<PAGE>
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
[ ] Confidential, for Use of the Commission (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
CellularVision USA, Inc.
(Name of Registrant as Specified In Its Charter)
CellularVision USA, Inc.
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: _______
2) Aggregate number of securities to which transaction applies: __________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction: _______________
5) Total fee paid: _____________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: ___________
2) Form, Schedule or Registration Statement No: _____________
3) Filing Party: ___________
4) Date Filed: ____________
<PAGE>
CELLULARVISION USA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 7, 1997
To the Stockholders of CellularVision USA, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of CellularVision USA, Inc., a Delaware corporation (the
"Company"), will be held at The Lotos Club, 5 East 66th Street, New York, New
York 10021, on Wednesday, May 7, 1997, at 10:00 a.m., Eastern daylight savings
time, or at any postponement or adjournment thereof for the following purposes:
1. To elect seven members to the Board of Directors of the
Company (the "Board") to serve until the next annual
meeting of stockholders to be held in 1998 (the "1998
Annual Meeting") or until their successors are duly
elected;
2. To appoint independent auditors of the Company for the
1997 fiscal year to serve until the 1998 Annual Meeting
or until their successors are duly elected; and
3. To act upon such other business as may properly come
before the Annual Meeting.
In accordance with the provisions of the Company's By-Laws, the Board
of Directors has fixed the close of business on March 24, 1997 as the record
date for the determination of the holders of Common Stock entitled to notice of,
and to vote at, the Annual Meeting.
To ensure that your shares are represented at the Annual Meeting, you
are urged to complete, sign, date and return the accompanying proxy card
promptly in the enclosed postage paid envelope. Please sign the accompanying
proxy card exactly as your name appears on your share certificate(s). You may
revoke your proxy at any time before it is voted at the Annual Meeting. If you
attend the Annual Meeting, you may vote your shares in person.
Your attention is directed to the accompanying Proxy Statement.
By Order of the Board of Directors
Shant S. Hovnanian
Chairman, President and
Chief Executive Officer
April 24, 1997
<PAGE>
CELLULARVISION USA, INC.
505 Park Avenue
New York, New York 10022
--------------------------
ANNUAL MEETING OF STOCKHOLDERS
May 7, 1997
--------------------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors (the "Board") of CellularVision
USA, Inc. ("CVUSA" or the "Company"), a Delaware corporation, to be voted at the
Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be held
at The Lotos Club, 5 East 66th Street, New York, New York 10021 on Wednesday,
May 7, 1997, at 10:00 a.m., Eastern daylight savings time, or at any
postponement or adjournment thereof. This Proxy Statement, the Notice of Annual
Meeting and the accompanying form of proxy are first being mailed to
stockholders on or about April 24, 1997.
Only holders of record of the Company's common stock, par value $.01
per share ("Common Stock"), at the close of business on March 24, 1997 (the
"Record Date"), are entitled to vote on the matters to be presented at the
Annual Meeting. The number of shares of Common Stock outstanding on such date
and entitled to vote was 16,000,000. Holders of Common Stock are entitled to one
vote on each matter to be voted upon by the stockholders at the Annual Meeting
for each share held.
At the Annual Meeting, stockholders will be asked to (1) elect seven
directors (the "Nominees") to the Board to serve until the next annual meeting
of stockholders of the Company to be held in 1998 (the "1998 Annual Meeting") or
until their successors are duly elected (the "Board Proposal") and (2) appoint
the firm of Coopers & Lybrand L.L.P., independent auditors, to serve as the
Company's independent auditors for the 1997 fiscal year until the 1998 Annual
Meeting (the "Independent Auditors Proposal"). At the Annual Meeting,
stockholders may also be asked to consider and take action with respect to such
other matters as may properly come before the Annual Meeting.
QUORUM AND VOTE REQUIREMENTS
The presence, in person or by proxy, of holders of record of a majority
of the shares of Common Stock issued and outstanding and entitled to vote is
required for a quorum to transact business at the Annual Meeting, but if a
quorum should not be present, the Annual Meeting may be adjourned from time to
time until a quorum is obtained. The Board Proposal and the Independent Auditors
Proposal will be determined by the affirmative vote of the holders of a majority
of the shares of Common Stock present, in person or by proxy, and entitled to
vote at the Annual Meeting. Broker "non-votes" (i.e., proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares as to a matter with
respect to which the brokers or nominees do not have discretionary power to
vote) and shares for which duly executed proxies have been received but with
respect to which holders of shares have abstained from voting will be treated as
present for purposes
<PAGE>
of determining the presence of a quorum at the Annual Meeting. Broker
"non-votes" are only counted for purposes of determining whether a quorum is
present and, therefore, will not be included in vote totals and will have no
effect on the outcome of the votes on the proposals to be acted upon at the
Annual Meeting. Abstentions will be counted as present and entitled to vote, and
will have the effect of a negative vote with respect to the proposals to be
acted upon at the Annual Meeting.
SOLICITATION AND REVOCATION
PROXIES IN THE FORM ENCLOSED ARE BEING SOLICITED BY, OR ON BEHALF OF,
THE BOARD. THE PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY HAVE BEEN
DESIGNATED AS PROXIES BY THE BOARD. Any stockholder desiring to appoint another
person to represent him or her at the Annual Meeting may do so either by
inserting such person's name in the blank space provided on the accompanying
form of proxy, or by completing another form of proxy and, in either case,
delivering an executed proxy to the Company's Chief Financial Officer at the
address indicated above, before the time of the Annual Meeting. It is the
responsibility of the stockholder appointing such other person to represent him
or her to inform such person of this appointment.
All Common Stock represented by properly executed proxies which are
returned and not revoked prior to the time of the Annual Meeting will be voted
in accordance with the instructions, if any, given thereon. If no instructions
are provided in an executed proxy, it will be voted (1) FOR the Board Proposal
and (2) FOR the Independent Auditors Proposal, and in accordance with the
proxyholder's best judgment as to any other business raised at the Annual
Meeting. If a stockholder appoints a person other than the persons named in the
enclosed form of proxy to represent him or her, such person will vote the shares
in respect of which he or she is appointed proxyholder in accordance with the
directions of the stockholder appointing him or her. Any stockholder who
executes a proxy may revoke it at any time before it is voted by delivering to
the Company a written statement revoking such proxy, by executing and delivering
a later dated proxy, or by voting in person at the Annual Meeting. Attendance at
the Annual Meeting by a stockholder who has executed and delivered a proxy to
the Company shall not in and of itself constitute a revocation of such proxy.
The Company will bear its own cost of the solicitation of proxies.
Proxies will be solicited initially by mail. Further solicitation may be made by
directors, officers and employees of the Company personally, by telephone or
otherwise, but such persons will not be specifically compensated for such
services. The Company also intends to make, through bankers, brokers or other
persons, a solicitation of proxies of beneficial holders of the Common Stock.
Upon request, the Company will reimburse brokers, dealers, banks or similar
entities acting as nominees for reasonable expenses incurred in forwarding
copies of the proxy materials relating to the Annual Meeting to the beneficial
owners of Common Stock which such persons hold of record.
2
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The table below sets forth the names, ages and titles of the persons
who were directors of the Company and executive officers of the Company as of
April 1, 1997.
<TABLE>
<CAPTION>
Name Age Position
- ------------------------------------------------- ------- ----------------------------------------------------
<S> <C> <C>
Shant S. Hovnanian........................ 37 Chairman of the Board of Directors, President and
Chief Executive Officer
Bernard B. Bossard........................ 62 Executive Vice President, Chief Technical Officer
and Director
Charles N. Garber......................... 49 Chief Financial Officer, CVUSA and Vice
President-Finance, CellularVision of New York,
L.P. ("CVNY")
John G. Walber............................ 40 Vice President, CVUSA and President and Chief
Operating Officer, CVNY
Vahak S. Hovnanian........................ 65 Director
Roy H. March.............................. 40 Director
Bruce G. McNeill.......................... 59 Director
Matthew J. Rinaldo........................ 65 Director
Dennis G. Spickler........................ 45 Director
</TABLE>
Shant S. Hovnanian has served as Chairman of the Board of Directors,
President and Chief Executive Officer of the Company since October 1995. He
has also served as Chief Executive Officer and a member of the Board of
Representatives of CVNY since its formation in July 1993. Mr. Hovnanian
formerly served as Chief Executive Officer of CellularVision Technology &
Telecommunications, L.P. ("CT&T") from 1993 to 1995 and continues to serve
on its Board of Representatives. Mr. Hovnanian has served as a principal of
Suite 12 Group ("Suite 12") and Hye Crest Management, Inc. ("Hye Crest")
since 1986 and 1988, respectively. From June 1980 until January 1991, Mr.
Hovnanian served as Executive Vice President of the V. S. Hovnanian Group (the
"Hovnanian Group"), consisting of home building (including cable
television and satellite master antenna television ("SMATV") operations),
real estate development and utility companies. In addition, Mr. Hovnanian
served in 1995 as a U.S. Delegate to the World Radio Conference of the
International Telecommunications Union in Geneva, Switzerland. Mr.
Hovnanian is the son of Mr. Vahak S. Hovnanian.
Bernard B. Bossard has served as Executive Vice President, Chief
Technical Officer and Director of the Company since October 1995, and has served
as the Chief Engineering Officer of CVNY since July 1993. Mr. Bossard is also an
officer and member of the Board of Representatives of CT&T. He previously served
as Senior Vice President and group publisher of three periodicals in the
microwave, electronic and communications industries from 1977 to 1990. Mr.
Bossard has served as a principal of Suite 12 and Hye Crest since 1986 and 1988,
respectively. For the past 35 years, he has been involved in research,
development and manufacturing of microwave communication, low-noise receivers
and microwave transistors. Mr. Bossard was a research group leader of RCA
Communications, president of National Electric Laboratories ("NEL"), president
of KMC Semiconductor Corporation (merged with NEL in 1970) ("KMC"), and general
manager of KMC after its purchase by M/A Com, Inc., in 1973. He holds seven
patents and has many patents pending.
3
<PAGE>
Charles N. Garber has served as Chief Financial Officer of the Company
and Vice President--Finance of CVNY since July 1996. Mr. Garber served as Senior
Vice President--Corporate Planning & Strategic Development of ICS Communications
("ICS"), a SMATV cable television service and telecommunications services
provider, from December 1994 through April 1996. Prior to joining ICS, Mr.
Garber served as President of Garber & Associates, providing financial
consulting services to the telecommunications and consumer products
manufacturing industries, from August 1993 to November 1994. From July 1991 to
July 1993, Mr. Garber served as Senior Vice President--Controller and head of
Corporate Development of Cincinnati Bell Inc., a telecommunications and
information services provider. Prior thereto, Mr. Garber held numerous
management positions within the telecommunications industry including Senior
Vice President--Treasurer & Controller of Cincinnati Bell Inc.,
Treasurer--BellSouth Capital Funding, Assistant Treasurer--Corporate Finance of
BellSouth Corporation, Senior Financial Manager--Mergers & Acquisitions of
BellSouth Corporation, District Manager of AT&T and several operating management
positions in the Engineering Department of Bell Atlantic subsidiaries.
John G. Walber has served as Vice President of the Company and as
President and Chief Operating Officer of CVNY, since January 1, 1996. Mr. Walber
served as Vice President, Telco Sales and Program Management, and Regional Sales
Manager of the Communications Division of General Instrument, a provider of
cable and satellite television equipment, from June 1990 to December 1995. From
July 1986 through June 1990, Mr. Walber served as General Manager and Director,
Customer Service, of Continental Cablevision.
Vahak S. Hovnanian has served as a Director of the Company since
October 1995 and as a member of the Board of Representatives of CVNY and CT&T
since July 1993. Mr. Hovnanian has served as a principal of Suite 12 and Hye
Crest since 1986 and 1988, respectively and as Chairman of the Board and
President of the Hovnanian Group since 1968. Mr. Hovnanian is the father of
Mr. Shant S. Hovnanian.
Bruce G. McNeill has served as a Director of the Company since
February 1996. Mr. McNeill has been a partner at the law firm of Tarlow,
Breed, Hart, Murphy & Rodgers, P.C. since 1994, where he was formerly of
counsel since 1966. Mr. McNeill was also a faculty member of the New England
School of Law from 1973 until 1994.
Roy H. March has served as a Director of the Company since February
1996. Mr. March has served as President of Eastdil Realty Company, L.L.C.
("Eastdil"), an investment bank specializing in real estate finance and
acquisition transactions, since 1994. Prior thereto, Mr. March served Eastdil
in various other executive positions.
Matthew J. Rinaldo has served as a Director of the Company since
February 1996. Mr. Rinaldo has served as President of International
CellularVision Association ("ICVA"), a Local Multipoint Distribution Service
("LMDS") trade association, whose members include other operators and
prospective operators of, and investors in, LMDS systems throughout the world,
since 1993, and Chairman of the Advanced Telecommunications Institute of the
Stevens Institute of Technology from 1993 to 1996. Prior thereto, he served in
the U.S. House of Representatives since 1973 as a member of the New Jersey
Congressional delegation, where he served as ranking Republican member of the
Telecommunications and Finance Subcommittee of the House Energy and Commerce
Committee. Congressman Rinaldo has been the recipient of numerous honors and
awards.
4
<PAGE>
Dennis G. Spickler has served as a Director of the Company since
February 1996. Mr. Spickler has served since September 1996 as Vice President
and Chief Financial Officer of General Wireless, Inc., a provider of wireless
telecommunications services. From April 1995 to September 1996, he served as
Vice President and Chief Financial and Information Technology Officer of PrimeCo
Personal Communications, L.P., a partnership comprised of three Regional Bell
Operating Companies ("RBOCs") and AirTouch Communications, Inc., which provides
PCS wireless telecommunications services. From April 1991 to March 1995, he was
Managing Director, Mergers and Acquisitions, of Bell Atlantic Corporation, the
RBOC serving the Mid-Atlantic region. From 1986 to 1991, Mr. Spickler was Vice
President-Financial Operations of a subsidiary of Bell Atlantic Corporation
("Bell Atlantic"), a stockholder of the Company. From 1973 to 1986, Mr. Spickler
was engaged in public accounting, principally for Coopers & Lybrand L.L.P.,
where he specialized in serving a variety of telecommunications clients.
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
MANAGEMENT AND DIRECTORS
The following table sets forth information as of April 1, 1997 with
respect to the beneficial ownership of the Common Stock by (i) each person known
by the Company to be the beneficial owner of more than five percent of the
Common Stock; (ii) each person serving as a director of the Company; (iii) the
Company's Chief Executive Officer and each of the three remaining most highly
compensated executive officers (collectively, the "Named Executive Officers")
and (iv) all executive officers and directors of the Company as a group. Unless
otherwise indicated, all shares are owned directly and the indicated owner has
sole voting and dispositive power with respect thereto.
<TABLE>
<CAPTION>
Common Stock Beneficially
Owned(1)
----------------------------------
Beneficial Owner Number Percent
---------------------------------------------- ---------------- --------------
<S> <C> <C>
Shant S. Hovnanian(2)........................ 3,799,154 23.7%
Bernard B. Bossard(2)........................ 3,632,655 22.7
Charles N. Garber(3)......................... 46,667 *
John G. Walber(4)............................ 31,500 *
Vahak S. Hovnanian(2)(5)..................... 3,632,655 22.7
Roy H. March(6).............................. 3,500 *
Bruce G. McNeill(6).......................... 3,500 *
Matthew J. Rinaldo(7)........................ 4,500 *
Dennis G. Spickler(6)........................ 3,500 *
All Directors and Executive Officers as a
group (total 9 persons).................. 11,157,631 69.7%
---------
* Less than 1% of the outstanding Common Stock
</TABLE>
(1) Pursuant to the regulations of the Securities and Exchange Commission
(the "Commission"), shares are deemed to be "beneficially owned" by a
person if such person directly or indirectly has or shares (i) the power
to vote or dispose of such shares, whether or not such person has any
pecuniary interest in such shares, or (ii) the right to acquire the power
to vote or dispose of such shares within 60 days, including any right to
acquire through the exercise of any option, warrant or right.
(2) Includes 52,678 shares of the 158,033 shares of Common Stock owned of
record by Suite 12. The Founders hold equally all of the outstanding
partnership interests of Suite 12.
(3) Includes options ("Options") to purchase 41,667 shares of Common Stock
pursuant to the Company's 1995 Stock Incentive Plan which are fully
vested and presently exercisable.
(4) Includes Options to purchase 25,000 shares of Common Stock pursuant to
the Company's 1995 Stock Incentive Plan which are fully vested and
presently exercisable.
(5) Includes 55,431 and 22,175 shares of Common Stock which Mr. Vahak S.
Hovnanian is required to sell upon the exercise of outstanding warrants
at a per share exercise price of $13.16 and $11.28, respectively.
6
<PAGE>
(6) Comprised entirely of Options to purchase shares of Common Stock pursuant
to the Company's 1995 Stock Incentive Plan which are fully vested and
presently exercisable, of which Options to purchase 1,000 shares of
Common Stock will be automatically granted upon election to the Board at
the Annual Meeting.
(7) Includes Options to purchase 3,500 shares of Common Stock pursuant to the
Company's 1995 Stock Incentive Plan which are fully vested and presently
exercisable, of which Options to purchase 1,000 shares of Common Stock
will be automatically granted upon election to the Board at the Annual
Meeting.
Stockholders Agreement. Shant S. Hovnanian, Bernard B. Bossard and
Vahak S. Hovnanian (collectively, the "Founders"), who in the aggregate
beneficially own 69.1% of the Company's outstanding shares of Common Stock, have
entered into a Stockholders Agreement (the "Stockholders Agreement") pursuant to
which the parties thereto will vote to elect to the Board each Founder, so long
as such Founder owns 5% or more of the shares of Common Stock outstanding on a
fully diluted basis. Bell Atlantic also has the right to appoint one director
(the "Bell Atlantic Nominee") to the Board, so long as Bell Atlantic shall hold
at least 1% of the shares of Common Stock outstanding on a fully diluted basis.
The parties to the Stockholders Agreement have also agreed not to vote to remove
any Founder or the Bell Atlantic Nominee so elected except for "cause" as
defined in Section 141 of the Delaware General Corporation Law.
7
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Formation; The Incorporation Transactions. In connection with the
formation and capitalization of CVNY in July 1993, CVNY issued 100,000
partnership interests as follows: (i) 91,313 managing general partnership
interests were issued to Hye Crest in connection with the contribution of the
Company's commercial license granted by the Federal Communications Commission
("FCC") and certain other assets; (ii) 4,999 non-managing general partnership
interests were issued to Bell Atlantic in consideration for a capital
contribution in the amount of approximately $10,000,000; and (iii) 3,688 limited
partnership interests were issued to Suite 12 in connection with the
contribution of the Company's experimental license and certain other assets.
Suite 12 is wholly owned by the Founders.
In October 1993, Suite 12 sold 2,500 of its limited partnership
interests in CVNY to a subsidiary of Philips Electronics North America
Corporation ("Philips") for an aggregate purchase price of approximately $5
million.
In December 1993, the Company issued $15 million principal amount of
convertible exchangeable subordinated notes (the "Morgan Notes") to certain
investment funds managed by affiliates of J.P. Morgan & Co. ("Morgan" and
together with Bell Atlantic and Philips, the "Corporate Investors"). In
connection with the issuance of the Morgan Notes, the Company redeemed 6,820
partnership interests from Hye Crest and distributed $3.0 million of the gross
proceeds on a pro rata basis to the Founders. From 1992 through 1995, the
Founders received an aggregate of $4.0 million, inclusive of the foregoing $3
million, as distributions from CVNY funded by investments made by certain of the
Corporate Investors, and other distributions from Hye Crest totaling $283,000.
In February 1996, the Company consummated the following transactions
(collectively, the "Incorporation Transactions"): (i) $10 million principal
amount of the Morgan Notes was converted into 4,547 shares of Common Stock and
$5 million principal amount, together with interest accrued thereon as of
December 15, 1995, was exchanged for non-convertible debt securities of the
Company, (ii) the Company issued an aggregate of 93,180 shares of Common Stock
to the Founders in exchange for all outstanding capital stock of Hye Crest, and
to Bell Atlantic, Suite 12 and Philips in exchange for all of their respective
partnership interests in CVNY, and (iii) the Company effected a
133.0236284-for-1 stock split of the outstanding shares of Common Stock and
issued an aggregate of 13,000,000 shares of Common Stock to the holders thereof.
As a result of the consummation of the Incorporation Transactions, the Company
is the sole stockholder of Hye Crest, and CVNY is a wholly-owned subsidiary of
the Company which continues to carry on its business. In December 1995, the FCC
approved the pro forma transfer of control of Hye Crest from the Founders to the
Company. In 1996, the name of Hye Crest was changed to CellularVision Capital
Corporation.
CT&T. CT&T holds the patent for the architectural innovations of the
Company's multichannel broadband cellular television system that made
non-satellite uses of the 28 GHz spectrum possible. CT&T was formed by the
Founders and Philips in 1993 to license this patent and develop, acquire and
license this technology worldwide. CT&T is owned as follows: the Founders own an
aggregate of 80% of the outstanding equity interests and Philips owns the
remaining 20% of the outstanding equity interests. The Company does not have an
ownership interest in CT&T, nor does CT&T have an ownership interest in the
Company.
8
<PAGE>
CT&T License Agreement. In July 1993, CVNY entered into a license
agreement (the "CT&T License Agreement") with CT&T for use of certain patented
technologies owned by CT&T and for CT&T know-how related to the LMDS technology.
Pursuant to the CT&T License Agreement, CT&T has licensed its proprietary LMDS
technology to CVNY to permit the Company to construct and operate its
multichannel broadband cellular television system and sell communications
services using the intellectual property rights owned by CT&T (including the
"CellularVision TM SM" name and mark) on an exclusive basis for the New York
Primary Metropolitan Statistical Area ("PMSA") and the entire New York Basic
Trading Area ("BTA") (to the extent the Company holds or obtains a commercial
license from the FCC). CT&T has also agreed to license the LMDS technology to
the Company in other BTAs in which the Company obtains LMDS licenses from the
FCC. The economic terms and conditions of such licenses will be, in the
aggregate, at least as favorable as the terms of any other license granted to
another party by CT&T within the United States. Under the CT&T License
Agreement, the Company pays CT&T a royalty currently equal to 7.5% of gross
revenues on a quarterly basis, subject to certain offsets as described below.
See "--Joint Funding of Certain Expenses." The license will remain in effect
until either the expiration, revocation or invalidation of CT&T patent rights
directly related to the operation of the Company's system, or the year 2028. The
license fees were $149,000 for the year ended December 31, 1996.
The Company has also granted CT&T an exclusive, royalty-free license to
use any improvements the Company makes in the licensed technology. CT&T has the
right to sublicense its rights under the agreement with Philips Electronics N.V.
and its affiliates and the unrestricted right to sublicense its rights outside
the Company's service area to other parties. CT&T has also granted CVNY a
non-exclusive, royalty-free sublicense within the Company's licensed territory
for certain patents and know-how owned or controlled by Philips. The royalty
rate payable to CT&T may be reduced by operation of the above-mentioned "most
favored nation" clause, and is also subject to reduction in the event of
expiration, revocation or invalidation of certain CT&T patent rights.
Under the CT&T License Agreement, the Company's ability to procure
capital equipment relating to its system from sources other than CT&T had been
limited. Pursuant to an amendment dated January 12, 1996, subject to certain
conditions and except for outstanding purchase orders, CVNY is under no
obligation to continue to purchase equipment or supplies from CT&T, although it
may continue to do so. The total amount of such equipment purchased from CT&T
for the year ended December 31, 1996 was $6,198,000. CT&T entered into certain
purchase commitments during 1996 on behalf of CVNY for the manufacture of
antennas, receivers, modems and transmitters, and CVNY intends to fulfill the
remaining obligations under these commitments which totaled approximately $11.6
million, net of deposits of $3.4 million, at December 31, 1996. Over 83% of the
deposits are covered by a pledge agreement which collateralizes CT&T's security
interest in equipment ordered from its vendors.
Joint Funding of Certain Expenses. Prior to the Incorporation
Transactions, because of the common interest of the Company and CT&T in the
outcome of the FCC's LMDS rulemaking proceeding, the Company and CT&T had shared
equally the fees and disbursements of joint FCC counsel, and the Company had
paid certain general and administrative expenses which were shared equally with,
and subsequently billed to, CT&T. Following the Incorporation Transactions,
there were no such payments as the Company and CT&T now pay their own
expenditures. In addition, joint use costs which resulted in
9
<PAGE>
benefits to both parties (e.g., salaries and benefits for the limited personnel
performing functions for both entities, office rent and related expenses, office
equipment and supplies) were allocated to the respective parties on a
cost-causative basis.
As of December 31, 1996, the Company had an amount due from CT&T of
approximately $760,000, which represents the Company's allocation of costs to
CT&T, net of royalties. The Company and CT&T have agreed, as of the consummation
of the Incorporation Transactions, to apply royalties over and above $80,000 in
each calendar year otherwise due to CT&T to the outstanding amounts due from
CT&T, which will bear interest from and after such date at the rate of 6% per
annum. Effective upon the consummation of the Incorporation Transactions in
February 1996, the Company assumed all ongoing legal expenses of FCC counsel in
recognition of the potential scope of the Company's operations outside the New
York BTA.
Reserved Channel Rights Agreement. The Founders or their affiliates are
parties to an agreement with CVNY pursuant to which they have the right to
require CVNY to make available 60 MHz of continuous spectrum per polarization in
the spectrum awarded to CVNY by the FCC for the purpose of providing any
programming (other than telephony, two-way voice or data communications
services) developed by the Founders or their affiliates.
International CellularVision Association ("ICVA"). The Company has
entered into an agreement with ICVA, whose members include other operators and
prospective operators of, and investors in, LMDS systems throughout the world,
to fund, along with all members of ICVA, operating expenses of ICVA. The Company
has also agreed to provide residual funding needs, if any. The Company funded a
total of $286,934 of ICVA operating expenses in 1996. The Company also subleases
certain office space for ICVA on a month-to-month basis. As of December 31,
1996, the monthly charge was $2,884. Congressman Rinaldo, a director of the
Company, serves as President of ICVA at an annual salary of $200,000.
10
<PAGE>
BOARD OF DIRECTORS; BOARD COMMITTEES
Board of Directors Meetings; Board Committee Meetings
During 1996, the Board met five times; the Nominating Committee did not
meet; the Audit Committee met once; and the Compensation Committee met two
times. Each of the Company's Directors attended at least 75% of the total number
of meetings of the Board and Committees on which he served during 1996.
Nominating Committee
The Nominating Committee of the Board, which consists of Shant S.
Hovnanian, Bernard B. Bossard and Vahak S. Hovnanian, identifies and submits on
an annual basis to the full Board nominees to be placed on the ballot for
election to the Board at each annual meeting of stockholders. The Nominating
Committee will consider suggested nominees to be placed on the ballot for
election to the Board at each annual meeting of stockholders in accordance with
applicable rules and regulations promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Such rules and regulations provide
that the Company is not required to include a stockholder proposal in its proxy
materials unless it is received by a specified date. Accordingly, all
recommended nominations to be placed on the ballot for election to the Board at
the 1998 Annual Meeting of Stockholders must be in writing and must be received
by the Company on or before its close of business on December 26, 1997.
Audit Committee
The Audit Committee of the Board, which presently consists of Bruce G.
McNeill, Dennis G. Spickler and Vahak S. Hovnanian (effective February 25,
1997), provides oversight of the Company's financial reporting process, reviews
the services provided by the Company's independent auditors, consults with such
auditors on audits and proposed audits, reviews the need for internal auditing
procedures and assesses the adequacy of internal controls. During 1996, the
Audit Committee consisted of Mr. McNeill, Mr. Spickler and Mr. Shant S.
Hovnanian.
Compensation Committee; Compensation Committee Interlocks and Insider
Participation
The Compensation Committee of the Board, which presently
consists of Roy H. March and Congressman Matthew J. Rinaldo (effective
February 25, 1997), establishes, reviews and approves compensation programs
of the Company generally, and approves salaries and bonuses for officers and
certain other salaried employees of the Company. In addition, the
Compensation Committee administers the Company's 1995 Stock Incentive Plan
and determines which eligible employees and consultants of the Company may
participate in the Plan and the type, extent and terms of the equity-based
awards to be granted to them. During 1996, the Compensation Committee
consisted of Mr. William E. James, Mr. March and Mr. Peter Alan Rinfret. Mr.
Rinfret and Mr. James served as directors of the Company until January 1997 and
March 1997, respectively.
The Founders serve as directors and, in some cases, as executive
officers, of both the Company, CT&T and related entities. In addition, Vahak
S. Hovnanian, a director of the Company, serves as an officer and a director
of the companies comprising the Hovnanian Group. Congressman Rinaldo, a
director of the Company, serves as President of ICVA. See "Certain
Relationships and Related Transactions."
11
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance
Under the Exchange Act, the Company's directors and executive officers,
and any persons holding more than 10% of the outstanding Common Stock are
required to report their initial ownership of Common Stock and any subsequent
changes in that ownership to the Commission. Specific due dates for these
reports have been established by the Commission, and the Company is required to
disclose in this Proxy Statement any failure by such persons to file these
reports in a timely manner during the 1996 fiscal year. Based solely upon the
Company's review of copies of such reports furnished to it, the Company believes
that during the 1996 fiscal year its executive officers and directors and the
holders of more than 10% of the outstanding Common Stock complied with all
reporting requirements of Section 16(a) under the Exchange Act with the
following exceptions: Mr. Garber did not timely file a Statement of Initial
Beneficial Ownership on Form 3 in connection with his appointment as an
executive officer of the Company and a Statement of Changes in Beneficial
Ownership on Form 4 ("Form 4") in connection with an open-market purchase of
Common Stock, and Mr. Walber and Congressman Rinaldo each did not timely file a
Form 4 in connection with their respective open-market purchases of Common
Stock.
12
<PAGE>
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
Executive Compensation Policy. The Company's compensation policy for
all of its executive officers is formulated and administered by the Compensation
Committee of the Board. The Compensation Committee also administers the
Company's 1995 Stock Incentive Plan, under which the Compensation Committee
periodically grants Options to the executive officers and other employees of the
Company. In 1996, determination of the individuals to be granted Options and the
exercise prices, vesting provisions and other terms of Options granted under the
Plan were at the sole discretion of the Compensation Committee. Prior to the
initial public offering of the Company's Common Stock in February 1996 (the
"Initial Public Offering"), all matters concerning executive officer
compensation were addressed by the entire Board of Representatives of CVNY.
The primary goals of the Company's compensation policy are to attract,
retain and motivate skilled executive officers and to incent them to act in the
best interests of the Company's stockholders. In determining the level of
executive compensation, certain quantitative and qualitative factors, including,
but not limited to, the Company's operating and financial performance, the
individual's level of responsibilities, experience, commitment, leadership and
accomplishments relative to stated objectives, and marketplace conditions are
taken into consideration.
Chief Executive Officer's Compensation. For 1996, the compensation of
Shant S. Hovnanian, the Chief Executive Officer of the Company, was set by the
terms of his employment agreement. A summary of the key provisions of Mr.
Hovnanian's employment agreement is included elsewhere in this Proxy Statement.
See "--Employment Agreements." In negotiating the terms of Mr. Hovnanian's
employment agreement, the Compensation Committee took into consideration Mr.
Hovnanian's significant role in establishing CVUSA as the leader of an emerging
new industry, and marketplace conditions. Mr. Hovnanian also participates in
benefit programs that are generally available to employees of the Company,
including medical benefits and a 401(k) savings plan. Mr. Hovnanian has not
participated in the Company's 1995 Stock Incentive Plan to date; however, he may
be granted Options from time to time in the future at the discretion of the
Compensation Committee.
Executive Officer Compensation. The Company has entered into employment
agreements with Bernard B. Bossard, Charles N. Garber and John G. Walber.
Summaries of the key provisions of these employment agreements are included
elsewhere in this Proxy Statement. See "--Employment Agreements." For the year
ended December 31, 1996, compensation paid to the executive officers of the
Company was determined primarily pursuant to the terms of the employment
agreements negotiated by the Company with the executives. For discretionary
compensation paid to executive officers that is not set by employment
agreements, the Compensation Committee made subjective determinations on a
case-by-case basis based on recommendations of the Chief Executive Officer as to
each executive's merit and contribution to the success of the Company.
Section 162(m) of the Code. Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code"), generally limits to $1 million the
deductibility by the Company of compensation paid in any one year to any
executive officer named in the Summary Compensation Table below. Compensation
attributable to awards issued pursuant to the Company's Stock Incentive Plan is
currently exempt from the
13
<PAGE>
limits of Section 162(m) because the Plan was adopted prior to the time of the
Initial Public Offering. As none of the executive officers of the Company are
currently paid compensation in excess of $1 million, the Company has not yet
developed a policy with respect to Section 162(m) of the Code.
Roy H. March
Matthew J. Rinaldo
Performance Graph
The following graph compares the cumulative return on the Common Stock
from February 8, 1996, the first day of trading of the Common Stock on the
Nasdaq National Market (the "NNM"), to December 31, 1996 with such return for
the NNM Index and an industry peer group (the "Peer Group"). The Peer Group
consists of eleven companies engaged in the provision of telecommunications,
direct broadcast satellite, cable television and wireless cable services
determined by the Company to have similar industry characteristics as the
Company and to provide types of services similar to those presently offered by
the Company and consistent with expected future applications of the Company's
LMDS technology. See Note 2 below. The performance graph assumes (i) $100 was
invested on February 8, 1996 and (ii) reinvestment of dividends. Each
measurement point on the graph below represents the cumulative stockholder
return as measured by the last sale price at the end of each period during the
period from February 8, 1996 through December 31, 1996. As depicted in the graph
below, during this period, the cumulative total return (1) for the Common Stock
was (54.1)%, (2) for the NNM Index was 18.1% and (3) for the Peer Group was
(39.8)%.
Comparison of Cumulative Total Return
[GRAPHIC OMITTED]
Date NNM Peer Group CVUSA
-------- ------- -------------- ---------
02/08/96 $100.00 $100.00 $100.00
03/29/96 100.75 98.09 72.13
06/28/96 108.40 106.50 103.28
09/30/96 112.23 86.97 65.57
12/31/96 118.10 60.21 45.90
04/18/97 111.83 38.33 60.66
- ----------
(1) Represents February 8, 1996, the first day of trading of the Common Stock
on the NNM following the Initial Public Offering for which the initial
price to the public was $15.00 per share.
(2) The Peer Group consists of the following companies: American Telecasting
Inc., CAI Wireless Systems, Inc., Cox Communications, Inc., Cablevision
Systems, Inc., EchoStar Communications Corporation, Heartland Wireless
Communications, Inc., ICG Communications, Inc., People's Choice TV Corp.,
U.S. Satellite Broadcasting, Wireless One, Inc. and Winstar Communications,
Inc.
14
<PAGE>
Executive Compensation
The following table shows, for the fiscal years ended December 31,
1996, 1995 and 1994, the cash compensation paid by the Company and its
subsidiaries, as well as certain other compensation paid or accrued for those
years, to each of the most highly compensated executive officers of the Company
in 1996 (the "Named Executive Officers") in all capacities in which they served.
<TABLE>
<CAPTION>
Summary Compensation Table
Annual Compensation
-----------------------------
Other
Annual Securities All Other
Compen- Underlying Compen-
Name and Principal Position Year Salary Bonus sation Options(#) sation
- ----------------------------------- ------ -------- ------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Shant S. Hovnanian(1).............................. 1996 $250,000 $ -- $ -- -- $ --
Chairman of the Board of 1995 230,000 -- -- -- --
Directors, President and Chief 1994 230,000 -- -- -- --
Executive Officer
Bernard B. Bossard(1)(2)........................... 1996 $170,000 $ -- $55,185 -- $ --
Executive Vice President and Chief 1995 150,000 -- 43,900 -- --
Technical Officer 1994 150,000 -- -- -- --
Charles N. Garber (3).............................. 1996 $ 80,208 $ 72,917 $ -- 50,000 $ 50,000
Chief Financial Officer, CVUSA and Vice
President-Finance, CVNY
John G. Walber(4).................................. 1996 $165,000 $ 110,000 $ -- 30,000 $ --
Vice President, CVUSA and President and Chief
Operating Officer, CVNY
</TABLE>
- -----------
(1) The foregoing table does not reflect (i) $1,015 received annually by each
of Shant S. Hovnanian and Bernard B. Bossard from CT&T, which amount
represents their respective shares of royalty payments made by CVNY to
CT&T under the CT&T License Agreement, and (ii) guaranteed minimum annual
royalty payments of $80,000 paid annually by CT&T to Mr. Bossard, which
were formerly funded by CVNY pursuant to an arrangement which was
terminated upon consummation of the Incorporation Transactions. See
"Certain Relationships and Related Transactions." The amounts set forth
below "Salary" consist of $130,000 and $50,000 paid to Shant S. Hovnanian
and Bernard B. Bossard, respectively, for consulting services and $100,000
paid to each of Shant S. Hovnanian and Bernard B. Bossard as fees in
connection with services rendered as members of the Board of
Representatives of CVNY for 1995 and 1994.
(2) Mr. Bossard's employment agreement provides for a leased automobile for
Mr. Bossard and the use of the Company's New York City apartment. For
1996, the cost to the Company for the apartment was $48,700 and the cost
of the automobile (including insurance) was $6,485.
15
<PAGE>
(3) Mr. Garber commenced employment with the Company in July 1996. The amount
set forth below "All Other Compensation" represents a relocation
assistance payment pursuant to Mr. Garber's employment agreement with the
Company. See "--Employment Agreements."
(4) Mr. Walber commenced employment with the Company in January 1996. The
amount set forth below "Bonus" represents a bonus of $50,000 and two
bonus payments of $30,000 each related to Mr. Walber's signing bonus and
the payment of a like amount due upon the consummation of the Initial
Public Offering pursuant to Mr. Walber's employment agreement with the
Company. See "--Employment Agreements."
In addition, in 1996 the Company incurred fees in the amount of $163,000
in respect of services provided by a legal consultant who is not an officer of
the Company and granted Options to purchase an aggregate of 35,000 shares of
Common Stock under the Company's 1995 Stock Incentive Plan at exercise prices
per share ranging from $9.875 to $12.50 for services rendered in 1996. Of such
Options, Options to purchase an aggregate of 28,333 shares of Common Stock
became vested and exercisable on August 1, 1996 and Options to purchase an
aggregate of 3,334 shares of Common Stock became vested and exercisable on April
1, 1997. The remaining Options to purchase 3,333 shares of Common Stock become
vested and exercisable on April 1, 1998.
Stock Option Grants Table
The following table sets forth information concerning individual grants
of options to purchase Common Stock made to Named Executive Officers during
1996.
<TABLE>
<CAPTION>
Number of Potential Realizable
Securities % of Total Value at Assumed
Underlying Options Exercise Annual Rates of Stock
Options Granted to or Base Expiration Price Appreciation for
Name Granted Employees Price Date Option Term
- ----- ----------- ---------- --------- ----------- -----------------------------
5% 10%
------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shant S. Hovnanian...... 0 0% $ -- -- -- --
Bernard B. Bossard...... 0 0 -- -- -- --
Charles N. Garber....... 25,000 17.4 10.50 07/31/06 165,085 418,357
25,000 17.4 9.875 08/01/06 155,258 393,455
John G. Walber.......... 15,000 10.4 15.00 01/01/06 141,501 358,592
15,000 10.4 9.875 08/01/06 93,155 236,073
</TABLE>
16
<PAGE>
Aggregate Stock Option Exercise Table
The following table sets forth information regarding the exercise of
Options by Named Executive Officers during 1996. The table also shows the number
and value of unexercised Options which were held by the Named Executive Officers
as of December 31, 1996.
<TABLE>
<CAPTION>
Number of
Securities
Underlying
Unexercised
Number of Options Value of Unexercised
Shares Acquired Exercisable/ In-the-Money Options
Name on Exercise Value Realized Unexercisable Exercisable/Unexercisable
- ---------------------- ------------------ ---------------- --------------- ---------------------------
<S> <C> <C> <C> <C>
Shant S. Hovnanian...... 0 $0 0 $0/0
Bernard B. Bossard...... 0 0 0 0/0
Charles N. Garber....... 0 0 41,667/8,333 0/0
John G. Walber.......... 0 0 25,000/5,000 0/0
</TABLE>
Director Compensation
Directors of the Company who are not officers or employees of the
Company ("Non-Employee Directors") will receive an annual fee of $5,000 and $500
per Board meeting and Board committee meeting attended. Upon the consummation of
the Initial Public Offering in February 1996, Non-Employee Directors received
grants of Options to purchase 5,000 shares of Common Stock, of which grants 50%
vested in February 1997 and 50% will vest in February 1998; provided that any
such Non-Employee Director shall continue to be serving on the Board at such
time. Upon their initial election to the Board, persons qualifying as
Non-Employee Directors shall receive grants of Options to purchase 5,000 shares
of Common Stock which shall be fully vested on such date. Upon the date of each
annual meeting of stockholders of the Company, Non-Employee Directors shall
receive grants of Options to purchase 1,000 shares of Common Stock which shall
be fully vested on such date. Directors of the Company who are officers or
employees of the Company do not receive additional compensation for serving on
the Board or on any committee thereof.
Employment Agreements
The Company has entered into an employment agreement with Mr. Shant S.
Hovnanian, dated as of October 18, 1995. The agreement provides that Mr.
Hovnanian will act as President and Chief Executive Officer of the Company and
will devote substantially all of his working time and efforts to the Company's
affairs. Pursuant to the agreement, Mr. Hovnanian may devote such working time
and efforts to CT&T and its affiliates as the due and faithful performance of
his obligations under the agreement permits. The agreement has a one year term,
effective as of February 7, 1996, and provides for an annual salary of $250,000.
Mr. Hovnanian is currently negotiating an extension of his employment agreement
with the Company, and is continuing to serve as Chairman, President and Chief
Executive Officer pending the successful conclusion of these discussions.
17
<PAGE>
The Company has entered into an employment agreement with Mr. Bernard
B. Bossard, dated as of October 18, 1995. The agreement provides that Mr.
Bossard will act as Executive Vice President and Chief Technical Officer of the
Company and will devote such substantial portion of his time and effort to the
affairs of the Company as the Company's Board of Directors reasonably requires.
The agreement has a three year term, effective as of February 7, 1996, and
provides for an annual salary of $170,000, and the use of an automobile and the
Company's New York City apartment.
The Company has entered into an employment agreement with Mr. Charles
N. Garber, dated July 31, 1996. The agreement provides that Mr. Garber will
serve as Chief Financial Officer of the Company and Vice President--Finance of
CVNY, effective as of July 15, 1996. The agreement has a three year term and
provides for an annual salary of $175,000, a signing bonus of $50,000, a
relocation allowance of $50,000, an annual bonus of no less than $50,000 based
on the executive's attainment of annual individual and/or corporate performance
goals established by the Compensation Committee, 25,000 Options exercisable at
the market value as of the agreement date, a monthly commuting allowance of
$350, and a bonus of $50,000 upon completion of a financing by the Company or
CVNY in excess of $50 million. The agreement also provides that Mr. Garber's
compensation shall be reviewed by the Compensation Committee of the Board for a
potential increase no less frequently than annually.
The Company has entered into an employment agreement with Mr. John
Walber, dated January 1, 1997. The agreement provides that Mr. Walber will
continue to serve as Vice President of CVUSA and as President and Chief
Operating Officer of CVNY. The agreement has an initial term of two years and
provides for an annual salary of $195,000, an annual bonus in the amount of up
to $195,000 based on the executive's attainment of certain performance goals
established by the Compensation Committee and a monthly commuting expense
allowance of $1,500. Pursuant to the terms of this agreement, Mr. Walber was
granted Options under the Company's 1995 Stock Incentive Plan to purchase 50,000
shares of Common Stock at the market price as of the effective date of the
agreement.
18
<PAGE>
PROPOSAL 1--THE BOARD PROPOSAL
The Board presently consists of seven directors (with two vacancies)
who are elected to serve until the next annual general meeting of stockholders
or until their successors are duly elected and qualified. The Board, at the
recommendation of the Nominating Committee, has designated the Nominees listed
below for election as directors to the Board to serve until the 1998 Annual
Meeting or until their successors are duly elected and qualified. If any Nominee
shall, prior to the Annual Meeting, become unavailable for election as a
director, the persons named in the accompanying proxy card will vote for such
other nominee, if any, in their discretion as may be recommended by the
Nominating Committee.
<TABLE>
<CAPTION>
NOMINEES
Name Age Position
- ------------------------------------------------- ------- ----------------------------------------------------
<S> <C> <C>
Shant S. Hovnanian........................ 37 Chairman of the Board of Directors, President and
Chief Executive Officer
Bernard B. Bossard........................ 62 Executive Vice President, Chief Technical Officer
and Director
Vahak S. Hovnanian........................ 65 Director
Roy H. March.............................. 40 Director
Bruce G. McNeill.......................... 59 Director
Matthew J. Rinaldo........................ 65 Director
Dennis G. Spickler........................ 45 Director
</TABLE>
Recommendation and Vote
Approval of the election of the Nominees to the Board requires the
affirmative vote of a majority of the shares of Common Stock present, in person
or by proxy, and entitled to vote at the Annual Meeting.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THE
NOMINEES TO THE BOARD.
PROPOSAL 2---THE INDEPENDENT AUDITORS PROPOSAL
Upon recommendation of the Audit Committee of the Board, the Board
proposes that the stockholders appoint the firm of Coopers & Lybrand L.L.P.
("C&L") to serve as the independent auditors of the Company for the 1997 fiscal
year until the 1998 Annual Meeting. C&L served as the Company's independent
auditors for the 1996 fiscal year. A representative of C&L will attend the
Annual Meeting, and will be available to respond to questions and may make a
statement if he or she so desires.
Recommendation and Vote
Approval of the Independent Auditors Proposal requires the affirmative
vote of a majority of the shares of Common Stock present, in person or by proxy,
at the Annual Meeting.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE
INDEPENDENT AUDITORS PROPOSAL.
19
<PAGE>
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals to be included in the Company's proxy statement
with respect to the 1998 Annual Meeting of Stockholders must be received by the
Company at its executive offices located at 505 Park Avenue, New York, New York
10022 no later than December 26, 1997.
OTHER BUSINESS OF THE MEETING
The Company is not aware of any matters to come before the Annual
Meeting other than those stated in this Proxy Statement. However, inasmuch as
matters of which management of the Company is not now aware may come before the
Annual Meeting or any adjournment, the proxies confer discretionary authority
with respect to acting thereon, and the persons named in such proxies intend to
vote, act and consent in accordance with their best judgment with respect
thereto. Upon receipt of such proxies (in the form enclosed and properly signed)
in time for voting, the shares represented thereby will be voted as indicated
thereon and in this Proxy Statement.
COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K/A FOR THE YEAR ENDED
DECEMBER 31, 1996 MAY BE OBTAINED WITHOUT CHARGE BY ANY STOCKHOLDER TO WHOM THIS
PROXY STATEMENT IS SENT, UPON WRITTEN REQUEST TO THE CHIEF FINANCIAL OFFICER,
CELLULARVISION USA, INC., 505 PARK AVENUE, NEW YORK, NEW YORK 10022.
By Order of the Board of Directors
Shant S. Hovnanian
Chairman, President and
Chief Executive Officer
April 24, 1997
20
<PAGE>
<TABLE>
<S> <C>
[x]PLEASE MARK VOTES
AS IN THIS EXAMPLE
1. To elect to the Board of Directors
- ------------------------ the seven directors listed below
CELLULARVISION USA, INC. currently serving thereon to serve
- ------------------------ until the Company's 1998 Annual
Meeting of Stockholders or until
their successors are duly elected.
For Withhold For All
Except
Bernard B. Bossard Bruce G. McNeill [ ] [ ] [ ]
Shant S. Hovnanian Mathew J. Rinaldo
Vahak S. Hovnanian Dennis G. Spickler
Roy H. March
RECORD DATE SHARES:
IF YOU DO NOT WISH YOUR SHARES VOTED "FOR" A PARTICULAR NOMINEE,
MARK THE "FOR ALL EXCEPT" BOX AND STRIKE A LINE THROUGH THE
NOMINEE'S(S') NAMES(S). YOUR SHARES WILL BE VOTED FOR THE
REMAINING NOMINEE(S).
For Against Abstain
2. Ratification of the appointment of [ ] [ ] [ ]
Coopers & Lybrand L.L.P. as independent
auditors of the Company.
Please be sure to sign and date this Proxy Card. Date
----
Mark box at right if an address [ ]
change or comment has been noted
on the reverse side this Proxy Card.
- -------------------------------- ----------------------------
Stockholder sign here Co-owner sign here
</TABLE>
- --------------------------------------------------------------------------------
DETACH CARD DETACH CARD
CELLULARVISION USA, INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy Card.
There are two proposals related to the management and operation of
CellularVision USA, Inc. (the "Company") that require your immediate attention.
These are discussed in detail in the enclosed Proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to
vote your shares.
Please mark the boxes on this Proxy Card to indicate how your shares will be
voted. Then sign the card, detach it and return your Proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders of the
Company to be held on May 7, 1997.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
CellularVision USA, Inc.
<PAGE>
505 Park Avenue, New York, New York 10022
Annual Meeting of Stockholders - May 7, 1997
Proxy Solicitation on Behalf of the Board of Directors
The undersigned hereby appoints Charles N. Garber and Dan Reiss as Proxies, with
full power of substitution to each, to vote for and on behalf of the undersigned
at the 1997 Annual Meeting of Stockholders of CellularVision USA, Inc. to be
held at the Lotos Club, 5 East 66th Street, New York, New York 10021 on
Wednesday, May 7, 1997 at 10:00 a.m., Eastern daylight savings time, and at any
adjournment or adjournments thereof. The undersigned hereby directs the said
Proxies to vote in accordance with their judgment on any matters which may
properly come before the Annual Meeting, all as indicated in the Notice of
Annual Meeting, receipt of which is hereby acknowledged, and to act on the
following matters set forth in such notice as specified by the undersigned. In
their discretion, the Proxies are authorized to vote upon any other business
that may properly come before the Annual Meeting or at any adjournment(s)
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED
"FOR" PROPOSALS 1 AND 2.
THE SUBMISSION OF THIS PROXY, IF PROPERLY EXECUTED, REVOKES ALL PRIOR PROXIES.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint
owners should each sign personally. Trustees, custodians, and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If the stockholder is a corporation, the
signature should be that of an authorized officer who should indicate
his or her title.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ---------------------------------- -----------------------------------
- ---------------------------------- -----------------------------------
- ---------------------------------- -----------------------------------
