<PAGE>
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. )
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 14a-11(c) or 14a-12
TRANSMEDIA NETWORK INC.
- ------------------------------------------------------------------------------
(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:
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<PAGE>
/ / Fee paid previously with preliminary materials:
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/ / 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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
TRANSMEDIA NETWORK INC.
Proxy for SPECIAL MEETING of Stockholders to be held on October 7, 1999
The undersigned hereby appoints GENE M. HENDERSON and STEPHEN E. LERCH as
Proxies, each with power to appoint his substitute, and hereby authorizes them
to represent and vote, as designated on the reverse side of this card, all
shares of Common Stock of Transmedia Network Inc. (the "Company"), held of
record by the undersigned on September 10, 1999, at the SPECIAL MEETING of
Stockholders (the "SPECIAL MEETING"), to be held at the Intercontinental Hotel,
505 North Michigan Avenue, 11th Floor-Exchange Room (South Tower), Chicago,
Illinois 60611, at 10:00 a.m. (Central Time), on Thursday, October 7, 1999 or
any postponement or adjournment thereof.
1. To approve the amendment to the Company's Certificate of Incorporation.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. To approve the issuance of non-transferable warrants to purchase 1,000,000
shares of our common stock, at an exercise price per share equal to the average
closing price per share of the common stock for the 20 trading days preceding
the closing of a rights offering, to Samstock, L.L.C.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE
VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE
APPROVAL OF THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION, AND FOR
THE APPROVAL OF THE ISSUANCE OF THE WARRANTS. ON ANY OTHER MATTERS THAT MAY COME
BEFORE THE MEETING, THIS PROXY WILL BE VOTED AT THE DISCRETION OF THE PERSONS
NAMED.
PLEASE DATE, MARK, SIGN AND RETURN THIS PROXY PROMPTLY IN THE ENVELOPE PROVIDED,
WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
SIGNATURE(S): DATE: , 1999
----------------------------------- -----------
-----------------------------------
-----------------------------------
Title of Authority
Note: Please sign exactly as name or names appear(s) on stock certificate. If
stock is held jointly, each stockholder should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by president or authorized
officers. If a partnership, please sign in partnership name by authorized
person.
<PAGE>
[Letterhead of Transmedia Network Inc.]
FELLOW STOCKHOLDERS:
Our Board of Directors has called a Special Meeting of Stockholders as
described in the enclosed Notice of Special Meeting of Stockholders and Proxy
Statement. The Special Meeting is being called so that our stockholders may
consider and act upon certain matters that require their approval to enable
Transmedia to raise additional capital through an offering to our stockholders
of a new class of convertible preferred stock. At the Special Meeting, our
stockholders will be asked to approve (1) an amendment to our Certificate of
Incorporation which will (a) increase our authorized share capital to 70 million
shares of common stock and 10 million shares of preferred stock (from 20 million
shares of common stock and 1 million shares of preferred stock), and (b) clarify
that the existing authority of the Board of Directors to fix the designations,
preferences and rights of series of preferred stock it issues from time to time
includes the authority to establish voting powers for individual series of the
preferred stock, and (2) the issuance of five-year non-transferable warrants to
purchase 1 million shares of our common stock to Samstock, L.L.C.
The principal reason we are seeking your approval for additional
preferred stock is that we intend to issue a substantial portion of the newly
authorized shares to all of our stockholders in a rights offering. This event is
an important part of our capitalization plan. It is also an integral part of the
execution of our strategy for growing the Company, which now includes the
recently acquired Dining A La Card program. We are pleased to provide our
stockholders with the opportunity to further participate in the Company and its
future.
The Board of Directors has approved these proposals, and recommends
that our stockholders vote for these proposals. If the proposals are approved,
it is anticipated that the rights offering will commence promptly thereafter.
I urge you to sign, date, and promptly return the enclosed proxy in the
enclosed postage-paid envelope.
To complete this vote, the Company will hold the Special Meeting of
Stockholders at 10:00 a.m. (Central Time) on Thursday, October 7, 1999, at the
Intercontinental Hotel, 505 North Michigan Avenue, 11th Floor - Exchange Room
(South Tower), Chicago, Illinois 60611.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company.
YOUR VOTE IS IMPORTANT
The approval of the proposals in our proxy statement are necessary for
us to comply with our obligations under our existing credit facilities.
Please complete, date, sign and promptly return your proxy card in the
enclosed envelope regardless of whether you plan to attend the Special Meeting.
Sincerely yours,
Gene M. Henderson
President and Chief
Executive Officer
<PAGE>
TRANSMEDIA NETWORK INC.
11900 Biscayne Boulevard
Miami, Florida 33181
--------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
--------------------
Date: Thursday, October 7, 1999
Time: 10:00 a.m., Central Time
Place: Intercontinental Hotel
505 North Michigan Avenue
11th Floor - Exchange Room (South Tower)
Chicago, Illinois 60611
TO THE STOCKHOLDERS:
At our Special Meeting we will ask you to:
1. Approve an amendment to our Certificate of Incorporation, as
amended to date, to increase the number of shares which we are
authorized to issue to 70,000,000 shares of common stock, par
value $0.02 per share, and 10,000,000 shares of preferred stock,
par value $0.10 per share (from 20,000,000 shares of common stock
and 1,000,000 shares of preferred stock), and to clarify that the
existing authority of the Board of Directors to fix the
designations, preferences and rights of series of preferred stock
it issues from time to time includes the authority to establish
voting powers for individual series of the preferred stock;
2. Approve the issuance of five-year non-transferable warrants to
purchase 1,000,000 shares of our common stock to Samstock, L.L.C.;
3. Vote on such other business as may properly come before the
meeting or any adjournments or postponements thereof.
If you were a stockholder of record at the close of business on
September 10, 1999, you may vote at the Special Meeting.
<PAGE>
A list of our stockholders as of the close of business on September 10,
1999 will be available for inspection by you during normal business hours from
10:00 a.m., September 27, 1999 through 5:00 p.m., October 6, 1999 at the
Company's Chicago offices located at 20 North Wacker Drive, Suite 916, Chicago,
Illinois 60606.
By Order of the Board of Directors,
KATHRYN M. FERARA
Secretary
Miami, Florida
September 16, 1999
YOUR VOTE IS IMPORTANT
In order to ensure your representation at the Special Meeting, you are
requested to complete, sign and date the enclosed proxy card as promptly as
possible and return it in the enclosed envelope.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
INFORMATION ABOUT THE SPECIAL MEETING AND VOTING....................................................................1
Why Did You Send Me This Proxy Statement?......................................................................1
How Many Votes Do I Have?......................................................................................1
What Proposals Will Be Addressed At The Special Meeting?.......................................................1
How Do I Vote In Person?.......................................................................................2
Why Would The Special Meeting Be Postponed?....................................................................2
How Do I Vote By Proxy?........................................................................................2
May I Revoke My Proxy?.........................................................................................3
Where Are Transmedia's Principal Executive Offices?............................................................3
What Vote Is Required To Approve Each Proposal?................................................................3
Are There Any Dissenters' Rights Of Appraisal?.................................................................4
Who Bears The Cost Of Soliciting Proxies?......................................................................4
BACKGROUND..........................................................................................................4
Introduction...................................................................................................4
Standby Commitment............................................................................................11
Increase in Samstock's Interest in Transmedia.................................................................12
Use of Proceeds...............................................................................................13
Board of Directors' Review and Approval of the Financing Arrangements.........................................13
PROPOSAL NO. 1:
TO AMEND THE CERTIFICATE OF INCORPORATION.....................................................................14
Purpose of Request for Increase in Authorized Shares of Capital Stock.........................................14
Vote Required ...............................................................................................15
Board Recommendation..........................................................................................15
PROPOSAL NO. 2:
TO APPROVE THE ISSUANCE OF WARRANTS...........................................................................16
Vote Required for Approval of Proposal 2......................................................................16
OTHER PROPOSED ACTION..............................................................................................16
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS....................................................................17
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON ..........................................................21
Director Relationships........................................................................................21
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
The GAMI Loan ................................................................................................21
Standby Purchase Agreement....................................................................................21
INDEPENDENT ACCOUNTANTS............................................................................................22
OTHER BUSINESS.....................................................................................................22
PROPOSALS OF STOCKHOLDERS..........................................................................................22
WHERE YOU CAN FIND MORE INFORMATION................................................................................22
EXHIBIT A
- ---------
CERTIFICATE OF AMENDMENT TO THE CERTIFICATE
OF INCORPORATION OF TRANSMEDIA NETWORK INC....................................................................24
</TABLE>
ATTACHMENT: PROXY CARD
ii
<PAGE>
TRANSMEDIA NETWORK INC.
------------------------------------
PROXY STATEMENT
------------------------------------
SPECIAL MEETING OF STOCKHOLDERS
to be held on Thursday, October 7, 1999
INFORMATION ABOUT THE SPECIAL MEETING AND VOTING
Why Did You Send Me This Proxy Statement?
We have sent you this proxy statement and the enclosed proxy card
because the Board of Directors of Transmedia Network Inc., a Delaware
corporation, is soliciting your proxy vote at a Special Meeting of Stockholders.
This proxy statement summarizes the information you need to know to vote at the
Special Meeting. However, you do not need to attend the Special Meeting to vote
your shares. Instead, you may complete, sign and return the enclosed proxy card.
How Many Votes Do I Have?
We will be sending this proxy statement, the attached Notice of Special
Meeting and the enclosed proxy card on or about September 20, 1999. Stockholders
who owned our common stock at the close of business on September 10, 1999 (the
"Record Date") are entitled to one vote for each share of common stock they held
on that date, on all matters properly brought before the Special Meeting. The
total number of shares and the total votes at the Special Meeting is 13,352,709.
What Proposals Will Be Addressed At The Special Meeting?
We will address the following proposals at the Special Meeting:
1. The amendment of our Certificate of Incorporation, as amended to date,
to increase the number of shares of capital stock which we are
authorized to issue to 70,000,000 shares of common stock, par value
$0.02 per share, and 10,000,000 shares of preferred stock, par value
$0.10 per share (from 20,000,000 shares of common stock and 1,000,000
shares of preferred stock), and to clarify that the existing authority
of the Board of Directors to fix the designations, preferences and
rights of series of preferred stock it issues from time to time
includes the authority to establish voting powers for individual
series of the preferred stock.
2. The approval of the issuance of five-year warrants to purchase up to
1,000,000 shares of our common stock, with an exercise price per share
equal to the average closing price per
<PAGE>
share of the common stock for the 20 days preceding the closing of a
rights offering, to Samstock, L.L.C. ("Samstock") in consideration of
certain financing arrangements, contingent upon stockholder approval of
Proposal 1.
3. The transaction of such other business as may properly come before the
Special Meeting or any adjournment thereof.
How Do I Vote In Person?
If you plan to attend the Special Meeting at 10:00 a.m. Central Time in
Chicago, Illinois on Thursday, October 7, 1999, or a later date due to
postponement, and vote in person, we will provide you with a ballot when you
arrive. However, if your shares are held in the name of your broker, bank or
other nominee, you must bring a power of attorney executed by the broker, bank
or other nominee that owns the shares of record for your benefit and authorizing
you to vote the shares.
Why Would The Special Meeting Be Postponed?
The Special Meeting will be postponed if a quorum is not present on
October 7, 1999. If more than half of all shares of stock entitled to vote at
the Special Meeting are present in person or by proxy, a quorum will be present
and business can be transacted at the Special Meeting. If a quorum is not
present, the Special Meeting may be postponed to a later date when a quorum is
obtained. Abstentions and broker non-votes are counted for purposes of
determining the presence or absence of a quorum for the transaction of business,
but are not counted as affirmative votes for purposes of determining whether a
proposal has been approved.
In addition, if sufficient votes rendered in person or by proxy in
favor of any one of the proposals set forth in this proxy statement are not
received on the date of, or prior to the conclusion of, the Special Meeting, we
may, in our sole discretion, propose one or more adjournments of the Special
Meeting to permit us to solicit more proxies. Any such adjournment will require
the affirmative vote of the holders of a majority of common stock present in
person or by proxy at the Special Meeting.
How Do I Vote By Proxy?
Whether you plan to attend the Special Meeting or not, we urge you to
complete, sign and date the enclosed proxy card and return it promptly in the
envelope provided. Returning the proxy card will not affect your ability to
attend the Special Meeting and vote.
If you properly fill in your proxy card and send it to us in time to
vote, your "proxy" (one of the individuals named on your proxy card) will vote
your shares as you have directed. If you sign the proxy card, but do not make
specific choices, your proxy will vote your shares as recommended by the Board
as Directors as follows:
2
<PAGE>
o FOR the approval of an amendment to our Certificate of
Incorporation, as amended to date, to increase the number of
shares of capital stock which we are authorized to issue to
70,000,000 shares of common stock and 20,000,000 shares of
preferred stock (from 20,000,000 shares of common stock and
1,000,000 shares of preferred stock), and to clarify that the
existing authority of the Board of Directors to fix the
designations, preferences and rights of series of preferred stock
it issues from time to time includes the authority to establish
voting powers for individual series of the preferred stock.
o FOR the approval of the issuance of warrants to purchase up to
1,000,000 shares of our common stock, with an exercise price per
share equal to the average closing price per share of the common
stock for the 20 days preceding the closing of a rights offering,
to Samstock.
May I Revoke My Proxy?
If you give a proxy, you may revoke it at any time before it is
exercised. You may revoke your proxy in any one of three ways:
o You may send in another proxy with a later date.
o You may notify us in writing (by you or your attorney authorized
in writing or, if the stockholder is a corporation, under its
corporate seal, by an officer or attorney of the corporation), at
our principal executive offices before the Special Meeting, that
you have revoked your proxy.
o You may vote in person at the Special Meeting.
Where Are Transmedia's Principal Executive Offices?
Our principal executive offices are located at 11900 Biscayne
Boulevard, Miami, Florida 33181.
What Vote Is Required To Approve Each Proposal?
Proposal 1: To amend our Certificate of Incorporation, as amended to
date, to increase the number of shares of capital stock which the Company is
authorized to issue to 70,000,000 shares of common stock and 10,000,000 shares
of preferred stock (from 20,000,000 shares of common stock and 1,000,000 shares
of preferred stock) and to clarify that the existing authority of the Board of
Directors to fix the designations, preferences and rights of series of preferred
stock it issues from time to time includes the authority to establish voting
powers for individual series of the preferred stock.
3
<PAGE>
The affirmative vote of the holders of a majority of the shares of
common stock outstanding on the Record Date and entitled to vote will be
required to approve the amendment to our Certificate of Incorporation.
Abstentions and broker non-votes are not affirmative votes and, therefore, will
have the same effect as votes against this proposal.
Proposal 2: The approval of the issuance of warrants to purchase up to
1,000,000 shares of our common stock, with an exercise price per share equal to
the average closing price per share of the common stock for the 20 days
preceding the closing of a rights offering, to Samstock.
Proposal 2 must be approved by a majority of the votes cast on the
proposal, provided that the total votes cast represent more than 50% of all
common stock outstanding on the Record Date and entitled to vote on the
proposal. Abstentions and broker non-votes will have no effect, other than to
render more difficult obtaining votes constituting 50% of all common stock
outstanding on the Record Date.
Any other matter will be approved by a majority of the votes cast,
except as may otherwise be provided in our Certificate of Incorporation or
By-laws, by the rules of the New York Stock Exchange or by the General
Corporation Law of the State of Delaware. Abstentions and broker non-votes will
have no effect with respect to any other matter.
Are There Any Dissenters' Rights Of Appraisal?
The Board of Directors has not proposed any action for which the laws
of the State of Delaware, the Certificate of Incorporation or By-laws of
Transmedia provide a right to stockholders to dissent and obtain payment for
their shares.
Who Bears The Cost Of Soliciting Proxies?
We will bear the cost of soliciting proxies in the accompanying form
and will reimburse brokerage firms and others for those expenses involved in
forwarding proxy materials to beneficial owners and soliciting their execution.
We have made arrangements with brokers and other custodians, nominees and
fiduciaries to send proxies and the proxy materials to their principals. We have
engaged the firm Georgeson & Company to assist us in the distribution and
solicitation of proxies and have agreed to pay a fee of $7,500 plus
out-of-pocket costs and expenses for these services.
BACKGROUND
Introduction
Over the past year, we have continued to expend significant amounts of
funds in support of our operations and to fund an expanded marketing campaign
related to new member
4
<PAGE>
solicitations. We also recently made a major investment in the acquisition of
the Dining A La Card program. The proposals before you are being made to enable
Transmedia to raise the capital it needs to comply with its financial covenants
under certain financing arrangements and to provide funds for its working
capital requirements. In particular, the amendments to our certificate of
incorporation, if approved, will provide us with the ability to raise additional
funds, if needed, from time to time through the issuance of our equity
securities.
A principal requirement for additional funding was to complete in June
1999 the purchase from SignatureCard, Inc., a subsidiary of Montgomery Ward &
Co., Incorporated, of assets related to a discount dining membership program
SignatureCard operated under the Dining A La Card trade name and service mark.
While Transmedia cardmembers receive distinctive Transmedia cards which they
present to participating merchants, members of the Dining A La Card program
register one of their nationally known credit cards with the program and use
this registered credit card at restaurants participating in the Dining A La Card
program. The assets we acquired from SignatureCard included various intellectual
property rights and computer software, membership and merchant data,
rights-to-receive and, most significantly, a registered card platform, among
other things. As consideration for the assets, we (1) paid SignatureCard
$35,000,000 in cash at closing (representing the estimated amount of the cash
funded by SignatureCard for certain "qualified" rights-to-receive from merchants
participating in the Dining A La Card program), (2) issued to SignatureCard
400,000 shares of our common stock, and (3) issued to SignatureCard a three-year
option to purchase an additional 400,000 shares of our common stock at a price
of $4.00 per share. In addition, during the two-year period following the
closing, we have agreed to share with SignatureCard certain amounts received in
excess of the amount funded at closing in respect of "non-qualified"
rights-to-receive. SignatureCard may, at any time between January 1, 2000 and
June 30, 2002, require us to repurchase all or part of the 400,000 shares we
issued at the closing at a price of $8.00 per share. In connection with this
acquisition, we paid a fee for transaction advisory services to Equity Group
Investments, L.L.C., an affiliate of Samstock ("Equity Group"), of $386,000.
To finance this acquisition, we obtained a $35,000,000 senior secured
revolving bridge loan from The Chase Manhattan Bank (of which $29,000,000 was
drawn down at the closing of the Dining A La Card acquisition) and a $10,000,000
term loan from GAMI Investments, Inc., an affiliate of Samstock, which is
unsecured and subordinated to the Chase bridge loan. The Chase bridge loan
accrues interest, at our election, at either (1) one month LIBOR plus 1.25% or
(2) the greater of the prime rate (as announced by Chase in New York, New York)
plus 0.25% or the federal funds effective rate plus 1.75%. It is payable on
December 30, 1999 or upon the earlier effectiveness of a securitization facility
for the Dining A La Card rights-to-receive that we acquired. The Chase bridge
loan is secured by liens on substantially all of our assets (including those
purchased in the acquisition), as well as the stock of our three principal
subsidiaries: Transmedia Restaurant Company Inc., Transmedia Service Company
Inc. and TMNI International Incorporated, but excluding those assets of ours
that are subject to an existing securitization facility. The agreement contains
customary events of default, as well as a cross default to all other material
indebtedness, including our existing securitization facility and the
5
<PAGE>
GAMI loan. We intend to replace the bridge loan with a securitization facility
of the Dining A La Card rights-to-receive to be arranged through Chase.
The GAMI loan bears interest at the prime rate (as announced by Chase
in New York, New York) plus 4%, and is payable on December 30, 1999 or upon the
earlier closing of a rights offering. The terms of the GAMI loan agreement
require us to conduct a rights offering of a new series of preferred stock and
to use the proceeds to repay all outstanding amounts under this loan. As
described below, Samstock has agreed to act as a standby purchaser in connection
with the rights offering whereby, after exercising its initial rights and any
additional subscription privileges, it will purchase any shares not otherwise
subscribed for by our other stockholders.
The terms of this loan required us to pay to GAMI at the loan closing a
cash fee of $500,000, which is reimbursable to us upon the completion of the
rights offering and the issuance to Samstock of warrants to purchase 1,000,000
shares of our common stock in consideration of its obligation to act as a
standby purchaser (as described below) and of GAMI's provision of the loan. If
the rights offering is not consummated or the warrants are not issued for any
reason (including the failure of stockholders to approve both Proposals 1 and
2), we are required to pay GAMI an additional $500,000 fee.
The failure to meet certain requirements relating to the rights
offering (including the failure of stockholders to approve Proposals 1 and 2)
would also constitute a default under the GAMI loan and would enable GAMI to
accelerate all amounts due. In such event, various standstill covenants binding
Samstock and its affiliates (which currently prohibit Samstock and its
affiliates, subject to certain limitations, from acquiring additional securities
of Transmedia, soliciting proxies in opposition to the recommendation of a
majority of our disinterested directors, forming "groups" for the purpose of
acquiring, voting or disposing of our voting securities, or soliciting bidders
for Transmedia, among other things, until March 2003) would automatically
terminate, and Samstock would have the right to designate additional directors
to our Board of Directors so that the total number of Samstock designees on our
Board would constitute a majority. In addition, the declaration of a default
under the GAMI loan would trigger a default under the Chase bridge loan and
under our existing securitization facility.
On August 5, 1999, the New York Stock Exchange notified us of the
pending adoption of amendments to its continued listing criteria and of
Transmedia's noncompliance with the new standards. In accordance with the
requirements of the notification, Transmedia submitted to the Exchange its plan
to come into compliance with the new criteria. On September 16, 1999, we were
advised by the Exchange that our plan has been accepted and that we will
continue to be a listed company on the Exchange. Transmedia's performance
relative to the plan of compliance is subject to monitoring by the Exchange over
the next six fiscal quarters. The rights offering described below is intended,
in part, to position Transmedia to come into compliance with these standards.
6
<PAGE>
Rights Offering for Series A Preferred Stock
Generally. The GAMI loan agreement obligates us to conduct a
$10,000,000 rights offering for shares of a newly created series of convertible
preferred stock (the "Series A preferred shares"). Under the offering, we will
distribute to each record holder of common stock, free of charge,
non-transferable rights to purchase one Series A preferred share for a specified
number of shares of common stock held as of the record date for the rights
offering (the "basic subscription privilege"). The actual number of shares of
common stock a record date stockholder will be required to hold in order to be
eligible to purchase one Series A preferred share will be determined by dividing
the number of shares of common stock outstanding on the record date for the
rights offering by the total number of Series A preferred shares to be offered.
The total number of Series A preferred shares to be offered to stockholders will
be determined by dividing $10,000,000 by the subscription price per share. The
subscription price for each Series A preferred share will equal 70% of the
closing sales price of the common stock as of a date as near as practicable to
the commencement of the offering. During the month of August 1999, the average
closing sales price per share of common stock as reported by the New York Stock
Exchange was $3.1131. For purposes of illustration, if the closing sales price
of the common stock immediately preceding the commencement of the offering were
$3.11, the following information would apply:
EXAMPLE
<TABLE>
<CAPTION>
<S> <C>
o Subscription price.........................................................................$2.18 per share
o Total number of Series A preferred shares to be offered..........................................4,587,156
o Subscription ratio..............................................................................1 to 2.91*
</TABLE>
- --------------
* Means that one Series A preferred share may be purchased for every 2.91
shares of common stock held. This ratio assumes that 13,352,709 shares
of common stock will remain outstanding as of the record date for the
offering.
Each stockholder who exercises his or her basic subscription privilege
in full will also have the right to subscribe for and purchase a pro rata share
of all shares not otherwise subscribed for by our other stockholders (the
"oversubscription privilege"). Samstock has agreed to exercise its basic
subscription privilege in full and to purchase additional Series A preferred
shares to the extent there are any unexercised rights. It is expected that the
offering will remain open for a period of at least 20 days, unless we elect to
extend it. No partial or fractional rights will be issued or exercisable and no
partial or fractional shares of the Series A Preferred Stock will be issued.
We anticipate commencing the offering as soon as practicable after
stockholder approval of Proposals 1 and 2 is obtained. This solicitation is not
an offer to sell the Series A preferred shares nor a solicitation to buy Series
A preferred shares. The offering will be made only by
7
<PAGE>
means of a prospectus, which is a part of our registration statement filed with
the Securities and Exchange Commission (the "SEC").
Preferred Stock. The Board of Directors has the authority, within the
limitations and restrictions stated in our Certificate of Incorporation, to
provide by resolution for the issuance of shares of preferred stock, in one or
more classes or series, and to fix the rights, preferences, privileges and
restrictions thereof, including the powers, designations, preferences and
relative, participating, optional or other special rights, qualifications,
limitations or restrictions thereon. The number of authorized shares of
preferred stock may be increased or decreased by the affirmative vote of the
holders of a majority of the outstanding common stock, without a vote of the
holders of the preferred stock, or any series thereof, unless a vote of those
holders is required pursuant to the resolutions establishing the series of
preferred stock. The issuance of preferred stock could have the effect of
decreasing the market price of the common stock and could adversely affect the
voting and other rights of the holders of common stock.
Series A Preferred Shares. The shares designated as Series A preferred
shares will be senior convertible redeemable preferred stock. In various places
in the following description, we make reference to the example set forth above,
in which we assume a subscription price of $2.18 per share. This price is used
herein for illustrative purposes only and is in no way intended to predict the
actual offering price per Series A preferred share, which may be higher or lower
than that amount. The actual subscription price per Series A preferred share
will equal 70% of the closing sales price of the common stock as of a date as
near as practicable to the commencement of the rights offering and will be set
forth in the prospectus delivered in connection with the offering.
Dividends. The Series A preferred shares will be entitled to receive,
when, as and if declared by the Board of Directors and to the extent of funds
legally available for the payment of dividends, cash dividends per share at the
rate per annum of 12% of the liquidation preference, of which amount the sum of
at least 6% of the liquidation preference is payable quarterly in arrears on the
first business day of January, April, July and October ("current dividends").
Dividends in the amount of 6% of the liquidation preference will not be payable
currently but will be deferred, accrue and be payable upon a conversion,
redemption or liquidation, dissolution or winding up of Transmedia ("deferred
dividends"). The liquidation preference per share will be equal to the
subscription price per share. For purposes of illustration, if the subscription
price were $2.18 (which price is based upon 70% of the average closing price of
the common stock during the month of August 1999), dividends would accrue at the
rate of $0.26 per share, at least $0.13 of which would be payable as current
dividends and $0.13 of which would be deferred dividends. Transmedia, however,
may choose to pay any or all deferred dividends in cash at any time. Dividends
will accrue from and including the issue date to and including the date on which
the preferred stock is redeemed or converted or to and including the date on
which the liquidation preference is paid thereon. To the extent not paid,
current and deferred dividends will be cumulative. The Series A preferred shares
will be entitled to receive cash dividends on an as-
8
<PAGE>
converted basis equal to the common stock (without payment for fractional shares
of common stock), if dividends are paid on common stock.
If Transmedia defaults in its obligation to pay any portion of current
dividends when due (such portion, a "past due current dividend"), the holders
shall be entitled to receive, when, as and if declared by the Board of Directors
and to the extent funds are legally available for the payment of dividends, an
additional dividend per share ("additional dividends") at an annual rate equal
to the per share amount of the past due current dividend, multiplied by the
prime rate of interest plus 6% for the first 90 days of the default, increasing
by an additional 1/2% at the beginning of each subsequent 90 day period up to a
maximum rate of prime plus 7 1/2% per annum. All additional dividends shall be
cumulative from the dividend payment date on which the default giving rise to a
past due current dividend had occurred.
Conversion. Each whole share of Series A preferred stock is convertible
into common stock at any time at the option of the holder and, at any time after
the third anniversary of the closing of the rights offering (upon satisfaction
of certain conditions), at our option. The number of shares of common stock
issuable upon any conversion will be determined by dividing the liquidation
preference (which will equal the Series A preferred subscription price, or $2.18
in the example), plus accrued but unpaid current, additional (if any) and
deferred dividends by the Series A conversion price then in effect. The
conversion price will initially be fixed at the liquidation preference (or $2.18
in the example), but is subject to adjustment on customary terms to avoid
dilution in the event of a merger, stock split, recapitalization or other
similar event or an issuance of common stock below the conversion price then in
effect.
We will have the right to require a conversion of the preferred stock
into our common stock if (1) the closing price of the common stock at any time
after such third anniversary exceeds an amount equal to two times the
liquidation preference (approximately $4.36 in our example), plus accrued and
unpaid current, additional (if any) and deferred dividends, for 30 consecutive
days, or (2) we complete an underwritten public offering of our equity
securities which results in gross proceeds to Transmedia or selling stockholders
of at least $20 million and either the price to public of the securities sold or
the average of the high and low sales price of our common stock on the date of
the closing of the public offering is not less than the conversion price then in
effect, provided that we effect the conversion within 90 days thereafter.
Holders of a majority of the outstanding Series A preferred shares also will
have the right to require us to convert all outstanding Series A preferred
shares at any time following the closing of the rights offering.
Voting. The Series A preferred shares will vote together with the
common stock on all matters which are submitted to a vote of the stockholders,
on the basis of one vote for each Series A preferred share outstanding. In
addition, if and whenever current dividends payable on the Series A preferred
shares are in arrears and unpaid in an aggregate amount equal to or exceeding
the amount of current dividends due and payable thereon for six (6) quarterly
dividend periods (consecutive or otherwise), then the number of directors
constituting the Board of Directors shall
9
<PAGE>
be increased by two, and the Series A preferred shares, voting as a class, will
have the right to elect two directors to fill the newly-created directorships.
The right to elect directors will remain in effect until all cumulative current
dividends and all additional dividends with respect to the current dividends
have been paid in full.
Subordination. Upon a liquidation, dissolution or winding up of
Transmedia, the holders of Series A preferred shares would be entitled to
receive, in cash after provisions for the payment of our creditors and to the
extent of any remaining funds, a sum per share equal to the liquidation
preference (or $2.18 in our illustration) plus all accrued but unpaid current
dividends, additional dividends and deferred dividends thereon, before any
amounts are paid to holders of common stock. If amounts available for
distribution to stockholders are insufficient to permit payment to all holders
of Series A preferred shares of this preferential amount, then Transmedia's
entire funds available to holders of Series A preferred shares will be
distributed ratably among the holders in proportion to the number of Series A
preferred shares owned. Upon liquidation (other than a "deemed liquidation
event" described below), after payment of the amount described above, any
additional amounts available for distribution will be distributed among the
holders of the Series A preferred shares and common stock pro rata on an
as-converted basis.
If Transmedia consolidates or merges into another entity, if Transmedia
sells or transfers all or substantially all of its assets, or if a majority of
its outstanding stock is sold, resulting in stockholders immediately prior to
the sale owning less than 50% of its voting securities, Transmedia will treat
that event as a liquidation, dissolution or winding up (a "deemed liquidation
event"), unless the transaction is approved by the holders of majority of the
then outstanding Series A preferred shares. From and after the date of a deemed
liquidation, all rights of the holders of Series A preferred shares, as such,
will cease and terminate, and each Series A preferred share shall automatically
be canceled and retired and shall cease to exist and no consideration shall be
delivered or deliverable in exchange for the share other than the right to
receive payment of the preferential amount described above.
Redemption. Beginning on the fifth anniversary of the closing of the
rights offering, and terminating ninety (90) days thereafter, (1) each holder of
Series A preferred shares may cause Transmedia to redeem all, but not less than
all, of the Series A preferred shares then held by the holder, or (2) Transmedia
may elect to redeem all of the Series A preferred shares then outstanding, in
each case at a redemption price per share equal to the liquidation preference
(or $2.18 in our illustration) plus all accrued but unpaid current dividends,
additional dividends and deferred dividends thereon (the "redemption price"). In
either case, however, we may choose to effect the redemption in one-third
increments ratably during the fifth, sixth and seventh years following the
closing of the rights offering, subject to the holders' prior right of
conversion. In the event that we do not have sufficient funds legally available
to redeem the total number of shares requested or required to be redeemed, we
will use those funds which are legally available to redeem the maximum number of
shares, ratably, (1) among the holders then requesting redemption (in the event
of a redemption at a holder's election) or (2) among all holders (in the event
of a redemption at our election). If Transmedia defaults in its obligation to
redeem any
10
<PAGE>
shares required to be redeemed on a redemption date, then (1) for purposes of
calculating the redemption price applicable to these unredeemed shares, the
dividend rate shall be deemed increased to the prime rate then in effect (as
announced by The Chase Manhattan Bank) plus 6% for the first 90 days of the
default, increasing by an additional 1/2% at the beginning of each 90-day period
thereafter up to a maximum rate of the prime rate then in effect plus 7 1/2% per
annum, and (2) the conversion price applicable to the defaulted shares shall be
reduced by 50% of the conversion price then in effect, until these unredeemed
shares are redeemed.
Standby Commitment
Generally. In connection with the rights offering, Samstock has agreed
to act as a standby purchaser to ensure that $10,000,000 in proceeds are raised.
Transmedia is required to use all proceeds of the offering to repay the
outstanding principal amount of the GAMI loan. See "Use of Proceeds" below.
Under the agreement, Samstock is obligated to exercise its basic subscription
privilege in full and to purchase, at the subscription price, all Series A
preferred shares offered pursuant to the rights offering which are not
subscribed for by other stockholders (including pursuant to any oversubscription
privilege).
The obligation of Samstock to effect the foregoing purchases is subject
to various conditions, including (1) approval by you, our stockholders, of both
Proposals 1 and 2, (2) the expiration or termination of any required waiting
period applicable to the transactions contemplated by the standby purchase
agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and
(3) the accuracy and completeness of Transmedia's representations and warranties
contained in the agreement, among others.
The number of Series A preferred shares Samstock will be obligated to
purchase will depend upon the number of rights which remain unexercised upon
expiration of the exercise period of the rights. As of the date of this mailing,
we cannot determine the exact number of shares Samstock will be required to
purchase under the standby purchase agreement. If the number of Series A
preferred shares Samstock purchases under its standby commitment (other than
pursuant to its basic subscription privilege and its obligation to purchase
shares not subscribed for by EGI-Transmedia Investors, L.L.C. or its members
pursuant to its or their basic subscription privileges) exceeds 25% of the
amount issued as of the closing of the rights offering, then Samstock shall have
the right to designate an additional member to Transmedia's Board of Directors.
Seven members currently comprise our Board of Directors, two of whom have been
designated by Samstock. See " --Increase in Samstock's Interest in Transmedia"
below.
Fee. In consideration of Samstock's commitment under the standby
purchase agreement and of the provision of the $10,000,000 loan by GAMI,
Transmedia has agreed to issue to Samstock five-year non-transferable warrants
to purchase 1,000,000 shares of our common stock. The exercise price per share
of the warrant will be equal to the average of the closing prices of the common
stock for the 20 trading days preceding the closing of the rights offering.
Samstock will have the right to require Transmedia to register for resale the
Series A preferred
11
<PAGE>
shares acquired by it under its standby commitment, the shares of common stock
into which the Series A preferred shares are convertible, and the shares of
common stock for which the warrants are exercisable. If Proposals 1 and 2 are
not approved, we will (1) withdraw the rights offering, (2) not issue the
warrants, and (3) be required to make additional cash payments to GAMI under the
GAMI loan. In addition, if Proposals 1 and 2 are not approved, we will be in
default under the GAMI loan, the Chase bridge facility and, upon a declaration
of acceleration of indebtedness due under either the GAMI loan or the Chase
bridge facility, our existing securitization facility. See "Introduction" above.
Increase in Samstock's Interest in Transmedia
As of September 10, 1999, Samstock and its affiliates beneficially held
in aggregate 4,697,449 shares of our common stock, representing approximately
32.3% of our common stock outstanding. Of this amount, 2,241,695 shares were
owned by Samstock and its affiliate, EGI-Transmedia Investors, L.L.C.
("EGI-TNI"), 1,011,213 shares were issuable upon the exercise of warrants held
by Samstock and EGI-TNI, 1,278,314 shares were held by others but were subject
to voting and disposition restrictions in favor of Samstock and 166,227 shares
were issuable upon exercise of warrants held by others but would be, if
exercised, the subject of voting and disposition restrictions in favor of
Samstock. In our illustration, 4,587,156 Series A preferred shares will be
issued in connection with the rights offering. In such instance, if Samstock
were to exercise its basic subscription privilege and also purchase the number
of shares for which EGI-TNI or its members are permitted but fail to subscribe,
and Samstock were not required to purchase any additional Series A preferred
shares, it and its affiliates would beneficially own 6,426,627 shares of common
stock, or 32.2% of the total common stock outstanding, after giving effect to
(1) the immediate conversion of the Series A preferred shares into common stock,
and (2) the issuance to Samstock of warrants to purchase 1,000,000 shares of
our common stock in consideration of its entering into the standby purchase
agreement and of the provision by GAMI of the loan. If no other stockholders
validly subscribe for and purchase Series A preferred shares pursuant to the
rights offering, however, Samstock would be required to purchase all of the
shares offered. In such event, Samstock and its affiliates would beneficially
own 10,284,605 shares of common stock, or 51.1% of the total common stock
outstanding, after giving effect to (1) the immediate conversion of the Series A
preferred shares into common stock, and (2) the issuance to Samstock of the
aforementioned warrants.
The holders of a majority of the outstanding Series A preferred shares
offered pursuant to the rights offering will have the right to require
Transmedia to convert all outstanding Series A preferred shares at any time
following the closing of the offering. If Samstock, either pursuant to the
exercise of its subscription privileges or pursuant to its standby commitment,
acquires a majority of the Series A preferred shares, it would be able to
require conversion of the entire Series in its discretion.
In addition, Samstock and its affiliates have various rights to
designate members to our Board of Directors. If Samstock were required to
purchase more than 25% of the number of
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<PAGE>
Series A preferred shares issued upon exercise of rights (other than pursuant to
its basic subscription privilege and its obligation to purchase shares not
subscribed for by EGI-TNI or its members pursuant to its or their basic
subscription privileges), it will be entitled to designate an additional member
to Transmedia's Board of Directors, and thereby increase the size of the Board.
In addition, upon an event of default under the GAMI loan agreement, various
standstill covenants binding Samstock and its affiliates (which currently
prohibit Samstock and its affiliates, subject to certain limitations, from
acquiring additional securities of Transmedia (other than in connection with the
rights offering), soliciting proxies in opposition to the recommendation of a
majority of our disinterested directors, forming "groups" for the purpose of
acquiring, voting or disposing of our voting securities, or soliciting bidders
for Transmedia, among other things, until March 2003) would automatically
terminate, and Samstock would have the right to designate additional directors
to our Board so that the total number of Samstock designees on our Board would
constitute a majority. Furthermore, upon certain defaults in the payment of
dividends, our Board of Directors will be increased by two members and the
Series A preferred stock, as a class, will have the right to elect two directors
to fill the newly-created directorships.
Use of Proceeds
The proceeds from the rights offering will be used to repay the
$10,000,000 we borrowed under the GAMI loan.
Board of Directors' Review and Approval of the Financing Arrangements
The Board considered the terms of the transactions at two meetings held
on May 24, 1999 and June 25, 1999. Those terms, substantially in the form
currently proposed, were approved on June 25, 1999 by a vote of four to one,
with Mr. Gardner voting against approval and Messrs. Dammeyer and Handy
abstaining due to their association with Equity Group.
13
<PAGE>
PROPOSAL NO. 1:
TO AMEND THE CERTIFICATE OF INCORPORATION
In order to permit future capital raising activities and allow for the
financing arrangements, the Board of Directors recommends increasing the
authorized common stock from 20,000,000 shares to 70,000,000 shares and
increasing the authorized preferred stock from 1,000,000 shares to 10,000,000
shares. The 21,000,000 shares of capital stock currently authorized are not
sufficient to allow the issuance or conversion of the Series A preferred shares
to be offered under the rights offering or to satisfy our future capital raising
requirements. The proposed amendment to our Certificate of Incorporation also
clarifies that the exiting authority of the Board of Directors to fix the
designations, preferences and rights of series of preferred stock it issues from
time to time includes the authority to establish voting powers for individual
series of the preferred stock. The proposed amendment to our Certificate of
Incorporation is attached to this Proxy Statement as Exhibit A.
Purpose of Request for Increase in Authorized Shares of Capital Stock
We have issued 500,000 shares of common stock and various options and
warrants that may be exercised for, or converted into, shares of common stock in
the future. As of the Record Date, we have reserved for issuance in the future
additional shares of common stock, as follows:
<TABLE>
<CAPTION>
Shares of
Why Common Stock Would Be Issued Common Stock Issuable
- -------------------------------- ---------------------
<S> <C>
Exercise of 1,200,000 warrants outstanding 1,200,000
Exercise of additional Samstock warrants (contingent on approval 1,000,000
of Proposals 1 and 2)
Exercise of outstanding SignatureCard option 400,000
Initial conversion of Series A preferred shares 4,587,156(1)
Exercise of outstanding employee stock options 1,606,093(2)
------------------
Total 8,793,249(3)
</TABLE>
- --------
(1) For illustration purposes only. The figure presented reflects the
number of shares of common stock which would be issuable if (1)
4,587,156 Series A preferred shares were offered and sold (as is
contemplated by our illustration) and (2) all such Series A preferred
shares were immediately converted on the date of issuance. The actual
number of Series A preferred shares issued in connection with the
rights offering may differ. In addition, the number of shares of common
stock issuable upon conversion will increase over time to the extent of
accrued and unpaid dividends, and cannot be determined at this time.
(2) Includes vested and unvested options as of September 10, 1999.
(3) Reflects an estimate of the minimum number of issuable shares as
described in footnotes 1 and 2.
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<PAGE>
If Proposal 1 is approved, the Board of Directors may, at any time,
issue additional shares of common stock or preferred stock without any further
action or authorization by stockholders, unless applicable laws or the rules of
any stock exchange upon which our common stock is listed would require
stockholder approval.
Other than disclosed in this Proxy Statement, there are no present
plans, agreements or undertakings with respect to our issuance of any shares of
capital stock or related convertible securities. The issuance of any such
securities by us, however, could have anti-takeover effects insofar as such
securities could be used as a method of discouraging, delaying or preventing a
change in our control.
Vote Required
The affirmative vote constituting a majority of the shares of
outstanding common stock on the Record Date and entitled to vote will be
required to approve the amendment to our Certificate of Incorporation.
Abstentions and broker non-votes are not affirmative votes and, therefore, will
have the same effect as votes against this proposal.
If Proposal 1 is not approved by stockholders, Proposal 2 will NOT be
presented to or voted upon by the stockholders at the Special Meeting and the
Special Meeting may be adjourned to a later date.
Board Recommendation
The Board of Directors recommends a vote FOR the approval of Proposal
1.
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<PAGE>
PROPOSAL NO. 2:
TO APPROVE THE ISSUANCE OF WARRANTS
Subject to receipt of stockholder approval, Transmedia is obligated to
issue to Samstock warrants to purchase 1,000,000 shares of common stock in
consideration of the GAMI loan and Samstock's standby commitment in connection
with the rights offering. All of the aforementioned warrants will contain
restrictions on transfer and customary anti-dilution provisions for stock splits
or other recapitalizations.
Since the full exercise of the 1,000,000 warrants would result in the
issuance by us of approximately 7.5% of the common stock outstanding as of
September 10, 1999, as required by the rules of the Exchange, the stockholders
must vote in favor of this Proposal 2 in order for the shares of common stock
underlying the warrants to be approved for listing on the Exchange.
Vote Required for Approval of Proposal 2
Proposal 2 must be approved by a majority of the votes cast on the
proposal, provided that the total vote cast represents over 50% of all common
stock outstanding on the Record Date and entitled to vote on the proposal.
Abstentions and broker non-votes will have no effect, other than to render more
difficult obtaining votes constituting 50% of all common stock outstanding on
the Record Date.
Board Recommendation
The Board of Directors recommends a vote FOR the approval of Proposal
2.
OTHER PROPOSED ACTION
The Board of Directors does not intend to bring any other matters
before the Special Meeting, nor does the Board know of any other matters that
others intend to bring before the Special Meeting. If, however, other matters
not mentioned in this Proxy Statement properly come before the Special Meeting,
the persons named in the accompanying proxy card will vote thereon in accordance
with the recommendation of the Board of Directors.
16
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the beneficial ownership of common stock
of Transmedia as of the Record Date, by (i) each director, (ii) the Chief
Executive Officer and each of the other four most highly compensated executive
officers during the fiscal year ending September 30, 1998, (iii) all directors
and executive officers as a group (who were either directors or officers during
the fiscal year ending September 30, 1998), and (iv) to our knowledge,
beneficial owners of more than 5% of its common stock.
<TABLE>
<CAPTION>
Options and
Amount of Warrants
Common Stock Exercisable Percent
Beneficially Within of
Name and Address Owned 60 Days Total Class
- ---------------- ------ -------- ------- ------
<S> <C> <C> <C> <C>
F. Philip Handy ................................. 154,700 61,470 216,170(1) 1.61%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
Jack Africk ..................................... 63,695 29,000 92,695(2) *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
Rod F. Dammeyer................................. -- 5,000 5,000(3) *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
Herbert M. Gardner............................... 294,401 29,000 323,401(4) 2.42%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, NY 10022
George S. Wiedemann.............................. 1,000 25,000 26,000(5) *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
Lester Wunderman................................. 26,000 50,000 76,000(6) *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
Gene M. Henderson................................ 150,000 87,500 237,500(7) 1.77%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Options and
Amount of Warrants
Common Stock Exercisable Percent
Beneficially Within of
Name and Address Owned 60 Days Total Class
- ---------------- ------ -------- ------- ------
<S> <C> <C> <C> <C>
Stephen E. Lerch................................. -- 21,250 21,250(8) *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
Christine M. Donohoo............................. 15,000 -- 15,000(9) *
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, NY 10022
James M. Callaghan............................... 85,662 169,375 255,037(10) 1.89%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, NY 10022
Paul A. Ficalora................................. 186,035 32,500 218,535(11) 1.63%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, NY 10022
Melvin Chasen.................................... 840,009 -- 840,009(12)(13) 6.29%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
Samstock, L.L.C.,................................ 1,919,636 856,625 4,697,449(13)(14) 32.33%
EGI-Transmedia Investors, L.L.C., and 322,059 154,588
Halmostock Limited Partnership 438,305 166,227
(see footnote 3 for addresses)
Pioneering Investment Management Inc............. 1,286,000 -- 1,286,000(15) 9.63%
60 State Street
Boston, MA 02109
SignatureCard, Inc. ............................. 400,000 400,000 800,000(16) 5.82%
200 North Martingale Road
Schaumberg, IL 60173-2096
All directors and executive officers as a group
(13 persons).......................... 976,493 450,220 1,426,713 10.34%
- -------------------
* Represents less than 1%.
</TABLE>
(1) Includes for Mr. Handy (i) 154,700 shares beneficially owned by Mr.
Handy, (ii) options to purchase 5,000 shares of common stock at an
exercise price of $5.8750 per share, which options were granted under the
1996 Plan and expire in March 2008 and (3) warrants to purchase 56,470
shares of common stock, which are exercisable in equal parts at $6.00 per
share, $7.00 per share and $8.00 per share and which expire in March
2003.
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<PAGE>
(2) Includes for Mr. Africk (i) 63,695 shares beneficially owned by a family
corporation for which Mr. Africk exercises voting and investment
authority, (ii) options to purchase 7,500 shares of common stock at an
exercise price of $15.00 per share, which options were granted under the
1987 Stock Option and Rights Plan, as amended (the "1987 Plan"), and
expire in March 2004, (iii) options to purchase 5,000 shares of common
stock at an exercise price of $12.25 per share, which options were
granted under the 1987 Plan and expire in March 2005, (iv) options to
purchase 5,000 shares of common stock at an exercise price of $7.875 per
share, which options were granted under the 1996 Plan and expire in March
2006, (v) options to purchase 5,500 shares of common stock at an exercise
price of $4.3750 per share, which options were granted under the 1996
Plan and expire in June 2007, and (vi) options to purchase 6,000 shares
of common stock at an exercise price of $5.8750 per share, which options
were granted under the 1996 Plan and expire in March 2008. All of these
options are presently exercisable.
(3) Includes for Mr. Dammeyer options to purchase 5,000 shares of common
stock at an exercise price of $5.8750 per share, which options were
granted under the 1996 Plan and expire in March 2008.
(4) Includes for Mr. Gardner (i) 294,401 shares beneficially owned by Herbert
M. Gardner, (ii) options to purchase 7,500 shares of common stock at an
exercise price of $15.00 per share, which options were granted under the
1987 Plan and expire in March 2004, (iii) options to purchase 5,000
shares of common stock at an exercise price of $12.25 per share, which
options were granted under the 1987 Plan and expire in March 2005, (iv)
options to purchase 5,000 shares of common stock at an exercise price of
$7.875 per share, which options were granted under the 1996 Plan and
expire in March 2006, (v) options to purchase 5,500 shares of common
stock at an exercise price of $4.3750 per share, which options were
granted under the 1996 Plan and expire in June 2007, and (vi) options to
purchase 6,000 shares of common stock at an exercise price of $5.8750 per
share, which options were granted under the 1996 Plan and expire in March
2008. All of these options are presently exercisable. Does not include
3,834 shares held by Mr. Gardner's wife individually or as custodian for
their children, as to all of which shares Mr. Gardner disclaims
beneficial ownership.
(5) Includes for Mr. Wiedemann (i) 1,000 shares beneficially owned by Mr.
Wiedemann and (ii) options to purchase 25,000 shares of common stock at
an exercise price of $5.8750 per share, which options were granted under
the 1996 Plan and expire in March 2008.
(6) Includes for Mr. Wunderman (i) 25,000 shares beneficially owned by Mr.
Wunderman and (ii) options to purchase 50,000 shares of common stock at
an exercise price of $5.8570 per share, which options were granted under
the 1996 Plan and expire in March 2008.
(7) Includes for Mr. Henderson (i) 150,000 shares beneficially owned by Mr.
Henderson, (ii) options to purchase 62,500 shares at an exercise price of
$2.00 per share, which were granted under the 1996 Plan and expire in
October 2008 and (iii) options to purchase 25,000 shares at an exercise
price of $2.375 per share, which were granted under the 1996 Plan and
expire in October 2008. Does not include options which were granted under
the 1996 Plan to purchase 262,500 shares, which are not exercisable
within 60 days of September 10, 1999.
(8) Includes for Mr. Lerch (i) options to purchase 10,000 shares of common
stock at an exercise price of $5.25 per share, which options were granted
under the 1996 Plan and expire in February 2007, (ii) options to purchase
5,000 shares of common stock at an exercise price of $4.3750 per share,
which options were granted under the 1996 Plan and expire in April 2007,
and (iii) options to purchase 6,250 shares of common stock at an exercise
price of $4.5000 per share, which options were granted under the 1996
Plan and expire in August 2008. Does not include options which were
granted under the 1996 Plan to purchase 33,750 shares, which are not
exercisable within 60 days of September 10, 1999.
(9) Includes for Ms. Donohoo 15,000 shares beneficially owned by Ms.
Donohoo. Does not include options to purchase 150,000 shares at an
exercise price of $3.88 per share, which were granted under the 1996 Plan
and expire in February 2009. These options vest ratably over four years
from the date of the grant, subject to accelerated
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vesting upon a certain specified closing price over 20 consecutive
trading days of the common stock. None of these options are exercisable
within 60 days of September 10, 1999.
(10) Includes for Mr. Callaghan (i) 26,537 shares held in Mr. Callaghan's
Individual Retirement Account, (ii) options to purchase 84,375 shares of
common stock at an exercise price of $4.8333 per share, which options
were granted under the 1987 Plan and expire in May 2002, (iii) options to
purchase 33,751 shares of common stock at an exercise price of $7.4445
per share, which options were granted under the 1987 Plan and expire in
September 2003, (iv) options to purchase 7,500 shares of common stock at
an exercise price of $4.3750 per share, which options were granted under
the 1996 Plan and expire in April 2007, (v) options to purchase 37,500
shares of common stock at an exercise price of $5.8750 per share, which
options were granted under the 1996 Plan and expire in March 2008, and
(vi) options to purchase 6,250 shares of common stock at an exercise
price of $4.5000 per share, which options were granted under the 1996
Plan and expire in August 2008. All of these options are presently
exercisable. Does not include (i) options issued under the 1996 Plan to
purchase 26,250 shares, which are not exercisable within 60 days of
September 10, 1999, or (ii) 5,724 shares held in the Individual
Retirement Account of Mr. Callaghan's wife, as to all of such shares Mr.
Callaghan disclaims beneficial ownership.
(11) Includes for Mr. Ficalora (i) options to purchase 15,750 shares of common
stock at an exercise price of $7.4445 per share, which options were
granted under the 1987 Plan and expire in September 2003, (ii) options to
purchase 3,000 shares of common stock at an exercise price of $4.3750 per
share, which options were granted under the 1996 Plan and expire in April
2007, (iii) options to purchase 10,000 shares of common stock at an
exercise price of $5.8750 per share, which options were granted under the
1996 Plan and expire in March 2008, and (iv) options to purchase 3,750
shares of common stock at an exercise price of $4.5000 per share, which
options were granted under the 1996 Plan and expire in August 2008. All
of these options are presently exercisable. Does not include (i) options
to purchase 14,250 shares, which were granted under the 1996 Plan and are
not exercisable within 60 days of September 10, 1999, (ii) 6,075 shares
held by Mrs. Ficalora, and (iii) 1,350 shares held by Mr. Ficalora's
child, as to all of which shares Mr. Ficalora disclaims beneficial
ownership.
(12) Includes for Mr. Chasen (i) 461,131 shares held by Melvin Chasen, (ii)
178,100 shares held by a family partnership jointly controlled by Melvin
Chasen and Iris Chasen, and (iii) 200,778 shares held by Iris Chasen, the
wife of Mr. Chasen. Mr. Chasen disclaims beneficial ownership of 200,778
shares held by Iris Chasen. Pursuant to an Amended and Restated Agreement
Among Stockholders (the "Agreement Among Stockholders"), dated as of
March 3, 1998, among Samstock, L.L.C., EGI-Transmedia Investors, L.L.C.,
Melvin Chasen and Iris Chasen, and Transmedia, the Chasens' beneficially
owned shares are subject to shared voting and disposition power with
Samstock, L.L.C. and EGI-Transmedia Investors, L.L.C., which are
affiliates of Equity Group. The Agreement Among Stockholders will
terminate if Equity Group and its affiliates cease to own 5% in the
aggregate of Transmedia's voting securities.
(13) Includes 840,009 shares which are beneficially owned by Melvin Chasen and
Iris Chasen, but which are subject to the voting and disposition
restrictions contained in the Agreement Among Stockholders.
(14) Based in part: (i) upon information set forth in Amendment No. 1 to the
Schedule 13D filed on March 4, 1998 by Samstock, L.L.C., (ii) upon other
information available to the Company, and (iii) on a Stockholders'
Agreement (the "Stockholders' Agreement"), dated as of March 3, 1998,
among the referenced entities. According to the Stockholders' Agreement,
Halmostock Limited Partnership and its affiliates appointed Samstock,
L.L.C. and/or EGI-Transmedia Investors, L.L.C. its true and lawful
attorney and proxy, during the period of such Stockholders' Agreement, to
appear for, represent, and vote the shares held by each of them. The
warrants held by each of them are exercisable in equal parts at $6.00 per
share, $7.00 per share and $8.00 per share and expire in March 2003. In
addition, Samstock, L.L.C., EGI-Transmedia Investors, L.L.C., Halmostock
Limited Partnership and Transmedia entered into an Investment Agreement
in March 1998, whereby they agreed on (1) certain voting arrangements for
the nomination for election of directors, (2) limitations on their future
acquisition of voting securities in Transmedia for five years, and (3)
engaging in certain proxy solicitations and other specified actions for
five years unless approved by a majority of the
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"disinterested directors." The Investment Agreement will terminate if
they and their affiliates cease to collectively own 5% of the voting
securities of Transmedia. The addresses for these entities are as
follows: Samstock, L.L.C. and EGI-Transmedia Investors, L.L.C., each at
Two North Riverside Plaza, Chicago, Illinois 60606; Halmostock Limited
Partnership, at 21 W. Las Olas Boulevard, Fort Lauderdale, Florida 33301.
The Stockholders' Agreement will terminate if Equity Group and its
affiliates cease to own in the aggregate at least 5% of Transmedia's
voting securities outstanding.
(15) Based on Amendment No. 1 to Schedule 13G filed on January 14, 1999 by
Pioneering Investment Management Inc.
(16) Includes for SignatureCard, Inc. (i) 400,000 shares beneficially owned by
SignatureCard, Inc. and (ii) a three year option to purchase 400,000
shares at an exercise price of $4.00 per share. The option is not
exercisable until October 1999 and expires in June 2002.
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Director Relationships
Mr. Dammeyer is the Managing Partner of Equity Group, affiliates of which
are principal stockholders. Affiliates of Equity Group have provided us with the
$10,000,000 GAMI loan and entered into the standby purchase agreement. Messrs.
Dammeyer and Handy are Equity Group's nominees to Transmedia's Board of
Directors. See "Background."
The GAMI Loan
In June 1999, we entered into a $10,000,000 loan agreement with GAMI, an
affiliate of our largest stockholder, Samstock. We drew down the entire
$10,000,000 principal amount available under the loan agreement on June 30, 1999
to finance, in part, the acquisition of Dining A La Card. From the $10,000,000
loan proceeds we paid GAMI a $500,000 refundable loan fee and a $386,000
transaction advisory fee to Equity Group. Therefore, the net proceeds of the
loan were approximately $9,100,000. See "Background --Introduction." As of
August 31, 1999, $10,000,000 remained outstanding under this loan. The loan
accrues interest at the annual prime rate (as announced from time to time by The
Chase Manhattan Bank) plus 4% and is payable upon the closing of the rights
offering or December 30, 1999, whichever is earlier.
Standby Purchase Agreement
Samstock has agreed to act as a standby purchaser to ensure the sale, at
the subscription price, of all of the Series A preferred shares offered under
the rights offering. In consideration of Samstock's standby purchase commitment
and the provision of the GAMI loan described above, and subject to stockholder
approval of Proposals 1 and 2, Transmedia will issue to Samstock
non-transferable warrants to purchase 1,000,000 shares of our common stock. The
warrants will be exercisable over a five-year period at an exercise price equal
to the average of the closing price of the common stock during the 20
consecutive trading days preceding the closing of the rights offering. See
"Background --Standby Commitment" and "--Increase in Samstock's Interest in
Transmedia."
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INDEPENDENT ACCOUNTANTS
KPMG LLP audited Transmedia's financial statements for the fiscal year
ended September 30, 1998 and will audit Transmedia's financial statements for
the fiscal year ending September 30, 1999.
OTHER BUSINESS
It is not intended to bring before the Special Meeting any matters except
those proposed herein. Management is not aware at this time of any other matters
that are to be presented for action. If, however, any other matters properly
come before the meeting, the persons named as proxies in the enclosed form of
proxy intend to vote in accordance with their judgment on the matters presented.
PROPOSALS OF STOCKHOLDERS
Proposals, if any, of our stockholders that are intended to be presented
by such stockholders at our Annual Meeting of Stockholders in 2000 (the "Annual
Meeting") must be received by the Secretary of the Company no later than October
14, 1999 in order to be considered for possible inclusion in the proxy statement
and form of proxy relating to the Annual Meeting. Rule 14a-8 "Shareholder
Proposals" of the General Rules and Regulations under the Securities Exchange
Act of 1934 addresses when a company must include a stockholder's proposal in
its proxy statement and identify the proposal in its form of proxy when the
company holds an annual or special meeting of stockholders. Any proposals
submitted outside the processes of Rule 14a-8 must be received by December 27,
1999, to be considered for presentation at the Annual Meeting. All proposals
must be mailed to the Company's principal executive offices at 11900 Biscayne
Boulevard, Miami, Florida 33181, Attention: Secretary.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
public reference facilities in Washington, D.C., Chicago, Illinois and New York,
New York. Please call the SEC at 1-800-SEC-0330 for further information about
the public reference rooms. Our SEC filings are also available to the public on
the SEC web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we have
filed with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered a part of this proxy statement. We incorporate by reference the
following documents, which contain important about us and our finances:
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(1) Annual Report on Form 10-K for the fiscal year ended September
30, 1998;
(2) Quarterly Reports on Form 10-Q for the quarters ended December
31, 1998, March 31, 1999 and June 30, 1999;
(3) Current Reports on Form 8-K, filed on April 1, 1999 and July
14, 1999, as amended by the Current Report on Form 8-K/A filed
on September 14, 1999.
(4) Registration Statement on Form 8-A, filed on June 14, 1995.
Copies of each of Transmedia's Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, and Current Report on Form 8-K/A referred to above
accompany this Proxy Statement. You may request a copy of these filings, at no
cost, by writing or telephoning us at the following address:
Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, FL 33181
Attn.: Mr. Stephen E. Lerch
Executive Vice President
and Chief Financial Officer
Tel: (305) 892-3306
By Order of the Board of Directors,
KATHRYN M. FERARA
Secretary
Miami, Florida
September 16, 1999
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EXHIBIT A
---------
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
TRANSMEDIA NETWORK INC.
Gene M. Henderson and Kathryn M. Ferara certify that:
1. They are the President and Chief Executive Officer and the Secretary,
respectively, of Transmedia Network Inc., a Delaware corporation (the
"Corporation").
2. Article 4 of the Certificate of Incorporation of the Corporation is
hereby amended to read in its entirety as follows:
"FOURTH: Number of Shares.
1. The total number of shares of capital stock which the
Corporation shall have authority to issue is eighty million (80,000,000), of
which seventy million (70,000,000) shares shall be shares of Common Stock
(hereinafter called "Common Stock"), with a par value of two cents ($.02) per
share, and ten million (10,000,000) shares shall be shares of Preferred Stock
(hereinafter called "Preferred Stock"), with a par value of ten cents ($.10) per
share.
2. Authority is hereby expressly granted to the Board of
Directors of the Corporation, subject to any limitations prescribed by law, to
authorize the issuance of one or more series of Preferred Stock, and with
respect to each such series to fix by resolution or by resolutions the
provisions for the issuance of such series, including the voting powers, full or
limited, if any, other powers, if any, and the designations, preferences and
relative, participating, optional or other special rights, qualifications,
limitations or restrictions thereof. The number of authorized shares of
Preferred Stock may be increased or decreased (but not below the number of
shares thereof then outstanding) by the affirmative vote of the holders of a
majority of the outstanding Common Stock, without a vote of the holders of the
Preferred Stock, or of any series thereof, unless a vote of any such holders is
required pursuant to the resolution or resolutions establishing the series of
Preferred Stock."
3. The foregoing Certificate of Amendment of the Certificate of
Incorporation has been duly approved by the Board of Directors.
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IN WITNESS WHEREOF, this Certificate of Amendment, which amends in its
entirety Article 4 of the Certificate of Incorporation of this Corporation, and
which has been duly adopted in accordance with Section 242 of the General
Corporation Law of the State of Delaware, has been executed by its duly
authorized Officer the day of , 1999.
---- -----------
TRANSMEDIA NETWORK INC.
[Corporate Seal]
--------------------------------
Gene M. Henderson
President and Chief Executive
Officer
ATTEST:
- --------------------------
Kathryn M. Ferara
Secretary
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