<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 securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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:
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(4) Date Filed:
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<PAGE>
SUPERIOR TELECOM INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019-1412
April 20, 1999
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, May 26, 1999 at 10:00 a.m., local time, at The Essex House, 2(nd)
Floor, 160 Central Park South, 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 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 MAY 26, 1999
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 May 26,
1999 at 10:00 a.m., local time, at The Essex House, 2(nd) Floor, 160 Central
Park South, 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 April 5, 1999 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
April 20, 1999
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 MAY 26, 1999
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 May 26, 1999 at The Essex
House, 2(nd) Floor, 160 Central Park South, New York, New York and at any and
all adjournments or postponements thereof.
The stockholders of record at the close of business on April 5, 1999 will be
entitled to receive notice of and to vote at the meeting and any adjournments or
postponements thereof. As of April 5, 1999, there were issued and outstanding
20,061,747 shares of the Company's common stock, par value $.01 per share
("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 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 April 20, 1999.
Shares of 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 of the outstanding 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 April 5, 1999 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 of the Company 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.
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
<TABLE>
<CAPTION>
COMMON STOCK
------------------------------------
<S> <C> <C>
NAME AND ADDRESS OF BENEFICIAL OWNER (1) NUMBER OF SHARES PERCENT OF CLASS
- ------------------------------------------------------------------------------ ----------------- -----------------
The Alpine Group, Inc......................................................... 10,155,700 50.6%
Steven S. Elbaum.............................................................. 10,416,116(2) 51.3
Justin F. Deedy, Jr........................................................... 120,171(3) *
David S. Aldridge............................................................. 52,083(4) *
Robert J. Levenson............................................................ 35,500(5) *
Charles Y.C. Tse.............................................................. 22,656(6) *
Eugene P. Connell............................................................. 21,093(6) *
Bragi F. Schut................................................................ 19,531(6) *
Debra F. Minott............................................................... 0 *
All directors and executive officers as a group............................... 10,687,150(7) 52.0
</TABLE>
- ------------------------
* Less than one percent
(1) Unless otherwise indicated, the address of each beneficial owner is c/o
Superior TeleCom Inc., 1790 Broadway, New York, New York 10019-1412.
(2) Includes 10,155,700 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 13.2% of the
issued and outstanding common stock of Alpine. Also includes 260,416 shares
of Common Stock issuable upon exercise of certain stock options.
(3) Includes 119,166 shares issuable upon exercise of certain stock options.
(4) Includes 52,083 shares issuable upon exercise of certain stock options.
(5) Includes (i) 156 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) 1,563 shares held in joint name with Mr. Levenson's
daughter, Sarah Levenson, as to which shares Mr. Levenson disclaims
beneficial ownership, and (iii) 19,531 shares issuable upon exercise of
certain stock options.
(6) Includes 19,531 shares issuable upon exercise of certain stock options.
(7) Includes (i) 10,155,700 shares of Common Stock owned by Alpine, (ii) 509,789
shares issuable upon exercise of certain stock options and (iii) 1,719
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.................... 50 1996 Chairman of the Board of Directors and Chief Executive
Officer of the Company since 1996; President of the Company
from 1996 to 1998; Chairman of the Board of Directors and
Chief Executive Officer of Alpine since 1984; Chairman of
the Board of Directors of Cables of Zion United Works,
Ltd., an Israeli-based, publicly traded wire and cable
manufacturer and the Company's 51%-owned subsidiary, and
PolyVision Corporation, an information display company that
is 48%-owned by Alpine; a director of Interim Services,
Inc., a provider of value added staffing and health care
services, and Vestaur Securities, Inc., an investment
company.
Eugene P. Connell................... 60 1996 Chief Executive Officer of Golden Triangle On-Line, Inc.,
an internet provider, since November 1998. Former 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. Director of Vestcom International
Inc., a consolidator and operator of companies that create,
manage and distribute business critical documents, and
Emisphere Technologies, Inc., a drug delivery company.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
YEAR
FIRST
ELECTED
NAME AGE DIRECTOR POSITION WITH THE COMPANY AND OTHER BUSINESS EXPERIENCE
- ------------------------------------ --- ----------- -----------------------------------------------------------
<S> <C> <C> <C>
Bragi F. Schut...................... 58 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.................... 73 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 eight months ended December 31, 1998, the Board of Directors held
three 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.
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 and Chief Executive Officer and other senior
management employees. During the eight months ended December 31, 1998, the
Compensation Committee did not hold any meetings.
The present members of the Stock Option Committee are Messrs. Connell and
Levenson. The principal functions of the Stock Option Committee are to review
and approve grants of stock options and stock awards under, and generally to
administer, the Company's 1996 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"). During the eight months ended December
31, 1998, the Stock Option Committee did not hold any meetings.
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, the Company's
majority 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
eight months ended December 31, 1998.
VOTE REQUIRED
THE BOARD OF DIRECTORS RECOMMENDS THAT HOLDERS OF COMMON STOCK VOTE FOR THE
FIVE NOMINEES LISTED ABOVE. Their election will require a plurality of the votes
cast by the holders of Common Stock present in person or represented by proxy
and entitled to vote.
4
<PAGE>
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................... 50 Chairman of the Board of Directors and Chief Executive Officer since
1996; President from 1996 to 1998; Chairman of the Board of Directors
and Chief Executive Officer of Alpine since 1984.
Justin F. Deedy, Jr. .............. 43 Senior Vice President of the Company since July 1996 and President of
the Company's wholly-owned subsidiary, Superior Telecommunications
Inc. ("STI"), since July 1993. A director of Cables of Zion United
Works, Ltd.
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 STI (or
its predecessor). A director of Cables of Zion United Works, Ltd.
Debra F. Minott.................... 43 Senior Vice President and General Counsel since December 1998.
Appointed Senior Vice President of Essex International Inc. ("Essex"),
the Company's recently acquired wholly-owned subsidiary, in March 1997
and Vice President, General Counsel and Secretary of Essex in April
1995. Appointed Senior Vice President and General Counsel of Essex
Group, Inc., Essex's wholly-owned subsidiary, in October 1994 and
Secretary of Essex Group, Inc. in April 1995. From September 1983 to
October 1994, she held various legal positions at Eli Lilly & Company,
a major pharmaceutical company.
</TABLE>
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
eight months ended December 31, 1998, the 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 STI 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").
5
<PAGE>
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........................ 1998t $121,154
Chairman of the Board and 1998 175,000(2)
Chief Executive Officer 1997 102,000 390,625
Justin F. Deedy, Jr. ................... 1998t $157,034 $31,200(4) 45,001 $ 4,632(6)
Senior Vice President of the 1998 235,000 $ 187,000(3) 74,723(4) 33,742(6)
Company and President of 1997 104,000(2) 234,000(3) 33,250(4) 156,250 2,520
Superior Telecommunications Inc.
David S. Aldridge (7)................... 1998t
Chief Financial Officer 1998
1997 78,125
Debra F. Minott (8)..................... 1998t
Senior Vice President and 1998
General Counsel 1997
</TABLE>
- ------------------------
t Denotes the eight-month period ended December 31, 1998.
(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 $42,000 in salary paid to
Mr. Deedy by STI for the period from July 17, 1996 (the date of the
Company's organization) through October 2, 1996.
(3) Annual cash incentive bonus payment awarded to Mr. Deedy in respect of each
of fiscal 1998 and 1997, including a discretionary cash bonus awarded in
respect of each of such years.
(4) Payments pursuant to Mr. Deedy's employment agreement for federal tax
consequences upon vesting of certain restricted stock grants.
(5) Options granted under the 1996 Stock Option Plan. Gives effect to a 25%
stock dividend on the Common Stock which was paid on February 2, 1998 and a
25% stock dividend on the Common Stock which was paid on February 3, 1999.
(6) Includes matching contribution under STI's defined contribution plan.
(7) Mr. Aldridge acts as Chief Financial Officer of the Company. However, he is
employed by the Company's majority stockholder, Alpine. Alpine is reimbursed
by the Company for his services through a services agreement as described
under "Certain Transactions."
(8) Ms. Minott, employed by the Company in December 1998, did not receive any
compensation from the Company during the above periods.
6
<PAGE>
STOCK OPTION GRANTS IN TRANSITIONAL PERIOD
ENDED DECEMBER 31, 1998
The following table presents information with respect to executive officers
who were granted stock options during the eight months ended December 31, 1998.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE (AT ASSUMED ANNUAL
NUMBER OF PERCENT OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS GRANTED TO APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES IN EXERCISE TERM)
OPTIONS TRANSITIONAL PRICE EXPIRATION ------------------------
NAME GRANTED PERIOD ($/SH) DATE 5% 10%
- --------------------------------------- ----------- ----------------------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Justin F. Deedy, Jr.................... 45,001 7.2% $ 30.40 6/1/08 $ 860,347 $ 2,180,288
</TABLE>
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 eight months ended December 31, 1998
and the number of shares underlying, and the value of, unexercised options
outstanding at December 31, 1998:
<TABLE>
<CAPTION>
EXERCISES DURING
THE TRANSITIONAL PERIOD 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...................... -- -- 260,416 130,209 $ 7,177,065 $ 3,588,560
Justin F. Deedy, Jr................... -- -- 119,166 82,085 2,981,815 1,657,442
David S. Aldridge..................... -- -- 52,083 26,042 1,435,407 717,718
</TABLE>
- ------------------------
(1) Based on the closing price of $37.80 of the Common Stock on December 31,
1998, as adjusted to reflect the 25% stock dividend on the Common Stock
which was paid on February 3, 1999.
COMPENSATION OF DIRECTORS
Effective January 1, 1999, the Company increased the annual retainer to
$20,000 from $15,000 for directors who are not employees of the Company or
otherwise compensated by the Company, together with expenses of attendance. The
Company also increased to $1,500 from $1,000 the amount a non-employee director
will receive for each meeting of the Board or of a committee of the Board
attended.
In addition to increasing the annual retainer and per committee meeting
fees, effective January 1, 1999, the Board adopted the Superior TeleCom Inc.
Stock Compensation Plan for Non-Employee Directors (the "Stock Compensation
Plan"). Under the Stock Compensation Plan, non-employee directors of the Company
will automatically receive 50% of the annual retainer in either restricted stock
or stock options, as elected by the non-employee director. Each non-employee
director may also elect to receive all or a portion of the remaining amount of
the annual retainer, in excess of 50% of the annual retainer, and meeting fees
in the form of restricted stock or stock options instead of in cash.
Restricted stock and stock options that are attributable to the annual
retainer will be granted as of the first business day of each quarter of the
Company's fiscal year. Restricted stock and stock options that are attributable
to meeting fees will be granted as of the date of the meeting of the Board
and/or the committee of the Board with respect to which such grants relate.
Shares to be issued under the Stock Compensation Plan will be made available
only from issued shares of Common Stock reacquired by the Company and held in
treasury until such time as the Stock Compensation Plan may be approved by the
stockholders of the Company.
7
<PAGE>
The number of shares of restricted stock to be granted will be determined by
dividing
(1) the amount of the annual retainer or meeting fees that a non-employee
director elected to receive in restricted stock, by
(2) the lesser of
(a) 100% of the fair market value of the Common Stock on the first
business day of the Company's fiscal year and
(b) 100% of the fair market value of the Common Stock at the time of
grant.
The number of stock options will be determined by dividing
(1) the amount of the annual retainer or meeting fees that a non-employee
director elected to receive in stock options, by
(2) the value of a stock option on the date of grant as determined by the
Board, based on the purchase price per share of the Common Stock, a
Black-Scholes option pricing model and such other factors as the Board
deems appropriate.
Stock options granted under the Stock Compensation Plan will have a purchase
price equal to the lesser of:
(1) 100% of the fair market value of the Common Stock on the first business
day of the Company's fiscal year; and
(2) 100% of the fair market value of the Common Stock on the date of grant.
Each stock option granted under the Stock Compensation Plan will expire on the
tenth anniversary of the date of grant.
Awards of restricted stock and stock options under the Stock Compensation
Plan will vest upon the earliest of the following to occur:
(1) the third anniversary of the date of grant;
(2) a non-employee director's death; and
(3) upon a change in control, as defined in the Stock Compensation Plan.
The Stock Compensation Plan is administered and interpreted by the Board.
On October 10, 1998, each non-employee director received an option to
purchase 11,719 split-adjusted shares of Common Stock under the Company's 1996
Stock Option Plan as compensation for his services as a director. The exercise
price of such option is 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 on the tenth anniversary of the date of grant. Non-employee
directors of the Company will continue to receive annual nondiscretionary grants
of nonqualified stock options under the Company's 1996 Stock Option Plan.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement pursuant to which Mr. Elbaum serves
as Chairman of the Board 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.
8
<PAGE>
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";
or (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.
The Company has assumed the obligations of its wholly-owned subsidiary, STI,
under an employment agreement with Mr. Deedy providing for his employment as
President of STI 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 STI or
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 the eight months ended December 31, 1998, Mr. Deedy participated in
Alpine's Senior Executive Retirement Plan ("SERP"). The SERP is an unfunded
defined benefit plan. Under the SERP, 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 the eight months ended December 31, 1998. There were no Compensation
Committee interlocks during such transitional period.
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 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 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
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stock awards under, and generally to administer, the Company's 1996 Stock Option
Plan (functions that 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 during the
eight-month period ended December 31, 1998 principally included the compensation
paid to the Chairman and Chief Executive Officer of the Company and the
President of STI 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 whose
efforts and commitment depend the continued success and growth of the Company,
the Committee intends not only to reward those efforts, but to 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 AND CHIEF EXECUTIVE OFFICER
During the eight months ended December 31, 1998, the Chairman 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 the eight months
ended December 31, 1998, the Compensation Committee (other than Mr. Elbaum)
considered the fact that Mr. Elbaum had significant responsibilities as an
executive officer of Alpine, the majority stockholder of the Company, 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 the eight months ended December 31, 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 and Chief Executive Officer during the eight
months ended December 31, 1998 have contributed to the Company's success during
such period. In reviewing the appropriateness of the compensation of the
Chairman 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 and Chief Executive Officer.
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Overall, the Compensation Committee believes that the Chairman 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
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. 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.; General Cable Corporation; and Essex
International Inc.
COMPARISON OF 26 MONTH CUMULATIVE TOTAL
RETURN OF SUPERIOR TELECOM INC.,
RUSSELL 2000 INDEX AND PEER GROUP*
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DOLLARS SUPERIOR TELECOM INC. PEER GROUP RUSSELL 2000
<S> <C> <C> <C>
10/11/96 100 100 100
10/96 89 88 100
1/97 120 112 109
4/97 108 87 102
7/97 151 136 124
10/97 171 133 130
1/98 198 144 129
4/98 265 163 145
6/98 261 134 140
9/98 304 84 112
12/98 297 122 130
</TABLE>
* $100 INVESTED ON 10/11/96 IN STOCK OR INDEX--INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
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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.
In connection with the Company's acquisition of Essex and the related
financing, Alpine provided extensive consulting, financial advisory and other
services to the Company. These services included active assistance in
originating, structuring and negotiating these transactions. In addition, Alpine
agreed to support these transactions, including the issuance of 8 1/2% trust
convertible preferred securities of Superior Trust I, a Delaware statutory
business trust in which the Company owns all the common equity interests, which
are convertible into Common Stock. In consideration of such services and
support, the Company paid Alpine a fee of $10 million following completion of
the Company's tender offer for approximately 81% of Essex's common stock. The
amount of the fee and the terms of its payment were reviewed and approved by
each of the Company's Board of Directors and the Company's Audit Committee.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of the reports and representations furnished to the
Company during the eight months ended December 31, 1998, 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.
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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 of the
outstanding shares of 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 that 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 December 31, 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
April 20, 1999
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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 Common Stock of Superior TeleCom Inc. held of record
by the undersigned on April 5, 1999 at the Annual Meeting of Stockholders to be
held on May 26, 1999 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
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<S> <C>
Dated ------------------------------------------ ,
1999
------------------------------------------------------
(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>
