SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) of the Securities Exchange Act of 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
CHECK THE APPROPRIATE BOX:
[ ] PRELIMINARY PROXY STATEMENT
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[X] DEFINITIVE PROXY STATEMENT
[ ] DEFINITIVE ADDITIONAL MATERIALS
[ ] SOLICITING MATERIAL PURSUANT TO RULE 14A-11(C) OR RULE 14A-12
AMERICAN JEWELRY CORP.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] NO FEE REQUIRED
[ ] 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:
- --------------------------------------------------------------------------------
[ ] FEE PREVIOUSLY PAID WITH PRELIMINARY MATERIALS.
[ ] CHECK BOX IF ANY PART OF THE FEE IS OFFSET AS PROVIDED BY EXCHANGE ACT
RULE 0-11(A)(2) AND IDENTIFY THE FILING FOR WHICH THE OFFSETTING FEE WAS
PAID PREVIOUSLY. IDENTIFY THE PREVIOUS FILING BY REGISTRATION STATEMENT
NUMBER, OR THE FORM OR SCHEDULE AND THE DATE OF ITS FILING.
(1) AMOUNT PREVIOUSLY PAID:
- --------------------------------------------------------------------------------
(2) FORM, SCHEDULE OR REGISTRATION STATEMENT NO.:
- --------------------------------------------------------------------------------
(3) FILING PARTY:
- --------------------------------------------------------------------------------
(4) DATE FILED:
AMERICAN JEWELRY CORP.
131 WEST 35TH STREET
NEW YORK, NEW YORK 10001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 22, 2002
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of American
Jewelry Corp., a Delaware corporation (the "Company"), will be held at the
offices of Jenkens & Gilchrist Parker Chapin LLP, The Chrysler Building, 405
Lexington Avenue, New York, New York 10174, on Tuesday, January 22, 2002 at
10:00 A.M. New York time, to consider the following proposals:
1. The election of four (4) directors, named in the accompanying Proxy
Statement to serve on the Board of Directors of the Company until
their respective successors are elected and qualified;
2. The approval of an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of the
Company's common stock, par value $.001 per share (the "Common
Stock"), from 350,000,000 shares to 600,000,000 shares;
3. The approval of a reincorporation proposal to merge the Company with
and into its wholly-owned subsidiary, American Jewelry Corp., a Nevada
corporation, which will be the surviving corporation for the purpose
of changing the Company's domicile from Delaware to Nevada;
4. To ratification of the appointment of Feldman Sherb & Co., P.C. as the
independent auditors of the Company for the fiscal year ending
December 31, 2002; and
5. The transaction of such other business as may properly come before the
meeting.
Stockholders of record on the books of the Company at the close of business
on December 14, 2001 will be entitled to vote at the meeting or any adjournment
thereof. A copy of the annual report containing the financial statements of the
Company for the year 2000 is enclosed.
All stockholders are cordially invited to attend the meeting. Whether or
not you expect to attend, you are requested to sign, date and return the
enclosed proxy promptly. Stockholders who execute proxies retain the right to
revoke them at any time prior to the voting thereof. A return envelope which
requires no postage if mailed in the United States is enclosed for your
convenience.
By Order of the Board of Directors
Dated: New York, New York George Weisz
December 21, 2001 Secretary
AMERICAN JEWELRY CORP.
131 WEST 35TH STREET
NEW YORK, NEW YORK 10001
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
JANUARY 22, 2002
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of American Jewelry Corp. (the "Company") of proxies in
the enclosed form for the Annual Meeting of Stockholders to be held at the
offices of Jenkens & Gilchrist Parker Chapin, LLP, The Chrysler Building, 405
Lexington Avenue, New York, New York 10174 on Tuesday, January 22, 2002, at
10:00 A.M. New York time, and for any adjournment or adjournments thereof, for
the purposes set forth in the foregoing Notice of Annual Meeting of
Stockholders.
A proxy may be revoked by a stockholder at any time before its exercise by
filing with George Weisz, the Secretary of the Company, at the address set forth
above, an instrument of revocation or a duly executed proxy bearing a later
date, or by attendance at the Annual Meeting of Stockholders and electing to
vote in person. Attendance at the Annual Meeting of Stockholders will not, in
and of itself, constitute revocation of a proxy.
At the Annual Meeting, the Stockholders will vote on the following
proposals:
1. The election of four (4) directors, named in the accompanying Proxy
Statement to serve on the Board of Directors of the Company until
their respective successors are elected and qualified;
2. The approval of an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of the
Company's common stock, par value $.001 per share (the "Common
Stock"), from 350,000,000 shares to 600,000,000 shares;
3. The approval of a reincorporation proposal to merge the Company with
and into its wholly-owned subsidiary, American Jewelry Corp., a Nevada
corporation, which will be the surviving corporation, for the purpose
of changing the domicile of the Company from Delaware to Nevada;
4. The ratification of the appointment of Feldman Sherb & Co., P.C. as
the independent auditors of the Company for the fiscal year ending
December 31, 2002; and
5. The transaction of such other business as may properly come before the
meeting.
The Company knows of no other matters to be presented at the Annual
Meeting. If any additional matters should be properly presented, proxies shall
be voted in accordance with the judgment of the proxy holders.
Each stockholder of the Company is requested to complete, sign, date and
return the enclosed proxy without delay in order to ensure that the shares owned
by such stockholder are voted at the Annual Meeting. Any stockholder may revoke
a proxy at any time before it is voted by: (i) delivering written notice to the
Secretary of the Company, at the address of the Company set forth above, stating
that the proxy is revoked, (ii) executing a subsequent proxy and delivering
it to the Secretary of the Company, or (iii) attending the Annual Meeting and
voting in person. Each properly executed proxy returned will be voted as
directed. In addition, if no directions are given or indicated, the persons
named in the accompanying proxy intend to vote proxies in favor of the foregoing
proposals.
The Company will bear the cost of soliciting proxies. Directors, officers
and employees of the Company may solicit proxies personally or by telephone,
telegram or mail. Such directors, officers and employees will not be
additionally compensated for such solicitation but may be reimbursed for
reasonable out-of-pocket expenses incurred in connection therewith. Arrangements
will also be made with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of proxy material to the beneficial owners of the
Common Stock held of record by such persons and the Company will, upon request,
reimburse such custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses incurred in connection therewith.
The principal executive offices of the Company are located at 131 West 35th
Street, New York, New York 10001. The approximate date on which this Proxy
Statement and the accompanying form of Proxy will first be sent or given to the
Company's stockholders is December 21, 2001.
VOTING SECURITIES
Only holders of shares of Common Stock and the holders of shares of series
A preferred stock, par value $0.001 per share (the "Series A Preferred Stock"),
of record at the close of business on December 14, 2001 are entitled to notice
of and to vote at the Annual Meeting or any adjournment thereof. On the record
date there were 349,938,258 shares of Common Stock issued and outstanding and
200,000 shares of Series A Preferred Stock issued and outstanding. Each
outstanding share of Common Stock is entitled to one vote upon all matters to be
acted upon at the Annual Meeting and the holders of Series A Preferred Stock are
entitled to an aggregate of 410,797,085, representing 54% of the total shares
entitled to vote by all holders of the then outstanding shares of Common Stock
and the holders of all the then outstanding shares of Series A Preferred Stock
combined. The holders of the Series A Preferred Stock are entitled to vote along
with the holders of Common Stock as one class on all matters for which the
stockholders of the Company shall vote.
VOTING PROCEDURES
The directors will be elected by the affirmative vote of a plurality of the
shares of Common Stock and Series A Preferred Stock present in person or
represented by proxy at the Meeting, provided a quorum exists. The approval of
the proposal to amend the certificate of incorporation of the Company to
increase the number of authorized shares of Common Stock and the approval of a
reincorporation proposal to merge the Company with and into American Jewelry
Corp., a Nevada corporation, for the purposes of changing the Company's domicile
from Delaware to Nevada require the affirmative vote of a majority of the issued
and outstanding shares of Common Stock and Series A Preferred Stock entitled to
vote. The approval of the selection of Feldman Sherb & Co., P.C. as the
Company's independent auditors for the fiscal year ending December 31, 2002
requires the affirmative vote of a majority of the shares of Common Stock and
Series A Preferred Stock present in person or represented by proxy at the
Meeting, provided a quorum exists. A quorum is established if, as of the Record
Date, the holders of a majority of the votes are present in person or
represented by proxy at the Annual Meeting. Votes will be counted and certified
by one or more Inspectors of Election. In accordance with Delaware law,
abstentions and "broker non-votes" (i.e. proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares as to a matter with respect to
which the brokers or nominees do not have discretionary power to vote) will be
treated as present for purposes of determining the presence of a quorum. Broker
non-votes with respect to any matter are not considered as shares entitled to
vote and will, therefore, have no legal effect on the vote on that particular
matter. However, because an affirmative vote of a majority of the outstanding
shares of the Company's Common Stock and Series A Preferred Stock is required to
approve an amendment to the certificate of incorporation of the Company
2
(proposal 2) and to approve the merger and reincorporation (proposal 3), broker
non-votes and abstentions will have the same effect as a vote "against" the
amendment to the certificate of incorporation of the Company (proposal 2) and
the merger and reincorporation (proposal 3). The enclosed proxies will be voted
in accordance with the instructions thereon. Unless otherwise stated, all shares
represented by such proxy will be voted as instructed. Proxies may be revoked as
noted above.
3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of December 14, 2001, certain
information as to the stock ownership of each person known by the Company to own
beneficially 5% or more of the Company's outstanding Common Stock, by each
director, and nominee for director, of the Company who owns shares of Common
Stock or Series A Preferred Stock, and by all officers and directors as a group.
This table includes the shares of Series A Preferred Stock, which have the right
in the aggregate to cast 54% of the total votes which may be cast by the holders
of all the outstanding (i) shares of Common Stock and (ii) Series A Preferred
Stock.
Name and Address
of Beneficial Number of shares of Number of shares Percentage of
Owner Common Stock Owned (1) of Series A Preferred Owned Voting Rights
- ------------------ ---------------------- --------------------------- -------------
Isaac Nussen 16,667 100,000 54%
131 West 35th Street
New York, NY 10001
George Weisz 16,667 100,000 54%
131 West 35th Street
New York, NY 10001
Eric Rothschild -0- -0- *
131 West 35th Street
New York, NY 10001
Meir Klepner
131 West 35th Street
New York, NY 10001 -0- -0- *
All officers and
directors as a
group (4 persons) 10,120,000 200,000 54%
* Represents less than 1%.
(1) Except as otherwise indicated, all shares are beneficially owned and sole
voting and investment power is held by the persons named.
4
PROPOSAL 1
ELECTION OF DIRECTORS
At the Annual Meeting, four (4) Directors are to be elected by the
stockholders to serve until the next Annual Meeting of the Stockholders or until
their successors are elected and shall qualify. The directors will be elected by
the affirmative vote of a plurality of the shares of Common Stock and Series A
Preferred Stock present in person or represented by proxy at the Meeting,
provided a quorum exists. The accompanying form of Proxy will be voted for the
re-election as Directors of Isaac Nussen, George Weisz and Eric J. Rothschild
and for the election as Director of Meir Klepner. Proxies cannot be voted for a
greater number of persons than the number of nominees named in the Proxy
Statement. Management has no reason to believe that any of the nominees will not
be a candidate or will be unable to serve. However, in the event that any of the
nominees should become unable or unwilling to serve as a Director, the Proxy
will be voted for the election of such person or persons as shall be designated
by the Directors.
DIRECTORS OF THE COMPANY
The following table sets forth information about each executive officer,
director and nominee for director of the Company.
Name Age Title
Isaac Nussen 51 President and Director
George Weisz 61 Director, Vice President and Secretary
Eric J. Rothschild 69 Director
Meir Klepner 43 Director
Isaac Nussen has served as President, CEO and Director since November 1998.
Since 1993 he also served in the same positions for Jarnow Corporation. He is
responsible for marketing and sales. Mr. Nussen served as an executive officer
of other jewelry manufacturing companies for over 25 years.
George Weisz (a.k.a. Ghidale Weisz) has served as Chief Operating Officer,
Vice President, Secretary and Director of the Company since November 1998. Since
1993 he also served in the same positions for Jarnow Corporation. He is
responsible for day to day operations including development and manufacturing.
Mr. Weisz served as an executive officer of other jewelry manufacturing
companies for over 25 years.
Eric J. Rothschild has served as a director since November 1998. For the
past six years, and prior thereto, he has been a self-employed physician and a
member of Orangeburg Orthopedic Associates.
Meir Klepner has served as a director since December 4, 2001. For the past
fifteen years, he has operated a paper goods wholesale business in Israel and
regularly travels to the United States on business.
Mr. George Weisz and Mr. Isaac Nussen are brothers in law.
MEETINGS AND COMMITTEES OF THE BOARD
In the past year, the Board of Directors had three meetings. Each of the
directors attended at least 75% of the meetings.
The Board of Directors intends to appoint an Audit Committee and a
Compensation Committee to contain at least two independent directors. Currently,
the functions and responsibilities of the Audit and Compensation Committees are
assumed by all of the members of the Board of Directors. The Company does not
have a Nominating Committee.
5
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), officers, directors and holders of more than 10% of the
outstanding shares of the Company's Common Stock ("Reporting Persons") are
required to file periodic reports of their ownership of, and transactions
involving, the Company's Common Stock with the Securities and Exchange
Commission (the "SEC"). Based solely upon a review of copies of such reports
received by the Company, the Company believes that its Reporting Persons have
complied with all Section 16 filing requirements applicable to them with respect
to the Company's fiscal year ended December 31, 2000.
EXECUTIVE COMPENSATION
The compensation paid to the Company's Chief Executive Officer and to each
of the other executive officers whose total compensation exceeded $100,000
during each of the preceding three fiscal years are as follows:
SUMMARY COMPENSATION TABLE
Annual Long-Term
Compensation Compensation
Other Annual
Name and Principal Salary Compensation Awards/Options
Position Year ($) ($) (#)
- -------------------------------------------------------------------------------------------
Isaac Nussen, 2000 $ 0 0 0
Chief Executive Officer 1999 $250,000.00 0 0
And President 1998 $ 23,000.00 0 0
- -------------------------------------------------------------------------------------------
George Weisz, 2000 $ 0 0 0
Vice-President 1999 $250,000.00 0 0
1998 $ 23,000.00 0 0
Mr. Weisz and Mr. Nussen contributed their annual salaries for the year
2000, totaling in the aggregate $450,000, to the paid-in capital of the Company.
Mr. Weisz and Mr. Nussen are entitled to receive an annual salary of $250,000
each, however they did not receive the entire salary allowed in 1999 and 1998,
and are owed the amounts from the Company not paid by the Company in those
years. In addition, both are entitled to receive a bonus of 2.5% of net profit
(before taxes) in excess of $500,000 in each fiscal year commencing with the
fiscal year ending December 31, 1999, cost of living increases and a life
insurance policy in the face amount of $1,000,000 payable to them. In addition,
on a change of control, in the event either or both Mr. Weisz or Mr. Nussen
terminate their employment with the Company, they will each be entitled to
receive a lump sum payment equal to 290% of his average annual compensation for
the five years preceding the date of termination.
OPTION GRANTS IN 2000
None
AGGREGATED OPTION EXERCISES IN 2000 AND FOR YEAR-END OPTION VALUES
None
6
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
At September 1999, the Company owed George Weisz and Isaac Nussen
$3,626,056 in connection with certain interest free loans made to the Company.
The loans are due on demand and are convertible into shares of Common Stock of
the Company. These loans have been subordinated to senior debt of the factor.
George Weisz and Isaac Nussen have personally guaranteed, without
compensation, the indebtedness of the Company to its factor. In accordance with
the terms of the guarantee, in the event that payments are not made to the
factor, Mr. Weisz and Mr. Nussen will be required to make such payments. On
September 30, 1999, Mr. Nussen and Mr. Weisz also personally assumed
approximately $3,477,000 of an obligation formerly due to the finance company as
part of a $2,000,000 note to the finance company issued by the Company.
REQUIRED VOTE
Election of the directors requires the affirmative vote of a plurality of
the shares of Common Stock and the Series A Preferred Stock present in person or
represented by proxy at the Annual Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE ABOVE NAMED NOMINEES. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE SO
VOTED UNLESS STOCKHOLDERS SPECIFY IN THEIR PROXIES A CONTRARY CHOICE.
7
PROPOSAL 2
AMENDMENT TO CERTIFICATE
OF INCORPORATION TO INCREASE THE
AUTHORIZED SHARES OF COMMON STOCK
At a meeting of the Board of Directors on November 26, 2001 the Board
adopted a resolution, by unanimous vote, to amend the Certificate of
Incorporation to increase the number of authorized shares of Common Stock of the
Company. The Company is currently authorized to issue 350,000,000 shares of
Common Stock. The Company's Board of Directors recommends that the Company's
stockholders approve an amendment (the "Amendment") to the Company's Certificate
of Incorporation in the form attached hereto as Exhibit A, that would increase
the authorized shares of the Company's Common Stock from 350,000,000 shares to
600,000,000 shares. Of the 350,000,000 shares of Common Stock currently
authorized, 349,938,258 shares of Common Stock are issued and outstanding. If
the Amendment is approved by the Company's stockholders, the first paragraph of
ARTICLE FOURTH of the Company's Certificate of Incorporation will read as
follows:
FOURTH: (A) The total number of shares of all classes of stock which the Company
shall be authorized to issue is Six Hundred Five Million (605,000,000), of which
Six Hundred Million (600,000,000) shares shall be designated as Common Stock,
par value $.001 per share, and Five Million (5,000,000) shall be designated as
Preferred Stock, par value $.001 per share.
The Company proposes to increase the number of authorized shares of its
Common Stock to provide additional shares for general corporate purposes,
including stock dividends and splits, raising additional capital, issuance of
shares pursuant to the employee stock option plans, issuances upon conversion of
outstanding debentures and shares of Preferred Stock which may be issued and
possible future acquisitions. The Company currently has outstanding $273,830
principal amount of 8% convertible debentures (the "Debentures"), which are
convertible into shares of Common Stock. The Debentures bear interest at a rate
of 8% and are due on April 25, 2003. The Debentures are convertible into shares
of Common Stock at a conversion price equal to the lower of (i) 92% of the
average of the closing sale price of the Company's Common Stock for the five
trading days prior to the conversion date, and (ii) $0.015 (subject to customary
adjustments, such as stock splits).
The Company's officers may from time to time engage in discussions with
other businesses concerning the possible acquisition of such companies by the
Company, in which the Company may consider issuing stock as part or all of the
acquisition price. The Board of Directors believes that an increase in the total
number of shares of authorized common stock will better enable the Company to
meet its future needs and give it greater flexibility in responding quickly to
business opportunities. The proposed increase will also provide additional
shares for corporate purposes generally. The Company currently has no intention
of issuing shares of Common Stock pursuant to any other transactions or
agreements, other than in connection with the conversion of the Debentures.
The Company's issuance of shares of Common Stock, including the additional
shares that will be authorized if this proposed amendment is adopted, may dilute
the present equity ownership position of current holders of Common Stock and may
be made without stockholder approval, unless otherwise required by applicable
laws. The authority possessed by the Board of Directors to issue Common Stock
could also potentially be used to discourage attempts to obtain control of the
Company through a merger, tender offer, proxy contest or otherwise by making
such attempts more difficult or costly to achieve.
REQUIRED VOTE
The Board of Directors believes that, as proposed, the approval of the
amendment is in the best interests of the stockholders of the Company. Approval
of this proposal requires the affirmative vote of a majority of the outstanding
shares of Common Stock and Preferred Stock of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND THE
COMPANY'S CERTIFICATE OF INCORPORATION TO INCREASE THE COMPANY'S AUTHORIZED
SHARES OF COMMON STOCK.
8
PROPOSAL NO. 3
REINCORPORATION PROPOSAL
GENERAL
The Company's Board of Directors has unanimously approved, subject to
stockholder approval, a proposal to change the Company's state of incorporation
from Delaware to Nevada, by means of a merger (the "Merger") of the Company with
and into American Jewelry Corp., a Nevada corporation ("AMJC - Nevada"), a newly
formed, wholly owned subsidiary of the Company (the "Reincorporation Proposal"),
which will be the surviving corporation in the Merger.
The following discussion summarizes certain aspects of the Reincorporation
Proposal, including certain material differences between Delaware corporate law
and Nevada corporate law. This summary is not intended to be a complete
description of the Reincorporation Proposal or the differences between
stockholders' rights under Delaware corporate law and Nevada corporate law, and
is qualified in its entirety by reference to :
o The Agreement and Plan of Merger between the Company and AMJC-Nevada
(the "Merger Agreement") attached hereto as Exhibit B;
o The Articles of Incorporation of AMJC-Nevada (the "New Charter")
attached hereto as Exhibit C; and
o The By-laws of AMJC-Nevada (the "New By-laws") attached hereto as
Exhibit D.
Approval of the Reincorporation Proposal requires the affirmative vote of a
majority of the issued and outstanding shares of Common Stock and Series A
Preferred Stock entitled to vote thereon. The approval of the Reincorporation
Proposal by the Company's stockholders will constitute an adoption of the Merger
Agreement, the New Charter and the New By-laws and will affect certain rights of
the stockholders. STOCKHOLDERS ARE URGED TO READ CAREFULLY THIS PROXY STATEMENT
AND THE ANNEXES ATTACHED HERETO IN ITS ENTIRETY BEFORE VOTING ON THE
REINCORPORATION PROPOSAL.
PRINCIPAL REASONS FOR THE REINCORPORATION
The Board of Directors of the Company believes that the best interests of
the Company and its stockholders will be served by changing the Company's state
of incorporation from Delaware to Nevada. The principal reason for the
reincorporation is that the franchise tax and related fees that the Company pays
as a Delaware corporation are significantly higher than the comparable fees for
a Nevada corporation. Additionally, after considering the disadvantages and the
advantages, including the more favorable corporate environment afforded by
Nevada corporate law to directors and officers, the Board of Directors concluded
that the benefits of being incorporated in Nevada outweigh the benefits of
remaining in Delaware.
PRINCIPAL FEATURES OF THE REINCORPORATION PROPOSAL
At the Effective Date of the Merger (as defined in the Merger Agreement),
the separate existence of the Company will cease and AMJC-Nevada, as the
surviving corporation, will succeed to all business, properties, assets and
liabilities of the Company. Upon the Effective Date of the Merger, (i) each
outstanding share of Common Stock of the Company immediately prior to the
Effective Date will be converted into one (1) share of common stock, par value
$0.001 per share (the "AMJC-Nevada Common Stock") of AMJC-Nevada; (ii) each
9
outstanding share of Series A Preferred Stock of the Company outstanding
immediately prior to the Effective Date will be converted into one (1) share of
series A preferred stock par value $0.001 per share (the "AMJC-Nevada Series A
Preferred Stock") of AMJC - Nevada; and (iii) each outstanding option, warrant
or other securities convertible into shares of the Company's Common Stock will
be automatically assumed by AMJC-Nevada and will be converted into the right to
acquire an equal number of shares of AMJC-Nevada Common Stock, under the same
terms and conditions as the original options, warrants and securities
convertible of the Company.
No action need be taken by the Company's stockholders to exchange their
stock certificates as a result of the Merger. Certificates for shares of the
Company's Common Stock and Series A Preferred Stock will automatically represent
an equal number of shares of AMJC-Nevada Common Stock and AMJC-Nevada Series A
Preferred Stock, respectively.
The Company's Common Stock is currently trading on the OTC Bulletin Board,
and following consummation of the Merger, AMJC-Nevada Common Stock will continue
to trade on the OTC Bulletin Board without interruption, under the same ticker
symbol "AMJC".
Approval of the Reincorporation Proposal will effect a change in the legal
domicile of the Company and certain other changes of a legal nature, as
described in this Proxy Statement. Reincorporation of the Company will not, in
and of itself, result in any change in the business, management, location of the
principal executive offices, assets, liabilities or stockholders' equity of the
Company. The number of directors comprising the Board of Directors of
AMJC-Nevada will be three initially, each of whom is currently a director of the
Company and each of the executive officers of the Company will serve as
executive officers of AMJC-Nevada.
Upon approval of the Reincorporation Proposal by the Company's
stockholders, the proposed reincorporation will be consummated at such time as
the Boards of Directors of the Company and AMJC-Nevada determine is advisable.
The Merger Agreement provides, however, that the Merger may be abandoned by the
Board of Directors of either the Company or AMJC-Nevada prior to the Effective
Date, either before or after stockholder approval. After approval by the
stockholders of the Company of the Merger Agreement, no amendment shall be made
which (a) alters or changes the amount or kind of shares of AMJC-Nevada to be
received on conversion of shares of the Company as provided, (b) alters or
changes any term of the Articles of Incorporation of AMJC-Nevada to be effected
by the Merger, or (c) alters or changes any of the terms and conditions of the
Merger Agreement if such alteration or change would adversely affect the rights
of stockholders of the Company, without the further approval of such
stockholders.
RIGHTS OF STOCKHOLDERS TO DISSENT
Since the Reincorporation Proposal will be conducted through a merger of
the Company into its wholly-owned subsidiary, AMJC-Nevada, the Company's
stockholders will not have a right to dissent from the reincorporation and
receive the fair market value of their shares in cash.
COMPARISON OF STOCKHOLDERS' RIGHTS
Although the corporate statutes of Nevada and Delaware are substantially
similar, certain differences exist. This summary is not intended to be complete,
and stockholders should refer to the Delaware General Corporation Law (the
"Delaware Law") and the Nevada Revised Statutes, as amended (the "Nevada Law")
to understand how these laws will apply to the Company and AMJC-Nevada.
10
Classified Board of Directors
-----------------------------
The Delaware Law permits any Delaware corporation to classify its board of
directors into as many as three classes as equally as possible with staggered
terms of office. After initial implementation of a classified board, one class
(consisting of approximately l/3 of the entire board) will be elected at each
annual meeting of the stockholders to serve for a term of three years or until
their successors are elected to take office. The Nevada Law also permits
corporations to classify boards of directors provided that at least one-fourth
of the total number of directors is elected annually. Since neither the Company
nor AMJC-Nevada have a classified board, there will be no difference in
stockholders' rights with respect to this issue.
Cumulative Voting
-----------------
Cumulative voting for directors entitles stockholders to cast a number of
votes that is equal to the number of voting shares held multiplied by the number
of directors to be elected. Stockholders may cast all such votes either for one
nominee or distribute such votes among up to as many candidates as there are
positions to be filled. Cumulative voting may enable a minority stockholder or
group of stockholders to elect at least one representative to the board of
directors where such stockholders would not otherwise be able to elect any
directors.
The Nevada Law permits cumulative voting in the election of directors as
long as certain procedures are followed. A Delaware corporation may provide for
cumulative voting in the corporation's certificate of incorporation.
Since neither the Company, nor AMJC-Nevada utilize cumulative voting, there
will be no significant difference in stockholders' rights with respect to this
issue.
Vacancies on the Board of Directors
-----------------------------------
Under the Delaware Law, vacancies on the board of directors will be filled
by the affirmative vote of a majority of the remaining directors then in office,
even if less than a quorum unless otherwise provided in the certificate of
incorporation or by-laws. Any director so appointed will hold office for the
remainder of the full term of the class of directors in which the vacancy
occurred. Similarly, the Nevada Law provides that vacancies may be filled by a
majority of the remaining directors, though less than a quorum, unless the
articles of incorporation provide otherwise. The by-laws of the Company and
AMJC-Nevada address the issue of director vacancies in the same manner.
Therefore, the change from Delaware law to Nevada law will not alter
stockholders' rights with respect to filling vacancies.
Removal of Directors
--------------------
Under both the Delaware Law and the Nevada Law, any director or the entire
board of directors may be removed, with or without cause, upon the vote of the
shares entitled to vote in the election of directors. Under Delaware Law, a
majority vote is required to remove a director. Under the Nevada Law, a director
may be removed only by the vote of stockholders casting not less than two-thirds
of the outstanding voting rights.
11
Indemnification of Officers and Directors and Advancement of Expenses
----------------------------------------------------------------------
Delaware and Nevada law have substantially identical provisions regarding
indemnification by a corporation of its officers, directors, employees and
agents, except Nevada provides broader indemnification in connection with
stockholder derivative lawsuits. Delaware and Nevada law differ in their
provisions for advancement of expenses incurred by an officer or director in
defending a civil or criminal action, suit or proceeding. The Delaware law
provides that expenses incurred by an officer or director in defending any
civil, criminal, administrative or investigative action, suit or proceeding may
be paid by the corporation in advance of the final disposition of the action,
suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined that he
or she is not entitled to be indemnified by the corporation. Thus, a Delaware
corporation has the discretion to decide whether or not to advance expenses.
Under the Nevada Law, the articles of incorporation, bylaws or an agreement made
by the corporation may provide that the corporation must pay advancements of
expenses in advance of the final disposition of the action, suit or proceedings
upon receipt of an undertaking by or on behalf of the director or officer to
repay the amount if it is ultimately determined that he or she is not entitled
to be indemnified by the corporation. Thus, a corporation may have no discretion
to decide whether or not to advance expenses. There will be no difference in
stockholders' rights with respect to this issue because the New Bylaws and the
Present Bylaws each provides for advancement of expenses.
Limitation on Personal Liability of Directors
---------------------------------------------
A Delaware corporation is permitted to adopt provisions in its certificate
of incorporation limiting or eliminating the liability of a director to a
company and its stockholders for monetary damages for breach of fiduciary duty
as a director, provided that such liability does not arise from certain
proscribed conduct, including breach of the duty of loyalty, acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law or liability to the corporation based on unlawful dividends or
distributions or improper personal benefit. The Company's certificate of
incorporation does not have a provision limiting the liability of directors to
the Company.
While the Nevada Law has a similar provision permitting the adoption of
provisions in the articles of incorporation limiting personal liability, the
Nevada provision differs in two respects. First, the Nevada provision applies to
both directors and officers. Second, while the Delaware provision excepts from
the limitation on liability the breach of the duty of loyalty, the Nevada
counterpart does not contain this exception. Thus, the Nevada provision
expressly permits a corporation to limit the liability of officers, as well as
directors, and permits limitation of liability arising from a breach of the duty
of loyalty, but does not limit liability of a director or officer for acts or
omissions which involve intentional misconduct, fraud or a knowing violation of
law, or the payment of distributions in violation of Nevada law. The New Charter
contains provisions limiting the liability to AMJC-Nevada of directors and
officers.
Dividends
---------
The Delaware Law is more restrictive than the Nevada Law with respect to
when dividends may be paid. Under the Delaware Law, subject to any restrictions
provided in the certificate of incorporation, a corporation may declare
dividends, out of surplus, or if no surplus exists, out of net profits for the
fiscal year in which the dividend is declared and/or the preceding fiscal year
(provided that the amount of capital of the corporation following the
declaration and payment of the dividend is not less than the aggregate amount of
the capital represented by the issued and outstanding stock of all classes
having a preference upon the distribution of assets).
The Nevada Law provides that except as otherwise provided in its articles
of incorporation, no distribution (including dividends on, or redemption or
repurchases of, shares of capital stock) may be made if, after giving effect to
12
such distribution, the corporation would not be able to pay its debts as they
become due in the usual course of business, or the corporation's total assets
would be less than the sum of its total liabilities plus the amount that would
be needed at the time of a liquidation to satisfy the preferential rights of
preferred stockholders.
Restrictions on Business Combinations
-------------------------------------
Both the Delaware Law and the Nevada Law contain provisions restricting the
ability of a corporation to engage in business combinations with an interested
stockholder. Under the Delaware Law, a corporation is not permitted to engage in
a business combination with any interested stockholder for a three-year period
following the date such stockholder became an interested stockholder, (i) unless
the transaction resulting in a person becoming an interested stockholder, or the
business combination, is approved by the board of directors of the corporation
before the person becomes an interested stockholder; (ii) upon consummation of
such transaction, the interested stockholder owned at least 85% of the
outstanding voting stock of the corporation outstanding at the time the
transaction commenced (excluding shares owned by persons who are both officers
and directors of the corporation, and shares held by certain employee stock
ownership plans); or (iv) at or after the date the person becomes an interested
stockholder, the business combination is approved by the corporation's board of
directors and by the holders of at least 66% of the corporation's outstanding
voting stock at an annual or special meeting and not by written consent,
excluding shares owned by the interested stockholder. The Delaware Law defines
"interested stockholder" generally as a person who owns 15% or more of the
outstanding shares of a corporation's voting stock. Delaware law allows
corporations to opt-out of the statute with provisions expressly electing not to
be governed by such statutory provisions.
The Nevada Law regulates business combinations more stringently. First, an
interested stockholder is defined as a beneficial owner of ten percent (10%) or
more of the voting power. Second, the three-year moratorium can be lifted only
by advance approval by a corporation's board of directors, as opposed to
Delaware's provision that allows interested stockholder combinations at the time
of the transaction with stockholder approval. Finally, after the three-year
period, combinations remain prohibited unless they are approved by the board of
directors, the disinterested stockholders or a majority of the outstanding
voting power not beneficially owned by the interested party, or the interested
stockholders satisfy certain fair value requirements. As in Delaware, a Nevada
corporation may opt-out of the statute with appropriate provisions in its
articles of incorporation. The Company's current charter does not contain such
provisions electing not to be governed by such statutory provisions. The New
Charter contains such provisions.
Amendment to Certificate/Articles of Incorporation
--------------------------------------------------
Both the Delaware Law and the Nevada Law require the approval of the
holders of a majority of all outstanding shares entitled to vote, with each
stockholder being entitled to one vote for each share so held, to approve
proposed amendments to a corporation's certificate/articles of incorporation.
Neither state requires stockholder approval for the board of directors of a
corporation to fix the voting powers, designations, preferences, limitations,
restrictions and rights of a class of stock provided that the corporation's
organizational documents grant such power to its board of directors. The holders
of the outstanding shares of a particular class are entitled to vote as a class
on a proposed amendment if the amendment would alter or change the power,
preferences or special rights of one or more series of any class so as to affect
them adversely. Unlike Delaware, under Nevada law, the number of authorized
shares of any such class of stock may be increased or decreased and the number
of shares outstanding may be correspondingly increased or decreased by a
resolution adopted by the board of directors without stockholders approval.
13
Actions by Written Consent of Stockholders
------------------------------------------
The Nevada Law and the Delaware Law each provide that, unless the charter
provides otherwise, any action required or permitted to be taken at a meeting of
the stockholders may be taken without a meeting if the holders of outstanding
stock having at least the minimum number of votes that would be necessary to
authorize or take such action at a meeting consents to the action in writing. In
addition, the Delaware Law requires the corporation to give prompt notice of the
taking of corporate action without a meeting by less than unanimous written
consent to those stockholders who did not consent in writing.
Stockholder Vote for Mergers and Other Corporate Reorganizations
----------------------------------------------------------------
In general, both jurisdictions require authorization by an absolute
majority of outstanding shares entitled to vote, as well as approval by the
board of directors, with respect to the terms of a merger or a sale of
substantially all of the assets of the corporation. Neither the Nevada Law nor
the Delaware Law requires stockholder approval by the stockholders of a
surviving corporation in a merger or consolidation as long as the surviving
corporation issues no more than 20% of its voting stock in the transaction.
Dissenters' Rights
------------------
In both jurisdictions, dissenting stockholders of a corporation engaged in
certain major corporate transactions are entitled to appraisal rights. Appraisal
rights permit a stockholder to receive cash equal to the fair market value of
the stockholder's shares (as determined by agreement of the parties or by a
court), in lieu of the consideration such stockholder would otherwise receive in
any such transaction.
Under the Delaware Law, appraisal rights are generally available for the
shares of any class or series of stock of a Delaware corporation in a merger or
consolidation, provided that no appraisal rights are available for the shares of
any class or series of stock which, at the record date for the meeting held to
approve such transaction, were either (1) listed on a national securities
exchange or designated as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc.
("NASD") or (2) held of record by more than 2,000 stockholders. Even if the
shares of any class or series of stock meet the requirements of clause (1) or
(2) above, appraisal rights are available for such class or series if the
holders thereof receive in the merger or consolidation anything except:
o shares of stock of the corporation surviving or resulting from such
merger or consolidation;
o shares of stock of any other corporation which at the effective date of
the merger or consolidation is either listed on a national securities
exchange, or designated as a national market system security on an
interdealer quotation system by the NASD or held of record by more than
2,000 stockholders; o cash in lieu of fractional shares; or
o any combination of the foregoing.
No appraisal rights are available to stockholders of the surviving corporation
if the merger did not require their approval.
Under the Nevada Law, a stockholder is entitled to dissent from, and obtain
payment for the fair value of his or her shares in the event of consummation of
a plan of merger or plan of exchange in which the corporation is a party and, to
the extent that the articles of incorporation, bylaws or a resolution of the
board of directors provides that voting or nonvoting stockholders are entitled
to dissent and obtain payment for their shares, any corporate action taken
pursuant to a vote of the stockholders. As with the Delaware Law, the Nevada
14
Law provides an exception to dissenters' rights. Holders of securities listed on
a national securities exchange or designated as a national market system
security on an interdealer quotation system by the NASD or held by more than
2,000 stockholders of record are generally not entitled to dissenters' rights.
Stockholder Inspection Rights
-----------------------------
The Delaware Law grants any stockholder of record the right to inspect and
to copy for any proper purpose the corporation's stock ledger, a list of its
stockholders, and its other records. A proper purpose is one reasonably related
to such person's interest as a stockholder. Directors also have the right to
examine the corporation's stock ledger, a list of its stockholders and its other
records for a purpose reasonably related to their positions as directors.
The Nevada Law provides the right to inspect the corporation's financial
records for only a stockholder of record who owns at least 15% of the
corporation's issued and outstanding shares, or has been authorized in writing
by the holder(s) of at least 15% of the issued and outstanding shares.
Derivative Suits
----------------
Under both the Delaware Law and the Nevada Law, a stockholder may bring a
derivative action on behalf of the corporation only if the stockholder was a
stockholder of the corporation at the time of the transaction in question or the
stockholder acquired the stock thereafter by operation of law.
Special Meetings of Stockholders
--------------------------------
The Delaware Law permits special meetings of stockholders to be called by
the board of directors or by any other person authorized in the certificate of
incorporation or bylaws to call a special stockholder meeting. The Nevada Law
does not address the manner in which special meetings of stockholders may be
called.
CERTAIN MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The following is a summary of certain material anticipated federal income
tax consequences of the Merger. This summary is based on the federal income tax
laws now in effect and as currently interpreted; it does not take into account
possible changes in such laws or interpretations, including amendments to
applicable statutes, regulations and proposed regulations or changes in judicial
or administrative rulings, some of which may have retroactive effect. In
addition, the summary discussion is intended to address only those federal
income tax consequences that are generally applicable to a stockholder who holds
shares of Common Stock as a capital asset. This summary is provided for general
information only and does not purport to address all aspects of the possible
federal income tax consequences of the Merger and IS NOT INTENDED AS TAX ADVICE
TO ANY PERSON. In particular, and without limiting the foregoing, this summary
does not consider the federal income tax consequences to stockholders of the
Company in light of their individual investment circumstances or to holders
subject to special treatment under the federal income tax laws (for example,
life insurance companies, regulated investment companies, foreign taxpayers,
persons who received their shares of Common Stock as compensation in connection
with the performance of services or on exercise of options received as
compensation in connection with the performance of services). This summary does
not address any consequence of the Merger under any state, local or foreign tax
laws.
No ruling from the Internal Revenue Service or opinion of counsel will be
obtained regarding the federal income tax consequences to the stockholders of
the Company as a result of the Merger. ACCORDINGLY, EACH STOCKHOLDER IS
ENCOURAGED TO CONSULT HIS OR HER TAX ADVISOR REGARDING THE SPECIFIC TAX
CONSEQUENCES OF THE PROPOSED TRANSACTION TO SUCH STOCKHOLDER, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS.
15
The Company believes that the Merger will be a tax-free reorganization of
the Company. If the Merger qualifies as a reorganization under Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), a stockholder of the
Company that does not exercise dissenters' rights and who exchanges his or her
shares of Common Stock solely for shares of AMJC-Nevada Common Stock would
recognize no gain or loss for federal income tax purposes. A stockholder's
aggregate tax basis in his or her shares of AMJC-Nevada Common Stock received as
a result of the Merger should be the same as his or her aggregate tax basis in
the shares of the Common Stock exchanged therefor. The stockholder's holding
period for the shares of AMJC-Nevada Common Stock will include the period during
which such stockholder held the shares of Common Stock surrendered in the
Merger.
THE TAX CONSEQUENCES OF THE MERGER TO ANY PARTICULAR STOCKHOLDER MAY DIFFER
DEPENDING UPON THAT STOCKHOLDER'S OWN CIRCUMSTANCES AND TAX POSITION.
FURTHERMORE, THIS SUMMARY DOES NOT DISCUSS ANY ASPECTS OF STATE, LOCAL, FOREIGN
OR OTHER TAX LAWS. EACH STOCKHOLDER IS URGED TO CONSULT WITH SUCH STOCKHOLDER'S
OWN TAX ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO SUCH STOCKHOLDER OF THE
MERGER.
REQUIRED VOTE
The Board of Directors believes that the approval of the Reincorporation
Proposal, including the Merger, the New Charter and the New By-laws, is in the
best interests of the stockholders of the Company. The approval of the
Reincorporation Proposal requires the affirmative vote of a majority of the
issued and outstanding shares of Common Stock and Series A Preferred Stock
entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE REINCORPORATION PROPOSAL.
16
PROPOSAL 3
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT AUDITORS
The firm of Feldman Sherb & Co., P.C. has served as the independent
auditors of the Company since 2000. The Board of Directors has appointed Feldman
Sherb & Co., P.C. to continue as the independent auditors of the Company for the
fiscal year ending December 31, 2002, subject to ratification by the Company's
stockholders. A representative of Feldman Sherb & Co., P.C. is expected to be
present at the Annual Meeting to respond to appropriate questions from
stockholders and to make a statement if such representative desires to do so.
AUDIT FEES
Audit fees billed to the Company by Feldman Sherb & Co., P.C. for its audit
of the Company's annual financial statements for the fiscal year ended December
31, 2000 and for its review of the financial statements included in the
Company's Quarterly Reports on Form 10-QSB filed with the Securities and
Exchange Commission for that fiscal year totaled approximately $43,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not engage Feldman Sherb & Co., P.C. to provide advice to
the Company regarding financial information systems design and implementation
during the fiscal year ended December 31, 2000.
ALL OTHER FEES
Fees billed to the Company by Feldman Sherb & Co., P.C. during the
Company's fiscal year ended December 31, 2000 for all other non-audit services
rendered to the Company, including tax related services, totaled approximately
$15,000.
In connection with the recently revised standards for independence of the
Company's independent public accountants promulgated by the Securities and
Exchange Commission, the board of directors of the Company has considered
whether the provision of such services is compatible with maintaining the
independence of Feldman Sherb & Co., P.C.
REQUIRED VOTE
The Board of Directors believes that the ratification of the appointment of
Feldman Sherb & Co., P.C. is in the best interests of the stockholders of the
Company. The approval of the selection of Feldman Sherb & Co., P.C. as the
Company's independent auditors for the fiscal year ending December 31, 2002
requires the affirmative vote of a majority of the shares of Common Stock and
Series A Preferred Stock present in person or represented by proxy at the
Meeting, provided a quorum exists.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF FELDMAN SHERB & CO., P.C. AS THE COMPANY'S INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2002.
17
MISCELLANEOUS
The SEC allows the Company to "incorporate by reference" the information
the Company files with them, which means that the Company can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this proxy statement,
and information that the Company files later with the SEC will automatically
update or supersede this information. The Company incorporates by reference the
documents listed below and any future filing the Company will make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
o Annual Report on Form 10-KSB for the year ended December 31, 2000;
o Quarterly Report on Form 10-QSB for the quarter ended September 30,
2001;
o Current Reports on Form 8-K during the years ended December 31, 1999
and 2000.
These reports are included with the proxy materials and distributed to the
securityholders of the Company. The Company will provide without charge to each
person being solicited by this Proxy Statement, on written request of any such
person, a copy of these filings. All such requests should be directed to George
Weisz at the Company, 131 West 35th Street, New York, New York 10001.
STOCKHOLDER PROPOSALS
Rule 14a-4 of the SEC proxy rules allows the Company to use discretionary
voting authority to vote on matters coming before an annual meeting of
stockholders if the Company does not have notice of the matter at least 45 days
before the date corresponding to the date on which the Company first mailed its
proxy materials for the prior year's annual meeting of stockholders or the date
specified by an overriding advance notice provision in the Company's By-Laws.
The Company's By-Laws do not contain such an advance notice provision. For the
Company's 2002 Annual Meeting of Stockholders, stockholders must submit such
written notice to the Secretary of the Company on or before November 6, 2002.
Stockholders of the Company wishing to include proposals in the proxy
material for the 2002 annual meeting of the stockholders must submit the same in
writing so as to be received by the Secretary of the Company on or before August
23, 2002. Such proposals must also meet the other requirements of the rules of
the SEC relating to stockholder proposals.
OTHER MATTERS
The Board of Directors does not intend to bring before the Meeting for
action any matters other than those specifically referred to above and is not
aware of any other matters which are proposed to be presented by others. If any
other matters or motions should properly come before the Meeting, the persons
named in the proxy intend to vote thereon in accordance with their judgment on
such matters or motions dealing with the conduct of the Meeting.
By Order of the Board of Directors
GEORGE WEISZ
Secretary
Dated: December 21, 2001
18
PROXY
This Proxy is Solicited
on Behalf of the Board of Directors
AMERICAN JEWELRY CORP.
131 WEST 35TH STREET
NEW YORK, NEW YORK 10001
The undersigned hereby appoints Isaac Nussen and George Weisz as Proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the shares of American Jewelry
Corp. held of record by the undersigned on December 14, 2001 at the Annual
Meeting of Stockholders to be held on January 22, 2002 or any adjournment
thereof.
1. Election of Directors.
|_| FOR ALL NOMINEES LISTED BELOW |_| WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for all nominees below
(INSTRUCTION: To withhold authority to vote
for any individual nominee strike a line
through the nominee's name in the list below)
Nominees: Isaac Nussen, George Weisz, Eric J. Rothschild, Meir Klepner
2. Approval of Amendment to Certificate of Incorporation to Increase Number of
Authorized Shares of Common Stock.
FOR |_| AGAINST |_| ABSTAIN |_|
3. Approval of the Reincorporation Proposal.
FOR |_| AGAINST |_| ABSTAIN |_|
4. Ratification of the appointment of Feldman Sherb & Co., P.C. as the
Company's independent auditors.
FOR |_| AGAINST |_| ABSTAIN |_|
The shares represented by this proxy will be voted in the manner directed. In
the absence of any direction, the shares will be voted FOR each nominee named in
Proposal 1 and FOR Proposals 2, 3 and 4 and in accordance with their discretion
on such other matters as may properly come before the meeting.
Dated , 200
---------------------- --
-----------------------------------
-----------------------------------
Signature(s)
(Signature(s) should conform to names as registered. For jointly owned shares,
each owner should sign. When signing as attorney, executor, administrator,
trustee, guardian or officer of a corporation, please give full title of a
partnership, please sign in partnership name by authorized person.)
19