<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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
STM Wireless, 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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
STM WIRELESS, INC.
ONE MAUCHLY
IRVINE, CA 92618
September 24, 1996
Dear Stockholder:
The Board of Directors joins me in extending to you a cordial invitation to
attend the Annual Meeting of Stockholders of STM Wireless, Inc., which will be
held on October 25, 1996, at 10:00 A.M., at the Sutton Place Hotel, 4500
MacArthur Boulevard, Newport Beach, California.
In addition to the matters to be acted on at the meeting, which are
described in detail in the attached Notice of Annual Meeting and Proxy
Statement, there will be a discussion of the operations of the Company. Since
your participation in Company activities is important, I hope you will be able
to attend.
Whether or not you plan to attend the meeting, please be sure to complete,
sign, date and return the proxy card enclosed with the Proxy Statement so that
your shares may be voted in accordance with your wishes. If you do attend the
meeting and wish to vote in person, you may withdraw your proxy at that time.
Sincerely,
/s/ EMIL YOUSSEFZADEH
--------------------------------------
Emil Youssefzadeh
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
SECRETARY
<PAGE>
STM WIRELESS, INC.
ONE MAUCHLY
IRVINE, CA 92618
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 25, 1996
TO THE STOCKHOLDERS OF STM WIRELESS, INC.
The 1996 Annual Meeting of Stockholders of STM Wireless, Inc. (the
"Company"), will be held at the Sutton Place Hotel, 4500 MacArthur Boulevard,
Newport Beach, California, on October 25, 1996, at 10:00 A.M., for the following
purposes as more fully described in the accompanying Proxy Statement:
(1) To elect the following five (5) nominees to serve as directors until the
next annual meeting of stockholders or until their successors are elected
and have qualified:
<TABLE>
<S> <C>
Emil Youssefzadeh Dennis W. Elliott
Frank T. Connors Kim Poh Tan
Dianne C. Walker
</TABLE>
(2) To ratify the appointment of KPMG Peat Marwick LLP as independent auditors
of the Company for the fiscal year ending December 31, 1996; and
(3) To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
Only stockholders of record at the close of business on September 18, 1996
will be entitled to vote at the meeting or any adjournment or postponement
thereof.
By Order of the Board of Directors
/s/ EMIL YOUSSEFZADEH
--------------------------------------
Emil Youssefzadeh
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
SECRETARY
September 24, 1996
YOUR VOTE IS IMPORTANT. THEREFORE, WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING YOU SHOULD COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY. Any
stockholder present at the meeting may withdraw his or her proxy and vote
personally on each matter brought before the meeting. Stockholders attending the
meeting whose shares are held in the name of a broker or other nominee who
desire to vote their shares at the meeting should bring with them a proxy or
letter from that firm confirming their ownership of shares.
<PAGE>
STM WIRELESS, INC.
ONE MAUCHLY
IRVINE, CA 92618
------------------------
PROXY STATEMENT
------------------------
INTRODUCTION
This Proxy Statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of STM Wireless, Inc., a Delaware
corporation (the "Company"), for use at its 1996 Annual Meeting of Stockholders
to be held on October 25, 1996, at 10:00 A.M., at the Sutton Place Hotel, 4500
MacArthur Boulevard, Newport Beach, California. It is contemplated that this
solicitation of proxies will be made exclusively by mail; however, if it should
appear desirable to do so in order to ensure adequate representation at the
meeting, directors, officers and employees of the Company may communicate with
stockholders, brokerage houses and others by telephone, telegraph or in person
to request that proxies be furnished and may reimburse banks, brokerage houses,
custodians, nominees and fiduciaries for their reasonable expenses in forwarding
proxy materials to the beneficial owners of the shares held by them. All
expenses incurred in connection with this solicitation shall be borne by the
Company.
Holders of shares of common stock of the Company ("stockholders") who
execute proxies retain the right to revoke them at any time before they are
voted. Any proxy given by a stockholder may be revoked or superseded by
executing a later dated proxy, by giving notice of revocation to the Secretary
of the Company, One Mauchly, Irvine, California 92618, in writing prior to or at
the meeting or by attending the meeting and voting in person. A proxy, when
executed and not so revoked, will be voted in accordance with the instructions
given in the proxy. If a choice is not specified in the proxy, the proxy will be
voted "FOR" the nominees for election of directors named in this Proxy Statement
and "FOR" the ratification of KPMG Peat Marwick LLP as the Company's independent
auditors. This Proxy Statement is first being mailed to stockholders on or about
September 24, 1996.
VOTING SECURITIES
The shares of common stock constitute the only outstanding class of voting
securities of the Company. Only the stockholders of the Company of record as of
the close of business on September 18, 1996 (the "Record Date"), will be
entitled to vote at the meeting or any adjournment or postponement thereof. As
of the Record Date, there were 5,849,160 shares of common stock outstanding and
entitled to vote. No shares of the Company's preferred stock, no par value, were
outstanding. Each stockholder is entitled to one vote for each share of Common
Stock held as of the Record Date. Abstentions and broker non-votes are each
included in the determination of the number of shares present and voting for the
purpose of determining whether a quorum is present. Abstentions will be treated
as shares present and entitled to vote for purposes of any matter requiring the
affirmative vote of a majority or other proportion of the shares present and
entitled to vote. With respect to shares relating to any proxy as to which a
broker non-vote is indicated on a proposal, those shares will not be considered
present and entitled to vote with respect to any such proposal. Abstentions or
broker non-votes or other failures to vote will have no such effect in the
election of directors, who will be elected by a plurality of the affirmative
votes cast. With respect to any matter brought before the Annual Meeting
requiring the affirmative vote of a majority or other proportion of the
outstanding shares, an abstention or broker non-vote will have the same effect
as a vote against the matter being voted upon.
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
Currently, there are five (5) members of the Board of Directors. Directors
are elected at each annual stockholders' meeting to hold office until the next
annual meeting or until their successors are elected and have qualified. Unless
otherwise instructed, the proxy holders named in the enclosed proxy will vote
the proxies received by them for the five (5) nominees named below. All of the
nominees presently are directors of the Company. Mr. Tan has been nominated in
accordance with the terms of the Stock Purchase Agreement, dated April 1, 1994,
by and among the Company, Berjaya Group (Cayman), Ltd. ("Berjaya"), Emil
Youssefzadeh and Albert Youssefzadeh (the "Stock Purchase Agreement"). Under the
terms of the Stock Purchase Agreement, the Company has agreed to cause at least
one (1) designee of Berjaya to be included in the slate of nominees recommended
by the Board of Directors to stockholders for election as directors at each
annual meeting until the earlier of June 30, 2004 or the date on which Berjaya
owns less than nineteen percent (19%) of the outstanding shares of capital stock
of the Company on a fully-diluted basis.
If any nominee becomes unavailable for any reason before the election, the
enclosed proxy will be voted for the election of such substitute nominee or
nominees, if any, as shall be designated by the Board of Directors. The Board of
Directors has no reason to believe that any of the nominees will be unavailable
to serve.
The affirmative vote of a plurality of the shares of the Company's Common
Stock present or represented and voting at the Annual Meeting of Stockholders
will be required to elect Management's five (5) nominee directors. Under
applicable Delaware law, a broker non-vote will have no effect on the outcome of
the election of directors. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
THE STOCKHOLDERS VOTE FOR THE ELECTION OF MANAGEMENT'S FIVE NOMINEE DIRECTORS
NAMED BELOW. Proxies solicited by Management will be voted FOR the election of
Management's five (5) nominee directors.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- --------------------------------------- --- ------------------------------------------------------------------
<S> <C> <C>
Emil Youssefzadeh...................... 43 Chief Executive Officer, President, Secretary and Director
Dennis W. Elliott...................... 55 Chairman of the Board of Directors and Director
Frank T. Connors....................... 62 Vice Chairman and Executive Vice President, and Director
Dianne C. Walker....................... 40 Director
Kim Poh Tan............................ 43 Director
</TABLE>
EMIL YOUSSEFZADEH is the founder of the Company. He has been a director of
the Company and has served as its President since he founded the Company in
January 1982, and has served as Chief Executive Officer from January 1982 to
June 1988 and since January 1991. From January 1979 until founding the Company,
Mr. Youssefzadeh was a satellite research engineer with Hughes Aircraft Company
where his projects included design of satellite communications systems and
satellite earth stations. He also was a member of the team responsible for
communications system engineering for the Intelsat-VI spacecraft.
DENNIS W. ELLIOTT has been a director of the Company since January 1985 and
since October 1993 has been Chairman of the Board of Directors. Mr. Elliott has
served as President of Elliott Communications, a consulting firm specializing in
telecommunication strategy and high technology ventures, since he founded it in
February 1990. From March 1989 to January 1990 and from March 1987 to March
1989, Mr. Elliott was Chief Executive Officer and President of Pacific Telecom
Cable, Inc., and Chief Executive Officer and President of National Gateway
Telecom, Inc., respectively, both subsidiaries of Pacific Telecom, Inc. From
June 1984 to March 1987, he served as Executive Vice President for Pacific
Telecom, Inc., and from January 1976 to June 1984, he served as Vice President,
Finance of RCA American Communications, a domestic satellite communications
carrier.
FRANK T. CONNORS has been a director of the Company since June 1988, and has
served as its Chairman of the Board of Directors from June 1988 to September
1993, and as its Chief Executive Officer from June 1988
2
<PAGE>
to January 1991. Since October 1, 1994, Mr. Connors is Vice Chairman and
Executive Vice President of the Company. From December 1982 to January 1988, Mr.
Connors was the Chief Executive Officer of Doelz Networks, a manufacturer of
packet switching equipment. From 1979 to 1981, Mr. Connors was Group Vice
President of Northern Telecom's Computer Systems Group. Mr. Connors is currently
Chairman of the Board of DISC, Inc. (NASDAQ NM : DCSR; DCSRW), an optical
computer storage manufacturing company located in northern California.
DIANNE C. WALKER has been a director of the Company since January 1985.
Since December 1994, Ms. Walker has served as an independent consultant. From
September 1992 to December 1994, Ms. Walker served as a consultant to Bear
Stearns & Co., Inc., a national investment banking firm. From January 1990 to
August 1992, Ms. Walker served as a consultant to Kidder, Peabody & Co., Inc., a
national investment banking firm. From January 1983 to October 1989, Ms. Walker
served in various positions with PacifiCorp, including Director, Mergers and
Acquisitions of Pacific Power & Light Co., a division of PacifiCorp, and Vice
President of Pacific Crest Capital, PacifiCorp's venture capital fund. Ms.
Walker serves as a director of Comdial Corporation, Microtest, Inc. and Arizona
Public Service Company.
KIM POH TAN has been a director of the Company since April 1994 and Group
Executive Director of Berjaya Group Berhad since August 1991. From June 1989 to
August 1991, Mr. Tan served as a Consultant and Advisor to IGB Corporate Berhad,
a Malaysian securities firm. From February 1977 to May 1989, Mr. Tan served as
General Manager of Banking and Corporation Services of D & C Sakura Merchant
Bankers Berhad, a Malaysian merchant banking firm. Mr. Tan presently serves as a
director of Berjaya Group Berhad, a Malaysian company, which is a strategic
partner of, and investor in, the Company.
OTHER EXECUTIVE OFFICERS
MICHAEL LINDSAY, 39, has been Chief Operating Officer of the Company since
July 1994. From January 1993 to March 1994, Mr. Lindsay served as Chief
Operating Officer of Numedia Corporation, a software developer. From September
1988 to October 1992, Mr. Lindsay held various officer positions, including
President, Executive Vice President and Vice President-Finance and Operations,
at Dowty Communications, Inc., a company specializing in data communications.
PRESTON ROMM, 42, has been Vice President-Finance and Chief Financial
Officer of the Company since November 1994. From May 1992 to November 1994, Mr.
Romm was Corporate Controller, Vice President and Chief Accounting Officer for
MTI Technology, Inc., a supplier of data storage systems. From November 1989 to
May 1992, Mr. Romm held various officer positions, including Controller and Vice
President-Finance and Chief Financial Officer, at CPG International, Inc., a
supplier of architectural and engineering supplies.
BOARD MEETINGS
The Board of Directors of the Company held five (5) meetings during the
fiscal year ended December 31, 1995. Except for Kim Poh Tan, each incumbent
Director attended at least seventy-five percent (75%) of the aggregate of the
number of meetings of the Board and the number of meetings held by all
committees of the Board on which he or she served. There are no family
relationships among any of the directors or executive officers of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit Committee and a Compensation and Stock
Option Committee. The Audit Committee is presently comprised of three (3)
directors selected by the Board of Directors of the Company. The members of the
Audit Committee are Kim Poh Tan, Dennis W. Elliott and Frank T. Connors. The
Audit Committee is authorized to handle all matters which it deems appropriate
regarding the Company's independent accountants and to otherwise communicate and
act upon matters relating to the review and audit of the Company's books and
records, including the scope of the annual audit and the accounting methods and
systems to be utilized by the Company. In addition, the Audit Committee also
makes recommendations to the Board of Directors with
3
<PAGE>
respect to the selection of the Company's independent accountants. The Audit
Committee held three (3) meetings during the fiscal year ended December 31,
1995.
The Compensation and Stock Option Committee is presently comprised of three
(3) directors selected by the Board of Directors of the Company. The members of
the Compensation and Stock Option Committee are Kim Poh Tan, Dennis W. Elliott
and Dianne C. Walker. The functions of the Compensation and Stock Option
committee include advising the Board of Directors on officer and employee
compensation and administering the Company's stock option plans. The Board of
Directors, based on input from the Compensation and Stock Option Committee,
establishes the annual compensation rates for the Company's executive officers.
The Compensation and Stock Option Committee held four (4) meetings during the
fiscal year ended December 31, 1995.
The Company does not have a nominating committee. Instead, the Board of
Directors, as a whole, identifies and screens candidates for membership on the
Company's Board of Directors.
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth compensation received for the fiscal year
ended December 31, 1995, by the Company's Chief Executive Officer, and the other
executive officers whose salary and bonus exceeded $100,000 for fiscal year 1995
(collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION(1) -------------
------------------------------ SECURITIES
OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) COMPENSATION($)(2) OPTIONS (#)
- ----------------------------------------------------------- --------- --------- ------------------- -------------
<S> <C> <C> <C> <C>
1995 222,883 33,000 --
Emil Youssefzadeh ......................................... 1994 195,000 27,800 --
President and Chief Executive Officer 1993 206,661 -- --
1995 150,000 -- 5,000
Frank Connors (1) ......................................... 1994 31,730 -- --
Executive VP and Vice Chairman 1993 -- -- --
1995 143,554 -- --
Michael Lindsay (1) ....................................... 1994 58,154 -- 100,000
Chief Operating Officer 1993 -- -- --
1995 118,377 -- --
Preston Romm (1) .......................................... 1994 6,808 -- 25,000
VP Finance and Chief Financial Officer 1993 -- -- --
</TABLE>
- ------------------------
(1) The employment of Mr. Connors, Mr. Lindsay and Mr. Romm commenced in October
1994, July 1994 and November 1994, respectively.
(2) During 1995, amounts represent $33,020 of automobile allowance and expenses
paid by the Company for the benefit of the Chief Executive Officer. During
1994, amounts represent $15,612 of insurance premiums and $12,188 of
automobile allowance paid by the Company for the benefit of the Chief
Executive Officer. Prior to 1994, amounts paid for automobile allowance by
the Company were included in total salary.
4
<PAGE>
The following table sets forth information concerning individual grants of
stock options made during the fiscal year ended December 31, 1995, to each of
the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
PERCENT STOCK
NUMBER OF OF TOTAL PRICE APPRECIATION
SECURITIES OPTIONS EXERCISE FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM (3)
OPTIONS EMPLOYEES IN PRICE EXPIRATION --------------------
NAME GRANTED (#) FISCAL YEAR (1) ($/SH) DATE (2) 5%($) 10%($)
- -------------------------------------------- ------------- ----------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Emil Youssefzadeh -- -- -- -- -- --
Frank Connors 5,000 1.6 9.875 9/30/04 31,051 76,691
Michael Lindsay -- -- -- -- -- --
Preston Romm -- -- -- -- -- --
</TABLE>
- ------------------------
(1) Options to purchase an aggregate of 305,175 shares of Common Stock were
granted to employees, including the Named Executive Officer, during the year
ended December 31, 1995.
(2) The Option granted has a term of ten years, subject to earlier
termination on certain events related to termination of employment or service to
the Company.
(3) The potential realizable value is calculated based on the term of the
option at its time of grant (10 years). It is calculated by assuming that the
stock price appreciates at the indicated annual rate compounded annually for the
entire term of the option and that the option is exercised and sold on the last
day of its term for the appreciated stock price. No gain to the option holder is
possible unless the stock price increases over the option term.
5
<PAGE>
The following table sets forth information concerning exercises of stock
options made during the fiscal year ended December 31, 1995, by each of the
Named Executive Officers and the year-end value of unexercised options:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SECURITIES UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT FISCAL
SHARES VALUE AT FISCAL YEAR-END (#) END($)(1)
ACQUIRED ON REALIZED -------------------------- --------------------------
NAME EXERCISE # ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Emil Youssefzadeh -- -- -- -- -- --
Frank Connors -- -- 5,000 -- 46,875 --
Michael Lindsay -- -- 20,000 80,000 240,000 960,000
Preston Romm -- -- 5,000 20,000 40,000 160,000
</TABLE>
- ------------------------
(1) Value is based on fair market value of Common Stock as of December 31,
1995 stock market close minus the exercise price or base price of "in-the-money"
options. The closing sales price for the Company's Common Stock as of December
31, 1995 on the Nasdaq National Market was $19.25.
DIRECTOR'S FEES
As Chairman of the Board of Directors, Mr. Elliott receives an annual
retainer of $48,000, and each of the remaining non-employee directors receives
an annual retainer of $15,000 for services rendered in his or her capacity as a
director of the Company. Accordingly, during fiscal year 1995, Mr. Elliott
received $48,000 and Ms. Walker received $15,000 for their services as
non-employee directors of the Company. The Company's outside directors, were
also reimbursed for their expenses incurred for meetings of the Board of
Directors which they attended.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon its review of the copies of reports furnished to the
Company, or written representations that no annual Form 5 reports were required,
the Company believes that all filing requirements under Section 16(a) of the
Securities Exchange Act of 1934, as amended, applicable to its directors,
officers and any persons holding ten percent (10%) or more of the Company's
Common Stock with respect to the Company's fiscal year ended December 31, 1995
were satisfied.
6
<PAGE>
PRINCIPAL STOCKHOLDERS
Set forth below is certain information as of the Record Date regarding the
beneficial ownership of the Company's Common Stock by (i) any person who was
known by the Company to own more than five percent (5%) of the voting securities
of the Company, (ii) all directors and nominees, (iii) each of the Named
Executive Officers identified in the Summary Compensation Table, and (iv) all
current directors and executive officers as a group. Except as otherwise
indicated, the Company believes, based on information furnished by such owners,
that the beneficial owners of the Company's Common Stock listed below have sole
investment and voting power with respect to such shares, subject to applicable
community property laws.
<TABLE>
<CAPTION>
AMOUNT AND
FIVE PERCENT STOCKHOLDERS, NATURE OF
DIRECTORS, NAMED EXECUTIVE OFFICERS AND BENEFICIAL PERCENT
DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP OWNERSHIP OF CLASS
- ------------------------------------------------------------------------------------ ------------------ ------------
<S> <C> <C>
Emil Youssefzadeh .................................................................. 1,346,237(1) 23.0%
c/o STM Wireless, Inc.
One Mauchly
Irvine, California 92618
Berjaya Group (Cayman), Ltd.(2) .................................................... 1,221,294 20.9%
Level 17, Shahzan Prudential Tower
30 Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
Kim Poh Tan(3) ..................................................................... 1,231,294 21.0%
c/o Berjaya Group (Cayman), Ltd.
Level 17, Shahzan Prudential Tower
30 Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
Frank T. Connors (4)................................................................ 188,080 3.2%
Dianne C. Walker (5)................................................................ 28,308 *
Dennis W. Elliott (6)............................................................... 26,308 *
Michael Lindsay (7)................................................................. 40,000 *
Preston Romm (8).................................................................... 10,000 *
All Directors and Executive Officers as a group (7 persons)(1)(3)................... 2,870,227 48.3%
</TABLE>
- ------------------------
* Less than 1%.
(1) Includes 263,991 and 259,011 shares held by Kamil Youssefzadeh and Shafigh
Youssefzadeh, respectively, who are brothers of Emil Youssefzadeh, for which
Emil Youssefzadeh has voting rights. Accordingly, Emil Youssefzadeh is
deemed to share beneficial ownership of these shares.
(2) According to a report filed with the Securities and Exchange Commission,
Berjaya Group (Cayman), Ltd. ("Berjaya Cayman") is a wholly-owned subsidiary
of, and is controlled by, Berjaya Group Berhad ("Berjaya"), a Malaysian
corporation, whose principal offices are located at Level 17, Shahzan
Prudential Tower, 30 Jalan Sultan Ismail, 50250 Kuala Lumpur, Malaysia.
Accordingly, Berjaya may be deemed to beneficially own such shares. However,
Berjaya disclaims such beneficial ownership pursuant to Rule 13d-4 under the
Securities Exchange Act of 1934, as amended.
7
<PAGE>
(3) Consists of shares held by Berjaya Cayman. Mr. Tan is Group Executive
Director of Berjaya, and accordingly, may be deemed to beneficially own such
shares. However, Mr. Tan disclaims such beneficial ownership pursuant to
Rule 13d-4 under the Securities Act of 1934, as amended. Further, includes
10,000 shares issuable upon exercise of stock options exercisable within 60
days of the Record Date.
(4) Includes 5,000 shares issuable upon exercise of stock options exercisable
within 60 days of the Record Date.
(5) Includes 15,000 shares issuable upon exercise of stock options exercisable
within 60 days of the Record Date.
(6) Includes 15,000 shares issuable upon exercise of stock options exercisable
within 60 days of the Record Date.
(7) Includes 40,000 shares issuable upon exercise of stock options exercisable
within 60 days of the Record Date.
(8) Includes 10,000 shares issuable upon exercise of stock options exercisable
within 60 days of the Record Date.
8
<PAGE>
REPORT OF THE BOARD OF DIRECTORS
The following report is submitted by the Board of Directors with respect to
the executive compensation policies established by the Board of Directors and
compensation paid or awarded to executive officers for the fiscal year ended
December 31, 1995.
COMPENSATION POLICIES AND OBJECTIVES
In establishing and evaluating the effectiveness of compensation programs
for executive officers, as well as other employees of the Company, the Board of
Directors is guided by three basic principles:
- The Company must offer competitive salaries to be able to attract and
retain highly-qualified and experienced executives and other management
personnel.
- Annual executive compensation in excess of base salaries should be tied to
individual and Company performance.
- The financial interests of the Company's executive officers should be
aligned with the financial interests of the stockholders, primarily
through stock option grants which reward executives for improvements in
the market performance of the Company's Common Stock.
SALARIES AND EMPLOYEE BENEFITS PROGRAMS. In order to retain executives and
other key employees, and to be able to attract additional well-qualified
executives when the need arises, the Company strives to offer salaries, and
health care and other employee benefit programs, to its executives and other key
employees that are comparable to those offered to persons with similar skills
and responsibilities by competing businesses in the local geographic area.
In recommending salaries for executive officers, the Board of Directors (i)
reviews the historical performance of the executives and (ii) informally reviews
available information, including information published in secondary sources,
regarding prevailing salaries and compensation programs offered by competing
businesses that are comparable to the Company in terms of size, revenue,
financial performance and industry group. Many, though not all, of these
competing businesses, that have securities which are publicly traded, are
included in the S&P Communication - Equipment Manufacturer Index used in the
Stock Performance Graph on page 11 of this Proxy Statement. Another factor which
is considered in recommending salaries of executive officers is the cost of
living in Southern California where the Company is headquartered, as such cost
generally is higher than in other parts of the country.
In order to retain qualified management personnel, the Company has followed
the practice of seeking to promote executives from within the Company whenever
practicable. The Board of Directors believes that this policy enhances employee
morale and provides continuity of management. Typically, modest salary increases
are made in conjunction with such promotions.
PERFORMANCE-BASED COMPENSATION. The Board of Directors believes that the
motivation of executives and key employees increases as the market value of the
Company's Common Stock increases. Nevertheless, the Company provides a merit
bonus in cash or stock options to executives and key employees which is
dependent on the Company's achievements and the direct contributions made by
each executive and other key employees. Accordingly, at the beginning of each
fiscal year, the Company establishes short term and long term plans, and at the
end of the fiscal year, the collective and individual contributions of the
executives to the Company's achievements are evaluated. Cash bonuses are awarded
if the Company achieves or exceeds the earnings goal established for the fiscal
year and are limited to amounts ranging from five percent (5%) to fifty percent
(50%) of an executive's base salary.
The earnings goal is established on the basis of the annual operating plan
developed by management and approved by the Board of Directors. The annual
operating plan, which is designed to maximize profitability within
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the constraints of economic and competitive conditions, some of which are
outside the control of the Company, is developed on the basis of (i) the
Company's performance for the prior fiscal year; (ii) estimates of sales revenue
for the plan year based upon recent market conditions, trends and competition
and other factors which, based on historical experience, are expected to affect
the level of sales that can be achieved; (iii) historical operating costs and
cost savings that management believes can be realized; (iv) competitive
conditions faced by the Company; and (v) additional expenditures beyond prior
fiscal years in expansion or research and development toward growth of the
Company's business in future fiscal years. By taking all of these factors into
account, including market conditions, the earnings goal in the annual operating
plan is determined.
In certain instances, bonuses are awarded not only on the basis of the
Company's overall profitability, but also on the achievement by an executive of
specific objectives within his or her area of responsibility. For example, a
bonus may be awarded for any executive's efforts in achieving greater than
anticipated cost savings, or completing a new product on target.
As a result of this performance-based merit bonus program, executive
compensation, and the proportion of each executive's total cash compensation
that is represented by incentive or bonus income, may increase in those years in
which the Company's profitability increases.
STOCK OPTIONS AND EQUITY-BASED PROGRAMS. In order to align the financial
interests of executive officers and other key employees with those of the
stockholders, the Company grants stock options to its executive officers and
other key employees on a periodic basis, taking into account the size and terms
of previous grants of equity-based compensation and stock holdings in
determining awards. Stock option grants, in particular, reward executive
officers and other key employees for performance that results in increases in
the market price of the Company's Common Stock, which directly benefit all
stockholders. Moreover, the Board of Directors generally has followed the
practice of granting options on terms which provide that the options become
exercisable in cumulative annual installments, generally over a three to
five-year period. The Board of Directors believes that this feature of the
option grants not only provides an incentive for executive officers to remain in
the employ of the Company, but also makes longer term growth in share prices
important for the executives who receive stock options.
FISCAL YEAR 1995 COMPENSATION
The salary of the Chief Executive Officer increased slightly over the salary
paid in fiscal 1994 as a result of cost of living increases, and since the
Company did not meet the earnings goals established for the year, no bonus
payments were made to the Chief Executive Officer or other members of senior
management for the year ended December 31, 1995.
Emil Youssefzadeh
Frank T. Connors
Dianne C. Walker
Dennis W. Elliott
Kim Poh Tan
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THE COMPANY'S PREVIOUS
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE FILINGS, INCLUDING THIS
PROXY STATEMENT, IN WHOLE OR IN PART, THE FOREGOING REPORT AND THE PERFORMANCE
GRAPH ON PAGE 11 SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the year ended December 31, 1995, the Company's Board of Directors
established the levels of compensation for the Company's executive officers.
Emil Youssefzadeh, a director and the President and Chief Executive Officer of
the Company, and Frank Connors, the Vice Chairman and the Executive Vice
President of the Company participated in the deliberations of the Board
regarding executive compensation, but did not participate in proceedings or
decisions of the Board of Directors regarding their compensation.
10
<PAGE>
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative stockholder return
on the Company's Common Stock with the cumulative total return of the S&P
Communications -Equipment/Manufacturer Index and the NASDAQ Stock Market - US
Index for the period that commenced March 25, 1992 (the date on which the
Company's Common Stock was first registered under the Securities Exchange Act of
1934, as amended) and ended on December 31, 1995. The graph assumes that all
dividends have been reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG STM WIRELESS, INC.,
THE S&P COMMUNICATION -- EQUIPMENT/MANUFACTURER INDEX
AND THE NASDAQ STOCK MARKET -- US INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STM WIRELESS, INC. NASDAQ STOCK MARKET- S&P COMMUNICATION-
<S> <C> <C> <C>
US Index Equipment/Manufacturer Index
3/92 100 100 100
12/92 107 107 101
12/93 70 123 97
12/94 146 121 110
12/95 190 171 165
</TABLE>
11
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PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has selected KPMG Peat Marwick LLP, independent
auditors, to audit the financial statements of the Company for the fiscal year
ending December 31, 1996, and recommends that stockholders vote for ratification
of such appointment. In the event of a negative vote on such ratification, the
Board of Directors will reconsider its selection.
KPMG Peat Marwick LLP has audited the Company's financial statements
annually since fiscal year 1991. Its representatives are expected to be present
at the meeting with the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder desiring to submit a proposal for action at the 1997 Annual
Meeting of Stockholders and presentation in the Company's Proxy Statement with
respect to such meeting should arrange for such proposal to be delivered to the
Company at its principal place of business no later than December 31, 1996 in
order to be considered for inclusion in the Company's proxy statement relating
to that meeting. Matters pertaining to such proposals, including the number and
length thereof, eligibility of persons entitled to have such proposals included
and other aspects are regulated by the Securities Exchange Act of 1934, as
amended, Rules and Regulations of the Securities and Exchange Commission and
other laws and regulations to which interested persons should refer.
OTHER MATTERS
Management is not aware of any other matters to come before the meeting. If
any other matter not mentioned in this Proxy Statement is brought before the
meeting, the proxy holders named in the enclosed Proxy will have discretionary
authority to vote all proxies with respect thereto in accordance with their
judgment.
By Order of the Board of Directors
/s/ EMIL YOUSSEFZADEH
--------------------------------------
Emil Youssefzadeh
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
SECRETARY
September 24, 1996
The Annual Report to Stockholders of the Company for the fiscal year ended
December 31, 1995 is being mailed concurrently with this Proxy Statement to all
stockholders of record as of September 18, 1996. The Annual Report is not to be
regarded as proxy soliciting material or as a communication by means of which
any solicitation is to be made.
COPIES OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 WILL BE
PROVIDED TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST TO THE SECRETARY,
STM WIRELESS, INC.
12
<PAGE>
PROXY STM WIRELESS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF THE STOCKHOLDERS
OCTOBER 25, 1996
The undersigned hereby nominates, constitutes and appoints Emil Youssefzadeh
and Michael Lindsay, and each of them individually, the attorney, agent and
proxy of the undersigned, with full power of substitution, to vote all stock of
STM WIRELESS, INC., which the undersigned is entitled to represent and vote at
the 1996 Annual Meeting of Stockholders of the Company to be held at the Sutton
Place Hotel, 4500 MacArthur Boulevard, Newport Beach, California on October 25,
1996, at 10:00 A.M., and at any and all adjournments or postponements thereof,
as fully as if the undersigned were present and voting at the meeting, as
follows:
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 AND 2
<TABLE>
<S> <C>
1. Election of Directors
/ / FOR / / WITHHOLD AUTHORITY
all nominees listed below (except to vote for all nominees listed below
as marked to the contrary below)
</TABLE>
Election of the following nominees as directors: Emil Youssefzadeh, Frank T.
Connors,
Dianne C. Walker, Dennis W. Elliott and Kim Poh Tan.
(INSTRUCTIONS: To withhold authority to vote for any nominee, print that
nominee's name in the space provided below.)
- --------------------------------------------------------------------------------
2. Ratification of KPMG Peat Marwick LLP as independent
auditors: / / FOR / / AGAINST / / ABSTAIN
3. In their discretion, on such other business as may properly come before the
meeting or any adjournment thereof.
IMPORTANT--PLEASE SIGN AND DATE ON OTHER SIDE AND RETURN PROMPTLY
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER ON THE REVERSE SIDE. WHERE NO DIRECTION IS GIVEN, SUCH SHARES WILL
BE VOTED "FOR" THE ELECTION OF THE DIRECTORS NAMED ON THE REVERSE SIDE OF THIS
PROXY, AND "FOR" RATIFICATION OF KPMG PEAT MARWICK LLP AS INDEPENDENT AUDITORS.
THIS PROXY CONFERS DISCRETIONARY AUTHORITY TO CUMULATE VOTES FOR ANY AND ALL OF
THE NOMINEES FOR ELECTION OF DIRECTORS FOR WHICH AUTHORITY TO VOTE HAS NOT BEEN
WITHHELD.
DATED: ____________________ , 1996
__________________________________
(Signature of stockholder)
Please sign your name exactly as
it appears. Executors,
administrators, guardians,
officers of corporations and
others signing in a fiduciary
capacity should state their full
titles as such.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN
AND RETURN THIS PROXY, WHICH MAY BE REVOKED AT ANY TIME PRIOR TO ITS USE.
