<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SUPERIOR TELECOM INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of security to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE>
SUPERIOR TELECOM INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
August 28, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Superior TeleCom Inc. (the "Company"), a Delaware corporation, to be held on
Wednesday, September 24, 1997 at 10:00 a.m., local time, at Le Parker Meridien
hotel, third floor, 118 West 57th Street, New York, New York.
At this meeting, you will be asked to consider and vote upon the election of the
five directors of the Company and the ratification of the appointment of Arthur
Andersen LLP as the Company's independent certified public accountants.
YOUR VOTE IS IMPORTANT. The Board of Directors appreciates and encourages
stockholder participation in the Company's affairs and cordially invites you to
attend the meeting in person. It is important in any event that your shares be
represented and we ask that you sign, date and mail the enclosed proxy card in
the envelope provided at your earliest convenience.
We sincerely thank you for your support.
Very truly yours,
Steven S. Elbaum
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
<PAGE>
SUPERIOR TELECOM INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 24, 1997
To the Stockholders of Superior TeleCom Inc.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Superior
TeleCom Inc. (the "Company"), a Delaware corporation, will be held on September
24, 1997 at 10:00 a.m., local time, at Le Parker Meridien hotel, third floor,
118 West 57th Street, New York, New York for the purposes of considering and
voting upon the following matters, as more fully described in the attached Proxy
Statement:
1. To elect five directors of the Company;
2. To ratify the appointment of Arthur Andersen LLP as the independent
certified public accountants of the Company; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on July 28, 1997 as
the record date for the determination of stockholders entitled to notice of, and
to vote at, the meeting.
By Order of the Board of Directors,
Stewart H. Wahrsager
SECRETARY
August 28, 1997
YOUR ATTENTION IS DIRECTED TO THE ACCOMPANYING PROXY STATEMENT
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU EXPECT TO BE PRESENT, PLEASE MARK, DATE, SIGN AND RETURN THE ACCOMPANYING
FORM OF PROXY IN THE ENVELOPE ENCLOSED (TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES) SO THAT YOUR VOTE CAN BE RECORDED.
<PAGE>
SUPERIOR TELECOM INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 24, 1997
This Proxy Statement is being furnished to the stockholders of Superior
TeleCom Inc. (the "Company") in connection with the solicitation of proxies, in
the accompanying form, by the Company, for use at the Annual Meeting of
Stockholders to be held at 10:00 a.m., local time, on September 24, 1997 at Le
Parker Meridien hotel, third floor, 118 West 57th Street, New York, New York and
at any and all adjournments or postponements thereof.
The stockholders of record at the close of business on July 28, 1997 will be
entitled to receive notice of and to vote at the meeting and any adjournments or
postponements thereof. As of July 28, 1997, there were issued and outstanding
12,926,536 shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), the only class of voting securities outstanding. The
stockholders of record will be entitled to one vote for each share of Common
Stock registered in his or her name on the record date. A majority of all the
outstanding shares of the Common Stock constitutes a quorum and is required to
be present in person or by proxy to conduct business at the meeting.
Stockholders may revoke the authority granted by their executed proxies at
any time prior to their use by filing with the Secretary of the Company a
written revocation or a duly executed proxy bearing a later date or by attending
the meeting and voting in person. Solicitation of proxies will be made chiefly
through the mails, but additional solicitation may be made by telephone or
telegram by the officers or regular employees of the Company (who will not be
specifically compensated for such services). The Company may also enlist the aid
of brokerage houses or the Company's transfer agent in soliciting proxies, and
the Company will reimburse them for their reasonable expenses. All solicitation
expenses, including costs of preparing, assembling and mailing proxy material,
will be borne by the Company. This proxy statement and accompanying form of
proxy are being mailed to stockholders on or about August 28, 1997.
Shares of the Common Stock represented by executed and unrevoked proxies
will be voted in accordance with the choice or instructions specified thereon.
It is the intention of the persons named in the proxy, unless otherwise
specifically instructed in the proxy, to vote all proxies received by them in
favor of the five nominees named herein for election as directors and in favor
of the ratification of the appointment of Arthur Andersen LLP as the independent
public accountants of the Company. The Board of Directors does not know of any
other matters which may be presented for consideration at the meeting. However,
if other matters properly come before the meeting, the persons named in the
accompanying proxy intend to vote thereon in accordance with their judgment.
If a quorum is present at the meeting, those nominees receiving a plurality
of the votes cast will be elected as directors. The affirmative vote of the
holders of a majority in voting power of the shares present in person or
represented by proxy and entitled to vote at the meeting will be required to
ratify the appointment of Arthur Andersen LLP as the independent public
accountants of the Company. Abstentions from voting on a proposal will have the
effect of a "no" vote. Broker non-votes are not considered shares present, are
not entitled to vote and therefore will not affect the outcome of the vote on a
proposal.
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table contains information as of July 28, 1997 regarding the
number of shares of Common Stock beneficially owned by (i) each person known to
the Company to have beneficial ownership of more than five percent thereof, (ii)
each director of the Company, (iii) each executive officer named in the Summary
Compensation Table herein, and (iv) all directors and executive officers as a
group. The information contained herein is based on information provided by such
beneficial holders to the Company.
<PAGE>
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
<TABLE>
<CAPTION>
COMMON STOCK
------------------------------------
<S> <C> <C>
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- --------------------------------------------------------------------------- ----------------- -----------------
The Alpine Group, Inc...................................................... 6,474,048 50.1%
1790 Broadway
New York, NY 10019-1412
Steven S. Elbaum........................................................... 6,557,381(1) 50.4
1790 Broadway
New York, NY 10019-1412
Vinik Partners, L.P........................................................ 1,015,800(2) 7.9
c/o Peter A. Nussbaum, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Justin F. Deedy, Jr........................................................ 33,706(3) *
David S. Aldridge.......................................................... 16,666(4) *
Robert J. Levenson......................................................... 16,100(5) *
Charles Y.C. Tse........................................................... 7,000(6) *
Eugene P. Connell.......................................................... 5,000(4) *
Bragi F. Schut............................................................. 5,000(4) *
All directors and executive officers as a group............................ 6,640,853(7) 50.8
</TABLE>
- ------------------------
* Less than one percent
(1) Includes 6,474,048 shares of Common Stock owned by The Alpine Group, Inc.
("Alpine"). Mr. Elbaum may be deemed to be the beneficial owner of such
shares by virtue of his position as Chairman of the Board and Chief
Executive Officer of Alpine and his beneficial ownership of 9.5% of the
issued and outstanding common stock of Alpine. Also includes 83,333 shares
of Common Stock issuable upon exercise of certain stock options.
(2) Includes 423,700 shares owned beneficially by Vinik Partners, L.P., 558,900
shares beneficially owned by Vinik Overseas Fund, Ltd., and 33,200 shares
held in a discretionary account managed by Vinik Asset Management, L.P.
Based upon a Schedule 13-D, Amendment No.1, filed with the Securities and
Exchange Commission on or about June 24, 1997. In addition, Jeffrey N.
Vinik, Michael S. Gordon and Mark D. Hostetter may be deemed to be the
beneficial owners of such shares and VGH Partners, L.L.C. and Vinik Asset
Management, L.L.C. may be deemed to be the beneficial owners of 423,700 and
592,100, of such shares, respectively.
(3) Includes 33,333 shares issuable upon exercise of certain stock options.
(4) Represents shares issuable upon exercise of certain stock options.
(5) Includes (i) 100 shares held in the name of Mr. Levenson's wife as custodian
for her minor son, as to which shares Mr. Levenson disclaims beneficial
ownership, (ii) 1,000 shares held in joint name with Mr. Levenson's
daughter, as to which shares Mr. Levenson disclaims beneficial ownership and
(iii) 5,000 shares issuable upon exercise of certain stock options.
(6) Includes 5,000 shares issuable upon exercise of certain stock options.
2
<PAGE>
(7) Includes (i) 6,474,048 shares of Common Stock owned by Alpine and (ii)
153,332 shares issuable upon exercise of certain stock options.
PROPOSAL I: ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of five directors,
all with terms expiring at each annual meeting of stockholders. Each of the five
current directors, Steven S. Elbaum, Eugene P. Connell, Robert J. Levenson,
Bragi F. Schut and Charles Y.C. Tse, have been nominated for reelection with
terms to expire at the next annual meeting of stockholders.
It is the intention of each of the persons named in the accompanying form of
proxy to vote the shares represented thereby in favor of each of the five
nominees. In case any of the nominees are unable or decline to serve, such
persons named in the accompanying form of proxy reserve the right to vote the
shares represented by such proxy for another person duly nominated by the Board
in his stead or, if no other person is nominated, to vote such shares only for
the remaining nominee(s). The Board has no reason to believe that any person
named will be unable or will decline to serve.
INFORMATION WITH RESPECT TO NOMINEES
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED
NAME AGE DIRECTOR POSITION WITH THE COMPANY AND OTHER BUSINESS EXPERIENCE
- ------------------------ --- ----------- ----------------------------------------------------------------------
<S> <C> <C> <C>
Steven S. Elbaum 48 1996 Chairman of the Board of Directors, President and Chief Executive
Officer of the Company since 1996; Chairman of the Board of Directors
and Chief Executive Officer of Alpine, the owner of 50.1% of the
Common Stock, since 1984; and a director of Interim Services, Inc., a
provider of value added staffing and health care services, Humascan,
Inc., a developer of medical testing devices, and Broadway & Seymour,
Inc., a software and systems integration company; and Chairman of the
Board of Directors of PolyVision Corporation, an information display
company.
Eugene P. Connell 59 1996 Chairman of Lynch Interactive Corporation, an owner and operator of
independent telephone companies throughout the United States. From
January 1996 to June 1996, he served as Vice President -- Global
Markets Integration of NYNEX Corporation. From October 1992 to January
1996, he served as President, Chief Executive Officer and Director of
NYNEX CableComms Group, a provider of telecommunications services and
cable television in the United Kingdom. From May 1989 to October 1992,
he was Vice President of Marketing and Technology of New York
Telephone Company, a subsidiary of NYNEX Corporation. Mr. Connell held
numerous other positions with New York Telephone Company over the
prior 32 years.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
ELECTED
NAME AGE DIRECTOR POSITION WITH THE COMPANY AND OTHER BUSINESS EXPERIENCE
- ------------------------ --- ----------- ----------------------------------------------------------------------
<S> <C> <C> <C>
Robert J. Levenson 56 1996 Executive Vice President and a Director of First Data Corp., a
provider of transaction processing and related services, since May
1993. Mr. Levenson formerly served as the Senior Executive Vice
President, Chief Operating Officer, member of the Office of the
President and a director of Medco Containment Services, Inc., a
provider of managed care prescription benefits (now a subsidiary of
Merck & Co., Inc.), from October 1990 through December 1992. From 1985
until October 1990, Mr. Levenson was a Group President and a Director
of Automatic Data Processing, Inc., a computerized transaction
processing and information services company. Mr. Levenson also serves
as a director of Broadway & Seymour, Inc., a software and systems
integration company.
Bragi F. Schut 56 1996 Executive Vice President of Alpine since 1986; a director of Alpine
since 1983; and a director of PolyVision Corporation, an information
display company.
Charles Y.C. Tse 70 1996 Former Vice-Chairman and President of international operations of
Warner Lambert Company, a major pharmaceutical and consumer products
company. Mr. Tse is a director of Foster Wheeler Corporation and
Transcell Technologies, Inc. Mr. Tse served as President of The Cancer
Research Institute, Inc. from 1991 to 1992.
</TABLE>
BOARD AND COMMITTEE MEETINGS
During the period from October 17, 1996 to April 30, 1997, the Board of
Directors held two meetings. On October 17, 1996, the initial public offering
(the "Offering") of the Common Stock was consummated. Prior to October 17, 1996
and since the Company's organization in July 1996, Alpine owned all of the
Common Stock. During that period, Messrs. Elbaum and Schut served as the
directors of the Company, one meeting of the Board of Directors was held, and,
in lieu of other meetings of the Board of Directors, actions by the Board and
any committees thereof were taken by unanimous written consent in accordance
with Section 141(f) of the General Corporation Law of the State of Delaware.
The Board of Directors has a Compensation Committee and an Audit Committee,
which were formed concurrently with the consummation of the Offering. Prior to
October 2, 1996, the date on which Alpine contributed (the "Reorganization") the
capital stock of Superior Telecommunications Inc. ("Superior") and DNE Systems
Inc. ("DNE") to the Company, the Company had substantially no business
activities other than those in connection with and in contemplation of the
Reorganization and the Offering. During the fiscal year ended April 30, 1997,
each member of the Board attended at least 75% of the meetings of the Board and
meetings of any committees of the Board on which he served that were held during
the time he served.
The present members of the Compensation Committee are Messrs. Connell,
Elbaum and Levenson. The principal functions of the Compensation Committee are
to administer the Company's 1996 Employee Stock Option Plan and Employee Stock
Purchase Plan and, on behalf of the Board of Directors, to review current and
proposed employment arrangements with existing and prospective senior management
employees and to review and determine matters pertaining to base and incentive
compensation for the Chairman, President and Chief Executive Officer and other
senior management employees. During the
4
<PAGE>
fiscal year ended April 30, 1997, the Compensation Committee had one meeting.
The Compensation Committee also has created an Incentive Compensation
Subcommittee consisting of Mr. Connell and Mr. Levenson to address all issues
before the Compensation Committee that require decisions by directors who
qualify as outside directors under Section 162(m) of the Internal Revenue Code
of 1986, as amended, and as non-employee directors under Section 16(b) of the
Securities Exchange Act of 1934, as amended. The Incentive Compensation
Subcommittee will review and approve grants of stock options and stock awards
pursuant to the Company's 1996 Employee Stock Option Plan. During the fiscal
year ended April 30, 1997, the Incentive Compensation Subcommittee did not meet.
The present members of the Audit Committee are Messrs. Connell, Levenson and
Tse. The Audit Committee's principal functions are to review the Company's
annual and periodic financial statements, to examine and consider matters
relating to the administration and audit of the Company's accounts and its
financial affairs, to recommend the employment of outside auditors, to review
and pass upon the transactions between the Company and its 50.1% stockholder,
Alpine, and to meet with the Company's personnel as it deems appropriate to
carry out its functions. The Audit Committee met once during the fiscal year
ended April 30, 1997.
VOTE REQUIRED
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF THE COMMON STOCK VOTE FOR
THE FIVE NOMINEES LISTED ABOVE. Their election will require a plurality of the
votes cast by holders of the Common Stock present in person or represented by
proxy and entitled to vote.
MANAGEMENT
EXECUTIVE OFFICERS
Set forth below is certain information regarding the executive officers of
the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY AND OTHER BUSINESS EXPERIENCE
- ------------------------ --- ---------------------------------------------------------------------------------
<S> <C> <C>
Steven S. Elbaum 48 Chairman of the Board, President and Chief Executive Officer since 1996; Chairman
of the Board of Directors and Chief Executive Officer of Alpine since 1984.
Justin F. Deedy, Jr. 41 Senior Vice President of the Company since July 1996 and President of the
Company's Superior Telecommunications Inc. subsidiary since July 1993. Mr. Deedy
was Vice President of Superior Telecommunications Inc. (or its predecessor) from
April 1991 through July 1993 and Vice President and General Manager of Wilcom
Products, Inc., formerly a subsidiary of Superior Telecommunications Inc. and a
manufacturer of testing equipment for copper wire and fiber optic transmission
equipment, from May 1989 through March 1991.
David S. Aldridge 43 Chief Financial Officer and Treasurer since 1996; Chief Financial Officer of
Alpine since November 1993 and Treasurer of Alpine since January 1994. Prior to
1994, he was Chief Financial Officer of Superior Telecommunications Inc.(or its
predecessor).
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
compensation earned by or paid to the Company's executive officers for the
period from October 2, 1996 to April 30, 1997.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
FISCAL 1997 ANNUAL
COMPENSATION (1)
------------------------
<S> <C> <C> <C> <C>
OPTION
NAME AND PRINCIPAL POSITION SALARY BONUS SHARES (5) OTHER
- -------------------------------------------------- -------- ------------ ---------- -------
Steven S. Elbaum.................................. $102,000(2) -- 250,000 --
Chairman, President
and Chief Executive Officer
Justin F. Deedy, Jr............................... 104,000(2) $ 84,000(3) 100,000 $35,770(6)
Senior Vice President of the Company 150,000(4)
and President of Superior
Telecommunications Inc.
David S. Aldridge (7)............................. -- -- 50,000 --
Chief Financial Officer
</TABLE>
- ------------------------
(1) The aggregate dollar value of all perquisites and other personal benefits,
securities or property earned by or paid to any of the named individuals did
not exceed the lesser of $50,000 or 10% of the total annual salary and bonus
set forth for such individual during the applicable period.
(2) Messrs. Elbaum and Deedy's salaries reflect amounts received for the period
October 2, 1996 (i.e., the date of the Reorganization) through April 30,
1997. In Mr. Deedy's case, the amount does not include $42,000 in salary
paid to Mr. Deedy by Superior for the period July 17, 1996 (the date of the
Company's incorporation) through October 2, 1996.
(3) Annual cash incentive bonus payment awarded to Mr. Deedy in respect of
fiscal 1997, including the period prior to the Reorganization.
(4) Discretionary cash bonus awarded in respect of fiscal 1997.
(5) Options granted under the 1996 Employee Stock Option Plan in conjunction
with the initial public offering of the Common Stock and effective October
17, 1996.
(6) The amounts set forth include (i) matching contribution under the defined
contribution plan of the Company's wholly-owned subsidiary, Superior and
(ii) $33,250 pursuant to Mr. Deedy's employment agreement for federal tax
consequences upon vesting of certain restricted stock grants.
(7) Mr. Aldridge acts as Chief Financial Officer of the Company. However, he is
employed by the Company's 50.1% stockholder, Alpine. Alpine is reimbursed
for his services by the Company through a Services Agreement as described
under "Certain Transactions."
STOCK OPTION GRANTS IN FISCAL 1997
The following sets forth information concerning the grant of stock options
during fiscal 1997 to the executive officers set forth on the Summary
Compensation Table and the fiscal year-end value of unexercised options.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
(AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM)
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------------
NAME GRANTED FISCAL 1997 ($/SH) DATE 5% 10%
- --------------------------------------- -------------- --------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum....................... 250,000 33.4% $ 16.00 10/17/06 $ 2,515,000 $ 6,315,000
Justin F. Deedy, Jr.................... 100,000 13.4 $ 16.00 10/17/06 1,006,200 2,550,000
David S. Aldridge...................... 50,000 6.7 $ 16.00 10/17/06 503,100 1,275,000
</TABLE>
6
<PAGE>
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES
The following table presents information for the individuals named above as
to the exercise of stock options during the fiscal year ended April 30, 1997 and
the number of shares underlying, and the value of, unexercised options
outstanding at April 30, 1997:
<TABLE>
<CAPTION>
NUMBER OF SHARES
EXERCISES DURING UNDERLYING VALUE OF UNEXERCISED
THE FISCAL YEAR UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS(1)
-------------------------- -------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
NUMBER OF
SHARES VALUE
NAME ACQUIRED REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------------------------- ----------- ------------- ----------- ------------- ----------- -------------
Steven S. Elbaum............................ -- -- 83,333 166,667 $ 458,331 $ 916,668
Justin F. Deedy, Jr......................... -- -- 33,333 66,667 183,331 366,669
David S. Aldridge........................... -- -- 16,666 33,334 91,663 183,337
</TABLE>
- ------------------------
(1) Based on the closing price of $21.50 of the Common Stock on April 30, 1997.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company or otherwise compensated by
the Company are entitled to be paid an annual retainer fee of $15,000 per year,
together with expenses of attendance, plus $1,000 for each meeting of the Board
or of a committee of the Board attended. In addition, Directors who are not
employees of the Company or otherwise compensated by the Company will each
receive, under the Company's 1996 Employee Stock Option Plan, an option to
purchase 7,500 shares of Common Stock as of the first day of the month following
each annual meeting of stockholders, the exercise price of such options to be
equal to the fair market value of the Common Stock at the time of grant. Such
options will vest in three equal annual installments (or upon a "change in
control" of the Company, as defined in the plan), may be exercised only after a
director has served in such capacity for at least one year and expire upon the
tenth anniversary of the date of grant.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement pursuant to which Mr. Elbaum serves
as Chairman of the Board, President and Chief Executive Officer of the Company
at an annual base salary of $175,000, as adjusted annually for increases in the
Consumer Price Index, and an annual bonus payable at the discretion of the Board
of Directors. The agreement with Mr. Elbaum also provides that Mr. Elbaum will
serve on the Board of Directors of the Company and provides for certain other
benefits, including medical, dental and other insurance benefits.
Mr. Elbaum's employment agreement is for a term ending upon the occurrence
of any of the following events: (i) notification by Mr. Elbaum or the Company to
the other that he or it desires to terminate the employment agreement; (ii) the
death or disability of Mr. Elbaum; (iii) termination by the Company for "cause"
and (iv) termination by Mr. Elbaum for "good reason." Generally, if Mr. Elbaum
terminates his employment for "good reason," or the Company terminates his
employment without cause, Mr. Elbaum is entitled to receive a severance payment
equal to one and one-half to two times his annual salary and bonus for the prior
year. In the event of termination of employment under other circumstances,
including a "change in control" of the Company (which is defined as (i) the
acquisition by a person or entity of 20% of the Company's voting securities,
(ii) the occurrence of circumstances such that individuals who constituted the
Company's Board of Directors as of October 17, 1996 no longer constitute a
majority of the Company's Board of Directors, (iii) a transaction involving the
sale of all or substantially all of the Company's assets, (iv) certain other
business combinations or (v) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company), Mr. Elbaum is entitled to
certain benefits described in the employment agreement.
7
<PAGE>
The Company has assumed the obligations of its wholly-owned subsidiary,
Superior, under an employment agreement with Mr. Deedy providing for his
employment as President of Superior at an annual base salary of $188,400, as
adjusted annually for increases in the Consumer Price Index, plus an annual
performance-based bonus. The agreement may be terminated by either party on
notice, for cause by Superior and upon the occurrence of certain other events.
The agreement contains certain provisions relating to compensation upon his
termination, including termination following a change in control. In addition,
the agreement provides for certain other benefits, including medical, dental and
other insurance benefits.
During fiscal 1997, Mr. Deedy participated in Alpine's Senior Executive
Retirement Plan ("SERP") which became effective in February 1997. The SERP is an
unfunded defined benefit plan. Subject to vesting, Mr. Deedy will be entitled to
an annual retirement benefit upon reaching age 65 equal to 2.5% times his years
of credited service (up to a maximum of 20 years), multiplied by his highest
average cash compensation during any three consecutive years during the final
five years of his employment, less primary social security benefits and certain
other retirement benefits paid by Alpine, the Company and certain other
employers.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Connell, Elbaum and Levenson served on the Compensation Committee
from October 17, 1996 to the end of fiscal 1997. Prior to October 17, 1996,
Alpine and the Company's senior management were directly involved in setting
compensation for the executives of the Company and its subsidiaries. Following
the consummation of the Offering, all decisions regarding compensation of
executive officers were made by the Compensation Committee. The Board of
Directors also formed an Incentive Compensation Subcommittee, currently
comprised of Messrs. Connell and Levenson, following the consummation of the
Offering. Also see "Certain Transactions" below for certain additional
information with respect to certain members of the Board of Directors. There
were no Compensation Committee interlocks during fiscal 1997.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
The Compensation Committee is made up of Mr. Elbaum and two independent
outside directors who are neither officers nor employees of the Company, its
subsidiaries or Alpine. The principal functions of the Compensation Committee
are to administer the Company's 1996 Employee Stock Option Plan and Employee
Stock Purchase Plan and, on behalf of the Board of Directors, to review current
and proposed employment arrangements with existing and prospective senior
management employees and to review and determine matters pertaining to base and
incentive compensation for the Chief Executive Officer and other senior
management employees.
EXECUTIVE COMPENSATION POLICY
Because the Company only recently became a public company, the Compensation
Committee recognizes that a transition period is necessary to establish fully
its long-range compensation objectives. Moreover, because the Company is a
holding company the operating subsidiaries of which are largely responsible for
compensation decisions for such entities and because Alpine, through the
services agreement described under the caption "Certain Transactions" below,
provides executive services to the Company through that arrangement, the
Compensation Committee's responsibilities principally include the compensation
paid to the Chairman, President and Chief Executive Officer of the Company and
the President of Superior under their respective employment agreements and
general oversight of the Company's executive compensation philosophy.
Nevertheless, the following is a general framework within which the Compensation
Committee expects to operate.
8
<PAGE>
COMPENSATION COMMITTEE PHILOSOPHY
The general philosophy of the Compensation Committee is to link overall
executive compensation with the performance of the Company and the individual
executive. The focus is on both annual and long-term incentives. By providing a
combination of incentives to the key employees of the Company, upon whose
efforts and commitment depend the continued success and growth of the Company,
the Committee intends not only to reward those efforts, but provide a means by
which those employees can share in the growth of the Company.
The executive compensation policy is designed to attract and retain highly
qualified executive officers, to reinforce strategic performance objectives
through the use of incentive compensation programs, and to create a mutuality of
interest between executive officers and stockholders through compensation
structures that share the rewards and risks of strategic business planning and
implementation. Total compensation is intended to be competitive with that paid
to qualified executives of companies with a strong entrepreneurial and
growth-oriented business approach.
COMPENSATION OF THE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
During fiscal 1997, the Chairman, President and Chief Executive Officer of
the Company received a base salary in accordance with his employment agreement,
which agreement was approved by the Board of Directors of the Company prior to
the consummation of the Offering. The terms of this agreement are discussed in
detail above under the caption "Employment Agreements."
In reviewing the compensation paid to Mr. Elbaum for fiscal 1997, the
Compensation Committee (other than Mr. Elbaum) considered the fact that Mr.
Elbaum had significant responsibilities as an executive officer of Alpine, the
owner of 50.1% of the Company's Common Stock, and Alpine's other subsidiaries.
Although Mr. Elbaum devoted a certain amount of time to matters related to these
other enterprises, the Committee believes his total compensation from the
Company for fiscal 1997 was appropriate and reasonable. This judgment is based
on the Committee's conclusion that Mr. Elbaum has fully and effectively
discharged the responsibilities of his position with the Company to the
Company's substantial benefit, particularly with respect to the Reorganization
and the Offering. Moreover, the Committee believes that Mr. Elbaum's strong
leadership, guidance and direction to the Company as Chairman, President and
Chief Executive Officer during fiscal 1997 and through its initial public
offering have contributed to the Company's success during such period. In
reviewing the appropriateness of the compensation of the Chairman, President and
Chief Executive Officer the Compensation Committee considered (i) data regarding
compensation of chief executive officers at companies with comparable
organization structures, and (ii) the input of other directors regarding the
performance of the Chairman, President and Chief Executive Officer.
Overall, the Compensation Committee believes that the Chairman, President
and Chief Executive Officer is being appropriately compensated in a manner that
is consistent with the long-term interests of stockholders.
POLICY WITH RESPECT TO QUALIFYING COMPENSATION DEDUCTIBILITY
The Company's policy with respect to the deductibility limit of Section
162(m) of the Internal Revenue Code of 1986, as amended, generally is to
preserve the federal income tax deductibility of compensation paid when it is
appropriate and is in the best interests of the Company and its stockholders.
However, the Company reserves the right to authorize the payment of
non-deductible compensation if it deems that it is appropriate.
The foregoing report is submitted by members of the Compensation Committee.
Robert J. Levenson, CHAIRMAN
Eugene P. Connell
Steven S. Elbaum
9
<PAGE>
PERFORMANCE GRAPH
The following graph compares the monthly percentage change in the cumulative
total stockholder return on the Common Stock for the period since the date
(October 11, 1996) of the registration of the Common Stock under Section 12 of
the Securities Exchange Act of 1934, as amended, with the cumulative total
return (assuming reinvestment of dividends) of (i) the Standard & Poor's 500
stock index and (ii) the Company's selected peer group index (Russell 2000
Index). The Company believes there does not exist a representative industry peer
group of companies with a similar business segment profile and sufficient
reportable history. The Securities and Exchange Commission has indicated that
companies may use a base other than industry or line of business for determining
its peer group index, such as an index of companies with similar market
capitalization. Accordingly, the Company has selected the Russell 2000 Index, a
widely regarded small to mid-market capitalization index, to use as a
representative peer group.
COMPARISON OF MONTHLY CUMULATIVE TOTAL
RETURN OF SUPERIOR TELECOM INC.,
STANDARD & POOR'S 500 STOCK INDEX AND RUSSELL 2000 INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS SUPERIOR TELECOM INC. S & P 500 RUSSELL 2000
<S> <C> <C> <C>
10/11/1996 100 100 100
Oct-96 111 103 99
Nov-96 117 111 103
Dec-96 127 108 105
Jan-97 150 115 107
Feb-97 157 116 105
Mar-97 125 111 100
Apr-97 134 118 100
</TABLE>
CERTAIN TRANSACTIONS
The Company was formed in July 1996 in contemplation of the Reorganization
and the Offering. Prior to the Reorganization, the Company conducted no business
(other than in connection with and in contemplation of the Reorganization and
the Offering) and held substantially no assets or liabilities. As part of the
Reorganization, on October 2, 1996, Alpine caused Superior and DNE to declare
certain dividends on their common stock, Superior issued to Alpine certain
shares of its 6% Cumulative Preferred
10
<PAGE>
Stock ("Superior Preferred Stock") and Alpine contributed to the Company all of
the issued and outstanding common stock of Superior and DNE.
On October 2, 1996 and in connection with the Reorganization, the Company
entered into an agreement (the "Services Agreement") with Alpine. Pursuant to
the Services Agreement, Alpine agreed to provide certain financial, audit and
accounting, corporate finance and strategic planning, legal, treasury, insurance
and administrative services to the Company in return for an annual fee in
addition to reimbursement of incidental costs and expenses incurred in
connection with Alpine's provision of such services. Such annual fee initially
was set at the rate of $925,000 per year. As of May 1, 1997, the Services
Agreement was amended to increase such annual fee to $2.7 million per year,
which is estimated to reflect commercially reasonable costs for the services
provided.
In November 1996, the underwriters of the Offering exercised their
overallotment option to purchase an additional 900,000 shares of the Common
Stock. The Company used the net proceeds of such option exercise to, among other
things, repurchase 450,000 shares of the Common Stock for approximately $8.1
million. The 450,000 shares were then transferred to Alpine in exchange for $8.1
million in liquidation value of Superior Preferred Stock. After giving effect to
the exercise of the overallotment option and the subsequent repurchase and
exchange of the Common Stock, Alpine's ownership interest in the Company
remained at 50.1%. On February 12, 1997, Superior redeemed at liquidation value
an additional $11.3 million in liquidation value of Superior Preferred Stock.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely on a review of the reports and representations furnished to the
Company during the last fiscal year, the Company believes that each of the
persons required to file reports under Section 16(a) of the Securities Exchange
Act of 1934 (the "Exchange Act") is in compliance with all applicable filing
requirements, except that a Form 3 for Mr. Levenson was filed on time but was
later amended to include information regarding transactions involving 1,000
shares held jointly with Mr. Levenson's daughter and 100 shares held by Mr.
Levenson's wife as custodian for her minor son.
PROPOSAL II: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent public
accountants, to audit the books and records of the Company for the current
fiscal year. The affirmative vote of the holders of a majority in voting power
of the shares of the Common Stock present, or represented, and entitled to vote
at the meeting, will be required to ratify the appointment of Arthur Andersen
LLP as independent public accountants of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS OF THE COMPANY VOTE
FOR THE PROPOSAL TO RATIFY SUCH APPOINTMENT.
Representatives of Arthur Andersen LLP are expected to be available at the
meeting of stockholders to respond to appropriate questions and will be given
the opportunity to make a statement if they desire to do so.
OTHER MATTERS
The Company's Board of Directors does not know of any other matters which
may be brought before the meeting. However, if any such other matters are
properly presented for action, it is the intention of the persons named in the
accompanying form of proxy to vote the shares represented thereby in accordance
with their judgment on such matters.
11
<PAGE>
MISCELLANEOUS
It is important that proxies be returned promptly. Stockholders who do not
expect to attend the meeting in person are urged to mark, sign and date the
accompanying proxy and mail it in the enclosed return envelope, which requires
no postage if mailed in the United States, so that their votes can be recorded.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the next Annual Meeting of
Stockholders of the Company must be received by the Company by April 30, 1998 in
order to be considered for inclusion in the Company's proxy statement relating
to such meeting.
By Order of the Board of Directors,
Stewart H. Wahrsager
SECRETARY
NEW YORK, NEW YORK
AUGUST 28, 1997
12
<PAGE>
SUPERIOR TELECOM INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Steven S. Elbaum, Bragi F. Schut and Stewart
H. Wahrsager and each of them, as Proxies each with the power to appoint his
substitute and hereby authorizes them to represent, and to vote, as designated
below, all of the shares of Capital Stock of Superior TeleCom Inc. held of
record by the undersigned on July 28, 1997 at the Annual Meeting of Stockholders
to be held on September 24, 1997 or any adjournments or postponements thereof.
1. ELECTION OF FIVE DIRECTORS
Nominees: Steven S. Elbaum, Eugene P. Connell, Robert J. Levenson, Bragi F.
Schut and Charles Y.C. Tse
STOCKHOLDERS MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE BY DRAWING A LINE
THROUGH OR OTHERWISE STRIKING OUT THE NAME OF SUCH NOMINEE. ANY PROXY
EXECUTED IN SUCH MANNER AS NOT TO WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION
OF ANY NOMINEE SHALL BE DEEMED TO GRANT SUCH AUTHORITY.
/ / GRANT authority to vote for the five nominees / / WITHHOLD authority to
vote for the five nominees
2. Ratification of the appointment of Arthur Andersen LLP as the independent
certified public accountants of Superior Telecom Inc.
/ / FOR / / AGAINST / / ABSTAIN
3. Authority to vote in their discretion on such other business as may properly
come before the meeting
/ / FOR / / AGAINST / / ABSTAIN
<PAGE>
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted for each of the proposals named above.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE
<TABLE>
<S> <C>
Dated ------------------------------------------ ,
1997
------------------------------------------------------
(Signature)
------------------------------------------------------
(Signature if held jointly)
------------------------------------------------------
(Title if applicable)
Please sign exactly as name appears hereon. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
If a corporation, please sign in full corporate name
by president or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
</TABLE>
