<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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 Section 240.14a-11(c) or
Section 240.14a-12
INTERWAVE COMMUNICATIONS INTERNATIONAL, LTD.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (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.
Amount Previously Paid:
----------------------------------------------------------
Form, Schedule or Registration Statement No.:
----------------------------------------------------------
Filing Party:
----------------------------------------------------------
Date Filed:
----------------------------------------------------------
Notes:
</TABLE>
<PAGE>
INTERWAVE COMMUNICATIONS INTERNATIONAL, LTD.
CLARENDON HOUSE, 2 CHURCH STREET
HAMILTON, HM DX, BERMUDA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 8, 2000
To the Shareholders:
The Annual Meeting of Shareholders (the "Annual Meeting") of interWAVE
Communications International, Ltd. (the "Company") will be held at The Commons,
302 Constitution Drive, Menlo Park, California, on Friday, December 8, 2000, at
10:00 a.m. local time for the following purposes:
1. To elect three Class I directors of the Board of Directors to serve
until the 2003 Annual Meeting or until their successors have been duly
elected and qualified;
2. To ratify the appointment of KPMG LLP, Independent Accountants, as
the Company's independent public accountants for the fiscal year ending
June 30, 2001; and
3. To transact such other business as may properly come before the
meeting or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the attached
Proxy Statement.
Only shareholders of record at the close of business on October 11, 2000 are
entitled to notice of, and to vote at, the Annual Meeting and at any
adjournments or postponements thereof. A list of such shareholders will be
available for inspection at the office of the Company's subsidiary, interWAVE
Communications, Inc. at 312 Constitution Drive, Building I, Menlo Park,
California 94025, during ordinary business hours for the ten-day period prior to
the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Dr. Priscilla M. Lu, Ph.D.
Dr. Priscilla M. Lu, Ph.D.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
Menlo Park, California
October 16, 2000
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. SHAREHOLDERS MAY VOTE VIA WRITTEN PROXY OR IN PERSON AT THE ANNUAL
MEETING. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
<PAGE>
INTERWAVE COMMUNICATIONS INTERNATIONAL, LTD.
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
These proxy materials are furnished in connection with the solicitation of
proxies by the Board of Directors of interWAVE Communications
International, Ltd., a Bermuda corporation (the "Company"), for the Annual
Meeting of Shareholders (the "Annual Meeting") to be held at the Commons, 302
Constitution Drive, Menlo Park, California, on Friday, December 8, 2000, at
10:00 a.m., and at any adjournment or postponement of the Annual Meeting. These
proxy materials were first mailed to shareholders on or about October 23, 2000.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Shareholders.
Each proposal is described in more detail in this Proxy Statement.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The Company's Common Shares are the only type of security entitled to vote
at the Annual Meeting. On October 11, 2000, the record date for determination of
shareholders entitled to vote at the Annual Meeting, there were approximately
48,498,580 common shares outstanding. Each shareholder of record on October 11,
2000 is entitled to one vote for each common share held by such shareholder on
October 11, 2000. All votes will be tabulated by the inspector of election
appointed for the meeting, who will separately tabulate affirmative and negative
votes, abstentions and broker non-votes.
QUORUM REQUIRED
The Company's bylaws provide that the holders of a majority of the Company's
common shares issued and outstanding and entitled to vote at the Annual Meeting,
present in person or represented by proxy, shall constitute a quorum for the
transaction of business at the Annual Meeting. Abstentions and broker non-votes
will not be counted as present for the purpose of determining the presence of a
quorum.
VOTING
Shareholders may vote by written proxy or in person at the meeting. Specific
instructions to be followed by any shareholder interested in voting via mail are
set forth on the enclosed proxy card.
VOTES REQUIRED
PROPOSAL 1. Directors are elected by a plurality of the affirmative votes
cast by those shares present in person, or represented by proxy, and entitled to
vote at the Annual Meeting. The three (3) nominees for director receiving the
highest number of affirmative votes will be elected. Abstentions and broker
non-votes will not be counted toward a nominee's total.
PROPOSAL 2. Ratification of the appointment of KPMG LLP as the Company's
independent public accountants for the fiscal year ending June 30, 2001 requires
the affirmative vote of a majority of those shares present in person, or
represented by proxy, and cast either affirmatively or negatively at the Annual
Meeting. Abstentions and broker non-votes will not be counted as having been
voted on the proposal.
<PAGE>
PROXIES
Whether or not you are able to attend the Company's Annual Meeting, you are
urged to complete and return the enclosed proxy, which is solicited by the
Company's Board of Directors and which will be voted as you direct on your proxy
when properly completed. In the event no directions are specified, such proxies
will be voted FOR the Nominees of the Board of Directors (as set forth in
Proposal 1), FOR Proposal 2, and in the discretion of the proxy holders as to
other matters that may properly come before the Annual Meeting. You may also
revoke or change your proxy at any time before the Annual Meeting. To do this,
send a written notice of revocation or another signed proxy with a later date to
the Secretary of the Company at the Company's principal executive offices before
the beginning of the Annual Meeting. You may also automatically revoke your
proxy by attending the Annual Meeting and voting in person. All shares
represented by a valid proxy received prior to the Annual Meeting will be voted.
SOLICITATION OF PROXIES
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the proxy,
and any additional soliciting material furnished to shareholders. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs of
forwarding the solicitation material to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by solicitation by
telephone, telegram, or other means by directors, officers, employees, or at the
Company's request, a professional proxy solicitation firm. No additional
compensation will be paid to directors, officers or employees for such services.
2
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The directors who are being nominated for reelection to the Board of
Directors (the "Nominees"), their ages as of September 30, 2000, their positions
and offices held with the Company and certain biographical information are set
forth below. The proxy holders intend to vote all proxies received by them in
the accompanying form FOR the Nominees listed below unless otherwise instructed.
In the event any Nominee is unable or declines to serve as a director at the
time of the Annual Meeting the proxies will be voted for any nominee who may be
designated by the present Board of Directors to fill the vacancy. As of the date
of this Proxy Statement, the Board of Directors is not aware of any Nominee who
is unable or will decline to serve as a director. The Board of Directors is
divided into three classes. The directors in each class will serve for a
three-year term, one class being elected each year by our shareholders. The
three (3) nominees receiving the highest number of affirmative votes of the
shares entitled to vote at the Annual Meeting will be elected directors of the
Company to serve for a three-year term until the Annual Meeting in 2003 or until
their successors have been duly elected and qualified.
<TABLE>
<CAPTION>
NOMINEES AGE POSITIONS AND OFFICES HELD
-------- -------- ---------------------------------------------------
<S> <C> <C>
Matthew J. Desch(1)....................... 44 Chairman, Airspan, Inc.
Thomas R. Gibian(2)....................... 47 Managing Director, Emerging Markets Partnership AIG
Chairman, Industrial Technology Investment
Dr. Andrew C. Wang(1)(2).................. 64 Corporation
</TABLE>
------------------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
MATTHEW J. DESCH has served as a director of our company since August 2000.
Mr. Desch is currently Chairman of the Board of Airspan Networks, a broadband
wireless access supplier to global carriers. From 1986 to 2000, Mr. Desch was
employed by Nortel Networks, most recently as Executive Vice President and
President, Service Provider Solutions. He holds a B.S. degree in computer
science from Ohio State University and a M.B.A. from the University of Chicago.
THOMAS R. GIBIAN has served as a director of our company since July 2000.
Mr. Gibian has been a managing director for Emerging Markets Partnership (EMP)
and Chief Operating Officer for the American International Group (AIG) African
Infrastructure Fund since 1995. From 1987 to 1995, Mr. Gibian was employed by
Goldman Sachs Limited as an Executive Director and co-head of structured finance
for the Asia-Pacific Region. Mr. Gibian is a director of Ashanti
Goldfields Ltd. (NYSE: ASL). He holds a B.A. from the College of Wooster in
Wooster, Ohio, and an M.B.A. from the Wharton School of Finance, University of
Pennsylvania.
DR. ANDREW C. WANG has served as a director of our company since 1994.
Dr. Wang has been Chairman of Industrial Technology Investment Corporation, a
venture capital firm, since 1989. From 1992 to 1997, Dr. Wang was President and
Chief Executive Officer of Optical Microwave Network, Inc., a microwave
component company. From 1994 to 1997, Dr. Wang was Chairman and Chief Executive
Officer of Mobile Telesystems, Inc., a satellite communications company.
Dr. Wang holds a B.S. in Electrical Engineering from the National Taiwan
University, a M.S. in Electrical Engineering from the University of California,
Berkeley, and a Ph.D. in Electrical Engineering from Stanford University.
Other Board Members:
Until the annual meeting in 2001:
KEVIN A. FONG has served as a director of our company since 1995. Mr. Fong
has been a General Partner of Mayfield Fund, a venture capital firm, since 1989.
Mr. Fong is a board member of Vixel Corporation and several private companies.
Mr. Fong holds a B.S. in Electrical Engineering from the
3
<PAGE>
University of California, Berkeley, a M.S. in Electrical Engineering and a
M.B.A. from Stanford University.
Until the annual meeting in 2002:
DR. PRISCILLA M. LU founded our company in 1994 and has served as our Chief
Executive Officer and Chairman of the Board since June 1999 and as President
from June 1994 to August 1999. From 1992 to 1994, Dr. Lu was Vice President and
General Manager of the Network Systems Division at Network Equipment
Technologies, a wide-area network equipment provider. From June 1976 to
December 1991, Dr. Lu worked for AT&T Bell Laboratories, a unit of AT&T that is
now Lucent Technologies, where she served as Business Unit Managing Director of
the Imaging and Multimedia Business Group and held other management positions.
Dr. Lu holds a B.S. and M.S. in Computer Science and Mathematics from the
University of Wisconsin and a Ph.D. in Electrical Engineering and Computer
Science from Northwestern University.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the fiscal year ended June 30, 2000, the Board of Directors held
eight (8) meetings and did not act by written consent in lieu of a meeting. For
the fiscal year, each of the Company's present directors during the term of
their tenure attended or participated in at least 75% of the aggregate of
(i) the total number of meetings or actions by written consent of the Board of
Directors and (ii) the total number of meetings held by all committees of the
Board of Directors on which each such director served, except that Kevin Fong
attended fewer than 75% of the total number of meetings of the Board of
Directors and of the total number of meetings of the Compensation Committee of
which he is a member. The Board of Directors has (2) standing committees: the
Audit Committee and the Compensation Committee.
The Audit Committee was created in December 1998. The Audit Committee
reviews, acts on and reports to the Board of Directors with respect to various
auditing and accounting matters, including the selection of the Company's
accountants, the scope of the annual audits, fees to be paid to the Company's
accountants, the performance of the Company's accountants and the accounting
practices of the Company. The members of the Audit Committee are Thomas R.
Gibian and Dr. Andrew C. Wang. During the fiscal year ended June 30, 2000, the
Audit Committee of the Board of Directors held one (1) meeting.
The Compensation Committee was created in June 1996. The Compensation
Committee reviews the performance of the executive officers of the Company,
establishes compensation programs for the officers, and approves option grants
to all employees under the 1994 and 1999 Stock Option Plans. The members of the
Compensation Committee are Messrs. Fong, Desch and Dr. Wang. During the fiscal
year ended June 30, 2000, the Compensation Committee of the Board of Directors
held ten (10) meetings.
COMPENSATION OF DIRECTORS
Except for grants of stock options, directors of the Company generally do
not receive compensation for services provided as a director. The Company also
does not pay compensation for committee participation or special assignments of
the Board of Directors. Non-employee directors are eligible to receive options
under the Company's 1999 Directors Option Plan ("Directors Plan"). Each
individual who first joins the Company's Board of Directors as a non-employee
director after the effective date of the Company's initial public offering on
January 28, 2000, will receive at that time an option for 50,000 of the
Company's common shares. In addition, at each of the Company's annual
shareholders' meetings, beginning in 2001, each non-employee director who will
continue to be a director after that meeting will automatically be granted at
that meeting a fully vested option for 10,000 common shares. However, any
non-employee director who receives an option for 50,000 shares under
4
<PAGE>
this Directors Plan will first become eligible to receive the annual option for
10,000 shares at the annual meeting that occurs during the calendar year
following the year in which he received the option for 50,000 shares.
In November 1999, the Company granted an option to purchase 50,000 shares at
an exercise price of $7.60 per share to each director. Messrs. Gibian and Desch
were each granted an option to purchase 50,000 shares upon their initial
appointment to the Board in 2000 at exercise prices of $13.69 and $10.81
respectively.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED HEREIN.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Company is asking the shareholders to ratify the appointment of KPMG
LLP, Independent Accountants, as the Company's independent public accountants
for the fiscal year ending June 30, 2001. The affirmative vote of the holders of
a majority of shares present or represented by proxy and voting at the Annual
Meeting will be required to ratify the appointment of KPMG LLP.
In the event the shareholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the appointment is ratified,
the Board of Directors, in its discretion, may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors feels that such a change would be in the Company's and its
shareholders' best interests.
KPMG LLP has audited the Company's financial statements since 1995. Its
representatives are expected to be present at the Annual Meeting, will have the
opportunity to make a statement if they desire to do so, and will be available
to respond to appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF KPMG LLP TO SERVE AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE
FISCAL YEAR ENDING JUNE 30, 2001.
5
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth certain information regarding our executive
officers as of September 30, 2000:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- -------- ---------------------------------------------------
<S> <C> <C>
Dr. Priscilla M. Lu....................... 48 Chief Executive Officer and Chairman of the Board
Ian V. Sugarbroad......................... 54 President and Chief Operating Officer
Thomas W. Hubbs........................... 55 Executive Vice President and Chief Financial
Officer
Dr. Roger C. Cheung....................... 51 Vice President of Engineering
Denis A. Cote............................. 46 Vice President of Worldwide Sales
Robin E. Foor............................. 52 Vice President, General Counsel and Secretary
Dr. Edward W. Futcher..................... 46 Vice President of Technology
Michele D. Hogan.......................... 52 Vice President of Finance
H. David Jones............................ 55 Vice President of Customer Service
Frank Seto................................ 44 Vice President of Operations
Dr. Roderick E. Thorne.................... 59 Vice President of Compliance and Quality
Arthur Yeung.............................. 41 Vice President, Managing Director, Asia
</TABLE>
DR. PRISCILLA M. LU founded our company in 1994 and has served as our Chief
Executive Officer and Chairman of the Board since June 1999 and as President
from June 1994 to August 1999. From 1992 to 1994, Dr. Lu was Vice President and
General Manager of the Network Systems Division at Network Equipment
Technologies, a wide-area network equipment provider. From June 1976 to
December 1991, Dr. Lu worked for AT&T Bell Laboratories, a unit of AT&T that is
now Lucent Technologies, where she served as Business Unit Managing Director of
the Imaging and Multimedia Business Group and held other management positions.
Dr. Lu holds a B.S. and M.S. in Computer Science and Mathematics from the
University of Wisconsin and a Ph.D. in Electrical Engineering and Computer
Science from Northwestern University.
IAN V. SUGARBROAD has served as our President and Chief Operating Officer
since September 1999. From 1976 to August 1999, Mr. Sugarbroad worked for Nortel
Networks, a telecommunications equipment company. From January 1998 to
August 1999, Mr. Sugarbroad was Vice President of Business Development, GSM
Solutions, located in Paris, France. From November 1996 to December 1997,
Mr. Sugarbroad was Vice President and General Manager of Nortel Networks
wireless terminals business in Dallas, Texas. Mr. Sugarbroad holds a B.Sc. in
Physics from the University of London, a M.Sc. in Physics and a M.B.A. from the
University of Western Ontario.
THOMAS W. HUBBS has served as our Executive Vice President and Chief
Financial Officer since July 1999 and as Senior Vice President and Chief
Financial Officer from December 1995 to April 1998. From November 1998 to
July 1999, Mr. Hubbs consulted with us in a variety of financial and business
development capacities. From April 1998 to October 1998, Mr. Hubbs served as
Senior Vice President and Chief Financial Officer for Walker Interactive
Systems, Inc., a financial systems software provider. From February 1987 to
August 1995, Mr. Hubbs served as Vice President and Chief Financial Officer for
VeriFone, Inc., a transaction automation systems company. Mr. Hubbs is a board
member of Celeritek, Inc. Mr. Hubbs holds a B.S. degree in Business
Administration from Lehigh University and a M.B.A. from the University of Santa
Clara.
DR. ROGER C. CHEUNG has served as our Vice President of Engineering since
September 1999. From February 1994 to September 1999, Dr. Cheung was Chief
Architect, Computer Systems Development at Hewlett-Packard Company, a computer
and electronics equipment manufacturer. Dr. Cheung holds a B.S. degree in
Electrical Engineering from Lehigh University and a M.S. and Ph.D. in Electrical
Engineering from the University of California, Berkeley.
6
<PAGE>
DENIS A. COTE has served as our Vice President of Worldwide Sales since
November 1998. From April 1979 until joining us in November 1998, Mr. Cote
worked for Harris Corporation, a telecommunications equipment supplier. From
November 1993 to November 1998, Mr. Cote was Vice President of WorldWide
Marketing and Sales for Harris Farinon, a subsidiary of Harris Corporation.
Mr. Cote holds a B.S. in Electrical Engineering and a M.B.A. from the University
of Montreal.
ROBIN E. FOOR has served as our Vice President and General Counsel since
July 2000, as Secretary since September 2000, and as Corporate Counsel from
January 2000 to July 2000. Prior to joining our company, from August 1999 to
January 2000 Mr. Foor was employed by Interim Legal Professionals as an attorney
on assignment to International Microcomputer Software, Inc. Mr. Foor was in
legal practice at the Law Offices of Robin E. Foor from 1986 to 1999. Mr. Foor
holds a B.A. in Economics from the University of Michigan, an M.B.A. from
Harvard Business School, and a J.D. from the University of Michigan Law School.
DR. EDWARD W. FUTCHER has served as our Vice President of Technology since
September 1999 and as our Vice President of Engineering from March 1998 to
September 1999 and as acting Vice President of Engineering from July 1997 to
March 1998. From May 1997 to July 1997, Dr. Futcher was Senior Director of
Systems and Software Development. From May 1994 to May 1997, he was Director of
Engineering at Tellabs, a telecommunications equipment supplier. Dr. Futcher
holds a B.Sc. in Physics and a Ph.D. in Theoretical Physics from the University
of London.
MICHELE D. HOGAN has served as our Vice President of Finance since
August 1994. From July 1985 until January 1994, Ms. Hogan was employed by
Network Equipment Technologies, a wide-area network equipment provider, where
she served as Director of Operations Finance. Ms. Hogan holds a B.S. in
Sociology from the University of Santa Clara and a M.B.A. from San Jose State
University.
H. DAVID JONES has been Vice President of Product Marketing since
September 1999 and was Vice President of Sales from April 1996 to March 1997,
and Director of Sales from August 1994 to March 1996. From November 1998 until
September 1999, Mr. Jones consulted with us in a number of sales and marketing
capacities. From April 1997 until May 1998, he was co-founder and Vice President
of Sales and Marketing for Symmetry Communications Systems, Inc., a high-speed
wireless communications company. He holds a B.S. in Business Administration from
Capital University and a M.B.A. from Ohio University.
FRANK SETO has served as our Vice President of Operations since
October 1999. From July 1998 until October 1999, Mr. Seto was Director of Global
Operations Finance at Lucent Technologies, a telecommunications equipment
company. From August 1986 until July 1998, Mr. Seto was Manufacturing Operations
Controller and Divisional Controller at 3Com Corporation, an electronics
equipment manufacturer. Mr. Seto holds a B.S. in Business Administration from
the University of California, Berkeley and a M.B.A. from Golden Gate University.
DR. RODERICK E. THORNE has served as our Vice President, Compliance and
Quality since September 1999, was our Director, Hardware Engineering from
June 1996 until September 1999 and served in other roles from August 1994 until
June 1996. Dr. Thorne holds a B.S. in Electrical Engineering from Yale
University and a M.S. and Ph.D. in Electrical Engineering from the University of
California, Berkeley.
ARTHUR YEUNG has served as our Vice President and Managing Director, Asia
since July 2000, and as General Manager, Asia-Pacific Region from December 1995
until July 2000. Prior to joining our company, Mr. Yeung was employed from
May 1992 to July 1995 by Sky Telecom Services LTD. Corporation in Hong Kong. He
holds a B.S. degree in Electronics Engineering and an M.B.A. from the Chinese
University of Hong Kong.
7
<PAGE>
STOCK OWNERSHIP
Set forth below is the number of common shares, the only outstanding voting
shares of the Company, beneficially owned as of September 11, 2000 by each
director and nominee, each of the executive officers named in the Summary
Compensation Table included elsewhere in this Proxy Statement (the "Named
Officers"), all directors and executive officers of the Company as a group, and
each holder of 5% or more of the outstanding Common Shares.
Beneficial ownership is determined in accordance with the rules of the SEC.
In computing the number of shares beneficially owned by a person and the
percentage ownership of that person, the common shares subject to options or
warrants held by that person that are currently exercisable or will become
exercisable within 60 days after September 11, 2000, are deemed outstanding,
while the shares are not deemed outstanding for purposes of computing percentage
ownership of any other person.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED CLASS
------------------------------------ ------------ ----------
<S> <C> <C>
Nortel Networks Corporation(a).............................. 7,998,868 15.7
Priscilla M. Lu(e).......................................... 3,769,191 7.8
Mayfield Funds (d).......................................... 2,767,763 5.7
Holodeck Limited(b)......................................... 2,594,220 5.4
Sasson International Holdings, Inc. (MTI)(c)................ 2,502,274 5.2
Kevin A. Fong(d)(e)......................................... 2,767,763 5.7
Andrew C. Wang(e)........................................... 50,000 *
Matthew J. Desch(e)......................................... 2,083 *
Thomas R. Gibian(e)......................................... 54,206 *
Denis A. Cote(e)............................................ 178,058 *
Thomas W. Hubbs(e).......................................... 318,357 *
Arthur Yeung(e)............................................. 113,783 *
Ian V. Sugarbroad(e)........................................ 138,413 *
All directors and executive officers of the Company as a
group (16 persons, including the foregoing)(e)............ 8,204,782 16.5
</TABLE>
------------------------
* Less than one percent
(a) Nortel Networks Corporation, a Canadian Corporation, 2201 Lakeside Blvd,
Richardson, TX 75082-4305, Attn: Robert Fishman. Includes warrants to
purchase 2,500,001 common shares which expire March 2004.
(b) Holodeck, Limited, a wholly owned subsidiary of Hutchison Whampoa, Ltd, 22nd
Floor, Hutchison House, 10 Harcourt Road, Hong Kong, China, Attn: Susan
Chow.
(c) Sasson International Holdings, Rm A1, SF 333 Tun-Hwa Road Section 2, Taipei,
106 Taiwan. Includes warrants to purchase 12,874 common shares which expire
March 2004.
(d) Mayfield Funds, 2800 Sand Hill Road, Suite 250, Menlo Park, CA 94025-7055,
Attn: Kevin A. Fong. Mr. Fong is a director of interWAVE Communications
International, Ltd. Includes 2,118,691 shares and warrants to purchase
351,910 shares held by Mayfield VII, 50,000 shares issuable upon exercise of
stock options held by Mayfield VII, and 226,053 shares and warrants to
purchase 21,109 shares held by Mayfield Associates. The warrants expire in
March 2004.
(e) Dr. Lu is Chairman, President and Chief Executive Officer (a Named Officer)
and a director of the Company, Messrs. Cote, Hubbs, Sugarbroad and Yeung are
Named Officers of the Company and Messrs. Desch, Fong, Gibian, and Dr. Wang
are directors of the Company.
8
<PAGE>
The number of shares shown for Named Officers and all current directors and
executive officers as a group includes currently exercisable options and
warrants to purchase common shares as follows: Dr. Lu, 0; Mr. Cote, 56,872;
Mr. Hubbs, 202,500; Mr. Sugarbroad, 137,500; and Mr. Yeung, 68,205.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The members of the Board of Directors, the executive officers of the Company
and persons who hold more than 10% of the Company's outstanding common shares
("Section 16 Insiders") are subject to the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934, as amended, which require
them to file reports with respect to their ownership of the Company's common
stock and their transactions in such common shares. Based upon (i) the copies of
Section 16(a) reports that the Company received from such persons for their 2000
fiscal year transactions in the common shares and their common shares holdings
and (ii) the written representations received from one or more of such persons
that no annual Form 5 reports were required to be filed by them for the 2000
fiscal year, the Company believes that all reporting requirements under
Section 16(a) for such fiscal year were met in a timely manner by its executive
officers, Board members and greater than ten-percent shareholders, except that
Arthur Yeung filed his Form 3 reporting initial stock ownership eighteen days
late when he was elected an officer at the Company.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table presents information about compensation paid by the
Company in 1999 for services by the Company's chief executive officer and the
Company's four other highest-paid executive officers whose total salary and
bonus for the fiscal year exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
--------------------
ANNUAL COMPENSATION NUMBER OF SECURITIES
NAME AND --------------------------------- OTHER ANNUAL UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS (#)
------------------ -------- --------- ---------- --------------- --------------------
<S> <C> <C> <C> <C> <C>
Priscilla M. Lu.................. 2000 265,289 66,098 14,097(1) --(2)
Chairman of the Board 1999 200,000 -- 21,443(1) --
& Chief Executive Officer
Thomas W. Hubbs.................. 2000 271,319 118,658 -- 100,000
Executive Vice President, 1999 210,600 -- -- 185,000
Chief Financial Officer
Arthur B.K. Yeung................ 2000 258,200 49,872 35,487(3) --
Vice President, Managing 1999 251,375 8,824 -- --
Director, Asia-Pacific
Denis Cote....................... 2000 169,904 101,461(3) --
Vice President, 1999 132,367 30,000 -- 180,000
Worldwide Sales
Ian V. Sugarbroad................ 2000 209,615 41,511 26,000(4) 500,000
President, Chief Operating
Officer
</TABLE>
------------------------
(1) Amount represents reimbursement for home and child care expenses for
Dr. Lu.
(2) During 2000, no options or stock appreciation rights were granted to the
Company's chief executive officer.
9
<PAGE>
(3) Represents sales commissions paid to Messrs. Cote and Yeung.
(4) Re-location expenses reimbursed to Mr. Sugarbroad.
OPTION GRANTS DURING FISCAL YEAR 2000
The following table sets forth information with respect to stock options
granted during 2000 to the chief executive officer and the other highest-paid
executive officers whose total salary and bonus for the fiscal year exceeded
$100,000. During 2000, options to purchase 740,000 common shares were granted at
a weighted average exercise price of $1.98.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------- POTENTIAL REALIZABLE VALUE VALUE OF
NUMBER OF AT ASSUMED ANNUAL RATES OPTION
SECURITIES OF SHARE PRICE APPRECIATION GRANT
UNDERLYING EXERCISE FOR OPTION TERM AT THE INITIAL
OPTIONS PRICE EXPIRATION --------------------------- OFFERING
NAME GRANTED PER SHARE DATE 5% 10% PRICE
---- ---------- --------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Priscilla M. Lu.............. 0 -- -- -- -- --
Ian V. Sugarbroad............ 500,000 $ 0.70 07/29/09 $220,113 $557,810 $6,150,000
Thomas W. Hubbs.............. 100,000 0.70 07/29/09 44,023 111,562 1,230,000
Denis Cote................... 40,000 0.70 08/30/09 17,609 44,625 492,000
40,000 5.25 10/07/09 132,068 334,686 310,000
50,000 11.00 05/22/10 345,891 876,558 100,000
Arthur B.K. Yeung............ 10,000 7.60 11/18/09 47,796 121,124 54,000
</TABLE>
In accordance with the rules of the SEC, the above shows the potential
realizable value over the term of the option (the period from the grant date to
the expiration date) based on assumed rates of share price appreciation of 5%
and 10%, compounded annually. These amounts do not represent our estimate of
future share price. Actual gains, if any, on option exercises will depend on the
future performance of our common shares.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN THE MONEY OPTIONS
SHARES OPTIONS AT FY-END AT FY-END ($)
ACQUIRED ON VALUE ------------------------- -----------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
---- ----------- ----------- ------------------------- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
Priscilla M. Lu............... 400,000 468,000 -- -- -- --
Thomas W. Hubbs............... -- -- 174,166 110,884 2,316,407 1,474,092
Arthur B.K. Yeung............. 40,000 588,000 44,165 39,335 618,310 550,690
Denis Cote.................... 97,809 261,101 17,082 185,109 205,151 1,793,024
Ian V. Sugarbroad............. -- -- 50,000 450,000 665,000 5,985,000
</TABLE>
------------------------
(1) The amount set forth represents the difference between the fair market value
of the underlying common shares as of June 30, 2000 ($14.00) and the
exercise price of the option, multiplied by the number of shares underlying
the option.
10
<PAGE>
EMPLOYMENT AGREEMENTS
In June 1999, we entered into an employment agreement with Thomas Hubbs, our
Executive Vice President and Chief Financial Officer. The agreement provides for
an annual base salary of $260,000 and quarterly bonuses up to 30% of his then
annual salary per year, beginning in fiscal year 2000, upon meeting corporate
objectives established by the board of directors. The agreement also provides
Mr. Hubbs with incentive stock options to purchase an aggregate of 100,000
common shares subject to time-based vesting over a four-year period. The
agreement provides that Mr. Hubbs is an employee at will, which means that his
employment may be terminated at any time at our sole discretion. The agreement
also provides that if Mr. Hubbs' duties or position is changed in a detrimental
manner towards him upon a sale of our assets or merger with or into another
entity, we will owe him severance of one year salary and accelerate the vesting
of some of his options.
In September 1999, we entered into an employment agreement with Ian
Sugarbroad, our President and Chief Operating Officer. The agreement provides
for an annual base salary of $250,000 and quarterly bonuses up to $50,000 per
year upon meeting revenue and expense targets. The agreement also provides
Mr. Sugarbroad with incentive stock options to purchase an aggregate of 300,000
common shares subject to time-based vesting over a four-year period. In
addition, Mr. Sugarbroad may earn up to 50,000 common shares for each of the
next four years in quarterly bonuses. The agreement provides that
Mr. Sugarbroad is an employee at will, which means that his employment may be
terminated at any time at our sole discretion. If we terminate Mr. Sugarbroad's
employment without cause, we must pay him up to 100% of his annual salary for
one year. The agreement also provides that if Mr. Sugarbroad's duties or
position is changed in a detrimental manner towards him upon a sale of our
assets or a merger with or into another entity, we will owe him severance of one
year salary and accelerate the vesting of some of his options.
EMPLOYEE BENEFIT PLANS
1999 OPTION PLAN
Our option plan was approved by our board in September 1999 and was approved
by the shareholders at the January 2000 annual meeting. Our option plan provides
for the grant of incentive options to employees and for the grant of
nonstatutory options and share purchase rights to employees, directors and
consultants. Unless terminated sooner, this option plan will terminate
automatically in 2009. The 1999 option plan initially had 1,827,763 shares
available for grant, which were the reserved and unissued shares under the 1994
stock plan. The amount reserved under the option plan automatically increases at
the end of each fiscal year by the lesser of 2,000,000 shares or 4.0% of
outstanding shares on such date or an amount determined by the board. At
June 30, 2000, 4% of the outstanding shares, or 1,869,958 shares, were added to
the Plan.
Commencing with our 2001 annual meeting of shareholders, each of our
non-employee directors will automatically be granted an option to purchase
10,000 shares each year following the date of our annual shareholder's meeting,
if on such date he or she will have served on the board of directors for at
least the previous 6 months. Each option will have a term of 10 years and the
exercise price will be 100% of the fair market value per common share on the
date of grant. Each option will vest as to 1/12 of the shares each month
following the date of grant, provided the optionee still serves as a director on
those dates.
The option plan provides that in the event that we merge with or into
another corporation, sell substantially all of our assets or enter a similar
transaction, the successor corporation will assume or substitute each option or
right. If the outstanding options or rights are not assumed or substituted, the
administrator will provide notice to the optionee that he or she has the right
to exercise the option or right as to all of the shares subject to the option or
right, including shares which would not otherwise
11
<PAGE>
be exercisable, for a period of 15 days from the date of the notice. The option
or right will terminate upon the expiration of the 15-day period.
1999 EMPLOYEE SHARE PURCHASE PLAN
Our employee share purchase plan was adopted by the board in September 1999
and approved by the shareholders at the 1999 annual shareholders meeting in
January 2000. A total of 300,000 of our common shares have been reserved for
issuance under the employee share purchase plan. The amount reserved under the
employee share purchase plan will be increased automatically at the end of each
fiscal year in the amount of the lesser of 200,000 shares, 0.5% of the
outstanding shares on such date or an amount determined by the board. During
fiscal year 2000, 200,000 shares were added to the reserve pursuant to this
plan.
1994 STOCK PLAN
This stock plan was adopted on July 13, 1994. This plan provides for the
grant of incentive stock options to our employees, including employee directors,
and non-statutory stock options and stock purchase rights to our employees,
directors and consultants. We have reserved 10,730,000 common shares for
issuance under this plan. As of June 30, 2000, options to purchase 5,612,730
common shares were outstanding at a weighted average exercise price of $3.70,
and 2,029,153 shares had been issued upon exercise of outstanding options.
In the event that we merge with or into another corporation, or sell
substantially all of our assets, each outstanding option may be assumed or an
equivalent option substituted by the successor organization. However, if the
successor corporation does not agree to assume or substitute the option, the
option will terminate. Our board of directors has the authority to amend or
terminate the option plan provided that no action that impairs the rights of any
holder of an outstanding option may be taken without the holder's consent. In
addition, our shareholders must approve any modification to the option plan.
401(k) PLAN
In 1995, we adopted a 401(k) plan covering our full-time employees located
in the United States. The 401(k) plan is intended to qualify under
Section 401(k) of the Internal Revenue Code, so that contributions to the 401(k)
plan by employees or by us, and the investment earnings thereon, are not taxable
to employees until withdrawn from the 401(k) plan, and so that we can deduct our
contributions, if any, when made. Pursuant to the 401(k) plan, employees may
elect to reduce their current compensation by up to the lesser of 20% of their
annual pre-tax gross compensation or the statutorily prescribed annual limit of
$10,000 and to have the amount of the reduction contributed to the 401(k) plan.
Matching contributions by us, if any, are vested when made; all other
contributions, and earnings on such contributions, are at all times fully
vested. We did not contribute to the plan in the fiscal year ending June 30,
1999. Effective July 1, 1999, we agreed to match up to $1,000 of employee
contributions during a plan year.
INDEMNIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS AND LIMITATION OF LIABILITY
Our bylaws provide that we shall indemnify our directors, officers,
employees and other agents but not for acts of any fraud or dishonesty on the
part of indemnified parties. In addition, our bylaws provide that our
shareholders agree to waive any claims or right of actions the shareholders may
have against any of our directors or executive officers on account of any action
taken by the directors or executive officers in their capacity for us. This
waiver does not apply to claims arising under the U.S. federal securities laws.
Our bylaws also permit us to secure insurance on behalf of any officer,
director,
12
<PAGE>
employee or other agent for any liability arising out of his or her actions in
such capacity, regardless of whether our bylaws expressly permit
indemnification.
We have entered into agreements indemnifying our directors and executive
officers, in addition to the indemnification provided for in our bylaws. These
agreements, among other things, indemnify our directors and executive officers
for certain expenses including attorneys' fees, judgments, fines and settlement
amounts incurred by any director or executive officer in any action or
proceeding, including any action by or in our right arising out of that person's
services as a director, officer, employee, agent or fiduciary for us, any
subsidiary of ours or any other company or enterprise to which the person
provides services at our request. The agreements do not provide for
indemnification in cases where
- the claim is brought by the indemnified party;
- the indemnified party has not acted in good faith;
- the claim arises under section 16(b) of the Securities Exchange act; or
- the indemnified party has engaged in acts, omissions or transactions for
which the indemnified party is prohibited from receiving indemnification
under the agreement or applicable law.
We believe that these provisions and agreements are necessary to attract and
retain qualified persons as directors and executive officers. It is the position
of the SEC that indemnification for liabilities arising under federal or state
securities laws is against public policy and not enforceable.
At present, there is no pending litigation or proceeding involving any of
our directors or officers in which indemnification is required or permitted, and
we are not aware of any threatened litigation or proceeding that may result in a
claim for such indemnification.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is a report of the Compensation Committee of the Board of
Directors (the "Committee") describing the compensation policies applicable to
our executive officers during the fiscal year ended June 30, 2000. The Committee
is responsible for establishing and monitoring our general compensation policies
and compensation plans, as well as the specific compensation levels for
executive officers. Executive officers who are also directors have not
participated in deliberations or decisions involving their own compensation.
GENERAL COMPENSATION POLICY
Under the supervision of the Board of Directors, our compensation policy is
designed to attract and retain qualified key executives critical to our growth
and long-term success. It is the objective of our Board of Directors to have a
portion of each executive's compensation contingent upon our performance as well
as upon the individual's personal performance. Accordingly, each executive
officer's compensation package is comprised of three elements: (i) base salary
which reflects individual performance and expertise, (ii) variable bonus awards
payable in cash and tied to the achievement of certain performance goals that
the Board of Directors establishes from time to time for us and (iii) long-term
stock-based incentive awards which are designed to strengthen the mutuality of
interests between the executive officers and our shareholders.
The summary below describes in more detail the factors which the Board of
Directors considers in establishing each of the three primary components of the
compensation package provided to the executive officers.
13
<PAGE>
BASE SALARY
The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals for
which he or she has responsibility, the compensation levels at companies which
compete with us for business and executive talent, and the incentives necessary
to attract and retain qualified management. Base salary is adjusted each year to
take into account the individual's performance and to maintain a competitive
salary structure. Our performance does not play a significant role in the
determination of base salary.
CASH-BASED INCENTIVE COMPENSATION
Cash bonuses are awarded on a discretionary basis to executive officers on
the basis of their success in achieving designated individual goals and our
success in achieving specific company-wide goals, such as customer satisfaction,
revenue growth and earnings growth.
LONG-TERM INCENTIVE COMPENSATION
We have utilized our share option plans to provide executives and other key
employees with incentives to maximize long-term shareholder values. Awards under
this plan by the Board of Directors take the form of share options designed to
give the recipient a significant equity stake in us and thereby closely align
his or her interests with those of our shareholders. Factors considered in
making such awards include the individual's position with us, his or her
performance and responsibilities, and internal comparability considerations.
Each option grant allows the executive officer to acquire common shares at a
fixed price per share (the fair market value on the date of grant) over a
specified period of time (up to 10 years). The options typically vest in
periodic installments over a four-year period, contingent upon the executive
officer's continued employment with us. Accordingly, the option will provide a
return to the executive officer only if he or she remains in our service, and
then only if the market price of the common shares appreciates over the option
term.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Prisicilla M. Lu has served as our chairman and chief executive officer
since our inception in 1994, and she served as our president from 1994 to 1999.
Her annual base salary was increased effective January 1, 2000 from $200,000 to
$285,000, and a cash bonus target was established of $25,000 for each quarter
and $100,000 for the calendar year, based on our achievement of revenue and
profit objectives. During the first two calendar quarters, Dr. Lu earned
aggregate cash bonuses of $48,026, reflecting our performance during the period.
The factors discussed above in "Base Salaries," "Cash-Based Incentive
Compensation," and "Long-Term Incentive Compensation" were also applied in
establishing the amount of Dr. Lu's salary and targeted cash bonus. Significant
factors in establishing Dr. Lu's compensation were the amount of her current
share ownership, changes in the compensation for similarly situated chief
executives, achievement of revenue targets and customer contracts, our growth as
we prepared for our initial public offering, and successful completion of the
initial public offering.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
The Committee has considered the impact of Section 162(m) of the Internal
Revenue Code adopted under the Omnibus Budget Reconciliation Act of 1993, which
section disallows a deduction for any publicly held corporation for individual
compensation exceeding $1 million in any taxable year for the CEO and four other
most highly compensated executive officers, respectively, unless such
compensation meets the requirements for the "performance-based" exception to
Section 162(m). As
14
<PAGE>
the cash compensation paid by us to each of its executive officers is expected
to be below $1 million and the Committee believes that options granted under our
1994 and 1999 Option Plans to such officers will meet the requirements for
qualifying as performance-based, the Committee believes that Section 162(m) will
not affect the tax deductions available to the Company with respect to the
compensation of its executive officers. It is the Committee's policy to qualify,
to the extent reasonable, its executive officers' compensation for deductibility
under applicable tax law. However, we may from time to time pay compensation to
its executive officers that may not be deductible.
From the members of our Compensation Committee:
Kevin A. Fong
Andrew C. Wang
Matthew J. Desch
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the compensation committee is currently, or has been
at any time since our formation, one of our officers or employees. During the
fiscal year ended June 30, 2000, no executive officer of our company served as a
member of the board of directors or compensation committee of any entity that
has one or more officers serving as a member of our board of directors or
compensation committee.
15
<PAGE>
SHARE PERFORMANCE GRAPH
The graph set forth below compares the cumulative total shareholder return
on the Company's common stock between January 28, 2000 (the date the Company's
common stock commenced public trading) and June 30, 2000 with the cumulative
total return of (i) the CRSP Total Return Index for the Nasdaq Stock Market
(U.S. Companies) (the "Nasdaq Stock Market-U.S. Index") and (ii) the Nasdaq
Telecommunications Index over the same period. This graph assumes the investment
of $100.00 on January 28, 2000, in the Company's common shares, the Nasdaq Stock
Market-U.S. Index and the H&Q Internet Index and assumes the reinvestment of
dividends, if any.
The comparisons shown in the graph below are based upon historical data. The
Company cautions that the price performance shown in the graph below is not
indicative of, nor intended to forecast, the potential future performance of the
Company's common shares.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG INTERWAVE COMMUNICATIONS INTERNATIONAL, LTD.,
THE NASDAQ STOCK MARKET--U.S. INDEX
AND THE NASDAQ TELECOMMUNICATIONS INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERWAVE
<S> <C> <C> <C>
COMMUNICATIONS NASDAQ STOCK NASDAQ
INTERNATIONAL, LTD. MARKET (U.S.) TELECOMMUNICATIONS
1/28/00 $100.00 $100.00 $100.00
1/31/00 $280.77 $101.28 $102.60
2/29/00 $495.19 $120.60 $112.48
3/31/00 $231.73 $118.06 $109.33
4/30/00 $102.41 $99.27 $89.08
5/31/00 $72.12 $87.28 $74.51
6/30/00 $107.69 $102.60 $86.24
</TABLE>
The Company effected its initial public offering of common shares on
January 28, 2000. The graph above commences with the price of $13.00 per share
to the underwriters on January 28, 2000--the date the Company's common shares
commenced public trading.
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate this Proxy
Statement or future filings made by the Company under those statutes, the
Compensation Committee Report and Stock Performance Graph shall not be deemed
filed with the Securities and Exchange Commission and shall not be deemed
incorporated by reference into any of those prior filings or into any future
filings made by the Company under those statutes.
16
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Since July 1, 1999, there has not been, nor is there currently proposed, any
transaction or series of similar transactions to which the Company or any of its
subsidiaries was or is to be a party in which the amount involved exceeded or
will exceed $60,000 and in which any director, executive officer, holder of more
than 5% of the common stock of the Company or any member of the immediate family
of any of the foregoing persons had or will have a direct or indirect material
interest other than (i) compensation agreements and other arrangements, which
are described where required in Executive Compensation and Related Information
and (ii) the transactions described below.
OPTIONS TO PURCHASE COMMON SHARES. In September 1999, we granted an option
to purchase 390,000 and 200,000 common shares to Roger Cheung and Frank Seto,
respectively, two of our executive officers at an exercise price of $1.50 per
share. Mr. Seto exercised his 200,000 share option in January 2000, subject to a
repurchase option to us in the event his employment terminates prior to period
vesting of his shares as contemplated by his stock option. In November 1999, we
granted an option to purchase 50,000 common shares at an exercise price of $7.60
to each of our then non-employee directors (seven people).
We loaned Dr. Lu $132,000 in August 1999 so that she could exercise her
expiring option holdings. The options were exercised for 400,000 of our common
shares at an exercise price of $0.33 per share. In exchange for the loan,
Dr. Lu entered into a promissory note with us in which she agreed to repay the
loan on or before August 26, 2004. The note accrues interest at 7.05% and may be
prepaid without penalty.
The Company's Certificate of Incorporation limits the liability of its
directors for monetary damages arising from a breach of their fiduciary duty as
directors, except to the extent otherwise required by the Delaware General
Corporation Law. Such limitation of liability does not affect the availability
of equitable remedies such as injunctive relief or rescission.
The Company's bylaws provide that the Company shall indemnify its directors
and officers to the fullest extent permitted by Bermuda law, including in
circumstances in which indemnification is otherwise discretionary under Bermuda
law. The Company has also entered into indemnification agreements with its
officers and directors containing provisions that may require the Company, among
other things, to indemnify such officers and directors against certain
liabilities that may arise by reason of their status or service as directors or
officers and to advance their expenses incurred as a result of any proceeding
against them as to which they could be indemnified.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Pursuant to new amendments to Rule 14a-4(c) of the Securities Exchange Act
of 1934, proposals of shareholders intended to be presented at the 2001 Annual
Meeting of Shareholders of the Company must be received by the Company at the
offices of its subsidiary, interWAVE Communications, Inc., at 312 Constitution
Drive, Menlo Park, California 94025, Attn: General Counsel, not later than
July 1, 2001 and satisfy the conditions established by the Securities and
Exchange Commission for shareholder proposals to be included in the Company's
proxy statement for that meeting.
17
<PAGE>
OTHER MATTERS
The Board knows of no other matters to be presented for shareholder action
at the Annual Meeting. However, if other matters do properly come before the
Annual Meeting or any adjournments or postponements thereof, the Board intends
that the persons named in the proxies will vote upon such matters in accordance
with their best judgment.
The Company will mail without charge, upon written request, a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000.
Requests should be sent to interWAVE Communications Inc., 312 Constitution
Drive, Menlo Park, CA 94025, Attn: Investor Relations.
BY ORDER OF THE BOARD OF DIRECTORS,
/s/ Priscilla M. Lu, Ph.D.
Priscilla M. Lu, Ph.D.
CHAIRMAN OF THE BOARD & CHIEF
EXECUTIVE OFFICER
Menlo Park, California
October 16, 2000
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME PRIOR TO THE ANNUAL MEETING. IF
YOU DECIDE TO ATTEND THE ANNUAL MEETING AND WISH TO CHANGE YOUR PROXY VOTE, YOU
MAY DO SO AUTOMATICALLY BY VOTING IN PERSON AT THE MEETING.
THANK YOU FOR YOUR ATTENTION TO THIS MATTER. YOUR PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE ANNUAL MEETING.
18
<PAGE>
---------------------
COMPANY #
CONTROL #
---------------------
YOU MAY VOTE YOUR PROXY BY MAIL.
YOUR VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid
envelope we've provided or return it to interWAVE COMMUNICATIONS
INTERNATIONAL, LTD., c/o Shareowner Services-SM-, P.O. Box 64873,
St. Paul, MN 55164-0873.
PLEASE MAIL YOUR PROXY CARD
-- PLEASE DETACH HERE --
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
<TABLE>
<S> <C> <C> <C> <C>
1. Election of directors to serve until the Annual Meeting in 2003:
01 Matthew J. Desch 03 Dr. Andrew C. Wang / / Vote FOR / / Vote WITHHELD
02 Thomas R. Gibian all nominees from all nominees
(except as marked)
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY -----------------------------------------------
INDICATED NOMINEE, WRITE THE NUMBER(S) OF THE
NOMINEE(S) IN THE BOX PROVIDED TO THE RIGHT.) -----------------------------------------------
2. Proposal to ratify the appointment of KPMG LLP
as the Company's Independent Public Accountants: / / For / / Against / / Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR
EACH PROPOSAL.
Address Change? Mark Box / /
Indicate changes below: Date _____________________
-----------------------------------------------
-----------------------------------------------
Signature(s) in Box
Please sign exactly as your name(s) appear on
Proxy. If held in joint tenancy, all persons
must sign. Trustees, administrators, etc.,
should include title and authority. Corporations
should provide full name of corporation and
title of authorized officer signing the proxy.
</TABLE>
<PAGE>
interWAVE Communications International, Ltd.
ANNUAL MEETING OF STOCKHOLDERS
FRIDAY, DECEMBER 8, 2000
10 a.m.
THE COMMONS, TYCO CORPORATION
302 CONSTITUTION DRIVE
MENLO PARK, CALIFORNIA 94025
interWAVE Communications International, Ltd.
c/o interWAVE Communications, Inc.
302 CONSTITUTION DRIVE, MENLO PARK, CALIFORNIA 94025 PROXY
--------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON DECEMBER 8, 2000.
The shares of stock you hold in your account or in a dividend reinvestment
account will be voted as you specify below.
IF NO CHOICE IS SPECIFIED, THE PROXY WILL BE VOTED "FOR" ITEMS 1 AND 2.
By signing the proxy, you revoke all prior proxies and appoint Dr. Priscilla
Lu and Thomas W. Hubbs, and each of them, with full power of substitution, to
vote your shares on the matters shown on the reverse side and any other
matters which may come before the Annual Meeting and all adjournments.
SEE REVERSE FOR VOTING INSTRUCTIONS.
