<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 sec. 240.14a-11(c) or sec. 240.14a-12
</TABLE>
@TRACK Communications, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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
[@TRACK COMMUNICATIONS LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 2000
TO THE STOCKHOLDERS OF @TRACK COMMUNICATIONS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of @TRACK
Communications, Inc. will be held at our principle executive office at 1155 Kas
Drive, Suite 100, Richardson, Texas 75081 on Tuesday, May 23, 2000, at 2:00
p.m., to consider and vote on the following proposals:
1. Election of four directors to hold office until the next Annual
Meeting of Stockholders and until their respective successors shall
have been duly elected and qualified.
2. Ratification of Arthur Andersen, LLP as our independent accountants
for 2000.
3. Amendment of Amended & Restated 1994 Stock Option Plan to permit
non-employee members of the Board of Directors to participate in the
Option Plan
4. Transaction of such other business as may properly come before the
meeting.
The foregoing items of business are more fully described in the attached
proxy statement.
Stockholders of record as of March 24, 2000, will be entitled to vote at
this Annual Meeting. A holder of shares of @TRACK Communications, Inc.'s common
stock is entitled to one vote, in person or by proxy, for each share of common
stock owned by such holder on all matters properly brought before the Annual
Meeting.
All stockholders of @TRACK Communications, Inc. are invited to attend the
annual meeting. Whether or not you expect to attend the annual meeting, we urge
you to sign, date and promptly return the enclosed proxy card to assure your
representation at the meeting. You can revoke your proxy at any time before it
is voted.
This Proxy Statement, voting instruction card and 1999 Annual Report are
being distributed on or about April 26, 2000.
By Order of the Board of Directors
/s/ J. RAYMOND BILBAO
J. Raymond Bilbao
Secretary
Richardson, Texas
April 26, 2000
<PAGE> 3
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 23, 2000
GENERAL QUESTIONS AND ANSWERS
Q: WHAT AM I VOTING ON?
A: Re-election of four directors (Jana A. Bell, Stephen L. Greaves, Gerry C.
Quinn and John T. Stupka), ratification of Arthur Andersen, LLP as @TRACK
Communications, Inc.'s independent accountants and amendment of the
Company's Stock Option Plan to permit non-employee members of the Board
of Directors to participate in the Stock Option Plan.
Q: WHO IS ENTITLED TO VOTE?
A: Stockholders as of the close of business on March 24, 2000 (the Record
Date). Each share of common stock is entitled to one vote.
Q: HOW DO I VOTE?
A: You can vote by completing, signing and returning your proxy card.
Q: HOW DOES DISCRETIONARY AUTHORITY APPLY?
A: If you sign your proxy card, but do not make any selections, your shares
will be voted in favor of the nominees for election of directors, for the
ratification of Arthur Andersen, LLP, and for the amendment of the
Company's Stock Option Plan.
Q: IS MY VOTE CONFIDENTIAL?
A: Yes. Only the inspector, ChaseMellon Shareholders Services, LLC, and
certain employees will have access to your proxy card. All comments will
remain confidential, unless you ask that your name be disclosed.
Q: WHO WILL COUNT THE VOTES?
A: ChaseMellon Shareholder Services, LLC will tabulate the votes and act as
inspector of election.
Q: WHAT CONSTITUTES A QUORUM?
A: As of March 24, 2000, 25,319,731 shares of common stock were issued and
outstanding. A majority of the outstanding shares, present or represented
by proxy, constitutes a quorum. The affirmative vote of a majority of the
outstanding shares, present or represented by proxy, is necessary to
approve the amendment of the Amended & Restated 1994 Stock Option Plan or
to elect a director. If you vote by proxy card, you will be considered
part of the meeting. ChaseMellon Shareholder Services LLC will count
abstentions and broker non-votes in determining whether we have a quorum
at the meeting. If you are present or represented by a proxy at the
Annual Meeting and you abstain, your abstention will have no effect on
the election of directors, but will have the same effect as a vote
against the ratification of Arthur Andersen, LLP and the amending of the
Amended & Restated 1994 Stock Option Plan.
Q: WHAT PERCENTAGES OF STOCK DO THE DIRECTORS AND OFFICERS OWN?
A: Approximately 1% of our common stock as of December 31, 1999. (See page
16 for more details.)
Q: WHO ARE THE LARGEST PRINCIPAL STOCKHOLDERS?
A: Erin Mills Stockholders, which includes shares owned of record by Erin
Mills International Investment Corporation and The Erin Mills Investment
Corporation, owned 9,088,326 shares, or 35.9%, collectively, as of
December 31, 1999.
Southwestern Bell Wireless Holdings, Inc owned preferred stock and
warrants that are convertible into 6,600,000 shares of common stock, or
26.0%, as of December 31, 1999.
<PAGE> 4
Carlyle Stockholders (which includes Carlyle-HighwayMaster Investors,
L.P., Carlyle-HighwayMaster Investors II, L.P. and TC Group, L.L.C.)
owned 2,723,468 shares, or 10.8%, collectively, as of December 31, 1999.
Q: WHEN ARE THE STOCKHOLDER PROPOSALS DUE FOR THE MEETING IN 2001?
A: Stockholder proposals must be in writing and must be received by @TRACK
Communications, Inc., 1155 Kas Drive, Suite 100, Richardson, Texas,
75081, no later than December 13, 2000.
Q: WHO WILL PAY THE SOLICITATION EXPENSES?
A: We will pay the cost of preparing and distributing this proxy statement
and the cost of soliciting votes. We will reimburse stockbrokers and
other custodians, nominees and fiduciaries for forwarding proxy and
solicitation material to the owners of common stock.
Q: WHAT IF I SIGN AND RETURN MY PROXY, BUT LATER CHANGE MY MIND?
A: You may revoke your proxy at any time before it is voted by doing one of
the following:
- Sending a notice revoking your proxy to our Secretary at 1155 Kas
Drive, Suite 100, Richardson, Texas 75081;
- Signing and mailing to us a proxy bearing a later date; or
- Coming to our meeting and voting in person.
Q: WHEN DID THE COMPANY CHANGE ITS CORPORATE NAME FROM HIGHWAYMASTER
COMMUNICATIONS, INC. TO @TRACK COMMUNICATIONS, INC.?
A: The amendment to the Company's Certificate of Incorporation to effect the
corporate name change was effective April 10, 2000. The amendment to the
Company's Certificate of Incorporation was approved by: (a) the Board of
Directors of the company by unanimous written consent dated March 20,
2000; (b) the majority of holders of common stock of the Company by a
written consent in lieu of special meeting of the shareholders dated as
of March 20, 2000; and (c) the sole holder of Series D Convertible
Preferred stock of the Company.
PROPOSALS
1. RE-ELECTION OF DIRECTORS
Nominees for re-election this year are:
- Jana A. Bell (director since 1998);
- Stephen L. Greaves (director since 1994);
- Gerry C. Quinn (director since 1992); and
- John T. Stupka (director since 1998).
The nominees named above have indicated they are able and willing to serve
as directors. If any nominee is unable to serve, the nominee approved by the
proxy card will vote the shares covered by that proxy card for such substitute
nominee as the Board of Directors may select. Stockholders can withhold
authority to vote for any nominee by entering the name of that nominee in the
space provided for such purpose on the proxy card.
Each director will be elected if the number of shares of common stock
present at the Annual Meeting voted in favor of his election is greater than
shares voted against his election.
The Board of Directors recommends that you vote in favor of each nominee.
2. RATIFICATION OF ARTHUR ANDERSEN, LLP AS INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Arthur Andersen, LLP as @TRACK
Communications, Inc.'s independent accountants for 2000. Arthur Andersen, LLP
has audited our financial statements since
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<PAGE> 5
October 13, 1999. Representatives of Arthur Andersen, LLP will attend the Annual
Meeting to answer questions and may make a statement if they so desire.
The selection of Arthur Andersen, LLP as our independent accountants does
not need to be ratified by the stockholders. If the choice of Arthur Andersen,
LLP is not ratified, the Board of Directors and the Audit Committee will
reconsider the retention of Arthur Andersen, LLP. If the selection of Arthur
Andersen, LLP is ratified by the stockholders, the Board of Directors and the
Audit Committee may direct the appointment of a different independent accounting
firm at any time during 2000.
The affirmative vote of a majority of the shares present is needed to
ratify Arthur Andersen, LLP as independent accountants for 2000.
The Board of Directors recommends that you vote in favor of ratifying
Arthur Andersen, LLP as the independent accountants for 2000.
3. AMENDMENT OF AMENDED & RESTATED 1994 STOCK OPTION PLAN
Currently, the Company's Amended & Restated 1994 Stock Option Plan (the
"Stock Option Plan") only permits employees of the Company to participate. In
order to assist the Company in attracting qualified Board members, the Board
approved the amendment of the Company's Stock Option Plan to permit non-employee
members of the Board of Directors of the Company to be eligible to participate
in the Stock Option Plan. Thus, the Company would be able to grant stock options
to current and prospective Board members. A copy of the proposed Amendment to
the Stock Option Plan is attached hereto as Exhibit "A."
The affirmative vote of a majority of the shares present is needed to amend
the Company's Stock Option Plan.
The Board of Directors recommends that you vote in favor of amending the
Company's Stock Option Plan.
DIRECTORS & EXECUTIVE OFFICERS
DIRECTORS
The following individuals are directors of @TRACK Communications, Inc. We
are soliciting your vote with respect to the election of the @TRACK
Communications, Inc. Board of Directors.
JANA A. BELL -- PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR SINCE
SEPTEMBER 1998
Ms. Bell, age 36, was initially employed by @TRACK Communications, Inc. in
June 1998 as its Executive Vice President and Chief Financial Officer. In
September 1998, Ms. Bell was promoted to President and Chief Executive Officer
and she continued to act in the Chief Financial Officer capacity until November
1998. From March 1992 to June 1998, Ms. Bell was employed in a variety of
capacities by AT&T Wireless Services and by its predecessors, LIN Broadcasting
and McCaw Cellular Communications, Inc. She was initially employed as Director
of Financial Planning and Control in March 1992 for LIN Broadcasting. In May
1994, she became Director of Finance for McCaw Properties. From January 1996 to
June 1998 she served in various executive positions over the Southwest region of
AT&T Wireless including Vice President and Chief Financial Officer since 1997.
She last served as AT&T Wireless' Central United States Vice President of
Operations from March 1998 until she left to join @TRACK Communications, Inc.
Prior to her employment at AT&T Wireless, Ms. Bell practiced public accounting
for Ernst & Young LLP, last serving as an audit manager.
STEPHEN L. GREAVES -- DIRECTOR SINCE JUNE 1994
Mr. Greaves, age 41, has served as President of Erin Mills International
Investment Corporation, a private venture capital fund and stockholder of @TRACK
Communications, Inc., since February 1997 and also served as General Manager
from April 1993 to February 1997. From January 1992 until March 1993, Mr.
Greaves worked as a private marketing consultant, and from January 1989 to
December 1991, he served
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<PAGE> 6
as Marketing Planner for Esso Standard Petroleum Oil. Mr. Greaves also serves as
a director of Erin Mills International Investment Corporation, MotorVac
Technologies, Inc., NewMed Corporation and several other privately held
companies.
GERRY C. QUINN -- DIRECTOR SINCE 1992
Mr. Quinn, age 51, served as President of The Eighteen Wheeler Corporation
and The F.B.R. Eighteen Corporation, both of which were affiliates of @TRACK
Communications, Inc., from April 1992 until February 1994. Mr. Quinn has served
as President of The Erin Mills Investment Corporation, since July 1989, and as
Executive Vice President of The Erin Mills Development Corporation, a real
estate development company and stockholder of @TRACK Communications, Inc., since
September 1989. Prior to joining Erin Mills Investment Corporation, Mr. Quinn
served as a senior officer in Magna International Inc. and Barrincorp, both
publicly traded companies, and he served as a partner in the public accounting
firm of Ernst & Young. Currently Mr. Quinn is also a Director of MotorVac
Technologies, Inc.
JOHN T. STUPKA -- DIRECTOR SINCE JUNE 1998
Mr. Stupka, age 50, currently serves as President -- Wireless Solutions of
MCI Worldcom Wireless Solutions. Previously, Mr. Stupka served as President,
Chief Executive Officer and as a director of SkyTel Communications, Inc.,
formerly known as Mobile Telecommunication Technologies Corp. Prior to joining
SkyTel, Mr. Stupka served as Senior Vice President -- Strategic Planning of SBC
Communications, Inc. from August 1995 to August 1996 and as President and Chief
Executive Officer of Southwestern Bell Mobile Systems, Inc. from November 1985
to August 1995. Mr. Stupka is also a director of CellStar Corp.
EXECUTIVE OFFICERS
DAVID H. BAGLEY -- VICE PRESIDENT OF NETWORK OPERATIONS OF @TRACK
COMMUNICATIONS, INC. SINCE DECEMBER 1999
Mr. Bagley, age 46, joined @TRACK Communications, Inc. in October 1992 as
Director of Field Services and has since held several director-level positions
which utilized his 27 years of telecommunications experience. Before joining
@TRACK Communications, Inc., Mr. Bagley served as Vice President, South Central
Division at Comstock Communications from 1987 to 1992. From 1973 to 1987, Mr.
Bagley held various operational and technical management positions at
Southwestern Bell Telecom, United Technologies Communications Company and
General Dynamics Communications Company.
JANA A. BELL -- PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR OF @TRACK
COMMUNICATIONS, INC. SINCE SEPTEMBER 1998
Please refer to page 3 for information regarding Ms. Bell.
J. RAYMOND BILBAO -- GENERAL COUNSEL AND SECRETARY OF @TRACK
COMMUNICATIONS, INC. SINCE FEBRUARY 1999
Mr. Bilbao, age 33, was initially employed by @TRACK Communications, Inc.
in June 1997 as Associate General Counsel. He served in that position until
February 1999, when he was promoted to General Counsel and Secretary. From
September 1996 to June 1997, Mr. Bilbao was a Senior Associate Attorney at
Neligan & Averch, LLP, a Dallas-based law firm, where he represented technology
clients in corporate and litigation matters. From September 1995 to September
1996, Mr. Bilbao was employed by Value-Added Communications, Inc., a
Dallas-based telecommunications company, last serving as its Vice President and
General Counsel. Mr. Bilbao also previously served as an associate attorney at
the law firms of Haney & Tickner, P.C. and Renfro, Mack & Hudman, P.C. Mr.
Bilbao earned his Juris Doctor degree in 1992 from St. Mary's University where
he served as a writer for the St. Mary's Law Journal. Mr. Bilbao is licensed to
practice law in the state of Texas and is admitted to practice before the United
States District Court for the Northern District of Texas.
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<PAGE> 7
TODD A. FELKER -- SENIOR VICE PRESIDENT -- SALES, MARKETING AND ACCOUNT
MANAGEMENT OF @TRACK COMMUNICATIONS, INC. SINCE JUNE 1998
From May 1994 to June 1998, Mr. Felker, age 39, was employed in several
marketing management and product planning positions of increasing responsibility
for AT&T Wireless, last serving as its Vice President of Marketing, Central Area
which encompassed 15 states, 1.6 million customers and over $1 billion in annual
revenue. From May 1989 to May 1994, Mr. Felker held Manager of Marketing
Development and Director of Marketing positions at Crown Media, Inc. and a
predecessor, Cencom Cablevision. From June 1982 to May 1989, Mr. Felker worked
with D'Arcy Masius Benton & Bowles, an advertising firm, where he last served as
a Manager of Media Planning and Research developing and implementing media plans
for Southwestern Bell Telephone and Banquet Frozen Foods.
ROBERT J. LAMBERT, JR. -- VICE PRESIDENT OF INFORMATION TECHNOLOGY OF
@TRACK COMMUNICATIONS, INC. SINCE DECEMBER 1999
Mr. Lambert, age 41, was originally employed by @TRACK Communications, Inc.
as Director of Information Systems in September 1997. Mr. Lambert transitioned
into the role of director of Revenue Assurance and Billing, using his 20 years
of information systems and operations experience to successfully manage the
billing and collection operations for @TRACK Communications, Inc.'s entire
customer base. From 1995 to 1997, Mr. Lambert served as Director of Retail
Operations for CellStar, where he was responsible for the financial and
operational focus of the $100+ million organization. From 1986 to 1995, he was
employed at KPMG Peat Marwick as a Consulting Senior Manager.
ROBERT W. LAMERE -- SENIOR VICE PRESIDENT OF TRANSPORTATION SYSTEMS OF
@TRACK COMMUNICATIONS, INC. SINCE MARCH 1997
Mr. LaMere, age 47, has over 17 years of experience in the transportation
industry. From 1993 to March 1997, he served as the General Manager of Spirit
Systems, the division of Burlington Motor Carriers responsible for all of its
data and telecommunications needs and a support and services provider to other
transportation companies. From 1990 to 1993, Mr. LaMere served as the Vice
President of Information Systems at Burlington.
C. MARSHALL LAMM -- SENIOR VICE PRESIDENT OF OPERATIONS OF @TRACK
COMMUNICATIONS, INC. SINCE DECEMBER 1999
Mr. Lamm, age 49, joined @TRACK Communications, Inc. in March 1999 as
Director of Operations Planning. He served as Vice President of Manufacturing
Operations from June 1999 to December, 1999 when he became Senior Vice President
of Operations. Mr. Lamm came to @TRACK Communications, Inc. from TPN, Inc., a
provider of satellite television programming, where he served as Vice President
of Operations. From 1993 to 1998, Mr. Lamm served as Director of Product
Distribution for AT&T Wireless Services. Prior to 1993, Mr. Lamm compiled over
22 years of high-tech electronics manufacturing experience that spans the
defense, personal computing, healthcare and telecommunications industries. Mr.
Lamm is a Quality Award recipient at AT&T Wireless Services for managing the
team that developed and implemented the national distribution operation.
LOUIS MCANALLY -- VICE PRESIDENT OF ACCOUNT MANAGEMENT OF @TRACK
COMMUNICATIONS, INC. SINCE DECEMBER 1999
Mr. McAnally, age 51, has served @TRACK Communications, Inc. in a variety
of management and executive positions, including Vice President National
Accounts and Vice President Customer Service. Mr. McAnally is currently
responsible for the account management in the field, which includes customer
implementation as well as ongoing support for key customers. Prior to joining
@TRACK Communications, Inc., Mr. McAnally was Director of SLW Response Group, a
subsidiary of Saunders, Lubinski & White and owner of Graphic Response, a full
service marketing and advertising firm.
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<PAGE> 8
PIERRE H. PARENT -- SENIOR VICE PRESIDENT AND CHIEF TECHNOLOGY OFFICER OF
@TRACK COMMUNICATIONS, INC. SINCE JULY 1999
Mr. Parent, age 37, joined @TRACK Communications, Inc. with 15 years of
wireless telecommunications experience in July 1999 as Senior Vice President of
Technology and Business Development. Mr. Parent comes to @TRACK Communications,
Inc. from AT&T Business Services in Dallas where he most recently served as
Sales Director-Advanced Services. From 1995 through 1998, Mr. Parent was
Director of Advanced Products and New Technology and guided the development and
implementation of mobile and fixed telecommunications solutions based on
customers' specific application requirements. In addition to his sales and
telecommunications solutions experience, Mr. Parent has held various engineering
positions at AT&T Wireless Services and US West New Vector Group.
W. MICHAEL SMITH -- EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND
TREASURER OF @TRACK COMMUNICATIONS, INC. SINCE NOVEMBER 1998
Mr. Smith, age 35, joined @TRACK Communications, Inc. after serving from
1997 to 1998 as Vice President of Finance and Chief Financial Officer for TPN,
Inc., a provider of digital satellite programming. Mr. Smith was employed by
AT&T Wireless Services from 1994 to 1997, where he served as Director of
Financial Planning and Control from 1994 to 1996 and as Director of Finance and
Controller from 1996 to 1997. Prior to his employment at AT&T Wireless, Mr.
Smith practiced public accounting for Arthur Andersen & Co., last serving as a
financial consultant and audit manager primarily representing high technology
clients. Mr. Smith earned a Masters in Accounting at the University of North
Texas and is a Certified Public Accountant.
STEPHEN P. TACKE -- VICE PRESIDENT AND CONTROLLER OF @TRACK COMMUNICATIONS,
INC. SINCE AUGUST 1995
From August 1996 to August 1997, Mr. Tacke, age 53, served as acting Chief
Financial Officer of @TRACK Communications, Inc. From July 1991 through August
1995, Mr. Tacke was an independent financial consultant. Prior to July 1991, Mr.
Tacke practiced public accounting for 22 years with PriceWaterhouse, last
serving as an audit partner.
KEN VANDAGRIFF -- VICE PRESIDENT OF CUSTOMER OPERATIONS OF @TRACK
COMMUNICATIONS, INC. SINCE DECEMBER 1999
Since January 1995, Mr. Vandagriff, age 43, has served @TRACK
Communications, Inc. in several positions of increasing responsibility since
1995 including Director of Customer Care, Director of Technical Services,
Director of Information Technology, and Director of System Architecture and Vice
President of Network Operations. From 1989 to 1993, Mr. Vandagriff was employed
at Ventura Software, holding management positions in product support, quality
assurance and information technology. From 1978 to 1988, Mr. Vandagriff served
Xerox Corporation in various management and technology positions.
JONATHAN L. WIENER -- VICE PRESIDENT OF SALES OF @TRACK COMMUNICATIONS,
INC. SINCE DECEMBER 1996
Mr. Wiener, age 40 comes to @TRACK Communications, Inc with over 17 years
of experience directing sales efforts specifically targeting technology products
and services. Mr. Wiener initially joined @TRACK Communications, Inc. as Vice
President of Sales for the Eastern Region in 1996. His expertise in serving
Fortune 500 Information Technology environments and their initiatives has
intimately involved him with the issues associated with linking technology life
cycle planning with strategic business process directives. Previously, Mr.
Wiener was at Penton, Inc., a developer of vertical market application software,
for statistical process control, preventive maintenance, and warehousing and
distribution. Mr. Wiener also served at Ziff Davis Communications Company, a
developer and provider of information services for the technology community.
There are no family relationships among the directors and executive
officers of @TRACK Communications, Inc.
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ORGANIZATION OF THE BOARD OF DIRECTORS AND MEETINGS
The Board of Directors is currently comprised of four directors. Two
directors represent certain of the principal beneficial owners of @TRACK
Communications, Inc.'s common stock and one director is an officer of the
Company. See "Security Ownership of Certain Beneficial Owners and Management"
and "Certain Relationships and Related Transactions." All directors serve until
the next annual meeting of the stockholders or until their respective successors
are duly elected and qualified.
During 1999, the Board of Directors held seven special meetings. The
standing committees of the Board of Directors currently consist of a
Compensation Committee, an Audit Committee and a Nominating Committee.
The Compensation Committee is responsible for the administration of, and
the determination of strategy and policy matters related to, the Amended and
Restated 1994 Stock Option Plan. The Compensation Committee also reviews the
future compensation of Jana A. Bell and other company executives, as necessary.
None of the Compensation Committee members is an officer or employee of @TRACK
Communications, Inc. and none holds options granted under @TRACK Communications,
Inc.'s Stock Option Plan. During 1999, the Compensation Committee, which was
composed of Gerry Quinn, former director Terry S. Parker and Stephen L. Greaves,
met three times. The Compensation Committee is currently composed of Gerry C.
Quinn, Stephen L. Greaves and John Stupka.
The Audit Committee, with management and @TRACK Communications, Inc.'s
independent accountants, determines the adequacy of internal controls and other
financial reporting matters. During 1999, the Audit Committee, which was
composed of former director William C. Kennedy, Jr., former director Terry S.
Parker and Gerry C. Quinn, met four times.
The Nominating Committee was formed pursuant to the Amended Stockholders'
Agreement which requires the Board of Directors to select a three-member
Nominating Committee composed of one "Erin Mills" director, one "By-Word"
director and one "Carlyle" director. The Nominating Committee also considers and
makes nominations for additional outside directors for election by the Board of
Directors. During 1999, the Nominating Committee was composed of Gerry C. Quinn
as the Erin Mills member, former director William C. Kennedy as the By-Word
member and former director Terry S. Parker in lieu of the Carlyle member, to
serve until such time, if any, as Carlyle selects a board member who is
appointed to the Nominating Committee. The Nominating Committee held one meeting
during 1999. See "Certain Relationships and Related Party Transactions." The
Nominating Committee will consider nominees recommended by our stockholders. Any
stockholder wishing to make a nomination should send a letter providing the
name, address, phone number and resume of the nominee to our offices, to the
attention of the Nominating Committee.
During 1999, each director attended at least 75% of the meetings of the
Board of Directors and of the meetings of committees on which he served.
INDEMNIFICATION
@TRACK Communications, Inc. indemnifies each person who is or was:
- a director, officer, employee or agent of @TRACK Communications, Inc.; or
- serving at @TRACK Communications, Inc.'s request as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise
against expenses, judgments, fines and amounts incurred in that capacity. @TRACK
Communications, Inc. will indemnify only for actions taken:
- in good faith in a manner the indemnified person reasonably believed to
be in or not opposed to the best interests of @TRACK Communications,
Inc.; or
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- with respect to criminal proceedings, not unlawful. @TRACK
Communications, Inc. will also advance to the indemnified person payments
incurred in defending a proceeding to which indemnification might apply
provided, the recipient agrees to repay all such advanced amounts if it
is ultimately determined that such person is not entitled to be
indemnified. The Bylaws specifically provide that the indemnification
rights granted thereunder are nonexclusive. In accordance with the Bylaws
and the Amended Stockholders' Agreement between @TRACK Communications,
Inc. and certain of its stockholders, @TRACK Communications, Inc. has
purchased insurance on behalf of its directors and officers in amounts it
believes to be reasonable.
COMPENSATION OF DIRECTORS
The Board of Directors has the authority to fix the compensation of
directors. The Bylaws and the Amended Stockholders' Agreement provide that
directors may be reimbursed for reasonable expenses for their services to @TRACK
Communications, Inc., and may be paid either a fixed sum for attendance at each
Board of Directors meeting or a stated annual director fee. @TRACK
Communications, Inc. currently reimburses its directors for travel expenses.
@TRACK Communications, Inc. provides John T. Stupka with an annual director's
fee of $25,000. @TRACK Communications, Inc. has granted John Stupka options to
purchase 3,798 shares of common stock at exercise prices of $2.50 per share.
These options were not granted pursuant to @TRACK Communications, Inc.'s Stock
Option Plan, and therefore, unlike options granted under the plan, such options
have not been registered under the Securities Act of 1933, as amended.
COMPENSATION OF CERTAIN EXECUTIVE OFFICERS
General
SUMMARY COMPENSATION TABLE
The following is a table describing compensation awarded, paid to or earned
by the Chief Executive Officer and the other four most highly compensated
executive officers (rounded to the nearest dollar), for each of the last three
fiscal years. Some of the persons named below are employed by @TRACK
Communications, Inc. pursuant to employment contracts. Those contracts are
described on page 10.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL -------------
COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
SALARY BONUS OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR (DOLLARS) (DOLLARS) SARS (SHARES) (DOLLARS)(1)
- --------------------------- ---- --------- --------- ------------- ------------
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Jana A. Bell............................ 1999 300,000 187,500 -- --
President and Chief Executive Officer
for 1998 159,753 80,000 500,000 --
@TRACK Communications, Inc. 1997 -- -- -- --
Kenneth Westerlage...................... 1999 128,881 13,477 -- 105,850
Former Senior Vice President 1998 127,008 5,000 -- --
for @TRACK Communications, Inc. 1997 122,333 350.00 -- --
Todd A. Felker.......................... 1999 150,000 82,087 71,000 --
Senior Vice President of Sales and 1998 79,038 50,000 30,000 --
Marketing for @TRACK 1997 -- -- -- --
Communications, Inc.
William H. McCausland................... 1999 150,000 65,777 51,000 --
Senior Vice President, Operations for 1998 147,396 45,000 20,000 --
@TRACK Communications, Inc. 1997 127,083 35,000 -- --
W. Michael Smith........................ 1999 150,000 33,000 1,000 --
Executive Vice President and Chief 1998 7,403 30,000 125,000 --
Financial Officer for @TRACK 1997 -- -- -- --
Communications, Inc.
</TABLE>
8
<PAGE> 11
- ---------------
(1) The components of All Other Compensation are:
- Mr. Westerlage received compensation as the result of his exercise of
66,974 stock options and sale of shares of common stock of the Company
acquired through his stock option exercise. Mr. Westerlage was also
paid severance upon his termination of employment with the Company.
Stock Options. @TRACK Communications, Inc. grants stock options to certain
of its executive officers and employees under the Stock Option Plan. During
1999, @TRACK granted options to purchase a total of 790,242 shares. As of
December 31, 1999, 1,946,590 stock options remained outstanding under the Stock
Option Plan and options to purchase 350,613 shares remained available for grant
thereunder. Also, options representing 3,798 shares were granted in 1998 to a
director and are not governed by a formal plan.
OPTION GRANTS IN LAST FISCAL YEAR
The following table describes the number of options granted to the Chief
Executive Officer and @TRACK Communications, Inc.'s other four most highly
compensated executive officers during the year ended December 31, 1999 and
certain other information relating to such options.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE
NUMBER TOTAL VALUE AT ASSUMED
OF OPTIONS ANNUAL RATES OF STOCK
SECURITIES GRANTED TO EXERCISE OR PRICE APPRECIATION
UNDERLYING EMPLOYEES BASE PRICE FOR OPTION TERM
OPTIONS IN FISCAL ($ PER EXPIRATION ---------------------
NAME GRANTED(1) YEAR SHARE) DATE 5% 10%
- ---- ---------- -------------- ------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Jana A. Bell................. -- -- -- -- -- --
Todd Felker.................. 70,000 8.85% $2.19 02/15/05 $205,437 $271,580
1,000 0.1% $1.47 09/03/05 $ 1,970 $ 2,604
William H. McCausland........ 50,000 6.3% $2.19 02/15/05 $146,740 $193,986
1,000 0.1% $1.47 09/03/05 $ 1,970 $ 2,604
W. Michael Smith............. 1,000 0.1% $1.47 09/03/05 $ 1,970 $ 2,604
Kenneth Westerlage........... -- -- -- -- -- --
</TABLE>
- ---------------
(1) The options granted vest 20% on the date of the grant and in 20% increments
on each of the first, second, third and fourth anniversaries of the date of
the grant. The option grants expire six years from the date of the grant.
In the event an optionee's position as an employee of @TRACK
Communications, Inc. terminates for any reason, unless otherwise provided in the
applicable stock option agreement or applicable employment agreement, the
optionee may exercise the options during the 60-day period following such
termination, to the extent that the option was exercisable on the date of
termination of the optionee's employment. All options that were not exercisable
on the date of termination are forfeited.
AGGREGATED OPTION EXERCISES AND YEAR END OPTION VALUES
The following table sets forth:
- the number of options exercised by the Chief Executive Officer and @TRACK
Communications, Inc.'s four additional most highly compensation executive
officers;
- the number of options held by them as of December 31, 1999; and
9
<PAGE> 12
- the value of unexercisable and exercisable options held by them as of
December 31, 1999, calculated as the closing price per share of the
common stock on the last day of the fiscal year, which was $2.25, less
the option exercise price, multiplied by the number of shares.
<TABLE>
<CAPTION>
OPTION EXERCISES
DURING 1999 NUMBER OF
---------------------- SECURITIES UNDERLYING VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jana A. Bell................... -- -- 166,667 333,333 $202,000 $394,036
Todd A. Felker................. -- -- 26,200 74,800 $ 13,716 $ 23,064
William H. McCausland.......... -- -- 42,200 58,800 $ 34,676 $ 22,104
W. Michael Smith............... -- -- 50,200 75,800 $ 34,656 $ 52,374
Kenneth Westerlage............. 66,974 74,100 -- -- -- --
</TABLE>
The Board of Directors and its Compensation Committee intend to further the
interests of @TRACK Communications, Inc.'s stockholders by tying a substantial
portion of executive compensation to the market value of our common stock.
Toward this end, we have designed our Stock Option Plan to support our ability
to attract and retain qualified management and other personnel necessary for our
success and progress.
COMPENSATION COMMITTEE
Stephen L. Greaves
Gerry C. Quinn
John Stupka
Savings Plan. @TRACK Communications, Inc. has a 401(k) Retirement
Investment Profit-Sharing Plan that covers all of its employees once they become
eligible to participate. Pursuant to the 401(k) Plan, employees may contribute
up to 20% of their pre-tax earnings. The maximum amount of contributions and
forfeitures by any employee each year is $10,000; the maximum amount permitted
under the Internal Revenue Code. @TRACK Communications, Inc. is not required to
make any contributions to the 401(k) Plan and did not make any contributions
during 1999.
EMPLOYMENT AGREEMENTS
@TRACK Communications, Inc. has entered into employment agreements with
Jana A. Bell, Todd A. Felker, Pierre H. Parent, W. Michael Smith, C. Marshall
Lamm and J. Raymond Bilbao; each a member of the Company's Senior Business Team.
The terms of these employment agreements generally provide that such officers
are eligible to receive stock options in @TRACK Communications, Inc. and to
participate in the incentive bonus plan for executive officers. In addition, the
agreements prohibit the officers from competing with @TRACK Communications, Inc.
during the term of their employment and for two years after their employment is
terminated. In the event of termination without "cause", the employment
agreements provide for severance payments equal to the remaining amount of
salary payable under the contract and for continued vesting of all stock options
that were granted during employment and that had not expired at the time of the
termination.
If the officer is terminated within the six months prior to or within two
years following a Change in Control, other than for cause or death, the
employment agreements provide for payment of severance payments equal to the sum
of: (a) the highest annual salary paid to the officer during the prior two
years; and (b) the highest annual discretionary bonus paid to the officer during
the prior two years. The employment agreements also provide for a gross-up
payment equal to the amount of excise tax assessed on the lump severance
payments. Additionally upon a Change in Control, all stock options granted to
the officer immediately vest.
The employment agreements further provide the same severance benefits which
would be received upon a Change in Control if the officer terminates the
employment agreement because of: (a) the reduction of the
10
<PAGE> 13
officer's job title, position or responsibilities without the Employee's prior
written consent; (b) the change of the location where the officer is based to a
location which is more than fifty (50) miles from his present location without
the officer's prior written consent; or (c) the reduction of the officer's
annual salary and bonus by more than 10% from the sum of the higher rate of the
officer's actual annual salary and bonus in effect within two years immediately
preceding the change of control.
For purposes of the employment agreements, a Change in Control is defined
as: (a) the subsequent acquisition by any person or group of 35% or more of the
Company's voting securities; (b) during any two year period, the members of the
Board at the beginning of the period cease to constitute a majority of the Board
unless the election or nomination of new directors by the stockholders was
approved by 2/3 of directors still in office who were either directors at the
beginning of the period or whose election or nomination for election was
previously so approved; (c) a merger of the Company other than: (i) a merger in
which the current shareholders of the Company maintain more than 80% of the
voting control in the surviving entity; or (ii) a merger effected as part of a
recapitalization of the Company in which no person acquires more than 30% of the
voting securities then outstanding; and/or (d) the approval by the stockholders
of the complete liquidation of the Company or the sale of substantially all of
the assets of the Company.
The following paragraphs present the additional details of the employment
agreements with each of Ms. Bell and Messrs. Felker, Parent, Smith, Lamm and
Bilbao.
Jana A. Bell. The agreement with Ms. Bell provides for Ms. Bell's
employment as President and Chief Executive Officer of @TRACK Communications,
Inc. through December 31, 2000. Under the terms of the agreement, Ms. Bell is
paid an annual salary of $300,000 and is eligible for an annual discretionary
bonus of 50% of her base salary pursuant to the incentive bonus plan of
executive officers. For more information regarding the incentive bonus plan,
please refer to page 19 .
Todd A. Felker. The agreement with Mr. Felker provides for Mr. Felker's
employment as Senior Vice President, Sales, Marketing and Account Management of
@TRACK Communications, Inc. through December 31, 2000. Under the terms of the
agreement, Mr. Felker is paid an annual salary of $165,000 and is eligible for
an annual discretionary bonus of 30% of his base salary pursuant to the
incentive bonus plan of executive officers. For more information regarding the
incentive bonus plan, please refer to page 19.
Pierre H. Parent. The agreement with Mr. Parent provides for Mr. Parent's
employment as Senior Vice President and Chief Technical Officer of @TRACK
Communications, Inc. through December 31, 2000. Under the terms of the
agreement, Mr. Parent is paid an annual salary of $157,500 and is eligible for
an annual discretionary bonus of 30% of his base salary pursuant to the
incentive bonus plan of executive officers. For more information regarding the
incentive bonus plan, please refer to page 19.
W. Michael Smith. The agreement with Mr. Smith provides for Mr. Smith's
employment as Executive Vice President, Chief Financial Officer and Treasurer of
@TRACK Communications, Inc. through December 31, 2000. Under the terms of the
agreement, Mr. Smith is paid an annual salary of $162,000 and is eligible for an
annual discretionary bonus of 30% of his base salary pursuant to the incentive
bonus plan of executive officers. For more information regarding the incentive
bonus plan, please refer to page 19.
C. Marshall Lamm. The agreement with Mr. Lamm provides for Mr. Lamm's
employment as Senior Vice President, Operations of @TRACK Communications, Inc.
through December 31, 2000. Under the terms of the agreement, Mr. Lamm is paid an
annual salary of $145,000 and is eligible for an annual discretionary bonus of
30% of his base salary pursuant to the incentive bonus plan of executive
officers. For more information regarding the incentive bonus plan, please refer
to page 19.
J. Raymond Bilbao. The agreement with Mr. Bilbao provides for Mr. Bilbao's
employment as General Counsel and Secretary of @TRACK Communications, Inc.
through December 31, 2000. Under the terms of the agreement, Mr. Bilbao is paid
an annual salary of $130,000 and is eligible for an annual discretionary bonus
of 30% of his base salary pursuant to the incentive bonus plan of executive
officers. For more information regarding the incentive bonus plan, please refer
to page 19.
11
<PAGE> 14
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Jana A. Bell, the President and Chief Executive Officer of @TRACK
Communications, Inc. and members of the Compensation Committee of the Board of
Directors annually review and adjust the salary structures of executive officers
who are not subject to employment agreements. Such decisions are subject to
review by the Board of Directors. The Board of Directors annually reviews Ms.
Bell's compensation package.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
AMENDED STOCKHOLDERS' AGREEMENT
General. @TRACK Communications, Inc. and certain of its stockholders
entered into a Stockholders' Agreement, dated as of February 4, 1994. In
connection with transactions with affiliates of SBC Communications, Inc.
consummated on September 27, 1996 and described below, the parties to the
Stockholders' Agreement amended and restated the agreement in order to add
Southwestern Bell Wireless Holdings, Inc., an affiliate of SBC, as a party
thereto and to revise certain related provisions of the agreement. The Amended
Stockholders' Agreement contains provisions relating to, among other things:
- the transfer of shares of common stock by the stockholders who are
parties thereto;
- the grant of registration rights by @TRACK Communications, Inc. to the
stockholders who are parties thereto; and
- the election of members of @TRACK Communications, Inc.'s Board of
Directors.
As used in the following summary of the Amended Stockholders' Agreement,
the following terms have the following definitions:
- "Erin Mills Stockholders" means Erin Mills International Investment
Corporation and The Erin Mills Investment Corporation;
- "Carlyle Stockholders" means Carlyle-HighwayMaster Investors, L.P.,
Carlyle-HighwayMaster Investors II, L.P., TC Group, L.L.C., and Mark D.
Ein; and
- "By-Word Stockholders" means William C. Kennedy, Jr., Donald M. Kennedy,
William C. Saunders, Robert T. Hayes and Robert Folsom.
- "SBC" means SBC Communications, Inc. and its subsidiaries including
Southwestern Bell Wireless Holdings, Inc. now known as SBC Wireless, Inc.
Right of First Refusal. Under the terms of the Amended Stockholders'
Agreement, the Erin Mills Stockholders, the Carlyle Stockholders, William C.
Kennedy, Jr. and William C. Saunders (the "First Refusal Stockholders") granted
a right of first refusal to SBC with respect to all shares of common stock owned
by them. Subject to certain exceptions, the right of first refusal requires
that, prior to selling any shares of common stock, a First Refusal Stockholder
must offer such shares for sale to SBC in accordance with the terms of the
Amended Stockholders' Agreement. In addition, any transferee who receives common
stock from a First Refusal Stockholder must execute an agreement making them
subject to the right of first refusal provisions of the Amended Stockholders'
Agreement.
Registration Rights. The Amended Stockholders' Agreement provides the Erin
Mills Stockholders, the Carlyle Stockholders, the By-Word Stockholders and SBC
with certain piggyback registration rights. Accordingly, if at any time @TRACK
Communications, Inc. proposes to register any shares of its common stock (or
securities convertible into or exchangeable for, or options, warrants or other
rights to acquire common stock) under the Securities Act of 1933 (other than
registrations on Form S-4 or Form S-8), such stockholders have the right to
include shares of common stock held by them in any such registration. However,
if the inclusion of shares of Common Stock pursuant to the piggyback
registration provisions is
12
<PAGE> 15
reasonably determined by the managing underwriter or underwriters to materially
adversely affect the success of the proposed offering, @TRACK Communications,
Inc. may exclude certain shares from the offering.
The Amended Stockholders' Agreement also provides certain parties with
demand or other registration rights. In particular, the agreement provides that
@TRACK Communications, Inc. will register one-half of the 1,818,018 shares of
common stock issued to the Erin Mills Stockholders and certain of the Carlyle
Stockholders on or after March 31, 1997 and the remaining shares on or after
September 27, 1997. The Erin Mills Stockholders and the Carlyle Stockholders
waived their rights to cause @TRACK Communications, Inc. to register shares,
although they reserved the right to revoke such waiver at any time. The Carlyle
Stockholders registered their shares pursuant to the registration described
below under the heading "Registration Statement on Form S-3."
In addition, under the Amended Stockholders' Agreement, in certain
instances, some of the stockholders who are parties to the agreement have the
right to demand that @TRACK Communications, Inc. register the shares of common
stock held by them on up to two separate occasions. However, if the Board of
Directors of @TRACK Communications, Inc. reasonably determines that, due to a
pending or contemplated acquisition or disposition, a demand registration would
have a material adverse effect on @TRACK Communications, Inc., @TRACK
Communications, Inc. may defer such registration for a period of no more than
180 days. In addition, @TRACK Communications, Inc. may exclude certain shares
from any public offering if a managing underwriter or underwriters engaged in
connection with such demand registration, or the holders of a majority of the
registerable securities that are subject to the demand registration, determine
that the number of shares of common stock proposed to be sold pursuant to the
demand registration provisions exceeds the amount that can be sold without
causing a material adverse effect to @TRACK Communications, Inc.
Election of Directors. The Amended Stockholders' Agreement provides that
the parties will take all action necessary to ensure that the Board of Directors
of @TRACK Communications, Inc. consists of:
- two directors designated by the Erin Mills Stockholders;
- one director designated by the Carlyle Stockholders;
- two directors designated by the By-Word Stockholders;
- two independent directors; and
- upon the occurrence of certain events discussed below, one director
designated by SBC.
The Erin Mills Stockholders have designated Gerry C. Quinn and Stephen L.
Greaves to serve as directors. The Carlyle Stockholders have irrevocably waived
their right to designate a director. The By-Word Stockholders have not
designated a board member to replace former director William C. Kennedy, Jr.
John T. Stupka serves as an independent director.
Under certain antitrust provisions of the Communications Act of 1934, as
amended by the Telecommunications Act of 1996, as amended and current Federal
Communications Commission regulations, SBC is restricted in its ability to
either provide interexchange services or invest in certain businesses which
provide interexchange services such as @TRACK Communications, Inc. As a result
of these provisions, SBC currently is not permitted to designate a person to
serve on @TRACK Communications, Inc.'s Board of Directors; however, SBC is
permitted to designate a non-voting delegate to the Board of Directors to attend
all meetings and receive all materials distributed to directors of @TRACK
Communications, Inc.
SBC has applied to the FCC for approval to provide interexchange services.
If such regulatory relief is granted, the Series D Preferred Stock that is owned
by SBC will be converted into Class B Common Stock, the number of directors will
be increased by one, and SBC will be entitled to designate one member of @TRACK
Communications, Inc.'s Board of Directors. In addition, if at any time after the
conversion of Series D Preferred Stock into Class B Common Stock, SBC and its
affiliates beneficially own 20% or more of the outstanding common stock on a
fully-diluted basis (including in such calculation securities owned by SBC that
are convertible into common stock), the number of directors again will be
increased by one, and SBC will be entitled to designate a second member of the
Board of Directors.
13
<PAGE> 16
In general, no stockholder or group of stockholders will be entitled to
designate any director if the percentage of the outstanding common stock
beneficially owned by such stockholder or group of stockholders falls below 5%.
Each of the Erin Mills Stockholders and the By-Word Stockholders must own at
least 20% of the outstanding common stock for the right to designate two
directors or at least 5% for the right to designate one director. In calculating
share ownership for purposes of this minimum ownership requirement, the
agreement provides that certain shares issuable upon conversion of convertible
securities or upon the exercise of outstanding options, warrants or rights will
be included as owned.
SBC TRANSACTIONS
Sale of Series D Preferred Stock and Warrants. On September 27, 1996,
@TRACK Communications, Inc. and SBC entered into a purchase agreement, pursuant
to which @TRACK Communications, Inc. sold 1,000 shares of a new series of its
preferred stock, designated as Series D Participating Convertible Preferred
Stock, to SBC for $20.0 million. The Series D Stock is convertible into shares
of Class B common stock, a new class of stock created by an amendment to @TRACK
Communications, Inc.'s Certificate of Incorporation in January 1997.
On September 27, 1996, in connection with the sale of Series D Stock to
SBC, @TRACK Communications, Inc. issued warrants to SBC, pursuant to which SBC
is entitled to purchase from @TRACK Communications, Inc. 3,000,000 shares of
common stock at an exercise price of $14.00 per share and 2,000,000 shares of
common stock at an exercise price of $18.00 per share, in each case subject to
adjustment to prevent dilution.
Other Agreements. On September 27, 1996, @TRACK Communications, Inc.
entered into a Technical Services Agreement with SBC. Under this agreement, SBC
or one or more of its affiliates will provide @TRACK Communications, Inc. with
certain technical and advisory services in connection with, among other things,
the operation and improvement of its communications transmission system. In
addition, under the terms of the SBC Purchase Agreement, if SBC obtains
regulatory relief, @TRACK Communications, Inc. promptly thereafter will be
required to cause @TRACK Communications, Inc. to enter into a Voice and Data
Services Agreement with an affiliate of SBC. The voice and data services
agreement, if entered into by the parties, will provide that @TRACK
Communications, Inc. will purchase long distance and other voice and data
services from this SBC affiliate.
In August 1998, @TRACK Communications, Inc. entered into an agreement with
member companies of SBC whereby such member companies purchased 11,500 mobile
units, customized proprietary software and accompanying services from @TRACK
Communications, Inc. for an initial term of one year. In the first quarter of
1999, @TRACK Communications, Inc. entered into a second agreement with these SBC
companies that extended the initial one-year term to three years. Subsequently,
the SBC companies ordered an additional 3,140 mobile units. In January of 2000,
SBC notified the Company that it had chosen the Company to provide an additional
28,000 mobile units. In the aggregate, these agreements represent the largest
purchase and service contract that @TRACK Communications, Inc. has entered into
to date.
In March 1999, @TRACK Communications, Inc. entered into an agreement with
Southwestern Bell Mobile Systems, Inc. Under this agreement, Southwestern Bell
Mobile Systems, Inc. will provide certain administrative and billing services
and cellular service in SBC cellular markets to @TRACK Communications, Inc. in
connection with @TRACK Communications, Inc.'s provision of enhanced services to
its end users.
REGISTRATION STATEMENT ON FORM S-3
On September 18, 1998, @TRACK Communications, Inc. completed a registration
of certain warrants and warrant shares under the Securities Act of 1933, as
amended, when the Securities and Exchange Commission declared its registration
statement on Form S-3 to be effective. @TRACK Communications, Inc. was required
to register these warrants and warrant shares under a warrant registration
rights agreement it entered into as part of a debt offering completed in 1997.
Under the terms of the warrant registration rights agreement, @TRACK
Communications, Inc. is required to use its best efforts to keep the
14
<PAGE> 17
registration statement continuously effective until either the warrants expire
or they all have been exercised, whichever occurs first. However, during any
consecutive 365-day period, @TRACK Communications, Inc. may temporarily halt the
effectiveness of the registration statement on up to two occasions for no more
than 45 consecutive days if certain conditions are met. The temporary halt must
be in connection with a proposed acquisition, business combination or other
development affecting @TRACK Communications, Inc., and the Board of Directors
must determine that disclosure of the proposed development would not be in the
best interests of @TRACK Communications, Inc. @TRACK Communications, Inc. will
not receive any income from the sale of the warrants by the selling warrant
holders. However, if or when any warrants are exercised, @TRACK Communications,
Inc. will receive the exercise price for the warrant shares. During 1999, no
warrant shares were exercised.
@TRACK Communications, Inc. provided all eligible parties under the Amended
Stockholders' Agreement notice of their opportunity to piggyback the
registration of their @TRACK Communications, Inc. common stock in connection
with the Registration Statement on Form S-3. The Carlyle Stockholders were the
only eligible parties who exercised such piggyback rights, and the Carlyle
Shareholders are offering all 2,723,468 shares beneficially owned by them to the
public under the Registration Statement. During 1999, the Carlyle Stockholders
did not sell any common stock pursuant to the offering.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 31, 2000,
regarding beneficial ownership of the common stock and the percentage of total
voting power held by:
- each stockholder who is known by @TRACK Communications, Inc. to own more
than five percent (5%) of the outstanding common stock;
- each director;
- each executive officer; and
- all directors and executive officers as a group.
Unless otherwise noted, the persons named below have sole voting and investment
power with respect to such shares. The beneficial ownership information is based
on the most recent Schedule 13D or 13G filed with the Securities and Exchange
Commission by the named stockholders. The numbers in the column titled "Number
of Shares of Common Stock Beneficially Owned" do not include any shares
underlying stock options that are exercisable within 60 days of March 31, 2000,
as such shares are addressed separately under the heading "Options Exercisable
Within 60 Days."
<TABLE>
<CAPTION>
NUMBER OF SHARES OPTIONS PERCENT OF
OF COMMON STOCK EXERCISABLE CLASS
BENEFICIALLY WITHIN BENEFICIALLY
NAME OF HOLDER OWNED 60 DAYS OWNED
- -------------- ---------------- ----------- ------------
<S> <C> <C> <C>
Erin Mills Stockholders(1)............... 9,088,326 -- 35%
7501 Keele Street
Suite 500
Concord, Ontario L4K1YZ, Canada
Southwestern Bell Wireless Holdings,
Inc.(2)................................ 6,600,000 -- 26%
17330 Preston Road
Suite 100A
Dallas, Texas 75252
Carlyle Stockholders(3).................. 2,723,468 -- 11%
1001 Pennsylvania Avenue, N.W.
Suite 220 South
Washington, D.C. 20004-2505
Jana A. Bell............................. 45,833 124,167 *
</TABLE>
15
<PAGE> 18
<TABLE>
<CAPTION>
NUMBER OF SHARES OPTIONS PERCENT OF
OF COMMON STOCK EXERCISABLE CLASS
BENEFICIALLY WITHIN BENEFICIALLY
NAME OF HOLDER OWNED 60 DAYS OWNED
- -------------- ---------------- ----------- ------------
<S> <C> <C> <C>
William C. Kennedy, Jr. ................. 1,979,318 -- 8%
Stephen L. Greaves(4).................... -- -- --
Gerry C. Quinn(4)........................ 272,650 -- 1%
John T. Stupka........................... -- 3,798 *
David H. Bagley.......................... -- 2,501 *
J. Raymond Bilbao........................ -- 6,800 *
Todd A. Felker........................... -- 40,200 *
Robert J. Lambert, Jr. .................. -- 5,300 *
Robert W. LaMere......................... 2,010 24,200 *
C. Marshall Lamm......................... 5,000 15,000 *
Louis W. McAnally........................ -- 10,001 *
Pierre H. Parent......................... -- 20,200 *
W. Michael Smith......................... -- 50,200 *
Stephen P. Tacke......................... -- 0 *
Ken D. Vandagriff........................ -- 8,000 *
Jonathan L. Wiener....................... -- 5,600 *
All directors and executive officers as a
group (16 persons)..................... 325,493 315,967 1%
</TABLE>
- ---------------
* Less than 1%
(1) This includes 9,061,310 shares of common stock owned of record by Erin Mills
International Investment Corporation and 27,016 shares owned of record by
The Erin Mills Investment Corporation. Pursuant to an agreement with the
Erin Mills Stockholders, Mr. Quinn has a right to acquire up to 272,650 of
the shares of @TRACK Communications, Inc. held by the Erin Mills
Stockholders.
(2) This includes 1,600,000 shares of common stock issuable to Southwestern Bell
Wireless Holdings, Inc. upon the conversion of shares of 1,000 shares of
convertible Series D Preferred Stock and 5,000,000 shares of common stock
issuable to SBW upon the exercise of warrants.
(3) This includes:
- 2,222,799 shares owned of record by Carlyle-HighwayMaster
Investors, L.P.;
- 209,354 shares owned of record by Carlyle-HighwayMaster Investors
II, L.P.; and
- 291,315 shares of record owned by TC Group, L.L.C.
All of these entities are deemed to have beneficial ownership of the shares
owned of record by each such other entity.
(4) Messrs. Quinn and Greaves are affiliated with the Erin Mills Stockholders,
and they both disclaim beneficial ownership of the shares owned by the Erin
Mills Stockholders. However, pursuant to an agreement with the Erin Mills
Stockholders, Mr. Quinn has a right to acquire up to 272,650 of the shares
of @TRACK Communications, Inc. held by such stockholders. As a result, only
272,650 of the Erin Mills Stockholders' shares are included in the table for
Mr. Quinn, and none of the Erin Mills Stockholders' shares are included in
the table for Mr. Greaves.
Under the Amended Stockholders' Agreement, certain of @TRACK
Communications, Inc.'s stockholders have agreed to vote the shares of common
stock held by them with respect to certain matters as specified therein, and
accordingly, they may be deemed to beneficially own all the shares of common
stock subject to the Amended Stockholders' Agreement. As of March 31, 2000,
14,917,672 shares of common stock,
16
<PAGE> 19
representing 59% of the outstanding shares of common stock at March 31, 2000,
were subject to the Amended Stockholders' Agreement. All of the parties to the
Amended Stockholders' Agreement who have filed Schedule 13Ds or Schedule 13Gs
with the Securities and Exchange Commission have disclaimed beneficial ownership
to any shares of common stock held by any other party to the Amended
Stockholders' Agreement as a result of such agreement. As a result, the share
ownership information in the table above does not include all of the shares
subject to the Amended Stockholders' Agreement for each stockholder party
thereto. For additional information regarding the Amended Stockholders'
Agreement, please refer to page 12.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Exchange Act requires @TRACK Communications, Inc.'s
directors and executive officers, and persons who own more than 10% of a
registered class of @TRACK Communications, Inc.'s equity securities to file with
the Commission initial statements of beneficial ownership of securities and
subsequent changes in beneficial ownership of @TRACK Communications, Inc.
Officers, directors and greater-than-10% stockholders are required by the
Commission's regulations to furnish @TRACK Communications, Inc. with copies of
all Section 16(a) forms they file.
To @TRACK Communications, Inc.'s knowledge, based solely on a review of the
copies of such reports furnished to @TRACK Communications, Inc. and written
representations that no other reports were required, during the fiscal year
ended December 31, 1999, its officers, directors and greater-than-10% beneficial
owners timely complied with all section 16(a) filing requirements applicable to
them. However, one officer failed to file his Form 3 within 10 days of his
appointment as an officer instead filing the Form 3 within 10 days of the end of
the month in which he was appointed as an officer.
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REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Our Compensation Committee has prepared its report on 1999 executive
compensation as required by rules of the Commission. This report provides
specific information regarding compensation of @TRACK Communications, Inc.'s
President and Chief Executive Officer and its executive officers as a group.
COMPENSATION POLICIES
@TRACK Communications, Inc. structures compensation of its executives in a
manner that is intended to be competitive in the marketplace and to link
compensation to the long-term business objectives of @TRACK Communications, Inc.
and the enhancement of stockholder value. @TRACK Communications, Inc. has
retained certain executives pursuant to long-term employment contracts which
govern their compensation and others are evaluated on an ongoing basis. See
"Directors and Executive Officers -- Employment Agreements." In determining an
executive's total compensation package, the Compensation Committee considers
several factors, including improvements in overall corporate or business unit
performance; increases in installed customer base; development efforts that
result in greater efficiency or competitive advantages to @TRACK Communications,
Inc.; and the level of responsibility, prior experience, satisfaction of
individual performance goals and comparable industry compensation levels for an
equivalent position.
Decisions concerning compensation of executive officers with employment
contracts have been made by the Compensation Committee with the approval of the
Board of Directors. Those executives whose salaries are not established by
employment contract are set by the Chief Executive Officer or the Chief
Financial Officer and are subject to review by the Compensation Committee and
the Board of Directors. The Board of Directors has delegated to the Compensation
Committee, which currently consists of Gerry C. Quinn, John Stupka and Stephen
L. Greaves, the task of discussing strategy and policy matters related to the
Stock Option Plan, although it also reviews other forms of compensation from
time to time. None of the members of the Compensation Committee is an officer or
employee of @TRACK Communications, Inc. or holds options granted under the Stock
Option Plan.
COMPENSATION OBJECTIVES
@TRACK Communications, Inc. compensates its executives in a manner that is
intended to:
- be competitive in the marketplace;
- link compensation to long-term business objectives; and
- link compensation to the enhancement of stockholder value.
Certain executives have been retained pursuant to long-term employment contracts
which govern their compensation and others are evaluated on an ongoing basis.
@TRACK Communications, Inc. considers both objective and subjective criteria in
determining an executive's compensation package. These factors include:
- improvements in overall corporate performance;
- improvements in business unit performance;
- increases in installed customer base;
- development efforts that result in greater efficiency or competitive
advantage;
- level of responsibility;
- prior experience;
- satisfaction of individual performance goals; and
- comparable industry compensation for an equivalent position.
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<PAGE> 21
COMPONENTS OF COMPENSATION
@TRACK Communications, Inc. offers compensation to executive officers that
includes base salary, short-term cash incentive compensation in the form of a
bonus, if appropriate, and long-term incentive compensation in the form of stock
option grants. These elements are addressed separately.
Base Salaries. Those executives whose salary structures are not established
by employment agreements are subject to annual adjustment by the Chief Executive
Officer or the Chief Financial Officer. These adjustments and are subject to
review by the Compensation Committee and the Board of Directors, based on the
compensation policies described above. The Compensation Committee and the Board
of Directors may also consider such other factors in executive salary decisions
as market competition, inflation and other equity considerations. Salary
increases reflect job changes, promotions, market adjustment reviews and
ordinary increases. Executive salary increases in 1999 ranged from 0% to 30%.
1999 Short-term Incentives -- Cash Bonuses and Commissions. In 1999 and
preceding years, @TRACK Communications, Inc.'s policy was to award cash bonuses
based on @TRACK Communications, Inc.'s performance on a company-wide or a
case-by-case basis. Under this policy and under the terms of the then-existing
employment arrangements, the Board of Directors envisioned that bonuses for the
executive officers would be tied to our profitability and would be
discretionary. As reflected in the Summary Compensation Table on page 8 of this
proxy statement, in 1999, Ms. Bell and Messrs. Felker, McCausland, Smith and
Westerlage received bonuses. See "Directors and Executive Officers -- Employment
Contracts" and "Compensation of Certain Executive Officers -- Summary
Compensation Table."
1999 Short-term Incentives -- Cash Bonuses and Commissions. @TRACK
Communications, Inc. has implemented an incentive bonus plan for the members of
the senior business team who report directly to the Chief Executive Officer.
Under the incentive bonus plan in 1999, @TRACK Communications, Inc. may pay each
such person a bonus of up to 30% of his or her base salary if he or she achieves
certain defined goals and objectives. Half of the available bonus is tied
directly to the financial performance of @TRACK Communications, Inc., and the
remaining half is tied to defined organizational goals by the individual's
functional area of responsibility. @TRACK Communications, Inc.'s Chief Executive
Officer, subject to the review and approval of the Compensation Committee of the
Board of Directors, determines whether any executive achieved his or her goals
and is entitled to receive the bonus. The Compensation Committee of the Board of
Directors, subject to the review and approval of the Board of Directors,
determines whether Ms. Bell achieved her goals and is entitled to receive her
bonus.
Long-term Incentives -- Stock Option Grants. The Compensation Committee
selects certain executive officers of @TRACK Communications, Inc. to receive
stock options to purchase shares of common stock, which include both incentive
stock options and nonqualified stock options pursuant to the terms of the Stock
Option Plan. In the case of the Chief Executive Officer or the Chief Financial
Officer, the Board of Directors makes this selection. The Compensation Committee
administers the Stock Option Plan, determines those officers or other employees
to whom options will be granted and prescribes the terms and conditions of such
options, which need not be identical even for similarly situated employees.
The Board of Directors and its Compensation Committee intend to further the
interests of @TRACK Communications, Inc.'s stockholders by tying a substantial
portion of executive compensation to the market value of our common stock.
@TRACK Communications, Inc. granted new options representing a total of 455,508
shares to executive officers during 1999.
POLICY WITH RESPECT TO THE $1 MILLION DEDUCTION LIMIT
Section 162(m) of the Internal Revenue Code of 1986, as amended generally
limits the U.S. corporate income tax deduction for compensation paid to each
executive officer named in the summary compensation table in the proxy statement
of a public company to $1 million for each year, unless certain requirements are
met. For fiscal 1999, the limitation imposed by Section 162(m) did not apply to
the compensation paid to any executive officers. Therefore, the Board of
Directors has taken no action in response to Section 162(m). The Board of
Directors will consider actions to qualify compensation for deduction should it
appear that the limits
19
<PAGE> 22
of 162(m) will be exceeded, but will retain the discretion to pay non-deductible
compensation if that would be in the best interests of @TRACK Communications,
Inc. and their stockholders under the circumstances.
SUMMARY
The Compensation Committee believes that @TRACK Communications, Inc.'s
executive compensation policies and actions provide @TRACK Communications,
Inc.'s executive officers with the appropriate incentives to achieve @TRACK
Communications, Inc.'s short and long-term goals and to enhance stockholder
value.
COMPENSATION COMMITTEE
Stephen L. Greaves
Gerry C. Quinn
John Stupka
20
<PAGE> 23
PERFORMANCE GRAPH
The following graph compares total stockholder returns of @TRACK
Communications, Inc. since its initial public offering of common stock on June
22, 1995 to two indices:
- the NASDAQ CRSP Total Return Index for the NASDAQ Stock Market, U.S.
companies (the "NASDAQ-US Index"), and
- the NASDAQ CRSP Total Return Index for Telecommunications Stocks (the
"NASDAQ-Industry Index").
The total return for @TRACK Communications, Inc.'s stock and for each index
assumes $100 invested on June 22, 1995 in @TRACK Communications, Inc.'s common
stock, the NASDAQ-US Index and the NASDAQ-Industry Index, including the
reinvestment of dividends, although cash dividends have never been declared on
@TRACK Communications, Inc.'s stock. @TRACK Communications, Inc.'s common stock
is traded on the NASDAQ SmallCap Market and is a component of both the NASDAQ-US
Index and the NASDAQ-Industry Index.
COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT SINCE @TRACK COMMUNICATIONS,
INC.'S
INITIAL PUBLIC OFFERING ON JUNE 22, 1995
[GRAPH]
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
6/22/95 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ATRK 100 52.53 91.77 28.80 5.70 11.39
Nasdaq Telecomm Index 100 114.86 117.45 173.92 284.02 502.24
Nasdaq US Index 100 112.57 138.43 169.83 238.73 442.99
</TABLE>
The closing price of the common stock on the last trading day of the 1999 fiscal
year was $2.25 per share. Historical stock price performance is not necessarily
indicative of future price performance.
THE MATERIAL IN THE REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION AND THE PERFORMANCE GRAPH IS NOT "SOLICITING MATERIAL," IS NOT
DEEMED FILED WITH THE COMMISSION AND IS NOT TO BE INCORPORATED BY REFERENCE INTO
ANY FILING OF @TRACK COMMUNICATIONS, INC. UNDER THE SECURITIES ACT OR THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, WHETHER MADE BEFORE OR AFTER THE
DATE HEREOF AND IRRESPECTIVE OF ANY GENERAL INCORPORATION LANGUAGE IN ANY
FILING.
21
<PAGE> 24
CHANGE IN COMPANY'S CERTIFYING ACCOUNTANT
The Company dismissed its independent auditors, PricewaterhouseCoopers LLP,
effective as October 13, 1999. The Audit Committee of the Company's Board of
Directors recommended this action to the Company's Board of Directors who
subsequently approved this action. The reports of PricewaterhouseCoopers LLP on
the Company's financial statements for the fiscal years ended December 31, 1998
(the "1998 fiscal year") and December 31, 1997 (the "1997 fiscal year") did not
contain any adverse opinion or a disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles. During the
1997 fiscal year, the 1998 fiscal year and the period since the end of the 1998
fiscal year, there were no disagreements between the Company and
PricewaterhouseCoopers LLP on any matter of accounting principles or practices,
financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of PricewaterhouseCoopers
LLP, would have caused it to make a reference to the subject matter of the
disagreements in connection with its reports. In addition, during the 1997
fiscal year, the 1998 fiscal year and the period since the end of the 1998
fiscal year, there were no "reportable events" within the meaning of Item
304(a)(1)(v) of Regulation S-K under the Securities Act of 1933, as amended. The
Company reported the change in its Certifying Accountants in a Form 8-K filed
with the Commission on October 20, 1999. The Company requested that
PricewaterhouseCoopers LLP furnish it a letter addressed to the SEC stating
whether or not it agrees with the above statements and a copy of such letter,
dated October 20, 1999, was filed as Exhibit 16 to the Company's October 20,
1999 Form 8-K.
The Company engaged Arthur Andersen LLP as its new independent accountants
as of October 13, 1999. During the 1997 fiscal year, the 1998 fiscal year and
the period since the end of the 1998 fiscal year, the Company has not consulted
with Arthur Andersen LLP regarding either (i) the application of accounting
principles to a specified transaction, either completed or proposed; or the type
of audit opinion that might be rendered on the Company's financial statements,
and neither a written report was provided to the Company nor was oral advice
provided that Arthur Andersen LLP concluded was an important factor considered
by the Company in reaching a decision as to any accounting, auditing or
financial reporting issue; or (ii) any matter that was either the subject of a
disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions to Item 304 of Regulation S-K, or a reportable
event, as that term is defined in Item 304(a)(1)(v) of Regulation S-K.
ANNUAL REPORT ON FORM 10-K
We will furnish a copy of our Annual Report on Form 10-K for 1999, as filed
with the Commission, without exhibits, without charge to any person requesting a
copy thereof in writing and stating that such person is a beneficial holder of
shares of our common stock on the Record Date for the Annual Meeting. If you are
a beneficial owner of shares and would like to request a copy of our Annual
Report, please send a written requests to Investor Relations, 1155 Kas Drive,
Suite 100, Richardson, Texas 75081. A copy of the 1999 Annual Report to
Shareholders may be viewed on the Company's website at www.at-track.com.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
/s/ J. RAYMOND BILBAO
J. RAYMOND BILBAO
Secretary
April 26, 2000
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<PAGE> 25
EXHIBIT A
AMENDMENT NUMBER ONE
@TRACK COMMUNICATIONS, INC.
AMENDED AND RESTATED
1994 STOCK OPTION PLAN
WHEREAS, @TRACK Communications, Inc. (formerly HighwayMaster
Communications, Inc.) (the "Company") has heretofore adopted the HighwayMaster
Communications, Inc. Amended and Restated 1994 Stock Option Plan (the "Plan");
and
WHEREAS, the Company desires to amend the Plan to permit the Company to
issue grants of stock options to non-employee directors; and
WHEREAS, the Company desires to further amend the Plan to reflect the
change in the Company's name to @TRACK Communications, Inc.
NOW, THEREFORE, BE IT RESOLVED that the Company does hereby amend the Plan
as follows:
1. Each reference to "HighwayMaster Communications, Inc." shall be
revised to be and to read "@TRACK Communications, Inc."
2. Section 2.1 of the Plan is hereby amended by revising Section
2.1(j) to the end thereof, to be and read as follows:
"(j) "Optionee" means an Employee or Non-employee Director to whom
an Option has been granted under the Plan."
3. Section 2.1 of the Plan is hereby further amended by adding the
following new Section 2.1(o) to the end thereof, to be and read as follows:
"(o) "Non-employee Director" means a member of the Board of
Directors who is not an Employee as defined in Section 2.1(f) above."
4. Section 4.1 of the Plan is hereby revised to be and read as
follows:
"Options under the Plan may be granted to any Employee of the Company or
any Subsidiary or any Non-employee Director. The Committee shall
determine those Employees to whom Options shall be granted and, subject
to Section 3.2 hereof, the number of shares of Common Stock subject to
each such Option. The Board shall determine those Non-employee Directors
to whom Options shall be granted and, subject to Section 3.2 hereof, the
number of shares of Common Stock subject to each such Option."
5. Section 5.1 of the Plan is hereby amended by revising the first
sentence thereof to be and read as follows:
"The Committee may from time to time in its discretion grant Options to
Employees. The Board may from time to time in its discretion grant
Options to Non-employee Directors; provided, however, that the Board
shall not grant Incentive Stock Options to a Non-employee Director."
6. Section 6.1 of the Plan is hereby amended by revising the first
sentence thereof to be and read as follows:
"Except as provided in Section 6.2, if an Optionee's position as an
Employee of a Company or a Subsidiary, or as a member of the Board of
Directors, as applicable, terminates for any reason other than death,
the Optionee may, unless the applicable Option Agreement provides
otherwise, exercise an Option previously granted within sixty (60) days
after the date of such termination, but in no event later than the date
on which the Option would have expired in accordance with its terms."
A-1
<PAGE> 26
7. Section 6.2(a) of the Plan is hereby amended by revising the first
sentence thereof to be and read as follows:
"If an Optionee dies while he or she is either (i) an Employee of the
Company or a Subsidiary, or (ii) a member of the Company's Board of
Directors, and at the time of his or her death the Optionee was entitled
to exercise an option theretofore granted to him or her, the Option
shall, unless the applicable Option Agreement provides otherwise, expire
sixty days after his or her death, but in no event later than the date
on which the Option would have expired if the Optionee had lived."
8. Section 6.2(b) of the Plan is hereby amended by revising the first
sentence thereof to be and read as follows:
"If an Optionee dies during the 60-day period after the termination of
his or her position as (i) an Employee of the Company or a Subsidiary,
or (ii) a member of the Company's Board of Directors, and at the time of
his or her death the Optionee was entitled to exercise an option
theretofore granted to him or her, the Option shall, unless the
applicable Option Agreement provides otherwise, expire sixty days after
which his or her position was terminated, but in no event later than the
date on which the Option would have expired if the Optionee had lived."
9. Section 7.1 shall be amended by deleting the second sentence
thereof.
10. Section 7.3 of the Plan is hereby amended by revising the first
sentence thereof to be and read as follows:
"In making determinations concerning the Employees or Non-employee
Directors who shall receive Options as well as the number of shares to
be covered thereby and the time or times at which they shall be granted,
the Committee or the Board, as applicable, shall take into account the
nature of the services rendered by the respective Optionees, their past,
present and potential future contributions to the Company's success, and
such other factors as the Committee may deem relevant." Notwithstanding
any provision hereof, the Board shall not grant Incentive Stock Options
to a Non-employee Director."
IN WITNESS WHEREOF, the Company has caused this Amendment Number One to the
@TRACK Communications, Inc. Amended and Restated 1994 Stock Option Plan to be
executed in its name and on its behalf as of the day of , 2000.
@TRACK COMMUNICATIONS, INC.
By:
----------------------------------
Title:
---------------------------------
A-2
<PAGE> 27
@TRACK COMMUNICATIONS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 23, 2000
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF @TRACK COMMUNICATIONS, INC.'S
BOARD OF DIRECTORS
The undersigned herby appoints Jana Ahlfinger Bell and J. Raymond
Bilbao, and each of them, proxies for the undersigned with full power of
substitution, to vote all shares of @TRACK Communications, Inc.'s Common Stock
which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of @TRACK Communications, Inc., Richardson, Texas, on Tuesday, May
23, 2000 at 2:00 P.M., or at any adjournment thereof, upon the matters set forth
on the reverse side and describe in the accompanying Proxy Statement and upon
such other business as may properly come before the meeting or any adjournment
thereof.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY
ITEM. THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE ON THE REVERSE SIDE. IF NO SPECIFICATIONS ARE MADE, THE
PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON REVERSE SIDE
(Continued and to be signed on other side)
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
<PAGE> 28
<TABLE>
<S> <C> <C>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3. PLEASE MARK
YOUR VOTES AS [X]
INDICATED IN
THIS EXAMPLE
FOR WITHHOLD
FOR ALL
Item 1- ELECTION OF DIRECTORS. [ ] [ ] Item 2- RATIFICATION OF THE APPOINTMENT FOR AGAINST ABSTAIN
Jana Ahlfinger Bell, Stephen L. Greaves, OF ARTHUR ANDERSEN, LLP AS THE
Gerry C. Quinn, John Stupka COMPANY'S INDEPENDENT AUDITORS [ ] [ ] [ ]
FOR 2000.
WITHHELD FOR ONE OR MORE NOMINEES: (Write Item 3- AMENDMENT OF THE COMPANY'S
that nominee's name in the space provided below). STOCK OPTION PLAN TO PERMIT NON- [ ] [ ] [ ]
EMPLOYEE MEMBERS OF THE BOARD
OF DIRECTORS TO PARTICIPATE IN
- -------------------------------------------------- THE STOCK OPTION PLAN.
- --------------------------------------------------
- -------------------------------------------------- I PLAN TO ATTEND THE MEETING [ ]
COMMENTS/ADDRESS CHANGE Please mark
this box if you have written comments/address [ ]
change on the reverse side.
Receipt is hereby acknowledge of the @Track [ ]
Communications, Inc. Notice of Meeting and
Proxy Statement.
</TABLE>
Signature(s) Date
------------------------------------- ------------------------
NOTE: Please sign as name appears herein. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
