<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 [ ]
<TABLE>
<S> <C>
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
[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 12, 1998
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 16, 1998 at 9:30 a.m., local time, at The Lotos Club, 5
East 66th 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 16, 1998
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
16, 1998 at 9:30 a.m., local time, at The Lotos Club, 5 East 66th 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 20, 1998 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 12, 1998
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 16, 1998
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 9:30 a.m., local time, on September 16, 1998 at The
Lotos Club, 5 East 66th 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 20, 1998 will be
entitled to receive notice of and to vote at the meeting and any adjournments or
postponements thereof. As of August 4, 1998, there were issued and outstanding
16,153,078 shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), the only class of voting securities outstanding. Each
stockholder 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 12, 1998.
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.
<PAGE>
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table contains information as of August 4, 1998 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.
<TABLE>
<CAPTION>
COMMON STOCK
------------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER OF SHARES PERCENT OF CLASS
- ---------------------------------------------------------- ----------------- -----------------
<S> <C> <C>
The Alpine Group, Inc. ................................... 8,092,560 50.1%
1790 Broadway
New York, NY 10019-1412
Steven S. Elbaum.......................................... 8,300,893(1) 50.7
1790 Broadway
New York, NY 10019-1412
FMR Corp. ................................................ 938,400(2) 5.8
82 Devonshire Street
Boston, MA 02109
Justin F. Deedy, Jr. ..................................... 83,965(3) *
David S. Aldridge......................................... 41,666(4) *
Robert J. Levenson........................................ 29,500(5) *
Charles Y.C. Tse.......................................... 18,125(6) *
Eugene P. Connell......................................... 16,625(6) *
Bragi F. Schut............................................ 15,625(6) *
All directors and executive officers as a group........... 8,506,399(7) 51.4
</TABLE>
- ------------------------
* Less than one percent
(1) Includes 8,092,560 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 11.1% of the
issued and outstanding common stock of Alpine. Also includes 208,333 shares
of Common Stock issuable upon exercise of certain stock options.
(2) Based upon a Schedule 13-G, Amendment No. 1, filed with the Securities and
Exchange Commission on or about February 11, 1998.
(3) Includes 83,333 shares issuable upon exercise of certain stock options.
(4) Includes 41,666 shares issuable upon exercise of certain stock options.
(5) Includes (i) 125 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) 1,250 shares held in joint name with Mr. Levenson's
daughter, Sarah Levenson Stern, as to which shares Mr. Levenson disclaims
beneficial ownership and (iii) 15,625 shares issuable upon exercise of
certain stock options.
(6) Includes 15,625 shares issuable upon exercise of certain stock options.
(7) Includes (i) 8,092,560 shares of Common Stock owned by Alpine, (ii) 395,832
shares issuable upon exercise of certain stock options and (iii) 1,375
shares as to which the officers and directors disclaim beneficial ownership.
2
<PAGE>
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, has 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 is unable or declines 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................ 49 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 Company's Common Stock, since 1984;
Chairman of the Board of Directors of Cables of Zion United
Works, Ltd., an Israel-based, publicly traded wire and cable
manufacturer and the Company's 51% owned subsidiary, and
PolyVision Corporation, an information display company; a
director of Interim Services, Inc., a provider of value added
staffing and health care services.
Eugene P. Connell............... 60 1996 Retired 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.
Robert J. Levenson.............. 57 1996 Executive Vice President and a director of First Data Corp., a
provider of transaction processing and information services,
since May 1993.
Bragi F. Schut.................. 57 1996 Executive Vice President of Alpine since 1986; a director of
Alpine since 1983; and a director of Cables of Zion United
Works, Ltd. and PolyVision Corporation.
Charles Y.C. Tse................ 72 1996 Former Vice-Chairman and President of international operations
of Warner Lambert Company, a major pharmaceutical and consumer
products company.
</TABLE>
BOARD AND COMMITTEE MEETINGS
During the fiscal year ended April 30, 1998, the Board of Directors held
four meetings. 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.
3
<PAGE>
The Board of Directors has a Compensation Committee, a Stock Option
Committee and an Audit Committee.
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 Employee Stock Purchase Plan and other benefit plans
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 fiscal year ended April 30, 1998, the
Compensation Committee held one meeting. The Compensation Committee also created
an Incentive Compensation Subcommittee consisting of Mr. Connell and Mr.
Levenson to administer the Company's 1996 Employee Stock Option Plan and to
address all issues that require decisions by directors who qualify as outside
directors under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), and as non-employee directors under Section 16(b) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The principal
functions of the Incentive Compensation Subcommittee are to review and approve
grants of stock options and stock awards under the Company's 1996 Employee Stock
Option Plan. During the fiscal year ended April 30, 1998, the Incentive
Compensation Subcommittee held one meeting. As of June 1, 1998, the Board of
Directors created a Stock Option Committee consisting of Mr. Connell and Mr.
Levenson to take over the functions previously performed by the Incentive
Compensation Subcommittee.
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 Alpine, its 50.1%
stockholder, 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, 1998.
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, each of whom serves at the discretion of the Board of Directors.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY AND OTHER BUSINESS EXPERIENCE
- ----------------------------------- --- ----------------------------------------------------------------------
<S> <C> <C>
Steven S. Elbaum................... 49 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................ 42 Senior Vice President of the Company since July 1996 and President of
the Company's wholly-owned subsidiary, Superior Telecommunications
Inc. ("Superior"), since July 1993.
David S. Aldridge.................. 44 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 (or its predecessor).
</TABLE>
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
compensation earned by or paid to the Company's executive officers during the
Company's fiscal year ended April 30, 1998 and for the period commencing on
October 2, 1996, the date on which Alpine contributed the capital stock of
Superior and DNE Systems Inc. to the Company (the "Reorganization"), to April
30, 1997. Prior to October 2, 1996, the Company had no material business
activities other than those in connection with and in contemplation of the
Reorganization and the initial public offering of the Common Stock on October
17, 1996 (the "Offering").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1)
-------------------------------------
FISCAL OTHER ANNUAL OPTION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION SHARES(5) OTHER
- ------------------------------------- ----------- ---------- ---------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum..................... 1998 $ 175,000
Chairman, President 1997 102,000(2) 312,500
and Chief Executive Officer
Justin F. Deedy, Jr. ................ 1998 $ 235,000 $ 187,000(3) $ 74,723(4) $ 33,742(6)
Senior Vice President of the 1997 104,000(2) 234,000(3) 33,250(4) 125,000 2,520
Company and President of
Superior Telecommunications
Inc.
David S. Aldridge(7)................. 1998
Chief Financial Officer 1997 62,500
</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
from October 2, 1996 (i.e., the date of the Reorganization and the
commencement of the Company's business activities) 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 from July 17, 1996 (the date of the
Company's organization) through October 2, 1996.
(3) Annual cash incentive bonus payment awarded to Mr. Deedy in respect of each
of fiscal 1998 and 1997, including a discretionary cash bonus awarded in
respect of each of such years.
(4) Payments pursuant to Mr. Deedy's employment agreement for federal tax
consequences upon vesting of certain restricted stock grants.
(5) Options granted under the 1996 Employee Stock Option Plan in conjunction
with the Offering and effective October 17, 1996. Gives effect to a 25%
stock dividend on the Common Stock which was paid on February 2, 1998.
(6) Includes matching contribution under Superior's defined contribution plan.
(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 by
the Company for his services through a services agreement as described under
"Certain Transactions."
5
<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, 1998 and
the number of shares underlying, and the value of, unexercised options
outstanding at April 30, 1998:
<TABLE>
<CAPTION>
EXERCISES DURING
THE FISCAL YEAR NUMBER OF SHARES
------------------------------ UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS(1)
SHARES VALUE -------------------------- ---------------------------
NAME ACQUIRED REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------- --------------- ------------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Steven S. Elbaum........................... -- -- 104,166 208,334 $ 3,061,178 $ 6,122,415
Justin F. Deedy, Jr........................ -- -- 41,666 83,334 1,224,460 2,448,978
David S. Aldridge.......................... -- -- 20,833 41,667 612,230 1,224,489
</TABLE>
- ------------------------
(1) Based on the closing price of $42.19 of the Common Stock on April 30, 1998.
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 9,375 shares of the 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.
6
<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 $235,000, 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 1998, Mr. Deedy participated in Alpine's Senior Executive
Retirement Plan ("SERP"). 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
during fiscal 1998. There were no Compensation Committee interlocks during
fiscal 1998.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
INTRODUCTION
The Compensation Committee is made up of Mr. Elbaum and two independent
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 Employee Stock Purchase Plan and other benefit
plans 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. As of June 1, 1998, the Board of Directors created
a Stock Option Committee consisting of two independent directors to administer
the Company's 1996 Employee Stock Option Plan and to address all issues that
require decisions by directors who qualify as outside directors under Section
162(m) of the Code and as non-employee directors under Section 16(b) of the
Exchange Act. The principal functions of the Stock Option Committee are to
review and approve grants of stock options and stock awards under the Company's
1996 Employee Stock Option Plan (functions which had been previously performed
by an Incentive Compensation Subcommittee).
EXECUTIVE COMPENSATION POLICY
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. The following is a general framework within which the Compensation
Committee operates.
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
7
<PAGE>
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 which, like the Company, have a strong
entrepreneurial business approach.
COMPENSATION OF THE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
During fiscal 1998, 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 total compensation paid to Mr. Elbaum for fiscal 1998, 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 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 1998 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. Moreover, the Committee believes that Mr. Elbaum's strong leadership,
guidance and direction as Chairman, President and Chief Executive Officer during
fiscal 1998 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 from
outside studies and proxy materials regarding compensation of chief executive
officers at certain comparable companies 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 Code 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
8
<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 Exchange Act with the cumulative total return (assuming reinvestment of
dividends) of (i) the Russell 2000 Index and (ii) a peer group of companies
engaged in the same line of business as the Company. In the immediately
preceding fiscal year, the Company compared the total return on the Common Stock
with (i) the Standard & Poor's 500 Stock Index as its broad equity market index
and (ii) the Russell 2000 Index as its peer group index. The Company is changing
its broad equity market index from the Standard & Poor's 500 Stock Index to the
Russell 2000 Index because the latter index includes companies with market
capitalizations more similar to that of the Company and thus provides the most
meaningful standard for comparison. In accordance with the rules and regulations
of the Securities and Exchange Commission, both of these broad equity market
indices are included in the performance graph for this fiscal year but, in
future years, the Standard & Poor's 500 Stock Index will no longer be included.
In addition, the Company has elected to switch its peer group index from the
Russell 2000 Index, an index of companies with similar market capitalizations,
to a peer group of companies engaged in the same line of business as the
Company, which change was made because certain of the companies presently
included in the peer group became reporting companies under the Exchange Act
either during or just prior to fiscal 1998. The returns of each of the peer
group of companies are weighted on a market capitalization basis at the time of
each registered data point. The peer group includes the following companies: AFC
Cable Systems, Inc.; Belden, Inc.; Cable Design Technologies Corp.; Commscope,
Inc.; Encore Wire Corp.; Essex International Inc.; and General Cable
Corporation.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RESEARCH DATA GROUP, INC. TOTAL RETURN - DATA SUMMARY
<S> <C> <C> <C> <C> <C> <C>
SUT Cumulative Total Return
10/11/96 10/96 1/97 4/97
SUPERIOR TELECOM INC. 100 111 150 134
PEER GROUP 100 88 112 87
S & P 500 100 103 115 118
RUSSELL 2000 100 99 107 100
<CAPTION>
RESEARCH DATA GROUP, INC.
<S> <C> <C> <C> <C>
SUT
7/97 10/97 1/98 4/98
SUPERIOR TELECOM INC. 188 214 247 331
PEER GROUP 136 133 144 163
S & P 500 141 136 146 166
RUSSELL 2000 121 127 127 143
</TABLE>
9
<PAGE>
CERTAIN TRANSACTIONS
On October 2, 1996 and in connection with the Reorganization, the Company
entered into an agreement (as amended and extended to date, the "Services
Agreement") with Alpine. Pursuant to the Services Agreement, Alpine provides
certain financial, audit and accounting, corporate finance and strategic
planning, legal, treasury, insurance and administrative services to the Company
for a per annum fee of $2.7 million, in addition to reimbursement of incidental
costs and expenses incurred in connection with Alpine's provision of such
services. Such annual fee has been approved by the Company's Audit Committee and
is estimated to reflect commercially reasonable costs for the services provided.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 Exchange Act is in
compliance with all applicable filing requirements.
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, voting as a single class, 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.
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, 1999 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 12, 1998
10
<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 20, 1998 at the Annual Meeting of Stockholders
to be held on September 16, 1998 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 ------------------------------------------ ,
1998
------------------------------------------------------
(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>
