<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a- 12
MPTV, INC.
(Name of Registrant as Specified In Its Charter)
MPTV, INC.
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies.
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies.
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
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4) Proposed maximum aggregate value of transaction.
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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 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>
MPTV, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on July __, 1996
---------------------
To The Stockholders:
The Annual Meeting of Stockholders of MPTV, Inc. (the "Company") will be
held at the Company's offices, 3 Civic Plaza, Suite 210, Newport Beach,
California 92660, on July __, 1996, at 2:00 p.m. for the following purposes:
1. To elect two directors to serve until the next Annual Meeting of
Stockholders and until their successors are duly elected and
qualified;
2. To consider and act upon proposed amendments of the Company's Articles
of Incorporation to:
(a) Effect a one-for-ten reverse stock split of the Company's Common
Stock, par value $.05 per share;
(b) Increase the number of authorized shares of Common Stock from
50,000,000 to 100,000,000 and ratify issuances of Common Stock in
excess of such 50,000,000 shares; and
(c) Authorize the issuance of 5,000,000 shares of Preferred Stock
with a par value of $.001 per share in one or more series from
time to time, with the rights, preferences and privileges and
other terms of each series to be determined by the Board of
Directors.
3. To ratify the appointment of Corbin & Wertz as the Company's
independent public accountants for the year ended December 31, 1995
and the year ending December 31, 1996.
4. To transact such other business as may properly come before the
Meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on June 14, 1996, as
the record date for determination of stockholders entitled to notice of and to
vote at the Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. HOWEVER,
WHETHER OR NOT YOU PLAN TO ATTEND, WE URGE YOU TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY CARD WITHOUT DELAY IN THE ACCOMPANYING ENVELOPE (TO
WHICH NO POSTAGE NEED BE AFFIXED IF MAILED IN THE UNITED STATES) SO THAT YOUR
SHARES MAY BE REPRESENTED AT THE MEETING.
JAMES C. VELLEMA
Chairman
July __, 1996
<PAGE>
MPTV, INC.
3 Civic Plaza, Suite 210
Newport Beach, California 92660
---------------------
PROXY STATEMENT
---------------------
GENERAL INFORMATION
SOLICITATION, REVOCATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of MPTV, Inc., a Nevada corporation (the
"Company"), in connection with the Annual Meeting of Stockholders (the
"Meeting") to be held at 2:00 p.m. on July __, 1996, at the Company's
offices, 3 Civic Plaza, Suite 210, Newport Beach, California 92660 and at any
and all adjournments thereof. It is anticipated that this Proxy Statement
and accompanying proxy will first be mailed to stockholders on or about July
__, 1996.
The accompanying proxy, if properly executed and returned, will be voted
as specified by the stockholder or, if no vote is indicated, the proxy will
be voted (i) FOR the Company's nominees for director, (ii) FOR the approval
of the amendments to the Articles of Incorporation to effect a one-for-ten
reverse stock split (the "Reverse Stock Split"), to effect an increase in the
number of authorized shares from 50,000,000 to 100,000,000 and ratify the
shares of Common Stock issued in excess of such 50,000,000, and to authorize
the issuance of 5,000,000 shares of Preferred Stock, and (iii) FOR the
ratification of the appointment of Corbin & Wertz, a corporation, as the
Company's independent public accountants for the year ending December 31,
1996. As to any other matter of business which may be brought before the
Meeting, a vote may be cast pursuant to the accompanying proxy in accordance
with the judgment of the persons voting the same, but management does not
know of any such other matter of business. A stockholder may revoke his or
her proxy at any time prior to the voting of shares by voting in person at
the Meeting or by filing with the Secretary of the Company a duly executed
proxy bearing a later date or an instrument revoking the proxy.
The costs of solicitation of proxies will be paid by the Company. In
addition to soliciting proxies by mail, the Company's officers, directors and
other regular employees, without additional compensation, may solicit proxies
personally or by other appropriate means. Banks, brokers, fiduciaries and other
custodians and nominees who forward proxy soliciting material to their
principals will be reimbursed their customary and reasonable out-of-pocket
expenses.
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<PAGE>
RECORD DATE AND VOTING RIGHTS
Only stockholders of record of the Company's Common Stock as of the close
of business on June 14, 1996 will be entitled to vote at the Meeting. On that
date, there were listed as outstanding 73,340,071 shares of Common Stock, which
constituted all of the outstanding voting securities of the Company, each of
which is entitled to one vote per share. A majority of the shares entitled to
vote, represented in person or by proxy, constitutes a quorum at the Meeting.
Abstentions and broker non-votes are counted as present for purposes of
determining the existence of a quorum.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of June 14, 1996,
relating to the beneficial ownership of the Company's Common Stock by (i) all
persons known by the Company to beneficially own more than 5% of the outstanding
shares, (ii) each director of the Company, and (iii) all executive officers and
directors of the Company as a group.
<TABLE>
<CAPTION>
NAME Number of Shares Percent
---- Beneficially Owned of Class
------------------ --------
<S> <C> <C>
James C. Vellema and 3,910,870(2) 5.3%
Kathryn M. Vellema,
joint tenants
The Donald G. Saunders 3,760,870 5.1%
and Bonnie Saunders 1987
Family Trust
32251 Peppertree Bend
San Juan Capistrano, CA
92675
Hurley C. Reed 50,000(3) *
Raymond Rasmussen(4) 532,000(5) *
All Directors and executive 4,492,870(2)(3)(5) 6.1%
officers as a group
(three persons)
</TABLE>
- - - ------------------------------
* Less than one percent.
(1) Unless otherwise indicated, the address of each of the persons listed above
is c/o MPTV, Inc., 3 Civic Plaza, Suite 210, Newport Beach, California
92660.
(2) Includes options to purchase 150,000 shares, all of which are exercisable
within 60 days of June 14, 1996.
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<PAGE>
(3) Comprised of options to purchase 50,000 shares, all of which are
exercisable within 60 days of June 14, 1996.
(4) Mr. Rasmussen has declined to stand for reelection to the Board of
Directors at this Annual Meeting. See "Proposal One - Election of
Directors."
(5) Includes options to purchase 525,000 shares, all of which are exercisable
within 60 days of June 14, 1996.
-3-
<PAGE>
PROPOSAL ONE - ELECTION OF DIRECTORS
GENERAL
The two directors to be elected at the Meeting will hold office until the
next Annual Meeting of Stockholders and until the election of their respective
successors. The nominees receiving the highest number of affirmative votes, up
to the number of directors to be elected, will be elected directors. Broker
non-votes and votes withheld have no legal effect. All proxies received by the
Board of Directors will be voted for the nominees listed below if no direction
to the contrary is given. In the event that any nominee is unable or declines
to serve, an event that is not anticipated, the proxies will be voted for the
election of any nominee who may be designated by the Board of Directors.
Raymond H. Rasmussen, a current member of the Company's Board of
Directors, has notified the Company that he does not wish to stand for
reelection to the Board of Directors at this Annual Meeting. Mr. Rasmussen
has not expressed any disagreements with the Company on any matter relating
to the Company's operations, policies or practices. The Company's Board of
Directors does not currently intend to nominate another candidate to fill the
vacancy that will be created, and will either amend the Company's Bylaws to
reduce the number of directors from three to two, or will fill the vacancy at
a later time.
The nominees for director are:
Name Age Director Since
---- --- --------------
James C. Vellema 57 1994
Hurley C. Reed 59 1993
James C. Vellema has served as Chairman of the Board and Chief Executive
Officer of MPTV since November 1994, and as Chief Financial Officer since
December 1993. He served as President and a Director of the Company from
December 1993 through October 1994. He also serves as the President and a
Director of CRE, which he founded in October 1992. From July 1989 to October
1992, Mr. Vellema served as President and a founder of Tamarack
Holdings/Reefshare, which developed and marketed timeshare intervals in certain
resort properties. From 1978 to 1989, he served as a business consultant in the
areas of product development and association management for Glen Ivy Financial
Group, Inc., a developer of 12 resort projects in the Western United States and
Hawaii. From 1972 to 1978, Mr. Vellema was the President of Donner Financial
Inc., a company involved in non-hotel timeshare development and sales.
Hurley C. Reed has served as President and Chief Operating Officer of MPTV
since November 1994, and as a Director of MPTV since December 1993. From
December 1993 through October 1994, he served as Executive Vice President of the
Company. Since August 1993, Mr. Reed has also served as the Executive Vice-
President of CRE, where he has been responsible for financial controls and
development functions. From 1987 to 1993, Mr. Reed served in various executive
management positions at Glen Ivy Financial Group, Inc. Mr.
-4-
<PAGE>
Reed initiated and developed the Glen Ivy Management Company which controlled 22
resorts and 30 associations with an annual budget of $25 million serving 50,000
timeshare owners. Mr. Reed's last position at Glen Ivy was Executive Vice-
President and Chief Operating Officer. For the period 1984 to 1986 Mr. Reed was
Eastern Regional Director for North American Companies and was responsible for
five major resorts in the Eastern United States. From 1966 to 1984, Mr. Reed
served as a senior executive with Owens Illinois, where he was involved in the
development of a headquarters building and a large scale high-value woodlands
portfolio. In 1976 Mr. Reed was promoted to Chief Executive Officer at Owens.
Mr. Reed received his MBA degree from the University of Illinois.
There are no family relationships among the officers or directors. There
are no understandings or agreements between the directors and officers, other
than in their capacity as such, pursuant to which such persons were named as an
officer or director. All directors serve until the next annual meeting of
stockholders or until their respective successors have been elected and shall
qualify.
INFORMATION CONCERNING BOARD MEETINGS AND COMMITTEES
The Company's Board of Directors held six meetings during the fiscal year
ended December 31, 1995, and also approved several actions pursuant to unanimous
written consents. The Company currently has no standing Executive, Audit,
Nominating or Compensation Committees.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT
Section 16 of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and holders of 10% or more of the Company's Common
Stock to file reports of ownership (Form 3) and changes in ownership (Forms 4
and 5) with the Securities and Exchange Commission ("SEC") and to furnish the
Company with copies of all such reports filed with the SEC. The Company does
not have any information which indicates that any director, executive officer or
10% stockholder of the Company during the year ended December 31, 1995, did not
timely report transactions as required under the Securities Exchange Act of
1934, with the exception of Forms 4 required to be filed by Messrs. Vellema,
Reed and Rasmussen evidencing the 1994 repricing and the 1995 extension of the
exercise period of options to purchase Common Stock. In making the foregoing
disclosure, the Company has relied solely on its review of copies submitted to
it of Forms 3, 4 and 5 filed by such persons with the SEC with respect to the
year ended December 31, 1995.
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<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for the
Company's fiscal year ended December 31, 1995, awarded to, earned by or paid to
the individuals serving as Chief Executive Officer of the Company during such
year and to certain other executive officers of the Company (collectively, the
"Named Executive Officers").
<TABLE>
<CAPTION>
Long Term
Compensation
------------
Annual Compensation Awards
------------------------------------------- ---------------
Securities
----------
Underlying
----------
Name and Principal Year Salary Bonus Other Options/SARs(#)
- - - ------------------ ---- ------ ----- ----- ---------------
Positions
- - - ---------
<S> <C> <C> <C> <C> <C>
James C. Vellema, 1995 $198,077 -- $97,000(2) --
Chairman of the 1994 $212,500 -- -- 150,000
Board and Chief 1993 $ 35,000 -- -- --
Executive and
Financial Officer(1)
Hurley C. Reed, 1995 $142,500 -- $11,000(4) --
President (3) 1994 $135,000 -- -- 50,000
1993 $ 20,000 -- -- --
</TABLE>
(1) Mr. Vellema became Chairman and Chief Executive Officer of MPTV in
November 1994.
(2) Includes approximately $97,000 of advances paid pursuant to Mr.
Vellema's employment agreement; excludes approximately $45,000 paid to
Mr. Vellema's spouse under a consulting agreement.
(3) Mr. Reed became President of the Company in November 1994.
(4) Includes approximately $11,000 of advances paid pursuant to Mr. Reed's
employment agreement.
OPTION GRANTS IN LAST FISCAL YEAR
No options were granted to any of the Named Executive Officers in the year
ended December 31, 1995.
-6-
<PAGE>
FISCAL YEAR OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
Shown below is information regarding unexercised stock options held by the
Named Executive Officers at December 31, 1995. No stock options were exercised
by the Named Executive Officers during 1995.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Unexercised Options At In-the-Money Options At
Fiscal Year End (#) Fiscal Year End (#)
---------------------- -----------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- - - ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James C. Vellema 150,000 --- $0 ---
Hurley C. Reed 50,000 --- $0 ---
</TABLE>
EMPLOYMENT AGREEMENTS
Effective January 1, 1994, James C. Vellema entered into a two-year
employment agreement (subject to automatic renewal on a year-to-year basis) to
serve as the Company's Chief Operating Officer. The agreement provides for
annual compensation of $300,000, in the form of a draw against commissions of
1.5% on all retail timeshare sales of the Company and 1% of the Company's pre-
tax net earnings. Mr. Vellema may also receive a bonus at the discretion of the
Board of Directors. In connection with the employment agreement, Mr. Vellema
was granted two-year options to purchase an aggregate of 150,000 shares of the
Company's Common Stock at a price of $2.50 per share (the option price was
lowered by the Board of Directors in November 1994 to $0.50 per share, and the
expiration date of the options was extended in 1995 to December 31, 1997).
Effective January 1, 1994, Hurley C. Reed entered into a two-year
employment agreement (subject to automatic renewal on a year-to-year basis) to
serve as the Company's Executive Vice President. The agreement provides for
annual compensation of $180,000, plus commissions of 0.5% on all retail
timeshare sales of the Company and 1.5% of the Company's pre-tax net earnings.
Mr. Reed may also receive a bonus at the discretion of the Board of Directors.
In connection with the employment agreement, Mr. Reed was granted two-year
options to purchase an aggregate of 50,000 shares of the Company's Common Stock
at a price of $2.50 per share (the option price was lowered by the Board of
Directors in November 1994 to $0.50 per share, and the expiration date of the
options was extended in 1995 to December 31, 1997).
Under each of the aforementioned employment agreements, the Company is
required to pay compensation to each respective employee following termination
as follows: each such terminated employee must be paid a lump sum equal to his
monthly salary for each month remaining in the term of the employment agreement,
plus an additional lump sum ($75,000 for Mr. Vellema and $50,000 for Mr. Reed).
-7-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Consolidated Resort Services, Inc. ("CRS") acts as the managing agent for
the timeshare owners association incorporated at the Company's Lake Tropicana
timeshare resort. CRS will receive a management fee for such services equal to
approximately ten percent of the gross annual assessment at the resort; however,
no such fee was paid during the year ended December 31, 1995. Management also
anticipates providing similar services to, and receiving similar fees from, its
other resorts.
In June 1994, the Company entered into an agreement with James C. Vellema
and an unrelated individual to purchase all of the outstanding common stock of
Reefshare, Ltd. ("Reefshare") in exchange for 250,000 freely tradeable shares of
the Company's Common Stock and a warrant to purchase an additional 50,000 shares
of Common Stock at an exercise price of $6.00 per share (all of such
consideration will be received by the unrelated individual). Reefshare
currently owns a permit to sell timeshare interests in the State of Hawaii. In
order to consummate this transaction, the Company must assume approximately
$500,000 of liabilities owed by the sellers (including Mr. Vellema) to certain
third parties and satisfy in full a $262,000 note receivable (see below). As of
December 31, 1995, such assumption and satisfaction had not occurred.
In 1994, the Company made an unsecured loan of $262,000 to James C.
Vellema. The loan bears interest at the rate of eight percent per annum, and
was due on December 31, 1994.
-8-
<PAGE>
PROPOSAL TWO - APPROVAL OF AMENDMENT TO ARTICLES
OF INCORPORATION FOR ONE-FOR-10 REVERSE STOCK SPLIT
GENERAL
The Company's Board of Directors unanimously approved a resolution to amend
the Company's Articles of Incorporation providing for a one-for-10 reverse stock
split of one share for every ten old shares (the "Reverse Stock Split"). The
Reverse Stock Split will become effective upon the filing with the Secretary of
State of the State of Nevada of an appropriate Certificate of Amendment of the
Company's Articles of Incorporation (the "Effective Date).
The Company's Articles of Incorporation currently authorize 50,000,000
shares of Common Stock. However, an aggregate of 73,340,071 shares were listed
as issued and outstanding on the Record Date, and no shares were subject to
outstanding warrants and options previously issued by the Company. The issuance
of a number of shares in excess of the total currently authorized was due
primarily to the Company's issuance, subsequent to December 31, 1995, of a
significant number of shares of Common Stock for cash and services rendered.
Approval of either Proposal Two or Proposal Three will increase the number of
shares of Common Stock available for issuance by the Company.
AMENDMENT TO THE ARTICLES OF INCORPORATION TO EFFECT REVERSE STOCK SPLIT
If the stockholders approve the Reverse Stock Split, such Reverse Stock
Split would will become effective at the Effective Date. At the Effective Date,
without further action on the part of the Company or the stockholders, each
share of Common Stock will be converted into one tenth of a share of Common
Stock.
REASONS FOR THE REVERSE STOCK SPLIT
The Board of Directors believes that if the market price for the Common
Stock is increased after the Reverse Stock Split, the Company's Common Stock
will maintain its eligibility for listing on The Nasdaq Small-Cap Market. The
Common Stock has been listed on the Nasdaq Small-Cap Market since 1987, and in
order to maintain such listing the Company must meet certain continuing listing
requirements. These requirements include: (i) two registered and active market
makers; (ii) total assets of at least $2,000,000; (iii) capital and surplus of
at least $1,000,000; (iv) a minimum bid price of $1.00 per share; (v) at least
300 holders of its Common Stock; and (vi) at least 100,000 publicly held shares
of Common Stock, with a market value of at least $200,000. While the Company
currently fulfills the market maker, total assets, number of holders and public
float requirements, its Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1996 (as amended) indicated stockholders' equity of only $9,339 at
March 31, 1996. In addition, the bid price of the Company's Common Stock has
been below $1.00 per share for an extended period, and equalled $ 0.15625 per
share on June 28, 1996.
-9-
<PAGE>
On April 19, 1996, The Nasdaq Stock Market, Inc. ("Nasdaq"), which manages
The Nasdaq SmallCap Market, informed management of the Company that the Company
had failed to meet certain of these listing maintenance requirements, and gave
the Company until May 20, 1996 to submit a plan detailing how the Company
intended to meet the listing maintenance requirements in the future. The
Company submitted a plan to Nasdaq on May 20, 1996 that included the Reverse
Stock Split or the infusion of capital through a financial transaction. Nasdaq
requested that additional information be provided, and the Company provided such
information on May 22, 1996. The Company subsequently received a letter, dated
June 12, 1996, from Nasdaq, informing the Company that its Common stock was
scheduled to be delisted from The Nasdaq SmallCap Market effective with the
close of business on June 26, 1996, for failure to meet the above-referenced
continuing listing requirements. The Company requested that Nasdaq conduct an
oral hearing to reconsider the decision to delist the Common Stock; such hearing
will be held on July 12, 1996. Management has been informed that the delisting
will be stayed pending the outcome of such hearing. In the event of such
delisting, management anticipates that the Common Stock will be listed in the
OTC Bulletin Board.
The Company has recently completed a financial transaction to raise its
stockholders' equity. On June 30, 1996, the Company entered into a Modification
of Secured Promissory Note and Deed of Trust With Assignment of Rents and
Security Agreement and Fixture Filing (the "Modification") with Marrcshare
Financial Corp., the holder of a fourth deed of trust (the "Deed of Trust") on
the Lake Tropicana timeshare resort, the Company's most significant asset. The
Deed of Trust secures a Secured Promissory Note, dated August 10, 1993, in the
original principal amount of $1,813,393 (the "Note"). The Modification has
reduced the current balance (at June 30, 1996) of principal and accrued interest
on the Note from $2,129,350 to $929,350, or a reduction of $1,200,000, in
exchange for the issuance by the Company of a warrant (the "Warrant") to
purchase up to 5,000,000 shares of the Company's Common Stock at an exercise
price of $0.09385 per share. The Warrant is exercisable commencing July 1, 1996
through July 1, 1998. The effect of the Modification has been to increase the
capital and surplus of the Company by approximately $1,200,000 at June 31, 1996,
thus satisfying Nasdaq's capital and surplus continuing listing requirement.
Management believes that approval of the Reverse Stock Split will enable
the Company to satisfy the remaining continuing listing requirement. There can
be no assurance however, that even if the Reverse Stock Split is effected, the
Common Stock will trade at ten times the market price of the Common Stock prior
to the Reverse Stock Split, or that Nasdaq will deem the Reverse Stock Split
adequate to meet the listing maintenance requirements.
The Board of Directors also believes that the current low per share
price of the Common Stock has had a negative effect on the marketability of
the existing shares, the amount and percentage of transaction costs paid by
individual stockholders and the potential ability of the Company to raise
capital by issuing additional shares. Reasons for these effects include
internal policies of certain institutional investors which prevent the
purchase of low-priced stocks, the fact that many brokerage houses do not
permit low-priced stocks to be used as collateral for margin accounts or to
be purchased on margin and a variety of brokerage house policies and
practices which tend to discourage individual brokers within those firms from
dealing in low-priced stocks.
-10-
<PAGE>
In addition, since broker's commissions on low-priced stocks generally
represent a higher percentage of the stock price than commissions on higher
priced stocks, the current share price of Common Stock can result in individual
stockholders paying transaction costs which are a higher percentage of their
total share value than would be the case if the Company's share price were
substantially higher. The Board of Directors also believes that this factor
limits the willingness of certain institutional investors to purchase the
Company's stock.
The Board of Directors believes that an increase in the price per share
will have a positive effect on the marketability of the existing shares and will
enhance the Company's flexibility in future financing and capitalization needs.
The Board of Directors also believes that the decrease in the number of
shares of Common Stock outstanding as a consequence of the proposed Reverse
Stock Split and the resulting anticipated increased price level will
encourage interest in the Common Stock and possibly promote greater liquidity
for the Company's stockholders, although such liquidity could be adversely
affected by the reduced number of shares outstanding after the Reverse Stock
Split. Also, although any increase in the market price of the Common Sock
resulting from the Reverse Stock Split may be proportionately less than the
decrease in the number of shares outstanding, the proposed Reverse Stock
Split could result in a market price for the shares that will be high enough
to overcome the reluctance, policies and practices of brokers and
institutional investors referred to above and to diminish the adverse impact
of trading commissions on the market for those share. There can, however, be
no assurance that the foregoing effects will occur, or that the market price
of Common Stock immediately after the proposed Reverse Stock Split will be
maintained for any period of time.
THERE CAN BE NO ASSURANCE THAT THE MARKET PRICE OF THE COMMON STOCK AFTER
THE PROPOSED REVERSE STOCK SPLIT WILL BE EQUAL TO TEN TIMES THE MARKET PRICE
BEFORE THE PROPOSED REVERSE STOCK SPLIT, OR THAT THE MARKET PRICE FOLLOWING THE
REVERSE STOCK SPLIT WILL EITHER EXCEED OR REMAIN IN EXCESS OF THE CURRENT MARKET
PRICE.
EXCHANGE OF STOCK CERTIFICATES AND FRACTIONAL SHARES
The exchange of shares of Common Stock will occur on the Effective Date
without any action on the part of stockholders of the Company and without regard
to the date certificates representing pre-Split shares of Common Stock are
physically surrendered for certificates representing post-Split shares of Common
Stock. The Company's transfer agent, United Stock Transfer Corporation (the
"Transfer Agent") will exchange certificates.
No fractional shares of Common Stock will be issued as a result of the
Reverse Stock
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<PAGE>
Split. In lieu of receiving fractional shares, stockholders who hold,
immediately prior to the Effective Date, a number of shares not evenly divisible
by ten will receive one additional share of Common Stock after the Effective
Date for such fractional shares.
As soon as practicable after the Effective Date, transmittal forms will be
mailed to each holder of record of certificates for shares of Common Stock to be
used in forwarding their certificates for surrender and exchange for
certificates representing the number of shares of post-Split Common Stock such
stockholders are entitled to receive as a consequence of the Reverse Stock
Split. After receipt of such transmittal form, each holder should surrender the
certificates representing pre-Split shares of Common Stock of the Company. Each
holder who surrenders certificates will receive new certificates representing
the whole number of shares of post-Split Common Stock to which he or she is
entitled (including the share of Common Stock issued in lieu of fractional
shares). The transmittal forms will be accompanied by instructions specifying
other details of the exchange. STOCKHOLDERS SHOULD NOT SEND THEIR CERTIFICATES
UNTIL THEY RECEIVE A TRANSMITTAL FORM.
After the Effective Date, each certificate representing pre-Split shares of
Common Stock will, until surrendered and exchanged as described above, be
deemed, for all corporate purposes, to evidence ownership of the whole number of
post-Split shares of Common Stock (including the share of Common Stock issued in
lieu of fractional shares), except that the holder of such unexchanged
certificates will not be entitled to receive any dividends or other
distributions payable by the Company after the Effective Date, until the
certificates representing pre-Split shares of Common Stock have been
surrendered. Such dividends and distributions, if any, will be accumulated, and
at the time of the surrender of the certificates for pre-Split shares of Common
Stock, all such unpaid dividends or distributions will be paid without interest.
FEDERAL INCOME TAX CONSEQUENCES
The following discussion describes certain federal income tax consequences
of the Reverse Stock Split. This discussion is based upon the Internal Revenue
Code of 1986 (the "Code"), existing and proposed regulations thereunder, reports
of congressional committees, judicial decisions and current administrative
rulings and practices, all as amended and in effect on the date hereof. Any of
these authorities could be repealed, overruled or modified at any time. Any
such change could be retroactive and, accordingly, could modify the tax
consequences discussed herein. No ruling from the Internal Revenue Service (the
"IRS") with respect to the matters discussed herein has been request, and the is
no assurance that the IRS would agree with the conclusions set forth in this
discussion.
The discussion is for general information only and does not address the
federal income tax consequences that may be relevant to particular
stockholders (such as dealers in securities, insurance companies, foreign
individuals and entities, financial institutions and tax-exempt entities) who
may be subject to special treatment under the federal income tax laws. This
discussion also does not address any tax consequences under state, local or
foreign laws.
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STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR
TAX CONSEQUENCES TO THEM OF PARTICIPATION IN THE REVERSE SPLIT, INCLUDING THE
APPLICABILITY OF ANY STATE, LOCAL OR FOREIGN TAX LAWS, CHANGES IN APPLICABLE TAX
LAWS AND ANY PENDING OR PROPOSED LITIGATION.
The Company should not recognize any gain or loss as a result of the
Reverse Stock Split. No gain or loss should be recognized by a stockholder
who receives only Common Stock upon the Reverse Stock Split. The aggregate
tax basis of post-Split Common Stock received by such a stockholder in
connection with the Reverse Stock Split will equal the stockholder's
aggregate tax basis in the pre-Split Common Stock exchanged therefor and
generally will be allocated among post-Split Common Stock received on a pro
rata basis. Stockholders who have used the specific identification method to
identify their basis in pre-Split Common Stock surrendered in the Reverse
Split should consult their own tax advisors to determine their basis in the
post-Split Common Stock received in exchange therefor. A stockholder who
receives a share of Common Stock in lieu of a fractional share of Common
Stock that otherwise would be held as a capital asset generally should
recognize capital gain or loss on the receipt of such cash in an amount equal
to the difference between the value of the share received and his or her
basis in such fractional share of Common Stock. For this proposed, a
stockholder's basis in such fractional share of Common Stock will be
determined as if the stockholder actually received such fractional share.
RECOMMENDATION AND VOTE
The affirmative vote of a majority of the shares represented and entitled
to vote at the Meeting is necessary for the approval of the Reverse Stock Split.
Abstentions are counted in tabulations of the votes cast and therefore have the
effect of a vote against the proposal, whereas broker non-votes are not counted
and have no effect on the vote.
The Board recommends that the stockholders vote FOR approval of the Reverse
Stock Split Plan.
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PROPOSAL THREE - INCREASE IN
AUTHORIZED NUMBER OF SHARES
GENERAL
The Company's Board of Directors unanimously approved a resolution to amend
the Company's Articles of Incorporation to increase the authorized shares of
Common Stock from 50,000,000 to 100,000,000, and to ratify issuances of Common
Stock in excess of such 50,000,000 limit. The increase of authorized shares of
Common Stock will be effected by an amendment to the Company's Articles of
Incorporation, and such increase will become effective upon the filing of a
Certificate of Amendment of Articles of Incorporation with the Secretary of
State of the State of Nevada (the "Effective Date").
REASONS FOR INCREASE OF AUTHORIZED SHARES
The Company's Articles of Incorporation currently authorize 50,000,000
shares of Common Stock. However, an aggregate of 73,340,011 shares were
listed as issued and outstanding on the Record Date; no shares were subject
to outstanding warrants and options previously issued by the Company. The
issuance of a number of shares in excess of the total currently authorized
was due primarily to the Company's issuance, subsequent to December 31, 1995,
of a significant number of shares of Common Stock for cash and services
rendered. Management of the Company was unaware that such issuances had
caused the number of shares of Common Stock to exceed the authorized shares;
however, since such discovery and at the present time, the Company has not,
and will not, issue any additional shares of Common Stock. Approval of
either Proposal Two or Proposal Three will increase the number of shares of
Common Stock available for issuance by the Company - if the Reverse Stock
Split is also authorized by the stockholders and effected, the Company would
have approximately 42,000,000 shares of Common Stock available for issuance,
even if this Proposal Three is not approved.
The Company believes that having such additional shares available for
issuance will enable the Company to take prompt action on such corporate
opportunities as may materialize in the future, if the Board of Directors of the
Company deems such issuance to be in the best interest of the Company. The
Board of Directors believes an increase in the authorized shares of Common Stock
is essential for the future well-being of the Company. However, the
disadvantage of such increase is that any additional issuances of Common Stock
will dilute the percentage of the Company owned by existing stockholders. The
additional California and Nevada franchise tax with respect to the additional
shares is minimal.
The Company is also requesting ratification of the issuance of shares of
Common Stock issued above the 50,000,000 shares currently authorized. Nevada
corporate law indicates that an increase in the authorized shares of a
corporation does not become effective until the filing of a Certificate of
Amendment to the Articles of Incorporation; therefore, the issuances of Common
Stock in excess of the number authorized would not be effective. As
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<PAGE>
the Company has already received the benefit of the consideration paid for the
Common Stock so issued, management believes that it is in the best interest of
the stockholders and the Company to ensure that such Common Stock is validly
issued.
RECOMMENDATION AND VOTE
The affirmative vote of a majority of the shares represented and entitled
to vote at the Meeting is necessary for the approval of the amendment to the
Articles of Incorporation and the ratification of the stock issuances.
Abstentions are counted in tabulations of the votes cast and therefore have the
effect of a vote against the proposal, whereas broker non-votes are not counted
and have no effect on the vote.
The Board recommends that the stockholders vote FOR approval of an
increase to the authorized number of shares and an amendment to the Articles
of Incorporation which provides for an increase for the authorized number of
shares of 50,000,000 to 100,000,000 shares of Common Stock reserved for
issuance, and the ratification of the issuances of Common Stock in excess of
the 50,000,000 currently authorized.
PROPOSAL FOUR - AUTHORIZATION OF PREFERRED STOCK
The Company's Board of Directors unanimously approved a resolution to amend
the Company's Articles of Incorporation to create a new class of stock
consisting of 5,000,000 shares, $.001 par value, of Preferred Stock issuable in
series.
If this Amendment to the Articles of Incorporation is approved, the Company
would be authorized to issue up to 5,000,000 shares of Preferred Stock, $.001
par value, which may be issued in series. The Board of Directors of the Company
would be authorized to determine the designations, rates, privileges,
restrictions, rights and conditions of the Preferred Stock, including without
limitation the dividend rates, conversion rights, preemptive rights, voting
rights, rights and terms of redemption, liquidation preferences and sinking fund
terms of any future series of Preferred Stock, the number of shares constituting
any such series and the designation thereof, without any further vote or action
of the stockholders. The Board of Directors believes that this flexibility is
necessary to enable it to tailor the specific terms of any series of Preferred
Stock that may be issued to meet market conditions and financing opportunities
as they arise without the expense and delay that would be entailed in calling a
meeting of stockholders to approve the term of any specific series. The Board
of Directors, without stockholder approval, could issue shares of Preferred
Stock with dividend rights, liquidation preferences or other rights that are
superior to the rights of holders of the Common Stock. Additionally, the Board
of Directors, without stockholder approval, could issue shares of Preferred
Stock with voting or conversion rights or other features which could, among
other things, make it more difficult to gain control of the Company by way of a
merger, tender offer or proxy contest even if such a transaction was favorable
to the interests of the stockholders.
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<PAGE>
The Company has no current plans to issue any shares of Preferred Stock.
However, the Company believes that the creation of a class of Preferred Stock by
the adoption of this Proposal Four will enhance the Company's flexibility in its
future financing needs and for possible acquisitions. The Board of Directors
believes that having a class of Preferred Stock available for issuance will
permit the Company to take prompt action on such corporate opportunities as may
materialize in the future, if the Board of Directors deems such issuance to be
in the best interest of the Company. Although the ability of the Board of
Directors to issue one or more series of Preferred Stock without further
stockholder approval could have the effect of discouraging takeover attempts,
this Proposal Four is not intended as an anti-takeover device, and no anti-
takeover measures presently are being contemplated by the Board of Directors.
In addition, management is not aware of any specific effort to accumulate the
Company's Common Stock or to obtain control of the Company.
RECOMMENDATION AND VOTE
The affirmative vote of a majority of the shares represented and entitled
to vote at the Meeting is necessary for the approval of the authorization of
Preferred Stock. Abstentions are counted in tabulations of the votes cast and
therefore have the effect of a vote against the proposal, whereas broker non-
votes are not counted and have no effect on the vote.
The Board recommends that the stockholders vote FOR approval of the
authorization of Preferred Stock.
PROPOSAL FIVE - RATIFICATION OF APPOINTMENT OF
INDEPENDENT PUBLIC ACCOUNTANTS
Corbin & Wertz has served as the Company's independent public accountants
since November 23, 1994.
Effective November 23, 1994, the Company's Board of Directors approved a
change in the Company's independent accountants from John E. Russi, C.P.A. to
Corbin & Wertz.
The reports by John E. Russi, C.P.A. on the Company's financial
statements for the two most recent fiscal years did not contain any adverse
opinion or disclaimer of opinion, and was not modified as to uncertainty,
audit scope or accounting principles, except that said reports contained a
"going concern" qualification, based upon the Company's then-recurring
deficiencies in working capital.
During the above-referenced period, and during the interim period from
the end of the most recent fiscal year through November 23, 1994, there were
no disagreements with John E. Russi, C.P.A. on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which, if not resolved to the former independent accountant's
satisfaction, would have caused it to make reference to the subject matter of
the disagreement in connection with its reports.
In accordance with the rules of the Securities and Exchange Commission,
John E. Russi, C.P.A. furnished the Company with a letter addressed to the
Securities and Exchange Commission which was filed as an exhibit to the
Company's Amendment No. 1 to Current Report on Form 8-K dated November 23,
1994.
The affirmative vote of a majority of the shares represented and
entitled to vote at the Meeting is necessary for the approval of Proposal
Five. Abstentions are counted in tabulations of the votes cast and therefore
have the effect of a vote against the proposal, whereas broker non-votes are
not counted and have no effect on the vote. In view of the difficulty and the
expense involved in changing accountants on short notice, if Proposal Five is
not approved, it is contemplated that the appointment for 1996 may be
permitted to stand, unless the Board of Directors finds other compelling
reasons for making a change. Disapproval of this Proposal Five will be
considered as advice to the Board of Directors to select other independent
accountants for the following year.
The Board recommends that the stockholders vote for approval of the
ratification of appointment of independent public accountants.
A representative of Corbin & Wertz is expected to be present at the Meeting
with the opportunity to make a statement if he/she so desires and to respond to
appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder intending to submit to the Company a proposal for inclusion
in the
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<PAGE>
Company's Proxy Statement and proxy for the 1997 Annual Meeting must submit such
proposal so that it is received by the Company no later than February __, 1997.
DISCRETIONARY AUTHORITY
While the Notice of Annual Meeting of Stockholders calls for the
transaction of such other business as may properly come before the meeting, the
Board of Directors has no knowledge of any matters to be presented for action by
the stockholders other than as set forth above. The enclosed proxy gives
discretionary authority, however, in the event any additional matters should be
presented.
ANNUAL REPORT ON FORM 10-KSB
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED
DECEMBER 31, 1995, ACCOMPANIES THIS PROXY STATEMENT. A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 1995, AS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING EXHIBITS) MAY BE OBTAINED BY
STOCKHOLDERS WITHOUT CHARGE BY WRITING TO: MPTV, INC., 3 CIVIC PLAZA, SUITE
210, NEWPORT BEACH, CALIFORNIA 92660, ATTENTION: CORPORATE SECRETARY.
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<PAGE>
[PROXY - PRELIMINARY COPY]
MPTV, INC.
3 CIVIC PLAZA, SUITE 210
NEWPORT BEACH, CALIFORNIA 92660
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints James C. Vellema and Hurley C. Reed, and
each of them, each with the power to appoint his substitute, and hereby
authorizes each of them to represent and vote as designated below, all the
shares of Common Stock of MPTV, Inc. (the "Company") held of record by the
undersigned on June 14, 1996, at the Annual Meeting of Stockholders to be held
on July __, 1996, or any adjournments thereof.
1. ELECTION OF DIRECTORS
__ FOR all nominees listed below
(except as marked to the contrary below)
__ WITHHOLD AUTHORITY
to vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name below.)
JAMES C. VELLEMA
HURLEY C. REED
2. To approve the amendment of the Company's Articles of Incorporation to
effect a one-for-10 reverse split of the Company's Common Stock.
__ FOR __ AGAINST
3. To approve the amendment of the Company's Articles of Incorporation to
increase the number of authorized shares of the Company's Common Stock from
50,000,000 to 100,000,000 and ratify the issuances of Common Stock in
excess of said 50,000,000 shares.
__ FOR __ AGAINST
<PAGE>
4. To approve the amendment of the Company's Articles of Incorporation to
authorize the issuance of 5,000,000 shares of Preferred Stock, to be issued
in one or more series and from time to time, as determined by the Board of
Directors.
__ FOR __ AGAINST
5. To ratify the appointment of Corbin & Wertz as the Company's independent
public accountants for the year ending December 31, 1996.
__ FOR __ AGAINST
6. In their discretion, the Proxies are each authorized to vote upon such
other business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this Proxy will
be voted FOR Proposals 1, 2, 3, 4 and 5.
Dated: , 1996
-----------------------
-----------------------------------
(Signature)
-----------------------------------
(Signature if held jointly)
Please sign exactly as name appears below. When
shares are held by joint tenants, both should
sign. When signing as an attorney, as executor,
administrator, trustee or guardian, please give
full title to such. If a corporation, please sign
in full corporate name, by President or other
authorized officer. If a partnership, please sign
in partnership name by authorized person.
