<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
NATIONAL WIRELESS HOLDINGS INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
NATIONAL WIRELESS HOLDINGS INC.
249 Royal Palm Way, Suite 301
Palm Beach, Florida 33480
March 23, 1998
To the Holders of Common Stock:
The annual meeting of stockholders will be held at the Biscayne Bay
Marriott, 1633 North Bayshore Drive, Miami, Florida 33132 at 11:00 a.m. (local
time) on April 17, 1998. A formal Notice of the Annual Meeting, a proxy card and
Proxy Statement are attached hereto.
You are cordially invited to attend the annual meeting in person; if this
should be impossible, we request that you sign, date, and mail your proxy card
promptly.
Prompt return of your voted proxy will reduce the cost of further mailings.
You may revoke your voted proxy at any time prior to the meeting or vote in
person if you attend the meeting.
It is always a pleasure for me and the other members of the Board of
Directors to meet with our stockholders. We look forward to greeting as many of
you as possible at the meeting.
Terrence S. Cassidy
President and
Chief Executive Officer
<PAGE>
NATIONAL WIRELESS HOLDINGS INC.
249 Royal Palm Way, Suite 301
Palm Beach, Florida 33480
NOTICE OF ANNUAL MEETING
April 17, 1998
To the Holders of Common Stock:
NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders of
National Wireless Holdings Inc. will be held at 11:00 a.m. (local time) at the
Biscayne Bay Marriott Hotel, 1633 North Bayshore Drive, Miami, Florida 33132, on
April 17, 1998, for the following purposes:
(1) To approve the 1997 Equity Incentive Plan;
(2) To elect one (1) director of the Company to serve for a three-year
term;
(3) To ratify the appointment of Coopers & Lybrand L.L.P. as independent
public accountants for the year 1998; and
(4) To take action upon any other matters that may properly come before
the meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Company will admit to the Annual Meeting stockholders of record,
persons holding proof of beneficial ownership or who have been granted proxies
and any other person that the Company, in its sole discretion, may elect to
admit. If you plan to attend the Annual Meeting, please check the appropriate
box on your proxy card.
<PAGE>
Stockholders of record at the close of business on February 26, 1998 are
entitled to notice of, and to vote at the Annual Meeting or any adjournment
thereof. A list of such stockholders will be available at the Annual Meeting
and during the ten days prior thereto, at the office of the Company's counsel,
Hahn & Hessen LLP, 350 Fifth Avenue, in the City of New York, New York County,
New York.
By Order of the Board of Directors,
James Kardon
Secretary
New York, New York
March 23, 1998
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE ANNUAL MEETING PLEASE SIGN
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED PREPAID ENVELOPE.
ALL STOCKHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT
YOU EXPECT TO ATTEND, PLEASE DATE AND SIGN THE ENCLOSED PROXY. IF YOU DECIDE TO
ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
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<PAGE>
NATIONAL WIRELESS HOLDINGS INC.
249 ROYAL PALM WAY, SUITE 301
PALM BEACH, FLORIDA 33480
PROXY STATEMENT
The enclosed proxy is being solicited by the Board of Directors of the
Company for use in connection with the annual meeting of stockholders to be held
on April 17, 1998. This proxy statement and enclosed proxy are first being sent
to stockholders on or about March 23, 1998. The mailing address of the principal
executive office of the Company is 249 Royal Palm Way, Suite 301, Palm Beach,
Florida 33480. The cost of preparing, printing and mailing the notice of
meeting, proxy, proxy statement and annual report will be borne by the Company.
Proxy solicitation other than by use of the mail may be made by regular
employees of the Company by telephone and personal solicitation. Banks,
brokerage houses, custodians, nominees and fiduciaries are being requested to
forward the soliciting material to their principals and to obtain authorization
for the execution of proxies, and may be reimbursed for their out-of-pocket
expenses incurred in that connection. Any stockholder giving the enclosed proxy
has the right to revoke it at any time before it is voted. To revoke a proxy,
the stockholder must file with the Secretary of the Company either a written
revocation or a duly executed proxy bearing a later date. If you decide to
attend the meeting, you may revoke your proxy and vote your shares in person.
The record of stockholders entitled to notice of, and to vote at, the
annual meeting was taken at the close of business on February 26, 1998. At that
date the Company had outstanding 3,283,000 shares of Common Stock ($.01 par
value) of the Company ("Common Stock"). Each share of Common Stock is entitled
to one vote. No other class of securities is entitled to vote at this meeting.
The Proxies given pursuant to this solicitation will be voted at the
meeting or any adjournment thereof. Abstentions and broker non-votes are voted
neither "for" nor "against," and have no effect on the vote, but are counted in
the determination of a quorum.
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<PAGE>
AVAILABLE INFORMATION AND SOURCES OF INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). The reports, proxy statements
and other information filed by the Company with the SEC can be inspected and
copied at the public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the SEC's Regional Offices at 7
World Trade Center, 13th Floor, New York, New York 10048, and Northwest Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material also may be obtained by mail from the Public Reference Section of
the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Reports and other information concerning the Company can be inspected and copied
at the offices of the National Association of Securities Dealers, Inc. at 1735 K
Street, N.W., Washington, D.C. 20006.
Statements contained in this Proxy Statement or in any document
incorporated by reference in this Proxy Statement as to the contents of any
contract or other document referred to herein or therein are not necessarily
complete, and in each instance reference is made to the copy of such contract or
other document filed or incorporated by reference as an exhibit to the
registration statement or such other document, each such statement being
qualified in all respects by such reference.
No persons have been authorized to give any information or to make any
representation other than those contained in this Proxy Statement in connection
with the solicitations of proxies made hereby and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or any other person. The delivery of this Proxy Statement shall
not under any circumstances create an implication that there has been no change
in the affairs of the Company since the date hereof or that the information
herein is correct as of any time subsequent to its date.
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<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table lists the number of shares of Common Stock beneficially
owned by those known by the Company to own beneficially 5% or more of the Common
Stock, all the directors, and the nominee for election as director, each
executive officer listed in the table under the caption "Executive Compensation"
and by all directors and executive officers of the Company as a group as of
February 26, 1998. On February 26, 1998, there were 3,283,000 shares of Common
Stock outstanding.
<TABLE>
<CAPTION>
Beneficial Ownership+
Name Number Percent
- ------------------------------------ --------------------- -------
<S> <C> <C>
Terrence S. Cassidy 495,666(1) 15.0%
249 Royal Palm Way, Suite 301
Palm Beach, Florida 33480
Michael J. Specchio 334,666(2) 10.1%
233 Garrard Drive
Rantoul, Illinois 61866
Paul Sinderbrand 80,000 2.4%
888 16th Street NW
Washington, DC 20006
Peoples Choice TV Corp. 300,000(3) 8.4%
2 Corporate Drive, Suite 249
Shelton, Connecticut 06484
Wellington Management
Company LLP 322,000(4) 9.8%
75 State Street
Boston, Massachusetts 02109
Thomas R. DiBenedetto 27,000(5) *
249 Royal Palm Way, Suite 301
Palm Beach, Florida 33480
Louis B. Lloyd 10,000 *
156 W. 56th Street
New York, New York 10019
Michael A. McManus, Jr. 13,000 *
241-02 Northern Blvd
Douglastown, New York 11362
3
<PAGE>
Timothy Mathews 40,140(6) 1.2%
233 North Garrard
Rantoul, Illinois 61866
All officers and directors as a group 1,000,472(1)(2)(5)(6)
(seven persons) 29.8%
</TABLE>
- ---------------
The number of shares beneficially owned is deemed to include shares of the
Company's Common Stock as to which the beneficial owner has or shares either
investment or voting power. Unless otherwise stated, and except for voting
powers held jointly with a person's spouse, the persons and entities named in
the table have voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by them. All information with respect to
beneficial ownership is based on filings made by the respective beneficial
owners with the "SEC" or information provided to the Company by such
beneficial owners.
* Less than 1%.
(1) Includes 16,666 shares currently issuable upon exercise of an option and
50,000 shares owned by a family trust, of which Mr. Cassidy disclaims
beneficial ownership of 25,000 shares.
(2) Includes 16,666 shares currently issuable upon exercise of an option and
50,000 shares owned by a family trust, of which Mr. Specchio disclaims
beneficial ownership.
(3) Includes 300,000 shares issuable pursuant to an option.
(4) Includes 88,000 shares which Wellington Management Company, LLP ("WMC") has
shared power to vote or to direct the vote and 322,000 shares which WMC has
shared dispositive power, each as reported on its most recent Schedule 13G.
WMC is an investment adviser registered with the SEC under the Investment
Advisers Act. As of January 31, 1998 WMC, in its capacity as investment
adviser, may be deemed to have beneficial ownership of 322,000 shares of
Common Stock that are owned by numerous investment advisory clients, none
of which is known to have such interest with respect to more than five
percent of the shares of Common Stock outstanding except Wellington Trust
Company NA ("WTC"), a subsidiary of WMC. According to the Schedule 13G,
WTC is a national bank organized under the laws of the United States and,
as such, is exempt from registration as an investment adviser with the SEC
pursuant to the Investment Advisers Act. As of January 31, 1998, WTC, in
its capacity as investment adviser, may be deemed to have beneficial
ownership of 140,000 shares of Common Stock that are owned by numerous
investment advisory
4
<PAGE>
clients, none of which is known to have such interest with respect to
more than five percent of the shares of Common Stock outstanding.
(5) Includes 9,000 shares owned by Boston International Partners, L.P.
("BIPLP"), of which Mr. DiBenedetto is General Partner and in which he has
an approximate 56% partnership interest, and 9,000 shares owned by Boston
International Partners, LP - II, ("BIPLP-II") which is managed by an
affiliate of Mr. DiBenedetto and in which he has an approximate 7%
partnership interest. Mr. DiBenedetto's children own an additional 5% of
BIPLP, of which Mr. DiBenedetto disclaims beneficial ownership.
(6) Includes 40,000 shares currently issuable upon the exercise of options.
Option Grants
The following table sets forth certain information regarding stock option
grants made to the Named Executive Officers during the fiscal year ended October
31, 1997.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants
<S> <C> <C> <C> <C> <C>
Name Number of Percent of Exercise Expiration Potential Realizable
Securities Total Price Date Value at Assumed
Underlying Options per Share Annual Rates of
Options Granted to Stock Appreciation
Granted(2) Employees for Option Term (1)
in Fiscal
Year (2) 5% 10%
Terrence S.
Cassidy 50,000 50% $17.05 7/14/02 $235,530 $520,460
Michael J.
Specchio 50,000 50% $17.05 7/14/02 $235,530 $520,460
</TABLE>
(1) The potential realizable value is calculated based on the terms of the
option at its time of grant. It is calculated by assuming that the
stock price on the date of grant appreciates at the indicated annual
rate, compounded annually for the entire term of the option.
Potential realizable values are net of exercise price, but before
taxes associated with exercise.
(2) Includes options to purchase shares that were granted subject to approval
of the 1997 Equity Incentive Plan. See "Proposal 1 -- 1997 Equity
Incentive Plan."
5
<PAGE>
PROPOSAL 1
1997 Equity Incentive Plan
The 1997 Equity Incentive Plan (the "1997 Equity Incentive Plan") was
adopted by the Company on July 14, 1997, and the Board of Directors recommends a
vote in favor thereof.
The 1997 Equity Incentive Plan is designed to advance the Company's
interests by enhancing its ability to attract and retain employees and others in
a position to make significant contributions to the success of the Company
through ownership of shares of Common Stock. The 1997 Equity Incentive Plan
provides for the grant of incentive stock options ("ISOs"), non-statutory stock
options ("NQSOs"), stock appreciation rights ("SARs"), restricted stock,
unrestricted stock, deferred stock grants, and performance awards, loans to
participants in connection with awards, supplemental grants and combinations of
the above. A total of 200,000 shares of Common Stock are reserved for issuance
under the 1997 Equity Incentive Plan. The maximum number of shares as to which
options or SARs may be granted to any participant in any one calendar year is
100,000. The shares of Common Stock issuable under the 1997 Equity Incentive
Plan are subject to adjustment for stock dividends and similar events. Awards
under the 1997 Equity Incentive Plan may also include provision for payment of
dividend equivalents with respect to the shares subject to the award. In July
1997, five year options to purchase 10,000 shares under the 1997 Equity
Incentive Plan were granted to each of Terrence S. Cassidy, President of the
Company, and Michael J. Specchio, Chairman of the Company, subject to
stockholder approval of the 1997 Equity Incentive Plan. In the event that the
stockholders do not approve the 1997 Equity Incentive Plan, these options
granted to Messrs. Cassidy and Specchio will be void.
The 1997 Equity Incentive Plan is administered by the Option Committee of
the Board of Directors (the "Option Committee"). The Option Committee shall
consist of at least two directors. If the Common Stock is registered under the
Exchange Act, all members of the Option Committee shall be "outside directors"
as defined. All employees of the Company and any of its subsidiaries and other
persons or entities (including non-employee directors of the Company and its
subsidiaries) who, in the opinion of the Option Committee, are in a position to
make a significant contribution to the success of the Company or its
subsidiaries are eligible to participate in the 1997 Equity Incentive Plan.
Except as described above, no determination has been made (i) as to which
individuals may in the future receive options or rights under the 1997 Equity
Incentive Plan, (ii) as to the number of shares to be covered by any such
options or rights granted to any single individual, or (iii) as to the number of
individuals to whom such options or rights will be granted. The proceeds
received by the Company from the sale of stock pursuant to the 1997 Equity
Incentive Plan will be used for the general purposes of the Company, or in the
case of the receipt of payment in shares of Common Stock, as the Board of
Directors may determine, including redelivery of the shares received upon
exercise of options.
Summary of the 1997 Equity Incentive Plan
6
<PAGE>
The following summary is qualified in its entirety by the full text of the
1997 Equity Incentive Plan that appears as Exhibit 1 to this Proxy Statement.
Stock Options. The exercise price of an ISO granted under the 1997 Equity
Incentive Plan may not be less than 100% (110% in the case of 10% shareholders)
of the fair market value of the Common Stock at the time of grant. The exercise
price of a NQSO granted under the 1997 Equity Incentive Plan is determined by
the Option Committee. The term of each option may be set by the Option Committee
but cannot exceed ten years from grant (five years from grant in the case of an
incentive stock option granted to a 10% shareholder), and each option will be
exercisable at such time or times as the Option Committee specifies. The option
price may be paid in cash or check acceptable to the Company or, if permitted by
the Option Committee and subject to certain additional limitations, by tendering
shares of Common Stock, by using a promissory note, by delivering to the Company
an unconditional and irrevocable undertaking by a broker promptly to deliver
sufficient funds to pay the exercise price, or a combination of the foregoing.
Stock Appreciation Rights. SARs may be granted either alone or in tandem
with stock option grants. Each SAR entitles the participant, in general, to
receive upon exercise the excess of a share's fair market value in cash or
common stock at the date of exercise over the share's fair market value on the
date the SAR was granted. The Option Committee may also grant SARs which provide
that following a change in control of the Company as determined by the Option
Committee, the holder of such right will be entitled to receive an amount
measured by specified values or averages of values prior to the change in
control. If an SAR is granted in tandem with an option, the SAR will be
exercisable only to the extent the option is exercisable. To the extent the
option is exercised, the accompanying SAR will cease to be exercisable, and vice
versa. An SAR granted in tandem with an ISO may be exercised only when the
market price of common stock subject to the option exceeds the exercise price of
such option. SARs not granted in tandem shall be exercisable at such time, and
on such conditions, as the Option Committee may specify.
Stock Awards. The 1997 Equity Incentive Plan provides for awards of
nontransferable shares of restricted Common Stock subject to forfeiture as well
as of unrestricted shares of Common Stock. Awards may provide for acquisition of
restricted and unrestricted Common Stock for a purchase price specified by the
Option Committee, but in no event less than par value. Restricted Common Stock
is subject to repurchase by the Company at the original purchase price or to
forfeiture if no cash was paid by the participant if the participant ceases to
be an employee before the restrictions lapse. Other awards under the 1997 Equity
Incentive Plan may also be settled with restricted Common Stock. Restricted
securities shall become freely transferable upon the completion of the
Restricted Period including the passage of any applicable period of time and
satisfaction of any conditions to vesting. The Option Committee, in its sole
discretion, may waive all or part of the restrictions and conditions at any
time.
The 1997 Equity Incentive Plan also provides for deferred grants entitling
the recipient to receive shares of Common Stock in the future at such times and
on such conditions as the Option Committee may specify, and performance awards
entitling the recipient to receive cash or Common Stock following the attainment
of performance goals determined by the Option Committee. Performance conditions
and provisions for deferred stock may also be attached to other awards under the
1997 Equity Incentive Plan.
7
<PAGE>
A loan may be made under the 1997 Equity Incentive Plan either in
connection with the purchase of Common Stock under an award or with the payment
of any federal, state and local tax with respect to income recognized as a
result of an award. The Option Committee will determine the terms of any loan,
including the interest rate (which may be zero). No loan may have a term
exceeding ten years in duration. In connection with any award, the Option
Committee may also provide for and grant a cash award to offset federal, state
and local income taxes or to make a participant whole for certain taxes.
Except as otherwise provided by the Option Committee, if a participant
dies, options and SARs held by such participant immediately prior to death, to
the extent then exercisable, may be exercised by the participant's executor,
administrator or transferee during a period of one year following such death (or
for the remainder of their original term, if less). Except as otherwise
determined by the Option Committee, options and SARs not exercisable at a
participant's death terminate. Outstanding awards of restricted Common Stock
must be transferred to the Company upon a participant's death and, similarly,
deferred Common Stock grants, performance awards and supplemental awards to
which a participant was not irrevocably entitled prior to death will be
forfeited, except as otherwise determined by the Option Committee.
In the case of termination of a participant's association with the Company
for reasons other than death, options and SARs remain exercisable, to the extent
they were exercisable immediately prior to termination, for three months (or for
the remainder of their original term, if less), shares of restricted Common
Stock must be resold to the Company, and other awards to which the participant
was not irrevocably entitled prior to termination will be forfeited, unless
otherwise determined by the Option Committee. If any such association is
terminated due to the participant's discharge for cause which, in the opinion of
the Option Committee, casts such discredit on the participant as to justify
immediate termination of any award under the 1997 Equity Incentive Plan, such
participant's options and SARs may be terminated immediately.
In the event of a consolidation or merger in which the Company is not the
surviving corporation or which results in the acquisition of substantially all
of the Company's outstanding Common Stock by a single person or entity or by a
group of persons and/or entities acting in concert or in the event of the sale
or transfer of substantially all of the Company's assets, the Option Committee
may determine that (i) each outstanding option and SAR will become immediately
exercisable unless otherwise provided at the time of grant, (ii) each
outstanding share of restricted Common Stock will immediately become free of all
restrictions and conditions, (iii) all conditions on deferred grants,
performance awards and supplemental grants which relate only to the passage of
time and continued employment will be removed and (iv) all loans under the 1997
Equity Incentive Plan will be forgiven. The Committee may also arrange to have
the surviving or acquiring corporation or affiliate assume any award held by a
participant or grant a replacement award. If the optionee is terminated after a
change in control by the Company without cause, or in the case of certain
officers designated from time to time by the Option Committee resigns under
certain circumstances, within two years following the change in control, all
unvested options will vest and all options will be exercisable for the shorter
of four years or their original duration and all other awards will vest. If the
option committee makes no such determination, outstanding awards to the extent
not fully vested will be forfeited.
8
<PAGE>
Certain Federal Income Tax Consequences. The following discussion, which
is based on the law as in effect on January 1, 1998, summarizes certain federal
income tax consequences of participation in the 1997 Equity Incentive Plan. The
summary does not purport to cover federal employment tax or other federal tax
consequences that may be associated with the plan, nor does it cover state,
local or non-U.S. taxes.
In general, an optionee realizes no taxable income upon the grant or
exercise of an ISO. However, the exercise of an ISO increases alternative
minimum taxable income by an amount equal to the difference (the "option
spread") between the value of the Common Stock purchased and the price. This
increase may result in an alternative minimum tax liability to the optionee.
With certain exceptions, a disposition of shares purchased under an ISO within
two years from the date of grant or within one year after exercise produces
ordinary income to the optionee (and a corresponding deduction is available to
the company) equal to the value of the shares at the time of exercise less the
exercise price. If the disposition was a sale (other than to a related party),
and if the Common Stock was sold for less then what it was worth on the date the
ISO was exercised, the ordinary income is limited to the gain on the sale, if
any. If, on the other hand, the optionee has additional gain on a disqualifying
disposition, any additional gain recognized in the disposition is treated as a
capital gain for which the Company is not entitled to a deduction. If the
optionee does not dispose of the shares until after the expiration of these one-
and two-year holding periods, any gain or loss recognized upon a subsequent sale
is treated as a long-term capital gain or loss for which the Company is not
entitled to a deduction. In certain cases, an optionee may be treated as
disposing of ISO shares for purposes of the "disqualifying disposition" rules
even though the optionee has not sold the shares (i.e., if the optionee makes a
gift of the shares (other than to a spouse), or if the optionee uses them to
exercise another ISO within the one or two-year holding periods described
above).
In general, in the case of an NQSO the optionee has no taxable income at
the time of grant but realizes ordinary income in connection with exercise of
the option in an amount equal to the excess (at the time of exercise) of the
fair market value of the shares acquired upon exercise over the exercise price.
If the optionee is an employee, such income is subject to tax withholding. A
corresponding deduction is available to the Company. Any gain or loss recognized
upon a subsequent sale of the shares will be a capital gain or loss for which
the Company is not entitled to a deduction.
In general, an ISO that is exercised more than three months after
termination of employment (other than termination by reason of death) is treated
as an NQSO. ISOs granted by the Company are also treated as NQSOs to the extent
they first become exercisable by an individual in any calendar year for shares
having a fair market value (determined as of the date of grant) in excess of
$100,000.
Special tax rules may apply if the shares acquired pursuant to the exercise
of an option are restricted under the 1997 Equity Incentive Plan or are
otherwise subject to a substantial risk of forfeiture. In general, if shares
subject to a substantial risk of forfeiture are acquired upon exercise of an
option, any ordinary income or alternative minimum taxable income associated
with the exercise will be taken into account and measured, and any associated
deduction will be available to
9
<PAGE>
the Company, not earlier than the date on which the substantial risk of
forfeiture lapses unless the person to whom the option was granted makes a
so-called "83(b) election" not later than thirty (30) days after the
exercise. In the case of an optionee subject to the reporting and short-swing
profit recapture rules of Section 16 of the Exchange Act, shares acquired
pursuant to the exercise within six months of the date of grant of an option
granted prior to the 1996 effective date of new Rule 16b-3 promulgated under
the Exchange Act (or granted after that date, if certain committee-approval
or board-approval requirements are not satisfied) will be treated as subject
to a "substantial risk of forfeiture' until six months from the date of grant
of the option.
Under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), the Company may not deduct more than $1.0 million for remuneration paid
to any of its five highest paid executive officers. Some types of remuneration
are not subject to this limit, including certain performance-based compensation.
It is intended that remuneration attributable to ISOs, NQSOs and SARs will
qualify for the exception from the $1.0 million deduction for performance-based
compensation.
The grant of an SAR does not itself result in any taxable income to the
recipient, nor does taxable income result merely because an SAR becomes
exercisable. Upon exercise of an SAR (or receipt of payment in cancellation of
an option), an optionee will have ordinary income, subject to withholding, equal
to the amount of any cash received plus the fair market value of any Common
Stock the optionee received. A corresponding deduction will be available to the
Company.
In certain circumstances an SAR may result in taxable income prior to
exercise. Such a result could occur (i) if an optionee holds a stand-alone SAR
(i.e., an SAR granted independent of any option) under which appreciation rights
were capped at a specified level of stock appreciation, and the cap was reached,
or (ii) if an optionee holds an SAR that was "in the money" and was about to
expire.
Under the so-called "golden parachute" provisions of the Code, the vesting
or accelerated exercisability of awards in connection with a change in control
of the Company may be required to be valued and taken into account in
determining whether participants have received compensatory payments, contingent
on the change in control, in excess of certain limits. If these limits are
exceeded, a substantial portion of amounts payable to the participant, including
payments taken into account by reason of the grant, vesting or exercise of
awards under the 1997 Equity Incentive Plan, may be subject to an additional 20%
federal tax and may be nondeductible to the Company.
Provisional Grants. Each of Messrs. Cassidy and Specchio has been granted
NQSOs expiring on July 14, 2002 to purchase 10,000 shares of Common Stock under
the 1997 Equity Incentive Plan at a price of $17.05 per share. Of each of the
NQSOs, 3,333 are currently exercisable, and 3,333 and 3, 334 will become
exercisable on the next two anniversaries of July 14, 1997, respectively.
Approval of the adoption of the 1997 Equity Incentive Plan requires the
affirmative vote of the holders of a majority of the shares of Common Stock
issued and outstanding.
10
<PAGE>
The Board of Directors recommends a vote FOR the approval of the 1997
Equity Incentive Plan.
11
<PAGE>
PROPOSAL 2
ELECTION OF DIRECTORS
The directors of the Company are divided into three classes, with directors
in each class serving three-year staggered terms. There are currently five
directors, consisting of one director who is serving for a term which expires at
this Annual Meeting, two directors who are serving for a term which expires at
the Annual Meeting of Stockholders in 1999, and two directors who are serving
for a term which expires at the Annual Meeting of Stockholders in 2000.
The Board of Directors has nominated Louis B. Lloyd to serve as a director
of the Company until the Annual Meeting of Stockholders in 2001 or until his
respective successor is duly elected and qualified.
The nominee has consented to be a nominee and to serve as a director if
elected. Except as otherwise directed on the proxy card, the persons named as
proxies will vote for the election of the designated nominee. In the event that
the nominee should become unavailable for election as a director, the persons
named as proxies will vote for any substitute nominee as the Board of Directors
may select.
Set forth below is biographical information for Louis B. Lloyd and each
person whose term of office as director will continue after the Annual Meeting.
Information concerning the current directors and executive officers of the
Company is set forth as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---------------------- ----- -----------------------------------------------
<S> <C> <C>
Terrence S. Cassidy 55 President, Chief Executive Officer and Director
Michael J. Specchio 51 Chairman and Director
Paul J. Sinderbrand 44 Executive Vice President and General Counsel
Timothy A. Mathews 35 Executive Vice President--Technology
Thomas R. DiBenedetto 48 Director
Louis B. Lloyd 55 Director
Michael A. McManus, Jr. 54 Director
</TABLE>
NOMINEE FOR CLASS I DIRECTOR TO SERVE A THREE-YEAR TERM:
Louis B. Lloyd Director Since 1993 Age: 55
Mr. Lloyd has been a director of the Company since October 1993. Since
December 1994 he has been Vice Chairman of Absolute Bank, a Republic of Georgia
bank. Since April
12
<PAGE>
1996, he has been President of Belfinance Securities, Inc., a broker-dealer.
He was President and Chief Executive Officer of Republic New York Securities
Corporation, a brokerage firm subsidiary of Republic New York Corporation,
from 1991 to 1994. For more than five years prior to joining Republic, Mr.
Lloyd was a Senior Executive Vice President of Shearson Lehman Brothers in
its Worldwide Institutional Equity Trading and Sales Departments. Since 1992
he has been Chairman of Antigua Enterprises, an apparel company.
INCUMBENT CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL THE 1999 ANNUAL
MEETING:
Michael J. Specchio Director Since 1993 Age: 51
Chairman. Mr. Specchio has been Chairman and a director of the Company
since September 1993. He has over 15 years of senior executive experience in the
hardwire cable, private cable and wireless cable industries. Since 1979, he has
developed, operated and sold, for himself and others, over 100 smaller
conventional cable systems and over 300 SMATV systems. Mr. Specchio, through
affiliated entities, purchased, leased or entered into joint ventures for
portfolios consisting of an aggregate of approximately 250 wireless cable
channels in major markets representing approximately 30% of the total U.S.
households, including Baltimore, Boston, Dallas, Fort Worth, Houston, Kansas
City, Pittsburgh, Minneapolis, Los Angeles and Chicago. The majority of these
frequency agreements were held by People's Choice TV, a group of companies which
Mr. Specchio founded and for which he served as Chief Executive Officer from
1985 through 1991. In 1986, he built and operated the nation's first fully
addressable multichannel wireless system in Milwaukee, Wisconsin, eventually
selling the 7,000 subscriber system to Warner Communications. In addition, Mr.
Specchio supervised the development and launch of wireless systems in Sacramento
and Tucson. He was active in the founding of the Wireless Cable Association and
currently serves as a member of its Board of Directors. For more than the last
five years, Mr. Specchio served as Chief Executive Officer of various of the
predecessors of Preferred Entertainment, all engaged in the development of
private wireless cable businesses. From 1992 until May 1994, Mr. Specchio was
Chairman of Preferred Entertainment and, from August 1993 to January 1995, a
director of Preferred Entertainment.
Michael A. McManus, Jr. Director Since 1994 Age: 54
Mr. McManus has been a director of the Company since October 1994. He has
been President and Chief Executive Officer of New York Bancorp Inc. ("NYBI")
since 1991 and a director of NYBI since 1990. He has also been a director of
Home Federal Savings Bank, NYBI's subsidiary, since 1991 and Vice Chairman since
October 1991. He is also a director of RGB Computer Video Systems, Document
Imaging System Corp. and Arrhythmia Research Technology, Inc. He has served in
numerous government capacities, including Assistant to the President of the
United States from 1982 to 1985 and as Special Assistant to the Secretary of
Commerce during the Ford Administration.
INCUMBENT CLASS III DIRECTORS CONTINUING IN OFFICE UNTIL THE 2000 ANNUAL
MEETING:
13
<PAGE>
Terrence S. Cassidy Director Since 1993 Age: 55
President and Chief Executive Officer. Mr. Cassidy has been President,
Chief Executive Officer and a director of the Company since its incorporation in
August 1993. He has been an independent financial consultant since 1988. Prior
to 1988, he served as a Vice President and principal of Allen & Company
Incorporated, an investment banking firm, for 15 years with a concentration in
communications. Prior to 1973, he served as co-director of research at Shields &
Company, a brokerage firm. From 1992 to 1993, Mr. Cassidy acted as the financial
advisor to Gemini Equities, Inc. in its acquisition of Bell Atlantic Computer
Products, Inc., a wholly owned computer products subsidiary of the Bell-Atlantic
Corporation. In the fall of 1992, he participated as an advisor to and member
of the purchasing group in the acquisition of United Greenfield, Ltd., a
London-based international trading company with operations in Europe, the Middle
East and Africa. Mr. Cassidy was a director of Preferred Entertainment, Inc.
("Preferred Entertainment"), an operator of a wireless cable system in Chicago,
from August 1993 to January 1995. Mr. Cassidy is a director of Absolute Bank, a
Republic of Georgia bank.
Thomas R. DiBenedetto Director Since 1993 Age: 48
Mr. DiBenedetto has been a director of the Company since October 1993.
Since 1992, he has been President of Junction Investors, Ltd., an investment
banking firm based in Boston, Massachusetts. From 1989 until April 1993, he was
Chairman of Sioux Falls Cellular Communications, Inc. and, from 1989 to February
1993, Chairman of Oklahoma Cellular, Inc., both cellular telephone companies.
From 1982 to 1992, he was President of Boston International Group Securities
Corporation, a broker-dealer. He has been, since 1985, a director of
Alexanders, Inc., a retailing and real estate company which emerged from
bankruptcy in 1994 pursuant to a plan of reorganization which provides for full
payment to all creditors. He is also a director of Showscan Corporation, a
multi-media entertainment company, and Absolute Bank, a Republic of Georgia
bank.
STOCKHOLDER VOTE REQUIRED FOR PROPOSAL 3 AND BOARD RECOMMENDATION:
The election of the foregoing nominee for director requires the affirmative
vote of the holders of a plurality of the votes of the shares of Common Stock
present in person or represented by proxy at the meeting.
The Board of Directors unanimously recommends a vote FOR the foregoing
nominee.
EXECUTIVE OFFICERS OF THE COMPANY
The current Executive Officers of the Company are set forth below,
excluding Messrs. Cassidy and Specchio whose biographies are set forth above.
Paul J. Sinderbrand Age: 44
14
<PAGE>
Executive Vice President and General Counsel. Mr. Sinderbrand has been
Executive Vice President and General Counsel of the Company since September
1993. He is a partner of Wilkinson, Barker, Knauer & Quinn, a Washington, D.C.
law firm, where he concentrates on communications law and represents a variety
of wireless communications providers. Mr. Sinderbrand was a partner at
Sinderbrand & Alexander, a Washington, D.C. law firm from 1993 to 1995 and a
partner at Keck, Mahin & Cate until 1993, where, in each case, he concentrated
on communications law. During his 16 years as a practicing attorney he has
participated in major regulatory proceedings involving wireless cable television
and drafted many regulations which now govern the industry, including the
proposal pursuant to which the FCC established wireless cable television.
Timothy A. Mathews Age: 35
Executive Vice President - Technology. Mr. Mathews has served as the
Company's Executive Vice President - Technology since September 1995. For more
than seven years prior to that time, he has served in a variety of managerial
capacities for other pay television companies, including in construction,
technical, supervisory, contractor, marketing and installation capacities. From
August 1993 to August 1994, he was Vice President of Operations of Preferred
Entertainment. From 1981 to 1993, he served in several capacities in Specchio
Developers, Ltd., an affiliate of Michael J Specchio, an officer and director of
the Company, primarily operating as a hands-on supervisor. Mr. Mathews directed
many of the Specchio Developers, Ltd. projects, including the addition of eight
frequencies in Chicago and the retrofit of 120 private cable head-end systems.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act requires the Company's officers and
directors to file initial reports of ownership and reports of changes in
ownership with the "SEC" and each exchange on which its securities are traded.
Officers and directors are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file. Based solely on a review of
the copies of such forms furnished to the Company, all requisite filings were
made in 1997.
Board of Directors and Committees
Meetings and Attendance
During fiscal year ended October 31, 1997, there were three meetings of the
Board of Directors and all directors attended such meetings.
The two standing Committees of the Board of Directors are the Audit
Committee and the Option Committee.
Audit Committee
15
<PAGE>
The members of this Committee are Messrs. DiBenedetto and Lloyd. The
Committee had one meeting in 1997 to review the 1996 audit. The Audit
Committee's function is to evaluate the adequacy of the Company's internal
accounting controls, review the scope of the audit by Coopers & Lybrand L.L.P.
and related matters pertaining to the examination of the financial statements,
review the nature and extent of any non-audit services provided by the Company's
independent accountants and make recommendations to the Board of Directors with
respect to the foregoing matters as well as with respect to the appointment of
the Company's independent accountants.
Option Committee
The members of this Committee are Messrs. Lloyd and McManus. The Option
Committee had one meeting during 1997. The Option Committee administers the
Company's 1993 Stock Option Plan and the 1997 Equity Incentive Plan. The Option
Committee is generally empowered to interpret the 1993 Stock Option Plan and the
1997 Equity Incentive Plan, to prescribe rules and regulations relating thereto,
to determine the terms of the option agreements, to amend them with the consent
of the optionee, to determine the employees to whom options are to be granted,
and to determine the number of shares subject to each option and the exercise
price thereof.
Remuneration of Directors and Related Matters
Each member of the Board of Directors, other than any employee-director
(Messrs. Cassidy and Specchio are the only such employee-directors), receives an
annual fee of $5,000 and $500 per meeting attended.
Certain Relationships and Related Transactions
Paul Sinderbrand, Executive Vice President and General Counsel of the
Company, is a partner of Wilkinson, Barker, Knauer & Quinn, special counsel to
the Company on matters related to communications law. Mr. Sinderbrand owns
80,000 shares of Common Stock of the Company. The Company paid Wilkinson,
Barker, Knauer & Quinn, of which Mr. Sinderbrand is a partner, approximately
$199,593 for services rendered to the Company in fiscal 1997.
All current transactions between the Company, and its officers, directors
and principal stockholders or any affiliates thereof are, and in the future such
transactions will be, on terms no less favorable to the Company than could be
obtained from unaffiliated third-parties.
Executive Compensation
The following table sets forth information as to compensation paid by the
Company and its subsidiaries for the fiscal years ended October 31, 1995, 1996
and 1997 to each of the directors and executive officers of the Company:
16
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
(a) (b) (c) (d) (e) (f)
Name and Principal Position Year Salary($) Bonus($) Long Term All Other
Compensation Awards Compensation
Securities Underlying ($)
Options (#)
Terrence S. Cassidy, 1997 220,000 200,000 50,000 ---
President and
Chief Executive 1996 220,000 --- --- ---
Officer
1995 220,000 --- --- ---
Michael J. Specchio, 1997 180,000 200,000 50,000 ---
Chairman
1996 180,000 --- --- ---
1995 135,000 50,000 --- ---
Paul J. Sinderbrand 1997 (1) --- --- ---
Executive Vice President
and General Counsel 1996 60,000 --- --- ---
1995 20,000 --- --- ---
Timothy Mathews, Executive 1997 120,000 --- --- ---
Vice President -
Technology 1996 120,000 --- --- ---
1995 120,000 45,833 --- ---
</TABLE>
(1) The Company paid Wilkinson, Barker, Knauer & Quinn, of which
Mr. Sinderbrand is a partner, approximately $199,593 for services rendered
to the Company in fiscal 1997.
1993 Stock Option Plan
On September 28, 1993, the Company adopted the Company's 1993 Stock Option
Plan, (the "1993 Stock Option Plan") which the Company believes is desirable to
attract and retain consultants, directors, executives and key employees. Under
the 1993 Stock Option Plan, as amended on June 19, 1995, options to purchase an
aggregate of not more than 160,000 shares of Common Stock may be granted from
time to time to key employees, officers, directors, advisors and independent
consultants to the Company or to any of its subsidiaries. Options granted to
employees may be designated as ISOs or NQSOs. Options granted to directors,
independent consultants and other non-employees may only be designated NQSOs
under the 1993 Stock Option Plan. Options to purchase an aggregate of 160,000
shares have been granted to employees and officers including options to purchase
40,000 shares granted to each of Messrs. Cassidy and Specchio in 1997. Options
to purchase 30,000 shares, granted to non-employee directors of the Company,
have been exercised. See Note 11 to the Financial Statements.
17
<PAGE>
The 1993 Stock Option Plan is currently administered by a committee
consisting of directors Louis B. Lloyd and Michael A. McManus, Jr.. The
committee is generally empowered to interpret the 1993 Stock Option Plan, to
prescribe rules and regulations relating thereto, to determine the terms of the
option agreements, to amend them with the consent of the optionee, to determine
the employees to whom options are to be granted, and to determine the number of
shares subject to each option and the exercise price thereof. The per share
exercise price of options granted under the 1993 Stock Option Plan will be not
less than 100% of the fair market value per share of Common Stock on the date
the options are granted (110% of such fair market value if the grantee owns more
than 10% of the combined voting power of all classes of the Company's stock),
provided that for the two years immediately following the consummation of the
initial public offering in March 1994, the option price shall not be less than
the greater of the fair market value on the grant date or the initial public
offering price established by the initial public offering, unless approved by
the shareholders.
Options will be exercisable for a term that will not be greater than ten
years from the date of grant (five years from the date of grant of an ISO if the
optionee owns more than 10% of the Common Stock of the Company). Options may be
exercised only while the original grantee has a relationship with the Company
which confers eligibility to be granted options or within three months after the
termination of such relationship with the Company, or up to one year after
death, retirement or permanent disability. In the event of the termination of
such relationship between the original grantee and the Company for cause (as
defined in the 1993 Stock Option Plan), all options granted to that original
grantee terminate immediately. ISOs and NQSOs under the 1993 Stock Option Plan
are not transferable other than by will or the laws of descent and distribution.
Options may be exercised during the grantee's lifetime only by the grantee, his
or her guardian or legal representative.
Options granted pursuant to the 1993 Stock Option Plan which are ISOs will
enjoy the attendant tax benefits provided under Sections 421 and 422 of the Code
of 1986, as amended. Accordingly, the 1993 Plan provides that the aggregate fair
market value (determined at the time an ISO is granted) of the Common Stock
subject to ISOs exercisable for the first time by an employee during any
calendar year (under all plans of the Company and its subsidiaries) may not
exceed $100,000.
The Board may modify, suspend or terminate the 1993 Stock Option Plan,
provided, however, that certain material modifications affecting the 1993 Stock
Option Plan must be approved by the stockholders, and any change in the 1993
Stock Option Plan that may adversely affect a grantee's rights under an option
previously granted under the 1993 Stock Option Plan requires the consent of the
grantee.
Employment Contracts and Other Arrangements with Executive Officers
18
<PAGE>
Pursuant to an employment agreement, dated September 27, 1993,
Terrence S. Cassidy is employed full-time at an annual salary of $220,000. On
December 12, 1996, the Company entered into a Severance Benefit Agreement with
Mr. Cassidy. The agreement extends the term of his employment to September
2001, and provides that in the event of a change in control of the Company, Mr.
Cassidy may in certain circumstances terminate his employment and receive
severance benefit pay equal to three times such executive's annual compensation,
including certain bonuses, if any.
Pursuant to a consulting agreement dated February 28, 1997 and
expiring in September 2001, between the Company and Michael J. Specchio, Inc.
("MJS Inc."), a corporation which is affiliated with and employs Michael J.
Specchio, MJS Inc. is obliged to provide consulting services to the Company,
including substantially full-time services to be rendered by Mr. Specchio for an
annual fee of $180,000. The agreement, which terminates in the event of the
death or incapacity of Mr. Specchio, also provides that in the event of a change
in control of the Company, MJS Inc. may in certain circumstances terminate the
consulting agreement and receive severance benefit pay equal to three times the
annual compensation under the consulting agreement, including certain bonuses,
if any. Prior to February 18, 1997, Mr. Specchio was employed full-time by the
Company as an individual on substantially the same terms as provided in the
consulting agreement.
Paul J. Sinderbrand has entered into a five year Consulting and
Employment Agreement, under which he has been providing part-time consulting
services to the Company at a rate of $5,000 per month since April 1, 1994. The
agreement further provides that he may maintain his current law practice subject
to his obligations to the Company.
Pursuant to these agreements, each of Messrs. Cassidy, Specchio and
Sinderbrand have agreed not to compete with the Company during the term of his
agreement and for a period of one year thereafter, and the Company has agreed to
indemnify each of them against expenses incurred in any proceeding arising out
of their employment to the maximum extent provided by law.
Report of Board of Directors Regarding Compensation
The principal goal of the Company's compensation program is to help
the Company attract, motivate and retain the executive talent required to
develop and achieve the Company's strategic and operating goals with a view to
maximizing stockholder value. The key elements of this program and the
objectives of each element are as follows:
Base Salary:
- Establish base salaries that are competitive with those payable to
executives holding comparable positions at similar-sized wireless
cable companies.
- Provide periodic base salary increases as appropriate, consistent with
the Company's overall operating and financial performance, with a view
to rewarding successful individual performance and keeping pace with
competitive practices.
19
<PAGE>
Long-term Incentive:
- Facilitate the alignment of executives' interests with those of the
Company's shareholders by providing opportunities for meaningful stock
ownership.
Option Grants:
- Executive officers are eligible to receive option grants, cash bonuses
and increases in salary based upon the performance of the Company and
their individual progress during the preceding year. Such grants, if
any, are determined by the Board of Directors from time to time during
each fiscal year with the input and recommendation of the Company's
Chief Executive Officer. Although the Board does not have an
established policy for measuring performance and establishing salary,
bonuses and option grants, the Board is influenced by the Company's
financial performance and the contributions made by individual
executives to that performance. The Board of Directors believes that
such a retrospective analysis is most appropriate and practicable for
a development-stage wireless cable enterprise like the Company, which
operates in an uncertain environment and without the same sorts of
standard measures of performance as are available to more seasoned
companies. In addition, options may be granted to attract new
executives or directors. The Company does not consider the amount and
terms of options and stock already held by executive officers in its
deliberations to determine awards.
Compensation of Chief Executive Officer and Chairman:
- The base salary of the Chief Executive Officer and the annual base fee
of MJS Inc., which provides the Chairman's services, are determined
according to the same principles described above as applicable to
compensation of the Company's other executive officers. When
determining base salaries, the Board of Directors considers salary,
bonus and long-term incentive compensation for other comparable
companies in the high technology sector, in similar geographic areas
and at similar stages of growth and development, as reported in public
filings of such comparable companies. The Board of Directors also has
discussions with other industry executives and financial advisors.
The Chief Executive Officer and the Chairman each have a great deal of
experience in building emerging companies, and the Board views their
leadership as a critical factor in the successes the Company has
achieved to date and as very important to realization of the Company's
near-term goals. Although the Board of Directors considers the
Merger, if consummated, an achievement of a significant corporate
goal, the Board of Directors chose to maintain base compensation for
these executive officers at the same level as the prior fiscal year.
In December, 1996 the Board of Directors extended the terms of the
Chief Executive Officer's and Chairman's employment agreements to 2001
and provided for certain severance benefits.
Terrence S. Cassidy
Michael J. Specchio
Thomas R. DiBenedetto
20
<PAGE>
Louis B. Lloyd
Michael A. McManus, Jr.
Summary of Actions Taken
- At least once a year, and at more frequent periodic intervals when
deemed necessary in individual cases, the Board of Directors reviews
the performance of the Company's executive officers. The Board of
Directors, other than Messrs. Cassidy and Specchio, also reviews the
performance of Messrs. Cassidy and Specchio at least once a year. On
December 12, 1996, the Board of Directors authorized the execution of
Severance Benefit Agreements with Messrs. Cassidy and Specchio
providing for the extension of the terms of their respective
employment agreements to September 2001, and providing that in the
event of a change in control of the Company, each of them may in
certain circumstances terminate his employment and receive severance
benefit pay equal to three times his annual compensation, including
certain bonuses. While the Board believes that cash bonuses or an
increase in the Chief Executive Officer's and Chairman's salary would
be justified under ordinary circumstances, the Chief Executive Officer
and the Chairman have been willing to forego immediate increases in
his cash compensation in order to assist the Company to conserve its
cash resources. In February 1997, Mr. Specchio's employment
agreement, as amended by his Severance Benefit Agreement, was replaced
by the consulting agreement with MJS Inc. described above.
Board of Directors Interlocks and Insider Participation:
- The Board of Directors consists of Messrs. Cassidy, Specchio,
DiBenedetto, Lloyd and McManus, of which Messrs. Cassidy and Specchio
are employees of the Company. Messrs. DiBenedetto, Lloyd and McManus
participated in deliberations of the Company's Board of Directors
concerning executive officer compensation. There are no interlocks
between the Company and other entities involving the Company's
executive officers and Board members who serve as executive officers
or Board members of such other entities, except that Messrs. Cassidy,
DiBenedetto and Lloyd are directors of Absolute Bank, of which Mr.
Lloyd is Vice Chairman.
Performance Graph
The following graph provides a comparison of the Company's cumulative
total stockholder return on its Common Stock since the Company's initial public
offering in March 1994, with (a) the Nasdaq Market Index, which is being used as
the required broad entity market index and (b) the total return on a selected
peer group within Industry Group 462, the "Cable and Television Systems"
category for which data is compiled by Media General Financial Services, Inc.
("Peer Group").* Such stockholder return is the sum of the dividends paid and
the change in the market price of stock. The following graph assumes $100
invested on March 9, 1994 in the Company's Common Stock, NASDAQ Composite Index
and the Peer Group. No cash dividends have been declared on the Company's
Common Stock. Although the graph would
21
<PAGE>
normally cover a five-year period, the Company's Common Stock has been
publicly traded only since March 9, 1994, so the graph commences as of such
date. The comparisons in the graph are required by the SEC and are not
intended to forecast or be indicative of possible future performance of the
Company's Common Stock.
<TABLE>
<CAPTION>
Comparison of Cumulative Total Return of Company, Industry Index and Broad
Market
FISCAL YEAR ENDING
----------------------------------
Company March 9
1994 1994 1995 1996 1997
------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
National Wireless Holdings Inc. 100.00 62.00 108.00 118.00 119.53
Peer Group 100.00 93.83 99.99 73.69 101.43
Broad Market 100.00 101.09 119.91 140.82 184.55
</TABLE>
*The current composition of Industry Group 462-Cable and Television Systems is
as follows:
ADELPHIA COMMUNICATIONS
AMERICAN TELECASTING INC
ASCENT ENTERTAINMENT GROUP INC.
BRITISH SKY BROADCASTING GROUP
CABLEVISION SYSTEMS CL A
CELLULARVISION USA INC.
CENTURY COMMUNICATIONS LP CL A
COMCAST CORP. CL A
COMCAST SPECIAL STOCK CL A
COMCAST UK CABLE PARTNERS LTD.
COX COMMUNICATIONS INC.
CROWN CASINO CORP. (DICE)
DATA BROADCASTING CORP.
DIGITALE TELEKABL AG ADR
GENERAL CABLE PLC ADR
GENERAL INSTRUMENT CORP.
HEARTLAND WIRELESS COMMUNICATIONS INC.
JONES INTERCABLE INC. A
JONES INTERCABLE INVESTORS
MATAV-CABLE SYSTEMS MEDIA LTD.
MULTICANAL PARTICIPACOES
NATIONAL WIRELESS HOLDINGS INC.
NETWORK EVENT THEATER INC.
NTL INC.
NTN CANADA INC.
ON COMMAND CORPORATION
PEOPLES CHOICE TV CORP.
22
<PAGE>
SOURCE MEDIA INC.
SPICE ENTERTAINMENT COS. INC.
TCA CABLE TV INC.
TEL-COM WIRELESS CABLE TV CP
TCI SATELLITE ENT INC. A TCI GP
TCI SATELLITE ENT INC. B TCI GP
TELE-COMM INT
TELE-COMM SER A TCI GP
TELE-COMM SER B TCI GP
TEX CORP. INC.
TV FILME INC.
UNITED VIDEO SATELLITE INC.
TELE-COMM INC. A LIBERTY
VIACOM INC. CLA
VIACOM INC. NON-VOT B
VIDEOTRON HLDG PLC
WIRELESS ONE INC.
23
<PAGE>
PROPOSAL 3
RATIFICATION OF THE COMPANY'S SELECTION
OF ITS AUDITORS
The Board of Directors recommends to the stockholders that they ratify
the selection of Coopers & Lybrand L.L.P., independent auditors, to audit the
accounts of the Company for fiscal year 1998. If the stockholders do not ratify
this selection, the Board of Directors will reconsider its selection of Coopers
& Lybrand L.L.P. and may appoint new auditors upon recommendation of the Audit
Committee.
A representative of Coopers & Lybrand L.L.P. will be present at the
Annual Meeting and will have the opportunity to make a statement if he or she
desires to do so and will be available to respond to appropriate questions.
The Board of Directors unanimously recommends a vote FOR Proposal No. 3.
OTHER MATTERS
Management does not know of any business to be transacted at the
meeting other than as indicated herein. However, certain stockholders may
present topics for discussion from the floor. Should any such matter properly
come before the meeting for a vote, the persons designated as proxies will vote
thereon in accordance with their best judgment.
You are urged to sign, date and return the enclosed proxy in the
prepaid envelope provided for such purpose. It is hoped that registered
stockholders will give us advance notice of their plans by marking the box
provided on the proxy card.
If you will need special assistance at the Annual Meeting because of a
disability or if you require directions to the Meeting, please contact James
Kardon, the Secretary of the Company at (212) 736-1000.
Deadline for submitting proposals for next year's meeting.
Stockholders who intend to present proposals in connection with the Company's
1999 Annual Meeting of Stockholders must submit their proposals to the Corporate
Secretary of the Company on or before October 31, 1998.
New York, New York
March 23, 1998
James Kardon
Secretary
24
<PAGE>
EXHIBIT 1
NATIONAL WIRELESS HOLDINGS INC.
1997 EQUITY INCENTIVE PLAN
1. PURPOSE
The purpose of this Equity Incentive Plan (the "Plan") is to advance the
interests of National Wireless Holdings Inc. (the "Company") by enhancing its
ability to attract and retain employees and other persons or entities who are
in a position to make significant contributions to the success of the Company
and its subsidiaries through ownership of shares of the Company's common
stock ("Stock").
The Plan was adopted by the Company on July 14, 1997, and adopted by
stockholders on ____________.
The Plan is intended to accomplish these goals by enabling the Company
to grant Awards in the form of Options, Stock Appreciation Rights, Restricted
Stock or Unrestricted Stock Awards, Deferred Stock Awards, Performance
Awards, Loans or Supplement Grants, or combinations thereof, all as more
fully described below.
2. ADMINISTRATION
Unless otherwise determined by the Board of Directors of the Company
(the "Board"), the Plan will be administered by a Committee of the Board
designated for such purpose (the "Committee"). The Committee shall consist
of at least two directors. A majority of the members of the Committee shall
constitute a quorum, and all determinations of the Committee shall be made by
a majority of its members. Any determination of the Committee under the Plan
may be made without notice or meeting of the Committee by a writing signed by
a majority of the Committee members. During such times as the Stock is
registered under the Securities Exchange Act of 1934 (the "1934 Act"), all
members of the Committee shall be disinterested persons within the meaning of
Rule 16b-3 under the 1934 Act and "outside directors" within the meaning of
Section 162(m)(4)(C)(i) of the Internal Revenue Code of 1986, as amended (the
"Code").
The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to (a) grant Awards at such time or times as it may choose; (b)
determine the size of each Award, including the number of shares of Stock
subject to the Award; (c) determine the type or types of each Award; (d)
determine the terms and conditions of each Award; (e) waive compliance by a
holder of an Award with any obligations to be performed by such holder under
an Award and waive any terms or conditions of an Award; (f) amend or cancel
an existing Award in whole or in part (and if an award is canceled, grant
another Award in its place on such terms and conditions as the Committee
shall specify), except that the Committee may not, without the consent of the
holder of an Award, take any action under this clause with respect to such
Award if such action would adversely affect the rights of such holder; (g)
prescribe the form or forms of instruments that are
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required or deemed appropriate under the Plan, including any written notices
and elections required of Participants (as defined below), and change such
forms from time to time; (h) adopt, amend and rescind rules and regulations
for the administration of the Plan; and (i) interpret the Plan and decide any
questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations and actions of the Committee,
and all other determinations and actions of the Committee made or taken under
authority granted by any provision of the Plan, will be conclusive and will
bind all parties. Nothing in this paragraph shall be construed as limiting
the power of the Committee to make adjustments under Section 7.3 or Section
8.6.
With respect to persons subject to Section 16 of the 1934 Act,
transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act.
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan will become effective on the date on which it is approved by
the stockholders of the Company. No Award may be granted under the Plan ten
years following the date of stockholder approval, but Awards previously
granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
Subject to the adjustment as provided in Section 8.6 below, the
aggregate number of shares of Stock that may be delivered under the Plan will
be 200,000. If any Award requiring exercise by the Participant for delivery
of Stock terminates without having been exercised in full, or if any Award
payable in Stock or cash is satisfied in cash rather than Stock, the number
of shares of Stock as to which such Award was not exercised or for which cash
was substituted will be available for future grants.
Subject to Section 8.6(a), the maximum number of shares of Stock as to
which Options and Stock Appreciation Rights may be granted to any Participant
in any one calendar year is 100,000, which limitation shall be construed and
applied consistently with the rules under Section 162(m) of the Code.
Stock delivered under the Plan may be either authorized but unissued
Stock or previously issued Stock acquired by the Company and held in
treasury. No fractional shares of Stock will be delivered under the Plan.
5. ELIGIBILITY AND PARTICIPATION
Each person in the employ of the Company or any of its subsidiaries (an
"Employee") and each other person or entity (including without limitation
non-Employee directors of the Company or a subsidiary of the Company) who, in
the opinion of the Committee, is in a position to make a significant
contribution to the success of the Company or its subsidiaries will be
eligible to receive Awards under the Plan (each such Employee, person or
entity receiving an Award, a "Participant"). A "subsidiary" for purposes of
the Plan will be a
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corporation in which the Company owns, directly or indirectly, stock
possessing 50 % or more of the total combined voting power of all classes of
stock.
6. TYPES OF AWARDS
6.1. Options
(a) Nature of Options. An Option is an Award giving the recipient the
right on exercise thereof to purchase Stock.
Both "incentive stock options," as defined in Section 422 of the Code
(any Option intended to qualify as an incentive stock option being
hereinafter referred to as an "ISO"), and Options that are not incentive
stock options, may be granted under the Plan. ISOs shall be awarded only to
Employees. Any Option not identified at the time of grant as being either an
ISO or a non-incentive stock option shall be a non-incentive stock option.
(b) Exercise Price. The exercise price of an Option will be determined
by the Committee subject to the following:
(1) The exercise price of an ISO shall not be less than 100%
(110% in the case of an ISO granted to a ten-percent stockholder) of
the fair market value of the Stock subject to the Option, determined
as of the time the Option is granted. A "ten percent stockholder" is
any person who at the time of grant owns, directly or indirectly, or
is deemed to own by reason of the attribution rules of Section 424(d)
of the Code, stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or of any of its
subsidiaries.
(2) In no case may the exercise price paid for Stock which is
part of an original issue of authorized Stock be less than the par
value per share of the Stock.
(3) The Committee may reduce the exercise price of an Option at
any time after the time of grant, but in the case of an Option
originally awarded as an ISO, only with the consent of the
Participant.
(c) Duration of Options. The latest date on which an Option may be
exercised will be the tenth anniversary (fifth anniversary, in the case of an
ISO granted to a ten-percent shareholder) of the day immediately preceding
the date the Option was granted, or such earlier date as may have been
specified by the Committee at the time the Option was granted.
(d) Exercise of Options. An Option will become exercisable at such
time or times, and on such conditions, as the Committee may specify. The
Committee may at any time and from time to time accelerate the time at which
all or any part of the Option may be exercised.
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Any exercise of an Option must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by (1) any
documents required by the Committee and (2) payment in full in accordance
with paragraph (e) below for the number of shares for which the Option is
exercised.
(e) Payment for Stock. Stock purchased on exercise of an Option must
be paid for as follows: (1) in cash or by check (acceptable to the Company in
accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) if so permitted by the
Committee at or after the grant of the Option (with the consent of the
optionee of an ISO if permitted after the grant) or by the instrument
evidencing the Option, (i) through the delivery of shares of Stock which have
been outstanding for at least six months (unless the Committee approves a
shorter period) and which have a fair market value equal to the exercise
price, (ii) by delivery of a promissory note of the person exercising the
Option to the Company, payable on such terms as are specified by the
Committee, (iii) by delivery of an unconditional and irrevocable undertaking
by a broker to deliver promptly to the Company sufficient funds to pay the
exercise price, or (iv) by any combination of the foregoing permissible forms
of payment.
(f) Discretionary Payments. If (i) the market price of shares of Stock
subject to an Option (other than an Option which is in tandem with a Stock
Appreciation Right as described in Section 6.2 below) exceeds the exercise
price of the Option at the time of its exercise, and (ii) the person
exercising the Option so requests the Committee in writing, the Committee may
in its sole discretion cancel the Option and cause the Company to pay in cash
or in shares of Common Stock (at a price per share equal to the fair market
value per share) to the person exercising the Option an amount equal to the
difference between the fair market value of the Stock which would have been
purchased pursuant to the exercise (determined on the date the Option is
canceled) and the aggregate exercise price which would have been paid.
6.2. Stock Appreciation Rights.
(a) Nature of Stock Appreciation Rights. A Stock Appreciation Right is
an Award entitling the holder on exercise to receive an amount in cash or
Stock or a combination thereof (such form to be determined by the Committee)
determined in whole or in part by reference to appreciation in the fair
market value of a share of Stock on the date of grant as compared to its fair
market value on the date of exercise or any performance standard selected or
established by the Committee.
(b) Grant of Stock Appreciation Rights. Stock Appreciation Rights may
be granted in tandem with, or independently of, Options granted under the
Plan. A Stock Appreciation Right granted in tandem with an Option which is
not an ISO may be granted either at or after the time the Option is granted.
A Stock Appreciation Right granted in tandem with an ISO may be granted only
at the time the Option is granted. The Committee may also grant Stock
Appreciation Rights which provide that following a change in control of the
Company, as determined by the Committee, the holder of such Right will be
entitled to receive, with respect to each share of Stock subject to the
Right, an amount equal to the excess of a specified value (which may include
an average of values) for a share of Stock during a period preceding such
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change in control over the fair market value of a share of Stock on the date
the Right was granted.
(c) Rules Applicable to Tandem Awards. When Stock Appreciation Rights
are granted in tandem with Options, the following will apply:
(1) The Stock Appreciation Right will be exercisable only at
such time or times, and to the extent, that the related Option is
exercisable and will be exercisable in accordance with the procedure
required for exercise of the related Option.
(2) The Stock Appreciation Right will terminate and no longer be
exercisable upon the termination or exercise of the related Option,
except that a Stock Appreciation Right granted with respect to less
than the full number of shares covered by an Option will not be
reduced until the number of shares as to which the related Option has
been exercised or has terminated exceeds the number of shares not
covered by the Stock Appreciation Right.
(3) The Option will terminate and no longer be exercisable upon
the exercise of the related Stock Appreciation Right.
(4) The Stock Appreciation Right will be transferable only with
the related Option.
(5) A Stock Appreciation Right granted in tandem with an ISO may
be exercised only when the market price of the Stock subject to the
Option exceeds the exercise price of such option.
(d) Exercise of Independent Stock Appreciation Rights. A Stock
Appreciation Right not granted in tandem with an Option will become
exercisable at such time or times, and on such conditions, as the Committee
may specify. The Committee may at any time accelerate the time at which all
or any part of the Right may be exercised.
Any exercise of an independent Stock Appreciation Right must be in
writing, signed by the proper person and delivered or mailed to the Company,
accompanied by any other documents required by the Committee.
6.3. Restricted and Unrestricted Stock.
(a) Grant of Restricted Stock. Subject to the terms and provisions of
the Plan, the Committee, at any time and from time to time, may grant shares
of Restricted Stock in such amounts and upon such terms and conditions as the
Committee shall determine subject to the restrictions described below.
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(b) Restricted Stock Agreement. The Committee may require, as a
condition to an Award, that a recipient of a Restricted Stock Award enter
into a Restricted Stock Award Agreement, setting forth the terms and
conditions of the Award. In lieu of a Restricted Stock Award Agreement, the
Committee may provide the terms and conditions of an Award in a notice to the
Participant of the Award, on the Stock certificate representing the
Restricted Stock, in the resolution approving the Award, or in such other
manner as it deems appropriate.
(c) Transferability and Other Restrictions. Except as otherwise
provided in this Section 6.3, the shares of Restricted Stock granted herein
may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable period or periods established by
the Committee and the satisfaction of any other conditions or restrictions
established by the Committee (such period during which a share of Restricted
Stock is subject to such restrictions and conditions is referred to as the
"Restricted Period"). Except as the Committee may otherwise determine, if a
Participant ceases to be an Employee or otherwise suffers a Status Change (as
defined at Section 7.2(a) below) for any reason during the Restricted Period,
the Company may purchase the shares of Restricted Stock subject to such
restrictions and conditions for the amount of cash paid by the Participant
for such shares, or such shares of Restricted Stock shall be forfeited to the
Company if no cash was paid by the Participant.
The Company shall also have the right to retain the certificates
representing shares of Restricted Stock in the Company's possession during
the Restricted Period.
(d) Removal of Restrictions. Except as otherwise provided in this
Section 6.3, a share of Restricted Stock covered by a Restricted Stock grant
shall become freely transferable by the Participant upon completion of the
Restricted Period including the passage of any applicable period of time and
satisfaction of any conditions to vesting. However, unless otherwise
provided by the Committee, the Committee, in its sole discretion, shall have
the right to immediately waive all or part of the restrictions and conditions
with regard to all or part of the shares held by any Participant at any time.
(e) Voting Rights, Dividends and Other Distributions. During the
Restricted Period, Participants holding shares of Restricted Stock granted
hereunder may exercise full voting rights and shall receive all regular cash
dividends paid with respect to such shares. Except as the Committee shall
otherwise determine, any other cash dividends and other distributions paid to
Participants with respect to shares of Restricted Stock including any
dividends and distributions paid in shares shall be subject to the same
restrictions and conditions as the shares of Restricted Stock with respect to
which they were paid.
(f) Other Awards Settled with Restricted Stock. The Committee may, at
the time any Award described in this Section 6 is granted, provide that any
or all the Stock delivered pursuant to the Award will be Restricted Stock.
(g) Unrestricted Stock. The Committee may, in its sole discretion,
sell to any Participant shares of Stock free of restrictions under the Plan
for a price which is not less than the par value of the Stock.
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(h) Notice of Section 83(b) Election. Any Participant making an
election under Section 83(b) of the Code with respect to Restricted Stock
must provide a copy thereof to the Company within 10 days of filing such
election with the Service.
6.4. Deferred Stock.
A Deferred Stock Award entitles the recipient to receive shares of Stock
to be delivered in the future. Delivery of the Stock will take place at such
time or times, and on such conditions, as the Committee may specify. The
Committee may at any time accelerate the time at which delivery of all or any
part of the Stock will take place. At the time any Award described in this
Section 6 is granted, the Committee may provide that, at the time Stock would
otherwise be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the Participant's right to future delivery
of Deferred Stock.
6.5. Performance Awards; Performance Goals.
(a) Nature of Performance Awards. A Performance Award entitles the
recipient to receive, without payment, an amount in cash or Stock or a
combination thereof (such form to be determined by the Committee) following
the attainment of performance goals. Performance goals may be related to
personal performance, corporate performance, departmental performance or any
other category of performance established by the Committee. The Committee
will determine the performance goals, the period or periods during which
performance is to be measured and all other terms and conditions applicable
to the Award.
(b) Other Awards Subject to Performance Condition. The Committee may,
at the time any Award described in this Section 6 is granted, impose the
condition (in addition to any conditions specified or authorized in this
Section 6 or any other provision of the Plan) that Performance Goals be met
prior to the Participant's realization of any payment or benefit under the
Award.
6.6. Loans and Supplemental Grants.
(a) Loans. The Company may make a loan to a Participant ("Loan"),
either on the date of or after the grant of any Award to the Participant. A
Loan may be made either in connection with the purchase of Stock under the
Award or with the payment of any Federal, state and local income tax with
respect to income recognized as a result of the Award. The Committee will
have full authority to decide whether to make a Loan and to determine the
amount, terms and conditions of the Loan, including the interest rate (which
may be zero), whether the Loan is to be secured or unsecured or with or
without recourse against the borrower, the terms on which the Loan is to be
repaid and the conditions, if any, under which it may be forgiven. However,
no Loan may have a term (including extensions) exceeding ten years in
duration.
(b) Supplemental Grants. In connection with any Award, the Committee
may at the time such Award is made or at a later date, provide for and grant
a cash award to the Participant ("Supplemental Grant") not to exceed an
amount equal to (1) the amount of any
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Federal, state and local income tax on ordinary income for which the
Participant may be liable with respect to the Award, determined by assuming
taxation at the highest marginal rate, plus (2) an additional amount on a
grossed-up basis intended to make the Participant whole on an after-tax basis
after discharging all the Participant's income tax liabilities arising from
all payments under this Section 6. Any payments under this subsection (b)
will be made at the time the Participant incurs Federal income tax liability
with respect to the Award.
7. EVENTS AFFECTING OUTSTANDING AWARDS
7.1. Death.
If a Participant dies, the following will apply:
(a) All Options and Stock Appreciation Rights held by the Participant
immediately prior to death, to the extent then exercisable, may be exercised
by the Participant's executor or administrator or the person or persons to
whom the Option or Right is transferred by will or the applicable laws of
descent and distribution, at any time within the one year period ending with
the first anniversary of the Participant's death (or such shorter or longer
period as the Committee may determine), and shall thereupon terminate. In no
event, however, shall an Option or Stock Appreciation Right remain
exercisable beyond the latest date on which it could have been exercised
without regard to this Section 7. Except as otherwise determined by the
Committee, all Options and Stock Appreciation Rights held by a Participant
immediately prior to death that are not then exercisable shall terminate at
death.
(b) Except as otherwise determined by the Committee, all Restricted Stock
held by the Participant must be transferred to the Company (and, in the event
the certificates representing such Restricted Stock are held by the Company,
such Restricted Stock will be so transferred without any further action by the
Participant) in accordance with Section 6.3(d) above.
(c) Any payment or benefit under a Deferred Stock Award, Performance
Award, or Supplemental Grant to which the Participant was not irrevocably
entitled prior to death will be forfeited and the Award canceled as of the
time of death, unless otherwise determined the Committee.
7.2. Termination of Service (Other Than By Death).
If a Participant who is an Employee ceases to be an Employee for any
reason other than death, or if there is a termination (other than by reason
of death) of the consulting, service or similar relationship in respect of
which a non-Employee Participant was granted an Award hereunder (such
termination of the employment or other relationship being hereinafter
referred to as a "Status Change"), the following will apply:
(a) Except as otherwise determined by the Committee, all Options and
Stock Appreciation Rights held by the Participant that were not exercisable
immediately prior to the Status Change shall terminate at the time of the
Status Change. Any Options or Rights that were
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exercisable immediately prior to the Status Change will continue to be
exercisable for a period of three months (or such longer period as the
Committee may determine), and shall thereupon terminate, unless the Award
provides by its terms for immediate termination in the event of a Status
Change (unless otherwise determined by the Committee) or unless the Status
Change results from a discharge for cause which in the opinion of the
Committee casts such discredit on the Participant as to justify immediate
termination of the Award (unless otherwise determined by the Committee). In
no event, however, shall an Option or Stock Appreciation Right remain
exercisable beyond the latest date on which it could have been exercised
without regard to this Section 7. For purposes of this paragraph, in the
case of a Participant who is an Employee, a Status Change shall not be deemed
to have resulted by reason of (i) a sick leave or other bona fide leave of
absence approved for purposes of the Plan by the Committee, so long as the
Employee's right to reemployment is guaranteed either by statute or by
contract, or (ii) a transfer of employment between the Company and a
subsidiary or between subsidiaries, or to the employment of a corporation (or
a parent or subsidiary corporation of such corporation) issuing or assuming
an option in a transaction to which section 424(a) of the Code applies.
(b) Except as otherwise determined by the Committee, all Restricted
Stock held by the Participant at the time of the Status Change must be
transferred to the Company (and, in the event the certificates representing
such Restricted Stock are held by the Company, such Restricted Stock will be
so transferred without any further action by the Participant) in accordance
with Section 6.3 (c) above.
(c) Any payment or benefit under a Deferred Stock Award, Performance
Award, or Supplemental Grant to which the Participant was not irrevocably
entitled prior to the Status Change will be forfeited and the Award cancelled
as of the date of such Status Change unless otherwise determined by the
Committee.
7.3. Certain Corporate Transactions.
Except as otherwise provided by the Committee at the time of grant, in
the event of a consolidation or merger in which the Company is not the
surviving corporation or which results in the acquisition of substantially
all the Company's outstanding Stock by a single person or entity or by a
group of persons and/or entities acting in concert, or in the event of the
sale or transfer of substantially all the Company's assets or a dissolution
or liquidation of the Company (a "covered transaction"), the following rules
shall apply:
(a) Subject to paragraph (b) below, all outstanding Awards requiring
exercise will cease to be exercisable, and all other Awards to the extent not
fully vested (including Awards subject to conditions not yet satisfied or
determined) will be forfeited, as of the effective time of the covered
transaction, provided that the Committee may in its sole discretion, on or
prior to the effective date of the covered transaction, (1) make any
outstanding Option and Stock Appreciation Right exercisable in full, (2)
remove the restrictions from any Restricted Stock, (3) cause the Company to
make any payment and provide any benefit under any Deferred Stock Award,
Performance Award, or Supplemental Grant, (4) remove any performance or other
conditions or restrictions on any Award, and (5) forgive all or any portion
of the principal of or interest on a Loan; or
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(b) With respect to an outstanding Award held by a participant who,
following the covered transaction, will be employed by or otherwise providing
services to a corporation which is a surviving or acquiring corporation in
the covered transaction or an affiliate of such a corporation, the Committee
may at or prior to the effective time of the covered transaction, in its sole
discretion and in lieu of the action described in paragraph (a) above,
arrange to have such surviving or acquiring corporation or affiliate assume
any Award held by such participant outstanding hereunder or grant a
replacement award which, in the judgment of the Committee, is substantially
equivalent to any Award being replaced.
7.4. Termination Following Change of Control.
Notwithstanding any other provision of this Plan, if the Participant's
employment terminates because of a "Qualified Termination" as defined in
Exhibit A, all unvested Options and Stock Appreciation Rights then held by
such person shall immediately become fully vested, all Options and Stock
Appreciation Rights then held by such person shall remain exercisable until
the earlier of (i) the fourth anniversary of such Qualified Termination and
(ii) the latest date on which such Option or Right could have been exercised
without regard to Section 7.1 and Section 7.2, and all other Awards shall
immediately become fully vested and all restrictions, conditions and
performance goals with respect to such Awards shall be deemed satisfied and
shall no longer be applicable.
8. GENERAL PROVISIONS
8.1. Documentation of Awards.
Awards will be evidenced by such written instruments, if any, as may be
prescribed by the Committee from time to time. Such instruments may be in
the form of agreements to be executed by both the Participant and the
Company, or certificates, letters or similar instruments, which need not be
executed by the Participant but acceptance of which will evidence agreement
to the terms thereof.
8.2. Rights as a Stockholder, Dividend Equivalents.
Except as specifically provided by the Plan, the receipt of an Award
will not give a Participant rights as a stockholder; the Participant will
obtain such rights, subject to any limitations imposed by the Plan or the
instrument evidencing the Award, upon actual receipt of Stock. However, the
Committee may, on such conditions as it deems appropriate, provide that a
Participant will receive a benefit in lieu of cash dividends that would have
been payable on any or all Stock subject to the Participant's Award had such
Stock been outstanding. Without limitation, the Committee may provide for
payment to the Participant of amounts representing such dividends, either
currently or in the future, or for the investment of such amounts on behalf
of the Participant.
8.3. Conditions on Delivery of Stock.
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The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan or to remove restriction from shares previously
delivered under the Plan (a) until all conditions of the Award have been
satisfied or removed, (b) until, in the opinion of the Company's counsel, all
applicable Federal and state laws and regulation have been complied with, (c)
if the outstanding Stock is at the time listed on any stock exchange or The
Nasdaq National Market, until the shares to be delivered have been listed or
authorized to be listed on such exchange or market upon official notice of
notice of issuance, and (d) until all other legal matters in connection with
the issuance and delivery of such shares have been approved by the Company's
counsel. If the sale of Stock has not been registered under the Securities
Act of 1933, as amended, the Company may require, as a condition to exercise
of the Award, such representations or agreements as counsel for the Company
may consider appropriate to avoid violation of such Act and may require that
the certificates evidencing such Stock bear an appropriate legend restricting
transfer.
If an Award is exercised by the Participant's legal representative, the
Company will be under no obligation to deliver Stock pursuant to such
exercise until the Company is satisfied as to the authority of such
representative.
8.4. Tax Withholding.
The Company will withhold from any cash payment made pursuant to an
Award an amount sufficient to satisfy all federal, state and local
withholding tax requirements (the "withholding requirements").
In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any
Stock. If and to the extent that such withholding is required, the Committee
may permit the Participant or such other person to elect at such time and in
such manner as the Committee provides to have the Company hold back from the
shares to be delivered, or to deliver to the Company, Stock having a value
calculated to satisfy the withholding requirement. The Committee may make
such share withholding mandatory with respect to any Award at the time such
Award is made to a Participant.
If at the time an ISO is exercised the Committee determines that the
Company could be liable for withholding requirements with respect to a
disposition of the Stock received upon exercise, the Committee may require as
a condition of exercise that the person exercising the ISO agree (a) to
inform the Company promptly of any disposition (within the meaning of section
424(c) of the Code) of Stock received upon exercise, and (b) to give such
security as the Committee deems adequate to meet the potential liability of
the Company for the withholding requirements and to augment such security
from time to time in any amount reasonably deemed necessary by the Committee
to preserve the adequacy of such security.
8.5. Nontransferability of Awards.
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Unless otherwise permitted by the Committee, no Award (other than an
Award in the form of an outright transfer of cash or Unrestricted Stock) may
be transferred other than by will or by the laws of descent and distribution,
and during a Participant's lifetime an Award requiring exercise may be
exercised only by the Participant (or in the event of the Participant's
incapacity, the person or persons legally appointed to act on the
Participant's behalf).
8.6. Adjustments in the Event of Certain Transactions.
(a) In the event of a stock dividend, stock split or combination of
shares, recapitalization or other change in the Company's capitalization, or
other distribution to common stockholders other than normal cash dividends,
after the effective date of the Plan, the Committee will make any appropriate
adjustments to the maximum number of shares that may be delivered under the
Plan under Section 4 above.
(b) In any event referred to in paragraph (a), the Committee will also
make any appropriate adjustments to the number and kind of shares of stock or
securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected
by such change. The Committee may also make such adjustments to take into
account material changes in law or in accounting practices or principles,
mergers, consolidations, acquisitions, dispositions or similar corporate
transactions, or any other event, if it is determined by the Committee that
adjustments are appropriate to avoid distortion in the operation of the Plan.
(c) In the case of ISOs or for purposes of the limits set forth in the
second paragraph of Section 4, the adjustments described in (a) and (b) will
be made only to the extent consistent with continued qualification of the
option under Section 422 of the Code (in the case of an ISO) or Section
162(m) of the Code (in the case of the limits in Section 4).
8.7. Employment Rights, Etc.
Neither the adoption of the Plan nor the grant of Awards will confer
upon any person any right to continued retention by the Company or any
subsidiary as an Employee or otherwise, or affect in any way the right of the
Company or subsidiary to terminate an employment, service or similar
relationship at any time. Except as specifically provided by the Committee
in any particular case, the loss of existing or potential profit in Awards
granted under the Plan will not constitute an element of damages in the event
of termination of an employment, service or similar relationship even if the
termination is in violation of an obligation of the Company to the
Participant.
8.8. Deferral of Payments.
The Committee may agree at any time, upon request of the Participant, to
defer the date on which any payment under an Award will be made.
8.9. Past Services as Consideration.
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Where a Participant purchases Stock under an Award for a price equal to
the par value of the Stock the Committee may determine that such price has
been satisfied by past services rendered by the Participant.
9. EFFECT, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of Awards to a Participant
will affect the Company's right to grant to such Participant awards that are
not subject to the Plan, to issue to such Participant Stock as a bonus or
otherwise, or to adopt other plans or arrangements under which Stock may be
issued to Employees.
The Committee may at any time or times amend the Plan or any outstanding
Award for any purpose which may at the time be permitted by law, or may at
any time terminate the Plan as to any further grants of Awards, provided that
(except to the extent expressly required or permitted by the Plan) no such
amendment will, without the approval of the stockholders of the Company,
effectuate a change for which stockholder approval is required in order for
the Plan to continue to qualify for the award of ISOs under section 422 of
the Code, for the award of performance-based compensation under Section
162(m) of the Code or under Rule 16b-3 promulgated under Section 16 of the
1934 Act.
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EXHIBIT A
For purposes of Section 7.4 of the Plan, the following terms have the
following meanings:
"Base Salary" means Participant's annual base salary, exclusive of any
bonus or other benefits the Participant may receive.
"Cause" means the following, determined by the Committee in its reasonable
judgment:
(i) willful failure to perform, or gross negligence in the
performance of, Participant's duties and responsibilities to the
Company and its subsidiaries; or
(ii) fraud, embezzlement or other material dishonesty with respect to
the Company or any of its subsidiaries; or
(iii) conviction of, or plea of nolo contendere to, a felony or
other crime involving moral turpitude; or
(iv) other conduct by Participant that is materially harmful to the
business, interests or reputation of the Company or any of its
subsidiaries.
"Change of Control" means such time as:
(i) a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) becomes the ultimate "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of
Voting Stock representing more than 50 % of the total voting
power of the Voting Stock of the Company on a fully diluted
basis,
(ii) individuals who on the May 30, 1996 constitute the Board
(together with any new directors whose election by the Board or
whose nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the members of the
Board then in office who either were members of the Board on May
30, 1996 or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the members of the Board then in office and
(iii) the merger or consolidation of the Company with or into
another corporation; or the merger or consolidation of another
corporation with and into the Company, with the effect that,
immediately after such transaction, the Voting Stock of the
entity surviving such merger or consolidation received in such
transaction by the stockholders of the
1
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Company immediately prior to such transaction represents the
ultimate beneficial ownership of less than 50% of Voting Stock
of the entity surviving such merger or consolidation.
"Disability" has the meaning given it in any long-term disability plan of
the Company in which Participant participates. Participant's employment shall be
deemed terminated for Disability when Participant is entitled to receive
long-term disability compensation pursuant to such long-term disability plan.
If the Company does not maintain such a plan, Participant shall be deemed
terminated for Disability if the Company terminates his employment due to
illness, injury, accident or condition of either a physical or psychological
nature as a result of which Participant is unable to perform substantially the
duties and responsibilities of his position for 180 days during a period of 365
consecutive calendar days.
"Good Reason" means the voluntary termination by Participant of his or her
employment after the occurrence, without Participant's express written consent,
of any of the following events:
(i) assignment to Participant of duties materially inconsistent with
his or her positions, duties, responsibilities, or reporting
requirements with the Company (or a subsidiary) immediately prior
to a Change of Control or a material adverse alteration in
Participant's status or the nature of his or her responsibilities
with the Company immediately prior to a Change in Control; or
(ii) reduction in Participant's rate of Base Salary to less than 100
percent of the rate of Base Salary paid to the Participant
immediately preceding the Change of Control, or reduction in
Participant's total cash compensation opportunities, including
salary, incentives and other benefits, for any fiscal year to
less than 100 percent of the total cash compensation
opportunities made available to the Participant immediately
preceding the Change of Control (for this purpose, such
opportunities shall be deemed reduced if the objective standards
by which Participant's incentive compensation is measured become
materially more stringent or if the amount of such compensation
is materially reduced on a discretionary basis from the amount
that would be payable solely by reference to the objective
standards).
"Qualified Termination" means the termination of Participant's employment
during a Standstill Period (1) by the Company other than for Cause, death or
Disability, and (2) in the case of a Participant who at the time of the Change
of Control holds an office specifically designated by the Committee in its sole
discretion to have such right, by Participant for Good Reason.
"Standstill Period" is the period commencing on the date of a Change of
Control and continuing until the close of business on the last business day of
the 24th calendar month following such Change of Control.
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"Voting Stock" means the capital stock of any class or kind ordinarily
having the power to vote for the election of directors, managers or other voting
members of the governing body of such Person.
3
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[FORM OF PROXY]
NATIONAL WIRELESS HOLDINGS INC.
PROXY CARD
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 17, 1998
The undersigned hereby (a) acknowledges receipt of the Notice of Annual
Meeting of Stockholders of National Wireless Holdings Inc. (the "Company") to be
held on April 17, 1998 and the Proxy Statement in connection therewith, each
dated March 23, 1998; (b) appoints Terrence S. Cassidy and Michael J. Specchio
as Proxies, or any of them, each with the power to appoint a substitute; (c)
authorizes the Proxies to represent and vote, as designated hereon, all the
shares of Common Stock of the Company, held of record by the undersigned on
February 26, 1998, at such Annual Meeting and at any adjournment(s) thereof; and
(d) revokes any proxies heretofore given.
PLEASE MARK, SIGN DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
SEE REVERSE
SIDE
<PAGE>
[REVERSE SIDE OF FORM OF PROXY]
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS / / FOR NOMINEE LISTED BELOW / / WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO THE CONTRARY) TO VOTE FOR NOMINEE LISTED BELOW
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual, strike a line
through the nominee's name in the list below.)
CLASS I DIRECTOR: LOUIS B. LLOYD
2. Adoption of 1997 Equity Incentive Plan
<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
3. Ratification of Coopers & Lybrand, L.L.P. as the Company's independent
auditors
<TABLE>
<S> <C> <C>
/ / FOR / / AGAINST / / ABSTAIN
</TABLE>
THIS PROXY WILL BE VOTED as directed, or, if no contrary direction is indicated,
will be voted FOR the election of director, for the adoption of the 1997 Equity
Incentive Plan and FOR the ratification of Coopers & Lybrand, L.L.P. as
independent auditors and as said proxies deem advisable on such other matters as
may properly come before the meeting.
SIGNATURE(S) __________________________
SIGNATURE(S) __________________________
NOTE: Please sign exactly as name
appears hereon. Joint owners
should each sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give full title
as such.
DATE __________________________________
