SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
LOGIMETRICS, INC.
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(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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<PAGE>
LOGIMETRICS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 9, 1998
The Annual Meeting of Stockholders (the "Meeting") of LogiMetrics, Inc.
(the "Company") will be held at the Holiday Inn, 3845 Veterans Memorial Highway,
Ronkonkoma, New York 11779, on Thursday, April 9, 1998 at 10:00 a.m., for the
following purposes:
1. To elect seven directors;
2. To consider and act upon a proposal to amend the Company's Certificate
of Incorporation, as amended (the "Certificate of Incorporation"), to change the
name of the Company to "Broadband Wireless Communications, Inc.";
3. To consider and act upon a proposal to amend the Certificate of
Incorporation to effect a one-for ten reverse stock split of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), in which each ten
shares of issued and outstanding Common Stock will be reclassified into one
share of new Common Stock of the Company, par value $.01 per share, and the
number of authorized shares of Common Stock will be reduced to 10,000,000 (the
"Reverse Split Amendment").
4. To consider and act upon a proposal to amend the Certificate of
Incorporation to increase the number of authorized shares of capital stock of
the Company from 100,000,200 to 355,000,000 (or from 10,000,200 to 40,000,000 if
the Reverse Split Amendment is approved and effected), to be comprised of
350,000,000 shares of Common Stock (or 35,000,000 if the Reverse Split Amendment
is approved and effected), and 5,000,000 shares of Preferred Stock, par value
$.01 per share;
5. To consider and act upon a proposal to amend the Certificate of
Incorporation to amend the terms of the Company's Series A 12% Cumulative
Convertible Redeemable Preferred Stock, stated value $50,000 per share (the
"Series A Preferred Stock"), to (i) limit the voting rights of the holders
thereof to those provided by Delaware law, and (ii) permit the Company to pay
dividends on the Series A Preferred Stock in shares of Common Stock at the
discretion of the Board of Directors;
6. To consider and act upon a proposal to amend the LogiMetrics, Inc. 1997
Stock Compensation Program to increase the number of shares of Common Stock
available for grant thereunder from 4,000,000 to 7,500,000 (or from 400,000 to
750,000 if the Reverse Split Amendment is approved and effected);
7. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors; and
8. To transact such other business as may come before the Meeting, or any
adjournments or postponements thereof.
Only holders of record of the Common Stock and the Series A Preferred Stock
at the close of business on March 24, 1998 will be entitled to notice of, and to
vote at, the Meeting and any adjournments or postponements thereof. Holders of
the Series A Preferred Stock will have the right to vote only on Proposals 4 and
5 at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Erik S. Kruger
Erik S. Kruger, Secretary
March 26, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, MANAGEMENT URGES YOU TO
DATE, SIGN AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
ENVELOPE. YOU MAY REVOKE THE PROXY AT ANY TIME PRIOR TO ITS EXERCISE.
<PAGE>
LOGIMETRICS, INC.
50 Orville Drive
Bohemia, New York 11716
------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
APRIL 9, 1998
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PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of LogiMetrics,
Inc. (the "Company") for use at the Annual Meeting of Stockholders to be held at
the Holiday Inn, 3845 Veterans Memorial Highway, Ronkonkoma, New York 11779, on
Thursday, April 9, 1998 at 10:00 a.m., and at any adjournments or postponements
thereof (the "Meeting"). A stockholder giving a proxy has the right to revoke it
by giving written notice of such revocation to the Secretary of the Company at
any time before it is voted, by submitting to the Company a duly-executed,
later-dated proxy or by voting the shares subject to such proxy by written
ballot at the Meeting. The presence at the Meeting of a stockholder who has
given a proxy does not revoke such proxy unless such stockholder files the
aforementioned notice of revocation or votes by written ballot.
This proxy statement and the enclosed form of proxy are first being mailed
to stockholders on or about March 26, 1998. All shares represented by valid
proxies pursuant to this solicitation (and not revoked before they are
exercised) will be voted as specified in the proxy. If a proxy is signed but no
specification is given, the shares will be voted "FOR" each of the Proposals
described herein.
The solicitation of proxies may be made by directors, officers and regular
employees of the Company or any of its subsidiaries by mail, telephone,
facsimile or telegraph or in person without additional compensation payable with
respect thereto. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to forward proxy soliciting material to the
beneficial owners of stock held of record by such persons, and the Company will
reimburse them for reasonable out-of-pocket expenses incurred by them in so
doing.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
At March 24, 1998 (the "Record Date"), the Company had outstanding
25,892,414 shares of common stock, par value $.01 per share ("Common Stock"),
and 28 shares of Series A 12% Cumulative Convertible Redeemable Preferred Stock,
stated value $50,000 per share (the "Series A Preferred Stock"). Each holder of
Common Stock will have the right to one vote for each share standing in such
holder's name on the books of the Company as of the close of business on the
Record Date with respect to each of the matters considered at the Meeting. Each
holder of Series A Preferred Stock will have the right to one vote for each
share standing in such holder's name on the books of the Company as of the close
of business on the Record Date with respect to Proposals 4 and 5 only. There is
no right to cumulate votes in the election of directors. Holders of the Common
Stock or the Series A Preferred Stock will not have any dissenters' rights of
appraisal in connection with any of the matters to be voted on at the Meeting.
The presence in person or by proxy of the holders of shares entitled to
cast a majority of the votes of all shares entitled to vote will constitute a
quorum for purposes of conducting business at the Meeting. Assuming that a
quorum is present, directors will be elected by a plurality vote, the proposal
to amend the Company's Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), to change the name of the Company to "Broadband
Wireless Communications, Inc." (the "Name Change Amendment") requires the
affirmative vote of a majority of the outstanding Common Stock, the proposal to
amend the Company's Certificate of Incorporation to effect a one-for-ten reverse
split of the Common Stock (the "Reverse Split Amendment") requires the
affirmative vote of a majority of the outstanding Common Stock, the proposals to
amend the Company's Certificate of Incorporation to increase the authorized
number of shares of capital stock (the "Increased Shares Amendment") and to
amend the terms of the Series A Preferred Stock (the "Preferred Stock
Amendment") require the affirmative vote of a majority of the outstanding Common
Stock and 66 2/3% of the outstanding Series A Preferred Stock, voting as
separate classes, and the proposal to amend the LogiMetrics 1997 Stock
Compensation Program (the "Stock Compensation Program") to increase the number
of shares of Common Stock available for grant thereunder (the "Program
Amendment") and the proposal to ratify the appointment of auditors will each
require the affirmative vote of a majority of the shares of Common Stock
represented in person or by proxy at the Meeting with respect to such proposals.
Pursuant to Delaware corporate law, abstentions and broker non-votes are counted
only for the purpose of determining whether a quorum is present, except that
such abstentions and broker non-votes will have the same effect as a vote
"against" the Reverse Split Amendment and the Increased Shares Amendment.
Charles S. Brand, the Company's Chairman and Chief Technology Officer,
has advised the Board of Directors that he intends to vote the 19,327,800 shares
of Common Stock owned by him (74.7% of the total shares outstanding as of the
Record Date) at the Meeting in favor of each of the proposals referenced above.
Accordingly, each of the proposals (except Proposals 4 and 5) are expected to be
adopted at the Meeting, even if all other shareholders vote against the
proposals.
Based upon information available to the Company, as of February 20, 1998,
the following stockholders (excluding executive officers and directors)
beneficially owned more than 5% of the Common Stock and/or the Series A
Preferred Stock.
<PAGE>
<TABLE>
<CAPTION>
Beneficial Ownership of Beneficial Ownership of
Series A Preferred Stock Common Stock
Number of Percent of Number of Percent of
Name and Address(1) Shares Class Shares Class
<S> <C> <C> <C> <C>
Stephen Feinberg -- 5,252,284(2) 17.0%
450 Park Avenue
New York, New York 10022
Gregory Manocherian 0.5(3) 1.8% 3,602,855(3) 12.2%
3 New York Plaza
18th Floor
New York, New York 10004
Gerald B. Cramer -- 2,123,060(4) 7.6%
c/o Cramer Rosenthal
McGlynn, Inc.
520 Madison Avenue
New York, New York 10022
A.C. Israel Enterprises, Inc. -- 2,123,060(5) 7.6%
c/o Cramer Rosenthal
McGlynn, Inc.
520 Madison Avenue
New York, New York 10022
CRM Partners, L.P. -- 1,910,754(6) 6.9%
c/o Cramer Rosenthal
McGlynn, Inc.
520 Madison Avenue
New York, New York 10022
CRM Enterprise Fund, LLC -- 1,422,449(7) 5.3%
c/o Cramer Rosenthal
McGlynn, Inc.
520 Madison Avenue
New York, New York 10022
Beja International SA 5 17.9% 943,400(8) 3.5%
121, avenue de la Faiencerie
L-1511 Luxembourg
R.C.S. Luxembourg B no 14.132
Frederick G. Graham 2 7.1% 377,360(9) 1.4%
55 East 86th Street
New York, New York 10028
Lamare Investments Ltd. 2 7.1% 377,360(10) 1.4%
711 Fifth Avenue
New York, New York 10022
Freydun Manocherian 2 7.1% 377,360(11) 1.4%
3 New York Plaza
New York, New York 10004
Stanley Associates 2 7.1% 377,360(12) 1.4%
150 West 30th Street
New York, New York 10001
</TABLE>
_____________________________
* Less than 1%.
(1) Each shareholder possesses sole voting and investment power with respect to
the shares listed, except as otherwise indicated. The number of shares
beneficially owned by each shareholder is determined under rules
promulgated by the Securities and Exchange Commission (the "Commission"),
and the information is not necessarily indicative of beneficial ownership
for any other purpose. Under such rules, beneficial ownership includes any
shares as to which the individual has sole or shared voting power or
investment power, and also any shares that the individual has the right to
acquire within 60 days after February 20, 1998.
(2) Consists of (i) 2,709,904 shares of Common Stock issuable upon the exercise
of Amended and Restated Class B 13% Convertible Senior Subordinated
Pay-in-Kind Debentures due July 29, 1999 (the "Class B Debentures") held by
Cerberus Partners, L.P. ("Cerberus"), and (ii) 2,542,380 shares of Common
Stock issuable upon the exercise of Common Stock Purchase Warrants - Series
C (the "Series C Warrants") held by Cerberus. Mr. Feinberg is the Managing
Member of Cerberus Associates, L.L.C., the general partner of Cerberus and,
accordingly, is deemed to be the beneficial owner of all shares of Common
Stock owned by Cerberus.
(3) Includes (i) 47,170 shares of Common Stock issuable upon the conversion of
one-half of a share of Series A Preferred Stock held by Mr. Manocherian,
(ii) 20,000 shares of Common Stock issuable upon the exercise of Amended
and Restated Common Stock Purchase Warrants - Series A (the "Series A
Warrants") held by Mr. Manocherian, (iii) 47,170 shares of Common Stock
issuable upon the exercise of Common Stock Purchase Warrants - Series D
(the "Series D Warrants") held by Mr. Manocherian. Also includes (i)
109,519 shares of Common Stock issuable upon the conversion of Class A 13%
Convertible Senior Subordinated Pay-in-Kind Debentures due July 29, 1999
(the "Class A Debentures") held by Kabuki Partners ADP, GP ("Kabuki"), (ii)
96,774 shares of Common Stock issuable upon the exercise of Common Stock
Purchase Warrants - Series G (the "Series G Warrants") held by Kabuki,
(iii) 5,177 shares of Common Stock issuable upon the exercise of Common
Stock Purchase Warrants - Series H (the "Series H Warrants") held by
Kabuki, (iv) 2,589 shares of Common Stock issuable upon the exercise of
Common Stock Purchase Warrants - Series I (the "Series I Warrants") held by
Kabuki, (v) 405,850 shares of Common Stock issuable upon the conversion of
Class A Debentures held by Whitehall Properties LLC ("Whitehall"), (vi)
375,246 shares of Common Stock issuable upon the exercise of Series G
Warrants held by Whitehall, (vii) 19,186 shares of Common Stock issuable
upon the exercise of Series H Warrants held by Whitehall, (viii) 9,593
shares of Common Stock issuable upon the exercise of Series I Warrants held
by Whitehall, (ix) 811,703 shares of Common Stock issuable upon the
conversion of Class A Debentures held by Pamela Equities Corp. ("PEC"), (x)
750,492 shares of Common Stock issuable upon the exercise of Series G
Warrants held by PEC, (xi) 38,371 shares of Common Stock issuable upon the
exercise of Series H Warrants held by PEC, and (xii) 19,186 shares of
Common Stock issuable upon the exercise of Series I Warrants held by PEC.
Also includes (i) 268,276 shares of Common Stock issuable upon the exercise
or conversion of additional Class A Debentures, Series G Warrants, Series H
Warrants and Series I Warrants which Whitehall has the right to acquire
within 60 days of February 20, 1998, and (ii) 536,553 Shares of Common
Stock issuable upon the exercise or conversion of additional Class A
Debentures, Series G Warrants, Series H Warrants and Series I Warrants
which PEC has the right to acquire within 60 days of February 20, 1998. Mr.
Manocherian is (i) the controlling general partner of Kabuki, (ii) a member
of Whitehall, and (iii) an officer of PEC. Accordingly, Mr. Manocherian may
be deemed to be the beneficial owner of all shares of Common Stock
beneficially owned by each of Kabuki, Whitehall and PEC.
(4) Consists of (i) 811,703 shares of Common Stock issuable upon the conversion
of Class A Debentures held by Mr. Cramer, (ii) 717,247 shares of Common
Stock issuable upon the exercise of Series G Warrants held by Mr. Cramer,
(iii) 38,371 shares of Common Stock issuable upon the exercise of Series H
Warrants held by Mr. Cramer, and (iv) 19,186 shares of Common Stock
issuable upon the exercise of Series I Warrants held by Mr. Cramer. Also
includes 536,553 shares of Common Stock issuable upon the exercise or
conversion of additional Class A Debentures, Series G Warrants, Series H
Warrants and Series I Warrants which Mr. Cramer has the right to acquire
within 60 days of February 20, 1998.
(5) Consists of (i) 811,703 shares of Common Stock issuable upon the conversion
of Class A Debentures held by A.C. Israel Enterprises, Inc. ("ACIE"), (ii)
717,247 shares of Common Stock issuable upon the exercise of Series G
Warrants held by ACIE, (iii) 38,371 shares of Common Stock issuable upon
the exercise of Series H Warrants held by ACIE, and (iv) 19,186 shares of
Common Stock issuable upon the exercise of Series I Warrants held by ACIE.
Also includes 536,553 shares of Common Stock issuable upon the exercise or
conversion of additional Class A Debentures, Series G Warrants, Series H
Warrants and Series I Warrants which ACIE has the right to acquire within
60 days of February 20, 1998.
(6) Consists of (i) 730,533 shares of Common Stock issuable upon the conversion
of Class A Debentures held by CRM Partners, L.P. ("CRM Partners"), (ii)
645,522 shares of Common Stock issuable upon the exercise of Series G
Warrants held by CRM Partners, (iii) 34,534 shares of Common Stock issuable
upon the exercise of Series H Warrants held by CRM Partners, and (iv)
17,267 shares of Common Stock issuable upon the exercise of Series I
Warrants held by CRM Partners. Also includes 482,898 shares of Common Stock
issuable upon the exercise or conversion of additional Class A Debentures,
Series G Warrants, Series H Warrants and Series I Warrants which CRM
Partners has the right to acquire within 60 days of February 20, 1998.
<PAGE>
(7) Consists of (i) 543,839 shares of Common Stock issuable upon the conversion
of Class A Debentures held by CRM 1997 Enterprise Fund, L.L.C. ("CRM
Enterprise Fund"), (ii) 480,556 shares of Common Stock issuable upon the
exercise of Series G Warrants held by CRM Enterprise Fund, (iii) 25,709
shares of Common Stock issuable upon the exercise of Series H Warrants held
by CRM Enterprise Fund, and (iv) 12,854 shares of Common Stock issuable
upon the exercise of Series I Warrants held by CRM Enterprise Fund. Also
includes 359,491 shares of Common Stock issuable upon the exercise or
conversion of additional Class A Debentures, Series G Warrants, Series H
Warrants and Series I Warrants which CRM Enterprise Fund has the right to
acquire within 60 days of February 20, 1998.
(8) Consists of (i) 471,700 shares of Common Stock issuable upon the conversion
of five shares of Series A Preferred Stock held by Beja International SA
("Beja"), and (ii) 471,700 shares of Common Stock issuable upon the
exercise of Series D Warrants held by Beja.
(9) Consists of (i) 188,680 shares of Common Stock issuable upon the conversion
of two shares of Series A Preferred Stock held by Mr. Graham, and (ii)
188,680 shares of Common Stock issuable upon the exercise of Series D
Warrants held by Mr. Graham.
(10) Consists of (i) 188,680 shares of Common Stock issuable upon the conversion
of two shares of Series A Preferred Stock held by Lamare Investments Ltd.
("Lamare"), and (ii) 188,680 shares of Common Stock issuable upon the
exercise of Series D Warrants held by Lamare.
(11) Consists of (i) 188,680 shares of Common Stock issuable upon the conversion
of two shares of Series A Preferred Stock held by Mr. Manocherian, and (ii)
188,680 shares of Common Stock issuable upon the exercise of Series D
Warrants held by Mr. Manocherian.
(12) Consists of (i) 188,680 shares of Common Stock issuable upon the conversion
of two shares of Series A Preferred Stock held by Stanley Associates
("Stanley"), and (ii) 188,680 shares of Common Stock issuable upon the
exercise of Series D Warrants held by Stanley.
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
In accordance with the Company's Certificate of Incorporation and Bylaws,
the number of directors of the Company has been set at seven. Each person
elected as a director will serve for a term expiring at the Annual Meeting in
1999, until their respective successors are elected and qualified, or until
their earlier death, resignation or removal. All persons named herein as
nominees for director have consented to serve, and it is not contemplated that
any nominee will be unable to serve, as a director. However, if a nominee is
unable to serve as a director, a substitute will be selected by the Board of
Directors and all proxies eligible to be voted for the Board's nominees will be
voted for such other person.
Set forth below for each nominee is his name, age, the year in which he
became a director of the Company, his principal occupations during the last five
years and any additional directorships in publicly-held companies. The
information is as of the Record Date.
Charles S. Brand, 58, Director since 1997. Chairman of the Board and Chief
Technology Officer since March 1998. From April 1997 until March 1998, Mr. Brand
was the Chairman and Chief Executive Officer of the Company. From February 1994
to April 1997, Mr. Brand was the President of mmTech, Inc. ("mmTech"), a
manufacturer of wireless communication equipment, which was acquired by the
Company in April 1997. Prior to founding mmTech, Mr. Brand was the founder and
President of Trontech, Inc., a manufacturer of wireless equipment for the
cellular and PCS markets. Mr. Brand has been involved in the development of
local multi-point distribution systems and architecture for over ten years. Mr.
Brand is the nephew of Dr. Frank A. Brand.
Dr. Frank A. Brand, 73, Director since 1997. Since 1991, Dr. Brand has been
a private investor and consultant. Prior to his retirement in 1991, Dr. Brand
held several senior management positions with M/A-COM, Inc., a major
manufacturer of telecommunications products and systems, including Chief
Technical Officer, Chief Operating Officer and Acting Chief Executive Officer.
Dr. Brand is a Life-Fellow of the Institute of Electrical and Electronic
Engineers, a Fellow of Polytechnic University and a member of the Engineering
Dean's Council at UCLA.
Jean-Francois Carreras, 48, Director since 1997. Since October 1994, Mr.
Carreras has been a partner in the Paris law firm of Sokolow, Dunaud, Mercadier
and Carreras. From October 1994 to July 1995, Mr. Carreras was also a partner in
the law firm of Arent, Fox, Kintner, Plotkin & Kahn. Prior thereto, until
October 1994, Mr. Carreras was a partner in the law firm of Coudert Brothers.
Mr. Carreras is a French citizen.
Francisco A. Garcia, 46, Director since 1997. From 1987 to December 1997,
Mr. Garcia has served as Chairman of the Board of Neptune Management Company,
Inc., a manager of funds and accounts investing in distressed securities,
obligations and consumer receivables. Since 1991, Mr. Garcia has also served as
President of Nethuns, Inc., a firm engaged in financial advisory, consumer
finance and investment activities. Mr. Garcia is a Spanish citizen.
Mark B. Fisher, 38, Director since 1997. Mr. Fisher is the President of MBF
Capital Corporation, Inc. ("MBF"), a firm that invests in and advises technology
driven companies. From 1990 to 1996, Mr. Fisher served as a principal of Alex.
Brown & Sons, Inc. (now, BT Alex. Brown).
Norman M. Phipps, 37, Director since 1996. President and Chief Operating
Officer of the Company since April 1997. From May 1996 to April 1997, Mr. Phipps
served as Chairman and Acting President of the Company. Mr. Phipps has served as
a Principal of Phipps, Teman & Co. L.L.C. ("PTCO"), a private investment firm,
since August 1993. From January 1991 to August 1993, Mr. Phipps was Managing
General Partner of CP Capital Partners, a private investment firm. Mr. Phipps is
a director of Avery Communications, Inc.
Kenneth C. Thompson, 50, Director since 1997. Since March 1998, Mr.
Thompson has been the Chief Executive Officer of the Company. From April 1997
until March 1998, Mr. Thompson was a private investor and
<PAGE>
consultant. Prior to April 1997, Mr. Thompson held several senior management
positions with Glenayre Electronics, Inc., including President of the Voice and
Data Technologies Group, Executive Vice President - Sales and Marketing and
Executive Vice President - Business Operations. Glenayre is a manufacturer of
infrastructure equipment for the paging and cellular industry.
Right to Designate Directors; Changes in Control
In connection with the March 1996 recapitalization of the Company (the
"Restructuring"), the Company and Cerberus entered into a Unit Purchase
Agreement, dated March 7, 1996 (the "Unit Purchase Agreement"), pursuant to
which the Company issued to Cerberus 30 Units (the "Units"), each Unit
consisting of $50,000 in aggregate principal amount of 12% Convertible Senior
Subordinated Debentures due December 31, 1998 (the "Senior Subordinated
Debentures") and a Series C Warrant to purchase 84,746 shares of Common Stock.
The Senior Subordinated Debentures were subsequently exchanged for Class B
Debentures in July 1997 in connection with the transactions described below.
Pursuant to the terms of the Unit Purchase Agreement, Cerberus currently has the
right to require the Company to increase the size of the Board of Directors by
one person and to designate a person to fill the vacancy created by such
increase. Cerberus has not exercised its right to designate a director.
To assist the Company in effecting the Restructuring, the Company retained
PTCO and SFM Group, Ltd. ("SFM") pursuant to the terms of a consulting
agreement, dated December 20, 1995 (the "Consulting Agreement"). Pursuant to the
terms of the Consulting Agreement, among other things, Murray H. Feigenbaum, a
former President of the Company, and Jerome Deutsch, a former Executive Vice
President of the Company, granted irrevocable proxies to PTCO and SFM to vote
the shares of Common Stock owned by them at that time on certain matters,
including the election of directors (the "Voting Rights"). Under the terms of
the Consulting Agreement, PTCO had the right to elect three directors and SFM
had the right to elect two directors. Accordingly, since Mr. Feigenbaum and Mr.
Deutsch owned more than 50% of the Common Stock then outstanding, PTCO and SFM
were deemed to have acquired control of the Company at that time. In connection
with the acquisition of mmTech, PTCO and SFM irrevocably waived their rights
under the Consulting Agreement to appoint directors and to exercise the Voting
Rights. SFM is no longer in existence and its principals, which included Alfred
Mendelsohn and Lawrence I. Schneider, former directors of the Company, and Mark
B. Fisher, a director of the Company, have succeeded to its rights under the
Consulting Agreement and the proxy arrangements referenced above.
Pursuant to the terms of the Agreement and Plan of Merger, dated December
18, 1996, as amended (the "Merger Agreement"), among the Company, mmTech, a
wholly owned subsidiary of the Company ("Merger Sub"), and Charles S. Brand,
Merger Sub merged with and into mmTech (the "Merger") and mmTech became a wholly
owned subsidiary of the Company. Pursuant to the Merger, each outstanding share
of mmTech common stock was converted into 192,478 shares of Common Stock,
resulting in the issuance of a total of 19,247,800 shares of Common Stock to Mr.
Brand. Upon consummation of the Merger, Mr. Brand became the Chairman and Chief
Executive Officer of the Company and its largest stockholder. Accordingly, upon
consummation of the Merger, Mr. Brand acquired control of the Company. At that
time, Norman M. Phipps, previously the Chairman and Acting President of the
Company, became the President and Chief Operating Officer of the Company.
Following the Merger, the Company's Board of Directors was reconstituted to
consist of Mr. Brand, Dr. Frank A. Brand, Jean-Francois Carreras, Alfred
Mendelsohn and Mr. Phipps.
In July 1997, the Company entered into a Purchase Agreement (the "Purchase
Agreement") with a group of institutional investors (the "Purchasers"),
including certain entities affiliated with Mark B. Fisher, a director of the
Company. Pursuant to the terms of the Purchase Agreement, the Company issued and
sold to the Purchasers $2,750,000 in aggregate principal amount of the Class A
Debentures, Series G Warrants to purchase an aggregate of 7,350,000 shares of
Common Stock at an exercise price of $0.50 per share, Series H Warrants to
purchase an aggregate of 1,100,000 shares of Common Stock at an exercise price
of $0.60 per share and Series I Warrants to purchase an aggregate of 550,000
shares of Common Stock at an exercise price of $1.125 per share, for a total
purchase price of $3,352,500. Pursuant to the terms of the Purchase Agreement,
the Purchasers have the right, at any time prior to July 28, 1998, to purchase
an additional $833,333 in aggregate principal amount of the Class A Debentures,
Series G Warrants to purchase an aggregate of 2,000,000 shares of Common Stock,
Series H Warrants
<PAGE>
to purchase an aggregate of 333,333 shares of Common Stock and Series I Warrants
to purchase an aggregate of 166,667 shares of Common Stock for a total purchase
price of $1,000,000 (the "Purchase Option").
In connection with the transactions contemplated by the Purchase Agreement,
the Purchasers, the Company and Charles S. Brand entered into a Stockholders
Agreement (the "Stockholders Agreement") pursuant to which, among other things,
Mr. Brand agreed to certain restrictions on his ability to sell his shares of
Common Stock. Pursuant to the terms of the Stockholders Agreement, the size of
the Board of Directors was increased to seven members and the Purchasers
received the right to appoint three directors. In the event that the Purchase
Option is exercised in full, the number of directors will be increased to eight,
and the Purchasers will have the right to appoint an additional director. At any
time that the Purchasers are entitled to appoint at least four directors, at
either the request of Mr. Brand or the Purchasers, the size of the Board will be
further increased by one and Mr. Brand and the Purchasers will have the right to
mutually select an independent director to fill the resulting vacancy. Further,
in the event that Cerberus (or any subsequent holder of the Class B Debentures)
exercises its right under the Unit Purchase Agreement to designate a member of
the Board of Directors, the number of directors will be increased by two, the
holder of the Class B Debentures will have the right to appoint one director and
Mr. Brand and the Purchasers will have the right to appoint an additional
independent director.
Pursuant to the terms of the Stockholders Agreement, Mr. Brand has
appointed himself, Dr. Brand, Mr. Carreras and Mr. Phipps and the Purchasers
have appointed Messrs. Fisher, Garcia and Thompson as directors of the Company.
To facilitate the recomposition of the Board of Directors, Mr. Mendelsohn
resigned as a director of the Company effective upon the closing of the
transactions contemplated by the Purchase Agreement.
Under the terms of the Stockholders Agreement, the parties agreed to cause
(i) the Executive Committee of the Board of Directors to be comprised of two
directors designated by Mr. Brand and one director designated by the Purchasers,
(ii) the Audit Committee of the Board of Directors to be comprised of two
directors designated by Mr. Brand and two directors designated by the
Purchasers, and (iii) the Compensation Committee of the Board of Directors to be
comprised of two directors designated by Mr. Brand and two directors designated
by the Purchasers. In the event that the Purchase Option is exercised in full,
the Purchasers will have the right to designate a second director to serve on
the Executive Committee of the Board of Directors. All directors have been
designated by either Mr. Brand or the Purchasers to serve on the respective
Board committees set forth below.
Effective in March 1998, Mr. Thompson became the Chief Executive Officer of
the Company. Under the terms of the Stockholders Agreement, Mr. Thompson is
treated as a director designated by Mr. Brand and is entitled to serve as a
member of the Executive Committee of the Board of Directors.
Under the terms of the Stockholders Agreement, the holders of a majority of
the shares of Common Stock beneficially owned by the Purchasers have the right,
subject to certain limitations, to cause the Company to enter into a "Company
Sale". A Company Sale is defined to include (i) a sale of all or substantially
all of the assets of the Company (other than to certain affiliates), (ii) a
merger, consolidation, share exchange or other similar transaction in which the
holders of the Company's voting stock receive less than 50% of the voting power
of the surviving entity, (iii) a sale, disposition or issuance of shares of
voting stock of the Company in which a person or entity (other than a party to
the Stockholder Agreement or its affiliates) acquires 50% or more of the total
voting power of the Company, and (iv) the formation of certain partnerships,
joint ventures and other strategic alliances involving the sale or transfer of
all or substantially all of the assets of the Company to a third party.
The Stockholders Agreement terminates upon the earliest to occur of (i) the
written consent of the holders of a majority of the shares of Common Stock
beneficially owned by the Purchasers and the holders of a majority of the shares
of Common Stock then beneficially owned by Mr. Brand and certain transferees,
(ii) Mr. Brand and certain transferees, as a group, or the Purchasers, as a
group, becoming the beneficial owners of less than 10% of the outstanding Common
Stock (determined on a fully-diluted basis), or (iii) upon the consummation of a
Company Sale in accordance with the terms of the Stockholders Agreement.
<PAGE>
BOARD ORGANIZATION AND MEETINGS
During the fiscal year ended June 30, 1997, the Board of Directors held
three meetings. During such fiscal year, each member of the Board of Directors
attended at least 75% of all meetings of the Board of Directors and committees
of the Board of Directors of which such director was a member. Currently there
are three standing committees of the Board of Directors, each of which is
described below.
Audit Committee. The Audit Committee currently consists of Mr. Garcia
(Chairman), Dr. Frank Brand and Mr. Carreras. Mr. Thompson resigned as a member
of the Audit Committee effective upon his election as the Company's Chief
Executive Officer. During the fiscal year ended June 30, 1997, the Audit
Committee consisted of Mr. Mendelsohn (who resigned as a director in July 1997),
Dr. Brand and Mr. Carreras. The Audit Committee makes recommendations to the
Board of Directors with respect to the independent auditors of the Company's
financial statements, reviews the scope of the annual audit and meets
periodically with the Company's independent auditors to review their findings
and recommendations, reviews quarterly financial information and earnings
releases prior to public dissemination, approves major accounting policies and
changes thereto and periodically reviews the Company's principal internal
accounting controls to assure that the Company maintains an appropriate system
of financial control. During fiscal 1997, the Audit Committee met one time.
Compensation Committee. The Compensation Committee currently consists of
Mr. Carreras (Chairman), Dr. Frank Brand and Mr. Garcia. Mr. Thompson resigned
as a member of the Audit Committee effective upon his election as the Company's
Chief Executive Officer. During the fiscal year ended June 30, 1997, the
Compensation Committee consisted of Dr. Frank Brand, Mr. Carreras and Mr.
Mendelsohn. The Compensation Committee periodically reviews and determines the
amount and form of compensation and benefits payable to the Company's principal
executive officers and certain other management personnel. The Compensation
Committee also administers certain of the Company's employee benefit plans.
During fiscal 1997, the Compensation Committee met two times.
Executive Committee. The Executive Committee currently consists of Mr.
Charles Brand (Chairman), Mr. Phipps and Mr. Thompson. During the fiscal year
ended June 30, 1997, the Executive Committee consisted of Mr. Brand, Dr. Frank
Brand and Mr. Phipps. The Executive Committee exercises such authority as is
delegated to it from time to time by the full Board of Directors. During fiscal
1997, the Executive Committee met three times.
The Company does not have a separate, standing nominating committee,
but the functions of such a committee are performed by the Board of Directors.
The Board of Directors will consider appropriate persons recommended by
stockholders for election to the Board of Directors. Stockholders wishing to
submit such recommendations may do so by sending a written notice to the
Secretary of the Company a reasonable period of time prior to the mailing of the
Company's Proxy Statement for the related Annual Meeting.
<PAGE>
COMPENSATION OF DIRECTORS
The Company currently does not regularly compensate directors for their
service to the Company. However, directors are reimbursed for out-of-pocket
expenses incurred in their capacity as directors of the Company.
Currently, Dr. Brand and Mr. Fisher provide consulting services to the
Company and receive or will receive certain fees and/or shares of the Company's
Common Stock in connection therewith. In addition, prior to his appointment as
the Company's Chief Executive Officer, Mr. Thompson also provided consulting
services to the Company and received certain fees and/or shares of the Company's
Common Stock in connection therewith. See "Employment Agreements and
Compensation Arrangements."
Pursuant to the terms of the Stock Compensation Program, each director who
has not been a full-time employee of the Company or any subsidiary for at least
the prior 12 months receives an option to purchase 5,000 shares of Common Stock
each year on the earlier of (i) the date of the Company's annual meeting of
stockholders, or (ii) June 1. Options granted to such directors under the Stock
Compensation Program have an exercise price equal to the fair market value of
the underlying shares of Common Stock on the date of grant. See "1997 Stock
Compensation Program."
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of February 20, 1998 with
respect to beneficial ownership of the Common Stock by (i) each director, (ii)
each executive officer named in the Summary Compensation Table below, and (iii)
all current executive officers and directors as a group. None of such persons
beneficially owned shares of Series A Preferred Stock as of February 20, 1998
except for Mr. Phipps who beneficially owned one-quarter of a share of Series A
Preferred Stock as of such date. The mailing address of each such person is c/o
LogiMetrics, Inc., 50 Orville Drive, Bohemia, New York 11716. All persons listed
have sole voting and investment power with respect to their shares unless
otherwise indicated.
Amount and Nature
Name and Address of of Beneficial Percent of
Beneficial Owner Ownership (1) Class
Charles S. Brand 19,374,467(2) 75.4%
Frank A. Brand -- --
Jean-Francois Carreras 32,500(3) *
Mark B. Fisher 4,776,365(4) 15.8%
Francisco A. Garcia -- --
Norman M. Phipps 1,876,452(5) 7.0%
Russell J. Reardon 353,333(6) 1.4%
Kenneth C. Thompson -- --
All Executive Officers 26,413,117(2),(3),(4),(5),(6) 83.2%
And Directors as a
Group (8 persons)
- -------
* Less than 1%
(1) Each stockholder possesses sole voting and investment power with respect to
the shares listed, except as otherwise indicated. The number of shares
beneficially owned by each stockholder is determined under rules
promulgated by the Commission, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the individual has
sole or shared voting power or investment power, and also any shares that
the individual has the right to acquire within 60 days of February 20,
1998.
(2) Includes (i) 40,000 shares of Common Stock issuable upon the exercise of
Series A Warrants held by Mr. Brand, and (ii) 6,667 shares of Common Stock
issuable upon the exercise of stock options exercisable within 60 days of
February 20, 1998.
(3) Consists of (i) 20,000 shares of Common Stock issuable upon the exercise of
Common Stock Purchase Warrants - Series E (the "Series E Warrants") held by
Mr. Carreras, and (ii) 12,500 shares of Common Stock issuable upon the
exercise of Common Stock Purchase Warrants - Series F (the "Series F
Warrants") held by Mr. Carreras.
<PAGE>
(4) Includes (i) 264,105 shares of Common Stock issuable upon the conversion of
Class A Debentures held by Mr. Fisher, (ii) 60,000 shares of Common Stock
issuable upon the exercise of Series A Warrants held by Mr. Fisher, (iii)
520,000 shares of Common Stock issuable upon the exercise of Amended and
Restated Common Stock Purchase Warrants - Series B (the "Series B
Warrants") held by Mr. Fisher, (iv) 241,935 shares of Common Stock issuable
upon the exercise of Series G Warrants held by Mr. Fisher, (v) 12,943
shares of Common Stock issuable upon the exercise of Series H Warrants held
by Mr. Fisher, and (vi) 6,472 shares of Common Stock issuable upon the
exercise of Series I Warrants held by Mr. Fisher. Also includes (i) 500,000
shares of Common Stock issuable to MBF upon the exercise of Series G
Warrants held by MBF, (ii) 528,210 shares of Common Stock issuable upon the
conversion of Class A Debentures held by MBF Broadband Systems, L.P.
("Broadband Systems"), (iii) 483,871 shares of Common Stock issuable upon
the exercise of Series G Warrants held by Broadband Systems, (iv) 25,886
shares of Common Stock issuable upon the exercise of Series H Warrants held
by Broadband Systems, (v) 12,943 shares of Common Stock issuable upon the
exercise of Series I Warrants held by Broadband Systems, (vi) 383,721
shares of Common Stock issuable upon the exercise of Series G Warrants held
by Phineas Broadband Systems, L.P. ("Phineas"), (vii) 767,442 shares of
Common Stock issuable upon the exercise of Series H Warrants held by
Phineas and (viii) 383,721 shares of Common Stock issuable upon the
exercise of Series I Warrants held by Phineas. Also includes 465,116 shares
of Common Stock issuable upon the exercise of additional Series G Warrants,
Series H Warrants and Series I Warrants which Phineas has the right to
acquire within 60 days of February 20, 1998. Mr. Fisher is the sole
officer, director and shareholder of MBF and MBF Broadband Systems, Inc.,
the general partner of both Broadband Systems and Phineas. Accordingly, Mr.
Fisher is deemed to be the beneficial owner of all shares of Common Stock
beneficially owned by each of MBF, Broadband Systems and Phineas.
(5) Includes (i) 296,042 shares of Common Stock issuable upon the exercise of
Series E Warrants held by Mr. Phipps, (ii) 134,906 shares of Common Stock
issuable upon the exercise of Series F Warrants held by Mr. Phipps, (iii)
23,585 shares of Common Stock issuable upon the conversion of one-quarter
share of Series A Preferred Stock held by Mr. Phipps, and (iv) 548,334
shares of Common Stock issuable upon the exercise of stock options
exercisable within 60 days of February 20, 1998.
(6) Consists of 353,333 shares of Common Stock issuable upon the exercise of
stock options exercisable within 60 days of February 20, 1998.
EXECUTIVE COMPENSATION
The following table summarizes certain information relating to the
compensation paid or accrued by the Company for services rendered during the
fiscal years ended June 30, 1997, June 30, 1996 and June 30, 1995 to its Chief
Executive Officer and each of the Company's four other most highly paid
executive officers whose compensation exceeded $100,000.
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term
---------------------------------------------------
Other Compensation
Name and Fiscal Annual Awards/Options
Principal Position Year Salary Bonus Compensation (No. of Shares)
<S> <C> <C> <C> <C> <C> <C>
Charles S. Brand (1) 1997 $150,000 -- * 20,000
Chairman of the Board 1996 150,000 -- * --
and Chief Executive Officer 1995 150,000 -- * --
Norman M. Phipps (2) 1997 $153,395 -- * 825,000
President and Chief 1996 -- -- -- --
Operating Officer 1995 -- -- -- --
Russell B. Reardon (3) 1997 $100,000 $50,000 * 310,000
Senior Vice President -- 1996 25,000 -- * 250,000
Finance and Administration 1995 -- -- -- --
</TABLE>
- -------------------
(1) Mr. Thompson succeeded Mr. Brand as the Company's Chief Executive Officer
in March 1998. Mr. Thompson did not receive compensation for services
rendered to the Company in any capacity during the fiscal year ended June
30, 1997.
(2) Includes $130,325 in consulting fees paid to Mr. Phipps prior to his
employment by the Company in April 1997.
(3) Employment commenced in April 1996. Mr. Reardon resigned as an officer of
the Company effective February 27, 1998.
* Less than 10% of salary plus bonus.
OPTION GRANTS IN LAST FISCAL YEAR
The following table reflects the stock option grants made to the Company's
named executive officers during the fiscal year ended June 30, 1997. The Company
did not grant any stock appreciation rights during this period.
<TABLE>
<CAPTION>
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted (#) Fiscal Year ($/Share) Date
<S> <C> <C> <C> <C>
Charles S. Brand 20,000 0.7% $0.605 6/20/07
Norman M. Phipps 825,000 29.5% $0.550 6/20/07
Russell J. Reardon 310,000 11.1% $0.550 6/20/07
</TABLE>
<PAGE>
FISCAL YEAR-END OPTION VALUES
The table below sets forth information regarding unexercised options held
by the Company's named executive officers as of June 30, 1997.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Options Value of Unexercised
at Fiscal Year End In-The-Money Options at
(#) Exercisable/Unexercisable Fiscal Year End ($) (1)
----------------------------- -----------------------
<S> <C> <C>
Charles S. Brand --/20,000 0/0
Norman M. Phipps 543,334/281,666 0/0
Russell J. Reardon 350,000/210,000 $12,500/0
</TABLE>
- --------------------------
(1) Based on an estimated market value of $0.55 per share for the Common Stock
on June 30, 1997.
1997 Stock Compensation Program
In May 1997, the Company adopted the Stock Compensation Program in order to
promote the interests of the Company, its direct and indirect present and future
subsidiaries and its stockholders by providing eligible persons with the
opportunity to acquire an ownership interest, or to increase their ownership
interest, in the Company as an incentive to remain in the service of the
Company. The Stock Compensation Program authorizes the granting of incentive
stock options, non-qualified stock options, stock appreciation rights,
performance shares and stock bonus awards to employees and consultants of the
Company and its subsidiaries, including those employees serving as officers or
directors of the Company (the "Employee Plans"). The Stock Compensation Program
also authorizes automatic option grants to directors who are not otherwise
employed by the Company (the "Independent Director Plan"). In connection with
the Stock Compensation Program, 4,000,000 shares of Common Stock are reserved
for issuance, of which up to 3,850,000 shares may be issued under the Employee
Plans and up to 150,000 shares may be issued under the Independent Director
Plan. The Stock Compensation Program is administered by the Compensation
Committee of the Board of Directors (the "Administrator").
Options and awards granted under the Stock Compensation Program may have an
exercise or payment price as established by the Compensation Committee, provided
that the exercise price of incentive stock options granted under the Employee
Plans may not be less than the fair market value of the underlying shares on the
date of grant. Options granted under the Independent Director Plan must have an
exercise price equal to the fair market value of the underlying shares on the
date of grant.
Unless otherwise provided at the date of grant, no option or award may vest
within one year of the date of grant and no option or award may be exercised
more than 10 years from the date of grant. Options granted under the Independent
Director Plan vest one year following the date of grant and expire if not
exercised on or before the fifth anniversary thereof. Unless otherwise specified
by the Compensation Committee, options and awards (other than pursuant to the
Independent Director Plan) vest in four equal installments on the first, second,
third and fourth anniversaries of the date of grant. Vesting of any option or
award granted under the Stock Compensation Program may be accelerated in certain
circumstances, including upon the occurrence of a "Change in Control Event" (as
defined in the Stock Compensation Program).
Options and awards granted under the Stock Compensation Program are
nontransferable, except by will or by the laws of descent and distribution.
However, the Compensation Committee may permit the recipient of a non-incentive
stock option granted under the Employee Plans and options granted under the
Independent Director Plan to transfer the option to a family member or a trust
created for the benefit of family members. During the lifetime
<PAGE>
of a participant, an option may be exercised only by the participant or a
permitted transferee. In the event that a participant's employment or service
terminates as a result of death, all vested awards will be paid to the
participant's estate by the Company and the participant's estate or any
permitted transferee will have the right to exercise vested options for a period
ending on the earlier of the expiration dates of such options or one year from
the date of death. If the participant's employment or service terminates as a
result of retirement or a "disability" (as set forth in the Stock Compensation
Program), all vested awards will be paid to the participant by the Company and
the participant or any permitted transferee will have the right to exercise
vested options for a period ending on the earlier of the expiration dates of
such options or one year from the date of termination. If the participant's
employment or service terminates for cause, all options and awards will
automatically expire upon termination. If the participant's employment or
service terminates other than as a result of death, disability, retirement or
termination for cause, the participant will have the right to collect all vested
awards immediately and the participant or any permitted transferee will have the
right to exercise vested options for a period ending on the earlier of the
expiration dates of such options or awards or 30 days from the date of
termination, subject to extension at the discretion of the Administrator, or
three months from the date of termination in the case of options granted
pursuant to the Independent Director Plan. In all cases, any unvested options or
awards will terminate as of the date of termination of employment or service.
The Stock Compensation Program terminates on April 30, 2007, unless earlier
terminated by the Board of Directors. No options or awards may be granted under
the Stock Compensation Program after its termination; however, termination of
the Stock Compensation Program will not affect the status of any option or award
outstanding on the date of termination.
Employment Agreements and Compensation Arrangements
The Company expects to enter into a three-year employment agreement (the
"Thompson Agreement") with Mr. Thompson, the Company's Chief Executive Officer,
in the near future. Although no agreement has been executed as of the date
hereof, the Company anticipates that, pursuant to the terms of the Thompson
Agreement, in the event that the Company consummates a private or public sale of
its securities resulting in net proceeds of at least $10,000,000 to the Company
(a "Qualifying Offering"), Mr. Thompson will receive a base salary of $250,000
per annum, subject to periodic review in the discretion of the Board of
Directors. In addition, upon consummation of a Qualifying Offering, Mr. Thompson
will receive a one-time bonus of $50,000. Pursuant to the expected terms of the
Thompson Agreement, Mr. Thompson will, upon consummation of a Qualifying
Offering, receive a non-qualified stock option exercisable for 3,000,000 shares
of Common Stock at an exercise price of $0.60 per share, subject to adjustment
in certain circumstances. Such option will be immediately exercisable. The
Company also will maintain a $1,000,000 term life insurance policy for Mr.
Thompson's benefit upon completion of a Qualifying Offering. Mr. Thompson also
will be entitled to certain other perquisites in such circumstances.
Prior to the consummation of a Qualifying Offering, Mr. Thompson will be
entitled to receive compensation for his services to the Company equivalent to
those provided to him pursuant to his consulting arrangements with the Company.
See "Compensation Committee Interlocks and Insider Participation." Prior to the
consummation of a Qualifying Offering, Mr. Thompson will not be required to
devote more than 10 days in any calendar month to the Company's affairs. In the
event that a Qualifying Offering does not occur on or prior to June 30, 1998,
Mr. Thompson will have the right to terminate his employment by the Company.
If a Qualifying Offering occurs, Mr. Thompson will be entitled to certain
severance benefits from the Company in the event that his employment is
terminated thereafter pursuant to a Without Cause Termination, or Mr. Thompson
terminates his employment thereafter for Good Reason (as such terms are expected
to be defined in the Thompson Agreement). In addition, upon consummation of a
Qualifying Offering, Mr. Thompson will have the right to terminate his
employment in certain circumstances following a Change in Control Event (as such
term is expected to be defined in the Thompson Agreement)
<PAGE>
and to receive certain payments in connection therewith.
The Company expects that, pursuant to the Thompson Agreement, Mr. Thompson
will be subject to certain confidentiality, work-for-hire and non-competition
covenants.
In connection with the Merger, Mr. Charles Brand and Mr. Phipps entered
into five-year employment agreements with the Company. Pursuant to such
agreements, Mr. Brand receives an annual base salary of $200,000 and Mr. Phipps
receives an annual base salary of $150,000, subject to periodic increases at the
discretion of the Board of Directors. Mr. Brand and Mr. Phipps are entitled to
participate in all compensation and employee benefit plans, including such
bonuses as may be authorized by the Board of Directors from time to time. The
Company also agreed to provide and maintain a $1,000,000 term-life insurance
policy for the benefit of each of Mr. Brand and Mr. Phipps. In the event of the
termination of employment by the Company (other than upon death, permanent
disability or a "termination for cause"), each of Mr. Brand and Mr. Phipps would
be entitled to receive his then-current base salary for a period equal to the
greater of (i) the remainder of the term of his employment agreement, or (ii)
twelve months from the effective date of termination.
In July 1997, the Company entered into a consulting agreement with MBF, an
entity which is controlled by Mr. Fisher, pursuant to which MBF agreed to cause
Mr. Fisher to provide certain financial consulting services to the Company for
up to 25% of Mr. Fisher's business time. Under the consulting agreement, MBF is
entitled to receive a monthly payment of $5,000 The consulting agreement has a
term of 18 months.
In addition, the Company has entered into consulting agreements with Dr.
Brand and Mr. Thompson. Mr. Thompson's consulting arrangements were terminated
upon his election as the Company's Chief Executive Officer. See "Compensation
Committee Interlocks and Insider Participation."
Mr. Reardon resigned as an officer of the Company effective February 27,
1998. Pursuant to the terms of his severance agreement, the Company agreed to
continue to pay to Mr. Reardon his current base salary and certain medical
benefits through June 30, 1998 (subject to certain exceptions). Also pursuant to
the severance agreement, Mr. Reardon has agreed to terminate certain vested
options held by him and, in exchange therefor, the Company has granted Mr.
Reardon an option to purchase an equal number of shares of Common Stock which
option shall remain exercisable for one year from the effective date of
termination. Mr. Reardon has agreed to provide certain consulting services to
the Company upon request until June 30, 1998.
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Company's directors and executive officers and persons
holding more than 10% of a registered class of the Company's equity securities
are required to file with the SEC and to provide the Company with initial
reports of ownership, reports of changes in ownership and annual reports of
ownership of common stock and other equity securities of the Company. Based
solely upon a review of such reports and any amendments thereto which have been
furnished to the Company, the Company has not identified any reports required to
be filed during the fiscal year ended June 30, 1997 that were not filed in a
timely manner.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee is currently comprised of Dr. Brand
and Messrs. Carreras and Garcia. Mr. Thompson resigned as a member of the
Compensation Committee effective upon his election as the Company's Chief
Executive Officer. During the fiscal year ended June 30, 1997, Mr. Mendelsohn
(who resigned as a director of the Company in July 1997) was also a member of
the Compensation Committee. Mr. Mendelsohn has entered into a consulting
agreement with the Company.
The Company has entered into a consulting agreement with Dr. Brand pursuant
to which Dr. Brand provides strategic, technological and other services to the
Company for up to 90 days in any calendar year. Under the consulting agreement,
which expires April 30, 1999, Dr. Brand is entitled to receive a quarterly
payment of 36,363 shares of Common Stock. In the consulting agreement, Dr. Brand
has agreed to certain confidentiality, non-competition and intellectual property
covenants.
Mr. Thompson has a consulting arrangement with the Company pursuant to
which Mr. Thompson has provided strategic, technological and other services to
the Company since August 1997. Under that consulting arrangement, Mr. Thompson
received an aggregate of approximately $47,000 for work performed as of December
31, 1997, as well as reimbursement for certain expenses incurred by him in
connection therewith. Mr. Thompson also is entitled to receive additional
monthly payments of up to $12,000 per month through March 31, 1998, as well as
additional expense reimbursements. In addition to the cash payments referred to
above, under the consulting arrangement, Mr. Thompson is entitled to receive
96,000 shares of Common Stock. Upon execution of an appropriate consulting
agreement, Mr. Thompson will be bound by certain confidentiality,
non-competition and intellectual property covenants. Mr. Thompson's consulting
arrangements will be terminated upon the effectiveness of the Thompson
Agreement. See "Employment Agreements and Compensation Arrangements."
No executive officer of the Company and no member of the Compensation
Committee is a member of any other business entity that has an executive officer
that sits on the Company's Board or on the Compensation Committee.
CERTAIN TRANSACTIONS
In July 1995, the Company sold to SFM Series B Warrants to purchase
1,500,000 shares of Common Stock, at a price of $0.02 per share, with an
exercise price of $0.25 per share, for services rendered in obtaining financing
for the Company. Alfred Mendelsohn and Lawrence I. Schneider, former directors
of the Company, were principals in SFM. Mark B. Fisher, a director of the
Company, was also a principal in SFM.
In December 1995, the Company entered into a consulting agreement with two
companies, SFM and PTCO, for services to be rendered in obtaining additional
financing for the Company. SFM and PTCO were granted Series E Warrants to
purchase a total of 1,000,000 shares of the Company's Common Stock at $0.50 per
<PAGE>
share any time prior to March 7, 2003. SFM and PTCO also were subsequently paid
fees of $87,500 and $216,377, respectively, when the financing was provided in
March 1996. Norman M. Phipps, a director of the Company, and Wade Teman, a
former officer of the Company, are principals in PTCO.
In May 1996, a former director of the Company, Lawrence I. Schneider, was
elected Chairman of the Executive Committee for a five-year term. As
compensation, he was paid $100,000, in June 1996. Mr. Schneider resigned as a
director in November 1996.
During the fiscal year ended June 30, 1996, the Company paid Orbitrex
International, Inc. ("Orbitrex"), whose President is Alfred Mendelsohn, a former
director of the Company, $71,000 for business development services provided to
the Company. Additionally, the Company granted Mr. Mendelsohn Series F Warrants
to purchase 100,000 shares of Common Stock at $0.50 per share.
In June 1997, the Company entered into a consulting agreement with
Orbitrex. Under the consulting agreement, Orbitrex agreed to provide certain
services in connection with product development and international marketing
opportunities. Under the consulting agreement, Orbitrex is entitled to receive
payments aggregating $60,000, payable in monthly installments on or prior to
April 30, 1998. In the consulting agreement, Orbitrex agreed to certain
confidentiality, non-competition and intellectual property covenants.
In July 1997, Mr. Phipps purchased 850,000 shares of Common Stock from the
Company for $467,500, or $0.55 per share. In connection with the purchase,
$8,500 was paid in cash from the proceeds of a one-time bonus paid to Mr. Phipps
and the remainder was paid in the form of a non-recourse secured promissory note
(the "Phipps Note"). The Phipps Note does not bear interest, has no fixed
maturity date, and is secured by a pledge of the shares of Common Stock
purchased by Mr. Phipps. The Phipps Note will automatically be forgiven upon the
occurrence of a "Change in Control Event" (as defined in the Phipps Note). The
Phipps Note will become due and payable upon the occurrence of certain events,
including a sale or other disposition by Mr. Phipps of the shares of Common
Stock or the termination of Mr. Phipps' employment as a result of a "Termination
for Cause" (as defined in the Phipps Note). If Mr. Phipps' employment
terminates, other than as a result of a Termination for Cause or a "Without
Cause Termination" (as defined in the Phipps Note), the Phipps Note will become
payable in 60 monthly installments. The Company has agreed to make certain
payments to Mr. Phipps in respect of certain federal income tax consequences
which may result from the terms of the Phipps Note.
MBF, an entity controlled by Mark B. Fisher, a director of the Company,
paid $35,000 of the purchase price payable by it in connection with its July
1997 purchase of Class A Debentures, Series G Warrants, Series H Warrants, and
Series I Warrants in the form of a non-recourse secured promissory note (the
"MBF Note"). The MBF Note matures on July 29, 2000 and bears interest
(compounded annually) at a rate of 6.07% per annum, which is payable at
maturity. The MBF Note is secured by a pledge of the Series G Warrants purchased
by MBF. The MBF Note will become immediately due and payable upon the occurrence
of certain events, including a sale or other disposition by MBF of the Series G
Warrants purchased by it or the consummation of a Company Sale (as defined in
the Stockholders Agreement).
Prior to its acquisition by the Company, Mr. Brand, the Company's Chairman
and Chief Executive Officer, lent certain amounts to mmTech on an as-needed
basis to fund a portion of mmTech's working capital requirements. The maximum
amount advanced by Mr. Brand was $649,150, and $623,086 in such advances were
outstanding at June 30, 1997. Pursuant to an agreement between Mr. Brand and the
Company, the Company has agreed to pay interest on the unpaid advances (which
previously had been interest-free) at a rate of seven percent per annum. The
Company also agreed that, subject to its cash flow requirements, it would use
its best efforts to repay up to $300,000 of such advances on or before September
30, 1997 and that the remaining advances would be repaid at a rate of $50,000
per month, commencing in October 1997. As of the Record Date, the Company had
paid Mr. Brand $200,000 pursuant to the arrangements described above.
Mr. Brand owns 40% of the outstanding common stock of Advanced Control
Components, Inc. ("ACC"). ACC currently sublets space from the Company at its
Eatontown, New Jersey facility and pays to mmTech $33,312 in annual rent.
Employees from mmTech perform services for ACC and employees from ACC perform
services for
<PAGE>
mmTech from time to time. The company utilizing such services pays to the
company providing such services an amount equal to two times the base hourly
salary of the employees providing such services for the number of hours
involved. Pursuant to such arrangements, ACC paid to mmTech net amounts of
$230,686 during the fiscal year ended June 30, 1997 and $154,850 during the
fiscal year ended June 30, 1996.
Certain holders of the Company's securities, including directors, officers
and beneficial owners of more than 5% of the Common Stock are entitled to
certain registration rights with respect to securities of the Company held by
them.
For a description of certain other transactions between the Company and
certain of its directors, executive officers and major stockholders, See "Right
to Designate Directors; Changes in Control."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES DESCRIBED ABOVE.
PROPOSAL TWO
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY
The Board of Directors believes that it is advisable to amend Article FIRST
of the Certificate of Incorporation to change the name of the Company to
"Broadband Wireless Communications, Inc." (the "Name Change Amendment").
Accordingly, in March 1998, the Board of Directors adopted a resolution
approving the Name Change Amendment and directing that the Name Change Amendment
be presented to the stockholders at the Meeting for their approval. If approved
by the stockholders, the first paragraph of Article FIRST would read in its
entirety as follows:
"FIRST: The name of the Corporation is BROADBAND WIRELESS COMMUNICATIONS,
INC."
Since March 1996, the Company has sought to redirect its business focus
away from defense applications and toward commercial opportunities, including
opportunities available for the sale of the Company's high-power amplifiers and
peripheral equipment for use in the emerging market for local multipoint
distribution services. The Board of Directors believes that the new name more
accurately identifies the Company with its new strategic focus and that the new
name will assist the Company in marketing its products and services in these new
commercial markets.
If the Name Change Amendment is approved by the stockholders, it will
become effective upon the filing of a Certificate of Amendment in accordance
with the provisions of the Delaware General Corporation Law (the "DGCL").
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL TWO.
PROPOSAL THREE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO EFFECT
REVERSE STOCK SPLIT
The Board of Directors believes that it would be in the best interests of
the Company and its stockholders to adopt the Reverse Split Amendment, which
will authorize the Board to file an amendment to the Certificate of
Incorporation to effect a reverse stock split ("Reverse Split") of one new share
of Common Stock (a "New Share")
<PAGE>
for each ten issued shares of Common Stock. If the Reverse Split Amendment is
adopted, the Board will have authority, without further stockholder approval, to
determine the exact timing of and to effect the Reverse Split.
Following the determination by the Board to effect the Reverse Split and
the filing with the Secretary of State of Delaware of the Reverse Split
Amendment (the "Effective Date"), the Board will notify the stockholders that
the Reverse Split has been effected. The full text of the Reverse Split
Amendment is set forth in Exhibit A attached to this Proxy Statement, and the
discussion of the Reverse Split and the Reverse Split Amendment is qualified in
its entirety by reference to Exhibit A, which is incorporated herein by
reference as if fully set forth herein.
In March 1998, the Board of Directors adopted resolutions approving the
Reverse Split Amendment and directing that the Reverse Split Amendment be
submitted to stockholders for adoption. As described below, the Board's primary
objective in effecting the Reverse Split Amendment is to improve the potential
ability of the Company to raise capital by issuing additional shares. See the
discussion under Proposal Four relating to the amendment to the Certificate of
Incorporation to increase the authorized capital stock of the Company. The Board
of Directors believes that certain securities firms discourage their registered
representatives from recommending the purchase of lower-priced corporate
securities. Additionally, the policies and practices of a number of brokerage
houses tend to discourage individual brokers within those firms from dealing in
lower-priced stocks. Some of these policies and practices relate to the payment
of brokers' commissions and to time-consuming procedures that operate to make
the handling of lower-priced stocks economically unattractive to brokers. The
structure of trading commissions also tends to have an adverse impact upon
holders of lower-priced stocks since the brokerage commission payable on the
sale of a lower-priced stock generally represents a higher percentage of the
sales price than the commission on a relatively higher-priced stock.
Consequently, the Board of Directors believes that this limits the marketability
of the Common Stock, at its current per share price. For instance, the Board of
Directors believes that the low per share market price of the Common Stock
impairs the marketability and acceptance of the Common Stock to institutional
investors and other members of the investing public and creates a negative
impression with respect to the Company. Theoretically, the number of shares
outstanding should not, by itself, affect the marketability of such shares, the
type of investor who acquires them or the Company's reputation in the financial
community. In practice, however, many investors and market makers consider
low-priced stock as unduly speculative in nature and, as a matter of policy,
avoid investment and trading in such stocks. The foregoing factors may adversely
affect not only the pricing of the Common Stock but also the liquidity of the
Common Stock and the Company's ability to raise additional capital through the
sale of equity securities.
The Board of Directors is hopeful that the decrease in the number of shares
of Common Stock outstanding as a consequence of the proposed Reverse Split and
the anticipated increase in the price per share will encourage greater interest
in the Common Stock by the financial community and the investing public and
possibly promote greater liquidity for the Company's stockholders with respect
to those shares presently held by them. However, the possibility does exist that
such liquidity may be adversely affected by the reduced number of shares which
would be outstanding if the proposed Reverse Split is effected.
The Board of Directors is hopeful that the proposed Reverse Split will
result in a price level for the shares of Common Stock that will mitigate the
present reluctance, policies and practices of brokerage firms and investors
referred to above and diminish the adverse impact of trading commissions on the
potential market for the shares. However, there can be no assurance that the
proposed Reverse Split will achieve any of these desired results, nor can there
be any assurance that the price per share of the Common Stock immediately after
the proposed Reverse Split will increase proportionately with the Reverse Split,
or that any increase can be sustained for any period of time, or that the market
price of the Common Stock will exceed or remain in excess of the current market
price.
The Common Stock is quoted on the OTC Bulletin Board under the symbol
"LGMTA." The following table indicates the high and low per share bid prices for
the Common Stock as reported by the OTC Bulletin Board for the periods indicated
(such quotations reflect inter-dealer prices, do not include retain mark-ups,
mark downs or commission and may not necessarily represent actual transactions).
<PAGE>
High Low
Fiscal 1996
First quarter * *
Second quarter * *
Third quarter * *
Fourth quarter $2.375 $0.875
Fiscal 1997
First quarter $1.250 $0.50
Second quarter 1.250 0.375
Third quarter 0.625 0.4375
Fourth quarter 0.875 0.4375
Fiscal 1998
First quarter $1.50 $1.00
Second quarter 1.25 0.375
Third quarter (through March 24, 1998) 1.25 0.3125
- --------------------------
*Not reported.
The Certificate of Incorporation presently authorizes the Company to issue
100,000,200 shares of capital stock, of which 100,000,000 shares are Common
Stock and 200 shares are Preferred Stock, par value $.01 per share (the
"Preferred Stock"). Of the 200 shares of Preferred Stock, 30 shares are
designated as Series A Preferred Stock. If approved by the stockholders, the
principal effect of the Reverse Split will be to decrease the number of shares
of Common Stock issued and outstanding from 25,892,414 shares to approximately
2,589,241 shares of Common Stock based on the number of shares outstanding on
the Record Date. The total number of shares of Common Stock held by each
stockholder would be reclassified automatically into the number of whole New
Shares equal to the number of shares of Common Stock owned immediately prior to
the Reverse Split divided by ten, provided that pursuant to the Certificate of
Incorporation, no fractional shares will be issued. Additionally, the number of
shares of Common Stock the Company will be authorized to issue will be decreased
from 100,000,000 to 10,000,000 (or from 350,000,000 to 35,000,000 if the
stockholders also adopt Proposal Four).
The following table illustrates the principal effect of the Reverse
Split on the Common Stock based on Common Stock authorized, issued and
outstanding and reserved for issuance upon the exercise of various outstanding
warrants and options of the Company as of the Record Date.
Prior to After 1-for-10
Number of Shares Reverse Split Reverse Split
Common Stock Authorized....... 100,000,000 10,000,000 (1)
Issued and Outstanding........ 25,892,414 2,589,241
Reserved for Issuance ........ 35,916,534 3,591,653
Available for Future Issuance. 38,191,052 3,819,105
- ----------------------
(1).Assuming the stockholders adopt Proposal Four, and giving effect thereto,
such number of shares of Common Stock will be 35,000,000.
On March 24, 1998, the closing bid price of the Common Stock as reported by
the OTC Bulletin Board was $0.86 per share. By decreasing the number of shares
of Common Stock outstanding without altering the aggregate economic interest in
the Company represented by such shares, the Board of Directors believes that the
market price will be increased. There can be no assurance that the market price
of the Common Stock will be so increased.
As of the Record Date, the Company had outstanding stock options to
purchase an aggregate 3,186,133 shares of Common Stock with exercise prices per
share that ranged from $0.10 to $0.605, warrants to purchase an aggregate of
17,243,390 shares of Common Stock with exercise prices per share that ranged
from $0.01 to $1.125, and $4,530,054 in aggregate principal amount of
convertible subordinated debentures convertible into an aggregate of 9,744,811
shares of Common Stock. Upon the effectiveness of the Reverse Split, these
securities provide for a proportional downward adjustment to the number of
shares issuable upon the exercise or conversion of such securities and a
corresponding upward adjustment in the per share exercise prices to reflect the
Reverse Split. Similarly, the terms of the Series A Preferred Stock provide a
proportional downward adjustment in both the number of shares of Common Stock
underlying such Series A Preferred Stock and in the conversion formula to be
applied to any conversion thereof.
The holders of shares of Common Stock are entitled to receive distributions
of cash or other property, if any, that may be declared from time to time by the
Board of Directors in its discretion from funds legally available therefor,
subject to the dividend priority of the holders of Preferred Stock. Thus,
although the Reverse Split will have the effect of increasing the Company's
capital in excess of par value by approximately $233,000, the Reverse Split and
its impact on capital in excess of par value will not affect potential
distributions to the Company's stockholders. The Company, however, has never
paid cash dividends on the Common Stock and has no plans to pay cash dividends
in the foreseeable future. Payment of future dividends, if any, will be at the
discretion of the Board of Directors after taking into account various factors,
including the Company's financial condition, results of operations, current and
anticipated cash needs and plans for expansion. The Company is also prohibited
from paying cash dividends on the Common Stock under the terms of its
outstanding indebtedness.
A summary of certain United States federal income tax consequences of the
Reverse Split as contemplated in the Reverse Split Amendment is set forth below.
The summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury Regulations, judicial authority and administrative rulings and
practice currently in effect, all of which are subject to change, which change
could be retroactive and thereby modify the tax consequences discussed herein.
The Company has neither received nor requested any ruling from the Internal
Revenue Service (the "Service") or any opinion of counsel with respect to these
matters. Accordingly, no assurance can be given as to the interpretation that
the Service or the courts may make with respect to these matters. In addition,
the United States federal income tax consequences to any particular taxpayer may
be affected by matters not discussed below. For example, certain types of
holders of Common Stock (including, without limitation, financial institutions,
dealers in securities, insurance companies, personal holding companies,
tax-exempt organizations, individual retirement accounts and foreign persons)
may be subject to special rules that are not addressed herein. This Proxy
Statement does not address any tax consequences other than the United States
federal income tax consequences that may affect a holder of Common Stock as
described herein. The discussion below applies to stockholders who hold their
shares of Common Stock as a capital asset within the meaning of Section 1221 of
the Code.
Except as described below with respect to cash received in lieu of
fractional share interests, the receipt of New Shares in the Reverse Split
should not result in any taxable gain or loss to stockholders for federal income
tax purposes. If the stockholders approve the Reverse Split Amendment, the tax
basis of the New Shares received as a result of the Reverse Split (including any
fractional share interests to which a stockholder is entitled) will be equal, in
the aggregate, to the basis of the shares exchanged for the New Shares. For tax
purposes, the holding period of the shares immediately prior to the Effective
Date of the Reverse Split will be included in the holding period of the New
Shares received as a result of the Reverse Split, including any fractional share
interests to which a stockholder is entitled. A stockholder who receives cash in
lieu of fractional New Shares generally will recognize capital gain or loss in
an amount equal to the difference between the amount of cash received and the
adjusted basis of the fractional shares treated as surrendered for cash.
THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS FOR
GENERAL INFORMATION ONLY AND IS NOT TAX ADVICE. EACH STOCKHOLDER SHOULD CONSULT
HIS OR HER OWN TAX ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES TO HIM OR HER OF THE TRANSACTIONS CONTEMPLATED BY THE
PROPOSED REVERSE SPLIT AMENDMENT.
No fractional shares of Common Stock will be issued in connection with the
proposed Reverse Split. Assuming the approval of the Reverse Split Amendment, a
stockholder who would otherwise be entitled to receive a fractional share of
Common Stock will receive, in lieu thereof, cash for the resulting fractional
share interest in an amount equal to the product of the number of shares of the
Common Stock held by such holder immediately prior to the effectiveness of the
Reverse Split which have not been classified into a whole New Share, multiplied
by the average of the bid and offer prices per share on the last day prior to
the Effective Date, on which such prices were published by the OTC Bulletin
Board.
The Company intends to appoint American Stock Transfer & Trust Company (the
"Exchange Agent") as Exchange Agent to act for the holders of the Common Stock
in connection with the Reverse Split Amendment. The Company will deposit with
the Exchange Agent, as soon as practicable after the Effective Date, cash in an
amount equal to the value of the estimated aggregate number of fractional shares
that will result from the Reverse Split. Any portion of the cash deposited with
the Exchange Agent to pay fractional share interests that is held by the
Exchange Agent six months after the Effective Date will be returned to the
Company on demand. The funds required to purchase the fractional shares are
available and will be paid from the Company's current cash reserves. The
Company's stockholder list indicates that a portion of the outstanding Common
Stock is registered in the names of clearing agencies and broker nominees. It
is, therefore, not possible to predict with certainty the number of fractional
shares and the total amount that the Company will be required to pay for
fractional share interests. However, it is not anticipated that the funds
necessary to effect the cancellation of fractional shares will be material.
As of the Record Date, approximately 400 persons were holders of record of
Common Stock. The Company does not anticipate that the Reverse Split and the
payment of cash in lieu of fractional shares will result in a significant
reduction in the number of holders of record of the Common Stock. The Company
does not presently intend to seek, either before or after the Reverse Split, any
change in the Company's status as a reporting Company for federal securities law
purposes.
On or after the Effective Date, the Company will mail to each stockholder a
letter of transmittal. A stockholder will be able to receive his New Shares and,
if applicable, cash in lieu of a fractional New Share only by transmittal to the
Exchange Agent of such stockholder's stock certificate(s) for shares of Common
Stock that were issued prior to the Effective Date, together with the properly
executed and completed letter of transmittal and such evidence of ownership of
such shares as the Company may require. Stockholders will not receive
certificates for New Shares unless and until the certificates representing their
shares of Common Stock that were issued prior to the Effective Date are
surrendered. Stockholders should not forward their certificates to the Exchange
Agent until the letter of transmittal is received and should surrender their
certificates only with such letter of transmittal. A payment in lieu of a
fractional New Share will be made to a stockholder promptly after receipt of a
properly completed letter of transmittal and stock certificate(s) for all of his
shares of Common Stock outstanding prior to the Effective Date.
There will be no service charges payable by the stockholders of
the Company in connection with the exchange of their certificates or in
connection with the payment of cash in lieu of the issuance of fractional New
Shares. These costs will be borne by the Company.
<PAGE>
Pursuant to Section 242(c) of the DGCL, the Board of Directors reserves
the right, notwithstanding stockholder adoption and without further action by
the stockholders, to not proceed with the Reverse Split Amendment, if, at any,
time prior to filing the Reverse Split Amendment with the Secretary of State of
the State of Delaware, the Board of Directors, in its sole discretion,
determines that the Reverse Split Amendment is no longer in the best interests
of the Company and its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL THREE.
PROPOSAL FOUR
AMENDMENT OF CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK
The Board of Directors believes that it is advisable to amend Article
FOURTH of the Certificate of Incorporation to increase the number of authorized
shares of capital stock from 100,000,200 to 355,000,000 (or from 10,000,200 to
40,000,000 if the Reverse Split Amendment is approved and effected), comprised
of 350,000,000 shares of Common Stock (or 35,000,000 shares of Common Stock if
the Reverse Split Amendment is approved and effected) and 5,000,000 shares of
Preferred Stock. Accordingly, in March 1998, the Board of Directors adopted a
resolution approving the Increased Shares Amendment and directing that it be
presented to the stockholders at the Meeting for their approval. The increase in
the total number of authorized shares of capital stock consists of an increase
in the number of authorized shares of Common Stock from 100,000,000 to
350,000,000 (or from 10,000,000 to 35,000,000 if the Reverse Split Amendment is
approved and effected) and an increase in the number of authorized shares of
Preferred Stock from 200 to 5,000,000 shares.
As of the Record Date, of the 100,000,000 shares of Common Stock presently
authorized by the Certificate of Incorporation, 25,892,414 shares were issued
and outstanding, 31,916,534 shares were reserved for issuance upon the exercise
or conversion of outstanding securities of the Company, and 7,500,000 were
reserved for issuance under the Stock Compensation Program (750,000 shares if
the Reverse Split Amendment is approved and effected) (assuming approval of
Proposal Six by the stockholders at the Meeting). Also as of the Record Date, of
the 200 shares of Preferred Stock presently authorized by the Certificate of
Incorporation, 30 shares were designated as Series A Preferred Stock, of which
28 shares were issued and outstanding.
The full text of the Increased Shares Amendment is attached as Exhibit
B to this Proxy Statement. The description of the Increased Shares Amendment
contained herein is not intended to be complete and is qualified in its entirety
by reference to the full text of such exhibit, which is hereby incorporated
herein by reference.
The Board of Directors has concluded that the Company's authorized
capital stock should be increased to provide the Company with greater
flexibility in issuing shares and acting upon proposed transactions. Although
the Company has no present agreements or commitments to issue additional shares
of capital stock (except pursuant to the terms of the Company's outstanding
securities, as described above), an increase in the number of authorized shares
of capital stock would provide the Company the necessary flexibility to pursue
potential financing, acquisition and merger opportunities, and other potential
corporate opportunities, without incurring the expense and delay of holding a
special stockholders meeting to authorize the issuance of additional shares of
capital stock. If the Increased Shares Amendment is approved by stockholders, no
further action or authorization by the Company's stockholders would be necessary
prior to the issuance of additional shares, except as may be provided by
applicable law, regulatory agencies or by the rules of any stock exchange or
national securities association on which the Company's securities may then be
listed or included for trading.
The Board of Directors will have broad discretion with respect to
designating and establishing the terms of additional series of Preferred Stock
prior to its issuance. Under Delaware law, the Board of Directors may issue
<PAGE>
series of Preferred Stock with such designations, preferences and other rights
as may be stated in the resolution adopted by the Board of Directors providing
for the issuance of such stock subject to any special voting rights granted to
any outstanding series of Preferred Stock. Any series of Preferred Stock
authorized by the Board may rank prior to the Common Stock as to dividend
rights, liquidation preferences or both, may have full or limited voting rights
(including, subject to the rules of any stock exchange or national securities
association on which the Company's securities may then be listed or included for
trading), multiple voting rights and voting rights as a class, may provide that
such series is redeemable or may be entitled to the benefit of sinking fund for
retirement and may be convertible into shares of Common Stock or other
securities, in each case on such terms as the Board may designate without
further action of the Company's stockholders, unless such action were required
by applicable law, the terms of the Company's outstanding securities or the
rules of any stock exchange or national securities association on which the
Company's securities may then be listed or included for trading. Depending upon
the rights and preferences designated for any particular series, issuances of
Preferred Stock could have the effect of diluting stockholders' equity, earnings
per share and voting rights attributable to the Common Stock.
The additional shares of Common Stock which would be authorized for
issuance if the Increased Shares Amendment is approved by the stockholders would
be identical to the shares of Common Stock now authorized and outstanding. The
Common Stock has no conversion, pre-emptive or other subscription rights and is
not redeemable.
The proposed increase in the number of authorized shares of capital stock
is not intended to prevent or impede a change in control of the Company.
Further, the Company is not aware of any current effort to acquire control of
the Company. However, the issuance of additional shares of capital stock could
be used to inhibit, or make more costly, an attempt to acquire control of the
Company. For instance, the shares of Preferred Stock could be issued that
contain voting requirements providing for extraordinary voting rights or
approval by the holders of the Preferred Stock of extraordinary corporate
transactions. In addition, the issuance of additional shares of Common Stock
could have the effect of diluting earnings and book value per share, and could
be used to dilute the stock ownership of a person or entity seeking to obtain
control of the Company, including upon issuance under a stockholder rights plan
or "poison pill." Shares of capital stock also could be sold to purchasers who
might oppose a specific attempt to gain control of the Company.
If the Increased Shares Amendment is approved by the stockholders, it
will become effective upon the filing of a Certificate of Amendment in
accordance with the provisions of the DGCL. Pursuant to Section 242(c) of the
DGCL, the Board of Directors has reserved the right, notwithstanding stockholder
approval and without further action by the stockholders, to not proceed with the
Increased Shares Amendment, if, at any time prior to filing it with the
Secretary of State of the State of Delaware, the Board of Directors, in its sole
discretion, determines that the Increased Shares Amendment is no longer in the
best interests of the Company and its stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL FOUR.
PROPOSAL FIVE
AMENDMENT TO CERTIFICATE OF INCORPORATION TO AMEND
THE TERMS OF THE SERIES A PREFERRED STOCK
As described above under "Proposal One - Election of Directors - Right to
Designate Directors; Changes in Control," in connection with its July 1997
private placement, the Company entered into the Stockholders Agreement. Under
the terms of the Stockholders Agreement, the holders of a majority of the shares
of Common Stock beneficially owned by the Purchasers have the right, subject to
certain limitations, to cause the Company to enter into a "Company Sale".
However, pursuant to the terms of the Series A Preferred Stock, the holders of
66 2/3% of the outstanding Series A Preferred Stock must approve certain
extraordinary transactions, including certain mergers, consolidations, and the
sale of all or substantially all of the Company's property or business, that
might constitute a "Company Sale" in circumstances where a vote of such holders
would not be required under the DGCL. At the request of the Purchasers, at the
time of the consummation of the private
<PAGE>
placement, the then-existing holders of the Series A Preferred Stock consented
to amend the terms of the Series A Preferred Stock to provide that, except as
provided by applicable law, they would not have the right to vote on any matter
presented to stockholders.
In addition, the terms of the Series A Preferred Stock provide that the
holders of 66 2/3% of the outstanding Series A Preferred Stock must approve
certain changes in the Company's capital structure, including changes in the
terms of the Series A Preferred Stock that would adversely affect the rights,
preferences or powers of the Series A Preferred Stock, an increase in the
authorized amount of Preferred Stock, the authorization or creation, or increase
in the authorized amount of, any other class of stock ranking prior to or on a
parity with the Preferred Stock as to dividends or assets, or the authorization
or creation, or increase the authorized amount of, any class of stock or
obligations convertible into or evidencing the right to purchase any class of
stock ranking prior to or on parity with the Preferred Stock as to dividends or
assets. Such a super-majority voting requirement is not required by Delaware
law, however, and the Board of Directors believes that such a super-majority
voting requirement is unduly restrictive.
Consistent with the terms of the Stockholders Agreement and the prior
consent of the holders of the Series A Preferred Stock, the Board of Directors
believes that (except to the extent required by applicable law) it is advisable
to amend the terms of the Series A Preferred Stock to eliminate the voting
rights of the Series A Preferred Stock. The Board of Directors believes that it
is in the best interests of the Company and its stockholders to maintain the
maximum amount of flexibility to consider potential extraordinary corporate
transactions, such as a sale of the Company. If the terms of the Series A
Preferred Stock are not amended, the holders of the Series A Preferred Stock
will have the ability to block an extraordinary transaction, such as a sale or
merger, even if a majority of the holders of the Company's capital stock
approves the proposed transaction. In addition, as described below, the DGCL
provides the holders of the Series A Preferred Stock with certain class voting
rights in the event of proposed changes to the terms of the Series A Preferred
Stock that would adversely affect their rights. The Board of Directors believes
that the provisions of the DGCL provide the holders of the Series A Preferred
Stock with sufficient protection against unilateral adverse changes in the terms
of the Series A Preferred Stock. As a result, the Board of Directors believes
that the terms of the Series A Preferred Stock should be amended to eliminate
the special voting provisions described above. Accordingly, in March 1998, the
Board of Directors adopted resolutions approving the Preferred Stock Amendment
and directing that it be presented to the stockholders at the Meeting for their
approval. If the Preferred Stock Amendment is adopted, Section 8 of the Series A
Preferred Stock would be deleted in its entirety and replaced with the
following:
"8. Except as expressly provided by law, the Preferred Stock shall
have no right to vote on any question or in any proceeding or to be
represented at or to receive notice of any meeting of the
stockholders."
Pursuant to the provisions of the DGCL, holders of outstanding shares of a
particular class of capital stock have the right to vote as a class only on a
proposed amendment to a company's certificate of incorporation if the amendment
would increase or decrease the aggregate number of authorized shares of such
class, increase or decrease the par value of the shares of such class, or alter
or change the powers, preferences or special rights of the shares of such class
so as to affect them adversely. Accordingly, if the Preferred Stock Amendment is
adopted at the meeting, holders will only have the right to vote in the
circumstances described above. In addition, any such class vote would require
the affirmative vote of a majority of the outstanding Series A Preferred Stock,
thereby eliminating the supermajority voting provisions described above.
If the Preferred Stock Amendment is adopted, the Board of Directors will
have the discretion to pay dividends on the Series A Preferred Stock in cash or
in shares of Common Stock having a "Fair Market Value" equal to the cash
dividend otherwise payable. If the Preferred Stock Amendment is adopted, the
first sentence of Section 2 of the Series A Preferred Stock would be amended so
as to read as follows:
"2. Dividends. The holders of shares of Preferred Stock shall be
entitled to receive, but only when and as declared by the Board of
Directors, dividends in an amount equal to twelve percent (12%) of the
Stated Value per share per annum, payable quarterly on such dates in
each year as
<PAGE>
shall be fixed by the Board of Directors. Such dividends shall be
payable, at the option of the Board of Directors, either in cash or in
shares of Common Stock having a "Fair Market Value" (as defined below)
on the date of declaration equal to the cash dividend otherwise
payable. As used herein, "Fair Market Value" on any date of
determination means the average of the last sale price per share of
the Common Stock for the ten trading days immediately preceding such
date as reported by any national securities exchange on which the
Common Stock is then listed or admitted for trading or as reported by
the Nasdaq Stock Market if the Common Stock is not then listed or
admitted for trading on any national securities exchange, or the
average of the closing bid and asked prices per share of the Common
Stock for the ten trading days immediately preceding such date as
reported on the OTC Bulletin Board or any similar successor service
then publishing quotations on the Common Stock if the Common Stock is
not then listed or admitted for trading on any national securities
exchange or included on the Nasdaq Stock Market, or as determined in
good faith by the Company's Board of Directors in the event that the
Common Stock is not then listed or admitted for trading on any
national securities exchange or included on the Nasdaq Stock Market
and quotations on the Common Stock are not then being regularly
published."
The Board of Directors believes that the Preferred Stock Amendment is in
the best interest of the Company and its stockholders. In light of the Company's
recent losses and its historical cash constraints, the Board of Directors
believes that it is important for the Company to have the flexibility to manage
its limited cash resources. At the same time, the Company believes that holders
of the Series A Preferred Stock should receive regular dividends. Presently, the
Company has not paid a dividend on the Series A Preferred Stock since its
issuance in March 1996 as a result of the Company's need to conserve cash and
the restrictions on such dividends contained in substantially all of the
Company's outstanding indebtedness. As a result, as of the Record Date, the
Company was in arrears with respect to such dividends in an aggregate amount of
$447,627. The Board of Directors believes that, if the Preferred Stock Amendment
is adopted, the Company will be able to commence payment of regular dividends on
the Series A Preferred Stock, notwithstanding the limitations on the payment of
cash dividends. If the Preferred Stock Amendment is adopted at the Meeting, the
Company intends to pay the dividend arrearage in shares of Common Stock.
Shares of Common Stock issued as dividends on the Series A Preferred Stock
will have the status of "restricted securities" under Rule 144 promulgated under
the Securities Act of 1933, as amended. Accordingly, such shares may not be sold
under Rule 144 until at least one year has elapsed from the receipt of such
shares. Assuming the Company continues to meet the requirements for the use of
Rule 144, holders will be entitled to sell such shares after the expiration of
the one-year holding period (subject to certain volume limitations and manner of
sale restrictions). After two years, holders, other than "affiliates" of the
Company, will be entitled to sell such shares without restriction, assuming Rule
144 continues to be available for such resales.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL FIVE.
<PAGE>
PROPOSAL SIX
INCREASE IN AGGREGATE NUMBER OF SHARES OF COMMON STOCK AVAILABLE
FOR GRANT UNDER THE LOGIMETRICS, INC. 1997 STOCK COMPENSATION PROGRAM
In April 1997, the Board of Directors adopted, and in May 1997, the
stockholders approved, the Stock Compensation Program in order to promote the
interests of the Company, its direct and indirect present and future
subsidiaries and its stockholders by providing eligible persons with the
opportunity to acquire a proprietary interest, or to increase their proprietary
interest, in the Company as an incentive to remain in the service of the
Company. The Stock Compensation Program authorizes the granting of incentive
stock options, non-qualified supplementary options, stock appreciation rights,
performance shares and stock bonus awards to employees and consultants of the
Company and its subsidiaries (approximately 75 in total), including those
employees serving as officers or directors of the Company. The Stock
Compensation Program also authorizes automatic option grants to directors who
are not otherwise employed by the Company. 4,000,000 shares of Common Stock have
been reserved for issuance in connection with the Stock Compensation Program of
which up to 3,850,000 shares may be issued under the Employee Plans and up to
150,000 shares may be issued under the Independent Director Plan. In the event
that an option or award granted under the Stock Compensation Program expires, is
terminated or forfeited or certain performance objectives with respect thereto
are not met prior to exercise or vesting, then the number of shares of Common
Stock covered thereby will again become eligible for grant under the Stock
Compensation Program. The Company receives no consideration for grants of
options or awards under the Stock Compensation Program.
The Stock Compensation Program is administered by the Compensation
Committee, which is comprised of directors who are "non-employee directors" for
purposes of Rule 16b-3 promulgated under the Exchange Act. Subject to applicable
law and the terms of the Stock Compensation Program, the Administrator has the
authority to grant options and awards under the Stock Compensation Program,
including to determine the terms and conditions of each individual grant, to
interpret and administer the provisions of the Stock Compensation Program, to
adopt, amend and rescind rules and regulations pertaining to the administration
of the Stock Compensation Program and to make all determinations relative
thereto. Notwithstanding the foregoing, the Independent Director Plan has been
designed to be "self-executing" in that options are granted automatically every
year. Further, the Administrator has only certain limited responsibilities under
the Independent Director Plan.
Options and awards granted under the Stock Compensation Program may have an
exercise or payment price as established by the Administrator, provided that the
exercise price of incentive stock options granted under the Employee Plans may
not be less than the fair market value of the underlying shares on the date of
grant. Options granted under the Independent Director Plan must have an exercise
price equal to the fair market value of the underlying shares on the date of
grant. Upon exercise or payment of an option or award under the Stock
Compensation Program, the participant will be required to provide the payment
price in full, in cash or in shares of the Company's securities valued at fair
market value on the date of the exercise of the option or award. The Stock
Compensation Program does provide for the "cashless exercise" of options granted
thereunder pursuant to which recipients of options may use the proceeds from the
sale of shares of Common Stock received upon the exercise of options to pay the
exercise price therefor. In connection with any exercise of options or awards,
the Company has the right to collect or withhold from any payments under the
Stock Compensation Program all taxes required to be withheld under applicable
law.
Unless otherwise provided at the date of grant, no option or award may vest
within one year of the date of grant and no option or award may be exercised
more than ten years from the date of grant. Options granted under the
Independent Director Plan vest one year following the date of grant and expire
if not exercised on or before the fifth anniversary thereof. Unless otherwise
specified by the Administrator, options and awards (other than pursuant to the
Independent Director Plan) vest in four equal installments on the first, second,
third and fourth anniversaries of the date of grant. The Administrator may
accelerate the vesting of any option or award granted under the Stock
Compensation Program, including upon the occurrence of a "Change in Control
Event" (as defined in the Stock Compensation Program). Options granted under the
Independent Director Plan automatically vest upon the occurrence of a "Change in
Control Event."
<PAGE>
Options and awards granted under the Stock Compensation Program are
nontransferable, except by will or by the laws of descent and distribution.
However, the Administrator may permit the recipient of a non-incentive stock
option granted under the Employee Plans and options granted under the
Independent Director Plan to transfer the option to a family member or a trust
created for the benefit of family members. During the lifetime of a participant,
an option may be exercised only by the participant or a permitted transferee. In
the event that a participant's employment or service terminates as a result of
death, all vested awards are paid to the participant's estate by the Company and
the participant's estate or any permitted transferee has the right to exercise
vested options for a period ending on the earlier of the expiration dates of
such options or one year from the date of death. If the participant's employment
or service terminates as a result of retirement or a "disability" (as set forth
in the Stock Compensation Program), all vested awards are paid to the
participant by the Company and the participant or any permitted transferee has
the right to exercise vested options for a period ending on the earlier of the
expiration dates of such options or one year from the date of termination. If
the participant's employment or service terminates for cause, all options and
awards automatically expire upon termination. If the participant's employment or
service terminates other than as a result of death, disability, retirement or
termination for cause, the participant has the right to collect on vested awards
immediately and the participant or any permitted transferee has the right to
exercise vested options for a period ending on the earlier of the expiration
dates of such options or awards or thirty days from the date of termination,
subject to extension at the discretion of the Administrator, or three months
from the date of termination in the case of options granted pursuant to the
Independent Director Plan. In all cases, any unvested options or awards
terminate as of the date of termination of employment or service.
The Administrator may amend or revise the terms of the Stock Compensation
Program from time to time; however no such amendment or revision may alter or
impair an option or award without the consent of the holder thereof and no
amendment may be made without stockholder approval if such approval is required
pursuant to applicable law. The Stock Compensation Program terminates on April
30, 2007, unless earlier terminated by the Board of Directors. No options or
awards may be granted under the Stock Compensation Program after its
termination; however, termination of the Stock Compensation Program will not
affect the status of any option or award outstanding on the date of termination.
Subject to certain exceptions not discussed herein, neither the Company nor
the participant will recognize taxable income or loss upon the grant of
non-qualified supplementary options, stock appreciation rights or performance
shares, or upon the issuance of any stock bonuses under the Stock Compensation
Program. In general, the participant will recognize ordinary income upon
exercise of a non-qualified supplementary option or stock appreciation right,
payment of performance shares, or lapse of forfeiture restrictions on any stock
bonus. The amount of income recognized generally will equal the difference
between (i) the fair market value of the underlying shares of Common Stock on
the date of the exercise or payment plus the amount of cash and other
consideration, if any, received by the participant and (ii) the exercise or
payment price, if any. The Company generally will receive a corresponding tax
deduction equal to the amount includable in the participant's income.
In addition, neither the Company nor the participant will recognize taxable
income or loss upon the grant or exercise of incentive stock options, although
there may be alternative minimum tax consequences to the participant upon
exercise. Upon subsequent disposition of the shares of Common Stock covered by
incentive stock options, the participant generally will recognize either capital
gain or loss or ordinary income, depending on whether certain holding period
requirements are satisfied. The Company generally will be entitled to a tax
deduction if the participant recognizes ordinary income.
As of the Record Date, outstanding options covering a total of 2,757,800
shares of Common Stock had been granted under the Employee Plans, of which
1,379,267 are currently exercisable by the holders thereof. As of the Record
Date, the options outstanding under the Employee Plans had a weighted average
exercise price of approximately $0.55 per share.
The following table reflects the stock option grants made by the Company
during the fiscal year ended June 30, 1997 under the Stock Compensation Program
to the executive officers named in the Summary
<PAGE>
Compensation Table and the groups identified below. The Company did not grant
any options under the Independent Director Plan or any stock appreciation rights
during the fiscal year ended June 30, 1997.
Name and Position Stock Options (#)
Charles S. Brand 20,000
Chairman of the Board
and Chief Executive Officer/
Chief Technology Officer
Norman M. Phipps 825,000
President and Chief
Operating Officer
Russell B. Reardon 310,000
Senior Vice President --
Finance and Administration
All executive officers 1,155,000
All employees, including all current officers who 1,643,800
are not executive officers
As a result of the recent change in the Company's strategic focus, the
Company may be required to hire additional personnel in the future, particularly
in its design, engineering and marketing areas. The Company believes that in
order to attract desirable candidates, and in order to retain current key
employees, it must have the flexibility to offer stock options and other awards
under the Stock Compensation Program to such candidates. Accordingly, in March
1998, the Board of Directors adopted a resolution approving the Program
Amendment and directing that it be presented to the stockholders at the Meeting
for their approval. If the Program Amendment is adopted, the number of shares of
Common Stock issuable under the Stock Compensation Program will be increased by
3,500,000 (350,000 shares if the Reverse Split Amendment is approved and
effected), all of which would be eligible for grant under the Employee Plans,
raising the total number or shares of Common Stock reserved for issuance under
the Stock Compensation Program to 7,500,000 shares (750,000 shares if the
Reverse Split Amendment is approved and effected). After giving effect to such
increase, a total of 4,742,200 shares of Common Stock would be available for
future grants under the Stock Compensation Program (474,220 shares if the
Reverse Split Amendment is approved and effected), constituting 7.7% of the
total shares of Common Stock outstanding on a fully diluted basis.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL SIX.
<PAGE>
PROPOSAL SEVEN
RATIFICATION OF AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP as the Company's
independent public accountants for the fiscal year ending June 30, 1998.
Deloitte & Touche LLP served as the Company's independent accountants for the
fiscal year ended June 30, 1997. Although the appointment of independent public
accountants is not required to be approved by stockholders, the Board of
Directors believes stockholders should participate in the selection of the
Company's independent public accountants. Accordingly, the stockholders will be
asked at the Meeting to ratify the Board's appointment of Deloitte & Touche LLP
as the Company's independent public accountants for the fiscal year ending June
30, 1998. Representatives of Deloitte & Touche LLP will be present at the
Meeting. They will have an opportunity to make a statement if they so desire and
will be available to respond to appropriate questions of the stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSAL SEVEN.
STOCKHOLDER PROPOSALS
Any proposal intended to be presented by a stockholder at the 1999 Annual
Meeting of Stockholders must be received by the Company at the address specified
below no later than November 26, 1998 to be considered for inclusion in therein.
Any proposal should be addressed to Secretary, LogiMetrics, Inc., 50 Orville
Drive, Bohemia, New York 11716 and should be sent by certified mail, return
receipt requested.
OTHER MATTERS
The Board of Directors does not know of any matters, other than those
referred to in the accompanying Notice for the Meeting, to be presented at the
Meeting for action by the stockholders. However, if any other matters are
properly brought before the Meeting or any adjournments thereof, it is intended
that votes will be cast with respect to such matters, pursuant to the proxies,
in accordance with the best judgment of the person acting under the proxies.
By Order of the Board of Directors
/s/ Erik S. Kruger
Erik S. Kruger, Secretary
March 26, 1998
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL
YEAR ENDED JUNE 30, 1997, INCLUDING FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY
STATEMENT. THE ANNUAL REPORT IS NOT TO BE REGARDED AS PROXY SOLICITING MATERIAL
OR AS A COMMUNICATION BY MEANS OF WHICH ANY SOLICITATION IS TO BE MADE.
<PAGE>
COMMON STOCK PROXY CARD
LOGIMETRICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, APRIL 9, 1998
The undersigned hereby revokes any prior proxy and appoints Charles S.
Brand, Norman M. Phipps and Erik S. Kruger, and each of them, attorneys and
proxies with power of substitution, to vote for and on behalf of the undersigned
at the LogiMetrics, Inc. Annual Meeting of Stockholders to be held on April 9,
1998 and at any adjournments or postponements thereof (the "Meeting"), upon the
following matters and upon any other business that may properly come before the
Meeting, as set forth in the related Notice of Meeting and Proxy Statement, both
of which have been received by the undersigned.
This proxy, when properly executed, will be voted in the manner
directed by the undersigned stockholder. If this proxy is executed but no
direction is made, this proxy will be voted FOR each of the Proposals.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS.
(CONTINUED, AND TO BE DATED AND SIGNED, ON THE OTHER SIDE)
<PAGE>
PLEASE MARK BOXES |_| IN BLUE OR BLACK INK
1. Election of directors.
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below) [ ] to vote for all nominees listed
below [ ]
To withhold authority for any individual nominee, print that nominee's name
on the space provided below.
- --------------------------------------------------------------------------------
Charles S. Brand, Dr. Frank A. Brand, Jean-Francois Carreras, Mark B. Fisher,
Francisco A. Garcia, Norman M. Phipps and Kenneth C. Thompson
2. Proposal to change the Company's name
For [ ] Against [ ] Abstain [ ]
3. Proposal to effect a one-for-ten reverse stock split of the Common Stock
For [ ] Against [ ] Abstain [ ]
4. Proposal to increase the authorized capital stock of the Company
For [ ] Against [ ] Abstain [ ]
5. Proposal to amend the terms of the Series A Preferred Stock
For [ ] Against [ ] Abstain [ ]
6. Proposal to increase the shares of Common Stock available for grant under
the LogiMetrics, Inc. 1997 Stock Compensation Program
For [ ] Against [ ] Abstain [ ]
7. Ratification of Deloitte & Touche LLP as independent public accountants for
fiscal year 1998.
For [ ] Against [ ] Abstain [ ]
If you have noted an address change or comments on either side of this card,
mark here: [ ]
Dated: _________________________, 1998
- -------------------------------------
Please sign this proxy and return it promptly whether or not you expect to
attend the Meeting. You may nevertheless vote in person if you attend.
Please sign exactly as your name appears hereon. Give full title if an Attorney,
Executor, Administrator, Trustee, Guardian, etc.
For an account in the name of two or more persons, each should sign, or if one
signs, he or she should attach evidence of authority.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
PREFERRED STOCK PROXY CARD
LOGIMETRICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, APRIL 9, 1998
The undersigned hereby revokes any prior proxy and appoints Charles S.
Brand, Norman M. Phipps and Erik S. Kruger, and each of them, attorneys and
proxies with power of substitution, to vote for and on behalf of the undersigned
at the LogiMetrics, Inc. Annual Meeting of Stockholders to be held on April 9,
1998 and at any adjournments or postponements thereof (the "Meeting"), upon the
following matters and upon any other business that may properly come before the
Meeting, as set forth in the related Notice of Meeting and Proxy Statement, both
of which have been received by the undersigned.
This proxy, when properly executed, will be voted in the manner directed by
the undersigned stockholder. If this proxy is executed but no direction is made,
this proxy will be voted FOR each of the Proposals.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS.
(CONTINUED, AND TO BE DATED AND SIGNED, ON THE OTHER SIDE)
<PAGE>
PLEASE MARK BOXES [ ] IN BLUE OR BLACK INK
4. Proposal to increase the authorized capital stock of the Company
For [ ] Against [ ] Abstain [ ]
5. Proposal to amend the terms of the Series A Preferred Stock
For [ ] Against [ ] Abstain [ ]
If you have noted an address change or comments on either side of this card,
mark here: [ ]
Dated: _________________________, 1998
- -------------------------------------
Please sign this proxy and return it promptly whether or not you expect to
attend the Meeting. You may nevertheless vote in person if you attend.
Please sign exactly as your name appears hereon. Give full title if an Attorney,
Executor, Administrator, Trustee, Guardian, etc.
For an account in the name of two or more persons, each should sign, or if one
signs, he or she should attach evidence of authority.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
EXHIBIT A
PROPOSAL THREE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION TO EFFECT
REVERSE STOCK SPLIT
Alternative A (if Proposal Four, the Amendment of the Certificate of
Incorporation to Increase the Number of Authorized Shares of
Capital Stock, is adopted and effected):
"The first paragraph of Article FOURTH of the Certificate of Incorporation,
as amended, of LogiMetrics, Inc. is hereby amended to read in its entirety as
follows:
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 40,000,000 shares, of which
35,000,000 shares are designated as Common Stock, having a par value
of $.01 per share ("Common Stock"), and 5,000,000 shares are
designated as Preferred Stock, $.01 par value per share ("Preferred
Stock"). Effective at 11:58 p.m. (the "Effective Time") on ________,
1998 (the "Effective Date"), each ten (10) shares of authorized Common
Stock issued and outstanding or held in the treasury of the
Corporation immediately prior to the Effective Time shall
automatically be reclassified and changed into one (1) validly issued,
fully paid and nonassessable share of Common Stock (a "New Share").
Each holder of record of shares of Common Stock so reclassified and
changed shall at the Effective Time automatically become the record
owner of the number of New Shares as shall result from such
reclassification and change. Each such record holder shall be entitled
to receive, upon the surrender of the certificate or certificates
representing the shares of Common Stock so reclassified and changed at
the office of the transfer agent of the Corporation in such form and
accompanied by such documents, if any, as may be prescribed by the
transfer agent of the Corporation, a new certificate or certificates
representing the number of New Shares of which he or she is the record
owner after giving effect to the provisions of this Article FOURTH.
The Corporation shall not issue fractional New Shares. Stockholders
entitled to receive fractional New Shares shall receive, in lieu
thereof, cash in an amount equal to the product of (a) the number of
shares of the Common Stock held by such holder immediately prior to
the Effective Time which have not been classified into a whole New
Share, (b) multiplied by the average of the bid and offer prices per
share of the Common Stock on the last day prior to the Effective Date
on which such prices were published by the OTC Bulletin Board.
Alternative B (if Proposal Four, the Amendment of the Certificate of
Incorporation to Increase the Number of Authorized Shares of Capital Stock,
is NOT adopted and effected):
"The first paragraph of Article FOURTH of the Certificate of Incorporation,
as amended, of LogiMetrics, Inc. is hereby amended to read in its entirety as
follows:
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 10,000,200 shares, of which
10,000,000 shares are designated as Common Stock, having a par value
of $.01 per share ("Common Stock"), and 200 shares are designated as
Preferred Stock, $.01 par value per share ("Preferred Stock").
Effective at 11:58 p.m. (the "Effective Time") on _________, 1998 (the
"Effective Date"), each ten (10) shares of authorized Common Stock
issued and outstanding or held in the treasury of the Corporation
immediately prior to the Effective Time shall automatically be
reclassified and changed into one (1) validly issued, fully paid and
nonassessable share of Common Stock (a "New Share"). Each holder of
record of shares of Common Stock so reclassified and changed shall at
the Effective Time automatically become the record owner of the number
of New Shares as shall result from such reclassification and change.
Each such record holder shall be entitled to receive, upon the
surrender of the certificate or certificates representing the shares
of Common Stock so reclassified and changed at the office of the
transfer agent of the Corporation in such form and accompanied by such
documents, if any, as may be prescribed by the transfer agent of the
Corporation, a new certificate or certificates representing the number
of New Shares of which he or she is the record owner after giving
effect to the provisions of this Article FOURTH. The Corporation shall
not issue fractional New Shares. Stockholders entitled to receive
fractional New Shares shall receive, in lieu thereof, cash in an
amount equal to the product of (a) the number of shares of the Common
Stock held by such holder immediately prior to the Effective Time
which have not been classified into a whole New Share, (b) multiplied
by the average of the bid and offer prices per share of the Common
Stock on the last day prior to the Effective Date on which such prices
were published by the OTC Bulletin Board.
<PAGE>
EXHIBIT B
PROPOSAL FOUR
AMENDMENT OF CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF CAPITAL STOCK
Alternative A (if Proposal Three, the Reverse Split Amendment, is adopted
and effected):
"The first paragraph of Article FOURTH of the Certificate of Incorporation,
as amended, of LogiMetrics, Inc. is hereby amended to read in its entirety as
follows:
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 40,000,000 shares, of which
35,000,000 shares are designated as Common Stock, having a par value
of $.01 per share ("Common Stock"), and 5,000,000 shares are
designated as Preferred Stock, $.01 par value per share ("Preferred
Stock")."
Alternative B (if Proposal Three, the Reverse Split Amendment, is NOT
adopted and effected):
"The first paragraph of Article FOURTH of the Certificate of Incorporation,
as amended, of LogiMetrics, Inc. is hereby amended to read in its entirety as
follows:
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is 355,000,000 shares, of which
350,000,000 shares are designated as Common Stock, having a par value
of $.01 per share ("Common Stock"), and 5,000,000 shares are
designated as Preferred Stock, $.01 par value per share ("Preferred
Stock")."
