SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sections 240.14a-11(c) or
Section 240.14a-12
WESTELL TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
WESTELL TECHNOLOGIES, INC.
750 NORTH COMMONS DRIVE
AURORA, ILLINOIS 60504
(630) 898-2500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 9, 1998
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Westell Technologies, Inc., a
Delaware corporation (the "Company"), will be held at the Company's Corporate
Headquarters, 750 North Commons Drive, Aurora, Illinois on Wednesday, September
9, 1998 at 10:00 a.m. Central Daylight Time for the following purposes:
1. To elect eight directors; and
2. To consider and transact such other business as may properly come
before the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on July 24, 1998 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting.
By Order of the Board of Directors
Stephen J. Hawrysz
Vice President,
Secretary, Treasurer and
Chief Financial Officer
August 7, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE, SIGN AND MAIL THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED WHICH REQUIRES NO POSTAGE FOR MAILING IN
THE UNITED STATES. A PROMPT RESPONSE IS HELPFUL, AND YOUR COOPERATION WILL BE
APPRECIATED.
WESTELL TECHNOLOGIES, INC.
750 NORTH COMMONS DRIVE
AURORA, ILLINOIS 60504
___________
Proxy Statement
Annual Meeting of Stockholders to be held September 9, 1998
___________
To the Stockholders of
WESTELL TECHNOLOGIES, INC.:
This Proxy Statement is being mailed to stockholders on or about August 7,
1998 and is furnished in connection with the solicitation by the Board of
Directors of Westell Technologies, Inc., a Delaware corporation (the "Company"),
of proxies for the Annual Meeting of Stockholders to be held on September 9,
1998 for the purpose of considering and acting upon the matters specified in the
Notice of Annual Meeting of Stockholders accompanying this Proxy Statement. If
the form of Proxy which accompanies this Proxy Statement is executed and
returned, it will be voted. A Proxy may be revoked at any time prior to the
voting thereof by written notice to the Secretary of the Company.
A majority of the outstanding shares entitled to vote at this meeting and
represented in person or by proxy will constitute a quorum. With a quorum
present at the meeting, the affirmative vote of the holders of a plurality of
the shares entitled to vote and represented in person or by proxy at this
meeting is required for the election of directors. Accordingly, neither the
nonvoting of shares nor withholding authority will affect the election of
Directors.
Expenses incurred in the solicitation of proxies will be borne by the
Company. Officers of the Company may make additional solicitations in person or
by telephone.
The Annual Report to Stockholders for fiscal year ended March 31, 1998
("fiscal 1998") accompanies this Proxy Statement. If you did not receive a copy
of the report, you may obtain one by writing to the Secretary of the Company.
As of July 24, 1998, the Company had outstanding 15,715,744 shares of Class
A Common Stock and 20,706,357 shares of Class B Common Stock (collectively, the
"Common Stock"), and such shares are the only shares entitled to vote at the
Annual Meeting. Each share of Class A Common Stock is entitled to one vote and
each share of Class B Common Stock is entitled to four votes on each matter to
be voted upon at the Annual Meeting.
SECURITIES BENEFICIALLY OWNED BY
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
Set forth in the following table are the beneficial holdings (and the
percentages of outstanding shares represented by such beneficial holdings) as of
July 24, 1998 except as otherwise noted, of (i) each person (including any
"group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934
(the "Exchange Act")) known by the Company to own beneficially more than 5% of
its outstanding Common Stock, (ii) directors, (iii) each Named Executive Officer
(as defined below), and (iv) all directors and executive officers as a group.
Except as otherwise indicated, the Company believes that the beneficial owners
of the Common Stock listed below, based on information provided by such owners,
have sole investment and voting power with respect to such shares, subject to
community property laws where applicable. Under Rule 13d-3 of the Exchange Act,
persons who have the power to vote or dispose of Common Stock of the Company,
either alone or jointly with others, are deemed to be beneficial owners of such
Common Stock.
<TABLE>
<CAPTION>
STOCKHOLDERS, NUMBER OF NUMBER OF PERCENT OF
NAMED EXECUTIVE CLASS A CLASS B TOTAL VOTING
OFFICERS AND DIRECTORS SHARES (1)(2) SHARES(2) POWER(3)
<S> <C> <C> <C>
Robert C. Penny III . . . . . . . . . . . . . . . . -- 19,527,568 (4) 79.3%
Melvin J. Simon . . . . . . . . . . . . . . . . . . 14,500 (5) 19,739,856 (4)(6) 80.1%
Gary F. Seamans (7) . . . . . . . . . . . . . . . 150,644 (8) 966,501 4.1%
Robert H. Gaynor . . . . . . . . . . . . . . . . . 249,108 -- *
Curtis L. Benton (9) . . . . . . . . . . . . . . . 661,474 -- *
Richard P. Riviere . . . . . . . . . . . . . . . . 4,800 -- *
J. William Nelson . . . . . . . . . . . . . . . . . 302,351 -- *
Marc Zionts . . . . . . . . . . . . . . . . . . . . 38,000 -- *
Stefan D. Abrams . . . . . . . . . . . . . . . . . 63,000 -- *
Michael A. Brunner . . . . . . . . . . . . . . . . 60,500 -- *
Paul A. Dwyer . . . . . . . . . . . . . . . . . . . 63,106 -- *
John W. Seazholtz . . . . . . . . . . . . . . . . . 3,000 -- *
Ormand J. Wade . . . . . . . . . . . . . . . . . . 89,285 -- *
All directors and executive
officers as a group (14 persons) . . . . . . . . . 1,803,170 19,739,856 82.0%
* Less than 1%
(1) Includes options to purchase shares that are exercisable within 60 days of
July 24, 1998 as follows: Mr. Simon: 7,500 shares; Mr. Seamans: 45,000
shares; Mr. Gaynor: 7,500 shares; Mr. Benton: 4,000 shares; Mr. Riviere:
4,800 shares; Mr. Nelson: 26,000 shares; Mr. Zionts: 28,000 shares; Mr.
Abrams: 3,000 shares; Mr. Brunner: 3,000 shares; Mr., Dwyer: 63,106 shares;
Mr. Seazholtz: 3,000 shares; Mr. Wade: 3,000 shares; and all directors and
officers as a group: 247,406 shares.
(2) Holders of Class B Common Stock have four votes per share and holders of
Class A Common Stock have one vote per share. Class A Common Stock is
freely transferable and Class B Common Stock is transferable only to
certain transferees but is convertible into Class A Common Stock on a
share-for-share basis.
(3) Percentage of beneficial ownership is based on 15,715,744 shares of Class A
Common Stock and 20,706,357 shares of Class B Common Stock outstanding as
of July 24, 1998.
(4) Includes 19,541,568 shares of Class B Common Stock held by Messrs. Penny
and Simon as Trustees pursuant to a Voting Trust Agreement dated February
23, 1994, as amended (the "Voting Trust"), among Robert C. Penny III and
Melvin J. Simon, as trustees (the "Trustees"), and members of the Penny
family (as defined in the Voting Trust Agreement) and the Simon family (as
defined in the Voting Trust Agreement). The Trustees have joint voting and
dispositive power over all shares in the Voting Trust. Messrs. Penny and
Simon each disclaim beneficial ownership with respect to all shares held in
the Voting Trust in which they do not have a pecuniary interest. The Voting
Trust contains 6,152,635 shares held for the benefit of Mr. Penny's
immediate family and 779,981 shares held for the benefit of Mr. Simon's
immediate family. The address for Messrs. Penny and Simon is Melvin J.
Simon & Associates, Ltd., 4343 Commerce Court, Suite 114, Lisle, Illinois
60532.
(5) Includes 5,000 shares held for the benefit of Stacy L. Simon, Melvin J.
Simon's daughter for which Mr. Simon's wife is custodian and has sole
voting and dispositive power and 2,000 shares held in trust for the benefit
of Makayla G. Penny, daughter of Robert C. Penny III, for which Mr.
Simon is trustee and has sole voting and dispositive power. Mr. Simon
disclaims beneficial ownership of these shares.
(6) Includes 212,288 shares held in trust for the benefit of Shawn F. Seamans,
Gary F. Seamans' son, for which Mr. Simon is trustee and has sole voting
and dispositive power. Mr. Simon disclaims beneficial ownership of these
shares.
(7) Mr. Seamans retired from the Company effective April 1, 1998. See
"Mangement Executive Officer Agreements."
(8) Includes 105,644 shares held in trusts for the benefit of J. William
Nelson's children for which Mr. Seamans is trustee and has sole voting and
dispositive power. Mr. Seamans disclaims beneficial ownership of these
shares.
(9) Mr. Benton resigned from the Company on June 15,1998 to pursue other
business interests.
</TABLE>
PROPOSAL NO. 1: ELECTION OF DIRECTORS
At the Annual Meeting, eight directors, constituting the entire Board of
Directors of the Company, are to be elected to hold office until the next annual
meeting of stockholders or until their successors are elected and qualified. In
December 1997, the Bylaws of Westell Technologies, Inc. were amended to increase
the number of directors from 7 to 8.
It is intended that the proxies (except proxies marked to the contrary)
will be voted for the nominees listed below. It is expected that the nominees
will serve, but if any nominee declines or is unable to serve for any unforeseen
cause, the proxies will be voted to fill any vacancy so arising in accordance
with the discretionary authority of the persons named in the proxies.
NOMINEES
The following table sets forth certain information with respect to the
nominees, seven of whom are current members of the present Board of Directors.
Mr. Robert Penny III has been nominated to fill a vacancy created by the
retirement of Gary F. Seamans on April 1, 1998.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND AGE SINCE PRINCIPAL OCCUPATION AND OTHER INFORMATION
<S> <C> <C>
Robert H. Gaynor (74) 1990 Robert H. Gaynor has served as Chairman of the Board since December 1997. Mr.
Gaynor has served as Vice Chairman of the Board of Directors of the Company from
December 1991 to December 1997, and as a director of the Company since October
1990. For four years, Mr. Gaynor served as Chairman of the Rockhill Workshop, an
international executive conference at the University of Missouri, Kansas City.
From 1958 to 1986, Mr. Gaynor held a variety of executive officer positions at
AT&T.
Melvin J. Simon (53) 1992 Melvin J. Simon has served as Assistant Secretary and Assistant Treasurer of the
Company since July 1995 and as a Director of the Company since August 1992. From
August 1992 to July 1995, Mr. Simon served as Secretary and Treasurer of the
Company. A Certified Public Accountant, Mr. Simon founded and has served as
President of Melvin J. Simon & Associates, Ltd., a public accounting firm, since
May 1980.
Stefan D. Abrams (59) 1994 Stefan D. Abrams has served as a director of the Company since February 1994. Mr.
Abrams has been a Managing Director of The TCW Group, Inc., an investment
management firm, since October 1992.
Michael A. Brunner (64) 1994 Michael A. Brunner has served as a director of the Company since December 1994.
From May 1985 to February 1992, Mr. Brunner served as President of AT&T Federal
Systems, a division of AT&T. Mr. Brunner currently serves as a director of
Concurrent Computer Corporation, a computer manufacturer, and as a director and
past Chairman of the Leonard Center for Excellence in Engineering of Penn State
University.
Paul A. Dwyer (64) 1996 Paul A. Dwyer has served as a director of the Company since January 1996 and as a
director of Westell, Inc., a subsidiary of the Company, since November 1995. Mr.
Dwyer has served as Vice President -- Finance of Henry Crown and Company, a
private investment firm, since February 1981.
Ormand J. Wade (59) 1994 Ormand J. Wade has served as a director of the Company since December 1994. From
February 1987 to December 1992, Mr. Wade served as Vice Chairman of Ameritech
Corp. and from January 1982 to February 1987, as President and Chief Executive
Officer of Illinois Bell Telephone Company. Mr. Wade currently serves as a
director of ITW Corporation, a manufacturer of precision engineered products,
Andrew Corporation, a manufacturer of microwave and peripheral equipment, and
Northwestern Memorial Hospital, and serves as a member of the Visiting Board of
the University of Maine.
John W. Seazholtz (61) 1997 John W. Seazholtz has served as director of the Company since December 1997. Mr.
Seazholtz has served as President and Chief Executive Officer of telesoft
america, inc., since May 1998. In April 1998, Mr. Seazholtz retired as Chief
Technology Officer - Bell Atlantic where he served since June 1995 and previously
served as Vice President Technology and Information Services - Bell Atlantic
since June 1993. Mr. Seazholtz currently serves as a director of Odetics, Inc., a
supplier of digital data management products for the security, broadcast and
computer storage markets, and for ASC - Advanced Switching Communications, an ATM
network equipment developer.
Robert C. Penny III (45) * Robert C. Penny III has served as managing partner of P F Management Co., a
private investment company, since May 1980.
________________________
* Does not currently serve as a director. Mr. Penny has been nominated to
fill a vacancy created by the retirement of Gary F Seamans on April 1, 1998.
</TABLE>
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES:
The Board of Directors held 18 meetings during fiscal 1998. All directors
attended at least 75% of the aggregate number of such meetings and of meetings
of Board committees on which they served in fiscal 1998.
The Board of Directors has established five standing committees: the Audit
Committee, the Compensation Committee, the Stock Incentive Committee, the
Executive Committee and the Finance Committee.
The Audit Committee (comprised of Messrs. Brunner (Chair), Abrams and
Dwyer) met three times in fiscal 1998. The functions of the Audit Committee
consist of recommending the appointment of auditors and overseeing the
accounting and audit functions of the Company.
The Compensation Committee (comprised of Messrs. Wade (Chair), Gaynor and
Simon) met six times in fiscal 1998. The functions of the Compensation
Committee consist of determining executive officers' salaries and bonuses. On
March 25, 1998, Paul Dwyer replaced Robert Gaynor on the Compensation Committee.
The Stock Incentive Committee (comprised of Messrs. Wade (Chair), Gaynor
and Dwyer) met five times in fiscal 1998. The functions of the Stock Incentive
Committee consist of administering and determining awards to be granted under
the Company's 1995 Stock Incentive Plan and the Employee Stock Purchase Plan.
The Executive Committee (comprised of Messrs. Gaynor (Chair), Wade and
Simon) met three times in fiscal 1998. The Executive Committee has the authority
to take all actions that the Board of Directors as a whole would be able to
take, except as limited by applicable law. Mr. Wade replaced Mr. Seamans on the
Executive Committee in December 1997.
The Finance Committee (comprised of Messrs. Abrams (Chair), Gaynor and
Simon) met six times in fiscal 1998. The functions of the Finance Committee
consist of making recommendations to the Board of Directors as to financial
matters and as to such matters as shall be referred to it by the Board of
Directors. The Finance Committee also periodically reviews the investment
policies and performance of the Company. Mr. Gaynor replaced Mr. Seamans on the
Finance Committee in December 1997. On March 25, 1998, the Finance Committee
was expanded to include Paul Dwyer.
Directors who are not employees of the Company each receive $20,000 per
year for services rendered as directors, except Mr. Gaynor who receives $100,000
per year as Chairman and Chief Executive Officer of the Company. In December
1997, outside directors were granted stock options that vest monthly over five
years as follows for the following amount of shares: Mr. Gaynor: 50,000 shares;
Mr. Simon: 50,000 shares; Mr. Abrams: 20,000 shares; Mr. Brunner: 20,000 shares;
Mr. Dwyer: 20,000 shares; Mr. Wade: 20,000 shares and Mr. Seazholtz: 20,000
shares. In addition, all directors may be reimbursed for certain expenses
incurred in connection with attendance at Board and committee meetings. Other
than with respect to reimbursement of expenses, directors who are employees of
the Company do not receive additional compensation for service as directors. In
connection with his election as a director of Westell, Inc., a subsidiary of the
Company, in November 1995, Mr. Dwyer was granted an option to purchase 89,900
shares of Class A Common Stock at an exercise price of $6.50 per share. Mr.
Dwyer's options vest at a rate of 1,872 shares per month commencing January 1,
1996. Mr. Simon also receives $1,250 each quarter for his services as a
director of Conference Plus, Inc., a subsidiary of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES.
EXECUTIVE OFFICERS
The following sets forth certain information with respect to the current
executive officers of the Company. Please refer to the information contained
above under the heading "Directors" for biographical information of executive
officers who are also directors of the Company.
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Robert H. Gaynor . . . . . . . . 74 Chairman of the Board of Directors, and Chief Executive Officer
Marc J. Zionts . . . . . . . . . 36 Chief Executive Officer - Westell, Inc.
J. William Nelson . . . . . . . . 45 President and Chief Operating Officer-Westell, Inc.
Richard P. Riviere . . . . . . . 43 Senior Vice President of Transaction Services and President and Chief Executive
Officer - Conference Plus, Inc.
Melvin J. Simon . . . . . . . . . 53 Assistant Secretary, Assistant Treasurer and Director
Stephen J. Hawrysz . . . . . . . 40 Vice President, Secretary, Treasurer and Chief Financial Officer
William Noll . . . . . . . . . . 50 Senior Vice President of Product Development and Chief Technology Officer
- Westell, Inc.
Marcus H. Hafner, Sr. . . . . . 41 Executive Vice President Business Development and Corporate Strategy
- Westell, Inc.
</TABLE>
Marc J. Zionts has served as Chief Executive Officer of Westell, Inc since
December 1997. Mr. Zionts also served as Senior Vice President of DSL System
Sales of Westell, Inc. from March 1997 to December 1997. Mr. Zionts joined the
Company in April 1996 as Vice President and General Manager of DSL Sales and
Marketing in the United States. Prior to joining the Company, Mr. Zionts was a
founder and Executive Vice President of Communicate Direct, Inc., a systems
integrator and developer of imaging technologies, from August 1987 to April
1996. Prior to August 1987, Mr. Zionts held a variety of marketing and sales
positions with GTE.
J. William Nelson has served as President - Westell, Inc. since March 1997
and assumed the role of Chief Operating Officer of Westell, Inc. in December
1997. Mr. Nelson served as President of U.S. Operations from April 1996 to March
1997 and as Executive Vice President and Chief Customer Satisfaction Officer of
Westell, Inc. since July 1993. Mr. Nelson also has served as Senior Vice
President and Chief Customer Satisfaction Officer of the Company from May 1991
to June 1993. Prior to joining the Company, Mr. Nelson held a variety of
management positions, including Director of Large Account Sales and Director of
Customer Service, at MCI Communications, Inc. from April 1986 to May 1991.
Richard P. Riviere has served as Vice President of Transaction Services for
the Company since July 1995 and as President and Chief Executive Officer of
Conference Plus since October 1988.
Stephen J. Hawrysz has served as Vice President and Chief Financial Officer
of the Company since July 1993, as Secretary and Treasurer of the Company since
July 1995 and as Vice President and Chief Financial Officer of Westell, Inc.
since August 1990. A Certified Public Accountant, Mr. Hawrysz served in the
Audit Division of Arthur Andersen LLP, a public accounting firm, from June 1980
to November 1989, and as Assistant Controller for Wisconsin Central
Transportation Corporation, a regional railroad company, from November 1989 to
August 1990.
William J. Noll has served as Senior Vice President of Research and
Development and Chief Technology Officer of Westell, Inc. since May 1997. Prior
to joining the Company, Mr. Noll was Vice President and General Manager of
Residential Broadband at Northern Telecom from October 1995 to May 1997.
Mr. Noll held other various Vice President and Assistant Vice President
positions at Northern Telecom from June 1988 to October 1996, and was Vice
President Network Systems at Bell Northern Research from November 1986 to June
1988.
Marcus H. Hafner, Sr. has served as Executive Vice President for Business
Development and Corporate Strategy of Westell, Inc. since December 1997. Mr.
Hafner served as Senior Vice President of Business Development from April 1996
to December 1997 and as Business Development Vice President of the Company from
May 1995 to March 1996. Prior to joining the Company, Mr. Hafner was President
and Chief Operating Officer of On-Demand Technologies, Inc., a broadband network
systems provider, from April 1992 to April 1995, and a Senior Program Manager at
E-Systems, Inc., an electronics company, from November 1990 to April 1992.
EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal years ended March
31, 1996, 1997 and 1998, with respect to all compensation paid or earned for
services rendered to the Company by the Company's Chief Executive Officers and
the Company's four other most highly compensated executive officers who were
serving as executive officers at March 31, 1998 (together, the "Named Executive
Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM
COMPENSATION
NAME AND PRINCIPAL SALARY BONUS OTHER SECURITIES ALL OTHER
POSITION FISCAL ($) ($) ANNUAL UNDERLYING COMPENSATION(2)
YEAR COMPENSATION OPTIONS(1) ($)
($) (SHARES)
<S> <C> <C> <C> <C> <C> <C>
Robert H. Gaynor 1998 30,000 - - 50,000 -
Chairman of the Board 1997 30,000 - - - -
and Chief Executive 1996 30,000 - - - -
Officer
Marc J. Zionts 1998 154,808 144,000 - 250,000 1,834
Chief Executive 1997 114,583 46,500 - 40,000 27
Officer- Westell, 1996 - - - - -
Inc.
J. William Nelson 1998 180,385 144,000 - 210,000 3,503
President and Chief 1997 160,000 49,000 27,116 (3) 40,000 2,284
Operating Officer- 1996 152,000 69,600 - - 4,435
Westell, Inc.
Richard P. Riviere 1998 140,000 103,894 - 12,000 2,981
Senior Vice President 1997 126,000 91,683 - 12,000 1,969
of Transaction 1996 120,000 20,712 - - 2,802
Services and Chief
Executive Officer
Conference Plus, Inc.
Gary F. Seamans (4) 1998 300,000 - - 75,000 764,904 (5)
Former Chairman of 1997 275,000 133,000 - 150,000 2,883
the Board and Chief 1996 275,000 212,800 - - 5,136
Executive Officer
Curtis L. Benton (6) 1998 160,000 78,300 - - 3,385
Former Executive Vice 1997 153,000 43,500 - 20,000 3,302
President and Chief 1996 153,000 69,600 - - 6,454
Administration
Officer-Westell, Inc.
(1) Stock options granted during fiscal 1998 were non-qualified stock options
of Class A Common Stock and were issued under the 1995 Stock Incentive Plan
of the Company.
(2) Includes matching contributions under the Company's 401(k) Profit Sharing
Plan and life insurance premiums, for fiscal 1998 as follows: Mr. Zionts:
$1,722 and $112, respectively; Mr. Nelson: $3,085 and $418, respectively;
Mr. Benton: $2,395 and $990, respectively; Mr. Riviere: $2,797 and $184,
respectively; and Mr. Seamans: $4,034 and $870, respectively.
(3) Includes promotion award watch valued at $15,215 and the related
reimbursement for the tax gross-up of $10,355 on the award.
(4) Mr. Seamans retired from the Company effective April 1, 1998.
(5) Includes $760,000 provided to Mr. Seamans in conjunction with his
retirement from the Company and in consideration for Mr. Seamans entering
intononcompetition and non solicitation agreements. See "-Executive Officer
Agreements."
(6) Mr. Benton resigned from the Company effective June 15, 1998 to pursue
other business interests.
</TABLE>
The following tables set forth the number of stock options granted to each
of the Named Executive Officers during fiscal 1998 and the stock option
exercises and exercisable and unexercisable stock options held by the Named
Executive Officers as of March 31, 1998. For purposes of table computations the
current fair market value at March 31, 1998 was equal to $13.219 per share.
<TABLE>
STOCK OPTION GRANTS IN THE LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT
ASSUMED ANNUAL RATES OF
INDIVIDUAL GRANTS STOCK PRICE APPRECIATION
FOR OPTION TERM
NUMBER OF PERCENT OF
SECURITIES TOTAL
UNDERLYING OPTIONS EXERCISE OR
OPTIONS GRANTED TO BASE PRICE EXPIRATION
NAME GRANTED(#) EMPLOYEES ($/SH)(1) DATE 5%($) 10%($)
IN FISCAL
YEAR
<S> <C> <C> <C> <C> <C> <C>
Robert H Gaynor 50,000(2) 2.40% $15,6875 12/05/07 $493,289 $1,250,091
Marc J. Zionts 50,000(3) 2.40% 12.5625 4/1/07 $396,469 $1,005,598
50,000(4) 2.40% 15.6875 12/05/07 $493,289 $1,250,091
150,000(5) 7.21% 10.75 12/23/07 $1,014,093 $2,569,910
J. William Nelson 50,000(4) 2.40% 12.5625 4/1/07 $395,024 $1,001,069
60,000 2.89% 15.6875 12/05/07 $591,947 $1,500,110
100,000 4.81% 13.0625 12/31/07 $821,493 $2,081,826
Richard P. Riviere 12,000(5) 0.58% 15.6875 12/05/07 $118,389 $300,022
Gary F. Seamans(6) 75,000(6) 3.61% 12.5625 4/1/07 $592,536 $1,501,604
Curtis L. - - - - - -
Benton(7)
_______________________
(1) Each exercise price is equal to the fair market value of the Common Stock on
the date of grant.
(2) Option vests monthly in equal installments beginning January 1, 1998.
(3) 15,000 shares vest in 8 years or earlier subject to the Company meeting
certain performance goals and the remaining shares vest in five equal annual
installments beginning on the first anniversary of the option grant.
(4) 20,000 shares vest in 8 years or earlier subject to the Company meeting
certain performance goals and the remaining shares vest in five equal annual
installments beginning on the first anniversary date of the option grant.
(5) Option vests in five equal annual installments beginning on the first
anniversary of the option grant.
(6) 15,000 shares became exercisable on April 1, 1998, and the remaining shares
under this option terminated as a result of Mr. Seamans' retirement from the
Company on April 1, 1998.
(7) Mr. Benton resigned from the Company effective June 15, 1998 and did not
receive any options in fiscal 1998.
</TABLE>
<TABLE>
STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
SHARES UNEXERCISED UNEXERCISED IN-
ACQUIRED ON VALUE OPTIONS AT THE-MONEY OPTIONS
EXERCISE # REALIZED FISCAL YEAR AT FISCAL YEAR END
($)(1) END (#) ($)
(EXERCISABLE/ (EXERCISABLE/
NAME UNEXERCISABLE) UNEXERCISABLE)(2)
<S> <C> <C> <C> <C>
Robert H Gaynor - - 3,178/ 46,822 -
Marc J. Zionts - - 13,000/ 277,000 $31,531/ $512,855
J. William Nelson - - 8,000/ 242,000 $28,250/ $161,446
Richard P. Riviere - - 2,400/ 21,600 $8,475/ $33,900
Gary F. Seamans - - 30,000/ 195,000 $105,939/ $472,978
Curtis B. Benton - - 4,000/ 16,000 $14,125/ $56,501
_______________________
(1) Value is calculated by subtracting the exercise price per share from
the fair market value at the time of exercise and multiplying this
amount by the number of shares exercised pursuant to the stock option.
(2) Value is calculated by subtracting the exercise price per share from
$13.219, the fair market value at March 31, 1998, and multiplying such
amount by the number of shares subject to the option.
</TABLE>
EXECUTIVE OFFICER AGREEMENTS
Pursuant to an agreement dated September 13, 1988 between the Company and
Richard Riviere, the Vice President of Transaction Services of the Company and
President of Conference Plus, Inc., a subsidiary of the Company ("Conference
Plus"), Mr. Riviere receives an annual base salary of not less than $75,000
during his employment with the Company. This agreement also provides Mr. Riviere
with a right of first refusal with respect to the Company's interest in
Conference Plus in the event the Company decides to sell such interest. In
addition, after his employment with the Company terminates, Mr. Riviere has
agreed not to compete with the Company for a period of two years.
In June 1998, the Company entered into Severance Agreements with each Named
Executive Officer and certain other executive officers of the Company (the
"Severance Agreements"). The Severance Agreements provide that in the event
such officer is terminated without Cause (as defined therein) or such officer
resigns for Good Reason (as defined therein), the Company shall pay to such
officer severance payments equal to such officer's salary and bonus for the
fiscal year in which the termination occurs, and the Severance Agreements also
provide for the payment of certain amounts upon the occurrence of certain
events. The executive officers entering into the Severance Agreements agreed
not to compete with the Company for one year in the event that their of
termination entitles them to severance payments and not to solicit any Company
employees for a period of one year after a termination of such officer's
employment with the Company. The Company's severance payment obligations and an
officer's right to this additional bonus shall terminate upon such officer's
death, resignation without Good Reason, retirement or termination for Cause.
In connection with Mr. Seamans' retirement from the Company in April 1998,
the Company and Mr. Seamans entered into a retirement agreement (the "Retirement
Agreement") in which the Company (i) provided to Mr. Seamans $760,000 and (ii)
agreed to reimburse Mr. Seamans for certain income tax planning expenses
incurred through December 31, 2000, in an amount not to exceed $25,000. Under
the Retirement Agreement, Mr. Seamans agreed (i) not to compete with the Company
for a period commencing upon the date of his retirement and ending December 31,
1999, (ii) not to solicit any current employees of the Company, and (iii) not to
engage in any form of conduct that disparages or otherwise impairs the
reputation, goodwill or commercial interests of the Company and its officers and
directors.
COMPENSATION AND STOCK INCENTIVE COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for the
Company's executive compensation policies. It annually determines the
compensation to be paid to the executive officers of the Company. The
Compensation Committee has two outside directors. The Stock Incentive Committee
administers and determines the awards to be granted under the Company's 1995
Stock Incentive Plan and the Employee Stock Purchase Plan.
OVERVIEW AND PHILOSOPHY
The executive compensation program is intended to provide overall levels of
compensation for the executive officers which are competitive for the industries
and the geographic areas within which they operate, the individual's experience,
and contribution to the long-term success of the Company. A leading consulting
firm provides for the Compensation Committee's consideration information
regarding executive compensation of companies that operate in similar
industries. The Hambrecht & Quist Communications Index (see the Performance
Graph) includes some of the companies which the Compensation Committee
considers. The Compensation Committee believes that its task of determining fair
and competitive compensation is ultimately judgmental.
The executive compensation program is composed of base salary, annual
incentive compensation, equity based incentives, and other benefits generally
available to all employees.
BASE SALARY
The base salary for each executive is intended primarily to be competitive
with companies in the industries and geographic areas in which the Company
competes. Surveys from outside firms and consultants are used to help determine
what is competitive. In making annual adjustments to base salary, the
Compensation Committee also considers the individual's performance over a period
of time as well as any other information which may be available as to the value
of the particular individual's past and prospective future services to the
Company. This information includes comments and performance evaluations by the
Company's Chief Executive Officer. The Committee considers all such data; it
does not prescribe the relative weight to be given to any particular component.
ANNUAL INCENTIVE COMPENSATION
Annual incentive compensation is ordinarily determined by a formula which
considers the financial goals and objectives of the Company.
LONG-TERM INCENTIVES
In general, both the Compensation Committee and the Stock Incentive
Committee believe that equity based compensation should form a part of an
executive's total compensation package. Stock options may be granted to
executives in order to directly relate a portion of the executive's earnings to
the stock price appreciation realized by the Company's stockholders over the
option period. Stock options also provide executives with the opportunity to
acquire an ownership interest in the Company. The number of shares covered by
each executive's option will be determined by factors similar to those
considered in establishing base salaries. In fiscal 1998, 967,000 stock options
were granted to executive officers. Some of these options for key executives
include vesting terms that are based upon the Company's meeting of certain
performance criteria.
In view of the departures of several executive officers in the last year,
the Compensation Committee approved the Severance Agreements, which are
described in the section "Management - Executive Officer Agreements," which
contain one year noncompetition and nonsolicitation provisions.
OTHER
Other benefits are generally those available to all other employees in the
Company, or a subsidiary, as appropriate.
COMPENSATION FOR CHIEF EXECUTIVE OFFICER
The Compensation Committee and the Stock Incentive Committee apply the same
standards in establishing the compensation of the Company's Chief Executive
Officer as are used for other executives. However, there are procedural
differences. The Chief Executive Officer does not participate in setting the
amount and nature of his compensation. For fiscal 1998, Gary Seamans received
options to purchase 75,000 shares of Class A Common Stock. Mr. Seamans retired
from the Company effective April 1, 1998. In consideration of Mr. Seaman's
longstanding service with the Company, the Company entered into the Retirement
Agreement, which is discussed in the section "Management - Executive Officer
Agreements."
The Compensation Committee does not expect that Section 162(m) of the
Internal Revenue Code will limit the deductibility of compensation expected to
be paid by the Company in the foreseeable future.
This report is submitted by the Compensation Committee of the Board of
Directors.
Respectfully Submitted By:
The Compensation Committee
Ormand J. Wade (Chair)
Paul A. Dwyer
Melvin J. Simon
The Stock Incentive Committee
Ormand J. Wade (Chair)
Robert H. Gaynor
Paul A Dwyer
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee is currently composed of Messrs. Wade (Chair),
Dwyer and Simon, the Assistant Secretary and Assistant Treasurer of the Company.
No interlocking relationship exists between the Company's Board of Directors or
Compensation Committee and the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past.
Since 1984, Melvin J. Simon & Associates, Ltd. has provided accounting and
other financial services to the Company. Mr. Simon, a director and the Assistant
Secretary and Assistant Treasurer of the Company and Co-Trustee of the Voting
Trust, is the sole owner of Melvin J. Simon & Associates, Ltd. The Company paid
Melvin J. Simon & Associates, Ltd. approximately $64,000, $44,000 and $66,000
in fiscal 1996, 1997 and 1998, respectively, for its services. The Company
believes that these services are provided on terms no less favorable to the
Company than could be obtained from unaffiliated parties.
The Company has granted Robert C. Penny III and Melvin J. Simon, as
Trustees of the Voting Trust, certain registration rights with respect to the
shares of Common Stock held in the Voting Trust.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's officers and
directors, and persons who own more than ten percent of the Company's
outstanding stock, file reports of ownership and changes in ownership with the
Securities and Exchange Commission. During fiscal 1998, to the knowledge of the
Company, all Section 16(a) filing requirements applicable to its officers,
directors, and greater than ten percent beneficial owners were complied with.
PERFORMANCE GRAPH
The following performance graph compares the quarterly percentage change in
the Company's cumulative total stockholder return on its Class A Common Stock
with the cumulative total return of the Nasdaq Stock Market--U.S. Index and the
Hambrecht & Quist Communications Index for the period commencing December 1,
1995 (the first day of trading of the Class A Common Stock on the Nasdaq
National Market) and ending March 31, 1998. The stock price performance shown in
the performance graph is not indicative of future stock price performance.
[GRAPH]
* $100 INVESTED ON 12/01/95 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING MARCH 31.
<TABLE>
<CAPTION>
TOTAL RETURN - DATA SUMMARY
CUMULATIVE TOTAL RETURN
12/1/95 3/96 3/97 3/98
<S> <C> <C> <C> <C> <C>
WESTELL TECHNOLOGIES INC. WSTL 100 285 206 196
NASDAQ STOCK MARKET (U.S.) INAS 100 105 116 176
H & Q COMMUNICATIONS IHQC 100 98 86 124
</TABLE>
ACCOUNTANTS
Selection of independent auditors is made by the Board of Directors upon
consultation with the Audit Committee. The Company's independent auditors for
fiscal 1998 were Arthur Andersen LLP. The Board of Directors will vote upon the
selection of auditors for the current fiscal year at a future Board meeting.
Representatives of Arthur Andersen LLP will be present at the Annual Meeting
with the opportunity to respond to appropriate questions and to make a statement
if they desire to do so.
PROPOSALS OF SECURITY HOLDERS
A stockholder proposal to be presented at the 1999 Annual Meeting must be
received at the Company's executive offices, 750 North Commons Drive Aurora,
Illinois 60504 by no later than April 9, 1999 for evaluation as to inclusion in
the Proxy Statement in connection with such meeting.
Stockholders wishing to bring a proposal before the 1999 Annual Meeting
(but not include the proposal in the Company's proxy statement) must cause
written notice of the proposal to be received by the Secretary of the Company at
the principal executive offices of the Company in Aurora, Illinois, by no later
than June 23, 1999, as well as comply with certain provisions of the Company's
bylaws. In order for a stockholder to nominate a candidate for director, such
notice must describe various matters regarding the nominee and the stockholder
giving the notice, including such information as name, address, occupation and
shares held. In order for a stockholder to bring other business before a
stockholders meeting, the notice for such meeting must include various matters
regarding the stockholder giving the notice and a description of the proposed
business. These requirements are separate from and in addition to the
requirements a stockholder must meet to have a proposal included in the
Company's proxy statement.
FINANCIAL INFORMATION
The Company has furnished its financial statements to stockholders in its
1998 Annual Report, which accompanies this Proxy Statement. In addition, the
Company will promptly provide, without charge to any stockholder, on the request
of such stockholder, an additional copy of the 1998 Annual Report and the
Company's most recent Form 10-K. Written requests for such copies should be
directed to Westell Technologies, Inc., Attention: Stephen J Hawrysz, Vice
President, Secretary, Treasurer and Chief Financial Officer, 750 North Commons
Drive, Aurora, Illinois 60504; telephone number (630) 375-4129.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Directors of the Company knows of no other business which may
come before the Annual Meeting. However, if any other matters are properly
presented to the Meeting, the persons named in the proxies will vote upon them
in accordance with their best judgment.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE PROXY AND
RETURN IT IN THE ENCLOSED STAMPED ENVELOPE.
By Order of the Board of Directors
STEPHEN J. HAWRYSZ
Vice President, Secretary, Treasurer
and Chief Financial Officer
Date: August 7, 1998
PROXY WESTELL TECHNOLOGIES, INC.
This Proxy is Solicited by the Board of Directors for the Annual Meeting of
Shareholders, September 9, 1998, 10:00 a.m. local time, at the Westell Corporate
Headquarters, 750 N. Common Drive, Aurora, IL 60504.
The undersigned hereby appoints Robert H. Gaynor and Melvin J. Simon, and
each of them, proxies with the powers the undersigned would possess if
personally present, and will full power of substitution, to vote all Class A
Common Stock and/or Class B Common Stock held of record by the undersigned in
Westell Technologies, Inc., upon all subjects that may properly come before the
Annual Meeting, including the matters described in the proxy statement furnished
herewith, subject to any directions indicated on the reverse side of this card.
If no directions are given, the proxies will vote in accordance with the
Directors' recommendations on the subjects listed below and at their discretion
on any other matter that may properly come before the Annual Meeting or any
adjournment thereof.
If you do not sign and return a proxy, or attend the Annual Meeting and
vote by ballot, your shares cannot be voted, nor your instructions followed.
Directors recommend a vote "FOR":
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to vote (except
as marked to the contrary) for all
listed below
NOMINEES: STEFAN D. ABRAMS ROBERT C. PENNY III
MICHAEL A. BRUNNER JOHN W. SEAZHOLTZ
PAUL A. DWYER MELVIN J. SIMON
ROBERT H. GAYNOR ORMAND J. WADE
________________________________________________________________________________
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided above.
(Continued, and to be signed on the other side)
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the Annual Meeting or any adjournment
thereof.
Please sign exactly as name or names appear
on this proxy, if stock is held jointly, each
holder should sign. If signing as attorney,
trustee, executor, administrator, custodian,
guardian or corporate officer, please give
full title.
Date: ________________________________, 1998
_____________________________________________
Signature
_____________________________________________
Signature
VOTES MUST BE INDICATED (X) IN BLACK
