UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 2, 2004
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AMERICAN VANTAGE COMPANIES
(Exact name of registrant as specified in its charter)
Nevada 0-10061 04-2709807
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(State or other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
4735 S. Durango Dr., Suite #105, Las Vegas, Nevada 89128
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (702) 227-9800
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Item 5. Other Events.
As previously disclosed, American Vantage Media Corporation ("AVM"), a
wholly-owned subsidiary of American Vantage Companies ("AVCS" or "Company") has
been continuing its post-acquisition restructuring activities. As a result of
these activities, the Company has downsized from approximately 90 to
approximately 60 personnel for a net salaries reduction of approximately
$2,500,000. AVM is also continuing its efforts to consolidate the operations
into two locations in Santa Monica, California and New York City, New York, as
well as identifying further payroll and non-payroll operating cost efficiencies.
Included in the restructuring is the outsourcing of the Company's interactive
game production services previously performed by the Company's wholly-owned
subsidiary, YaYa Media, Inc. ("YaYa"). As a result, the Company terminated the
employment of Keith Ferrazzi, Chief Executive Officer of YaYa.
In addition, AVM terminated the employment of James P. Clarke, AVM Acting Chief
Operating Officer. Al Cattabiani, President and CEO of Wellspring Media, Inc., a
wholly-owned subsidiary of AVM, has resigned to form a production/financing
company entitled 1409 Productions ("1409"). AVM has executed a distribution
agreement with 1409 for a minority ownership position.
The Company also reached an oral agreement with Stephen K. Bannon, the Company's
Vice-Chairman of the Board of Directors and Chief Executive Officer of AVM,
on June 2, 2004 regarding Mr. Bannon's compensation as an employee of AVM. Under
this agreement, Mr. Bannon is to be compensated as follows: (i) an annual base
salary of $350,000; (ii) the grant of a ten-year nonqualified stock option to
purchase 250,000 shares of the Company's common stock at an exercise price of
$3.08 with such grant subject to achieving stock price milestones of $10.00
within three years, $15.00 within five years and $20.00 within eight years;
(iii) the issuance of 50,000 shares of the Company's common stock subject to
achieving operating results at May 31, 2005 and May 31, 2006 as determined by
the Compensation Committee of the AVCS Board of Directors; (iv) the issuance of
120,000 restricted shares; and, (v) the grant of a ten-year nonqualified stock
option to purchase 50,000 shares of the Company's common stock at a purchase
price of $2.62 per share becoming exercisable as to 33.3% of such shares on each
of the next three anniversaries of the effective date of grant. The Company
anticipates entering into a definitive employment agreement with Mr. Bannon
which will include such compensation terms.
The Company reached an oral agreement with David C. Schulte to serve as
Vice-Chairman of AVM with direct responsibility for its branded content
division. Under this agreement, Mr. Schulte is to be compensated as follows: (i)
an annual base salary of $350,000; (ii) the grant of a ten-year nonqualified
stock option to purchase 65,000 shares of the Company's common stock at an
exercise price of $3.08 with such grant subject to achieving stock price
milestones of $10.00 within three years, $15.00 within five years and $20.00
within eight years; and, (iii) the issuance of 65,000 restricted shares. The
Company anticipates entering into a definitive employment agreement with Mr.
Schulte which will include such compensation terms.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN VANTAGE COMPANIES
Date: June 4, 2004 By: /s/ Ronald J. Tassinari
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Ronald J. Tassinari, President and
Chief Executive Officer