<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
SKYSAT COMMUNICATIONS NETWORK CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
SKYSAT COMMUNICATIONS NETWORK CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
DECEMBER 30, 1996
TO THE STOCKHOLDERS OF SKYSAT COMMUNICATIONS NETWORK CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Skysat
Communications Network Corporation, a Delaware Corporation (the "Company"), will
be held at the offices of Richard A. Eisner & Company, LLP, located at 575
Madison Avenue, 8th Floor, New York City, New York 10022, on December 30, 1996
at 10:00 a.m., local time, for the following purposes:
1. To consider and vote upon the election of five directors;
2. To ratify the appointment of Richard A. Eisner & Company, LLP as the
independent auditors of the Company;
3. To approve an amendment to the Company's 1994 Stock Option Plan;
4. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
The close of business on December 6, 1996 has been fixed as the record date
for the determination of stockholders entitled to notice of, and to vote at, the
meeting. A complete list of those stockholders will be open to examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours at the executive offices of the Company, 405 Lexington Avenue,
33rd Floor, New York, New York 10174, for a period of 10 days prior to the
meeting. The stock transfer books of the Company will not be closed.
All stockholders are cordially invited to attend the meeting. WHETHER OR NOT
YOU EXPECT TO ATTEND, YOU ARE KINDLY REQUESTED BY THE BOARD OF DIRECTORS TO
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY. Stockholders who execute
proxies retain the right to revoke them at any time prior to the voting thereof.
A return envelope which requires no postage if mailed in the United States is
enclosed for your convenience.
By the order of the Board of
Directors,
Eddy W. Friedfeld
Secretary
New York, New York
December 10, 1996
<PAGE>
SKYSAT COMMUNICATIONS NETWORK CORPORATION
THE CHRYSLER BUILDING
405 LEXINGTON AVENUE
NEW YORK, NEW YORK 10174
(212) 972-0070
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Skysat Communications Network Corporation
for the Annual Meeting of Stockholders to be held at the offices of Richard A.
Eisner & Company, LLP, located at 575 Madison Avenue, 8th Floor, New York, New
York 10022 on December 30, 1996 at 10:00 a.m., local time, and for any
adjournment or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. Any stockholder given
such a proxy has the power to revoke it at any time before it is voted. Written
notice of such revocation should be forwarded directly to the Secretary of the
Company, at the above address. Any proxy may also be revoked by the
stockholder's attendance at the meeting and voting in person.
If the enclosed proxy is executed and returned, the shares represented
thereby will be voted in accordance with the directions thereon and otherwise in
accordance with the judgment of the persons designated as proxies. Any proxy on
which no direction is specified will be voted in favor of the following actions
described in this proxy statement: For the election of the nominees set forth
under the caption "Election of Directors," or for the ratification of the
appointment of Richard A. Eisner & Company, LLP as the independent auditors of
the Company and to amend the Company's 1994 Stock Option Plan. Abstentions and
broker non-votes will have the same effect as a vote against each of such
proposals.
The approximate date on which the Company intends to mail or otherwise
deliver this proxy statement and the accompanying form of proxy to the Company's
stockholders is December 10, 1996.
Your vote is important. Accordingly, you are urged to sign and return the
accompanying proxy card whether or not you plan to attend the meeting. If you do
attend, you may vote by ballot at the meeting, thereby canceling any proxy
previously given.
VOTING
Only holders of shares of the Company's Class B Common Stock, $.001 par
value per share (the "Class B Common Stock"), and Class A Common Stock, $.001
par value per share (the "Class A Common Stock") (the shares of Class A Common
Stock and Class B Common Stock are sometimes collectively referred to herein as
the "Shares") of record as at the close of business on December 6, 1996, are
entitled to vote at the meeting. On the record date there were issued and
outstanding 989,929 shares of Class B Common Stock and 2,107,321 shares of Class
A Common Stock. Each outstanding share of Class B Common Stock and Class A
Common Stock is entitled to five votes and one vote, respectively, upon all
matters to be acted upon at the meeting. A majority in interest of the
outstanding Shares represented at the meeting in person or by proxy shall
constitute a quorum. Assuming a quorum is present, the affirmative vote of a
plurality of the votes cast is necessary to elect the nominees as directors. The
affirmative vote of a majority of the votes cast is necessary to ratify the
appointment of Richard A. Eisner & Company, LLP as the independent auditors of
the Company and to amend the Company's 1994 Stock Option Plan. Class B Common
Stockholders, consisting of 25 holders, possess approximately 70% of the total
voting power of the Shares and, as such, will be able to control the vote on
each matter to be acted upon at the meeting. On December 6, 1996, the executive
officers and directors of the Company as a group beneficially owned 601,750
shares of Class B Common Stock, representing 60.79% of such then outstanding
shares and 42.64% of the total voting power of all Shares. See "Principal
Stockholders."
<PAGE>
The Stockholders vote at the meeting by casting ballots (in person or by
proxy) which are tabulated by a person appointed by the Board of Directors
before the meeting to serve as the inspector of election at the meeting and who
has executed and verified an oath of office.
ELECTION OF DIRECTORS
At the meeting, five directors will be elected by the stockholders to serve
until the next Annual Meeting of Stockholders or until their successors are
elected and shall qualify. Each of the nominees is currently a director of the
Company. Management recommends that the persons named below be elected as
directors, unless the proxy contains contrary instructions. The Company has no
reason to believe that any of the nominees will not be a candidate or will be
unable to serve. However, in the event that any of the nominees should become
unable or unwilling to serve as a director, the persons named in the proxy have
advised that they will vote for the election of such person or persons as shall
be designated by management.
The following sets forth the names and ages of the five nominees for
election to the Board of Directors, their respective principal occupations or
employments during the past five years and the period during which each has
served as a director of the Company.
Martin D. Fife, 69
Martin D. Fife has served as Chairman of the Board of Directors and Chief
Executive Officer of the Company since its inception and was appointed President
and Chief Operating Officer in March 1996 and Chief Financial Officer in July
1996. Mr. Fife is also a principal stockholder of the Company. Since September
1988, Mr. Fife has also served as a director of Projectavision, Inc., a public
company that developed and patented a depixilization system for use in all
large-screen rear and front view projection televisions. In 1987, Mr. Fife
founded and currently serves as Chairman of the Board of Magar Inc., a private
investment company specializing in the development of early stage companies and
management and consulting services. From 1986 to January 1989, Mr. Fife was
President of Agremp Holdings Incorporated, an operator of storage elevators. In
1960, Mr. Fife founded and until 1986 served as President of Fife Associates,
Inc. and a number of affiliated companies, including Galaxy Universal, Ltd.,
which was engaged in the sale of chemicals and synthetic plastics. In addition,
since August 1995, Mr. Fife has been a director of Asta Funding, Inc., a company
engaged in the business of purchasing and servicing retail installment sales
contracts originated by automobile dealers. Mr. Fife is the Chief Financial
Officer of Alliance Partners, Inc., a New York and Charlotte, North
Carolina-based firm that focuses on financing international oil and power
production projects. Since January 1974, Mr. Fife has served as a director or
trustee of 13 investment funds advised by The Dreyfus Corporation.
General Buster Glosson, 54
General Buster Glosson (Ret.) has been a director and Vice Chairman of the
Board of the Company since August 1996. He has been President of Eagle, Ltd., a
venture capital and consulting firm, since September 1994. He served as an
officer in the United States Air Force from January 1965 until he retired in
September 1994. From June 1992 to September 1994, he was Deputy Chief of Staff
for Plans and Operations. From May 1991 to May 1992, he was Legislative Liaison
and director of the Air Force Issues Team. From August 1990 to May 1991, he
commanded the Air Division and was Director of Campaign Plans for United States
Central Command Air Forces, Riyadh, Saudi Arabia. General Glosson is also the
Chairman and CEO of Alliance Partners, Inc.
2
<PAGE>
Walter J. Burmeister, 57
Walter J. Burmeister has served as a director of the Company since February
1994 and as a consultant to the Company since January 1993. Since May 1995, Mr.
Burmeister has been the President of FCI Facilicom International, LLC. From
April 1992 through May 1995, Mr. Burmeister served as the Chairman of the
Telecommunications Marketing Group, Inc. Mr. Burmeister has 30 years of
experience in the telecommunications industry, encompassing general management,
international business development, sales, information systems, network
operations, network planning and general engineering. From July 1990 to March
1992, Mr. Burmeister was Vice President for business development for Bell
Atlantic in Latin America, the Middle East and Africa where he supervised the
group responsible for worldwide sales of software and consulting services. Prior
to that, Mr. Burmeister headed the Bell of Pennsylvania sales organization,
supervised information systems operations for Bell Atlantic Corporation
telephone operating companies and headed the C&P Telephone operations staff.
From 1982 to June 1983, Mr. Burmeister worked at American Telephone & Telegraph
Corporation General Departments and Bell Communications Research (the successor
to Bell Labs for the Regional Bell Operating Companies) in distribution services
planning and in network planning.
Coy Eklund, 80
Coy Eklund has served as a director of the Company since February 1994.
Since August 1987, Mr. Eklund has served as the Chairman and Chief Executive
Officer of Trivest Financial Services, a company engaged in the television
business. From 1938 to April 1983, Mr. Eklund served in various capacities at
the Equitable Life Assurance Society and from April 1975 to April 1983 was its
Chief Executive Officer. Mr. Eklund currently serves as a Consulting Director to
the Equitable Life Assurance Society. Mr. Eklund is also a director of American
Communications & Television, Inc. and Life Medical Sciences, Inc., a public
company engaged in the research and development of technologies for use in
medical applications.
Burton I. Edelson, 69
Burton I. Edelson has served as a director of the Company since June 1994.
Since December 1990, Dr. Edelson has been a Research Professor and Director of
the Institute for Applied Space Research at George Washington University. He is
currently a trustee of the United States Naval Academy Foundation, a trustee of
the University Space Research Association, and a member of the Board of Advisors
of Esprit Telecom, Ltd. From August 1987 to August 1993, Dr. Edelson was a
Fellow of the Johns Hopkins Foreign Policy Institute. From 1982 to 1987, Dr.
Edelson was the Associate Administrator for the Space Science and Applications
of NASA. From 1968 to 1982, Dr. Edelson held executive positions at the
Communications Satellite Corporation. From 1947 to 1967, Dr. Edelson served as a
naval officer including several research and engineering positions.
GENERAL INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors of the Company met three times during the fiscal year
ended December 31, 1995. The Delaware General Corporation Law provides that the
Board of Directors, by resolution adopted by a majority of the entire board, may
designate one or more committees, each of which shall consist of one or more
directors. The Board of Directors annually elects from its members the Executive
Committee, Audit Committee, and a Compensation and Stock Option Committee. The
Company does not have a Nominating Committee.
EXECUTIVE COMMITTEE. The Executive Committee exercises all the powers and
authority of the Board of Directors in the management and affairs of the Company
between meetings of the Board of Directors, to the extent permitted by law. The
Executive Committee is comprised of two directors, Martin D. Fife, and Buster
Glosson. The Executive Committee did not meet during fiscal 1995.
3
<PAGE>
AUDIT COMMITTEE. The Audit Committee reviews the engagement of the
independent auditors and reviews the independence of the accounting firm. The
Audit Committee also reviews the audit and non-audit fees of the independent
auditors, the adequacy of the Company's internal control procedures and
financial reports to be filed with the Securities and Exchange Commission. The
Audit Committee is composed of two non-employee directors, Messrs. Edelson and
Eklund. The Audit Committee met once during Fiscal 1995.
COMPENSATION AND STOCK OPTION COMMITTEE. The Compensation and Stock Option
Committee reviews and recommends to the Board of Directors remuneration
arrangements and compensation plans for the Company's Executives. The
Compensation and Stock Option Committee also authorizes stock option grants,
administers the 1994 Stock Option Plan and proposes other stock option plans.
The Compensation and Stock Option Committee is composed of two non-employee
directors, Messrs. Edelson and Eklund. The Compensation and Stock Option
Committee met once during Fiscal 1995.
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------ --- -----------------------------------------------------------
<S> <C> <C>
Martin D. Fife...................... 69 Chairman of the Board of Directors, Chief Executive
Officer, President, Chief Operating Officer, and Chief
Financial Officer
Buster Glosson...................... 54 Vice Chairman
Anthony J. Asterita................. 56 Vice President--Program Development
Eddy W. Friedfeld................... 35 Vice President--Business Affairs, Assistant to the Chairman
and Secretary
</TABLE>
For the biographies of Messrs. Fife and Glosson, see "Election of Directors."
Anthony J. Asterita has served as Vice President, Program Development of the
Company since June 1993. From December 1989 until joining the Company, Mr.
Asterita was Director of Marketing and Sales and Director of Business
Development for Ball Aerospace. From 1979 to December 1989, Mr. Asterita was
Manager of Program Development for Litton Amecom. From 1970 to 1979, Mr.
Asterita was a Program Manager at Headquarters, United States Air Force,
Pentagon and the Aeronautical Systems Center, Air Force Systems Command. Mr.
Asterita holds a Bachelor of Science degree in aeronautical engineering from the
Air Force Institute of Technology and a Master of Science Degree in Systems
Management from University of Southern California.
Eddy W. Friedfeld has served as Vice President, Business Affairs, Assistant
to the Chairman and Secretary of the Company since January 1993. Since May 1987,
Mr. Friedfeld has been an attorney specializing in corporate and securities law.
Mr. Friedfeld holds a Juris Doctor degree from New York University and a
Bachelor of Arts degree from Columbia College.
4
<PAGE>
PRINCIPAL STOCKHOLDERS
The following tables sets forth information regarding the beneficial
ownership of the Company's common stock as of December 6, 1996 for (i) each of
the Company's directors, (ii) each of the Company's officers, (iii) all
directors and officers of the Company as a group and (iv) each person known by
the Company to own beneficially 5% or more of the outstanding shares of its
common stock. For purposes of this Proxy Statement, beneficial ownership is
defined in accordance with the rules of the Securities and Exchange Commission
and generally means the power to vote and/or dispose of securities regardless of
any economic interest therein.
<TABLE>
<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK PERCENTAGE OF
NAME AND ADDRESS OF CLASS OF BENEFICIALLY PERCENT TOTAL CLASS A PERCENT OF
BENEFICIAL OWNER OR COMMON OWNED OF AND CLASS B TOTAL VOTING
NUMBER IN GROUP STOCK (1)(2)(3)(4) CLASS(3) COMMON STOCK(3) POWER(3)
- --------------------------------------- --------- ----------------- ----------- ------------------- -------------
<S> <C> <C> <C> <C> <C>
Martin D. Fife(5)(6)................... Class B 494,750 49.98% 15.97% 35.05%
Class A 25,000 1.19% 0.81% 0.35%
Buster Glosson(6)...................... Class A 50,000 2.37% 1.61% 0.71%
Anthony A. Asterita(6)................. Class A 20,000 0.95% 0.65% 0.28%
Eddy W. Friedfeld(6)................... Class B 77,000 7.78% 2.49% 5.46%
Walter J. Burmeister(7)................ Class B 30,000 3.03% 0.97% 2.13%
Class A.. 30,000 1.42% 0.97% 0.43%
Coy Eklund(8).......................... Class A 20,000 0.95% 0.65% 0.28%
Palomar Technologies,Inc.(4)(9)........ Class A 500,000 23.73% 16.14% 7.09%
Burton I. Edelson(10).................. Class A 20,000 0.95% 0.65% 0.28%
Magar, Inc.(5)......................... Class B 494,750 49.98% 15.97% 35.05%
Herbert Moskowitz(5)................... Class B 494,750 49.98% 15.97% 35.05%
Irwin M. Rosenthal(5).................. Class B 494,750 49.98% 15.97% 35.05%
Malcolm Adler(11)...................... Class A 247,750 11.76% 8.00% 3.51%
All officer/directors as group Class B 601,750 60.79% 19.43% 42.64%
(7 persons).......................... Class A 165,000 7.83% 5.33% 2.34%
</TABLE>
- ------------------------
(1) All shares are beneficially owned and sole voting and investment power is
held by the persons named, except as otherwise noted. All shares owned are
Class B Common Shares except for the shares designated as Class A shares in
the above table.
(2) Messrs. Burmeister, Friedfeld and Magar, Inc. have agreed that
approximatedly 50% of his or its shares of Common Stock are subject to
transfer to the Company for no consideration upon the failure of certain
conditions to occur by certain dates. So long as such shares are subject to
such conditions, the holder may vote but not dispose of such shares.
(3) Based upon 2,107,321 shares of Class A Common Stock outstanding and 989,929
shares of Class B Common Stock outstanding and includes 105,000 options
currently exercisable by certain directors and officers. Class B Common
Stock is entitled to five votes per share but is otherwise substantially
identical to the Class A Common Stock, which has one vote per share. Each
share of Class B Common Stock is convertible into one share of Class A
Common Stock.
(4) Does not include an aggregate of 2,000,000 shares of Class A Common Stock
underlying warrants currently exercisable.
(5) Messrs. Fife, Moskowitz and Rosenthal are each officers, directors and
principal stockholders of Magar, Inc. and own approximately 34%, 33% and
26%, respectively, of the outstanding stock of such corporation. These
individuals may be considered to beneficially own, and to have shared
investment and voting power with respect to, all shares of Class B Common
Stock owned by Magar, Inc. Information relating to shares owned by each of
these individuals assumes that each beneficially owns
5
<PAGE>
all shares of Class B Common Stock owned of record by Magar, Inc. The
address of Messrs. Moskowitz and Rosenthal is 30 Rockefeller Plaza, 29th
floor, New York, NY 10112.
(6) The address of Messrs. Fife, Glosson, Friedfeld and Asterita is c/o Skysat
Communications Network Corporation, 405 Lexington Avenue, New York, NY
10174.
(7) The address of Mr. Burmeister is 6845 Wilson Lane, Bethesda, MD 20817.
(8) The address of Mr. Eklund is Equitable Life Assurance Society, 787 Seventh
Avenue, New York, NY 10019.
(9) The address of Palomar Medical Technologies, Inc. Is 66 Cherry Hill Drive,
Beverly, MA 01915.
(10) The address of Mr. Edelson is Department of Electrical Engineering and
Computer Science, The George Washington University, Washington, DC 20052.
(11) The address of Mr. Adler is 2603 Rockefeller Avenue, Pennsauken, NJ 08110.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the aggregate cash compensation (all of which
represented salary in a each year) paid by the Company for the past two fiscal
years to Martin D. Fife, its Chairman of the Board, Chief Executive Officer,
President, Chief Operating Officer, and Chief Financial Officer. No other
executive officer's annual compensation exceeded $100,000 for the fiscal years
ended December 31, 1995 and 1994.
ANNUAL COMPENSATION
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION($) OPTIONS/SARS(#)
- ---------------------------------------- --------- ---------- ----------- --------------------- -----------------
<S> <C> <C> <C> <C> <C>
Martin D. Fife.......................... 1995 $ 114,500 -- -- 25,000
Chairman of the Board, CEO,.............
President, Chief Operating Officer,
and Chief Financial Officer 1994 $ 89,308 -- -- --
<CAPTION>
ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION($)
- ---------------------------------------- ---------------------
<S> <C>
Martin D. Fife.......................... --
Chairman of the Board, CEO,.............
President, Chief Operating Officer,
and Chief Financial Officer --
</TABLE>
For the fiscal year ended December 31, 1995, the executive officers in the
aggregate were paid $245,134. No bonuses were granted in 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to options/SARs
granted during the last year to the named executive officers of the Company.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING % OF TOTAL OPTIONS EXERCISE OR EXPIRATION
NAME OPTIONS/SAR'S GRANTED GRANTED BASE PRICE($/SH) DATE
- ----------------------------- --------------------- --------------------- ----------------- ----------------------
<S> <C> <C> <C> <C>
Martin D. Fife............... 25,000 13.8 $ 1.00 November 28, 2001
</TABLE>
No options or SARs have been exercised.
6
<PAGE>
DIRECTOR COMPENSATION
Each of the Company's non-employee directors are paid $500 for each board
meeting. In April 1994, each outside director was also granted under the
Company's 1994 Stock Option Plan an option to purchase 20,000 shares of Class A
Common Stock at $6.00 per share. All directors will be reimbursed for ordinary
and necessary travel expenses incurred in attendance at each board or committee
meeting. During 1995, Messrs. Fife and Burmeister were granted options to
purchase 25,000 shares and 10,000, respectively, of Class A Common Stock at
$1.00 per share.
EMPLOYMENT AGREEMENTS
On April 11, 1994 the Company entered into employment agreements with Martin
D. Fife to serve as Chairman of the Board and Chief Executive Officer of the
Company, Anthony J. Asterita to serve as Vice President, Program Development of
the Company and Eddy W. Friedfeld to serve as Vice President, Business Affairs,
Assistant to the Chairman and as Secretary of the Company. Each agreement is for
a three year term terminating during April 1997, subject to automatic annual
renewal. Under the agreements, Messrs. Fife, Asterita and Friedfeld will receive
a yearly base salary of $120,000, $90,000 and $100,000, respectively, subject to
an annual cost of living increase.
The employment agreements with Messrs. Fife, Asterita and Friedfeld provide
that each such agreement may be terminated by the Company only if such executive
officer has materially breached his obligations under the agreement, engaged in
willful misconduct against the Company or is found guilty of a felony by a court
of competent jurisdiction which, in the discretion of the Board of Directors,
will interfere with the performance of such executive officer's duties and
responsibilities or will materially adversely affect the Company.
The agreements with each of Messrs. Fife, Asterita and Friedfeld contain
confidentiality and non-competition provisions.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Act of 1934 requires the Company's executive
officers, directors and persons who beneficially own more than 10% of the
Company's Common Stock to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission ("SEC"). Such
persons are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms filed by such persons. Each of the executive officers,
directors and beneficial owners of more than 10% of the Company's stock has
complied with the requirements of Section 16(a) during fiscal 1995.
CERTAIN TRANSACTIONS
Pursuant to a settlement agreement entered into in November 1996, Howard A.
Foote, a former officer, director, and greater than five percent stockholder of
the Company, returned 667,750 shares of Class B Common Stock of the Company,
which were deposited into the Company's treasury.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Management of the Company recommends a vote for ratification of Richard A.
Eisner & Company, LLP as the independent auditors of the Company.
Richard A. Eisner & Company, LLP has served as the Company's independent
auditors. The Company has requested that a representative of Richard A. Eisner &
Company, LLP attend the meeting. Such representative will have an opportunity to
make a statement, if he or she desires, and will be available to respond to
appropriate questions of stockholders.
7
<PAGE>
APPROVAL OF AMENDMENT TO THE COMPANY'S 1994 STOCK OPTION PLAN
The Company's 1994 Stock Option Plan (the "1994 Stock Option Plan") was
approved by the Directors and stockholders of the Company in March 1994. The
purpose of the Plan is to enable the Company to provide an incentive to certain
employees, agents, consultants, and directors of the Company to contribute to
the success of the Company. There are currently five employees, four
non-employee directors, and at least six consultants eligible to participate in
the 1994 Stock Option Plan.
The 1994 Stock Option Plan provided that the total number of shares of
Common Stock with respect to which options and stock appreciation rights may be
granted is 180,000. The Board of Directors has adopted an amendment to the 1994
Stock Option Plan, subject to approval of stockholders pursuant to Section 21 of
the Stock Option Plan, to increase the total number of shares to 1,180,000
shares (the "Amendment"). The Amendment will enable the 1994 Stock Option Plan
to continue to achieve its purpose as described in the immediately preceding
paragraph. To date, options for an aggregate of 179,040 shares have been granted
pursuant to the 1994 Stock Option Plan to various individuals, including Messrs.
Fife and Burmeister (see "Director Compensation" above).
The complete text of the 1994 Stock Option Plan has been filed by the
Company with the Securities and Exchange Commission as an Exhibit to the
Company's registration statement in connection with the Company's initial public
offering which was completed in June, 1994. This proposed Amendment will
increase the total number of shares from 180,000 to 1,180,000. The following
summary of the material features of the 1994 Stock Option Plan as proposed to be
amended by the Amendment does not purport to be complete and is qualified in its
entirety by reference to the complete text of the 1994 Stock Option Plan.
The 1994 Stock Option Plan may be administered by either the entire Board of
Directors or a committee (the "Committee") of two or more directors appointed by
the Board of Directors. Members of the Committee must be "disinterested" within
the meaning of Rule 16b-3 promulgated under the Securities and Exchange Act of
1934, as amended. The Board of Directors or Committee, as the case may be, is to
determine, among other things, the recipients of grants, whether a grant will
consist of incentive stock options ("ISO's"), non-qualified stock options or
SAR's (in tandem with an option or frees-standing) or a combination thereof, and
the number of shares to be subject to such options and SAR's. In the event of a
duly constituted Committee is not in existence at any time, the entire Board of
Directors is to administer the 1994 Stock Option Plan.
The 1994 Stock Option Plan provides for the granting of ISO's to purchase
Class A Common Stock at not less than the fair market value on the date of the
option grant and the granting of non-qualified options and SARs with an exercise
price not less than 85% of fair market value. SARs granted in tandem with an
option have the same exercise price as the related option. The 1994 Stock Option
Plan contains certain limitations applicable only to ISOs granted thereunder. To
the extent that the aggregate fair market value, as of the date of the grant, of
the shares to which the ISOs become exercisable for the first time by an
optionee during the calendar year exceeds $100,000, the option will be treated
as a non-qualified option. In addition, if any optionee owns more than 10% of
the total voting power of all classes of the Company's stock at the time the
individual is granted an ISO, the option price per share cannot be less than
110% of the fair market value of per share and the term of the ISO cannot exceed
five years. No option or SAR may be granted under the 1994 Stock Option Plan
after April 6, 2004 and no option or SAR may be outstanding for more than ten
years after its grant.
Upon the exercise of an option, the holder must make payment of the full
exercise price. Such payment may be made in cash, check or under certain
circumstances, in shares of any class of the Company's common stock, or any
combination thereof. The 1994 Stock Option Plan permits the Company to lend to
the holder of an option funds sufficient to pay the exercise price. SARs, which
give the holder the privilege of surrendering such rights for the appreciation
in the Class A Common Stock between the time of the grant and the surrender, may
be settled, in the discretion of the Board or Committee, as the case may be, in
cash, common stock, or in any combination thereof. The exercise of an SAR and
granted in
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tandem with an option cancels the option to which it relates with respect to the
same number of shares and as to which the SAR was exercised. The exercise of an
option cancels any related SAR with respect to the same number of shares as to
which the option was exercised. Generally, options and SARs may be exercised
while the recipient is performing services to the Company and within three
months after termination of such services.
The 1994 Stock Option Plan may be terminated at any time by the Board of
Directors, which may also amend the 1994 Stock Option Plan, except that without
stockholder approval it may not increase the number of shares subject to the
1994 Stock Option Plan or change the class of persons eligible to receive
options under the 1994 Stock Option Plan.
PLAN BENEFITS
The specific or future benefits or amounts to be received by executive
officers, employees and directors under the 1994 Stock Option Plan as proposed
to be amended by the Amendment are not determinable. Since the adoption of the
1994 Stock Option Plan, Messrs. Fife and Asterita received options for 25,000
shares and 10,000 shares, repspectively, at exercise prices of $1.00 per share
and $6.00 per share, respectively, and the non-executive director group received
options for an aggregate of 70,000 shares, at an exercise price of $6.00 per
share for 60,000 of such options and $1.00 per share for 10,000 of such options
(see "Executive Compensation- Director Compensation" and "Employment
Agreements"), and all employees, other than executive officers and the
non-executive director group, received options for an aggregate of 5,000 shares
under the 1994 Stock Option Plan, at an exercise price of $1.00 per share. No
SARs have been granted under the 1994 Stock Option Plan.
As of December 6, 1996, the Company's executive officers and directors had
the right to vote an aggregate of 165,000 shares of Class A Common Stock and
601,750 shares of Class B Common Stock, representing together 44.98% of the
total voting power of all such shares. Due to the benefits which may be received
by such persons in connection with the Amendment as described above, the
interests of the Company's executive officers and directors may be different
from the interests of other stockholders. Stockholders should consider such
persons' interest in the Amendment in connection with the Company's
recommendation to vote for the proposal to approve the Amendment.
FEDERAL INCOME TAX CONSEQUENCES
Neither the receipt nor the exercise of an ISO is a taxable event, and if
the optionee does not dispose of stock acquired under an ISO prior to the
expiration of the requisite holding periods, any gain resulting from the sale of
the stock is long term capital gain. In such case the Company is not entitled to
any tax deduction with respect to the grant and or the exercise of the option.
However, the amount by which the fair market value of the shares at the time of
exercise of the option exceeds the option price will constitute an item of tax
preference for purposes of the alternative minimum tax. The statutory holding
period is at least two years from the date the ISO is granted and one year from
the date the optionee receives his shares of Common Stock pursuant to the
exercise. If the stock is disposed of before the end of the statutory holding
period, the lesser of the difference between the exercise price and the fair
market value of the stock on the date of the exercise or the total amount of
gain realized on the sale must be reported by the optionee as ordinary income
and the Company is entitled to a tax deduction for that amount. The remaining
gain, if any, is taxed to the optionee as long or short term capital gain.
The receipt of a non-qualified stock option issued under the 1994 Stock
Option Plan will not result in any taxable income to the optionee or a tax
deduction to the Company at the time the option is granted. Generally, the
optionee will recognize ordinary income at the time the non-qualified stock
option is exercised in an amount equal to the excess of the fair market value on
the date of the exercise of the shares received over the exercise price, and the
Company will be entitled to a tax deduction of an equal amount in the year the
optionee recognizes such income. The optionee will have a tax basis for his
shares equal to
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their fair market value at the time the optionee recognizes ordinary income and
any additional gain or loss recognized by the optionee on disposition of the
shares will generally be a short or long term capital gain or loss and will not
result in any additional tax deduction to the Company.
The holder of an SAR will not realize any taxable income on the grant of
such right. The holder will realize ordinary income in the tax year in which
payment is realized in an amount equal to the amount of cash and/or the then
fair market value of the shares of Common Stock received upon exercise, and the
Company will normally be entitled to a tax deduction for an equal amount for the
same year.
FURTHER INFORMATION
To become effective, the Amendment requires the affirmative vote of a
majority of the votes cast by the Class A Common Stock and the Class B Common
Stock of the Company present, or represented, and entitled to vote at the
meeting, voting together.
The Board of Directors recommends that the Stockholders vote FOR the
proposal to approve the Amendment.
OTHER MATTERS
The Board of Directors is not aware of any matters not set forth herein that
may come before the meeting. If, however, further business properly comes before
the meeting, the persons named in proxies will vote the shares represented
thereby in accordance with their judgment.
STOCKHOLDERS PROPOSALS FOR THE 1997 ANNUAL MEETING
Stockholders may submit proposals on matters appropriate for stockholder
action at the Annual Meeting in accordance with regulations adopted by the
Securities and Exchange Commission. To be considered for inclusion in the proxy
statement and form of proxy relating to the 1997 Annual Meeting, such proposals
must be received by the Company no later than March 31, 1997. Proposals should
be directed to the attention of the Secretary of the Company.
ANNUAL REPORT ON FORM 10-KSB
The Company is furnishing without charge to each person whose proxy is being
solicited, a copy of the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1995, including the financial statements and schedules
thereto, but excluding exhibits. Requests for additional copies of such report
should be directed to the Company, Attention: Investor Relations.
By order of the Board of Directors,
Eddy W. Friedfeld
Secretary
New York, New York
December 10, 1996
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/X/PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
<TABLE>
<CAPTION>
<S>
<C>
FOR all nominees WITHOLD Authority
listed to right (Except as to vote for
marked to the contrary) nominees listed
1. Election NOMINEES: Martin D. Fife
of / / / / Buster Glosson
Directors Walter J. Burmeister
FOR, EXCEPT VOTES WITHHELD FROM THE FOLLOWING NOMINEES: Burton I. Edelson
Coy Eklund
___________________________________________________
FOR AGAINST ABSTAIN
2. To ratify the appointment of Richard A. / / / / / /
Eisner & Company, LLP to serve as the
Company's auditors for fiscal 1997.
3. To approve an amendment to the / / / / / /
Company's 1994 Stock Option Plan as
described in the accompanying Proxy
Statement.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE
UPON SUCH OTHER MATTERS WHICH MAY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED
AS DIRECTED. IF NO DIRECTION IS INDICATED, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE LISTED
NOMINEES AS DIRECTORS AND FOR PROPOSALS 2 AND 3.
PLEASE CHECK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING
OF STOCKHOLDERS AT 10:00 A.M. ON DECEMBER 30, 1996. / /
SIGNATURE_____________________ DATE___________ SIGNATURE ____________________________ DATE__________
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by
authorized person.
</TABLE>
<PAGE>
SKYSAT COMMUNICATIONS NETWORK CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 30, 1996
Revoking all prior proxies, the undersigned, a stockholder of Skysat
Communications Network Corporation (the "Company"), hereby appoints Martin
D. Fife and Buster Glosson, and each of them, attorneys and agents of the
undersigned, with full power of substitution, to vote all shares of the
Common Stock, par value $.001 per share ("Common Stock"), of the undersigned
of the Company at the Annual Meeting of Stockholders of the Company to be
held at the offices of Richard A. Eisner & Company, LLP, located at 575
Madison Avenue, 8th Floor, New York on December 30, 1996 at 10:00 a.m., local
time, and at any adjournment thereof, as fully and effectively as the
undersigned could do if personally present and voting, hereby approving,
ratifying and confirming all that said attorneys and agents or their
substitutes may lawfully do in place of the undersigned as indicated on the
reverse.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
