SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Under Rule 14a-12
|_| Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
GoAmerica, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
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|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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GOAMERICA, INC.
433 Hackensack Avenue
Hackensack, New Jersey 07601
April 17, 2002
To Our Stockholders:
You are most cordially invited to attend the 2002 Annual Meeting of
Stockholders of GoAmerica, Inc. at 10:00 a.m. local time, on Wednesday, May 15,
2002, at the GoAmerica Wireless Internet Connectivity Center located at 55
Broad Street, New York, New York 10004.
The Notice of Meeting and Proxy Statement on the following pages describe
the matters to be presented at the meeting.
It is important that your shares be represented at this meeting to ensure
the presence of a quorum. Whether or not you plan to attend the meeting, we
hope that you will have your shares represented by taking a moment to vote by
phone, via the Internet or by using the enclosed proxy card, at your earliest
convenience. Unless the proxy is validly revoked by you, your shares will be
voted in accordance with the instructions you have given in your proxy.
Thank you for your continued support.
Sincerely,
/s/ Aaron Dobrinsky
Aaron Dobrinsky
Chairman of the Board and
Chief Executive Officer
GOAMERICA, INC.
433 Hackensack Avenue
Hackensack, New Jersey 07601
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 15, 2002
---------------------
The Annual Meeting of Stockholders (the "Meeting") of GoAmerica, Inc., a
Delaware corporation (the "Company"), will be held at the GoAmerica Wireless
Internet Connectivity Center located at 55 Broad Street, New York, New York
10004 on Wednesday, May 15, 2002, at 10:00 a.m. local time, for the following
purposes:
(1) To elect two Class B directors to serve until the 2005 Annual Meeting
of Stockholders and until their respective successors shall have been
duly elected and qualified;
(2) To ratify the appointment of Ernst & Young LLP as independent
accountants for the year ending December 31, 2002; and
(3) To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
Holders of Common Stock of record at the close of business on March 22,
2002 are entitled to notice of and to vote at the Meeting, or any adjournment
or adjournments thereof. A complete list of such stockholders will be open to
the examination of any stockholder at the Company's principal executive offices
at 433 Hackensack Avenue, Hackensack, New Jersey 07601 and at 55 Broad Street,
New York, New York 10004 for a period of ten days prior to the Meeting as well
as on the day of the Meeting. The Meeting may be adjourned from time to time
without notice other than by announcement at the Meeting.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, KINDLY SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN
ENVELOPE, OR FOLLOW THE INSTRUCTIONS PROVIDED FOR VOTING BY PHONE OR THE
INTERNET. THE PROMPT RETURN OF PROXIES OR VOTE BY PHONE OR THE INTERNET WILL
ENSURE A QUORUM AND SAVE THE COMPANY THE EXPENSE OF FURTHER SOLICITATION. EACH
PROXY GRANTED MAY BE REVOKED BY THE STOCKHOLDER APPOINTING SUCH PROXY AT ANY
TIME BEFORE IT IS VOTED. IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOUR
SHARES ARE REGISTERED IN DIFFERENT NAMES OR ADDRESSES, EACH SUCH PROXY CARD
SHOULD BE SIGNED AND RETURNED TO ENSURE THAT ALL OF YOUR SHARES WILL BE VOTED.
IF YOU ELECT TO VOTE BY PHONE OR THE INTERNET, THE LAST VOTE YOU SUBMIT
CHRONOLOGICALLY (BY ANY MEANS) WILL SUPERSEDE YOUR PRIOR VOTE(S). ALSO, IF YOU
VOTE BY PHONE OR THE INTERNET, AND LATER DECIDE TO ATTEND THE ANNUAL MEETING,
YOU MAY CANCEL YOUR PREVIOUS VOTE AND VOTE IN PERSON AT THE MEETING.
Hackensack, New Jersey By Order of the Board of Directors
April 17, 2002
/s/ Francis J. Elenio
Francis J. Elenio
Secretary
The Company's 2001 Annual Report accompanies the Proxy Statement.
GOAMERICA, INC.
433 Hackensack Avenue
Hackensack, New Jersey 07601
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PROXY STATEMENT
---------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of GoAmerica, Inc. (the "Company", "GoAmerica", or "We"
and any derivations thereof) of proxies to be voted at the Annual Meeting of
Stockholders of the Company to be held on Wednesday, May 15, 2002 (the
"Meeting"), at the GoAmerica Wireless Internet Connectivity Center located at
55 Broad Street, New York, New York 10004 at 10:00 a.m. local time, and at any
adjournment or adjournments thereof. Holders of record of shares of Common
Stock, $.01 par value ("Common Stock"), as of the close of business on March
22, 2002, will be entitled to notice of and to vote at the Meeting and any
adjournment or adjournments thereof. As of that date, there were 53,740,587
shares of Common Stock issued and outstanding and entitled to vote. Each share
of Common Stock is entitled to one vote on any matter presented to stockholders
at the Meeting. As of March 22, 2002, there were 299 holders of record and
approximately 19,837 beneficial owners of our Common Stock.
This Proxy Statement, together with the related proxy card, is being
mailed to the stockholders of the Company on or about April 17, 2002. The
Annual Report to Stockholders of the Company for the year ended December 31,
2001, including financial statements (the "Annual Report"), is being mailed
together with this Proxy Statement to all stockholders of record as of March
22, 2002. In addition, we have provided brokers, dealers, banks, voting
trustees and their nominees, at our expense, with additional copies of the
Annual Report so that such record holders could supply such materials to
beneficial owners as of March 22, 2002. We will bear the entire cost of this
proxy solicitation, including preparation, assembly, printing and mailing of
this Proxy Statement, the proxy card, and any additional materials furnished to
stockholders. You may vote by completing and returning the enclosed proxy or by
voting in person at the Meeting. In addition, you may be able to vote by phone
or via the Internet, as described below.
Whether or not you plan to attend the Meeting, please take the time to
vote. Votes may be cast:
o by traditional paper proxy card;
o by phone;
o via the Internet; or
o in person at the Meeting.
Please take a moment to read the instructions, choose the way to vote that
you find most convenient and cast your vote as soon as possible.
Voting by Proxy Card. If proxies in the accompanying form are properly
executed and returned, the shares of Common Stock represented thereby will be
voted in the manner specified therein. If not otherwise specified, the shares
of Common Stock represented by the proxies will be voted (i) FOR the election
of the two nominees named below as Class B directors of the Company; (ii) FOR
the ratification of the appointment of Ernst & Young LLP as independent
accountants for the year ending December 31, 2002; and (iii) in the discretion
of the persons named in the enclosed form of proxy, on any other proposals
which may properly come before the Meeting or any adjournment or adjournments
thereof. Any stockholder who has submitted a proxy may revoke it at any time
before it is voted, by written notice addressed to and received by the
Secretary of the Company, by submitting a duly executed proxy bearing a later
date or by electing to vote in person at the Meeting. The mere presence at the
Meeting of the person appointing a proxy does not, however, revoke the
appointment.
Voting by Phone or via the Internet. If you are a stockholder of record
(that is, if your stock is registered with the Company in your own name), you
may vote by phone, or through the Internet, by
following the instructions included with your proxy card. If your shares are
registered in the name of a broker or other nominee, your nominee may be
participating in a program provided through ADP Investor Communication Services
that allows you to vote by phone or the Internet. If so, the voting form your
nominee sent you will provide phone and Internet voting instructions. The last
vote you submit chronologically (by any means) will supersede your prior
vote(s). Also, if you vote by phone or the Internet, and later decide to attend
the Meeting, you may cancel your previous vote and vote in person at the
Meeting.
The deadline for voting by phone or through the Internet as a stockholder
of record is 11:59 p.m., EDT, on May 14, 2002. For stockholders whose shares
are registered in the name of a broker or other nominee, please consult the
voting instruction provided by your broker for information about the deadline
for voting by phone or through the Internet.
Voting in Person. If you attend the Meeting, you may deliver your
completed proxy card in person or you may vote by completing a ballot, which
will be available at the Meeting.
Attendance at the Meeting will not, by itself, result in the revocation of
a previously submitted proxy. Even if you are planning to attend the Meeting,
we encourage you to submit your proxy in advance to ensure the representation
of your shares at the Meeting.
The presence, in person or by proxy, of holders of the shares of Common
Stock having a majority of the votes entitled to be cast at the Meeting shall
constitute a quorum. The affirmative vote by the holders of a plurality of the
shares of Common Stock represented at the Meeting is required for the election
of directors, provided a quorum is present in person or by proxy. All actions
proposed herein other than the election of directors may be taken upon the
affirmative vote of stockholders possessing a majority of the shares of Common
Stock represented at the Meeting, provided a quorum is present in person or by
proxy.
Abstentions are included in the shares present at the Meeting for purposes
of determining whether a quorum is present, and are counted as a vote against
for purposes of determining whether a proposal is approved. Broker non-votes
(when shares are represented at the Meeting by a proxy specifically conferring
only limited authority to vote on certain matters and no authority to vote on
other matters) are included in the determination of the number of shares
represented at the Meeting for purposes of determining whether a quorum is
present but are not counted for purposes of determining whether a proposal has
been approved and thus have no effect on the outcome.
ELECTION OF DIRECTORS
At the Meeting, two Class B directors are to be elected to hold office
until the Annual Meeting of Stockholders to be held in 2005 and until their
successors shall have been elected and qualified.
We currently have seven directors. As set forth in our certificate of
incorporation, the terms of office of the members of the Board of Directors are
divided into three classes: Class A, whose term will expire at the 2004 Annual
Meeting of Stockholders; Class B, whose term will expire at the 2002 Annual
Meeting of Stockholders; and Class C, whose term will expire at the 2003 Annual
Meeting of Stockholders. The current Class A directors are Mark Kristoff and
Joseph Korb, the current Class B directors are Robi Blumenstein and Brian
Bailey and the current Class C directors are Aaron Dobrinsky, Adam Dell and
Alan Docter. At each annual meeting of stockholders, the successors to
directors whose terms then expire will be elected to serve from the time of
election and qualification until the third annual meeting following election.
Our by-laws permit the Board of Directors to increase or decrease the size of
the Board of Directors. Any additional directorships resulting from an increase
in the number of directors will be distributed among the three classes so that,
as nearly as possible, each class will consist of one-third of the total number
of directors. This classification of the Board of Directors may have the effect
of delaying or preventing changes in control or management of GoAmerica.
It is the intention of the persons named in the enclosed form of proxy to
vote the shares of Common Stock represented thereby, unless otherwise specified
in the proxy, for the election as Class B directors the nominees whose names
and biographies appear below. In the event any of the nominees should become
unavailable or unable to serve as a director, it is intended that votes will be
cast for a substitute nominee
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designated by the Board of Directors. The Board of Directors has no reason to
believe that the nominees named below will be unable to serve if elected. Each
of the nominees has consented to being named in this Proxy Statement and to
serve if elected.
The current nominees for election as Class B directors to the Board of
Directors are as follows:
Served as a Positions with
Name Age Director Since the Company
- -------------------------- ----- ---------------- -----------------
Robi Blumenstein ......... 45 1999 Class B Director
Brian Bailey ............. 35 2000 Class B Director
The principal occupations and business experience, for at least the past
five years, of each nominee is as follows:
Robi Blumenstein joined our Board of Directors in June 1999. Mr.
Blumenstein currently is a principal of MMC Capital, Inc. and co-head of the MMC
Capital Communications & Information Fund. From January 1994 to February 2000,
Mr. Blumenstein was a Managing Director of CIBC Capital Partners, the merchant
banking arm of CIBC World Markets. Mr. Blumenstein joined CIBC World Markets in
1994. Prior to joining CIBC Capital Partners, Mr. Blumenstein worked at First
City Capital Corporation and as an attorney at Torys. Mr. Blumenstein is a
member of the Board of Directors of a number of privately held companies.
Brian Bailey joined our Board of Directors in July 2000. Mr. Bailey is a
Managing Director for the Charlotte-based merchant banking firm Carousel
Capital Partners, L.P. Prior to joining Carousel Capital in April 2000, Mr.
Bailey was an Associate with Forstmann Little & Co. in New York from 1999 to
2000 and a Principal with the Carlyle Group in Washington, D.C. from 1996 to
1999. Mr. Bailey also serves on the Board of Directors of a privately held
industrial technology company.
Each elected Class B director will hold office until the 2005 Annual
Meeting of Stockholders and until his successor is duly elected and qualified.
None of the nominees are related to any other nominee, director or executive
officer of the Company.
The Board of Directors recommends that stockholders vote FOR each of the
nominees for the Board of Directors. Please note that proxies cannot be voted
for more than the two (2) Class B directors named above.
Board of Directors
We have seven members on our Board of Directors. The current composition
of our Board of Directors is as follows:
Served as a Positions with
Name Age Director Since the Company
- -------------------------- ----- ---------------- -------------------------------
Aaron Dobrinsky .......... 38 1996 Chairman of the Board, Chief
Executive Officer and Class C
Director
Joseph Korb .............. 50 1996 President and Class A Director
Mark Kristoff ............ 40 1998 Class A Director
Brian Bailey. ............ 35 2000 Class B Director
Robi Blumenstein ......... 45 1999 Class B Director
Adam Dell ................ 32 2000 Class C Director
Alan Docter .............. 58 1996 Class C Director
Aaron Dobrinsky founded GoAmerica in 1996 and has served as our Chairman
of the Board and Chief Executive Officer since our inception in 1996. He also
served as our President until November 2000. Prior to founding the Company,
from February 1996 to July 1996, Mr. Dobrinsky served as Executive Vice
President of Mineral Trading Corp. Prior to that, Mr. Dobrinsky served in an
executive capacity at a number of mining industry companies.
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Joseph Korb joined GoAmerica in 1997 as Executive Vice President and has
been a director since October 1996. In November 2000, Mr. Korb was elected as
President of the Company. Prior to joining us, Mr. Korb served in various
capacities, including Vice President of Product Management and Business
Development at RAM Mobile Data (now Cingular Interactive) from 1992 to 1996.
Prior to that, Mr. Korb served as Vice President at Citibank, N.A. where he
served as Director of Technology in an electronic products development group.
Mr. Korb currently serves as a board member and Vice President of the Portable
Computing and Communications Association, an industry trade association.
Mark Kristoff joined our Board of Directors in June 1998. Since 1991, Mr.
Kristoff has been President and Chief Operating Officer of Considar, Inc., an
international metals trading company. Since 1990, Mr. Kristoff also has been an
early-stage investor in many technology companies and serves on the Board of
Directors of a number of privately held companies.
Adam Dell joined our Board of Directors in February 2000. Mr. Dell is the
managing partner of Impact Venture Partners, L.P. (and other affiliated
entities), which was founded in November 1999. From October 1998 to November
1999, Mr. Dell was a partner with Crosspoint Venture Partners. Prior to that,
he was a Senior Associate with Enterprise Partners, focusing on ecommerce,
enterprise software and networking and communication infrastructure. Prior to
joining Enterprise Partners, Mr. Dell was a Senior Associate with Winstead,
Sechrest and Minick. He is also an adjunct professor at Columbia Business
School.
Alan Docter joined our Board of Directors in October 1996 at the time of
his initial investment in GoAmerica. Since 1990, Mr. Docter has been an
early-stage investor in technology companies, including M.A.I.D. plc (now
BrightStation), ViaWeb (sold to Yahoo!), Butterfly V.L.S.I. Ltd. (sold to Texas
Instruments) and Invino Corp. (sold to Youth Stream Media Networks). Mr. Docter
has served as President of Continental Mining and Metallurgical Corporation
since 1991 and as President of CMMC Ventures, Inc. since 1999. He has also
served as Vice Chairman of Considar, Inc., an international metals trading
company, since 1995. Mr. Docter serves on the Board of Directors of a number of
privately held companies.
For the biographical summaries of our Class B directors, Robi Blumenstein
and Brian Bailey, see the above list of nominees.
Each Class A director will hold office until the 2004 Annual Meeting of
Stockholders and until his successor is duly elected and qualified. Each Class
C director will hold office until the 2003 Annual Meeting of Stockholders and
until his successor is duly elected and qualified. None of the Company's
current directors are related to any other director or to any executive officer
of the Company.
Compensation of Directors
Generally, non-employee (or "independent") directors serving on our Board
of Directors will receive annual compensation of $20,000 either in cash or
securities equivalents. In addition, each independent director, upon initial
election to the Board of Directors, will receive options to purchase up to
64,000 shares of our Common Stock. Each director who was a stockholder of the
Company and who served on the Board of Directors as a representative of another
individual, entity or group of stockholders prior to the Company's initial
public offering received options to purchase up to 32,000 shares of our Common
Stock. In addition to such prior option grants, on January 17, 2002, Messrs.
Bailey, Blumenstein, Dell, Docter and Kristoff each received options to
purchase 120,000 shares at an exercise price of $1.89 per share, subject to
vesting. Such options were granted as compensation for serving on our Board of
Directors during fiscal 2000 and 2001. No cash or other compensation was paid
to directors for services rendered during such prior fiscal years. All future
option grants shall have an exercise price equal to the fair market value of
our Common Stock on the date of grant and generally shall vest at a rate of
one-third per year from the date of grant. Each director will be reimbursed by
us for his or her reasonable expenses incurred in connection with his or her
participation in our Board of Directors meetings.
Committees and Meetings of the Board
The Board of Directors held nine (9) meetings during 2001. During this
period, each incumbent member of the Board of Directors attended or
participated in at least 75% of the aggregate of (i) the total
4
number of meetings of the Board of Directors (held during the period for which
such person has been a director) and (ii) the total number of meetings held by
all Committees of the Board on which each such director served (during the
periods such director served). Furthermore, the Board of Directors often acted
by unanimous written consent during 2001. The Board of Directors has three
standing committees: the Audit Committee, the Compensation Committee and the
Nominating Committee.
Audit Committee. The Audit Committee was established in December 1999 and
is currently comprised of three (3) members. The Audit Committee's
responsibilities include: (i) evaluating and recommending to the Board of
Directors the engagement of the Company's independent auditors; (ii) reviewing
and reporting on the results and scope of their audit findings; (iii) reviewing
the Company's periodic reports filed with the Securities and Exchange
Commission; and (iv) monitoring, on a periodic basis, the internal controls of
the Company. The Audit Committee is currently comprised of Messrs. Blumenstein,
Kristoff and Docter. During 2001, this committee was comprised of Messrs.
Blumenstein, Kristoff and Prensky from January 1 to March 28, when Mr. Docter
was selected to fill the vacancy created by Mr. Prensky's resignation from the
Board of Directors. The Audit Committee held five (5) meetings during 2001.
The Audit Committee is governed by a written Audit Committee Charter (the
"Charter") first adopted and approved on May 2, 2000. The current members of
the Audit Committee are independent directors, as defined by the Charter and
Rule 4200(a)(15) of the National Association of Securities Dealers' listing
standards.
Compensation Committee. The Compensation Committee was established in
December 1999. The Compensation Committee approves salaries and incentive
compensation for our executive officers and key employees, administers and
grants awards under the Company's 1999 Stock Plan and administers the terms of
outstanding options. The Compensation Committee is currently comprised of
Messrs. Blumenstein, Docter and Bailey. During 2001, this committee was
comprised of Messrs. Blumenstein, Docter and Seybold from January 1 to March
28, when Mr. Bailey was selected to fill the vacancy created by Mr. Seybold's
resignation from the Board of Directors. The Compensation Committee held six
(6) meetings during 2001.
Nominating Committee. The Nominating Committee was established in July
2000. The Nominating Committee's responsibilities include recommending to the
Board of Directors qualified individuals to serve on the Company's Board of
Directors. The Nominating Committee will not consider any nominees recommended
by the Company's security holders. The Nominating Committee is currently
comprised of Messrs. Dobrinsky, Blumenstein, Docter and Kristoff and acted once
during 2001, concurrent with a meeting of the Board of Directors.
5
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
April 17, 2002
To the Board of Directors of GoAmerica, Inc.
Management is responsible for the Company's internal controls and the
financial reporting process. The Company's independent auditors are responsible
for performing an independent audit of the Company's financial statements in
accordance with generally accepted accounting principles and to issue a report
on those financial statements. The Audit Committee is responsible for
monitoring and overseeing these processes. The Audit Committee has relied,
without independent verification, on management's representation that the
financial statements have been prepared with integrity and objectivity and in
conformity with accounting principles generally accepted in the United States
of America and on the representations of Ernst & Young LLP, the Company's
independent auditors, included in their report on the Company's financial
statements. As appropriate, the Audit Committee reviews and evaluates, and
discusses with the Company's management and financial personnel and the
independent auditors, the following:
o the plan for, and the independent auditors' report on, each audit of the
Company's financial statements;
o the Company's financial disclosure documents, including all financial
statements and reports filed with the Securities and Exchange Commission
or sent to stockholders;
o changes in the Company's accounting practices, principles, controls or
methodologies;
o significant developments or changes in accounting rules applicable to
the Company; and
o the adequacy of the Company's internal controls and accounting and
financial personnel.
The Audit Committee reviewed the Company's audited financial statements
for the fiscal year ended 2001 and discussed these financial statements with
the Company's management. The Audit Committee also reviewed and discussed the
audited financial statements and the matters required by Statement on Auditing
Standards 61 (Communication with Audit Committees) with Ernst & Young LLP. SAS
61 requires the Company's independent auditors to discuss with the Company's
Audit Committee, among other things, the following:
o methods to account for significant unusual transactions;
o the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance or
consensus;
o the process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditors' conclusions
regarding the reasonableness of those estimates; and
o disagreements with management over the application of accounting
principles, the basis for management's accounting estimates and the
disclosures in the financial statements.
Ernst & Young LLP also provided the Audit Committee with the written
disclosures and the letter required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees). Independence Standards
Board Standard No. 1 requires auditors annually to disclose in writing all
relationships that, in the auditor's professional opinion, may reasonably be
thought to bear on independence, confirm their perceived independence and
engage in a discussion of independence. In addition, the Audit Committee
discussed with Ernst & Young LLP their independence from the Company. Ernst &
Young LLP did not disclose any relationships thought to bear on such
independence. The Audit Committee also considered whether the independent
auditors' provision of certain other, non-audit related services to the Company
is compatible with maintaining such auditors' independence and concluded that
it was compatible. The Audit Committee has been advised that the only non-audit
related services were tax related services.
6
Based on its discussions with management and its review of the
representations and information provided by management and Ernst & Young LLP,
the Audit Committee recommended to the Company's Board of Directors, and the
Board of Directors has approved, that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended 2001.
The Audit Committee and the Board of Directors have also recommended, subject
to stockholder ratification, the selection of the Company's independent
auditors.
By the Audit Committee of the Board of Directors of
GoAmerica, Inc.
Robi Blumenstein
Alan Docter
Mark Kristoff
7
EXECUTIVE OFFICERS
The following table identifies the current executive officers of the
Company:
In Current
Name Age Capacities in Which Served Position Since
- ------------------------------- ----- --------------------------------------------------- ---------------
Aaron Dobrinsky ............... 38 Chairman of the Board and Chief Executive Officer 1996
Joseph Korb ................... 50 President 2000
Francis J. Elenio (1) ......... 36 Chief Financial Officer, Treasurer and Secretary 1999
Jesse Odom (2) ................ 36 Chief Technology Officer 2000
- ----------
(1) Francis J. Elenio joined GoAmerica in January 1999 as Chief Financial
Officer and has also served as our Treasurer and Secretary since December
1999. Prior to joining us, Mr. Elenio served as Corporate Controller of
Bogen Communications, Inc. from June 1997 to January 1999. Prior to that,
Mr. Elenio served as Vice President of Finance and Administration and
Corporate Controller of KTI, Inc. from 1991 to 1997. He previously was a
Senior Accountant with Ernst & Young LLP and is a Certified Public
Accountant in New Jersey.
(2) Jesse Odom joined GoAmerica in 1996 as Vice President of Network
Operations. He was appointed Chief Technology Officer in November 2000.
Prior to joining GoAmerica, Mr. Odom served as Vice President of Network
Engineering at American International Ore Corporation from 1991 to 1996.
None of our executive officers is related to any other executive officer
or to any director of the Company. Our executive officers are elected annually
by the Board of Directors and serve until their successors are duly elected and
qualified.
Section 16(a) Beneficial Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, officers and stockholders
who beneficially own more than 10% of any class of equity securities of the
Company registered pursuant to Section 12 of the Exchange Act to file initial
reports of ownership and reports of changes in ownership with respect to the
Company's equity securities with the Securities and Exchange Commission (the
"SEC"). All reporting persons are required to furnish the Company with copies
of all reports that such reporting persons file with the SEC pursuant to
Section 16(a). Based solely on our review of the copies of such forms received
by us or written representations from such reporting persons, except as
described below, for transactions occurring during 2001, each such reporting
person has filed all of their respective reports pursuant to Section 16(a) on a
timely basis.
Aaron Dobrinsky, a director and the Company's Chief Executive Officer, did
not timely report Cindy Dobrinsky's, Mr. Dobrinsky's wife and an employee of
the Company, receipt of options to purchase an aggregate of up to 20,000 shares
of the Company's Common Stock pursuant to the 1999 GoAmerica Communications
Stock Option Plan (12,000 shares) and the Company's 1999 Stock Plan (8,000
shares) on August 3, 1999 and January 6, 2000, respectively. Mr. Dobrinsky
reported such transactions on an Amended Form 3 filed on May 4, 2001. On such
Amended Form 3, Mr. Dobrinsky expressly disclaimed beneficial ownership of the
options issued to his wife.
8
EXECUTIVE COMPENSATION
Summary of Compensation in 2001, 2000 and 1999
The following Summary Compensation Table sets forth information concerning
compensation for services in all capacities awarded to, earned by or paid to
each person who served as the Company's Chief Executive Officer at any time
during 2001, regardless of compensation level, and each other executive officer
of the Company whose aggregate cash compensation exceeded $100,000 at the end
of 2001 (collectively, the "Named Executives") for the years ended December 31,
2001, 2000 and 1999.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
------------------------------------------- -----------------
Other
Annual Securities
Year Salary Bonus(2) Compensation Underlying All Other
Name and Principal Position (a) (b) ($) (c) ($) (d) (7) ($) (e) Options (#) (g) Compensation ($) (i)
- --------------------------------- ------ --------- -------------- ------------------ ----------------- ---------------------
Aaron Dobrinsky ................. 2001 225,000 --(3) -- 236,037(3) 3,333(11)
Chairman of the Board and 2000 225,000 187,500 -- 160,000 4,244(11)
Chief Executive Officer 1999 150,000 50,000 -- 80,000 --
Joseph Korb ..................... 2001 225,000 78,679(4) -- -- 4,036(11)
President 2000 225,000 187,500 -- 160,000 8,388(11)
1999 150,000 50,000 -- 80,000 --
Francis J. Elenio ............... 2001 180,000 10,000(5) -- 120,000(5) --
Chief Financial Officer, 2000 150,000 125,000 247,706(8) 80,000 --
Treasurer and Secretary 1999 95,833 20,000 -- 240,000 --
Jesse Odom ...................... 2001 180,000 40,000(6) 190,625(9) 30,000 (6) 5,980(11)
Chief Technology Officer 2000 125,000 60,000 4,980,000(10) -- --
1999 100,000 25,000 -- 320,000 --
David Blumenthal ................ 2001 162,796 -- -- -- 180,000(12)
Former Chief Operating 2000 25,131 15,000 -- 50,000 --
Officer(1) 1999 -- -- -- -- --
Yair Alan Griver ................ 2001 170,903 -- -- -- --
Former Chief Operating 2000 25,131 15,000 -- 50,000 --
Officer(1) 1999 -- -- -- -- --
- ----------
(1) Mr. Blumenthal ceased employment as the Company's Chief Operating Officer
effective November 14, 2001. In connection with such cessation of
employment, we entered into a separation agreement with Mr. Blumenthal
more fully described herein under the heading "Employment Agreements,
Termination of Employment and Change-in-Control Arrangements." Mr. Griver
ceased employment as the Company's Chief Information Officer effective
December 4, 2001. Mr. Griver is not entitled to any severance payments in
connection with such cessation of employment.
(2) Except as otherwise indicated, the bonus awards were earned in the year
indicated and were paid in the following year.
(3) Mr. Dobrinsky's 2001 fiscal year bonus consisted of options to purchase
236,037 shares of Common Stock having an above-market exercise price of
$1.89 on the date of grant in 2002.
(4) Such bonus amount was paid during 2001.
(5) Mr. Elenio's 2001 fiscal year bonus consisted of $10,000 cash and options
to purchase 120,000 shares of Common Stock having a fair market value of
$1.89 per share on the date of grant in 2002.
(6) Mr. Odom's 2001 fiscal year bonus consisted of $40,000 cash and options
to purchase 30,000 shares of Common Stock having a fair market value of
$1.89 per share on the date of grant in 2002.
(7) The value of certain personal benefits is not included since the
aggregate amount of such compensation did not exceed the lesser of either
$50,000 or 10% of the total of annual salary and bonus reported for such
Named Executives in columns (c) and (d).
9
(8) Represents dollar value of the difference between the exercise price
($0.5625) of non-qualified stock options to purchase 27,500 shares of the
Company's Common Stock and the amount received by the executive upon the
sale of such shares on the public market ($9.57).
(9) Represents dollar value of the difference between the exercise price
($1.0625) of options to purchase 50,000 shares of the Company's Common
Stock and the fair market value ($4.88) of the Common Stock on the
exercise date.
(10) Represents dollar value of the difference between the exercise price
($0.4375) of warrants to purchase 320,000 shares of the Company's Common
Stock and the fair market value ($16.00) of the Common Stock on the
exercise date.
(11) Represents dollar value of automobile lease payments paid by or on behalf
of the Company for the benefit of the executive.
(12) Represents dollar amounts accrued for severance payments to be made to
Mr. Blumenthal in accordance with the terms of his separation agreement
with us, as more fully described herein under the heading "Employment
Agreements, Termination of Employment and Change in Control
Arrangements."
Option Grants in 2001
During 2001, the Company did not grant stock options to any of the Named
Executives. The Company granted options to purchase an aggregate of 1,095,310
shares of the Company's Common Stock to all employees in 2001.
On January 17, 2002, Mr. Elenio and Mr. Odom were granted options to
purchase 120,000 shares of the Company's Common Stock and 30,000 shares of the
Company's Common Stock, respectively, at an exercise price of $1.89 per share.
Such options were granted as a bonus payment for services rendered during 2001.
On April 12, 2002, Mr. Dobrinsky was granted options to purchase 236,037
shares of the Company's Common Stock at an exercise price of $1.89 per share.
Such options were granted as a bonus payment for services rendered during 2001.
Aggregated Option Exercises in 2001 and Year-End Option Values
The following table sets forth information concerning each exercise of
options during 2001 by each of the Named Executives and the year-end number and
value of unexercised options held by each of the Named Executives.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Fiscal Fiscal
Shares Year-End (#) Year-End ($)
Acquired on Value Exercisable/ Exercisable/
Exercise Realized Unexercisable Unexercisable
Name (a) (#) (b) ($) (c) (d) (e)(1)
- --------------------------- ------------- ---------- --------------- --------------
Aaron Dobrinsky ........... -- -- 240,000/-- 136,600/--
Joseph Korb ............... -- -- 240,000/-- 136,600/--
Francis J. Elenio ......... -- -- 292,500/-- 362,844/--
Jesse Odom ................ 50,000 190,625 270,000/-- 366,025/--
David Blumenthal .......... -- -- --/-- --/--
Yair Alan Griver .......... -- -- --/-- --/--
- ----------
(1) Based on a year end fair market value of the underlying securities equal
to $2.27per share, less the exercise price payable for such shares.
10
Employment Agreements, Termination of Employment and Change-in-Control
Arrangements
Mr. Dobrinsky is a party to an agreement with us effective December 31,
1999 under which he serves as our Chairman of the Board and Chief Executive
Officer and previously served as our President at an initial base salary of
$225,000, subject to annual adjustment. Mr. Korb is a party to an agreement
with us effective December 31, 1999 under which he originally served as our
Executive Vice President and currently serves as our President at an initial
base salary of $225,000, subject to annual adjustment. Mr. Elenio is a party to
an agreement with us effective December 31, 1999 under which he serves as our
Chief Financial Officer, Treasurer and Secretary at an initial base salary of
$150,000, subject to annual adjustment. On January 13, 2002, the Compensation
Committee approved an increase in Mr. Elenio's base salary to $185,400. Mr.
Odom is a party to an agreement with us effective December 31, 1999 under which
he initially served as our Vice President of Network Operations and Technology
and now serves as our Chief Technology Officer at an initial base salary of
$125,000, subject to annual adjustment, with a minimum bonus of $25,000. On
January 13, 2002, the Compensation Committee approved an increase in Mr. Odom's
base salary to $185,400. The Compensation Committee may award any or all of the
above individuals additional bonus payments or option grants in its discretion.
The initial term of each such agreement is for three years and renews
annually for one year periods thereafter. In the event Mr. Dobrinsky, Mr. Korb,
or Mr. Elenio is terminated without cause, resigns for good reason or, in the
case of each of Mr. Dobrinsky and Mr. Korb, is not reelected to our Board of
Directors, he shall be entitled to severance in an amount to include all
payments that otherwise would have been paid to him through the end of the then
current term of the agreement. In no event, however, shall such severance
amount be less than such employee's then current one year annual base salary,
or if such termination occurs after the third anniversary of the effective date
of such employee's agreement, such amount shall be no less than such employee's
then current annual salary plus one-twelfth of such annual salary for each year
of employment commenced beyond such anniversary date. If Mr. Odom is terminated
without cause or resigns for good reason, he shall be entitled to salary and
benefits for a period of six months from the date of such termination or
resignation. In the event any of the foregoing employees dies or is terminated
for disability, he or his representative shall be entitled to continued
payments of base salary for a period of one year plus, in the case of
termination for disability, certain other benefits. Each of Mr. Dobrinsky and
Mr. Korb will also receive up to $800 per month in automobile allowances and
will be reimbursed for additional automobile expenses incurred in connection
with their duties. In addition, each of Mr. Dobrinsky and Mr. Korb is eligible
to be a beneficiary of a term life insurance policy in his respective name, in
the face amount of up to $1.0 million, for which we pay the premiums. Each
employment agreement also contains certain non-competition, non-solicitation,
invention assignment and confidentiality provisions and also requires that we
maintain standard directors and officers insurance of no less than $10.0
million. The Company is currently in the process of renegotiating the terms of
the above employment agreements.
We require all employees to sign an agreement pursuant to which they agree
to maintain the confidentiality of our proprietary information, to assign any
inventions to us, and to agree not to solicit our customers, suppliers or
employees away from us.
Mr. Blumenthal was a party to an agreement with us effective November 21,
2000 pursuant to which he served as our Chief Operating Officer at an initial
base salary of $175,000, subject to annual adjustment. On January 2, 2001, our
Board of Directors approved an increase in Mr. Blumenthal's base salary to
$180,000. In connection with the cessation of Mr. Blumenthal's employment with
us, effective November 14, 2001, we entered into a separation agreement with
Mr. Blumenthal, dated December 27, 2001, pursuant to which Mr. Blumenthal shall
continue to receive his current base salary of $180,000 for a period of twelve
months from November 14, 2001, along with health and other group benefits (or
payments in lieu thereof, as applicable) in exchange for certain covenants from
Mr. Blumenthal, including, but not limited to, his release of GoAmerica from
any and all claims, charges or other liabilities.
Mr. Griver was a party to an agreement with us effective November 21, 2000
pursuant to which he served as our Chief Information Officer at an initial base
salary of $175,000, subject to annual adjustment.
11
On January 2, 2001, our Board of Directors approved an increase in Mr. Griver's
base salary to $180,000. Mr. Griver's employment with the Company ceased on
December 4, 2001. We did not enter into any separation agreement with Mr.
Griver upon his cessation of employment.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee currently consists of Messrs. Blumenstein,
Docter and Bailey. During 2001, the Committee consisted of Messrs. Blumenstein,
Docter and Seybold from January 1 to March 28, when Mr. Bailey was selected to
fill the vacancy created by Mr. Seybold's resignation. None of these
individuals are or were at any time officers or employees of the Company. No
executive officer of the Company has served as a director or member of the
Compensation Committee (or other committee serving an equivalent purpose) of
any other entity, one of whose executive officers served as a director or
member of the Compensation Committee of the Company.
On January 17, 2002, each of Messrs. Blumenstein, Bailey and Docter was
granted options to purchase 120,000 shares of our Common Stock at an exercise
price of $1.89 per share. One-third of such options are immediately
exercisable. The remaining two-thirds will vest at a rate of one-fourth per
year on the first, second, third and fourth anniversaries from the date of
grant.
During 2001, GoAmerica paid $260,000 to Mercer Management Consulting, an
entity with whom Mr. Blumenstein is affiliated, for consulting services
rendered. Mercer Management Consulting was engaged to provide analytic industry
reports, profile economic implications and provide educational workshops, in
connection with the development and implementation of GoAmerica's strategic
initiatives. No further services are being rendered at present.
12
Performance Graph
The following line graph compares the cumulative total stockholder return
on the Company's Common Stock with the cumulative total return on the Nasdaq
Composite Index and a Peer Group Index (capitalization weighted) for the period
beginning on the date on which the SEC declared effective the Company's Form
8-A Registration Statement pursuant to Section 12 of the Exchange Act and
ending on the last day of the Company's last completed fiscal year. The stock
performance shown on the graph below is not indicative of future price
performance.
COMPARISON OF CUMULATIVE TOTAL RETURN(1)(2)
Among the Company, the Nasdaq Composite Index
and a Peer Group Index(3)
(Capitalization Weighted)
[GRAPHIC OMITTED]
Base
Period
April June September December March June September December
2000 2000 2000 2000 2001 2001 2001 2001
------- ------------ ----------- ------------ ------------ ------------ ----------- ------------
GoAmerica, Inc. ................. $100 $ 96.484 $ 55.273 $ 33.594 $ 12.695 $ 13.250 $ 5.813 $ 14.188
Nasdaq Composite Index .......... $100 $ 89.197 $ 82.601 $ 55.562 $ 41.387 $ 48.606 $ 33.708 $ 43.864
Peer Group Index (Capitalization
Weighted) ...................... $100 $ 75.308 $ 54.683 $ 38.995 $ 37.712 $ 36.643 $ 34.913 $ 33.546
- ----------
(1) Graph assumes $100.00 invested on April 7, 2000 in the Company's Common
Stock, the Nasdaq Composite Index and the Peer Group Index.
(2) Cumulative total return assumes reinvestment of dividends.
(3) The Company has constructed a Peer Group Index consisting of other
wireless service providers including Aether Systems, Inc., AvantGo Inc.,
Sprint Corp., AT&T Wireless Services Inc. and Research in Motion Limited.
The entities which comprise the 2001 Peer Group Index differ from those
used in our Proxy Statement for last year. Such differences result from
the omission of certain entities because they are no longer in our line
of business or industry. Specifically,724 Solutions, Inc., GeoWorks
Corporation, InfoSpace.com, Inc., MDSI Mobile Data Solutions Inc.,
Metricom, Inc., Motient Corporation and OmniSky Corporation have been
omitted and replaced with AvantGo Inc., Sprint Corp. and AT&T Wireless
Services Inc. The Company believes that the entities utilized in the 2001
Peer Group Index most closely resemble the Company's business mix and
that their performance is representative of the industry.
13
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee has furnished the following report:
The Company's executive compensation policy is designed to attract and
retain highly qualified individuals for its executive positions and to provide
incentives for such executives to achieve maximum performance by aligning the
executives' interest with that of stockholders by basing a portion of
compensation on corporate performance.
The Compensation Committee reviews and determines base salary levels for
executive officers of the Company on an annual basis and determines actual
bonuses after the end of the fiscal year based upon Company and individual
performance. Additionally, the Compensation Committee makes grants under and
administers all of the Company's stock option and stock purchase plans.
The Company's executive officer compensation program is comprised of base
salary, discretionary annual cash bonuses, stock options and various other
benefits, including medical insurance and a 401(k) Plan, which are generally
available to all employees of the Company.
Salaries are established in accordance with industry standards through
review of publicly available information concerning the compensation of
officers of comparable companies. Consideration is also given to relative
responsibility, seniority, individual experience and performance. Salary
increases are generally made based on increases in the industry for similar
companies with similar performance profiles and/or attainment of certain
division or Company goals.
Bonuses are paid on an annual basis and are discretionary. The amount of
bonus is based on criteria designed to effectively measure a particular
executive's attainment of goals which relate to his or her duties and
responsibilities as well as overall Company performance. In general, the annual
incentive bonus is based on operational and financial results of the Company
and the executive's individual performance in achieving the results. With
respect to bonuses awarded to executive officers for services rendered during
2001, it was determined that it would be prudent if such bonuses were not paid
in cash or were paid in minimal cash portions. Therefore, most bonuses awarded
to executive officers for 2001 were in the form of stock option grants.
The stock option program is designed to relate executives' and certain
middle managers' and other key personnel's long-term interests to stockholders'
long-term interests and therefore are typically granted upon commencement of
employment. In general, stock option awards are granted if warranted by the
Company's growth and profitability. Stock options are awarded on the basis of
individual performance and/or the achievement of internal strategic objectives.
In establishing the total annual compensation for the Company's Chief
Executive Officer, Aaron Dobrinsky, we have examined the size, complexity and
historical performance of the Company's business, the Company's position as
compared to its peers in the industry, and the specific challenges faced by the
Company during the year, such as changes in the market for wireless products
and services and other industry factors. The Compensation Committee
recommended, and the Board of Directors confirmed, a bonus to Mr. Dobrinsky of
options to purchase 236,037 shares of the Company's Common Stock at an exercise
price of $1.89 per share for 2001, based on the Company's achievements in 2001,
including a substantial increase in the Company's subscriber base.
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
disallows a tax deduction to public companies for certain compensation in
excess of $1 million paid to the Chief Executive Officer and four other most
highly compensated executive officers. Certain compensation, including
qualified performance-based compensation, will not be subject to the
14
deduction limit if certain requirements are met. The Compensation Committee
reviews the potential effect of Section 162(m) periodically and uses its
judgment to authorize compensation payments that may be subject to the deduction
limit when the Compensation Committee believes such payments are appropriate and
in the best interests of the Company's stockholders, after taking into
consideration changing business conditions and the performance of employees.
COMPENSATION COMMITTEE MEMBERS
Robi Blumenstein
Brian Bailey
Alan Docter
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Common Stock
The following table sets forth certain information, as of March 22, 2002,
with respect to holdings of the Company's Common Stock by (i) each person known
by the Company to beneficially own more than 5% of the total number of shares
of Common Stock outstanding as of such date, based on currently available
Schedules 13D and 13G filed with the SEC, (ii) each of the Company's directors
(which includes all nominees) and Named Executives, and (iii) all directors and
officers as a group. Unless otherwise indicated, the address for the
individuals below is that of the Company: GoAmerica, Inc., 433 Hackensack
Avenue, Hackensack, New Jersey 07601.
Amount and Nature of Percent
Name and Address of Beneficial Owner Beneficial Ownership (1) of Class (2)
- --------------------------------------------------- -------------------------- -------------
(i) Certain Beneficial Owners:
Aaron Dobrinsky ................................... 7,808,648 (3) 14.5%
Joseph Korb ....................................... 3,237,376 (4) 6.0%
Canadian Imperial Bank of Commerce (CIBC) ......... 3,166,132 5.9%
425 Lexington Avenue
New York, NY 10017
(ii) Directors (which includes all nominees) and
Named Executives who are not set forth above:
Brian D. Bailey ................................... 1,346,779 (5) 2.5%
Robi Blumenstein .................................. 76,501 (6) *
David Blumenthal .................................. -- (7) *
Adam Dell ......................................... 659,542 (8) 1.2%
Alan Docter ....................................... 2,265,206 (9) 4.2%
Francis J. Elenio ................................. 333,000 (10) *
Yair Alan Griver .................................. 26,579 (11) *
Mark Kristoff ..................................... 551,618 (12) 1.0%
Jesse Odom ........................................ 290,000 (13) *
(iii) All directors and officers as a
group (9 persons) .............................. 16,586,670 29.9%
- ----------
* Less than one percent.
(1) Except as set forth in the footnotes to this table and subject to
applicable community property law, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock shown as beneficially owned by such stockholder.
(2) Applicable percentage of ownership is based on an aggregate of 53,740,587
shares of Common Stock outstanding on March 22, 2002, plus any then
exercisable stock options held by each such holder, and options and
warrants which will become exercisable by such holder within 60 days
after March 22, 2002.
15
(3) Includes 240,000 shares of Common Stock underlying options which are
immediately exercisable. Also includes 400 shares held for the benefit of
Mr. Dobrinsky's minor children. Mr. Dobrinsky has voting and dispositive
power with respect to such shares. Also includes 15,000 shares of Common
Stock underlying options held by Cindy Dobrinsky, Mr. Dobrinsky's wife
and an employee of the Company, which are exercisable as of March 22, 2002
or 60 days after such date. Excludes 10,000 shares of Common Stock
underlying options held by Cindy Dobrinsky which become exercisable over
time after such period. Mr. Dobrinsky expressly disclaims beneficial
ownership of all shares subject to options held by Cindy Dobrinsky.
(4) Includes 240,000 shares of Common Stock underlying options which are
immediately exercisable. Also includes 1,234,076 shares held by Korb
Business Holdings, L.P. Mr. Korb has voting and dispositive power with
respect to the shares held by Korb Business Holdings, L.P.
(5) Includes 50,667 shares of Common Stock underlying options which are
immediately exercisable. Excludes 101,333 shares of Common Stock
underlying options which become exercisable after March 22, 2002 or 60
days after such date. Includes 1,296,112 shares of Common Stock owned by
Carousel Capital Partners, L.P., of which Mr. Bailey serves as a managing
partner. Mr. Bailey expressly disclaims beneficial ownership of such
shares except as to his proportionate interest in the limited
partnership, if any.
(6) Includes 72,001 shares of Common Stock underlying options which are
exercisable as of March 22, 2002 or 60 days after such date. Excludes
111,999 shares of Common Stock underlying options which become
exercisable over time after such period.
(7) Mr. Blumenthal ceased employment as the Company's Chief Operating Officer
effective November 14, 2001. In accordance with the Company's 1999 Stock
Plan, all vested options that were not exercised within 90 days therefrom
terminated.
(8) Includes 61,334 shares of Common Stock underlying options which are
exercisable as of March 22, 2002 or 60 days after such date. Excludes
90,666 shares of Common Stock underlying options which become exercisable
over time after such period. Also includes 556,991 shares of Common Stock
owned by Impact Venture Partners, L.P. and 41,217 shares of Common Stock
owned by Impact Entrepreneurs Fund, L.P. both of which Mr. Dell serves as
a managing partner. Mr. Dell expressly disclaims beneficial ownership of
such shares except with respect to his proportionate interest in the
limited partnerships.
(9) Includes 61,334 shares of Common Stock underlying options which are
exercisable as of March 22, 2002 or 60 days after such date. Excludes
90,666 shares of Common Stock underlying options which become exercisable
over time after such period. Also includes 329,136 shares of Common Stock
underlying warrants which are immediately exercisable.
(10) Includes 332,500 shares of Common Stock underlying options which are
immediately exercisable. Also includes an aggregate of 500 shares of
Common Stock held by Mr. Elenio's minor children. Mr. Elenio has voting
and dispositive power over the shares held by his minor children.
(11) Mr. Griver ceased employment as the Company's Chief Information Officer
effective December 4, 2001. In accordance with the Company's 1999 Stock
Plan, all vested options that were not exercised within 90 days therefrom
terminated.
(12) Includes 61,334 shares of Common Stock underlying options which are
exercisable as of March 22, 2002 or 60 days after such date. Excludes
90,666 shares of Common Stock underlying options which become exercisable
over time after such date. Also includes 71,924 shares of Common Stock
underlying warrants which are immediately exercisable.
(13) Includes 280,000 shares of Common Stock underlying options which are
immediately exercisable. Excludes 20,000 shares of Common Stock
underlying options which become exercisable after March 22, 2002 or 60
days after such date.
16
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions involving each of Robi Blumenstein, Alan Docter, Andrew
Seybold and Brian Bailey, if any, are included under the heading "Compensation
Committee Interlocks and Insider Participation". Those transactions occurred
while each such individual was serving on our Board of Directors.
Aaron Dobrinksy, our Chief Executive Officer and a director, was granted
options to purchase 236,037 shares of our Common Stock at an exercise price of
$1.89 per share on April 12, 2002. 78,679 of such options are immediately
exercisable. The remaining 157,358 options vest at a rate of one-fourth per
year on each of the first, second, third and fourth anniversaries of the
vesting date January 17, 2002.
Frank Elenio, our Chief Financial Officer, Treasurer and Secretary, was
granted options to purchase 120,000 shares of our Common Stock at an exercise
price of $1.89 per share on January 17, 2002. 40,000 of such options are
immediately exercisable. The remaining 80,000 options vest at a rate of
one-fourth per year on each of the first, second, third and fourth
anniversaries of the date of grant.
Jesse Odom, our Chief Technology Officer, was granted options to purchase
30,000 shares of Common Stock at an exercise price of $1.89 per share on
January 17, 2002. 10,000 of such options are immediately exercisable. The
remaining 20,000 options vest at a rate of one-fourth per year on each of the
first, second, third and fourth anniversaries of the date of grant.
Adam Dell, a director, was granted options to purchase 120,000 shares of
Common Stock at an exercise price of $1.89 per share on January 17, 2002.
40,000 of such options are immediately exercisable. The remaining 80,000
options vest at a rate of one-fourth per year on each of the first, second,
third and fourth anniversaries of the date of grant.
Mark Kristoff, a director, was granted options to purchase 120,000 shares
of Common Stock at an exercise price of $1.89 per share on January 17, 2002.
40,000 of such options are immediately exercisable. The remaining 80,000
options vest at a rate of one-fourth per year on each of the first, second,
third and fourth anniversaries of the date of grant.
Upon his resignation from the Board of Directors, the Company agreed to
accelerate the vesting of Zachary Prensky's then unvested options so that he
would be vested as to all 32,000 shares underlying such options. Mr. Prensky
exercised all of such options on June 12, 2001.
David Blumenthal, our former Chief Operating Officer, ceased employment
with us effective November 14, 2001. We entered into a separation agreement
with Mr. Blumenthal, the details of which are included under the heading
"Employment Agreements, Termination of Employment and Change-in-Control
Arrangements" herein.
In connection with our acquisition of substantially all of the assets of
Flash Creative Management, Inc. and in accordance with the provisions of the
related Asset Purchase Agreement, dated October 31, 2001, we made a $2,000,000
deferred cash payment to Flash during 2001, as partial consideration for such
asset purchase. Mr. Blumenthal and Mr. Griver are the majority shareholders of
Flash.
17
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has, subject to stockholder
ratification, retained Ernst & Young LLP as independent accountants of the
Company for the year ending December 31, 2002. Ernst & Young LLP also served as
independent accountants of the Company for 2001. Neither the accounting firm
nor any of its members has any direct or indirect financial interest in or any
connection with the Company in any capacity other than as accountants.
Audit Fees
Ernst & Young LLP billed the Company an aggregate of $241,000 in fees for
professional services rendered in connection with the audit of the Company's
financial statements for the most recent fiscal year and the reviews of the
financial statements included in each of the Company's Quarterly Reports on
Form 10-Q during the fiscal year ended 2001.
Financial Information Systems Design and Implementation Fees
Ernst & Young LLP did not bill the Company for any professional services
rendered to the Company and its affiliates for the fiscal year ended 2001 in
connection with financial information systems design or implementation, the
operation of the Company's information system or the management of its local
area network.
All Other Fees
Ernst & Young LLP billed the Company fees for other services of $113,200,
including audit related services of $73,500 and non-audit services of $39,700.
Audit related services generally include fees for proposed business
acquisitions, accounting consultations and SEC filings. Non-audit fees
generally include fees for various tax related services.
The Board of Directors recommends a vote FOR the ratification of the
appointment of Ernst & Young LLP as the independent accountants of the Company
for the year ending December 31, 2002.
One or more representatives of Ernst & Young LLP is expected to attend the
Meeting and to have an opportunity to make a statement and/or respond to
appropriate questions from stockholders.
STOCKHOLDERS' PROPOSALS
Stockholders who intend to have a proposal considered for inclusion in the
Company's proxy materials for presentation at the Company's 2003 Annual Meeting
of Stockholders pursuant to Rule 14a-8 under the Exchange Act must submit the
proposal to the Company at its offices at 433 Hackensack Avenue, Hackensack,
New Jersey 07601, not later than December 18, 2002.
Stockholders who intend to present a proposal at such meeting without
inclusion of such proposal in the Company's proxy materials pursuant to Rule
14a--8 under the Exchange Act are required to provide advanced notice of such
proposal to the Company at the aforementioned address not later than March 2,
2003.
If the Company does not receive notice of a stockholder proposal within
this timeframe, the Company's management will use its discretionary authority
to vote the shares it represents as the Board of the Company may recommend.
The Company reserves the right to reject, rule out of order, or take other
appropriate action with respect to any proposal that does not comply with these
or other applicable requirements.
OTHER MATTERS
The Board of Directors is not aware of any matter to be presented for
action at the Meeting other than the matters referred to above and does not
intend to bring any other matters before the Meeting. However, if other matters
should come before the Meeting, it is intended that holders of the proxies will
vote thereon in their discretion.
18
GENERAL
The accompanying proxy is solicited by and on behalf of the Board of
Directors of the Company, whose notice of meeting is attached to this Proxy
Statement, and the entire cost of such solicitation will be borne by the
Company.
In addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by directors, officers and other employees of
the Company who will not be specially compensated for these services. The
Company will also request that brokers, nominees, custodians and other
fiduciaries forward soliciting materials to the beneficial owners of shares
held of record by such brokers, nominees, custodians and other fiduciaries. The
Company will reimburse such persons for their reasonable expenses in connection
therewith.
Certain information contained in this Proxy Statement relating to the
occupations and security holdings of directors and officers of the Company is
based upon information received from the individual directors and officers.
GOAMERICA, INC. WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT
ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2001, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES THERETO BUT NOT INCLUDING EXHIBITS, TO EACH OF ITS
STOCKHOLDERS OF RECORD ON MARCH 22, 2002, AND TO EACH BENEFICIAL STOCKHOLDER ON
THAT DATE UPON WRITTEN REQUEST MADE TO BRETT FELDMAN, DIRECTOR OF INVESTOR
RELATIONS, GOAMERICA, INC., 433 HACKENSACK AVENUE, HACKENSACK, NEW JERSEY
07601. A REASONABLE FEE WILL BE CHARGED FOR COPIES OF REQUESTED EXHIBITS.
19
HOUSEHOLDING OF ANNUAL MEETING MATERIALS
Some banks, brokers and other nominee record holders may be participating
in the practice of "householding" proxy statements and annual reports. This
means that only one copy of our proxy statement or annual report may have been
sent to multiple stockholders in your household. We will promptly deliver a
separate copy of either document to you if you write us at 433 Hackensack
Avenue, Hackensack, New Jersey 07601, or call us at (201) 996-1717. If you want
to receive separate copies of the annual report and proxy statement in the
future, or if you are receiving multiple copies and would like to receive only
one copy for your household, you should contact your bank, broker, or other
nominee record holder, or you may contact us at the above address and phone
number.
By Order of the Board of Directors
/s/ Francis J. Elenio
Francis J. Elenio
Secretary
Hackensack, New Jersey
April 17, 2002
20
APPENDIX A
GOAMERICA, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby constitutes and appoints Aaron Dobrinsky and
Francis J. Elenio, and each of them, his or her true and lawful agent and proxy,
with full power of substitution in each, to represent and to vote on behalf of
the undersigned, all of the shares of GoAmerica, Inc. (the "Company"), which the
undersigned is entitled to vote at the Annual Meeting of Stockholders of the
Company to be held at the GoAmerica Wireless Internet Connectivity Center
located at 55 Broad Street, New York, New York, 10004 at 10:00 A.M., local time,
on Wednesday, May 15, 2002, and at any adjournment or adjournments thereof, upon
the following proposals more fully described in the Notice of Annual Meeting of
Stockholders and Proxy Statement for the Meeting (receipt of which is hereby
acknowledged).
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is made, this
proxy will be voted FOR proposals 1 and 2.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
GOAMERICA, INC.
433 HACKENSACK AVENUE
HACKENSACK, NJ 07601
VOTE BY INTERNET - WWW.PROXYVOTE.COM
-----------------
Use the internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before the
cut-off date or meeting date. Have your proxy card in hand when you access the
web site. You will be prompted to enter your 12-digit Control Number which is
located below to obtain your records and to create an electronic voting
instruction form.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59
P.M. Eastern Time the day before the cut-off date or meeting date. Have your
proxy card in hand when you call. You will be prompted to enter your 12-digit
Control Number which is located below and then follow the simple instructions
the Vote Voice provides you.
VOTE BY MAIL
Mark, sign, and date your proxy card and return it in the postage-paid envelope
we have provided or return it to GoAmerica, Inc., c/o ADP, 51 Mercedes
Way, Edgewood, NY 11717.
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of stockholders
GOAMERICA, INC.
May 15, 2002
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
GOAMR1 KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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GOAMERICA, INC.
1. ELECTION OF CLASS B DIRECTORS: For Withhold For All To withhold authority to vote, mark "For All Except"
All All Except and write the nominee's number on the line below.
Nominees: 01) Brian Bailey
02) Robi Blumenstein [ ] [ ] [ ] ----------------------------------------------------
Vote On Proposal
For Against Abstain
2. APPROVAL OF PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT [ ] [ ] [ ]
ACCOUNTANTS OF THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 2002.
3. In his or her discretion, the proxy is authorized to vote upon other matters as may
properly come before the Meeting.
If you plan to attend the Annual Meeting,
please check the box to the right. [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
PROMPTY, USING THE ENCLOSED ENVELOP.
Signature (PLEASE SIGN WITHIN BOX) Date Signature (Joint Owners) Date
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