SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
i3 MOBILE INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
I3 MOBILE, INC.
181 HARBOR DRIVE
STAMFORD, CONNECTICUT 06902
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 22, 2002
To the Stockholders of i3 Mobile, Inc.:
The Annual Meeting of Stockholders of i3 Mobile, Inc. ("us, "we" or the
"Company") will be held at the offices of Katten Muchin Zavis Rosenman, 575
Madison Avenue, 11th Floor, New York, New York, on May 22, 2002, at 9:00 a.m.
local time.
The meeting will be held for the following purposes:
1. To elect two Class I directors to serve until our 2005 annual meeting
of stockholders and until their respective successors shall be elected
and shall qualify (Proposal 1);
2. To consider and act upon a proposal to amend the Company's Restated
Certificate of Incorporation to increase the number of authorized
shares of common stock of the Company from 50,000,000 shares to
75,000,000 shares (Proposal 2);
3. To ratify the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as independent auditors of the Company for
the year ending December 31, 2002 (Proposal 3); and
4. To transact such other business as may properly come before the
meeting or any and all adjournments thereof.
Our Board of Directors has fixed the close of business on March 29, 2002
as the record date for the determination of stockholders entitled to notice of
and to vote at the meeting and at any and all adjournments thereof.
Consequently, only the holders of record of our common stock at the close of
business on March 29, 2002 are entitled to notice of and to vote at the meeting
and at any and all adjournments thereof.
Whether or not you plan to attend the meeting, please complete, date and
sign the enclosed proxy card, and return it promptly in the enclosed envelope
to ensure your representation at the meeting.
You may view our proxy material at http://www.i3mobile.com. You are
cordially invited to attend the meeting and, if you do so, you may personally
vote, regardless of whether you have signed a proxy.
By Order of the Board of Directors,
JOHN A. LACK,
President and Chief Executive Officer
Stamford, Connecticut
Dated: April 12, 2002
I3 MOBILE, INC.
181 HARBOR DRIVE
STAMFORD, CONNECTICUT 06902
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
This proxy statement and the accompanying proxy card are being furnished
in connection with the solicitation of proxies by and on behalf of the Board of
Directors of i3 Mobile, Inc. ("us", "we" or the "Company"), a Delaware
corporation, to be used at the Annual Meeting of Stockholders of the Company
(the "Meeting") to be held on Wednesday, May 22, 2002, at 9:00 a.m. local time,
at the offices of Katten Muchin Zavis Rosenman, 575 Madison Avenue, 11th Floor,
New York, New York, and at any and all adjournments thereof. The principal
executive offices of the Company are located at 181 Harbor Drive, Stamford,
Connecticut 06902. This proxy statement and the accompanying proxy card are
first being mailed to the holders of record of our common stock on or about
April 17, 2002.
Stockholders represented at the meeting will consider and vote upon:
(i) the election of two Class I directors to serve until our 2005
annual meeting of stockholders;
(ii) a proposal to amend our Restated Certificate of Incorporation to
increase the number of authorized shares of our common stock from
50,000,000 shares to 75,000,000 shares;
(iii) a proposal to ratify the appointment by the Board of Directors of
PricewaterhouseCoopers LLP as our independent auditors for the year
ending December 31, 2002; and
(iv) such other business as may properly come before the meeting or any
and all adjournments thereof.
We are not aware of any other business to be presented for consideration at
the meeting.
VOTING AND SOLICITATION OF PROXIES
Only stockholders of record at the close of business on March 29, 2002 are
entitled to vote at the meeting. As of the record date, 22,564,840 shares of
common stock were outstanding. For each proposal submitted for stockholder
consideration at the meeting, each common stockholder is entitled to one vote
for each share of common stock held of record on March 29, 2002. The presence,
in person or by proxy, of the holders of a majority of the shares of common
stock entitled to vote at the meeting is necessary to constitute a quorum for
the conduct of business at the meeting. The election of each nominee for
director requires the approval of a plurality of the total number of votes
cast. Abstentions will be considered shares present for purposes of determining
whether a quorum is present at the meeting and, therefore, will have the same
legal effect as a vote against a motion presented at the meeting. Broker
non-votes will be considered as shares not entitled to vote and will,
therefore, not be considered in the tabulation of votes. A broker "non-vote"
occurs when a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting
power with respect to that item and has not received instructions from the
beneficial owner.
All shares represented by properly executed proxies will, unless such
proxies have previously been revoked, be voted at the meeting in accordance
with the directions on the proxies. A proxy may be revoked at any time prior to
final tabulation of the votes at the meeting. Stockholders may revoke proxies
by written notice to our General Counsel, by delivery of a proxy bearing a
later date or by revocation in person at the meeting. If no direction is
indicated, the shares represented by properly executed proxies will be voted in
favor of the Board of Director's nominees for directors, as listed in this
proxy statement and in favor of the other proposals listed in this proxy
statement. The persons named in the proxies will also have discretionary
authority to vote all proxies with respect to any additional matters that are
properly presented for action at the meeting. Each of the executive officers
and directors has indicated his intent to vote all shares of common stock owned
or controlled by him in favor of the Board of Directors' nominees for directors
and in favor of each item set forth herein.
The proxy solicitation is made by and on behalf of the Board of Directors.
Solicitation of proxies for use at the meeting may be made in person or by
mail, telephone or telegram, by our officers and regular employees. Such
persons will receive no additional compensation for any solicitation
activities. Copies of solicitation materials will be furnished to banks,
brokerage houses, fiduciaries and custodians holding in their names shares of
common stock beneficially owned by others to forward to such beneficial owners.
We may reimburse persons representing beneficial owners of common stock for
their costs of forwarding solicitation materials to such beneficial owners. We
will bear the entire cost of the solicitation of proxies, including the
preparation, assembly, printing and mailing of this proxy statement, the proxy
card and any additional information furnished to stockholders.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation and Bylaws provide
that the Board of Directors shall be divided into three classes. Initially,
directors of Class I were elected to hold office for a term expiring at the
annual meeting of stockholders in 2002, directors of Class II were elected to
hold office for a term expiring at the annual meeting of stockholders in 2003,
and directors of Class III were elected to hold office for a term expiring at
the annual meeting of stockholders in 2004. At each annual meeting of
stockholders following the initial classification and election, the respective
successors of each class shall be elected for three-year terms. Directors are
assigned to each class in accordance with a resolution or resolutions adopted
by the Board of Directors, each class consisting, as nearly as possible, of
one-third the total number of directors. Newly created directorships resulting
from any increase in the number of authorized directors and vacancies on the
Board of Directors resulting from death, resignation, disqualification, removal
or other causes are filled by the affirmative vote of a majority of the
remaining directors then in office, even if less than a quorum of the Board of
Directors. A director elected by the Board of Directors to fill a vacancy
(including a vacancy created by an increase in the number of directors) shall
serve for the remainder of the full term of the class of directors in which the
vacancy occurred and until such director's successor is elected and qualified.
The Company's Restated Certificate of Incorporation provides that the
number of directors which shall constitute the whole Board of Directors shall
be fixed exclusively by one or more resolutions adopted from time to time by
the Board of Directors. The authorized number of directors is currently set at
9. Three seats on the Board of Directors, two of which are currently held by
Don Ohlmeyer and W. Peter Daniels, and one of which is vacant following the
March 2002 resignation of Robert M. Unnold, have been designated as Class I
Board seats, with the term of the directors occupying such seats expiring as of
the annual meeting of stockholders in 2002. We have been advised that Mr.
Ohlmeyer declines to stand for re-election at the annual meeting of
stockholders in 2002, although he will remain a director until the time of the
election of his successor. Accordingly, W. Peter Daniels and Roger L. Werner,
Jr. are being nominated for election as Class I directors, and there will
remain one vacancy in the class. The Company has no immediate plans to fill
that vacancy, but may do so in the future.
Mr. Daniels is the only nominee for election to this class who is
currently a Board member of the Company who was previously elected by the
stockholders. If elected at the annual meeting, each of the two nominees would
serve until the annual meeting of stockholders in 2005 and until his or her
successor is elected and qualified, or until such director's earlier death,
resignation or removal. There is no family relationship between any of our
directors and executive officers.
Proxies not marked to the contrary will be voted "FOR" the election to the
Board of Directors of each nominee. Management has no reason to believe that
any of the nominees will not be a candidate or will be unable to serve.
However, in the event that any of the nominees should become unable or
unwilling to serve as a director, the proxy will be voted for the election of
such person or persons as shall be designated by the current directors. Each of
the following nominees has consented to be named a nominee in this proxy
statement and to serve as a director if elected:
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF THE NOMINEES TO THE COMPANY'S BOARD OF DIRECTORS.
2
UNLESS OTHERWISE INDICATED, THE ACCOMPANYING FORM OF PROXY WILL BE VOTED FOR
THE NOMINEES LISTED BELOW.
CLASS I BOARD NOMINEES
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION SINCE
- -------------------------- ------------------------------------ ---------
W. Peter Daniels, age 47 President 1991
Medical Center of Ocean County, NJ
Mr. Daniels was elected a director of the Company in July 1991. Since
March 2002, Mr. Daniels has been the President of the Medical Center of Ocean
County, New Jersey. From November 1999 until March 2002, Mr. Daniels served as
the President and Chief Executive Officer of Southampton Hospital in
Southampton, New York. From January 1995 until November 1999, Mr. Daniels was
the Chief Operating Officer of Winthrop University Hospital in Mineola, New
York.
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION SINCE
- ------------------------------ ------------------------ ---------
Roger L. Werner, Jr., age 52 Chief Executive Officer N/A
Werner Telesport LLC
Since September 2001, Mr. Werner has been the Chief Executive Officer of
Werner Telesport LLC. Mr. Werner was previously Chief Executive Officer of the
Speedvision and Outdoor Life cable networks, which he founded in August 1994 and
sold to News Corp. in July 2001. From 1990 until 1994, Mr. Werner helped develop
five regional cable sports networks in partnership with cable pioneer Bill
Daniels and system operator TCI. From 1988 until 1990, Mr. Werner served as
Chief Executive Officer of ESPN, Inc. From 1982 until 1988, he served as ESPN's
Chief Operating Officer.
REQUIRED VOTE
THE AFFIRMATIVE VOTE OF A PLURALITY OF THE VOTES CAST IN PERSON OR BY
PROXY AT THE MEETING WILL BE REQUIRED FOR THE ELECTION OF DIRECTORS. BROKER
NON-VOTES AND ABSTENTIONS ARE NOT TREATED AS VOTES CAST FOR THIS PURPOSE AND
HAVE NO EFFECT ON THE OUTCOME OF THE VOTE.
CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL THE ANNUAL MEETING OF
STOCKHOLDERS IN 2003:
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION SINCE
- -------------------------- -------------------------- ---------
James A. Johnson, age 63 Managing General Partner 1998
Apex Investment Partners
Mr. Johnson has been a member of the board of directors since August 1998.
Since 1987, Mr. Johnson has been a managing general partner of Apex Venture
Partners, a Chicago-based venture capital firm, which he co-founded in 1987.
Prior to 1987, he was one of the three founding partners of Knightsbridge
Partners, a private investment firm. Previously, Mr. Johnson was associated
with Beatrice Foods, serving in a number of positions, including Chief
Financial Officer of the parent corporation and Senior Vice President of the US
Foods operating subsidiary.
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION SINCE
- --------------------------- ---------------------- ---------
Matthew J. Stover, age 46 Chairman 2000
LKM Ventures, LLC
Mr. Stover has been a member of the Board of Directors since July 2000.
Since January 2000, Mr. Stover has been the Chairman of LKM Ventures, LLC, an
investment management and advisory firm. From May 2000 to June 2001, Mr. Stover
also served as the President and then President and Chief Executive Officer of
edu.com, Inc. a marketing services company that facilitated partnerships and
commerce between colleges and universities and Fortune 500 companies. From
January 1994 to December 1999, he was the Group President of Directory Services
for Bell Atlantic Corporation and its
3
predecessor, NYNEX Information Services Group. Mr. Stover is also a director of
Clickmarks, Inc. and DCCI, Inc. and is a trustee of the Committee for Economic
Development. He is a former director of Infoseek Corporation.
CLASS III DIRECTORS CONTINUING IN OFFICE UNTIL THE ANNUAL MEETING OF
STOCKHOLDERS IN 2004:
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION SINCE
- ---------------------- --------------------------------------- ---------
John A. Lack, age 57 President and Chief Executive Officer 2000
i3 Mobile, Inc.
Mr. Lack joined i3 Mobile on November 20, 2000 as its President, Chief
Executive Officer and a member of the board of directors. From January 2000 to
November 2000, he was President of Digitar, Inc., a consulting firm to the
media and telecommunications industries. From May 1998 to December 1999, he
served as Chief Operating Officer of STREAM, Telecom Italia's digital content
and pay television company. From March 1996 to April 1998, he was the Chief
Executive Officer of a joint venture between Acclaim Entertainment, Inc. and
Tele-Communications, Inc. for the creation of interactive video game channels.
Mr. Lack served as an Executive Vice President of ESPN, Inc. from 1994 to 1996.
In his career, Mr. Lack has compiled over thirty years experience in the
communications and entertainment industries, most notably as a creator of MTV,
The Movie Channel, Nickelodeon and ESPN-2.
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION SINCE
- ---------------------------- -------------------------- ---------
Stephen G. Maloney, Age 45 Executive Vice President 1991
MSA Limited
Mr. Maloney has been a member of the board of directors since 1991. Since
September 2001, Mr. Maloney has served as Executive Vice President of MSA
Limited, a New York based provider of anti-terrorism services and technology.
From November 20, 2000 to August 31, 2001, Mr. Maloney served as our Chairman
of the Board of Directors and Chief Strategist. Prior thereto, he was our Chief
Executive Officer from September 1999 and our President and a director since he
co-founded our company with Mr. Unnold in 1991. From February 1987 to April
1994, Mr. Maloney was Senior Vice President for Operations of Our Lady of Mercy
Medical Center, a teaching hospital located in the Bronx, New York. Prior to
that, from February 1984 until January 1987, he served as a Vice President of
Misericordia Medical Center. In March 2001, Mr. Maloney was appointed to serve
on the board of directors of the Connecticut Development Authority.
DIRECTOR
NAME AND AGE PRINCIPAL OCCUPATION SINCE
- --------------------------- ------------------------ ---------
Member
J. William Grimes, age 60 BG Media Investors LLC 1999
Mr. Grimes has served as the Chairman of the Board of the Company since
August 2001, and has been a member of the board of directors since February
1999. Since 1996, Mr. Grimes has been a Member of BG Media Investors LLC, a
company he founded. BG Media Investors LLC is a private equity capital firm
specializing in investments in media and telecommunications companies. From
1994 until 1996, Mr. Grimes was the Chief Executive Officer of Zenith Media, a
media services agency. From 1991 until 1993, he served as Chief Executive
Officer of Multimedia, Inc., a diversified media company that merged into
Gannett Co., Inc. in 1995. From 1988 through 1991, Mr. Grimes was President and
Chief Executive Officer of Univision Holdings, Inc., the largest Spanish
language media company in the United States. From 1982 through 1988, Mr. Grimes
was President and Chief Executive Officer of ESPN, Inc. Mr. Grimes also serves
on the board of directors of InterVU, Inc., and is an Executive Director of the
New School University's "Media Management Program."
BOARD MEETINGS AND COMMITTEES
The Board of Directors held ten (10) meetings during the fiscal year ended
December 31, 2001. During fiscal 2001, the Board of Directors had three
committees: the Audit Committee, the Executive
4
Committee and the Compensation Committee. During fiscal 2001, all directors
attended 75% or more of the Board of Directors meetings and meetings of
committees on which they served. One current member of the Board of Directors,
Donald Ohlmeyer, will not stand for re-election. Robert M. Unnold, a director
since 1991, resigned from the Board of Directors effective March 15, 2002.
The Audit Committee, which as of the end of fiscal 2001 was comprised of
Messrs. Daniels, Ohlmeyer, Unnold and Johnson (Committee Chairman), met four
(4) times during such fiscal year. Three of the four members of the Audit
Committee are independent directors within the meaning of Rule 4200 (a) (15) of
the Rules of the National Association of Securities Dealers, Inc. The board
determined that it is in the best interests of the Company and our shareholders
to appoint Mr. Unnold, a founder and our former Chairman of the Board, to be a
member of the Audit Committee, based on his knowledge and understanding of our
"Powered by i3 Mobile" legacy product line (which accounted for all of our
revenue in 2001), and to provide his valuable insight as we transitioned to our
new business model in 2001. The Audit Committee meets with the Company's
management and independent accountants to, among other things, review the
results of the annual audit and quarterly reviews and discuss the financial
statements, recommend to the Board the independent accountants to be retained
and receive and consider the accountants' comments as to controls, adequacy of
staff and management performance and procedures in connection with audit and
financial controls.
The Compensation Committee, which as of the end of fiscal 2001 was
comprised of Messrs. Grimes, Lack, Maloney, and Stover (Committee Chairman),
met five (5) times during such fiscal year. The Compensation Committee
recommends, reviews and oversees the salaries, benefits and stock options for
our employees, directors and other individuals compensated by us. The
Compensation Committee also administers our incentive compensation and benefit
plans. The Compensation Committee reports to the Board of Directors.
The Executive Committee, which as of the end of fiscal 2001 was comprised
of Messrs. Grimes, Johnson, Lack and Stover met eighteen (18) times during such
fiscal year. The Executive Committee acts from time to time on behalf of the
Board of Directors in managing the business and affairs of our Company (except
as limited by Delaware law or our bylaws) and is delegated certain assignments
and functions by the Board of Directors.
DIRECTOR COMPENSATION
The Board of Directors adopted the Directors Compensation Program in July
2000, as amended in March 2002. Under the Directors Compensation Program, which
is managed by the Compensation Committee and administered by our President and
Secretary, directors are entitled to reimbursement for reasonable travel
expenses related to attendance at Board meetings and are eligible to
participate in our 2000 Stock Incentive Plan in accordance with the Directors
Compensation Program. Each individual non-employee director who first serves
after the adoption of the Directors Compensation Program will receive a
fully-vested option to purchase 20,000 shares of our common stock. Thereafter,
each eligible non-employee director will receive an option to purchase 10,000
shares at the annual meeting of stockholders. This annual option grant will
vest 25% at the date of the first board meeting following such annual meeting,
and 25% during each of the following three calendar quarters. Director
appointments made mid-term will receive such option on a quarterly pro rata
basis. If a director ceases to serve as a director for any reason other than
death or disability, all vested options are exercisable within 90 days of the
termination date.
On September 25, 2001, the Board of Directors granted J. William Grimes,
our Chairman of the Board, an option to purchase 100,000 shares of our common
stock at an average exercise price of $7.00 per share. The Board has also
approved providing Mr. Grimes with use of a Company leased vehicle at a monthly
cost of approximately $1,000.
PROPOSAL 2
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF OUR COMMON STOCK
The Board of Directors, by resolution adopted on March 26, 2002,
unanimously approved and recommended for approval by our stockholders an
amendment to our Restated Certificate of Incorporation
5
that would increase the number of authorized shares of our common stock
to 75,000,000. The stockholders are now being asked to approve this proposed
amendment.
Our Restated Certificate of Incorporation currently authorizes the issuance
by the Company of up to 50,000,000 shares of common stock. As of March 31, 2002,
there were approximately 22,500,000 shares of common stock issued and
outstanding, approximately 4,000,000 shares of common stock reserved for
issuance under our various stock plans and approximately 23,500,000 shares of
common stock remaining available for future issuance. No preferred shares are
issued or outstanding.
The Board believes that the proposed increase is desirable so that we will
have more flexibility to issue shares as needed in connection with future
opportunities for expanding our business through investments or acquisitions,
possible future stock dividends or stock splits, and for other general
corporate purposes. There are no preemptive rights with respect to our common
stock and there currently is no specific use planned for any of the additional
shares being proposed for authorization under this proposal. Authorized but
unissued shares of our common stock may be issued at such times, for such
purposes and for such consideration as the Board may determine to be
appropriate without further authority from our stockholders, except as
otherwise required by applicable law or Nasdaq policies. The increase in
authorized common stock will not have any immediate effect on the rights of
existing stockholders. To the extent that the additional authorized shares are
issued in the future, they will decrease the existing stockholders' percentage
equity ownership; depending upon the price at which they are issued, they could
be either dilutive or nondilutive to the existing stockholders. The increase in
the authorized number of shares of common stock and the subsequent issuance of
such shares could have the effect of delaying or preventing a change in control
without further action by the stockholders. Shares of authorized and unissued
common stock could be issued in one or more transactions which would make a
change in control more difficult, and therefore less likely. We previously
adopted certain measures that may have the effect of helping to delay or resist
an unsolicited takeover attempt. Any such issuance of additional stock could
have the effect of diluting the earnings per share and book value per share of
outstanding shares of common stock, and such additional shares could be used to
dilute the stock ownership or voting rights of a person seeking to obtain
control of us.
The additional shares may be issued at such times, for such purposes and
for such consideration as the Board of Directors of the Company may determine
to be in the best interests of the Company and its stockholders and, except as
otherwise required by applicable law, without further authority from the
stockholders of the Company.
The text of the amendment to the Restated Certificate of Incorporation is
set forth as Appendix A hereto.
REQUIRED VOTE
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST IN PERSON OR BY PROXY
AT THE MEETING WILL BE REQUIRED TO APPROVE THE AMENDMENT TO THE RESTATED
CERTIFICATE OF INCORPORATION. BROKER NON-VOTES AND ABSTENTIONS ARE NOT TREATED
AS VOTES CAST FOR THIS PURPOSE AND HAVE NO EFFECT ON THE OUTCOME OF THE VOTE.
THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL TO AMEND THE
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF OUR
COMMON STOCK. UNLESS OTHERWISE INDICATED, THE ACCOMPANYING FORM OF PROXY WILL
BE VOTED FOR THE CHARTER AMENDMENT.
PROPOSAL 3
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT AUDITORS
Upon the recommendation of the Audit Committee of the Board of Directors,
none of whose members is one of our officers, our Board of Directors has
selected the firm of PricewaterhouseCoopers LLP, as independent auditors, for
our fiscal year ending December 31, 2002, subject to ratification by the
stockholders. PricewaterhouseCoopers LLP served as our independent auditors
during fiscal 2001. If the
6
appointment of the firm of PricewaterhouseCoopers LLP is not approved or if
that firm shall decline to act or their employment is otherwise discontinued,
the Board of Directors will appoint other independent auditors. Representatives
of PricewaterhouseCoopers LLP will be present at the meeting, will be afforded
an opportunity to make a statement and will be available to respond to
inquiries from stockholders.
FEES CHARGED BY INDEPENDENT AUDITORS
AUDIT FEES
Fees paid to PricewaterhouseCoopers LLP for audit services and reviews of
the financial statements included in the Company's Forms 10-Q for fiscal 2001
were $175,600.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
None.
ALL OTHER FEES
All other fees billed by PricewaterhouseCoopers LLP for services rendered
to the Company for fiscal 2001 totaled $22,447, which represented fees for tax
planning and tax consulting services.
After due consideration, the Audit Committee has determined that the
provision of the above services (other than audit services) is compatible with
maintaining the independence of PricewaterhouseCoopers LLP.
REQUIRED VOTE
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST IN PERSON OR BY PROXY
AT THE MEETING WILL BE REQUIRED FOR THE RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2002. BROKER NON-VOTES AND ABSTENTIONS ARE NOT TREATED
AS VOTES CAST FOR THIS PURPOSE AND HAVE NO EFFECT ON THE OUTCOME OF THE VOTE.
THE AUDIT COMMITTEE AND THE BOARD RECOMMEND THAT YOU VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR
INDEPENDENT AUDITORS. UNLESS OTHERWISE INDICATED, THE ACCOMPANYING FORM OF
PROXY WILL BE VOTED FOR THE RATIFICATION OF THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT AUDITORS.
7
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of
the common stock of the Company as of March 29, 2002 by each person known to us
to own beneficially more than 5% of our outstanding common stock, by each
person who is a director or nominee, by each of our executive officers named in
the Summary Compensation Table and by all of our directors and executive
officers as a group. The information contained in the table was furnished by
the persons listed therein. The calculations of the percentage of shares
beneficially owned are based on 22,564,840 shares of common stock outstanding
on March 29, 2002, plus, with respect to each such person, the number of
additional shares issuable upon exercise of outstanding warrants and options
that are exercisable within sixty (60) days of March 29, 2002. Unless otherwise
indicated, the address of each stockholder is c/o i3 Mobile, Inc., 181 Harbor
Drive, Stamford, Connecticut 06902.
PERCENTAGE OF
AGGREGATE NUMBER OF CLASS
NAME AND ADDRESS SHARES BENEFICIALLY OWNED(1) OUTSTANDING
- ------------------------------------- ------------------------------ --------------
John A. Lack ........................ 265,000(2) 1.1
John McMenamin ...................... 83,334(3) *
Wes Trager .......................... 66,667(4) *
Bryan McCann ........................ 66,667(5) *
Ed Fletcher ......................... 16,277(6) *
W. Peter Daniels
c/o Southhampton Hospital
240 Meeting House Lane
Southampton, NY 11968 .............. 238,500(7) 1.0
J. William Grimes
c/o BG Media Investors L.P.
400 Madison Avenue
New York, NY 10017 ................. 4,840,100(8) 21.4
James A. Johnson
c/o Apex Venture Partners
225 W. Washington Street, Suite 1450
Chicago, IL 60606 .................. 634,984(9) 2.7
Stephen G. Maloney
1766 Shippan Avenue
Stamford, CT 06902 ................. 1,539,166(10) 6.8
Donald Ohlmeyer
9920 Tower Lane
Beverly Hills, CA 90210 ............ 30,000(11) *
Matthew J. Stover
c/o LKM Ventures LLC
6 Basswood Lane
Andover, MA 01810 .................. 30,700(12) *
Roger L. Werner, Jr.
16 Barnstable Lane
Greenwich, CT 06830 ................ 0 *
8
PERCENTAGE OF
AGGREGATE NUMBER OF CLASS
NAME AND ADDRESS SHARES BENEFICIALLY OWNED(1) OUTSTANDING
- ---------------------------------------------------------------------- ------------------------------ --------------
Robert M. Unnold
52 Lanark Road
Stamford, CT 06902 .................................................. 2,056,500(13) 9.1
BG Media Investors L.P.
400 Madison Avenue
New York, NY 10017 .................................................. 4,821,600 21.4
Keystone Venture IV, L.P.
1601 Market Street
Suite 2500
Philadelphia, PA 19103 .............................................. 1,125,858 5.0
All directors and executive officers as a group (12 persons) ......... 6,930,066(14) 29.6
- ----------
* Less than one (1%) percent.
(1) Includes shares issuable upon the exercise of warrants and options which
are exercisable within the next 60 days.
(2) Includes 265,000 shares issuable upon the exercise of options.
(3) Includes 83,334 shares issuable upon the exercise of options.
(4) Includes 66,667 shares issuable upon the exercise of options.
(5) Includes 66,667 shares issuable upon the exercise of options.
(6) Includes 16,277 shares issuable upon the exercise of options.
(7) Includes 17,500 shares issuable upon the exercise of options.
(8) Includes 17,500 shares issuable upon the exercise of options, and
4,821,600 shares of common stock held by BG Media Investors L.P. Mr.
Grimes is the Chairman of the Board of i3 Mobile and Managing Member of
BG Media Investors LLC, the General Partner of BG Media Investors L.P.
Mr. Grimes disclaims beneficial ownership of these shares except to the
extent of his pecuniary interest therein.
(9) Consists of 195,984 shares of common stock issuable upon the exercise of
warrants at a weighted average exercise price of $3.00 per share held by
Apex Investment Fund III, L.P. and Apex Strategic Partners, LLC, and
421,500 shares of common stock held by Apex Investment Fund III, L.P. and
Apex Strategic Partners, LLC. Mr. Johnson is a director of i3 Mobile and
President of Stellar Investment Co., the Managing Member of Apex
Management III, LLC, which is the General Partner of Apex Investment Fund
III, L.P. and the Manager of Apex Strategic Partners, LLC. Mr. Johnson
disclaims beneficial ownership of these shares except to the extent of
his pecuniary interest therein. Also includes options to purchase 17,500
shares of common stock.
(10) Includes 75,000 shares issuable upon the exercise of options, and 266,809
shares of common stock issued to Maloney GRAT, an entity controlled by
Mr. Maloney.
(11) Includes 30,000 shares issuable upon the exercise of options.
(12) Includes 30,000 shares issuable upon the exercise of options.
(13) Includes 22,500 shares issuable upon the exercise of options, 1,566,440
shares of common stock issued to RMU Management LLC, an entity controlled
by Mr. Unnold and 459,000 shares held by Wedbush Securities for the
benefit of Mr. Unnold.
(14) Includes 868,929 shares issuable upon the exercise of warrants and
options.
9
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our directors, executive officers and persons who own more than ten percent of
the common stock to file with the Securities and Exchange Commission initial
reports of beneficial ownership on Form 3 and reports of changes in beneficial
ownership on Form 4 or Form 5. Directors, executive officers and greater than
ten percent stockholders are required to furnish us with copies of all such
forms that they file.
To the Company's knowledge, based solely on the review of such forms
furnished to us and written representations that no other reports are required,
we believe that during fiscal 2001, our directors, executive officers and
greater than ten percent stockholders complied with all applicable Section
16(a) filing requirements on a timely basis.
As a result of certain modifications to the insider trading rules, and in
particular, the promulgation of SEC Rule 10b5-1, we have revised our insider
trading policy to allow certain officers and directors to establish
pre-established trading plans. Rule 10b5-1 allows certain officers and
directors to establish written programs that permit an independent person who
is not aware of insider information at the time of the trade to execute
pre-established trades of our securities for the officer or directors according
to fixed parameters. As of March 30, 2002, Steven G. Maloney and RMU Management
LLC, an entity controlled by Robert M. Unnold, have established such trading
plans. We will disclose in future filings with the SEC the name of any
additional officers or directors who establish trading plans in compliance with
Rule 10b5-1.
EXECUTIVE OFFICERS
The names and ages of our executive officers as of March 31, 2002 are as
follows:
EXECUTIVE OFFICERS AGE POSITION
- ---------------------------- ----- ------------------------------------------------------
John A. Lack ............... 57 President and Chief Executive Officer
John J. McMenamin .......... 47 Executive Vice President, Sales
Wes Trager ................. 49 Executive Vice President and Chief Technology Officer
Edward Fletcher ............ 31 Senior Vice President, Finance
Shari Leventhal ............ 40 Senior Vice President, Marketing
Bryan McCann ............... 44 Senior Vice President, Products and Services
For a biographical summary of Mr. Lack, see "Election of Directors."
JOHN MCMENAMIN has served as our Executive Vice President, Sales since
February 2002. From December 1999 to November 2000, Mr. McMenamin served in a
similar capacity with NBC Internet, Inc. From June 1999 to December 1999, Mr.
McMenamin served as Vice President and General Manager of Sponsorship for
iVillage.com. From August 1998 to June 1999, he served as an independent
consultant to the media industry. From December 1997 to August 1998, Mr.
McMenamin served as President and Chief Executive Officer of C3 Communications,
Inc., an interactive media company. From 1991 through 1997, Mr. McMenamin
served in various positions at TimeWarner/Turner and most recently held the
position of President of Turner Private Networks.
WES TRAGER has served as our Chief Technology Officer since December 2000.
From April 1998 to December 2000 he served as Vice President of Engineering for
Global Payment Technologies (GPT), a technology solutions provider for the
gaming industry, and from November 1998 to November 2000 he served as
technology chairman for the Gaming Manufacturers Association. From April 1997
to April 1998, he served as an independent consultant in the field of consumer
product development. Additionally, from March 1993 to April 1997 he served as
Vice President of Advanced Technologies for Acclaim Entertainment, where he was
instrumental in creating innovative, award-winning motion capture technologies
for the interactive video game and entertainment industries. This technology
has earned top honors at technical conferences around the world, including
SIGGRAPH (USA), NICOGRAPH (Japan), IMAGINA (France), and LEAF (London).
10
EDWARD FLETCHER has served as our Senior Vice President, Finance since
December 2001. From July 2000 to December 2001, Mr. Fletcher served as our
Controller. From October 1993 to July 2000, Mr. Fletcher served in a variety of
capacities with Ernst & Young, LLP in its Assurance Advisory Business Services
practice. Fletcher has a Bachelor of Science in Accounting from Fairfield
University and is a Certified Public Accountant.
SHARI F. LEVENTHAL has served as our Senior Vice President, Marketing
since September 2001. From July 1996 to August 2001, Ms. Leventhal was Vice
President of Marketing for Speedvision, a leading motorsports cable network.
From August 1985 to July 1996, Ms. Leventhal served in various Marketing
positions at ESPN, Inc. including Director of Marketing for ESPN and ESPN2,
where she oversaw the execution advertising campaigns for SportsCenter, the
NFL, College Football, the NHL, Major League Baseball, World Cup Soccer, and
all ESPN2 Launch Promotions. Ms. Leventhal holds a B.S. from the Boston
University College of Communications.
BRYAN MCCANN has served as our Senior Vice President, Products and
Services since April 2001. From October 1997 to April 2001, Mr. McCann held
several different positions with Sprint PCS, including from August 2000 to
April 2001 as Vice President, Wireless Data Services where he was responsible
for product development and life cycle management for all mobile data services.
From January 1999 to July 2000, he was Senior Director, Application Development
and, from October 1997 to December 1998, he served as Director, Client
Services. From August 1995 to October 1997, Mr. McCann was Director of Customer
Service and Telecommunications of Implant Innovations, Inc., a manufacturer and
distributor of oral surgical products.
11
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table sets forth information for each of the fiscal years
ended December 31, 2001, 2000 and 1999 concerning compensation of all
individuals serving as (i) chief executive officer during the fiscal year ended
December 31, 2001, (ii) the four most highly compensated executive officers
(other than CEO) who in each case were serving as executive officers during and
at the end of the last completed fiscal year ending December 31, 2001 and (iii)
two individuals for whom information would have been provided had they been
serving as executive officer at the end of fiscal 2001:
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION SECURITIES
--------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS (#) COMPENSATION (1)
- ---------------------------------------- ------ ---------------- ---------- ------------------ -----------------
John A. Lack
President and Chief Executive Officer . 2001 300,000 30,000 11,566
2000 34,041 50,000 765,000(2) 1,041
Stephen G. Maloney(3)
Chairman of the Board of Directors and
Chief Strategist ...................... 2001 471,053(4) 56,250 150,000(5) 310,922(6)
2000 225,000 52,500 6,000
1999 150,000 12,000 6,000
John McMenamin
Executive Vice President, Sales ....... 2001 214,187 45,000 250,000(7) 12,595
Wes Trager
Executive Vice President and Chief
Technology Officer .................... 2001 200,000 20,000
2000 5,556 25,000 200,000(8)
Bryan McCann
Executive Vice President, Products and
Services .............................. 2001 141,667 64,000 200,000(9) 5,000
Michael P. Neuscheler (10)
Executive Vice President and Chief
Financial Officer ..................... 2001 184,423 13,000 100,000(11) 254,843(12)
2000 150,000 0 200,000(13) 9,000
Edward Fletcher
Senior Vice President, Finance ........ 2001 117,501 11,000 35,000(14) 3,586
2000 49,860 0 26,000(15)
- ----------
(1) The Company provides the named executive officers with certain group life,
health, medical and other non-cash benefits generally available to all
salaried employees and not included in this column pursuant to SEC rules.
The amounts shown in this column include car allowance, 401(k) matching
contributions and, where specifically noted, deferred severance payments.
(2) Represents options to purchase 15,000 shares of our common stock at $5.63
per share, 250,000 shares of our common stock at $5.03 per share, 250,000
shares of our common stock at $7.03 per share and 250,000 shares of our
common stock at $9.03 per share.
12
(3) Mr. Maloney served as Chairman of the Board of Directors and Chief
Strategist from November 20, 2000 to August 31, 2001, when his employment
terminated.
(4) Includes $249,130 paid in 2001 as severance pursuant to the terms of Mr.
Maloney's employment agreement.
(5) Represents options to purchase 50,000 shares of our common stock at $4.00
per share, 50,000 shares of our common stock at $6.00 per share and 50,000
shares of our common stock at $8.00 per share.
(6) Includes $300,000 paid in 2002 as severance pursuant to the terms of Mr.
Maloney's employment agreement.
(7) Represents options to purchase shares of our common stock at $2.00 per
share.
(8) Represents options to purchase shares of our common stock at $1.875 per
share.
(9) Represents options to purchase shares of our common stock at $1.05 per
share.
(10) Mr. Neuscheler served as Executive Vice President and Chief Financial
Officer from January 10, 2000 to December 7, 2001 when his employment
terminated.
(11) Represents options to purchase shares of our common stock at $2.41 per
share.
(12) Includes $245,842 to be paid in 2002 as severance pursuant to the terms
of Mr. Neuscheler's employment agreement.
(13) Represents options to purchase shares of our common stock at $7.92 per
share.
(14) Represents options to purchase 10,000 shares of our common stock at $2.41
per share and 25,000 shares of our common stock at $1.96 per share.
(15) Represents options to purchase 10,000 shares of our common stock at
$18.63 per share, 1,000 shares of our common stock at $6.94 and 15,000
shares of our common stock at $5.50 per share.
OPTION GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
The following table shows information regarding options granted to the
named executive officers during the year ended December 31, 2001, We have not
granted any stock appreciation rights. None of the named executive officers
exercised any stock options during fiscal 2001.
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF STOCK
NUMBER OF TOTAL OPTIONS PRICE APPRECIATION FOR
SECURITIES GRANTED TO EXERCISE OR OPTION TERM(5)
UNDERLYING EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME OPTIONS(1) FISCAL YEAR(2) ($/SH)(3) DATE(4) 5% 10%
- ------------------------------- ------------ ---------------- ------------ ------------- --------- ----------
John A. Lack .................. 0 -- -- --
Stephen G. Maloney ............ 50,000 3.20% 4.00 2011(6) 125,779 318,748
50,000 3.20% 6.00 2011(6) 25,779 218,748
50,000 3.20% 8.00 2011(6) -- 118,748
John McMenamin ................ 250,000 16.01% 2.00 2011 314,447 796,870
Wes Trager .................... 0 -- -- -- -- --
Bryan McCann .................. 200,000 12.80% 1.05 2011 126,923 326,717
Michael P. Neuscheler ......... 100,000 6.40% 1.87 2011(7) 117,603 298,030
Edward Fletcher ............... 25,000 1.60% 1.96 2011 30,816 78,093
10,000 * 2.41 2011 15,156 38,409
- ----------
* Less than one (1%) percent.
(1) All options were granted under our 1995 and 2000 Stock Incentive Plans.
All options were incentive stock options that vest in either monthly
installments after the initial annual period or in annual installments
over either three of four years, subject to immediate vesting in the
event of a change in control of our company.
13
(2) Based upon options to purchase an aggregate of 1,561,500 shares of our
common stock granted to employees in 2001.
(3) Certain of these options resulted in deferred compensation that will be
recognized over the vesting period.
(4) The options have ten-year terms, subject to earlier termination upon
death, disability or termination of employment.
(5) Potential gains are net of exercise price, but before taxes associated
with exercise. We recommend caution in interpreting the financial
significance of the figures representing the potential realizable value
of the stock options. They are calculated by multiplying the number of
options granted by the difference between a future hypothetical stock
price and the option exercise price and are shown pursuant to rules of
the SEC. They assume that the fair value of the common stock appreciates
5% or 10% each year based on the value at date of grant, compounded
annually, for ten years (the term of each option). They are not intended
to forecast possible future appreciation, if any, of our stock price or
to establish a present value of options. Also, if appreciation does occur
at the 5% or 10% per year rate, the amounts shown would not be realized
by the recipients until the year 2011. Depending on inflation rates,
these amounts may be significantly less in 2011, in real terms, than
their value today.
(6) Mr. Maloney's employment terminated on August 31, 2001. By agreement, of
the 150,000 unvested options granted to Mr. Maloney in 2001, 50,000
shares have vested and remain exercisable until August 31, 2002. All
other 2001 options were immediately terminated.
(7) Mr. Neuscheler's employment terminated on December 7, 2001. All unvested
options were immediately terminated and all vested options have
terminated unexercised.
AGGREGATE YEAR-END OPTION VALUES
(DECEMBER 31, 2001)
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END(#) OPTIONS AT FISCAL YEAR-END($)
------------------------------- ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------- ------------- --------------- ------------- --------------
John A. Lack ..................... 265,000 500,000 -- --
Stephen G. Maloney ............... 75,000 -- -- --
John McMenamin ................... -- 250,000 -- --
Wes Trager ....................... 66,667 133,333 -- --
Bryan McCann ..................... -- 200,000 -- 88,000
Michael P. Neuscheler(1) ......... -- -- -- --
Ed Fletcher ...................... 9,228 26,772 -- --
- ----------
(1) Mr. Neuscheler's employment terminated on December 7, 2001. In connection
with this termination, all unvested options were immediately terminated
and all vested options have terminated unexercised.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 10, 2001, we entered into a note and security agreement with
RMU Management, LLC an entity controlled by a Robert M. Unnold, then a director
and an Audit Committee member. Under the terms of the note, we agreed to lend
RMU Management, LLC the sum of $500,000, for a period of one year, at an
interest rate equal to the prime rate plus two percent. The note is secured by
500,000 shares of our common stock owned by RMU Management, LLC.
On November 27, 2001 we entered into a retainer agreement with LKM
Ventures LLC, a company controlled by Matthew J. Stover, a director and
Chairman of our Compensation Committee. Pursuant to the retainer agreement, LKM
Ventures LLC will provide us with general business consulting services. The
14
minimum term of the engagement is one (1) day per month over six (6) months
commencing as of November 11, 2001. Our CEO, John A. Lack, will assign all work
assignments to LKM Ventures LLC. All days in excess of 12 requires the prior
written consent of the Chairman of the Board. The daily consulting rate payable
to LKM Ventures LLC is $2,500.00 plus reasonable expenses.
On August 31, 2001, the Company's employment of Stephen G. Maloney
terminated. Under the terms of his termination agreement, we completely
discharged our obligations to Mr. Maloney by paying him severance in the amount
of $549,130. We will continue paying his health benefits through August 31,
2002.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
We previously entered into an employment agreement with John A. Lack, our
President and Chief Executive Officer, dated as of November 20, 2000. The
agreement will expire on December 31, 2003 but will automatically renew for
additional one-year periods unless we provide notice of termination at least 90
days before the expiration of the term. Mr. Lack will receive an annual base
salary of $300,000, subject to annual review by the Board of Directors. Mr.
Lack is eligible to receive a bonus equal to 50% of his base salary upon our
meeting certain agreed upon performance targets. Under the employment agreement
with Mr. Lack, we have the right to terminate his employment at any time and
for any reason. If we do so without cause, or if Mr. Lack terminates his
agreement for "good reason," however, we must continue to pay salary and
benefits until the later of 18 months from the date of termination or the
balance of the term. We are also obligated to pay a similar severance benefit
upon the disability of Mr. Lack. We maintain separate key-man insurance policy
of $2,000,000 for Mr. Lack. Under Mr. Lack's employment agreement, "good
reason" includes the acquisition by any person, directly or indirectly, of the
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company's then outstanding securities in a
transaction to which Mr. Lack does not consent, or the future disposition by
the Company (whether direct or indirect, by sale of assets or stock, merger,
consolidation or otherwise) of all or substantially all of its business and/or
assets in a transaction to which Mr. Lack does not consent.
We entered into an employment agreement dated as of January 1, 2001 with
Stephen G. Maloney, our former Chairman of the Board and Chief Strategist. The
agreement was set to expire on December 31, 2003, and would have automatically
renewed for additional one-year periods unless we had given notice of
termination at least 90 days before the expiration of the term. Under the
agreement, Mr. Maloney was to receive an annual salary of no less than
$300,000. We had the right to terminate Mr. Maloney's employment at any time
and for any reason. If we did so without cause, however, we were required to
continue paying his salary until the later of 18 months from the date of
termination or the balance of the term. Mr. Maloney's employment terminated on
August 31, 2001. We have completely discharged our obligations to Mr. Maloney
by paying him severance in the amount of $549,130. We will continue paying his
health benefits through August 31, 2002.
We entered into an employment agreement dated as of January 10, 2000 with
Michael P. Neuscheler, our former Executive Vice President and Chief Financial
Officer. Under the agreement Mr. Neuscheler was to receive an annual salary of
not less than $150,000. If he met certain performance goals, Mr. Neuscheler was
entitled to receive incentive compensation of up to 50% of his base salary.
Under the employment agreement with Mr. Neuscheler, we had the right to
terminate his employment at any time and for any reason. If we did so without
cause, however, we were required to continue paying his salary until the later
of 18 months from the date of termination or the balance of the term. Mr.
Neuscheler's employment was terminated on December 7, 2001. We have agreed to
pay to Mr. Neuscheler severance in the amount of $250,342 and will continue
paying his benefits through June 7, 2003.
We entered into an employment agreement dated as of December 21, 2000 with
Wes Trager, our Executive Vice President and Chief Technology Officer. The
agreement will expire on December 21, 2002 but will automatically renew for
additional one-year periods unless we give notice of termination at least 90
days before the expiration of the term. Pursuant to his agreement, Mr. Trager
will receive an annual salary of not less than $200,000. If he meets certain
performance goals, Mr. Trager is entitled to receive incentive compensation of
up to 35% of his base salary. We have the right to terminate Mr. Trager's
employment agreement at any time and for any reason. If we do so without cause,
or if Mr. Trager
15
terminates his agreement for "Good Reason Upon Change in Control" of the
Company (as defined in Mr. Trager's employment agreement), we must continue to
pay salary and benefits for 6 months from the date of termination. We are also
obligated to pay a similar severance benefit upon the disability of Mr. Trager.
We entered into an employment agreement dated as of February 21, 2001 with
John McMenamin, our Executive Vice President, Sales. The agreement will expire
on February 21, 2003, but will automatically renew for additional one-year
periods unless we give notice of termination at least 90 days before the
expiration of the term. Pursuant to the agreement, Mr. McMenamin will receive
an annual salary of not less than $250,000. If he meets certain performance
goals, Mr. McMenamin is entitled to receive incentive compensation of up to
$150,000. We have the right to terminate Mr. McMenamin's employment agreement
at any time and for any reason. If we do so without cause, or if Mr. McMenamin
terminates his agreement for "Good Reason Upon Change in Control" of the
Company or for "Change of CEO"(as defined in Mr. McMenamin's employment
agreement), we must continue to pay salary and benefits until the later of 12
months from the date of termination or the balance of the term. We are also
obligated to pay a similar severance benefit upon the disability of Mr.
McMenamin.
We entered into an employment agreement dated as of April 16, 2001 with
Bryan McCann, our Senior Vice President, Products and Services. The agreement
will expire on April 16, 2003, but will automatically renew for additional
one-year periods unless we give notice of termination at least 90 days before
the expiration of the term. Pursuant to the agreement, Mr. McCann will receive
an annual salary of not less than $200,000. If he meets certain performance
goals, Mr. McCann is entitled to receive incentive compensation of up to
$100,000. We have the right to terminate Mr. McCann's employment agreement at
any time and for any reason. If we do so without cause, or if Mr. McCann
terminates his agreement for "Good Reason Upon Change in Control" of the
Company (as defined in Mr. McCann's employment agreement), we must continue to
pay salary and benefits for a period of 12 months from the date of termination.
We are also obligated to pay a similar severance benefit upon the disability of
Mr. McCann.
We entered into an employment agreement dated as of December 10, 2001 with
Ed Fletcher, our Senior Vice President, Finance. The agreement will expire on
December 10, 2003, but will automatically renew for additional one-year periods
unless we give notice of termination at least 90 days before the expiration of
the term. Pursuant to the agreement, Mr. Fletcher will receive an annual salary
of not less than $135,000. If he meets certain performance goals, Mr. Fletcher
is entitled to receive incentive compensation of up to 25% of his base salary.
We have the right to terminate Mr. Fletcher's employment agreement at any time
and for any reason. If we do so without cause, however, we must continue to pay
salary and benefits for 6 months from the date of termination. We are also
obligated to pay a similar severance benefit upon the disability of Mr.
Fletcher.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Stover, Grimes, Lack and Maloney served as members of our
Compensation Committee during fiscal 2001. None of our executive officers has
served as a member of the compensation committee, or other committee serving an
equivalent function, of any other entity, whose executive officers served as a
director of or a member of our Compensation Committee.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General. The Compensation Committee of the Board is responsible for
determining and administering our compensation policies for the remuneration of
our executive officers. The Compensation Committee annually evaluates
individual and corporate performance from both a short-term and long-term
perspective.
Salaries. The policy is to provide salaries (i) that are approximately at
the median of the salaries paid to similar executive officers in similar
companies, adjusted in the Compensation Committee's or the Board of Director's
subjective judgment to reflect differences in duties of the officers and
differences in the size and stage of development of the companies, in order to
attract and retain qualified executives and (ii) that compensate individual
employees for their individual contributions and performance. The
16
Compensation Committee or the Board of Directors determines comparable salaries
paid by other companies similar to us through its subjective evaluation of its
members' knowledge of salaries paid by other companies, any studies conducted
about our industry, salary requests of individuals interviewed by us for open
positions and recommendations of management. The Compensation Committee or the
Board of Directors subjectively evaluates this information and our financial
resources and prospects to determine the salary and severance arrangements for
an executive officer.
Components of executive compensation. Historically, our executive
employees have received cash-based and equity-based compensation.
Cash-Based Compensation. Base salary represents the primary cash component
of an executive employee's compensation and is determined by evaluating the
responsibilities associated with an employee's position and the employee's
overall level of experience. In addition, the Compensation Committee, in its
discretion, may award bonuses. The Compensation Committee and the Board of
Directors believe that our management and employees are best motivated through
stock option awards and cash incentives.
Equity-Based Compensation. Equity-based compensation principally has been
in the form of stock options. The Compensation Committee and the Board of
Directors believe that stock options represent an important component of a
well-balanced compensation program. Because stock option awards provide value
only in the event of share price appreciation, stock options enhance
management's focus on maximizing long-term stockholder value and thus provide a
direct relationship between an executive's compensation and the stockholders'
interests. No specific formula is used to determine stock option awards for an
employee. Rather, individual award levels are based upon the subjective
evaluation of each employee's overall past and expected future contributions to
our success. Stock options granted from time to time to our executive
employees, including the named executive officers, under our Incentive Stock
Plans generally provide for acceleration of vesting in the event of a change in
control of our company.
Employment agreements and miscellaneous personal benefits. The
Compensation Committee's and the Board of Director's policy has been to have
employment agreements with certain of its executive officers to provide them
with specified minimum positions, periods of employment, salaries, fringe
benefits and severance benefits. These benefits are intended to permit the
executive officer to focus his attention on performing his duties, rather than
on the security of his employment, and to provide the officer with benefits
deemed by the Compensation Committee or the Board to be suitable for the
executive's office.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Compensation Committee and the Board of Directors recognize the unique
skill and experience of the Chief Executive Officer. The philosophy, factors
and criteria of the Compensation Committee and the Board generally applicable
to our officers are also applicable to the Chief Executive Officer. The goal of
the Compensation Committee in developing total compensation for the Chief
Executive Officer was to provide a significant incentive to motivate and retain
his services for a significant term. The current agreement with the Chief
Executive Officer, which expires in December 2003, provides:
Base Salary. Base salary of $300,000 per year. The Base Salary and other
compensation of the Chief Executive Officer will be reviewed at least annually
during the term of the current agreement with a view to increase such
compensation based upon the then prevailing industry salary scales for
equivalently valued businesses for the chief executive officer position, the
Chief Executive Officer's performance, the performance of the Company,
inflation and other relevant factors.
Performance Bonus. A performance bonus shall be paid to the Chief
Executive Officer, which shall be subject to the achievement of certain
performance goals mutually agreed upon between the Chief Executive Officer and
the Company, in an amount up to 50% of the Chief Executive Officer's Base
Salary. The Chief Executive Officer is entitled to the Performance Bonus on a
pro rata basis for partial achievement of the performance goals.
17
Stock Options. The Company agreed to grant stock options to the Chief
Executive Officer under its 2000 Stock Incentive Plan to acquire an aggregate
of 750,000 shares of the Company's common stock. The options will generally
vest equally over a three-year period. In fiscal 2001, the Chief Executive
Officer did not receive any options to purchase common stock.
In setting the above compensation package a number of factors were
considered, including:
o the unique skills and experience of the Chief Executive Officer;
o total compensation of key executives at a select group of comparable
companies; and
o the importance of the Chief Executive Officer to the continued growth
and success of the Company and the need to provide him with a significant
incentive to motivate and retain his services for a three-year period.
The Committee made decisions about Mr. Lack's compensation in accordance
with his and the Company's performance against objectives. Base compensation
was paid at $300,000, in accordance with his employment agreement. An annual
performance bonus for 2001 of $30,000 was granted based on Mr. Lack's
performance bonus objectives, the Company's results and the economic and
competitive environment in 2001.
COMPENSATION COMMITTEE (2001)
MATHEW J. STOVER
J. WILLIAM GRIMES
JOHN A. LACK
STEPHEN G. MALONEY
REPORT OF THE AUDIT COMMITTEE
The following is the report of the Audit Committee with respect to our
audited financial statements for the fiscal year ended December 31, 2001.
The Audit Committee has reviewed and discussed our audited financial
statements with management. The Audit Committee has discussed with
PricewaterhouseCoopers LLP, our independent accountants, the matters required
to be discussed by Statement of Auditing Standards No. 61, (Communications with
Audit Committees) which includes, among other items, matters related to the
conduct of the audit of our financial statements, including the auditor's
judgments about the quality of the Company's accounting principles as applied
to its financial reporting. The Audit Committee has also received written
disclosures and the letter from PricewaterhouseCoopers LLP required by
Independence Standards Board Standard No. 1, which relates to the accountant's
independence from us and our related entities, has considered the compatibility
of nonaudit services with the auditors' independence and discussed with
PricewaterhouseCoopers LLP their independence from us.
The Audit Committee acts pursuant to the Audit Committee Charter, a copy
of which is attached as Appendix B to this proxy statement. Each of the members
of the Audit Committee, except for Mr. Unnold who has been employed by us
within the past three years, qualifies as an "independent" director under the
current listing standards of the National Association of Securities Dealers.
Based on the review and discussions referred to above, the Audit Committee
recommended to the Board of Directors that our audited financial statements be
included in our Annual Report on Form 10-K for the fiscal year ended December
31, 2001 for filing with the Securities and Exchange Commission.
AUDIT COMMITTEE (2001)
JAMES A. JOHNSON
W. PETER DANIELS
DONALD OHLMEYER
ROBERT M. UNNOLD
18
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
The following Performance Graph compares our performance with that of the
Nasdaq Stock Market--Computer Index and the Nasdaq Stock
Market--Telecommunications Index, each of which is a published industry index.
The comparison of the cumulative total return to stockholders for each of the
periods assumes that $100 was invested on April 6, 2000 (the effective date our
common stock was registered under the Securities Exchange Act of 1934, as
amended), in our common stock and in the Nasdaq Stock--Computer Index and the
Nasdaq Stock Market--Telecommunications Index and that all dividends were
reinvested.
COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT SINCE APRIL 6, 2000
i3 Mobile Nasdaq Telecommuni NasdaqsComputer Index
Apr-00 117.19 89.43 85.41
May-00 49.22 74.76 74.98
Jun-00 114.84 86.64 90.96
Jul-00 82.81 77.1 81.68
Aug-00 56.63 78.39 92.05
Sep-00 42.19 69.16 84.14
Oct-00 34 60.41 77.02
Nov-00 25 43.94 55.86
Dec-00 25 44.03 51.96
Jan-01 19.14 55.28 60.07
Feb-01 11.72 44.05 45.95
Mar-01 5.86 38.8 37.9
Apr-01 10.44 40.33 46.57
May-01 15.44 37.92 46.65
Jun-01 18.13 36.74 49.35
Jul-01 16 33.32 43.3
Aug-01 17.75 29.48 35.74
Sep-01 18.5 26.75 30.19
Oct-01 12.5 26.11 35.09
Nov-01 13.13 28.86 39.82
Dec-01 9.31 29.48 41.85
Value of $100 invested since April 6, 2000:
i3 Mobile, Inc. Common Stock ............................... $ 9.31
The Nasdaq Stock Market (Computer) Index ................... $ 41.85
The Nasdaq Stock Market (Telecommunications) Index ......... $ 29.48
Our closing price on December 31, 2001, the last trading day of fiscal
2001, was $1.49 per share.
OTHER MATTERS
The Board knows of no other matters which are likely to be brought before
the meeting. If, however, any other matters are properly brought before the
meeting, the persons named in the enclosed proxy or their substitutes shall
vote thereon in accordance with their judgment pursuant to the discretionary
authority conferred by the form of proxy.
Our Annual Report, including certain financial statements, consisting of
our Annual Report on Form 10-K for the fiscal year ended December 31, 2001, is
being mailed concurrently with this proxy statement to all persons who were
holders of record of common stock at the close of business on March 29, 2002,
which is the record date for voting purposes.
19
Upon the written request of any stockholder, we will provide, without
charge, a copy of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2001. Written requests for such report should be directed to our
General Counsel, 181 Harbor Drive, Stamford, Connecticut 06902.
STOCKHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
Any eligible stockholder who wishes to present proposals for action at the
next annual meeting of stockholders and who desires that such proposals be
considered for inclusion in the Company's proxy statement and form of proxy
relating to such annual meeting must submit their proposals in writing, to the
attention of the Company's General Counsel, on or before November 30, 2002, and
must otherwise comply with the rules of the Securities and Exchange Commission
relating to stockholder proposals.
By Order of the Board of Directors
JOHN A. LACK
President and Chief Executive Officer
Stamford, Connecticut
April 12, 2002
20
DOCUMENTS INCORPORATED BY REFERENCE
The following documents, or portions thereof, filed by the Company with
the Commission pursuant to the Exchange Act are incorporated by reference in
this Proxy Statement:
I. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001 (File No. 0-18299);
II. The information regarding the Company's common stock contained in the
Registration Statement on Form S-1/A, filed on April 4, 2000 (File No.
333-94191).
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the date of the
Meeting, shall be deemed to be incorporated by reference in this Proxy
Statement and to be a part of this Proxy Statement from the respective dates of
filings of such documents.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Proxy Statement to the extent that a statement
contained herein or in any subsequently filed document which also is or is
deemed to be incorporated herein by reference modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Proxy
Statement.
The Company undertakes to provide, without charge, to each person to whom
this Proxy Statement is delivered, upon the written or oral request of such
person and by first class mail or other equally prompt means within one
business day of receipt of such request, a copy of any or all of the documents
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference herein). Requests for
such documents should be directed to the office of the Chief Financial Officer,
i3 Mobile, Inc., 181 Harbor Drive, Stamford, Connecticut 06902. Telephone
requests for such copies should be directed to the Chief Financial Officer at
203-428-3000.
21
APPENDIX A
TEXT OF PROPOSED AMENDMENT OF THE
RESTATED CERTIFICATE OF INCORPORATION OF
I3 MOBILE, INC.
----------------
"FOURTH. Number of Shares. The total number of shares of stock which the
Corporation shall have authority to issue is 75,000,000 shares of Common Stock,
par value $0.01 per share ("Common Stock"), and 50,000 shares of Preferred
Stock, par value $0.01 per share ("Preferred Stock")."
22
APPENDIX B
AUDIT COMMITTEE CHARTER
ORGANIZATION
There shall be a committee of the Board of Directors to be known as the
Audit Committee to assist the Board in monitoring (1) the integrity of the
financial statements of the Company, (2) the compliance by the Company with
legal and regulatory requirements and (3) the independence and performance of
the Company's internal and external auditors. The Audit Committee of the Board
of Directors shall be comprised of no more than four directors with no less
than three directors who are independent of management of i3 Mobile, Inc. (the
"Company"). All Audit Committee members will be financially literate, and, in
particular, the Chairman of the Audit Committee shall have accounting or
related financial management expertise.
The members of the Audit Committee shall be appointed by the Board. The
Audit Committee shall have the authority to retain special legal, accounting or
other consultants to advise the Committee. The Audit Committee may request any
officer or employee of the Company or the Company's outside counsel or
independent auditor to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee. The Audit Committee may also meet
with the Company's investment bankers or financial analysts who follow the
Company.
The Audit Committee shall make regular reports to the Board.
RESPONSIBILITIES:
The Audit Committee shall:
1. Review and reassess the adequacy of this Charter annually and recommend any
proposed changes to the Board for approval.
2. Review the annual audited financial statements with management, including
major issues regarding accounting and auditing principles and practices as well
as the adequacy of internal controls that could significantly affect the
Company's financial statements.
3. Review an analysis prepared by management and the independent auditor of
significant financial reporting issues and judgments made in connection with
the preparation of the Company's financial statements.
4. Review with management and the independent auditor the effect of regulatory
and accounting initiatives as well as off-balance sheet structures on the
Company's financial statements, if any.
5. Review with management and the independent auditor the Company's quarterly
financial statements prior to the filing of its Form 10-Q, including the
results of the independent auditors' reviews of the quarterly financial
statements.
6. Meet periodically with management to review the Company's major financial
risk exposures and the steps management has taken to monitor and control such
exposures.
7. Review major changes to the Company's auditing and accounting principles and
practices as suggested by the independent auditor or management.
8. Recommend to the Board the appointment of the independent auditor, which
firm is ultimately accountable to the Audit Committee and the Board.
9. Review the experience and qualifications of the senior members of the
independent auditor team and the quality control procedures of the independent
auditor.
10. Approve the fees to be paid to the independent auditor for audit services.
11. Evaluate the retention of the independent auditor for any non-audit service
and the fee for such service.
23
12. Receive periodic reports from the independent auditor regarding the
auditor's independence, discuss such reports with the auditor, consider whether
the provision of non-audit services is compatible with maintaining the
auditor's independence and, if so determined by the Audit Committee, recommend
that the Board take appropriate action to satisfy itself of the independence of
the auditor.
13. Evaluate together with the Board the performance of the independent
auditor. If so determined by the Audit Committee, recommend that the Board
replace the independent auditor.
14. Recommend to the Board guidelines for the Company's hiring of employees of
the independent auditor who were engaged on the Company's account.
15. Meet with the independent auditor prior to the audit to review the planning
and staffing of the audit.
16. Obtain from the independent auditor assurance that Section 10A of the
Securities Exchange Act of 1934 has not been implicated.
17. Discuss with the independent auditor the matters required to be discussed
by Statement on Auditing Standards No. 61 relating to the conduct of the audit.
18. Review with management and the independent auditor any correspondence with
regulators or governmental agencies and any employee complaints or published
reports which raise material issues regarding the Company's financial
statements or accounting policies.
19. Review with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the auditor
and the Company's response to that letter. Such review should include:
(a) Any difficulties encountered in the course of the audit work,
including any restrictions on the scope of activities or access to
required information, and any disagreements with management.
(b) Any changes required in the planned scope of the audit.
20. Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement.
21. Review with the Company's General Counsel legal matters that may have a
material impact on the financial statements, the Company's compliance policies
and any material reports or inquiries received from regulators or governmental
agencies.
22. Meet at least annually with the chief financial officer or equivalent and
the independent auditor in separate executive sessions.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is
the responsibility of management and the independent auditor. Nor is it the
duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent auditor or to
assure compliance with laws and regulations and the Company's Code of Conduct.
24
I3 MOBILE, INC.
181 HARBOR DRIVE
STAMFORD, CONNECTICUT 06902
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
The undersigned hereby appoints John A. Lack and/or J. William Grimes
as proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of the common
stock of i3 Mobile, Inc. held of record by the undersigned on March 29, 2002, at
the Annual Meeting of Stockholders to be held on May 22, 2002 or at any
adjournment thereof.
1. Election of the following individuals as directors: W. PETER DANIELS AND
ROGER L. WERNER, JR. to serve as Class I directors until the Annual Meeting of
Stockholders in 2005
[ ] FOR both nominees listed (except as marked to the contrary above)
[ ] WITHHOLD AUTHORITY
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY OF THE NOMINEES, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
2. Approval of the proposed amendment to the Certificate of Incorporation to
provide for an increase to the authorized shares of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Ratification of the appointment of PricewaterhouseCoopers LLP as i3 Mobile,
Inc.'s independent auditors for the fiscal year ending December 31, 2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting. This proxy, when properly
executed, will be voted in the manner directed herein by the undersigned
stockholder. If no direction is given, this proxy will be voted FOR each of the
four proposals.
(continued, and to be signed, on other side)
(continued from other side)
Receipt of Notice of Annual Meeting of Stockholders and Proxy Statement
dated April 12, 2002 is hereby acknowledged.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
PRE-PAID ENVELOPE OR DELIVER TO: American Stock Transfer & Trust Company, 59
Maiden Lane, New York, New York 10005. Facsimile copies of the proxy, properly
completed and duly executed, will be accepted at (718) 921-8323. If you have any
questions, please call American Stock Transfer & Trust Company at (212)
936-5100.
DATED:___________________________________________, 2002
SIGNATURE:_____________________________________________
SIGNATURE IF HELD JOINTLY:_____________________________
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.