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NATIONAL WIRELESS HOLDINGS INC.
249 ROYAL PALM WAY, SUITE 301
PALM BEACH, FLORIDA 33480
March 31, 1997
To the Holders of Common Stock:
The annual meeting of stockholders will be held at the Holiday Inn Crown
Point, 16701 Collins Avenue, Miami Beach, Florida 33160 at 11:00 a.m. on April
18, 1997. A formal Notice of the Annual Meeting, a proxy card and Proxy
Statement are attached hereto.
You are cordially invited to attend the annual meeting in person; if this
should be impossible, we request that you sign, date, and mail your proxy card
promptly.
Prompt return of your voted proxy will reduce the cost of further mailings.
You may revoke your voted proxy at any time prior to the meeting or vote in
person if you attend the meeting.
It is always a pleasure for me and the other members of the Board of
Directors to meet with our stockholders. We look forward to greeting as many of
you as possible at the meeting.
Terrence S. Cassidy
President and
Chief Executive Officer
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NATIONAL WIRELESS HOLDINGS INC.
249 ROYAL PALM WAY, SUITE 301
PALM BEACH, FLORIDA 33480
NOTICE OF ANNUAL MEETING
March 31, 1997
To the Holders of Common Stock:
NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders of
National Wireless Holdings Inc. will be held at 11:00 a.m. Holiday Inn Crown
Point, 16701 Collins Avenue, Miami Beach, Florida 33160, on April 18, 1997, for
the following purposes:
(1) To amend the Company's Certificate of Incorporation:
(a) To provide for the election of directors to staggered terms and
for certain related matters;
(b) To limit the liability and broaden the indemnity of directors and
officers;
(c) To provide standards for the Board of Directors in evaluating
certain offers;
(d) To require that stockholder actions may only be taken at an
annual or special meeting of stockholders and may not be taken by
written consent; and
(e) To require that certain sections of the Certificate of
Incorporation may only be amended by the affirmative vote of at
least 75% of the total number of the then outstanding shares of
capital stock of the Company;
(2) To amend the Company's By-Laws
(a) To provide for the election of directors to staggered terms; and
(b) To provide for the removal of directors only for "cause";
(3) To elect five (5) directors of the Company to hold office for initial
terms of one, two, or three years, or in the event the proposed
amendments to the Company's Certificate of Incorporation and By-Laws
authorizing a staggered Board of Directors are not approved, then for
a term of one year;
(4) To ratify the appointment of Coopers & Lybrand L.L.P. as independent
public accountants for the year 1997; and
(5) To take action upon any other matters that may properly come before
the meeting.
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The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Company will admit to the Annual Meeting stockholders of record,
persons holding proof of beneficial ownership or who have been granted proxies
and any other person that the Company, in its sole discretion, may elect to
admit. If you plan to attend the Annual Meeting, please check the appropriate
box on your proxy card.
Stockholders of record at the close of business on March 17, 1997 are
entitled to notice of, and to vote at the Annual Meeting or any adjournment
thereof. A list of such stockholders will be available at the Annual Meeting
and during the ten days prior thereto, at the office of the Company's counsel,
Hahn & Hessen LLP, 350 Fifth Avenue, in the city of New York, New York County,
New York.
By Order of the Board of Directors,
James Kardon
Secretary
New York, New York
March 31, 1997
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING
PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN
THE ENCLOSED PREPAID ENVELOPE.
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR
NOT YOU EXPECT TO ATTEND, PLEASE DATE AND SIGN THE ENCLOSED PROXY. IF YOU
DECIDE TO ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES
IN PERSON.
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NATIONAL WIRELESS HOLDINGS INC.
249 ROYAL PALM WAY, SUITE 301
PALM BEACH, FLORIDA 33480
PROXY STATEMENT
The enclosed proxy is being solicited by the Board of Directors of the
Company for use in connection with the annual meeting of stockholders to be held
on April 18, 1997. This proxy statement and enclosed proxy are first being sent
to stockholders on or about March 31, 1997. The mailing address of the principal
executive office of the Company is 249 Royal Palm Way, Suite 301, Palm Beach,
Florida 33480. The cost of preparing, printing and mailing the notice of
meeting, proxy, proxy statement and annual report will be borne by the Company.
Proxy solicitation other than by use of the mail may be made by regular
employees of the Company by telephone and personal solicitation. Banks,
brokerage houses, custodians, nominees and fiduciaries are being requested to
forward the soliciting material to their principals and to obtain authorization
for the execution of proxies, and may be reimbursed for their out-of-pocket
expenses incurred in that connection. Any stockholder giving the enclosed proxy
has the right to revoke it at any time before it is voted. To revoke a proxy,
the stockholder must file with the Secretary of the Company either a written
revocation or a duly executed proxy bearing a later date. If you decide to
attend the meeting, you may revoke your proxy and vote your shares in person.
The record of stockholders entitled to notice of, and to vote at, the
annual meeting was taken at the close of business on March 17, 1997. At that
date the Company had outstanding 3,253,000 shares of Common Stock ($.01 par
value) of the Company ("Common Stock"). Each share of Common Stock is entitled
to one vote. No other class of securities is entitled to vote at this meeting.
A number of the proposals to be voted on at the annual meeting would have
the effect of reducing the likelihood that the Company would be subject to a
change of control or would delay such a change of control and may have the
effect of preserving the incumbent management in office. In addition, such
proposals are also designed to discourage accumulations of large blocks of the
Company's voting shares by purchasers whose objective is to have such voting
shares repurchased by the Company at a premium, thus reducing the temporary
fluctuations in the market price of such shares caused by such accumulations.
Accordingly, stockholders could be deprived of certain opportunities to sell
their shares at a temporarily higher market price. No such proposal is in
response to any change of control activity of which management of the Company is
aware.
The Proxies given pursuant to this solicitation will be voted at the
meeting or any adjournment thereof. Abstentions and broker non-votes are voted
neither "for" nor "against," and have no effect on the vote, but are counted in
the determination of a quorum.
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AVAILABLE INFORMATION AND SOURCES OF INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). The reports, proxy statements
and other information filed by the Company with the SEC can be inspected and
copied at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the SEC's Regional Offices at 7
World Trade Center, 13th Floor, New York, New York 10048, and Northwest Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material also may be obtained by mail from the Public Reference Section of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Reports and other information concerning the Company can be inspected and copied
at the offices of the National Association of Securities Dealers, Inc. at 1735 K
Street, N.W., Washington, D.C. 20006.
Statements contained in this Proxy Statement or in any document
incorporated by reference in this Proxy Statement as to the contents of any
contract or other document referred to herein or therein are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed or incorporated by reference as an exhibit to the
registration statement or such other document, each such statement being
qualified in all respects by such reference.
No persons have been authorized to give any information or to make any
representation other than those contained in this Proxy Statement in connection
with the solicitations of proxies made hereby and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or any other person. The delivery of this Proxy Statement shall
not under any circumstances create an implication that there has been no change
in the affairs of the Company since the date hereof or that the information
herein is correct as of any time subsequent to its date.
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SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table lists the number of shares of Common Stock beneficially
owned by those known by the Company to own beneficially 5% or more of the Common
Stock, all the directors, and nominees for election as directors, each executive
officer listed in the table under the caption "Executive Compensation" and by
all directors and executive officers of the Company as a group. On March 17,
1997, there were 3,253,000 shares of Common Stock outstanding.
Name Amount and Nature of
Beneficial Ownership+ Percent
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Terrence S. Cassidy.................. 469,000(1) 14.4%
249 Royal Palm Way, Suite 301
Palm Beach, FL 33480
Michael J. Specchio.................. 469,000(2) 14.4%
233 Garrard Drive
Rantoul, IL 61866
Paul Sinderbrand..................... 80,000 2.5%
888 16th Street NW
Washington, DC 20006
Nicholas Applegate Capital
Management......................... 168,100(3) 5.2%
600 West Broadway, 29th Floor
San Diego, CA 92101
Peoples Choice TV Corp............... 300,000(4) 8.4%
2 Corporate Drive, Suite 249
Shelton, Connecticut 06484
Wall Street Associates............... 196,900(5) 6.0%
1200 Prospect Street, Suite 100
P.O. Box 8589
La Jolla, California 92038-8585
Wellington Management
Company LLP........................ 322,000(6) 9.9%
75 State Street
Boston, Massachusetts 02109
Thomas R. DiBenedetto................ 23,000(7) *
249 Royal Palm Way, Suite 301
Palm Beach, FL 33480
Louis B. Lloyd....................... 16,000(8) *
156 W. 56th Street
New York, New York 10019
Michael A. McManus, Jr............... 10,000(9) *
241-02 Northern Blvd
Douglaston, New York 11362
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Timothy Mathews...................... 30,140(10) *
233 North Garrard
Rantoul, IL 61866
All officers and directors as a
group (seven persons).............. 1,097,140
(1)(2)(7)(8)(9)(10) 32.9%
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+ The number of shares beneficially owned is deemed to include shares of the
Company's Common Stock as to which the beneficial owner has or shares either
investment or voting power. Unless otherwise stated, and except for voting
powers held jointly with a person's spouse, the persons and entities named in
the table have voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by them. All information with respect to
beneficial ownership is based on filings made by the respective beneficial
owners with the Securities and Exchange Commission (the "SEC") or information
provided to the Company by such beneficial owners.
* Less than 1%.
(1) Includes 50,000 shares owned by a family trust, of which Mr. Cassidy
disclaims beneficial ownership.
(2) Includes 50,000 shares owned by a family trust, of which Mr. Specchio
disclaims beneficial ownership.
(3) Includes 168,100 shares which Nicholas Applegate Capital Management
("NACM") has sole power to vote or to direct the vote and 168,100 shares
which NACM has sole dispositive power, each as reported on its most recent
Schedule 13G. NACM is an investment adviser registered with the Securities
and Exchange Commission under the Investment Advisers ACT of 1940, as
amended (the "Advisers Act").
(4) Includes 300,000 shares issuable pursuant to an option.
(5) Includes 105,100 shares which Wall Street Associates ("WSA") has the sole
power to vote or to direct the vote and 196,900 shares which WSA has sole
dispositive power as reported on Schedule 13G. WSA is an investment adviser
registered with the Securities and Exchange Commission under the Advisers
Act.
(6) Includes 136,000 shares which Wellington Management Company, LLP ("WMC")
has shared power to vote or to direct the vote and 322,000 shares which WMC
has shared dispositive power, each as reported on its most recent Schedule
13G. WMC is an investment adviser registered with the Securities and
Exchange Commission under the Advisers Act. As of January 31, 1997 WMC, in
its capacity as investment adviser, may be deemed to have beneficial
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ownership of 322,000 shares of Common Stock that are owned by numerous
investment advisory clients, none of which is known to have such
interest with respect to more than five percent of the shares of
Common Stock outstanding except Wellington Trust Company NA ("WTC"), a
subsidiary of WMC. According to the Schedule 13G, WTC is a national
bank organized under the laws of the United States and, as such, is
exempt from registration as an investment adviser with the Securities
and Exchange Commission pursuant to the Advisers Act. As of January
31, 1997, WTC, in its capacity as investment adviser, may be deemed to
have beneficial ownership of 195,800 shares of Common Stock that are
owned by numerous investment advisory clients, none of which is known
to have such interest with respect to more than five percent of the
shares of Common Stock outstanding.
(7) Includes 16,000 shares currently issuable upon the exercise of options and
7,000 shares owned by Boston International Partners, L.P. ("BIPLP"), of
which Mr. DiBenedetto is General Partner and in which he has an approximate
56% partnership interest. Mr. DiBenedetto's children own an additional 5%
of BIPLP, of which Mr. DiBenedetto disclaims beneficial ownership.
(8) Includes 16,000 shares currently issuable upon the exercise of options.
(9) Includes 10,000 shares currently issuable upon the exercise of options.
(10) Includes 30,000 shares currently issuable upon the exercise of options.
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<PAGE>
PROPOSALS 1(A)-(E)
AMENDMENT OF CERTIFICATE OF INCORPORATION
The Board of Directors of the Company has adopted resolutions proposing
amendments to the Company's Certificate of Incorporation, a number of which
would have the effect of reducing the likelihood that the Company would be
subject to a change of control or would delay such a change of control. No such
amendment is in response to any change of control activity of which management
of the Company is aware. A copy of the proposed amendments to the Company's
Certificate of Incorporation is set forth in Appendix I attached hereto and a
description of the salient amendments are set forth below.
(a) AMENDMENT OF CERTIFICATE OF INCORPORATION TO AUTHORIZE STAGGERED TERMS FOR
ELECTION OF DIRECTORS
The Board of Directors of the Company has adopted resolutions proposing
an amendment to Article SEVENTH of the Company's Certificate of Incorporation
under which the Board of Directors will be divided into three classes, as
provided under Section 141 of the General Corporation Law of Delaware (the
"GCL"). Initially Class III directors (Terrence S. Cassidy and Thomas R.
DiBenedetto) would be elected for a three-year term, Class II directors
(Michael J. Specchio and Michael A. McManus, Jr.) would be elected for a
two-year term, and the Class I director (Louis B. Lloyd) would be elected for
a one-year term; thereafter, successors to directors whose terms expire will
be elected for three-year terms.
Section 141 of the GCL allows a corporation to amend its Certificate of
Incorporation and By-Laws to provide for the election of directors to
staggered terms. Under this statute, the board may be divided into one, two
or three classes of directors who may then be elected to initial terms of
one, two and three-year terms if there are three classes. Thereafter, and at
each annual election held after such classification and election, directors
shall be chosen for a full term, as the case may be, to succeed those whose
terms expire. The Company's Board of Directors has proposed an amendment to
its Certificate of Incorporation under which there would be three classes of
directors who would be initially elected to one, two and three-year terms,
respectively, and thereafter to three-year terms. The Board of Directors has
designated which of its current members are to be assigned to each of the
three classes of directors, if the amendment is approved. If the number of
directors is changed in the future, any increase or decrease must be
apportioned among the classes so the number of directors in each class is as
nearly equal as possible. Any additional director of any class elected to
fill a vacancy resulting from an increase in the number of directors shall
hold office for a term that shall coincide with the remaining term of that
class. In no event may a decrease in the number of directors shorten the
terms of any incumbent director. Each elected or appointed director shall
hold office until the annual meeting for the year in which such director's
term expires and until such director's successor shall be elected and
qualified.
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The Company believes that the proposed amendment to establish staggered
terms for the election of directors will provide additional continuity to its
management by having persons serve on its Board of Directors for a longer period
of time, without standing for reelection. The Board believes that the longer
time required to elect the majority of the Board will help to assure the
continuity and stability of the Company's management and policies in the future,
since a majority of the directors at any given time will have prior experience
as directors of the Company. Although the Company has had no difficulty in the
past in maintaining continuity, the Board considers it advisable to provide the
additional assurance of continuity that is afforded by the classification of
directors. The Board of Directors may in the future expand the number of
positions on the Board as it identifies qualified persons who are willing to
serve as directors of the Company although it has no current plans to do so.
The Company believes that three-year terms for its directors will be more
attractive to a potential director candidate and thus will make available to the
Company more candidates.
In addition, the Company believes that if a potential acquiror were to
purchase a significant or controlling interest in the Company, such potential
acquiror's ability to remove the Company's directors and obtain control of the
Board and thereby remove the Company's management would severely curtail the
Company's ability to negotiate effectively with such potential acquiror. The
threat of obtaining control of the Board would deprive the Board of the time and
information necessary to evaluate the proposal, to study alternative proposals
and to help ensure that the best price is obtained in any transaction involving
the Company which may ultimately be undertaken. A staggered board is designed to
reduce the vulnerability of the Company to an unsolicited takeover proposal,
particularly a proposal that does not contemplate the acquisition of all of the
Company's outstanding shares, or an unsolicited proposal for the restructuring
or sale of all or part of the Company.
While the Company believes the proposed amendment to its Certificate of
Incorporation is warranted because of the factors discussed above, the
amendments will also make it more difficult to change control of the Company.
If there were an attempt by the stockholders to change control of the Company
by removing and replacing all or a majority of the Board of Directors, it
will be more difficult if there are staggered terms for the election of
directors. Since not all directors will stand for election at a single
stockholders' meeting, as is the case now, the stockholders desiring to
change control would have to vote at multiple meetings in order to do so. It
would require at least two annual meetings to remove and replace a majority
of the directors of the Company, stockholders would have to vote at multiple
meetings in order to do so. It would require three annual meetings to remove
and replace the entire Board of Directors.
The proposed amendment to Article SEVENTH also provides in subsection 4
thereof for the removal of directors only for good cause shown. As more fully
explained in Proposal 2(b), this amendment is intended to prevent a majority of
stockholders from defeating the provisions of the staggered board by simply
amending the Certificate of Incorporation. This amendment is intended to
parallel the proposed amendment to the By-Laws set forth in Proposal 2(b), and
such discussion is incorporated herein by reference.
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STOCKHOLDER VOTE REQUIRED FOR PROPOSAL 1(A) AND BOARD RECOMMENDATION:
Approval of the amendment to the Certificate of Incorporation to provide
for a staggered board of directors requires the affirmative vote of the holders
of a majority of the shares of Common Stock issued and outstanding.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
AMENDMENT TO ARTICLE SEVENTH OF THE COMPANY'S CERTIFICATE OF INCORPORATION IN
THE FORM ATTACHED TO THIS PROXY STATEMENT AS APPENDIX I.
(b) AMENDMENT OF CERTIFICATE OF INCORPORATION TO BROADEN INDEMNITY OF DIRECTORS
AND OFFICERS
The Board of Directors has proposed an amendment to Article TENTH of the
Company's Certificate of Incorporation to make it easier to attract and retain
qualified persons to serve as directors of the Company by expanding the
indemnity already available to directors to eliminate the personal liability of
its directors to the fullest extent permitted by the GCL for monetary damages
resulting from the execution of the duties of such director. Although the
Company is not currently experiencing any problems retaining and attracting
qualified persons, the Company believes it is advisable to prevent such problems
before they arise.
The amendment would broaden the previously existing ability of the Company
to indemnify directors, officers, employees, and agents to the fullest extent
provided by Section 145 of the GCL. Section 145 of the GCL provides a detailed
statutory framework covering indemnification of directors, officers, employees
and agents against liabilities and expenses arising out of legal proceedings
brought against them by reason of their status or service. Since the amendment
is intended to clarify the rights of directors, officers, employees and agents
to the full benefit of Section 145, there are no substantial differences between
the amendment and Section 145. If the courts or the Delaware Legislature narrow
or expand the coverage of the Act, the effect of the amendment will likewise be
narrowed or expanded without further stockholder action. The Delaware GCL does
not permit liability to be eliminated (i) for any breach of a director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of law,
(iii) for unlawful payments of dividends or unlawful stock repurchases or
redemptions, as provided in Section 174 of the Delaware GCL or (iv) for any
transaction from which the director derived an improper personal benefit. In
addition, as permitted in Section 145 of the Delaware GCL, the Certificate of
Incorporation of the Company would provide that the Company shall indemnify its
directors, officers, employees and agents to the fullest extent permitted by the
Delaware GCL, including those circumstances in which indemnification would
otherwise be discretionary, subject to certain exceptions. The Certificate of
Incorporation would also provide that the Company may advance expenses to
directors, officers, employees and agents incurred in connection with an action
or proceeding as to which they may be entitled to indemnification, subject to
certain exceptions.
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The amendment affects indemnification of directors, officers, employees and
agents only for future conduct and does not limit liability for conduct which
predates the amendment. In addition, Article TENTH, both as it exists and is it
is proposed to be amended, has no effect on the liability of directors,
officers, employees and agents under federal securities laws. The Company is
not aware of any pending or threatened claims which would be covered by the
amendment. There has not been any recent litigation which would have been
affected by the amendment had it been in effect during such litigation. Courts
could rule, under various legal theories, that certain liabilities may not be
limited or eliminated by amending a Company's certificate of incorporation
pursuant to the GCL.
The Company believes that this amendment is in the best interests of the
stockholders as well as the Company. This amendment maintains the Company's
ability to attract and retain qualified individuals to serve as directors,
officers, employees and agents of the Company by assuring directors, officers,
employees and agents (and potential directors, officers, employees and agents)
that they will not bear expenses in the event their decisions are second-guessed
by a new Board of Directors or a court evaluating decisions with the benefit of
hindsight. This amendment, however, further limits the remedies available to a
stockholder dissatisfied with a board decision which is protected by Article
TENTH and by Article TENTH as amended. A disgruntled stockholder's only remedy
in such a circumstance is to sue to stop the completion of the Board's action.
In many situations this remedy may not be effective. Stockholders, for example,
may not be aware of a transaction or an event until it is too late to prevent
it. In these cases, the stockholders and the Company could be injured by a
Board decision and yet have no effective remedy. The Board of Directors
recognizes that there may be a conflict between their interests and those of the
stockholders who are not members of the Board of Directors or their affiliates.
The revised indemnification provided for in this amendment may result in
additional expenses to the Company which it would not otherwise incur. Although
the Company does not anticipate paying indemnification expenses, such expenses
could, in some instances, place a substantial financial burden on the Company
and could affect the returns on a stockholder's investment.
The Company believes that the diligence exercised by its directors,
officers, employees and agents stems primarily from their desire to act in the
best interests of the Company and not from a fear of monetary damage awards.
Consequently, the Board believes that the level of scrutiny and care exercised
by directors will not be lessened by the adoption of this amendment.
STOCKHOLDER VOTE REQUIRED FOR PROPOSAL 1(B) AND BOARD RECOMMENDATION:
Approval of the amendment to the Certificate of Incorporation to broaden
the indemnity of directors, officers, employees and agents requires the
affirmative vote of the holders of a majority of the shares of Common Stock
issued and outstanding.
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
AMENDMENT TO ARTICLE TENTH OF THE COMPANY'S CERTIFICATE OF INCORPORATION IN THE
FORM ATTACHED TO THIS PROXY STATEMENT AS APPENDIX I.
(c) AMENDMENT OF CERTIFICATE OF INCORPORATION TO PROVIDE CERTAIN CRITERIA TO BE
CONSIDERED BY THE BOARD OF DIRECTORS IN EVALUATING OFFERS
The Board of Directors has proposed an amendment of the Company's
Certificate of Incorporation to add a new Article TWELFTH to provide standards
by which the Board of Directors must evaluate offers to the Company from another
party to make a tender or exchange offer or to effect a business combination.
Proposed Article TWELFTH provides that the Company's Board of Directors,
when evaluating any offer to the Company from another party to (a) to make a
tender or exchange offer for any equity security of the Corporation or (b) to
effect a business combination, must give due consideration to all relevant
factors, including without limitation (i) the interests of the Corporation's
stockholders, (ii) whether the proposed transaction might violate federal or
state laws, (iii) not only the consideration being offered in the proposed
transaction, in relation to the then current market price for the outstanding
capital stock of this Corporation, but also to the market price for the capital
stock of the Corporation over a period of years, the estimated price that might
be achieved in a negotiated sale of the Corporation as a whole or in part or
through orderly liquidation, the premiums over market price for the securities
of other corporations in similar transactions, current political, economic and
other factors bearing on securities prices and the Corporation's financial
condition and future prospects, and (iv) the social, legal and economic effects
upon employees, suppliers, customers and others having similar relationships
with the Corporation, and the communities in which the Corporation conducts its
business.
This proposal, if approved, is intended to give comfort to the Company's
employees, customers and other constituencies that the Board of Directors would
consider their interest in deciding whether to recommend a tender or exchange
offer or to authorize a merger. The Board believes that this would have a
positive impact on the communities in which the Company and its subsidiaries
operate. This proposal also reflects the Board's concern that the value of the
Company at any one time may not be adequately reflected in the market price of
its stock. Therefore, this proposal would explicitly permit the Board of
Directors to compare the consideration to be offered in a proposed acquisition
of the Company with other measures of the Company's worth.
While the value of the consideration offered to the stockholders is a very
important factor when weighing the benefits of an acquisition or business
combination proposal, the Board of Directors believes it is also appropriate to
consider other relevant factors. For example, the proposed amendment directs
the Board to evaluate the consideration being offered in relation to both the
then-current value of the Company in a freely negotiated transaction and in
relation to the Board of Directors estimate of the future value of the Company
as an independent concern. A takeover bid often places the target
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<PAGE>
virtually in the position of making a forced sale, often at a time when the
market price of its stock may be temporarily depressed. In a friendly,
negotiated transaction, however, management would have the opportunity to seek a
suitable partner at a time of its choosing and to negotiate for the most
favorable price and terms which would reflect not only the current but also the
future value of the Company.
Under present Delaware law, absent a charter provision such as Proposal
1(c), the Board of Directors may be limited in its ability to consider any
interests other than the short-term maximization of value to the stockholders.
Other states have enacted corporation laws which allow the directors to consider
the interests of constituencies other than the stockholders, but Delaware has
yet to adopt a so-called constituency statute.
Adoption of Proposal 1(c) will strengthen the hand of the Board of
Directors in dealing with anyone attempting to take over the Company, but may
also discourage potential purchasers. The Board believes that the advantages of
being able to take the long-term and broad-constituency view will maximize
stockholder values in the long run.
STOCKHOLDER VOTE REQUIRED FOR PROPOSAL 1(C) AND BOARD RECOMMENDATION:
Approval of the amendment to the Certificate of Incorporation to provide
certain criteria to be considered by the Board of Directors in evaluating offers
requires the affirmative vote of the holders of a majority of the shares of
Common Stock issued and outstanding.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO ADD A NEW ARTICLE
TWELFTH IN THE FORM ATTACHED TO THIS PROXY STATEMENT AS APPENDIX I.
(d) AMENDMENT TO CERTIFICATE OF INCORPORATION TO REQUIRE ACTION BY STOCKHOLDERS
AT A SPECIAL OR ANNUAL MEETING
The Board of Directors has proposed an amendment of the Company's
Certificate of Incorporation to add a new Article ELEVENTH to prohibit
stockholder action by written consent in lieu of a meeting so long as the
Company has a class of stock registered under the Securities Exchange Act of
1934.
This provision of the Certificate of Incorporation would prohibit a
significant stockholder or group of stockholders from authorizing action which
is subject to stockholder approval under Delaware law without a meeting at which
all stockholders would be entitled to participate, even where such stockholders
hold shares of Common Stock sufficient to authorize the action. The Board
believes that this provision will curtail surreptitious takeover bids and give
the Company the opportunity to assess potential acquisitions, consider
alternatives and present its position to the stockholders at a general meeting.
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STOCKHOLDER VOTE REQUIRED FOR PROPOSAL 1(D) AND BOARD RECOMMENDATION:
Approval of the amendment to the Certificate of Incorporation to require
action by stockholders at a special or annual meeting requires the affirmative
vote of the holders of a majority of the shares of Common Stock issued and
outstanding.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO ADD A NEW ARTICLE
TWELFTH IN THE FORM ATTACHED TO THIS PROXY STATEMENT AS APPENDIX I.
(e) AMENDMENT TO CERTIFICATE OF INCORPORATION TO REQUIRE APPROVAL OF
AMENDMENT BY SUPERMAJORITY
The Board of Directors has proposed an amendment of the Company's
Certificate of Incorporation to add a new Article THIRTEENTH requiring that
Articles SEVENTH, NINTH, TENTH, ELEVENTH, TWELFTH and THIRTEENTH of the
Certificate of Incorporation may only be amended by the affirmative vote of at
least 75% of the total number of the then outstanding shares of capital stock of
the Company entitled to vote thereon.
The Board of Directors believes that requiring a supermajority for the
amendment of each of the described sections will further protect the Company
from unsolicited change of control attempts and are necessary to fulfil the
intent of the other amendments being acted upon at this annual meeting. For
example, the requirement of an increased stockholder vote for amendment of
the provisions contained in Proposal 1(a) is designed to prevent a
stockholder with a majority of the Company's stock from avoiding the
requirements of a staggered board by simply amending the Certificate of
Incorporation to delete all of these provisions. It thereby assists
management in retaining their present positions. A requirement for a
supermajority could also have the effect of giving the holders of a minority
of the total shares outstanding a veto power over a merger which management
or a majority of the stockholders may believe is desirable and beneficial.
Officers and directors of the Company own or control 1,097,140 shares of
common stock, or 32.9% of the total shares outstanding.
For further discussion of the advantages and disadvantages of Proposal
1(e), including possible "anti-takeover" effects and other potential adverse
consequences to the stockholders, see "Advantages and Disadvantages of
Classified Board Amendments."
STOCKHOLDER VOTE REQUIRED FOR PROPOSAL 1(E) AND BOARD RECOMMENDATION:
Approval of the amendment to the Certificate of Incorporation to require a
75% supermajority for certain amendments requires the affirmative vote of the
holders of a majority of the shares of Common Stock issued and outstanding.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO ADD A NEW ARTICLE
THIRTEENTH IN THE FORM ATTACHED TO THIS PROXY STATEMENT AS APPENDIX I.
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<PAGE>
PROPOSALS 2(A)-(B)
The Board of Directors of the Company has adopted resolutions proposing
amendments to the Company's By-Laws under which, among other things, the Board
of Directors will be divided into three classes, as provided under Section 141
of the GCL and providing for removal of directors only for cause. A copy of the
proposed amendments to the By-Laws are set forth in Appendix II attached hereto.
(a) AMENDMENT OF BY-LAWS TO PROVIDE FOR A STAGGERED BOARD OF DIRECTORS
The Board of Directors of the Company has adopted a resolution proposing an
amendment to Article II, Section 2.03 of the Company's By-Laws under which the
Board of Directors will be divided into three classes, as provided under Section
141 of the GCL.
Section 141 of the GCL allows a corporation to amend its By-Laws to provide
for the election of directors to staggered terms. The amendment to the By-Laws
is intended to parallel the proposed amendments to the Company's Certificate of
Incorporation described in Proposal 1(a) above and the discussion set forth
therein is incorporated herein by reference.
STOCKHOLDER VOTE REQUIRED FOR PROPOSAL 2(A) AND BOARD RECOMMENDATION:
Approval of the amendment to the By-Laws to provide for a staggered board
of directors requires the affirmative vote of the holders of a majority of the
shares of Common Stock issued and outstanding.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
AMENDMENT TO ARTICLE II, SECTION 2.03 OF THE COMPANY'S BY-LAWS IN THE FORM
ATTACHED TO THIS PROXY STATEMENT AS APPENDIX I.
(b) AMENDMENT OF BY-LAWS TO PROVIDE FOR REMOVAL OF DIRECTORS FOR CAUSE
The Board of Directors of the Company has adopted a resolution proposing an
amendment to the Article II, Section 2.12 of the Company's By-Laws providing for
the removal of any director or the entire Board of Directors only for good cause
shown by the holders of a majority of the shares then entitled to vote at an
election and only after a summary of the allegations and evidences claimed is
delivered to such director or directors at least sixty days prior to any such
meeting of stockholders.
Since these provisions will make the removal of directors more difficult,
it will increase the directors' security in their positions and, since the Board
has the power to retain and discharge management, could perpetuate incumbent
management. The notice requirement will ensure that no director will be removed
for cause in an "ambush" at a stockholders meeting. The Board believes this
amendment is necessary to fulfill the intent of
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the other amendments being acted on at this annual meeting. For example, it
would prevent stockholders with a majority of the Company's stock from avoiding
the change of control benefits of a staggered board by simply discharging the
existing board of directors and replacing them with their own representatives.
Under Delaware law, a director of a corporation with a staggered board of
directors may be removed only for cause, unless the Certificate of Incorporation
otherwise provides. Thus, assuming the stockholders approve Proposals 1(a) and
2(a), the Company will have a staggered board and stockholders will no longer be
able to remove directors without cause.
STOCKHOLDER VOTE REQUIRED FOR PROPOSAL 2(B) AND BOARD RECOMMENDATION:
Approval of the amendment to the By-Laws to provide for removal of
directors for cause requires the affirmative vote of the holders of a majority
of the shares of Common Stock issued and outstanding.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
AMENDMENT TO ARTICLE II, SECTION 2.12 OF THE COMPANY'S BY-LAWS IN THE FORM
ATTACHED TO THIS PROXY STATEMENT AS APPENDIX I.
ADVANTAGES AND DISADVANTAGES OF PROPOSED AMENDMENTS
The amendments set forth in Proposals 1 and 2 (collectively, the "Proposed
Amendments") have both advantages and disadvantages to stockholders. The
Proposed Amendments do not, and are not intended to, prevent a purchase of all
or a majority of the equity securities of the Company, whether pursuant to
open-market purchases, negotiated purchases from large stockholders or an
unsolicited bid for all or part of the securities of the Company. Rather, the
Board believes that the Proposed Amendments will discourage disruptive tactics
and encourage persons who may seek to acquire control of the Company to initiate
such an acquisition through negotiations with the Board. The Board believes
that it will therefore be in a better position to protect the interests of all
the stockholders. Furthermore, the stockholders of the Company will have a more
meaningful opportunity to evaluate any such action. Although the Proposed
Amendments are intended to encourage persons seeking to acquire control of the
Company to initiate such an acquisition through arm's length negotiations with
the Board, the overall effect of the Proposed Amendments may be to discourage a
third party from making a tender offer for a portion or all of the Company's
Common Stock, or otherwise attempting to obtain a substantial position in the
equity securities of the Company, by preventing such third party from
immediately removing and replacing the incumbent directors.
To the extent any potential acquirors are deterred by the Proposed
Amendments, the Proposed Amendments may have the effect of preserving the
incumbent management in office. The proposed amendments may also serve to
benefit incumbent management by making it more difficult to remove management
even when the only reason
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<PAGE>
for the proposed change of control of the stockholder action may be the
unsatisfactory performance of the present directors. In addition, since the
Proposed Amendments are in part designed to discourage accumulations of large
blocks of the Company's voting shares by purchasers whose objective is to have
such voting shares repurchased by the Company at a premium, their adoption could
tend to reduce the temporary fluctuations in the market price of such voting
shares that are caused by such accumulations. Accordingly, stockholders could
be deprived of certain opportunities to sell their shares at a temporarily
higher market price.
Takeovers or changes in the board of directors of a company that are
proposed and effected without prior consultation and negotiation with the
company are not necessarily detrimental to the company and its stockholders.
However, the Board feels that the benefits of seeking to protect the ability of
the Company to negotiate effectively, through directors who have previously been
elected by the stockholders as a whole and are familiar with the Company,
outweigh any disadvantage of discouraging such unsolicited proposals.
The Proposed Amendments are not in response to any specific efforts of
which the Company is aware to accumulate shares of Common Stock or obtain
control of the Company. The Board is recommending the adoption of the Proposed
Amendments in order to further continuity and stability in the leadership and
policies of the Company and to discourage certain types of tactics that could
involve actual or threatened changes of control that are not in the best
interests of the stockholders. Because of the time associated with obtaining
stockholder approval, the Company believes it is inadvisable to defer
consideration of the Proposed Amendments until a takeover threat is pending.
Once a specific threat exists, the time required to adopt the Proposed
Amendments may render their adoption impractical prior to the completion of the
takeover. Further, the absence of a specific threat permits stockholders to
consider the merits of the Proposed Amendments outside the pressured atmosphere
of a takeover threat. For these reasons, the Company believes it is prudent to
consider the Proposed Amendments at this time.
On February 26, 1997, the Company and its wholly-owned subsidiary, South
Florida Television, Inc. ("SFTV") entered into an Agreement and Plan of
Reorganization (the "Merger Agreement") with BellSouth Corporation ("BellSouth")
and its wholly-owned subsidiary, BellSouth South Florida Merger Subsidiary, Inc.
("BellSouth Sub"), pursuant to which BellSouth Sub will merge into SFTV, SFTV
will become a wholly-owned subsidiary of BellSouth and the Company will receive
an aggregate of $48 million (before expenses), consisting of $7.2 million in
cash and $40.8 million in BellSouth common stock (the "Merger"). The Merger
Agreement provides for usual conditions of closing and receipt of certain
approvals from the Federal Communications Commission. The Merger, which is
expected to close by mid-summer 1997, will be treated as a tax-free
reorganization, except as to the cash received. If the Merger is completed as
proposed, the Company will have in excess of $60 million in cash and BellSouth
securities; a full-service teleport and satellite uplink facility in Miami; a 50
percent interest in Electronic Data Submission Systems, Inc., a provider of
software which enables physicians to transmit electronically health care claims
to over 350 insurance companies; an investment in an educational video
programming distributor; a specialized communications trust company; and a
strategic alliance with Spike
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<PAGE>
Technologies, which has developed bidirectional point-to-multipoint microwave
antenna technology. In addition, the Company will no longer be subject to
capital requirements relating to the development of the wireless cable
television assets previously owned through SFTV, and the Company's assets
accordingly may be deemed to have increased liquidity.
Other than as disclosed herein, the Board does not currently contemplate
recommending the adoption of any further amendments to the Certificate or Bylaws
or any other action designed to affect the ability of third parties to take over
or change control of the Company.
EXISTING ANTI-TAKEOVER PROVISIONS OF THE CERTIFICATE OF INCORPORATION,
BYLAWS AND DELAWARE GCL
In addition to the measures described in Proposals 1 and 2 above, the
Company currently has in place protections which could have the effect of
curtailing or delaying an unsolicited change of control effort.
(A) ISSUANCE OF PREFERRED STOCK
The Company's Certificate of Incorporation currently allows the Board of
Directors to issue up to 1,000,000 shares of serial preferred stock, par value
$.01 per share ("Preferred Stock") and to fix the rights, privileges and
preferences of such shares without any further vote or action by the
stockholders. The rights of the holders of Common Stock will be subject to, and
may be adversely affected by, the rights of the holders of any Preferred Stock
that may be issued in the future. While the Company has no present intention to
issue shares of Preferred Stock, any such issuance could be used to discourage,
delay or make more difficult a change in control of the Company.
(B) STOCKHOLDERS RIGHTS PLAN
On December 12, 1996, at a meeting of the Board of Directors, the Company
adopted a Stockholders Rights Plan (the "Rights Plan") designed to ensure that
stockholders receive protection against the consequences of an unsolicited
proposal to acquire control of the Company that could prevent stockholders from
participating fully in the Company's existing value and in the creation of
additional value through its long-term strategy. To implement the Rights Plan,
the Board declared a dividend of one preferred share purchase right ("Right") to
acquire one share of Common Stock for each share of Common Stock outstanding on
December 24, 1996. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and Continental
Stock Transfer and Trust Company, as Rights Agent (the "Rights Agent"), dated as
of December 12, 1996.
Generally, under the Rights Plan, upon the occurrence of one of certain
specific events involving the accumulation of the Company's Common Stock,
stockholders of the Company would be entitled to exercise their Rights to
receive Company capital stock at a
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<PAGE>
substantial discount from the then prevailing market for equivalent securities.
Accordingly, the existence of the Rights changes the economics of an unsolicited
takeover attempt with the result that a prospective acquiror would be much more
likely to negotiate with the Company, resulting in a fair price to all
stockholders.
The stockholders of the Company are not required to approve the Rights Plan
under the Company's certificate of incorporation, by-laws or under the GCL, and
the Rights Plan has therefore not been submitted to the stockholders for
approval.
The Rights Plan was not adopted in response to any threatened or perceived
takeover threat and the Company has no knowledge of such a threat as of the date
of this Proxy Statement.
The foregoing description of the Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement (and the
exhibits thereto) filed with the Company's Current Report on Form 8-K dated
December 12, 1996 which is hereby incorporated herein by reference. A copy of
the Rights Agreement is available free of charge from the Company.
(C) SECTION 203 OF THE DELAWARE GCL
The Company is subject to Section 203 of the Delaware GCL. Section 203
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless (i) prior to such date, the board of directors of the
corporation approves either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder, (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owns at least 85% of the
outstanding voting stock (excluding certain shares held by persons who are both
directors and officers of the corporation and certain employee stock plans), or
(iii) on or after the consummation date, the business combination is approved by
the board of directors and by the affirmative vote of at least 66 2/3% of the
outstanding voting stock that is not owned by the interested stockholder. For
purposes of Section 203, a "business combination" includes, among other things,
a merger, asset sale or other transaction resulting in a financial benefit to
the interested stockholder, and an "interested stockholder" is generally a
person who, together with affiliates and associates, owns (or within three
years, owned) 15% or more of the corporation's voting stock.
Section 203 encourages any potential acquiror to negotiate with the
Company's Board of Directors. Section 203 also has the effect of limiting the
ability of a potential acquiror to make a two-tiered bid for the Company in
which all stockholders would not be treated equally. The application of Section
203 also confers upon the Board the power to reject a proposed business
combination in certain circumstances, even though a potential acquiror may be
offering a substantial premium for the Company's shares over the then current
market price. Section 203 also discourages certain potential acquirors
unwilling to comply with its provisions.
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A Delaware corporation may "opt out" of Section 203 with an express
provision in its original certificate of incorporation or an express provision
in its certificate of incorporation or bylaws resulting from a stockholder's
amendment approved by at least a majority of the outstanding voting shares. The
Company has not "opted out" of the provisions of Section 203, nor does the
Company currently contemplate recommending to the stockholders to approve an
amendment to the Certificate to provide for the "opting out" of Section 203.
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PROPOSAL 3
ELECTION OF DIRECTORS
Five directors are proposed to be elected at the Annual Meeting, each to
hold office for a period of one, two or three years as set forth below, or in
the event the proposed amendments to the Company's Certificate of Incorporation
and By-Laws authorizing a staggered Board of Directors is not approved, then for
a period of one year, and in any event until a successor has been elected and
qualified. It is intended that the accompanying proxy will be voted in favor of
the following persons to serve as directors, unless the stockholder indicates to
the contrary on the proxy. The Company expects that each of the nominees will
be available for election, but if any of them is not a candidate at the time the
election occurs, it is intended that such proxy will be voted for the election
of another nominee to be designated by the Board of Directors to fill any such
vacancy or the number of directors to be elected at this time may be reduced by
the Board of Directors.
Information concerning the current directors and executive officers of the
Company is set forth as follows:
Name Age Position
- - -------------------- ---------- ----------------------------------------
Terrence S. Cassidy 54 President, Chief Executive Officer
and Director
Michael J. Specchio 50 Chairman and Director
Paul J. Sinderbrand 43 Executive Vice President and
General Counsel
Timothy A. Mathews 34 Executive Vice President--Technology
Thomas R. DiBenedetto 47 Director
Louis B. Lloyd 54 Director
Michael A. McManus, Jr. 53 Director
NOMINEES FOR CLASS III DIRECTORS TO SERVE A THREE-YEAR TERM
TERRENCE S. CASSIDYDIRECTOR SINCE 1993 AGE: 54
PRESIDENT AND CHIEF EXECUTIVE OFFICER. Mr. Cassidy has been President,
Chief Executive Officer and a director of the Company since its incorporation in
August 1993. He has been an independent financial consultant since 1988. Prior
to 1988, he served as a Vice President and principal of Allen & Company
Incorporated, an investment banking firm, for 15 years with a concentration in
communications. Prior to 1973, he served as co-director of research at Shields &
Company, a brokerage firm. From 1992 to 1993, Mr. Cassidy acted as the financial
advisor to Gemini Equities, Inc. in its acquisition of Bell Atlantic Computer
Products, Inc., a wholly owned computer products subsidiary of the Bell-Atlantic
Corporation. In the fall of 1992, he participated as an advisor to and member
of the purchasing group in the acquisition of United Greenfield, Ltd., a
London-based international
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trading company with operations in Europe, the Middle East and Africa. Mr.
Cassidy was a director of Preferred Entertainment, Inc. ("Preferred
Entertainment"), an operator of a wireless cable system in Chicago, from August
1993 to January 1995. Mr. Cassidy is a director of Stock Company Absolute Bank,
a Republic of Georgia bank ("Absolute Bank").
THOMAS R. DIBENEDETTODIRECTOR SINCE 1993 AGE: 47
Mr. DiBenedetto has been a director of the Company since October 1993.
Since 1992, he has been President of Junction Investors, Ltd., an investment
banking firm based in Boston, Massachusetts. From 1989 until April 1993, he was
Chairman of Sioux Falls Cellular Communications, Inc. and, from 1989 to February
1993, Chairman of Oklahoma Cellular, Inc., both cellular telephone companies.
From 1982 to 1992, he was President of Boston International Group Securities
Corporation, a broker-dealer. He was a Vice President of Allen & Company
Incorporated, an investment banking firm, from 1976 to 1982. He has been, since
1985, a director of Alexanders, Inc., a retailing and real estate company which
emerged from bankruptcy in 1994 pursuant to a plan of reorganization which
provides for full payment to all creditors. He is also a director of Showscan
Corporation, a multi-media entertainment company, and Absolute Bank, a Republic
of Georgia bank.
NOMINEES FOR CLASS II DIRECTORS TO SERVE A TWO-YEAR TERM
MICHAEL J. SPECCHIODIRECTOR SINCE 1993 AGE: 50
CHAIRMAN. Mr. Specchio has been Chairman and a director of the Company
since September 1993. He has over 15 years of senior executive experience in the
hardwire cable, private cable and wireless cable industries. Since 1979, he has
developed, operated and sold, for himself and others, over 100 smaller
conventional cable systems and over 300 SMATV systems. Mr. Specchio, through
affiliated entities, purchased, leased or entered into joint ventures for
portfolios consisting of an aggregate of approximately 250 wireless cable
channels in major markets representing approximately 30% of the total U.S.
households, including Baltimore, Boston, Dallas, Fort Worth, Houston, Kansas
City, Pittsburgh, Minneapolis, Los Angeles and Chicago. The majority of these
frequency agreements were held by People's Choice TV, a group of companies which
Mr. Specchio founded and for which he served as Chief Executive Officer from
1985 through 1991. In 1986, he built and operated the nation's first fully
addressable multichannel wireless system in Milwaukee, Wisconsin, eventually
selling the 7,000 subscriber system to Warner Communications. In addition, Mr.
Specchio supervised the development and launch of wireless systems in Sacramento
and Tucson. He was active in the founding of the Wireless Cable Association and
currently serves as a member of its Board of Directors. For more than the last
five years, Mr. Specchio served as Chief Executive Officer of various of the
predecessors of Preferred Entertainment, all engaged in the development of
private wireless cable businesses. From 1992 until May 1994, Mr. Specchio was
Chairman of Preferred Entertainment and, from August 1993 to January 1995, a
director of Preferred Entertainment.
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<PAGE>
MICHAEL A. MCMANUS, JR.DIRECTOR SINCE 1994 AGE: 53
Mr. McManus has been a director of the Company since October 1994. He has
been President and Chief Executive Officer of New York Bancorp Inc. ("NYBI")
since 1991 and a director of NYBI since 1990. He has also been a director of
Home Federal Savings Bank, NYBI's subsidiary since 1991 and Vice Chairman since
October 1991. He is also a director of RGB Computer Video Systems, Document
Imaging System Corp. and Arrhythmia Research Technology, Inc. He has served in
numerous government capacities, including Assistant to the President of the
United States from 1982 to 1985 and as Special Assistant to the Secretary of
Commerce during the Ford Administration.
NOMINEE FOR CLASS I DIRECTOR TO SERVE A ONE-YEAR TERM
LOUIS B. LLOYD DIRECTOR SINCE 1993 AGE: 54
Mr. Lloyd has been a director of the Company since October 1993. Since
December 1994 he has been Vice Chairman of Absolute Bank, a Republic of Georgia
bank. Since April 1996, he has been President of Belfinance Securities, Inc., a
broker dealer. He was President and Chief Executive Officer of Republic New
York Securities Corporation, a brokerage firm subsidiary of Republic New York
Corporation, from 1991 to 1994. For more than five years prior to joining
Republic, Mr. Lloyd was a Senior Executive Vice President of Shearson Lehman
Brothers in its Worldwide Institutional Equity Trading and Sales Departments.
He is Chairman of Southhampton Enterprises, an apparel company.
STOCKHOLDER VOTE REQUIRED FOR PROPOSAL 3 AND BOARD RECOMMENDATION:
The election of each of the foregoing nominees for director requires the
affirmative vote of the holders of a plurality of the votes of the shares of
Common Stock present in person or represented by proxy at the meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE
FOREGOING NOMINEES.
EXECUTIVE OFFICERS OF THE COMPANY
The current Executive Officers of the Company are set forth below,
excluding Messrs. Cassidy and Specchio whose biographies are included above.
PAUL J. SINDERBRAND AGE: 43
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL. Mr. Sinderbrand has been
Executive Vice President and General Counsel of the Company since September
1993. He is a partner of Wilkinson, Barker, Knauer & Quinn, a Washington, D.C.
law firm, where he
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concentrates on communications law and represents a variety of wireless
communications providers. Mr. Sinderbrand was a partner at Sinderbrand &
Alexander, a Washington, D.C. law firm from 1993 to 1995 and a partner at Keck,
Mahin & Cate until 1993, where, in each case, he concentrated on communications
law. During his 16 years as a practicing attorney he has participated in major
regulatory proceedings involving wireless cable television and drafted many
regulations which now govern the industry, including the proposal pursuant to
which the FCC established wireless cable television.
TIMOTHY A. MATHEWS AGE: 34
EXECUTIVE VICE PRESIDENT - TECHNOLOGY. Mr. Mathews has served as the
Company's Executive Vice President - Technology since September 1995. For more
than seven years prior to that time, he has served in a variety of managerial
capacities for other pay television companies, including in construction,
technical, supervisory, contractor, marketing and installation capacities. From
August 1993 to August 1994, he was Vice President of Operations of Preferred
Entertainment. From 1981 to 1993, he served in several capacities in Specchio
Developers, Ltd., an affiliate of Michael J. Specchio, an officer and director
of the Company, primarily operating as a hands-on supervisor. Mr. Mathews
directed many of the Specchio Developers projects, including the addition of
eight frequencies in Chicago and the retrofit of 120 private cable head-end
systems. From 1980 to 1986, he assisted various entities affiliated with Mr.
Specchio in the development and operation of over 100 conventional cable
television systems throughout Florida, Illinois, Indiana, Iowa and Minnesota,
and he was instrumental in the development of the first addressable wireless
system in the nation, with installation of over 7,000 subscribers in Milwaukee,
Wisconsin.
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's officers and directors to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission
("SEC") and each exchange in which its securities are traded. Officers and
directors are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms they file. Based solely on a review of the copies of
such forms furnished to the Company, all requisite filings were made in 1996.
BOARD OF DIRECTORS AND COMMITTEES
AUDIT COMMITTEE
The members of this Committee are Messrs. DiBenedetto and Lloyd. The
Committee had one meeting in 1997 to review the 1996 audit. The Audit
Committee's
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function is to evaluate the adequacy of the Company's internal accounting
controls, review the scope of the audit by Coopers & Lybrand L.L.P. and related
matters pertaining to the examination of the financial statements, review the
nature and extent of any non-audit services provided by the Company's
independent accountants and make recommendations to the Board of Directors with
respect to the foregoing matters as well as with respect to the appointment of
the Company's independent accountants.
OPTION COMMITTEE
The members of this Committee are Messrs. Cassidy and Specchio. The Option
Committee had no meetings during 1996. The Option Committee administers the
Company's 1993 Stock Option Plan. The Option Committee is generally empowered
to interpret the 1993 Stock Option Plan, to prescribe rules and regulations
relating thereto, to determine the terms of the option agreements, to amend them
with the consent of the optionee, to determine the employees to whom options are
to be granted, and to determine the number of shares subject to each option and
the exercise price thereof.
REMUNERATION OF DIRECTORS AND RELATED MATTERS
Each member of the Board of Directors, other than any employee-director
(Messrs. Cassidy and Specchio are the only such employee-directors), receives a
quarterly fee of $1,800.
MEETINGS AND ATTENDANCE
During fiscal year ended October 31, 1996, there were two meetings of the
Board of Directors, and all directors attended each meeting.
The two standing Committees of the Board of Directors are the Audit
Committee and the Option Committee. Information with respect to the Audit
Committee and the Option Committee is set forth above.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Paul Sinderbrand, Executive Vice President and General Counsel of the
Company, is a partner of Wilkinson, Barker, Knauer & Quinn, special counsel to
the Company on matters related to communications law. Mr. Sinderbrand owns
80,000 shares of Common Stock of the Company.
All current transactions between the Company, and its officers, directors
and principal stockholders or any affiliates thereof are, and in the future such
transactions will be, on terms no less favorable to the Company than could be
obtained from unaffiliated third-parties.
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EXECUTIVE COMPENSATION
The following table sets forth information as to compensation paid by the
Company and its subsidiaries for the fiscal years ended October 31, 1994, 1995
and 1996 to each of the directors and executive officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
---------------------------
Name and Principal Position Year Salary($) Bonus All Other Compensation ($)
- - --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Terrence S. Cassidy, President and 1994 225,500 --- ---
Chief Executive Officer 1995 220,000 --- ---
1996 220,000 --- ---
- - --------------------------------------------------------------------------------------------------------------------
Michael J. Specchio, Chairman 1994 71,750 --- ---
1995 135,000 50,000 ---
1996 180,000 --- ---
- - --------------------------------------------------------------------------------------------------------------------
Paul J. Sinderbrand, Executive Vice
President and General Counsel 1994 35,000 --- ---
1995 20,000 --- ---
1996 60,000(1) --- ---
- - --------------------------------------------------------------------------------------------------------------------
Timothy Mathews, Executive Vice
President - Technology 1994 15,000 --- ---
1995 120,000 45,833 ---
1996 120,000 --- ---
</TABLE>
(1) The Company paid Wilkinson, Barker, Knauer & Quinn, of which
Mr. Sinderbrand is a partner, approximately $63,202 for services rendered to the
Company in fiscal 1996 and paid Sinderbrand & Alexander, of which Mr.
Sinderbrand was a partner until December 1995, approximately $3,803 for services
rendered in fiscal 1996.
1993 STOCK OPTION PLAN
On September 28, 1993, the Company adopted the Company's 1993 Stock Option
Plan (the "1993 Stock Option Plan"), which the Company believes is desirable to
attract and retain consultants, directors, executives and key employees. Under
the 1993 Stock Option Plan, as amended on June 19, 1995, options to purchase an
aggregate of not more than 160,000 shares of Common Stock may be granted from
time to time to key employees, officers, directors, advisors and independent
consultants to the Company or to any of its subsidiaries. Options granted to
employees may be designated as incentive stock options ("ISOs") or non-qualified
stock options ("NQSOs"). Options granted to directors, independent consultants
and other non-employees may only be designated NQSOs. Options to purchase an
aggregate of
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50,000 shares have been granted to an employee and 30,000 shares have been
granted to non-employee directors of the Company under the 1993 Stock Option
Plan. See Note 11 to the Financial Statements.
The 1993 Stock Option Plan is currently administered by a committee
consisting of directors Michael J. Specchio and Terrence S. Cassidy. The
committee is generally empowered to interpret the 1993 Stock Option Plan, to
prescribe rules and regulations relating thereto, to determine the terms of the
option agreements, to amend them with the consent of the optionee, to determine
the employees to whom options are to be granted, and to determine the number of
shares subject to each option and the exercise price thereof. The per share
exercise price of options granted under the 1993 Stock Option Plan will be not
less than 100% of the fair market value per share of Common Stock on the date
the options are granted (110% of such fair market value if the grantee owns more
than 10% of the combined voting power of all classes of the Company's stock),
provided that for the two years immediately following the consummation of the
initial public offering in March 1994, the option price shall not be less than
the greater of the fair market value on the grant date or the initial public
offering price established by the initial public offering, unless approved by
the shareholders.
Options will be exercisable for a term that will not be greater than ten
years from the date of grant (five years from the date of grant of an ISO if the
optionee owns more than 10% of the Common Stock of the Company). Options may be
exercised only while the original grantee has a relationship with the Company
which confers eligibility to be granted options or within three months after the
termination of such relationship with the Company, or up to one year after
death, retirement or permanent disability. In the event of the termination of
such relationship between the original grantee and the Company for cause (as
defined in the 1993 Stock Option Plan), all options granted to that original
grantee terminate immediately. ISOs and NQSOs under the 1993 Stock Option Plan
are not transferable other than by will or the laws of descent and distribution.
Options may be exercised during the grantee's lifetime only by the grantee, his
or her guardian or legal representative.
Options granted pursuant to the 1993 Stock Option Plan which are ISOs will
enjoy the attendant tax benefits provided under Sections 421 and 422 of the
Internal Revenue Code of 1986, as amended. Accordingly, the 1993 Plan provides
that the aggregate fair market value (determined at the time an ISO is granted)
of the Common Stock subject to ISOs exercisable for the first time by an
employee during any calendar year (under all plans of the Company and its
subsidiaries) may not exceed $100,000.
The Board may modify, suspend or terminate the 1993 Stock Option Plan,
provided, however, that certain material modifications affecting the 1993 Stock
Option Plan must be approved by the stockholders, and any change in the 1993
Stock Option Plan that may adversely affect a grantee's rights under an option
previously granted under the 1993 Stock Option Plan requires the consent of the
grantee.
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<PAGE>
EMPLOYMENT CONTRACTS AND OTHER ARRANGEMENTS WITH EXECUTIVE OFFICERS
Pursuant to an employment agreement, dated September 27, 1993,
Terrence S. Cassidy is employed full-time at an annual salary of $220,000. On
December 12, 1996, the Company entered into a Severance Benefit Agreement with
Mr. Cassidy. The agreement extends the term of his employment to September
2001, and provides that in the event of a change in control of the Company, Mr.
Cassidy may in certain circumstances terminate his employment and receive
severance benefit pay equal to three times such executive's annual compensation,
including certain bonuses, if any.
Pursuant to a consulting agreement dated February 28, 1997 and
expiring in September 2001, between the Company and Michael J. Specchio, Inc.
("MJS Inc."), a corporation which is affiliated with and employs Michael J.
Specchio, MJS Inc. is obliged to provide consulting services to the Company,
including substantially full-time services to be rendered by Mr. Specchio for an
annual fee of $180,000. The agreement, which terminates in the event of the
death or incapacity of Mr. Specchio, also provides that in the event of a change
in control of the Company, MJS Inc. may in certain circumstances terminate the
consulting agreement and receive severance benefit pay equal to three times the
annual compensation under the consulting agreement, including certain bonuses,
if any. Prior to February 18, 1997, Mr. Specchio was employed full-time by the
Company as an individual on substantially the same terms as provided in the
consulting agreement.
Paul J. Sinderbrand has entered into a five year Consulting and
Employment Agreement, under which he has been providing part-time consulting
services to the Company at a rate of $5,000 per month since April 1, 1994. The
agreement further provides that he may maintain his current law practice subject
to his obligations to the Company.
Timothy Mathews has entered into a three year employment agreement,
dated September 15, 1994, with the Company at an annual salary of $120,000. The
agreement further provided for a $50,000 loan by the Company to Mr. Mathews
evidenced by a one-year demand note which was forgiven by the Company on
September 15, 1995 in accordance with its terms.
Pursuant to these agreements, each of Messrs. Cassidy, Specchio,
Sinderbrand and Mathews have agreed not to compete with the Company during the
term of this agreement and for a period of one year thereafter, and the Company
has agreed to indemnify each of them against expenses incurred in any proceeding
arising out of their employment to the maximum extent provided by law.
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<PAGE>
REPORT OF BOARD OF DIRECTORS REGARDING COMPENSATION
The principal goal of the Company's compensation program is to help
the Company attract, motivate and retain the executive talent required to
develop and achieve the Company's strategic and operating goals with a view to
maximizing stockholder value. The key elements of this program and the
objectives of each element are as follows:
BASE SALARY:
- Establish base salaries that are competitive with those payable to
executives holding comparable positions at similar-sized wireless
cable companies.
- Provide periodic base salary increases as appropriate, consistent with
the Company's overall operating and financial performance, with a view
to rewarding successful individual performance and keeping pace with
competitive practices.
LONG-TERM INCENTIVE:
- Facilitate the alignment of executives' interests with those of the
Company's shareholders by providing opportunities for meaningful stock
ownership.
Executive officers are eligible to receive option grants, cash bonuses
and increases in salary based upon the performance of the Company and their
individual progress during the preceding year. Such grants, if any, are
determined by the Board of Directors from time to time during each fiscal year
with the input and recommendation of the Company's Chief Executive Officer.
Although the Board does not have an established policy for measuring performance
and establishing salary, bonuses and option grants, the Board is influenced by
the Company's financial performance and the contributions made by individual
executives to that performance. The Board of Directors believes that such a
retrospective analysis is most appropriate and practicable for a
development-stage wireless cable enterprise like the Company, which operates in
an uncertain environment and without the same sorts of standard measures of
performance as are available to more seasoned companies. In addition, options
may be granted to attract new executives or directors. The Company does not
consider the amount and terms of options and stock already held by executive
officers in its deliberations to determine awards.
The Chief Executive Officer's and the Chairman's base salaries are
determined according to the same principles described above as applicable to
compensation of the Company's other executive officers. The Chief Executive
Officer and the Chairman each have a great deal of experience in building
emerging companies, and the Board views their leadership as a critical factor in
the successes the Company has achieved to date and as very important to
realization of the Company's near-term goals.
Terrence S. Cassidy
Michael J. Specchio
Thomas R. DiBenedetto
Louis B. Lloyd
Michael A. McManus, Jr.
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<PAGE>
SUMMARY OF ACTIONS TAKEN
At least once a year, and at more frequent periodic intervals when
deemed necessary in individual cases, the Board of Directors reviews the
performance of the Company's executive officers. The Board of Directors, other
than Messrs. Cassidy and Specchio, also reviews the performance of Messrs.
Cassidy and Specchio at least once a year. On December 12, 1996, the Board of
Directors authorized the execution of Severance Benefit Agreements with Messrs.
Cassidy and Specchio providing for the extension of the terms of their
respective employment agreements to September 2001, and providing that in the
event of a change in control of the Company, each of them may in certain
circumstances terminate his employment and receive severance benefit pay equal
to three times his annual compensation, including certain bonuses. While the
Board believes that cash bonuses or an increase in the Chief Executive Officer's
and Chairman's salary would be justified under ordinary circumstances, the Chief
Executive Officer and the Chairman have been willing to forego immediate
increases in his cash compensation in order to assist the Company to conserve
its cash resources. In February 1997, Mr. Specchio's employment agreement, as
amended by his Severance Benefit Agreement, was replaced by the consulting
agreement with MJS Inc. described above.
BOARD OF DIRECTORS INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors consists of Messrs. Cassidy, Specchio,
DiBenedetto, Lloyd and McManus, of which Messrs. Cassidy and Specchio are
employees of the Company. Messrs. DiBenedetto, Lloyd and McManus participated
in deliberations of the Company's Board of Directors concerning executive
officer compensation. There are no interlocks between the Company and other
entities involving the Company's executive officers and Board members who serve
as executive officers or Board members of such other entities, except that
Messrs. Cassidy, DiBenedetto and Lloyd are directors of Absolute Bank, of which
Mr. Lloyd is Vice Chairman.
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<PAGE>
PERFORMANCE GRAPH
The following graph provides a comparison of the Company's cumulative
total stockholder return on its Common Stock since the Company's initial public
offering in March 1994, with (a) the Nasdaq Market Index, which is being used as
the required broad entity market index, (b), the total return on a selected peer
group index ("Old Peer Group") used by the Company in previous years consisting
of Cablemaxx Inc., Peoples Choice TV Corp., CAI Wireless Systems Inc., American
Telecasting Inc. and Wireless Cable of Atlanta Inc. and (c) the total return on
a selected peer group within Industry Group 462, the "Cable and Television
Systems" category for which data is compiled by Media General Financial
Services, Inc. ("New Peer Group").* Such stockholder return is the sum of the
dividends paid and the change in the market price of stock. The following graph
assumes $100 invested on March 9, 1994 in the Company's Common Stock, NASDAQ
Composite Index, the Old Peer Group and the New Peer Group. No cash dividends
have been declared on the Company's Common Stock. Although the graph would
normally cover a five-year period, the Company's Common Stock has been publicly
traded only since March 9, 1994, so the graph commences as of such date. The
comparisons in the graph are required by the Commission and are not intended to
forecast or be indicative of possible future performance of the Company's Common
Stock.
COMPARISON OF CUMULATIVE TOTAL RETURN OF
COMPANY, INDUSTRY INDEX AND BROAD MARKET
FISCAL YEAR ENDING
COMPANY 1994 1994 1995 1996
National Wireless Holdings Inc. 100.00 62.00 108.00 118.00
New Peer Group 100.00 93.83 99.99 73.69
Old Peer Group 100.00 60.59 59.51 36.62
Broad Market 100.00 101.09 119.91 140.82
*The current composition of Industry Group 462-Cable and Television Systems is
as follows:
ADELPHIA COMMUNICATIONS (ADLA)
AMERICAN TELECASTING INC. (ATEL)
ASCENT ENTERTAINMENT GROUP INC. (GOAL)
BELL CABLEMEDIA PLC ADR (BCMPY)
BRITISH SKY BROADCASTING GROUP (BSY)
CABLEVISIONS SYSTEMS CL A (CVC)
CAI WIRELESS SYSTEMS INC. (LAWS)
CELLULARVISION USA INC. (CVUS)
CENTURY COMMUNICATIONS LP CL A (CTYA)
COMCAST SPECIAL STOCK CL A (CMSK)
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<PAGE>
COMCAST UK CABLE PARTNERS LTD. (CMCAF)
COX COMMUNICATIONS INC. (COX)
CROWN CASINO CORP. (DICE)
DATA BROADCASTING CORP. (DECC)
GENERAL CABLE PLC ADR (GCABY)
HEARTLAND WIRELESS COMMUNICATIONS INC. (HART)
JONES INTERCABLE INC. A (JOINA)
JONES INTERCABLE INVESTORS (JTV)
MATAV-CABLE SYSTEMS MEDIA LTD. (MATVY)
NATIONAL WIRELESS HOLDINGS INC. (NWIR)
NETWORK EVENT THEATER INC. (NETS)
NTN CANADA INC. (NTNC)
ON COMMAND CORPORATION (ONCO)
PEOPLES CHOICE TV CORP. (PCTV)
SOURCE MEDIA INC. (SRCM)
SPECTRA INC. (SSA)
SPICE ENTERTAINMENT COS. INC. (SPZE)
TCA CABLE TV INC. (TCAT)
TEL-COM WIRELESS CABLE TV CP (TCTV)
TELE-COMM INT
TELE-COMM SER A LIBERTY MUTUAL GRP (LBTYA)
TV FILME INC. (PYTV)
UNITED VIDEO SATELLITE INC. (UVSGA)
VIACOM INC. NON-VOT B
VIDEOTRON HLDG PLC (VRONY)
WIRELESS CABLE OF ATLANTA INC. (WCAI)
WIRELESS ONE INC. (WIRL)
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<PAGE>
PROPOSAL 4
RATIFICATION OF THE COMPANY'S SELECTION
OF ITS AUDITORS
The Board of Directors recommends to the stockholders that they ratify
the selection of Coopers & Lybrand L.L.P., independent auditors, to audit the
accounts of the Company for fiscal year 1997. If the stockholders do not ratify
this selection, the Board of Directors will reconsider its selection of Coopers
& Lybrand L.L.P. and may appoint new auditors upon recommendation of the Audit
Committee.
A representative of Coopers & Lybrand L.L.P. will be present at the
Annual Meeting and will have the opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL NO. 4.
OTHER MATTERS
Management does not know of any business to be transacted at the
meeting other than as indicated herein. However, certain stockholders may
present topics for discussion from the floor. Should any such matter properly
come before the meeting for a vote, the persons designated as proxies will vote
thereon in accordance with their best judgment.
You are urged to sign, date and return the enclosed proxy in the
prepaid envelope provided for such purpose. It is hoped that registered
stockholders will give us advance notice of their plans by marking the box
provided on the proxy card.
If you will need special assistance at the Annual Meeting because of a
disability or if you require directions to the Meeting, please contact James
Kardon, the Secretary of the Company at (212) 736-1000.
DEADLINE FOR SUBMITTING PROPOSALS FOR NEXT YEAR'S MEETING.
Stockholders who intend to present proposals in connection with the Company's
1997 Annual Meeting of Stockholders must submit their proposals to the Corporate
Secretary of the Company on or before October 31, 1997.
New York, New York
March 31, 1997
James Kardon
SECRETARY
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<PAGE>
APPENDIX I
PROPOSED
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
NATIONAL WIRELESS HOLDINGS INC.
National Wireless Holdings Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY:
ONE: That the Board of Directors of said corporation, by the unanimous
vote of its members on December 12, 1996, adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of Incorporation
of said corporation:
"RESOLVED, that the Certificate of Incorporation of the
Corporation is hereby amended by striking out Articles SEVENTH and
TENTH thereof and by substituting in lieu of said Articles the
following new Articles SEVENTH and TENTH, respectively:
SEVENTH: For the management of the business and for the conduct of
the affairs of the Corporation, and in further definition, limitation, and
the regulation of the powers of the Corporation and of its directors and of
its stockholders or any class thereof, as the case may be, it is further
provided:
1. NUMBER OF DIRECTORS. The management of the business and the
conduct of the affairs of the Corporation shall be vested in its Board of
Directors. The number of directors which shall constitute the whole Board
of Directors shall be fixed by, or in the manner provided in, the By-Laws.
The phrase "whole Board" and the phrase "total number of directors" shall
be deemed to have the same meaning, to wit, the total number of directors
which the Corporation would have if there were no vacancies. No election
of directors need be by written ballot.
2. TERMS OF DIRECTORS. Except as otherwise provided in or fixed by
or pursuant to the provisions of Article FOURTH hereof relating to the
rights of the holders of any class or series of stock having a preference
over the Common Stock as to dividends or upon liquidation or to elect
directors under specified circumstances, the directors shall be classified,
with respect to the time for which they severally hold office, into three
classes, as nearly equal in number as possible, as shall be provided in the
manner specified in the By-Laws of the Corporation. One class shall be
originally elected for a term expiring at the annual meeting of
stockholders to be held in 1998, another class shall be originally elected
for a term expiring at the annual meeting of stockholders to be held in
1999, and another class shall be originally elected for a term expiring at
the annual meeting of stockholders to be held in 2000, with each member of
each class to hold office
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<PAGE>
until a successor is elected and qualified. At each annual meeting of
stockholders of the Corporation and except as otherwise provided in or
fixed by or pursuant to the provisions of Article FOURTH hereof
relating to the rights of the holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon
liquidation to elect directors under specified circumstances, the
successors of the class of directors whose term expires at that
meeting shall be elected to hold office for a term of three years.
3. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Except as otherwise
required by law and except as otherwise provided in or fixed by or pursuant
to the provisions of Article FOURTH hereof relating to the rights of the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect directors under
specified circumstances: (i) newly created directorships resulting from
any increase in the number of directors and any vacancies on the Board of
Directors resulting from death, resignation, disqualification, removal or
other cause shall be filled by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the
Board of Directors; (ii) any director elected in accordance with the
preceding clause (i) shall hold office for the remainder of the full term
of the class of directors in which the new directorship was created or the
vacancy occurred and until such director's successor shall have been
elected and qualified; and (iii) no decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
4. REMOVAL. Except as otherwise provided in or fixed by or pursuant
to the provisions of Article FOURTH hereof relating to the rights of the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation to elect directors under
specified circumstances, any director may be removed from office only for
cause by the affirmative vote of the holders of at least a majority of the
combined voting power of the then outstanding shares of the Corporation's
stock entitled to vote generally, voting together as a single class.
Whenever in this Article SEVENTH hereof, the phrase, "the then outstanding
shares of the Corporation's stock entitled to vote generally" is used, such
phrase shall mean each then outstanding share of any class or series of the
Corporation's stock that is entitled to vote generally in the election of
the Corporation's directors.
5. AMENDMENT OR REPEAL OF THIS ARTICLE. Notwithstanding any other
provisions of this Article SEVENTH or any other Article hereof or of the
By-Laws of the Corporation (and notwithstanding the fact that a lesser
percentage may be specified from time to time by law, this Article SEVENTH,
any other Article hereof, or the By-Laws of the Corporation), the
provisions of this Article SEVENTH may not be altered, amended or repealed
in any respect, nor may any provision inconsistent therewith be adopted,
unless such alteration, amendment, repeal or adoption is approved by the
affirmative vote of at least 75% of the combined voting power of the then
outstanding shares of the Corporation's capital stock entitled to vote
generally, voting together as a single class.
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<PAGE>
6. AMENDMENT OF BYLAWS. After the original or other By-Laws of the
Corporation have been adopted, amended, or repealed, as the case may be, in
accordance with the provisions of Section 109 of the General Corporation
Law of the State of Delaware, and, after the Corporation has received any
payment for any of its stock, the power to adopt, amend, or repeal the
By-Laws of the Corporation may be exercised by the Board of Directors of
the Corporation, unless otherwise provided in the By-Laws.
7. VOTING POWER. Whenever the Corporation shall be authorized to
issue only one class of stock, each outstanding share shall entitle the
holder thereof to notice of, and the right to vote at, any meeting of
stockholders. Whenever the Corporation shall be authorized to issue more
than one class of stock, no outstanding share of any class of stock which
is denied voting power under the provisions of the Certificate of
Incorporation shall entitle the holder thereof to the right to vote at any
meeting of stockholders except as the provisions of paragraph (2) of
subsection (b) of Section 242 of the General Corporation Law of the State
of Delaware shall otherwise require; provided, that no share of any such
class which is otherwise denied voting power shall entitle the holder
thereof to vote upon the increase or decrease in the number of authorized
shares of said class.
8. BALLOTS. Elections of directors need not be by written ballot
unless the By-Laws of the Corporation shall so provide.
"TENTH: The Corporation shall, to the fullest extent permitted by the
provisions of Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify, and upon
request advance expenses to, any and all persons who is or was a party or
is threatened to be made a party to any threatened, pending or completed
action, suit, proceeding or claim, whether civil, criminal, administrative
or investigative, by reason of the fact that such person is or was or has
agreed to be a director or officer of this Corporation or while a director
or officer is or was serving at the request of this Corporation as a
director, officer, partner, trustee, employee or agent of any corporation,
partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, from and against any and all of the
expenses, liabilities, or other matters referred to in or covered by said
section (including without limitation attorneys fees and expenses);
PROVIDED, HOWEVER, that the foregoing shall not require this Corporation to
indemnify or advance expenses to any person in connection with any action,
suit, proceeding, claim or counterclaim initiated by or on behalf of such
person other than solely to enforce rights under this ARTICLE TENTH. The
indemnification provided for herein shall not be deemed exclusive of any
other rights to which those indemnified may be entitled under any By-Law,
agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who
has ceased to be a director, officer, employee, or agent and shall inure to
the benefit of the heirs, executors, and administrators of such a person.
Any person seeking indemnification under this Article TENTH shall be deemed
to have met the standard of conduct required for such indemnification
unless the contrary shall be established by a court of competent
jurisdiction. Any repeal or modification of the
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<PAGE>
foregoing provisions of this Article TENTH shall not adversely affect
any right or protection of a director or officer of the Corporation
with respect to any acts or omissions of such director or officer
occurring prior to such repeal or modification.
; and further
"RESOLVED, that the Certificate of Incorporation is hereby further
amended by adding the following new Articles ELEVENTH, TWELFTH, THIRTEENTH
and FOURTEENTH:
ELEVENTH: If at any time the Corporation shall have a class of stock
registered pursuant to the provisions of the Securities Exchange Act of
1934, for so long as such class is so registered, any action by the
stockholders of such class must be taken at an annual or special meeting of
stockholders and may not be taken by written consent.
TWELFTH: The Board of Directors of the Corporation, when evaluating
any offer of another party (a) to make a tender or exchange offer for any
equity security of the Corporation or (b) to effect a business combination,
shall, in connection with the exercise of its judgment in determining what
is in the best interests of the Corporation as a whole, be authorized to
give due consideration to any such factors as the Board of Directors
determines to be relevant, including, without limitation:
a. the interests of the Corporation's stockholders;
b. whether the proposed transaction might violate federal or
state laws;
c. not only the consideration being offered in the proposed
transaction, in relation to the then current market price
for the outstanding capital stock of this Corporation, but
also to the market price for the capital stock of the
Corporation over a period of years, the estimated price that
might be achieved in a negotiated sale of the Corporation as
a whole or in part or through orderly liquidation, the
premiums over market price for the securities of other
corporations in similar transactions, current political,
economic and other factors bearing on securities prices and
the Corporation's financial condition and future prospects;
and
d. the social, legal and economic effects upon employees,
suppliers, customers and others having similar relationships
with the Corporation, and the communities in which the
Corporation conducts its business.
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<PAGE>
In connection with any such evaluation, the Board of Directors is
authorized to conduct such investigations and engage in such legal
proceedings as the Board of Directors may determine.
THIRTEENTH: Notwithstanding any other provisions of this Certificate
of Incorporation or the Bylaws (and notwithstanding the fact that a lesser
percentage may be specified by law, this Certificate of Incorporation or
the Bylaws of this Corporation), the affirmative vote of 75% of the total
number of votes of the then outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to amend or repeal, or to
adopt any provision inconsistent with the purpose or intent of ARTICLES
SEVENTH, NINTH, TENTH, ELEVENTH, TWELFTH and this ARTICLE THIRTEENTH.
Notice of any such proposed amendment, repeal or adoption, shall be
contained in the notice of the meeting at which it is to be considered.
Subject to the provisions set forth herein, this Corporation reserves the
right to amend, alter, repeal or rescind any provision contained in this
Certificate of Incorporation in the manner now or hereafter prescribed by
law.
FOURTEENTH: From time to time any of the provisions of this
Certificate of Incorporation may be amended, altered, or repealed, and the
provisions authorized by the laws of the State of Delaware at the time in
force may be added or inserted in the manner and at the time prescribed by
said laws, and all rights at any time conferred upon the stockholders of
the Corporation by this Certificate of Incorporation are granted subject to
the provisions of this Article FOURTEENTH."
TWO: That this Certificate of Amendment was duly adopted in accordance
with Section 242 of the General Corporation Law of the State of Delaware.
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<PAGE>
APPENDIX II
NATIONAL WIRELESS HOLDINGS INC.
PROPOSED AMENDMENT TO BY-LAWS
Article II, Sections 2.03 and 2.12 of the Company's By-Laws (the "By-Laws") is
proposed to be amended to read as follows:
ARTICLE II
1. Article II Section 2.03 of the By-Laws, is hereby amended in its
entirety to read as follows:
"2.03. ELECTION AND TERM OF DIRECTORS. The Directors shall be
appointed initially by the incorporator. All members of the Board of
Directors shall be classified, with respect to the time for which they each
hold office, into three classes, as nearly equal in number as possible, as
determined by the incorporator or incorporators. One class shall originally
be elected for an initial one year term expiring at the annual meeting of
stockholders to be held in 1998, another class shall be originally elected
for an initial two year term expiring at the annual meeting of stockholders
to be held in 1999, and another class shall be originally elected for an
initial three year term expiring at the annual meeting of stockholders to
be held in 2000, with each member of each class to hold office until a
successor is elected and qualified or until his earlier resignation or
removal. Thereafter, at each annual meeting of stockholders, the
successors of the class of directors whose term expires at that meeting
shall be elected to hold office for a three year term until their
successors are elected and qualified or until their earlier resignation or
removal. If the annual meeting for the election of Directors is not held
on the date designated therefor, the Directors shall cause the meeting to
be held as soon thereafter as convenient. At each meeting of the
stockholders for the election of Directors, provided a quorum is present,
the Directors shall be elected by a plurality of the votes validly cast in
such election.
Any director may resign at any time upon written notice to the
corporation. Except as the General Corporation Law of the State of Delaware
(the "General Corporation Law") may otherwise require, in the interim
between annual meetings of stockholders or of special meetings of
stockholders called for the election of directors and/or for the removal of
one or more directors and for the filling of any vacancy in that
connection, newly created directorships and any vacancies in the Board of
Directors, including unfilled vacancies resulting from the removal of
directors for cause, shall be filled by the vote of a majority of the
remaining directors then in office, although less than a quorum, or by the
sole remaining directors. In the event of a newly created directorship, any
director elected in accordance with the preceding clause shall hold office
for the remainder of the full term of the class of directors having the
longest remaining term at the time of the election and until such
director's successor shall have been elected and
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qualified. In the event of a vacancy, any director elected in
accordance with the preceding clause shall hold office for the
remainder of the full term of the class of directors in which the
vacancy occurred and until such director's successor shall have been
elected and qualified. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any
incumbent director.
Except as otherwise provided in or fixed by or pursuant to the
corporation's Certificate of Incorporation, nominations for the election of
directors may be made by the Board of Directors or by any stockholder
entitled to vote in the election of directors generally. However, such
stockholders may nominate one or more persons for election as director or
directors at a stockholders' meeting only if written notice of intent to
make such nomination or nominations has been given either by personal
delivery or by mail to the Secretary of the Corporation not less than 30
days before the meeting of stockholders at which such election is held.
Each such notice shall state (a) the name and address of the stockholder
who intends to make the nomination and of the person or persons to be
nominated; (b) a representation that the stockholder is a holder of record
of stock of the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to nominate the person or
persons specified in the notice; (c) a description of all arrangements or
understandings between the stockholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the nominee proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had
the nominee been nominated, or intended to be nominated, by the Board of
Directors; and (e) the consent of each nominee to serve as a director of
the corporation if so elected. The chairman of the meeting may refuse to
acknowledge the nomination of any person not made in compliance with the
foregoing procedure."
2. Article II Section 2.12 of the By-Laws is hereby amended in its
entirety to read as follows:
"2.12. REMOVAL OF DIRECTORS. Except as may otherwise be provided by
the General Corporation Law, any director or the entire Board of Directors
shall be removed only for good cause shown, by the holders of a majority of
the shares then entitled to vote at an election of directors, voting
together as a single class, but only if notice of such proposal was
contained in the notice of such meeting. Any vacancy in the board of
directors resulting from any such removal shall be filled only by vote of a
majority of the directors then in office, although less than a quorum, and
any director or directors so chosen shall hold office until the next
election of the class for which such directors shall have been chosen and
until their successors shall be elected and qualified or until their
earlier death, resignation or removal. Except where a right to receive
compensation shall be expressly provided in a duly authorized written
agreement with the Corporation, no director removed shall have any right to
any compensation as such director for any period following his resignation
or removal, or any right to damages on account of such removal, whether his
compensation be by the month or by the year or otherwise; unless the body
acting on the removal shall in its discretion provide for compensation.
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At least sixty days prior to any meeting of stockholders at which
removal for cause shall be considered, each director whose removal is at
issue shall have received a summary of the allegations and evidence
claimed, all in such detail as reasonably calculated to inform the director
in preparing any defense. If a removal for cause is moved without such
notice, the chairman of the stockholders meeting shall determine whether
that issue shall be held over to a date when such notice shall have been
timely received."
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