SCHEDULE 14A INFORMATION
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 [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sections 240.14a-11(c) or
Section 240.14a-12
WESTELL TECHNOLOGIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
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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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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
WESTELL TECHNOLOGIES, INC.
750 North Commons Drive
Aurora, Illinois 60504
(630) 898-2500
Notice of Annual Meeting of Stockholders
September 22, 2005
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Westell Technologies, Inc. (the
"Company") will be held at the Company's Corporate Headquarters, 750 North
Commons Drive, Aurora, Illinois on Thursday, September 22, 2005 at 10:00 a.m.
Central Daylight Time for the following purposes:
1. To elect eight directors;
2. To vote on a proposal to ratify the appointment of independent
auditors; and
3. Any other matters that properly come before the meeting.
The Board of Directors has fixed the close of business on July 25, 2005 as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting.
By Order of the Board of Directors
Nicholas C. Hindman, Sr.
Senior Vice President and Chief Financial Officer
July 29, 2005
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE, SIGN AND MAIL THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED WHICH REQUIRES NO POSTAGE FOR MAILING IN
THE UNITED STATES. A PROMPT RESPONSE IS HELPFUL, AND YOUR COOPERATION WILL BE
APPRECIATED.
WESTELL TECHNOLOGIES, INC.
750 North Commons Drive
Aurora, Illinois 60504
-----------
Proxy Statement
Annual Meeting of Stockholders to be held September 22, 2005
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To the Stockholders of
WESTELL TECHNOLOGIES, INC.:
This Proxy Statement is being mailed to stockholders on or about August 12,
2005 and is furnished in connection with the solicitation by the Board of
Directors of Westell Technologies, Inc (the "Company") of proxies for the Annual
Meeting of Stockholders to be held at the Company's Corporate Headquarters, 750
North Commons Drive, Aurora, IL on Thursday, September 22, 2005 at 10:00 a.m.
Central Daylight Time for the purpose of considering and acting upon the matters
specified in the Notice of Annual Meeting of Stockholders accompanying this
Proxy Statement. If the form of Proxy which accompanies this Proxy Statement is
executed and returned, it will be voted. If no directions are specified on a
duly submitted Proxy, the shares will be voted, in accordance with the
recommendations of the Board of Directors, FOR the election of the directors
nominated by the Board, FOR Proposal No. 2 and in accordance with the discretion
of the persons appointed as proxies on any other matter properly brought before
the meeting. A Proxy may be revoked at any time prior to the voting thereof by
written notice to the Secretary of the Company or by attending the meeting and
voting in person.
A majority of the outstanding voting power of Class A Common Stock and
Class B Common Stock entitled to vote at this meeting and represented in person
or by proxy will constitute a quorum. A quorum is needed for any proposal to be
adopted.
The affirmative vote of the holders of a plurality of the voting power of
the Company entitled to vote and represented in person or by proxy at the
meeting is required for the election of directors. The affirmative vote of
holders of a majority of the voting power of the Class A Common Stock and Class
B Common Stock of the Company, voting together as a single class, represented in
person or by proxy at the meeting is required to ratify the appointment of the
independent auditors but will not effect the election of directors.
Shares represented by proxies which are marked "abstain" or to deny
discretionary authority on any matter will be treated as shares present and
entitled to vote and will have the same effect as votes against any such
matters. Broker "non-votes" and the shares as to which stockholders abstain are
included for purposes of determining whether a quorum of shares is present at a
meeting. Broker "non-votes" will have no effect on the outcome of the election
of directors or the ratification of the appointment of independent auditors. A
broker "non-vote" occurs when a nominee holding shares for a beneficial owner
does not vote a particular proposal because the nominee does not have
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner.
With regard to approving any other proposal submitted to a vote at the
meeting, the affirmative vote of holders of a majority of the voting power of
the Company presented in person or by proxy at the meeting is required.
Expenses incurred in the solicitation of proxies will be borne by the
Company. Officers of the Company may make additional solicitations in person or
by telephone.
The Annual Report to Stockholders on Form 10-K for fiscal year ended March
31, 2005 ("fiscal 2005") accompanies this Proxy Statement. If you did not
receive a copy of the report, you may obtain one by writing to the Secretary of
the Company at the address indicated above.
Only holders of record of Class A Common Stock or Class B Common Stock at
the close of business on July 25, 2005 are entitled to vote at the meeting. As
of July 25, 2005, the Company had outstanding 53,392,575 shares of Class A
Common Stock and 14,741,872 shares of Class B Common Stock (collectively, the
"Common Stock"), and such shares are the only shares entitled to vote at the
Annual Meeting. Each share of Class A Common Stock is entitled to one vote and
each share of Class B Common Stock is entitled to four votes on each matter to
be voted upon at the Annual Meeting.
SECURITIES BENEFICIALLY OWNED BY
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the beneficial holdings (and the percentages
of outstanding shares represented by such beneficial holdings) as of June 21,
2005, of each director, each Named Executive Officer identified in the summary
compensation table below, and all directors and executive officers as a group.
Except as otherwise indicated, the Company believes that the beneficial owners
of the Common Stock listed below, based on information provided by such owners,
have sole investment and voting power with respect to such shares, subject to
community property laws where applicable. Persons who have the power to vote or
dispose of Common Stock of the Company, either alone or jointly with others, are
deemed to be beneficial owners of such Common Stock.
PERCENT OF PERCENT OF PERCENT OF
NUMBER OF NUMBER OF CLASS A CLASS B TOTAL
DIRECTORS AND NAMED EXECUTIVE CLASS A CLASS B COMMON COMMON VOTING
OFFICERS SHARES(1)(2) SHARES(2) STOCK STOCK POWER(3)
- ------------------------------- ------------ ------------- ----------- ------------ -----------
Robert C. Penny III........ 170,940 (7) 13,714,302 (4) * 93.0% 48.3%
Melvin J. Simon............ 436,410 (5)(8) 14,741,871 (4)(6) * 100.0% 52.2%
John W. Seazholtz.......... 179,000 -- * -- *
E. Van Cullens............. 1,218,082 -- 2.2% -- *
Paul A. Dwyer.............. 255,900 -- * -- *
Eileen A. Kamerick......... 10,000 -- * -- *
Roger L. Plummer........... 44,000 -- * -- *
Bernard F. Sergesketter.... 79,900 -- * -- *
Nicholas C. Hindman, Sr.... 174,200 -- * -- *
John C. Clark............. 68,530 -- * -- *
William J. Noll............ 289,000 -- * -- *
Timothy J. Reedy 60,000 -- * -- *
All Directors and Executive
Officers as a group (12
Persons)................... 2,985,962 14,741,871 5.4% 100.0% 54.4%
- ------------------
* Less than 1%
(1) Includes options to purchase shares that are exercisable within 60 days of June 21, 2005 as follows: Mr. Simon:
178,000 shares; Mr. Seazholtz: 169,000 shares; Mr. Cullens: 1,154,682 shares; Mr. Dwyer: 220,900 shares; Ms.
Kamerick: 10,000 shares; Mr. Plummer: 39,000 shares; Mr. Sergesketter: 69,900 shares; Mr. Hindman: 104,200 shares;
Mr. Clark: 18,530 shares; Mr. Noll: 269,000 shares; Mr. Reedy: 60,000 shares; and all directors and officers as a
group: 2,720,562 shares.
(2) Holders of Class B Common Stock have four votes per share and holders of Class A Common Stock have one vote per
share. Class A Common Stock is freely transferable and Class B Common Stock is transferable only to certain
transferees but is convertible into Class A Common Stock on a share-for-share basis.
(3) Percentage of beneficial ownership is based on 54,911,543 shares of Class A Common Stock and 14,741,872 shares of
Class B Common Stock outstanding as of June 21, 2005.
(4) Includes 13,714,032 shares of Class B Common Stock held by Messrs. Penny and Simon, as Trustees pursuant to a
Voting Trust Agreement dated February 23, 1994, as amended (the "Voting Trust"), among Robert C. Penny III and
Melvin J. Simon, as trustees (the "Trustees"), and certain members of the Penny family and the Simon family. The
Trustees have joint voting and dispositive power over all shares in the Voting Trust. Messrs. Penny and Simon each
disclaim beneficial ownership with respect to all shares held in the Voting Trust in which they do not have a
pecuniary interest. The Voting Trust contains 2,939,911 shares held for the benefit of Mr. Penny and 137,804 shares
held for the benefit of Mr. Simon. The address for Messrs. Penny and Simon is Melvin J. Simon & Associates, Ltd.,
4343 Commerce Court, Suite 616, Lisle, Illinois 60532.
(5) Includes 2,000 shares held in trust for the benefit of Makayla G. Penny, Mr. Penny's daughter, for which Mr. Simon
is trustee and has sole voting and dispositive power; Mr. Simon disclaims beneficial ownership of these shares.
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(6) Includes 20,965 shares held in trust for the benefit of Sheri A. Simon and 20,965 shares held in trust for Stacy L.
Simon, Melvin J. Simon's daughters, for which Natalie Simon, Mr. Simon's wife, is custodian and has sole voting and
dispositive power; includes 985,639 shares held in trust for the benefit of Mr. Penny's children for which Mr.
Simon is trustee and has sole voting and dispositive power. Mr. Simon disclaims beneficial ownership of these
shares.
(7) Includes warrants to purchase 170,940 shares that are exercisable within 60 days of June 21, 2005 that are held in
trusts of which Mr. Penny is a co-trustee.
(8) Includes warrants to purchase 256,410 shares that are exercisable within 60 days of June 21, 2005 that are held in
trusts that Mr. Simon is a trustee and has sole voting power.
CERTAIN STOCKHOLDERS
The following table sets forth certain information with respect to each
person known by the Company to be the beneficial owner of more than five percent
of either class of its outstanding Common Stock, other than Messrs.Penny and
Simon whose information is set forth above. Such information is based upon a
review by the Company of the most recent reports filed with the Securities and
Exchange Commission by such beneficial owners.
PERCENT OF PERCENT OF
NUMBER OF NUMBER OF CLASS A PERCENT OF TOTAL
CLASS A CLASS B COMMON CLASS B VOTING
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES(2) SHARES(2) STOCK COMMON STOCK POWER(3)
- ------------------------------------------------- ------------- ------------ ------------ ------------- ------------
Wellington Management Co. LLP
75 State Street
Boston, MA 02109-1809 5,281,000 -- 9.6% -- *
Becker Capital Management
1211 SW Fifth Avenue, Suite 2185
Portland, OR 97204-1911 3,908,030 -- 7.1% -- *
Schroder Investment Management (UK) Ltd 31
Gresham Street
London EC2V 7QA UK. 2,912,400 -- 5.3% -- *
- ------------------
(1) In its capacity as an investment manager, the beneficial owner may be deemed to beneficially own the shares of
Class A Common Stock listed in the table. The shares listed in the table are held by the beneficial owner for its
own account or for the account of its clients.
(2) Holders of Class B Common Stock have four votes per share and holders of Class A Common Stock have one vote per
share. Class A Common Stock is freely transferable and Class B Common Stock is transferable only to certain
transferees but is convertible into Class A Common Stock on a share-for-share basis
PROPOSAL NO. 1: ELECTION OF DIRECTORS
At the Annual Meeting, eight directors are to be elected to hold office
until the next annual meeting of stockholders or until their successors are
elected and qualified. The Bylaws of Westell Technologies, Inc. provide that not
less than six nor more than ten directors shall constitute the Board of
Directors.
The Board of Directors has no reason to believe that any such nominee will
be unable to serve. It is intended that the proxies will be voted for the
nominees listed below. It is expected that the nominees will serve, but if any
nominee declines or is unable to serve for any unforeseen cause, the proxies
will be voted to fill any vacancy so arising by the persons named in the
proxies, based upon a recommendation by the Board of Directors. The persons
named in the proxies may alternatively vote to allow the vacancy created thereby
to remain open until filled by the Board of Directors.
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NOMINEES
The following table sets forth certain information with respect to the
nominees, all of whom are current members of the present Board of Directors.
Director
Name and Age Since Principal Occupation and Other Information
- ------------ ----- ------------------------------------------
John W. Seazholtz (68) 1997 John W. Seazholtz has served as Director of the Company since December
1997 and was elected Chairman in April 2000. Mr. Seazholtz was
President and Chief Executive Officer of Telesoft America, Inc. from
May 1998 to May 2000. In April 1998, Mr. Seazholtz retired as Chief
Technology Officer - Bell Atlantic where he had served since June
1995. Mr. Seazholtz previously served as Vice President Technology and
Information Services - Bell Atlantic and in other executive capacities
with Bell Atlantic beginning in 1962. Mr. Seazholtz currently serves
as a Director for Iteris, Inc. (formerly Odetics, Inc.), a supplier of
digital data management products for the security, broadcast and
computer storage markets. He is Chairman of eWay Group, a private
consulting firm. He is on the Board of Overseers of N.J. Institute of
Technology.
E. Van Cullens (59) 2001 E. Van Cullens has served as President, Chief Executive Officer and
Director of the Company since July 2001. Prior to joining the Company,
Mr. Cullens operated Cullens Enterprises, LLC, a management consulting
firm focused in telecommunications, from June 2000 through June 2001.
From June 1999 to May 2000, Mr. Cullens served as President and Chief
Operating Officer of Harris Corporation and served as President,
Communications Sector from May 1997 to June 1999. Mr. Cullens served
in various executive capacities with Siemens A. G. and affiliated
companies from January 1991 to April 1997. Mr. Cullens was with
Stromberg-Carlson from May 1984 until January 1991 when
Stromberg-Carlson was acquired by Siemens. From May 1972 to April
1984, Mr. Cullens held various management positions with GTE
Corporation.
Paul A. Dwyer (71) 1996 Paul A. Dwyer has served as a Director of the Company since January
1996. Mr. Dwyer, now retired, served as Chief Financial Officer of
Henry Crown and Company, a private investment firm from February 1981
to December 1999, and as Vice President - Administration of Longview
Management Group, LLC, a registered investment advisor, from October
1998 to December 1999. Mr. Dwyer serves as a Director for McHenry
Bancorp Inc., McHenry Savings Bank and Rush Computer Rentals, Inc.
Eileen A. Kamerick (46) 2003 Eileen A. Kamerick has served as a Director of the Company since
December 2003. Ms Kamerick currently serves as the Chief Financial
Officer of Heidrick and Struggles (NASDAQ HSII), an international
provider of senior level executive search and leadership development
services. Previously, Ms. Kamerick was chief financial officer and
executive vice president of Bcom3 Group, Inc., a leading international
holding company specializing in advertising and marketing services.
Ms. Kamerick also has held senior finance and legal positions for BP
Amoco Corporation, GE Capital AFS and Whirlpool Corporation. Ms.
Kamerick serves as a Board member of ServiceMaster, Inc. (NYSE SVM)
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and serves on the company's Audit Committee. In addition, Ms. Kamerick
serves as a Board member of The Boys and Girls Club of Chicago, The
Senior Businesswomen's Forum and the Mid America Club.
Robert C. Penny III (52) 1998 Robert C. Penny III has served as a Director of the Company since
September 1998. He is the owner of Eastwood Land & Cattle and has been
the managing partner of P.F. Management Co., a private investment
company, since May 1980.
Roger L. Plummer (63) 2001 Roger L. Plummer has served as a Director of the Company since
September 2001. Mr. Plummer currently serves as the Managing Director
of the International Engineering Consortium. Mr. Plummer also serves
as a consultant in communication technology and corporate organization
and culture. Mr. Plummer previously served in various executive
capacities at Ameritech and its predecessor, Illinois Bell, including
President of the Ameritech Custom Business Services unit. Mr. Plummer
serves as a Board member of; DePaul University, University of Illinois
Foundation, Chicago public television Channel 11, Association of
Public Television Stations, Accreditation Council of Graduate Medical
Education, Rush Hospital Neurobehavioral Center, and the Chicago
Symphony Orchestra Governing Members Organization.
Bernard F. Sergesketter (69) 2000 Bernard F. Sergesketter has served as a Director of the Company since
March 2000. Mr. Sergesketter is Chairman and Chief Executive Officer
of Sergesketter & Associates, a marketing consulting firm, since 1994.
He served as a Vice President of AT&T from January 1983 to August
1994. Mr. Sergesketter was a Director of Teltrend, Inc, a wholly owned
subsidiary of the Company, from January 1996 to March 2000 and
currently serves as a Director of Solar Communications Inc., the
Illinois Institute of Technology and The Sigma Chi Foundation.
Melvin J. Simon (60) 1992 Melvin J. Simon has served as Assistant Secretary of the Company since
July 1995 and as a Director of the Company since August 1992. From
July 1995 to April 2003, Mr. Simon served as Assistant Treasurer of
the Company. From August 1992 to July 1995, Mr. Simon served as
Secretary and Treasurer of the Company. A Certified Public Accountant,
Mr. Simon founded and has served as President of Melvin J. Simon &
Associates, Ltd., a public accounting firm, since May 1980. Mr. Simon
serves as a Director of the Company's 91.5% owned subsidiary
Conference Plus, Inc.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES.
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PROPOSAL NO. 2: RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The Company's independent auditors for fiscal 2005 were Ernst & Young LLP.
Selection of independent auditors is made by the Audit Committee.
Although we are not required to do so, we believe that it is appropriate to
request that stockholders ratify the appointment of Ernst & Young. If
stockholders do not ratify the appointment, the Audit Committee will investigate
the reasons for the stockholders' rejection and reconsider the appointment.
Representatives of Ernst & Young will be at the Annual Meeting, will be given
the opportunity to make a statement and will be available to respond to
appropriate questions.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP AS OUR INDEPENDENT AUDITORS FOR FISCAL YEAR
ENDING MARCH 31, 2006.
DETERMINATION OF NON-EMPLOYEE DIRECTOR INDEPENDENCE
The Board of Directors has determined that each of Messrs. Seazholtz,
Dwyer, Penny, Plummer, Sergesketter and Simon and Ms. Kamerick, is an
independent director as defined in the corporate governance requirements of the
Nasdaq National Market (referred to herein as the Nasdaq listing standards) and
the rules of the Securities and Exchange Commission.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES:
The Board of Directors held fourteen meetings during fiscal 2005. All
directors attended at least 75% of the aggregate number of such meetings and of
meetings of Board committees on which they served in fiscal 2005. Following the
regular Board meetings, the non-employee independent directors periodically
conduct separate meetings. The Board is authorized to directly engage outside
consultants and legal counsel to assist and advise.
The Board of Directors currently has six standing committees: the Audit
Committee, the Compensation Committee, the Executive Committee, the Finance
Committee, the Nominating Committee and the Technology Committee.
The Audit Committee (currently comprised of Messrs. Dwyer (Chair),
Sergesketter, and Ms. Kamerick) met seven times in fiscal 2005. The Audit
Committee generally has direct responsibility for appointing, compensating,
retaining and overseeing the work of any independent auditors. The Committee
also is responsible for reviewing the plan and scope of the annual audit,
reviewing the Company's audit and control functions, reviewing and pre-approving
audit and permissible non-audit services and reporting to the full Board of
Directors regarding all of the foregoing and carrying out the other
responsibilities set forth in its charter. The Board of Directors has designated
each member of the Audit Committee as an "audit committee financial expert," as
that term is defined in the SEC rules adopted pursuant to the Sarbanes-Oxley
Act. The Board of Directors has determined that each current member of the Audit
Committee is independent as defined in the Nasdaq listing standards and in the
Sarbanes-Oxley Act of 2002. The Audit Committee charter is available on the
Company's website at www.westell.com.
The Compensation Committee (currently comprised of Messrs. Dwyer (Chair),
Penny, Plummer and Seazholtz) met seven times in fiscal 2005. The Board of
Directors has determined that each current member of the Compensation Committee
is independent as defined in the Nasdaq listing standards. The functions of the
Compensation Committee consist of determining executive officers' salaries and
bonuses as well as administering and determining awards to be granted under the
Company's 1995 Stock Incentive Plan and Employee Stock Purchase Plan and the
2004 Stock Incentive Plan.
The Finance Committee (comprised of Messrs. Simon (Chair), Cullens and
Dwyer) did not meet in fiscal 2005. The functions of the Finance Committee
consist of making recommendations to the Board of Directors as to financial
matters and as to such matters as shall be referred to it by the Board of
Directors. The Finance Committee also periodically reviews the investment
policies and performance of the Company.
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The Technology Committee (comprised of Messrs. Seazholtz (Chair),
Sergesketter, Plummer and Cullens) met once in fiscal 2005. The Technology
Committee was established to insure alignment between the Company's technology
initiatives and its overall business strategy.
The Nominating Committee (comprised of Messrs. Seazholtz (Chair), Plummer,
Sergesketter and Ms. Kamerick) met once in fiscal 2005. The Nominating Committee
is responsible for: developing the criteria and qualifications for membership on
the Board; reviewing and making recommendations to the Board as to whether
existing directors should stand for re-election; considering, screening and
recommending candidates to fill new or open positions on the Board; recommending
Director nominees for approval by the Board and the stockholders; recommending
Director nominees for each of the Board's committees; reviewing candidates
recommended by shareholders; and conducting appropriate inquiries into the
backgrounds and qualifications of possible candidates. In general, director
qualifications include highest ethical and moral standards, business experience
and expertise, industry and technology experience and knowledge applicable to
the Company's industry and corporate management experience. The Board of
Directors has determined that each of the members of the Nominating Committee is
independent as such term is defined in the Nasdaq listing standards. The
Nominating Committee charter is available on the Company's website at
www.westell.com.
The Executive Committee (comprised of Messrs. Seazholtz (Chair), Cullens,
Penny and Plummer) did not meet in fiscal 2005.
Directors who are not employees of the Company each receive $25,000 per
year for services rendered as directors. Directors who are members of board
committees receive $2,000 per in person committee meeting. On January 5, 2005,
outside directors were each granted 25,000 stock options to purchase shares that
vest annually over four years with the exception of John Seazholtz who received
35,000 stock options. The exercise price for such options was based on the fair
market value of the stock on the day of grant. In addition, all directors may be
reimbursed for certain expenses incurred in connection with attendance at Board
and Committee meetings. Mr. Simon also receives $1,250 each quarter for his
services as a director of Conference Plus, Inc., a subsidiary of the Company.
Other than as described in this paragraph, directors who are employees of the
Company do not receive additional compensation for service as directors.
NOMINATING PROCEDURES
As described above, the Company has a Nominating Committee. The Nominating
Committee considers many factors when considering candidates for the Board of
Directors and strives for the Board to be comprised of directors with a variety
of experience and backgrounds who have high-level managerial experience in a
complex organization and who represent the balanced interest of stockholders as
a whole rather than those of special interest groups. Other important factors in
Board composition include strength of character, mature judgment, specialized
expertise, relevant technical skills, diversity, level of education, broad-based
business acumen, experience and understanding of strategy and policy-setting and
the extent to which the candidate would fill a present need on the Board of
Directors. Depending upon the current needs of the Board of Directors, certain
factors may be weighed more or less heavily by the Nominating Committee.
In considering candidates for the Board of Directors, the Nominating
Committee considers the entirety of each candidate's credentials and does not
have any specific minimum qualifications that must be met by a Nominating
Committee recommended nominee. However, the Nominating Committee does believe
that all members of the Board of Directors should have the highest character and
integrity, a reputation for working constructively with others, sufficient time
to devote to Board matters, and no conflict of interest that would interfere
with performance as a director. In the case of current Directors being
considered for renomination, the Nominating Committee will also take into
account the director's history of attendance at meetings of the Board of
Directors or its committees, the Director's tenure as a member of the Board of
Directors, and the Director's preparation for and participation in such
meetings.
The Nominating Committee considers candidates for the Board from any
reasonable source, including stockholder recommendations. The Nominating
Committee does not evaluate candidates differently based on who has made the
proposal. The Nominating Committee has the authority under its charter to hire
and pay a fee to consultants or search firms to assist in the process of
identifying and evaluating candidates. No such consultants or search firms have
been used to date and, accordingly, no fees have been paid to consultants or
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search firms in the past fiscal year. Candidates are recommended to the Board of
Directors after consultation with the Chairman of the Board.
Stockholders who wish to suggest qualified candidates should write to the
Secretary, Westell Technologies, Inc., 750 North Commerce Drive, Aurora,
Illinois 60504, specifying the name of the candidates and stating in detail the
qualifications of such persons for consideration by the Nominating Committee. A
written statement from the candidate consenting to be named as a candidate and,
if nominated and elected, to serve as a director should accompany any such
recommendation. Stockholders who wish to nominate a director for election at an
annual meeting of the stockholders of the Company must comply with the Company's
bylaws regarding stockholder proposals and nominations. See "Proposals of
Stockholders" contained herein.
ATTENDANCE AT ANNUAL STOCKHOLDER MEETINGS
The Company expects all board members to attend the annual meeting of
stockholders, but from time to time, other commitments may prevent all directors
from attending each meeting. All directors attended the most recent annual
meeting of shareholders, which was held on September 23, 2004.
COMMUNICATIONS WITH DIRECTORS
The Board of Directors has established a process for stockholders to
communicate with members of the Board. If a stockholder has any concern,
question or complaint regarding any accounting, auditing or internal controls
matters, as well as any issues arising under Westell's Code of Business Conduct
or other matters that he or she wishes to communicate to Westell's Audit
Committee or Board of Directors, the stockholder can reach the Westell Board of
Directors by mail at Westell Technologies, Inc., Board of Directors, 750 North
Commons Drive, Aurora, IL 60504. From time to time, the Board of Directors may
change the process that stockholders may communicate to the Board of Directors
or its members. Please refer to our website at www.westell.com for any changes
in this process.
EXECUTIVE OFFICERS
The following sets forth certain information with respect to the current
executive officers of the Company. Please refer to the information contained
above under the heading "Election of Directors" for biographical information of
executive officers who are also directors of the Company.
Name Age Position
- ---- --- --------
E. Van Cullens 59 President and Chief Executive Officer
Nicholas C. Hindman, Sr. 54 Treasurer, Secretary, Senior Vice President and Chief Financial Officer
John C. Clark 57 Senior Vice President of Operations
William J. Noll 63 Senior Vice President and Chief Technology Officer
Timothy J. Reedy 43 Chief Executive Officer of Conference Plus, Inc.
Nicholas C. Hindman, Sr. has served as Treasurer, Secretary, Senior Vice
President and Chief Financial Officer since March, 2000 and as acting Treasurer,
Secretary, Vice President and Chief Financial Officer of the Company from May
1999 to February 2000.
John C. Clark has served as Senior Vice President of Operations since April
2001. Prior to joining the Company, Mr. Clark was Vice President of
Manufacturing from September 1998 to October 2000 with 3COM. Mr. Clark was
Director of Material Management at US Robotics/3COM from January 1996 to
September 1998. From 1994 to 1996, Mr. Clark served as Area Vice President of
Operations for Caremark. He also served as Director of Materials Management for
Caremark from 1991 to 1996.
William J. Noll has served as Senior Vice President and Chief Technology
Officer of Westell, Inc. since May 1997. Prior to joining the Company, Mr. Noll
was Vice President and General Manager of Residential Broadband at Northern
Telecom from October 1995 to May 1997. Mr. Noll held other various Vice
President and Assistant Vice President positions at Northern Telecom from June
1988 to October 1996, and was Vice President Network Systems at Bell Northern
Research from November 1986 to June 1988.
-8-
Timothy J. Reedy has served as Chief Executive Officer of Conference Plus,
Inc since October 2002. Prior to joining the Company, Mr. Reedy was Vice
President, Finance and Marketing with MCI/WorldCom Conferencing. From 1993 to
1995, Mr. Reedy also served as Vice President, Finance and Marketing at Darome
Teleconferencing. From 1984 to 1993, Mr. Reedy held several management positions
with the former Ameritech Mobile Communications, Inc.
EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal years ended March
31, 2003, 2004 and 2005, with respect to all compensation paid or earned for
services rendered to the Company by the Company's Chief Executive Officer and
the Company's other four most highly compensated executive officers who were
executive officers at March 31, 2005 (together, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
- ---------------------------------------------------------------------------- ------------------------- ----------
OTHER RESTRICTED SECURITIES ALL OTHER
ANNUAL STOCK UNDERLYING COMPEN-
FISCAL SALARY BONUS COMPEN- AWARDS OPTIONS(2) SATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) SATION($) ($)(1) (SHARES) ($)
- ------------------------------- -------- -------- --------- ------------ ------------ ------------ ----------
E.Van Cullens 2005 469,385 240,000 5,826 (3) - 100,000 656,150 (6)
President and Chief 2004 471,807 195,000 34,395 (4) - - 621,000 (6)
Executive Officer 2003 433,187 50,000 - - 195,541 -
John C. Clark 2005 244,809 162,000 - 335,250 - 6,150 (7)
Senior Vice President of 2004 246,446 140,622 - - 40,000 6,000 (7)
Operations 2003 239,239 96,465 31,714 (5) - 114,572 6,000 (7)
Nicholas C. Hindman, Sr. 2005 240,817 162,000 - 469,350 - 6,150 (7)
Treasurer, Secretary, 2004 240,286 140,622 - - 40,000 6,000 (7)
Senior Vice President and 2003 196,854 96,465 - - 100,498 5,715 (7)
Chief Financial Officer
William J. Noll 2005 230,566 162,000 - 134,100 - 6,150 (7)
Senior Vice President of 2004 229,542 141,122 - - 40,000 6,000 (7)
Research & Development and 2003 183,938 84,407 - - 94,581 6,000 (7)
Chief Technology Officer
Timothy J. Reedy(8) 2005 244,615 148,500 - - 50,000 10,447 (7)
Chief Executive Officer of 2004 231,058 231,250 - - - 2,584 (7)
Conference Plus, Inc. 2003 91,731 50,000 - - 100,000 -
- -------------------------------
(1) Represents the value on the grant date of a restricted stock award granted on January 3, 2005 under the Westell
Technologies, Inc. 2004 Stock Incentive Plan as follows: Mr. Hindman: 70,000 shares; Mr. Clark: 50,000 shares; and
Mr. Noll: 20,000 shares. For Mr. Hindman and Mr. Clark, the restricted stock awards will vest in full on June 1,
2008 subject to continued employment with the Company on that date. In the case of Mr. Noll, the restricted stock
award will vest on March 31, 2007, subject to Mr. Noll's continued services to the Company on that date. Each
restricted stock award is subject to partial vesting in the event of death, disability or involuntary termination
other than for cause, as defined in the restricted stock award, based upon the number of months worked prior to the
vesting date of the stock award. Dividends (if any) will be paid on the restricted stock at the same rate as other
outstanding shares of the Company's Class A Common Stock. The value of these shares as of March 31, 2005 was
$308,100, $271,500 and $108,600 for Mr. Hindman, Mr. Clark and Mr. Noll, respectively.
(2) Stock options granted were non-qualified stock options of Class A Common Stock and were issued under the 2004 and
1995 Stock Incentive Plans of the Company (the "Plans").
(3) Represents reimbursed professional services, life insurance and tax gross up.
(4) Represents reimbursed relocation expense, professional services, life insurance and tax gross up.
(5) Represents reimbursed relocation expense and tax gross up.
-9-
(6) Includes $650,000 and $615,000 for fiscal years 2005 and 2004, respectively, accrued under the Company's deferred
compensation agreement with Mr. Cullens for which amounts will vest on March 31, 2006 if Mr. Cullens is employed by
the Company on that date. See the description of the agreement under "Employment and Severance Agreements" below.
Includes a $6,150 and $6,000 contribution under the Company's 401(k) Profit Sharing Plan in fiscal years 2005 and
2004, respectively.
(7) Represents a contribution under the Company's 401(k) Profit Sharing Plan.
(8) Mr. Reedy joined the Company in October 2003 and was named an executive officer in fiscal 2004.
The following tables set forth the number of stock options granted to each
of the Named Executive Officers during fiscal 2005, the stock options exercised
by each Named Executive Officer in fiscal 2005 and exercisable and unexercisable
stock options held by the Named Executive Officers as of March 31, 2005. For
purposes of table computations the fair market value at March 31, 2005 was equal
to $5.43 per share.
OPTION GRANTS IN THE LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF STOCK
PRICE APPRECIATION
FOR OPTION TERM (2)
- ------------------------------------------------------------------------------------- -----------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO EXERCISE
UNDERLYING EMPLOYEES IN OR
OPTIONS FISCAL BASE PRICE EXPIRATION
NAME GRANTED(#) YEAR(1) ($/SH) DATE 5% 10%
- ------------------------ ------------ ------------- ----------- ------------ ---------- ----------
E.Van Cullens.......... 100,000 6.75% 6.705 01/03/2012 272,961 636,115
Timothy J. Reedy....... 50,000 3.38% 6.705 01/03/2012 136,480 318,057
(1) Based on 1,480,700 total options granted to employees, including the Named Executive Officers, in fiscal 2005.
(2) The potential realizable value is calculated based on the term of the option at its time of grant (seven years). It
is calculated by assuming the stock price on the date of grant appreciates at the indicated annual rate compounded
annually for the entire term of the option and that the option is exercised and sold on the last day of its term
for the appreciated stock price. The 5% and 10% appreciation rates are set by the Securities and Exchange
Commission and are not intended to forecast possible future appreciation, if any, in the stock price.
(3) These options vest over a four-year period with 25% vesting per year and have a 7-year life subject to earlier
termination upon the occurrence of certain events related to termination of employment.
FISCAL YEAR-END VALUES
- ----------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END
(#) ($)
----------------------------- ---------------------------------
SHARES VALUE
ACQUIRED ON REALIZED
NAME EXERCISE (#) ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE(2)
- ----------------------- ------------- --------- ------------ ------------- ------------- ----------------
E. Van Cullens........ -- -- 1,219,682 802,782 4,313,500 1,237,481
Nicholas C. Hindman... 12,950 34,714 91,250 103,370 54,418 263,820
John C. Clark......... -- -- 36,296 121,469 85,367 318,617
William J. Noll....... -- -- 311,500 106,879 199,338 272,692
Timothy J. Reedy...... -- -- 80,000 50,000 329,200 --
(1) Value is calculated by subtracting the exercise price per share from the fair market value at the time of exercise
and multiplying this amount by the number of shares exercised pursuant to the stock option.
(2) Value is calculated by subtracting the exercise price per share from $5.43, the average of the high and low price
of the Company's Class A Common Stock on March 31, 2005, and multiplying such amount by the number of shares
subject to the option.
-10-
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Company has a severance agreement with Mr. Cullens, the Chief Executive
Officer of the Company. The severance agreement provides that in the event that
Mr. Cullens is terminated without Cause (as defined therein) or he resigns for
Good Reason (as defined therein), the Company shall pay to Mr. Cullens severance
payments equal to his salary and bonus for the fiscal year in which the
termination occurs, and the severance agreement also provides for the payment of
certain amounts upon the occurrence of certain events. Mr. Cullens agreed not to
compete with the Company and not to solicit any Company employees for a period
of one year after termination in the event that his termination entitles him to
severance payments. The Company's severance payment obligations and Mr. Cullens'
right to this additional bonus shall terminate upon Mr. Cullens' death,
resignation without Good Reason, retirement or termination for Cause.
The Company also has entered into a deferred compensation program with Mr.
Cullens. The amount of deferred incentive compensation to be awarded to Mr.
Cullens in each year of his service as Chief Executive Officer of the Company is
to be based on the Company's consolidated net income before income taxes as set
forth in the Company's audited financial statements for March 31, 2004 and
subsequent fiscal years plus any gain on the sale of the Company's interest in
Conference Plus, Inc., if any. The amount of the award shall be determined as
follows:
CONSOLIDATED INCOME
BEFORE CUMULATIVE MAXIMUM CUMULATIVE
INCOME TAXES RATE AWARD MAXIMUM AWARD
- ------------------------------- ------ --------------- -------------
Up to $2,500,000 5% $ 125,000 $ 125,000
Next $3,750,000 4% $ 150,000 $ 275,000
Next $6,250,000 3% $ 187,500 $ 462,500
Next $6,250,000 2% $ 125,000 $ 587,500
Next $6,250,000 1% $ 62,500 $ 650,000
All amounts awarded under the deferred compensation program shall vest on
March 31, 2006 as long as Mr. Cullens is employed by the Company on that date.
Any amounts earned by Mr. Cullens in the fiscal years ending after March 31,
2006 will be fully vested at the time the amounts are determined as set forth
above. The amounts earned under the program will also be fully vested in the
event of Mr. Cullens' death or termination of employment by permanent and total
disability prior to March 31, 2006 or upon a change in control of the Company.
Unless otherwise elected, the deferred incentive compensation earned by Mr.
Cullens and vested thereunder will be paid to Mr. Cullens upon his retirement
from the Company or other termination of employment. Mr. Cullens shall also have
the right to withdraw all vested amounts earned under the program at any time,
provided that 5% of the amount withdrawn shall be forfeited to the Company. The
Company shall establish a rabbi trust and pay to the trust from time to time an
amount equal to any amount earned under the deferred incentive compensation
program. The balance in the deferred compensation account will be paid to Mr.
Cullens in a lump sum within 30 days after a change in control of the Company or
within 90 days after his death or termination of employment by permanent and
total disability.
-11-
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for the
Company's executive compensation and employee stock option programs. It
periodically determines the compensation to be paid to the executive officers of
the Company and administers and determines the awards to be granted under the
Company's 2004 Stock Incentive Plan and 1995 Stock Incentive Plan. The Board of
Directors has determined that each current member of the Compensation Committee
is independent as defined in the Nasdaq listing standards.
OVERVIEW AND PHILOSOPHY
The executive compensation program is intended to provide overall levels of
compensation for the executive officers which are competitive for the industries
and the geographic areas within which they operate, the individual's experience,
and contribution to the long-term success of the Company. A leading consulting
firm provides for the Compensation Committee's consideration information
regarding executive compensation of companies that operate in similar
industries. The Compensation Committee believes that its task of determining
fair and competitive compensation is ultimately judgmental.
The executive compensation program is composed of base salary, annual
incentive compensation, equity based incentives, and other benefits generally
available to all employees.
BASE SALARY
The base salary for each executive is intended primarily to be competitive
with companies in the industries and geographic areas in which the Company
competes. Surveys from outside firms and consultants are used to help determine
what is competitive. In making annual adjustments to base salary, the
Compensation Committee also considers the individual's performance over a period
of time as well as any other information which may be available as to the value
of the particular individual's past and prospective future services to the
Company. This information includes comments and performance evaluations by the
Company's Chief Executive Officer. The Committee considers all such data; it
does not prescribe the relative weight to be given to any particular component.
ANNUAL INCENTIVE COMPENSATION
Annual incentive compensation is ordinarily determined by a formula which
considers the financial goals and objectives of the Company.
LONG-TERM INCENTIVES
In general, the Compensation Committee believes that equity based
compensation should form a part of an executive's total compensation package.
Equity based compensation may be granted to executives in order to directly
relate a portion of the executive's earnings to the stock price appreciation
realized by the Company's stockholders over the option period. Equity based
compensation also provide executives with the opportunity to acquire an
ownership interest in the Company. The number of shares covered by each
executive's equity based compensation will be determined by factors similar to
those considered in establishing base salaries. In fiscal 2005, 150,000 stock
options and 140,000 shares of restricted stock were granted to executive
officers.
DEFERRED COMPENSATION
The Company's Chief Executive Officer has a deferred compensation
arrangement in the form of a Rabbi Trust Agreement
OTHER
Other benefits are generally those available to all other employees in the
Company, or a subsidiary, as appropriate.
-12-
COMPENSATION FOR CHIEF EXECUTIVE OFFICER
The Compensation Committee applies the same standards in establishing the
compensation of the Company's Chief Executive Officer as are used for other
executives. However, there are procedural differences. The Chief Executive
Officer does not participate in setting the amount and nature of his
compensation.
Internal Revenue Code section 162(m), in general, precludes a public
corporation from claiming a tax deduction for compensation in excess of $1
million in any taxable year for any executive officer named in the summary
compensation table in such corporation's proxy statement. Certain
performance-based compensation is exempt from this tax deduction limitation. The
Compensation Committee's policy is to structure executive compensation in order
to maximize the amount of the Company's tax deduction. However, the Compensation
Committee reserves the right to deviate from that policy to the extent it is
deemed necessary to serve the best interests of the Company.
This report is submitted by the Compensation Committee of the Board of
Directors.
Respectfully Submitted By:
The Compensation Committee
Paul A. Dwyer (Chair)
Robert Penny III
Roger Plummer
John W. Seazholtz
-13-
AUDIT COMMITTEE REPORT
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. Management has the primary responsibility for
the financial statements and the reporting process, including the system of
internal control. In fulfilling its oversight responsibilities, the Committee
reviewed the audited financial statements in the Annual Report with management,
including a discussion of the quality, not just the acceptability, of the
accounting principles; the reasonableness of significant judgments; and the
clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Committee by Statement on Auditing Standards No. 61(Communication With
Audit Committees), as amended. In addition, the Committee has discussed with the
independent auditors the auditors' independence from management and the Company,
including the matters in the written disclosures required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
and considered the compatibility of non-audit services with the auditors'
independence.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their respective audits. The Committee meets with
the independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
control, and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors(and the Board has approved) that
the audited financial statements be included in the Annual Report on Form 10-K
for the year ended March 31, 2005 for filing with the Securities and Exchange
Commission. The Audit Committee and the Board have also recommended, subject to
shareholder approval, the selection of the Company's independent auditors.
During fiscal 2005, management documented, tested and evaluated internal
controls pursuant to the requirements of the Sarbanes-Oxley Act of 2002.
Management and Ernst & Young kept the Audit Committee apprised of the Company's
progress. Management has provided the Audit Committee with a report on the
effectiveness of internal controls.
The Audit Committee is governed by a charter. The Board of Directors has
determined that the current members of the Audit Committee each qualify as an
"audit committee financial expert" as defined by Item 401(h) of the Regulation
S-K and that each of them is "independent" as the term is used in the Item
7(d)(3)(iv) of Schedule 14A under the Securities Act of 1934 as amended.
Respectfully Submitted By:
The Audit Committee
Paul A. Dwyer (Chair)
Eileen A. Kamerick
Bernard F. Sergesketter
-14-
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee is currently composed of Messrs. Dwyer (Chair),
Penny, Plummer and Seazholtz. No interlocking relationships exist between the
Company's Board of Directors or Compensation Committee and the board of
directors or compensation committee of any other company, nor has any such
interlocking relationship existed in the past.
The Company has granted Robert C. Penny III and Melvin J. Simon, as
Trustees of the Voting Trust, certain registration rights with respect to the
shares of Common Stock held in the Voting Trust.
In June 2001, trusts for the benefit of Robert C. Penny III, a director of
the Company, and other Penny family members, entered into a guaranty of $10
million of the Company's obligations under its revolving credit facility. In
consideration of the guarantee, the Company has granted those trusts warrants to
purchase 512,820 shares of Class A Common Stock for a period of five years at an
exercise price of $1.95 per share (the fair market value on the date of grant)
and agreed to grant registration rights with respect to shares acquired upon
exercise. This guarantee is no longer in place. All outstanding warrants were
exercised on a cashless basis in July 2005.
The Company has certain severance agreements with Mr. Cullens, the Chief
Executive Officer of the Company. See "Employment and Severance Agreements"
above.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors and persons who own more than 10 percent of
a registered class of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
During fiscal 2005, all such persons filed on a timely basis all reports
required by Section 16(a) of the Securities Exchange Act of 1934.
-15-
PERFORMANCE GRAPH
The following performance graph compares the change in the Company's
cumulative total stockholder return on its Class A Common Stock with the
cumulative total return of the Nasdaq Stock Market--U.S. Index and the Nasdaq
Telecommunications Index for the period commencing April 1, 2000 and ending
March 31, 2005. The stock price performance shown in the performance graph is
not indicative of future stock price performance.
TOTAL RETURN - DATA SUMMARY
CUMULATIVE TOTAL RETURN
-------------------------------------------------------------
4/1/00 3/01 3/02 3/03 3/04 3/05
WESTELL TECHNOLOGIES, INC. $ 100.00 $ 10.59 $ 4.86 $ 12.67 $ 22.90 $ 17.29
NASDAQ STOCK MARKET (U.S.) 100.00 47.08 41.27 21.92 38.39 37.27
NASDAQ TELECOMMUNICATIONS 100.00 43.05 33.25 24.70 33.81 38.23
[GRAPHIC OMITTED]
-16-
EQUITY COMPENSATION PLAN INFORMATION
EQUITY COMPENSATION PLAN INFORMATION AS OF MARCH 31, 2005
NUMBER OF SECURITIES TO WEIGHTED AVERAGE EXERCISE NUMBER OF SECURITIES REMAINING
BE ISSUED UPON EXERCISE PRICE OF OUTSTANDING AVAILABLE FOR FUTURE ISSUANCE
OF OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND (EXCLUDING SECURITIES
PLAN CATEGORY WARRANTS AND RIGHTS RIGHTS REFLECTED IN THE FIRST COLUMN)
- ---------------------------- -------------------------- --------------------------- --------------------------------
Equity compensation plans
approved by security
holders 8,650,492 $6.13 4,120,854
Equity compensation plans
not approved by security --
holders* 1,776,923 2.63
-------------------------- --------------------------- --------------------------------
Total 10,427,415 $5.53 4,120,854
========================== =========================== ================================
*Reflects non-qualified stock options to acquire shares of Class A Common Stock granted to E. Van Cullens and one other
employee in fiscal 2002. 1.1 million of these options vest over a four-year period with 25% vesting per year. The
remainder are performance based and vest at the earlier of achievement of certain performance goals or eight years. The
strike price on 0.9 million, 0.4 million and 0.4 million and 50,000 of the options is $1.95, $2.00, $5.00 and $1.32 per
share, respectively. >
AUDIT FEES
The aggregate fees billed by Westell's independent auditors rendered in
connection with (i) the audit of Westell's annual financial statements set forth
in the Westell Annual Report on Form 10-K for the year ended March 31 2005, and
(ii) the review of Westell's quarterly financial statements set forth in
Westell's Quarterly Report on Form 10-Q for the quarters ended June 30, 2004,
September 30, 2004, and December 31, 2004 were approximately $888,000. The fees
for those services in fiscal 2004 were $429,000.
Set forth below is a summary of certain fees paid to Ernst & Young for
services for the fiscal years 2004 and 2005.
FISCAL FISCAL
2004 2005
----------------- ---------------
Audit Fees $ 429,000 $ 888,000
Audit-Related Fees 18,000 89,000
Tax Fees 18,000 22,000
All Other Fees -- --
----------------- ---------------
Total $ 465,000 $ 999,000
AUDIT RELATED FEES
Audit related fees were for professional services rendered in connection
the accounting consultation.
TAX FEES
Tax fees consist of fees billed for professional services for tax
compliance and other tax consulting.
-17-
CONSIDERATION OF NON-AUDIT SERVICES PROVIDED BY INDEPENDENT ACCOUNTANT
The audit committee has considered whether the services provided under
other non-audit services are compatible with maintaining the auditor's
independence and has determined that such services are compatible.
AUDIT COMMITTEE PRE-APPROVAL POLICIES
The Audit Committee has adopted policies and procedures for pre-approving
all non-audit work performed by Ernst & Young. The Committee will annually
pre-approve services in specified accounting areas. The Committee also annually
pre-approves the budget for annual GAAP and statutory audits.
PROPOSALS OF SECURITY HOLDERS
A stockholder proposal to be included in the Company's proxy statement and
presented at the 2006 Annual Meeting must be received at the Company's executive
offices, 750 North Commons Drive Aurora, Illinois 60504 by no later than April
14, 2006 for evaluation as to inclusion in the Proxy Statement in connection
with such meeting.
Stockholders wishing to nominate a director or bring a proposal before the
2006 Annual Meeting (but not include the proposal in the Company's proxy
statement) must cause written notice of the proposal to be received by the
Secretary of the Company at the principal executive offices of the Company in
Aurora, Illinois, by no later than 60 days prior to the Annual Meeting date, as
well as comply with certain provisions of the Company's bylaws. In order for a
stockholder to nominate a candidate for director, such notice must describe
various matters regarding the nominee and the stockholder giving the notice,
including such information as name, address, occupation and shares held. In
order for a stockholder to bring other business before a stockholders meeting,
the notice for such meeting must include various matters regarding the
stockholder giving the notice and a description of the proposed business. These
requirements are separate from and in addition to the requirements a stockholder
must meet to have a proposal included in the Company's proxy statement.
FINANCIAL INFORMATION
The Company has furnished its financial statements to stockholders in its
2005 Annual Report, which accompanies this Proxy Statement. In addition, the
Company will promptly provide, without charge to any stockholder, on the request
of such stockholder, an additional copy of the 2005 Annual Report and the
Company's most recent Form 10-K. Written requests for such copies should be
directed to Westell Technologies, Inc., Attention: Nicholas C. Hindman, Sr.,
Senior Vice President and Chief Financial Officer, 750 North Commons Drive,
Aurora, Illinois 60504; telephone number (630) 898-2500.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Directors of the Company knows of no other business that may
come before the Annual Meeting. However, if any other matters are properly
presented to the meeting, the persons named in the proxies will vote upon them
in accordance with their best judgment.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE PROXY AND
RETURN IT IN THE ENCLOSED STAMPED ENVELOPE.
By Order of the Board of Directors
Nicholas C. Hindman, Sr.
Senior Vice President and Chief Financial Officer
Date: July 29, 2005
-18-
PROXY WESTELL TECHNOLOGIES, INC. PROXY
This Proxy is solicited by the Board of Directors of Westell Technologies,
Inc. for the Annual Meeting of Stockholders, on September 22, 2005, 10:00 a.m.,
local time, at the Westell Corporate Headquarters, 750 North Commons Drive,
Aurora, Illinois 60504.
The undersigned hereby appoints John W. Seazholtz and Melvin J. Simon, and
each of them proxies with the powers the undersigned would possess if personally
present, and with full power of substitution, to vote all Class A Common Stock
and/or Class B Common Stock held of record by the undersigned in Westell
Technologies, Inc., upon all subjects that may properly come before the annual
meeting, and at any adjournments thereof, including the matters described in the
proxy statement furnished herewith, subject to any directions indicated on the
reverse side of this card.
The undersigned hereby revokes any proxy heretofore given and acknowledges
receipt of the proxy statement for the annual meeting.
This proxy when properly executed will be voted in the manner directed by
the undersigned direction is made, this proxy will be voted for proposals 1 and
(THIS PROXY IS CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
(Comments/Change of Address)
----------------------------------------
----------------------------------------
----------------------------------------
(This proxy is continued and to ----------------------------------------
be signed on the reverse side.) (If you have written in the above space,
please mark the corresponding box on the
reverse side)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- FOLD AND DETACH HERE -
THE FOLLOWING MATTERS ARE PROPOSED BY THE BOARD OF DIRECTORS
1. ELECTION OF DIRECTORS: For Withhold List nominee exceptions:
Director Nominees: [] [] -----------------------
John W. Seazholtz, , E. Van Cullens,
Paul A. Dwyer, Eileen A. Kamerick,
Robert C. Penny III, Roger L. Plummer, For All
Bernard F. Sergesketter, Melvin J. Simon All Except
[]
- - - - - - - - - - - - - - - - - - - - - -
INSTRUCTION: To withhold
authority to vote for any individual
nominee, write that nominee's name in the
space provided
This proxy when properly executed will
be voted in the manner directed herein
by the undersigned stockholder. If no
direction is made, this proxy will be
deemed to constitute direction to vote
"for" each of the above proposals.
Please mark, sign, date and return the
proxy card using the enclosed envelope.
2. Ratification of Ernst & Young LLP as For Against Abstain
Auditors [] [] []
Comments/Change of Address / / Date ________________________, 2005
Signature(s) ________________________
Signature(s) ________________________
(NOTE: Please sign exactly as name appears on this Proxy. When shares are held
jointly, both should sign. When signing as attorney, executor, administrator,
trustee, guardian, corporate officer or partner, give full title as such. If a
corporation, please sign in corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.)