<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
Fieldworks, Incorporated
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[FIELDWORKS LOGO]
April 12, 1999
Dear FieldWorks Shareholder,
You are cordially invited to attend the Annual Meeting of Shareholders
to be held at the Minneapolis Marriott Southwest, 5801 Opus Parkway, Minnetonka,
Minnesota on Tuesday, May 18, 1999 at 3:00 p.m.
The Notice of Annual Meeting and the Proxy Statement which follow
describe the matters on which action will be taken. During the meeting we will
also review current activities and items of general interest about the Company.
In addition to electing six members of the Board of Directors, you are
being asked to approve an increase of 500,000 in the number of shares authorized
for issuance under the 1994 Long Term Incentive and Stock Option Plan.
Stock option grants, which are made under the 1994 Plan, constitute an
important incentive for key technical and managerial positions of the Company.
Option grants are a significant part of the Company's ability to attract, retain
and motivate people whose skills and performance are critical to the Company's
success.
I urge you to review the proxy materials carefully, to vote FOR the
director nominees, and to vote FOR the proposal to authorize additional shares
under the 1994 Long Term Incentive and Stock Option Plan.
Sincerely,
/s/ DAVID C. MALMBERG
- --------------------------
David C. Malmberg
Chairman of the Board
7631 Anagram Drive
Eden Prairie, MN 55344
Phone: (612) 974-7000
Fax: (612) 974-7099
<PAGE>
FIELDWORKS, INCORPORATED
7631 Anagram Drive
Eden Prairie, MN 55344
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Tuesday, May 18, 1999
3:00 p.m.
TO THE SHAREHOLDERS OF FIELDWORKS, INCORPORATED:
Notice is hereby given that the Annual Meeting of Shareholders of
FieldWorks, Incorporated (the "Company") will be held on Tuesday, May 18, 1999,
at the Minneapolis Marriott Southwest, 5801 Opus Parkway, Minnetonka, Minnesota
at 3:00 p.m., Minneapolis, Minnesota time, for the following purposes:
1. To elect six members of the Board of Directors
2. To approve an amendment to the 1994 Long Term Incentive and
Stock Option Plan to increase the number of shares issuable
thereunder from 2,000,000 to 2,500,000.
3. To transact such other business as may properly come before
the meeting.
Only holders of record of the Company's Common Stock at the close of
business on April 5, 1999 will be entitled to receive notice of and to vote at
the meeting or any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you
plan to be personally present at the meeting, please complete, date and sign the
enclosed proxy card and return it promptly in the enclosed envelope. If you
later desire to revoke your proxy, you may do so at any time before it is
exercised.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David C. Malmberg
-----------------------------
David C. Malmberg
Chairman of the Board and
Chief Executive Officer
Eden Prairie, Minnesota
April 12, 1999
IMPORTANT - PLEASE MAIL YOUR PROXY CARD PROMPTLY
In order that there may be a proper representation
At the meeting, you are urged, whether you own one
Share or many, to complete, sign and mail your proxy.
<PAGE>
FIELDWORKS, INCORPORATED
7631 Anagram Drive
Eden Prairie, MN 55344
PROXY STATEMENT
Annual Meeting of Shareholders
Tuesday May 18, 1999
This Proxy Statement is furnished in connection with the solicitation
of the enclosed proxy by the Board of Directors of FieldWorks, Incorporated (the
"Company") for use at the Annual Meeting of Shareholders to be held on Tuesday
May 18, 1999, at 3:00 p.m. Minneapolis time, at the Minneapolis Marriott
Southwest, 5801 Opus Parkway, Minnetonka, Minnesota, and any adjournments
thereof (the "Annual Meeting"). Expenses in connection with the solicitation of
proxies will be paid by the Company. Proxies are being solicited by mail and may
also be solicited by directors, officers and employees of the Company without
additional compensation for such services. This Proxy Statement and form of
proxy enclosed are being mailed to shareholders on or about April 12, 1999.
Those shares of the Company's Common Stock, $.001 par value (the
"Common Stock"), represented by proxies in the form solicited will be voted in
the manner directed by the holder of such shares, and, if no direction is made,
such shares will be voted for the election of the nominees for director named in
this Proxy Statement and for the approval of the other proposals discussed
herein. If a shareholder abstains from voting as to any matter, then the shares
held by such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
such matter, but shall not be deemed to have been voted in favor of such matter.
If a broker returns a "nonvote" proxy, indicating a lack of authority to vote on
such matter, then the shares covered by such nonvote shall be deemed present at
the meeting for purposes of determining a quorum but shall not be deemed to be
represented at the meeting for purposes of calculating the vote with respect to
such matter. Proxies may be revoked at any time before being exercised by
delivery to the Secretary of the Company of a written notice of termination of
the proxies' authority or a duly executed proxy bearing a later date.
A copy of the Company's Annual Report for the fiscal year ended January
3, 1999 is being furnished to each shareholder with this proxy statement.
Only the holders of the Common Stock whose names appeared of record on
the Company's books at the close of business on April 5, 1999 will be entitled
to vote at the Annual Meeting. At the close of business on such date, a total of
8,871,426 shares of such Common Stock were outstanding, each share being
entitled to one vote.
-1-
<PAGE>
ITEM 1--ELECTION OF DIRECTORS
Nominees
The Company's Board of Directors currently has six members: Gary J.
Beeman, James A. Bernards, Robert W. Heller, David C. Malmberg, Robert C.
Szymborski and Richard J. York. Each director serves until such director's
successor shall have been elected and shall qualify or until such director's
earlier death, resignation, removal or disqualification. The Board of Directors
has nominated all six current directors for reelection to the Board of Directors
at the Annual Meeting.
Proxies solicited by the Board of Directors will, unless otherwise
directed, be voted to elect Messrs. Beeman, Bernards, Heller, Malmberg,
Szymborski and York. If a shareholder of record returns a proxy withholding
authority to vote the proxy with respect to any of the nominees, then the shares
of the Common Stock covered by such proxy shall be deemed present at the Annual
Meeting for purposes of determining a quorum and for purposes of calculating the
vote with respect to such nominee or nominees, but shall not be deemed to have
been voted for such nominee or nominees. The election of each nominee requires
the affirmative vote of the holders of the greater of (1) a majority of the
voting power of the shares of Common Stock present at the Annual Meeting and
entitled to vote for the election of directors or (2) 4,435,714 shares of Common
Stock which represents a majority of the shares of Common Stock outstanding on
the Record Date of April 5, 1999. Cumulative voting is not permitted in the
election of directors. In the unlikely event that any of the nominees is not a
candidate for election at the Annual Meeting, the persons named in the
accompanying form of proxy will vote for such other person or persons as the
Board of Directors may designate. The Board of Directors has no reason to
believe that any nominee will not be a candidate for election.
The following information is furnished with respect to each nominee and
director:
<TABLE>
<CAPTION>
Principal occupation and business
Name Age experience for past five years
---- --- ------------------------------
<S> <C> <C>
Gary J. Beeman 45 Mr. Beeman was a co-founder of the Company and has served as its
Vice Chairman of the Board of Directors since March 1998 and as
its Treasurer and a member of the Board of Directors of the
Company since the Company's inception in October 1992. He also
served as the Company's Chairman of the Board of Directors until
January 1997, as its President until April 1997 and as its Chief
Executive Officer until March 1998.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
Principal occupation and business
Name Age experience for past five years
---- --- ------------------------------
<S> <C> <C>
James A. Bernards 52 Mr. Bernards has served as a director of the Company since January
1999. He is President of Brightstone Capital, Ltd., a venture fund
and President of Facilitation, Inc., a business consulting services
company. Mr. Bernards was a co-founder and President of the
accounting firm Stirtz, Bernards, & Co. from 1981 to 1993. He
serves on the boards of directors of FSI International, Inc. and
Health Fitness Inc. (public companies) and several other private
companies.
Robert W. Heller 53 Mr. Heller has served as a director of the Company since January
1997 and as the Vice President of Operations since July 1998. He
formerly was President and Chief Executive Officer of MiTech
Research & Development, Inc. and has worked as a consultant to
growing companies regarding strategic, operational and
international issues. From 1977 to 1996, Mr. Heller held a variety
of positions, including Chief Executive Officer, at Advance
Circuits, Inc., a fabricator of printed circuit boards that was
acquired by Johnson Matthey Public Limited Company in 1995. Mr.
Heller is a member of the board of directors of Reuter
Manufacturing, Inc. (public company) and several other private
companies.
David C. Malmberg 56 Mr. Malmberg has served as Chairman of the Board of Directors since
January 1997 and as a director of the Company since October 1996.
Since July 1998 he has also served as Chief Executive Officer of
the Company. Since 1994, Mr. Malmberg has been President of David
C. Malmberg, Inc., a management consulting and private investment
management firm. From 1972 to 1994 he served in various positions,
including Vice Chairman, President and Chief Operating Officer, at
National Computer Systems, Inc., a provider of information systems
and services to the educational, commercial and financial markets.
Mr. Malmberg is the Chairman of the Board of National City Bank in
Minneapolis, and serves on the boards of directors of National City
Bancorporation, Three Five Systems, Inc. and PPT/Vision, Inc.
Robert C. Szymborski 50 Mr. Szymborski was a co-founder of the Company and has served as
Executive Vice President, Chief Technical Officer and Secretary and a
member of the board of directors since the Company's inception in
October 1992.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Principal occupation and business
Name Age experience for past five years
---- --- ------------------------------
<S> <C> <C>
Richard J. York 55 Mr. York has served as a director of the Company since July, 1998.
He was founder and President of York & Associates, Inc., a systems
consulting firm specializing in business applications until its
merger with CIBER, Inc., in early 1999. Mr. York is currently
Branch Manager of the Minneapolis operations of CIBER, Inc., a
nationwide provider of system integration consulting services. In
1996, Mr. York also served as interim Chief Information Officer of
Imation during the transition period while Imation was divested
from 3M.
The following information is furnished with respect to other non-director
executive officers:
Karen L. Engebretson 35 Ms. Engebretson has served as Chief Financial Officer and Vice
President of Finance since July 1997. From May 1994 through June
1997, she was Chief Financial Officer and Controller at Empak,
Inc. Prior to that time, Ms. Engebretson held various accounting
positions at Honeywell and Alliant Techsystems since 1985.
</TABLE>
Meetings
During the fiscal year ended January 3, 1999, the Board of Directors of
the Company held eight meetings. All incumbent directors attended at least 75%
of the meetings of the Board during the period they were members, and all
incumbent directors attended at least 75% of those meetings of the committees of
which they were members.
Committees
The Board of Directors of the Company has an audit committee which met
two times and a compensation committee which met three times during the fiscal
year ended January 3, 1999. The audit committee reviews the Company's
arrangements with its independent public accountants, the substance of the
audits, financial reporting procedures and the internal controls of the Company.
The Company's compensation committee determines policy with respect to
compensation to executive management, specifically reviews the performance of
and establishes the compensation to the Company's Chief Executive Officer,
reviews compensation to officers, and administers the Company's stock-based
employee benefit plans. Former director George E. Kline, who resigned in January
1999, served as a member of both the Audit and the Compensation Committees
during the full fiscal year ended January 3, 1999. Messrs. Heller and Malmberg
were members of both committees until their appointment to Vice President of
Operations and Chief Executive Officer, respectively, in July 1998. Mr. York has
served as a member of both committees since his appointment to the Board of
Directors in July 1998. Mr. Bernards also has served on both committees since
his appointment to the Board of Directors in January 1999. The Company does not
have a nominating or similar committee.
-4-
<PAGE>
Director Compensation
The Company does not currently pay any cash directors' fees. The
Company may reimburse its outside directors for expenses actually incurred in
attending meetings of the Board of Directors.
Pursuant to the FieldWorks, Incorporated 1996 Non-Employee Directors'
Stock Option Plan (the "Directors' Plan"), each director who is not also an
officer or employee of the Company automatically receives non-qualified options
to purchase shares of Common Stock as follows: 25,000 shares (each an "Initial
Grant") at the time of election to the Board of Directors, and 10,000 shares
(each an "Annual Grant") at each re-election. All such options have an exercise
price equal to the fair market value of a share of Common Stock on the day of
grant and expire ten years after the date of grant. Initial Grants vest one
third on the date of grant and one third on each of the first and second
anniversaries of such date. Annual Grants vest in full six months from the date
of grant.
The Board of Directors recommends that the shareholders elect the
nominees named herein as directors of the Company as described above. The
persons named in the accompanying proxy intend to vote the proxies held by them
in favor of such nominees, unless otherwise directed. If no instruction is
given, the accompanying proxy will be voted for such election. The affirmative
vote of the greater of (1) a majority of the voting power of the shares of
Common Stock present at the Annual Meeting and entitled to vote for the election
of directors or (2) 4,435,714 shares of Common Stock is required for the
election of each director.
-5-
<PAGE>
EXECUTIVE COMPENSATION
Report of the Compensation Committee on Executive Compensation
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. In this regard, the role of
the Compensation Committee, which is comprised entirely of outside, non-employee
directors, is to review and approve salaries and other compensation of the
executive officers of the Company on behalf of the Board of Directors and the
shareholders. The Committee also oversees the 1994 Long Term Incentive and Stock
Option Plan and the Company's other incentive compensation programs.
Compensation Philosophy and Objectives
The Company is committed to attracting, hiring, motivating and
retaining an experienced management team that can successfully develop,
manufacture and market the Company's products and services. The Compensation
Committee aligns its compensation plan for executive management to the
attainment of Company-wide and individual performance objectives. The Committee
annually reviews and evaluates the Company's corporate performance, compensation
levels and equity ownership of its executive officers. The Committee strives to
establish competitive levels of compensation that are consistent with the
Company's annual and long-term performance goals, that are appropriate for each
officer's scope of responsibility, that recognize individual achievements and
that will attract and retain the highest-quality personnel possible. The
Committee also strives to provide an incentive to such executives to focus on
the Company's strategic goals by aligning their financial interests closely with
shareholder interests.
The Company's compensation program has three primary components: base
salary, annual cash incentive compensation and long-term incentive compensation
in the form of stock options. The ultimate composition of executive compensation
reflects the Company's goals of attracting and retaining highly-qualified
personnel and supporting a performance-oriented environment that rewards both
corporate and personal long-term performance. In general, stock option grants
are used to enhance the competitiveness of compensation packages, to reward
exceptional performance and provide incentive for reaching performance goals.
The Compensation Committee believes that the use of stock options is important
to align the interests of the officers with the interests of the shareholders
and as such, the substantial majority of stock options vest in accordance with
stock performance.
Base Salary
Annual base salaries are established as a result of the Committee's
analysis of each executive officer's individual performance, the overall
performance of the Company, the experience of the executive officer and market
comparisons. The Committee also believes that executive salaries must be
competitive to attract and retain key individuals. In this regard, salaries for
officers are based on experience level and are intended to be competitive with
salaries paid to executives in similar positions at other early stage, computer
industry companies. By augmenting base salary with equity-based compensation,
the Company seeks to attract and retain quality management personnel.
-6-
<PAGE>
Cash Incentive Compensation
The Compensation Committee establishes an executive cash bonus plan
annually. The bonus plan assigns to each executive, based upon the Committees'
determination of the size of bonus appropriate for the position held by the
executive, a bonus target based upon Company profitability and the attainment of
specific objectives.
There were no annual bonus payments to executive officers for 1998 performance.
Stock Incentive Compensation
The Committee believes that stock ownership by management and
stock-based performance compensation arrangements are beneficial in aligning
management and shareholders' interests. Stock options are granted to executives
at the time of hire. In determining the number of shares subject to stock option
grants, the Committee takes into consideration the job responsibilities,
experience and contributions of the individual, as well as recommendations of
the Chief Executive Officer, and determines an appropriate amount. The stock
options give the holder the right to purchase shares of the Common Stock over a
five to seven year period. All of the grants made during fiscal 1998 were made
at option prices equal to the fair market value of the Common Stock on the dates
of grant. Therefore, the stock options have value only if the stock price
appreciates from the value on the date the options were granted. This design is
intended to focus executives on the enhancement of long-term shareholder value
and to encourage equity ownership in the Company. Options are also subject to
vesting provisions directly related to stock price performance. Additional
options may be granted from time to time based on individual performance,
increased job responsibilities and the prior level of grants.
Stock Option Repricing
The policy of the Committee historically has been to grant stock
options to employees of the company with an exercise price equal to the fair
market value of the underlying stock on the date of grant. Accordingly, the
stock options provide value to employees who are granted options only when the
price of the Company's stock increases above the price on the date of grant.
On August 7, 1998, a resolution was adopted by the Board of Directors
at the recommendation of the Compensation Committee to grant repriced incentive
stock options to all non-director employees for all outstanding incentive stock
options with an exercise price in excess of $3.00. The options were reissued at
an exercise price of $2.3125 which represented the fair market value of the
underlying stock on that date. The vesting schedule of all repriced options was
changed to provide graduated vesting in accordance with stock price performance
with 34% vesting when the Company's stock price sustains an average closing
price of $5.00 per share for 40 consecutive days, 33% vesting when the Company's
stock price sustains an average closing price of $7.50 per share for 40
consecutive days and 33% vesting when the Company's stock price sustains an
average closing price of $10.00 per share for 40 consecutive days.
The Compensation Committee's action was taken in response to the
decline in the market price of the Company's stock during the preceding months
which had minimized the incentive
-7-
<PAGE>
value of options with higher exercise prices. The decision to reprice was based
upon numerous factors including concern over the loss of employee incentives,
the resulting turnover of skilled employees and the negative impact these events
could have on the Company's operating results and financial condition. The
Compensation Committee determined that the repriced options provided appropriate
long-term incentive for employees. However, the Compensation Committee did not
replace or reprice outstanding director stock options or non-incentive stock
options.
CEO Compensation
The determination of the Chief Executive Officer's salary, bonus and
grants of stock options followed the policies set forth above for all
executives' compensation.
During 1998, Mr. Gary Beeman was Chief Executive Officer until March
18, 1998. Based on the performance of the Company, the Compensation Committee
did not increase Mr. Beeman's base salary, grant additional stock options or
award an annual cash bonus.
Mr. Ronald Lewis was named Chief Executive Officer in addition to his
role as President of the Company on March 18, 1998. The annual base salary for
Mr. Lewis was determined in accordance with his employment agreement, which was
entered into in connection with his accepting employment at the Company and was
subsequently increased to $150,000 in connection with his appointment to Chief
Executive Officer. Mr. Lewis did not receive an annual cash bonus or additional
stock options based on the Company's 1998 financial performance.
Mr. David Malmberg was named Chief Executive Officer on July 8, 1998
upon the resignation of Mr. Lewis. Mr. Malmberg's compensation including annual
base salary and stock option grants for 1998 was established at what the Board
of Directors believes is below market level based on his agreement with the
Board of Directors and the financial condition of the Company. Mr. Malmberg also
did not receive an annual cash bonus or receive additional stock options based
on the Company's 1998 financial performance.
Annual compensation is summarized in the following table. Compensation
for subsequent years will be determined by the Compensation Committee.
James A. Bernards
Richard J. York
-8-
<PAGE>
Summary Compensation Table
The following table sets forth the cash and non-cash compensation for
the last three fiscal years awarded to or earned by Gary J. Beeman, Chief
Executive Officer through March 1998, Ronald E. Lewis, Chief Executive Officer
from March 1998 through June 1998, David C. Malmberg, Chief Executive Officer of
the Company from July 1998 to present and Robert C. Szymborski, Vice President
of the Company and the only other executive officer whose salary and bonus
earned in the fiscal year ended January 3, 1999 exceeded $100,000 for services
rendered (the "Named Executive Officers").
<TABLE>
<CAPTION>
Long-Term All Other
Annual Compensation Compensation Compensation
---------------------------------------------------- ------------ ------------
Name Other
and Annual
Principal Fiscal Compen-
Position Year Salary Bonus sation(1) Options Other
-------- ---- ------ ----- --------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
David C. Malmberg (2) 1998 $30,000 $ 0 -- 290,000 $ 42(3)
Chief Executive Officer 1997 -- -- -- -- 30,000(4)
Ronald E. Lewis (5) 1998 77,523 235(6) 4,350 -- 75,865(7)
President and Chief 1997 96,923 50,142(8) 3,600 250,000 185(3)
Executive Officer
Gary J. Beeman (9) 1998 140,000 235(6) 5,400 -- 2,997(10)
Vice President 1997 145,385 25,142 5,850 -- 185(3)
1996 140,000 17,500 5,400 50,000 185(3)
Robert C. Szymborski 1998 140,000 235(6) 5,400 -- 2,989(10)
Vice President 1997 145,385 25,142 5,850 -- 185(3)
1996 140,000 17,500 5,400 50,000 185(3)
</TABLE>
- ----------
(1) Represents payment of automobile allowance.
(2) Mr. Malmberg became Chief Executive Officer in July 1998.
(3) Represents premiums paid by the Company on life insurance policies for
the benefit of the respective executive officer.
(4) Represents the payments made to Mr. Malmberg based on his 1997
consulting agreement with the Company prior to becoming an employee.
(5) Mr. Lewis joined the Company as President in April 1997 and was named
Chief Executive Officer in March 1998. Mr. Lewis resigned in July 1998.
(6) Represents the prorata share of an all-employee bonus for company-wide
objectives relating to unit shipments and quality which was paid in
1998.
(7) Represents the severance package paid to Mr. Lewis after his
resignation in July 1998.
(8) Includes $50,000 bonus paid in 1998 for 1997 performance.
(9) Mr. Beeman was Chief Executive Officer until March 1998.
(10) Represents the 401K Company match and premiums paid by the Company on
life insurance policies for the benefit of the respective executive
officer.
-9-
<PAGE>
Stock Options
The following table sets forth information with respect to options granted
to the Named Executive Officers in the fiscal year ended January 3, 1999:
Option Grants in Fiscal Year 1998
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual
Rates of Stock Price
% of Total Appreciation for
Options Options Granted Exercise Option Term (1)
Granted to Employees Price Per Expiration --------------------------
Name (#) In 1998 ($/Sh) Date 5%($) 10%($)
----------- ---------- ------- ------ ---- ---------- --------
<S> <C> <C> <C> <C> <C>
David C. Malmberg 90,000(2) 9.4% $2.31 8/05/05 $84,730 $197,450
200,000(3) 20.9% $2.31 8/05/05 188,280 438,780
Ronald E. Lewis -- -- -- -- -- --
Gary J. Beeman -- -- -- -- -- --
Robert C. Szymborski -- -- -- -- -- --
</TABLE>
- ----------
(1) The amounts in these columns represent the realizable value of the
subject options at the expiration date, without discounting to present
value, assuming appreciation in the market value of the Company's
common stock from the market price on the date of grant at the rates
indicated. The 5% and 10% rates are based on rules of the Securities
and Exchange Commission (the "SEC") and do not represent the Company's
estimate or projection of the Company's future stock prices. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Common Stock and overall stock market conditions.
The amounts reflected in this table may not be achieved.
(2) These options vested and became exercisable on December 31, 1998.
(3) 25% of these options vested on January 1, 1999. These options will vest
in full on March 11, 2005 subject to accelerated vesting in cumulative
25% increments based upon the Company's stock performance.
The following table sets forth information with respect to the exercise
of options during fiscal year 1998 and the value of options held by the Named
Executive Officers as of January 3, 1999:
Aggregated Option Exercises in Fiscal Year 1998 and Fiscal Year End Option
Values
<TABLE>
<CAPTION>
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at End of 1998 at End of 1998 (1)
Acquired Value --------------------------- --------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ----------- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David C. Malmberg -- -- 235,000 200,000 $70,000 $75,000(2)
Ronald E. Lewis -- -- -- -- -- --
Gary J. Beeman -- -- 50,000 -- --(3) --
Robert C. Szymborski -- -- 50,000 -- --(3) --
</TABLE>
- ----------
(1) Represents the difference between the closing price of the Company's
Common Stock as reported on the NASDAQ National Market on December 31,
1998 and the exercise price of the options.
(2) On December 31, 1998, Mr. Malmberg had 95,000 exercisable and 50,000
unexercisable options priced greater than the closing price of the
Company's common stock.
(3) On December 31, 1998 the closing price of the Company's common stock
was less than the exercise price of the options.
-10-
<PAGE>
Long-Term Incentive Plan Awards
Other than its 1994 Stock Option Plan, the Company does not maintain
any long-term incentive plans.
Employment Agreements
On September 18, 1997, the Company entered into an employment agreement
with Ronald E. Lewis to render services as President. The term of the agreement
was one year and commenced April 21, 1997 (date employment began) and
automatically renewed for successive one year periods unless either party
objected. In connection with this agreement, the Company granted an option to
purchase 150,000 shares of Common Stock at an exercise price of $5.25. This
option had a term of ten years and would vest 50,000 shares on each of the
first, second and third anniversaries of the employment date. The Company also
granted an option to purchase 100,000 shares of Common Stock at an exercise
price of $5.25 and a term of ten years. This option would vest in full on
October 21, 2006, subject to accelerated vesting in cumulative 25% increments
upon the satisfaction of certain specified management and performance goals.
Base salary compensation under this agreement for the first year was $140,000.
Salary for subsequent years was to be determined by the Compensation Committee.
Mr. Lewis was eligible to participate in any incentive compensation plans which
were established by the Board. Mr. Lewis agreed to not divulge any confidential
information or compete, directly or indirectly, with the Company for a period of
two years after termination. Under this agreement, salary and benefit
continuation upon termination would be for a period of six months.
In connection with Mr. Lewis' appointment to Chief Executive Officer in
March 1998, his base salary compensation was increased to $150,000. Also, salary
and benefit continuation upon change of control would be for a period of twelve
months.
There were no other employment agreements with the named executive
officers.
Compensation Committee Interlocks and Insider Participation
Mr. Bernards has served as a member of the Compensation Committee of
the Board of Directors since joining the Board of Directors in January 1999. Mr.
York has also served as a member of the Compensation Committee since joining the
Board of Directors in July 1998.
Mr. Bernards is president of a limited liability company that is the
general partner of certain venture capital limited partnerships (such limited
liability company and limited partnerships, collectively called "Brightstone
Entities," as more fully described in Note 8 to the table under "Security
Ownership of Certain Beneficial Owners and Management"). As such, Mr. Bernards
may be deemed to share voting and investment of power for the shares held by the
Brightstone Entities. See "Security Ownership of Certain Beneficial Owners and
Management."
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<PAGE>
Shareholder Return
The graph set forth below compares the cumulative total shareholder
return on the Common Stock of the Company since March 20, 1997 (the first date
of trading following the Company's initial public offering) with the cumulative
total return on the NASDAQ National Market Index and the NASDAQ Computer Index.
In each case, the cumulative return is calculated assuming an investment of $100
on March 20, 1997, and reinvestment of all dividends.
[FIELDWORKS PREFORMANCE GRAPH]
March 20, 1997 January 4, 1998 January 3, 1999
-------------- --------------- ---------------
FieldWorks, Inc. $100.00 $ 85.42 $ 46.88
NASDAQ Composite Index 100.00 122.39 171.64
NASDAQ Computer Index 100.00 140.00 218.83
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<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 23, 1999 information
regarding the ownership of Common Stock by (i) each director/nominee, (ii) each
Named Executive Officer, (iii) all directors and executive officers (including
the Named Executive Officers) as a group, and (iv) any other shareholder who is
known by the Company to own beneficially more than 5% of the outstanding Common
Stock. Except as otherwise indicated, the shareholders listed in the table have
sole voting and investment power with respect to the shares indicated.
Shares Beneficially Owned
-------------------------
Name and Address of Beneficial Owner Number(1) Percent
------------------------------------ --------- -------
Robert C. Szymborski (2)........................ 832,916 9.4%
Brightstone Entities (3) ....................... 703,334 7.9
Network General Corporation (4) ................ 623,077 7.1
Gary J. Beeman (5).............................. 657,152 7.4
David C. Malmberg (6)........................... 238,900 2.6
Robert W. Heller (7)............................ 179,500 2.0
James A. Bernards (8)........................... 33,500 *
Richard J. York (9)............................. 8,500 *
All executive officers and directors as a
group (7 persons)............................ 1,951,968 20.9
- ---------------
* Less than 1%.
(1) Beneficial ownership is determined in accordance with rules of the SEC,
and generally includes voting power and/or investment power with
respect to securities. Shares of Common Stock subject to options or
warrants currently exercisable or exercisable within 60 days of March
23, 1999 are deemed outstanding for computing the percentage of the
person holding such options or warrants but are not deemed outstanding
for computing the percentage of any other person. Except as indicated
by footnote, the Company believes that the persons named in this table,
based on information provided by such persons, have sole voting and
investment power with respect to the shares of Common Stock indicated.
(2) Includes 50,000 shares of Common Stock issuable pursuant to currently
exercisable options. Mr.Szymborski's address is 7631 Anagram Drive,
Eden Prairie, MN 55344.
(3) Includes 160,000 shares of Common Stock held of record by Brightstone
IV Partners ("Brightstone IV"); 200,000 shares of Common Stock held of
record by Brightstone Fund V Partnership ("Brightstone V"); 100,000
shares of Common Stock held of record by Brightstone Fund VI L.P.
("Brightstone VI"); 83,334 shares of Common Stock held of record by
Brightside Fund Limited Partnership ("Brightside"); 50,000 shares of
Common Stock held of record by Brightstone Fund VII L.P. ("Brightstone
VII"); 30,000 shares of Common Stock issuable upon the exercise of
warrants issued to Brightstone Capital Ltd., LLC ("Brightstone
Capital"); 20,000 shares of Common Stock issuable upon the exercise
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<PAGE>
of warrants issued to Brightstone Fund VII; 20,000 shares of Common
Stock issuable upon the exercise of warrants issued to Brightbridge
Fund I L.P. ("Brightbridge," and, together with Brightstone IV,
Brightstone V, Brightstone VI, Brightstone VII, Brightbridge and
Brightstone Capital, the "Brightstone Entities"); 15,000 shares of
Common Stock issuable upon the exercise of warrants issued to
Brightstone IV; 15,000 shares of Common Stock issuable upon exercise of
warrants issued to Brightstone V; and 10,000 shares of Common Stock
issuable upon the exercise of warrants issued to Brightstone VI.
Brightstone IV, Brightstone V, Brightstone VI, Brightstone VII,
Brightside and Brightbridge are all limited partnerships of which
Brightstone Capital is the general partner; Brightstone Capital is a
limited liability company of which Mr. Bernards is President. The
address of the Brightstone Entities is 7200 Metro Boulevard, Edina,
Minnesota 55439. Mr. Bernards disclaims beneficial ownership of these
funds.
(4) Includes 46,154 shares of Common Stock issuable upon exercise of
warrants. The address of Network General Corporation is 4200 Bohannon
Drive, Menlo Park, California 94025.
(5) Includes 50,000 shares of Common Stock issuable pursuant to currently
exercisable options. Mr.Beeman's address is 7631 Anagram Drive, Eden
Prairie, MN 55344.
(6) Includes 235,000 shares of Common Stock issuable pursuant to currently
exercisable options.
(7) Includes 154,500 shares of Common Stock issuable pursuant to currently
exercisable options.
(8) Includes 8,500 shares of Common Stock issuable pursuant to currently
exercisable options. Also see Note 3.
(9) Includes 8,500 shares of Common Stock issuable pursuant to currently
exercisable options.
SECTION 16 REPORTING
Under federal securities laws, the Company's directors and officers,
and any beneficial owner of more than 10% of a class of equity securities of the
Company, are required to report their ownership of the Company's equity
securities and any changes in such ownership to the SEC and the securities
exchange on which the equity securities are registered or traded. Specific due
dates for these reports have been established by the SEC, and the Company is
required to disclose in this Proxy Statement any delinquent filing of such
reports and any failure to file such reports during the fiscal year ended
January 3, 1999. Due to his travel schedule, Mr. York was delinquent in filing
his initial report of beneficial ownership on Form 3. With such exception and
based on information contained in their Forms 3, 4 and 5, all directors,
officers and beneficial holders of 10% of the Company's securities timely filed
such reports during the fiscal year ended January 3, 1999.
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<PAGE>
ITEM NO. 2
PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S
1994 LONG-TERM INCENTIVE AND STOCK OPTION PLAN,
AS AMENDED TO DATE (THE "PLAN"), TO INCREASE
THE NUMBER OF SHARES SUBJECT TO
THE PLAN FROM 2,000,000 TO 2,500,000.
The Board of Directors and the shareholders of the Company authorized
and adopted the FieldWorks, Incorporated 1994 Long-Term Incentive and Stock
Option Plan (as amended to date, the "Plan") in 1994. The Plan initially
authorized the Company to grant options to purchase up to an aggregate of
720,000 shares of Common Stock. At the Annual Meeting held in May 1996, the
Company's shareholders approved an amendment increasing the number of shares
available under the Plan to 1,100,000 and at the Special meeting held in January
1997, the Company's shareholders approved an amendment increasing the number of
shares available under the Plan to 1,500,000. At the 1998 Annual Meeting, the
Company's shareholders approved an amendment increasing the number of shares
available under the Plan to 2,000,000.
The purpose of the Plan is to aid the Company in attracting and
retaining personnel capable of assuring the future success of the Company, to
offer such personnel additional incentives to put forth maximum efforts for the
success of the business and to afford them an opportunity to acquire a
proprietary interest in the Company through stock options and other long-term
incentive awards. Stock options are also a means of rewarding individuals
without depleting the cash resources of the Company.
As of March 23, 1999 the Company had granted options to purchase
1,912,573 shares of Common Stock under the Plan. Therefore, under the terms of
the Plan, the Company would be able in the future to grant options to purchase
no more than 87,427 additional shares of Common Stock. The Company's management
believes that it is important for the growth, cash management and general
prosperity of the Company that the Company be able to grant a greater number of
options to its employees and other service providers. As a result, on February
9, 1999, the Board of Directors authorized an increase in the number of shares
of Common Stock that may be granted under the Plan from 2,000,000 shares to
2,500,000, subject to shareholder approval of such amendment. The closing price
of a share of Common Stock as reported by the NASDAQ National Market on March
23, 1999 was $2.1875; based on such price the aggregate market value of the
additional shares which may be issued under the Plan pursuant to the proposed
amendment was $1,093,750.
Item No. 2 approves the action of the Board of Directors in amending
the Plan to increase the number of shares of Common Stock as to which options
may be granted under the Plan. If not approved, the aggregate number of shares
of Common Stock available under the Plan will remain 2,000,000.
The following is a summary of the Plan that is qualified in its
entirety by reference to the actual text of the Plan, which will be made
available to any shareholder upon request.
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<PAGE>
The Plan is administered by the Compensation Committee (the
"Committee"), the members of which are appointed by and serve at the pleasure of
the Board of Directors. The Plan allows the Board of Directors or the Committee
to make awards of stock options to full or part-time employees, non-employee
directors, consultants or independent contractors to the Company or one of its
subsidiaries or affiliates. The types of awards are more fully described below.
The aggregate number of shares available for awards, the price of stock
options and the number of shares of outstanding awards will be adjusted in the
event of changes in the Company's capitalization, including a stock dividend,
stock split, or recapitalization.
Stock options granted under the Plan may be either incentive stock
options ("Incentive Stock Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") or options that do not
qualify as Incentive Stock Options ("Nonqualified Stock Options"). Awards
granted under the Plan may be Stock Appreciation Rights ("SARs"), restricted
stock awards or performance awards. The Committee sets option exercise prices
and terms, provided that the option price for Incentive Stock Options shall not
be less than 100% of the fair market value of the shares of Common Stock subject
to the Incentive Stock Option at the date of grant.
The grant of an option is not expected to result in any taxable income
for the recipient. The holder of an Incentive Stock Option generally will have
no taxable income upon exercising the Incentive Stock Option (except that a
liability may arise pursuant to the alternative minimum tax), and the Company
will not be entitled to a tax deduction when an Incentive Stock Option is
exercised. Upon exercising a Nonqualified Stock Option, the optionee must
recognize ordinary income equal to the excess of the fair market value of the
shares of Common Stock acquired on the date of exercise over the exercise price,
and the Company will be entitled at that time to a tax deduction for the same
amount. The tax consequence to an optionee upon a disposition of shares acquired
through the exercise of an option will depend upon how long the shares have been
held and upon whether such shares were acquired by exercising an Incentive Stock
Option or by exercising a Nonqualified Stock Option. Generally, there will be no
tax consequence to the Company in connection with disposition of shares acquired
under an option, except that the Company may be entitled to a tax deduction in
the case of a disposition of shares acquired under an Incentive Stock Option
before the applicable Incentive Stock Option holding periods set forth in the
Code have been satisfied.
Under the Plan, the Committee may permit participants receiving or
exercising awards, subject to the discretion of the Committee and as specified
by the Committee, to pay (i) by delivering certificates for shares of Common
Stock already owned by the optionee or grantee having a fair market value as of
the date of grant equal to the full purchase price of the shares, or (ii) by
delivering the optionee's or grantee's promissory note, which shall provide for
interest at a rate not less than the minimum rate required to avoid the
imputation of income, original issue discount or a below-market-rate loan
pursuant to the Code, or (iii) a combination of cash, the optionee's or
grantee's promissory note and such shares. The optionee's or grantee's
promissory note shall be a full recourse liability of the optionee and may, at
the discretion of the Committee, be secured by a pledge of the shares being
purchased. In addition, in order to assist an optionee or grantee in paying all
federal and state taxes to be withheld or collected upon exercise of an option
or award which does not qualify as an Incentive Stock Option, the committee, in
its
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<PAGE>
absolute discretion and subject to such additional terms and conditions as it
may adopt, shall permit the optionee or grantee to satisfy such tax obligation
by (i) electing to have the Company withhold a portion of the shares otherwise
to be delivered upon exercise of such option or award with a fair market value
equal to such taxes.
The Committee may grant "restoration" options, separately or together
with another option, pursuant to which the optionee would be granted a new
option when the payment of the exercise price of the option to which such
"restoration" option relates is made by the delivery of shares of Common Stock
owned by the optionee, which new option would be an option to purchase the
number of shares not exceeding the sum of (i) the number of shares of Common
Stock tendered as payment upon the exercise of the option to which such
"restoration" option relates and (ii) the number of shares of Common Stock, if
any, tendered as payment of the exercise of the option to which such
"restoration" option relates. The Committee also has the authority, at the time
of grant of an option under the Plan or at any time thereafter, to approve tax
bonuses to designated optionees or grantees to be paid upon their exercise of
options or awards granted. The Committee shall have full authority in its
absolute discretion to determine the amount of any such tax bonus and the terms
and conditions affecting the vesting and payment thereafter.
Board of Directors' Recommendation and Vote Required
The Board of Directors unanimously recommends a vote FOR Item No. 2.
Approval of the amendment to the Plan requires the affirmative vote of the
holders of the greater of (1) a majority of the voting power of the shares of
Common Stock present at the Annual Meeting and entitled to vote for the election
of directors or (2) 4,435,714 shares of Common Stock.
Proxies solicited by the Board of Directors will be voted FOR Item No.
2. unless shareholders specify otherwise on their proxy cards.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has served as the Company's independent public
accountants since 1993 and has been selected to serve as the Company's
independent public accountants for the fiscal year ending January 2, 2000.
Representatives of Arthur Andersen LLP will be present at the Annual Meeting,
will have an opportunity to make a statement if they desire to do so and will be
available to respond to appropriate questions from shareholders.
GENERAL
The Board of Directors of the Company does not know of any matters
other than those described in this Proxy Statement which will be acted upon at
the Annual Meeting. In the event that any other matters that are proposed after
April 22, 1999 properly come before the meeting calling for a vote of
shareholders, the persons named as proxies in the enclosed form of proxy will
vote in accordance with their best judgment on such other matters.
-17-
<PAGE>
SHAREHOLDER PROPOSALS
Any proposal by a shareholder to be presented at the annual meeting of
shareholders to be held in 2000 which the shareholder intends to request be
included in the Company's proxy statement must be received at the Company's
principal executive offices, 7631 Anagram Drive, Eden Prairie, MN 55344 before
December 13, 1999. Any other proposals to be presented at the annual meeting of
shareholders to be held in 2000 must be received in writing at the Company's
principal executive offices, 7631 Anagram Drive, Eden Prairie, MN 55344 not
later than the close of business on the tenth day following the day on which the
notice of the meeting was mailed to shareholders. Any such notice must contain
the specific information required by the Company's Bylaws, a copy of which will
be provided to any shareholder upon written request.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ DAVID C. MALMBERG
David C. Malmberg, Chairman of the Board
Dated: April 12, 1999
-18-
<PAGE>
FIELDWORKS, INCORPORATED
1994 LONG-TERM INCENTIVE
AND
STOCK OPTION PLAN
(As proposed to be amended)
Section 1. Purpose of Plan.
This Plan shall be known as the "FIELDWORKS, INCORPORATED 1994
LONG-TERM INCENTIVE AND STOCK OPTION PLAN" and is hereinafter referred to as the
"Plan". The purpose of the Plan is to aid in maintaining and developing
personnel capable of assuring the future success of FieldWorks, Incorporated, a
Minnesota corporation (the Company"), to offer such personnel additional
incentives to put forth maximum efforts for the success of the business, and to
afford them an opportunity to acquire a proprietary interest in the Company
through stock options and other long-term incentive awards as provided herein.
Options granted under this Plan may be either incentive stock options
("Incentive Stock Options") within the meaning of Section 422 of the Internal
Revenue Code of 1986 (the "Code"), or options that do not qualify as Incentive
Stock Options. Awards granted under this Plan shall be SARs, restricted stock or
performance awards as hereinafter described.
Section 2. Stock Subject to Plan.
Subject to the provisions of Section 16 hereof, the stock to be subject
to options or other awards under the Plan shall be the Company's authorized
common shares, par value $0.01 per share (the "Common Shares"). Such Common
Shares may be either authorized but unissued shares, or issued shares which have
been reacquired by the Company. Subject to adjustment as provided in Section 16
hereof, the maximum number of shares on which options may be exercised or other
awards issued under this Plan shall be 2,500,000 shares. If an option or award
under the Plan expires, or for any reason is terminated or unexercised with
respect to any shares, such shares shall again be available for options or
awards thereafter granted during the term of the Plan.
Section 3. Administration of Plan.
(a) The Plan shall be administered by the Board of Directors of the
Company or a committee thereof. The members of any such committee shall be
appointed by and serve at the pleasure of the Board of Directors. (The group
administering the Plan shall hereinafter be referred to as the "Committee".)
(b) The Committee shall have plenary authority in its discretion, but
subject to the express provisions of the Plan: (i) to determine the purchase
price of the Common Stock covered by each option or award, (ii) to determine the
employees to whom and the time or times at which such options and awards shall
be granted and the number of shares to be subject to each, (iii) to determine
the form of payment to be made upon the exercise of an SAR or in connection with
performance awards, either cash, Common Shares of the Company or a combination
thereof, (iv) to determine the terms of exercise of each option and award, (v)
to accelerate the time at which
1
<PAGE>
all or any part of an option or award may be exercised, (vi) to amend or modify
the terms of any option or award with the consent of the optionee, (vii) to
interpret the Plan, (viii) to prescribe, amend and rescind rules and regulations
relating to the Plan, (ix) to determine the terms and provisions of each option
and award agreement under the Plan (which agreements need not be identical),
including the designation of those options intended to be Incentive Stock
Options, and (x) to make all other determinations necessary or advisable for the
administration of the Plan, subject to the exclusive authority of the Board of
Directors under Section 17 herein to amend or terminate the Plan. The
Committee's determinations on the foregoing matters, unless otherwise
disapproved by the Board of Directors of the Company, shall be final and
conclusive.
(c) The Committee shall select one of its members as its Chair and
shall hold its meetings at such times and places as it may determine. A majority
of its members shall constitute a quorum. All determinations of the Committee
shall be made by not less than a majority of its members. Any decision or
determination reduced to writing and signed by all of the members of the
Committee shall be fully effective as if it had been made by a majority vote at
a meeting duly called and held. The grant of an option or award shall be
effective only if a written agreement shall have been duly executed and
delivered by and on behalf of the Company following such grant. The Committee
may appoint a Secretary and may make such rules and regulations for the conduct
of its business as it shall deem advisable.
Section 4. Eligibility and Grant.
(a) Eligibility. Incentive Stock Options may only be granted under this
Plan to any full or part-time employee (which term as used herein includes, but
is not limited to, officers and directors who are also employees) of the Company
and of its present and future subsidiary corporations within the meaning of
Section 424(f) of the Code (herein called "subsidiaries"). Full or part-time
employees, directors who are not employees, consultants or independent
contractors to the Company or one of its subsidiaries or affiliates shall be
eligible to receive options which do not qualify as Incentive Stock Options and
awards. In determining the persons to whom options and awards shall be granted
and the number of shares subject to each, the Committee may take into account
the nature of services rendered by the respective employees or consultants,
their present and potential contributions to the success of the Company and such
other factors as the Committee in its discretion shall deem relevant.
(b) Grant of Additional Options. A person who has been granted an
option or award under this Plan may be granted additional options or awards
under the Plan if the Committee shall so determine; provided, however, that to
the extent the aggregate fair market value (determined at the time the Incentive
Stock Option is granted) of the Common Shares with respect to which all
Incentive Stock Options are exercisable for the first time by an employee during
any calendar year (under all plans described in subsection (d) of Section 422 of
the Code of his or her employer corporation and its parent and subsidiary
corporations) exceeds $100,000, such options shall be treated as options that do
not qualify as Incentive Stock Options. Nothing in the Plan or in any agreement
thereunder shall confer on any employee any right to continue in the employ of
the Company or any of its subsidiaries or affect, in any way, the right of the
Company or any of its subsidiaries to terminate his or her employment at any
time.
2
<PAGE>
Section 5. Price.
The option price for all Incentive Stock Options granted under the Plan
shall be determined by the Committee but shall not be less than 100% of the fair
market value of the Common Shares at the date of grant of such option. The
option price for options granted under the Plan that do not qualify as Incentive
Stock Options and, if applicable, the price for all awards shall also be
determined by the Committee. For purposes of the preceding sentence and for all
other valuation purposes under the Plan, the fair market value of the Common
Shares shall be as reasonably determined by the Committee. If on the date of
grant of any option or award hereunder the Common Shares are not traded on an
established securities market, the Committee shall make a good faith attempt to
satisfy the requirements of this Section 5 and in connection therewith shall
take such action as it deems necessary or advisable.
Section 6. Term.
Each option and award and all rights and obligations thereunder shall
expire on the date determined by the Committee and specified in the option or
award agreement. The Committee shall be under no duty to provide terms of like
duration for options or awards granted under the Plan, but the term of an
Incentive Stock Option may not extend more than ten (10) years from the date of
grant of such option and the term of options granted under the Plan which do not
qualify as Incentive Stock Options may not extend more than fifteen (15) years
from the date of granting of such option.
Section 7. Exercise of Option or Award.
(a) Exercisability. The Committee shall have full and complete
authority to determine whether an option or award will be exercisable in full at
any time or from time to time during the term thereof, or to provide for the
exercise thereof in such installments, upon the occurrence of such events (such
as termination of employment for any reason) and at such times during the term
of the option as the Committee may determine and specify in the option or award
agreement.
(b) No Violation of State or Federal Laws. The exercise of any option
or award granted hereunder shall only be effective at such time that the sale of
Common Shares pursuant to such exercise will not violate any state or federal
securities or other laws.
(c) Method of Exercise. An optionee or grantee electing to exercise an
option or award shall give written notice to the Company of such election and of
the number of shares subject to such exercise. The full purchase price of such
shares shall be tendered with such notice of exercise. Payment shall be made to
the Company in cash (including bank check, certified check, personal check, or
money order), or, at the discretion of the Committee and as specified by the
Committee, (i) by delivering certificates for the Company's Common Shares
already owned by the optionee or grantee having a fair market value as of the
date of grant equal to the full purchase price of the shares, or (ii) by
delivering the optionee's or grantee's promissory note, which shall
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<PAGE>
provide for interest at a rate not less than the minimum rate required to avoid
the imputation of income, original issue discount or a below-market-rate loan
pursuant to Sections 483, 1274 or 7872 of the Code or any successor provisions
thereto, or (iii) a combination of cash, the optionee's or grantee promissory
note and such shares. The fair market value of such tendered shares shall be
determined as provided in Section 5 herein. The optionee's or grantee's
promissory note shall be a full recourse liability of the optionee and may, at
the discretion of the Committee, be secured by a pledge of the shares being
purchased. Until such person has been issued the shares subject to such
exercise, he or she shall possess no rights as a shareholder with respect to
such shares.
Section 8. Restoration Options.
The Committee may grant "restoration" options, separately or together
with another option, pursuant to which, subject to the terms and conditions
established by the Committee and any applicable requirements of Rule 16b-3
promulgated under the Exchange Act or any other applicable law, the optionee
would be granted a new option when the payment of the exercise price of the
option to which such "restoration" option relates is made by the delivery of
shares of the Company's Common Shares owned by the optionee, as described in
this Section 8, which new option would be an option to purchase the number of
shares not exceeding the sum of (a) the number of shares of the Company's Common
Shares tendered as payment upon the exercise of the option to which such
"restoration" option relates and (b) the number of shares of the Company's
Common Shares, if any, tendered as payment of the amount to be withheld under
applicable income tax laws in connection with the exercise of the option to
which such "restoration" option relates, as described in Section 12 hereof.
"Restoration" options may be granted with respect to options previously granted
under this Plan or any prior stock option plan of the Company, and may be
granted in connection with any option granted under this Plan at the time of
such grant. The purchase price of the Common Shares under each such new option,
and the other terms and conditions of such option, shall be determined by the
Committee, consistent with the provisions of the Plan.
Section 9. Stock Appreciation Rights.
(a) Grant. At the time of grant of an option or award under the Plan
(or at any other time), the Committee, in its discretion, may grant a Stock
Appreciation Right ("SAR") evidenced by an agreement in such form as the
Committee shall from time to time approve. Any such SAR may be subject to
restrictions on the exercise thereof as may be set forth in the agreement
representing such SAR, which agreement shall comply with and be subject to the
following terms and conditions and any additional terms and conditions
established by the Committee that are consistent with the terms of the Plan.
(b) Exercise. An SAR shall be exercised by the delivery to the Company
of a written notice which shall state that the holder thereof elects to exercise
his or her SAR as to the number of shares specified in the notice and which
shall further state what portion, if any, of the SAR exercise amount
(hereinafter defined) the holder thereof requests is to be paid in cash and what
portion, if any, is to be paid in Common Shares of the Company. The Committee
promptly
4
<PAGE>
shall cause to be paid to such holder the SAR exercise amount either in cash, in
Common Shares of the Company, or any combination of cash and shares as the
Committee may determine. Such determination may be either in accordance with the
request made by the holder of the SAR or in the sole and absolute discretion of
the Committee. The SAR exercise amount is the excess of the fair market value of
one share of the Company's Common Shares on the date of exercise over the per
share exercise price in respect of which the SAR was granted, multiplied by the
number of shares as to which the SAR is exercised. For the purposes hereof, the
fair market value of the Company's shares shall be determined as provided in
Section 5 herein.
Section 10. Restricted Stock Awards.
Awards of Common Shares subject to forfeiture and transfer restrictions
may be granted by the Committee. Any restricted stock award shall be evidenced
by an agreement in such form as the Committee shall from time to time approve,
which agreement shall comply with and be subject to the following terms and
conditions and any additional terms and conditions established by the Committee
that are consistent with the terms of the Plan:
(a) Grant of Restricted Stock Awards. Each restricted stock award made
under the Plan shall be for such number of Common Shares as shall be determined
by the Committee and set forth in the agreement containing the terms of such
restricted stock award. Such agreement shall set forth a period of time during
which the grantee must remain in the continuous employment of the Company in
order for the forfeiture and transfer restrictions to lapse. If the Committee so
determines, the restrictions may lapse during such restricted period in
installments with respect to specified portions of the shares covered by the
restricted stock award. The agreement may also, in the discretion of the
Committee, set forth performance or other conditions that will subject the
Common Shares to forfeiture and transfer restrictions. The Committee may, at its
discretion, waive all or any part of the restrictions applicable to any or all
outstanding restricted stock awards.
(b) Delivery of Common Shares and Restrictions. At the time of a
restricted stock award, a certificate representing the number of Common shares
awarded thereunder shall be registered in the name of the grantee. Such
certificate shall be held by the Company or any custodian appointed by the
Company for the account of the grantee subject to the terms and conditions of
the Plan, and shall bear such a legend setting forth the restrictions imposed
thereon as the Committee, in its discretion, may determine. The grantee shall
have all rights of a shareholder with respect to the Common Shares, including
the right to receive dividends and the right to vote such shares, subject to the
following restrictions: (i) the grantee shall not be entitled to delivery of the
stock certificate until the expiration of the restricted period and the
fulfillment of any other restrictive conditions set forth in the restricted
stock agreement with respect to such Common Shares; (ii) none of the Common
Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of during such restricted period or until after the
fulfillment of any such other restrictive conditions; and (iii) except as
otherwise determined by the Committee, all of the Common Shares shall be
forfeited and all rights of the grantee to such Common Shares shall terminate,
without further obligation on the part of the Company, unless the grantee
remains in the continuous employment of the Company for the entire restricted
period in
5
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relation to which such Common Shares were granted and unless any other
restrictive conditions relating to the restricted stock award are met. Any
Common Shares, any other securities of the Company and any other property
(except for cash dividends) distributed with respect to the Common Shares
subject to restricted stock awards shall be subject to the same restrictions,
terms and conditions as such restricted Common Shares.
(c) Termination of Restrictions. At the end of the restricted period
and provided that any other restrictive conditions of the restricted stock award
are met, or at such earlier time as otherwise determined by the Committee, all
restrictions set forth in the agreement relating to the restricted stock award
or in the Plan shall lapse as to the restricted Common Shares subject thereto,
and a stock certificate for the appropriate number of Common Shares, free of the
restrictions and the restricted stock legend, shall be delivered to the grantee
or his or her beneficiary or estate, as the case may be.
Section 11. Performance Awards.
The Committee is further authorized to grant performance awards.
Subject to the terms of this Plan and any applicable award agreement, a
performance award granted under the Plan (i) may be denominated or payable in
cash, Common Shares (including, without limitation, restricted stock), other
securities, other awards, or other property and (ii) shall confer on the holder
thereof rights valued as determined by the Committee, in its discretion, and
payable to, or exercisable by, the holder of the Performance awards, in whole or
in part, upon the achievement of such performance goals during such performance
periods as the Committee, in its discretion, shall establish. Subject to the
terms of this Plan and any applicable award agreement, the performance goals to
be achieved during any performance period, the length of any performance period,
the amount of any Performance award granted, and the amount of any payment or
transfer to be made by the grantee and by the Company under any Performance
award shall be determined by the Committee.
Section 12. Income Tax Withholding and Tax Bonuses.
(a) Withholding of Taxes. In order to comply with all applicable
federal or state income tax laws or regulations, the Company may take such
action as it deems appropriate to ensure that all applicable federal or state
payroll, withholding, income or other taxes, which are the sole and absolute
responsibility of an optionee or grantee under the Plan, are withheld or
collected from such optionee or grantee. In order to assist an optionee or
grantee in paying all federal and state taxes to be withheld or collected upon
exercise of an option or award which does not qualify as an Incentive Stock
Option hereunder, the Committee, in its absolute discretion and subject to such
additional terms and conditions as it may adopt, shall permit the optionee or
grantee to satisfy such tax obligation by (i) electing to have the Company
withhold a portion of the shares otherwise to be delivered upon exercise of such
option or award with a fair market value, determined in accordance with Section
5 herein, equal to such taxes or (ii) delivering to the Company
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<PAGE>
Common Shares other than the shares issuable upon exercise of such option or
award with a fair market value, determined in accordance with Section 5, equal
to such taxes.
(b) Tax Bonus. The Committee shall have the authority, at the time of
grant of an option under the Plan or at any time thereafter, to approve tax
bonuses to designated optionees or grantees to be paid upon their exercise of
options or awards granted hereunder. The amount of any such payments shall be
determined by the Committee. The Committee shall have full authority in its
absolute discretion to determine the amount of any such tax bonus and the terms
and conditions affecting the vesting and payment thereafter.
Section 13. Additional Restrictions.
The Committee shall have full and complete authority to determine
whether all or any part of the Common Shares of the Company acquired upon
exercise of any of the options or awards granted under the Plan shall be subject
to restrictions on the transferability thereof or any other restrictions
affecting in any manner the optionee's or grantee's rights with respect thereto,
but any such restriction shall be contained in the agreement relating to such
options or awards.
Section 14. Ten Percent Shareholder Rule.
Notwithstanding any other provision in the Plan, if at the time an
option is otherwise to be granted pursuant to the Plan the optionee owns
directly or indirectly (within the meaning of Section 424(d) of the Code) Common
Shares of the Company possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company or its parent or
subsidiary corporations, if any (within the meaning of Section 422(b)(6) of the
Code), then any Incentive Stock Option to be granted to such optionee pursuant
to the Plan shall satisfy the requirements of Section 422(c)(5) of the Code, and
the option price shall be not less than 110% of the fair market value of the
Common Shares of the Company determined as described herein, and such option by
its terms shall not be exercisable after the expiration of five (5) years from
the date such option is granted.
Section 15. Non-Transferability.
No option or award granted under the Plan shall be transferable by an
optionee or grantee, otherwise than by will or the laws of descent or
distribution. Except as otherwise provided in an option or award agreement,
during the lifetime of an optionee or grantee, the option shall be exercisable
only by such optionee or grantee.
Section 16. Dilution or Other Adjustments.
If there shall be any change in the Common Shares through merger,
consolidation, reorganization, recapitalization, dividend in the form of stock
(of whatever amount), stock split or other change in the corporate structure,
appropriate adjustments in the Plan and outstanding
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<PAGE>
options and awards shall be made by the Committee. In the event of any such
changes, adjustments shall include, where appropriate, changes in the aggregate
number of shares subject to the Plan, the number of shares and the price per
share subject to outstanding options and awards and the amount payable upon
exercise of outstanding awards, in order to prevent dilution or enlargement of
option or award rights.
Section 17. Amendment or Discontinuance of Plan.
The Board of Directors may amend or discontinue the Plan at any time.
Subject to the provisions of Section 16 no amendment of the Plan, however, shall
be without shareholder approval: (i) increase the maximum number of shares under
the Plan as provided in Section 2 herein, (ii) decrease the minimum price
provided in Section 5 herein, (iii) extend the maximum term under Section 6, or
(iv) modify the eligibility requirements for participation in the Plan. The
Board of Directors shall not alter or impair any option or award theretofore
granted under the Plan without the consent of the holder of the option.
Section 18. Time of Granting.
Nothing contained in the Plan or in any resolution adopted or to be
adopted by the Board of Directors or by the shareholders of the Company, and no
action taken by the Committee or the Board of Directors (other than the
execution and delivery of an option or award agreement), shall constitute the
granting of an option or award hereunder.
Section 19. Effective Date and Termination of Plan.
(a) The Plan was approved by the Board of Directors on March 23, 1994,
and shall be approved by the shareholders of the Company within twelve (12)
months thereof.
(b) Unless the Plan shall have been discontinued as provided in Section
16 hereof, the Plan shall terminate March 23, 2004. No option or award may be
granted after such termination, but termination of the Plan shall not, without
the consent of the optionee or grantee, alter or impair any rights or
obligations under any option or award theretofore granted.
8
<PAGE>
Please mark, sign and date your proxy card and return it in the postage-paid
envelope provided.
-- Please detach here --
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3.
1.Election of directors: [_] Vote [_] Vote
01 Gary J. Beeman FOR WITHHELD
02 James A. Bernards all from all
03 Robert W. Heller nominees nominees
04 David C. Malmberg
05 Robert C. Szymborski
06 Richard J. York
(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 approve an amendment [_] For [_] Against [_] Abstain
to the Company's 1994 Long-Term
Incentive and Stock Option Plan
(the "Plan") increasing the
number of shares subject to the
plan from 2,000,000 to
2,500,000.
3. In their discretion, the Proxies [_] For [_] Against [_] Abstain
are authorized to vote upon such
other business as may properly come
before the Annual Meeting of
Shareholders.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF
NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR EACH ITEM.
Date ______________
Address Change? Mark Box [_] Indicate changes below:
--------------------------------------
--------------------------------------
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. Corpora-
tions should provide full name of
corpora-tion and title of au-thorized
officer sign-ing the Proxy.
<PAGE>
FIELDWORKS, INCORPORATED
ANNUAL MEETING
Tuesday May 18, 1999
3:00 p.m. Central Time
Minneapolis Marriott, Southwest
5801 Opus Parkway
Minnetonka, Minnesota
FIELDWORKS, INCORPORATED
7631 Anagram Drive, Eden Prairie, MN 55344 Proxy
- --------------------------------------------------------------------------------
This Proxy is solicited on behalf of the Board of Directors.
The undersigned hereby appoints David C. Malmberg and Karen L. Engebretson, and
each of them, with full power to appoint a substitute, to vote all shares the
undersigned is entitled to vote at the Annual Meeting of Shareholders of
FieldWorks, Incorporated to be held on May 18, 1999, and at all adjournments
thereof, as specified below on the matters referred to, and, in their
discretion, upon any other matters which may be brought before the meeting:
If no choice is specified, the proxy will be voted "FOR" each item.
See reverse for voting instructions.
