CYCOMM INTERNATIONAL INC.
1420 Springhill Road, Suite 420
McLean, VA 22102
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
TIME: 9:00 a.m. on Tuesday, June 27, 2000
PLACE: The Ritz Carlton, Tyson's Corner
1700 Tyson's Boulevard
McLean, VA 22102
ITEMS OF BUSINESS: (1) To elect four directors
(2) To approve the selection of our independent
auditors for 2000
(3) To transact other business properly coming before
the meeting
WHO CAN VOTE: You can vote if you were a stockholder of record on
May 17, 2000
DATE OF REPORT: This notice and the proxy statement are first being
mailed to stockholders on or about May 24, 2000
together with a copy of Cycomm's 1999 Annual Report on
Form 10-KSB.
By Order of the Board of Directors
Robert M. Hutton, Assistant Secretary
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To our Stockholders:
It is our pleasure to invite you to attend our 2000 Annual Meeting of
Stockholders, which will be held this year on Tuesday, June 27, 2000, at the
Ritz Carlton Hotel in McLean, Virginia. The meeting will start at 9:00 a.m.
local time.
On the ballot at this year's meeting are company proposals (1) for the election
of four directors, (2) to approve the selection of Ernst & Young LLP as Cycomm's
auditors for 2000. Additionally, you will vote on any matters properly brought
before the meeting. We also look forward to answering your questions at the
meeting in the manner discussed in the proxy statement.
Whether or not you plan to attend, you can be sure your shares are represented
at the meeting by promptly voting and submitting your proxy by signing and
returning the enclosed proxy card.
Thank you for your support.
Sincerely,
/s/ Albert I. Hawk
Albert I. Hawk
President and CEO
Chairman of the Board of Directors
2
ABOUT THE MEETING
WHAT AM I VOTING ON?
You will be voting on the following:
(1) To elect four directors
(2) To approve the selection of our independent auditors for 2000
WHO IS ENTITLED TO VOTE?
You may vote if you owned stock as of the close of business on May 17, 2000.
Each share of common stock is entitled to one vote. As of May 17, 2000, we had
[24,814,475] shares of common stock outstanding.
HOW DO I VOTE BEFORE THE MEETING?
You may vote before the meeting by completing, signing and returning the
enclosed proxy card.
CAN I VOTE AT THE MEETING?
You may vote your shares at the meeting if you attend in person. Even if you
plan to attend the meeting, we encourage you to vote your shares by proxy.
CAN I CHANGE MY MIND AFTER I VOTE?
You may change your vote at any time before the polls close at the meeting. You
may do this by signing another proxy with a later date and returning it to us
prior to the meeting or by voting in person at the meeting.
WHAT IF I RETURN MY PROXY CARD BUT DO NOT PROVIDE VOTING INSTRUCTIONS?
Proxies that are signed and returned but do not contain instructions will be
voted (1) FOR the election of the nominee directors named on page 4 of this
proxy statement, and (2) FOR approval of the selection of Ernst & Young, LLP as
our independent auditors for 2000.
WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
It means that you have multiple accounts with brokers and/or our transfer agent.
Please vote all of these shares. We recommend that you contact your broker
and/or our transfer agent to consolidate as many accounts as possible under the
same name and address. Our transfer agent is CIBC Mellon Trust, which may be
reached at 1-800-387-0825.
WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY?
Your shares may be voted under certain circumstances if they are held in the
name of a brokerage firm. Brokerage firms have the authority to vote customers'
unvoted shares, which are referred to as "broker non-votes," on certain
"routine" matters, including the election of directors. Shares represented by
broker non-votes are counted for purposes of establishing a quorum. At our
meeting, shares represented by broker non-votes will be counted as voted by the
brokerage firm in the election of directors and in the approval of the selection
of our independent auditors, but will not be counted for all other matters to be
voted on because these other matters are not considered "routine" under the
applicable rules. If you hold your shares directly in your own name, they will
not be voted if you do not provide a proxy.
3
HOW CAN I ATTEND THE MEETING?
The annual meeting is open to all holders of Cycomm International common stock.
For directions to the annual meeting, please call our Investor Relations
department at (703) 903-9548.
MAY STOCKHOLDERS ASK QUESTIONS AT THE MEETING?
Yes. Representatives of the Company will answer stockholders' questions of
general interest at the end of the meeting.
HOW MANY VOTES MUST BE PRESENT TO HOLD THE MEETING?
Your shares are counted as present at the meeting if you attend the meeting and
vote in person or if you properly return a proxy by mail. In order for us to
conduct our meeting, a majority of our outstanding shares of common stock as of
May 17, 2000, must be present in person or by proxy at the meeting. This is
referred to as a quorum.
HOW MANY VOTES ARE NEEDED TO ELECT DIRECTORS?
Nominees for director must receive a majority of the votes cast in order to be
elected. Shares not voted, whether by marking "Abstain" on your proxy card, by
broker non-vote (which is described above), or otherwise, will have no impact on
the election of directors. Unless a properly executed proxy card is marked
"Withhold Authority," the proxy given will be voted "For" the nominees for
director.
HOW MANY VOTES ARE NEEDED TO APPROVE THE SELECTION OF OUR INDEPENDENT AUDITORS?
The selection of Ernst & Young, LLP ("E&Y") as our independent auditors requires
a majority of the votes cast in order to be approved. Shares not voted, whether
by marking "Abstain" on your proxy card, by broker non-vote (which is described
above), or otherwise, will have no impact on the approval of the selection of
E&Y as our independent auditors. Unless a properly executed proxy card is marked
"Against," the proxy given will be voted "For" the approval of the Board's
selection of our independent auditors.
CAN MY SHARES BE VOTED ON MATTERS OTHER THAN THOSE DESCRIBED IN THIS PROXY
STATEMENT?
Yes. The Company has not received proper notice of, and is not aware of, any
business to be transacted at the meeting other than as indicated in this proxy
statement. If any other item or proposal properly comes before the meeting, the
proxies received will be voted in accordance with the discretion of the proxy
holders.
ARE DISSENTERS' RIGHTS APPLICABLE TO ANY OF THE PROPOSALS?
No, dissenters' rights do not apply to any of the proposals.
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ELECTION OF DIRECTORS AND DIRECTOR BIOGRAPHIES
WHO ARE THIS YEAR'S NOMINEES?
All of the nominees standing for election this year are incumbent members of the
Board:
ALBERT I. HAWK
Albert I. Hawk, 40, is Chairman of the Board of Directors, President and Chief
Executive Officer of the Company since May 1996. From 1993 to May 1996, Mr. Hawk
was Managing Director of Corstone Corporation, a private merchant banking and
professional services firm specializing in telecommunications and information
technologies. Mr. Hawk has invested in and served as founder, executive officer
and director of numerous high growth companies.
HUBERT R. MARLEAU
Hubert R. Marleau, 50, has served as a director since November 1993 and serves
as president and Chief Executive Officer of Palos Capital Corp., a private
merchant bank, since January 1998. Mr. Marleau was a founder and Chairman and
Chief Executive Officer of Marleau Lemire Inc., a large, independent broker
dealer in Canada, from January 1989 to December 1997. Mr. Marleau serves on the
Boards of numerous public and private companies, including Cinar Films Inc.,
Herzfeld Caribbean Basin Fund Inc., Liquidation World Inc., Uni-Select Inc., US
Global Strategies Fund Ltd. and US Masters Holding Ltd.
LT. GEN. THOMAS P. STAFFORD
Lt. Gen. Thomas P. Stafford (USAF-Retired), 68, has served as a director since
November 1996 and is Vice Chairman of Stafford, Burke & Hecker. After serving as
an astronaut and piloting Gemini VI and commanding Gemini IX and Apollo X, the
first lunar module flight to the moon, Gen. Stafford retired in 1979 from the
U.S. Air Force as Deputy Chief of Staff for Research, Development and
Acquisition. Gen. Stafford serves on the Boards of numerous public and private
companies, including Allied Signal Inc., CMI, Inc., Seagate Technologies,
Tremont Inc., Wheelabrator Technologies, Inc., Timet, Inc. and Tracer, Inc.
STEPHEN SPARKS
Stephen Sparks, 40, has served as a director since September 1999 and is the CEO
of Sparks Personnel. Mr. Sparks has founded and been a director and officer for
several high growthcompanies in the Washington, D.C. area, including Customer
Care Solutions, MedOne Staffing and Seven Locks Broadcasting Company.
WE RECOMMEND THAT YOU VOTE FOR THE ELECTION OF THESE DIRECTORS
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HOW LONG WILL THESE NOMINEES SERVE?
Each nominee would hold office until the 2001 annual meeting of stockholders and
until a successor is assigned. Directors will be eligible for re-election at the
2001 annual meeting of stockholders.
WHAT IS THE MAKEUP OF THE BOARD OF DIRECTORS?
The Board of Directors is currently comprised of the four nominees listed on
page 4.
WHAT IF A NOMINEE IS UNWILLING OR UNABLE TO SERVE?
This is not expected to occur. If it does, proxies will be voted for a
substitute nominated by the Board of Directors, or the Board will reduce the
number of directors.
HOW ARE DIRECTORS COMPENSATED?
Directors who are not employees of Cycomm receive $1,000 for each meeting they
attend in person and not by telephone, and are reimbursed for travel expenses in
attending meetings. Directors also receive options to purchase Cycomm stock.
Directors who are also employees of Cycomm are not separately compensated for
their services as directors.
HOW OFTEN DID THE BOARD MEET IN 1999?
The Board of Directors met two times during fiscal 1999, and held other formal
and informal telephonic meetings.
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WHAT ARE THE COMMITTEES OF THE BOARD?
Our Board of Directors has the following committees:
- --------------------------------------------------------------------------------
Name of Committee and Members Functions of the Committee
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Audit: o Oversees auditing procedures
Lt. Gen. Thomas P. Stafford o Receives and accepts the report of
Hubert R. Marleau independent auditors
Stephen Sparks o Oversees internal systems of
accounting and management control
o Makes recommendations regarding the
selection of independent auditors
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Compensation: o Reviews and recommends compensation
Lt. Gen. Thomas P. Stafford for directors and executive
Hubert Marleau officers
Stephen Sparks o Makes grants of stock awards to
officers, executives and employees
pursuant to stock incentive plans
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Nominating: o Makes recommendations for nominees
Albert I. Hawk for director
Lt. Gen. Thomas P. Stafford o Reviews and monitors activities of
Hubert R. Marleau Board members
Stephen Sparks o Develops, sets and maintains
corporate governance standards
- --------------------------------------------------------------------------------
APPROVAL OF THE SELECTION OF INDEPENDENT AUDITORS
WHO ARE CYCOMM'S INDEPENDENT AUDITORS?
Ernst & Young, LLP ("E&Y") has served as our independent auditors since 1995.
The Board of Directors has selected E&Y to be Cycomm's independent auditors for
2000. A representative of E&Y will be present at the annual meeting, will be
given the opportunity to make a statement and will be available to respond to
appropriate questions.
WE RECOMMEND THAT YOU VOTE FOR THE APPROVAL OF THE SELECTION OF ERNST & YOUNG,
LLP AS CYCOMM'S INDEPENDENT AUDITORS
7
EXECUTIVE COMPENSATION
The following tables set forth the compensation earned by our Chief Executive
Officer, and other executive officers whose salaries exceeded $100,000 in the
fiscal years 1999 and 1998:
Long-Term
Annual Compensation Compensation
Name and
Principal Other Annual All Other
Position Year Salary($) Bonus($) Compensation($) Options(#)Compensation($)(1)
- -------- ------ --------- -------- --------------- ---------- ---------------
Albert I. 1999 $240,000 --- --- 1,000,000 ---
Hawk 1998 $204,833 --- $6,000 200,000 $1,675
President
and Chief
Executive
Officer
Michael 1999 $150,000 --- --- 175,000 $3,900
D. 1998 150,000 --- --- 75,000 3,900
Perrine
President -
Mobile
Computing division
(1) Includes amounts contributed by the Company to the 401(k) Plan. The Company
contributes an amount equal to 50% of the eligible employees contribution to the
401(k) Plan, not to exceed 3% of the employees earnings.
Option Grants in Last Fiscal Year
% of
Total Potential
Options Realizable Value
Number of Granted at Assumed Annual
Shares to Rates of Stock
Underlying Employees Exercise Price Appreciation
Options in Fiscal Price Expiration for Option Term
Name Granted(#)(1) Year(2) ($/Share) Date 5% 10%
---- ------------- ------- --------- ---- -- ---
Albert I. Hawk 1,000,000 51.4% $0.38 6/1/04 $301,429 $ 478,570
Michael D. 175,000 9.0% $0.38 6/1/04 $ 52,750 $ 83,750
Perrine
(1)These options are granted outside of and are not part of the Option Plan.
The shares issued upon the exercise of the options are restricted and may not
be sold unless registered or exempt from registration.
(2)The Company granted options totaling 1,946,438 shares to employees in the
fiscal year ended December 31, 1999.
The following table sets forth information with respect to options
exercised by officers in the fiscal year ended December 31, 1999 and the value
of such officers' unexercised options at December 31, 1999.
Aggregated Options Exercises in Last Fiscal
Year and Fiscal Year-End Option Values
Number of Shares
Shares Underlying Unexercised Value of Unexercised In-
Acquired Options at the-Money Options
on Value Fiscal Year-End(#) at Fiscal Year-End($)
Name Exercise(#)Realized($)Exercisable UnexercisableExercisableUnexercisable
Albert I.
Hawk --- --- 1,800,000 --- $155,000 ---
Michael D.
Perrine --- --- 162,500 87,500 $ 13,563 ---
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STOCK OWNERSHIP
The following table shows beneficial ownership of shares of the Company's
common stock as of March 31, 2000 by: persons known to the Company to be the
beneficial owners of more than 5% of Cycomm's Common Stock; and stock ownership
of all directors and officers of the Company as a group:
Percent
Name and Address of Amount and Nature of of
Beneficial Owner Beneficial Ownership Class(1)(2)
Special Situations Funds 8,000,000(3) 23.7%
153 E. 53rd Street
51st Floor
New York, NY 10022
Albert I. Hawk 2,918,818(4) 8.6%
1420 Springhill Road
Suite 420
McLean, VA 22102
Stephen Sparks 2,034,904(5) 6.0%
1420 Springhill Road
Suite 420
McLean, VA 22102
Hubert Marleau 683,152(6) 2.0%
Lt. Gen. Thomas P. Stafford 238,734(7) *
Calvin G. Cobb 100,000(8) *
All officers and Directors 5,975,608 17.7%
as a group (5 persons)
(1)Pursuant to applicable rules of the Securities and Exchange Commission,
shares of Common Stock which were not outstanding as of March 31, 2000, but
which were subject to issuance within 60 days of March 31, 2000 are deemed to
be outstanding for purposes of computing the percentage ownership.
(2)Beneficial owners have sole voting and investment powers with respect to
shares of Common Stock actually held on March 31, 2000, except where
indicated otherwise.
(3)Includes stock purchase warrants to acquire an aggregate of 4,000,000
shares.
(4)Includes stock purchase options to acquire an aggregate of 1,800,000
shares and stock purchase warrants to acquire an aggregate of 500,000
shares.
(5)Includes stock purchase warrants to acquire an aggregate of 500,000
shares.
(6)Includes stock options to acquire an aggregate of 165,000 shares of common
stock.
(7)Includes stock options to acquire an aggregate of 180,000 shares.
(8)Includes stock options, which are currently exercisable to acquire an
aggregate of 100,000 shares
* Represents beneficial ownership of less than one percent
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RELATED PARTY TRANSACTIONS
In April 1997, the Company loaned certain officers, directors and
employees an aggregate of $184,000 in order to purchase 92,000 shares of the
Company's common stock from an unrelated shareholder in a private transaction.
At December 31, 1999, amounts outstanding under these loans totalled $128,684 in
principal and $20,297 in accrued interest receivable. The loans are secured by
the common stock, bear interest at 5.9% and are due April 30, 2002. The Company
has recorded a valuation allowance of $88,470 against the receivable and the net
balance of $60,511 is reflected as a contra equity account on Cycomm's balance
sheet. The amounts loaned to current officers and directors and the accrued
interest as of December 31, 1999 are listed below:
Name of Officer or Director Amount of Loan Accrued Interest as of 12/31/99
- --------------------------- -------------- ----------------------
Albert I. Hawk $ 44,836 $7,072
Hubert R. Marleau 4,076 1,286
Lt. Gen. Thomas P. Stafford 8,734 2,755
On September 20, 1999, Stephen Sparks purchased a convertible debenture
from Cycomm in the amount of $500,000. In connection with this investment, Mr.
Sparks was appointed to Cycomm's Board of Directors.
In June 1999, Cycomm entered into an employee staff leasing agreement with
Professional Staff Leasing Corp. ("ProLease"), a company in which Cycomm's Chief
Executive Officer is a director and minority shareholder. Under this agreement,
ProLease handles payroll processing, payroll tax and benefit administration, and
other human resources functions for Cycomm's U.S. employees. Cyomm's U.S.
employees are eligible to participate in ProLease's 401(k) plans and health
insurance benefits packages. Cycomm is charged standard rates for ProLease's
services.
In January 2000, Cycomm raised capital through a private equity placement
of common stock with a group called Special Situations Funds LLC ("SSF"). In
connection with this private placement, some of our officers and directors
invested money in Cycomm at the same terms offered to SSF. The amounts invested
by each officer and director are listed below:
Name of Shares of Common Warrants
Officer or Director Amount Invested Stock Received Received
Albert I. Hawk $250,000 500,000 500,000
Stephen Sparks 250,000 500,000 500,000
Palos Capital Corp(1) 250,000 500,000 ---
(1) Palos Capital Corp is an independent broker dealer in which Hubert R.
Marleau has an ownership interest
COMPLIANCE WITH SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities to file with
the SEC reports of ownership and changes in ownership of the Company's common
stock. Directors, executive officers and greater than ten percent stockholders
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file. Based solely on a review of the copies of these
reports furnished to the Company or written representations that no other
reports were required, we believe that during fiscal year 1999, all our
directors, executive officers and greater than ten percent beneficial owners
complied with these requirements.
10
SHAREHOLDER PROPOSALS FOR THE 2001 MEETING
Cycomm shareholders can submit proposals for consideration by the Board of
Directors for the 2001 annual meeting. Shareholder proposals must be submitted
to our Company's Assistant Corporate Secretary, Robert M. Hutton, 1420
Springhill Rd., Suite 420, McLean, VA 22102, sufficiently far in advance so that
it is received by us not later than March 31, 2001. If we do not receive notice
of a shareholder proposal or nomination for director by that date, the proposal
or nomination will not be considered at the 2001 annual meeting.
EXPENSES OF SOLICIATION
The expense of preparing, printing and mailing this Proxy Statement and
the Proxy will be borne by the Company. In addition to use of the mails, Proxies
may be solicited by Directors and officers of the Company, at no additional
compensation, in person or by telephone or telegram. The Company will also
reimburse brokerage houses and other custodians, nominees and fiduciaries for
their expenses, in accordance with Securities and Exchange Commission
regulations, in sending this Proxy Statement, the Proxy and the 1999 Annual
Report to the beneficial owners of its shares.
INFORMATION ABOUT THE COMPANY
Further information regarding the Company is contained in the Company's
Annual Report for the year ended December 31, 1999, a copy of which accompanies
this Proxy Statement, and which is not part of the proxy soliciting material.
The Company will furnish without charge additional copies of its Annual
Report on Form 10-KSB for the year ended December 31, 1999 upon written request
to the Secretary, Cycomm International Inc., 1420 Springhill Road, Suite 420,
McLean, Virginia 22102.
By Order of the Board of Directors
Robert M. Hutton, Assistant Secretary
McLean, Virginia
May 24, 2000
Proxy2000.doc
11
PROXY/VOTING INSTRUCTIONS
CYCOMM INTERNATIONAL INC.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF STOCKHOLDERS ON JUNE 27, 2000.
The undersigned stockholder hereby appoints ALBERT I. HAWK, HUBERT R. MARLEAU,
LT. GEN THOMAS P. STAFFORD and STEPHEN SPARKS, and each of them, attorneys and
proxies for the undersigned with full power of substitution, to act and vote,
with the powers the undersigned would possess if personally present, at the
Annual Meeting of Stockholders of Cycomm International Inc., to be held at the
Ritz Carlton Hotel in McLean, VA, on Tuesday, June 27, 2000 9:00 a.m. and any
adjournments or postponements thereof, as directed on the reverse side, with
respect to the matters set forth on the reverse side and with discretionary
authority on all other matters that come before the meeting, all as more fully
described in the proxy statement received by the undersigned stockholder. If no
direction is made, the proxy will be voted "FOR" the approval of the election of
Albert I.Hawk, Hubert R. Marleau, Lt. Gen. Thomas P. Stafford and Stephen
Sparks, and "FOR" the approval of the selection of Cycomm's independent
auditors, and in accordance with the recommendations of the Board of Directors,
and in their discretion, any other matter properly presented.
- - ------------------------------------------------------------------------------
-- DETACH PROXY CARD HERE --
- - ------------------------------------------------------------------------------
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2
1. Election of Directors:
Nominees: (1) Albert I. Hawk, (2) Hubert R. Marleau,
(3) Lt. Gen. Thomas P. Stafford, (4) Stephen Sparks
FOR WITHHELD
[ ] [ ]
For all nominees except as noted below
[ ]------------------------------
FOR AGAINST ABSTAIN
2. Approval of the selection of Ernst & Young, LLP [ ] [ ] [ ]
as Cycomm's independent auditors for 2000
Please sign exactly as name appears at left. 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.
Signature(s)_________________________________________ Date ____________________
Signature(s)_________________________________________ Date ____________________
PLEASE SIGN THIS PROXY AS NAME(S) APPEAR(S) ABOVE.