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:
[ ] Preliminary proxy statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
UC TELEVISION NETWORK CORP.
---------------------------
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] 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>
UC TELEVISION NETWORK CORP.
645 Fifth Avenue, East Wing
New York, New York 10022
February 28, 1997
To Our Stockholders:
You are cordially invited to attend the 1997 Annual Meeting of
Stockholders of UC Television Network Corp. (the "Company"), which will be held
at the Williams Club, 24 East 39th Street, New York, New York 10016, on
Tuesday, April 8, 1997, at 10:00 A.M., New York City Time.
The Notice of Annual Meeting and Proxy Statement covering the formal
business to be conducted at the Annual Meeting follow this letter.
We hope you will attend the Annual Meeting in person. Whether or not
you plan to attend, please complete, sign, date and return the enclosed proxy
promptly in the accompanying reply envelope to assure that your shares are
represented at the meeting.
Sincerely yours,
/s/ PETER KAUFF
---------------------------
PETER KAUFF
Chairman of the Board
and Chief Executive Officer
<PAGE>
UC TELEVISION NETWORK CORP.
645 FIFTH AVENUE, EAST WING
NEW YORK, NEW YORK 10022
(212) 888-0617
------------------------------------
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
APRIL 8, 1997
------------------------------------
The Annual Meeting of Stockholders of UC Television Network Corp. (the
"Company") will be held at the Williams Club, 24 East 39th Street, New York, New
York 10016, at 10:00 A.M., New York City Time, on Tuesday, April 8, 1997 for the
following purposes:
1. to elect four directors, each to serve until the next annual
meeting of stockholders and until their respective successors have
been duly elected and qualified;
2. to ratify the appointment of Richard A. Eisner & Company as
the Company's independent auditors for the Company's fiscal year
ending October 31, 1997; and
3. to transact such other business as may be properly brought
before the meeting and any adjournment or postponement thereof.
The Board of Directors unanimously recommends that you vote FOR the
election of all four nominees as Directors and FOR the approval of the
appointment of the independent auditors.
Stockholders of record at the close of business on February 27, 1997,
are entitled to notice of, and to vote at, the Annual Meeting and any
adjournment or postponement thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING IN PERSON, PLEASE
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE REPLY ENVELOPE
PROVIDED WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. STOCKHOLDERS
ATTENDING THE ANNUAL MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE RETURNED A
PROXY. BY PROMPTLY RETURNING YOUR PROXY, YOU WILL GREATLY ASSIST US IN PREPARING
FOR THE ANNUAL MEETING.
By Order of the Board of Directors,
/s/ PETER KAUFF
------------------------------------
PETER KAUFF
Chairman of the Board
and Chief Executive Officer
New York, New York
February 28, 1997
<PAGE>
UC TELEVISION NETWORK CORP.
PROXY STATEMENT FOR
1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 8, 1997
This Proxy Statement and the enclosed form of proxy are being
furnished, commencing on or about February 28, 1997, in connection with the
solicitation of proxies in the enclosed form by the Board of Directors of UC
Television Network Corp., a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders ("Stockholders") of the Company (the "Annual
Meeting") to be held at the Williams Club, 24 East 39th Street, New York, New
York 10016, on Tuesday, April 8, 1997, and at any adjournment or postponement
thereof, for the purposes set forth in the foregoing Notice of Annual Meeting of
Stockholders.
The annual report of the Company, containing financial statements of
the Company as of October 31, 1996, and for the year then ended, has been
delivered or is included with this proxy statement. The principal executive
offices of the Company are located at 645 Fifth Avenue, East Wing, New York, New
York 10022.
A list of the Stockholders entitled to vote at the Annual Meeting will
be available for examination by Stockholders during ordinary business hours for
a period of ten days prior to the Annual Meeting at the offices of the Company,
645 Fifth Avenue, East Wing, New York, New York 10022. A Stockholder list will
also be available for examination at the Annual Meeting.
If you are unable to attend the Annual Meeting, you may vote by proxy
on any matter to come before that meeting. The enclosed proxy is being solicited
by the Board of Directors. Any proxy given pursuant to such solicitation and
received in time for the Annual Meeting will be voted as specified in such
proxy. If no instructions are given, proxies will be voted (i) FOR the election
of the nominees named below under the caption "Election of Directors," (ii) FOR
the ratification of the appointment of Richard A. Eisner & Company ("Eisner") as
independent auditors for the Company's fiscal year ending October 31, 1997, and
(iii) in the discretion of the proxies named on the proxy card with respect to
any other matters properly brought before the Annual Meeting. Attendance in
person at the Annual Meeting will not of itself revoke a proxy; however, any
Stockholder who does attend the Annual Meeting may revoke a proxy orally and
vote in person. Proxies may be revoked at any time before they are voted by
submitting a properly executed proxy with a later date or by sending a written
notice of revocation to the Secretary of the Company at the Company's principal
executive offices.
Following the original mailing of proxy solicitation material,
executive and other employees of the Company and professional proxy solicitors,
may solicit proxies by mail, telephone, telegraph and personal interview.
Arrangements may also be made with brokerage houses and other custodians,
nominees and fiduciaries who are record holders of the Company's common stock,
par value $.001 per share (the "Common Stock"), to forward proxy solicitation
material to the beneficial owners of such stock, and the Company may reimburse
such record holders for their reasonable expenses incurred in such forwarding.
The cost of soliciting proxies in the enclosed form will be borne by the
Company.
The holders of a majority of the outstanding shares entitled to vote,
present in person or represented by proxy, will constitute a quorum for the
transaction of business. Shares represented by proxies that are marked "abstain"
will be counted as shares present for purposes of determining the presence of a
quorum on all matters. Brokers holding shares for beneficial owners in "street
name" must vote those shares according to specific instructions they receive
from the owners. If instructions are not received, brokers may vote the shares,
in their discretion, depending on the type of proposals involved. "Broker
non-votes" result when brokers are precluded from exercising their discretion on
certain types of proposals. However, brokers have discretionary authority to
vote on the "routine" matters being submitted hereby to the Stockholders. Absent
specific instructions from the beneficial owners in the case of "non-routine"
matters, the brokers may not vote the shares. All matters being proposed at the
Annual Meeting are "routine" matters. Shares that are voted by brokers on some
but not all of
<PAGE>
the matters will be treated as shares present for purposes of determining the
presence of a quorum on all matters, but will not be treated as shares entitled
to vote at the Annual Meeting on those matters as to which authority to vote is
withheld by the owner.
The election of each nominee for Director requires a plurality of votes
of the shares present at the Annual Meeting (whether in person or by proxy) and
entitled to vote thereon. Accordingly, abstentions and Broker non-votes will not
affect the outcome of the election. The affirmative vote of a majority of the
shares present at the Annual Meeting (whether in person or by proxy) and
entitled to vote thereon is required for the approval of the appointment of the
independent auditors. On this matter the abstentions will have the same effect
as a negative vote. Because Broker non-votes will not be treated as shares that
are present and entitled to vote with respect to a specific proposal, a Broker
non-vote will have no effect on the outcome.
The Company has appointed an inspector to act at the Annual Meeting who
shall: (1) ascertain the number of shares outstanding and the voting powers of
each; (2) determine the shares represented at the Annual Meeting and the
validity of the proxies and ballots; (3) count all votes and ballots; (4)
determine and retain for a reasonable period a record of the disposition of any
challenges made to any determinations by such inspector; and (5) certify his
determination of the number of shares represented at the Annual Meeting and his
count of all votes and ballots.
Only Stockholders of record at the close of business on February 27,
1997 (the "Record Date") are entitled to notice of, and to vote at, the Annual
Meeting, and any adjournment or postponement thereof. As of the close of
business on February 27, 1997, there were 10,984,857 shares of Common Stock
outstanding. Each share of Common Stock entitles the record holder thereof to
one vote on all matters properly brought before the Annual Meeting and any
adjournment or postponement thereof, with no cumulative voting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of February 24, 1997, the number of
shares of Common Stock (and the percentage of Common Stock) beneficially owned
by (i) each person known (based solely on Schedules 13D or 13G filed) to the
Company to be the beneficial owner of more than 5% of the Common Stock, (ii)
each director and nominee of the Company, (iii) each of the Named Executives (as
defined under "Executive Compensation--Summary Compensation Table"), and (iv)
all directors, nominees and executive officers of the Company as a group (based
upon information furnished by such persons). Under the rules of the Securities
and Exchange Commission (the "Commission"), a person is deemed to be a
beneficial owner of a security if such person has or shares the power to vote or
direct the voting of such security or the power to dispose of or to direct the
disposition of such security. In general, a person is also deemed to be a
beneficial owner of any securities of which that person has the right to acquire
beneficial ownership within 60 days. Accordingly, more than one person may be
deemed to be a beneficial owner of the same securities.
-2-
<PAGE>
<TABLE>
<CAPTION>
Number of Shares PERCENTAGE (%) OF
Name and Address(1) Beneficially Owned COMMON STOCK(2)
- ------------------- ------------------ ---------------
<S> <C> <C>
Peter Kauff(3) 218,708 1.96%
Tom Gatti 25,000 *
Edward F. McLaughlin 2,500 *
Stephen Roberts(4)(5) 16,604 *
Edward Weinberger(6) 134,256 1.22%
All directors and executive officers 426,568
as a group (seven persons)(3)(4)(5)(6)(7) 3.80%
</TABLE>
- -------------------
* Indicates beneficial ownership of less than one (1%) percent.
(1) The business address of each person, for purposes hereof, is c/o UC
Television Network Corp., 645 Fifth Avenue, East Wing, New York, New York
10022.
(2) For purposes of computing the percentage of outstanding shares of Common
Stock held by each person or group of persons named above, any security
which such person or persons have or have the right to acquire within 60
days is deemed to be outstanding but is not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person.
(3) Includes options covering 156,575 shares of Common Stock granted to Mr.
Kauff pursuant to the Company's 1990 Performance Equity Plan (the
"Performance Equity Plan") and 37,133 shares of Common Stock granted
pursuant to the 1996 Stock Incentive Plan (the "Stock Incentive Plan")
which are exercisable within 60 days of the date hereof.
(4) Includes 11,604 shares of Common Stock held by the Roberts Family Trust of
1991, of which Mr. Roberts is co-trustee.
(5) Includes options covering 5,000 shares of Common Stock granted pursuant to
the Company's Outside Directors' 1996 Stock Option Plan (the "Outside
Directors' Plan") which are exercisable within 60 days of the date hereof.
(6) Includes (a) 69,790 shares of Common Stock held by Archimedes Partnership,
a partnership of which Mr. Weinberger is the sole general partner and has
an 80% beneficial interest and (b) 64,466 shares of Common Stock held by
Video Partners, L.P., a partnership of which Mr. Weinberger is the sole
general partner and has a 75% beneficial interest.
(7) Includes options covering an aggregate of 27,000 shares of Common Stock
granted to certain other executive officers of the Company, pursuant to the
Company's Performance Equity Plan, which are exercisable within 60 days of
the date hereof.
Except as noted in the footnotes to the table above, the Company
believes that the beneficial holders listed above have sole voting and
investment power regarding the shares of Common Stock shown as beneficially
owned by them.
-3-
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"1934 Act"), requires the Company's directors and executive officers, and
persons who own more than ten (10%) percent of a registered class of the
Company's equity securities, to file with the Commission initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Reporting persons are required by Commission
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
To the Company's knowledge, based solely on review of the copies of
such reports furnished to the Company, the following persons failed to file, on
a timely basis, reports required by Section 16(a) of the 1934 Act, for the
number of transactions indicated, during the fiscal year ended October 31, 1996
("Fiscal 1996"):
Peter Kauff Form 5 3 Transactions
Stephen Roberts Form 5 1 Transaction
Richard Vogel Form 5 1 Transaction
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
It is proposed to elect a Board of four directors to hold office until
the next annual meeting of Stockholders and until their respective successors
are duly elected and qualified. All of the nominees set forth below are
currently members of the Board of Directors. Unless instructed otherwise, the
enclosed proxy will be voted FOR the election of the nominees named below.
Voting is not cumulative. While management has no reason to believe that the
nominees will not be available as candidates, should such a situation arise,
proxies may be voted for the election of such other persons as a director as the
holders of the proxies may, in their discretion, determine. The election of each
nominee for director requires a plurality of votes of the shares present at the
Annual Meeting (whether in person or by proxy) and entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
NOMINEES LISTED BELOW.
The names and ages, along with certain biographical information (based
solely on information supplied by them), of the directors of the Company and
nominees for election as directors of the Company are as follows:
PETER KAUFF (age 55) has been Chairman of the Board of Directors of the
Company since January 28, 1991 and Chief Executive Officer since February 1,
1994. Mr. Kauff was an executive officer with Entertainment Equities, an
entertainment and talent management company, from 1988 to 1993. From 1971 to
1988, Mr. Kauff was a co-founder and Co-Chairman of DIR Broadcasting, Inc.,
which was in the business of radio syndication and radio and television
production and was sold to Lorimar Pictures, Inc. in 1986, where he remained as
Co-Chairman until 1988, and as a consultant up to 1990.
STEPHEN ROBERTS (age 58) has been a director of the Company since
January 28, 1991. Mr. Roberts is the President of R&G Communications, a
diversified communications firm focusing on the entertainment industry and
related businesses which he founded in July 1989. Mr. Roberts is also, and has
been since August 1985, the President of The S. Roberts Co., which provides
consulting services to the entertainment industry. In addition, Mr. Roberts has
been the President of Sandair Nevada, Inc., a sales representative and
manufacturing company ("Sandair"), since June 1992. He presently serves as a
member of the Board of Directors of Rentrak Corp., a public company engaged in
the distribution of pre-recorded video cassettes. In addition, Mr. Roberts was
the recipient of the Pioneer Award from the International Tape Association, in
recognition of helping to create the international home video business. Mr.
Roberts is a member of the Academy of Motion Pictures Arts and Sciences, the
Academy of Television Arts and Sciences, and a former director of the Motion
Picture Association of America. Mr. Roberts is also a member of both the Audit
Committee and the Stock Option and Compensation Committee.
-4-
<PAGE>
EDWARD F. McLAUGHLIN (age 70) has been a director of the Company since
March 1996. Mr. McLaughlin is the Chairman and Chief Executive Officer of EFM
Media Management, Inc., which produces and distributes The Rush Limbaugh Show,
The Rush Limbaugh Morning Update and the Dr. Dean Edell Radio programs, and has
held such positions since its inception in July 1987. Mr. McLaughlin served as
President of ABC Radio Networks from 1972 to 1986. Mr. McLaughlin serves on the
Advisory Committee for the Museum of Television and Radio, and is a member of
the board of The Broadcasters Foundation. In 1995, Mr. McLaughlin was inducted
into the Radio Hall of Fame. Mr. McLaughlin is also a member of both the Audit
Committee and the Stock Option and Compensation Committee.
EDWARD WEINBERGER (age 55) has been a director of the Company since
November 1996. Mr. Weinberger is a Vice President and Director of Allen &
Company, Inc., a New York investment banking firm. Prior to joining Allen &
Company in 1977, Mr. Weinberger was Director of Acquisitions for DPF
Corporations and an Acquisitions Analyst for W.R. Grace and Company. Mr.
Weinberger has also been Chairman of the Board of PolyPharm Corporation, a
medication management and information system company, since 1992. Mr. Weinberger
holds an MBA from Wharton Graduate School, University of Pennsylvania.
No family relationship exists between any directors or executive
officers of the Company.
COMMITTEES
The Company's Board of Directors has an Audit Committee and a Stock
Option and Compensation Committee. Messrs. Roberts and McLaughlin serve on both
the Audit Committee and the Stock Option and Compensation Committee. The Board
of Directors intends to elect Mr. Weinberger to the Stock Option and
Compensation Committee upon his election to the Board of Directors. The Audit
Committee meets with the Company's independent auditors and principal financial
personnel to review the results of the annual audit. The Audit Committee also
reviews the scope of the annual audit and other services before being undertaken
by the Company's independent auditors, and reviews the adequacy and
effectiveness of the Company's internal accounting controls. The Stock Option
and Compensation Committee administers the Company's Performance Equity Plan and
the Company's Stock Incentive Plan and makes recommendations to the full Board
concerning compensation, including incentive arrangements, for the Company's
officers and employees.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
During Fiscal 1996, there were five meetings of the Board of Directors
of the Company, two meetings of the Stock Option and Compensation Committee and
one meeting of the Audit Committee. No director attended fewer than 75% of the
meetings of the Board of Directors or of any committee on which he served.
COMPENSATION OF DIRECTORS
Non-employee directors of the Company are reimbursed for reasonable
travel and lodging expenses incurred in attending meetings of the Board of
Directors and any committees on which they may serve. Directors do not presently
receive any fees for attendance or participation at Board or committee meetings.
The Company also has the Outside Directors' Plan, which provides for the grant
of options to purchase shares of Common Stock to members of the Board of
Directors who are not employees of the Company ("Eligible Directors"). Upon the
initial election to the Board of a person who satisfies the definition of
Eligible Director, such person shall be granted an option to purchase 10,000
shares of Common Stock. As of each February 14, each person who is then an
Eligible Director and who has been an Eligible Director for at least six months
shall be granted an option to purchase an additional 10,000 shares of Common
Stock.
-5-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Stephen Roberts, an outside director of the Company, is also the
President and a 50% owner of Sandair, which is a sales representative for the
Company. During Fiscal 1996, in the ordinary course of business, the Company
paid sales commissions to Sandair in an aggregate amount of approximately
$96,000.
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
Name Age Title
---- --- -----
Peter Kauff 55 Chairman and Chief Executive Officer
Thomas Gatti 50 Executive Vice President
Alan Pearl 44 Chief Financial Officer, Treasurer
and Secretary
Richard Vogel 39 Chief Technical Officer and Vice President
of Product Development
See "Election of Directors" for biographical information relating to
Peter Kauff.
THOMAS GATTI joined the Company in July 1993 and was appointed
Executive Vice President in August 1993. Prior to joining the Company, Mr. Gatti
served since January 1992 as a Divisional Vice President for Katz
Communications, a national television/radio/cable representative firm. From July
1990 to January 1992, Mr. Gatti served as a director of national sales for
Westinghouse Broadcasting owned and operated radio stations.
ALAN PEARL joined the Company in September 1992 and was appointed Chief
Financial Officer and Treasurer of the Company in January 1993. He was also
appointed Secretary of the Company in July 1996. Prior to joining the Company,
Mr. Pearl served as the Corporate Controller of Emerson Radio Corp., a consumer
electronics product designer and marketer since 1981.
RICHARD VOGEL joined the Company in September 1992. He was appointed
Chief Technical Officer in September 1995, in addition to being Vice President
of Product Development, which position he has held since January 1993. Prior to
joining the Company, Mr. Vogel worked for New England Technology Group, a
systems development company, since 1983 and served as Director of Research and
Development there since January 1988.
The Company's officers are elected annually by, and serve at the
pleasure of, the Board of Directors, subject to the terms of any employment
agreements. Peter Kauff, Alan Pearl, Richard Vogel and Thomas Gatti have entered
into employment agreements with the Company. See "Executive
Compensation--Employment Arrangements." No family relationships exist between
any directors or executive officers of the Company.
-6-
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth compensation earned by or paid to the
Chief Executive Officer and the other most highly compensated executive officers
of the Company who earned over $100,000 (collectively, the "Named Executives")
for Fiscal 1996, the fiscal year ended October 31, 1995 and the fiscal year
ended October 31, 1994. The Company awarded or paid such compensation to such
persons for services rendered in all capacities during the applicable fiscal
years.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS(2)
------------------- ---------
SECURITIES
NAME AND FISCAL OTHER ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION(1) OPTIONS(#)
- ------------------ ---- --------- -------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Peter Kauff 1996 222,103 -- -- 500,000(3)
Chief Executive Officer and 1995 181,574 -- -- 125,000
Chairman of the Board 1994 158,743 -- -- --
Thomas Gatti 1996 169,250 -- -- 15,000
Executive Vice President 1995 165,623(4) -- -- --
1994 140,481(4) -- -- --
</TABLE>
- ----------------------------
(1) The Company has concluded that the aggregate amount of perquisites and
other personal benefits paid to each of the Named Executives did not exceed
the lesser of ten (10%) percent of such officer's annual salary and bonus
for each fiscal year indicated or $50,000.
(2) The Company has no long-term incentive plan.
(3) Excludes options covering 37,133 shares of Common Stock granted to Mr.
Kauff as of January 25, 1996, pursuant to the Stock Incentive Plan. Such
options replaced options covering 37,133 shares of Common Stock granted to
Mr. Kauff in 1991 pursuant to the Company's Performance Equity Plan which
were surrendered as of September 26, 1995.
(4) Does not include a $5,000 and $22,500 advance for fiscal 1995 and fiscal
1994, respectively, expected to be offset against future commissions.
-7-
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning stock option
grants made during Fiscal 1996 to the Named Executives. These grants are also
reflected in the Summary Compensation Table. The Company has not granted any
stock appreciation rights.
<TABLE>
<CAPTION>
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES IN EXERCISE
OPTIONS FISCAL YEAR PRICE EXPIRATION
NAME GRANTED (#)(1) 1996 ($/SHARE)(2) DATE
---- -------------- --------- ------------ --------
<S> <C> <C> <C> <C>
Peter Kauff......................... 500,000(3) 77.8% $1.31 9/12/01
Thomas Gatti........................ 15,000 2.3% $1.25 8/29/01
- ------------------
</TABLE>
(1) Grants become exercisable in equal installments on the first four
anniversaries of the date of grant. Vesting may be accelerated upon the
occurrence of certain events. See "--Employment Agreements" below.
(2) The exercise price of the options granted was equal to the fair market
value of the underlying stock on the date of grant.
(3) Excludes options covering 37,133 shares of Common Stock granted to Mr.
Kauff as of January 25, 1996, pursuant to the Stock Incentive Plan. Such
options replaced options covering 37,133 shares of Common Stock granted to
Mr. Kauff in 1991 pursuant to the Company's Performance Equity Plan which
were surrendered as of September 26, 1995.
FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning unexercised
options, including the aggregate dollar value of in-the-money options, held by
the Named Executives at the end of Fiscal 1996. The closing price of the Common
Stock underlying the options on October 31, 1996 (the last trading day of the
fiscal year) on The Nasdaq Stock Market's SmallCap Market ("Nasdaq") was $1.00.
No options were exercised by the Named Executives in Fiscal 1996.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)
------------------------- ----------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Peter Kauff............................ 156,575 630,883 $ 71,435 --
Thomas Gatti........................... -- 15,000 -- --
</TABLE>
REPRICING OF OPTIONS
As of September 26, 1995, Mr. Kauff surrendered options covering 37,133
shares of Common Stock which were granted in 1991 pursuant to the Performance
Equity Plan. The exercise of the options surrendered by Mr. Kauff was contingent
on the Common Stock reaching prices significantly higher than the market price
at the time of such surrender. New options covering 37,133 shares of Common
Stock were granted to Mr. Kauff, as of January 25, 1996, with exercise prices
equal to $1.44 per share (the fair market value per share on the date of grant),
pursuant to the Stock Incentive Plan. The old options held by Mr. Kauff were
designed to further
-8-
<PAGE>
compensate and provide for an incentive for such employee, and the Compensation
Committee determined that the significant decline in the market price of the
Common Stock since the date of grant of the old options frustrated these
purposes. The Compensation Committee believes that by awarding Mr. Kauff new
options with exercise prices at $1.44 per share (the fair market value per share
on the date of grant) he will be fairly compensated for his efforts and further
motivated to achieve the Company's success. The Compensation Committee also
believes that exchanging "out-of-the-money" options is a cost-effective method
of retaining key employees and preserving the important motivating effect that
stock options have.
EMPLOYMENT ARRANGEMENTS
Messrs. Kauff, Pearl, Vogel and Gatti are employed by the Company
pursuant to written employment agreements.
Pursuant to Mr. Kauff's employment agreement, as amended, which runs
until December 31, 2000, Mr. Kauff is to receive an annual salary of $250,000.
Mr. Kauff is also entitled to an annual bonus equal to 5% of the Company's
"Pre-tax Income," but not to exceed $500,000 in any given year. For purposes of
such agreement, Pre-tax Income is defined as the Company's earnings prior to
giving effect to taxes and the payment of any bonus to Mr. Kauff or any other
employees. In the event that Mr. Kauff's employment is terminated without cause
or there is a "change in control" of the Company which results in an actual or
constructive termination of employment (as defined therein), he is to receive a
one-time payment equal to the sum of his base salary for the period from the
effective date of his termination to the end of his employment term; provided,
however, that such amount shall not exceed two years' base salary nor be less
than one years' base salary. In addition, in such an event, the vesting of all
options granted to Mr. Kauff would accelerate. For purposes of such agreement, a
change in control shall mean the individuals who currently constitute the
directors of the Company, or individuals elected by more than two-thirds of such
current directors to replace any of such current directors, no longer constitute
a majority of the directors of the Company. Mr. Kauff's employment agreement
also provides for the grant of options pursuant to the Stock Incentive Plan.
Mr. Vogel's employment agreement, as amended, which runs until
September 8, 1998, provides that Mr. Vogel is to receive an annual salary of
$102,500 for the 12-month period ending September 8, 1997, and $110,000 for the
12-month period ending September 8, 1998, plus cost of living increases. Mr.
Vogel is also entitled to a bonus of $7,500 for the 12-month period ending
September 8, 1997, and $15,000 for the 12-month period ending September 8, 1998;
provided that such bonus amounts are approved at such times by the Chairman. In
addition, Mr. Vogel has been granted options to purchase 10,000 and 37,500
shares of Common Stock, respectively, pursuant to the terms of the Company's
Performance Equity Plan and in accordance with, and subject to, the terms of two
stock option agreements between Mr. Vogel and the Company, at per share exercise
prices of $2.88 and $1.36, respectively. In the event that Mr. Vogel's
employment is terminated without cause, he is to receive his base salary for the
lesser of 12 months from the date of termination or the then remaining term of
his employment agreement.
Pursuant to Mr. Pearl's employment agreement, as amended, which runs
until September 30, 1999, Mr. Pearl is to receive an annual salary of $105,000
for the 12-month period ending September 30, 1997, $112,500 for the 12-month
period ending September 30, 1998 and $120,000 for the 12-month period ending
September 30, 1999, plus cost of living increases. In addition to Mr. Pearl's
base salary under the agreement, Mr. Pearl was granted options to purchase
24,000 and 36,000 shares of Common Stock, pursuant to the terms of the Company's
Performance Equity Plan and Stock Incentive Plan, respectively, and in
accordance with, and subject to, the terms of two stock option agreements
between Mr. Pearl and the Company, at per share exercise prices of $1.36 and
$1.3125, respectively. In the event that Mr. Pearl's employment is terminated
without cause, he is to receive his base salary for the lesser of 12 months from
the date of termination or the then remaining term of this employment agreement.
Pursuant to Mr. Gatti's employment agreement, which runs until December
31, 1997, Mr. Gatti is to receive an annual salary of $170,000 and a 3.0%
commission on net advertising sales of the Company in excess of $1,250,000 per
year of employment. In addition to Mr. Gatti's base salary and bonus, he
received options to purchase 15,000 shares of Common Stock and, in the event net
advertising sales during a calendar year exceed
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<PAGE>
$2,250,000 he shall receive non-qualified stock options to purchase 7,500 shares
of Common Stock (and an additional option for 7,500 shares of Common Stock for
each additional one million dollars of annual net sales). In the event that Mr.
Gatti's employment is terminated without cause, he is to receive his base salary
for the lesser of 12 months from the date of termination or the then remaining
term of this employment agreement, plus commissions on pro-rated net advertising
sales earned.
The Company currently maintains a $1,000,000 term life insurance policy
on the life of Peter Kauff with benefits payable to the Company.
The Company offers basic health, major medical and life insurance to
the employees. No retirement, pension or similar program has been adopted by the
Company.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Restated Certificate of Incorporation includes certain
provisions permitted pursuant to the Delaware General Corporation Law (the
"GCL"), whereby officers and directors of the Company are to be indemnified
against certain liabilities. The Restated Certificate of Incorporation also
limits to the fullest extent permitted by the GCL a director's liability to the
Company or its Stockholders for monetary damages for breach of any fiduciary
duty as a director, except where a director (i) breaches his or her duty of
loyalty to the Company or its stockholders, (ii) fails to act in good faith or
engages in intentional misconduct or a knowing violation of the law, (iii)
authorizes payment of an unlawful dividend or stock repurchase or redemption or
(iv) obtains an improper personal benefit. This provision of the Restated
Certificate of Incorporation has no effect on any director's liability under
Federal securities laws or the availability of equitable remedies, such as
injunction or recession, for breach of fiduciary duty. The Company believes that
these provisions will facilitate the Company's ability to continue to attract
and retain qualified individuals to serve as directors and officers of the
Company.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Eisner as the Company's
independent auditors for the fiscal year ending October 31, 1997 and until their
successors are selected, and the Stockholders will be asked to ratify such
appointment. Ratification of the appointment requires the affirmative vote of a
majority of the shares of Common Stock present at the Annual Meeting (whether in
person or by proxy) and entitled to vote thereon.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF EISNER.
It is expected that a representative of Eisner will be present at the
Annual Meeting with the opportunity to make a statement if he desires to do so,
and will be available to respond to appropriate questions.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors is not
aware of any other matter that is to be presented to Stockholders for formal
action at the Annual Meeting. If, however, any other matter properly comes
before the meeting or any adjournment or postponement thereof, it is the
intention of the persons named in the enclosed form of proxy to vote such
proxies in accordance with their judgment on such matters.
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<PAGE>
STOCKHOLDER PROPOSALS
Any Stockholder proposal intended to be presented at the next annual
meeting of Stockholders must be received by the Company at its principal
executive offices, 645 Fifth Avenue, East Wing, New York, New York 10022, no
later than October 14, 1997, in order to be eligible for inclusion in the
Company's proxy statement and form of proxy to be used in connection with that
meeting.
OTHER INFORMATION
Although it has entered into no formal agreements to do so, the Company
will reimburse banks, brokerage houses and other custodians, nominees and
fiduciaries for their reasonable expenses in forwarding proxy-soliciting
materials to their principals. The cost of soliciting proxies on behalf of the
Board of Directors will be borne by the Company. Such proxies will be solicited
principally through the mail but, if deemed desirable, may also be solicited
personally or by telephone, telegraph, facsimile transmission or special letter
by directors, officers and regular employees of the Company without additional
compensation.
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE ANNUAL MEETING
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING. THE BOARD URGES YOU TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED POSTAGE-PAID
REPLY ENVELOPE. YOUR COOPERATION AS A STOCKHOLDER, REGARDLESS OF THE NUMBER OF
SHARES OF STOCK YOU OWN, WILL REDUCE THE EXPENSES INCIDENT TO A FOLLOW-UP
SOLICITATION OF PROXIES.
IF YOU HAVE ANY QUESTIONS ABOUT VOTING YOUR SHARES, PLEASE TELEPHONE
THE COMPANY AT (212) 888-0617.
Sincerely yours,
/s/ PETER KAUFF
---------------------------
Peter Kauff
Chairman of the Board
and Chief Executive Officer
New York, New York
February 28, 1997
<PAGE>
UC TELEVISION NETWORK CORP.
ANNUAL MEETING OF STOCKHOLDERS
------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter Kauff with full power of
substitution, to vote all shares of UC TELEVISION NETWORK CORP. (the "Company"),
which the undersigned is entitled to vote at the Company's Annual Meeting to be
held at the Williams Club, 24 East 39th Street, New York, New York 10016, on the
8th day of April, 1997, at 10:00 a.m. New York time, and at any adjournment
thereof, hereby ratifying all that said proxies or their substitutes may do by
virtue hereof, and the undersigned authorizes and instructs said proxies to vote
as follows:
2. ELECTION OF DIRECTORS: To elect the nominees listed below for Director for
a term of one year;
FOR ALL NOMINEES LISTED BELOW
(except as marked to the contrary below) [ ]
WITHHOLD AUTHORITY
to vote for all nominees listed below [ ]
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Peter Kauff, Stephen Roberts, Edward F. McLaughlin and Edward Weinberger.
2. APPROVAL OF INDEPENDENT AUDITORS: To ratify and approve the appointment of
Richard A. Eisner & Company as independent auditors of the Company for the
fiscal year ending October 31, 1997;
FOR [ ] AGAINST [ ] ABSTAIN [ ]
and in their discretion, upon any other matters that may properly come before
the meeting or any adjournments thereof.
(Continued and to be dated and signed on the other side.)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDERS. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR ALL NOMINEES LISTED UNDER "ELECTION OF DIRECTORS" AND FOR "APPROVAL
OF INDEPENDENT AUDITORS."
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
Receipt of the Notice of Annual Meeting and of the Proxy Statement and
Annual Report of the Company accompanying the same is hereby acknowledged.
Dated: ____________________________________, 1997
-------------------------------------------------
(Signature of Stockholder)
-------------------------------------------------
(Signature of Stockholder)
Your signature should appear the same as your name
appears herein. If signing as attorney, executor,
administrator, trustee or guardian, please
indicate the capacity in which signing. When
signing as joint tenants, all parties to the joint
tenancy must sign. When the proxy is given by a
corporation, it should be signed by an authorized
officer.
