-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CxVkPG7aLDC4Z7U7Kxkd6GBN4r27fxzV9xhWyjyEKLeshzRE6+zsF207LsMR3IXd 4imkz0zIPKyT0BajJgyoLw== 0000950170-96-000418.txt : 19980423 0000950170-96-000418.hdr.sgml : 19980423 ACCESSION NUMBER: 0000950170-96-000418 CONFORMED SUBMISSION TYPE: DEFN14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960728 FILED AS OF DATE: 19960628 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CHOICES ENTERTAINMENT CORP CENTRAL INDEX KEY: 0000822935 STANDARD INDUSTRIAL CLASSIFICATION: 7841 IRS NUMBER: 521529536 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFN14A SEC ACT: SEC FILE NUMBER: 000-17001 FILM NUMBER: 96588540 BUSINESS ADDRESS: STREET 1: 81 BIG OAK RD STREET 2: STE 205 CITY: MORRISVILLE STATE: PA ZIP: 19067 BUSINESS PHONE: 2154281000 MAIL ADDRESS: STREET 1: 81 BIG OAK RD SUITE 205 CITY: MORRISVILLE STATE: PA ZIP: 19067 FORMER COMPANY: FORMER CONFORMED NAME: DATAVEND INC DATE OF NAME CHANGE: 19900401 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MACAULAY ROBERT B AS ATTY OF CMMTTEE MAX CHOICE STCKHLDR VLU CENTRAL INDEX KEY: 0001015773 STANDARD INDUSTRIAL CLASSIFICATION: FILING VALUES: FORM TYPE: DEFN14A BUSINESS ADDRESS: STREET 1: 201 SOUTH BISCAYNE BLVD STE 1402 STREET 2: C/O OLLE MACAULAY & ZORRILLA PA CITY: MIAMI STATE: FL ZIP: 33131 BUSINESS PHONE: 3053589200 DEFN14A 1 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. 3) Filed by the Registrant [ ] Filed by a Party other than the Registrant [X] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12 CHOICES ENTERTAINMENT CORPORATION (COMMISSION FILE NO. 0-17001) --------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) COMMITTEE FOR MAXIMIZING CHOICES STOCKHOLDER VALUE -------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of Filing Fee (Check the appropriate box): [ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. [X] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: - - - -------------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: - - - -------------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): ----------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: - - - -------------------------------------------------------------------------------- (5) Total fee paid: - - - -------------------------------------------------------------------------------- [ ] Fee paid previously with preliminary materials. - - - -------------------------------------------------------------------------------- [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: - - - -------------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: - - - -------------------------------------------------------------------------------- (3) Filing Party: - - - -------------------------------------------------------------------------------- (4) Date Filed: - - - -------------------------------------------------------------------------------- THE COMMITTEE FOR MAXIMIZING CHOICES STOCKHOLDER VALUE ------------------------------------------ CONSENT SOLICITATION STATEMENT FOR REMOVAL AND REPLACEMENT OF THE BOARD OF DIRECTORS OF CHOICES ENTERTAINMENT CORPORATION Dear Fellow Choices Stockholder: This consent solicitation statement is being furnished by a group of concerned stockholders (the "Committee") of Choices Entertainment Corporation (the "Company" or "Choices") for the purpose of removing and replacing the Board of Directors of the Company pursuant to action by written consent of a majority in voting interest of the stockholders of the Company through resolutions in the form attached hereto as Exhibit "A" (the "Consent"). In order for the Consent to be valid with respect to a particular signatory, (i) the signatory must be a record stockholder of the Company as of the date of delivery of the first signed Consent to the Company, and (ii) the Consent must be signed and delivered to the Company within 60 days after the date of the first signed Consent. The Consent must be signed and returned to the Committee at 4949 River Point Road, Jacksonville, Florida 32207, on or before July 28, 1996. The Committee intends to deliver the signed Consents to the Company in one package once Consents representing a majority in voting interest of the Company have been received by the Committee. A stockholder who has signed the Consent and delivered it to the Committee may revoke the Consent by written notice delivered to the Company or the Committee at any time before the Committee has delivered to the Company Consents signed by a majority in voting interest of the stockholders of the Company (the "Effective Time"). In the event that, before the Effective Time, Company management solicits proxies and a stockholder decides to grant a proxy to management for the election of directors of the Company, the stockholder may, by such affirmative action, revoke his previously given Consent. This consent solicitation statement is first being mailed or otherwise delivered to selected Company stockholders on or about June 28, 1996. THE COMMITTEE This solicitation is made by the Committee. The members of the Committee are: Carl Shaifer, Joseph DeSaye, Max Scheuerer, Maureen and Lawrence Feeney, William and Evelyn Goatley, P.L. Anderson, Jr., Harold E. Hamburg, David F. Beckman, Mark and Barbara Raifman and Frank Harvey, all of whom are stockholders of the Company. The members of the Committee beneficially own the Company's common stock, par value $.01 per share (the "Common Stock") and the Company's Series C Preferred Stock, par value $.01 per share (the "Preferred Stock") as follows: NAME COMMON STOCK PREFERRED STOCK ---- ------------ --------------- Carl Shaifer 565,000 11.5 Joseph DeSaye 26,000 - Max Scheuerer 312,000 - Maureen and Lawrence 200,000 - Feeney William and Evelyn 134,600 7.5 Goatley P.L. Anderson, Jr. 601,000 3.5 Harold E. Hamburg 70,000 3.0 David F. Beckman 272,600 - Mark and Barbara 514,000 5.0 Raifman Frank Harvey 145,000 2.0 ========= ====== TOTAL 2,840,200 32.5 See "Stock Outstanding" below. SOLICITATION OF CONSENTS The entire expense of preparing, assembling, printing, mailing and/or faxing this information statement and the accompanying Consents and the cost of soliciting the Consents described herein will be borne by the Committee. The Committee estimates that its total expenditures relating to this solicitation will be $15,000. To date, the Committee has incurred approximately $10,000 of such expenses. The Committee will seek reimbursement from the Company for its expenses and will not request stockholder approval of such reimbursement. 2 The Consents will be solicited by mail, fax, personal solicitation, telephone or otherwise, by Carl Shaifer, other Committee members and The JansKen Group, Inc., a Florida business consulting corporation retained by the Committee ("JansKen"). The Committee has agreed to pay JansKen for its solicitation services a fee of $1,000 plus expenses. The Committee intends to solicit Consents until no later than July 28, 1996. NOMINEES FOR THE COMPANY'S BOARD OF DIRECTORS The Committee's nominees for director (the "Nominees") are listed below. Each of the Nominees has consented to be listed in this consent solicitation statement and to serve as a director if elected. The following information concerning age, principal occupation and directorships has been furnished to the Committee by the Nominees. CARL SHAIFER, age 64, is Chairman of Foxfire Printing, a division of MicroLeague Multimedia, Inc. ("MMI"), Philadelphia, Pennsylvania. He has been a director of MMI since 1989. He was previously a data processing sales representative with IBM from 1957 to 1960. In 1960, he joined the Winchell Company, a Philadelphia-based creative printing company ("Winchell"), as a sales representative. He was promoted to Assistant Treasurer of Winchell in 1964 and to Treasurer in 1968. In 1972, he became President of Winchell, a position he held until 1985 when that company was sold. He served as Chairman of Winchell from 1985 to 1994. Mr. Shaifer received his A.B. with honors from Princeton University and his MBA in marketing from the Wharton Graduate Division of the University of Pennsylvania. He has served as President of the Wharton Graduate Alumni Society. JOSEPH DESAYE, age 35, has been Vice President of Operations and a director of Fashion Marketing Inc. ("FMI"), Carteret, New Jersey, since 1981. FMI is a sales, marketing and management company which serves international ocean and air freight forwarders and provides management services for affiliated warehousing, distribution and trucking companies. Mr. DeSaye serves on the board of directors of certain affiliated companies: F.M.I. Trucking Inc. (since 1987), a local import and domestic transportation company serving Pennsylvania, New Jersey and Delaware; F.M.I. Express Corp. (since 1987), a line haul trucking company serving the Eastern Seaboard as well as the Southern tier states to California; and FMI International Corp. (since 1996), a warehousing and distribution company formed subsequent to the dissolution of a jointly held affiliate, DSL Atlantic Inc. MAX SCHEUERER. Since 1967, Mr. Scheuerer, age 54, has been the president, principal shareholder and chief executive officer of Village Bakery at Livingston, Inc., a retail bakery company in Livingston, New Jersey. Since 1970, he has been the president, principal shareholder and chief executive officer of Suburban Essex Realty Company in Livingston, New Jersey. He has been a licensed real estate broker in New Jersey since 1994. 3 STOCK OUTSTANDING To the knowledge of the Committee, the Company has 22,004,365 shares of Common Stock outstanding, and each share is entitled to one vote. In addition, to the knowledge of the Committee, the Company has outstanding 34 shares of Preferred Stock, which is entitled to 40,000 votes per share, for a total of 1,360,000 votes attributable to the Preferred Stock. The Common Stock and the Preferred Stock vote as a single class. The removal and replacement of the Company's Board of Directors sought pursuant hereto will require execution and delivery of the Consent by stockholders owning Common and/or Preferred Stock representing a majority in voting interest of the Common Stock and Preferred Stock, taken together. The Common Stock and Preferred Stock carry a total of 23,364,365 votes. Consequently, the Consent, in order to be effective, must be signed and delivered by stockholders owning Common and/or Preferred Stock with an aggregate of at least 11,682,183 votes. The members of the Committee beneficially own Common and Preferred Stock with an aggregate of 4,140,200 votes. REASONS FOR THE SOLICITATION The Committee is seeking execution and delivery of the Consent because it is extremely dissatisfied with the financial condition and results of operations of the Company under the current Board of Directors and believes that the Company's survival is in jeopardy. The Company's audited financial statements contained in its annual report on Form 10-KSB for the year ended December 31, 1995 (the "Financial Statements"), reflect annual losses of ($2,139,327), ($988,139) and ($686,323) for the years ended December 31, 1995, 1994 and 1993, respectively. The Financial Statements also reflect, as of December 31, 1995, an accumulated deficit of ($21,399,114), a working capital deficit of ($1,306,203), and a negative net worth of ($693,867). Finally, the auditors' opinion delivered with the Financial Statements states, among other things, that the Company has suffered recurring losses from operations, is in default on certain obligations and has a net working capital deficiency. These factors raise substantial doubt about the Company's ability to continue as a going concern. Further, to the knowledge of the Committee, the Company has never held any meetings of stockholders or any elections of directors since 1988, when it consummated its initial public offering of Common Stock. The current members of the Board of Directors have served as Directors since 1988 (John A. Boylan and Fred E. Portner) or 1992 (Ronald W. Martignoni). The Committee believes that its Nominees are qualified and capable businessmen who will act in the best interests of the stockholders and that the prospects for the Company's success will be much greater if the existing Board is replaced by the Nominees. The Nominees intend to immediately cut costs by drastically cutting executive compensation and making significant reductions in staff. In particular, the Nominees intend to 4 immediately terminate the employment of Messrs. Boylan (currently serving as Chairman of the Board) and Martignoni (currently serving as President and Chief Executive Officer). The Committee believes that Mr. Boylan currently receives a salary of approximately $117,000 per year plus various benefits, while Mr. Martignoni currently receives a salary of approximately $100,000 per year plus various benefits. These costs will be eliminated immediately upon removal of the current Board. The Nominees intend to retain Lorraine F. Cannon, currently Chief Financial Officer of the Company, as a non-officer employee of the Company on an interim basis pending a review of her position. The Nominees have not yet developed a specific plan for staff cutbacks; however, the Nominees intend to carefully review personnel costs immediately upon removal of the current Board and to take prompt action to cut those costs where appropriate. The Committee believes that the planned termination of Messrs. Boylan and Martignoni and the possible termination of Ms. Cannon will not require the Company to pay any severance or similar benefits to the terminated officers. See "Effects of Solicitation" below. The Nominees will provide the Company with appropriate executive management services on an interim basis without pay, until the Meeting (defined below). Mr. Shaifer will serve as Chairman and Chief Executive Officer, Mr. Scheuerer will serve as President and Chief Financial Officer, and Mr. DeSaye will serve as Vice President and Secretary. The Nominees will not receive any compensation for their services as directors of the Company. Promptly upon removal of the existing Board, the Nominees will call an annual meeting of the Company's stockholders, to be held within four months after such removal, for the purpose of electing a new Board of Directors and transacting other appropriate business (the "Meeting"). The Nominees do not know whether or not they will seek election as directors at the Meeting. The new Board elected at the Meeting will elect officers of the Company and set their compensation and may, if it deems appropriate and if the Company has available funds, cause the Company to compensate the Nominees for their services as officers of the Company prior to the Meeting (the "Interim Services"). The Nominees will not seek nor accept compensation for the Interim Services in excess of an aggregate annual rate of $108,500 (50% of the aggregate current salaries of Messrs. Boylan and Martignoni). Thus, for example, if the Nominees serve as officers during a four-month interim period and the Board elected at the Meeting decides to cause the Company to compensate them for such services, such compensation to the Nominees will not exceed an aggregate of $36,167 for all of the Nominees combined. The Committee believes that the Nominees' business experience makes them well-qualified to serve on the Company's Board of Directors at this time. Mr. Shaifer's long and distinguished career includes extensive experience as a chief executive officer. Mr. DeSaye is a well-experienced operations officer. Mr. Scheuerer has built and managed a successful retail enterprise. The Committee believes that the Company needs chief executive, operations and retail management expertise and that the Nominees are well-qualified to provide this expertise. The Nominees will devote extensive efforts to increasing revenues at the Company's stores and will actively seek business combinations with other companies and investors which would be advantageous to the Company. 5 EFFECTS OF THE SOLICITATION Messrs. Boylan and Martignoni and Ms. Cannon have severance agreements with the Company, entered into in 1992 and amended in 1994, which, in essence, provide for payment to them of lump sum severance compensation equal to two years' (Boylan and Martignoni) or one year's (Cannon) salary in the event that their employment is terminated upon a "Change in Control" (as defined in the severance agreements). The Committee believes that the severance agreements are inapplicable to the proposed termination of the Company's current officers because the applicable definition of "Change in Control" does not include the simple removal and replacement of the Company's Board by shareholder action, as contemplated by the Committee. Further, the Committee believes that, even if the contemplated shareholder action constitutes a "Change in Control" under the severance agreements, such agreements would be unenforceable because they were approved by a Board of Directors which had not been properly elected in accordance with Delaware law due to the lack of any stockholder meeting since 1988. Notwithstanding the foregoing, there can be no assurance that Mr. Boylan, Mr. Martignoni or Ms. Cannon will not claim an entitlement to payment under the severance agreements or that any such claims will not be successful. Except for the severance agreements described above, the Committee is unaware of any agreements or other circumstances which might cause any material liability on the part of the Company as a result of the proposed removal of the current Board of Directors and termination of the current officers of the Company. THE COMMITTEE FOR MAXIMIZING CHOICES STOCKHOLDER VALUE 6 THIS CONSENT IS BEING SOLICITED ON BEHALF OF THE COMMITTEE FOR MAXIMIZING CHOICES STOCKHOLDER VALUE YOU MAY WITHHOLD AUTHORITY TO ELECT ANY OF THE THREE NOMINEES LISTED IN THE SECOND RESOLUTION BELOW BY LINING THROUGH OR OTHERWISE STRIKING OUT THE NAME OF SUCH NOMINEE ACTION OF THE STOCKHOLDERS OF CHOICES ENTERTAINMENT CORPORATION BY WRITTEN CONSENT The undersigned stockholders of Choices Entertainment Corporation, a Delaware corporation (the "Company"), hereby consent in writing, without a meeting, to the following action pursuant to Section 228 of the Delaware General Corporation Law: RESOLVED, that John A. Boylan, Ronald W. Martignoni and Fred E. Portner are removed from the Board of Directors of the Company effective immediately. FURTHER RESOLVED, that Carl Shaifer, Joseph DeSaye and Max Scheuerer are hereby elected to the Board of Directors of the Company to serve until the next annual meeting of shareholders or until their respective successors are duly elected and qualified. NO. OF NAME SHARES DATE ---- ------ ---- - - - ------------------------- ---------- --------------------- Print Name:______________ - - - ------------------------- ---------- --------------------- Print Name:______________ - - - ------------------------- ---------- --------------------- Print Name:______________ - - - ------------------------- ---------- --------------------- Print Name:______________ - - - ------------------------- ---------- --------------------- Print Name:______________ - - - ------------------------- ---------- --------------------- Print Name:______________ - - - ------------------------- ---------- --------------------- Print Name:______________ EXHIBIT "A" -----END PRIVACY-ENHANCED MESSAGE-----