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SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
Check the appropriate box:
[x] Preliminary information statement
[_] Confidential, for use of the Commission only (as permitted by Rule 14c-
5(d)(2))
[_] Definitive information statement
COLLEGE TELEVISION NETWORK, INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14-c5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, $.005 Par Value, Preferred Stock, $.001 Par Value
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_] 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: N/A
(2) Form, Schedule or Registration Statement No.: Schedule 14C
(3) Filing Party: College Television Network, Inc.
(4) Date Filed: September ____, 1999
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COLLEGE TELEVISION NETWORK, INC.
5784 Lake Forrest Drive
Suite 275
Atlanta, Georgia 30328
September ___, 1999
INFORMATION STATEMENT
This Information Statement is being mailed to the stockholders of College
Television Network, Inc. (the "Company") commencing on or about September ____,
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1999, in connection with the previous approval of the corporate action referred
to below by the majority stockholder of the Company. Accordingly, all necessary
corporate approvals in connection with the matters referred to herein have been
obtained, and this Information Statement is furnished solely for the purpose of
informing stockholders, in the manner required under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), of the corporate action before it
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takes effect. The record date for determining stockholders entitled to receive
this Information Statement has been established as the close of business on
August 30, 1999. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO
SEND US A PROXY.
Action Taken
As of August 31, 1999, U-C Holdings, L.L.C., a Delaware limited liability
company (the "Majority Stockholder"), held 11,576,612 shares of common stock of
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the Company, par value $.005 per share (the "Common Stock") and 309,998 shares
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of Convertible Preferred Stock, par value $.001 per share (the "Convertible
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Preferred"), which is voting stock that votes on an as-converted basis based
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upon the number of shares of Common Stock the Convertible Preferred was
convertible into on the date of issuance, or 678,432 shares of voting stock. On
August 31, 1999, the Majority Stockholder, as holder of approximately 81.2% of
the total shares of capital stock of the Company entitled to vote on the matters
described herein, consented in writing without a meeting to the matters
described herein. As a result, the corporate action was approved by a majority
of the shares of Common Stock and Convertible Preferred as required by law and
no further votes will be needed. As of August 27, 1999, the Company had
approximately 14,411,755 shares of Common Stock outstanding and 309,998 shares
of Convertible Preferred outstanding. The majority stockholder consent with
respect to the matters described herein was executed on August 31, 1999 and will
take effect 20 days after the mailing of this Information Statement or on such
other date as may be specified by the board of directors of the Company
("Effective Date"). The corporate action was also approved by the Board of
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Directors of the Company, including all disinterested directors, on August 30,
1999.
The Majority Stockholder has approved and adopted a Plan of
Reclassification (the "Plan") (a copy of which is attached hereto as Exhibit I)
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whereby, on the Effective Date, the 309,998 shares of Convertible
Preferred currently owned by the Majority Stockholder shall be reclassified into
309,998 shares of Series A Convertible Preferred Stock of the Company, $.001 par
value per share ("Series A Convertible Preferred"), with such designations set
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forth in the Second Certificate of Designation, Powers, Preferences and Rights
of the Series A Convertible Preferred Stock of the Company ("Second Certificate
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of Designation"), filed with the Corporations Division of the State of Delaware
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on August 31, 1999.
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Plan of Reclassification
The Company's Amended and Restated Certificate of Incorporation ("Amended
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and Restated Certificate"), dated November 10, 1997, gives the Board of
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Directors of the Company authority to designate the rights and preferences of
the preferred stock of the Company. Pursuant to such authority, the Board of
Directors thereby designated the Convertible Preferred in a Certificate of
Designation, Powers, Preferences and Rights of the Convertible Preferred of the
Company filed with the Corporations Division of the State of Delaware on July
22, 1999 (the "Original Certificate of Designation").
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The Second Certificate of Designation, which has been approved by the
Company's Board of Directors, provides that (i) the number of shares of
Convertible Preferred subject to the Original Certificate of Designation be
decreased from 2,000,000 shares to 309,998 shares (this was also approved by the
Majority Stockholder); (ii) the 1,690,002 shares of authorized but unissued
Convertible Preferred resume the status which they had prior to the Original
Certificate of Designation and, thereafter, be preferred stock subject to the
FOURTH paragraph of the Amended and Restated Certificate; and (iii) the Company
cancelled any previous rights, preferences or designations for the authorized
but unissued 1,690,002 shares of preferred stock and designated the 1,690,002
shares as Series A Convertible Preferred having those powers, preferences,
optional or other special rights and qualifications, limitations or restrictions
as therein listed. As a part of this transaction, the Company's Board of
Directors and the Majority Stockholder approved the Plan, which provides that on
the Effective Date each share of the issued and outstanding Convertible
Preferred of the Company shall automatically be reclassified into and become one
share of Series A Convertible Preferred. The only corporate action which
requires shareholder approval is the adoption of the Plan.
The Company has taken all action required under Delaware law to approve the
Plan; however, since stockholder approval of the Plan was obtained by written
consent rather than at a stockholders' meeting, the Exchange Act will not permit
the Plan to become effective until the expiration of 20 calendar days from the
date this Information Statement was mailed to the stockholders of the Company.
The Plan will become effective on the later of the Effective Date or the filing
of the Plan with the Secretary of State of Delaware in accordance with the
requirements of the Delaware General Corporation Law, which action has already
been approved by the Board of Directors of the Company. Upon the effectiveness
of the Plan, there will be no shares of Convertible Preferred issued and
outstanding and the Company shall thereafter redesignate all shares of
Convertible Preferred into Series A Convertible Preferred, which action has
already been approved by the Board of Directors of the Company.
The terms of the Convertible Preferred and the Series A Convertible
Preferred are substantially similar with regards to the dividend rights,
liquidation preferences, redemption rights and dilution protection. The
Convertible Preferred is voting stock which votes on an as-converted basis with
the Common Stock based on the number of shares of Common Stock the Convertible
Preferred is convertible into as of the date of issuance. On August 31, 1999,
1,000,000 shares of Series A Convertible Preferred were issued to the Majority
Stockholder as non-voting stock that shall automatically become voting stock on
the same terms as the Convertible Preferred upon the filing of a new Schedule
14C Information Statement relating to the ratification and approval of the
issuance of such Series A Convertible Preferred. The Convertible Preferred has
liquidation preferences superior to those of the Series A Convertible Preferred,
however, all preferred stock has dividend and liquidation preferences superior
to all other capital stock of the Company. Another material difference between
the Convertible Preferred and the Series A Convertible Preferred is the
conversion price. The Convertible Preferred has an initial Conversion Price of
$6.854, which was the 30-day average market price of the Common Stock ("Average
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Market Price") on the date of issuance, whereas the Series A Convertible
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Preferred has an initial Conversion Price of $4.50, which was a 34.9% discount
from the Average Market Price on the date of issuance. Additionally, the terms
of the Convertible Preferred allow for a reset of the Conversion Price to the
Average Market Price as of the end of a fiscal quarter if,
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during the first three years after the issuance date, at the end of any quarter,
the Average Market Price is lower than the Conversion Price, however, such
Conversion Price cannot be reset below $2.75. The Series A Convertible Preferred
does not allow for a reset of the initial $4.50 Conversion Price, other than
through standard anti-dilution provisions. The elimination of the reset
provision may be beneficial to the owners of Common Stock in that the downward
movement of the Common Stock market price shall not result in the preferred
stockholders being able to convert their shares into additional shares of Common
Stock.
The modification and reclassification of the Convertible Preferred into
shares of Series A Convertible Preferred was effectuated in order to eliminate
the reset provision of the Convertible Preferred, which could have adversely
affected the common stockholders, and to have only one type of preferred stock
outstanding.
No Dissenters' Rights
The corporate action described in this Information Statement will not
afford to stockholders the opportunity to dissent from the actions described
herein or to receive an agreed or judicially appraised value for their shares.
Interest Of Certain Persons in the Actions Described Herein
The directors and executive officers of the Company may be deemed to have a
substantial interest in the approval of the Plan because the actions effectuated
by that document change the relative rights and preferences of the preferred
stock held by the Majority Stockholder and the persons serving as partners in
Holdings include a number of the directors and executive officers of the
Company. The Company obtained a fairness opinion from Texada Capital Corporation
in connection with the Plan.
Stockholder Approval Previously Obtained
The Company has approximately 14,411,755 issued and outstanding shares of
Common Stock as of August 27, 1999, each of which is entitled to one vote on any
matter brought to a vote of the Company's stockholders. The Majority Stockholder
owns 11,576,612 shares of Common Stock and 309,998 shares of Convertible
Preferred which is voting stock that votes on an as-converted basis based upon
the number of shares of Common Stock the Convertible Preferred was convertible
into on the date of issuance, or 678,432 shares of voting stock. The Majority
Stockholder's capital stock ownership represents 81.2% of all issued and
outstanding shares of the Company's voting stock. By written consent in lieu of
a meeting, dated August 31, 1999, the Majority Stockholder approved the adoption
and implementation of the decrease in the authorized Convertible Preferred and
the Plan. Such action by written consent is sufficient to satisfy the
requirements of the Delaware General Corporation Law that a reduction in the
number of authorized shares in a class of stock or a reclassification of a class
of stock be approved by a majority of the stockholders. Accordingly, the
stockholders will not be asked to take further action on this corporate action
at any future meeting. However, since stockholder approval was obtained by
written consent rather than at a stockholders' meeting, the Exchange Act will
not permit the action to become effective until the expiration of 20 calendar
days from the date hereof, which is the date this Information Statement is being
mailed to stockholders. Upon the expiration of such 20-day period, the actions
will become effective automatically.
The Company believes that this corporate action will not have any adverse
effect on its business and operations, and expects to continue such business and
operations as they are currently being conducted.
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Material Incorporated By Reference
The Form 8-K filed by the Company on August 3, 1999, in connection with (a)
the acquisition of Armed Forces Communications, Inc., (b) the issuance of the
Convertible Preferred, and (c) the $12,000,000 revolving loan made to the
Company by LaSalle Bank National Association is incorporated herein by reference
and a copy of such Form 8-K is being mailed to the stockholders with this
Information Statement. The Form 8-K to be filed by the Company on September
____, 1999, in connection with the issuance of the Series A Convertible
Preferred and the acquisition of Armed Forces Communications, Inc. is
incorporated herein by reference and a copy of such Form 8-K is being mailed to
the stockholders with this Information Statement.
Signature
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto authorized.
COLLEGE TELEVISION NETWORK, INC.
September 10, 1999
By: /s/ Jason Elkin
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Jason Elkin, Chief Executive Officer
and Chairman of the Board
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<PAGE>
EXHIBIT I
PLAN OF RECLASSIFICATION
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THIS PLAN OF RECLASSIFICATION (this "Plan") dated as of August 31,
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1999 is hereby adopted by College Television Network, Inc., a Delaware
corporation (the "Company").
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WHEREAS, the Company has 309,998 shares of convertible preferred
stock, par value $.001 per share (the "Convertible Preferred") issued and
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outstanding as of the date hereof;
WHEREAS, the Company has designated a new class of convertible
preferred stock, par value $.001 per share, designated as Series A Convertible
Preferred Stock (the "Series A Convertible Preferred");
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WHEREAS, the Company's Board of Directors and the holders of a
majority of the outstanding shares of capital stock of the Company have approved
the reclassification of the issued and outstanding 309,998 shares of Convertible
Preferred into 309,998 shares of Series A Convertible Preferred, in accordance
with the terms and conditions of this Plan; and
WHEREAS, U-C Holdings, L.L.C., a Delaware limited liability company
("Holdings"), as the sole holder of Convertible Preferred, has consented to this
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Plan.
NOW, THEREFORE, BE IT RESOLVED, that the Company does hereby adopt the
following Plan of Reclassification:
1. Effective automatically and immediately on the 20th day after the
mailing of a Schedule 14C Information Statement to the shareholders of the
Company in connection with this Plan, each outstanding share of Convertible
Preferred shall automatically, and without any further action on the part
of the Company or Holdings (other than the filing of the Plan with the
Secretary of State of Delaware, which the Company shall do immediately
after such 20 day period), pursuant to the terms of this Plan, be
reclassified into and become one share of Series A Convertible Preferred.
Each certificate representing shares of Convertible Preferred shall
automatically be deemed to be a certificate for Series A Convertible
Preferred; however upon delivery of the old Convertible Preferred stock
certificates, Holdings may receive a new stock certificate for the Series A
Convertible Preferred. This reclassification shall take effect regardless
of and without giving effect to any reduction in the conversion price of
the Convertible Preferred pursuant to any provision of the Certificate of
Designation for the Convertible Preferred.
2. The Company does hereby acknowledge that upon the effectiveness of
this Plan and the filing of this Plan with the office of the Secretary of
State of the state of Delaware, there will be no shares of Convertible
Preferred issued and outstanding and the Company will redesignate all
shares of Convertible Preferred into Series A Convertible Preferred Stock
pursuant to the Amendment to Certificate of Designation of Powers,
Preferences and Rights of Preferred Stock substantially in the form of
Exhibit A attached hereto.
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[signature on following page]
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IN WITNESS WHEREOF, College Television Network, Inc., has caused this
Plan of Reclassification to be executed by its duly authorized representative as
of August 31, 1999.
/s/ Martin Grant
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Martin Grant
President of College Television Network, Inc.
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Exhibit "A"
THIRD CERTIFICATE OF DESIGNATION,
POWERS, PREFERENCES AND RIGHTS OF THE
PREFERRED STOCK
OF
COLLEGE TELEVISION NETWORK, INC.
_________________________________________________________________
Pursuant to the provisions of Section 151(g)
of the General Corporation Law of
the State of Delaware
_________________________________________________________________
College Television Network, Inc. (the "Corporation"), a corporation
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organized and validly existing under the General Corporation Law of the State of
Delaware, filed its original Certificate of Incorporation with the Corporations
Division on August 17, 1989. Under the provisions of and subject to the
requirements of Section 151(g) of the General Corporation Law of the State of
Delaware, the undersigned, desiring to set the designation, powers, preferences
and rights of the authorized but unissued Convertible Preferred Stock of the
Corporation, which was originally designated pursuant to a Certificate of
Designation, Powers, Preferences and Rights of Preferred Stock filed July 22,
1999 (the "Original Certificate of Designations"), does hereby certify that the
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following resolutions were duly adopted by the Board of Directors of the
Corporation at a special meeting held on August 30, 1999 and approved by a
unanimous vote of the holders of the issued and outstanding Convertible
Preferred Stock:
WHEREAS, the Amended and Restated Certificate of Incorporation, dated
November 10, 1997 ("Amended Certificate"), authorizes a class of stock
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designated as preferred stock (the "Preferred Stock"), comprising 2,000,000
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shares, par value $0.001 per share, provides that such Preferred Stock may be
issued from time to time in one or more series, and vests authority in the Board
of Directors of the Corporation, within the limitations and restrictions stated
in the FOURTH paragraph of the Amended Certificate, to fix or alter the voting
powers, designation, preferences and relative participating, optional or other
special rights, rights and terms of redemption, the redemption price or prices
and the liquidation preferences of any series of Preferred Stock within the
limitations set forth in the Delaware General Corporation Law; and
WHEREAS, the Original Certificate of Designation designated 2,000,000
shares of the authorized Preferred Stock as Convertible Preferred Stock (the
"Convertible Preferred") and, as of August 30, 1999, there were 309,998 issued
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and outstanding shares of Convertible Preferred, and 1,690,002 shares of
authorized and unissued Convertible Preferred; and
WHEREAS, the Board of Directors by resolutions dated August 30, 1999, in
accordance with Section 151(g) of the General Corporation Law of the State of
Delaware reduced the number of authorized shares of Convertible Preferred by
1,690,002, to 309,998; and
WHEREAS, by unanimous written consent, dated as of August 30, 1999, the
holders of all of the issued and outstanding shares of Convertible Preferred
approved the decrease in the designated authorized shares of Convertible
Preferred; and
WHEREAS, by the action of the Board of Directors to decrease the number of
shares of Preferred Stock subject to the Original Certificate of Designation,
such authorized but unissued shares of Convertible
<PAGE>
Preferred resumed the status which they had prior to the Original Certificate of
Designation, i.e. that of Preferred Stock subject to the FOURTH paragraph of the
Amended Certificate; and
WHEREAS, the Corporation, by resolution of the Board of Directors of the
Corporation, and pursuant to the Second Certificate of Designation, Powers,
Preferences and Rights of the Series A Convertible Preferred Stock filed with
the Corporations Division on August 31, 1999 (the "Second Certificate of
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Designation"), cancelled all previous rights, preferences or designations for
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the authorized but unissued Convertible Preferred which were set forth in the
Original Certificate of Designation and designated 1,690,002 shares of the
authorized but unissued Preferred Stock as Series A Convertible Preferred Stock
(the "Series A Convertible Preferred") pursuant to the Second Certificate of
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Designation and fixed the powers, preferences and relative participating rights,
qualifications, limitations or restrictions of the Series A Convertible
Preferred; and
WHEREAS, pursuant to a Plan of Reclassification adopted by the Board of
Directors and by a majority of the shareholders of the Corporation and filed
with the Corporations Division on ________________, 1999 (the "Plan"), all of
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the outstanding Convertible Preferred were reclassified into Series A
Convertible Preferred on __________, 1999, on a one for one basis; and
WHEREAS, as of the date hereof, there are no issued and outstanding shares
of Convertible Preferred; and
WHEREAS, the Board of Directors of the Corporation has determined it to be
in the best interests of the Corporation to redesignate the authorized, but
unissued Convertible Preferred into Series A Convertible Preferred and to have
the same voting powers, designations, preferences and rights, and the
qualifications, limitations and restrictions thereof, so that all shares of
Preferred Stock of the Corporation have the same voting rights, designations,
preferences, rights, qualifications, limitations and restrictions as provided
herein.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation, does hereby cancel
any previous rights, preferences or designations for the 309,998 shares of
authorized, but unissued Convertible Preferred, and does hereby redesignate such
309,998 shares of Preferred Stock as Series A Convertible Preferred, with the
powers, preferences and relative participating, optional or other special
rights, qualifications, limitations or restrictions of Series A Preferred Stock,
as set forth in the Second Certificate of Designation.
2
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IN WITNESS WHEREOF, College Television Network, Inc., has caused this Third
Certificate to be executed by its duly authorized representative as of
____________________, 1999.
COLLEGE TELEVISION NETWORK, INC.,
a Delaware corporation
By:
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Its:
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