SCHEDULE 14A INFORMATION
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 ss.240.14a-11(c) or
ss.240.14a-12
United Heritage Corporation
------------------------------------------------
(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)(1) 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:___________________________________________________
<PAGE>
UNITED HERITAGE CORPORATION
2 NORTH CADDO STREET
CLEBURNE, TEXAS 76031
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held August 23, 1999
Notice is hereby given that pursuant to the call of its Board
of Directors, the Annual Meeting of Shareholders of United Heritage
Corporation (the "Company") will be held at the Company's executive
offices at 2 North Caddo Street, Cleburne, Texas on August 23, 1999,
at 10:00 a.m., for the purpose of considering and voting on the
following matters:
1. To elect the five (5) persons listed in the Proxy Statement
dated July 29, 1999, accompanying this Notice, to serve as
directors of the Company;
2. To authorize and give discretion to the Board of Directors to
either amend the Articles of Incorporation to effect a single
reverse stock split of not less than One-for-Two nor greater
than One-for-Ten of the issued and outstanding shares of
Common Stock, with no effect on the par value of such shares
or the number of authorized shares, if the Board believes
that a decrease in the number of shares of Common Stock
outstanding will enhance the acceptability and marketability
of the Common Stock by the financial community and investing
public; or to not effect a reverse stock split.
3. To approve the appointment of Weaver and Tidwell, L.L.P., or
such other firm appointed by the Board of Directors prior to
the meeting, as independent auditors of the Company for its
fiscal year ending March 31, 2000; and
4. To transact such other business as may properly come before
the Annual Meeting of Shareholders or any adjournment or
adjournments thereof.
Only those shareholders of record at the close of business on
July 6, 1999 are entitled to notice of and to vote at the Annual
Meeting of Shareholders or at any adjournment or adjournments
thereof.
All shareholders are urged to sign, date and return as promptly
as possible the enclosed proxy in the enclosed envelope. It is
important that as many shares as possible be represented at the
Annual Meeting of Shareholders. Consequently, whether or not you
expect to be present, please execute and return the enclosed proxy.
By Order of the Board of Directors,
Harold L. Gilliam, Secretary
July 29, 1999
Cleburne, Texas
<PAGE>
UNITED HERITAGE CORPORATION
2 NORTH CADDO STREET
CLEBURNE, TEXAS 76031
TELEPHONE 817-641-3681
PROXY STATEMENT FOR ANNUAL
MEETING OF SHAREHOLDERS
To Be Held August 23, 1999
The following information is furnished to the shareholders
of UNITED HERITAGE CORPORATION (the "Company") in connection with
the solicitation by the Board of Directors of the Company (the
"Board") of proxies to be used at the Annual Meeting of
Shareholders of the Company to be held at the Company's executive
offices at 2 North Caddo Street, Cleburne, Texas on August 23,
1999, at 10:00 a.m., and at any adjournment or adjournments
thereof. This Proxy Statement and accompanying proxy are being
mailed on or about July 29, 1999 to the shareholders of the
Company.
GENERAL INFORMATION
The close of business on July 6, 1999 has been fixed as the
record date for determining the shareholders entitled to vote at
the Annual Meeting of Shareholders.
The Annual Meeting of Shareholders is called for the
purposes of (1) electing the directors of the Company to serve
for the ensuing year; (2) giving discretion to the Board to amend
the Articles of Incorporation either to effect a single reverse
stock split of not less than One-for-Two nor greater than One-
for-Ten of the issued and outstanding shares of Common Stock (the
"Reverse Split") or to not effect a Reverse Split; (3) approving
the appointment of Weaver and Tidwell, L.L.P., or such other firm
appointed by the Board of Directors prior to the meeting, as the
independent auditors of the Company for the fiscal year ending
March 31, 2000; and (4) transacting such other business as may
properly come before the Annual Meeting of Shareholders or any
adjournment or adjournments thereto.
Any person executing the accompanying proxy may revoke it at
any time prior to the actual voting thereof by filing with the
Secretary of the Company a written revocation thereof or a duly
executed proxy bearing a later date.
Shares represented by each signed proxy received by the
Board will be voted in accordance with the direction specified by
the shareholder, and if no direction is specified, such shares
will be voted "FOR" each proposal of the Board.
Pursuant to Utah law, shareholders will have no rights of
appraisal in connection with any matters to be voted on at the
Annual Meeting of Shareholders. The cost of soliciting proxies
will be borne by the Company. The solicitation will be made by
mail. The Company will also supply brokerage firms and other
custodians, nominees and fiduciaries with such number of proxy
materials as they may require for mailing to beneficial owners,
and will reimburse them for their reasonable expenses in
connection therewith. Certain directors, officers and employees
of the Company, not specifically employed for the purpose, may
solicit proxies, without remuneration therefore, by mail,
telephone, telegraph or personal interview.
OUTSTANDING SHARES AND VOTING RIGHTS
At the close of business on July 6, 1999, the record date
for determining the shareholders of the Company entitled to
notice of and to vote at the Annual Meeting of Shareholders, the
Company had 99,372,654 shares of common stock, $0.001 par value
(the "Common Stock"), issued and outstanding.
The presence, in person or by proxy, of the holders of a
majority of the issued and outstanding shares of Common Stock of
the Company is necessary to constitute a quorum at the Annual
Meeting of Shareholders.
Each holder of shares of Common Stock will be entitled to
one vote, in person or by proxy, for each share of Common Stock
of the Company owned of record at the close of business on July
6, 1999. Cumulative voting for directors is not permitted.
BOARD OF DIRECTORS
Various meetings of the Board are held each year, including
an organizational meeting following the conclusion of the Annual
Meeting of Shareholders. The Board has established a Stock
Option Committee and an Audit Committee, and does not presently
have an executive, nominating, compensation or other standing
committee.
<PAGE>
Stock Option Committee
Members: Walter G. Mize and Joe Martin.
The Stock Option Committee is responsible for the
administration of the 1995 United Heritage Corporation Stock
Option Plan, the 1996 Stock Option Plan, the 1998 Stock Option
Plan, and the Stock Bonus Plan. See "EXECUTIVE COMPENSATION AND
OTHER INFORMATION."
Audit Committee
Members: Walter G. Mize, Joe Martin and Theresa Turner.
The Audit Committee is responsible to recommend to the Board
of Directors the selection of independent public accountants to
audit annually the books and records of the Corporation, discuss
with the independent auditors and internal auditors the scope and
results of audits, approve and review any nonaudit services
performed by the Corporation's independent auditing firm, and
review certain related party transactions.
Directors' Compensation
During the fiscal year ended March 31, 1999 neither the
Company nor its subsidiaries, National Heritage Sales
Corporation, UHC Petroleum Corporation, UHC Petroleum Services
Corporation and Sovereign Communications Corporation (the
"Subsidiaries") paid any cash compensation to directors for
attendance at meetings of the Board or for attendance at meetings
of the Stock Option or Audit Committee.
Attendance at Board and Committee Meetings
During the fiscal year ended March 31, 1999 there was one
meeting of the Board, one meeting of the Stock Option Committee
and one meeting of the Audit Committee. In addition, action was
taken by the Board by unanimous written consent seven times in
lieu of a meeting. Each director attended all of the meetings of
the Board and each Committee of the Board of which he or she was
a member during the fiscal year ended March 31, 1999.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The bylaws of the Company provide that the Board shall be
comprised of not less than three (3) nor more than nine (9)
members and that each director shall be elected to serve until
the next Annual Meeting of Shareholders and until his or her
successor shall be elected and shall qualify. Any vacancies on
the Board may be filled by a majority vote of the Board and any
director so elected shall hold office for the unexpired term of
his or her predecessor or until the next election of directors by
the shareholders of the Company.
Names of the nominees for directors and other information
about them appear in the following table. All of the nominees
are now directors of the Company and have consented to serve if
elected. If for any unforeseen reason a nominee is unable to
serve if elected, the persons named in the accompanying proxy may
exercise their discretion to vote for a substitute nominee
selected by the Board. However, the Board has no reason to
anticipate that any of the nominees will not be able to serve, if
elected.
Name and Age of
Nominee; Years Principal Occupation for Past
Served as Director Five Years; Other Directorships
- ------------------ -------------------------------
Walter G. Mize Mr. Mize has served as Chairman of the Board,
Age 61 President and Chief Executive Officer of the
Director Since 1987 Company since September 1987. He has also served
as President, Chairman of the Board and Chief
Executive Officer of UHC Petroleum Corporation
and National Heritage Sales Corporation since
September 1987; and as President of UHC Petroleum
Services Corporation and Sovereign Communications
Corporation since January 1997. He has been engaged
in oil and gas exploration and development, cattle
ranching, real estate development, banking and
various other investment activities for over thirty
years.
Harold L. Gilliam Mr. Gilliam has served as Secretary, Treasurer and
Age 52 Chief Financial Officer of the Company since
Director Since 1990 November 1990. He has been a partner in the firm
of Gilliam, Wharram & Co., P.C., Certified Public
Accountants, located in Cleburne, Texas, since August
1987, and has been a Certified Public Accountant in
the state of Texas since 1972.
Joe Martin Dr. Martin is an optometrist partner in the Cleburne
Age 54 Eye Clinic, located in Cleburne, Texas, and has been
Director Since 1988 an optometrist for over twenty-five years.
C. Dean Boyd Mr. Boyd has been Vice President, Senior Loan
Age 52 Officer of First National Bank of Longmont, Longmont,
Director Since 1988 Colorado since January 1999. He previously served
as President of Colorado Community First National
Bank, located in Louisville, Colorado, from
February 1997 to January 1999; and as President of
Colorado Community First National Bank, located in
Fraser, Colorado, from 1988 to February 1997.
Mr. Boyd has been a Certified Public Accountant in
the state of Colorado since 1972.
-2-
<PAGE>
Theresa D. Turner Ms. Turner has been President of Colorado Community
Age 39 First National Bank, located in Fraser, Colorado,
Director Since 1992 since February 1997. She previously served as
Senior Vice President of that bank from January 1993
to February 1997, and in various other capacities
since 1985.
No family relationships exist among the executive officers
and directors of the Company. No director of the Company is a
director of any company with a class of securities registered
pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended, or subject to the requirements of Section 15(d) of that
Act or of any company registered as an investment company under
the Investment Corporation Act of 1940, as amended.
Assuming the presence of a quorum, the affirmative vote of
the holders of a majority of the issued and outstanding shares of
Common Stock represented and entitled to vote at the Annual
Meeting or any adjournment(s) thereof is necessary for the
election of directors. Assuming the receipt by each such person
of the affirmative vote of at least a majority of the shares of
Common Stock represented at the Annual Meeting, the five (5)
persons receiving the greatest number of votes will be elected as
directors.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION AS DIRECTORS OF THE FIVE (5) PERSONS NAMED ABOVE.
PROPOSAL NO. 2
TO AMEND THE ARTICLES OF INCORPORATION TO EFFECT A
REVERSE STOCK SPLIT
General
The Board of Directors of the Company has approved and
directed that the proposed Reverse Split, authorizing amendment
of the Articles of Incorporation of the Company (the "Articles")
be submitted to the Company's shareholders for consideration and
action. The complete text of the amendment to the Articles (the
"Amendment to the Articles") for the Reverse Split is set forth
in Exhibit A to this Proxy Statement; however, such text is
subject to change as may be required by the Utah Secretary of
State.
If the proposal for the Reverse Split is approved by the
requisite vote of the Company's shareholders, the Board will be
given the discretion to effect a single Reverse Split of not less
than One-for-Two nor greater than One-for-Ten of the issued and
outstanding shares of Common Stock or to effect no Reverse Split.
The Board believes this latitude is necessary, given the changing
market price of the Common Stock, to increase the trading price
of the Common Stock to levels more acceptable to investors and
the securities industry. The Board will only effect the Reverse
Split if the Board determines that it is in the best interests of
the Company and its shareholders. In connection with any
determination by the Board that a Reverse Split is in the best
interests of the Company and its shareholders, the Board will
also select, in its discretion, one of the Reverse Splits based
on its determination of which of them results in the greatest
marketability and liquidity of the Common Stock, on prevailing
market conditions, on the likely effect on the market price of
the Common Stock and other relevant factors. The remaining
alternative Reverse Splits would be abandoned by the Board
without further action by the shareholders of the Company.
Shareholders may approve or reject the proposed Reverse
Stock Splits in whole but not in part. If approved by the
shareholders of the Company, a Reverse Split would become
effective on any date (the "Effective Date") selected by the
Board on or prior to the Company's next Annual Meeting of
Shareholders. If no Reverse Split is effected by such date, the
Board will be deemed to have abandoned the Reverse Splits. The
procedures for consummation of the Reverse Splits are set forth
in Exhibit A hereto.
Vote Required
The approval of each of the proposed Reverse Splits requires
the affirmative vote of a majority of the outstanding shares of
Common Stock. The Reverse Splits will be voted on as a group.
Purposes and Effects of the Reverse Split
The purpose of the Reverse Splits is to increase the
marketability and liquidity of the Common Stock.
Consummation of a Reverse Split will not alter the number of
authorized shares of Common Stock. Proportionate voting rights
and other rights of shareholders will not be altered by any
Reverse Split, except for the limited occasion where a small
shareholder may own only a fractional interest after the Reverse
Split, in which event the small shareholder will be paid for the
fractional interest and will cease to be a holder of the
Company's Common Stock. Consummation of a Reverse Split will
have no material federal tax consequences to shareholders.
-3-
<PAGE>
The Common Stock is listed for trading on the National
Association of Securities Dealers Automatic Quotation System
("NASDAQ") and the Boston Stock Exchange. On May 28, 1999, the
reported average of the closing bid and asked prices of the
Common Stock on NASDAQ was $0.7345 per share.
The Board believes that a decrease in the number of shares
of Common Stock outstanding without any material alteration of
the proportionate economic interest in the Company represented by
individual shareholdings may increase the trading price of such
shares to a price more appropriate for an exchange-listed
security, although no assurance can be given that the market
price of the Common Stock will rise in proportion to the
reduction in the number of outstanding shares resulting from any
Reverse Split.
Additionally, although the Company has not yet experienced
identifiable problems in the marketability and liquidity of its
Common Stock, the Board believes that the current per share price
of the Common Stock may limit the effective marketability of the
Common Stock because of the reluctance of many brokerage firms
and institutional investors to recommend lower-priced stocks to
their clients or to hold them in their own portfolios. Certain
policies and practices of the securities industry may tend to
discourage individual brokers within those firms from dealing in
lower-priced stocks. Some of those policies and practices
involve time-consuming procedures that make the handling of
lower-priced stocks economically unattractive. The brokerage
commission on a sale of lower-priced stock may also represent a
higher percentage of the sale price than the brokerage commission
on a higher-priced issue. Any reduction in brokerage commissions
resulting from a Reverse Split may be offset, however, in whole
or in part, by increased brokerage commissions required to be
paid by shareholders selling "odd lots" created by such Reverse
Split.
The par value of the Common Stock will remain at $.001
following any Reverse Split, and the number of shares of Common
Stock outstanding will be reduced. As a consequence, the
aggregate par value of the outstanding Common Stock will be
reduced, while the aggregate capital in excess of par value
attributable to the outstanding Common Stock for statutory and
accounting purposes will be correspondingly increased. The
resolution approving the Reverse Split provides that this
increase in capital in excess of par value will be treated as
capital for statutory purposes. The conversion ratios of any
shares of outstanding stock having a conversion or redemption
feature would be correspondingly adjusted upon consummation of
any Reverse Split.
The Reverse Split, if undertaken in the discretion of the
Board, would have the following effects upon the number of shares
of Common Stock outstanding (99,372,654 shares as of the Record
Date), assuming that no additional shares of Common Stock are
issued by the Company after the Record Date, and without taking
into account any reduction in the number of outstanding shares
resulting from the procedures for treatment of fractional shares
described below. Because the Reverse Split, if effected, may
range from One-for-Two to One-for-Ten, existing shareholders
cannot now predict the number of shares of Common Stock that they
will hold after the Reverse Split, and cannot predict the total
number of shares of Common Stock that will be outstanding after
the Reverse Split. However, with the limited exception of small
shareholders who own only fractional share interests after a
Reverse Split, the proportionate ownership interests of holders
of Common Stock will not be affected by a Reverse Split.
Shareholders holding ten or fewer shares of Common Stock may,
depending on the proportion of the Reverse Split, have only a
fractional share interest after the Reverse Split. As a result,
those shareholders would receive payment for their fractional
interests as set forth below, and would cease to be holders of
the Company's Common Stock.
Reverse Common Stock
Stock Split Outstanding
----------- ------------
1 for 2............49,686,327
1 for 3............33,124,218
1 for 4............24,843,163
1 for 5............19,874,530
1 for 6............16,562,109
1 for 7............14,196,093
1 for 8............12,421,581
1 for 9............11,041,406
1 for 10............9,937,265
At the Effective Date, each share of the Common Stock issued
and outstanding immediately prior thereto (the "Old Common
Stock"), will be reclassified as and changed into the appropriate
fraction of a share of the Company's Common Stock, par value
$.001 (the "New Common Stock"), subject to the treatment of
fractional share interests as described below. Shortly after the
Effective Date, the Company will send transmittal forms to the
holders of the Old Common Stock to be used in forwarding their
certificates formerly representing shares of Old Common Stock for
surrender and exchange for certificates representing whole shares
of New Common Stock.
-4-
<PAGE>
No certificates or script representing fractional share
interests in the New Common Stock will be issued, and no such
fractional share interest will entitle the holder thereof to
vote, or to any rights as a shareholder of the Company. In lieu
of any such fractional share interests, each holder of Old Common
Stock who would otherwise be entitled to receive a fractional
share of New Common Stock will, at the discretion of the Board,
either be (i) paid cash by the Company upon surrender of
certificates formerly representing Old Common Stock held by such
holder in an amount equal to the product of such fraction
multiplied by the closing bid price of the Old Common Stock on
NASDAQ on the Effective Date (or in the event that Common Stock
is not so traded on the Effective Date, such closing bid price on
the next preceding day on which such stock is traded on NASDAQ);
or, alternatively, (ii) the Company will make arrangements with,
and provide assistance to, a third party who shall pool said
fractional share interests, sell the same, and return appropriate
payment to the holders of fractional share interests in the
amount described in (i) above.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
APPROVAL OF THE PROPOSAL TO AUTHORIZE THE BOARD TO HAVE
DISCRETION TO AMEND THE ARTICLES OF INCORPORATION TO EFFECT NOT
LESS THAN A ONE-FOR-TWO NOR MORE THAN A ONE-FOR-TEN REVERSE STOCK
SPLIT OF THE ISSUED AND OUTSTANDING SHARES OF COMMON STOCK OR TO
EFFECT NO REVERSE STOCK SPLIT.
PROPOSAL NO. 3:
APPROVAL OF APPOINTMENT OF INDEPENDENT AUDITORS
Subject to approval by the shareholders, the Board has
selected the firm of Weaver and Tidwell, L.L.P. as independent
auditors of the Company for its fiscal year ending March 31,
2000. Weaver and Tidwell, L.L.P. has acted in such capacity for
the Company since 1989 and has reported that neither the firm nor
any of its partners has any material direct or indirect financial
interest in the Company, other than as independent auditors.
Representatives of Weaver and Tidwell, L.L.P. will be
present at the Annual Meeting of Shareholders with the
opportunity to make a statement if they desire to do so and are
expected to be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
APPROVAL OF THE APPOINTMENT OF WEAVER AND TIDWELL, L.L.P. AS
INDEPENDENT AUDITORS OF THE COMPANY.
ACTION TO BE TAKEN UNDER THE PROXY
The accompanying proxy will be voted "FOR" the election of
the five (5) persons recommended by the Board and named under
"PROPOSAL NO. 1: ELECTION OF DIRECTORS" as nominees for directors
of the Company; "FOR" approval of the proposal to give the Board
of Directors of the Company authority to amend the Articles of
Incorporation to effect a single reverse stock split of not less
than One-for-Two nor more than One-for-Ten, or to not so amend
the Articles of Incorporation; and "FOR" approval of the
appointment of Weaver and Tidwell, L.L.P. as the independent
auditors of the Company for its fiscal year ending March 31,
2000, unless the proxy is marked in such a manner as to withhold
authority to so vote.
The accompanying proxy will also be voted in connection with
the transaction of such other business as may properly come
before the Annual Meeting of Shareholders, or any adjournment or
adjournments thereof. Management knows of no other matters to be
considered at the Annual Meeting of Shareholders. If, however,
any other matters properly come before the Annual Meeting of
Shareholders, or any adjournment or adjournments thereof, the
persons named in the accompanying proxy will vote such proxy in
accordance with their best judgment on any such matter. The
persons named in the accompanying proxy will also, if in their
judgment it is deemed to be advisable, vote to adjourn the
meeting from time to time.
-5-
<PAGE>
STOCK OWNERSHIP
By Management
The following table shows beneficial ownership of shares of
Common Stock of the Company by all current directors and nominees
for director, individually, and, together with all current
executive officers of the Company, as a group, at May 28, 1999.
Name of Individual
or Number of Amount and Nature of Percent
Persons in Group Beneficial Ownership(1) Of Class(2)
- ------------------ ----------------------- -----------
Walter G. Mize 78,035,000 shares(3) 79.49%
Harold L. Gilliam 45,000 shares(4) *
Joe Martin 75,000 shares(5) *
C. Dean Boyd 85,500 shares(6) *
Theresa D. Turner 45,000 shares(7) *
All directors and
executive officers as
a group (5 persons) 78,285,500 shares(8) 79.67%
- ------------
* Less than one percent (1%) of all of the issued and
outstanding shares of Common Stock.
(1) Based on information furnished by persons named and, except
as otherwise indicated below, each person has sole voting power
and investment power with respect to all shares of Common Stock
owned by such person.
(2) Based on 97,572,654 shares of Common Stock issued and
outstanding as of May 28, 1999, as adjusted for shares
convertible or exercisable within sixty (60) days of May 28, 1999
which are deemed outstanding for a specific shareholder pursuant
to Rule 13d-3(d)(1) under the Securities Exchange Act of 1934.
(3) Represents 77,435,000 shares of Common Stock owned of record
and 600,000 shares of Common Stock which Mr. Mize has the right
to acquire within sixty (60) days from the date hereof pursuant
to options granted to him under the 1995 Stock Option Plan of the
Company.
(4) Represents 25,000 shares of Common Stock owned of record and
20,000 shares of Common Stock which Mr. Gilliam has the right to
acquire within sixty (60) days from the date hereof pursuant to
options granted to him under the 1995 Stock Option Plan of the
Company.
(5) Includes 30,000 shares of Common Stock owned of record;
10,000 shares of Common Stock owned by Dr. Martin's wife; and
35,000 shares of Common Stock which Dr. Martin has the right to
acquire within sixty (60) days from the date hereof pursuant to
options granted to him under the 1995 Stock Option Plan of the
Company.
(6) Includes 47,500 shares of Common Stock owned of record;
20,000 shares of Common Stock which Mr. Boyd has the right to
acquire within sixty (60) days from the date hereof pursuant to
options granted to him under the 1995 Stock Option Plan of the
Company; 2,000 shares of Common Stock held by Mr. Boyd's IRA; and
16,000 shares of Common Stock owned by Mr. Boyd's wife.
(7) Represents 25,000 shares of Common Stock owned of record and
20,000 shares of Common Stock which Ms. Turner has the right to
acquire within sixty (60) days from the date hereof pursuant to
options granted to her under the 1995 Stock Option Plan of the
Company.
(8) Includes 695,000 shares of Common Stock which the directors
and executive officers have the right to acquire within sixty
(60) days from the date hereof pursuant to options granted to
them under the 1995 Stock Option Plan of the Company.
-6-
<PAGE>
By Others
The following table sets forth certain information with
respect to shareholders of the Company who were known to be
beneficial owners of more than five percent (5%) of the
outstanding shares of Common Stock as of May 28, 1999.
Amount and Nature
Name and Address of of Beneficial Percent of
Beneficial Owner Ownership(1) Class(2)
- ------------------- ------------------ ----------
Walter G. Mize
2 North Caddo Street
Cleburne, Texas 76033-1956 78,035,000 shares 79.49 %
(1) Based on information furnished by the person named and,
except as otherwise indicated below, such person has sole voting
power with respect to all shares of Common Stock owned by such
person.
(2) See footnote (3) under "STOCK OWNERSHIP - By Management."
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's executive officers, directors and persons
who own more than ten percent (10%) of a registered class of the
Company's equity securities to file reports of ownership with the
Securities and Exchange Commission.
Based upon a review of Forms 4 and amendments thereto,
furnished to the Company during the fiscal year ended March 31,
1999, and Forms 5 and amendments thereto furnished to the Company
with respect to the fiscal year ended March 31, 1999, management
of the Company has determined that, during such fiscal year, no
directors, officers or ten percent (10%) beneficial owners of
Common Stock of the Company failed to file on a timely basis with
the Securities and Exchange Commission one or more required
report on Form 4 or 5 regarding transactions in securities of the
Company.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
During the fiscal years ended March 31, 1997, 1998 and 1999
neither the Company nor its Subsidiaries paid any cash
compensation to the Company's Chief Executive Officer, and no
executive officer of the Company received compensation in excess
of $100,000.
The following table provides certain summary information
concerning compensation paid or accrued by the Company to or on
behalf of the Company's Chief Executive Officer for the fiscal
years ended March 31, 1999, 1998 and 1997:
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation Awards
-------------------------- ---------------------
Name and Securities
Principal Position Year Salary($) Bonus($) underlying options(#)
- ------------------ ---- --------- -------- ---------------------
Walter G. Mize 1999 $0 $0 0
Chairman of the Board, 1998 $0 $0 0
President and Chief 1997 $0 $0 0
Executive Officer
Option Exercises and Holdings
The following table provides information with respect to the
named executive officer concerning the exercise of incentive
stock options during the last fiscal year and unexercised stock
options held as of the end of the last fiscal year under the 1995
Plan:
-7-
<PAGE>
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End (#) FY-End ($)
----------- -------------
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized($) Unexercisable Unexercisable(1)
- ---- --------------- ----------- ------------- ----------------
Walter G. Mize 0 $0 600,000/-0- $450,000/-0-
(1) Fair market value of underlying securities at the fiscal
year-end ($1.00), minus the exercise or base price ($0.25).
CERTAIN TRANSACTIONS
Loan from an Affiliate
On August 5, 1997 the Company obtained an unsecured
revolving line of credit in the amount of $300,000 from ALMAC
Financial Corporation ("ALMAC"), a company owned by Walter G.
Mize, Chairman of the Board, President and Chief Executive
Officer of the Company. The line of credit bears interest at the
rate of six percent (6%) per annum, and will terminate on August
5, 1998. The line of credit was paid in full on December 12,
1997 from the proceeds of a private securities offering. As of
the date of this Proxy Statement, there is no outstanding balance
on the line of credit. The Company believes the terms of this
loan are as favorable to the Company as could be obtained from an
unaffiliated third party.
Other Transactions
During the fiscal year ended March 31, 1999 the Company
received the use of office space and equipment from Walter G.
Mize without charge. Management of the Company estimates the
value of the use of the office space and equipment at
approximately $18,000 for the fiscal year ended March 31, 1999.
Mr. Mize is under no obligation to provide the use of the office
space or equipment to the Company.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the
next Annual Meeting of Shareholders must be received by the
Company at its principal executive offices not later than April
29, 2000 for inclusion in the Company's Proxy Statement and
accompanying proxy relating to the next Annual Meeting of
Shareholders.
ANNUAL REPORTS
A copy of the Company's 1999 Annual Report on Form 10-K,
including the financial statements and schedules thereto,
required to be filed with the Securities and Exchange Commission,
may be obtained without charge (except for exhibits to such
Annual Report, which will be furnished upon payment of the
Company's reasonable expenses in furnishing such exhibits) by any
shareholder whose proxy is solicited upon written request to:
United Heritage Corporation
P.O.Box 1956
Cleburne, Texas 76033
Attention: Mr. Harold L. Gilliam
BY ORDER OF THE BOARD OF DIRECTORS
By:_______________________________
Harold L. Gilliam, Secretary
July 29, 1999
Cleburne, Texas
-8-
<PAGE>
Exhibit A
THE REVERSE STOCK SPLIT PROPOSAL
RESOLVED, that, prior the Company's 2000 Annual Meeting of
Shareholders, on the condition that no other amendment to the
Company's Articles of Incorporation shall have been filed subsequent
to August 23, 1999, effecting a reverse stock split of the Common
Stock, at the sole discretion of the Board of Directors of the
Company, Article IV of the Company's Articles of Incorporation be
amended by addition of the following provision, with the appropriate
substitutions in the bolded language (illustrating a One-for-Two
split) to indicate whether the reverse stock split is to be One-for-
Two, One-for-Ten, or another ratio within that range:
(c) Simultaneously with the effective date of this
amendment (the "Effective Date"), each share of the Company's
Common Stock, par value $.001 per share, issued and outstanding
immediately prior to the Effective Date (the "Old Common
Stock") shall automatically and without any action on the part
of the holder thereof be reclassified as and changed into one-
half (1/2) of a share of the Company's Common Stock, par value
equal to the par value of the Old Common Stock (the "New Common
Stock"), subject to the treatment of fractional share interests
as described below. Each holder of a certificate or
certificates which immediately prior to the Effective Date
represented outstanding shares of Old Common Stock (the "Old
Certificates," whether one or more) shall be entitled to
receive upon surrender of such Old Certificates to the
Company's Transfer Agent for cancellation, a certificate or
certificates (the "New Certificates," whether one or more)
representing the number of whole shares of the New Common Stock
into which and for which the shares of the Old Common Stock
formerly represented by such Old Certificates so surrendered,
are reclassified under the terms hereof. From and after the
Effective Date, Old Certificates shall represent only the right
to receive New Certificates (and, where applicable, cash in
lieu of fractional shares, as provided below) pursuant to the
provisions hereof. No certificates or scrip representing
fractional share interests in New Common Stock will be issued,
and no such fractional share interest will entitle the holder
thereof to vote, or to any rights of a shareholder of the
Company. A holder of Old Certificates shall receive, in lieu
of any fraction of a share of New Common Stock to which the
holder would otherwise be entitled, a cash payment therefor on
the basis of the closing bid price of the Old Common Stock on
the National Association of Securities Dealers Automatic
Quotation System ("NASDAQ") Stock Market on the Effective Date,
as reported on the NASDAQ Stock Market (or in the event the
Company's Common Stock is not so traded on the Effective Date,
such closing bid price on the next preceding day on which such
stock was traded on the NASDAQ Stock Market). The Company may
retain a third party to collect and pool fractional share
interests, sell the same, and return payment to the holders of
the interests. If more than one Old Certificate shall be
surrendered at one time for the account of the same
shareholder, the number of full shares of New Common Stock for
which New Certificates shall be issued shall be computed on the
basis of the aggregate number of shares represented by the Old
Certificates so surrendered. In the event that the Company's
Transfer Agent determines that a holder of Old Certificates has
not tendered all his certificates for exchange, the Transfer
Agent shall carry forward any fractional share until all
certificates of that holder have been presented for exchange
such that payment for fractional shares to any one person shall
not exceed the value of one share. If any New Certificate is
to be issued in a name other than that in which the Old
Certificates surrendered for exchange are issued, the Old
Certificates so surrendered shall be properly endorsed and
otherwise in proper form for transfer, and the person or
persons requesting such exchange shall affix any requisite
stock transfer tax stamps to the Old Certificates surrendered,
or provide funds for their purchase, or establish to the
satisfaction of the Transfer Agent that such taxes are not
payable. From and after the Effective Date the amount of
capital represented by the shares of the New Common Stock into
which and for which the shares of the Old Common Stock are
reclassified under the terms hereof shall be the same as the
amount of capital represented by the shares of Old Common Stock
so reclassified, until thereafter reduced or increased in
accordance with applicable law.
FURTHER RESOLVED, that at any time prior to the filing of the
foregoing amendment to the Company's Articles of Incorporation
effecting a not less than One-for-Two nor greater than One-for-Ten
Reverse Stock Split, notwithstanding authorization of the proposed
amendment by the shareholders of the Company, the board of directors
may abandon such proposed amendment without further action by the
shareholders.
<PAGE>
UNITED HERITAGE CORPORATION
Proxy Solicited on Behalf of the Board of Directors of the Corporation
For Annual Meeting of Shareholders
August 23, 1999
The undersigned hereby constitutes and appoints Walter G. Mize and
Harold L. Gilliam, and each of them, proxies with full power of
substitution, to vote, as directed below, all the shares of common stock
of United Heritage Corporation (the "Corporation") held of record by the
undersigned at the close of business on July 6, 1999, at the Annual
Meeting of Shareholders to be held at United Heritage Corporation, 2
North Caddo Street, Cleburne, Texas, at 10:00 a.m. on August 23, 1999,
and at any adjournment or adjournments thereof.
1. ELECTION OF DIRECTORS -- Nominees: Walter G. Mize, C. Dean Boyd,
Harold L. Gilliam, Joe Martin, and Theresa D. Turner
MARK ONLY ONE BOX VOTE FOR all nominees listed above, except
vote to be withheld from the following
nominees, if any: ________________________
VOTE TO BE WITHHELD from all nominees.
2. TO AUTHORIZE THE BOARD TO AMEND THE ARTICLES OF INCORPORATION TO
EFFECT A REVERSE STOCK SPLIT. Proposal to authorize the Board to
effect a reverse stock split of not less than One-for-Two nor
greater than One-for-Ten of the issued and outstanding shares of
Common Stock or to effect no reverse split.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
Proposal to approve the appointment of Weaver and Tidwell, L.L.P.
as independent public accountants of the Corporation for the fiscal
year ending March 31, 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. OTHER BUSINESS. In their discretion upon such other business as
may properly come before the meeting, or any adjournment or
adjournments thereof.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
This proxy when properly executed will be voted as directed herein
by the undersigned. If no direction is made, this Proxy will be voted
FOR all the nominees listed above and FOR proposals 2, and 3 and, in the
discretion of the persons named herein as proxies, upon such other
business as may come before the meeting and any adjournment or
adjournments thereof. The undersigned hereby revokes any proxy or
proxies heretofore given and hereby confirms all that said attorneys and
proxies, or any of them, or their substitutes may do by virtue hereof.
In addition, receipt of the 1998 Annual Report, the Notice of Annual
Meeting and the Proxy Statement of United Heritage Corporation dated
July 29, 1999 is hereby acknowledged.
SHARES OF COMMON STOCK: _________ DATED: _________________, 1999
______________________________
Signature of Shareholder(s)
______________________________
Street Address
______________________________
City, State, Zip Code
Please date this proxy and sign your name exactly as it appears hereon,
and mail today. When signing on behalf of a corporation, partnership,
estate, trust, or the like, indicate title of persons signing. For
joint accounts, each joint owner should sign.
NOTE: I _____ WILL _____ WILL NOT ATTEND THE SHAREHOLDERS' MEETING ON
AUGUST 23, 1999
