SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement. [ ] Confidential, for use of the
Commission only (as permitted by
Rule 14a-6(e)(2)).
[X] Definitive proxy statement.
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
WESTELL TECHNOLOGIES, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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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.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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WESTELL TECHNOLOGIES, INC.
750 NORTH COMMONS DRIVE
AURORA, ILLINOIS 60504
(630) 898-2500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 13, 2000
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Westell Technologies, Inc., a
Delaware corporation (the "Company"), will be held at the Company's Corporate
Headquarters, 750 North Commons Drive, Aurora, Illinois on Wednesday, December
13, 2000 at 11:00 a.m. Central Standard Daylight Time for the following
purposes:
1. To elect nine directors; and
2. To consider and transact such other business as may properly come
before the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on November 1,
2000 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.
Vice President, Secretary, Treasurer
and Chief Financial Officer
November 28, 2000
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
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Proxy Statement
Annual Meeting of Stockholders to be held December 13, 2000
-----------
To the Stockholders of
WESTELL TECHNOLOGIES, INC.:
This Proxy Statement is being mailed to stockholders on or about
November 28, 2000 and is furnished in connection with the solicitation by the
Board of Directors of Westell Technologies, Inc., a Delaware corporation (the
"Company"), of proxies for the Annual Meeting of Stockholders to be held on
December 13, 2000 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. A Proxy may be revoked at any time
prior to the voting thereof by written notice to the Secretary of the Company.
A majority of the outstanding shares entitled to vote at this meeting
and represented in person or by proxy will constitute a quorum. With a quorum
present at the meeting, the affirmative vote of the holders of a plurality of
the shares entitled to vote and represented in person or by proxy at the meeting
is required for the election of directors. Neither the nonvoting of shares nor
withholding authority will affect the election of directors.
With regard to any other proposal submitted to a vote, approval
requires the affirmative vote of a majority of the shares entitled to vote and
represented in person or by proxy at the meeting. 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, which will have the same
effect as a vote against any such matters. Broker "non-votes" will be treated as
not represented at the meeting as to matters for which a non-vote is indicated
on the broker's proxy and will not affect the determination of the outcome of
the vote on any proposal to be decided at the Annual Meeting. 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. A broker
"non-vote" occurs when a nominee holding shares for a beneficial owner does not
vote on 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.
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, 2000 ("fiscal 2000") 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.
As of November 1, 2000, the Company had outstanding 41,399,890 shares
of Class A Common Stock and 19,033,369 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
Set forth in the following table are the beneficial holdings (and the
percentages of outstanding shares represented by such beneficial holdings) as of
November 1, 2000, of (i) each person (including any "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act"))
known by the Company to own beneficially more than 5% of its outstanding Common
Stock, (ii) directors, (iii) each Named Executive Officer (as defined below),
and (iv) 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. Under Rule 13d-3 of the Exchange Act, 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.
STOCKHOLDERS, NUMBER OF NUMBER OF PERCENT OF
NAMED EXECUTIVE CLASS A CLASS B TOTAL VOTING
OFFICERS AND DIRECTORS SHARES (1)(2) SHARES(2) POWER(3)
- ---------------------- ------------- ---------------- ------------
Robert C. Penny III..................................... -- 18,585,797(4) 63.9%
Melvin J. Simon......................................... 69,300(5) 19,033,368(4)(6) 64.8%
Robert H. Gaynor........................................ 260,898(7) -- *
J. William Nelson....................................... 152,351 -- *
Marc J. Zionts.......................................... 63,500 -- *
William J. Noll......................................... 99,500 -- *
Marcus H. Hafner, Sr.................................... 160,000 -- *
Paul A. Dwyer........................................... 88,400 -- *
John W. Seazholtz....................................... 44,500 -- *
Howard L. Kirby......................................... 324,215 -- *
Bernard F. Sergesketter................................. 33,000 -- *
Thomas A. Reynolds III.................................. 60,000 -- *
Richard P. Riviere...................................... 16,800 -- *
All directors and executive
officers as a group (14 persons)........................ 1,378,464 19,033,368(7) 65.9%
- ----------
* Less than 1%
(1) Includes options to purchase shares that are exercisable within 60 days
of November 1, 2000 as follows: Mr. Simon: 62,500 shares; Mr. Nelson:
230,500 shares; Mr. Zionts: 63,500 shares; Mr. Noll: 99,500 shares; Mr.
Hafner: 161,000 shares; Mr. Dwyer: 84,400 shares; Mr. Seazholtz: 44,500
shares; Mr. Kirby 283,800 shares; Mr. Sergesketter 29,700 shares; Mr.
Riviere 16,800 shares; and all directors and officers as a group:
1,081,200 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 41,399,890 shares of
Class A Common Stock and 19,033,369 shares of Class B Common Stock
outstanding as of November 1, 2000.
(4) Includes 18,585,797 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 5,772,136 shares
held for the benefit of Mr. Penny and 452,804 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 114, Lisle,
Illinois 60532.
(5) Includes 4,800 shares held for the benefit of Stacy L. Simon, Melvin J.
Simon's daughter for which Natalie Simon, Mr. Simon's wife, is
custodian and has sole voting and dispositive power, and 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.
(6) Includes 95,980 held in trust for the benefit of Sheri A. Simon and
95,980 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 256,111 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.
(7) Mr. Gaynor retired in April 2000.
-2-
ELECTION OF DIRECTORS
At the Annual Meeting, nine directors, constituting the entire Board of
Directors of the Company, are to be elected to hold office until the next annual
meeting of stockholders or until their successors are elected and qualified. In
fiscal 2000, Robert Gaynor resigned and Ormand Wade retired from their positions
as directors of the Company.
It is intended that the proxies (except proxies marked to the contrary)
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 in accordance
with the discretionary authority of the persons named in the proxies.
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(63) 1997 John W. Seazholtz has served as a 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 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
Odetics, Inc., a supplier of digital data management products for the
security, broadcast and computer storage markets, and as director for
ASC-Advanced Switching Communications, an ATM network equipment
developer and for Mariner, Inc, an ATM LAN CPE developer.
Melvin J. Simon(55) 1992 Melvin J. Simon has served as Assistant Secretary and Assistant Treasurer
of the Company since July 1995 and as a Director of the Company since
August 1992. 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
also serves as a Director of the Company's 88% owned subsidiary
Conference Plus, Inc.
Paul A. Dwyer(66) 1996 Paul A. Dwyer has served as a Director of the Company since January 1996
and as a Director of Westell, Inc., a wholly owned subsidiary of the
Company since November 1995. Mr. Dwyer served as Chief Financial Officer
of Henry Crown and Company, a private investment firm, from February
1981 to December 1999, and has served as Vice President --Administration
of Longview Management Group, LLC, a registered investment advisor,
since October 1998.
-3-
Robert C. Penny III (47) 1998 Robert C. Penny III has served as a Director of the Company since September
1998. He has been the managing partner of P.F. Management Co., a private
investment company, since May 1980.
Thomas A. Reynolds, III (48) 2000 Thomas A. Reynolds, III has served as Director of the Company since
January 2000. He is a partner with Winston & Strawn, an international
law firm headquartered in Chicago, and currently serves as a member of
the Board of Directors of Smurfit Stone Container Corporation and
Georgetown University and serves as a Trustee of the Brain Research
Foundation.
Howard L. Kirby, Jr. (64) 2000 Howard L. Kirby, Jr. has served as a Director of the Company since March
2000. Mr. Kirby served as the President, Chief Executive Officer and as
a Director of Teltrend, Inc., a wholly owned subsidiary of the Company,
from January 1990 to March 2000.
Bernard F. Sergesketter (63) 2000 Bernard F. Sergesketter has served as a Director of the Company since
March 2000. Mr. Sergesketter is President and Chief Executive Officer of
Sergesketter & Associates, a telecommunications consulting firm, since
1994. He served as a Vice President of AT&T from January 1993 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 the Illinois Institute of Technology,
The Mather Foundation and The Sigma Chi Foundation.
Marc J. Zionts (38) 2000 Marc J. Zionts has served as a Director of the Company since January 2000.
Mr. Zionts currently serves as the Chief Executive Officer of the
Company and its wholly owned subsidiary Westell, Inc. Mr. Zionts served
as Senior Vice President of DSL System Sales of Westell, Inc. from March
1997 to December 1997. Mr. Zionts joined the Company in April 1996 as
Vice President and General Manager of DSL Sales and Marketing in the
United States. Mr. Zionts also serves on the Board of Directors of S3
Networks, a private company focused on delivering professional services
in the area of network security, scalability and survivability.
J.W. Nelson (48) 2000 J.W. Nelson has served as a Director of the Company since January
2000. Mr. Nelson currently serves as the President of the Company and as
President and Chief Operating Officer of the Company's wholly owned
subsidiary Westell, Inc. Mr. Nelson also serves as Chairman of the Board
of Directors of the Company's 88% owned subsidiary Conference Plus, Inc.
Mr. Nelson served as President of U.S. Operations of Westell, Inc. from
April 1996 to March 1997 and as Executive Vice President and Chief
Customer Satisfaction Officer of Westell, Inc. from July 1993 to March
1997.
-4-
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES:
The Board of Directors held 23 meetings during fiscal 2000. 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 2000.
The Board of Directors has established six standing committees: the
Audit Committee, the Compensation Committee, the Stock Incentive Committee, the
Executive Committee, the Finance Committee, and the Technology Committee.
The Audit Committee (comprised of Messrs. Dwyer (Chair), Simon and
Seazholtz ) met four times in fiscal 2000. The functions of the Audit Committee
consist of recommending the appointment of auditors and overseeing the
accounting and audit functions of the Company.
The Compensation Committee (comprised of Messrs. Dwyer (Chair), Penny
and Simon) met three times in fiscal 2000. The functions of the Compensation
Committee consist of determining executive officers' salaries and bonuses.
The Stock Incentive Committee (comprised of Messrs. Dwyer (Chair),
Penny and Seazholtz ) met thirteen times in fiscal 2000. The functions of the
Stock Incentive Committee consist of administering and determining awards to be
granted under the Company's 1995 Stock Incentive Plan and Employee Stock
Purchase Plan.
The Executive Committee (comprised of Messrs. Gaynor (Chair), Wade and
Simon) met three times in fiscal 2000. The Executive Committee has the authority
to take all actions that the Board of Directors as a whole would be able to
take, except as limited by applicable law.
The Finance Committee (comprised of Messrs. Simon (Chair), and Dwyer))
met three times in fiscal 2000. 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.
The Technology Committee (comprised of Messrs. Seazholtz (Chair) and
Wade) meet four times in fiscal 2000. Messrs. J. Nelson and William Noll were
advisory members of the Technology Committee. The Technology Committee was
established to insure alignment between the Company's technology initiatives and
its overall business strategy.
Directors who are not employees of the Company each receive $20,000 per
year for services rendered as directors, except Mr. Gaynor who received $100,000
per year as Chairman and Chief Executive Officer of the Company. In January,
2000 an outside director, Mr. Reynolds, was granted options to purchase 32,500
shares with one-year vesting. In April, 1999 outside directors were granted the
following stock options that vest annually over two years: Mr. Seazholtz 65,000
shares; Mr. Simon 65,000 shares; and Mr. Dwyer 65,000 shares. In December 1997,
outside directors were granted the following stock options that vest monthly
over five years: Mr. Simon: 50,000 shares; Mr. Dwyer: 20,000 shares; and Mr.
Seazholtz: 20,000 shares. In addition, all directors may be reimbursed for
certain expenses incurred in connection with attendance at Board and committee
meetings. In November 1995, Mr. Dwyer was granted an option to purchase 89,900
shares of Class A Common Stock at an exercise price of $6.50 per share. Mr.
Dwyer's options vest at a rate of 1,872 shares per month commencing January 1,
1996. In addition, 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
with respect to reimbursement of expenses and the granting of stock options,
directors who are employees of the Company do not receive additional
compensation for service as directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES.
-5-
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
- ---------------------------- --- ----------------
John W. Seazholtz.................... 63 Chairman of the Board of Directors
Marc J. Zionts ...................... 38 Chief Executive Officer
J. W. Nelson......................... 48 President and Chief Operating Officer
Nicholas C. Hindman, Sr.............. 49 Treasurer, Secretary, Vice President and Chief Financial Officer
William J. Noll...................... 58 Senior Vice President of Product Development and Chief Technology
Officer
Marcus H. Hafner, Sr................. 43 Executive Vice President Business Development and Corporate Strategy
Richard P. Riviere................... 45 Senior Vice President of Transaction Services and President and Chief
Executive Officer - Conference Plus, Inc
Melvin J. Simon...................... 55 Assistant Secretary, Assistant Treasurer and Director
Nicholas C. Hindman, Sr., has served as Treasurer, Secretary, Vice
President and Chief Financial Officer since May 1999. From October 1997 to April
1999, Mr. Hindman served as General Manager of MFI Holdings, LLC, a manufacturer
of consumer products. From 1992 through September 1997, Mr. Hindman operated an
auditing and consulting firm specializing in initial public offerings, private
placement of securities and business turnarounds.
William J. Noll has served as Senior Vice President of Research and
Development 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.
Marcus H. Hafner, Sr. has served as Executive Vice President for
Business Development and Corporate Strategy of Westell, Inc. since December
1997. Mr. Hafner served as Senior Vice President of Business Development from
April 1996 to December 1997 and served as Business Development Vice President of
the Company from May 1995 to March 1996. Prior to joining the Company, Mr.
Hafner was President and Chief Operating Officer of On-Demand Technologies,
Inc., a broadband equipment network systems provider, from April 1992 to April
1995.
Richard P. Riviere has served as Vice President of Transaction Services
for the Company since July 1995 and as President, Chief Executive Officer and a
Director of the Company's 88% owned subsidiary Conference Plus, Inc. since
October 1988.
-6-
EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal years ended March 31,
1998, 1999 and 2000, with respect to all compensation paid or earned for
services rendered to the Company by the Company's Chief Executive Officers and
the Company's four other most highly compensated executive officers who were
serving as executive officers at March 31, 2000 and a former Chief Executive
Officer (together, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
-------------------------------------------- ----------------
OTHER SECURITIES
ANNUAL UNDERLYING ALL OTHER
FISCAL SALARY BONUS COMPENSATION(1) OPTIONS(2) COMPENSATION(3)
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (SHARES) ($)
- ----------------------------- ------ -------- -------- --------------- ---------------- ---------------
Marc J. Zionts 2000 244,038 298,080 -- 500,000 3,210
Chief Executive Officer 1999 233,654 298,080 -- 290,000 3,277
1998 154,808 144,000 -- 250,000 1,834
Robert H. Gaynor(4) 2000 100,000 65,000
Chairman of the Board 1999 100,000 100,000
and Chief Executive 1998 30,000 50,000
Officer
J. William Nelson 2000 244,038 298,080 -- 195,000 5,118
President and Chief 1999 233,654 298,080 -- 250,000 7,624
Operating Officer 1998 180,385 144,000 -- 210,000 3,503
William J. Noll 2000 216,953 177,225 9,530 25,000 3,127
Senior Vice President of 1999 228,893 177,225 -- 145,000 4,001
Research & Development 1998 159,211 67,500 -- -- --
and Chief Technology
Officer
Marcus H. Hafner, Sr. 2000 181,476 229,040 -- 80,000 255
Executive Vice President 1999 216,191 149,040 -- 195,000 2,492
Business Development 1998 140,419 72,000 -- -- --
and Corporate Strategy
Richard P. Riviere 2000 172,000 150,831 -- -- 4,889
Vice President of 1999 150,000 103,894 -- 12,000 4,008
Transaction Services and 1998 140,000 103,894 -- 12,000 2,981
Chief Executive Officer
of Conference Plus, Inc.
- ---------------------------
(1) Represents reimbursed relocation expense and tax gross up.
(2) Stock options granted during fiscal 2000 were non-qualified stock options
of Class A Common Stock and were issued under the 1995 Stock Incentive
Plan of the Company.
(3) Includes matching contributions under the Company's 401(k) Profit Sharing
Plan and life insurance premiums for fiscal 2000 as follows: Mr. Zionts:
$2,966 and $ 244, respectively; Mr. Nelson: $ 4,474 and $ 644,
respectively; Mr. Noll $ 2,047 and $1,080, respectively; Mr. Hafner $ 0
and $ 255, respectively; and Mr. Riviere $4,464 and $425, respectively.
(4) Mr. Gaynor retired from his position as Chief Executive Officer in
January, 2000.
-7-
The following tables set forth the number of stock options granted to each of
the Named Executive Officers during fiscal 2000 and the stock option exercises
and exercisable and unexercisable stock options held by the Named Executive
Officers as of March 31, 2000. For purposes of table computations, the current
fair market value at March 31, 2000 was $ 31.5625 per share.
OPTION GRANTS IN THE LAST FISCAL YEAR
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------
NUMBER OF PERCENT OF POTENTIAL REALIZABLE VALUE AT
SECURITIES TOTAL OPTIONS ASSUMED ANNUAL RATES OF
UNDERLYING GRANTED TO EXERCISE OR STOCK PRICE APPRECIATION
OPTIONS EMPLOYEES BASE PRICE EXPIRATION FOR OPTION TERM (1)
NAME GRANTED(#) IN FISCAL YEAR(2) ($/SH) DATE 5%($) 10%($)
- --------------------- ------------- ------------------ ----------- ------------- ------------- -------------
Marc J. Zionts 100,000(3) 2.33% $4.0000 4/06/09 $251,558 $637,497
200,000(4) 4.66% $6.7656 10/19/09 $850,970 $2,156,525
200,000(5) 4.66% $9.9375 12/08/09 $1,249,928 $3,167,563
Robert H. Gaynor 65,000(5) 1.52% $4.0000 4/06/09 $163,513 $414,373
J. W. Nelson 100,000(4) 2.33% $6.7656 10/19/09 $425,485 $1,078,262
95,000(3) 2.22% $4.0000 4/06/09 $238,980 $605,622
William J. Noll 25,000(3) 0.58% $4.0000 4/06/09 $62,889 $159,374
Marcus H. Hafner, Sr. 80,000(3) 1.87% $4.0000 4/06/09 $201,246 $509,998
Richard P. Riviere -- -- -- -- -- --
- ----------------
(1) The potential realizable value is based on the term of the option at its
time of grant (ten years). As required by the SEC, the potential
realizable value is calculated by assuming the stock price on the date of
grant appreciates at the indicated annual rate compounded annually for the
entire term of the option and that the option is exercised and sold on the
last day of its term for the appreciate stock price. The prescribed rates
are not intended to forecast future appreciation.
(2) Based on 4,287,827 total options granted to employees, including the Named
Executive Officers, in fiscal 2000.
(3) These options vest in two equal annual installments on the first and
second anniversary of the option grant.
(4) These options vest over a two-year period in equal quarterly installments
and have a 10-year life.
(5) These options are performance based and vest in four equal annual
installments beginning on the first anniversary of the option.
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL IN-THE-MONEY OPTIONS AT
SHARES FISCAL YEAR (#) FISCAL YEAR END ($)
ACQUIRED ON VALUE (EXERCISABLE/ (EXERCISABLE/
NAME EXERCISE # REALIZED ($) UNEXERCISABLE) UNEXERCISABLE)(1)
- ------------------------- -------------- ----------- ------------------ -------------------------
Marc J. Zionts -- -- 140,000 / 650,000 $3,541,286 /$15,849,015
Robert H. Gaynor -- -- 43,364 / 122,638 $1,073,610 / $3,252,323
J. William Nelson -- -- 114,250 / 330,750 $2,892,102 / $8,541,950
William J. Noll 63,000 / 107,000 $1,596653 / $2,767,245
Marcus H. Hafner, Sr. -- -- 92,500 / 182,500 $2,344,292 / $4,802,743
Richard P. Riviere -- -- 12,000 / 12,000 $304,124 / $304,124
- -----------------------
(1) Value is calculated by subtracting the exercise price per share from
$31.5625, the fair market value at March 31, 2000, and multiplying such
amount by the number of shares subject to the option.
-8-
EXECUTIVE OFFICER AGREEMENTS
In June 1998, the Company entered into Severance Agreements with each
Named Executive Officer and certain other executive officers of the Company (the
"Severance Agreements"). The Severance Agreements provide that in the event such
officer is terminated without Cause (as defined therein) or such officer resigns
for Good Reason (as defined therein), the Company shall pay to such officer
severance payments equal to such officer's salary and bonus for the fiscal year
in which the termination occurs, and the Severance Agreements also provide for
the payment of certain amounts upon the occurrence of certain events. The
executive officers entering into the Severance Agreements agreed not to compete
with the Company for one year in the event that their termination entitles them
to severance payments and not to solicit any Company employees for a period of
one year after a termination of such officer's employment with the Company. The
Company's severance payment obligations and an officer's right to this
additional bonus shall terminate upon such officer's death, resignation without
Good Reason, retirement or termination for Cause.
Pursuant to an agreement dated September 13, 1988 between the Company and
Richard Riviere, the Vice President of Transaction Services of the Company and
President of Conference Plus, Inc., a subsidiary of the Company, Mr. Riviere
receives an annual base salary of not less than $75,000 during his employment
with the Company. This agreement also provides Mr. Riviere with a right of first
refusal with respect to the Company's interest in Conference Plus in the event
the Company decides to sell such interest. In addition, after his employment
with the Company terminates, Mr. Riviere has agreed not to compete with the
Company for a period of two years.
COMPENSATION AND STOCK INCENTIVE COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
the Company's executive compensation policies. It annually determines the
compensation to be paid to the executive officers of the Company. The
Compensation Committee has two outside directors. The Stock Incentive Committee
administers and determines the awards to be granted under the Company's 1995
Stock Incentive Plan and the Employee Stock Purchase Plan.
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 Hambrecht & Quist Communications Index (see the
Performance Graph) includes some of the companies which the Compensation
Committee considers. 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.
-9-
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, both the Compensation Committee and the Stock Incentive
Committee believe that equity based compensation should form a part of an
executive's total compensation package. Stock options 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. Stock options also provide executives with the opportunity to
acquire an ownership interest in the Company. The number of shares covered by
each executive's option will be determined by factors similar to those
considered in establishing base salaries. In fiscal 2000, 865,000 stock options
were granted to executive officers.
OTHER
Other benefits are generally those available to all other employees in
the Company, or a subsidiary, as appropriate.
COMPENSATION FOR CHIEF EXECUTIVE OFFICER
The Compensation Committee and the Stock Incentive Committee apply 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.
The Compensation Committee does not expect that Section 162(m) of the
Internal Revenue Code will limit the deductibility of compensation expected to
be paid by the Company in the foreseeable future.
This report is submitted by the Compensation Committee of the Board of
Directors.
Respectfully Submitted By:
The Compensation Committee The Stock Incentive Committee
Paul A. Dwyer (Chair) Paul A. Dwyer (Chair)
Robert C. Penny III Robert C. Penny III
Melvin J. Simon John W. Seazholtz
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee is currently composed of Messrs. Dwyer
(Chair), Penny and Simon, the Assistant Secretary and Assistant Treasurer of the
Company. No interlocking relationship exists 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.
Since 1984, Melvin J. Simon & Associates, Ltd. has provided accounting
and other financial services to the Company. Mr. Simon, a director and the
Assistant Secretary and Assistant Treasurer of the Company and Co-Trustee of the
Voting Trust, is the sole owner of Melvin J. Simon & Associates, Ltd. The
Company paid Melvin J. Simon & Associates, Ltd. approximately $66,000, $40,000
and $15,475 in fiscal 1998, 1999 and 2000, respectively, for its services. The
Company believes that these services are provided on terms no less favorable to
the Company than could be obtained from unaffiliated parties.
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.
-10-
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that the Company's officers
and directors, and persons who own more than ten percent of the Company's
outstanding stock, file reports of ownership and changes in ownership with the
Securities and Exchange Commission. During fiscal 2000, to the knowledge of the
Company, all Section 16(a) filing requirements applicable to its officers,
directors, and greater than ten percent beneficial owners were complied with
except that Mr. Seazholtz filed a Form 5 on June 4, 1999 reflecting a purchase
of Class A Common Stock that should have been reported on a Form 4 by May 10,
1998.
-11-
PERFORMANCE GRAPH
The following performance graph compares the quarterly percentage
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 Hambrecht & Quist Communications Index for the period commencing
December 1, 1995 (the first day of trading of the Class A Common Stock on the
Nasdaq National Market) and ending March 31, 2000. The stock price performance
shown in the performance graph is not indicative of future stock price
performance.
- - $100 INVESTED ON 12/01/95 IN STOCK OR INDEX
- - INCLUDING REINVESTMENT OF DIVIDENDS.
- - FISCAL YEAR ENDING MARCH 31.
TOTAL RETURN - DATA SUMMARY
CUMULATIVE TOTAL RETURN
---------------------------------------------
12/1/95 3/96 3/97 3/98 3/99 3/00
WESTELL TECHNOLOGIES INC. WSTL 100 285 206 196 68 490
NASDAQ Stock Market (U.S.) INAS 100 105 116 176 237 442
H & Q Communications IHQC 100 98 86 124 193 558
-12-
ACCOUNTANTS
Selection of independent auditors is made by the Board of Directors
upon consultation with the Audit Committee. The Company's independent auditors
for fiscal 2000 were Arthur Andersen LLP. The Board of Directors will vote upon
the selection of auditors for the current fiscal year at a future Board meeting.
Representatives of Arthur Andersen LLP will be present at the Annual Meeting
with the opportunity to respond to appropriate questions and to make a statement
if they desire to do so.
PROPOSALS OF SECURITY HOLDERS
A stockholder proposal to be included in the Company's proxy statement
and presented at the 2001 Annual Meeting must be received at the Company's
executive offices, 750 North Commons Drive Aurora, Illinois 60504 by no later
than July 25, 2001 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 2001 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 2000 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 2000 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.,
Vice President, Secretary, Treasurer and Chief Financial Officer, 750 North
Commons Drive, Aurora, Illinois 60504; telephone number (630) 898-2500.
-13-
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.
Vice President, Secretary, Treasurer
and Chief Financial Officer
Date: November 28, 2000
-14-
PROXY WESTELL TECHNOLOGIES, INC. PROXY
750 N. Commons Drive, Aurora, IL 60504
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
This Proxy is solicited by the Board of Directors for the Annual Meeting of Shareholders, on December 13, 2000,
11:00 a.m. local time, at the Westell Corporate Headquarters, 750 N. Common Drive, Aurora, IL 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, 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 NOTICE AND PROXY
STATEMENT FOR THE ANNUAL MEETING.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER, IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
(Comments / Change of Address)
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------------------------------------------------
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(If you have written in the above space, please
(Continued and to be signed on the other side) mark the corresponding box on the reverse side.)
- -------------------------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
WESTELL TECHNOLOGIES, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [ ]
[ ]
THE FOLLOWING MATTERS ARE PROPOSED BY THE BOARD OF DIRECTORS
1. ELECTION OF DIRECTORS: 2. In their discretion, the Proxies are authorized
Director Nominees: For Withhold For All to vote upon such other business as may properly
John W. Seazholtz, Paul A. Dwyer, All All Except come before the Annual Meeting or any Annual Meeting
Howard L. Kirby, Jr., J. W. Nelson, [ ] [ ] [ ] or any adjournment thereof. Please sign exactly as
Robert C. Penney III, Thomas A. name or names appear on this proxy. If stock is held
Reynolds, III, Bernard F. Sergesketter, jointly, each holder should sign. If signing as
Melvin J. Simon, Marc J. Zionts attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please
give full title.
---------------------------------------
INSTRUCTION: To withhold authority to
vote for any individual nominee, write
that nominee's name in the space provided Comments/Change of Address [ ]
above.
Date_____________________, 2000
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Signature
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Signature
VOTES MUST BE INDICATED (X) IN BLACK
- ------------------------------------------------------------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
PLEASE VOTE, SIGN EXACTLY AS NAME APPEARS ABOVE, DATE, AND RETURN
THIS PROXY FORM PROMPTLY USING THE ENCLOSED POSTPAID ENVELOPE.