UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): October 20, 2004
-------------------------------
AGU ENTERTAINMENT CORP.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware
- --------------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)
005-79752 84-1557072
- --------------------------------------------------------------------------------
(Commission File Number) (IRS Employer Identification No.)
11077 Biscayne Blvd., Suite 100, Miami, Florida 33161
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(305) 899-6100
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
On October 20, 2004, the Company held its Annual Meeting of Shareholders
at which the following proposals were approved by the shareholders of the
Company necessary to approve such matters in accordance with the Colorado
Business Corporation Act and the Company's charter documents: (i) the
reincorporation of the Company in the state of Delaware through a merger of the
Company into a wholly owned subsidiary corporation incorporated in the State of
Delaware (the "Reincorporation Merger") and (ii) the adoption of the Company's
2004 Stock Option and Stock Incentive Plan (the "Incentive Plan"). The
shareholders of the Company also voted to re-elect all five of the Company's
directors to the Board of Directors at the Annual Meeting.
The Merger Agreement
The Reincorporation Merger was effected in accordance with the terms and
conditions of that certain Agreement and Plan of Merger, dated as of September
30, 2004 (the "Merger Agreement"), by and between the Company and AGU
Entertainment Corp., a Delaware corporation and a wholly owned subsidiary of the
Company ("AGU Delaware"), pursuant to which, upon shareholder approval on
October 20, 2004 and effective October 21, 2004, the Company merged with and
into AGU Delaware for the purpose of reincorporating the Company in the State of
Delaware.
Pursuant to the terms of the Merger Agreement, (i) the Company merged with
and into AGU Delaware, with AGU Delaware being the surviving corporation; (ii)
AGU Delaware assumed all assets and liabilities of the Company, including
obligations under the Company's outstanding indebtedness and contracts,
including the newly adopted Incentive Plan; (iii) the Company's existing Board
of Directors and officers became the Board of Directors and officers of AGU
Delaware, subject to the terms and conditions of the Certificate of
Incorporation of AGU Delaware which provides, among other things, for the
classification of directors; and (v) the Company's subsidiaries became the
subsidiaries of AGU Delaware. No shareholders of the Company exercised
dissenters' rights under the Colorado Business Corporation Act.
The reincorporation did not result in any change in the Company's name,
headquarters, business, jobs, management, location of any of the Company's
offices or facilities, number of employees, taxes payable to the State of
Colorado, assets, liabilities or net worth. A summary of the most significant
differences between the rights of the shareholders of the Company before and
after the Reincorporation Merger as a result of the differences among the
Colorado Business Corporation Act and the Delaware General Corporation Law and
the Articles of Incorporation and Bylaws of the Company prior to the
Reincorporation Merger and the Certificate of Incorporation and the Bylaws of
AGU Delaware is contained in the Company's Definitive Proxy Statement on
Schedule 14A filed with the Securities and Exchange Commission on October 7,
2004.
The above description of the Merger Agreement is qualified in its entirety
by reference to the full and complete text of such agreement, a copy of which
was filed with the Securities and Exchange Commission on October 7, 2004 as
Appendix D to the Company's Definitive Proxy Statement on Schedule 14A for the
2004 Annual Meeting.
The 2004 Stock Option and Stock Incentive Plan
The Incentive Plan was adopted by the Board of Directors of the Company on
July 29, 2004 and approved by the shareholders of the Company on October 20,
2004. The purpose of the Incentive Plan is to promote the long-term interests of
the Company and its shareholders by providing a means for attracting and
retaining officers, directors and other key employees of and consultants to the
Company and its affiliates by providing for awards in the form of common stock
of the Company. The Incentive Plan provides that all officers, directors,
important consultants and key employees of the Company and of any present or
future Company parent or subsidiary corporation are eligible to receive an
option or options or awards of restricted stock under the Incentive Plan. Awards
made pursuant to the Incentive Plan may be in the form of options or grants of
shares of restricted stock.
2
Options granted under the Incentive Plan may be incentive stock options or
non-qualified stock options and may be subject to a vesting schedule, as
determined by the Board of Directors or the Compensation Committee of the Board
of Directors (the "Committee"). The option price for options issued under the
Incentive Plan will be at least equal to the fair market value of the Company's
common stock on the date of grant of the option. The expiration date of an
option is also determined by the Board of Directors or the Committee at the time
of the grant, but in no event will an option be exercisable after the expiration
of ten years from the date of grant of the option under the Incentive Plan. All
unexercised options terminate three months following the date on which an
optionee's employment with the Company terminates, other than by reason of
disability or death. An exercisable option held by an optionee who dies or who
ceases to be employed by the Company because of disability may be exercised by
the employee or his representative within one year after the employee dies or
becomes disabled (but not later than the scheduled option termination date).
Additionally, unless the Board of Directors or the Committee shall otherwise
provide, upon a change of control of the Company, options granted under the
Incentive Plan may be exercised for up to 100% of the total number of shares
then subject to the option minus the number of shares previously purchased upon
exercise of the option (as adjusted for stock dividends, stock splits,
combinations of shares and what the Board of Directors or the Committee deems in
its sole discretion to be similar circumstances) and any vesting date may
accelerate accordingly. A change in control is defined in the Incentive Plan to
include a change within a twelve-month period in holders of more than 50% of the
outstanding voting stock of the Company, or any other events deemed to be a
change in control by the Board of Directors or the Committee.
All awards of restricted stock under the Incentive Plan may be subject to
vesting for a period of time and will become unrestricted under the Incentive
Plan in accordance with a vesting schedule, if any, set by the Board of
Directors or the Committee at the time of grant. Under the terms of the
Incentive Plan, the Board of Directors or the Committee may also establish an
additional time period during which the participant must hold the vested shares
prior to resale. During the restricted period, if any, the participant shall
have the right to vote the shares subject to the award. All unvested awards
terminate immediately upon termination of the participant's employment with the
Company, other than by reason of disability or death. If the participant ceases
to be employed by the Company because of death or disability, any unvested
awards will immediately vest. Additionally, unless the Board of Directors or the
Committee shall otherwise provide, if the participant's employment with the
Company is involuntarily terminated for any reason, except for cause, during an
eighteen-month period after a change in control of the Company, the shares of
common stock subject to the participant's award will fully vest and no longer be
subject to the restrictions under the Incentive Plan.
Except as otherwise provided by the rules and regulations of the
Securities and Exchange Commission, the Incentive Plan provides that the Board
of Directors or the Committee at the time of grant of a non-qualified stock
option may provide that such stock option is transferable to any "family member"
of the optionee by gift or qualified domestic relations order. The Incentive
Plan defines "family member" to include any child, stepchild, grandchild,
parent, step-parent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
grantee's household (other than a tenant or employee), a trust in which these
3
persons have more than 50% of the beneficial interest, a foundation in which
these persons (or the grantee) controls the management of assets, and any other
entity in which these persons or the grantee own more than 50% of the voting
interests. Except as otherwise provided by the Internal Revenue Code of 1986, as
amended, and the rules and regulations thereunder, no incentive stock option
granted under the Incentive Plan may be sold, assigned or transferred other than
by will or the laws of descent and distribution. Awards of restricted stock may
not be sold, assigned or transferred, during the restricted period established
by the Board of Directors or the Committee as set forth in the restricted stock
agreement, except, in the event of death, by will or the laws of descent and
distribution.
Pursuant to the terms of the Incentive Plan, 2,000,000 shares of the
Company's common stock were reserved for issuance upon the exercise of options
or awards of restricted stock granted under the Incentive Plan. All 2,000,000
share of the Company's common stock may be awarded in form of incentive stock
options. The Incentive Plan provides that the maximum number of options or
restricted stock which may be awarded to any single participant under the
Incentive Plan shall equal no more than 90% of the shares reserved for issuance
under the Incentive Plan.
Unless terminated earlier by the Board of Directors, the Incentive Plan
will remain in effect until all awards granted under Incentive Plan have been
satisfied by the issuance of shares provided that no new options or restricted
stock awards may be granted under such Incentive Plan more than ten years from
October 20, 2004, the date the Incentive Plan was adopted by the Company.
The above description of the Incentive Plan is qualified in its entirety
by reference to the full and complete text of the Incentive Plan, which includes
the form of awards to be granted thereunder, a copy of which was filed with the
Securities and Exchange Commission on October 7, 2004 as Appendix C to the
Company's Definitive Proxy Statement on Schedule 14A for the 2004 Annual
Meeting.
4
SIGNATURES
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.
Dated: October 26, 2004 AGU ENTERTAINMENT CORP.
By: /s/ David C. Levy
-------------------------------
Name: David C. Levy
Title: President
5