<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [ x ]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted (by Rule
14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Telechips Corporation
_______________________________________
(Name of Registrant as Specified in its Charter)
Not Applicable.
_______________________________________
(Name of Person Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which
transaction applies:
__________________________________________
(2) Aggregate number of securities to which transaction
applies: ________________________________
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11:
__________________________________________
(4) Proposed maximum aggregate value of transaction:
__________________________________________
(5) Total Fee paid: ____________.
[ ] Fee paid previously with preliminary material: ________.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:___________________
(2) Form, Schedule or Registration Statement No.:
__________________________________________
(3) Filing party:_____________________________
(4) Date filed:_______________________________
<PAGE> 2
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
__________, 1997
A Special Meeting of the Stockholders of TELECHIPS CORPORATION (the
"Company") will be held at 6880 South McCarran Boulevard, Reno, Nevada on March
5, 1997, at 8:30 A.M. Pacific time for the purpose of amending the Company's
Articles of Incorporation to increase the number of authorized shares of Common
Stock from 20,200,000 to 50,200,000.
The Board of Directors has fixed the close of business on February 10,
1997 as the record date for determination of the stockholders entitled to
notice of and to vote in person or by proxy at the Special Meeting.
Whether or not you presently plan to attend the meeting in person, the
Board of Directors urges you to date, sign, and promptly return the enclosed
proxy. Your giving of such proxy does not preclude your right to vote in
person if you attend the meeting. A postage-prepaid envelope is enclosed for
your convenience in returning the signed proxy.
Your early attention to the proxy will be appreciated.
By Order of the Board of Directors
Nelson B. Caldwell
Secretary
Reno, Nevada
Dated: ___________, 1997
A PROXY STATEMENT AND A FORM OF PROXY ACCOMPANY THIS NOTICE.
<PAGE> 3
TELECHIPS CORPORATION
6880 South McCarran Boulevard, Reno, Nevada 89509
__________________________
PROXY STATEMENT
__________________________
A Notice of a Special Meeting of Shareholders of TELECHIPS CORPORATION
(the "Company") is set forth on the preceding page and enclosed herewith is a
form of proxy solicited by the Board of Directors of the Company. This Proxy
Statement is being first sent to shareholders on or about February 12, 1997.
SOLICITATION OF PROXIES
This proxy solicitation is being made by the Board of Directors of the
Company. The expense of the solicitation will be paid by the Company. To the
extent necessary to assure sufficient representation at the Special Meeting,
proxies may be solicited by any appropriate means by directors, officers,
regular employees of the Company and the stock transfer agent for the Company's
Common Stock, who will not receive any additional compensation therefor. The
Company will request that banks, brokers and other fiduciaries solicit their
customers who own beneficially the Common Stock listed of record in names of
nominees and, although there is no formal arrangement to do so, the Company
will reimburse such persons the reasonable expenses of such solicitation.
VOTE REQUIRED AND VOTING PROCEDURES
Only stockholders of record as of the close of business on February
10, 1997 (the "Record Date"), are entitled to notice of and to vote at the
Special Meeting and/or any adjournment thereof. The outstanding stock of the
Company on the Record Date entitled to vote consists of 13,792,995 shares of
Common Stock.
Each holder of Common Stock will be entitled to one vote, in person or
by proxy, for each share standing in its name on the books of the Company as of
the Record Date on each of the matters duly presented for vote at the Special
Meeting.
In connection with the solicitation by the Board of Directors of
proxies for use at the Special Meeting, the Board of Directors has designated
Kevin A. Coyle, Esq. as proxy.
The Board of Directors is not aware of any matters that will come
before the Special Meeting other than as described above. However, if such
matters are presented, the named proxy will, in the absence of instructions to
the contrary, vote such proxies in accordance with the judgment of such named
proxy with respect to any such other matter properly coming before the Special
Meeting.
A majority of the outstanding shares of Common Stock must be
represented in person or by proxy at the Special Meeting in order to constitute
a quorum for the transaction of business. The
<PAGE> 4
affirmative vote of a majority of the voting power entitled to vote at the
Special Meeting is required by the Company for approval of the amendment of the
Articles of Incorporation.
Votes that are cast against a proposal will be counted for purposes of
determining (i) the presence or absence of a quorum and (ii) the total number
of votes cast with respect to such proposal.
While there is no definitive statutory or case law authority in Nevada
as to the proper treatment of abstentions in the counting of votes with respect
to a proposal such as the amendment of the Articles of Incorporation, the
Company believes that abstentions should be counted for purposes of determining
both (i) the presence or absence of a quorum for the transaction of business
and (ii) the total number of votes cast with respect to such proposal. In the
absence of controlling precedent to the contrary, the Company intends to treat
abstentions in such manner. Accordingly, abstentions as to the amendment of
the Articles of Incorporation will have the same effect as a vote against such
proposal.
A proxy submitted by a stockholder may indicate that all or a portion
of the shares of Common Stock represented by such proxy are not being voted by
such stockholder with respect to a particular matter. This could occur, for
example, when a broker is not permitted to vote stock held in street name on
certain matters in the absence of instructions from the beneficial owner of the
stock. The shares subject to any such proxy which are not being voted with
respect to a particular matter will be considered shares not present and
entitled to vote on such matter, although such shares may be considered present
and entitled to vote for other purposes and will count for purposes of
determining the presence of a quorum.
All shares represented by valid proxies received by the Company prior
to the Special Meeting will be voted as specified in the proxy; if no
specification is made and if discretionary authority is conferred by the
stockholder, the shares will be voted FOR the proposals described below.
REVOCABILITY OF PROXIES
A stockholder giving a proxy has the power to revoke it any time prior
to its exercise by delivering to the Secretary of the Company a written
revocation or a duly executed proxy bearing a later date, or by attending the
meeting and voting the shares in person.
APPRAISAL OR SIMILAR RIGHTS
Neither the stockholders abstaining nor voting against the proposal
which is the subject of this Proxy Statement have any appraisal or similar
rights of dissenters.
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INSPECTOR OF ELECTIONS
The Board of Directors has appointed Mick L. Friend, CPA as the
Inspector of Elections for the Special Meeting. The Inspector of Elections
will determine the number of shares of Common Stock represented in person or by
proxy at the Special Meeting, whether a quorum exists, the authenticity, and
validity and effect of proxies, and will receive and count the votes.
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<PAGE> 6
PROPOSAL
AMENDMENT OF THE ARTICLES OF INCORPORATION TO AUTHORIZE
ADDITIONAL SHARES OF COMMON STOCK
On January 20, 1997, the Board of Directors unanimously adopted
resolutions approving a proposal to amend the Articles of Incorporation of the
Company to increase the number of authorized shares of Common Stock from
20,200,000 to 50,200,000 shares (the "Amendment"). The text of the Amendment
is set forth in Appendix A to this Proxy Statement. The affirmative vote of
the holders of more than 50% of the outstanding shares of Common Stock is
required to approve the adoption of the Amendment.
As of the date of this Proxy Statement, 13,792,995 shares of Common
Stock are outstanding and approximately 3,073,314 shares of Common Stock are
reserved for issuance upon exercise of outstanding warrants and stock options
and 403,352 shares of Common Stock are reserved for future grant under
outstanding Stock Option Plans, leaving the Company with approximately
2,930,339 shares available for future issuance.
On October 2, 1996, the Company raised approximately $2,900,000 in net
proceeds in a placement of 4,188 shares of its 4% Convertible Preferred Stock,
stated value $1,000 per share (the "Preferred Shares") under Regulation S. The
Preferred Shares are convertible on or after November 11, 1996, at a conversion
price equal to the lower of $3.00 or the average five-day closing bid price
prior to the date of conversion.
On December 6, 1996, the shareholders approved an amendment to the
Articles of Incorporation to increase the number of authorized shares of Common
Stock from 10,200,000 to 20,200,000 ("Original Amendment"). The Original
Amendment was based, in part, on the Preferred Shares being converted at an
assumed exercise price of $3.00 per share. However, due to fluctuations in the
price of the Common Stock, the actual conversion price has been much lower.
Assuming a conversion price of $.40 per share, 4,300,000 shares must be
reserved for conversion of the remaining unconverted Preferred Shares, thus
leaving the Company in a deficit share position of at least 1,370,000 shares.
Further, additional shares of Common Stock may be required depending on future
fluctuations in the Common Stock price.
In addition, the Board of Directors has determined, based on its
current proposed growth plans and assumptions relating to its growth and
operations, that the proceeds from the Regulation S Offering, the IPO, private
placements, borrowings and planned revenues will not be sufficient to satisfy
the Company's contemplated cash requirements for the immediate future and
that the Company will be required to raise additional funds within the very
near future. Therefore, the Board deems it essential that the Amendment take
place if the Company is to continue as a going concern.
THE BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS A VOTE "FOR" THE AMENDMENT
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<PAGE> 7
PRINCIPAL STOCKHOLDERS
The table below sets forth certain information as of January 15, 1997
(the "Reference Date") with respect to the beneficial ownership of (i) each
person who beneficially owns more than 5% of the outstanding shares of Common
Stock, (ii) each director, (iii) certain named executive officers and (iv) all
officers and directors as a group. Except as otherwise indicated below, the
address for each such person is: c/o Telechips Corporation, 6880 S. McCarran
Boulevard, Reno, Nevada 89509.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of Percentage
Beneficial Owner Beneficial Ownership(1) Beneficially Owned
- ---------------- ----------------------- ------------------
<S> <C> <C>
C. A. Burns . . . . . . . . . . . . . . 462,764(2) 3.4%
Hans Junker . . . . . . . . . . . . . . 179,292(4) 1.3%
Randall Pinato . . . . . . . . . . . . 176,292(5) 1.3%
Bruce Chatterley . . . . . . . . . . . 30,000(6) *
Frank Vigilante . . . . . . . . . . . . 30,000(6) *
All Officers and Directors as a
Group (six persons) . . . . . . . . . . 1,103,716(7) 8.0
- ---------------
</TABLE>
* Less than 1%.
(1) A person is deemed to be the beneficial owner of voting securities
that can be acquired by such person within 60 days from the date of
this Proxy Statement upon the exercise of options, warrants or
convertible securities. Each beneficial owner's percentage ownership
is determined by assuming that convertible securities, options or
warrants that are held by such person (but not those held by any other
person) exercisable within such period have been exercised.
Percentage figures based on 13,792,995 shares of Common Stock
outstanding on the Reference Date, and including 933,600 shares of
Common Stock held in escrow pursuant to the Series B Escrow Agreement
by and among the Company, American Stock Transfer Company of New York
as escrow agent, and certain stockholders of the Company, dated as of
October 31, 1994, as amended on October 20, 1995 (the "Escrow
Agreement").
(2) Includes (i) 101,346 shares of Common Stock, (ii) 101,346 shares of
Common Stock held in escrow pursuant to the Escrow Agreement and (iii)
260,072 shares of Common Stock held in escrow under the terms of the
of the Founder's Option Agreement between the Company and certain
founders (the "Founder's Options"). The stockholder of record of the
shares of Common Stock is Marie A. Bell as Trustee of the Marie A.
Bell Separate Property Trust U/D/T Dated October 16, 1992; Marie A.
Bell is the wife of C. A. Burns; the beneficiary of said trust is C.
A. Burns.
(3) Includes warrants to purchase up to 20,108 shares of Common Stock.
(4) Includes (i) 38,608 shares of Common Stock, (ii) 38,608 shares of
Common Stock held in escrow pursuant to the Escrow Agreement, (iii)
99,076 shares of Common Stock held in escrow pursuant to the Founder's
Options and (iv) 3,000 shares held by the Hans Jorgen Junker Trust, of
which Mr. Junker is the trustee.
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<PAGE> 8
(5) Includes (i) 38,608 shares of Common Stock, (ii) 38,608 shares of
Common Stock held in escrow pursuant to the Escrow Agreement and (iii)
99,076 shares of Common Stock held in escrow under the terms of the
Founder's Options.
(6) Includes Shares of Common Stock held in escrow pursuant to the terms
of the Directors Option Agreements entered into between the Company
and non-employee directors of the Company (the "Director Options").
(7) Includes (i) 220,170 shares of Common Stock, (ii) 217,170 shares of
Common Stock held in escrow pursuant to the terms of the Escrow
Agreement, (iii) 627,300 shares of Common Stock held in escrow
pursuant to the terms of the Directors and Founders Options, (iv)
options granted under the Company's 1994 Option Plan to purchase
14,076 shares of Common Stock, and (v) options granted under the
Company's 1995 Option Plan to purchase 25,000 shares of Common Stock.
OTHER MATTERS
The Company does not know of any matter other than those discussed in
the foregoing materials contemplated for action at the Special Meeting. Should
any other matter be properly brought before the Special Meeting, the holders of
the proxies herein solicited will vote thereon in their discretion.
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<PAGE> 9
SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING OF STOCKHOLDERS
In accordance with Rule 14a-8 of the proxy rules of the Securities and
Exchange Commission, stockholders are advised that any proposal which a
stockholder wishes to have presented at the 1998 Annual Meeting of the
Stockholders and included in the Company's Proxy Statement and form of proxy
for such meeting must be received by the Company, at its principal office, 6880
South McCarran Boulevard, Reno, Nevada 89509, Attention: Mr. Nelson B.
Caldwell, no later than December 1, 1997.
___________, 1997
By Order of the Board of Directors
Nelson B. Caldwell
Secretary
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<PAGE> 10
APPENDIX A
CERTIFICATE OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
TELECHIPS CORPORATION
We the undersigned President and Secretary of TELECHIPS CORPORATION DO
HEREBY CERTIFY:
1. That the Board of Directors of TELECHIPS CORPORATION pursuant to a special
meeting of the Board on January 20, 1997, adopted resolutions to amend the
Articles of Incorporation as follows:
"The First Paragraph of Article FOUR be amended in its entirety to
read as follows:
"FOUR: The total number of shares of all classes of stock
which the Corporation has authority to issue is 53,200,000 consisting
of (A) 50,200,000 shares of Common Stock, par value $0.01 per share
(the "Common Stock" and the holders thereof referred to herein as the
"Common Stockholders"), and (B) 3,000,000 shares of Preferred Stock,
par value $1.00 per share (the "Preferred Stock" and the holders
thereof being referred to herein as the "Preferred Stockholders"),
none of which shall be entitled to any preemptive rights."
2. That the number of stock of TELECHIPS CORPORATION outstanding
and entitled to vote on an amendment to the articles of incorporation is
____________ shares of Common Stock; that said change and amendment has been
consented to and authorized by at least a majority of the shares of stock
outstanding and entitled to vote thereon.
________________________
C. A. Burns
President
________________________
Nelson B. Caldwell
Secretary
<PAGE> 11
STATE OF NEVADA )
COUNTY OF )
On this _____ day of _____________ in the year 1997, before me
personally appeared C. A. Burns and Nelson Caldwell, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the persons whose
names are subscribed to this instrument, and acknowledged that they executed
it.
________________________
Notary Public
My commission expires on
________________________
<PAGE> 12
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
OF
TELECHIPS CORPORATION
THE UNDERSIGNED UNDERSTANDS THAT THIS PROXY IS BEING SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS OF TELECHIPS CORPORATION, A NEVADA CORPORATION
(THE "CORPORATION"). The undersigned hereby appoints Kevin A. Coyle, Esq.,
with full power of substitution, proxy for the undersigned to vote all shares
of Common Stock of the Corporation which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Corporation to be held on March 5,
1997, at the principal office of the Corporation located at 6880 South McCarran
Boulevard, Reno, Nevada, at 8:30 A.M. local time, or any adjournment thereof.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder.
AMENDMENT OF THE ARTICLES OF INCORPORATION TO INCREASE THE AUTHORIZED
NUMBER OF COMMON STOCK FROM 20,200,000 to 50,200,000 SHARES
( ) FOR amendment of the Articles of Incorporation.
( ) AGAINST amendment of the Article of Incorporation.
( ) ABSTAIN from voting for or against amendment of the Article of
Incorporation.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSAL ABOVE.
When shares are held by joint tenants, both should sign. When signing
as attorney, executor, administrator, trustee or guardian, or on behalf of an
entity, please provide the name of the shareholder of record and the full title
of the person signing on behalf of the shareholder of record.
Dated: _____________, 1997
________________________________________
Signature of Shareholder
________________________________________
Print Name of Shareholder
________________________________________
Signature of Shareholder
________________________________________
Print Name of Shareholder
SHAREHOLDERS SHOULD SIGN THIS PROXY PROMPTLY AND RETURN IT
IN THE ENCLOSED ENVELOPE.
