<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for use of the Commission only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 240.14a-11(c) or Rule 240.14a-12
Acrodyne Communications, Inc.
------------------------------------------------
(Name of Registrant as Specified in Its Charter)
A. Robert Mancuso, President and CEO
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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>
ACRODYNE COMMUNICATIONS, INC.
516 Township Line Road
Blue Bell, PA 19422
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On
June 15, 1999
The 1999 Annual Meeting of Shareholders (the "Meeting") of Acrodyne
Communications, Inc. (the "Company"), will be held at the Cedar Brook Country
Club, 180 Penllyn Road, Blue Bell, Pennsylvania 19422 at 11:00 A.M., local time,
for the following purpose:
To consider and vote on proposals providing for the following matters:
(1) Election of seven Directors of the Company to serve for the ensuing
year and until their successors are elected.
(2) Engagement of another independent accountant as the Company's principal
accountant.
(3) To transact such other business as may properly come before the Meeting
or any adjournment thereof.
The record date for determining shareholders of record eligible to vote
at the Meeting is May 5, 1999.
By Order of the Board of Directors,
David B. Amy, Secretary
April 30, 1999
Shareholders are invited to attend the meeting in person.
SHAREHOLDERS CAN HELP MANAGEMENT AVOID UNNECESSARY EXPENSE AND DELAYS BY
PROMPTLY RETURNING THE ENCLOSED PROXY. WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING, IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED. THEREFORE, PLEASE FILL
OUT, DATE, SIGN AND RETURN THE PROXY IN THE STAMPED AND ADDRESSED ENVELOPE
ENCLOSED FOR YOUR CONVENIENCE.
<PAGE>
ACRODYNE COMMUNICATIONS, INC.
516 Township Line Road
Blue Bell, PA 19422
---------------------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 15, 1999
The enclosed proxy is solicited by the Board of Directors of Acrodyne
Communications, Inc. (the "Company") for use at the 1999 Annual Meeting of
Shareholders (the "Meeting") to be held at the Cedar Brook Country Club, 180
Penllyn Road, Blue Bell, Pennsylvania on June 15, 1999 at 11:00 A.M., local
time, and at any adjournments thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting. Solicitation of proxies will be made
by mail, telephone and, to the extent necessary, personal interviews. Proxies
may be solicited by officers and employees of the Company without additional
compensation to them. All expenses incident to the preparation of proxy material
and solicitation of proxies are to be paid by the Company. It is anticipated
that on or about May 11, 1999 this proxy statement and the enclosed form of
proxy will be mailed to shareholders. The Annual Report to Shareholders for the
fiscal year ended December 31, 1998 will accompany this proxy statement.
The persons (the "Proxies") named in the accompanying proxy have
advised the Company of their intention, if no contrary instructions are given,
to vote the shares represented by the proxies received by them:
(i) FOR the election as directors of the Company of those persons
designated as the Board of Directors nominees;
(ii) FOR the engagement of another independent accountant as the Company's
principal accountant.; and
in accordance with their best judgment on any other matters which may
come before the Meeting. At this time, management knows of no other matters
which are expected to come before the Meeting. A shareholder executing and
returning a proxy has the power to revoke it at any time before it is voted at
the Meeting by notice in writing to the Secretary of the Company, or by
attending the Meeting and voting in person. Attendance at the Meeting will not,
in and of itself, constitute revocation of a proxy.
Record Date and Share Ownership
The Board of Directors (the "Board") of the Company has fixed
the close of business on May 5, 1999 as the record date (the "Record Date") for
the determination of the shareholders entitled to receive notice of, and to vote
at, the Meeting. The only outstanding classes of stock of the Company are (i)
its Common Stock, par value $.01 per share (the
<PAGE>
"Common Stock"), and (ii) its 8% Convertible Redeemable Preferred Stock, par
value $1.00 per share (the "8% Preferred Stock").
As of April 30, 1999 there were 6,769,523 shares issued and outstanding of the
Common Stock, and 6,500 shares issued and outstanding of the 8% Preferred Stock.
Voting
The Common Stock and the 8% Preferred Stock are the only securities of
the Company entitled to vote at the Meeting. At the Meeting, each share of
Common Stock is entitled to one vote and each share of 8% Preferred Stock is
entitled to 27.68 votes. There are no cumulative voting rights with respect to
the Common Stock or the 8% Preferred Stock.
Quorum
The presence at the Meeting of the holders of a majority of the shares
of stock outstanding on the Record Date, in person or by proxy, constitutes a
quorum for the transaction of business by such holders at the Meeting.
Other Proposals
The Board does not know of any matter other than the foregoing that is
expected to be presented for consideration at the Meeting. However, if other
matters properly come before the Meeting, the Proxies intend to vote thereon in
accordance with their best judgment.
PROPOSAL I - ELECTION OF DIRECTORS
At the Meeting, seven directors, who will constitute the entire Board,
are to be elected to serve until the next annual meeting of stockholders and
until their successors shall be elected and shall qualify. All nominees have
consented to being named herein and have agreed to serve if elected. Should any
of said nominees not remain a candidate at the time of the Meeting (a situation
which is not now anticipated), proxies solicited hereunder will be voted in
favor of those nominees who do remain as candidates and may be voted for
substitutes nominated by the Board.
Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the Meeting.
- 2 -
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH SERVED AS
NAME AGE COMPANY DIRECTOR SINCE
---- --- ------------- --------------
<S> <C> <C> <C>
Nat S. Ostroff 58 Chairman of the Board of Directors January 1999
A. Robert Mancuso 61 President and Chief Executive Officer of May 1991
the Company and Acrodyne Industries, Inc.
Martin J. Hermann 60 Director of the Company May 1991
David S. Smith 48 Director of the Company January 1999
David B. Amy 46 Director and Secretary of the Company January 1999
Richard P. Flam 56 Director of the Company January 1999
Michael E. Anderson 44 Director of the Company March 1999
</TABLE>
Proxies will be voted FOR the election of all of the above named
nominees unless the shareholders indicate that the proxy shall not be voted for
all or any one of the nominees. In no event, however, shall the proxies be voted
for a greater number of persons than the number of nominees named.
NAT S. OSTROFF has served as Chairman of the Board of Directors since
he was elected at the special meeting of the shareholders of Acrodyne
Communications Inc., on January 27, 1999. Mr. Ostroff is a Sinclair nominee.
Mr. Ostroff is serving as Sinclair's Vice President for New Technology since
joining Sinclair Broadcast Group, Inc. in January of 1996. Prior to joining
Sinclair, he was the President and CEO of Comark Communications, Inc., a
manufacturer of UHF transmission equipment. Mr. Ostroff founded Acrodyne
Industries, Inc. in 1968 and served as its first President and CEO. He is the
Chairman of ALTV Engineering Advisory Committee.
A. ROBERT MANCUSO has been President and Chief Executive Officer of the
Company since its inception in May 1991. Mr. Mancuso is an Acrodyne nominee.
Mr. Mancuso had also served as the Chairman of the Board of Directors of the
Company from October 1994 through January 1999. Mr. Mancuso has also served as
President and Chief Executive Officer of Acrodyne Industries, Inc., a
wholly-owned subsidiary of the Company ("Acrodyne"), since its acquisition by
the Company in October 1994. From July 1991 to October 1994, he was also
president of R.M. Hudson Co., Inc., financial consultants for mergers and
acquisitions. From January 1987 to June 1991, he served as vice president of
Reichhold
- 3 -
<PAGE>
Chemicals, a specialty chemical company. From January 1987 to June 1991, he also
served as president of RBH Dispersions, another specialty chemical company. From
July 1986 to December 1989, he was senior vice president of Polychrome
Corporation, a manufacturer of film and printing plates for the ink industry.
Prior to 1986, Mr. Mancuso was employed by Union Carbide Corporation for 26
years.
MARTIN J. HERMANN has served as Secretary and General Counsel of the
Company from its inception in May 1991 through January 27, 1999. Mr. Hermann is
one of the two Directors being nominated by Acrodyne according to the Sinclair
Investment agreement. He serves as Director, a position he has held since May
1991. Mr. Hermann has been engaged in the private practice of law since 1963.
DAVID D. SMITH has served as Director since he was elected at the
special meeting of shareholders of Acrodyne Communications, Inc. which was held
on January 27, 1999. Mr. Smith is being nominated by Sinclair. Mr. Smith has
served as President, Chief Executive Officer and Chairman of the Board of
Sinclair since September 1990. From 1984 to 1990, he served as General Manager
of WPTT in Pittsburgh, Pennsylvania. In 1980, Mr. Smith founded Comark
Television, Inc. From 1978 to 1986, Mr. Smith co-founded and served as an
officer and director of Comark Communications, Inc.
DAVID B. AMY has served as Director since he was elected at the special
meeting of shareholders of Acrodyne Communication, Inc. which was held on
January 27, 1999. Mr. Amy is being nominated by Sinclair. Mr. Amy was also
nominated by the Board of Directors at that meeting to hold the position of
Corporate Secretary. Mr. Amy has served as Chief Financial Officer of Sinclair
since October 1994. In addition, he serves as Secretary of Sinclair
Communications, Inc., a Sinclair subsidiary, which owns and operates Sinclair's
broadcasting operations. From 1986 until October 1994, Mr. Amy served as
Sinclair's Corporate Controller. Mr. Amy originally joined Sinclair in 1986, as
a business manager for WPTT in Pittsburgh, Pennsylvania.
RICHARD P. FLAM has served as Director since his election at the
special meeting of shareholders by the Board of Directors on January 27, 1999.
Mr. Flam is being nominated by mutual consent of Sinclair and Mr. Mancuso. Mr.
Flam is a Consultant of RF, Microwave and Antenna technology to companies in the
Electronics Manufacturing sector. From 1980 to 1996 he was President and CEO of
Flam & Russell, Inc. a producer of sophisticated RF Equipment and Systems for
military applications .and a leader in test systems for Stealth Technology.
Previously, he held management and engineering positions with Hazeltine
Corporation and American Electronic Laboratories, Inc. Mr. Flam is a Fellow of
the Institute of Electrical and
- 4 -
<PAGE>
Electronic Engineers and holds B.S. and M.S. degrees in Physics from Rensselaer
Polytechnic institute and Rutgers University, respectively.
MICHAEL E. ANDERSON has served as Director since his special
appointment by the Board of Directors on March 22, 1999. Mr. Anderson is being
nominated by mutual consent of Sinclair and Mr. Mancuso. Mr. Anderson is a
Managing Director in the Media and Leisure group at Salomon Smith Barney with a
primary focus on the Broadcasting and Cable Industries. Prior to the Salomon
Smith Barney merger, Mr. Anderson was a member of the Media/Telecom group at
Smith Barney having joined the firm in June 1992. Mr. Anderson was formerly a
Senior Vice President at Kidder, Peabody & Company Inc., having served from 1983
to 1992 in various capacities, including assignments in the Media and
Communications and Advisory group, as well as two years in their London office.
From 1977 to 1981, Mr. Anderson served as officer in the U.S. Navy. He received
his M.B.A. from Columbia University and a B.S. from Cornell University.
Directors will serve in such capacity until the next annual meeting of
shareholders or until their successors have been duly elected and qualified.
Executive officers are elected by the Board of Directors on an annual basis and
serve at the discretion of the Board or pursuant to an employment agreement.
Executive Officers of the Registrant
The following table sets forth certain information about the executive
officers of Acrodyne Industries, Inc. All officers and directors hold office
until their respective successors are elected and qualified, or until their
earlier resignation or removal.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
A. Robert Mancuso 61 President and Chief Executive Officer of the
Company and Acrodyne Industries, Inc.
Nat S. Ostroff 58 Chairman of the Board of Directors of the Company
and Chairman of the Management Committee of
Acrodyne Industries, Inc.
Ronald R. Lanchoney 53 Chief Financial Officer of Acrodyne Industries, Inc.
</TABLE>
A. ROBERT MANCUSO has been President and Chief Executive Officer of the
- 5 -
<PAGE>
Company since its inception in May 1991. Mr. Mancuso had also served as the
Chairman of the Board of Directors of the Company from October 1994 through
January 1999. Mr. Mancuso has also served as President and Chief Executive
Officer of Acrodyne Industries, Inc., a wholly-owned subsidiary of the Company
("Acrodyne"), since its acquisition by the Company in October 1994. From July
1991 to October 1994, he was also president of R.M. Hudson Co., Inc., financial
consultants for mergers and acquisitions. From January 1987 to June 1991, he
served as vice president of Reichhold Chemicals, a specialty chemical company.
From January 1987 to June 1991, he also served as president of RBH Dispersions,
another specialty chemical company. From July 1986 to December 1989, he was
senior vice president of Polychrome Corporation, a manufacturer of film and
printing plates for the ink industry. Prior to 1986, Mr. Mancuso was employed by
Union Carbide Corporation for 26 years.
NAT S. OSTROFF has served as Chairman of the Board of Directors since
he was elected at the special meeting of the shareholders of Acrodyne
Communications Inc., on January 27, 1999. Mr. Ostroff has served as Sinclair's
Vice President for New Technology since joining Sinclair Broadcast Group, Inc.
in January of 1996. Prior to joining Sinclair, he was the President and CEO of
Comark Communications, Inc., a manufacturer of UHF transmission equipment. Mr.
Ostroff founded Acrodyne Industries, Inc. in 1968 and served as its first
President and CEO. He is the Chairman of ALTV Engineering Advisory Committee.
RONALD R. LANCHONEY has been the Chief Financial Officer of the Company
since March 2, 1998. During the one month period prior to that date, Mr.
Lanchoney held the position of consulting CFO for the Company, providing
financial consulting services to the Company on a part-time basis. As an
independent financial consultant, Mr. Lanchoney operated his own management and
financial consulting business from August 1996 until joining the Company on a
full-time basis in March 1998. From 1978 to mid-1996, Mr. Lanchoney was the
executive vice president of I/O Corporation, a company which he co-founded and
which is a distributor of advanced technology electrical and electronic control
equipment. From 1970 to 1978, Mr. Lanchoney held various positions including
division controller with I-T-E Imperial Corporation, a manufacturer of high and
low voltage electrical switch gear, distribution and control equipment.
- 6 -
<PAGE>
Board of Directors
Overview
On November 23, 1998, Acrodyne entered into a subscription agreement with
Sinclair Broadcast Group for the acquisition of a significant equity interest in
Acrodyne. The closing of the transaction occurred on January 27, 1999 upon
approval by the Acrodyne shareholders at a special meeting.
Pursuant to the subscription agreement, Sinclair has made a cash infusion of
$4.3 million in Acrodyne in receipt of 1,431,333 shares of Acrodyne's common
stock and warrants to purchase up to an aggregate of 8,719,225 shares over a
term of seven years at prices ranging from $3.00 to $6.00 per share. Of such
warrants, 6,000,000 are exercisable only upon Acrodyne's achievement of
increased product sales or sales of products with new technology. Sinclair has
also acquired an additional 800,000 shares of common stock previously held by
the Scorpion/New Light investment group. Sinclair now holds an aggregate of
2,231,333 shares of Acrodyne, representing approximately 32.1% of issued common
stock, assuming no warrants are exercised. If Sinclair were to exercise all
warrants received pursuant to the Subscription Agreement, Sinclair would own
10,950,558 shares of Common Stock, representing 59.06% of all outstanding voting
stock on a fully diluted basis.
From the net proceeds of the transaction, $1,031,780 was used to retire all
Series A 8% Redeemable Convertible Preferred Stock issued in September 1998 to
the Scorpion/New Light investment group; $1,000,000 has been set aside to fund a
new research and development program; and the balance has been allocated for
working capital and general corporate purposes.
This transaction also included an investment agreement, dated as of January 27,
1999 among Sinclair, Acrodyne and Mr. Mancuso (the "Investment Agreement"), with
respect to Acrodyne's governance and providing for, among other things, the
composition of the board of directors, restrictions on certain corporate,
securities and affiliated party transactions, a standstill agreement by Sinclair
and an enhanced role for Acrodyne's independent directors.
As a condition to the Investment Agreement, Acrodyne's shareholders approved the
reconstitution of Acrodyne's board of directors to comprise 3 directors
nominated by Sinclair, including Nathaniel Ostroff as Chairman, 2 directors
nominated by Acrodyne's president and CEO, Robert Mancuso, and 2 independent
directors not affiliated with Sinclair or the Company. Mr. Ostroff will also
chair Acrodyne's management committee, which will include Mr. Mancuso and an
operating officer to be appointed.
As an additional condition to the Investment Agreement, on January 27, 1999,
Acrodyne and Mr. Mancuso entered into an employment agreement to retain the
services of Mr. Mancuso as President and Chief Executive Officer of Acrodyne.
- 7 -
<PAGE>
Executive Compensation
The following table summarizes the compensation earned by the Company's
executive officers (the "Named Executive Officers"), for services provided
during the Company's fiscal years ended December 31, 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
- 8 -
<PAGE>
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Securities
Fiscal Underlying
Name and Principal Position Year Salary Options (#)
- --------------------------- ------ ------ -----------
<S> <C> <C> <C> <C>
A. Robert Mancuso, Chairman of 1998 $150,000 200,000
the Board, President and CEO 1997 $150,000 None $900/month
1996 $150,000 137,500 auto allowance
Daniel D. Traynor 1998 $126,500 75,000 None
General Manager and Vice 1997 $126,500 None None
President of Acrodyne 1996 $126,500 37,500 None
Dr. Timothy P. Hulick 1998 $113,000 75,000 None
Vice President - Engineering 1997 $113,000 None None
of Acrodyne 1996 $113,000 37,500 None
Ronald R. Lanchoney, CFO 1998 90,000 50,000
1997 None None None
</TABLE>
Mr. Lanchoney was hired as Chief Financial Officer on March 2, 1998 at an annual
salary of $80,000. During the one month period prior to that date, Mr. Lanchoney
served as consulting CFO to the Company, providing financial consulting services
to the Company on a part-time basis. On August 31, 1998, Mr. Lanchoney began
receiving compensation of $90,000.
As of January 27, 1999, Mr. Traynor and Mr. Hulick were not re-elected as
corporate officers of Acrodyne Industries, Inc. for the year 1999, but operating
under Employment agreements, their compensation remains the same, with their
varied duties.
On January 27, 1999 Mr. Nat Ostroff was elected as Chairman of the Board of the
Company and Chairman of the Management committee for Acrodyne Industries, Inc.
and was granted compensation in the amount of $150,000 annually.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Acrodyne has two stock option plans approved by the Board of Directors:
the 1993 Stock Option Plan and the 1997 Stock Option Plan.
The purpose of the Stock Plans are to advance the interests of the
Corporation by encouraging and enabling the acquisition of a larger personal
propriety interest in the Corporation by employees and directors of, and
consultants to, the Corporation and its Subsidiaries upon whose judgements and
keen interest the Corporation is largely dependent for the successful conduct of
its operations and by providing such employees, directors and consultants with
incentives to put forth maximum efforts for the success of the Corporation's
business. It is also expected that such incentives will enable the Corporation
and its Subsidiaries to attract desirable personnel.
- 9 -
<PAGE>
1993 Stock Option Plan. Under this plan, options for 250,000 were
granted to executive employees in 1993 and 1994, all of which are exercisable.
1997 Stock Option Plan. Under this plan, options for up to 650,000
shares of Common Stock may be granted.
In June 1998, the Board of Directors granted 450,000 options under
this 1997 Plan to employees. The options had an exercise price of $4.50 per
share. On October 16, 1998, in a response to the decline in the public market
price of Acrodyne's securities and the public stock markets generally, the Board
resolved to reprice such options to $3.00 per share.
Both plans were amended on November 19, 1998 to make options
exercisable for 10 years from the date of grant, unless prior to the expiration
of such options, the option holder ceases to be employed by Acrodyne due to
Acrodyne's termination for cause, the option holder's voluntary termination, or
the option holder's death or permanent and total disability. In such events, the
option remains exercisable for a period not extending beyond three months after
the date of cessation of employment.
OPTION/SAR GRANTS IN LAST FISCAL YEAR 1998
(Individual Grants)
<TABLE>
<CAPTION>
Number of
Securities
Underlying Exercise
Name Options price per share Expiration date
- ---- ----------- --------------- ---------------
<S> <C> <C> <C>
A. Robert Mancuso 200,000 $3.00 June 8, 2008
Daniel D. Traynor 75,000 $3.00 June 8, 2008
Dr. Timothy P. Hulick 75,000 $3.00 June 8, 2008
Ronald R. Lanchoney 50,000 $3.00 June 8, 2008
</TABLE>
- 10 -
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Brian Byrnes 7,500 $3.00 June 8, 2008
Elmer Lipsey 15,000 $3.00 June 8, 2008
Martin Hermann 20,000 $3.00 June 8, 2008
Robert Raucci 7,500 $3.00 June 8, 2008
Mesa Capital 25,000 $3.50 December 8, 2008
total grants in 475,000
fiscal 1998
</TABLE>
In January 1999, Mr. Mancuso received 175,000 stock options from the 1997 Stock
Option Plan, at an exercise price of $3.88, for his 1999 Employment Agreement.
The Stock Options for Mr. Mancuso, Mr.Hulick, Mr. Traynor, and Mr.
Lanchoney, all vest over a four year period, with a beginning vesting date of
June 30, 1997. The Stock Options for Mr.Byrnes all vested on June 30, 1998.
The Stock Options for Mr. Lipsey all vested on June 30, 1997. The Stock Options
for Mr.Hermann vested 12,500 on June 30, 1997 and 7,500 vested on June 30,
1998. The Stock Options for Mr. Raucci all vested on June 30, 1998.
In December of 1998, the Company granted 25,000 stock options at an
exercise price of $ 3.50, from the 1997 Stock Option Plan to a consultant, Mesa
Capital, for services. Such options were valued at $65,000 at the time of
issuance and was recorded as an expense for fiscal year ending December 31,
1998.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-The-
Shares Options At Year-End (#) Money Options At Year End ($)
Number of acquired on Exercisable (E)/ Exercisable (E)/
Name held options exercise Unexercisable (U) Unexercisable (U)
- ---- ------------ -------- ----------------- -----------------
<S> <C> <C> <C> <C>
A. Robert Mancuso 612,500 - 0 - E 395,833 E $ 251,999
U 216,667 U $ 101,000
Daniel D. Traynor 112,500 - 0 - E 75,000 E $ 51,750
U 37,500 U $ 35,250
Dr. Timothy P. Hulick 112,500 - 0 - E 75,000 E $ 51,750
U 37,500 U $ 35,250
</TABLE>
- 11 -
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Ronald R. Lanchoney 50,000 - 0 - e 25,000
u 25,000
Directors/Consultants 75,000 - 0 - e 75,000
u - 0 -
</TABLE>
Employment Agreements
Mancuso employment agreement
As a condition to the Sinclair investment, Acrodyne entered into an employment
agreement with Mr. Mancuso (the "Employment Agreement") a copy of which was
filed as an exhibit with the SEC on form 8K on November 23, 1999. The Employment
Agreement has an initial three year term, and automatically renews for
successive two year terms. Mr. Mancuso is entitled to a minimum base salary of
$175,000 per year and an annual bonus, not to exceed his base salary, equal to
5% of Acrodyne's earnings before interest and taxes for each fiscal year,
excluding costs for research and development, as determined from Acrodyne's
audited statement of operations. In addition, Mr.Mancuso was given options to
purchase up to 175,000 shares of Common Stock under the 1997 stock option plan
at an exercise price of $3.88 per share. 58,333 of these options became
exercisable on January 1, 1999, 58,333 will become exercisable on January 1,
2000 and 58,334 will become exercisable on January 1, 2001. Mr. Mancuso also has
an automobile allowance of $900.00 per month. Mr. Mancuso's employment agreement
includes a non-competition obligation that extends for two years following the
expiration of the agreement or the earlier termination of his employment. Mr.
Mancuso is entitled, upon his termination without cause, to a severance payment
in an amount equal to his base salary for the then-remaining term of his
employment agreement plus one additional year of base salary.
Traynor Employment agreement
Mr. Traynor is employed by Acrodyne under an employment agreement which will be
subject to a renewal on October 24, 1999. Under such employment agreement, Mr.
Traynor is entitled to,
- 12 -
<PAGE>
among other things, a minimum base salary of $126,500 per year and a bonus equal
to between 10% and 70% of Mr. Traynor's base salary. Such percentage is to be
based on the relationship between Acrodyne's actual earnings before taxes for
each year and Acrodyne's budgeted earnings before taxes for such year.
Hulick employment agreement
Mr. Hulick is employed by Acrodyne under an employment agreement which will be
subject to a renewal on October 24, 1999. Under such employment agreement, Mr.
Hulick is entitled to, among other things, a minimum base salary of $113,000 per
year and a bonus equal to between 10% and 70% of Mr. Hulick's base salary. Such
percentage is to be based on the relationship between Acrodyne's actual earnings
before taxes for each year and Acrodyne's budgeted earnings before taxes for
such year.
Pursuant to the terms of their respective employment agreements, each
of Mr. Traynor and Dr. Hulick are entitled, upon a termination without cause, to
a severance payment in an amount equal to base salary for the then remaining
term of such employment agreement plus one additional year thereafter.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to the
beneficial ownership of shares of Common Stock, as of April 30, 1998, and 8%
Preferred Stock, as of the same date, by (i) each person known by the Company to
be the owner of more than 5% of the outstanding shares of Common Stock or 8%
Preferred Stock, (ii) each director, (iii) each director nominee, (iv) the Named
Executive Officers and (v) all directors and officers as a group:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Name & Address Amount & Nature
of Beneficial of Beneficial Percent
Title of Class Owner(a) Ownership of Voting Stock
- -------------- -------- -------------- ---------------
<S> <C> <C> <C>
Common Stock Sinclair 2,897,999 shares (b) 32.10%
Common Stock A. Robert Mancuso 612,500 shares (c) 6.41%
Common Stock Martin J. Hermann 63,000 shares (d) 0.90%
Common Stock Ronald R. Lanchoney 50,000 shares (e) 0.35%
</TABLE>
- 13 -
<PAGE>
<TABLE>
<S> <C> <C> <C>
Common Stock Ronald R. Lanchoney 50,000 shares(e) 0.25%
All officers and directors as a group (3 persons) 533,833 shares(f) 7.68%
Preferred Stock after
conversion into Common Stock
8% Preferred Stock Furst Associates 85,116 shares (g) 1.22%
8% Preferred Stock Eagle Partners 45,672 shares (g) 0.65%
8% Preferred Stock FM Partners 35,292 shares (g) 0.50%
8% Preferred Stock Dynamic Value Partners 13,840 shares (g) 0.19%
</TABLE>
- ----------------------
(a) The address of Sinclair Broadcast Group, Inc. is 2000 W. 41st Street,
Baltimore, Maryland 21212. The address of Mr. Mancuso and Mr. Lanchoney is c/o
the Company, 516 Township Line Road, Blue Bell, Pennsylvania 19422. The address
of Mr. Hermann is 725 Glen Cove Avenue, Glen Head, New York 11545. The address
of Furst Associates, Eagle Partners and FM Partners is Suite 105, 621 E.
Germantown Pike, Plymouth Valley, Pennsylvania 19401. The address of Dynamic
Value Partners is 1959 Fourth Street, South Naples, Florida 34102.
(b) Includes 1,431,333 shares of Common Stock issued to Sinclair under the
Subscription Agreement, includes 800,000 shares of Common Stock which Sinclair
purchased from the Scorpion Investors and 666,666 shares of Common Stock
issuable upon the exercise of warrants exercisable immediately after the closing
of the Sinclair Investment on January 27, 1999.
(c) Includes 237,500 shares of Common Stock issuable upon the exercise of stock
options granted to Mr. Mancuso consisting of (i) 137,500 shares of Common Stock
issuable pursuant to the 1993 Stock Option Plan, of which 100,000 and 37,500
options vested on October 14, 1995 and June 9, 1996, respectively and (ii)
100,000 shares of Common Stock issuable upon the exercise of options issued
pursuant to the terms of Mr. Mancuso's 1994 employment agreement, of which
33,333 options vested on January 1, 1995 ,1996 and 1997. Includes 200,000 shares
of Common Stock granted under the 1997 Stock Option Plan of which 50,000 vested
on June 30, 1997 and 50,000 vested on June 30, 1998. Includes 200,000 shares of
Common Stock granted according to the 1999 Employment Agreement under the 1997
Stock Option Plan of which 58,333 vested on January 1, 1999.
(d) Includes 20,000 shares of Common Stock issuable upon the exercise of vested
options granted under Acrodyne's 1997 Stock Option Plan.
- 14 -
<PAGE>
(i) Includes 25,000 shares of Common Stock issuable upon the exercise of vested
options granted under Acrodyne's 1997 Stock Option Plan.
(j) Reflects beneficial ownership of all directors and officers and includes
598,333 shares of Common Stock issuable upon the exercise of options. None
of the officers or directors of Acrodyne beneficially owns any shares of
Original Preferred Stock.
(k) Preferred Shareholders own in aggregate 6,500 share of Preferred Stock at a
conversion rate of one share of Preferred Stock equals 27.68 shares of
Common Stock. Furst Associates owns 3,075 shares of Preferred Stock or
47.31% of the issued and outstanding Preferred Stock. Eagle Partners owns
1,650 shares of Preferred Stock or 25.38% of the issued and outstanding
Preferred Stock. FM Partners owns 1,275 shares of Preferred Stock or 19.62%
of the issued and outstanding Preferred Stock and Dynamic Value Partners
owns 500 shares of Preferred Stock or 7.69% of the issued and outstanding
Preferred Stock. Since the Preferred class does not have the right to vote
on any matter as an independent class, it has been converted to its Common
Stock to accurately reflect its voting power.
Certain Relationships and Related Transactions
Acrodyne Communications Inc. held a special meeting of their
stockholders on January 27, 1999 and the following three proposals were
unanimously approved.
A $4,300,000 investment in Acrodyne by Sinclair Broadcast Group, Inc.
("Sinclair"). In consideration for this investment, Sinclair received 1,431,333
shares of Acrodyne's common stock, and warrants to purchase up to 8,719,225
shares of Acrodyne's common stock, exercisable during a period of seven years.
Acrodyne amended the Certificate of Incorporation for the purpose of increasing
the number of authorized shares of Common Stock from 10,000,000 to 35,000,000.
Acrodyne completely reconstituted the Board of Directors as described further
below.
The Company's bylaws provide that either the Board of Directors or the
Stockholders may determine the number of directors on Acrodyne's Board of
Directors. As a condition to the Sinclair Investment and under the terms of the
Investment Agreement, Acrodyne's Board of Directors was reconstituted to include
seven members: three directors nominated by Sinclair, including Mr. Nat Ostroff
as Chairman, Mr. David Smith and Mr. David Amy, as Directors, two additional
directors nominated by Mr. A. Robert Mancuso, which includes Mr. Mancuso and Mr.
Martin Herman and in addition two independent directors who were nominated by
mutual consent of Sinclair and Mr. Mancuso, Mr. Richard Flam and Mr. Michael
Anderson.
Any future transactions between the Company and any affiliate thereof
will be on terms no less favorable to the Company than those which are generally
available from unaffiliated third parties and must be ratified by a majority of
independent members of the Company's Board of Directors who do not have an
interest in such transaction.
- 15 -
<PAGE>
Redemption of Series A Preferred Stock
The Certificate of Designation, Preferences and Relative,
Participating, Optional or Other Special Rights, and Qualifications, Limitations
and Restrictions (the "Certificate of Designations") of the Series A Preferred
Stock provides that this stock was redeemable, at Acrodyne's option, at any time
and from time to time. The redemption price of each share was equal to $3.0625
per share plus any accrued and unpaid dividends, as of the redemption date.
Acrodyne had, on the closing date of the Sinclair transaction, which was January
27, 1999 redeemed all of the 326,530 outstanding shares of the Series A
Preferred Stock held by the Scorpion Investors. The aggregate redemption price
for all outstanding shares of Series A Preferred Stock was $1,031,780 which
included accrued and unpaid dividends.
PROPOSAL II
ENGAGEMENT OF ANOTHER INDEPENDENT ACCOUNTANT AS THE
COMPANY'S PRINCIPAL ACCOUNTANT
Subject to shareholder ratification, the Board of Directors has
resolved not to reappoint the firm of PricewaterhouseCoopers LLP as the
Company's independent auditors. It has further been resolved that the Company
appoint Arthur Anderson LLP, as the Company's independent auditor and principal
accountant commencing on April 30, 1999. PricewaterhouseCoopers LLP., has served
as the Company's independent auditors since the Company's inception in May 1991.
The Board of Directors recommends that shareholders vote FOR the engagement of
another independent accountant as the Company's principal accountant, namely
Arthur Anderson, LLP. Ratification not to reappoint PricewaterhouseCoopers LLP.
as auditors would require a majority of the votes cast thereon. Any shares not
voted (whether by abstention, broker non-vote or otherwise) have no impact on
the vote. If the shareholders do ratify this proposal, other independent
auditors will be considered by the Board.
Representatives of PricewaterhouseCoopers LLP are expected to attend
the Meeting and will have the opportunity to make a statement if they desire and
to respond to appropriate questions.
During the fiscal year ended December 31, 1998, PricewaterhouseCoopers,
LLP examined the financial statements of the Company's wholly-owned subsidiary,
Acrodyne Industries, Inc., and provided other audit services to the Company and
its subsidiaries in connection with filings with the Securities and Exchange
Commission (the "SEC") and provided tax services. There are no qualifications,
disclaimers or adverse opinions between the Company and PricewaterhouseCoopers,
LLP. There are no disagreements or any unresolved issues to which the Company is
a party thereto. To the best of our knowledge, there are no disagreements,
issues or qualifications that relate to any matter of accounting principles or
practices between the Company and PricewaterhouseCoopers LLP.
- 16 -
<PAGE>
BOARD OF DIRECTORS' RECOMMENDATIONS
The Board of Directors unanimously recommends that the shareholders
vote "FOR" the foregoing Proposals.
SHAREHOLDERS PROPOSALS
Shareholders who wish to present proposals at the 2000 Annual Meeting
should submit their proposals in writing to the Secretary of the Company at the
address set forth on the first page of this proxy statement. Proposals must be
received no later than January 11, 2000 for inclusion in next year's proxy
statement and proxy card.
ANNUAL REPORT ON FORM 10-KSB
Upon the written request of any shareholder, the Company will provide,
without charge, a copy of the Company's Annual Report on Form 10-KSB filed with
the Commission for the year ended December 31, 1998. This request should be
directed to the Corporate Secretary, Acrodyne Communications, Inc., 516 Township
Line Road, Blue Bell, PA 19422.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, as well as persons who own more than
ten percent of a registered class of the Company's equity securities, to file
with the SEC initial reports of beneficial ownership and reports of changes in
beneficial ownership of the Common Stock. Directors, executive officers and
greater than ten percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) reports they file.
Based solely on a review of the copies of such reports furnished to the
Company, or written representations that no Form 5 was required, the Company
believes that all persons subject to the reporting requirements of Section 16(a)
filed all required reports on a timely basis during the past fiscal year.
GENERAL INFORMATION
The cost of soliciting the enclosed form of Proxy will be borne by the
Company. In addition, the Company will reimburse brokerage firms and other
persons representing beneficial owners of shares for their expenses in
forwarding solicitation material to such beneficial owners.
- 17 -
<PAGE>
Directors, officers and regular employees of the Company may, without additional
compensation, solicit proxies either personally or by telephone, telegram or
special letter.
At this time, the Board knows of no other business that will come
before the Meeting. However, if any other matters properly come before the
Meeting, the persons named as Proxies will vote on any such matters in
accordance with their best judgment.
By Order of the Board of Directors
David B. Amy, Secretary
April 30, 1999
- 18 -
<PAGE>
PROXY
ACRODYNE COMMUNICATIONS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS.
The undersigned stockholder of ACRODYNE COMMUNICATIONS, INC. hereby
appoints A. Robert Mancuso as proxy with full power of substitution, for and in
the name, place and stead of the undersigned, to represent the undersigned at
the Annual Meeting of Stockholders of ACRODYNE COMMUNICATIONS, INC. to be held
at the Cedar Brook Country Club, 180 Penllyn Road, Blue Bell, Pennsylvania 19422
on June 15, 1999 at 11:00 a.m., and at any adjournments thereof, and to vote
all shares of Common Stock, 8% Preferred Stock standing in the name of the
undersigned with all the powers the undersigned would possess if personally
present, in accordance with the instructions below and on the reverse hereof,
and in their discretion upon such other business as may properly come before the
meeting.
THIS PROXY WILL BE VOTED ON THE REVERSE HEREOF, AND WILL BE VOTED IN FAVOR
OF PROPOSALS 1 & 2 IF NO INSTRUCTIONS ARE INDICATED.
1. ELECTION OF DIRECTORS: NOMINEES:
A. Robert Mancuso, Martin J. Hermann, Richard P. Flam,
Michael E. Anderson, Nat Ostroff, David D. Smith, David B. Amy
FOR WITHHOLD
all nominees listed AUTHORITY
(except as marked to the contrary) (to vote for all nominees listed)
/ / / /
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line below)
2. Proposal for the engagement of another independent accountant as the
Company's principal accountant.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
<PAGE>
(Continued from other side)
Common Stock ____________
8% Preferred Stock_____________
/ / I PLAN TO ATTEND
MEETING
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders to be held June 15, 1999 and the Proxy Statement furnished
herewith.
Signature ____________________________ Date _________________
Please sign exactly as name appears hereon. When signing as attorney, executor,
administrator, trustee or guardian, give full title as such. If more than one
name appears hereon, all parties named should sign.
