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PRELIMINARY COPY
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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14a-6(e)(2))
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COMSAT Corporation
(Name of Registrant as Specified In Its Charter)
PROVIDENCE CAPITAL, INC./WYSER-PRATTE & Co., Inc.
(Name of Person(s) Filing Proxy Statement)
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CONTACT:
Stanley J. Kay, Jr.
MacKenzie Partners, Inc.
212/929-5940
FOR IMMEDIATE RELEASE:
COMSAT SHAREHOLDERS TO SOLICIT AGENT
DESIGNATIONS TO CALL SPECIAL MEETING.
NEW YORK, NY, April 8, 1997 -- Guy P. Wyser-Pratte, President of Wyser-Pratte
and Co., Inc. and Herbert Denton, President of Providence Capital, Inc.
announced today their intention to solicit Agent Designations from shareholders
of COMSAT Corporation (NYSE: CQ) to call a special meeting of shareholders.
At the special meeting, shareholders would be asked to consider two Shareholder
Democracy proposals requesting the Company's Board to:
o schedule the 1997 Annual Meeting of Shareholders as soon as possible.
o eliminate, prior to the 1997 Annual Meeting, its restrictions on voting
rights of shareholders who own more than 5 percent of the Company's common
stock.
The consent of shareholders owning at least 20 percent of the Company's
outstanding common shares is required in order to call a special meeting.
COMSAT has approximately 48.96 million common shares outstanding.
Commenting on their reasons for soliciting Agent Designations, Mr. Wyser-Pratte
and Mr. Denton said, "The owners of COMSAT have suffered long enough. Despite a
number of prized assets, in particular, COMSAT's core satellite business,
management's financial performance has been abysmal."
"The Company currently faces capital constraints, negative operating cash flow,
a leveraged balance sheet reliant upon risky short-term borrowings, and now, a
dividend which may be cut or eliminated."
"We blame the Board for much of this mismanagement," they continued, "Unlike the
Board composition of its leading competitors, COMSAT's directors are not
seasoned, entrepreneurial managers with public company experience, yet they are
managing an exceptionally entrepreneurial, fast-paced business. The
professional backgrounds of the majority of the Board are in law,
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Providence/Wyser-Pratte
April 8, 1997
Page Two
regulated industries and government service. We strongly believe that a group
of government bureaucrats and lawyers as directors are not in the best interests
of shareholders and their record over the past five years demonstrates this."
"COMSAT should have a Board composed of executives with vision and
entrepreneurial zeal, as well as significant senior management, operating and
technological experience in public companies strongly connected with the
businesses in which COMSAT competes."
"An Annual Meeting must be held as soon as possible so shareholders can exercise
their franchise and elect a Board with these relevant qualifications. The
Company had no good reason to have postponed this years' Annual Meeting, except
for its fear of facing a proxy fight, so we look to the shareholders to request
that the Board hold one as soon as possible."
"Furthermore," Mr. Wyser-Pratte and Mr. Denton concluded, "shareholders who own
more than 5 percent of the stock lose their right to decide how to vote any
shares in excess of the 5 percent limit. Instead, these extra shares are voted
pro-rata with all other shares. This voting restriction policy is clearly
undemocratic, unfair and unnecessary."
"We will seek shareholder support at the Special Meeting to request the Board to
change this policy prior to the Annual Meeting. We will be mailing our Agent
Designation statement shortly and we urge all shareholders to read it carefully
once received. It is time for COMSAT shareholders to take charge of their
investment"
COMSAT Corporation, headquartered in Bethesda, MD, is a global provider of
telecommunications and satellite systems.
Wyser-Pratte and Co., Inc. is a New York City investment firm specializing in
special situations, event arbitrage and corporate governance.
Providence Capital, Inc. is a New York City broker-dealer with expertise in
shareholder and corporate governance matters.
Together, both firms, their partners, officers and employees own beneficially
1,339,000 common shares or approximately 2.74% of the Company.
# # #
ADDITIONAL INFORMATION FOLLOWS
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Providence/Wyser-Pratte
April 8, 1997
Page Three
ADDITIONAL INFORMATION
Mr. Guy P. Wyser-Pratte owns beneficially 1,253,400 shares of common stock,
representing approximately 2.56% of COMSAT. This includes shares owned directly
by Mr. Wyser-Pratte and shares owned by investment partnerships and other
managed accounts for which affiliates of Wyser-Pratte & Co., Inc. are the
general partner or investment manager. Other than Mr. Wyser-Pratte, no other
officer of Wyser-Pratte & Co., Inc. owns any common shares of COMSAT. The
principal offices of Wyser-Pratte & Co., Inc. are located at 63 Wall Street, New
York, NY 10005.
Providence Capital, Inc. owns beneficially 11,100 common shares of the Company
and options to purchase 40,000 additional common shares. Providence Investors,
LLC, a private investment vehicle organized as a limited liability company of
which Mr. Herbert Denton is a managing member, owns 25,000 shares of the
Company's common stock and options to purchase 5,000 additional shares of common
stock. Mr. William Tapert, an employee of Providence Capital, Inc. owns
options to purchase 2,000 common shares. Mr. Gregory Morey, a managing member
of Providence Investors, LLC, owns 2,500 common shares.
The three managing members of Providence Investors, LLC, -- Mr. Denton, Mr.
Morey and Mr. Frederick Whitridge, Jr. -- each own 11.1% of Providence
Investors, LLC. Mr. Denton owns 100% of Providence Capital, Inc. Except for Mr.
Tapert and Mr. Morey, none of the managing members of Providence Investors, LLC
and none of the officers or employees of Providence Capital, Inc. own any shares
of the Company's common stock. The principal offices of Providence Capital,
Inc. and Providence Investors, LLC are located at 730 Fifth Avenue, New York,
NY 10019.
Other participants may include Eric Longmire, Senior Managing Director of
Wyser-Pratte & Co., Inc. and Adam Weiss, an employee of Providence Capital, Inc.
