<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
Wireless One, 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
WIRELESS ONE LOGO
WIRELESS ONE, INC.
1080 RIVER OAKS, SUITE A150
JACKSON, MISSISSIPPI 39208
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Stockholders of Wireless One, Inc.:
The annual meeting of stockholders of Wireless One, Inc. (the "Company")
will be held at the Wireless One Centre located at 2506 Lakeland Drive, 6th
Floor, Jackson, Mississippi 39208 on May 21, 1998, at 10:00 a.m., local time, to
consider and vote on:
1. The election of three directors.
2. A proposal to amend the Company's 1995 Long-Term Performance
Incentive Plan.
3. Such other business as may properly come before the meeting or any
adjournments thereof.
Only holders of record of the Company's Common Stock at the close of
business on April 23, 1998, are entitled to notice of and to vote at the annual
meeting.
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING
ENVELOPE AS PROMPTLY AS POSSIBLE. A PROXY MAY BE REVOKED AT ANY TIME PRIOR TO
THE VOTING THEREOF.
By Order of the Board of Directors
/S/ HENRY G. SCHOPFER III
Henry G. Schopfer III
Secretary
Jackson, Mississippi
April 28, 1998
<PAGE> 3
WIRELESS ONE, INC.
1080 RIVER OAKS, SUITE A150
JACKSON, MISSISSIPPI 39208
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 21, 1998
This Proxy Statement is furnished to stockholders of Wireless One, Inc.
(the "Company") in connection with the solicitation on behalf of its Board of
Directors (the "Board") of proxies for use at the annual meeting of stockholders
of the Company to be held on May 21, 1998, at the time and place set forth in
the accompanying notice and at any adjournments thereof (the "Meeting").
Only stockholders of record of the Company's common stock, $0.01 par value
per share ("Common Stock"), at the close of business on April 23, 1998, are
entitled to notice of and to vote at the Meeting. On that date, the Company had
outstanding 16,910,064 shares of Common Stock, each of which is entitled to one
vote.
The enclosed proxy may be revoked at any time prior to its exercise by
filing with the Secretary of the Company a written revocation or duly executed
proxy bearing a later date. The proxy will also be deemed revoked with respect
to any matter on which the stockholder votes in person at the Meeting.
Attendance at the Meeting will not in and of itself constitute a revocation of a
proxy. Unless otherwise marked, properly executed proxies in the form of the
accompanying proxy card will be voted for the election of the three nominees to
the Board listed below and for the approval of the proposal outlined herein.
This Proxy Statement is first being mailed to stockholders on or about
April 28, 1998. The cost of soliciting proxies hereunder will be borne by the
Company. Proxies may be solicited by mail, personal interview, telephone and
telegraph. Banks, brokerage houses and other nominees or fiduciaries will be
requested to forward the soliciting material to their principals and to obtain
authorization for the execution of proxies. The Company will, upon request,
reimburse them for their expenses in so acting.
ELECTION OF DIRECTORS
GENERAL
The Board currently is comprised of nine directors divided into three equal
classes. The members of each class serve three-year staggered terms with one
class to be elected at each annual meeting. The terms of Messrs. Burkhalter,
Reilly and Shimer will expire at the Meeting. Accordingly, proxies cannot be
voted for more than three nominees.
Unless authority to vote for the election of directors is withheld, the
proxies solicited hereby will be voted FOR the election of each individual named
under "Nominees" below. If any nominee should decline or be unable to serve for
any reason, votes will instead be cast for a substitute nominee designated by
the Board. The Board has no reason to believe that any nominee will decline to
be a candidate or, if elected, will be unable or unwilling to serve. Under the
Company's by-laws, directors are elected by a plurality vote.
Certain of the Company's major stockholders, including Chase Manhattan
Capital Corporation ("CMCC"), Chase Venture Capital Associates, L.P. ("CVCA"),
Baseball Partners and Heartland Wireless Communications, Inc. ("Heartland"), are
parties to a stockholders' agreement with respect to their shares of Common
Stock (the "Agreement"). Pursuant to the Agreement, these shareholders have
agreed to vote their shares of Common Stock so that the Board will have up to
nine members, up to three of whom will be designated by Heartland (at least one
of whom must be independent of Heartland and the Company), up to two of whom
will be designated by CMCC, Baseball Partners and CVCA (collectively, "Chase"),
and one of whom will be designated by certain former stockholders of TruVision
Wireless, Inc. ("TruVision")
<PAGE> 4
(collectively, the "TruVision Stockholders"). The Board has traditionally
nominated for election to the Board those persons nominated by these
shareholders. The remaining directors are designated by the full Board. Of the
current directors, Mr. Burkhalter serves as the nominee of the TruVision
Stockholders, Messrs. Wheeler, McHenry and Shimer serve as the nominees of
Heartland and Messrs. Chavkin and Van Devender serve as the nominees of Chase.
Messrs. Sternberg, Reilly and Luby were originally nominated by certain other
stockholders of the Company, including Messrs. Sternberg and Reilly, who were
parties to the Agreement prior to September 1996. Messrs. Sternberg, Reilly and
Luby now serve as nominees of the full Board.
The Board has nominated and urges you to vote FOR the election of Messrs.
Burkhalter, Reilly and Shimer. Information as of April 1, 1998 regarding the
nominees for re-election to the Board is set forth below:
<TABLE>
<CAPTION>
NOMINEES AGE POSITION
-------- --- --------
<S> <C> <C>
Henry M. Burkhalter....................... 50 President and Chief Executive Officer of the
Company and Director
Sean E. Reilly............................ 37 Vice Chairman of the Board
Daniel L. Shimer.......................... 53 Director
</TABLE>
Information as of April 1, 1998, regarding the remaining directors of the
Company is set forth below:
<TABLE>
<CAPTION>
DIRECTORS AGE POSITION
--------- --- --------
<S> <C> <C>
Hans J. Sternberg......................... 62 Chairman of the Board
Arnold L. Chavkin......................... 46 Director
L. Allen Wheeler.......................... 65 Director
William K. Luby........................... 38 Director
Carroll D. McHenry........................ 54 Director
William J. Van Devender................... 49 Director
</TABLE>
DIRECTOR NOMINEES (CLASS III DIRECTORS) (TERM EXPIRING AT THE 2001 ANNUAL
MEETING)
Henry M. Burkhalter became Chief Executive Officer of the Company in May
1997. Mr. Burkhalter became a director of the Company in April 1996 and
President of the Company and Vice Chairman of the Board upon consummation of the
Company's merger with TruVision in July 1996. Mr. Burkhalter stepped down as
Vice Chairman of the Board in connection with his appointment as Chief Executive
Officer of the Company in May 1997. Mr. Burkhalter had been Chairman of the
Board of Directors, President and Chief Executive Officer of TruVision since its
incorporation in April 1994. He has also served as the Chairman of Pacific Coast
Paging, Inc. since 1990. From 1974 through 1992, he served as President of
Burkhalter & Company, the largest local certified public accounting and
consulting firm in Mississippi. The firm's primary focus was in the
telecommunications industry. Mr. Burkhalter also serves as a director of AmMex
Commercial, Inc.
Sean E. Reilly has served as a director of the Company since its founding
in June 1995 and was appointed Vice Chairman of the Board in May 1997. Mr.
Reilly is currently the President of TLC Properties, a division of Lamar
Advertising Company, a publicly-traded outdoor advertising company, and
President of the Real Estate Division and Director of Mergers and Acquisitions
for Lamar Corporation. He served as the Company's Chief Executive Officer since
its founding until May 1997 and served as Chief Executive Officer and President
of the Company's predecessor ("Old Wireless One") since its founding in late
1993. Prior to joining Old Wireless One, Mr. Reilly served as Vice-President of
Real Estate/Mergers and Acquisitions of Lamar Advertising Company. Mr. Reilly
served in the Louisiana Legislature as a State Representative from March 1988 to
January 1996.
Daniel L. Shimer became a director of the Company in February 1996. Mr.
Shimer is President of Shimer Capital Partners, Inc., a financial consulting and
merchant banking company started in September 1996. From April 1994 to September
1996, he served as Executive Vice President and Chief Financial Officer
2
<PAGE> 5
of COREStaff, Inc., a publicly-traded provider of staffing services. From March
1991 to March 1994, Mr. Shimer served as the Executive Vice-President and Chief
Financial Officer of Brice Foods, Inc., an international manufacturer and
retailer of frozen dessert products.
CLASS II DIRECTORS (TERM EXPIRING AT THE 2000 ANNUAL MEETING)
William K. Luby became a director of the Company in June 1995 and a
director of Old Wireless One in April 1995. Since October 1996, Mr. Luby has
been a partner in CEA Capital Partners, USA L.P., a private equity investor.
From April 1996 to October 1996, he served as President of Two River Capital.
From June 1992 to March 1996, Mr. Luby was a managing director at CMCC. From
1985 to 1992, Mr. Luby held various positions in the Leveraged Lending and
Restructuring groups at The Chase Manhattan Bank, N.A.
Carroll D. McHenry became a director of the Company in July 1997. Mr.
McHenry is the Chairman of the Board, President and Chief Executive Officer of
Heartland. Mr. McHenry was formerly a senior executive at Alltel, Inc., a
national communications holding company ("Alltel"), most recently serving as
President of Alltel's Communications Service Group, and serving as President of
Alltel Mobile Communications, Inc. from July 1992 to May 1995. Mr. McHenry also
serves as a director of CS Wireless Systems, Inc.
William J. Van Devender became a director of the Company in July 1996. Mr.
Van Devender had been a director of TruVision since August 1994. Mr. Van
Devender has founded or served in senior executive positions with VanCom, Inc.,
Van Petroleum, Inc., Green Acres Farms, Inc., Gulf Coast Plywood, Inc. and
Coastal Paper Company. Mr. Van Devender also serves on the Board of Directors of
Alaska-3 Cellular LLC, CelluTissue Holdings, Inc., Pacificom LLC, and various
bank and community organizations.
CLASS I DIRECTORS (TERM EXPIRING AT THE 1999 ANNUAL MEETING)
Hans J. Sternberg has served as Chairman of the Board since the Company's
founding in June 1995 and as Chairman of the Board of Old Wireless One since its
founding in late 1993. He has also served as the Chairman and Chief Executive
Officer of Starmount Life Insurance Company since 1983. He is a former owner and
President and Chief Executive Officer of Maison Blanche Department Stores, a
department store chain.
Arnold L. Chavkin became a director of the Company in April 1996. He has
been a General Partner of Chase Capital Partners ("CCP") since January 1992 and
has served as the President of Chemical Investments, Inc. since March 1991. Mr.
Chavkin is a director of R&B Falcon Corp., American Radio Systems Corporation,
Inc., Bell Sports Corporation, Patina Oil & Gas Corporation, Envirotest Systems
Corp., Forcenergy, Inc. and American Tower Corp. Mr. Chavkin also serves on the
advisory investment boards of the Richina Group, the India Private Equity Fund
and the Southeast Asian Investment Fund.
L. Allen Wheeler became a director of the Company in April 1997. Mr.
Wheeler was the co-founder of Heartland and has served as a director of
Heartland since its formation in September 1990. He served as Vice Chairman of
the Board of Directors of Heartland from February 1996 until February 1997 and,
from January 1997 to February 1997, as Heartland's acting President and Chief
Executive Officer. Mr. Wheeler has owned and managed diversified investments
through Allen Wheeler Management, Inc., a personal holding company, for over 20
years.
---------------------
During 1997, the Board held eight meetings. Each director attended at least
75% of the aggregate number of meetings held during 1997 of the Board and
committees of which he was a member.
The Board has established an Audit Committee and a Compensation Committee.
The Audit Committee, which met twice in 1997, oversees the activities of the
Company's independent auditors, including approving the scope of the annual
audit activities of the independent auditors, and reviews audit results and the
internal audit controls of the Company. The current members of the Audit
Committee are Messrs. Chavkin, Shimer and Van Devender. The Compensation
Committee, which also met twice in 1997, is authorized to make recommendations
to the Board with respect to general employee benefit levels, determine the
compensation and benefits of the Company's executive officers and administer the
Company's stock option plans. The
3
<PAGE> 6
current members of the Compensation Committee are Messrs. Reilly, Luby and
McHenry. The Company does not have a nominating committee.
COMPENSATION OF DIRECTORS
Each non-employee director receives an annual fee of $5,000, plus $500 for
each Board meeting attended. All directors are reimbursed for reasonable
out-of-pocket expenses incurred in attending Board and committee meetings. In
addition, each non-employee Director (an "Eligible Director") is eligible to
receive stock options under the Company's 1996 Non-Employee Directors' Stock
Option Plan (the "Directors' Plan"). Pursuant to the Directors' Plan, each
director who is an Eligible Director on each November 15 will also be granted on
the following January 1 options to purchase an additional 2,000 shares of Common
Stock. The Company granted options to purchase 8,000 shares of Common Stock
(excluding options that were granted but subsequently forfeited) to non-employee
directors under the Directors' Plan during 1997.
PROPOSAL TO APPROVE
THE AMENDED 1995 LONG-TERM PERFORMANCE INCENTIVE PLAN
GENERAL
The board believes that the growth of the Company depends significantly
upon the efforts of its officers, key employees and key service providers and
that such individuals are best motivated to put forth maximum effort on behalf
of the Company if they own an equity interest in the Company. In accordance with
this philosophy, the Board adopted and the Company's stockholders approved the
1995 Long-Term Performance Incentive Plan (the "Plan"). In November 1997, the
Board amended the Plan to increase the number of shares of Common Stock subject
to the Plan to 1,700,000 and has directed that the Plan, as amended, be
submitted for approval by the stockholders at the Meeting.
Officers, other key employees of the Company and its subsidiaries, and key
individuals performing services for the Company or any of its subsidiaries are
eligible to receive awards ("Incentives") under the Plan when designated by the
Compensation Committee of the Board (the "Committee"). With respect to
participants not subject to Section 16 of the Securities Exchange Act of 1934
(the "Exchange Act") or Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), the Committee may delegate its authority to grant
incentives under the Plan to appropriate personnel of the Company. Presently,
there are approximately 30 employees of the Company, including its executive
officers, who may be expected to participate in the Plan. The Company does not
presently intend to grant Incentives to outside service providers. Incentives
under the Plan may be granted in any one or a combination of the following
forms: (i) incentive and non-qualified stock options, (ii) stock appreciation
rights, (iii) restricted stock, (iv) performance grants and (v) any other type
of award deemed by the Committee of the Board to be consistent with the purposes
of the Plan ("Other Equity-Based Incentives").
PURPOSES OF THE PROPOSAL
The Board is committed to creating and maintaining a compensation system
based to a significant extent on grants of equity-based incentive awards. The
Board considers equity-based incentives an important component of its efforts to
attract and retain talented individuals as employees and advisors. In addition,
the Board believes that such grants help the Company attain its long-term goals
by linking the compensation of key employees and advisors to stockholder
returns. The Board believes that approval of the amended Plan will allow the
Company to continue to provide members of management, key personnel and key
advisors with a proprietary interest in the growth and performance of the
Company.
TERMS OF THE PLAN
The terms of the Plan are summarized below. The summary is qualified by
reference to the text of the Plan as amended and proposed for approval, which is
attached to this Proxy Statement as Exhibit A.
4
<PAGE> 7
Shares Issuable through the Plan
The amendment to the Plan increased the total number of shares of Common
Stock with respect to which Incentives may be granted under the Plan from
1,300,000 to 1,700,000 shares. As of April 1, 1998, there were 1,283,560 shares
of Common Stock subject to outstanding options granted under the Plan to
officers, directors and employees, 200,000 of which were granted subject to
approval of the Plan at the Meeting, and 65,000 shares of Common Stock granted
as Other Equity-Based Incentives. Incentives with respect to no more than
325,000 shares of Common Stock may be granted to a single participant in one
taxable year.
If any shares of Common Stock issued as restricted stock or otherwise
subject to repurchase or forfeiture rights are reacquired by the Company
pursuant to such rights, or if any Incentive is canceled, terminates or expires
unexercised, any shares of Common Stock that would otherwise have been issuable
pursuant thereto will be available for issuance under new Incentives.
Unless otherwise specifically provided in the instrument governing the
Incentive, in the event of any change in the outstanding Common Stock by reason
of any stock split, dividend, split-up, split-off, spin-off, recapitalization,
merger, consolidation, rights offering, reorganization, combination or exchange
of shares, a sale by the Company of all of its assets, any distribution to
stockholders other than a normal cash dividend, or other extraordinary or
unusual event, if the Committee shall determine, in its discretion, that such
change equitably requires an adjustment in the terms of any Incentive or the
number of shares of Common Stock available for Incentives, such adjustment may
be made by the Committee and shall be conclusive and binding for all purposes of
the Plan.
On April 13, 1998, the closing sale price of a share of Common Stock, as
reported on the Nasdaq National Market, was $1.125.
Administration of the Plan
The Plan is administered solely by the Committee, subject to its ability to
delegate such administration described above. The Committee has broad powers
under the Plan, including exclusive authority (except as otherwise provided
therein) (i) to determine which of the Company's employees and advisors will
receive Incentives, (ii) to determine the type, size and terms of Incentives,
(iii) to modify the terms of any Incentives that have been granted, (iv) to
determine the time when Incentives will be granted, (v) to establish performance
objectives, (vi) to prescribe the form of the instruments embodying any
Incentive granted under the Plan and (vii) to interpret the Plan.
Amendments to the Plan
The Plan may be amended or suspended in whole or in part at any time and
from time to time by the Board, but no amendment shall be effective unless and
until the same is approved by stockholders of the Company where the failure to
obtain such approval would adversely affect the compliance of the Plan with Rule
16b-3 under the Exchange Act or with other applicable law. No amendment of the
Plan shall adversely affect in a material manner any right of any participant
with respect to any Incentive theretofore granted without such participant's
written consent.
Types of Incentives
The Committee may grant the following types of Incentives to officers,
employees and other individuals performing services for the Company: non
qualified or incentive stock options, stock appreciation rights, restricted
stock and performance grants, all of which are described further below. The
Committee may also grant Other Equity-Based Incentives, which are any other type
of award that the Committee deems to be consistent with the purposes of the
Plan.
Stock Options. The Committee may grant or sell non-qualified stock options
or incentive stock options to purchase shares of Common Stock either alone or in
connection with stock appreciation rights, performance grants or other
Incentives. The Committee shall determine the number and exercise price of the
options,
5
<PAGE> 8
which may be less than, equal to, or greater than the fair market value of the
Common Stock on the date of grant, subject to the requirements of Section 422 of
the Code with respect to incentive stock options.
Options granted under the Plan may not be sold or transferred except by
will or the laws of descent and distribution. Unless otherwise set forth in the
instrument evidencing the option, options granted under the Plan shall not be
exercisable for at least six months after the date of grant, unless the
participant ceases employment with, or performance of services for, the Company
prior thereto by reason of death or disability. All options granted under the
Plan shall have a ten-year term, provided that incentive stock options granted
to an employee who owns more than 10% of the outstanding Common Stock (a
"Ten-Percent Employee") shall have five-year terms. Payment of the exercise
price of options granted under the Plan may be in such form as the Committee
determines, including cash, shares of Common Stock, the surrender to the Company
of another Incentive under the Plan, or any combination thereof. No incentive
stock option or other option granted under the Plan (except as otherwise
provided in the instrument evidencing the option) shall be exercisable unless
the recipient has been employed by, or otherwise performing services to, the
Company from the date of grant to the date of such exercise.
Incentive stock options will be subject to certain additional requirements
necessary in order to qualify as incentive stock options under Section 422 of
the Code.
Stock Appreciation Rights. Stock appreciation rights or "SARs" are rights
to receive (without payment to the Company) cash, Common Stock, other Company
securities, property, other forms of payment, or any combination thereof (as
determined by the Committee), based on the increase in value of the number of
shares of Common Stock subject to the SAR. The Committee may grant SARs either
alone, or in conjunction with stock options, performance grants or other
Incentives.
A stock appreciation right or "SAR" shall entitle the holder to exercise
such SAR or to surrender the unexercised option, if any, to which the SAR is
attached to the Company and to receive in exchange therefor, without payment to
the Company, that number of shares of Common Stock (or other form of payment)
having an aggregate value equal to the excess of the fair market value of one
share of Common Stock at the time of such exercise over the exercise price of
the SAR, or of the option to which the SAR is attached, multiplied by the number
of shares subject to the SAR. The Committee shall be entitled in its discretion
to elect whether to settle such obligation in cash, other securities issued by
the Company, property or other forms of payment, or any combination thereof.
The Committee shall determine the number of shares subject to the award of
any SAR. SARs granted under the Plan may not be sold or transferred except by
will or the laws of descent and distribution. Unless otherwise set forth in the
instrument evidencing the SAR, SARs granted under the Plan shall not be
exercisable for at least six months after the date of grant, unless the
participant ceases employment with, or performance of services for, the Company
prior thereto by reason of death or disability. All SARs shall have a ten-year
term, except SARs attached to an incentive stock option granted to a Ten-Percent
Employee, which shall expire five years from the date of grant. Unless otherwise
provided in the instrument evidencing the SAR, the SAR may not be exercised
unless the options to which it is attached, if any, are exercisable, and the
participant has been employed by, or otherwise provided services to, the Company
from the date of grant until the date of exercise.
Restricted Stock. The Committee may determine which participants will be
granted shares of restricted stock and the number of shares of restricted stock
to be granted to such participants. All shares of restricted stock will be
subject to the following restrictions until the expiration of the period
determined by the Committee during which the restrictions shall remain in effect
(the "Restricted Period"): (i) the participant shall be issued, but shall not be
entitled to the delivery of, a stock certificate representing the shares of
restricted stock granted to him, (ii) the restricted stock shall not be
transferrable prior to the end of the Restricted Period, (iii) the restricted
stock shall be forfeited and the stock certificate shall be returned to the
Company and all rights of the holder of the restricted stock to such shares and
as a shareholder shall terminate without further obligation to the Company if
the participant's continuous employment by, or performance of services for, the
Company shall terminate for any reason other than death, disability or
retirement and (iv) such other restrictions as the Committee may, in its
discretion determine.
6
<PAGE> 9
Performance Grants. Performance grants entitle the grantee to receive a
specified amount determined by the Committee (the "Actual Value"), if the terms
and conditions set forth in the Plan and the instrument evidencing the
performance grant award are satisfied. The Committee shall determine the value
or range of values for each performance grant, whether the performance grant
will be awarded in connection with the grant of any other Incentive and the
maximum amount payable under the performance grant (the "Maximum Value"). The
Maximum Value shall be either (i) fixed by the Committee on the date of grant,
(ii) based in whole or in part on the then current value of the Common Stock,
other securities issued by the Company, property of the Company, or a
combination thereof, or (iii) determined from criteria specified by the
Committee.
The Committee shall also determine and set the performance objectives and
the period within which they must be satisfied (the "Award Period"). Performance
objectives shall be based on such measure or measures of performance, which may
include, but need not be limited to, the performance of the grantee, the
Company, one or more of its subsidiaries or one or more of their divisions or
units, or any combination of the foregoing, and may be applied on an absolute
basis or be relative to industry or other indices, or any combination thereof.
The Actual Value will equal the Maximum Value if all performance objectives are
met, and the Committee shall specify the manner in which the Actual Value will
be determined if the objectives are not met.
A participant's right to payments under a performance grant shall be
provisional and may be cancelled or paid in whole or in part, all as determined
by the Committee, if the participant's continuous employment with or performance
of services for, the Company shall terminate for any reason prior to the end of
the Award Period.
The Committee shall determine whether the performance objectives have been
met and what the Actual Value of the performance grant is. If the grant has no
Actual Value, the performance grant shall be deemed to have been cancelled. If
the performance grant has Actual Value and was not awarded in connection with
the grant of some other Incentive (in which case the Committee can determine to
cancel the performance grant or pay the Actual Value), the Company shall pay to
the grantee the Actual Value, which payment shall be made in cash, Common Stock,
other securities or property, or any combination thereof, as may be determined
by the Committee.
Change of Control
In the event of a proposed sale of all or substantially all of the assets
of the Company, or the merger of the Company with or into another corporation,
all restrictions on any outstanding Incentives shall lapse and participants
shall be entitled to full benefits of all such Incentives immediately prior to
the closing date of such sale or merger, unless otherwise provided by the
Committee.
Incentives to be Granted
The grant of Incentives to officers and employees under the Plan is
entirely in the discretion of the Committee. The Committee granted on November
26, 1997, subject to approval of the Plan at the Meeting, options to purchase an
aggregate of 200,000 shares of Common Stock to Mr. Burkhalter. The exercise
price with respect to these options is $2.59 per share. These options will vest
in five equal installments on the first five anniversaries of the date of grant,
provided that Mr. Burkhalter remains employed by the Company during such period.
7
<PAGE> 10
The following table sets forth information with respect to benefits under
the Plan, as proposed to be amended, that were received on November 26, 1997,
subject to stockholder approval of the amended Plan, by (i) each of the officers
identified herein as a "Named Executive Officers," (ii) all executive officers
as a group, and (iii) all employees, other than executive officers, as a group.
NEW PLAN BENEFITS
1995 LONG-TERM PERFORMANCE INCENTIVE PLAN, AS AMENDED
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
NAME AND POSITION OPTIONS
----------------- ----------
<S> <C>
Henry M. Burkhalter, President and Chief Executive
Officer................................................... 200,000
Sean E. Reilly, Vice Chairman of the Board and former Chief
Executive Officer......................................... 0
Henry G. Schopfer III, Executive Vice President and Chief
Financial Officer......................................... 0
Alton C. Rye................................................ 0
All executive officers as a group........................... 200,000
All employees, other than executive officers as a group..... 0
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES
Under existing federal income tax provisions, a participant who receives
stock options, SARs or performance grants or who receives shares of restricted
stock that are subject to restrictions that create a "substantial risk of
forfeiture" (within the meaning of Section 83 of the Code) will not normally
realize any income, nor will the Company normally receive any deduction for
federal income tax purposes, in the year such Incentive is granted.
When a non-qualified stock option granted pursuant to the Plan is
exercised, the employee will realize ordinary income measured by the difference
between the aggregate fair market value of the shares of Common Stock on the
exercise date and the aggregate purchase price of the shares of Common Stock as
to which the option is exercised, and subject to Section 162(m) of the Code, the
Company will be entitled to a deduction in the year the option is exercised in
an amount equal to the amount the employee is required to treat as ordinary
income.
An employee generally will not recognize any income upon the exercise of
any incentive stock option, but the excess of the fair market value of the
shares of Common Stock on the exercise date over the option price will be an
item of adjustment, which may, depending on particular factors relating to the
employee, subject the employee to the alternative minimum tax imposed by Section
55 of the Code. An employee will recognize capital gain or loss in the amount of
the difference between the exercise price and the sale price on the sale or
exchange of Common Stock acquired pursuant to the exercise of an incentive stock
option, provided the employee does not dispose of such stock within either two
years from the date of grant or one year from the date of exercise of the
incentive stock option (the "required holding periods"). An employee disposing
of such shares before the expiration of the required holding periods will
recognize ordinary income generally equal to the difference between the option
price and the fair market value of the Common Stock on the date of the exercise.
The remaining gain, if any, will be capital gain. The Company will not be
entitled to a federal income tax deduction in connection with the exercise of an
incentive stock option, except where the employee disposes of the Common Stock
received upon exercise before the expiration of the required holding periods. In
that event, and subject to Section 162(m) of the Code, the Company will be
entitled to a deduction in the same year and in the same amount as income is
realized by the employee.
When a SAR is exercised, the employee will recognize ordinary income in the
year the SAR is exercised in an amount equal to the value of the appreciation
that he is entitled to receive, and, subject to Section 162(m) of the Code, the
Company will be entitled to receive a deduction in the same year and in the same
amount.
8
<PAGE> 11
An employee who receives restricted stock will normally recognize taxable
income on the date the shares become transferable, are no longer subject to
substantial risk of forfeiture, or on the date of their earlier disposition. The
amount of such taxable income will be equal to the amount by which the fair
market value of the shares of Common Stock on the date such restrictions lapse
(or any earlier date on which the shares are disposed of) exceeds their purchase
price if any. An employee may elect, however, to include in income in the year
of purchase or grant the excess of the fair market value of the shares of Common
Stock (without regard to any restrictions) on the date of purchase or grant over
their purchase price. Subject to Section 162(m) of the Code, the Company will be
entitled to a deduction for compensation paid in the same year and in the same
amount as income is realized by the employee. Dividends currently paid to the
participant will be taxable compensation income to the participant and, subject
to Section 162(m) of the Code, deductible by the Company.
An employee who receives a performance grant in the form of cash will
recognize taxable income on the date that such cash is received and, subject to
Section 162(m) of the Code, the Company will be entitled to a deduction in the
same year and in the same amount. An employee who receives a performance grant
in the form of an option will be taxed in the same manner as described in the
preceding paragraphs describing the tax consequences of non-qualified and
incentive stock options, depending upon the type of option received. The Company
will be entitled to a deduction as described in the applicable description of
non-qualified or incentive stock options.
An employee who receives a performance grant in the form of Common Stock,
securities or other property will normally recognize taxable income on the date
that such Common Stock, securities or other property is received in the amount
of the fair market value of such Common Stock, securities or other property,
unless the Common Stock, securities or other property is subject to a
substantial risk of forfeiture. In that event, the employee will not normally
recognize taxable income until the date the Common Stock, securities or other
property become transferable, are no longer subject to substantial risk of
forfeiture, or on the date of their earlier disposition. An employee may elect,
however, to include in income in the year of the award the fair market value of
the Common Stock, securities or other property (without regard to any
restrictions) on the date of the award. Subject to Section 162(m) of the Code,
the Company will be entitled to a deduction for compensation paid in the same
year and in the same amount as income is realized by the employee.
When the exercisability or vesting of an Incentive granted under the Plan
is accelerated upon a change of control, any excess on the date of the change in
control of the fair market value of the shares or cash issued under Incentives
over the purchase price of such shares may be characterized as "parachute
payments" (within the meaning of Section 280G of the Code) if the sum of such
amounts and any other such contingent payments received by the employee exceeds
an amount equal to three times the "base amount" for such employee. The base
amount generally is the average of the annual compensation of such employee for
the five years preceding such change in ownership or control. An "excess
parachute payment" with respect to any employee, is the excess of the present
value of the parachute payments to such person, in the aggregate, over and above
such person's base amount. If the amounts received by an employee upon a change
in control are characterized as parachute payments, such employee will be
subject to a 20% excise tax on the excess parachute payments pursuant to Section
4999 of the Code, and the Company will be denied any deduction with respect to
such excess parachute payments.
This summary of federal income tax consequences does not purport to be
complete. Reference should be made to the applicable provisions of the Code.
There also may be state and local income tax consequences applicable to
transactions involving Incentives.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the total voting power
present or represented by proxy at the Meeting is required for approval of the
Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THE PROPOSED AMENDMENT TO THE 1995 LONG-TERM PERFORMANCE INCENTIVE PLAN.
9
<PAGE> 12
STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS
AND CERTAIN STOCKHOLDERS
The following table sets forth certain information as of April 1, 1998 with
respect to the beneficial ownership of Common Stock of (i) each director and
nominee of the Company, (ii) each Named Executive Officer (as hereinafter
defined), (iii) all directors and executive officers of the Company as a group
and (iv) persons owning of record or known to the Company to be the beneficial
owner of more than five percent of the Company's Common Stock determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934. Unless
otherwise indicated, the securities are held with sole voting and investment
power.
<TABLE>
<CAPTION>
COMMON STOCK(1)
--------------------
NUMBER OF PERCENT
NAME SHARES OF CLASS
- ---- --------- --------
<S> <C> <C>
Heartland Wireless Communications, Inc.(2).................. 3,459,508 20.5%
Chase Manhattan Capital Corporation(3)...................... 1,991,690 11.8%
Chase Venture Capital Associates L.P.(3).................... 1,517,979 9.0%
Baseball Partners(3)........................................ 393,226 2.3%
Henry M. Burkhalter(4)...................................... 891,491 5.3%
Hans J. Sternberg(5)........................................ 450,008 2.6%
Sean E. Reilly(6)........................................... 250,199 1.5%
Arnold L. Chavkin(7)........................................ 3,904,395 23.1%
Carroll D. McHenry(8)....................................... 3,459,508 20.5%
William K. Luby(9).......................................... 394,726 2.3%
Daniel L. Shimer(10)........................................ 6,300 *
William J. Van Devender(11)................................. 696,736 4.1%
L. Allen Wheeler(12)........................................ 3,459,508 20.5%
Henry G. Schopfer III(13)................................... 5,400 *
Alton C. Rye................................................ 1,000 *
All Directors and executive officers as a group (12
persons)(14).............................................. 9,753,537 55.8%
</TABLE>
- ---------------
* Less than one percent.
(1) Heartland and certain of its subsidiaries, CMCC, CVCA, Baseball Partners,
Mr. Burkhalter, Mr. Van Devender and certain other stockholders of the
Company own their common stock subject to the terms of the Agreement, as
amended. See "Election of Directors -- General." Each of the parties to the
Agreement disclaims beneficial ownership of the shares of Common Stock
owned by the other parties to the Agreement.
(2) Heartland reported on a Schedule 13G filed with the SEC on February 14,
1997, shared voting and dispositive power, as of December 31, 1996, with
respect to 3,259,508 shares of Common Stock. Shares listed for Heartland
also include 200,000 shares of Common Stock that were distributed to
Heartland during 1997 from an escrow account established in October 1995 in
connection with the Heartland Transaction (as defined below). The address
for Heartland is 200 Chisholm Place, Suite 200, Plano, Texas 75075.
(3) CMCC reported on a Schedule 13G filed with the SEC on February 13, 1997,
shared voting and dispositive power, as of December 31, 1996, with respect
to 1,991,690 shares of Common Stock together with The Chase Manhattan Bank,
the direct parent of CMCC, and The Chase Manhattan Corporation, the
indirect parent of CMCC. In the same filing, CVCA reported sole voting and
dispositive power, as of December 31, 1996, with respect to 1,385,388
shares of Common Stock, and Baseball Partners reported shared voting and
dispositive power, as of December 31, 1996, with respect to 393,226 shares
of Common Stock. Shares listed for CVCA also include 132,591 shares held in
escrow for CVCA that were distributed in 1997. The address for CMCC, CVCA
and Baseball Partners is 380 Madison Avenue, 12th Floor, New York, New York
10017.
10
<PAGE> 13
(4) Includes 78,160 owned by Mr. Burkhalter's wife and 78,015 shares issuable
upon the exercise of presently exercisable options. The address for Mr.
Burkhalter is c/o Wireless Once, Inc. 2506 Lakeland Drive, Suite 400,
Jackson, Mississippi 39208.
(5) Includes 12,520 shares owned by Mr. Sternberg's wife and 211,352 shares
issuable upon the exercise of presently exercisable options.
(6) Includes 233,981 shares issuable upon the exercise of presently exercisable
options.
(7) Includes 3,902,895 shares owned by CVCA, CMCC and Baseball Partners. Mr.
Chavkin is a general partner of CCP, the general partner of CVCA. CCP has
investment and voting discretion with respect to the shares held by CMCC.
Baseball Partners has granted a proxy with respect to the shares of Common
Stock held by it to CCP. Mr. Chavkin disclaims beneficial ownership of the
shares held by CVCA, CMCC and Baseball Partners. Also includes 1,500 shares
issuable upon the exercise of currently exercisable options. The address
for Mr. Chavkin is 380 Madison Avenue, 12th Floor, New York, NY 10017.
(8) Consists of 3,459,508 shares beneficially owned by Heartland. Mr. McHenry
is President, Chief Executive Officer and Chairman of the Board of
Heartland. Mr. McHenry disclaims beneficial ownership of shares owned by
Heartland. The address for Mr. McHenry is 200 Chisholm Place, Suite 200,
Plano, Texas 75075.
(9) Includes 393,226 shares of Common Stock beneficially owned by Baseball
Partners. Mr. Luby is a general partner of Baseball Partners and therefore
may be deemed to be a beneficial owner of such shares. Mr. Luby disclaims
beneficial ownership of all of the shares of Common Stock owned by Baseball
Partners in which Mr. Luby has no pecuniary interest. Certain affiliates of
CMCC are general partners of Baseball Partners. Also includes 1,500 shares
issuable upon the exercise of currently exercisable options.
(10) Includes 1,500 shares issuable upon the exercise of currently exercisable
options.
(11) Includes 423,980 shares owned by VanCom, Inc. of which Mr. Van Devender is
the President and controlling stockholder. Also includes 500 shares
issuable upon the exercise of currently exercisable options.
(12) Consists of 3,459,508 shares beneficially owned by Heartland. Mr. Wheeler
is a director of Heartland and disclaims beneficial ownership of shares
owned by Heartland. The address for Mr. Wheeler is c/o Heartland, 200
Chisholm Place, Suite 200, Plano, Texas 75075.
(13) Consists of 5,400 shares issuable upon the exercise of currently
exercisable options.
(14) Includes 555,748 shares issuable upon the exercise of currently exercisable
options held by directors and executive officers.
11
<PAGE> 14
EXECUTIVE COMPENSATION
ANNUAL COMPENSATION
The following table sets forth all cash compensation and options granted
for the three years ended December 31, 1997, to both persons who served as the
Company's Chief Executive Officer during 1997 and its other most highly
compensated executive officers (collectively, the "Named Executive Officers").
In 1997, no other executive officer of the Company received more than $100,000
in salary and bonus.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------------ ------------
SECURITIES
UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS(1) COMPENSATION(2)
--------------------------- ---- -------- ------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Henry M. Burkhalter, President and
Chief 1997 $181,620 $ -- 200,000 $ 8,566
Executive Officer(3) 1996 $ 80,500 $ -- 78,015 $ 2,772
Sean E. Reilly, Vice Chairman of the 1997 $175,000 $ -- -- $ 9,000
Board(4) 1996 $131,781 $ -- -- $ 4,442
1995 $ 87,692 $ -- 201,395 $ --
Henry G. Schopfer III, Executive Vice 1997 $129,400 $ -- 10,000 $17,464
President and Chief Financial 1996 $ 4,615 $ -- 27,000 $ --
Officer(5)
Alton C. Rye, former Executive Vice 1997 $160,558 $15,000 -- $45,496
President -- Operations(6) 1996 $103,467 $15,000 30,000 $ 4,442
1995 $ 31,058 $ -- -- $ --
</TABLE>
- ---------------
(1) For additional information, please refer to the following tables.
(2) All amounts shown are amounts paid in automobile allowances except in the
case of Messrs. Schopfer and Rye, whose 1997 compensation included $8,118
and $38,227, respectively, in moving expenses.
(3) Mr. Burkhalter became Chief Executive Officer of the Company in May 1997. He
began receiving compensation from the Company in August 1996.
(4) Mr. Reilly served as the Company's Chief Executive Officer until May 1997.
(5) Mr. Schopfer was hired in December 1996.
(6) Mr. Rye began receiving compensation from Old Wireless One on August 1,
1995. Mr. Rye's employment was terminated effective December 31, 1997.
12
<PAGE> 15
1997 STOCK OPTION GRANTS
The following table sets forth certain information concerning the grant of
stock options to the Named Executive Officers during 1997.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED ANNUAL
NO. OF RATES OF STOCK PRICE
SHARES % OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED OPTION TERM(2)
OPTIONS TO EMPLOYEES EXERCISE EXPIRATION -----------------------
NAME GRANTED(1) IN 1997 PRICE DATE 5% 10%
---- ---------- --------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Henry M. Burkhalter........ 200,000(3) 43.1% $2.59 11/26/07 $326,000 $826,000
Sean E. Reilly............. -- -- -- -- -- --
Henry G. Schopfer, III..... 10,000 2.1% $2.59 11/26/07 $ 16,300 $ 41,300
Alton C. Rye............... -- -- -- -- -- --
</TABLE>
- ---------------
(1) All options shown vest in five equal installments on the first through fifth
anniversaries of the date of grant, with accelerated vesting in the event of
a change in control of the Company.
(2) Amounts reflect certain assumed rates of appreciation set forth in the
Securities and Exchange Commission's executive compensation disclosure
rules. Actual gains, if any, on stock option exercises depend on future
performance of the Common Stock and overall market conditions. The fair
market value of the Common Stock on the date of grant was $2.59 per share.
At an annual rate of appreciation of 5% per year for the option term, the
stock price would reach $4.22 per share. At an annual rate of appreciation
of 10% per year for the option term, the stock price would reach $6.72 per
share.
(3) These options were granted subject to stockholder approval of an amendment
to the Company's 1995 Long-Term Performance Incentive Plan.
STOCK OPTION HOLDINGS
The following table sets forth information, as of December 31, 1997, with
respect to stock options held by the Named Executive Officers. The Named
Executive Officers did not exercise any options to purchase the Company's Common
Stock in 1997.
AGGREGATED FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1997 DECEMBER 31, 1997(6)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Henry R. Burkhalter(1)........................... 78,015 200,000(2) $0 $0
Sean E. Reilly(3)................................ 233,981 80,558 $0 $0
Henry G. Schopfer, III(4)........................ 5,400 31,600 $0 $0
Alton C. Rye(5).................................. 12,000 0 $0 $0
</TABLE>
- ---------------
(1) Mr. Burkhalter has options to purchase 78,015 shares at an exercise price of
$6.82 per share. The remainder of Mr. Burkhalter's options have an exercise
price of $2.59 per share and vest in five equal installments on the first
through fifth anniversaries of the date of grant, November 26, 1997.
(2) These options are subject to stockholder approval of an amendment to the
Company's 1995 Long-Term Performance Incentive Plan.
(3) At December 31, 1997, Mr. Reilly had the following currently exercisable
options at the following exercise prices: 113,144 at $6.21 per share, 40,279
at $4.16 per share, 40,279 at $5.62 per share and 40,279 at $7.59 per share.
The remainder of Mr. Reilly's options will vest and become exercisable in
two equal installments over the next two years. Each installment will become
exercisable at an exercise price 35% higher than the prior year's
installment.
13
<PAGE> 16
(4) Mr. Schopfer has currently exercisable options to purchase 5,400 shares at
an exercise price of $7.50 per share. Mr. Schopfer also has options to
purchase 21,600 shares, which are not currently exercisable, that have an
exercise price of $7.50 per share. These options vest in four equal
installments over the next four years. Mr. Schopfer also has options to
purchase 10,000 shares at an exercise price of $2.59 per share, none of
which is currently exercisable. These options will vest in five equal
installments over the next five years.
(5) These options, all of which were granted on October 19, 1995, had a ten-year
term, an exercise price per share of $10.50. In connection with Mr. Rye's
termination in 1997, all options that had been granted to Mr. Rye but had
not yet vested were cancelled. As a result of such termination, the
expiration date of Mr. Rye's currently exercisable options was accelerated.
Mr. Rye did not exercise such options within the permitted period and the
options expired.
(6) The closing sale price of the Common Stock on December 31, 1997 was $2.00 as
reported by the Nasdaq National Market.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with certain of its
executive officers, including Messrs. Burkhalter, Reilly and Schopfer. The
employment agreements provide for payment of a base salary indexed to inflation
and bonuses awarded at the sole discretion of the Committee and based upon the
executive's performance and the Company's operating results. Each agreement has
a two-year term and is subject to automatic annual renewal for a period of seven
years thereafter so that the officer, until the end of the seven year period,
never has more than two years or less than one year remaining on the current
term. Each employment agreement provides that each executive may be terminated
with or without cause, and provides that the executive will not compete with the
Company or its subsidiaries within a specified area during the period of
employment and for the two years thereafter. Each executive is entitled to
receive a severance payment in the event of a resignation caused by the
relocation of the Company's office at which the executive is employed to a
location more than 60 miles from its present location.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee are Messrs. Luby, McHenry and
Reilly. Mr. Reilly replaced Mr. Shimer on the Compensation Committee in 1998,
after Mr. Reilly had stepped down as the Company's Chief Executive Officer. No
current officer or employee of the Company serves on the Committee; however, Mr.
Reilly did receive compensation of approximately $184,000 from the Company
during 1997 pursuant to his employment agreement with the Company. During 1997,
no executive officer of the Company served as a member of the compensation
committee or a director of an entity, one of whose executive officers served on
the Committee or as a director of the Company.
Mr. McHenry is a director of Heartland. In connection with the acquisition
of certain assets from Heartland in October 1995 (the "Heartland Transaction"),
the Company entered into certain non-competition and registration rights
agreements with Heartland. See "-- Certain Relationships and Related
Transactions."
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
The Committee was established in connection with the Company's initial
public offering in October 1995. The Committee is authorized to make
recommendations to the Board of Directors with respect to general employee
benefit levels, determine the compensation and benefits of the Company's
officers and key employees and administer the Company's 1995 Long-Term
Performance Incentive Plan. The current members of the Committee are Messrs.
McHenry, Luby and Reilly. None of the members of the Committee is currently an
officer or employee of the Company, although Mr. Reilly served as the Company's
Chief Executive Officer until May 1997 and will continue to serve as a
consultant to and receive payments from, the Company through April 1998,
pursuant to his employment agreement.
In connection with the Heartland Transaction, the Company entered into an
employment agreement with Mr. Reilly who was then the President and Chief
Executive Officer of the Company. This agreement was based in large part upon
the terms of Mr. Reilly's then existing employment agreement with Old Wireless
One, which was executed in April 1995. The terms of this agreement were the
result of arms-length
14
<PAGE> 17
negotiations between Mr. Reilly and CMCC, as the principal investors in Old
Wireless One. The terms of Mr. Reilly's new agreement were subject to the
approval of the Committee. Upon consummation of its merger with TruVision in
July, 1996 (the "TruVision Transaction"), the Company entered into a similar
employment agreement with Mr. Burkhalter, the terms of which were approved by
the Committee. Mr. Schopfer also entered into a similar contract upon his hiring
by the Company in 1996. The compensation arrangements for such executives were
approved by the full Board upon the recommendation of the Committee. Salaries of
such executives were determined by the Committee based upon a review of salaries
for similar positions at comparable companies and over-all competitive and
market conditions. The compensation arrangements for such executives will be
reviewed annually by the Committee.
In general, these employment agreements establish the base salary for each
executive during the term of the agreement, which is subject to adjustment based
upon increases in the Consumer Price Index. Further, the agreements establish
that such executives are eligible to receive performance bonuses to be granted
by the Committee based upon the operating performance of the Company. In
determining whether to grant bonuses to these executives, the Committee
considers the financial condition and operational performance of the Company
during the last completed fiscal year and the specific contributions of the
individual executive officer to the Company's performance and the achievement of
strategic business objectives.
Effective January 5, 1998, the Company hired Ernest D. Yates, Jr. as its
Executive Vice President and Chief Operations Officer. The Company entered into
a three-year employment contract with Mr. Yates providing for an annual salary
of $200,000 which will be indexed to inflation over the life of the contract, a
$50,000 signing bonus and an annual bonus of up to 35% of Mr. Yates' annual
salary based on his performance and the Company's operating results. The
contract was negotiated between representatives of the Company and Mr. Yates,
and its terms approved by the Committee. The Committee took into account Mr.
Yates' experience and the potential he offered to the Company's operations when
approving the terms of the employment agreement.
In addition, the Committee granted to Mr. Yates 200,000 options under the
Plan, which have an exercise price of $2.59 per share and vest over a five-year
period, and 65,000 shares of Common Stock that will be granted to Mr. Yates over
a three-year period beginning on December 31, 1998. These equity incentives were
granted in an effort to align the interests of Mr. Yates with those of the
Company's stockholders as discussed below.
For the immediate future, the Committee intends to rely primarily on equity
incentives granted under the Plan as a means to compensate key members of
management while the Company uses its cash reserves to develop its business. The
Committee believes that such incentives are a cost-effective method of providing
management with long-term compensation. In addition, the Committee believes that
equity incentives are a particularly appropriate long-term incentive since they
align the interests of the optionee with those of the stockholders by providing
value to the optionee tied directly to stock price increases. To this end, in
November 1997, in addition to the incentives granted to Mr. Yates, the Committee
approved the grant of 200,000 options to Mr. Burkhalter, the grant of which is
subject to shareholder approval of the amendment to the Plan proposed herein,
and the grant of 10,000 options to Mr. Schopfer and 4,000 to Laurence O.
Woolhiser, Jr., the Company's Vice President and Controller. The exercise price
of the options granted to Messrs. Burkhalter, Schopfer and Woolhiser is $2.59
per share.
Position Regarding Compliance with Section 162(m) of the Internal Revenue
Code. Section 162(m) of the Code limits the deduction allowable to the Company
for compensation paid to each of the Named Executive Officers in any year to $1
million. Qualified performance-based compensation is excluded from this
deduction limitation if certain requirements are met. Incentives granted by the
Company have been structured to qualify as performance-based. Although no
executive officer of the company reached the deductibility cap in 1997, the
Committee plans to continue to evaluate the Company's cash and stock incentive
programs as to the advisability of future compliance with Section 162(m).
THE COMPENSATION COMMITTEE
<TABLE>
<S> <C>
William K. Luby Carroll D. McHenry
Sean E. Reilly
</TABLE>
15
<PAGE> 18
PERFORMANCE GRAPH
The graph below compares the Company's cumulative total stockholder return
since the Common Stock became publicly traded on October 19, 1995 with the
Nasdaq Total Return Index and an index of comparable companies selected by the
Company. This index includes American Telecasting Development, Inc., Heartland
Wireless Communications, Inc. and People's Choice TV Corp. The graph assumes
that the value of the investment in the Company's Common Stock at its initial
public offering price of $10.50 per share and each index was $100.00 on October
19, 1995. CAI Wireless Systems, Inc. has been removed from the Company's peer
group index since it has been delisted from the NASDAQ National Market.
<TABLE>
<CAPTION>
Measurement Period Wireless One, Nasdaq Total Peer Group
(Fiscal Year Covered) Inc. Return Index Index
<S> <C> <C> <C>
Oct95 100 100 100
Dec95 157 102 106
Dec96 63 125 42
Dec97 19 154 8
</TABLE>
<TABLE>
<CAPTION>
TOTAL RETURN*
----------------------------------------
DECEMBER 31,
--------------------
OCTOBER 19, 1995 1995 1996 1997
---------------- ---- ---- ----
<S> <C> <C> <C> <C>
Wireless One, Inc....................................... 100 157 63 19
Nasdaq Total Return Index............................... 100 102 125 154
Peer Group Index........................................ 100 106 42 8
</TABLE>
- ---------------
* Total Return assumes the reinvestment of dividends.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the Heartland Transaction, Heartland and the Company
entered into an agreement whereby (i) the Company agreed not to compete with
Heartland or any of Heartland's subsidiaries in the wireless cable television
business in specified markets in which Heartland and its subsidiaries operate or
have significant channel rights, (ii) Heartland agreed not to compete with the
Company in the wireless cable television business in specified markets and (iii)
if at any time a wireless cable television system operated by the Company
interferes with the signal transmission of a wireless cable television system
operated by Heartland or one of Heartland's subsidiaries (or vice versa), then
the Company, Heartland and their respective subsidiaries will use their best
efforts to negotiate and enter into an appropriate non-interference agreement.
The Company also entered into a registration rights agreement with Heartland and
all of the former stockholders of Old Wireless One, which was amended and
restated in connection with the TruVision Transaction, to include the former
stockholders of TruVision as parties thereto, pursuant to which the Company
granted to the parties thereto certain demand and "piggy-back" registration
rights with respect to shares of common stock held by such parties.
During 1997, Mr. Reilly, Vice Chairman of the Board, was paid approximately
$184,000 in salary and automobile allowance pursuant to the terms of his
employment agreement with the Company. Mr. Reilly will continue to receive such
salary and benefits through April 1998.
16
<PAGE> 19
Mr. Sternberg, Chairman of the Board, was paid approximately $128,000
during 1997 pursuant to his employment agreement with the Company and will
continue to receive such salary through April 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and 10% stockholders to file with the SEC reports
of ownership and changes in ownership of equity securities of the Company. A
Form 3 required to be filed in 1997 with respect to Mr. Woolhiser, an executive
officer and principal accounting officer of the Company, was not timely filed
due to an oversight.
RELATIONSHIP WITH INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The Company's consolidated financial statements for the year ended December
31, 1997 were audited by the firm of KPMG Peat Marwick LLP. Under the Board
resolution appointing KPMG Peat Marwick LLP to audit the Company's financial
statements, such firm will remain as the Company's auditors until replaced by
the Board. Representatives of KPMG Peat Marwick LLP are expected to be present
at the Meeting, with the opportunity to make any statement they desire at that
time, and will be available to respond to appropriate questions.
OTHER MATTERS
QUORUM AND VOTING OF PROXIES
The presence, in person or by proxy, of a majority of the outstanding
shares of Common Stock is necessary to constitute a quorum. Stockholders voting,
or abstaining from voting, by proxy on any issue will be counted as present for
purposes of constituting a quorum. If a quorum is present, the election of
directors will be determined by plurality vote. The affirmative vote of a
majority of the shares present or represented by proxy and entitled to vote is
required to approve the proposal contained herein and other proposals that may
be properly brought before the Meeting. Abstention will have the effect of a
vote against such proposals. If brokers do not receive instructions from
beneficial owners as to the granting or withholding of proxies and do not
exercise discretionary power to grant a proxy with respect to such shares (a
"broker non-vote") on a proposal, then shares not voted on such proposal as a
result will be counted as not present and not cast with respect to such
proposal.
All proxies received by the Company in the form enclosed will be voted as
specified and, in the absence of instructions to the contrary, will be voted for
the election of the nominees named herein and the proposal to amend the
Company's 1995 Long-Term Performance Incentive Plan. The Company does not know
of any matters to be presented at the Meeting other than those described herein;
however, if any other matters properly come before the Meeting, it is the
intention of the persons named in the enclosed proxy to vote the shares
represented by them in accordance with their best judgment.
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STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Eligible stockholders who desire to present a proposal qualified for
inclusion in the proxy materials relating to the Company's 1999 annual meeting
pursuant to regulations of the Securities and Exchange Commission, must forward
such proposals to the Secretary of the Company in time to arrive at the
Company's principal executive offices prior to December 29, 1998.
The Company's by-laws provide that a stockholder wishing to present a
nomination for election of a director or to bring any other matter before an
annual meeting of stockholders must give written notice to the Company's
Secretary not less than 130 days prior to the meeting; provided, however, that
in the event that less than 70 days' notice or prior public disclosure of the
date of the meeting is given or made to stockholders, notice must be received by
the close of business on the 10th day following such notice of the date of the
annual meeting was mailed and public disclosure was made. In addition, such
notice must meet certain other requirements. Any stockholder interested in
making such a nomination or proposal should request a copy of the Company's
by-laws from the Secretary of the Company.
By Order of the Board of Directors
/S/ HENRY G. SCHOPFER III
Henry G. Schopfer III
Secretary
Jackson, Mississippi
April 28, 1998
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EXHIBIT A
WIRELESS ONE, INC.
1995 LONG-TERM PERFORMANCE INCENTIVE PLAN
1. PURPOSE. The purpose of the 1995 Long-Term Performance Incentive Plan of
Wireless One, Inc. (the "Plan") is to advance the interests of Wireless One,
Inc., a Delaware corporation (the "Company"), and its stockholders by providing
incentives to certain employees of the Company and any of its Subsidiaries and
other key individuals.
2. ADMINISTRATION. The Plan shall be administered solely by the
Compensation Committee (the "Committee") of the Company's Board of Directors
(the "Board"); provided that the Committee may, at any time or from time to
time, delegate the administration of the Plan in whole or in part, on such terms
and conditions, to such other person or persons as it may determine in its
discretion, if and to the extent that both (a) Rule 16b-3 or any successor rule
("Rule 16b-3") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") so permit without adversely affecting the ability of the Plan to
comply with the conditions for exemption from Section 16 of the Exchange Act (or
any successor provision), and (b) Section 162(m) (or any successor provision) of
the Internal Revenue Code of 1986, as amended (the "Code"), and any implementing
regulations (or any successor provisions), so permits without adversely
affecting the deductibility of certain executive compensation. References to the
Committee hereunder shall include the Board and any such delegate(s), where
appropriate. The membership of the Committee or such successor committee shall
be constituted so as to comply at all times with the applicable requirements of
Rule 16b-3 and Code Section 162(m). No member of the Committee shall have within
one year prior to his appointment received awards under the Plan ("Awards") or
under any other plan, program or arrangement of the Company or any of its
affiliates if such receipt would cause such member to cease to be a
"disinterested person" under Rule 16b-3; provided that if at any time Rule 16b-3
so permits without adversely affecting the ability of the Plan to comply with
the conditions for exemption from Section 16 of the Exchange Act (or any
successor provision) provided by Rule 16b-3, on or more members of the Committee
may cease to be a "disinterested person" (provided that such members continue to
meet the requirements for Committee membership specified by Code Section
162(m)).
The Committee has all the powers vested in it by the terms of the Plan set
forth herein, such powers to include exclusive authority (except as may be
delegated as permitted herein) (i) to select the employees of the Company or any
Subsidiary of the Company and other key individuals to be granted Awards under
the Plan, (ii) to determine the type, size and terms of the Award to be made to
each individual selected, subject to the limitations set forth in Paragraph
4(b), (iii) to modify the terms of any Award that has been granted, (iv) to
determine the time when Awards will be granted, (v) to establish performance
objectives, (vi) to make any adjustments necessary or desirable as a result of
the granting of Awards to eligible individuals located outside the United States
and (vii) to prescribe the form of the instruments embodying Awards made under
the Plan. The Committee is authorized (A) to interpret the Plan and the Awards
granted under the Plan, (B) to establish, amend and rescind any rules and
regulations relating to the Plan, and (C) to make any other determinations which
it deems necessary or desirable for the administration of the Plan. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent the
Committee deems necessary or desirable to carry it into effect. Any decision of
the Committee in the interpretation and administration of the Plan, as described
herein, shall lie within its sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned. The Committee may act only by a
majority of its members in office, except that the members thereof may authorize
any one or more of their members or any officer of the Company to execute and
deliver documents or to take any other ministerial action on behalf of the
Committee with respect to Awards made or to be made to Plan participants. No
member of the Committee and no officer of the Company shall be liable for
anything done or omitted to be done by him, by any other member of the Committee
or by any officer of the Company in connection with the performance of duties
under the Plan, except for his own willful misconduct or as expressly provided
by statute.
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3. ELIGIBILITY. Consistent with the purposes of the Plan, the Committee
shall have exclusive power (except as may be delegated as permitted herein) to
select the key employees of the Company or any Subsidiary of the Company and
other key individuals performing services for the Company or any of its
Subsidiaries who may participate in the Plan and be granted Awards under the
Plan. Eligible individuals may be selected individually or by groups or
categories, as determined by the Committee in its discretion. No non-employee
director of the Company shall be eligible to receive an Awards under the Plan.
The term "Subsidiary" as used in this Plan means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if each
of the corporations other than the last corporation in the unbroken chain owns
stock possessing fifty percent or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.
4. AWARDS UNDER THE PLAN.
(a) Types of Awards. Awards under the Plan may include, but need not be
limited to, one or more of the following types, either alone or in any
combination thereof: (i) "Stock Options," (ii) "Stock Appreciation Rights,"
(iii) "Restricted Stock," (iv) "Performance Grants" and (v) any other type of
Award deemed by the Committee in its discretion to be consistent with the
purposes of the Plan (including, but not limited to, Awards of or options or
similar rights granted with respect to unbundled stock units or components
thereof, and Awards to be made to participants who are foreign nationals or are
employed or performing services outside the United States). Stock Options, which
include "Nonqualified Stock Options" (which may be awarded to participants or
sold at a price determined by the Committee ("Purchased Options")) and
"Incentive Stock Options" or combinations thereof, are rights to purchase common
shares of the Company having a par value of $.01 per share and stock of any
other class into which such shares may thereafter be changed (the "Common
Shares"). Nonqualified Stock Options and Incentive Stock Options are subject to
the terms, conditions and restrictions specified in Paragraph 5. Stock
Appreciation Rights are rights to receive (without payment to the Company) cash,
Common Shares, other Company securities (which may include, but need not be
limited to, unbundled stock units or components thereof, debentures, preferred
stock, warrants, securities convertible into Common Stock or other property
("Other Company Securities")) or property, or other forms of payment, or any
combination thereof, as determined by the Committee, based on the increase in
the value of the number of Common Stock specified in the Stock Appreciation
Right. Stock Appreciation Rights are subject to the terms, conditions and
restrictions specified in Paragraph 6. Shares of Restricted Stock are Common
Shares which are issued subject to certain restrictions pursuant to Paragraph 7.
Performance Grants are contingent awards subject to the terms, conditions and
restrictions described in Paragraph 8, pursuant to which the participant may
become entitled to receive cash, Common Shares, Other Company Securities or
property, or other forms of payment, or any combination thereof, as determined
by the Committee.
(b) Maximum Number of Shares that May be Issued. There may be issued under
the Plan (as Restricted Stock, in payment of Performance Grants, pursuant to the
exercise of Stock Options or Stock Appreciation Rights, or in payment of or
pursuant to the exercise of such other Awards as the Committee, in its
discretion, may determine) an aggregate of not more than 1,700,000 Common
Shares, subject to adjustment as provided in Paragraph 14. The maximum number of
Common Shares with respect to which Stock Options, Stock Appreciation Rights,
Restricted Stock, Performance Grants or any other Award may be granted to any
one participant in any one taxable year of the Company shall not exceed 325,000
Common Shares (the "Participant Limitation"). Common Shares issued pursuant to
the Plan may be authorized but unissued shares, treasury shares, reacquired
shares, or any combination thereof. If any Common Shares issued as Restricted
Stock or otherwise subject to repurchase or forfeiture rights are reacquired by
the Company pursuant to such rights, or if any Award is cancelled, terminates or
expires unexercised, any Common Shares that would otherwise have been issuable
pursuant thereto will be available for issuance under new Awards.
(c) Rights with respect to Common Shares and Other Securities.
(i) Unless otherwise determined by the Committee in its discretion, a
participant to whom an Award of Restricted Stock has been made (and any
person succeeding to such a participant's rights pursuant to the Plan)
shall have, after issuance of a certificate for the number of Common Shares
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awarded and prior to the expiration of the Restricted Period (as
hereinafter defined), ownership of such Common Shares, including the right
to vote the same and to receive dividends or other distributions made or
paid with respect to such Common Shares (provided that such Common Shares,
and any new, additional or different shares, or Other Company Securities or
property, or other forms of consideration which the participant may be
entitled to receive with respect to such Common Shares as a result of a
stock split, stock dividend or any other change in the corporation or
capital structure of the Company, shall be subject to the restrictions
hereinafter described as determined by the Committee in its discretion),
subject, however, to the options, restrictions and limitations imposed
thereof pursuant to the Plan. Notwithstanding the foregoing, a participant
with whom an Award agreement is made to issue Common Shares in the future,
shall have no rights as a stockholder with respect to Common Shares related
to such agreement until issuance of a certificate to him.
(ii) Unless otherwise determined by the Committee in its discretion, a
participant to whom a grant of Stock Options, Stock Appreciation Rights,
Performance Grants or any other Award is made (and any person succeeding to
such a participant's rights pursuant to the Plan) shall have no rights as a
stockholder with respect to any Common Shares or as a holder with respect
to other securities, if any, issuable pursuant to any such Award until the
date of the issuance of a stock certificate to him for such Common Shares
or other instrument of ownership, if any. Except as provided in Paragraph
14, no adjustment shall be made for dividends, distributions or other
rights (whether ordinary or extraordinary, and whether in cash, securities,
other property or other forms of consideration, or any combination thereof)
for which the record date is prior to the date such stock certificate or
other instrument of ownership, if any, is issued.
5. STOCK OPTION. The Committee may grant or sell Stock Options either
alone, or in conjunction with Stock Appreciation Rights, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter; provided
that (A) an Incentive Stock Option may be granted only to an eligible employee
of the Company or of any parent or Subsidiary of the Company, (B) no Incentive
Stock Option shall be issued in conjunction with or include an alternative right
(within the meaning of Proposed Treasury regulations sec..1.422A-2(i)(3), and
including without limitation a second Stock Option) if the exercise of either
such alternative right of the Incentive Stock Option would affect the right to
exercise the other or would otherwise permit the avoidance of the requirements
of Code sec..422(b); and (C) any arrangement under which a Stock Appreciation
Right is issued in conjunction with an Incentive Stock Option shall meet the
requirements of Temporary Treasury regulations sec..14a.422A-1, A-39 (or any
successor Treasury regulation in existence at the time of issuance). Each Stock
Option (referred to herein as an "Option") granted or sold under the Plan shall
be evidenced by an instrument in such form as the Committee shall prescribe from
time to time in accordance with the Plan (an "Award Instrument") and shall
comply with the following terms and conditions, and with such other terms and
conditions, including, but not limited to, restrictions upon the Option or the
Common Shares issuable upon exercise thereof, as the Committee, in its
discretion, shall establish:
(a) The price for a Common Share deliverable upon the exercise of an
option (the "Option Price") may be less than, equal to, or greater than,
the fair market value of such Common Share at the time the Option is
granted, as determined by the Committee; provided, however, that in the
case of an Incentive Stock Option, the Option Price shall not be less than
the fair market value of such underlying Common Share at the time the
Option is granted; or if granted to an employee who owns (together with
persons whose ownership is attributable to such employee under Code Section
424(d)) stock representing more than ten percent of the voting power of all
classes of stock of the Company or any parent or Subsidiary (a "Ten Percent
Employee"), such Option Price shall not be less than 110% of such fair
market value at the time the Option is granted; but in no event will such
Option Price be less than the par value of such underlying Common Share.
(b) Subject to the Participant Limitation set forth in Paragraph 4(b),
the Committee shall determine the number of Common Shares to be subject to
each Option. The number of Common Shares subject to an outstanding Option
may be reduced on a share-for-share or other appropriate basis, as
determined by the Committee, to the extent that Common Shares under such
Option are used to calculate the cash, Common Shares, Other Company
Securities or property, other forms of payment, or
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any combination thereof, received pursuant to exercise of a Stock
Appreciation Right attached to such Option, or to the extent that any other
Award granted in conjunction with such Option is paid.
(c) An Option may not be sold, assigned, transferred, pledged,
hypothecated or otherwise disposed of, except by will or the laws of
descent and distribution, and shall be exercisable during the grantee's
lifetime only by him. Unless the Committee determines otherwise, an option
shall not be exercisable for at least six months after the date of grant,
unless the grantee ceases employment or performance of services before the
expiration of such six-month period by reason of his disability as defined
in Paragraph 12 or his death.
(d) An Option shall not be exercisable:
(i) in the case of an Incentive Stock Option granted to a Ten
Percent Employee, after the expiration of five years from the date it is
granted, or, in the case of any other Option, after the expiration of
ten years from the date it is granted;
(ii) unless otherwise specifically provided in an Award Instrument,
unless payment in full is made for the shares being acquired thereunder
at the time of exercise, such payment shall be made in such form
(including, but not limited to, cash, Common Shares, the surrender of
another outstanding Award under the Plan, or any combination thereof) as
the Committee may determine in its discretion; and
(iii) in the case of any Incentive Stock Option, and in the case of
any other Option unless otherwise specifically provided in the Award
Instrument creating such Option, and except as provided in Section 12,
unless the person exercising the Option has been, at all times during
the period beginning with the date of the grant of the Option and ending
on the date of such exercise, employed by or otherwise performing
services for the Company (or a parent or Subsidiary of the Company), or
a corporation (or the parent or Subsidiary of such corporation)
substituting or assuming the Option in a transaction to which Section
424(a) of the Code is applicable.
(e) In the case of an Incentive Stock Option, the aggregate fair
market value of Common Shares (determined at the time of grant of the
Option pursuant to subparagraph 5(a) of the Plan) with respect to which
Incentive Stock Options are exercisable for the first time by an employee
during any calendar year (under all such plans of his employer corporation
and its parent and Subsidiary corporations) shall not exceed $100,000.
(f) It is the intent of the Company that Nonqualified Stock Options
granted under the Plan not be classified as Incentive Stock Options, that
the Incentive Stock Options granted under the Plan be consistent with and
contain or be deemed to contain all provisions required under Section 422
and the other appropriate provisions of the Code and any implementing
regulations (and any successor provisions thereof), and that the provisions
hereof shall be interpreted in order to effectuate such intent. An Award
Instrument granting an Option shall specify whether such Option is intended
to be an Incentive Stock Option or a Nonqualified Stock Option.
6. STOCK APPRECIATION RIGHTS. The Committee may grant Stock Appreciation
Rights either alone, or in conjunction with Stock Options, Performance Grants or
other Awards, either at the time of grant or by amendment thereafter. Each Award
of Stock Appreciation Rights granted under the Plan shall be evidenced by an
Award Instrument and shall comply with the following terms and conditions, and
with such other terms and conditions, including, but not limited to restrictions
upon the Award of Stock Appreciation Rights or the Common Shares issuable upon
exercise thereof, as the Committee, in its discretion, shall establish:
(a) Subject to the Participant Limitation set forth in Paragraph 4(b),
the Committee shall determine the number of Common Shares to be subject to
each Award of Stock Appreciation Rights. The number of Common Shares
subject to an outstanding Award of Stock Appreciation Rights may be reduced
on a share-for-share or other appropriate basis, as determined by the
Committee, to the extent that Common Shares, under such Award of Stock
Appreciation Rights are used to calculate the cash,
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Common Shares, Other Company Securities or property, or other forms of
payment, or any combination thereof, received pursuant to exercise of an
Option attached to such Award of Stock Appreciation Rights, or to the
extent that any other Award granted in conjunction with such Award of Stock
Appreciation Rights is paid.
(b) An Award of Stock Appreciation Rights may not be sold, assigned,
transferred, pledged, hypothecated or otherwise disposed of, except by will
or the laws of descent and distribution, and shall be exercisable during
the grantee's lifetime only by him. Unless the Committee determines
otherwise, an Award of Stock Appreciation Rights shall not be exercisable
for at least six months after the date of grant, unless the grantee ceases
employment or performance of services before the expiration of such six-
month period by reason of his disability as defined in Paragraph 12 or his
death.
(c) An Award of Stock Appreciation Rights shall not be exercisable:
(i) in the case of any Award of Stock Appreciation Rights which is
attached to an Incentive Stock Option granted to a Ten Percent Employee,
after the expiration of five years from the date it is granted, or, in
the case of any other Award of Stock Appreciation Rights, after the
expiration of ten years from the date it is granted. Any Award of Stock
Appreciation Rights may be exercised during such period only at such
time or times and in such installments as the Committee may establish;
(ii) unless otherwise specifically provided in an Award Instrument,
unless the Option or other Award (if any) to which the Award of Stock
Appreciation Rights is attached is at the time exercisable; and
(iii) unless otherwise specifically provided in an Award
Instrument, unless the person exercising the Award of Stock Appreciation
Rights has been, at all times during the period beginning with the date
of the grant thereof and ending on the date of such exercise, employed
by or otherwise performing services for the Company (or the parent or
any Subsidiary of the Company).
(d) An Award of Stock Appreciation Rights shall entitle the holder (or
any person entitled to act under the provisions of Section 12 hereof) to
exercise such Award or to surrender unexercised the Option (or other
Award), if any, to which the Stock Appreciation Right is attached (or any
portion of such Option or other Award) to the Company and to receive from
the Company in exchange therefor, without payment to the Company, that
number of Common Shares having an aggregate value equal to (or, in the
discretion of the Committee, less than) the excess of the fair market value
of one share, at the time of such exercise, over the exercise price (or
Option Price, as the case may be), multiplied by the number of shares
subject to the Award or the Option (or other Award), or portion thereof,
which is so exercised or surrendered, as the case may be. The Committee
shall be entitled in its discretion to elect to settle the obligation
arising out of the exercise of a Stock Appreciation Right by the payment of
cash, Other Company Securities or property, other forms of payment, or any
combination thereof, as determined by the Committee, equal to the aggregate
value of the Common Shares the Company would otherwise be obligated to
deliver. Any such election by the Committee shall be made as soon as
practicable after the receipt by the Committee of written notice of the
exercise of the Stock Appreciation Right. The value of a Common Share,
Other Company Securities or property or other forms of payment determined
by the Committee for this purpose shall be the fair market value thereof on
the last business day next preceding the date of the election to exercise
the Stock Appreciation Right, unless the Committee, in its discretion,
determines otherwise.
(e) A Stock Appreciation Right may provide that it shall be deemed to
have been exercised at the close of business on the business day preceding
the expiration date of the Stock Appreciation Right or of the related
Option (or other Award), or such other date as specified by the Committee,
if at such time such Stock Appreciation Right has a positive value. Such
deemed exercise shall be settled or paid in the same manner as a regular
exercise thereof as provided in subparagraph 6(d) hereof.
(f) No fractional shares may be delivered under this Paragraph 6, but
in lieu thereof a cash or other adjustment shall be made as determined by
the Committee in its discretion.
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7. RESTRICTED STOCK. Each Award of Restricted Stock under the Plan shall be
evidenced by an Award Instrument in such form as the Committee shall prescribe
from time to time in accordance with the Plan and shall comply with the
following terms and conditions, and with such other terms and conditions as the
Committee, in its discretion, shall establish:
(a) Subject to the Participant Limitation set forth in Paragraph 4(b),
the Committee shall determine the number of Common Shares to be issued to a
participant pursuant to the Award and the extent, if any, to which they
shall be issued in exchange for cash, other consideration, or both.
(b) Restricted Stock issued to a participant in accordance with the
Award shall be subject to the following restrictions until the expiration
of such period as the Committee shall determine, from the date on which the
Award is granted (the "Restricted Period"): (i) a participant to whom an
award of Restricted Stock is made shall be issued, but shall not be
entitled to the delivery of, a stock certificate, (ii) the Restricted Stock
shall not be transferable prior to the end of the Restricted Period, (iii)
the Restricted Stock shall be forfeited and the stock certificate shall be
returned to the Company and all rights of the holder of such Restricted
Stock to such shares and as a shareholder shall terminate without further
obligation on the part of the Company if the participant's continuous
employment or performance of services for the Company (or the parent or any
Subsidiary of the Company) shall terminate for any reason prior to the end
of the Restricted Period, except as otherwise provided in subparagraph
7(c), and (iv) such other restrictions as determined by the Committee in
its discretion.
(c) Unless otherwise specifically provided in the Award Instrument, a
participant who has been in continuous employment or performance of
services for the Company (or the parent or any Subsidiary of the Company)
since the date on which a Restricted Stock Award was granted to him shall,
while in such employment or performance of services, die or terminate such
employment or performance of services by reason of total and permanent
disability as defined in Paragraph 12 or by reason of early, normal or
deferred retirement under an approved retirement program of the Company (or
such other plan or arrangement as may be approved by the Committee in its
discretion, for this purpose), and any of such events shall occur after the
date on which the Award was granted to him and prior to the end of the
Restricted Period of such Award, the Committee may determine to cancel any
and all restrictions on any or all of the Common Shares subject to such
Award.
8. PERFORMANCE GRANTS. The Award of a Performance Grant to a participant
will entitle him to receive a specified amount determined by the Committee (the
"Actual Value"), if the terms and conditions specified herein and in the Award
are satisfied. Each Award of a Performance Grant shall be subject to the
following terms and conditions, and to such other terms and conditions,
including but not limited to, restrictions upon any cash, Common Shares, Other
Company Securities or property, other forms of payment, or any combination
thereof, issued in respect of the Performance Grant, as the Committee, in its
discretion, shall establish, and shall be embodied in an Award Instrument in
such form and substance as is determined by the Committee:
(a) Subject to the Participant Limitation set forth in Paragraph 4(b),
the Committee shall determine the value or range of values of a Performance
Grant to be awarded to each participant selected for an Award and whether
or not such a Performance Grant is granted in conjunction with an Award of
Options, Stock Appreciation Rights, Restricted Stock or other Award, or any
combination thereof, under the Plan (which may include, but need not be
limited to, deferred Awards) concurrently or subsequently granted to the
participant (the "Associated Award"). As determined by the Committee, the
maximum value of each Performance Grant (the "Maximum Value") shall be: (i)
an amount fixed by the Committee at the time the Award is made or amended
thereafter, (ii) an amount which varies from time to time based in whole or
in part on the then current value of the Common Shares, Other Company
Securities or property, other securities or property, or any combination
thereof or (iii) an amount that is determinable from criteria specified by
the Committee. Performance Grants may be issued in different classes or
series having different names, terms and conditions. In the case of a
Performance Grant awarded in conjunction with an Associated Award, the
Performance Grant may be reduced on an
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appropriate basis to the extent that the Associated Award has been
exercised, paid to or otherwise received by the participant, as determined
by the Committee.
(b) The award period ("Award Period") related to any Performance Grant
shall be a period determined by the Committee. At the time each Award is
made, the Committee shall establish performance objectives to be attained
within the Award Period as the means of determining the Actual Value of
such a Performance Grant. The performance objectives shall be based on such
measure or measures of performance, which may include, but need not be
limited to, the performance of the participant, the Company, one or more of
its subsidiaries or one or more of their divisions or units, or any
combination of the foregoing, as the Committee shall determine, and may be
applied on an absolute basis or be relative to industry or other indices,
or any combination thereof. The Actual Value of a Performance Grant shall
be equal to its Maximum Value only if the performance objectives are
attained in full, but the Committee shall specify the manner in which the
Actual Value of Performance Grants shall be determined if the performance
objectives are met in part. Such performance measures, the Actual Value or
the Maximum Value, or any combination thereof, may be adjusted in any
manner by the Committee in its discretion at any time and from time to time
during or as soon as practicable after the Award Period, if it determines
that such performance measures, the Actual Value or the Maximum Value, or
any combination thereof, are not appropriate under the circumstances.
(c) The rights of a participant in Performance Grants awarded to him
shall be provisional and may be canceled or paid in whole or in part, all
as determined by the Committee, if the participant's continuous employment
or performance of services for the Company shall terminate for any reason
prior to the end of the Award Period.
(d) The Committee shall determine whether the conditions of
subparagraph 8(b) or 8(c) hereof have been met and, if so, shall ascertain
the Actual Value of the Performance Grants. If the Performance Grants have
no Actual Value, the Award and such Performance Grants shall be deemed to
have been cancelled and the Associated Award, if any, may be cancelled or
permitted to continue in effect in accordance with its terms. If the
Performance Grants have any Actual Value and:
(i) were not awarded in conjunction with an Associated Award, the
Committee shall cause an amount equal to the Actual Value of the
Performance Grants earned by the participant to be paid to him or his
beneficiary as provided below; or
(ii) were awarded in conjunction with an Associated Award, the
Committee shall determine, in accordance with criteria specified by the
Committee (A) to cancel the Performance Grants, in which event no amount
in respect thereof shall be paid to the participant or his beneficiary,
and the Associated Award may be permitted to continue in effect in
accordance with its terms, (B) to pay the Actual Value of the
Performance Grants to the participant or his beneficiary as provided
below, in which event the Associated Award may be cancelled, or (C) to
pay to the participant or his beneficiary as provided below, the Actual
Value of only a portion of the Performance Grants, in which event all or
a portion of the Associated Award may be permitted to continue in effect
in accordance with its terms or be cancelled, as determined by the
Committee.
Such determination by the Committee shall be made as promptly as
practicable following the end of the Award Period or upon the earlier
termination of employment or performance of services, or at such other time or
times as the Committee shall determine, and shall be made pursuant to criteria
specified by the Committee.
Payment of any amount in respect of the Performance Grants which the
Committee determines to pay as provided above shall be made by the Company as
promptly as practicable after the end of the Award Period or at such other time
or times as the Committee shall determine, and may be made in cash, Common
Shares, Other Company Securities or property, other forms of payment, any
combination thereof, or in such other manner as determined by the Committee in
its discretion. Notwithstanding anything in this Paragraph 8 to the contrary,
the Committee may, in its discretion, determine and pay out the Actual Value of
the Performance Grants at any time during the Award Period.
A-7
<PAGE> 28
9. DEFERRAL OF COMPENSATION. The Committee shall determine whether or not
an Award shall be made in conjunction with deferral of the participant's salary,
bonus or other compensation, or any combination thereof, and whether or not such
deferred amounts may be
(i) forfeited to the Company, to other participants or any combination
thereof, under certain circumstances (which may include, but need not be
limited to, certain types of termination of employment or performance of
services for the Company),
(ii) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures, and/or
(iii) credited with income equivalents (which may include, but need
not be limited to, interest, dividends or other rates of return) until the
date or dates of payment of the Award, if any.
10. DEFERRED PAYMENT OF AWARDS. The Committee may specify that the payment
of all or any portion of cash, Common Shares, Other Company Securities or
property, any other form of payment, or any combination thereof, under an Award
shall be deferred until a later date. Deferrals shall be for such periods or
until the occurrence of such events, and upon such terms, as the Committee shall
determine in its discretion. Deferred payments of Awards may be made by
undertaking to make payment in the future based upon the performance of certain
investment equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but need
not be limited to, interest, dividends or other rates of return, or any
combination thereof) as may accrue thereon until the date or dates of payment,
such investment equivalents and such additional amounts of income equivalents to
be determined by the Committee in its discretion.
11. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THE PLAN. The terms of any
outstanding Award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate (including,
but not limited to, acceleration of the date of exercise of any Award and/or
payments thereunder); provided that no such amendment shall adversely affect in
a material manner any right of a participant under the Award without his written
consent, unless (except as otherwise provided in an Award Instrument) the
Committee determines in its discretion that there have occurred or are about to
occur significant changes in the participant's position, duties or
responsibilities, or significant changes in economic, legislative, regulatory,
tax, accounting or cost/benefit conditions which are determined by the committee
in its discretion to have or to be expected to have a substantial effect on the
performance of the Company, or any Subsidiary, affiliate, division or department
thereof, on the Plan or on any Award under the Plan. The Committee may, in its
discretion, permit holders of Awards under the Plan to surrender outstanding
Awards in order to exercise or realize rights under other Awards, or in exchange
for the grant of new Awards, or require holders of Awards to surrender
outstanding Awards as a condition precedent to the grant of new Awards under the
Plan.
12. DEATH AND DISABILITY. Unless otherwise specifically provided in an
Award Instrument, if a participant to whom an Award has been granted under the
Plan shall die or suffer a total and permanent disability while employed by the
Company or any of its Subsidiaries, such Award may be exercised, to the extent
that the participant was entitled to do so at the termination of employment, as
set forth herein, by the participant, legal guardian of the participant (unless
such exercise would disqualify an option as an Incentive Stock Option), a
legatee or legatees of the participant under the participant's last will, or by
the participant's legal representatives or distributees, whichever is
applicable, at any time within one (1) year after the date of the participant's
death or total disability, but in no event later than the date on which the
Award terminates. Notwithstanding the above, if a participant whose employment
terminates by reason of total and permanent disability shall die, a legatee or
legatees of such participant under the participant's last will, or the legal
representative of such participant's estate, shall have the right to exercise
such Award to the extent that the participant was entitled to do so at the
termination of employment, only during the period ending one (1) year after the
date of the participant's termination of employment by reason of disability. For
purposes hereof,
A-8
<PAGE> 29
"total and permanent disability" shall have the meaning set forth in Code
Section 22(e)(3), or any successor provision thereto.
13. TERMINATION OF A PARTICIPANT. For all purposes under the Plan, the
Committee shall determine whether a participant has terminated employment with,
or the performance of services for, the Company (or parent or any Subsidiary of
the Company).
14. DILUTION AND OTHER ADJUSTMENTS. Unless otherwise specifically provided
in an Award Instrument, in the event of any change in the outstanding Common
Shares of the Company by reason of any stock split, dividend, split-up,
split-off, spin-off, recapitalization, merger, consolidation, rights offering,
reorganization, combination or exchange of shares, a sale by the Company of all
its assets, any distribution to stockholders other than a normal cash dividend,
or other extraordinary or unusual event, if the Committee shall determine, in
its discretion, that such change equitably requires an adjustment in the terms
of any Award or the number of Common Shares available for Awards, such
adjustment may be made by the Committee and shall be final, exclusive and
binding for all purposes of the Plan.
In the event of the proposed dissolution or liquidation of the Company, all
outstanding Awards shall terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Committee. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, all restrictions on any
outstanding Awards shall lapse and participants shall be entitled to the full
benefit of all such Awards immediately prior to the closing date of such sale or
merger, unless otherwise provided by the Committee.
15. DESIGNATION OF BENEFICIARY BY PARTICIPANT. Unless otherwise
specifically provided in an Award Instrument, a participant may name a
beneficiary to receive any payment to which he may be entitled in respect of any
Award under the Plan in the event of his death, on a written form to be provided
by and filed with the Committee, and in a manner determined by the Committee in
its discretion. The Committee reserves the right to review and approve
beneficiary designations. A participant may change his beneficiary from time to
time in the same manner, unless such participant has made an irrevocable
designation. Any designation of beneficiary under the Plan (to the extent it is
valid and enforceable under applicable law) shall be controlling over any other
disposition, testamentary or otherwise, as determined by the Committee in its
discretion. If no designated beneficiary survives the participant and is living
on the date on which any amount become payable to such a participant's
beneficiary, such payment will be made to the legal representatives of the
participant's estate, and the term "beneficiary" as used in the Plan shall be
deemed to include such person or persons. If there are any questions as to the
legal right of any beneficiary to receive a distribution under the Plan, the
Committee in its discretion may determine that the amount in question be paid to
the legal representatives of the estate of the participant, in which event the
Company, the Board and the Committee and the members thereof, will have no
further liability to anyone with respect to such amount.
16. FINANCIAL ASSISTANCE. Unless otherwise specifically provided in an
Award Instrument, if the Committee determines that such action is advisable, the
Company may assist any person to whom an Award has been granted in obtaining
financing from the Company (or under any program of the Company approved
pursuant to applicable law), or from a bank or other third party, in such terms
as are determined by the Committee, and in such amount as is required to
accomplish the purposes of the Plan, including, but not limited to, to permit
the exercise of an Award, the participation therein, and/or the payment of any
taxes in respect thereof. Such assistance may take any form that the Committee
deems appropriate, including, but not limited to, a direct loan from the
Company, a guarantee of the obligation by the Company, or the maintenance by the
Company of deposits with such bank or third party.
17. MISCELLANEOUS PROVISIONS.
(a) No employee or other person shall have any claim or right to be granted
an Award under the Plan. Determinations made by the Committee under the Plan
need not be uniform and may be made selectively among eligible individuals under
the Plan, whether or not such eligible individuals are similarly situated.
Neither the Plan nor any action taken hereunder shall be construed as giving any
employee or other person any right to continue to be employed by or perform
services for the Company (or the parent or Subsidiary of the
A-9
<PAGE> 30
Company), and the right to terminate the employment of or performance of
services by any participants at any time and for any reason is specifically
reserved.
(b) No participant or other person shall have any right with respect to the
Plan, the Common Shares reserved for issuance under the Plan or in any Award,
contingent or otherwise, until written evidence of the Award shall have been
delivered to the recipient and all the terms, conditions and provisions of the
Plan and the Award applicable to such recipient (and each person claiming under
or through him) have been met.
(c) Except as may be approved by the Committee where such approval shall
not adversely affect compliance of the Plan with Rule 16b-3 under the Exchange
Act, a participant's rights and interest under the Plan may not be assigned or
transferred, hypothecated or encumbered in whole or in part either directly or
by operation of law or otherwise (except in the event of a participant's death)
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner; provided, however, that
any Option or similar right (including, but not limited to, a Stock Appreciation
Right) offered pursuant to the Plan shall not be transferable other than by will
or the laws of descent and distribution and shall be exercisable during the
participant's lifetime only by him.
(d) No Common Shares, Other Company Securities or property, other
securities or property, or other forms of payment shall be issued hereunder with
respect to any Award unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal, state, local and foreign
legal, securities exchange and other applicable requirements.
(e) It is the intent of the Company that the Plan comply in all respects
with Rule 16b-3 under the Exchange Act and Section 162(m) of the Code, that any
ambiguities or inconsistencies in construction of the Plan be interpreted to
give effect to such intention and that if any provision of the Plan is found not
to be in compliance with Rule 16b-3 or Section 162(m), such provision shall be
deemed null and void to the extent required to permit the Plan to comply with
Rule 16b-3 or Section 162(m), as the case may be.
(f) The Company shall have the right to deduct from any payments made under
the Plan any federal, state, local or foreign income or other taxes required by
law to be withheld with respect to such payment. It shall be a condition to the
obligation of the Company to issue Common Shares, Other Company Securities or
property, other securities or property, or other forms of payment, or any
combination thereof, upon exercise, settlement or payment of any Award under the
Plan, that the participant (or any beneficiary or person entitled to act) pay to
the Company, upon its demand, such amount as may be required by the Company for
the purpose of satisfying any liability to withhold federal, state, local or
foreign income or other taxes. If the amount requested is not paid, the Company
may refuse to issue Common Shares, Other Company Securities or property, other
securities or property, other forms of payment, or any combination thereof.
Notwithstanding anything in the Plan to the contrary, the Committee may, in its
discretion, permit an eligible participant (or any beneficiary or person
entitled to act) to elect to pay a portion or all of the amount requested by the
Company for such taxes with respect to such Award, at such time and in such
manner as the Committee shall deem to be appropriate (including, but not limited
to, by authorizing the Company to withhold, or agreeing to surrender to the
Company on or about the date such tax liability is determinable, Common Shares,
Other Company Securities or property, other securities or property, other forms
of payment, or any combination thereof, owned by such person or a portion of
such forms of payment that would otherwise be distributed, or have been
distributed, as the case may be, pursuant to such Award to such person, having a
fair market value equal to the amount of such taxes).
(g) Each participant shall notify the Company in writing within 10 days
after the date such participant (i) first obtains knowledge of any Internal
Revenue Service inquiry, audit, assertion, determination, investigation, or
question relating in any manner to the value of an Award made hereunder; (ii)
includes or agrees (including, without limitation, in any settlement, closing or
other similar agreement) to include in gross income with respect to any Award
made under this Plan (A) any amount in excess of the amount reported on Form
1099 or Form W-2 to such participant by the Company, or (B) if no such Form was
received, any amount; and (iii) exercises, sells, disposes of, or otherwise
transfers an Option acquired pursuant to this Plan. Upon request, a participant
shall provide to the Company any information or document relating to any event
A-10
<PAGE> 31
described in the preceding sentence which the Company (in its sole discretion)
requires in order to calculate and substantiate any change in the Company's tax
liability as a result of such event.
(h) The expenses of the Plan shall be borne by the Company. (i) The Plan
shall be unfunded. The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the payment
of any Award under the Plan, and the rights to the payment of Awards shall be no
greater than the rights of the Company's general creditors.
(i) By accepting any Award or other benefit under the Plan, each
participant and each person claiming under or through him shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to, any
action taken under the Plan by the Company, the Board or the Committee or its
delegates.
(j) Fair market value in relation to Common Shares, Other Company
Securities or property, other securities or property or other forms of payment
of Awards under the Plan, or any combination thereof, as of any specific time
shall mean such value as determined by the Committee in accordance with
applicable law.
(k) The masculine pronoun includes the feminine and/or neuter and the
singular includes the plural wherever appropriate.
(l) The appropriate officers of the Company shall cause to be filed any
reports, returns or other information regarding Awards hereunder of any Common
Shares issued pursuant hereto as may be required by Section 13 or 15(d) of the
Exchange Act (or any successor provision) or any other applicable statute, rule
or regulation.
(m) The validity, construction, interpretation, administration and effect
of the Plan, and of its rules and regulations, and rights relating to the Plan
and to Awards granted under the Plan, shall be governed by the substantive laws,
but not the choice of law rules, of the State of Delaware.
18. PLAN AMENDMENT OR SUSPENSION. The Plan may be amended or suspended in
whole or in part at any time and from time to time by the Board, but no
amendment shall be effective unless and until the same is approved by
stockholders of the Company where the failure to obtain such approval would
adversely affect the compliance of the Plan with Rule 16b-3 under the Exchange
Act or with other applicable law. No amendment of the Plan shall adversely
affect in a material manner any right of any participant with respect to any
Award theretofore granted without such participant's written consent, except as
permitted under Paragraph 11.
19. PLAN TERMINATION. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating the
Plan;
(b) ten years from the date the Plan is initially approved and adopted
by the stockholders of the Company in accordance with Paragraph 20 hereof;
provided, however, that the Board may, prior to the expiration of such
ten-year period, extend the term of the Plan for an additional period of up
to five years for the grant of Awards other than Incentive Stock Options.
No termination of the Plan shall materially alter or impair any of the
rights or obligations of any person, without his consent, under any Award
theretofore granted under the Plan, except that subsequent to termination
of the Plan, the Committee may make amendments permitted under Paragraph
11.
20. STOCKHOLDER ADOPTION. The Plan shall be submitted to the stockholders
of the Company, for their approval and adoption in accordance with applicable
law and Rule 16b-3 under the Exchange Act and Section 162(m) under the Code. The
Plan shall not be effective and no Award shall be made hereunder unless and
until the Plan has been so approved and adopted.
A-11
<PAGE> 32
WIRELESS ONE, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 21, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Henry M. Burkhalter and
Henry G. Schopfer, III, and each or either of them, proxies of the undersigned,
with full power of substitution, to vote all of the shares of Wireless One,
Inc., a Delaware corporation (the "Company"), which the undersigned may be
entitled to vote at the Annual Meeting of Stockholders of the Company go be held
at the Wireless One Centre, 2506 Lakeland Drive, 6th Floor, Jackson, Mississippi
39208 on May 21, 1998 at 10:00 a.m. or at any adjournment or postponement
thereof, as shown on the voting side of this card.
-------------
SEE REVERSE
SIDE
-------------
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- FOLD AND DETACH HERE -
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Please mark your - 6399
votes as indicated - - -
[X] in this example.
This proxy will be voted as specified. If a choice is not specified, this proxy will be voted FOR the
nominee for Class III Directors and for Proposal Number 2.
1. Election of FOR WITHHELD Nominees: Henry M. Burkhalter 2. Proposal to Amend the Company's FOR AGAINST ABSTAIN
All Nominees [ ] [ ] Sean E. Reilly 1995 Long-Term Performance [ ] [ ] [ ]
for Class III Daniel L. Shimer Incentive Plan.
Directors
Listed Hereon. 3. In their discretion, the proxies are authorized to
vote upon such other business as may properly come
before the Annual Meeting or any adjournment or
postponement thereon.
For all nominees listed hereon, except
vote withheld from the following nominee(s):
---------------------------------
THIS PROXY SHOULD BE DATED, SIGNED BY THE STOCKHOLDER
EXACTLY AS THE STOCKHOLDER'S NAME APPEARS HEREON AND
RETURNED PROMPTLY IN THE ENCLOSED ENVELOPE. PERSONS
SIGNING IN A FIDUCIARY CAPACITY SHOULD SO INDICATE.
Please sign exactly as name(s) appear hereon. Joint
owners should each sign. When signing as attorney,
executor, administrator, trustee or guardian, please
give full title as such.
-----------------------------------------------------------------
SIGNATURE(S) DATE
- ------------------------------------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
</TABLE>
