SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
Online Gaming Systems Ltd.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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 paid previously 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:
ONLINE GAMING SYSTEMS, LTD.
3225 MacLeod Drive, 1st Floor
Las Vegas, Nevada 89121
November 12, 2001
NOTICE OF ANNUAL SHAREHOLDERS' MEETING
NOTICE IS HEREBY GIVEN THAT the annual meeting of shareholders of Online
Gaming Systems, Ltd. (the "Corporation"), shall be held on December 20, 2001, at
10:00 a.m., Pacific time, in the offices of the Corporation, in the City of Las
Vegas, Nevada.
The shareholders will deliberate and take action on the following matters:
1. TO ELECT DIRECTORS TO SERVE FOR THE ENSUING YEAR OR UNTIL THEIR
RESPECTIVE SUCCESSORS ARE DULY ELECTED AND QUALIFIED. THE NOMINEES
ARE GARY RAMOS, GAVIN CHAMBERLAIN, LAWRENCE P. TOMBARI, MARCEL
GOLDING and JOHN COPELYN.
2. TO RATIFY THE APPOINTMENT OF MOORE STEPHENS, P.C., AS INDEPENDENT
ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31,
2001.
3. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
The foregoing items of business are more fully described in the Proxy Statement
that accompanies this Notice.
The board of directors has fixed the close of business on November 9, 2001
as the shareholder of record date. Only those shareholders, which were
shareholders of record at the close of business on November 9, 2001, will be
entitled to vote in person or by proxy at the meeting or any adjournment
thereof.
All stockholders are cordially invited and encouraged to attend the Annual
Meeting. In any event, to ensure your representation at the Annual Meeting,
please carefully read the accompanying Proxy Statement which describes the
matters to be voted on at the meeting and sign, date, and return the enclosed
proxy card in the reply envelope provided. Should you receive more than one
proxy because your shares are registered in different names and addresses, each
proxy should be returned to assure that all of your shares will be voted. If you
attend the Annual Meeting and vote by ballot, your proxy will be revoked
automatically and only your vote at the Annual Meeting will be counted. The
prompt return of your proxy card will assist us in preparing for the Annual
Meeting.
We look forward to seeing you at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS of Online
Gaming Systems, Ltd.
/s/ Gary Ramos
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Gary Ramos
President, Chief Executive Officer
Dated: November 12, 2001
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. IN ANY EVENT, TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING YOU
ARE URGED TO VOTE, SIGN, AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
IN THE POSTAGE-PREPAID ENVELOPE ENCLOSED FOR THAT PURPOSE.
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ONLINE GAMING SYSTEMS, LTD.
3225 MacLeod Drive, 1st Floor
Las Vegas, Nevada 89121
November 12, 2001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of Online Gaming Systems, Ltd. (the "Company" or "AIE")
which will be held on December 20, 2001 at 10:00 a.m., Pacific standard time, in
the offices of the Corporation.
At the Annual Meeting, you will be asked to consider and vote upon the
following proposals: (i) to elect five (5) directors of the Company; and (ii) to
ratify the appointment of Moore Stephens, P.C., as independent accountants of
the Company for the fiscal year ending December 31, 2001.
The enclosed Proxy Statement more fully describes the details of the
business to be conducted at the Annual Meeting. After careful consideration, the
Company's Board of Directors has unanimously approved the proposals and
recommends that you vote FOR each such proposal.
After reading the Proxy Statement, please mark, date, sign, and return
the enclosed proxy card in the accompanying reply envelope as promptly as
possible but no later than December 15, 2001. If you decide to attend the Annual
Meeting and would prefer to vote in person, please notify the Secretary of the
Company that you wish to vote in person and your proxy will not be voted. YOUR
SHARES CANNOT BE VOTED UNLESS YOU SIGN, DATE, AND RETURN THE ENCLOSED PROXY OR
ATTEND THE ANNUAL MEETING IN PERSON.
A copy of the Company's 2000 10KSB Annual Report will be made available
to all stockholders entitled to vote at the Annual Meeting, or will be mailed
upon request or is available at www.sec.gov.
We look forward to seeing you at the Annual Meeting.
Sincerely yours,
/s/ Gary Ramos
--------------------------------------
Gary Ramos
President and Chief Executive Officer
Las Vegas, Nevada
November 12, 2001
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IMPORTANT
PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE SO THAT IF YOU ARE
UNABLE TO ATTEND THE ANNUAL MEETING, YOUR SHARES MAY BE VOTED.
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PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS OF
ONLINE GAMING SYSTEMS, LTD.
TO BE HELD December 20, 2001
GENERAL
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Online Gaming Systems, Ltd., a Delaware Corporation
(the "Company" or "OGS"), of proxies to be voted at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on December 20, 2001, or at any
adjournment or postponement thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. Stockholders of record on
November 9, 2001 will be entitled to vote at the Annual Meeting. The Annual
Meeting will be held at 10:00 a.m., Pacific standard time, at the Corporation's
offices, in the City of Las Vegas, Nevada.
It is anticipated that this Proxy Statement and the enclosed proxy card
will be first mailed to stockholders on or about February 12, 2001.
VOTING RIGHTS
The close of business on November 9, 2001 was the record date for
stockholders entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof. At the record date, the Company had approximately
34,296,268 shares of its Common Stock outstanding and entitled to vote at the
Annual Meeting, held by approximately 759 stockholders. Holders of Common Stock
are entitled to one vote for each share of Common Stock so held. In the election
of Directors, however, cumulative voting is authorized for all stockholders if
any stockholder gives notice at the meeting, prior to voting for the election of
Directors, of his or her intention to cumulate votes. Under cumulative voting, a
stockholder may cumulate votes and give to one nominee a number of votes equal
to the number of Directors to be elected (five at this meeting) multiplied by
the number of votes to which such stockholder is entitled, or may distribute
such number among any or all of the nominees. The five candidates receiving the
highest number of votes will be elected. The Board of Directors is soliciting
discretionary authority to vote proxies cumulatively. A majority of the shares
of Common Stock entitled to vote will constitute a quorum for the transaction of
business at the Annual Meeting.
If any stockholder is unable to attend the Annual Meeting, such
stockholder may vote by proxy. The enclosed proxy is solicited by the Company's
Board of Directors, (the "Board of Directors" or the "Board") and, when the
proxy card is returned properly completed, it will be voted as directed by the
stockholder on the proxy card. Stockholders are urged to specify their choices
on the enclosed proxy card. If a proxy card is signed and returned without
choices specified, in the absence of contrary instructions, the shares of Common
Stock represented by such proxy will be voted FOR all of the Proposals and will
be voted in the proxy holders' discretion as to other matters that may properly
come before the Annual Meeting.
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An affirmative vote of a plurality of the shares present or represented
at the meeting and entitled to vote is required for the election of directors.
An affirmative vote of a majority of the shares present or represented at the
meeting and entitled to vote is required for the ratification of appointment of
Moore Stephens, P. C. as independent accountants of the Company. An automated
system administered by the Company's transfer agent tabulates stockholder votes.
Abstentions and broker non-votes each are included in determining the presence
or absence of a quorum, and each is tabulated separately. Abstentions are
counted as negative votes, whereas broker non-votes are not counted for purposes
of determining whether the Proposals presented to stockholders have been
approved.
REVOCABILITY OF PROXIES
Any person giving a proxy has the power to revoke it at any time
before its exercise. A proxy may be revoked by filing with the Secretary of the
Company an instrument of revocation or a duly executed proxy bearing a later
date, or by attending the Annual Meeting and voting in person.
SOLICITATION OF PROXIES
The Company will bear the cost of soliciting proxies. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
to forward to such beneficial owners. The Company may reimburse such persons for
their costs of forwarding the solicitation material to such beneficial owners.
The original solicitation of proxies by mail may be supplemented by solicitation
by telephone, telegram, or other means by directors, officers, employees or
agents of the Company. No additional compensation will be paid to these
individuals for any such services. Except as described above, the Company does
not intend to solicit proxies other than by mail.
THE FORM 10KSB ANNUAL REPORT OF THE COMPANY FOR THE YEAR ENDED DECEMBER
31, 2000, WILL BE MADE AVAILABLE TO ALL STOCKHOLDERS ENTITLED TO VOTE AN THE
ANNUAL MEETING, OR WILL BE MAILED UPON REQUEST. THE ANNUAL REPORT IS NOT
INCORPORATED INTO THIS PROXY STATEMENT AND IS NOT CONSIDERED PROXY SOLICITING
MATERIAL.
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PROPOSAL NO. 1:
ELECTION OF DIRECTORS
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At the Annual Meeting, five directors (constituting the entire board)
are to be elected to serve until the next Annual Meeting of Stockholders and
until a successor for such director is elected and qualified, or until the
death, resignation, or removal of such director. It is intended that the proxies
will be voted for the five nominees named below for election to the Company's
Board of Directors unless authority to vote for any such nominee is withheld.
There are five nominees, two of whom is currently a director of the Company.
Each person nominated for election has agreed to serve if elected, and the Board
of Directors has no reason to believe that any nominee will be unavailable or
will decline to serve. In the event, however, that any nominee is unable or
declines to serve as a director at the time of the Annual Meeting, the proxies
will be voted for any nominee who is designated by the current Board of
directors to fill the vacancy. Unless otherwise instructed, the proxy holders
will vote the proxies received by them FOR the nominees named below. The five
candidates receiving the highest number of the affirmative votes of the shares
entitled to vote at the Annual Meeting will be elected directors of the Company.
The proxies solicited by this Proxy Statement may not be voted for more than
five nominees.
NOMINEES
Set forth below is information regarding the nominees to the Board of Directors.
NAME/DIRECTOR POSITION WITH
FIRST ELECTED THE COMPANY AGE
- ------------- ----------- ---
Gary Ramos President, CEO 54
John Copelyn Chairman of the Board 53
July of 1999
Gavin Chamberlain Director 46
Marcel Golding Director 40
August of 1998
Lawrence P. Tombari Chief Financial Officer 43
BUSINESS EXPERIENCE OF NOMINEES FOR ELECTION AS DIRECTORS
GARY RAMOS is currently President and Chief Executive Officer of the Company. He
assumed these positions in July of 2000. In these capacities, Mr. Ramos is
responsible for the strategic, operational and marketing functions of the
Company.
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Mr. Ramos has a long history of growing new businesses. In 1976, Mr. Ramos
founded and served as Chief Executive Officer and President of Advanced
Manufacturing & Development (AM&D), which founded and operated several
businesses in the high technology manufacturing, interactive and video gaming
and related industries. Twice, AM&D was listed in INC Magazine's 500 fastest
growing private companies in the U.S., growing to a revenue base in excess of
$50 million and more than 600 employees. AM&D was sold to a large utilities
company in 1996.
JOHN COPELYN is currently the Chief Executive Officer of the South African
Clothing and Textile Workers Union Investment Group and the Chief Executive
Officer of Hosken Consolidated Investments, Ltd., a company traded on the
Johannesburg Stock Exchange. During 1992-1994, Mr. Copelyn was Chief Executive
Officer of Zenzeleni Clothing. From 1994-1997, Mr. Copelyn served as an elected
member of the democratically elected South African parliament. In addition, he
has held numerous positions with South African trade unions including serving on
the Central Committee of COSATU. Mr. Copelyn is also a licensed attorney in
South Africa. Mr. Copelyn also serves as director for other gaming and
non-gaming companies. He attended both the University of Witwatersrand and
University of South Africa.
GAVIN CHAMBERLAIN is Managing Director of Global Payment Technologies Holdings
(Pty) Ltd., the South African affiliate of Global Payment Technologies, Inc., a
leading manufacturer and innovator of currency acceptance systems used in the
worldwide gaming, beverage, and vending industries. Recently, GPTHL agreed to
merge its operations with Vukani Gaming Corporation, a wholly owned subsidiary
of Hosken Consolidated Investments Ltd., the Company's majority stockholder.
Vukani is a South African based company established in 1996 to operate in the
South African route market. The South African government has approved
legislation that allows for deployment of up to 50,000 gaming machines in the
nine provinces of the country. The market includes site operators outside of the
existing casino market including liquor-licensed establishments such as bars,
taverns, restaurants and sports clubs. Mr. Chamberlain is on the Board of Vukani
and also Managing Director of another South African affiliate of GPTHL,
International Payment Systems, Ptd. Ltd.
MARCEL GOLDING was appointed a Director of the Company in August of 1998. Mr.
Golding is Chairman of Hosken Consolidated Investments (HCI) and Softline
Holdings, as well as being a Director of JCI and Global Capital, which are all
listed companies on the Johannesburg Stock Exchange. In addition, he was the
founding chairman of the Mineworkers Investment Company (linked to the National
Union of Mineworkers), one of the two pioneering trade union investment
companies in South Africa. He was elected the first Deputy General Secretary of
the union in 1987 at the age of 26, and was re-elected on three additional
occasions to this post of the Country's largest trade union. From 1994 to 1997
he served as a Member of Parliament, where he chaired the Minerals and Energy
Committee and the Audited Commission, the oversight committee of the office of
the Auditor-General. Mr. Golding holds a post graduate degree from the
University of Cape Town.
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LAWRENCE P. TOMBARI is Chief Financial Officer of the Company. Previously, he
was Chief Financial Officer and Senior Vice President of Lady Luck Gaming
Corporation, from its inception in 1993 until the Company was acquired in 2000.
As CFO, Mr. Tombari was responsible for all of the accounting, budgeting,
reporting and investor communications for the NASDAQ Company. Additionally, as
Senior Vice President of Development, he was responsible for identification and
analysis for new gaming projects, acquisitions and disposals, and presentations
to regulatory bodies. Lady Luck generated revenue of more than $200 million
annually, and had more than 2,500 employees.
Prior to Lady Luck, Mr. Tombari spent eight years at Ernst & Young, in the
Consulting Division. His most recent position was West Region Director of Real
Estate Valuation and Consulting Services, where he was recognized as one of the
firm's leading experts in the leisure and hospitality sector. He also worked for
the previous two years at Arthur D. Little, Inc. as a consultant. Mr. Tombari
has a Bachelor of Science of Business Administration from the University of
Southern California, and an MBA from Arizona State University.
BOARD MEETINGS AND COMMITTEES
The Board held four (4) meetings during the year ended December
31,2000. In addition, from time to time during such year, the members of the
Board acted by unanimous written consent. Each member of the Board of Directors,
who served during all of fiscal 2000, attended or participated in more than
seventy-five (75%) or more of the aggregate of (i) the total number of meetings
of the Board of Directors held during the fiscal year and (ii) the total number
of meetings held by all committees on which such director served during the past
fiscal year. There are no family relationships among executive officers or
directors of the Company. The Board of Directors has an Audit Committee and a
Compensation Committee. The entire Board of Directors performs the typical
functions of such committees. There is no nominating committee or any other
board committees.
The Audit Committee of the Board of Directors held one (1) meeting
during fiscal 2000. The Audit Committee, which was comprised of Peter Lawson and
Trevor Klein recommends engagement of the Company's independent accountants,
approves services performed by such accountants and reviews and evaluates the
Company's accounting system and its system of internal controls.
The Compensation Committee of the Board of Directors held one (1)
meeting during fiscal 2000 and approved grants of options by written consent on
a monthly basis. The Compensation Committee, which was comprised of
Marcel Golding and Martin McCarthy, has overall responsibility for the Company's
compensation policies and determines the compensation payable to the Company's
executive officers, including their participation in certain of the Company's
employee benefit and stock option plans.
DIRECTOR COMPENSATION
The Company does compensate directors and executive officers of the
Company for service on the Board of Directors. Directors and executive officers
receive $1,500 per meeting and are reimbursed for their expenses incurred in
attending meeting of the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF ALL OF THE ABOVE NOMINEES.
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PROPOSAL NO. 2:
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
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The Company is asking the stockholders to ratify the selection of Moore
Stephens, P.C. as the Company's independent public accountants for the fiscal
year ending December 31, 2001. The affirmative vote of the holders of a majority
of the shares represented and voting at the Annual Meeting will be required to
ratify the selection of Moore Stephens, P.C.
In the event the stockholders fail to ratify the appointment, the Audit
Committee of the Board of Directors will consider it as a direction to select
other auditors for the subsequent year. Even if the selection is ratified, the
Board of Directors in its discretion may direct the appointment of a different
independent accounting firm at any time during the year if the Board of
Directors determines that such a change would be in the best interest of the
Company and its stockholders.
Moore Stephens, P.C. has audited the Company's financial statements for
the year ended December 31, 2000. Its representatives are expected to be present
at the Annual Meeting and will have the opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions.
Fees Billed to Online Gaming Systems by Moore Stephens During Fiscal Year 2000
Audit fees billed to Online Gaming Systems during the 2000 fiscal year
were $28,000.
Online Gaming Systems did not engage Moore Stephens to provide advice
to the Company regarding financial information systems design and implementation
during the fiscal year ended December 31, 2000.
Fees billed to Online Gaming Systems for all other non-audit services
rendered by Moore Stephens during the 2000 fiscal year were $450.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY THE SELECTION OF MOORE STEPHENS, P.C., TO SERVE AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31,
2001.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 30, 2001 (except where
indicated by asterisk), information regarding the beneficial ownership of our
common stock by each person we know to own five percent or more of the
outstanding shares, by each of the directors and officers, and by the directors
and officers as a group. As of September 30, 2001, there were outstanding
34,296,268 shares of our common stock.
Beneficial ownership has been determined in accordance with Rule 13d-3
of the Securities Exchange Act of 1934. Generally, a person is deemed
9
to be the beneficial owner of a security if he has the right to acquire
voting or investment power within 60 days.
o Unless otherwise indicated, all addresses are at our office at
3225 MacLeod Drive, 1st Floor
Las Vegas, Nevada 89121
Name and Address of Beneficial Owner Amount of Beneficial Ownership Percent of Class
- ------------------------------------ ------------------------------ ----------------
Ahead Investments, Ltd. 18,698,120 54.52%
150 St. George's Street
Rhodes Blgd-5th Floor
Cape Town 8001 South Africa
Ravensdale Limited 3,131,737 9.13%
28-30 The Parade
St. Hlier JE4 8XY Jersey
Gary Ramos 83,333 .24%
C/o Online Gaming Systems, Ltd.
3225 McLeod, 1st Floor
Las Vegas, Nevada 89121
Lawrence P. Tombari 208,333 .61%
C/o Online Gaming Systems, Ltd.
3225 McLeod, 1st Floor
Las Vegas, Nevada 89121
All Officers and Directors as a Group 22,121,523 64.5%
Ahead Investments is a wholly owned subsidiary of HCI. Both Mr. Copelyn and Mr.
Golding are substantial owners and officers of HCI. Mr. Copelyn is a substantial
owner and officer of Ravensdale Limited.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent (10%) of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten percent
(10%) stockholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
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Based upon (i) the copies of Section 16(a) reports which the Company
received from such persons for their 1998 fiscal year transactions in the Common
Stock and their Common Stock holdings, and (ii) the written representations
received from one or more of such persons that no annual Form 5 reports were
required to be filed by them for the 1998 fiscal year, the Company believes that
all executive officers and Board members complied with all their reporting
requirements under Section 16(a) for such fiscal year.
FORM 10-KSB
THE COMPANY FILED AN ANNUAL REPORT ON FORM 10-KSB WITH THE SECURITIES
AND EXCHANGE COMMISSION ON OR ABOUT MAY 16, 2001. STOCKHOLDERS MAY OBTAIN A COPY
OF THIS REPORT, WITHOUT CHARGE, BY WRITING TO ONLINE GAMING SYSTEMS, LTD., ATTN:
CHIEF FINANCIAL OFFICER, AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES LOCATED AT
3225 McLeod Drive, 1st Floor, Las Vegas, Nevada 89121.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION (1)
The following table provides certain summary information concerning the
compensation earned, by the Company's Chief Executive Officer and its Chairman
for services rendered in all capacities to the Company and its subsidiaries for
each of the last three fiscal years. Such individuals will be hereafter referred
to as the Named Executive Officers. No other executive officer who would have
otherwise been includible in such table on the basis of salary and bonus earned
for the 2001 fiscal year has resigned or terminated employment during that
fiscal year.
SUMMARY COMPENSATION TABLE
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS
--------------------------- ---- ------ -----
Gary Ramos 2001 $250,000 --
President and Chief Executive Officer 2000 93,000 --
Richard A. Iamunno 2000 $181,000 --
Formerly President and Chief Executive Officer 1999 144,000 --
Lawrence P. Tombari 2001 $150,000 --
Chief Financial Officer
Peter Lawson 2001 $123,333 --
Formerly Chief Financial Officer 2000 150,000 (AUD) --
Steven Campell 2001 $125,000 --
Secretary 2000 112,000 --
(1) The columns for "Other Annual Compensation" and "Long-term Compensation"
have been omitted, as there is no compensation required to be reported in such
columns. The aggregate amount of perquisites and other personal benefits did not
exceed the lesser of $50,000 or 10% of the total of salary and bonus.
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STOCK OPTIONS
On January 1, 1997, the Company adopted an Incentive Stock Option Plan
for Employees, Directors, Consultants, and Advisors (the "Plan"). The Plan will
expire December 31, 2006 unless further extended by appropriate action of the
Board of Directors. Employees, directors, consultants and advisors of the
Company, or any of its subsidiary corporations, are eligible for participation
in the Plan. The Plan provides for stock to issued pursuant to options granted
and shall be limited to 250,000 shares of Common Stock, $.001 par value. The
shares have been reserved for issuance in accordance with the terms of the Plan.
The exercise of these options may be for all or any portion of the option and
any portion not exercised will remain with the holder until the expiration of
the option period. The options granted in 1998 expire on December 23, 2003.
The following table contains information concerning the stock option
grants made to each of the named executive officers and employees for fiscal
1999. There were no options granted during 2000.
INDIVIDUAL GRANTS
Name # Granted In F/Y $/Sh Exp. Date
- ---- --------- ------ ---- ---------
Richard A. Iamunno 50,000 1999 $2.50 12/23/02
Peter Lawson 125,000 1999 $2.50 06/30/07
50,000 1999 2.50 07/13/04
The Company applies Accounting Principles Board Option No. 25,
Accounting for Stock Issued to Employees, and related interpretations, for stock
options issued to employees in accounting for its stock option plans. The
exercise price of all options issued was the market price at the date of grant.
Accordingly, no compensation expense has been recognized for the Company's
stock-based compensation plans.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
establishing the base salary and incentive cash bonus programs for the Company's
executive officers and other key employees and administering certain other
compensation programs for such individuals, subject in each instance to review
by the full Board. The Compensation Committee also has the exclusive
responsibility for the administration of the Company's 1997 Stock Option Plan
under which grants may be made to executive officers and other key employees.
The Compensation Committee is comprised of three members of the Board of
Directors.
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GENERAL COMPENSATION POLICY
The overall policy of the Compensation Committee is to provide the
Company's executive officers and other key employees with competitive
compensation opportunities based upon their contribution to the financial
success of the Company and their personal performance. It is the Compensation
Committee's objective to have a substantial portion of each officer's
compensation contingent upon the Company's performance as well as upon the
officer's own level of performance. Accordingly, the compensation package for
each executive officer and key employee is comprised of three elements: (i) base
salary which reflects individual performance and is designed primarily to be
competitive with salary levels in effect at companies within and outside the
industry with which the Company competes for executive talent, (ii) annual
variable performance awards payable in cash and tied to the Company's
achievement of financial and individual performance targets, and (iii)
stock-based incentive awards which strengthen the mutuality of interests between
the executive officers and the Company's stockholders.
LONG-TERM INCENTIVE AND PENSION PLANS
The Company does not have any long-term incentive or defined benefit
pension plans.
OTHER
No Director or Executive Officer is involved in any material legal
proceeding in which he is a party adverse to the Company or has a material
interest adverse to the Company.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL AGREEMENTS
The Company currently has an employment agreement with Mr.Tombari
pursuant to which he will serve as the Company's Chief Financial Officer for
three years, expiring on Junaury 16, 2004. The first year base salary is
$150,000 and Mr. Tombari is granted rights to purchase company stock and receive
options at a price based on formula. The employment agreement contains
arrangements for severance compensation of up to 1.5 times the annual base
salary plus benefits upon termination without cause.
The Company intends on entering into an employment agreement with Mr.
Ramos, to continue to serve as the Company's President and Chief Executive
Officer. The initial base salary is $250,000 and Mr. Ramos will be granted
rights to purchase company stock and receive options based on formula.
Other than the aforementioned agreements, the Company has not entered
into any other employment agreement with any of its officers, directors, or any
other person and no such agreements are anticipated in the immediate future.
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COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly-held companies for compensation paid to
certain executive officers, to the extent that compensation exceeds $1 million
per officer in any year. The compensation paid to the Company's executive
officers for the 1998 fiscal year did not exceed the $1 million limit per
officer, and it is not expected the compensation to be paid to the Company's
executive officers for the 1999 fiscal year will exceed that limit. Because it
is very unlikely that the cash compensation payable to any of the Company's
executive officers in the foreseeable future will approach the $1 million limit,
the Compensation Committee has decided at this time not to take any other action
to limit or restructure the elements of cash compensation payable to the
Company's executive officers. The Compensation Committee will reconsider this
decision should the individual compensation of any executive officer ever
approach the $1 million level.
CERTAIN TRANSACTIONS
Directors, including a majority of the independent and disinterested
outside directors on the Board of Directors, and be on terms no less favorable
to the Company than could be obtained from unaffiliated third parties.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented
for consideration at the Annual Meeting. If other matters are properly brought
before the Annual Meeting, however, it is the intention of the persons named in
the accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
The enclosed proxy gives the Proxy Committee discretionary authority to
vote your shares in accordance with its best judgment with respect to all
additional matters which might come before the annual meeting. In addition to
the scheduled items of business, the meeting may consider stockholder proposals
omitted from the Proxy Statement and form of proxy pursuant to the Proxy Rules
of the Securities and Exchange Commission and matters related to the conduct of
the meeting. At the time this Proxy Statement went to press, the Board of
Directors was not aware of any such matter, which would be presented for action
at the meeting.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's Annual Meeting of stockholders to be held in 2001 must be received by
on or before December 10,2001 in order to be included in the proxy statement and
proxy relating to that meeting.
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BY ORDER OF THE BOARD OF DIRECTORS
of Online Gaming Systems, Ltd.
/s/ Gary Ramos
-----------------------------------------
Gary Ramos
President and Chief Executive Officer
November 12, 2001
IMPORTANT
IF YOU ARE GOING TO VOTE BY MAIL, WE ENCOURAGE YOU TO SPECIFY YOUR
CHOICES BY MARKING THE APPROPRIATE BOXES ON THE ENCLOSED PROXY CARD. HOWEVER,
YOU DO NOT NEED TO MARK ANY BOXES IF YOU WISH TO VOTE ACCORDING TO THE BOARD OF
DIRECTORS' RECOMMENDATIONS; JUST SIGN, DATE AND RETURN THE PROXY IN THE ENCLOSED
ENVELOPE. IF YOU ARE GOING TO VOTE YOUR PROXY BY TELEPHONE OR THE INTERNET,
SIMPLY FOLLOW THE INSTRUCTIONS ON THE ENCLOSED FORM. THANK YOU FOR YOUR
COOPERATION AND YOUR PROMPT RESPONSE.
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APPENDIX A
ONLINE GAMING SYSTEMS, LTD
ANNUAL MEETING OF SHAREHOLDERS
December 20, 2001
The undersigned shareholder(s) hereby appoints Gary Ramos, President of the
Corporation, or in lieu of the foregoing, Martin V. McCarthy, Director of the
Corporation, and each of them, each with the power of substitution, authorized
to represent and to vote the stock of the undersigned at the Annual Meeting of
its stockholders to be held on December 20, 2001 and any adjournments thereof.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
MARK THIS BOX IF AN ADDRESS CHANGE OR COMMENT HAS BEEN NOTED ON THE REVERSE SIDE
OF THIS CARD. [ ]
RECORD DATE SHARES:
THE BOARD OF DIRECTORS RECOMMENDS VOTE FOR THE PROPOSALS.
1. Election of Directors: Gary Ramos, Marcel Golding, Gavin Chamberlain,
Lawrence P. Tombari and John Copelyn
FOR [ ] WITHHOLD [ ] FOR EXCEPT [ ]
To withhold authority to vote for any individual nominee while voting for the
remainder, write this nominees name in the space following:
- --------------------------------------------------------------------------------
2. Appointment of Moore Stephens, P.C., as independent accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
- --------------------------------------------------------------------------------
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CONTINUED AND TO BE SIGNED ON REVERSE
4. VOTED on such matters as may properly come before the Meeting of any
adjournment thereof.
THE PROXIES WILL VOTE YOUR SHARES IN ACCORDANCE WITH YOUR DIRECTIONS ON THIS
CARD. IF YOU DO NOT INDICATE YOUR CHOICES ON THIS CARD, THE PROXIES WILL VOTE
YOUR SHARES FOR THE PROPOSALS ON THE REVERSE SIDE.
PLEASE VOTE, DATE, AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
NOTE: Please sign as name appears.
Joint owners should each sign.
Dated: , 2001
-----------------------------------
Signature of Shareholder
----------------------------------
Co-owners sign here
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH. IF
SIGNER IS A CORPORATION, PLEASE
SIGN WITH THE FULL CORPORATION NAME
BY DULY AUTHORIZED OFFICER OR
OFFICERS.
17