<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN THE 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:
/ / Preliminary Proxy Statement / / Confidential, For Use of the Commission
/X/ Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
TV FILME, 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:
N/A
(2) Aggregate number of securities to which transaction applies:
N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction:
N/A
(5) Total fee paid:
N/A
/ / 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.
<PAGE>
(1) Amount previously paid: N/A
(2) Form, Schedule or Registration Statement no.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE>
[TV FILME LOGO]
August 24, 1998
Dear Fellow Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of
Stockholders of TV Filme, Inc., which will be held on Thursday, October 1, 1998,
in the Cook Meeting Room at Kelley Drye & Warren LLP, 101 Park Avenue, New York,
New York 10178 at 10:00 a.m., local time. Doors to the meeting will open at 9:45
a.m.
The business to be considered and voted upon at the meeting is
explained in the accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement.
Whether or not you plan to attend the Annual Meeting in person, it is
important that your shares of Common Stock be represented and voted at the
Meeting. Accordingly, after reading the enclosed Notice of Annual Meeting and
Proxy Statement, please sign, date and return the enclosed proxy card in the
postage-paid envelope provided.
Thank you for your support of our Company.
Sincerely,
/s/ Hermano Studart Lins de Albuquerque
Hermano Studart Lins de Albuquerque
CHIEF EXECUTIVE OFFICER
<PAGE>
TV FILME, INC.
SCS, QUADRA 07-BL.A
ED. EXECUTIVE TOWER, SALA 601
70.300-911 BRASILIA - DF
BRAZIL
--------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 1, 1998
--------------------------------------------
To the Stockholders of TV Filme, Inc.:
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders of
TV Filme, Inc., a Delaware corporation (the "Company"), will be held on
Thursday, October 1, 1998, in the Cook Meeting Room at Kelley Drye & Warren LLP,
101 Park Avenue, New York, New York 10178 at 10:00 a.m., local time, for the
following purposes:
1. To elect three Class II directors to hold office until the 2001
Annual Meeting of Stockholders;
2. To approve an amendment to the Company's Stock Option Plan to
increase the number of shares of the Company's Common Stock available for
future grants;
3. To ratify the appointment of Ernst & Young Auditores Independentes
S.C. as independent auditors for the Company for fiscal year 1998; and
4. To transact such other business as may properly be presented at the
1998 Annual Meeting and at any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on August 17,
1998, as the record date for the purpose of determining stockholders who are
entitled to notice of and to vote at the 1998 Annual Meeting and any
adjournments or postponements thereof. A list of such stockholders will be
available during regular business hours at the offices of Kelley Drye & Warren
LLP, 101 Park Avenue, New York, New York 10178 for the ten days before the
meeting, for inspection by any stockholder for any purpose germane to the
meeting.
By Order of the Board of Directors,
/s/ Hermano Studart Lins de Albuquerque
Hermano Studart Lins de Albuquerque
SECRETARY
August 24, 1998
<PAGE>
TV FILME, INC.
SCS, QUADRA 07-BL.A
ED. EXECUTIVE TOWER, SALA 601
70.300-911 BRASILIA - DF
BRAZIL
--------------------------------------------
PROXY STATEMENT
--------------------------------------------
This Proxy Statement is being furnished to stockholders of TV Filme,
Inc., a Delaware corporation (the "Company"), in connection with the
solicitation of proxies by the Company's Board of Directors (the "Board") from
holders of the outstanding shares of the Company's common stock, $0.01 par value
per share (the "Common Stock"), for use at the 1998 Annual Meeting of
Stockholders of the Company to be held on Thursday, October 1, 1998, in the Cook
Meeting Room at Kelley Drye & Warren LLP, 101 Park Avenue, New York, New York
10178 at 10:00 a.m., local time, and at any adjournments or postponements
thereof (the "Annual Meeting"), for the purpose of considering and acting upon
the matters set forth in the accompanying Notice of Annual Meeting of
Stockholders.
Only holders of record of Common Stock as of the close of business on
August 17, 1998 (the "Record Date"), are entitled to notice of, and to vote at,
the Annual Meeting and any adjournments or postponements thereof. At the close
of business on such date, the Company had 10,812,096 shares of Common Stock
issued and outstanding. Holders of Common Stock are entitled to one vote on each
matter considered and voted upon at the Annual Meeting for each share of Common
Stock held of record as of the Record Date. Holders of Common Stock may not
cumulate their votes for the election of directors. Shares of Common Stock
represented by a properly executed proxy, if such proxy is received in time and
not revoked, will be voted at the Annual Meeting in accordance with the
instructions indicated in such proxy. IF NO INSTRUCTIONS ARE INDICATED, SHARES
REPRESENTED BY PROXY WILL BE VOTED "FOR" THE ELECTION, AS DIRECTORS OF THE
COMPANY, OF THE THREE NOMINEES NAMED IN THE PROXY TO SERVE UNTIL THE 2001 ANNUAL
MEETING OF STOCKHOLDERS, "FOR" THE AMENDMENT TO THE COMPANY'S STOCK OPTION PLAN,
"FOR" THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG AUDITORES
INDEPENDENTES S.C. AS INDEPENDENT AUDITORS FOR THE COMPANY FOR FISCAL YEAR 1998
AND IN THE DISCRETION OF THE PROXY HOLDERS AS TO ANY OTHER MATTER WHICH MAY
PROPERLY BE PRESENTED AT THE ANNUAL MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS
THEREOF.
The Proxy Statement and the accompanying proxy card are being mailed to
Company stockholders on or about August 26, 1998.
Any holder of Common Stock giving a proxy in the form accompanying the
Proxy Statement has the power to revoke the proxy prior to its use. A proxy can
be revoked (i) by an instrument of revocation delivered prior to the Annual
Meeting to the Secretary of the Company, (ii) by a duly executed proxy bearing a
later date or time than the date or time of the proxy being revoked, or (iii) at
the Annual Meeting if the stockholder is present and elects to vote in person.
Mere attendance at the Annual Meeting will not serve to revoke the proxy. All
written notices of revocation of proxies should be addressed as follows:
Corporate Secretary, TV Filme, Inc., c/o James P. Prenetta, Kelley Drye & Warren
LLP, 101 Park Avenue, New York, New York 10178.
<PAGE>
A plurality of the votes duly cast is required for the election of
directors. The affirmative vote of a majority of the votes duly cast is required
to approve the other matters to be acted upon at the Annual Meeting. Under the
General Corporation Law of the State of Delaware, the state in which the Company
is incorporated, an abstaining vote is not deemed to be a "vote cast." As a
result, abstentions and broker "non-votes" (votes withheld by brokers in the
absence of instructions from street-name holders) are not included in the
tabulation of the voting results on the election of directors or issues
requiring approval of a majority of the votes cast and, therefore, do not have
the effect of votes in opposition in such tabulations. Broker "non-votes" and
the shares as to which a stockholder abstains are included for purposes of
determining whether a quorum of the shares is present at a meeting.
The Company's principal executive offices are located at SCS, Quadra
07-Bl.A, Ed. Executive Tower, Sala 601, 70.300-911 Brasilia - DF Brazil. The
telephone number of the Company at such office is 011-55-61-314-9908.
PROPOSAL 1 - ELECTION OF DIRECTORS
The number of directors of the Company, as determined by the Board, is
seven. The Board consists of three classes: Class I, Class II and Class III, as
nearly equal in number as possible. One of the three classes, comprising
approximately one-third of the directors, is elected each year to succeed the
directors whose terms are expiring. Directors hold office until the annual
meeting for the year in which their terms expire and until their successors are
elected and qualified unless, prior to that date, they have resigned, retired,
or otherwise left office. In accordance with the Company's Certificate of
Incorporation, Class II directors are to be elected at the Annual Meeting, Class
III directors are to be elected at the 1999 Annual Meeting of Stockholders and
Class I directors are to be elected at the 2000 Annual Meeting of Stockholders.
At the Annual Meeting, three Class II directors are to be elected to
the Board, each to serve until the Annual Meeting of Stockholders to be held in
2001. The nominees for election at the Annual Meeting are Carlos Andre Studart
Lins de Albuquerque, Douglas M. Karp and Douglas Duran. Each nominee is
presently a director of the Company. If any nominee is unable or unwilling to
serve as a director, proxies may be voted for a substitute nominee designated by
the present Board. The Board has no reason to believe that any nominee will be
unable or unwilling to serve as a director.
The following table sets forth the name and age (as of the date of the
Annual Meeting) of the directors, the class to which each director has been
nominated for election or elected, their principal occupations at present, the
positions and offices, if any, held by each director with the Company in
addition to the position as a director, and the period during which each has
served as a director of the Company.
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION -- POSITION HELD SINCE
- ---- --- ------------------------------------- ----------
<S> <C> <C> <C>
CLASS I - 2000
Hermano Studart Lins de
Albuquerque............................. 35 Chief Executive Officer and Secretary 1996
Gary D. Nusbaum............................. 32 Managing Director of E.M. Warburg, Pincus & 1996*
Co., LLC
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SERVED AS
DIRECTOR
NAME AGE PRINCIPAL OCCUPATION -- POSITION HELD SINCE
- ---- --- ------------------------------------- ----------
<S> <C> <C> <C>
CLASS II - 1998
Carlos Andre Studart Lins
de Albuquerque.......................... 34 President and Chief Operating Officer 1996
Douglas M. Karp............................. 43 Managing Director of E.M. Warburg, Pincus & 1996
Co., LLC
Douglas Duran............................... 45 Chief Financial Officer of Tevecap S.A. 1998
CLASS III - 1999
Alvaro J. Aguirre........................... 32 Chief Financial Officer 1996
Jose Augusto Pinto Moreira.................. 55 Executive Vice President of Finance and 1996
Administration of Abril S.A.
</TABLE>
- -----------------
* See biographical description below.
CLASS I DIRECTORS
HERMANO STUDART LINS DE ALBUQUERQUE, one of the co-founders of the
Company, has served as Chief Executive Officer, Secretary and a director of the
Company since its incorporation. Mr. Lins received a Master's degree in
Artificial Intelligence from the University of Sussex, England and a Bachelor of
Science degree in Electronic Engineering from the University of Brasilia. Mr.
Lins was a member of the MMDS Regulation Commission, a Brazilian government
advisory board and is a member of the Technical Advisory Board for National
Satellite Publishing Inc. Mr. Lins is the brother of Mr. Carlos Andre Studart
Lins de Albuquerque.
GARY D. NUSBAUM has served as a director of the Company since July
1998. Mr. Nusbaum also served as a director of the Company from its
incorporation to March 1997 and as Vice President of the Company from its
incorporation to December 1996. Mr. Nusbaum has been a Managing Director of E.M.
Warburg, Pincus & Co., LLC since January 1997. Mr. Nusbaum was a Vice President
of Warburg, Pincus Ventures, Inc. from January 1995 to January 1997 and was an
associate at Warburg, Pincus Ventures, Inc. from September 1989 to December
1994. Mr. Nusbaum is a director of Paging Network do Brasil S.A. and several
privately held companies.
CLASS II DIRECTORS
CARLOS ANDRE STUDART LINS DE ALBUQUERQUE, one of the co-founders of the
Company, has served as President, Chief Operating Officer and a director of the
Company since its incorporation. Mr. Lins also served as Treasurer of the
Company from its incorporation until July 1997. Mr. Lins received a Bachelor of
Science degree in Physics from the University of Brasilia and a Bachelor of
Science degree in Mathematics from the University of Ceub. Mr. Lins is the
brother of Mr. Hermano Studart Lins de Albuquerque.
<PAGE>
DOUGLAS M. KARP has served as Chairman of the Board of the Company
since its incorporation. Mr. Karp has been a Managing Director of E.M. Warburg,
Pincus & Co., LLC (or its predecessor, E.M. Warburg, Pincus & Co., Inc.) since
May 1991. Prior to joining E.M. Warburg, Pincus & Co., LLC, Mr. Karp held
several positions with Salomon Inc, including Managing Director from January
1990 to May 1991, Director from January 1989 to December 1989 and Vice President
from October 1986 to December 1988. Mr. Karp is a director of Journal Register
Company, Qwest Communications International, Inc., Golden Books Family
Entertainment, Inc., Primus Telecommunications Group, Incorporated, Paging
Network do Brasil S.A. and several privately held companies.
DOUGLAS DURAN has served as a director of the Company since August
1998. Mr. Duran has been the Chief Financial Officer of Tevecap S.A. since 1994
and served as TVA Related Companies' Director of Tevecap S.A. from October 1991
to 1994. Prior to joining Tevecap S.A., Mr. Duran was employed by Abril S.A. for
more than 20 years, most recently as its Treasury Director.
CLASS III DIRECTORS
ALVARO J. AGUIRRE has served as Chief Financial Officer and a director
of the Company since June 1996. Prior to joining the Company, Mr. Aguirre was a
member of the Latin America Corporate Finance Group of Morgan Stanley & Co.,
Incorporated from 1994 to 1996 and a securities lawyer at the law firm of
Sullivan & Cromwell from 1991 to 1994. See "Executive Compensation - Employment
Agreements."
JOSE AUGUSTO PINTO MOREIRA has served as a director of the Company
since its incorporation. Mr. Moreira has been the Executive Vice President of
Finance and Administration of Abril S.A. since 1982. Mr. Moreira is a director
of several privately held companies.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION
OF CARLOS ANDRE STUDART LINS DE ALBUQUERQUE, DOUGLAS M. KARP AND DOUGLAS DURAN
AS CLASS II DIRECTORS.
GENERAL INFORMATION RELATING TO THE BOARD
THE BOARD
The business and affairs of the Company are managed by the Board. To
assist it in carrying out its duties, the Board has delegated certain authority
to two committees. The Board held two meetings in 1997. Each member of the
Board, other than Mr. Moreira and Mr. Rosenthal (who resigned in June 1998)
attended at least 75% of the aggregate meetings of the Board and the committees
of the Board of which he was a member during 1997.
COMMITTEES OF THE BOARD
During 1997, the standing committees of the Board included an Audit
Committee and a Compensation Committee (as hereinafter defined). The Board does
not have a nominating committee or any committee performing similar functions,
and all matters which would be considered by such a committee are acted upon by
the full Board. The Company's Amended and Restated By-laws contain an advance
notice procedure with regard to the nomination, other than by or at the
discretion of the Board, of candidates for election as directors and with regard
to certain matters to be brought before the annual meeting of stockholders. In
general, notice must be received by the Company not less than 60 days nor more
than 90 days prior to the meeting, except in the event that less than 70 days'
notice or public disclosure of the date of the meeting is given or made to
stockholders in which event such notice must be received no later than the close
of business on the tenth day following the day on which notice is given or
disclosure is made, whichever first occurs, and must contain certain specified
information concerning the person to be nominated or the matter to be brought
before the meeting and certain specified information concerning the stockholder
submitting the proposal. The foregoing is only a brief summary of the detailed
provisions of the Company's Amended and Restated By-laws and is qualified by
reference to the text thereof. See "Submission of Stockholder Proposals."
<PAGE>
During 1997, the Audit Committee, consisting of Douglas M. Karp, David
E. Libowitz and Jose Augusto Pinto Moreira, held one meeting. David E. Libowitz
resigned as a director of the Company in June 1998 and his board position was
filled by Gary D. Nusbaum. The Audit Committee recommends to the Board the firm
to be appointed as independent accountants to audit the Company's financial
statements, discusses the scope and results of the audit with the independent
accountants, reviews with management and the independent accountants the
Company's interim and year-end operating results, considers the adequacy of the
internal controls and audit procedures of the Company, and reviews the non-audit
services to be performed by the independent accountants.
During 1997, the Compensation Committee, consisting of Douglas M. Karp,
David E. Libowitz and Jose Augusto Pinto Moreira, held one meeting. The
Compensation Committee reviews general policy matters relating to compensation
and benefits of employees and officers of the Company and administers the Stock
Option Plan (as hereinafter defined). In addition, the Compensation Committee
considers proposals with respect to the creation of and changes to executive
compensation plans and reviews appropriate criteria for establishing performance
targets.
COMPENSATION OF DIRECTORS
Independent directors are eligible to receive an annual fee of $10,000,
a meeting fee of $1,000 for every meeting of the Board attended and each
committee meeting held separately and a $500 fee for each meeting of the Board
and each committee meeting participated in by telephone. All directors are
reimbursed for out-of-pocket expenses. Under the Stock Option Plan, the Company
may, from time to time and in the sole discretion of the Board, grant options to
directors who are not members of the Compensation Committee.
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for
services in all capacities awarded to, earned by, or paid to, any person acting
as the Company's Chief Executive Officer during 1997, regardless of the amount
of compensation paid, and the other most highly compensated executive officers
of the Company during 1997 whose aggregate cash and cash equivalent compensation
exceeded $100,000 (collectively, the "Named Executive Officers").
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION
------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY ($) BONUS ($)(1) COMPENSATION OPTIONS (#) COMPENSATION ($)(2)
----------------- ---- ---------- ------------ ------------ ----------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Hermano Studart
Lins de Albuquerque,..... 1997 $143,750 $150,000 $-0- 100,000 $6,250
Chief Executive Officer 1996 113,979 200,000 -0- 110,000 6,250
1995 98,463 111,500 -0- 49,788(3)
Carlos Andre Studart
Lins de Albuquerque,..... 1997 143,750 150,000 -0- 100,000 6,250
President and 1996 113,979 200,000 -0- 110,000 6,250
Chief Operating Officer 1995 98,463 111,500 -0- 49,788(3) --
Alvaro J. Aguirre,.......... 1997 143,750 150,000 -0- 100,000 6,250
Chief Financial Officer(4) 1996 62,499 200,000(5) -0- 110,000 6,250
</TABLE>
- -------------------
(1) Includes non-cash bonus payments made to the Named Executive Officers in
the form of Common Stock in the amounts of (i) for 1997, $25,000 to each
Named Executive Officer and (ii) for 1996, $123,333 to Messrs. Hermano Lins
and Carlos Andre Lins and $25,000 to Mr. Aguirre.
(2) Represents Company paid life insurance premiums.
(3) These options were exercised by Messrs. Hermano Lins and Carlos Andre Lins
in 1995.
(4) Mr. Aguirre joined the Company in June 1996.
(5) Includes a special one-time sign-on bonus in the amount of $50,000.
EMPLOYMENT AGREEMENTS
The Company and ITSA-Intercontinental Telecomunicacoes Ltda. ("ITSA")
have entered into employment agreements with each of Messrs. Hermano Lins
and Carlos Andre Lins, pursuant to which Mr. Hermano Lins serves full
time as Chief Executive Officer of the Company, Mr. Carlos Andre Lins serves
full time as President and Chief Operating Officer of the Company, and
each has agreed to serve in comparable executive positions at ITSA. The minimum
annual base salary under such agreements for each of Messrs. Lins is $125,000.
Such salaries are reviewed at least annually by the Board and may be increased
but not decreased. In addition, each of Messrs. Lins is eligible to receive an
annual bonus, payable by ITSA, in amounts to be determined by the Board taking
into consideration, among other things, the financial and operating performance
of the Company. Pursuant to each of Messrs. Lins's employment agreements, if the
Company terminates the executive's employment either without "cause" (as defined
therein) or because of the death of the executive, ITSA is required to pay the
executive any unpaid base salary accrued through the date of termination, plus
an amount equal to an additional 12 months' base salary. Although Brazilian law
does not permit employment agreements of this type to be for a fixed term, each
agreement does include a non-competition provision and a prohibition on the
solicitation of clients and employees.
The Company has also entered into an employment agreement with Mr.
Aguirre, pursuant to which Mr. Aguirre serves full time as Chief Financial
Officer of the Company until December 31, 1998, unless terminated earlier in
accordance with the terms of such agreement. The minimum annual base salary
under such agreement is $125,000. Such salary is reviewed at least annually by
the Board and may be increased but not decreased. In addition, Mr. Aguirre is
eligible to receive an annual bonus in amounts determined by the Board, taking
into consideration, among other things, the financial and operating performance
of the Company. Pursuant to Mr. Aguirre's employment agreement, if the Company
terminates Mr. Aguirre's employment because of the death or disability of Mr.
Aguirre, the Company is required to pay Mr. Aguirre or his estate any unpaid
base salary accrued through the date of termination, plus an amount equal to an
additional 12 months' base salary. If the Company terminates Mr. Aguirre without
"cause" (as defined therein), the Company is required to pay Mr. Aguirre any
unpaid base salary accrued through the date of termination, plus an amount equal
to the unpaid base salary for the balance of the term and the pro rata portion
of any agreed upon annual bonus. The agreement includes a non-competition
provision and a prohibition on the solicitation of clients and employees. Mr.
Aguirre has informed the Company that he does not intend to renew his employment
contract and will resign from his position as Chief Financial Officer and from
his board seat on or prior to December 31, 1998.
STOCK OPTIONS
STOCK OPTION PLAN
On July 18, 1996, the Board adopted and the stockholders of the Company
approved the Stock Option Plan (which plan, as subsequently amended in June
1997, is hereinafter referred to as the "Stock Option Plan"), which provides for
the grant to officers, key employees and consultants of the Company of both
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), and stock options that are
non-qualified for U.S. federal income tax purposes. The total number of shares
of Common Stock for which options may currently be granted pursuant
to the Stock Option Plan is 936,432, subject to certain adjustments
reflecting changes in the Company's capitalization. In addition, no employee may
receive options for more than 200,000 shares of Common Stock in the aggregate in
any fiscal year. The Stock Option Plan is administered by the Compensation
Committee. The Compensation Committee determines, among other things, which
officers, employees and consultants receive options under the plan, the time
when options are granted, the type of option (incentive stock options or
non-qualified stock options, or both) to be granted, the number of shares
subject to each option, the time or times when the options become exercisable,
and, subject to certain conditions discussed below, the option price and
duration of the options. Members of the Compensation Committee are not eligible
to receive options under the Stock Option Plan.
The exercise price for incentive stock options is determined by the
Compensation Committee, but may not be less than the fair market value on the
date of grant and the term of any such option may not exceed ten years from the
date of grant. With respect to any participant in the Stock Option Plan who owns
stock representing more than 10% of the voting power of the outstanding capital
stock of the Company, the exercise price of any incentive stock option may not
be less than 110% of the fair market value of such shares on the date of grant
and the term of such option may not exceed five years from the date of grant.
The exercise price of non-qualified stock options is determined by the
Compensation Committee on the date of grant, but may not be less than the par
value of the Common Stock on the date of grant, and the term of such option may
not exceed ten years from the date of grant.
Payment of the option price may be made by certified or bank cashier's
check, by tender of shares of Common Stock then owned by the optionee or by any
other means acceptable to the Company. Options granted pursuant to the Stock
Option Plan are not transferrable, except by will or the laws of descent and
distribution in the event of death. During an optionee's lifetime, the options
are exercisable only by the optionee.
<PAGE>
The Board has the right at any time and from time to time to amend or
modify the Stock Option Plan, without the consent of the Company's stockholders
or optionees; provided that no such action may adversely affect options
previously granted without the optionee's consent, and provided further that no
such action, without the approval of the stockholders of the Company, may
increase the total number of shares of Common Stock which may be purchased
pursuant to options granted under the plan, expand the class of persons eligible
to receive grants of options under the plan, decrease the minimum option price,
extend the maximum term of options granted under the plan or extend the term of
the plan. The expiration date of the Stock Option Plan after which no option may
be granted thereunder is 2006.
For a description of the terms of the proposed amended Stock Option Plan,
see Proposal No. 2.
STOCK OPTION GRANTS
The following table sets forth information regarding grants of options
to purchase Common Stock during the fiscal year ended December 31, 1997 to each
of the Named Executive Officers. No stock appreciation rights were granted
during 1997.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1997
INDIVIDUAL GRANTS
-------------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF AT ASSUMED ANNUAL
SECURITIES TOTAL OPTIONS RATES OF STOCK PRICE
UNDERLYING GRANTED TO EXERCISE APPRECIATION FOR
OPTIONS EMPLOYEES IN PRICE EXPIRATION OPTION TERM (4)
NAME GRANTED (#)(1) 1997(2) ($/SHARE)(3) DATE -----------------------
- ---- -------------- ------------ ----------- ----------- (5%) (10%)
---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Hermano Studart Lins de
Albuquerque.................. 50,000 10.3% $6.00 10/31/07 $188,669 $478,123
50,000 10.3 5.626 12/26/07 176,877 448,240
Carlos Andre Studart Lins
de Albuquerque............... 50,000 10.3 6.00 10/31/07 188,669 478,123
50,000 10.3 5.626 12/26/07 176,877 448,240
Alvaro J. Aguirre............... 50,000 10.3 6.00 10/31/07 188,669 478,123
50,000 10.3 5.626 12/26/07 176,877 448,240
</TABLE>
- -----------
(1) These options vest and become fully exercisable as to 20% on the first
anniversary of the date of grant and as to an additional 20% on each
anniversary thereafter until all such options are fully vested and
exercisable.
(2) The Company granted options to purchase a total of 483,500 shares of Common
Stock in 1997.
(3) Each of the Company's stock options were granted at or above the fair
market value on the date of grant. The fair market value of the Common
Stock on December 31, 1997 was $5.750 per share.
(4) Amounts reported in these columns represent amounts that may be realized
upon exercise of options immediately prior to the expiration of their term
assuming the specified compounded rates of appreciation (5% and 10%) on the
Common Stock over the term of the options. These assumptions are based on
rules promulgated by the Securities and Exchange Commission (the
"Commission") and do not reflect the Company's estimate of future stock
price appreciation. Actual gains, if any, on the stock option exercises and
Common Stock holdings are dependent on the timing of such exercise and the
future performance of the underlying Common Stock. There can be no
assurance that the rates of appreciation assumed in this table can be
achieved or that the amounts reflected will be received by the option
holder.
YEAR-END VALUE TABLE
The following table sets forth information regarding the number and
year end value of unexercised options held at December 31, 1997, by each of the
Named Executive Officers during fiscal 1997. No stock appreciation rights were
exercised by the Named Executive Officers during fiscal 1997.
<TABLE>
<CAPTION>
FISCAL 1997 OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED "IN-THE-MONEY" (1)
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END (#) YEAR-END ($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------- -------------------------
<S> <C> <C>
Hermano Studart Lins
de Albuquerque........................ 22,000/188,000 $0/$6,250
Carlos Andre Studart Lins
de Albuquerque........................ 22,000/188,000 0/6,250
Alvaro J. Aguirre........................ 22,000/188,000 0/6,250
</TABLE>
- ------------
(1) Options are "in-the-money" if the fair market value of the underlying
securities exceeds the exercise price of the options. The amounts set
forth represent the difference between $5.750 per share, the fair
market value of the Common Stock issuable upon exercise of options at
December 31, 1997, and the exercise price of the option, multiplied by
the applicable number of options.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the members of the Compensation Committee were Messrs. Karp,
Libowitz and Moreira. Mr. Karp is the Chairman of the Board, a position which
was an officer position of the Company until December 1996. Mr. Karp is a
general partner of Warburg, Pincus & Co., a New York general partnership ("WP")
which is the sole general partner of Warburg, Pincus Investors, L.P. ("Warburg,
Pincus"). Mr. Moreira is the Executive Vice President of Finance and
Administration of Abril S.A. Mr. Libowitz, who resigned as a director June 1998,
is a general partner of WP.
BOARD AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION POLICY
The Company's compensation program is designed to attract, motivate, reward
and retain executive personnel capable of making significant contributions to
the long-term success of the Company. During 1997, the Company's compensation
program consisted of base salary, an annual incentive bonus (paid in a
combination of shares of Common Stock and cash) and stock option grants. Base
salary provides the foundation for the Company's executive pay; its purpose is
to compensate the executive for performing his basic duties. The purpose of
annual incentive bonuses is to provide rewards for favorable performance and
achievement of intermediate-term objectives while the purpose of stock option
grants is to provide incentives and rewards for long-term performance and to
motivate long-term strategic planning.
BASE SALARY. Base salaries for the Company's executive officers are set
annually subject to certain minimum requirements established under the
executives' employment agreement. See "Executive Compensation -Employment
Agreements." During 1997, the Company did not employ a formula approach that
links cash compensation to corporate performance nor did it utilize any formal
survey or other compilation of empirical data on executive compensation paid by
other companies. Instead, executive compensation was determined based on a
number of subjective factors, including individual responsibilities,
performance, contribution and experience, as well as the Company's performance
as compared with the prior year and general economic factors. The base salary of
$143,750 paid to the Company's Chief Executive Officer in 1997 was contractually
based.
<PAGE>
INCENTIVE BONUSES. The Company's executive officers and certain other
management personnel are eligible to receive annual incentive bonuses which are
linked to the financial and operating performance of the Company and the
individual's performance. Based on the actual performance of the Company and the
Chief Executive Officer during 1997, the Chief Executive Officer received a
$150,000 bonus in 1997, $25,000 of which was paid in shares of Common Stock and
$125,000 of which was paid in cash. Such bonus payment was determined based on a
number of factors, including the Chief Executive Officer's management of the
Company during the past year, a period of economic instability in Brazil.
STOCK OPTIONS. The Company's compensation program also utilizes stock
option awards, which are intended to provide an additional incentive to increase
stockholder value. All stock option awards are granted with an exercise price
equal to 100% of fair market value of the Common Stock on the date of grant and
vest at a rate of 20% annually. Currently, no specific formula is used to
determine option awards to employees but instead awards are based on a
subjective evaluation of each individual's overall past and expected future
contribution to the Company. During 1997, the Chief Executive Officer received
two grants of stock options each in the amount of 50,000 shares.
SECTION 162(M) OF THE CODE
In connection with making decisions with respect to executive
compensation, the Board and Compensation Committee have taken into account, as
one of the factors which they consider, the provisions of Section 162(m) of the
Code, which limits the deductibility by the Company of certain categories of
compensation in excess of $1,000,000 paid to certain executive officers.
Respectfully submitted,
Douglas M. Karp
Jose Augusto Pinto Moreira
David Libowitz
CERTAIN TRANSACTIONS
In March 1996, the Company issued and sold 783,700 shares of Common
Stock and warrants to purchase an additional 567,952 shares of Common Stock
(after giving effect to a restructuring (the "Restructuring")) to Warburg,
Pincus for approximately $5.1 million, and issued and sold 287,664 shares of
Common Stock and warrants to purchase an additional 208,372 shares of Common
Stock (after giving effect to the Restructuring) to Tevecap S.A. ("Tevecap") for
approximately $1.9 million. Such warrants had an exercise price of $6.52 per
share. The warrants were exercisable for cash, the cancellation of indebtedness
or on a cashless exercise basis. In September 1997, Warburg, Pincus exercised
its warrants for cash and Tevecap exercised its warrants on a cashless exercise
basis. The warrants held by Tevecap were converted into shares of Common Stock
based on the difference between the exercise price of $6.52 per share and $8.25,
the average closing price of the Common Stock on the Nasdaq National Market
during the five trading days preceding the date of exercise.
From time to time during January 1994 to March 1996, Tevecap and
certain of its affiliates made short-term loans to the Company for working
capital purposes. During this period, the maximum amount outstanding pursuant to
such loans was approximately $6.4 million. During April 1996, the Company
resumed borrowing from Tevecap and its affiliates for working capital purposes,
all of which borrowings were repaid with the proceeds from the Company's initial
public offering with the exception of $200,000 which was due in each of February
1997 and 1998, each of which has been repaid in full.
<PAGE>
In July 1994, the Company, Tevecap and certain other parties thereto
entered into an agreement pursuant to which Tevecap agreed to provide
programming exclusively to the Company in certain areas (the "Programming
Agreement"). In June 1996, the Programming Agreement was amended and restated
effective August 2, 1996. In the years ended December 31, 1995, 1996 and 1997,
TVA Sistema de Televisao, S.A. and its affiliates' revenues from the Company
aggregated approximately $1.3 million, $6.7 million and $10.4 million,
respectively, net of discounts on programming fees compared to list prices. No
discounts were received in 1996 or 1997 and no such discounts are expected in
the future. Through September 1997, the Company purchased from Tevecap a program
guide which it distributed to its subscribers monthly. In October 1997, the
Company discontinued purchasing the programming guide produced by Tevecap and
began producing and distributing its own programming guide. Amounts paid to
Tevecap in 1995, 1996 and 1997 were $113,000, $750,000 and $679,000,
respectively.
In late 1994, TV Filme Servicos de Telecomunicacoes Ltda. ("TV Filme
Servicos") purchased licenses to operate the Company's wireless cable systems in
Goiania and Belem from an affiliate of TVA Sistema de Televisao, S.A. for a
purchase price of $400,000 each. The Company believes such prices were below
fair market value. Such purchase prices were payable in equal annual
installments of $100,000 per license, due in February of each of the years 1995,
1996, 1997 and 1998. No amounts remain outstanding.
In connection with the Company's initial public offering, the Company
entered into the Restructuring pursuant to which all of the preferred stock of
ITSA was converted into common stock of ITSA and each share of common stock of
ITSA was exchanged for 1,844 shares of Common Stock of the Company. Pursuant to
the Restructuring: (i) 51% of the voting stock of TV Filme Servicos was
transferred to TVTEL Ltda., an entity all the stock of which is owned by certain
stockholders of the Company who are Brazilian nationals, including certain
directors and executive offices of the Company (namely Tevecap, Mrs. Maria Nise
Lins, Messrs. Hermano Lins and Carlos Andre Lins and Ms. Maria Veronica Lins),
with ITSA retaining 49% of the voting stock and 83% of the economic interests in
TV Filme Servicos; (ii) the operating assets of the wireless cable systems of
Brasilia were transferred from TV Filme Servicos to TV Filme Brasilia Servicos
de Telecomunicacoes Ltda.; and (iii) TV Filme Servicos entered into various
agreements with ITSA and its subsidiaries pursuant to which, among other things,
TV Filme Servicos has authorized ITSA to operate the existing wireless cable
systems under its current licenses. The Company has a representative on the
executive management team of TV Filme Servicos and any sale or transfer of any
current or future license held by TV Filme Servicos is prohibited. ITSA entered
into various agreements with TV Filme Servicos which authorize ITSA's
subsidiaries to operate the existing wireless cable systems under its current
licenses and all other pay television systems under future licenses. As of
November 1997, the licenses to operate the existing wireless cable systems were
transferred from TV Filme Servicos to the respective operating companies, TV
Filme Brasilia Servicos de Telecomunicacoes Ltda., TV Filme Goiania Servicos de
Telecomunicacoes Ltda. and TV Filme Belem Servicos de Telecomunicacoes Ltda.
The Company believes that the above transactions were or are on terms
no less favorable to the Company than could have been obtained in transactions
with independent third parties. All future transactions between the Company and
its officers, directors, principal stockholders or their respective affiliates,
will be on terms no less favorable to the Company than can be obtained from
unaffiliated third parties.
<PAGE>
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock, as of August 21, 1998, by (i) each
person known to the Company to be the beneficial owner of more than 5% of the
Common Stock, (ii) each of the Company's directors, (iii) each of the Named
Executive Officers, and (iv) all directors and executive officers as a group.
All information with respect to beneficial ownership has been furnished to the
Company by the respective stockholders of the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENTAGE
BENEFICIAL OF
NAME AND ADDRESS (1) OWNERSHIP (2) CLASS (2)
-------------------- ------------------ -------------
<S> <C> <C>
Warburg, Pincus Investors, L.P.
466 Lexington Avenue
New York, New York 10017(3).................................. 4,937,008 45.6%
Tevecap S.A.
Rua do Rocio, 313
Suite 101
Sao Paulo, Brazil............................................ 1,500,455 13.9
Maria Nise Studart Lins de Albuquerque.......................... 1,069,520 9.9
Hermano Studart Lins de Albuquerque(4).......................... 313,134 2.9
Carlos Andre Studart Lins de Albuquerque(4)..................... 313,134 2.9
Douglas M. Karp(5).............................................. 4,937,008 45.6
Jose Augusto Pinto Moreira(6)................................... 1,500,455 13.9
Douglas Duran(6)................................................ 1,500,455 13.9
Gary D. Nusbaum(5).............................................. 4,937,008 45.6
Alvaro J. Aguirre(4)............................................ 53,294 *
All executive officers and directors
as a group (7 persons)........................................ 7,117,025 65.0%
</TABLE>
- --------------
* Less than 1%.
(1) Unless otherwise indicated above or in footnote 5 below, the address
for each stockholder identified above is TV Filme, Inc. c/o
ITSA-Intercontinental Telecomunicacoes Ltda., SCS, Quadra 07-Bl.A, Ed.
Executive Tower, Sala 601, 70.300-911 Brasilia-DF, Brazil.
(2) Beneficial ownership is determined in accordance with the rules of the
Commission. In computing the number of shares beneficially owned by a
person and the percentage ownership of that person, shares of Common Stock
subject to options and warrants held by that person that are currently
exercisable or exercisable within 60 days of August 21, 1998 are deemed
outstanding. Such shares, however, are not deemed outstanding for the
purposes of computing the percentage ownership of any other person. Except
as indicated in the footnotes to this table, each stockholder named in the
table has sole voting and investment power with respect to the shares set
forth opposite such stockholder's name.
(3) E.M. Warburg, Pincus & Co., LLC, a New York limited liability company
("E.M. Warburg"), manages Warburg, Pincus. WP, the sole general partner of
Warburg, Pincus, has a 20% interest in the profits of Warburg, Pincus.
Lionel I. Pincus is the managing partner of WP and the managing member of
E.M. Warburg and may be deemed to control both WP and E.M. Warburg. The
members of E.M. Warburg are substantially the same as the partners of WP.
<PAGE>
(4) Includes the following number of shares of Common Stock which the Named
Executive Officers have the right to acquire through the exercise of
options within 60 days of August 21, 1998: Mr. Hermano Lins, 44,000; Mr.
Carlos Andre Lins, 44,000; and Mr. Aguirre, 44,000.
(5) All of the shares indicated as owned by Messrs. Karp and Nusbaum are owned
directly by Warburg, Pincus and are included because of their affiliation
with Warburg, Pincus. Mr. Karp, the Chairman of the Board of the Company,
and Mr. Nusbaum, a Director of the Company, are Managing Directors and
members of E.M. Warburg and General Partners of WP. As such, Messrs. Karp
and Nusbaum may be deemed to have an indirect pecuniary interest, within
the meaning of Rule 16a-1 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), in an indeterminate portion of the shares of
Common Stock beneficially owned by Warburg, Pincus and WP. Messrs. Karp and
Nusbaum disclaim "beneficial ownership" of these shares within the meaning
of Rule 13d-3 under the Exchange Act. The address of Messrs. Karp and
Nusbaum is c/o E.M. Warburg, Pincus & Co., LLC, 466 Lexington Avenue, New
York, New York 10017.
(6) All of the shares indicated as owned by Messrs. Moreira and Duran are owned
directly by Tevecap and are included because of Messrs. Moreira's and
Duran's affiliations with Tevecap. Messrs. Moreira and Duran disclaim
"beneficial ownership" of these shares within the meaning of Rule 13d-3
under the Exchange Act.
CUMULATIVE TOTAL STOCKHOLDER RETURN
The following graph shows a comparison of cumulative total returns on
the Common Stock against the cumulative total returns for The Nasdaq Stock
Market - U.S. and Foreign Index and The Nasdaq Telecommunications Index. The
graph assumes an investment of $100 on July 30, 1996 (the date the Common Stock
began trading on The Nasdaq National Market) in the Common Stock, The Nasdaq
Stock Market - U.S. and Foreign Index and The Nasdaq Telecommunications Index.
Cumulative total return assumes reinvestment of dividends. The performance shown
is not necessarily indicative of future performance.
[PERFORMANCE GRAPH]
<PAGE>
<TABLE>
<CAPTION>
Monthly Cumulative Total Values($)
---------------------------------------------------------------------------------
The Nasdaq
Stock Market - U.S. and The Nasdaq
Month-End The Company Foreign Index Telecommunications Index
- ---------------- ----------- ------------------------ -------------------------
<S> <C> <C> <C>
July 1996 113 101 102
August 1996 139 107 106
September 1996 138 115 110
October 1996 150 113 105
November 1996 138 120 107
December 1996 128 120 110
January 1997 125 129 112
February 1997 113 122 109
March 1997 124 114 102
April 1997 111 117 106
May 1997 98 131 119
June 1997 104 135 128
July 1997 99 149 136
August 1997 86 148 132
September 1997 79 158 149
October 1997 60 149 153
November 1997 45 149 154
December 1997 58 150 162
</TABLE>
PROPOSAL 2 - PROPOSED AMENDMENT TO STOCK OPTION PLAN
The Board has amended the Stock Option Plan, subject to approval of the
stockholders, to provide for an additional 800,000 shares of Common Stock which
may be issued thereunder upon exercise of stock options. Prior to this
amendment, the Stock Option Plan provided for the issuance of 936,432 shares to
participants, of which 35,932 remain available for grants as of August 21, 1998.
The Board deems it advisable to increase the number of available shares of
Common Stock so as to provide for future grants to Company employees.
The following summary of the plan, as proposed to be amended, is
subject to the complete terms of the plan, a copy of which is attached to this
Proxy Statement as Annex A.
1. ADMINISTRATION. The plan is administered by the Compensation
Committee, which must consist of not less than two non-employee director
members. Subject to the provisions of the plan, the Compensation Committee has
sole authority in its absolute discretion to (i) select eligible participants,
authorize the granting of incentive stock options ("Incentive Stock Options")
within the meaning of Section 422 of the Code, or options that are not intended
to so qualify ("Nonstatutory Stock Options"), (ii) determine (subject to the
terms of the plan) the terms and timing of grants, (iii) adopt, amend and
rescind rules and regulations relating to the plan, and (iv) generally interpret
and administer the plan.
2. PARTICIPANTS. Subject to the terms of the plan, all officers, key
employees and consultants of the Company or a subsidiary of the Company
(excluding any person who is a member of the Compensation Committee) are
eligible to receive grants under the plan. Currently, there are approximately 40
participants in the plan.
<PAGE>
3. AWARDS. Options granted under the plan may be either Incentive Stock
Options or Nonstatutory Stock Options. Options may be granted to participants in
such number, at such times, and subject to such terms and conditions as the
Compensation Committee may determine, except that: (i) the option price of an
Incentive Stock Option must be at least equal to the greater of (a) the fair
market value of the Common Stock on the date of grant, or (b) the par value of
the Common Stock; (ii) the option price of a Nonstatutory Stock Option must be
at least equal to the par value of the Common Stock; (iii) no option may be
exercised more than ten years after the date of grant. With respect to each
option granted under the plan, the Compensation Committee may determine and
reflect in the option agreement such other terms, provisions and conditions
consistent with the plan as may be determined by the Compensation Committee,
including, without limitation, provisions to assist the participant in financing
the purchase of the Common Stock through the exercise of options and provisions
for the forfeiture of, or restrictions on, resale or other disposition of shares
of Common Stock acquired under the plan.
Payment for the shares of Common Stock purchased upon exercise of an
option must be made in full upon exercise of the option, by certified or bank
cashier's check payable to the order of the Company or by any other means
(including, without limitation, tender of shares of Common Stock then owned by
the participant) acceptable to the Company. A participant will have no rights as
a stockholder with respect to any share of Common Stock covered by an option
until the participant becomes a holder of record of such share, and will not be
entitled to any dividends or distributions or other rights in respect of such
share, for which the record date is prior to the date on which the participant
becomes the holder of record thereof.
Each option issued to a participant will be exercisable in accordance
with its terms so long as the participant is an employee of the Company or its
subsidiaries. In addition, to the extent then exercisable, options will be
exercisable by a participant for a period of thirty (30) days after termination
of employment or consulting relationship or such longer period of time as may be
permitted by the Code (but in no event later than the expiration date of the
option). Options will vest in accordance with the schedule established by the
Compensation Committee at the time of grant and will not be exercisable until
vested.
4. TERMINATION AND AMENDMENTS. The Company expects the plan to continue
until July 25, 2006. However, the Board, subject to certain plan provisions,
may, at any time and from time to time, amend the plan without any further
approval of the stockholders of the Company or the participants under the plan,
PROVIDED, HOWEVER, that no such action may adversely affect options theretofore
granted under the plan without the optionee's consent. Notwithstanding the
foregoing, the Board may not amend the plan without the approval of the
Company's stockholders to: (i) increase the total number of shares of Common
Stock which may be purchased pursuant to options granted under the plan (except
as provided therein); (ii) expand the class of officers, employees or
consultants eligible to receive options under the plan; (iii) decrease the
minimum option price; (iv) extend the maximum term of options granted under the
plan; or (v) extend the term of the plan.
5. TRANSFERABILITY. Except for a transfer of options to Brazilian
corporations where any such corporation is wholly-owned by a participant, no
option may be transferred except by will or the laws of descent and
distribution. During the participant's lifetime, options may be exercised only
by the participant.
<PAGE>
6. CONSIDERATION. The consideration to be received by the Company for
the granting of options is the continued employment of participants.
Consideration for the issuance of shares of Common Stock under the plan will
consist of the payment of the option price upon exercise of an option.
7. TAX CONSEQUENCES. The grant of an option will have no immediate tax
consequences for the participant or the Company. The participant will have no
taxable income upon exercising an Incentive Stock Option (except that an
alternative minimum tax may apply), and the Company will not receive a deduction
when an Incentive Stock Option is exercised. If the participant does not dispose
of the shares of Common Stock acquired on exercise of an Incentive Stock Option
within the two-year period beginning on the day after the grant of the Incentive
Stock Option or within one year after the transfer of such shares to the
participant, the gain or loss on a subsequent sale will be a capital gain or
loss to the participant. The Company would not be entitled to any deduction in
such event. If the participant disposes of the shares within the two-year or
one-year period described above, the participant generally will realize ordinary
income and the Company will be entitled to a corresponding deduction. Upon
exercising a Nonstatutory Stock Option, the participant must recognize ordinary
income in an amount equal to the difference between the exercise price and the
fair market value of the Common Stock on the date of exercise, unless the shares
of Common Stock received are subject to certain restrictions. The Company is
entitled to a deduction for the same amount as of the exercise date (or the date
the restrictions lapse).
Awards granted under the plan that are settled in cash or shares of
Common Stock that are either transferable or not subject to a substantial risk
of forfeiture are taxable as ordinary income in an amount equal to the cash or
the fair market value of the shares received. Awards granted under the plan that
are settled in shares of Common Stock that are subject to restrictions as to
transferability or subject to a substantial risk of forfeiture are taxable as
ordinary income in an amount equal to the fair market value of the shares
received at the first time such shares become transferable or not subject to a
substantial risk of forfeiture, whichever occurs earlier.
The Company will receive a deduction for the amount recognized as
income by the participant, subject to the provisions of Section 162(m) of the
Code, which provides for a possible denial of a tax deduction to the Company for
compensation for certain key executive officers in excess of $1.0 million in any
year.
The tax treatment upon disposition of shares of Common Stock acquired
under the plan will depend on how long the shares have been held. In the case of
shares of Common Stock acquired through exercise of an option, the tax treatment
will also depend on whether or not the shares were acquired by exercising an
Incentive Stock Option. There will be no tax consequences to the Company upon
disposition of shares of Common Stock acquired under the plan, except that the
Company may receive a deduction in the case of disposition of shares acquired
under an Incentive Stock Option before the applicable holding period has been
satisfied.
8. OTHER INFORMATION. The closing price of the Common Stock on August 19,
1998 was $2-5/8.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE STOCK OPTION PLAN.
PROPOSAL 3 - RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
<PAGE>
The Board desires to obtain stockholder ratification of the resolution
appointing Ernst & Young Auditores Independentes S.C., as independent
accountants for the Company for fiscal year 1998. Ernst & Young Auditores
Independentes S.C. served as the Company's auditors for the fiscal year ended
December 31, 1997.
If the appointment of Ernst & Young Auditores Independentes S.C. is not
ratified, the adverse vote will be considered as an indication to the Board that
it should select other independent accountants for the following fiscal year.
Given the difficulty and expense of making any substitution of accountants at
this point in the fiscal year, it is contemplated that the appointment for
fiscal year 1998 will be permitted to stand unless the Board finds other good
reason for making a change.
A representative of Ernst & Young Auditores Independentes S.C. will
attend the Annual Meeting, will have an opportunity to make a statement if he or
she desires to do so, and will be available to respond to appropriate questions.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG AUDITORES INDEPENDENTES S.C. AS INDEPENDENT
AUDITORS FOR THE COMPANY FOR FISCAL YEAR 1998.
COSTS OF SOLICITATION
The cost of preparing, printing and mailing this Proxy Statement and
the accompanying proxy card, and the cost of solicitation of proxies on behalf
of the Board will be borne by the Company. In addition to the use of the mail,
proxies may be solicited personally or by telephone or by regular employees of
the Company without additional compensation. Banks, brokerage houses and other
institutions, nominees or fiduciaries will be requested to forward the proxy
materials to the beneficial owners of the Common Stock held of record by such
persons and entities and will be reimbursed for their reasonable expenses
incurred in connection with forwarding such material.
OTHER MATTERS
As of the date of this Proxy Statement, the Board knows of no other
matters which will be brought before the Annual Meeting. In the event that any
other business is properly presented at the Annual Meeting, it is intended that
the persons named in the enclosed proxy will have authority to vote such proxy
in accordance with their judgment on such business.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
certain officers and persons holding more than 10% of a registered class of the
Company's equity securities to file reports of ownership and reports of changes
in ownership with the Commission and The Nasdaq National Market. Directors,
certain officers and greater than 10% stockholders are also required by
Commission regulations to furnish the Company with copies of all such reports
that they file. Based on the Company's review of copies of such forms provided
to it, the Company believes that all filing requirements were complied with
during the fiscal year ended December 31, 1997.
<PAGE>
SUBMISSION OF STOCKHOLDER PROPOSALS
Stockholder proposals submitted for inclusion in the Proxy Statement to
be issued in connection with the Company's 1999 Annual Meeting of Stockholders
must be mailed to the Corporate Secretary, TV Filme, Inc., c/o John Capetta,
Kelley Drye & Warren LLP, Two Stamford Plaza, 281 Tresser Blvd., Stamford, CT.
06901 and must be received by the Corporate Secretary on or before April 7,
1999. In addition, stockholder proposals for presentation at the 1999 Annual
Meeting must be received in accordance with the Company's advance notice
provisions. See "General Information Relating to the Board of Directors --
Committees of the Board."
ANNUAL REPORT
A copy of the Company's Annual Report on Form 10-K is being mailed with
this Proxy Statement to each stockholder entitled to vote at the Annual Meeting.
Stockholders not receiving a copy of such Annual Report on Form 10-K may obtain
one, without charge, by writing or calling James P. Prenetta of Kelley Drye &
Warren LLP, 101 Park Avenue, New York, New York 10178, telephone (212) 808-7537.
By Order of the Board of Directors,
/s/ Hermano Studart Lins de Albuquerque
Hermano Studart Lins de Albuquerque
SECRETARY
August 24, 1998
<PAGE>
ANNEX A
TV FILME, INC.
AMENDED AND RESTATED STOCK OPTION PLAN
--------------------------------------
ARTICLE I
PURPOSE
This TV Filme, Inc. Amended and Restated Stock Option Plan (the "Plan") is
intended as an incentive and to encourage stock ownership by officers, key
employees and consultants of TV Filme, Inc. (the "Company") to provide them with
a more direct stake in the Company's future welfare and to encourage them to
continue to provide services to the Company.
The term "Company," when used in the Plan with reference to eligibility and
employment, shall include the Company and its subsidiaries. The word
"subsidiary," when used in the Plan, shall mean any subsidiary of the Company
within the meaning of Section 424(f) of the Internal Revenue Code of 1986, as
amended (the "Code").
It is intended that certain options granted under the Plan will qualify as
"incentive stock options" under Section 422 of the Code.
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Company's Compensation Committee (the
"Committee") appointed by the Board of Directors of the Company (the "Board")
that shall consist solely of two or more non-employee director members within
the meaning of the rules promulgated under Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). Subject to the provisions
of the Plan, the Committee shall have sole authority, in its absolute
discretion: (a) to determine which of the eligible officers, employees and
consultants of the Company shall be granted options; (b) to authorize the
granting of both incentive stock options and nonstatutory stock options; (c) to
determine the times when options shall be granted and the number of shares to be
optioned and the times when options shall be repurchased and the number of
options to be repurchased; (d) to determine the option price of the shares
subject to each option, which price shall not be less than the minimum specified
in ARTICLE V (or ARTICLE VII, if applicable); (e) to determine the time or times
when each option becomes exercisable, the duration of the exercise period and
any other restrictions on the exercise of options issued hereunder (subject to
the provisions of ARTICLE VI and, if applicable, ARTICLE VII); (f) to prescribe
the form or forms of the option agreements under the Plan (which forms shall be
consistent with the terms of the Plan but need not be identical); (g) to adopt,
amend and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan; and (h) to construe and interpret
the Plan, the rules and regulations and the option agreements under the Plan and
to make all other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations and interpretations of
the Committee shall be final and binding on all optionees.
<PAGE>
ARTICLE III
COMMON STOCK
The stock to be optioned under the Plan shall be authorized shares of
common stock, par value $.01 per share, of the Company (the "Common Stock").
Under the Plan, the total number of shares of Common Stock which may be issued
pursuant to options granted hereunder shall not exceed, in the aggregate,
1,736,432 shares, except as such number of shares shall be adjusted in
accordance with the provisions of ARTICLE X hereof. The Company shall at all
times reserve a sufficient number of shares of Common Stock for issuance
pursuant to the Plan and any stock option agreements issued pursuant to the
Plan.
The number of shares of Common Stock available for grant of options under
the Plan shall be decreased by the sum of the number of shares with respect to
which options have been issued and are then outstanding, and the number of
shares issued upon exercise of options under the Plan. In the event that any
outstanding option under the Plan for any reason expires, is terminated or is
cancelled prior to the end of the period during which options may be granted,
the shares of Common Stock called for by the unexercised portion of such option
may again be subject to an option grant under the Plan.
ARTICLE IV
ELIGIBILITY OF PARTICIPANTS
Subject to ARTICLE VII, in the case of incentive stock options, officers
and key employees of the Company (excluding any person who is a member of the
Committee) shall be eligible to receive options under the Plan. Options which
are not incentive stock options may be granted to officers, key employees and
consultants (excluding any person who is a member of the Committee); provided,
however that no employee may receive options to purchase more than 200,000
shares of Common Stock in the aggregate in any fiscal year of the Company. For
purposes of this Plan, an "employee" shall mean any person, including officers
of the Company, employed by the Company or any subsidiary of the Company.
Neither service as a director nor the payment of a director's fee by the Company
shall be sufficient to constitute a person an "employee" of the Company.
ARTICLE V
OPTION PRICE
In the case of each incentive stock option granted under the Plan, subject
to ARTICLE VII, the option price shall be at least equal to the greater of (i)
the fair market value of the Common Stock at the time the option was granted or
(ii) the par value of the Common Stock. The fair market value shall be deemed
for all purposes of the Plan to be the mean between the highest and lowest sale
prices reported as having occurred on any national securities exchange (an
"Exchange") on which the Common Stock may be listed and traded on the last
business day prior to the date the option is granted, or, if there is no such
sale on that date, then on the last preceding date on which such a sale was
reported. If the Common Stock is not listed on any Exchange but the Common Stock
is quoted in the National Market System of the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") on a last sale basis,
then the fair market value of the Common Stock shall be deemed to be the mean
between the high and low price reported on the last business day prior to the
date the option is granted, or, if there is no such sale on that date, then on
the last preceding date on which a sale was reported. If the Common Stock is not
quoted in the National Market System of NASDAQ on a last sale basis, but the
Common Stock is otherwise quoted on NASDAQ, then the fair market value of the
Common Stock shall be deemed to be the mean between the high and low bid prices
on NASDAQ for the Common Stock on the last business day prior to the date the
option is granted. If the Common Stock is not listed on an Exchange or quoted on
NASDAQ, then the fair market value of the Common Stock shall mean the amount
determined by the Board to be the fair market value based upon a good faith
attempt to value the Common Stock accurately and computed in accordance with
applicable regulations of the Internal Revenue Service. In no event shall the
option price be less than the par value per share of Common Stock on the date an
option is granted.
<PAGE>
In the case of each nonstatutory stock option granted under the Plan, the
option price shall be such price as may be determined by the Committee in its
sole discretion, provided that the option price shall be at least equal to the
par value of the Common Stock.
ARTICLE VI
EXERCISE AND TERMS OF OPTIONS
If an option is exercisable in installments, installments or portions
thereof which are exercisable and not exercised shall remain exercisable.
Any other provision of the Plan to the contrary notwithstanding, but
subject to ARTICLE VII in the case of incentive stock options, no option shall
be exercised after the date ten years from the date of grant of such option (the
"Termination Date").
ARTICLE VII
SPECIAL PROVISIONS APPLICABLE
TO INCENTIVE STOCK OPTIONS ONLY
To the extent the aggregate fair market value (determined as of the time
the option is granted) of the Common Stock with respect to which any incentive
stock options granted under the Plan may be exercisable for the first time by
the optionee in any calendar year (under the Plan or any other stock option plan
of the Company), exceeds $100,000, such options shall not be considered
incentive stock options, but shall be considered nonstatutory stock options for
purposes of the Code. This Article VII shall be applied by taking options into
account in the order in which they were granted.
No incentive stock option may be granted to an individual who, at the time
the option is granted, owns directly, or indirectly within the meaning of
Section 424(d) of the Code, stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or of any parent or
subsidiary thereof unless such option (i) has an option price of at least 110
percent of the fair market value of the Common Stock on the date of the grant of
such option; and (ii) cannot be exercised more than five years after the date it
is granted.
Each optionee who receives an incentive stock option must agree to notify
the Company in writing immediately after the optionee makes a disqualifying
disposition of any Common Stock acquired pursuant to the exercise of an
incentive stock option. A disqualifying disposition is any disposition
(including any sale) of such Common Stock before the later of (a) two years
after the date the optionee was granted the incentive stock option or (b) one
year after the date the optionee acquired Common Stock by exercising the
incentive stock option.
<PAGE>
ARTICLE VIII
PAYMENT FOR SHARES
Payment for shares of Common Stock purchased under an option granted
hereunder shall be made in full upon exercise of the option, by certified or
bank cashier's check payable to the order of the Company or by any other means
(including, without limitation, tender of shares of Common Stock then owned by
the optionee) acceptable to the Company. The Common Stock purchased shall
thereupon be promptly delivered; provided, however, that the Company may, in its
discretion, require that an optionee pay to the Company, at the time of
exercise, such amount as the Company deems necessary to satisfy its obligation,
if any, to withhold Federal, state or local income or other taxes incurred by
reason of the exercise or the transfer of shares thereupon.
ARTICLE IX
NON-TRANSFERABILITY OF OPTION RIGHTS
Except for the transfer of options to corporations where any such
corporation is wholly-owned by an optionee, no option shall be transferable
except by will or the laws of descent and distribution. During the lifetime of
the optionee, the option shall be exercisable only by him.
ARTICLE X
ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC.
The aggregate number of shares of Common Stock which may be purchased
pursuant to options granted hereunder, the number of shares of Common Stock
covered by each outstanding option and the price per share of each such option
shall be appropriately adjusted for any increase or decrease in the number of
outstanding shares of stock resulting from a stock split, reverse stock split or
other subdivision or consolidation of shares of Common Stock or for other
capital adjustments or payments of stock dividends or distributions or other
increases or decreases in the outstanding shares of Common Stock without receipt
of consideration by the Company. Any adjustment shall be conclusively determined
by the Committee.
In the event of any change in the outstanding shares of Common Stock by
reason of any recapitalization, merger, consolidation, spin-off, combination or
exchange of shares or other corporate change, or any distributions to common
stockholders other than cash dividends, the Committee shall make such
substitution or adjustment, if any, as it deems to be equitable, as to the
number or kind of shares of Common Stock or other securities issued or reserved
for issuance pursuant to the Plan, and the number or kind of shares of Common
Stock or other securities covered by outstanding options, and the option price
thereof. In instances where another corporation or other business entity is
being acquired by the Company, and the Company has assumed outstanding employee
option grants and/or the obligation to make future or potential grants under a
prior existing plan of the acquired entity, similar adjustments are permitted at
the discretion of the Committee. The Committee shall notify optionees of any
intended sale of all or substantially all of the Company's assets within a
reasonable time prior to such sale.
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Committee in its sole discretion. Any such
adjustment may provide for the elimination of any fractional share which might
otherwise become subject to an option.
<PAGE>
ARTICLE XI
NO OBLIGATION TO EXERCISE OPTION
Granting of an option shall impose no obligation on the recipient to
exercise such option.
ARTICLE XII
USE OF PROCEEDS
The proceeds received from the sale of Common Stock pursuant to the Plan
shall be used for general corporate purposes.
ARTICLE XIII
RIGHTS AS A COMMON STOCKHOLDER
An optionee or a transferee of an option shall have no rights as a
stockholder with respect to any share covered by his option until he shall have
become the holder of record of such share, and he shall not be entitled to any
dividends or distributions or other rights in respect of such share for which
the record date is prior to the date on which he shall have become the holder of
record thereof.
ARTICLE XIV
EMPLOYMENT RIGHTS
Nothing in the Plan or in any option granted hereunder shall confer on any
optionee any right to continue in the employ of the Company or any of its
subsidiaries, or to interfere in any way with the right of the Company or any of
its subsidiaries to terminate the optionee's employment at any time.
ARTICLE XV
COMPLIANCE WITH THE LAW
The Company is relieved from any liability for the non-issuance or
non-transfer or any delay in issuance or transfer of any shares of Common Stock
subject to options under the Plan which results from the inability of the
Company to obtain or any delay in obtaining, from any regulatory body having
jurisdiction, all requisite authority to issue or transfer shares of Common
Stock of the Company either upon exercise of options under the Plan or upon a
request for transfer of shares of Common Stock issued as a result of such
exercise if counsel for the Company deems such authority necessary for lawful
issuance or transfer of any such shares. Appropriate legends may be placed on
the stock certificates evidencing shares issued upon exercise of options to
reflect such transfer restrictions.
Each option granted under the Plan is subject to the requirement that if at
any time the Committee determines, in its discretion, that the listing,
quotation, registration or qualification of shares of Common Stock issuable upon
exercise of options is required by any securities exchange, automated quotation
service or under any state or Federal law, or that the consent or approval of
any governmental regulatory body is necessary or desirable as a condition of, or
in connection with, the grant of options or the issuance of shares of Common
Stock, no shares of Common Stock shall be issued, in whole or in part, unless
such listing, registration, qualification, consent or approval has been effected
or obtained free of any conditions or with such conditions as are acceptable to
the Committee.
<PAGE>
ARTICLE XVI
EFFECTIVE DATE AND EXPIRATION DATE OF PLAN
The original Plan has been effective since July 26, 1996, the date of
approval by the stockholders of the Company in a manner which complied with both
Rule 16b-3 under the Exchange Act and Section 422(b)(1) of the Code and the
Treasury Regulations thereunder. The expiration date of the Plan, after which no
option may be granted hereunder, is July 25, 2006.
ARTICLE XVII
AMENDMENT OR DISCONTINUANCE OF PLAN
The Board may, without the consent of the Company's stockholders or
optionees under the Plan, at any time, terminate the Plan entirely and at any
time or from time to time amend or modify the Plan, provided that no such action
shall adversely affect options theretofore granted hereunder without the
optionee's consent, and provided further that no such action by the Board,
without approval of the stockholders, may: (a) increase the total number of
shares of Common Stock which may be purchased pursuant to options granted under
the Plan, except as contemplated in ARTICLE X; (b) expand the class of officers,
employees or consultants eligible to receive options under the Plan; (c)
decrease the minimum option price; (d) extend the maximum term of options
granted hereunder; or (e) extend the term of the Plan.
ARTICLE XVIII
MISCELLANEOUS
(a) Options shall be evidenced by option agreements (which need not be
identical) in such forms as the Committee may from time to time approve. Such
agreements shall conform to the terms and conditions of the Plan and may provide
that the grant of any option under the Plan and Common Stock acquired pursuant
to the Plan shall also be subject to such other conditions (whether or not
applicable to the option or Common Stock received by any other optionee) as the
Committee determines appropriate, including, without limitation, provisions to
assist the optionee in financing the purchase of Common Stock through the
exercise of options, provisions for the forfeiture of, or restrictions on,
resale or other disposition of shares under the Plan, and provisions to comply
with Federal and state securities laws and Federal, state and local income tax
withholding requirements.
(b) If the Committee shall find that any person to whom any amount is
payable under the Plan is unable to care for his affairs because of illness or
accident, or is a minor, or has died, then any payment due to such person or his
estate (unless a prior claim therefor has been made by a duly appointed legal
representative), may, if the Committee so directs the Company, be paid to his
spouse, child, relative, an institution maintaining or having custody of such
person, or any other person deemed by the Committee to be a proper recipient on
behalf of such person otherwise entitled to payment. Any such payment shall be a
complete discharge of the liability of the Committee and the Company therefor.
(c) No member of the Committee shall be personally liable by reason of any
contract or other instrument executed by such member or on his behalf in his
capacity as a member of the Committee nor for any mistake of judgment made in
good faith, and the Company shall indemnify and hold harmless each member of the
Committee and each other employee, officer or director of the Company to whom
any duty or power relating to the administration or interpretation of the Plan
may be allocated or delegated, against any cost or expense (including counsel
fees) or liability (including any sum paid in settlement of a claim) arising out
of any act or omission to act in connection with the Plan unless arising out of
such person's own fraud or bad faith; provided, however, that approval of the
Company's Board shall be required for the payment of any amount in settlement of
a claim against any such person. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company's Certificate of Incorporation or By-Laws, as
a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
<PAGE>
(d) The Plan shall be governed by and construed in accordance with the
internal laws of the State of Delaware without reference to the principles of
conflicts of law thereof.
(e) No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes.
(f) Each member of the Committee and each member of the Company's Board
shall be fully justified in relying, acting or failing to act, and shall not be
liable for having so relied, acted or failed to act in good faith, upon any
report made by the independent public accountant of the Company and upon any
other information furnished in connection with the Plan by any person or persons
other than such member.
(g) Except as otherwise specifically provided in the relevant plan
document, no payment under the Plan shall be taken into account in determining
any benefits under any pension, retirement, profit-sharing, group insurance or
other benefit plan of the Company.
(h) The expenses of administering the Plan shall be borne by the Company.
(i) Masculine pronouns and other words of masculine gender shall refer to
both men and women.
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
TV FILME, INC.
The undersigned hereby appoints Hermano Studart Lins de Albuquerque and
Carlos Andre Studart Lins de Albuquerque as proxies, with power to act without
the other and with power of substitution, and hereby authorizes them to
represent and vote, as designated on the other side, all the shares of stock of
TV Filme, Inc. standing in the name of the undersigned with all powers which the
undersigned would possess if present at the Annual Meeting of Stockholders of
the Company to be held October 1, 1998 or any adjournment or postponement
thereof. This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned. If this Proxy is returned without direction
being given, this Proxy will be voted FOR proposals 1, 2 and 3.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<S> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. Please mark ---
your vote as | X |
indicated on ---
this example
ITEM 1 - ELECTION OF DIRECTORS ITEM 2 - APPROVE AN AMENDMENT TO THE
WITHHELD COMPANY'S STOCK OPTION PLAN
FOR FOR ALL TO INCREASE THE NUMBER OF SHARES
--- ------- AVAILABLE FOR FUTURE GRANT.
--- ---
| | | | FOR AGAINST ABSTAIN
--- ---
--- --- ---
| | | | | |
--- --- ---
ITEM 3 - APPOINTMENT OF ERNST & YOUNG
AUDITORES INDEPENDENTES S.C., AS
INDEPENDENT ACCOUNTANTS
FOR AGAINST ABSTAIN
--- --- ---
| | | | | |
--- --- ---
</TABLE>
Nominees:
Carlos Andre Studart Lins de Albuquerque,
Douglas M. Karp and Douglas Duran
WITHHELD FOR: (Write each nominee's name in
space provided below.)
- --------------------------------------------
Signature______________________ Signature _____________________ Date__________
NOTE: Please sign as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustees
or guardian, please give full title as such.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
