<PAGE>
SCHEDULE 14A
(Rule 14a-10)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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 Section 240.14a-11(c) or Section 240.14a-12
COLLEGE TELEVISION NETWORK, INC
- --------------------------------------------------------------------------------
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(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:
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(4) Date Filed:
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<PAGE>
College Television Network, Inc.
5784 Lake Forrest Drive
Suite 275
Atlanta, Georgia 30328
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on May 11, 1999
To our Stockholders:
The Annual Meeting of Stockholders of College Television Network, Inc., a
Delaware corporation (the "Company"), will be held on Tuesday, May 11, 1999 at
10:00 a.m. Atlanta time, at The Standard Club, 6230 Abbots Bridge Road, Duluth,
Georgia 30155, to consider and act upon the following matters:
1. To elect nine (9) directors to serve until the 2000 Annual Meeting of
Stockholders and until their successors are elected and qualified;
2. To adopt an amendment to the Company's Outside Directors' 1996 Stock
Option Plan;
3. To ratify and approve the selection by the Board of Directors of
PricewaterhouseCoopers LLP as the Company's independent accountants for the
current year; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment of the Meeting.
Stockholders of record at the close of business on March 29, 1999 will be
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof.
All Stockholders are cordially invited to attend the Annual Meeting.
By Order of the Board of Directors
Patrick G. Doran
Chief Financial Officer, Treasurer
and Secretary
Atlanta, Georgia
April 9, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS
REQUIRED FOR MAILING IN THE UNITED STATES. IN THE EVENT YOU ARE ABLE TO ATTEND
THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
<PAGE>
College Television Network, Inc.
5784 Lake Forrest Drive
Suite 275
Atlanta, Georgia 30328
_____________________________
PROXY STATEMENT
_____________________________
April 9, 1999
INFORMATION CONCERNING SOLICITATION AND VOTING
This Proxy Statement and the enclosed proxy ("Proxy") are solicited by the
Board of Directors of College Television Network, Inc. ("CTN" or the "Company")
for use at the Annual Meeting of Stockholders to be held on Tuesday, May 11,
1999, at 10:00 a.m. Atlanta time, at The Standard Club, 6230 Abbots Bridge Road,
Duluth, Georgia 30155, and at any adjournment of that Meeting. All proxies will
be voted in accordance with the instructions contained therein, and if no choice
is specified, the proxies will be voted in favor of the proposals set forth in
the accompanying Notice of Meeting. Any Proxy may be revoked by a Stockholder
at any time before it is exercised by giving written notice to that effect to
the Secretary of the Company.
The Board of Directors has fixed March 29, 1999 as the record date for
determining Stockholders who are entitled to vote at the Annual Meeting. At the
close of business on March 29, 1999, there were outstanding and entitled to vote
14,231,232 shares of the $.005 par value per share common stock of the Company
(the "Common Stock"). Each share of Common Stock is entitled to one vote.
The Company's Annual Report to Stockholders for the year ended December 31,
1998 is being mailed to the Company's Stockholders with this Notice of Meeting
and Proxy Statement on or about April 9, 1999. The Company will, upon written
request of any Stockholder, furnish without charge a copy of its Annual Report
on Form 10-KSB for the year ended December 31, 1998, as filed with the
Securities and Exchange Commission, without exhibits. Exhibits will be provided
upon written request and payment of an appropriate processing fee. Please
address all such requests to the Company, Attention of Patrick G. Doran, Chief
Financial Officer, 5784 Lake Forrest Drive, Suite 275, Atlanta, Georgia 30328.
The affirmative vote of the holders of a majority of the aggregate voting
power represented by the shares of Common Stock, present or represented at the
Annual Meeting, is required for the election of directors and the ratification
of independent accountants. The affirmative vote of the holders of a majority
of the aggregate voting power represented by the shares of Common Stock is
required for the adoption of amendments to the Company's stock option plans.
Shares of Common Stock represented by executed proxies received by the
Company will be counted for purposes of establishing a quorum at the Annual
Meeting, regardless of how or whether such shares are voted on any specific
proposal. With respect to the required vote on any particular matter,
abstentions will be treated as shares present and represented, while votes
withheld by nominee recordholders who did not receive specific instructions from
the beneficial owners of such shares (so called "broker non-votes") will not be
treated as shares present or represented. Thus, for matters that require the
affirmative vote of the holders of a majority of the aggregate voting power
represented by the shares of Common Stock present or represented at the Annual
Meeting, abstentions will have the same effect as a vote against the proposal,
and broker non-votes will have no effect.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 29, 1999, the beneficial
ownership of the Company's outstanding Common Stock of (i) each person known by
the Company to own beneficially more than 5% of the Company's outstanding Common
Stock, (ii) each member of the Company's Board of Directors and each nominee to
serve on the Board of Directors, (iii) each executive officer named in the
Summary Compensation Table under the heading "Executive Compensation" below, and
(iv) all current directors and executive officers as a group:
<TABLE>
<CAPTION>
Name and Address/(1)/ of Number of Shares Percentage of
Beneficial Owner Beneficially Owned Common Stock Outstanding/(2)/
- ----------------------------------------- ------------------ ----------------------------
<S> <C> <C>
U-C Holdings, L.L.C./(3)//(4)/ 12,501,444 82.5%
Jason Elkin/(5)/ -- --
Joseph D. Gersh/(5)/ -- --
John T. Dobson, III/(6)/ 28,810 *
Peter Kauff/(5)//(7)/ 364,992 2.5%
Hollis W. Rademacher/(5)/ -- --
Avy H. Stein/(8)/ 12,501,444 82.5%
Beth F. Johnston/(8)/ 12,501,444 82.5%
Stephen Roberts/(9)//(10)/ 13,320 *
Thomas Gatti/(5)//(11)/ 23,167 *
Patrick G. Doran/(5)//(12)/ 7,550 *
C. Thomas McMillen -- --
James Wood -- --
Sergio Zyman -- --
All directors and executive officers as a
group (11 persons)/(13)/ 12,910,473 83.0%
</TABLE>
_____________________________
* Indicates beneficial ownership of less than one (1%) percent.
(1) The business address of Messrs. Elkin Doran and Gersh is 5784 Lake Forrest
Drive, Suite 275, Atlanta, Georgia 30328. The business address of Mr.
Dobson is 2870 Peachtree Road, N.W., Atlanta, Georgia 30305. The business
address of Mr. Roberts is c/o The S. Roberts Company, 14724 Ventura
Boulevard, Suite 503, Sherman Oaks, California 91403. The business address
of Messrs. Kauff and Gatti is c/o College Television Network, Inc., 32 East
57th Street, New York, New York 10022. The business address of U-C
Holdings, L.L.C., Mr. Stein and Ms. Johnston is c/o Willis Stein & Partners,
L.P., 227 West Monroe Street, Suite 4300, Chicago, Illinois 60606. The
business address of Mr. Rademacher is 55 West Monroe Street, Suite 2530,
Chicago, Illinois 60603. The business address of Mr. McMillen is c/o
Complete Wellness Centers, 666 11th Street N.W., Suite 200, Washington, DC
20001. The business address of Mr. Wood is c/o First Union Corporation, 301
South College Street, Floor DC5, Charlotte, North Carolina 28288. The
business address of Mr. Zyman is P.O. Box 724705, Atlanta, Georgia 31139.
Except as otherwise indicated, each beneficial owner has the sole power to
vote and, as applicable, dispose of all shares of Common Stock owned by such
beneficial owner.
(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 that
such person or persons have or have the right to acquire within 60 days is
deemed
2
<PAGE>
to be outstanding but is not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person.
(3) Includes 924,832 shares subject to warrants exercisable within 60 days. U-C
Holdings, L.L.C. is a Delaware limited liability company. Willis Stein &
Partners, L.P., a Delaware limited partnership, is its Managing Member and
has the power to direct the voting and disposition of all of the Common
Stock held by U-C Holdings, L.L.C. The general partner of Willis Stein &
Partners, L.P. is Willis Stein & Partners, L.L.C., a Delaware limited
liability company, of which John R. Willis, Avy H. Stein, Beth F. Johnston,
Daniel M. Gill and Daniel H. Blumenthal are the Founding Members. Each such
person may, through Willis Stein & Partners, be deemed to share the power
to direct the voting and disposition of all of the Common Stock held by U-C
Holdings, L.L.C. The address of each such entity and person is c/o Willis
Stein & Partners, 227 West Monroe Street, Suite 4300, Chicago, Illinois
60606.
(4) Does not include any shares issuable to U-C Holdings, L.L.C. upon the
exercise of rights to purchase Common Stock pursuant to certain equity
protection agreements. The rights of U-C Holdings, L.L.C. to purchase
Common Stock pursuant to the equity protection agreements are exercisable
only upon the exercise by third parties of options and warrants to purchase
Common Stock and, in such event, only to the extent necessary to protect U-
C Holdings, L.L.C. from the dilution of its equity position in the Company.
(5) Does not include shares owned by U-C Holdings, L.L.C., in which Messrs.
Elkin, Gersh, Kauff, Rademacher, Doran and Gatti hold management and/or
investor units.
(6) Includes 5,810 shares held by Mr. Dobson's wife.
(7) Includes 359,992 shares subject to options exercisable within 60 days.
(8) All of such shares are held by U-C Holdings, L.L.C. Mr. Stein and Ms.
Johnston may be deemed to beneficially own the securities of the Company
owned by U-C Holdings, L.L.C. by virtue of their status as Founding Members
of Willis Stein & Partners, L.L.C., the general partner of Willis Stein &
Partners, L.P., which serves as the Managing Member of U-C Holdings,
L.L.C., as disclosed in footnote (3).
(9) Includes 7,320 shares of Common Stock held by the Roberts Family Trust of
1991, of which Mr. Roberts is co-trustee.
(10) Includes 6,000 shares subject to options exercisable within 60 days.
(11) Includes 18,167 shares subject to options exercisable within 60 days.
(12) Includes 7,550 shares subject to options exercisable within 60 days.
(13) Includes 1,316,541 shares subject to options exercisable within 60 days.
PROPOSAL 1
ELECTION OF DIRECTORS
Nominees for Election
The Board of Directors currently consists of nine members. At the Annual
Meeting of Stockholders, nine directors will be elected for a one-year term that
will expire upon the election and qualification of successor directors at the
2000 Annual Meeting of Stockholders. There are no family relationships between
any of the directors or executive officers of the Company.
Each of the current members of the Board of Directors has been nominated to
stand for reelection as a director at the Annual Meeting of Stockholders. The
current directors of the Company, who have been nominated to stand for re-
election, are Jason Elkin, Peter Kauff, Beth F. Johnston, C. Thomas McMillen,
Hollis W. Rademacher, Stephen Roberts, Avy H. Stein, James Wood and Sergio
Zyman.
The following reflects certain biographical information on the persons who
have been nominated for election to the Board of Directors of the Company at the
Annual Meeting of Stockholders:
JASON ELKIN, age 51, has been a director and Chairman of the Board of the
Company since May 1997 and the Chief Executive Officer of the Company since
April 1997. From September 1996 until April 1997, Mr. Elkin was a consultant
for U.S. Broadcast Group, L.L.P. (which owned and operated seven television
stations) and acted as its Chief Executive Officer. Mr. Elkin was the Chairman
and Chief Executive Officer of Future Vision Television, Inc., which was the
general partner of New Vision TV, L.P. (a company that owned six television
stations from December 1993 until March 1995, at which time all the assets of
the company were sold). Prior to forming New Vision TV, L.P., Mr. Elkin was a
television broadcast manager for over 20 years.
PETER KAUFF, age 57, has been a director of the Company since January 1991.
Mr. Kauff has served in the following capacities for the Company: from January
1997 until May 1997, Chairman of the Board of Directors and Chief Operating
Officer; from May 1997 until February 1998, Chief Operating Officer; and from
February 1998 to present, Vice Chairman. Mr. Kauff was an executive officer
with Entertainment Equities, an entertainment
3
<PAGE>
and talent management company, from 1988 until 1993. From 1971 until 1988, Mr.
Kauff was a co-founder and co-chairman of DIR Broadcasting, Inc., a radio
syndication and radio and television production company that was sold to Lorimar
Pictures, Inc. in 1986. Following the purchase, Mr. Kauff remained co-chairman
of that company until 1988 and as a consultant until 1990.
BETH F. JOHNSTON, age 38, has been a director of the Company since May
1997. Ms. Johnston is a founding member of Willis Stein & Partners, L.L.C., the
general partner of Willis Stein & Partners, L.P. Prior to the formation of
Willis Stein & Partners, L.P. in December 1995, Ms. Johnston was a managing
director of Continental Illinois Venture Corporation, where she worked from 1988
until 1994. In 1986, she worked at Hewlett-Packard Company, assisting in the
management of the venture capital investments made through the company's pension
fund. From 1983 until 1985, Ms. Johnston was an associate with The Boston
Consulting Group, where she provided strategy consulting services for Fortune
500 companies, particularly in the areas of acquisitions, manufacturing and
marketing.
C. THOMAS McMILLEN, age 45, has been a director of the Company since June
1998. Mr. McMillen served as the Chairman of the Board of Directors and Chief
Executive Officer of Complete Wellness Centers, Inc. from November 1994 until
February 1999. He was also the President of Complete Wellness Centers, Inc.
until April 1996. In 1993, Mr. McMillen formed McMillen and Company, Inc., a
health care consulting firm, and subsequently from November 1993 through March
1994, assumed the role of Chief Administrative Officer of Clinicorp, Inc., a
publicly-traded physician practice management company. Mr. McMillen was also a
director of Clinicorp, Inc., from January 1993 through December 1994. Clinicorp,
Inc. filed for Chapter 11 bankruptcy protection in June 1996. From 1987 to 1993,
Mr. McMillen served three consecutive terms in the U.S. House of Representatives
from the 4th Congressional District of Maryland. He was named by President
Clinton to Co-Chair the President's Council on Physical Fitness and Sports in
1993 and served until December 1997. Mr. McMillen is currently a member of the
Board of Directors of CHG, Inc., a subsidiary of Chemring Group, PLC, and North
Atlantic Acquisition Corporation (of which he is also the Secretary and
Treasurer).
HOLLIS W. RADEMACHER, age 63, has been a director of the Company since June
1997. Mr. Rademacher is currently a private investor and an investment
consultant. From 1987 until his retirement in 1993, he served as the Chief
Financial Officer of Continental Bank Corporation and Continental Bank, N.A.
("Continental") in Chicago, Illinois. Prior to being named Chief Financial
Officer of Continental, he held various positions with that company including
Chief Credit Officer and Executive Vice President. Mr. Rademacher currently
serves on the board of directors for Wintrust Financial Corporation (and several
of its subsidiaries), Schawk, Inc. and Cityscape Financial Corp., all of which
are publicly held companies.
STEPHEN ROBERTS, age 60, has been a director of the Company since January
1991. Mr. Roberts is the president of R & G Communications, Inc., a diversified
communications firm focusing on the entertainment industry and related
businesses, which he founded in July 1989. Mr. Roberts has served as the
president of The S. Roberts Co., which provides consulting services to the
entertainment industry, since August 1995. In addition, Mr. Roberts has served
as the president of Sandair Nevada, Inc., a sales representative and
manufacturing company, 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 his role in helping to create the international home video
business. Mr. Roberts is a member of the Academy of Motion Pictures, Arts and
Sciences, and the Academy of Television Arts and Sciences and a former director
of the Motion Picture Association of America.
AVY H. STEIN, age 44, has been a director of the Company since May 1997.
Mr. Stein is a founding member of Willis Stein & Partners, L.L.C., the general
partner of Willis Stein & Partners, L.P., a private equity fund formed in
December 1995. From 1989 until 1994, Mr. Stein was a managing director of
Continental Illinois Venture Corporation ("CIVC") and was responsible for deal
flow origination, investment decision-making, transaction negotiation, portfolio
oversight and disposition. From 1980 until 1983, Mr. Stein was an attorney with
the law firm of Kirkland & Ellis. From 1984 until 1985, Mr. Stein was President
of Cook Energy Corporation, an oil and gas exploration and production company
and Vice President of Corporate Planning and Legal Affairs at Cook
International, Inc. In 1985, he founded and became Chief Executive Officer and
majority shareholder of Regent Corporation, which focused on making and managing
acquisitions in the electronic security and personal
4
<PAGE>
emergency response industries. From 1988 until joining CIVC in 1989, Mr. Stein
was a special consultant on acquisitions, dispositions and restructurings to the
Chief Executive Officer of NL Industries, Inc. and its affiliates. Mr. Stein
presently serves on the Boards of Directors of Racing Champions Corporation and
Tremont Corporation.
JAMES WOOD, age 36, has been a director of the Company since April 1998.
Mr. Wood has served as the Managing Director of Media Communications for First
Union Capital Markets in Charlotte, North Carolina since September 1986.
SERGIO ZYMAN, age 53, has been a director of the Company since February
1999. Mr. Zyman has served as president of Sergio Zyman & Company, a consulting
and investment company, since November 1998. From August 1993 until November
1998, Mr. Zyman served as Chief Marketing Officer of The Coca-Cola Company.
The Board of Directors of the Company recommends that Stockholders vote for
the election of each of the Directors named above.
Committees of the Board of Directors
The Board of Directors has established a Stock Option and Compensation
Committee, on which Messrs. Rademacher, Roberts and Stein served throughout
1998. The Board of Directors has also established an Audit Committee, on which
Ms. Johnston and Mr. Rademacher served throughout 1998 and on which Mr. Wood
served beginning in December 1998. The Stock Option and Compensation Committee
is responsible for reviewing and recommending salaries, bonuses and other
compensation for the Company's executive officers. The Stock Option and
Compensation Committee also is responsible for administering the Company's stock
option plans and for establishing the terms and conditions of all stock options
granted under these plans. The Audit Committee is responsible for recommending
independent auditors, reviewing with the independent auditors the scope and
results of the audit engagement, monitoring the Company's financial policies and
control procedures, and reviewing and monitoring the provisions of nonaudit
services by the Company's auditors. The Audit Committee is also responsible for
ongoing review of related party transactions.
The Company does not have a standing nominating committee. The Board of
Directors also established an Executive Committee on February 15, 1999 to which
the Board delegated substantial authority for the types of actions that can be
taken by the full Board of Directors. The members of the Executive Committee
are Messrs. Elkin, Kauff, Stein and Rademacher.
Meetings of the Board of Directors and its Committees
During the year ended December 31, 1998, the Board of Directors of the
Company held three meetings, the Stock Option and Compensation Committee held
three meetings, and the Audit Committee held one meeting. Each of the directors
attended at least 75% of the aggregate of (i) the total number of meetings of
the Board of Directors and (ii) the total number of meetings held by all
committees of the Board on which he or she served, in each case during the
periods that he or she served.
Compensation of Directors
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 adopted the Outside Directors' 1996 Stock Option Plan (the "Outside
Directors' Plan"), pursuant to which grants of options to purchase shares of
Common Stock may be made to members of the Board of Directors who are not
employees of the Company ("Eligible Directors"). A person who satisfies the
definition of Eligible Director is not automatically entitled to option grants
under the Outside Directors' Plan. The Board of Directors has the authority
under the Outside Directors' Plan to determine whether, when and in what amount
option grants will be made to Eligible Directors, and the Board is not required
to grant the same number of options to different Eligible Directors. In 1999,
the Board of Directors plans to grant options to purchase 75,000 shares
of Common Stock to each of Messrs. McMillen, Rademacher, Roberts, Wood and Zyman
pursuant to the Outside Directors' Plan.
5
<PAGE>
The Company entered into a Consulting and Equity Purchase Agreement with
Sergio Zyman, a director of the Company, on March 26, 1999, pursuant to which
Mr. Zyman provides consulting services to the Company in connection with the
development, branding, expansion, direction, operation, management and sales of
the Company. The agreement has an indefinite term that ends upon 90 days
written notice by either party to the other party. Pursuant to the agreement,
the Company will pay Mr. Zyman a cash payment of up to 10% of all increases in
the Company's revenue in which Mr. Zyman assists the Company in developing,
achieving and/or closing. The agreement further provides that, if Mr. Zyman
obtains a purchaser for the Company in a transaction that is accepted by the
Company and closed, he will receive a 1% to 3% broker's fee based on the value
of the transaction. Mr. Zyman is also entitled to receive 50 Management Units
in U-C Holdings, L.L.C. for each $5,000,000 increase in revenue received by the
Company based upon the assistance, development and contacts of Mr. Zyman,
provided that Mr. Zyman is still serving as a member of the Board of Directors
of the Company. In addition, the agreement provides that Mr. Zyman shall
receive, for a cost of $200, 200 Management Units of U-C Holdings, L.L.C., which
become vested over the 12-month period from the date of the agreement provided
that Mr. Zyman is still serving as a member of the Board of Directors of the
Company and the consulting agreement has not been terminated.
The Company entered into a consulting agreement with C. Thomas McMillen on
March 1, 1999 pursuant to which Mr. McMillen provides services to the Company in
connection with sales and promotions and devotes an average of one hour per
business day to the Company's business. Pursuant to the terms of the agreement,
Mr. McMillen is entitled to receive a commission (the "Commission Bonus") of 10%
of any net revenue actually received by the Company from new sales procured by
Mr. McMillen for the Company that is entered into during the period in which Mr.
McMillen is providing services pursuant to the agreement (the "Consulting
Period"). The agreement provides for an indefinite Consulting Period that
terminates upon 30 days written notice by either party to the other party.
After the Consulting Period has expired, Mr. McMillen will be entitled to the
10% commission for the remaining term of any advertising contract in existence
on the expiration date, and a 5% commission for the first written renewal
contract for an advertiser for which Mr. McMillen previously was paid a
commission during the Consulting Period. In addition, the agreement provides
that, if any new sales procured by Mr. McMillen for the Company entered into
during the Consulting Period exceed $500,000, Mr. McMillen is entitled to
receive an additional $10,000 bonus and if such receipts exceed $1,000,000, Mr.
McMillen shall receive an additional $25,000 bonus. The agreement provides that
Mr. McMillen shall receive a one-time bonus (the "Military Bonus") of $1 for
each verified military viewer that allows CTN to present to advertisers as
increased total viewership, as of the date of the agreement of the United States
military to allow the Company to install its Systems, provided that the Systems
must remain installed for at least 12 months. The Company is required to pay
Mr. McMillen $5,000 per month on the first day of each month as a draw against
the Commission Bonus and Military Bonus, which draws are reconciled on each
anniversary of the agreement or the termination of the agreement (whichever is
sooner). The agreement includes covenants of Mr. McMillen to protect the
Company's confidential information, an assignment of work product relating to
the Company's business developed by Mr. McMillen while providing services for
the Company, and non-competition and non-solicitation covenants.
Related Party Transactions
Stephen Roberts, a director of the Company, is also the President and a 50%
owner of R&G Communications, Inc., which is a sales representative for the
Company. During the fiscal years ended December 31, 1998 and October 31, 1997,
in the ordinary course of business, the Company paid sales commissions to R&G
Communications, Inc. of approximately $177,000 and $67,000, respectively.
The Company paid JP Interiors a $57,000 fee in 1998 for design and
decorating services related to the relocation of the Company's New York offices.
JP Interiors is owned by the spouse of Peter Kauff, the Vice Chairman of the
Company.
The Company acquired Sadler & Streib Advertising, LLC ("S&S") on July 1,
1998. The founder of S&S, Sharon Sadler, is the spouse of Jason Elkin, the
Chairman and Chief Executive Officer of the Company. In conjunction with the
purchase of S&S, the Company paid Ms. Sadler $204,000. In addition, the Company
paid Ms. Sadler consulting fees of approximately $23,000 for the period of July
1, 1998 through December 31, 1998. The Company also paid $11,370 to S&S during
1998 for advertising services prior to the acquisition.
6
<PAGE>
The Company employs two individuals, Dennis Elkin and Eric Sadler, who are
related to Jason Elkin, the Chairman and Chief Executive Officer of the Company.
Total compensation paid (including fringe benefits) to these individuals in 1998
was approximately $59,000. In addition, the Company granted to these
individuals 2,000 vested stock options valued at approximately $5,300 during
1998 pursuant to the Company' 1996 Stock Incentive Plan.
Executive Officers
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<S> <C> <C>
Jason Elkin 51 Chairman of the Board and
Chief Executive Officer
Peter Kauff 57 Vice Chairman
Patrick G. Doran 42 Chief Financial Officer, Treasurer
and Secretary
Thomas G. Gatti 52 Executive Vice President
</TABLE>
See "Election of Directors" for biographical information relating to
Messrs. Elkin and Kauff. The following reflects certain biographical
information on the other executive officers of the Company:
PATRICK G. DORAN, age 42, has been the Chief Financial Officer, Treasurer
and Secretary of the Company since September 1997. Mr. Doran was the Vice
President-Operations and Planning for Turner Pictures Worldwide Distribution, a
division of Turner Broadcasting System, Inc., from January 1994 until June 1997,
and served as Vice President-Group Controller for the Syndication and Licensing
Group of Turner Broadcasting System, Inc. from September 1987 until December
1993.
THOMAS G. GATTI, age 52, joined the Company in July 1993 and has served as
Executive Vice President of the Company since August 1993. Prior to joining the
Company, Mr. Gatti served as a Divisional Vice President for Katz
Communications, a national television/radio/cable representative firm, from
January 1992 until July 1993. From July 1990 until January 1992, Mr. Gatti
served as a Director of National Sales for Westinghouse Broadcasting, which
owned and operated radio stations.
The Company's executive officers are elected annually by, and serve at the
pleasure of, the Board of Directors, subject to the terms of any employment
agreements. Each of Jason Elkin, Peter Kauff, Patrick G. Doran and Thomas G.
Gatti has entered into a multi-year employment agreement with the Company. See
"Employment Agreements." No family relationships exist between any directors or
executive officers of the Company.
7
<PAGE>
Executive Compensation
The following table sets forth certain information with respect to the
annual and long-term compensation for the fiscal year ended December 31, 1998
("F1998"), the two-month transition period ended December 31, 1997 ("T1997"),
the fiscal year ended October 31, 1997 ("F1997") and the fiscal year ended
October 31, 1996 ("F1996") of (i) the Company's Chief Executive Officer, (ii)
each of the four other most highly compensated executive officers of the Company
serving as of December 31, 1998, and (iii) the most highly compensated executive
officer of the Company who was not serving as of December 31, 1998 (such persons
are sometimes collectively referred to herein as the "Named Executive
Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ----------------------------
Securities Underlying
Name and Principal Position/(1)/ Year Salary Bonus Options/(2)/
- -------------------------------- ----- -------- ------- ------------
<S> <C> <C> <C> <C>
Jason Elkin(3) F1998 $329,769 $100,000 --
Chief Executive Officer T1997 59,152 -- --
and Chairman of the Board F1997 147,577 -- --
F1996 -- -- --
Peter Kauff/(4)/ F1998 $308,492 -- --
Vice Chairman T1997 52,880 -- --
F1997 265,404 -- --
F1996 222,103 -- 302,500/(5)/
Thomas Gatti F1998 $337,491 -- 50,000
Executive Vice President T1997 54,039 -- --
F1997 209,093 -- --
F1996 169,250 -- --
Patrick G. Doran/(6)/ F1998 $172,923 60,000 15,000
Chief Financial Officer, Treasurer T1997 25,065 -- --
and Secretary F1997 21,186 -- 30,200
F1996 -- -- --
Joseph D. Gersh/(7)/ F1998 $209,846 100,000 --
T1997 39,461 -- --
F1997 98,385 -- --
F1996 -- -- --
John T. Dobson, III/(8)/ F1998 $276,200 -- --
T1997 53,684 -- --
F1997 $133,554 -- --
F1996 ______ -- --
</TABLE>
_________________________
(1) In accordance with the rules of the Securities and Exchange Commission,
other compensation in the form of perquisites and other personal benefits
has been omitted because such perquisites and other personal benefits
constituted less than the lesser of $50,000 or 10% of the total annual
salary and bonus for the Named Executive Officer for such year.
(2) The number of shares of Common Stock underlying options granted has been
adjusted to reflect the Company's one-for-five reverse stock split, which
was effective on November 12, 1997.
(3) Mr. Elkin joined the Company in April 1997 and became an officer of the
Company in May 1997.
(4) Mr. Kauff served as the Chief Executive Officer and Chairman of the Board of
the Company during the fiscal year ended October 31, 1996 and until May 13,
1997.
(5) Excludes options to purchase 7,426 shares of Common Stock granted to Mr.
Kauff as of January 25, 1996, pursuant to the 1996 Stock Incentive Plan.
Such options replaced options to purchase 7,426 shares of Common Stock
granted to Mr. Kauff in 1991 pursuant to the Company's Performance Equity
Plan, which were surrendered as of September 26, 1995.
8
<PAGE>
67,500 of these options were adjusted to become 270,000 options, by action
of the Board of Directors taken April 8, 1997 pursuant to anti-dilution
provisions contained in an Option Agreement dated September 12, 1996.
(6) Mr. Doran joined the Company in September 1997.
(7) Mr. Gersh resigned from the Company in February 1999.
(8) Mr. Dobson joined the Company in April 1997 and resigned from the Company in
March 1998.
Stock Option Grants and Repricing
The following table sets forth information concerning stock option grants
made during the year ended December 31, 1998 to the Named Executive Officers.
These grants are also reflected in the Summary Compensation Table. The Company
has not granted any stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of Securities
Underlying % of Total Options
Options Granted to Employees in Exercise Price Expiration
Name Granted/(1)/ Fiscal Year 1998 ($/Share)/(2)/ Date
- ----------------------------------- --------------------- ----------------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Jason Elkin.................... -- -- -- --
Peter Kauff.................... -- -- -- --
Thomas Gatti................... 50,000 17.3% $2.125 2/26/2003
Patrick G. Doran............... 15,000 5.2% $ 1.50 9/10/2003
Joseph D. Gersh................ -- -- -- --
John T. Dobson, III............ -- -- -- --
</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.
(2) The exercise price of the options granted was equal to the fair market value
of the underlying stock on the date of grant.
In April 1998, the Compensation Committee and the Board of Directors
recognized that due to the fact that the exercise price of many existing stock
options were far in excess of the then-current trading price of the Company's
Common Stock, the existing options no longer provided a performance incentive to
employees. The Compensation Committee and the Board of Directors determined
that in order for the Company's stock option plans to continue to meet
objectives of attracting, retaining and fairly compensating employees, certain
employees should be provided the opportunity to have their options repriced at
an exercise price that was slightly higher than the then-current trading price
of the Company's Common Stock. As a result of this initiative, options held by
Patrick G. Doran and Peter Kauff to purchase 30,200 and 334,927 shares of
Common Stock, respectively, were repriced to $2.25 per share.
9
<PAGE>
Stock Option Holdings in 1998
The following table sets forth information concerning unexercised options,
including the aggregate dollar value of in-the-money options, held by the Named
Executive Officers as of December 31, 1998 and as adjusted to reflect the one-
for-five reverse stock split effective November 12, 1997. The closing price of
the Common Stock underlying the options on December 31, 1998 (the last trading
day of the fiscal year) on The Nasdaq SmallCap Market ("Nasdaq") was $2.44 per
share. No options were exercised by the Named Executive Officers in the year
ended December 31, 1998.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options at December 31, 1998 Options at December 31, 1998
---------------------------- ----------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Jason Elkin................ -- -- -- --
Peter Kauff................ 367,419 -- $73,059 --
Thomas Gatti............... 18,167 34,833 $ 5,250 $10,500
Patrick G. Doran........... 7,550 37,650 $ 1,435 $18,404
Joseph D. Gersh............ -- -- -- --
John T. Dobson, III........ -- -- -- --
</TABLE>
Long-Term Incentive Plan Awards
No awards were made by the Company under any long-term incentive plan
during the year ended December 31, 1998.
Employment Agreements
Messrs. Elkin, Kauff, Gatti and Doran are employed by the Company pursuant
to written employment agreements. Messrs. Gersh and Dobson each entered into an
employment agreement with the Company before or during the term of his
employment and a severance agreement upon the termination of his employment.
Mr. Elkin's employment agreement has an initial term of four years from
April 29, 1997 and is automatically renewed for additional one-year periods
unless either party provides written notice of termination at least six months
in advance of the expiration date of the current term. Mr. Elkin received an
annual salary of $300,000 for the twelve months ended April 29, 1998 and will
receive an annual salary of at least $330,000 for the twelve months ended April
29, 1999. Mr. Elkin's employment agreement provides him with an annual raise of
at least ten percent and an annual bonus in an amount determined by the
Compensation Committee. If Mr. Elkin is terminated without cause, he would be
entitled to his salary for the remaining portion of the term of his employment
agreement. Mr. Elkin's employment agreement also contains a covenant not to
compete with the Company.
Mr. Kauff's employment agreement has a term of four years from April 25,
1997. Mr. Kauff received an annual salary of $275,000 for the twelve months
ended April 25, 1998 and will receive an annual salary of $330,000 for the
twelve months ended April 25, 1999. Mr. Kauff's employment agreement provides
him with an annual raise based upon increases in the Consumer Price Index. Mr.
Kauff's employment agreement also contains a covenant not to compete with the
Company.
Mr. Gatti's employment agreement has a term of two years from January 1,
1998 and is automatically extended for successive one-year periods unless either
party provides written notice of termination at least 90 days in advance of the
expiration date of the current term. Mr. Gatti received an annual salary of
$200,000 for the twelve months ended December 31, 1998. Under the terms of Mr.
Gatti's employment agreement, he is entitled to receive an annual salary of
$214,000 for the twelve months ended December 31, 1999; however, the Company is
currently compensating Mr. Gatti at an annualized salary of $250,000 for 1999.
Mr. Gatti's employment agreement provides him with an annual raise of seven
percent. Mr. Gatti is entitled to receive a percentage commission bonus as
agreed upon between Mr. Gatti and the Company on a yearly basis. Pursuant to
his employment agreement, Mr. Gatti was granted options to purchase 10,000
shares of Common Stock. Mr. Gatti has also received 100 Class B Management
10
<PAGE>
Units of U-C Holdings, L.L.C. (currently the holder of a majority of the
Company's outstanding common stock) at a price of $100 per unit. These
Management Units will become vested and owned by Mr. Gatti over the 36 month
period after the date of the agreement pursuant to which the equity was granted
in equal proportions on each anniversary date if, as of such anniversary date,
Mr. Gatti remains employed by the Company. The Management Units will also become
vested in the event of certain transactions involving a sale of substantially
all of the stock or assets of the Company or a sale of substantially all of the
equity interests or assets of U-C Holdings, L.L.C. Mr. Gatti's employment
agreement also includes non-disclosure, non-competition and non-solicitation
covenants.
Mr. Doran's employment agreement has a term of three years from September
10, 1997 and may be extended by the mutual consent of the parties. Mr. Doran's
contract provides that he is entitled to an annual salary of $150,000, subject
to increases in the discretion of the Board of Directors, and an annual bonus to
be determined by the Company on a yearly basis. Mr. Doran is currently
receiving an annual salary of $200,000. The amount and calculation of Mr.
Doran's annual bonus is (i) $20,000 if the Company achieves 80% of its affiliate
relations goal (to be determined by the Company), (ii) $20,000 if the Company
achieves 80% of its stated sales goal (to be determined by the Company), and
(iii) $20,000 at the discretion of the Chief Executive Officer of the Company
and the Board of Directors. If Mr. Doran is terminated without cause, he would
be entitled to his base salary plus benefits and bonus for the remainder of the
term of his employment agreement. Pursuant to the employment agreement, Mr.
Doran was granted options to purchase 30,200 shares of Common Stock. Mr.
Doran's employment agreement also includes a covenant not to compete with the
Company.
Mr. Gersh's employment agreement provided him with an annual salary of
$200,000 for the twelve months ended April 29, 1998. Mr. Gersh received a
salary of $174,164 pursuant to his employment agreement for the period from
April 30, 1998 through February 15, 1999. Mr. Gersh's employment agreement also
contains covenants that prohibit him from competing with the Company in
marketing to colleges and universities, from soliciting employees of the Company
and from disclosing the Company's confidential information. Mr. Gersh resigned
from his position with the Company in February 1999. On February 19, 1999, Mr.
Gersh entered into a Payment Agreement and General Release with the Company and
U-C Holdings, L.L.C., pursuant to which Mr. Gersh agreed to waive any and all
claims that he may have against the Company or U-C Holdings, L.L.C. in
connection with the termination of his employment or otherwise. The Company
agreed to pay Mr. Gersh $18,333.33 per month through April 28, 2001 and to
permit Mr. Gersh and his dependents to continue to receive benefits under the
Company's health and dental insurance policies until the earlier of the date Mr.
Gersh accepts other employment or April 28, 2001. The agreement granted an
option to Mr. Gersh to purchase 100,000 shares of the Company's common stock for
$2.75 per share for a five-year term.
Mr. Dobson's employment agreement provided him with an annual salary of
$275,000 for the twelve months ended April 29, 1998. Mr. Dobson received a
salary of $190,385 pursuant to his employment agreement for the period from
April 30, 1998 through December 31, 1998. Mr. Dobson's employment agreement
also contains a covenant not to compete with the Company. On March 21, 1998,
the Company entered into a severance agreement with Mr. Dobson. The agreement
provides for payments of approximately $870,000 over a three-year period ending
in April 2001. As of December 31, 1998, the Company has paid approximately
$233,000 of this obligation.
The Company offers basic health, major medical and life insurance to its
employees. The Company also offers employees the opportunity to participate in
a 401(k) plan; however, the Company does not provide any matching contributions.
No other 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
11
<PAGE>
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.
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 twelve months ended December 31, 1998:
<TABLE>
<CAPTION>
Name of Reporting Person Description
------------------------ -----------
<S> <C>
Patrick G. Doran One transaction occurring in October 1998 was reported late.
Jason B. Elkin One transaction occurring in October 1998 was reported late.
Thomas G. Gatti One transaction occurring in October 1998 was reported late.
Joseph D. Gersh One transaction occurring in October 1998 was reported late.
Peter Kauff One transaction occurring in October 1998 was reported late.
Hollis W. Rademacher One transaction occurring in October 1998 was reported late.
Stephen Roberts One transaction occurring in September 1998 was reported late.
</TABLE>
PROPOSAL 2
AMENDMENTS TO OUTSIDE DIRECTORS' 1996 STOCK OPTION PLAN
The Board of Directors of the Company has adopted, subject to the approval
of the Stockholders, an amendment to the Company's Outside Directors' 1996 Stock
Option Plan (the "Outside Directors' Plan") to increase the number of shares
reserved for issuance under the Outside Directors' Plan.
The proposed amendment to the Outside Directors' Plan will amend Section
3(a) of the Outside Directors' Plan to increase the total number of shares of
Common Stock that may be issued pursuant to the Outside Directors' Plan by
220,000 shares. Stock options may be granted under the Outside Directors' Plan
only to "Eligible Directors," which are persons who are members of the Board of
Directors and are (i) not employees of the Company or any subsidiary thereof and
(ii) have not waived their right to receive options under the Outside Directors'
Plan. Currently, the Company has five Eligible Directors serving on its board.
The Company believes that it is in the best interest of the Company to
increase the number of shares available for awards under the Outside Directors'
Plan in order that the Company may continue to provide incentives to those
directors of the Company who are not employees of the Company to serve on the
Board of Directors of the Company and to maintain and enhance the Company's
long-term performance. 240,000 shares of Common Stock are currently reserved for
issuance under the Outside Directors' Plan. Awards with respect to 6,000 shares
have been granted under the Outside Directors' Plan, such that a balance of
awards with respect 6,000 shares are outstanding as of March 31, 1999. If the
proposed amendment to the Outside Directors' Plan is adopted, a total of 500,000
shares will be reserved for issuance under the Outside Directors' Plan. The text
of the proposed amendment to the Outside Directors' Plan is set forth in Annex A
to this Proxy Statement.
The Board of Directors of the Company recommends that Stockholders vote for
the amendment to the Outside Directors' Plan.
12
<PAGE>
PROPOSAL 3
SELECTION OF INDEPENDENT ACCOUNTANTS
Subject to ratification by the Stockholders, the Board of Directors has
selected the firm of PricewaterhouseCoopers LLP ("PWC"), as the Company's
independent accountants for the year ending December 31, 1999. If the
Stockholders do not ratify the selection of PWC, the Board of Directors will
reconsider the matter. Representatives of PWC are expected to be present at the
Annual Meeting of Stockholders. They will have an opportunity to make a
statement if they desire to do so and will also be available to respond to
appropriate questions from Stockholders.
The Company engaged PWC, then known as Price Waterhouse, L.L.P., effective
June 24, 1997, as the principal accountant to audit the Company's financial
statements. During the Company's two most recent fiscal years and any
subsequent interim periods prior to engaging PWC, neither the Company nor anyone
on its behalf consulted PWC regarding any matter described in Item 304(a)(2)(i)
or (ii) of Regulation S-B.
Effective June 24, 1997, the Company dismissed Richard A. Eisner & Company,
L.L.P. ("Eisner"), which was previously engaged as the principal accountant to
audit the Company's financial statements. The decision to change accountants
was recommended and approved by the Company's Board of Directors.
In an audit report dated January 12, 1996 relating to the Company's
financial statements for the fiscal year ended October 31, 1995, Eisner stated
that "[t]he Company has suffered recurring losses from operations, anticipates
such losses will continue, and is in need of additional financing. These
factors raise substantial doubt about its ability to continue as an ongoing
concern." The report further stated that "[t]he financial statements do not
include any adjustments that might result from the outcome of this uncertainty."
The Company has authorized Eisner to respond fully to the inquiries of PWC
concerning the subject matter of such statements regarding the fiscal year ended
October 31, 1995.
Other than the matter discussed in the preceding paragraph, none of
Eisner's reports on the financial statements of the Company contained, for
either of the past two years, an adverse opinion or a disclaimer of opinion, nor
was it qualified or modified as to uncertainty, audit scope or accounting
principles. During the Company's two most recent fiscal years and all subsequent
interim periods preceding Eisner's dismissal, there was no disagreement with
Eisner on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement, if not solved to
the satisfaction of Eisner, would have caused Eisner to make reference to the
subject of the disagreement in connection with its report. During the Company's
two most recent fiscal years and all subsequent interim periods preceding
Eisner's dismissal, none of the kinds of events listed in paragraphs (A) and (B)
of Item 304(a)(1)(iv) of Regulation S-B occurred.
The Company reported the change in principal accountants on a Current
Report on Form 8-K filed July 1, 1997. The Company provided Eisner with a copy
of the disclosures it made in the Current Report on Form 8-K prior to the filing
of the report with the Securities and Exchange Commission. Eisner has furnished
the Company a copy of a letter addressed to the Securities and Exchange
Commission stating that Eisner agrees with the statements made by the Company in
this Proxy Statement.
The Board of Directors of the Company recommends that Stockholders vote for
the ratification of PricewaterhouseCoopers LLP as independent accountants.
SOLICITATION OF PROXIES
The Board of Directors does not know of any other matters that may come
before the Annual Meeting of Stockholders. However, if any other matters are
properly presented to the Meeting, it is the intention of the persons named in
the accompanying Proxy to vote, or otherwise act, in accordance with their
judgment on such matters.
All costs of solicitation of Proxies will be borne by the Company. In
addition to solicitation by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit Proxies by telephone,
telegraph and personal interviews. Brokers, custodians and fiduciaries will be
requested to forward proxy soliciting material to the owners of stock held in
their names, and the Company will reimburse them for reasonable out-of-pocket
expenses in connection with the distribution of proxy solicitation material.
13
<PAGE>
OTHER MATTERS
Proposals of Stockholders intended to be presented at the 2000 Annual
Meeting of Stockholders must be received by the Company at its principal office
in Atlanta, Georgia not later than December 13, 1999 for inclusion in the Proxy
Statement for that Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Jason Elkin
Chairman of the Board and Chief Executive
Officer
THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. YOUR PROMPT RESPONSE
WILL GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING, AND WE APPRECIATE YOUR
COOPERATION.
14
<PAGE>
ANNEX A
TEXT OF PROPOSED THIRD AMENDMENT TO
OUTSIDE DIRECTORS' 1996 STOCK OPTION PLAN
The Outside Directors' 1996 Stock Option Plan (the "Plan") of College
Television Network, Inc. (the "Company") (formerly Laser Video Network, Inc.) is
hereby amended as follows:
1.
Section 3(a) of the Plan is amended by deleting the second sentence thereof
in its entirety and substituting therefor the following new second sentence:
"Subject to Section 3(b), the aggregate number of shares of Common Stock of the
Company which may be transferred pursuant to the Plan shall be 460,000."
2.
The foregoing amendment shall be effective as of the approval of the
amendment by the holders of a majority of the outstanding Common Stock of the
Company.
<PAGE>
COLLEGE TELEVISION NETWORK, INC.
5784 LAKE FORREST DRIVE, SUITE 275
ATLANTA, GEORGIA 30328
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Jason Elkin and Patrick G. Doran, and each of
them, with full power of substitution, as Proxy, to represent and vote all the
shares of Common Stock of College Television Network, Inc. held of record by
the undersigned on March 29, 1999, at the annual meeting of stockholders to be
held on May 11, 1999 or any adjournment thereof, as designated on the reverse
side hereof and in their discretion as to other matters.
The Board of Directors Recommends a vote "FOR all nominees" in Proposal 1 and
"FOR" Proposals 2 and 3.
Proposal 1. Election of the following Nominees as Directors:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FOR all Nominees WITHHELD Nominees: Jason Elkin Peter Kauff
listed at right (except for all Nominees Beth F. Johnston C. Thomas McMillen
as marked to the contrary) listed at right Hollis W. Rademacher Stephen Roberts
Avy H. Stein James Wood
[_] [_] Sergio Zyman
(Instruction: To withhold authority to vote for
any individual nominee, strike a line through the
nominee's name as listed above.)
Proposal 3. Approval of the appointment of
PricewaterhouseCoopers LLP as independent
Proposal 2. Approval of amendment to auditors of the Company for the fiscal year
Outside Directors' 1996 Stock Option Plan: ending December 31, 1999:
For Against Abstain For Against Abstain
[_] [_] [_] [_] [_] [_]
</TABLE>
(Please date and sign on reverse)
(Continued on reverse side)
<PAGE>
COLLEGE TELEVISION NETWORK, INC.
PROXY
The shares represented by this proxy will be voted as directed by the
Stockholder. If no direction is given when the duly executed proxy is returned,
such shares will be voted "FOR" all nominees in Proposal 1 and "FOR" Proposals
2 and 3.
I PLAN TO ATTEND
MEETING [_]
PLEASE MARK YOUR CHOICE
LIKE THIS [X] IN BLUE OR
BLACK INK.
Dated ____________________
Signature ________________
Signature if held
jointly __________________
Please sign exactly as
name appears on the
reverse side. When shares
are held by joint
tenants, both should
sign. When signing as
attorney, as executor,
administrator, trustee or
guardian, please give
full title as such. If a
corporation, please sign
in full corporate name by
President or other
authorized officer. If a
partnership, please sign
in partnership name by
authorized person.
Please mark, date and
sign as your name appears
above and return in the
enclosed envelope.
