<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Murdock Communications Corporation
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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)(4) 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:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
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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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<PAGE> 2
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 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
DAVID F. SCHULTZ,
Secretary
Cedar Rapids, Iowa
May 27, 1997
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.
<PAGE> 3
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 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 4,152,494 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
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.
<PAGE> 4
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 PERCENT
NAME OF BENEFICIAL OWNER OWNED(1) 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........................................... -- --
All directors and executive officers as a group
(7 persons)(7)........................................... 1,084,869 25.2
</TABLE>
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* Less than 1%.
(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.
2
<PAGE> 5
THE CAPITALIZATION AMENDMENT PROPOSAL
The Company's 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 May 16, 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
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
3
<PAGE> 6
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.
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.
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.
4
<PAGE> 7
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
5
<PAGE> 8
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 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;
A-1
<PAGE> 9
(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
(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:
<TABLE>
<CAPTION>
<S> <C> <C>
SHARES SHARES REPRESENTED
OUTSTANDING AT MEETING
----------- -----------
</TABLE>
The total number of undisputed votes cast for the Articles of Amendment
was:
<TABLE>
<CAPTION>
<S> <C> <C>
VOTES VOTES
FOR AGAINST
----------- -----------
</TABLE>
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:
--------------------------------------
A-2
<PAGE> 10
PROXY
MURDOCK COMMUNICATIONS CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Guy O. Murdock and David F. Schultz, or
either one of them, with full power of substitution and resubstitution, as
proxy or proxies of the undersigned to attend the Special Meeting of
Shareholders of Murdock Communications Corporation to be held on June 24, 1997
at 2:00 p.m. local time, at the Four Points Sheraton Inn, 525 33rd Avenue S.W.,
Cedar Rapids, Iowa 52404, and at any adjournment thereof, there to vote all
shares of stock of Murdock Communications Corporation which the undersigned
would be entitled to vote if personally present as specified upon the following
matter and in their discretion upon such other matters as may properly come
before the meeting.
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders and accompanying Proxy Statement, ratifies all that
said proxies or their substitutes may lawfully do by virtue hereof, and revokes
all former proxies.
Please sign exactly as your name appears hereon, date and return this Proxy.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO GRANT AUTHORITY TO
APPROVE AND ADOPT THE ARTICLES OF AMENDMENT. IF OTHER MATTERS COME BEFORE THE
MEETING, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BEST JUDGMENT OF THE
PROXIES APPOINTED.
DETACH BELOW AND RETURN USING THE ENVELOPE PROVIDED
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MURDOCK COMMUNICATIONS CORPORATION SPECIAL MEETING OF SHAREHOLDERS
<TABLE>
<S><C>
1. Approval and adoption of Articles of Amendment in the [ ] FOR [ ] AGAINST [ ] ABSTAIN
form attached as Appendix A to the Proxy Statement.
2. In their discretion, the Proxies are authorized to vote
upon such other matters as may properly come before the
meeting.
Address change? Date NO. OF SHARES
-----------------------
MARK BOX [ ]
Indicate changes
below:
[ ]
Signature(s) in Box
If signing as attorney, executor, administrator,
trustee or guardian, please add your full title
as such. If shares are held by two or more
persons, all holders must sign the Proxy.
</TABLE>
