<PAGE>
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
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
AM COMMUNICATIONS, INC.
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(Name of Registrant as Specified in Its Charter)
AM COMMUNICATIONS, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:*
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4) Proposed maximum aggregate value of transaction:
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*Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_______________________________________________
2) Form Schedule or Registration Statement No.:__________________________
3) Filing Party:_________________________________________________________
4) Date Filed:___________________________________________________________
<PAGE>
AM COMMUNICATIONS, INC.
1900 AM Drive
P.O. Box 9004
Quakertown, PA 18951-9004
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
October 16, 1995
The Annual Meeting of Stockholders of AM Communications, Inc. (the
"Company") will be held on Monday, October 16, 1995 at 11:00 a.m. at Meyers
Restaurant, 501 N. West End Boulevard (Route 309, 1 mile North of the
intersection of Routes 313 and 663), Quakertown, PA 18951-9004 for the following
purposes:
1. To elect five directors; and
2. To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
The close of business on August 25, 1995 has been fixed as the record date
for the meeting. All stockholders of record at that time are entitled to notice
of and to vote at the meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the meeting. The Board of
Directors urges you to date, sign and return promptly the enclosed proxy, which
is solicited by the Board of Directors of the Company, even if you attend the
meeting. The return of the proxy will not affect your right to vote in person if
you do attend the meeting. A copy of the Company's 1995 Annual Report is also
enclosed but is not to be regarded as proxy solicitation material.
Keith D. Schneck
President
September 20, 1995
<PAGE>
AM COMMUNICATIONS, INC.
1900 AM Drive
P.O. Box 9004
Quakertown, PA 18951-9004
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of AM
Communications, Inc. (the "Company"), a Delaware corporation, for use at the
Annual Meeting of Stockholders to be held at Meyers Restaurant, 501 N. West End
Boulevard (Route 309, 1 mile North of the intersection of Routes 313 and 663),
Quakertown, PA 18951 on October 16, 1995 at 11:00 a.m., and any adjournment or
postponement thereof. This proxy statement, the foregoing notice, and the
enclosed proxy are being mailed to stockholders on or about September 20, 1995.
The Board of Directors does not intend to bring any matters before the
meeting for action other than the matters specifically referred to in the notice
of the meeting, nor does the Board of Directors know of any matter which anyone
else proposes to present for action at the meeting. However, if any other
matters properly come before the meeting for action, the persons named in the
accompanying form of proxy, or their duly constituted substitutes acting at the
meeting, will be deemed authorized to vote or otherwise act thereon in
accordance with their judgment in such matters.
In the absence of contrary instructions in proxies the shares represented
by proxies will be voted "For" the nominees of the Board of Directors in the
election of directors, and in the discretion of the proxy holders on such other
matters as may properly come before the meeting. Any proxy may be revoked at any
time prior to its exercise by notifying the President of the Company in writing,
by delivering a duly executed proxy bearing a later date, or by attending the
meeting and voting in person.
Voting Securities and Certain Beneficial Holders Thereof
At the close of business on August 25, 1995, the record date to determine
stockholders entitled to vote at the Annual Meeting, the Company had 30,412,961
outstanding shares of Common Stock, par value $.10 per share, and 25,825
outstanding shares of Senior Convertible Redeemable Preferred Stock, par value
$100 per share.
1
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On August 25, 1995, the aggregate market value of Registrant's outstanding
voting (Common) Stock held by non-affiliates, was $16,686,257 (based on the
average between the bid and the asked prices of such stock on that date).
The presence, in person or by proxy, of stockholders entitled to cast a
majority of the votes which all stockholders are entitled to cast will
constitute a quorum. On all matters voted upon at the meeting and any
adjournment or postponement thereof, each record holder of Common Stock will be
entitled to one vote per share and each record holder of Senior Convertible
Redeemable Preferred Stock will be entitled to 100 votes per share. In the
election of directors, stockholders do not have cumulative voting rights. The
nominees receiving the highest number of votes cast, up to the number of
directors to be elected, shall be elected. Abstentions are counted in the
tabulations of the votes cast on proposals presented to stockholders, whereas
broker non-votes are not counted for purposes of determining the election of
directors or whether a proposal has been approved.
Security Ownership of Certain Beneficial Owners and Management
The table below sets forth certain information as of August 25, 1995 with
respect to each person and entity known to the Company to be the beneficial
owner of more than 5% of the outstanding shares of the Company's common stock,
each nominee for director of the Company and each executive officer listed in
the cash compensation table who owns shares of common stock, and all officers
and directors of the Company as a group.
Beneficial Ownership
Beneficial Owner (1) (2) Amount Percentage of Class(11)
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Alvin Hoffman 16,790,662(3) 55.0%
Henry I. Boreen 1,605,765(4) 5.1%
William R. Bastian 874,028(5) 2.8%
Keystone Venture II, L.P. 686,920(6) 2.3%
G. Kenneth Macrae 686,920(7) 2.3%
Herman O. Benninghoff, II 255,000(8) *
Keith Schneck 102,500 *
Hal Krisbergh 10,000(9) *
All Directors and Executive
Officers as a Group (10 Persons) 21,028,949(7)(10) 63.3%
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* Less than one percent.
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(1) To the best of the Company's knowledge, all shares of stock are owned
beneficially, and sole voting and investment power is held with respect thereto,
by the persons and entities named, except as otherwise noted.
(2) The address of Mr. Hoffman is 6699 N. W. Second Avenue, Boca Raton, FL
33487. The address of Mr. Boreen is 1182 Wrack Road, Meadowbrook PA 19046. The
address for Mr. Bastian is R.D. 1, Box 113F, Loganton, PA 17747. The address for
Mr. Macrae is Keystone Venture II, L.P., 1601 Market Street, Suite 2500,
Philadelphia, PA 19103 and Mr. Benninghoff's address is 605 Hilltop Road,
Cinnaminson, NJ 08077. Mr. Schneck's address is 925 Wharton Circle, Lower
Gwynedd, PA 19002 and Mr. Krisbergh's address is 1538 Meadowbrook Road, Rydal,
PA 19046.
(3) The information concerning the beneficial ownership of Mr. Hoffman is
based, in part, upon information furnished by Mr. Hoffman to the Company. The
beneficial ownership indicated represents (i) an aggregate of 16,191,837 shares
of Common Stock currently owned, (ii) 25,825 shares of Senior Convertible
Preferred Stock currently owned (which are presently convertible on a
one-for-one basis into shares of the Company's Common Stock), (iii) 100,000
shares which may be purchased upon exercise of warrants issued by the Company to
Mr. Hoffman, and (iv) 473,000 shares of Common Stock currently owned by Mr.
Hoffman's wife. Mr. Hoffman disclaims beneficial ownership of the shares set
forth in (iv) above.
(4) Includes 100,000 shares which may be acquired upon the exercise of
warrants issued by the Company in connection with the Senior Promissory Note,
and 875,000 shares which may be acquired upon the exercise of stock options in
accordance with the Company's 1982 and 1991 Incentive Stock Option Plans.
(5) Includes 100,000 shares which may be acquired upon the exercise of
warrants issued by the Company in connection with the Senior Promissory Note,
and 475,000 shares which may be acquired upon exercise of stock options in
accordance with the Company's 1982 Incentive Stock Option Plan.
(6) The information concerning the beneficial ownership of Keystone Venture
II, L.P. is based upon its Schedule 13D filings with the Securities and Exchange
Commission. See footnote (7).
(7) Includes shares beneficially owned by Keystone Venture II, L.P. for
which the controlling authority is held by G. Kenneth Macrae. See Footnote (6).
(8) Includes 160,000 shares which may be acquired upon the exercise of
stock options in accordance with the Company's 1982 and 1991 Incentive Stock
Option Plans.
(9) Includes 10,000 shares which may be acquired upon the exercise of stock
options in accordance with the Company's 1991 Incentive Stock Option Plan.
(10)Includes an aggregate of 18,172,622 shares of Common Stock and 25,825
shares of Senior Convertible Redeemable Preferred Stock (which are presently
convertible on a one-for-one basis into shares of the Company's Common Stock)
currently owned and 2,830,502 shares of Common Stock which may be acquired upon
the exercise of options and warrants.
(11)The percentages have been calculated on the basis of treating as
outstanding, for a particular holder, all shares of the Common Stock outstanding
on said date and all shares of the Common Stock issuable to such holder in the
event of exercise or conversion of outstanding options, warrants and convertible
securities owned by such holder at said date which are exercisable or
convertible within 60 days of such date.
3
<PAGE>
The table below sets forth certain information as of August 25, 1995 with
respect to each person and entity known to the Company to be the beneficial
owner of more than 5% of the outstanding shares of the Company's Senior
Convertible Redeemable Preferred Stock.
Beneficial Ownership
Beneficial Owner Amount Percentage of Class
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Alvin Hoffman 25,825 100%
1. ELECTION OF DIRECTORS
At the meeting, the stockholders will be asked to elect five directors, to
hold office until the next annual meeting or until their respective successors
have been duly elected and qualified. It is expected that proxies executed on
the enclosed form will be voted, in the absence of other instructions, for the
election of the persons named below, each of whom is presently serving as a
director of the Company. Should any one or more of these nominees become
unavailable to accept nominations or election as a director, the persons named
in the enclosed proxy will vote the shares which they represent for the election
of such other persons as the Board of Directors may recommend, unless the Board
of Directors reduces the number of directors.
The nominees for directors together with certain information with respect
to them, are as follows:
<TABLE>
<CAPTION>
Became
Name & Age Director Principal Occupation and Business During Last Five Years
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<S> <C> <C>
Henry I. Boreen, 68 1985 Mr. Boreen has served as Chairman and Chief Executive Officer of
the Company since 1990. He also served as Chief Financial Officer and
President from 1990 through April 1995. He has been Chief Executive Officer and
a director of HIB International, Inc., which participates in high technology
joint ventures, since 1985. Mr. Boreen is also Chairman of Integrated Circuit
Systems, a publicly held company.
Keith D. Schneck, 40 1995 Mr. Schneck joined the Company in April 1995 as President and Chief Financial
Officer and became a director in June 1995. From 1987 until he joined the
Company, Mr. Schneck held senior management positions at Integrated Circuit
Systems, Inc. including Chief Operating Officer and Senior Vice President,
Finance.
Herman O. Benninghoff, II, 63 1988 Mr. Benninghoff has served as Chairman of Philadelphia Pipe Bending Co.
and D Kay Fabricators, Inc. since 1977. He is also a director and principal
in STF Corporation Inc., Rockaway, NJ.
Alvin Hoffman, 67 1995 Mr. Hoffman is a private investor and has been a registered broker with
Makefield Securities in Boca Raton, FL since 1982.
Hal Krisbergh, 48 1995 Mr. Krisbergh is President of WorldGate Communications located in Rydal, PA and
is also a director of Ortel Corporation. He previously served as President of
the Communications Division of General Instrument Corporation from 1981 to
1994.
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</TABLE>
4
<PAGE>
William R. Bastian and G. Kenneth Macrae have resigned as directors of the
Company effective October 16, 1995. The Board of Directors of the Company has
voted not to fill the vacancy created by Mr. Bastian's and Mr. Macrae's
resignations and, accordingly, the number of directors of the Company will be
reduced from seven to five.
Section 16 (a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than 10% of its
common stock, to file reports of ownership and changes in ownership of the
Common Stock with the Securities and Exchange Commission. The Company believes
that all filing requirements applicable to its officers, directors and greater
than 10% beneficial owners have been timely satisfied. Based solely on its
review of copies of such forms received by it, or written representations from
certain reporting persons that no Form 5s were required for those persons, the
Company believes that, during the fiscal year ended April 1, 1995, all Section
16(a) filing requirements applicable to its officers, directors and greater than
10% beneficial owners were satisfied.
Information Concerning Meetings, Committees and Directors' Compensation
The Board of Directors held four regular meetings during the fiscal year
ended April 1, 1995 and acted twice by unanimous consent in writing in
accordance with Delaware law. During fiscal 1995, all directors attended at
least 75% of the total number of meetings of the Board of Directors and
committees of the Board on which they served.
The Audit Committee is responsible for reviewing internal audit activities,
recommending to the Board of Directors the engagement of independent auditors,
and reviewing the professional services rendered by the independent auditors
including the scope of the audit, their fees, and the results of their
engagement. No member of the committee is an employee of the Company. The Audit
Committee consists of Messrs. Bastian and Macrae, who met once during fiscal
1995. Since both Mr. Bastian and Mr. Macrae have resigned, the new Board of
Directors intends to appoint two new directors to serve as members of this
committee.
5
<PAGE>
The Compensation and Stock Option Committee is responsible for the
administration of the current Incentive Stock Option Plan which committee is
authorized to select optionees and determine the terms of their options, subject
to the provisions of the 1991 Incentive Stock Option Plan. In addition, the
Committee reviews and approves employee compensation plans and such other
benefits as it deems advisable. The Compensation and Stock Option Committee
consists of Messrs. Macrae and Benninghoff. The Committee met once during the
last fiscal year.
The Company does not have a Nominating Committee.
Directors who are not officers or employees of the Company are paid $500
for each Board of Directors meeting and Committee meeting attended. In 1988, the
directors had agreed to forego receipt of such payments for the foreseeable
future. This policy was reinstated in July, 1995. In addition, commencing on
July 1, 1995, each director, who is not an employee of the Company, will be
entitled to receive, on July 1 of each year, an automatic grant of annual
incentive stock options covering 10,000 shares of the Company's Common Stock,
pursuant to the 1991 Incentive Stock Option Plan.
Executive Officers
<TABLE>
<CAPTION>
Became
Name & Age Officer Position with the Company and Business During Last Five Years
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<S> <C> <C>
Henry I. Boreen, 68 1990 Chairman and Chief Executive Officer since October 1990. Served as
Chief Financial Officer and President from 1990 to 1995.
Keith D. Schneck, 40 1995 President and Chief Financial Officer since joining the Company in April, 1995.
He held senior management positions at Integrated Circuit Systems, Inc.
including Chief Operating Officer and Senior Vice President, Finance from 1987
until he joined the Company.
David L. DeLane, 55 1988 Vice President, Sales and Marketing since joining the Company in 1988.
Michael L. Quelly, 42 1989 Executive Vice President of the Company. Served as Vice President, Engineering
of the Company from 1989 to 1990 at which time he was appointed to his present
position. He has been employed by the Company since 1982.
Joseph D. Rocci, 47 1988 Vice President, Products & Technology of the Company since 1989. Served as Vice
President, Product Operations of the Company from 1988 to 1989. He has been
employed by the Company since 1983.
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</TABLE>
Executive Compensation
The following table sets forth information concerning cash remuneration for
each of the last three fiscal years of the Company's Chief Executive Officer,
and with respect to stock options granted during the last three fiscal years to
the Company's Chief Executive Officer.
6
<PAGE>
Annual and Long Term Compensation
Name & Principal Fiscal Stock Options Other
Position Year Salary Awarded Compensation
---------------- ------ ------ -------------- ------------
Henry I. Boreen 1995 --- --- $4,000(1)
Chairman, CEO, 1994 --- --- ---
and CFO* 1993 --- 650,000 ---
*Mr. Boreen was CFO of the Company until April, 1995.
(1) Represents premium for directors' and officers' liability insurance.
There were no stock option or stock appreciation rights granted to or
exercised by Mr. Boreen during the last fiscal year. The Company does not
maintain any long term incentive plans for its officers.
The Company does not have any employment contracts or arrangements with any
of its executive officers.
The Company does not have, and during the past five fiscal years has not
had, any other plans providing cash or non-cash compensation to officers or
employees, other than the Company's 1982 and 1991 Incentive Stock Option Plans,
and group life, health or relocation plans available generally to all salaried
employees that do not discriminate in scope, terms or operation in favor of
officers or directors.
The following table sets forth certain information pertaining to the stock
options held by the individual named in the Cash Compensation Table:
<TABLE>
<CAPTION>
Fiscal 1995 Year End Option Values
----------------------------------
Number of Value of
Unexercised Options In-the-Money Options
At Fiscal Year End at April 1, 1995 (1)
------------------ --------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Henry I. Boreen 648,334 216,666 $1,215,872 $429,540
</TABLE>
(1) Value is based upon the closing price of the stock on April 1, 1995,
less the exercise price.
Certain Relationships and Related Transactions
During fiscal 1994, warrants to purchase 2,115,000 shares of the Company's
Common Stock held by Mr. Hoffman, the Company's majority stockholder, for loans
he made to the Company were granted a one year extension to December 28, 1994.
Pursuant to the Amendment to the Warrant Agreement, effective as of March 31,
7
<PAGE>
1994, Mr. Hoffman agreed to amend the exercise price of each such warrant, which
was originally $1.25 per share and which could have potentially been adjusted to
$0.125 per share as a result of subsequent events, to $0.45 per share. In
November 1994, these warrants were extended to April 30, 1995. Mr. Hoffman
exercised all such warrants prior to their expiration. The exercise price was
paid in cash except for $850,803 which was satisfied by a note receivable,
bearing 8% interest, from Mr. Hoffman, due June 30, 1995. The note receivable
was paid on the due date.
In addition, warrants to purchase 3,988,470 shares of the Company's Common
Stock issued pursuant to the Securities Conversion Agreement which were
originally due to expire on June 2, 1993 were subsequently extended to April 30,
1995, in accordance with the Amendment to Warrant Agreement. Holders of these
warrant shares include Alvin Hoffman, 1,766,345 shares; Henry I. Boreen,
Chairman and CEO, 160,255 shares; William R. Bastian, director and minority
stockholder, 150,000 shares; Keystone Venture II, L.P., minority stockholder,
576,920 shares; and Herman O. Benninghoff, II, director and minority
stockholder, 25,000 shares. The Securities Conversion Warrant Holders also
agreed to modify the exercise price of their warrants, which was initially $1.00
per share and could have potentially been adjusted to $0.125 per share as a
result of subsequent events, to $0.45 per share pursuant to the Amendment to
Warrant Agreement, effective March 31, 1994. These warrants were exercised prior
to their expiration.
Pursuant to an agreement with Alvin Hoffman, the Company's majority
stockholder, effective as of March 31, 1994, all long term debt owed by the
Company to Mr. Hoffman was converted to equity. As part of this agreement,
$2,200,011 of the debt was converted into 4,888,913 shares of the Company's
Common Stock at $0.45 per share, and $2,582,500 of the debt was converted into
25,825 shares of Senior Convertible Redeemable Preferred Stock, par value $100
per share. Also as part of the agreement, $1,774,344 of accrued interest owed by
the Company to Mr. Hoffman was completely forgiven. This conversion resulted in
the Company's negative equity of $4,908,000 changing to a positive equity of
$2,004,000.
ADDITIONAL INFORMATION
Relationship with Independent Public Accountants
Deloitte & Touche LLP, which has served as the Company's independent public
accountants for the last fiscal year, has been selected by the Board of
Directors as the independent public accountants for the Company's current fiscal
year. A representative of Deloitte & Touche LLP is expected to be present at the
meeting with the opportunity to make a statement if he desires to do so and will
be available to respond to appropriate questions from stockholders.
8
<PAGE>
The Board of Directors approved the appointment of the Company's
independent public accountants to perform generally the audit services normally
rendered by public accounting firms.
Stockholder Proposals
Proposals of stockholders intended to be presented at the Annual Meeting of
Stockholders in 1996 must be received by the Company by May 21, 1996, in order
to be considered for inclusion in the Company's proxy statement and form of
proxy relating to the meeting.
Solicitation of Proxies
Expenses in connection with the solicitation of proxies will be paid by the
Company. Solicitation of proxies will be principally by mail. In addition, some
of the directors, officers or other employees of the Company may solicit proxies
personally, by telephone, or by mail, if deemed appropriate.
Annual Report on Form 10-KSB
The Company will provide without charge to each person solicited by this
proxy statement, on the written request of any such person, a copy of the
Company's Annual Report on Form 10-KSB, including the financial statements and
the schedules thereto, as filed with the Securities and Exchange Commission for
its 1995 fiscal year. Such written requests should be directed to the
Shareholder Relations Department, AM Communications, Inc., P.O. Box 9004,
Quakertown, PA 18951-9004.
Keith D. Schneck
President
September 20, 1995
9
<PAGE>
P R O X Y This Proxy is Solicited on Behalf of the Board of
AM Communications, Inc. Directors
1900 AM Drive
P.O. Box 9004 The undersigned hereby appoints Keith D. Schneck
Quakertown, PA 18951-9004 and Patricia A. Eynon, and each of them, proxy for
the undersigned, with full power of substitution,
to vote all shares of Common Stock and Senior
Convertible Redeemable Preferred Stock of
AM Communications, Inc. which the undersigned is
entitled to vote at the Annual Meeting of
Stockholders to be held on October 16, 1995 at
11:00 a.m. or any adjournment thereof.
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1. Election of Directors.
FOR all five nominees listed (except as marked to the contrary below).
WITHHOLD AUTHORITY to vote for all five nominees listed below.
(To withhold authority to vote for any individual nominee, strike a line
through the nominee's name listed below.)
Nominees: Herman O. Benninghoff, II Henry I. Boreen Keith D. Schneck
Hal Krisbergh Alvin Hoffman
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
<PAGE>
NOT VALID UNLESS DATED AND SIGNED ON REVERSE SIDE
This proxy when properly executed will be voted in the manner directed herein by
the undersigned stockholder. If no direction is made, this proxy will be voted
FOR the election of all five nominees for directors.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should 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 duly authorized officer. If a partnership, please
sign in partnership name by authorized person.
The undersigned hereby revokes all previous proxies for such meeting, and hereby
acknowledges receipt of the Notice of the Meeting, the Proxy Statement, and the
Annual Report of AM Communications, Inc. furnished therewith.
Dated: ,1995
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Stockholder's Signature
-----------------------------------------
Stockholder's signature, if held jointly.
Please mark, sign, date, and return the proxy card promptly using the enclosed
envelope.
