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 ss. 240.14a-11(c) or ss. 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: ____________
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CELLULARVISION USA, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 20, 1998
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 20, 1998, at 10:00 a.m., Eastern daylight savings
time, or at any postponement or adjournment thereof for the following purposes:
1. To elect six members to the Board of Directors of the Company (the
"Board") to serve until the next annual meeting of stockholders to
be held in 1999 (the "1999 Annual Meeting") or until their
successors are duly elected;
2. To appoint independent auditors of the Company for the 1998 fiscal
year to serve until the 1999 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, 1998 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 27, 1998
<PAGE>
CELLULARVISION USA, INC.
140 58th Street, Loft 7E
Brooklyn, New York 11220
--------------------------
ANNUAL MEETING OF STOCKHOLDERS
May 20, 1998
--------------------------
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 20, 1998, 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 27, 1998.
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, 1998 (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 six
directors (the "Nominees") to the Board to serve until the next annual meeting
of stockholders of the Company to be held in 1999 (the "1999 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 1998 fiscal year until the 1999 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 of determining
<PAGE>
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.
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<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, 1998.
Name Age Position
- ----------------------------- --- -----------------------------------
Shant S. Hovnanian........... 38 Chairman of the Board of
Directors, President and Chief
Executive Officer
Bernard B. Bossard........... 63 Executive Vice President, Chief
Technical Officer and Director
Charles N. Garber............ 50 Chief Financial Officer, CVUSA
and Vice President-Finance,
CellularVision of New York, L.P.
("CVNY")
John G. Walber............... 41 Vice President, CVUSA and
President and Chief Operating
Officer, CVNY
Vahak S. Hovnanian........... 66 Director
Roy H. March................. 41 Director
Bruce G. McNeill............. 60 Director
Matthew J. Rinaldo........... 66 Director
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 36 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
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<PAGE>
1970) ("KMC"), and general manager of KMC after its purchase by M/A Com, Inc.,
in 1973. He holds nine patents and has many patents pending.
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
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<PAGE>
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.
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
MANAGEMENT AND DIRECTORS
The following table sets forth information as of April 1, 1998 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.
Common Stock
Beneficially Owned(1)
-----------------------
Beneficial Owner Number Percent
-------------------------------- ----------- ----------
Shant S. Hovnanian(2).......... 3,799,154 23.7%
Bernard B. Bossard(2).......... 3,272,656 20.5
Charles N. Garber(3)........... 55,000 *
John G. Walber(4).............. 61,500 *
Vahak S. Hovnanian(2)(5)....... 2,750,000 17.2
Roy H. March(6)................ 7,000 *
Bruce G. McNeill(7)............ 6,000 *
Matthew J. Rinaldo(8).......... 8,000 *
All Directors and Executive
Officers as a group (total
8 persons).................. 9,959,310 62.2%
---------
* Less than 1% of the outstanding Common Stock
(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 50,000 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 55,000 shares of Common Stock pursuant to the
Company's 1995 Stock Incentive Plan which are fully vested and presently
exercisable.
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<PAGE>
(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) 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 1998
Annual Meeting.
(7) 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.
(8) Includes Options to purchase 7,000 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 1998
Annual Meeting.
Stockholders Agreement. Shant S. Hovnanian, Bernard B. Bossard and Vahak
S. Hovnanian (collectively, the "Founders"), who in the aggregate beneficially
own 61.4% 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. To
date, Bell Atlantic has not exercised this right. 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.
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<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 telecommunications 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.
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<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 telecommunications 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 for this territory. CT&T has also agreed to license the LMDS
technology to the Company in other BTAs in which the Company obtains LMDS
licenses. 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 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. The term of the CT&T License
Agreement extends through the year 2028, subject to earlier termination upon the
expiration, revocation or invalidation of CT&T patent rights directly related to
the operation of the Company's system. The license fees paid by the Company
pursuant to the CT&T License Agreement were $324,000, $149,000 and $79,000 for
the years ended December 31, 1997, 1996 and 1995 respectively.
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.
Under the CT&T License Agreement, CT&T may charge the Company a fee of up
to 2.5% of the value of equipment purchased through CT&T, and 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 years ended December 31, 1997 and 1996 was $1,467,000 and
$6,198,000 respectively. During 1996, CT&T entered into certain purchase
commitments on behalf of CVNY for the manufacture of antennas, receivers, modems
and transmitters. The Company's obligations under these commitments totaled
approximately $11.6 million, net of deposits of $3.4 million, at December 31,
1996. At December 31, 1997, the Company had outstanding long-term orders with
CT&T for the purchase of super-high-speed modems and set-top boxes aggregating
approximately $3,208,000, net of deposits of approximately $627,000, to be
delivered to the Company during 1998 and 1999.
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,
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<PAGE>
the Company and CT&T had shared equally the fees and disbursements of joint FCC
counsel. 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. Also, prior to the Incorporation Transactions, 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 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, 1997 and 1996, the Company had amounts due from CT&T of
approximately $181,000 and $760,000 respectively, which amounts represent 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. Accordingly, the Company paid in cash to
CT&T an annual royalty which totaled $80,000 for each of the years ended
December 31, 1997 and 1996.
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.
VisionStar, Inc. On June 22, 1995, Shant S. Hovnanian, the Company's
Chairman, Chief Executive Officer and President, founded VisionStar Inc.
("VisionStar"). On September 28, 1995, VisionStar applied for a license to
operate a geostationary earth orbit ("GEO") satellite in the next generation Ka
frequency band. In June 1997, the FCC granted VisionStar a license to operate a
GEO satellite assigned the 113 degree satellite slot in the Ka band.
Subsequently, Directors Bossard and McNeill requested information from Mr.
Hovnanian regarding VisionStar's potential for augmenting the Company's
infrastructure, possibly permitting it or potential strategic partners to extend
operations into less densely populated suburban areas, and to assess the
appropriate nature of the relationship, if any, between the Company and
VisionStar. Mr. Hovnanian has from time to time discussed with other members of
the Board of Directors various bases upon which the businesses of VisionStar and
the Company might be combined, but no such discussions are ongoing at the
present time.
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 approximately $264,000 of ICVA operating expenses in 1997. The Company
also subleases certain office space for ICVA on a month-to-month basis, the cost
of which is included in the foregoing expense total. As of December 31, 1997,
the monthly charge was $2,930. Congressman Rinaldo, a director of the Company,
serves as President of ICVA at an annual salary of $200,000.
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<PAGE>
Other Transactions. CVNY has entered into agreements with certain
executives of CVNY and the Company to loan them money for the purpose of
purchasing Common Stock of the Company. The aggregate amount due to CVNY is
$171,245 at December 31, 1997.
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<PAGE>
BOARD OF DIRECTORS; BOARD COMMITTEES
Board of Directors Meetings; Board Committee Meetings
During 1997, the Board met eight times; the Nominating Committee met one
time; the Audit Committee met two times; and the Compensation Committee met
three 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 1997.
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 1999 Annual Meeting of Stockholders must be in writing and must be received
by the Company on or before its close of business on December 31, 1998.
Audit Committee
The Audit Committee of the Board, which currently consists of Bruce G.
McNeill 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. Prior to December 1997, Mr. Dennis G.
Spickler also served on the Audit Committee of the Board. Mr. Spickler served as
a director of the Company until December, 1997.
Compensation Committee; Compensation Committee Interlocks and Insider
Participation
The Compensation Committee of the Board, which currently 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.
As of January 1, 1997, 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
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<PAGE>
director of the Company, serves as President of ICVA. (See "Certain
Relationships and Related Transactions.")
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 1997 fiscal year. Based solely upon the
Company's review of copies of such reports furnished to it, the Company believes
that during the 1997 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. Bossard did not timely file a Statement of Changes in
Beneficial Ownership on Form 4 ("Form 4") in connection with an open-market sale
of Common Stock and Director Vahak S. Hovnanian did not timely file a Form 4 in
connection with two simultaneous gifts of Common Stock.
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<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 1997, 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 1997, 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, 1997, compensation accrued or paid to the executive officers
of the Company was determined pursuant to the terms of the employment agreements
negotiated by the Company with the executives. During 1997, no discretionary
compensation was accrued or paid to executive officers that is not set by their
respective employment agreements.
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 limits of Section 162(m) because the Plan was adopted prior to the time
of the Initial Public Offering. As
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<PAGE>
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, 1997 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, 1997. As depicted in the graph
below, during this period, the cumulative total return (1) for the Common Stock
was (60.7)%, (2) for the NNM Index was 43.7% and (3) for the Peer Group was
(28.0)%.
Comparison of Cumulative Total Return
[Graphic Omitted]
- ----------
(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.
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<PAGE>
Executive Compensation
The following table shows, for the fiscal years ended December 31, 1997,
1996 and 1995, 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 1997 (the
"Named Executive Officers") in all capacities in which they served.
Summary Compensation Table
<TABLE>
<CAPTION>
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).............................. 1997 $ 250,000 $ -- $ -- -- $ --
Chairman of the Board of 1996 250,000 -- -- -- --
Directors, President and Chief 1995 230,000 -- -- -- --
Executive Officer
Bernard B. Bossard(1)(2)........................... 1997 $ 170,000 $ -- $ 63,868 -- $ --
Executive Vice President and Chief 1996 170,000 -- 55,185 -- --
Technical Officer 1995 150,000 -- 43,900 -- --
--
Charles N. Garber (3).............................. 1997 $ 175,000 $ 50,000 $ -- -- $ --
Chief Financial Officer, CVUSA and Vice 1996 80,208 72,917 -- 50,000 50,000
President-Finance, CVNY
John G. Walber(4).................................. 1997 $ 195,000 $ -- $ -- 50,000 $ --
Vice President, CVUSA and President and Chief 1996 165,000 110,000 -- 30,000 --
Operating Officer, CVNY
</TABLE>
- -----------
(1) During 1995, 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.
(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. The
aggregate cost to the Company for these items for each of the years 1997,
1996 and 1995 is set forth under "Other Annual Compensation" in the
foregoing Summary Compensation Table. For 1997, the cost to the Company
for the apartment was $51,000 and the cost of the automobile (including
insurance) was $12,868. ("See Employment Agreements.")
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<PAGE>
(3) Mr. Garber commenced employment with the Company in July 1996. The amount
set forth below "Bonus" in 1996 represents a signing bonus of $50,000 paid
in 1996, and an accrual representing Mr. Garber's pro-rata minimum annual
bonus for the remainder of the year. The 1997 amount represents an accrual
for Mr. Garber's 1997 minimum annual bonus of $50,000. The amount set
forth below "All Other Compensation" in 1996 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" in 1996 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 initial employment agreement with
the Company. (See "Employment Agreements.")
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 1997.
<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....... 0 0 -- -- -- --
John G. Walber.......... 50,000 10.1 7.00 01/01/07 220,113 557,810
</TABLE>
For additional information regarding stock option grants to employees in 1997,
see the Company's Annual Report on Form 10-K, "Notes to Consolidated Financial
Statements--Note 8, Stock Options and Warrants."
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<PAGE>
Aggregate Stock Option Exercise Table
The following table sets forth information regarding the exercise of
Options by Named Executive Officers during 1997. The table also shows the number
and value of unexercised Options which were held by the Named Executive Officers
as of December 31, 1997.
<TABLE>
<CAPTION>
Number of
Securities
Underlying
Unexercised
Number of Options Value of Unexercised
Shares Acquired Value Exercisable/ In-the-Money Options
Name on Exercise 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 50,000/0 0/0
John G. Walber.......... 0 0 55,000/25,000 0/0
</TABLE>
Director Compensation
Directors of the Company who are not officers or employees of the Company
("Non-Employee Directors") 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% vested in February 1998. Upon their initial election to
the Board, persons qualifying prospectively 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 an additional 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.
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<PAGE>
Employment Agreements
The Company has entered into an employment agreement with Mr. Shant S.
Hovnanian, dated 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 and
provides for an annual salary of $250,000, effective February 7, 1996. Upon the
expiration of the initial employment term on February 7, 1997, the agreement
provides for automatic extensions on a month-to-month basis, unless terminated
by either party upon 30 days advance written notice. Mr. Hovnanian is continuing
to serve as Chairman, President and CEO pursuant to the terms of this employment
agreement.
The Company has also entered into an employment agreement with the
inventor of the LMDS technology licensed from CT&T, Mr. Bernard B. Bossard,
dated 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 and provides for an annual salary of $170,000, and the use
of an automobile and the Company's New York City apartment effective February 7,
1996.
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 initial 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 subject
to review based on executive's attainment of 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 of no less than
$50 million. The agreement also provides that Mr. Garber's compensation shall be
reviewed 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 CVUS 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, a monthly commuting expense allowance of $1,500, an annual
bonus in the amount of up to $195,000 based on the executive's attainment of
certain performance goals. Pursuant to the terms of this agreement, Mr. Walber
was granted 50,000 options to purchase CVUS shares at the market value as of the
effective date of the agreement. On December 31, 1997, 25,000 options are
exercisable, and the remaining 25,000 options will become exercisable on
December 31, 1998.
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<PAGE>
PROPOSAL 1--THE BOARD PROPOSAL
The Board currently consists of six directors (with five vacancies) who
are elected to serve until the next annual 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 1999 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.
NOMINEES
Name Age Position
- ----------------------------- --- -----------------------------------
Shant S. Hovnanian........... 38 Chairman of the Board of
Directors, President and Chief
Executive Officer
Bernard B. Bossard........... 63 Executive Vice President, Chief
Technical Officer and Director
John G. Walber............... 41 Vice President CVUSA and
President and Chief Operating
Officer, CVNY
Vahak S. Hovnanian........... 66 Director
Roy H. March................. 41 Director
Matthew J. Rinaldo........... 66 Director
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 the 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 1998 fiscal
year until the 1999 Annual Meeting. C&L served as the Company's independent
auditors for the 1996 and 1997 fiscal years. A representative of C&L will attend
the Annual Meeting, 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.
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<PAGE>
The Board unanimously recommends a vote FOR the approval of the
Independent Auditors Proposal.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals to be included in the Company's proxy statement with
respect to the 1999 Annual Meeting of Stockholders must be received by the
Company at its executive offices located at 140 58th Street, Loft 7E, Brooklyn,
New York 11220 no later than December 31, 1998.
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.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1997 IS INCLUDED IN THE MAILING WITH THIS PROXY STATEMENT.
ADDITIONAL COPIES 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., 140 58TH STREET, Loft 7E, BROOKLYN, NEW YORK 11220.
By Order of the Board of Directors
Shant S. Hovnanian
Chairman, President and
Chief Executive Officer
April 27, 1998
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