<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
OSBORN COMMUNICATIONS CORP.
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
OSBORN COMMUNICATIONS CORPORATION
April 11, 1995
TO OUR STOCKHOLDERS:
On behalf of the Board of Directors and Management, I invite you to attend
the Annual Meeting of Stockholders of Osborn Communications Corporation to be
held on Tuesday, May 16, 1995 at 10:00 a.m. Eastern Time, at the offices of
Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, 24th
Floor, New York, New York.
The Notice of Meeting and Proxy Statement accompanying this letter describe
the specific business to be acted upon.
In addition to the specific matters to be acted upon, there will be a
report on the progress of the Company and an opportunity for questions of
general interest to the stockholders.
It is important that your shares be represented at the Annual Meeting.
Whether or not you plan to attend in person, please sign, date and promptly
return the enclosed proxy in the envelope provided. If you later decide to
attend the Annual Meeting, you may revoke your proxy and vote in person.
Sincerely yours,
/s/ Frank D. Osborn
Frank D. Osborn
President
<PAGE> 3
OSBORN COMMUNICATIONS CORPORATION
130 MASON STREET
GREENWICH, CONNECTICUT 06830
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1995
Notice is hereby given that the Annual Meeting of Stockholders of Osborn
Communications Corporation (the "Company") will be held on Tuesday, May 16, 1995
at 10:00 a.m., Eastern Time, at the offices of Paul, Weiss, Rifkind, Wharton &
Garrison, 1285 Avenue of the Americas, 24th Floor, New York, New York (the
"Meeting") for the following purposes:
1. To elect six directors of the Company to serve until the Company's
next annual meeting and until their respective successors are elected
and qualified;
2. To ratify the selection of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 1995; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Holders of the Company's common stock of record at the close of business on
March 27, 1995 are entitled to notice of and to vote at the Meeting.
For the ten-day period immediately prior to the Meeting, the list of
stockholders entitled to vote at the Meeting will be available for inspection at
the offices of the Company, located at 130 Mason Street, Greenwich, Connecticut,
for such purposes as are set forth in the General Corporation Law of the State
of Delaware.
By Order of the Board of Directors
/s/ Michael F. Mangan
Michael F. Mangan
Secretary
Dated: April 11, 1995
IMPORTANT
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES, AS PROMPTLY AS POSSIBLE. YOUR PROXY WILL BE
REVOCABLE, EITHER IN WRITING OR BY VOTING IN PERSON AT THE MEETING, AT ANY TIME
BEFORE ITS EXERCISE.
<PAGE> 4
OSBORN COMMUNICATIONS CORPORATION
130 MASON STREET
GREENWICH, CONNECTICUT 06830
PROXY STATEMENT
INFORMATION CONCERNING THE SOLICITATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the board of directors (the "Board of Directors" or the "Board") of
Osborn Communications Corporation (the "Company") to be used at the Annual
Meeting of the Company's Stockholders (the "Meeting") to be held on Tuesday, May
16, 1995 at 10:00 a.m., Eastern Time, at the offices of Paul, Weiss, Rifkind,
Wharton & Garrison, 1285 Avenue of the Americas, 24th Floor, New York, New York,
and at any adjournments thereof for the purposes set forth in the accompanying
Notice of Annual Meeting. It is expected that this Proxy Statement and the form
of proxy are being mailed to stockholders on or about April 11, 1995.
Holders of the Company's common stock, par value $0.01 per share (the
"Common Stock"), entitled to vote are urged to sign the enclosed form of proxy
and return it promptly in the envelope enclosed for that purpose. Proxies will
be voted in accordance with such holders' directions. If no directions are
given, proxies will be voted "FOR" the election as directors of the nominees
named herein; "FOR" the ratification of the selection of Ernst & Young LLP as
the Company's independent auditors for the year ending December 31, 1995; and by
the persons named in the proxy on any other matter which may properly come
before the Meeting. The Board of Directors knows of no other business to be
presented at the Meeting.
The proxy may be revoked at any time prior to the voting thereof by written
notice of revocation to the Company at 130 Mason Street, Greenwich, Connecticut
06830, Attention: Michael F. Mangan, Vice President -- Controller and Secretary.
The proxy may also be revoked by submission to the Company of a more recently
dated proxy or by attending the Meeting and voting in person. Shares as to which
a broker indicates it has no discretion to vote, and which are not voted, will
be considered not present at the Meeting for the purpose of determining the
presence of a quorum and as unvoted for approving the election of directors and
for approving the ratification of the selection of Ernst & Young LLP as the
Company's independent auditors. Proxies marked as abstaining on any matters to
be acted on by the stockholders will be treated as present at the Meeting for
purposes of determining a quorum but will not be counted as votes cast on such
matters. The votes of stockholders present in person or represented by proxy at
the Meeting will be tabulated by an inspector of elections appointed by the
Company. The inspector's duties include determining the number of shares
represented at the Meeting, counting all votes and ballots and certifying the
determination of the number of shares represented and the outcome of the
balloting.
The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors. The entire cost of soliciting these proxies, including the
costs of preparing, printing and mailing to stockholders this Proxy Statement
and accompanying materials, will be borne by the Company. In addition to use of
the mails, proxies may be solicited personally or by telephone or telegraph by
officers, directors and employees of the Company, who will receive no additional
compensation for such activities. Arrangements will also be made with brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation
materials to the beneficial owners of shares held of record by such persons.
Such parties will be reimbursed for their reasonable expenses incurred in such
connection.
OUTSTANDING VOTING SECURITIES
Only holders of record of the Common Stock at the close of business on
March 27, 1995 (the "Record Date") are entitled to notice of and to vote at the
Meeting. On that date there were 5,252,688 shares of Common Stock outstanding.
Each share of Common Stock is entitled to one vote. Accordingly, a total of
5,252,688 votes are entitled to be cast on each matter submitted to a vote at
the Meeting. A third of such shares, present in person or represented by proxy
at the Meeting, will constitute a quorum for the transaction of business at the
Meeting. The affirmative vote of a plurality of the shares of Common Stock cast
by the
<PAGE> 5
stockholders present or represented by proxy at the Meeting is required to elect
the nominees for election as directors of the Company at the Meeting. Under
Delaware law and the Company's Restated Certificate of Incorporation and
By-laws, abstentions will have no effect on the outcome of the vote for the
election of directors. Broker non-votes will not be considered present at the
Meeting and will have no effect on the vote. In the event that a broker that is
a record holder of shares of Common Stock does not return the signed proxy, the
shares of Common Stock represented by such proxy will not be considered present
at the Meeting and, therefore will not be counted towards the quorum.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 22, 1995, certain information
with respect to each person known to the Company to own beneficially (as such
term is used in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), more than five percent of its Common Stock. In accordance
with the rules promulgated by the Securities and Exchange Commission, such
ownership includes shares currently owned as well as shares which the named
person has the right to acquire within 60 days, including, but not limited to,
shares which the named person has the right to acquire through the exercise of
any option, warrant or right, or through the conversion of a security.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
-------------------------------------------------------- ----------------------- --------
<S> <C> <C>
Spears, Benzak, Salomon & Farrell....................... 1,996,567(1) 38.0%
45 Rockefeller Plaza
New York, NY 10111
</TABLE>
- ---------------
(1) Spears, Benzak, Salomon & Farrell, a registered investment advisor, has
publicly reported that such shares are held for the benefit of various of
its clients; that it has revocable shared dispositive power with such
clients; and that, except in circumstances required by law or contract, it
has no power to vote or direct the vote of such shares.
The following table sets forth beneficial ownership of the Common Stock as
of March 22, 1995 with respect to (i) each director of the Company, (ii) each
executive officer named in the Summary Compensation Table under "Executive
Compensation," and (iii) all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
NAME OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP OF CLASS
- ---------------------------------------------------------------- ----------------------- --------
<S> <C> <C>
Frank D. Osborn................................................. 496,775(1) 9.2%
Brownlee O. Currey, Jr.......................................... 182,015(2) 3.5%
H. Anthony Ittleson............................................. 37,497(3) *
Edward G. Nelson................................................ 55,954(4) 1.1%
William G. Spears............................................... 27,780(5) *
Robert K. Zelle................................................. 153,300 2.9%
Thomas S. Douglas............................................... 20,667(6) *
W. Charles Hillebrand........................................... 25,542(7) *
Directors and Executive Officers as a Group (9 Persons)......... 1,001,247(8) 18.8%
</TABLE>
- ---------------
* Less than 1%
2
<PAGE> 6
(1) Includes 154,167 shares of Common Stock subject to stock options exercisable
within the 60 day period beginning March 22, 1995. Includes 34,455 shares of
Common Stock held in custodial accounts for the benefit of Mr. Osborn's
children.
(2) Includes 32,015 shares of Common Stock held in a trust, beneficial ownership
of which shares of Common Stock he disclaims.
(3) Includes 35,997 shares of Common Stock held in trusts and 1,500 shares of
Common Stock held by Mr. Ittleson's wife, beneficial ownership of which
shares of Common Stock he disclaims.
(4) Includes 49,704 shares of Common Stock held by affiliates of Mr. Nelson.
Also includes 750 shares of Common Stock held by Mr. Nelson's wife, and
5,500 shares of Common Stock held in trust for Mr. Nelson's sister-in-law,
beneficial ownership of which shares of Common Stock he disclaims.
(5) Includes 7,937 shares of Common Stock held by Mr. Spears' wife, beneficial
ownership of which shares of Common Stock he disclaims. Mr. Spears is
Chairman of Spears, Benzak, Salomon & Farrell which holds 38.0% of the
Company's Common Stock.
(6) Includes 6,667 shares of Common Stock subject to stock options exercisable
within the 60 day period beginning March 22, 1995. Also includes 4,500
shares of Common Stock held by Mr. Douglas' wife, beneficial ownership of
which shares of Common Stock he disclaims.
(7) Consists of 25,542 shares of Common Stock subject to stock options
exercisable within the 60 day period beginning March 22, 1995.
(8) Includes 188,043 shares of Common Stock subject to stock options exercisable
within the 60 day period beginning March 22, 1995.
3
<PAGE> 7
EXECUTIVE COMPENSATION
The following table sets forth the cash and noncash compensation awarded
during the fiscal years ended December 31, 1994, December 31, 1993 and December
31, 1992, earned by or paid to the Chief Executive Officer of the Company and
the two other most highly compensated executive officers of the Company for
services rendered in all capacities to the Company and its subsidiaries.
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL NUMBER OF
COMPENSATION SECURITIES
NAME AND ------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(2) COMPENSATION
- --------------------------------------- ----- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Frank D. Osborn........................ 1994 $366,995 $100,000(3) -- $116,000(4)
President and 1993 365,910 20,900 162,500(5) --
Chief Executive Officer 1992 316,640 51,850 -- --
Thomas S. Douglas...................... 1994 $172,500 $ 50,000(6) 60,000 --
Senior Vice President -- 1993 -- -- -- --
Finance and Treasurer 1992 -- -- -- --
W. Charles Hillebrand.................. 1994 $107,500 $ -- 6,250 --
Senior Vice President -- 1993 100,000 40,500 3,500 --
Muzak 1992 91,284 37,500 21,500(7) --
</TABLE>
- ---------------
(1) The columns designated "Restricted Stock Awards," "Other Annual
Compensation" and "LTIP Awards" are not presented, as no compensation
required to be reported under such columns was awarded to, earned by or paid
to any of the named executive officers during the period covered by the
Summary Compensation Table.
(2) Reflects options to acquire shares of Common Stock. No stock appreciation
rights were granted by the Company during the period covered by the table.
(3) Bonus payable in accordance with certain criteria established by the Board
as defined in Mr. Osborn's Employment Agreement.
(4) In December 1994, the Company adopted a non-qualified deferred compensation
plan ("Non-Qualified Deferred Compensation Plan") available to certain
management employees. The plan is unfunded and there are no limits on
deposits or vesting periods. Distribution date is elected at time of
deferral, and money deposited or any interest accrued are deferred until
that time. Mr. Osborn's Employment Agreement provides that the Company pay
$16,000 annually into a retirement benefit arrangement for Mr. Osborn. Mr.
Osborn elected to deposit this amount into the Company's Non-Qualified
Deferred Compensation Plan. In addition, upon the execution of Mr. Osborn's
new Employment Agreement, Mr. Osborn received $100,000 to compensate him for
salary increases that would have become due under his previous employment
agreement.
(5) Reflects 137,500 options which were repriced on May 10, 1993, and 25,000
options granted on May 10, 1993.
(6) Mr. Douglas elected to defer $40,000 of his bonus in 1994 to the Company's
Non-Qualified Deferred Compensation Plan.
(7) Reflects 20,000 options which were repriced on February 21, 1992 and 1,500
options granted on May 12, 1992.
OPTION/SAR GRANTS DURING THE LAST FISCAL YEAR
The following table provides certain information related to options for the
purchase of Common Stock granted to the named executive officers during the
fiscal year ended December 31, 1994. No stock appreciation rights ("SARs") were
granted by the Company in the last fiscal year.
4
<PAGE> 8
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS/SARS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(1)
OPTIONS/SARS EMPLOYEES IN BASE PRICE --------------------------------
NAME GRANTED FISCAL YEAR ($/SHARE) EXPIRATION DATE 0% 5% 10%
- ------------------- ------------ ------------ ----------- ------------------ --- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas S.
Douglas.......... 17,250(2) 15.94% 6.75 January 17, 2004 0 $ 73,227 $ 185,571
2,750(3) 2.54% 6.25 April 21, 2004 0 $ 10,809 $ 27,392
40,000(4) 36.95% 6.13 November 15, 2004 0 $ 154,205 $ 390,786
W. Charles
Hillebrand....... 6,250(5) 5.77% 6.25 May 19, 2004 0 $ 24,566 $ 62,256
</TABLE>
- ---------------
(1) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options prior to the
expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the remaining life of the
options. This schedule does not take into account provisions of certain
options providing for termination of the option following termination of
employment, nontransferability or vesting over periods of up to four years.
The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and therefore
are not intended to forecast possible future appreciation, if any, of the
Company's stock price. The Company did not use an alternative formula for a
grant date valuation, as the Company is not aware of any formula which will
determine with reasonable accuracy a present value based on future unknown
or volatile factors. The column indicating 0% appreciation is included to
reflect the fact that a zero percent gain in stock price appreciation will
result in zero dollars for the optionee. No gain to the optionees is
possible without an increase in stock price appreciation, which will benefit
all stockholders commensurably.
(2) Shares of Common Stock will become exercisable as follows: 5,750 on each of
January 17, 1995, 1996 and 1997.
(3) Shares of Common Stock will become exercisable as follows: 917 on each of
April 21, 1995 and 1996; and 916 on April 21, 1997.
(4) Shares of Common Stock will become exercisable as follows: 10,000 on each of
January 17, 1995 and 1996; and 20,000 on January 17, 1997.
(5) Shares of Common Stock will become exercisable as follows: 2,083 on each of
May 19, 1995 and 1996; and 2,084 on May 19, 1997.
OPTIONS UNEXERCISED AS OF 1994 FISCAL YEAR-END
The following table shows the number of shares of Common Stock represented
by unexercised stock options held by each of the named executive officers as of
December 31, 1994.
Also reported are the values for "in-the-money" options which represent the
positive spread between the exercise price of any such existing stock options
and the year-end price of Common Stock.
5
<PAGE> 9
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS/SAR AT IN-THE-MONEY OPTIONS/SARS AT
FISCAL YEAR-END FISCAL YEAR-END(1)
------------------------------- -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Frank D. Osborn.................... 145,834 16,666 $510,419.00 $ 58,331.00
Thomas S. Douglas.................. 0 60,000 $ 0 $ 71,175.00
W. Charles Hillebrand.............. 21,917 9,333 $ 15,210.00 $ 17,103.00
</TABLE>
- ---------------
(1) Amounts reflecting gains on outstanding options are based on December 31,
1994 closing trade price of stock.
DIRECTORS' COMPENSATION
Each director other than Messrs. Osborn, Currey, Nelson and Spears receives
a fee of $500 for each meeting of the Board of Directors which he attends in
person or each meeting of any committee meeting thereof (other than committee
meetings held in conjunction with meetings of the Board of Directors). Each
director is reimbursed by the Company for travel and related expenses incurred
in connection with Board meetings which he attends in person. For discussion of
consulting agreements with Directors refer to "Compensation Committee Interlocks
and Insider Participation."
The Company paid $60,000 to Mr. Currey during the fiscal year ended
December 31, 1994 as salary for his services as Chairman of the Company's
principal subsidiary, OCC, Inc.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Each of Nelson Capital Corp. ("Nelson Capital") and William G. Spears
provide financial advisory consulting services to the Company. Nelson Capital, a
private merchant banking and venture capital firm, is an affiliate of Edward G.
Nelson. (See "Compensation Committee Interlocks and Insider Participation" on
page 7).
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Mr. Osborn is employed pursuant to an employment agreement (the "Employment
Agreement") expiring on December 31, 1996, which provides that Mr. Osborn serve
as President and Chief Executive Officer of the Company. The Employment
Agreement provides for an annual base salary of $356,000 which is to be
increased on each subsequent January 1st according to the percentage increase of
the Consumer Price Index applicable to the New York Metropolitan area. Mr.
Osborn's base salary may also be increased from time to time at the discretion
of the Board of Directors. The Employment Agreement provides for a bonus in an
amount in accordance with certain criteria established by the Board. Such amount
is intended to be between 20% and 50% of base salary. The Employment Agreement
contains involuntary termination benefits in an amount equal to the greater of
the amount of base salary remaining to be paid during the term of the Employment
Agreement and the amount paid to him during the 12-month period preceding early
termination of the Employment Agreement, such benefits to be paid in the event
of termination of the Employment Agreement prior to December 31, 1996 for any
reason other than Mr. Osborn's death, disability or other specified reasons.
Additionally, the Company shall pay $16,000 annually into a retirement benefit
arrangement for Mr. Osborn.
On January 27, 1995, the Company entered into an agreement with Thomas S.
Douglas which provides that if the Company is sold or transferred to a third
party, the Company will provide Mr. Douglas a bonus of six months at his current
rate of pay. This agreement also provides that if Mr. Douglas is not employed by
the successor subsequent to the completion of the sale or transfer of ownership,
the Company will also provide severance benefits including six months at his
current rate of pay. Osborn Sound & Communications of
6
<PAGE> 10
Georgia, a subsidiary of the Company, entered into an identical agreement with
W. Charles Hillebrand on the same date. Both agreements were approved by the
Board of Directors on November 15, 1994.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Nelson Capital is an affiliate of Edward G. Nelson, a Director of the
Company and a member of the Company's Compensation Committee. Nelson Capital
provides the Company with financial advisory consulting services for a fee,
currently $30,000 per year. The Company believes that the compensation paid to
Nelson Capital is on terms no less favorable to the Company than would have been
required by an unaffiliated third party for similar services. The Company paid
$36,000 in fees to Nelson Capital during the fiscal year ended December 31,
1994.
William G. Spears is a Director of the Company and Chairman of the
Company's Compensation Committee. Mr. Spears provides the Company with financial
advisory consulting services for a fee, currently $30,000 per year. The Company
believes that the compensation paid to Mr. Spears is on terms no less favorable
to the Company than would have been required by an unaffiliated third party for
similar services. The Company paid $36,000 in fees to Mr. Spears during the
fiscal year ended December 31, 1994.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Committee") is
composed of H. Anthony Ittleson, Edward G. Nelson and William G. Spears, the
Chairman of the Committee. None of the Committee members is a Company employee.
The Committee is responsible for developing and making recommendations to the
Board with respect to the Company's executive compensation policies.
COMPENSATION POLICIES
The Company's executive compensation policies are designed to provide
competitive levels of compensation that integrate pay with the Company's annual
and long term strategies and performance goals, industry performance levels,
business unity performance and individual executive's contributions and
achievements. Additionally, the Committee views compensation as a means for
attracting and keeping executive talent.
The Committee believes that significant executive stock ownership helps
align the interests of management and stockholders. Thus, the Committee has
utilized the Company's 1987 Incentive Stock Plan in the Company's executive
compensation package.
PERFORMANCE MEASURES AND INDUSTRY COMPARISONS
In evaluating annual executive compensation, the Committee examines the
Company's cash flow, as well as individual executive performance with regard to
sales and earnings targets, effort and achievement in financing and acquisition
activities.
The Compensation Committee establishes corporate and divisional goals prior
to the beginning of each fiscal year and subjectively assesses the attainment of
those goals in determining compensation.
For superior individual performance, total compensation will be above
average. On the other hand, when business performance is below plan or below
industry results, total compensation will fall below average competitive levels.
FISCAL 1994 COMPENSATION
The Compensation Committee actively reviewed senior executive salaries
during the year. With the unwinding of the Company's management agreements with
Fairmont Communications Corporation and Northstar Television Group, Inc., the
Committee determined that fewer corporate management positions were needed to
oversee the remaining properties. Therefore, during 1994, several corporate
management positions were eliminated. The Committee felt that the increased
responsibilities for those who remained warranted
7
<PAGE> 11
appropriate recognition. Additionally, the strong growth in cash flow as well as
the large number of financing and acquisition activities supported above average
bonuses for the year.
In 1994, options were granted to Thomas S. Douglas as an incentive for him
to join the Company. In determining whether to grant stock options to all other
executive officers in 1994, the Committee reviewed the overall status of each
plan, and the participation of key executives in the equity growth of the
Company. The size of the option grants was determined based upon the Committee's
subjective judgment of the executives' contribution to the Company's growth.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Osborn has been the Chief Executive Officer of the Company since its
inception in 1984. Mr. Osborn's compensation has been determined by the
Committee pursuant to an employment agreement, approved in 1994, which expires
on December 31, 1996. In 1994, Mr. Osborn was paid $100,000 to compensate him
for salary increases that would have become due under his previous employment
agreement. The new Employment Agreement calls for his salary to remain at
$356,000 with increases beginning January 1, 1995 according to the percentage
increase of the Consumer Price Index applicable to the New York Metropolitan
area. Mr. Osborn's base salary may also be increased from time to time at the
discretion of the Board of Directors. The Employment Agreement provides for a
bonus in an amount in accordance with certain criteria established by the Board.
Such amount is intended to be between 20% and 50% of base salary. The Employment
Agreement contains involuntary termination benefits in an amount equal to the
greater of the amount of base salary remaining to be paid during the term of the
Employment Agreement and the amount paid to him during the 12-month period
preceding early termination of the Employment Agreement, such benefits to be
paid in the event of termination of the Employment Agreement prior to December
31, 1996 for any reason other than Mr. Osborn's death, disability or other
specified reasons.
Based on cash flow improvement compared with the prior year, a successful
refinancing of the Company and the successful conclusion of a major acquisition,
the Board awarded Mr. Osborn a bonus of $100,000 for the year 1994.
COMPENSATION COMMITTEE
H. Anthony Ittleson
Edward G. Nelson
William G. Spears
8
<PAGE> 12
PERFORMANCE GRAPH
The performance graph set forth below compares the annual cumulative total
stockholder return for the five years ending December 31, 1994 among the
Company, the CRSP Total Return Index for the Nasdaq National Market ("Nasdaq")
and a peer group(1) index comprised of the following eleven companies: the
Company, Ackerley Communications, Inc., Clear Channel Communications, Inc.,
Granite Broadcasting Corp., Citicasters Inc.(2), Heritage Media Corp., Infinity
Broadcasting Corp., Outlet Communications, Inc., Park Communications, Inc.,
Price Communications Corporation and Southern Starr Broadcasting Group. The
returns of each company in the peer group index have been weighted according to
the respective issuer's stock market capitalization. The graph assumes an
initial investment of $100 on December 31, 1989, and the reinvestment of
dividends (where applicable).
COMPARISON OF 5-YEAR CUMULATIVE TOTAL STOCKHOLDER RETURN
AMONG OSBORN COMMUNICATIONS, NASDAQ NATIONAL MARKET AND PEER GROUP
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) OSBORN PEER GROUP NASDAQ
<S> <C> <C> <C>
12-31-89 100 100 100
1990 57 70 85
1991 33 60 136
1992 24 73 159
1993 28 151 181
1994 33 199 177
</TABLE>
(1) The peer group for this year's performance graph includes certain companies
which were sold in 1994. Therefore, the Company intends to remove these
companies from the peer group next year and include other comparable radio
companies which have recently become public.
(2) In previous years, the Company included Great American Communications
Company as part of the peer group. In June 1994, Great American
Communications Company changed its name to Citicasters Inc. Therefore, this
year the Company included information for Citicasters Inc.
9
<PAGE> 13
PROPOSAL 1. ELECTION OF DIRECTORS
Directors generally are elected by the affirmative vote of a plurality in
voting power cast by the stockholders present or represented by proxy and
entitled to vote and hold office until the election and qualification of their
respective successors. The Company's By-laws provide that the Board shall
consist of one or more members or such number of directors as may be fixed by
action of the Board of Directors. The Directors have determined that the Board
shall consist of six members. All of the nominees are members of the present
Board of Directors. If any nominees should be unable to accept nomination or
election as a Director, which is not expected, the Board of Directors either
will reduce the number of directors to be elected or select a substitute or
substitutes. The proxies may be voted with discretionary authority for a
substitute or substitutes designated by the Board of Directors. The Board of
Directors knows of no reason why any of its nominees will be unable or will
refuse to accept election. The Board of Directors recommends the election of the
nominees listed below.
The following table lists the information with respect to the nominees for
election as directors of the Company.
<TABLE>
<CAPTION>
DIRECTOR
NOMINEE AGE PRINCIPAL OCCUPATION SINCE
- ---------------------------------------- --- --------------------------------------- --------
<S> <C> <C> <C>
Frank D. Osborn......................... 47 President, Chief Executive Officer and 1984
Director
Brownlee O. Currey, Jr.................. 66 President, Nashville Banner Publishing 1994
Company, Nashville, Tennessee
H. Anthony Ittleson..................... 57 Chairman, Travel Ventures Ltd., New 1989
York, New York
Edward G. Nelson........................ 63 President, Nelson Capital Corp., 1985
Nashville, Tennessee
William G. Spears....................... 56 Chairman, Spears, Benzak, Salomon & 1992
Farrell, New York, New York
Robert K. Zelle......................... 71 Private Investor, Nashville, Tennessee 1985
</TABLE>
Information with respect to the business experience and affiliations of
each nominee for election as director is set forth below:
FRANK D. OSBORN has been a Director, President and Chief Executive Officer
of the Company since the Company's formation in 1984 and was its Treasurer until
August 1989. From 1983 to 1985, Mr. Osborn was Senior Vice President/Radio for
Price Communications Corporation, a diversified communications company. From
1981 to 1983, Mr. Osborn served as Vice President and General Manager of WYNY,
NBC's New York FM radio station, and was Vice President of Finance and
Administration of NBC Radio from 1977 to 1981. Mr. Osborn serves as Chairman of
the Board of Fairmont Communications Corporation ("Fairmont") (which the Company
manages and in which the Company has a 25% interest) and Osborn Healthcare
Communications, Inc., a subsidiary of the Company, and serves on the Board of
Northstar Television Group, Inc. Mr. Osborn is married to Mr. Nelson's niece.
Mr. Osborn serves as Chief Executive Officer of Fairmont. Fairmont filed a
voluntary bankruptcy petition under Chapter 11 of the United States Bankruptcy
Code on August 28, 1992 and emerged from Chapter 11 in September 1993.
BROWNLEE O. CURREY, JR. has been a Director of the Company since August
1994. He has been Chairman of the Board of OCC, Inc., the Company's principal
subsidiary, since 1989. He currently serves as the President of the Nashville
Banner Publishing Company in Nashville, TN, which publishes the daily evening
newspaper. Mr. Currey is on the Board of Directors of The Nashville Banner;
Thomas Nelson, Inc., a Nashville-based publisher; Nelson Capital Corp., a
private merchant banking and venture capital investment firm located in
Nashville; A+ Communications, Inc.; and One Sutton Place South Corporation. He
is also a trustee of Vanderbilt University, the United States Equestrian Team,
Inc., the National Foundation for Facial Reconstruction and the International
Tennis Hall of Fame.
H. ANTHONY ITTLESON has been a Director of the Company since October 1989.
He retired as Executive -- Special Projects for CIT Group Holdings, Inc. in
1992. Mr. Ittleson joined CIT in 1961 and throughout his
10
<PAGE> 14
career held various positions including Vice President -- Marketing, Vice
President -- Financing Division and Executive Vice President -- Corporate
Development. He was a director of CIT from 1978 to 1988. Mr. Ittleson is
Chairman of the Board of Travel Ventures Ltd., a leading company active in the
travel industry. He is a Director of the Regency Whist Club in New York and the
Republican Finance Committee, and a Trustee of Brown University, Brooks School
and the Boy's Club of New York.
EDWARD G. NELSON has been a Director of the Company since August 1985. He
is the founder and President of Nelson Capital Corp., which was organized in
1985. From 1983 to 1985, Mr. Nelson was Chairman of the Board and Chief
Executive Officer of Commerce Union Corporation (now NationsBank). He also
serves as a Director of ClinTrials Research Inc., a contract research
organization based in Nashville, Tennessee, Berlitz International, Inc., a
premier language instruction firm operating globally, A+ Communications, Inc., a
telecommunications company and Advocat, Inc., a long term care nursing home
provider based in Nashville, Tennessee.
WILLIAM G. SPEARS, Chairman of Spears, Benzak, Salomon & Farrell Investment
Counselors, has been a Director of the Company since November 1992. Prior to
forming his own firm in 1972, he was a General Partner at Loeb, Rhoades &
Company. He is a member of the New York Society of Security Analysts, a Director
of Alcide Corporation, United HealthCare Corp. and Recognition International,
Inc. Mr. Spears is also a Trustee of the Gramercy Park Foundation, The Hospital
Chaplaincy of New York and Quinnipiac College.
ROBERT K. ZELLE, a private investor, has been a Director of the Company
since 1985. Mr. Zelle established an independent television station in
Nashville, Tennessee in 1975, and operated and managed it until its sale to
Multimedia Broadcasting, Inc. in 1980. From 1980 to 1988, he served as Area Vice
President and Consultant for Multimedia Broadcasting, Inc. Mr. Zelle serves on
the Board of Directors of several small, privately held companies.
During the fiscal year ended December 31, 1994, the Board of Directors held
four meetings. No director attended fewer than 75% of the aggregate number of
meetings held during the fiscal year ended December 31, 1994 by the Board of
Directors or the committees of the Board on which such directors served.
The committees of the Board of Directors includes a Compensation Committee
and an Audit Committee. The Board does not have a Nominating Committee.
The members of the Audit Committee are Messrs. Ittleson and Zelle. The
responsibilities of the Audit Committee include the selection, with the
assistance of management, of the Company's independent auditors, the review of
audit fees, a post-audit review of the Company's financial statements and
general oversight of the Company's internal accounting procedures and the
adequacy of internal controls. The Audit Committee met once during the fiscal
year ended December 31, 1994.
The members of the Compensation Committee are Messrs. Nelson, Ittleson and
Spears. The responsibilities of the Compensation Committee include the review of
cash compensation of the executive officers and formulation of recommendations
to the Board of Directors with regard thereto, the formulation of
recommendations to the Board of Directors with regard to the grant of stock
options and other benefits, and the general oversight of the compensation
policies of the Company. The Compensation Committee met three times during the
fiscal year ended December 31, 1994.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE SIX
DIRECTORS NAMED ABOVE.
PROPOSAL 2. RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected Ernst & Young LLP to be the Company's
independent auditors for the year ending December 31, 1995, and recommends to
the stockholders ratification of their selection. Ernst & Young LLP has served
as the Company's independent auditors since 1986.
11
<PAGE> 15
Representatives of Ernst & Young LLP are expected to be present at the 1995
Annual Meeting of Stockholders. Such representatives will have the opportunity
to make a statement if they desire to do so and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING DECEMBER 31, 1995.
SECTION 16 FILINGS
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and beneficial owners of more than 10% of the Company's
Common Stock to file reports of ownership and changes of ownership with the
Securities and Exchange Commission. The Company believes that during the fiscal
year ended December 31, 1994, all filing requirements applicable to its
directors, executive officers and beneficial owners of more than 10% of the
Company's Common Stock were complied with, except that an Annual Statement of
Changes in Beneficial Ownership on Form 4 was filed late on Form 5 by the
following officers: Thomas S. Douglas, W. Charles Hillebrand, Michael F. Mangan
and Mark S. Olkowski and except that an amendment to the Form 3 filed by
Brownlee O. Currey, Jr. is required to be filed to report certain shares held in
a trust.
MARKET FOR THE COMPANY'S COMMON STOCK
The following table indicates the high and low per-share sales prices for
the Company's Common Stock as reported by Nasdaq for the periods indicated.
Market prices have been adjusted to reflect the 1-for-2 reverse stock split on
July 11, 1994.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1992
First Quarter................................................................ $8 $6
Second Quarter............................................................... 7 1/2 5 1/2
Third Quarter................................................................ 7 5
Fourth Quarter............................................................... 6 3 1/2
1993
First Quarter................................................................ 5 1/2 3 1/2
Second Quarter............................................................... 6 4
Third Quarter................................................................ 5 1/2 3
Fourth Quarter............................................................... 10 1/2 4 1/2
1994
First Quarter................................................................ 7 1/2 6 1/2
Second Quarter............................................................... 7 1/2 6 1/4
Third Quarter................................................................ 7 3/4 6 1/2
Fourth Quarter............................................................... 7 1/2 6
1995
First Quarter................................................................ 7 1/2 6 3/8
</TABLE>
The Company has never declared or paid any cash dividends on its Common
Stock, and it is not anticipated that any cash dividends will be paid in the
foreseeable future. Pursuant to its loan agreements, the Company is restricted
on the payment of cash dividends on the Common Stock.
STOCKHOLDERS' PROPOSALS FOR 1996 ANNUAL MEETING
Stockholders who wish to have their proposals presented at the 1996 Annual
Meeting of Stockholders must deliver such proposals in writing to the Secretary
of the Company at the Company's principal executive
12
<PAGE> 16
offices no later than December 1, 1995 for inclusion in the Company's proxy
statement and form of proxy relating to that meeting.
ANNUAL REPORT ON FORM 10-K; INCORPORATION BY REFERENCE
Upon the written request of any record holder or beneficial owner of Common
Stock entitled to vote at the Meeting, the Company, without charge, will provide
a copy of its Annual Report on Form 10-K for the year ended December 31, 1994,
as filed with the Securities and Exchange Commission. Requests should be
directed to Michael F. Mangan, Vice President -- Controller and Secretary,
Osborn Communications Corporation, 130 Mason Street, Greenwich, Connecticut
06830 (telephone: 203-629-0905).
TO THE EXTENT THIS PROXY STATEMENT HAS BEEN OR WILL BE SPECIFICALLY INCORPORATED
BY REFERENCE INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THE SECTIONS OF THE
PROXY STATEMENT ENTITLED "COMPENSATION COMMITTEE REPORT" AND "PERFORMANCE GRAPH"
SHALL NOT BE DEEMED TO BE SO INCORPORATED UNLESS SPECIFICALLY OTHERWISE PROVIDED
IN ANY SUCH FILING.
OTHER MATTERS
The Board of Directors, at the time of the preparation of this Proxy
Statement, knows of no business to come before the Meeting other than that
referred to herein. If any other business should come before the Meeting, the
persons named in the enclosed proxy will have discretionary authority to vote
all proxies received and not theretofore revoked in accordance with their best
judgment.
By Order of the Board of Directors
/s/ Michael F. Mangan
Michael F. Mangan
Secretary
Greenwich, Connecticut
April 11, 1995
13
<PAGE> 17
PROXY OSBORN COMMUNICATIONS CORPORATION PROXY
130 Mason Street
Greenwich, Connecticut 06830
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Frank D. Osborn and Michael F. Mangan, each
with the power to appoint a substitute, and hereby authorizes each of them to
present and to vote, as designated on the reverse side, all of the shares of
Common Stock of Osborn Communications Corporation held of record by the
undersigned on March 27, 1995 at the Annual Meeting of Stockholders to be held
on May 16, 1995 or any adjournment thereof.
THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1 AND 2.
(Continued on other side)
<PAGE> 18
Please mark your
/X/ votes as in this
example
1. ELECTION OF DIRECTORS.
NOMINEES: Frank D. Osborn, Brownlee O. Currey, Jr., H. Anthony Ittleson, Edward
G. Nelson, William G. Spears, Robert K. Zelle
FOR WITHHELD
/ / / /
*(INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
that nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
2. Proposal to ratify the selection of Ernst & Young LLP, independent public
accountants, as the Company's independent auditors for the year 1995.
FOR AGAINST ABSTAIN
/ / / / / /
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
IMPORTANT: PLEASE SIGN, DATE AND RETURN THE CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Check here for
address change / /
NEW ADDRESS:
----------------------------
----------------------------
----------------------------
SIGNATURE(S) DATE
---------------------------------------------- -----------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If a corporation or
partnership, please sign in full corporate or partnership name by
authorized officer or authorized person.
