<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / 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 Section 240.14a-11(c) or Section
240.14a-12
DIGITAL MICROWAVE CORPORATION
- --------------------------------------------------------------------------------
(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:
------------------------------------------------------------------------
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:
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1
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October 6, 1997
TO THE STOCKHOLDERS OF
DIGITAL MICROWAVE CORPORATION:
You are cordially invited to attend a Special Meeting of Stockholders (the
"Special Meeting") of Digital Microwave Corporation (the "Company") on
November 5, 1997, at 11:00 a.m., local time, which will be held at the Company's
executive offices located at 170 Rose Orchard Way, San Jose, California.
The sole purpose of the Special Meeting is to approve the two-for-one stock
split approved by the Company's Board of Directors on August 28, 1997, after
careful consideration.
You do not need to attend the Special Meeting. Whether or not you plan to
attend, after reading the Proxy Statement, please mark, date, sign and return
the enclosed proxy card in the accompanying reply envelope. If you decide to
attend the Special Meeting, please notify the Secretary of the Company if you
wish to vote in person and your proxy will not be voted.
Sincerely yours,
/s/ Charles D. Kissner
Charles D. Kissner
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
<PAGE>
DIGITAL MICROWAVE CORPORATION
170 Rose Orchard Way
San Jose, California 95134
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Special Meeting of Stockholders of Digital Microwave Corporation (the
"Company") will be held at the Company's executive offices located at 170 Rose
Orchard Way, San Jose, California, on Wednesday, November 5, 1997, at 11:00 a.m,
local time, to:
1. Approve the amendment to Article IV of the Restated Certificate of
Incorporation of the Company to (i) increase the total number of shares that the
Corporation has authority to issue from 35,000,000 shares to 65,000,000 shares;
(ii) increase the number of shares of Common Stock authorized for issuance by
the Company from 30,000,000 shares to 60,000,000 shares; and (iii) remove
references to Series A and Series B Preferred Stock, none of which are
outstanding;
2. Approve the amendment to Article IV of the Restated Certificate of
Incorporation of the Company to effect a two-for-one stock split of the
Company's Common Stock; and
3. Transact any other business which may properly come before the meeting
and any adjournments or postponements thereof.
The foregoing items of business are more fully described in the Proxy
Statement that accompanies this Notice.
Stockholders of record at the close of business on September 26, 1997, will
be entitled to notice of and to vote at the Special Meeting and at any
continuation or adjournment thereof.
All stockholders are cordially invited to attend the Special Meeting. In
any event, to ensure your representation at the Special Meeting, please
carefully read the accompanying Proxy Statement which describes the matters to
be voted on at the Special Meeting and sign, date and return the enclosed proxy
card in the reply envelope provided. Should you receive more than one proxy
because your shares are registered in different names and addresses, each proxy
should be returned to assure that all your shares will be voted. If you attend
the Special Meeting and vote by ballot, your proxy will be revoked automatically
and only your vote at the Special Meeting will be counted. The prompt return of
your proxy card will assist us in preparing for the Special Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Charles D. Kissner
Charles D. Kissner
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER
San Jose, California
October 6, 1997
<PAGE>
PROXY STATEMENT
FOR THE SPECIAL MEETING OF STOCKHOLDERS OF
DIGITAL MICROWAVE CORPORATION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Digital Microwave Corporation, a Delaware
corporation ("DMC" or the "Company"), of proxies for the Special Meeting of
Stockholders of the Company (the "Special Meeting") to be held at 11:00 a.m.,
local time, on November 5, 1997, and any adjournment or postponement thereof.
This Proxy Statement was first mailed to stockholders on or about October 6,
1997.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Special
Meeting are summarized in the accompanying Notice of Special Meeting of
Stockholders. Each proposal is described in more detail in a subsequent section
of this Proxy Statement.
VOTING
Only holders of record of the Common Stock of the Company ("Common
Stock") at the close of business on September 26, 1997, will be entitled to
vote at the Special Meeting and any continuations or adjournments thereof.
Each share entitles the holder to one vote on each matter to come before the
Special Meeting. On September 26, 1997, there were 19,024,680 shares of
Common Stock outstanding and entitled to vote at the Special Meeting, held by
187 stockholders of record.
If any stockholder is unable to attend the Special Meeting, such
stockholder may vote by proxy. The enclosed proxy is solicited by the DMC Board
of Directors (the "Board of Directors" or the "Board"), and, when returned
properly completed, will be voted as you direct on your proxy card. In the
discretion of the proxy holder, shares represented by such proxies will be voted
upon any other business as may properly come before the Special Meeting.
The presence at the Special Meeting in person or by proxy of
stockholders entitled to cast a majority of all the votes entitled to be cast at
the meeting will constitute a quorum for the conduct of business. Shares
represented by a duly executed and delivered proxy will be voted as directed by
the stockholder on the reverse side of the proxy. If no direction is given,
such shares will be voted FOR Proposal 1 and FOR Proposal 2, as more fully
described in this Proxy Statement, and in accordance with the discretion of the
persons named as proxies on any other matter properly coming before the meeting.
Unless otherwise indicated, proxies marked "abstain" as to any matter will be
treated as present for purposes of determining a quorum for the meeting, but
will not be counted as voting on the matter as to which abstention is indicated.
If a broker or other nominee indicates on the proxy that it does not have
discretionary authority as to certain shares to vote on a particular matter,
such shares will be treated as present and entitled to vote for purposes of
determining the presence of a quorum. Abstentions will have the same effect as
votes against each of the proposals, and broker non-votes will have the same
effect as votes against each of the proposals.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before its use by delivery to the Secretary of the
Company of a written notice of revocation or a duly executed proxy bearing a
later date or by attending the Special Meeting and voting in person.
COST OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In
addition to solicitation by mail, proxies may also be solicited by Directors,
officers and employees of the Company who will not receive additional
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compensation for such solicitation. Brokerage firms and other custodians,
nominees and fiduciaries will be reimbursed by the Company for their reasonable
expenses incurred in sending proxy material to beneficial owners of the Common
Stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Common Stock of the Company as of August 29, 1997, by (i) each
person known by the Company to own beneficially more than five percent (5%) of
the outstanding Common Stock of the Company; (ii) each of the Company's
Directors; (iii) the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company, determined for the
Company's fiscal year ended March 31, 1997; and (iv) all Directors and executive
officers as a group.
<TABLE>
<CAPTION>
APPROXIMATE
SHARES PERCENT
BENEFICIALLY BENEFICIALLY
NAME OWNED(1) OWNED(2)
- -------------------------------------------- ------------------ -----------------
<S> <C> <C>
Kopp Investment Advisors, Inc. 2,380,793 (3) 12.55%
7701 France Avenue South, Suite 500
Edina, Minnesota 55435
Charles D. Kissner 187,202 (4) 1.00%
Richard C. Alberding 15,000 (5) *
John W. Combs 21,000 (6) *
Clifford H. Higgerson 296,590 (7) 1.56%
James D. Meindl 19,000 (8) *
Billy B. Oliver 22,500 (9) *
Frank Carretta, Jr. 47,500 (10) *
Jack Hillson 2,000 (11) *
Paul A. Kennard 32,500 (12) *
Carl A. Thomsen 66,948 (13) *
All Directors and executive officers as a group (15 persons) 780,755 (14) 4.11%
</TABLE>
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* Less than 1%
(1) To the Company's knowledge, except as set forth in the footnotes to this
table, and subject to applicable community property laws, each person named
in this table has sole voting and investment power with respect to the
shares set forth opposite such person's name.
(2) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of Common Stock
subject to options currently exercisable or exercisable on or before
October 28, 1997, are deemed outstanding for computing the percentage of
the person holding such options but are not deemed outstanding for
computing the percentage of any other person. On August, 29, 1997, there
were 18,974,272 shares of the Company's Common Stock outstanding.
Options granted to Directors under the Company's stock incentive plan are
immediately excercisable; however, any shares purchased under such options
are subject to repurchase by the Company, upon the Director's cessation of
Board service prior to vesting in those shares. Such options vest, and the
Company's repurchase rights lapse, annually over a period of three years
commencing on the first anniversary of the grant date.
(3) Kopp Investment Advisors, Inc. filed a Schedule 13G, dated January 28,
1997, with the Securities and Exchange Commission on behalf of itself, Kopp
Investment Advisors, Inc. Profit Sharing Plan, Kopp Family Foundation,
LeRoy C. Kopp Individual Retirement Account and LeRoy C. Kopp
(collectively, "Kopp"). Kopp reported shared dispositive power over
2,285,793 shares, sole dispositive power over 95,000 shares, sole voting
power over 265,000 shares and shared voting power over 65,000 shares.
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(4) Includes 187,202 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997. Also includes 200 shares held of record by a trust for the benefit
of Mr. Kissner's children.
(5) Includes 12,000 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997, of which 7,000 shares are subject to repurchase rights.
(6) Includes 21,000 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997, all of which are subject to repurchase rights.
(7) Includes 32,000 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997, of which 7,000 shares are subject to repurchase rights.
(8) Includes 19,000 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997, of which 14,000 shares are subject to repurchase rights.
(9) Includes 17,000 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997, of which 7,000 shares are subject to repurchase rights.
(10) Includes 17,000 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997.
(11) Includes 2,000 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997.
(12) Includes 32,500 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997.
(13) Includes 50,458 shares of Common Stock subject to options which are
currently exercisable or will become exercisable on or before October 28,
1997.
(14) See Footnotes (4) through (13). Includes 390,160 shares of Common Stock
subject to options which are currently exercisable or will become
exercisable on or before October 28, 1997, of which 56,000 shares are
subject to repurchase rights.
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PROPOSAL 1:
AMENDMENT TO ARTICLE IV OF THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE TOTAL NUMBER OF AUTHORIZED SHARES OF STOCK
AND THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK AND TO
REMOVE REFERENCES TO SERIES A AND SERIES B PREFERRED STOCK
The Company's stockholders are asked to act upon a proposal to approve
an amendment to Article IV of the Company's Restated Certificate of
Incorporation to (i) increase the total number of authorized shares of stock
that the Company is authorized to issue from 35,000,000 shares to 65,000,000
shares; (ii) increase the number of authorized Common Stock from 30,000,000
shares to 60,000,000 shares; and (iii) remove references to Series A and
Series B Preferred Stock, none of which are outstanding. In August 1997, the
Board approved this amendment of the Restated Certificate of Incorporation in
connection with the Board's approval of a two-for-one stock split (the "Stock
Split"), which is discussed in Proposal 2. The Board directed that this
proposal be submitted to the Company's stockholders for consideration.
The following is the text of the first paragraph of Article IV,
Section A, of the Restated Certificate of Incorporation, as proposed to be
amended to effect the increase in the total number of authorized shares of stock
and the number of authorized shares of Common Stock of the Company and to remove
references to Series A and Series B Preferred Stock, none of which are
outstanding:
"This Corporation is authorized to issue two classes of stock to be
designated, respectively, "Preferred Stock" and "Common Stock." The
total number of shares that this Corporation is authorized to issue is
65,000,000. Five million (5,000,000) shares shall be Preferred Stock,
consisting of 200,000 shares designated Series A Junior Participating
Preferred Stock, and sixty million (60,000,000) shares shall be Common
Stock. The Preferred Stock shall have a par value of $.01 per share;
the Common Stock shall have a par value of $.0l per share."
If both Proposal 1 and Proposal 2 are approved by the stockholders of
the Company at the Special Meeting, the amendment to Article IV of the Restated
Certificate of Incorporation would be effected on the soonest practicable
date following the Special Meeting (the "Effective Date"), unless there is a
determination by the Board of Directors that the Stock Split described in
Proposal 2 is no longer in the best interests of the Company and its
stockholders. The Board will make any such determination based on prevailing
market conditions, on the likely effect on the market price of the Common
Stock, and on other relevant factors. If the amendment is not effected, the
Board of Directors will take action to abandon the amendment pursuant to
Section 242(c) of the Delaware General Corporation Law.
PURPOSES AND EFFECTS OF THE INCREASE IN THE TOTAL NUMBER OF AUTHORIZED SHARES OF
STOCK AND THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
The proposed increase in the authorized number of shares of Common
Stock is necessary to provide the Company with a sufficient number of shares to
effect the Stock Split described in Proposal 2 and to provide the Company with
flexibility for the future.
As of August 29, 1997, the Company had 18,974,272 shares of Common
Stock and no shares of Preferred Stock outstanding. In addition, as of the
same date, approximately 2,822,375 shares of Common Stock were reserved for
issuance as follows: Approximately 196,661 shares were reserved for issuance
under the Digital Microwave Corporation 1984 Stock Option Plan; approximately
1,938,706 shares were reserved for issuance under the Digital Microwave
Corporation 1994 Stock Incentive Plan; approximately 457,860 shares were
reserved for issuance under the Digital Microwave Corporation 1996
Non-Officer Employee Stock Option Plan; and approximately 229,148 shares were
reserved for issuance under the Digital Microwave Corporation 1996 Employee
Stock Purchase Plan. Therefore, with only approximately 13,203,353 shares of
authorized but unissued Common Stock remaining, the Company does not have a
sufficient number of authorized but unissued shares of Common Stock necessary
to implement the Stock Split unless the number of authorized shares of Common
Stock is
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increased. Accordingly, the Board of Directors has determined that the Stock
Split is contingent upon stockholder approval of the amendment to Article IV
of the Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 30,000,000 shares to 60,000,000 shares.
The increase in authorized shares of Common Stock will not affect the
present ratio of authorized but unissued shares of Common Stock to issued shares
of Common Stock, thus maintaining the same relative degree of flexibility for
the Company in meeting future opportunities and requirements for issuing shares
of Common Stock.
Increasing the number of authorized shares of stock to a number that
provides for a substantial number of additional authorized but unissued shares
of stock is a common occurrence among publicly held companies. The authorized
shares of Common Stock in excess of those outstanding after the Stock Split will
be available for issuance at such times and for such purposes as the Board of
Directors may deem advisable without further action by the Company's
stockholders, except as may be required by applicable laws or regulations,
including stock exchange rules. These purposes may include additional stock
dividends, stock splits, retirement of indebtedness, employee benefit programs,
corporate business combinations, acquisitions of property, funding of product
programs or businesses, issuance of securities convertible into Common Stock or
other corporate purposes. The Board of Directors has no current plans to issue
any shares of Common Stock for any such purposes, other than pursuant to the
Stock Split proposal and pursuant to the Company's stock option and stock
purchase plans, and does not intend to issue any stock except on terms or for
reasons which the Board deems to be in the best interests of the Company.
The additional shares of Common Stock that would become available for
issuance if the proposed amendment is adopted could also be used by the Company
to delay, defer or prevent a change of control of the Company or other
transaction that might involve a premium price for holders of Common Stock or
otherwise be in their best interest. For example, in the event of a hostile
attempt to take over control of the Company, the Company could issue additional
shares of the Common Stock, thereby diluting the voting power of the other
outstanding shares and increasing the potential cost to acquire control of the
Company. The Board of Directors is not aware of any attempt to take control of
the Company and the Board of Directors has not presented this proposal with the
intent that it be utilized as an anti-takeover device. The proposed amendment
to Article IV of the Restated Certificate of Incorporation does not alter the
Company's existing power to issue up to 5,000,000 shares of Preferred Stock.
Each additional share of Common Stock authorized by the amendment to
Article IV of the Restated Certificate of Incorporation described in this
Proposal would have the same rights and privileges as each share of Common Stock
currently authorized or outstanding. Each new share of Common Stock authorized
under this Proposal will include one right, which, when exercisable upon the
occurrence of certain events, entitles the registered holder to certain rights
under a Stockholders' Rights Agreement between the Company and the Manufacturers
Hanover Trust Company of California, as Rights Agent, dated as of October 24,
1991, which could delay, defer or prevent an unsolicited proposal to change the
control of the Company. The number of authorized shares of Preferred Stock
would remain unchanged.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote at the Special Meeting will be necessary
for the approval of the amendment to Article IV of the Restated Certificate of
Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED AMENDMENT
TO ARTICLE IV OF THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE TOTAL NUMBER OF AUTHORIZED SHARES OF STOCK AND THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK AND TO REMOVE
REFERENCES TO SERIES A AND SERIES B PREFERRED STOCK,
NONE OF WHICH ARE OUTSTANDING.
AN ABSTENTION WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSAL.
5
<PAGE>
PROPOSAL 2:
AMENDMENT TO ARTICLE IV OF THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A
TWO-FOR-ONE STOCK SPLIT OF THE COMPANY'S COMMON STOCK
The Company's stockholders are asked to act upon a proposal to approve
the Board's action to amend the Company's Restated Certificate of Incorporation
to effect a two-for-one stock split of the Company's Common Stock (the "Stock
Split," as defined above). In August 1997, the Board of Directors approved the
Stock Split and directed that this proposal to approve the amendment to
Article IV of the Restated Certificate of Incorporation to effect the Stock
Split be submitted to the Company's stockholders for consideration.
The following is the text of the second paragraph of Article IV,
Section A, of the Restated Certificate of Incorporation of the Company, as
proposed to be amended to effect the Stock Split as described in this Proposal:
"Upon the filing of this Restated Certificate of Incorporation with
the Secretary of State of the State of Delaware (the "Effective
Time"), each share of Common Stock of this Corporation issued and
outstanding immediately prior to the Effective Time shall be changed
and converted into two (2) shares of Common Stock of this
Corporation."
If this Proposal is approved by the stockholders of the Company at the
Special Meeting, the Stock Split would be effected on the soonest practicable
date following the Special Meeting (the "Effective Date," as defined above),
unless there is a determination by the Board of Directors that the Stock
Split is no longer in the best interests of the Company and its stockholders.
The Board will make any such determination based on prevailing market
conditions, on the likely effect on the market price of the Common Stock, and
on other relevant factors. If the amendment is not effected, the Board of
Directors will take action to abandon the amendment pursuant to Section
242(c) of the Delaware General Corporation Law.
PURPOSES AND EFFECTS OF THE STOCK SPLIT
The Board of Directors has proposed the Stock Split because the
Board believes that the Stock Split is in the best long-term and short-term
interests of the Company and its stockholders as the increase in the number
of outstanding shares of Common Stock and the lower market price per share
resulting from the Stock Split is expected to broaden the market for and
improve the marketability of the Common Stock and increase the number of
stockholders of the Company. Although the impact on the market price of
shares of Common Stock cannot be predicted with certainty, it is likely that
the Stock Split would initially result in the market price of each share of
Common Stock being approximately one-half of the price previously prevailing,
and that the aggregate market price of all shares of Common Stock held by a
particular stockholder should remain approximately the same. Stockholders
should be aware, however, that brokerage charges and any applicable transfer
taxes on sales and transfers of shares would be higher after the Stock Split
on the same relative interest in the Company because that interest would be
represented by a greater number of shares.
The Common Stock is listed for trading on The Nasdaq Stock Market
("Nasdaq"). On the Record Date, the reported closing price of the Common Stock
on Nasdaq was $44.25 per share.
Proportionate voting rights and other rights of stockholders would not
be altered by the Stock Split. In addition, the number of shares of Common
Stock subject to outstanding options granted pursuant to the Company's employee
and director stock option and stock purchase plans (collectively, the "Plans"),
and the number of shares of Common Stock reserved for issuance under the Plans,
would be doubled, and the exercise price of outstanding options would be divided
by two.
The proposed Stock Split would not change the stockholders' equity or
interest in the Company, and the book value of the number of shares outstanding
immediately after the applicable Stock Split would be equal to the book value of
the number of shares outstanding immediately prior to the Stock Split. Since
the $.01 par value of the Common Stock would not be changed following the Stock
Split, an adjustment would be made in the stockholders'
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equity accounts of the Company to increase the Company's Common Stock at par
value account by an amount equal to the par value of shares issued in the
Stock Split and to make a corresponding reduction in the additional
paid-in-capital account on the Company's balance sheet. Total stockholders'
equity would thus remain unchanged.
If the stockholders approve the proposed Stock Split, the Company will
apply to Nasdaq for the listing of the additional shares that would be issued as
a result of the Stock Split. Provided the listing application is approved by
Nasdaq, the Stock Split would be accomplished by mailing to each stockholder of
record as of the close of business on the Effective Date a certificate
representing one additional share of Common Stock for each share of Common Stock
held by the stockholder on that date.
PRESENT CERTIFICATES WILL CONTINUE TO REPRESENT THE NUMBER OF SHARES
INDICATED AND WILL NOT BE EXCHANGED FOR NEW CERTIFICATES. PRESENT CERTIFICATES
SHOULD NOT BE RETURNED TO THE COMPANY OR ITS TRANSFER AGENT IN CONNECTION WITH
THE STOCK SPLIT.
TAX CONSEQUENCES
Under existing United States federal income tax laws and regulations,
the receipt of additional shares of the Company's Common Stock in the Stock
Split will not constitute taxable income or gain or loss to stockholders; the
cost or other tax basis of each share of Common Stock held by a stockholder
immediately prior to the Stock Split will be divided equally between the
corresponding number of shares held immediately after the split; and the holding
period for each of the post-split shares will include the period for which the
corresponding pre-split shares of the Company's Common Stock were held.
The laws of jurisdictions other than the United States (including
state and foreign jurisdictions) may impose income taxes on the receipt by a
stockholder of additional shares of Common Stock resulting from the Stock Split.
Assuming transactions of an equivalent dollar amount, brokerage commissions on
purchases and sales of the Common Stock after the Stock Split and transfer
taxes, if any, may be somewhat higher than before the Stock Split, depending on
the specific number of shares involved. Stockholders are urged to consult their
own tax advisors.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote at the Special Meeting will be necessary
for the approval of the amendment to Article IV of the Restated Certificate of
Incorporation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENT TO ARTICLE IV OF THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION TO EFFECT A TWO-FOR-ONE STOCK SPLIT.
AN ABSTENTION WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE PROPOSAL.
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STOCKHOLDER PROPOSALS
The deadline for stockholder proposals intended to be considered for
inclusion in the Company's Proxy Statement for next year's Annual Meeting of
Stockholders is expected to be March 5, 1998. Such proposals may be included in
next year's Proxy Statement if they comply with certain rules and regulations
promulgated by the Securities and Exchange Commission.
OTHER BUSINESS
The Board of Directors is not aware of any other matter which may be
presented for action at the Special Meeting. Should any other matter requiring
a vote of the stockholders arise, the enclosed proxy card gives authority to the
persons listed on the card to vote at their discretion in the best interest of
the Company.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Charles D. Kissner
Charles D. Kissner
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
Dated: October 6, 1997
8
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THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF DIGITAL MICROWAVE CORPORATION
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 5, 1997
The undersigned stockholder of DIGITAL MICROWAVE CORPORATION, a Delaware
corporation, hereby acknowledges receipt of the Notice of Special Meeting of
Stockholders and Proxy Statement, each dated October 6, 1997, and hereby
appoints Charles D. Kissner, Carl A. Thomsen and Carol A. Goudey or any one
of them, proxies, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the Special
Meeting of Stockholders of DIGITAL MICROWAVE CORPORATION to be held on
November 5, 1997 at 11:00 a.m., local time, at its executive offices located
at 170 Rose Orchard Way, San Jose, California, and at any adjournment or
adjournments thereof, and to vote all shares of Common Stock which the
undersigned would be entitled to vote if then and there personally present,
on the matters set forth below.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR PROPOSALS 1 AND 2 SET FORTH BELOW, IN EACH CASE
AS MORE FULLY DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT, AND AS SAID
PROXIES DEEM ADVISABLE ON SUCH MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.
1. PROPOSAL TO APPROVE THE AMENDMENT TO ARTICLE IV OF THE DIGITAL
MICROWAVE CORPORATION RESTATED CERTIFICATE OF INCORPORATION TO (i) INCREASE
THE TOTAL NUMBER OF AUTHORIZED SHARES OF STOCK TO 65,000,000; (ii) INCREASE
THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 60,000,000; AND (iii)
REMOVE REFERENCES TO SERIES A AND SERIES B PREFERRED STOCK, NONE OF WHICH ARE
OUTSTANDING:
FOR AGAINST ABSTAIN
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2. PROPOSAL TO APPROVE THE AMENDMENT TO ARTICLE IV OF THE DIGITAL
MICROWAVE CORPORATION RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A
TWO-FOR-ONE STOCK SPLIT OF THE COMMON STOCK:
FOR AGAINST ABSTAIN
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DATED: , 1997
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Signature
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Signature
This Proxy should be marked, dated and
signed by the stockholder(s) exactly as
his or her name appears hereon, and
returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity
should so indicate. If shares are held
by joint tenants or as community property,
both should sign.
