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 STOCKHOLDERS
To Be Held On
June 7, 2000
The 2000 Annual Meeting of Stockholders (the "Meeting") of Acrodyne
Communications, Inc., (the "Company") will be held at the Sinclair Building,
10706 Beaver Dam Road, Cockeysville, Maryland 21030, Second Floor at 11:00 A.M.,
local time, for the following purpose:
To consider and vote on the following proposals:
(1) The Election of seven directors to serve for the ensuing year and
until their successors are elected.
(2) The ratification of Arthur Andersen LLP as the auditors of the
Company.
(3) To transact such other business as may properly come before the
Meeting or any adjournment thereof.
The record date for determining stockholders of record eligible to vote at
the Meeting is April 19, 2000.
By Order of the Board of Directors,
/s/ David B. Amy
David B. Amy,
Secretary
April 30, 2000
Stockholders are invited to attend the meeting in person.
STOCKHOLDERS 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 STOCKHOLDERS
TO BE HELD ON JUNE 7, 2000
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Acrodyne Communications, Inc. (the
"Company") for use in voting at the 2000 Annual Meeting of Stockholders (the
"Meeting") to be held at the Sinclair Building, 10706 Beaver Dam Road,
Cockeysville, Maryland 21030, Second Floor on June 7, 2000 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 9, 2000 this proxy statement and the enclosed form of proxy
will be mailed to stockholders. The Annual Report to Stockholders for the fiscal
year ended December 31, 1999 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 Arthur Andersen, LLP 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.
The Board of Directors recommends that you vote FOR all of the foregoing
proposals.
Record Date and Share Ownership
The Board of Directors of the Company has fixed the close of business on
April 19, 2000 as the record date (the "Record Date") for the determination of
the stockholders 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 "Common Stock"), and (ii) its 8% Convertible
Redeemable Preferred Stock, par value $1.00 per share (the "8% Preferred
Stock").
As of April 28, 2000 there were 6,981,161 shares issued and outstanding of
the Common Stock, and 6,500 shares issued and outstanding of the 8% Preferred
Stock.
<PAGE>
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. The Common Stock and the 8% Preferred Stock vote as one class.
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. The
stockholders present may adjourn the meeting despite the absence of a quorum.
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.
PROPOSAL I - ELECTION OF DIRECTORS
The seven individuals named in the table below are the Company's nominees
for election to the Board of Directors. Each of the nominees currently serves on
the Company's Board of Directors. The directors are elected for a term of one
year and will hold office until the next annual meeting of the stockholders or
until his or her successor has been elected and qualified. At the Annual
Meeting, all directors will be elected to serve until the 2001 Annual Meeting of
Stockholders.
Each of the nominees has consented to being named as a nominee in this
Proxy Statement and has agreed to serve if elected. Should any nominee become
unable or unwilling to serve for any reason, it is intended that the persons
named in the solicited proxy will vote for the election of such other person in
their stead as may be designated by the Board of Directors.
The nominees of the Board of Directors are listed below, with certain
information about each of them:
<TABLE>
<CAPTION>
Served as
Name Age Position with Company Director/Officer Since
---- --- --------------------- ----------------------
<S> <C> <C> <C>
Nat S. Ostroff 59 Director, Chairman of the Board of Directors January 1999
A. Robert Mancuso 62 Director, President and CEO of the Company and May 1991
Acrodyne Industries, Inc.
Martin J. Hermann 61 Director of the Company May 1991
David D. Smith 49 Director of the Company January 1999
David B. Amy 47 Director , Secretary and Treasurer
of the Company and Acrodyne Industries, Inc. January 1999
Richard P. Flam 57 Director of the Company January 1999
Michael E. Anderson 45 Director of the Company March 1999
</TABLE>
NAT S. OSTROFF has served as Chairman of the Board of Directors since he
was elected at the special meeting of the stockholders of the Company, on
January 27, 1999. Mr. Ostroff is Vice President for New Technology since joining
Sinclair in January of 1996. Prior to joining Sinclair, he was the President and
2
<PAGE>
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 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, 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.
MARTIN J. HERMANN has served as Secretary and General Counsel of the
Company from May 1991 through January 27, 1999. Mr. Hermann 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 stockholders of the Company held on January 27, 1999. 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 stockholders of the Company held on January 27, 1999. Mr. Amy served
as Chief Financial Officer of Sinclair from October 1994 until September 1999
when he was elected as Executive Vice President of Sinclair Broadcast Group. Mr.
Amy continues to serve Sinclair as its Executive Vice President through this
same date. 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 he was elected at the special
meeting of stockholders of the Company held on January 27, 1999. 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 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 March 22, 1999. Mr.
Anderson is a Managing Director in the Media Group at Merrill Lynch with a
primary focus on the Broadcasting and Cable industries. Prior to joining Merrill
Lynch in June 1999, Mr. Anderson was a member of the Media/Telecom Group at
Salomon Smith Barney having joined the firm in June 1992. Mr. Anderson was
formerly a Senior Vice President at Kidder, Peabody & Co. Incorporated, 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
3
<PAGE>
London office. From 1977 to 1981, Mr. Anderson served as an 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
stockholders 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.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACTS
Section 16(a) of the Securities Exchange Act of 1934 requires the officers,
Directors and persons who own more than 10% of a registered class of the
Company's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the NASD. Officers,
Directors and greater than ten-percent shareholders are required by Securities
and Exchange Commission regulations to furnish the Company with copies of all
such 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 Section 16(a) filing requirements applicable to its officers,
Directors and greater than ten-percent beneficial owners were complied with
through December 31, 1999 and 1998.
Board of Directors meetings, Compensation.
The Board of Directors held five (5) meetings during the fiscal year ended
December 31, 1999 at which all directors were present and acted by unanimous
written consent on several occasions.
Directors are reimbursed for travel and other reasonable expenses related
to Board of Directors meetings. During the March 1999 Board of Directors
meeting, the Board granted to outside Directors, Martin Hermann, Richard Flam,
and Michael Anderson, 5,000 stock options with a five year exercise period, and
immediate vesting. Also, during the same Board of Directors meeting, the Board
unanimously approved the appointment of Martin Hermann, David Amy and Richard
Flam as the Awards Committee to administer awards under the 1999 Long Term
Incentive Plan that was adopted at the 1999 Annual Meeting.
During the June 1999 Board of Directors Meeting, the Board of Directors
unanimously approved the appointment of David Amy, Martin Hermann and Richard
Flam to the Acrodyne Communications, Inc,. and the Acrodyne Industries, Inc.,
Audit Committees. Furthermore, the Board of Directors unanimously appointed
David Amy, Martin Hermann and Richard Flam as members of the Acrodyne
Communications, Inc. and Acrodyne Industries, Inc., Compensation Committee.
The affirmative vote of the holders of shares representing a majority of
the voting rights issued and outstanding is required to elect the Company's
nominees for the Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
THE COMPANY'S NOMINEES FOR THE BOARD OF DIRECTORS NAMED ABOVE, WHICH IS
DESIGNATED AS PROPOSAL 1 ON THE ENCLOSED PROXY CARD
4
<PAGE>
Executive Officers of the Registrant
The following table sets forth certain information about the executive
officers of the Company. 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 62 President and Chief Executive Officer of the Company and
Acrodyne Industries, Inc.
Nat S. Ostroff 59 Chairman of the Board of Directors of the Company and
Chairman of the Management Committee of Acrodyne
Industries, Inc.
David B. Amy 47 Secretary and Treasurer of the Company and of Acrodyne
Industries, Inc.
Dr. Shamir Andrew Ally 58 Corporate Controller of Acrodyne Industries, Inc.
William H. Barclay 58 Vice President Manufacturing of Acrodyne Industries, Inc.
</TABLE>
A. ROBERT MANCUSO has been President and Chief Executive Officer of the
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 stockholders of the Company held 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.
DAVID B. AMY has served as Director since he was elected at the special
meeting of stockholders of the Company held on January 27, 1999. Mr. Amy served
as Chief Financial Officer of Sinclair from October 1994 until September 1999
when he was elected as Executive Vice President of Sinclair Broadcast Group. Mr.
Amy continues to serve Sinclair as its Executive Vice President through this
same date. 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.
DR. SHAMIR ANDREW ALLY has served as Acrodyne's Cost Accounting Manager
from February 1999 to May 1999, and as Corporate Controller from May 1999 to
present. Prior to joining Acrodyne, Dr. Ally was a Business Turnaround/Start up
Financial Consultant from 1987 to 1999 in various capacities, as Corporate
Controller, Chief Financial Officer and Vice President Finance & Operations
5
<PAGE>
through ICFS. From 1985 to 1987 he was Corporate Controller for Veeco-UPA
Technology, (NYSE listed) and from 1979 to 1985 he was Corporate
Controller/Chief Accounting Officer for Porta Systems Corporation. (AMEX listed)
Prior to 1979 he was an entrepreneur and Financial Vice President in Guyana,
South America. Dr. Ally holds the UK equivalent to the CPA designation and a BBA
and MBA from Adelphi University, New York. He also holds a Ph.D. in Accounting,
Finance and Administration, and is a SAP R/3 Functional Consultant.
WILLIAM H. BARCLAY joined Acrodyne in June of 1999 as Vice President
Manufacturing. Prior to joining Acrodyne, Mr. Barclay was employed with Kulicke
and Soffa Industries, a semiconductor assembly equipment company, from February
1990 to June 1999. Mr. Barclay held the position of Director of Corporate
Business Programs and earlier in the 1990's held positions in manufacturing and
engineering management. From 1974 to 1990 Mr. Barclay held management positions
in engineering and manufacturing with subsidiaries of Philips NV. Prior to 1974
Mr. Barclay's experience included positions with IBM and several new high-tech
ventures with both management and professional responsibilities in the areas of
Quality, Manufacturing, Engineering and Marketing. He earned both undergraduate
and graduate degrees from the University of Pennsylvania.
Executive Compensation
The following table summarizes the compensation earned by the Company's
executive officers for services provided during the Company's fiscal years ended
December 31, 1999 and 1998.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
-------------------------------- -------------
Securities
Name and Fiscal Other Underlying
Principal Position Year Salary Compensation Options (#)
- ------------------ ---- ------ ------------ -----------
<S> <C> <C> <C> <C>
A. Robert Mancuso 1999 $175,000 $900/month 175,000
President and CEO 1998 $150,000 auto allowance None
Nat S. Ostroff 1999 $150,000 300,000
Chairman of the Board 1998 None None
David B. Amy 1999 None None
1998 None None
Dr. Shamir Andrew Ally 1999 $70,000 None
Corporate Controller 1998 None None
William H. Barclay 1999 $125,000 55,000
Vice-President Manufacturing 1998 None None
</TABLE>
On January 27, 1999 Mr. Nat Ostroff was elected as Chairman of the Board of
Directors and Chairman of the Management committee of the Company and was
granted compensation in the amount of $150,000 annually.
On March 20, 2000 Dr. Shamir Ally was granted compensation in the amount of
$80,000.
On June 1, 1999, William Barclay entered into an employment agreement with
Acrodyne Industries, Inc., for a term of two years and was granted compensation
in the amount of $125,000 annually.
6
<PAGE>
Options/SAR Grants in Last Fiscal Year
The Company has three stock option plans approved by the Board of Directors
and the Company's stockholders: the 1993 Stock Option Plan , the 1997 Stock
Option Plan and the newly adopted 1999 Long-Term Incentive 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 judgments 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.
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 650,000 shares of
Common Stock were granted. The exercise price of 450,000 was $4.50 per share. On
October 16, 1998, the Board of Directors repriced the exercise price of these
options to $3.00 per share. In January 1999, Mr. Mancuso received 175,000 stock
options from this plan, at an exercise price of $3.88, as part of his 1999
Employment Agreement. In December of 1998, the Company granted 25,000 stock
options from this plan at an exercise price of $3.50, to a consultant, Mesa
Capital, for services. Such options were valued at $65,000 at the time of
issuance and were recorded as an expense for fiscal year ending December 31,
1998.
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 ceased 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.
1999 Long-Term Incentive Plan In March 1999, the Company adopted the 1999
Long-Term Incentive Plan under which awards may be granted in the form of stock,
restricted stock, stock options, stock appreciation rights or cash. Under the
1999 Plan, the Company may make stock-based awards of up to an aggregate of
2,000,000 shares of Common Stock. On August 23, 1999 the Board granted 370,000
options to employees and Board members. The options have an exercise price of
$2.34 per share.
OPTION/SAR GRANTS IN LAST FISCAL YEAR 1999
(Individual Grants)
<TABLE>
<CAPTION>
Percent of
Number of Total Options
Securities Granted to Exercise
Underlying Employees Price Expiration
Name Options In 1999 per Share Date
---- ------- ------- --------- ----
<S> <C> <C> <C> <C>
A. Robert Mancuso 175,000 32.15 % $3.88 January 1, 2009
Nat Ostroff 300,000 55.05 % $2.34 August 23, 2009
William Barclay 55,000 10.10 % $2.34 August 23, 2009
Martin Hermann 5,000 .90 % $2.34 August 23, 2009
Richard Flam 5,000 .90 % $2.34 August 23, 2009
Michael Andersen 5,000 .90 % $2.34 August 23, 2009
Total grants in fiscal 1999 545,000 100 %
</TABLE>
7
<PAGE>
In January 1999, Mr. Mancuso received 175,000 stock options from the 1997 Stock
Option Plan, at an exercise price of $3.88, as part of his 1999 Employment
Agreement, 116,666 of these options became exercisable on January 4, 1999 and
2000. The remaining 58,334 options will become exercisable on January 4, 2001.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options Options
Number Shares at Year End at Year End
of Held Acquired Exercisable (E)/ Exercisable (E)/
Name Options on Exercise Unexercisable (U) Unexercisable
- ---- ------- ----------- --------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
A. Robert Mancuso 612,500 - 0 - E 554,166 E $84,400
U 58,334 U $0
Nat S. Ostroff 300,000 - 0 - E 300,000 E $123,000
U None U $0
William H. Barclay 55,000 - 0 - E 27,500 E 11,275
U 27,500 U 11,275
Directors 15,000 - 0 - E 15,000 E 6,150
U None U $0
</TABLE>
Employment Agreements
Mancuso Employment Agreement
As a condition to the Sinclair investment, the Company entered into an
employment agreement with Mr. Mancuso (the "Employment Agreement"). The
Employment Agreement has an initial three year term, and commences on January 4,
1999 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 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.
Barclay Employment Agreement
The Company entered into an employment agreement with Mr. Barclay (the
"Employment Agreement"). The Employment Agreement has an initial two year term
commencing on June 1, 1999. The agreement may be renewed and or renegotiated for
an additional two (2) year terms or more after the Term subject to the mutual
approval of Employee and Company management. Mr. Barclay is entitled to an
annual base salary of $125,000 during the term. The base salary may be increased
from time to time by the Company at its discretion.
8
<PAGE>
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 and Warrants, as of April 30, 2000, 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
executive officers and (v) all directors and officers as a group:
<TABLE>
<CAPTION>
(1) (2) (3) (4)
Percent
Name & Address Amount & Nature of of Voting
Title of Class of Beneficial Owner (a) Beneficial Ownership Stock
- -------------- ----------------------- -------------------- -----
<S> <C> <C> <C>
Common Stock Sinclair 4,256,376 shares (b) 48.27%
Common Stock A. Robert Mancuso 609,166 shares (c) 12.46%
Common Stock Martin J. Hermann 68,000 shares (d) 0.90%
Common Stock Scorpion / Newlight Groups 500,000 shares (e) 6.69%
Common Stock Nat Ostroff 300,000 shares (f) 4.12%
Common Stock William H .Barclay 27,500 shares (g) 0.41%
All officers and directors as a group (7 persons) 1,004,666 shares (h) 15.08%
Preferred Stock assuming
conversion
into Common Stock
-----------------
8% Preferred Stock Furst Associates 85,116 shares (i) 1.26%
8% Preferred Stock Eagle Partners 45,672 shares (i) 0.68%
8% Preferred Stock FM Partners 35,292 shares (i) 0.52%
8% Preferred Stock Dynamic Value Partners 13,840 shares (i) 0.21%
<FN>
(a) The address of Sinclair Broadcast Group, Inc. is 10706 Beaver Dam Road,
Cockeysville, Maryland 21030 The address of Mr. Mancuso, Mr. Ostroff and
Mr. Barclay 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, 112,000 shares issued in
accordance with the Lease and Loan Guarantee Agreement, 75,000 shares
issued upon the exercise of 75,000 warrants from the Investor Warrant
Agreement 1,258,333 shares of Common Stock issuable upon the exercise of
warrants from the Investor Warrant Agreement exercisable immediately after
the closing of the Sinclair Investment on January 27, 1999 and 579,710
immediate exercisable after the execution of the Debenture Agreement.
(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 200,000 vested on June 30, 1997, 1998 and 1999.
Includes 175,000 shares of Common Stock granted according to the 1999
Employment Agreement under the 1997 Stock Option Plan of which 116,666
vested on January 4, 1999 and January 4, 2000.
9
<PAGE>
(d) Includes 20,000 shares of Common Stock issuable upon the exercise of vested
options granted under Acrodyne's 1997 Stock Option Plan. Includes 5,000
shares of Common Stock upon the exercise of vested options under the 1999
Long Term Incentive Plan.
(e) Includes 500,000 shares of Common Stock issuable upon the exercise of
warrants granted under a Stock Purchase Plan.
(f) Includes 300,000 shares of Common Stock issuable upon the exercise of
options granted under the 1999 Long Term Incentive Plan.
(g) Includes 27,500 shares of Common Stock issuable upon the exercise of vest
on options granted under the 1999 Long Term Incentive Plan.
(h) Reflects beneficial ownership of all directors and officers and includes
1,054,666 shares of Common Stock issuable upon the exercise of options.
None of the officers or directors of Acrodyne beneficially owns any shares
of Preferred Stock.
(i) Preferred Stockholders own in the aggregate 6,500 shares of Preferred Stock
at a conversion rate at which 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 vote as
an independent class, this table assumes the conversion of all Preferred
Stock to Common Stock to accurately reflect beneficial ownership.
</FN>
</TABLE>
Certain Relationships and Related Transactions
Sinclair Ownership and Beneficial Ownership Table
(beneficial ownership/ may be exercised with 60 days)
<TABLE>
<CAPTION>
No. of shares Type Method Percentage
------------- ---- ------ ----------
<S> <C> <C> <C> <C>
ownership 1,431,333 Common stock Subscription Agreement
- --------------------------------------------------------------------------------------------------------------------------
ownership 800,000 Common Stock Previously held by Scorpion Newlight
Investors LLC
- --------------------------------------------------------------------------------------------------------------------------
ownership 112,000 Common Stock Lease and Loan Guarantee Agreement
- --------------------------------------------------------------------------------------------------------------------------
ownership 75,000 Common Stock Exercised warrants from Investor Warrant
Agreement
- --------------------------------------------------------------------------------------------------------------------------
Total Actual ownership 2,418,333 Common Stock Total Shares Outstanding 6,981,161
34.64%
- --------------------------------------------------------------------------------------------------------------------------
Beneficial Ownership 1258,333 Warrants Investor Warrants (2,000,000 total)
(1,333,333 exercisable less 75,000
previously exercised)
- --------------------------------------------------------------------------------------------------------------------------
Beneficial Ownership 579,710 Warrants Debenture Agreement
- --------------------------------------------------------------------------------------------------------------------------
Actual plus Beneficial 4,256,376 48.27%
Ownership
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
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
10
<PAGE>
independent members of the Company's Board of Directors who do not have an
interest in such transactions.
Certain Relationships with Sinclair:
On January 27, 1999 Sinclair Broadcast Group acquired a significant equity
interest in Acrodyne. 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., 112,000 shares were
recently acquired in the Lease and Loan Guarantee Agreement and 75,000 shares
were recently acquired in the exercise of 75,000 warrants from the Investor
Warrant Agreement. Sinclair now holds an aggregate of 2,418,333 shares of
Acrodyne, representing approximately 34.64% of issued common stock, assuming no
other warrants are exercised. If Sinclair were to exercise all warrants received
pursuant to the Subscription Agreement, Sinclair would own 11,642,268 shares of
Common Stock, representing 71.85% of all outstanding voting stock on a fully
diluted basis.
As part of the transactions dated January 27, 1999, between Sinclair and
Acrodyne, three Sinclair employees, Nathanial Ostroff, David Smith and David
Amy, were elected to serve on Acrodyne's board of directors. Nathanial Ostroff
has served as Sinclair's Vice President for New Technology since joining
Sinclair in January of 1999. David Smith has served as President, Chief
Executive Officer and Chairman of the Board of Sinclair since September 1990.
David Amy has served as Chief Financial Officer of Sinclair since October, 1994
until September 1999. Mr. Amy now serves as Executive Vice President of Sinclair
Broadcast Group. In addition he serves as Secretary of Sinclair Communications,
Inc., a Sinclair subsidiary, which owns and operates Sinclair's broadcast
operations.
In November of 1999 Sinclair and Acrodyne entered into a Guaranty and Lease
Compensation Agreement under which, (i) in consideration for Sinclair
guaranteeing Acrodyne's loan of $2,500,000 from PNC Bank as of September 19,
1999, Sinclair received 75,300 Shares and, (ii) in consideration for Sinclair
entering into a lease with PBP LP for the benefit of Acrodyne, Sinclair received
36,700 Shares. (A total of 112,000 Shares of Common Stock received in
compensation for the Lease and Loan Agreement)
In March 2000 Sinclair and Acrodyne entered into a Debenture Agreement
under which Acrodyne received a loan from Sinclair for $2,000,000 in principal
with an interest rate of 10.5% per year. As part of the Debenture, Sinclair may
exercise its right at any time, to convert all of the outstanding principal into
Shares. The number of Shares issued will be determined by dividing the principal
outstanding as of the conversion date into $3.45. Sinclair may immediately
convert the current principal into 579,710 Shares.
Impact on Voting Rights of Shareholders
Pursuant to the transaction agreements, Sinclair has the right to nominate
three out of seven members of Acrodyne's board of directors, Mr. Mancuso has the
right to nominate two of seven members of Acrodyne's board of directors, and the
remaining two members of Acrodyne's board of directors must be independent from
and nominated by both Mr. Mancuso and Sinclair. Mr. Mancuso and Sinclair have
agreed to vote their shares in favor of these nominees. This may prevent
shareholders from electing any members of Acrodyne's board of directors which
are not nominated by Sinclair and Mr. Mancuso.
11
<PAGE>
Removal of Directors
Pursuant to the transaction agreements, Mr. Mancuso and Sinclair are
limited in their ability to vote their shares for the removal of any member of
Acrodyne's board of directors. In addition, upon the request of either Mr.
Mancuso or Sinclair to remove a director previously designated for nomination
solely designated by Mr. Mancuso or Sinclair, as the case may be. This may
prevent shareholders from removing any members of Acrodyne's board of directors
which are not requested for removal by Sinclair and Mr. Mancuso.
Change of Control
Currently, Sinclair has significant control over Acrodyne, since it owns
34.64% of the outstanding voting shares with an option to immediately exercise
warrants to purchase 1,258,333 Shares common stock, and an option to immediately
convert a debenture into 579,710 Shares thereby increasing its ownership to
48.27% of the outstanding voting shares. Sinclair could, through the exercise of
all warrants in accordance with their respective terms, increase its ownership
to 71.85% of the outstanding Shares. Considering Sinclair's substantial control
over Acrodyne's board of directors and its holding of a significant number of
voting shares, it will be very unlikely or impossible for any third party to
acquire control over Acrodyne without Sinclair's prior approval.
PROPOSAL II
RATIFICATION OF ARTHUR ANDERSEN LLP
AS THE COMPANY'S INDEPENDENT AUDITORS
Subject to shareholder ratification, the Board of Directors has REAPPOINTED
THE FIRM OF Arthur Andersen LLP ("Arthur Andersen") as the Company's independent
auditors to examine the Company's financial statements for the fiscal year ended
December 31, 2000. Arthur Andersen has served as the Company's independent
auditors since the appointment on April 30, 1999. The Board of Directors
recommends that the shareholders vote FOR such ratification. Ratification of the
appointment of 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 not ratify this appointment, other
independent auditors will be considered by the Board.
Representatives of Arthur Andersen 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.
The Board of Directors recommends that stockholders vote FOR the engagement
of Arthur Andersen, LLP as the Company's independent auditor. Any shares not
voted (whether by abstention, broker non-vote or otherwise) have no impact on
the vote.
The affirmative vote of the holders of shares representing a majority of
the voting rights issued and outstanding is required to appoint a new
independent auditor.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ENGAGEMENT OF
ARTHUR ANDERSEN DESIGNATED AS PROPOSAL 2 ON THE ENCLOSED PROXY CARD.
STOCKHOLDERS PROPOSALS
Stockholders who wish to present proposals at the 2001 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
12
<PAGE>
received no later than January 11, 2001 for inclusion in next year's proxy
statement and proxy card.
ANNUAL REPORT ON FORM 10-KSB/A
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/A filed
with the Commission for the year ended December 31, 1999. 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 stockholders 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.
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 of Directors 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
/s/ David B. Amy
David B. Amy,
Secretary
April 30, 1999
13
<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 Sinclair Building, 10706 Beaver Dam Road, Cockeysville, Maryland 21030,
Second Floor at 11:00A.M., local time 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: Nat S. Ostroff, A. Robert Mancuso,
David D. Smith, David B. Amy, Martin J. Hermann, Richard P. Flam, Michael E.
Anderson
FOR
all nominees listed WITHHOLD 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)
----------------------------------------------------------------------
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
<PAGE>
(Continued from other side)
2. Proposal for the engagement of another independent accountant as the
Company's principal accountant.
FOR /_/ AGAINST /_/ ABSTAIN /_/
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 7, 2000
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.
