<PAGE> 1
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
Metricom, Inc.
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(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)
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(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:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
/X/ 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:
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2. Form, Schedule or Registration Statement No.:
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4. Date Filed:
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<PAGE> 2
METRICOM, INC.
980 UNIVERSITY AVENUE
LOS GATOS, CALIFORNIA 95030-2375
------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
------------------------
TO BE HELD ON AUGUST 7, 1996
TO THE STOCKHOLDERS OF METRICOM, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Metricom,
Inc., a Delaware corporation (the "Company"), will be held on Wednesday, August
7, 1996 at 9:00 a.m. local time at the Company's offices at 980 University
Avenue, Los Gatos, California for the following purposes:
1. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the authorized number of shares of Common
Stock from 20,000,000 to 50,000,000.
2. To approve an amendment to the Company's 1993 Non-Employee Directors'
Stock Option Plan, as amended to permit additional non-discretionary
grants of options to non-employee directors.
The Board of Directors has fixed the close of business on June 17, 1996 as
the record date for the determination of stockholders entitled to notice of and
to vote at this Special Meeting and at any adjournment or postponement thereof.
By Order of the Board of Directors
WILLIAM D. SWAIN
Secretary
Los Gatos, California
June 26, 1996
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE> 3
METRICOM, INC.
980 UNIVERSITY AVENUE
LOS GATOS, CALIFORNIA 95030-2375
------------------------
PROXY STATEMENT
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors (the
"Board") of Metricom, Inc., a Delaware corporation (the "Company"), for use at
the Special Meeting of Stockholders to be held on August 7, 1996, at 9:00 a.m.
local time (the "Special Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Special Meeting. The Special Meeting will be held at the Company's offices at
980 University Avenue, Los Gatos, California. The Company intends to mail this
proxy statement and accompanying proxy card on or about June 26, 1996 to all
stockholders entitled to vote at the Special Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of Common Stock beneficially owned by
others to forward to such beneficial owners. The Company may reimburse persons
representing beneficial owners of Common Stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or other employees of the Company or, at the
Company's request, Corporate Investor Communications. No additional compensation
will be paid to directors, officers or other employees for such services, but
Corporate Investor Communications will be paid its customary fee, estimated to
be about $4,000 if it renders solicitation services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on June 17,
1996 will be entitled to notice of and to vote at the Special Meeting. At the
close of business on June 17, 1996, the Company had outstanding and entitled to
vote 13,388,007 shares of Common Stock. Each holder of record of Common Stock on
such date will be entitled to one vote for each share held on all matters to be
voted upon at the Special Meeting.
All votes will be tabulated by the inspector of elections appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. With regard to Proposal 1, abstentions and
broker non-votes will have the same effect as negative votes. With regard to
Proposal 2, abstentions will be counted towards the tabulation of votes cast on
proposals presented to the stockholders and will have the same effect as
negative votes. Broker non-votes will be counted towards a quorum, but will not
be counted for any purpose in determining whether a matter has been approved.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 980
University Avenue, Los Gatos, California 95030-2375, a written notice of
revocation or a duly executed proxy bearing a later date, or it may be revoked
by attending the meeting and voting in person. Attendance at the meeting will
not, by itself, revoke a proxy.
1
<PAGE> 4
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's 1997 Annual Meeting of Stockholders must be received by the Company
not later than December 26, 1996 in order to be included in the proxy statement
and proxy relating to that Annual Meeting.
PROPOSAL 1
APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board has adopted, subject to stockholder approval, an amendment to the
Company's Restated Certificate of Incorporation to increase the Company's
authorized number of shares of Common Stock from 20,000,000 to 50,000,000.
The additional Common Stock to be authorized by adoption of the amendment
would have rights identical to the currently outstanding Common Stock of the
Company. Adoption of the proposed amendment and issuance of the Common Stock
would not affect the rights of the holders of currently outstanding Common Stock
of the Company, except for effects incidental to increasing the number of shares
of the Company's Common Stock outstanding, such as dilution of the earnings per
share and voting rights of current holders of Common Stock. If the amendment is
adopted, it will become effective upon filing of a Certificate of Amendment of
the Company's Restated Certificate of Incorporation with the Secretary of State
of the State of Delaware.
In addition to the 13,354,591 shares of Common Stock outstanding at May 31,
1996, the Board had reserved 3,918,889 shares for issuance upon exercise of
options and rights granted under the Company's stock option and stock purchase
plans, and up to approximately 394,295 shares of Common Stock that may be issued
upon exercise of warrants outstanding.
Although at present the Board has no plans to issue the additional shares
of Common Stock, it desires to have such shares available to provide additional
flexibility to use its capital stock for business and financial purposes in the
future. The additional shares may be used, without further stockholder approval,
for various purposes including, without limitation, raising additional capital,
providing equity incentives to employees, officers or directors, establishing
strategic relationships with other companies and expanding the Company's
business or product lines through the acquisition of other businesses or
products.
The additional shares of Common Stock that would become available for
issuance if the proposal were adopted could also be used by the Company to
oppose a hostile takeover attempt or delay or prevent changes in control or
management of the Company. For example, without further stockholder approval,
the Board could adopt a "poison pill" that would, under certain circumstances
related to an acquisition of shares not approved by the Board of Directors, give
certain holders the right to acquire additional shares of Common Stock at a low
price, or the Board could strategically sell shares of Common Stock in a private
transaction to purchasers who would oppose a takeover or favor the current
Board. Although this proposal to increase the authorized Common Stock has been
prompted by business and financial considerations and not by the threat of any
hostile takeover attempt (nor is the Board currently aware of any such attempts
directed at the Company), nevertheless, stockholders should be aware that
approval of this proposal could facilitate future efforts by the Company to
deter or prevent changes in control of the Company, including transactions in
which the stockholders might otherwise receive a premium for their shares over
then current market prices.
The affirmative vote of the holders of a majority of the shares of Common
Stock will be required to approve this amendment to the Company's Restated
Certificate of Incorporation. As a result, abstentions and broker non-votes will
have the same effect as negative votes.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 1
2
<PAGE> 5
PROPOSAL 2
APPROVAL OF THE 1993 NON-EMPLOYEE DIRECTORS'
STOCK OPTION PLAN, AS AMENDED
In February 1993, the Board adopted, and the stockholders subsequently
approved, the 1993 Non-Employee Directors' Stock Option Plan (the "Directors'
Plan"). In January 1995, the Board adopted, and the stockholders subsequently
approved, an amendment to the Directors' Plan to increase the number of shares
authorized for issuance under the Directors' Plan from 200,000 to 300,000
shares. In June 1996, the Board adopted an amendment to the Directors' Plan to
provide for non-discretionary grants of nonstatutory stock options to purchase
7,000 shares of Common Stock on January 1 of each year to each non-employee
director who has been a non-employee director for at least three months prior to
such date. The Board adopted this amendment to facilitate the Company's goal of
attracting additional non-employee directors.
As of May 31, 1996, options covering an aggregate of 140,000 shares of the
Company's Common Stock had been granted under the Directors' Plan, of which
options to purchase 112,000 shares were outstanding, with exercise prices
ranging from $6.1875 to $23.37. As of May 31, 1996, a total of 14,000 shares had
been exercised under the Directors' Plan. As of May 31, 1996, 174,000 shares
remained available for future grants under the Directors' Plan.
Stockholders are requested in this Proposal 2 to approve the Directors'
Plan, as amended to permit additional non-discretionary grants of options to
non-employee directors. The affirmative vote of the holders of a majority of the
shares present in person or represented by proxy and entitled to vote at the
meeting will be required to approve the Directors' Plan, as amended.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2
The essential features of the Directors' Plan are outlined below:
GENERAL
The Directors' Plan, and the right of non-employee directors to receive
options and purchase stock thereunder, is intended to qualify as a formula award
plan having "disinterested administration" as promulgated under Rule 16b-3 of
the Exchange Act ("Rule 16b-3"). The Directors' Plan provides for non-
discretionary grants of nonstatutory stock options. Options granted under the
Directors' Plan are not intended to qualify as incentive stock options, as
defined under Section 422 of the Code. See "Federal Income Tax Information"
below for a discussion of the tax treatment of nonstatutory stock options.
The purpose of the Directors' Plan is to retain the services of persons now
serving as non-employee directors of the Company, to attract and retain the
services of persons capable of serving on the Board of Directors of the Company
and to provide incentives for such persons to exert maximum efforts to promote
the success of the Company.
ADMINISTRATION
The Directors' Plan is administered by the Board of Directors of the
Company. The Board of Directors has the final power to construe and interpret
the Directors' Plan and options granted under it, and to establish, amend and
revoke rules and regulations for its administration.
The Board of Directors is authorized to delegate administration of the
Directors' Plan to a committee of not less than two members of the Board. The
Board of Directors does not presently contemplate delegating administration of
the Directors' Plan to any committee of the Board of Directors.
3
<PAGE> 6
ELIGIBILITY
The Directors' Plan provides that options may be granted only to
non-employee directors of the Company. A "non-employee director" is defined in
the Directors' Plan as a director of the Company and its affiliates who is not
otherwise an employee of the Company or any affiliate. Six of the Company's
eight current directors (all except Messrs. Dilworth and Smelick) are eligible
to participate in the Directors' Plan.
TERMS OF OPTIONS
Each option under the Directors' Plan is subject to the following terms and
conditions:
Non-Discretionary Grants. Option grants under the Directors' Plan are
non-discretionary. On the date the Board approved the Directors' Plan, February
9, 1993, each non-employee director received an option to purchase 7,000 shares
of Common Stock of the Company. On January 1, 1994 and January 1, 1995, each
such non-employee director received an option to purchase an additional 7,000
shares of Common Stock of the Company. In addition, each person who became a
non-employee director of the Company after the adoption of the Directors' Plan
received, (a) upon the date of initial election and (b) after such non-employee
director had been a non-employee director for at least three months, on January
1 of the next two years, an option to purchase 7,000 shares of Common Stock of
the Company. Subject to stockholder approval as requested in this Proposal 2,
without further action by the Company, the Board or the stockholders of the
Company, (i) each person who becomes a non-employee director of the Company will
receive an option to purchase 7,000 shares of Common Stock upon the date of
initial election, and (ii) on January 1 of each year, each member of the Board
who has continuously served as a non-employee director for at least three months
prior to such date will automatically be granted an option to purchase 7,000
shares of Common Stock of the Company.
Option Exercise. An option granted under the Directors' Plan becomes
exercisable in three equal installments beginning on the first anniversary of
the grant of the option. Such vesting is conditioned upon continued service as a
director, employee or consultant of the Company.
Exercise Price; Payment. The exercise price of options granted under the
Directors' Plan shall be equal to 100% of the fair market value of the Common
Stock subject to such options on the date such option is granted. The exercise
price of options granted under the Directors' Plan must be paid in cash at the
time the option is exercised.
Transferability; Term. Under the Directors' Plan, an option may not be
transferred by the optionee, except by will or the laws of descent and
distribution. During the lifetime of an optionee, an option may be exercised
only by the optionee or his or her guardian or legal representative.
No option granted under the Directors' Plan is exercisable by any person
after the expiration of 10 years from the date the option is granted.
Other Provisions. The option agreement may contain such other terms,
provisions and conditions not inconsistent with the Directors' Plan as may be
determined by the Board.
ADJUSTMENT PROVISIONS
If there is any change in the stock subject to the Directors' Plan or
subject to any option granted under the Directors' Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or otherwise), the
Directors' Plan and options outstanding thereunder will be appropriately
adjusted as to the class and the maximum number of shares subject to the plan
and the class, number of shares and price per share of stock subject to
outstanding options.
EFFECT OF CERTAIN CORPORATE EVENTS
In the event of a dissolution or liquidation of the Company or a specified
type of merger or other corporate reorganization, to the extent permitted by
law, the vesting of any outstanding options under the Directors' Plan shall
accelerate and the options terminate if unexercised prior to the occurrence of
the event.
4
<PAGE> 7
DURATION, AMENDMENT AND TERMINATION
The Board may amend, suspend or terminate the Directors' Plan at any time
or from time to time; provided, however, that the Board may not amend the
Directors' Plan with respect to the amount, price or timing of grants more often
than once every six months other than to comport with changes to the Code or
ERISA. No amendment will be effective unless approved by the stockholders of the
Company within twelve months before or after its adoption by the Board if the
amendment would: (a) increase the number of shares authorized for options under
the plan, (b) modify the requirements as to eligibility for participation in the
plan (to the extent such modification requires stockholder approval in order for
the plan to comply with the requirements of Rule 16b-3), or (c) modify the plan
in any other way if such modification requires stockholder approval in order for
the plan to meet the requirements of Rule 16b-3. Unless sooner terminated, the
Directors' Plan shall terminate in February 2003.
FEDERAL INCOME TAX INFORMATION
The following is only a summary of the effect of federal income taxation
upon the optionee and the Company with respect to the grant and exercise of
options under the Directors' Plan, does not purport to be complete, and does not
discuss the income tax laws of any state or foreign country in which an optionee
may reside.
Options granted under the Directors' Plan are nonstatutory options. There
are no tax consequences to the optionee or the Company by reason of the grant of
a nonstatutory stock option. Upon exercise of a nonstatutory stock option, the
optionee generally will recognize ordinary income for tax purposes measured by
the excess of the then fair market value of the shares over the option price.
Because the optionee is a director of the Company, under existing laws the date
of taxation (and the date of measurement of taxable ordinary income) may in some
instances be deferred unless the optionee files an election under Section 83(b)
of the Code. The filing of a Section 83(b) election with respect to the exercise
of an option may affect the time of taxation and the amount of income recognized
at each such time. At the time the optionee recognizes ordinary income due to
the exercise of the option, the Company will generally be entitled to a business
expense deduction equal to the taxable ordinary income realized by the optionee.
Upon resale of such shares by the optionee, any difference between the sales
price and the exercise price, to the extent not recognized as ordinary income as
provided above, generally will be treated as capital gain or loss, and will
qualify for long-term capital gain or loss treatment if the shares have been
held for at least one year.
5
<PAGE> 8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of May 31, 1996 by: (a) each director; (b) the
Chief Executive Officer and the Company's four most highly compensated executive
officers other than the Chief Executive Officer; (c) all executive officers and
directors of the Company as a group; and (d) all those known by the Company to
be beneficial owners of more than five percent of its outstanding Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP(1)
----------------------------
PERCENT
OF
NAME NUMBER OF SHARES TOTAL
- -------------------------------------------------------------------- ---------------- -------
<S> <C> <C>
Lindner Fund, Inc.(2)............................................... 2,204,500 16.5%
7711 Carondelet Avenue
P.O. Box 16900, St. Louis, MO 63105
Vulcan Ventures Incorporated........................................ 1,888,245 14.1%
13810 S.E. Eastgate Way, Suite 480
Bellevue, WA 98005-4442
Robert M. Smelick(3)................................................ 383,472 2.9%
c/o Sterling Payot, 222 Sutter Street, Eighth Floor
San Francisco, CA 94108
Cornelius C. Bond, Jr.(4)........................................... 24,648 *
Robert S. Cline(5).................................................. 19,499 *
Robert P. Dilworth(6)............................................... 163,218 1.2%
Gary M. Green(7).................................................... 145,290 1.1%
Justin Jaschke(8)................................................... 6,750 *
George W. Levert(9)................................................. 379,489 2.8%
LeRoy D. Nosbaum(10)................................................ 24,081 *
Donald Rumsfeld(11)................................................. 86,999 *
William D. Swain(12)................................................ 8,792 *
Donald F. Wood(13).................................................. 52,082 *
Jerry Yang.......................................................... -- *
Directors and executive officers as a group (11 persons)(14)........ 1,270,239 9.1%
</TABLE>
- ---------------
* Less than one percent.
(1) This table is based upon information supplied by directors, officers and
principal stockholders and Schedules 13D and 13G filed with the Securities
and Exchange Commission (the "SEC"). Unless otherwise indicated below, the
persons named in the table have sole voting and investment power with
respect to all shares beneficially owned by them, subject to community
property laws where applicable. For purposes of this table, shares held by
stockholders include any shares held as tenants in common or joint tenants
with spouses. Percentages are based on a total of 13,354,591 shares
outstanding on May 31, 1996 adjusted in accordance with the rules
promulgated by the SEC.
(2) Includes 1,316,500 shares held by Lindner Growth Fund and 888,000 shares
held by entities affiliated with Ryback Management Corporation. Ryback
Management Corporation has sole voting and dispositive power over the
shares held by Lindner Growth Fund. Ryback Management Corporation disclaims
beneficial ownership of the shares in which it has no pecuniary interest.
(3) Includes 170,872 shares held by Mr. Smelick individually and 555 shares
held by Sterling Payot Company. Includes 200,000 shares held by Sterling
Payot Capital, L.P. which are subject to an outstanding warrant exercisable
within 60 days of the date of this table. The Company retains the right to
repurchase certain shares underlying the warrant under certain
circumstances. Also includes 3,645 shares held by Sterling Payot
Management, Inc. Mr. Smelick is the Managing Director and sole stockholder
of Sterling Payot Management, Inc., the general partner of Sterling Payot
Capital, L.P. and a managing principal, director and stockholder of
Sterling Payot Company, a limited partner of Sterling Payot Capital, L.P.
Mr. Smelick disclaims beneficial ownership of these shares. Also includes
1,200 shares held by The Gillian Sterling Smelick Trust U/A/D 4/17/90,
Robert M. Smelick, Trustee, 1,200
6
<PAGE> 9
shares held by The Christopher P.M. Smelick Trust U/A/D 4/17/90, Robert M.
Smelick, Trustee, 1,200 shares held by The Alexandra McBride Smelick Trust
U/A/D 4/17/90, Robert M. Smelick, Trustee, 1,600 shares held by Mr. Smelick
as custodian for Alexandra Smelick under the UTMA, 1,600 shares held by Mr.
Smelick as custodian for Christopher Smelick under the UTMA and 1,600
shares held by Mr. Smelick as custodian for Gillian Smelick under the UTMA.
Mr. Smelick has the power to vote and control the disposition of the shares
held as trustee and custodian and therefore may be deemed to be a
beneficial owner of such shares.
(4) Includes 13,999 shares of Common Stock subject to options exercisable
within 60 days of the date of this table.
(5) Includes 19,499 shares of Common Stock subject to options exercisable
within 60 days of the date of this table.
(6) Includes 117,395 shares of Common Stock subject to options exercisable
within 60 days of the date of this table.
(7) Includes 142,854 shares of Common Stock subject to options exercisable
within 60 days of the date of this table.
(8) Includes 6,250 shares of Common Stock subject to options exercisable within
60 days of the date of this table.
(9) Includes 284,387 shares held by UVCC I and 81,103 shares subject to an
outstanding warrant held by UVCC I exercisable within 60 days of the date
of this table. Mr. Levert, a director of the Company, is Vice President and
Managing Director of Arete, which manages UVCC I. Mr. Levert shares voting
and investment powers with the other general partners of UVCC I and
disclaims beneficial ownership of the shares in which he has no pecuniary
interest. Also includes 13,999 shares of Common Stock subject to options
exercisable within 60 days of the date of this table.
(10) Includes 20,081 shares of Common Stock subject to options exercisable
within 60 days of the date of this table. Effective March 1996, Mr. Nosbaum
no longer is an executive officer of the Company.
(11) Includes 6,999 shares of Common Stock subject to options exercisable within
60 days of the date of this table.
(12) Includes 8,541 shares of Common Stock subject to options exercisable within
60 days of the date of this table.
(13) Includes 52,082 shares of Common Stock subject to options exercisable
within 60 days of the date of this table.
(14) Includes shares held by entities affiliated with certain officers and
directors as described in the footnotes above. Also includes 662,721 shares
of Common Stock subject to options and warrants exercisable within 60 days
of the date of this table.
7
<PAGE> 10
EXECUTIVE COMPENSATION
DIRECTOR COMPENSATION
Each non-employee director of the Company, except for Mr. Smelick, receives
an annual retainer of $6,000 and a per meeting fee of $1,000 (plus $250 for each
committee meeting attended by committee members). The members of the Board are
also eligible for reimbursement for their expenses incurred in connection with
attendance at Board and committee meetings in accordance with Company policy. In
fiscal 1995, the total compensation paid to non-employee directors as a group
was $51,000.
Each non-employee director of the Company also receives stock option grants
under the Directors' Plan. Only non-employee directors of the Company are
eligible to receive options under the Directors' Plan. Options granted under the
Directors' Plan are intended by the Company not to qualify as incentive stock
options under the Code.
Option grants under the Directors' Plan are non-discretionary. On the date
the Board approved the Directors' Plan, February 9, 1993, each non-employee
director received an option to purchase 7,000 shares of Common Stock of the
Company. On January 1, 1994 and January 1, 1995, each such non-employee director
received an option to purchase an additional 7,000 shares of Common Stock of the
Company. In addition, each person who became a non-employee director of the
Company after the adoption of the Directors' Plan received, (a) upon the date of
initial election and (b) after such non-employee director had been a non-
employee director for at least three months, on January 1 of the next two years,
an option to purchase 7,000 shares of Common Stock of the Company. Subject to
stockholder approval as requested in Proposal 2, without further action by the
Company, the Board or the stockholders of the Company, (i) each person who
becomes a non-employee director of the Company will receive an option to
purchase 7,000 shares of Common Stock upon the date of initial election, and
(ii) on January 1 of each year, each member of the Board who has continuously
served as a non-employee director for at least three months prior to such date
will automatically be granted an option to purchase 7,000 shares of Common Stock
of the Company. No other options may be granted at any time under the Directors'
Plan. The exercise price of options granted under the Directors' Plan is 100% of
the fair market value of the Common Stock subject to the option on the date of
the option grant. Options granted under the Directors' Plan may not be exercised
until the date upon which such optionee has provided one year of continuous
service as a non-employee director following the date of grant of such option,
whereupon such option will become exercisable as to one third of the option
shares and one third of the option shares will become exercisable each year
thereafter in accordance with its terms. The term of options granted under the
Directors' Plan is ten years. In the event of a merger of the Company with or
into another corporation or a consolidation, acquisition of assets or other
change-in-control transaction involving the Company, the vesting of each option
will accelerate and the option will terminate if not exercised prior to the
consummation of the transaction.
During the last fiscal year, the Company granted options covering 7,000
shares to each non-employee director other than Mr. Smelick at an exercise price
per share of $14.75. The fair market value of such Common Stock on the date of
grant was $14.75 per share (based on the closing sales price reported in the
National Market System for the date of grant). As of May 31, 1996, options to
purchase 14,000 shares of the Company's Common Stock had been exercised under
the Directors' Plan.
Directors who are employees of the Company do not receive separate
compensation for their services as directors.
8
<PAGE> 11
COMPENSATION OF EXECUTIVE OFFICERS
Summary of Compensation
The following table shows for fiscal 1995, 1994 and 1993, compensation
awarded or paid to, or earned by the Chief Executive Officer and each of the
four other most highly compensated executive officers as of the end of fiscal
1995 (the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
NAME AND --------------------- UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS COMPENSATION(1)
- --------------------------------- ---- -------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Robert P. Dilworth............... 1995 $255,766 $137,500 20,000 $ 7,735
President and Chief............ 1994 $231,532 $125,000 25,000 $ 6,341
Executive Officer.............. 1993 $200,000 $138,890 195,000 $ 3,379
William D. Swain................. 1995 $136,840 $ 22,500 10,000 $ 3,241
Chief Financial Officer........ 1994 $121,920 $ 18,500 10,000 $ 3,102
and Secretary.................. 1993 $112,514 $ 20,340 35,000 $ 2,809
Gary M. Green.................... 1995 $182,310 $ 58,200 12,000 $34,053
Executive Vice President....... 1994 $170,003 $ 43,500 14,000 $33,880
and Chief Operating Officer.... 1993 $159,627 $ 53,335 60,000 $33,379
LeRoy D. Nosbaum(2).............. 1995 $165,005 $ 20,000 12,000 $ 2,583
Executive Vice President,...... 1994 $153,470 $ 23,000 12,000 $ 2,583
Marketing...................... 1993 $139,388 $ 25,425 37,500 $ 2,427
Donald F. Wood(3)................ 1995 $167,313 $ 45,000 12,000 $ 1,989
Executive Vice President
Wireless Services Division
</TABLE>
- ---------------
(1) Includes the Company's matching payment of $1,000 for each executive officer
under its 401(k) plan. For fiscal 1993, includes payments for term life
insurance in the amounts of $2,379, $1,809, $2,379 and $1,427 for Messrs.
Dilworth, Swain, Green and Nosbaum, respectively, and loan principal
forgiveness in the amount of $30,000 for Mr. Green. For fiscal 1994,
includes payments for term life insurance in the amounts of $3,456, $2,102,
$2,880 and $1,583 for Messrs. Dilworth, Swain, Green and Nosbaum,
respectively, loan principal forgiveness in the amount of $30,000 for each
of Mr. Green and an automobile allowance of $1,885 for Mr. Dilworth. For
fiscal 1995, includes payments for term life insurance in the amounts of
$3,456, $2,241, $3,053, $1,583 and $989 for Messrs. Dilworth, Swain, Green,
Nosbaum and Wood, respectively, loan principal forgiveness in the amount of
$30,000 for Mr. Green and an automobile allowance of $3,279 for Mr.
Dilworth.
(2) Effective March 1996, Mr. Nosbaum no longer is an executive officer of the
Company.
(3) Mr. Wood became an officer of the Company in November 1994.
9
<PAGE> 12
COMPENSATION PURSUANT TO PLANS
Stock Option Grants
The following table sets forth for each of the Named Executive Officers
each grant of stock options made during fiscal 1995:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------- POTENTIAL REALIZABLE
PERCENT
OF TOTAL VALUE AT ASSUMED
NUMBER OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE OR FOR OPTION TERM(3)(4)
OPTIONS IN FISCAL BASE PRICE EXPIRATION ---------------------
NAME GRANTED(1) YEAR(2) PER SHARE(3) DATE 5% 10%
- --------------------------------------- ---------- ---------- ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Robert P. Dilworth..................... 20,000 3.3% $17.00 05/15/05 $213,824 $541,872
William D. Swain....................... 10,000 1.6% $17.00 05/15/05 $106,912 $270,936
Gary M. Green.......................... 12,000 1.9% $17.00 05/15/05 $128,295 $325,123
LeRoy D. Nosbaum....................... 12,000 1.9% $17.00 05/15/05 $128,295 $325,123
Donald F. Wood......................... 12,000 1.9% $17.00 05/15/05 $128,295 $325,123
</TABLE>
- ---------------
(1) Options granted under the Company's 1988 Plan typically vest 25% after one
year and approximately two percent per month thereafter, such that the
options are fully vested in four years. The options will fully vest upon a
change of control, as defined in the 1988 Plan, unless the acquiring company
assumes the options or substitutes similar options.
(2) Based on an aggregate of options covering 613,250 shares granted in fiscal
1995 under the 1988 Plan to employees of the Company, including the Named
Executive Officers.
(3) In January 1996, the Board approved the replacement of each outstanding
stock option with a per share exercise price of $15.00 or greater, upon the
timely request of the optionee, with a stock option having an exercise price
of $13.125 per share and certain extended vesting terms (the "Repricing
Program"). All of the Named Executive Officers except Mr. Nosbaum have
elected to participate in the Repricing Program. Upon replacement, each
option described above will have an exercise price of $13.125 per share and
the potential realizable values for such options will be (a) at 5%,
$165,085, $82,542, $99,051 and $99,051 for Messrs. Dilworth, Swain, Green
and Wood, respectively, and (b) at 10%, $418,357, $209,179, $251,014 and
$251,014 for Messrs. Dilworth, Swain, Green and Wood, respectively.
(4) 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 on the date of grant 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 optionee is possible unless the stock price increases
over the option term, which will benefit all stockholders.
10
<PAGE> 13
The following table shows for fiscal 1995 certain information regarding
options exercised by and held at year end by the Named Executive Officers:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS AT OPTIONS AT
SHARES FISCAL YEAR END FISCAL YEAR END(1)(2)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE REALIZED(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert P. Dilworth.......... 25,000 $ 312,000 208,851 118,649 $ 939,071 $ 75,929
William D. Swain............ 6,000 $ 73,250 26,581 30,419 $ 69,930 $ 21,695
Gary M. Green............... -- -- 163,706 43,794 $1,335,141 $ 54,234
LeRoy D. Nosbaum............ 12,500 $ 169,250 57,143 34,357 $ 324,602 $ 27,117
Donald F. Wood.............. -- -- 33,854 103,146 $ 59,245 $ 159,506
</TABLE>
- ---------------
(1) Assuming replacement of certain options pursuant to the Repricing Program as
of the end of fiscal 1995, the value of the Named Executive Officers'
in-the-money options on such date would have been (a) for exercisable
options, $987,351, $78,679, $1,347,390 and $59,245 for Messrs. Dilworth,
Swain, Green and Wood, respectively, and (b) for unexercisable options,
$130,149, $35,446, $72,485 and $165,506 for Messrs. Dilworth, Swain, Green
and Wood, respectively.
(2) Fair market value of the Company's Common Stock at December 31, 1995
($13.625) (based on the closing sales price reported on the Nasdaq National
Market on such date) minus the exercise price of the options.
(3) Value realized is based on the fair market value of the Company's Common
Stock on the date of exercise (the closing sales price reported on the
Nasdaq National Market on such date) minus the exercise price, and does not
necessarily indicate that the optionee sold such stock.
OTHER MATTERS
No other matters will be presented for consideration at the Special
Meeting.
By Order of the Board of Directors
WILLIAM D. SWAIN
Secretary
June 26, 1996
11
<PAGE> 14
METRICOM, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 7, 1996
The undersigned hereby appoints ROBERT P. DILWORTH and WILLIAM D. SWAIN, and
each of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of Metricom, Inc. (the
"Company") that the undersigned may be entitled to vote at the Special Meeting
of Stockholders of the Company to be held at the offices of the Company at 980
University Avenue, Los Gatos, California on Wednesday, August 7, 1996 at 9:00
a.m., local time, and at any and all postponements, continuations and
adjournments thereof, with all powers that the undersigned would possess if
personally present, upon and in respect of the following matter and in
accordance with the following instructions.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2 AS MORE SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF
SPECIFIC INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE
THEREWITH.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1 AND 2
PROPOSAL 1: To approve an amendment to the Company's Restated Certificate
of Incorporation to increase the authorized number of shares
of Common Stock from 20,000,000 to 50,000,000.
/ / FOR / / AGAINST / / ABSTAIN
PROPOSAL 2: To approve the Company's 1993 Non-Employee Directors' Stock
Option Plan, as amended to permit additional
non-discretionary grants of options to non-employee
directors.
/ / FOR / / AGAINST / / ABSTAIN
<PAGE> 15
DATED ________________, 1996
-----------------------------
-----------------------------
Signature(s)
Please sign exactly as your
name appears hereon. If the
stock is registered in the
names of two or more persons,
each should sign. Executors,
administrators, trustees,
guardians and
attorneys-in-fact should add
their titles. If signer is a
corporation, please give full
corporate name and have a
duly authorized officer sign,
stating title. If signer is a
partnership, please sign in
partnership name by
authorized person.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN
ENVELOPE,
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
