<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
Digital Transmission System, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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> 2
DIGITAL TRANSMISSION SYSTEMS, INC.
3000 Northwoods Parkway, Building 330
Norcross, Georgia 30071
(770) 798-1300
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 30, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Digital
Transmission Systems, Inc. (the "Company") will be held at 3000 Northwoods
Parkway, Building 330, Norcross, Georgia, at 9:00 a.m., eastern standard time,
on Thursday, October 30, 1997 (the "Meeting"), to consider and act upon:
1. Election of two persons to serve as members of the Company's
Board of Directors;
2. Ratification of the selection of KPMG Peat Marwick as
independent public accountants for the Company's current
fiscal year; and
3. Such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on September 24, 1997
as the record date for the determination of shareholders entitled to notice of,
and to vote at, the meeting.
By Order of the Board of Directors:
/s/ Roger Maloch
Secretary
October 10, 1997
Norcross, Georgia
IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE
AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN
PROVIDED. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES. IN THE EVENT
YOU ARE ABLE TO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR
SHARES IN PERSON.
<PAGE> 3
DIGITAL TRANSMISSION SYSTEMS, INC.
3000 Northwoods Parkway, Building 330
Norcross, Georgia 30071
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
SHAREHOLDERS' MEETING
This Proxy Statement and the enclosed proxy are furnished on behalf of the
Board of Directors of DIGITAL TRANSMISSION SYSTEMS, INC., a Delaware corporation
(the "Company"), for use at the Annual Meeting of Shareholders to be held on
October 30, 1997 at 9:00 o'clock a.m. eastern standard time (the "Annual
Meeting"), or at any adjournment or postponement thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting. The Annual
Meeting will be held at 3000 Northwoods Parkway, Building 330, Norcross,
Georgia. This Proxy Statement and the accompanying Proxy card were first mailed
on or about October 10, 1997 to all shareholders entitled to vote at the Annual
Meeting.
SHAREHOLDERS ENTITLED TO VOTE
Only holders of record of Common Stock at the close of business on
September 24, 1997 will be entitled to notice of and to vote at the Annual
Meeting. At the close of business on September 24, 1997, the Company had
outstanding and entitled to vote 4,132,180 shares of Common Stock. Each holder
of record of Common Stock on such date will be entitled to one vote for each
share held on all matters to be voted upon at the Annual Meeting. Any
shareholder who signs and returns a Proxy has the power to revoke it at any time
before it is exercised by providing written notice of revocation to the
Secretary of the Company or by filing with the Secretary of the Company a Proxy
bearing a later date. The holders of a majority of the total shares of Common
Stock outstanding on the record date, whether present at the Annual Meeting in
person or represented by Proxy, will constitute a quorum for the transaction of
business at the Annual Meeting. The shares held by each shareholder who signs
and returns the enclosed form of Proxy will be counted for the purposes of
determining the presence of a quorum at the meeting, whether or not the
shareholder abstains on all or any matter to be acted on at the meeting.
Abstentions and broker non-votes both will be counted toward fulfillment of
quorum requirements. A broker non-vote occurs when a nominee holding shares for
a beneficial owner does not vote on a particular proposal because the nominee
does not have discretionary voting power with respect to that proposal and has
not received instructions from the beneficial owner.
COUNTING OF VOTES
The purpose of the Annual Meeting is to consider and act upon the matters
which are listed in the accompanying Notice of Annual Meeting and set forth in
this Proxy Statement. The enclosed form of Proxy provides a means for a
shareholder to vote for all of the matters listed in the accompanying Notice of
Annual Meeting and described in the Proxy Statement. The enclosed form of Proxy
also provides a means for a shareholder to vote for all of the nominees for
Director listed thereon or to withhold authority to vote for one or more of such
nominees. The two nominees receiving the highest number of votes will be elected
to the Board of Directors. Broker non-votes are not counted in the election of
directors.
The accompanying form of Proxy also provides a means for a shareholder to
vote for, against or abstain from voting on each of the other matters to be
acted upon at the Annual Meeting. Each Proxy will be voted in accordance with
the shareholder's directions. The affirmative vote of a majority of the shares
of Common Stock present in person or represented by a Proxy and entitled to vote
on proposal two set forth in the accompanying Notice of Annual Meeting is
required for the approval of such proposal.
1
<PAGE> 4
Approval of any other matters as may properly come before the meeting also will
require the affirmative vote of a majority of the shares of Common Stock present
in person or represented by a Proxy and entitled to vote at the meeting.
Abstentions with respect to proposal two will have the same effect as a vote
against this proposal. With respect to broker non-votes, the shares will not be
considered present at the meeting for the proposal to which authority was
withheld. Consequently, broker non-votes will not be counted with regard to the
proposal, but they will have the effect of reducing the number of affirmative
votes required to approve the proposal, because they reduce the number of shares
present or represented from which a majority is calculated.
PROXIES
The proxy accompanying this Proxy Statement is solicited by the Board of
Directors of the Company. Proxies may be solicited by officers, directors and
regular supervisory and executive employees of the Company, none of whom will
receive any additional compensation for their services. Also, Morrow & Co. may
solicit proxies at an approximate cost of $3,500 plus reasonable expenses. Such
solicitations may be made personally, or by mail, facsimile, telephone,
telegraph, or messenger. The Company will pay persons holding shares of common
stock in their names or in the names of nominees, as well as brokerage houses,
banks and other fiduciaries, for the expense of forwarding solicitation
materials to their principals. All of the costs of solicitation will be paid by
the Company.
When the enclosed Proxy is properly signed and returned, the shares which it
represents will be voted at the Annual Meeting in accordance with the
instructions noted thereon. In the absence of such instructions, the shares
represented by a signed Proxy will be voted in favor of the nominees for
election to the Board of Directors, and in favor of the approval of proposal
two.
2
<PAGE> 5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's voting securities as of
September 24, 1997 by (i) each person who is known by the Company to
beneficially own more than five percent of the Company's Common Stock, (ii) each
of the Company's directors and each of the executive officers named in the table
under Executive Compensation, and (iii) all directors and executive officers of
the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF APPROXIMATE
SHARES PERCENTAGE
BENEFICIALLY OF SHARES
NAME OWNED(1),(2) OWNED(3)
- --------------------------------------- ------------ -----------
<S> <C> <C>
Peregrine Ventures II, L.P.(5) 1,738,114 42.1%
Andres C. Salazar(6) 114,116 2.8%
Woodrow B. Cannon(6) 12,500 *
Marlin H. Nelson(6) 14,149 *
Roger E. Maloch(6) 7,500 *
G. Thomas Mitchell(6) 0 *
Frank LaHaye(7) 1,745,353 42.2%
Gene Miller(7) 1,744,353 42.2%
Robert D. Francis(8) 10,000 *
Edwin D. Kantor(9) 4,000 *
All executive officers and directors as
a group (10 persons)(10) 1,913,767 46.3%
</TABLE>
* Less than 1%
(1) Unless otherwise indicated below, the persons and entities named in
the table have sole voting and investment power with respect to the
shares owned.
(2) Includes shares of Common Stock issuable upon exercise of stock
options exercisable within 60 days as follows: Mr. Salazar - 54,116,
Mr. Cannon - 12,500, Mr. Nelson - 14,149, Mr. Maloch - 7,500, Mr.
LaHaye - 7,194, Mr. Miller - 6,194, Mr. Francis - 10,000 and Mr.
Kantor - 4,000.
(3) Does not reflect approximately 465,431 shares issuable upon exercise
of options granted under the Company's 1992 Stock Incentive Plan, of
which options to purchase approximately 224,122 shares have vested as
of the effective date of this Proxy, and 200,000 shares issuable upon
exercise of options granted under the Company's 1996 Stock Incentive
Plan, of which options to purchase approximately 24,375 shares have
vested as of the effective date of this Proxy.
(5) The address of Peregrine Ventures II, L.P. is 20833 Stevens Creek,
Suite 102, Cupertino, California 95014-2154.
(6) The address of each of Mr. Salazar, Mr. Cannon, Mr. Nelson, Mr. Maloch
and Mr. Mitchell is c/o Digital Transmission Systems, Inc., 3000
Northwoods Parkway. Suite 330, Norcross, Georgia 30071.
(7) The address of each of Mr. LaHaye and Mr. Miller is c/o Peregrine
Ventures II, L.P., 20833 Stevens Creek, Suite 102, Cupertino,
California 95014-2154. Includes 1,747,114 shares beneficially owned by
Peregrine Ventures II, L.P., with respect to which Messrs. LaHaye and
3
<PAGE> 6
Miller share investment and voting control.
(8) The address of Mr. Francis is c/o Jefferson Partners, The Colorado
Building, 1341 G Street, NW, Washington, DC 20005.
(9) The address of Mr. Kantor is c/o Barington Capital Group, L.P., 888
Seventh Avenue, 17th Floor, New York, NY 10019.
(10) Includes 1,747,114 shares owned by Peregrine Ventures 11, L.P. with
respect to which Messrs. LaHaye and Miller share investment and voting
control.
PROPOSAL 1
ELECTION OF DIRECTORS
INTRODUCTION
At the Annual Meeting, two directors are to be elected for the terms
described below. The Board of Directors of the Company is divided into three
classes serving staggered three-year terms. The terms of office of Mr. Francis
and Mr. LaHaye expire in 1998, the terms of office of Mr. Miller and Mr. Kantor
expire in 1999 and the terms of office of Mr. Macnab and Mr. Salazar, if
elected, will expire in 2000. Officers of the Company serve at the discretion of
the Board of Directors.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the two nominees named below. In the event
that any nominee should be unavailable for election as a result of an unexpected
occurrence, such shares will be voted for the election of such substitute
nominee as the Board of Directors may select. Each person nominated for election
has agreed to serve if elected, and management has no reason to believe that any
nominee will be unable to serve.
The Board of Directors recommends a vote FOR each named nominee.
The name and age, principal occupation or employment, and other data
regarding each nominee, based on information received from the respective
nominees, are set forth below:
For a term of three years:
Craig Macnab, 41, has been the President of Tandem Capital, Inc., which
makes investments in micro-cap public companies, since January 1997. From
1993 to 1996, Mr. Macnab served as the general partner of MacNiel Advisors,
Inc., the general partner of three private funds that invested in the
publicly traded securities of small public companies. From 1987 to 1993, Mr.
Macnab was a partner of J. C. Bradford & Co., a regional brokerage firm,
jointly responsible for the merger and acquisition department and a private
mezzanine capital fund. From 1981 to 1987, Mr. Macnab was employed by Lazard
Freres & Co. Mr. Macnab is also a director of Environmental Tectonics, JDN
Realty, Smart Choice Automotive and Teltronics, Inc.
Andres C. Salazar, 54, has been President and Chief Executive Officer and a
member of the Board of Directors of the Company since 1994. From 1991 to
1994, Mr. Salazar was a Vice President and General Manager at AT&T Paradyne.
From 1989 to 1991, he was Senior Vice President of Operations for Avanti
Communications.
4
<PAGE> 7
CURRENT DIRECTORS
Two year term remaining:
Gene Miller, 56, has been a director of the Company since 1990. Mr. Miller
is general partner of the general partnerships which control Peregrine
Ventures, L.P. and Peregrine Ventures II, L.P. (a significant stockholder
of the Company). Mr. Miller has co-managed these investment companies with
Mr. LaHaye for the last five years. Mr. Miller also sits on the Board of
Directors of Somatogen, Inc. and Raytel, Inc.
Edwin Kantor, 65, was elected as a director of the Company in August, 1996.
Mr. Kantor is vice chairman of Barington Capital Group, L.P., a New York
city investment banking and brokerage firm and underwriters of the
Company's initial public offering which was completed in March, 1996. Prior
to joining Barington Capital, Mr. Kantor had 37 years of experience in the
securities industry with Drexel Burnham Lambert Inc. and its predecessor
firms.
One year term remaining:
Frank LaHaye, 68, has been a director of the Company since 1993. Mr.
LaHaye, along with Gene Miller, is a general partner of the general
partnerships which control Peregrine Ventures, L.P. and Peregrine Ventures
II, L.P. (a significant stockholder of the Company). Mr. LaHaye has
co-managed these investment companies with Mr. Miller for the last five
years. Mr. LaHaye also sits on the Boards of Directors of Quarterdeck
Corporation and Fischer Imaging Corporation. Mr. LaHaye is also a director
or trustee for many of the trusts and funds of the Franklin / Templeton
Group.
Robert D. Francis, 61, has been a director of the Company since 1995. From
1993 to the present, Mr. Francis has been a Managing Partner of Milford
Communications Partners, Ltd., an international sales consulting firm, and
a partner of Jefferson Partners, a Washington, D.C. Merchant Bank. From
1990 to 1993 Mr. Francis was President of GDC International, Inc.
DIRECTOR COMPENSATION
Meetings of the Board of Directors are scheduled quarterly, but can be held on
an as-needed basis. All expenses, including travel and lodging, are reimbursed
by the Company for meeting attendance. Non-employee Board members are also
compensated with an option grant of 1,000 shares of Common Stock for every Board
meeting attended in person.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETINGS
The Board of Directors of the Company held a total of 7 meetings during fiscal
1997. No director attended fewer than 80% of the meetings of the Board of
Directors and committees thereof, if any, upon which such director served.
The Board of Directors has two standing committees: the Audit Committee and the
Compensation Committee.
Audit Committee. The Board of Directors has established an Audit
Committee composed of two (2) directors for the purpose of approving the
Company's independent auditors, reviewing the scope of their engagement,
consulting with such auditors, reviewing the results of any audit
examination, reviewing the disposition of recommendations made by the
independent auditors during the past year, acting as liaison between the
Board of Directors and the independent auditors and reviewing various
Company policies, including those related to accounting and internal
control matters. The current members of the Audit Committee are Mr. Miller
and Mr. Kantor. Mr. Kantor was elected to the Audit Committee on October 4,
1996 to replace Mr. Francis who continues to serve on the Compensation
Committee.
5
<PAGE> 8
Compensation Committee. The Board of Directors has established a
Compensation Committee consisting of two (2) directors to review and
approve executive compensation policies, practices, salary levels and bonus
programs. The current members of the Compensation Committee are Mr. Francis
and Mr. LaHaye.
CERTAIN TRANSACTIONS
Edwin Kantor, a director of the Company since August, 1996, is a vice chairman
of Barington Capital Group, L.P. Barington was the underwriter of the Company's
initial public offering and received fees of approximately $850,000 in
connection with said offering. In connection with such offering, Barington will
also receive a fee equal to 5% of the aggregate exercise price of each warrant
exercised after the first anniversary of the initial public offering. Barington
has also been retained by the Company to provide certain investment banking
services through March 4, 1998.
Robert Francis, a director of the Company, is a principal of Jefferson Partners,
L.L.C. As part of the Company's initial public offering, Jefferson Partners
received approximately $70,000 from Barington and in March, 1997, received 25%
of the value of the underwriter's options received by Barington in connection
with the offering. These amounts were compensation for Jefferson Partners'
introduction of the Company to Barington and the performance by Jefferson
Partners of certain diligence.
6
<PAGE> 9
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information regarding the executive
officers and directors of the Company:
<TABLE>
<S> <C> <C>
Andres C. Salazar 54 President and Chief Executive Officer; Director
Roger E. Maloch 41 Chief Financial Officer; Vice President of Finance and Administration
Woodrow B. Cannon 51 Vice President of Marketing and U.S. Sales
Marlin H. Nelson 49 Vice President of International Sales
Tom Mitchell 57 Vice President of Engineering
Frank LaHaye(2) 68 Director
Gene Miller(1) 56 Director
Robert D. Francis(2) 61 Director
Ed Kantor(1) 65 Director
</TABLE>
(1) Member of the Audit Committee of the Board of Directors
(2) Member of the Compensation Committee of the Board of Directors
Andres C. Salazar has been President and Chief Executive Officer and a
member of the Board of Directors of the Company since 1994. From 1991 to
1994, Mr. Salazar as a Vice President and General Manager at AT&T Paradyne.
From 1989 to 1991, he was Senior Vice President of Operations for Avanti
Communications.
Roger E. Maloch was named Chief Financial Officer of the Company on July 8,
1996. Prior to that time he was CFO at UniComp, Inc., a publicly traded
software company in Atlanta. From 1981 to 1989, Mr. Maloch held various
marketing and general management positions with Dun & Bradstreeet Software
in Atlanta.
Woodrow B. Cannon was named Vice President of Marketing and Engineering for
the Company in August 1996. He was previously Vice President of Marketing
for BellSouth Communication Systems and served in several senior marketing
positions for the Motorola Information Systems Group from 1988 through
1995. Prior to Motorola, he had over five years of management experience in
several AT&T sales and marketing positions and over thirteen years with
IBM.
Marlin H. Nelson has been Vice President of International Sales since 1995.
From 1993 to 1995 he was Vice President, European Region for Hayes
Microcomputer Products. During 1992, Mr. Nelson was Vice President,
European Sales for N.E.T. From 1990 to 1991, he was Vice President of
Europe, Africa and the Middle East for GDC, Inc.
G. Thomas Mitchell was named Vice President of Engineering for the Company
on May 5, 1997. He was previously Director of Advanced Development at Arris
Interactive, a joint venture between Nortel and Antec. He has held various
technical management positions at Hayes Microcomputer, Nortel and Alliant
Computer.
7
<PAGE> 10
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
In July 1997, the Board of Directors selected the accounting firm of KPMG
Peat Marwick LLP to serve as its independent auditor and recommends that
shareholders vote for ratification of such appointment. Representatives of KPMG
Peat Marwick LLP are expected to be present at the meeting. They will have an
opportunity to make a statement if they desire to do so and will be available to
respond to appropriate questions from shareholders.
The Board of Directors recommends that the shareholders vote FOR
ratification of the selection of KPMG Peat Marwick as independent auditors.
8
<PAGE> 11
EXECUTIVE COMPENSATION
Compensation Summary. The following table presents certain summary
information concerning compensation earned for services rendered to the Company
by Andres C. Salazar, the Company's President and Chief Executive Officer and
each of the other executive officers of the Company who received compensation of
at least $100,000 during 1997 (collectively the "Named Executive Officers"), for
the fiscal years ended June 30, 1997, 1996, and 1995.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------
SECURITIES ALL OTHER
ANNUAL COMPENSATION UNDERLYING COMPENSATION(1)
NAME AND PRINCIPAL POSITION FY SALARY($) BONUS($) OPTIONS/SARS(#) ($)
- --------------------------- ---- --------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Andres C. Salazar 1997 156,000 7,113 0 65,528
President and CEO 1996 140,167 0 75,867 12,750
1995 132,625 38,427 126,866 37,809
Woodrow B. Cannon(2) 1997 111,120 6,616 0 0
V.P. Marketing & Sales 1996 0 0 0 0
1995 0 0 0 0
Marlin H. Nelson 1997 113,212 54,116 10,000 0
V.P. Int'l Sales 1996 112,380 15,000 26,745 0
1995 7,900 3,591 29,851 0
Roger E. Maloch(3) 1997 98,141 3,274 0 0
V.P. Finance & Admin., CFO 1996 0 0 0 0
1995 0 0 0 0
G. Thomas Mitchell(4) 1997 18,333 0 35,000 0
V.P. Engineering 1996 0 0 0 0
1995 0 0 0 0
</TABLE>
(1) Amounts set forth in this column represent certain relocation
expenses.
(2) Mr. Cannon joined the Company on August 12, 1996.
(3) Mr. Maloch joined the Company on July 8, 1996.
(4) Mr. Mitchell joined the Company on May 5, 1997.
No other executive officer had total compensation greater than $100,000 in the
fiscal year ended June 30, 1997.
9
<PAGE> 12
Grants of Stock Options. The following table contains information
concerning options granted to the Named Executive Officers during the fiscal
year ended June 30, 1997:
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOAL
SECURITIES OPTIONS GRANTED TO EXERCISE
UNDERLYING OPTIONS EMPLOYEES OR BASE PRICE EXPIRATION
NAME GRANTED(#) IN FISCAL YEAR ($/SH) DATE
- ---- ------------------ ------------------ ------------- ----------
<S> <C> <C> <C> <C>
Andres C. Salazar 0 0 $ 0.00
Woodrow B. Cannon 50,000 22% $10.68 8/01/2006
Marlin H. Nelson 10,000 4% $11.25 1/30/2007
Roger E. Maloch 30,000 13% $10.68 8/01/2006
G. Thomas Mitchell 35,000 15% $10.25 4/04/2007
</TABLE>
Aggregated Stock Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values. The following table sets forth certain information with respect to
options exercised during the fiscal year ended June 30, 1997 and presents the
value of unexercised stock options held by the named executive officers as of
June 30, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
VALUE OPTIONS/SARS AT IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED REALIZED YEAR END FISCAL YEAR END($)(1)
NAME ON EXERCISE(#) ($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Andres C. Salazar 60,000 $653,280 54,116/88,617 $513,479/$737,661
Woodrow B. Cannon 0 $ 0 12,500/37,500 $ 11,813/$ 35,438
Marlin H. Nelson 7,462 $ 80,246 14,149/44,985 $126,357/$302,571
Roger E. Maloch 0 $ 0 7,500/22,500 $ 7,088/$ 21,263
G. Thomas Mitchell 0 $ 0 0/35,000 $ 0/$ 48,125
</TABLE>
(1) Dollar values were calculated by determining the difference between the
June 30, 1997 fair market value of the Company's Common Stock and the
exercise price of such options before income taxes.
SECTION 16(A) REPORTING
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than 10% of
the Company's Common Stock, to file with the SEC initial reports of ownership
and reports of changes in ownership of the Common Stock and all other equity
securities of the Company beneficially owned by them. Directors, executive
officers and greater than 10% shareholders are required by regulation to furnish
the Company the copies of all Section 16(a) reports they file. To the Company's
knowledge, based solely on review of copies of such reports furnished to the
Company and written representations that no other reports were required, during
the fiscal year ended June 30, 1997, all Section 16(a) filing requirements
applicable to the directors, executive officers and greater than 10% beneficial
owners were complied with by such persons except that Form 3's for Robert
Francis, Edwin Kantor, Frank LaHaye, Gene Miller and Tom Mitchell were
inadvertently filed after the filing deadline.
10
<PAGE> 13
SHAREHOLDER PROPOSALS
Rules of the Securities and Exchange Commission require that any proposal
by a shareholder of the Company for consideration at the 1998 Annual Meeting of
Shareholders must be received by the Company no later than June 12, 1998, if any
such proposal is to be eligible for inclusion in the Company's proxy materials
for its 1998 Annual Meeting. Under such rules, the Company is not required to
include shareholder proposals in its proxy materials unless certain other
conditions specified in such rules are met.
OTHER MATTERS
Management of the Company is not aware of any other matter to be presented
for action at the Annual Meeting other than those mentioned in the Notice of
Annual Meeting of Shareholders and referred to in this Proxy Statement.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Andres C. Salazar
-------------------------------------
Andres C. Salazar,
President and Chief Executive Officer
11
<PAGE> 14
APPENDIX
DIGITAL TRANSMISSION SYSTEMS, INC.
3000 Northwoods Parkway, Building 330
NORCROSS, GEORGIA 30071
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Andres C. Salazar and Roger E. Maloch, and
each of them, with full power of substitution, as Proxy, to represent and vote
all the shares of Common Stock of DIGITAL TRANSMISSION SYSTEMS, INC. held of
record by the undersigned on September 24, 1997, at the annual meeting of
shareholders to be held on October 30, 1997 or any adjournment thereof, as
designated on the reverse side hereof and in their discretion as to other
matters.
Please sign exactly as name appears on the reverse side. When shares are
held by joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
The shares represented by this proxy will be voted as directed by the
stockholder. If no direction is given when the duly executed proxy is returned,
such shares will be voted "FOR" all nominees in Proposal 1 and "FOR" Proposal 2.
PLAN TO ATTEND MEETING
THE BOARD OR DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES IN PROPOSAL 1 AND
"FOR" PROPOSAL 2.
<TABLE>
<S> <C> <C>
1. Election of the following Nominees as Directors for terms expiring as
stated below:
For a term of three years expiring in 2000: Craig Macnab and Andres C. Salazar
FOR all Nominees WITHHELD for all Nominees
</TABLE>
INSTRUCTIONS: Withhold for the following only (Write the name of the
nominee(s) in the space below)
- --------------------------------------------------------------------------------
(continued on other side)
2. Ratification of the selection of KPMG Peat Marwick as independent public
accountants for the Company's current fiscal year.
FOR AGAINST ABSTAIN
PLEASE MARK YOUR CHOICE LIKE
THIS /X/ IN BLUE OR BLACK INK,
Date
--------------------------
------------------------------
Signature
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Signature if held jointly
PLEASE MARK, DATE AND SIGN AS YOUR NAME APPEARS ABOVE AND RETURN IN THE ENCLOSED
ENVELOPE.
