<PAGE>
SCHEDULE 14A TEMPLATE
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[_] Preliminary proxy statement
[X] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
OMNIPOINT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In 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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
-------------------------------------------------------------------------
(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:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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Notes:
<PAGE>
[OMNIPOINT LOGO]
3 Bethesda Metro Center
Suite 400
Bethesda, Maryland 20814
(301) 951-2500
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 27, 1999
----------------
The Annual Meeting of Stockholders (the "Annual Meeting") of Omnipoint
Corporation, a Delaware corporation ("Omnipoint"), will be held on Thursday,
May 27, 1999, at 2:30 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 seven (7) directors to hold office until the next annual
meeting of stockholders and until their respective successors have been
elected or appointed;
2. To amend Omnipoint's 1996 Employee Stock Purchase Plan to authorize an
additional 250,000 shares of common stock to be made available for
issuance under the plan;
3. To ratify the appointment of PricewaterhouseCoopers LLP as Omnipoint's
independent auditors for the year ending December 31, 1999; 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.
Your Board of Directors has fixed April 15, 1999 as the record date for
determining stockholders entitled to vote at the Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. YOUR
PARTICIPATION IN THESE MATTERS IS IMPORTANT, REGARDLESS OF THE NUMBER OF
SHARES YOU OWN. WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON, WE URGE YOU TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS
POSSIBLE IN THE ENCLOSED ENVELOPE. 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 27, 1999
<PAGE>
[OMNIPOINT LOGO]
3 Bethesda Metro Center
Suite 400
Bethesda, Maryland 20814
(301) 951-2500
----------------
PROXY STATEMENT
----------------
The Board of Directors of Omnipoint Corporation, a Delaware corporation
("Omnipoint"), is soliciting your proxy on the proxy card enclosed with this
Proxy Statement. Your proxy will be voted at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on Thursday, May 27, 1999 at
2:30 p.m., local time, at the offices of Piper & Marbury L.L.P., 1200
Nineteenth Street, N.W., Suite 700, Washington, D.C. 20036, and any
adjournment or postponement thereof. This Proxy Statement, the accompanying
proxy card and Omnipoint's Annual Report to Stockholders are first being
mailed to stockholders on or about April 27, 1999.
VOTING SECURITIES
Voting Rights and Outstanding Shares
Only stockholders of record on the books of Omnipoint as of 5:00 p.m., April
15, 1999 (the "Record Date"), will be entitled to vote at the Annual Meeting.
At the close of business on the Record Date, Omnipoint had 53,149,212 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
Omnipoint'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 Omnipoint (Attention: Harry Plonskier) 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 amendment to
Omnipoint's Employee Stock Purchase 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. Omnipoint 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 Omnipoint. In addition,
Omnipoint 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
Omnipoint's directors, officers and regular employees, without additional
compensation, personally or by telephone or telegram.
<PAGE>
PROPOSAL NO 1: ELECTION OF DIRECTORS
Seven 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 seven nominees receiving the highest number of
affirmative votes will be elected as directors. In the event any nominee is
unable or 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
Omnipoint. 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 45 founded Omnipoint 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 55 has served as President of Omnipoint
Communications Services, LLC, a subsidiary of Omnipoint ("OCS"), since January
1997, when OCS was established, and President of Omnipoint Communications Inc.
("OCI"), also a subsidiary of Omnipoint, Executive Vice President of Omnipoint
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 42, has served as a Director of Omnipoint 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.
Evelyn Goldfine, age 52, has served as a Director of Omnipoint since October
1991. Ms. Goldfine is a private venture investor who joined Omnipoint 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 38, has served as a Director of Omnipoint 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. From June 1993 through November 1993, he was with
Kleiner Perkins Caufield & Byers and from October 1989 through June 1993, Mr.
Gupta was with McKinsey & Company.
James N. Perry, Jr., age 38, has been a Director of Omnipoint since August
1993. In January 1993, he became Vice President of Madison Dearborn Partners,
Inc. Previously, Mr. Perry served in various positions at
2
<PAGE>
First Capital Corporation of Chicago and its affiliates. Mr. Perry currently
serves as a director of Allegiance Telecom, Inc. and Clearnet Communications,
Inc.
James J. Ross, age 60, 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.
Required Vote
Directors are elected by plurality vote cast by stockholders entitled to
vote. Neither broker non-votes nor abstentions are treated as votes cast for
this purpose and have no effect on the outcome of the vote.
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
Omnipoint's Board of Directors met 11 times during 1998. Except for Mr.
Gupta, all directors attended more than 75% of all meetings of the Board of
Directors and meetings of committees of the Board of Directors on which such
directors served.
The Audit Committee consisted of Mr. Paul J. Finnegan, who subsequently
resigned from the board, and Mr. Ross and met four times during 1998. This
Committee reviews and supervises the financial controls of Omnipoint,
including selecting the firm of independent accountants to audit the financial
statements of Omnipoint and monitoring the effectiveness of the audit effort
and Omnipoint's financial and accounting organization and financial reporting.
The Compensation Committee consists of Messrs. Fields, Gupta and Perry and
met four times during 1998. This Committee establishes and reviews annually
Omnipoint's general compensation policies applicable to Omnipoint's executive
officers, reviews and approves the level of compensation awarded to
Omnipoint'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 Omnipoint's executive officers and the
bases for the Chief Executive Officer's compensation during the last fiscal
year. The Compensation Committee also administers Omnipoint's Amended and
Restated 1990 Stock Option Plan, the Omnibus Stock Plan and the Employee Stock
Purchase Plan. In addition, the Compensation Committee determines the
recipients and terms of any non-plan grants, sales and awards of Omnipoint's
securities to employees, officers, directors and consultants of Omnipoint.
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
Omnipoint, at Omnipoint'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
The executive officers of Omnipoint as of the date of this Proxy Statement
are listed and described below.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Douglas G. Smith........ 45 Chairman of the Board, President,Chief Executive Officer
George F. Schmitt....... 55 Executive Vice President and President, OCS
Evelyn Goldfine......... 52 Chief Administrative Officer
Kjell S. Andersson...... 56 Executive Vice President and President, OTI
Charles R. Johnston..... 65 Chief Operating Officer, OCS
Harry Plonskier......... 46 Treasurer, Chief Accounting Officer and Acting Chief Financial Officer
</TABLE>
Douglas G. Smith, Mr. Smith's business experience is described under
Proposal No. 1--Election of Directors.
George F. Schmitt, Mr. Schmitt's business experience is described under
Proposal No. 1--Election of Directors.
Evelyn Goldfine, Ms. Goldfine's business experience is described under
proposal No. 1--Election of Directors.
Mr. Andersson has served as Executive Vice President of Omnipoint and
President of Omnipoint Technologies, Inc., a subsidiary of Omnipoint ("OTI"),
since February 1997. Prior to joining Omnipoint, 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.
Charles Johnston became Chief Operating Officer of OCS in July 1998 and
General Manager in August 1997. Prior to joining Omnipoint and for
approximately 17 years, he held numerous executive positions at Pacific Bell
Mobil Services. Most recently, he was Vice President of Special Services of
Pacific Bell. Mr. Johnston holds a BSc degree in Marketing from the University
of Southern California.
Harry Plonskier became Treasurer, Chief Accounting Officer and Acting Chief
Financial Officer of Omnipoint in October 1998, Vice President, Finance of OCI
in July 1994, and has served as Vice President, Finance of OCS since January
1997. Prior to joining Omnipoint, Mr. Plonskier served as Vice President and
Controller of Dyson Kissner Corporation, a privately held investment holding
company. Previously, Mr. Plonskier served as Chief Financial Officer of
Cellular One of New York (the McCaw/LIN cellular system). Mr. Plonskier holds
a B.A. and an M.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 Omnipoint.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain annual compensation information for
Omnipoint's Chief Executive Officer and the other four most highly paid
executive officers of Omnipoint whose annual salary exceeded $100,000 as of
December 31, 1998 (collectively, the "Named Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
------------------------------------------ -------------------
Options
Name and Other Annual (in Number
Principal Position Year Salary Bonus(1) Compensation(2) of Shares)
------------------ ---- -------- -------- --------------- -------------------
<S> <C> <C> <C> <C> <C>
Douglas G. Smith........ 1998 $262,115 $129,375 $31,820 --
President and Chief
Executive Officer...... 1997 214,130 147,615 32,730 --
1996 212,500 127,500 27,300 --
George F. Schmitt....... 1998 262,115 129,375 19,621 --
Executive Vice
President and 1997 223,270 127,500 720 --
President of OCS 1996 212,500 127,500 7,750 --
Kjell S. Andersson...... 1998 236,862 126,000 37,662 -- (3)
Executive Vice
President and 1997 188,654(4) 54,000 92,678(5) 192,000
President of OTI 1996 -- -- -- --
Charles R. Johnston..... 1998 156,776(6) 47,670 20,228 16,000(7)
Chief Operating Officer
of OCS 1997 57,077(8) -- 22,500(9) 25,500(10)
1996 -- -- -- --
Harry Plonskier......... 1998 167,230(11) 51,350 6,000 10,500
Treasurer, Chief
Accounting Officer 1997 148,840 32,280 6,000 --
and Acting Chief
Financial Officer 1996 134,250 32,280 6,000 8,000(10)
</TABLE>
- --------
(1) Omnipoint's executive officers are eligible for annual cash bonuses.
Such bonuses are generally earned in the previous year 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) Under the Omnipoint Technologies, Inc. Equity Incentive Plan, Mr.
Andersson received options to purchase 1,250,000 shares of Common Stock
of OTI, which is currently not liquid. Stock options exercisable for the
OTI Common Stock vest over five years, 20% in the first year and on an
annual basis thereafter, provided that Mr. Andersson remains
continuously employed by OTI.
(4) Mr. Andersson joined Omnipoint in February 1997. His annual salary for
fiscal 1997 would have been $225,000 if he were with Omnipoint for the
entire year.
(5) Includes $92,678 reimbursement for moving expenses.
(6) Mr. Johnston held three different roles in OCS during the year, starting
as General Manager of the New England region and becoming Chief
Operating Officer of OCS in July 1998.
(7) Includes options for 4,000 shares, which were granted below fair market
value.
(8) Mr. Johnston joined Omnipoint in July 1997. His annual salary for fiscal
year 1997 would have been $140,000 if he were with Omnipoint for the
entire year.
(9) Includes $15,000 transition allowance.
(10) Includes options for 3,000 shares, which were granted below fair market
value.
(11) Mr. Plonskier was Vice President, Finance of OCS during all of 1998 and
in addition became Treasurer, Chief Accounting Officer and Acting Chief
Financial Officer of Omnipoint in October 1998.
5
<PAGE>
The following table contains further information concerning the stock option
grants made to each of the Named Officers during the fiscal year ended
December 31, 1998.
OPTION GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------
Potential Realizable Value at
Number of Assumed Annual Rates o
Securities % of Total Stock Price Appreciation
Underlying Options Granted Exercise or for Option Term ($)(2)
Options to Employees in Base Price Expiration -------------------------------
Name Granted Fiscal Year(1) ($/SH) Date 0% 5% 10%
---- ---------- --------------- ----------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Douglas G. Smith........ -- -- -- -- -- -- --
George Schmitt.......... -- -- -- -- -- -- --
Kjell S. Andersson(3)... -- -- -- -- -- -- --
Charles R. Johnston..... 4,000(4) * $0.01 7/13/2007 $ 90,720 $ 140,758 $ 213,967
12,000(4) * 22.69 7/13/2007 -- 150,145 369,772
Harry Plonskier......... 10,500(5) * 26.00 10/1/2006 -- 43,168 207,561
</TABLE>
- --------
* Less than 1%.
(1) Based on options to purchase 1,633,433 shares granted in fiscal 1998.
(2) 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 SEC rules 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.
(3) Under the Omnipoint Technologies, Inc. Equity Incentive Plan, Mr.
Andersson received 1,250,000 options to purchase Common Stock of OTI,
which is currently not liquid. Stock options exercisable for the OTI
Common Stock vest over five years, 20% in the first year and on an annual
basis thereafter, provided that Mr. Andersson remains continuously
employed by OTI.
(4) Stock options were granted pursuant to an employment agreement which
provides for vesting of options over a twelve-month period.
(5) Stock options vest over five years, 20% in the first year and on an annual
basis thereafter, provided that such officer emains continuously employed
by Omnipoint.
The following table sets forth certain information regarding options to
purchase Common Stock held as of December 31, 1998 by each of the Named
Officers.
AGGREGATED OPTION/SAR EXERCISES
IN LAST FISCAL YEAR AND FY-END OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised
Unexercised Options at Fiscal in-the-Money Options at
Shares Value Year End 1998 Fiscal Year End 1998 ($)(1)
Acquired on Realized ---------------------------------- ------------------------------
Name Exercise ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- --------------- ---------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Douglas G. Smith........ -- -- -- -- -- --
George F. Schmitt....... 26,666 $ 63,332(2) 398,334 604,170 $ 781,200 $ 469,282
Kjell S. Andersson...... -- -- -- -- -- --
Charles R. Johnston..... -- -- -- -- -- --
Harry Plonskier......... 1,200 9,063(3) 40,797 21,262 123,878 1,199
</TABLE>
- --------
(1) Market value of securities underlying the in-the-money options at December
31, 1998 (based on $9.3125 per share, the closing price of Common Stock on
the Nasdaq National Market on December 31, 1998), less the exercise price
payable for such shares, multiplied by the number of shares underlying the
option.
6
<PAGE>
(2) Market value of underlying securities (based on $8.375 per share, the
closing price of the Common Stock on the Nasdaq National Market) at the
time of exercise, minus the exercise price.
(3) Market value of underlying securities (based on $7.5625 per share, the
closing price of the Common Stock in the Nasdaq National Market) at the
time of exercise, minus the exercise price.
EMPLOYMENT AGREEMENTS
Omnipoint entered into an employment agreement with Mr. Schmitt effective
October 1, 1995, which currently provides for an annual salary of $225,000.
Pursuant to the agreement, Mr. Schmitt serves as President of OCI and
Executive Vice President of Omnipoint. 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 Omnipoint 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
forgiveness of the principal and interest payments due under a note from Mr.
Schmitt to Omnipoint for the purchase of 125,000 shares of Common Stock. Mr.
Schmitt's shares are subject to a five year repurchase option (a "Five-Year
Repurchase Option") by Omnipoint with respect to 60% of his shares that
declines by 20% on each October 1 beginning in 1998. 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.
Omnipoint 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.
Omnipoint entered into an employment agreement with Mr. Andersson effective
November 3, 1996, which currently provides for an annual salary of $225,000
(which shall be increased by a minimum of 5% each year). The term of
employment under the agreement is five years which commenced on February 2,
1997. Mr. Andersson is eligible for an annual bonus in an amount up to 100% of
his salary. In the event the agreement is terminated without cause by
Omnipoint or upon the occurrence of certain events, for a period of two years
following termination, Mr. Andersson 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. Andersson. Mr. Andersson's employment agreement also provides for the
forgiveness of the principal and interest payments due under a note from Mr.
Andersson to Omnipoint for the purchase of 60,000 shares of Common Stock. Mr.
Andersson's shares are also subject to a Five-Year Repurchase Option by
Omnipoint.
OCS entered into an employment agreement with Mr. Johnston effective August
1, 1997, which currently provides for an annual salary of $190,000. Mr.
Johnston is eligible for an annual bonus in the amount of up to 45% of his
salary. Pursuant to his employment agreement, Mr. Johnston was granted an
option to purchase 7,000 shares at $0.01 per share; an option to purchase
5,000 shares at $16.00; an option to purchase 17,500 shares at a purchase
price of $26.00 per share; and an option to purchase 12,000 shares at
$22.6875.
OCI entered into an employment agreement with Mr. Plonskier effective July
5, 1994, to serve as Vice President, Finance with an initial annual salary of
$125,000 per year. In October 1998, Mr. Plonskier was named Treasurer, Chief
Accounting Officer and Acting Chief Financial Officer of Omnipoint and
effective that date, Mr. Plonskier's an annual salary has been adjusted to be
$185,000 per year. The agreement further provides that
7
<PAGE>
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.
Each of Messrs. Andersson's, Johnston's, Plonskier's and Schmitt's
employment agreements provides that the agreement may be terminated by the
employee upon 30 days' prior written notice, or by Omnipoint upon seven days
(30 days in the case of Mr. Plonskier) prior written notice. Additionally, Mr.
Andersson's employment agreement contains a general non-compete provision
applicable during his employment period and for two years thereafter, which
prohibits him from engaging in any business anywhere in the world that
provides equipment or services that are being provided by or are under
development by OTI at the time he ceases employment with Omnipoint. Mr.
Plonskier's agreement contains a non-compete provision applicable during his
employment period and for one year thereafter, which prohibits him from
directly or indirectly engaging in the business of OCI, and from soliciting
the employees, clients or customers of OCI. Mr. Schmitt's agreement provides
in addition to the two year non-compete described above, a 180-day general
non-compete. Such non-competition provision is not violated by the employee's
ownership of less than 1% of the outstanding stock of a publicly held
corporation.
EXECUTIVE BONUS PLAN
Senior managers of Omnipoint 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, which is comprised of three outside non-employee
directors, is responsible for establishing compensation policies with respect
to Omnipoint's executive officers, including the Chief Executive Officer and
the other executive officers, and setting the compensation for these
individuals.
The Compensation Committee seeks to achieve three broad goals in connection
with Omnipoint'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 Omnipoint 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
Omnipoint. By tying compensation in part to particular goals, the Compensation
Committee believes that a performance-oriented environment is created for
Omnipoint's executives. Finally, Omnipoint's executive compensation programs
are intended to provide executives with an equity interest in Omnipoint so as
to link a portion of the compensation of Omnipoint's executives with the
performance of Omnipoint's Common Stock.
In fiscal year 1998, executive compensation had two primary components: cash
compensation, including base salary and an annual cash bonus, and equity-based
compensation, including stock options.
Cash Compensation: In establishing base salaries for executives, the
Compensation Committee monitors standards at comparable companies,
particularly those that are in the same industry as Omnipoint or related
industries and/or located in the same general geographical area as Omnipoint,
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 Omnipoint. To the extent determined appropriate,
the Compensation Committee also considers general market conditions and
Omnipoint's financial performance in establishing base salaries of executives.
The annual cash bonus is intended to motivate and award executive officers by
directly linking cash bonuses to specific aggressive individual and Company
performance targets. The actual amount of cash bonus earned by an executive
officer is determined by the Compensation Committee at the end of Omnipoint's
fiscal year.
8
<PAGE>
Equity-Based Compensation: This includes stock options and other long-term
incentive awards based on Omnipoint's Common Stock. The emphasis on long-term
incentives is intended to encourage executive officers to focus on the growth
of Omnipoint since the value of these awards depends on Omnipoint's
performance and future stock value. In fiscal year 1998, not only were
executive officers eligible to participate in the Employee Stock Purchase
Plan, but they were also eligible to receive grants of stock options under the
Amended and Restated 1990 Stock Option Plan and the Omnibus Stock Plan. In
deciding to award options, the Compensation Committee also considers a number
of factors, including the number of options outstanding or previously granted
and the aggregate size of current awards.
For the fiscal year 1998, 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, as well as the other named executive
officers met or exceeded performance goals established by the Compensation
Committee for 1998, including among other achievements, service launch in over
20 cities.
Based on its evaluation of the performance of the executive officers, the
Compensation Committee believes that Omnipoint'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 Omnipoint's executive officers to work toward
these goals.
Section 162(m) of the Internal Revenue Code of 1986 (the "Code") limits
Omnipoint'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 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. Perry, Fields and Gupta. None of the members was at
any time during the fiscal year ended December 31, 1998, or at any other time,
an officer or employee of Omnipoint. No executive officer of Omnipoint 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 Omnipoint's
Board of Directors or Compensation Committee.
9
<PAGE>
PERFORMANCE GRAPH
The following graph shows a 36 month comparison of cumulative total return
on Omnipoint'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, 1998.
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
JAN 96 MAR 96 JUN 96 SEP 96 DEC 96 MAR 97 JUN 97 SEP 97 DEC 97 MAR 98 JUN 98 SEP 98 DEC 98
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OMNIPOINT $100 $121 $124 $139 $ 92 $ 46 $ 79 $104 $111 $141 $109 $ 35 $ 44
- ----------------------------------------------------------------------------------------------------------------------
S&P 500 $100 $104 $108 $111 $119 $122 $142 $152 $156 $177 $182 $164 $198
- ----------------------------------------------------------------------------------------------------------------------
CRSP $100 $105 $108 $104 $104 $ 97 $119 $139 $147 $187 $198 $175 $241
- ----------------------------------------------------------------------------------------------------------------------
</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, 1999, by: (i) each person who is
known by Omnipoint to own beneficially more than 5% of the Common Stock; (ii)
each of Omnipoint'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, 1999(1)
-------------------------
Number of
Beneficial Owner Shares Percent
---------------- -------------- ----------
<S> <C> <C>
Avance Capital(2).................................. 5,139,380 9.67%
Madison Dearborn Capital Partners, L.P.(3)......... 6,190,156 11.60
Allen & Company Incorporated(4).................... 3,835,717 7.05
T. Rowe Price Associates, Inc.(5).................. 2,905,200 5.47
Kjell S. Andersson(6)(15).......................... 153,800 *
Richard Fields(7).................................. 4,276,835 8.03
Evelyn R. Goldfine(8)(15).......................... 341,075 *
Arjun Gupta........................................ 0 --
Charles R. Johnston(9)(15)......................... 1,600 *
James N. Perry, Jr.(10)............................ 6,190,156 11.60
Harry Plonskier(11)(15)............................ 48,842 *
James J. Ross(12).................................. 1,713,920 3.17
George F. Schmitt(13)(15).......................... 383,521 *
Douglas G. Smith(14)(15)........................... 7,514,380 14.14
All officers and directors as a group (10
persons)(16)...................................... 20,624,129 36.69
</TABLE>
- --------
* Less than one percent.
(1) As of March 31, 1999, Omnipoint had outstanding 53,145,300 shares of
Common Stock. Amounts include outstanding options or warrants which are
exercisable within 60 days of March 31, 1999. Shares of Common Stock
subject to outstanding options or warrants which are exercisable within
60 days of March 31, 1999, 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 sole proprietorship. Mr. Smith has voting and
investment power with respect to these shares. Its address is 3 Bethesda
Metro Center, Suite 400, Bethesda, MD 20814.
(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").
Madison Dearborn Partners Inc. ("MDP Inc.") is the general partner of MDP
and exercises voting control over securities owned directly or indirectly
by MDP. 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. Allen & Company Incorporated ("Allen") disclaims
beneficial ownership of 317,368 shares and 123,750 shares issuable upon
exercise of options which are beneficially owned by certain officers of
Allen and related persons. Allen's address is 711 Fifth Avenue, New York,
NY 10022.
(5) These securities are owned by various individual and institutional
investors including T. Rowe Price Associates, Inc. ("Price Associates"),
which Price Associates serves as investment adviser with power to
11
<PAGE>
direct investments and/or sole power to vote the securities. For purposes
of reporting requirements of the Securities Exchange Act of 1934, Price
Associates is deemed to be a beneficial owner of such securities; however,
Price Associates expressly disclaims that it is, in fact, the beneficial
owner of such securities.
(6) Includes 76,800 shares of Common Stock issuable upon exercise of
outstanding options.
(7) Includes 3,835,717 shares owned by Allen (including shares issuable upon
exercise of outstanding warrants as described in Note 4) and 123,750
shares of Common Stock issuable upon exercise of outstanding options. Mr.
Fields is a Managing Director of Allen. Of such amounts, Mr. Fields does
not exercise voting or investment power over, and disclaims beneficial
ownership of, the 2,535,114 shares and 1,300,603 shares issuable upon
exercise of outstanding warrants which are held by Allen.
(8) Includes 255,992 shares of Common Stock issuable upon exercise of
outstanding options; 1,250 shares held in a family trust; and 78,025
shares held in a family limited partnership. Ms. Goldfine is the general
partner in such partnership and has sole voting and investment power with
regard to the 78,025 shares so held.
(9) Includes 1,600 shares of Common Stock issuable upon exercise of
outstanding options.
(10) 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.
(11) Includes 40,797 shares of Common Stock issuable upon exercise of
outstanding options.
(12) Includes 840,375 shares of Common Stock issuable upon exercise of
outstanding options held by Mr. Ross and 291,100 shares held in trust
for Mr. Ross' children. With respect to shares held in trust for his
children, Mr. Ross has sole voting and investment power. 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.
(13) Includes 202,504 shares of Common Stock issuable upon exercise of
outstanding options.
(14) Includes 31,720 shares owned by Mr. Smith's minor children, 5,139,380
shares held by Avance Capital, a sole proprietorship, and 755,969 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.
(15) The address of each of Ms. Goldfine and Messrs. Andersson, Johnston,
Plonskier, Schmitt and Smith, is c/o Omnipoint Corporation, 3 Bethesda
Metro Center, Suite 400, Bethesda, MD 20814.
(16) Includes 3,071,588 shares issuable upon exercise of outstanding options
and warrants.
12
<PAGE>
PROPOSAL NO. 2. APPROVAL OF AMENDMENT TO OMNIPOINT'S
EMPLOYEE STOCK PURCHASE PLAN
Omnipoint currently maintains an Employee Stock Purchase Plan (the "Plan"),
pursuant to which shares of Omnipoint's Common Stock may be purchased by
eligible employees of Omnipoint through payroll deduction at a discount. As
initially adopted in July 1996, 200,000 shares of Common Stock were reserved
for issuance under the Plan, which amount became fully exhausted on December
31, 1998. The Board of Directors of Omnipoint approved an amendment and
restatement of the Plan to increase the number of shares of Common Stock
available for issuance to participants under the Plan by 250,000 shares in
order to ensure the continued availability of the Plan to attract, retain and
motivate employees to participate in the long-term growth and financial
success of Omnipoint. Based on current levels of participation, Omnipoint
estimates that this increase in the shares reserved for the Plan will cover
Omnipoint's needs under the Plan through the end of 1999. All future purchases
under the Plan are subject to prior approval of the proposed amendment by the
stockholders. The following is a fair and complete summary of the principal
features of the Plan, as proposed, and it is qualified in its entirety by the
full text of the Plan, which appears as Exhibit A to this Proxy Statement.
General
The purpose of the Plan is to promote the success and enhance the value of
Omnipoint by providing eligible employees of Omnipoint and its participating
subsidiaries with the opportunity to purchase Common Stock of Omnipoint
through payroll deductions. The Plan is intended to qualify as an employee
stock purchase plan under Section 423 of the Internal Revenue Code of 1986, as
amended (the "Code").
The Plan, as amended, will provide for the issuance of an aggregate of
450,000 shares of Common Stock to employees, 200,000 of which have been issued
to date. In the event of a subdivision of outstanding shares of Common Stock,
payment of a stock dividend in Common Stock or other change affecting the
Common Stock, the Administrator (as described below) will make appropriate and
equitable adjustments in the aggregate number of shares that may be issued
under the Plan.
Administration
The Plan is administered by the Compensation Committee of the Board of
Directors (the "Administrator"). Subject to the terms of the Plan, the
Administrator has authority to interpret the Plan, make, amend and rescind all
rules and regulations for the operation of the Plan, take any other actions
and make all other determinations necessary or desirable to administer and
operate the Plan.
Eligibility to Receive Awards
All employees of Omnipoint, and all employees of any subsidiary of Omnipoint
that is designated by the Administrator as a participating employer under the
Plan (a "Designated Subsidiary"), who are regularly employed for 20 or more
hours per week and for more than five months per calendar year, are eligible
to participate in the Plan. However, any employee that owns, directly or
indirectly, 5% or more of the total combined voting power or value of the
stock of Omnipoint or any subsidiary of Omnipoint, is not eligible. As of
April 15, 1999, approximately 1,700 employees were eligible to participate in
the Plan.
Purchases of Common Stock Under the Plan
The Plan provides for annual offering periods ("Offering Periods") which
coincide with the calendar year. Each Offering Period consists of two six-
month purchase periods commencing on the first day that the Nasdaq National
Market is open for trading on or after January 1 and July 1 of each calendar
year (the "Purchase Periods"). At the beginning of each Offering Period,
participating employees are granted options to purchase Omnipoint's Common
Stock which are automatically exercised at the end of each Purchase Period as
described below.
13
<PAGE>
Employees who satisfy the eligibility requirements described above on the
first day of the Offering Period may enroll in the Plan as of the first day of
any Purchase Period in the Offering Period by authorizing payroll deductions
from their compensation for the Purchase Period. An employee who first becomes
eligible after the beginning of the Offering Period for a calendar year is
permitted to enroll for the second Purchase Period for that year if he or she
is eligible on the first day of that Purchase Period. Omnipoint maintains
payroll deduction accounts on behalf of each participating employee.
Participating employees may contribute through payroll deduction up to 10% of
eligible compensation. Participating employees are permitted to decrease or
discontinue payroll deductions once during any Purchase Period, but are not
permitted to increase their payroll deductions until the start of a subsequent
Purchase Period. Participants may withdraw from participation at any time and
receive a refund of the amounts credited to their payroll deduction accounts.
On the last trading day of each Purchase Period (the "Exercise Date"), each
participating employee's accumulated payroll deductions are applied to the
purchase of shares of Omnipoint's Common Stock for the employee provided that
the employee is still an eligible employee as of the Exercise Date. The
purchase price per share is equal to 85% of the Common Stock's closing price
on the first trading day of the Offering Period or on the Exercise Date,
whichever is lower. As of January 4, 1999, the closing price for a share of
Omnipoint's Common Stock, as quoted on the Nasdaq National Market, was $10.00.
The maximum aggregate purchases which an employee will be able to make in a
single calendar year is $25,000 worth of stock, based on the fair market value
of Omnipoint's Common Stock determined as of the first day of the Offering
Period. No purchases of Common Stock will be made on the Exercise Date for the
Purchase Period ending June 30, 1999, or thereafter, unless the proposed
amendment to the Plan is approved by the stockholders.
Because participation in the Plan and the level of payroll deductions made
by participants during each Purchase Period, up to the specified limit, is in
the discretion of eligible employees and because the purchase price for shares
under the Plan cannot be determined until the close of each Purchase Period,
the amount of Common Stock that will be received, and the amount of discount
that will be realized, by any participant if the amendment to the Plan is
approved cannot be determined. For the fiscal year ended December 31, 1998,
the benefits or amounts received by or allocated to each of the following
participants or groups of participants under the Plan were as follows:
New Plan Benefit Table
<TABLE>
<CAPTION>
Dollar Value ($) Number of
Name and Position of Discount Shares Purchased
----------------- ---------------- ----------------
<S> <C> <C>
Douglas G. Smith............................. -- --
George F. Schmitt............................ $14,314 864
Kjell S. Andersson........................... -- --
Charles R. Johnston.......................... -- --
Harry Plonskier.............................. 8,735 661
Executive Group(1)........................... 23,049 1,525
Non-Executive Director Group(2).............. 0 0
Non-Executive Officer Employee Group(3)...... 1,174,205 85,997
</TABLE>
- --------
(1) All current executive officers as a group.
(2) All current directors who are not executive officers as a group.
(3) All employees, including all current officers who are not executive
officers, as a group.
Amendment and Termination
The Board may amend the Plan at any time for any reason, except that (1) if
the approval of any such amendment by the stockholders of Omnipoint is
required by Code section 423, such amendment will not be effected without such
approval, and (2) no amendment may be made that would cause the Plan to fail
to comply with Code section 423.
14
<PAGE>
The Board may terminate the Plan at any time and for any reason. Upon the
Plan's termination, all amounts in participating employees' accounts under the
Plan will be promptly refunded.
Tax Aspects
The Plan is intended to qualify as an "employee stock purchase plan" under
the provisions of Code section 423. As such, neither the grant of options to
purchase shares under each Offering Period nor the actual purchase of shares
at the close of each Purchase Period will result in taxable income to the
employee or a deduction to Omnipoint.
If the employee disposes of shares acquired under the Plan (including by way
of gift) within two years after the commencement date of the Offering Period
in which the shares are purchased or within one year after the shares are
purchased, there will be a "disqualifying disposition" of the shares. Upon a
disqualifying disposition, the employee must recognize ordinary income equal
to the excess of the fair market value of the shares on their purchase date
over the purchase price paid to acquire the shares. This excess will be taxed
as ordinary income in the year of the disqualifying disposition even if no
gain is realized on the disposition or a gift of the shares is made. Any gain
realized on a disqualifying disposition in excess of the fair market value of
the shares on the purchase date generally will be treated as long-term or
short-term capital gain, depending on the holding period for such shares. If
the shares are sold for less than their fair market value measured as of the
purchase date, the same amount of ordinary income is attributed to the
employee and a capital loss equal to the difference between the purchase price
and the fair market value of the shares on the purchase date is recognized.
Omnipoint will have a corresponding tax deduction at the time of the
disqualifying disposition equal to the amount of ordinary income recognized by
the employee.
If an employee disposes of shares acquired under the Plan other than in a
disqualifying disposition (i.e., the disposition occurs after the holding
periods described above have been satisfied), the employee recognizes (1)
ordinary income equal to the difference between the employee's purchase price
and the fair market value of the shares on the commencement date of the
Offering Period in which the shares were purchased, or, if less, the
difference between the amount realized by the employee in the disposition and
the purchase price of the shares, and (2) a long-term capital gain for any
additional gain realized by the employee in the disposition. If the employee
sells the shares and the sale price is less than the purchase price, then
there is no ordinary income recognized and the employee recognizes a capital
loss for the difference between the sale price and the purchase price.
Omnipoint will not have a corresponding tax deduction for the ordinary income
recognized by the employee if there is not a disqualifying disposition.
Required Vote
Approval of the amendment of the Plan requires the affirmative vote of the
holders of a majority of the shares of Omnipoint's Common Stock present at the
Annual Meeting in person or by proxy and entitled to vote. Neither broker non-
votes nor abstentions are treated as votes cast for this purpose and have no
effect on the outcome of the vote.
Recommendation of the Board of Directors
The Board of Directors recommends a vote "FOR" the amendment to the Employee
Stock Purchase Plan.
15
<PAGE>
PROPOSAL NO. 3: RATIFICATION OF APPOINTMENT OF AUDITORS
PricewaterhouseCoopers LLP has served as Omnipoint's independent auditors
since inception and has been selected by the Board as Omnipoint's independent
auditors for the fiscal year ending December 31, 1999. 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 PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers LLP as the
independent auditors for the current year.
Required Vote
The ratification of the appointment of PricewaterhouseCoopers LLP as
Omnipoint's independent auditors for the fiscal year ending December 31, 1999
requires the affirmative vote of the holders of a majority of the shares of
Omnipoint'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 PricewaterhouseCoopers LLP as Omnipoint's independent auditors.
16
<PAGE>
STOCKHOLDER PROPOSALS
To be considered for presentation to the Annual Meeting of Stockholders to
be held in 2000, 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 30, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires Omnipoint's officers and
directors, and persons who own more than 10% of a registered class of
Omnipoint's equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater than 10% stockholders
are required by SEC regulation to furnish Omnipoint with copies of all Section
16(a) reports they file.
SEC rules require Omnipoint 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, Omnipoint believes that, for the period
beginning January 1, 1998 through December 31, 1998, all filing requirements
applicable to its officers, directors, and greater than 10% beneficial owners
were complied with, except that Messrs. Andersson, Ross, Schmitt and Smith did
not timely file Forms 4.
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 Omnipoint's 1998 Annual Report to Stockholders accompanies this
Proxy Statement. Omnipoint has filed an Annual Report for its fiscal year
ended December 31, 1998 on Form 10-K with the SEC. 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 27, 1999
Bethesda, Maryland
17
<PAGE>
EXHIBIT A
OMNIPOINT CORPORATION
AMENDED AND RESTATED
EMPLOYEE STOCK PURCHASE PLAN
The purpose of this Plan is to provide eligible employees of Omnipoint
Corporation (the "Company") and certain of its subsidiaries with opportunities
to purchase shares of the Company's Common Stock, $.01 par value (the "Common
Stock"). Four hundred and fifty thousand (450,000) shares of Common Stock in
the aggregate have been reserved and approved for this purpose.
1. Administration. The Plan will be administered by the Company's Board of
Directors (the "Board") or by a Committee appointed by the Board (the
"Committee"). The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto will be final and conclusive.
2. Eligibility. Participation in the Plan will neither be permitted nor
denied contrary to the requirements of Section 423 of the Internal Revenue
Code of 1986, as amended (the "Code"), and regulations promulgated thereunder.
All employees of the Company, including directors who are employees, and all
employees of any subsidiary of the Company (as defined in Section 424(f) of
the Code) designated by the Board or the Committee from time to time (a
"Designated Subsidiary"), are eligible to participate in any one or more of
the offerings of Options (as defined below) to purchase Common Stock under the
Plan, provided that:
(a) they are regularly employed by the Company or a Designated Subsidiary
for 20 or more hours a week and for more than five months in a calendar
year; and
(b) they are employees of the Company or a Designated Subsidiary on the
first day of the applicable Offering Period (as defined below).
No employee may be granted an Option hereunder if such employee, immediately
after the option is granted, owns 5% or more of the total combined voting
power or value of the stock of the Company or any subsidiary. For purposes of
the preceding sentence, the attribution rules of Section 424(d) of the Code
will apply in determining the stock ownership of an employee, and all stock
which the employee has a contractual right to purchase will be treated as
stock owned by the employee.
3. Offerings.
(a) Options granted pursuant to the Plan ("Offerings") may be exercised
during an offer period which will commence on the first day on which
national stock exchanges and the National Association of Securities Dealers
Automated Quotation ("NASDAQ") system are open for trading ("Trading Day")
on or after January 1 of each calendar year (the "Offering Commencement
Date") and terminating on the last Trading Day in such calendar year (each
such calendar year referred to herein as an "Offering Period"). Each
Offering Period under the Plan will consist of two consecutive six-month
purchase periods (each a "Purchase Period") commencing on the first Trading
Day on or after January 1 and July 1 during the Offering Period (the
"Purchase Period Commencement Dates").
(b) Notwithstanding the provisions of paragraph (a):
(i) the first Offering Period shall consist of a single Purchase
Period commencing on the first Trading Day on or after July 1, 1996,
and ending on December 31, 1996. With respect to the first Offering
Period described in this subparagraph (i), the term "Offering
Commencement Date" shall mean the first Trading Day on or after July 1,
1996, and the term "Offering Period" shall mean the period commencing
with the Offering Commencement Date and ending on December 31, 1996.
1
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(ii) with respect to any employee who first becomes eligible to
participate in the Plan after the Offering Commencement Date of any
Offering Period, but prior to the first Trading Day on or after July 1
of such Offering Period (the "July Offering Commencement Date"), the
Offering Period for the calendar year in which the employee becomes
eligible to participate will consist of a single Purchase Period
commencing on the July Offering Commencement Date and ending on the
last Trading Day in such calendar year. With respect to any Offering
Period described in this subparagraph (ii), the term "Offering
Commencement Date" shall mean the July Offering Commencement Date and
the term "Offering Period" shall mean the period commencing with the
July Offering Commencement Date and ending on the last Trading Day in
such calendar year.
(c) The Board will have the power to change the duration of Offering and
Purchase Periods (including the commencement and termination dates thereof)
with respect to future Offerings without shareholder approval if such
change is announced at least fifteen (15) days prior to the scheduled
beginning of the first Offering Period to be affected thereafter.
4. Participation. An employee eligible on the Offering Commencement Date of
any Offering may participate in such Offering by completing and forwarding a
payroll deduction authorization form to the Controller of the Company at least
14 days prior to the applicable Purchase Period Commencement Date. The form
will authorize a regular payroll deduction from the Compensation received by
the employee during the Purchase Period. Unless an employee files a new form
or withdraws from the Plan, his deductions and purchases will continue at the
same rate for future Offerings and Purchase Periods under the Plan as long as
the Plan remains in effect. The term "Compensation" means the amount of
taxable income reportable for federal income tax purposes on the employee's
Federal Income Tax Withholding Statement, excluding overtime, shift premium,
incentive or bonus awards, allowances and reimbursements for expenses such as
relocation allowances or travel expenses, income or gains on the exercise of
Company stock options or stock appreciation rights, and similar items, whether
or not shown on the employee's Federal Income Tax Withholding Statement, but
including, in the case of salespersons, sales commissions to the extent
determined by the Board or the Committee. "Compensation" shall be determined
before reductions for any contributions to any plan maintained by the Company
and described in Section 401(k) or Section 125 of the Code.
5. Deductions.
(a) The Company will maintain payroll deduction accounts for all
participating employees. With respect to any Purchase Period under this
Plan, an eligible employee may authorize a payroll deduction in any whole
number percentage up to a maximum of 10% of the Compensation he or she
receives during the Purchase Period or such shorter period during which
deductions from payroll are made.
(b) No employee may be granted an Option which permits his rights to
purchase Common Stock under this Plan and any other stock purchase plan of
the Company and its subsidiaries, to accrue at a rate which exceeds $25,000
of the fair market value of such Common Stock (determined at the Offering
Commencement Date of the Offering Period) for each calendar year in which
the Option is outstanding at any time, as required by Section 423 of the
Code.
6. Deduction Changes. An employee may decrease or discontinue his payroll
deduction once during any Purchase Period by filing a new payroll deduction
authorization form. However, an employee may not increase his payroll
deduction during a Purchase Period. If an employee elects to discontinue his
payroll deductions during a Purchase Period, but does not elect to withdraw
his funds pursuant to Section 8 hereof, funds deducted prior to his election
to discontinue will be applied to the purchase of Common Stock on the Exercise
Date (as defined below).
7. Interest. Interest will not be paid on any employee payroll deduction
accounts, except to the extent that the Board or the Committee, in its sole
discretion, elects to credit such accounts with interest at such per annum
rate as it may from time to time determine.
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8. Withdrawal of Funds. An employee may on any one occasion during a
Purchase Period and for any reason withdraw all or part of the balance
accumulated in the employee's payroll deduction account. Any such withdrawal
must be effected prior to the close of business on the last day of the
Purchase Period. If the employee withdraws all of such balance, the employee
will thereby withdraw from participation in the Offering and may not begin
participation again during the remainder of the Purchase Period. Any employee
withdrawing all or part of such balance may participate in any subsequent
Purchase Period of any Offering in accordance with terms and conditions
established by the Board or the Committee, except that, unless otherwise
permitted under Section 16 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules promulgated thereunder, any employee who
is also a director and/or officer of the Company within the meaning of Section
16 of the Exchange Act may not (a) withdraw less than all of the balance
accumulated in such employee's payroll deduction account or (b) participate in
any subsequent Purchase Period of any Offering for a period of at least six
months as provided in Rule 16b-3(d)(2)(i) or any successor provision under the
Exchange Act.
9. Purchase of Shares.
(a) On the Offering Commencement Date of each Offering Period, the
Company will grant to each eligible employee who is then eligible to
participate in the Plan an option (an "Option") to purchase during the
Offering Period such number of whole shares of Common Stock of the Company
reserved for the purposes of the Plan as does not exceed the number of
shares determined by dividing (i) $25,000 by (ii) the closing price (as
defined in the next paragraph) of Common Stock on the Offering Commencement
Date of such Offering Period. The Option may be exercised, at the election
of the Participant, for any or all of the shares subject to the unexercised
portion of the Option on the last Trading Day of any Purchase Period during
the Offering Period (each an "Exercise Date"), subject to the limitations
set forth in this Plan.
(b) The Option Price for each share purchased pursuant to an Option
during a Purchase Period will be 85% of the closing price of the Common
Stock on (i) the Offering Commencement Date of such Offering Period or (ii)
the applicable Exercise Date, whichever closing price will be less. Such
closing price will be (A) the closing price of the Common Stock on any
national securities exchange on which the Common Stock is listed, or (B)
the closing price of the Common Stock on the NASDAQ National Market
("NASDAQ") or (C) the average of the closing bid and asked prices in the
over-the-counter market, whichever is applicable, as published in The Wall
Street Journal. If no sales of Common Stock were made on such a day, the
price of the Common Stock for purposes of clauses (A) and (B) above will be
the reported price for the next preceding day on which sales were made.
(c) Each employee who continues to be a participant in the Plan on an
Exercise Date will be deemed to have exercised his Option at the Option
Price on such date and will be deemed to have purchased from the Company
the number of full shares of Common Stock reserved for the purpose of the
Plan that his accumulated payroll deductions on such date will pay for
pursuant to the formula set forth above (but not in excess of the maximum
number of shares for which the Option was granted and has not previously
been exercised, determined in the manner set forth above).
(d) Any balance remaining in an employee's payroll deduction account at
the end of the first Purchase Period of any Offering will be carried
forward into the employee's payroll deduction account for the second
Purchase Period of the Offering, unless the Option has been fully exercised
in the first Purchase Period or the employee elects not to participate in
the second Purchase Period of the Offering, in which case the balance of
the employee's account will be refunded. Any balance remaining in an
employee's payroll deduction account at the end of an Offering Period will
be automatically refunded to the employee, except that any balance which is
less than the purchase price of one share of Common Stock will be carried
forward into the employee's payroll deduction account for the following
Offering, unless the employee elects not to participate in the following
Offering under the Plan, in which case the balance in the employee's
account will be refunded.
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10. Issuance of Certificates. As soon as practicable following the end of
each Purchase Period, certificates representing shares of Common Stock
purchased under the Plan on the Exercise Date for such Purchase Period shall
be issued only in the name of the employee, in the name of the employee and
another person of legal age as joint tenants with rights of survivorship, or
(in the Company's sole discretion) in the street name of a brokerage firm,
bank or other nominee holder designated by the employee.
11. Rights on Retirement, Death or Termination of Employment. In the event
of a participating employee's termination of employment prior to the last
business day of a Purchase Period (whether as a result of the employee's
voluntary or involuntary termination, retirement, death or otherwise), no
payroll deduction will be taken from any pay due and owing to the employee and
the balance in the employee's payroll deduction account will be paid to the
employee or, in the event of the employee's death, (a) to a beneficiary
previously designated in a revocable notice signed by the employee (with any
spousal consent required under state law) or (b) in the absence of such a
designated beneficiary, to the executor or administrator of the employee's
estate or (c) if no such executor or administrator has been appointed to the
knowledge of the Company, to such other person(s) as the Company may, in its
discretion, designate. If, prior to the last business day of a Purchase
Period, the Designated Subsidiary by which an employee is employed will cease
to be a subsidiary of the Company, or if the employee is transferred to a
subsidiary of the Company that is not a Designated Subsidiary, the employee
will be deemed to have terminated employment for the purposes of this Plan.
12. Optionees Not Stockholders. Neither the granting of an Option to an
employee nor the deductions from his pay will constitute such employee a
stockholder of the shares of Common Stock covered by an Option under this Plan
until such shares have been purchased by and issued to him.
13. Rights Not Transferable. Rights under this Plan are not transferable by
a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
14. Adjustment in Case of Changes Affecting Common Stock. In the event of a
subdivision of outstanding shares of Common Stock, or the payment of a
dividend in Common Stock, the number of shares approved for this Plan, and the
share limitation set forth in Section 9, will be increased proportionately,
and such other adjustment will be made as may be deemed equitable by the Board
or the Committee. In the event of any other change affecting the Common Stock,
such adjustment will be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.
15. Merger.
(a) If the Company at any time merges or consolidates with another
corporation and the holders of the capital stock of the Company immediately
prior to such merger or consolidation continue to hold at least 80% by
voting power of the capital stock of the surviving corporation ("Continuity
of Control"), the holder of each Option then outstanding will thereafter be
entitled to receive at the next Exercise Date upon the exercise of such
Option for each share as to which such Option will be exercised the
securities or property which a holder of one share of the Common Stock was
entitled to upon and at the time of such merger, and the Board or the
Committee will take such steps in connection with such merger as the Board
or the Committee deem necessary to assure that the provisions of this
Section 15 will thereafter be applicable, as nearly as reasonably may be,
in relation to the said securities or property as to which such holder of
such Option might thereafter be entitled to receive thereunder.
(b) In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or a sale
of all or substantially all of the assets of the Company while unexercised
Options remain outstanding under the Plan, (i) subject to the provisions of
clauses (ii) and (iii), after the effective date of such transaction, each
holder of an outstanding Option will be entitled, upon exercise of such
Option, to receive in lieu of shares of Common Stock, shares of such stock
or other securities as the holders of shares of Common Stock received
pursuant to the terms of such transaction; or
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(ii) all outstanding Options may be canceled by the Board or the Committee
as of a date prior to the effective date of any such transaction and all
payroll deductions will be paid out to the participating employees; or
(iii) all outstanding Options may be canceled by the Board or the Committee
as of the effective date of any such transaction, provided that notice of
such cancellation will be given to each holder of an Option, and each
holder of an Option will have the right to exercise such Option in full
based on payroll deductions then credited to his account as of a date
determined by the Board or the Committee, which date will not be less than
ten (10) days preceding the effective date of such transaction.
16. Amendment of the Plan. The Board may at any time, and from time to time,
amend this Plan in any respect, except that (a) if the approval of any such
amendment by the stockholders of the Company is required by Section 423 of the
Code or by Rule 16b-3 under the Exchange Act, such amendment will not be
effected without such approval, and (b) in no event may any amendment be made
which would cause the Plan to fail to comply with Section 16 of the Exchange
Act and the rules promulgated thereunder, as in effect from time to time, or
Section 423 of the Code.
17. Insufficient Shares. In the event that the total number of shares of
Common Stock specified in elections to be purchased under any Offering plus
the number of shares purchased under previous Offerings under this Plan
exceeds the maximum number of shares issuable under this Plan, the Board or
the Committee will allot the shares then available on a pro rata basis.
18. Termination of the Plan. This Plan may be terminated at any time by the
Board. Upon termination of this Plan all amounts in the payroll deduction
accounts of participating employees will be promptly refunded.
19. Governmental Regulations.
(a) The Company's obligation to sell and deliver Common Stock under this
Plan is subject to listing on a national stock exchange or quotation on
NASDAQ and the approval of all governmental authorities required in
connection with the authorization, issuance or sale of such stock.
(b) The Plan will be governed by the laws of the State of Delaware except
to the extent that such law is preempted by federal law.
(c) The Plan is intended to comply with the provisions of Rule 16b-3
promulgated under the Exchange Act. Any provision inconsistent with such
Rule will to that extent be inoperative and will not affect the validity of
the Plan.
20. Issuance of Shares. Shares may be issued upon exercise of an Option from
authorized but unissued Common Stock, from shares held in the treasury of the
Company, or from any other proper source.
21. Notification upon Sale of Shares. Each employee agrees, by entering the
Plan, to promptly give the Company notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased
or one year after the transfer of such share to the employee, so that the
Company may take appropriate income tax deductions with respect to such
transfer and otherwise comply with applicable federal, state and local income
tax laws.
22. Effective Date and Approval of Stockholders. The Plan will take effect
on July 1, 1996, subject to approval by the stockholders of the Company as
required by Rule 16b-3 under the Exchange Act and by Section 423 of the Code,
which approval must occur within twelve months of the adoption of the Plan by
the Board.
Date Plan initially adopted by the Board: March 1996
Date Plan initially approved by stockholders: May 1996
Date Amended and Restated Plan approved by the Board subject to stockholder
approval: May 1999
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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 Harry Plonskler
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 27, 1999,
at 2:30 p.m. local time, or any adjournment thereof.
(Continued, and to be marked, dated and signed, on the other side)
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FOLD AND DETACH HERE
<PAGE>
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[X] Please mark
your votes as
indicated in
this example
The Board of Directors recommends a vote "FOR" Items 1, 2 and 3.
WITHHELD
FOR FOR ALL
ITEM 1. ELECTION OF DIRECTORS
Nominees: Richard L. Fields, Evelyn Goldline, [ ] [ ]
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)
- --------------------------------------
FOR AGAINST ABSTAIN
ITEM 2. ADOPTION OF AN AMENDMENT TO [ ] [ ] [ ]
THE EMPLOYEE STOCK PURCHASE
PLAN.
ITEM 3. APPOINTMENT OF INDEPENDENT [ ] [ ] [ ]
AUDITORS
Signature ____________________ Signature _____________________ Date __________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
- --------------------------------------------------------------------------------
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
FOLD AND DETACH HERE
