Annual General Meeting of
Shareholders of Creator Capital Limited, a Bermuda exempted company (the
"Company" or "CCL"), which will be held at 10:00 a.m., Eastern Daylight
Time, on June 4, 2002, at 41 Cedar House, Hamilton, HM 12, Bermuda. (the
"Annual General Meeting").
At the Annual General Meeting, Shareholders will vote to: (i) elect six
persons to the Board of Directors; (ii) re-appoint Buckley Dodds as CCL's
auditor; (iii) to consider and, if thought fit, to approve and ratify
incentive stock options, and amendments to incentive stock options to
purchase shares of CCL granted, which have not previously been approved by
the shareholders. To authorize the directors, in their discretion to grant
stock options, and to amend stock options granted, subject to any regulatory
approvals; (iv) cancel any and all existing Incentive Stock Option Plans,
(v) receive and consider the report of the directors to the shareholders
and the financial statements of the CCL, together with the auditor's report
thereon for the financial year ended December 31, 2001, and (vi) transact
such other business as may properly come before the Annual General Meeting.
Further information concerning the meeting and the nominees for director
can be found in the accompanying Notice and Proxy Statement.
We hope that you can attend the Annual General Meeting and assist the Board
of Directors by voting for the election of directors; the ratification of
the appointment of the auditors; the granting of incentive stock options;
and the cancellation of any and all existing Management Incentive and Stock
Option Plans. Whether or not you plan to attend the Annual General Meeting,
please be sure to date, sign and return the proxy card in the enclosed,
postage-paid envelope as promptly as possible so that your shares may be
represented at the meeting and voted in accordance with your wishes. If
you attend the meeting, you may vote in person, even if you have previously
submitted a proxy card.
Sincerely,
"Deborah Fortescue-Merrin"
Deborah Fortescue-Merrin
Chairman of the Board
CREATOR CAPITAL LIMITED
Cedar House, 41 Cedar Street
Hamilton HM 12, Bermuda
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 4, 2002
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Shareholders
("Annual General Meeting") of CREATOR CAPITAL LIMITED, a Bermuda exempted
company (the "Company" or "CCL"), will be held at Cedar House, 41 Cedar
Street, Hamilton HM 12, Bermuda, on June 4, 2002, at the hour of 10:00 a.m.,
Eastern Daylight Time, for the following purposes:
1. To elect six persons to the Board of Directors;
2. To re-appoint Buckley Dodds as the Company's auditors;
3. To consider and, if thought fit, to approve and ratify incentive stock
options, and amendments to incentive stock options, to purchase shares
of the Company granted to insiders which have not previously been
approved by the shareholders. To authorize the directors, in their
discretion to grant stock options to insiders, and to amend stock options
granted to insiders, subject to any regulatory approvals
4. To consider and, if thought fit, to cancel any and all existing Stock
Option Incentive Plans.
5. To receive and consider the report of the directors to the shareholders
and the financial statements of the Company together with the auditor's
report thereon for the financial year ended December 31, 2001, and
6. To transact such other business as may properly come before the Annual
General Meeting.
This Notice and Proxy Statement and the enclosed form of proxy are being
sent only to shareholders of record and beneficial owners of whom the
Company is aware as of May 1, 2002. However, all shareholders of record on
the date of the meeting are entitled to attend and to vote at the Annual
General Meeting. The Company's Form 10-K Annual Report for the year ended
December 31, 2001, including audited financial statements, is included with
this mailing of the Proxy Statement and this Notice.
We hope you will be represented at the Annual General Meeting by signing,
dating and returning the enclosed proxy card in the accompanying envelope
as promptly as possible, whether or not you expect to be present in person.
Your vote is important -- as is the vote of every shareholder -- and the
Board appreciates the cooperation of shareholders in directing proxies to
vote at the meeting.
Your proxy may be revoked at any time by following the procedures set forth
in the accompanying Proxy Statement, and the giving of your proxy will not
affect your right to vote in person if you attend the Annual General Meeting.
By Order of the Board of Directors
"Deborah Fortescue-Merrin"
Deborah Fortescue-Merrin
Chairman of the Board
DATED: May 1, 2002
CREATOR CAPITAL LIMITED
Cedar House, 41 Cedar House
Hamilton HM12, Bermuda
PROXY STATEMENT
For the Annual General Meeting of Shareholders
June 4, 2002
This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Directors (the "Board") of CREATOR CAPITAL
LIMITED, a Bermuda exempted company ("the Company" or "CCL"), for use at
the Annual General Meeting of the Company to be held at Hamilton, Bermuda,
on June 4, 2002, at 10:00 a.m., Eastern Daylight Time, and at any
adjournments or postponements thereof (the "Annual General Meeting").
Unless the context otherwise requires, references to the Company include
CCL and its subsidiaries. The proxy is revocable by (i) filing a written
revocation with the Secretary of the Company prior to the voting of such
proxy, (ii) giving a later dated proxy, or (iii) attending the Annual
General Meeting and voting in person. Shares represented by all properly
executed proxies received prior to the Annual General Meeting will be voted
at the meeting in the manner specified by the holders thereof. Proxies that
do not contain voting instructions will be voted; (i) FOR the election of
the nominees approved by the Board; (ii) FOR the re-appointment
of Buckley Dodds as the Company's auditors; (iii) FOR the granting, and
amending of incentive stock options at the discretion of the Board of
Directors; (iv) FOR the cancellation or any and all existing Incentive
Stock Option Plans, and (v) if any other matters properly come before the
Annual General Meeting, in accordance with the best judgment of persons
designated as proxies.
The Board has established May 1, 2002, as the date used to determine those
record holders and beneficial owners of Common Stock to whom notice of the
Annual General Meeting will be sent (the "Record Date"). On the Record
Date, there were 90,424,191 shares of common stock, par value US$.01 per
share (the "Common Stock"), outstanding. The holders of the Common Stock
are entitled to one vote for each share of Common Stock held. All matters
presented at the Annual General Meeting require approval by a simple
majority of votes cast at the meeting.
The presence, in person or by proxy, at the Annual General Meeting of at
least two shareholders entitled to vote is necessary to constitute a quorum
at the Annual General Meeting. This Notice, Proxy Statement and enclosed
form of proxy are first being mailed on or about May 3, 2002.
PROPOSAL 1
ELECTION OF DIRECTORS
In accordance with the Company's Bye-Laws, six directors are to be elected
at this Annual General Meeting. The Board recommends the election to the
Board of the nominees whose names appear below. Directors of the Company are
elected at each annual general meeting and hold office until the next annual
general meeting or until their successors are nominated and elected. In the
absence of instructions to the contrary, the enclosed proxy will be voted FOR
the nominees listed below.
Pursuant to the Bye-Laws of the Company, one director may be appointed by
Harrah's Interactive Investment Company, a Nevada Corporation ("HIIC", and
together with its affiliates, the "HIIC Entities"), pursuant to ByeLaw 54B.
Bye-Law 54B provides that during such time as the HIIC Entities own 10% or
more of the outstanding voting securities, or their equivalents, of the
Company, on a fully-diluted basis, the HIIC Entities will have the ability
to appoint a percentage of directors (rounded to the nearest 10%). This
percentage of directors has the same proportion to the size of the entire
Board as the number of such voting securities held by the HIIC Entities
bears to the total number of such securities, on a fully diluted basis. The
HIIC Entities will also be entitled to such proportionate representation on
the Executive, Compensation and Audit Committees of the Board. On the Record
Date, the HIIC Entities owned approximately 6,886,915 of the outstanding
voting securities, or their equivalents, of the Company. The HIIC Entities
have elected not to exercise their right to appoint a member to the Board for
the coming year.
With respect to the nominees for the six members of the Board to be elected
by the shareholders of the Company at the Annual General Meeting, the
following sets forth the name of each nominee and, for each, the period
during which the nominee has served as a director, information relating to
the nominee's age, principal occupation and business experience during the
past five years, any other directorships held by the nominee in publicly
held companies and certain other information. Information with respect to
the ages of directors is as of March 31, 2002 and information as to their
ownership of shares of Common Stock as of that date is provided under the
caption "Security Ownership By Directors, Officers and Five Persons (or
More) Shareholders.
MICHAEL BARTLETT, age 60, has been a director of the company since September
of 2000. Mr Bartlett is a thirty-year veteran of the thumbed entertainment
industry. During his career, Mr. Bartlett has held the following senior
positions: President & CEO Expo 86 (Vancouver, Canada), Senior VP Planning &
Development, Universal Studios (Florida), Vice President & General Manager,
Canada's Wonderland (Toronto, Canada), President & CEO, Natural Maritime
Authority (Norfolk, Virginia), Vice President, Planning & Development Taft
Broadcasting Theme Park Division (Cincinnati, Ohio). Currently, Mr. Bartlett
is the President and CEO of Indico Technologies and Creative Entertainment
Technologies, both publicly traded companies.
ANTHONY P. CLEMENTS, age 56, has been a director of the Company since March
of 1992. Mr. Clements is an investment banker with Yorkton Securities, based
in London, England. From 1994 to March 1998, he was an investment banker with
T. Hoare & Co. Mr. Clements also served as a director of the Company's
operating subsidiary from August 10, 1995 until its amalgamation with the
Company on June 17, 1997. Prior to 1994, Mr. Clements was an investment
banker for Rickets & Co., also based in London. Mr. Clements has also
managed the North American portfolio of Postel Investment Management
(pension fund managers for both the Post Office and British Telecom) from
1973 until 1987, and has worked in areas of corporate finance since 1987.
DEBORAH FORTESCUE-MERRIN, age 46, has been a director of the Company since
September 10, 1999, and previously a director of the Company from October
1995 to October 1997. Mrs. Merrin is Vice-President of J. Perot Financial
Corp., a private investment management firm located in Vancouver, British
Colombia, Canada. Previous to joining J. Perot Financial, Mrs. Merrin was
a securities broker for twelve years, and worked in the area of corporate
finance from 1989-1992, specializing in special situations concerning
medical issues. Mrs. Merrin is the President and Director of North
American Medical Services Inc. and a director of Indico Technologies,
each publicly traded companies. Mrs Merrin is currently the President,
and Chairman of Creator Capital Limited.
B.J. (JACK) ILES, age 70, has been a director of the Company since September
of 2000. Mr Iles is a founding partner of Smythe Ratcliffe, Chartered
Accountants (the Western Canadian Affiliate of Pannell Kerr Forster)
exclusively engaged in matters of taxation, which has been his vocation
for forty years. Mr Iles has served with the Canadian Federal Taxation
Authorities and the Comptroller of the Treasury. Mr Iles limits his
practice to international and multi-national commercial ventures,
specializing in maximizing after-tax cash flow and income retention. He has
extensive experience in all areas of tax practice with special emphasis on
planning and structuring for startup enterprises. Mr Iles' career has
spanned three continents, innumerable countries, and tax regimes. A seminar
leader, lecturer, author of papers and articles, Mr Iles is also a director
and former director of several private and not-for-profit companies and
societies.
ANASTASIA KOSTOFF-MANN, age 54, has been a director since September 10, 1999,
and she was previously a director of the Company until September 1996.
Ms Mann has over 28 years experience in the hotel, sales and marketing, and
travel industry. She is the Founder and Chairman of the Corniche Group of
Companies, overseeing all aspects of travel and meeting management for
corporate accounts. She is a lifetime director and former President and
Chairman of the International Travel & Tourism Research Association (TTRA).
She currently serves as a commissioner on the California Travel and Tourism
Commission where she also sits on the Executive Committee. Ms Mann is also
currently the Vice President of Creator Capital Limited.
STEPHEN ROSENBERG, age 58, has been a director since September 10, 1999. He
has been President of his own investment advisory firm located in Warner
Robins, Georgia, since January of 1989. From December 1985 through December
1988, Mr. Rosenberg was a broker with Dean Witter Reynolds. He has taught
graduate finance courses for Mercer University in Macon, Georgia, and is the
author of a number of financial books. Mr. Rosenberg has appeared on CNN,
CNBC and other radio and television programs as a financial expert and
estate planning authority. He hosts a weekly radio program and appears on
his local CBS affiliate. Mr. Rosenberg is also a Director of North
American Medical Services Inc., a publicly traded company.
The Company is not aware of any arrangements or understandings between any
of the individuals named above and any other person pursuant to which any
of the individuals named above were selected as a director and/or executive
officer. The Company is not aware of any family relationship among the
officers and directors of the Company or its subsidiaries. The only
arrangement with respect to members of the Board of which the Company is
aware is the right of the HIIC Entities to appoint directors to the Board
pursuant to Bye-Law 54B of the Company's Bye-Laws.
OTHER INFORMATION ABOUT THE BOARD AND ITS COMMITTEES
Meetings:
The Board of Directors did not hold any formal meetings during the fiscal
year ended December 31, 2001. Pursuant to the Company's current Bye-Laws,
the Board consists of six directors.
Compensation:
At the December 6, 1996 meeting of the Board, the Board adopted an option
plan covering 500,000 shares of Common Stock for members of the Board (the
"Director Option Plan"). Pursuant to the Director Option Plan, all
directors holding office at December 10th of each year automatically were
granted options for the purchase of 10,000 shares of Common Stock at the
trading price on such day. On October 17, 1997, the Board approved an
amendment to the Director Option Plan changing the grant date to the date
of the first meeting of the Board following the Company's Annual General
Meeting of Shareholders. Options granted pursuant to the Director Option
Plan have a ten-year term. On September 19, 2000, the directors of the
Company were not awarded any stock options. On June 7th, 2001, the directors
of the Company were not awarded any stock options. On October 11, 2001, a
total of 400,000 stock options were granted to several members of the Board
of Directors at an exercise price of US$0.35 per share. Proposal four
recommends the cancellation of any and all existing Management Incentive
and Stock Option Plans. This is proposed in an effort to simplify and
streamline the Option granting process.
All of the directors of the Company are re-imbursed for out-of-pocket
expenses. The directors of the Company receive no other compensation.
Executive Committee:
The Executive Committee of the Board currently consists of Ms Fortescue-
Merrin, Mr Tony Clements, and Mr Stephen Rosenberg. The principal functions
of the Executive Committee are to exercise the power of the Board in the
management of the business and affairs of the Company with certain
exceptions. The executive committee did not hold any meetings during the
fiscal year ended December 31, 2001.
Audit Committee:
The Audit Committee of the Board currently consists of Ms Fortescue-Merrin,
Mr Jack Iles, and Mr Stephen Rosenberg. The principal functions of the Audit
Committee are to make recommendations to the Board regarding; (i) its
independent auditors to be nominated for election by the shareholders; (ii)
to review the independence of such auditors; (iii) to approve the scope of
the annual audit activities of the independent auditors; (iv) to approve
the audit fee payable to the independent auditors; (v) and to review such
audit results. The audit committee did not hold any meetings during the
fiscal year ended December 31, 2001.
Compensation Committee:
The Compensation Committee currently consists of Ms Mann, Mr Tony Clements,
and Mr Stephen Rosenberg. The Compensation Committee did not hold any
meetings during the fiscal year ended December 31, 2001. For information
on the duties and actions of the Compensation Committee, see "Report on
Compensation."
SECURITY OWNERSHIP BY DIRECTORS, OFFICERS AND
FIVE PERCENT (OR MORE) SHAREHOLDERS
As of May 1, 2002, based on information supplied to the Company, CCL's
directors and executive officers as a group may be deemed to own
beneficially (including shares purchased upon exercise of stock options
and warrants, exercisable within 60 days) 1.19% of the outstanding shares
of Common Stock. To the knowledge of the directors and officers of the
Company, the following directors and officers of the Company and owners of
five percent (or more) of the outstanding Common Stock beneficially own the
shares of Common Stock set forth below.
Name Amount and Nature Of Percent of
Beneficial Ownership Class (1)
- ------------------------------------------------------------------------
Michael L Bartlett NIL *
Anthony P. Clements (2) 290,000 *
Deborah Fortescue-Merrin (3) 320,000 *
Jack Iles (4) 50,000 *
Anastasia Kostoff-Mann (5) 160,000 *
Stephen Rosenberg (6)* 176,500 *
Directors and Officers as a 996,500 1.09%
Group (7 individuals)
Harrah's Interactive Investment 6,886,915 7.53%
Company (HIIC) (9)
*Less than 1%
(1) Percent of class is determined by dividing the number of shares
beneficially owned by the outstanding number of shares of the Company,
and increased by options and warrants for 1,100,000 shares, which are
currently exercisable.
(2) Includes, options for 40,000 shares under the Directors Option Plan, and
options for 50,000 shares granted under the Management Incentive Plan,
and options for 100,000 shares granted on October 11, 2001.
(3) Does not include 376,471 shares of Common Stock held by a company which
Ms. Fortescue-Merrin's spouse controls. Does not include 3 Class B
Series A Convertible Preference Shares, which have been donated to a
charitable foundation of which both Mr & Mrs Merrin are directors. Does
not include 34 Class B Series A Convertible Preference Shares, which
have been donated to a charitable foundation of which both Mr & Mrs
Merrin are directors. Includes options for 20,000 shares of Common
Stock under the Directors Option Plan, and options for 50,000 shares
granted under the Management Incentive Plan, and options for 100,000
shares granted on October 11, 2001.
(4) Includes options to purchase 50,000 shares of Common Stock granted on
October 11, 2001.
(5) Includes 10,000 shares under the Directors Option Plan, and options for
50,000 shares granted under the Management Incentive Plan.
(6) Does not include 38,200 shares held by Mr. Rosenberg's spouse. Includes
options for 10,000 shares under the Directors Option Plan, options for
50,000 shares granted under the Management Incentive Plan, and options
for 100,000 shares granted on October 11, 2001.
(7) Harrah's Interactive Investment Company's address is 1 Harrah's Court,
Las Vegas, Nevada, 89119-4312.
EXECUTIVE COMPENSATION
The following table sets forth all compensation for services in all
capacities to the Company for the three most recently completed fiscal years
in respect of each of the individuals who served as the Chief Executive
Officer during the last completed fiscal year and those individuals who
were, as of December 31, 2001, the executive officers of the Company whose
individual total compensation for the most recently completed financial
year exceeded $100,000 (collectively, the "Named Executive Officers")
including any individual who would have qualified as a Named Executive
Officer but for the fact that individual was not serving as such an Officer
at the end of the most recently completed financial year:
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards
Name and $ Restricted Securities
Principal Fiscal Other Annual Stock Underlying
Position Yr Ended Salary($) Bonus($) Compensation Awards(#) Options(#)
- -----------------------------------------------------------------------------
Deborah 12/31/01 US$42,000 NIL NIL NIL 100,000
Fortescue- 12/31/00 US$23,000 NIL NIL NIL NIL
Merrin, 12/31/99 NIL NIL NIL NIL 60,000
Chairman
OPTION GRANTS IN THE LAST FISCAL YEAR
There were 150,000 option shares granted to consultants during the year
ending December 31, 2001.
Potential
Realizable
% of Value At
Total Assumed
No. of Options Annual Rates
Securities Granted to of Stock
Underlying Directors & Exercise Price
Options Officers in or Expiration Appreciation
Granted Fiscal Base Price Date for Option
Name (#) Year ($/sh) Term
- ---------------------------------------------------------------------------
5% 10%
T Clements 10,000(1) xx $0.14000 9-10-09 xx xx
T Clements 50,000(2) xx $0.50000 9-10-09 xx xx
T Clements 100,000(3) 25.0% $0.35000 10-11-11 xx xx
J Iles 50,000(3) 12.5% $0.35000 10-11-11 xx xx
D Merrin 10,000(1) xx $0.14000 9-10-09 xx xx
D Merrin 50,000(2) xx $0.50000 9-10-09 xx xx
D Merrin 100,000(3) 25.0% $0.35000 10-11-11 xx xx
A Mann 10,000(1) xx $0.14000 9-10-09 xx xx
A Mann 50,000(2) xx $0.50000 9-10-09 xx xx
A Mann 50,000(3) 12.5% $0.35000 10-11-11 xx xx
S Rosenberg 10,000(1) xx $0.14000 9-10-09 xx xx
S Rosenberg 50,000(2) xx $0.50000 9-10-09 xx xx
S Rosenberg 100,000(3) 25.0% $0.35000 10-11-11 xx xx
*Less than 1%
(1) Option granted to each director of the Company pursuant to the
Director Option Plan on September 10, 1999.
(2) Options granted under the Management Incentive Plan
(3) Options granted on October 11, 2001
FISCAL YEAR-END OPTION VALUES
No options were exercised by the Named Executive Officers during the fiscal
year ended December 31, 2001. No options listed in this table were in-the-
money at the end of the fiscal year ended December 31, 2001.
Number of Securities Underlying Unexercised
Options at Fiscal Year End 2001
Name Exercisable Unexercisable
- --------------------------------------------------------------------------
Deborah Fortescue-Merrin(1) 150,000 NIL
Deborah Fortescue-Merrin(2) 20,000 NIL
Deborah Fortescue-Merrin(3) 50,000 NIL
Deborah Fortescue-Merrin(4) 100,000 NIL
(1) Options issued pursuant to the 1996 Stock Programme, which expired in
February 2001
(2) Options issued pursuant to Director Option Plan.
(3) Options issued pursuant to the Management Incentive Plan.
(4) Options granted on October 11, 2001
REPORT ON COMPENSATION
Ms Deborah Merrin served as President & Chairman of the CCL in the fiscal
year 2001. She was compensated on a consulting basis, and received
US$ 42,000 during 2001.
The Members of the Board of Directors during The Fiscal Year Ended
December 31, 2001.
Michael L Bartlett B.J. (Jack) Iles
Anthony P. Clements Anastasia Kostoff-Mann
Deborah Fortescue-Merrin Stephen Rosenberg
PROPOSAL 2
APPOINTMENT OF AUDITOR
Unless otherwise instructed, the proxies given pursuant to this
solicitation will be voted FOR the appointment of Buckley Dodds as the
auditor of the Company, to hold office for the ensuing year, at a
remuneration to be negotiated by management, and approved by the Board.
PROPOSAL 3
APPROVAL OF THE GRANTING OF STOCK OPTIONS
Unless otherwise instructed, the proxies given pursuant to this
solicitation will be voted FOR the approval and ratification of, and
amendments to Incentive Stock Options to purchase common shares of Creator
Capital Ltd. granted, which have not been previously approved by the
shareholders. This proposal also authorizes the directors, in their
discretion, to grant stock options, and to amend stock options
granted, subject to any regulatory approvals required.
PROPOSAL 4
CANCELLATION OF ANY AND ALL EXISTING MANAGEMENT
INCENTIVE AND STOCK OPTION PLANS
Management has determined that the various Management Incentive and Stock
Option Plans are needlessly complicated to administer and potentially costly
to maintain for the Company. When and if necessary, such plans may be re-
introduced in the future. Unless otherwise instructed, the proxies given
pursuant to this solicitation will be voted FOR the cancellation of the
various Option Plans.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Redemption Agreement: As of April 30, 1997, pursuant to Redemption
Agreements (the "Redemption Agreements"), the Company issued to recipients
designated by Dr. Rex E. Fortescue, formerly a director of the Company, and
Anthony P. Clements, a director of the Company, 175,000 and 333,000 shares
of Common Stock, respectively. These shares were issued as consideration
for Messrs. Fortescue's and Clements' agreement to place into escrow
1,525,000 shares of Common Stock (of which 525,000 are registered in the
name of Dr. Fortescue and 1,000,000 are registered in the name of Mr.
Clements, which are held in an escrow pursuant to a performance earn-out
provision, only if such shares are released from the escrow for any reason
whatsoever. Dr. Fortescue is the father of Deborah Fortescue-Merrin,
Chairman of the Board and President of the Company.
Amalgamations: Pursuant to a Plan and Agreement of Merger and
Amalgamation, dated as of May 13, 1997 (the "Amalgamation Agreement"), the
Company's then wholly-owned subsidiary SGI Holding Corporation Limited, a
Bermuda exempted company ("SGIHC"), amalgamated with and into its 80%
owned subsidiary, then known as Interactive Entertainment Limited, a
Bermuda exempted company ("Operating Sub"). The Amalgamation Agreement
is between the Company, Operating Sub, SGIHC and HIIC, the former owner
of 20% of the outstanding stock of Operating Sub. Pursuant to the
Amalgamation Agreement, Operating Sub amalgamated with and into SGIHC and
thereafter SGIHC amalgamated with and into the Company (the "Amalgamations").
As a result of the Amalgamation of Operating Sub and SGIHC, the outstanding
shares of Operating Sub common stock held by HIIC were converted into
5,879,040 shares of Common Stock. Pursuant to the Amalgamation Agreement,
HIIC and its affiliates were provided, through certain amendments to the
Bye-Laws of the Company, (approved at the Special General Meeting of
Shareholders of the Company held June 16, 1997), with the right to
appoint persons (the "HIIC Appointees") to the Board, and to specified
committees in a number generally proportionate to their share holdings.
Additionally, the HIIC Entities, as shareholders, and the HIIC Appointees
were provided, pursuant to the Amalgamation Agreement, with the right to
approve specified significant corporate actions by the Company for as
long as the ownership of Common Stock by the HIIC Entities is in excess
of 20% (10% in some cases) of the outstanding voting shares computed on a
fully-diluted basis. The total number of shares owned by HIIC is
6,886,915, currently representing 13.01% of the outstanding common shares.
HIIC License Agreement: On June 17, 1997, in connection with the
Amalgamations, the Company also entered into a Software License Agreement
with HIIC (the "License Agreement"). The License Agreement is a fully-paid,
perpetual world-wide license to the HIIC Entities to use the Company's
gaming technology in non-competitive uses in traditional casino venues
which the HIIC Entities own, operate or manage. The License Agreement
includes source codes for the Company's gaming software, and neither party
to the License Agreement has any obligation to share or provide any
improvements or modifications with the other party.
HIIC Registration and Preemptive Rights: Also on June 17, 1997 and in
connection with the Amalgamations, the Company entered into a Registration
and Preemptive Rights Agreement with HIIC (the "Registration Rights
Agreement"). Under the Registration Rights Agreement, the HIIC Entities
have two demand registration rights to cause the Company to register the
Common Stock owned by the HIIC Entities. Each such offering is required
to be underwritten on a firm commitment basis by an underwriter chosen by
the Company. Pursuant to the Registration Rights Agreement, until the
earlier of when the HIIC Entities own less than 5% of the outstanding
voting shares of the Company on a fully-diluted basis, the HIIC Entities
have customary piggy-back rights to include their shares of Common Stock in
registered offerings by the Company. Pursuant to the Registration Rights
Agreement, the HIIC Entities have the right to purchase securities offered
by the Company for as long as the HIIC Entities own 20% or more of the
outstanding Common Stock on a fully-diluted basis at the same price and
terms such securities are otherwise being offered. The HIIC Entities also
have the right for as long as the HIIC Entities own 20% or more of the
outstanding voting shares on a fully-diluted basis to participate on a
proportionate basis in any non-pro rata stock repurchases or redemptions
conducted by the Company. Additionally, at any time that the HIIC Entities
own less than 10% of the outstanding voting shares, on a fully-diluted
basis, the Company has the right to cause the HIIC Entities to sell their
voting shares pursuant to a registered sale, and the HIIC Entities have
the right to cause the Company to file a registration statement to sell
their voting shares in the event of any change in or conduct of the
business or proposed business of the Company or any of its subsidiaries or
any other action or inaction of the Company or any of its subsidiaries
which would jeopardize the HIIC Entities' gaming and related licenses or
the if Company does not redeem a "Disqualified Holder" (as defined in and
pursuant to the Company's Bye-Laws) of its securities, in each case at
the Company's expense without being subject to the limitations on demand
rights set forth above.
EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
DEBORAH FORTESCUE-MERRIN, a Director of the Company was appointed the
Chairman of the Board and President at the Directors Meeting September 11,
1999. She was re-appointed at the Directors Meeting of June 7, 2001.
ANASTASIA KOSTOFF-MANN, a Director of the Company was appointed Vice-
President June 9, 2000. She was re-appointed at the Director's meeting of
June 7, 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Other than as indicated below, no director, officer or beneficial owner
of more than 10% of any class of equity securities has failed to file
reports required by Section 16(b) of the Exchange Act for the Company's
fiscal year ended December 31, 2001
SOLICITATION OF PROXIES
The cost of soliciting proxies will be borne by the Company. Custodians
and fiduciaries will be supplied with proxy materials to forward to
beneficial owners of stock and normal handling charges will be paid for
such forwarding services.
SHARES SUBJECT TO IRREVOCABLE PROXY AND AGREEMENT NOT TO VOTE SHARES
3,525,000 shares of Common Stock are subject to an irrevocable proxy and
an agreement not to vote, and will not be voted at the Annual General Meeting
or at any subsequent general meeting of the shareholders of the Company.
When the Company acquired the rights to its in-flight gaming software from
SGII on November 7, 1991, a portion of the consideration was 3,000,000
shares of Common Stock which, according to then applicable requirements,
were placed in escrow, to be released on the basis of one share for each
U.S.$1.78 of net cash flow generated from the assets over a ten-year period
(the "Performance Shares"). An additional 525,000 shares, which were
issued to Dr. Rex E. Fortescue, formerly a director of Sky Games, are held
in the escrow on the same terms and are also included as Performance Shares.
As part of certain agreements to allow the eventual redemption and
cancellation of the 3,525,000 Performance Shares only when and if such
Performance Shares should be released from the escrow, the holders of the
Performance Shares issued an irrevocable proxy to First Tennessee Bank, and
First Tennessee Bank entered into an agreement not to vote the Performance
Shares at any general meeting of shareholders of IEL or otherwise.
The irrevocable proxy and the agreement not to vote the Performance Shares
will terminate upon the cancellation of the Performance Shares. Consequently,
the 3,525,000 Performance Shares will not be voted at the Annual General
Meeting or at any subsequent general meeting of the shareholders of the
Company.
OTHER MATTERS
Management of the Company is not aware of any other matter to come before
the meeting other than as set forth in the notice of meeting. If any other
matter properly comes before the meeting, it is the intention of the persons
named in the enclosed form of proxy to vote the shares represented thereby
in accordance with their best judgment on such matter.
SHAREHOLDER PROPOSALS
Proposals of shareholders to be presented at the 2003 Annual General
Meeting of Shareholders must be received by the Company no later than
December 20, 2002 in order to be considered for inclusion in the Company's
Proxy Statement and form of proxy relating to such meeting.
DATED: May 1, 2002.
Creator Capital Limited
Proxy for Annual General Meeting of Shareholders on June 4, 2002
This Proxy is Solicited on Behalf of the Board of Directors of Interactive
Entertainment Limited
The undersigned hereby appoints Stephen James or Tammy L Richardson, or
either of them, with full power of substitution, the undersigned's true and
lawful attorneys and proxies to vote the shares of Common Stock of Creator
Capital Limited, which the undersigned is entitled to vote at the Annual
General Meeting of Shareholders to be held at Hamilton, Bermuda, on June 4,
2002 at 10:00 a.m. Eastern Daylight Time, and all adjournments or
postponements thereof, with all the powers the undersigned would possess
if personally present, as indicated on this card for the proposals described
in the Notice and Proxy Statement for such meeting and in their discretion
on such other matters as may properly come before the meeting or any
adjournments or postponements thereof.
Unless otherwise instructed, this proxy will be voted for the nominees
listed in Proposal 1 and for approval of the matters set forth in Proposals
2, 3 and 4.
Please mark, sign and mail this proxy promptly in the enclosed envelope.
1. Election of Director Nominees:
Messrs. Bartlett, Clements, Iles, Rosenberg,
and Fortescue-Merrin and Kostoff-Mann:
[_] FOR [_] WITHHELD [_] FOR, except
nominees from nominees vote withheld
from the following
nominees
-------------------------------------------------------
2. FOR the appointment of Buckley Dodds as the Company's auditor:
[_] FOR [_] AGAINST [_] ABSTAIN
approval approval
3. Approve and ratify incentive Stock Options:
[_] FOR [_] AGAINST [_] ABSTAIN
approval approval
4. Approve the cancellation of any and all existing Stock Option Programmes
and Plans
[_] FOR [_] AGAINST [_] ABSTAIN
approval approval
Dated: _____________, 2002 No of Shares: ___________________________
Signature: ____________________________
Capacity/Title: _________________________
Please sign the exact name of the shareholder as it appears hereon. If
acting as administrator, trustee or in other representative capacity,
please sign name and title. Please check mark, sign, date, and mail this
proxy promptly in the enclosed envelope.