<PAGE>
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 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
MPEL HOLDINGS CORP
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(4) 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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Notes:
Reg. (S) 240.14a-101
SEC 1913 (3-99)
<PAGE>
MPEL HOLDINGS CORP.
December 21, 1999
Dear Stockholder:
We invite you to attend our annual meeting of stockholders on Monday,
January 10, 2000, at 10:00 a.m., at our offices at 25 Melville Park Road,
Melville, New York 11747 or at any adjournment or postponement thereof.
This booklet includes the formal notice of the meeting and the proxy
statement. The proxy statement tells you about the agenda and procedures for
the meeting. In addition to specific agenda items, we will discuss generally
the operations of MPEL. We welcome your comments, and hope you will join us.
Whether or not you plan to attend in person, it is important that your
shares be represented at the annual meeting. MPEL's Board recommends that
stockholders vote FOR each of the matters described in the proxy statement to be
presented at the annual meeting.
PLEASE DATE AND SIGN YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE
AS SOON AS POSSIBLE.
Thank you.
Sincerely,
Steven M. Latessa
President
<PAGE>
MPEL HOLDINGS CORP.
25 Melville Park Road
Melville, New York 11747
(a New York Corporation)
NOTICE OF 1999 ANNUAL
MEETING OF STOCKHOLDERS TO BE
HELD AT 10:00 A.M. ON JANUARY 10, 2000
The annual meeting of stockholders of MPEL HOLDINGS CORP. will be held on
January 10, 2000 at 10:00 A.M. at our offices at 25 Melville, Park Road,
Melville, New York 11747, for the following purposes:
1. To elect three (3) directors to serve until the expiration of their one
(1) year terms and until their successors shall have been duly elected
and qualified ;
2. To consider and act upon a proposal to amend MPEL's Certificate of
Incorporation to increase and authorized shares of common stock from
15,000,000 to 100,000,000;
3. To consider and act upon a proposal to amend MPEL's Certificate of
Incorporation to authorize 10,000,000 shares of Preferred Stock;
4. To possibly amend the Certificate of Incorporation to effect a reverse
stock split of MPEL's common stock;
5. To amend MPEL's 1995 Stock Option Plan to increase the number of shares
available for issuance from 700,000 to 5,000,000;
6. To ratify the selection of Richard A. Eisner and Company, LLC as MPEL's
independent auditors for the fiscal year ending December 31, 1999; and
7. To transact such other business as may properly come before the annual
meeting.
IMPORTANT
Whether or not you expect to attend in person, we urge you to sign, date
and return the enclosed proxy at your earliest convenience. This will ensure
the presence of a quorum at the meeting. Promptly signing, dating, and
returning the proxy will save MPEL Holdings the expense and extra work of
additional solicitation. An addressed envelope for which no postage is required
if mailed in the United States is enclosed for that purpose. Sending in your
proxy will not prevent you from voting your stock at the meeting if you desire
to do so, as your proxy is revocable at your option.
By Order of the Board of Directors
Cary Wolen, Secretary
Date: December 21, 1999
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MPEL HOLDINGS CORP.
_______________________
25 Melville Park Road
Melville, New York 11747
_______________________
PROXY STATEMENT
___________________________
1999 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AT 10:00 A.M. ON JANUARY 10, 2000
The Board of Directors of MPEL Holdings Corp. ("MPEL," "we" or "us") is
soliciting proxies to be voted at the annual meeting of stockholders to be held
on Monday, January 10, 2000, and at any adjournment or postponement of the
annual meeting.
This proxy statement and the accompanying proxy are first being sent to
stockholders entitled to vote at the annual meeting on or about December 22,
1999. MPEL's principal executive offices are located at 25 Melville Park Road,
Melville, New York 11747, telephone number (516) 364-2700.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Purpose of the Annual Meeting
The specific proposals to be considered and acted upon at the annual
meeting are summarized in the accompanying Notice of Annual Meeting of
Stockholders. Each proposal is described in more detail in this proxy
statement.
Record Date and Shares Outstanding
Only stockholders of record at the close of business on November 29,
1999, the record date, are entitled to notice of and to vote at the annual
meeting. At the record date, 15,000,000 shares of common stock were issued and
outstanding. The closing price of our common stock on November 29, 1999, the
record date, was $.81 per share.
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Revocability and Voting of Proxies
Any person signing a proxy in the form accompanying this proxy statement
has the power to revoke it prior to the annual meeting or at the annual meeting
prior to the vote pursuant to the proxy. A proxy may be revoked by any of the
following methods:
. by writing a letter delivered to Cary Wolen, Secretary of MPEL,
stating that the proxy is revoked;
. by submitting another proxy with a later date;
. by attending the annual meeting and voting in person.
Please note, however, that if a stockholder's shares are held of record by
a broker, bank or other nominee and that stockholder wishes to vote at the
annual meeting, the stockholder must bring to the annual meeting a letter from
the broker, bank or other nominee confirming that stockholder's beneficial
ownership of the shares. Shares of common stock represented by properly
executed proxies will be voted at the annual meeting in accordance with the
instructions indicated on the proxies, unless the proxies have been revoked.
If you return a signed and dated proxy card but do not indicate how
you want your shares to be voted, those shares represented by your proxy will be
voted as recommended by MPEL's Board.
List of Stockholders
A list of stockholders entitled to vote at the annual meeting will be
available at the annual meeting and for ten days prior to the annual meeting
during regular business hours at our offices at 25 Melville Park Road, Melville,
New York 11747, by contacting the Secretary of MPEL.
Voting at the Annual Meeting
Each share of common stock outstanding on the record date will be
entitled to one (1) vote on each matter submitted to a vote of the stockholders,
including the election of directors. Cumulative voting by stockholders is not
permitted.
The presence, in person or by proxy, of the holders of a majority of
the votes entitled to be case by the stockholders entitled to vote at the annual
meeting is necessary to constitute a quorum. Abstentions and broker "non-votes"
are counted as present and entitled to vote for purposes of determining a
quorum. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee does
not have discretionary voting power for that particular item and has not
received instructions from the beneficial owner.
A plurality of the votes is required for the election of directors;
abstentions and broker "non-votes" are not counted for purpose of the election
of directors.
The amendments to increase the authorized shares from 15,000,000 to
100,000,000 and to authorize 10,000,000 preferred shares must be approved by the
affirmative vote of a majority of the shares of MPEL common stock entitled to
vote at the annual meeting. This means that if you do not vote your shares in
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connection with the amendment proposal, your failure to vote will have the same
effect as voting for the amendment proposal.
The proposal to amend the 1995 Stock Option Plan, to ratify the
appointment of auditors, and any stockholder proposal presented at the meeting
must receive an affirmative vote of a majority of the votes case.
Solicitation
We will pay the costs relating to this proxy statement, the proxy and
the annual meeting. We may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation material to beneficial owners. Directors, officers and regular
employees may also solicit proxies. They will not receive any additional pay
for the solicitation.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of November 22, 1999, information
with respect to the beneficial ownership of MPEL common stock as of the date of
this document by:
. each director, nominee for director and executive officer of MPEL,
. each person known by MPEL to beneficially own greater than five (5%)
percent of the outstanding common stock,
. the directors and executive officers as a group.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Owner/1/ Percentage
- ----------------------------------- -------------------- -----------
<S> <C> <C>
Cary Wolen/2/ /3/ /4/ 2,553,500 17%
Steven M. Latessa/2/ /3/ /4/ 2,553,500 17%
Estate of Anthony Saffiotti 1,200,000 8%
c/o Karen Saffiotti
63 Amherst Road
Albertson, New York 11507
Michael Moran (Nominee) -0- 0%
Directors and officers as a group 5,107,000 34%
</TABLE>
__________________________
/1/ This information is reported in accordance with the beneficial ownership
rules of the United States Securities and Exchange Commission (the "SEC"),
under which a person is deemed to be the beneficial owner of a security if
that person has or shares the voting power or investment power with respect
to such security or has the right to acquire such ownership within sixty
(60) days.
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Unless otherwise indicated in footnotes to the table, each person listed has
sole voting and dispositive power with respect to the securities owned by
such person.
/2/ The business addresses for each of the persons listed above is 25 Melville
Park Road, Melville, New York 11747.
/3/ Does not include 693,000 shares which were previously owned by Jon P. Blasi
and Lydia Blasi which were redeemed by the Company pursuant to an agreement
dated February 24, 1999.
/4/ Includes beneficial ownership of 420,220 shares owned by the WLB general
partnership.
Proposal 1: ELECTION OF DIRECTORS
MPEL's Board of Directors presently consists of two (2) members, with
the term of office of the two (2) current directors scheduled to expire at this
meeting. In November, 1999, the MPEL Board approved, subject to shareholder
approval, the addition of one member to the Board, thereby increasing the Board
to three (3) members. At each annual meeting, directors are elected to succeed
the directors whose term expires at that annual meeting, the newly elected
directors to hold office until the next annual meeting and the election and
qualification of their respective successors.
All directors are to be elected as directors by a plurality of the votes
cast at the annual meeting. Each director elected will hold office until next
year's annual meeting and until the election and qualification of his successor.
The persons named in the accompanying proxy have advised management that it is
their intention to vote for the election of directors set forth in this proxy.
Each of the nominees for election as a director has advised the Company of
his willingness to serve as a director and management believes that each nominee
will be able to serve. If any nominees becomes unavailable, proxies may be
voted for the election of such person or persons who may be designated by MPEL.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE ELECTION OF
STEVEN M. LATESSA, CARY WOLEN and michael Moran AS DIRECTORS.
Information Regarding Directors and Nominee for Director
The following table sets forth certain information with respect to the
nominees for the election of directors:
<TABLE>
<CAPTION>
Year Term Expires
Name Position if Elected
- ------------------------- ----------------------------------------------- -----------------
<S> <C> <C>
Steven M. Latessa President, Chief Executive Officer 2000
and Director
Cary Wolen Chief Operating Officer, Secretary, 2000
Chief Financial Officer, Treasurer and Director
Michael Moran (Nominee) Senior Vice President 2000
</TABLE>
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Steven M. Latessa co-founded MPEL in 1987 and has been its Chief Executive
Officer, President and Chairman of the Board of Directors since inception.
Cary Wolen co-founded MPEL in 1987 and has been its Chief Operating Officer,
Chief Financial Officer and Director since inception.
Michael Moran has been with the Company since 1995 in the capacity of Senior
Vice President.
Information Regarding Executive Officers
All executive officers of MPEL are also directors or nominee for director.
Executive officers of MPEL are elected annually by the Board and serve
until their successors are duly elected and qualified. There are no family
relationships between any of the directors, executive officers or persons
nominated or chosen by MPEL to become directors or executive officers.
MPEL carries insurance providing for indemnification, under specified
circumstances, to all of its directors and officers for claims against them by
reason of, among other things, any act or failure to act in their capacities as
directors or officers. No sums have been paid to any past or present director
or officer of MPEL under this or any other prior indemnification insurance
policy.
Committees of the Board of Directors
MPEL's Board does not have a nominating, compensation or audit committee,
however, the Board expects to establish an Audit Committee in the near future.
The Audit Committee will make annual recommendations to the Board of Directors
concerning the appointment of the independent public accountants of MPEL and
will review the results and scope of the audit and other services provided by
MPEL's independent auditors. MPEL expects that a majority of the members of the
Audit Committee will be independent directors.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires officers
and directors and persons who own more than ten percent of a registered class of
MPEL's equity securities to file reports of ownership and changes in ownership
with the Securities and Exchange Commission and to furnish MPEL with copies of
these reports. Based solely on MPEL's review of the copies of such forms
received by it during its fiscal year ended December 31, 1998, MPEL believes
that the persons required to file the reports have complied with the applicable
filing requirements.
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Director Compensation
Directors who are employees of MPEL receive no compensation, as such, for
services as members of the Board. It is expected that directors who are not
employees of MPEL will receive options to purchase 50,000 shares of Common Stock
for each year served on the Board and reimbursement of expenses incurred in
connection with attending such meetings.
Executives' Compensation
The following table shows all the cash and other compensation paid or to be
paid by MPEL, as well as certain other compensation paid or accrued, during the
last three fiscal years indicated, to the Chief Executive Officer and the other
most highly compensated executive officers whose aggregate cash compensation
exceeds $100,000.
<TABLE>
<CAPTION>
Annual Compensation
Name and Principal Position Year Salary($) Bonus($)
- ------------------------------------------- -------- --------- ---------
<S> <C> <C> <C>
Steven M. Latessa 1998 $130,000 -0-
Chief Executive Officer, President 1997 $130,000 $15,000
1996 $130,000 $10,000
Cary Wolen 1998 $132,080 -0-
Chief Operating Officer, Secretary, 1997 $132,080 $10,000
Chief Financial Officer, Treasurer 1996 $132,080 $5,000
Michael Moran, Senior Vice President 1998 $138,456 -0-
1997 $102,954 -0-
1996 $76,896 -0-
</TABLE>
Employment Agreements
MPEL entered into employment agreements with Steven M. Latessa (CEO) and
Cary Wolen (CFO) in September, 1997, which expire on September 30, 2000 and
provide for the following:
. a base salary of $150,000 per year;
. a 4% per year increase in base salary commencing in 1998;
. eligibility to split a bonus pool aggregating 5% of all pre-tax
income of MPEL;
. an automatic renewal for three years;
. a two year non-competition provision from date of termination;
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. in the event the employee is terminated without cause, MPEL will
continue to pay the employee's base salary for the greater of the
remainder of the term of the contract or one year;
. non-disclosure and confidentiality of MPEL's confidential
information; and
. non-interference with MPEL's customers or employees for two years.
Equity Incentive Plan
On December 31, 1995, the MPEL Board approved the 1995 Stock Option
Plan (the "Plan") and, as amended, authorized the issuance of up to 700,000
shares of Common Stock of the Company upon the exercise of incentive stock
option ("Incentive Option") which may be granted for a maximum of 10 years
pursuant to this Plan. The Plan provides primarily for the granting of
Incentive Options to certain key employees and exercise prices at not less than
the estimated fair market value at the date of grant. Under the Plan, common
stock may be issued to employees in the form of stock options, appreciation
rights, performance shares, or other forms of equity-based awards. The purpose
of the Plan is to provide long-term incentive to employees and for them to
participate in the long-term growth and success of the business. As of the date
hereof, Incentive Options to purchase an aggregate of 700,000 shares have been
granted under the Plan with an exercise price range of $0.23 to $0.56 per share.
Currently, there are no Incentive Options or other awards outstanding to any of
MPEL's executive officers under the Plan.
In 1998, 175,000 options were canceled under this Plan. In addition,
the remaining 95,000 options were repriced on December 2, 1998 to $0.56 per
share, the fair market value of the common stock on the close of business of
that date.
In the event Proposal 3 of this booklet is approved, we shall increase
the number of shares available for issuance from 700,000 to 5,000,000.
Certain Relationships and Related Transactions
In February 1999, MPEL entered into an agreement with Jon Blasi, a
former employee of MPEL and a former partner in WLB, and his spouse, Lydia
Blasi. The Blasis agreed to exchange 693,000 shares of MPEL's common stock and
to cancel options to acquire 252,276 shares from Cary Wolen and Steven Latessa
in exchange for cancellation of certain obligations due to MPEL from the Blasis.
In connection with this transaction, Jon Blasi also resigned as a general
partner of WLB.
The Company subleases certain of its offices from The Mattituck Group,
an affiliate. The lease expenses paid were approximately $148,000 and $158,000
for the years ended December 31, 1998 and 1997, respectively. MPEL pays rent to
the affiliate based on its proportionate share of the offices it rents.
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Proposal 2: AMENDMENT TO MPEL'S CERTIFICATE OF INCORPORATION
TO INCREASE THE AUTHORIZED SHARES
The MPEL Board has approved an amendment to our Certificate of
Incorporation to increase from 15,000,000 to 100,000,000 the number of
authorized shares of MPEL common stock.
We currently are authorized to issue 15,000,000 shares of common
stock. As of the record date, 15,000,000 shares of common stock were issued,
outstanding and entitled to vote. There currently exists -0- shares of common
stock available to MPEL for future issuance, which means that we have limited
ability to issue additional shares of common stock for corporate purposes.
The amendment to the Certificate of Incorporation would increase our
authorized shares of common stock to 100,000,000 shares, which would mean that
we would have 85,000,000 shares of common stock not currently reserved for
issuance and available for future issuance. Such amount would be approximately
85% of the then outstanding or reserved for issuance shares. For comparison
purposes, we do not have any authorized but unissued and unreserved shares of
common stock.
It is important we preserve our flexibility to issue additional shares
of common stock. The Board believes that the authorization of additional shares
of common stock is advisable to provide us with the flexibility to take
advantage of opportunities to issue such stock in order to obtain capital, as
consideration for possible acquisitions or for other purposes including, without
limitation, the issuance of additional shares of common stock through stock
splits and stock dividends in appropriate circumstances. There are, at present,
no plans, understandings, agreements or arrangements concerning the issuance of
additional shares of common stock, except for the shares to be issued upon the
exercise of the MPEL's stock options, warrants or other convertible securities,
currently outstanding.
Uncommitted authorized but unissued shares of common stock may be
issued from time to time to such persons and for such consideration as the Board
may determine. Holders of the then outstanding shares of common stock may or
may not be given the opportunity to vote thereon, depending upon the nature of
any such transactions, applicable law, the rules and policies of the Over the
Counter Bulletin Board, as the case may be, and the judgment of the Board
regarding the submission of such issuance to a vote of our stockholders. Our
stockholders have no preemptive rights to subscribe to newly issued shares.
Moreover, it is possible that additional shares of common stock would
be issued under circumstances which would make the acquisition of a controlling
interest in MPEL more difficult, time-consuming, costly or otherwise discourage
an attempt to acquire control of MPEL. Under such circumstances the
availability of authorized and unissued shares of common stock may make it more
difficult for stockholders to obtain a premium for their shares. Such
authorized and unissued shares could be used to create voting or other
impediments or to frustrate a person seeking to obtain control of MPEL by means
of a merger, tender offer, proxy contest or other means. Such shares could be
privately placed with purchasers who might cooperate with the board in opposing
such an attempt by a third party to gain control of MPEL or could also be used
to dilute ownership of a person or entity seeking to obtain control of MPEL.
Although MPEL does not currently contemplate taking such action, shares of
common stock could be issued for the purposes and effects described above and
the Board reserves its rights to issue such stock for such purposes.
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The authorization of additional shares of common stock pursuant to
this proposal will have no dilutive effect upon the proportionate voting power
of the present MPEL stockholders. However, to the extent that shares are
subsequently issued to persons other than the present MPEL stockholders, such
issuance could have a dilutive effect on the earnings per share and voting power
of present stockholders. If such dilutive effect on earnings per share occurs,
MPEL expects that any such dilutive effect would be relatively short in
duration.
As described above, MPEL believes that the proposed increase in the
number of authorize shares of common stock will provide the flexibility needed
to meet corporate objectives and is in the best interest of MPEL and its
stockholders.
Stockholder Vote
The affirmative vote of a majority of the votes entitled to vote at
the annual meeting is required to adopt the amendment to our Certificate of
Incorporation.
THE MPEL BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE AMENDMENT TO OUR
CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES TO 100,000,000.
Proposal 3: AUTHORIZE PREFERRED STOCK
MPEL's Certificate of Incorporation does not currently provide that
MPEL is authorized to issue preferred stock. In November, 1999, the MPEL Board
approved, subject to shareholder approval, an amendment to MPEL's Certificate of
Incorporation to authorize 10,000,000 shares of preferred stock. The rights and
privileges of the preferred stock, if approved, shall be in the sole discretion
of the MPEL Board (within the limits of applicable law).
The principal purpose of this proposed amendment is to authorize
shares of preferred stock which will be available in the event the MPEL Board
determines that it is necessary or appropriate to raise additional capital
through the sale of securities, to acquire another company or its business or
assets, to seek to establish a strategic relationship with a corporate partner
or to permit a future stock dividend or stock split. The MPEL Board has no
present agreement or arrangement to issue any such shares, if approved. If the
amendment is approved by the stockholders, the MPEL Board does not intend to
solicit further stockholder approval prior to the issuance of any additional
shares of preferred stock, except as may be required by applicable law.
The authorized number of shares of preferred stock and the subsequent
issuance of such shares could have the effect of delaying or preventing a change
in control of MPEL without further action by the stockholders. Shares of
authorized and unissued preferred stock could (within the limits imposed by
applicable law) be issued in one or more transactions which would make a change
in control of MPEL more difficult and, therefore, less likely. Any such
issuance of additional stock could have the effect of diluting the earnings per
share and book value per share of outstanding shares of preferred stock, and
such additional shares could be used to dilute the stockownership or voting
rights of persons seeking to obtain control of MPEL.
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Stockholder Vote
The affirmative vote of a majority of the votes entitled to vote at
the annual meeting is required to adopt the amendment to our Certificate of
Incorporation.
THE MPEL BOARD RECOMMENDS YOU VOTE "FOR" THE AMENDMENT TO OUR CERTIFICATE OF
INCORPORATION TO AUTHORIZE 10,000,000 PREFERRED SHARES
Proposal 4: POSSIBLE AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO EFFECT A
REVERSE STOCK SPLIT OF MPEL'S COMMON STOCK
General
The Board of Directors of MPEL has unanimously adopted a resolution
approving, and recommending to MPEL's stockholders for their approval, a
discretionary amendment to our Certificate of Incorporation authorizing a
reverse stock split of the shares of common stock of MPEL, the terms of which
shall be in the discretion of the MPEL Board (the "Reverse Stock Split"). The
Reverse Stock Split, if effected by the MPEL board, will decrease the shares of
common stock of the Company issued and outstanding, or held as treasury shares,
and will correspondingly increase the par value of the common stock, but will
not change the number of authorized shares of common stock.
Reasons for the Reverse Stock Split Amendment
Our common stock is currently listed on the OTC Bulletin Board (the
"Bulletin Board"). Listing on the Nasdaq SmallCap Market system (the "Nasdaq
SmallCap Market") requires, among other things, that the common stock have a
closing bid price of $4.00 per share. As of the date of this proxy statement,
MPEL is not in compliance with this requirement.
The Board of Directors has determined that the listing of the common
stock on the Nasdaq SmallCap Market is in the best interests of the
stockholders. If the common stock was listed on the Nasdaq SmallCap Market,
MPEL's Board believes that the liquidity of the trading market in the common
stock would be significantly increased, which could increase the trading price
and decrease the transaction costs of trading shares of the common stock.
The Board of Directors has been advised by various investment bankers
that listing on the Nasdaq SmallCap Market will greatly increase our ability to
raise capital. If the Reverse Stock Split is approved by the stockholders and
thereafter effected, the bid price of the common stock will likely increase
substantially over the $.81 current bid price thereby permitting us to apply for
listing on the Nasdaq SmallCap Market. There can be no assurance, however, that
the market price of the common stock will rise in proportion to the reduction in
the number of outstanding shares resulting from the Reverse Stock Split, or that
the market price of the post-split common stock will increase.
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Potential Effects of the Reverse Stock Split
Pursuant to the Reverse Stock Split, each holder of shares of common
stock, par value $.01 per share, immediately prior to the effectiveness of the
Reverse Stock Split would become the holder of a reduced number of common stock
in the MPEL's Board's discretion, after consummation of the Reverse Stock Split.
Although the Reverse Stock Split will not, by itself, impact MPEL's
assets or prospects, the Reverse Stock Split could result in a decrease in the
aggregate market value of MPEL's equity capital. The Board of Directors
believes that this risk is outweighed by the benefits of the possible listing of
the common stock on the Nasdaq SmallCap Market.
If approved, the Reverse Stock Split, if effected, may result in some
shareholders owning "odd-lots" of less than one hundred (100) shares of common
stock. Brokerage commissions and other costs of transactions in odd-lots are
generally somewhat higher than the costs of transactions in "round-lots" of even
multiples of one hundred (100) shares.
Increase of Shares of Common Stock Available for Future Issuance
As a result of the Reverse Stock Split, there will be a reduction in
the number of shares of common stock issued and outstanding, or held as treasury
shares, and an associated increase in the number of authorized shares which
would be unissued and available for future issuance after the Reverse Stock
Split (the "Increased Available Shares"). The Increased Available Shares could
be used for any proper corporate purpose approved by the Board of Directors of
MPEL including, among others, future financing transactions.
Because the Reverse Stock Split will create the Increased Available
Shares, the Reverse Stock Split may be construed as having an anti-takeover
effect. Although neither the Board of Directors nor the management of MPEL
views the Reverse Stock Split as an anti-takeover measure, MPEL could use the
Increased Available Shares to frustrate persons seeking to effect a takeover or
otherwise gain control of MPEL.
Effectiveness of the Reverse Stock Split
The Reverse Stock Split, if approved by MPEL's stockholders, would
become effective upon the filing with the Secretary of State of the State of New
York of a Certificate of Amendment of MPEL's Certificate of Incorporation. The
Board has not determined when, or if, this event will occur, or the specific
terms of the Reverse Stock Split. The Board is asking shareholders to approve
the Reverse Stock Split on the terms and conditions to be determined by the MPEL
Board. The exact timing of the filing of such Certificate of Amendment will be
determined by the Board of Directors based upon its evaluation as to when such
action will be most advantageous to MPEL and its stockholders, and the Board of
Directors reserves the right to delay the Reverse Stock Split Amendment for up
to twelve (12) months following stockholder approval thereof. In addition, The
Board of Directors reserves the right, notwithstanding stockholder approval and
without further action by the stockholders, to elect not to proceed with the
Reverse Stock Split Amendment if, at any time prior to filing such Reverse Stock
Split Amendment, the Board of Directors, in its sole discretion, determines that
it is no longer in the best interests of MPEL and its stockholders.
Commencing on the day the Certificate of Amendment is filed, each
common stock certificate will be deemed for all corporate purposes to evidence
ownership of the reduced number of shares of common stock
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resulting from the Reverse Stock Split and any cash which may be payable in lieu
of fractional shares. As soon as practicable after the day of filing,
stockholders will be notified as to the effectiveness of the Reverse Stock Split
and instructed as to how and when to surrender their certificates representing
shares of old common stock in exchange for certificates representing shares of
new common stock (and, if applicable, cash in lieu of fractional shares). We
intend to use Securities Transfer Corporation as our exchange agent in effecting
the exchange of certificates following the effectiveness of the Reverse Stock
Split.
Fractional Shares
MPEL does not intend to issue fractional shares in connection with the
Reverse Stock Split. Instead, holders of old common stock who would otherwise
be entitled to receive a fractional share of new common stock on account of the
Reverse Stock Split shall receive, upon surrender of the stock certificates
formerly representing shares of the old common stock, in lieu of such fractional
shares, an amount in cash (the "Cash-in-Lieu Amount") equal to the product of
(i) the fractional shares which a holder would otherwise be entitled to,
multiplied by (ii) the average of the closing bid and closing asked price per
share of the old common stock as quoted on the Bulletin Board, or, if the old
common stock is not then traded on the Bulletin Board, such price as MPEL's
Board of Directors determines, in its discretion, to be the fair market value
per share of the old common stock on the business day prior to the day of
filing. No interest shall be payable on the Cash-in-Lieu Amount.
Certain Federal Income Tax Consequences
The following discussion summarizing certain federal income tax
consequences is based on the Internal Revenue Code of 1986, as amended, the
applicable Treasury Regulations promulgated thereunder, judicial authority and
current administrative rulings and practices in effect on the date of this proxy
statement. This discussion is for general information only and does not discuss
consequences which may apply to special classes of taxpayers (e.g., non-resident
aliens, broker-dealers or insurance companies). Stockholders are urged to
consult their own tax advisors to determine the particular consequences to them.
The receipt of new common stock solely in exchange for old common
stock will not generally result in recognition of gain or loss to the
stockholders. The adjusted tax basis of a stockholder's new common stock will
be the same as the adjusted tax basis of the shares of old common stock
exchanged therefor, and the holding period of the new common stock will include
the holding period of the old common stock exchanged therefor. Generally,
stockholders who receive cash in lieu of fractional shares will be treated as if
they had received such fractional shares and then sold them to MPEL, and such
stockholders will recognize gain or loss equal to the difference between the
amount of cash received and their basis in the common stock exchanged. No gain
or loss will be recognized by MPEL as a result of the Reverse Stock Split.
Appraisal Rights
No appraisal rights are available under the New York Business
Corporation Law or under our certificate of incorporation or by-laws to any
stockholder who dissents form the proposal to approve the Reverse Stock Split
Amendment. There may exist other rights or actions under state law for
stockholders who are aggrieved by reverse stock splits generally. Although the
nature and extent of such rights or actions are uncertain and may vary depending
upon the facts or circumstances, stockholder challenges to corporate
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<PAGE>
action in general are related to the fiduciary responsibilities of corporate
officers and directors and to the fairness of corporate transactions.
MPEL'S BOARD OF DIRECTORS RECOMMENTS A VOTE "FOR" THE PROPOSAL TO GRANT THE MPEL
BOARD THE ABILITY TO AMEND MPEL'S CERTIFICATE OF INCORPORATION IN ORDER TO
EFFECT A REVERSE STOCK SPLIT OF THE SHARES OF COMMON STOCK OF MPEL ISSUED AND
OUTSTANDING, OR HELD AS TREASURY SHARES, IN THE DISCRETION OF THE MPEL BOARD.
Proposal 5: AMENDMENT TO MPEL'S 1995 STOCK OPTION PLAN
Our Board of Directors and stockholders have previously adopted and
approved the Company's 1995 Stock Option Plan (the "Plan"). A total of 700,000
shares of common stock are presently reserved for issuance under the Plan. In
November, 1999, the Board of Directors approved an amendment to the Plan,
subject to stockholder approval, to increase the shares reserved for issuance
thereunder by 4,300,000 shares, bringing the total number of shares issuable
under the Plan to 5,000,000.
As of the date hereof, -0- shares were available for future
issuance under the Plan.
At this annual meeting, the stockholders are being requested to
consider and approve the proposed amendment to the Plan to increase the number
of shares of Common Stock reserved for issuance thereunder by 4,300,000 shares,
bringing the total number of shares issuable under the Plan to 5,000,000. The
Board believes that the amendment will enable the Company to continue its policy
of widespread employee stockownership as a means to motivate high levels of
performance and to recognize key employee accomplishments.
Vote Required; Recommendation of Board of Directors
The approval of the amendment to the Plan requires the affirmative
vote of a majority of the votes cast on the proposal at the annual meeting.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS VOTING "FOR" THE
AMENDMENT OF THE PLAN TO INCREASE THE NUMBER OF SHARES RESERVED FOR ISSUANCE
THEREUNDER.
Proposal 6: SELECTION OF AUDITORS
The MPEL Board recommends that the stockholders ratify the selection
of Richard A. Eisner and Company, LLP, independent auditors, which served as
MPEL's independent auditors to audit MPEL's consolidated financial statements
for the fiscal year ending December 31, 1999. A representative of Richard A.
Eisner & Company, LLP is expected to be present at the annual meeting and will
be given the opportunity to make a statement and to answer any questions a
stockholder may have with respect to the consolidated financial statements of
MPEL for the year ended December 31, 1998.
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THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE
SELECTION OF RICHARD A. EISNER & COMPANY, LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999
Proposal 7: OTHER MATTERS
MPEL's Board has no knowledge of any other matters which may come
before the annual meeting and does not intend to present any other matters.
However, if any other matters shall properly come before the annual meeting or
any adjournment thereof, the persons named as proxies will have discretionary
authority to vote the shares of common stock represented by the accompanying
proxy in accordance with their best judgment.
Shareholder Proposals
Any shareholder of MPEL who wishes to present a proposal to be
considered at the next annual meeting of shareholders of the Company and who
wishes to have such proposal presented in the Company's proxy statement for such
annual meeting must deliver such proposal in writing to the Company at 25
Melville Park Road, Melville, New York 11747, on or before September 1, 2000.
In order to curtail controversy as to the date on which the proposal was
received by MPEL, it is suggested that proponents submit their proposals by
certified mail, return receipt requested.
By order of the Board of Directors
Cary Wolen, Secretary
MPEL will furnish without charge to each person whose proxy is being
solicited by this proxy statement, on the written request of such person, a copy
of MPEL's Annual Report on Form 10-K for its fiscal year ended December 31,
1998. Such request should be addressed to MPEL HOLDINGS CORP., Investor
Relations, 25 Melville Park Road, Melville, New York 11747.
Dated: December 21, 1999
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MPEL HOLDINGS CORPRRRRMPEL HOLDINGS CORP.
25 Melville Park Road
Melville, New York 11747
This Proxy is Solicited on Behalf of the Board of Directors.
The undersigned, revoking all previous proxies, hereby appoints Steven M.
Latessa and Cary Wolen, and each of them, proxies with power of substitution to
each, for an in the name of the undersigned to vote all shares of Common Stock
of MPEL HOLDINGS CORP. (the "Company"), held of record by the undersigned on
November 29, 1999 which the undersigned would be entitled to vote if present at
the Annual Meeting of Shareholders of the Company to be held on January 10,
2000, at 10:00 a.m. at MPEL HOLDINGS CORP., and any adjournments thereof, upon
the matters set forth in the Notice of Annual Meeting.
The undersigned acknowledges receipt of the Notice of Annual Meeting and
Proxy Statement.
<TABLE>
<CAPTION>
1. ELECTION OF DIRECTORS
<S> <C>
[ ] FOR all nominees listed below (except as marked to [ ] Withhold Authority to vote for
the contrary below) all nominees listed below
(Instruction: To withhold authority to vote for an individual nominee strike a line through such nominee's name in the list below).
STEVEN M. LATESSA CARY WOLEN MICHAEL MORAN
2. AMENDMENT OF THE CERTIFICATE OF INCORPORATION INCREASING THE AUTHORIZED
SHARES OF COMMON STOCK FROM 15,000,000 TO 100,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. AUTHORIZE PREFERRED STOCK
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. AMENDMENT TO CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK
SPLIT OF MPEL'S COMMON STOCK.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. AMENDMENT TO MPEL'S 1995 STOCK OPTION PLAN.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. RATIFICATION OF THE APPOINTMENT OF RICHARD A. EISNER AND COMPANY, LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
7. TRANSACTION OF SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING
AND ANY ADJOURNMENT OR POSTPONEMENT THEREOF.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
PLEASE SIGN ON THE REVERSE SIDE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE.
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS and when
properly executed will be voted as directed herein. If no direction is given,
this Proxy will be voted FOR each proposal.
Dated:________________________
______________________________
(Signature)
______________________________
(Signature if held jointly)
Please sign exactly as name appears below.
If Shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please list full title as such.
If a corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership sign
in partnership name by authorized person.
Please sign, date and return promptly in
the enclosed envelope. No postage need be
affixed if mailed in the United States.
