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 (as permitted by Rule 14a-
6(e)(2))
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material under Rule 14a-12
AIRSPAN NETWORKS INC.
(Name of Registrant as specified in its Charter)
AIRSPAN NETWORKS INC.
(Name of Person(s) Filing Proxy Statement)
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:
------------
(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:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[AIRSPAN LOGO]
April 13, 2001
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Airspan Networks Inc. that will be held at our headquarters, 13450 West Sunrise
Boulevard, Suite 430, Sunrise, FL 33323, on May 15, 2001, at 1:00 p.m. I look
forward to greeting as many of our shareholders as possible.
Details of the business to be conducted at the annual meeting are given in
the attached Notice of Annual Meeting and Proxy Statement.
Whether or not you attend the annual meeting it is important that your shares
be represented and voted at the meeting. Therefore, I urge you to sign, date,
and promptly return the enclosed proxy in the enclosed postage-paid envelope.
If you decide to attend the annual meeting, you will of course be able to vote
in person, even if you have previously submitted your proxy.
On behalf of the Board of Directors, I would like to express our appreciation
for your continued interest in the affairs of the Company.
Sincerely,
/s/ Eric Stonestrom
Eric Stonestrom
President and Chief Executive
Officer
AIRSPAN NETWORKS INC.
----------------
NOTICE OF ANNUAL MEETING
to be held on May 15, 2001
----------------
To the Shareholders:
The annual meeting of the shareholders of Airspan Networks Inc. will be held
at the Airspan Networks Inc. headquarters, 13450 West Sunrise Boulevard, Suite
430, Sunrise, FL 33323, on May 15, 2001, at 1:00 p.m. for the following
purposes:
1. To elect directors.
2. To approve an amendment to the 1998 Stock Option Plan.
3. To transact such other business as may properly come before the meeting.
Only shareholders of record at the close of business on March 23, 2001, are
entitled to notice of, and to vote at, this meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ C. Kent Carlson
C. Kent Carlson
Secretary
IMPORTANT
Whether or not you expect to attend in person, we urge you to sign, date,
and return the enclosed Proxy at your earliest convenience. This will
ensure the presence of a quorum at the meeting. Promptly signing, dating,
and returning the Proxy will save the Company the expenses and extra work
of additional solicitation. An addressed envelope for which no postage is
required if mailed in the United States is enclosed for that purpose.
Sending in your Proxy will not prevent you from voting your stock at the
meeting if you desire to do so, as your Proxy is revocable at your option.
AIRSPAN NETWORKS INC.
13450 West Sunrise Blvd. Suite 430
Sunrise, Florida 33323
----------------
PROXY STATEMENT FOR ANNUAL MEETING
OF SHAREHOLDERS
To Be Held May 15, 2001
----------------
GENERAL INFORMATION ABOUT VOTING
Who can vote?
You can vote your shares of common stock if our records show that you owned
the shares on March 23, 2001. A total of 34,775,696 shares of common stock can
vote at the annual meeting. You get one vote for each share of common stock.
The enclosed proxy card shows the number of shares you can vote.
How do I vote by proxy?
Follow the instructions on the enclosed proxy card to vote on each proposal
to be considered at the annual meeting. Sign and date the proxy card and mail
it back to us in the enclosed envelope. The proxyholders named on the proxy
card will vote your shares as you instruct. If you sign and return the proxy
card but do not vote on a proposal, the proxyholders will vote for you on that
proposal. Unless you instruct otherwise, the proxyholders will vote for each of
the seven director nominees and for each of the other proposals to be
considered at the meeting.
When was this proxy statement sent to shareholders?
This proxy statement was first mailed on April 19, 2001 to our shareholders
of record as of March 23, 2001, the record date for voting at the annual
meeting.
What if other matters come up at the annual meeting?
The matters described in this proxy statement are the only matters we know
will be voted on at the annual meeting. If other matters are properly presented
at the meeting, the proxyholders will vote your shares as they see fit.
Can I change my vote after I return my proxy card?
Yes. At any time before the vote on a proposal, you can change your vote
either by giving our secretary a written notice revoking your proxy card or by
signing, dating, and returning to us a new proxy card. We will honor the proxy
card with the latest date.
Can I vote in person at the annual meeting rather than by completing the proxy
card?
Although we encourage you to complete and return the proxy card to ensure
that your vote is counted, you can attend the annual meeting and vote your
shares in person.
What do I do if my shares are held in "street name"?
If your shares are held in the name of your broker, a bank, or other nominee,
that party should give you instructions for voting your shares.
1
How are votes counted?
We will hold the annual meeting if holders of a majority of the shares of
common stock entitled to vote either sign and return their proxy cards or
attend the meeting. If you sign and return your proxy card, your shares will be
counted to determine whether we have a quorum even if you abstain or fail to
vote on any of the proposals listed on the proxy card.
If your shares are held in the name of a nominee, and you do not tell the
nominee by May 8, 2001 how to vote your shares (so-called "broker nonvotes"),
the nominee can vote them as it sees fit only on matters that are determined to
be routine, and not on any other proposal. Broker nonvotes will be counted as
present to determine if a quorum exists but will not be counted as present and
entitled to vote on any nonroutine proposal.
Who pays for this proxy solicitation?
We do. In addition to sending you these materials, we may engage a proxy
solicitation firm to contact you directly by telephone, mail or in person. We
will bear such costs, if any, which are not expected to exceed $5,000.
ELECTION OF DIRECTORS
(Proposal #1)
Our Board of Directors currently consists of seven members. Seven directors
are to be elected at the annual meeting to hold office until the next annual
meeting of shareholders and until their successors are elected and qualified.
It is intended that the accompanying proxy will be voted in favor of the
following persons to serve as directors unless the shareholder indicates to the
contrary on the proxy. Under Washington law and our Articles of Incorporation,
the election of our Directors requires a plurality of the votes cast in person
or by proxy at the meeting. Management expects that each of the nominees will
be available for election, but if any of them is not a candidate at the time
the election occurs, it is intended that such proxy will be voted for the
election of another nominee to be designated by the Board of Directors to fill
any such vacancy.
Nominees
Matthew J. Desch became chairman of the board of directors on July 1, 2000.
From 1996 to May 1, 2000, he served as executive vice president of Nortel
Networks, a provider of high speed wireless voice, data, Internet and video
services, and president of Nortel's Wireless Networks division, responsible for
Nortel's global wireless infrastructure business. Mr. Desch joined Nortel
Networks in 1987 and served in a variety of management positions. Mr. Desch has
a B.S. from Ohio State University, and an M.B.A. from the University of
Chicago.
Eric D. Stonestrom joined Airspan at its inception in January 1998 as
executive vice president and chief operating officer. In May 1998, he was named
president and chief executive officer as well as a member of the board of
directors. From 1995 to 1998, Mr. Stonestrom joined DSC Communications
Corporation as the vice president of Network Management. From 1984 to 1995, Mr.
Stonestrom worked at Bell Laboratories and AT&T in a variety of positions. He
received B.S., M.S. and M. Eng. degrees in 1982, 1983 and 1984, respectively,
from the College of Engineering at the University of California at Berkeley.
H. Berry Cash has served as a director of Airspan since January 1998. He has
been a general partner with InterWest Partners, a venture capital fund focusing
on technology and healthcare, since 1985. Mr. Cash currently serves as a member
of the board of directors of the following public companies: Panja Corporation,
CIENA Corporation, i2 Technologies, Inc. and Liberte, Inc. He is also an
advisor to Austin Ventures. Mr. Cash received a B.S. in Electrical Engineering
from Texas A&M University and a M.B.A. from Western Michigan University.
2
Thomas S. Huseby served as the chairman of the board of directors of Airspan
from January 1998 until July 1, 2000. Mr. Huseby currently serves as a director
of Airspan. Since August 1997, Mr. Huseby has served as managing partner of
SeaPoint Ventures, a venture capital fund focused on communications and
Internet infrastructure. Prior to SeaPoint Ventures, from 1994 to 1997, Mr.
Huseby was the chairman and chief executive officer of Metawave Communications,
a manufacturer of cellular infrastructure equipment. Previously he was
president and chief executive officer of Innova Corporation, a manufacturer of
millimeter wave radios. Mr. Huseby holds a B.A. in Economics from Columbia
College, a B.S.I.E. from the Columbia School of Engineering and a M.B.A. from
Stanford University.
Ovid Santoro joined the board of directors of Airspan in November 1998. He
currently serves as the chief executive officer of SurfCast, Inc., a software
development company. From March 1998 until December 1999, Mr. Santoro was the
founder, managing director and global head of venture capital at Deutsche Bank
AG as well as the deputy chairman of Deutsche Bank AG's private equity
commitment committee. Prior to joining Deutsche Bank AG, from May 1993 to March
1998, Mr. Santoro was a strategic consultant to various technology companies.
Mr. Santoro holds a B.A. from Columbia University.
David A. Twyver joined the board of directors of Airspan in May 1999. Mr.
Twyver is currently president and chief executive officer of Ensemble
Communications Inc., a supplier of LMDS wireless equipment. From 1996 to 1997,
he served as chief executive officer of Teledesic Corporation, a satellite
telecommunications company. From 1974 to 1996, he served in several management
positions at Nortel, a leading global supplier of data and telephone network
solutions and services, most recently as president of Nortel Wireless Networks
from 1993 to 1996. Mr. Twyver is a director of Metawave Communications
Corporation. He received his B.S. in Mathematics and Physics from Royal Roads
Military College and University of Saskatchewan.
Guillermo Heredia joined the board of directors of Airspan in January 2001.
Since 1999, Mr. Heredia has served as the managing partner of Consultores en
Inversiones Aeronauticas, a provider of consulting services to airline
operators and investors. Mr. Heredia has served in the senior management of
three major Mexican corporations: as president and chief operating officer of
Aeromexico from 1989 to 1992 and Grupo Iusacell, Mexico's number two wireless
carrier, from 1992 to 1994, and as president and chief executive officer of
Previnter, a joint venture of AIG, Bank Boston and Bank of Nova Scotia from
1994 to 1997. Mr. Heredia currently serves as a member of the board of
directors for Nostrad Telecommunications, Inc., a media and telecommunications
company that is involved in developing, acquiring and managing media and
telecommunication networks in emerging markets. Mr. Heredia holds a degree in
Mechanical Engineering from the Universidad de las Americas, and in Business
Administration Universidad Iberoamericana.
Information Regarding the Board and its Committees
Our bylaws provide for a board of directors consisting of between five and
eight members. All directors hold office until the next annual meeting of our
shareholders and until their successors have been elected and qualified. Our
officers are appointed annually and serve at the discretion of the board of
directors.
We have an Audit Committee and a Compensation Committee. Our audit committee
consists of Messrs. Twyver, Santoro and Cash and reviews the results and scope
of the audits and other services provided by our independent accountants. All
of the members of the audit committee are independent directors.
Our compensation committee consists of Messrs. Huseby, Cash and Desch and
reviews and approves the compensation and benefits for our executive officers,
administers our stock purchase and stock option plans and make recommendations
to the board of directors regarding such matters.
The Audit Committee met once during 2000. The Compensation Committee met once
during 2000. The entire Board of Directors met in person two times and via
teleconference four times during 2000. All directors attended 75% or more of
the aggregate number of Board meetings and meetings of the committees on which
they served.
3
No interlocking relationship exists between our board of directors or
compensation committee and the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past.
Information Regarding Beneficial Ownership of Principal Shareholders,
Directors, and Management
The following table sets forth information regarding the beneficial ownership
of the Company's common shares by the nominees for directors, the Company's
Chief Executive Officer and the four other highest paid executive officers (the
"Named Executive Officers"), and the directors and executive officers as a
group.
Number of Shares Percent
Beneficial Owner Beneficially Owned(1) of Class
---------------- --------------------- --------
Oak Investment Partners(2)..................... 3,699,468 10.6%
Sevin Rosen Funds(3)........................... 2,980,413 8.6
InterWest Partners(4).......................... 2,892,394 8.3
Venrock Associates(5).......................... 2,169,142 6.2
Meritech Capital Partners L.P.(6).............. 1,863,061 5.4
Eric D. Stonestrom(7)(8)....................... 526,589 1.5
Matthew Desch(7)(17)........................... 288,000 *
Peter Aronstam(7).............................. 0 *
Ian Cooper(9)(10).............................. 69,201 *
Jonathan Paget(9)(11).......................... 17,667 *
Guillermo Heredia(12).......................... 0 *
H. Berry Cash(13).............................. 2,990,580 *
Thomas S. Huseby(14)........................... 641,813 *
Ovid Santoro(15)............................... 22,500 *
David A. Twyver(16)............................ 33,750 *
Henrik Smith-Petersen(9)(18)................... 63,958 *
Joseph Caffarelli.............................. 10,000 *
Nigel Terry.................................... 25,000 *
All directors and executive officers as a group
(10 persons).................................. 4,654,058 13.2
- --------
* Less than one percent
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. Applicable percentage ownership is
based on 34,775,696 shares of common stock outstanding as of March 23,
2001, together with options for that shareholder that are currently
exercisable or exercisable within 60 days of March 23, 2001. In computing
the number and percentage of shares beneficially owned by a person,
shares of common stock subject to options currently exercisable, or
exercisable within 60 days of March 23, 2001 are counted as outstanding,
while these shares are not counted as outstanding for computing the
percentage ownership of any other person.
(2) The address of Oak Investment Partners is 525 University Avenue, Suite
1300, Palo Alto, CA 94301. Includes purchases made by Oak Investment
Partners VII, L.P. and Oak VII Affiliates Fund, L.P., each of which is an
affiliate of Oak IW Partners.
(3) The address of Sevin Rosen Funds is 13455 Noel Road, Suite 1670, Dallas,
Texas 75240. Includes purchases made by Sevin Rosen Bayless Management
Company, Sevin Rosen Fund VL.P., Sevin Rosen Fund VIL.P., Sevin Rosen V
Affiliates Fund L.P., and Sevin Rosen VI Affiliates Fund L.P. each of
which is an affiliate of Sevin Rosen Funds.
(4) The address of InterWest Partners is 3000 Sand Hill Road #3-255, Menlo
Park, CA 94025. Includes purchases made by InterWest Investors VI, L.P.
and InterWest Partners VI, L.P., each of which is an affiliate of
InterWest Partners.
(5) The address of Venrock Associates is 30 Rockefeller Plaza, Room 5508, New
York, New York 10112.
4
(6) The address of Meritech Capital is 428 University Avenue, Palo Alto, CA
94301.
(7) The addresses of Messrs. Desch, Stonestrom, and Aronstam is 13450 West
Sunrise Boulevard, Suite 430, Sunrise, FL 33323.
(8) Includes 26,389 shares of common stock issuable on exercise of presently
exercisable stock options.
(9) The addresses of Messrs. Cooper, Paget and Smith-Petersen is Cambridge
House, Oxford Road, Uxbridge, Middlesex UB8 1UN, England.
(10) Includes 47,534 shares of common stock issuable on exercise of presently
exercisable stock options.
(11) Includes 7,667 shares of common stock issuable on exercise of presently
exercisable stock options.
(12) The address of Mr. Heredia is Newton #54-4, Polanco, D.F, Mexico 11560.
(13) The address of Mr. Cash is 3000 Sand Hill Road #3-255, Menlo Park, CA
94025. Mr. Cash is a general partner of InterWest Partners. The shares
listed represents (i) 2,892,394 shares held by investment entities of
InterWest Partners and (ii) 7,500 shares of common stock issuable on
exercise of presently exercisable stock options. Mr. Cash disclaims
beneficial ownership of the shares held by InterWest partners except for
his pecuniary interest therein.
(14) The address of Mr. Huseby is 777 108th Avenue N.E., Suite 1895, Bellevue,
WA 98004. Includes 7,500 shares of common stock issuable on exercise of
presently exercisable stock options
(15) The address of Mr. Santoro is 9 Back Hill, London, EC1R-5EN United
Kingdom. Includes 7,500 shares of common stock issuable on exercise of
presently exercisable stock options
(16) The address of Mr. Twyver is P.O. Box 2447, Friday Harbor, WA 98250.
Includes 7,500 shares of common stock issuable on exercise of presently
exercisable stock options
(17) Includes 250,000 shares of common stock issuable on exercise of presently
exercisable stock options
(18) Includes 53,958 shares of common stock issuable on exercise of presently
exercisable stock options.
Board Compensation
Each of our non-employee directors receives $3,000 per meeting of the board
of directors attended, together with reimbursement of travel expenses. We have
also entered into an employment agreement with Matthew J. Desch and Eric
Stonestrom. See " --Employment Agreements". Otherwise, except for reimbursement
for reasonable travel expenses relating to attendance at board meetings and the
grant of stock options, directors are not compensated for their services as
directors. In 2000 we granted 20,000 options to each of our non-employee board
members (Messrs. Twyver, Cash, Huseby, Santoro and Bandel Carano (who resigned
from the board of directors February 7, 2001)). Directors who are also our
employees are eligible to participate in our 1998 Stock Option and Restricted
Stock Plan and our 2000 Employee Stock Purchase Plan.
5
Executive Compensation
The following table sets forth the compensation of our chief executive
officer and our four other most highly compensated executive officers who were
serving at December 31, 2000 and one executive officer who left during 2000
(collectively, the "named executive officers") for fiscal 1998 and the years
ended December 31, 1999 and 2000. See "Employment Agreements."
Annual Compensation(1) Securities
Name and Principal ------------------------------ Underlying All Other
Position Year Salary($) Bonus($) Options Compensation($)
- ------------------ ---- --------- -------- ---------- ---------------
Eric D. Stonestrom...... 2000 $250,000 $ 8,000 100,000 (Pounds)50,000(2)
president and chief 1999 218,000 50,000 66,667 $ 50,000(2)
executive officer 1998 200,000 0 500,000 25,000(2)
Matthew Desch........... 2000 $137,500(3) $ 8,000 900,000 $ 52,530(4)
chairman of the Board
of Directors
Ian Cooper.............. 2000 $164,004 $ 8,000 48,333
vice president, 1999 164,448 1,391 25,000
engineering 1998 134,722 66,667
Jonathan Paget.......... 2000(6) $191,397 $ 8,000 227,333
executive vice 1999 145,566 0 122,667
president and
chief operating officer
Henrik Smith-Petersen... 2000 $171,195 $43,391(9) 73,333
president, Asia Pacific 1999 149,053 23,247 6,667
1998 115,843 13,143 50,000
Nigel Terry............. 2000(10) $ 91,960 $33,245 0 $ 54,796(11)
former vice president, 1999 195,705 38,931 6,667 4,025(12)
sales 1998 25,029 0 60,000 20,491(12)
Joseph J. Caffarelli.... 2000(5) $239,583 0 77,344 $ 49,500(7)
former chief financial 1999(6) 149,999 0 122,667 86,009(8)
officer
- --------
(1) Salary amounts for Messrs. Cooper, Paget , Henrik Smith-Petersen and
Terry reflect a conversion rate from U.K. pounds to U.S. dollars of
(Pounds)1:$1.6549 in 1998, and (Pounds)1:$1.6174 in 1999, and
(Pounds)1:$1.5244 in 2000 as applicable.
(2) Mr. Stonestrom's other compensation consisted of tax equalization
payments made to Mr. Stonestrom.
(3) Mr. Desch became the Airspan's Chairman on July 1, 2000. The salary
figure above is one half of Mr. Desch's $275,000 annual salary for 2000.
(4) Mr. Desch's other compensation consisted of reimbursement of certain
relocation expenses.
(5) Mr. Caffarelli resigned, effective December 11, 2000.
(6) Both Messrs. Caffarelli and Paget joined Airspan on April 1, 1999. Mr.
Caffarelli's annualized salary for 1999 was $200,000 and Mr. Paget's
annualized salary for 1999 was $194,088. Mr. Caffarelli's annualized
salary for 2000 was $250,000.
(7) Mr. Caffarelli's other compensation consisted of payments to Mr.
Caffarelli for reimbursement of certain relocation expenses, tax
equalization payments and sign on bonus.
(8) Mr. Caffarelli's other compensation in 2000 consisted of payments to Mr.
Caffarelli for reimbursement of certain relocation and rent expenses, tax
equalization payments and in connection with his resignation in 2000.
(9) Henrik Smith-Petersen's bonus payments related to commission earned on
sales revenue.
(10) During June 2000, Mr. Terry's employment with Airspan ended. His salary
has therefore been prorated for six months.
(11) Mr. Terry's other compensation in 2000 consisted of payments to Mr. Terry
in connection with his termination in 2000.
(12) Mr. Terry's other compensation in 1999 and 1998 consisted of payments to
Mr. Terry for reimbursement of certain relocation expenses.
6
Option Grants During 2000 Fiscal Year
The following table provides information regarding stock options granted
during the year ended December 31, 2000 to the named executive officers. We
have not granted any stock appreciation rights.
Potential Realizable
% of Total Value At Assumed
Options Annual Rates Of Stock
Number of Granted to Exercise Appreciation
Securities Employees or Base For Option Term (1)
Underlying in Fiscal Price Expiration ----------------------
Name Options(#) Year(%) ($/share) Date 5% 10%
- ---- ---------- ---------- --------- ---------- ---------- -----------
Eric D. Stonestrom...... 100,000(2) 5.3% $ 6.00 02/11/10 $ 377,337 $ 956,245
Matthew Desch........... 600,000(3) 31.7 $15.00 10/07/010 $5,660,052 $14,343,682
200,000(3) 10.6 $ 6.00 02/11/10 754,673 1,912,490
100,000(2) 5.3 $ 6.00 02/11/10 377,337 956,245
Ian Cooper.............. 10,000(4) 0.5 $ 9.60 10/03/10 $ 47,167 $ 119,531
38,333(4) 2.0 $ 7.50 09/06/10 231,431 586,492
Jonathan Paget.......... 127,333(4) 6.7 $ 9.60 19/06/10 $ 768,759 $ 1,948,185
100,000(2) 5.3 $ 6.00 02/11/10 377,337 956,245
Henrik Smith-Petersen... 36,666(4) 1.9 $ 9.60 21/06/10 $ 221,367 $ 560,987
36,667(4) 1.9 $ 7.50 10/03/10 172,946 438,279
Joseph J. Caffarelli.... 16,667(4) 0.9 $ 7,50 10/03/10 $ 78,612 $ 199,217
60,667(4) 3.2 $ 9.60 19/06/10 366,270 928,200
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(1) Calculated on the basis of $3.50 per share, the closing price of our
common stock on the Nasdaq National Market on December 29, 2000, less the
exercise price payable for such shares, multiplied by the number of shares
underlying the option.
(2) The vesting period for these shares is evenly over seven years, provided,
however, all of such options vest if certain fiscal year 2001 revenue
milestones are achieved.
(3) The vesting period for these shares is 1/24th per month.
(4) The vesting period for these options is over 4 years with 25% vesting
after one year and then 1/48th of the total per month thereafter.
Aggregated Option Exercises During 2000 Fiscal Year and Fiscal Year-End Option
Values
The following table provides information as to the number and value of all
outstanding options exercised during fiscal year 2000 to the named executive
officers. We have not granted any stock appreciation rights.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Options at Fiscal Year-End(#) Fiscal Year-End($)(1)
Acquired on Value -------------------------------- -------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ----------- -------------- --------------- ----------- -------------
Eric D. Stonestrom...... 0 0 19,445 147,222 -- --
Matthew Desch........... 0 0 125,000 775,000 -- --
Joseph J. Caffarelli.... 0 0 50,069 0 $141,011 --
Ian Cooper.............. 0 0 35,070 88,263 88,889 $ 71,110
Jonathan Paget.......... 0 0 43,278 306,722 74,000 103,600
Henrik Smith-Petersen... 0 0 37,362 92,638 113,334 46,666
- --------
(1) Calculated on the basis of $3.50 per share, the closing price of our
common stock on the Nasdaq Stock Market on December 29, 2000, less the
exercise price payable for such shares, multiplied by the number of shares
underlying the option.
7
Employment Agreements
In January 1998, we entered into an employment agreement with Eric D.
Stonestrom, our president and chief executive officer. Mr. Stonestrom's annual
compensation was set at an annual base salary of $180,000, with a bonus based
on achieving gross profit objectives. Mr. Stonestrom was also granted stock
options to purchase 333,333 shares of common stock that were exercised in
February 1998. In May 1998, we entered into another employment agreement with
Mr. Stonestrom. Pursuant to this agreement, Mr. Stonestrom's annual base salary
was increased to $210,000 and he received additional options to purchase
166,667 shares of common stock that were exercised in May 1998. The agreement
with Mr. Stonestrom further provides certain tax equalization payments of
$50,000 annually. Mr. Stonestrom is also entitled to receive six months of
severance payments if his employment is terminated involuntarily. In May 1999,
Mr. Stonestrom's annual base salary was increased to $222,000 and in October
1999 he received additional options to purchase 66,667 shares of common stock.
In April, 2000 Mr. Stonestrom's annual base salary was increased to $250,000
and in November 2000, he received additional options to purchase 100,000 shares
of common stock. In April 2000, Mr. Stonestom's salary was increased to
$300,000. In February 2001, Mr. Stonestrom received additional options to
purchase 150,000 shares of common stock. In April 2001, Mr. Stonestrom's salary
was increased to $300,000. Depending on Airspan achieving certain revenue
milestones and operating loss targets, Mr. Stonestrom is eligible under the
2001 Staff Incentive Scheme to receive a bonus in the amount of 60% of his base
compensation.
In April 1999, we entered into an employment agreement with Jonathan Paget,
our executive vice president, and chief operating officer. Mr. Paget's annual
compensation was set at an annual base salary of $194,088, with options to
purchase 60,000 shares of common stock. In October 1999, Mr. Paget received
additional options to purchase 62,667 shares of common stock. In June 2000, Mr.
Paget received additional options to purchase 127,333 shares of common stock.
In November 2000, Mr. Paget received additional options to purchase 100,000
shares of common stock. In February 2001, Mr. Paget received additional options
to purchase 60,000 shares of common stock. In April 2001, Mr. Paget's salary
was increased to $212,874. Depending on Airspan achieving certain revenue
milestones and operating loss targets, Mr. Paget is eligible under the 2001
Staff Incentive Scheme to receive a bonus in the amount of 50% of his base
compensation.
In January 1998, we entered into an employment agreement with Ian Cooper, our
vice president, engineering. Mr. Cooper's annual compensation was set at an
annual base salary of $134,722. In addition to the base salary Mr. Cooper was
granted options to purchase 50,000 shares of common stock. In October 1998, we
entered into another employment agreement with Mr. Cooper where he was named
vice president, engineering. Pursuant to this agreement, Mr. Cooper's annual
base salary was increased to $164,448 and he received options to purchase
16,667 shares of common stock. In October 1999, Mr. Cooper received options to
purchase 25,000 shares of common stock, and in March 2000, Mr. Cooper received
options to purchase 10,000 shares of common stock. In June 2000, Mr. Cooper
received additional options to purchase 38,333 shares of common stock. In
February 2001, Mr. Cooper received additional options to purchase 30,000 shares
of common stock plus an additional 30,000 shares of common stock on deliverance
of specified projects. In April 2001, Mr. Cooper's salary was increased to
$173,437. Depending on Airspan achieving certain revenue milestones and
operating loss targets, Mr. Cooper is eligible under the 2001 Staff Incentive
Scheme to receive a bonus in the amount of 40% of his base salary.
In January 1998, we entered into an employment agreement with Henrik Smith-
Petersen, our Executive Vice President, Asia Pacific. Mr. Smith-Petersen's
annual compensation was set an annual base salary of $115,843 plus commission.
In addition to the base salary Mr. Smith-Petersen was granted options to
purchase 50,000 shares of common stock. In October 1998, Mr. Smith-Petersen's
salary was increased to $149,053 plus commission. In February 1999 Mr. Smith-
Petersen's salary was increased to $152,959 plus commission. In October 1999,
Mr. Smith-Petersen received options to purchase 6,667 shares in common stock.
In March 2000, we entered into another employment agreement with Mr. Smith-
Petersen where his salary was increased to $171,195 plus commission. In
addition Mr. Smith-Petersen received options to purchase 36,667 shares in
common stock. In June 2000, Mr. Smith-Petersen received additional options to
purchase 36,666 shares in
8
common stock. In February 2001, Mr. Smith-Petersen received additional options
to purchase 175,000 shares in common stock. In April 2001, Mr. Smith-Petersen's
salary was increased to $193,887 plus commission.
In June 2000, we entered into an employment agreement with Matthew J. Desch,
the chairman of our board of directors. Mr. Desch's annual compensation
consists of a base salary of $275,000 per year. We have also agreed to
reimburse Mr. Desch for certain costs in connection with moving and living
expenses. In addition, Mr. Desch will receive options to purchase 600,000
shares of common stock with an exercise price of $15.00, our initial public
offering price. In July 2000, Mr. Desch received additional options to purchase
600,000 shares of common stock and in November 2000, he received additional
options to purchase 300,000 shares of commons stock. Mr. Desch will be eligible
to participate in. Depending on Airspan achieving certain revenue milestones
and operating loss targets, Mr. Desch is eligible under the 2001 Staff
Incentive Scheme to receive a bonus in the amount of 60% of his base salary.
In March 2001, we entered into an employment agreement with Peter Aronstam,
the Senior Vice President and Chief Financial Officer (CFO). Mr. Aronstam's
annual compensation consists of a base salary of $260,000 per year. In addition
Mr. Aronstam received options to purchase 325,000 shares of common stock.
Depending on Airspan achieving certain revenue milestones and operating loss
targets, Mr. Aronstam is eligible under the 2001 Staff Incentive Scheme to
receive a bonus in the amount of 50% of his base salary.
9
AIRSPAN NETWORKS INC.
REPORT OF THE AUDIT COMMITTEE/1/
The Audit Committee of the Board of Directors is composed of three directors
who are independent directors as defined under the rules of the Nasdaq Stock
Market. The Audit Committee operates under a written charter adopted by the
Board of Directors, that is included as Annex A to this proxy statement.
The Audit Committee oversees the Company's financial reporting process on
behalf of the Board of Directors. Management is responsible for the Company's
financial statements and the financial reporting process, including the system
of internal controls. The independent auditors are responsible for expressing
an opinion on the conformity of those audited financial statements with
accounting principles generally accepted in the United States. In fulfilling
its oversight responsibilities, the Audit Committee has reviewed and discussed
with management and the independent auditors the Company's audited financial
statements contained in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000, including a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness of significant
judgments, and the clarity of disclosures in the financial statements.
The Audit Committee has discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61,
Communication with Audit Committees, as amended. In addition, the Audit
Committee has discussed with the independent auditors the auditors'
independence from the Company and its management including the matters in the
written disclosures provided to the Audit Committee as required by Independence
Standards Board Standard No. 1, Independence Discussions with Audit Committees,
and considered the compatibilities of non-audit services with the auditors'
independence.
The Committee discussed with the Company's independent auditors the overall
scope and plans for their audit. The Committee met with the Company's
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting.
Based on the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors, and the Board has approved, that the
audited financial statements be included in the Company's Annual Report on Form
10-K for fiscal 2000, for filing with the Securities and Exchange Commission.
The Audit Committee and the Board have also recommended the selection of the
Company's independent auditors for the year ending December 31, 2001.
Audit Committee Members in 2000
David Twyver
Ovid Santoro
Bandel Carano/2/
H. Berry Cash
- --------
/1/The material in this report is not "soliciting material," is not deemed
filed with the SEC and is not to be incorporated by reference in any filing
of Airspan under the Securities Act of 1933, as amended (the "1933 Act"), or
the 1934 Act.
/2/Mr. Carano resigned from the Airspan's board of directors on February 7,
2001 and has been replaced on the Audit Committee by H. Berry Cash.
10
REPORT OF THE AIRSPAN NETWORKS INC. BOARD
OF DIRECTORS COMPENSATION COMMITTEE
Airspan's employee compensation policy is to offer a package including a
competitive salary, an incentive bonus based upon individual performance goals,
competitive benefits, and an attractive workplace environment. The Company also
encourages broad-based employee ownership of Airspan stock through a stock
option program in which most employees are eligible to participate.
The Compensation Committee of the Board of Directors (comprised entirely of
non-employee directors) reviews and approves individual officer salaries,
bonuses, and stock option grants. The Committee also reviews guidelines and
proposals for compensation, bonus, and stock option grants for non-officer
employees.
The Company's compensation policy for officers is similar to that for other
employees, and is designed to promote excellent performance and attainment of
corporate and personal goals. The Compensation Committee annually reviews and
approves the compensation of each of Airspan's named executive officers.
Bonuses are tied to corporate revenue and profit goals established by the
Compensation Committee as an incentive for superior corporate performance. The
Compensation Committee believes that the compensation paid to Mr. Stonestrom as
President and Chief Executive Officer, set at $300,000 for 2001 is reasonable
compared to the compensation paid to Chief Executive Officers of public
companies that compete in the same area of business as the Company.
Members of the Compensation
Committee in 2000
Thomas S. Huseby
H. Berry Cash
11
PERFORMANCE GRAPH
The following graph depicts the Company's stock price performance from July
19, 2000 (the date on which quotations for the Common Stock first appeared on
the NASDAQ National Market) through March 30, 2001, relative to the performance
of the NASDAQ Stock Market (U.S. Companies), and the NASDAQ Telecommunications
Index (published by NASDAQ) for the same period. All indices shown in the graph
have been reset to a base of 100 as of July 19, 2000, and assume an investment
of $100 on that date and the reinvestment of dividends paid since that date.
[PERFORMANCE GRAPH]
20-Jul-00 31-Jul-00 31-Aug-00 29-Sep-00 31-Oct-00
--------- --------- --------- --------- ---------
Airspan 100.00 70.02 55.16 35.99 17.12
Nasdaq Composite 100.00 90.02 100.52 87.77 80.53
Nasdaq Telecom 100.00 86.18 89.42 78.50 67.12
30-Nov-00 29-Dec-00 31-Jan-01 28-Feb-01 30-Mar-01
--------- --------- --------- --------- ---------
Airspan 9.98 10.95 15.84 9.58 7.04
Nasdaq Composite 62.08 59.04 66.26 51.42 43.98
Nasdaq Telecom 49.83 49.84 59.77 42.42 35.28
Section 16(a) Beneficial Ownership Reporting Compliance
In 2000, to the knowledge of the Company, no executive officer, director of
affiliate of the Company was late on making filings required by Section (a) of
the Securities Exchange Act of 1934.
APPROVAL OF AMENDMENT TO 1998 STOCK OPTION PLAN
(Proposal #2)
On May 25, 2000, the shareholders approved an amendment to the Company's 1998
Stock Option and Restricted Stock Plan (the "1998 Plan") authorizing the
issuance of 4,591,666 options to employees and directors of the Company. On
March 22, 2001, the board of directors of the Company approved an amendment to
the 1998 Plan increasing the number of options available to 6,091,666, subject
to approval of the shareholders at the 2001 Annual Meeting. The shareholders
are being requested at the Annual Meeting to
12
approve an amendment to the 1998 Plan which increases by 1,500,000 shares the
number of shares that maybe issued under the 1998 Plan (to 6,091,666). The
purpose of the 1998 Plan is to promote Company success by aligning employee
financial interests with long-term shareholder value. Since 4,564,480 of the
4,591,666 options authorized under the 1998 Plan have been granted and not
cancelled, the Board of Directors believes that an increase in the number of
shares available for issuance is necessary in order to achieve the purpose of
the 1998 Plan.
If approved, Section 4 of the 1998 Plan would be amended to provide for the
reservation of six million ninety one thousand, six hundred and sixty six
(6,091,666) options ("Options" is defined in the 1998 Plan). A copy of the 1998
Plan as proposed to be amended is attached as Annex B to this proxy statement.
Summary of 1998 Plan
A general description of some of the basic features of the 1998 Plan is
presented below, but such description is qualified in its entirety by reference
to the full text of the 1998 Plan, attached as Annex B.
Term. Incentive stock options may be granted pursuant to the 1998 Plan during
a period of ten (10) years from the date the 1998 Plan was adopted by the Board
of Directors (until February 1, 2008), and nonqualified stock options may be
granted until the 1998 Plan is discontinued or terminated by the Board of
Directors.
Eligibility. All employees of the Company or any subsidiary are eligible to
receive incentive stock options pursuant to the 1998 Plan (approximately 270
participants). All employees, officers and directors of the Company or any
subsidiary are eligible to receive nonqualified stock options.
Options. When an option is granted under the 1998 Plan, the Compensation
Committee acting as the Administrator of the 1998 Plan, at its discretion,
specifies the option price and the number of shares of Common Stock which may
be purchased upon exercise of the option. The exercise price of an incentive
stock option set by the Administrator may not be less than 100% of the fair
market value of the Company's Common Stock, as that term is defined in the 1998
Plan. Unless otherwise determined by the Administrator, the exercise price of a
nonqualified stock option will be 100% of the fair market value on the date of
grant; provided, however, that the exercise price may not be less than 85% of
the fair market value on the date of grant under any circumstances. The closing
price of the Company's Common Stock as reported on the Nasdaq Stock Market was
$2.28 on April 11, 2001. The period during which an option may be exercised,
and whether the option will be exercisable immediately, in stages, or otherwise
is set by the Administrator. Generally, an incentive stock option may not be
exercisable more than ten (10) years from the date of grant. Optionees may pay
for shares upon exercise of options with cash, certified check or Common Stock
of the Company valued at the stock's then "fair market value" as defined in the
1998 Plan. Each option granted under the 1998 Plan is generally nontransferable
during the lifetime of the optionee; however, the Administrator may, in its
sole discretion, permit the transfer of a nonqualified stock option to
immediate family members or to certain family trusts or family partnerships.
Generally, under the form of option agreement which the Administrator is
currently using for options granted under the 1998 Plan, if the optionee's
affiliation with the Company terminates before expiration of the option for
reasons other than death or disability, the optionee has a right to exercise
the option for three months after termination of such affiliation or until the
option's original expiration date, whichever is earlier. If the termination is
because of death or disability, the option typically is exercisable until its
original stated expiration or until the 12-month anniversary of the optionee's
death or disability, whichever is earlier. The Administrator may impose
additional or alternative conditions and restrictions on the incentive or
nonqualified stock options granted under the 1998 Plan; however, each incentive
option must contain such limitations and restrictions upon its exercise as are
necessary to ensure that the option will be an incentive stock option as
defined under the Internal Revenue Code.
United State Income Tax Consequences of the 1998 Plan. Under present law, an
optionee will not realize any taxable income on the date a nonqualified stock
option is granted to the optionee pursuant to the 1998 Plan.
13
Upon exercise of the nonqualified stock option, however, the optionee will
realize, in the year of exercise, ordinary income to the extent of the
difference between the option price and the fair market value of the Company's
Common Stock on the date of exercise. Upon the sale of the shares, any
resulting gain or loss will be treated as capital gain or loss. The Company
will be entitled to a tax deduction in its fiscal year in which nonqualified
stock options are exercised, equal to the amount of compensation required to be
included as ordinary income by those optionees exercising such options.
Incentive stock options granted pursuant to the 1998 Plan are intended to
qualify for favorable tax treatment to the optionee under Code Section 422.
Under Code Section 422, an employee realizes no taxable income when the
incentive stock option is granted. If the employee has been an employee of the
Company or any subsidiary at all times from the date of grant until three
months before the date of exercise, the employee will realize no taxable income
when the option is exercised. If the employee does not dispose of shares
acquired upon exercise for a period of two years from the granting of the
incentive stock option and one year after receipt of the shares, the employee
may sell the shares and report any gain as capital gain. The Company will not
be entitled to a tax deduction in connection with either the grant or exercise
of an incentive stock option. If the employee should dispose of the shares
prior to the expiration of the two-year or one-year periods described above,
the employee will be deemed to have received compensation taxable as ordinary
income in the year of the early sale in an amount equal to the lesser of (i)
the difference between the fair market value of the Company's Common Stock on
the date of exercise and the option price of the shares, or (ii) the difference
between the sale price of the shares and the option price of shares. In the
event of such an early sale, the Company will be entitled to a tax deduction
equal to the amount recognized by the employee as ordinary income. The
foregoing discussion ignores the impact of the alternative minimum tax, which
may particularly be applicable to the year in which an incentive stock option
is exercised.
Plan Benefits. Future grants of stock options are subject to the discretion
of the Compensation Committee. Therefore, the future benefits under the 1998
Plan cannot be determined at this time.
As of March 23, 2001, 4,564,480 options have been granted, net of
cancellations, pursuant to the 1998 Plan.
Vote Required. The affirmative vote of holders of a majority of the shares of
common stock represented at the meeting is required to approve the amendment to
the 1998 Plan. The Board of Directors recommends a vote for the proposal.
VOTING TABULATION
Vote Required. Under the Washington Business Corporation Act, each of the
Proposals requires a plurality of the votes represented in person or by proxy
at the meeting. The Company's transfer agent, Mellon Investor Services LLC,
will tabulate votes cast by proxy or in person at the meeting.
Effect of an Abstention and Broker Non-Votes. A shareholder who abstains from
voting on any or all proposals will be included in the number of shareholders
present at the meeting for the purpose of determining the presence of a quorum.
Abstentions will not be counted either in favor of or against the election of
the nominees or other proposals. Under the rules of the National Association of
Securities Dealers, brokers holding stock for the accounts of their clients who
have not been given specific voting instructions as to a matter by their
clients may vote their clients' proxies in their own discretion.
INDEPENDENT PUBLIC ACCOUNTANT
Ernst & Young LLP has served as independent auditors for the Company since
1998. Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will be given an opportunity to make a statement if so
desired and to respond to appropriate questions.
14
2001 SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the annual meeting in
2002 must be submitted to the Company in appropriate written form on or before
February 19, 2002 to be included in the Company's proxy statement and related
proxy for the 2002 meeting.
OTHER BUSINESS
Management is not aware of any matters to be presented for action at the
Annual Meeting, except matters discussed in the Proxy Statement. If any other
matters properly come before the meeting, it is intended that the shares
represented by proxies will be voted in accordance with the judgment of the
persons voting the proxies.
ANNUAL REPORT TO SHAREHOLDERS
A copy of the Company's Annual Report on Form 10-K, for the fiscal year ended
December 31, 2000 accompanies this Notice of Annual Meeting and Proxy
Statement.
By Order of the Board of Directors
/s/ C. Kent Carlson
C. Kent Carlson
Secretary
April 13, 2001
15
ANNEX A
AIRSPAN NETWORKS INC.
AUDIT COMMITTEE CHARTER
Organization
There shall be a committee of the board of directors to be known as the audit
committee. The audit committee shall be composed of directors who are
independent of the management of the Company and are free of any relationship
that, in the opinion of the board of directors, would interfere with their
exercise of independent judgement as committee members.
Statement of Policy
The audit committee shall provide assistance to the directors in fulfilling
their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the company, and the quality and integrity of financial reports of the company.
In so doing, it is the responsibility of the audit committee to maintain free
and open communication between the directors, the independent auditors, and the
financial management of the Company.
Responsibilities
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the Company are in accordance
with all requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
. Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the Company and its
divisions and subsidiaries.
. Meet with the independent auditors and financial management of the
Company to review the scope of the proposed audit for the current year
and the audit procedures to be utilized, the adequacy of the independent
auditor's compensation, and at the conclusion thereof review such audit,
including any comments or recommendations of the independent auditors.
. Review with the independent auditors, the Company's internal auditor,
and financial and accounting personnel, the adequacy and effectiveness
of the accounting and financial controls of the company, and elicit any
recommendations for the improvement of such internal controls or
particular areas where new or more detailed controls or procedures are
desirable.
. Periodically review Company policy statements to determine their
adherence to the code of conduct.
. Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the shareholders.
. Review with financial management and the independent auditors the
results of their timely analysis of significant financial reporting
issues and practices, including changes in, or adoptions of, accounting
principles and disclosure practices.
. Provide sufficient opportunity for the internal and independent auditors
to meet with the members of the audit committee without members of
management present. Among the items to be discussed in these meetings
are the independent auditors' evaluation of the company's financial,
accounting, and auditing personnel, and the co-operation that the
independent auditors received during the course of audit.
A-1
. Review accounting and financial human resources and succession planning
within the Company.
. Report the results of the annual audit to the board of directors.
. Review the nature and scope of other professional services provided to
the company by the independent auditors and consider the relationship to
the auditors' independence.
. Submit the minutes of all meetings of the audit committee to the board
of directors.
. Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgement, that is appropriate.
Conduct quarterly meetings with management and the auditors to review
operating results and financial reporting issues.
A-2
ANNEX B
AIRSPAN NETWORKS INC.
1998 STOCK OPTION AND RESTRICTED STOCK PLAN
Section 1. Purpose. The purpose of the Airspan Networks Inc. 1998 Stock
Option and Restricted Stock Plan (the "Plan") is to promote the interests of
Airspan Networks Inc., a Washington corporation (the "Company"), and any
Subsidiary thereof and the interests of the Company's stockholders by providing
an opportunity to selected employees, officers and directors of the Company or
any Subsidiary thereof as of the date of the adoption of the Plan or at any
time thereafter to purchase Common Stock of the Company. By encouraging such
stock ownership, the Company seeks to attract, retain and motivate such
employees and persons and to encourage such employees and persons to devote
their best efforts to the business and financial success of the Company. It is
intended that this purpose will be effected by the granting of "non-qualified
stock options" and/or "incentive stock options" to acquire the Common Stock of
the Company and/or by the granting of Common Stock or rights to purchase the
Common Stock of the Company on a "restricted stock" basis. Under the Plan, the
Committee shall have the authority (in its sole discretion) to grant "incentive
stock options" within the meaning of Section 422(b) of the Code, "non-qualified
stock options" as described in Treasury Regulation Section 1.83-7 or any
successor regulation thereto, or "restricted stock" awards.
Section 2. Definitions. For purposes of the Plan, the following terms used
herein shall have the following meanings, unless a different meaning is clearly
required by the context.
2.1. "Award" shall mean an award of Common Stock or the right to purchase
Common Stock granted under the provisions of Section 7 of the Plan.
2.2. "Board of Directors" shall mean the Board of Directors of the Company.
2.3. "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.4. "Committee" shall mean the committee of the Board of Directors referred
to in Section 5 hereof.
2.5. "Common Stock" shall mean the Common Stock, $.0003 par value, of the
Company.
2.6. "Employee" shall mean (i) with respect to an ISO, any person, including
an officer or director of the Company, who, at the time an ISO is granted to
such person hereunder, is employed on a full-time basis by the Company or any
Subsidiary of the Company, and (ii) with respect to a Non-Qualified Option
and/or an Award, any person employed by, or performing services for, the
Company or any Subsidiary of the Company, including, without limitation,
directors and officers.
2.7. "ISO" shall mean an Option granted to a Participant pursuant to the Plan
that constitutes and shall be treated as an "incentive stock option" as defined
in Section 422(b) of the Code.
2.8. "Non-Qualified Option" shall mean an Option granted to a Participant
pursuant to the Plan that is intended to be, and qualifies as, a "non-qualified
stock option" as described in Treasury Regulation Section 1.83-7 or any
successor regulation thereto and that shall not constitute nor be treated as an
ISO.
2.9. "Option" shall mean any ISO or Non-Qualified Option granted to an
Employee pursuant to the Plan.
2.10. "Participant" shall mean any Employee to whom an Award and/or an Option
is granted under the Plan.
2.11. "Parent of the Company" shall have the meaning set forth in Section
424(e) of the Code.
B-1
2.12. "Subsidiary of the Company" shall have the meaning set forth in Section
424(f) of the Code.
Section 3. Eligibility. Awards and/or Options may be granted to any Employee.
The Committee shall have the sole authority to select the persons to whom
Awards and/or Options are to be granted hereunder, and to determine whether a
person is to be granted a Non-Qualified Option, an ISO or an Award or any
combination thereof. No person shall have any right to participate in the Plan.
Any person selected by the Committee for participation during any one period
will not by virtue of such participation have the right to be selected as a
Participant for any other period. On and after the time that the Company
becomes subject to Code Section 162(m), no Participant shall be granted Options
and/or Awards under the Plan with respect to more than 1,000,000 shares of
Common Stock in any calendar year (subject to adjustment as provided in Section
8 hereof).
Section 4. Common Stock Subject to the Plan.
4.1. Number of Shares. The total number of shares of Common Stock for which
Options and/or Awards may be granted under the Plan (as well as the total
number of ISOs that may be granted hereunder) shall not exceed in the six
million ninety one thousand six hundred and sixty six (6,091,666) options
shares of Common Stock (subject to adjustment as provided in Section 8 hereof).
4.2. Reissuance. The shares of Common Stock that may be subject to Options
and/or Awards granted under the Plan may be either authorized and unissued
shares or shares reacquired at any time and now or hereafter held as treasury
stock as the Board of Directors may determine. In the event that any
outstanding Option expires or is terminated for any reason, the shares
allocable to the unexercised portion of such Option may again be subject to an
Option and/or Award granted under the Plan. If any shares of Common Stock
acquired pursuant to an Award or the exercise of an Option shall be forfeited
or repurchased by the Company, then such shares shall again become available
for issuance pursuant to the Plan.
4.3. Special ISO Limitations.
(a) To the extent that the aggregate fair market value (determined as of
the date an ISO is granted) of the shares of Common Stock with respect to
which ISOs are exercisable for the first time by an Employee during any
calendar year (under all Incentive Stock Option Plans of the Company or any
Parent or Subsidiary of the Company) exceeds $100,000, then the excess
thereof shall be treated as a Non-Qualified Option and not as an ISO. This
rule shall be applied by taking Options into account in the order in which
they are granted.
(b) No ISO shall be granted to an Employee who, at the time the ISO is
granted, owns (actually or constructively under the provisions of Section
424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any Parent or
Subsidiary of the Company, unless the option price is at least 110% of the
fair market value (determined as of the time the ISO is granted) of the
shares of Common Stock subject to the ISO and the ISO by its terms is not
exercisable more than five years from the date it is granted.
4.4. Limitations Not Applicable to Non-Qualified Options or
Awards. Notwithstanding any other provision of the Plan, the provisions of
Sections 4.3(a) and (b) shall not apply, nor shall be construed to apply, to
any Non-Qualified Option or Award granted under the Plan.
Section 5. Administration of the Plan.
5.1. Administration. The Plan shall be administered by a committee of the
Board of Directors (the "Committee") established by the Board of Directors and
consisting of no less than two persons. From and after the time that any equity
securities of the Company become registered or required to be registered under
Section 12 of the Securities Exchange Act of 1934 ("Exchange Act"), all members
of the Committee shall be both "non-employee directors" within the meaning of
Rule 16b-3 promulgated under the Exchange Act and
B-2
"outside directors" within the meaning of Code Section 162(m). The Committee
shall be appointed from time to time by, and shall serve at the pleasure of,
the Board of Directors.
5.2. Grant of Options/Awards.
(a) Options. The Committee shall have the sole authority and discretion
under the Plan (i) to select the Employees who are to be granted Options
hereunder; (ii) to designate whether any Option to be granted hereunder is
to be an ISO or a Non-Qualified Option; (iii) to establish the number of
shares of Common Stock that may be issued under each Option; (iv) to
determine the time and the conditions subject to which Options may be
exercised in whole or in part; (v) to determine the form of the
consideration that may be used to purchase shares of Common Stock upon
exercise of any Option (including the circumstances under which the
Employee may pay all or part of the exercise price by entering into a
promissory note with the Company, or circumstances under which the
Company's issued and outstanding shares of Common Stock may be used by a
Participant to exercise an Option); (vi) to impose restrictions and/or
conditions with respect to shares of Common Stock acquired upon exercise of
an Option; (vii) to determine the circumstances under which shares of
Common Stock acquired upon exercise of any Option may be subject to
repurchase by the Company; (viii) to determine the circumstances and
conditions subject to which shares acquired upon exercise of an Option may
be sold or otherwise transferred, including, without limitation, the
circumstances and conditions subject to which a proposed sale of shares of
Common Stock acquired upon exercise of an Option may be subject to the
Company's right of first refusal (as well as the terms and conditions of
any such right of first refusal); (ix) to establish a vesting provision for
any Option relating to the time when (or the circumstances under which) the
Option may be exercised by a Participant, including, without limitation,
vesting provisions that may be contingent upon (A) the Company meeting
specified financial goals, (B) a change of control of the Company or (C)
the occurrence of other specified events; (x) to accelerate the time when
outstanding Options may be exercised; and (xi) to establish any other
terms, restrictions and/or conditions applicable to any Option not
inconsistent with the provisions of the Plan.
(b) Awards. The Committee shall have the sole authority and discretion
under the Plan (i) to select the Employees who are to be granted Awards
hereunder; (ii) to determine the amount, if any, to be paid by a
Participant to acquire shares of Common Stock pursuant to an Award; (iii)
to determine the time or times and the conditions subject to which Awards
may be made; (iv) to determine the time or times and the conditions subject
to which the shares of Common Stock subject to an Award are to become
vested and no longer subject to forfeiture to and/or repurchase by the
Company; (v) to establish transfer restrictions and the terms and
conditions on which any such transfer restrictions with respect to shares
of Common Stock acquired pursuant to an Award shall lapse; (vi) to
establish vesting provisions with respect to any shares of Common Stock
subject to an Award, including, without limitation, vesting provisions
which may be contingent upon (A) the Company meeting specified financial
goals, (B) a change of control of the Company or (C) the occurrence of
other specified events; (vii) to determine the circumstances under which
shares of Common Stock acquired pursuant to an Award may be subject to
repurchase by the Company; (viii) to determine the circumstances and
conditions subject to which any shares of Common Stock acquired pursuant to
an Award may be sold or otherwise transferred, including, without
limitation, the circumstances and conditions subject to which a proposed
sale of shares of Common Stock acquired pursuant to an Award may be subject
to the Company's right of first refusal (as well as the terms and
conditions of any such right of first refusal); (ix) to determine the form
of consideration that may be used to purchase shares of Common Stock
pursuant to an Award (including the circumstances under which the Company's
issued and outstanding shares of Common Stock may be used by a Participant
to purchase the Common Stock subject to an Award); (x) to accelerate time
at which any or all restrictions imposed with respect to any shares of
Common Stock subject to an Award will lapse; and (xi) to establish any
other terms, restrictions and/or conditions applicable to any Award not
inconsistent with the provisions of the Plan.
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5.3. Interpretation. The Committee shall be authorized to interpret the Plan
and may, from time to time, adopt such rules and regulations, not inconsistent
with the provisions of the Plan, as it may deem advisable to carry out the
purposes of the Plan.
5.4. Finality. The interpretation and construction by the Committee of any
provision of the Plan, any Option and/or Award granted hereunder or any
agreement evidencing any such Option and/or Award shall be final and conclusive
upon all parties.
5.5. Voting. Members of the Committee may vote on any matter affecting the
administration of the Plan or the granting of Options and/or Awards under the
Plan.
5.6. Expenses, Etc. All expenses and liabilities incurred by the Committee in
the administration of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants or other persons in connection with
the administration of the Plan. The Company, and its officers and directors,
shall be entitled to rely upon the advice, opinions or valuations of any such
persons.
5.7. Indemnification. Neither the members of the Board of Directors nor any
member of the Committee shall be liable for any act, omission, or determination
taken or made in good faith with respect to the Plan or any Options or Awards
granted under it, and members of the Board of Directors and the Committee shall
be entitled to indemnification and reimbursement by the Company in respect of
any claim, loss, damage, or expense (including attorneys' fees, the costs of
settling any suit, provided such settlement is approved by independent legal
counsel selected by the Company, and amounts paid in satisfaction of a
judgment, except a judgment based on a finding of bad faith) arising therefrom
to the full extent permitted by law.
Section 6. Terms and Conditions of Options.
6.1. ISOs. The terms and conditions of each ISO granted under the Plan shall
be specified by the Committee and shall be set forth in an ISO agreement
between the Company and the Participant in such form as the Committee shall
approve. The terms and conditions of each ISO shall be such that each ISO
issued hereunder shall constitute and shall be treated as an "incentive stock
option" as defined in Section 422(b) of the Code. The terms and conditions of
any ISO granted hereunder need not be identical to those of any other ISO
granted hereunder.
The terms and conditions of each ISO shall include the following:
(a) The option price shall be fixed by the Committee but shall in no
event be less than 100% (or 110% in the case of an Employee referred to in
Section 4.3(b) hereof) of the fair market value of the shares of Common
Stock subject to the ISO on the date the ISO is granted. For purposes of
the Plan, the fair market value per share of Common Stock as of any day
shall mean the average of the closing prices of sales of shares of Common
Stock on all national securities exchanges on which the Common Stock may at
the time be listed or, if there shall have been no sales on any such day,
the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day the Common Stock shall
not be so listed, the average of the representative bid and asked prices
quoted in the NASDAQ system as of 3:30 p.m., New York time, on such day,
or, if on any day the Common Stock shall not be quoted in the NASDAQ
system, the average of the high and low bid and asked prices on such day in
the over-the-counter market as reported by National Quotation Bureau
Incorporated, or any similar successor organization. If at any time the
Common Stock is not listed on any national securities exchange or quoted in
the NASDAQ system or the over-the-counter market, the fair market value of
the shares of Common Stock subject to an Option on the date the ISO is
granted shall be the fair market value thereof determined in good faith by
the Board of Directors. The fair market value of Common Stock subject to an
ISO shall be determined without regard to any restriction other than a
restriction which, by its terms, will never lapse.
(b) ISOs, by their terms, shall not be transferable otherwise than by
will or the laws of descent and distribution, and, during an Optionee's
lifetime, an ISO shall be exercisable only by the Optionee.
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(c) All ISOs must be granted within 10 years of the earlier of the date
the Plan is adopted or the date the Plan is approved by the shareholders of
the Company. The Committee shall fix the term of all ISOs granted pursuant
to the Plan (including the date on which such ISO shall expire and
terminate), provided, however, that such term shall in no event exceed ten
years from the date on which such ISO is granted (or, in the case of an ISO
granted to an Employee referred to in Section 4.3(b) hereof, such term
shall in no event exceed five years from the date on which such ISO is
granted). Each ISO shall be exercisable in such amount or amounts, under
such conditions and at such times or intervals or in such installments as
shall be determined by the Committee in its sole discretion.
(d) To the extent that the Company or any Parent or Subsidiary of the
Company is required to withhold any Federal, state or local taxes in
respect of any compensation income realized by any Participant as a result
of any "disqualifying disposition" of any shares of Common Stock acquired
upon exercise of an ISO granted hereunder, the Company shall deduct from
any payments of any kind otherwise due to such Participant the aggregate
amount of such Federal, state or local taxes required to be so withheld or,
if such payments are insufficient to satisfy such Federal, state or local
taxes, such Participant will be required to pay to the Company, or make
other arrangements satisfactory to the Company regarding payment to the
Company of, the aggregate amount of any such taxes. All matters with
respect to the total amount of taxes to be withheld in respect of any such
compensation income shall be determined by the Board of Directors in its
sole discretion.
(e) In the sole discretion of the Committee the terms and conditions of
any ISO may (but need not) include any of the following provisions:
(i) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis
for any reason other than as a result of his death or "disability"
(within the meaning of Section 22(e)(3) of the Code), the unexercised
portion of any ISO held by such Participant at that time may only be
exercised within three (3) months after the date on which the
Participant ceased to be so employed, and only to the extent that the
Participant could have otherwise exercised such ISO as of the date on
which he ceased to be so employed.
(ii) In the event a Participant shall cease to be employed by the
Company or any Parent or Subsidiary of the Company on a full-time basis
by reason of his "disability" (within the meaning of Section 22(e)(3)
of the Code), the unexercised portion of any ISO held by such
Participant at that time may only be exercised within one year after
the date on which the Participant ceased to be so employed, and only to
the extent that the Participant could have otherwise exercised such ISO
as of the date on which he ceased to be so employed.
(iii) In the event a Participant shall die while in the full-time
employ of the Company or a Parent or Subsidiary of the Company (or
within a period of three (3) months after ceasing to be an Employee for
any reason other than his "disability" or within a period of one year
after ceasing to be an Employee by reason of such "disability"), the
unexercised portion of any ISO held by such Participant at the time of
his death may only be exercised within one year after the date of such
Participant's death, and only to the extent that the Participant could
have otherwise exercised such ISO at the time of his death. In such
event, such ISO may be exercised by the executor or administrator of
the Participant's estate or by any person or persons who shall have
acquired the ISO directly from the Participant by bequest or
inheritance.
(f) No Option granted hereunder shall qualify as an ISO unless the Plan
is approved by the shareholders of the Company within 12 months before or
after the date the Plan is adopted by the Board of Directors.
6.2. Non-Qualified Options. The terms and conditions of each Non-Qualified
Option granted under the Plan shall be specified by the Committee, in its sole
discretion, and shall be set forth in a written option agreement between the
Company and the Participant in such form as the Committee shall approve. The
terms and conditions of each Non-Qualified Option will be such (and each Non-
Qualified Option Agreement shall
B-5
expressly so state) that each Non-Qualified Option issued hereunder shall not
constitute nor be treated as an "incentive stock option" as defined in Section
422(b) of the Code but will be a "non-qualified stock option" for Federal,
state and local income tax purposes. The terms and conditions of any Non-
Qualified Option granted hereunder need not be identical to those of any other
Non-Qualified Option granted hereunder.
The terms and conditions of each Non-Qualified Option Agreement shall include
the following:
(a) The option (exercise) price shall be fixed by the Committee and may
be equal to, more than or less than 100% of the fair market value of the
shares of Common Stock subject to the Non-Qualified Option on the date such
Non-Qualified Option is granted, provided, however, that the option
(exercise) price shall not be less than the par value of such shares of
Common Stock.
(b) The Committee shall fix the term of all Non-Qualified Options granted
pursuant to the Plan (including the date on which such Non-Qualified Option
shall expire and terminate). Each Non-Qualified Option shall be exercisable
in such amount or amounts, under such conditions (including provisions
governing the rights to exercise such Non-Qualified Option), and at such
times or intervals or in such installments as shall be determined by the
Committee in its sole discretion.
(c) Except as otherwise provided in an individual Option Agreement, Non-
Qualified Options shall not be transferable otherwise than by will or the
laws of descent and distribution, or a domestic relations order, and during
a Participant's lifetime a Non-Qualified Option shall be exercisable only
by the Participant or an alternate payee under a domestic relations order.
(d) To the extent that the Company is required to withhold any Federal,
state or local taxes in respect of any compensation income realized by any
Participant in respect of a Non-Qualified Option granted hereunder or in
respect of any shares of Common Stock acquired upon exercise of a Non-
Qualified Option, the Company shall deduct from any payments of any kind
otherwise due to such Participant the aggregate amount of such Federal,
state or local taxes required to be so withheld or, if such payments are
insufficient to satisfy such Federal, state or local taxes, or if no such
payments are due or to become due to such Participant, then, such
Participant will be required to pay to the Company, or make other
arrangements satisfactory to the Company (including, with prior Committee
approval, use of a promissory note in favor of the Company) regarding
payment to the Company of, the aggregate amount of any such taxes. All
matters with respect to the total amount of taxes to be withheld in respect
of any such compensation income shall be determined by the Board of
Directors in its sole discretion.
Section 7. Terms and Conditions of Awards. The terms and conditions of each
Award granted under the Plan shall be specified by the Committee, in its sole
discretion, and shall be set forth in a written agreement between the
Participant and the Company, in such form as the Committee shall approve. The
terms and provisions of any Award granted hereunder need not be identical to
those of any other Award granted hereunder.
The terms and conditions of each Award shall include the following:
(a) The amount, if any, to be paid by a Participant to acquire the shares
of Common Stock pursuant to an Award shall be fixed by the Board of
Directors (or the Committee).
(b) Each Award shall contain such vesting provisions, such transfer
restrictions and such other restrictions and conditions as the Committee,
in its sole discretion, may determine, including, without limitation, the
circumstances under which the Company shall have the right and option to
repurchase shares of Common Stock acquired pursuant to an Award.
(c) Stock certificates representing Common Stock acquired pursuant to an
Award shall bear a legend referring to the restrictions imposed on such
Stock and such other matters as the Committee may determine.
(d) To the extent that the Company is required to withhold any Federal,
state or local taxes in respect of any compensation income realized by the
Participant in respect of an Award granted hereunder,
B-6
or in respect of any shares acquired pursuant to an Award, or in respect of
the vesting of any such shares of Common Stock, then the Company shall
deduct from any payments of any kind otherwise due to such Participant the
aggregate amount of such Federal, state or local taxes required to be so
withheld or, if such payments are insufficient to satisfy such Federal,
state or local taxes, or if no such payments are due or to become due to
such Participant, then, such Participant will be required to pay to the
Company, or make other arrangements satisfactory to the Company regarding
payment to the Company of, the aggregate amount of any such taxes. All
matters with respect to the total amount of taxes to be withheld in respect
of any such compensation income shall be determined by the Committee in its
sole discretion.
Section 8. Adjustments. In the event that, after the adoption of the Plan by
the Board of Directors, the outstanding shares of the Company's Common Stock
shall be increased or decreased or changed into or exchanged for a different
number or kind of shares of stock or other securities of the Company or of
another corporation through reorganization, merger or consolidation,
recapitalization, reclassification, stock split, split-up, combination or
exchange of shares or declaration of any dividends payable in Common Stock, the
Board of Directors shall appropriately adjust (i) the number of shares of
Common Stock (and the option price per share) subject to the unexercised
portion of any outstanding Option (to the nearest possible full share),
provided, however, that the limitations of Section 424 of the Code shall apply
with respect to adjustments made to ISOs; (ii) the number of shares of Common
Stock to be acquired pursuant to an Award which have not become vested, and
(iii) the number of shares of Common Stock for which Options and/or Awards may
be granted under the Plan, as set forth in Section 4.1 hereof, and such
adjustments shall be effective and binding for all purposes of the Plan.
Section 9. Effect of the Plan on Employment Relationship. Neither the Plan
nor any Option and/or Award granted hereunder to a Participant shall be
construed as conferring upon such Participant any right to continue in the
employ of (or otherwise provide services to) the Company or any Subsidiary or
Parent thereof, or limit in any respect the right of the Company or any
Subsidiary or Parent thereof to terminate such Participant's employment or
other relationship with the Company or any Subsidiary or Parent, as the case
may be, at any time.
Section 10. Amendment of the Plan. The Committee or Board of Directors may
amend or suspend the Plan or any portion thereof at any time, provided such
amendment is made with stockholder approval if such approval is necessary to
comply with any tax or regulatory requirement, including for these purposes any
approval which is a requirement for ISO treatment or, if applicable once any
equity securities of the Company become registered under Section 12 of the
Exchange Act, for exemptive relief under Section 16(b) of the Exchange Act or
which is a requirement for the performance-based compensation exception under
Code Section 162(m). The Committee in its sole discretion may amend the Plan so
as to conform with local rules and regulations subject to any provisions to the
contrary specified herein.
Section 11. Amendment of an Option or Award Agreement. In its sole and
complete discretion, the Committee may at any time amend any Option or Award
Agreement for the following reasons: (i) additions and/or changes to the Code,
any federal or state securities law, or other law or regulations applicable to
the Option or Award, are made, and such additions and/or changes have some
effect on the Option or Award; or (ii) any other event not described in clause
(i) occurs and the Participant gives his or her consent to such amendment,
provided however, except for capital adjustments described in Section 8, the
Committee may not reduce the exercise price of an Option or Award.
Section 12. Exemption from Computation of Compensation for Other Purposes. By
acceptance of an applicable Option or Award, subject to the conditions of such
Option or Award, each Participant shall be considered in agreement that all
shares sold or awarded and all Options granted under this Plan shall be
considered special incentive compensation and will be exempt from inclusion as
"wages" or "salary" in pension, retirement, life insurance, and other employee
benefits arrangements of the Company, except as determined otherwise by the
Company. In addition, each beneficiary of a deceased Participant shall be in
B-7
agreement that all such Options and Awards will be exempt from inclusion in
"wages" or "salary" for purposes of calculating benefits of any life insurance
coverage sponsored by the Company.
Section 13. Listing, Registration and Other Legal Compliance. No Options,
Awards or shares of the Common Stock shall be required to be issued or granted
under the Plan unless legal counsel to the Company shall be satisfied that such
issuance or grant will be in compliance with all applicable federal and state
securities laws and regulations and any other applicable laws or regulations.
The Committee may require, as a condition of any payment or share issuance,
that certain agreements, undertakings, representations, certificates, and/or
information, as the Committee may deem necessary or advisable, be executed or
provided to the Company to assure compliance with all such applicable laws or
regulations. Any certificates for shares of Common Stock delivered under the
Plan may be subject to such stock-transfer orders and such other restrictions
as the Committee may deem advisable under the rules, regulations, or other
requirements of the Securities and Exchange Commission, any stock exchange upon
which the Common Stock is then listed, and any applicable federal or state
securities law. In addition, if, at any time specified herein (or in any
Agreement or otherwise) for (a) the making of any Option or Award, or the
making of any determination, (b) the issuance or other distribution of Common
Stock, or (c) the payment of amounts to or through a Participant with respect
to any Option or Award, any law, rule, regulation, or other requirement of any
governmental authority or agency shall require the Company, any affiliate, or
any Participant (or any estate, designated beneficiary, or other legal
representative thereof) to take any action in connection with any such
determination, any such shares to be issued or distributed, any such payment,
or the making of any such determination, as the case may be, shall be deferred
until such required action is taken.
Section 14. Rights as Stockholder. Subject to the Award provisions, no
Participant or beneficiary shall be deemed a stockholder of the Company nor
have any rights as such with respect to any shares to be provided under the
Plan until he or she has become the holder of such shares. Notwithstanding the
aforementioned, with respect to restricted stock Awards under this Plan, the
Participant or beneficiary of such Award shall be deemed the owner of such
shares provided herein. As such, unless contrary to the provisions herein or in
any such related Agreement, such stockholder shall be entitled to full voting,
dividend and distribution rights as provided any other Company stockholder for
as long as the Participant continues to be deemed the owner of such stock.
Section 15. Construction of the Plan. The Plan, and its rules, rights,
agreements and regulations, shall be governed, construed, interpreted and
administered solely in accordance with the laws of the state of Delaware. In
the event any provision of the Plan shall be held invalid, illegal or
unenforceable, in whole or in part, for any reason, such determination shall
not affect the validity, legality or enforceability of any remaining provision,
portion of provision or the Plan overall, which shall remain in full force and
effect as if the Plan had been absent the invalid, illegal or unenforceable
provision or portion thereof.
Section 16. Termination of the Plan. The Board of Directors may terminate the
Plan at any time. Unless the Plan shall theretofore have been terminated by the
Board of Directors, the Plan shall terminate ten years after the date of its
initial adoption by the Board of Directors. No Option and/or Award may be
granted hereunder after termination of the Plan. The termination or amendment
of the Plan shall not alter or impair any rights or obligations under any
Option and/or Award theretofore granted under the Plan.
Section 17. Effective Date of the Plan. The Plan shall be effective as of May
15, 2001, the date on which the Plan, as amended, was adopted by the
Shareholders of the Company.
B-8
AIRSPAN NETWORKS INC.
PROXY
for Annual Meeting to be held May 15, 2001
The undersigned hereby appoints Eric Stonestrom and Matthew Desch, and each
of them, with full power of substitution, his or her Proxies to represent and
vote, as designated below, all shares of voting stock of Airspan Networks Inc.
registered in the name of the undersigned at the 2001 Annual Meeting of
Shareholders of the Company to be held at the Company's headquarters, 13450 West
Sunrise Boulevard, Suite 430, Sunrise, FL 33323, at 1:00 p.m., on Tuesday, May
15, 2001, and at any adjournment thereof. The undersigned hereby revokes all
proxies previously granted with respect to such Annual Meeting.
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. FOLD AND DETACH HERE .
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Please mark [X]
your votes as
indicated in
this example.
The Board of Directors recommends that you vote "FOR" each proposal
FOR all nominees listed
below (except those whose WITHHOLD AUTHORITY
names have been written on to vote for all nominees
the line below) listed below
1. Elect Directors. [_] [_]
Nominees: Matthew J. Desch Eric D. Stonestrom David A. Twyver
Thomas S. Huseby Ovid Santoro H. Berry Cash
Guillermo Heredia
- ------------------------------------------------------------------------------
2. Proposal to ratify, confirm and approve an amendment to the Company's
1998 Stock Option Restricted Stock Plan to increase the number of shares
reserved for grant thereunder from 4,591,666 to 6,091,666.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Other Matters. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL SPECIFICALLY IDENTIFIED ABOVE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
_________
|
|
|
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_______________________________ _____________________ Date: _____________, 2001
PLEASE DATE AND SIGN ABOVE exactly as name appears above, indicating where
proper, official position or representative capacity. For stock held in joint
tenancy, each joint owner should sign.
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. FOLD AND DETACH HERE .