LASER-PACIFIC MEDIA CORPORATION
809 N. Cahuenga Blvd.
Hollywood, California 90038
(213) 462-6266
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
June 19, 1998
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
the accompanying proxy by the Board of Directors of Laser-Pacific Media
Corporation, ("the Company"), a Delaware corporation. This proxy is for use at
the annual meeting of stockholders of the Company (the "Annual Meeting"). The
Annual Meeting is to be held at the Hollywood Roosevelt Hotel, 7000 Hollywood
Blvd., Hollywood, CA 90028 on June 19, 1998 at 3:00 p.m., and at any
adjournments thereof, for the purposes set forth in the attached Notice of
Annual Meeting of Stockholders. The accompanying proxy names James R. Parks as
proxy holder for purposes of the Annual Meeting.
All shares of common stock of the Company ("Common Stock") represented by a
properly completed proxy received in time for the Annual Meeting will be voted
by the proxy holders in accordance with the instructions contained therein. If
instructions are not given in the proxy, it will be voted "FOR" the election of
the directors nominated as set forth under "Election of Directors" below. With
respect to any other item of business that may come before the Annual Meeting,
the proxy holders will vote the proxy in accordance with their best judgment.
Any stockholder who returns a proxy has the right to revoke it at any time
before it is exercised by attending the Annual Meeting and voting in person; or
by delivering a written statement to the Company, stating that the proxy is
revoked; or by executing and delivering to the Secretary of the Company a duly
executed proxy bearing a later date than the enclosed proxy.
This Proxy Statement, together with the accompanying proxy, is first being
mailed to the Company's stockholders, on or about May 18, 1998, to the Company's
stockholders of record at the close of business on May 15, 1998.
The Company's principal executive offices are located at 809 North Cahuenga
Boulevard, Hollywood, California 90038
VOTING SECURITIES
The Company has one class of stock outstanding, designated Common Stock,
with a par value of $.0001. Each share of Common Stock is entitled to one vote
on each matter to be voted on at the Annual Meeting, except as described under
"Election of Directors," below. Only stockholders of record as of the close of
business on May 15, 1998 are entitled to notice of and to vote at the Annual
Meeting. As Of April 24, 1998, there were 7,128,172 shares of Common stock
outstanding. A majority of the outstanding shares of Common Stock must be
present in person or by proxy at the Annual Meeting to constitute a quorum for
the transaction of business.
PROPOSAL 1
ELECTION OF DIRECTORS
Voting
The Company is incorporated in the State of Delaware and neither the laws
of that state nor the Certificate of Incorporation of the Company requires
cumulative voting in the election of the Board of Directors. However, under
certain circumstances, as set forth in Section 2115 of California Corporations
Code, stockholders may be entitled to cumulate their votes. While it is unclear
whether or not the provisions of Section 2115 apply to the Company, the Board of
Directors has determined that stockholders may cumulate their votes with respect
to the election of directors for the Company if one or more stockholders gives
notice at the Annual Meeting, prior to voting, of an intention to cumulate votes
for a nominated director. A stockholder may cumulate votes by casting for the
election of one nominee a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which his shares are entitled, or
by distributing his votes on the same principle among as many candidates as he
sees fit. If a proxy is marked "FOR" the election of directors, it may, at the
discretion of the proxy holders, be voted cumulatively in the election of
directors. If cumulative voting is utilized, the proxy holders intend to
distribute the votes represented by each proxy, unless such authority is
withheld, among the four nominees named, in such proportion as they see fit.
Nominees receiving the highest number of affirmative votes cast, up to the
number of directors to be elected, will be elected as directors.
Nominees
Four directors are to be elected at the Annual Meeting, each to hold office
until the next annual meeting and until his respective successor is elected and
qualified. The Board of Directors has nominated for election as directors the
four persons named below, all of whom are incumbent directors. All of these
nominees have consented to being named herein and have indicated their intention
to serve as directors of the Company, if elected. If any of such nominees should
be unable or should decline to serve, the discretionary authority provided in
the proxies received will be exercised to vote for a substitute nominee or
nominees of the Board of Directors, unless otherwise instructed. Unless
otherwise directed in the accompanying proxy, the persons named therein will
vote for the election of the four nominees listed below. The Board of Directors
has no reason to believe that any substitute nominee will be required.
The following table sets forth certain information as of April 24, 1998,
with respect to the Board's nominees:
Director Name Age Since Position with Company
James R. Parks (1) 47 1984 Chairman of the Board
and Chief Executive Officer
Emory M. Cohen (1) 55 1983 President, Chief Operating Officer
and Director
Ronald Zimmerman (2) 58 1996 Director
Cornelius P. McCarthy III (2) 38 1996 Director
(1) Includes service as a director of a predecessor corporation.
(2) Member of the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
NAMED. PROXIES RETURNED TO THE COMPANY WILL BE VOTED "FOR" THE NOMINEES NAMED
UNLESS OTHERWISE INSTRUCTED.
Biographical Information
The following biographical information is furnished with respect to the
Company's directors:
James R. Parks was a director of Spectra Image Inc. ("Spectra Image") from
July 1984 until its merger (the "Combination") with Pacific Video, Inc.
("Pacific Video") to form the Company in 1990, and since then has been a
director of the Company. Mr. Parks has been Chairman of the Board and Chief
Executive Officer of the Company since March of 1994. Since 1978, Mr. Parks has
been a member of Parks, Palmer, Turner & Yemenidjian, certified public
accountants. During the last six years Mr. Parks has been actively involved in
performing financial turnarounds on various real estate projects. As part of
that activity, Mr. Parks was an officer of a corporation that was co-general
partner of several limited partnerships owning real estate which filed for
reorganization under Chapter 11 of the Federal Bankruptcy Law. All of the
partnerships filing pre-1995 Chapter petitions have been reorganized and emerged
from Chapter 11. In 1995, a partnership in which Mr. Parks was an officer of the
corporate general partner and which held real property, filed for reorganization
under Chapter 11. In 1996, the reorganization was dismissed and the Property was
sold.
Emory M. Cohen is the Company's President and Chief Operating Officer and a
director and has held such positions since the Combination. Previously, he was
President and Chief Operating Officer of Pacific Video from May 1983 until the
Combination. From 1963 until February 1978, Mr. Cohen was employed by Glen Glenn
Sound, a leading motion picture and television sound recording company. He
served in many different capacities at Glen Glenn Sound. From 1974 to 1978, he
held the position of Vice President-Operations. In 1978, he joined Compact
Video, where he became Group Vice President-Service Companies, as well as
President of Compact Video Services, Inc., and of Image Transform, Inc., both
Compact Video subsidiaries. Mr. Cohen received a motion picture Academy Award in
1978 for inventing a system that applies electronic and videotape technology to
motion picture post-production sound recording, and an Emmy Award in 1989 in
connection with the Company's Electronic LaboratoryTM.
Ronald Zimmerman has served as a director of the Company since October
1996. Mr. Zimmerman is a self-employed financial advisor and businessman. From
1986 to 1994, he served as Director, Senior Vice President and Chief Financial
Officer of the Todd-AO Corporation.
Cornelius P. McCarthy III has served as a director of the Company since
October 1996. Since December 1996, Mr. McCarthy has been employed as an
investment banker with Pennsylvania Merchant Group, Ltd. as Senior Vice
President. Mr. McCarthy has served in similar capacities with Laidlaw and
Company, (November 1993 to December 1996), McCarthy and Company (January 1993 to
November 1993) and Kemper Securities (1988-1992). Mr. McCarthy currently serves
on the Boards of Directors of Bonded Motors, Inc. and Phoenix International Life
Sciences, Inc.
No family relationships exist between any of the officers or directors of
the Company.
EXECUTIVE OFFICERS
Officers are appointed by the Board of Directors of the Company.
Information with respect to Messrs. James R. Parks (Chairman of the Board and
Chief Executive Officer) and Emory M. Cohen (President and Chief Operating
Officer) is set forth above. Information with respect to Leon D. Silverman,
Robert McClain and Randolph D. Blim is set forth below:
Name Age Position with Company
Leon D. Silverman 43 Executive Vice President
Randolph D. Blim 51 Senior Vice President
Robert McClain 50 Chief Financial Officer
Vice President and Secretary
Leon D. Silverman has served as Executive Vice President since the
Combination. He was Pacific Video's Vice President of Marketing and Sales from
1982 until the Combination. Previous to joining Pacific Video, he was Director
of Marketing and Sales at Compact Video Services, Inc., a subsidiary of Compact
Video. Mr. Silverman is a Founding Member of the Technology Council of the
Television and Motion Picture Industry and currently serves as Executive Vice
President of its Executive Committee. In addition, he currently serves Executive
Vice President on the Board of Directors of the International Teleproduction
Society.
Randolph D. Blim has been the Senior Vice President of Engineering since
the Combination. He was Vice President of Engineering for Pacific Video and
Pacific Video Industries, Inc. (a predecessor company of Pacific Video) from
1972 until the Combination. During the period 1982-1984 Mr. Blim served as a
consultant to the American Broadcasting Company providing design services for
the 1984 Los Angeles Summer Olympic Games. From 1969 to 1972, he was employed by
ABC, working on special camera and engineering projects for ABC's Wide World of
Sports. From 1966 to 1969 he was Director of Engineering for TelWest
Productions, and Seros Mobile Videotape Productions, both television facilities
companies. Mr. Blim was awarded an Emmy in 1989 for Outstanding Achievement in
Engineering Development in connection with the Company's Electronic
LaboratoryTM.
Robert McClain became Chief Financial Officer in November 1994. He was
employed by Arthur Andersen and Co. from 1975 through 1978. He was a Senior
Accountant and a Certified Public Accountant when he left. He was employed at
TRE Corporation, a diversified manufacturing company, from 1978 through 1987,
where he served in various capacities ranging from Director of Taxation and
Insurance to Assistant to the CEO, leaving when TRE was acquired by ALCOA
Aluminum Corp. He was employed by Memtech Technology Corp., a manufacturer of
computer memory, as General Manager and CFO from 1987 through 1991 and by Betson
Pacific, a video game developer and distributor, as CFO and Director of
Operations from 1992 through November 1994 when he left to join Laser-Pacific.
Mr. McClain is a Director of Blood Services, Southern California Region of the
American Red Cross.
BOARD OF DIRECTORS COMMITTEES
The Audit Committee is the only standing committees of the Board of
Directors. The Audit Committee met once during 1997. The principal duties of the
Audit Committee are to approve selection and engagement of independent auditors
and review with them the plan and scope of their audit for each year, the
results of such audit when completed and their fees for services performed. Mr.
Zimmerman and Mr. McCarthy are currently the sole members of the Audit
Committee.
The Company's Stock Option Plan is administered by the Board of Directors.
Attendance and Compensation
During the year ended December 31, 1997, the Board of Directors of the
Company met nine times. Each of the directors attended all of the meetings of
the Board of Directors. Directors who are not officers or employees of the
Company receive $1,000 per month.
Delinquent Filings
Based solely on a review of forms 3 and 4 and any amendments thereto
furnished to the Company pursuant to Rule 16a-3 (e) under the Securities
Exchange Act of 1934, or representations that no Forms 5 were required, the
Company believes that with respect to fiscal 1997, its officers, directors and
beneficial owners of more than 10% of its equity timely complied with all
applicable Section 16 (a) filing requirements, with the following exceptions:
Mr. Parks did not timely file Form 4 upon the issuance of stock options in
December of 1997. The delinquent reports were filed on February 3, 1998.
EXECUTIVE COMPENSATION
Under rules adopted by the Securities and Exchange Commission (the "SEC")
in October 1992, the Company is required to provide certain data and information
relating to the compensation and benefits provided to the Company's chief
executive officer, and the four other most highly compensated executive officers
of the Company at the end of 1997; a report furnished by the Company's Board of
Directors regarding executive compensation; and certain information regarding
the performance of the Company's Common Stock.
Report of the Board of Directors on Executive Compensation
The Board of Directors is responsible for reviewing benefits and
compensation for all of the Company's officers. The Board's executive
compensation policies are designed to enhance the financial performance of the
Company, and thus stockholder value, by significantly aligning the financial
interest of the key executives with those of stockholders
The executive compensation program is viewed in total considering all of
the component parts: base salary and long-term incentive compensation in the
form of restricted stock awards and stock options. In evaluating the performance
of and setting the base salary and incentive compensation of the executive
officers, the Board considers, in the aggregate, the following factors: industry
factors, taking into account compensation paid by competitors and the amount
required to be paid by the Company to retain key employees; the progress made by
the Company in the growth of business; the performance of the Company's stock;
and the Company's overall financial performance.
The Board of Directors did not award any performance bonuses for the fiscal
year ended December 31, 1997.
Following is a summary of the current compensation of the Chief Executive
Officer of the Company and the four other most highly compensated executive
officers of the Company.
James R. Parks is currently employed by the Company at an annual salary of
$208,000. Mr. Parks is not employed pursuant to a written agreement, but serves
at the discretion of and on terms determined by the Board of Directors.
Emory M. Cohen has a five-year employment agreement with the Company,
entered into as of May 15, 1990, which has no termination date but is terminable
upon five years' written notice or upon 30 days notice for cause, as defined.
Under the terms of the agreement, Mr. Cohen is entitled to a minimum annual
salary of $350,000, subject to adjustment if the cost of living increases more
than 10 percent in any year, with a bonus in an amount to be determined by the
Board of Directors. In addition, he is entitled to other specified benefits such
as an automobile, reimbursement of expenses, and life, health, and disability
insurance. In the event of a change in control of the Company, Mr. Cohen shall
be entitled to a lump sum payment of three times his annual compensation or if
he is terminated other than for specified reasons or if he terminates his
contract within nine months of such event.
Leon D. Silverman is employed by the Company at a current annual salary of
$215,000, and is entitled to other specified benefits such as an automobile
allowance, reimbursement of expenses, and life, health, and disability benefits.
Mr. Silverman currently has no written agreement with the Company and serves at
the discretion of the Board of Directors
Randolph D. Blim is employed by the Company pursuant to the terms of a
three-year employment agreement entered into as of July 24, 1995. The agreement
expires on July 23, 1998, if the executive is given written notice 120 days
prior to date of termination. No such notice has been given to Mr. Blim;
consequently, his employment contract will be automatically renewed for an
additional year, until July 23, 1999. If the 120-day written notice is not given
by either party at the end of the current one-year extension, and in all
subsequent years, the agreement will be renewed for one additional year. The
agreement is terminable upon 30 days notice for cause as defined in the
agreement. Mr. Blim is currently entitled to a minimum annual salary of $201,000
with required minimum yearly increases of 3% over the term of the agreement,
with an annual bonus in an amount to be determined by the Board of Directors. He
is also entitled to other specified benefits such as an automobile allowance,
reimbursement of expenses, and life, health, and disability benefits.
Robert McClain is employed by the Company at a current annual salary of
$145,000 and is entitled to specified benefits such as an automobile allowance,
reimbursement of expenses, and life, health, and disability benefits. Mr.
McClain is employed under a letter of agreement with the Company and serves at
the discretion of the Board of Directors
The SEC requires public companies to state their compensation policies with
respect to recently enacted federal income tax laws that limit to $1,000,000 the
deductibility of compensation paid to executive officers named in the proxy
statement of such companies. In light of the current level of compensation of
the Company's named executive officers, the Board of Directors of the Company
has not adopted a policy with respect to the deductibility limit, but will adopt
such a policy should it become relevant.
SUBMITTED BY THE BOARD OF DIRECTORS
OF LASER-PACIFIC MEDIA CORPORATION
/S/ James R. Parks
James R. Parks, Chairman
/S/ Emory M. Cohen
Emory M. Cohen
/S/ Ronald Zimmerman
Ronald Zimmerman
/S/ Cornelius P. McCarthy III
Cornelius P. McCarthy III
SUMMARY COMPENSATION TABLE
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long Term Compensation
----------------------------------------
----------------------------------------
Annual Compensation Awards Payouts
------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Name Annual Restricted Securities All Other
And Compen- Stock Underlying LTIP Compen-
Principal sation Award(s) Options Payouts sation
Position Year Salary ($) Bonus ($) ($) ($) ($) ($)
James R. Parks 1995 208,000 -0- -0- -0- -0- -0- -0-
CEO 1996 208,000 -0- -0- -0- -0- -0- -0-
1997 208,000 -0- -0- -0- 31,000 -0- -0-
Emory M. Cohen 1995 317,577 -0- 21,965 -0- -0- -0- -0-
President 1996 * 410,002 -0- 17,394 -0- -0- -0- -0-
1997 * 402,000 -0- 18,488 -0- 37,600 -0- -0-
Gregory L. Biller 1995 180,000 -0- 19,738 -0- -0- -0- -0-
Vice Chairman of the 1996 39,067 -0- * 107,000 -0- -0- -0- -0-
Board (Retired 3/31/96) 1997 -0- -0- -0- -0- -0- -0- -0-
Leon D. Silverman 1995 215,000 -0- 72,427 -0- -0- -0- -0-
Vice President 1996 * 244,373 -0- 9,868 -0- -0- -0- -0-
1997 240,506 -0- 8,198 -0- 26,800 -0- -0-
Randolph D. Blim 1995 178,519 -0- 3,562 -0- -0- -0- -0-
Vice President 1996 * 244,462 -0- 4,753 -0- -0- -0- -0-
1997 208,105 -0- 4,504 -0- 26,200 -0- -0-
Robert McClain 1995 134,483 -0- 8,919 -0- -0- -0- -0-
Vice President, CFO 1996 153,464 -0- 13,349 -0- -0- -0- -0-
1997 159,792 -0- 13,000 -0- 23,900 -0- -0-
</TABLE>
*Includes repayment in 1996 and 1997 of voluntary payroll deferrals in 1993,
1994, and 1995.
The following Performance Graph compares the Company's cumulative total
shareholder return on its Common Stock for the period starting January 1, 1993
to December 31, 1997, with the cumulative return of the Standard and Poor's
Stock Index and a peer group of companies, the Standard and Poor's Entertainment
Index, neither of which include the Company. The Performance Graph assumes $100
invested on January 1, 1993 in the Company's Common Stock, the S&P Entertainment
Index and the S&P 500 Index.
Annual Return Percentage
<TABLE>
<S> <C> <C> <C> <C> <C>
Company/Index Dec 93 Dec 94 Dec 95 Dec 96 Dec 97
- ----------------------------------------------------- ----------- ---------- --------- ---------- ----------
Laser-Pacific Media Corp. -82.02% 33.45 0.00 -16.67 -70.08
S&P Entertainment-500 15.58% -4.62 20.14 1.53 45.91
S&P 500 Index 10.08% 1.32 37.58 22.96 33.36
</TABLE>
Indexed Returns
<TABLE>
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Base
Period
Company/Index Dec 92 Dec 93 Dec 94 Dec 95 Dec 96 Dec 97
- ---------------------------------------- ------------ ----------- ------------ ------------ ----------- ------------
Laser-Pacific Media Corp. 100 17.98 24.00 24.00 20.00 5.98
S&P Entertainment-500 100 115.58 110.24 132.44 134.48 196.22
S&P 500 Index 100 110.08 111.53 153.45 188.68 251.63
</TABLE>
Stock Option Plans
In April 1985, Spectra Image adopted a ten-year employee stock option plan
which provided for the grant to executive officers and key employees of options,
qualified under the Internal Revenue Code of 1986, as amended, ("incentive stock
options") to purchase up to 300,000 shares of common stock at an exercise price
not less than the fair market value of the common stock on the date of grant. In
connection with the Combination, outstanding options under the plan became
exercisable into shares of Common Stock of the Company. This plan terminated in
April 1995. As of December 31, 1997, 75,281 options to purchase common stock
remain outstanding.
In June 1987, Pacific Video adopted a nine-year stock option plan providing
for the issuance of options to officers, directors and key employees to acquire
up to an aggregate of 165,029 shares of Common Stock pursuant to incentive or
non-qualified stock options. The exercise price of all options granted under the
plan was required to be not less than the fair market value on the date of
grant. In connection with the Combination, outstanding options under the plan
became exercisable into shares of Common Stock of the Company. This plan
terminated in April 1996. As of December 31, 1996, 53,235 options to purchase
common stock remain outstanding.
In September 1990 in connection with the Combination, the Board of
Directors of the Company adopted the 1990 Stock Option Plan (the "1990 Plan")
which provides for the issuance of incentive or non-qualified stock options. An
aggregate of 150,000 shares of Common Stock were initially reserved for grant
under the 1990 Plan to officers, directors and key employees of the Company. The
exercise price of a stock option granted under the plan may not be less than the
fair market value of the underlying shares on the date of the grant; options may
be granted for a term of up to 10 years. Under the terms of the 1990 Plan,
participants may receive options to purchase Common Stock in such amounts, and
for such prices, as may be established by the stock option plan committee.
Provided, however, that the exercise price of a stock option granted under the
Plan may not be less than the fair market value of the underlying shares on the
date of grant.
In December 1997, the Board of Directors of the Company adopted the
Incentive and Non-Qualified Stock Option Plan (1997), (the "1997 Plan"), which
provides for the issuance of incentive or non-qualified stock options. Under the
1997 Plan, 500,000 shares of the Company's common stock (par value $0.0001) were
allocated for grant. The exercise price of a stock option granted under the plan
may not be less than the fair market value of the underlying shares on the date
of the grant; options may be granted for a term of up to 10 years after the
option is awarded. Under the terms of the 1997 Plan, participants may receive
options to purchase Common Stock in such amounts, and for such prices, as may be
established by the Company's Board of Director's if a stock option plan
committee has not been established. Provided, however, that the exercise price
of a stock option granted under the Plan may not be less than the fair market
value of the underlying shares on the date of grant. As of December 31, 1997,
459,600 options had been granted under the Plan to employees and directors. As
of December 31, 1997, these options remain outstanding.
Option / SAR Grants
The following table set forth certain information with respect to option to
purchase Common Stock granted during the year ended December 31, 1997 to each of
the named executive officers.
OPTION / SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
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Individual Grants Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Option Term (1)
- ------------------------------------------------------------------------------------- ------------------------------
Name Number of % of Total Exercise Expiration 5% (2) 10% (3)
Securities Options/SARs Price Per Date
Underlying Granted to Share
Options/SARs Employees in
Granted (#) Fiscal Year
-------------- -------------- ----------- ------------- ------------ -------------
James R. Parks 31,000 7.8% $0.22 12/12/07 $4,289 $10,869
Emory M. Cohen 37,600 9.4% $0.22 12/12/07 $5,202 $13,183
Leon D. Silverman 26,800 6.7% $0.22 12/12/07 $3,708 $9,397
Randolph D. Blim 26,200 6.6% $0.22 12/12/07 $3,625 $9,186
Robert McClain 23,900 6.0% $0.22 12/12/07 $3,307 $8,380
</TABLE>
(1) The values shown are based on the indicated assumed annual rate of
appreciation compounded annually. Actual gains realized, if any, on stock option
exercises and Common Stock holdings are dependent on the future performance of
the Common Stock and overall stock market conditions. There can be no assurance
that the values shown in the table will be achieved. If the performance of the
Company's stock exceeds an annual growth rate of the 5% or 10% used, the
potential realized value will be higher than shown above.
(2) Represents an assumed market price per share of Common Stock of $0.36.
(3) Represents an assumed market price per share of Common Stock of $0.57.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth information with respect to those persons
known by the Company to own beneficially more than 5% of the Company's common
stock as of April 24, 1998. Except as otherwise noted, and subject to applicable
community property and similar laws, each person listed has sole voting power
(if applicable) and investment discretion with respect to the securities shown
as beneficially owned.
Name and Address Amount and Nature of Percent of
Of Beneficial Owner Beneficial Ownership(1) Class(1)
James R. Parks (2) 778,903 9.3%
1990 South Bundy Drive
Los Angeles, California 90025
John Paul De Joria 606,000 7.2%
2745 S. Buffalo
Las Vegas, Nevada 89117
McCrae Holdings Inc. 512,993 6.1%
C/O Chemical Bank
270 Park Avenue
New York, New York 10017
304 E. 45th Associates 500,000 6.0%
C/O Williams Real Estate Company, Inc.
530 5th Avenue
New York, New York 10036
(1) For purposes of calculating each person's percentage, shares which may
be acquired within 60 days upon exercise of warrants or stock options have been
treated as outstanding. For the purposes of this calculation, there are
728,285 stock options and 505,000 warrants included.
(2) Includes 344,590 shares of Common Stock held by partnerships in which
Mr. Parks is a partner and 287,500 shares issuable upon the exercise of
outstanding warrants held by partnerships in which Mr. Parks is a partner.
Security Ownership of Management
The following table sets forth information with respect to the beneficial
ownership of the Company's common stock as of April 30, 1998 by all the
Company's directors and the Company's chief executive officer and the four other
most highly compensated executive officers of the Company at the end of 1996.
Except as otherwise noted, and subject to applicable community property and
similar laws, each person listed has sole voting power (if applicable) and
investment discretion with respect to the securities shown as beneficially
owned. An asterisk (*) denotes beneficial ownership of less than 1%.
Name and Address Amount and Nature of Percent of
Of Beneficial Owner Beneficial Ownership(1) Class(1)
Randolph D. Blim (2) 61,263 *
Emory M. Cohen (3) 236,176 2.82%
James R. Parks (4) 778,903 9.32%
Leon D. Silverman (5) 116,901 1.40%
Cornelius McCarthy (6) 30,000 *
Robert McClain (7) 53,900 *
Ronald Zimmerman (8) 30,000 *
All Directors and Officers as a Group 1,307,143 15.63%
(7 persons) (9)
(1) For the purposes of calculating each person's percentage and that of all
officers and directors as a group, shares which may be acquired within 60 days
upon the exercise of warrants, stock options have been treated as outstanding.
For the purposes of this calculation, there are 7,128,172 shares and 505,000
warrants included.
(2) Includes 50,403 shares issuable upon exercise of stock options
(3) Includes 90,525 shares issuable upon exercise of stock options
(4) Includes 344,590 shares of Common Stock held by partnerships in which Mr.
Parks is a partner and 287,500 shares issuable upon the exercise of outstanding
warrants held by partnerships in which Mr. Parks is a partner.
(5) Includes 60,041 shares issuable upon exercise of stock options
(6) Includes 30,000 shares issuable upon exercise of stock options
(7) Includes 53,900 shares issuable upon exercise of stock options
(8) Includes 30,000 shares issuable upon exercise of stock options
(9) Includes 338,369 shares issuable on exercise of stock options and 287,500
shares issuable upon exercise of warrants
CERTAIN TRANSACTIONS
James R. Parks, Chairman of the Board and Chief Executive Officer of the
Company, is a member of Parks, Palmer, Turner & Yemenidjian (PPTY), an
accounting firm, which provides tax accounting and management consulting
services to the Company. PPTY's billings for the year ended December 31, 1997
were approximately $46,000.
In July 1997, the Company issued $1,000,000 of short-term Installment
(Fixed Rate) Line of Credit Notes, Series 1997 to 35 Lake Avenue, a California
limited partnership. James R. Parks, the Company's, Chief Executive Officer, is
a partner in 35 Lake Avenue. The principal balance of the Notes bears interest
at the rate of fourteen percent (14%) per annum. The accrued interest on the
outstanding principal was payable on September 30, 1997, December 31, 1997,
January 30, 1998, February 28, 1998 and March 30, 1998. The outstanding
principal balance was to be paid in three equal installments on January 30,
1998, February 28, 1998 and March 31, 1998. The Company granted 35 Lake Avenue
warrants to purchase one (1) share of the Company's common stock at the exercise
price of $1.00 per share, for each $4.00 of original principal amount of debt
loaned. 250,000 warrants were issued. The warrants originally expired two years
from the date of grant. The Company's obligations under the Notes are secured by
a pledge of 2,424,488 shares of the Common Stock of Pacific Video Canada Ltd.
and a third deed of trust against the building where the Company provides film
processing and sound services. In January 1998 35 Lake Avenue agreed to amend
the terms of the short-term Installment Line of Credit Notes from March 30, 1998
until November 30, 1998. Under the amendment, principal payments reflect
approximately $400,000 due in the first quarter of 1998, $200,000 due at the end
of the third quarter of 1998 and remaining payments of $300,000 due throughout
the fourth quarter of 1998. In consideration for the extension of the principal
payments the expiration date of the warrants originally issued was extended for
two additional years. At March 31, 1998 the outstanding principal balance on the
notes was $500,000.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG Peat Marwick LLP has been the Company's independent auditors since the
Company's inception. Audit services performed by KPMG Peat Marwick LLP in the
fiscal year ended December 31, 1997, included the examination of, and reporting
on, the annual financial statements of the Company, periodic discussions with
management concerning accounting and reporting matters, and assistance and
consultation in connection with filings with the Securities and Exchange
Commission.
STOCKHOLDER PROPOSALS
Stockholders are advised that any stockholder proposal that is intended to
be presented at the annual meeting of stockholders to be held in 1999 must be
received by the Company at its principal executive offices no later than January
11, 1999.
PROXY SOLICITATION
The solicitation of proxies will be by mail. Certain officers, executives
and regular employees of the Company (without additional compensation) may
solicit proxies by telephone, telegraph, mail or personal interviews, and
arrangements will be made with banks, brokerage firms and others to forward
proxy materials to all holders of shares of Common Stock. The total cost of such
solicitation will be borne by the Company and will include reimbursement to
banks, brokerage firms and others for their reasonable expenses in forwarding
this Proxy Statement and the accompanying materials regarding the Annual Meeting
to stockholders.
OTHER MATTERS
The only business that the Board of Directors intends to act upon at the
Annual Meeting consists of the matters set forth in this Proxy Statement, and
the Board of Directors knows of no other matters that will be acted on by any
person or group. However, if any other matter properly comes before the Annual
Meeting, the Proxy holders will vote the proxies thereon in accordance with
their best judgment.
ANNUAL REPORT TO STOCKHOLDERS
The Company's 1997 10-K Report, which includes the Annual Report, is being
mailed to the stockholders along with this Proxy Statement. The Annual Report is
not to be considered part of the soliciting material.
By Order of the Board of Directors
LASER-PACIFIC MEDIA CORPORATION
Hollywood, California /S/ Robert McClain
April 30, 1997 Robert McClain, Secretary
