<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
PROJECTAVISION, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(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>
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 9:30 a.m., Eastern Daylight Savings Time, on Wednesday,
April 30, 1997, 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.
By Order of the Board of Directors
/s/ Martin Holleran
---------------------------------
Martin Holleran, Chief Executive Officer
and President
Dated: April 3, 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.
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 April 3, 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 properly executed and
returned, 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
proposals on behalf of their customers unless expressly advised to the
contrary.
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, quarterly reports, notice of
settlement 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.
<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 and 4 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 the Record Date,
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:
<TABLE>
<CAPTION>
Shares Percentage Shares Percentage
of (%) of of (%) of
Common Total Preferred Total
Stock Common Stock Preferred
Name Owned(1)(2) Stock(3) Owned Stock
---- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Martin D. Fife (4) .............................. 261,668 1.6% - 0 - -0-
405 Lexington Ave.
New York, NY 10174
Richard S. Hickok (5) ........................... 105,000 .6% - 0 - -0-
11 Deep Pond Circle
South Orleans, Ma. 02662
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-
20 West 64th Street
New York, NY 10023
Martin Holleran (8) ............................. 1,300,000 7.3% - 0 - -0-
Projectavision, Inc.
Two Penn Plaza
Suite 640
New York, NY 10121
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Shares Percentage Shares Percentage
of (%) of of (%) of
Common Total Preferred Total
Stock Common Stock Preferred
Name Owned(1)(2) Stock(3) Owned Stock
---- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
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
Arthur Lipper ................................... -0- -0- -0- -0-
14911 Carninito Ledera
Del Mar, Ca. 92014
All Directors, Nominees and Officers as a Group
(consisting of 8 persons)(4)(5)(6)(7)
(8)(9)(10) .................................... 3,486,991 17.6% 50,000 6.0%
</TABLE>
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(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) Includes 150,000 non-qualified options granted to and beneficially owned
by Mr. Fife to acquire 150,000 shares of Common Stock. Does not include
100 shares of non-voting Series A Preferred Stock issued to Mr. Fife.
(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 non-qualified stock options granted to and
beneficially owned by Mr. Maslow to acquire an aggregate of 1,375,000
shares of Common Stock. 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 his 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.
3
<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) directors 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 and 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 balance
the size of its three (3) classes.
The Board of Directors recommends a vote FOR the election as directors of
the nominees named herein. Unless properly executed and returned, 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.
<TABLE>
<CAPTION>
Term
Name Age Position Expires
---- ----- -------- -------
<S> <C> <C> <C>
Marvin Maslow 59 Chairman of the Board of Directors 1999
Martin Holleran(1) 54 President, Chief Executive Officer and 1997
Director
Martin D. Fife(1) 69 Director 1997
Craig I. Fields(2) 50 Director 1997
Richard S. Hickok(1) 71 Director 1997
Arthur L. Lipper 65 Director 1998
Jules Zimmerman 62 Chief Financial Officer, Secretary and 1998
Director
Sherman Langer 50 Director 1999
</TABLE>
- ------
(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 co-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
4
<PAGE>
Chief Financial Officer of the Company from its inception until the
consummation of its initial public offering in August, 1990. Prior to
founding the Company, Mr. Maslow was a principal in a private investment
company, with responsibility for investing capital in privately held,
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 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 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. From 1989 to
December 31, 1996 Mr. Hickok has served as an officer, director and
stockholder of Hickok Associates, Inc., a company that provided 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 Alpine Lace Brands, Inc.
5
<PAGE>
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
its 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. From October 1989 to December 31, 1996, Mr. Zimmerman
served as President and Chief Executive Officer of Hickok Associates, a
company that provided financial consulting services. 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
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.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the cash compensation paid by the Company
to executive officers of the Company for each of the years ended December 31,
1994, 1995 and 1996 whose total annual salary and bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------------------------------
Annual Compensation Awards Payouts
--------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other Re- All
Annual stricted other
Name and Compen- Stock LTIP Compen-
Principal sation Awards Options/ Payouts sation
Position Year Salary($) Bonus($) $ $ SARs(#) $ $
------------------------- ------ ---------- --------- --------- ---------- -------------- --------- -------------
<S> <C> <C> <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- 375,000 $ -0- $ -0-
of the Board of
Directors
Martin Holleran, 1996 $180,000 $ -0- $ -0- $ -0- 1,000,000(4) $ -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) 250,000 $ -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>
- ------
(1) On March 12, 1996, the Company cancelled 187,500 unvested stock options
granted to Mr. Maslow 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.
7
<PAGE>
(5) Represents a one-time cost-of-living adjustment made to Mr. Holleran's
1993 employment agreement with the Company. In 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 $1,000,000 life insurance policy on Mr. Holleran's life, for
the benefit of his wife.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
at Fiscal at Fiscal
Year End (#) Year End ($)
Shares
Name and Acquired on Value Exercisable/ Exercisable/
Principal Position Exercise (#) Realized ($) Unexercisable Unexercisable
------------------------------- ------------- ------------ --------------------- --------------
<S> <C> <C> <C> <C>
Marvin Maslow(1) -0- N/A 708,333 Exercisable/ 0/0
Chief Executive 666,664 Unexercisable
Officer, Chairman of the Board
of Directors
Martin Holleran(2) -0- N/A 583,333 Exercisable/ 0/0
President, Chief 666,664 Unexercisable
Operating Officer and Director
Martin Fife, -0- N/A 100,000 Exercisable/ 0/0
Vice Chairman of the 50,000 Unexercisable
Board of Directors
Jules Zimmerman(3) -0- N/A 70,000 Exercisable/ 0/0
Chief Financial 50,000 Unexercisable
Officer and Director
Sherman Langer(4) -0- N/A 152,000 Exercisable $7,875/0
Senior Vice President of
Marketing and Sales and
Director
Craig Fields, -0- N/A 83,332 Exercisable/ 0/0
Director 66,668 Unexercisable
Richard Hickok, -0- N/A 50,000 Exercisable/ 0/0
Director 50,000 Unexercisable
Arthur Lipper, -0- N/A 0 Exercisable/ 0/0
Director 0 Unexercisable
</TABLE>
<PAGE>
- ------
(1) In the fiscal year ended December 31, 1996, Mr. Maslow was granted an
aggregate of 1,000,000 stock options to acquire 1,000,000 shares of
Common Stock at an exercise price of $3.00 per share. Such options expire
on March 11, 2003 and constitute 45.0% of the total options/SARs/warrants
granted to the Company's employees in such fiscal year. The potential
realizable value of such options, assuming an appreciation in the
Company's stock price of 5% and 10% per annum during the term of the
option, is $3,168,750 and $5,531,250, respectively.
(2) In the fiscal year ended December 31, 1996, Mr. Holleran was granted an
aggregate of 1,000,000 stock options to acquire 1,000,000 shares of
Common Stock at an exercise price of $3.00 per share. Such options expire
on March 11, 2003 and constitute 45.0% of the total options/SARs/warrants
granted to the Company's employees in such fiscal year. The potential
realizable value of such options, assuming an appreciation in the
Company's stock price of 5% and 10% per annum during the term of the
option, is $3,168,750 and $5,531,250, respectively.
(3) In the fiscal year ended December 31, 1996, Mr. Zimmerman was granted an
aggregate of 50,000 stock options to acquire 50,000 shares of Common
Stock at an exercise price of $3.625 per share. Such options expire on
June 17, 2001 and constitute 2.3% of the total options/SARs/warrants
granted to the Company's employees in such fiscal year. The potential
realizable value of such options, assuming an appreciation in the
Company's stock price of 5% and 10% per annum during the term of the
option, is $48,937.50 and $110,562.50, respectively.
(4) In the fiscal year ended December 31, 1996, Mr. Langer was granted an
aggregate of 100,000 stock options to acquire 100,000 shares of Common
Stock at an exercise price of $3.00 per share. Such options expire on
March 11, 2001 and constitute 4.5% of the total options/SARs/warrants
granted to the Company's employees in such fiscal year. The potential
realizable value of such options, assuming an appreciation in the
Company's stock price of 5% and 10% per annum during the term of the
option, is $260,000 and $404,375, respectively.
8
<PAGE>
Comparison of Five Year-Cumulative Total Returns
Performance Graph for
PROJECTAVISION INC
Performance Graph
Co. Index Mkt Index Peer Index
--------- --------- ----------
12/31/91 100 100 100
1/31/92 315.789 105.847 110.797
2/28/92 463.158 108.246 112.452
3/31/92 442.105 103.137 102.591
4/30/92 531.579 98.714 95.875
5/29/92 500 99.996 96.288
6/30/92 352.632 96.086 87.842
7/31/92 484.21 99.49 89.165
8/31/92 400 96.449 83.648
9/30/92 336.842 100.034 88.913
10/30/92 463.158 103.974 99.325
11/30/92 431.579 112.247 115.566
12/31/92 463.158 116.378 119.135
1/29/93 452.632 119.691 131.25
2/26/93 736.842 115.226 125.477
3/31/93 1368.421 118.561 131.657
4/30/93 1157.895 113.501 132.77
5/28/93 1052.632 120.281 147.855
6/30/93 789.474 120.837 158.697
7/30/93 800 120.98 166.94
8/31/93 1063.158 127.233 183.851
9/30/93 897.684 131.022 191.618
10/29/93 1007.158 133.967 200.838
11/30/93 842.948 129.972 181.595
12/31/93 963.369 133.595 194.197
1/31/94 777.263 137.65 195.744
2/28/94 602.105 136.363 190.491
3/31/94 591.158 127.976 178.455
4/29/94 591.158 126.315 184.845
5/31/94 437.895 126.624 165.529
6/30/94 536.421 121.993 155.051
7/29/94 459.79 124.495 163.363
8/31/94 481.685 132.432 182.064
9/30/94 448.842 132.093 181.168
10/31/94 503.579 134.689 204.654
11/30/94 437.895 130.221 203.625
12/30/94 377.684 130.586 220.306
1/31/95 306.526 131.318 213.617
2/28/95 284.632 138.263 229.394
3/31/95 295.579 142.361 240.693
4/28/95 224.421 146.843 254.764
5/31/95 208 150.63 258.144
6/30/95 273.684 162.836 305.694
7/31/95 262.737 174.805 341.561
8/31/95 290.105 178.348 344.642
9/29/95 410.526 182.449 365.042
10/31/95 492.632 181.404 336.587
11/30/95 328.421 185.663 362.05
12/29/95 416 184.675 341.779
1/31/96 394.105 185.588 333.859
2/29/96 416 192.66 356.716
3/29/96 355.789 193.301 351.869
4/30/96 197.053 209.34 418.953
5/31/96 251.789 218.952 472.652
6/28/96 317.474 209.081 454.682
7/31/96 257.263 190.458 366.644
8/30/96 339.368 201.129 393.857
9/30/96 350.316 216.523 414.888
10/31/96 328.421 214.128 391.279
11/29/96 295.579 227.378 405.202
12/31/96 224.421 227.142 378.783
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Legend
<S> <C> <C> <C> <C> <C> <C> <C>
Symbol CSRP Total Returns Index for: 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
- ------- ----------------------------- ---------- ---------- ---------- ---------- ---------- ----------
- --- [ ] PROJECTAVISION INC. 100.00 463.2 963.4 377.7 416.0 224.4
- -..-. * Nasdaq Stock Market (US Companies) 100.00 116.4 133.6 130.6 184.7 227.1
.......* NASDAQ Stocks (SIC 3660-3669 US Companies) 100.00 119.1 194.2 220.3 341.8 378.8
Notes:
A. The lines represent monthly index levels derived from compounded daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding day is used.
D. The index level for all series was set to $100.00 on December 9, 1991.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<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 Suzanne
Dolgoff, his wife, and in order to balance the size of its three (3) classes
of Directors 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 proposed settlement are set
forth in the Notice of Settlement dated March 24, 1997, which is being mailed
to stockholders along with this Proxy Statement. 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 three
(3) meetings 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 take action only if 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 held 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.
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
10
<PAGE>
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. The Company also has a $500,000
lay man life insurance policy on Mr. Maslow's life, of which the Company is
the sole beneficiary. 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 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 Company also has a
$1,000,000 lay man life insurance policy on Mr. Holleran's life, of which the
Company is the sole beneficiary. 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 discontinued operations as of Decem- ber 31, 1996. Since that
time, Mr. Zimmerman has continued to provide his services to the Company as a
Chief Financial Officer on an hourly basis.
11
<PAGE>
PROPOSAL NO. 2:
RATIFICATION OF SELECTION
OF DELOITTE & TOUCHE, LLP
AS INDEPENDENT ACCOUNTANTS
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 properly executed and returned, 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 accountants for
1997.
12
<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 and,
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
shares. 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 number of authorized
shares of Common Stock. Unless properly executed and returned, 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.
13
<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
14
<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
March 4, 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 9:30 a.m.. Eastern Daylight Savings 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 |B( in blue or black ink.
Proposal 1. Election of four (4) 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 [ ]
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, this proxy will be voted "FOR" Proposals 1, 2 and 3.
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
