UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e) (210)
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
RG GLOBAL LIFESTYLES, INC.
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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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
RG GLOBAL LIFESTYLES, INC.
30021 Tomas
Rancho Santa Margarita, CA 92688
(949) 888-9500 - telephone
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 14, 2007
TO OUR SHAREHOLDERS:
You are invited to attend the Annual Meeting of shareholders (the "Meeting") of
RG Global Lifestyles, Inc. (together with its subsidiaries, "Company", "RGBL",
"we", "us" or "our"), a Nevada corporation, which will be held on Friday,
September 14, 2007, at 10:00 A.M. at the Irvine Marriott, 18000 Von Karman Ave,
Irvine, CA 92612 for the following purposes:
1. To elect five (5) directors to hold office for a one year term and until each
of their successors are elected and qualified.
2. To ratify the appointment of McKennon Wilson & Morgan LLP as independent
auditor.
3. The authorization of the Company's 2007 Incentive and Nonstatutory Stock
Option Plan.
4. To amend the Company's Articles of Incorporation to change (shorten) the
Company's name to RG Global.
5. To act upon other business as may properly come before the meeting.
The Board of Directors has fixed the close of business on July 27, 2007 as the
record date for the determination of shareholders entitled to receive notice of
and to vote at the Annual Meeting of Shareholders and any adjournment or
postponement thereof. A list of those entitled to vote will be available for
inspection for ten days prior to the meeting at our offices.
By Order of the Board of Directors
Grant King
CEO
July 27, 2007
Rancho Santa Margarita, California
IMPORTANT
Whether or not you expect to attend the Annual Meeting in person, to assure that
your shares will be represented, please complete, date, sign and return the
enclosed proxy without delay in the enclosed envelope, which requires no
additional postage if mailed in the United States. Your proxy will not be used
if you are present at the Annual Meeting and desire to vote your shares
personally.
RG GLOBAL LIFESTYLES, INC.
30021 Tomas
Rancho Santa Margarita, CA 92668
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 14, 2007
GENERAL
An annual report, filed on form 10-KSB, for the fiscal year ended March 31, 2007
is enclosed with this Proxy Statement.
SOLICITATION OF PROXIES
This Proxy Statement is being furnished to the shareholders of RGBL in
connection with the solicitation of proxies by our Board of Directors for use at
the Annual Meeting of Shareholders to be held at the Irvine Marriott, 18000 Von
Karman Ave, Irvine, CA 92612 on September 14, 2007 and at any and all
adjournments thereof (the "Annual Meeting") for the purposes set forth in the
accompanying Notice of Annual Meeting of Shareholders. Accompanying this Proxy
Statement is the Board of Directors' Proxy for the Annual Meeting, which you may
use to indicate your vote as to the proposals described in this Proxy Statement.
The Company shall mail this Proxy Statement to its shareholders approximately on
August 15, 2006.
The cost of soliciting proxies will be borne by the Company. The Company will
solicit shareholders by mail through its regular employees and will request
banks and brokers and other custodians, nominees and fiduciaries, to solicit
their customers who have stock of the Company registered in the names of such
persons and will reimburse them for reasonable, out-of-pocket costs. In
addition, the Company may use the service of its officers and directors to
solicit proxies, personally or by telephone, without additional compensation.
VOTING SECURITIES
Only shareholders of record as of the close of business on July 27, 2007 (the
"Record Date") will be entitled to vote at the meeting and any adjournment
thereof. As of the Record Date, there were approximately 26,897,592 shares of
common stock of the Company, issued and outstanding and entitled to vote.
Shareholders may vote in person or by proxy. Each holder of shares of common
stock is entitled to one (1) vote for each share of stock held on the proposals
presented in this Proxy Statement. The Company's bylaws provide that a majority
of all the shares of stock entitled to vote, whether present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at the meeting. The enclosed proxy card reflects the number of shares that you
are entitled to vote. Shares of common stock may not be voted cumulatively.
VOTING OF PROXIES
All valid proxies received prior to the meeting will be voted. The Board of
Directors recommends that you vote by proxy even if you plan to attend the
Annual Meeting. To vote by proxy, you must fill out the enclosed proxy card,
sign and date it, and return it in the enclosed postage-paid envelope. Voting by
proxy will not limit your right to vote at the Annual Meeting if you attend the
Annual Meeting and vote in person. However, if your shares are held in the name
of a bank, broker or other holder of record, you must obtain a proxy executed in
your favor, from the holder of record to be able to vote at the Annual Meeting.
REVOCABILITY OF PROXIES
All Proxies which are properly completed, signed and returned prior to the
Annual Meeting, and which have not been revoked, will be voted in favor of the
proposals described in this Proxy Statement unless otherwise directed. A
shareholder may revoke his or her Proxy at any time before it is voted either by
filing with the Secretary of the Company, at its principal executive offices, a
written notice of revocation or a duly-executed proxy bearing a later date or by
attending the Annual Meeting and voting in person.
REQUIRED VOTE
Representation at the meeting of the holders of a majority of the outstanding
shares of our common stock entitled to vote, either in person or by properly
executed proxy, is required to constitute a quorum. Abstentions and broker
non-votes, which are indications by a broker that it does not have discretionary
authority to vote on a particular matter, will be counted as "represented" for
the purpose of determining the presence or absence of a quorum. Under the
California Corporations Code, once a quorum is established, shareholder approval
with respect to a particular proposal is generally obtained when the votes cast
in favor of the proposal exceed the votes cast against such proposal.
In the election of our Board of Directors, shareholders are not allowed to
cumulate their votes. Shareholders are entitled to cast a vote for each of the
openings on the board to be filled at the Annual Meeting. The five nominees
receiving the highest vote totals will be elected as our Board of Directors. For
approval of the proposed ratification of our independent registered accountants,
the votes cast in favor of the proposal must exceed the votes cast against the
proposal. Accordingly, abstentions and broker non-votes will not affect the
outcome of the election of the Board of Directors or the ratification of the
independent public accountants.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next Annual
Shareholder's Meeting must be received by the Company, at its offices at 30021
Tomas, Rancho Santa Margarita, CA 92688, not later than 120 days before the
Company releases its Proxy Statement to shareholders. Proposals postmarked after
March 31, 2008 shall be considered untimely; provided however, should the Board
of Directors elect to postpone the date of the annual meeting the deadline for
shareholder proposals shall proportionately be extended. Proposals of
shareholders must satisfy the conditions established by the Securities and
Exchange Commission ("SEC") for shareholder proposals to be included in the
Company's Proxy Statement for that meeting.
COMMUNICATIONS BETWEEN SHAREHOLDERS AND THE BOARD OF DIRECTORS
The Board of Directors of the Company has not adopted a formal procedure that
shareholders must follow to send communications to it. The Board of Directors
does receive communications from shareholders, from time to time, and addresses
those communications as appropriate. Shareholders can send communication to the
Board of Directors in writing, to RG Global Lifestyles, Inc., 30021 Tomas,
Rancho Santa Margarita, CA 92679, Attention Board of Directors.
The Board of Directors encourages attendance by our directors at the Annual
Meeting of Shareholders.
2
PROPOSAL NUMBER 1
ELECTION OF DIRECTORS
The Company's Board of Directors currently consists of five (5) authorized
directors. A total of five (5) directors will be elected at the Meeting to serve
until the next annual shareholder meeting. The nominees for election are Mr.
Juzer Jangbarwala, Mr. Grant King, Mr. David Koontz, Mr. Joseph Murray and Mr.
Steve Ritchie. The persons named as "Proxies" in the enclosed form of Proxy will
vote the shares represented by all valid returned proxies in accordance with the
specifications of the shareholders returning such proxies. If no choice has been
specified by a shareholder, the shares will be voted FOR the nominees. If at the
time of the Meeting any of the nominees named below should be unable or
unwilling to serve, which event is not expected to occur, the discretionary
authority provided in the proxy will be exercised to vote for such substitute
nominee or nominees, if any, as shall be designated by the Board of Directors.
If a quorum is present and voting, the nominees for directors receiving the
highest number of votes will be elected. Abstentions and broker non-votes will
have no effect on the vote.
NOMINEES FOR ELECTION AS DIRECTOR
The following sets forth certain information about each of the director
nominees:
GRANT KING, 55, CHIEF EXECUTIVE OFFICER. Mr. King has served as General Manager
and Managing Director of two major manufacturing and export companies in
Bangkok, Thailand since 1990. From September 1996 to September 2000 Mr. King
served as President of various wholly owned subsidiaries of the Company's
predecessor, L.L. Knickerbocker Co., Inc. between October 2000 and June 2004,
Mr. King was managing his own business interests overseas. From 1997 to July
2003, he served for six years as president and CEO of L.L. Knickerbocker (Thai)
Co. Ltd. in Thailand.
STEVE RITCHIE, 65, retired Brig. Gen. USA. Gen. Ritchie became an advisory board
member to the Company in August 2005 and subsequently became a Director in
October 2005. Prior to joining the Company in these positions, Mr. Ritchie had a
career in the US Air Force, culminating with the rank of Brigadier General.
JOSEPH MURRAY, 36, FORMER VP OPERATIONS. Mr. Murray is currently owner and COO
of a Nationwide Asset Management Company which buys and distributes foreclosed
assets at wholesale prices. Mr, Murray obtained a B.A in Physics and a B.A. in
Business Administration from Wesleyan University, Bloomington, IL in 1993 and
1994. Prior to joining the Company, Mr. Murray worked for Northrop Grumman from
January 2002 to May 2005 as a mobile technical director; and for Iway, from June
2001 to December 2002 as Vice President of Technology; and Volt from January
2000 to July 2001 as a technical lead and project manager.
JUZER JANGBARWALA, 47, CHAIRMAN AND CHIEF TECHNOLOGY OFFICER. Mr. Jangbarwala in
1989 was founder and CEO of Hydromatix, Inc., a company that was acquired by BOC
Edwards in 2002. In 2002, Mr. Jangbarwala founded and became CEO of Catalyx Inc.
as a technology incubator. In 2004, he became CEO of Energix Research, Inc., a
subsidiary of Catalyx, Inc., as a developer of low cost hydrogen generators. In
2006, Catalyx spun off CFS, and Mr. Jangbarwala serves as its CTO to develop
innovative water treatment technologies from the Catalyx portfolio of patents.
Mr. Jangbarwala has a B.S. in Chemical Engineering from Lehigh University.
DAVID KOONTZ, 54. Mr. Koontz has been Chief Financial Officer for Wako Logistics
Group, Inc. since August, 2005. From July 15, 2003 to August 6, 2005, he was the
Chief Financial Officer and Secretary of the O2Diesel, Corp, a publicly traded
company on the American Stock Exchange. Mr. Koontz has served as a Director of
O2Diesel Corp. since July 15, 2003. From the period January 2000 to September
2002 to Mr. Koontz worked as an independent business consultant, mostly for
businesses located in Asia. Mr. Koontz began his business career as a CPA and
became a partner with Arthur Andersen & Co. He practiced in the firm's offices
in Los Angeles, Hong Kong, Singapore and Tokyo.
THE BOARD OF DIRECTORS RECOMMENDS A
VOTE IN FAVOR OF EACH NOMINEE
3
EXECUTIVE OFFICERS
In addition to Mr. King and Mr. Murray whose biographical information is set
forth above, during 2006, the other executive officers are William Hitchcock and
Louis Knickerbocker (deceased):
WILLIAM C. HITCHCOCK, CHIEF FINANCIAL OFFICER, holds an LLM in taxation and
international studies from New York University, and a J.D. degree from the
University of California at Davis. Mr. Hitchcock served as a director of
Amerikal International Holdings from February 2004 to July 2004, when it merged
with the Company's predecessor. From July1999 to the present he has owned and
operated a full service tax preparation and tax representation business under
the name Bottom Line Financial, LLC. In addition, he has served as a director of
Al Barker Insurance since September1999.
LOUIS L. KNICKERBOCKER (DECEASED), OUR FORMER CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD. Mr. Knickerbocker served as Chairman of the Board and
Chief Executive Officer of the Company's predecessors, International Beauty
Supply, Ltd. and L.L. Knickerbocker Co., Inc. L.L. Knickerbocker Co., Inc.
completed Chapter 11 Debtor in Possession reorganization with the US Bankruptcy
Court, Central District of California in 2001. From 2001 to 2002 Mr.
Knickerbocker served as Chief Financial Officer of American Bankers. From 2002
to the present Mr. Knickerbocker has served as Chief Executive Officer of
Pinnacle International. Mr. Knickerbocker was a graduate of Santa Monica
College.
FAMILY RELATIONSHIPS
There are no family relationships among our directors, executive officers, or
persons nominated or chosen by the Company to become directors or executive
officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
For the past five years, no director or officer of the Company has been involved
in any of the following: (1) Any bankruptcy petition filed by or against any
business of which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time; (2) Any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses); (3) Being
subject to any order, judgment, or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his or her involvement in
any type of business, securities or banking activities; and (4) Being found by a
court of competent jurisdiction (in a civil action), the Commission or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated.
ADVERSE PROCEEDINGS
There exists no material proceeding to which any director or officer is a party
adverse to the Company small business issuer or has a material interest adverse
to the Company.
CODE OF ETHICS
The Company has adopted a code of ethics that is applicable to our directors and
officers. Our code of ethics is posted on our website and can be accessed at
WWW.RGGLIFE.COM.
AUDIT COMMITTEE FINANCIAL EXPERT
The Company's Board of Directors currently has one member - independent Director
David Koontz - serving on its Audit Committee. The Board has determined that Mr.
Koontz qualifies as its audit committee financial expert for purposes of the SEC
rules.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the current common stock ownership of (i) each
person known by the Company to be the beneficial owner of five percent or more
of the Company's common stock based upon approximately 26,897,592 shares
outstanding as of July 13, 2007, (ii) each officer and director of the Company
individually, and (iii) all officers and directors of the Company as a group. In
computing the number of shares beneficially owned by a person and the percentage
of ownership of that person, shares of common stock subject to options and/or
warrants held by that person that are currently exercisable, as appropriate, or
will become exercisable within sixty (60) days of the reporting date are deemed
outstanding, even if they have not actually been exercised. Those shares,
however, are not deemed outstanding for the purpose of computing the percentage
ownership of any other person. Unless otherwise indicated, each person has sole
voting and investment power with respect to the shares of common stock shown,
and all ownership is of record and beneficial. The address of each owner who is
an officer or director is in care of the Company at 30021 Tomas, Rancho Santa
Margarita California 92688.
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TITLE OF NUMBER OF PERCENT OF
CLASS NAME OF BENEFICIAL OWNER SHARES CLASS
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Common Estate of Louis Knickerbocker, former CEO and Chairman 7,667,995 (1) 26.4%
Common Joseph Murray, Director, former VP Operations 3,909,501 (2) 14.1%
Common Budy Hartono 2,887,466 10.7%
Common Grant King, CEO and Director 1,079,105 (3) 3.9%
Common William Hitchcock, CFO 1,047,118 (4) 3.8%
Common Juzer Jangbarwala, CTO and Chairman 583,333 (5) 2.1%
Common Steve Ritchie, Director 133,000 (6) *
Common David Koontz, Director 0 0
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All officers and directors as a group (6 persons)
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(1) Mr. Knickerbocker passed away on April 24, 2007 and therefore vesting of
his stock options ceased on that date. This figure includes 2,169,079
shares issuable to the estate of Mr. Knickerbocker pursuant to options and
warrants to purchase shares of our common stock.
(2) Mr. Murray resigned from his position as VP Operations on April 30, 2007
and therefore vesting of his stock options ceased on that date. This figure
includes 754,130 shares issuable to Mr. Murray pursuant to options and
warrants to purchase shares of our common stock.
(3) Includes 996,000 shares issuable to Mr. King pursuant to options to
purchase shares of our common stock within 60 days of July 13, 2007.
(4) Includes 563,118 shares issuable to Mr. Hitchcock pursuant to options to
purchase shares of our common stock within 60 days of July 13, 2007.
(5) Includes 270,833 shares issuable to Mr. Jangbarwala pursuant to options to
purchase shares of our common stock within 60 days of July 13, 2007.
(6) Includes 133,000 shares issuable to Mr. Ritchie pursuant to options to
purchase shares of our common stock within 60 days of July 13, 2007.
*Less than 1%.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During the fiscal year ended March 31, 2007, the Company had the following
related party transactions.
Rental Agreement
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The Company had entered into a month-to-month rental agreement with Pinnacle
International, Inc., a California corporation which was wholly owned by Louis
Knickerbocker (deceased), former Company CEO and Director. The agreement was for
3,000 square feet of office space located at 30021 Tomas, Suite 200, Rancho
Santa Margarita, California 92688 and office support services at a fair market
rate of $6,000 per month.
5
Private Stock Offering - Conversion of Matured Notes to Stock
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In November 2006, in consideration for Company noteholders (all note-holders
were offered an opportunity to participate in the Private Stock Offering -
including non-related party noteholders) agreeing to cancel the outstanding
principal and interest due under their matured promissory notes issued in
connection with a Note and Warrant financing, the Company offered the
noteholders restricted common stock at $0.20 per share in a private offering.
Pursuant to the terms of this Private Stock Offering and the cancellation of the
notes, the Company issued then related parties Louis Knickerbocker 1,018,082
shares of common stock and Joseph Murray 2,783,196 shares of common stock.
CFS Agreement
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On January 26, 2007, a Technology Transfer Agreement between the Company and
Catalyx Fluid Solutions, Inc. ("CFS") became effective. CFS is an entity 50%
owned by Juzer Jangbarwala, the Company's CTO and Chairman beginning on the date
of effectiveness - January 26, 2007. Pursuant to the terms of this agreement,
CFS was prepaid $200,000 against future royalty payments by the Company for
revenues earned by license of the purchased CFS Technology, and will be paid
$0.01 per barrel royalty on revenue received from lease or sublicense
transactions in Wyoming, and a 5% royalty on the sale price of the equipment
based on the technology in Wyoming.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors, executive
officers and persons who beneficially own 10% or more of a class of securities
registered under Section 12 of the Exchange Act to file reports of beneficial
ownership and changes in beneficial ownership with the SEC. Directors, executive
officers and greater than 10% stockholders are required by the rules and
regulations of the SEC to furnish the Company with copies of all reports filed
by them in compliance with Section 16(a).
Based solely on our review of certain reports filed with the Securities and
Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act of
1934, as amended, the following reports required to be filed with respect to
transactions in our Common Stock during the fiscal year ended March 31, 2007
were untimely:
o Will Hitchcock Form 4, filed 8/17/06 was due 5/5/06.
o Louis Knickerbocker Form 4, filed 8/17/06, was due 5/5/06.
o Joseph Murray Form 3, filed 8/31/06, was due 5/5/06.
o Grant King Form 4, filed 1/17/07, was due 1/16/07.
o Joseph Murray Form 4, filed 1/18/07, was due 1/16/07.
o Juzer Jangbarwala Form 3, filed 4/12/07, was due 1/30/07
o William Hitchcock Form 4 filed 4/17/07, was due 12/28/06
o Joseph Murray Form 4 filed 4/17/07, was due 12/28/06
o Louis Knickerbocker Form 4 filed 4/17/07, was due 12/28/06
o Grant King Form 4 filed 4/17/07, was due 12/28/06
o Juzer Jangbarwala Form 4, filed 7/2/07, was due 6/20/07
o Louis Knickerbocker Form 4 for the exercise of 118,421 stock options on
January 12, 2007 was not filed.
o Louis Knickerbocker Form 4 for the understood sale of 100,000 shares in
a private transaction in January 2007 was not filed.
o Steve Ritchie Form 4 for the acquisition of a stock option grant on
December 26, 2006, was not filed.
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6
COMPENSATION OF OFFICERS AND DIRECTORS
SUMMARY COMPENSATION TABLE
Change in
Pension
Non-Equity Value and
Incentive Nonqualified
Stock Option Plan Deferred All Other
Salary Bonus Awards Awards Compensation Compensation Compensation
Name and Principal Position Year ($) ($) ($) ($) ($) Earnings ($) ($) Total ($)
- ------------------------------- -------- --------- ------ ------ ----------- ------------- ------------- ------------ ---------
Louis Knickerbocker 2006/07 $ 160,000 $ 4,610,768 $4,770,768
CEO and Chairman 2005/06 $ -- 0 0
Grant King 2006/07 $ 67,500 0 0 $ 2,296,875 $2,364,375
President Aquair Asia 2005/06 $ -- 0 0
and Director
Joseph Murray 2006/07 $ 87,500 $ 1,297,730 $1,385,230
VP Operations and Director 2005/06 $ 40,000 0 $40,000
William Hitchcock 2006/07 $ 85,500 0 0 $ 1,162,274 $1,247,774
Chief Financial Officer 2005/06 $ 36,000 0 $36,000
Juzer Jangbarwala 2006/07 $ 24,000 0 0 $ 1,255,548 $1,279,548
Chief Technology Officer
and Director
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
Option Awards
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Equity
Incentive
Number of Number of Plan Awards:
Securities Securities Number of
Underlying Underlying Securities
Unexercised Unexercised Underlying Option
Options Options Unexercised Exercise Option
(#) (#) Unearned Price Expiration
Name Exercisable Unexercisable Options (#) ($) Date
- ------------------------- ----------- ------------- ----------- --------- -----------
Louis Knickerbocker 1,570,000 2,338,000 0.28 5/3/2011
250,500 1,753,500 0.69 12/26/2011
Grant King 166,000 1,162,000 0.2 5/3/2011
124,500 871,500 0.4 12/26/2011
Joseph Murray 84,000 588,000 0.2 5/3/2011
90,000 630,000 0.4 12/26/2011
William Hitchcock 170,000 588,000 0.2 5/3/2011
63,000 441,000 0.4 12/26/2011
Juzer Jangbarwala 187,500 1,312,500 0.2 1/26/2012
62,500 437,500 0.4 1/26/2012
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Market
Number of Value of Equity Incentive Equity Incentive Plan
Shares Shares Plan Awards: Awards: Market or
or Units or Units Number of Unearned Payout Value of
of Stock of Stock Shares, Units or Unearned Shares, Units
That Have That Have Other Rights That or Other Rights That
Not Vested Not Vested Have Not Vested Have Not Vested
Name (#) ($) (#) ($)
- ------------------------- ---------- ---------- ------------------ ----------------------
Louis Knickerbocker
Grant King
Joseph Murray
William Hitchcock
Juzer Jangbarwala
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DIRECTOR COMPENSATION
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Change in
Pension
Value and
Nonqualified
Fees Earned Non-Equity Deferred
or Stock Option Incentive Plan Compensation All Other
Paid in Cash Awards Awards Compensation Earnings Compensation Total
Name ($) ($) ($) ($) ($) ($) ($)
- ----------------------- --------------- ------ ------- --------------- ------------ ------------- -------
Louis Knickerbocker 0
Grant King 0
Juzer Jangbarwala 0
Steve Ritchie $62,710 $62,710
Joseph Murray 0
- ----------------------------------------------------------------------------------------------------------------
7
PROPOSAL NO. 2
RATIFICATION OF BOARD OF DIRECTORS' SELECTION OF MCKENNON, WILSON & MORGAN
LLP AS OUR INDEPENDENT AUDITOR FOR FISCAL YEAR ENDED MARCH 31, 2008
The Board of Directors has appointed the firm of McKennon, Wilson & Morgan LLP
as the independent auditor to audit the accountants of the Company and its
subsidiary for the year ended March 31, 2008. This firm has audited the
accountants and records of the Company and its subsidiary since March 2006.
Representatives of McKennon, Wilson & Morgan LLP are invited to attend the
Annual Meeting and to respond to appropriate questions, and they will have the
opportunity to make a statement if they wish.
In the event shareholders fail to ratify the appointment of McKennon, Wilson &
Morgan, LLP the Board of Directors will reconsider this appointment. Even if the
appointment is ratified, the Board of Directors, in its discretion, may direct
the appointment of a different independent auditor at any time during the year
if the Board of Directors determines that such a change would be in the
interests of the Company and its shareholders.
The affirmative vote of the holders of a majority of the Company's common stock
represented and voting at the meeting either in person or by proxy will be
required to for approval of this proposal. Neither abstentions nor broker
non-votes shall have any effect on the outcome of this vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE IN FAVOR OF PROPOSAL NUMBER 2
RELEVANT INFORMATION
a. Audit Fees: Aggregate fees billed for professional services rendered for the
audit of our annual financial statements for the period ended March 31, 2007 and
2006 were approximately $90,000 and $83,500, respectively.
b. Audit-Related Fees: Fees billed for audit-related services were approximately
$24,000 and $0 for the fiscal years ended March 31, 2007 and 2006 respectively.
These fees were primarily for reviews of quarterly un-audited financial
statements.
c. Tax Fees. Fees billed for tax services were approximately $225 and $8,178 for
the fiscal years ended March 31, 2007 and 2006 respectively.
d. All Other Fees: Aggregate fees billed for services other than those described
above were approximately $10,000 for the fiscal year ended March 31, 2007 for
the review of the Company's Form SB-2 and for restatements of the Quarters ended
September 30 and December 31, 2006; and $5,000 for the fiscal year ended March
31, 2006 in connection with the accounting in connection with the distribution
of Amerikal Neutraceutical Corporation, the Company's former wholly owned
subsidiary.
8
PROPOSAL 3
2007 INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN
This 2007 Incentive and Nonstatutory Stock Option Plan (the "2007 Plan"),
attached hereto as Appendix A, is intended to further the growth and financial
success of R.G. Global Lifestyles, Inc. (the "Company") by providing additional
incentives to selected employees, directors, and consultants to the Company or
parent corporation or subsidiary corporation of the Company as those terms are
defined in Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code") (such parent corporations and subsidiary corporations
hereinafter collectively referred to as "Affiliates") so that such employees and
consultants may acquire or increase their proprietary interest in the Company.
Stock options granted under the Plan (hereinafter "Options") may be either
"Incentive Stock Options," as defined in Section 422A of the Code and any
regulations promulgated under said Section, or "Nonstatutory Options" at the
discretion of the Board of Directors of the Company (the "Board") and as
reflected in the respective written stock option agreements granted pursuant
hereto.
The Board of Directors of the Company has unanimously approved and recommends to
the shareholders that they approve the proposal to adopt the Company's 2007
Incentive and Nonstatutory Stock Option Plan ("Plan") covering 6,000,000 shares
of the Company's Common Stock, which is approximately 20%of the Common Stock
currently issued and outstanding. The Board of Directors believes it is in the
Company's and its shareholders' best interests to approve the 2007 Plan, as it
will provide sufficient shares to enable the Board to utilize stock based
incentive compensation for both current and future employees of the Company,
directors and other providers of services to the Company.
The proposed 2007 Plan will be adopted upon receiving the affirmative vote of
holders of a majority of the shares present or represented by proxy at the
Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE IN FAVOR OF PROPOSAL 3
At July 13, 2007 the closing market price of the Company's shares was $1.07
SUMMARY OF THE PLAN
The following is a summary of the provisions of the Plan.
Administration
- --------------
The Plan shall be administered by the Board of Directors of the Company;
provided however, that the Board may delegate such administration to a committee
of not fewer than three (3) members (the "Committee"), at least two (2) of whom
are members of the Board and all of whom are disinterested administrators, as
contemplated by Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended ("Rule 16b-3"); and provided further, that the foregoing
requirement for disinterested administrators shall not apply prior to the date
of the first registration of any of the securities of the Company under the
Securities Act of 1933, as amended.
Eligibility
- -----------
The persons who shall be eligible to receive Options shall be employees,
directors, or consultants of the Company or any of its Affiliates ("Optionees").
The term consultant shall mean any person who is engaged by the Company to
render services and is compensated for such services, and any director of the
Company whether or not compensated for such services; provided that, if the
Company registers any of its securities pursuant to the Securities Act of 1933,
as amended (the "Act"), the term consultant shall thereafter not include
directors who are not compensated for their services or are paid only a director
fee by the Company.
9
The Plan authorizes the granting of both incentive stock options, as defined
under Section 422 of the Internal Revenue Code of 1986 ("ISO"), and
non-statutory stock options ("NQO") to purchase Common Stock. All employees of
the Company and its affiliates are eligible to participate in the Plan. The Plan
also authorizes the granting of NQO's to non-employee Directors and others
performing services to the Company.
Any ISO granted to a person who at the time the Option is granted owns stock
possessing more than ten percent (10%) of the total combined voting power of
value of all classes of stock of the Company, or of any Affiliate, ("Ten Percent
Holder") shall have an Option Price of no less than one hundred ten percent
(110%) of the fair market value of the common stock as of the date of grant.
ISOs granted to a person who at the time the Option is granted is not a Ten
Percent Holder shall have an Option price of no less than one hundred percent
(100%) of the fair market value of the common stock as of the date of grant.
NQOs shall have an Option Price determined by the Board as of the date of grant.
No option granted pursuant to the Plan is transferable otherwise than by will or
the laws of descent and distribution. If there is a stock split, stock dividend,
or other relevant change affecting the Company's shares, appropriate adjustments
would be made in the number of shares that could be issued in the future and in
the number of shares and price under all outstanding grants made before the
event. Future options may also cover such shares as may cease to be under option
by reason of total or partial expiration, termination or voluntary surrender of
an option.
The aggregate fair market value (determined at the time an option is granted) of
the Common Stock with respect to which ISO's are exercisable for the first time
by any person during any calendar year under the Plan shall not exceed $100,000.
Any Option granted to an Employee of the Company shall become exercisable over a
period of no longer than five (5) years, and no less than twenty percent (20%)
of the shares covered thereby shall become exercisable annually. No Option shall
be exercisable, in whole or in part, prior to one (1) year from the date it is
granted unless the Board shall specifically determine otherwise, as provided
herein. In no event shall any Option be exercisable after the expiration of five
(5) years from the date it is granted. Unless otherwise specified by the Board
or the Committee in the resolution authorizing such option, the date of grant of
an Option shall be deemed to be the date upon which the Board or the Committee
authorizes the granting of such Option.
Federal Income Tax Consequences
- -------------------------------
The holder of an ISO does not realize taxable income upon the grant or upon the
exercise of the option (although the option spread is an item of tax preference
income potentially subject to the alternative minimum tax). If the stock
acquired upon exercise of the options sold or otherwise disposed of within two
(2) years from the option grant date or within one year from the exercise date
then, in general, gain realized on the sale is treated as ordinary income to the
extent of the option spread at the exercise date, and the Company receives a
corresponding deduction. Any remaining gain is treated as capital gain. If the
stock is held for at least two (2) years from the grant date and one year from
the exercise date, then gain or loss realized upon the sale will be capital gain
or loss and the Company will not be entitled to a deduction. A special basis
adjustment applies to reduce the gain for alternative minimum tax purposes.
An optionee does not realize taxable income upon the grant of an NQO. In
general, the holder of a NQO realizes ordinary income in an amount equal to the
difference between the exercise price and the market value on the date of
exercise. The Company is entitled to an expense deduction at the same time and
in a corresponding amount.
The following options have been issued and are outstanding pursuant to the 2007
Plan as of July 13, 2007:
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Name and Position Date of Grant No. of Exercise Vesting Expiration
Options Price
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Louis Knickerbocker (deceased), Dec. 26, 2006 250,500 (1) $0.69 Monthly over two Dec. 26, 2011
former CEO and Chairman years from date
of grant.
10
Vesting ended on
April 24, 2007 -
date of Mr.
Knickerbocker's
passing away.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
William C. Hitchcock, CFO Dec. 26, 2006 504,000 $0.40 Monthly over two Dec. 26, 2011
years from date
of grant.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Grant King, CEO and Director Dec. 26, 2006 996,000 $0.40 Monthly over two Dec. 26, 2011
years from date
of grant.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Juzer Jangbarwala, CTO and Chairman Jan. 23, 2007 500,000 $0.40 Monthly over two Jan. 23, 2012
years from date
of grant.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Joseph Murray, Director and former Dec. 26, 2006 120,000 (2) $0.40 Monthly over two Dec. 26, 2011
VP Operations years from date
of grant.
Vesting ended on
April 30, 2007 -
date of Mr.
Murray's
resignation as
VP Operations.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Steve Ritchie, Director Dec. 26, 2006 100,000 $0.40 Monthly over two Dec. 26, 2011
years from date
of grant.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Christen Currie, employee Dec. 26, 2006 100,000 $0.40 Monthly over two Dec. 26, 2011
years from date
of grant.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Scott Olson, consultant Dec. 26, 2006 100,800 $0.40 Monthly over two Dec. 26, 2011
years from date
of grant.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Michael Kruger, consultant Dec. 26, 2006 120,000 $0.40 Monthly over two Dec. 26, 2011
years from date
of grant.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
11
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Mark King, consultant Dec. 26, 2006 60,000 $0.40 Monthly over two Dec. 26, 2011
years from date
of grant.
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Officers and Directors as a Group 2,470,500
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Total 2,851,300
- ------------------------------------- ----------------- -------------- --------- ------------------- ----------------
Terminated/Cancelled Stock Options:
(1) Mr. Knickerbocker was originally issued 2,004,000 option shares pursuant to
the 2007 Plan. As of April 24, 2007, the date of his passing, he had vested
250,500 of these option shares; the remainder were cancelled. His estate has
until the options' expiration date to exercise these option shares.
(2) Mr. Murray was originally issued 720,000 option shares pursuant to the 2007
Plan. As of April 30, 2007, the date of his resignation as VP Operations, he had
vested 120,000 of these option shares; the remainder were cancelled. According
to the terms of the 2007 Plan, he had thirty (30) days from the date of
resignation to exercise these 120,000 option shares. While he did not exercise
such option shares in that period, and has not since, the Company has granted
him an extension to exercise such option shares.
(3) Taylor Mossman. Ms. Mossman, a consultant, was originally granted 50,000
stock options on December 26, 2006 with an exercise price of $0.40. As of March
31, 2007, the date of her resignation as a consultant, she had vested 6,250 of
these option shares. According to the terms of the 2007 Plan, she had thirty
(30) days from the date of resignation to exercise these 6,250 option shares.
She failed to do so and such options were cancelled.
12
PROPOSAL 4
AMENDMENT TO THE COMPANY'S AMENDED ARTICLES OF INCORPORATION TO CHANGE THE
NAME OF THE COMPANY
The Board of Directors proposes that the shareholders of the Company approve an
amendment to the Company's Amended Articles of Incorporation to change the
Company's name from "R.G. Global Lifestyles, Inc." to "RG Global, Inc." The
Board of Directors believes that the name "RG Global, Inc." more accurately
reflects the nature of the Company's business today and is easier to identify,
remember and use.
The vote required to approve the proposal to amend the Company's Amended
Articles of Incorporation to change the Company's name is a majority of the
common stock outstanding and entitled to vote on the matter. The name change
will become effective upon filing of the amendment with the Secretary of
California, which the Company intends to make in October 2007.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE IN FAVOR OF PROPOSAL 4
13
OTHER MATTERS
We have not received notice of and do not expect any matters to be presented for
vote at the meeting, other than the proposals described in this Proxy Statement.
If you grant a proxy, the person named as proxy holder, Scott Olson, or their
nominees or substitutes, will have the discretion to vote your shares on any
additional matters properly presented for a vote at the meeting. If for any
unforeseen reason, any of our nominees are not available as a candidate for
director, the proxy holder will vote your proxy for such other candidate or
candidates nominated by our Board.
By Order of the Board of Directors
Grant King
CEO
Rancho Santa Margarita, California
July 27, 2007
14
APPENDIX A
R.G. GLOBAL LIFESTYLES, INC.
2007 INCENTIVE AND NONSTATUTORY STOCK OPTION PLAN
1. Purpose
-------
This Incentive and Nonstatutory Stock Option Plan (the "Plan") is
intended to further the growth and financial success of R.G. Global Lifestyles,
Inc. (the "Corporation") by providing additional incentives to selected
employees, directors, and consultants to the Corporation or parent corporation
or subsidiary corporation of the Corporation as those terms are defined in
Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code") (such parent corporations and subsidiary corporations hereinafter
collectively referred to as "Affiliates") so that such employees and consultants
may acquire or increase their proprietary interest in the Corporation. Stock
options granted under the Plan (hereinafter "Options") may be either "Incentive
Stock Options," as defined in Section 422A of the Code and any regulations
promulgated under said Section, or "Nonstatutory Options" at the discretion of
the Board of Directors of the Corporation (the "Board") and as reflected in the
respective written stock option agreements granted pursuant hereto.
2. Administration
--------------
The Plan shall be administered by the Board of Directors of the
Corporation; provided however, that the Board may delegate such administration
to a committee of not fewer than three (3) members (the "Committee"), at least
two (2) of whom are members of the Board and all of whom are disinterested
administrators, as contemplated by Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3"); and provided further, that the
foregoing requirement for disinterested administrators shall not apply prior to
the date of the first registration of any of the securities of the Corporation
under the Securities Act of 1933, as amended.
Subject to the provisions of the Plan, the Board and/or the Committee
shall have authority to (a) grant, in its discretion, Incentive Stock Options in
accordance with Section 422A of the Code or Nonstatutory Options; (b) determine
in good faith the fair market value of the stock covered by an Option; (c)
determine which eligible persons shall be granted Options and the number of
shares to be covered thereby and the term thereof; (d) construe and interpret
the Plan; (e) promulgate, amend and rescind rules and regulations relating to
its administration, and correct defects, omissions, and inconsistencies in the
Plan or any Option; (f) consistent with the Plan and with the consent of the
optionee, as appropriate, amend any outstanding Option or amend the exercise
date or dates thereof; (g) determine the duration and purpose of leaves of
absence which may be granted to option holders without constituting termination
of their employment for the purpose of the Plan; and (h) make all other
determinations necessary or advisable for the Plan's administration. The
interpretation and construction by the Board of any provisions of the Plan or of
any Option it shall be conclusive and final. No member of the Board or the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option.
A-1
3. Eligibility
-----------
The persons who shall be eligible to receive Options shall be
employees, directors, or consultants of the Corporation or any of its Affiliates
("Optionees"). The term consultant shall mean any person who is engaged by the
Corporation to render services and is compensated for such services, and any
director of the Corporation whether or not compensated for such services;
provided that, if the Corporation registers any of its securities pursuant to
the Securities Act of 1933, as amended (the "Act"), the term consultant shall
thereafter not include directors who are not compensated for their services or
are paid only a director fee by the Corporation.
(a) INCENTIVE STOCK OPTIONS. Incentive Stock Options may only be issued
to employees of the Corporation or its Affiliates. Incentive Stock Options may
be granted to officers, whether or not they are directors, but a director shall
not be granted an Incentive Stock Option unless such director is also an
employee of the Corporation. Payment of a director fee shall not be sufficient
to constitute employment by the Corporation. Any grant of option to an officer
or director of the Corporation subsequent to the first registration of any of
the securities of the Corporation under the Act shall comply with the
requirements of Rule 16b-3. An optionee may hold more than one Option.
The Corporation shall not grant an Incentive Stock Option under the
Plan to any employee if such grant would result in such employee holding the
right to exercise for the first time in any one calendar year, under all options
granted to such employee under the Plan or any other stock option plan
maintained by the Corporation or any Affiliate, with respect to shares of stock
having an aggregate fair market value, determined as of the date of the Option
is granted, in excess of three hundred thousand dollars ($100,000). Should it be
determined that an Incentive Stock Option granted under the Plan exceeds such
maximum for any reason other than a failure in good faith to value the stock
subject to such option, the excess portion of such option shall be considered a
Nonstatutory Option. If, for any reason, an entire option does not qualify as an
Incentive Stock Option by reason of exceeding such maximum, such option shall be
considered a Nonstatutory Option.
(b) NONSTATUTORY OPTION. The provisions of the foregoing Section 3(a)
shall not apply to any option designated as a "Nonstatutory Stock Option
Agreement" or which sets forth the intention of the parties that the option be a
Nonstatutory Option.
4. Stock
-----
The stock subject to Options shall be the shares of the Corporation's
authorized but unissued or reacquired Common Stock (the "Stock").
(a) NUMBER OF SHARES. Subject to adjustment as provided in Paragraph
5(h) of this Plan, the total number of shares of Stock which may be purchased
through exercise of Options granted under this Plan shall not exceed six million
(6,000,000) shares. If any Option shall for any reason terminate or expire, any
shares allocated thereto but remaining un-purchased upon such expiration or
termination shall again be available for the grant of Options with respect
thereto under this Plan as though no Option had been granted with respect to
such shares.
A-2
(b) RESERVATION OF SHARES. The Corporation shall reserve and keep
available at all times during the term of the Plan such number of shares as
shall be sufficient to satisfy the requirements of the Plan. If, after
reasonable efforts, which efforts shall not include the registration of the Plan
or Options under the Act, the Corporation is unable to obtain authority from any
applicable regulatory body, which authorization is deemed necessary by legal
counsel for the Corporation for the lawful issuance of shares hereunder, the
Corporation shall be relieved of any liability with respect to its failure to
issue and sell the shares for which such requisite authority was so deemed
necessary unless and until such authority is obtained.
5. Terms and Conditions of Options
-------------------------------
Options granted hereunder shall be evidenced by agreements between the
Corporation and the respective Optionees, in such form and substance as the
Board or Committee shall from time to time approve. Such agreements need not be
identical, and in each case may include such provisions as the Board or
Committee may determine, but all such agreements shall be subject to and limited
by the following terms and conditions:
(a) NUMBER OF SHARES: Each Option shall state the number of shares to
which it pertains.
(b) OPTION PRICE: Each Option shall state the Option Price, which shall
be determined as follows:
(i) Any Incentive Stock Option granted to a person who at the time
the Option is granted owns (or is deemed to own pursuant to Section 424(d) of
the Code) stock possessing more than ten percent (10%) of the total combined
voting power of value of all classes of stock of the Corporation, or of any
Affiliate, ("Ten Percent Holder") shall have an Option Price of no less than one
hundred ten percent (110%) of the fair market value of the common stock as of
the date of grant; and
(ii) Incentive Stock Options granted to a person who at the time
the Option is granted is not a Ten Percent Holder shall have an Option price of
no less than one hundred percent (100%) of the fair market value of the common
stock as of the date of grant.
(iii) Nonstatutory Options granted to a person shall have an Option
Price determined by the Board as of the date of grant.
For the purposes of this paragraph 5(b), the fair market value shall be
as determined by the Board, in good faith, which determination shall be
conclusive and binding; provided however, that if there is a public market for
such stock, the fair market value per share shall be the average of the bid and
asked prices (or the closing price if such stock is listed on the NASDAQ
National Market System) on the date of grant of the Option, or if listed on a
stock exchange, the closing price on such exchange on such date of grant.
a-3
(c) MEDIUM AND TIME OF PAYMENT: To the extent permissible by applicable
law, the Option price shall be paid, at the discretion of the Board, at either
the time of grant or the time of exercise of the Option (i) in cash or by check,
(ii) by delivery of other common stock of the Corporation, provided such
tendered stock was not acquired directly or indirectly from the Corporation, or,
if acquired from the Corporation, has been held by the Optionee for more than
six (6) months, (iii) by the Optionee's promissory note in a form satisfactory
to the Corporation and bearing interest at a rate determined by the Board, in
its sole discretion, but in no event less than 6% per annum, (iv) by the
surrender of the Option (or a portion hereof) in accordance with the terms
hereof but without payment in cash (a "Cashless Exercise"), (v) with any
combination of (i) and (iv), or (iv) such other form of legal consideration
permitted by State law as may be acceptable to the Board.
The number of shares of Common Stock issuable in respect of a Cashless Exercise
shall be computed using the following formula:
X = Y (A-B)
------
A
Where:
X = the number of shares of Common Stock to be issued to the Holder in
respect of a Cashless Exercise
Y = the number of shares of Common Stock purchasable under the Option
or, if only a portion of the Option is being exercised, the portion of the
Option being canceled in connection with such Cashless Exercise (at the date of
such calculation)
A = the Fair Market Value (as defined below) of one share of the
Corporation's Common Stock (at the date of such calculation)
B = Option Exercise Price (as adjusted to the date of such
calculation).
(d) TERM AND EXERCISE OF OPTIONS: Any Option granted to an Employee of
the Corporation shall become exercisable over a period of no longer than five
(5) years, and no less than twenty percent (20%) of the shares covered thereby
shall become exercisable annually. No Option shall be exercisable, in whole or
in part, prior to one (1) year from the date it is granted unless the Board
shall specifically determine otherwise, as provided herein. In no event shall
any Option be exercisable after the expiration of five (5) years from the date
it is granted. Unless otherwise specified by the Board or the Committee in the
resolution authorizing such option, the date of grant of an Option shall be
deemed to be the date upon which the Board or the Committee authorizes the
granting of such Option.
Each Option shall be exercisable to the nearest whole share, in
installments or otherwise, as the respective option agreements may provide.
During the lifetime of an Optionee, the Option shall be exercisable only by the
Optionee and shall not be assignable or transferable by the Optionee, and no
other person shall acquire any rights therein. To the extent not exercised,
installments (if more than one) shall accumulate, but shall be exercisable, in
whole or in part, only during the period for exercise as stated in the option
agreement, whether or not other installments are then exercisable.
a-4
(e) TERMINATION OF STATUS AS EMPLOYEE, DIRECTOR, OR CONSULTANT: If
Optionee's status as an employee, director, or consultant shall terminate for
any reason other than Optionee's death, then the Optionee (or if the Optionee
shall die after such termination, but prior to exercise, Optionee's personal
representative or the person entitled to succeed to the Option) shall have the
right to exercise any vested Options, in whole or in part, at any time within
thirty (30) days after such termination (or in the event Optionee's termination
was caused by permanent disability (within the meaning of Section 22(e)(3) of
the Code) this 30-day period shall be extended to six (6) months) or the
remaining term of the Option, whichever is the lesser; provided, however, that
with respect to Nonstatutory Options, the Board may specify such longer period,
not to exceed six (6) months, for exercise following termination as the Board
deems reasonable and appropriate. The Option may be exercised only with respect
to installments that the Optionee could have exercised at the date of
termination of employment. Nothing contained herein or in any Option granted
pursuant hereto shall be construed to affect or restrict in any way the right of
the Corporation to terminate the employee of an Optionee with or without cause.
(f) DEATH OF OPTIONEE: If an Optionee dies while employed or engaged as
a director or consultant by the Corporation or an Affiliate, the portion of such
Optionee's Option or Options which were exercisable at the date of death may be
exercised, in whole or in part, by the estate of the decedent or by a person
succeeding to the right to exercise such Option or Options, at any time within
the remaining term of the Option, but only to the extent, that Optionee could
have exercised the Option as of the date of Optionee's death; provided, in any
case, that the Option may be so exercised only to the extent that the Option has
not previously been exercised by Optionee.
(g) NONTRANSFERABILITY OF OPTION: No Option shall be transferable by
the Optionee, except by will or by the laws of descent and distribution.
(h) RECAPITALIZATION: Subject to any required action by the
stockholders, the number of shares of common stock covered by each outstanding
Option, and the price per share thereof set forth in each such Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of common stock of the Corporation resulting from a subdivision or
consolidation of shares or the payment of a stock dividend, or any other
increase or decrease in the number of such shares affected without receipt of
consideration by the Corporation.
Subject to any required action by the stockholders, if the Corporation
shall be the surviving entity in any merger or consolidation, each outstanding
Option thereafter shall pertain to and apply to the securities to which a holder
of shares of common stock equal to the shares subject to the Option would have
been entitled by reason of such merger or consolidation. A dissolution or
liquidation of the Corporation or a merger or consolidation in which the
Corporation is not the surviving entity shall cause each outstanding Option to
terminate on the effective date of such dissolution, liquidation, merger or
consolidation. In such event, if the entity which shall be the surviving entity
does not tender to Optionee an offer, for which it has no obligation to do so,
to substitute for any unexercised Option a stock option or capital stock of such
surviving entity, as applicable, which on an equitable basis shall provide the
Optionee with substantially the same economic benefit as such unexercised
Option, then the Board may grant to such Optionee, but shall not be obligated to
do so, the right for a period commencing thirty (30) days prior to and ending
immediately prior to such dissolution, liquidation, merger or consolidation or
during the remaining term of the Option, whichever is the lesser, to exercise
any unexpired Option or Options, without regard to the installment provisions of
Paragraph 5(d) of this Plan; provided, that any such right granted shall be
granted to all Optionees not receiving an offer to substitute on a consistent
basis, and provided further, that any such exercise shall be subject to the
consummation of such dissolution, liquidation, merger or consolidation.
A-5
In the event of a change in the common stock of the Corporation as
presently constituted, which is limited to a change of all of its authorized
shares without par value into the same number of shares with a par value, the
shares resulting from any such change shall be deemed to be the common stock
within the meaning of this Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided in this Paragraph 5(h), the Optionee shall have no
rights by reason of any subdivision or consolidation of shares of stock or any
class or the payment of any stock dividend or any other increase or decrease in
the number of shares of stock of any class, and the number or price of shares of
common stock subject to any Option shall not be affected by, and no adjustment
shall be made by reason of, any dissolution, liquidation, merger or
consolidation, or any issue by the Corporation of shares of stock of any class
or securities convertible into shares of stock of any class.
The grant of an Option pursuant to the Plan shall not affect in any way
the right or power of the Corporation to make any adjustments,
reclassifications, reorganizations or changes in its capital or business
structure or to merge, consolidate, dissolve, or liquidate or to sell or
transfer all or any part of its business or assets.
(i) RIGHTS AS A STOCKHOLDER: An Optionee shall have no rights as a
stockholder with respect to any shares covered by an Option until the date of
the issuance of a stock certificate to Optionee for such shares. No adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
expressly provided in Paragraph 5(h) hereof.
(j) MODIFICATION, ACCELERATION, EXTENSION, AND RENEWAL OF OPTIONS:
Subject to the terms and conditions and within the limitations of the Plan, the
Board may modify an Option, or once an Option is exercisable, accelerate the
rate at which it may be exercised, and may extend or renew outstanding Options
granted under the Plan or accept the surrender of outstanding Options (to the
extent not theretofore exercised) and authorize the granting of new Options in
substitution for such Options, provided such action is permissible under Section
422A of the Code and state law.
Notwithstanding the foregoing provisions of this Paragraph 5(j),
however, no modification of an Option shall, without the consent of the
Optionee, alter to the Optionee's detriment or impair any rights or obligations
under any Option theretofore granted under the Plan.
A-6
(k) INVESTMENT INTENT: Unless and until the issuance and sale of the
shares subject to the Plan are registered under the Act, each Option under the
Plan shall provide that the purchases of stock thereunder shall be for
investment purposes and not with a view to, or for resale in connection with,
any distribution thereof. Further, unless the issuance and sale of the stock
have been registered under the Act, each Option shall provide that no shares
shall be purchased upon the exercise of such Option unless and until (i) any
then applicable requirements of state and federal laws and regulatory agencies
shall have been fully complied with to the satisfaction of the Corporation and
its counsel, and (ii) if requested to do so by the Corporation, the person
exercising the Option shall (i) give written assurances as to knowledge and
experience of such person (or a representative employed by such person) in
financial and business matters and the ability of such person (or
representative) to evaluate the merits and risks of exercising the Option, and
(ii) execute and deliver to the Corporation a letter of investment intent, all
in such form and substance as the Corporation may require. If shares are issued
upon exercise of an Option without registration under the Act, subsequent
registration of such shares shall relieve the purchaser thereof of any
investment restrictions or representations made upon the exercise of such
Options.
(l) EXERCISE BEFORE EXERCISE DATE: At the discretion of the Board, the
Option may, but need not, include a provision whereby the Optionee may elect to
exercise all or any portion of the Option prior to the stated exercise date of
the Option or any installment thereof. Any shares so purchased prior to the
stated exercise date shall be subject to repurchase by the Corporation upon
termination of Optionee's employment as contemplated by Paragraphs 5(e), 5(f)
and 5(g) hereof prior to the exercise date stated in the Option and such other
restrictions and conditions as the Board or Committee may deem advisable.
(m) OTHER PROVISIONS: The Option agreements authorized under this Plan
shall contain such other provisions, including, without limitation, restrictions
upon the exercise of the Options, as the Board or the Committee shall deem
advisable. Shares shall not be issued pursuant to the exercise of an Option, if
the exercise of such Option or the issuance of shares thereunder would violate,
in the opinion of legal counsel for the Corporation, the provisions of any
applicable law or the rules or regulations of any applicable governmental or
administrative agency or body, such as the Act, the Securities Exchange Act of
1934, the rules promulgated under the foregoing or the rules and regulations of
any exchange upon which the shares of the Corporation are listed.
6. Availability of Information
---------------------------
During the term of the Plan and any additional period during which an Option
granted pursuant to the Plan shall be exercisable, the Corporation shall make
available, not later than one hundred and twenty (120) days following the close
of each of its fiscal years, such financial and other information regarding the
Corporation as is required by the bylaws of the Corporation and applicable law
to be furnished in an annual report to the stockholders of the Corporation.
7. Effectiveness of Plan; Expiration
---------------------------------
Subject to approval by the stockholders of the Corporation, this Plan shall
be deemed effective as of the date it is adopted by the Board. The Plan shall
expire on March 31, 2011, but such expiration shall not affect the validity of
outstanding Options.
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8. Amendment and Termination of the Plan
-------------------------------------
The Board may, insofar as permitted by law, from time to time, with respect
to any shares at the time not subject to Options, suspend or terminate the Plan
or revise or amend it in any respect whatsoever, except that without the
approval of the stockholders of the Corporation, no such revision or amendment
shall (i) increase the number of shares subject to the Plan, (ii) decrease the
price at which Options may be granted, (iii) materially increase the benefits to
Optionees, or (iv) change the class of persons eligible to receive Options under
this Plan; provided, however, no such action shall alter or impair the rights
and obligations under any Option outstanding as of the date thereof without the
written consent of the Optionee thereunder. No Option may be granted while the
Plan is suspended or after it is terminated, but the rights and obligations
under any Option granted while the Plan is in effect shall not be impaired by
suspension or termination of the Plan.
9. Indemnification of Board
------------------------
In addition to such other rights or indemnifications as they may have as
directors or otherwise, and to the extent allowed by applicable law, the members
of the Board and the Committee shall be indemnified by the Corporation against
the reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any claim, action, suit or
proceeding, or in connection with any appeal thereof, to which they or any of
them may be a party by reason of any action taken, or failure to act, under or
in connection with the Plan or any Option granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is approved
by independent legal counsel selected by the Corporation) or paid by them in
satisfaction of a judgment in any such claim, action, suit or proceeding, except
in any case in relation to matters as to which it shall be adjudged in such
claim, action, suit or proceeding that such Board member is liable for
negligence or misconduct in the performance of his or her duties; provided that
within sixty (60) days after institution of any such action, suit or Board
proceeding the member involved shall offer the Corporation, in writing, the
opportunity, at its own expense, to handle and defend the same.
10. Application of Funds
--------------------
The proceeds received by the Corporation from the sale of common stock
pursuant to the exercise of Options will be used for general corporate purposes.
11. No Obligation to Exercise Option
---------------------------------
The granting of an Option shall impose no obligation upon the Optionee to
exercise such Option.
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12. Notices
-------
All notice, requests, demand, and other communications pursuant this Plan
shall be in writing and shall be deemed to have been duly given on the date of
service if served personally on the party to whom notice is to be given, or on
the third day following the mailing thereof to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid.
13. Securities Law and Other Restrictions.
--------------------------------------
Notwithstanding any other provision of the Plan or any agreements entered
into pursuant to the Plan, the Corporation will not be required to issue any
shares of Common Stock under this Plan, and an Optionee may not sell, assign,
transfer or otherwise dispose of shares of Common Stock issued pursuant to
Incentive Awards granted under the Plan, unless (a) there is in effect with
respect to such shares a registration statement under the Securities Act and any
applicable securities laws of a state or foreign jurisdiction or an exemption
from such registration under the Securities Act of 1933 and applicable state or
foreign securities laws, and (b) there has been obtained any other consent,
approval or permit from any other U.S. or foreign regulatory body which the
Committee, in its sole discretion, deems necessary or advisable. The Corporation
may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing shares of Common Stock, as may be
deemed necessary or advisable by the Corporation in order to comply with such
securities law or other restrictions.
* * * * *
The foregoing 2007 Incentive and Nonstatutory Stock Option Plan was
duly adopted and approved by the Board of Directors on December 26, 2007,
subject to shareholder ratification within twelve months.
/s/ Louis L. Knickerbocker
--------------------------------------
Louis L. Knickerbocker, Chairman & CEO
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
RG GLOBAL LIFESTYLES, INC.
The undersigned hereby appoints Scott Olson as Proxy with full power of
substitution to vote all the shares of common stock which the undersigned would
be entitled to vote if personally present at the Annual Meeting of Shareholders
to be held on September 14, 2007 at 10:00 a.m. at the Irvine Marriott, 18000 Von
Karman Ave, Irvine, CA 92612, or at any adjournment thereof, and upon any and
all matters which may properly be brought before the meeting or any adjournments
thereof, hereby revoking all former proxies.
Election of Directors
The nominees for the Board of Directors are:
Grant King Juzer Jangbarwala Joseph Murray
David Koontz Steve Ritchie
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S), WRITE
THE NOMINEE(S) NAME ON THE SPACES PROVIDED BELOW:
___________________________________
___________________________________
___________________________________
___________________________________
The Board of Directors recommends a vote FOR Proposals 1, 2, 3 and 4.
1. To elect five (5) directors to hold office for a one year term or until
each of their successors are elected and qualified (except as marked to the
contrary above).
|_| FOR |_| AGAINST |_| ABSTAINS |_| WITHHOLDS
2. To ratify the appointment of McKennon, Wilson & Morgan LLP as the
independent auditor of the Company.
|_| FOR |_| AGAINST |_| ABSTAINS |_| WITHHOLDS
3. To ratify the Company's 2007 Incentive and Nonstatutory Stock Option Plan.
|_| FOR |_| AGAINST |_| ABSTAINS |_| WITHHOLDS
4. To amend the Company's amended articles of incorporation to change the name
of the company.
|_| FOR |_| AGAINST |_| ABSTAINS |_| WITHHOLDS
5. TO WITHHOLD THE PROXY'S DISCRETIONARY VOTE ON YOUR BEHALF WITH REGARDS TO
ANY OTHER MATTERS THAT ARE PROPERLY PRESENTED FOR A VOTE AT THE MEETING,
PLEASE MARK THE BOX BELOW.
|_| WITHHOLDS
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MATTER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR EACH OF THE PROPOSALS.
Dated: _______________, 2007
________________________________
Signature of Shareholder
________________________________
Signature of Shareholder
Please date and sign exactly as your name(s) appears hereon. If the shares are
registered in more than one name, each joint owner or fiduciary should sign
personally. When signing as executor, administrator, trustee or guardian give
full titles. Only authorized officers should sign for a corporation.