SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EAGLE WIRELESS INTERNATIONAL, INC.
----------------------------------
(Name of Registrant as Specified in Its Charter)
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
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
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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:
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(4) Date Filed:
EAGLE WIRELESS INTERNATIONAL, INC.
101 COURAGEOUS DRIVE
HOUSTON, TEXAS 77573
December 28, 2001
To Our Shareholders:
You are cordially invited to attend the 2001 Annual Meeting of
Shareholders of Eagle Wireless International, Inc., which will be held on
Wednesday, February 13, 2002, beginning at 10 a.m., Central Standard Time, at
2500 South Shore Blvd., League City, Texas 77573.
Information about the Annual Meeting, including matters on which
shareholders will act, may be found in the notice of annual meeting and proxy
statement accompanying this letter. We look forward to greeting in person as
many of our shareholders as possible.
It is important that your shares be represented and voted at the meeting.
Whether or not you plan to attend the Annual Meeting, please complete, sign,
date, and promptly return the accompanying proxy in the enclosed envelope.
Returning the proxy does NOT deprive you of your right to attend the Annual
Meeting. If you decide to attend the Annual Meeting and wish to change your
proxy vote, you may do so automatically by voting in person at the meeting.
Sincerely yours,
/s/ H. Dean Cubley
Dr. H. Dean Cubley
CHAIRMAN
EAGLE WIRELESS INTERNATIONAL, INC.
101 COURAGEOUS DRIVE, HOUSTON, TEXAS 77573
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 13, 2002
-----------------------------
The Annual Meeting of Shareholders of Eagle Wireless International, Inc., will
be held at 2500 South Shore Blvd., League City, Texas 77573, on Wednesday,
February 13, 2002, at 10:00 a.m., Central Standard Time, for the following
purposes:
1. APPROVAL OF A CLASSIFIED BOARD OF DIRECTORS. To approve an amendment to
Eagle's Articles of Incorporation to provide for the classification of the
Board of Directors into three classes of directors with staggered three-year
terms of office.
2. ELECTION OF DIRECTORS. To elect seven (7) directors to the Board of Directors
to serve for terms of one to three years, respectively, or until their
successors are elected and qualified if Proposal No. 1 is approved, or to
elect the same persons as directors for a term of one year if Proposal No. 1
is not approved.
3. NAME CHANGE. To approve an amendment to Eagle's Articles of Incorporation to
change the name of the company to "Eagle Broadband, Inc."
4. APPROVAL OF AMENDMENT OF VOTING PERCENTAGES. To approve an addition to
Eagle's Articles of Incorporation to permit shareholder approval of future
amendments to the Articles of Incorporation to be accomplished through the
vote of 55% of the shares entitled to vote, as opposed to 66 2/3% of the
shares entitled to vote.
5. APPROVAL OF AMENDMENT OF SPECIAL MEETING RULES. To approve an amendment to
Eagle's Articles of Incorporation to provide that special meetings of the
shareholders may only be called by a majority of the Board of Directors, the
Chairman of the Board, the Chief Executive Officer, or the holders of at
least 50% of the outstanding shares of common stock of the company.
6. INCREASE THE NUMBER OF AUTHORIZED SHARES. To approve an amendment to Eagle's
Articles of Incorporation to increase the number of shares of capital stock
authorized from 100,000,000 shares to 200,000,000 shares.
7. RATIFICATION OF AUDITORS. To ratify the selection of McManus & Co., P.C., as
auditors for Eagle for the fiscal year ending August 31, 2002.
8. AMENDMENT OF STOCK OPTION PLAN. To approve an amendment to Eagle's 1996 Stock
Option Plan to increase the number of shares of common stock reserved for
issuance from 400,000 shares to 1,000,000 shares.
Shareholders of record at the close of business on December 18, 2001, will be
entitled to notice of, and to vote at, this meeting.
By Order of the Board of Directors,
Dr. H. Dean Cubley
CHIEF EXECUTIVE OFFICER
DATED: DECEMBER 28, 2001
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PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES WILL BE VOTED IF YOU
ARE NOT ABLE TO ATTEND THE ANNUAL MEETING.
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EAGLE WIRELESS INTERNATIONAL, INC.
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
The Board of Directors of Eagle Wireless International, Inc., a Texas
corporation, prepared this proxy statement for the purpose of soliciting proxies
for our Annual Meeting of Shareholders. Our Annual Meeting will be held at 2500
South Shore Blvd., League City, Texas 77573, at 10:00 a.m., Central Standard
Time, on Wednesday, February 13, 2002, unless adjourned or postponed. The Board
is making this solicitation by mail, and Eagle will pay all costs associated
with this solicitation. This proxy statement and accompanying notice of Annual
Meeting and proxy are first being mailed to shareholders on or about December
28, 2001. When you see the terms "we", "our", or "Eagle", it refers to Eagle
Wireless International, Inc., and its subsidiaries.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Our common stock is the only type of security entitled to vote at the
Annual Meeting. On December 18, 2001, the record date for determination of
shareholders entitled to vote at the Annual Meeting, there were 67,738,400
shares of common stock outstanding. Each shareholder of record on December
18, 2001 is entitled to one vote for each share of common stock held by such
shareholder on December 18, 2001. Shares of common stock may not be voted
cumulatively. Abstentions and broker non-votes will be treated as shares
which are present for purposes of determining the existence of a quorum, but
which are not present for purposes of determining whether a proposal has been
approved. The term "broker non-vote" refers to shares held by a broker in
street name which are present by proxy, but which are not voted on a matter
pursuant to rules prohibiting brokers from voting on non-routine matters
without instructions from the beneficial owner of the shares. In the event a
broker votes on a routine matter, such vote will count as both present and
voted for the purposes of determining whether a proposal has been approved.
QUORUM REQUIRED
Our Bylaws provide that the holders of a majority of our common stock
issued and outstanding and entitled to vote and that are present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at the Annual Meeting. Abstentions and broker non-votes will be counted as
present for the purpose of determining the presence of a quorum.
VOTES REQUIRED
PROPOSAL 1. Approval of the amendment to our Articles of Incorporation to
provide for a classified board of directors requires the affirmative vote of
holders of 66 2/3% of the shares of common stock issued and outstanding and
entitled to vote at the Annual Meeting. Abstentions and broker non-votes are not
affirmative votes and, therefore, will have the same effect as votes against the
proposal.
PROPOSAL 2. Directors are elected by a plurality of the affirmative votes
cast by those shares present in person, or represented by proxy, and entitled to
vote at the Annual Meeting. This means the seven (7) nominees for director
receiving the highest number of affirmative votes will be elected. Abstentions
and broker non-votes will not be counted toward a nominee's total. Shareholders
may not cumulate votes in the election of directors.
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PROPOSAL 3. Approval of the amendment to our Articles of Incorporation to
change our name to "Eagle Broadband, Inc." requires the affirmative vote of
holders of 66 2/3% of the shares of common stock issued and outstanding and
entitled to vote at the Annual Meeting. Abstentions and broker non-votes are not
affirmative votes and, therefore, will have the same effect as votes against the
proposal.
PROPOSAL 4. Approval of the addition to our Articles of Incorporation to
permit shareholder approval of future amendments to our Articles of
Incorporation to be accomplished through the vote of 55% of the shares entitled
to vote, as opposed to 66 2/3% of the shares entitled to vote, requires the
affirmative vote of 66 2/3% of the shares of common stock issued and outstanding
and entitled to vote at the Annual Meeting. Abstentions and broker non-votes are
not affirmative votes and, therefore, will have the same effect as votes against
the proposal.
PROPOSAL 5. Approval of the amendment to our Articles of Incorporation to
provide that special meetings of the shareholders may only be called by a
majority of the Board of Directors, the Chairman of the Board, the Chief
Executive Officer, or the holders of at least 50% of the outstanding shares of
common stock of the company requires the affirmative vote of holders of 66 2/3%
of the shares of common stock issued and outstanding and entitled to vote at the
Annual Meeting. Abstentions and broker non-votes are not affirmative votes and,
therefore, will have the same effect as votes against the proposal.
PROPOSAL 6. Approval of the amendment to our Articles of Incorporation to
increase the number of shares of capital stock authorized from 100,000,000
shares to 200,000,000 shares requires the affirmative vote of holders of 66 2/3%
of the shares of common stock issued and outstanding and entitled to vote at the
Annual Meeting. Abstentions and broker non-votes are not affirmative votes and,
therefore, will have the same effect as votes against the proposal.
PROPOSAL 7. Ratification of the appointment of McManus & Co., P.C. as our
independent public accountants for the fiscal year ending August 31, 2002
requires the affirmative vote of a majority of those shares present in person,
or represented by proxy, and cast either affirmatively or negatively at the
Annual Meeting. Abstentions and broker non-votes will not be counted as having
been voted on the proposal and will have no effect on the proposal.
PROPOSAL 8. Approval of the amendment to our 1996 Stock Option Plan
requires the affirmative vote of a majority of those shares present in person,
or represented by proxy, and cast either affirmatively or negatively at the
Annual Meeting. Abstentions and broker non-votes will not be counted as having
been voted on the proposal and will have no effect on the proposal.
PROXIES
Whether or not you are able to attend the Annual Meeting, you are urged to
complete and return the enclosed proxy, which will be voted as you direct on
your proxy when properly completed. In the event no directions are specified,
such proxies will be voted FOR the nominees for election to the Board of
Directors (as set forth in Proposal No. 2), FOR Proposal Nos. 1, 3, 4, 5, 6, 7,
and 8 and in the discretion of the proxy holders as to other matters that may
properly come before the Annual Meeting. You may also revoke or change your
proxy at any time before the Annual Meeting. To do this, send a written notice
of revocation or another signed proxy with a later date to the Secretary of the
company at our principal executive offices before the beginning of the Annual
Meeting. You may also automatically revoke your proxy by attending the Annual
Meeting and voting in person. All shares represented by a valid proxy received
prior to the Annual Meeting will be voted.
SOLICITATION OF PROXIES
We will bear the entire cost of solicitation, including the preparation,
assembly, printing, and mailing of this proxy statement, the proxy, and any
additional soliciting material furnished to shareholders. Copies of solicitation
material will be furnished to brokerage houses, fiduciaries, and custodians
holding shares in their names that are beneficially owned by others so that they
may forward this solicitation material to such beneficial owners. In addition,
we may reimburse these persons for their costs of forwarding the solicitation
material to the beneficial
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owners. The original solicitation of proxies by mail may be supplemented by
solicitation by telephone, telegram, or other means by directors, officers,
employees, or agents of the company. No additional compensation will be paid to
these individuals for any such services.
PROPOSAL 1 - APPROVAL OF A CLASSIFIED BOARD OF DIRECTORS
Our Board of Directors has approved and recommended that the
shareholders approve an amendment to our Articles of Incorporation, as
presently amended, (the "Articles"), to provide for the classification of our
Board of Directors into three classes of directors with staggered terms of
office. Article Seven of Appendix A to this Proxy Statement sets forth the
text of the proposed amendment to the Articles to be added as a new paragraph.
Our Bylaws now provide that all directors are to be elected annually to
serve until their successors have been elected and qualified. Texas law permits
provisions in the articles of incorporation approved by shareholders that
provide for a classified board of directors. The proposed amendment to the
Articles would provide that directors will be classified into three classes, as
nearly equal in number as possible. One class of directors, initially consisting
of Mr. Shannon D. McLeroy and Ms. Nancy Main, would hold office initially for a
term expiring at the 2002 Annual Meeting; a second class of directors, initially
consisting of Messrs. A.L. Clifford and Glenn Allan Goerke, would hold office
initially for a term expiring at the 2003 Annual Meeting; and a third class of
directors, initially consisting of Messrs. H. Dean Cubley, Christopher W. Futer
and Manny M. Carter, would hold office initially for a term expiring at the 2004
Annual Meeting. At each Annual Meeting following this initial classification and
election, the successors to the class of directors whose terms expire at that
meeting would be elected for a term of office to expire at the third succeeding
Annual Meeting after their election and until their successors have been duly
elected and qualified.
The proposed classified board amendment will significantly extend the time
required to effect a change in control of the Board of Directors and may
discourage hostile takeover bids for Eagle. Currently, a change in control of
the Board of Directors can be made by shareholders holding a majority of the
votes cast at a single annual meeting. If we implement a classified board of
directors, it will take at least two annual meetings for a majority of
shareholders to effect a change in control of the Board of Directors, because
only a minority of the directors will be elected at each meeting.
The classified board proposal is designed to assure continuity and
stability in the Board of Directors' leadership and policies. While management
has not experienced any problems with such continuity in the past, it wishes to
ensure that this experience will continue. The Board of Directors also believes
that the classified board proposal will assist the Board of Directors in
protecting the interests of our shareholders in the event of an unsolicited
offer for Eagle. Because of the additional time required to change control of
the Board of Directors, the classified board proposal will tend to perpetuate
present management. Without the ability to obtain immediate control of the Board
of Directors, a takeover bidder will not be able to take action to remove other
impediments to an acquisition of Eagle. Because the classified board proposal
will increase the amount of time required for a takeover bidder to obtain
control of Eagle without the cooperation of the Board of Directors, even if the
takeover bidder were to acquire a majority of Eagle's outstanding stock, it will
tend to discourage certain tender offers, perhaps including some tender offers
that shareholders may feel would be in their best interests. The proposed
classification of the Board of Directors is not being recommended in response to
a pending or threatened attempt to acquire control of Eagle.
If the number of directors is increased by the Board of Directors and the
resultant vacancies are filled by the Board of Directors, those additional
directors will serve only until the next annual meeting of shareholders, at
which time they will be subject to election and classification by the
shareholders. If any director is elected by the Board of Directors to fill a
vacancy that occurs as a result of the death, resignation, or removal of another
director, that director will hold office until the annual meeting of
shareholders at which the director who died, resigned, or was removed would have
been required, in the regular order of business, to stand for re-election, even
though that term may extend beyond the next annual meeting of shareholders.
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THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE ARTICLES OF INCORPORATION TO PROVIDE FOR CLASSIFICATION OF
THE BOARD OF DIRECTORS.
PROPOSAL 2 - ELECTION OF DIRECTORS
The Board of Directors currently consists of seven (7) members. The Board
has nominated for election Messrs. H. Dean Cubley, Christopher W. Futer, A.L.
Clifford, Glenn Allan Goerke, Shannon D. McLeroy, Manny M. Carter and Ms. Nancy
Main. In the event Proposal No. 1 is adopted at the Annual Meeting, the
directors will be divided into three classes and the shares represented by the
enclosed proxy will be voted for the election as directors of the seven (7)
nominees named to serve for the terms indicated below, or until their
successors have been duly elected and qualified. If Proposal No. 1 is not
approved by the shareholders at the Annual Meeting, the shares represented by
the enclosed proxy will be voted for the election as directors of the seven (7)
nominees named below to serve until the 2002 Annual Meeting or until their
successors have been duly elected and qualified. The seven (7) nominees
receiving the highest number of votes cast at the Annual Meeting will be
elected. If any of the nominees becomes unavailable for any reason or if a
vacancy should occur before the election (which events are not anticipated), the
shares represented by the enclosed proxy may be voted for such other person or
persons recommended by the Board of Directors as may be determined by the
holders of the proxy.
DIRECTOR NOMINEES
MANNY M. CARTER. Class Three (3) Director, term to expire at the 2004
annual meeting. Mr. Carter has served as president and chief operating officer
of Eagle since September 2001 and as a director since August 2001. A 1963
graduate of the University of Texas with a BBA with Honors in International
Business, Mr. Carter completed his graduate studies in international economics
at the Free University of Berlin as a Fulbright Scholar. He commenced his
international career with the Mobil Oil Corporation in 1965 where he spent over
26 years in progressing senior management positions, including CEO of several of
Mobil's overseas affiliates. From 1983 to 1987, Mr. Carter served as vice
president of Mobil's Middle Eastern Operations in Jeddah, Saudi Arabia. From
1987 until his retirement from Mobil in 1990, Mr. Carter was general manager of
Mobil's international marketing division. From 1990 through 1993, Mr. Carter was
senior vice president of MPSI, Inc. leaving that position in 1993 to become
executive vice president of Pennzoil Products Company's international
operations.
A.L. CLIFFORD. Class Two (2) Director, term to expire at the 2003 annual
meeting. Mr. Clifford has served as a director since December 1996. Mr. Clifford
has served as president of Clifford & Associates for over five years, a company
involved in the distribution of electrical and electronic products throughout
the Midwest. Mr. Clifford is a graduate of the University of Miami, where he
studied business and attended law school.
DR. H. DEAN CUBLEY. Class Three (3) Director, term to expire at the 2004
annual meeting. Dr. Cubley has served as chairman of the board and chief
executive officer of Eagle since March 1996 and as president from March 1996
until September 2001. Before that, Dr. Cubley served as vice-president of Eagle
Telecom, Inc. from 1993 to March 1996. Dr. Cubley is also a member of the
Oversight Committee for the University of Houston Epitaxy Center, which managed
the Wake Shield Flight aboard the Shuttle in September 1995. Dr. Cubley has over
35 years of extensive experience in the field of telecommunications. From 1965
to 1984, Dr. Cubley worked for the NASA Manned Spacecraft Center in the
Electromagnetic Systems Branch of the Engineering and Development Directorate.
For a five-year portion of that period, Dr. Cubley was the Antenna Subsystems
Manager for all spacecraft antennas for the Shuttle Program. Dr. Cubley's duties
included overall responsibility for the design, development, costs schedules and
testing of the antennas and hardware for all Shuttle flights. Throughout his
career, Dr. Cubley has authored or co-authored over fifty publications. In
addition, he has a total of eight patents and patents-pending registered in his
name. Dr. Cubley received a bachelor of science degree in electrical engineering
from the University of Texas in 1964 and a masters degree in electrical
engineering from the University of Texas in 1965. In 1970, Dr. Cubley received
his Ph.D. in electrical engineering from the University of Houston.
CHRISTOPHER W. "JAMES" FUTER. Class Three (3) Director, term to expire at
the 2004 annual meeting. Mr. Futer has served as a director and vice president
of Eagle since March 1996. Before that, Mr. Futer served as sales manager of
Eagle Aerospace, Inc. Telecom Division from November 1994 until February 1996.
Mr. Futer's spectrum of experience has included work in the fields of hi-tech
flight simulation and display technologies (especially those of light emitting
diodes and liquid crystal displays), and in consumer electronics. Most recently,
he has been involved in pager design, manufacture and marketing, as well as the
wider field of messaging equipment. His international background includes work
with Hatfield Instrument, Canadian Aviation Electronics, located in Montreal,
Canada, General Instruments, Litronix, and Siemens. In 1975, he was instrumental
in implementing a major "turn-key" technology transfer from Canada to the (then)
Soviet Union for the manufacture of hand-held electronic calculators, an
operation which the Soviets then improved from the consumer level and adapted to
suit their particular requirements. Since 1975, Mr. Futer has had extensive
in-depth experience of interfacing with Pacific Rim countries. In 1992 and 1993,
he spent time in the People's Republic of China coordinating a successful
technology transfer for one of the first pager manufacturing facilities.
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DR. GLENN ALLAN GOERKE. Class Two (2) Director, term to expire at the 2003
annual meeting. Dr. Goerke has served as a director since March 2000. Dr. Goerke
has served as vice president of Edusafe Systems, Inc. since 1996. Dr. Goerke is
president emeritus of the University of Houston and currently serves a director
of The Institute for the Future of Higher Education. Prior to his current
position, Dr. Goerke served as president of the University of Houston from June
1995 to September 1997, and president of the University of Houston - Clear Lake
from August 1991 to June 1995 and has been associated with the University of
Houston system since 1986. While at the University of Houston, Dr. Goerke
initiated significant international program development with particular focus on
Mexico and Taiwan and received the "Breaking the Mold" award given by the Texas
Comptroller's Office for responsible fiscal planning efforts. Dr. Goerke was
named "Manager of the Year" by the Texas Gulf Coast Council of the National
Management Association in 1992. Dr. Goerke received his Ph.D. in Adult and
Higher Education from Michigan State University in 1962. Dr. Goerke received his
M.A. and B.A. degrees from Eastern Michigan University in 1955 and 1952,
respectively.
NANCY MAIN. Class One (1) Director, term to expire at the 2002 annual
meeting. Since 1994, Ms. Main has had a private law practice in Los Angeles,
California focusing on business, corporate and taxation law. From 1990 through
1992, Ms. Main was an Investment Banker with W.F. Investments in Century City,
California and from 1982 through 1989, Ms. Main was a partner with the law firm
of Horwich and Main in Century City, California. Ms. Main attained her Bachelor
of Arts in Anthropology from Colorado State University in 1976, her Master of
Business Administration from Arizona State University in 1981, and her Doctorate
of Jurisprudence from Arizona State University in 1982. Ms. Main is a member of
the State Bar of California, the Ninth Circuit Federal Bar, and the United
States Tax Court Bar.
SHANNON D. MCLEROY. Class One (1) Director, term to expire at the 2002
annual meeting. Mr. McLeroy has served as chief executive officer and president
of ClearWorks and as director of Eagle since January 2001, and as chief
operating officer of ClearWorks from October 1997 until January 2001. Mr.
McLeroy served as operations manager for NSE from August 1991 until October
1997. Mr. McLeroy has been in the systems integration business for over ten
years. He has worked beginning as a technician and has progressed through
various stages of management. Mr. McLeroy has managed teams of engineers to
deploy technical computer services with the last three companies with which he
has worked. Mr. McLeroy received his Bachelor of Science from Lacrosse
University in 2001.
COMMITTEES OF THE BOARD AND ATTENDANCE
The Board of Directors currently has standing Audit and Compensation
Committees. The Board of Directors does not have a nominating committee. The
members of the standing committees are identified in the following table:
DIRECTOR COMMITTEES
AUDIT COMPENSATION
-------- --------------
H. Dean Cubley
Christopher W. Futer
A.L. Clifford X X
Glenn Allan Goerke X X
Shannon D. Mcleroy
Manny M. Carter
Raymond Harrell X X
The Audit Committee held four (4) meetings during the last fiscal year,
and it is authorized to nominate our independent auditors and to review with the
independent auditors the scope and results of the audit engagement. The Audit
Committee is also authorized to review and assess our internal controls to
evaluate business risk and to ensure compliance with laws and regulations. For
further information, see the "Audit Committee Report" below.
The Compensation Committee, which held four (4) meetings during our last
fiscal year, recommends compensation levels for our executive officers and
consultants and is authorized to consider and make grants of options pursuant to
any approved stock option plan and to administer the plan.
We held seven (7) Board meetings during the last fiscal year. Each
director attended at least 75% of all Board meetings and meetings of committees
of which each director was a member, either in person or by telephone conference
calls.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" THE ELECTION OF EACH
OF THE NOMINEES LISTED ABOVE.
PROPOSAL 3 - APPROVAL OF NAME CHANGE
Our Board of Directors proposes that you approve the amendment of our
Articles of Incorporation to change our name from Eagle Wireless International,
Inc. to Eagle Broadband, Inc.
Our Board of Directors believes the new name better represents Eagle's
growing family of advanced technology companies and its commitment to becoming
an industry leader in providing technology-rich broadband products and services.
If the proposed amendment is approved by the shareholders, Article One of
our Articles will be amended to read as follows: "The name of the Corporation is
Eagle Broadband, Inc."
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE ARTICLES OF INCORPORATION TO CHANGE OUR NAME TO EAGLE
BROADBAND, INC.
PROPOSAL 4 - APPROVAL OF AMENDMENT OF VOTING PERCENTAGES
We are asking shareholders to amend the company's Articles of
Incorporation to provide that the affirmative vote of 55% rather than at least
66 2/3% of the voting power of all of the then outstanding shares of capital
stock entitled to vote generally in the election of directors is required to
amend our Articles in the future.
As currently in effect, the Texas Business Corporations Act requires the
affirmative vote of at least 66 2/3% of the voting power of all of the then
outstanding shares of the capital stock of the company entitled to vote
generally for the election of directors to amend our Articles. The Board of
Directors proposes that Article Twelve of the Articles be amended to reduce the
vote required to amend the Articles in the future to 55% of the voting power of
all of the then outstanding shares of capital stock of the company entitled to
vote generally in the election of directors of the company. The full text of the
amendment to Article Twelve is set forth in the Amended and Restated Articles of
Incorporation attached as Appendix A to this proxy statement.
The Board of Directors supports the proposal to amend the Articles. The
Board of Directors believes that if shareholders who own, in the aggregate, at
least 55% of the voting power of the outstanding shares of the capital
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stock of the company entitled to vote generally for the election of directors
want to change the company's Articles, they should be able to do so.
POSSIBLE EFFECTS OF THE PROPOSED AMENDMENT
The Board of Directors has determined after due consideration that
requiring a supermajority to amend the Articles is no longer in the best
interests of the company or its shareholders. For example, this requirement
may potentially impede the company's growth and development by not allowing
the company to increase its authorized capital stock in order to pursue
financing programs, acquisitions, and other transactions necessary for the
continued success of the company.
This proposed amendment to Article Twelve would make it easier for our
shareholders to increase or decrease the company's authorized capital stock, or
change any other provisions in our Articles. Currently, the holders of a
minority of the total shares of the company's capital stock outstanding and
entitled to vote have a veto power over any changes to the Articles.
In considering this proposal, shareholders should be aware that Texas
corporate law, which requires a supermajority to amend the Articles unless the
shareholders approve a lesser percentage, dictates the current supermajority
requirement. The requirement that a supermajority is needed prior to amending
the Articles can serve to protect against abusive or unfair tactics in
unsolicited attempts to buy the company. These provisions are intended to
enhance the likelihood of continuity and stability in the composition of the
Board of Directors and in the policies formulated by the Board of Directors and
to discourage certain types of transactions that may involve an actual or
threatened change of control of the company. These provisions are designed to
reduce the company's vulnerability to an unsolicited acquisition proposal and to
discourage certain tactics that may be used in proxy fights. The removal of the
supermajority will make the company more prone to such tactics.
The Board of Directors believes that the elimination of the supermajority
requirement will not have a negative material effect on the anti-takeover
protection afforded to the company and its shareholders. For example, if the
proposal set forth in Proposal 1 is approved, the Articles will provide that the
Board of Directors will be divided into three classes of directors, with each
class serving a staggered three-year term. This classification system of
electing directors may tend to discourage a third party from making a tender
offer or otherwise attempting to obtain control of the Company and may maintain
the incumbency of the Board of Directors, as the classification of the Board of
Directors generally increases the difficulty of replacing a majority of the
directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE ARTICLES OF INCORPORATION TO PROVIDE FOR THE REDUCTION OF
THE REQUIRED VOTE TO MAKE FUTURE AMENDMENTS TO 55% OF THE OUTSTANDING SHARES
OF CAPITAL STOCK ENTITLED TO VOTE.
PROPOSAL 5 - APPROVAL OF LIMITATIONS FOR CALLING SPECIAL MEETINGS
Our Board of Directors proposes that you approve the amendment of our
Articles to provide that special meetings of shareholders may be called only by
the Board of Directors, the Chairman of the Board, the Chief Executive Officer,
a committee of the Board duly designated and whose powers and authority include
the power to call meetings, or by the holders of 50% or more of the shares
entitled to vote at the proposed special meeting.
If the proposal is approved, Article Eight of our Articles of
Incorporation attached as Appendix A would be amended. We urge each stockholder
to read carefully Article Eight of our new Amended and Restated Articles of
Incorporation before voting on this proposal.
Our existing Articles provide that special meetings of stockholders may be
called by the Board of Directors, the Chairman of the Board, the President, a
committee of the Board duly designated and whose powers and authority include
the power to call meetings, or by the holders of at least 30% or more of the
shares entitled to vote at the proposed special meeting. The proposal would
incorporate the foregoing provisions into our amended Articles of Incorporation,
changing the right of shareholders to call a special meeting, unless they hold
at least 50%
9
of the outstanding shares entitled to vote at the proposed special meeting.
The Board believes that the proposal would provide for the orderly conduct
of all company affairs at special meetings of shareholders. If the proposal is
approved, a shareholder could not force shareholder consideration of a proposal
over the opposition of the Board, unless the shareholder held at least 50% of
the outstanding shares entitled to vote at the proposed special meeting. The
proposal may have the effect of impeding or discouraging efforts by potential
bidders to obtain control of the company.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE ARTICLES OF INCORPORATION TO PROVIDE FOR LIMITATIONS ON THE
CALLING OF SPECIAL MEETINGS.
PROPOSAL 6 - APPROVAL TO INCREASE THE AUTHORIZED
NUMBER OF SHARES OF CAPITAL STOCK
The Board of Directors has determined that it is in the best interests of
Eagle and its shareholders to amend the Articles to increase the number of
authorized shares of common stock from 100,000,000 to 200,000,000 shares. The
Board of Directors believes that it is in the best interests of Eagle and its
shareholders to increase the number of authorized but unissued shares of common
stock in order to have additional shares available to meet our future business
needs as they arise. As of November 13, 2001, 60,265,000 shares of common stock
were outstanding. In addition, we have reserved up to approximately 4,397,667
shares of Common Stock for issuance upon the net exercise of outstanding
warrants, and 416,474 shares of common stock for issuance pursuant to the 1996
Employee Stock Option Plan. Among other things, the increase will make available
shares of common stock for future activities that are consistent with our growth
strategy, including, without limitation, completing financings, establishing
strategic relationships with corporate partners, acquiring or investing in
complementary businesses or products, providing equity incentives to employees,
officers or directors, or effecting stock splits or dividends. We have no
current plans to issue any of the additional authorized shares of common stock.
POSSIBLE EFFECTS OF THE PROPOSED AMENDMENT
If the shareholders approve the proposed Amendment, the Board of Directors
may cause the issuance of additional shares of common stock without further vote
of the shareholders, except as provided under Texas corporate law or under the
rules of The American Stock Exchange (or any other exchange on which shares of
common stock are then listed). Current holders of common stock have no
preemptive rights, which means that current shareholders do not have a prior
right to purchase any new issue of common stock in order to maintain their
current ownership. The issuance of additional shares of common stock would
decrease the proportionate equity interest of our current shareholders and,
depending upon the price paid for such additional shares, could result in
dilution to our current shareholders.
The proposed Amendment could, under certain circumstances, have an
anti-takeover effect, although this is not the intention of the company. For
example, the substantial increase in the number of authorized shares of common
stock could help management frustrate efforts of shareholders seeking to remove
management and could have the effect of limiting shareholders participation in
transactions such as mergers or tender offers, regardless of whether those
transactions are favored by incumbent management. In addition, if the Amendment
is approved, the Board of Directors will have the ability to issue shares
privately in transactions that could frustrate proposed mergers, tender offers
or other transactions, even if those transactions are at substantial market
premiums and are favored by a majority of the independent shareholders. Such an
issuance of shares of common stock would increase the number of outstanding
shares, thereby possibly diluting the interest of a party attempting to obtain
control of the company. Although we have no current plans to issue any of the
additional authorized shares of common stock for such purposes, if the
shareholders approve the Amendment, more capital stock will be available for
such purposes than is currently available.
10
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK.
PROPOSAL 7 - RATIFY THE ELECTION OF MCMANUS & CO., P.C.
The Board of Directors would like the shareholders to ratify the
appointment of McManus & Co., P.C., as independent auditors for the fiscal year
ending August 31, 2002. The engagement of McManus & Co., P.C., for audit
services has been approved by the Board of Directors and audit committee.
A representative of McManus & Co., P.C., our principal accountants for the
current fiscal year and the most recently completed fiscal year, is expected to
be present at the Annual Meeting, will have the opportunity to make a statement,
and will be available to respond to appropriate questions.
In the event the shareholders do not ratify the appointment of McManus &
Co., P.C., as independent auditors for the fiscal year ending August 31, 2002,
the Board of Directors will consider the adverse vote as direction to select
other auditors for the following year. However, because of the difficulty in
making any substitution of auditors so long after the beginning of the current
year, it is contemplated that the appointment for the current fiscal year will
be permitted to stand unless the Board finds other good reason for making a
change.
AUDIT FEES
The aggregate fees billed by McManus & Co., P.C. for professional services
rendered for the audit of our annual financial statements for the fiscal year
ended August 31, 2001, and for the reviews of the financial statements included
in our quarterly reports on Form 10-QSB for that fiscal year were $ 88,050.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES AND ALL OTHER FEES
McManus & Co., P.C. rendered no other services, including professional
services to us for information technology services relating to financial
information systems design and implementation, for the fiscal year ended August
31, 2001.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" THE RATIFICATION OF
THE APPOINTMENT OF MCMANUS & CO., P.C., AS INDEPENDENT AUDITORS FOR THE
FISCAL YEAR ENDING AUGUST 31, 2002.
AUDIT COMMITTEE REPORT
In accordance with its written charter adopted by the Board of Directors,
the Audit Committee assists the Board in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing, and
financial reporting practices of the company. The Audit Committee recommends to
the Board of Directors, subject to shareholder approval, the selection of the
company's independent accountants. The Audit Committee is comprised of Messrs.
A.L. Clifford, Glenn Allan Goerke and Raymond Harrell. Messrs. Goerke and
Harrell are independent directors, as defined by The American Stock Exchange's
listing standards. Mr. Clifford is not an independent director, as defined by
The American Stock Exchange's listing standards.
Management is responsible for the company's internal controls. The
independent auditors for the company, McManus & Co., P.C. ("McManus"), are
responsible for performing an independent audit of the company's consolidated
financial statements in accordance with generally accepted auditing standards
and to issue a report thereon. The Audit Committee has general oversight
responsibility with respect to financial reporting, and reviews the results and
scope of the audit and other services provided by McManus.
The Audit Committee members are not professional accountants or auditors,
and their functions are not intended to duplicate or to certify the activities
of management and McManus, nor can the Audit Committee certify that McManus is
"independent" under applicable rules. The Audit Committee serves a board-level
oversight role, in which it provides advice, counsel, and direction to
management and the auditors on the basis of the information it receives,
discussions with management and the auditors and the experience of the Audit
Committee members in business, financial, and accounting matters.
11
In this context, the Audit Committee has met and held discussions with
management and McManus. Management represented to the Audit Committee that the
company's consolidated financial statements were prepared in accordance with
generally accepted accounting principles, and the Audit Committee has reviewed
and discussed the consolidated financial statements with management and McManus.
The Audit Committee discussed with McManus matters required to be discussed by
Statement on Auditing Standards No. 61 (Communication with Audit Committees).
McManus also provided to the Audit Committee the written disclosures
required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Audit Committee discussed with
McManus their independence.
Based upon the Audit Committee's discussion with management and McManus
and the Audit Committee's review of the representations of management and the
report of McManus to the Audit Committee, the Audit Committee recommended that
the Board of Directors include the company's audited consolidated financial
statements in the Eagle Wireless International, Inc. Annual Report on Form
10-KSB for the year ended August 31, 2001 filed with the Securities and Exchange
Commission.
Submitted by the Audit Committee of the Board of Directors of Eagle Wireless
International, Inc.:
A.L. Clifford, Glenn Allan Goerke and Raymond Harrell
PROPOSAL 8 - AMENDMENT OF STOCK OPTION PLAN
Our Board has adopted, subject to shareholder approval, an amendment to
our 1996 Stock Option Plan (the "Plan") to increase the number of shares of
common stock reserved for issuance under the Plan from 400,000 to 1,000,000
shares. The Board believes that increasing the number of shares of common stock
reserved for issuance under the Plan is necessary to ensure that a sufficient
reserve of common stock remains available for issuance to allow us to continue
to utilize equity incentives to attract and retain the services of key
individuals essential to our long-term growth and financial success. We rely on
equity incentives in the form of stock option grants in order to attract and
retain key employees and believe that such equity incentives are necessary for
us to remain competitive in the marketplace for executive talent and other key
employees. Option grants made to newly-hired and continuing employees will be
based on competitive market conditions, experience, and individual performance.
We have issued options to purchase 416,474 shares of common stock under the
current Plan, 60,350 have expired as of August 31, 2001 and have been returned
to the plan and 43,876 are available for issuance as of November 20, 2001.
The following is a summary of the principal features of the Plan, and does
not purport to be a complete description of the Plan. Any stockholder who wishes
to obtain a copy of the actual plan document may do so upon written request to
Eagle Wireless International, Inc., 101 Courageous Drive, Houston, Texas 77573,
Attention: Corporate Secretary.
ELIGIBILITY. The Plan is open to key employees and executive officers of
the company and its affiliates. As of November 20, 2001, 20 officers, and
approximately 234 other employees were eligible for participation in the Plan.
CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The Plan will not affect our
right to authorize adjustments, recapitalizations, reorganizations, or other
changes in our capital structure. In the event of an adjustment,
recapitalization, or reorganization, the award shall be adjusted accordingly. In
the event of a merger, consolidation, or liquidation, the eligible person will
be eligible to receive a like number of shares of stock in the new entity that
he or she would have been entitled to if, immediately prior to the merger, he or
she had exercised the option. The Board may waive any limitations imposed under
the Plan so that all options are immediately exercisable. All outstanding
options may be canceled by the Board upon written notice to the eligible person
and by granting a period in which the options may be exercised.
OPTIONS AND OPTION PRICE. The exercise price of incentive options shall
not be less than the greater of (a) 100% of fair market value on the date of
grant, or (b) the aggregate par value of the shares of stock on the date of
grant. Our Compensation Committee, at its option, may provide for a price
greater than 100% of fair market value. The price for 10% or more shareholders
shall be not less than 110% of fair market value.
12
DURATION. No option may be exercisable after the period of ten years. In
the case of a 10% or more shareholder, no incentive option may be exercisable
after the expiration of five years.
AMOUNT EXERCISABLE. In the event an eligible person exercises incentive
options during the calendar year whose aggregate fair market value exceeds
$100,000, the exercise of options over $100,000 will be considered nonqualified
stock options.
EXERCISE OF OPTIONS. Options may be exercised by written notice to the
company with cash or certified check; or, if approved in advance by the
Compensation Committee, common stock at its fair market value on the date of
exercise.
AMENDMENT OR TERMINATION OF THE PLAN. The Board, acting by a majority of
its members (exclusive of Board members who are not eligible to be appointed to
the Compensation Committee) without further action on the part of the
shareholders, may alter, amend, or suspend the Plan or any option granted or may
at any time terminate the Plan; provided, however, that the Board may not: (a)
change the total number of shares of common stock available for options under
the Plan; (b) extend the duration of any options; (c) increase the maximum term
of any options; (d) decrease the option price or otherwise materially increase
the benefits accruing to participants under the Plan; or (e) materially modify
the eligibility requirements of the plan.
FEDERAL TAX CONSEQUENCES. The following is a brief summary of the tax
consequences of the grant and exercise of stock options under the federal income
tax laws. This summary does not, among other things, purport to describe state
or local tax consequences or to describe all federal income tax consequences.
INCENTIVE STOCK OPTIONS (OR ISOS). Recipients of ISOs generally are not
subject to income tax at the time the option is granted or exercised. However,
upon the exercise of any ISO, any excess of the fair market value of shares
received over the exercise price may be subject to the alternative minimum tax.
Upon disposition of any shares obtained through the exercise of an ISO,
long-term capital gain or loss will be recognized in an amount equal to the
difference between the sales price and the aggregate exercise price, provided
that the participant has held the shares for at least one year from the date the
ISO was exercised and at least two years from the date the ISO was granted. If
the participant disposes of the shares within that time period (a "Disqualifying
Disposition"), the participant will recognize ordinary income to the extent of
the difference between the exercise price and the lesser of the fair market
value on the date the ISO is exercised or the amount realized on the
Disqualifying Disposition. Any remaining gain or loss is treated as a short-term
or long-term capital gain or loss, depending on the period the shares were held
by the participant. We are not entitled to any tax deduction upon either the
exercise of any such ISO or upon any subsequent disposition of the shares
acquired pursuant to such exercise, except to the extent that the participant
recognizes ordinary income pursuant to a Disqualifying Disposition.
On November 20, 2001, the closing price of the common stock underlying the
grants made pursuant to the Plan, as reported by The American Stock Exchange was
$.80.
PLAN BENEFITS. We cannot now determine the exact number of options to be
granted in the future to any of our officers, directors, or employees. The
following table sets forth the number of stock options granted to our Chief
Executive Officer, our current executive officers as a group, our current
directors who are not executive officers as a group, each nominee for election
as a director, and all employees other than executive officers as a group.
13
NUMBER OF SHARES UNDERLYING
OPTIONS
---------------------------
H. Dean Cubley, Chief Executive Officer and President 5,256
All current executive officers as a group (5 persons) 14,461
All current directors who are not executive
officers as a group (3 persons) 0
Christopher W. Futer 9,205
A.L. Clifford 0
Glenn Allan Goerke 0
Shannon McLeroy 0
Raymond G. Harrell III 0
Manny M. Carter 0
Nancy Main 0
All employees other than executive officers 402,013
SHAREHOLDER APPROVAL
The affirmative vote of a majority of those shares present in person, or
represented by proxy, and cast either affirmatively or negatively at the Annual
Meeting is required for approval of the amendment to the Plan. Should such
shareholder approval not be obtained, then the 600,000 share increase to the
share reserve under the Plan will not be implemented. The Plan will, however,
continue in effect, and option grants may continue to be made under the Plan
until all the shares available for issuance under the Plan have been issued
pursuant to such option grants or until the Plan's earlier expiration or
termination by the Board.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" THE INCREASE IN THE
NUMBER OF SHARES UNDERLYING THE STOCK OPTION PLAN.
14
EXECUTIVE OFFICERS
Our directors and executive officers are as follows:
NAME AGE OFFICE HELD
---- --- -----------
H. Dean Cubley 60 Chairman of the Board of
Directors and Chief Executive Officer
Christopher W. Futer 63 Executive Vice President and
Director
Shannon D. McLeroy 37 President / Secretary of
ClearWorks and Director
Manny M. Carter 61 President, Chief Operating
Officer, and Director
Richard Royall 55 Chief Financial Officer
A.L. Clifford 56 Director
Glenn Allan Goerke 70 Director
Raymond G. Harrell III 39 Director
The following biographical information is for Mr. Royall (please see
Proposal 2 for biographical information about our director nominees):
RICHARD R. ROYALL has served as chief financial officer since March 1996.
Mr. Royall has been a certified public accountant since 1971. From 1971 to 1976,
Mr. Royall was employed with Haskins & Sells, Laventhol & Horwath (a partner
from 1976 to 1986), and Bracken, Krutilek & Royall (1986). In 1986, Mr. Royall
practiced accounting as a sole proprietor. Since 1987, Mr. Royall has been a
partner in Royall & Fleschler, certified public accountants. In addition, Mr.
Royall serves as financial officer and director of companies operating in the
finance and chemical industries, including Fleetclean Systems, Inc., none of
which are affiliated with Eagle.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors, executive
officers, and the persons who beneficially own more than ten percent of our
common stock, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Copies of all filed reports are required to
be furnished to us. Based solely on the reports received by us and on the
representations of the reporting persons, we believe that these persons have
complied with all applicable filing requirements during the fiscal year ended
August 31, 2001.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of November 13, 2001, 60,265,000 shares of our common stock were
outstanding. The following table sets forth, as of November 13, 2001, certain
information with respect to shares beneficially owned by: (a) each person who is
known by us to be the beneficial owner of more than 5% of our outstanding shares
of common stock, (b) each of our directors, (c) the executive officers named in
the Summary Compensation Table below, and (c) all current directors and
executive officers as a group.
15
Beneficial ownership has been determined in accordance with Rule 13d-3
under the Exchange Act. Under this rule, certain shares may be deemed to be
beneficially owned by more than one person (if, for example, persons share the
power to vote or the power to dispose of the shares). In addition, shares are
deemed to be beneficially owned by a person if the person has the right to
acquire shares (for example, upon exercise of an option or warrant) within sixty
days of the date as of which the information is provided. In computing the
percentage ownership of any person, the amount of shares is deemed to include
the amount of shares beneficially owned by such person by reason of such
acquisition rights. As a result, the percentage of outstanding shares of any
person as shown in the following table does not necessarily reflect the person's
actual voting power at any particular date.
To our knowledge, except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the persons named in the table
have sole voting and investment power with respect to all shares of common stock
shown as beneficially owned by them. Unless otherwise indicated, the business
address of the individuals listed is Eagle Wireless International, Inc., 101
Courageous Drive, Houston, Texas 77573.
SHARES BENEFICIAL OWNED AS OF NOVEMBER 13, 2001
-----------------------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- ---------------- ---------------- ----------------
H. Dean Cubley 5,256(1) Less than 1%
Christopher W. Futer 11,872 (2) Less than 1%
A.L. Clifford 419,667 (3) Less than 1%
Glenn Allan Goerke 32,000 (4) Less than 1%
Raymond G. Harrell III 127,000 (5) Less than 1%
Shannon McLeroy 1,922,000 (6) 3.1%
Manny M. Carter -- --
Michael T. McClere 3,428,920 (7) 5.6%
All current directors and executive
officers as a group (7 persons) 2,517,795 (8) 4.1%
- -------------------
(1) Consists of an option to purchase 3,333 shares of common stock at an
exercise price of $1.50 per share and an option to purchase 1,923 shares
of common stock at an exercise price of $2.00 per share.
(2) Includes an option to purchase 5,000 shares of common stock an exercise
price of $1.25 per share, an option to purchase 2,667 shares of common
stock an exercise price of $1.50 per share and an option to purchase 1,538
shares of common stock at an exercise price of $2.00 per share. The Futer
Family Trust owns 1,076,000 shares of common stock. Mr. Futer disclaims
beneficial ownership of these shares, as well as voting and disposition
power of the shares.
(3) Includes 141,000 shares, which are held in the name of The Clifford Family
Trust, and 61,667 shares held by Mr. Clifford's wife.
16
(4) Includes options to purchase 25,000 shares of common stock at an exercise
price of $2.00 per share. Dr. Goerke's business address is 911 Live Oak
Lane, Seabrook, Texas 77586.
(5) Mr. Harrell's business address is 4335 Alysheba Lane, Friendswood, Texas
77546.
(6) Includes a warrant to purchase 240,000 shares of common stock an exercise
price of $3.75 per share and a warrant to purchase 240,000 shares of
common stock at an exercise price of $7.50 per share.
(7) Mr. McClere's information is based solely on the Schedule 13G filed by Mr.
McClere on June 5, 2001. Mr. McClere's ownership includes 330,000 shares
of common stock held by the Rachel McClere 1998 Trust (the "Trust"), of
which Michael T. McClere is the sole trustee, and 1,609,961 shares of
common stock owned by Tech Technologies Services LLC, a Texas limited
liability company ("TTS"), of which Mr. McClere is the General Manager and
owns a 90% member interest. The aggregate number of shares of common stock
beneficially owned by Mr. McClere includes: (a) Class A warrants held by
the Trust to purchase 40,000 shares of common stock, and Class A warrants
held by TTS to purchase 176,000 shares of common stock, (b) Class B
warrants held by Mr. McClere to purchase 210,000 shares of common stock,
Class B warrants held by the Trust to purchase 40,000 shares of common
stock, and Class B warrants held by TTS to purchase 192,000 shares of
common stock, (c) 312,500 shares of common stock held by the Trust, and
(d) 1,241,961 shares of common stock owned by TTS.
(8) Includes options to purchase 39,461 shares of common stock, and warrants
to purchase 480,000 shares.
EXECUTIVE COMPENSATION
The following table contains compensation data for H. Dean Cubley, our
Chief Executive Officer.
SUMMARY COMPENSATION TABLE
NAME AND
PRINCIPAL ANNUAL LONG TERM ALL OTHER
POSITIONS YEAR COMPENSATION COMPENSATION COMPENSATION ($)
AWARDS
SECURITIES
UNDERLYING
SALARY ($) OPTIONS (#)
H. Dean Cubley 2001 216,666 -- --
2000 100,000 1,923 --
1999 100,000 3,333 --
OPTIONS, WARRANTS, AND STOCK APPRECIATION RIGHTS
Our 1996 Stock Option Plan provides for the issuance of an aggregate of
1,000,000 shares of common stock upon the exercise of options granted under the
Plan, provided Proposal 8 is passed at this annual meeting. As of August 31,
2001, options to purchase an aggregate of 356,124 shares of common stock were
outstanding under the plan. No options under the plan were issued to any named
executive officers in fiscal 2001. Mr. Futer who was issued an option to
purchase 1,538 shares of common stock at an exercise price of $2.00 per share,
was the only director to receive an option pursuant to the plan in fiscal 2001.
The following table sets forth information concerning option exercises
during the fiscal year ended August 31, 2001 and option holdings as of August
31, 2001 with respect to our named executive officers. No stock appreciation
rights were outstanding at the end of the fiscal year.
17
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
VALUE OF UNEXERCISED
SHARES ACQUIRED ON VALUE NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY
NAME EXERCISE (#) REALIZED ($) UNEXERCISED OPTIONS AT FY-END (#) OPTIONS AT FY-END ($)
- ---- -------------------- -------------- ------------------------------------ ----------------------
Exercisable Unexercisable Exercisable Unexercisable
H. Dean Cubley -- -- 5,256 -- -- --
The fair market value of our common stock at August 31, 2001 was $.85 per
share. Since the exercise price of the options listed above are between $1.50
and $2.00 per share, the options were not in-the-money as of the end of our
fiscal year, and no value is set forth in the above table under Securities and
Exchange Commission rules.
COMPENSATION OF DIRECTORS
Directors receive $2,000 cash and 2,000 shares of common stock for every
meeting that they attend in person and $1,000 cash and 1,000 shares of common
stock for every meeting that they participate in via teleconference.
RELATED PARTY TRANSACTIONS
Certain of our principal stockholders, or their affiliates, including
Messrs. Futer and Clifford, are also principal stockholders of Link Two
Communications, which was one of Eagle's principal customers and is now a
subsidiary of Eagle due to Eagle's merger with ClearWorks. Mr. Clifford is also
the chairman, and chief executive officer of Link Two Communications and Dr.
Cubley is a director of Link Two Communications. During the last two fiscal
years, Link Two Communications issued Eagle an aggregate of 240,000 shares of
its common stock as a result of accrued finance charges on its outstanding
account payable to Eagle. In October 1999, Link Two Communications refinanced
this account payable to Eagle through the issuance of notes maturing in
September 2001, which amount equaled $8,655,126 at August 31, 2000. As a result
of ClearWorks acquiring control of Link Two Communications in November 2000,
ClearWorks discharged this Link Two Communications indebtedness in full through
the issuance of 2,856,000 shares of its common stock to Eagle.
On April 1, 2000, the Company entered into a one-year agreement with
Synchton Incorporated, an entity controlled by Dr. Cubley's son, whereby
Synchton will provide professional business services to Eagle. As compensation
for these services, we will pay Synchton $10,000 per month and will issue
100,000 stock purchase warrants. These warrants shall be issued in 25,000
increments on the first day of each quarter of the agreement with an exercise
price equal to the closing price of our common stock on the day prior to the day
of issuance. Additionally, these warrants are not exercisable until six months
after issuance and expire three years after said issuance. Although this
agreement will automatically renew on an annual basis, it is terminable by prior
to the annual renewal by providing Synchton, Inc. with ninety days advance
written notice.
STOCKHOLDER PROPOSALS FOR 2002 ANNUAL MEETING
Under Rule 14a-8 of the Exchange Act, proposals that shareholders intend
to have included in our proxy statement and form of proxy for our next annual
meeting must be received no later than August 31, 2002. Moreover, with respect
to any proposal by a shareholder not seeking to have the proposal included in
the proxy statement but seeking to have the proposal considered at our next
annual meeting, pursuant to our Bylaws, such shareholder must provide written
notice of such proposal to our Secretary at our principal executive offices by
October 16, 2002. With respect to a proposal not to be included in the proxy
statement, in the event notice is not timely given, and the proposal is
permitted at the annual meeting, the persons who are appointed as proxies may
exercise their discretionary voting authority with respect to such proposals, if
the proposal is considered at our next annual meeting, even if the shareholders
have not been advised of the proposal. In addition, shareholders must comply in
all respects with the rules and regulations of the Securities and Exchange
Commission then in effect and the procedural requirements of our Bylaws.
18
ANNUAL REPORT
We have provided a copy of our Annual Report on Form 10-KSB with this
proxy statement. We will provide exhibits to the Annual Report on Form 10-KSB
upon request. Please send any such requests to Eagle Wireless International,
Inc., 101 Courageous Drive, Houston, Texas 77573, Attention: Investor Relations.
OTHER MATTERS
The Board knows of no other business to come before the Annual Meeting.
However, if any other matters are properly brought before the Annual Meeting,
the persons named in the accompanying form of proxy or their substitutes will
vote in their discretion on those matters.
By Order of the Board of Directors
H. DEAN CUBLEY, Chief Executive Officer
December 28, 2001
Houston, Texas
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE, AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. YOU
MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF YOU DECIDE TO
ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU MAY DO SO
AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL GREATLY
FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
19
Appendix A
ARTICLE I
The name of the corporation is Eagle Broadband, Inc.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The purpose or purposes for which the Corporation is organized are:
(a) To manufacture, repair, buy, sell, service, install, deal in, and to
engage in, conduct and carry on the business of manufacturing, repairing,
buying, selling, servicing, installing, importing, exporting, and dealing goods,
wares and merchandise of every class and description throughout the world.
(b) To contract for erection, construction, repair, or improvement of any
building, structure or improvement, public or private, and to erect, construct,
repair or improve same or any part thereof, and to acquire, own and prepare for
use any materials for said purposes.
(c) To do any or all things necessary or incident to the business of the
Corporation and to exercise and possess the powers herein set forth as fully as
natural persons, whether as principal, agent or otherwise.
(d) To engage in the transaction of any and all lawful business for which
corporations may be incorporated under the Act.
ARTICLE IV
This total number of shares of stock which the Corporation shall have
authority to issue is 200,000,000 shares of common stock, par value $.001 per
share ("Common Stock"), and 5,000,000 shares of preferred stock, par value $.001
per share ("Preferred Stock").
Shares of Preferred Stock of the Corporation may be issued from time to
time in one or more classes or series, each of which class or series shall have
such distinctive designation or title as shall be determined by the Board of
Directors of the Corporation ("Board of Directors") prior to the issuance of any
shares thereof. Each such class or series of Preferred Stock shall have such
voting powers, full or limited, or no voting powers, and such preferences and
relative, participating, optional or other special rights and such
qualifications, limitations or restrictions thereof, shall be stated in such
resolution or resolutions providing for the issue of such class or series of
Preferred Stock as may be adopted from time to time by the Board of Directors
prior to the issuance of any shares thereof pursuant to the authority hereby
expressly vested in it, all in accordance with the laws of the State of Texas.
Subject to all of the rights of the Preferred Stock or any series thereof
described in appropriate articles of incorporation, the holders of the Common
Stock shall be entitled to receive, when, as, and if declared by the Board of
Directors, out of funds legally available therefore, the dividends payable in
cash, common stock, or otherwise.
ARTICLE V
The Corporation will not commence business until it has received for the
issuance of its shares consideration of the value of One Thousand Dollars
($1,000.00), consisting of money, labor done, or property actually received,
which sum is not less than One Thousand Dollars ($1,000.00).
ARTICLE VI
The office address of the Corporation's registered office is 101
Courageous Drive, League City, Texas 77573, and the name of the registered agent
as such address is H. Dean Cubley.
ARTICLE VII
SECTION 1. BOARD OF DIRECTORS. The number of directors constituting the
Board of Directors of the Corporation is three (3) who need not be residents of
the State of Texas or shareholders of the Corporation.
SECTION 2. NAMES AND ADDRESS. The names and addresses of the persons who
are elected to serve as directors until their successors have been elected and
qualified are:
NAME ADDRESS
- ---- -------
H. Dean Cubley 101 Courageous Drive, League City, Texas 77573
Christopher W. Futer 101 Courageous Drive, League City, Texas 77573
A.L. Clifford 101 Courageous Drive, League City, Texas 77573
Glenn Allan Goerke 101 Courageous Drive, League City, Texas 77573
Shannon McLeroy 101 Courageous Drive, League City, Texas 77573
Manny M. Carter 101 Courageous Drive, League City, Texas 77573
Nancy Main 101 Courageous Drive, League City, Texas 77573
SECTION 3. INCREASE OR DECREASE OF DIRECTORS. The number of directors may
be increased or decreased from time to time by amendment to the Bylaws; but no
decrease shall have the effect of shortening the term of any incumbent director,
and the number of directors shall not be decreased to less than two (2)
directors. In the absence of a Bylaw fixing the number of directors, the number
shall be three (3).
SECTION 4. CLASSIFICATION. The Board of Directors shall be divided into
three (3) classes as nearly equal in number as possible (each, a "Class"), known
as Class I, Class II and Class III. Directors of Class I first chosen at the
annual meeting of stockholders held in 2001 shall hold office until the first
annual meeting of the stockholders following their election, such annual meeting
of the stockholders to be held in 2002; directors of Class II first chosen at
the annual meeting of stockholders held in 2001 shall hold office until the
second annual meeting following their election, such annual meeting of the
stockholders to be held in 2003; and directors of Class III first chosen at the
annual meeting of stockholders held in 2001 shall hold office until the third
annual meeting following their election, such annual meeting of the stockholders
to be held in 2004. At each annual meeting of stockholders beginning with the
annual meeting of stockholders held in 2002, directors chosen to succeed those
whose terms then expire shall be elected for a term of office expiring at the
third succeeding annual meeting of stockholders after their election. When the
number of directors is changed, any newly created directorships or any decreases
in directorships shall be so apportioned among the classes as to make all
classes as nearly equal in number as possible. When the number of directors is
increased by the Board of Directors and the resultant vacancies are filled by
the Board of Directors, such additional directors shall serve only until the
next annual meeting of stockholders, at which time they shall be subject to
election and classification by the stockholders. In the event that any director
is elected by the Board of Directors to fill a vacancy which occurs as a result
of the death, resignation, or removal of another director, such director shall
hold office until the annual meeting of stockholders at which the director who
died, resigned, or was removed would have been required, in the regular order of
business, to stand for re-election, even though such term may thereby extend
beyond the next annual meeting of stockholders. Each director who is elected as
provided in this Article shall serve until his or her successor is duly elected
and qualifies.
ARTICLE VIII
Preemptive rights shall not be permitted.
ARTICLE IX
Provisions for the regulations of the internal affairs of the Corporation
are:
SECTION 1. VOTING RIGHTS, VOTING FOR DIRECTORS. Upon each matter submitted
to a vote at every meeting of the shareholders of the Corporation, every holder
of common stock shall be entitled to one (1) vote for each share of common stock
standing in his name on the books of the Corporation. At each election for
directors every shareholder entitled to vote at such election shall have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected and for whose election he has
a right to vote. It is expressly prohibited for any shareholder to cumulate his
votes in any election of directors.
SECTION 2. BYLAWS. The initial Bylaws of the Corporation shall be adopted
by its Board of Directors. The Board of Directors shall have the power to alter,
amend or repeal the Bylaws from time to time, subject to the reserved power of
the shareholders at any meeting of the shareholders to alter, amend or repeal
any provision of the Bylaws or to adopt new Bylaws.
ARTICLE X
No director of the Corporation shall be liable to the Corporation or its
shareholders or members for monetary damages for any act or omission in such
director's capacity as a director, except for (i) a breach of such director's
duty of loyalty to the Corporation or its shareholders or members; (ii) an act
of omission not in god faith that constitutes a breach of duty of the director
to the Corporation, or an act or omission that involves intentional misconduct
or a knowing violation of the law; (iii) a transaction from which a director
received an improper benefit, whether or not the benefit resulted from an action
taken within the scope of the director's office; or (iv) and act or omission for
which the liability of a director is expressly provided by an applicable
statute.
ARTICLE XI
The Corporation shall indemnify all current and former directors and
officers of the Corporation to the fullest extent of the applicable law,
including, without limitation, Article 2.02-1 of the Texas Business Corporation
Act.
ARTICLE XII
Any action required by the Texas Business Corporation Act, as amended, to
be taken at any annual or special meeting of shareholders of the Corporation, or
any action which may be taken at any annual or special meeting of shareholders
of the Corporation, may be taken without a meeting, without prior notice, and
without a vote, if a consent or consents in writing, setting forth the action so
taken, shall be signed by the holder or holders of shares having not less than
the minimum number of votes that would be necessary to take such action at a
meeting at which the holders of all shares entitled to vote on the action were
present and voted.
The vote of shareholders required for approval of any amendment of the
articles of incorporation of the corporation for which the Texas Business
Corporation Act requires a shareholder vote, shall be (in lieu of any greater
vote required by the Texas Business Corporation Act) the affirmative vote of the
holders of a majority of the outstanding shares entitled to vote thereon, unless
any class or series of shares is entitled to vote as a class thereon, in which
event the vote outstanding shares within each class or series of shares entitled
to vote thereon as a class and at least a majority of the outstanding shares
otherwise entitled to vote thereon.
ARTICLE XIII
Special meetings of the stockholders of the Corporation for any purpose or
purposes may be called at any time only by the Board of Directors or a committee
thereof, the Chairman of the Board, the Chief Executive Officer, or by the
holders of at least 50% of all the shares entitled to vote at the proposed
special meeting.
ARTICLE XIV
Without necessity for action by its shareholders, the Corporation may
purchase, directly or indirectly, its own shares to the extent of the aggregate
of unrestricted capital surplus available therefore and unrestricted reduction
surplus available therefor.
ARTICLE XV
SECTION 1. The holders of at least a majority of the shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at any meeting of the shareholders of the Corporation.
SECTION 2. No contract or other transaction between the Corporation and
one or more of its directors, officers or security holders or between the
Corporation and another corporation, partnership, joint venture, trust or other
enterprise of which one or more of the Corporation's directors, officers or
security holders are security holders, members, officers, directors or employees
or in which they are otherwise interested, directly or indirectly, shall be
invalid solely because of such relationship or solely because such a director,
officer or security holder is present or participates in any meeting of the
Board of Directors or Committee thereof authorizing the contract or other
transaction or solely because his or their votes are counted for such purposes
if (a) the material facts as to his relationship or interest an as to the
contract or other transaction are known or disclosed to the Board of Directors
or committee thereof, and such board or committee in good faith authorizes the
contract or other transaction by the affirmative vote of a majority of the
disinterested directors even though the disinterested directors are less than a
quorum; or (b) the material facts as to his or their relationship or interest
and as to the contract or other transaction are known or disclosed to the
shareholders entitled to vote thereon, and the contract or other transaction is
approved in good faith by a vote of the shareholders; or (c) the contract or
other transaction is fair as to the Corporation as of the time the Corporation
enters into such contract or other transaction.
EAGLE WIRELESS INTERNATIONAL, INC.
___________________________________________
H. Dean Cubley, Chief Executive Officer
EAGLE WIRELESS INTERNATIONAL, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF EAGLE WIRELESS INTERNATIONAL, INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 13, 2002
The undersigned shareholder of Eagle Wireless International, Inc. (the
"Company") hereby appoints H. Dean Cubley or Manny M. Carter, or either of them,
proxies for the undersigned, each with full power of substitution, to represent
and to vote as specified in this Proxy all the shares of common stock of the
Company which the undersigned would be entitled to vote at the Annual Meeting of
Shareholders of the Company to be held at 2500 South Shore Blvd., League City,
Texas 77573, on Wednesday, February 13, 2002 at 10:00 a.m. central standard
time, and any and all adjournments or postponements thereof, with all of the
powers which the undersigned would possess if personally present. The
undersigned shareholder hereby revokes any proxy or proxies heretofore executed
for such matters.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER AS DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR PROPOSALS 1, 2, 3, 4, 5, 6, 7, 8 AND IN THE DISCRETION OF THE
PROXIES AS TO ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING. THE
UNDERSIGNED SHAREHOLDER MAY REVOKE THIS PROXY AT ANY TIME BEFORE IT IS VOTED BY
DELIVERING TO THE CORPORATE SECRETARY OF THE COMPANY EITHER A WRITTEN REVOCATION
OF THE PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR BY APPEARING AT
THE ANNUAL MEETING AND VOTING IN PERSON.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2, 3, 4, 5, 6, 7 AND
8.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED
RETURN ENVELOPE
For Against Abstain
1. To approve an amendment to the Company's
Articles of Incorporation to provided for
a classified Board of Directors. [ ] [ ] [ ]
2. Election of Directors. If shareholders
approve Proposal 1, the nominees will
serve For all nominees except: staggered
terms of one, two, or three years. If
shareholders do not approve Proposal 1,
each nominee will be elected for a
one-year term.
Nominee for Class I Director For All Withheld All
(term to expire in 2002)
(i) Shannon McLeroy
(ii) Nancy Main [ ] [ ]
For all nominees except:
_____________________________
(write nominee's name)
Nominee for Class II Director (term to expire in 2003) For All Withheld All
(i) A.L. Clifford
(ii) Glenn Allan Goerke [ ] [ ]
For all nominees except:
_____________________________
(write nominee's name)
Nominees for Class III Directors (term to expire in 2004) For All Withheld All
(i) H. Dean Cubley
(ii) Christopher W. Futer [ ] [ ]
(iii) Manny M. Carter
For all nominees except:
_____________________________
(write nominee's name)
3. To approve an amendment to the Company's For Against Abstain
Articles of Incorporation to change the
name of the Company to "Eagle Broadband, Inc." [ ] [ ] [ ]
4. To approve an addition to the Company's For Against Abstain
Articles of Incorporation to change
the vote required to amend the Articles [ ] [ ] [ ]
in the future to 55%.
5. To approve an amendment to the Company's For Against Abstain
Articles of Incorporation to limit
the calling of special meetings of shareholders. [ ] [ ] [ ]
6. To approve an amendment to the Company's For Against Abstain
Articles of Incorporation to increase the
number of authorized shares of common stock [ ] [ ] [ ]
to 200,000,000 shares.
7. To ratify the appointment of McManus & For Against Abstain
Co., P.C. as the Company's independent
accountants for the fiscal year ending [ ] [ ] [ ]
August 31, 2002.
8. To approve an amendment to the Company's For Against Abstain
Stock Option Plan to increase the number
of shares authorized under the plan [ ] [ ] [ ]
to 1,000,000.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting, or any adjournment or
postponement thereof.
The undersigned hereby acknowledges receipt of the Notice of Meeting and Proxy
Statement.
DATED:______________________________ _____________________________________
[Signature]
_____________________________________
[Signature if jointly held]
_____________________________________
[Printed Name]
Please date and sign exactly as your name(s) is (are) shown on the share
certificate(s) to which the Proxy applies. When shares are held as
joint-tenants, both should sign. When signing as an executor, administrator,
trustee, guardian, attorney-in fact, or other fiduciary, please give full title
as such. When signing as a corporation, please sign in full corporate name by
President or other authorized officer. When signing as a partnership, please
sign in partnership name by an authorized person.