<PAGE>
CURTIS MATHES HOLDING CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held October 9, 1997
To the Shareholders of CURTIS MATHES HOLDING CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders
of Curtis Mathes Holding Corporation, a Texas corporation, (the
"Company"), will be held at La Quinta Inn, 14925 Landmark Boulevard,
Addison, Texas 75240 on October 9, 1997, at 4:30 P.M., Texas time, for
the following purposes:
1. To elect directors to serve until the next Annual Meeting of
Shareholders or until their respective successors are elected
and qualified;
2. To ratify and approve the appointment of King Griffin & Adamson
P.C., formerly known as King, Burns & Company, P.C., as
independent auditors for the Company for fiscal year ended June
30, 1997;
3. To transact such other business as may properly come before the
meeting or any postponements or adjournments thereof (the
"Annual Meeting.")
Only those Shareholders of record at the close of business on August
29, 1997 will be entitled to receive notice of, and vote at the meeting.
Your attention is called to the enclosed Proxy Statement.
By Order of the Board of Directors,
/s/ Billy J. Robinson
Billy J. Robinson
Secretary
Dallas, Texas
September 4, 1997
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CURTIS MATHES HOLDING CORPORATION
10911 Petal Street
Dallas, Texas 75238
(214 503-8880
PROXY STATEMENT
Annual Meeting of Shareholders
October 9, 1997
INTRODUCTION
This Proxy Statement and the accompanying form of proxy are first
being mailed to shareholders of Curtis Mathes Holding Corporation (the
"Company") on or about September 3, 1997, in connection with the
solicitation of proxies on behalf of the Board of Directors for use at
the Annual Meeting of Shareholders of the Company (the "Annual Meeting")
to be held on Thursday, October 9, 1997, at La Quinta Inn, 14925 Landmark
Boulevard, Addison, Texas 75240 commencing at 4:30 P.M., Dallas time, and
any postponement or adjournment thereof.
The Company's Annual Report on Form 10-K, without exhibits,
accompanies this Proxy Statement. The Company will furnish a copy of any
exhibit upon payment of the Company's reasonable expenses in furnishing
such exhibit. Requests for a copy of any exhibit should be addressed to:
Billy J. Robinson, Corporate Secretary, Curtis Mathes Holding
Corporation, 10911 Petal Street, Dallas, Texas 75238.
PROXY SOLICITATION
When proxies in the accompanying form are properly executed and
returned, the shares that they represent will be voted at the Annual
Meeting in accordance with the instructions marked thereon. Executed but
unmarked proxies will be voted FOR the election of the nominee for
director named in the proxy, FOR the proposal to amend the Company's
Articles of Incorporation, and FOR the proposal to ratify and approve the
appointment of King Griffin & Adamson P.C., formerly known as King, Burns
& Company, P.C., as independent auditors of the Company for its fiscal
year ended June 30, 1997. If any other matters are properly brought
before the Annual Meeting, the persons named in the accompanying proxy
will vote the shares represented by such proxy in accordance with their
judgment on those matters. The persons named as proxies in the
accompanying form of proxy were selected by the Board of Directors.
Any shareholder giving a proxy has the power to revoke it at any
time by written notice given to and received by the Secretary of the
Company prior to the Annual Meeting, or any postponement or adjournment
thereof, or upon request if the shareholder is present at the Annual
Meeting and chooses to vote in person. Whether or not you plan to attend
the Annual Meeting, please sign and date the enclosed proxy and return it
promptly in the accompanying envelope in order to be sure that your
shares will be voted at the Annual Meeting.
The Company is making the solicitation of proxies and will bear the
expense. In addition to the solicitation of proxies by mail,
solicitation may be made by directors, officers and employees of the
Company by telephone, telecopy, telegraph or in person. No additional
compensation will be paid to such persons for the solicitation of
proxies. To solicit proxies, the Company also will request the
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assistance of banks, brokerage houses and other custodians, nominees and
fiduciaries and, upon request, will reimburse such organizations or
individuals for their reasonable expenses in forwarding soliciting
materials to their principals and in obtaining authorization for the
execution of proxies.
VOTING SECURITIES AND RECORD DATE
Only holders of record of shares of the common stock, $0.01 par
value, of the Company (the "Common Stock") as of the close of business on
August 29, 1997 (the "Record Date") are entitled to notice of and to vote
at the Annual Meeting. As of the close of business on the Record Date,
there were 40,612,279 shares of the Common Stock issued and outstanding.
The Common Stock is the only class of voting securities of the Company
issued and outstanding. Each shareholder of record in this class at the
close of business on the Record Date is entitled at the Annual Meeting to
one vote for each share of the Common Stock held. As provided in the
Company's Articles of Incorporation, there is no cumulative voting.
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table and the notes thereto set forth certain
information with respect to the beneficial ownership of shares of the
Common Stock, as of the Record Date, by the directors of the Company, by
the executive officers of the Company named in the table under "Summary
Compensation Table," by a shareholder known to the Company to own
beneficially more than five percent of the outstanding shares of the
Common Stock , and by all directors and executive officers of the Company
as a group. Each of the persons listed in the following table has sole
voting and investment power as to all shares indicated except as set
forth in the notes to the table.
Number of Shares
Name and Address Amount and Nature Percent
of Beneficial Owner of Beneficial Ownership of Class
5% Beneficial Owners
Patrick A. Custer 2,498,615(1) 6.13%
P. O. Box 802808
Dallas, Texas 75380-2808
D. Ronald Allen 2,010,165(2) 4.75%
10911 Petal Street, Suite 105
Dallas, TX 75238
Custer Company, Inc. 2,026,515(3) 4.98%
P.O. Box 802808
Dallas, TX 75380-2808
Geninvest, S.A. 3,627,333(4) 8.20%
c/o Lewis D. Rowe, Director
P.O. Box 1561
Zephyr House, Mary Street,
Grand Cayman, British West Indies
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Directors
Patrick A. Custer 2,498,615(1) 6.13%
Edward M. Warren 227,500(5) 0.56%
Billy J. Robinson 102,500(6) 0.25%
Bernard S. Appel 75,000(7) 0.18%
Executive Officers
Patrick A. Custer 2,498,615(1) 6.13%
Billy J. Robinson 102,500(6) 0.25%
All Directors and Executive
Officers as a Group 3,075,715(8) 7.50%
(1) Includes 175,000 shares owned outright by Mr. Custer; 50,000 shares
issuable to Mr. Custer upon exercise of vested nonstatutory Employee
Stock Options; 1,906,515 shares held of record by Custer Company,
Inc., a family trust, over which Mr. Custer exercises voting
control; 120,000 shares issuable to Custer Company, Inc. upon
exercise of warrants; 237,500 shares owned by his wife; 9,400 shares
held by his wife for the benefit of his minor daughter; and 100
shares each owned by his two sons.
(2) Includes 120,000 shares owned by Winterstone Management Company,
which is controlled by Mr. Allen; 149,365 shares owned outright, and
805,600 shares issuable upon exercise of warrants held by Associates
Funding Group, Inc., which is controlled by Mr. Allen; and 935,200
shares issuable upon exercise of warrants held by QAG, Inc., which
is controlled by Mr. Allen.
(3) Includes 120,000 shares issuable upon exercise of warrants.
(4) Issuable upon exercise of warrants.
(5) Includes 202,500 shares owned outright, and 25,000 shares issuable
to Mr. Warren upon exercise of stock options.
(6) Includes 65,000 shares owned outright, and 37,500 shares issuable to
Mr. Robinson upon exercise of vested nonstatutory Employee Stock
Options. Shares are held in escrow to be earned over four year term
of employment, but over which Mr. Robinson has voting rights.
(7) Includes 50,000 shares owned outright, and 25,000 shares issuable to
Mr. Appel upon exercise of stock options.
(8) Includes 2,903,615 shares beneficially owned by all directors. Also
includes 15,000 shares owned outright, and 57,500 shares issuable to
Mr. Richardson upon exercise of vested nonstatutory Employee Stock
Options. Also includes 10,000 shares owned outright, and 51,100
shares issuable to Mr. Park upon exercise of vested nonstatutory
Employee Stock Options. Also includes 1,000 shares owned outright,
and 37,500 shares issuable to Mr. O'Mara upon exercise of vested
nonstatutory Employee Stock Options.
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ELECTION OF DIRECTORS
Four directors are to be elected at the Annual Meeting to hold
office until the next annual meeting of shareholders or until their
respective successors are duly elected and qualified. All of the
nominees are currently directors of the Company.
The Board of Directors' nominees for the office of director are as
follows:
Name Age Position Held With the Company
Patrick A. Custer(1) 48 Chairman of the Board, President
and Chief Executive Officer
Billy J. Robinson 49 Director, Vice President,
Secretary and General Counsel
Edward M. Warren(1) 56 Director
Bernard S. Appel(1) 65 Director
____________________
(1) Member of the Audit Committee.
Nominees for Director
Patrick A. Custer, 48, is the Chairman of the Board, President and
Chief Executive Officer of the Company. Mr. Custer served as a director
of the Company from 1984 to 1985, and from 1987 until the present. He
served as President and Chief Executive Officer of the Company from 1984
to 1985 and from September, 1992 until the present. From 1986 until
1990, Mr. Custer was an international business consultant for Park
Central Funding (Guernsey), Ltd. From 1978 until 1982, Mr. Custer was a
general securities principal and worked for a major brokerage firm as a
corporate finance specialist and was owner of his own brokerage firm. He
was responsible for structuring and funding IPO's, real estate, energy
companies, and numerous high-tech start-up companies. Mr. Custer is a
graduate of Texas Tech University in Finance and Management, with
additional studies in Electrical Engineering and master studies in
Finance.
Edward M. Warren, 56, has been a director of the Company since
September, 1992. Since 1980, he has been the Registered Principal and
Branch Manager for a major securities firm in Albany New York. He is
also a Financial Consultant, having presented numerous financial seminars
over the years throughout eastern New York and western New England. He
is a co-founder of the Coronado Group, which provides professional
services to the financial community, such as the analysis of economic
and market conditions, review of financial products, exchange of
marketing ideas, and continuing evaluation and recommendation of asset
allocation models. Mr. Warren received his undergraduate degree from
Williams College and holds a Master of Arts degree from Harvard
University.
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Billy J. Robinson, 49, has been a director of the Company since
March, 1994. He has also served as Vice President/ General Counsel of
the Company since October, 1993, and as Secretary of the Company since
June, 1994. Mr. Robinson has over eighteen years legal experience,
representing banks and other financial institutions, with a concentration
in commercial transactions and real estate. Mr. Robinson is admitted to
practice before the United States Supreme Court, the United States
District Court for the Northern District of Texas and the District of New
Mexico, and is licensed to practice before all state courts in Texas and
New Mexico. Mr. Robinson is a certified Mediator in the State of Texas
and is the author of the 1994-95 Real Estate Law Correspondence Course
for the Texas Tech University Paralegal Certification Program.
Bernard S. Appel, 65, has been a director of the Company since
February, 1995. He has enjoyed a career of 34 years with Radio Shack,
holding every key merchandising and marketing position, culminating with
his promotion to president in 1984. In 1992 he was promoted to Chairman
of Radio Shack and Senior Vice President of Tandy Corporation. Since
August, 1993, Mr. Appel has operated the private consulting firm of Appel
Associates, focusing upon consumer electronics product development,
marketing and distribution. He is a director of IRG Technologies, Inc.,
a company with a class of securities registered pursuant to section 12 of
the Exchange Act of 1934.
Executive Officers
F. Shelton Richardson, Jr., 38, has been Vice President/ Chief
Financial Officer of the Company since February, 1995. He has been
strategically involved in the restructuring of the Company from a
commodity manufacturer of consumer electronics products to a
technologically advanced mainstream developer of Internet access
products. In addition, Mr. Richardson has been instrumental in the
design, development and implementation of Curtis Mathes Xpressway, the
Company's largest potential revenue source. From February, 1990 to
February, 1995 he was Chief Financial Officer of Captivision, Inc., a
consulting firm specializing in electronics and telecommunications
ventures. From January, 1987 to February, 1990 he was the Controller for
the law firm of Ryan & Smith. Mr. Richardson holds a Bachelor of Science
degree in Accounting and Taxation from the University of Houston and a
Master of Business Administration from Houston Baptist University.
Thomas W. (Bill) Park, 61, has been Vice President/ Chief Operating
Officer of subsidiary Curtis Mathes Corporation (CMC) since October 3,
1994; has been Vice President/ Chief Operating Officer of subsidiary
Curtis Mathes Marketing Corporation (CMMC) since July 1, 1995; and has
been Vice President/ Chief Operating Officer of subsidiary Curtis Mathes
Xpressway Corporation (CMX) since January 10, 1997. Mr. Park is
responsible for the initial development of product and all phases through
the manufacturing process for the new uniView line of products. The
securing of strategic technological partners is also an important area of
his responsibility. He enjoyed a career of 29 years with CMC, before
leaving in August, 1993 for a position as Vice President of Benelec
Corporation, an international trading company dealing in electronics,
medical supplies, and other products. From August, 1993 until his return
to the company in 1994, Mr. Park continued to make his knowledge and
experience available to CMC as a consultant. During his career with CMC,
he served in various positions with the company, beginning as an Office
Manager/ Cost Accountant in 1964 and culminating as Executive Vice
President in 1985, in which capacity he served until 1993. Mr. Park has
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traveled extensively and maintains valuable business contacts in Europe
and Asia. He holds a Bachelor of Business Administration degree in
Finance from the University of Texas.
Thomas P. O'Mara, 37, joined the Company in August, 1996, and in
April, 1997 was promoted to Vice President/ Sales and Marketing of
subsidiaries Curtis Mathes Marketing Corporation (CMMC) and Curtis Mathes
Xpressway Corporation (CMX), bringing with him more than 14 years of
experience in the consumer electronics industry. Mr. O'Mara is
responsible for management of the Company's domestic and international
sales force. He also oversees all marketing and advertising strategy for
all of the Company's products, including uniView and the Curtis Mathes
Xpressway. In addition, Mr. O'Mara has applied his broad technology
expertise in the actual development, design and execution of uniView and
the Curtis Mathes Xpressway. He also supervises corporate marketing and
communications, channel partner programs, and strategic alliance
programs. Prior to joining the Company, O'Mara was a regional sales
manager for the car electronics division of Pioneer Electronics. During
his 13-year tenure with Pioneer, he was directly involved in sales and
marketing aspects for the majority of all of Pioneer's consumer
electronics products. Mr. O'Mara received a bachelor of business
administration degree in accounting from LaSalle University
(Philadelphia, Pa.).
Transactions with Management and Others
In January 1997 the Company and a limited partnership, CMLP Group,
Ltd., entered into a Joint Venture Agreement relating to the acquisition
and development of certain real estate as the future site of the
Company's corporate offices. The initial capital of the joint venture
consisted of $276,285.27 contributed by CMLP Group, Ltd. and $354,000
contributed by the Company. No further action has been taken in
furtherance of this project. The Company expects to pursue completion of
this project according to the future needs and financial resources of the
Company. Members of CMLP Group, Ltd. include Custer Company, Inc., Billy
J. Robinson, F. Shelton Richardson, Jr., Neal J. Katz, Thomas W. (Bill)
Park, and Thomas P. O'Mara.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the 1934 Act ("Section 16(a)"), requires the
Company's directors, executive officers and persons who beneficially own
more than 10% of a registered class of the Company's equity securities
("10% Owners") to file reports of beneficial ownership of the Company's
securities and changes in such beneficial ownership with the Securities
and Exchange Commission ("Commission"). Directors, executive officers
and 10% Owners are also required by rules promulgated by the Commission
to furnish the Company with copies of all forms they file pursuant to
Section 16(a).
Based solely upon a review of the copies of the forms filed pursuant
to Section 16(a) furnished to the Company, or written representations
that no year-end Form 5 filings were required for transactions occurring
during fiscal year ended June 30, 1997, the Company believes that during
the fiscal year ended June 30, 1997, all Section 16(a) filing
requirements applicable to its directors, executive officers and 10%
Owners were complied with.
<PAGE>
Nominations for Election to the Board of Directors
The Company does not have a nominating committee, The Board of
Directors considers persons who would be eligible or desirable for
membership on the Board of Directors and potential nominees are
solicited. Information is obtained with respect to all such potential
nominees and evaluations are made by the Board of Directors, which then
decides who to nominate for the position of director.
Meetings and Committees of the Board of Directors
During fiscal year ended June 30, 1997, all Board action was taken
by unanimous consent of the Directors, except for action taken in
meetings attended by all directors held on September 19, 1996, October
28, 1996, and May 1, 1997.
The Audit Committee reviews the scope and results of the Company's
annual audit, receives any suggestions from the independent auditors
concerning improvements in the Company's accounting practices and
procedures, and reviews other professional services furnished by the
independent auditors. The Audit Committee is currently comprised of
Patrick A. Custer, Edward M. Warren, and Bernard S. Appel. This
committee met once during the last fiscal year to review and approve the
independent auditors' report for fiscal year ended June 30, 1996. The
members also consulted on an ongoing basis and as necessary during the
last fiscal year.
A compensation advisory committee, consisting of Patrick A. Custer,
Billy J. Robinson, and F. Shelton Richardson, Jr., advises the Board
concerning certain aspects of executive compensation. This committee met
once at the beginning of the last fiscal year to consider compensation
packages for executives and employees.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Summary Compensation Table
The following table summarizes the compensation paid over the last
three completed fiscal years to the Company's Chief Executive Officer and
any other executive officer of the Company who received compensation of
$100,000 or more during the fiscal year ended June 30, 1997.
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<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
All
Other
Name and Year Other Restricted Securities LTIP Compen-
Principal Ended Annual Stock Underlying Payouts sation
Position Jun. 30 Salary($) Bonus($) Compensation($) Award(s)($) Options/SARs(#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Patrick A. Custer 1997 151,310 11,200 12,000 -0- 400,000 -0- -0-
Chairman of the 1996 102,692 -0- 12,000 59,750 -0- -0- -0-
Board and CEO 1995 121,458 -0- 12,308 -0- -0- -0- -0-
Billy J. Robinson 1997 110,481 11,200 27,500 43,625 150,000 -0- -0-
Vice President, 1996 72,981 -0- 27,500 79,475 -0- -0- -0-
General Counsel 1995 83,937 -0- 32,776 43,625 -0- -0- -0-
</TABLE>
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<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
The following table shows all individual grants of stock options to
the named executive officers during the fiscal year ended June 30, 1997.
Grant Date
Individual Grants Value
------------------------------------------------------- ----------
(a) (b) (c) (d) (e) (f)
Number of % of Total
Securities Options/
Underlying SARs
Name and Options/ Granted to Exercise Market Grant
Principal SARs Employees or Base Price on Date
Position Granted in Fiscal Price the Date Expiration Present
(#)(1)(2) Year(2) ($/Sh) of Grant Date Value(3)
<S> <C> <C> <C> <C> <C> <C>
Patrick A. Custer
Chairman of the
Board and CEO 400,000 40% $0.94 $1.34 April 6, 2002 $231,960
Billy J. Robinson
Vice President
and General
Counsel 150,000 15% $0.94 $1.34 April 6, 2002 $ 92,420
</TABLE>
(1) Options have a five-year life, vest in increments over two and one-
half years and are priced at seventy (70%) percent of the average
trading price of the Common Stock, as reported by NASDAQ, for the
five (5) trading days immediately preceding the date of grant.
(2) The Company has not made any grants of SARs.
(3) The options were valued as of April 7, 1997 using the SFAS 123 -
Black Scholes Option Pricing Model, assuming expected volatility of
60%, a 6% risk-free rate of return, 0% dividend yield, and time of
exercise of 4.75 years. (Please refer to Note 11 on page F-30 of
the Notes to Consolidated Financial Statements in this Form 10-K for
further information concerning pricing of options.)
<PAGE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Values
The following table shows aggregate exercises of options (or tandem
stock appreciation rights) and freestanding stock appreciation rights
during the fiscal year ended June 30, 1997 by each of the named executive
officers.
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#)(2) FY-End ($)(2)(3)
Name and Shares Value
Principal Acquired Realized Exercisable (E)/ Exercisable/
Position on Exercise ($)(1) Unexercisable (U) Unexercisable
- -------- ----------- ------ ----------------- -------------
Patrick A. Custer
Chairman of the 50,000 7,000 50,000 (E) --
Board and CEO 300,000 (U) --
Billy J. Robinson
Vice President
and General 37,500 (E) --
Counsel -- -- 112,500 (U) --
(1) Amount shown is based upon the average of the closing bid and
closing asked price per share of the Company's Common Stock on the
Nasdaq SmallCap Market on the date of exercise, June 13, 1997, which
was $1.08.
(2) The Company has not made any grants of SARs.
(3) On June 30, 1997 the options were not considered "in-the-money," as
the fair market value of the underlying securities on that date
($0.89) did not exceed the exercise price of the options.
Compensation of Directors
None of the inside directors are paid compensation as such, except
for services performed in another capacity, such as an executive officer
of the Company. The outside directors of the Company are paid $500 per
meeting, plus their expenses for attending Board of Director meetings.
The Company additionally granted each of the two outside directors stock
options to purchase 75,000 shares of Common Stock of the Company. The
options have a five-year life, vest in increments over two years and are
priced at seventy (70%) percent of the average trading price of the
Common Stock, as reported by NASDAQ, for the five (5) trading days
immediately preceding the date of grant. The exercise price of the
options is $0.94 per share and the market price of the Common Stock on
the date of grant, April 7, 1997, was $1.34 per share.
<PAGE>
Compensation Committee Interlocks and Insider Participation
Mr. Custer, Mr. Robinson, and Mr. Richardson participated in
advising the Company's Board of Directors concerning certain aspects of
executive officer compensation during the last completed fiscal year.
Mr. Custer is Chairman of the Board, President and Chief Executive
Officer of the Company; Mr. Robinson is Vice President, Secretary,
General Counsel, and a Director; and Mr. Richardson is Vice President,
Chief Financial Officer.
Board of Directors Report on Executive Compensation
Executive Compensation
The Company has structured its executive compensation program within
the financial framework of the Company with a goal of attracting and
retaining high-quality executive talent. The executive compensation
program consists generally of base salary and employee benefits. The
Company reviews its compensation programs periodically and compares its
pay practices with other similar companies and with companies staffed
with similarly-skilled executives. During the first fiscal quarter of
each year, the Company reviews salary increases for the current year and,
considering the Company's financial performance and each executive
officer's perceived contribution to that performance, salaries are set
accordingly.
Chief Executive Officer
For the year ended June 30, 1997, Mr. Custer received $174,510 and
nonstatutory employee stock options, the vested portion of which was
valued at $47,119, for his services as President and Chief Executive
Officer of the Company. The factors the Company considered in setting
his compensation include Mr. Custer's leadership in restructuring the
Company, his contribution to the strategic focus and financial
positioning of the Company, and included a consideration of his
responsibilities, experience, and skills.
Patrick A. Custer (Chairman) Billy J. Robinson
Edward M. Warren F. Shelton Richardson, Jr.
Bernard S. Appel
The foregoing report is not incorporated by reference in any
prior or future filings of the Company under the Securities Act of 1933,
as amended (the "1933 Act"), or under the Securities Exchange Act of
1934, as amended (the "1934 Act"), unless the Company specifically
incorporates the report by reference and the report shall not otherwise
be deemed filed under such Acts.
Performance Graph
The following graph compares total stockholder returns of the
Company since December 31, 1992 to two indices: a Composite Market Index
which includes the NASDAQ Market (the "Broad Market") and the companies
classified under S.I.C. code 3651 for consumer electronics (Household
Audio and Video Equipment) (the "Industry Index"). The total return for
the Company's stock and for each index assumes the reinvestment of
dividends, although dividends have never been declared on the Company's
stock. The Broad Market tracks the aggregate price performance of equity
securities of all companies traded on the various exchanges, including
<PAGE>
the NASDAQ Market. The Industry Index tracks the aggregate price
performance of equity securities of companies traded on the various
exchanges, including the NASDAQ Market, which are grouped under S.I.C.
code 3651 for consumer electronics (Household Audio and Video Equipment.)
The graph should be viewed in the context of the disposition of
Southwest Memory, Inc. by the Company during fiscal year ended June 30,
1995, the reduction in the commodity business operations of the Curtis
Mathes Corporation subsidiary during fiscal year ended June 30, 1996, and
the introduction during fiscal year ended June 30, 1997 of the Company's
technologically advanced Internet access products, the Curtis Mathes
uniViewT and the Curtis Mathes XpresswayT Internet Service Provider and
Online Service. Accordingly, the indications of the graph may not
necessarily indicate future performance of the Company.
1/1/93 6/30/93 6/30/94 6/30/95 6/30/96 6/30/97
Curtis 100.00 200.00 576.00 138.00 276.00 182.00
Mathes
SIC Code 100.00 120.64 179.75 148.15 182.14 213.06
NASDAQ 100.00 111.94 122.75 143.96 181.22 218.30
Market
For a meaningful comparison of the Company's stock performance with that
of similar companies, December 31, 1992 was chosen as the beginning date
for the comparison. Characterization of the primary business activity of
the Company as consumer electronics began with the acquisition of
Southwest Memory, Inc. in December, 1992. Before then, the Company was
essentially dormant and comparison of the performance of its stock before
that date would have limited application.
The foregoing graph is not incorporated in any prior or future
filings of the Company under the 1933 Act or the 1934 Act, unless the
Company specifically incorporates the graph by reference, and the graph
shall not otherwise be deemed filed under such Acts.
INDEPENDENT PUBLIC ACCOUNTANTS
Current Appointment
King Griffin & Adamson P.C., formerly known as King, Burns &
Company, P.C., has been appointed to serve as the principal accountant
for the current year, subject to ratification of such appointment by the
shareholders. King Griffin & Adamson P.C. has served as the Company's
independent public accountants since October, 1994.
A representative of King Griffin & Adamson, P.C. is expected to be
present at the shareholders meeting and will have an opportunity to make
a statement if they desire to do so and are expected also to be available
to respond to appropriate questions.
QUORUM AND REQUIRED VOTE
A majority of the issued and outstanding shares of Common Stock,
represented in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting. An affirmative vote of a
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majority of the shareholders represented in person or by proxy at a
meeting at which a quorum is present is required for approval of a matter
or for election of a director. Voting will be by written ballot.
Under Texas law and under the Company's Articles of Incorporation
and Bylaws, shares of the Common Stock represented in person or by proxy
at the Annual Meeting which abstain from voting on any matter are
considered as being represented at the Annual Meeting and entitled to
vote on that matter. Such shares are therefore counted for the purpose
of establishing a quorum and also for establishing the minimum number of
votes required to approve any matter. As a result, such an abstention
from voting has the same legal effect as a vote "AGAINST" the matter even
though the shareholder or interested parties analyzing the results of the
voting may interpret such a vote differently. "Broker non-votes" and
proxies that simply withhold the authority to vote are not considered as
being represented at the Annual Meeting and are therefore not counted in
establishing a quorum or the minimum number of votes required to approve
any matter.
DATE OF SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal for action at the
next annual meeting of shareholders must forward a copy of such proposal
to the Secretary of the Company. Any such proposal must be received by
the Company for inclusion in its proxy statement and form of proxy
relating to that meeting by May 19, 1998. Shareholder proposals may be
excluded from the Company's proxy statement pursuant to Rule 14a-8
promulgated under the Securities Exchange Act of 1934, as amended,
provided certain conditions are met.
OTHER MATTERS
Management of the company does not know of any other matters to be
presented for action by the shareholders at the Annual Meeting. If,
however, any other matters not now known are properly brought before the
meeting, the persons named in the accompanying proxy will vote such proxy
in accordance with their own judgment on such matters.
ALL PROXIES IN THE ACCOMPANYING FORM PROPERLY EXECUTED WILL BE VOTED
IN THE MANNER DIRECTED BY SHAREHOLDERS. IF NO DIRECTION IS GIVEN, SUCH
PROXIES PROPERLY EXECUTED WILL BE VOTED "FOR" ALL NOMINEES AND "FOR" ALL
PROPOSALS SET FORTH HEREIN.
By Order of the Board of Directors,
/s/ Billy J. Robinson
Billy J. Robinson
Secretary
September 4, 1997
Dallas, Texas
<PAGE>
ADDENDUM - FORM OF PROXY
CURTIS MATHES HOLDING CORPORATION
PROXY SOLICITED BY DIRECTORS FOR ANNUAL MEETING
October 9, 1997
The undersigned, having received the Notice of Annual Meeting, Proxy
Statement, and Annual Report on Form 10-K for the year ended June 30,
1997, hereby appoint(s) Neal J. Katz and Thomas W. (Bill) Park and each
of them, proxies to represent the undersigned, with full power of
substitution, at the Annual Meeting of Shareholders of Curtis Mathes
Holding Corporation, to be held on Thursday, October 9, 1997, at 4:30
P.M., Dallas time, at La Quinta Inn, 14925 Landmark Boulevard, Addison,
Texas 75240 and at any and all postponements or adjournments thereof:
The directors recommend a vote FOR the election of all nominees
and a vote FOR all of the proposals.
1. Election of Directors: Patrick A. Custer, Edward M. Warren,
Billy J. Robinson, and Bernard S. Appel
FOR all nominees listed above [ ] WITHHOLD AUTHORITY [ ]
(except as marked to the contrary above) to vote for all
nominees listed above
Instruction: To withhold authority to vote for any individual nominee,
strike a line through the name of nominee in the list above. Unless
authority to vote for all the foregoing nominees is withheld, this proxy
will be deemed to confer authority to vote for every nominee whose name
is not struck.
2. To ratify the appointment of King Griffin & Adamson P.C., formerly
known as King, Burns & Company, P.C., as the Company's independent
auditors for the fiscal year ended June 30, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion, the proxies are authorized to vote upon such
other business that may properly come before the meeting.
Unless otherwise specified in the squares provided, the proxies
shall vote FOR the election of all of the nominees listed in Proposal #1
above, and FOR Proposal #2.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
(continued and to be signed on reverse side.)
<PAGE>
(continued from other side)
Please sign exactly as name appears below.
Dated: ________________________
When shares are held by joint tenants,
both should sign. When signing as
attorney, executor, administrator,
trustee or guardian please give full
title as such. If a corporation,
please sign in full corporate name by
President or other authorized person.
If a partnership, please sign in full
partnership name by authorized person.
______________________________
(Signature)(Title)
______________________________
(Signature if held jointly)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
