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
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
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:
1
EAGLE BROADBAND, INC.
101 Courageous Drive
League City, TX 77573
December 29, 2003
To Our Shareholders:
You are cordially invited to attend the Annual Meeting of Shareholders of Eagle
Broadband, Inc., which will be held at 1:00 p.m. February 17, 2004.
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
2
EAGLE BROADBAND, INC.
101 COURAGEOUS DRIVE, LEAGUE CITY, TEXAS 77573
_________________________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
February 17, 2004
_________________________________________
The Annual Meeting of Shareholders of Eagle Broadband, Inc., will be held
at 2500 South Shore Blvd., League City, Texas 77573, at 1:00 p.m. February 17,
2004, for the following purposes:
1. Election of Directors. To elect seven directors to the Board of Directors
to serve until our next annual meeting of shareholders, or until their
respective successors are elected and qualified.
2. Approval of Amendment of Voting Percentages. To amend our Articles of
Incorporation to add a section permitting amendments to the Articles of
Incorporation to be accomplished through the vote of a majority of the
shares entitled to vote at the meeting, as opposed to 66 2/3% of the shares
entitled to vote at the meeting.
3. Approval of Amendment to Special Meeting Rules. To amend 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 all
the shares entitled to vote at the proposed special meeting.
4. Approval of Amendment to increase authorized common shares. To amend our
Articles of Incorporation to increase the common shares that we have
authority to issue from 200 million to 350 million.
5. Ratification of Auditors. To ratify the selection of Malone & Bailey, P.C.,
as auditors for Eagle for the fiscal year ending August 31, 2004.
Shareholders of record at the close of business on December 19, 2003, will be
entitled to notice of, and to vote at, this meeting.
By Order of the Board of Directors,
/S/David Weisman
- ------------------------
David Weisman
CHIEF EXECUTIVE OFFICER
Dated: December 29, 2003
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 1:00 p.m. February 17, 2004, 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. On December 19, 2003, the record date for determination of
shareholders entitled to vote at the Annual Meeting, there were 188,240,608
shares of common stock outstanding. Each shareholder of record on December 19,
2003, is entitled to one vote for each share of common stock held by such
shareholder on such 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. 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 directors
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 2. Approval of an addition to our Articles of Incorporation to
permit shareholder approval of amendments to our Articles of Incorporation to be
accomplished through the vote of a majority of the shares entitled to vote at
the meeting, as opposed to 66 2/3% of the shares entitled to vote at the
meeting, 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 3. 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
entitled to vote at the proposed special meeting 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. Increase in the authorized number of common shares that we have
the authority to issue from 200 million to a total of 350 million 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 will not be counted as having been voted on the
proposal and will have no effect on the proposal.
PROPOSAL 5. Ratification of the appointment of Malone & Bailey, P.C., as
our independent public accountants for the fiscal year ending August 31, 2004,
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.
4
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), and FOR each of the Proposals No. 2
through 5, 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 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 - ELECTION OF DIRECTORS
The Board of Directors currently consists of seven (7) members. The Board
has nominated for re-election all of these members, being Messrs. David Weisman,
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 seven (7) nominees
named below to serve until the 2004 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 Nominee
MR. DAVID A. WEISMAN. Mr. Weisman, age 41, has served as director and chief
executive officer of Eagle Broadband since October 2003 and brings more than 18
years of senior level management experience with both high-growth startup and
established technology companies to Eagle Broadband, including a wealth of
sales/marketing management and turn-around experience. Most recently he was
brought in by the board of directors of Silicon Valley security software firm IP
Dynamics to build and lead sales and marketing organizations where he
successfully launched the company into the enterprise, service provider and
government/military security markets. Before IP Dynamics, Weisman co-founded and
was vice president, sales and marketing, for Canyon Networks, a
telecommunications equipment startup focused on broadband subscriber services
provisioning and management for major telcos and service providers. He was also
vice president, marketing and customer service, for multi-service WAN equipment
provider, ACT Networks, where he led all product management, marketing and
customer support activities until the company's $275 million acquisition by
Clarent Corporation. Weisman also co-founded and served as vice president, sales
& marketing, for the commercial broadband networking company Thomson Enterprise
Networks where he was instrumental in winning a $450 million multi-media,
broadband network contract with the British Army and the company's subsequent
acquisition in 1999. Prior to Thomson, he held senior marketing positions at
Adaptive Corporation (acquired in 1994) where he developed and launched the
industry's first ATM network switch and networking company Retix (IPO in 1992).
Weisman also founded and was CEO of a consumer products distribution company,
which he grew to $12 million in sales and subsequently sold in 1987 for $13
million. Weisman also served as a pilot with the United States Air Force Reserve
and saw active combat duty in Central America and Operation Desert Storm. He
holds a B.A. in economics and international relations from U.C.L.A.
DR. H. DEAN CUBLEY. Dr. Cubley, age 62, has served as chairman of the board
since March 1996, as chief executive officer from March 1996 to October 2003,
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.
5
CHRISTOPHER W. "JAMES" FUTER. Mr. Futer, age 65, has served as a director
and company secretary of Eagle since March 1996 and served as vice president of
Eagle from 1996 to July 2002 when he retired. 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, age 59, 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, age 72, 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 as 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, age 58, has served as director
since November 2002. Mr. Reinhartsen has served as president of the Bay Area
Houston Economic Partnership (BAHEP) since 1993. His accomplishments at BAHEP
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 BAHEP, 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 long-term relationships with area
educational institutions, the NASA Johnson Space Center, manufacturing,
marketing, and economic development bring valuable knowledge to our company.
LORNE E. PERSONS, JR. Mr. Persons, age 57, has served as director since
March 2003. With over 28 years experience in the insurance industry, Mr. Persons
has served as president for over five years 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:
Committees
Director Audit Compensation
-------- ----- ------------
A. L. Clifford X X
Glenn Allan Goerke X X
Lorne E. Persons X
C. J. (Jim) Reinhartsen X X
6
The Audit Committee held eight meetings during the last fiscal year, is
governed by a written charter 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. The Board does not believe that any current member of
the Audit Committee qualifies as an "audit committee financial expert" as that
term is defined by applicable SEC rules. Although the Board believes that its
current Audit Committee members are well qualified to carry out their duties,
the Board has commenced a search to identify an additional director who would
qualify as an "audit committee financial expert." For further information, see
the "Audit Committee Report" below.
The Compensation Committee, which held eight 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 eight 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 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 December 19, 2003, a total of 188,240,608 shares of our common stock
were outstanding. The following table sets forth, as of December 19, 2003
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.
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, League City, Texas 77573.
SHARES BENEFICIALLY OWNED AS OF DECEMBER 29, 2003
-------------------------------------------------
BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
---------------- ---------------- ----------------
David Weisman 74,601 Less than 1%
H. Dean Cubley 1,051,702 (1) Less than 1%
Christopher W. Futer 155,634 Less than 1%
A. L. Clifford 552,958 (2) Less than 1%
Glenn Allan Goerke 160,028 (3) Less than 1%
C. J. Reinhartsen 98,045 Less than 1%
Lorne E. Persons, Jr. 267,350 Less than 1%
----------------
2,360,318
(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 105,000 shares, which are held in the name of The
Clifford Family Trust, and 61,667 shares held by Mr. Clifford's
wife.
(3) Includes options to purchase 25,000 shares of common stock at an
exercise price of $0.41 per share.
7
EXECUTIVE OFFICERS
Our executive officers are as follows:
NAME AGE OFFICE HELD
---- --- -----------
David Weisman 41 Chief Executive Officer
H. Dean Cubley 62 Chief Technical Officer
Christopher W. Futer 65 Secretary
Richard Royall 57 Chief Financial Officer
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, 2003.
Code of Ethics for the CEO, CFO and Senior Financial Officers
In December 2003, in accordance with SEC Rules, the Audit Committee and the
Board adopted the CEO, CFO and Senior Financial Officers Code of Ethical
Conduct. The Board believes that these individuals must set an exemplary
standard of conduct, particularly in the areas of accounting, internal
accounting control, auditing and finance. This code sets forth ethical standards
the designated officers must adhere to and other aspects of accounting, auditing
and financial compliance. The full text of the Code of Ethics for the CEO, CFO
and Senior Financial Officers has been posted to the Company's website, and can
be found under the Corporate Governance link.
Executive Compensation
The following table contains compensation data for our named executive
officers for the fiscal years ended August 31, 2003, 2002 and 2001.
SUMMARY COMPENSATION TABLE
Name and Long Term Compensation All Other
Principal Positions Year Annual Compensation Awards Compensation ($)
- --------------------------------- ----------- ---------------------- ---------------------------- ---------------------
Salary Bonus Securities Underlying
($) ($) Options
- -----------------------------------------------------------------------------------------------------------------------
H. Dean Cubley, CEO 2003 275,000 - 300,000 options at $0.41 -
2002 275,000 - - -
2001 185,000 - - -
Options, Warrants, and Stock Appreciation Rights
Our 1996 Stock Option Plan provides for the issuance of an aggregate of
1,000,000 shares of common stock. No options under the plan were issued to any
executive officers or directors in fiscal 2003.
8
The following table sets forth information concerning option exercises
during the fiscal year ended August 31, 2003 and option holdings as of August
31, 2003 with respect to our named executive officers. No stock appreciation
rights were outstanding at the end of the fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
Value Number of Securities Value of Unexercised
Shares Acquired Realized Underlying Unexercised Options In-the-Money
Name on Exercise (#) ($) at FY-End (#) Options at FY-End ($)
- ---------------------- ------------------ ------------ -------------------------------- -------------------------------
Exercisable Unexercisable Exercisable Unexercisable
H. Dean Cubley 0 0 300,000 0 12,000 0
The fair market value of our common stock at August 31, 2003 was $.47 per
share. Since the exercise price of the options listed above are $.041 per share,
the options were in-the-money as of the end of our fiscal year, and the value is
set forth in the above table under Securities and Exchange Commission rules.
EXECUTIVE EMPLOYMENT AGREEMENTS SUMMARY
Mr. David Weisman has an existing employment agreement with the Company
that he entered into effective September 2003. Mr. Weisman's current agreement
for the position of chief executive officer is at an annual salary of $275,000
and is effective through April 2, 2005. The agreement includes incentives of
options some of which vest over the 18-month duration of his employment contract
and some of which are based upon the attainment of market capitalization
milestones and some of which are based on the cumulative revenue of the Company.
To date Mr. Weisman has earned five-year options to purchase 300,000 shares at
$0.41 plus 400,000 shares at $0.60 plus 500,000 shares at $0.75 per share.
Mr. Weisman's agreement has early termination provisions and standard
non-compete, non-disclosure, trade secret, and proprietary information
protection.
Dr. Cubley has an existing employment agreement with the Company that he
entered into effective January 2001. Dr. Cubley's current agreement for the
position of Chief Technology officer is at an annual salary of $275,000 and is
effective through September 2004. The agreement includes incentives of options
some of which are based upon the attainment of market capitalization milestones
and some of which are based on the cumulative revenue of the Company. To date
Dr. Cubley has earned five-year options to purchase 2,000,000 shares at $0.41
per share.
RELATED PARTY TRANSACTIONS
None
PROPOSAL 2 - APPROVAL OF AMENDMENT OF VOTING PERCENTAGES
We are asking shareholders to amend our Articles of Incorporation to add
Section XVII to provide that the affirmative vote of a majority, rather than at
least 66 2/3%, of the voting power of the then outstanding shares entitled to
vote is required to amend our Articles of Incorporation.
As currently in effect, the Texas Business Corporations Act requires the
affirmative vote of holders at least 66 2/3% of the outstanding shares entitled
to vote thereon (unless any class or series of shares is entitled to vote as a
class, in which event the proposed amendment shall be adopted upon receiving the
affirmative vote of the holders of at least two-thirds of the shares with each
class or series of outstanding shares entitled to vote thereon as a class and of
at least two-thirds of the total outstanding shares entitled to vote thereon) to
amend our Articles. The Board of Directors proposes that Article XVII of the
Articles be adopted to reduce the vote required to amend the Articles to a
majority of the voting power of the shares entitled to vote. The full text of
the amendment to Article XVII 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, a majority of
the shares entitled to vote to change our Articles, they should be able to
effect such change.
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.
9
This proposed Article XVII 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 common stock outstanding and entitled to vote
have a veto power over any change 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.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ADOPTION OF THE
AMENDMENT TO PERMIT HOLDERS OF A MAJORITY OF THE SHARES ENTITLED TO VOTE TO
AMEND THE ARTICLES OF INCORPORATION.
PROPOSAL 3 - APPROVAL OF AMENDMENT TO THE SPECIAL MEETINGS RULES
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 at least 50% or more of the
shares entitled to vote at the proposed special meeting.
If the proposal is approved, Article XIII of our Articles of Incorporation
would be amended as set forth in Appendix A. We urge each stockholder to read
carefully Article XIII of our new Amended and Restated Articles of Incorporation
attached as Appendix A 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% of the outstanding shares entitled to vote at the proposed special
meeting.
Possible Effects of the Proposed Amendment
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 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 INCREASE FROM 30% TO 50% THE
HOLDERS OF SHARES THAT HAVE THE RIGHT TO CALL A SPECIAL MEETING.
PROPOSAL 4 - APPROVAL OF AN AMMENDMENT TO INCREASE THE NUMBER OF
AUTHORIZED COMMON SHARES
Our Board of Directors proposes that you approve an amendment of our
Articles to increase the number of authorized common shares from the current 200
million shares to a new total of 350 million shares. The current issued and
outstanding number of shares of common stock is 188,240,608. We have no current
plans to issue any shares of common stock.
Reason for the Increase
We believe that the increase will provide better flexibility in raising
additional capital in the future. Among other things, the increase in the number
of shares of common stock will make available shares 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, and
providing equity incentives to employees.
Current holders of common stock have no preemptive rights, which means that
current stockholders do not have prior rights to purchase any new issue of
common stock in order to maintain their current ownership. The issuance of
additional shares of common stock will decrease the proportionate equity
ownership of current shareholders and, depending upon the price paid for such
additional shares, could result in dilution to current stockholders.
10
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 could help
management frustrate efforts of shareholders seeking to remove management, could
have the effect of limiting shareholder participation in transactions such as
mergers or tender offers, regardless of whether those transactions are favored
by incumbent management. In addition, 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 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.
Effect of the Increase
Upon the filing of the amendment to our articles of incorporation, as a
general matter, approval from the stockholders will not be required to issue any
newly-authorized shares, except as otherwise required by law or applicable rules
of any market upon which our common stock may trade.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE
AMENDMENT TO INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES FROM 200 MILLION TO
350 MILLION.
PROPOSAL 5 - RATIFY THE APPOINTMENT OF MALONE & BAILEY, P.C.
On September 15, 2003, we dismissed McManus & Co. ("McManus") as our
independent auditors, which audited our financial statements for the fiscal
years ended August 31, 2002 and 2001, and engaged Malone & Bailey, P.C. ("Malone
& Bailey") as our independent auditors for the fiscal year ended August 31,
2003.
The Audit Committee has selected Malone & Bailey as our independent
auditors for the fiscal year ending August 31, 2004, subject to shareholder
approval. In the event that ratification of this selection of auditors is not
approved by our shareholders, the Audit Committee will review their future
selection of auditors.
We expect that a representative of Malone & Bailey will attend the Annual
Meeting, and the representative will have an opportunity to make a statement if
she or he so desires. The representative will also be available to respond to
appropriate questions from shareholders.
McManus' reports on our consolidated financial statements for each of the
fiscal years ended August 31, 2002 and 2001, did not contain an adverse opinion
or disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope, or accounting principles.
During the years ended August 31, 2002 and 2001, and through the date of
McManus' dismissal, there were no disagreements with McManus on any matter of
accounting principle or practice, financial statement disclosure, or auditing
scope or procedure which, if not resolved to McManus' satisfaction, would have
caused them to make reference to the subject matter of the disagreements in
connection with their reports on our consolidated financial statements for such
years; and there were no reportable events as defined in Item 304(a)(1)(v) of
Regulation S-K.
During the years ended August 31, 2002 and 2001, and through the date of
our hiring of Malone & Bailey, we did not consult Malone & Bailey with respect
to the application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
our consolidated financial statements, or any other matters or reportable events
as set forth in Items 304(a)(2(i) and (ii) of Regulation S-K.
Aggregate fees for professional services rendered by Malone & Bailey for
the fiscal year ended August 31, 2003, were as follows:
2003
----
Audit Fee 59,660 (1)
(1) Of this amount, $59,660 represents fees paid to Malone &
Bailey for professional services rendered for the audit of our
annual financial statements for the fiscal year ended August 31,
2003. During the fiscal year ended August 31, 2003, McManus
provided professional services in connection with the reviews of
the financial statements included in our quarterly reports for
the periods ended November 30, 2002, February 28, 2003, and May
31, 2003, and the aggregate fees billed by McManus for such
services was $13,220.
11
Audit Fees for the fiscal years ended August 31, 2003, represent the
aggregate fees billed for professional services rendered by Malone & Bailey and
McManus, as applicable, for the audit of our annual financial statements and
review of financial statements included in our quarterly reports on Form 10-Q or
services that are normally provided in connection with statutory and regulatory
filings or engagements for those fiscal years.
Audit-Related Fees for the fiscal year ended August 30, 2003, represents
the aggregate fees billed for assurance and related services by Malone & Bailey
that are reasonably related to the performance of the audit or review of our
financial statements and are not reported under Audit Fees.
Tax-Related Fees for the fiscal year ended August 30, 2003, represents the
aggregate fees billed for professional services rendered by Malone & Bailey for
tax compliance, tax advice, and tax planning.
All Other Fees for the fiscal year ended August 30, 2003, represents the
aggregate fees billed for products and services provided by Malone & Bailey,
other than the services reported in the other categories.
Audit Committee Pre-Approval Policies and Procedures
Representatives of the independent auditors normally attend each meeting of
the Audit Committee. The Audit Committee on an annual basis reviews audit and
non-audit services performed by the independent auditor. All audit and non-audit
services are pre-approved by the Audit Committee, which considers, among other
things, the possible effect of the performance of such services on the auditors'
independence. The Audit Committee has considered the role of Malone & Bailey in
providing services to us for the fiscal year ended August 31, 2003, and has
concluded that such services are compatible with Malone & Bailey's independence
as our auditors.
Financial Information Systems Design and Implementation Fees and All Other Fees
Malone & Bailey 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, 2003.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF MALONE & BAILEY, P.C., AS INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING AUGUST 31, 2004.
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.
Management is responsible for our internal controls. Our independent
auditors, Malone & Bailey, 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 Malone
& Bailey.
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 Malone & Bailey, nor can the Audit Committee certify that
Malone & Bailey 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 Malone & Bailey. Management represented to the Audit Committee
that our 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 Malone &
Bailey. The Audit Committee discussed with Malone & Bailey matters required to
be discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees).
Malone & Bailey 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 Malone & Bailey their independence.
12
Based upon the Audit Committee's discussion with management and Malone &
Bailey and the Audit Committee's review of the representations of management and
the report of Malone & Bailey 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, 2003, filed with the Securities and
Exchange Commission.
Submitted by the Audit Committee of the Board of Directors of Eagle
Broadband, Inc.:
A. L. Clifford, Jim Reinhartsen, and Glenn Allan Goerke
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our Compensation Committee for the fiscal year ended August 31, 2003,
consisted of A. L. Clifford, Glenn Allan Goerke, Jim Reinhartsen and Lorne
Persons. 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
During the fiscal year ended August 31,2003, Dr. H. Dean Cubley served as
chief executive officer. Dr. Cubley's salary was $275,000 per year. Dr. Cubley
earned 300,000 options during the fiscal year ended August 31, 2003.
Mr. David Weisman was elected to the position of chief executive officer in
September 2003. Mr. Weisman's salary is $275,000 during the fiscal year ended
August 31, 2004. Mr. Weisman has earned 1,200,000 options to the current date
since the start of his employment.
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.
Submitted by the Compensation Committee of the Board of Directors of Eagle
Broadband, Inc.:
A. L. Clifford, Jim Reinhartsen, Lorne Persons, and Glenn Allan Goerke
STOCK PRICE PERFORMANCE GRAPH
This section includes a tabular comparison of 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 31, 1998, and ending August
31, 2003. The graph and table assume that $100 was invested on August 31, 1998,
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 comparison below are based upon historical data. The stock price
performance shown in the comparison below is not necessarily indicative of, nor
intended to forecast, the potential future performance of our common stock.
13
[OBJECT OMITTED]
MARKETS
Fiscal Year Ending
------------------------------------------------------------------------------------------
29-Aug-98 31-Aug-99 31-Aug-00 31-Aug-01 31-Aug-02 31-Aug-03
Eagle Broadband Inc. $100 $107 $470 $63 $37 $35
Nasdaq US $100 $186 $284 $121 $91 $122
Communications $100 $158 $224 $116 $37 $54
Equipment, NEC
STOCKHOLDER PROPOSALS
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 September 4, 2004. 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, such shareholder must provide written notice of such proposal to
our Secretary at our principal executive offices by November 16, 2004. 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, League City, Texas 77573, Attention: Investor Relations.
14
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
David Weisman, Chief Executive Officer
December 29, 2003
League City, 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.
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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 350,000,000 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 at such
address is Dr. H. Dean Cubley.
16
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 resolution 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:
Name Address
---------------------------------- --------------------------------------------------
David Weisman 101 Courageous Drive, League City, Texas 77573
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
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 seven (7).
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 good 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.
17
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, the Chairman
of the Board, the Chief Executive Officer, or the holders of at least 50% of 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 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.
EAGLE BROADBAND, INC.
David Weisman, Chief Executive Officer
18
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 David Weisman 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, AND 5.
PLEASE MARK, SIGN, DATE AND RETURN THIS CARD PROMPTLY USING THE ENCLOSED RETURN
ENVELOPE
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1. Election of Directors. If shareholders approve,
each nominee will serve for a term of one year. For All Witheld All
(i) C. J. (Jim) Reinhartsen [ ] [ ]
(ii) Lorne E. Persons
(iii) A. L. Clifford
(iv) Glenn Allan Goerke
(v) H. Dean Cubley
(vi) Christopher W. Futer
(vii) David A. Weisman
For all nominees except:
_________________________________
_________________________________
(write nominee's name)
2. 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%.
3. To approve an amendment to the Company's For Against Abstain
Articles of Incorporation to limit
the calling of special meetings of shareholders. [ ] [ ] [ ]
4. To approve an increase in the authorized For Against Abstain
shares of common stock up to a total of
350 million shares. [ ] [ ] [ ]
5. To ratify the appointment of Malone & For Against Abstain
Bailey, P.C., as the Company's independent
accountants for the fiscal year ending [ ] [ ] [ ]
August 31, 2004.
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]
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[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.
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End of Filing
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