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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 Section240.14a-11(c) or
Section240.14a-12
MICROPROSE, INC.
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(Name of Registrant as Specified In Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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MICROPROSE, INC.
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
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TO BE HELD MAY 11, 1998
9:30 A.M.
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders (the
"Meeting") of MicroProse, Inc., a Delaware corporation (the "Company") will be
held at the offices of the Company located at 2490 Mariner Square Loop, Alameda,
CA 94501, at 9:30 a.m., local time, on May 11, 1998 for the following purposes:
1. To approve an amendment to the Company's Restated Certificate of
Incorporation whereby one new share of Common Stock would be issued for each
five presently outstanding shares of Common Stock. (Proposal 1); and
2. To transact such other business as may properly come before the Meeting or
any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only stockholders of record at the close of
business on April 1, 1998 (the "Record Date") are entitled to notice of and to
vote at the Meeting. All stockholders are cordially invited to attend the
Meeting in person. However, to ensure your representation at the Meeting, you
are urged to vote, date, sign and return the enclosed proxy as promptly as
possible in the enclosed envelope. Any stockholder attending the Meeting may
vote in person even if he or she returned a proxy.
<TABLE>
<S> <C>
Alameda, California Sincerely,
April 10, 1998 /s/ Stephen M. Race
Stephen Race
Chief Executive Officer
</TABLE>
<PAGE>
STOCKHOLDERS SHOULD READ THE ENTIRE PROXY STATEMENT
CAREFULLY PRIOR TO RETURNING THEIR PROXIES
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PROXY STATEMENT FOR
SPECIAL MEETING OF STOCKHOLDERS OF
MICROPROSE, INC.
------------------------
TO BE HELD MAY 11, 1998
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of MicroProse, Inc. (the "Company") of proxies to be voted at
a Special Meeting of Stockholders (the "Meeting") to be held at 9:30 a.m., local
time, on May 11, 1998 at the offices of the Company located at 2490 Mariner
Square Loop, Alameda, CA 94501, or at any adjournments or postponements thereof,
for the purposes set forth in the accompanying Notice of Special Meeting of
Stockholders.
These proxy solicitation materials were mailed on or about April 10, 1998 to
all stockholders entitled to vote at the Meeting. The Company's Board of
Directors has unanimously approved the matters being submitted for stockholder
approval at the meeting.
RECORD DATE; OUTSTANDING SHARES
Stockholders of record at the close of business on April 1, 1998 (the
"Record Date") are entitled to notice of and to vote at the Meeting. As of the
Record Date, the Company had 30,601,568 shares of Common Stock, $.001 par value
per share (the "Common Stock") issued and outstanding and 2,000,000 shares of
Series A Preferred Stock issued and outstanding. All of the shares of the
Company's Common Stock outstanding on the Record Date are entitled to vote at
the Annual Meeting and stockholders of record entitled to vote at the meeting
will have one (1) vote for each share so held on the matters to be voted upon.
The 2,000,000 shares of Series A Preferred Stock outstanding on the record date,
which are convertible into an aggregate of 98,039 shares of Common, are all
entitled to vote at the Annual Meeting on an as-converted to Common Stock basis.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date or by attending the Meeting and voting in person.
VOTING AND SOLICITATION
Shares of the Company's Common Stock represented by proxies in the
accompanying form that are properly executed and returned to the Company will be
voted at the Annual Meeting of Stockholders in accordance with the stockholders'
instructions contained therein. In the absence of contrary instructions, shares
represented by such proxies will be voted FOR the Amendment to the Restated
Certificate of Incorporation as described herein under "Proposal 1--Amendment to
the Restated Certificate of Incorporation to Effect a Reverse Stock Split". If
other matters should properly come before the meeting, the proxy holders will
vote on such matters in accordance with their best judgment. Abstentions and
broker non-votes are each included in the determination of the number of shares
present for quorum purposes. Abstentions are counted in tabulations of the votes
cast on proposals presented to stockholders, whereas broker non-votes are not
counted for purposes of determining whether a proposal has been approved.
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The cost of soliciting proxies will be borne by the Company. Proxies will be
solicited principally through the use of the mails, but, if deemed desirable,
may be solicited personally or by telephone, telegraph or special letter by
officers and regular employees for no additional compensation. In addition, the
Company may engage a proxy solicitation service to aid in the solicitation of
proxies, for which the Company would pay customary fees not to exceed $4,000,
plus expenses. Arrangements may also be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy material to the
beneficial owners of the Company's Common Stock, and such persons may be
reimbursed for their expenses.
MATTERS TO BE CONSIDERED AT SPECIAL MEETING
PROPOSAL NO. 1--AMENDMENT TO RESTATED CERTIFICATE OF
INCORPORATION TO EFFECT A REVERSE STOCK SPLIT
The Board of Directors believes that it is in the best interests of the
Company and its stockholders to effect a reverse stock split whereby each five
shares of the Company's presently outstanding Common Stock would be
automatically converted into one share of the Company's Common Stock (the
"Reverse Stock Split"). The Board of Directors is recommending this action
primarily to allow the Company's Common Stock to continue to comply with the
listing requirements of the Nasdaq National Market as well as to improve the
liquidity of the Company's Common Stock. One of the listing requirements of the
Nasdaq National Market is that the Company's Common Stock have a minimum bid
price of $5.00.
The closing price of the Common Stock was $2.16 on the Record Date. Since
September 1997 the closing sales price of the Company's Common Stock on Nasdaq
National Market has ranged between $1.43 and $7.87. The Company believes it will
be required to effect a reverse stock split in order to ensure that the bid
price of the Company's Common Stock is consistently in excess of $5.00.
In addition, the Board of Directors believes that the Reverse Stock Split
may improve the liquidity of the Company's Common Stock. Frequently, brokers
charge trading commissions based upon the number of shares purchased. As a
result, this trading commission per share is relatively higher as a percentage
of the value of the shares of the Company's Common Stock purchased. The Board of
Directors and management believe that the relatively high trading cost of the
Company's Common Stock may adversely impact the liquidity of the Company's
Common Stock by making it a less attractive investment than the stock of other
companies in the Company's industry. If the Reverse Stock Split is effected and
the price of the Company's Common Stock rises correspondingly, the trading costs
for the Company's Common Stock will decrease significantly.
POTENTIAL EFFECTS OF PROPOSED REVERSE STOCK SPLIT
If this proposal is approved by the Company's stockholders, one new share of
Common Stock ("New Common Stock") will be issued for each five presently
outstanding shares of Common Stock.
The Board of Directors believes that the decrease in the number of shares of
Common Stock outstanding as a consequence of the Reverse Stock Split will result
in a corresponding increase in the price per share of the Company's Common
Stock. There can be no assurance, however, that the Reverse Stock Split will
result in any change in the price of the Company's Common Stock or that, if the
price of the Company's Common Stock does increase as a result of the Reverse
Stock Split, such increase will be sufficient to allow the Company to comply
with the listing requirements of the Nasdaq National Market. If the Company is
unable to comply with the Nasdaq National Market listing requirements, the
Company's Common Stock may be delisted from the Nasdaq National Market. Although
in such event the Company would attempt to list the Company's Common Stock on
the Nasdaq Small Cap market, there can be no assurance that the Company would be
successful. If for any reason the Company is unable to achieve and maintain
compliance with the Nasdaq Small Cap Market, the holders of the Company's 6.5%
Convertible
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Subordinated Notes due 2002 (the "Notes") would be entitled to require the
Company to repurchase all or any portion of such holders' Notes for cash at a
price equal to the principal amount plus accrued interest. In such event, the
Company's business, results of operations and financial condition would be
materially and adversely affected.
The Company is presently authorized to issue 49,000,000 shares of Common
Stock, $0.001 par value, of which 30,601,568 shares were issued and outstanding
at the close of business on the Record Date. The following tables illustrate the
principal effects of the Reverse Stock Split to the Company's Common Stock:
<TABLE>
<CAPTION>
AFTER THE
PRIOR TO 1-FOR-5
REVERSE STOCK REVERSE STOCK
NUMBER OF SHARES SPLIT (#) SPLIT (#)
- ---------------------------------------------------- -------------- --------------
<S> <C> <C>
Common Stock
Authorized........................................ 49,000,000 9,800,000
Outstanding(1).................................... 30,601,568 6,120,562
Available for Future Issuance..................... 18,398,432 3,679,438
</TABLE>
The proposed Reverse Stock Split will not affect any stockholder's
proportionate equity interest in the Company. Holders of Common Stock will
continue to be entitled to receive such dividends as may be declared by the
Board of Directors. To date no dividends on the Common Stock have been paid by
the Company. Outstanding warrants and stock options under the Company's stock
plans will be adjusted to reflect the ratio of the Reverse Stock Split, if such
transaction is effected. The Company's reporting obligations under the Exchange
Act will not be affected by the Reverse Stock Split.
The number of holders of record of Common Stock of the Company as of the
Record Date was approximately 30,601,568, which number does not include
stockholders whose Common Stock is held in street name. The Reverse Stock Split
and related transactions will not result in a reduction of the number of
stockholders of the Company.
AMENDMENT OF RESTATED CERTIFICATE OF INCORPORATION; EXCHANGE OF STOCK
CERTIFICATES
The Certificate of Amendment to the Company's Restated Certificate of
Incorporation, in substantially the form of Exhibit "A" to this Proxy Statement
(the "Amendment"), has been adopted by the Board of Directors, subject to
approval by the Company's stockholders.
If the Amendment is approved by the Company's stockholders, the Company will
file the Amendment with the Secretary of State of the State of Delaware. The
Reverse Stock Split will become effective on the date of such filing (the
"Effective Date") and the stockholders will be notified on or after the
Effective Date that the Reverse Stock Split has been effected. The Company's
transfer agent will act as the Company's exchange agent (the "Exchange Agent")
for holders of Common Stock to exchange their certificates representing shares
of the Company's Common Stock.
As soon as practicable after the Effective Date, stockholders will be
requested to surrender their certificates representing shares of Common Stock to
the Exchange Agent in exchange for certificates representing New Common Stock.
Beginning on the Effective Date, each certificate representing shares of the
Company's Common Stock will be deemed for all corporate purposes to evidence
ownership of shares of New Common Stock. To the extent a stockholder holds a
number of shares not evenly divisible by the actual amount of the Reverse Stock
Split, the Company will round up the number of shares of New Common Stock issued
to such stockholder to the next nearest whole number of shares (see Fractional
Shares below).
FRACTIONAL SHARES
No fractional shares will be issued. Any fractional shares remaining after
aggregating all fractional shares held by a stockholder will be rounded up to
the nearest whole share. For example, if a stockholder
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held 101 shares of Common Stock of the Company prior to the Reverse Stock Split,
after the Reverse Stock Split such stockholder would hold only 21 shares.
FEDERAL INCOME TAX CONSEQUENCES
The following description of federal income tax consequences is based on the
Internal Revenue Code of 1986, as amended (the "Code"), the applicable Treasury
Regulations promulgated thereunder, judicial authority and current
administrative rulings and practices as in effect on the date of this Proxy
Statement. This discussion is for general information only and does not discuss
the federal income tax consequences which may apply to non-resident aliens,
broker-dealers, stockholders who receive Common Stock in compensatory
transactions or insurance companies. This discussion does not address any
foreign, state or local tax consequences that may be relevant to the Company's
stockholders. Accordingly, stockholders are urged to consult their own tax
advisors to determine the particular consequences to them of the Reverse Stock
Split.
The exchange of shares of Common Stock for shares of New Common Stock will
not result in recognition of gain or loss. The holding period of the shares of
New Common Stock will include the stockholder's holding period for the shares of
Common Stock exchanged therefor, provided that the shares of Common Stock were
held as a capital asset. The adjusted basis of the shares of New Common Stock
will be the same as the adjusted basis of the Common Stock exchanged therefor.
VOTE REQUIRED AND BOARD OF DIRECTORS RESERVATION OF RIGHTS
Under Delaware law, approval of the Reverse Stock Split requires the
affirmative vote of at least a majority of the outstanding shares of Common
Stock. An abstention or failure to vote on this proposal is not an affirmative
vote and, therefore, will have the same effect as a vote against the proposal. A
broker non-vote will not be treated as entitled to vote on this subject matter
at the meeting. See "Information Concerning Solicitation and Voting--Quorum;
Abstentions; Broker Non-Votes."
NO DISSENTER'S RIGHTS
Under Delaware law, stockholders are not entitled to dissenter's rights of
appraisal with respect to the proposed Amendment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" APPROVAL OF THE AMENDMENT OF THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO EFFECT THE REVERSE STOCK SPLIT.
OTHER MATTERS
The Company knows of no other matters to be submitted to the stockholders at
the Meeting. If any other matters properly come before the stockholders at the
Meeting, it is the intention of the persons named in the enclosed form of Proxy
to vote the shares they represent as the Board of Directors may recommend.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Stephen M. Race
Stephen Race
Chief Executive Officer
Dated: April 10, 1998
4
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EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
MicroProse, Inc., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of MicroProse, Inc.,
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and authorizing and directing the officers and directors of the
corporation to solicit the consent of the stockholders of said corporation for
consideration thereof. The resolution setting forth said amendment is as
follows:
NOW, THEREFORE, BE IT RESOLVED: That Article IV (a) of the Certificate of
Incorporation of this corporation, MicroProse, Inc., a Delaware corporation,
be amended to read in full as follows:
This corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock". The
Preferred Stock may be issued in one or more series. The Total number of
shares that this corporation is authorized to issue is Forty-Nine Million
(49,000,000) shares. Forty Million (40,000,000) shares shall be Common
Stock, par value of one tenth of a cent ($.001) per share, and Nine
Million (9,000,000) shares shall be Preferred Stock, par value of one
tenth of a cent ($.001) per share. Of the authorized shares of Preferred
Stock, Four Million (4,000,000) shares are designated as Series A
Convertible Preferred Stock.
Upon the filing of this Certificate of Amendment with the Secretary of
State of Delaware, each Five (5) currently outstanding shares of Common
Stock of this corporation shall be consolidated and combined into One (1)
share of Common Stock. No fractional shares of Common Stock shall be
issued upon such reverse stock split; any fractional shares that would
otherwise result as to any holder shall be rounded up to the nearest
whole share.
SECOND: That thereafter, the necessary number of shares of this
corporation's capital stock were voted at a meeting in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, MicroProse, Inc. has caused this certificate to be
signed by Stephen Race, its Chief Executive Officer, this th day of April,
1998.
By: /s/ STEPHEN RACE
-----------------------------------
Stephen Race, Chief Executive
Officer
<PAGE>
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
MICROPROSE, INC.
MICROPROSE, INC.
PROXY FOR 1998 SPECIAL MEETING OF STOCKHOLDERS
MAY 11, 1998
The undersigned stockholder(s) of MicroProse, Inc., a Delaware corporation
(the "Company"), hereby acknowledges receipt of the Notice of Special Meeting
of Stockholders and Proxy Statement, each dated April 10, 1998, and hereby
appoints Stephen M. Race and Gillman G. Louie, and each of them, Proxies and
Attorneys-in-Fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the 1998 Special
Meeting of Stockholders of MicroProse, Inc. to be held on May 11, 1998 at
9:30 a.m., local time, at the offices of the Company located at 2490 Mariner
Square Loop, Alameda, CA 94501 or at any adjournment or postponement thereof,
and to vote all shares of Common Stock which the undersigned would be
entitled to vote if personally present on any of the following matters and
with discretionary authority as to any and all other matters that may
properly come before the meeting.
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FOLD AND DETACH HERE
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1. To amend the Company's Restated Certificate of Incorporation whereby one new
share of Common Stock would be issued for each five presently outstanding
shares of Common Stock.
FOR AGAINST ABSTAIN
/ / / / / /
2. To act upon such other business as may properly come before the meeting or at
any adjournment or postponement thereof. I plan to attend the meeting / /
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE, THE SHARES REPRESENTED BY
THIS PROXY WILL BE VOTED FOR EACH OF THE ABOVE PROPOSALS, AND FOR SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AS THE PROXY HOLDERS DEEM
ADVISABLE.
(This proxy should be marked, dated and signed by each stockholder
exactly as such stockholder's name appears hereon, and returned
promptly in the enclosed envelope. Persons signing in a fiduciary capacity
should so indicate. A corporation is requested to sign its name by its
President or other authorized officer, with the office held designated. If
shares are held by joint tenants or as community property, both holders should
sign.)
Signature: _________________________________________
Signature: _________________________________________ Dated: _____________1998
TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE
MARK, SIGN AND DATE THIS PROXY AND RETURN IT AS PROMPTLY
AS POSSIBLE.
FOLD AND DETACH HERE
