<PAGE>
[LOGO OF OMNIPOINT CORPORATION APPEARS HERE]
3 BETHESDA METRO CENTER
SUITE 400
BETHESDA, MARYLAND 20814
(301) 951-2500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERSTO BE HELD ON MAY 29, 1997
The Annual Meeting of Stockholders (the "Annual Meeting") of Omnipoint
Corporation, a Delaware corporation (the "Company"), will be held on Thursday,
May 29, 1997, at 2:00 p.m., local time, at the offices of Piper & Marbury
L.L.P., 1200 Nineteenth Street, N.W., Suite 700, Washington, D.C. 20036 for
the following purposes:
1. To elect eight (8) directors to hold office until the next annual
meeting of stockholders and until their respective successors have been
elected or appointed;
2. To approve the adoption of the Omnipoint 1997 Omnibus Stock Plan;
3. To ratify the appointment of Coopers & Lybrand L.L.P. as the Company's
independent auditors for the year ending December 31, 1997; and
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement thereof.
The foregoing matters are described in more detail in the enclosed Proxy
Statement.
The Board of Directors has fixed the close of business on April 15, 1997, as
the record date for the determination of the stockholders entitled to notice
of, and to vote at, the Annual Meeting and any postponement or adjournment
thereof. Only those stockholders of record of the Company as of the close of
business on that date will be entitled to vote at the Annual Meeting or any
postponement or adjournment thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IT IS IMPORTANT
THAT YOUR SHARES BE REPRESENTED AT THE MEETING REGARDLESS OF THE NUMBER YOU
OWN. WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON, YOU ARE URGED TO COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE
ENVELOPE ENCLOSED FOR THAT PURPOSE. YOU WILL BE MOST WELCOME AT THE MEETING
AND MAY THEN VOTE IN PERSON IF YOU SO DESIRE, EVEN THOUGH YOU MAY HAVE
EXECUTED AND RETURNED THE PROXY. ANY STOCKHOLDER WHO EXECUTES SUCH A PROXY MAY
REVOKE IT AT ANY TIME BEFORE IT IS EXERCISED.
By Order of the Board of Directors,
/s/ Edwin M. Martin, Jr.,
Edwin M. Martin, Jr.,
Secretary
Bethesda, Maryland
April 28, 1997
<PAGE>
[LOGO OF OMNIPOINT CORPORATION APPEARS HERE]
3 BETHESDA METRO CENTER
SUITE 400
BETHESDA, MARYLAND 20814
(301) 951-2500
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Omnipoint Corporation, a Delaware corporation (the
"Company"), of proxies in the accompanying form for use in voting at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held on Thursday,
May 29, 1997 at 2:00 p.m., local time, at the offices of Piper & Marbury
L.L.P., 1200 Nineteenth Street, N.W., Washington, D.C. 20036, and any
adjournment or postponement thereof. This Proxy Statement, the accompanying
proxy card and the Company's Annual Report to Stockholders are first being
mailed to stockholders on or about April 28, 1997.
VOTING SECURITIES
Only stockholders of record on the books of the Company as of 5:00 p.m.,
April 15, 1997 (the "Record Date"), will be entitled to vote at the Annual
Meeting. At the close of business on the Record Date, the Company had
51,333,323 shares of Common Stock outstanding, entitled to one vote per share.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's transfer agent. The Inspector will also determine whether or not a
quorum is present. Except with respect to the election of directors and except
in certain other specific circumstances, the affirmative vote of a majority of
shares present in person or represented by proxy at a duly held meeting at
which a quorum is present is required under Delaware law for approval of
proposals presented to stockholders. In general, Delaware law also provides
that a quorum consists of a majority of the shares entitled to vote and
present in person or represented by proxy. The Inspector will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum and as negative votes for purposes of
determining the approval of any matter submitted to the stockholders for a
vote.
The shares represented by the proxies received, properly dated and executed
and not revoked will be voted at the Annual Meeting in accordance with the
instructions of the stockholders. A proxy may be revoked at any time before it
is exercised by delivering to the Company (Attention: Bradley E. Sparks) a
written notice of revocation or a duly executed proxy bearing a later date or
by attending the Annual Meeting and voting in person. Any proxy which is
returned using the form of proxy enclosed and which is not marked as to a
particular item will be voted FOR the election of directors, FOR the adoption
of the Omnipoint 1997 Omnibus Stock Plan, FOR ratification of the appointment
of the designated independent auditors and as the proxy holders deem advisable
on other matters that may come before the meeting, as the case may be with
respect to the item not marked. If a broker indicates on the enclosed proxy or
its substitute that it does not have discretionary authority as to certain
shares to vote on a particular matter, those shares will not be considered as
present with respect to that matter. The Company believes that the tabulation
procedures to be followed by the Inspector are consistent with the general
statutory requirements in Delaware concerning voting of shares and
determination of a quorum.
The cost of soliciting proxies will be borne by the Company. In addition,
the Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to such beneficial owners. Proxies may also be solicited by certain
of the Company's directors, officers and regular employees, without additional
compensation, personally or by telephone or telegram.
<PAGE>
PROPOSAL NO 1: ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting to serve until the
next annual meeting of stockholders and until their respective successors are
elected or appointed. The eight nominees receiving the highest number of
affirmative votes will be elected as directors. In the event any nominee is
unable to unwilling to serve as a nominee, the proxies may be voted for the
balance of those nominees named and for any substitute nominee designated by
the present Board of Directors or the proxy holders to fill such vacancy, or
for the balance of those nominees named without nomination of a substitute, or
the Board of Directors may be reduced in accordance with the Bylaws of the
Company. The Board of Directors has no reason to believe that any of the
persons named will be unable or unwilling to serve as a nominee or as a
director if elected.
In respect of such nominees, the following information is furnished:
Douglas G. Smith, age 43, founded the Company in June 1987 and has
continuously served as Chairman of the Board, President and Chief Executive
Officer. From 1985 to 1987, he was one of four professionals in a small
venture capital fund focusing on opportunities in the electronic information
industry. From 1980 to 1985, he founded and managed the Investment Data
Systems Division of Strategic Information (a division of Ziff-Davis
Publishing). He received his M.B.A. from the Harvard Business School, an M.A.
from Oxford University and his B.A. from Georgetown University.
George F. Schmitt, age 53, has served as President of Omnipoint
Communications Inc., a subsidiary of the Company ("OCI"), Executive Vice
President of the Company and Director since October 1, 1995. Prior to joining
Omnipoint, from November 1994 to September 1995, Mr. Schmitt was President and
Chief Executive Officer of PCS PrimeCo, a personal communications service
partnership formed by AirTouch Communications, Inc. ("AirTouch"), Bell
Atlantic Corporation, NYNEX Corporation and US West Inc. From November 1993 to
November 1994, Mr. Schmitt was Executive Vice President, International
Operations of AirTouch. From January 1990 to March 1994 he served as Vice
President of Pacific Telesis Group, a predecessor to AirTouch, and was given
the responsibility of building and operating the first digital cellular system
in the world, the D2 GSM network in Germany in 1990. Prior to January 1990,
Mr. Schmitt held various management positions with Pacific Telesis Group and
Pacific Bell. Mr. Schmitt is a member of the Board of Directors of Objective
Systems Integrators, Inc. Mr. Schmitt received his MSM degree from Stanford
and a B.A. from St. Mary's College of California.
Richard L. Fields, age 40, has served as a Director of the Company since
September 1991. Since February 1994, Mr. Fields has been a Managing Director
and Executive Vice President of Allen & Company Incorporated ("Allen"), and
prior to such time he was a Vice President of Allen.
Paul J. Finnegan, age 44, has served as a Director of the Company since
August 1993. Since January 1993, Mr. Finnegan has been Vice President of
Madison Dearborn Partners, Inc., the general partner of the general partner of
Madison Dearborn Capital Partners, L.P. Previously, he served in various
positions at First Capital Corporation of Chicago and its affiliates. Mr.
Finnegan currently serves as a director of The Skyline Fund.
Evelyn Goldfine, age 50, has served as a Director of the Company since
October 1991. Ms. Goldfine is a private venture investor who joined the
Company as Director of Administration in 1990, and became Chief Administrative
Officer in 1994. She is a certified public accountant and holds a B.A. degree
from the City University of New York and an accounting degree from Bentley
College.
Arjun Gupta, age 36, has served as a Director of the Company since August
1995. Mr. Gupta is a partner of Telesoft Partners, which he founded in January
1997. From August 1994 to December 1996, Mr. Gupta was a Vice President of
Chatterjee Management Company. From November 1993 to July 1994, Mr. Gupta was
a private consultant. Prior to that, from June 1993, he was with Kleiner
Perkins Caufield & Byers and from October 1989 through June 1993, Mr. Gupta
was with McKinsey & Company.
2
<PAGE>
James N. Perry, Jr., age 36, has been a Director of the Company since August
1993. In January 1993, he became Vice President of Madison Dearborn Partners,
Inc. Previously, Mr. Perry served in various positions at First Capital
Corporation of Chicago and its affiliates. Mr. Perry currently serves as a
director of Clearnet Communications, Inc.
James J. Ross, age 58, has been Vice-Chairman of the Board since 1989. Mr.
Ross is a private venture investor. Since February 1995, Mr. Ross has been Of
Counsel in the law firm of Becker Ross Stone DeStefano & Klein and prior to
such time, he was a partner at such firm.
Unless marked otherwise, proxies received will be voted FOR the election of
each of the nominees named above.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES
NAMED ABOVE.
THE BOARD OF DIRECTORS AND COMMITTEES
The Company's Board of Directors met ten times during 1996. Except for
Messrs. Gupta and Finnegan, all of the directors attended more than 75% of all
meetings of the Board and meetings of Committees of the Board of Directors on
which such directors served.
The Audit Committee currently consists of Messrs. Finnegan and Ross and met
once during 1996. This Committee reviews and supervises the financial controls
of the Company, including selecting the firm of independent accountants to
audit the financial statements of the Company and monitoring the effectiveness
of the audit effort and the Company's financial and accounting organization
and financial reporting.
The Compensation Committee currently consists of Messrs. Fields, Gupta and
Perry and met twice during 1996. This Committee establishes and reviews
annually the Company's general compensation policies applicable to the
Company's executive officers, reviews and approves the level of compensation
awarded to the Company's Chief Executive Officer and other executive officers,
and prepares and delivers annually to the Board of Directors a report
disclosing compensation policies applicable to the Company's executive
officers and the bases for the Chief Executive Officer's compensation during
the last fiscal year. The Compensation Committee also administers the
Company's Amended and Restated 1990 Stock Option Plan and the Omnipoint 1997
Omnibus Stock Plan. In addition, the Compensation Committee determines the
recipients and terms of any non-plan grants, sales and awards of the Company's
securities to employees, officers, directors and consultants of the Company.
The Board of Directors currently does not have a nominating committee or a
committee performing the functions of a nominating committee. Although there
are no formal procedures for stockholders to nominate persons to serve as
directors, the Board of Directors will consider recommendations from
stockholders, which should be addressed to Edwin M. Martin, Jr., Secretary of
the Company, at the Company's address.
Directors do not receive any fees for service on the Board of Directors.
Non-employee directors are reimbursed for their out-of-pocket travel expenses
for each Board of Directors and Committee meeting attended. Mr. Ross provides
for a fee consulting services involving business development and investor and
government relations.
3
<PAGE>
EXECUTIVE OFFICERS
In addition to Messrs. Smith and Schmitt and Ms. Goldfine, the following are
the executive officers of the Company:
Kjell S. Andersson, age 54, was named Executive Vice President of Omnipoint
Corporation and President of the Technology Division in February 1997. Prior
to joining the Company, he was Executive Vice President and General Manager of
Ericsson Radio Systems AB for five years. Before that, he was President and
CEO of Ericsson Radio Access AB, which designed, produced, and distributed
radio base stations. From 1982 to 1990, Mr. Andersson served in various
executive level positions with Ericsson Radar Electronics AB and prior to
that, spent nine years in engineering, marketing and general management
positions with SATT Electronics AB. Mr. Andersson holds an MSc degree in
Electronic Engineering from the Royal Institute of Technology in Stockholm.
Bradley E. Sparks, age 50, became the Chief Financial Officer of Omnipoint
Corporation in April 1995. Prior to that time, he was employed with MCI
Communications Corporation, an international telecommunications company where
from 1993 to 1995, he held the position of Vice President and Controller and,
from 1988 to 1993, served as Vice President and Treasurer. Prior to MCI, he
worked for Ryder System, Inc. for over twelve years in various financial
management positions. Mr. Sparks holds a B.S. degree from the U.S. Military
Academy at West Point and a M.S. degree in Management from the Alfred P. Sloan
School of Management at MIT. He is a certified public accountant.
Harry Plonskier, age 44, became Vice President, Finance of Omnipoint
Communications Inc. in July 1994. From 1986 to 1992 Mr. Plonskier served as
Chief Financial Officer of Cellular One of New York (the McCaw/LIN cellular
system) and prior to that, he served as Controller. Mr. Plonskier holds an
M.B.A. and a B.A. from the University of Michigan.
All executive officers hold office until their successors are appointed.
There are no family relationships among any of the directors or executive
officers of the Company.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain annual compensation information for
the Company's Chief Executive Officer and the other four most highly paid
executive officers of the Company whose annual salary exceeded $100,000 as of
December 31, 1996 (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-
TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------- ----------------------
RESTRICTED OPTIONS
NAME AND OTHER ANNUAL STOCK (IN NUMBER
PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) AWARDS OF SHARES)
------------------ ---- -------- -------- --------------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Douglas G. Smith(3).... 1996 $212,500 $127,500 $27,300 -- --
President and Chief 1995 175,625 100,350 28,928 -- --
Executive Officer 1994 110,000 115,000(4) 15,996 -- --
George F. Schmitt...... 1996 212,500 127,500 7,750 -- --
Executive Vice Presi-
dent 1995 36,458(5) 50,000 -- $ 0(6) 1,062,500
1994 -- -- -- -- --
Randall R. Meals....... 1996 175,000 0 62,700(7) -- --
Chief Operating Offi-
cer, 1995 175,000 12,000 111,930(8) -- 125,000(10)
Technology Division 1994 12,676 0 263 0(9) 125,000(11)
Bradley E. Sparks...... 1996 154,896 40,000 19,875(12) -- --
Chief Financial 1995 100,938 28,500 5,298 0(13) 100,000
Officer 1994 -- -- -- -- --
Harry Plonskier........ 1996 134,250 32,280 6,000 -- 8,000(14)
Vice President--Fi-
nance, 1995 127,312 25,925 13,986 -- 37,759(10)
Omnipoint Communica-
tions 1994 62,500 12,500 16,904 -- 37,759(11)
</TABLE>
- - --------
(1) The Company's executive officers are eligible for annual cash bonuses.
Such bonuses are generally based upon achievement of corporate and
individual performance objectives determined by the Compensation
Committee; however, certain bonuses are specified in employment
agreements.
(2) Includes amounts reimbursed in connection with a supplemental benefit
program and premiums on life insurance.
(3) "Other Annual Compensation" includes office allowances for all years.
(4) Represents several bonuses earned in 1994 based on performance goals and
paid in July 1995.
(5) Mr. Schmitt joined the Company in October 1995. His annual salary for
fiscal 1995 would have been $175,000 if he were with the Company for the
entire year.
(6) Represents 125,000 shares of Common Stock at a value of $6.00 per share
on the date of the restricted stock grant, net of $6.00 per share paid by
the Named Officer. The aggregate value of such shares at December 31,
1995, based on a fair market value of $14.00 per share, net of
consideration, was $1 million.
(7) Mr. Meals resigned from the Company on January 31, 1997. This amount
includes $58,500 for forgiveness of a loan in accordance with Mr. Meal's
termination agreement. See "Employment Agreements."
(8) Includes $54,250 for forgiveness of a loan and $53,315 for relocation
expenses in accordance with Mr. Meals' employment agreement.
(9) Represents 25,000 shares of Common Stock at a value of $10.00 per share
on the date of the restricted stock grant, net of $10.00 per share paid
by the Named Officer. The aggregate value of such shares at December 31,
1995, based on a fair market value of $14.00 per share, net of
consideration, was $100,000.
(10) Represents the repricing in 1995 of options which were originally granted
in 1994 and which vest over five years.
(11) Represents options which were subsequently cancelled in connection with
their repricing in 1995.
5
<PAGE>
(12) Includes $16,275 for forgiveness of a loan in accordance with Mr. Sparks'
employment agreement. See "Employment Agreements."
(13) Represents 12,500 shares of Common Stock at a value of $6.00 per share on
the date of the restricted stock grant, net of $6.00 per share paid by
the Named Officer. Such shares vest in annual installments over five
years, beginning April 1996. The aggregate value of such shares at
December 31, 1995, based on a fair market value of $14.00 per share, net
of consideration, was $100,000.
(14) Includes options for 3,000 shares, which were granted below fair market
value.
The following table contains further information concerning the stock option
grants made to each of the Named Officers during the fiscal year ended
December 31, 1996.
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
INDIVIDUAL GRANTS OPTION TERM (4)
--------------------------------------------------- ----------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE OR
OPTIONS IN FISCAL BASE PRICE
NAME GRANTED (1) YEAR (2) ($/SH) EXPIRATION DATE 5% 10%
---- ----------- ---------- ----------- --------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Douglas G. Smith........ -- -- -- -- -- --
Randall R. Meals........ -- -- -- -- -- --
Harry Plonskier......... 5,000 * $29.00(3) 10/1/2006 $ 91,190 $ 231,093
3,000 * 0.01 10/1/2006 19.00 47.00
George F. Schmitt....... -- -- -- -- -- --
Bradley E. Sparks....... -- -- -- -- -- --
</TABLE>
- - --------
* Less than 1%.
(1) Stock options vest over five years, 20% in the first year and on an annual
basis thereafter, provided that such officer remains continuously employed
by the Company.
(2) Based on options to purchase 1,104,568 shares granted in fiscal 1996.
(3) These options were granted with exercise prices equal to the fair market
value, as determined by the Board of Directors, on the grant date.
(4) These amounts are based on compounded annual rates of stock price
appreciation of five and ten percent over the 10-year term of the options,
are mandated by rules of the Securities and Exchange Commission and are
not indicative of expected stock performance. Actual gains, if any, on
stock option exercises are dependent on future performance of the Common
Stock, overall market conditions, as well as the option holders' continued
employment throughout the vesting period. The amounts reflected in this
table may not necessarily be achieved or may be exceeded. The indicated
amounts are net of the option exercise price but before taxes that may be
payable upon exercise.
6
<PAGE>
The following table sets forth certain information regarding options to
purchase Common Stock held as of December 31, 1996 by each of the Named
Officers. None of such Named Officers exercised any options during the year
ended December 31, 1996.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED IN-
NUMBER OF SECURITIES UNDERLYING THE-
UNEXERCISED OPTIONS AT FISCAL MONEY OPTIONS AT
YEAR END FISCAL YEAR END (1)
---------------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- --------------- ---------------- ----------- -------------
<S> <C> <C> <C> <C>
Douglas G. Smith........ -- -- -- --
Harry Plonskier......... 28,547 17,212 $ 378,248 $ 179,779
Randall R. Meals(2)..... 50,000 75,000 662,500 993,750
George F. Schmitt....... 100,000 962,500 1,159,375 5,450,000
Bradley E. Sparks....... 33,320 66,680 441,490 883,511
</TABLE>
- - --------
(1) Calculated on the basis of $19.25 per share, the fair market value of the
Common Stock at December 31, 1996, less the exercise price payable for
such shares, multiplied by the number of shares underlying the option.
(2) Includes options for 20,000 shares which will expire on April 30, 1997.
Excludes options for 75,000 shares which were cancelled following Mr.
Meals' resignation from the Company in January 1997.
EMPLOYMENT AGREEMENTS
The Company and OCI entered into an employment agreement with Mr. Schmitt
effective October 1, 1995, which provides for an initial annual salary of
$175,000, which is guaranteed by the Company, in addition to certain other
benefits. Pursuant to the agreement, Mr. Schmitt serves as President of OCI
and Executive Vice President of the Company. Mr. Schmitt is eligible for an
annual bonus of up to $50,000 or such greater amount as determined by the
Compensation Committee. In the event the agreement is terminated without cause
by the Company or upon the occurrence of certain events, for a period of up to
two years following termination, Mr. Schmitt is entitled to receive severance
compensation in the amount of the base salary, bonus compensation and medical
benefits for the most recent 12-month period which would otherwise be payable
to Mr. Schmitt. Mr. Schmitt's employment agreement also provides for a special
bonus to be paid to him to cover the principal and interest payments due under
a note from Mr. Schmitt to the Company for the purchase of 125,000 shares of
Common Stock. Mr. Schmitt's shares are subject to a five year repurchase
option by the Company that declines by 20% per year (a "Five Year Repurchase
Option"). Mr. Schmitt's employment agreement provides that during the
employment period and for two years thereafter, Mr. Schmitt will not engage in
the business of providing wireless personal communication services anywhere in
the territory covering the New York MTA or other geographic regions covered by
licenses for which Mr. Schmitt has managerial responsibility.
The Company granted to Mr. Schmitt an option to purchase 437,500 shares at a
purchase price of $6.00 per share; an option to purchase 250,000 shares at a
purchase price of $16.00 per share; an option to purchase 250,000 shares at a
purchase price of $20.00 per share and an option to purchase 125,000 shares at
a purchase price of $24.00 per share. All options vest in annual installments
over a five year period except the 125,000 share option which vests as to
12,500 shares on the first anniversary of the grant, 25,000 shares on each of
the next four anniversaries and 12,500 shares on the sixth anniversary.
On April 17, 1995, Mr. Sparks entered into an employment agreement with the
Company, pursuant to which Mr. Sparks serves as Vice President, Finance and
Chief Financial Officer of the Company. The agreement provides for an initial
annual base salary of $142,500, in addition to certain other benefits. Mr.
Sparks participates in the Executive Bonus Plan whereby he is eligible for
annual bonus payments in an amount up to 20% of his base salary, at the
discretion of the Chief Executive Officer and the Board of Directors. See "--
Executive Bonus
7
<PAGE>
Plan." Upon termination of the agreement by the Company without cause, Mr.
Sparks is entitled to receive the compensation and benefits which would
otherwise be payable to Mr. Sparks for a maximum of six months following such
termination. Mr. Sparks' employment agreement provides for an annual special
bonus to cover the principal and interest payments due under a note from Mr.
Sparks to the Company for the purchase of 12,500 shares of Common Stock. Mr.
Sparks' shares are subject to a Five Year Repurchase Option. The Company
granted Mr. Sparks an option to purchase 100,000 shares at a purchase price of
$6.00 per share, vesting over a five year period.
Mr. Plonskier entered into an employment agreement with OCI effective July
5, 1994, to serve as Vice President, Finance with an initial annual base
salary of $125,000 per year, in addition to certain other benefits. The
agreement further provides that Mr. Plonskier participates in the Executive
Bonus Plan whereby he is eligible for an annual bonus in an amount up to 20%
of his base salary, at the discretion of the Compensation Committee of the
Board of Directors.
Each of Mr. Schmitt's, Mr. Sparks' and Mr. Plonskier's employment agreements
provides that the agreement may be terminated by the employee upon 30 days
prior written notice, or by the Company upon seven days (30 days in the case
of Mr. Plonskier) prior written notice. Additionally, each agreement contains
a general noncompete provision applicable during the employment period and for
one year thereafter (180 days in the case of Mr. Schmitt in addition to the
two year non-compete described above), which prohibits the employee from
directly or indirectly engaging in the business of the Company (OCI in the
case of Mr. Plonskier), and from soliciting the employees, clients or
customers of the Company (OCI in the case of Mr. Plonskier). Such
noncompetition provision is not violated by the employee's ownership of less
than 1% of the outstanding stock of a publicly held corporation.
In December 1994, Mr. Meals entered into an employment agreement with the
Company pursuant to which Mr. Meals served as Chief Operating Officer of the
Company's Technology Division, and provided for a base salary of $175,000 per
year in addition to certain other benefits. Mr. Meals' employment agreement
provided for an annual special bonus to cover the principal and interest
payments due under a note from Mr. Meals to the Company for the purchase of
25,000 shares of Common Stock. Mr. Meals' shares were subject to a Five Year
Repurchase Option. Mr. Meals resigned from the Company on January 31, 1997.
Pursuant to his termination agreement, the Company repurchased from Mr. Meals
15,000 shares of Common Stock at $6.00 per share and in lieu of payment of a
bonus in December 1996, the Company cancelled a loan in the amount of $58,500
owed by Mr. Meals. As of his resignation, Mr. Meals had vested 50,000 shares
pursuant to options, 20,000 of which will expire on April 30, 1997, and the
remaining 30,000 will expire on July 31, 1997.
EXECUTIVE BONUS PLAN
Senior managers of the Company are eligible to receive an annual cash bonus
award, targeted at an average of 20% of annual base compensation. Each
eligible manager is measured against individually established goals and
objectives that will determine the award.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors is
responsible for establishing compensation policies with respect to the
Company's executive officers, including the Chief Executive Officer and the
other executive officers, and setting the compensation for these individuals.
The Compensation Committee consists of the three nonemployee directors listed
below.
The Compensation Committee seeks to achieve three broad goals in connection
with the Company's executive compensation programs and decisions regarding
individual compensation. First, the Compensation Committee structures
executive compensation programs in a manner that the Committee believes will
enable the
8
<PAGE>
Company to attract and retain key executives. Second, the Compensation
Committee establishes compensation programs that are designed to reward
executives for the achievement of specified business objectives of the
Company. By tying compensation in part to particular goals, the Compensation
Committee believes that a performance-oriented environment is created for the
Company's executives. Finally, the Company's executive compensation programs
are intended to provide executives with an equity interest in the Company so
as to link a portion of the compensation of the Company's executives with the
performance of the Company's Common Stock.
The compensation programs for the Company's executives established by the
Compensation Committee consist of three elements tied to the foregoing
objections: base salary; annual cash bonus; and stock-based equity incentives,
primarily participation in the Company's stock option plans. In establishing
base salaries for executives, the Compensation Committee monitors standards at
comparable companies, particularly those that are in the same industry as the
Company or related industries and/or located in the same general geographical
area as the Company, considers historic salary levels of the individual and
the nature of the individual's responsibilities and compares the individual's
base salary with those of other executives at the Company. To the extent
determined appropriate, the Compensation Committee also considers general
conditions and the Company's financial performance in establishing base
salaries of executives. In deciding to award options, the Compensation
Committee also considers the number of options outstanding or previously
granted and the aggregate size of current awards.
For the year ended December 31, 1996, increases in the base salaries and
bonuses of the Chief Executive Officer and the other named executive officers,
were tied to performance-oriented goals set by the Compensation Committee
earlier in the year. The Chief Executive Officer met or exceeded performance
goals established by the Compensation Committee for 1996, including among
other achievements, the successful completion of the Company's initial public
offering and follow-on offering and the completion of significant debt
financing.
Based on its evaluation of the performance of the executive officers, the
Compensation Committee believes that the Company's executive officers are
committed to achieving positive long-term financial performance and enhance
shareholder value, and that the compensation policies and programs discussed
in this report have motivated the Company's executive officers to work toward
these goals.
Section 162(m) of the Internal Revenue Code of 1986 (the "Code") limits the
Company's Federal income tax deduction for certain executive compensation in
excess of $1 million paid to Chief Executive Officer and the four next highest
paid named executive officers. The $1 million deduction limit does not apply,
however, to "performance-based compensation" as that term is defined in
Section 162(m)(4)(C) of the Code and the regulations promulgated thereunder.
The Company does not anticipate that compensation payable to any executive
officer will exceed $1 million for fiscal 1997.
The Committee recognizes the possibility that at times, the amount of the
base salary of a named executive officer, and other compensation not described
in the preceding paragraph, may exceed $1 million and therefore may not be
fully deductible for Federal income tax purposes. The Committee will make a
determination at any such time whether to authorize the payment of such
amounts without regard to deductibility or whether the terms of such payment
should be modified as to preserve any deduction otherwise available.
James N. Perry, Jr.
Richard L. Fields
Arjun Gupta
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee was formed in October 1995, and the members of
the committee are Messrs. Fields, Perry and Gupta. None of the members was at
any time during the fiscal year ended December 31, 1996, or at any other time,
an officer or employee of the Company. No executive officer of the Company
serves as a member of the board of directors or compensation committee of any
entity that has one or more executive officers serving as members of the
Company's Board of Directors or Compensation Committee.
9
<PAGE>
PERFORMANCE GRAPH
The following graph shows a 12 month comparison of cumulative total return
on the Company's Common Stock, based on the market price of the Common Stock
assuming reinvestment of dividends, with a comparable return of the S&P 500
Index (the "S&P 500") and the CRSP Index of the Nasdaq Telecommunications
Stocks (the "CRSP"), for the period beginning January 26, 1996, the day
Omnipoint Corporation's Common Stock began trading, through December 31, 1996.
The graph was derived from a very limited period of time, and as a result, is
not necessarily indicative of possible future performance of the Company's
Common Stock.
COMPARISON OF TWELVE-MONTH CUMULATIVE
TOTAL RETURN AMONG OMNIPOINT CORPORATION
THE S&P 500 INDEX AND THE CRSP INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
JAN-96 MAR-96 JUN-96 SEP-96 DEC-96
<S> <C> <C> <C> <C> <C>
Omnipoint $100 $121 $124 $139 $92
S&P 500 $100 $104 $109 $111 $119
CRSP $100 $106 $108 $104 $104
</TABLE>
10
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of the Common Stock as of March 31, 1997, by: (i) each person who is
known by the Company to own beneficially more than 5% of the Common Stock;
(ii) each of the Company's directors; (iii) each of the Named Officers; and
(iv) all current officers and directors as a group. Unless otherwise
indicated, each person has sole voting power and investment power with respect
to the shares attributed to them.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY OWNED
AS OF
MARCH 31, 1997(1)
------------------
NUMBER OF
BENEFICIAL OWNER SHARES PERCENT
- - ---------------- ---------- -------
<S> <C> <C>
Avance Capital(2)........................................... 8,968,000 17.47%
Madison Dearborn Capital Partners, L.P.(3).................. 6,190,156 12.00
Allen & Company Incorporated(4)............................. 2,747,947 5.22
Richard Fields(5)........................................... 3,189,065 6.03
Paul J. Finnegan(6)......................................... 6,190,156 12.00
Evelyn R. Goldfine(7)(14)................................... 350,945 *
Arjun Gupta................................................. 0 --
Randall R. Meals(8)......................................... 60,834 *
James N. Perry, Jr.(9)...................................... 6,190,156 12.00
Harry Plonskier(10)(15)..................................... 35,734 *
James J. Ross(11)........................................... 1,719,720 3.30
George F. Schmitt(12)(15)................................... 230,771 *
Douglas G. Smith(13)(15).................................... 11,343,000 22.10
Bradley E. Sparks(14)(15)................................... 51,220 *
All officers and directors as a group (11 persons)(16)...... 23,171,445 42.61
</TABLE>
- - --------
* Less than one percent.
(1) As of March 31, 1997, the Company had outstanding 51,331,657 shares of
Common Stock. Amounts include outstanding options or warrants which are
exercisable within 60 days of March 31, 1997. Shares of Common Stock
subject to outstanding options or warrants which are exercisable within
60 days of March 31, 1997, are deemed outstanding for computing the
percentage ownership of the persons holding such options but are not
deemed outstanding for the percentage ownership of any other person.
(2) Avance Capital is a proprietorship. Mr. Smith has voting and investment
power with respect to these shares. Its address is 8300 Boone Blvd.,
Suite 500, Vienna, VA 22180.
(3) Includes 229,167 shares of Common Stock issuable upon exercise of
outstanding warrants. All of such shares are held of record by Madison
Dearborn Capital Partners, L.P. ("MDCP"). MDCP is a limited partnership.
Madison Dearborn Partners, L.P. ("MDP") is the general partner of MDCP.
Investment and voting control over securities owned by MDCP is shared by
a committee of the limited partners of MDP (the "L.P. Committee"). The
address of MDCP is Three First National Plaza, Suite 1330, Chicago,
Illinois 60602.
(4) Includes 1,300,603 shares of Common Stock issuable upon exercise of
outstanding warrants. Excludes shares and shares issuable upon exercise
of warrants which are beneficially owned by certain officers, directors
and employees of Allen and related persons. Allen disclaims beneficial
ownership of such shares. Allen's address is 711 Fifth Avenue, New York,
NY 10022.
(5) Includes 215,250 shares of Common Stock issuable upon exercise of
outstanding warrants, and 2,747,947 shares (including shares issuable
upon exercise of outstanding warrants) held by Allen. Mr. Fields is a
Managing Director of Allen.
11
<PAGE>
(6) All of such shares are held of record by MDCP. Mr. Finnegan is a member
of the L.P. Committee. Mr. Finnegan may therefore be deemed to share
investment control with respect to the shares of Common Stock owned by
MDCP and may therefore be deemed to have beneficial ownership of shares
of Common Stock owned by MDCP. The business address of Mr. Finnegan is
c/o MDP Inc., Three First National Plaza, Suite 1330, Chicago, Illinois
60602.
(7) Includes 245,862 shares of Common Stock issuable upon exercise of
outstanding options and 78,025 shares held in a family limited
partnership. Ms. Goldfine is a general partner in such partnership and
shares voting and investment power with regard to 78,025 shares so held.
(8) Includes (i) 50,000 shares of Common Stock issuable upon exercise of
outstanding stock options, 20,000 of which will expire on April 30, 1997;
and (ii) 300 shares owned by his minor children. Mr. Meals resigned from
the Company on January 31, 1997.
(9) All of such shares are held of record by MDCP. Mr. Perry is a member of
the L.P. Committee. Mr. Perry may therefore be deemed to share investment
control with respect to the shares of Common Stock owned by MDCP and may
therefore be deemed to have beneficial ownership of shares of Common
Stock owned by MDCP. The business address of Mr. Perry is c/o MDP Inc.,
Three First National Plaza, Suite 1330, Chicago, Illinois 60602.
(10) Includes 33,234 shares of Common Stock issuable upon exercise of
outstanding options.
(11) Includes 840,375 shares of Common Stock issuable upon exercise of
outstanding options held by Mr. Ross and 286,900 shares owned by Mr.
Ross' children. With respect to shares owned by his children, Mr. Ross
shares voting and investment power with regard to 143,450 shares and has
sole voting and investment power with respect to 143,450 shares. As a
result, Mr. Ross may be deemed to be the beneficial owner of such shares.
Mr. Ross' address is c/o Becker Ross Stone DeStefano & Klein, 317 Madison
Avenue, New York, NY 10017.
(12) Includes 100,000 shares of Common Stock issuable upon exercise of
outstanding stock options.
(13) Includes 31,720 shares owned by Mr. Smith's minor children, 8,968,000
shares held by Avance Capital, a sole proprietorship, and 1,180,569
shares held in a trust. Mr. Smith does not exercise voting or investment
power over, and disclaims beneficial ownership of, the shares held in the
trust. Mr. Smith has voting and investment power with respect to the
other shares.
(14) Includes 400 shares held as custodian for Mr. Sparks' minor child and
33,320 shares of Common Stock issuable upon exercise of outstanding
options.
(15) The address of each of Mr. Smith, Mr. Schmitt, Ms. Goldfine, Mr.
Plonskier and Mr. Sparks, is c/o the Company, 3 Bethesda Metro Center,
Suite 400, Bethesda, Maryland 20814.
(16) Includes 3,047,811 shares issuable upon exercise of outstanding options
and warrants.
12
<PAGE>
PROPOSAL NO. 2: ADOPTION OF THE COMPANY'S 1997 OMNIBUS STOCK PLAN
The Board of Directors proposes that the stockholders of the Company approve
the 1997 Omnibus Stock Plan (the "Plan"). The following is a fair and complete
summary of the Plan as proposed to be adopted; it is qualified in its entirety
by reference to the full text of the Plan, which appears as Exhibit A to this
Proxy Statement.
GENERAL
Purpose: The purpose of the Plan as proposed is to promote the long-term
growth and profitability of the Company by providing key people with
incentives to improve stockholder value and contribute to the growth and
financial success of the Company, and by enabling the Company to attract,
retain and reward the best-available persons for positions of substantial
responsibility.
Shares Available under the Plan: The number of shares of Common Stock that
may be issued with respect to awards granted under the proposed Plan shall not
exceed an aggregate of 2,500,000 shares of Common Stock. The maximum number of
shares of Common Stock subject to awards of any combination that may be
granted during any one fiscal year of the Company to any one individual shall
be limited to 100,000. These limits are subject to adjustment to reflect any
stock dividends, split-ups, recapitalizations, mergers, consolidations,
business combinations or exchanges of shares and the like. If any award, or
portion of an award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares, or if any shares of Common Stock are surrendered to the
Company in connection with any award (whether or not such surrendered shares
were acquired pursuant to any award), the shares subject to such award and the
surrendered shares shall thereafter be available for further awards under the
Plan. As of April 15, 1997, the fair market value of a share of the Company's
Common Stock, determined by the last reported sale price per share of Common
Stock on such date as quoted on the Nasdaq National Market, was $8.00.
Administration: The proposed Plan will be administered by the Board of
Directors or by such committee or committees as may be appointed by the Board
of Directors from time to time (the Board of Directors, committee or
committees hereinafter referred to as the "Administrator"). The Administrator
shall have full power and authority to take all other actions necessary to
carry out the purpose and intent of the Plan, including, but not limited to,
the authority to: (i) determine the eligible persons to whom, and the time or
times at which awards shall be granted; (ii) determine the types of awards to
be granted; (iii) determine the number of shares to be covered by or used for
reference purposes for each award; (iv) impose such terms, limitations,
restrictions and conditions upon any such award as the Administrator shall
deem appropriate; (v) modify, amend, extend or renew outstanding awards, or
accept the surrender of outstanding awards and substitute new awards (provided
however, that, except as noted below, any modification that would materially
adversely affect any outstanding award shall not be made without the consent
of the holder); (vi) accelerate or otherwise change the time in which an award
may be exercised or becomes payable and to waive or accelerate the lapse, in
whole or in part, of any restriction or condition with respect to such award,
including, but not limited to, any restriction or condition with respect to
the vesting or exercisability of an award following termination of any
grantee's employment; and (vii) establish objectives and conditions, if any,
for earning awards and determining whether awards will be paid after the end
of a performance period.
In the event of changes in the Common Stock of the Company by reason of any
stock dividend, split-up, recapitalization, merger, consolidation, business
combination or exchange of shares and the like, the Administrator shall, in
its discretion, make appropriate adjustments to the maximum number and kind of
shares reserved for issuance or with respect to which awards may be granted
under the Plan and to the number, kind and price of shares covered by awards
granted, and shall, in its discretion and without the consent of holders of
awards, make any other adjustments in awards, including but not limited to
reducing the number of shares subject to awards or providing or mandating
alternative settlement methods such as settlement of the awards in cash or in
shares of Common Stock or other securities of the Company or of any other
entity, or in any other matters which relate to awards as the Administrator
shall, in its sole discretion, determine to be necessary or appropriate.
13
<PAGE>
Without the consent of holders of awards, the Administrator, in its sole
discretion, may make any modifications to any awards, including but not
limited to cancellation, forfeiture, surrender or other termination of the
awards in whole or in part regardless of the vested status of the award, in
order to facilitate any business combination that is authorized by the Board
of Directors of the Company to comply with requirements for treatment as a
pooling of interests transaction for accounting purposes under generally
accepted accounting principles.
Without the consent of holders of awards, the Administrator in its
discretion is authorized to make adjustments in the terms and conditions of,
and the criteria included in, awards in recognition of unusual or nonrecurring
events affecting the Company, or the financial statements of the Company or
any subsidiary, or of changes in applicable laws, regulations, or accounting
principles, whenever the Administrator determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.
Participation: Participation in the Plan will be open to all employees,
officers, directors and consultants of the Company or any of its affiliates,
as may be selected by the Administrator from time to time. As of April 15,
1997, all five non-employee directors, approximately 950 employees and
consultants would be eligible to participate in the Plan.
TYPE OF AWARDS
The Plan as proposed would allow stock options, stock appreciation rights,
stock awards, phantom stock awards and performance awards to be granted. These
awards may be granted separately or in tandem with other awards. The
Administrator will determine the prices, expiration dates and other material
conditions upon which such awards may be exercised.
Stock Options: The proposed Plan allows the Administrator to grant either
awards of incentive stock options as that term is defined in section 422 of
the Internal Revenue Code of 1986, as amended (the "Code") or nonqualified
stock options; provided, however, that awards of incentive stock options shall
be limited to employees of the Company or of any subsidiary of the Company.
Options intended to qualify as incentive stock options under Code section 422
must have an exercise price at least equal to fair market value on the date of
grant, but nonqualified stock options may be granted with an exercise price
less than fair market value. The option exercise price may be paid in cash, by
tender of shares of Common Stock, by a combination of cash and shares, or by
any other means the Administrator approves.
Stock Appreciation Rights: The proposed Plan allows the Administrator to
grant awards of Stock Appreciation Rights ("SAR"). An SAR entitles the holder
to receive a payment in cash, in shares of Common Stock, or in a combination
of both, having an aggregate value equal to the product of (i) the excess of
(A) the fair market value on the exercise date of one share of Common Stock
over (B) the base price per share specified in the grant agreement, times (ii)
the number of shares specified by the SAR, or portion thereof, which is
exercised.
Stock and Phantom Stock Awards: The proposed Plan allows the Administrator
to grant restricted or unrestricted stock awards, or awards denominated in
stock-equivalent units ("phantom stock") to eligible participants with or
without payment of consideration by the grantee. Stock awards and phantom
stock awards may be paid in cash, in shares of Common Stock, or in a
combination of both.
Performance awards: The proposed Plan allows the Administrator to grant
performance awards which become payable in cash, in shares of Common Stock, or
in a combination of both, on account of attainment of one or more performance
goals established by the Administrator. Performance goals established by the
Administrator may be based on the Company's or an affiliate's operating income
or one or more other business criteria selected by the Administrator that
apply to an individual or group of individuals, a business unit, or the
Company or an affiliate as a whole, over such performance period as the
Administrator may designate.
14
<PAGE>
AWARDS UNDER THE PLAN
Because participation and the types of awards granted under the Plan as
proposed are subject to the discretion of the Administrator, the benefits or
amounts that will be received by any participant or groups of participants if
the Plan is approved are not currently determinable.
AMENDMENT AND TERMINATION
The Board of Directors of the Company may terminate, amend or modify the
Plan or any portion thereof at any time.
FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the current federal income tax
treatment of stock options, which would be authorized to be granted under the
Plan as proposed, based upon the current provisions of the Code and
regulations promulgated thereunder. The discussion set forth below, insofar as
it relates to the deductibility of any compensation payable under the Plan, is
subject to the paragraph captioned "Disallowance of Deductions" relating to
compensation in excess of $1,000,000 payable to certain executive officers.
Incentive Stock Options: Incentive stock options under the Plan are intended
to meet the requirements of Code section 422. No tax consequences result from
the grant of the option. If an option holder acquires stock upon the exercise,
no income will be recognized by the option holder for ordinary income tax
purposes (although the difference between the option exercise price and the
fair market value of the stock subject to the option may result in alternative
minimum tax liability to the option holder) and the Company will be allowed no
deduction as a result of such exercise, provided that the following conditions
are met: (a) at all times during the period beginning with the date of the
granting of the option and ending on the day three months before the date of
such exercise, the option holder is an employee of the Company or of a
subsidiary; and (b) the option holder makes no disposition of the stock within
two years from the date the option is granted nor within one year after the
stock is transferred to the option holder. The three-month period is extended
to one year in the event of disability and is waived in the event of death of
the employee. In the event of a sale of such stock by the option holder after
compliance with these conditions, any gain realized over the price paid for
the stock ordinarily will be treated as long-term capital gain, and any loss
will be treated as long-term capital loss, in the year of the sale.
If the option holder fails to comply with the employment requirement
discussed above, the tax consequences will be the same as for a nonqualified
option, discussed below. If the option holder fails to comply with the holding
period requirements discussed above, the option holder will recognize ordinary
income in an amount equal to the lesser of (i) the excess of the fair market
value of the stock on the date the option was exercised over the exercise
price or (ii) the excess of the amount realized upon such disposition over the
exercise price. Any additional gain ordinarily will be recognized by the
option holder as capital gain, either long-term or short-term, depending on
the holding period of the shares. If the option holder is treated as having
received ordinary income because of his or her failure to comply with either
condition above, an equivalent deduction will be allowed to the Company in the
same year.
Nonqualified Stock Options: No tax consequences result from the grant of the
option. An option holder who exercises a nonqualified stock option with cash
generally will realize compensation taxable as ordinary income in an amount
equal to the difference between the exercise price and the fair market value
of the shares on the date of exercise, and the Company will be entitled to a
deduction from income in the same amount in the fiscal year in which the
exercise occurred. The option holder's basis in such shares will be the fair
market value on the date income is realized, and when the holder disposes of
the shares he or she will recognize capital gain or loss, either long-term or
short-term, depending on the holding period of the shares.
Disallowance of Deductions: The Code disallows deductions for publicly held
corporations with respect to compensation in excess of $1,000,000 paid to the
corporation's chief executive officer and its four other most highly
compensated officers. However, compensation payable solely on account of
attainment of one or more
15
<PAGE>
performance goals is not subject to this deduction limitation if the
performance goals are objective, pre-established and determined by a
compensation committee comprised solely of two or more outside directors, the
material terms under which the compensation is to be paid are disclosed to the
stockholders and approved by a majority vote, and the compensation committee
certifies that the performance goals and other material terms were in fact
satisfied before the compensation is paid. Under this exception, the deduction
limitation does not apply with respect to compensation otherwise deductible on
account of stock options and stock appreciation rights granted at fair market
value under a plan which limits the number of shares that may be issued to any
individual and which is approved by the corporation's stockholders.
REQUIRED VOTE
Adoption of the 1997 Omnibus Stock Plan requires the affirmative vote of the
holders of a majority of shares of the Company's Common Stock present at the
Annual Meeting in person or by proxy and entitled to vote.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE 1997
OMNIBUS STOCK PLAN.
PROPOSAL NO. 3: RATIFICATION OF APPOINTMENT OF AUDITORS
Coopers & Lybrand L.L.P. has served as the Company's independent auditors
since inception and has been selected by the Board as the Company's
independent auditors for the fiscal year ending December 31, 1997. In the
event that ratification of this selection of auditors is not approved by a
majority of the shares of Common Stock voting thereon, management will review
its future selection of auditors.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at
the Annual Meeting and will have the opportunity to make a statement if they
desire to do so. They are also expected to be available to respond to
appropriate questions.
Unless marked to the contrary, proxies received will be voted FOR
ratification of the appointment of Coopers & Lybrand L.L.P. as the independent
auditors for the current year.
REQUIRED VOTE
The ratification of the appointment of Coopers & Lybrand L.L.P. as the
Company's independent auditors for the fiscal year ending December 31, 1997
requires the affirmative vote of the holders of a majority of the shares of
the Company's Common Stock present at the Annual Meeting in person or by proxy
and entitled to vote.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS
To be considered for presentation to the Annual Meeting of Stockholders to
be held in 1998, a stockholder proposal must be received by Edwin M. Martin,
Jr., Secretary, Omnipoint Corporation, 3 Bethesda Metro Center, Suite 400,
Bethesda, Maryland 20814, no later than December 19, 1997.
16
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors and greater than 10% stockholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) reports they file.
SEC rules require the Company to disclose all known delinquent Section 16(a)
filings by its officers, directors and 10% stockholders in this Proxy
Statement. Based solely on its review of the copies of reports received by it,
or written representations from certain reporting persons that no such reports
were required for those persons, the Company believes that, for the period
beginning March 31, 1996 through December 31, 1996, all filing requirements
applicable to its officers, directors, and greater than 10% beneficial owners
were complied with, except that Messrs. Gupta and Meals did not timely file
one or more Form 4s.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented to
the Annual Meeting. If any other business is properly brought before the
Annual Meeting, proxies in the enclosed form will be voted in respect thereof
in accordance with the judgments of the persons voting the proxies.
It is important that the proxies be returned promptly and that your shares
be represented. Stockholders are urged to sign, date and promptly return the
enclosed proxy card in the enclosed envelope.
A copy of the Company's 1996 Annual Report to Stockholders accompanies this
Proxy Statement. The Company has filed an Annual Report for its fiscal year
ended December 31, 1996 on Form 10-K with the Securities and Exchange
Commission. Stockholders may obtain, free of charge, a copy of the Form 10-K
by writing to Omnipoint Corporation, Attn: Investor Relations, 3 Bethesda
Metro Center, Suite 400, Bethesda, Maryland 20814.
By Order of the Board of Directors
/s/ Edwin M. Martin, Jr.,
Edwin M. Martin, Jr.,
Secretary
Dated: April 28, 1997
Bethesda, Maryland
17
<PAGE>
EXHIBIT A
1997 OMNIBUS STOCK PLAN
1. ESTABLISHMENT, PURPOSE AND TYPES OF AWARDS
Omnipoint Corporation hereby establishes the OMNIPOINT CORPORATION 1997
OMNIBUS STOCK PLAN (the "Plan"). The purpose of the Plan is to promote the
long-term growth and profitability of Omnipoint Corporation (the
"Corporation") by (i) providing key people with incentives to improve
stockholder value and to contribute to the growth and financial success of the
Corporation, and (ii) enabling the Corporation to attract, retain and reward
the best-available persons for positions of substantial responsibility.
The Plan permits the granting of stock options (including incentive stock
options qualifying under Code section 422 and nonqualified stock options),
stock appreciation rights, restricted or unrestricted stock awards, phantom
stock, performance awards, or any combination of the foregoing.
2. DEFINITIONS
Under this Plan, except where the context otherwise indicates, the following
definitions apply:
(a) "Affiliate" shall mean any entity, whether now or hereafter existing,
which controls, is controlled by, or is under common control with, the
Corporation (including, but not limited to, joint ventures, limited
liability companies, and partnerships). For this purpose, "control" shall
mean ownership of 50% or more of the total combined voting power or value
of all classes of stock or interests of the entity.
(b) "Award" shall mean any stock option, stock appreciation right, stock
award, phantom stock award, or performance award.
(c) "Board" shall mean the Board of Directors of the Corporation.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder.
(e) "Common Stock" shall mean shares of common stock of the Corporation,
par value of one cent ($0.01) per share.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "Fair Market Value" of a share of the Corporation's Common Stock for
any purpose on a particular date shall mean the last reported sale price
per share of Common Stock, regular way, on such date or, in case no such
sale takes place on such date, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on a national securities exchange or included for
quotation on the Nasdaq-National Market. If, as the case may be, the
relevant date is not a trading day, the determination shall be made as of
the next preceding trading day. As used herein, the term "trading day"
shall mean a day on which public trading of securities occurs and is
reported in the principal consolidated reporting system referred to above.
(h) "Grant Agreement" shall mean a written document memorializing the
terms and conditions of an Award granted pursuant to the Plan and shall
incorporate the terms of the Plan.
(i) "Parent" shall mean a corporation, whether now or hereafter existing,
within the meaning of the definition of "parent corporation" provided in
Code section 424(e), or any successor thereto.
(j) "Rule 16b-3" shall mean Rule 16b-3 as in effect under the Exchange
Act on the effective date of the Plan, or any successor provision
prescribing conditions necessary to exempt the issuance of securities under
the Plan (and further transactions in such securities) from Section 16(b)
of the Exchange Act.
(k) "Subsidiary" and "subsidiaries" shall mean only a corporation or
corporations, whether now or hereafter existing, within the meaning of the
definition of "subsidiary corporation" provided in Section 424(f) of the
Code, or any successor thereto.
1
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3. ADMINISTRATION
(a) Administration of the Plan. The Plan shall be administered by the Board
or by such committee or committees as may be appointed by the Board from time
to time (the Board, committee or committees hereinafter referred to as the
"Administrator").
(b) Powers of the Administrator. The Administrator shall have all the powers
vested in it by the terms of the Plan, such powers to include authority, in
its sole and absolute discretion, to grant Awards under the Plan, prescribe
Grant Agreements evidencing such Awards and establish programs for granting
Awards.
The Administrator shall have full power and authority to take all other
actions necessary to carry out the purpose and intent of the Plan, including,
but not limited to, the authority to: (i) determine the eligible persons to
whom, and the time or times at which Awards shall be granted; (ii) determine
the types of Awards to be granted; (iii) determine the number of shares to be
covered by or used for reference purposes for each Award; (iv) impose such
terms, limitations, restrictions and conditions upon any such Award as the
Administrator shall deem appropriate; (v) modify, amend, extend or renew
outstanding Awards, or accept the surrender of outstanding Awards and
substitute new Awards (provided however, that, except as provided in the next
sentence or in Section 7(d) of the Plan, any modification that would
materially adversely affect any outstanding Award shall not be made without
the consent of the holder); (vi) accelerate or otherwise change the time in
which an Award may be exercised or becomes payable and to waive or accelerate
the lapse, in whole or in part, of any restriction or condition with respect
to such Award, including, but not limited to, any restriction or condition
with respect to the vesting or exercisability of an Award following
termination of any grantee's employment; and (vii) establish objectives and
conditions, if any, for earning Awards and determining whether Awards will be
paid after the end of a performance period.
The Administrator shall have full power and authority, in its sole and
absolute discretion, to administer and interpret the Plan and to adopt and
interpret such rules, regulations, agreements, guidelines and instruments for
the administration of the Plan and for the conduct of its business as the
Administrator deems necessary or advisable.
(c) Non-Uniform Determinations. The Administrator's determinations under the
Plan (including without limitation, determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions
of such Awards and the Grant Agreements evidencing such Awards) need not be
uniform and may be made by the Administrator selectively among persons who
receive, or are eligible to receive, Awards under the Plan, whether or not
such persons are similarly situated.
(d) Limited Liability. To the maximum extent permitted by law, no member of
the Administrator shall be liable for any action taken or decision made in
good faith relating to the Plan or any Award thereunder.
(e) Indemnification. To the maximum extent permitted by law and by the
Corporation's charter and by-laws, the members of the Administrator shall be
indemnified by the Corporation in respect of all their activities under the
Plan.
(f) Effect of Administrator's Decision. All actions taken and decisions and
determinations made by the Administrator on all matters relating to the Plan
pursuant to the powers vested in it hereunder shall be in the Administrator's
sole and absolute discretion and shall be conclusive and binding on all
parties concerned, including the Corporation, its stockholders, any
participants in the Plan and any other employee of the Corporation, and their
respective successors in interest.
4. SHARES AVAILABLE FOR THE PLAN; MAXIMUM AWARDS
Subject to adjustments as provided in Section 7(d) of the Plan, the shares
of Common Stock that may be issued with respect to Awards granted under the
Plan shall not exceed an aggregate of 2,500,000 shares of Common Stock. The
Corporation shall reserve such number of shares for Awards under the Plan,
subject to adjustments as provided in Section 7(d) of the Plan. If any Award,
or portion of an Award, under the Plan expires
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or terminates unexercised, becomes unexercisable or is forfeited or otherwise
terminated, surrendered or canceled as to any shares, or if any shares of
Common Stock are surrendered to the Corporation in connection with any Award
(whether or not such surrendered shares were acquired pursuant to any Award),
the shares subject to such Award and the surrendered shares shall thereafter
be available for further Awards under the Plan; provided, however, that any
such shares that are surrendered to the Corporation in connection with any
Award or that are otherwise forfeited after issuance shall not be available
for purchase pursuant to incentive stock options intended to qualify under
Code section 422.
Subject to adjustments as provided in Section 7(d) of the Plan, the maximum
number of shares of Common Stock subject to Awards of any combination that may
be granted during any one fiscal year of the Corporation to any one individual
shall be limited to 100,000. Such per-individual limit shall not be adjusted
to effect a restoration of shares of Common Stock with respect to which the
related Award is terminated, surrendered or canceled.
5. PARTICIPATION
Participation in the Plan shall be open to all employees, officers,
directors and consultants of the Corporation, or of any Affiliate of the
Corporation, as may be selected by the Administrator from time to time.
6. AWARDS
The Administrator, in its sole discretion, establishes the terms of all
Awards granted under the Plan. Awards may be granted individually or in tandem
with other types of Awards. All Awards are subject to the terms and conditions
provided in the Grant Agreement.
(a) Stock Options. The Administrator may from time to time grant to eligible
participants Awards of incentive stock options as that term is defined in Code
section 422 or nonqualified stock options; provided, however, that Awards of
incentive stock options shall be limited to employees of the Corporation or of
any Parent or Subsidiary of the Corporation. Options intended to qualify as
incentive stock options under Code section 422 must have an exercise price at
least equal to Fair Market Value on the date of grant, but nonqualified stock
options may be granted with an exercise price less than Fair Market Value. No
stock option shall be an incentive stock option unless so designated by the
Administrator at the time of grant or in the Grant Agreement evidencing such
stock option.
(b) Stock Appreciation Rights. The Administrator may from time to time grant
to eligible participants Awards of Stock Appreciation Rights ("SAR"). An SAR
entitles the grantee to receive, subject to the provisions of the Plan and the
Grant Agreement, a payment having an aggregate value equal to the product of
(i) the excess of (A) the Fair Market Value on the exercise date of one share
of Common Stock over (B) the base price per share specified in the Grant
Agreement, times (ii) the number of shares specified by the SAR, or portion
thereof, which is exercised. Payment by the Corporation of the amount
receivable upon any exercise of an SAR may be made by the delivery of Common
Stock or cash, or any combination of Common Stock and cash, as determined in
the sole discretion of the Administrator. If upon settlement of the exercise
of an SAR a grantee is to receive a portion of such payment in shares of
Common Stock, the number of shares shall be determined by dividing such
portion by the Fair Market Value of a share of Common Stock on the exercise
date. No fractional shares shall be used for such payment and the
Administrator shall determine whether cash shall be given in lieu of such
fractional shares or whether such fractional shares shall be eliminated.
(c) Stock Awards. The Administrator may from time to time grant restricted
or unrestricted stock Awards to eligible participants in such amounts, on such
terms and conditions, and for such consideration, including no consideration
or such minimum consideration as may be required by law, as it shall
determine. A stock Award may be paid in Common Stock, in cash, or in a
combination of Common Stock and cash, as determined in the sole discretion of
the Administrator.
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(d) Phantom Stock. The Administrator may from time to time grant Awards to
eligible participants denominated in stock-equivalent units ("phantom stock")
in such amounts and on such terms and conditions as it shall determine.
Phantom stock units granted to a participant shall be credited to a
bookkeeping reserve account solely for accounting purposes and shall not
require a segregation of any of the Corporation's assets. An Award of phantom
stock may be settled in Common Stock, in cash, or in a combination of Common
Stock and cash, as determined in the sole discretion of the Administrator.
Except as otherwise provided in the applicable Grant Agreement, the grantee
shall not have the rights of a stockholder with respect to any shares of
Common Stock represented by a phantom stock unit solely as a result of the
grant of a phantom stock unit to the grantee.
(e) Performance Awards. The Administrator may, in its discretion, grant
performance awards which become payable on account of attainment of one or
more performance goals established by the Administrator. Performance awards
may be paid by the delivery of Common Stock or cash, or any combination of
Common Stock and cash, as determined in the sole discretion of the
Administrator. Performance goals established by the Administrator may be based
on the Corporation's or an Affiliate's operating income or one or more other
business criteria selected by the Administrator that apply to an individual or
group of individuals, a business unit, or the Corporation or an Affiliate as a
whole, over such performance period as the Administrator may designate.
7. MISCELLANEOUS
(a) Withholding of Taxes. Grantees and holders of Awards shall pay to the
Corporation, or make provision satisfactory to the Administrator for payment
of, any taxes required to be withheld in respect of Awards under the Plan no
later than the date of the event creating the tax liability. The Corporation
may, to the extent permitted by law, deduct any such tax obligations from any
payment of any kind otherwise due to the grantee or holder of an Award. In the
event that payment to the Corporation of such tax obligations is made in
shares of Common Stock, such shares shall be value at Fair Market Value on the
applicable date for such purposes.
(b) Loans. The Corporation may make or guarantee loans to grantees to assist
grantees in exercising Awards and satisfying any withholding tax obligations.
(c) Transferability. Except as otherwise determined by the Administrator,
and in any event in the case of an incentive stock option or a stock
appreciation right granted with respect to an incentive stock option, no Award
granted under the Plan shall be transferable by a grantee otherwise than by
will or the laws of descent and distribution. Unless otherwise determined by
the Administrator in accord with the provisions of the immediately preceding
sentence, an Award may be exercised during the lifetime of the grantee, only
by the grantee or, during the period the grantee is under a legal disability,
by the grantee's guardian or legal representative.
(d) Adjustments; Business Combinations. In the event of changes in the
Common Stock of the Corporation by reason of any stock dividend, split-up,
recapitalization, merger, consolidation, business combination or exchange of
shares and the like, the Administrator shall, in its discretion, make
appropriate adjustments to the maximum number and kind of shares reserved for
issuance or with respect to which Awards may be granted under the Plan as
provided in Section 4 of the Plan and to the number, kind and price of shares
covered by Awards granted, and shall, in its discretion and without the
consent of holders of Awards, make any other adjustments in Awards, including
but not limited to reducing the number of shares subject to Awards or
providing or mandating alternative settlement methods such as settlement of
the Awards in cash or in shares of Common Stock or other securities of the
Corporation or of any other entity, or in any other matters which relate to
Awards as the Administrator shall, in its sole discretion, determine to be
necessary or appropriate.
Notwithstanding anything in the Plan to the contrary and without the consent
of holders of Awards, the Administrator, in its sole discretion, may make any
modifications to any Awards, including but not limited to cancellation,
forfeiture, surrender or other termination of the Awards in whole or in part
regardless of the vested
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status of the Award, in order to facilitate any business combination that is
authorized by the Board to comply with requirements for treatment as a pooling
of interests transaction for accounting purposes under generally accepted
accounting principles.
The Administrator is authorized to make, in its discretion and without the
consent of holders of Awards, adjustments in the terms and conditions of, and
the criteria included in, Awards in recognition of unusual or nonrecurring
events affecting the Corporation, or the financial statements of the
Corporation or any Subsidiary, or of changes in applicable laws, regulations,
or accounting principles, whenever the Administrator determines that such
adjustments are appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan.
(e) Termination, Amendment and Modification of the Plan. The Board may
terminate, amend or modify the Plan or any portion thereof at any time.
(f) Non-Guarantee of Employment or Service. Nothing in the Plan or in any
Grant Agreement thereunder shall confer any right on an individual to continue
in the service of the Corporation or shall interfere in any way with the right
of the Corporation to terminate such service at any time.
(g) No Trust or Fund Created. Neither the Plan nor any Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Corporation and a grantee or any other person. To the
extent that any grantee or other person acquires a right to receive payments
from the Corporation pursuant to an Award, such right shall be no greater than
the right of any unsecured general creditor of the Corporation.
(h) Governing Law. The validity, construction and effect of the Plan, of
Grant Agreements entered into pursuant to the Plan, and of any rules,
regulations, determinations or decisions made by the Administrator relating to
the Plan or such Grant Agreements, and the rights of any and all persons
having or claiming to have any interest therein or thereunder, shall be
determined exclusively in accordance with applicable federal laws and the laws
of the State of Delaware, without regard to its conflict of laws principles.
(i) Effective Date; Termination Date. The Plan is effective as of the date
on which the Plan was adopted by the Board, subject to approval of the
stockholders within twelve months before or after such date. No Award shall be
granted under the Plan after the close of business on the day immediately
preceding the tenth anniversary of the effective date of the Plan. Subject to
other applicable provisions of the Plan, all Awards made under the Plan prior
to such termination of the Plan shall remain in effect until such Awards have
been satisfied or terminated in accordance with the Plan and the terms of such
Awards.
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OMNIPOINT CORPORATION
The undersigned hereby appoints Douglas G. Smith and Bradley E. Sparks
proxies, with power to act without the other and with power of substitution, and
hereby authorizes them to represent and vote, as designated on the other side,
all the shares of stock of Omnipoint Corporation standing in the name of the
undersigned with all powers which the undersigned would possess if present at
the Annual Meeting of Stockholders of the Company to be held May 29, 1997 or any
adjournment thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
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FOLD AND DETACH HERE
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
ITEM 1 - ELECTION OF DIRECTORS
[_] FOR [_] WITHHELD
FOR ALL
Nominees: Richard L. Fields, Paul J. Finnegan, Evelyn Goldfine, Arjun Gupta,
James N. Perry, Jr., James J. Ross, George F. Schmitt, Douglas G. Smith
WITHHELD FOR : (Write that nominee's name in the space provided below).
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ITEM 2 - ADOPTION OF THE 1997 OMNIBUS STOCK PLAN
[_] FOR [_] AGAINST [_] ABSTAIN
ITEM 3 - APPOINTMENT OF INDEPENDENT AUDITORS
[_] FOR [_] AGAINST [_] ABSTAIN
Signature Signature Date
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Note: Please sign as name appears hereon. Joint creditors should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
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FOLD AND DETACH HERE
