PRELIMINARY COPY
Consent Solicitation Statement Dated November 14, 1994
LIVE Entertainment Inc.
Consent Solicitation Statement of Written
Consents to Amend the Restated Certificate of Incorporation,
as Amended, of LIVE Entertainment Inc.
This Consent Solicitation Statement is being furnished in
connection with the solicitation of written consents ("Consent
Solicitation") of holders of Common Stock, par value $.01 per
share ("Common Stock"), and holders of Series C Convertible
Preferred Stock, par value $1.00 per share ("Series C Preferred
Stock"), of LIVE Entertainment Inc., a Delaware corporation (the
"Company" or "LIVE"), to approve certain amendments (the
"Proposed Amendment") to LIVE's Restated Certificate of
Incorporation, as amended ("Certificate of Incorporation"), in
order to effect a one-for-five reverse stock split ("Reverse
Stock Split") with respect to LIVE's issued and outstanding
Common Stock.
The Consent Solicitation is being made by the Company and
the Company will bear the costs thereof. In order to avoid
unnecessary delay and expense to the Company, LIVE has elected to
obtain stockholder approval of the Proposed Amendment by written
consent, rather than by calling a special meeting of
stockholders. It is expected that this Consent Solicitation
Statement and accompanying written consent form will be first
mailed to stockholders on or about November 14, 1994. The
Company's principal executive offices are located at 15400
Sherman Way, Suite 500, Van Nuys, California 91406.
LIVE has fixed the close of business on October 31, 1994
("Record Date") as the record date for the determination of
stockholders entitled to consent to the Proposed Amendment and
receive notice of this action. The affirmative written consent
("Consent") of stockholders representing a majority of the
combined voting power with respect to LIVE's securities entitled
to consent to the Proposed Amendment, voting as a single class,
is necessary for and will constitute approval of the Proposed
Amendment (the "Requisite Consents"). Only holders of record of
Common Stock and Series C Preferred Stock at the close of
business on the Record Date are entitled to consent to the
Proposed Amendment. A stockholder representing a majority of the
combined voting power with respect to the Common Stock and Series
C Preferred Stock has informed LIVE that it intends, subject to
receipt of this Consent Solicitation Statement, to consent to the
Proposed Amendment. If such stockholder consents, the Proposed
Amendment is assured of approval. (See "The Consent Solicitation
- - Approval Required; Board Recommendation" below). LIVE is also
seeking the consent of the other stockholders entitled to consent
to the Proposed Amendment. All such stockholders are requested
to complete, sign and date the accompanying Consent form and
promptly return it to American Stock Transfer & Trust Company
(the "Consent Agent") in the enclosed postage prepaid envelope.
The Consents may be revoked by any such stockholder prior to
receipt by the Company of the Requisite Consents and will be
automatically revoked if the Requisite Consents are not obtained
by the Expiration Date (as defined below). If the Proposed
Amendment is effected, each stockholder of LIVE will be bound by
the Proposed Amendment, whether or not such stockholder delivered
a Consent.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS OF
LIVE GIVE THEIR WRITTEN CONSENT IN FAVOR OF THE PROPOSED
AMENDMENT.
THE CONSENT SOLICITATION WILL EXPIRE AT 5:00 P.M., LOS ANGELES
TIME, ON NOVEMBER 30, 1994, UNLESS EXTENDED (THE "EXPIRATION
DATE"). IF THE REQUISITE CONSENTS HAVE NOT BEEN RECEIVED BY 5:00
P.M., LOS ANGELES TIME, ON THE EXPIRATION DATE, THE COMPANY MAY
EXTEND THE CONSENT SOLICITATION FOR A SPECIFIED PERIOD OR ON A
DAILY BASIS UNTIL THE REQUISITE CONSENTS HAVE BEEN RECEIVED, BUT
NOT BEYOND 60 DAYS FROM THE EARLIEST DATED, VALID CONSENT
RECEIVED BY THE COMPANY.
THE CONSENT SOLICITATION
Purposes and Effects of Proposed Amendment
The Board of Directors has adopted a resolution declaring
advisable the Proposed Amendment so as to reclassify all issued
and outstanding shares of Common Stock in order to effect the
one-for-five Reverse Stock Split (such shares of reclassified
Common Stock are sometimes hereinafter referred to as shares of
"New Common Stock"). The text of such board resolution is set
forth as Exhibit A hereto.
The sole purpose of the Reverse Stock Split is to increase
the per share bid price of the Common Stock above the $3.00
minimum per share bid price required for listing the Common Stock
on NASDAQ. Management believes, although there is no assurance,
that the Reverse Stock Split will increase the per share bid
price above such minimum per share bid price. The Company is in
the process of applying for listing the Common Stock on NASDAQ,
which, upon the effectiveness of the Proposed Amendment and the
Reverse Stock Split, would become a listing for the New Common
Stock. However, there is no assurance that the Common Stock or
New Common Stock will be accepted for listing on NASDAQ. The
Common Stock has been listed for trading on the New York Stock
Exchange, Inc. ("NYSE") since 1990 but on October 4, 1994, the
NYSE suspended the Common Stock from trading and instituted
delisting proceedings with respect to the Common Stock due to
LIVE's net worth and three year average income being less than
NYSE requirements. The Company expects that the Common Stock
will not be listed for trading on the NYSE after November 30,
1994. On October 31, 1994, quotations with respect to the Common
Stock were initiated on the OTC Bulletin Board and NQB Pink
Sheets. On November [__], 1994, the per share closing bid and
asked prices of the Common Stock as reported on the OTC Bulletin
Board and NQB Pink Sheets were $[ ] and $[ ].
The New Common Stock will be identical to the Common Stock
in all other material respects. The effect of the Reverse Stock
Split will be to reduce the number of shares of Common Stock held
by holders of shares of Common Stock outstanding as of the Record
Date from 12,093,610 shares to approximately 2,418,722 shares.
The Reverse Stock Split will not, in and of itself, affect the
proportionate equity interest of any holder of Common Stock in
the Company, subject to the provisions for the elimination for
fractional shares as described below. The exercise and
conversion privileges of all options, warrants and other
securities exercisable for or convertible into shares of Common
Stock will be appropriately adjusted as necessary so as to
preserve the proportionate equity interest of all holders of
Common Stock and such options, warrants and other securities.
Proposed Amendment; Effective Time
The Reverse Stock Split will be effected by amending Article
FOURTH of the Certificate of Incorporation to reclassify every
five outstanding shares of Common Stock as one share of New
Common Stock having the same par value and other powers,
preferences and rights as the Common Stock. The Reverse Stock
Split will proportionately decrease the number of authorized
shares of Common Stock to 24,000,000 shares. The Reverse Stock
Split, if approved, will become effective upon the filing with
the Delaware Secretary of State of a certificate of amendment
("Certificate of Amendment") containing the amendment to Article
FOURTH specified in Exhibit A, without any further action on the
part of the stockholders. The date and time at which the
Certificate of Amendment and Reverse Stock Split become effective
is hereinafter referred to as the "Effective Time." If the
Requisite Consents are received by the Company on or before the
close of business on November 29, 1994, LIVE intends to file the
Certificate of Amendment before the close of business on November
30, 1994.
LIVE will furnish to any stockholder entitled to consent to
the Proposed Amendment a copy of the Restated Certificate of
Incorporation, as amended, upon request made to the Company at
LIVE's principal executive offices set forth below.
Fractional Shares
Holders of Common Stock at the time of the Reverse Stock
Split who hold a number of shares that is not evenly divisible in
the Reverse Stock Split will receive cash in lieu of the
fractional shares that arise as a result of the Reverse Stock
Split. For purposes of settling fractional shares of New Common
Stock arising from the Reverse Stock Split, the Company will
value the New Common Stock based on the average of the per share
closing bid and asked prices of the Common Stock as reported on
the OTC Bulletin Board and NQB Pink Sheets for the five trading
days immediately preceding the Effective Time.
Exchange of Certificates
Prior to the Effective Time, LIVE will authorize American
Stock Transfer & Trust Company to act as exchange agent (the
"Exchange Agent") for purposes of effecting an exchange of stock
certificates. As soon as practicable after the Effective Time,
the Exchange Agent will send letters of transmittal to holders of
Common Stock as of the Effective Time for use in transmitting
their stock certificates currently representing shares of Common
Stock to the Exchange Agent in exchange for new certificates
representing the number of shares of New Common Stock into which
their shares of Common Stock have been reclassified in the
Reverse Stock Split and cash for any fractional shares. No cash
payment or delivery of a certificate for New Common Stock will be
made to a stockholder until the stockholder has surrendered his
outstanding certificates for Common Stock together with the
letter of transmittal to the Exchange Agent.
Until so surrendered, each stock certificate formerly
representing shares of Common Stock shall be deemed for all
purposes to represent the number of whole shares of New Common
Stock to which the holder thereof is entitled, together with the
amount of cash in lieu of fractional shares, if any, as a result
of the Reverse Stock Split.
Holders of Common Stock are requested not to surrender their
certificates unless and until they receive a letter of
transmittal.
Record Date and Persons Entitled to Give Written Consents
LIVE has fixed the close of business on October 31, 1994 as
the Record Date for the determination of stockholders entitled to
consent to the Proposed Amendment and receive notice of the
taking of such corporate action. Only holders of record of
Common Stock and Series C Preferred Stock at the close of
business on the Record Date (or any persons who have obtained a
properly completed proxy from such record holders) will be
entitled to consent to the Proposed Amendment. At the close of
business on the Record Date, LIVE had outstanding [ ] shares of
Common Stock. Each holder of Common Stock is entitled to cast
one vote per share of Common Stock. At the close of business on
the Record Date, there were [ ] holders of record of Common
Stock. At the close of business on the Record Date, LIVE also
had outstanding 15,000 shares of Series C Preferred Stock.
Pursuant to the terms of the Series C Preferred Stock, each
holder of Series C Preferred Stock is entitled to the same voting
rights as a holder of the number of shares of Common Stock which
such holder would own if it had converted its Series C Preferred
Stock into Common Stock as of the Record Date. Each share of
Series C Preferred Stock was then convertible into the number of
shares of Common Stock equal to the $15,978,385 Liquidation
Preference per share of Series C Preferred Stock (as adjusted
pursuant to the terms of the Series C Preferred Stock) as of the
Record Date divided by $3.045, the Conversion Price in effect
with respect to the Series C Preferred Stock as of the Record
Date. Accordingly, Pioneer LDCA, Inc. ("Pioneer"), as the holder
of 100% of the outstanding Series C Preferred Stock, is entitled
to cast 5,247,417 votes by virtue of its Series C Preferred
Stock, voting together on the Proposed Amendment with the holders
of Common Stock.
Approval Required; Board Recommendation
Approval of the Proposed Amendment requires the affirmative
written consent of stockholders representing a majority of the
combined voting power with respect to LIVE's securities entitled
to consent, voting as a single class. Pursuant to Delaware law,
abstentions and broker non-votes will have the effect of a vote
against the Proposed Amendment. As of the Record Date, the LIVE
voting securities entitled to consent consisted of [ ] shares of
Common Stock and 15,000 shares of Series C Preferred Stock, which
have voting rights equivalent to 5,247,417 shares of Common
Stock. LIVE also has issued and outstanding 6,000,000 shares of
Series B Cumulative Preferred Stock, par value $1.00 per share
(the "Series B Preferred Stock"), but except for the election of
two members of the Board of Directors, the holders of Series B
Preferred Stock generally do not have voting rights and are nor
entitled to consent with respect to the Proposed Amendment.
Pioneer has informed LIVE that it intends, subject to
receipt of this Consent Solicitation Statement, to cast all
9,276,640 of its votes (based upon 5,247,417 votes attributable
to shares of Series C Preferred Stock owned by Pioneer and
4,029,223 votes attributable to shares of Common Stock owned by
Pioneer) in favor of the Proposed Amendment. If Pioneer so
votes, the Proposed Amendment is assured of approval. LIVE is
also seeking the consent of the other stockholders entitled to
consent to the Proposed Amendment. If approved by the Requisite
Consents, the Proposed Amendment and the Reverse Stock Split will
become operative at the Effective Time and all stockholders will
be bound by the Proposed Amendment, regardless of whether they
consented thereto. No stockholder will have any rights of
appraisal or similar rights of dissenters with respect to the
Reverse Stock Split.
THE BOARD OF DIRECTORS OF LIVE UNANIMOUSLY RECOMMENDS THAT
THE STOCKHOLDERS OF LIVE GIVE THEIR CONSENT TO THE PROPOSED
AMENDMENT.
Expiration Date and Extensions
The term "Expiration Date" shall mean 5:00 p.m., Los Angeles
Time, on November 30, 1994, unless LIVE, in its sole discretion
(as limited by Delaware law), extends the Consent Solicitation,
in which case the term "Expiration Date" shall mean the latest
date to which such Consent Solicitation is extended. In order to
extend the Expiration Date, LIVE will notify the Consent Agent of
any extension by oral or written notice and will make a public
announcement thereof, each prior to 9:00 a.m., Los Angeles Time,
on the next business day after the previously scheduled
Expiration Date. Such announcement may state that LIVE is
extending the Consent Solicitation for a specified period of time
or on a daily basis until 5:00 p.m., Los Angeles Time, on the
date on which the Requisite Consents have been received, but not
beyond 60 days from the earliest dated, valid Consent received by
the Company.
LIVE expressly reserves the right to delay accepting any
Consents, to extend the Consent Solicitation, or to terminate the
Consent Solicitation and not accept Consents by giving oral or
written notice of such delay, extension or termination to the
Consent Agent. Any such delay in acceptance, extension or
termination will be followed as promptly as practicable by public
announcement thereof.
Procedure for Giving Consents
A stockholder wishing to Consent to the Proposed Amendment
should complete and sign the enclosed Consent form and mail or
deliver such Consent form to the Consent Agent (at the address
set forth below). Any stockholder who is the registered holder
of Common Stock or Series C Preferred Stock and who wishes to
grant his or her Consent, but who was not the record holder of
such Common Stock or Series C Preferred Stock on the Record Date,
should (i) obtain the information relating to, and signature of,
such record holder on the Consent form or (ii) obtain and include
with the Consent form a properly completed proxy from such record
holder. Any beneficial owner whose shares of Common Stock or
Series C Preferred Stock are registered as of the Record Date in
the name of its depositary, broker, dealer, commercial bank,
trust company or other nominee and who wishes to grant his or her
Consent should also follow one of the alternative procedures
described in the second sentence of this paragraph.
The stockholder should execute the Consent form enclosed
with this Consent Solicitation Statement in the same manner as
such stockholder's name appears on the stock certificates owned
by such stockholder to which the Consent form relates. If a
Consent form is signed by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, such
person should so indicate when signing. If a Consent relates to
less than the total number of shares of Common Stock or Series C
Preferred Stock registered in the stockholder's name, the
stockholder must write above his or her signature on the Consent
form the certificate numbers and number of shares of Common Stock
or Series C Preferred Stock with respect to which the Consent is
given. Otherwise, the Consent will be deemed to relate to the
total number of shares of Common Stock or Series C Preferred
Stock registered in the name of such stockholder at the close of
business on the Record Date. Notwithstanding the foregoing, if
the Consent form relates to shares of Common Stock held of record
at the close of business on the Record Date by a nominee of the
Depository Trust Company or another depositary, the beneficial
holder must write above his or her signature on the Consent form
the name of such nominee and the total number of shares of Common
Stock with respect to which the Consent is given (no certificate
numbers need be listed).
The ownership of the stock certificates shall be proved by
the Consent Agent as registrar of the Common Stock and Series C
Preferred Stock. All questions as to the validity, form,
eligibility (including time of receipt), acceptance and
revocations of Consents will be resolved by LIVE in its sole
discretion, whose determination shall be final and binding. LIVE
reserves the absolute right to reject any or all Consents that
are not in proper form or the acceptance of which could, in the
opinion of LIVE's counsel, be unlawful. LIVE also reserves the
right to waive any irregularities or conditions of delivery as to
particular Consents. LIVE's interpretation of the terms and
conditions of the Consent Solicitation shall be final and
binding. Unless waived, any irregularities in connection with
deliveries must be cured within such time as LIVE determines.
Neither LIVE nor the Consent Agent shall be under a duty to give
notification of such irregularities or will incur liability for
failure to give notification. Deliveries of such Consents will
not be deemed to have been made until such irregularities have
been cured or waived.
Consents, to be valid, must be pursuant to a Consent form
that is properly executed and received on or before the
Expiration Date. The Consent form should not be sent to the
Company. Stockholders must complete, sign, date and deliver the
Consent (or facsimile thereof) for such holder's Common Stock or
Series C Preferred Stock to the Consent Agent. Consent forms may
be delivered to the Consent Agent by hand, mail, telecopy or
overnight courier. The method of delivery of all documents,
including fully executed Consent forms, is at the election and
risk of the stockholder. Stockholders may use the enclosed, pre-
addressed envelope, although if delivery is by mail, return
receipt requested is recommended and enough time should be
allowed to ensure timely delivery.
Holders of Common Stock are requested not to surrender their
certificates to the Consent Agent unless and until they receive a
letter of transmittal. See "Exchange of Certificates."
Revocation of Consents
A Consent may be revoked at any time prior to the delivery
of the Requisite Consents to the Company. Any stockholder
desiring to revoke a Consent must deliver to the Consent Agent,
at the address set forth below, a written revocation of such
Consent containing the name of the stockholder and the
certificate numbers and number of shares to which such revocation
relates. If record ownership of any shares of Common Stock or
Series C Preferred Stock is transferred after the Record Date,
the transfer will not revoke a Consent given with respect to such
shares by the holder as of the Record Date. Only stockholders as
of the Record Date (or their duly designated proxies) are
entitled to revoke a Consent previously given, regardless of
whether such persons continue to be holders after the Record
Date. If a revocation is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a
corporation or other persons acting in a fiduciary or
representative capacity, such person should so indicate when
signing. The revocation of a Consent shall be effective as to
all of the shares of Common Stock or Series C Preferred Stock
listed in the Consent to which it relates unless otherwise
specified in the notice of revocation.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth as of October 31, 1994,
certain information concerning the ownership of shares of Common
Stock and Series C Preferred Stock. The Series C Preferred Stock
votes on an as converted basis on all matters which may come
before the holders of Common Stock, voting together on such
matters with the Common Stock. Information is provided
concerning the ownership of Common Stock and Series C Preferred
Stock by (i) the holders known to LIVE of more than 5% of the
outstanding shares of Common Stock or Series C Preferred Stock,
(ii) each executive officer and director of LIVE and (iii) all
executive officers and directors of LIVE as a group.
Columns (A) and (B) of the table provide information
regarding the voting power of the foregoing persons, entities and
groups. Columns C through E of the table show their beneficial
ownership of Common Stock and Series C Preferred Stock issued and
outstanding as of October 31, 1994. Beneficial ownership has
been determined in accordance with Rule 13d-3(a) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which provides that a beneficial owner of a security includes any
person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or
shares (i) voting power, which includes the power to vote, or to
direct the voting of, such security and/or (ii) investment power
which includes the power to dispose of, or to direct the
disposition of, such security. Where known by LIVE, the
footnotes to the table indicate when shares have been included in
the table based upon beneficial ownership resulting other than
from actual ownership of the shares.
Column C of the table ("Number of Shares of Issued and
Outstanding Common Stock") includes only shares of Common Stock
actually issued and outstanding as of October 31, 1994. Column E
("Shares of Common Stock in Which Person Has Right to Acquire
Beneficial Ownership Within 60 Days") provides information with
respect to shares of Common Stock that are not held by a person
as of October 31, 1994, but which a person has the right to
acquire beneficial ownership of within 60 days of that date (such
as upon the exercise of options or warrants, the conversion of
convertible securities or through other similar securities or
arrangements). Shares of Common Stock issuable upon exercise of
options or warrants, upon conversion of convertible securities,
or through other similar securities or arrangements are included
in Column E if such options, warrants, convertible securities or
other similar securities or arrangements are exercisable (or
convertible) within 60 days of October 31, 1994, regardless of
whether the exercise, conversion or other acquisition price is
above or below the current market price for Common Stock. On
November [ ], 1994, the per share closing bid and asked prices of
the Common Stock as reported on the OTC Bulletin Board and NQB
Pink Sheets were $[ ] and $[ ].
Columns (F) and (G) of the table show each of the person's,
entity's and group's beneficial ownership of Common Stock
calculated in accordance with Rule 13d-3(d)(1) under the Exchange
Act, and includes shares of Common Stock issued and outstanding
as of October 31, 1994, as well as shares for which beneficial
ownership may be acquired within 60 days of that date. In
accordance with Rule 13d-3(d)(1) under the Exchange Act, any
securities not outstanding but which are the subject of options,
warrants, rights, or conversion privileges (or other arrangements
which could result in the issuance of additional shares of Common
Stock by LIVE) exercisable within 60 days of October 31, 1994,
are deemed to be outstanding for the purpose of computing the
percentage of outstanding securities of the class owned by such
person, but are not deemed to be outstanding for the purpose of
computing the percentage of the class owned by any other person.
Certain members of the Board of Directors named in the table
are affiliated with one of the beneficial owners of more than 5%
of the Common Stock or Series C Preferred Stock (a "5% Owner").
In certain circumstances, a 5% Owner may be deemed to
beneficially own Common Stock or Series C Preferred Stock held by
such directors, and vice versa. For purposes of the table below,
(i) the beneficial ownership of a 5% Owner includes such
director's ownership where indicated by footnote even though the
5% Owner may disclaim beneficial ownership of such shares and
(ii) the beneficial ownership of the director does not include
such 5% Owner's beneficial ownership solely by reason of such
director's affiliation with such 5% Owner.
<PAGE>
<TABLE>
BENEFICIAL OWNERSHIP OF COMMON STOCK AND SERIES C PREFERRED STOCK
<CAPTION>
(C) (E) (F) (G)
Number Shares of Common Amount of
of Shares Stock in Beneficial Ownership
(B) of Issued Which Person Has of Common Stock as of
(A) Percent of and (D) Right to October 31, 1994(1)
Name of Beneficial Votes Votes that Outstanding Percent Acquire Beneficial
Owner or Identity Entitled may be Common of Ownership Number of
of Group to Cast Cast (2) Stock Class Within 60 Days Shares Percent
<S> <C> <C> <C> <C> <C> <C> <C>
5% Owners
Pioneer 9,276,640(3) 53.5% 4,029,223 33.3% 5,262,417 9,291,640(4) 53.5%
Le Studio (5) 1,288,030 7.4% 1,288,030 10.7% 0 1,288,030 10.7%
RCS Editori S.p.A.(6) 1,288,030 7.4% 1,288,030 10.7% 0 1,288,030 10.7%
FMR Corp (7) 0 * 0 * 1,955,882 1,955,882 13.9%
Management
Anthony J. Scotti (8) 0 * 0 * 54,206 54,206 *
Roger A. Burlage (9) 0 * 0 * 0 0 *
Frans J. Afman (10) 0 * 0 * 19,500 19,500 *
Jay Burnham (11) 0 * 0 * 10,000 10,000 *
Ronald B. Cushey (12) 0 * 0 * 5,000 5,000 *
Mario F. Kassar (13) 0 * 0 * 22,500 22,500 *
Jonathan D. Lloyd (14) 0 * 0 * 10,000 10,000 *
David A. Mount (15) 0 * 0 * 139,500 139,500 1.1%
Masao Nomura (16) 0 * 0 * 5,000 5,000 *
R. Timothy O'Donnell (17) 0 * 0 * 80,373 80,373 *
Gregory R. Pierson (18) 0 * 0 * 5,000 5,000 *
Roger R. Smith (19) 760 * 760 * 94,500 95,260 *
Lynwood Spinks (20) 0 * 0 * 11,500 11,500 *
Michael J. White (21) 0 * 0 * 34,000 34,000 *
All executive officers and
directors as a group**(22) 760 * 760 * 491,079 491,839 3.9%
<FN>*Less than 1%
**14 persons comprised of all of those named above
All of the persons listed in the chart above have sole voting
power and sole investment power over the capital stock they
beneficially own unless otherwise indicated in the footnotes
below.
(1) The number of shares and percentages are based upon
12,093,610 shares of Common Stock outstanding as of October 31,
1994. The shares of Common Stock underlying immediately
exercisable options, warrants or rights, immediately convertible
securities, or options, warrants, rights or convertible
securities that become exercisable or convertible within 60 days
of October 31, 1994 are deemed to be outstanding for the purpose
of calculating the number and percentage owned by the holders of
such options, warrants, rights or convertible securities.
(2) Based upon 17,341,027 possible votes (comprised of (i)
the 12,093,610 votes which may be cast by all holders of
outstanding Common Stock and (ii) the 5,247,417 votes which may
be cast by Pioneer as the sole holder of the Series C Preferred
Stock) as of October 31, 1994. Pioneer, as the sole holder of
the Series C Preferred Stock, has the same voting rights (and
thus is entitled to the same number of votes) as it would be
entitled to if it had converted the Series C Preferred Stock into
Common Stock as of the Record Date.
(3) Includes 4,029,223 shares of Common Stock directly owned
by Pioneer, and 5,247,417 shares of Common Stock issuable upon
conversion of the 15,000 shares of Series C Preferred Stock (plus
accrued but unpaid dividends through October 31, 1994) held by
Pioneer.
(4) Includes 5,247,417 shares of Common Stock issuable upon
conversion of the 15,000 shares of Series C Preferred Stock (plus
accrued but unpaid dividends through October 31, 1994) held by
Pioneer. The Series C Preferred Stock is entitled to vote
together with the Common Stock on all matters coming before the
holders of the Common Stock as if its holder had converted the
Series C Preferred Stock into Common Stock. On that basis,
Pioneer is entitled to cast 5,247,417 votes on matters coming
before the holders of Common Stock pursuant to its ownership of
the Series C Preferred Stock. Includes options to purchase
15,000 shares of Common Stock held by Pioneer affiliated or
nominated directors. Pioneer Electronic Corporation owns all of
the outstanding shares of capital stock of Pioneer North America,
Inc. ("PNA") which in turn owns all of the outstanding shares of
common stock of Pioneer. In their most recent Schedules 13D
filed with the Commission, Pioneer Electronic Corporation and PNA
also claimed beneficial ownership over all of the securities of
LIVE held by Pioneer. The address of Pioneer and PNA is 2265
East 220th Street, Long Beach, California 90810. The address of
Pioneer Electronic Corporation is 4-1 Meguro, 1 Chome, Meguro-ku,
Tokyo 153, Japan.
(5) Represents shares of Common Stock indirectly owned by Le
Studio Canal+ S.A. ("Le Studio") through its wholly-owned
subsidiary Cinepole Productions B.V. ("Cinepole"). In their most
recent Schedules 13D filed with the Commission, Cinepole claimed
shared voting power and shared investment power over all of its
1,180,030 shares of Common Stock with Le Studio and Le Studio's
corporate parent, Canal+ S.A., and Le Studio claimed shared
voting power and shared investment power over all of its 108,000
shares of Common Stock with Canal+ S.A. The address of Cinepole
is Surinameweg 2, NL - 2035 VA Haarlem, The Netherlands. The
address of Le Studio is 17, rue Dumont d'Urville, 75116 Paris,
France. The address of Canal+ S.A. is 85-89 Quai Andre Citroen,
75015 Paris, France.
(6) RCS Editori S.p.A. directly owns 60% of the outstanding
stock of RCS Video International Services B.V. ("RCS") and
indirectly owns 40% of the outstanding stock of RCS. RCS
International Communications N.V. ("RCS Communications") is 100%
owned by RCS Editori S.p.A. RCS Editori S.p.A. may therefore be
deemed to own beneficially all of the securities owned by RCS and
RCS Communications. Includes 108,000 shares of Common Stock
directly owned by RCS and 1,180,000 shares of Common Stock
directly owned by RCS Communications. In their most recent
Schedules 13D filed with the Commission, RCS Editori S.p.A.
claimed shared voting power and shared investment power over all
of its beneficially owned securities with RCS and RCS
Communications, RCS claimed shared voting power and shared
investment power over 108,000 shares of Common Stock and RCS
Communications claimed shared voting power and shared investment
power over 1,180,000 shares of Common Stock. The address of RCS
Editori S.p.A. is Via A. Rizzoli 2, 20132 Milan, Italy. The
address of RCS and RCS Communications is Museumplein 11, 1071 DJ
Amsterdam, The Netherlands.
(7) Represents 1,955,882 shares of Common Stock which are
issuable upon exercise of presently exercisable warrants. FMR
Corp. is the parent of Fidelity Management & Research Company
which manages or advise funds that hold these warrants. The
address of FMR Corp. and Fidelity Management & Research Company
is 82 Devonshire Street, F7E, Boston, Massachusetts 02109.
(8) Mr. Scotti is the Chairman of the Board and Chief
Executive Officer of All American Communications, Inc. ("All
American") and the Chairman of the Board of LIVE. Includes
54,206 shares of Common Stock which are issuable to Mr. Scotti
upon exercise of presently exercisable options and warrants.
Does not include 167,378 shares of Common Stock held by Scotti
Brothers Entertainment Industries ("Scotti Brothers") which is a
wholly owned subsidiary of All American.
(9) Mr. Burlage is the President and Chief Executive Officer
of LIVE and LIVE Home Video Inc. Mr. Burlage owns no shares of
Common Stock.
(10) Mr. Afman is an independent financial consultant to the
entertainment industry and a director of LIVE. Includes 19,500
shares of Common Stock which are issuable upon exercise of
presently exercisable options.
(11) Mr. Burnham is an independent investment analyst and a
director of LIVE. Includes 10,000 shares of Common Stock which
are issuable upon exercise of presently exercisable options.
Does not include 149,000 shares of Common Stock held by entities
controlled by Paul D. Sonz Partners.
(12) Mr. Cushey is a director of LIVE and an Executive
Consultant for PNA. Mr. Cushey is providing assistance to LIVE's
accounting and finance departments on an indefinite basis
pursuant to an Agreement dated as of April 1, 1994, between PNA
and LIVE. Although Mr. Cushey may be deemed to own beneficially
the securities owned by Pioneer, Mr. Cushey has disclaimed
beneficial ownership of such securities. Includes 5,000 shares
of Common Stock which are issuable to Mr. Cushey upon exercise of
presently exercisable options.
(13) Mr. Kassar is the Chairman of the Board of Directors and
Chief Executive Officer of Carolco Pictures Inc. ("Carolco") and
a director of LIVE. Includes 22,500 shares of Common Stock which
are issuable upon exercise of presently exercisable options.
(14) Mr. Lloyd is the Chairman, President and Chief Executive
Officer of OpTel, Inc. and a director of LIVE. Includes 10,000
shares of Common Stock which are issuable upon exercise of
presently exercisable options.
(15) Mr. Mount is the President and Chief Executive Officer
of WEA Corp. and a director of LIVE and All American. Includes
139,500 shares of Common Stock which are issuable upon exercise
of presently exercisable options. Does not include 167,378
shares of Common Stock held by Scotti Brothers.
(16) Mr. Nomura is the Secretary, Treasurer and Chief
Financial Officer of Pioneer and a director of LIVE. Although
Mr. Nomura may be deemed to own beneficially the securities owned
by Pioneer, Mr. Nomura has disclaimed beneficial ownership of
such securities. Includes 5,000 shares of Common Stock which are
issuable to Mr. Nomura upon exercise of presently exercisable
options.
(17) Mr. O'Donnell is the President of Jefferson Capital
Group, Ltd. ("Jefferson Capital") and a director of LIVE and All
American. Includes 19,500 shares of Common Stock which are
issuable upon exercise of presently exercisable options and
45,873 shares of Common Stock underlying three warrants issued to
Jefferson Capital. Does not include 167,378 shares of Common
Stock held by Scotti Brothers.
(18) Mr. Pierson is the General Counsel of PNA and a director
of LIVE. Mr. Pierson owns no shares of Common Stock. Although
Mr. Pierson may be deemed to own beneficially the securities
owned by Pioneer, Mr. Pierson has disclaimed beneficial ownership
of such securities. Includes 5,000 shares of Common Stock which
are issuable to Mr. Pierson upon exercise of presently
exercisable options.
(19) Mr. Smith is an independent motion picture producer and
a director of LIVE. Includes 94,500 shares of Common Stock which
are issuable upon exercise of presently exercisable options.
(20) Mr. Spinks is Executive Vice President/President of
Production and a director of Carolco, and a director of LIVE.
Includes 11,500 shares of Common Stock which are issuable upon
exercise of presently exercisable options.
(21) Mr. White is the Executive Vice President/Chief
Administrative Officer, General Counsel, Acting Chief Financial
Officer and Corporate Secretary of LIVE. Includes 34,000 shares
of Common Stock which are issuable upon exercise of presently
exercisable options.
(22) Includes shares of Common Stock which are issuable (a)
upon exercise of presently exercisable options, warrants and
rights and, (b) upon exercise of options, warrants and rights
that become exercisable within 60 days of October 31, 1994.
</FN>
</TABLE>
The following table sets forth, as of October 31, 1994, the
beneficial ownership of shares of LIVE's Series B Preferred
Stock, by each stockholder who is known by LIVE to own more than
5% of the outstanding shares of the Series B Preferred Stock
based upon 6,000,000 shares of the Series B Preferred Stock
outstanding as of October 31, 1994.
Shares of the Percentage of
Name of Beneficial Series B Outstanding
Owner Preferred Series B
Stock Owned Preferred Stock
Island Investors Partnership (1) 467,604 7.8%
Metropolitan Life Insurance
Company (2) 419,094 7.0%
(1) The address of Island Investors Partnership is 40304
Fisher Island Drive, Fisher Island, Florida 33109.
(2) The address of Metropolitan Life Insurance Company is One
Madison Avenue, New York, New York 10010.
As of October 31, 1994, none of the directors or executive
officers of LIVE beneficially owned any shares of LIVE's Series B
Preferred Stock.
Conditions
Acceptance of the Consents with respect to the Proposed
Amendment and filing of the Certificate of Amendment is
conditioned upon receipt of the Requisite Consents. The Company
may accept Consents delivered by stockholders entitled to consent
and may execute and file the Certificate of Amendment
effectuating the Proposed Amendment at any time after such time
as it has received the Requisite Consents.
Accounting Treatment
The Reverse Stock Split will not result in any change to the
Company's stockholders' equity. However, since the par value per
share of Common Stock is not being changed as part of the Reverse
Stock Split, the "Stated Capital" account with respect to the
Common Stock and the "Additional Paid-in Capital" account will
each be restated to reflect the resulting decrease in aggregate
par value of Common Stock issued and outstanding after giving
effect to the Reverse Stock Split. The decrease in such
aggregate par value will equal $97,000. Accordingly, as of June
30, 1994, the "Stated Capital" account with respect to the Common
Stock would have been restated from $121,000 to $24,000 and the
"Additional Paid-in Capital" account would have been restated
from $110,882,000 to $110,979,000. The restatements will become
effective at the Effective Time, which is the earliest possible
effective date for such restatements, and will be reflected on
the Company's financial statements for the year ending December
31, 1994. Such restatements will not alter the amount available
for distribution to the holders of LIVE's equity securities.
Federal Income Tax Consequences of Proposed Amendment
The Company intends the Reverse Stock Split to be a tax free
recapitalization with the following general federal income tax
consequences:
(1) No gain or loss will be recognized by holders of
Common Stock whose Common Stock is reclassified as New Common
Stock pursuant to the Reverse Stock Split, except for any cash
received by a holder of Common Stock in lieu of a fractional
share of New Common Stock.
(2) The aggregate tax basis of New Common Stock received
pursuant to the Reverse Stock Split will equal the aggregate tax
basis of Common Stock exchanged therefor, decreased by the amount
of any tax basis allocable to the fractional share interest for
which cash is received.
(3) A holder of Common Stock who receives cash in lieu
of a fractional share of New Common Stock pursuant to the Reverse
Stock Split will recognize taxable gain or loss in an amount
equal to the difference between the amount of cash received and
the portion of the adjusted tax basis of the shares of Common
Stock allocable to such fractional share. Such gain or loss will
be a capital gain or loss, provided that the Common Stock was
held as a capital asset at the time of the Reverse Stock Split,
and will be long-term capital gain or loss if the Common Stock
was held for more than one year at the time of the Reverse Stock
Split.
(4) Provided that the Common Stock is held as a capital
asset at the Effective Time, the holding period of New Common
Stock received pursuant to the Reverse Stock Split will include
the holding period of such Common Stock.
The federal income tax discussion set forth above is
included for general information only and may not apply to
particular categories of holders of Common Stock such as foreign
holders. Similarly, such discussion does not apply to holders of
options or warrants to acquire Common Stock who acquired such
options and warrants in other than a compensatory transaction.
In addition, there may be relevant foreign, state, local or other
tax consequences, none of which are described above.
Stockholders are urged to consult their tax advisor to determine
the specific tax consequences of the Reverse Stock Split,
including the applicability and effect of foreign, state, local
and other tax laws.
Stockholder Proposals
In order to be considered for inclusion in the proxy
statement for the regular annual meeting of the stockholders of
the Company in the year 1995, stockholder proposals must have
been received by the Company not later than January 28, 1995.
Such proposals should be sent to the Corporate Secretary of the
Company at the address listed below.
Other Information
The Company does not believe that any other financial or
other information about the Company is necessary for the exercise
of prudent judgment in regard to the matter to be acted upon.
However, the Company will furnish without charge a copy of its
Annual Report on Form 10-K for the year ended December 31, 1993,
its Quarterly Report on Form 10-Q for the quarter ended March 31,
1994, and its Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994, including the financial statements and the
schedules thereto, upon written request made to the Company, at
LIVE's principal executive offices set forth below, of any
stockholder entitled to consent to the Proposed Amendment as of
the Record Date, and will provide copies of the Exhibits in such
reports upon payment of a reasonable fee that will not exceed the
Company's reasonable expenses incurred in connection therewith.
No Payments for Solicitation; Payment of Expenses
Consents are being solicited by the Board of Directors of
LIVE. LIVE will bear the expense of preparing, assembling,
printing and mailing this Consent Solicitation Statement and the
other material used in the Consent Solicitation. Officers and
regular employees of LIVE may, without being additionally
compensated, solicit Consents by mail, telephone, telegram or
personal contact. In addition to mailing this material to
stockholders of LIVE, LIVE has asked banks and brokers to forward
copies to persons for whom they hold stock of LIVE and to request
authority for execution of the Consent forms. LIVE will
reimburse such banks and brokers for their reasonable out-of-
pocket expenses in doing so. LIVE will not make any payments to
any broker, dealer or other person for soliciting Consents
pursuant to the Consent Solicitation.
Consent Agent and Exchange Agent
The Company has retained American Stock Transfer & Trust
Company ("AST&T") to act as the Consent Agent and Exchange Agent
in connection with the Consent Solicitation. As Consent Agent
and Exchange Agent, AST&T will receive customary fees. In
addition, the Company will reimburse AST&T for reasonable out-of-
pocket expenses and will indemnify AST&T against certain
liabilities and expenses. All Consents, and all requests for
additional copies of the Consent Solicitation Statement or a
Consent form, should be directed to AST&T as Consent Agent at the
address and telephone numbers set forth below.
By Mail, Hand or Overnight Carrier:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: Geraldine Zarbo
Telephone: (718) 936-5100
Facsimile: (718) 235-4588
Company Address and Telephone Numbers
All inquiries relating to the Consent Solicitation should be
directed to the Company at the address and telephone numbers set
forth below.
By Mail, Hand or Overnight Carrier:
LIVE Entertainment Inc.
15400 Sherman Way, Suite 500
Van Nuys, California 91406
Attention: Michael J. White
Telephone: (818) 988-5060
Facsimile: (818) 908-9539
By order of the Board of Directors
Michael J. White
Secretary
LIVE Entertainment Inc.
Solicitation of Written Consents
to Amend the Restated Certificate of Incorporation,
as Amended, of LIVE Entertainment Inc.
American Stock Transfer & Trust Company is serving as the
Consent Agent and Exchange Agent. Deliveries of Consents should
be made to the Consent Agent at the address or facsimile number
set forth below. Requests for additional copies of the Consent
Solicitation Statement or the form of Consent should also be
directed to the Consent Agent at the telephone number and address
set forth below. Other inquiries relating to the Consent
Solicitation should be directed to the Company as Information
Agent at the address set forth below.
The Consent Agent and Exchange Agent:
American Stock Transfer & Trust Company
By Mail, Hand or Overnight Carrier:
40 Wall Street
New York, New York 10005
Attention: Geraldine Zarbo
By Facsimile:
(718) 235-4588
For Telephone Inquiries or to Confirm Facsimile:
(718) 936-5100
The Company:
LIVE Entertainment Inc.
By Mail, Hand or Overnight Carrier:
15400 Sherman Way, Suite 500
Van Nuys, California 91406
Attention: Michael J. White
By Facsimile:
(818) 908-9539
For Telephone Inquiries or to Confirm Facsimile:
(818) 988-5060
EXHIBIT A
THE PROPOSED AMENDMENT
AND FURTHER RESOLVED, that this Board of Directors hereby
adopts and declares advisable an amendment to the Restated
Certificate of Incorporation of the Corporation to delete all of
Article Fourth thereof, as heretofore amended, and by inserting
in lieu thereof the following:
"FOURTH: The aggregate number of shares of capital
stock of the Corporation (referred to herein as "Shares")
which the Corporation shall have authority to issue is
54,000,000 Shares, of which 24,000,000 shall be common stock
having a par value of $.01 per share (the "Common Stock"),
15,000,000 shall be Series A Common Stock having a par value
of $.01 per share (the "Series A Common Stock") and
15,000,000 shall be series preferred stock having a par
value of $1.00 per share (the "Series Preferred Stock").
The Series A Common Stock will be identical in all respects
and at all times to the Common Stock, except that each share
of Series A Common Stock will have one five-hundredth
(1/500th) of a vote and will be convertible into one-fifth
(1/5) share of Common Stock when not beneficially owned by
(i) the Corporation, (ii) Carolco Pictures Inc., a Delaware
corporation, (iii) an affiliate of the Corporation (as
defined under Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as
amended, as in effect on the date that this Article Fourth
becomes effective) or (iv) a successor (by merger or
otherwise) of such affiliate; provided, however, that if
there is a reclassification, stock split, reverse stock
split, change in the number of shares of Common Stock
outstanding, or alteration of the voting rights of the
Common Stock, then the conversion rights and/or voting
rights of the Series A Common Stock shall be fairly and
equitably adjusted to maintain the same rights and
attributes as the Series A Common Stock has as of the date
that this Article Fourth becomes effective. The Series
Preferred Stock may be issued, from time to time, in one or
more series as authorized by the Board of Directors. Prior
to issuance of a series, the Board of Directors by
resolution shall designate it from other series and classes
of stock of the Corporation, shall specify the number of
shares to be included in the series, and shall fix the
terms, rights, restrictions and qualifications of the shares
of a series, including any preferences, voting powers,
dividend rights and redemption, sinking fund and conversion
rights. Subject to the express terms of the Series
Preferred Stock outstanding at the time, the Board of
Directors may increase (but not above the total number of
authorized shares of the class) or decrease (but not below
the number of shares thereof then outstanding) the number of
shares.
"Every five shares of Common Stock of the Corporation
issued at the close of business on the date this Article
Fourth becomes effective (including any shares held by the
Corporation as treasury shares) shall automatically be
converted into one validly issued, fully paid and
nonassessable share of Common Stock. Upon this Article
Fourth becoming effective, each certificate representing
shares of Common Stock immediately prior to the
effectiveness of this Article Fourth shall represent a
number of shares equal to one-fifth of the shares evidenced
thereby. As soon as practicable thereafter, the Corporation
shall ask the stockholders to tender such certificates to
the Corporation or to its transfer agent, and, upon the
receipt thereof, the Corporation shall distribute, or cause
its transfer agent to distribute, to each holder of record a
certificate or certificates representing one-fifth of the
number of shares of Common Stock previously evidenced by the
certificates so tendered.
"No fractional shares of Common Stock will be issued as
a result of the conversion of shares of Common Stock
contemplated by the immediately preceding paragraph;
instead, if such conversion of any person's aggregate
holdings of Common Stock results in a fractional share
amount of Common Stock, such person shall, in lieu thereof,
be paid cash in an amount equal to the value of such
fractional share based on the average of the per share
closing bid and asked prices of the Common Stock as reported
in the OTC Bulletin Board and NQB Pink Sheets for the five
trading days immediately preceding the date that this
Article Fourth becomes effective."
