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 Section 240.14a-11(c) or
Section 240.14a-12
AT&T CAPITAL CORPORATION
.................................................................
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] 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:
.................................................................
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):
.................................................................
4) Proposed maximum aggregate value of transaction:
.................................................................
5) Total fee paid:
.................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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________________________________________________________________________________
[Logo] AT&T
Capital Corporation
1996
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
Friday, April 19, 1996
at 9:30 a.m.
------------
The Park Avenue Club
184 Park Avenue
Florham Park, New Jersey
________________________________________________________________________________
[Logo] AT&T
Capital Corporation
________________________________________________________________________________
THOMAS C. WAJNERT 44 Whippany Road
Chairman of the Board & Morristown, NJ 07962-1983
Chief Executive Officer
March 19, 1996
Dear Fellow Stockholder:
It is my pleasure to invite you to attend AT&T Capital Corporation's 1996
Annual Meeting of Stockholders. This third annual meeting of the owners of AT&T
Capital Corporation will be held on Friday, April 19, 1996, beginning at 9:30
a.m. local time, at The Park Avenue Club, 184 Park Avenue, Florham Park, New
Jersey. The Notice of Annual Meeting and Proxy Statement accompanying this
letter describe the business to be transacted at the meeting.
I will report to you at the meeting on your Company's performance and major
developments during 1995 and our vision for the future. I welcome this
opportunity to have a discussion with AT&T Capital Corporation's stockholders
and look forward to your comments and questions.
IF YOU PLAN TO ATTEND THE MEETING, PLEASE KEEP THE ADMISSION TICKET THAT IS
ATTACHED TO THE PROXY CARD ACCOMPANYING THIS NOTICE AND PROXY STATEMENT AND
CHECK THE APPROPRIATE BOX ON YOUR PROXY CARD. YOUR NAME WILL BE PLACED ON AN
ADMISSION LIST HELD AT THE ENTRANCE TO THE MEETING. BENEFICIAL STOCKHOLDERS WHO
PLAN TO ATTEND MAY HAVE THEIR NAMES ADDED TO THE ADMISSION LIST BY SENDING A
WRITTEN NOTIFICATION, ALONG WITH PROOF OF OWNERSHIP (SUCH AS A BANK OR BROKERAGE
FIRM ACCOUNT STATEMENT), TO THE COMPANY'S CORPORATE SECRETARY'S OFFICE, 44
WHIPPANY ROAD, MORRISTOWN, NEW JERSEY 07962-1983.
Regardless of the number of shares you hold, it is important that your
shares be represented at the meeting. WHETHER OR NOT YOU PLAN TO ATTEND, PLEASE
COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD AS SOON AS POSSIBLE. Signing
your proxy card before the meeting will not prevent you from voting your shares
in person if you are present at the meeting.
I look forward to seeing you at the Annual Meeting.
Sincerely,
THOMAS C. WAJNERT
NOTICE OF ANNUAL MEETING
The Annual Meeting of Stockholders of AT&T Capital Corporation (the
'Company') will be held on Friday, April 19, 1996, beginning at 9:30 a.m. local
time, at The Park Avenue Club, 184 Park Avenue, Florham Park, New Jersey, to
consider and take action upon the following matters described in the
accompanying Proxy Statement:
(1) the election of 11 directors for the ensuing year;
(2) the appointment of Coopers & Lybrand L.L.P. as independent auditors to
examine the Company's accounts for 1996;
(3) the reapproval of the Company's 1993 Long Term Incentive Plan, as
amended to (a) increase the number of shares of common stock reserved
for issuance thereunder by 1.5 million shares to an aggregate of 3.5
million shares and (b) establish a limit on the total number of shares
of the Company's common stock with respect to which stock options and
stock appreciation rights may be granted to any participant in any
calendar year equal to 300,000 shares; and
(4) such other matters as may properly come before the meeting.
The Board of Directors has determined that owners of record of the
Company's common stock at the close of business on March 8, 1996, are entitled
to notice of and to vote at the meeting.
By Order of the Board of Directors
G. DANIEL McCARTHY
Senior Vice President, General Counsel,
Secretary and Chief Risk Management Officer
AT&T Capital Corporation
44 Whippany Road
Morristown, NJ 07962-1983
March 19, 1996
YOUR VOTE IS IMPORTANT
TO VOTE YOUR SHARES, PLEASE COMPLETE, SIGN AND DATE THE PROXY CARD, AND
RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY VOTE IN PERSON AT THE
MEETING EVEN IF YOU SEND IN YOUR PROXY.
TABLE OF CONTENTS
PAGE
----
General Information........................................................................................ 1
A -- Election of Directors................................................................................. 2
Nominees for Election................................................................................. 2
The Board of Directors and Committees of the Board.................................................... 4
Compensation of Directors............................................................................. 5
Security Ownership.................................................................................... 6
Executive Compensation................................................................................ 9
B -- Appointment of Independent Auditors................................................................... 24
C -- Reapproval of the 1993 Long Term Incentive Plan....................................................... 25
Additional Information..................................................................................... 28
Exhibit A -- 1993 Long Term Incentive Plan................................................................. A-1
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of AT&T Capital Corporation (the 'Company')
for use at the Annual Meeting of Stockholders to be held on Friday, April 19,
1996, and at any adjournment thereof. The solicitation of proxies provides all
stockholders entitled to vote on matters that come before the meeting with an
opportunity to do so whether or not they attend the meeting in person. This
Proxy Statement and the related proxy card are first being mailed to the
Company's stockholders on or about March 19, 1996.
Owners of record of the Company's common stock (the 'Common Stock') at the
close of business on March 8, 1996, are entitled to notice of and to vote at the
Annual Meeting. Such owners are entitled to one vote for each share of Common
Stock held.
The owners of a majority of the outstanding shares of Common Stock entitled
to vote at the Annual Meeting, present in person or represented by proxy, will
constitute a quorum for the transaction of business at the meeting. As of
January 1, 1996, there were 46,967,133 shares of Common Stock outstanding.
If you wish to give your proxy to someone other than the three persons
named as proxies on the enclosed card (the 'Proxy Committee'), all three names
appearing on the enclosed proxy card must be crossed out and the name of another
person or persons (not more than three) inserted. The signed card must be
presented at the meeting by the person or persons representing you.
The shares represented by a properly signed and returned proxy card will be
voted as specified by the stockholder on such card. If a proxy card is signed
and returned but no specification is made, the shares will be voted FOR the
election of all nominees for director (Item A), FOR the appointment of Coopers &
Lybrand L.L.P. as the Company's independent auditors (Item B) and FOR the
reapproval of the Company's 1993 Long Term Incentive Plan (Item C). A proxy may
be revoked by a stockholder at any time before it is voted by providing notice
of such revocation in writing to the Company's Corporate Secretary's Office (at
the Company's address set forth in the Notice of Meeting accompanying this Proxy
Statement), by submission of another proxy properly signed by such stockholder
and bearing a later date, or by voting in person at the Annual Meeting.
Abstentions with respect to Items B and C have the legal effect of votes
'AGAINST' such items and are counted in determining a quorum and votes cast.
Pursuant to New York Stock Exchange rules, brokers may vote on Items A, B and C
without receiving instructions from the beneficial owner of the shares.
It is the policy of the Company that any proxy, ballot or other voting
material that identifies the particular vote of a stockholder will be kept
confidential, except in the event of a contested proxy solicitation or as may be
required by law. Such documents are available for examination only by the
inspectors of election and certain persons associated with processing proxy
cards and tabulating the vote, although the Company may be informed whether or
not a particular stockholder has voted.
Comments from stockholders about the proxy material or about other aspects
of the business are welcome, and space is provided on the proxy card for this
purpose. Although all such notes may not be answered on an individual basis,
they are helpful to the Company's management in assessing stockholder sentiment.
A -- ELECTION OF DIRECTORS
(ITEM A ON THE PROXY CARD)
The Board has fixed the number of directors at 11. Mr. McGinn will not be
standing for re-election at this year's Annual Meeting. Each nominee for
director has consented to being named in the Proxy Statement and to serve if
elected. The Proxy Committee intends to vote for the election of the 11 nominees
listed on the following pages unless otherwise instructed on the proxy card. If
you do not wish your shares to be voted for particular nominees, please identify
the exceptions in the appropriate space provided on the proxy card.
If at the time of the meeting one or more of the nominees have become
unavailable to serve, shares represented by proxies will be voted for the
remaining nominees and for any substitute nominee or nominees designated by the
Board of Directors of the Company (the 'Board') or the Executive Committee of
the Board of Directors or, if none, the size of the Board will be reduced. The
Board knows of no reason why any of the nominees would be unable to serve. Each
of the nominees listed below, except Ms. Tart, is currently a director.
The affirmative vote of a plurality of the votes of the shares of Common
Stock present or represented and entitled to vote at the Annual Meeting is
required for the election of each nominee for director. Accordingly, if a quorum
is present, the 11 persons receiving the greatest number of votes will be
elected to serve as directors.
Certain information regarding each nominee is set forth below, including
age (as of January 1, 1996) and principal occupation, a brief account of
business experience during at least the last five years, certain other
directorships currently held and the year in which the individual was first
elected a director of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE 'FOR' EACH OF
THE FOLLOWING NOMINEES.
NOMINEES FOR ELECTION
THOMAS C. WAJNERT. Mr. Wajnert has served as Chairman and Chief Executive
Officer of the Company since July 1993. From April 1993 to July 1993, Mr.
Wajnert was President, Chief Executive Officer and Vice Chairman of the Company.
From February 1990 to March 1993, Mr. Wajnert was President and Chief Executive
Officer and a director of AT&T Capital Holdings, Inc. (formerly known as AT&T
Capital Corporation) ('Old Capital'), a wholly-owned subsidiary of AT&T Corp.
('AT&T') and a predecessor of the Company. From October 1984 to May 1993, Mr.
Wajnert was the Chief Executive Officer of AT&T Credit Holdings, Inc. (formerly
known as AT&T Credit Corporation) ('Old Credit'), an indirect, wholly-owned
subsidiary of AT&T and a predecessor of both the Company and Old Capital. Mr.
Wajnert is also Chairman of the Equipment Leasing Association of America,
Chairman of South Street Theater Company, a trustee of the AT&T Foundation and a
director of AT&T Universal Card Services Corporation, the Wharton Center for
Financial Services and JLG Industries Inc. Age: 52. Date First Elected: April
1993.
JOHN P. CLANCEY. Mr. Clancey has been the President and Chief Executive
Officer of Sea-Land Service, Inc., an ocean transportation and distribution
services corporation, since 1991. From May 1990 to July 1991, Mr. Clancey was
Executive Vice President of the Pacific Division of Sea-Land Service, Inc. Age:
50. Date First Elected: June 1993.
2
JAMES P. KELLY. Mr. Kelly has been Executive Vice President and Chief
Operating Officer of United Parcel Service of America, Inc. ('UPS') since
February 1994. From May 1992 to February 1994, Mr. Kelly was Senior Vice
President and Chief Operating Officer of UPS. From September 1990 to May 1992,
Mr. Kelly was Senior Vice President and National Operations Group Manager of
UPS. Mr. Kelly is also a director of UPS. Age: 52. Date First Elected: June
1993.
GERALD M. LOWRIE. Mr. Lowrie has been the Senior Vice President for Federal
Government Affairs of AT&T since January 1985. Age: 60. Date First Elected:
January 1993.
WILLIAM B. MARX, JR. Mr. Marx is Senior Executive Vice President of Lucent
Technologies Inc., a subsidiary of AT&T. Mr. Marx was Executive Vice President
of AT&T and Chief Executive Officer of AT&T's Multimedia Products Group, a
division of AT&T, from October 1994 to February 1996. He was Executive Vice
President of AT&T and Chief Executive Officer of AT&T's Network Systems Group, a
division of AT&T, from July 1989 to September 1994. Mr. Marx is also a director
of Massachusetts Mutual Life Insurance Company. Age: 56. Date First Elected:
April 1995.
JOSEPH J. MELONE. Mr. Melone has been President and Chief Executive Officer
of The Equitable Companies, Incorporated ('Equitable') since February 1996 and
the Chairman of The Equitable Life Assurance Society, a wholly-owned subsidiary
of Equitable since November, 1990. From November 1990 to January 1996 he was
President and Chief Operating Officer of Equitable. From 1984 to November 1990,
Mr. Melone was President of The Prudential Insurance Company of America. Mr.
Melone is also a director of Equitable, The Equitable Life Assurance Society,
Alliance Capital Management Corporation, Foster Wheeler Corporation, Donaldson,
Lufkin & Jenrette, Inc. and the American Council of Life Insurance. Age: 64.
Date First Elected: June 1993.
RICHARD W. MILLER. Mr. Miller has been Senior Executive Vice President and
Chief Financial Officer of AT&T since December 1995. From August 1993 to
November 1995, he was the Executive Vice President and Chief Financial Officer
of AT&T. From March 1990 to July 1993, Mr. Miller was the Chairman, President
and Chief Executive Officer of Wang Laboratories, Inc. ('Wang'). Age: 55. Date
First Elected: December 1993.
S. LAWRENCE PRENDERGAST. Mr. Prendergast has been the Vice President and
Treasurer of AT&T since 1983. From February 1990 to March 1993, Mr. Prendergast
was a director and Vice Chairman of Old Capital and from October 1984 to March
1990 he was a director of Old Credit. Age: 54. Date First Elected: January 1993.
MAUREEN B. TART. Ms. Tart has been Vice President and Controller of AT&T
since March 1994. From April 1993 to February 1994, Ms. Tart was Senior Vice
President and Chief Financial Officer of the Company. From February 1990 to
March 1993, Ms. Tart was Senior Vice President and Chief Financial Officer of
Old Capital. She was also Treasurer of Old Capital from February 1990 to May
1991. Age: 40.
BROOKS WALKER, JR. Mr. Walker has been a general partner of Walker
Investors, a venture capital firm, since 1978. From 1968 to 1987, Mr. Walker was
the Chairman and President of United States Leasing International, Inc. Mr.
Walker is also a director of Gap, Inc. and Pope & Talbot, Inc. Age: 67. Date
First Elected: June 1993.
MARILYN J. WASSER. Ms. Wasser has been Vice President -- Law and Secretary
of AT&T since May 1994. From December 1983 to April 1994, Ms. Wasser held
various positions in the AT&T Law Department. Age: 40. Date First Elected: April
1995.
3
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The business of the Company is managed under the direction of the Board of
Directors. There were six meetings of the Board and 17 committee meetings in
1995, with individual attendance averaging 83% of such meetings. Messrs. Lowrie,
Marx and McGinn attended less than 75% of the aggregate meetings.
Because of the number of matters requiring Board consideration, and to make
the most effective use of individual Board members' capabilities, the Board of
Directors has established several Committees to devote attention to specific
subjects and to assist it in the discharge of its responsibilities. The
functions of these Committees, their current members and the number of meetings
held during 1995 are described below.
The EXECUTIVE COMMITTEE possesses the powers of the Board to manage and
direct the business of the Company during the interval between Board meetings,
except as limited by Delaware law and except for those matters assigned to the
other Board Committees. The members of the Executive Committee, which met twice
in 1995, are Messrs. Miller (Chairman), Prendergast, Wajnert and Walker.
The COMPENSATION COMMITTEE, which consists entirely of directors
independent of the Company (i.e., directors who do not receive compensation as
an officer or employee of the Company or any of its subsidiaries), recommends to
the Board the compensation arrangements for, and grants of awards and incentive
payments to, the Company's Chief Executive Officer and certain other senior
officers who are members of the Company's Corporate Leadership Team; approves
compensation arrangements for, and grants of awards and incentive payments to,
certain other of the Company's senior officers; considers matters related to
management development and succession; administers certain of the Company's
compensation plans; periodically reviews the competitive position of the
Company's total compensation relative to the Company's peers and competitors;
and approves certain benefit plans of the Company and its subsidiaries. The
members of the Compensation Committee, which met six times in 1995, are Messrs.
Miller (Chairman), McGinn and Melone.
The AUDIT COMMITTEE, which is composed entirely of directors independent of
both the Company and AT&T, reviews the financial reporting standards and
practices of the Company and the Company's internal financial controls to
monitor the independence of the Company's public auditors, the integrity of
management and the adequacy of financial disclosures to stockholders. To further
the foregoing, the Audit Committee recommends the firm to be appointed as
independent auditors to audit the Company's financial statements; reviews the
scope and results of the audit with the independent auditors; reviews with
management and the independent auditors the Company's interim and year-end
operating results; and considers the adequacy of the internal accounting and
auditing procedures of the Company. The Company's internal auditors and the
independent auditors each have the opportunity to meet alone with the Audit
Committee and have unrestricted access to the Audit Committee. The members of
the Audit Committee, which met four times in 1995, are Messrs. Walker
(Chairman), Clancey and Kelly.
The BUSINESS REVIEW COMMITTEE, which is composed entirely of directors
independent of both the Company and AT&T, reviews, and establishes guidelines
and procedures with respect to, certain agreements, transactions or arrangements
(collectively, 'Related Party Transactions') with AT&T, customers of AT&T,
directors of the Company or entities in which a director of the Company has a
financial interest. The Business Review Committee's role is to provide the
Company with an independent committee to review, or provide guidance in
connection with, Related Party Transactions to ensure that the transactions are
fair to the Company and its stockholders. The members of the
4
Business Review Committee, which met three times in 1995, are Messrs. Melone
(Chairman), Clancey and Kelly.
The SPECIAL COMMITTEE, which is composed entirely of directors independent
of both the Company and AT&T, was created by the Company's Board of Directors on
October 3, 1995, to act upon such matters that may arise in the course of
considering alternative ways to maximize shareowner value (in connection with
AT&T's announced plans to sell its remaining interest in the Company to the
general public or another company), and in which there may be a conflict between
the interests of AT&T and those of the Company and its minority shareowners and
to make recommendations thereon to the Company's board or shareowners. The
members of the Special Committee, which met twice in 1995, are Messrs. Melone
(Chairman), Clancey, Kelly and Walker.
COMPENSATION OF DIRECTORS
Directors who do not receive compensation as an employee of the Company or
any of its affiliates (including AT&T) (collectively, 'Non-Employee Directors')
are paid an annual retainer fee of $18,500 and a fee of $1,000 for each meeting
of the Board that such director attends, and an annual retainer fee of $3,250
for service as Chairman of any committee of the Board and a fee of $1,000 for
each committee meeting attended by such director. All Non-Employee Directors are
reimbursed for out-of-pocket expenses incurred in attending meetings.
On an annual basis on the day after the Company's annual stockholders'
meeting, Non-Employee Directors receive an option to purchase 1,000 shares of
the Company's Common Stock at the fair market value of the Common Stock on the
date of the grant. Such options vest on the day before the Company's annual
stockholders' meeting next following the date of the grant and would generally
be forfeited to the Company if the Non-Employee Director ceases to be a member
of the Board prior to such date.
In addition, each Non-Employee Director may from time to time elect to
receive, in lieu of the cash retainer that would otherwise be payable to such
Non-Employee Director, on each date on which such retainer would otherwise be
payable during the period that such election is in effect, either (i) restricted
stock with a fair market value as of such payment date equal to the amount of
such retainer payment or (ii) an option to purchase that number of shares of
Common Stock that has an aggregate fair market value as of such payment date
equal to two and one-half times the amount of such retainer payment, with an
exercise price per share equal to the fair market value of the Common Stock on
such date.
Such restricted stock is non-transferable until the day before the
Company's annual stockholders' meeting next following the date of grant and
would be generally forfeited to the Company if the Non-Employee Director ceases
to be a member of the Board prior to such date.
Such options would be exercisable only during the period commencing on the
day before the annual meeting of the Company's stockholders next following the
date of grant and ending 10 years after the date of grant, and may be exercised
in whole or in part at any time during such period. If a Non-Employee Director
ceases to be a member of the Board before such options become exercisable, such
options would be cancelled.
Pursuant to the Company's 1993 Directors' Deferred Compensation Plan
('DDCP'), each Non-Employee Director may elect to defer all or any part of the
cash compensation payable to such Non-Employee Director until a date specified
by the Non-Employee Director or, if earlier, the March 15 following the calendar
year during which such Non-Employee Director's service as a member of the
5
Company's Board terminates. Deferred compensation is credited to a deferred
compensation bookkeeping account and accrues interest at a per annum rate equal
to the yield as of the first day of the applicable deferral year on United
States Treasury Notes having a maturity of 10 years, plus 5 percent. Upon a
'change in control' (as defined in the DDCP), all deferred amounts will be paid
in a lump sum within 3 business days after such change in control.
SECURITY OWNERSHIP
The following tables set forth information with respect to beneficial
ownership of the Company's Common Stock and AT&T's common stock as of January 1,
1996 by each director, by each nominee for director, by each of the five
executive officers of the Company named in the Summary Compensation Table on
page 14, by all directors and executive officers of the Company as a group, and
by each person who is known to be the beneficial owner of more than 5% of the
Common Stock:
(a) SECURITY OWNERSHIP OF BENEFICIAL OWNERS OF MORE
THAN 5% OF THE COMPANY'S VOTING SECURITIES
AMOUNT OF
AND NATURE
NAME AND ADDRESS OF OF BENEFICIAL PERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------------ --------------------------------------------------------------- ------------- --------
Common Stock AT&T Capital Holdings, Inc.(1) ................................ 6,037,500 12.9%
1013 Centre Road
Wilmington, DE 19805
Common Stock AT&T Credit Holdings, Inc.(1) ................................. 34,212,500 72.8%
1013 Centre Road
Wilmington, DE 19805
- ------------
(1) AT&T Credit Holdings, Inc. is a direct, wholly-owned subsidiary of AT&T
Capital Holdings, Inc., which is a direct, wholly-owned subsidiary of AT&T.
Accordingly, both AT&T and AT&T Capital Holdings, Inc. may be deemed the
beneficial owner of all 40,250,000 shares of Common Stock shown in the
table. On September 20, 1995, AT&T announced plans to sell its remaining
equity interest in the Company to the general public or another company.
6
(b) SECURITY OWNERSHIP OF DIRECTORS, NOMINEES FOR DIRECTOR AND MANAGEMENT
I. EQUITY SECURITIES OF AT&T CAPITAL CORPORATION
AMOUNT OF
AND NATURE
OF
BENEFICIAL
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNERSHIP(1)
- ------------------------ ------------------------------------------------------------------------ ------------
Common Stock John P. Clancey......................................................... 3,927(3)
Common Stock James P. Kelly.......................................................... 6,315(3)
Common Stock Gerald M. Lowrie........................................................ 1,000
Common Stock William B. Marx, Jr..................................................... 0
Common Stock G. Daniel McCarthy...................................................... 48,891(2)(3)
Common Stock Richard A. McGinn....................................................... 0
Common Stock Joseph J. Melone........................................................ 4,000(3)
Common Stock Richard W. Miller....................................................... 2,000
Common Stock Ruth A. Morey........................................................... 45,481(2)(3)
Common Stock S. Lawrence Prendergast................................................. 2,000
Common Stock Irving H. Rothman....................................................... 73,597(2)(3)
Common Stock Maureen B. Tart......................................................... 2,000
Common Stock Charles D. Van Sickle................................................... 62,934(2)(3)
Common Stock Thomas C. Wajnert....................................................... 124,658(2)
Common Stock Brooks Walker, Jr....................................................... 10,565(3)
Common Stock Marilyn J. Wasser....................................................... 0
All directors and executive officers (17 persons) as a group, including the above................. 419,968(4)
- ------------
(1) Such ownership interests for each individual director and named executive
officer and for all directors and executive officers as a group do not
exceed 1 percent of the outstanding Common Stock.
(2) Pursuant to the Company's Senior Management Share Ownership Policy, as
amended (the 'Ownership Policy') originally adopted by the Compensation
Committee on July 23, 1993, as a condition to continued employment in any of
certain senior management positions with the Company, each of the named
executive officers, as well as other members of the Company's senior
management team, (i) were required to purchase the full number of shares
offered to such executives under the Company's 1993 Leveraged Stock Purchase
Plan (the 'LSPP') and/or the Company's 1993 Long Term Incentive Plan (the
'LTIP') and (ii) are prohibited from making any 'Disqualifying Disposition'
of 'Eligible Shares' (as such terms are defined in the Ownership Policy)
during the term of the Ownership Policy (i.e., until August 31, 2000). Under
the LSPP and/or the LTIP, the named executive officers were required to
purchase (and did purchase) the following number of shares of the Company's
Common Stock: Mr. Wajnert, 124,558 shares; Mr. Rothman, 53,372 shares; Mr.
Van Sickle, 47,093 shares; Mr. McCarthy, 42,697 shares, and Ms. Morey,
38,930 shares. Such purchases were funded in large part by loans made by the
Company to the named executive officers (see 'Indebtedness of Management'
beginning on page 23 for additional information regarding such loans).
(footnotes continued on next page)
7
(footnotes continued from previous page)
(3) Includes shares obtainable upon exercise of stock options which are
exercisable prior to March 1, 1996 as follows: Mr. Clancey -- 2,000; Mr.
Kelly -- 5,565; Mr. McCarthy -- 6,194; Mr. Melone -- 2,000; Ms.
Morey -- 5,551; Mr. Rothman -- 20,225; Mr. Van Sickle -- 15,841; and Mr.
Walker -- 5,565.
(4) Includes beneficial ownership of 62,941 shares that may be acquired within
60 days pursuant to stock options awarded under employee incentive
compensation plans.
II. EQUITY SECURITIES OF AT&T
AMOUNT OF
AND NATURE
OF
BENEFICIAL
TITLE OF CLASS NAME OF BENEFICIAL OWNER OWNERSHIP(1)
- ------------------------ ------------------------------------------------------------------------ ------------
Common Stock John P. Clancey......................................................... 0
Common Stock James P. Kelly.......................................................... 0
Common Stock Gerald M. Lowrie........................................................ 106,730(2)
Common Stock William B. Marx, Jr..................................................... 150,395(2)
Common Stock G. Daniel McCarthy...................................................... 1,232(2)
Common Stock Richard A. McGinn....................................................... 78,654(2)
Common Stock Joseph J. Melone........................................................ 0
Common Stock Richard W. Miller....................................................... 71,481(2)
Common Stock Ruth A. Morey........................................................... 3,171(2)
Common Stock S. Lawrence Prendergast................................................. 31,599(2)
Common Stock Irving H. Rothman....................................................... 15(2)
Common Stock Maureen B. Tart......................................................... 21,578(2)
Common Stock Charles D. Van Sickle................................................... 0(2)
Common Stock Thomas C. Wajnert....................................................... 12,818(2)
Common Stock Brooks Walker, Jr....................................................... 125
Common Stock Marilyn J. Wasser....................................................... 16,146(2)
All directors and executive officers (17 persons) as a group, including the above................. 493,966(3)
- ------------
(1) Such ownership interests for each individual director and named executive
officer and for all directors and executive officers as a group do not
exceed 1 percent of AT&T's outstanding common stock.
(2) Includes shares obtainable upon exercise of stock options which are
exercisable prior to March 1, 1996 as follows: Mr. Lowrie -- 102,582; Mr.
Marx -- 147,238; Mr. McCarthy -- 1,200; Mr. McGinn -- 69,653; Mr.
Miller -- 62,187; Mr. Prendergast -- 31,105; Ms. Tart -- 17,697; Mr.
Wajnert -- 12,587 and Ms. Wasser -- 13,127.
(3) Includes beneficial ownership of 457,376 shares that may be acquired within
60 days pursuant to stock options awarded under employee incentive
compensation plans.
------------------------
The Company is required to identify any director or executive officer who
failed timely to file with the Securities and Exchange Commission a required
report relating to ownership and changes in ownership of the Company's equity
securities. Based on material provided to the Company, no director or executive
officer so failed to file such a report.
8
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee of the Board (the 'Committee') is responsible
for approving and recommending to the Board the salaries, annual bonus and
long-term incentive payments, grants and awards for all the Company's executive
officers, including the Company's Chief Executive Officer (the 'CEO'). The
following report describes the actions of the Committee and the Board regarding
compensation of executive officers for 1995.
COMPENSATION PHILOSOPHY
The Company's compensation programs are designed to link an executive's
compensation to the performance of the Company and the interests of stockholders
and to provide competitive compensation for executives. For 1995, the Company
targeted total annual cash compensation at approximately 85% of the median total
annual cash compensation of a select group of leasing and finance companies and
publicly traded banking and financial services companies that compete directly
with the Company in its principal businesses for capital and executive talent
(the 'Peer Group'). Except for the eleven leasing and finance companies in the
Peer Group that are not publicly traded, these are the same companies whose
performance is reflected in the Performance Graph that follows this report (page
19).
The compensation mix for the Company's executives reflects a balance of
annual awards, including cash incentive awards and long-term equity-based
awards. Annual cash incentive awards are granted based on the achievement of the
Company's financial targets and individual performance. Emphasis, however, is
placed on plans that provide awards based on price appreciation with respect to,
and dividends paid on, the Company's Common Stock. These plans are also
structured to attract, motivate, and retain the valuable executive talent
necessary for the continued success of the Company.
Consistent with the emphasis on equity-based plans, the Company's executive
officers at the time of the IPO were required by the Company to purchase,
contemporaneously with the IPO and pursuant to the LSPP, shares of the Company's
Common Stock at the IPO price.
For an executive officer to be eligible to receive stock option grants and
other awards under the Company's 1993 Long Term Incentive Plan (the 'LTIP'),
such executive officer must generally hold the shares that such executive was
required to purchase under the LSPP. In addition, pursuant to the Company's
Senior Management Share Ownership Policy (the 'Share Ownership Policy'), as a
condition to continued employment, the Company's executive officers are, with
certain exceptions, prohibited from selling shares purchased under the LSPP and
LTIP until August 31, 2000. As indicated in the Table entitled 'Equity
Securities of AT&T Capital Corporation' beginning on page 7, Mr. Wajnert, the
Company's CEO, owns 124,658 common shares. As a group, the executive officers
own 388,161 common shares (see note 2 to the Table for a more complete
description of the Share Ownership Policy).
Section 162(m) of the Internal Revenue Code, enacted as part of the Omnibus
Budget Reconciliation Act of 1993, generally denies a publicly-held corporation
a federal income tax deduction for compensation in excess of $1 million paid to
its CEO or any of its other four most highly compensated executive officers (the
'named executives'). Exceptions are made for, among other things,
performance-based compensation.
Although the Company intends to satisfy the requirements for
performance-based compensation with respect to options and long-term cash
incentive compensation for named executives, the Committee has been advised that
options granted under the LSPP and the LTIP as well as amounts paid
9
pursuant to the Share Performance Incentive Plan (the 'SPIP') at this time
appear not to be subject to Section 162(m) as a result of the application of
various transition rules. Although the awards under such plans are in essence
performance-based, before the transition period expires, the Company intends to
propose certain changes to such plans to put them in technical compliance with
the performance-based exception. To ensure that annual incentive compensation
paid to named executives qualifies as performance-based, the Company adopted the
1995 Senior Executive Annual Incentive Plan (the 'SEAIP'). The Company's six
executive officers are currently the sole eligible participants in the SEAIP.
Notwithstanding the maximum awards payable under the SEAIP, the Committee has
exercised, and intends to continue to exercise, its discretion under such plan
to ensure the awards thereunder are consistent with the compensation philosophy
described herein. No compensation paid to any named executive officer for 1995
was nondeductible because of Section 162(m).
The Committee believes that, on balance, the Company's executive
compensation programs are achieving the goal of linking a substantial portion of
compensation to the Company's performance and to the interests of shareholders.
For example, 57% of the named executives' total cash compensation for 1995 was
from incentives tied directly to the Company's performance. In particular, Mr.
Wajnert received 57% of his cash compensation from performance-based incentives,
compared to 49% in 1994. When the potential present value of stock option grants
are included (assuming (i) the 10% annual rate of appreciation used in the table
entitled 'Option Grants in 1995' on page 16 and (ii) a discount rate of 6.5%),
more than 79% of total direct compensation paid in 1995 to the named executive
officers was from such incentives. The Committee believes that the compensation
program and the Share Ownership Policy appropriately align executive
compensation with the creation of shareholder value.
COMPENSATION ELEMENTS
The Company's executive officer compensation consists of two principal
elements: (1) an annual component and (2) a long-term component. The policies
with respect to each of these elements, as well as the basis for determining the
compensation of the CEO, are described below.
ANNUAL COMPONENT
Individual target incentive amounts under the Company's SEAIP, as described
below, and base salaries were targeted on a combined basis at approximately 85%
of the median total annual cash compensation of the Peer Group. For 1995,
because of overperformance by the executive officers, total annual cash
compensation paid to the executive officers ranged from 140% to 170% of such
target and 119% to 145% of the median total annual cash compensation of the Peer
Group. The allocation of annual cash compensation between an individual's target
incentive amount and his or her base salary is made by the Committee based on
its discretionary assessment of the appropriate level of fixed pay (base salary)
versus variable pay (target incentive amount). The SEAIP provides for annual
cash awards based on Company and individual performance during the year. Subject
to the Committee's discretion to pay a lesser amount, the maximum amount
available for payment of awards for each participant is equal to 1% of the
Company's consolidated net income (after adjustment to omit the effects of any
extraordinary items and the cumulative effects of changes in accounting
principles) for such year. Cash awards payable to participants in the SEAIP, to
the extent amounts are available for payment, may be determined by the Committee
by considering the Company's performance goals and the participant's target
award. As discussed below, cash awards paid to the executive officers for 1995
under the SEAIP ranged from 225% to 289% of individual target incentive amounts.
10
A participant's target award is determined by multiplying the participant's
target percentage by his or her annual base salary. Individual target
percentages are established by the Committee and, for 1995, ranged from
50% - 60% of base salary.
Performance criteria are selected by the Committee for such calendar year
and may be comprised of several factors related to the Company's financial and
strategic performance and the participant's individual performance. For 1995,
the performance criteria were weighted as follows: 40% on earnings per share,
10% on annual financing volumes, 10% on the ratio of the Company's operating
expenses to net revenue, 10% on the percentage of the Company's non-AT&T related
earnings at year end and 30% on shared and individual objectives. The
performance goals established by the Committee were generally exceeded for 1995.
Shared and individual objectives are established by the Committee for the
CEO, and the Committee reviews the objectives established by the CEO for each of
the other executive officers. For 1995, each category of objectives was equally
weighted in determining SEAIP awards. Shared objectives for 1995 focused on
efforts to integrate change management and cost reduction initiatives; implement
strategic initiatives in global vendor financing, global syndication capability,
financing services for small and mid-sized businesses, and global
high-technology asset management; implement global technology initiatives;
enhance communications with investors, members and the Company's Board of
Directors; reinforce standards for enterprise leadership; and deploy quality
initiatives. Individual objectives were set in accordance with the Company's
policy that individual objectives support strategic and operational objectives
by reflecting commitment to three interest groups: stockholders, customers, and
employees (whom the Company refers to as 'members'). Individual performance
objectives varied by executive officer. The Committee makes a subjective
assessment of executive performance vis-a-vis the shared and individual
performance objectives. For 1995, the Committee determined that all executive
officers exceeded their shared and individual performance objectives.
LONG-TERM COMPONENT
The long-term component of executive compensation, which is designed to
align stockholders' and executive officers' interests, consists of awards under
the LTIP and the SPIP. Under the LTIP, the Committee may grant various
stock-based awards, including stock options, stock appreciation rights,
restricted stock awards, performance shares, and other stock awards.
Together, awards under the LTIP and SPIP are targeted to provide an
opportunity for long-term compensation at the median long-term compensation
opportunity provided by the Peer Group. Specific performance factors, either
individual or Company-based, were not taken into account by the Committee in
determining these target awards. Stock options were granted in 1995 with an
exercise price equal to the fair market value of the Company's Common Stock on
the date of the grant and are generally exercisable between one and ten years
from the date granted.
SHARE PERFORMANCE INCENTIVE PLAN
Under the SPIP (which is further described in the notes to the Long-Term
Incentive Plans table on page 18), in 1993 executive officers received awards
entitling them to receive cash payouts with respect to each of the three-year
performance periods ending on June 30, 1996, 1997, 1998, 1999 and 2000,
respectively, depending on the Company's total return to stockholders during
each period as measured against two benchmarks. The Company's total return to
stockholders is determined in accordance with a calculation methodology
established by the Compensation Committee and may be adjusted by the Committee
to reflect transactions affecting the Company's stock price during a performance
period (e.g.,
11
a stock dividend, merger or other corporate transaction). No additional awards
can be made under the SPIP.
One benchmark is the average Total Return during such performance period
relative to a benchmark group of companies (the 'Benchmark Group'). Because not
all the Peer Group companies are publicly traded, the Committee determined that
the Benchmark Group for purposes of the SPIP would be a group of 24 New York
Stock Exchange traded companies, each of which has a current market value
relatively similar to that of the Company and is a competitor of the Company in
the leasing or finance business. These are the same companies whose performance
is reflected in the Performance Graph that follows this report (on page 19). In
certain circumstances, the Committee may change its selection of companies that
comprise the Benchmark Group for purposes of the SPIP. See note 2 to the
Performance Graph for additional information about the Benchmark Group.
The average Total Return of the Benchmark Group is determined by first
calculating the average Total Return for each of two sub-groups within the
Benchmark Group (one sub-group consists of 14 commercial banks and the other
sub-group consists of 10 leasing and finance companies), then averaging the
average Total Return of the two sub-groups. Within each sub-group, Total Return
is calculated in a manner consistent with the calculation of Total Return for
purposes of the Performance Graph. This methodology for calculating the Total
Return of the Benchmark Group is employed because of the significantly higher
capitalization level of the bank sub-group relative to the leasing and finance
company sub-group, and the importance of giving the leasing and finance
companies in the Benchmark Group a significant amount of weight in determining
the Total Return of the Benchmark Group.
Assuming that the Company has met the second benchmark as described below,
the target payout for such period will be achieved if the Company's Total Return
for such period exceeds the average Total Return of the Benchmark Group for such
period by 1.5 percentage points. The maximum payout will be achieved if the
Company's Total Return exceeds the average Total Return of the Benchmark Group
by at least 3.0 percentage points.
The second benchmark is designed to ensure that no payout will be achieved
unless Total Return exceeds a 'risk-free' rate of return without regard to the
level of relative performance. The second benchmark is the interest rate on
three-year Treasury Notes as of the beginning of such performance period. If the
Company's Total Return during such performance period does not exceed such
'risk-free' rate by at least 1.5 percentage points, no payouts will be made
under the SPIP with respect to such period. (For additional information
regarding the SPIP and the Benchmark Group, see note 1 to the Long Term
Incentive Plans table on page 18 and note 2 to the Performance Graph beginning
on page 19).
The allocation of long-term compensation awards between awards under the
LTIP and awards under the SPIP was made by the Committee based on its subjective
assessment of the appropriate level of stock-based versus cash-based long-term
awards. Specific performance factors, either individual or Company, were not
taken into account by the Committee in determining the size and mix of these
long-term awards.
CEO COMPENSATION
Mr. Wajnert's 1995 performance was reviewed by the Committee which made
recommendations to the Board concerning the annual component (base salary and
annual incentive) and long-term component (options) of his compensation.
12
ANNUAL COMPONENT
The CEO's salary was increased 10.6% to $510,000 by the Committee effective
March 1, 1995. After taking into account such increase, the CEO's base salary is
approximately 17% below the median salary for CEOs within the Peer Group.
For 1995, the CEO received an annual incentive payout of $677,808 under the
Company's SEAIP. The payout under the SEAIP represented 225% of the CEO's target
annual award. This payment was based, in large part, on the facts that the
Company exceeded its earnings per share (EPS) target and that, in the
Committee's judgment, the CEO achieved or exceeded his individual performance
goals.
In addition to leading the Company through a financially successful year,
the CEO exceeded both his shared and individual performance objectives. The
objectives for which the CEO was accountable included shared objectives with
other members of the corporate leadership team for change management and cost
reduction, implementation of several strategic business and technology
initiatives, enhancing communications with various constituencies, reinforcing
leadership standards and deploying quality initiatives.
LONG-TERM COMPONENT
The CEO's long-term compensation opportunity from awards under the SPIP and
option grants under the LTIP approximates 59% of his total compensation for
1995. The CEO's total performance based awards (annual and long term incentives)
represent approximately 83% of his total compensation. The Committee believes
that an appropriate amount of pay is contingent upon the performance of the
Company, and that the CEO's compensation is properly aligned with the creation
of shareholder value.
The Compensation Committee
Richard W. Miller, Chairman
Richard A. McGinn
Joseph J. Melone
13
The following table sets forth the compensation paid during the past three
fiscal years to the Company's Chief Executive Officer and the four most highly
compensated executive officers in 1995.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------- ------------------------------
AWARDS PAYOUTS
--------------------- ------------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING ALL
COMPENSATION AWARD(s) OPTIONS(3)/ LTIP OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) ($)(2) SARS(#) PAYOUTS($)(4) COMPENSATION($)(5)
- ------------------------------ ----- --------- --------- -------- --------- -------- ------------- ------------------
Thomas C. Wajnert, Chairman of
the Board & Chief Executive
Officer..................... 1995 502,079 677,808 11,718 0 60,000 218,228 103,935
1994 452,838 441,755 23,207 0 50,000 209,416 81,888
1993 371,750 342,032 24,875 0 206,941 246,623 25,302
Irving H. Rothman, Group
President................... 1995 291,768 376,381 4,960 0 10,500 192,000 49,458
1994 271,666 217,360 1,447 0 28,725 0 47,832
1993 252,083 233,350 0 0 78,600 205,508 3,954
Charles D. Van Sickle,
Group President............. 1995 284,344 346,900 7,594 0 10,500 0 46,684
1994 250,000 205,449 6,086 0 24,341 0 41,588
1993 220,833 191,688 657 0 70,527 20,985 3,750
G. Daniel McCarthy, Senior
Vice President, General
Counsel, Secretary and Chief
Risk Management Officer..... 1995 233,414 337,283 3,119 0 7,500 0 41,392
1994 217,333 167,343 5,154 0 13,194 0 36,745
1993 180,500 156,759 2,639 0 58,246 1,653 10,965
Ruth A. Morey,
Senior Vice President and
Corporate Resources
Officer..................... 1995 231,798 266,568 6,437 0 7,500 0 40,617
1994 206,000 169,287 4,798 0 12,551 0 33,815
1993 163,750 142,235 598 0 53,557 20,520 9,866
- ------------
(1) Includes (a) dividend equivalents paid to Mr. Wajnert with respect to
long-term performance shares prior to the end of the applicable three-year
performance periods and (b) tax payment reimbursements on behalf of Mr.
Wajnert, Mr. Rothman, Mr. Van Sickle, Mr. McCarthy and Ms. Morey.
(2) The named executive officers each purchased at fair market value shares of
the Company's Common Stock (which shares are subject to certain transfer
restrictions) under the LSPP in 1993 (see note 2 to the Security Ownership
table beginning on page 7 and 'Indebtedness of Management' beginning on page
23 for additional information regarding the LSPP). Under the LSPP, the named
executive officers purchased the following number of shares of the Company's
Common Stock which they still hold as restricted shares: Mr. Wajnert,
124,558 shares; Mr. Rothman, 53,372 shares; Mr. Van Sickle, 47,093 shares;
Mr. McCarthy, 42,697 shares; and Ms. Morey, 38,930 shares. Mr. Wajnert's
aggregate
(footnotes continued on next page)
14
(footnotes continued from previous page)
AT&T performance shares (i.e., awards of units equivalent in value to AT&T
common shares, the payout with respect to which may range from 0% to 150% of
such performance shares based on AT&T's return-to-equity performance
compared to a target) as of December 31, 1995 is 3,659 performance shares,
3,659 of which performance shares vested on December 31, 1995. The value of
Mr. Wajnert's performance shares (assuming target payouts) as of December
31, 1995 is $236,463. As indicated in note (1) above, Mr. Wajnert is
entitled to receive dividend equivalents with respect to such performance
shares. Such performance shares were all granted prior to 1994.
(3) Includes options to purchase the Company's Common Stock and options to
purchase AT&T common stock. All options to purchase AT&T common stock were
awarded prior to the IPO in 1993. All amounts indicated for 1994 and 1995
represent options to purchase the Company's Common Stock and amounts
indicated for 1993 are as follows: Mr. Wajnert was awarded an option to
purchase 12,587 shares of AT&T common stock and options to purchase 194,354
shares of the Company's Common Stock; Mr. Rothman was awarded an option to
purchase 2,350 shares of AT&T common stock and options to purchase 76,250
shares of the Company's Common Stock; Mr. Van Sickle was awarded an option
to purchase 2,350 shares of AT&T common stock and options to purchase 68,177
shares of the Company's Common Stock; Mr. McCarthy was awarded an option to
purchase 1,200 shares of AT&T common stock and options to purchase 57,046
shares of the Company's Common Stock; and Ms. Morey was awarded an option to
purchase 1,100 shares of AT&T common stock and options to purchase 52,457
shares of the Company's Common Stock. The following table entitled 'Option
Grants in 1995' (page 16) provides additional information regarding the
option grants disclosed in this column.
(4) Includes distributions in 1993, 1994 and 1995 to Mr. Wajnert of performance
shares whose three-year performance periods ended December 31, 1992,
December 31, 1993 and December 31, 1994, respectively. The value of 3,000
AT&T restricted shares which vested in 1993 are also reflected in his
payouts for that year. The 1993 amounts for Messrs. Rothman, Van Sickle and
McCarthy and Ms. Morey reflect cash payouts under the Company's 1990
Long-Term Incentive Compensation Plan. The value of 3,000 AT&T restricted
shares which vested in 1993 and the value of 3,000 AT&T restricted shares
which vested in 1995 are also reflected in Mr. Rothman's payouts for 1993
and 1995.
(5) Includes (a) Company contributions in 1995 to the Company's Retirement and
Savings Plan and related non-qualified plans (Mr. Wajnert, $87,567; Mr.
Rothman, $49,458; Mr. Van Sickle, $46,684; Mr. McCarthy, $41,392; and Ms.
Morey, $40,617), and (b) the dollar value of the benefit of premiums paid
for split-dollar life insurance policies (Mr. Wajnert, $16,368). Under the
Company's Retirement and Savings Plan and related non-qualified retirement
plans, an eligible participant may make a basic contribution of 1% to 6% of
annual pay (i.e., salary and annual bonus), and the Company contributes a
matching payment equal to two-thirds of the basic contribution. The Company
also makes a uniform points contribution to each participant based on pay
and service currently equal to 6% to 13% of annual pay. The amounts for 1993
include Company contributions under the AT&T Long-Term Savings Plan. Under
the AT&T Long-Term Savings Plan, an eligible employee may make a basic
contribution of 2% to 6% of salary and bonus, and AT&T contributes an amount
equal to two-thirds of the basic contribution. Certain IRS limitations cause
executive officers and certain other managers to lose AT&T contributions and
certain senior managers of AT&T (including Mr. Wajnert) received a lump sum
payment in the following calendar year equal to any lost AT&T contribution.
Neither Mr. Wajnert nor any other member continues to participate in the
AT&T Long-Term Savings Plan (see 'Defined Benefit Plan Retirement Benefits'
beginning on page 20).
15
The following table sets forth the number of shares of the Company's Common
Stock subject to stock options granted to the individuals listed in the Summary
Compensation Table during 1995, together with related information.
OPTION GRANTS IN 1995
INDIVIDUAL GRANTS
-------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES PERCENT OF ANNUAL RATE OF STOCK
UNDERLYING TOTAL OPTIONS EXERCISE PRICE APPRECIATION
OPTIONS GRANTED TO OR BASE FOR OPTION TERM(3)
GRANTED EMPLOYEES IN PRICE EXPIRATION ---------------------
NAME (#)(1) FISCAL YEAR(2) ($/SH) DATE 5%($) 10%($)
- ------------------------------------------- --------- -------------- -------- ---------- -------- ----------
Thomas C. Wajnert.......................... 60,000 18.016% $25.00 1/19/05 $943,341 $2,390,613
Irving H. Rothman.......................... 10,500 3.153% 25.00 1/19/05 165,084 418,357
Charles D. Van Sickle...................... 10,500 3.153% 25.00 1/19/05 165,084 418,357
G. Daniel McCarthy......................... 7,500 2.252% 25.00 1/19/05 117,917 298,826
Ruth A. Morey.............................. 7,500 2.252% 25.00 1/19/05 117,917 298,826
- ------------
(1) Options become exercisable within three years after the grant date.
(2) The indicated percentages represent the aggregate options to purchase the
Company's Common Stock granted to the named executive officers expressed as
a percentage of the aggregate of options to purchase the Company's Common
Stock granted to all members of the Company and its subsidiaries in 1995.
(3) The 5 and 10 percent growth rates are set forth in accordance with the rules
of the Securities and Exchange Commission. Because the exercise price for
such options equals the market price of the Common Stock on the date of
grant, no gain to the executives is possible without an increase in the
stock price, which increase would benefit the stockholders as a whole. Zero
growth in the stock price will result in zero realizable value to the
executive. The 5 and 10 percent growth rates are intended for illustration
only and are not intended to be predictive of future growth, if any; the
actual value, if any, that may be realized by any executive will depend on
the market price of the Common Stock on the date of exercise.
16
The following table sets forth the number of shares of the Company's Common
Stock subject to stock options exercised by the individuals listed in the
Summary Compensation Table during 1995, together with related information, and
the value of unexercised options.
AGGREGATED COMPANY OPTION/SAR EXERCISES IN 1995
AND YEAR-END OPTION/SAR VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)
SHARES ------------------ -------------------
ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) VALUE REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ------------------------------------- ----------- ----------------- ------------------ -------------------
Thomas C. Wajnert.................... 0 0 0/304,354 $ 0/$3,737,799
Irving H. Rothman.................... 0 0 10,161/105,314 142,889/1,274,031
Charles D. Van Sickle................ 0 0 7,725/95,293 108,632/1,156,320
G. Daniel McCarthy................... 0 0 2,883/74,857 40,542/877,710
Ruth A. Morey........................ 0 0 2,532/69,976 35,606/823,629
The following table sets forth the number of shares of AT&T common stock
subject to stock options exercised by the individuals listed in the Summary
Compensation Table during 1995, together with related information, and the value
of unexercised options.
AGGREGATED AT&T OPTION/SAR EXERCISES IN 1995
AND YEAR-END OPTION/SAR VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END(#) FISCAL YEAR-END($)
SHARES ------------------ --------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------- ----------- ----------- ------------------ --------------------
Thomas C. Wajnert........................... 12,535 $ 311,330 12,587/37,500 $ 173,857/$489,061
Irving H. Rothman........................... 2,350 31,284 0/0 0/0
Charles D. Van Sickle....................... 9,585 228,572 0/0 0/0
G. Daniel McCarthy.......................... 0 0 1,200/0 16,575/0
Ruth A. Morey............................... 2,231 46,549 0/0 0/0
17
The following table sets forth, with respect to the individuals listed in
the Summary Compensation Table, awards to such individuals during 1993 under the
Company's 1993 Share Performance Incentive Plan (and related information).
Although the awards were made in 1993, a portion of the awards relates to a
performance period that began in 1995 (see note 1 below).
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1995
ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF PERFORMANCE NON-STOCK PRICE-BASED PLANS
SHARES, UNITS OR OR OTHER PERIOD -------------------------------------
OTHER RIGHTS UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME ($ OR #) OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
- -------------------------------------- ---------------- ---------------- --------- ---------- ----------
Thomas C. Wajnert..................... (1) 1993-2000 (1) $2,201,787 $4,403,575
Irving H. Rothman..................... (1) 1993-2000 (1) 1,232,084 2,464,167
Charles D. Van Sickle................. (1) 1993-2000 (1) 1,232,084 2,464,167
G. Daniel McCarthy.................... (1) 1993-2000 (1) 978,142 1,956,283
Ruth A. Morey......................... (1) 1993-2000 (1) 978,142 1,956,283
- ------------
(1) The AT&T Capital Corporation 1993 Share Performance Incentive Plan (the
'SPIP') was adopted on June 10, 1993. The purpose of the SPIP is to reward
key members of the Company's management team, including the named executive
officers, for increases in stockholder value that exceed those of other
financial services companies. The SPIP will remain in effect through June
30, 2000. Under the SPIP, eligible employees, including the named executive
officers, received awards entitling them to receive cash payouts with
respect to each of the three-year 'performance periods' ending June 30,
1996, 1997, 1998, 1999 and 2000, respectively, provided that their
employment has not terminated prior to the end of the applicable performance
period. See 'Compensation Committee Report on Executive Compensation --
Long-Term Component -- Share Performance Incentive Plan' above for a
description of the SPIP.
18
PERFORMANCE GRAPH
The following line graph compares the cumulative total return(1) on an
investment in the Company's Common Stock during the period beginning on July 28,
1993 (the first day that the Common Stock was publicly traded) and ending on
December 31, 1995, with that of (i) the Standard & Poor's ('S&P') 500 Stock
Index and (ii) the Benchmark Group(2).
[PERFORMANCE GRAPH]
AT&T CAPITAL CORPORATION 100 102.99 91.31 165.68
S&P 500 100 105.61 107.01 147.20
BENCHMARK GROUP 100 99.87 100.03 151.82
7/28/93 12/31/93 12/31/94 12/31/95
(1) Assumes $100 invested on July 28, 1993 in the Company's Common Stock (at
the closing price of the Common Stock on such date), the S&P 500 Index
and the common stocks of the Benchmark Group. Cumulative total return
assumes reinvestment of dividends.
(2) The Benchmark Group is currently composed of a group of 24 publicly
traded financial services companies, each of which is in the leasing or
finance business. The performance of the Benchmark Group companies is
used by the Company to determine awards made to participants in the
Company's SPIP (see the note to the Long-Term Incentive Plans table on
page 18 for more information regarding the SPIP). The current members of
the Benchmark Group are: Amsouth Bancorporation, Bancorp Hawaii Inc.,
Bank of Boston Corp., Beneficial Corp., Comdisco, Inc., First Bank
System, Inc., First of America Bank Corp., First Virginia Banks, Inc.,
Firstar Corp., GATX, Corp., The FINOVA Group, Inc. (formerly 'GFC
Financial Corp.'), Household International Inc., Integra Financial Corp.,
Anixter International Inc. (formerly 'Itel Corp.'), MBNA Corp., PHH
Corp., Republic New York Corp., Rollins Truck Leasing Corp., Ryder
(footnotes continued on next page)
19
(footnotes continued from previous page)
System Inc., Signet Banking Corp., Southern National Corp., Synovus
Financial Corp., UJB Financial Corp. and XTRA Corp. The Performance Graph
included in the Company's Proxy Statement relating to its 1995 annual
stockholders' meeting, disclosed the cumulative total return of an
investment in a Benchmark Group comprised of 25 companies. Shawmut
National Corp. was excluded from the Benchmark Group in 1995 because it
was acquired by Fleet Financial Group and ceased to be publicly traded.
DEFINED BENEFIT PLAN RETIREMENT BENEFITS
Through December 31, 1993, most of the Company's management employees,
including all the named executive officers, participated in the AT&T Management
Pension Plan ('AT&TMPP'), a non-contributory pension plan which covers all
management employees, including executive officers, of AT&T and certain of its
affiliates. The normal retirement age under this plan is 65; however, retirement
before age 65 can be elected under certain conditions. Through December 31,
1993, certain of the Company's executive officers also participated in the AT&T
Non-Qualified Pension Plan. Pension benefits under this plan will generally
commence at the same time as benefits under the AT&TMPP.
Messrs. Rothman, Van Sickle and Wajnert and certain other management
employees of the Company who were hired at age 35 or over are covered by a
supplemental AT&T Mid-Career Pension Plan. The plan provides additional pension
credits equal to the difference between age 35 and their maximum possible years
of service attainable at age 65, but not to exceed actual net credited service,
at approximately one-half the rate of the AT&TMPP.
Messrs. Wajnert, Rothman, Van Sickle and McCarthy and Ms. Morey ceased to
participate in the above-mentioned pension plans effective January 1, 1994.
Their accrued annual pension amounts under these plans are $105,660, $61,221,
$45,799, $26,434 and $21,003, respectively. Pensions will be payable to each of
them when each reaches age 65. Amounts shown are straight-life annuity amounts
not reduced by a joint and survivorship provision which is available to these
executive officers.
The Company established its own retirement and benefit plans effective
January 1, 1994. The Company also established two nonqualified pension plans,
effective January 1, 1994, in which the named executive officers participate:
the AT&T Capital Corporation Executive Benefit Plan ('EBP') and the AT&T Capital
Corporation Supplemental Executive Retirement Plan ('SERP').
The EBP is designed to provide supplemental pension benefits to members of
the Company's Corporate Leadership Team (6 of the Company's senior executives,
including the named executives) and certain of the Company's Strategic Business
Leaders designated by the Compensation Committee by providing an additional
source of income at retirement based on a percentage of the executive's final
pay.
Under the EBP, a participant's benefit equals 40% of 'Final Pay' (as
defined in the EBP), less benefits provided under all other qualified and
non-qualified sources from both AT&T and the Company (including the SERP
described below, subject to reduction if benefits commence before age 60).
Under the SERP, certain executives will be provided with supplemental
retirement benefits to ease the transition from coverage under the AT&TMPP to
coverage under the Company's new defined contribution plan.
20
For eligible executives, the SERP will provide a benefit equal to the
difference between 95% of the benefit that the AT&TMPP would have provided (if
the executive had remained covered by the AT&TMPP) and the retirement plan
benefit under the Company's new defined contribution plans plus the individual's
frozen AT&TMPP benefit.
To be eligible for the SERP, the executive must have been a participant in
the AT&TMPP as of December 31, 1993, and either (i) be a member of the Company's
Leadership Forum, or (ii)(a) have total pay for 1993 of at least $115,200 or
have total pay for the 36 months preceding termination of employment averaging
at least twice the Social Security Wage Base and (b) have (as of December 31,
1993) at least 10 years of combined service with the Company and AT&T or be
within 10 years of service pension eligibility under the AT&TMPP.
The executive must also meet the requirements for service pension
eligibility in effect under the AT&TMPP as of the date he or she leaves the
Company, assuming the executive was covered by the AT&TMPP from his or her date
of hire to the date the executive leaves the Company. For eligible executives
leaving the Company prior to age 60, the SERP benefit will be actuarially
reduced.
The EBP and the SERP are considered 'unfunded' plans under the Employee
Retirement Income Security Act of 1974, as amended; however, the Company has
made a contribution to a rabbi trust to satisfy its obligations under the EBP.
EMPLOYMENT, CHANGE IN CONTROL AND TERMINATION ARRANGEMENTS
The SPIP, SEAIP, LTIP, LSPP and the EBP contain certain provisions which
become operative upon a 'Sale of Control' (as defined in such plans). The
Company has also adopted a Leadership Severance Plan ('LSP') in which the named
executives participate, pursuant to which benefits may become payable on certain
terminations of employment prior to and following a change in control (as
defined in the LSP). Consummation of AT&T's plans announced on September 20,
1995, to pursue the sale of its equity interest in the Company may constitute a
Sale of Control or change in control for purposes of such provisions.
With respect to the SPIP, in the event that (i) a 'Sale of Control' or a
'Material Adverse Amendment' (certain amendments to, or terminations of, any of
certain material agreements between the Company and AT&T, that (x) is likely to
have a material adverse effect on the financial performance of the Company on a
consolidated basis or the fair market value of the Company's Common Stock and
(y) has not been approved by a majority of the Non-Employee Directors) occurs on
or prior to the third anniversary of the IPO and (ii) in the case of a Sale of
Control, there is a 'Qualifying Termination' (i.e., certain terminations of
employment within one year before or two years after a Sale of Control) of a
participant, an accelerated cash payout will be made under the SPIP to such
participant in an amount equal to 50% of the maximum payout for all pending and
future performance periods under the SPIP (discounted to present value at a
risk-free rate of return). If such an event occurs after the third anniversary
of the IPO, but on or prior to June 30, 2000, in addition to the payment of any
payout accrued with respect to any completed performance periods, an accelerated
payout to each applicable participant will be made equal to 100% of the maximum
payout for all pending and future performance periods under the SPIP (similarly
discounted). Similarly, if a 'Disaffiliation Event' (which is defined generally
as a decrease in AT&T's ownership of Common Stock of the Company to less than
50% of the outstanding shares coupled with a withdrawal by AT&T of the Company's
right to use the 'AT&T' or 'NCR' names pursuant to the License Agreement between
the Company and AT&T) occurs at any time during the term of the SPIP, the Total
Return of the Company
21
and the average Total Return of the Benchmark Group for the period commencing on
the beginning of each pending performance period and ending on the date of such
event will be determined and, assuming that the 'risk free' rate of return test
is met or exceeded, a cash payout will be made at such time with respect to each
such period in accordance with the normal payout criteria. At the end of each
such pending performance period, the Total Return of the Company and the average
Total Return for the Benchmark Group for the completed period will again be
calculated, and if a higher payout results for such period in accordance with
the normal SPIP rules, the excess of such higher payout over any amount paid at
the time of the Disaffiliation Event will be paid to such participant. Payouts
with respect to performance periods beginning after the Disaffiliation Event
will also be made in accordance with normal SPIP rules.
The SPIP has also been amended, subject to shareholder approval, to provide
that upon the consummation of a transaction that has or will have the effect of
the Common Stock of the Company no longer being publicly-traded (a 'Private
Sale'), the Company shall pay to each participant (a) for each pending
performance period under the SPIP, an accelerated award payout equal to 100% of
such participant's maximum payout and (b) for each performance period completed
within 12 months prior to a Private Sale, an amount equal to the excess of the
maximum payout over the actual payout previously made for such completed
performance period.
In the event of a 'Qualifying Termination' under the SEAIP, each
participant in the SEAIP becomes vested with the right to receive a cash award
for that year equal to the higher of (i) 110% of that participants' target
incentive, if any, and (ii) such participants' cash award for the immediately
preceding year.
In the event of a 'Qualifying Termination' of the employment of a
participant in the LTIP in connection with a 'Sale of Control' of the Company,
any forfeiture restrictions applicable to any awards previously granted to such
member under the LTIP will automatically expire and all such awards that are
subject to vesting provisions will automatically be deemed fully vested. Without
limiting the foregoing, in order to maintain the participants' rights in the
event of a 'Change in Control' of the Company, the Compensation Committee, as
constituted before such Change in Control, may, as to any award granted under
the LTIP or any stock option granted under the LSPP, take any one or more of the
following actions: (i) accelerate the vesting of such award so that it may be
exercised in full on or before a date fixed by the Compensation Committee, (ii)
repurchase any such award, in whole or in part, upon such participant's request,
(iii) make such adjustments to such award as the Compensation Committee deems
appropriate to reflect such Change in Control or (iv) cause such award to be
assumed, or new rights substituted therefor, by the acquiring or surviving
corporation after such Change in Control. The Compensation Committee has
provided under the LTIP that restrictions and forfeiture provisions on
restricted stock awards to employees will lapse (i) on the date immediately
prior to the date of a merger, reorganization, consolidation or other similar
corporate transaction in which shares of restricted stock are exchanged or
converted into cash ('CIC Event') or (ii) if the CIC Event occurs prior to
August 5, 1996, on August 5, 1996.
In the event of a 'Sale of Control' followed by a 'Qualifying Termination',
the restrictions on transfer with respect to shares purchased under the LSPP
will automatically lapse.
The EBP provides for 100% accelerated vesting for the named executives upon
the occurrence of (i) a change in control of the Company or (ii) the
participant's termination of employment (other than a 'Nonqualifying
Termination' as defined in the EBP).
22
Under the LSP, in the event of (x) a termination of employment as a result
of a reduction in force, change in operations, facility relocation or closing or
other job elimination or (y) a 'Qualifying Termination' of employment in
connection with a Change in Control (a 'RIF Termination'), each of the named
executives would receive severance benefits equal to (i) the greater of (A) 2
weeks' compensation for each full year of continuous service and (B) 200% of
Final Annual Pay and (ii) 135% of the premium which would be required to
maintain 'COBRA' continuing medical and dental coverage for 24 months (the
'continuation period'). If the named executive's employment is terminated by the
Company (other than as a result of a RIF Termination, cause, disability or
retirement), the executive would receive severance benefits equal to (i) the
greater of (A) one weeks' compensation for each full year of continuous service
and (B) 150% of Final Annual Pay and (ii) 135% of an 18-month continuation
period 'COBRA' premium.
Additional benefits upon severance include continued basic life insurance
and supplemental life insurance (at the executive's cost) for the relevant
continuation period. By executing a release of claims, the executive may receive
an enhanced severance payment equal to 20% of a RIF Termination severance
payment or 40% of an other eligible termination severance payment, as the case
may be. If any payments from the Company under the LSP or otherwise, would be
subject to an excise tax under Section 4999 of the Internal Revenue Code, then
the named executive would be entitled to receive an additional payment so that
he would retain an amount of such payments as if the excise tax had not applied.
INDEBTEDNESS OF MANAGEMENT
Each of the individuals named in the Summary Compensation Table is indebted
to the Company pursuant to notes executed under the LSPP. Under the LSPP, each
named senior executive required to participate in the LSPP purchased shares of
Common Stock with an aggregate purchase price approximately equal to a specified
multiple of such executive's base salary.
Between 88.5% and 97.7% of the purchase price for the shares of Common
Stock purchased by a participant under the LSPP (the 'Purchased Shares') was
paid for out of the proceeds of a seven-year full recourse loan (a 'Loan') made
by the Company to such participant, with the balance of such purchase price
being paid by such participant in cash. Interest accrues on each Loan at the
rate of 6% per annum compounded annually (or, if higher, the safe harbor rate
under applicable tax laws as of the date of purchase of the Purchased Shares).
Except as set forth below, such interest will be payable only at maturity. If a
participant selected a principal amount for the Loan exceeding 88.5% of the
purchase price for the Purchased Shares, the participant is required to make
monthly payments during the term of such Loan (unless the Compensation Committee
authorizes payments to be made on a less frequent basis) equal to 1.4532% of
such excess principal amount (assuming a 6% loan interest rate), which payments
may be required to be effected through payroll deductions or another mechanism
approved by the Compensation Committee while the participant is employed with
the Company and are applied first to accrued interest, and then to principal,
until such Loan is paid in full.
The Purchased Shares of a participant are pledged to the Company to secure
repayment of the Loan to such participant.
23
The following table sets forth for each officer named in the Summary
Compensation Table the largest aggregate amount of his or her indebtedness to
the Company (all of which is related to the Loans referred to above) outstanding
at any time during 1995 (the 'Highest 1995 Loan Balance') and the amount of the
indebtedness outstanding as of December 31, 1995 (the 'Current Balance'):
CURRENT BALANCE HIGHEST 1995
NAME AT DECEMBER 31, 1995 LOAN BALANCE
- ------------------------------------------------------------------ -------------------- ------------
Thomas C. Wajnert ................................................ $2,795,753 $2,795,753
Chairman of the Board & Chief
Executive Officer
Irving H. Rothman ................................................ 1,197,163 1,197,163
Group President
Charles D. Van Sickle ............................................ 1,057,021 1,057,021
Group President
G. Daniel McCarthy ............................................... 957,693 957,693
Senior Vice President,
General Counsel, Secretary
and Chief Risk Management Officer
Ruth A. Morey .................................................... 873,715 873,715
Senior Vice President and
Corporate Resources Officer
B -- APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM B ON THE PROXY CARD)
Upon the recommendation of the Audit Committee, which is composed entirely
of Non-Employee Directors, the Board of Directors has appointed Coopers &
Lybrand L.L.P. as independent auditors for the Company to audit its consolidated
financial statements for 1996 and to perform audit-related services, including
review of the Company's quarterly interim financial information and periodic
reports and registration statements filed with the Securities and Exchange
Commission and consultation in connection with various accounting and financial
reporting matters. Coopers & Lybrand L.L.P. also performs non-audit services for
the Company.
The Board has directed the appointment of Coopers & Lybrand L.L.P. be
submitted to the stockholders for approval. The affirmative vote of a majority
of the shares of Common Stock present or represented and entitled to vote on the
proposal at the Annual Meeting is required for approval. If the stockholders do
not approve the appointment of Coopers & Lybrand L.L.P., the Audit Committee and
the Board will reconsider the appointment. Coopers & Lybrand L.L.P. has audited
the consolidated financial statements of the Company and its predecessors since
1985, and audits the consolidated financial statements of AT&T.
The Company has been advised by Coopers & Lybrand L.L.P. that it expects to
have a representative present at the Annual Meeting and that such representative
will be available to respond to appropriate questions. Such representative will
also have the opportunity to make a statement if he or she desires to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT AUDITORS.
24
C -- 1993 LONG TERM INCENTIVE PLAN
(ITEM C ON THE PROXY CARD)
GENERAL
At the Annual Meeting, the stockholders are being asked to reapprove the
material terms of the Company's 1993 Long Term Incentive Plan ('LTIP'), as
amended by the Board of Directors, to increase the number of shares reserved for
issuance thereunder by 1,500,000 shares to 3,500,000 shares of Common Stock and
to limit the number of shares subject to stock options and stock appreciation
rights that may be granted to any employee ('member') in any calendar year to
300,000. The LTIP was adopted by the Board on June 10, 1993, approved by the
stockholders on June 25, 1993, and 2,000,000 shares were reserved for issuance
thereunder.
As of January 1, 1996, 405,106 shares of Common Stock were available for
issuance under the LTIP (exclusive of the increase in shares subject to
stockholder approval at this Annual Meeting). In addition, options to purchase
1,351,822 shares were outstanding and 17,252 shares of Common Stock had been
purchased pursuant to the exercise of options granted under the LTIP at an
average exercise price per share of $23.32.
The LTIP authorizes the Compensation Committee to grant incentive and
non-statutory stock options as well as restricted stock, stock appreciation
rights ('SARs'), performance units and other performance and incentive awards
(collectively, 'Awards'). Pursuant to the LTIP, the Compensation Committee has
delegated authority to a committee of the Company's 'Senior Managers' ('CLT') to
grant Awards to members who are not senior officers or directors of the Company
and to cancel or suspend Awards to such members.
The LTIP was structured to allow the Compensation Committee and the CLT
broad discretion in creating equity incentives to assist the Company in
attracting, retaining and motivating the best available members for the
successful conduct of its business. The Board believes the remaining shares
under the LTIP are not sufficient to accomplish these purposes. Therefore, the
Board is proposing the increase to the shares reserved under the LTIP discussed
herein and anticipates this increase will meet the Board's hiring and retention
goals over approximately the next 4 years. The continuation of the LTIP is
subject to the receipt of stockholder approval. Provisions have been included in
the LTIP to satisfy the conditions to avoid the limitations on deductibility
under Section 162(m) of the Internal Revenue Code with respect to stock options
and SARs.
SUMMARY OF THE LTIP
The essential features of the LTIP are outlined below. The description of
the LTIP is qualified in its entirety by reference to the specific provisions of
the LTIP, the full text of which is set forth as Exhibit A to this Proxy
Statement.
PURPOSE. The purpose of the LTIP is to encourage selected members to
acquire a proprietary interest in the Company, and to provide an additional
incentive to members to contribute to the Company's long term success and
prosperity (and, thus, enhance the value of the Company for the benefit of its
stockholders), and to enhance the ability of the Company to attract and retain
members of exceptional talent. The LTIP is also designed to permit the Company
to attract and retain its Non-Employee Directors.
25
ELIGIBILITY. All members of the Company and its subsidiaries, as well as
all of the Non-Employee Directors of the Company are eligible to participate in
the LTIP. As of the Record Date, there were approximately 2,850 members and four
directors eligible to receive Awards under the LTIP.
ADMINISTRATION. The LTIP is administered by the Compensation Committee. The
Compensation Committee has full authority to select members to whom Awards may
from time to time be granted, determine the number and terms of such Awards,
interpret and administer the LTIP, and establish rules and regulations that such
agents shall deem appropriate for the proper administration of the LTIP.
Decisions of the Compensation Committee are final, conclusive and binding on all
persons, including the Company and any participant in the LTIP. Pursuant to the
LTIP, the Compensation Committee has delegated to the CLT the authority to
grant, cancel or suspend Awards to members who are not senior officers or
directors of the Company.
STOCK OPTIONS. The LTIP permits the granting of non-transferable stock
options that are either intended to qualify as incentive stock options or are
not intended to so qualify. Annual stock option grants are expected to be made
under the LTIP to executive officers, certain senior executives or managers,
certain managers at the business unit level and certain key members
(collectively, the 'Key Managers'). The annual grant to each Key Manager will be
based on the position of such Key Manager and will be determined annually by the
Compensation Committee or its delegate. As more fully described in the section
of this Proxy Statement entitled 'Compensation of Directors' (beginning on page
5), options are also granted periodically under the LTIP to Non-Employee
Directors.
The purchase price per share of stock purchasable under any stock option
granted pursuant to the LTIP is determined by the Compensation Committee or its
delegate, but will generally not be less than 100% of the fair market value of
the stock on the date of the grant of such option. The term of each option is
fixed by, and options are exercisable at such time or times as determined by,
the Compensation Committee or its delegate.
STOCK APPRECIATION RIGHTS. The Compensation Committee or its delegate may
also grant SARs alone or together with new or existing options. Upon exercise of
an SAR, the holder thereof is entitled to receive the excess of the fair market
value of the shares for which the right is exercised over the grant price of the
SAR. The grant price (which may not be less than the fair market value of the
shares on the date of the grant) and other terms of the SAR are determined by
the Compensation Committee or its delegate.
RESTRICTED STOCK. Awards of restricted stock may also be granted under the
LTIP. Restricted stock is Common Stock that is subject to forfeiture and is not
transferable until certain restrictions established by the Compensation
Committee or its delegate lapse. Recipients of restricted stock are not required
to provide consideration other than the rendering of service. A participant has,
with respect to restricted stock, all of the rights of the stockholders of the
Company, including the right to vote the shares and the right to receive any
cash dividends, unless the Compensation Committee or its delegate determines
otherwise.
PERFORMANCE AWARDS. Performance Awards based on the achievement of
specified performance criteria during specified performance periods, in each
case as determined by the Compensation Committee or its delegate, may also be
granted under the LTIP. Such Awards may include performance shares, which
consist of units valued by reference to a designated number of shares of Common
Stock, or performance units, which consist of units valued by reference to a
designated amount of property other than shares of Common Stock. Such Awards may
be paid in cash, shares of Common Stock or other property or any combination
thereof.
26
OTHER AWARDS. Under the LTIP, the Compensation Committee may also grant
other stock unit Awards that are valued in whole or in part by reference to, or
are otherwise based on, Common Stock or other securities of the Company. These
Awards may be paid in Common Stock or other securities of the Company, cash, or
any other form of property, as determined by the Compensation Committee or its
delegate.
AMENDMENT AND TERMINATION. The Board of Directors may amend or terminate
the LTIP at any time, but no amendment or termination shall be made that would
impair the rights of a participant under an Award theretofore granted, without
the participant's consent. Also, the Board may not amend the Plan to increase
the total number of shares reserved for purposes of the LTIP or change the
members or directors eligible to participate in the LTIP without the approval of
the Company's stockholders. The Compensation Committee may at any time amend the
terms of any Award theretofore granted or substitute a new Award for such
previously granted Award, but no such amendment or substitution shall impair the
rights of any participant without his or her consent. In addition, to the extent
necessary to comply with Rule 16b-3 of the Securities Exchange Act of 1934 (or
any other applicable law or regulation), the Company shall obtain stockholder
approval of any LTIP amendment in such manner and to such extent as required.
QUALIFYING TERMINATION. In the event of a qualifying termination of the
employment of a member in connection with a sale of control of the Company, any
forfeiture restrictions applicable to any Awards will automatically expire and
all such Awards that are subject to vesting provisions will automatically be
deemed fully vested. Without limiting the foregoing, the Compensation Committee
may as to any Award granted to a member, in order to maintain the member's
rights in the event of any 'change of control' of the Company, take any one or
more of the following actions: (1) provide for the acceleration of vesting of an
Award, (2) provide for the repurchase of any such Award, in whole or in part,
upon such member's request; (3) make such adjustments to such Award as the
Compensation Committee deems appropriate to reflect such change of control; or
(4) cause an Award to be assumed, or new rights substituted therefor, by the
acquiring or surviving corporation after such change of control.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a brief summary of the U.S. Federal income tax
consequences generally arising in connection with grants of stock options under
the LTIP. A participant will not recognize any income upon the grant of a stock
option. A participant will recognize compensation taxable as ordinary income
(and subject to income tax withholding) upon exercise of a non-qualified stock
option equal to the excess of the fair market value of the shares purchased over
their exercise price, and the Company will be entitled to a corresponding
deduction. A participant will not recognize any income (except for purposes of
the alternative minimum tax) upon exercise of an incentive stock option. If the
shares acquired by exercise of an incentive stock option are held for at least
two years from the date the option was granted and one year from the date it was
exercised, any gain or loss arising from a subsequent disposition of such shares
will be taxed as long-term capital gain or loss, and the Company will not be
entitled to any deduction. If, however, such shares are disposed of within such
period, then in the year of such disposition the participant will recognize
compensation taxable as ordinary income equal to the excess of (a) the lesser of
(i) the amount realized upon such disposition and (ii) the fair market value of
such shares on the date of exercise over (b) the exercise price, and the Company
will be entitled to a corresponding deduction.
27
PARTICIPATION IN THE LTIP
The grant of Awards under the LTIP to members, including the executive
officers named in the summary compensation table (the 'Named Officers'), is
subject to the discretion of the Compensation Committee or the CLT, as
appropriate. As of the date of this Proxy Statement, there has been no
determination by either of such committees with respect to future Awards to
members under the LTIP. Accordingly, future Awards to members are not
determinable.
The following table sets forth information with respect to the grant of
options during 1995 to the Named Officers, to all current executive officers as
a group, to all current directors who are not executive officers as a group, and
to all members who are not executive officers as a group. All stock options were
granted at a fair market value exercise price.
PLAN BENEFITS
AVERAGE EXERCISE
SECURITIES UNDERLYING PRICE PER
NAME OF INDIVIDUAL OR GROUP OPTIONS GRANTED(#) SHARE($/SH)
- -------------------------------------------------------------------------- --------------------- ----------------
Thomas C. Wajnert ........................................................ 60,000 25.00
Chairman of the Board and Chief Executive Officer
Irving H. Rothman ........................................................ 10,500 25.00
Group President
Charles D. Van Sickle .................................................... 10,500 25.00
Group President
G. Daniel McCarthy ....................................................... 7,500 25.00
Senior Vice President, General Counsel, Secretary and Chief Risk
Management Officer
Ruth A. Morey ............................................................ 7,500 25.00
Senior Vice President -- Corporate Resources Officer
All Current Executive Officers As a Group................................. 103,500 25.00
All Current Directors Who Are Not Executive Officers As a Group........... 7,254 27.42
All Employees Who Are Not Executive Officers As a Group................... 229,532 27.72
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE 'FOR' THE
REAPPROVAL OF THE LTIP.
ADDITIONAL INFORMATION
OTHER ACTION AT THE MEETING
The Board of Directors is not aware of any other matter to be presented for
action at the Annual Meeting. If any additional matters are properly presented,
the shares represented by a properly signed proxy card will be voted in
accordance with the judgment of the persons named on the proxy card.
COST OF SOLICITATION
The cost of solicitating proxies will be borne by the Company. In addition
to solicitation by mail, certain members of the Company may solicit proxies
personally or by telephone or other means of communication. The Company will
also reimburse its transfer agent for expenses in connection with the
28
distribution of proxy material to brokers and other persons holding stock in
their names or those of their nominees for their reasonable expenses in sending
proxy material to their principals. The Company has retained Georgeson & Company
Inc., at an estimated cost of $5,000 plus reimbursement of out-of-pocket
expenses, to assist in the solicitation of proxies.
STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Stockholders may submit proposals on matters appropriate for stockholder
action at the Company's annual meetings consistent with regulations adopted by
the Securities and Exchange Commission and the Company's By-Laws. Proposals
intended for inclusion in the proxy statement for the 1997 Annual Meeting must
be received by the Company not later than November 20, 1996. Proposals should be
directed to the attention of the Corporate Secretary's Office, AT&T Capital
Corporation, 44 Whippany Road, Morristown, New Jersey 07962-1983.
By Order of the Board of Directors
G. DANIEL McCARTHY
Senior Vice President, General
Counsel, Secretary and Chief
Risk Management Officer
March 19, 1996
29
EXHIBIT A
AT&T CAPITAL CORPORATION
1993 LONG TERM INCENTIVE PLAN
SECTION 1. Purpose. The purposes of the AT&T Capital Corporation 1993 Long
Term Incentive Plan (the 'Plan') are (i) to encourage selected employees of AT&T
Capital Corporation (the 'Company', as more fully defined below) and its
Subsidiaries (as defined below) to acquire a proprietary interest in the growth
and performance of the Company, to generate an increased incentive for such
employees to contribute to the Company's long-term success and prosperity, thus
enhancing the value of the Company for the benefit of its stockholders, and to
enhance the ability of the Company and its Subsidiaries to attract and retain
employees of exceptional talent upon whom, in large measure, the sustained
progress, growth and profitability of the Company depends and (ii) with respect
to the provisions of Section 12 of the Plan, to enhance the ability of the
Company to attract, retain and motivate non-employee directors.
SECTION 2. Definitions. As used in the Plan, the following terms shall have
the meanings set forth below. The determination of the Committee (as defined
below) with respect to the meaning of any such term (as set forth below) shall
be binding and conclusive on each Participant (as defined below) and any other
Person claiming benefits on behalf of or on account of any Participant.
(a) 'AT&T' shall mean AT&T Corp., a New York corporation.
(b) 'AWARD' shall mean any Option, Stock Appreciation Right, Restricted
Stock Award, Performance Share, Performance Unit, Dividend Equivalent, Other
Stock Unit Award, or any other right, interest, or option relating to Shares or
other securities of the Company granted pursuant to the provisions of the Plan.
(c) 'AWARD AGREEMENT' shall mean any written agreement, contract, or other
instrument or document evidencing any Award hereunder and signed by both the
Company and the Participant.
(d) 'BOARD' shall mean the Board of Directors of the Company. Any action
required or permitted to be taken by the Board hereunder may be taken by any
committee of the Board to which the Board delegates the authority to take such
action.
(e) 'CAUSE' shall mean (i) a conviction of a Participant of a felony
(whether or not such conviction is subject to appeal), (ii) a determination by
the Board or the Committee that the Participant has defrauded the Company or any
of its Subsidiaries, (iii) a determination by the Board or the Committee that
the Participant has misappropriated any property or business of the Company or
any of its Subsidiaries with a value in excess of $100.00 or intentionally
damaged any property or business of the Company or any of its Subsidiaries or
(iv) a determination by the Board or the Committee that the Participant has
engaged in willful and serious misconduct.
(f) 'CHANGE IN CONTROL' shall mean the occurrence of any of the following
events:
(i) An acquisition (other than in a non-control transaction, as
defined in clause (iii) below) of any Voting Securities by any 'PERSON' or
'GROUP' of persons (as such terms are used in Sections 13 and 14 of the
Exchange Act), other than the Company, any Subsidiary or any employee
benefit plan (or a trust forming a part thereof) maintained by the Company
or any Subsidiary, as a result of which such person or group becomes the
'BENEFICIAL OWNER' (as such term is used in Section 13 of the Exchange Act)
of Voting Securities representing fifteen percent (15%) or more
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of the combined voting power of all Voting Securities then outstanding;
PROVIDED that no such acquisition shall be deemed to give rise to a Change
in Control so long as, after giving effect to such acquisition, AT&T
remains the beneficial owner of Voting Securities representing a greater
percentage of the combined voting power of all Voting Securities then
outstanding than is represented by the Voting Securities beneficially owned
by such person or group; PROVIDED, FURTHER, that an acquisition of Voting
Securities directly from the Company or any Subsidiary shall not be deemed
to give rise to a Change in Control if, immediately prior to such
acquisition, no person or group is directly or indirectly in 'CONTROL' of
the Company (as such term is defined in Rule 405 under the Securities Act
of 1933, as amended);
(ii) The individuals who, as of the IPO Date, are members of the Board
(the 'INCUMBENT BOARD'), cease for any reason to constitute at least
two-thirds of the Board; PROVIDED, HOWEVER, that if the election, or
nomination for election by the Company's stockholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent Board, such
new director shall, for the purposes of this definition, be considered a
member of the Incumbent Board; PROVIDED, FURTHER, HOWEVER, that no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of either an actual or
threatened 'ELECTION CONTEST' (as described in Rule 14a-11 under the
Securities Exchange Act of 1934, as amended) or other actual or threatened
solicitation of proxies or consents by or on behalf of any person or group
other than the Board (a 'PROXY CONTEST'), including by reason of any
agreement intended to avoid or settle any election contest or proxy
contest; or
(iii) The approval by the requisite vote of the Company's stockholders
of:
(A) a merger, consolidation or reorganization involving the
Company, unless (1) the stockholders of the Company, immediately before
such merger, consolidation or reorganization, own, directly or
indirectly immediately following such merger, consolidation or
reorganization, at least sixty percent (60%) of the combined voting
power of the outstanding voting securities of the corporation surviving
such merger, consolidation or reorganization (the 'SURVIVING
CORPORATION') in substantially the same proportion as their ownership of
the Voting Securities of the Company immediately prior to such merger,
consolidation or reorganization, (2) the individuals who were members of
the Incumbent Board immediately prior to the execution of the agreement
providing for such merger, consolidation or reorganization constitute at
least two-thirds of the members of the board of directors of the
surviving corporation and (3) no Person (other than the Company, any
Subsidiary, any employee benefit plan (or any trust forming a part
thereof) maintained by the Company, the surviving corporation or any
Subsidiary, or any Person who, immediately prior to such merger,
consolidation or reorganization had beneficial ownership of fifteen
percent (15%) or more of the then outstanding Voting Securities of the
Company) has beneficial ownership of fifteen percent (15%) or more of
the combined voting power of the surviving corporation's then
outstanding voting securities (a transaction meeting the criteria set
forth in the foregoing clauses (1) through (3) being sometimes referred
to herein as a 'NON-CONTROL TRANSACTION');
(B) A complete liquidation or dissolution of the Company; or
(C) An agreement for the sale or other disposition of all or
substantially all of the assets of the Company to any Person (other than
a transfer to a Subsidiary).
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Notwithstanding the foregoing, a Change in Control shall not be deemed to
have occurred solely because any person or group becomes the beneficial owner of
more than the permitted amount of the outstanding Voting Securities of the
Company as a result of an acquisition of Voting Securities by the Company which,
by reducing the number of Voting Securities outstanding, increases the
proportional number of Voting Securities owned by such person or group, PROVIDED
that if (i) a Change in Control would have been deemed to have occurred but for
the operation of this sentence as a result of such acquisition of Voting
Securities by the Company and (ii) such person or group thereupon or thereafter
becomes the beneficial owner of any additional Voting Securities resulting in an
increase in the percentage of the then outstanding Voting Securities
beneficially owned by such person or group (and which percentage is in excess of
fifteen percent (15%)), then a Change in Control shall be deemed to have
occurred at the time of such acquisition of beneficial ownership of such
additional Voting Securities by such person or group.
(g) 'CODE' shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(h) 'COMMITTEE' shall mean the Compensation Committee of the Board;
PROVIDED that the Board may otherwise appoint (i) the Board, to the extent that
all members of the Board are Disinterested Persons, or (ii) a committee
consisting of two or more members of the Board, each of whom is a Disinterested
Person, to act as the Committee.
(i) 'COMPANY' shall mean AT&T Capital Corporation, a Delaware corporation,
or its successor.
(j) 'DIRECTOR PARTICIPANT' shall mean a Non-Employee Director who receives
an Award under the Plan.
(k) 'DIRECTORS OPTIONS' shall have the meaning set forth in Section 12(a)
hereof.
(1) 'DIRECTORS SHARES' shall have the meaning set forth in Section 12(a)
hereof.
(m) 'DISABILITY' means, with respect to a Participant, a determination by
the Committee or an officer of the Company designated by it that such
Participant has become 'disabled' within the meaning of the Company's long-term
disability plan as in effect at the time.
(n) 'DISINTERESTED PERSON' shall mean a 'disinterested person' as such term
is used in Rule 16b-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended, or any successor
definition adopted by such Commission.
(o) 'DIVIDEND EQUIVALENT' shall mean any right granted pursuant to Section
15(h) hereof.
(p) 'EMPLOYEE' shall mean any salaried employee of the Company or of any
Subsidiary.
(q) 'EMPLOYEE PARTICIPANT' shall mean an Employee who is selected by the
Committee to receive an Award under the Plan.
(r) 'FAIR MARKET VALUE' shall mean, with respect to any property or rights,
the market value of such property or rights determined by such methods or
procedures as shall be established from time to time by the Committee.
(s) 'INCENTIVE STOCK OPTION' shall mean an Option granted under Section 6
hereof that is intended to meet the requirements of Section 422 of the Code or
any successor provisions thereto.
(t) 'IPO' shall mean the initial public offering of common stock of the
Company contemplated to be made by the Company during 1993.
(u) 'IPO DATE' shall mean the closing date for the IPO.
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(v) 'NON-EMPLOYEE DIRECTOR' shall mean any director of the Company or of
any Subsidiary who is not an officer or employee of the Company, any Subsidiary
or any Non-Subsidiary Affiliate.
(w) 'NONSTATUTORY STOCK OPTION' shall mean an Option granted under Section
6 hereof that is not an Incentive Stock Option.
(x) 'NON-SUBSIDIARY AFFILIATE' shall mean any Person other than a
Subsidiary that directly, or through one or more intermediaries, controls or is
under common control with the Company.
(y) 'OPTION' shall mean any right granted to a Participant under the Plan
allowing such Participant to purchase Shares at such price or prices and during
such period or periods as the Committee shall determine.
(z) 'OTHER STOCK UNIT AWARD' shall mean any right granted to an Employee
Participant by the Committee pursuant to Section 10 hereof.
(aa) 'PARTICIPANT' shall mean an Employee Participant or a Director
Participant, as the case may be.
(ab) 'PERFORMANCE AWARD' shall mean any Award of Performance Shares or
Performance Units pursuant to Section 9 hereof.
(ac) 'PERFORMANCE PERIOD' shall mean that period established by the
Committee at the time any Performance Award is granted or at any time thereafter
during which any performance goals specified by the Committee with respect to
such Award are to be measured.
(ad) 'PERFORMANCE SHARE' shall mean any grant pursuant to Section 9 hereof
of a unit valued by reference to a designated number of Shares, which value may
be paid to the Participant by delivery of such property as the Committee shall
determine, including, without limitation, cash, Shares, or any combination
thereof, upon achievement of such performance criteria during the Performance
Period as the Committee shall establish at the time of such grant or thereafter.
(ae) 'PERFORMANCE UNIT' shall mean any grant pursuant to Section 9 hereof
of a unit valued by reference to a designated amount of property other than
Shares, which value may be paid to the Participant by delivery of such property
as the Committee shall determine, including, without limitation, cash, Shares,
or any combination thereof, upon achievement of such performance criteria during
the Performance Period as the Committee shall establish at the time of such
grant or thereafter.
(af) 'PERSON' shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
(ag) 'QUALIFYING TERMINATION' of the employment of an Employee Participant
with the Company and any relevant Subsidiaries in connection with a Sale of
Control shall mean any of the following:
(i) A termination of such employment by the Company and such
Subsidiaries within two (2) years after such Sale of Control, other than a
termination for Cause or in a case of Retirement, death or Disability;
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(ii) A termination of such employment by such Participant within two
(2) years after such Sale of Control for one or more of the following
reasons:
(A) The assignment to such Participant of any duties inconsistent,
in a way significantly adverse to such Participant, with such
Participant's positions, duties, responsibilities and status with the
Company and such Subsidiaries immediately prior to such Sale of Control,
or a significant reduction in the duties and responsibilities held by
such Participant immediately prior to such Sale of Control; a change in
such Participant's reporting responsibilities, title or offices as in
effect immediately prior to such Sale of Control that is significantly
adverse to the Participant; or any removal of such Participant from or
any failure to re-elect such Participant to any position with the
Company or any such Subsidiary that such Participant held immediately
prior to such Sale of Control except in connection with such
Participant's promotion or a termination of employment for Cause or in a
case of Retirement, death or Disability; or
(B) A reduction by the Company or such Subsidiaries in such
Participant's base annual salary as in effect immediately prior to such
Sale of Control; the failure by the Company and such Subsidiaries to
continue in effect any employee benefit plan or compensation plan in
which such Participant was participating immediately prior to such Sale
of Control unless such Participant is permitted to participate in other
plans providing substantially comparable benefits to such Participant;
or the taking of any action by the Company or such Subsidiaries that
which would adversely affect such Participant's participation in or
materially reduce such Participant's benefits under any such plan; or
(C) The Company or such Subsidiaries requiring such Participant to
be based anywhere other than such Participant's present work location or
a location within twenty-five (25) miles from such present location; or
the Company or such Subsidiaries requiring such Participant to travel on
company business to an extent substantially more burdensome than such
Participant's travel obligations immediately prior to such Sale of
Control;
PROVIDED that, in the case of any such termination of employment by
the Participant, such termination shall not be deemed to be a Qualifying
Termination unless such termination occurs within ninety (90) days after
the occurrence of the events constituting the reason for such
termination; or
(iii) A termination of such employment by the Company and such
Subsidiaries within one (1) year prior to such Sale of Control, other than
a termination for Cause or in a case of Retirement, death or Disability, if
the Participant can demonstrate that such termination (A) was at the
request of a third party with which AT&T or its subsidiaries (other than
the Company and its Subsidiaries to the extent that they are not directly
or indirectly controlled by AT&T at the time) had entered into negotiations
or an agreement with regard to such Sale of Control or (B) otherwise
occurred in connection with, or in anticipation of, such Sale of Control,
PROVIDED that, in either such case, such Sale of Control actually occurs.
(ah) 'RESTRICTED STOCK' shall mean any Share issued with the restriction
that the holder may not sell, transfer, pledge or assign such Share and with
such other restrictions as the Committee, in its sole discretion, may impose
(including, without limitation, any restriction on the right to vote such Share
or the right to receive any dividends or distributions with respect to such
Share), which restrictions may lapse separately or in combination at such time
or times, in installments or otherwise, as the Committee may deem appropriate.
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(ai) 'RESTRICTED STOCK AWARD' shall mean an award of Restricted Stock under
Section 8 hereof.
(aj) 'RETIREMENT' shall mean the voluntary retirement of a Participant
pursuant to a retirement plan (or in the case of a Non-Employee Director, any
retirement policy) of the Company or any relevant Subsidiary.
(ak) 'SALE OF CONTROL' shall mean any Change in Control caused by AT&T or
its subsidiaries (other than the Company and its Subsidiaries to the extent that
they are not directly or indirectly controlled by AT&T at the time of such
Change in Control).
(al) 'SENIOR MANAGER' shall mean any member of the Company's Corporate
Leadership Team (or any successor group comprised of the top executive officers
of the Company).
(am) 'SHARES' shall mean shares of the common stock of the Company, $.01
par value, and such other securities of the Company (or any successor thereto)
as the Committee may from time to time determine.
(an) 'STOCK APPRECIATION RIGHT' shall mean any right granted to an Employee
Participant pursuant to Section 7 hereof to receive, upon exercise by the
Participant, the excess of (i) the Fair Market Value of one Share on the date of
exercise or, if the Committee shall so determine in the case of any such right
other than one related to any Incentive Stock Option, at any time during a
specified period before the date of exercise, over (ii) the grant price of the
right as specified by the Committee, in its sole discretion, on the date of
grant, which shall not be less than the Fair Market Value of one Share on such
date. Any payment by the Company in respect of such right may be made in cash,
Shares, other property, or any combination thereof, as the Committee, in its
sole discretion, shall determine.
(ao) 'SUBSIDIARY' shall mean (i) any Person that is directly or indirectly
controlled by the Company or (ii) any other Person in which the Company has a
significant equity interest, as determined by the Committee.
(ap) 'VOTING SECURITIES' shall mean any shares of the capital stock or
other securities of the Company that are generally entitled to vote in elections
for directors.
SECTION 3. Administration. (a) The Plan shall be administered by the
Committee. The Committee shall have full power and authority to: (i) select the
Employees to whom Awards may from time to time be granted hereunder; (ii)
determine the type or types of Award to be granted to each Employee Participant
hereunder; (iii) determine the number and kind of Shares to be covered by each
Award granted hereunder; (iv) determine the terms and conditions, not
inconsistent with the provisions of the Plan, of any Award granted hereunder;
(v) determine whether, to what extent and under what circumstances Awards may be
settled in cash, Shares or other property or cancelled or suspended; (vi)
determine whether, to what extent and under what circumstances cash, Shares and
other property and other amounts payable with respect to an Award under the Plan
shall be deferred either automatically or at the election of the Participant;
(vii) interpret and administer the Plan and approve, interpret and administer
any instrument or agreement entered into under the Plan; (viii) establish such
rules and regulations and appoint such agents as it shall deem appropriate for
the proper administration of the Plan; and (ix) make any other determination and
take any other action that the Committee deems necessary or desirable for
administration of the Plan.
(b) Decisions of the Committee shall be final, conclusive and binding upon
all Persons, including the Company, any Participant, any stockholder of the
Company, and any Employee. A majority of the
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members of the Committee may determine its actions and fix the time and place of
its meetings. The Committee may delegate to one or more Senior Managers or a
committee of Senior Managers the right to grant Awards to Employees who are not
officers or directors of the Company and to cancel or suspend Awards to
Employees who are not officers or directors of the Company.
(c) The Committee may employ attorneys, consultants, accountants or other
Persons (who may be attorneys, consultants, accountants or Persons performing
other services for the Company or any affiliate), and the Committee, the Company
and its officers and directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. No member of the Board or the
Committee, nor any officer, director or employee of the Company or any
Subsidiary acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination or interpretation taken or made in good
faith with respect to the Plan or the Awards granted hereunder, and all members
of the Board and the Committee and each officer or employee of the Company or a
Subsidiary acting on their behalf shall be fully indemnified and protected by
the Company in respect of any such action, determination or interpretation.
SECTION 4. Shares Subject to the Plan. (a) Subject to adjustment as
provided in Section 4(b), the total number of Shares available for grant under
the Plan shall be 3,500,000 shares (after giving effect to the 402,500 to 1
stock split contemplated to be effected on or prior to the IPO Date), reduced by
the sum of the aggregate number of Shares then subject to (i) Options and Stock
Appreciation Rights granted under the Plan that are not related to an Option and
(ii) other Awards granted under the Plan; PROVIDED, HOWEVER, that Stock
Appreciation Rights and other Awards that may be exercised or settled solely for
or in cash shall not affect the number of shares of Common Stock available for
grants or awards under the Plan. To the extent (x) that an outstanding Option
expires or terminates unexercised or is cancelled or forfeited (other than in
connection with the exercise of a related Stock Appreciation Right) or (y) that
an outstanding Stock Appreciation Right that is not related to an Option or
other outstanding Award (other than a Restricted Stock Award) which may be
exercised or settled (1) solely in Shares or (2) in Shares or cash expires or
terminates unexercised or is cancelled or forfeited, then the Shares subject to
the expired, unexercised cancelled or forfeited portion of such Option, Stock
Appreciation Right or other Award shall again be available for grant under the
Plan. In the event that all or a portion of (i) a Stock Appreciation Right that
is not related to an Option and which may be exercised or settled solely in
Shares or in Shares or cash, (ii) a Stock Appreciation Right that is related to
an Option or (iii) a Performance Share is exercised or settled, the number of
Shares subject to such Stock Appreciation Right or Performance Share (or portion
thereof) shall again be available for grant under the Plan, except to the extent
that Shares were delivered (or would have been delivered but were withheld to
satisfy tax withholding obligations) upon exercise of the right or settlement of
such Performance Share.
(b) In the event of a stock split, stock dividend, combination of shares or
any other change in the common stock of the Company, dividends or distributions
payable in cash or property, or an exchange of such common stock for other
securities, by reclassification, reorganization, redesignation, merger,
consolidation, recapitalization, liquidation or other similar event, the
Committee shall make such adjustments in the aggregate number and class of
Shares which may be delivered under the Plan (and which may be granted pursuant
to Options or Stock Appreciation Rights under Section 4(d)), in the number,
class and option price of Shares subject to outstanding Options granted under
the Plan, and in the value of, or number or class of Shares subject to, other
Awards granted under the Plan as may be determined to be appropriate by the
Committee, in its sole discretion. If any such adjustment would
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result in a fractional share of common stock being available for delivery under
the Plan or subject to an Award, such fractional share shall be disregarded.
(c) Shares to be delivered under the Plan shall be made available from
authorized and unissued Shares or, authorized and issued Shares reacquired or
held as treasury shares or otherwise, or a combination thereof.
(d) Subject to adjustment as provided in Section 4(b), the total number of
shares with respect to which Options or Stock Appreciation Rights may be granted
to any Employee Participant during any calendar year shall not exceed 300,000.
SECTION 5. Eligibility. Any Employee shall be eligible to be selected as an
Employee Participant. Non-Employee Directors shall be eligible to participate in
the Plan in accordance with Section 12.
SECTION 6. Stock Options. Options may be granted hereunder to Employee
Participants either alone or in addition to other Awards granted under the Plan
for no consideration or for such consideration as may be required by the
Committee. Any Option granted under the Plan shall be evidenced by an Award
Agreement in such form as the Committee may from time to time approve. The
provisions of Option Awards need not be the same with respect to each Employee
Participant. Any such Option shall be subject to the following terms and
conditions and to such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall deem desirable:
(a) OPTION PRICE. The purchase price per share purchasable under an
Option shall be determined by the Committee in its sole discretion;
PROVIDED that in the case of each Incentive Stock Option such purchase
price shall not be less than the Fair Market Value of the Share on the date
of the grant of such Incentive Stock Option.
(b) OPTION PERIOD. The term of each Option shall be fixed by the
Committee in its sole discretion; PROVIDED that no Incentive Stock Option
shall be exercisable after the expiration of ten (10) years from the date
the Option is granted.
(c) EXERCISABILITY. Options shall be exercisable at such time or times
as determined by the Committee at or subsequent to grant; PROVIDED that the
Committee may not change the exercisability of any Option subsequent to the
grant thereof in any way that is adverse to the Participant without such
Participant's consent.
(d) METHOD OF EXERCISE. Subject to the other provisions of the Plan
and any applicable Award Agreement, any Option may be exercised by the
Participant in whole or in part at such time or times, and the Participant
may make payment of the option price in such form or forms, including,
without limitation, payment by delivery of cash, Shares or other
consideration (including, where permitted by law and the Committee, Awards)
or by the withholding of Shares otherwise deliverable under an Award having
a Fair Market Value on the exercise date equal to the total option price,
or by any combination of cash, Shares and other consideration as the
Committee may specify in the applicable Award Agreement.
(e) FORM OF SETTLEMENT. In its sole discretion, the Committee may
provide, at the time of grant, that the Shares to be issued upon the
exercise of an Option shall be in the form of Restricted Stock or other
similar securities, or may reserve the right so to provide after the time
of grant.
SECTION 7. Stock Appreciation Rights. Stock Appreciation Rights may be
granted hereunder to Employee Participants either alone or in addition to other
Awards granted under the Plan and may, but
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need not, relate to a specific Option granted under Section 6. The provisions of
Stock Appreciation Rights need not be the same with respect to each Employee
Participant. Any Stock Appreciation Right related to a Nonstatutory Stock Option
may be granted at the same time such Option is granted or at any time thereafter
before exercise or termination of such Option. Any Stock Appreciation Right
related to an Incentive Stock Option must be granted at the same time such
Option is granted. In the case of any Stock Appreciation Right related to any
Option, the Stock Appreciation Right or applicable portion thereof shall
terminate and no longer be exercisable upon the termination or exercise of the
related Option, except that a Stock Appreciation Right granted with respect to
less than the full number of Shares covered by a related Option shall not be
reduced until the exercise or termination of the related Option exceeds the
number of shares not covered by the Stock Appreciation Right. Any Option related
to any Stock Appreciation Right shall no longer be exercisable to the extent the
related Stock Appreciation Right has been exercised. The Committee may impose
such conditions or restrictions on the exercise of any Stock Appreciation Right
as it shall deem appropriate.
SECTION 8. Restricted Stock. (a) ISSUANCE. Restricted Stock Awards may be
issued hereunder to Employee Participants, for no consideration or for such
consideration as may be required by applicable law or by the Committee, either
alone or in addition to other Awards granted under the Plan. The provisions of
Restricted Stock Awards need not be the same with respect to each Employee
Participant.
(b) REGISTRATION. Any Restricted Stock issued hereunder may be evidenced in
such manner as the Committee in its sole discretion shall deem appropriate,
including, without limitation, book-entry registration or issuance of a stock
certificate or certificates. In the event any stock certificate is issued in
respect of shares of Restricted Stock awarded under the Plan, such certificate
shall be registered in the name of the Participant, and shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award and, if so required by the Committee, shall be
deposited by the Participant with the Company or its designee, together with a
stock power endorsed in blank.
(c) FORFEITURE. Except as otherwise determined by the Committee at the time
of grant, upon termination of employment for any reason during the restriction
period, all shares of Restricted Stock then subject to restriction shall be
forfeited by the Employee Participant and reacquired by the Company; PROVIDED
that in the event of a Participant's Retirement, Disability, other termination
of employment or death, or in cases of special circumstances, the Committee may,
in its sole discretion, when it finds that a waiver would be in the best
interests of the Company, waive in whole or in part any or all remaining
restrictions with respect to all or any portion of such Participant's Restricted
Stock Award. Unrestricted Shares, evidenced in such manner as the Committee
shall deem appropriate, shall be issued to the Participant promptly after the
period of forfeiture, as determined or modified by the Committee, shall have
expired without forfeiture in respect of such shares of Restricted Stock.
SECTION 9. Performance Awards. Performance Awards, consisting of
Performance Shares or Performance Units, may be granted hereunder to Employee
Participants, for no consideration or for such consideration as may be required
by applicable law or by the Committee, either alone or in addition to other
Awards granted under the Plan. The performance criteria to be achieved during
any Performance Period and the length of the Performance Period shall be
determined by the Committee upon the grant of each Performance Award. Except as
provided in Section 11, Performance Awards will be distributed only after the
end of the relevant Performance Period. Performance Awards may be paid in cash,
Shares, other property or any combination thereof, in the sole discretion of the
Committee at the time of payment. The performance levels to be achieved for each
Performance Period and the amount of the Award to be distributed shall be
conclusively determined by the Committee.
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Performance Awards may be paid in a lump sum or in installments following the
close of the Performance Period or, in accordance with procedures established by
the Committee, on a deferred basis. The provisions of Performance Awards need
not be the same with respect to each Employee Participant.
SECTION 10. Other Stock Unit Awards. (a) STOCK AND ADMINISTRATION. Other
Awards of Shares and other Awards that are valued in whole or in part by
reference to, or are otherwise based on, Shares or other property ('Other Stock
Unit Awards') may be granted hereunder to Employee Participants, either alone or
in addition to other Awards granted under the Plan. Other Stock Unit Awards may
be paid in Shares, other securities of the Company, cash or any other form of
property as the Committee shall determine. Subject to the provisions of the
Plan, the Committee shall have sole and complete authority to determine the
Employees to whom and the time or times at which such Awards shall be made, the
number of shares of Stock to be granted pursuant to such Awards, and all other
conditions of the Awards. The provisions of Other Stock Unit Awards need not be
the same with respect to each Employee Participant.
(b) TERMS AND CONDITIONS. Subject to the provisions of this Plan and any
applicable Award Agreement, Shares subject to Awards made under this Section 10
may not be sold, assigned, transferred, pledged or otherwise encumbered prior to
the date on which the Shares are issued, or, if later, the date on which any
applicable restriction, performance or deferral period lapses. Shares (including
securities convertible into Shares) granted under this Section 10 may be issued
for no consideration or for such consideration as may be required by applicable
law or by the Committee; Shares (including securities convertible into Shares)
purchased pursuant to a purchase right awarded under this Section 10 shall be
purchased for such consideration as the Committee shall in its sole discretion
determine, which shall not be less than the Fair Market Value of such Shares or
other securities as of the date such purchase right is awarded.
SECTION 11. Change in Control. (a) Each Award granted to an Employee
Participant hereunder which is subject to any forfeiture restrictions,
including, without limitation, any restriction period or performance criteria
required to be satisfied prior to the exercise, payment or settlement of such
Award, shall provide, that, in the event of a Qualifying Termination of the
employment of such Employee Participant with the Company and any relevant
Subsidiaries in connection with a Sale of Control, all such forfeiture
restrictions shall automatically expire and be deemed to be satisfied as of the
date of such Qualifying Termination so that such Award may be exercised or
realized in full for a period of ninety (90) days from and after such date.
(b) Without limiting the provisions of paragraph (a) above, in order to
maintain the Employee Participants' rights in the event of any Change in Control
of the Company, the Committee, as constituted before such Change in Control,
may, in its sole discretion, as to any Award granted to an Employee Participant
under this Plan, either at the time an Award is made hereunder or any time
thereafter, take any one or more of the following actions: (i) provide for the
acceleration of any time periods relating to the exercise or realization of any
such Award so that such Award may be exercised or realized in full on or before
a date fixed by the Committee; (ii) provide for the purchase of any such Award,
upon the Participant's request, for an amount of cash equal to the amount that
could have been attained upon the exercise of such Award or realization of the
Participant's rights had such Award been currently exercisable or payable; (iii)
make such adjustment to any such Award then outstanding as the Committee deems
appropriate to reflect such Change in Control; or (iv) cause any such Award then
outstanding to be assumed, or new rights substituted therefor, by the acquiring
or surviving corporation
A-10
after such Change in Control. The Committee may, in its discretion, include such
further provisions and limitations in any agreement documenting such Awards as
it may deem equitable and in the best interests of the Company.
SECTION 12. Non-Employee Directors. (a) PARTICIPATION. Immediately after
the IPO Date (or, if later, on the date on which a Person is first elected or
otherwise begins to serve as a Non-Employee Director) and immediately after each
annual meeting of the Company's stockholders thereafter, each Non-Employee
Director shall be granted an option having the terms described in paragraph (c)
below ('Directors Options') to purchase 1,000 Shares (which number of shares
shall be prorated in the event that any Non-Employee Director first is elected
or otherwise begins to serve after the IPO Date but on a date other than the
date of the Annual Meeting of the Company's stockholders). In addition, each
Non-Employee Director may from time to time elect, in accordance with procedures
to be specified by the Committee (which procedures may, in the Committee's
discretion, provide that any such election will not become effective until six
(6) months after the date on which such election is made and will be revocable
only upon six (6) months' prior notice), to receive in lieu of the cash retainer
that would otherwise be payable to such Non-Employee Director, on each date on
which such retainer would otherwise be payable during the period that such
election is in effect, either (i) Restricted Stock with the terms described in
paragraph (b) below ('Directors Shares') with a Fair Market Value as of such
payment date equal to the amount of such retainer payment or (ii) additional
Directors Options to purchase Shares with a Fair Market Value as of such payment
date equal to two and one-half times the amount of such retainer payment.
(b) DIRECTORS RESTRICTED STOCK. Directors Shares shall be non-transferable
until the day before the annual meeting of the Company's stockholders next
following the date of grant, and shall be forfeited to the Company if the
Director Participant shall cease to be a member of the Board prior to such date.
Notwithstanding the foregoing, in the event of a Director Participant's death,
Disability or Retirement, such Restricted Stock shall thereupon cease to be
subject to any restrictions on transfer or risk of forfeiture. Directors Shares
shall be evidenced in such manner as the Committee shall determine consistent
with the provisions of Section 8(b).
(c) DIRECTORS OPTIONS. Each Directors Option shall be evidenced by an Award
Agreement in such form as the Committee shall from time to time approve, which
agreement shall comply and be subject to the following terms and conditions:
(i) Directors Options may be exercised only during the period
commencing on the day before the annual meeting of the Company's
stockholders next following the date of grant and ending ten (10) years
after the date of grant, and may be exercised in whole or in part at any
time during such period unless it has theretofore expired pursuant to the
other provisions of this paragraph (c). If a Director Participant shall
cease to be a member of the Board before a Directors Option becomes
exercisable, such option shall become void and of no further force or
effect.
Notwithstanding the foregoing, in the event of a Director
Participant's death, Disability or Retirement, any unexercisable Directors
Options shall immediately become exercisable in full.
(ii) The purchase price for the Shares subject to any Directors Option
shall be equal to the Fair Market Value of such Shares as of the date of
grant of such Directors Option. Such Directors Options will be exercisable
in such manner as the Committee shall specify and as shall be set forth in
the applicable Award Agreement.
A-11
(iii) Directors Options shall be subject to the transfer restrictions
and other provisions of Section 15(a) hereof.
(iv) Each Directors Option which has become exercisable pursuant to
subparagraph (c)(i), to the extent not theretofore exercised, shall expire
on the first to occur of (i) the date which is six (6) months after the
date on which the Director Participant shall cease to be a member of the
Board and (ii) the tenth anniversary of the date of grant of such option;
PROVIDED that if such Director Participant ceases serving as such a Board
member by reason of death, Disability or Retirement, such option may be
exercised for a period of two (2) years following the date on which the
Director Participant ceases serving as a member of the Board (but in no
event later than the tenth anniversary of the date of grant), and if the
Director Participant shall die within such six (6) month or two (2) year
period, as the case may be, following the date on which he ceases to serve
as such a member of the Board, such option may be exercised by at any time
within the two-year period following the date of death to the extent not
theretofore exercised (but in no event later than the tenth anniversary of
the date of grant).
(v) In the event of a Change in Control, each Directors Option which
is unexercised, whether or not then exercisable, on the date of such Change
of Control shall thereupon cease to be exercisable and shall be converted
into a right to receive an amount of cash equal to the amount that would
have been realized upon the exercise thereof if such Directors Option had
been exercised on the date of such Change in Control, which amount shall be
paid to the Director Participant within ten (10) days after such date.
SECTION 13. Financial Assistance. If the Committee determines that such
action is advisable, the Company may assist any Employee Participant to whom an
Award has been granted under the Plan in obtaining financing from the Company or
a Subsidiary or from a bank or other third party, on such terms as are
determined by the Committee, and in such amount as is required to accomplish the
purposes of the Plan, including, but not limited to, to permit the exercise of
an Award, the participation therein, and/or the payment of any taxes in respect
thereof. Such assistance may take any form that the Committee deems appropriate,
including, but not limited to, a direct loan from the Company or a Subsidiary, a
guarantee of the obligation by the Company or a Subsidiary, or the maintenance
by the Company or a Subsidiary or deposits with such bank or third party.
SECTION 14. Amendments and Termination. The Board may amend, alter or
discontinue the Plan, but no amendment, alteration, or discontinuation shall be
made that would impair the rights of a Participant under an Award theretofore
granted, without the Participant's consent, or that without the approval of the
Company's stockholders would:
(a) except as is provided in Section 4(b) of the Plan, increase the
total number of Shares reserved for the purpose of the Plan; or
(b) change the employees, directors or class of employees or directors
eligible to participate in the Plan; PROVIDED that, except as set forth in
Section 4(b) of the Plan, the number of Shares subject to any Directors
Options granted pursuant to the first sentence of Section 12(a) above, the
purchase price therefor, the date of grant of any such Option, the
termination provisions related thereto and the category of Persons eligible
to be granted such Directors Options shall not be amended other than in
accordance with the applicable provisions of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended.
A-12
The Committee may at any time amend the terms of any Award theretofore
granted, or substitute a new Award for such previously granted Award, either
prospectively or retroactively, but no such amendment or substitution shall
impair the rights of any Participant without his consent; PROVIDED that no such
amendment of any Directors Options or Directors Shares shall result in a
Director Participant ceasing to be a Disinterested Person.
SECTION 15. General Provisions. (a) No Award granted under the Plan to a
Participant, or any Shares subject to such Award, shall be assignable or
transferable by such Participant otherwise than by will or by the laws of
descent and distribution; PROVIDED that, if so determined by the Committee, a
Participant may, in the manner established by the Committee, designate a
beneficiary to exercise the rights of the Participant with respect to any Award
upon the death of the Participant. Absent such a designation, in a case of death
each Award shall be exercisable by the executor, administrator or legal
representative of the deceased Participant. During each Participant's lifetime,
each Award shall be exercisable only by such Participant or, if permissible
under applicable law, by such Participant's guardian or legal representative.
(b) The term of each Award granted to an Employee Participant shall be for
such period of months or years from the date of its grant as may be determined
by the Committee; PROVIDED that in no event shall the term of any Incentive
Stock Option or any Stock Appreciation Right related to any Incentive Stock
option exceed a period of ten (10) years from the date of its grant.
(c) No Employee or Employee Participant shall have any claim to be granted
any Award under the Plan and there is no obligation for uniformity of treatment
of Employees or Employee Participants under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any Employee, Non-Employee
Director or other person any right to continue to be employed by, perform
services for or serve as a director of the Company or any Subsidiary, and the
right to terminate the employment of or performance of services by any
Participants at any time and for any reason is specifically reserved.
(d) The prospective recipient of any Award under the Plan shall not, with
respect to such Award, be deemed to have become a Participant, or to have any
rights with respect to such Award, until and unless such recipient shall have
executed an Award Agreement and delivered a fully executed copy thereof to the
Company, and otherwise complied with the then applicable terms and conditions.
(e) The Committee shall be authorized to make adjustments in performance
award criteria or in the terms and conditions of other Awards in recognition of
unusual or nonrecurring events affecting the Company or its financial statements
or changes in applicable laws, regulations or accounting principles. The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem desirable to carry it into effect.
(f) The Committee shall have full power and authority to determine whether,
to what extent and under what circumstances any Award granted to an Employee
Participant shall be cancelled or suspended; PROVIDED that, following any Change
in Control, no Award granted prior to such Change in Control may be suspended or
cancelled by the Committee except as set forth in the following sentence.
Without limiting the foregoing, all outstanding Awards to any Employee
Participant shall be cancelled if such Participant, without the consent of the
Committee (if such Participant is the Chief Executive Officer of the Company) or
the Chief Executive Officer (if such Participant is an Employee other than the
Chief Executive Officer), while employed by the Company or a Subsidiary or after
termination of such employment, becomes associated with, employed by, renders
services to, or owns any interest in (other than any nonsubstantial interest, as
determined by the Committee or the Chief
A-13
Executive Officer, as applicable), any business that is in competition with the
Company or its Subsidiaries or with any business in which the Company or any
Subsidiary has a substantial interest, as determined by the Committee or the
Chief Executive Officer, as applicable. For purposes of the preceding sentence,
a one percent (1%) or smaller interest in the capital or profits of an entity
shall be deemed to be insubstantial.
(g) All certificates for Shares delivered under the Plan pursuant to any
Award shall be subject to such stop-transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Shares are then listed, and any applicable Federal or state securities
law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.
(h) Subject to the provisions of this Plan and any Award Agreement, any
Employee Participant receiving an Award (including, without limitation, any
deferred Award) may, if so determined by the Committee, be entitled to receive,
currently or on a deferred basis, interest or dividends, or interest or dividend
equivalents, with respect to the number of shares covered by the Award, as
determined by the Committee, in its sole discretion, and the Committee may
provide that such amounts (if any) shall be deemed to have been reinvested in
additional Shares or otherwise reinvested.
(i) Except as otherwise required in any applicable Award Agreement or by
the terms of the Plan, recipients of Awards under the Plan shall not be required
to make any payment or provide consideration other than the rendering of
services.
(j) The Company shall be authorized to require, prior to the delivery of
any Shares or the payment of any amount under any Award, payment by the
Participant of the amount of withholding taxes due in respect of an Award or
payment hereunder and to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes,
including, without limitation, withholding such amount from an Award or payment
due under the Plan or any other compensation, fees or other amounts payable by
the Company or any Subsidiary to the relevant Participant.
(k) Nothing contained in the Plan shall prevent the Board from adopting
other or additional compensation arrangements, subject to stockholder approval
if such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases.
(l) The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan shall be determined in accordance with the laws
of the State of New Jersey (without regard to the conflicts of laws rules
thereof) and applicable Federal law.
(m) If any provision of the Plan is or becomes or is deemed invalid,
illegal or unenforceable in any jurisdiction, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision shall
be construed or deemed amended to conform to applicable laws or if it cannot be
construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan, it shall be stricken and the
remainder of the Plan shall remain in full force and effect.
SECTION 16. Effective Date of Plan. The Plan shall be effective as of the
date that the Plan is approved by the stockholders of the Company.
A-14
SECTION 17. Term of Plan. No Award shall be granted pursuant to the Plan
after ten (10) years from the date of stockholder approval (i.e., June 25,
2003), but any Award theretofore granted may extend beyond that date.
SECTION 18. Applicability of Employee Compensation Adjustment Plan. The
rights of an Employee Participant under any Award granted to such Participant
under the Plan shall be subject to the provisions of the AT&T Capital
Corporation Employee Compensation Adjustment Plan, as in effect from time to
time, to the extent applicable to such Employee Participant.
A-15
[RECYCLED LOGO]
APPENDIX I
PROXY CARD
[ X ] Please mark your 6524
votes as in this
example.
Directors recommend a vote "FOR"
FOR WITHHELD
A. Election of [ ] [ ]
Directors
(page 2)
*FOR ALL EXCEPT the following nominee(s)
- -------------------------------------------------
FOR AGAINST ABSTAIN
B. Approval of [ ] [ ] [ ]
Independent
Auditors
(page 24)
FOR AGAINST ABSTAIN
C. Reapproval of the [ ] [ ] [ ]
1993 Long Term Incentive
Plan (page 25)
SPECIAL NOTES
I plan to [ ]
attend meeting
Comments on [ ]
reverse side
SIGNATURE(S) _________________________________________ DATE ______________, 1996
Please sign this proxy exactly as name(s) appears above and return it promptly
whether or not you plan to attend the meeting. If signing for a corporation or
partnership or as agent, attorney or fiduciary, indicate the capacity in which
you are signing. If you do attend the meeting and decide to vote by ballot, such
vote will supersede this proxy.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
DETACH PROXY CARD
Admission Ticket
[LOGO]
AT&T
Capital Corporation
Annual Meeting
of
Stockholders
Friday, April 19, 1996
9:30 a.m.
The Park Avenue Club
184 Park Avenue
Florham Park, New Jersey
Agenda
Introductions and Welcome
Chairman's Remarks
Election of Directors
Approval of the Appointment of Independent Auditors
Reapproval of the 1993 Long Term Incentive Plan
General Discussion
If you and your guest plan on attending the annual meeting, please mark the
appropriate box in the Special Notes section of the proxy card above. Please
present this ticket for admittance.
[LOGO] AT&T PROXY
Capital Corporation
- --------------------------------------------------------------------------------
This proxy is solicited on behalf of the Board of Directors of AT&T Capital
Corporation for the Annual Meeting on April 19, 1996.
The undersigned hereby appoints Thomas C. Wajnert, Richard W. Miller and S.
Lawrence Prendergast proxies (each with the power to act alone or with full
power of substitution) with the powers the undersigned would possess if
personally present to vote all common shares of the undersigned in AT&T Capital
Corporation at the annual meeting of stockholders to be held at The Park Avenue
Club, Florham Park, New Jersey, at 9:30 a.m. on April 19, 1996, and at any and
all adjournments thereof, upon all subjects that may properly come before the
meeting, including the matters described in the proxy statement furnished
herewith, subject to any directions indicated on the other side of this card. IF
NO DIRECTIONS ARE GIVEN, THE PROXIES WILL VOTE FOR THE ELECTION OF ALL LISTED
NOMINEES, IN ACCORD WITH THE DIRECTORS' RECOMMENDATIONS ON THE OTHER SUBJECTS
LISTED ON THE OTHER SIDE OF THIS CARD, AND, AT THEIR DISCRETION, ON ANY OTHER
MATTER THAT MAY PROPERLY COME BEFORE THIS MEETING. IF YOU HAVE INDICATED ANY
CHANGES OR VOTING LIMITATIONS ON THIS SIDE OF THE CARD, PLEASE MARK THE
"COMMENTS" BOX ON THE OTHER SIDE.
Your vote for election of Directors may be indicated on the other side. Nominees
are - Thomas C. Wajnert, John P. Clancey, James P. Kelly, Gerald M. Lowrie,
William B. Marx, Jr., Joseph J. Melone, Richard W. Miller, S. Lawrence
Prendergast, Maureen B. Tart, Brooks Walker, Jr., and Marilyn J. Wasser.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR OTHERWISE TO P.O. BOX 8932, EDISON, NJ 08818-9273. IF
YOU DO NOT SIGN AND RETURN A PROXY OR ATTEND THE MEETING AND VOTE BY BALLOT,
YOUR SHARES CANNOT BE VOTED.
- --------------------------------------------------------------------------------
Comments:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(If you have written in the above space, please mark the "Comments" box on the
other side of this card.) [RECYCLED LOGO] PRINTED ON RECYCLED PAPER
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
DETACH PROXY CARD
DIRECTIONS TO THE PARK AVENUE CLUB:
FROM INTERSTATE 80
- ------------------
Follow to Interstate 287 South to Route 24 East (Exit 37).
Then....
FROM ROUTE 287 NORTH OR SOUTH:
- ------------------------------
Exit at Route 24 East (Exit 37).
Follow to first exit (Exit 2A "Morristown" Route 510 West).
Once on Route 510 get immediately into the left lane, go to the first light and
turn left onto Park Avenue (County Road 623).
Proceed on Park Avenue to the 3rd traffic light (3/4 mi.) to the Campus Drive
jug handle (on right).
Follow jug handle to Campus Drive, make first right into The Park Avenue
Club driveway.
FROM NEWARK INTERNATIONAL AIRPORT
- ---------------------------------
Follow signs to I-78 West. Proceed approx. 9 miles to Route 24 West
(Exit 48 - Morristown). Follow Route 24 approximately 8 mi. to Exit 2A
("Morristown" Route 510 West). Once on Route 510 get immediately into
the left lane, go to the first light and turn left onto Park Avenue (County
Road 623). Proceed on Park Avenue to the 3rd traffic light (3/4mi.) to the
Campus Drive jug handle (on right).
Follow jug handle to Campus Drive, make first right into The Park Avenue
Club driveway.
NOTE: Upon entering the main entrance at 100 Campus Drive, make the first
right turn into The Park Avenue Club driveway.
Annual
Meeting of
Stockholders
April 19, 1996, 9:30 a.m.
The Park Avenue Club
184 Park Avenue
Florham Park, New Jersey