DEFINITIVE
PROXY STATEMENT
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed
by the Registrant
x
Filed
by a party other than the Registrant
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Check
the appropriate box:
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o
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Preliminary
Proxy Statement
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¨
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Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
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x
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Definitive
Proxy Statement
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¨
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Definitive
Additional Materials
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¨
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Soliciting
Material Pursuant to 240.14a-12
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WEGENER
CORPORATION
(Name
of Registrant as Specified in Its Charter)
Payment
of Filing Fee (Check the appropriate
box):
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¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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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)
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Proposed
maximum aggregate value of
transaction:
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¨
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Fee
paid previously with preliminary
materials.
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¨
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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.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement
No.:
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WEGENER
CORPORATION
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD FEBRUARY 1, 2011
To our
stockholders:
You are
cordially invited to attend the 2011 Annual Meeting of Stockholders (the “2011
Annual Meeting”) of Wegener Corporation (“Wegener” or the “Company”), a Delaware
corporation, which will be held at its home office at 11350 Technology Circle,
Johns Creek, Georgia 30097, on February 1, 2011 at 9:00 a.m., Eastern Standard
Time, for the following purposes:
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1)
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To
elect two Class I directors to hold office until the 2014 annual meeting
of stockholders or until their successors shall have been elected and
qualified. The board of directors recommends that stockholders vote
for
its
nominees.
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2)
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To approve and adopt our 2011
Incentive Plan. The board of directors recommends that stockholders vote
for
the 2011 Incentive
Plan.
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3)
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To
approve an amendment to the Certificate of Incorporation of the Company
authorizing 250,000 shares of a new class of stock to be designated as
“Preferred Stock,” par value $20, and authorizing the Board of Directors
to issue the shares of Preferred Stock in one or more series and to set
the terms and conditions of the same without further shareholder
approval. The board of directors recommends that stockholders
vote
for
the
amendment.
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4)
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To hold an advisory vote on
executive compensation.
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5)
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To hold an advisory vote on the
frequency of holding an advisory vote on executive
compensation.
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6)
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To consider ratification of the
appointment of Habif, Arogeti & Wynne, LLP to serve as the independent
registered public accounting firm for fiscal 2011. The board of
directors recommends that stockholders vote
for
the ratification of the
appointment of Habif, Arogeti & Wynne,
LLP.
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7)
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To transact such other business
as may properly come before the meeting or any adjournment
thereof.
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The
foregoing items of business are more fully described in the Proxy Statement
accompanying this notice. The Board of Directors has fixed December 3, 2010
as the record date for the determination of stockholders entitled to vote at the
2011 Annual Meeting. Only stockholders of record at the close of business on
that date will be entitled to notice of and to vote at the meeting. The stock
transfer records of Wegener Corporation will not be closed.
We are
pleased to take advantage of the Securities and Exchange Commission rules that
allow issuers to furnish proxy materials to their stockholders on the Internet.
We believe these rules allow us to provide our stockholders with the information
they need, while lowering the costs of delivery and reducing the environmental
impact of our annual meeting of stockholders. As owners of Wegener your vote is
important. Whether or not you are able to attend the 2011 Annual Meeting in
person, it is important that your shares be represented. Please vote as soon as
possible. If you attend the meeting, you may, if you wish, withdraw your proxy
and vote in person.
By
Order of the Board of Directors
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James
T. Traicoff
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Secretary
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Johns
Creek, Georgia
December
21, 2010
WEGENER
CORPORATION
11350
Technology Circle
Johns
Creek, Georgia 30097
PROXY
STATEMENT
For the Annual Meeting of
Stockholders to be held on February 1
,
2011
Unless
the context indicates otherwise, all references in this proxy statement to “we,”
“us” and “our” refer to Wegener Corporation and its subsidiary.
General
Our Board
of Directors (the “Board”) has made these materials available to you on the
Internet or, upon your request, has delivered printed versions of these
materials to you by mail, in connection with the Board’s solicitation of proxies
for use at our 2011 Annual Meeting of Stockholders (the “2011 Annual Meeting”),
which will take place on Tuesday, February 1, 2011 at 9:00 a.m. Eastern Standard
Time at our home office located at 11350 Technology Circle, Johns Creek, Georgia
30097, and at any postponement or adjournment thereof. We
made these materials available to stockholders beginning on December 23, 2010.
Our stockholders are invited to attend the 2011 Annual Meeting and are requested
to vote on the proposals described in this Proxy Statement.
Any
stockholder who executes and delivers a proxy may revoke it at any time prior to
its use by: (1) giving written notice of revocation to our Secretary;
(2) executing a proxy bearing a later date; or (3) appearing at the
2011 Annual Meeting and voting in person.
Questions
and Answers About the 2011 Annual Meeting of Stockholders
What
is included in these materials?
These
materials include:
• Our
Proxy Statement for the 2011 Annual Meeting; and
• Our
2010 Annual Report to Stockholders, which includes our audited consolidated
financial statements.
If you
requested printed versions of these materials by mail, these materials also
include the proxy card for the 2011 Annual Meeting.
What
items will be voted on at the 2011 Annual Meeting?
There are
six items that will be voted on at the 2011 Annual Meeting:
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1)
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The
election of two Class I directors to hold office until the 2014 annual
meeting of stockholders or until their successors shall have been elected
and qualified. The Board recommends that stockholders vote
for
its
nominees.
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2)
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Approval and adoption of our 2011
Incentive Plan. The Board recommends that stockholders vote
for
the 2011 Incentive
Plan.
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3)
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Approval
of an amendment to the Company’s Certificate of
Incorporation authorizing 250,000 shares of a new class of stock to be
designated as “Preferred Stock,” and authorizing the Board of Directors to
issue the shares of Preferred Stock in one or more series and to set the
terms and conditions of the same without further shareholder
approval.
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4)
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To hold an advisory vote on
executive compensation.
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5)
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To hold an advisory vote on the
frequency of holding an advisory vote on executive
compensation.
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6)
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To consider ratification of the
appointment of Habif, Arogeti & Wynne, LLP to serve as the independent
registered public accounting firm for fiscal 2011. The Board
recommends that stockholders vote
for
the ratification of the
appointment of Habif, Arogeti & Wynne,
LLP.
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We are
not aware of any matters to be presented other than those described in this
Proxy Statement. If any matters not described in the Proxy Statement are
properly presented at the meeting, proxies will be voted upon any such matters
in accordance with the best judgment of the person or persons acting thereunder
as to what is in the best interests of Wegener Corporation.
What
are our Board of Directors’ voting recommendations?
Our Board
recommends that you vote your shares
for
its nominees;
for
the 2011 Incentive Stock
Plan;
for
the amendment
to the Certificate of Incorporation authorizing the Company to issue preferred
stock;
for
the
approval, on an advisory basis, of the compensation of our named executive
officers;
for
the
approval, on an advisory basis, of an annual advisory vote on executive
compensation; and
for
the appointment of Habif, Arogeti & Wynne, LLP. Unless
otherwise specified, all shares represented by effective proxies will be voted
for
each of these four
agenda items.
Who
is entitled to vote at the 2011 Annual Meeting?
Holders
of our outstanding shares of our common stock at the close of business on
December 3, 2010 are entitled to notice of and to vote at the 2011 Annual
Meeting. As of December 3, 2010, there were approximately 12,647,051 shares
of common stock outstanding. The holders of a majority of the shares issued and
outstanding and entitled to vote, present in person or represented by proxy,
shall constitute a quorum.
What
is the difference between holding shares as a stockholder of record and as a
beneficial owner?
Stockholders of
Record.
You are a stockholder of record if at the close of business
on the Record Date your shares were registered directly in your name with
Securities Transfer Corporation, our transfer agent.
Beneficial Owner.
You
are a beneficial owner if at the close of business on the Record Date your
shares were held by a brokerage firm or other nominee and not in your name.
Being a beneficial owner means that, like most of our stockholders, your shares
are held in “street name.” As the beneficial owner, you have the right to direct
your broker or nominee how to vote your shares by following the voting
instructions your broker or other nominee provides. If you do not provide your
broker or nominee with instructions on how to vote your shares, your broker or
nominee will be able to vote your shares with respect to some of the proposals,
but not all. Please see “
What
if I did not specify how my shares are to be voted
?” for additional
information.
Why
did I receive a one-page notice in the mail regarding Internet availability of
proxy materials this year instead of a full set of proxy materials?
Pursuant
to rules adopted by the Securities and Exchange Commission (the “SEC”), we have
elected to provide access to our proxy materials over the Internet. Accordingly,
we are sending a Notice of Internet Availability of Proxy Materials (the
“Notice”) to our stockholders of record and beneficial owners. All stockholders
will have the ability to access the proxy materials on the website referred to
in the Notice or request to receive a printed set of the proxy materials.
Instructions on how to access the proxy materials over the Internet or to
request a printed copy may be found in the Notice. In addition, stockholders may
request to receive proxy materials in printed form by mail or electronically by
email on an ongoing basis.
How
can I get electronic access to the proxy materials?
The
Notice will provide you with instructions regarding how to:
• View
our proxy materials for the 2011 Annual Meeting on the Internet;
and
•
Instruct us to send future proxy materials to you electronically by
email.
Choosing
to receive future proxy materials by email will save us the cost of printing and
mailing documents to you and will reduce the impact of our annual meetings on
the environment. If you choose to receive future proxy materials by email, you
will receive an email next year with instructions containing a link to those
materials and a link to the proxy voting site. Your election to receive proxy
materials by email will remain in effect until you terminate
it.
How
do I vote in person?
If you
owned shares of our common stock as of the close of business on the record date,
December 3, 2010, you may attend the 2011 Annual Meeting and vote in person. If
you are not the record holder of your shares, please refer to the discussion
following the question “What if I am not the record holder of my shares?” If you
hold your shares in the name of a bank or broker, you will not be able to vote
in person at the 2011 Annual Meeting, unless you have previously specially
requested and obtained a “legal proxy” from your bank or broker and present it
at the 2011 Annual Meeting.
How
do I vote by proxy?
You may
vote your proxy over the Internet or by completing, signing and dating the
enclosed proxy card and returning it promptly in the enclosed postage-paid
envelope. To be able to vote your shares in accordance with your instructions at
the 2011 Annual Meeting, we must receive your proxy as soon as possible but in
any event prior to the 2011 Annual Meeting. If you hold your shares through a
bank or brokerage firm, you may have the option to provide your voting
instructions via the Internet or telephone. Please review the enclosed voting
form to determine if these voting options are available to you.
If
I plan to attend the annual meeting, should I still submit a proxy?
Whether
you plan to attend the 2011 Annual Meeting or not, we urge you to submit a proxy
card. Returning the enclosed proxy card will not affect your right to attend the
2011 Annual Meeting and vote.
What
will happen if I do not vote my shares?
Stockholders of Record
. If
you are the stockholder of record of your shares and you do not vote by proxy
card, by telephone, via the Internet or in person at the Annual Meeting, your
shares will not be voted at the Annual Meeting.
Beneficial Owners
. If you are
the beneficial owner of your shares, your broker or nominee may vote your shares
only on those proposals on which it has discretion to vote. Under the rules of
the New York Stock Exchange, or the NYSE, your broker or nominee does not have
discretion to vote your shares on non-routine matters such as Proposals 1
through 5. However, your broker or nominee does have discretion to vote your
shares on routine matters such as Proposal 6.
What
if I do not specify how my shares are to be voted?
Stockholders of Record
. If
you are a stockholder of record and you submit a proxy, but you do not provide
voting instructions, our representatives will vote your shares. Therefore,
unless otherwise specified, all shares represented by effective proxies will be
voted in accordance with the description on page 1 of this proxy statement.
Submitting a proxy card will entitle our representatives to vote your shares in
accordance with their discretion on matters not described in this proxy
statement that may arise at the 2011 Annual Meeting.
Beneficial Owners
. If you are
a beneficial owner and you do not provide the broker or other nominee that holds
your shares with voting instructions, the broker or other nominee will determine
if it has the discretionary authority to vote on the particular matter. Under
the NYSE’s rules, brokers and other nominees have the discretion to vote on
routine matters such as Proposal 6, but do not have discretion to vote on
non-routine matters such as Proposals 1 through 5. Therefore, if you do not
provide voting instructions to your broker or other nominee, your broker or
other nominee may only vote your shares on Proposal 6 and any other routine
matters properly presented for a vote at the Annual Meeting.
What
are the effects of broker non-votes and abstentions?
Brokers
or other nominees who hold shares of our common stock for a beneficial owner
have the discretion to vote on routine proposals when they have not received
voting instructions from the beneficial owner at least ten days prior to the
Annual Meeting. A broker non-vote occurs when a broker or other nominee does not
receive voting instructions from the beneficial owner and does not have the
discretion to direct the voting of the shares. Abstentions and broker non-votes
will be counted for purposes of calculating whether a quorum is present at the
Annual Meeting, but will not be counted for purposes of determining the number
of votes present in person or represented by proxy and entitled to vote with
respect to a particular proposal. Thus, a broker non-vote will not impact our
ability to obtain a quorum and will not otherwise affect the outcome of the vote
on a proposal that requires a plurality of votes cast or the approval of a
majority of the votes present in person or represented by proxy and entitled to
vote. An abstention from voting by a stockholder on proposals other
than the election of directors will have the same effect as a vote against such
proposal
.
What
is the vote required for each proposal?
Each
outstanding share of common stock entitled to vote is entitled to one vote upon
each matter submitted to a vote at any meeting of stockholders. All elections of
directors shall be determined by a plurality of the votes cast. The adoption of
our 2011 Incentive Plan, the proposal to hold an advisory vote on executive
compensation and the ratification of auditors for fiscal 2011 will be approved
if a quorum exists and the majority of the total votes cast on the proposal are
voted in favor of it. The amendment to our certificate of incorporation will be
approved if a majority of the outstanding shares of our common stock entitled to
vote on the proposal are voted in favor of it. Except as otherwise required by
law or by our certificate of incorporation, all other matters shall be
determined by the vote of the holders of a majority of the voting power present
in person or represented by proxy and entitled to vote on the subject
matter.
Who
pays the cost of soliciting proxies?
The cost
of soliciting proxies will be borne by the Company. In addition to use of the
mails, proxies may be solicited in person or by telephone by our directors,
officers or regular employees who will not receive additional compensation for
such services. We will also solicit proxies by email from stockholders who are
our employees or who previously requested to receive proxy materials
electronically
.
Brokerage
houses, nominees, custodians and fiduciaries will be requested to forward
soliciting material to beneficial owners of stock held of record by them, and we
will reimburse such persons for their reasonable expenses in doing
so.
How
can I find the results of the Annual Meeting?
Preliminary
results will be announced at the Annual Meeting. Final results will be published
in a current report on Form 8-K to be filed with the SEC within four business
days after the Annual Meeting. If the official results are not available at that
time, we will provide preliminary voting results in the Form 8-K and will
provide the final results in an amendment to the Form 8-K as soon as they become
available.
Do
I receive appraisal rights?
Under the
General Corporation Law of the State of Delaware, you are not entitled to
dissenter’s rights with respect to any of the four agenda items, including the
proposed amendment to our Certificate of Incorporation which authorizes 250,000
shares of a new class of stock to be designated as “Preferred Stock,” and
authorizes the Board of Directors to issue the shares of Preferred Stock in one
or more series and to set the terms and conditions of the same without further
shareholder approval.
How
can I receive more information?
If you
have any questions about giving your proxy or about our solicitation, or if you
require assistance, please contact our Chief Financial Officer, James T.
Traicoff, at (770) 623-0096.
SECURITY
OWNERSHIP OF CERTAIN
BENEFICIAL
OWNERS AND MANAGEMENT
The
following table sets forth certain information as of December 6, 2010 with
respect to ownership of our outstanding common stock by: (i) all persons
known to us to beneficially own more than five percent of our outstanding common
stock, including their addresses; (ii) each of our directors, director
nominees and executive officers; and (iii) all of our directors and
executive officers as a group. Unless otherwise indicated, the individual
possesses sole voting and investment powers with respect to the shares
shown.
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Amount
and
Nature of
Beneficial
Ownership
(1)
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Percent
of
Class
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Robert
A. Placek
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2,042,727
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(2)
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15.2
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%
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C.
Troy Woodbury, Jr.
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673,834
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(3)
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5.0
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%
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Thomas
G. Elliot
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56,800
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(4)
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*
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Phylis
A. Eagle-Oldson
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47,000
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(4)
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*
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David
W. Wright
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958,000
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(5)
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7.3
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%
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Jeffrey
J. Haas
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36,050
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(6)
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*
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Stephen
J. Lococo
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1,067,873
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(7)
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8.1
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%
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James
T. Traicoff
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208,724
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(8)
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1.6
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%
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David
E. Chymiak
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1,115,845
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(9)
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8.5
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%
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Henry
Partners, L.P., et al.
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952,000
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(10)
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7.2
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%
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Footprints
Asset Management & Research, Inc.
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1,036,873
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(11)
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7.9
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%
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All
executive officers and directors as a group (7 persons)
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4,133,008
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(12)
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29.7
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%
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*
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Less
than 1% of outstanding shares.
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(1)
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Includes
stock options currently exercisable or exercisable within 60 days of the
record date.
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(2)
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Includes
29,267 shares held in a 401(k) plan and stock options to purchase 312,150
shares. Mr. Placek’s address is 11350 Technology Circle, Johns
Creek, Ga. 30097.
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(3)
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Includes
22,759 shares held in a 401(k) plan and 214,575 shares subject to stock
options.
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(4)
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Represents
stock options to purchase common
stock.
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(5)
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Includes
952,000 shares indirectly and beneficially owned by Mr. Wright by
virtue of his control of Henry Partners, L.P. and Matthew Partners, L.P.
See footnote (10) below. Also includes 6,000 shares subject to stock
options.
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(6)
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Includes
31,000 shares subject to stock
options.
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(7)
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Mr. Lococo
is deemed to be the indirect beneficial owner of these shares, which are
owned of record by Footprints Asset Management & Research, Inc.,
referred to as FAMR, a registered Investment Advisor firm of which
Mr. Lococo is the controlling shareholder, a director, and President
and Portfolio Manager. See footnote (11) below. The number of shares
shown includes approximately 169,885 shares held in an investment
partnership of which Mr. Lococo is a partner and the assets of which
are managed by FAMR. Includes 31,000 shares subject to stock
options.
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(8)
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Includes
15,424 shares held in a 401(k) plan and 75,000 shares subject to stock
options.
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(9)
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The
information regarding Mr. Chymiak is based solely on a Schedule 13G/A
dated October 13, 2003 filed by Mr. Chymiak with the Securities
and Exchange Commission, referred to in this proxy statement as the SEC,
on October 14, 2003. Mr. Chymiak’s address is 1605 E. Iola,
Broken Arrow, Oklahoma 74102.
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(10)
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All
information is based solely upon a Schedule 13G dated January 21, 2010
filed with the SEC on January 22, 2010 by a group of reporting persons
comprised of Henry Partners, L.P., Matthew Partners, L.P., Henry
Investment Trust, L.P. (“HIT”) and David W. Wright. According to the
Schedule 13D/A, Henry Partners, L.P. possesses sole voting and dispositive
powers with respect to 684,000 shares, or 5.4% of the outstanding common
stock and Matthew Partners, L.P. possesses sole voting and dispositive
powers with respect to 268,000 shares, or 2.1% of the outstanding common
stock. David W. Wright is the President of Canine Partners, LLC, which is
the sole general partner of HIT. HIT is the sole general partner of each
of Henry Partners, L.P. and Matthew Partners, L.P. The business address of
Henry Partners, L.P. and Matthew Partners, L.P. is 255 South 17th Street,
Suite 2608, Philadelphia, Pennsylvania
19103.
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(11)
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FAMR
possesses sole voting and dispositive powers with respect to 1,036,873
shares, or 7.9% of our outstanding common stock. The address of FAMR’s
principal business office is 11422 Miracle Hills Drive, Suite 208, Omaha,
Nebraska 68154.
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(12)
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Includes
67,450 shares held in a 401(k) plan and 767,525 shares subject to stock
options.
|
AGENDA
ITEM ONE
ELECTION
OF DIRECTORS
Our Board
presently consists of six directors, elected to staggered three-year
terms.
The terms
of C. Troy Woodbury, Jr. and Phylis A. Eagle-Oldson will expire at the upcoming
2011 Annual Meeting. Our Board, upon the recommendation of the independent
corporate governance and nominating committee of our Board (the “Corporate
Governance Committee”), has nominated C. Troy Woodbury, Jr. and Phylis A.
Eagle-Oldson for reelection as Class I directors, to serve for a term of three
years expiring in January 2014. Unless otherwise directed, the proxies will be
voted at the meeting for the election of the foregoing nominees or, in the event
of any unforeseen contingency, for a different person as substitute. Directors
are elected by a plurality of the votes cast by the holders of shares entitled
to vote in the election of directors at a meeting of stockholders at which a
quorum is present.
C. Troy Woodbury, Jr.
, age 63,
Class I director, was appointed President and CEO of the Company and WCI in
October 2009. He served as our Treasurer and Chief Financial Officer
from June 1988 to October 2009 and as one of our directors since December 1989.
He also served as Treasurer and Chief Financial Officer of WCI from September
1992 to October 2009, and as Senior Vice President of Finance from March 2002 to
October 2009. Mr. Woodbury served as Executive Vice President of WCI from
July 1995 to March 2002 and as Chief Operating Officer of WCI from September
1992 to June 1998. Prior to joining us in 1988, Mr. Woodbury served as
Group Controller for Scientific-Atlanta, Inc. from March 1975 to June
1988.
Phylis A. Eagle-Oldson,
age
61, Class I director, has served as one of our directors since January 2004.
Since 1999, Ms. Eagle-Oldson has served as President and Chief Executive
Officer of the Emma L. Bowen Foundation, a media industry-sponsored initiative
to develop diversity within the telecommunications industry. From 1980 to 1999,
Ms. Eagle-Oldson was employed by National Cable and Telecommunications
Association, serving as its Vice President, Administration and Finance from 1985
to 1999.
OUR
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THE FOREGOING
NOMINEES.
The
directors whose terms do not expire at the upcoming 2011 Annual Meeting are as
follows:
Thomas G. Elliot
, age 68,
Class III director, has served as one of our directors since September 1998.
Mr. Elliot is a consultant and the principal of TGE & Associates,
which was formed in 1997. Mr. Elliot engages in engineering and management
consulting, among other activities. Mr. Elliot was previously employed by
Telecommunications, Inc., referred to in this proxy statement as TCI, beginning
in 1964, most recently as Senior Vice President of Engineering and Technical
Services for TCI Cable Management, Inc. (from 1993 to 1997). Between 1989 and
1991, Mr. Elliot took a sabbatical from TCI to help form Cable Television
Laboratories, Inc., a research and development consortium of cable television
system operators representing most of the cable subscribers in North America,
where he served as Vice President of Science and Technology. Mr. Elliot is
past-chairman and at-large director of the Society of Cable Telecommunications
Engineers, referred to in this proxy statement as SCTE, founder of the SCTE
Interface Practices Committee, serves on the NCTA Engineering Committee and on
the Education and Training Committee of the CATV Center and Museum. His term
expires in January 2013.
Stephen J. Lococo,
age 54,
Class III director, has served as one of our directors since December 2006.
Since 2003, Mr. Lococo has been the controlling shareholder, a director and
President and Portfolio Manager of Footprints Asset Management &
Research, Inc., a registered Investment Advisor firm based in Omaha, Nebraska.
From 2002 to 2003, Mr. Lococo served as a Registered Investment Executive
with Smith Hayes Financial, and from 1990 to 2002, Mr. Lococo served as a
Registered Investment Executive with Kirkpatrick Pettis, both also registered
Investment Advisor firms. Mr. Lococo also serves on the credit committee of
Acceptance Insurance Companies. His term expires in January
2013.
Jeffrey J. Haas
, age 49, Class
II director, has served as one of our directors since February 2006 and has
served since May 2000 as Professor of Law at New York Law School. Mr. Haas
previously taught at that school as an Associate Professor of Law from July 1996
to April 2000. His legal courses include corporate law (including corporate
governance), securities regulation, mergers and acquisitions, mutual fund
regulation, corporate finance and contract law. Prior to joining New York Law
School, Professor Haas was in private legal practice with two national law
firms. Professor Haas is a member of the board of trustees of American
Independence Funds Trust, an open-end, management investment company registered
under the Investment Company Act of 1940. His term of office expires in January
2012.
Robert A. Placek
, age 72,
Class II director, has served as one of our directors since 1987 and is the
Chairman of our Board and a co-founder. He has previously served as our
President and Chief Executive Officer from August 1987 to October 2009 and as
our Chairman since May 1994. He also serves as Chairman of the Board of
Directors of Wegener Communications, Inc., referred to in this proxy statement
as WCI. His career spans over forty years in the satellite communications
industry. Prior to co-founding us, Mr. Placek started and managed the
Satellite Communications Product Line at Scientific Atlanta. His term
of office expires in January 2012.
Director
Qualifications
Our
Corporate Governance Committee and the Board believe that the above-mentioned
attributes of our directors and director nominees, along with the leadership
skills and other experiences of our Board members described in the table below,
provide the Company with the perspectives and judgment necessary to guide the
Company’s strategies and monitor their execution.
C.
Troy Woodbury, Jr.
|
• Extensive
financial and operating experience with over twenty years experience at
the Company serving as Treasurer and Chief Financial Officer for over
twenty years and Chief Operating officer for over five
years.
|
|
|
|
• Over
twenty years of board experience on the Company’s
board.
|
|
|
|
• Prior
satellite communications industry experience serving as Internal Audit
Manager and Group Controller.
|
|
|
|
• Certified
Public Accountant, with over four years public accounting
experience.
|
|
|
Phylis
A. Eagle-Oldson
|
• Over
ten years of executive level experience serving as President and Chief
Executive Officer of a private foundation serving the telecommunications
industry.
|
|
|
|
• Over
fifteen years of experience at a cable and telecommunications industry
trade association including over fifteen years of financial experience as
Vice President of Administration and Finance.
|
|
|
|
• Six
years of board experience on the Company’s board and including serving as
financial expert and Chair of the Company’s Audit
Committee.
|
|
|
Thomas
G. Elliot
|
• Extensive
consulting experience providing engineering and management expertise to
the cable television
industry.
|
|
• Executive
level experience serving as Senior Vice President of Engineering and
Technical Services, and Vice President of Science and
Technology in the cable television industry.
|
|
|
|
• Chairman,
director and committee level experience at three cable industry trade
organizations.
|
|
|
|
• Over
ten years of board experience on the Company’s board and various Board
committees.
|
|
|
Stephen
J. Lococo
|
• Extensive
investment and finance experience serving as President and Portfolio
Manager and Director of a registered Investment Advisor
firm.
|
|
|
|
• Outside
committee level experience serving on credit committee of Accepted
Insurance Companies.
|
|
|
|
• Almost
four years of board experience on the Company’s board and various Board
committees.
|
|
|
Jeffrey
J. Haas
|
• Interdisciplinary
knowledge and experience in contract law, securities regulation, corporate
law and governance, corporate finance, and mergers and
acquisitions.
|
|
|
|
• Legal
experience gained by working at two prominent national law
firms.
|
|
|
|
• Twelve
years of outside board experience at the HSBC family of mutual funds and
the American Independence family of mutual funds.
|
|
|
|
• Almost
four years of board experience on the Company’s board and various Board
committees.
|
|
|
Robert
A. Placek
|
• Extensive
executive level experience with over 30 years experience at the Company,
serving as President and Chief Executive Officer for over twenty
years.
|
|
|
|
• Over
twenty years of board experience on the Company’s board including Chairman
of the Board experience from 1995 to present.
|
|
|
|
• Over
forty years experience in the satellite communications
industry.
|
Other
than the understanding of the nominees that they will serve as our directors
when elected, there are no arrangements or understandings between any director
and any other person with regard to the nomination or election of such director,
any future employment by us or our affiliates or with respect to any future
transactions to which us or any of our affiliates may be a party.
Other
than any interest that exists by virtue of (1) any position(s) he or she
may hold with us or our affiliates as described in this proxy statement, and
(2) his or her status as one of our stockholders, no director has any
interest, direct or indirect, in the matters to be acted upon at the 2011 Annual
Meeting.
AGENDA
ITEM TWO
PROPOSAL
TO APPROVE AND ADOPT OUR 2011 INCENTIVE PLAN
On
December 6, 2010 our Board adopted, subject to stockholder approval, our 2011
Incentive Plan, referred to in this proxy statement as the 2011 Plan, and
reserved 1,250,000 shares of our common stock to cover incentive awards to be
granted under the 2011 Plan during its ten year term. The 2011 Plan provides for
the granting of awards to our directors and key employees and the directors and
key employees of our subsidiaries whose responsibilities and decisions directly
affect our performance and the performance of our subsidiaries, as well as to
certain consultants and advisors.
As of
January 1, 2008, our 1998 Incentive Plan expired. In February 2010, the
shareholders approved the Company’s 2010 Incentive Plan, which reserved
1,250,000 shares of our common stock to cover incentive awards granted under the
2010 Incentive Plan. As of December 6, 2010, the Company has issued
common stock options to purchase an aggregate of 663,700 shares of common stock
and issued 500,000 shares of restricted common stock pursuant to the 2010
Incentive Plan. Our Board believes it to be in our best interest and
in the best interests of our stockholders to approve the 2011 Plan. A copy of
the 2011 Plan is attached to this proxy statement as Appendix A. The 2011 Plan
contains the same types of awards available for grant, such as options, stock
appreciation rights, performance units, restricted stock and deferred stock, as
were previously available under our 1998 Incentive Plan and our 2010 Incentive
Plan. The 2011 Plan will become effective upon stockholder
approval.
Effective
Date
Assuming
stockholder approval, the effective date of the Plan will be as of
January 1, 2011. Awards may be granted pursuant to the 2011 Plan from time
to time, but no later than ten years from the effective date, unless otherwise
approved by a majority of our stockholders.
Administration
of the 2011 Plan
The 2011
Plan is to be administered by the compensation and incentive plan committee of
our Board (the “Compensation Committee”). Subject to the provisions of the 2011
Plan, our Compensation Committee has the sole authority to select the officers
and other key employees to whom grants of awards may be made, to determine the
type of award to be granted to the eligible employee, the number of shares of
stock to be covered by each award and the terms and conditions of awards granted
under the 2011 Plan.
Shares
Subject to the 2011 Plan
The
maximum number of shares of our common stock reserved and available for
distribution under the 2011 Plan is 1,250,000. Our Compensation Committee, in
its discretion, may award other securities issued by us that are convertible
into common stock or make other securities subject to purchase pursuant to the
exercise of an option. Shares reserved for issuance under the 2011 Plan consist
of authorized and unissued shares. No repurchased shares may be issued or
delivered under the 2011 Plan. Shares underlying forfeited or canceled awards
will be restored to the status of authorized shares available for distribution
under the 2011 Plan. On December 1, 2010, the closing price of our common stock
was $0.10 per share.
Persons
Eligible to Participate in the 2011 Plan
The 2011
Plan authorizes, in the discretion of our Compensation Committee, awards to be
granted to our directors, officers and key employees or the directors, officers
and key employees of any of our participating subsidiaries, as well as to
consultants and advisors who, in the judgment of the Compensation Committee, are
responsible for or contribute to the management, growth or profitability of our
business or the business of any of our subsidiaries. There are currently
approximately 47 full time employees and six directors (two of whom are also
employees) eligible for participation in the 2011 Plan. It is not possible at
this time to predict the benefits and amounts that will actually be received by
all individual participants or groups of participants in the
future.
Awards
The 2011
Plan authorizes our Compensation Committee to grant incentive and non-qualified
stock options, stock appreciation rights, performance units, restricted stock,
deferred stock or any combination of the foregoing, as more fully described
below.
Stock Options.
Stock options
may be granted either alone or in conjunction with other awards under the 2011
Plan. Stock options granted under the 2011 Plan may be either incentive stock
options as defined under Section 422 of the Internal Revenue Code of 1986,
as amended and referred to in this proxy statement as the Code, or non-qualified
stock options. To the extent that any stock option fails to qualify as an
incentive stock option, it shall constitute a non-qualified stock
option.
No stock
option may be granted after the expiration of ten years from the effective date
of the 2011 Plan, and the aggregate fair market value, determined as of the date
an option is granted, of common stock for which incentive stock options granted
to any eligible employee may first become exercisable in any calendar year may
not exceed $100,000.
Stock
options granted pursuant to the 2011 Plan are nontransferable. Incentive stock
options must be exercised within ten years from the date of grant at an exercise
price of not less than 100% of the fair market value of the stock on the date of
grant. With respect to options granted to a greater than 10% stockholder, the
option must be exercised within five years from the date of grant at an exercise
price of not less than 110% of the fair market value on such date. In the case
of non-qualified stock options, the term may not exceed ten years from the date
of grant and the exercise price may not be less than 75% of the fair market
value on the date of grant.
Stock Appreciation Rights.
Stock appreciation rights may be granted under the 2011 Plan alone, in
conjunction with incentive or non-qualified stock options or in tandem with
non-qualified stock options granted under the 2011 Plan.
Upon
exercise of a stock appreciation right, a participant is entitled, subject to
such terms and conditions as our Compensation Committee may specify, to receive
an amount in cash or shares of common stock equal in value to the excess of the
fair market value of one share of stock over the exercise price per share
specified in the related option or stock appreciation right, multiplied by the
number of shares in respect of which the stock appreciation right is
exercised.
Performance Units.
The 2011
Plan provides for the award of performance units. In granting performance units,
our Compensation Committee shall determine a performance period of one or more
years and shall determine the performance objectives for grants of performance
units. Performance objectives may vary from participant to participant and
between groups of participants, and may be based upon such criteria or
combination of factors as our Compensation Committee may deem
appropriate.
At the
beginning of a performance period, our Compensation Committee shall determine
for each participant eligible for performance units the range of dollar values,
if any, which shall be paid as an award if the relevant measure of performance
for the performance period is met.
Restricted Stock.
Restricted
stock may be received by a participant either as an award or as the result of an
exercise of an option or stock appreciation rights or as payment for a
performance unit. Restricted stock granted under the 2011 Plan shall be subject
to a restriction period, after which restrictions shall lapse, commencing on the
date of grant of the award and ending on such date or upon the achievement of
such performance or other criteria as our Compensation Committee shall
determine.
Except as
otherwise provided in the 2011 Plan, no shares of restricted stock may be sold,
exchanged, transferred, pledged or otherwise disposed of during the restriction
period. Our Compensation Committee may require certificates for restricted stock
delivered under the 2011 Plan to be held in custody by a bank or other
institution or by us until the restriction period expires or the restrictions
thereon otherwise lapse.
In
addition, our Compensation Committee may require the recipient to deliver a
stock power of attorney endorsed in blank relating to the restricted stock as a
condition of receipt of restricted stock.
Deferred Stock.
Deferred
stock may be credited to a participant either as an award, as the result of the
exercise of an option or stock appreciation right or as payment for a
performance unit. Deferred stock granted under the 2011 Plan will be subject to
a deferral period commencing on the date the deferred stock is granted and
ending on such date or upon the achievement of such performance or other
criteria as our Compensation Committee may determine.
Except as
otherwise provided in the 2011 Plan, no deferred stock credited to a participant
may be sold, exchanged, transferred, pledged or otherwise disposed of during the
deferral period. At the expiration of the deferral period, a participant will be
entitled to receive a certificate for the number of shares of stock equal to the
number of shares of deferred stock credited to such participant.
Reorganization
and Recapitalization
In the
event of any recapitalization, reclassification, split up or consolidation of
shares of stock, the merger or consolidation of our company or sale by us of all
or a substantial portion of our assets, our Compensation Committee may make such
appropriate adjustments in the stock subject to awards, including stock subject
to purchase by an option, or the terms, conditions or restrictions on stock or
awards as our Compensation Committee deems equitable; provided, however, that no
such adjustments shall be made on or after the occurrence of a change in control
without the effected participant’s consent.
Change
in Control
In the
event of a change in control of the Company (as defined in the 2011 Plan),
participants may elect to be cashed out of their options, and other awards will
be converted to their fair market value and paid in cash. On or after the
occurrence of a change in control (as defined in the 2011 Plan), the 2011 Plan
may not be amended or terminated until all payments under the 2011 Plan are
made.
Amendment
and Termination of the 2011 Plan
Our Board
may at any time amend or terminate the 2011 Plan. The 2011 Plan may also be
amended by our Compensation Committee, provided that all such amendments shall
be reported to our Board. No amendment shall, without being approved by the
affirmative vote of holders of a majority of the shares voted on such amendment
at a meeting of the stockholders at which a quorum is present, (1) alter
the group of persons eligible for qualified incentive stock options under the
2011 Plan, or (2) increase the maximum number of shares of stock which are
available for awards under the 2011 Plan. No amendment or termination shall
retroactively impair the rights of any person with respect to an award. Except
in connection with a corporate transaction involving the company (including,
without limitation, any stock dividend, stock split, extraordinary cash
dividend, recapitalization, reorganization, merger, consolidation, split-up,
spin-off, combination or exchange of shares), the terms of outstanding awards
may not be amended to reduce the exercise price of outstanding options or stock
appreciation rights or cancel outstanding options or stock appreciation rights
in exchange for cash, other awards or options or stock appreciation rights with
an exercise price that is less than the exercise price of the original options
or stock appreciation rights without stockholder approval.
Federal
Income Tax Consequences
Incentive Stock Options
. All
incentive stock options to be granted under the 2011 Plan are intended to be
incentive stock options as defined in Section 422 of the Internal Revenue
Code of 1986, as amended and referred to in this proxy statement as the
Code.
Under the
provisions of Section 422 of the Code, neither the holder of an incentive
stock option nor the issuer of such option will recognize income, gain,
deduction or loss upon the grant or exercise of an incentive stock option. An
optionee will be taxed only when the common stock acquired upon exercise of his
or her incentive stock option is sold or otherwise disposed of in a taxable
transaction. If at the time of such sale or disposition the optionee has held
the shares for the required holding period (two years from the date the option
was granted and one year from the date of the transfer of the shares to the
optionee), the optionee will recognize long-term capital gain or loss, as the
case may be, based upon the difference between his or her exercise price and the
net proceeds of the sale. However, if the optionee disposes of the shares before
the end of such holding period, the optionee will recognize ordinary income on
such disposition in an amount generally equal to the lesser of: (1) gain on
the sale or other disposition; or (2) the amount by which the fair market
value of the shares on the date of exercise exceeded the option exercise price,
with any excess gain being capital gain, long-term or short-term, depending on
whether or not the shares had previously been held for more than one year on the
date of sale or other taxable disposition.
The
foregoing discussion and the reference to capital gain or loss treatment assume
that the option shares are a capital asset in the hands of the optionee. A sale
or other disposition which results in the recognition of ordinary income to the
optionee will also result in a corresponding income tax deduction for us. The
2011 Plan permits an optionee to pay all or part of the purchase price for
shares acquired pursuant to exercise of an incentive stock option by
transferring to us other shares of our common stock owned by the optionee, and
Section 422 of the Code provides that an option will continue to be treated
as an incentive stock option if it is exercised in such manner. Accordingly,
except as noted below with respect to certain “statutory option stock,” an
optionee who exercises an incentive stock option in whole or in part in such
manner will not recognize any gain or loss upon such exercise. The optionee’s
basis in the number of new shares so acquired that is equal to the number of
shares surrendered will be equal to the optionee’s cost basis in the shares
surrendered. The optionee’s basis in the additional number of new shares
received will be zero plus, in the case of payment of the purchase price in a
combination of cash and surrendered shares, the amount of any cash
paid.
Section 424(c)(3)
of the Code provides that if “statutory option stock” is transferred in
connection with the exercise of an incentive stock option, and if the holding
period requirements under Section 422(a)(1) of the Code are not met with
respect to such statutory option stock before such transfer, then ordinary
income will be recognized as a result of the transfer of statutory option stock.
The optionee’s basis in the number of new shares so acquired that is equal to
the number of shares surrendered will be equal to the optionee’s cost basis in
the shares surrendered plus the amount of ordinary income recognized. The
optionee’s basis in the additional number of new shares received will be zero
plus, in the case of payment of the purchase price in a combination of cash and
surrendered shares, the amount of any cash paid. However, the incentive stock
option stock acquired through the exchange of statutory option stock will still
qualify for favorable tax treatment under Section 422 of the
Code.
In
general, an option granted under the 2011 Plan which is designated as an
incentive stock option will be taxed as described above. However, in some
circumstances an option which is designated as an incentive stock option will be
treated as a non-qualified stock option and the holder taxed accordingly. For
example, a change in the terms of an option which gives the employee additional
benefits may be treated as the grant of a new option. Unless all the criteria
for treatment as an incentive stock option are met on the date the “new option”
is considered granted (such as the requirement that the exercise price of the
option be not less than the fair market value of the stock as of the date of the
grant), the option will be treated and taxed as a non-qualified stock option. In
addition, the aggregate fair market value (determined at the time the option was
granted) of the shares with respect to which incentive stock options granted
under the 2011 Plan are exercisable for the first time by an optionee during any
calendar year may not exceed $100,000. Any excess over such amount will be
deemed to be related to and part of a non-qualified stock option.
Non-Qualified Stock Options
.
All options granted under the 2011 Plan that do not qualify as incentive stock
options are non-qualified stock options not entitled to special tax treatment
under Section 422 of the Code. A participant in the 2011 Plan will
recognize taxable income upon the grant of a non-qualified stock option only if
such option has a readily ascertainable fair market value as of the date of the
grant. However, under the applicable Treasury Regulations, the non-qualified
stock options issued under the 2011 Plan will not have a readily ascertainable
fair market value unless, at the time such options are granted, similar options
of the company are actively traded on an established market. We will not have
any such actively traded options in the foreseeable future.
Upon the
exercise of a non-qualified option not having a readily ascertainable fair
market value, the optionee recognizes ordinary income in an amount equal to the
excess of the fair market value of the shares on the date of exercise over the
option exercise price for those shares. We will not be entitled to an income tax
deduction with respect to the grant of a non-qualified stock option or the sale
of stock acquired pursuant to such grant. We generally will be permitted a
deduction equal to the amount of ordinary income the optionee is required to
recognize as a result of the exercise of a non-qualified stock
option.
The 2011
Plan permits our Compensation Committee to allow an optionee to pay all or part
of the purchase price for shares acquired pursuant to an exercise of a
non-statutory option by transferring to us other shares of our common stock
owned by the optionee. If an optionee exchanges previously acquired common stock
pursuant to the exercise of a non-qualified stock option, the Internal Revenue
Service has ruled that the optionee will not be taxed on the unrealized
appreciation of the shares surrendered in the exchange. In other words, the
optionee is not taxed on the difference between his or her cost basis for the
old shares and their fair market value on the date of the exchange, even though
the previously acquired shares are valued at the current market price for
purposes of paying all or part of the option price. Thus, the optionee’s basis
in the number of new shares so acquired that is equal to the number of shares
surrendered will be equal to the optionee’s cost basis in the shares
surrendered. The optionee’s basis in the additional number of new shares
received will be equal to the amount of ordinary compensation income recognized
as the result of the exercise of the option plus, in the case of payment of the
purchase price in a combination of cash and surrendered shares, the amount of
any cash paid.
Stock Appreciation Rights and
Performance Units
. On the exercise of a stock appreciation right or upon
the receipt of cash or common stock with respect to a performance unit, the
participant will recognize taxable ordinary income in an amount equal to the sum
of the cash and the fair market value of the stock (determined as of the date of
exercise of the stock appreciation right or the date of receipt of cash or
common stock with respect to the performance unit, whichever is applicable), if
any, received. A 2011 Plan participant will not recognize a loss on the
termination of an unexercised stock appreciation right or performance unit
received under the 2011 Plan.
Restricted Stock and Deferred
Stock
. Generally, and except as noted below, the grant of restricted
stock or deferred stock is not taxable at the time of the grant. Instead, at the
time restricted stock or deferred stock vests or becomes transferable free of a
substantial risk of forfeiture, a participant will recognize ordinary income
equal to (1) the excess of the fair market value of such restricted stock
or deferred stock on the date the shares vest or become transferrable over
(2) the price, if any, paid for such restricted stock or deferred stock. An
employee may, however, elect to recognize income as of the date of grant of the
restricted stock or deferred stock, in an amount equal to (1) the excess of
the fair market value of the restricted stock or deferred stock on the date of
grant over (2) the price, if any, paid for the restricted stock or deferred
stock. If such an election is made, no additional income will be recognized at
the time the stock vests or becomes transferable. In the event of a subsequent
forfeiture of the shares, an employee making such an election may be able to
recognize a capital loss with respect to the amount, if any, paid for such
restricted stock or deferred stock, but only to the extent such amount exceeds
the amount realized by such employee on such forfeiture. The employee will not
be able to recognize a loss for tax purposes with respect to the excess of fair
market value over the purchase price which was previously included in income.
Dividends paid on the shares of restricted stock or deferred stock before they
vest will be taxed to the participant either as additional compensation or, if
the participant has made the election described above, as dividend
income.
In most
cases, the basis in shares acquired upon exercise of a non-qualified option or
stock appreciation right or upon an award of restricted stock or deferred stock
will be equal to the fair market value of the shares on the employee’s income
recognition date, and the holding period for determining gains and losses on a
subsequent disposition of such shares will begin on such date.
As a
general rule, we will be entitled to a deduction for federal income tax purposes
at the same time and in the same amount that an employee recognizes ordinary
income from awards granted under the 2011 Plan (including the recognition of
ordinary income as the result of a holder of stock obtained through exercise of
an incentive stock option disposing of such stock prior to the expiration of the
required holding period), to the extent such income is considered reasonable
compensation under the Code and generally provided that we comply with the
reporting requirements applicable to the ordinary income recognized by the
employee. We will not, however, be entitled to a deduction with respect to
payments to employees that are contingent upon a change of control if such
payments are deemed to constitute “excess parachute payments” pursuant to
Section 280G of the Code and do not qualify as reasonable compensation
pursuant to that Section. In addition, such payment will subject the recipient
to a 20% excise tax. We also may not be entitled to a deduction with respect to
payments to certain employees to the extent that the total remuneration of such
employee is found to be excessive under Section 162(m) of the
Code.
General
. The 2011 Plan is not
qualified under Section 401(a) of the Code and is not subject to the
provisions of the Employee Retirement Income Security Act of 1974.
The
preceding discussion is based upon federal tax laws and regulations in effect on
the date of this document, which are subject to change, and upon an
interpretation of the statutory provisions of the Code, its legislative history
and related income tax regulations. Furthermore, the foregoing is only a general
discussion of the federal income tax consequences of the 2011 Plan and does not
purport to be a complete description of all federal income tax aspects of the
2011 Plan. Plan participants may also be subject to state and local taxes in
connection with the grant or exercise of options, stock appreciation rights,
performance units, restricted stock, deferred stock, or any combination thereof
granted under the 2011 Plan and the sale or other disposition of shares acquired
upon exercise of the options or otherwise received pursuant to the 2011 Plan.
Individuals receiving a grant of options, stock appreciation rights, performance
units, restricted stock, deferred stock, or any combination thereof should
consult with their personal tax advisor regarding federal, state and local
consequences to them of participating in the 2011 Plan.
Impact
of Section 409A of the Internal Revenue Code
The tax
consequences described above under “Federal Income Tax Consequences” may be
impacted by the Congress’ adoption of Section 409A of the Code, which
became effective January 1, 2005 and generally applies to (1) all
awards granted after December 31, 2004, and (2) the portion of any
awards granted prior to January 1, 2005 which had not yet vested as of
December 31, 2004. If an award violates Section 409A of the Code, the
affected participant’s award and all similar awards of the affected participant
made under our other similar plans or arrangements, plus related earnings on
such awards, for that year and all preceding years, will be includible in the
participant’s gross income to the extent the amounts are not subject to a
substantial risk of forfeiture. In addition, the participant will be charged
interest (generally from the date that the award vests) at the Internal Revenue
Service underpayment rate plus one percent, plus an additional tax equal to 20%
of the compensation that is required to be included in gross income. Plans are
required to be administered in good faith with Section 409A of the Code
until December 31, 2008 and thereafter amended to comply with
Section 409A of the Code by December 31, 2008. Therefore, the
discussion above does not specifically address the potential impact of
Section 409A of the Code on the various awards.
The terms
of the 2011 Plan are intended to comply with the requirements of
Section 409A of the Code. However, the statutory language of
Section 409A of the Code is somewhat ambiguous, and the proper application
of certain of its provisions is currently unclear despite the issuance of final
regulations by the Treasury. The Treasury has indicated that it intends to issue
additional guidance in the future to further clarify the application of
Section 409A of the Code. We intend to amend the 2011 Plan, if and as
necessary, to conform its provisions to the requirements of Section 409A of
the Code as clarified in such additional guidance.
OUR
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE 2011
PLAN.
AGENDA
ITEM THREE
PROPOSAL
TO APPROVE AN AMENDMENT TO OUR CERTIFICATE OF INCORPORATION THAT AUTHORIZES
SHARES OF PREFERRED STOCK AND GRANTS TO THE BOARD OF DIRECTORS THE AUTHORITY TO
ISSUE SHARES OF PREFERRED STOCK IN ONE OR MORE SERIES AND TO DETERMINE THE TERMS
AND CONDITIONS THEREOF WITHOUT FURTHER SHAREHOLDER APPROVAL
Overview
At the
2011 Annual Meeting, Wegener’s stockholders will be asked to approve an
amendment to the Company’s Certificate of Incorporation authorizing 250,000
shares of a new class of stock to be designated as “Preferred Stock,” and
authorizing the Board of Directors to issue the shares of Preferred Stock in one
or more series, and to set the terms and conditions of the same without further
shareholder approval.
The
amendment to the Company’s Certificate of Incorporation will provide that
250,000 shares of Preferred Stock of the Company may be issued from time to time
in one or more series, the shares of each series to have such voting powers,
full or limited, or no voting powers, and such designations, preferences and
relative, participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, as are stated and expressed herein or in
the resolution or resolutions providing for the issue of such series, adopted by
the Board of Directors as hereinafter provided.
The amendment to the Certificate of
Incorporation will provide further that the Board of Directors shall have
authority, subject to the limitations prescribed by the General Corporation Law
of the State of Delaware, to authorize the issue of one or more
series of Preferred Stock and with respect to each such series to fix by
resolution or resolutions providing for the issue of such series the voting
powers, full or limited, if any, of the shares of such series and the
designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof. The authority
of the Board of Directors with respect to each series shall include, but not be
limited to, the determination or fixing of the following:
(1) The
designation of such series;
(2) The
dividend rate of such series, the conditions and dates upon which such dividends
shall be payable, the relation which such dividends shall bear to the dividends
payable on any other class or classes of stock or any other series of any class
of stock of the Company, and whether such dividends shall be cumulative or
non-cumulative;
(3) Whether
the shares of such series shall be subject to redemption by the Company and, if
made subject to such redemption, the times, prices and other terms and
conditions of such redemption;
(4) The
terms and amount of any sinking fund provided for the purchase or redemption of
the shares of such series;
(5) Whether
or not the shares of such series shall be convertible into or exchangeable for
shares of any other class or classes of any stock or any other series of any
class of stock of the Company, and, if provision is made for conversion or
exchange, the times, prices, rates, adjustments, and other terms and conditions
of such conversion or exchanges;
(6) The
extent, if any, to which the holders of shares of such series shall be entitled
to vote with respect to the election of directors or otherwise;
(7) The
restrictions, if any, on the issue or reissue of any additional Preferred Stock;
and
(8) The
rights of the holders of the shares of such series upon the dissolution of, or
upon the distribution of assets of, the Company.
The text
of the form of proposed amendment to Wegener’s Certificate of Incorporation is
attached to this proxy statement as Appendix B.
Reasons
for Authorizing the Company to Issue Preferred Shares.
The Board
believes that it is desirable for the Company to have the ability to issue
preferred shares, and for the Board of Directors to have authority to issue the
shares of Preferred Stock in one or more series, and to set the terms and
conditions of the same without further shareholder approval, and that this
resolution should be approved by stockholders for a number of
reasons, including:
|
·
|
Added Flexibility for
Corporate Financing
. Preferred shares are a hybrid
security with features of both debt securities and common stock. The
availability of preferred shares would allow the Company flexibility as it
seeks future financing. It would, among other things,
allow the Company to offer preferred securities, carrying dividend and
liquidation preferences, among other attributes, as an incentive for
financial support. Preferred shares could be offered as an alternative to
debt, or in combination therewith.
|
|
·
|
Ability to Compensate
Consultants on a Non-Cash Basis.
The Company would be
positioned to offer consultants and advisors shares of preferred stock in
compensation for their services, thereby preserving cash for operations
and other debt service.
|
|
·
|
Ability to Use for
Acquisitions or Mergers.
In the event the Company
identifies an attractive acquisition or merger candidate, the Company
would have added flexibility to structure a package that included
preferred stock as consideration in addition to, or in lieu of,
cash.
|
|
·
|
To Exchange for Outstanding
Debt Securities
. The availability of preferred stock
could allow the Company to seek to reduce or restructure debt by offering
a preferred equity alternative.
|
Effects
and Risks of the Authorization of Preferred Shares
Dilution to Existing Individual
Shareholders
. The issuance of any additional shares, common or preferred,
would have a dilutive effect on existing shareholders. The
availability of additional free-trading shares could have a direct impact on the
price of the Company’s securities. If, in designating the rights of
any series of preferred shares, the Company determines that such shares may be
converted into shares of the Company’s common stock, the common stock issued
upon that conversion would dilute the outstanding shares and, if
freely-tradable, could have an adverse effect on the price and volume of the
Company’s shares.
The Issuance of Preferred Shares
Could Adversely Affect the Price of the Company’s Common Shares.
If
preferred shares are issued, they will have rights that are superior to the
common shares. They are likely to have superior rights on such issues
as dividends and liquidation. In addition, they may be convertible
into shares of common stock, which would dilute the number of common shares
outstanding and could have a negative effect on the stock price.
Board Discretion to Issue Preferred
Shares.
If the proposed amendment to the Certificate of Incorporation is
approved by Wegener’s stockholders, the Board shall have the right, in its
discretion, to determine whether and when preferred shares are issued, and the
rights and preferences of such shares. Stockholders would not be able
to determine the rights and preferences of such shares. The
alternative would be for the Company to seek stockholder approval of the rights
and preferences of a given series of preferred shares at the time the Company
seeks to issue shares of that series. Seeking stockholder approval would be
impractical because it would take an extended amount of time and cost a
substantial amount of money, as the Company would have to comply with the
federal proxy rules promulgated by the SEC. Moreover, given that dividend rates
associated with preferred shares are closely tied to prevailing market interest
rates at the time the shares are issued, a substantial time delay in issuing
preferred shares could prevent the Company from taking advantage of a favorable
interest rate environment.
Required
Vote and Recommendation of the Board of Directors
Approval
and adoption of an amendment to Wegener’s Certificate of Incorporation to
authorize the Company to issue shares of preferred stock requires the
affirmative vote of at least a majority of the Company’s issued and outstanding
shares of common stock.
No
Appraisal Rights
Under the
General Corporation Law of the State of Delaware, you are not entitled to
dissenter’s rights with respect to the proposed amendment to our Certificate of
Incorporation which authorizes 250,000 shares of a new class of stock to be
designated as “Preferred Stock,” and authorizes the Board of Directors to issue
the shares of Preferred Stock in one or more series and to set the terms and
conditions of the same without further shareholder approval.
OUR
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE AMENDMENT TO
OUR CERTIFICATE OF INCORPORATION THAT AUTHORIZES SHARES OF PREFERRED
STOCK.
AGENDA
ITEM FOUR
ADVISORY
VOTE ON EXECUTIVE COMPENSATION
The
recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010, or the Dodd-Frank Act, enables our stockholders to vote to approve, on an
advisory (nonbinding) basis, the compensation of our named executive officers as
disclosed in this proxy statement. It is anticipated that the SEC
will adopt rules for the implementation of this process by early
2011. In anticipation of such rules, and consistent with the mandate
of the Dodd-Frank Act, we are asking our stockholders to vote, on an advisory
basis, on the Company’s executive compensation program.
As
described in detail under the heading “
Executive Compensation –
Compensation Discussion and Analysis
,” our executive compensation
structure is designed to attract, motivate, and retain our named executive
officers, who are critical to our success. This structure is calculated to
compensate our named executive officers for their contributions to our growth
and profitability and enhancement of stockholder value. Please read the “
Compensation Discussion and
Analysis”
for additional details about our executive compensation
programs, including information about the fiscal year 2010 compensation of our
named executive officers.
We are
asking our stockholders to indicate their support for our named executive
officer compensation as described in this proxy statement. This proposal,
commonly known as a “say-on-pay” proposal, gives our stockholders the
opportunity to express their views on our named executive officers’
compensation. This vote is not intended to address any specific item of
compensation, but rather the overall compensation of our named executive
officers and the philosophy, policies and practices described in this proxy
statement. Accordingly, we will ask our stockholders to vote “FOR” the following
resolution at the Annual Meeting:
“RESOLVED,
that the Company’s stockholders approve, on an advisory basis, the compensation
of the named executive officers, as disclosed in the Company’s Proxy Statement
for the 2011 Annual Meeting of Stockholders pursuant to the compensation
disclosure rules of the Securities and Exchange Commission, including the
Compensation Discussion and Analysis, the 2010 Summary Compensation Table and
the other related tables and disclosure.”
The
say-on-pay vote is advisory, and therefore not binding on the Company, the
Compensation Committee or our board of directors. Our board of directors and our
Compensation Committee value the opinions of our stockholders and to the extent
there is any significant vote against the named executive officer compensation
as disclosed in this proxy statement, we will consider our stockholders’
concerns and the Compensation Committee will evaluate whether any actions are
necessary to address those concerns.
OUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY
STATEMENT PURSUANT TO THE COMPENSATION DISCLOSURE RULES OF THE SECURITIES AND
EXCHANGE COMMISSION.
AGENDA
ITEM FIVE
ADVISORY
VOTE ON THE FREQUENCY OF
AN
ADVISORY VOTE ON EXECUTIVE COMPENSATION
The
Dodd-Frank Act also enables our stockholders to indicate how frequently we
should seek an advisory vote on the compensation of our named executive
officers. By voting on this Agenda Item 5, stockholders may indicate whether
they would prefer an advisory vote on named executive officer compensation once
every one, two, or three years.
After
careful consideration of this agenda item, our board of directors has determined
that an annual advisory vote on executive compensation is the most appropriate
alternative for the Company. Therefore, our board of directors
recommends that you vote for a one-year interval for the advisory vote on
executive compensation.
In
formulating its recommendation, our board of directors considered that an annual
advisory vote on executive compensation will allow our stockholders to provide
us with direct input on our compensation philosophy, policies and practices as
disclosed in the proxy statement every year. Additionally, an annual advisory
vote on executive compensation is consistent with our policy of seeking input
from, and engaging in discussions with, our stockholders on corporate governance
matters and our executive compensation philosophy, policies and practices. We
understand that our stockholders may have different views as to what is the best
approach for the Company, and we look forward to hearing from our stockholders
on this agenda item.
You may
cast your vote on your preferred voting frequency by choosing the option of one
year, two years, three years or abstain from voting when you vote in response to
the resolution set forth below.
“RESOLVED,
that the option of once every one year, two years, or three years that receives
the highest number of votes cast for this resolution will be determined to be
the preferred frequency with which the Company is to hold a stockholder vote to
approve the compensation of the named executive officers, as disclosed pursuant
to the Securities and Exchange Commission’s compensation disclosure rules (which
disclosure shall include the Compensation Discussion and Analysis, the Summary
Compensation Table, and the other related tables and disclosure).”
The
option of one year, two years or three years that receives the highest number of
votes cast by stockholders will be the frequency for the advisory vote on
executive compensation that has been selected by stockholders. However, because
this vote is advisory and not binding on the board of directors or the Company
in any way, the board may decide that it is in the best interests of our
stockholders and the Company to hold an advisory vote on executive compensation
more or less frequently than the option approved by our
stockholders.
OUR
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE OPTION OF ONCE EVERY
YEAR AS THE FREQUENCY WITH WHICH STOCKHOLDERS ARE PROVIDED AN ADVISORY VOTE ON
EXECUTIVE COMPENSATION, AS DISCLOSED PURSUANT TO THE COMPENSATION DISCLOSURE
RULES OF THE SECURITIES AND EXCHANGE COMMISSION.
AGENDA
ITEM SIX
APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On June
3, 2010, the Audit Committee of the Board of Directors of the Company (the
“Audit Committee”) appointed Habif, Arogeti & Wynne, LLP (“Habif, Arogeti
& Wynne”) as the Company’s independent registered public accounting firm for
fiscal year 2010 and dismissed BDO USA, LLP, formerly known as BDO Seidman, LLP
(“BDO USA”) as the Company’s independent registered public accounting firm,
effective on that date. The change was motivated by the Company’s desire to
reduce audit fees and increase the efficiency of the audit process, while still
maintaining the quality of the audit services that the Company
receives.
The
reports of BDO USA on the financial statements of the Company for the fiscal
years ended August 28, 2009 and August 29, 2008 did not contain an adverse
opinion or a disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope, or accounting principles, except BDO USA’s audit
reports were modified for an uncertainty regarding the Company’s ability to
continue as a going concern. In the Annual Reports on Form 10-K filed by
the Company for the fiscal years ended August 28, 2009 and August 29, 2008, BDO
USA’s audit reports stated that the Company had suffered recurring losses from
operations and had a net capital deficiency that raised substantial doubt about
the Company’s ability to continue as a going concern. During the
fiscal years ended August 28, 2009 and August 29, 2008 and through June 3, 2010,
there were no disagreements between the Company and BDO USA on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure which, if not resolved to the satisfaction of BDO USA would
have caused them to make reference thereto in their reports on the financial
statements for such fiscal years. During the period described in the
preceding sentence, there were no “reportable events,” as such term is defined
in Item 304(a)(1)(v) of Regulation S-K.
During
the fiscal years ended August 28, 2009 and August 29, 2008 and through the date
of the appointment of Habif, Arogeti & Wynne, neither the Company nor anyone
on the Company’s behalf consulted with Habif, Arogeti & Wynne with respect
to (i) the application of accounting principles to a specified transaction,
either completed or proposed, (ii) the type of audit opinion that might be
rendered on the Company’s financial statements, or (iii) any matter that was
either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of
Regulation S-K) or a reportable event (as defined in Item 304(a)(1)(v) of
Regulation S-K).
Our Audit
Committee has selected Habif, Arogeti & Wynne to audit our financial
statements for the current fiscal year and proposes that the stockholders ratify
this selection at the 2011 Annual Meeting. Management is not aware that such
firm nor any of its members or associates has or has had during the past year
any financial interest in us, direct or indirect, or any relationship with us
other than in connection with their professional engagement.
Stockholder
ratification of this appointment is not required. Management has submitted this
matter to the stockholders because it believes the stockholders’ views on the
matter should be considered, and if the proposal is not approved, management may
reconsider the appointment. Representatives of Habif, Arogeti & Wynne are
expected to be present at the 2011 Annual Meeting to respond to stockholders’
questions and will have an opportunity to make any statements they consider
appropriate.
Principal
Accountant Fees and Services.
The following is a summary of the fees and
expenses billed to us by Habif, Arogeti & Wynne and predecessor BDO USA for
professional services rendered for the fiscal years ended September 3, 2010 and
August 28, 2009, all of which were approved by our Audit
Committee:
|
|
Fiscal 2010 Fees*
|
|
|
Fiscal 2009 Fees
|
|
Audit
Fees
|
|
$
|
204,236
|
|
|
$
|
192,550
|
|
Audit-Related
Fees
|
|
|
—
|
|
|
|
18,995
|
|
Tax
Fees
|
|
|
13,750
|
|
|
|
21,362
|
|
All
Other Fees
|
|
|
—
|
|
|
|
—
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Total
Fees
|
|
$
|
217,986
|
|
|
$
|
232,907
|
|
*Included
in the fiscal 2010 audit fees total was $67,750 billed by BDO
USA.
Audit
Fees.
Consists of fees billed for professional services rendered for the
annual audit of our consolidated financial statements and review of the interim
consolidated financial statements included in our quarterly reports on Form
10-Q, and services that are normally provided in connection with statutory and
regulatory filings or engagements.
Audit-Related
Fees.
Consists of fees billed for professional services related to due
diligence and support services regarding the potential acquisition of Wegener
Corporation in fiscal 2009 which was terminated on September 17,
2009.
Tax Fees.
Consists of fees billed for professional services for tax compliance, tax advice
and tax planning. These services include meetings and consultation on various
tax matters of $2,000 in fiscal 2009.
All Other
Fees.
None.
Audit
Committee Pre-Approval Policies and Procedures
Our Audit
Committee has developed a pre-approval policy for the audit and permissible
non-audit services to be provided by the independent registered public
accounting firm. These services may include audit services, audit-related
services, tax services and other services. The pre-approval policy is detailed
as to the particular service or category of services and is generally subject to
a specific budget. The independent registered public accounting firm and
management are required periodically to report to our Audit Committee regarding
the extent of services provided by the independent registered public accounting
firm in accordance with this pre-approval policy, and the fees for the services
performed to date. Our Audit Committee can also pre-approve particular services
on a case-by-case basis.
OUR
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF HABIF, AROGETI & WYNNE, LLP TO SERVE AS OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 2,
2011.
CORPORATE
GOVERNANCE AND BOARD MATTERS
Meetings
of the Board of Directors
Our Board
held four meetings during the fiscal year ended September 3, 2010. During fiscal
2010, each director attended at least 75% of all meetings of our Board and
committee(s) on which he or she served.
Director
Attendance at Annual Meeting of Stockholders
Although
we do not have a formal policy with regard to directors’ attendance at annual
meetings, it is our practice historically to hold a meeting of our Board on the
same day as each year’s annual meeting of stockholders, and therefore our
directors generally attend the annual meeting of stockholders. All of our
directors attended the 2010 annual meeting of stockholders, except for Mr.
Robert A. Placek.
Involvement
in Certain Legal Proceedings
None of
our directors, director nominees, executive officers, or control persons has,
within the past ten (10) years, been (i) placed in bankruptcy or receivership,
(ii) the subject of a criminal proceeding, (iii) the subject of any order,
judgment, or decree permanently or temporarily enjoining, suspending,
sanctioning or otherwise restricting him or her from engaging in any business
practice, including, without limitation, any practice licensed by or registered
with any securities or commodities commission; or (iv) found by any court or
regulatory authority to have been in violation of any securities or commodities
law or regulation or any law or regulation affecting financial
institutions.
Board
Independence
Our Board
presently consists of six members. Our bylaws provide that the number
of members of our Board may be set from time to time by resolution of our Board,
consistent with our Certificate of Incorporation. Our Board has determined that
Ms. Eagle-Oldson and Messrs. Elliot, Haas and Lococo had no relationship
with us that would interfere with the exercise of independent judgment in
carrying out the responsibilities of a director and that such individuals are
independent as defined by the rules of The Nasdaq Stock Market, referred to in
this proxy statement as NASDAQ. Although our common stock no
longer qualifies for listing on The Nasdaq Stock Market, the Board of Directors
and its committees intend to comply with such rules as they relate to the
independence of directors.
Risk
Oversight
Responsibility
for risk oversight rests with our full Board of Directors. Committees help the
Board carry out this responsibility by focusing on specific key areas of risk
inherent in our business.
•
|
The
Audit Committee oversees risks associated with financial and accounting
matters, including compliance with legal and regulatory requirements, and
the Company’s financial reporting and internal control
systems.
|
•
|
The
Corporate Governance Committee oversees risks associated with corporate
governance, including Board structure and director succession
planning.
|
•
|
The
Compensation Committee helps ensure that the Corporation’s compensation
policies and practices support the retention and development of executive
talent with the experience required to manage risks inherent to the
business and do not encourage or reward excessive risk-taking by our
executives.
|
The Board
receives regular updates from the committees about their activities in this
regard and at least annually participates in reviews with management addressing
the progress of significant projects and operational activities. Updates are
measured against benchmark expectations, all of which reflect identified risk
factors and the impact of those identified risks on expected outcomes and
results.
Board
Leadership Structure
The
Company’s bylaws currently require that our Board appoint a lead director from
our independent members of the Board. Currently, our lead director is
Thomas G. Elliot. In addition, the Company’s bylaws provide for the positions of
Chairman of the Board and Chief Executive Officer. The Board believes the
interests of all shareholders are best served at the present time through a
leadership model that does not combine the Chairman and CEO
positions. Accordingly, Robert A. Placek is the Chairman of the
Company while C. Troy Woodbury, Jr. is our CEO. The Board believes
that having both a lead director and a Chairman who is not also CEO provides an
appropriate counterbalance to the power and authority that naturally accompanies
any CEO position, including ours.
Our lead
director has been a chairman, director and committee member at three cable
industry trade organizations, and has over ten years of experience on the
Company’s Board and various Board committees. Our Chairman has
extensive executive level experience, with over 30 years experience at the
Company, having served as our President and Chief Executive Officer for over
twenty years. He also has served on the Company’s Board
for over twenty years, and has been Chairman of the Board since
1995.. He has over forty years experience in the satellite
communications industry.
Our CEO
possesses an in-depth knowledge of the Company, its integrated, multinational
operations, the evolving telecommunications industry, and the array of
challenges to be faced, gained through over twenty years of successful
experience in progressively more senior positions, including as Chief Financial
Officer of the Company for over twenty years. The Board believes that
these experiences and other insights put our CEO in the best position to provide
broad leadership for the Board as it considers strategy and as it exercises its
fiduciary responsibilities to our shareholders.
Further,
the Board has demonstrated its commitment and ability to provide independent
oversight of management.
Four of
the Company’s six directors are independent directors. Only our CEO
and Chairman are not. Importantly, 100 percent of the Audit, Corporate
Governance, and Compensation Committees are independent. Each independent
director has access to the CEO and other Company executives on request; may call
meetings of the independent directors; and may request agenda topics to be added
or dealt with in more detail at meetings of the full Board or an appropriate
Board committee.
Stockholder
Communications with the Board of Directors
Our Board
has implemented a process for stockholders to send communications to the Board.
Any stockholder desiring to communicate with our Board, or with specific
individual directors, may do so by writing to our Secretary at 11350 Technology
Circle, Johns Creek, Georgia 30097. Our Secretary shall promptly forward all
such communications to the Board or such individual directors.
Committees
of the Board of Directors
Our Board
has a standing Audit Committee, a standing corporate governance and nominating
committee, and a standing compensation and incentive plan
committee.
Audit
Committee
Our Audit
Committee is composed of Ms. Eagle-Oldson, Chairperson, and Messrs. Elliot,
Lococo and Haas, and held five meetings during the fiscal year ended September
3, 2010. The members of our Audit Committee are independent, as such term is
defined by NASDAQ rules. The function of the Audit Committee is to oversee our
accounting and financial reporting processes and the audits of our financial
statements, and to perform such other functions as described in our Audit
Committee charter. Our Audit Committee considers the scope, approach,
effectiveness and recommendations of the audit performed by the independent
registered public accountants; determines and prescribes limits upon the types
of non-audit professional services that may be provided by the independent
accountants without adverse effect on the independence of such accountants;
recommends the appointment of independent registered public accountants; and
considers significant accounting methods adopted or proposed to be
adopted.
Our Board
has determined that Phylis Eagle-Oldson qualifies as an “Audit Committee
financial expert,” as such term is defined by the SEC. Ms. Eagle-Oldson is
“independent” as that term is defined under the rules of NASDAQ. Our Board has
also determined that each current member of our Audit Committee has past
employment experience or background which results in such individual’s financial
sophistication as required by NASDAQ, including, but not limited to, the ability
to understand generally accepted accounting principles, which is referred to in
this proxy statement as GAAP, financial statements and internal controls and
procedures, as well as the ability to assess the general application of GAAP.
Each member of our Audit Committee understands Audit Committee functions, and
our Board believes that the members of our Audit Committee possess the requisite
knowledge and experience to adequately perform their duties under our Audit
Committee charter.
Our Board
has adopted a written charter for our Audit Committee, a copy of which is posted
on our website at www.wegener.com.
Corporate
Governance and Nominating Committee
Our
Corporate Governance Committee is composed of Mr. Elliot, Chairman, and
Messrs. Haas and Lococo, and held one meeting during the fiscal year ended
September 3, 2010. The members of our Corporate Governance Committee are
independent, as such term is defined by Nasdaq rules. The initial charge to the
committee by our Board was to review and make recommendations to our board
regarding our stockholder rights agreement. Our Board has approved and delegated
the following additional authorities and responsibilities to the Corporate
Governance Committee, which include, but are not limited to:
(1) to
lead the search for individuals qualified to become members of our Board and to
recommend director nominees to be presented at the annual meeting of
stockholders;
(2) to
review our Board’s committee structure and to make recommendations to our Board
with respect to committee structure and the composition of the
committees;
(3) to
develop and recommend to our Board a set of corporate governance guidelines to
be reviewed by the committee not less frequently than annually;
(4) to
review periodically our bylaws and recommend any changes thereto;
(5) to
develop and make recommendations to our Board regarding an annual board of
directors self-evaluation process;
(6) to
review on an annual basis director compensation for service on our Board and
committees; and
(7) in
its discretion, to retain any outside professional person or firm to assist the
committee in carrying out its duties and responsibilities. See also “Nomination
of Directors.”
Compensation
and Incentive Plan Committee
Our
Compensation Committee is composed of Mr. Haas, Chairman,
Ms. Eagle-Oldson and Mr. Lococo, and held three meetings during the fiscal
year ended September 3, 2010. The functions of our Compensation Committee are:
to consider and approve, or make recommendations to our Board with respect to,
compensation arrangements for our senior management and the adoption of any
benefit plans in which officers and directors are eligible to participate; and
to recommend the key employees who received awards under our 1998 Incentive Plan
and the 2010 Incentive Plan and who will receive awards under our 2011 Plan if
it is approved by our stockholders, the award amount or number of shares of
stock to be granted, and the terms and conditions of each award. See also
“Executive Compensation – Compensation Discussion and Analysis – Role of
Compensation Committee.”
Our Board
has adopted a written charter for our Compensation Committee, a copy of which is
posted on our website at www.wegener.com.
Nomination
of Directors
Criteria
for Nomination to the Board of Directors and Diversity
Our Board
has appointed a separately constituted Corporate Governance Committee and has
adopted corporate governance guidelines recommended by the committee. The
committee does not presently have a charter, but will follow and be responsible
for implementation of most of the guidelines. The guidelines have been posted on
our website. See also “Corporate Governance and Nominating Committee” for a
description of the committee’s duties and responsibilities. Our Corporate
Governance Committee’s process for identifying and evaluating potential nominees
includes soliciting recommendations from our directors and officers. The
Corporate Governance Committee considers director nominees for election to our
Board and makes nominee recommendations to our Board. Generally, director
nominees shall be persons of sound ethical character, be able to represent all
stockholders fairly, have no material conflicts of interest, have demonstrated
professional achievement, have meaningful business experience and an
understanding and appreciation of the major business issues facing us. In
addition, our corporate governance guidelines and the qualification criteria
adopted by the Board specify that the corporate governance and nominating
committee should consider the value of diversity on our Board in the director
nominee identification and nomination process. Accordingly, the Committee’s
evaluation of director nominees includes consideration of their ability to
contribute to the diversity of personal and professional experiences, opinions,
perspectives and backgrounds on the Board. Nominees are not discriminated
against on the basis of race, color, religion, sex, ancestry, national origin,
sexual orientation, disability or any other basis prescribed by law. Absent
special circumstances, upon the recommendation of the Committee, our Board will
continue to nominate qualified incumbent directors whom the directors believe
will continue to make important contributions to our Board.
Our
Corporate Governance Committee will consider for possible nomination qualified
nominees recommended by stockholders. Stockholders who wish to propose a
qualified nominee for consideration shall submit complete information as to the
identity and qualifications of that person to our Secretary at 11350 Technology
Circle, Johns Creek, Georgia 30097. Our bylaws provide that no nomination
submitted by a stockholder will be submitted to a stockholder vote at an annual
meeting unless our Secretary has received written notice of the nomination on or
prior to the date which is 60 days prior to the first anniversary of the date on
which we first mailed proxy materials for the prior year’s annual meeting. Such
notice must include the following:
(1) the
name and address of the nominating stockholder;
(2) a
representation that the stockholder is one of our stockholders and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice;
(3) such
information regarding each nominee as would have been required to be included in
a proxy statement filed pursuant to Regulation 14A under the Exchange Act (or
pursuant to any successor act or regulation) had proxies been solicited with
respect to such nominee by our Board;
(4) a
description of all arrangements or understandings among the stockholder and each
nominee and any other person or persons (naming such person or persons) pursuant
to which the nomination or nominations are to be made by the
stockholder;
(5) the
written consent of each nominee to serve as one of our directors if so elected;
and
(6) such
other information as may be required by applicable law or
regulation.
Compensation
Committee Interlocks and Insider Participation in Compensation
Decisions
None of
the members of our Compensation Committee is or has been one of our officers or
employees. There are no Compensation Committee interlocks and no insider
participation in compensation decisions that are required to be disclosed in
this proxy statement.
Code
of Ethics
We have
adopted a code of business conduct and ethics which is applicable to all of our
directors, officers and employees and the directors, officers and employees of
our subsidiaries. A copy of our code of business conduct and ethics has been
filed with the SEC as an exhibit to our Annual Report on Form 10-K for the year
ended August 29, 2003 and such code is posted on our website at
www.wegener.com.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a)
of the Exchange Act requires our directors, certain officers and persons who own
more than 10% of our outstanding common stock to file with the SEC reports of
changes in ownership of our common stock held by such persons. Officers,
directors and greater than 10% stockholders are also required to furnish us with
copies of all forms they file under this regulation. To the our knowledge, based
solely on a review of copies of such reports furnished to us and representations
that no other reports were required, during fiscal 2010, with the exception of
one late filing of Form 3, all Section 16(a) filing requirements were
complied with by its officers, directors and greater than 10%
stockholders.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Compensation
Objectives
Our
compensation program for our named executive officers is designed to achieve the
following objectives:
|
•
|
reward executive officers for
their contributions to our growth and profitability and enhancement of
stockholder value;
|
|
•
|
recognize individual initiative,
leadership and achievement;
and
|
|
•
|
provide competitive compensation
that will attract and retain qualified
executives.
|
Role
of Compensation and Incentive Plan Committee
Our
Compensation Committee operates under a written charter adopted by our Board.
Our Compensation Committee has several duties and responsibilities, including
the following:
|
•
|
establish a compensation policy
for executives designed to (i) enhance the profitability of the
Company and increase stockholder value, (ii) reward executive
officers for their contribution to the Company’s profitability and for
increases in stockholder value, (iii) recognize individual
initiative, leadership, achievement, and other contributions and
(iv) provide competitive compensation that will attract and retain
qualified executives;
|
|
•
|
review competitive practices and
trends to determine the adequacy of our executive compensation
program;
|
|
•
|
review and consider participation
and eligibility in the various components of the total executive
compensation package;
|
|
•
|
annually review and approve
corporate goals and objectives relevant to our Chief Executive Officer’s
compensation, evaluate our Chief Executive Officer’s performance and
recommend to our Board the Chief Executive Officer’s compensation based on
such evaluation;
|
|
•
|
annually review and make
recommendations to our Board with respect to the compensation of other
executive officers and
directors;
|
|
•
|
approve employment contracts,
change in control provisions and other
agreements;
|
|
•
|
approve and administer cash
incentives and similar compensation plans for executives, and oversee
performance objectives and the funding for executive incentive
plans;
|
|
•
|
review matters relating to
management succession;
|
|
•
|
make recommendations for board of
director approval with respect to incentive compensation plans and
equity-based incentive plans, and administer such plans by establishing
policies and criteria for granting awards, and reviewing and approving the
grants of awards in accordance with such policies and
criteria;
|
|
•
|
if appropriate, hire experts in
the field of executive compensation to assist the committee with its
evaluation of director, Chief Executive Officer or senior executive
compensation;
|
|
•
|
prepare annual reports for our
proxy statement;
|
|
•
|
periodically review executive
supplementary benefits; and
|
|
•
|
periodically review and assess as
necessary the adequacy of the committee’s charter and recommend any
proposed changes to our Board for
approval.
|
The
Committee annually determines whether the Company’s compensation policies and
practices could result in inappropriate risk-taking. Based on its assessment,
the Committee does not believe that the Company’s compensation policies and
practices create any material adverse risks for the Company.
For
additional information on the duties and responsibilities of our Compensation
Committee, see our Compensation Committee charter available on our website at
www.wegener.com
.
Compensation
Process
Our
present Compensation Committee will review and administer our compensation
program for our named executive officers. As part of that process, our
Compensation Committee will review competitive practices and trends to determine
the adequacy of our executive compensation program. Our Compensation Committee
will also annually review and approve corporate goals and objectives relevant to
our Chief Executive Officer’s compensation, evaluate our Chief Executive
Officer’s performance in light of those goals and objectives, and recommend to
our Board the Chief Executive Officer’s compensation based on that evaluation.
For our other named executive officers, our Compensation Committee will annually
review and make recommendations to our Board with respect to
compensation.
During
the 2010 fiscal year, our Compensation Committee held three meetings. The
compensation paid to our named executive officers did not change during that
fiscal year. In the 2008 fiscal year, our Compensation Committee
granted base salary increases to Ned L. Mountain and C. Troy Woodbury, Jr.
During the 2006 and 2007 fiscal years, our Compensation Committee did not hold
any meetings; therefore, the compensation paid to our named executive officers
did not change during those fiscal years. In addition, our named executive
officers have not received stock options during the prior four fiscal years and
have never received more than minimal year-end bonuses.
Total
Compensation and Components of Compensation
Total
compensation for our named executive officers primarily consists of (1) an
annual base salary, (2) a discretionary annual cash bonus, and
(3) incentive awards under our incentive plan. We also provide our named
executive officers with minimal perquisites and personal benefits. In addition,
we ceased making contributions to the 401(k) plan accounts of our named
executive officers during the fourth quarter of fiscal 2009, but continue to
provide them with the ability to contribute a portion of their earnings to our
401(k) plan. Our 401(k) plan is available generally to all of our
employees.
We
believe that the appropriate level of compensation is a combination of what is
competitive in the market and what is appropriate for the individual employee.
The performance of each of our named executive officers is reviewed by our
Compensation Committee in light of our overall company performance and our
prospects. Our Compensation Committee also reviews the components of our named
executive officers’ compensation, including salary, bonus, equity incentive
compensation, unrealized stock option gains (if any), the dollar value to our
named executive officers of any
perquisites, payments on
behalf of our named executive officers under our 401(k) plan and potential
obligations under the retention agreements, to determine whether the level of
total compensation and the mix of the components of compensation are aligned
with our compensation objectives.
Our
Compensation Committee does not assign relative weights to factors considered in
setting total compensation, but rather considers all factors as a whole. In
addition, there is not a pre-established target for the allocation between
either cash and non-cash compensation or short-term and long-term incentive
compensation. Our future compensation policies will be developed in light of our
profitability and with the goal of rewarding members of management for their
contributions to our success.
Base
Salary
The base
salaries for our named executive officers have been set at levels intended to be
competitive with comparable companies in the satellite telecommunications
industry. Since it is the most significant portion of compensation paid to our
named executive officers, the base salaries must be sufficient to attract and
retain qualified executives. In the past, our Compensation Committee and Board
reviewed benchmark data for compensation and employee benefit programs contained
in Culpepper™ Compensation and Benefits Surveys, as published by Culpepper and
Associates, Inc. Culpepper and Associates produces compensation surveys with
data on a full range of employment positions in information technology,
technology and life science organizations. Our Compensation Committee and Board
reviewed surveys which encompassed companies of comparable size and revenue
ranges operating in the Southeastern United States. The information reviewed
indicated that the compensation levels of our named executive officers are
within the lower range of compensation paid by comparable situated
companies.
Annual
base salary adjustments are based on the executive officer’s performance, which
is the primary factor, as well as our overall performance, and the executive
officer’s experience, skills and responsibility. In fiscal 2008, our
Compensation Committee granted base salary increases of 5.5% and 7.3% to Ned L.
Mountain and C. Troy Woodbury, Jr., respectively. No changes were made in the
base salaries paid to our named executive officers in fiscal 2010, 2009, 2007
and 2006.
Bonus
We
currently do not have a cash incentive bonus program. Based on our overall
company performance during the past few years, our named executive officers have
received only minimal year-end holiday bonuses which were identical to the
bonuses paid to all of our other employees. However, no bonuses were paid in
December 2009. In the future, cash incentive bonuses will be subject
to our Compensation Committee’s determination to recommend bonuses to our Board,
if deemed appropriate by the committee.
Long-Term
Incentive Compensation
Although
we primarily rely on cash compensation to reward and retain our named executive
officers, we do occasionally use equity-based incentives to provide long-term
incentives and rewards. Our long-term incentive plan is designed to motivate and
reward our named executive officers for enhancing our profitability and
increasing our stockholder value. Generally, we believe that providing executive
officers with the opportunity to acquire stakes in our growth and prosperity
through grants of equity should enable us to attract and retain executives with
superior management abilities that are essential to our future success.
Historically when such awards were granted, we typically utilized our 1998
Incentive Plan. The 2010 Incentive Plan and the 2011 Incentive Plan, if approved
by our stockholders, will be utilized to grant any future long-term incentive
awards. Awards have historically been made at the discretion of our
Compensation Committee based on our overall company performance and individual
performance. There have been no awards of stock options or common
stock to any of our named executive officers since fiscal 2005 through fiscal
2010. On December 6, 2010, awards were granted pursuant to the 2010
Incentive Plan. See the discussion contained below in the “Summary of
Compensation Table for Fiscal 2009 and 2010” section.
Perquisites
and Personal Benefits
Our named
executive officers receive additional compensation that consists of automobile
allowances. See “Executive Compensation – Summary Compensation Table for Fiscal
2009 and 2010” for the aggregate incremental cost to us during fiscal 2010 of
such benefits.
Retention
Agreements
We have
entered into retention agreements with two of our named executive officers
pursuant to which they will be entitled to receive specified severance payments
in the event of a change of control of our company and the occurrence of certain
other conditions specified in the agreements. See the section entitled
“Retention Agreements” for a discussion of the terms of the retention
agreements. We believe that the retention agreements are necessary to maintain
stability among our executive group and that the terms of the agreements are
reasonable.
Equity
Ownership Guidelines
We have
an ownership philosophy, rather than a formal policy, regarding equity ownership
by our named executive officers. The objectives of our philosophy are to instill
an ownership mindset among our executive officers and to align the interests of
our executive officers with the interests of our stockholders.
Deductibility
of Executive Compensation
As part
of its role, our Compensation Committee will review and consider the
deductibility of executive compensation under Section 162(m) of the
Internal Revenue Code, as amended, which provides that we may not deduct
compensation of more than $1,000,000 that is paid to certain individuals. It is
our Compensation Committee’s policy that the compensation paid to executive
officers qualifies for deductibility under Section 162(m). Due to the
modest levels and types of compensation paid to our named executive officers,
the deductibility of executive compensation under Section 162(m) has not
been a material consideration for our Compensation Committee to
date.
Accounting
for Share-Based Compensation
Share-based
compensation awards are valued in accordance with Financial Standards Accounting
Board ASC Topic 718, “Compensation-Stock Compensation” (“ASC 718”) Assumptions
used in the calculation of these amounts are included in Note 2 Summary of
Significant Account Policies-Share-Based Compensation to our fiscal year 2010
consolidated financial statements, which are included in our Annual Report on
Form 10-K filed with the SEC on November 15, 2010. See the discussions
contained below in the “Summary of Compensation Table for Fiscal 2009 and 2010”
and “Director Compensation Table” sections related to awards granted December 6,
2010.
Summary
Compensation Table for Fiscal 2009 and 2010
The
following table provides certain information for the fiscal years ended
September 3, 2010 and August 28, 2009, concerning compensation earned for
services rendered in all capacities by our principal executive officer,
principal financial officer and other executive officers during the fiscal years
ended September 3, 2010 and August 28, 2009.
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Award
($)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
|
All Other
Compensation
($)
(1)
|
|
|
Total
($)
|
|
|
|
(b)
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
Robert
A. Placek
(2)
,
|
|
2010
|
|
|
98,703
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
899
|
|
|
|
99,602
|
|
Chairman
of the Board
|
|
2009
|
|
|
155,660
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
12,164
|
|
|
|
167,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C.
Troy Woodbury, Jr.
(2)
,
|
|
2010
|
|
|
129,532
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1,333
|
|
|
|
130,865
|
|
President
and Chief Executive Officer
|
|
2009
|
|
|
134,514
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,452
|
|
|
|
143,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
T. Traicoff
(2)
,
|
|
2010
|
|
|
91,910
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
91,910
|
|
Chief
Financial Officer and Treasurer
|
|
2009
|
|
|
95,445
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,949
|
|
|
|
100,394
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ned
L. Mountain
(2)
,
|
|
2010
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
President
and Chief Operating Officer of WCI
|
|
2009
|
|
|
140,193
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,626
|
|
|
|
150,819
|
|
(1)
|
Represents use of company
automobile and amounts contributed by us pursuant to our 401(k) plan as
follows: For 2010 – Robert Placek, $899 for the use of Company automobile;
C. Troy Woodbury, $1,333 for use of Company automobile. For
2009 - Robert Placek $3,638 for the use of company automobile and $8,526
for 401(k) plan; C. Troy Woodbury, Jr. $2,477 for use of company
automobile and $6,975 for 401(k) plan; and Ned L. Mountain $3,357 for use
of company automobile and $7,269 for 401(k)
plan.
|
(2)
|
Effective
October 9, 2009, C. Troy Woodbury, Jr. replaced Robert A. Placek as
President and Chief Executive Officer of Wegener Corporation and
WCI. Mr. Placek remains Chairman of the Board of Wegener
Corporation and WCI. On that same date, James T. Traicoff was
appointed Chief Financial Officer and Treasurer of Wegener
Corporation. Effective October 13, 2009, Ned L. Mountain
resigned as a member of the board of directors of Wegener Corporation and
effective October 16, 2009, resigned as President and Chief Operating
Officer of WCI.
|
The
salary amounts for fiscal 2010 and 2009 reflect a company-wide reduction in paid
working hours by approximately 10% beginning in January 2009. Current annual
base salaries in effect are as follows: Robert A. Placek- $89,539; C. Troy
Woodbury, Jr.- $143,924; and James T. Traicoff- $102,122.
Our named
executive officers are entitled to all benefits generally made available to our
employees, including the eligibility to participate in our 401(k) plan. Our
401(k) plan is intended to be a tax-qualified defined contribution plan under
Section 401(k) of the Internal Revenue Code of 1986, as amended, referred
to in this proxy statement as the Code.
No
options were granted to named executive officers during the fiscal year ended
September 3, 2010 under our 2010 Incentive Plan., and no options were exercised
during fiscal 2010. However, on December 6, 2010, pursuant to
the 2010 Incentive Plan, the Compensation Committee authorized the issuance
to all eligible employees of the Company, including three named executive
officers, common stock options to purchase an aggregate of 563,700 shares of
common stock and issued equally to the four non-employee members of the Board
common stock options to purchase an aggregate of 100,000 shares of common stock.
The stock options are exercisable at an exercise price of $0.125 and in the case
of one named executive officer, at an exercise price of $0.1375. The options
vest upon issuance and expire five years from the date of issuance. In addition,
500,000 shares of restricted common stock were granted to two executive
officers. Such shares may not be sold until a six-month restricted
period expires. C. Troy Woodbury Jr., Chief Executive Officer, was
issued 400,000 shares of restricted common stock and granted a stock option for
100,000 shares of common stock at the exercise price of $0.125 per
share. James T. Traicoff, Chief Financial Officer, was issued 100,000
shares of restricted common stock and granted a stock option for 75,000 shares
of common stock at the exercise price of $0.125 per share. Robert A. Placek,
Chairman of the Board, was granted a stock option for 25,000 shares of common
stock at the exercise price of $0.1375 per share. The aggregate grant date fair
value of the awards granted to each named executive officer were calculated in
accordance with ASC.718 as follows: C. Troy Woodbury, Jr. - common stock award
$7,300, restricted stock award $50,000; James Traicoff - common stock award
$5,475, restricted stock award $12,500; and Robert A. Placek - common stock
award $1,750. In addition, a tax reimbursement bonus related to the restricted
stock awards was granted to C. Troy Woodbury, Jr. in the amount of $24,939 and
to James Traicoff in the amount of $7,380.
Outstanding
Equity Awards at 2010 Fiscal Year-End
The
following table provides certain information concerning the outstanding equity
awards for each named executive officer as of September 3, 2010.
|
|
Option Awards
(1)
|
|
Stock
Awards
|
|
Name
|
|
Number
of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
|
|
Number
of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
|
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
($)
|
|
(a)
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
(f)
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
Robert A. Placek
(2)
|
|
|
50,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.21
|
|
12/15/2013
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
153,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.29
|
|
7/22/2015
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
84,150
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.00
|
|
1/22/2012
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C.C. Troy Woodbury, Jr.
(2)
|
|
|
25,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.21
|
|
12/15/2013
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
69,575
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1.00
|
|
1/22/2012
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
20,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
.84
|
|
3/04/2012
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
All options are 100%
vested.
|
(2)
|
Effective
October 9, 2009, C. Troy Woodbury, Jr. replaced Robert A. Placek as
President and Chief Executive Officer of Wegener Corporation and
WCI. Mr. Placek remains Chairman of the Board of Wegener
Corporation and WCI. On that same date, James T. Traicoff was
appointed Chief Financial Officer and Treasurer of Wegener
Corporation.
|
Retention
Agreements
On
May 2, 2003, following the approval and recommendation of a committee of
our Board consisting solely of independent directors, we entered into retention
agreements with each named executive officer and certain other key employees.
The retention agreements entitle our named executive officers, upon the
occurrence of certain events, to certain severance payments. Under the terms of
the retention agreements, a change in control generally means the
following:
|
•
|
any person who is or becomes the
beneficial owner of our securities representing 20% of more of the
combined voting power of our then outstanding securities;
or
|
|
•
|
during any period of two
consecutive years, individuals who at the beginning of such period
constitute our board of directors and any new director whose election by
our board of directors or nomination by our stockholders was approved by a
vote of at least two-thirds of the directors then still in office who
either were director at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason
to constitute a majority of our board of directors;
or
|
|
•
|
the consummation of a merger or
statutory share exchange of us with any other corporation, other than
(1) a merger or statutory shares exchange that would result in our
voting securities outstanding immediately prior thereto continuing to
represent, in combination with the ownership of any trustee or other
fiduciary holding securities under one of our employee benefit plans, at
least 75% of the combined voting power of our voting securities or such
surviving entity outstanding immediately after such merger or statutory
share exchange, or (2) a merger of statutory share exchange effected
to implement our recapitalization in which no person acquires more than
50% of the combined voting power of our then outstanding securities;
or
|
|
•
|
our stockholders approve a plan
for our complete liquidation or an agreement for the sale or disposition
by us of all or substantially all of our
assets.
|
Under the
terms of the retention agreements, a potential change in control generally means
the following:
|
•
|
we
enter into an agreement, the consummation of which would result in the
occurrence of a change in control;
|
|
•
|
we
or any person publicly announce an intention to take or to consider taking
action which, if consummated, would constitute a change in
control;
|
|
•
|
any
person who is or becomes the beneficial owner of our securities
representing 10% or more of the combined voting power of our then
outstanding securities, increases such person’s beneficial ownership of
such securities by 5% or more over the percentage so owned by such person
on the date of the retention agreements;
or
|
|
•
|
our
board of directors adopts a resolution to the effect that, for purposes of
the retention agreements, a potential change in control has
occurred.
|
Upon the
termination of the executive’s employment following a change in control we must
pay the executive certain severance payments (as discussed below), unless the
termination is (1) by us for cause, (2) by reason of death, disability
or retirement, or (3) by the executive without good reason. If a
termination occurs prior to a change in control, but following a potential
change in control in contemplation of and relating to such change in control,
such termination shall be deemed to have followed a change in control and to
have been (1) by us without cause if the executive’s employment is
terminated without cause at the direction of such person, or (2) by the
executive with good reason if the executive terminates his employment with good
reason and the act which constitutes good reason occurs following such potential
change in control and at the direction of such person.
On
September 29, 2008, we entered into an agreement, referred to in this proxy
statement as the amended agreement, with one of our named executive officers, C.
Troy Woodbury, Jr., who at that time was our Chief Financial Officer but is now
our Chief Executive Officer. On September 29, 2008, we also entered into an
agreement, referred to in this proxy statement as the new agreement, with one of
our named executive officers, Robert A. Placek, who at that time was President
and Chief Executive Officer of Wegener Corporation and WCI. Under the new
agreement, the retention agreement with Mr. Placek entered into on
May 2, 2003 was terminated. The new agreement, however, with Mr. Placek was
itself terminated in connection with his resignation as President and Chief
Executive Officer of Wegener Corporation and WCI on October 9,
2009.
The
amended agreement with Mr. Woodbury amends provisions of the retention agreement
entered into on May 2, 2003. Under the amended agreement, Mr. Woodbury
has agreed to: (1) reduce the effective term of his retention agreement
from 36 months to 24 months following a change in control; (2) resign from
our board of directors or any board of directors of any of our subsidiaries,
upon termination of employment and entitlement of payments under his retention
agreements, if requested to do so by the Chairman of our board of directors;
(3) reduce the size of his severance payment entitlement from 2.5 times
annual base salary to 1.5 times annual base salary; (4) eliminate his
entitlement to have us buy his options upon termination; and (5) reduce his
period of entitlement to certain fringe benefits from 30 months to 18 months
following termination of employment. All other provisions of the retention
agreement remain unchanged.
The
severance payments under the amended agreement for Mr. Woodbury include the
following:
|
•
|
In lieu of further salary
payments for periods subsequent to the date of termination and in lieu of
any severance benefit otherwise payable, we must pay to the executive a
lump sum severance payment, in cash, equal to the sum of: (1) the
higher of (a) 1.5 times the executive’s annual base salary in effect
immediately prior to the occurrence of the event upon which the notice of
termination is based, or (b) 1.5 times the average of the executive’s
annual base salary for the three years immediately prior to the occurrence
of the event upon which the notice of termination is based; and
(2) the higher of (a) 1.5 times the amount paid to the executive
as an annual discretionary bonus in the year preceding the year in which
the date of termination occurs, or (b) 1.5 times the average annual
discretionary bonus paid to the executive in the three years preceding
that in which the date of termination occurs;
and
|
|
•
|
A lump sum amount, in cash, equal
to the sum of (1) any annual discretionary bonus which has been
allocated or awarded to the executive for a completed fiscal year
preceding the date of termination but has yet been paid, and (2) a
pro rata portion of an annual discretionary bonus for the fiscal year in
which the date of termination occurs;
and
|
|
•
|
For an 18 month period after the
date of termination, we must arrange to provide the executive with life,
disability, accident and health insurance benefits substantially similar
to those which the executive is receiving immediately prior to the notice
of termination.
|
The
severance payments under the agreement for James T. Traicoff, our Chief
Financial Officer and Secretary, include the following:
|
•
|
In lieu of further salary
payments for periods subsequent to the date of termination and in lieu of
any severance benefit otherwise payable, we must pay to the executive a
lump sum severance payment, in cash, equal to the sum of: (1) the
higher of (a) 1.0 times the executive’s annual base salary in effect
immediately prior to the occurrence of the event upon which the notice of
termination is based, or (b) 1.0 times the average of the executive’s
annual base salary for the three years immediately prior to the occurrence
of the event upon which the notice of termination is based; and
(2) the higher of (a) 1.0 times the amount paid to the executive
as an annual discretionary bonus in the year preceding the year in which
the date of termination occurs, or (b) 1.0 times the average annual
discretionary bonus paid to the executive in the three years preceding
that in which the date of termination occurs;
and
|
|
•
|
A lump sum amount, in cash, equal
to the sum of (1) any annual discretionary bonus which has been
allocated or awarded to the executive for a completed fiscal year
preceding the date of termination but has yet been paid, and (2) a
pro rata portion of an annual discretionary bonus for the fiscal year in
which the date of termination occurs;
and
|
|
•
|
For a 12 month period after the
date of termination, we must arrange to provide the executive with life,
disability, accident and health insurance benefits substantially similar
to those which the executive is receiving immediately prior to the notice
of termination.
|
The
payments must be made not later than the fifteenth day following the date of
termination. In the event that any payment or benefit received by the executive
in connection with and contingent on a change of control or the termination of
the executive’s employment would not be deductible by us as a result of
Section 280G of the Code, then, to the extent necessary to make the
remaining portion of the payments deductible, the cash severance payments, to
the extent still unpaid, will be reduced, all other non-cash severance payments,
to the extent still unfurnished, will be reduced, and the executive will have no
right to receive any payment or benefit in excess of those payments or benefits
provided as reduced. We must also pay to the executive all legal and accounting
fees and expenses incurred by the executive as a result of a termination that
entitles the executive to severance payments.
Assuming
(1) a change of control occurred on September 3, 2010, (2) the
termination was by us without cause, (3) the termination was not by reason
of death, disability or retirement, and (4) the termination was not by the
named executive officer without good reason, the estimated payments would have
been as follows:
Name
|
|
Lump Sum for
Salary
($)
|
|
|
Lump Sum for Bonus
Amounts
($)
|
|
|
Insurance
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
C.
Troy Woodbury, Jr.
|
|
|
215,886
|
|
|
|
250
|
|
|
|
14,988
|
|
|
|
231,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
T. Traicoff
|
|
|
102,122
|
|
|
|
167
|
|
|
|
10,540
|
|
|
|
112,829
|
|
Director
Compensation Table
The
following table provides certain information concerning compensation for each
non-employee director during the fiscal year ended September 3,
2010. Robert A. Placek and C. Troy Woodbury, Jr., both of whom are
members of our Board, have been omitted from this table since they receive no
compensation for serving on our Board.
|
|
Fees Earned
or
Paid in
Cash
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)
(1)(2)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
(b)
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
Thomas
G. Elliot
|
|
|
7,800
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen
J. Lococo
|
|
|
9,600
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Phylis
A. Eagle-Oldson
|
|
|
9,300
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
9,300
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey
J. Haas
|
|
|
10,200
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,200
|
|
(1)
|
Refer to “Financial Statements –
Notes to Consolidated Financial Statements” included in our annual report
on Form 10-K filed on November 15, 2010 for the relevant assumptions
used to determine the valuation of our option
awards.
|
(2)
|
The following are the aggregate
number of options awards outstanding that have been granted to each of our
directors as of September 3, 2010: Mr. Elliot 313,800;
Mr. Lococo 6,000; Ms. Eagle – Oldson 22,000; Mr. Haas
6,000.
|
Each
non-employee director is paid an annual retainer of $5,000, and for each meeting
of our Board or any committee of our Board on which a non-employee director
serves, such director is paid $1,000 for attendance in person and $300 for
attendance by telephone conference. In addition, non-employee directors receive
$300 for attending, whether in person or telephonically, any meeting of any
working group of any committee of our Board. Directors are also
reimbursed for reasonable out-of-pocket expenses. Pursuant to our 1998 Incentive
Plan, each non-employee director has in the past received an option to purchase
3,000 shares of common stock on the last business day of December of each year
at an exercise price equal to the fair market value on such date. These options
are exercisable for ten years. On January 1, 2008, our 1998 Incentive Plan
expired. The 2010 Plan does not include such a provision.
On
December 6, 2010, pursuant to the 2010 Incentive Plan, the Compensation
Committee authorized the issuance of common stock options to purchase 25,000
shares of stock to each of the four non-employee directors. The stock options
are exercisable at an exercise price of $0.125, vest upon issuance and expire
five years from the date of issuance. The aggregate grant date fair value
of each of the awards was $1,825.
TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN
CONTROL
PERSONS
David M.
Placek is a Manager of Embedded Development employed by WCI. David M. Placek is
the son of Robert A. Placek, Chairman of our Board and our former President and
Chief Executive Officer. During the fiscal year ended September 3, 2010, David
M. Placek received the following compensation from WCI: base annual salary of
$81,875.
In
accordance with our Audit Committee charter, our Audit Committee is responsible
for reviewing and approving any transactions with related persons. Any financial
transaction with any officer or director, or any immediate family member of any
officer or director, would need to be approved by our Audit Committee prior to
our company entering into such transaction. To assist us in identifying any
transactions with related persons, each year we submit and require our officers
and directors to complete questionnaires identifying any transactions with us in
which any of our officers or directors, or their immediate family members, have
an interest.
Notwithstanding
anything to the contrary set forth in any of our previous filings under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, that might incorporate future filings, including this proxy statement,
in whole or in part, the Audit Committee Report, and the Compensation and
Incentive Plan Committee Report shall not be incorporated by reference into any
such filings.
AUDIT
COMMITTEE REPORT
For the
fiscal year ended September 3, 2010, our Audit Committee has reviewed and
discussed the audited financial statements with management, has discussed with
the independent registered public accountants the matters required to be
discussed pursuant to Statement on Auditing Standards No. 61, as amended
(Codification of Statements on Auditing Standards, AU 380), as adopted by the
Public Company Accounting Oversight Board in Rule 3200T and has received
the written disclosures and a letter from the independent accountants required
by Independence Standards Board Standard No. 1 (Independence Discussions
with Audit Committees). The Audit Committee has discussed with the independent
accountants the independence of the independent registered public accountants.
Based on the foregoing meetings, reviews and discussions, the Audit Committee
recommended to the Board that the audited financial statements for fiscal 2010
be included in our annual report on Form 10-K for filing with the
SEC.
Phylis A.
Eagle-Oldson, Chairperson
Thomas G.
Elliot
Stephen
J. Lococo
Jeffrey
J. Haas
COMPENSATION
AND INCENTIVE PLAN COMMITTEE REPORT
The
compensation and incentive plan committee is responsible for the review and
determination of the compensation of our Chief Executive Officer and our other
executive officers.
The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis section of this proxy statement with management. Based upon such
review and discussion, the compensation and incentive plan committee recommended
to our Board that the Compensation Discussion and Analysis be included in this
proxy statement.
Jeffery J
Haas, Chairman
Phylis A.
Eagle-Oldson
Steven J.
Lococo
AVAILABILITY
OF ANNUAL REPORT TO STOCKHOLDERS AND
REPORT
ON FORM 10-K
Additional
information concerning us, including our financial statements, is provided in
our 2010 annual report to stockholders (which includes our annual report on Form
10-K) that accompanies this proxy statement. Our annual report on Form 10-K for
the year ended September 3, 2010, as filed with the SEC, is available to
stockholders who make a written request therefore to Mr. James T.
Traicoff, Chief Financial Officer, at our offices located at 11350 Technology
Circle, Johns Creek, Georgia 30097. Copies of exhibits filed with that report or
referenced therein will be furnished to stockholders of record upon request and
payment of our expenses in furnishing such documents. These documents and other
information may also be accessed from our website at
www.wegener.com
.
STOCKHOLDERS’
PROPOSALS FOR 2012 ANNUAL MEETING
Stockholders
may submit proposals appropriate for stockholder action at our annual meeting
consistent with the regulations of the SEC. Proposals by stockholders intended
to be presented at the 2012 annual meeting must be received by us no later than
August 20, 2011 in order to be included in our proxy materials for that
meeting. Such proposals should be directed to Wegener Corporation, Attention:
Corporate Secretary, 11350 Technology Circle, Johns Creek, Georgia 30097. In
connection with the 2011 Annual Meeting, if we did not receive notice of a
matter or proposal to be considered by August 20, 2010, then the persons
appointed by our Board to act as the proxies for such annual meeting (named in
the form of proxy) will be allowed to use their discretionary voting authority
with respect to any such matter or proposal at the annual meeting, if such
matter or proposal is raised at that annual meeting. Any such proposals must
comply in all respects with the rules and regulations of the SEC.
GENERAL
The cost
of this proxy solicitation will be paid by us. Solicitations will be made by
mail but in some cases may also be made by telephone or personal call of our
officers, directors or regular employees who will not be specially compensated
for such solicitation. We will also pay the cost of supplying necessary
additional copies of the solicitation material and our annual report to
stockholders for beneficial owners of shares held of record by brokers, dealers,
banks and voting trustees and their nominees, and upon request, we will pay the
reasonable expenses of record holders for mailing such materials to the
beneficial owners.
Management
knows of no other matters to be acted upon at the meeting. However, if any other
matter is lawfully brought before the meeting, the shares covered by your proxy
will be voted thereon in accordance with the best judgment of the persons acting
under such proxy.
In order
that your shares may be represented if you do not plan to attend the meeting,
and in order to assure a required quorum, please sign, date and return your
proxy promptly. In the event you are able to attend, we will, if you request,
cancel the proxy.
|
By
Order of the Board of Directors,
|
|
|
|
/s/ James T. Traicoff
|
|
James
T. Traicoff
|
|
Secretary
|
December 21
,
2010
APPENDIX
A
WEGENER
CORPORATION
2011
INCENTIVE PLAN
EFFECTIVE
DATE: JANUARY 1, 2011
WEGENER
CORPORATION
2011
INCENTIVE PLAN
EFFECTIVE:
JANUARY 1, 2011
Table of
Contents
Section
|
|
|
|
Page
|
1.
|
|
Purpose
|
|
A-3
|
|
|
|
|
|
2.
|
|
Definitions
|
|
A-3
|
|
|
|
|
|
3.
|
|
Shares Subject to the
Plan
|
|
A-5
|
|
|
|
|
|
4.
|
|
Grant of Awards and Award
Agreements
|
|
A-6
|
|
|
|
|
|
5.
|
|
Stock Options and Stock
Appreciation Rights
|
|
A-6
|
|
|
|
|
|
6.
|
|
Performance
Units
|
|
A-7
|
|
|
|
|
|
7.
|
|
Restricted
Stock
|
|
A-8
|
|
|
|
|
|
8.
|
|
Deferred
Stock
|
|
A-9
|
|
|
|
|
|
9.
|
|
Certificates for Awards of
Stock
|
|
A-9
|
|
|
|
|
|
10.
|
|
Beneficiary
|
|
A-10
|
|
|
|
|
|
11.
|
|
Administration of the
Plan
|
|
A-10
|
|
|
|
|
|
12.
|
|
Amendment or
Discontinuance
|
|
A-11
|
|
|
|
|
|
13.
|
|
Adjustments in Event of Change in
Common Stock
|
|
A-12
|
|
|
|
|
|
14.
|
|
Change in Control
Event
|
|
A-12
|
|
|
|
|
|
15.
|
|
Miscellaneous
|
|
A-13
|
WEGENER
CORPORATION
2011
INCENTIVE PLAN
EFFECTIVE
DATE: JANUARY 1, 2011
The
Wegener Corporation 2011 Incentive Plan has been adopted for the purpose of
attracting and retaining persons of ability as directors, employees or
consultants or advisors of Wegener Corporation and its subsidiaries, motivate
and reward good performance, encourage such employees to continue to exert their
best efforts on behalf of the Company and its subsidiaries and provide
opportunities for stock ownership by such employees in order to increase their
proprietary interest in the Company by providing incentive awards to Key
Employees (as hereinafter defined), whose responsibilities and decisions
directly affect the performance of the Company and its subsidiaries. Such
incentive awards may, in the discretion of the Board or Committee, consist of
common stock of the Company (subject to such restrictions as the Board or
Committee may determine or as provided herein), performance units or stock
appreciation rights payable in such stock or cash, or incentive or nonqualified
stock options to purchase such stock, or any combination of the foregoing, all
as the Board or Committee may determine.
When used
herein, the following terms shall have the following meanings:
“Award”
means an award granted to any Eligible Participant or Key Employee in accordance
with the provisions of the Plan in the form of Options, SARS, Restricted Stock,
Deferred Stock or Performance Units, or any combination of the
foregoing.
“Beneficiary”
means the beneficiary or beneficiaries designated pursuant to Section 10 to
receive the amount, if any, payable under the Plan upon the death of an Eligible
Participant or Key Employee.
“Board”
means the Board of Directors of the Company.
“Change
in Control Event” shall be as defined in Code §409A (as such Section shall be
amended and further explained from time to time), which generally provides as
set forth below.
(a)
Change in Ownership
.
The acquisition by any individual, entity or group (a “Person”) of ownership of
stock of the Company that, together with stock held by such Person, constitutes
more than 50% of the total fair market value or total voting power of the stock
of the Company. However, if any Person is considered to own more than 50% of the
total fair market value or total voting power of the stock of the Company, the
acquisition of additional stock by the same Person is not considered to cause a
change in ownership of the Company (or to cause a change in the effective
control of the Company). An increase in the percentage of stock owned by any one
Person as a result of a transaction in which the Company acquires its stock in
exchange for property will be treated as an acquisition of stock for purposes of
this paragraph. This paragraph applies only when there is a transfer of stock of
the Company (or issuance of stock of the Company) and stock in the Company
remains outstanding after the transaction.
(b)
Change in Effective
Control
. (i) The acquisition by any individual, entity or group
during the 12-month period ending on the date of the most recent acquisition by
such Person, of ownership of stock of the Company possessing 35% or more of the
total voting power of the stock of the Company; or (ii) the replacement of
a majority of members of the Board during any 12-month period by directors whose
appointment or election is not endorsed by two-thirds (
2
/
3
) of the members of the
Board prior to the date of the appointment or election.
A change
in effective control also may occur in any transaction in which either of the
two corporations involved in the transaction has a “Change in Ownership” or
“Change in Ownership of a Substantial Portion of the Company’s Assets.” If any
one Person is considered to effectively control the Company, the acquisition of
additional control of the Company by the same Person is not considered to cause
a change in the effective control of the Company (or to cause a “Change in
Ownership” of the Company within the meaning of this Section).
(c)
Change in Ownership of a
Substantial Portion of Assets
. The acquisition by any Person during the
12-month period ending on the date of the most recent acquisition by such
Person, of assets from the Company that have a total gross fair market value
equal to or more than 40% of the total gross fair market value of all of the
assets of the Company immediately prior to such acquisition(s). For this
purpose, “gross fair market value” means the value of the assets of the Company,
or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.
In the
event of any conflict between the summary contained in this Section and the
definition of “Change in Control” as defined in Code Section 409A, Code
Section 409A shall govern. No Change in Control Event shall be deemed to
have occurred in the event of a transfer to an entity that is controlled by the
shareholders of the transferring corporation immediately after the transfer,
within the meaning of IRS Notice 2005-1, Q&A-14(b).
“Code”
means the Internal Revenue Code of 1986, as now in effect or as hereafter
amended (All citations to sections of the Code are to such sections as they may
from time to time be amended or renumbered).
“Committee”
means the Committee, if any, appointed by the Board pursuant to Section 11.
If no Committee is appointed by the Board, the Board shall function as and in
place of the Committee.
“Company”
means Wegener Corporation and its successors and assigns.
“Deferred
Stock” means Stock credited to an Eligible Participant or Key Employee under the
Plan subject to the requirements of Section 8 and such other restrictions
as the Committee deems appropriate or desirable.
“Eligible
Participant(s)” shall mean directors, officers, Key Employees of the Company and
its subsidiaries, consultants, advisors and other persons who may not otherwise
be eligible to receive qualified incentive stock options under Section 422
of the Code.
“Fair
Market Value” shall mean:
(a) if
the Stock is actively traded on any national securities exchange, the closing
price at which sales of Stock shall have been sold on the most recent trading
date immediately prior to the date of determination, as reported by any such
exchange selected by the Committee on which the shares of Stock are then traded;
or
(b) if
the shares of Stock are not actively traded on any such national securities
exchange, the average of the closing high “bid” and low “asked” prices for the
shares of Stock on the over-the-counter market on the most recent trading date
immediately prior to the determination date as determined by the Committee and
reported by such system; or
(c)
if there are no “bid” and “asked” prices available or if the shares of Stock are
not traded on the over-the-counter market, the fair market value of a share of
Stock as determined in good faith by the Committee in compliance with Code
Section 409A taking into account such relevant facts and circumstances
deemed by the Committee to be material to the value of the Stock in the hands of
the Eligible Participant or Key Employee, which may include opinions or reports
prepared by independent experts;
provided
,
however
, that at the
time of grant of any Award other than an incentive stock option, the Committee,
in its sole discretion, may elect to, and if it so elects, shall irrevocably
specify its commitment to, determine Fair Market Value for all purposes under
the Plan with respect to such Award, based on the “average selling price” of the
Stock, within the meaning of Code Section 409A, as of the date of
determination and a period of up to nine trading days immediately preceding such
date, which period must be specified in the Award.
Notwithstanding
the above, Fair Market Value of a share of Stock shall be determined in
accordance with all applicable laws, including in the case of incentive stock
options the valuation principles described in Code Section 422 and in all
cases in accordance with Code Section 409A.
“Key
Employee” means an officer or other key employee of any Participating Company
who, in the judgment of the Committee, is responsible for or contributes to the
management, growth or profitability of the business of any Participating
Company.
“Option”
means an option to purchase Stock, including Restricted Stock but not Deferred
Stock, if the Committee so determines, subject to the applicable provisions of
Section 5 and awarded in accordance with the terms of the Plan and which
may be an incentive stock option qualified under Section 422 of the Code or
a nonqualified stock option.
“Participating
Company” means the Company or any subsidiary or other affiliate of the Company;
provided
,
however
, for
incentive stock options only, “Participating Company” means the Company or any
corporation which at the time such option is granted under the Plan qualifies as
a subsidiary of the Company under the definition of “subsidiary corporation”
contained in Section 425(f) of the Code; and
provided further
, for
nonqualified stock options only, “Participating Company” means the Company or
any other corporation if the Company is an “eligible issuer of service recipient
stock” within the meaning of Treasury Regulation
Section 1.409A-1(b)(5)(iii)(E) with respect to the Eligible Participants
and/or Key Employees of such corporation.
“Non-Employee
Director” shall mean each such person who is a member of the Board of Directors
of the Company but who is not a full-time employee of the Company.
“Performance
Unit” means a performance unit subject to the requirements of Section 6 and
awarded in accordance with the terms of the Plan.
“Plan”
means the Wegener Corporation 2011 Incentive Plan, as the same may be amended,
administered or interpreted from time to time.
“Restricted
Stock” means Stock delivered under the Plan subject to the requirements of
Section 7 and such other restrictions as the Committee deems appropriate or
desirable; provided, however, in all events, restrictions placed on such
Restricted Stock shall result in the Restricted Stock being substantially
nonvested within the meaning of Treasury Regulation
Section 1.83-3(b).
“SAR”
means a stock appreciation right subject to the appropriate requirements under
Section 5 and awarded in accordance with the terms of the
Plan.
“Stock”
means the $.01 par value common stock of the Company.
“Total
Disability” means an Eligible Participant or Key Employee is, by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than twelve (12) months, receiving income replacement benefits for a period
of not less than three (3) months under an accident and health plan
covering employees of the Company.
3.
|
Shares
Subject to the Plan
.
|
The
aggregate number of shares of Stock which may be awarded under the Plan or
subject to purchase by exercising an Option shall not exceed one million two
hundred fifty thousand (1,250,000) shares. The maximum total number of
shares of Restricted Stock, Deferred Stock and/or Performance Units that may be
granted at full value shall not exceed five hundred thousand
(500,000) shares. Such shares shall be made available from authorized and
unissued shares. No repurchased shares may be issued or delivered under the
Plan. The Committee may, in its discretion, decide to award other securities
issued by the Company that are convertible into Stock or make such other
securities subject to purchase by an Option, in which event the maximum number
of shares of Stock into which such other securities may be converted shall be
used in applying the aggregate share limit under this Section 3 and all
provisions of the Plan relating to Stock shall apply with full force and effect
with respect to such convertible securities. If any shares of Stock awarded or
subject to purchase by exercising an Option under the Plan are not delivered or
are reacquired by the Company, for reasons including, but not limited to, a
forfeiture of Restricted Stock or Deferred Stock or termination, expiration or a
cancellation with the consent of a participant of an Option, SAR or a
Performance Unit, such shares of Stock shall again become available for award
under the Plan;
provided
,
however
, that if the
Option price of any Option granted under the Plan is satisfied by tendering
shares of the Company’s Stock to the Company (by either actual delivery or by
attestation) or if shares of the Company’s Stock are tendered or are withheld
upon the exercise of the Option to satisfy any applicable tax withholding, such
tendered or withheld Stock will not be available for re-issuance under the
Plan.
4.
|
Grant
of Awards and Award Agreements
.
|
(a)
Subject to the provisions of the Plan and compliance with Code
Section 409A, the Committee shall, (i) determine and designate from
time to time those Eligible Participants and Key Employees or groups of Eligible
Participants and Key Employees to whom Awards are to be granted;
(ii) determine the form or forms of Award to be granted to any Eligible
Participant or Key Employee; (iii) determine the amount or number of shares
of Stock, including Restricted Stock or Deferred Stock if the Committee so
determines, subject to each Award; (iv) determine the terms and conditions
of each Award; (v) determine whether and to what extent Eligible
Participants and Key Employees shall be allowed or required to defer receipt of
any Awards or other amounts payable under the Plan to the occurrence of a
specified date or event;
provided
,
however
, that no
Award shall be granted after the expiration of ten years from the effective date
of the Plan.
(b) Each
Award granted under the Plan shall be evidenced by a written Award Agreement, in
a form approved by the Committee. Such agreement shall be subject to and
incorporate the express terms and conditions, if any, required under the Plan or
as required by the Committee for the form of Award granted and such other terms
and conditions as the Committee may specify.
5.
|
Stock
Options and Stock Appreciation
Rights
.
|
(a) With
respect to Options and SARS, the Committee shall (i) authorize the grant of
incentive stock options, nonqualified stock options, SARs or a combination of
incentive stock options, nonqualified stock options and SARS;
(ii) determine the number of shares of Stock subject to each Option or the
number of shares of Stock that shall be used to determine the value of an SAR;
(iii) determine whether such Stock shall be Restricted Stock (but not
Deferred Stock), in the Committee’s discretion; (iv) determine the time or
times when and the manner in which each Option shall be exercisable and the
duration of the exercise period; and (v) determine whether or not all or
part of each Option may be canceled by the exercise of an SAR;
provided
,
however
, that
(A) no Option shall be granted after the expiration of ten years from the
effective date of the Plan and (B) the aggregate Fair Market Value
(determined as of the date an Option is granted) of the Stock (disregarding any
restrictions in the case of Restricted Stock) for which incentive stock options
granted to any Key Employee under this Plan may first become exercisable in any
calendar year shall not exceed $100,000. The Committee’s determinations made
pursuant to (ii) through (v) of this paragraph shall be set forth in
the Award Agreement granting any Option.
(b)
The exercise period for a nonqualified stock option shall not exceed ten years
and one day from the date of grant, and the exercise period for an incentive
stock option or SAR, including any extension which the Committee may from time
to time decide to grant, shall not exceed ten years from the date of grant;
provided
,
however
, that, in the
case of an incentive stock option granted to a Key Employee who, at the time of
grant, owns stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company (a “Ten Percent Stockholder”), such
period, including extensions, shall not exceed five years from the date of
grant.
(c) The
Option or SAR exercise price per share shall be determined by the Committee at
the time any Option is granted and set forth in the Award Agreement granting
such Option and shall be not less than (i) in the case of incentive stock
options and any tandem SARs, 100% of the Fair Market Value, or in the case of an
incentive stock option and any tandem SARs granted to a Ten Percent Stockholder,
110% of the Fair Market Value, on the date the Option and any tandem SARs are
granted; or (ii) in the case of any other Options or SARS, at least 100% of
Fair Market Value, disregarding any restrictions in the case of Restricted
Stock, on the date the Option or SAR is granted.
(d) No
part of any Option or SAR may be exercised until (i) the Eligible
Participant or Key Employee who has been granted the Award shall have remained
in the employ or service of a Participating Company for such period, if any,
after the date on which the Option or SAR is granted, as the Committee may
specify, or (ii) achievement of such performance or other criteria, if any,
by the Eligible Participant or Key Employee, the Company or any subsidiary,
affiliate or division of the Company, as the Committee may specify, and the
Committee may further require exercisability in installments.
(e)
Subject to Section 10(c), except as otherwise provided in the Plan, the
purchase price of the shares as to which an Option shall be exercised shall be
paid to the Company at the time of exercise in the form specified in the Award
Agreement covering such Option, which may provide for payment either in cash or
in such other consideration as the Committee deems appropriate, including Stock,
or, with respect to nonqualified options, Restricted Stock (but not Deferred
Stock), already owned by the optionee, having a total Fair Market Value equal to
the purchase price, or a combination of cash and such other consideration having
a total Fair Market Value equal to the purchase price;
provided
,
however
, that if
payment of the exercise price is made in whole or in part in the form of
Restricted Stock, the Stock received upon the exercise of the Option shall be
Restricted Stock, as the case may be, at least with respect to the same number
of shares and subject to the same restrictions or other limitations as the
Restricted Stock paid on the exercise of the Option.
(f) (i)
If a Key Employee who has been granted an Option or SAR dies (A) while an
employee of any Participating Company, or (B) within three months after
termination of his or her employment because of his or her Total Disability, his
or her Options or SARs may be exercised, to the extent that the Key Employee
shall have been entitled to do so on the date of his or her death or such
termination of employment, by the person or persons to whom the rights under the
option or SAR pass by will, or if no such person has such right, by his or her
executors or administrators, at any time, or from time to time, within 12 months
after the date of death or within such other period, and subject to such terms
and conditions as the Committee may specify, but not later than the expiration
date specified in Section 5(b) above.
(ii) If
the Key Employee’s employment by any Participating Company terminates because of
his or her Total Disability and such participant has not died within the
following three months, he or she may exercise his or her Options or SARS, to
the extent that he or she shall have been entitled to do so at the date of the
termination of his or her employment, at any time, or from time to time, within
12 months after the date of the termination of his or her employment within such
other period, and subject to such terms and conditions as the Committee may
specify, but not later than the expiration date specified in Section 5(b)
above.
(iii) If
the Key Employee’s employment terminates for any other reason, he or she may
exercise his or her Options or SARs to the extent that he or she shall have been
entitled to do so at the date of the termination of his or her employment, at
any time, or from time to time, within three months after the date of the
termination of his or her employment or within such other period, and subject to
such terms and conditions as the Committee may specify, but not later than the
expiration date specified in Section 5(b) above.
(g) No
Option or SAR granted under the Plan shall be transferable other than by will or
by the laws of descent and distribution. During the lifetime of the optionee, an
Option shall be exercisable only by him or her.
(h) With
respect to an incentive stock option, the Committee shall specify such terms and
provisions as the Committee may determine to be necessary or desirable in order
to qualify such Option as an incentive stock option within the meaning of
Section 422 of the Code.
(i) Upon
exercise of an SAR, the Eligible Participant or Key Employee shall be entitled,
subject to such terms and conditions as the Committee may specify, to receive
upon exercise thereof the excess of (i) the Fair Market Value of a
specified number of shares of Stock at the time of exercise, as determined by
the Committee, over (ii) a specified amount set forth in the Award
Agreement granting such SAR which shall not, subject to Section 5(j), be
less than the Fair Market Value of such specified number of shares of Stock at
the time the SAR is granted. Upon exercise of an SAR, payment of such excess
shall be made as the Committee shall specify in the Award Agreement at the time
of the grant of the SAR (A) in cash, (B) through the issuance or
transfer of whole shares of Stock, including Restricted Stock (but not Deferred
Stock), with a Fair Market Value, disregarding any restrictions in the case of
Restricted Stock, at such time equal to any such excess, or (C) a
combination of cash and shares of Stock with a combined Fair Market Value at
such time equal to any such excess, all as determined by the Committee;
provided
,
however
, a fractional
share of Stock shall be paid in cash equal to the Fair Market Value of the
fractional share of Stock, disregarding any restrictions in the case of
Restricted Stock, at such time. If the full amount of such value is not paid in
Stock, then the shares of Stock representing such portion of the value of the
SAR not paid in Stock shall again become available for award under the
Plan.
(j)
If the Award granted to an Eligible Participant or Key Employee allows such
person to elect to cancel all or any portion of an unexercised option by
exercising a related SAR, then the Option price per share of Stock shall be used
as the specified price in Section 5(i), to determine the value of the SAR
upon such exercise, and, in the event of the exercise of such SAR, the Company’s
obligation in respect of such Option or such portion thereof will be discharged
by payment of the SAR so exercised. Any shares of Stock reserved but not
required for such exercise shall be cancelled and shall not be added back into
the total shares available for Awards under the Plan. Any such SAR shall be
transferable only by will or by the laws of descent and distribution. During the
lifetime of the optionee, such SAR shall be exercisable only by him or
her.
6.
Performance
Units
.
(a) Upon
the Award of a Performance Unit to an Eligible Participant or a Key Employee,
the Committee shall determine a performance period (the “Performance Period”) of
one or more years and shall determine the performance objectives for such Award
of a Performance Unit. Performance objectives may vary from Eligible
Participant/Key Employee to Eligible Participant/Key Employee and shall be based
upon such performance criteria or combination of factors as the Committee may
deem appropriate, including, but not limited to, minimum earnings per share,
return on equity or performance by a subsidiary or division of the Company;
provided, however, in all events such performance criteria shall constitute a
substantial risk of forfeiture within the meaning of Code Section 409A.
Performance Periods may overlap and Eligible Participants and/or Key Employees
may participate simultaneously with respect to Performance Units for which
different Performance Periods are prescribed. The applicable Performance Period
and performance objectives for such Award shall be specified in the written
Award Agreement granting such Performance Unit.
(b) Upon
the Award of a Performance Unit to an Eligible Participant or a Key Employee at
the beginning of a Performance Period, the Committee shall determine for each
Eligible Participant or Key Employee or group of Eligible Participants and/or
Key Employees eligible for Performance Units with respect to that Performance
Period the range of dollar values, if any, which may be fixed or may vary in
accordance with such performance or other criteria specified by the Committee,
which shall be paid to an Eligible Participant or Key Employee with respect to
such Performance Unit if the relevant measure of Company performance for the
Performance Period is met. Such range of dollar values shall be set forth in the
Award Agreement granting such Performance Unit.
(c) If
during the course of a Performance Period there shall occur a significant event
or events (a “Significant Event”) as determined by the Committee, including, but
not limited to, a reorganization of the Company, which the Committee expects to
have a substantial effect on a performance objective during such Performance
Period, the Committee may revise such objective; provided, however, in all
events such revised objective shall constitute a substantial risk of forfeiture
within the meaning of Code Section 409A.
(d) If an
Eligible Participant or Key Employee terminates service with all Participating
Companies during a Performance Period because of death, Total Disability,
retirement on or after age 65, or at an earlier age with the consent of the
Company, or a Significant Event, as determined by the Committee, that Eligible
Participant or Key Employee shall be entitled, at the end of such Performance
Period, to payment in settlement of each Performance Unit awarded to such
Eligible Participant or Key Employee for such Performance Period (i) based
upon the performance objectives satisfied at the end of such Performance Period
and (ii) prorated for the portion of the Performance Period during which
the Eligible Participant or Key Employee was employed or retained by any
Participating Company. If an Eligible Participant or Key Employee terminates
service with all Participating Companies during a Performance Period for any
other reason, such Eligible Participant or Key Employee shall not be entitled to
any payment with respect to that Performance Period unless the Committee shall
otherwise provide at the time of the Award of such Eligible Participant’s or Key
Employee’s Performance Unit for such Performance Period.
(e) Each
Performance Unit may be paid as specified in the Award Agreement granting such
Performance Unit, which may provide for payment (i) all in cash,
(ii) in Stock, not including Restricted Stock or Deferred Stock, (together
with any cash representing fractional shares of Stock,) with a combined Fair
Market Value at such time equal to the dollar value of such Performance Unit
except that any fractional share of Stock payable shall be paid in cash equal to
the Fair Market Value of the fractional Share of Stock, or (iii) a
combination of Stock and cash, and either as a lump sum payment or in annual
installments, each commencing as soon as practicable after the end of the
relevant Performance Period. If and to the extent the full value of a
Performance Unit is not paid in Stock, then the shares of Stock representing the
portion of the value of the Performance Unit not paid in Stock shall again
become available for award under the Plan.
7.
Restricted
Stock
.
(a)
Restricted Stock may be received by an Eligible Participant or Key Employee
either as an Award or, if the Award Agreement granting an Option or SAR so
specifies, as the result of an exercise of an Option or SAR. Restricted Stock
shall be subject to a restriction period (after which restrictions shall lapse)
which shall mean a period commencing on the date the Award is granted and ending
on such date or upon the achievement of such performance or other criteria as
the Committee shall determine (the “Restriction Period”). The Committee may
provide for the lapse of restrictions in installments where deemed
appropriate.
(b)
Except as otherwise provided in this Section 7, no shares of Restricted
Stock received by an Eligible Participant or Key Employee shall be sold,
exchanged, transferred, pledged, hypothecated or otherwise disposed of during
the Restriction Period;
provided
,
however
, the
Restriction Period for any recipient of Restricted Stock shall expire and all
restrictions on shares of Restricted Stock shall lapse upon the recipient’s
death, Total Disability, retirement on or after age 65 or an earlier age
specified in the Award Agreement granting such Restricted
Stock.
(c)
Except as otherwise provided in Section 7(b) above, if an Eligible
Participant or Key Employee terminates employment or service with all
Participating Companies for any reason before the expiration of the Restriction
Period, all shares of Restricted Stock still subject to restriction shall,
unless the Committee otherwise determines, be forfeited by the recipient and
shall be reacquired by the Company, and, in the case of Restricted Stock
purchased through the exercise of an Option, the Company shall refund the
purchase price paid on the exercise of the Option. Upon such forfeiture, such
forfeited shares of Restricted Stock shall again become available for award
under the Plan.
(d) The
Committee may require, under such terms and conditions as it deems appropriate
or desirable, that the certificates for Restricted Stock delivered under the
Plan be held in custody by a bank or other institution, or that the Company may
itself hold such shares in custody until the Restriction Period expires or until
restrictions thereon otherwise lapse, and may require, as a condition of any
receipt of Restricted Stock, that the recipient shall have delivered a stock
power endorsed in blank relating to the Restricted Stock.
(e)
Nothing in this Section 7 shall preclude a recipient of Restricted Stock
from exchanging any shares of Restricted Stock subject to the restrictions
contained herein for any other shares of Stock that are similarly
restricted.
8.
Deferred
Stock
.
(a)
Deferred Stock may be credited to an Eligible Participant or Key Employee as an
Award. Deferred Stock shall be subject to a deferral period set forth in the
Award Agreement granting such Deferred Stock, which period shall commence on the
date the Award is granted and end on such date or upon the achievement of such
performance or other criteria as the Committee shall determine (the “Deferral
Period”); provided, however, in all events such performance or other criteria
shall constitute a substantial risk of forfeiture within the meaning of Code
Section 409A. The Committee may provide in the Award Agreement at the time
of the Award of Deferred Stock for the expiration of the Deferral Period in
installments where deemed appropriate.
(b)
Except as otherwise provided in this Section 8, no Deferred Stock awarded
hereunder shall be sold, exchanged, transferred, pledged, hypothecated or
otherwise disposed of during the Deferral Period;
provided
,
however
, the Deferral
Period shall expire upon the recipient’s death, Total Disability, retirement on
or after age 65 or an earlier age specified in the Award Agreement at the time
the Deferred Stock is awarded or on a date or dates that are nondiscretionary
and objectively determinable that is/are set forth in the Award Agreement at the
time the Deferred Stock is Awarded.
(c) At
the expiration of the Deferral Period, the recipient of Deferred Stock shall be
entitled to receive a certificate pursuant to Section 9 for the number of
shares of Stock equal to the number of shares of Deferred Stock credited on his
or her behalf.
(d)
Except as otherwise provided in Section 8(b), if an Eligible Participant or
Key Employee terminates employment or service with all Participating Companies
for any reason before the expiration of the Deferral Period, all shares of
Deferred Stock shall, unless the Committee otherwise determines, be forfeited by
the Key Employee or Eligible Participant. Upon such forfeiture, such forfeited
shares of Deferred Stock shall again become available for award under the
Plan.
9.
Certificates
for Awards of Stock; Uncertificated Shares
.
(a)
Subject to Section 7(d), each Eligible Participant or Key Employee entitled
to receive shares of Stock under the Plan shall be issued a certificate for such
shares. Such certificate shall be registered in the name of the Eligible
Participant or Key Employee and shall bear an appropriate legend reciting the
terms, conditions and restrictions, if any, applicable to such shares and shall
be subject to appropriate stop-transfer orders.
(b) The
Company shall not be required to issue or deliver any certificates for shares of
Stock prior to (i) the listing of such shares on any stock exchange or
quotation system on which the Stock may then be listed and (ii) the
completion of any registration or qualification of such shares under any Federal
or state law, or any ruling or regulation of any government body which the
Company shall, in its sole discretion, determine to be necessary or
advisable.
(c) All
certificates for shares of Stock delivered under the Plan shall also be subject
to such stop-transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, any stock exchange or quotation system upon which the
Stock is then listed and any applicable Federal or state securities laws; and
the Committee may cause a legend or legends to be placed on any such
certificates to make appropriate reference to such restrictions. The foregoing
provisions of this Section 9(c) shall not be effective if and to the extent
that the shares of Stock delivered under the Plan are covered by an effective
and current registration statement under the Securities Act of 1933, or if and
so long as the Committee determines that application of such provisions is no
longer required or desirable. In making such determination, the Committee may
rely upon an opinion of counsel for the Company.
(d)
Except for the restrictions on Restricted Stock or Deferred Stock under Sections
7 and 8, each Eligible Participant or Key Employee who receives an Award of
Stock shall have all of the rights of a stockholder with respect to such Stock,
including the right to vote the Stock and receive dividends and other
distributions; provided, however, no Eligible Participant or Key Employee
awarded an Option, an SAR, Performance Unit or Deferred Stock shall have any
right as a stockholder with respect to any shares subject to such Award prior to
the date of issuance to him or her of a certificate or certificates for such
shares.
(e)
Notwithstanding anything in this Plan to the contrary, the Company may, in its
sole discretion, issue shares of Stock or Restricted Stock upon the grant,
exercise, vesting or settlement of an Award pursuant to the direct registration
system, and, in lieu of the issuance of certificated shares, may issue
uncertificated shares, to the account of the Eligible Participant or Key
Employee. Any prior references in this Section 9 to share certificates
shall, in such event, be deemed to refer to uncertificated shares.
10.
Beneficiary
.
(a) Each
Eligible Participant or Key Employee, as the case may be, shall file with the
Committee a written designation, signed by the Eligible Participant or Key
Employee, of one or more persons as the Beneficiary who shall be entitled to
receive the Award, if any, payable under the Plan upon his or her death, and the
designation may name one or more persons as contingent Beneficiaries. An
Eligible Participant or Key Employee may from time to time revoke or change his
or her Beneficiary designation without the consent of any prior Beneficiary by
filing a new designation with the Committee. The last such designation received
by the Committee shall be controlling;
provided
,
however
, that no
designation, or change or revocation thereof, shall be effective unless received
by the Committee prior to the Eligible Participant’s or Key Employee’s death,
and in no event shall it be effective as of a date prior to such receipt. Any
such designation, or revocation or change of such designation, shall be in such
form and manner as the Committee shall determine.
(b) If no
such Beneficiary designation is in effect at the time of an Eligible
Participant’s or Key Employee’s death, or if no designated Beneficiary survives
the Eligible Participant or Key Employee or if such Beneficiary is not located
by the Committee within one year of the death of the Eligible Participant or Key
Employee or if such designation conflicts with law, such person’s estate shall
be entitled to receive the Award, if any, payable under the Plan upon his or her
death. If the Committee is in doubt as to the right of any person to receive
such Award, the Company may retain such Award, without liability for any
interest thereon, until the Committee determines the rights thereto, or the
Company may pay such Award into any court of appropriate jurisdiction and such
payment shall be a complete discharge of the liability of the Company
therefore.
(c)
Wherever in this Plan the Committee is directed or authorized to pay an Award to
an estate of a deceased participant, the Committee shall pay such Award to the
personal representative of such estate, if any has qualified within 12 months of
death, and if not, then to the persons who would be entitled to receive the
Award under the laws of descent and distribution of the State of Georgia in
effect at the date of death of the participant if he or she had died intestate
owning such property in fee simple. The determination by the Committee shall be
final and the Committee shall be fully protected in paying the Award to the
person or persons determined by the Committee in good faith to be entitled
thereto irrespective of whether such payments are made to the person or persons
who are in fact entitled to receive such Award.
11.
Administration
of the Plan
.
(a) The
Plan shall be administered by a Committee composed of two or more persons, as
appointed by the Board and serving at the Board’s pleasure, but unless and until
the Committee is actually appointed by the Board, the Board shall function as
and in place of the Committee. Each member of the Committee shall be a
“Non-Employee Director” within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934 or successor rule or regulation.
(b) All
decisions, determinations or actions of the Committee made or taken pursuant to
grants of authority under the Plan shall be made or taken in the sole discretion
of the Committee and shall be final, conclusive and binding on all persons for
all purposes.
(c) The
Committee shall have full power, discretion and authority to interpret,
construe, act and administer the Plan and any part thereof, and its
interpretations and constructions thereof and actions taken thereunder shall be
final, conclusive and binding on all persons for all purposes.
(d) The
Committee’s decisions and determinations under the Plan need not be uniform and
may be made selectively among participants in the Plan, whether or not such
participants are similarly situated.
(e) The
Committee shall keep minutes of its actions under the Plan. The act of a
majority of the members present at a meeting duly called and held shall be the
act of the Committee. Any decision or determination reduced to writing and
signed by all members of the Committee shall be fully as effective as if made by
unanimous vote at a meeting duly called and held.
(f) The
Committee may employ such legal counsel, including, without limitation,
independent legal counsel and counsel regularly employed by the Company,
consultants and agents as the Committee may deem appropriate for the
administration of the Plan and may rely upon any opinion received from any such
counsel or consultant and any computations received from any such consultant or
agent. All expenses incurred by the Committee in interpreting and administering
the Plan, including, without limitation, meeting fees and expenses and
professional fees, shall be paid by the Company.
(g) No
member or former member of the Committee or the Board shall be liable for any
action or determination made in good faith with respect to the Plan or any Award
granted under it. Each member or former member of the Committee or the Board
shall be indemnified and held harmless by the Company against all costs or
expenses (including counsel fees) or liabilities (including any sum paid in
settlement of a claim with the approval of the Board) arising out of any act or
omission to act in connection with the Plan unless arising out of such member’s
own fraud or bad faith. The Company shall pay any member or former member of the
Committee or the Board who is entitled to indemnification under this section the
expenses (including attorney’s fees) incurred in defending any such action taken
against him or her in advance of its final disposition (“hereinafter an
“Advancement of Expenses”); provided, however, that, if the Delaware General
Corporation Law requires, an Advancement of Expenses to any current Committee or
Board member shall be paid only upon receipt by the Company of an undertaking,
by or on behalf of such person, to repay such amounts if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal that such person is not entitled to be indemnified for such expenses
pursuant to this section. Such indemnification shall be in addition to any
rights of indemnification the members or former members may have as Directors or
under the Bylaws of the Company.
12.
Amendment
or Discontinuance
.
The Board
may at any time amend or terminate the Plan. The Plan may also be amended by the
Committee, provided that all such amendments shall be reported to the Board. No
amendment shall, without being approved by the affirmative vote of holders of a
majority of the shares voted on such amendment at a meeting of the stockholders
at which a quorum is present, (i) alter the group of persons eligible for
qualified incentive stock options under the Plan, or (ii) increase the
maximum number of shares of Stock which are available for Awards under the Plan.
Except in connection with a corporate transaction involving the Company
(including, without limitation, any stock dividend, stock split, extraordinary
cash dividend, recapitalization, reorganization, merger, consolidation,
split-up, spin-off, combination, or exchange of shares), the terms of
outstanding Awards may not be amended to reduce the exercise price of
outstanding Options or SARs or cancel outstanding Options or SARs in exchange
for cash, other awards or Options or SARs with an exercise price that is less
than the exercise price of the original Options or SARs without shareholder
approval. No amendment or termination shall retroactively impair the rights of
any person with respect to an Award. On or after the occurrence of a Change in
Control Event, the Plan may not be amended or terminated until all payments
required by Section 14 are made. All such amendments shall be made in
compliance with Code Section 409A.
13.
Adjustments
in Event of Change in Common Stock
.
Subject
to compliance with Code Section 409A, in the event of any recapitalization,
reclassification, split-up or consolidation of shares of Stock, merger or
consolidation of the Company or sale by the Company of all or a substantial
portion of its assets, or other event which could distort the implementation of
the Plan or the realization of its objectives, the Committee may make such
appropriate adjustments in the Stock subject to Awards, including Stock subject
to purchase by an Option, or the terms, conditions or restrictions on Stock or
Awards as the Committee deems equitable;
provided
,
however
, that no such
adjustments shall be made on or after the occurrence of a Change in Control
Event without the affected participant’s consent.
14.
Change in
Control Event
.
Notwithstanding
anything else herein to the contrary, the Committee may in its discretion take
any of the following actions with respect to the occurrence of a Change in
Control Event:
(a) All
or any portion of any Option or SAR that has not expired and has not otherwise
been exercised shall be cashed out in a lump sum cash payment equal to the
excess, if any, of the Fair Market Value determined on the date of the Change in
Control Event of the shares of Stock, including Restricted Stock, subject to the
Option or SAR that is to be cashed out over the exercise price for such shares
subject to the Option or SAR as specified in the respective Award
Agreement.
(b) The
Performance Period applicable to any Performance Unit shall end and the Company
shall pay the participant in full settlement of such participant’s Performance
Unit a lump sum amount in cash equal to the dollar value of such participant’s
Performance Unit;
provided
,
however
, if the
Committee elects to so provide, the Committee must so specify in the Award
Agreement awarding the Performance Unit at the time of grant.
(c) All
Restriction Periods applicable to any outstanding Restricted Stock shall end and
the Company shall pay the holder of such Restricted Stock a lump sum amount in
cash equal to the Current Market Value of the Restricted Stock held by, or on
behalf of, the participant in exchange for such Restricted Stock.
(d) All
Deferral Periods applicable to any Deferred Stock credited to a participant
shall end and the Company shall pay to such participant an amount in cash equal
to the Current Market Value of the number of shares of Deferred Stock credited
to such participant in full settlement of such Deferred Stock;
provided
,
however
, if the
Committee elects to so provide, the Committee must so specify in the Award
Agreement awarding the Deferred Stock at the time of grant.
(e)
For purposes of this Section 14, “Current Market Value” means the highest
Closing Price (defined below) during the period (the “Reference Period”)
commencing 30 days prior to the Change in Control Event and ending 30 days after
the Change in Control Event; provided, that if the Change in Control Event
occurs as a result of a tender offer or exchange offer, or a merger, purchase of
assets or stock or other transaction approved by stockholders of the Company,
Current Market Value shall mean the higher of (i) the highest Closing Price
during the Reference Period or (ii) the highest price paid per share
pursuant to such tender offer, exchange offer or transaction. The “Closing
Price” on any day during the Reference Period means: (i) if the Stock is
actively traded on any national securities exchange, the closing price at which
sales of Stock shall have been sold on the most recent trading date immediately
prior to the date of determination, as reported by any such exchange selected by
the Committee on which the shares of Stock are then traded; or (ii) if the
shares of Stock are not actively traded on any such exchange, the average of the
closing high “bid” and low “asked” prices for the shares of Stock on the
over-the-counter market on the most recent trading date immediately prior to the
determination date as determined by the Committee and reported by such system;
or (iii) if there are no “bid” and “asked” prices available or if the
shares of Stock are not traded on the over-the-counter market, the fair market
value of a share of Stock as determined in good faith by the Committee in
compliance with Code Section 409A taking into account such relevant facts
and circumstances deemed by the Committee to be material to the value of the
Stock in the hands of the Eligible Participant or Key Employee, which may
include opinions or reports prepared by independent experts
.
(f) Any
payment arising pursuant to this Section 14 shall be made as soon as
practicable after the occurrence of a Change in Control Event, but in no event
later than the close of the calendar year during which the Change in Control
Event occurs.
15.
Miscellaneous
.
(a)
Nothing in this Plan or any Award granted hereunder shall confer upon any
employee any right to continue in the employ of any Participating Company or
interfere in any way with the right of any Participating Company to terminate
his or her employment at any time.
(b) No
Award payable under the Plan shall be deemed salary or compensation for the
purpose of computing benefits under any employee benefit plan or other
arrangement of any Participating Company for the benefit of its employees unless
the Company shall determine otherwise.
(c) No
participant shall have any claim to an Award until it is actually granted under
the Plan. To the extent that any person acquires a right to receive payments
from the Company under this Plan, such right shall be no greater than the right
of an unsecured general creditor of the Company. All payments of awards provided
for under the Plan shall be paid in cash from the general funds of the Company;
provided
,
however
, that such
payments shall be reduced by the amount of any payments made to the participant
or his or her dependents, beneficiaries or estate from any trust or special or
separate fund established by the Company to assure such payments. The Company
shall not be required to establish a special or separate fund or other
segregation of assets to assure such payments, and, if the Company shall make
any investments to aid it in meeting its obligations hereunder, the participant
shall have no right, title or interest whatever in or to any such investments
except as may otherwise be expressly provided in a separate written instrument
relating to such investments. Nothing contained in this Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
of any kind between the Company and any participant. To the extent that any
participant acquires a right to receive payments from the Company hereunder,
such right shall be no greater than the right of an unsecured creditor of the
Company.
(d)
Absence on leave approved by a duly constituted officer of the Company shall not
be considered interruption or termination of employment for any purposes of the
Plan;
provided
,
however
,
(i) such leave does not exceed six months, or if longer, so long as the
individual retains a right to reemployment with the Participating Company under
an applicable statute or by contract, and (ii) that no Award may be granted
to an employee while he or she is absent on leave.
(e)
If the Committee shall find that any person to whom any Award, or portion
thereof, is payable under the Plan is unable to care for his or her affairs
because of illness or accident, or is a minor, then any payment due him or her
(unless a prior claim therefore has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to his or
her spouse, a child, a relative, an institution maintaining or having custody of
such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Company
therefore.
(f) The
right of any person to any Award payable under the Plan may not be assigned,
transferred, pledged or encumbered, either voluntarily or by operation of law,
except as provided in Section 10 with respect to the designation of a
Beneficiary or as may otherwise be required by law. If, by reason of any
attempted assignment, transfer, pledge or encumbrance or any bankruptcy or other
event happening at any time, any amount payable under the Plan would be made
subject to the debts or liabilities of the participant or his or her Beneficiary
or would otherwise devolve upon anyone else and not be enjoyed by the
participant or his or her Beneficiary, then the Committee may terminate such
person’s interest in any such payment and direct that the same be held and
applied to or for the benefit of the participant, his or her Beneficiary or any
other persons deemed to be the natural objects of his or her bounty, taking into
account the expressed wishes of the participant (or, in the event of his or her
death, those of his or her Beneficiary) in such manner as the Committee may deem
proper.
(g)
Copies of the Plan and all amendments, administrative rules and procedures and
interpretations shall be made available to all participants’ at all reasonable
times at the Company’s headquarters.
(h) The
Committee may cause to be made, as a condition precedent to the payment of any
Award, or otherwise, appropriate arrangements with the participant or his or her
Beneficiary, for the withholding of any federal, state, local or foreign
taxes.
(i) The
Plan and the grant of Awards shall be subject to all applicable federal and
state laws, rules and regulations and to such approvals by any government or
regulatory agency as may be required.
(j) All
elections, designations, requests, notices, instructions and other
communications from an Eligible Participant or Key Employee, Beneficiary or
other person to the Committee, required or permitted under the Plan, shall be in
such form as is prescribed from time to time by the Committee and shall be
mailed by first class mail or delivered to such location as shall be specified
by the Committee.
(k) The
terms of the Plan shall be binding upon the Company and its successors and
assigns.
(l)
Captions preceding the sections hereof are inserted solely as a matter of
convenience and in no way define or limit the scope or intent of any provision
hereof.
(m) The
Plan and all Awards granted hereunder shall comply at all times with all laws
and regulations of any governmental authority which may be applicable thereto
(including Code Section 409A). To the extent that an award granted
hereunder is designated as an incentive stock option, it shall comply with Code
Section 422, and all provisions of the Plan and the Award Agreement for
such Option shall be construed in such manner as to effectuate that intent. Any
provision of the Plan or any Award Agreement notwithstanding, a participant
shall not be entitled to receive the benefits of Awards and the Company shall
not be obligated to pay any benefits to such participant if such exercise,
delivery, receipt or payment of benefits would constitute a violation by such
individual or the Company of any provision of any such law or regulation. Any
reference herein to “compliance with the requirements of Code Section 409A”
or words of similar import shall be interpreted to mean application of the terms
of the Plan or any Award, or administration of the Plan or any Award, as the
case may be, in such a manner that no additional income tax is imposed on a
participant pursuant to Code Section 409A(1)(a); provided, however, that
this provision shall not limit the application of the $100,000 limit on
incentive stock options set forth in Section 5(a). If additional guidance
is issued under or modifications are made to Code Section 409A or any other
law affecting the awards issued hereunder, the Committee shall take such actions
(including amending the Plan or any Award Agreement without the necessity of
obtaining the participant’s consent) as it deems necessary, in its sole
discretion, to ensure continued compliance with Code
Section 409A.
APPENDIX
B
CERTIFICATE
OF AMENDMENT
TO
THE
CERTIFICATE
OF INCORPORATION
OF
WEGENER
CORPORATION
Wegener
Corporation (the “Corporation”), a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, does hereby
certify:
|
1.
|
The
name of the corporation is Wegener Corporation (the
“Corporation”).
|
|
2.
|
The
Corporation’s Board of Directors has passed a resolution that the
Certificate of Incorporation be hereby amended by amending Article Fourth
of the Certificate of Incorporation, so that it reads in its
entirety:
|
“RESOLVED
that effective as of 5:00 p.m., Eastern time, on the date that this Certificate
of Amendment to the Certificate of Incorporation is filed with the Secretary of
State of the State of Delaware (the “Effective Time”), Article Fourth of the
Certificate of Incorporation is amended and restated as
follows:
FOURTH: CAPITAL
STOCK. The total number of shares of capital stock of all classes
that the Company shall have authority to issue is 30,250,000 shares. The
authorized capital stock is divided into 250,000 shares of Preferred Stock, par
value $20 per share (hereinafter the "Preferred Stock"), and 30,000,000 shares
of Common Stock, par value of $.01 per share (hereinafter the "Common
Stock").
Section
1 - Preferred Stock.
(a) The
shares of Preferred Stock of the Company may be issued from time to time in one
or more series, the shares of each series to have such voting powers, full or
limited, or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, as are stated and expressed herein or in the resolution
or resolutions providing for the issue of such series, adopted by the Board of
Directors as hereinafter provided.
(b) Authority
is hereby expressly granted to the Board of Directors of the Company, subject to
the provisions of this Article Fourth and to the limitations prescribed by the
General Corporation Law of Delaware, to authorize the issue of one or more
series of Preferred Stock and with respect to each such series to fix by
resolution or resolutions providing for the issue of such series the voting
powers, full or limited, if any, of the shares of such series and the
designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof. The authority
of the Board of Directors with respect to each series shall include, but not be
limited to, the determination or fixing of the following:
(1) The
designation of such series;
(2) The
dividend rate of such series, the conditions and dates upon which such dividends
shall be payable, the relation which such dividends shall bear to the dividends
payable on any other class or classes of stock or any other series of any class
of stock of the Company, and whether such dividends shall be cumulative or
non-cumulative;
(3) Whether
the shares of such series shall be subject to redemption by the Company and, if
made subject to such redemption, the times, prices and other terms and
conditions of such redemption;
(4) The
terms and amount of any sinking fund provided for the purchase or redemption of
the shares of such series;
(5) Whether
or not the shares of such series shall be convertible into or exchangeable for
shares of any other class or classes of any stock or any other series of any
class of stock of the Company, and, if provision is made for conversion or
exchange, the times, prices, rates, adjustments, and other terms and conditions
of such conversion or exchanges;
(6) The
extent, if any, to which the holders of shares of such series shall be entitled
to vote with respect to the election of directors or otherwise;
(7) The
restrictions, if any, on the issue or reissue of any additional Preferred Stock;
and
(8) The
rights of the holders of the shares of such series upon the dissolution of, or
upon the distribution of assets of, the Company.
Section 2 - Common
Stock.
The
shares of Common Stock of the Company shall be of one and the same class.
Subject to all of the rights of the Preferred Stock provided for by resolution
or resolutions of the Board of Directors pursuant to this Article Fourth or by
the General Corporation Law of the State of Delaware, the holders of Common
Stock shall have full voting powers on all matters requiring stockholder action,
each share of such Common Stock being entitled to one vote and having equal
rights of participation in the dividends and assets of the
Company.”
|
3.
|
Said
amendment was duly adopted by the Shareholders of the Corporation in
accordance with the provisions of Sections 242 and 211 of the General
Corporation Law of the State of
Delaware.
|
IN WITNESS WHEREOF
, the
undersigned, being the duly elected officer of the Corporation, has caused this
Certificate of Amendment to be executed as of this
day of
,
2011.
WEGENER
CORPORATION
|
|
|
James
T. Traicoff,
Secretary
|
WEGENER
CORPORATION
This Proxy is solicited on behalf of
the Board of Directors for use at the 2011 Annual Meeting of Stockholders to be
held on
February 1, 2011
at 9:00 a.m., Eastern Standard Time.
The
undersigned hereby appoints C. Troy Woodbury, Jr. and James T. Traicoff, and
each of them, attorneys and proxies with full power to each of substitution, to
vote in the name of and as proxy for the undersigned at the Annual Meeting of
Stockholders of Wegener Corporation (the “Company”) to be held
on February 1, 2011 at 9:00 a.m., local time, at the offices of the
Company, 11350 Technology Circle, Johns Creek, Georgia 30097, and at any
adjournments or postponements thereof, according to the number of votes that the
undersigned would be entitled to cast if personally present.
PROPERLY EXECUTED PROXIES WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO SUCH DIRECTIONS ARE
GIVEN, SUCH PROXIES WILL BE VOTED FOR THE NOMINEES REFERRED TO IN PROPOSAL (1),
FOR THE PROPOSITIONS REFERRED TO IN PROPOSALS (2), (3)
,
(4) AND (6), FOR THE ONE YEAR
OPTION IN PROPOSAL (5) AND IN THE DISCRETION OF THE PROXIES WITH RESPECT TO
ANY SUCH MATTERS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF.
(Continued
and to be signed and dated on reverse side)
x
Please mark your vote as in this
example.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4 AND
6.
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ONE YEAR OPTION IN PROPOSAL
5.
(1)
|
To
elect the following nominees as Class I directors to serve until the 2014
Annual Meeting of Stockholders and until their successors are elected and
qualified:
|
Phylis A.
Eagle-Oldson C.
Troy Woodbury, Jr.
|
|
|
¨
FOR
the nominees listed
above
|
|
¨
WITHHOLD
AUTHORITY
to vote
for the nominees
|
(except
as indicated to the contrary below)
|
|
|
(To
withhold authority to vote for any individual nominee(s), write that nominee’s
name(s) on the line below:)
(2)
|
To
approve and adopt the Wegener Corporation 2011 Incentive
Plan.
|
¨
FOR
|
¨
AGAINST
|
¨
ABSTAIN
|
(3)
|
To
approve an amendment to the Wegener Corporation Certificate of
Incorporation authorizing the Company to issue shares of preferred
stock and authorizing the board of directors to determine the
terms and conditions thereof
|
¨
FOR
|
¨
AGAINST
|
¨
ABSTAIN
|
(4)
|
To
hold an advisory vote on executive
compensation.
|
¨
FOR
|
¨
AGAINST
|
¨
ABSTAIN
|
|
|
|
(5)
|
An
advisory vote on the frequency of holding an advisory vote on executive
compensation.
|
¨
1 Year
|
¨
2 Years
|
¨
3 Years
|
¨
ABSTAIN
|
(6)
|
To ratify the appointment of
Habif, Arogeti & Wynne, LLP
as the Independent Registered
Public Accounting Firm for the Company and its subsidiary for the fiscal
year ending September 2,
2011.
|
¨
FOR
|
¨
AGAINST
|
¨
ABSTAIN
|
|
|
|
|
|
The
undersigned revokes all prior proxies to vote the shares covered by this
proxy.
|
|
|
|
|
|
|
|
|
Signature
|
|
|
|
|
|
|
|
|
Signature
|
|
|
|
|
|
Date:
|
|
|
|
(When
signing as attorney, executor, administrator, trustee or guardian, please
give title as such. If stockholder is a corporation, corporate name should
be signed by an authorized officer and the corporate seal affixed. For
joint accounts, each joint owner should
sign.)
|
WE
ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING.
BOTH
ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet
and telephone voting are available through 11:59 PM Eastern Time the day
prior
to the stockholder meeting date.
|
INTERNET
|
|
http://www.proxyvote.com
|
|
|
|
Use
the Internet to vote your
|
|
Proxy. Have
your proxy card
|
|
in
hand when you access the
|
|
website.
|
|
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OR
|
|
|
|
TELEPHONE
|
|
1-800-690-6903
|
|
|
|
Use
any touch-tone telephone
|
|
to
vote your proxy. Have your
|
|
proxy
card in hand when you call.
|
|
|
|
If
you vote your proxy by Internet or telephone, you do NOT need to mail back
your proxy card.
|
|
|
|
To
vote by mail, mark, sign and date your proxy card and return it in the
enclosed pre-paid envelope.
|
|
|
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Your
Internet or telephone vote authorizes the named proxies to vote your
shares in the same manner as if you signed, and returned your proxy
card.
|
Important
Notice regarding the Internet
availability
of proxy materials for the Annual
Meeting
of Stockholders
The Proxy
Statement is available at:
http://www.proxyvote.com
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