CODED COMMUNICATIONS CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 23, 1997
The Annual Meeting of Shareholders (the "Annual Meeting") of Coded
Communications Corporation (the "Company") will be held at the offices of the
Company, 1939 Palomar Oaks Way, Carlsbad, California on May 23, 1997, at 9:00
a.m., local time, and at any and all adjournments thereof, for the following
purposes:
1. To elect four members to the Board of Directors to serve for the
ensuing year as set forth in the accompanying Proxy Statement.
2. To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of Common Stock, $.01
par value ("Common Stock") from 100,000,000 to 150,000,000 shares.
3. To ratify the selection of Coopers & Lybrand, LLP as the Company's
independent public accountants for the current year.
4. To transact such other business as may properly come before the
Annual Meeting and any adjournment or adjournments thereof.
The Board of Directors fixed the close of business on April 14, 1997, as
the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting or any adjournments thereof.
All shareholders are cordially invited to attend the Annual Meeting in
person. Those who cannot attend are urged to complete, sign and date the
accompanying proxy card and return it promptly in the enclosed envelope. If
you return your proxy card you may nevertheless attend the Annual Meeting and
vote your shares in person.
This Notice of Annual Meeting of Shareholders is given pursuant to Section
222 of the Delaware Corporation Law and the Notice and the accompanying Proxy
Statement are scheduled to be mailed on or about April 17, 1997. All
inquiries with respect to the Annual Meeting, this Notice of Annual Meeting
and Proxy Statement and the enclosed proxy card should be directed to the
Company, Attention: Secretary, at its principal executive office, 1939
Palomar Oaks Way, Carlsbad, California 92009.
By Order of the Board of Directors,
/s/ Gary L. Luick
Gary L. Luick
Chief Executive Officer
Carlsbad, California
April 7, 1997
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY PROMPTLY.
CODED COMMUNICATIONS CORPORATION
1939 PALOMAR OAKS WAY
CARLSBAD, CALIFORNIA 92009
____________________________________
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 23, 1997
___________________________________
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Shareholders (the "Annual Meeting")
of Coded Communications Corporation, a Delaware corporation (the "Company"),
to be held on May 23, 1997, at the offices of the Company, 1939 Palomar Oaks
Way, Carlsbad, California, at 9:00 a.m. local time, and at any adjournments
thereof. The accompanying Proxy is solicited by and on behalf of the Board of
Directors of the Company.
The Notice of Annual Meeting, this Proxy Statement, and the form of proxy
will be mailed to shareholders on or about April 17, 1997 The shares
represented by all properly executed proxies received by the Board of
Directors in time for the Annual Meeting will be voted.
Matters to be Considered
The matters to be considered and voted on at the Annual Meeting will be:
1. To elect four members to the Board of Directors to serve for the
ensuing year as set forth in the accompanying Proxy Statement.
2. To approve an amendment to the Company's Certificate of Incorporation
to increase the number of authorized shares of Common Stock, $.01
par value ("Common Stock") from 100,000,000 to 150,000,000 shares.
3. To ratify the appointment of Coopers & Lybrand, LLP as independent
accountants for the current year.
4. To transact such other business as may properly come before the
Annual Meeting and any adjournment or adjournments thereof.
Proxies and Voting
A Proxy for use at the Annual Meeting is enclosed. Shareholders will be
entitled to one vote per share on all matters presented at the Annual Meeting.
Any shareholder who executes and delivers a Proxy has the right to revoke it
at any time before it is exercised by filing with the Company a written
revocation of the Proxy or a duly executed Proxy bearing a later date, or by
the shareholder personally appearing at the Annual Meeting and casting a
contrary vote. Subject to such revocation, all shares represented by a
properly executed Proxy received in time for the Annual Meeting will be voted
in accordance with the instructions contained therein, and in the absence of
instructions will be voted "FOR" the nominees for directors named herein;
"FOR" amendment to the Certificate of Incorporation to increase the number of
authorized shares of Common Stock; "FOR" the three alternative amendments to
the Certificate of Incorporation for a reverse Common Stock split; and FOR the
selection of independent public accountants. The Board of Directors does not
anticipate any matters being presented at the Annual Meeting other than as set
forth in the accompanying Notice of Annual Meeting. If, however, any other
matters are properly presented at the Annual Meeting, the Proxy will be voted
by the proxyholders in accordance with the discretionary authority conferred
in the Proxy.
Shareholders of record at the close of business on April 14, 1997 (the
"Record Date") will be entitled to notice of and to vote at the Annual
Meeting. On the Record Date, there were outstanding 76,022,312 shares of the
Company's Common Stock, 8,000 shares of the Company's Series A preferred
stock, and 46,775 shares of the Company's Series B preferred stock. Holders
of Common Stock are entitled to one (1) vote per share, while holders of the
Series A preferred stock are entitled to 300 votes per share and the holder of
the Series B preferred stock is entitled to 163.271 votes per share. In
electing Directors of the Company and approving the other proposal presented,
holders of Common Stock and preferred stock will vote together as a single
class. The presence, in person or by proxy, of the holders of shares
representing 43,029,657 votes at the Annual Meeting will constitute a quorum.
Assuming a quorum is present at the Annual Meeting, Directors will be elected
by a plurality of the votes cast, with the Common Stock and preferred
stockholders voting together as a single class. The approval of the amendment
to the Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 100,000,000 to 150,000,000 shares requires an
affirmative vote of a majority of the outstanding shares of Common Stock
entitled to vote at the Annual Meeting (i.e., the affirmative vote of
43,029,657 shares). The ratification of the selection of independent public
accountants requires the vote of a majority of the shares of Common Stock
present and entitled to vote at the Annual Meeting.
At April 1, 1997, ISA Investments Corporation, a majority owned
subsidiary of Grupo Information Satellite and Advertising, S.A. de C.V.
("ISA") held 57,272,767 shares of Common Stock, or approximately 75% of the
outstanding shares of Common Stock. ISA has indicated it will vote all of its
shares "FOR" the nominees for Directors and "FOR" approval of the amendment to
the Certificate of Incorporation to increase the authorized amount of Common
Stock. See "Security Ownership of Certain Beneficial Owners and Management."
Solicitation of Proxies
The enclosed Proxy is solicited on behalf of the Board of Directors of
the Company. The cost of this solicitation will be borne by the Company.
This will include the cost of supplying necessary additional copies of the
solicitation material to beneficial owners of shares held of record by
brokers, dealers, banks and voting trusts, and their nominees, and, upon
request, the reasonable expenses of the record holders for completing the
mailing of such materials and reports to such beneficial owners. The original
solicitation will be by mail. Following the original solicitation, certain
individual shareholders may be further solicited through telephonic or other
oral communications from management. Management may elect to use specially
engaged employees or paid solicitors, and the cost of these services will be
borne by the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table sets forth certain information with respect to (i)
each person who, as of April 1, 1997, is known to the Company to be the
beneficial owner of more than 5% of any class of its Common Stock, (ii) each
director of the Company and (iii) all directors and executive officers as a
group.
<CAPTION>
Shares of Common Stock Percent of
Name and Address (6) Position With Company Beneficially Owned Class
Directors and Executive Officers:
<S> <C> <C> <C>
Hugo R. Camou Chairman of the Board 57,272,767 (1) 75.3%
Gary L. Luick President, CEO
and Director -- -- %
John A. Robinson, Jr.(2)
President,
Decom Systems, Inc. 1,769,685 (2) 2.3%
Fernando Molina Director -- -- %
Fernando Pliego Director -- -- %
All directors and
executive officers -- 61,127,157 (3) 77.2%
officers as a group
(9 persons)(3)
Other Shareholders:
ISA Investments Corporation 57,272,767 (4) 75.3%
Orizaba No. 182 Col. Rima
C.P. 06700 Mexico DF (4)
Renaissance Capital Partners II, LTD. 11,488,322 (5) 13.3%
8080 North Central Expressway
Dallas, Texas 75206 (5)
_________________________
* Less than 1%
<FN>
(1)Includes 57,272,767 shares of Common Stock held directly by ISA
Investments Corporation. ISA and Mr. Camou and his immediate family are the
shareholders of ISA Investments Corporation. Mr. Camou is the majority
shareholder of ISA.
(2)Includes options to purchase 1,347,500 shares of Common Stock exercisable
within 60 days of April 1, 1997. Mr. Robinson resigned as a director of
the Company on April 1, 1997, and as the Company's Chief Executive Officer
and President on March 3, 1997. Mr. Robinson currently serves as the
president of the Company's wholly-owned subsidiary Decom Systems, Inc.
(3)Includes options to purchase 3,119,500 shares of Common Stock exercisable
within 60 days of April 1, 1997 and 52,272,767 shares of Common Stock
indirectly owned by Mr. Camou (See Note 2).
(4)ISA Investments Corporation is owned and controlled by ISA and Mr. Hugo R.
Camou and his immediate family. Mr. Hugo R. Camou is the majority
shareholder of ISA.
(5)Includes 1,333,500 shares of Common Stock issuable upon the conversion of
Series A preferred stock, 7,636,991 shares of Common Stock issuable upon
conversion of Series B preferred stock, and 1,244,240 shares of Common
Stock issuable upon conversion of the 6% Note.
(6)For purposes of this Proxy Statement, the address of Messrs. Camou, Luick, Molina,
Pliego and Robinson is 1939 Palomar Oaks Way, Carlsbad, CA 92009.
</FN>
</TABLE>
ELECTION OF DIRECTORS AND INFORMATION CONCERNING
DIRECTORS AND EXECUTIVE OFFICERS
(PROPOSAL 1)
General
The Directors and Executive Officers of the Company are elected annually.
The Bylaws of the Company provide for a Board of Directors of not less than
three nor more than seven, with the exact number to be fixed from time to time
by the Board of Directors. At the present time, the number of Directors is
fixed at four. The nominees receiving the highest number of affirmative votes
of the shares present in person or represented by proxy and entitled to vote
for them, are elected as Directors. Only votes cast for a nominee will be
counted in determining whether that nominee has been elected as Director.
Shareholders may withhold authority to vote for the entire slate nominated or,
by writing the name of an individual nominee in the space provided on the
proxy card, withhold the authority to vote for any individual nominee.
Abstentions, broker non-votes, and instructions on the accompanying proxy card
to withhold authority to vote for one or more of the nominees will result in
such nominee receiving fewer votes, but will not otherwise affect the outcome
of the vote. Should any nominee become unavailable to serve as a Director,
the proxies will be voted for such other person as the proxyholder may in its
discretion determine. To the best of the Company's knowledge, all nominees
are and will be available to serve.
Shares represented by the enclosed Proxy will be voted "FOR" the election
of the nominees, unless authority to vote for one or more nominees is
withheld.
Effective September 19, 1996, ISA became entitled to appoint and
thereafter nominate three of the members of the Company's Board of Directors.
The Board of Directors is also required to elect as Chairman of the Board, the
Director designated by ISA. The three individuals appointed by ISA on
September 19, 1996 to serve as members of the Company's Board of Directors
were Messrs. Hugo R. Camou; Fernando Molina and Fernando Pliego. In addition,
Renaissance Capital Partners II, Ltd. ("RenCap"), the holder of all of the
outstanding shares of the Company's Series B preferred stock, has the right to
select one Director to serve as an Advisory Director. An Advisory Director
has the right to be notified of and to attend all Board meetings, but does not
have the right to vote any matters before the Board. On September 19, 1996,
RenCap designated Mr. Vance Arnold, its Executive Vice President, as the
Advisory Director. Mr. Arnold has served as RenCap Executive Vice President
for the last five years. At the present time, RenCap has not designated an
Advisory Director for 1997; however, the Company believes Mr. Arnold will
continue as RenCap's designated Advisory Director.
On September 19, 1996, immediately after the appointment by ISA of
Messrs. Camou, Molina and Pliego to the Company's Board of Directors, Messrs.
Steven Borgardt and James Kenney resigned their positions as members of the
Company's Board of Directors. Mr. John A. Robinson, Jr., continued to serve
on the Board.
<TABLE>
Set out below are the names of, and certain information with respect to,
the Directors all of whom are also nominees, and Executive Officers of the
Company.
<CAPTION> Position Held
Name Age With Company
Directors and Nominees:
<S> <C> <C>
Hugo R. Camou(1)(2)(3) 40 Chairman of the Board
Gary L. Luick 56 President and
Chief Executive Officer
Fernando Molina(1)(2)(3) 57 Director
Fernando Pliego(2)(3) 57 Director
Executive Officers:
Steven Borgardt 44 Vice President Finance
and Chief Financial Officer
Richard Carrine 54 Vice President Manufacturing
John A. Robinson, Jr. 62 President, Decom Systems, Inc.
Robert White 48 Vice President Engineering
John Wiggins 46 Chief Operating Officer
__________________
<FN>
(1) Member of the Compensation Committee
(2) Member of the Audit Committee
(3) Member of the Stock Option Committee
</FN>
</TABLE>
Hugo R. Camou was appointed as the Company's Chairman of the Board of
Directors on September 19, 1996. Mr. Camou is the Chairman of the Board, CEO
and controlling shareholder of ISA. Mr. Camou founded ISA in 1988. He is 40
years old and holds a degree in mathematics and physics from the Instituto
Poletecnico Nacional in Mexico. Prior to founding ISA, Mr. Camou taught
computer science and mathematics for undergraduate and graduate university
programs in Mexico.
Gary L. Luick was appointed President and Chief Executive Officer of the
Company, effective March 3, 1997. Mr. Luick was also appointed to the
Company's Board of Directors on March 3, 1997. Mr. Luick, age 56, served as
President of GTI Corporation from 1989-1995 and as its CEO from 1991-1995.
GTI Corporation is a publicly-held corporation. Prior to joining GTI
Corporation in 1989, Mr. Luick served in various management roles at Allied-
Signal Corporation over a 10 year period. His responsibilities centered on
corporate development, including numerous acquisitions, divestitures and
turnarounds of subsidiaries. Mr. Luick is currently a director of Remec
Corporation, a publicly-held manufacturer of microwave modules for microwave
systems for the commercial wireless-communications market.
Fernando Molina was appointed as a director of the Company on September
19, 1996. Mr. Molina is the Executive Vice President of Grupo Embotellador
Mexicano, S.A. de C.V., the largest Pepsi Cola bottling plant and distributor
in Mexico. He also serves on the Board of Directors of Banco Nacional de
Mexico and Consorcio Azucarero Escorpion. Mr. Molina is a public accountant
with a degree from the ITAM University, and he is 57 years old.
Fernando Pliego was appointed as a director of the Company on September
19, 1996. Mr. Pliego serves as the Chief Executive Officer of three of the
companies comprising ISA. Mr. Pliego has more than twenty years of experience
in telecommunications in Mexico. Mr. Pliego holds a degree in Chemical
Engineering from the Universidad Nacional Autonoma de Mexico, and he is 57
years old.
Steven Borgardt was appointed the Company's Vice President Finance and
Chief Financial Officer in August 1993. Mr. Borgardt served as a Director of
the Company from September 13, 1995 to September 19, 1996. Since September
1981, Mr. Borgardt served in the capacities of Decom's Vice President Finance
or Chief Financial Officer. Mr. Borgardt holds a Bachelor of Science degree
in Accounting from San Diego State University and he is a Certified Public
Accountant in California.
Richard Carrine was appointed the Company's Vice President Manufacturing
in August 1993. Prior to August 1993, he served as Decom's Vice President
Manufacturing and Operations and in similar positions since September 1976.
John A. Robinson, Jr. served as the Company's Chairman of the Board of
Directors until September 19, 1996, and in varying capacities as an officer
and director since February 1987. On March 13, 1995, Mr. Robinson was
appointed to the additional positions of president and chief executive
officer. Mr. Robinson resigned his positions as the Company's President and
Chief Executive Officer on March 3, 1997 effective with the appointment of Mr.
Luick as Chief Executive Officer and President. Mr. Robinson presently serves
as the President of the Company's wholly-owned subsidiary, Decom Systems, Inc.
Mr. Robinson resigned as a director of the Company on April 1, 1997. Mr.
Robinson holds a BSEE degree from Bridgeport Engineering Institute.
Robert White joined the Company in September 1996 as Vice President
Engineering. Mr. White has over eighteen years of experience in management,
development and introduction of new mobile data products to the marketplace.
From 1967 to 1979, Mr. White served as the manager of the communications
system for Air Traffic Control for the Department of National Defense in
Trenton, Ontario Canada. From 1979 to 1991, White served as Manager of
Products Engineering for Mobile Data International (MDI) and from 1991 to
1996, Mr. White served as Director of Mobile Systems for RCC Consultants. Mr.
White holds a Bachelor of Science degree in Electrical Engineering.
John Wiggins joined the Company in April 1994, and was appointed Vice
President Operations, Mobile Data, in August 1995 and Chief Operating Officer
in June 1996. Mr. Wiggins has over 12 years experience in sales and software
applications support of mobile data communications systems. Prior to joining
the Company in 1994 as the general manager of the Company's European
operations, Mr. Wiggins served in various sales and engineering management
positions over a twelve year period with Motorola Inc. Mr. Wiggins holds a
Bachelors of Science degree in Computer Science from Knightsbridge University
in the U.K.
Interest of Management and Insiders in Material Transactions
None of the directors or officers of the Company, nor any person who
beneficially owns, directly or indirectly, shares carrying more than 10% of
the voting rights attached to all outstanding shares of Common Stock, nor any
associate or affiliate of the foregoing persons has any material interest,
direct or indirect, in any transaction since the commencement of the Company's
last completed fiscal year or in any proposed transaction which, in either
case, has or will materially affect the Company, except as disclosed in this
Proxy Statement.
There are no family relationships between any of the directors or
executive officers of the Company.
Information About The Board of Directors and Committees of the Board
In 1996, prior to September 18, 1996, the Board of Directors held 1
meeting. Subsequent to September 18, 1996, the Board of Directors held 2
meetings. No director attended less than 75% of such meetings. Independent
directors are entitled to receive an annual grant of options to purchase
shares of Common Stock under the Company's 1992 Option Plan. Directors who
are also officers of the Company or its subsidiaries receive no additional
compensation for their services as directors. All directors are reimbursed for
their expenses incurred to attend meetings.
The standing committees of the Board of Directors are the Compensation
Committee, Audit Committee and Stock Option Committee. The principal duties
of the Compensation Committee are to determine and review all compensation of
directors and officers of the Company, and to report to the Board of Directors
of the Company. The principal duties of the Audit Committee are to advise and
assist the Board of Directors in evaluating the performance of the Company's
independent auditors, including the scope and adequacy of the auditor's
examination, and to review with the auditors the accuracy and completeness of
the Company's financial statements and procedures. The principal duty of the
Stock Option Committee is to determine grants of stock options under the
Company's option plans.
The Compensation Committee and the Audit Committee held no meetings in
1996. The Stock Option Committee held no formal meetings in 1996, however,
options to purchase shares of Common Stock under the 1992 Option Plan were
granted by the Stock Option Committee on several occasions by unanimous
written consent.
Executive Compensation and Benefits
The compensation and benefits program of the Company is designed to
attract, retain, and motivate employees to operate and manage the Company for
the best interests of its shareholders.
Executive compensation is designed to provide incentives for those senior
members of management who are responsible for the Company's goals and
achievements. The compensation policy calls for base salaries, with the
opportunity for bonuses to reward outstanding performance, and a stock option
program.
<TABLE>
Summary Compensation Table
The following table and notes show the compensation provided to the Chief
Executive Officer and the other executive officers, who served as such at the
end of 1996, and whose annual compensation exceeded $100,000.
<CAPTION>
Long-Term
Compensation
Annual Compensation Stock Option All Other
Name and Position Year Salary ($) Bonus ($) Other($)(1) Shares (#) Compensation ($)(9)
<S> <C> <C> <C> <C> <C> <C>
John A. Robinson, Jr. (2) 1996 134,083 25,000 -- 1,615,000 (3) $1,156
Chief Executive Officer 1995 128,842 -- -- 430,000 --
and President 1994 136,177 -- -- -- --
John Wiggins (4) 1996 118,450 25,000 31,000 (5) 1,500,000 (6) $ 997
Chief Operating Officer 1995 114,692 -- -- 265,000 --
1994 20,190 -- -- -- --
Steven Borgardt 1996 102,080 25,000 -- 1,005,000 (7) $ 901
Vice President Finance 1995 95,576 -- -- 350,000 --
and Chief Financial Officer 1994 91,156 -- -- -- --
Richard Carrine 1996 93,650 25,000 -- 1,015,000 (8) $ 817
Vice President
Manufacturing 1995 91,153 -- -- 350,000 --
1994 95,006 -- -- -- --
____________________
<FN>
(1) In the interest of attracting and retaining qualified personnel, the
Company provides executive officers with certain other benefits, which may
include relocation allowances, automobile allowances, insurance and other
benefits. Unless otherwise noted, the cost of providing such personnel
benefits did not exceed, as to any individual named above, the lesser of
$25,000 or 10% of the total annual salary reported for the executive
officer.
(2) Includes compensation in 1995 as Chief Operating Officer through March 13,
1995 and as Chief Executive Officer thereafter. Includes compensation for
services as the Company's Chief Operating Officer and Decom's Chief
Executive Officer in 1994. Mr. Robinson resigned as the Company's
President and Chief Executive Officer effective March 3, 1997 and
presently serves as the President of the Company's wholly-owned
subsidiary, Decom Systems, Inc..
(3) Includes options to purchase 265,000 shares which were issued in a prior
year, and canceled and repriced in 1996.
(4) Includes compensation in 1996 as Chief Operating Officer and Vice
President Engineering, and in 1995 as Vice President Engineering.
(5) Includes a housing allowance of $16,000 for relocation to San Diego and
$15,000 in sales commissions.
(6) Includes options to purchase 250,000 shares which were issued in a prior
year, and canceled and repriced in 1996.
(7) Includes options to purchase 205,000 shares which were issued in a prior
year, and canceled and repriced in 1996.
(8) Includes options to purchase 215,000 shares issued in a prior year and
canceled and repriced in 1996.
(9) Company matching contributions to 401(k) savings plan.
</FN>
</TABLE>
Employment Agreements
Mr. Robinson entered into a letter agreement with ISA in 1996 pursuant to
which ISA has committed to cause the Company to retain the services of Mr.
Robinson in an executive position for three years. Mr. Robinson's current
base salary is $140,000. Mr. Robinson could be discharged only if he is
convicted of a felony. ISA has agreed to secure the Company's obligations
under the letter agreement with a letter of credit or similar instrument.
Messrs. Wiggins, Borgardt and Carrine entered into employment agreements
with the Company in 1996 providing initial base salaries of $125,000, $125,000
and $110,000, respectively. The term of each agreement is three years. The
agreements provide each officer an opportunity to earn an annual incentive
bonus of 30% of base salary, under a plan to be approved annually by the Board
of Directors. If the agreements are terminated by the Company without cause
or following a change of control, as those terms are defined in the
agreements, Messrs. Wiggins, Borgardt and Carrine are to receive the greater
of (i) 100% of their annual salary or (ii) the salary payable over the
remaining term of their contract. If the agreement is terminated by the
Executive Officer, the Executive Officer can, under defined circumstances,
receive 25% of his then current base salary as a severance benefit. The
agreements also provide, on a case by case basis, additional benefits such as
paid life insurance, and housing relocation and automobile allowances. The
value of these benefits, for any one Executive Officer, does not exceed 25% of
his annual base salary, except that Mr. Wiggins is entitled to receive an
annual housing allowance of $33,600.
In February 1997, the Company entered into an employment agreement with
Mr. Gary L. Luick, the Company's Chief Executive Officer and President. Under
the terms of the three year agreement, Mr. Luick is to receive an initial base
salary of $200,000 per year and a bonus in 1997 to be not less than $50,000.
In the event the employment agreement is terminated by the Company for good
cause, as defined in the agreement, Mr. Luick is to receive a severance
benefit equal to 25% of his base salary. In the event the employment
agreement is terminated by the Company for any reason other than good cause,
then Mr. Luick will be entitled to receive the greater of (i) 100% of his
annual base salary or (ii) the balance of the salary obligations payable to
Mr. Luick over the remaining term of the contract. In addition, Mr. Luick was
granted an option to purchase 3,000,000 shares of common stock under the
Company's 1992 Stock Option Plan. The option is exercisable in three equal
annual installments of 1,000,000 shares each beginning on February 17, 1998.
The exercise price is $.33 per share which was the approximate fair market
value per share on the date of grant. The option expires in February 2002.
Stock Options Granted During Fiscal Year
<TABLE>
The following table shows certain information concerning stock options
granted during the year ended December 31, 1996, to the named Executive
Officers.
<CAPTION>
1996 Stock Option Grants
% of Total
Options Options Granted Exercise Expiration
Name Granted to Employees Price Date
<S> <C> <C> <C> <C>
John A. Robinson, Jr. 1,615,000 21% $.25 to $.40 2001
John Wiggins 1,500,000 20% $.20 to $.30 2001
Steven Borgardt 1,005,000 13% $.25 to $.40 2001
Richard Carrine 1,015,000 14% $.25 to $.40 2001
</TABLE>
In January 1996, options previously granted to certain employees and
officers, including Messrs. Robinson, Wiggins, Borgardt and Carrine, were
canceled and reissued at a new exercise price. Options to purchase 215,000,
175,000 and 175,000 shares of the Company's Common Stock, granted in 1995 at
an exercise price of $.50 to Messrs. Robinson, Borgardt and Carrine,
respectively, were canceled and new options for the same number of shares of
Common Stock were granted at a price of $.25 per share; and options to
purchase 250,000 shares of Common Stock issued to Mr. Wiggins at an average
exercise price of $.35 per share were canceled and a new option for the same
number of shares of Common Stock was granted at an exercise price of $.20 per
share. In addition, options to purchase 50,000, 40,000 and 30,000 shares of
Common Stock, issued at an exercise prijce of $1.40 per share in 1993 to
Messrs. Robinson, Carrine and Borgardt, respectively, were canceled in 1996
and new options granted at an exercise price of $.40 per share, and options
to purchase 250,000 shares of Common Stock at an average exercise price of
$.35 per share were canceled and new options for the same number of shares of
Common Stock were granted at an exercise price of $.20 per share. The
exercise price of the new options were granted at not less than the
approximate current market price of a share of Common Stock, as quoted by the
NASDAQ OTC Electronic Bulletin Board.
Stock Options Exercised During the Fiscal Year and Year-End Value of
Unexercised Options
<TABLE>
The following table sets forth information about stock options held by
the Company's named executive officers individually, as of December 31,
1996.
<CAPTION>
Aggregated Option Exercises in Last
Fiscal Year and FY-End Option Values
Shares Value Number of Value of Unexercised
Acquired on Realized Unexercised Options In-the Money Options($)(2)
Name Exercise (#) ($) (1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
John A. Robinson, Jr. -- -- 1,347,500 482,500 $159,125 $ 44,125
John Wiggins -- -- 682,000 833,000 94,700 83,300
Steven Borgardt -- -- 542,500 637,500 74,625 66,625
Richard Carrine -- -- 547,500 642,500 74,625 66,625
________________
<FN>
(1)Calculated by taking the difference between the fair market value of a
share of Common Stock at the time of exercise and the exercise price of
the option.
(2)Calculated by taking the difference between the fair market value of a
share of Common Stock at December 31, 1996 and the exercise price of the
options.
</FN>
</TABLE>
Summary of Coded Communications 1992 Stock Option Plan (as Amended)
(the "1992 Option Plan")
A summary of the material provisions of the 1992 Option Plan (as amended
on September 19, 1996) is set forth below.
The purpose of the 1992 Option Plan is to (i) enable the Company and its
subsidiaries to recruit and retain capable employees in a highly competitive
labor market for the successful operation of its businesses and (ii) provide
an additional incentive to non-employee directors, officers and other eligible
key employees upon whom rest major responsibilities for the successful
operation and management of the Company and its subsidiaries.
The 1992 Option Plan provides for the grant of incentive stock options
and non-qualified options. No incentive stock options have been granted to
date. Under the 1992 Option Plan, as amended, options may be granted to key
employees, officers and directors to purchase an aggregate of not more than
15% of the Company's outstanding shares of Common Stock and certain other
securities that are convertible into Common Stock. At December 31, 1996, the
1992 Option Plan was authorized to issue options for the purchase of
13,250,000 shares of Common Stock.
The 1992 Option Plan is administered by a committee (the "Committee") of
all of the current directors of the Company. The Committee is authorized to
determine the grant of options to eligible employees, the number of shares to
be covered by the option, the exercise date of each option, and the exercise
price of each option which, in the case of an incentive stock option can be no
less than fair market value at the date of grant, and in the case of a non-
qualified stock option can be no less than 75% of fair market value at the
date of grant.
Options may be granted under the 1992 Option Plan by the Committee to key
full or part-time employees of the Company and its subsidiaries.
Disinterested directors who are not also employees automatically receive
options covering a specified number of shares on their election or re-election
to the Board. Disinterested directors are granted options under the 1992
Option Plan as follows: (i) on the date when a disinterested director first
becomes a member of the Board of Directors, he or she will receive a one time
grant of a non-qualified option covering 50,000 common shares, which will
become exercisable for 20,000 shares 6 months after the date of grant and
15,000 shares in 2 annual installments beginning the first anniversary
following the date of grant and (ii) following re-election to the Board of
Directors at the annual meeting of shareholders, a grant of an option covering
50,000 common shares which is exercisable in 3 annual installments of
approximately 16,666 shares beginning the first anniversary following the date
of grant. All grants of options to disinterested directors will be at an
exercise price of not less than 85% of fair market value at the date of grant.
All options granted under the 1992 Option Plan to officers and other
eligible key employees may be exercisable only at a price which is not less
than 75% of the fair market value of the stock on the date of grant. Payment
of the exercise price may be made in cash, by certified check or in property
(including other securities of the Company) and may be subject to a deferred
payment arrangement that is a "cashless exercise" arrangement which meets the
requirements of Federal Reserve Board Regulation T. Taxes required to be
withheld at the time of exercise may be paid in cash, by certified check, by
the withholding of shares deliverable pursuant to the exercise, or by the
delivery of previously acquired shares. In addition, the Board may authorize
loans and loan guarantees, as the case may be, for the exercise price and
taxes due by reason of exercise of options granted under the 1992 Option Plan.
If an optionee's employment terminates, the exercisable portion of the
option generally remains exercisable for a fixed period of 3 months (12 months
where employment has terminated because of death or disability). In no case
may an option be exercised after the expiration of the option term. An option
may be exercised by the optionee or his guardian or legal representative.
The Committee has the authority to "reprice options" (i.e. to grant new
options in exchange for the cancellation of outstanding options).
Options granted to employees generally are made cumulatively exercisable
in installments, although the actual dates of exercise may be modified by the
Committee so long as the option holder's interest is not thereby diminished
without the option holder's consent. Options are exercisable no sooner than
six months after grant, or exercisable only under such conditions as the
Committee may establish, such as if the optionee remains employed until a
specified date, if specified performance goals have been met, or in the event
of a change of control.
Unless otherwise terminated by the Board of Directors, the 1992 Option
Plan will terminate on March 25, 2002. The Board of Directors may amend or
terminate the 1992 Option Plan at any time; however, once granted, no option
may be terminated and no amendment of the 1992 Stock Option Plan may adversely
affect any previously granted options without the consent of the option
holder.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Under the securities laws of the United States, the Company's directors,
officers and any person holding more than 10% of outstanding shares of Common
Stock are required to report their initial ownership of Common Stock and any
subsequent changes in ownership to the Securities and Exchange Commission.
Specific due dates for these reports have been established, and the Company is
required to disclose in this proxy statement any failure to file these reports
on a timely basis. Based solely on a review of the copies of such forms
furnished to the Company, the Company believes that from January 1, 1996
through December 31, 1996, its Directors, Officers and greater than 10%
beneficial owners complied with the Section 16(a) filing requirements, except
that Messrs. Camou, Molina and Pliego filed their respective Form 3, Initial
Statement of Beneficial Ownership of Securities three months late.
APPROVAL OF AMENDMENT TO CERTIFICATE OF INCORPORATION TO INCREASE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
(PROPOSAL 2)
The Board of Directors has unanimously approved an amendment of Article
4(A) of the Company's Certificate of Incorporation to increase the number of
authorized shares of Common Stock from 100,000,000 to 150,000,000. The Board
of Directors recommends that the Company's shareholders approve this
amendment. Approval of the amendment will give the Company the power to cause
a Certificate of Amendment with respect to the increase in the number of
authorized shares of Common Stock ("Certificate of Amendment") to be filed
with the Delaware Secretary of State on or after May 24, 1997 without further
action by the shareholders; provided, however, that the Company shall not be
obligated to file a Certificate of Amendment at any specified time or at all.
The Board of Directors believes it is in the Company's best interests to
increase the number of authorized shares of Common Stock in order to have
additional authorized shares available for issuance to meet business needs as
they arise. The Board of Directors believes that the availability of such
additional shares will provide the Company with the flexibility to issue
Common Stock for proper corporate purposes which may be identified by the
Board of Directors in the future, such as stock dividends, financings or
acquisitions. No such transactions are currently contemplated by the Company.
At April 1, 1997, there were 76,022,312 shares of Common Stock outstanding and
21,152,001 shares of Common Stock reserved for issuance for the conversion of
preferred stock and convertible debt, and the exercise of warrants and
outstanding options to purchase Common Stock granted under the 1992 Option
Plan. In the event all convertible securities and debt were converted to
Common Stock and all outstanding options and warrants exercised, there would
be 97,174,313 shares outstanding and the Company could only issue an
additional 2,825,687 shares of Common Stock.
If the proposed amendment to the Certificate of Incorporation is
approved, the authorized shares of Common Stock in excess of those issued and
reserved, as discussed above, will be available for issuance at such times and
for such corporate purposes as the Board of Directors may deem advisable
without further action by the Company's shareholders, except as may be
required by applicable laws or the rules of any stock exchange or national
securities association trading system on which the Company's securities may be
listed or traded. The Board of Directors do not intend to issue any Common
Stock except on terms that the Board deems to be in the best interests of the
Company and its then existing shareholders. Management has no arrangements,
agreements, understandings or plans at the present time for the issuance or
use of the additional shares of Common Stock proposed to be authorized.
Because holders of Common Stock do not have preemptive rights, any future
issuances of Common Stock could have a dilutive effect.
The full text of Article 4, as such is proposed to be amended, is as
follows:
"The total number of shares of capital stock which the Corporation
shall have authorization to issue is one hundred fifty-two million
(152,000,000) shares, of which one hundred fifty million
(150,000,000) shares shall be Common Stock, $.01 par value per
share, and two million (2,000,000) shares shall be preferred
stock, $.01 par value per share (the "Preferred Stock")."
The Company is presently authorized to issue 2,000,000 shares of
preferred stock. The proposed amendment to the Certificate of Incorporation
will not change the number of authorized shares of preferred stock.
The affirmative vote of the holders of a majority of the Company's
outstanding Common Stock and preferred stock voting as a single class is
required to approve this proposal. If approved by the shareholders, the
proposed amendment to the Certificate of Incorporation will become effective
upon the filing of a Certificate of Amendment with the Delaware Secretary of
State.
The Board of Directors recommend shareholders vote "FOR" the proposed
amendment to the Certificate of Incorporation.
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 3)
Unless marked to the contrary, proxies received will be voted "FOR" the
selection of the appointment of Coopers & Lybrand, LLP as independent public
accountants for the current year. A representative of Coopers & Lybrand, LLP
is expected to attend the Annual Meeting and be available to respond to
appropriate questions. The representative will also have an opportunity to
make a statement if he or she desires to do so. Coopers & Lybrand, LLP have
been the Company's independent accountants since 1987.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
for consideration at the Annual Meeting other than as stated in the Notice of
Annual Meeting. However, if any other matters are properly brought before the
Annual Meeting or any adjournment thereof (including the election of any
substitute for any of the foregoing nominees who is unable to, or for good
cause will not, serve on the Board of Directors), the proxyholders will have
the discretionary authority to vote the shares represented by proxy in
accordance with their best judgment.
Any proposal of a shareholder intended to be presented at the Company's
1998 Annual Meeting of Shareholders must submit such proposal no later than
February 25, 1998. Shareholder proposals should be submitted to Gary L.
Luick, President, Coded Communications Corporation, 1939 Palomar Oaks Way,
Carlsbad, CA 92009.
1996 ANNUAL REPORT ON FORM 10-KSB
The Company's Annual Report on Form 10-KSB, including the financial
statements and the financial schedules, required to be filed with the
Securities and Exchange Commission for the year ended December 31, 1996, will
be furnished without charge to any shareholders upon written request to:
Coded Communications Corporation, Investors Relations, 1939 Palomar Oaks Way,
Carlsbad, California 92009.
By Order of the Board of Directors
/s/ Gary L. Luick
Gary L. Luick,
Chief Executive Officer
Carlsbad, California
April 7, 1997
CODED COMMUNICATIONS CORPORATION
PROXY
FOR THE ANNUAL MEETING TO BE HELD MAY 23, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE MANAGEMENT OF THE COMPANY.
The undersigned, being a shareholder of Coded Communications Corporation
(the "Company"), hereby appoint(s) Hugo, R. Camou, Gary L. Luick, and
Steven Borgardt, as proxies with full power of substitution and authorizes
them or any of them, to attend the Annual Meeting of the Company to be held
on May 23, 1997, and at any adjournment thereof, and to vote all the shares
of Common Stock of the Company registered in the name of the undersigned
with respect to the matters set forth below as follows:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, 2 and 3.
1. ELECTION OF DIRECTORS:
o FOR ALL nominees listed o WITHHOLD AUTHORITY
below (except as marked to vote for ANY of the nominees listed
below to the contrary below)
NOMINEES: Hugo R. Camou, Gary L. Luick, Fernando Molina and
Fernando Pliego.
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the space below:
____________________________________________________________________
2. To approve an amendment to the Company's Certificate of Incorporation to
increase the number of authorized shares of Common Stock, $.01 par value
("Common Stock") from 100,000,000 to 150,000,000 shares.
o FOR o AGAINST
3. Proposal to ratify the selection of Coopers & Lybrand as independent
public accountants for the current year.
o FOR o AGAINST
4. With respect to the transaction of such other business as may properly
come before the Annual Meeting, as the proxyholders, in their sole discretion,
may see fit.
SHAREHOLDERS WHO ATTEND THE MEETING MAY VOTE IN PERSON EVEN THOUGH THEY
HAVE PREVIOUSLY MAILED THIS PROXY. PLEASE DATE, SIGN AND MAIL THIS PROXY
CARD IN THE ENCLOSED ENVELOPE.
Dated: , 1997
________________________ __________________________
SIGNATURE OF SHAREHOLDER SIGNATURE OF SHAREHOLDER
_______________________ _________________________
PRINT NAME PRINT NAME
IMPORTANT: Please date this Proxy and sign exactly as name(s) appear(s)
hereon. When signing as a fiduciary, please give your full title. Return
his Proxy promptly in the enclosed envelope
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1
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)
o Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Coded Communications Corporation (File No. 0 17574)________
(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):
o $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
or 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A./
o $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3)/
o 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:
________________________________________________________________________
o Fee paid previously with preliminary materials.
________________________________________________________________________
o 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:
________________________________________________________________________
