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
<Table>
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
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</Table>
EAGLE BROADBAND, 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 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
EAGLE BROADBAND, INC.
101 Courageous Drive
League City, TX 77573
December 29, 2002
To Our Shareholders:
You are cordially invited to attend the Annual Meting of Shareholders of Eagle
Broadband, Inc., which will be held at 10:00 a.m. May 8, 2003.
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,
Dr. H. Dean Cubley
Chairman
2
EAGLE BROADBAND, INC.
101 COURAGEOUS DRIVES, HOUSTON, TEXAS 77573
----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 8, 2003
----------
The Annual Meeting of Shareholders of Eagle Broadband, Inc., will be held at
2500 South Shore Blvd., League City, Texas 77573, at 10:00 a.m. May 8, 2003, 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 six (6) 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. 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 51% of the shares entitled to vote, as opposed to 66 2/3% of the
shares entitled to vote.
4. 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.
5. Approval of Temporary Empowerment of Board. To approve an amendment to
Eagle's Articles of Incorporation to empower the Board of Directors to take
any and all actions necessary without further vote to enable the company to
(a) comply with all current as well as any newly enacted SEC regulations
that may be enacted prior to the next annual meetings; (b) comply with all
current as well as any new American Stock Exchange requirements that may
become effective prior to the next annual meeting; (c) maintain its common
stock valuation in a range that will insure the continued listing of its
common stock on a national exchange and protect the common interests of all
of its stockholders
6. Ratification of Auditors. To ratify the selection of McManus & Co., P.C.,
as auditors for Eagle for the fiscal year ending August 31, 2003.
Shareholders of record at the close of business on record date (to be
determined) 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 29, 2002
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.
3
EAGLE BROADBAND, INC.
----------
PROXY STATEMENT
----------
ANNUAL MEETING OF SHAREHOLDERS
The Board of Directors of Eagle Broadband, 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. May 8, 2003, unless
adjourned or postponed. The Board is making this solicitation by mail, and Eagle
will pay all costs associated with this solicitation. When you see the term
"we," "our," or "Eagle," it refers to Eagle Broadband, 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. Each shareholder of record on the record date (to be determined)
is entitled to one vote for each share of common stock held by such shareholder
on said record date. 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 six (6) 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.
PROPOSAL 3. 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 51% 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.
4
PROPOSAL 4. Approval of Amendment of Special Meeting Rules. 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 5. Approval of the amendment to our Articles of Incorporation
to empower the Board of Directors to take any and all actions necessary without
further vote to enable the company to (a) comply with all current as well as any
newly enacted SEC regulations that may be enacted prior to the next annual
meetings; (b) comply with all current as well as any new American Stock Exchange
requirements that may become effective prior to the next annual meeting; (c)
maintain its common stock valuation in a range that will insure the continued
listing of its common stock on a national exchange and protect the common
interests of all of its stockholders This Proposal will include the empowerment
of the Board of Directors to amend our Articles of Incorporation and By-Laws to
change the par value of our shares, reduce or subdivide the number of
outstanding shares, and to authorize the continued buyback of our shares if in
the sole opinion of the Board of Directors such actions are necessary and
appropriate to protect shareholder value. This empowerment of the Board may be
terminated or modified upon the approval of a Proposal to modify or terminate at
our next 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 6. Ratification of the appointment of McManus & Co., P.C. as
our independent public accountants for the fiscal year ending August 31, 2003,
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. 1), FOR Proposal No. 2, 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 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 VII 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.
5
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 C. J. Reinhartsen and Lorne E. Persons, Jr., would hold office initially for
a term expiring at the 2003 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 2004 Annual Meeting; and a
third class of directors, initially consisting of Messrs. H. Dean Cubley, and
Christopher W. Futer, would hold office initially for a term expiring at the
2005 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 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
takeover attempt of Eagle. Because of the additional time required to change
control of the Board of Directors, the classified board proposal will tend to
deter takeover attempts. 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 a takeover 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. The proposed classification of the
Board of Directors is not being recommended in response to a currently 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.
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 as proposed consists of six (6) members. The
Board has nominated for election Messrs. H. Dean Cubley, Christopher W. Futer,
A. L. Clifford, Glenn Allan Goerke, C. J. Reinhartsen, and Lorne E. Persons, Jr.
The shares represented by the enclosed proxy will be voted for the election as
directors of the six (6) nominees named below to serve until the 2003 Annual
Meeting or until their successors have been duly elected and qualified. The six
(6) 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.
6
Director Nominees
DR. H. DEAN CUBLEY. 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 antenna systems 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 ten 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. Mr. Futer has served as a director of
Eagle since March 1996 and served as vice president of Eagle from 1996 to August
2002. 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.
A. L. CLIFFORD. 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. GLENN ALLAN GOERKE. 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.
C. J. (JIM) REINHARTSEN. Mr. Reinhartsen has recently been appointed to
fill a vacant director position. He served as President of the Clear Lake Area
Economic Development Foundation (CLAEDF) from 1993 to the present time. His
accomplishments at CLAEDF included initiating a regional coalition, subsequently
expanded to a national level, to support NASA and the aerospace industry and
initiating a successful strategy to diversify the economic profile of the Clear
Lake region. Prior to his association with CLAEDF, Mr. Reinhartsen was part of
the Grumman Aerospace management team and established a manufacturing presence
with energy companies the target market. This venture prospered and expanded to
$60 million in sales and employed 600 people. His knowledge and
7
long-term relationships with area educational institutions, the NASA Johnson
Space Center, manufacturing, marketing, and economic development bring valuable
knowledge to Eagle Broadband.
LORNE E. PERSONS, JR. Mr. Persons' nomination as a director has been
accepted by the Board to be included in the next election of directors. With
over 28 years experience in the insurance industry, Mr. Persons is president of
National Insurance Marketing Corporation, Aurora, Colorado, currently contracted
to National States Insurance Company as a regional sales and recruiting director
in a five-state area. He recruits and manages a sales force of 230 agents and
brokers that has proven to be the second largest producer of life insurance
sales within National States Insurance Company.
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:
<Table>
<Caption>
COMMITTEES
DIRECTOR Audit Compensation
----- ------------
A. L. Clifford X X
Glenn Allan Goerke X X
Nancy L. Main X* X*
C. J. (Jim) Reinhartsen X** X**
</Table>
- ----------
* Ms. Main served on the Audit and Compensation Committees until her resignation
in October 2002.
** Mr. Reinhartsen has served on the Audit and Compensation Committees since
December 2002.
The Audit Committee held seven (7) 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 seven (6) 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.
Compensation of Directors
Directors received $2,000 cash and 2,500 shares of common stock for
every meeting that they attended in person and $1,250 cash and 1,250 shares of
common stock for every meeting that they participated in via teleconference.
Beginning fiscal 2003, this compensation was increased to $2,000 cash and $2,500
in shares of common stock, and $1,000 cash and $1,250 in shares of common stock,
for meetings attended in person and via teleconference, respectively.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" THE ELECTION OF EACH
OF THE NOMINEES LISTED ABOVE.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of November 29, 2002, a total of 76,410,000 shares of our common
stock were outstanding. The following table sets forth, as of November 29, 2002,
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
8
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.
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 Broadband, Inc., 101
Courageous Drive, Houston, Texas 77573.
<Table>
<Caption>
SHARES BENEFICIAL OWNED AS OF NOVEMBER 29, 2002
-----------------------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
---------------- ---------------- ----------------
H. Dean Cubley 167,919(1) Less than 1%
Christopher W. Futer 45,323(2) Less than 1%
A. L. Clifford 464,872(3) Less than 1%
Glenn Allan Goerke 53,750(4) Less than 1%
Manny M. Carter 24,979 Less than 1%
C. J. Reinhartsen 0 Less than 1%
All current directors and executive
officers as a group (6 persons) 756,843(5) ____%
</Table>
- ----------
(1) Includes 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 378,945 shares of common stock. Mr. Futer
disclaims beneficial ownership of these shares, as well as voting and
disposition power of the shares.
(3) Includes 105,000 shares, which are held in the name of The Clifford
Family Trust, and 61,667 shares held by Mr. Clifford's wife.
(4) Includes options to purchase 25,000 shares of common stock at an
exercise price of $2.00 per share.
(5) Includes options to purchase 39,461 shares of common stock.
EXECUTIVE OFFICERS
Our directors and executive officers are as follows:
<Table>
<Caption>
NAME AGE OFFICE HELD
---- --- -----------
H. Dean Cubley 61 Chairman of the Board of Directors and Chief
Executive Officer
Christopher W. Futer 64 Director
</Table>
9
<Table>
Manny M. Carter 62 President, Chief Operating Officer, and
Director
Richard Royall 56 Chief Financial Officer
A. L. Clifford 57 Director
Glenn Allan Goerke 71 Director
C. J. Reinhartsen 60 Director
</Table>
The following biographical information is for Mr. Royall (please see
Proposal 1 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, 2002.
Executive Compensation
The following table contains compensation data for H. Dean Cubley, our
Chief Executive Officer.
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
ANNUAL LONG TERM
COMPENSATION COMPENSATION AWARDS
------------ ---------------------
Securities Underlying ALL OTHER
NAME AND Salary Options COMPENSATION
PRINCIPAL POSITIONS YEAR ($) (#) ($)
------------------- ---- ------------ --------------------- ------------
H. Dean Cubley, Chairman & CEO 2002 275,000 -- --
2001 216,666 -- --
2000 100,000 1,923 --
Manny M. Carter, Director, President 2002 175,000 -- --
& COO
</Table>
Options, Warrants, and Stock Appreciation Rights
Our 1996 Stock Option Plan provides for the issuance of an aggregate of
1,000,000 shares of common stock. No options under the plan were issued to any
executive officers or directors in fiscal 2002.
The following table sets forth information concerning option exercises
during the fiscal year ended August 31, 2002 and option holdings as of August
31, 2002 with respect to our named executive officers. No stock appreciation
rights were outstanding at the end of the fiscal year.
10
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<Table>
<Caption>
Value Number of Securities Value of Unexercised
Shares Acquired Realized Underlying Unexercised In-the-Money
Name on Exercise (#) ($) Options at FY-End (#) Options at FY-End ($)
- ---- --------------- -------- --------------------------- ----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
H. Dean Cubley -- -- 5,256 -- -- --
Manny M Carter -- -- -- -- -- --
</Table>
The fair market value of our common stock at August 31, 2002 was $.50
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.
EXECUTIVE EMPLOYMENT AGREEMENTS SUMMARY
Both Dr. H. Dean Cubley and Manny M. Carter have existing employment agreements
with the Company.
Dr. Cubley's current agreement for the position of chief executive officer at an
annual salary of $275,000 is effective through October 1, 2004. The agreement
includes incentives of options and warrants at 125% of market based on revenues
of company and market capitalization of company. No incentives have been earned
to date.
Mr. Carter's current agreement for the position of president and chief operating
officer at an annual salary of $175,000 is effective through September 1, 2003.
The agreement includes incentives of options and warrants at 115% of market
price based on revenues of company and market capitalization of company. No
incentives earned to date.
Both Dr. Cubley and Mr. Carter's agreements have early termination provisions
and standard non-compete, non-disclosure, trade secret, and proprietary
information protection.
RELATED PARTY TRANSACTIONS
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. The agreement
automatically renews on an annual basis, and it is terminable prior to the
annual renewal by providing Synchton, Inc. with ninety days advance written
notice. As compensation for these services, the Company pays Synchton $10,000
per month.
PROPOSAL 3 - 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 51% 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 XII of the Articles be amended to reduce the
vote required to amend the Articles in the future to 51% 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 XII is set forth in the Amended and Restated Articles of
Incorporation attached as Appendix A to this proxy statement.
11
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 51% of the voting power of the outstanding shares of the capital 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.
This proposed amendment to Article XII would make it easier for our
shareholders to change any 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 but can make the growth of the company
more difficult. 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 may 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, 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 51% OF THE OUTSTANDING SHARES OF
CAPITAL STOCK ENTITLED TO VOTE.
PROPOSAL 4 - 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 51% or more of the shares
entitled to vote at the proposed special meeting.
If the proposal is approved, Article VIII of our Articles of
Incorporation attached as Appendix A would be amended. We urge each stockholder
to read carefully Article VIII 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 51% of the outstanding shares entitled to vote at the proposed special
meeting.
12
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, shareholders could not force shareholder consideration of
a proposal over the opposition of the Board, unless the shareholders held at
least 51% 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 5 - APPROVAL OF AMENDMENT TO GRANT BOARD TEMPORARY AUTHORITY
TO RESPOND TO CHANGING REGULATORY AND MARKET CONDITIONS
Our Board of Directors proposes that you approve the amendment of our
Articles to grant the Board of Directors special temporary authority to respond
to any changing regulatory requirement or adverse market condition that would
have an adverse effect on our company and its common stock should a timely
response not be possible under current provisions of the Articles. Under normal
conditions if a change was required in the Articles of Incorporation to comply
with new SEC or American Stock Exchange requirements or other market driven
factors this proposed change would be included on the annual Proxy and voted
upon at the Annual Meeting. Any item to be voted on at the Annual Meeting must
be known months in advance of the meeting in order to be included in the Proxy.
The cost associated with obtaining the Proxy vote and conducting the annual
meeting is substantial because of the large number of shareholders. Calling of a
special meeting of the shareholders is currently permitted by our Articles but
requires almost as much advance notice and has essentially the same cost as the
normal annual meeting. Because of these factors it would be likely that without
this special temporary amendment to the Articles an unforeseen change in
regulation or market conditions could have adverse effects on the company before
a formal vote of all shareholders would be possible. Therefore the Board of
Directors is requesting this special but temporary authority to act to preclude
such an event and to allow the Board to protect the best interests of the
shareholders. This temporary authority would only be used if in the opinion of
the Board waiting until the next annual meeting could have a negative effect on
the shareholders.
Specifically, the Board of Directors is requesting an amendment to our
Articles of Incorporation to empower the Board of Directors to take any and all
actions necessary without further vote of all shareholders to enable the company
to (a) comply with all current as well as any newly enacted SEC regulations that
may be enacted prior to the next annual meetings; (b) comply with all current as
well as any new American Stock Exchange requirements that may become effective
prior to the next annual meeting; (c) maintain its common stock valuation in a
range that will insure the continued listing of its common stock on a national
exchange and protect the common interests of all of its stockholders prior to
the next annual meeting. This Proposal may include, among other actions, the
empowerment of the Board of Directors to amend our Articles of Incorporation and
By-Laws to change the par value of our shares, reduce or subdivide the number of
outstanding shares, and to authorize the continued buyback of our shares, if in
the sole opinion of the Board of Directors such immediate actions are necessary
and appropriate to protect shareholder value. This empowerment of the Board may
be terminated or modified upon the approval of a Proposal to modify or terminate
at our next annual meeting. Article XVI 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENT TO THE ARTICLES OF INCORPORATION TO PROVIDE FOR A SPECIAL BUT
TEMPORARY AUTHORITY OF THE BOARD TO REACT TO EMERGENCY SITUATIONS.
PROPOSAL 6 - RATIFY THE APPOINTMENT 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, 2003. 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.
13
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, 2003,
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, 2002, and for the reviews of the financial
statements included in our quarterly reports on Form 10-Q for that fiscal year
were $56,090.
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, 2002.
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, 2003.
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, C. J. Reinhartsen, and Glenn Allan Goerke.
Mr. Goerke and Mr. Reinhartsen 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. Mr.
Reinhartsen has recently been appointed to the Board and the Audit Committee to
fill a vacancy created by the resignation of Ms. Nancy Main for personal
reasons.
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.
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).
14
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 Broadband, Inc. Annual Report on Form 10-K for the year
ended August 31, 2002 filed with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Board of Directors of Eagle Broadband,
Inc.: A. L. Clifford and Glenn Allan Goerke
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our Compensation Committee for the fiscal year ended August 31, 2002,
consisted of A. L. Clifford, Glenn Allan Goerke, and Nancy L. Main. None of our
executive officers or board members served on a compensation committee for any
other company.
REPORT OF THE COMPENSATION COMMITTEE
OVERVIEW
The Compensation Committee of the Board of Directors supervises our executive
compensation. We seek to provide executive compensation that will support the
achievement of our financial goals while attracting and retaining talented
executives and rewarding superior performance. In performing this function, the
Compensation Committee reviews executive compensation surveys and other
available information.
We seek to provide an overall level of compensation to our executives that are
competitive within our industry and other companies of comparable size and
complexity. Compensation in any particular case may vary from any industry
average on the basis of annual and long-term performance as well as individual
performance. The Compensation Committee will exercise its discretion to set
compensation where in its judgment external, internal or individual
circumstances warrant it. In general, we compensate our executive officers
through a combination of base salary, annual incentive compensation in the form
of cash bonuses and long-term incentive compensation in the form of stock
options.
Base salary levels for our executive officers are set generally to be
competitive in relation to the salary levels of executive officers in other
companies within our industry or other companies of comparable size, taking into
consideration the position's complexity, responsibility and need for special
expertise. In reviewing salaries in individual cases the Compensation Committee
also takes into account individual experience and performance.
We provide long-term incentive compensation through our stock option plan. The
number of shares covered by any grant is generally determined by the then
current stock price, subject in certain circumstances, to vesting requirements.
In special cases, however, grants may be made to reflect increased
responsibilities or reward extraordinary performance.
CHIEF EXECUTIVE OFFICER COMPENSATION
Dr. H. Dean Cubley was elected to the position of chief executive officer in
1996. Dr. Cubley's salary was increased from $216,666 to $275,000 during the
fiscal year ended August 31, 2002. Dr. Cubley received no incentive bonus during
such fiscal year.
The overall goal of the Compensation Committee is to insure that compensation
policies are established that are consistent with our strategic business
objectives and that provide incentives for the attainment of those objectives.
This is affected in the context of a compensation program that includes base
pay, annual incentive compensation and stock ownership.
15
Submitted by the Compensation Committee of the Board of Directors of Eagle
Broadband, Inc.: A. L. Clifford and Glenn Allan Goerke
STOCK PRICE PERFORMANCE GRAPH
This section includes a line graph comparing the cumulative total stockholder
return on: our common stock against the cumulative total return of the NASDAQ
Index and the communications equipment peer group ("Peer Group") for the period
of five fiscal years commencing August 30, 1997, and ending August 31, 2002. The
graph and table assume that $100 was invested on August 30, 1997, in each of our
common stock, the NASDAQ Index and the Peer Group, and that all dividends were
reinvested. Our Peer Group consists of companies that we believe are engaged in
the same or similar business as Eagle Broadband. The comparisons shown in the
graph below are based upon historical data. The stock price performance shown in
the graph below is not necessarily indicative of, nor intended to forecast, the
potential future performance of our common stock.
[CHART APPEARS HERE]
COMPARISON OF CUMULATIVE TOTAL RETURN OF ONE OR MORE
COMPANIES, PEER GROUPS, INDUSTRY INDEXES AND/OR BROAD MARKETS
<Table>
<Caption>
Fiscal Year Ending
-----------------------------------------------------------------
10/24/1997 8/29/1998 8/31/1999 8/31/2000 8/31/2001 8/31/2002
---------- --------- --------- --------- --------- ---------
EAGLE BROADBAND, INC. 100.00 29.87 31.96 140.29 18.89 11.11
Communications Equip, NEC 100.00 107.19 115.28 283.48 60.84 26.38
NASDAQ Market Index 100.00 94.34 173.24 271.31 118.24 87.99
</Table>
STOCKHOLDER PROPOSALS FOR 2003 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, 2003. 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, 2003. 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.
ANNUAL REPORT
We have provided a copy of our Annual Report on Form 10-K with this
proxy statement. We will provide exhibits to the Annual Report on Form 10-K upon
request. Please send any such requests to Eagle Broadband, 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 29, 2002
League City, Texas
16
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.
17
APPENDIX A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
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.
18
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 shall equal not less than two (2) nor more
than ten (10) as the Board may determine by resolutions from time to time.
Directors 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:
<Table>
<Caption>
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
C. J. Reinhartsen 101 Courageous Drive, League City, Texas 77573
Lorne E. Persons, Jr. 101 Courageous Drive, League City, Texas 77573
</Table>
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 2002 shall hold office until the first
annual meeting of the stockholders following their election, such annual meeting
of the stockholders to be held in 2003; directors of Class II first chosen at
the annual meeting of stockholders held in 2002 shall hold office until the
second annual meeting following their election, such annual meeting of the
stockholders to be held in 2004; and directors of Class III first chosen at the
annual meeting of stockholders held in 2002 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 2003, 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.
19
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.
20
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.
ARTICLE XVI
The Board of Directors is empowered to take any and all actions
necessary without further vote of all shareholders to enable the company to (a)
comply with all current as well as any newly enacted SEC regulations that may be
enacted prior to the next annual meetings; (b) comply with all current as well
as any new American Stock Exchange requirements that may become effective prior
to the next annual meeting; and (c) maintain its common stock valuation in a
range that will insure the continued listing of its common stock on a national
exchange and protect the common interests of all of its stockholders prior to
the next annual meeting. This Proposal may include, among other actions, the
empowerment of the Board of Directors to amend our Articles of Incorporation and
By-Laws to change the par value of our shares, reduce or subdivide the number of
outstanding shares, and to authorize the continued buyback of our shares, if in
the sole opinion of the Board of Directors such immediate actions are necessary
and appropriate to protect shareholder value. This empowerment of the Board may
be terminated or modified upon the approval of a Proposal to modify or terminate
at our next annual meeting.
EAGLE BROADBAND, INC.
- -----------------------------------------
H. Dean Cubley, Chief Executive Officer
21
EAGLE BROADBAND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF EAGLE BROADBAND, INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AT A TIME
AND DATE TO BE DETERMINED
The undersigned shareholder of Eagle Broadband, 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, at a
future time and date (to be determined), 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, AND 6 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, AND 6.
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 2003)
(i) C. J. (Jim) Reinhartsen
(ii) Lorne E. Persons [ ] [ ]
For all nominees except:
-----------------------------
(write nominee's name)
Nominee for Class II Director For All Withheld All
(term to expire in 2004)
(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 2006) For All Withheld All
(i) H. Dean Cubley
(ii) Christopher W. Futer [ ] [ ]
For all nominees except:
-----------------------------
(write nominee's name)
3. 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 51%.
4. To approve an amendment to the Company's For Against Abstain
Articles of Incorporation to limit
the calling of special meetings of shareholders. [ ] [ ] [ ]
5. To approve an addition to the Company's For Against Abstain
Articles of Incorporation regarding
temporary empowerment of the Board. [ ] [ ] [ ]
6. 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, 2003.
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.