<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Preliminary 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:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
PROJECTAVISION, INC.
- - -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Not Applicable
-----------------------------------------------------------------------------
(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)(1) 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>
PRELIMINARY
PROXY STATEMENT
PROJECTAVISION, INC.
TWO PENN PLAZA
SUITE 640
NEW YORK, NEW YORK 10121
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
April 30, 1997
TO THE STOCKHOLDERS:
Notice is hereby given that the annual meeting of stockholders (the
"Annual Meeting") of Projectavision, Inc. (the "Company") has been called for
and will be held at 9:00 a.m., Eastern Standard Time, on Wednesday, April 30,
1996, at the Christiana Hilton, 100 Continental Drive, Newark, Delaware 19713
for the following purposes:
1. To elect Mr. Martin Holleran, Martin Fife and Richard Hickok to the
Board of Directors for a three (3) year term and to elect Dr. Craig Fields to
the Board of Directors for a one (1) year term, and until each of their
respective successors shall have been elected and qualified.
2. To ratify the appointment by the Board of Directors of Deloitte &
Touche, LLP to serve as the Company's independent certified public accountants
for the current calendar year; and
3. To obtain stockholder approval to amend the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock by
20,000,000, such that the aggregate number of authorized shares of Common Stock
would increase from 30,000,000 shares to 50,000,000 shares.
4. To consider and transact such other business as may properly come
before the Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 4, 1997
as the record date for the determination of the stockholders entitled to notice
of, and to vote at, the Annual Meeting or any adjournments thereof. The list of
stockholders entitled to vote at the Annual Meeting will be available for the
examination of any stockholder at the Company's offices at Two Penn Plaza, Suite
640, New York, NY 10121, for ten (10) days prior to April 30, 1997.
<PAGE>
By Order of the Board of Directors
/s/ Martin Holleran
----------------------------------------
Martin Holleran, Chief Executive Officer
and President
Dated: March 31, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE FILL IN, SIGN,
AND DATE THE PROXY SUBMITTED HEREWITH AND RETURN IT IN THE ENCLOSED STAMPED
ENVELOPE. THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO REVOKE SUCH
PROXY IN PERSON SHOULD YOU LATER DECIDE TO ATTEND THE MEETING. THE ENCLOSED
PROXY IS BEING SOLICITED BY THE BOARD OF DIRECTORS.
<PAGE>
PROJECTAVISION, INC.
PRELIMINARY PROXY STATEMENT
GENERAL
This proxy statement is furnished by the Board of Directors of
Projectavision, Inc., a Delaware corporation (the "Company"), with offices
located at Two Penn Plaza, Suite 640, New York, NY 10121, in connection with the
solicitation of proxies to be used at the annual meeting of stockholders of the
Company to be held on April 30, 1997, and at any adjournments thereof (the
"Annual Meeting"). This proxy statement will be mailed to stockholders beginning
approximately March 31, 1997. If a proxy in the accompanying form is
properly executed and returned, the shares represented thereby will be voted as
instructed on the proxy. Any proxy may be revoked by a stockholder prior to its
exercise upon written notice to the President of the Company, or by a
stockholder voting in person at the Annual Meeting.
All properly executed proxies received prior to the Annual Meeting will
be voted at the Annual Meeting in accordance with the instructions marked
thereon or otherwise as provided therein. Unless instructions to the contrary
are indicated, proxies forwarded to those stockholders who hold their voting
securities in "street name" will be voted FOR the election of Messrs. Holleran,
Fife and Hickok to the Board of Directors for a three (3) year term and FOR the
election Dr. Craig Fields to the Board of Directors for a one (1) year term, FOR
the ratification of the selection by the Board of Directors of Deloitte &
Touche, LLP as the independent certified public accountants of the Company for
the current calendar year, and FOR the amendment of the Company's Certificate of
Incorporation to increase the number of authorized shares of Common Stock by
20,000,000, such that the aggregate number of authorized shares of Common Stock
would increase from 30,000,000 shares to 50,000,000 shares.
A copy of the Company's Quarterly Report on Form 10-Q for the Periods
ending March 31, 1996, June 30, 1996 and September 30, 1996 and a copy of the
CompAny's Annual Report on Form 10-K for the year ended December 31, 1996,
accompanies this proxy statement.
An "abstention" on any proposal will be counted as present for purposes
of determining whether a quorum of shares is present at the Annual Meeting with
respect to the proposal on which the abstention is noted. Abstentions will be
counted as a vote "against" such proposal, except in the case of the election of
directors where an abstention will not be counted as a vote and will not affect
the outcome of the election. Under the Rules of the New York Stock Exchange,
which apply in part to the Annual Meeting, proposals 1, 2 and 3 are considered
"discretionary" proposals, which means that brokers who hold Company shares in
"street name" for customers are authorized to vote on such
<PAGE>
proposals on behalf of their customers unless expressly advised to the contrary.
However, each other proposal is considered a "non-discretionary" proposal, which
means that such brokers are not authorized to vote on such proposals without
specific voting instructions as to such proposal. Therefore, "broker non-votes"
on such non-discretionary proposals will not be counted as present for purposes
of determining whether a quorum of shares is present at the Annual Meeting.
The Board of Directors does not know of any matter to be proposed for
action at the meeting other than those described in this proxy statement. If
other matters properly come before the meeting, the persons named in the
accompanying proxy will act in accordance with their best judgment.
The cost of preparing, assembling and mailing this notice of meeting,
proxy statement, the enclosed annual report and proxy will be borne by the
Company. In addition to the solicitation of the proxies by use of the mails,
some of the officers and regular employees of the Company, without extra
remuneration, may solicit proxies personally or by telephone, telegraph, or
cable. The Company may also request brokerage houses, nominees, custodians and
fiduciaries to forward soliciting material to the beneficial owners of stock
held of record. The Company will reimburse such persons for their expenses in
forwarding soliciting material.
2
<PAGE>
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The Board of Directors has fixed the close of business on March 4, 1997
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of, and to vote at, the Annual Meeting. Only stockholders of
the Company's common stock, par value $.001 per share (the "Common Stock") on
the Record Date will be able to vote at the Annual Meeting, and each holder of
record will be entitled to one vote for each share of Common Stock held.
As of the Record Date, there were 16,512,755 shares of the Common Stock
issued and outstanding, all of which are entitled to one (1) vote per share at
the Annual Meeting. Holders of the Common Stock are entitled to vote on all
matters. Unless otherwise indicated herein, a majority of the votes represented
by shares present or represented by proxy at the Annual Meeting is required for
approval of each matter which will be submitted to stockholders.
Management of the Company knows of no business other than that
specified in Items 1, 2, 3, 4 and 5 of the Notice of Annual Meeting which will
be presented for consideration at the Annual Meeting. If any other matter is
properly presented, it is the intention of the persons named in the enclosed
proxy to vote in accordance with their best judgment.
The following table sets forth certain information, as of [Date of
Notice], known to the Company regarding beneficial ownership of the Company's
Common Stock by: (i) any holder of more than five percent of the outstanding
shares; (ii) the Company's directors; and (iii) the directors and officers of
the Company as a group:
Shares Percentage Shares Percentage
of (%) of of (%) of
Common Total Preferred Total
Stock Common Stock Preferred
Name Owned(1)(2) Stock(3) Owned Stock
----------- ---------- --------- ---------
Martin D. Fife (4) 261,668 1.6% - 0 - - 0 -
Projectavision, Inc.
Two Penn Plaza
Suite 640
New York, NY 10121
Richard S. Hickok (5) 100,000 .6% - 0 - - 0 -
Projectavision, Inc.
Two Penn Plaza
Suite 640
New York, NY 10121
3
<PAGE>
Marvin Maslow (6) 1,398,323 7.8% 25,000 7.1%
Projectavision, Inc.
Two Penn Plaza
Suite 640
New York, NY 10121
Jules Zimmerman (7) 120,000 .7% - 0 - - 0 -
16 Terrace Drive
Port Washington, NY 11050
Martin Holleran (8) 1,300,000 7.3% - 0 - - 0 -
Projectavision, Inc.
Two Penn Plaza
Suite 640
New York, NY 10121
Dr. Craig I. Fields (9) 150,000 .9% - 0 - - 0 -
1101 30th Street, N.W.
Suite 500
Washington, D.C. 20007
Sherman Langer (10) 152,000 .9% - 0 - - 0 -
Projectavision, Inc.
Two Penn Plaza
Suite 640
New York, NY 10121
All Directors, Nominees
and Officers Group
(consisting of
8 persons)(4)(5)(6)(7)
(8)(9)(10) 3,481,991 17.4% 50,000 6.0%
___________
(1) Except as otherwise indicated, all shares of Common Stock are
beneficially owned, and sole investment and voting power is held, by
the persons named.
(2) Gives effect to the reverse stock split of one-for-11.3467611 shares of
Common Stock in February, 1990, two-for-three shares of Common Stock in
July, 1990, and two-for-one stock split in March, 1992.
(3) Outstanding Common Stock does not include any shares of Common Stock
issuable upon the exercise of any outstanding options or warrants.
4
<PAGE>
(4) Includes 150,000 non-qualified options granted to and beneficially
owned by Mr. Fife to acquire 50,000 shares of Common Stock. Does not
include (i) 100 shares of non-voting Series A Preferred Stock issued to
Mr. Fife in connection with the Merger.
(5) Includes 100,000 non-qualified options granted to and beneficially
owned by Mr. Hickok to acquire an aggregate of 100,000 shares of Common
Stock of the Company.
(6) Includes (i) 1,375,000 shares of Common Stock subject to 1,375,000
non-qualified stock options. Mr. Maslow received 25,000 shares of
Series B Preferred Stock on May 15, 1992 for services rendered in the
second quarter of 1992. Mr. Maslow has agreed with the Company that he
shall not sell any of the shares of Series B Preferred Stock until the
earlier of (i) the Company having entered into a definitive revenue
generating agreement with a major manufacturer, licensor or
distributor with respect to the licensing of the company's technology,
or (ii) the company has effected an acquisition of another company,
license or technology that will result in the immediate realization of
revenues on the Company's behalf. In the event that neither (i) or (ii)
shall have occurred on or before May 15, 1997, Mr. Maslow has agreed to
return all of their shares of Series B Preferred Stock to the Company.
(7) Includes 120,000 non-qualified options granted to and beneficially
owned by Mr. Zimmerman to acquire 120,000 shares of the Company's
Common Stock.
(8) Includes 1,250,000 non-qualified options granted to and beneficially
owned by Mr. Holleran to acquire 1,250,000 shares of the Company's
Common Stock.
(9) Includes 150,000 non-qualified options granted to and beneficially
owned by Dr. Fields to acquire 150,000 shares of the Company's Common
Stock.
(10) Includes 152,000 non-qualified options granted to and beneficially
owned by Mr. Langer to acquire 152,000 shares of the Company's Common
Stock.
5
<PAGE>
PROPOSAL NO. 1:
General
The Board of Directors consisted of seven (7) persons in fiscal years
ended December 31, 1994, 1995, and eight (8) sessions in the fiscal year ended
1996. The Company has a classified Board of Directors which is divided into
three classes which means that the Company's Directors are elected for a
three-year term or until their successors are elected and qualify with a
plurality of votes cast in favor of their election.
Mr. Martin Holleran, Mr. Martin Fife, Mr. Richard Hickok and Dr. Craig
Fields are the nominees for election to the Board of Directors. Each of Mr.
Holleran, Mr. Fife and Mr. Hickok are being nominated for a three (3) year term
and Dr. Fields is being nominated for a one (1) year term. The Board is
nominating these four (4) individuals for different terms so as to re-establish
the appropriate number of Directors in each of the Company's three classes of
Directors in accordance with the Company's By-laws and Articles of
Incorporation.
The Board of Directors recommends a vote FOR the election as directors
of the nominees named herein. Unless otherwise directed by the stockholder
giving the proxy, the proxies forwarded to those stockholders who hold their
voting securities in "street name" will be voted "FOR" the election of the
nominees named above as directors. If any of the nominees should subsequently
become unavailable for election, the persons voting the accompanying proxy may
in their discretion vote for a substitute.
Board of Directors
The Board of Directors has the responsibility for establishing broad
corporate policies and for the overall performance of the Company. Although in
their capacity as Board members, they are not involved in day-to-day operating
details, members of the Board are kept informed of the Company's business by
various reports and documents sent to them as well as by operating and financial
reports made at Board meetings. The Board also held four (4) regular and six (6)
special meetings in 1996. All of the members of the Board attended at least
seventy-five (75) percent of the Board meetings in 1996 except for Messrs.
Fields and Fife who were unable to do so as a consequence of scheduling
conflicts.
The directors and executive officers of the Company are listed below,
followed by a brief description of their business experience during the past
five years.
6
<PAGE>
Term
Name Age Position Expires
- - ---- --- -------- -------
Marvin Maslow 59 Chairman of the Board 1999
of Directors
Martin Holleran(1) 54 President, Chief Executive
Officer and Director 1997
Martin D. Fife(1) 69 Director 1997
Craig I. Fields(2) 50 Director 1997
Richard S. Hickok(1) 71 Director 1997
Arthur L. Lipper Director 1998
Jules Zimmerman 63 Chief Financial Officer, 1998
Secretary and Director
Sherman Langer 50 Director 1999
- - ----------
(1) Director is being nominated for re-election for a three (3) year term
at the 1997 stockholders' meeting.
(2) Director is being nominated for re-election for a one (1) year term at
the 1997 stockholders' meeting.
Marvin Maslow, a founder of the Company, has served as Chairman of the
Board of Directors of the Company since its inception. Mr. Maslow also served as
the Company's Chief Executive Officer from inception through September 30, 1996,
when he voluntarily resigned as Chief Executive Officer of the Company,
endorsing the appointment by the Board of Mr. Martin Holleran as Chief Executive
Officer of the Company. Mr. Maslow also served as an officer and a director of
DKY, Inc. ("DKY"), the Company's predecessor in interest from October 1988 until
June 12, 1990, when DKY was merged into the Company. Mr. Maslow also served as
Chief Financial Officer of the Company from its inception until the consummation
of its initial public offering in August, 1990. From 1981 until he resigned in
June 1988, Mr. Maslow was an officer and member of the board of directors of
Bartlett Schlumberger & Company, Inc., a private investment company specializing
in providing expansion capital to emerging growth companies.
Martin J. Holleran, has served as President of the Company since
November, 1993. On September 30, 1996, Mr. Holleran became Chief Executive
Officer of the Company, at which time, he retained the title of President but
resigned as the Chief Operating Officer
7
<PAGE>
of the Company, a position which he had also held since November, 1993. Prior to
1993, Mr. Holleran served as President and Chief Executive Officer of Thomson
Consumer Electronics Marketing and Sales Company ("Thomson") from 1988 to 1992.
At Thomson, Mr. Holleran had overall responsibility for the marketing, sales and
distribution of the RCA and GE brands of consumer electronic products sold in
North and South America. From 1992 until 1993, Mr. Holleran was President and
Chief Operating Officer of Emerson Radio.
Martin D. Fife, a founder of the Company, has served on the Board of
Directors since its inception. In addition, Mr. Fife was the Secretary of the
Company from its inception until January 1993. Mr. Fife served as an officer and
a director of DKY from August 1988 until July 12, 1990 when DKY was merged into
the Company. Mr. Fife has been the Chairman of the Board of Directors of Skysat
Communication Network Corporation, a public company, since its inception in July
1992. Since 1987, Mr. Fife has been Chairman of the Board of Magar Inc., a
company of which he is a founder specializing in financial products and the
development of early stage companies. From 1985 to 1989, Mr. Fife was President
of Intergold USA, Inc., a Company involved in the sale and processing of
precious metals. From 1986 to 1989, Mr. Fife was President of Agremp Holdings
Incorporated, an operator of storage elevators. Since April 1992, Mr. Fife has
been a director of the Nova Group, a company engaged in the recycling of
industrial plastics. Since 1974, Mr. Fife has served as a director or trustee of
several investment companies advised by the Dreyfus Corporation, a registered
investment adviser, and currently serves as a director or trustee of the
following thirteen investment companies: The Dreyfus Fund Incorporated, Dreyfus
Liquid Assets, Inc., Dreyfus Municipal Income, Inc., Dreyfus New York Municipal
Income, Inc., Dreyfus California Municipal Income, Inc., Dreyfus Worldwide
Dollar Money Market Fund, Inc., Dreyfus Short-Term Fund, Inc., Dreyfus
Short-Term Income Fund, Inc., Dreyfus Asset Allocation Fund, Inc., Dreyfus
Growth Allocation Fund, Inc., Dreyfus Institutional Short-Term Treasury Fund,
Dreyfus Short-Intermediate Government Fund and Dreyfus Short-Intermediate
Municipal Bond Fund.
Dr. Craig I. Fields has served as a Director since September 1994 and
has been Chairman of the Company's Business and Technical Advisory Board since
January 1, 1993. From April 1989 to April 1990, Dr. Fields was the Director of
the United States Government's Defense Advanced Research Projects Agency
(DARPA). From July 1990 to June 1994, Dr. Fields was the Chairman and Chief
Executive Officer of the Microelectronics and Computer Technology Corporation
(MCC). Since September 1994, Dr. Fields has served as Vice Chairman of Alliance
Gaming Corporation (formerly known as United Gaming, Incorporated), a
diversified entertainment company in the gaming industry. Dr. Fields currently
serves as the Chairman of the Defense Science Board, an advisory board to the
Secretary of Defense. Dr. Fields also serves on the Science and Technology
8
<PAGE>
Advisory Panel supporting the Director of Central Intelligence; on the United
States Advisory Council on the National Information Infrastructure; and on the
US-Israel Science and Technology Commission. Dr. Fields is also a member of the
Board of ENSCO, Perot Systems Corporation and Intertech. Dr. Fields is on the
Advisory Boards of SRI International, United Technologies Corporation and the
Economic Strategy Institute. Dr. Fields is also an advisor to SAIC. In 1988, Dr.
Fields was awarded the President's Distinguished Executive Rank Award for
outstanding service, and in 1990 the President's Meritorious Executive Rank
Award.
Richard S. Hickok, a certified public accountant, served as a Director
of the Company from December 1988 to March 1989. Mr. Hickok has continuously
served as a Director of the Company since February 1990. Since October 1989, Mr.
Hickok has served as an officer, director and stockholder of Hickok Associates,
Inc., a company that provides financial consulting services ("Hickok
Associates"). From 1948 to 1983, Mr. Hickok was associated with KMG Main
Hurdman, Certified Public Accountants in various capacities. Mr. Hickok served
as Chairman of the Board of KMG Main Hurdman from 1981 to 1983, and in 1983 he
retired and was elected Chairman Emeritus. Since 1983 Mr. Hickok has been a
financial consultant. During the past five years Mr. Hickok also has served as a
director of Marsh McLennan Companies, Inc., Comstock Resources, Inc., Marcam,
Inc. and Geonix, Inc.
Arthur Lipper III, is an experienced, independent investment banker and
corporate advisor, and has served as a Director of the Company since March,
1996. He has a particular interest in assisting early stage, growing
enterprises. He is also an established author and lecturer on subjects relating
to investing in and financing businesses. His most recent book is entitled The
Guide for Venture Investing Angels - Financing and Investing in Private
Companies. He is also a strong advocate of independent members of boards of
directors taking an active role in representing the interests of the owners of
the companies in the management of the business. He has been a member of the New
York Stock Exchange and many other stock and commodity exchanges. Mr. Lipper has
been an advisor to the Company and has served on tits Business and Technical
Advisory Committee since 1993.
Jules Zimmerman has served as a Director since January 1993, as
Secretary of the Company since February 1994 and as the Chief Financial Officer
of the Company since 1990. He is presently President and Chief Executive Officer
of Hickok Associates, Inc. Mr. Zimmerman was employed by Avon Products Inc. for
12 years and served as Avon's Senior Vice President and Chief Financial Officer
from 1984 to 1988. From 1992 through 1995, Mr. Zimmerman was a member of the
Board of Directors of Winners All International, as well as its
predecessor-in-interest, National Child Care Company. He is a Director of the GP
Financial and was the President of the
9
<PAGE>
New York Chapter of the National Association of Corporate Directors from
September 1990 through December 1992.
Sherman Langer has been the Company's Senior Vice President of
Marketing and Sales since October 1994 and has served as a member of the Board
since February, 1996. Mr. Langer was a consultant to the Company from February
1994 until October 1994. From June 1988 through January 1994, Mr. Langer was the
General Manager of the Consumer LCD Products Division of the Sharp Electronics
Corporation.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of
its Common Stock, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission") and the National
Association of Securities Dealers, Inc. Officers, directors and greater than ten
percent stockholders are required by the Commission to furnish the Company with
copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
or written representations from certain reporting persons that no reports on
Form 5 were required for those persons, the Company believes that during 1996
all filing requirements applicable to its officers, directors and greater than
ten percent stockholders were complied with.
10
<PAGE>
Executive Compensation
The following table sets forth the cash compensation paid by the Company to
executive officers of the Company for the year ended December 31, 1996 whose
total annual salary and bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
----------------------------------------------------
Annual Compensation Awards Payouts
---------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Re- All
Annual stricted other
Compen- Stock LTIP Compen-
Name and sation Awards Options/ Payouts sation
Principal Position Year Salary($) Bonus($) $ $ SARs(#) $ $
- - ------------------ ---- --------- -------- ------ ------ ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Marvin Maslow,(1) 1996 $150,000 $ -0- $ -0- $ -0- 1,000,000(1) $ -0- $100,000(2)
Chief Executive 1995 $150,000 $ -0- $ -0- $ -0- -0- $ -0- $ -0-
Officer, Chairman 1994 $150,000 $ -0- $ -0- $ -0- 250,000 $ -0- $ -0-
of the Board of
Directors
Martin Holleran, 1996 $180,000 $ -0- $ -0- $ -0- 1,000,000(1) $ -0- $100,000(5)
President, Chief 1995 $180,000 $ -0- $ -0- $ -0- 50,000(3) $ -0- $ -0-
Operating Officer 1994 $180,000 $ -0- $ -0- $ -0-(3) 375,000 $ -0- $ -0-
and Director
Sherman Langer 1996 $130,000 $30,000 $ -0- $ -0- 100,000 $ -0- $ -0-
Senior Vice
President of
Marketing and
Sales and
Director
</TABLE>
11
<PAGE>
- - ----------
(1) On March 12, 1996, the Company cancelled 187,500 unvested stock options
granted in 1994 having an exercise price of $5.375 per share and
granted Mr. Maslow 1,000,000 non-qualified stock options having an
exercise price of $4.375 per share, which exercise price was
subsequently reduced to $3.00 on January 9, 1997. To date, 333,333 of
these options have vested, and the balance vest upon the Company
achieving certain milestones.
(2) Represents a one-time cost-of-living adjustment made to Mr. Maslow's
July 1990 employment agreement with the Company. Mr. Maslow also has a
$2,000 per month non-accountable expense allowance for business and
entertaining and other benefits. In addition, in accordance with Mr.
Maslow's new executive employment agreement entered into with the
Company as of March 1, 1997, the Company has agreed to maintain, at its
expense, a $1,000,000 life insurance policy on Mr. Maslow's life for
the benefit of his wife.
(3) Mr. Holleran had a restricted stock award of 50,000 shares of common
stock pursuant to his Employment Agreement with the Company dated
November 1, 1993. The vesting schedule relative to all 50,000 shares of
restricted common stock was amended by the Board of Directors on
October 21, 1994. Fifty percent (50%) of such 50,000 shares previously
vested in annual increments of 1/3 each commencing November 1, 1994,
and the other fifty percent (50%) of such shares vested in annual
increments of 1/3 each, commencing November 1, 1994, provided that
certain performance criteria were met. All such 50,000 shares vested on
January 1, 1995. In December 1995, Mr. Holleran's Employment Agreement
with the Company was amended to cancel the restricted stock award and
replace it with 50,000 non-qualified stock options exercisable at the
then current market price of $4.375 per share.
(4) On March 12, 1996, the Company cancelled 125,000 unvested stock options
granted in 1994 having an exercise price of $5.375 per share and
granted Mr. Holleran 1,000,000 non-qualified stock options having an
exercise price of $4.375 per share, which exercise price was
subsequently reduced to $3.00 on January 9, 1997. To date, 333,333 of
these options have vested, and the balance vest upon the Company
achieving certain milestones.
(5) Represents a one-time cost-of-living adjustment made to Mr. Holleran's
1993 employment agreement with the Company. In
12
<PAGE>
addition, in accordance with Mr. Holleran's new executive employment
agreement entered into with the Company as of March 1, 1997, the
Company has agreed to provide other benefits to Mr. Holleran as well as
to maintain, at the Company's expense, a $1,000,000 life insurance
policy on Mr. Holleran's life, for the benefit of his wife.
13
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at Fiscal at Fiscal
Year End (#) Year End ($)
Shares
Name and Acquired on Value Exercisable/ Exercisable/
Principal Position Exercise (#) Realized ($) Unexercisable Unexercisable
- - ------------------ ------------ ------------ ---------------------- ----------------------
<S> <C> <C> <C> <C>
Marvin Maslow -0- N/A 708,333 Exercisable/ 0/0
Chief Executive 666,664 Unexercisable
Officer, Chairman
of the Board of
Directors
Martin Holleran, -0- N/A 583,333 Exercisable/ 0/0
President and Chief 666,664 Unexercisable
Operating Officer
Martin Fife, -0- N/A 125,000 Exercisable/ 0/0
Vice Chairman of the 25,000 Unexercisable
Board of Directors
Jules Zimmerman, -0- N/A 95,000 Exercisable/ 0/0
Chief Financial 25,000 Unexercisable
Officer and
Director
</TABLE>
14
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at Fiscal at Fiscal
Year End (#) Year End ($)
Shares
Name and Acquired on Value Exercisable/ Exercisable/
Principal Position Exercise (#) Realized ($) Unexercisable Unexercisable
- - ------------------ ------------ ------------ ---------------------- ----------------------
(cont'd)
<S> <C> <C> <C> <C>
Sherman Langer, -0- N/A 152,000 Exercisable $7,875/0
Senior Vice President
of Marketing and
Sales and Director
Craig Fields, -0- N/A 108,332 Exercisable/ 0/0
Director 41,668 Unexercisable
Richard Hickok, -0- N/A 75,000 Exercisable/ 0/0
Director 25,000 Unexercisable
Arthur Lipper, -0- N/A 66,666 Exercisable/ 0/0
Director
</TABLE>
15
<PAGE>
Performance Graph
[To be inserted]
16
<PAGE>
Board Classification and Committees and Advisory Board
The Company adopted a classified Board of Directors in February, 1990.
The Board of Directors presently consists of eight members divided into three
classes. In accordance with the terms of its proposed settlement with Mr.
Eugene Dolgoff, a former officer and director of the Company, and Subanue
Dolgoff, his wife, and in order to realign the classes such that the term of
office of each Director in a given class expires at the third annual meeting of
stockholders following his election, Dr. Fields is being nominated for
re-election for a one (1) year term at the Company's 1997 Annual Meeting. The
terms of the settlement with the Dolgoffs were previously mailed to
stockholders in a Notice of Settlement dated March __, 1997. Subsequent to the
1997 annual meeting, the Company will have three (3) Directors whose term
expires in 1999, three (3) Directors whose term expires in 2000 and two (2)
Directors whose term expires in 1998. Having a classified Board of Directors
may be viewed as inhibiting a change in control of the Company and having
possible anti-takeover effects. Officers of the Company serve at the discretion
of the Board of Directors.
The Company has an Audit Committee, a Compensation Committee and an
Executive Committee. The Audit Committee reviews the engagement of the
independent accountants, reviews and approves the scope of the annual audit
undertaken by the independent accountants and reviews the independence of the
accounting firm. The Audit Committee also reviews the audit and non-audit fees
of the independent accountants and the adequacy of the Company's internal
control procedures. The Audit Committee is presently comprised of Richard S.
Hickok, Jules Zimmerman and Martin D. Fife. The Audit Committee held one (1)
meeting during 1996. The Compensation Committee reviews compensation issues
relating to executive management and makes recommendations with respect thereto
to the Board of Directors. The Compensation Committee is presently comprised of
Jules Zimmerman, Richard Hickok, Martin Fife and Craig Fields. The Compensation
Committee held one (1) meeting in 1996. The Executive Committee exercises all
the powers and authority of the Board of Directors in the management and affairs
of the Company between meetings of the Board of Directors, to the extent
permitted by law. However, the Executive Committee may not take any action
unless a meeting of the Board of Directors cannot be convened within three days
after notice thereof. The current members of the Executive Committee are Martin
D. Fife, Martin Holleran and Marvin Maslow. The Executive Committee had one (1)
meeting in 1996. The Company formed a Special Executive Committee in 1995 to
deal with all matters relative to certain litigations in which the Company is a
defendant. The Special Executive Committee is not empowered to make any
decisions on behalf of the Board of Directors. The Special Executive Committee
is comprised of Marvin Maslow, Martin Holleran, Martin Fife, Jules Zimmerman,
Richard Hickok and Craig Fields. The Special Executive Committee held one (1)
meeting in 1996.
17
<PAGE>
Except for Messrs. Fields and Lipper, each member of the Board of
Directors who is not an officer or employee of the Company receives $8,000 per
year, plus $1,000 for each Board of Directors or committee meetings attended for
serving as Director. In 1996, Dr. Fields received an aggregate of $24,000 from
the Company and Arthur Lipper (and his affiliated entities) received an
aggregate of $50,000 from the Company. These sums include payments to Messrs.
Fields and Lipper by the Company for various consulting services provided by
each of them to the Company in 1996, which services were in addition to their
duties as an outside Director. The Company reimburses its Directors for
out-of-pocket expenses incurred in connection with meetings of the Board of
Directors or committee meetings attended. There are no family relationships
among any Directors or officers.
The Company has a Business and Technical Advisory Board that monitors
and evaluates technical aspects of the Company's business and the business of
other companies, providing reports, advice, data and recommendations to the
Company's executive management and Board of Directors periodically with respect
thereto. The members of the Business and Technical Advisory Board are Dr. Craig
J. Fields, a Director of the Company and Chairman of the Technical and Advisory
Board, Dr. Donald McCoy, a consultant to the Company, Mr. Arthur Lipper, a
Director of the Company, and Mr. Humbert Powell.
Executive Employment Agreements
The Company entered into an employment agreement in July 1990 with
Marvin Maslow to serve as Chief Executive Officer of the Company. Mr. Maslow's
employment agreement, which was to initially expire in July, 1995, was
automatically extended in January 1995 by its terms for an additional 30 months.
That employment agreement was terminated and replaced with a new executive
employment agreement effective March 1, 1997. Under the terms of his new
employment agreement, Mr. Maslow receives the same salary and benefits that he
received under his old employment agreement which were a salary of $150,000 per
year, a $2,000 per month non-accountable expenses allowance, and other benefits.
In addition, the Company is providing a $1,000,000 life insurance policy on Mr.
Maslow's life for the benefit of his wife. Mr. Maslow is required to devote
substantially all of his time to the business of the Company. The term of Mr.
Maslow's new employment agreement is six (6) years with a two-year extension,
and it contains change in control provisions.
The Company entered into a three (3) year employment agreement with Mr.
Martin Holleran in November 1993 to serve as the Company's President and Chief
Operating Officer at a salary of $180,000 per year. Upon the expiration of this
agreement (which was orally extended by the parties subsequent to its term), the
Company
18
<PAGE>
entered into a new executive employment agreement with Mr. Holleran effective
March 1, 1997. Under his new executive employment agreement, Mr. Holleran
receives a salary of $220,000 per year and other benefits and is required to
devote all of his time to the business of the Company. In addition, the Company
provides to Mr. Holleran a $1,000,000 life insurance policy for the benefit of
his wife. The term of Mr. Holleran's new executive employment agreement is six
(6) years with a two-year extension, and it contains change in control
provisions.
Effective January 1, 1997, the Company entered into an executive
employment agreement with Mr. Sherman Langer. The term of Mr. Langer's
employment agreement is three (3) years and provides for a salary of $165,000
per year and also contains certain change in control provisions.
Each of Messrs. Maslow, Holleran and Langer have agreed not to compete
with the Company during the term of his respective employment agreement or for a
period of two years after the termination thereof. All of the executive
employment agreements contain termination for cause provisions.
Subsequent to the closing of the Company's initial public offering in
1990, the Company retained Jules Zimmerman as Chief Financial Officer of the
Company. In connection therewith, the Company entered into a consulting
agreement with Mr. Zimmerman and Hickok Associates whereby the Company is billed
on an hourly basis for the work performed by Mr. Zimmerman. Hickok Associates is
a financial consulting company of which Richard S. Hickok, a Director of the
Company, and Jules Zimmerman are officers, directors and stockholders.
19
<PAGE>
PROPOSAL NO. 2:
RATIFICATION OF SELECTION
OF DELOITTE & TOUCHE, LLP
AS INDEPENDENT AUDITORS
The Board of Directors has selected the firm of Deloitte & Touche, LLP
to serve as independent certified public accountants and to audit the accounts
for the Company for 1997. The firm of Deloitte & Touche, LLP has previously
audited the Company's financial statements. The Company is advised that neither
that firm nor any of its partners has any material direct or indirect
relationship with the Company. The Board of Directors considers Deloitte &
Touche, LLP to be well qualified for the function of serving as the Company's
auditors. The Delaware Business Corporation Law does not require the approval of
the selection of auditors by the Company's stockholders, but in view of the
importance of the financial statement to stockholders, the Board of Directors
deems it desirable that they pass upon its selection of auditors. In the event
the stockholders disapprove of the selection, the Board of Directors will
consider the selection of other auditors. The Board of Directors recommends that
you vote in favor of the above proposal in view of the familiarity of Deloitte &
Touche LLP with the Company's financial and other affairs due to its previous
service as auditors for the Company.
A representative of Deloitte & Touche, LLP is expected to be present at
the Annual Meeting with the opportunity to make a statement if he desires to do
so, and is expected to be available to respond to appropriate questions.
The Board of Directors recommends a vote FOR the ratification of the
selection of Deloitte & Touche, LLP as the Company's independent auditors.
Unless otherwise directed by the stockholder giving the proxy, proxies forwarded
to those stockholders who hold their voting securities in "street name" will be
voted "FOR" the ratification of the selection by the Board of Directors of
Deloitte & Touche LLP as the Company's independent certified public auditors for
1997.
20
<PAGE>
PROPOSAL NO. 3:
AMENDMENT OF CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK
The Company is presently authorized to issue 30,000,000 shares of
Common Stock. As of March 4, 1997, the record date, of the 30,000,000 shares
authorized, 16,512,755 shares were issued and outstanding, 6,000,000 shares were
reserved for issuance under the Company's various benefit plans, 351,258 shares
were reserved for issuance upon conversion of the Company's Series B Preferred
Stock, 2,000,000 shares were reserved for issuance upon conversion of the
Company's Series C Preferred Stock, 2,000,000 shares were reserved for issuance
upon conversion of the Company's Series D Preferred Stock, 1,732,850 shares were
reserved for issuance pursuant to the exercise of outstanding Warrants, leaving
a balance available for issuance of 1,403,137. The Company's Common Stock has no
preemptive or other subscription rights, and there are no conversion rights or
redemption or sinking fund provisions with respect to such shares. An
affirmative vote of at least a majority of the outstanding shares of Common
Stock is necessary for approval.
The Board of Directors of the Company at a meeting held on March 24,
1997 adopted resolutions to amend, subject to stockholder approval, ARTICLE
FOURTH of the Company's Certificate of Incorporation to authorize an additional
20,000,000 shares of Common Stock. Other than increasing the aggregate number of
authorized shares of Common Stock from 30,000,000 shares to 50,000,000 shares,
the amendment in no way changes the Company's Certificate of Incorporation.
Other than the 28,596,863 shares to be reserved for issuances discussed
above, the Company has no specific plans, arrangements, or understandings for
the issuance of the additional shares of Common Stock. The additional authorized
shares would be available for raising additional capital, employee benefit
plans, acquisitions, stock splits and other purposes, at the discretion of the
Board of Directors of the Company without, in most cases, the delays and
expenses attendant to obtaining further stockholder approval, thus enabling the
Company to provide needed flexibility for future financial and capital
requirements so that proper advantage could be taken of propitious market
conditions. While any additional issuances of the Company's securities (except
in the event of a stock split) would dilute the ownership of existing security
holders, the Board believes that any potential dilution is outweighed by the
flexibility and access to capital afforded by the additional authorized capital.
The Board of Directors recommends a vote FOR the approval of the
amendment to the Certificate of Incorporation to increase the
21
<PAGE>
number of authorized shares of Common Stock. Unless otherwise directed by the
stockholder giving the proxy, proxies forwarded to those stockholders who hold
their voting securities in "street name" will be voted "FOR" the amendment to
the Company's Certificate of Incorporation increasing the number of authorized
shares of Common Stock.
22
<PAGE>
STOCKHOLDERS PROPOSALS
Proposals of stockholders intended to be presented at the 1998 annual
meeting must be received in writing, by the President of the Company at its
offices by December 31, 1997, in order to be considered for inclusion in the
Company's proxy statement relating to that meeting.
By Order of the Board of Directors
/s/ Martin Holleran
----------------------------------------
Martin Holleran, Chief Executive Officer
and President
23
<PAGE>
PROJECTAVISION, INC.
THIS PROXY IS SOLICITED ON BEHALF
OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Marvin Maslow and Jules Zimmerman as
proxies (the "Proxies"), each with power of substitution and resubstitution, to
vote all shares of Common Stock, $.0001 par value per share, of Projectavision,
Inc. (the "Company") held of record by the undersigned on _________, 1997 at the
Annual Meeting of Stockholders to be held at the Christiana Hilton, 100
Continental Drive, Newark, Delaware 19713 on Wednesday, [April 30], 1997 at 9:00
a.m.. Eastern Standard Time, or at any adjournments thereof, as directed below,
and in their discretion on all other matters coming before the meeting or any
adjournments thereof.
Please mark boxes / / in blue or black ink.
Proposal 1. Election of three (3 ) Directors: Martin Holleran
------- -- ------------------
Martin Fife and Richard Hickok for a 3 year
--------------- -------------- -----
term, and Craig Fields for a 1 year term.
--------------- -----
(Mark only ONE of the two boxes relative to this Proposal)
/ / VOTE FOR all nominees named above except those who may be
named on this line: ___________________________________
(or)
/ / VOTE WITHHELD as to all nominees named above
Proposal 2. Proposal to ratify appointment by the Board of
Directors of Deloitte & Touche, LLP as the Company's
independent certified public accountants for the
current calendar year:
FOR / / AGAINST / / ABSTAIN / /
---- ---- ----
Proposal 3. Proposal to obtain stockholder approval to amend
the Company's Certificate of Incorporation to
increase the number of authorized shares of common
stock by 20,000,000, such that the aggregate number
of authorized shares of common stock would increase
from 30,000,000 shares to 50,000,000 shares:
FOR / / AGAINST / / ABSTAIN / /
---- ---- ----
<PAGE>
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
When properly executed, this Proxy will be voted as directed. If no
direction is made, Proxies representing shares of Common Stock held in "street
name" will be voted "FOR" Proposals 1, 2 and 3 and only if routine.
Please mark, date, sign and return this Proxy promptly in the enclosed envelope.
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney or executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: ________________, 1997
X________________________________________
Signature
X________________________________________
Print Name(s)
X________________________________________
Signature, if held jointly
