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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant To Section 14(a) of The Securities
Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[x] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Murdock Communications Corporation
- -------------------------------------------------------------------------------
(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
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
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MURDOCK COMMUNICATIONS CORPORATION
1112 29TH AVENUE S.W.
CEDAR RAPIDS, IOWA 52404
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A Special Meeting of Shareholders of Murdock Communications Corporation,
an Iowa corporation (the "Company"), will be held at the Four Points Sheraton
Inn, 525 33rd Avenue S.W., Cedar Rapids, Iowa 52404, on June 24, 1997, at 2 p.m.
local time, for the following purposes:
1. To consider and vote upon the approval of a proposed amendment to the
Company's Amended and Restated Articles of Incorporation which (a) increases
the total number of authorized shares of the Company's no par value common
stock from 7,500,000 to 20,000,000 shares, (b) eliminates the Company's 10%
Series A Preferred Stock, and (c) creates a new class of serial preferred stock
and authorizes the issuance of up to 1,000,000 shares of serial preferred
stock.
2. To take action with respect to any other matters that may be properly
brought before the meeting and that might be considered by the shareholders of
an Iowa corporation at a special meeting.
By order of the Board of Directors
Cedar Rapids, Iowa
May 27, 1997
DAVID F. SCHULTZ,
Secretary
SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON MAY 19, 1997 ARE
ENTITLED TO VOTE AT THE MEETING. YOUR VOTE IS IMPORTANT TO ENSURE THAT A
MAJORITY OF THE STOCK IS REPRESENTED. PLEASE COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING. IF YOU LATER FIND THAT YOU MAY BE PRESENT AT
THE MEETING OR FOR ANY OTHER REASON DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO
AT ANY TIME BEFORE IT IS VOTED.
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MURDOCK COMMUNICATIONS CORPORATION
1112 29TH AVENUE S.W.
CEDAR RAPIDS, IOWA 52404
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 24, 1997
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Murdock Communications Corporation of proxies, in the
accompanying form, to be used at the Special Meeting of Shareholders of the
Company to be held at the Four Points Sheraton Inn, 525 33rd Avenue S.W., Cedar
Rapids, Iowa 52404, on June 24, 1997 at 2 p.m., local time, and any
adjournments thereof. This proxy material is being mailed on or about May 27,
1997 to shareholders of record at the close of business on May 19, 1997.
GENERAL INFORMATION ABOUT THE SPECIAL MEETING
The shares represented by each valid proxy received in time will be voted
at the meeting and, if a choice is specified on the proxy, it will be voted in
accordance with that specification. If no instructions are specified in a
signed proxy returned to the Company, the shares represented thereby will be
voted in FAVOR of the proposal (the "Capitalization Amendment Proposal") to
approve the Articles of Amendment to the Company's Amended and Restated
Articles of Incorporation in the form of Appendix A hereto (the "Articles of
Amendment").
Shareholders may revoke proxies at any time to the extent they have not
been exercised by giving written notice to the Company or by a later executed
proxy. Attendance at the Special Meeting will not automatically revoke a
proxy, but a shareholder attending the Special Meeting may request a ballot and
vote in person, thereby revoking a prior granted proxy. The cost of
solicitation of proxies will be borne by the Company. Solicitation will be
made primarily by use of the mails; however, some solicitation may be made by
employees of the Company, without additional compensation therefor, by
telephone, by facsimile, or in person. Only shareholders of record at the
close of business on May 19, 1997 will be entitled to notice of and to vote at
the meeting. On the record date, the Company had outstanding _________ shares
of no par value common stock ("Common Stock") entitled to one vote per share.
No shares of the Company's 10% Series A Preferred Stock ("Series A Preferred
Stock") were outstanding on the record date.
A majority of the votes entitled to be cast with respect to each matter
submitted to the shareholders, represented either in person or by proxy, shall
constitute a quorum with respect to such matter. If a quorum exists, the
Capitalization Amendment Proposal will be approved if the number of affirmative
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votes cast by the holders of shares of Common Stock present in person or by
proxy at the meeting and entitled to vote on such matter exceeds the number of
votes cast against the Capitalization Amendment Proposal. Abstentions and
broker non-votes (i.e., shares held by brokers in street name, voting on
certain matters due to discretionary authority or instructions from the
beneficial owner but not voting on other matters due to lack of authority to
vote on such matters without instructions from the beneficial owner) shall
count toward the quorum requirement and will not affect the determination of
whether the Capitalization Amendment Proposal is approved. The Inspector of
Election appointed by the Board of Directors shall determine the presence of a
quorum and tabulate the results of shareholder voting.
SECURITY OWNERSHIP
The following table sets forth information as of April 30, 1997 regarding
the beneficial ownership of shares of Common Stock by (1) each person who is
known to the Company to be the beneficial owner of more than 5% of the Common
Stock, (2) each of the Company's directors, the Company's Chief Executive
Officer in 1996 and each of the Company's other executive officers who earned
salary and bonus in excess of $100,000 in 1996, and (3) all directors and
executive officers as a group. Beneficial ownership of Common Stock has been
determined for this purpose in accordance with Rules 13d-3 and 13d-5 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
which provide, among other things, that a person is deemed to be the beneficial
owner of Common Stock if such person, directly or indirectly, has or shares
voting power or investment power with respect to the Common Stock or has the
right to acquire such ownership within sixty days.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME OF BENEFICIAL OWNER OWNED (1) PERCENT OF CLASS
------------------------ ------------- ----------------
<S> <C> <C>
Guy O. Murdock 926,085 22.3
Thomas E. Chaplin (2) 75,000 *
Berthel Fisher & Company, Inc.
(3) 464,068 11.1
Larry A. Cahill (4) 462,380 11.1
Colin P. Halford (5) 23,430 *
John C. Poss (6) 33,280 *
Steven R. Ehlert --- ---
Larry A. Erickson --- ---
All directors and executive
officers as a group
(8 persons) (7)
___________________________ 1,084,869 25.2
</TABLE>
* Less than 1%.
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(1) This table is based upon information supplied by directors, executive
officers and principal shareholders. Unless otherwise indicated in
footnotes to this table, each of the shareholders named in this table has
sole voting and investment power with respect to the shares shown as
beneficially owned.
(2) Includes 75,000 shares subject to exercise of stock options.
(3) Includes 350,497 shares of Common Stock held by certain affiliates of
Berthel for which Berthel shares voting and investment power, including
24,500 shares subject to exercise of warrants. Reflects information
reported in a Schedule 13D filed with the Securities and Exchange
Commission by Berthel on January 16, 1997. The address of Berthel is 100
Second Street S.E., P.O. Box 74250, Cedar Rapids, Iowa 52407.
(4) Mr. Cahill's address is 3330 Southgate Court S.W., Cedar Rapids, Iowa
52404. Includes 20,000 shares subject to exercise of warrants. Reflects
information reported in a Schedule 13G filed with the Securities and
Exchange Commission by Mr. Cahill on December 11, 1996.
(5) Includes 23,280 shares subject to exercise of stock options and 50 shares
subject to exercise of warrants.
(6) Includes 23,280 shares subject to exercise of stock options.
(7) Includes 148,334 shares subject to exercise of stock options and 150
shares subject to exercise of warrants.
THE CAPITALIZATION AMENDMENT PROPOSAL
The Company's Amended and Restated Articles of Incorporation currently
provide that the aggregate number of all classes of capital stock which the
Company has authority to issue is 7,545,000 shares divided into two classes as
follows: (i) 7,500,000 shares of Common Stock and (ii) 45,000 shares of Series
A Preferred Stock. Pursuant to an agreement by the Company with the managing
underwriter of the Company's initial public offering, the Company may not issue
any additional shares of Series A Preferred Stock prior to October 21, 1999 or
create a new class of preferred stock. The Company will be required to obtain
the consent of such managing underwriter prior to the effectiveness of the
Articles of Amendment.
PURPOSE AND EFFECT OF THE CAPITALIZATION AMENDMENT PROPOSAL
ADDITIONAL SHARES OF COMMON STOCK. The Articles of Amendment will
increase the number of shares of Common Stock which the Company is authorized
to issue from 7,500,000 to 20,000,000. The additional 12,500,000 shares of
Common Stock will be part of the existing class of Common Stock, and if and
when issued, will have the same rights and privileges as the shares of Common
Stock presently issued and outstanding.
SERIES A PREFERRED STOCK. The Articles of Amendment will eliminate the
Series A Preferred Stock. On __________, 1997, the Company redeemed that last
200 shares of Series A Preferred Stock that had been outstanding.
SERIAL PREFERRED STOCK. The Articles of Amendment will also authorize the
Company's Board of Directors to establish one or more series of Serial
Preferred
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Stock and to determine, with respect to any series of Serial Preferred Stock,
the terms and rights of such series, including (1) the designation of the
series, (2) the number of shares of the series, which number the Board of
Directors may thereafter increase or decrease (unless otherwise provided in the
articles of amendment with respect to such series), (3) whether dividends, if
any, shall be cumulative or noncumulative, the dividend rate of the series, and
the relation which such dividends bear to the dividends payable on any other
class or any other series of any class of stock, (4) the dates at which
dividends, if any, shall be payable, (5) the redemption rights and price or
prices, if any, for shares of the series, (6) the terms and amount of any
sinking fund provided for the purchase or redemption of shares of the series,
(7) the amounts payable on shares of the series in the event of any voluntary
or involuntary liquidation, dissolution or winding up of the affairs of the
Company, (8) whether the shares of the series will be convertible into shares
of any other class or series of stock, or any other security of the Company,
and if so, the specification of such other class or series or such other
security, the conversion price or prices or rate or rates, any adjustments
thereof, the date or dates as of which such shares will be convertible and all
other terms and conditions upon which such conversion may be made, (9)
restrictions on the issuance of shares of the same series or any other class or
series, (10) the voting rights, if any, of the holders of such series and (11)
any other powers, preferences and relative, participating, optional or other
special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof. The Articles of Amendment will authorize
the Company to issue up to 1,000,000 shares of Serial Preferred Stock.
PURPOSE OF THE CAPITALIZATION AMENDMENT PROPOSAL. As of April 30, 1997,
there were 4,152,494 shares of Common Stock issued outstanding, and 2,262,923
shares reserved for issuance upon exercise of outstanding warrants and stock
options. With 7,500,000 shares of Common Stock authorized for issuance under
the Company's Restated Articles of Incorporation, the Company currently has
only 1,084,583 shares of Common Stock available for issuance in future
transactions.
The Company has no present commitments, understandings or requirements
for the issuance or use of the proposed additional shares of Common Stock or
the new class of Serial Preferred Stock. The Company anticipates selling
shares of Common Stock or Serial Preferred Stock in 1997 through either a
private or public offering to meet the Company's anticipated cash needs for
working capital and capital expenditures. In addition, the Board of Directors
believes that the authority to issue additional shares of Common Stock or
shares of Serial Preferred Stock is desirable so that, as the need may arise,
the Company will have the flexibility to issue shares of Common Stock or
Serial Preferred Stock, without the delay of a special shareholders' meeting,
in connection with other possible future equity financings, future
opportunities for expanding the Company's business through acquisitions, and
management incentive or employee benefit plans. The Company is engaged in
efforts to identify businesses which are complementary to the Company's
business and which enhance shareholder value as acquisition targets.
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There can be no assurance that acquisition opportunities will be available,
that the Company will have sufficient resources to consummate any such
acquisition or that the Company will be able to complete a public or private
offering of equity securities sufficient to meet its liquidity needs. The
Serial Preferred Stock will provide the Company with additional flexibility to
determine the specific terms of stock appropriate for issuance in connection
with future equity offerings or acquisition opportunities.
CERTAIN EFFECTS OF THE CAPITALIZATION AMENDMENT PROPOSAL. If the
Capitalization Amendment Proposal is approved and effected, future issuances of
shares of Common Stock or Serial Preferred Stock may not require the approval
of the Company's shareholders. As a result, the Board of Directors could issue
shares of Common Stock or Serial Preferred Stock in a manner that might have
the effect of discouraging or making it more difficult for a third party to
acquire control of the Company through a tender offer or proxy solicitation or
to effect a merger or other business combination that is not favored by the
Board of Directors. In addition, issuances of shares of Common Stock or Serial
Preferred Stock may increase the number of shares of Common Stock that may
become available for sale in the public market and could adversely affect the
price of the Common Stock in the public market. The issuance of additional
shares of Common Stock or Serial Preferred Stock could also adversely affect
the voting power of the existing shareholders, including the loss of voting
control to others. The Board of Directors would also be able to issue shares
of Serial Preferred Stock with dividend, liquidation, voting or other rights in
preference to or greater than the rights of holders of the Common Stock.
Holders of Common Stock do not have preemptive rights or other rights to
subscribe for additional shares in the event that the Board of Directors
determines to issue additional shares of Common Stock or Serial Preferred Stock
in the future.
NO DISSENTER'S RIGHTS
Under Iowa law, shareholders are not entitled to dissenters' rights with
respect to the Capitalization Amendment Proposal.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the shareholders vote FOR the
Capitalization Amendment Proposal. All shares of Common Stock represented by
properly executed proxies received prior to or at the Special Meeting and not
revoked will be voted FOR the Capitalization Amendment Proposal unless a vote
against or an abstention with respect to such proposal is specifically
indicated. If the Capitalization Amendment Proposal is adopted by the
requisite vote of shareholders, the Board of Directors will promptly cause the
Articles of Amendment to be filed with the Secretary of State of the State of
Iowa. The Articles of Amendment will become effective upon such filing.
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SHAREHOLDER PROPOSALS
Proposals which shareholders intend to present at the 1998 Annual Meeting
of Shareholders must be received at the Corporation's principal offices in
Cedar Rapids, Iowa no later than December 31, 1997 for inclusion in the proxy
material for that meeting.
OTHER MATTERS
The Directors of the Corporation know of no other matters to be brought
before the meeting. If any other matters properly come before the meeting,
including any adjournment or adjournments thereof, it is intended that proxies
received in response to this solicitation will be voted on such matters in the
discretion of the person or persons named in the accompanying proxy form.
BY ORDER OF THE BOARD OF DIRECTORS
MURDOCK COMMUNICATIONS CORPORATION
David F. Schultz, Secretary
Cedar Rapids, Iowa
May 27, 1997
6
<PAGE> 9
APPENDIX A
ARTICLES OF AMENDMENT
TO
RESTATED ARTICLES OF INCORPORATION
OF
MURDOCK COMMUNICATIONS CORPORATION
MURDOCK COMMUNICATIONS CORPORATION, a corporation organized and
existing under and by virtue of the Iowa Business Corporation Act (the
"Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation has determined
that it is advisable and in the best interests of the Corporation that the
Restated Articles of Incorporation of the Corporation be amended by deleting
the current text of Article III thereof and substituting in lieu thereof the
following:
ARTICLE III
The total number of shares of stock which the Corporation has
authority to issue is 21,000,000 consisting of:
(i) 20,000,000 shares of Common Stock of no par value (the
"Common Stock"); and
(ii) 1,000,000 shares of Preferred Stock of no par value (the
"Preferred Stock").
Preferred Stock
Authority is hereby expressly granted to the Board of
Directors from time to time to issue the Preferred Stock as
Preferred Stock of one or more series and in connection with the
creation of any such series to fix by the resolution or
resolutions providing for the issue of shares thereof the
designation, voting powers, preferences, and relative,
participating, optional, or other special rights of such series,
and the qualifications, limitations, or restrictions thereof.
Such authority of the Board of Directors with
<PAGE> 10
respect to each such series shall include, but not be limited to,
the determination of the following:
(a) the distinctive designation of, and the number of shares
comprising, such series, which number may be increased (except
where otherwise provided by the Board of Directors in creating
such series) or decreased (but not below the number of shares
thereof then outstanding) from time to time by like action of the
Board of Directors;
(b) the dividend rate or amount for such series, the
conditions and dates upon which such dividends shall be payable,
the relation which such dividends shall bear to the dividends
payable on any other class or classes or any other series of any
class or classes of stock, and whether such dividends shall be
cumulative, and if so, from which date or dates for such series;
(c) whether or not the shares of such series shall be subject
to redemption by the Corporation and the times, prices, and other
terms and conditions of such redemption;
(d) whether or not the shares of such series shall be subject
to the operation of a sinking fund or purchase fund to be applied
to the redemption or purchase of such shares and if such a fund be
established, the amount thereof and the terms and provisions
relative to the application thereof;
(e) whether or not the shares of such series shall be
convertible into or exchangeable for shares of any other class or
classes, or of any other series of any class or classes, of stock
of the Corporation and if provision be made for conversion or
exchange, the times, prices, rates, adjustments, and other terms
and conditions of such conversion or exchange;
(f) whether or not the shares of such series shall have
voting rights, in addition to the voting rights provided by law,
and if they are to have such additional voting rights, the extent
thereof;
(g) the rights of the shares of such series in the event of
any liquidation, dissolution, or winding up of the Corporation or
upon any distribution of its assets; and
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(h) any other powers, preferences, and relative,
participating, optional, or other special rights of the shares of
such series, and the qualifications, limitations, or restrictions
thereof, to the full extent now or hereafter permitted by law and
not inconsistent with the provisions hereof.
SECOND: The Articles of Amendment were approved by the shareholders
of the Corporation in accordance with section 1003 of the Iowa Business
Corporation Act at a special meeting held on June 24, 1997. The number of
outstanding shares of Common Stock on May 19, 1997, the record date for the
special meeting, and the number of votes indisputedly represented at the
special meeting is as follows:
SHARES OUT- SHARES REPRE-
OUTSTANDING SENTED AT MEETING
_____________ ______________
The total number of undisputed votes cast for the Articles of
Amendment was:
VOTES VOTES
FOR AGAINST
____________ ______________
THIRD: The effective date and time of this document is the date and
time of filing with the Iowa Secretary of State.
IN WITNESS WHEREOF, the Corporation has caused the Articles of
Amendment to be signed by Guy O. Murdock, its Chairman of the Board, and
attested by David F. Schultz, its Secretary, on this ____ day of _________,
1997.
MURDOCK COMMUNICATIONS CORPORATION
BY______________________________
Guy O. Murdock,
Chairman of the Board
Attest:
________________________________
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