<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
- --------------------------------------------------------------------------------
(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:
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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
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[_] 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
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Notes:
<PAGE>
FIELDWORKS, INCORPORATED
7631 Anagram Drive
Eden Prairie, MN 55344
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Monday, May 15, 2000
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 Monday, May 15, 2000,
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 seven members of the Board of Directors.
2. To approve an amendment to the 1996 Directors' Stock Option Plan to
increase the number of shares issuable thereunder from 300,000 to
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 and Preferred Stock at
the close of business on March 29, 2000, 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 G. Mell
David G. Mell
President and Chief Executive Officer
Eden Prairie, MN
April 4, 2000
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
Monday May 15, 2000
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 Monday
May 15, 2000, 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 4, 2000.
Those shares of the Company's Common Stock, $.001 par value (the "Common
Stock") and those shares of the Company's Series B Convertible Participating
Preferred Stock, $.001 par value, entitled to vote, on an as if converted basis
(the "Preferred 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 2,
2000, is being furnished to each shareholder with this proxy statement.
Only the holders of the Common Stock and Preferred Stock whose names appeared of
record on the Company's books at the close of business on March 29, 2000, will
be entitled to vote at the Annual Meeting. At the close of business on such
date, a total of 8,894,426 shares of such Common Stock and 4,250,000
shares of such Preferred Stock were outstanding, each share being entitled to
one vote.
<PAGE>
ITEM ONE
ELECTION OF DIRECTORS
Nominees
The Company's Board of Directors currently has seven members: James A.
Bernards, Richard J. Boyle, Robert D.D. Forbes, Marvin W. Goldstein, Michael E.
Johnson, David C. Malmberg and David G. Mell. 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 seven 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. Bernards, Boyle, Forbes, Goldstein, Johnson,
Malmberg and Mell. 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 or Preferred 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 and
Preferred Stock present at the Annual Meeting and entitled to vote for the
election of directors or (2) 13,144,426 shares of Common Stock and
Preferred Stock which represents a majority of the shares of Common Stock and
Preferred Stock outstanding on the Record Date of March 29, 2000. 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:
Principal occupation and business
Name Age experience for past five years
- -------------- --- ------------------------------
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.
-2-
<PAGE>
Principal occupation and business
Name Age experience for past five years
- -------------- --- ------------------------------
Richard J. Boyle.......... 65 Mr. Boyle has been a director of the Company
since February 2000. He is a director of
Glenmount Investment, LLC, the general partner
of Glenmount International, L.P., since
February 1998. He has been a director and
Chairman and Chief Executive Officer of
Spinnaker Industries Inc., a manufacturer and
marketer of adhesive-backed materials, since
June 1994. Mr. Boyle also has served as a
Managing Director of Boyle Fleming & Co.,
Inc., an investment and management firm, since
1993. From 1990 to 1992, Mr. Boyle was
President and Chief Executive Officer of LTV
Aerospace and Defense Company, a manufacturer
of aircraft, missiles and specialty vehicles.
He was Corporate Vice President, Marketing and
Business Development of Honeywell Inc., a
provider of products and systems for the
industrial, building, space and marine markets
from 1987 to 1990. Mr. Boyle is a director of
several privately held companies.
Robert D. D. Forbes....... 50 Mr. Forbes has been a director of the Company
since February 2000. He has been a director of
Glenmount Investment, LLC, the general partner
of Glenmount International, L.P., since
February 1998. He was a founder of Glenmount
International, L.P., and has been Managing
Director of Glenmount, LLC, the manager of
Glenmount International, L.P., since January
1998. From 1995 to 1997, Mr. Forbes was Senior
Vice President of BCE Capital Inc., a growth
capital affiliate of Northern Telecom
("Nortel"). From 1989 to 1995, he was Vice
President, Corporate Development of Derlan
Industries Limited, an industrial technology
company.
Marvin W. Goldstein....... 56 Mr. Goldstein has been a director of the
Company since March 2000. He has been a
private investor since 1997. From August 1995
through April 1997, Mr. Goldstein was Chairman
of the Board, Chief Executive Officer and
President of Pet Food Warehouse, Inc., a
specialty retailer. From 1998 to 1999, he
served in various positions at the Department
Store Division of Dayton Hudson Corporation,
including President and Chief Operating
Officer, Chairman and Chief Executive Officer.
He serves on the boards of directors of
Buffet's Inc., A.R.C.A., Inc., Paper
Warehouse, Inc., and Wilson's, the Leather
Experts Inc., and several privately held
companies.
-3-
<PAGE>
<TABLE>
<CAPTION>
Principal occupation and business
Name Age experience for past five years
---- --- ------------------------------
<S> <C>
Michael E. Johnson........ 39 Mr. Johnson has been a director of the Company since
February 2000. He has been a director of Glenmount
Investment, LLC, the general partner of Glenmount
International, L.P., since February 1998. He is a
founder of Glenmount International, L.P., and has been
Managing Director of Glenmount, LLC, the manager of
Glenmount International, L.P., since January 1998.
Mr. Johnson was the founder of Bainbridge Group, a law
corporation, and served as its President and Chief
Executive Officer from 1994 to 1998. From 1990 to
1994, he was counsel with Jones, Day, Reavis & Pogue,
an international law firm.
David C. Malmberg......... 57 Mr. Malmberg has served as Chairman of the Board of
Directors since January 1997 and as a director of the
Company since October 1996. From July 1998 until July
1999, he 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 Bancorporation,
Chairman of the Board of Three Five Systems, Inc. and
serves on the board of directors of PPT/Vision, Inc.
David G. Mell............. 53 Mr. Mell has served as a director of the Company since
September 1999. Mr. Mell joined the Company as
President and Chief Operating Officer in May 1999 and
was named Chief Executive Officer of the Company in
July 1999. From 1996 to 1998, he was Vice President
of Business Processes for Imation, a data storage and
information management company spun off from 3M in
1996. From 1992 to 1996, Mr. Mell was Vice President
and General Manager of the Data Storage Division of
3M, serving the computer industry.
</TABLE>
-4-
<PAGE>
Principal occupation and business
Name Age experience for past five years
---- --- ------------------------------
The following information is furnished with respect to other non-director
executive officers:
Karen L. Engebretson 36 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.
Meetings
During the fiscal year ended January 2, 2000, the Board of Directors of the
Company held five 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 2, 2000. 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.
Mr. Bernards has served on both the Audit and the Compensation Committees since
his appointment to the Board of Directors in January 1999. Mr. Malmberg served
on the Audit Committee during the full fiscal year ended January 2, 2000.
Former director Richard J. York, who resigned in February 2000, served as a
member of both the Audit and the Compensation Committees during the full fiscal
year ended January 2, 2000. Mr. Boyle and Mr. Forbes have served on the
Compensation Committee and Mr. Boyle and Mr. Johnson have served on the Audit
Committee since their appointments to the Board of Directors in February 2000.
The Company does not have a nominating or similar committee.
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
-5-
<PAGE>
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.
Board of Directors' Recommendation and Vote Required
- ----------------------------------------------------
The Board of Directors recommends a vote FOR Item One. 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
requires the greater of (1) a majority of the voting power of the shares of
Common Stock and Preferred Stock present at the Annual Meeting and entitled to
vote for the election of directors or (2) 6,572,214 shares of Common Stock
and Preferred Stock is required for the election of each director.
-6-
<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 and market the
Company's products, solutions 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, 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 comparable industry
companies. By augmenting base salary with equity-based compensation, the
Company seeks to attract and retain quality management personnel.
-7-
<PAGE>
Cash Incentive Compensation
The Compensation Committee establishes an executive cash bonus plan
annually. The bonus plan assigns to each executive, based upon the Committee's
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.
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 1999 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 4, 1999, a resolution was adopted by Compensation Committee to
grant repriced incentive stock options to all non-director employees for all
outstanding incentive stock options. The existing options were cancelled and
reissued at an exercise price of $1.25 which represented the fair market value
of the underlying stock on that date. The vesting schedule of all repriced
options was changed on November 30, 1999, 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 $2.50 per share for 40
consecutive days, 33% vesting when the Company's stock price sustains an average
closing price of $3.75 per share for 40 consecutive days and 33% vesting when
the Company's stock price sustains an average closing price of $5.00 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 value of options with higher exercise prices. The
decision to reprice was based upon numerous
-8-
<PAGE>
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.
At its January 12, 2000, meeting, the Financial Accounting Standards Board
(FASB) reached tentative conclusions regarding the effective date and transition
for its proposed Interpretation, Accounting for Certain Transactions involving
Stock Compensation. The FASB has set December 15, 1998, as the tentative
reference date for stock option repricing. As the Company repriced outstanding
options on August 4, 1999, after the tentative reference date, variable award
accounting will apply prospectively from the effective date of July 1, 2000.
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 1999, Mr. David C. Malmberg was Chief Executive Officer until July
31, 1999. Compensation for Mr. Malmberg for 1999 is set forth in the table
below.
Mr. David G. Mell was named Chief Executive Officer in addition to his role
as President of the Company on July 31, 1999. The annual base salary, annual
cash bonus and stock option grant for Mr. Mell was determined by the
Compensation Committee.
Annual compensation is summarized in the following table. Compensation for
subsequent years will be determined by the Compensation Committee.
James A. Bernards
Richard J. Boyle
Robert D.D. Forbes
-9-
<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 1997, Ronald E. Lewis, Chief Executive Officer from March
1997 through June 1998, David C. Malmberg, Chief Executive Officer of the
Company from July 1998 through July 1999, David G. Mell, Chief Executive Officer
of the Company from July 1999 to present, Karen L. Engebretson, Vice President
and Chief Financial Officer and Robert C. Szymborski, Vice President of the
Company, the only two other executive officers whose salary and bonus earned in
the fiscal year ended January 2, 2000, 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>
David G. Mell (2) 1999 $ 91,731 $21,750(3) -- 200,000 $19,046(4)
President and Chief 1998 -- -- -- -- --
Executive Officer 1997 -- -- -- -- --
David C. Malmberg (5) 1999 53,436 -- -- 140,000(6) 63(7)
Chief Executive Officer 1998 30,000 -- -- 290,000(6) 42(7)
1997 -- -- -- -- 30,000(8)
Ronald E. Lewis (9) 1999 -- -- -- -- 18,058(10)
President and Chief 1998 77,523 235(11) 4,350 -- 75,865(10)
Executive Officer 1997 96,923 50,142(12) 3,600 250,000 185(7)
Gary J. Beeman (13) 1999 140,000 -- 5,400 -- 84(7)
Vice President 1998 140,000 235(11) 5,400 -- 2,997(14)
1997 145,385 25,142 5,850 -- 185(7)
Robert C. Szymborski 1999 140,000 -- 5,400 -- 2,992(14)
Vice President (15) 1998 140,000 235(11) 5,400 -- 2,989(14)
1997 145,385 25,142 5,850 -- 185(7)
Karen L. Engebretson 1999 100,000 8,285(3) -- 50,000 2,084(14)
Vice President and 1998 90,742 235(11) -- -- 2,189(14)
Chief Financial Officer 1997 36,351 9,155(16) -- 30,000 77(7)
</TABLE>
(1) Represents payment of automobile allowance.
(2) Mr. Mell joined the Company as President in May 1999 and was named Chief
Executive Officer in July 1999.
(3) Bonus paid in 2000 for 1999 performance.
-10-
<PAGE>
(4) Represents $17,500 paid to Mr. Mell for consulting services prior to
becoming an employee, $1,500 for 401K Company match and $46 in premiums
paid by the Company on life insurance polices for the benefit of Mr. Mell.
(5) Mr. Malmberg was Chief Executive Officer from July 1998 through July 1999.
(6) Mr. Malmberg was granted 140,000 non-incentive stock options in July 1999
upon his resignation as Chief Executive Officer in lieu of the cancellation
of 290,000 stock options which were issued in 1998.
(7) Represents premiums paid by the Company on life insurance policies for the
benefit of the respective executive officer.
(8) Represents the payments made to Mr. Malmberg based on his 1997 consulting
agreement with the Company prior to becoming an employee.
(9) 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.
(10) Represents the severance package paid to Mr. Lewis after his resignation in
July 1998.
(11) Represents prorata share of an all-employee bonus for company-wide
objectives relating to unit shipments and quality which was paid in 1998.
(12) Includes $50,000 bonus paid in 1998 for 1997 performance.
(13) Mr. Beeman was Chief Executive Officer until March 1998.
(14) Represents the 401K Company match and premiums paid by the Company on life
insurance policies for the benefit of the respective executive officer.
(15) Mr. Szymborski resigned from the Board of Directors in February 2000.
(16) Bonus paid in 1998 for 1997 performance.
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<PAGE>
Stock Options
The following table sets forth information with respect to options granted to
the Named Executive Officers in the fiscal year ended January 2, 2000:
<TABLE>
<CAPTION>
Option Grants in Fiscal Year 1999 Potential Realizable
Value at Assumed
Annual
% of Total Rates of Stock Price
Options Options Granted Exercise Appreciation for
Granted to Employees Price Per Expiration Option Term (1)
Name (#) In 1999 ($/Sh) Date 5%($) 10%($)
---- ------------ ------- --------- ---- ------- ------
<S> <C> <C> <C> <C> <C> <C>
David G. Mell 200,000(2) 13.0% 1.25 8/4/06 101,775 237,180
David C. Malmberg 140,000(3) -- $1.25 7/30/06 $ 71,245 $166,025
Ronald E. Lewis -- -- -- -- -- --
Gary J. Beeman -- -- -- -- -- --
Robert C. Szymborski -- -- -- -- -- --
Karen L. Engebretson 50,000(4) 3.3% 1.25 8/4/06 25,445 59,295
</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) 25% of these options vested on August 4, 1999. These options will vest in
full on March 4, 2006 subject to accelerated vesting in cumulative 25%
increments based upon the Company's stock performance.
(3) 100% vested on July 30, 1999. Following his resignation as Chief
Executive Officer, Mr. Malmberg was granted 140,000 non-incentive stock
options for duties performed under his consulting agreement entered into
between the Company and Mr. Malmberg.
(4) 40% of these options vested on July 30, 1999. These options will vest in
full on March 2, 2006 subject to accelerated vesting in cumulative 20%
increments based upon the Company's stock performance.
The following table sets forth information with respect to the
exercise of options during fiscal year 1999 and the value of options held by the
Named Executive Officers as of January 2, 2000:
<TABLE>
<CAPTION>
Aggregated Option Exercises in Fiscal Year 1999 and Fiscal Year End Option Values
Number of Shares Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at End of 1999 at End of 1999 (1)
Acquired Value ---------------------- ------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David G. Mell -- -- 50,000 150,000 --(2) --
David C. Malmberg -- -- 245,000 50,000 --(2) --
Ronald E. Lewis -- -- -- -- -- --
Gary J. Beeman -- -- 50,000 -- --(2) --
Robert C. Szymborski -- -- 50,000 -- --(2) --
Karen Engebretson -- -- 20,000 60,000 --(2) --
</TABLE>
-12-
<PAGE>
(1) Represents the difference between the closing price of the Company's Common
Stock as reported on the NASDAQ National Market on December 31, 1999, and
the exercise price of the options.
(2) On December 31, 1999, the closing price of the Company's Common Stock was
less than the exercise price of the options.
Long-Term Incentive Plan Awards
Other than its 1994 Stock Option Plan, the Company does not maintain any
long-term incentive plans.
Employment Agreements
Gary J. Beeman, Founder and Vice Chairman of the Board, entered into a
Founders Non-Competition and Non-Solicitation Agreement on November 19, 1999.
The Agreement provides that upon any termination of employment by the Company
without good cause or upon any voluntary resignation of Mr. Beeman after the six
month anniversary date of the agreement, Mr. Beeman shall be entitled to receive
his base salary (at the level in existence immediately prior to such
termination) for a period of twelve months after such termination, subject to
compliance with the provisions of the Agreement. For a period of twelve months
after termination of Mr. Beeman's employment with the Company (whether as a
result of resignation, termination by the Company for good cause or termination
by the Company without good cause), Mr. Beeman agrees to comply with the non-
compete and non-solicitation provisions of the agreement. Mr. Beeman currently
receives an annual base salary of $140,000.
Robert C. Szymborski, Founder of the Company, entered into a Memo of
Understanding and Agreement and a Founders Non-Competition and Non-Solicitation
Agreement on November 18, 1999. The Memo of Understanding and Agreement
provides for salary and automobile allowance continuation through December 31,
2000, if Mr. Szymborski's employment is terminated by the Company for reasons
other than cause. Mr. Szymborski's year 2000 annual base salary is $75,000
and he receives a monthly automobile allowance of $450. Beginning January 1,
2001, Mr. Szymborski is eligible to receive salary continuation in accordance
with the terms and conditions of the Founders Non-Competition and Non-
Solicitation Agreement. The Agreement provides that upon any termination of
employment by the Company without good cause or upon any voluntary resignation
of Mr. Szymborski after the six month anniversary date of the agreement, Mr.
Szymborski shall be entitled to receive his base salary (at the level in
existence immediately prior to such termination) for a period of twelve months
after such termination, subject to compliance with the provisions of the
Agreement. For a period of twelve months after termination of Mr. Szymborski's
employment with the Company (whether as a result of resignation, termination by
the Company for good cause or termination by the Company without good cause),
Mr. Szymborski agrees to comply with the non-compete and non-solicitation
provisions of the agreement.
-13-
<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.
[GRAPH APPEARS HERE]
Percentage Change In Shareholder Return
<TABLE>
<CAPTION>
March 20, 1997 January 4, 1998 January 3, 1999 January 2, 2000
-------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
FieldWorks, Inc. $100.00 $ 85.42 $ 46.88 $ 20.32
NASDAQ Composite 100.00 122.39 171.64 319.03
Index
NASDAQ Computer 100.00 140.00 218.83 448.84
Index
</TABLE>
-14-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of March 28, 2000 information regarding
the ownership of Common Stock and Preferred 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 and Preferred Stock. Except as otherwise indicated,
the shareholders listed in the table have sole voting and investment power with
respect to the shares indicated.
<TABLE>
<CAPTION>
Shares Beneficially Owned
----------------------------
Name and Address of Beneficial Owner Number(1) Percent
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Industrial-Works Holding Co., LLC (2)................ 4,350,000 32.8%
Robert C. Szymborski (3)............................. 845,416 6.4
Gary J. Beeman (4)................................... 458,152 3.5
David C. Malmberg (5)................................ 278,900 2.1
Marvin W. Goldstein (6).............................. 203,325 1.5
David G. Mell (7).................................... 76,500 *
James A. Bernards (8)................................ 64,175 *
Karen L. Engebretson (9)............................. 26,500 *
Richard J. Boyle (10)................................ 8,325 *
Robert D.D. Forbes (10).............................. 8,325 *
Michael E. Johnson (10).............................. 8,325 *
All executive officers and directors as a............ 1,977,943 14.4
group (9 persons)
</TABLE>
_______________
* 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 and Preferred Stock subject to options
or warrants currently exercisable or exercisable within 60 days of March 7,
2000 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 and Preferred Stock indicated.
(2) Includes 100,000 shares of Common Stock issuable upon exercise of warrants.
Industrial-Works Holding Co., LLC, a wholly-owned subsidiary of Glenmount
International, L.P., is located at 19200 Von Karman Avenue, Suite 400,
Irvine, CA 92612-1540. Mr. Richard J. Boyle, Mr. Robert D.D. Forbes and Mr.
Michael E. Johnson are Directors of Glenmount International, L.P., and
disclaim beneficial ownership of this investment.
-15-
<PAGE>
(3) Includes 50,000 shares of Common Stock issuable pursuant to currently
exercisable options and 12,500 shares of Common Stock issuable upon
exercise of warrants.
(4) Includes 50,000 shares of Common Stock issuable pursuant to currently
exercisable options.
(5) Includes 245,000 shares of Common Stock issuable pursuant to currently
exercisable options and 10,000 shares of Common Stock issuable upon
exercise of warrants.
(6) Includes 8,325 shares of Common Stock issuable pursuant to currently
exercisable options and 65,000 shares of Common Stock issuable upon
exercise of warrants.
(7) Includes 50,000 shares of Common Stock issuable pursuant to currently
exercisable options and 12,500 shares of Common Stock issuable upon
exercise of warrants.
(8) Includes 39,175 shares of Common Stock issuable pursuant to currently
exercisable options.
(9) Includes 20,000 shares of Common Stock issuable pursuant to currently
exercisable options.
(10) Includes 8,325 shares of Common Stock issuable pursuant to currently
exercisable options. See also Note 1.
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 2, 2000. 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 2, 2000.
-16-
<PAGE>
ITEM TWO
PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S
1996 DIRECTORS' STOCK OPTION PLAN,
AS AMENDED TO DATE (THE "PLAN"), TO INCREASE
THE NUMBER OF SHARES SUBJECT TO
THE PLAN FROM 300,000 TO 500,000.
The Board of Directors and the shareholders of the Company authorized and
adopted the FieldWorks, Incorporated 1996 Directors' Stock Option Plan (as
amended to date, the "Plan") in January of 1997. Under the Plan, each non-
employee director automatically receives options to purchase shares of Common
Stock of the Company as follows: 25,000 shares at the time of election to the
Board of Directors and 10,000 shares at each re-election. None of the options
under the Plan is an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended. The Plan initially authorized
the Company to grant options to purchase up to an aggregate of 300,000 shares of
Common Stock.
The purpose of the Plan is to promote the interests of the Company and its
stockholders by aiding the Company in attracting and retaining experienced and
knowledgeable non-employee directors capable of providing strategic direction
to, and assuring the future success of, the Company; to offer such non-employee
directors incentives to put forth maximum efforts for the long-term success of
the Company's business; and to afford them an opportunity to acquire proprietary
interests in the Company, thereby aligning the interests of such directors with
those of the Company's shareholders.
As of March 28, 2000, the Company had granted options to purchase 250,000
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 25,000 additional shares of Common Stock. The Company's management
believes that due to expanding the Board of Directors and continuing to provide
incentive to retain non-employee directors that the Company be able to grant a
greater number of options to its non-employee directors. As a result, on
February 7, 2000, the Board of Directors authorized an increase in the number of
shares of Common Stock that may be granted under the Plan from 300,000 shares to
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
20, 2000, was $2.375; 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 $475,000.
Item Two 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 300,000.
The following is a summary of the Plan that is qualified in its entirety by
reference to the actual text of the Plan, which is included as Attachment A.
-17-
<PAGE>
The Plan allows awards of stock options to non-employee directors of the
Company. The awards are more fully described below.
The option price is 100% of the fair market value of a share of Common Stock
on the date of grant of the option. The fair market value per share is the
closing price on the NASDAQ National Market System on the date of grant of the
option.
Options granted to non-employee directors upon the date such directors first
become members of the Board of Directors are exercisable in three equal annual
installments with the first one-third vesting on the date of grant and the two
remaining installments vesting on the first and second anniversary of such
grant. Options granted to non-employee directors who have served on the Board
of Directors since the last regular meeting of shareholders of the Company and
will continue to serve after the date of grant of such options become
exercisable six months subsequent to the date of grant.
In the event of changes in the Company's capitalization, including a merger,
consolidation, reorganization, recapitalization, dividend, stock split, or other
change in the corporate structure, adjustments in the Plan and outstanding
options shall be made by the Board of Directors if it determines an adjustment
to be appropriate. The aggregate number of shares subject to the Plan, the
number of shares and the price per share subject to outstanding options and the
amount payable upon exercise of outstanding options may be adjusted.
Generally, there is no taxable income to a participant in the Plan as a
result of the grant of an option. Upon exercise of such an option, the
difference between the exercise price and the fair market value at the time of
exercise will be subject to taxation as ordinary income.
When an option holder sells shares acquired by the exercise of an option, the
difference between the amount received and the adjusted tax basis of the shares
will be gain or loss.
Board of Directors' Recommendation and Vote Required
- ----------------------------------------------------
The Board of Directors recommends a vote FOR Item Two. 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 and
Preferred Stock present at the Annual Meeting and entitled to vote or (2)
6,572,214 shares of Common Stock and Preferred Stock.
Proxies solicited by the Board of Directors will be voted FOR Item Two unless
shareholders specify otherwise on their proxy cards.
-18-
<PAGE>
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 December 31, 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 16,
2000, 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.
-19-
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
The following portions of the Company's Annual Report to Shareholders are
incorporated herein by reference:
(a) Management's Discussion and Analysis of Financial Condition and
Results of Operations; and
(b) Form 10-K for the year ended January 2, 2000.
SHAREHOLDER PROPOSALS
Any proposal by a shareholder to be presented at the annual meeting of
shareholders to be held in 2001 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 10, 2000. Any other proposals to be presented at the annual meeting of
shareholders to be held in 2001 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 G. MELL
David G. Mell
President and Chief Executive Officer
Dated: April 4, 2000
-20-
<PAGE>
ATTACHMENT A
FIELDWORKS, INCORPORATED
SUMMARY OF THE 1996 DIRECTORS' STOCK OPTION PLAN
(As proposed to be amended)
This Plan shall be know as the "FieldWorks, Incorporated 1996
Directors' Stock Option Plan" and is hereinafter referred to as the "Plan". The
purpose of the Plan is to promote the interests of the Company and its
stockholders by aiding the Company in attracting and retaining experienced
knowledgeable non-employee directors capable of providing strategic direction
to, and assuring the future success of, the Company; to offer such non-employee
directors incentives to put forth maximum efforts for the long-term success of
the Company's business; and to afford them an opportunity to acquire proprietary
interests in the Company, thereby aligning the interests of such directors with
those of the Company's shareholders.
Under the Plan, each non-employee director automatically receives
options to purchase shares of Common Stock of the Company as follows: 25,000
shares at the time of election to the Board of Directors and 10,000 shares at
each re-election. None of the options under the Plan is an incentive stock
option within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").
The option price for shares of Common Stock subject to an option is
100% of the fair market value of a share of Common Stock on the date of grant of
the option. Determinations of fair market value under the Plan are made in
accordance with methods and procedures established from time to time by the
Board of Directors. However, if there is a public market for the Common Stock,
the fair market value per share is the closing price of the Common Stock in the
over-the-counter market on the date of grant or, if the Common Stock is traded
on the NASDAQ National Market System or listed on a stock exchange, the fair
market value per share is the closing price on such system or exchange on the
date of grant of the option.
Options may be exercised upon written notice to the Company and by
payment in full of the exercise price, either by check payable to the Company,
in shares of Common Stock, or in any combination thereof. The term of each
option is ten years.
If a non-employee director ceases to serve as a director of the
Company, such director may exercise his or her options to the extent he or she
was entitled to exercise such options at the date of cessation of service, or if
such non-employee director does not exercise such option (which he or she was
entitled to exercise) within the term of such option, the option will terminate.
However, if a non-employee director dies during the term of an option, and at
the time of death was serving as a director and had been so serving since the
grant of the option, the option may be exercised by such director's estate or by
a person acquiring the right by bequest or inheritance (but only to the extent
of the right to exercise that would have accrued had the director continued
living and remained serving as a director for six months after the date of
death). If a director's death occurs within thirty (30) days after the
cessation of such director's service on the Board of Directors, then the option
may be exercised by such director's estate or be a person who acquired the right
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of cessation of such director's service on the Board of
Directors.
-21-
<PAGE>
Options granted to non-employee directors upon the date such directors
first become members of the Board of Directors are exercisable in three equal
annual installments with the first one-third vesting on the date of grant and
the two remaining installments vesting on the first and second anniversary of
such grant. Options granted to non-employee directors who have served on the
Board of Directors since the last regular meeting of shareholders of the Company
and will continue to serve after the date of grant of such options become
exercisable six months subsequent to the date of grant.
The aggregate number of shares of the Company's Common Stock which may be
issued under all options granted pursuant to the Plan is 500,000 (subject to
adjustment upon certain changes in the Company's capitalization as described
below). If any shares of Common Stock subject to any option are not purchased
or are forfeited, or if any option terminates without the delivery of shares,
the shares previously used for such options will be available for future awards
under the Plan.
If there is any change in the capitalization of the Company through merger,
consolidation, reorganization, recapitalization, dividend or other distribution
(whether in the form of cash, shares of Common Stock, securities or other
property), stock split or other change in the corporate structure, adjustments
in the Plan and outstanding options shall be made by the Board of Directors if
it determines that an adjustment is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan. Such 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 the amount payable upon
exercise of outstanding options.
No option under the Plan is transferable by an optionee other than by will
or the laws of descent and distribution. Options are exercisable during an
optionee's lifetime only by the optionee.
The Board of Directors may amend or discontinue the Plan at any time. No
amendment of the Plan, however, may, without the approval of the shareholders,
be made that, absent such approval, would cause Rule 16b-3 under the Exchange
Act or Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") to become unavailable with respect to the Plan or would violate the
rules or regulations of the NASDAQ National Market, any other securities
exchange or the National Association of Securities Dealers, Inc. that are
applicable the Company.
The Plan terminates on January 20, 2007, and no awards may be made after
that date.
The Plan is not subject to any provisions of the Employee Retirement Income
Security Act of 1974.
The descriptions contained herein of the Plan and the awards thereunder do
not purport to be complete, and reference is made to the Plan and the award
agreements thereunder, and any amendments thereto, for a full statement of the
terms and provisions thereof.
-22-
<PAGE>
RESALE AND OTHER RESTRICTIONS
Non-employee directors of the Company will, in order to resell any shares
of the Company's capital stock acquired by them upon exercise of options granted
to them under the Plan, be required either to observe the resale limitations of
Rule 144 of the Securities Act of 1933, as amended (the "Securities Act"), or to
offer their shares for resale through the use of a "reoffer prospectus" filed by
the Company on their behalf pursuant to applicable rules and regulations of the
Securities and Exchange Commission.
Non-employee directors of the Company are also subject to the share
ownership reporting and short-swing trading liability rules promulgated under
Section 16 of the Exchange Act and, therefore, each director receiving options
under the Plan should consult with legal counsel prior to selling any shares of
capital stock, including shares acquire pursuant to the exercise of options
under the Plan.
FEDERAL INCOME TAX MATTERS
Due to the complexity of the applicable provisions of the Code, this
Prospectus only sets forth the general tax principles affecting options which
may be granted under the Plan. The general tax principles discussed below are
based on current federal income tax laws and regulations and are subject to
change that may be brought about by subsequent legislation or by regulations and
administrative interpretations and rulings, any of which may be applied on a
retroactive basis. Non-employee directors receiving options may be subject to
state or local income taxes and should refer to the applicable laws in those
jurisdictions. Each non-employee director receiving an option should consult
his or her own tax counsel on questions regarding tax liability upon the receipt
or exercise of an option or the subsequent disposition of shares received upon
exercise or otherwise. The Plan is not qualified under Section 401 of the Code.
Generally, there is no taxable income to a participant in the Plan as a
result of the grant of an option. Upon exercise of such an option, the
difference between the exercise price and the fair market value at the time of
exercise will be subject to taxation as ordinary income. The Company is not
entitled to a tax deduction upon grant of an option but is entitled to a tax
deduction equal to the employee's taxable income realized upon exercise of the
option.
If the optionholder purchases Common Stock for cash, the optionholder's
original tax basis in the shares received will be equal to the sum of the option
price for the shares plus the amount which the optionholder is required to
recognize as income as a result of the exercise of the option. If the
optionholder purchases shares by tendering other shares of the Common Stock of
the Company then owned by the optionholder, the optionholder will not recognize
gain or loss on the tendered shares, but the optionholder's original tax basis
for an equal number of acquired shares will be the same as the optionholder's
adjusted tax basis for the tendered shares. The remaining acquired shares will
have an original tax basis equal to the sum of the amount paid in cash, if any,
plus any amount which the optionholder is required to recognize as income as a
result of the exercise of the option.
-23-
<PAGE>
When an optionholder sells shares acquired by the exercise of an option,
the difference between the amount received and the adjusted tax basis of the
shares will be gain or loss. If, as usually is the case, the Common Stock is a
capital asset in the hands of the optionholder, such gain will be short-term or
long-term capital gain, depending upon whether the holding period for such
shares is more or less than one year.
An optionholder's holding period for shares acquired by exercising such an
option, for purposes of determining whether any capital gain or loss on their
subsequent sale is long-term or short-term, depending upon whether the holding
period is more or less than one year, shall begin at the time of the exercise of
the option, except that the optionholder's holding period for acquired shares
having the same basis as tendered shares shall include the period during which
the tendered shares were held if, as usually is the case, the Common Stock is a
capital asset in the hands of the holder.
-24-
<PAGE>
FIELDWORKS, INCORPORATED
ANNUAL MEETING
Monday, May 15, 2000
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 G. Mell 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 15, 2000, 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.
<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 and 2.
1. Election of directors:
01 James A. Bernards 04 Marvin W. Goldstein
02 Richard J. Boyle 05 Michael E. Johnson
03 Robert D.D. Forbes 06 David C. Malmberg
07 David G. Mell
[_] Vote FOR [_] Vote WITHHELD
all nominees from all nominees
----------------------------------------
----------------------------------------
(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 to the Company's 1996 Directors' Stock
Option Plan (the "Plan") increasing the number of shares subject to the
plan from 300,000 to 500,000.
[_] For [_] Against [_] Abstain
3. In their discretion, the Proxies 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.
Address Change? Mark Box [_] Indicate changes below:
Date______________________________
--------------------------------------------
--------------------------------------------
Signature(s) in Box Please sign exactly as
your name(s) appear on Proxy. If held in
joint tenancy, all persons must sign.
Trustees, administrators, etc., should
include title and authority. Corporations
should provide full name of corporation and
title of authorized officer signing the
Proxy.
