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USARadio.com, Inc.
(Name of Registrant as Specified In Its Charter)
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USARadio.com, Inc.
Notice of 2001 Annual Meeting of Stockholders and
Information Statement
[LOGO]
[LOGO] USARadio.com, Inc.
2290 Springlake Road, Suite 107
Dallas, Texas 75234
972.484.3900
June 11, 2001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 29, 2001
USARadio.com will hold its Annual Meeting of Stockholders at the
company's principal executive offices located at 2290 Springlake
Road, Suite 107, in Dallas, Texas on Wednesday, June 29, 2001 at
10:00 a.m.
We are holding this meeting:
* To elect two directors to serve until the 2002 Annual
Meeting of Stockholders and until their respective
successors shall be elected and qualified.
* To approve an amendment to our Certificate of
Incorporation to change our name to "USA Radio Network,
Inc."
* To transact any other business that properly comes
before the meeting.
We have selected May 4, 2001 as the record date for determining
stockholders entitled to vote at the meeting. A list of
stockholders on that date has been available for inspection at
USARadio.com, Inc., 2290 Springlake Road, Suite 107, Dallas,
Texas 75234 since at least June 11, 2001.
All stockholders are cordially invited to attend the meeting and
vote in person.
This Notice of Annual Meeting, Information Statement and our 2000
Annual Report are being distributed to our stockholders on or
about June 11, 2001.
For the Board of Directors,
Marlin Maddoux
Chairman of the Board,
Chief Executive Officer
and President
IMPORTANT
---------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY
TABLE OF CONTENTS
Tab
---
QUESTIONS AND ANSWERS..................................... 1
INFORMATION STATEMENT FOR ANNUAL MEETING
OF STOCKHOLDERS................................. 2
ITEM 1. ELECTION OF DIRECTORS............................ 2
Your Board of Directors.............................. 2
Compensation of Directors............................ 3
Committees of the Board of Directors; Meetings....... 3
STOCK OWNERSHIP........................................... 3
Beneficial Ownership of Certain Stockholders
and Management ...................................... 3
Section 16(a) Beneficial Ownership Reporting
Compliance........................................... 4
MANAGEMENT................................................ 4
Executive Officers................................... 4
Key Management Employees............................. 4
Executive Compensation............................... 5
Stock Option Plan.................................... 5
Certain Transactions................................. 5
ITEM 2. AMENDMENT OF OUR CERTIFICATE OF INCORPORATION
TO CHANGE OUR NAME TO USA RADIO NETWORK, INC.... 6
i
QUESTIONS AND ANSWERS
Q1: Why is USARadio.com holding a meeting?
A: We are holding an Annual Meeting of Stockholders to
request that our stockholders consider and act upon two
proposals:
* a proposal to re-elect Marlin Maddoux and Mark
Maddoux to our board of directors; and
* a proposal to amend our Certificate of
Incorporation to change our name to "USA Radio
Network, Inc."
Q2: Why is USARadio.com not soliciting a proxy from me?
A: Our principal stockholder, the U.S.A. Radio Network
Trust, Marlin Maddoux, Trustee, has indicated its
intention to vote in favor of both of the proposals
expected to be brought at the Annual Meeting. Because
the Trust holds 13,136,720 shares, or approximately
97.2% of the issued and outstanding shares of common
stock of the company, the proposals will pass if the
Trust votes as expected. Consequently, we do not
believe that the solicitation of proxies is necessary.
Q3: May I still attend and vote at the Annual Meeting?
A: Absolutely. As a stockholder of USARadio.com you are
entitled and encouraged to attend the Annual Meeting
and vote upon the proposals.
Q4: Who can vote?
A: Only those who owned common stock at the close of
business on May 4, 2001, the record date for the Annual
Meeting, can vote. If you owned common stock on the
record date, you have one vote per share for each
matter presented at the Annual Meeting.
Q5: What constitutes a quorum?
A: Voting can take place at the Annual Meeting only if
stockholders owning one-third of the outstanding
shares as of the record date are present in person or
represented by effective proxies. On the record date,
we had 13,516,720 shares of common stock outstanding.
Q6: What vote of the stockholders will result in the
matters being passed?
A: Election of Directors. Directors need the affirmative
vote of holders of a plurality of the voting power
present to be elected. At this year's meeting, the
two nominees receiving the greatest number of votes in
favor of their election will be deemed to have received
a plurality of the voting power present.
Name Change. Approval of the amendment to our
Certificate of Incorporation to change our name to USA
Radio Network, Inc. requires an affirmative vote by a
majority of all the votes entitled to be cast, whether
or not those votes are present at the meeting.
Q7: How does the board recommend that I vote on the matters
proposed?
A: The board of directors of USARadio.com unanimously
recommends that stockholders attending the Annual
Meeting vote FOR both of the proposals submitted.
Q8: Will there be other matters proposed at the 2001
Annual Meeting?
We do not expect any other matter to come before the
Annual Meeting.
1
INFORMATION STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
This Information Statement is being distributed for use at
the Annual Meeting of Stockholders to be held June 29, 2001, at
10:00 a.m., local time, or at any and all continuation(s) or
adjournment(s) thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting. The Annual Meeting
will be held at our principal executive offices located at 2290
Springlake Road, Suite 107, Dallas, Texas 75234. The telephone
number at that location is 972.484.3900.
Proxies are not being solicited because a stockholder
holding enough shares to effect the proposed actions has
previously indicated its intention to vote in favor of such
proposals. Stockholders of USARadio.com do not have cumulative
voting rights.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT
TO SEND US A PROXY. However, if you wish to vote your shares of
common stock, you may do so by attending the meeting in person
and casting your vote by a ballot which will be provided for that
purpose.
ITEM 1.
ELECTION OF DIRECTORS
Your Board of Directors
The board of directors of USARadio.com has currently set the
number of directors constituting the whole board at two. At the
upcoming Annual Meeting, you and the other stockholders will
elect two individuals to serve as directors whose terms expire at
the 2002 Annual Meeting. Each of the nominees to the board,
namely Marlin Maddoux and Mark Maddoux, are acting members of the
board and have consented to serve if elected.
Below are the names and ages of the nominees for director,
the years they became directors, their principal occupations or
employment for at least the past five years and certain of their
other directorships, if any.
* Robert Marlin Maddoux Age 68, a director since December 1999.
Mr. Maddoux has been the Chief
Executive Officer and President of
USARadio.com, or a predecessor
entity, since 1985 and, during such
time, has been responsible for
substantially all of our day-to-day
affairs. Mr. Maddoux has hosted our
most popular radio program, Point of
View, since 1972. He also has served
as President and member of the board
of trustees of International
Christian Media, Inc., a non-profit
organization, since 1974. Mr. Maddoux
attended Southwestern Bible College
from 1951 to 1955 and Dallas Baptist
University from 1967 to 1968.
* Mark R. Maddoux Age 44, a director since December 1999.
Mark Maddoux has been employed by
USARadio.com, or a predecessor entity
since December 1985 and has served as
our Vice President, Corporate
Secretary and Chief Financial Officer
since December 1999. Mr Maddoux is
also the Chief Financial Officer of
International Christian Media.
Mr. Maddoux received a Bachelor's of
Science from Texas A&M University in
1979. Mr. Maddoux also serves as a
director of the Alliance Defense
Fund. Mr. Maddoux is the son of
Marlin Maddoux.
We intend to add additional qualified members to our board
of directors in the future.
2
Compensation of Directors
We do not provide cash compensation to our directors but do
reimburse our directors for reasonable out-of-pocket expenses
incurred in connection therewith. We intend to issue stock
options to our directors in the future.
Committees of the Board of Directors; Meetings
USARadio.com has no standing committees.
During the year ended December 31, 2000, the entire board of
directors of USARadio.com met one time and acted by unanimous
written consent on two other occasion. During fiscal 2000, each
director attended at least 75% of the total of all meetings of
the board of directors.
STOCK OWNERSHIP
Beneficial Ownership of Certain Stockholders and Management
The following table sets forth information with respect to
the beneficial ownership of our common stock at March 20, 2001,
by:
* each of our directors;
* each of our named executive officers;
* all of our executive officers and directors as a group;
and
* each person, or group of affiliated persons, known to us
to own beneficially more than 5% of our common stock.
Unless otherwise noted in the footnotes to the table and
subject to community property laws where applicable, the
following individuals have sole voting and investment control
with respect to the shares beneficially owned by them. The
address of each person and entity below is c/o USARadio.com,
Inc., 2290 Springdale Road, Suite 107, Dallas, Texas 75234. We
have calculated the percentages of shares beneficially owned
based on 13,516,720 shares of common stock outstanding at
March 20, 2001.
Shares beneficially
owned
----------------------
Person or group Number Percent
- ---------------------------------------- ---------- -----------
Directors and Named Executive Officers:
Robert Marlin Maddoux(1)(2)............. 13,136,720 97.2%
Mark R. Maddoux ........................ 0 0.0
All executive officers and directors as
a group (3 persons)..................... 13,136,720 97.2
Beneficial Owners of 5% or More of
Our Outstanding Common Stock:
U.S.A. Radio Network Trust (2).......... 13,136,720 97.2
___________
(1) Represents shares of common stock held by the U.S.A. Radio
Network Trust.
(2) Mr. Maddoux is the sole trustee of the U.S.A. Radio Network
Trust and he, his wife and their lineal descendants
(specifically, Mark R. Maddoux, J. David Maddoux, Timothy F.
Maddoux and Marla Renee Maddoux Kelley) are the
beneficiaries thereof.
3
Section 16(a) Beneficial Ownership Reporting Compliance
Under U.S. securities laws, directors, certain executive
officers and persons holding more than 10% of our common stock
must report their initial ownership of the common stock, and any
changes in that ownership, to the SEC. The SEC has designated
specific due dates for these reports. Based solely on our review
of copies of the reports filed with the SEC and written
representations of our directors and executive offers, we believe
that all persons subject to reporting filed the required reports
on time in 2000, other than U.S.A. Radio Network Trust and Robert
Marlin Maddoux, each of whom filed their Form 5 for fiscal 1999
late (and failed to file a Form 4 in fiscal 1999) to reflect the
issuance to U.S.A. Radio Network Trust of 12,286,720 shares of
common stock of the company in exchange for 2,900,000 shares of
USARadio.com, Inc., a Texas corporation ("USARadio-Texas"),
pursuant to the December 1999 merger of the company and USARadio-
Texas. (Robert Marlin Maddoux is the sole trustee of U.S.A.
Radio Network Trust.)
MANAGEMENT
Executive Officers
Below are the names and ages of the executive officers of
USARadio.com as of March 20, 2001 and a brief description of
their prior experience and qualifications.
* Robert Marlin Maddoux Age 68, a director since December 1999.
Mr. Maddoux is also our Chief
Executive Officer and President. See
the biography of Mr. Maddoux on page 2.
* Mark R. Maddoux Age 44, a director since December 1999.
Mr. Maddoux is also our Vice
President, Corporate Secretary and
Chief Financial Officer. See the
biography of Mr. Maddoux on page 2.
Key Management Employees
Below are the names and ages of certain key management
employees of USARadio.com as of March 20, 2001 and a brief
description of their prior experience and qualifications.
* Jeffery C. Dorf Age 52, National Marketing and Sales,
since March 1998.
As National Marketing and Sales
Director for USARadio.com, Mr. Dorf
manages a team of four national Sales
Executives who are responsible for
soliciting and managing national
advertising accounts. Mr. Dorf is
also responsible for the management
of USARadio.com's Trafficking
Department, which in turn is
responsible for the scheduling of all
commercial inventories. Prior to
joining us, Mr. Dorf served as
General Manager of Prime Sports Radio
Network and has held sales and
management positions with companies
such as radio station WBPS (Boston)
and Bruce Marr & Associates. Mr. Dorf
holds a Bachelor's degree in Business
Administration from the University of
Miami.
* Robert E. Morris II Age 54, News Director since January
2000.
As News Director, Mr. Morrison is
responsible for all news gathering
and news delivery operations.
Mr. Morrison manages a news staff of
approximately 15 news anchors and
producers. Mr. Morrison has been a
broadcast journalist for almost 33
years and has served in management at
numerous radio stations such as WFAA-
AM (Dallas), KRLD-AM (Dallas) and ABC
Radio Network (New York), RKO Radio
Network (Los Angeles). Mr. Morrison
also holds many coveted awards from
broadcast organizations such as Texas
Associated Press Broadcasters, United
Press International (UPI) and Radio-
Television News Directors
Association.
4
Executive Compensation
Summary compensation. The following table provides summary
information concerning compensation paid by us to our named
executive officers, which are our Chief Executive Officer and our
other executive officer who earned more than $100,000 in salary
and bonus for all services rendered in all capacities during the
fiscal year ended December 31, 2000. We may refer to these
officers as our named executive officers in other parts of this
Information Statement. Mr. Thomas R. Tradup resigned as our Vice
President and General Manager effective October 6, 2000. For a
list of our current executive officers, see "--Executive
Officers."
Annual Compensation
-------------------------------
Other Annual
Name and Position Salary Bonus Compensation
- ------------------------------- --------- ------ ------------
Robert Marlin Maddoux,
Chief Executive Officer and
President ................... $ 33,000 --- $9,859
Thomas R. Tradup,
Former Vice President and
General Manager.............. $141,923 --- --
The "Other Annual Compensation" for Mr. Robert Marlin
Maddoux represents a car allowance provided to him by the
company. Mr. Dorf, one of our key management employees, received
a salary of approximately $166,523 (including commissions) during
2000.
Stock options granted in the year ended December 31, 2000.
No stock options were granted to the named executive officers
during the year ended December 31, 2000.
Year-end option values. Neither of the named executive
officers exercised any stock options during the year ended
December 31, 2000 and neither of these individuals held any
options as of that date.
Stock Option Plan
We have not yet established a stock option plan. However, we
anticipate creating a stock option plan in the near future for
the purpose of promoting our objectives by using interests in our
common stock to attract, retain and motivate employees,
directors, officers and consultants, and to encourage such
persons' contributions to the performance of USARadio.com. We
expect that our plan will authorize the granting of stock options
exercisable for up to 20% of our issued and outstanding shares of
common stock.
Certain Transactions
Loans from Marlin Maddoux. We have had a history of losses
and negative cash flow. Therefore, although we have financed our
operations principally from operations, we have had the need to
supplement these funds with bank debt and stockholder loans.
Marlin Maddoux, our Chief Executive Officer and President, has
5
guaranteed a portion of our bank debt, although he has not
received a guarantee fee to do so. Further, Mr. Maddoux has been
the primary source for stockholder loans to the company. As of
December 31, 2000, we owed Mr. Maddoux a total of $181,651 of
which $63,594 is due September 1, 2004 and bears interest at 10%
per annum and the remaining $118,057 is due June 1, 2002 and
bears interest at 12% per annum. No assurances can be made that
Mr. Maddoux will continue to provide credit enhancements and/or
stockholder loans to us in the future.
Familial Relationships. We employ other persons related to
Marlin Maddoux, our Chief Executive Officer and President, and
Mark Maddoux, our Vice President, Corporate Secretary and Chief
Financial Officer. Specifically, Tim Maddoux, a Vice President
and our Assistant General Manager and J. David Maddoux, our
Director of Information Systems, are the sons of Marlin Maddoux
and the brothers of Mark Maddoux. These individuals received
annual compensation of approximately $92,252 and $78,365,
respectively, during 2000.
International Christian Media. We sell satellite time and
syndication services to International Christian Media ("ICM"), a
not-for-profit organization that produces our program Point of
View. Mr. Marlin Maddoux, our Chief Executive Officer and
President, is the President of ICM and also serves on its board
of trustees. Mr. Mark Maddoux, our Vice President, Corporate
Secretary and Chief Financial Officer, is the Chief Financial
Officer of ICM. Neither Mr. Marlin Maddoux, nor Mr. Mark Maddoux,
believe that their responsibilities with ICM interfere in any way
with their responsibilities to the company. From time to time,
we and ICM incur expenses on behalf of the other which are
subsequently reimbursed by the appropriate party. Further, we
sublease approximately 12,200 square feet of our executive
offices to ICM for their operations at a rate equal to or in
excess of the rate paid by us for such space. During the year
ended December 31, 2000, ICM incurred approximately $286,392 in
fees with us, representing approximately 8% of our total revenues
for the year. Of this amount, approximately none was more than
90 days past due at December 31, 2000. Any amounts more than 90
days past due incur a "carrying fee" of 1% per month.
We expect to continue to provide services to ICM in the
future.
ITEM 2.
AMENDMENT OF OUR CERTIFICATE OF INCORPORATION
TO CHANGE OUR NAME TO USA RADIO NETWORK, INC.
We are asking stockholders to approve an amendment to our
Certificate of Incorporation to change the name of the company
from USARadio.com, Inc. to "USA Radio Network, Inc." The Board of
Directors approved this amendment on May 4, 2001, subject to
approval by the stockholders. The Board of Directors believes
that our existing name "USARadio.com, Inc." may be too limiting
and that the proposed name "USA Radio Network, Inc." is more
descriptive of our business. The change in corporate name will
not affect the status of the company or the rights of any
stockholder in any respect, or the validity or transferability
of stock certificates presently outstanding. Stockholders will
not be required to exchange stock certificates to reflect the new
name. If a stockholder's shares of our common stock are
currently represented by a physical certificate, that certificate
will continue to represent such stockholder's ownership of such
shares, notwithstanding the change in the company's name.
Stockholders should keep the stock certificates they now hold,
which will continue to be valid, and should not send them to the
company or our transfer agent.
Approval of this amendment to our Certificate of
Incorporation will require the affirmative vote of the holders of
a majority of the outstanding shares of our common stock.
Your board of directors recommends that stockholders vote
"FOR" the amendment to the Certificate of Incorporation in order
to change our name to "USA Radio Network, Inc."
6
For the Board of Directors,
Marlin Maddoux,
Chairman of the Board,
Chief Executive Officer
and President
June 11, 2001
Dallas, Texas