<PAGE>
<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C> <C>
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
AUDIO COMMUNICATIONS NETWORK, INC.
(Name of Registrant as Specified In Its Charter)
AUDIO COMMUNICATIONS NETWORK, INC.
(Name of Person(s) Filing Proxy Statement)
<TABLE>
<S> <C>
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:(1)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
</TABLE>
- ----------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE>
<PAGE>
AUDIO COMMUNICATIONS NETWORK, INC.
1000 Legion Place, Suite 1515
Orlando, Florida 32801
(407) 649-8877
--------------------------------
Notice of Annual Meeting of Shareholders
to be held
August 21, 1997
To the shareholders of Audio Communications Network, Inc.:
You are cordially invited to attend the Annual Meeting of the Shareholders
(the "Annual Meeting") of Audio Communications Network, Inc., which will be held
at the Radisson Plaza Hotel, 60 South Ivanhoe Boulevard, Orlando, Florida 32804
at 10:30 a.m., Eastern time, on Thursday, August 21, 1997, to consider and act
upon the following matters:
(1) To consider and act upon a proposal to amend Article 2.3 of the
Company's Amended and Restated Bylaws to set the size of the Board to
not less than seven nor more than nine Directors, with an initial
setting of nine.
(2) The election of nine members to the Board of Directors, if Proposal
"1" is adopted, to hold office for a one-year term and until their
successors are duly elected and qualified. The persons nominated by
the Board of Directors (Messrs. Robert Davidoff, Patrick J. Dougherty,
Robert Dyer, David Gezon, Mitchell Kleinhandler, William Landman, C.
Lee Maynard, A.J. Schell and David Unger) are described in the
accompanying Proxy Statement.
(3) To consider and act upon a proposal to amend Article III of the
Company's Certificate of Incorporation to increase the number of
authorized Common Shares, $.25 par value, from 8,000,000 to 12,000,000
and to authorize up to 1,000,000 Preferred Shares, $.001 par value per
share, to be issued in one or more series on such terms and at such
time or times as the Board of Directors shall determine.
(4) The ratification of the appointment of Deloitte & Touche LLP as the
Company's auditors for the fiscal year ending December 31, 1997.
(5) The transaction of such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Only shareholders of record at the close of business on July 7, 1997, will
be entitled to notice of, and to vote at, the Annual Meeting or any adjournments
thereof.
<PAGE>
<PAGE>
Shareholders are cordially invited to attend the Annual Meeting. Whether or
not you expect to attend the Annual Meeting in person, please complete, date and
sign the accompanying proxy card and return it without delay in the enclosed
postage prepaid envelope. Your proxy will not be used if you are present and
prefer to vote in person or if you revoke the proxy.
Dated: July __, 1997 By order of the Board of Directors,
Doris K. Krummenacker, Secretary
<PAGE>
<PAGE>
AUDIO COMMUNICATIONS NETWORK, INC.
1000 Legion Place, Suite 1515
Orlando, Florida 32801
(407) 649-8877
----------------------------------
Proxy Statement
Annual Meeting of Shareholders
August 21, 1997
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of Audio Communications Network, Inc., a
Florida corporation (the "Company"), for use at the Fiscal 1996 Annual Meeting
of Shareholders of the Company and for any adjournment or adjournments thereof
(the "Annual Meeting"), to be held at the Radisson Plaza Hotel, 60 South Ivanhoe
Boulevard, Orlando, Florida 32804 at 10:30 a.m., Eastern time, on Thursday,
August 21, 1997, for the purposes set forth in the accompanying Notice of Annual
Meeting of Shareholders. A Board of Directors' proxy (the "Proxy") for the
Annual Meeting is enclosed, by means of which you may indicate your votes as to
each of the proposals described in this Proxy Statement.
All Proxies which are properly completed, signed and returned to the
Company prior to the Annual Meeting, and which have not been revoked, will be
voted in accordance with the shareholder's instructions contained in such Proxy.
The affirmative vote by holders of a majority of the Common Shares represented
at the Annual Meeting is required for the election of Directors and the
ratification of the appointment of the Company's auditors. The affirmative vote
by holders of a majority of the Common Shares outstanding is required for the
ratification of the adoption of the amendment to the Company's Amended and
Restated Bylaws (the "Bylaws") and the amendment to the Company's Certificate of
Incorporation. Directors and Officers of the Company beneficially own
approximately 64.0% of the outstanding voting shares. Accordingly, approval of
the aforesaid matters is expected. In the absence of contrary instructions,
shares represented by such Proxy will be voted FOR the approval of the amendment
to Article 3.2 of the Bylaws to set the size of the Board of Directors; FOR the
election of the nominees for Directors as set forth herein; FOR the approval of
the amendment to Article III of the Company's Certificate of Incorporation to
increase the number of authorized Common Shares and to authorize the issuance of
Preferred Shares in one or more series on such terms and at such time or times
as the Board of Directors shall determine; and FOR the ratification of the
appointment of the Company's auditors for the fiscal year ending December 31,
1997. Shares represented by Proxies which are marked "abstain" for Proposal 4 on
the proxy card and Proxies which are marked to
<PAGE>
<PAGE>
deny discretionary authority on all other matters will not be included in the
vote totals, and therefore will have no effect on the vote. In addition, where
brokers are prohibited from exercising discretionary authority for beneficial
owners who have not provided voting instructions (commonly referred to as
"broker non-votes"), those shares will be included in determining the presence
of a quorum, but will not be included in the vote totals. Thus, a broker
non-vote will generally have the effect of neither a vote in favor of nor
against the proposal. However, abstentions or broker non-votes by shareholders
who otherwise favor a proposal could, in the event of a negative or tie vote on
such proposal, have the effect of contributing to the defeat of the proposal.
The Board of Directors does not anticipate that any of its nominees will be
unavailable for election and does not know of any other matters that may be
brought before the Annual Meeting. In the event that any other matter shall come
before the Annual Meeting or any nominee is not available for election, the
persons named in the enclosed Proxy will have discretionary authority to vote
all Proxies not marked to the contrary with respect to such matter in accordance
with their best judgment.
A shareholder may revoke his Proxy at any time before it is exercised by
filing with the Secretary of the Company at its executive offices in Orlando,
Florida, either a written notice of revocation or a duly executed Proxy bearing
a later date, or by appearing in person at the Annual Meeting and expressing a
desire to vote his or her shares in person. All costs of this solicitation are
to be borne by the Company.
A list of shareholders entitled to vote at the Annual Meeting will be open
to examination by any shareholder, for any purpose genuine to the meeting, at
the executive offices of the Company, 1000 Legion Place, Suite 1515, Orlando,
Florida 32801, during ordinary business hours for ten days prior to the Annual
Meeting. Such list shall also be available during the Annual Meeting.
This Proxy Statement and the accompanying Notice of Annual Meeting of
Shareholders, the Proxy, and the 1996 Annual Report to Shareholders are expected
to be mailed commencing on or about July __, 1997 to shareholders of record on
July __, 1997.
CHANGE OF CONTROL
On May 30, 1997, the Company completed a business combination (the
"Combination") with Suncom Communications L.L.C., a Delaware limited liability
company ("Suncom"). Under the terms of the agreement, the Company, through its
wholly owned subsidiary, Suncom, Inc., acquired the assets and business of
Suncom, in exchange for which the Company issued 2.1 million Common Shares to
Suncom, which represented approximately 47.5% of the Company's outstanding
Common Shares. In addition, Suncom was granted an option (the "Suncom Option")
to acquire up to 1,000,000 Common Shares at an exercise price of $6.00 per
share. The Suncom Option becomes exercisable upon the
-2-
<PAGE>
<PAGE>
consummation of a public or private offering of the Company's Common Shares, or
securities convertible into such shares, but only with respect to the number of
Common Shares issued in such offering.
Also on May 30, 1997, Suncom consummated an agreement with A.J. Schell
acquiring substantially all of his equity position in the Company. As a result,
Suncom is the owner of 2,697,986 Common Shares, representing approximately 60.7%
of the outstanding Common Shares of the Company. See "Voting Securities."
Immediately following the consummation of these transactions, Mr. Schell
resigned as the Company's President and Chief Executive Officer. However, Mr.
Schell is the Company's Chairman of the Board. Mitchell Kleinhandler and David
Unger, both affiliates of Suncom, were elected President and Executive Vice
President of the Company, respectively. In addition, four members of the Board
of Directors resigned and such vacancies were filled by Messrs. Kleinhandler,
Unger, Gezon and Landman, designees of Suncom. The Company's shareholders are
being asked herein to vote on a proposal to fix the initial size of the Board of
Directors to nine, with the ninth member, Mr. Davidoff, also being a designee of
Suncom. Suncom is the MUZAK'c' affiliate serving portions of the Carolinas,
including Charlotte, Raleigh/Durham, Winston-Salem and Greensboro, as well as
portions of Arizona, including Phoenix.
-3-
<PAGE>
<PAGE>
VOTING SECURITIES
July 7, 1997, has been fixed as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting or any
adjournment or adjournments thereof. As of that date, the Company had
outstanding 4,444,203 Common Shares, $.25 par value (the "Voting Securities").
Common Shareholders have one vote per share held upon all matters to be
considered at the Annual Meeting.
The following table sets forth, as of July 2, 1997, certain information
concerning those persons known to the Company, based on information obtained
from such persons, with respect to the beneficial ownership (as such term is
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of Common
Shares, $.25 par value, of the Company by (i) each person known by the Company
to be the owner of more than 5% of the outstanding Common Shares, (ii) each
nominee for Director and executive officer of the Company, (iii) each executive
officer named in the Summary Compensation Table and (iv) all Officers and
nominees for Directors as a group:
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address of Beneficial Percentage
Beneficial Owner Ownership (1) Class (2)
- ---------------- ------------- ---------
<S> <C> <C>
A.J. Schell (3) 30,000 (4) *
Mitchell Kleinhandler (3) 2,697,986 (5) 60.7%
David Unger (3) 2,703,986 (6) 60.8%
Robert Davidoff 2,697,986 (7) 60.7%
c/o Carl Marks & Co., Inc.
135 East 57th Street
New York, NY 10022
David Gezon 2,697,986 (8) 60.7%
c/o Midwest Mezzanine Fund L.P.
208 S. LaSalle St., Suite 510
Chicago, IL 60604
William Landman 2,697,986 (9) 60.7%
c/o CMS Companies
</TABLE>
-4-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address of Beneficial Percentage
Beneficial Owner Ownership (1) Class (2)
- ---------------- ------------- ---------
<S> <C> <C>
1926 Arch Street
Philadelphia, PA 19103
Patrick J. Dougherty (3) 14,817 *
Robert Dyer (3) 71,399 1.6%
C. Lee Maynard (3) 30,900 *
Suncom Communications L.L.C. 2,697,986 (10) 60.7%
4059 Yancey Road
Charlotte, NC 28217
All Directors and Officers 2,869,709 (11) 64.0%
as a Group (10 persons)
</TABLE>
- -----------------
* Represents less than one percent ownership.
(1) Unless otherwise noted, the Company believes that all persons named in the
table have sole investment power with respect to all Common Shares
beneficially owned by them. A person is deemed to be the beneficial owner
of securities that can be acquired by such person within 60 days from the
date hereof upon the exercise of warrants or options. Each beneficial
owner's percentage ownership is determined by assuming that options or
warrants that are held by such person (but not those held by any other
person) and which are exercisable within 60 days from the date hereof have
been exercised.
(2) Based on 4,444,203 Voting Securities as of July 2, 1997.
(3) The address of this person is Audio Communications Network, Inc., 1000
Legion Place, Suite 1515, Orlando, Florida 32801.
(4) Includes an aggregate of 30,000 Common Shares issuable upon exercise of a
like number of options.
-5-
<PAGE>
<PAGE>
(5) Includes 2,697,986 Common Shares owned by Suncom. Excludes 1,000,000 Common
Shares issuable to Suncom pursuant to the Suncom Option. Mr. Kleinhandler
disclaims beneficial ownership of all securities owned by Suncom except to
the extent of his pecuniary interest therein. See Footnote 10, infra. Also
excludes 1,500 Common Shares held by a relative of Mr. Kleinhandler, of
which, Mr. Kleinhandler does not have any power to direct the vote or
disposition and therefore disclaims any beneficial ownership.
(6) Includes 2,697,986 Common Shares owned by Suncom. Excludes 1,000,000 Common
Shares issuable to Suncom pursuant to the Suncom Option. Mr. Unger
disclaims beneficial ownership of all securities owned by Suncom except to
the extent of his pecuniary interest therein. See Footnote 10, infra.
(7) Includes 2,697,986 Common Shares owned by Suncom. Excludes 1,000,000 Common
Shares issuable to Suncom pursuant to the Suncom Option. Mr. Davidoff is
the Managing Director of Carl Marks & Co., Inc., an affiliate of CMNY
Capital II, L.P. ("CMNY"), and disclaims beneficial ownership of all
securities owned by Suncom except to the extent of his pecuniary interest
therein. See Footnote 10, infra.
(8) Includes 2,697,986 Common Shares owned by Suncom. Excludes 1,000,000 Common
Shares issuable to Suncom pursuant to the Suncom Option. Mr. Gezon is the
President of Midwest Mezzanine Fund, L.P. ("Midwest") and disclaims
beneficial ownership of all securities owned by Suncom except to the extent
of his pecuniary interest therein. See Footnote 10, infra.
(9) Includes 2,697,986 Common Shares owned by Suncom. Excludes 1,000,000 Common
Shares issuable to Suncom pursuant to the Suncom Option. Mr. Landman is a
Vice President of the corporate general partners of CMS Interactive
Communications Partners, L.P. ("CMS") and disclaims beneficial ownership of
all securities owned by Suncom except to the extent of his pecuniary
interest therein. See Footnote 10, infra.
(10) Excludes 1,000,000 Common Shares issuable to Suncom pursuant to the Suncom
Option. Members of Suncom include Suncom Management L.L.C. ("Suncom
Management"), Midwest, CMS and CMNY. Suncom Management is controlled by
Messrs. Kleinhandler and Unger. Midwest is ultimately controlled by ABN
AMRO Bank. CMS is controlled ultimately by MSPS/ICP, Inc., and CMS 1994,
Inc., both affiliates of CMS Companies, a private investment company. CMNY
is controlled by Carl Marks & Co., Inc.
(11) Includes an aggregate of 36,500 Common Shares issuable upon exercise of a
like number of options.
-6-
<PAGE>
<PAGE>
PROPOSAL 1
AMENDMENT TO THE BYLAWS TO SET THE SIZE OF
THE BOARD OF DIRECTORS
The Board of Directors has unanimously approved an amendment to Article II,
Section 2.3 of the Bylaws to set the size of the Board of Directors at not less
than seven nor more than nine Directors, as determined, from time to time, by
the Board of Directors or Shareholders, and to initially set the size of the
Board of Directors at nine until changed or altered as therein provided. The
text of the proposed amendment is attached hereto as Appendix "A."
The Bylaws presently fix the number of Directors at eight and such number
may only be amended by a vote of the holders of a majority of the Common Shares
present and entitled to vote at a duly convened shareholder meeting with a
quorum present. The effect of the amendment is to give the Board the right to
alter the number of Directors without the formality and expense of holding a
meeting to obtain shareholder approval. In addition, the amendment effectively
grants Suncom control of the Board of Directors without removing any incumbent
Directors in accordance with the terms of the Combination. See "Change of
Control."
The affirmative vote of the holders of a majority of the outstanding Voting
Securities entitled to notice of and to vote at the Annual Meeting is required
under Florida law for the adoption of the Amendment to Article II, Section 2.3
of the Bylaws. To the extent Messrs. Kleinhandler, Unger, Davidoff, Gezon and
Landman are affiliated with Suncom, they may be deemed to have a substantial
interest in this amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT
THE SHAREHOLDERS VOTE "FOR" THE FOREGOING
PROPOSAL 1.
PROPOSAL 2
ELECTION OF DIRECTORS
The Company's Board of Directors currently has eight (8) Directors. All of
such incumbent Directors have been nominated herein, along with one other
nominee, to be elected as Directors at the Annual Meeting to hold office,
subject to the provisions of the Bylaws, for a one-year term and until their
successors are duly elected and qualified (the "Nominees").
It is intended that the accompanying form of Proxy will be voted FOR the
election as Directors of the nine (9) Nominees named below, unless the Proxy
contains contrary
-7-
<PAGE>
<PAGE>
instructions. Proxies which direct the Proxy holders to abstain and do not
direct the Proxy holders to vote for or withhold authority in the matter of
electing Directors will be voted for the election of the nine (9) Nominees named
below. Proxies cannot be voted for a greater number of persons than the number
of nominees named in the Proxy Statement.
Management has no reason to believe that any of the Nominees will not be a
candidate or will be unable to serve. However, in the event that any of the
Nominees should become unable or unwilling to serve as a Director, the Proxy
will be voted for the election of such person or persons as shall be designated
by the Directors.
DIRECTORS AND EXECUTIVE OFFICERS
The names, ages and respective positions of the Executive Officers and
Director Nominees of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- ----------
<S> <C> <C>
A.J. Schell 61 Chairman of the Board
(Incumbent)
Mitchell Kleinhandler 48 President and Director
(Incumbent)
David Unger 41 Executive Vice President and
Director (Incumbent)
Doris K. Krummenacker 70 Secretary
Robert Davidoff 70 Director (Nominee)
Patrick J. Dougherty 53 Director (Incumbent)
Robert Dyer 64 Director (Incumbent)
David Gezon 40 Director (Incumbent)
William Landman 45 Director (Incumbent)
C. Lee Maynard 56 Director (Incumbent)
</TABLE>
-8-
<PAGE>
<PAGE>
A.J. SCHELL has served as Chairman of the Board since June 1990 and as the
Company's President and Chief Executive Officer from May 1987 through May 30,
1997.
MITCHELL KLEINHANDLER has served as President and Chief Operating Officer
of the Company and as a Director since May 30, 1997. Since September 1995, Mr.
Kleinhandler has served as President of Suncom. Prior thereto, Mr. Kleinhandler
was the President of Consolidated Cable Properties Inc., a cable television
management company.
DAVID UNGER has served as Executive Vice President, Assistant Secretary and
a Director of the Company since May 30, 1997. Since September 1995, Mr. Unger
has served as Chairman of Suncom. From 1993 to 1995, Mr. Unger has served as
President of D Squared Productions, Inc., Mr. Unger's personal investment
company. Prior thereto, Mr. Unger served as a Vice President of Communications
Equity Associates, a merchant banking firm specializing in the merchant
communications industry.
DORIS K. KRUMMENACKER has served as Secretary of the Company since 1990 and
as the Company's Treasurer and a Vice President from 1974 through May 30, 1997
and as a Director of the Company since 1990 through May 30, 1997.
ROBERT DAVIDOFF has served as the Managing Director of Carl Marks & Co.,
Inc., an investment company which is an affiliate of CMNY, a member of Suncom,
since 1950.
PATRICK J. DOUGHERTY has served as a Director of the Company since May
1988. Mr. Dougherty has been a certified public accountant since 1970, and has
served as the President of Patrick J. Dougherty, CPA, PA, since 1982.
ROBERT DYER has served as a Director of the Company since May 1988. Mr.
Dyer has been a practicing attorney since 1961, and has been a partner in the
Orlando law firm of Allen, Dyer, Doppelt, Franjola & Milbrath since November
1980.
DAVID GEZON has served as a Director of the Company since May 30, 1997. Mr.
Gezon has served as the President of Midwest, an investment fund which is a
member of Suncom, since August 1992.
WILLIAM LANDMAN has served as a Director of the Company since May 30, 1997.
Mr. Landman has been a Principal of CMS Companies, a private investment company
which is an affiliate of CMS, a member of Suncom, since 1986.
-9-
<PAGE>
<PAGE>
C. LEE MAYNARD has served as a Director of the Company since May 1985. Mr.
Maynard has been a private real estate investor since 1992. From 1987 through
1992, Mr. Maynard served as the Chairman of the Board and Chief Executive
Officer of Enterprise National Bank of Tampa.
Certain Information Concerning the Board of Directors
All Directors hold office until the expiration of their terms and the
election and qualification of their successors. During the fiscal year ended
December 31, 1996 ("Fiscal 1996"), the Board of Directors held a total of
seven meetings. No incumbent Director during Fiscal 1996 attended fewer than
75 percent of the aggregate of: (1) the total number of meeting of the Board of
Directors and (2) the total number of meetings held by all committees on which
he served. Officers serve at the discretion of the Board of Directors.
For Fiscal 1996, the Company maintained three standing committees: an
Audit, Compensation and Nominating Committee. The Audit Committee met one time
in Fiscal 1996 and included Messrs. Schell, Dougherty and Maynard. On May 31,
1997, the Board of Directors established a new Audit Committee, consisting of
Messrs. Dougherty, Gezon, Landman, Schell and Unger. The Audit Committee has the
following duties and responsibilities: (a) to recommend to the Board the
accounting firm to be selected by the Board or to be recommended by it for
hareholder approval as the independent auditor of the Company, (b) to meet and
review with the independent auditors, the chief internal auditor and the
appropriate corporate officers regarding matters relating to corporate financial
reporting and accounting procedures and policy, the adequacy of financial,
accounting and operating controls for the Company and the scope of the
respective audits of the independent auditors and the internal auditor, (c) to
report the results of the foregoing to the Board and to further submit to the
Board any recommendations which the committee may have, from time to time, with
respect to financial reporting and accounting practices and policies and
financial, accounting and operation controls and safeguards, and (d) to perform
such further services as delegated by the Board.
The Compensation Committee held one meeting in Fiscal 1996 and included
Mr. Dyer. On May 31, 1997, the Board of Directors established a new Compensation
Committee consisting of Messrs. Gezon, Kleinhandler and Landman. The
Compensation Committee has the following duties and responsibilities: (a) to
periodically review the compensation (including salary, bonus and benefits) of
all of the executive officers of the Company and its subsidiaries, (b) to review
and recommend to the Board matters relating to employee compensation and
employee benefit plans and incentives generally, and (c) such other duties and
responsibilities as may, from time to time, be designated by the Board.
-10-
<PAGE>
<PAGE>
The Nominating Committee held one meeting in Fiscal 1996 and included
Messrs. Schell and Maynard. The Nominating Committee met for the purpose of
nominating and recommending the selection of Directors to comprise the Company's
Board of Directors for the ensuing year. The Company currently does not have a
nominating committee or another committee performing a similar function.
Executive Compensation
The compensation paid and/or accrued to the Chief Executive Officer for
services rendered to the Company during the three fiscal years ended December
31, 1996, 1995 and 1994 is set forth below. No other executive officer's total
annual salary and bonus exceeded $100,000.
(a) Summary Compensation Table
<TABLE>
<CAPTION>
Long Term Compensation
----------------------------------
Annual Compensation Awards Payouts
----------------------------- ---------------- ----------
Long-Term
Other Restricted Securities Incentive All
Name of Individual Fiscal Annual Stock Underlying Plan Other
and Principal Position Year Salary($) Bonus($)(2) Compensation($) Awards($) Options/SARs(#) Payouts($) Compensation($)
- ---------------------- ---- --------- ----------- --------------- --------- --------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A.J. Schell 1996 $350,000 $50,000 $ -- -- 30,000 $ -- $ 4,557(3)
Chairman, President 1995 $232,650 $50,000 $ -- -- -- $ -- $23,607(3)
& CEO (1) 1994 $207,199 $25,000 $ -- -- -- $ -- $20,528(3)
</TABLE>
- ----------
(1) Resigned as President and Chief Executive Officer effective May 30, 1997.
(2) Bonus amounts are shown in the year for which they were awarded.
(3) Represents amount contributed by the Company for Mr. Schell's account in
the Company's target benefit pension plan.
(b) Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Number of Percent of Total
Securities Options/SARs
Underlying Granted Exercise
Options/SARs to Employees or Base Expiration
Name of Individual Granted In Fiscal Year Price($/Share) Date
- ------------------ ----------- ---------------- -------------- -----------------
<S> <C> <C> <C> <C>
A.J. Schell 25,000 71.47% $ 1.125 February 22, 2000
</TABLE>
-11-
<PAGE>
<PAGE>
(c) Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money
Shares Options/SARs Options/SARs
Acquired on Value at Fiscal Year End (#) at Fiscal Year End ($)
Name of Individual Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------ ------------ ------------ ------------------------- -------------------------
<S> <C> <C> <C> <C>
A.J. Schell 0 0 55,000/0 $52,500/0
</TABLE>
(d) Long-Term Incentive Plan Awards
The Company has no long-term incentive plans as such term is defined in
Item 402(a)(6)(iii) of Regulation S-B.
(e) Directors Compensation
For Fiscal 1996, the Company compensated its Directors at a rate of $1,000
per Board meeting attended, payable in cash or Common Shares. Six Directors
elected to receive their fees in stock, totalling 17,274 Common Shares. The
number of shares issuable was determined by the fair market value of the shares
on the date of the meetings. Two Directors elected received $14,502 for
attending seven meetings.
(f) Employment Contracts
The Company has written Employment Agreements with three of its executive
officers: A.J. Schell, Chairman of the Board; Mitchell Kleinhandler, President
and Chief Operating Officer and David Unger, Executive Vice President. All of
the Employment Agreements were entered into as of May 30, 1997,
contemporaneously with the closing of the Combination.
Mr. Schell's Employment Agreement replaces his 1989 employment contract
with the Company. The new Agreement is for a three year term (subject to early
termination in certain specified events) and provides for a salary at the rate
of $100,000 per annum. In addition, however, in recognition of certain
obligations of the Company to Mr. Schell under his former employment contract,
which obligations were triggered by the closing of the Combination, the Company
has agreed to pay Mr. Schell, and Mr. Schell has agreed to accept, the sum of
$1,500,000 in three equal annual installments commencing in January, 1998. The
Company's obligations to Mr. Schell with respect to such additional payments are
secured by a pledge by Suncom of the stock which it purchased from Mr. Schell
contemporaneously with the closing of the Combination.
Mr. Kleinhandler and Mr. Unger are each entitled to a base salary of
$200,000 per annum plus a bonus of $50,000 if the Company achieves or exceeds
"plan" as defined in their respective employment agreements. Both agreements are
for a one year term, subject to early termination in certain events and
automatic renewals unless notice is given. Mr. Unger has the ability, at his
election, to reduce his time commitment to the Company to 40% of his business
time, in which event his base salary will be reduced to $100,000 per
-12-
<PAGE>
<PAGE>
year and he will no longer be entitled to a bonus. Should Mr. Unger make this
election prior to the first anniversary of his employment agreement, the
agreement is automatically extended for an additional year. Further, should Mr.
Unger make this election, Mr. Kleinhandler's base salary and potential bonus are
each to be increased by $25,000 per year.
(g) Report on Repricing of Options/SARS
The Company did not reprice any stock options or SARs previously rewarded
during Fiscal 1996.
Certain Relationships and Related Transactions
See "Executive Compensation" for information concerning the terms of
employment agreements and stock options granted during Fiscal 1996 to certain
Officers and Directors of the Company.
Pursuant to the terms and provisions of the Combination, among other
things, the Company agreed to assume all of Suncom's liabilities. In furtherance
thereof, the Company and Suncom, Inc. agreed to jointly and severally assume
Suncom's subordinated indebtedness in the original principal amount of
$4,750,000 to Midwest, a member of Suncom. The subordinated debt to Midwest
bears interest at the rate of 12.27% per annum payable quarterly on the first
day of January, April, July and October. Quarterly principal installments in the
amount of $250,000 each are to begin January 1, 2000. The obligations of the
Company and Suncom Inc. with respect to the subordinated debt is secured by a
guaranty executed and delivered by the Company's other subsidiaries.
To evidence the assumption of the subordinated debt, the Company and Suncom
Inc. executed and delivered a Note Assumption Agreement dated May 30, 1997 with
Midwest and further executed and delivered an allonge to the existing
subordinated note. Pursuant to the documentation with Midwest, the Company has
agreed to certain affirmative, negative and financial covenants including,
without limitation (a) prohibitions against the incurrence of additional debt or
liens, restrictions on mergers, acquisitions or sales of assets and restrictions
on transactions with affiliates, dividends and payments, (b) limits on capital
expenditures and maintenance of certain coverage and leverage ratios and (c)
allowing Midwest to have a representative present to observe all meetings of the
Boards of Directors of the Company and its subsidiaries.
During Fiscal 1996, the Company paid approximately $22,833 to the law firm
of Turnbull, Abner & Daniels, of which former Director Nat M. Turnbull is a
partner. In addition, approximately $12,231 was paid for tax advice to Patrick
J. Dougherty, CPA, PA, of which incumbent Director Patrick J. Dougherty is a
principal.
Compliance with 16(a) of the Exchange Act
-13-
<PAGE>
<PAGE>
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Officers, Directors and persons who own more than ten percent of a registered
class of the Company's equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
Directors and ten percent shareholders are required by regulation to furnish the
Company with copies of all Section 16(a) forms they file. Based solely on the
Company's copies of such forms received or written representations from certain
reporting persons that no Form 5's were required for those persons, the Company
believes that, during Fiscal 1996, all filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were complied
with.
PROPOSAL 3
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO INCREASE
THE AUTHORIZED COMMON SHARES AND AUTHORIZE PREFERRED STOCK
The Board of Directors has unanimously approved an amendment to Article III
of the Certificate of Incorporation to increase the number of authorized Common
Shares, $.25 par value, to 12,000,000 and to authorize up to 1,000,000 Preferred
Shares, $.001 par value per share, to be issued in one or more series on such
terms and at such time or times as the Board of Directors shall determine. The
Certificate presently authorizes 8,000,000 Common Shares, $.25 par value, and no
Preferred Shares. The text of the proposed amendment is attached hereto as
Appendix "C."
As of June 30, 1997, 4,444,203 Common Shares were issued and outstanding.
An additional 1,000,000 Common Shares are reserved for issuance upon exercise of
the Suncom Option and approximately 111,000 Common Shares are reserved for
issuance upon exercise of outstanding stock options under the Company's stock
option plan. The proposed amendment to increase the number of authorized Common
Shares is necessary to provide the Company with an adequate number of authorized
shares for future issuances. The Board of Directors believes that the additional
Common Shares will afford the Company greater flexibility in meeting the future
capital requirements of the Company and for other corporate needs which may
arise. The Company has no agreements, plans, proposals, commitments,
undertakings or arrangements which would result in the issuance of any
additional Common Shares and there can be no assurance that any such transaction
will be entered into resulting in the issuance of additional shares.
Additionally, the Board of Directors believes that the authorization of
Preferred Shares will afford the Company greater flexibility in meeting the
future capital requirements of the Company and for other corporate needs that
may arise. Pursuant to the amendment, Preferred Shares would be available for
issuance for any proper corporate purpose without further shareholder approval.
This might include, without limitation, obtaining capital for use in the
Company's business and operations, and issuances as part or all of the
consideration paid by the Company for the possible acquisition of a property,
business or entity. The Company has not specifically identified any possible
acquisition and none are currently probable.
-14-
<PAGE>
<PAGE>
Other than as described above concerning any potential equity issuance as
part of an overall business arrangement, the Board has no plans, proposals,
commitments, undertakings or arrangements that would result in the issuance of
any Preferred Shares. The Board of Directors believes that in view of the
present favorable investment climate for preferred stock, its availability as an
available future financing method for the Company will benefit the Company in
enabling the Board to issue securities that have the flexibility to meet current
market conditions and satisfy investor preferences.
Under the proposed amendment, the Board of Directors would be empowered,
without the necessity of further action or authorization by the Company's
shareholders (unless required by applicable laws or regulatory authorities or
pursuant to the rules of any stock exchange on which the Company's securities
may then be listed), to authorize the issuance of Preferred Shares from time to
time in one or more series and, before issuance, to fix by resolution or
resolutions the designations, preferences and relative rights, powers,
privileges, qualifications and limitations of each series. Each series of
Preferred Shares could, as determined by the Board of Directors at the time of
issuance, rank, with respect to dividends, redemption and/or liquidation rights,
senior to the Company's Common Shares.
The proposed amendment would authorize the Board of Directors to determine,
among other things, with respect to each series of Preferred Shares that may be
issued: (a) the dividend rates, conditions and preferences, if any, in relation
to the Common Shares and among the series of Preferred Shares; (b) whether
dividends would be cumulative and, if so, the date from which dividends on the
series would accumulate; (c) whether, and to what extent, the holders of the
series would have voting rights in addition to those prescribed by law; (d)
whether, and upon what terms and conditions (including, but not limited to,
anti-dilution adjustments), the series would be convertible into or exchangeable
for other securities; (e) whether, and upon what terms and conditions, the
series would be redeemable; (f) the preference, if any, to which the series
would be entitled in the event of voluntary or involuntary liquidation,
dissolution or winding-up of the Company; (g) whether a sinking fund would be
provided for the redemption of the series and if so, the terms and conditions
thereof; and (h) to classify or reclassify any unissued Preferred Shares by
fixing or altering from time to time any of the foregoing rights, privileges and
qualifications.
The Board may determine that any particular series of the proposed
Preferred Shares will rank junior to, on a parity with, or senior to any other
series of Preferred Shares in respect of dividends and liquidation rights. It is
not expected that the authorization and issuance of Preferred Shares will have
an adverse effect upon the rights of existing shareholders. Common Shareholders
have no preemptive rights and accordingly, have no preferential right to
purchase any of the Company's Common Shares or Preferred Shares in order to
maintain their proportionate ownership. Therefore, the general effect of the
issuance of Preferred Shares, as well as additional issuances of Common Shares,
would be to dilute the present voting power of the current holders of Common
Shares.
The holders of Preferred Shares may receive preferences in the event of
dissolution, liquidation or winding up of the Company equal to the purchase
price per share plus declared (or cumulative) but unpaid dividends, if any. The
right of Common Shareholders
-15-
<PAGE>
<PAGE>
to distribution of the Company's assets will therefore be diminished. When
considering the issuance of the Preferred Shares, the Board of Directors will
consider the above-described general effect upon the Common Shareholders. The
Board of Directors does not intend to issue any Preferred Shares, except on
terms that the Board of Directors deems to be in the best interests of the
Company and its then existing shareholders.
The Company's Certificate of Incorporation and Bylaws currently contain no
anti-takeover provisions. Although the Board of Directors does not deem its
proposed amendment to be an anti-takeover proposal, it may be deemed to be one.
The availability of Preferred Shares may or may not, depending on the rights,
powers and privileges and terms thereof, make it more difficult to effect or may
discourage an attempt to gain control of the Company by means of a merger,
tender offer or proxy contest, which is not approved by incumbent management,
but which a majority of the Company's shareholders may deem to be in their best
interests.
The reason for creating the Preferred Shares is to enable the Company to be
more flexible in meeting its future capital requirements. However, in the event
of a proposed merger, tender offer or other attempt to gain control of the
Company of which the Board of Directors does not approve, it might be possible
for the Board of Directors to authorize the issuance of a series of Preferred
Shares as an anti-takeover device with rights and preferences which could impede
the completion of such a transaction; e.g., by establishing a class vote and/or
granting more than one vote per share to the series of Preferred Shares.
Notwithstanding the above, the Board of Directors has concluded that the overall
advantages of the amendment to the Company and its shareholders outweigh the
potential disadvantages.
The affirmative vote of the holders of a majority of the outstanding Voting
Securities entitled to notice of and to vote at the Annual Meeting is required
under Florida law for the adoption of the Amendment to Article III of the
Company's Certificate of Incorporation.
Accordingly, if Proposal "3" is adopted, the Board of Directors intends to
file an amendment to the Company's Certificate of Incorporation following the
Annual Meeting, in substantially the final form of Appendix B to this Proxy
Statement, subject to any changes as may be required by law or otherwise deemed
advisable.
THE BOARD OF DIRECTORS RECOMMENDS THAT
THE SHAREHOLDERS VOTE "FOR" THE FOREGOING
PROPOSAL 3.
PROPOSAL 4
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP, certified
public accountants, to continue as the Company's auditors and to audit the books
of account and other records of the Company for the fiscal year ending December
31, 1997.
-16-
<PAGE>
<PAGE>
Deloitte & Touche LLP has audited the Company's financial statements since
1962. Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting to respond to appropriate questions from shareholders and to make
a statement if they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT
THE SHAREHOLDERS VOTE "FOR" THE FOREGOING
PROPOSAL 4.
OTHER MATTERS
The Board of Directors is not aware of any business to be presented at the
Annual Meeting except the matters set forth in the Notice and described in this
Proxy Statement. Unless otherwise directed, all shares represented by Board of
Directors' Proxies will be voted in favor of the proposal of the Board of
Directors described in this Proxy Statement. If any other matters come before
the Annual Meeting, the persons named in the accompanying Proxy will vote on
those matters according to their best judgment.
EXPENSES
The entire cost of preparing, assembling, printing and mailing this Proxy
Statement, the enclosed Proxy and other materials, and the cost of soliciting
Proxies with respect to the Annual Meeting, will be borne by the Company. The
Company will request banks and brokers to solicit their customers who
beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for the reasonable out-of-pocket expenses of
such solicitations. The original solicitation of Proxies by mail may be
supplemented by telephone and telegram by officers and other regular employees
of the Company, but no additional compensation will be paid to such individuals.
SHAREHOLDER PROPOSALS
No person who intends to present a proposal for action at a forthcoming
shareholders' meeting of the Company may seek to have the proposal included in
the proxy statement or form of proxy for such meeting unless that person (a) is
a record beneficial owner of at least 1% or $1,000 in market value of shares of
Common Stock, has held such shares for at least one year at the time the
proposal is submitted, and such person shall continue to own such shares through
the date on which the meeting is held, (b) provides the Company in writing with
his name, address, the number of shares held by him and the dates upon which he
acquired such shares with documentary support for a claim of beneficial
ownership, (c) notifies the Company of his intention to appear personally at the
meeting or by a qualified representative under Florida law to present his
proposal for action, and (d) submits his proposal timely. A proposal to be
included in the proxy statement or proxy for the Company's next annual meeting
of shareholders, will be submitted timely only if the proposal has been received
at the Company's principal executive office no later than January 1, 1998 (at
least 120 calendar days in advance of the proposed meeting date for the next
annual meeting). If the date of such meeting is changed by more than 30 calendar
days
-17-
<PAGE>
<PAGE>
from the date such meeting is scheduled to be held under the Company's
Bylaws, or if the proposal is to be presented at any meeting other than the next
annual meeting of shareholders, the proposal must be received at the Company's
principal executive office at a reasonable time before the solicitation of
proxies for such meeting is made.
Even if the foregoing requirements are satisfied, a person may submit only
one proposal of not more than 500 words with a supporting statement if the
latter is requested by the proponent for inclusion in the proxy materials, and
under certain circumstances enumerated in the Securities and Exchange
Commission's rules relating to the solicitation of proxies, the Company may be
entitled to omit the proposal and any statement in support thereof from its
proxy statement and form of proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Orlando, Florida Doris K. Krummenacker
July __, 1997 Secretary
Copies of the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1996, as amended, as filed with the Securities and Exchange
Commission, including the financial statements (but without exhibits), can be
obtained without charge by shareholders (including beneficial owners of the
Company's Common Shares) upon written request to Doris K. Krummenacker, the
Company's Secretary, Audio Communications Network, Inc., 1000 Legion
Place, Suite 1515, Orlando, Florida 32801.
-18-
<PAGE>
<PAGE>
APPENDIX A
The following sets forth the proposed amendment to Article II, Section 2.3
of the Bylaws off Audio Communications Network, Inc. The amendment has been
underlined to reflect the changes being proposed therein.
2.3 Numbers. The Board shall consist of a number not less than seven (7)
nor more than nine (9) members elected by the Shareholders. The number of
Directors shall be fixed, from time to time, by the Bylaws. Until the number of
Directors shall be changed or altered, as herein provided for, the Board shall
consist of nine (9) members. The Provisions of this section relating to the
number of Directors constituting the Board may be amended, changed or altered by
the Board of Directors or by vote of the holders of a majority of the common
stock present and entitled to vote at any duly convened meeting of such
Shareholders at which a quorum is present.
A-1<PAGE>
<PAGE>
APPENDIX B
The following sets forth the proposed amendment to Article III of the
Certificate of Incorporation of Audio Communications Network, Inc., in
substantially the final form in which it will be filed with the Secretary of
State, subject to any changes as may be required by law or otherwise deemed
advisable by Audio Communications Network, Inc. The amendment has been
underlined to reflect the changes being proposed therein.
Article III: (a) The Corporation is authorized to issue thirteen million
(13,000,000) shares consisting of twelve million (12,000,000) Common Shares,
$.25 par value ("Common Shares"), and one million (1,000,000) Preferred Shares,
$.001 par value ("Preferred Shares").
(b) The Preferred Shares shall be issued from time to time in one or more
series, with such distinctive serial designations, preferences, limitations, and
relative rights, as shall be stated and expressed in the resolution or
resolutions providing for the issue of such shares from time to time adopted by
the Board of Directors; and in such resolution or resolutions providing for the
issue of shares of each particular series the Board of Directors is expressly
authorized to fix the annual rate or rates of dividends for the particular
series; the dividend payment date for the particular series and the date, if
any, from which dividends on all shares of such series issued prior to the
record date for the first dividend payment date shall be cumulative; the
redemption price for the particular series; sinking fund provisions, if any, for
the particular series; the voting rights, if any, for the particular series; the
rights, if any, of holders of the shares of the particular series to convert or
exchange the same into shares of any other series or class or other securities
of the Corporation or of any other corporation, with any provisions for the
subsequent adjustment of such conversion rights; the preference for the
particular series in the event of voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, and to classify or reclassify any
unissued Preferred Shares by fixing or altering from time to time any of the
foregoing rights, privileges and qualifications.
All the Preferred Shares of any one series shall be identical with each
other in all respects, except that the shares of any one series issued at
different times may differ as to the dates from which dividends thereon shall be
cumulative. Except as to the particulars fixed by the Board as hereinabove
provided or as provided in the description of the series, all Preferred Shares
shall otherwise be of equal rank, regardless of series, and shall be identical
in all respects.
B-1
<PAGE>
<PAGE>
ANNEX 1
AUDIO COMMUNICATIONS NETWORK, INC.
1000 Legion Place, Suite 1515
Orlando, Florida 32801
PROXY
The undersigned, a holder of Common Shares of Audio Communications Network,
Inc., a Florida corporation (the "Company"), hereby appoints MITCHELL
KLEINHANDLER and DAVID UNGER, and each of them, the proxies of the undersigned,
each with full power of substitution, to attend, represent and vote for the
undersigned, all of the shares of the Company which the undersigned would be
entitled to vote, at the Annual Meeting of Shareholders of the Company to be
held on Thursday, August 21, 1997 and any adjournments thereof, as follows:
1. The amendment of Article 2.3 of the Company's Amended and Restated Bylaws to
set the size of the Board to not less than seven nor more than nine Directors,
with an initial setting of nine.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. The election of nine members to the Board of Directors to hold office for a
one-year term and until their successors are duly elected and qualified, as
provided in the Company's Proxy Statement:
[ ] FOR all nominees listed below
[ ] WITHHOLD AUTHORITY to vote for all nominees listed below. (Instructions: TO
WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH OR
OTHERWISE STRIKE OUT HIS NAME BELOW)
Robert Davidoff, Patrick J. Dougherty, Robert Dyer, David Gezon, Mitchell
Kleinhandler, William Landman, C. Lee Maynard, A.J. Schell and David Unger.
3. The amendment of Article III of the Company's Certificate of Incorporation to
increase the number of authorized Common Shares, $.25 par value, from 8,000,000
to 12,000,000 and to authorize up to 1,000,000 Preferred Shares, $.001 par value
per share, to be issued in one or more series on such terms and at such time or
times as the Board of Directors shall determine.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. The ratification of the appointment of Deloitte & Touche LLP as the Company's
auditors for the fiscal year ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
-i-
<PAGE>
<PAGE>
5. Upon such other matters as may properly come before the meeting or any
adjournments thereof.
The undersigned hereby revokes any other proxy to vote at such Annual
Meeting, and hereby ratifies and confirms all that said attorneys and proxies,
and each of them, may lawfully do by virtue hereof. With respect to matters not
known at the time of the solicitations hereof, said proxies are authorized to
vote in accordance with their best judgment.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE OTHER SIDE HEREOF. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ADOPTION OF PROPOSAL 1, FOR THE ELECTION OF THE NINE DIRECTORS
NAMED IN PROPOSAL 2, FOR THE ADOPTION OF PROPOSAL 3, FOR THE ADOPTION OF
PROPOSAL 4, AND AS SAID PROXIES SHALL DEEM ADVISABLE ON SUCH OTHER BUSINESS AS
MAY COME BEFORE THE MEETING.
The undersigned acknowledges receipt of a copy of the Notice of Annual
Meeting and accompanying Proxy Statement dated July __, 1997 relating to the
Annual Meeting, and the 1996 Annual Report to Shareholders.
------------------------------
------------------------------
Signature(s) of Shareholder(s)
The signature(s) hereon should correspond exactly with the name(s) of the
Shareholder(s) appearing on the Stock Certificate. If stock is jointly held, all
joint owners should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If signer is a corporation,
please sign the full corporate name, and give title of signing officer.
Date: ___________________ , 1997
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF AUDIO
COMMUNICATIONS NETWORK, INC.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
STATEMENT OF DIFFERENCES
------------------------
The copyright symbol shall be expressed as .......................... 'c'
<PAGE>
