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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
MEDIACOM COMMUNICATIONS CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
MEDIACOM COMMUNICATIONS CORPORATION
100 Crystal Run Road
Middletown, New York 10941
NOTICE OF THE 2000 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On
September 26, 2000
To the Stockholders of Mediacom Communications Corporation:
The 2000 Annual Meeting of Stockholders of Mediacom Communications Corporation
(the "Company") will be held at the offices of Sonnenschein Nath & Rosenthal,
1221 Avenue of the Americas, 26th Floor, New York, New York 10020, at 10:00
a.m., local time, on Tuesday, September 26, 2000, for the following purposes:
1. To elect seven directors of the Company to serve for a term of one year.
2. To ratify the selection of Arthur Andersen LLP as the Company's independent
auditors for the fiscal year ending December 31, 2000.
3. To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice. Only holders of record of the Company's
Class A common stock and Class B common stock at the close of business on August
10, 2000 are entitled to notice of, and to vote at, the meeting or any
adjournment or postponement thereof.
By Order of the Board of Directors,
/s/ Italia Commisso Weinand
Italia Commisso Weinand
Secretary
Middletown, New York
August 15, 2000
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Whether or not you plan to attend the meeting, please sign and date the enclosed
proxy and promptly return it in the enclosed, self-addressed envelope. No
additional postage is required if mailed within the United States. Any
stockholder may revoke his or her proxy at any time before this meeting by
giving notice in writing to the Secretary of the Company, by granting a proxy
bearing a later date or by voting in person at the meeting.
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<PAGE>
MEDIACOM COMMUNICATIONS CORPORATION
PROXY STATEMENT FOR THE 2000 ANNUAL MEETING OF STOCKHOLDERS
To Be Held On
September 26, 2000
This proxy statement and the accompanying proxy card are being furnished to
the holders of Class A and Class B common stock of Mediacom Communications
Corporation (the "Company") in connection with the solicitation by the Board of
Directors of the Company of proxies for use in voting at the 2000 Annual Meeting
of Stockholders to be held at the offices of Sonnenschein Nath & Rosenthal, 1221
Avenue of the Americas, 26th Floor, New York, New York 10020, at 10:00 a.m.,
local time, on Tuesday, September 26, 2000, or all adjournments or postponements
thereof. The shares represented by proxies solicited by the Board of Directors
of the Company will be voted in accordance with the directions given therein.
If no direction is indicated, the proxy will be voted in favor of the proposals
set forth in the notice attached to this proxy statement. Any stockholder may
revoke his or her proxy at any time before the meeting by giving notice in
writing to the Secretary of the Company, by granting a proxy bearing a later
date, or by voting in person at the meeting.
Holders of record of the Company's Class A common stock and Class B common
stock at the close of business on August 10, 2000 are entitled to vote at the
meeting. As of such date, there were 60,601,001 shares of Class A common stock
and 29,342,990 shares of Class B common stock outstanding.
The presence, in person or by proxy, of stockholders entitled to cast a
majority of votes entitled to be cast by all stockholders will constitute a
quorum for the transaction of business at the meeting. Holders of shares of
Class A common stock and Class B common stock will vote as a single class on all
matters submitted to a vote of stockholders. Each share of Class A common stock
will be entitled to one vote and each share of Class B common stock will be
entitled to ten votes.
Directors will be elected by a plurality of the votes cast at the meeting.
Approval of each other matter will require an affirmative vote of the majority
of the votes cast thereon. Rocco B. Commisso, the Company's Chairman and Chief
Executive Officer, beneficially owns or controls 83% of the aggregate votes that
may be cast at the meeting. Accordingly, the affirmative vote of such person
alone is sufficient to adopt each of the proposals to be submitted to the
stockholders at the meeting. Such person has advised the Company that he will
vote all of his shares in favor of the proposals set forth in the notice
attached to this proxy statement.
Abstentions will be counted in tabulations of the votes cast on each of the
proposals presented at the meeting, whereas broker nonvotes will not be counted
for purposes of determining whether a proposal has been approved. "Broker
nonvotes" are proxies received from brokers who, in the absence of specific
voting instructions from beneficial owners of shares held in brokerage name,
have declined to vote such shares in those instances where discretionary voting
by brokers is permitted.
The cost of soliciting these proxies will be borne by the Company. Proxies
may be solicited by directors, officers or employees of the Company in person or
by telephone.
A list of stockholders entitled to vote at the meeting will be available at
the Company's executive offices located at 100 Crystal Run Road, Middletown, New
York 10941. This proxy statement and the form of proxy are first being mailed
to stockholders on or about August 16, 2000.
1
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ELECTION OF DIRECTORS
Seven directors will be elected at the 2000 annual meeting. Each director
will serve until the next annual meeting of stockholders and until their
successors have been elected and qualify.
Each nominee is currently a director of the Company. Rocco B. Commisso and
Mark E. Stephan have been directors of the Company since it was formed in
November 1999 and were members of the executive committee of Mediacom LLC until
the Company's initial public offering in February 2000. Immediately prior to the
initial public offering, the Company issued its common stock in exchange for all
outstanding membership interests in Mediacom LLC. Accordingly, references to
the "Company" in the biographies that follow for the periods prior to the
initial public offering mean Mediacom LLC. Messrs. Morris, Mitchell,
Reifenheiser, Ricciardi and Winikoff became directors of the Company upon the
completion of the initial public offering.
<TABLE>
<CAPTION>
Principal Occupation and Business
Name of Nominee Age Experience During the Past Five Years
----------------------------------- --- -------------------------------------
<S> <C> <C>
Rocco B. Commisso 50 Founder and Chairman of the Board of Directors and Chief Executive
Officer of the Company since its inception in July 1995. Mr. Commisso
served as Executive Vice President, Chief Financial Officer and a
director of Cablevision Industries Corporation from 1986 to 1995. Prior
to that time, Mr. Commisso served as Senior Vice President of Royal
Bank of Canada's affiliate in the United States from 1981, where he
founded and directed a specialized lending group to media and
communications companies. Mr. Commisso began his association with the
cable industry in 1978 at The Chase Manhattan Bank, where he was
assigned to manage the bank's lending activities to communications
firms including the cable industry. He is a director of SoftNet
Systems, Inc. and serves on the boards of the National Cable Television
Association, Cable Television Laboratories, Inc. and C-SPAN. Mr.
Commisso holds a Bachelor of Science in Industrial Engineering and a
Master of Business Administration from Columbia University.
Mark E. Stephan 44 Senior Vice President, Chief Financial Officer and Treasurer of the
Company since March 1996. Mr. Stephan served as Vice President of
Finance for Cablevision Industries Corporation from 1993 to 1996. Mr.
Stephan served as Manager of the telecommunications and media-lending
group of Royal Bank of Canada from 1987 to 1992.
William S. Morris III 65 Mr. Morris III has served as the Chairman and Chief Executive Officer
of Morris Communications Corporation for more than the past five years.
He was the Chairman of the board of directors of the Newspapers
Association of America for 1999-2000.
Craig S. Mitchell 41 Mr. Mitchell has held various management positions with Morris
Communications Corporation for more than the past five years. He
currently serves as its Vice President of Finance and Treasurer and is
also a member of its board of directors.
Thomas V. Reifenheiser 64 Mr. Reifenheiser has been a Managing Director and Group Executive of
the Global Media and Telecom Group of Chase Securities Inc. for more
than the past five years. He joined Chase in 1963 and has been the
Global Media and Telecom Group Executive since 1977.
</TABLE>
2
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<TABLE>
<CAPTION>
Principal Occupation and Business
Name of Nominee Age Experience During the Past Five Years
----------------------------------- --- -------------------------------------
<S> <C> <C>
Natale S. Ricciardi 51 Mr. Ricciardi has held various management positions with Pfizer Inc.
for more than the past five years. Mr. Ricciardi joined Pfizer in 1972
and currently serves as Vice President of Pfizer Global Manufacturing
with responsibility for all of Pfizer's U.S. manufacturing plants.
Robert L. Winikoff 54 Mr. Winikoff has been a partner of the law firm of Sonnenschein Nath &
Rosenthal since August 2000 and prior thereto was a partner of the law
firm of Cooperman Levitt Winikoff Lester & Newman, P.C. for more than
the past five years. Sonnenschein Nath & Rosenthal currently serves as
the Company's outside general counsel and prior to such representation
Cooperman Levitt Winikoff Lester & Newman, P.C served as the Company's
outside general counsel since 1995. Mr. Winikoff is a member of the
board of directors of Young Broadcasting Inc., an owner and operator of
broadcast television stations.
</TABLE>
Mr. Commisso and the Company have agreed to cause the election of two
directors designated by Morris Communications Corporation so long as Morris
Communications continues to own at least 20% of the Company's outstanding common
stock, and one such director as long as it continues to own at least 10% of the
Company's outstanding common stock. In accordance with this agreement, Messrs.
Morris III and Mitchell have been designated by Morris Communications as its
representatives on the Company's Board of Directors.
The Board of Directors of the Company has an Audit Committee, a Compensation
Committee and a Stock Option Committee. These committees were formed in February
2000 upon completion of the Company's initial public offering. The Board of
Directors has no nominating committee. The Board of Directors selects nominees
for election as directors of the Company.
The Audit Committee consists of three directors, all of whom are independent
directors. The current members of the Audit Committee are Messrs. Mitchell,
Reifenheiser and Ricciardi. The functions of the Audit Committee include but
are not limited to the following: (i) recommending the appointment of the
Company's independent accountants; (ii) reviewing the arrangements for and the
scope of the audit by the Company's independent accountants; (iii) reviewing the
independence of the Company's independent accountants; (iv) considering the
adequacy of the system of the Company's internal accounting controls and
reviewing any proposed corrective measures; (v) reviewing and monitoring the
Company's policies regarding business ethics and regulatory matters that may
have a material effect on the Company's financial statements, operations and
programs; and (vi) discussing with management and the Company's independent
accountants the Company's draft interim and annual financial statements and key
accounting and reporting matters.
The Compensation Committee consists of three directors, Messrs. Commisso,
Morris and Winikoff. The Compensation Committee has the authority to review and
make recommendations to the Board of Directors with respect to the compensation
of executive officers of the Company. The Compensation Committee also
administers the Company's 1999 Employee Stock Purchase Plan.
The Stock Option Committee consists of three directors, each of whom is a
"non-employee" director (as defined in Rule 16b-3 under the Securities and
Exchange Act of 1934). The current members of the Stock Option Committee are
Messrs. Reifenheiser, Ricciardi and Winikoff. The Stock Option Committee
administers the Company's 1999 Stock Option Plan and determines, among other
things, the time or times at which options will be granted, the recipients of
grants, whether a grant will consist of incentive stock options, non-qualified
stock options or stock appreciation rights (in tandem or free-standing) or a
combination thereof, the option periods, whether an option is exercisable as
Class A common stock or Class B common stock, the limitations on option exercise
and the number of shares subject to such options, taking into account the nature
and value of services rendered and contributions made to the success of the
Company. The Stock Option Committee also has authority to interpret the plan
and, subject to certain limitations, to amend provisions of the plan as deemed
advisable.
The Board of Directors recommends a vote FOR the election of each of the
director nominees named herein.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of July 31, 2000 certain information with
respect to the beneficial ownership of the Company's common stock by: (i) each
person known by the Company to beneficially own more than 5% of the Company's
common stock; (ii) each of the Company's directors; (iii) each of the Company's
executive officers who are named in the "Summary Compensation Table;" and (iv)
all of the Company's directors and executive officers as a group.
The amounts and percentages of common stock beneficially owned are reported on
the basis of regulations of the Securities and Exchange Commission ("SEC")
governing the determination of beneficial ownership of securities. Under the
rules of the SEC, a person is deemed to be a "beneficial owner" of a security if
that person has or shares "voting power," which includes the power to vote or to
direct the voting of such security, or "investment power," which includes the
power to dispose of or to direct the disposition of such security. A person is
also deemed to be a beneficial owner of any securities of which that person has
the right to acquire beneficial ownership within 60 days. Under these rules more
than one person may be deemed a beneficial owner of the same securities and a
person may be deemed to be a beneficial owner of securities as to which such
person has no economic interest.
Unless otherwise indicated below, each beneficial owner named in the table has
sole voting and sole investment power with respect to all shares beneficially
owned, subject to community property laws where applicable. Holders of Class A
common stock are entitled to one vote per share, while holders of Class B common
stock are entitled to ten votes per share. Holders of both classes of common
stock will vote together as a single class on all matters presented for a vote,
except as otherwise required by law. Percentage of beneficial ownership of Class
A common stock is based on 60,601,001 shares of Class A common stock outstanding
and percentage of beneficial ownership of Class B common stock is based on
29,342,990 shares of Class B common stock outstanding. Unless otherwise
indicated, the address of each beneficial owner of more than 5% of Class A or
Class B common stock is Mediacom Communications Corporation, 100 Crystal Run
Road, Middletown, New York 10941.
<TABLE>
<CAPTION>
Class A Common Stock Class B Common Stock
---------------------- ------------------------ Percent of Vote
Name of Beneficial Owner Number Percent Number Percent as a Single Class
------------------------ ------ ------- ------ ------- -----------------
<S> <C> <C> <C> <C> <C>
Rocco B. Commisso...................... 288,149(6) * % 37,491,882(8) 100.0% 86.1%
Morris Communications Corporation(1)... 28,309,674 46.7 -- -- 8.0
CB Capital Investors, LLC(2)........... 4,223,534 7.0 -- -- 1.2
U.S. Investor, Inc.(3)................. 3,051,170 5.0 -- -- *
Mark E. Stephan........................ -- -- 482,236(9)(10) 1.6 --
William S. Morris III(1)(4)............ 28,309,674 46.7 -- -- 8.0
Craig S. Mitchell(1)(5)................ 28,399,674 46.9 -- -- 8.0
Thomas V. Reifenheiser................. -- -- -- -- --
Natale S. Ricciardi.................... 10,000 * -- -- --
Robert L. Winikoff..................... 45,000(7) * -- -- --
James M. Carey......................... 238 * 270,052(10)(11) * --
Joseph Van Loan........................ 5,033 * 327,921(10)(12) 1.1 --
Italia Commisso Weinand................ 500 * 327,921(10)(13) 1.1 --
All executive officers and directors
as a group (11 persons)............... 28,748,594(6) 47.4 37,491,882(14) 100.0 92.7
</TABLE>
-------------------
* Represents beneficial ownership of less than 1%.
(1) The address of the beneficial owner is 725 Broad Street, Augusta, Georgia
30901.
(2) Includes approximately 856,200 shares of Class A common stock owned by its
affiliate, Chase Manhattan Capital, LLC. The address of the beneficial
owner is c/o Chase Capital Partners, 1221 Avenue of the Americas, New York,
New York 10020-1080.
(3) A party related to Booth American Company. The address of the beneficial
owner is 333 West Fort Street, Detroit, Michigan 48226.
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(4) Represents shares held by Morris Communications. Mr. Morris III is the
Chairman and Chief Executive Officer of Morris Communications and is deemed
to be in control of Morris Communications.
(5) Includes 28,309,674 shares held by Morris Communications. Mr. Mitchell is a
director and the Vice President of Finance and Treasurer of Morris
Communications. Mr. Mitchell disclaims any beneficial ownership of the
shares held by Morris Communications.
(6) Includes 38,149 shares of Class A common stock underlying options granted
pursuant to the 1999 Stock Option Plan.
(7) Includes 30,000 shares held by a limited liability company for which Mr.
Winikoff serves as manager. Mr. Winikoff disclaims beneficial ownership of
the shares held by the limited liability company except to the extent of
his pecuniary interest therein.
(8) Includes 1,421,879 shares of Class B common stock owned of record by other
stockholders, for which Mr. Commisso holds an irrevocable proxy,
representing all remaining shares of Class B common stock outstanding.
Also includes 948,892 shares of Class B common stock underlying options
granted to Mr. Commisso pursuant to the 1999 Stock Option Plan, 6,851,108
shares of Class B common stock underlying options granted to Mr. Commisso
in exchange for membership units in Mediacom LLC, and 348,892 shares of
Class B common stock underlying options granted to other executive and non-
executive employees of the Company in exchange for membership units in
Mediacom LLC, for which Mr. Commisso holds an irrevocable proxy.
(9) Includes 95,014 shares of Class B common stock underlying options granted
in exchange for membership units in Mediacom LLC. The 482,236 shares are
subject to vesting in five equal annual installments, which vesting period
is deemed to have commenced on March 18, 1997. 385,788 of these shares are
currently vested.
(10) If such beneficial owner desires to sell vested shares, or if such
beneficial owner's employment with the Company is terminated for any
reason, Mr. Commisso will have the option to purchase such shares. For
further information concerning this arrangement, see "Executive
Compensation - Employment Arrangements." In addition, such beneficial
owner has granted Mr. Commisso an irrevocable proxy with respect to such
shares.
(11) Includes 53,208 shares of Class B common stock underlying options granted
in exchange for membership units in Mediacom LLC. The 270,052 shares are
subject to vesting in five equal annual installments, which vesting period
is deemed to have commenced on September 15, 1998. 108,020 of these shares
are currently vested.
(12) Includes 64,610 shares of Class B common stock underlying options granted
in exchange for membership units in Mediacom LLC. The 327,921 shares are
subject to vesting in five equal annual installments, which vesting period
is deemed to have commenced on November 4, 1997. 196,752 of these shares
are currently vested.
(13) Includes 64,610 shares of Class B common stock underlying options granted
in exchange for membership units in Mediacom LLC. The 327,921 shares are
subject to vesting in five equal annual installments, which vesting period
is deemed to have commenced on April 21, 1997. 262,336 of these shares are
currently vested.
(14) Includes 948,892 shares of Class B common stock underlying options granted
pursuant to the 1999 Stock Option Plan and 7,200,000 shares of Class B
common stock underlying options granted in exchange for membership units in
Mediacom LLC.
5
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EXECUTIVE COMPENSATION
Prior to the Company's initial public offering in February 2000, all of the
Company's executive officers, excluding Mr. James M. Carey, received
compensation from Mediacom Management Corporation, a Delaware corporation wholly
owned by Mr. Commisso. Mediacom Management provided management services to the
operating subsidiaries of Mediacom LLC. Mr. Carey received his compensation
from one of the Company's operating subsidiaries.
Except where otherwise indicated, the following table summarizes the
compensation paid in 1999 and 1998 to the Chief Executive Officer and four other
most highly compensated executive officers of the Company:
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation
Name and ----------------------------- All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($)
-------------------------------------- --------- -------------- ------------- -------------------------
<S> <C> <C> <C> <C>
Rocco B. Commisso 1999 100,000 -- --
Chairman and Chief Executive Officer 1998 100,000 -- --
Mark E. Stephan 1999 200,000 -- --
Senior Vice President, Chief 1998 190,769 132,034 --
Financial Officer, Treasurer and
Director
James M. Carey(1) 1999 140,769 20,000 --
Senior Vice President, Operations 1998 106,154 15,000 35,500(2)
Joseph Van Loan 1999 200,000 -- --
Senior Vice President, Technology 1998 190,769 132,034 --
Italia Commisso Weinand 1999 136,923 -- --
Senior Vice President, Programming 1998 130,693 99,026 --
and Human Resources and Secretary
</TABLE>
(1) Mr. Carey's compensation was paid by one of the Company's operating
subsidiaries, Mediacom Southeast LLC.
(2) Represents consulting fees from January 1, 1998 to February 2, 1998.
The amounts set forth in the above table do not include the receipt by Mark E.
Stephan, James M. Carey, Joseph Van Loan and Italia Commisso Weinand of
membership units in Mediacom LLC from Rocco B. Commisso as described in
"Employment Arrangements" below.
Employment Arrangements
Mark E. Stephan, James M. Carey, Joseph Van Loan, Italia Commisso Weinand,
John G. Pascarelli and certain other employees of the Company have entered into
employment arrangements setting forth the terms of their at-will employment with
the Company. Pursuant to the employment arrangements, Rocco B. Commisso
transferred to each of these employees a specified number of membership units in
Mediacom LLC, which were then owned by Mr. Commisso. In connection with the
Company's initial public offering, such membership units were exchanged for an
aggregate of 1,421,879 shares of the Company's Class B common stock and options
to purchase an aggregate of 348,892 shares of the Company's Class B common stock
at an exercise price equal to the initial public offering price of $19.00 per
share. Such shares and options initially are subject to vesting in five equal
annual installments, which vesting period is deemed to have commenced for each
officer on various dates prior to the Company's initial public offering. All
such shares and options which vest initially are nonetheless subject to
potential forfeiture during the first three years after vesting under the
circumstances described below. If the employee desires to sell the vested
shares or options while employed by the Company, or if the employee's employment
with the Company is terminated for any reason, Mr. Commisso will have the option
to purchase such shares and options at their then fair market value. In the
event that Mr. Commisso exercises this purchase option, a portion of the shares
or options vested for less than three years will nonetheless be forfeited to Mr.
Commisso if, during such three year period, such employee elects to sell
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such shares or exercise such options while employed by the Company or
voluntarily terminates his employment with the Company or if such employee's
employment with the Company is terminated for cause. No forfeiture of vested
shares or options will occur if Mr. Commisso elects not to exercise his purchase
option, or if the employee is terminated by the Company without cause or as a
result of death or disability. Upon a change of control, all such shares and
options will vest and not be subject to forfeiture. Each of the employees has
granted to Mr. Commisso an irrevocable proxy with respect to all voting rights
relating to their shares of common stock. Mr. Commisso made loans to each of
such employees in the amount of the tax liability resulting from such employee's
receipt of the membership units in Mediacom LLC. Such loans are secured by the
Company's common stock and options held by such employees. At the request of any
of these employees, Mr. Commisso will also make a loan to the employee in the
amount of any tax liability resulting from the employee's receipt of the options
described above. Each of the employment arrangements also provides that if the
Company terminates the employee's employment without cause, the employee is
entitled to a severance payment equal to six months of base salary and precludes
the employee from competing with the Company for a period of three years
following termination.
Compensation of Directors
Non-employee directors do not receive annual compensation. In February 2000,
the Company granted to each of Craig S. Mitchell and Robert L. Winikoff options
to purchase 30,000 shares of Class A common stock, and granted to each of
William S. Morris III, Thomas V. Reifenheiser and Natale S. Ricciardi options to
purchase 20,000 shares of Class A common stock. All such options have an
exercise price equal to the public offering price of $19.00 per share and become
exercisable in three equal annual installments beginning February 3, 2001. Non-
employee directors receive reimbursement of out-of-pocket expenses incurred for
each board meeting or committee meeting attended.
1999 Stock Option Plan
The Company's 1999 Stock Option Plan became effective as of December 20, 1999.
The Company has reserved 9,000,000 shares of common stock with respect to which
options and stock appreciation rights may be granted under the plan. A maximum
of 7,000,000 shares of the Company's common stock reserved under the plan may be
granted as incentive stock options qualified for favorable tax treatment to the
holder under Internal Revenue Code Section 422. The purpose of the plan is to
promote the Company's interests and the interests of its stockholders by
strengthening its ability to attract and retain competent employees, to make
service on the Board of Directors more attractive to present and prospective
non-employee directors and to provide a means to encourage stock ownership and
proprietary interest in the Company by its officers, non-employee directors and
valued employees and other individuals upon whose judgment, initiative and
efforts its financial success and growth largely depend.
The plan states that it may be administered by either the entire Board of
Directors or a committee consisting of two or more members of the Board of
Directors, each of whom is a non-employee director. The Company's Board of
Directors has determined that the Stock Option Committee, which consists solely
of non-employee directors, will administer the plan.
Incentive stock options may be granted only to the Company's officers and key
employees and the officers and key employees of the Company's subsidiaries.
Nonqualified stock options and stock appreciation rights may be granted to the
officers, key employees, directors, agents and consultants of the Company and
its subsidiaries. In determining the eligibility of an individual for grants
under the plan, as well as in determining the number of shares to be optioned to
any individual, the Stock Option Committee takes into account the
recommendations of the Chairman of the Board, Mr. Commisso, the position and
responsibilities of the individual being considered, the length of such
individual's employment with the Company or its subsidiaries, the nature and
value to the Company or its subsidiaries of his or her service or
accomplishments, his or her present or potential contribution to the success of
the Company or its subsidiaries and such other factors as the Stock Option
Committee may deem relevant. In making recommendations to the Stock Option
Committee, Mr. Commisso expects to focus upon individuals who would be motivated
by a direct economic stake in the Company. Incentive stock options and
nonqualified stock options may provide for their exercise into shares of any
class of the Company's common stock.
The plan provides for the granting of incentive stock options to purchase the
Company's common stock at not less than the fair market value on the date of the
option grant and the granting of nonqualified options at any exercise price.
Stock appreciation rights may be granted with an exercise price equal to the
fair market value of a share of the Company's common stock on the date of grant
of the stock appreciation right. Stock appreciation rights granted in
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tandem with an option have the same exercise price as the related option.
Options for an aggregate of 2,920,000 shares of the Company's common stock,
comprised of 1,971,108 shares of Class A common stock and 948,892 shares of
Class B common stock were granted in February 2000 under the plan to all full
and part-time employees and non-employee directors at an exercise price equal to
the initial public offering price of $19.00. Such options will vest at various
times over five years. Vesting is contingent on continuous employment or service
with the Company. Options that do not vest will be forfeited.
The plan also contains limitations applicable only to incentive stock options
granted thereunder. To the extent that the aggregate fair market value, as of
the date of grant, of the shares to which incentive stock options become
exercisable for the first time by an optionee during the calendar year exceeds
$100,000, the option will be treated as a nonqualified option. In addition, if
an optionee owns more than 10% of the total combined voting power of all classes
of the Company's capital stock or that of its parent or any of its subsidiaries
at the time the individual is granted an incentive stock option, the option
price per share of the incentive stock option cannot be less than 110% of the
fair market value per share as of the date of grant and the term of the
incentive stock option cannot exceed five years. No option or stock appreciation
right may be granted under the plan after December 19, 2009, and no option or
stock appreciation right may have a term of more than ten years after the date
of its grant.
Upon the exercise of an option, the holder must make payment of the full
exercise price. Such payment may be made in cash, check or, under certain
circumstances, in shares of the Company's common stock having a fair market
value equal to the exercise price of the options, or any combination thereof.
Stock appreciation rights, which give the holder the privilege of surrendering
such rights for the appreciation in the underlying common stock between the time
of the grant and the surrender, may be settled, in the discretion of the Stock
Option Committee, in cash, in shares of the Company's common stock valued at
their fair market value on the date of exercise of the stock appreciation right,
or in any combination thereof. The exercise of a stock appreciation right
granted in tandem with an option cancels the option to which it relates with
respect to the same number of shares as to which the stock appreciation right
was exercised. The exercise of an option cancels any related stock appreciation
right with respect to the same number of shares as to which the option was
exercised. Generally, options and stock appreciation rights may be exercised
while the recipient is performing services for the Company and within three
months after termination of such services.
The plan may be terminated at any time by the Board of Directors, which may
also amend the plan, except that without stockholder approval, it may not
increase the number of shares subject to the plan or change the class of persons
eligible to receive options under the plan.
1999 Employee Stock Purchase Plan
The Company's 1999 Employee Stock Purchase Plan became effective as of
December 20, 1999. The employee stock purchase plan is intended to qualify
under Section 423 of the Internal Revenue Code of 1986, as amended. The Company
has reserved 1,000,000 shares of the Company's Class A common stock for issuance
under the plan. The Company's Compensation Committee administers the plan.
All persons employed by the Company or any of its subsidiaries on the date of
the initial public offering were eligible to participate in the employee stock
purchase plan provided they customarily performed for the Company at least 20
hours of service per week and for more than five months in any calendar year.
The plan covers four offering periods, each lasting six months. The offering
periods commence on February 1 and August 1 of each year covered by the plan,
except that the first offering period will start on February 4, 2000 and end on
July 31, 2000.
The Company's employee stock purchase plan allows for each participating
employee to purchase common stock through payroll deductions. Each employee's
payroll deductions for any period may not exceed 15% of the employee's
compensation for such period up to a maximum aggregate deduction of $21,250 for
each period. Purchases of the Company's common stock will occur on the final
trading day of each offering period. No employee may be granted an option under
the plan if immediately after the grant the employee would own the Company's
capital stock and/or options to purchase the Company's common stock possessing
5% or more of the total combined voting power or value of all classes of capital
stock of the Company or any of its subsidiaries. In addition, the total value
of the shares purchased by a participant in any calendar year, measured as of
the beginning of the offering period, may not exceed $25,000.
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The price of each share of common stock purchased under the employee stock
purchase plan will be 85% of the lower of:
. the fair market value per share of common stock on the date of the initial
public offering; or
. the fair market value per share of common stock on the final trading day of
each applicable offering period.
Employees may end their participation in the employee stock purchase plan at
any time. Participation ends automatically upon termination of employment with
the Company. The Company's Board of Directors may amend or terminate the
employee stock purchase plan at any time. If the board increases the number of
shares of common stock reserved for issuance under the plan, it must seek the
approval of the Company's stockholders.
401(k) Plan
The Company maintains a retirement plan established in conformity with Section
401(k) of the Internal Revenue Code of 1986, covering all eligible employees. In
accordance with the 401(k) plan, employees may elect to defer up to 15% of their
current pre-tax compensation and have the amount of the deferral contributed to
the 401(k) plan. The maximum elective deferral contribution was $10,000 in each
of 1998 and 1999, subject to adjustment for cost-of-living in subsequent years.
Certain highly compensated employees may be subject to a lesser limit on their
maximum elective deferral contribution. The 401(k) plan permits, but does not
require, the Company to make matching contributions and non-matching, profit-
sharing contributions up to a maximum dollar amount or maximum percentage of
participant or employee contributions. The Company's contributions under the
plan totaled approximately $14,000, $264,000 and $302,000 for the years ended
December 31, 1997, 1998, and 1999, respectively.
Compensation Committee Interlocks and Insider Participation.
The Company's Compensation Committee was formed in February 2000. Currently,
the members of the Compensation Committee are Messrs. Morris, Winikoff and
Commisso, the Company's Chairman and Chief Executive Officer. Mr. Winikoff is a
partner of the law firm of Sonnenschein Nath & Rosenthal and prior thereto was a
partner of the law firm of Cooperman Levitt Winikoff Lester & Newman, P.C.,
which have served as the Company's outside general counsel on various matters.
Neither Mr. Morris III nor Mr. Winikoff is or has been an employee or an officer
of the Company.
CERTAIN RELATIONSHIPS
Management Agreements
Each of the Company's operating subsidiaries was a party to a management
agreement with Mediacom Management, which is owned by Mr. Commisso. Under these
agreements, Mediacom Management provided management services to the Company's
operating subsidiaries and was paid annual management fees. Until November 19,
1999, the management fee was 5.0% of the first $50.0 million of the Company's
annual gross operating revenues, 4.5% of annual gross operating revenues in
excess of $50.0 million, up to $75.0 million, and 4.0% of annual gross operating
revenues in excess of $75.0 million. The management agreements were amended
effective November 19, 1999 to provide for annual management fees equal to 2% of
annual gross operating revenues. In addition, Mediacom Management agreed to
waive all management fees accrued from July 1, 1999 through November 19, 1999.
Each of the management agreements was terminated upon completion of the
Company's initial public offering, and employees of Mediacom Management became
the Company's employees. In 1999, the aggregate amount of management fees paid
to Mediacom Management was approximately $4.2 million.
9
<PAGE>
Transaction Fees and Expense Reimbursement
Prior to the amendment of Mediacom LLC's operating agreement on November 19,
1999, Mediacom Management was paid a fee based on a percentage of the purchase
price of acquisitions made by Mediacom LLC after January 1998. In accordance
with Mediacom LLC's operating agreement, the aggregate acquisition fees of $3.8
million in connection with the Company's acquisition of the cable systems of
Triax Midwest Associates, L.P. and Zylstra Communications Corporation have been
waived by Mediacom Management and no further acquisition fees were payable after
November 19, 1999.
The operating agreement also provided for reimbursement of reasonable out-of-
pocket expenses incurred by Mediacom Management in connection with the operation
of the business of Mediacom LLC and acting on behalf of Mediacom LLC in
connection with any potential acquisition of a cable system. In 1999, there
were no out-of-pocket expenses reimbursed to Mediacom Management.
Purchase of Assets
Pursuant to an agreement with Mediacom Management, the Company purchased all
of Mediacom Management's assets upon the completion of the Company's initial
public offering. The Company paid Mediacom Management approximately $653,000 for
the furniture, computers and other office equipment that Mediacom Management
purchased to conduct its operations. The purchase price paid to Mediacom
Management for such assets approximated their carrying value.
Other Relationships
Prior to the issuance of the Company's common stock in exchange for all
membership interests in Mediacom LLC, Chase Manhattan Capital, LLC and CB
Capital Investors, LLC were members of Mediacom LLC. Chase Manhattan Capital,
LLC and CB Capital Investors, LLC are parties related to Chase Securities Inc.
and The Chase Manhattan Bank.
Chase Securities Inc. was one of the co-managers of the Company's initial
public offering. In connection with its initial public offering, Chase
Securities Inc. received underwriting discounts and commissions in the amount of
approximately $350,000 on February 9, 2000.
Chase Securities Inc. acted as an initial purchaser in connection with the
offering of the Company's 7-7/8% senior notes in 1999. Chase Securities Inc.
received fees in the amount of approximately $3.1 million in 1999 in connection
with the offering.
Chase Securities Inc. acted as an advisor in connection with the Company's
acquisition of the Triax systems. For these services, Chase Securities Inc.
received a fee in the amount of $3.0 million. Thomas V. Reifenheiser, a member
of the Company's Board of Directors, is associated with Chase Securities Inc.
Prior to the issuance of the Company's common stock in exchange for all
membership interests in Mediacom LLC, Morris Communications was a member of
Mediacom LLC. Morris Communications received commitment fees of approximately
$268,000 in 1999 in connection with its capital contributions to Mediacom LLC.
Prior to the issuance of the Company's common stock in exchange for all
membership interests in Mediacom LLC, U.S. Investor, Inc. was a member of
Mediacom LLC. In connection with its purchase of a cable television system in
Kern County, California from Booth American Company, the parent of U.S.
Investor, one of the Company's subsidiaries issued to Booth American Company an
unsecured senior subordinated note in the original amount of $2.8 million.
Interest on the note was deferred throughout the term and was payable on
prepayment or at maturity on June 28, 2006. In 1999, the annual interest rate on
the note was 9.0%. The note, together with all accrued interest, was repaid on
September 24, 1999.
Until November 3, 1999, Mediacom LLC's operating agreement obligated its
members to make capital contributions to Mediacom LLC. The following table sets
forth such capital contributions by those members of Mediacom LLC who owned more
than 5% of its membership interests. The capital contributions made by those
10
<PAGE>
members on November 3, 1999 are part of the $10.5 million equity contribution
made by the members of Mediacom LLC in connection with the acquisition of the
Triax systems.
November 3,
Member 1999
------ --------------
(in thousands)
U.S. Investor, Inc..................................... $ 256
Morris Communications Corporation...................... 8,918
CB Capital Investors, LLC.............................. 512
Robert L. Winikoff, a member of the Company's Board of Directors, was a
partner at the law firm of Cooperman Levitt Winikoff Lester & Newman, P.C.,
which served as the Company's outside general counsel on various matters.
Cooperman Levitt Winikoff Lester & Newman, P.C. received fees from Mediacom LLC
in the amount of $771,000 in 1999.
Changes to Organizational Structure
Immediately prior to its initial public offering in February 2000, the Company
issued 40,657,010 shares of our Class A common stock and 29,342,990 shares of
its Class B common stock in exchange for all of the outstanding membership
interests of Mediacom LLC, which served as the holding company for the Company's
operating subsidiaries. As a result, the Company became the parent company of
Mediacom LLC, which continues to serve as the holding company of such
subsidiaries.
Mediacom LLC's amended operating agreement provided that upon the occurrence
of the Company's initial public offering, the executive committee of Mediacom
LLC would make a determination of the aggregate equity value of Mediacom LLC.
Based on this determination, Mediacom LLC issued additional membership interests
to its members, each having a value upon issuance of $1,000. As a consequence of
the Company's initial public offering at $19.00 per share and a determination
of the aggregate equity value of Mediacom LLC of $1.3 billion, Mediacom LLC
issued additional membership interests to its members based upon such
determination immediately prior to the Company's initial public offering. These
newly issued membership interests were exchanged for the Company's shares of
common stock upon the Company's initial public offering in February 2000.
Mediacom LLC's amended operating agreement contained provisions relating to a
special allocation of membership interests to Mr. Commisso, the Company's
executive officers and some of our non-executive officers under certain
circumstances. In accordance with these special allocation provisions under the
operating agreement, Mr. Commisso was issued additional membership interests in
1999 that had a value upon issuance of $57.9 million. A provision in the
amended operating agreement removed a certain portion of the special allocation
of membership interests awarded to Mr. Commisso, the Company's executive
officers and some of the Company's non-executive officers, based upon aggregate
equity value of Mediacom LLC. In connection with the removal of these certain
special allocation provisions and the amendments to Mediacom LLC's management
agreements with Mediacom Management effective November 19, 1999, Mr. Commisso
and such executive and non-executive officers were issued new membership
interests representing 16.5% of the aggregate equity value of Mediacom LLC,
which amount was then adjusted to give effect to the dilution of the equity
interests of Mr. Commisso and related parties resulting from the issuance of
such new membership interests. These newly issued membership interests, as
adjusted for such dilution effect, were exchanged for 7,295,025 shares of the
Company's Class B common stock, which had an aggregate value of approximately
$138.6 million on the date of the exchange.
In addition, in connection with the amendment and the removal of the remainder
of the special allocation provisions of the operating agreement, Rocco B.
Commisso, Mark E. Stephan, James M. Carey, Joseph Van Loan, Italia Commisso
Weinand, John G. Pascarelli and eight of our non-executive officers received
options to purchase 6,851,107, 95,014, 53,208, 64,610, 64,610, 30,405 and an
aggregate of 41,046 shares of our Class B common stock. These options have a
term of five years and are exercisable, commencing on August 3, 2000, at a price
of $19.00 per share.
11
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, with the concurrence of the Audit Committee, has
selected Arthur Andersen LLP as the Company's independent auditors for the
fiscal year ending December 31, 2000. Although stockholder ratification of the
Board of Directors' action in this respect is not required, the Board of
Directors considers it desirable for stockholders to pass upon such appointment.
A representative of Arthur Andersen LLP is expected to attend the meeting and
will be available to respond to appropriate questions from stockholders.
The Board of Directors recommends a vote FOR ratification of the appointment of
Arthur Andersen LLP.
ANNUAL REPORT
A copy of the Company's 1999 Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 is being mailed to stockholders together with this proxy
statement. No part of such annual report shall be regarded as proxy-soliciting
material or as a communication by means of which any solicitation is being made
or is to be made.
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before the
meeting. However, if other matters should come before the meeting, it is the
intention of each person named in the proxy to vote each proxy in accordance
with his or her judgment on such matters.
2001 STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the Securities and Exchange
Commission. In order for stockholder proposals for the 2001 Annual Meeting of
Stockholders to be eligible for inclusion in the Company's proxy statement, the
Secretary of the Company must receive them at the Company's principal executive
offices not later than January 31, 2001.
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<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR PROPOSALS 1 AND 2
Please mark [X]
your votes as
indicated in
this example
<TABLE>
<CAPTION>
<S> <C>
1. Election of Directors The nominees for the Board of Directors are: Rocco B.
Commisso, Mark E. Stephan, William S. Morris III,
FOR all nominees WITHHOLD Craig S. Mitchell, Thomas V. Reifenheiser, Natale S.
listed to the right AUTHORITY Ricciardi ad Robert L. Winikoff.
(except as marked to vote for all
to the contrary) nominees listed (INSTRUCTIONS: To withhold authority to vote for any
to the right individual nominee, write the nominee's name in the space
[ ] [ ] provided below.)
Exceptions:_______________________________________________
</TABLE>
2. To ratify the selection of Arthur Andersen LLP as the Company's independent
accountants for the fiscal year ending December 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To transact such other business as may properly come before the meeting.
Yes, I plan to attend the 2000 Annual Stockholders Meeting [ ]
Please sign exactly as name appears hereon. Joint owners should each sign. When
signing as attorney, 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 an authorized person.
Dated:_____________________________, 2000
_________________________________________
Signature
-----------------------------------------
Signature
PLEASE SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE.
------------------------------------------------------------------------------
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<PAGE>
MEDIACOM COMMUNICATIONS CORPORATION
2000 ANNUAL MEETING OF STOCKHOLDERS
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Rocco B. Commisso and Mark E. Stephan as
proxies, each with the power to appoint his substitute, and hereby authorizes
them, and each of them, to vote all shares of Class A common stock and Class B
common stock of Mediacom Communications Corporation (the "Company") held of
record by the undersigned at the 2000 Annual Meeting of Stockholders, to be held
at the offices of Sonnenschein Nath & Rosenthal, 1221 Avenue of the Americas,
26th Floor, New York, New York 10020, at 10:00 a.m. local time, on September 26,
2000, or any adjournment or postponement thereof.
When properly executed, this proxy will be voted in the manner directed
herein by the undersigned stockholder. If no direction is given, this proxy will
be voted "for" each of the proposals set forth on the reverse side.
(Continued and to be Completed on Reverse Side)
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FOLD AND DETACH HERE
