SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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SpectraSite Holdings, Inc.
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Spectrasite Logo
To the Stockholders of SpectraSite Holdings, Inc.
You are invited to attend the Annual Meeting of Stockholders of SpectraSite
Holdings, Inc. to be held at the offices of SpectraSite Holdings, Inc., 400
Regency Forest Drive, Cary, NC 27511, on May 28, 2002 at 10:00 a.m., local time.
The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement explain the matters to be voted on at the meeting. Please read the
enclosed Notice and Proxy Statement so you will be informed about the business
to come before the meeting. Your vote is important, regardless of the number of
shares you own. On behalf of the Board of Directors, I urge you to mark, sign
and return the enclosed proxy card as soon as possible, even if you plan to
attend the Annual Meeting. You may, of course, revoke your proxy by notice in
writing to SpectraSite's Secretary at any time before the proxy is voted.
Sincerely,
/s/STEPHEN CLARK
Stephen H. Clark
President and Chief Executive Officer
SPECTRASITE HOLDINGS, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 28, 2002
To the Stockholders of SpectraSite Holdings, Inc.
The Annual Meeting of the holders of common stock of SpectraSite Holdings,
Inc. will be held at the offices of SpectraSite Holdings, Inc., 400 Regency
Forest Drive, Cary, NC 27511, on May 28, 2002 at 10:00 a.m., local time:
1. To elect nine members of the Board of Directors to serve until the next
Annual Meeting of Stockholders or until their successors are duly
elected and qualified;
2. To approve an amendment to the Amended and Restated Stock Incentive
Plan providing for automatic annual increases in the maximum number of
shares of our common stock available for issuance thereunder;
3. To approve an amendment to the Employee Stock Purchase Plan providing
for an increase in the maximum number of shares of our common stock
available for issuance thereunder from 1,000,000 to 3,000,000;
4. To ratify the appointment of Ernst & Young LLP, independent certified
public accountants, as the independent auditors for the year ending
December 31, 2002; and
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed March 29, 2002 as the record date for the
Annual Meeting with respect to this solicitation. Only holders of record of
SpectraSite's common stock at the close of business on that date are entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof as
described in the Proxy Statement.
SpectraSite's Annual Report to Stockholders for the year ended December 31,
2001 is enclosed.
By Order of the Board of Directors,
/s/ JOHN H. LYNCH
John H. Lynch
Secretary
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE AS PROMPTLY
AS POSSIBLE. A PROXY MAY BE REVOKED BY A STOCKHOLDER ANY TIME PRIOR TO ITS USE
AS SPECIFIED IN THE ENCLOSED PROXY STATEMENT.
SPECTRASITE HOLDINGS, INC.
PROXY STATEMENT
2002 ANNUAL MEETING OF STOCKHOLDERS
SOLICITATION OF PROXIES
The Board of Directors of SpectraSite Holdings, Inc. is furnishing this
Proxy Statement to solicit proxies for use at SpectraSite's Annual Meeting of
Stockholders, to be held on May 28, 2002 at 10:00 a.m., local time, at the
offices of SpectraSite Holdings, Inc., 400 Regency Forest Drive, Cary, NC 27511,
and at any adjournment of the meeting. Each valid proxy received in time will be
voted at the meeting according to the choice specified, if any. A proxy may be
revoked at any time before the proxy is voted as outlined below.
This Proxy Statement and the enclosed proxy card are first being sent for
delivery to SpectraSite stockholders on or about April 19, 2002. SpectraSite
will pay the cost of solicitation of proxies, including the reimbursement to
banks and brokers for reasonable expenses for sending proxy materials to their
principals.
The shares of common stock represented by valid proxies we receive in time
for the Annual Meeting will be voted as specified in such proxies. Valid proxies
include all proxy cards properly executed pursuant to this solicitation and not
later revoked. Voting your proxy by mail will not limit your right to vote at
the Annual Meeting if you later decide to attend in person. Executed but unvoted
proxies will be voted:
(1) FOR the election of the Board of Directors' nominees for directors;
(2) FOR the approval of an amendment to the Amended and Restated Stock
Incentive Plan providing for automatic annual increases in the maximum
number of shares of our common stock available for issuance
thereunder;
(3) FOR the approval of an amendment to the Employee Stock Purchase Plan
providing for an increase in the maximum number of shares of our
common stock available for issuance thereunder from 1,000,000 to
3,000,000; and
(4) FOR the ratification of the appointment of Ernst & Young LLP,
independent certified public accountants, as SpectraSite's independent
auditors for the year ending December 31, 2002.
If any other matters properly come before the Annual Meeting, the persons
named on the proxies will, unless the stockholder otherwise specifies in the
proxy, vote upon such matters in accordance with their best judgment.
VOTING SECURITIES
SpectraSite has one class of outstanding voting securities, its common
stock, $.001 par value per share. SpectraSite has two classes of authorized
common stock which are identical in all respects, except that one class is
non-voting. If a stockholder is deemed a regulated entity under the Bank Holding
Company Act of 1956, as amended, its shares of common stock over 5% of the total
issued and outstanding common stock will become non-voting until transferred to
a non-regulated entity. A portion of the shares held by affiliates of Canadian
Imperial Bank of Commerce are non-voting while owned by such affiliates. As of
March 29, 2002, there were 154,015,469 shares of common stock issued, of which
152,716,242 are entitled to vote at the Annual Meeting.
Only holders of record of shares of voting common stock at the close of
business on March 29, 2002, which the Board of Directors has fixed as the record
date, are entitled to vote at the meeting.
Each share of voting common stock is entitled to one vote. The presence in
person or by proxy of holders of a majority of the issued and outstanding shares
of common stock entitled to vote at the Annual Meeting will constitute a quorum.
The Board of Directors nominees who receive the highest number of votes will be
elected to serve on the Board until the next Annual Meeting of Stockholders or
until their respective successors have been elected and qualified. The
affirmative vote of a majority of the shares of the common stock present at the
Annual Meeting in person or by proxy, and voting on the matter, is required for
approval of Proposal 2, Proposal 3 and Proposal 4.
Stockholders voting by proxy may elect to vote for all nine nominees as a
slate, or may elect to vote for certain nominees but not others, at their
discretion. However, a stockholder voting by proxy who elects to vote for fewer
than all nine nominees must specify, in writing on the proxy where indicated,
the name or names of the nominee or nominees for whom such stockholder has
elected to refrain from voting. If no specification is indicated, the shares
will be voted in accordance with the recommendation of the Board with respect to
each matter submitted to our stockholders for approval. The Board of Directors
recommends a vote "FOR" each nominee, as well as a vote "FOR" Proposal Number 2,
Proposal Number 3 and Proposal Number 4.
In determining whether a proposal is approved, an abstention would have the
effect of a vote against the applicable proposal. Broker non-votes will not be
considered in determining whether the Proposals are approved. A broker non-vote
occurs when the nominee of a beneficial owner with the power to vote on at least
one matter does not vote on another matter because the nominee does not have
discretionary voting power and has not received instructions from the beneficial
owner with respect to such matter.
VOTING BY PROXY
If a stockholder is a corporation or partnership, the accompanying proxy
card must be signed in the full corporate or partnership name by a duly
authorized person. If the proxy card is signed pursuant to a power of attorney
or by an executor, administrator, trustee or guardian, the signer's full title
must be given and a certificate or other evidence of appointment must be
furnished. If shares are owned jointly, each joint owner must sign the proxy
card.
Any proxy duly given pursuant to this solicitation may be revoked by the
stockholder, at any time prior to the voting of the proxy, by written notice to
SpectraSite's Secretary, either by a later dated proxy signed and returned by
mail or by attending the Annual Meeting and voting in person. Attendance at the
Annual Meeting will not in and of itself constitute a revocation of a proxy.
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 SpectraSite's Proxy Statement or Annual Report to
Stockholders may have been sent to multiple stockholders in each household.
SpectraSite will promptly deliver a separate copy of either document to any
stockholder upon written or oral request to Investor Relations Department,
SpectraSite Holdings, Inc., 100 Regency Forest Drive, Suite 400, Cary, NC 27511,
telephone: (919) 468-0112. Any stockholder who wants to receive separate copies
of the Proxy Statement or Annual Report to Stockholders in the future, or any
stockholder who is receiving multiple copies and would like to receive only one
copy per household, should contact the stockholder's bank, broker, or other
nominee record holder, or the stockholder may contact SpectraSite at the above
address and phone number.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors currently consists of ten directors. Michael Stone
has informed the Company that he does not wish to stand for re-election at the
Annual Meeting. The Board of Directors has determined to reduce the number of
directors from ten to nine. Our nine remaining current directors are all
standing for re-election at the Annual Meeting.
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The Board of Directors had four regular meetings, one special meeting and
approved one action by unanimous written consent in 2001. During 2001, the
Executive Committee held one meeting and approved four actions by unanimous
written consent. The members of the Executive Committee currently are Stephen
Clark, Thomas McInerney, Steven Shindler, Lawrence Sorrel and Michael Stone.
The Board of Directors also has a Nominating Committee, an Audit Committee
and a Compensation Committee. The Nominating Committee was organized for the
purpose of identifying, reviewing and recommending qualified director candidates
to the board, to review qualifications of such candidates and to recommend to
the Board for consideration such candidates for membership as a director or to
fill vacancies that may arise from time to time. The Nominating Committee did
not take any formal action with respect to new director nominees in 2001. All of
the Company's Directors other than Mr. Stone are standing for re-election. See
"Certain Transactions -- Stockholders' Agreement" for further information
regarding voting agreements in place for the election of Directors. The members
of the Nominating Committee currently are Stephen Clark, Timothy Donahue and
Lawrence Sorrel.
The Audit Committee is responsible for oversight of the quality and
integrity of the Company's accounting, auditing and reporting practices, and as
part of this responsibility the Audit Committee:
- approves the selection of the independent auditors for SpectraSite;
- reviews the scope and results of the annual audit;
- approves the services to be performed by the independent auditors;
- reviews the performance and fees of the independent auditors;
- reviews the independence of the auditors;
- reviews the adequacy of the system of internal accounting controls;
- reviews the scope and results of internal auditing procedures; and
- reviews related party transactions.
The Board of Directors adopted a written Audit Committee charter. A copy of
this charter was included as an appendix to the Proxy Statement for the Annual
Meeting of Stockholders held in 2001.
The aggregate fees billed by the Company's independent auditors, Ernst &
Young LLP, during 2001 were as follows:
FINANCIAL INFORMATION
SYSTEM DESIGN AND ALL OTHER
AUDIT FEES IMPLEMENTATION FEES FEES(1)
---------- --------------------- ---------
$245,500 $0 $625,537
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(1) Includes fees for tax compliance, accounting consultations and SEC
registration statements.
The Audit Committee held four meetings and approved one action by unanimous
written consent in 2001. The members of the Audit Committee currently are James
Matthews, Michael Price and Michael Stone. Mr. Matthews is a managing member or
general partner of the respective sole general partners of Welsh, Carson,
Anderson & Stowe VIII, L.P. and other associated investment partnerships. The
Company believes that all of the members of the Audit Committee are independent
within the meaning of the Nasdaq Listing Standards. Nevertheless, the Company's
Board of Directors has determined that if Welsh Carson were to be considered an
affiliate of the Company and that Mr. Matthews therefore were not independent
within the meaning of the Nasdaq Listing Standards, Mr. Matthews' membership on
the Committee, in light of his financial experience, knowledge of the
communications services industry and knowledge of the Company, is in the best
interests of the Company and its shareholders.
The Compensation Committee, to the extent not otherwise approved by the
full Board of Directors:
- reviews, recommends and approves changes to SpectraSite's compensation
policies and benefits programs
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- administers SpectraSite's stock plans, including approval of stock grants
to executive officers and directors and certain other stock option
grants; and
- otherwise ensures that compensation levels are consistent with
SpectraSite's best interests and are implemented in an appropriate
manner.
The Compensation Committee held four meetings and approved three actions by
unanimous written consent in 2001. The members of the Compensation Committee
currently are Thomas McInerney, Lawrence Sorrel, Michael Stone and Timothy
Donahue.
During 2001, each director attended at least 75% of the total number of
meetings of the Board of Directors and meetings of the committees on which such
director served, except that Thomas McInerney did not attend two meetings of the
Board of Directors.
The following information regarding the nominees, their occupations,
employment history and directorships in certain companies is as reported by the
respective nominees.
Lawrence B. Sorrel, 43, has been Chairman of the Board of SpectraSite
Holdings since April 1999. Mr. Sorrel joined Welsh, Carson, Anderson & Stowe in
1998 and is a managing member or general partner of the respective sole general
partners of Welsh, Carson, Anderson & Stowe VIII, L.P. and other associated
investment partnerships. Prior to joining Welsh, Carson, Mr. Sorrel spent 12
years at Morgan Stanley & Co., where he was a Managing Director and senior
executive in Morgan Stanley's private equity investment business. Mr. Sorrel is
a director of Emmis Communications, Westminster Healthcare, Valor
Telecommunications and FirstMark Communications.
Stephen H. Clark, 57, is President and Chief Executive Officer and a
director of SpectraSite Holdings. He has been a director of SpectraSite since
its formation in May 1997. Mr. Clark has 23 years of general management
experience in high growth, start-up companies in the communications, technology
and manufacturing sectors. In 1994, he co-founded PCX Corporation, a
manufacturer of electrical distribution systems. Prior to starting PCX, Mr.
Clark co-founded and served as Chairman and President of Margaux, a supplier of
building automation systems. Prior to starting Margaux, he worked at several
technology based, start-up companies. Mr. Clark has a B.A. in physics and an
M.B.A. from the University of Colorado.
Timothy M. Donahue, 53, has been a director of SpectraSite Holdings since
April 1999. Mr. Donahue has served as President and Chief Executive Officer of
Nextel Communications, Inc. since July 1999, and as a director of Nextel since
June 1996. Prior to being named Chief Executive Officer, Mr. Donahue served as
President and Chief Operating Officer since February 1996. From 1986 to January
1996, Mr. Donahue held various senior management positions with AT&T Wireless
Services, Inc., including Regional President for the Northeast. Mr. Donahue
serves as a director of NII Holdings, Inc., Nextel Partners, Inc. and Eastman
Kodak Company.
James R. Matthews, 34, has been a director of SpectraSite Holdings since
August 1998. Mr. Matthews joined Welsh, Carson, Anderson & Stowe in 2000 and is
a managing member or general partner of the respective sole general partners of
Welsh, Carson, Anderson & Stowe VIII, L.P. and other associated investment
partnerships. Previously, he was a General Partner at Whitney & Co., where he
worked for six years and focused on the communications services industry.
Earlier, he was with Gleacher & Co. and Salomon Brothers Inc. Mr. Matthews
serves as a director of Centennial Cellular Corp. and Headstrong, Inc.
Thomas E. McInerney, 60, has been a director of SpectraSite Holdings since
April 1999. Mr. McInerney joined Welsh, Carson, Anderson & Stowe in 1986 and is
a managing member or general partner of the respective sole general partners of
Welsh, Carson, Anderson & Stowe VIII, L.P. and other associated investment
partnerships. Formerly, he co-founded and served as President and Chief
Executive Officer of Dama Telecommunications Corp., a telecommunications
services company. Earlier, he was Group Vice President -- Financial Services at
ADP and Senior Vice President -- Operations at the American Stock Exchange. Mr.
McInerney is a director of, among others, Centennial Cellular Corp., The
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BISYS Group, Attachmate Corp., Global Knowledge Network, BTI Telecom Corp. and
Savvis Communications Corp.
Calvin J. Payne, 49, is Executive Vice President and a director of
SpectraSite Holdings and President of the Network Services Division. Mr. Payne
was Co-founder, Chairman of the Board and Chief Executive Officer of Westower
Corporation and had been a director of Westower or its predecessor since 1990.
Prior to founding Westower Corporation, Mr. Payne acquired experience in all
aspects of the construction of steel communications towers. Mr. Payne, an
award-winning tower designer, has engineered over 600 towers. Mr. Payne is a
graduate of the University of British Columbia and the University of Western
Australia.
Michael J. Price, 44, has been a director of SpectraSite Holdings since
April 1999. He is Vice Chairman of Evercore Partners, a leading advisory and
private equity firm. He was Co-Chairman of FirstMark Communications Europe SA, a
broadband wireless telecommunications company in Europe from 1998 to 2001. Prior
to that he worked at Lazard Freres & Co. LLC, starting in 1987, serving first as
a Vice President and then as a Managing Director, where he led their global
technology and telecommunications practice. Mr. Price is a director of Amdocs
Limited, PeoplePC Inc. and FirstMark.
Steven M. Shindler, 39, has been a director of SpectraSite Holdings since
April 1999. Mr. Shindler was appointed Chief Executive Officer of Nextel
International, Inc. effective in March 2000. He formerly served as Executive
Vice President and Chief Financial Officer of Nextel Communications, Inc. from
May 1996 through November 2000. Prior to joining Nextel, he was the managing
director of communications finance with Toronto Dominion Bank. Mr. Shindler also
serves as a director of Nextel International.
Edgar L. Reynolds, 54, has been a director of SpectraSite since 2001. Mr.
Reynolds has served as President of Network Operations for Cingular Wireless
since October 2000. From January 2000 to October 2000, Mr. Reynolds served as
President of BellSouth Mobility. Prior to that, Mr. Reynolds served as President
of BellSouth Mobility DCS and American Cellular Communications Corporation. Mr.
Reynolds also formerly served as Executive Vice President of BellSouth Cellular
Corporation from February 1997 to February 1998 and served as President of
BellSouth Wireless, Inc. from June 1996 to February 1997.
COMPENSATION OF DIRECTORS
Directors who are also officers of SpectraSite are not separately
compensated for their services as a director. Directors who are not also
officers do not receive cash compensation for their services. However, directors
are reimbursed for their expenses incurred in connection with attending meetings
of the Board or any committee on which they serve and are eligible to receive
awards under SpectraSite's Stock Incentive Plan.
EXECUTIVE OFFICERS
Information regarding the executive officers of SpectraSite who are not
directors is set forth below. Executive officers of SpectraSite are elected to
serve until they resign or are removed, or are otherwise disqualified to serve,
or until their successors are elected and qualified.
Timothy G. Biltz, 43, is Chief Operating Officer. Prior to joining
SpectraSite in August 1999, Mr. Biltz spent 10 years at Vanguard Cellular
Systems, Inc., most recently as Executive Vice President and Chief Operating
Officer. He joined Vanguard in 1989 as Vice President of Marketing and
Operations and was Executive Vice President and President of U.S. Wireless
Operations from November 1996 until May 1998 when he became Chief Operating
Officer. Mr. Biltz was instrumental in Vanguard's development from an initial
start-up to an enterprise with over 800,000 subscribers.
David P. Tomick, 50, is Executive Vice President and Chief Financial
Officer. Mr. Tomick joined SpectraSite in 1997. From 1994 to 1997, Mr. Tomick
was Chief Financial Officer of Masada Security, Inc., a company engaged in the
security monitoring business. From 1988 to 1994, he was Vice President --
Finance of Falcon Cable TV, a multiple system operator of cable television
systems, where he was responsible for debt management, mergers and acquisitions,
equity origination and investor relations. Prior
5
to 1988, he managed a team of corporate finance professionals focusing on the
communications industry for The First National Bank of Chicago. Mr. Tomick holds
an MBA from the Kellogg Graduate School of Management at Northwestern
University.
Richard J. Byrne, 44, is Executive Vice President of the Company and
President of the Tower Division. Prior to assuming his current position, Mr.
Byrne was Executive Vice President -- Business Development for SpectraSite.
Prior to joining SpectraSite in April 1999, Mr. Byrne served as the Director of
Business Development for Nextel Communications. He had primary responsibility
for the tower sale/lease-back and build-to-suit commitment. In addition, Mr.
Byrne was responsible for all carrier-to-carrier co-location agreements. Before
joining Nextel in 1997, Mr. Byrne held positions of increasing responsibility in
the System Development Group of AT&T Wireless Services. Prior to entering the
wireless communications industry, Mr. Byrne spent 15 years in the real-estate
industry. His work centered on property management, ownership and brokerage of
investment properties.
Dale A. Carey, 37, is Vice President of the Company and President of the
Building Division. Mr. Carey joined SpectraSite as Senior Vice President of
Services and Operations in February 2000 and assumed his current position in
July 2000. Prior to joining SpectraSite, Mr. Carey served as the Regional Vice
President and General Manager for the Pennsylvania Super System of Vanguard
Cellular Systems. Mr. Carey holds a B.A. in Urban Planning and Real Estate
Development from Temple University and an Associate Degree in Criminal Law from
York College.
Thomas A. Prestwood, 49, is Vice President of the Company and President of
the Broadcast Division. Mr. Prestwood joined SpectraSite in December 2001. Mr.
Prestwood has over 15 years of senior management experience and executive level
work in the telecommunications industry, most recently as Regional Vice
President for Telecorp PCS. Prior to joining Telecorp, Mr. Prestwood served as
an Executive Vice President for Highland Holdings and a Market Director for AT&T
Wireless Services. Mr. Prestwood was a Senior Vice President at Vanguard
Cellular Systems, Inc. from 1990 until the company was acquired by AT&T Wireless
in 1999.
Terry L. Armant, 53, is Senior Vice President -- Network Services. Prior to
joining SpectraSite in August 1998, Mr. Armant was Director -- System
Implementation at AT&T Wireless Services. In this position, he was responsible
for site acquisition, materials management, construction, equipment installation
and site management for the Northeast region of AT&T Wireless. From 1985 until
joining AT&T Wireless in 1992, Mr. Armant held senior management positions in
telecommunications turnkey development companies, US CommStruct and Fabrecom.
Melvin L. Asbury, 50, is Senior Vice President of Human Resources. Prior to
joining SpectraSite in July 2000, Mr. Asbury served as Senior Vice President of
Human Resources for Novant Health Inc., a regional health care company based in
North Carolina. Previously, Mr. Asbury served in corporate Human Resources
management positions with Exxon Mobil and Glaxo Wellcome. Mr. Asbury holds an
undergraduate degree in business from North Carolina Central University and
obtained his Masters in Industrial Relations from the Krannert Graduate School
of Management at Purdue University.
Brian B. Dietrich, 32, is Chief Information Officer. Mr. Dietrich joined
SpectraSite as Vice President of Property Management in November 1999 and
assumed his current position in July 2000. Prior to joining SpectraSite, Mr.
Dietrich served as a Manager for the management consulting firm of Pittiglio
Rabin Todd & McGrath from 1996 to 1999. From 1991 to 1996, Mr. Dietrich held
positions in marketing, sales and service operations, and consulting for
Honeywell International, Inc. Mr. Dietrich holds a B.S. in electrical
engineering from Michigan Technological University and a Masters in Management
from Northwestern University.
John H. Lynch, 44, is Vice President, General Counsel and Secretary. Prior
to joining SpectraSite in August 1999, Mr. Lynch served as General Counsel for
Qualex Inc., the wholly-owned photofinishing subsidiary of Eastman Kodak
Company. Before joining Qualex in 1989, Mr. Lynch practiced corporate and real
estate law in the Atlanta, Georgia offices of Wildman, Harrold, Allen, Dixon and
Branch.
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Mr. Lynch holds a B.A. in Economics and English from Ohio Wesleyan University,
an M.B.A. from Ohio State University, and a J.D. from Ohio State University.
Adam F. Stulberger, 34, is Chief Development Officer. Prior to joining
SpectraSite in April 2000, Mr. Stulberger was a Principal in the Media Group of
Morgan Stanley & Co. from 1999 to 2000 and a Vice President in the Media and
Telecommunications Group of Credit Suisse First Boston from 1996 to 1999. Mr.
Stulberger holds a B.A. in economics from Lafayette College and a J.D. from New
York University.
Daniel I. Hunt, 37, is Vice President -- Finance and Administration. Prior
to joining SpectraSite in April 1999, Mr. Hunt served as Director of Accounting
and Financial Reporting at Wavetek Wandel & Goltermann, Inc., a developer and
manufacturer of communications test equipment based in North Carolina and
Eningen, Germany. Previously, Mr. Hunt was Controller for Wandel & Goltermann
Technologies, Inc. Before joining Wandel & Goltermann, Mr. Hunt worked in the
audit and business consulting practice of Arthur Andersen. Mr. Hunt is a
certified public accountant and a graduate of Wake Forest University.
Steven C. Lilly, 32, is Vice President and Treasurer. Prior to joining
SpectraSite in July 1999, Mr. Lilly served as a Vice President in First Union
Corporation's loan syndications group where he was primarily responsible for
structuring and negotiating transactions for emerging telecommunications
companies, including wireless service providers, competitive local exchange
carriers and tower companies. Mr. Lilly is a graduate of Davidson College.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of forms submitted to SpectraSite during and with
respect to 2001, all executive officers, directors and 10% beneficial owners
filed reports pursuant to Section 16(a) of the Exchange Act on a timely basis.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation paid by
or incurred on behalf of SpectraSite to its Chief Executive Officer and four
other most highly compensated executive officers for the years ended December
31, 1999, 2000 and 2001.
LONG TERM
COMPENSATION AWARDS
------------------------
NUMBER OF
ANNUAL COMPENSATION SECURITIES
------------------------------------------ UNDERLYING
OTHER RESTRICTED OPTIONS/ ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ANNUAL($)(B) STOCK($)(C) SARS(#) COMPENSATION($)(D)
--------------------------- ---- --------- -------- ------------ ----------- ---------- -------------------
Stephen H. Clark................ 2001 375,000 300,000 -- -- 245,250 4,884
Chief Executive Officer 2000 323,077 325,000 -- -- 500,000 4,398
1999 219,006 150,000 -- -- 775,000 2,535
Timothy G. Biltz(a)............. 2001 300,284 270,000 -- -- 140,000 5,100
Chief Operating Officer 2000 260,000 200,000 -- -- 300,000 5,100
1999 89,000 50,000 17,609 -- 400,000 32,064
Adam F. Stulberger(a)........... 2001 265,269 127,768 60,238 -- 68,985 50,039
Chief Development Officer 2000 152,308 64,463 1,343,860 1,624,000 344,927 2,054
David P. Tomick................. 2001 228,654 89,725 -- -- 113,973 5,250
Chief Financial Officer 2000 219,615 77,150 -- -- 100,000 5,100
1999 187,921 77,360 -- -- 225,000 2,442
Richard J. Byrne(a)............. 2001 210,000 46,594 -- -- 62,000 5,250
Executive Vice President -- 2000 198,827 97,230 -- -- 150,000 5,100
President of the Tower
Division 1999 103,205 70,613 138,613 224,500 200,000 22,172
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(a) Mr. Biltz joined SpectraSite in August 1999, Mr. Stulberger joined
SpectraSite in April 2000 and Mr. Byrne joined SpectraSite in April 1999.
(b) The amounts indicated for Messrs. Biltz, Stulberger and Byrne in 1999 and
2000 reflect tax gross ups. The amount reported for Mr. Stulberger in 2001
consists of an expense allowance of $13,326 and a tax gross up of $46,912.
(c) Messrs. Stulberger and Byrne were granted 100,000 shares and 50,000 shares,
respectively, in connection with their employment. The restricted stock of
both Messrs. Stulberger and Byrne vests in four equal annual installments
beginning one year from date of grant. No dividends are paid on this
restricted stock and no other named executive officer holds shares of
restricted stock. As of December 31, 2001, Mr. Stulberger held 75,000 shares
of restricted common stock (that were not yet vested) with a fair market
value of $269,250 and Mr. Byrne held 25,000 shares of restricted common
stock (that were not yet vested) with a fair market value of $89,750.
(d) Amounts reported for 2001 include SpectraSite's contribution under its
401(k) plan of $4,884, $5,100, $3,284, $5,250 and $5,250 for Messrs. Clark,
Biltz, Stulberger, Tomick, and Byrne, respectively and a relocation and
housing allowance of $46,755 for Mr. Stulberger.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The table below provides information relating to stock option grants to the
executive officers named in the Summary Compensation Table above during the
fiscal year ended December 31, 2001.
All options listed in the table become exercisable upon the expiration of
the six month period following a change in control, or in certain circumstances
earlier. Unless a particular option grant provides otherwise, a change in
control occurs upon (i) any transaction in which all or substantially all of the
assets of SpectraSite Communications, Inc. are sold, leased or transferred,
other that to an affiliate of SpectraSite; (ii) the acquisition, other than by
an affiliate, of more than 50% of the total combined voting power of
SpectraSite's outstanding securities; (iii) a change in the composition of the
Board of Directors of SpectraSite that results in the current directors ceasing
to constitute a majority of the directors; (iv) a merger or consolidation of
SpectraSite with another entity; and (v) the liquidation or dissolution of
SpectraSite or SpectraSite Communications. However, in the case of clauses (iv)
and (v) above, a transaction in which the holders of SpectraSite Holdings'
capital stock immediately prior to the transaction continue to hold at least a
majority of the voting power of the surviving corporation does not constitute a
change in control.
The present value of the options granted was estimated on the date of grant
using the Black-Scholes option pricing model with the following assumptions:
dividend yield of 0.0%, volatility of 0.7, risk free interest rate of 5.0% and
expected option lives of seven years.
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO GRANT DATE
OPTIONS/SARS EMPLOYEES EXERCISE PRICE EXPIRATION PRESENT
NAME GRANTED(#) IN 2001 PER SHARE($) DATE VALUE($)
---- ------------ ------------ -------------- ---------- ----------
Stephen H. Clark......... 245,250 6.1 2.95 8/15/11 509,139
Timothy G. Biltz......... 140,000 3.5 2.95 8/15/11 290,640
Adam F. Stulberger....... 68,895 1.7 2.95 8/15/11 143,213
David P. Tomick.......... 73,973 1.8 2.95 8/15/11 207,460
40,000 1.0 7.37 7/18/11 153,468
Richard J. Byrne......... 62,000 1.5 2.95 8/15/11 128,712
AGGREGATED OPTIONS/SAR EXERCISES AND VALUE IN LAST FISCAL YEAR
The table below provides information as to the exercise of options during
the fiscal year ended December 31, 2001 and the number and value of unexercised
options held by the executive officers named in the Summary Compensation Table
above as of December 31, 2001.
8
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS/SARS AT FISCAL OPTIONS/SARS AT FISCAL
SHARES YEAR-END(#) YEAR-END($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
Stephen H. Clark..... -- -- 463,750 1,007,750 74,375 156,960
Timothy G. Biltz..... -- -- 275,000 565,000 -- 89,600
Adam F. Stulberger... -- -- 86,232 327,680 -- 44,150
David P. Tomick...... -- -- 182,364 301,474 39,375 47,343
Richard J. Byrne..... -- -- 97,500 275,500 -- 39,680
EMPLOYMENT AGREEMENTS
SpectraSite has entered into employment agreements with each of Messrs.
Clark, Tomick and Byrne effective April 20, 1999, and Mr. Biltz effective
January 1, 2001. The initial term of the employment agreements is five years,
with automatic one-year renewals unless either party gives written notice of
nonrenewal at least one year prior to the end of the term. The annual base
salaries for Messrs. Clark, Tomick, Byrne, and Biltz are determined pursuant to
their respective employment agreements, and they are eligible to receive annual
bonuses determined at the discretion of the Board of Directors. If their
employment is terminated as a result of their death, disability or termination
without cause, Messrs. Clark, Tomick, Byrne and Biltz will be entitled to
receive continued salary, average annual bonus and health benefits for a period
of 24 months and any options granted to Messrs. Clark, Tomick and Byrne in
connection with or prior to the effective date of their employment agreement
which are vested at the time of such termination shall remain exercisable until
the earlier of the end of such 24-month period and the tenth anniversary of such
option.
Messrs. Clark, Tomick, Byrne and Biltz have agreed that for a period of 24
months following the termination of their employment with SpectraSite they will
not:
- engage in, or own any interest in or perform any services for any
business which engages in, competition with SpectraSite;
- solicit management employees of SpectraSite or otherwise interfere with
the employment relationship between SpectraSite and its employees; or
- hire, engage or in any manner be associated with any supplier, contractor
or entity with a business relationship with SpectraSite, if such action
would have a material adverse effect on SpectraSite.
In connection with their employment agreements, Messrs. Clark, Tomick and
Byrne were granted options to purchase 775,000, 225,000 and 200,000 shares of
common stock, respectively. These options have a $5.00 exercise price and vest
20% on each of the first five anniversaries of the date of the respective
employment agreement.
In addition, in connection with his employment agreement with SpectraSite,
Mr. Byrne purchased 50,000 shares of common stock for a nominal amount. Mr.
Byrne's right to retain these shares of common stock vests in equal 25%
installments on each of the first four anniversaries of his employment
agreement. Vesting will accelerate upon the termination without cause or upon
death or disability. Mr. Byrne also received a bonus to pay income taxes
incurred in connection with these purchases of common stock.
SEVERANCE PLANS
Messrs. Clark, Tomick and Biltz are participants in SpectraSite's Executive
Severance Plan A. This plan generally provides that upon a termination of a
participant's employment by SpectraSite other than for cause or by the
participant for good reason, the participant will be entitled to continued
payments of
9
base salary and target bonus, as well as continued benefits, during the
twenty-four month period following such termination. In the event of such a
termination in contemplation of a change of control or in the two-year period
following a change in control, the twenty-four month period referred to above
shall be increased to thirty-six months. This extension will also occur in the
event that a participant terminates his employment during the thirteenth month
following a change of control. For this purpose, a change of control occurs upon
(i) the acquisition, other than by the principal stockholders of SpectraSite, of
more than 35% of the total combined voting power of SpectraSite's outstanding
securities and such principal stockholders own a lesser percentage of the voting
power of SpectraSite's outstanding securities than such acquiring person and
cease to have the ability to elect or designate for election a majority of
SpectraSite's Board of Directors; (ii) a change in the composition of the Board
of Directors of SpectraSite during any two-year period that results in the
current directors (or those directors approved by the Board of Directors)
ceasing to constitute a majority of the directors; (iii) a merger of
consolidation of SpectraSite with another entity unless the Company's
outstanding voting securities are exchanged for consideration including
securities representing a majority of the voting power of the surviving
corporation; or (iv) a sale of all or substantially all of SpectraSite's assets
other than to the principal stockholders of SpectraSite or persons controlled by
such stockholders. In the event of a termination resulting in rights under this
plan, a participant is entitled, at their election, to the benefits under this
plan or any other plan or agreement providing similar benefits, but not both.
Messrs. Stulberger and Byrne participate in SpectraSite's Executive
Severance Plan B. This plan provides benefits similar to those provided under
SpectraSite's Executive Severance Plan A described above, except that the
twenty-four month severance period is instead eighteen months for participants
having five or more years experience in their current or equivalent employment
positions, as determined by the Compensation Committee, and twelve months for
participants having less than five years of such experience. In addition, the
thirty-six month period described under SpectraSite's Executive Severance Plan A
is instead twenty-four months for all participants under this plan.
10
PERFORMANCE GRAPH
The following graph compares, for each of the years ending December 31,
2001 and 2000 and the period beginning on September 3, 1999, the date
SpectraSite's common stock first became publicly traded on the Nasdaq National
Market, and ending on December 31, 1999, the cumulative total return of the
common stock to (a) the cumulative total returns on the Nasdaq Composite Index
and (b) a peer group index, comprised of American Tower Corporation, Crown
Castle International Corp., Pinnacle Holdings, Inc. and SBA Communications
Corporation. The comparison assumes $100 was invested on September 3, 1999 in
SpectraSite's common stock and in each of the foregoing indices and that all
dividends were reinvested.
(PERFORMANCE GRAPH)
MEASUREMENT PERIOD
----------------------------------------
9/03/99 12/31/99 12/31/00 12/31/01
------- -------- -------- --------
SpectraSite................................. $100 $ 85.29 $103.92 $28.16
Nasdaq Composite Index...................... 100 100.18 50.66 39.99
Peer Group Index............................ 100 152.74 147.92 44.73
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is comprised of Messrs. Donahue, McInerney,
Sorrel and Stone. The Committee has responsibility to review, recommend and
approve changes to SpectraSite's compensation policies and benefits programs, to
administer SpectraSite's stock plans, including approval of stock grants to
executive officers and directors and certain other stock option grants, and
otherwise to ensure that the compensation philosophy is consistent with
SpectraSite's best interests and is implemented in an appropriate manner.
COMPENSATION PHILOSOPHY
SpectraSite's compensation philosophy is to (i) provide a competitive total
compensation package that allows it to attract and retain key executive and
employee talent that promotes its ability to accomplish its goals and (ii)
directly link compensation to improvements in its financial and operational
performance and increases in stockholder value, as measured by SpectraSite's
common stock price.
11
COMPENSATION PROGRAM
SpectraSite's compensation program for key employees emphasizes variable
compensation, primarily through performance-based grants of long-term,
equity-based incentives in the form of stock options. Salaries at all employee
levels are generally targeted at median market levels.
The Committee reviews compensation structure and total compensation levels
to ensure that management and key employee total compensation opportunities are
linked to SpectraSite's performance and stock price appreciation and keep pace
with SpectraSite's competition. The Committee believes that the base salary,
total cash compensation and stock appreciation opportunities for senior
management, as well as those of the general employee population, are consistent
with competitive market levels. Furthermore, the Company emphasizes the stock
incentive portion of its compensation packages in order to increase its ability
to attract and retain qualified executive officers.
The Committee believes that SpectraSite's status as a public company makes
the equity-based component of its compensation packages a strong element in its
ability to hire and retain the executives it needs to grow and prosper in a
business dominated by a number of strong national tower companies. The Committee
feels the use of stock options and performance-based bonuses encourages a
continuity of interests between stockholders and senior management. Because a
stock option's value is based on the market price of SpectraSite stock, in order
for SpectraSite executives to realize the value of their option awards they must
encourage and engage in activities which increase stockholder value. Conversely,
if SpectraSite performs poorly, senior management is directly affected as stock
options lose value and performance-based bonuses are not paid, lowering the
overall compensation package.
Base Salaries
The base salary of certain executive officers is determined by employment
agreements. In determining the base salary for an executive not covered by an
employment agreement, the Committee considers the officer's impact on the
organization, scope of responsibility, prior experience, past accomplishments
and data on prevailing compensation levels in relevant executive labor markets
as it determines appropriate salary levels. Rather than calculate a precise
formula to determine an officer's compensation, the Committee studies each
officer's contribution to his or her respective area of concentration and
responsibility, using the criteria listed above as a general framework for
consideration. The Committee believes the flexibility inherent in an approach
which allows it to evaluate each individual's particular situation before making
consideration determinations serves SpectraSite's interests by allowing the
Committee to focus on each individual's overall performance and contributions to
SpectraSite as a whole.
The Company has informed its senior management that no merit increases in
salary will be made in 2002.
Long-Term Incentives
SpectraSite's compensation packages for executive officers include stock
option awards and annual cash bonuses payable upon achievement of previously
stated performance targets, such as the improvement of earnings before interest,
taxes, depreciation and amortization. This allows the Committee to give
financial rewards for the achievement of high standards of business performance;
conversely, senior management risks the loss of significant compensation through
the failure to achieve these standards. For most executive officers, target cash
bonuses approximate 30% to 40% of base salary. Senior executive officers have
target cash bonuses at a higher salary percentage. In order to determine amounts
of stock option awards, the Committee assesses responsibility and performance
criteria appropriate to the executive officer in question to select
performance-based targets the achievement of which result in option awards. The
size of the option awards for which an officer is eligible are determined
principally by the level of responsibility for SpectraSite's performance held by
that officer.
The Company has informed senior management that bonuses for 2002 may be
paid in equity rather than in cash.
12
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Stephen H. Clark, SpectraSite's President and Chief Executive Officer, has
entered into an employment agreement effective April 20, 1999. The agreement has
an initial term of five years. For a description of the employment agreement,
see "Executive Compensation -- Employee Agreements." Mr. Clark's salary for 2001
was $375,000, and he is eligible to receive an annual bonus at the discretion of
the Board of Directors. Mr. Clark was awarded a cash bonus of $300,000 for 2001
in recognition of his leadership and vision. In the past year, SpectraSite
increased its tower portfolio from 5,030 to 7,925 towers, primarily through the
acquisition of leasehold and subleasehold interests in wireless communications
towers from affiliates of SBC Communications and construction of towers. Mr.
Clark was instrumental in spearheading and orchestrating this 2001 milestone. In
addition, Mr. Clark was granted incentive stock options to purchase 245,250
shares of common stock as of August 15, 2001 with an exercise price of $2.95 per
share, the then-current market price, in consideration for SpectraSite's
accomplishments during the year and taking into account the highly competitive
market for executive talent in the telecommunications and high technology
industries. The Committee believes these option grants are consistent with
SpectraSite's executive compensation philosophy and appropriate in light of the
significant increase in Mr. Clark's duties and responsibilities as a result of
SpectraSite's growth in the past three years.
Thomas E. McInerney
Lawrence B. Sorrel
Michael R. Stone
Timothy M. Donahue
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has met with management and with Ernst & Young,
SpectraSite's independent auditors, to review and discuss SpectraSite's audited
financial statements and other significant accounting issues. Management advised
the Committee that all financial statements were prepared in accordance with
generally accepted accounting principles.
The Committee's review included discussions with Ernst & Young concerning
matters required to be discussed pursuant to Statement on Auditing Standards No.
61 (Communication with Audit Committees). The Committee's discussions with Ernst
& Young also covered, among other items, matters relating to Ernst & Young's
independence from the Company and included the disclosures made to the Committee
as required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees). In addition, after due consideration, the
Committee concluded that the provision of non-audit services to SpectraSite by
Ernst & Young is compatible with maintaining the independence of Ernst & Young
as SpectraSite's principal accountants and recommended the appointment of Ernst
& Young as SpectraSite's independent auditors for 2002.
The members of the Audit Committee are not employees of the Company, and
are not professional accountants or auditors. The Audit Committee's primary
purpose is to assist the Board of Directors to fulfill its oversight
responsibilities by reviewing the financial information provided to shareholders
and others, the systems of internal controls which management has established to
preserve the Company's assets and the audit process. The Company's independent
auditors are responsible for auditing the Company's financial statements.
Management is responsible for the financial reporting process, the preparation
of consolidated financial statements in accordance with generally accepted
accounting principles, the system of internal controls, and procedures designed
to insure compliance with accounting standards and applicable laws and
regulations. In giving its recommendation to the Board of Directors, the Audit
Committee has relied, without independent verification, on the representations
of management and on the representations and opinions of the independent
auditors included in their report on the Company's financial statements.
13
On the basis of the reviews and discussions outlined above, the Committee
recommended to the Board of Directors that the Board approve the inclusion of
SpectraSite's audited financial statements in the Annual Report on Form 10-K for
the fiscal year ended December 31, 2001.
James R. Matthews
Michael R. Stone
Michael J. Price
* * *
The foregoing reports of the Audit and Compensation Committees as well as the
Performance Graph do not constitute soliciting material and should not be deemed
filed or incorporated by reference into any other SpectraSite filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the
extent we specifically incorporate those items therein by reference.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below sets forth, as of March 29, 2002, information with respect
to the beneficial ownership of SpectraSite's common stock by:
- each of the current directors, director nominees and executive officers
included in the Summary Compensation table, individually;
- each person who is known to be the beneficial owner of more than 5% of
any class or series of capital stock; and
- all directors and executive officers as a group.
The amounts and percentages of common stock beneficially owned are reported
on the basis of regulations of the SEC governing the determination of beneficial
ownership of securities. Under these rules, a person is deemed to be a
beneficial owner of a security if that person has or shares voting power, which
includes the power to vote or to direct the voting of such security, or
investment power, which includes the power to dispose of or to direct the
disposition of such security. A person is also deemed to be a beneficial owner
of any securities of which that person has a right to acquire beneficial
ownership within 60 days. Under these rules, more than one person may be deemed
to be a beneficial owner of the same securities.
14
NUMBER OF SHARES PERCENTAGE OF
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED TOTAL VOTING POWER
------------------------ ------------------ ------------------
Stephen H. Clark(a)......................................... 2,498,185 1.6
Timothy G. Biltz(b)......................................... 300,000 *
Adam F. Stulberger(c)....................................... 206,232 *
David P. Tomick(d).......................................... 543,749 *
Richard J. Byrne(e)......................................... 211,590 *
Timothy M. Donahue(f)....................................... 14,034,000 9.1
James R. Matthews(g)........................................ 33,408,102 21.7
Thomas E. McInerney(g)...................................... 33,868,954 22.0
Calvin J. Payne(h).......................................... 2,091,454 1.4
Michael J. Price(i)......................................... 200,000 *
Edgar L. Reynolds(j)........................................ 9,877,127 6.4
Steven M. Shindler(f)....................................... 14,009,000 9.1
Lawrence B. Sorrel(g)....................................... 33,467,206 21.7
Michael R. Stone(k)......................................... 12,676,837 8.2
Canadian Imperial Bank of Commerce(l)....................... 10,000,000 6.5
FMR Corp.(m)................................................ 20,057,600 10.2
Nextel Communications, Inc.(f).............................. 14,000,000 9.1
SBC Tower Holdings LLC(j)................................... 9,877,127 6.4
Welsh, Carson, Anderson & Stowe(g).......................... 33,558,102 21.8
Funds affiliated with Whitney & Co., LLC(k)................. 12,676,837 8.2
All current directors, director nominees and executive
officers as a group (22 persons)(n)....................... 76,925,332 49.3
---------------
* Less than 1%.
(a) Includes 732,500 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days. Of the shares reported in
the table, 816,327 are held by Holt Road, L.P. Mr. Clark owns a 1% general
partnership interest, certain family trusts own a 98% limited partnership
interest and Mr. Clark's spouse owns a 1% limited partnership interest in
Holt Road, L.P. Mr. Clark is a trustee of each family trust. Also includes
150,000 shares held by Mr. Clark's spouse. Mr. Clark disclaims beneficial
ownership of the shares held by Holt Road, L.P. and his spouse, as well as
those deemed to be beneficially owned by the family trusts.
(b) Includes 300,000 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.
(c) Includes 86,232 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.
(d) Includes 263,614 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.
(e) Includes 147,500 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.
(f) Includes, for each of Messrs. Donahue and Shindler, 9,000 shares of common
stock issuable upon the exercise of outstanding options exercisable within
60 days. Mr. Donahue owns 25,000 shares directly, and Mr. Shindler owns no
shares directly. Messrs. Donahue and Shindler are executive officers of
Nextel and disclaim beneficial ownership of the shares held by Nextel. The
business address for Mr. Donahue and Nextel is 2001 Edmund Halley Drive,
Reston, Virginia 20191, and the business address for Mr. Shindler is 10700
Parkridge Boulevard, Suite 600, Reston, Virginia 20191.
15
(g) Includes 32,033,102 shares beneficially owned by Welsh, Carson Anderson &
Stowe VIII L.P. ("WCAS VIII"), 1,375,000 shares beneficially owned by WCAS
Capital Partners III, L.P. ("WCAS III") and 150,000 shares beneficially
owned by WCAS Information Partners L.P. Messrs. Sorrel, McInerney and
Matthews are each either a managing member or general partner of the
respective sole general partners of Welsh, Carson, Anderson & Stowe VIII,
L.P. and other associated investment partnerships, and each may be deemed a
beneficial owner of the shares beneficially owned by WCAS VIII and WCAS
III. Mr. McInerney may also be deemed to beneficially own the shares
beneficially owned by WCAS Information Partners, L.P. In addition, Messrs.
Sorrel and McInerney have acquired directly 59,104 and 310,852 shares,
respectively. Messrs. Sorrel, McInerney and Matthews each disclaim
beneficial ownership of the shares held by WCAS VIII, WCAS III and WCAS
Information Partners L.P. The business address for Messrs. Sorrel,
McInerney, Matthews and Welsh, Carson is 320 Park Avenue, Suite 2500, New
York, New York 10022.
(h) Includes 177,380 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days. Of the shares reported in
the table, 1,674,250 are held by Calvin J. Payne Family Trust and 119,912
are held by Mr. Payne's spouse. Mr. Payne is the sole trustee of the family
trust. Mr. Payne disclaims beneficial ownership of the shares held by
Calvin J. Payne Family Trust and by his spouse.
(i) Of the shares reported in the table, 100,000 are held by The Price Family
Limited Partnership. Mr. Price disclaims beneficial ownership of such
shares.
(j) Mr. Reynolds is President of Network Operations for Cingular Wireless.
Cingular Wireless and SBC Tower Holdings LLC are affiliates of SBC
Communications, Inc. Mr. Reynolds disclaims beneficial ownership of the
shares held by SBC Tower Holdings.
(k) Represents 4,923,524 shares held by Whitney Equity Partners, L.P.;
7,265,734 shares held by J.H. Whitney III, L.P.; 175,079 shares held by
Whitney Strategic Partners III, L.P.; and 312,500 shares held by J.H.
Whitney Mezzanine Fund, L.P. Each of these funds is affiliated with Whitney
& Co., LLC. Mr. Stone disclaims beneficial ownership of shares held by
these entities except to the extent of his pecuniary interest in such
funds. The business address for Mr. Stone and the Whitney funds is 177
Broad Street, Stamford, Connecticut 06901.
(l) The business address for Canadian Imperial Bank of Commerce is 161 Bay
Street, PP Box 500, M5J 2S8, Toronto, Canada. Pursuant to SpectraSite's
second amended and restated certificate of incorporation, the shares of
common stock beneficially owned by Canadian Imperial Bank of Commerce in
excess of 5% of the total issued and outstanding common stock shall be
non-voting until such shares are transferred to an entity not subject to
the restrictions of the Bank Holding Company Act of 1956, as amended.
(m) The business address for FMR Corp. is 82 Devonshire Street, Boston,
Massachusetts 02109. The number of shares beneficially owned is based on the
Schedule 13G/A filed by FMR Corp. on February 14, 2002.
(n) Includes 2,029,426 shares of common stock issuable upon the exercise of
outstanding options exercisable within 60 days.
16
CERTAIN TRANSACTIONS
AGREEMENTS WITH SBC
On August 25, 2000, the Company entered into an agreement to acquire
leasehold and sub-leasehold interests in approximately 3,900 wireless
communications towers from affiliates of SBC Communications (collectively,
"SBC") in exchange for $982.7 million in cash and $325.0 million in common
stock, subject to adjustment provisions discussed below. The Company will
manage, maintain and lease available space on the SBC towers and will have the
right to co-locate tenants on the towers. SBC is an anchor tenant on all of the
towers and will pay a monthly fee per tower of $1,400, subject to an annual
adjustment. In addition, the Company entered into a five-year exclusive
build-to-suit agreement with Cingular, an affiliate of SBC, under which it will
develop and construct substantially all of Cingular's new towers in specified
markets during the term of the agreement.
The SBC transaction closes in stages. The initial closing occurred on
December 14, 2000 and involved 739 towers, for which the Company paid $175.0
million in cash and issued approximately 2.5 million shares of common stock
valued at $57.9 million. In 2001, the Company subleased an additional 1,926
towers, for which the Company paid $493.9 million in cash and issued
approximately 7.2 million shares of common stock.
On November 14, 2001, the Company completed an amendment to modify the
Agreement to Sublease and the Site Marketing Agreement. These modifications
provide for the Company to lease or sublease the rights to a total of 3,600
towers, a reduction of 300 from the original agreement. From the initial closing
in December 2000 through the most recent closing on February 25, 2002, the
Company leased or subleased a total of 2,706 towers and under the terms of the
amended agreement, the parties agreed to complete the lease or complete the
sublease of the remaining 894 towers during the period beginning April 2003 and
ending January 2004. In addition, pursuant to the amendment the Company will
receive all new co-location revenue on all towers remaining to be subleased
after February 25, 2002. As consideration for entering into the amendment, the
Company paid SBC a fee of $35.0 million.
The following is a summary of the material terms of the SBC Agreements.
Agreement to Sublease. Under the agreement to sublease between SBC,
SpectraSite and Southern Towers, Inc., as amended, the Company's subsidiary,
Southern Towers, has the right to lease, sublease, contract, operate, market and
manage 3,600 tower sites owned or leased by SBC, including the right to co-
locate tenants on the towers, in exchange for an aggregate consideration of
approximately $1.2 billion.
The Company pays to SBC at the inception of each lease all applicable lease
payments for the site leased or subleased by it under the sublease. In the event
that leases or subleases covering the full 3,600 towers are transferred to the
Company, the aggregate consideration payable to SBC will consist of
approximately $907.7 million in cash and $300.0 million in the Company's common
stock. Under the agreement, as amended, and assuming the sublease of all 3,600
towers, the stock portion of the consideration was initially approximately 13.2
million shares valued at $22.74 per share. The stock consideration is subject to
an adjustment payment if the average closing price of the Company's stock during
the 60-day period immediately preceding the last date on which towers will be
subleased, which is expected to be January 1, 2004, is less than $22.74 down to
a floor of $12.96. The adjustment payment will be accelerated if a change of
control of the Company or certain specified liquidity events occur. In any case,
the adjustment payment is always payable by the Company, at its option, in the
form of cash or shares of its common stock. As of February 28, 2002, the Company
has issued approximately 9.9 million shares of common stock to SBC pursuant to
the SBC agreements. Assuming the sublease of all 3,600 towers, the Company will
be required to issue in the aggregate approximately 13.2 million shares to SBC
and, based on the closing market price of the Company's common stock on December
31, 2001, the Company would be required to issue approximately 10 million
additional shares of common stock to SBC under the stock adjustment provisions
described above.
17
Site Marketing Agreement. Under the site marketing agreement, the Company
is allowed to co-locate new tenants on substantially all of the 3,600
communications towers before the Company subleases them from SBC. Prior to
February 26, 2002 the Company was entitled to receive 20% of the third-party
rent received as a result of any co-location of a third party by the Company
until the time that it subleased the site and 100% of such third party rent
thereafter. Commencing February 26, 2002, the Company is entitled to receive
100% of all such third-party rent. In the event that the Company does not
consummate the closing of the sublease for the site for any reason other than
its default or its exclusion of such site, the Company is entitled to retain 20%
of the third-party rent for the applicable term of the third-party co-location
agreement and the Company will pay SBC the 80% balance of the third-party rent
collected by the Company since February 26, 2002, together with 8.5% interest
per annum.
Lease and Sublease Agreement. Under the terms of the sublease, SBC leases
or subleases to the Company the land, tower and improvements at each site, and
the Company leases back to SBC the space reserved by it for use in its
telecommunications business, subject to the rights of third parties under
existing subleases and co-location agreements.
The Company remits to SBC, at the commencement of the lease with respect to
each site, all lease payments due for the subleased property as described in the
agreement to sublease and may also pay additional amounts for alterations to the
subleased property made by SBC at the Company's request.
The Company is entitled to use the subleased property at each site for
operating, managing, maintaining and marketing the tower and improvements at the
site, including the leasing of space to co-location tenants. SBC currently pays
the Company a monthly fee per tower for its reserved space of $1,470 per site,
subject to an annual increase of the lesser of 5% and changes in the consumer
price index plus 4%. After 10 years, the monthly fee for a site will be reset to
90% of the agreed upon market rate if it is then above that market rate. After
the tenth anniversary of the applicable site commencement date, the monthly fee
is subject to an annual increase based on changes in the consumer price index
or, in the case of sites as to which the monthly fee has been reset to 90% of
the market rate, based on the then current market rate of increase for
comparable properties.
The Company has agreed to pay directly to the applicable ground lessor the
ground rent relating to each site that is leased by the Company from SBC. In
addition, the Company has agreed to sublease, on commercially reasonable terms,
available space on the towers to parties who have existing co-location
agreements with SBC, and the Company will receive all rents and other economic
benefits from those subleases.
The average term of the sublease for all sites was approximately 27 years
from inception of the transaction, assuming renewals or extensions of the
underlying ground leases for the sites. SBC will be obligated to exercise all
renewal options contained in the ground leases of the sites, subject to certain
limited exceptions. The Company will be responsible for negotiating and
obtaining ground lease extensions or renewals that are not provided for in the
ground leases.
Under the sublease, SBC leases back its reserved space at each site. The
reserved space generally consists of the portion of the site, including space on
the tower, in use by SBC on the date the site becomes subject to the sublease.
Although SBC has the right, without increasing the related leaseback charge, to
expand the reserved space on up to 300 towers by utilizing up to an additional
15% of the total tower loading on the applicable tower for new or additional
communications equipment, in no event may the SBC equipment, both new and
existing, occupy more than two platforms on any of those towers. SBC also has
the right to expand the reserved space on towers in excess of 300 towers so long
as SBC pays the Company an additional monthly charge of $100 per additional
antenna, or the space equivalent of one additional antenna, not to exceed $1,600
per month in the aggregate per additional platform. If SBC locates any
additional equipment, except for microwave dishes and related equipment, on a
platform that is not already occupied by SBC's communications equipment, SBC's
additional monthly charge for that additional platform will not be less than
$1,200. The additional charge incurred as a result of SBC's expansion of its
communication equipment on towers beyond 300 towers will increase 5% per year
until
18
10 years after the applicable site became subject to the sublease, and will
increase thereafter in the same manner as the basic monthly fees payable by SBC.
Subject to the conditions described in the sublease, SBC also has the right
to substitute other available space on the tower for the reserved space, and a
right of first refusal as to available space that the Company intends to
sublease to a third-party. For the first 300 times SBC exercises its right of
first refusal, SBC is required to pay the Company rent for the applicable space
equal to the lesser of the rent that would have been charged to the proposed
third-party and a rent that is proportional to the monthly fee under the
sublease. After the first 300 times that SBC exercises its right of first
refusal, SBC is required to pay the Company rent for the applicable space equal
to the rent that would have been charged to the third-party.
On the tenth anniversary of the commencement date of the sublease with
respect to a site, and thereafter on each fifth-year anniversary of the tenth
anniversary date, SBC has the right, subject to certain notice requirements, to
withdraw from the reserved space at such site. In that case, SBC's rights with
respect to the withdrawn reserved space will terminate, SBC will no longer be
responsible for the related monthly charges and the withdrawn reserved space
will become part of the Company's subleased property.
The Company will have the option to purchase the sites subject to the
sublease upon the expiration of the sublease as to those sites. The purchase
price for each site will be a fixed amount stated in the sublease for that site
plus the fair market value of certain alterations made to the related tower by
SBC. The aggregate purchase option price for the towers subleased to date was
approximately $175 million as of August 25, 2000 (the date of the agreement to
sublease) and will accrete at a rate of 10% per year to the applicable
expiration of the sublease of a site. In the event that the Company purchases
such sites, SBC shall have the right to continue to lease the reserved space for
successive one year terms at a rent equal to the lesser of the agreed upon
market rate and the then current monthly fee, which monthly fee shall be subject
to an annual increase based on changes in the consumer price index.
The sublease may be terminated by each party in the event of certain
breaches by the other party, including failure to make required payments under
the sublease in a timely manner, breaches of covenants in the sublease, breaches
of representations and warranties, and insolvency. SBC may terminate the
sublease as to a site following a breach and failure to cure relating to that
site. SBC may terminate the entire sublease upon the occurrence of unwaived
defaults by the Company in respect of more than 50 sites during any consecutive
five-year period. Holders of collateral assignments, mortgages and similar
security instruments encumbering the Company's interest under the sublease will
have rights to cure the Company's defaults and may, under certain circumstances,
replace the Company as a party under the sublease.
The Company may terminate the sublease as to a site following breach and
failure to cure by SBC relating to that site. The Company may terminate the
entire sublease upon the insolvency of SBC. Upon a termination by the Company,
SBC is obligated to refund to the Company the portion of its prepaid rent
allocable to the applicable site for the period after the effective date of the
termination.
The sublease contains restrictions on the Company's ability to transfer its
interest in the subleased sites. SBC has the right to transfer its interest in
the sites on a site-by-site basis in connection with a sale or transfer of all
or a portion of SBC's wireless business and is entitled, under certain
circumstances, to be released from its obligations with respect to a transferred
site.
Subject to certain conditions and exceptions described in the sublease, the
Company has agreed to indemnify SBC in the event that as a result of certain
actions or failures by the Company, SBC is unable to claim or obtain certain
federal income tax depreciation deductions and interest deductions arising from
the characterization of the Company's lease payments to SBC as a loan, or is
required to include any unanticipated item in income. Additionally, subject to
certain exceptions, the Company has agreed to indemnify SBC from and against any
taxes and related charges, other than income taxes, imposed with respect to the
subleased property and certain actions relating thereto.
19
The sublease by its terms is subordinate to existing and future mortgages
on the subleased property. However, this subordination is conditioned on the
delivery by the mortgagee of a non-disturbance, subordination and attornment
agreement which provides that the mortgagee will recognize the Company's rights
under the sublease, including the Company's purchase option, and that in the
event of a foreclosure of a mortgage, mortgagee will not disturb the Company's
possession of the subleased property so long as no event of default has occurred
and is continuing under the sublease.
Build-to-Suit Agreement. Under the build-to-suit agreement, the Company
has the exclusive right, and is obligated, to develop and construct all new
wireless communications towers which Cingular and certain of its affiliates
elect to have constructed in specified markets in the United States, other than
sites subject to certain existing build-to-suit agreements and certain sites
currently under development. The term of the build-to-suit agreement is five
years, subject to extension under certain circumstances more fully described
below. Cingular also has the right to engage the Company to develop and
construct up to a maximum of 100 additional towers for affiliates of Cingular
that are not party to the build-to-suit agreement. The Company has the right, in
lieu of constructing a new tower within any search area identified by Cingular,
to propose that Cingular co-locate its communications equipment on an existing
tower owned, operated or leased by the Company. Cingular may reject any proposed
co-location if it reasonably believes the proposed tower or site does not meet
certain minimum requirements or if there are alternative locations in the area
available to Cingular on better economic terms. The Company has the
non-exclusive right to offer co-location services to Cingular for fees to be
agreed upon by the Company and Cingular.
Upon completion of a tower or Cingular's acceptance of an existing tower,
space on the tower is leased by the Company to Cingular under a master lease
covering all of Cingular's space on towers which are subject to the
build-to-suit agreement. Under the build-to-suit sublease, Cingular pays rent of
$1,400 per month per site, subject to an annual adjustment based on changes in
the consumer price index. The term of the build-to-suit sublease is 32 years.
The space to be leased is sufficient to accommodate up to 12 antennas conforming
to certain specifications described in the build-to-suit agreement, as well as a
microwave dish at a location to be agreed upon by the parties. After the tenth
anniversary of the commencement date of the build-to-suit sublease with respect
to any site, Cingular has the right, subject to certain notice requirements, to
withdraw from such site. Cingular has the right to terminate the build-to-suit
sublease as to a site in the event of a default by the Company, in its capacity
as lessor, that is not cured within a specified period and under certain other
circumstances.
Cingular has the right under the build-to-suit agreement, in lieu of having
the Company construct one or more towers, to acquire, develop and construct its
own sites and towers in accordance with the standards applicable to the
performance of the Company's development obligations. Cingular is required to
sell such sites and towers to the Company at a price calculated in accordance
with a cost schedule referred to in the build-to-suit agreement.
Cingular has the right to liquidated damages of $7,500 per month, not to
exceed $15,000 in the aggregate, for any site that has not been substantially
completed in accordance with the construction schedule provided for in the
build-to-suit agreement.
The Company may terminate the build-to-suit agreement in the event of a
bankruptcy or other insolvency event relating to Cingular. Cingular may
terminate the build-to-suit agreement with respect to a site in the event of
certain defaults by the Company with respect to such site or the assessment of
liquidated damages in excess of $15,000 for failure to substantially complete
such site in accordance with the prescribed construction schedule. Cingular may
terminate the entire build-to-suit agreement in the event of a bankruptcy or
other insolvency event relating to the Company, the assessment of liquidated
damages in excess of $0.2 million in any twelve-month period and the occurrence
of unwaived defaults with respect to 10% or more of the proposed tower sites
accepted by Cingular during any twelve-month period.
20
AGREEMENTS WITH NEXTEL
On April 20, 1999, we acquired 2,000 communications towers from affiliates
of Nextel Communications, Inc. (collectively, "Nextel") in a merger transaction.
All the sites were then leased back to Nextel under a master site lease
agreement. In addition, in connection with this transaction, Nextel agreed,
pursuant to a master site commitment agreement, to offer SpectraSite certain
exclusive opportunities relating to the construction or purchase of additional
sites. Some of these sites have been or will be leased to Nextel Partners
Operating Corp. instead of Nextel. Nextel Partners, Inc., the parent of Nextel
Partners Operating Corp., is an entity in which Nextel has a minority equity
interest. The following is a summary of the material terms of these agreements.
Master Site Commitment Agreement. SpectraSite and Nextel entered into a
master site commitment agreement under which Nextel will offer SpectraSite
certain exclusive opportunities, under specified terms and conditions, relating
to the construction or purchase of, or co-location on, 1,700 additional
communications sites. Since that time, the number of communications sites
subject to the Nextel agreement has been increased to 2,111. These sites are
then leased under the terms of a master site lease agreement (discussed below).
The master site commitment agreement terminates on the earlier of April 20, 2004
or the date on which the number of sites purchased or constructed or made
available for co-location under the master site commitment agreement equals or
exceeds 2,111. The master site commitment agreement also gives SpectraSite a
right of first refusal to acquire any towers that Nextel or certain affiliates
desire to sell.
The agreement may be terminated by either SpectraSite or Nextel, by written
notice, under certain conditions. SpectraSite may terminate the agreement if:
- Nextel or one of its subsidiaries that transferred assets to SpectraSite
becomes insolvent, or is unable to pay its debts as they become due; or
- Nextel or a transferring subsidiary is liquidated, voluntarily or
involuntarily, or a receiver or liquidator is appointed for that entity.
Nextel may terminate the agreement if:
- either SpectraSite Holdings or its subsidiary holding the Nextel towers
becomes insolvent, or is unable to pay its debts as they become due;
- either SpectraSite Holdings or such subsidiary is liquidated, voluntarily
or involuntarily, or a receiver or liquidator is appointed for such
entity; or
- at or after the end of any calendar year, Nextel has exercised its rights
to recover a penalty payment, as specified in the agreement, because, for
more than 10% of the total number of towers required to be developed by
SpectraSite during each year, SpectraSite has failed to complete
development of new towers during the allotted time period.
Either SpectraSite or Nextel may terminate the agreement if the other party
is in breach of an obligation to pay money or in breach of a material
nonmonetary obligation, if the breach is neither waived nor cured.
In 2000, the Company acquired 479 wireless communications towers from
Nextel for a total purchase price of $86.9 million in cash under this agreement.
In 2001, the Company acquired 192 wireless communication towers from Nextel for
a total purchase price of $33.7 million in cash under this agreement.
Master Site Lease Agreement. SpectraSite and Nextel entered into a master
site lease agreement in April 1999, and SpectraSite and Nextel Partners entered
into a master site lease agreement in January
21
2000. Under these agreements, SpectraSite has agreed to lease to Nextel and
Nextel Partners space on wireless communications towers or other transmission
space:
- at the sites transferred to SpectraSite as part of the Nextel tower
acquisition;
- at the sites subsequently constructed or acquired by SpectraSite under
the master site commitment agreement; or
- at other sites and related wireless communications towers or transmission
space owned, leased or licensed by SpectraSite.
The Nextel master site lease agreement and the Nextel Partners master site
lease agreement will be supplemented from time to time to provide for the lease
of space on certain additional communications towers or other transmission space
at sites owned, constructed or acquired by SpectraSite. Nextel and Nextel
Partners have a right of first refusal with respect to the sale of any sites
acquired by SpectraSite as part of the Nextel tower acquisition or constructed
or acquired by SpectraSite under the master site commitment agreement.
The Nextel master site lease agreement and the Nextel Partners master site
lease agreement provide that within 15 days of the commencement of the lease of
a given site, and on the first day of each month thereafter for the term of the
lease, a rental payment of $1,600 per month will be due on each tower which
SpectraSite leases to any of the tenants who are parties to the agreement.
Monthly payments will be adjusted for partial months when appropriate. On each
annual anniversary of a given lease's commencement, the rent owed under the
lease will increase by 3%.
Other rental provisions include:
- an option for tenants to lease additional space, if available, on
sites where the tenant already leases space; and
- a right allowing tenants to install, at their sole option and
expense and only when additional capacity exists at the rental site,
microwave antennae of various sizes and other equipment at
additional rental rates delineated in the agreement.
These provisions are subject to the same annual 3% rate increase as the
base rent.
The agreement further provides that each tenant is responsible for any
portion of personal property taxes assessed on any site and directly
attributable to the tenant's property, franchise and similar taxes imposed on
the tenant's business and sales tax imposed upon payment or receipt of rents
payable under the agreement. The Company is responsible for all other taxes.
Additionally, the agreement provides that the Company will be responsible for
certain types of insurance and each tenant is responsible for other types of
insurance.
The term of each lease contracted under the agreement is at least five
years, with a right to extend for five successive five-year periods. In some
cases, the initial lease term will be six, seven or eight years. The lease is
automatically renewed unless the tenant submits notification of its intent to
terminate the lease, when its current term expires, prior to such expiration.
The tenant has the right to trade the term of any given site for the term of any
other site, upon written notice to the Company. However, such a trade is limited
to one time per site per term.
A tenant may terminate a lease for any site, at its sole discretion,
without further liability to the Company, with 30 days prior written notice, if:
- the tenant uses reasonable efforts and fails to obtain or maintain any
license, permit or other approval necessary for operation of its
communications equipment; or
- the tenant is unable to use the tower due to FCC action which is not a
result of any action by the tenant.
22
If the other party breaches a nonmonetary obligation, either party may
terminate a lease for any site with 60 days prior written notice, subject to
certain cure provisions. Either party may terminate a lease for any site with 10
days prior written notice, if the other party breaches a monetary obligation and
that breach is not cured within the 10-day period. In addition, if Nextel or
Nextel Partners defaults on rental payments with respect to more than 10% of the
sites covered by its respective master site lease agreement and Nextel or Nextel
Partners, as the case may be, remains in default for 30 days following notice
from SpectraSite, SpectraSite may cancel the master site lease agreement of the
defaulting party as to all sites covered by that agreement.
Security and Subordination Agreement. SpectraSite and Nextel entered into
a security and subordination agreement under which SpectraSite granted to Nextel
a continuing security interest in the assets acquired in the Nextel tower
acquisition or acquired or constructed under the master site commitment
agreement. This interest secures SpectraSite's obligations under the Nextel
master site lease agreement and the Nextel Partners master site lease agreement.
The terms of an intercreditor agreement render Nextel's lien and the other
rights and remedies of Nextel under the security and subordination agreement
subordinate and subject to the rights and remedies of the lenders under
SpectraSite's credit facility.
TRANSACTIONS WITH CIBC
Canadian Imperial Bank of Commerce and some of its affiliates have,
together with other unrelated financial institutions, acted as agent and lender
under a credit facility under which SpectraSite Communications, Inc., our
wholly-owned subsidiary, is the borrower.
The credit facility provides, among other things, for an aggregate
borrowing capacity of up to $1.3 billion, subject to the covenants and
conditions contained in the credit facility. The credit facility consists of a
$350.0 million revolving credit facility which may be drawn, at any time,
subject to the satisfaction of financial covenants. The amount available will be
reduced (and, if necessary, the amounts outstanding must be repaid) in quarterly
installments beginning on September 30, 2003 and ending on June 30, 2007. The
facility also includes a $500.0 million multiple draw term loan that may be
drawn, subject to the satisfaction of financial covenants, at any time through
August 22, 2002, of which the amount drawn must be repaid in quarterly
installments beginning on September 30, 2003 and ending on June 30, 2007. The
final portion of the credit facility is a $450.0 million term loan that was
drawn in full in February 2001 which will, from September 30, 2003 through June
30, 2007, amortize at a rate of .25% per quarter and be payable in quarterly
installments and, from July 1, 2007 through December 31, 2007, amortize at a
rate of 48% per quarter and be payable on September 30, 2007 and December 31,
2007. SpectraSite has $695.0 million outstanding under the credit facility at
December 31, 2001.
The revolving credit loans and the multiple draw term loans bear interest
at either Canadian Imperial Bank of Commerce's base rate plus an initial
applicable margin of 2.00% per annum, which margin may, over time, decrease
based on a leverage ratio, or the Eurodollar rate plus an initial applicable
margin of 3.25% per annum, which margin may, over time, decrease based on a
leverage ratio.
The term loan bears interest at either Canadian Imperial Bank of Commerce's
base rate plus 2.75% per annum or the Eurodollar rate plus 4.00% per annum. The
commitment fee under the credit agreement is between 1.375% and 0.500% per annum
in respect of the undrawn portions of the multiple draw term loan and the
revolving credit facility, depending on the respective undrawn amounts.
TRANSACTIONS WITH EXECUTIVE OFFICERS
In August 1999, we loaned David P. Tomick $325,000 in connection with the
exercise of stock options. Mr. Tomick has pledged 50,000 shares of stock
acquired through the exercise of these options as security for this loan. The
loan bears interest at the applicable federal rate under the Internal Revenue
Code, 5.36% per annum, and matures in August 2002.
23
In September 1999, we loaned Timothy G. Biltz $500,000 to purchase a home
as a relocation incentive. This loan is secured by any shares of common stock
issued to Mr. Biltz upon his exercise of options, bears interest at 5.82% per
annum and matures in September 2004.
In January 2000, we loaned Stephen H. Clark $1,100,000 in connection with
the exercise of stock options to acquire 512,500 shares of common stock. The
loan bears interest at 5.80% per annum and matures on December 31, 2002.
STOCKHOLDERS' AGREEMENTS
In connection with the acquisition of tower assets from Nextel in April
1999, SpectraSite and its stockholders entered into the third amended and
restated stockholders' agreement, which superseded and replaced the existing
stockholders' agreement among SpectraSite and its stockholders. Since that time,
other investors and significant stockholders, including SBC and the Trimaran
Group, have also become parties to the agreement.
The stockholders' agreement contains a voting agreement provision under
which SpectraSite and the stockholders party to the agreement agreed to take all
appropriate action to:
- elect the greater of three and the number of directors Welsh, Carson
could appoint based on its proportionate ownership of SpectraSite stock
to SpectraSite's board;
- elect two Nextel designees to SpectraSite's board;
- elect two designees of funds affiliated with Whitney & Co. to
SpectraSite's board;
- elect one designee of SBC to SpectraSite's board;
- elect the Chief Executive Officer to SpectraSite's board;
- remove and replace any director if requested to do so by the stockholders
who designated the director;
- use their best efforts to cause Welsh, Carson designees to make up two of
the three members of a compensation committee created to, among other
things, set SpectraSite's employee compensation policy;
- use their best efforts to cause the Audit Committee and any other
committee formed by the Board to include one Welsh, Carson designee and
one Whitney designee; and
- use their best efforts to elect a Welsh, Carson affiliate as Chairman of
SpectraSite's board.
The Stockholders' Agreement further provides that SBC has the right to
designate one representative and the Trimaran Group, Canadian Imperial Bank of
Commerce and their respective affiliates together have the right to designate
one representative, in each case to attend the meetings of SpectraSite Holdings'
Board of Directors as an observer.
The voting agreement and the rights to designate observers terminate on
February 4, 2005. The rights of any stockholder to designate directors and
observers will terminate as to any such stockholder on the earlier to occur of
that stockholder's disposition of 50% or more of its SpectraSite common stock
and the date on which the stockholder owns less than 8% of SpectraSite's
outstanding common stock (5% in the case of the Trimaran Group's right to
designate an observer).
In addition, in connection with the merger between Westower Corporation and
the Company, the Company agreed to nominate Calvin J. Payne or another person
designated by former Westower shareholders as a director. These rights terminate
on the earlier of February 4, 2005 and the time when Mr. Payne and another
former Westower employee cease to be employed in their current positions by
SpectraSite and certain former Westower stockholders no longer beneficially own
8% or more of SpectraSite's outstanding common stock.
24
REGISTRATION RIGHTS AGREEMENTS
In connection with the closing of the Nextel tower acquisition,
SpectraSite, Nextel, Welsh Carson, Whitney, Canadian Imperial Bank of Commerce
and certain members of SpectraSite's management entered into a second amended
and restated registration rights agreement. In connection with SpectraSite's
acquisition of Apex Site Management, Inc., the former stockholders of Apex
joined the registration rights agreement. In connection with the SBC tower
transaction, SBC also joined the registration rights agreement.
Under the registration rights agreement, the holders of SpectraSite common
stock party to the agreement may require SpectraSite to register all or some of
their shares under the Securities Act. The following conditions must be met to
trigger this registration obligation:
- SpectraSite must receive a request for registration from holders of at
least 25% of its outstanding stock covered by the registration rights
agreement, exclusive of stock held by management; and
- SpectraSite must expect the aggregate offering price of the registered
securities will exceed $50.0 million.
SpectraSite is only obligated to effect three such registrations. Both
SpectraSite and its management have the right to include their shares in any
registration statement required by the registration rights agreement.
The registration rights agreement also provides that certain of the
stockholders party to the agreement have the right to require SpectraSite to
file a registration statement on a Form S-3 covering sales of their SpectraSite
common stock. These stockholders may request this registration if:
- SpectraSite is eligible to file a registration statement on Form S-3; and
- SpectraSite expects the aggregate offering price of the registered
securities will exceed $10.0 million.
In addition to SpectraSite's registration obligations discussed above, if
SpectraSite registers any of its common stock under the Securities Act for sale
to the public for SpectraSite's account or for the account of others or both,
the registration rights agreement requires that it use its best efforts to
include in the registration statement stock held by the stockholders party to
the registration rights agreement who wish to participate in the offering.
Registrations by SpectraSite on Form S-4, Form S-8 or any other form not
available for registering stock for sale to the public will not trigger this
registration obligation.
The parties to the registration rights agreement also agreed that if they
publicly sell their securities they will attempt to conduct the sale in a manner
that will not adversely disrupt the market for SpectraSite common stock. The
stockholders agreed, to the extent practicable, to coordinate those sales and
make them through a single broker or market maker over a sufficient period of
time to permit an orderly disposition of their securities. This coordinated
distribution restriction terminates:
- with respect to any shares that have been effectively registered and
disposed of in accordance with the registration statement covering those
shares;
- as to any stockholder who owns less than 5% of SpectraSite's outstanding
common stock; or
- at such time as the number of shares of common stock in the hands of the
public exceeds the number of shares of SpectraSite's common stock held by
parties to the agreement.
In connection with the Trimaran Group's investment in SpectraSite, the
Trimaran Group received registration rights in a separate agreement. The
following is a summary of the material terms of that registration rights
agreement.
Under the Trimaran Group's registration rights agreement, SpectraSite filed
a registration statement with the SEC covering, in part, the resale of the
Trimaran Group's shares, including the shares issuable upon the exercise of
warrants the Trimaran Group received as part of its investment in SpectraSite.
25
SpectraSite must keep this registration statement continuously effective until
the earlier of January 2003 or such time as the shares may be sold without
volume restrictions under Rule 144.
In addition, the Trimaran registration rights agreement entitles the
Trimaran Group to one demand registration. The Trimaran Group may request the
demand registration at any time following the date on which the registration
statement described in the immediately preceding paragraph is no longer
available. The following conditions must be met to trigger this registration
obligation:
- SpectraSite must receive a request for registration from holders of at
least 25% of the outstanding stock covered by the Trimaran Group
registration rights agreement; and
- the aggregate offering price of the registered securities must exceed
$7.5 million.
SpectraSite and holders of shares of common stock who have registration
rights, other than those shares held by the Trimaran Group and covered by the
Trimaran Group registration rights agreement, have the right to include their
shares in any registration statement for which the method of distribution is an
underwritten public offering.
In addition to SpectraSite's registration obligations discussed above, if
SpectraSite registers any of its common stock under the Securities Act for sale
to the public for SpectraSite's account or for the account of others or both,
the Trimaran Group registration rights agreement requires that SpectraSite use
its best efforts to include in that registration statement stock held by members
of the Trimaran Group who have registration rights and who wish to participate
in the offering. Registrations by SpectraSite on Form S-4, Form S-8 or any other
form not available for registering stock for sale to the public will not trigger
this registration obligation.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Annual Meeting, nine directors are to be elected to hold office
until the next Annual Meeting of Stockholders or until their respective
successors have been elected and qualified. All of the nominees are currently
directors. Michael R. Stone is not standing for re-election as a director. The
Board of Directors has determined to reduce the number of directors from ten to
nine.
The nine directors nominated for election at the Annual Meeting of
Stockholders are: Lawrence B. Sorrel; Stephen H. Clark; Timothy M. Donahue;
James R. Matthews; Thomas E. McInerney; Calvin J. Payne; Michael J. Price; Edgar
L. Reynolds and Steven M. Shindler. The persons named as proxies intend (unless
authority is withheld) to vote for the election of all of the nominees as
directors.
The Board of Directors knows of no reason why any nominee for director
would be unable to serve as director. If at the time of the Annual Meeting any
of the nominees is unable or unwilling to serve as a director of SpectraSite,
the persons named in the proxy intend to vote for such substitutes as may be
nominated by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL OF THE
NOMINEES.
APPROVAL OF EVERGREEN AMENDMENT TO PROVIDE FOR
INCREASES IN THE NUMBER OF SHARES RESERVED UNDER THE
AMENDED AND RESTATED STOCK INCENTIVE PLAN
(PROPOSAL NO. 2)
On February 12, 2002, the Board of Directors adopted resolutions, subject
to stockholder approval, to amend SpectraSite's Stock Incentive Plan (the
"Plan") to provide for automatic increases in the number of shares authorized
for issuance thereunder (the "Evergreen Amendment"). The Board of Directors
believes that equity interests have been and will continue to be a significant
factor in the ability of the
26
Company to attract, retain and motivate the officers and other key employees,
that are critical to the Company's long-term success.
The purpose of the Evergreen Amendment is to maintain the total number of
shares authorized for issuance for all past and future option grants under the
Plan (the "Authorized Shares"), such that the total number of Authorized Shares,
including all such past and future issuances, is not greater than 15% of the
Company's "Total Shares," which is based on SpectraSite's issued and outstanding
common stock, as calculated on a modified fully-diluted basis. "Total Shares" is
defined as the total number of shares outstanding, plus the number of shares
reserved for future issuance with respect to convertible securities and warrants
(other than options under the Plan) minus the number of shares of common stock
issued and outstanding as a result of the exercise of options or the grant of
other awards under the Plan or as a result of the exercise of options or the
grant of other awards made outside of the Plan.
Currently, the number of Authorized Shares is twenty million (20,000,000).
As of December 31, 2001, this number consisted of approximately 16,136,136
shares authorized for issuance pursuant to options that have already been
granted under the Plan, with the remaining approximately 3,863,864 shares
available for future option grants. This total number of 20,000,000 Authorized
Shares equals about 13.0% of the Total Shares as of March 29, 2002.
The Board of Directors believes that the optimum number of Authorized
Shares needed to meet the needs of the Company is an amount equal to 15% of
Total Shares. In order to maintain the number of Authorized Shares at this level
without incurring the expense of periodically soliciting stockholder approval of
increases in the number of Authorized Shares, the Board recommends that the
stockholders approve the Evergreen Amendment. Increases in the number of
Authorized Shares do not necessarily require the Company to use all Authorized
Shares to grant options or make other awards. The Compensation Committee will
retain the discretion, subject to the terms of the Plan, to determine the
amounts and types of awards to be made.
Specifically, the Evergreen Amendment provides that each March 31, June 30,
September 30 and December 31, commencing June 30, 2002, (each, an "Adjustment
Date") the number of Authorized Shares will increase by the number of shares of
Common Stock necessary, if any, so that total Authorized Shares, including all
past and future issuances, equals 15% of Total Shares, as determined on such
Adjustment Date. However, the Board may approve a lesser increase for any such
Adjustment Date.
Under the terms of the Evergreen Amendment, Total Shares does not include
any of the following:
- shares of common stock that are outstanding as a result of the exercise
of stock options granted under the Plan or any other employee, director
or consultant options that the Company may grant, other than options
assumed or issued by the Company in connection with mergers or
acquisitions; and
- shares of common stock reserved for issuance with respect to options
under the Plan, any other employee, director or consultant options that
the Company may grant, or options under any employee stock purchase plan,
other than options assumed or issued by the Company in connection with
mergers or acquisitions.
These exclusions from the definition of Total Shares have the effect of limiting
the size of the increases under the Evergreen Amendment compared to the
increases that would result from using a more conventional definition of
fully-diluted shares. For example, Total Shares will increase as the Company
issues shares of its Common Stock to finance its expansion or to acquire new
businesses, but will not increase merely because options are granted under the
Plan.
Pursuant to the terms of the Evergreen Amendment, the adjustment to occur
on June 30, 2002 would be approximately 4,175,045 shares, as calculated based on
Total Shares on December 31, 2001. The actual increase on June 30, 2002 will
depend on the actual Total Shares on June 30, 2002.
27
As part of the Evergreen Amendment, the Board has also amended the Plan to
provide that the maximum number of shares that may be issued pursuant to options
under the Plan that are intended to qualify as incentive stock options will be
20 million shares.
As of December 31, 2001, options for 12,911,720 shares of Common Stock were
outstanding under the Stock Option Plan at exercise prices ranging from $1.11 to
$22.22 per share. As of that date, approximately 4,075,379 shares of Common
Stock were available for future grants. On April 15, 2002, the closing price per
share of the Company's Common Stock on the Nasdaq National Market was $0.51 per
share.
The following is a discussion of other features of the Plan.
Purpose of Plan. The nature and purpose of the Plan is to use
performance-based grants of long-term, equity-based incentives in the form of
stock options and other equity based awards in order to link total compensation
for management and key employees to SpectraSite's performance and stock price
appreciation and to allow SpectraSite to remain competitive and to retain top
performing employees over time. The Plan also permits awards to directors.
Plan Administration. The Plan is administered by the Compensation
Committee of the Board of Directors. The Compensation Committee has sole
discretion, subject to the terms of the Plan, to determine the amounts and types
of awards to be made, set the terms, conditions and limitations applicable to
each award, and prescribe the form of the instruments embodying any award. The
Board of Directors or the Compensation Committee may delegate to another
committee of the Board of Directors the authority to grant awards to certain
persons and the Compensation Committee may generally delegate the authority to
act on its behalf to certain officers of SpectraSite.
Eligibility. Awards may be granted under the Plan to any director, officer
or other employee of SpectraSite and its subsidiaries, and any individual
providing services as a consultant, advisor or otherwise as an independent
contractor to SpectraSite and its subsidiaries.
Vesting and Exercise of Options. Options become exercisable as set forth
in their award agreement. Option awards historically have provided for vesting
in equal increments over a period of four to five years.
Vesting and Change of Control. Unless otherwise provided in any individual
agreement, outstanding stock options will become fully vested if:
- an employee is still employed on the six month anniversary of a change of
control;
- an employee is terminated by SpectraSite for reasons other than for cause
within the six-month period following a change of control; or
- an employee terminates his or her employment with SpectraSite for good
reason within the six-month period following a change of control.
Payment for Options. The exercise price of any stock option awarded under
the Plan will be determined by the Compensation Committee. Participants may
exercise an option by making payment in any manner specified by the Compensation
Committee.
Restricted Stock. The Compensation Committee may authorize awards of
restricted stock, including performance-based restricted stock. Awards of
restricted stock may be made for no consideration, or for an amount as is
determined by the Compensation Committee. Restricted stock is common stock that
generally is non-transferable and is subject to other restrictions determined by
the Compensation Committee for a specified period. Unless the Compensation
Committee determines otherwise, or specifies otherwise in an award agreement, if
the participant terminates employment during the restricted period, then any
unvested restricted stock will be forfeited.
Other Awards Under the Plan. The Compensation Committee may grant other
types of equity-based awards such as stock appreciation rights, deferred stock,
dividend equivalents and performance-based awards. Such awards and awards of
restricted stock may be subject to attainment of preestablished
28
performance goals based on revenue, net income, operating income, cash plan,
return on assets, return on equity, return on capital or total shareholder
return. To date, 150,000 shares of restricted stock have been awarded. See
"Executive Compensation -- Summary Compensation Table."
Estimate of Benefits. The number and terms of stock options and other
awards that will be granted to officers and other employees under the Plan in
the future is subject to the discretion of the Compensation Committee and is not
currently determinable.
Federal Income Tax Consequences of Options. The grant of a stock option
under the Plan will not have any immediate effect on the federal income tax
liability of SpectraSite or the participant. If the Compensation Committee
grants a non-qualified stock option, then the participant will recognize
ordinary income at the time he or she exercises the option in an amount equal to
the difference between the fair market value of the common stock at the time of
its exercise and the exercise price, and SpectraSite will receive a deduction
for the same amount.
If the Compensation Committee grants an incentive stock option, the
participant generally will not recognize any taxable income at the time he or
she exercises the incentive stock option, but will recognize income at the time
he or she sells the common stock acquired by exercise of the incentive stock
option. Upon sale of the common stock acquired upon exercise of the incentive
stock option, the employee will recognize income equal to the difference between
the exercise price and the amount received upon sale, and such income generally
will be eligible for capital gain treatment. SpectraSite generally is not
entitled to an income tax deduction in connection with an incentive stock
option. However, if the employee sells the common stock either within two years
of the date of the grant, or within one year of the date of the exercise of the
incentive stock option, then the option is treated for federal income tax
purposes as if it were a non-qualified stock option; the income recognized by
the employee will not be eligible for capital gain treatment and SpectraSite
will be entitled to a federal income tax deduction equal to the amount of income
recognized by the employee.
Market Price of SpectraSite's Common Stock. The closing price of
SpectraSite's common stock as reported on the Nasdaq National Market for April
15, 2002 was $0.51 per share.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
INCREASE IN RESERVED SHARES UNDER THE EMPLOYEE STOCK PURCHASE PLAN
(PROPOSAL NO. 3)
SpectraSite's Board of Directors has determined that additional shares of
the Common Stock should be made available for purchase by eligible employees of
SpectraSite and certain of its subsidiaries under our Employee Stock Purchase
Plan. Accordingly, the Board has recommended and approved the adoption of an
amendment to our Employee Stock Purchase Plan, to increase the maximum number of
shares of Common Stock available for purchase thereunder from 1 million shares
to 3 million shares.
SUMMARY OF THE EMPLOYEE STOCK PURCHASE PLAN
The following is a brief summary of SpectraSite's employee stock purchase
plan. All capitalized terms used herein have the meanings ascribed to them in
this Plan.
Purpose. The purpose of the employee stock purchase plan is to provide
employees of SpectraSite and certain of its subsidiaries with the opportunity to
purchase shares of SpectraSite's common stock through payroll deductions.
Eligible Employees. Under the employee stock purchase plan, eligible
participants are employees of SpectraSite and certain of its subsidiaries on the
date their participation in the plan is to become effective. Notwithstanding the
foregoing, (i) an employee whose customary employment is less than twenty (20)
hours per week or not more than five (5) months in any year, or (ii) an employee
who, if his or her stock purchase right were exercised immediately after its
grant would own 5% or more of the total
29
combined voting power or value of all classes of stock of SpectraSite, will not
be eligible to participate in the Plan.
Purchase Price. The employee stock purchase plan provides for the grant to
participants of a right to purchase shares of SpectraSite's common stock at an
exercise price per share equal to the lesser of eighty-five percent (85%) of the
fair market value on the date of grant, or eighty-five percent (85%) of the fair
market value on the date of exercise.
Administration. The employee stock purchase plan is administered by the
stock plan committee appointed by SpectraSite's Board of Directors which has the
discretionary authority to make rules and regulations for the administration of
and the interpretation of the employee stock purchase plan. No member of the
stock plan committee may participate in any decision respecting his or her
interest as a participant, except as generally applicable to similarly situated
plan participants.
Shares Subject to the Employee Stock Purchase. The maximum number of
shares available for purchase under the employee stock purchase plan will be 3
million (subject to anti-dilution adjustments) if Proposal Number 3 is approved.
In the event a stock purchase right granted under the employee stock purchase
plan expires or terminates prior to exercise, the shares subject thereto will
thereafter be available for further stock purchase right grants.
Deferral of Compensation. Each eligible employee electing to participate
in the employee stock purchase plan must complete and deliver to SpectraSite
participation forms which indicate the amount to be deducted from the employee's
paychecks. Deductions are accumulated for six-month offering periods beginning
on the date on which the stock plan committee grants a stock purchase right to
the participant.
Withdrawal. A participant may cancel his or her payroll deduction
authorization under the employee stock purchase plan by written notice to
SpectraSite at any time at least five days prior to the end of an offering
period, in which event SpectraSite will promptly refund the entire balance of
his or her balance accumulated under the employee stock purchase plan. After
such a cancellation, a participant's participation for the offering period is
automatically terminated and he or she may not resume participation again until
properly submitting participation forms.
Limitation on Grant of Options. No person shall be granted a stock
purchase right which permits him or her to purchase shares under the employee
stock purchase plan and any other similar stock purchase plan of SpectraSite
with a fair market value (determined at date of grant and pursuant to the
employee stock purchase plan) which exceeds $25,000 in any calendar year (or
such other limit as may be imposed by the Code).
Federal Income Tax Consequences. The following addresses certain federal
income tax consequences of participation in the employee stock purchase plan.
Although SpectraSite believes the following statements are correct based on
existing provisions of the Code and the legislative history and administrative
and judicial interpretations thereof, no assurance can be given that
legislative, administrative or judicial changes or interpretations will not
occur which would modify such statements.
The employee stock purchase plan is not subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended, and is not
qualified under Code Section 401(a).
Under Section 423(a) of the Code, the transfer of a share to a participant
pursuant to the employee stock purchase plan is entitled to the benefits of
Section 421(a) of the Code. Under that section, a participant will not be
required to recognize income at the time the stock purchase right is granted or
at the time of exercise. As the purchase price under the employee stock purchase
plan is less than the fair market value of the shares on the date of grant,
Section 423(c) of the Code requires that, provided the holding periods described
below are met, when the shares received pursuant to the employee stock purchase
plan are sold or otherwise disposed of in a taxable transaction (or in the event
of the death of the participant while owning such shares whether or not the
holding period requirements are met), the participant will recognize
compensation income (taxed as ordinary income), for the taxable year in which
disposition or death occurs, in an amount equal to the lesser of (i) the excess
of the fair market value of
30
the shares at the time of such disposition or death over the amount paid for the
shares, and (ii) 15% of the fair market value of the shares on the relevant
grant date. Such recognition of compensation income upon disposition shall have
the effect of increasing the basis of the shares in the participant's hands by
an amount equal to the amount of compensation income recognized. SpectraSite
will not be entitled to any business expense deduction with respect to the
employee stock purchase plan, except in connection with a disqualifying
disposition as discussed below. Any additional gain or loss resulting from the
disposition (provided it is not a disqualifying disposition), measured by the
difference between the amount paid for the shares and the amount realized (less
the amount recognized as compensation income as described above), will be
recognized to the participant as long-term capital gain or loss.
In order for a participant to receive the favorable tax treatment provided
in Section 421(a) of the Code, Section 423(a) requires that the participant make
no disposition of the shares within two years from the date the stock purchase
right was granted nor within one year from the date shares were acquired
pursuant to such stock purchase right. In addition, the participant must, with
certain exceptions for death or disability, be an employee of SpectraSite (or
certain of its subsidiaries) at all times within the period beginning on the
date of the grant of the stock purchase right and ending on a date within three
months before shares are acquired pursuant to such stock purchase right.
If a participant disposes of stock acquired pursuant to a stock purchase
right before the expiration of the holding period requirements set forth above
(a "disqualifying disposition"), the participant will realize, at the time of
the disposition, ordinary income to the extent the fair market value of the
shares on the date the shares were purchased exceeds the purchase price. The
difference between the fair market value of the shares on the date the shares
were purchased and the amount realized on disposition is treated as long-term or
short-term capital gain or loss, depending on the participant's holding period
in the shares. The amount treated as ordinary income may be subject to
withholding requirements. The participant will be required to make appropriate
arrangements for satisfying all withholding taxes that the Company is required
to pay on behalf of the participant. At the time of the disqualifying
disposition, the Company will be allowed a corresponding business expense
deduction under Section 162 of the Code to the extent of the amount of the
participant's ordinary income. The Company may adopt procedures to assist it in
identifying such deductions, and may require a participant to notify the Company
of his or her intention to dispose of any such shares.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
SELECTION OF INDEPENDENT AUDITORS
(PROPOSAL NO. 4)
The Board of Directors has selected the firm of Ernst & Young LLP,
independent certified public accountants, as our independent auditors for the
year ending December 31, 2002. Ernst & Young LLP has audited the financial
statements of SpectraSite since inception, April 25, 1997.
A representative of Ernst & Young LLP will be present at the Annual
Meeting, will be offered the opportunity to make a statement if he desires to do
so, and will be available to respond to appropriate questions. In the event the
appointment is not ratified, the Board of Directors will consider the
appointment of other independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
OTHER MATTERS
Management does not know of any other matters to be considered at the
Annual Meeting. If any other matters do properly come before the meeting,
persons named in the accompanying form of proxy intend to vote thereon in
accordance with their best judgment, and the discretionary authority to do so is
included in the accompanying form of proxy.
31
ANNUAL REPORT ON FORM 10-K
SpectraSite will provide upon request and without charge to each
stockholder receiving this Proxy Statement a copy of SpectraSite's Annual Report
on Form 10-K for the fiscal year ended December 31, 2001, including the
financial statements included therein, as filed with the SEC on March 22, 2002.
SUBMISSION OF STOCKHOLDER PROPOSALS
We anticipate that the next Annual Meeting of Stockholders will be held in
May 2003. Any stockholders who intend to present proposals at the next Annual
Meeting, and who wish to have such proposal included in SpectraSite's Proxy
Statement for the next Annual Meeting, must ensure that SpectraSite's Secretary
receives such proposals no later than December 20, 2002. Such proposals must
meet the requirements set forth in the rules and regulations of the SEC in order
to be eligible for inclusion in the proxy material for the next Annual Meeting.
Any proposals that a Stockholder intends to present at the next annual meeting,
other than through inclusion in the proxy materials, must be received no later
than March 5, 2003.
By Order of the Board of Directors
/s/ JOHN H. LYNCH
John H. Lynch
Secretary
Cary, North Carolina
April 17, 2002
32
Appendix A
AMENDMENT
SPECTRASITE HOLDINGS, INC.
STOCK INCENTIVE PLAN
Pursuant to Section 12.1 of the Spectrasite Holdings, Inc. Stock
Incentive Plan, effective April 9, 2001 (the "Plan"), Spectrasite Holdings, Inc.
(the "Company") hereby amends the Plan, effective upon approval of such
amendment by the stockholders of the Company, as follows:
I.
Article 1 of the Plan shall be amended to add the following paragraphs,
which shall read as follows:
(gg) "Authorization Increase" means, for each Calculation
Date, the Target Authorization in excess of the Existing Authorization;
provided, however, that if on any Calculation Date, the Authorization Increase
would be a negative number, then the Authorization Increase for such Calculation
Date shall be deemed to be zero.
(hh) "Calculation Date" means June 30, 2002, and the last
day of each calendar quarter thereafter.
(ii) "Target Authorization" means, for each Calculation
Date, the product of the Total Shares multiplied by .15.
(jj) "Existing Authorization" means, for each Calculation
Date, Twenty Million (20,000,000) Shares, plus the aggregate number of Shares of
any Authorization Increase prior to such Calculation Date.
(kk) "Total Shares" means, for each Calculation Date, the
sum of (i) the total number of Shares outstanding, plus (ii) the total number of
Shares reserved for issuance with respect to outstanding convertible securities
and warrants, minus (iii) the total number of Shares outstanding as a result of
exercises of Options granted under the Plan, and any other options granted to
any employee, director or consultant to the Company or its affiliates (other
than options assumed or issued by the Company in connection with any merger or
acquisition involving the Company or its affiliates).
II.
Section 4.1 of the Plan shall be revised to read as follows:
4.1 Shares Subject to the Plan. Awards shall be made with respect to Shares
of the Company and shall be subject to adjustments as provided in Section 9.5
below. The maximum number Shares which may be issued under the Plan shall be
Twenty
2
Million (20,000,000) Shares; provided, however, and subject to the
limitation below regarding Shares available with respect to grants of Incentive
Stock Options, the number of Shares authorized for increase under the Plan shall
increase on each Calculation Date, commencing on June 30, 2002, by an amount
equal to the lesser (i) the Authorization Increase for such Calculation Date, or
(ii) such lesser number than the Authorization Increase as may be determined by
the Board in its sole discretion. Notwithstanding the foregoing, the maximum
cumulative number of Shares available under the Plan for grants of Incentive
Stock Options shall be Twenty Million (20,000,000) Shares.
III.
Except as otherwise provided herein, the Plan shall remain in full
force and effect.
SPECTRASITE HOLDINGS, INC.
STOCK INCENTIVE PLAN
PURPOSE
The SpectraSite Holdings, Inc. Stock Incentive Plan as amended and
restated effective April 9, 2001 is established to create an additional
incentive for key employees, directors, and consultants or advisors of
SpectraSite Holdings, Inc., its affiliates and any successor corporations
thereto, to promote the financial success and progress of SpectraSite Holdings,
Inc.
ARTICLE 1
DEFINITIONS
The following definitions shall be applicable throughout the Plan:
(a) "Award" means, individually or collectively, any Option or any
other grant of an equity interest in the Company as indicated in Section 4.2 of
the Plan.
(b) "Award Agreement" means a written agreement between the
Company and an Optionee or Participant with respect to an Award granted under
the Plan.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means, except as otherwise provided in any Award
Agreement or employment agreement of a Participant or an Optionee:
(i) the conviction of a felony involving an act of fraud,
embezzlement or theft in connection with one's duties or otherwise in the course
of one's employment with the Participating Company Group;
(ii) the intentional and wrongful damaging of property,
contractual interests or business relationships of the Participating Company
Group;
(iii) the intentional and wrongful disclosure of secret
processes or confidential information of the Participating Company Group in
violation of an agreement with or a policy of the Participating Company Group;
or
(iv) intentional conduct contrary to the Participating
Company Group's announced policies or practices (including those contained in
the Company's Employee Handbook) where either: (A) the nature and/or severity of
the conduct or its consequences typically would have resulted in immediate
termination based on the Company's established employee termination or
disciplinary practices in place; or (B) the employee has been provided with
written notice detailing the relevant policy or practice and the nature of the
objectionable conduct or other violation, and within 20 business days of the
receipt of such notice the employee has not remedied the violation or ceased to
engage in the objectionable conduct.
(e) "Change of Control" shall mean, with respect to all Awards
granted on or after the Effective Date, except as otherwise provided in any
Award Agreement or employment agreement of a Participant:
(i) the sale, lease or exchange of all or substantially
all of the assets of the Company or of the assets of SpectraSite Communications,
Inc. ("SpectraSite Communications") other than to a person that directly or
indirectly controls, is controlled by or is under common control with, the
Company;
(ii) the acquisition, directly or indirectly, by any
person or related group of persons (other than the Company, a person that
directly or indirectly controls, is controlled by or is under common control
with, the Company) of the beneficial ownership (within the meaning of Rule 13d-3
of the 1934 Act as amended) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Company's outstanding
securities;
(iii) a change in the composition of the Board that results
in the individuals who, as of January 1, 2001, are members of the Board (the
"Incumbent Board"), ceasing for any reason to constitute at least a majority of
the members of the Board; provided, however, that if the election, or nomination
for election by the Company's common stockholders, of any new director is
approved by a vote of at least a majority of the Incumbent Board, such new
director shall, for purposes of this Plan, be considered as a member of the
Incumbent Board; provided further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office in any of the following manners: (a) as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated under the
1934 Act); (b) as a result of other actual or threatened solicitation of proxies
or consents by or on behalf of a person other than the Board (a "Proxy
Contest"); and (c) by reason of any agreement intended to avoid or settle any
Election Contest or Proxy Contest;
(iv) the merger or consolidation of the Company with or
into another entity unless the shareholders of the Company immediately prior to
such merger or consolidation own, directly or indirectly, more than fifty
percent (50%) of the total combined voting power of the surviving entity's
outstanding securities immediately after such merger or consolidation; or
(v) the liquidation or dissolution of the Company or
SpectraSite Communications other than in connection with a merger or
consolidation of the Company or SpectraSite Communications with or into another
entity if shareholders of the Company immediately prior to such merger or
consolidation own, directly or indirectly, more than fifty percent (50%) of the
total combined voting power of the surviving entity's outstanding securities
immediately after such merger or consolidation.
(f) "Code" means the Internal Revenue Code of 1986, as amended
from time to time. Reference in the Plan to any section of the Code shall be
deemed to include any amendments or successor provisions to such section and any
rules or regulations promulgated under such section.
-2-
(g) "Committee" means the Compensation Committee of the Board or,
if no such committee shall exist, any members of the Board who are selected by
the Board to constitute the Committee.
(h) "Company" means SpectraSite Holdings, Inc. and any successor
corporations thereto.
(i) "Deferred Stock" means an Award granted by the Committee
pursuant to Section 7.3 of the Plan that awards Shares to a Participant subject
to certain restrictions imposed by the Committee.
(j) "Dividend Equivalent" means an Award granted by the Committee
pursuant to Section 7.2 of the Plan that consists of the right to payment of
dividends with respect to Shares of the Company.
(k) "Effective Date" means the date that this restated Plan was
approved by the Committee, as indicated in the preamble.
(l) "Employee" means any individual in an employment relationship
with the Company or any Parent Corporation or Subsidiary of the Company.
(m) "Good Reason" shall mean, except as otherwise provided in any
Award Agreement or employment agreement of a Participant or Optionee, that an
Employee shall have made a good faith determination that one or more of the
following has occurred: (i) any significant and adverse change in the Employee's
duties, responsibilities and authority, as compared in each case to the
corresponding circumstances in place on the day preceding the Change of Control;
(ii) a relocation of the Employee's principal work location as established on
the day preceding the Change of Control to a location that is more than 30 miles
away from such location; (iii) a reduction in the Employee's salary or bonus
potential that is not in either case agreed to by the Employee, or any other
significant adverse financial consequences associated with the Employee's
employment as compared to the corresponding circumstances in place on the day
preceding the Change of Control; or (iv) a breach by a member of the
Participating Company Group of its obligations under any agreement to which the
member of the Participating Company Group and the Employee are parties that is
not cured within 20 business days following the member of the Participating
Company Group's receipt of a written notice from the Employee specifying the
particulars of such breach in reasonable detail.
(n) "Immediate Family" means, with respect to an Optionee or a
Participant, the Optionee's or Participant's spouse, children or grandchildren
(including adopted children, stepchildren and grandchildren).
(o) "Incentive Stock Option" means an incentive stock option
within the meaning of section 422(b) of the Code.
(p) "Independent Director" shall mean a member of the Board who is
both an "outside director" within the meaning of Section 162(m) of the Code, and
a "non-employee director" within the meaning of Rule 16b-3.
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(q) "1934 Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereby.
(r) "Non-Qualified Option" means an Option that is not an
Incentive Stock Option.
(s) "Option" means a stock option awarded under Section 4.2 of the
Plan and includes both Non-Qualified Options and Incentive Stock Options to
purchase Shares.
(t) "Optionee" means an individual so designated in an Option
Agreement who has been granted an Option by the Company pursuant to this Plan.
(u) "Option Agreement" means an Award Agreement between the
Company and an Optionee with respect to an Option.
(v) "Parent Corporation" means a corporation with ownership
interest in the Company in accordance with Section 424(e) of the Code.
(w) "Participant" means an individual who has been granted an
Award under this Plan other than an Option.
(x) "Participating Company" means the Company or any Parent
Corporation or Subsidiary thereof, which together shall be collectively referred
to as the "Participating Company Group."
(y) "Performance Awards" means Awards granted by the Committee to
a Participant pursuant to Plan Section 7.1, which are conditioned on the
satisfaction of certain performance criteria determined by the Committee.
(z) "Plan" means the SpectraSite Holdings, Inc. Stock Incentive
Plan as amended and restated effective April 9, 2001.
(aa) "Restricted Stock Agreement" means a written agreement between
the Company and a Participant with respect to a Restricted Stock Award.
(bb) "Restricted Stock Award" means an Award granted under Article
6 of the Plan.
(cc) "Rule 16b-3" means Securities and Exchange Commission Rule
16b-3 promulgated under the 1934 Act, as such may be amended from time to time,
and any successor rule, regulation, or statute fulfilling the same or similar
function.
(dd) "Shares" means the issued and outstanding shares of common
stock of the Company.
(ee) "Stock Appreciation Right" means an Award granted to a
Participant pursuant to Section 7.4 of the Plan which allows for the payment of
cash on the appreciation of the value of Shares.
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(ff) "Subsidiary" means a corporation in which the Company has an
ownership interest in accordance with Section 424(f) of the Code.
ARTICLE 2
ADMINISTRATION
2.1 Plan Administration Generally. The Plan shall be administered by the
Committee having such powers as shall be specified by the Board. Any subsequent
references herein to the Committee shall also mean the Board if such Committee
has not been appointed. Unless the powers of the Committee have been
specifically limited, the Committee shall have all of the powers of the Board
granted herein, subject to the terms of the Plan and any applicable limitations
imposed by law. All questions of interpretation of the Plan or of any Award
granted under the Plan shall be determined by the Committee in its sole
discretion, and such determinations shall be final and binding upon all persons
having an interest in the Plan and/or any Award.
2.2 Make-Up of Committee. The Committee shall consist solely of two or more
Independent Directors. Notwithstanding the foregoing, the Board or the Committee
may (i) delegate to a committee of one or more members of the Board who are not
Independent Directors the authority to grant awards under the Plan to eligible
persons who are either (A) not then "covered employees," within the meaning of
Section 162(m) of the Code and are not expected to be "covered employees" at the
time of recognition of income resulting from such award or (B) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code
and/or (ii) delegate to a committee of one or more members of the Board who are
not Independent Directors the authority to grant Awards under the Plan to
eligible persons who are not then subject to Section 16 of the 1934 Act.
2.3 Power of the Board over the Committee. The Board may abolish the
Committee at any time, or otherwise assume responsibility for the administration
of the Plan. Appointment of Committee members shall be effective upon acceptance
of appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee may only be filled by the Board.
2.4 Delegation by Committee. The Committee may delegate to any officer of
the Participating Company Group the authority to act on behalf of the Committee
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Committee herein, except for
grants of Awards to (i) "covered employees" under Code Section 162(m) and (ii)
persons subject to Section 16 of the 1934 Act.
ARTICLE 3
ELIGIBILITY
Awards may be granted to employees (including officers) and directors
of the Participating Company Group as well as to individuals who are rendering
services as consultants, advisors, or otherwise as independent contractors to
the Participating Company Group. The Committee, in its sole discretion, shall
determine which persons shall be granted Awards. Options may be either Incentive
Stock Options or Non-Qualified Stock Options. The following
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individuals are eligible to receive only Non-Qualified Stock Options:
consultants, advisors, independent contractors and directors (unless a director
is also an employee of a Participating Company).
ARTICLE 4
SHARES AND AWARDS UNDER THE PLAN
4.1 Shares Subject to the Plan. Awards shall be made with respect to Shares
of the Company and shall be subject to adjustment as provided in Section 9.5
below. The maximum number of Shares which may be issued under the Plan shall be
Twenty Million (20,000,000) Shares. In the event that any outstanding Award for
any reason expires or is terminated or canceled and/or Shares subject to
repurchase are repurchased by the Company, the Shares allocable to the
unexercised portion of such Award, or such repurchased Shares, may again be
subject to an Award. The Committee shall maintain a record of Shares subject to
outstanding Awards under the Plan and the exercise price of such Awards, plus a
record of all Shares issued upon the exercise of such Awards and the terms of
such Awards.
4.2 Types of Awards Under the Plan. The following types of Awards are
available under the Plan, subject to the Board's discretion:
(a) Stock Options Awards (Non-Qualified Stock Options and
Incentive Stock Options)
(b) Restricted Stock
(c) Performance Awards
(d) Dividend Equivalents
(e) Deferred Stock
(f) Stock Appreciation Rights
(g) Other Stock-based Awards
ARTICLE 5
STOCK OPTIONS
5.1 Terms, Conditions and Form of Options. Subject to the provisions of the
Plan, the Committee shall determine for each Option (which need not be
identical) the number of Shares for which the Option is granted, whether the
Option is to be treated as an Incentive Stock Option or as a Non-Qualified Stock
Option and all other terms and conditions of the Option not inconsistent with
the Plan. Options granted pursuant to the Plan shall comply with and be subject
to the following terms and conditions:
(a) Option Price. The exercise price for each Option shall be
established in the sole discretion of the Committee; provided, however, that (i)
the exercise price per share for an Incentive Stock Option shall be not less
than the fair market value of a Share on the date of the granting of the
Incentive Stock Option and (ii) the exercise price per share of an Incentive
Stock Option granted to an Optionee who at the time the Incentive Stock Option
is granted owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of a Participating Company within
the meaning of section 422(b)(6) of the Code (a "Ten Percent Owner Optionee")
shall be not less than one hundred ten percent (110%) of the fair
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market value of a Share on the date the Option is granted. For this purpose,
"fair market value" means the value assigned to the stock for a given day by the
Committee. Notwithstanding the foregoing, an Incentive Stock Option may be
granted by the Committee in its discretion with an exercise price lower than the
minimum exercise price set forth above if such Option is granted pursuant to an
assumption or substitution for another Incentive Stock Option in a manner
qualifying with the provisions of Section 424(a) of the Code. Nothing
hereinabove shall require that any such assumption or modification will result
in the Option having the same characteristics, attributes or tax treatment as
the Option for which it is substituted.
(b) Exercise Period of Options. The Committee shall have the power
to set the time or times within which each Option shall be exercisable or the
event or events upon the occurrence of which all or a portion of each Option
shall be exercisable and the term of each Option; provided, however, that (i) no
Incentive Stock Option shall be exercisable after the expiration of ten (10)
years after the date such Incentive Stock Option is granted, (ii) no Incentive
Stock Option granted to a Ten Percent Owner Optionee shall be exercisable after
the expiration of five (5) years after the date such Incentive Stock Option is
granted, and (iii) no Incentive Stock Option shall be exercisable after the date
the Optionee's employment with the Participating Company Group is terminated for
Cause; and provided, further, an Incentive Stock Option shall terminate and
cease to be exercisable as an Incentive Stock Option no later than three (3)
months after the date on which the Optionee terminates employment with the
Participating Company Group for reasons other than for Cause, unless the
Optionee's employment with the Participating Company Group shall have terminated
as a result of the Optionee's death or disability (within the meaning of Section
22(e)(3) of the Code), in which event the Incentive Stock Option shall terminate
and cease to be exercisable as an Incentive Stock Option no later than twelve
(12) months from the date on which the Optionee's employment terminated. For
this purpose, an Optionee's employment shall be deemed to have terminated on
account of death if the Optionee dies within three (3) months following the
Optionee's termination of employment.
(c) Payment of Option Price. Payment of the option price for the
number of Shares being purchased pursuant to any Option shall be made in any
manner permitted by the Committee including, but not limited to: (i) payment in
cash, (ii) by check or cash equivalent, (iii) by delivery or attestation of
ownership of a number of Shares which have been owned by the Optionee for at
least six months (or such other period as necessary to prevent an accounting
charge) with a fair market value equal to the exercise price, (iv) by delivery
of a stock power and instructions to a broker to sell a sufficient number of
Shares subject to the Option to pay such exercise price, or (v) with the consent
of the Committee, by promissory note.
(d) $100,000 Limitation. The aggregate fair market value,
determined as of the date on which an Incentive Stock Option is granted, of the
Shares with respect to which Incentive Stock Options (determined without regard
to this subsection) are first exercisable during any calendar year (under this
Plan or under any other plan of the Participating Company Group) by any Optionee
shall not exceed $100,000. If such limitation would be exceeded with respect to
an Optionee for a calendar year, the Incentive Stock Option shall be deemed a
Non-Qualified Stock Option to the extent of such excess.
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(e) Annual Limit. No individual may be granted in any calendar
year Options to purchase more than 1,000,000 Shares.
5.2 Effect of Change in Stock Subject to Plan. The Committee shall make
appropriate adjustments in the number and class of Shares subject to the Plan
and to any outstanding Options and in the exercise price of any outstanding
Options in the event of a stock dividend, stock split, reverse stock split,
combination, reclassification, or like change in the capital structure of the
Company. Notwithstanding the foregoing, such adjustments shall be made to
prevent the dilution or enlargement of the rights granted under the Options as a
result of any of the foregoing events.
5.3 Options Non-Transferable. During the lifetime of the Optionee, the
Option shall be exercisable only by the Optionee. No Option shall be assignable
or transferable by the Optionee, except by will or by the laws of descent and
distribution, provided the Committee may permit an Option to be transferrable to
members of the Optionee's Immediate Family or to a trust, partnership or other
entity for the benefit of the Optionee and/or member of the Optionee's Immediate
Family.
5.4 Reload Options. Concurrently with the award of Options, the Committee
may award reload options ("Reload Options") to the Optionee to purchase, for
cash or Shares, a number of Shares. The number of Reload Options shall equal (i)
the number of Shares used to exercise the underlying Options, and (ii) to the
extent authorized by the Committee, the number of Shares used to satisfy any tax
withholding requirement incident to the exercise of the underlying Options. The
grant of a Reload Option will become effective upon the exercise of the
underlying Options where payments due upon exercise of the Options are made in
the form of Shares. Notwithstanding the fact that the underlying Option may be
an Incentive Stock Option, a Reload Option is not intended to qualify as an
Incentive Stock Option.
(a) Unless an Option Agreement specifically states that the
Committee has awarded Reload Options with respect to the underlying Options,
none shall be deemed to have been awarded. Upon the exercise of an underlying
Option, the Reload Option will be evidenced by an amendment to the underlying
Option Agreement.
(b) The exercise price per Share deliverable upon the exercise of
a Reload Option shall be the fair market value of a Share on the date the grant
of the Reload Option becomes effective.
(c) Each Reload Option is fully exercisable twelve months from the
effective date of grant. The term of each Reload Option shall be equal to the
remaining term (if any) of the underlying Option. No Reload Options shall be
granted following the termination of an Optionee's employment.
(d) The provisions applicable to Options in this Article 5 shall
be equally applicable to all Reload Options.
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ARTICLE 6
RESTRICTED STOCK
6.1 Awards of Restricted Stock. Awards of Restricted Stock may be granted
under the Plan in such form and on such terms and conditions as the Committee
may from time to time approve, including, without limitation, restrictions on
the sale, assignment, transfer or other disposition or encumbrance of such
Shares during the Restricted Period (defined in Section 6.2) and the requirement
that the Participant forfeit such Shares back to the Company without any
consideration paid by the Company therefor upon failure to satisfy the
applicable performance goals within the Restricted Period. Restricted Stock may
be granted alone or in addition to other Awards under the Plan. The grant of any
Restricted Stock by the Company shall be evidenced by a Restricted Stock
Agreement.
6.2 Restricted Period. The Committee shall establish the Restricted Period
with respect to each Award of Restricted Stock. The Committee may, in its sole
discretion, at the time an Award of Restricted Stock is made, prescribe
conditions for the lapse or termination of all or a portion of the restrictions
upon the satisfaction of performance goals prior to the expiration of the
Restricted Period. The Committee may also, in its sole discretion, shorten or
terminate the Restricted Period or waive any conditions for the lapse or
termination of restrictions with respect to all or any portion of the Restricted
Stock. Restricted Stock that is not yet vested may, with the consent of the
Committee, be transferred by a Participant to members of the Participant's
Immediate Family or to a trust, partnership, or other entity for the benefit of
the Participant and/or members of the Participant's Immediate Family, but may
not otherwise be sold, assigned, transferred, made subject to gift, or otherwise
disposed of, mortgaged, pledged or encumbered.
Except as otherwise provided by any change of control provision in a
Participant's Restricted Stock Agreement, a Participant shall cease vesting in
all or any portion of an Award as of the date of his termination of employment
for whatever reason. Any Awards that are not vested as of the date of such
termination shall be forfeited, provided the Committee may, in its discretion,
provide that a Participant whose employment is terminated by the Company without
cause (including as a result of death or disability) and/or following a Change
of Control may vest in all or any portion of his Award. Any Awards not so vested
shall be forfeited.
6.3 Rights of Holders of Restricted Stock. Except as otherwise provided by
the Committee under any Restricted Stock Agreement or except for the
restrictions described in Section 6.2, the Participant shall be the owner of the
Restricted Stock and shall have all the rights of a shareholder, including the
right to receive dividends paid on such Restricted Stock and the right to vote
such Restricted Stock.
6.4 Delivery of Restricted Stock. Restricted Stock awarded to a Participant
under the Plan may be held under the Participant's name in a book entry account
maintained by the Company or, if not so held, stock certificates for Restricted
Stock awarded pursuant to the Plan may be registered in the name of the
Participant and issued and deposited, together with a stock power endorsed in
blank, with the Company or an agent appointed by the Company and shall bear an
appropriate legend restricting the transferability thereof. Subject to Section
9.2 below, a Participant shall be entitled to delivery of stock certificates
only when they become vested in
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accordance with the terms of his or her Award and upon the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Committee.
6.5 Forfeitures. Any Shares of Restricted Stock which are forfeited shall
become the property of the Company and shall again immediately become available
for award under the Plan and all of the rights of such Participant to such
Restricted Stock and all rights as a stockholder with respect to such shares
shall terminate without further obligation on the part of the Company.
ARTICLE 7
ADDITIONAL AWARDS
7.1 Performance Awards. The Committee is authorized to grant Performance
Awards to Participants on the following terms and conditions:
(a) Awards and Conditions. A Performance Award shall confer upon
the Participant rights, valued as determined by the Committee, and payable to,
or exercisable by, the Participant to whom the Performance Award is granted, in
whole or in part, as determined by the Committee, conditioned upon the
achievement of performance criteria determined by the Committee.
(b) Other Terms. A Performance Award shall be denominated in
Shares and may be payable in cash, Shares, other Awards, or other property, and
have such other terms as shall be determined by the Committee.
7.2 Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to Participants. These awards shall consist of the right to the
payment of amounts equal to the value of dividends that may be paid with respect
to Shares in the future. The Committee may provide that Dividend Equivalents
shall be paid or distributed when accrued or shall be deemed to have been
reinvested in additional Shares or Awards, or otherwise reinvested.
7.3 Deferred Stock. The Committee is authorized to grant Deferred Stock to
Participants, on the following terms and conditions:
(a) Award and Restrictions. Subject to Section 9.2, delivery of
Shares will occur upon expiration of the deferral period specified in the
Deferred Stock agreement by the Committee (or, if permitted by the Committee, as
elected by the Participant). In addition, Deferred Stock shall be subject to
such restrictions as the Committee may impose, which restrictions may lapse at
the expiration of the deferral period or at earlier specified times, separately
or in combination, in installments, or otherwise, as the Committee shall
determine and set forth in the Deferred Stock agreement.
(b) Forfeiture. Except as otherwise determined by the Committee,
upon termination of employment for other than cause during the applicable
deferral period, as provided in the Deferred Stock agreement, all Deferred Stock
that is at that time subject to deferral (other than a deferral at the election
of the Participant) shall be forfeited; provided, that the Committee may
provide, by rule or regulation or in any Deferred Stock agreement, or may
determine in any individual case, that restrictions or forfeiture conditions
relating to Deferred Stock will be
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waived in whole or in part in the event of terminations resulting from specified
causes, and the Committee may in other cases waive in whole or in part the
forfeiture of Deferred Stock.
7.4 Stock Appreciation Rights. The Committee is authorized to grant Stock
Appreciation Rights to Participants on the following terms and conditions:
(a) Right to Payment. A Stock Appreciation Right shall confer on
the Participant to whom it is granted a right to receive payment in cash, upon
exercise of a Stock Appreciation Right, an amount equal to the excess of (i) the
fair market value of one Share on the date of exercise (or, if the Committee
shall so determine in the case of any such right, other than one related to an
Incentive Stock Option, the fair market value of one Share at any time during a
specified period before or after the date of exercise or Change of Control) over
(ii) the grant price of the Stock Appreciation Right as determined by the
Committee as of the date of grant of the Stock Appreciation Right.
(b) Other Terms. The Committee shall determine the time or times
at which a Stock Appreciation Right may be exercised in whole or in part, the
method of exercise, method of settlement, form of consideration payable in
settlement, method by which Shares will be delivered or deemed to be delivered
to Participants, and any other terms and conditions of any Stock Appreciation
Right. Such Stock Appreciation Rights shall be evidenced by agreements in such
form as the Committee shall from time to time approve.
7.5 Bonus and Other Stock-Based Awards. The Committee is authorized to
grant to Participants such other Awards that are denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to,
Shares, as deemed by the Committee to be consistent with the purposes of the
Plan, including without limitation, Shares awarded purely as a "bonus" and not
subject to any restrictions or conditions, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Shares, purchase
rights, and Awards valued by reference to book value of Shares or the value of
securities of or the performance of a Participating Company. The Committee shall
determine the terms and conditions of such Awards, which may include performance
criteria. Shares delivered pursuant to an Award in the nature of a purchase
right granted under this Section 7.5 shall be purchased for such consideration,
paid for at such times, by such methods, and in such forms, including, without
limitation, cash, Shares, other Awards, or other property, as the Committee
shall determine.
7.6 Performance-Based Awards. Performance Awards, performance-based
Restricted Stock, and certain other Share-based Awards subject to performance
criteria are intended to be "qualified performance-based compensation" within
the meaning of Section 162(m) of the Code and shall be paid solely on account of
the attainment of one or more preestablished, objective performance goals within
the meaning of Section 162(m) and the regulations thereunder. As selected by the
Committee, the performance goal shall be the attainment of one or more of the
preestablished amounts of sales revenue, net income, operating income, cash
flow, return on assets, return on equity, return on capital or total shareholder
return of the Company or any subsidiary or division thereof.
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The payout of any such Award to a Participant may be reduced, but not
increased, based on the degree of attainment of other performance criteria or
otherwise at the direction of the Committee.
7.7 Maximum Individual Awards. No individual may be granted in any calendar
year more than 1,000,000 Shares subject to any combination of Performance
Awards, Restricted Stock, or other Share-based Awards subject to performance
criteria. The Share amounts in this Section 7.7 are subject to adjustment under
Section 9.5 and are subject to the Plan maximum under Article 4.
7.8 Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan, may in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution for any other Award
granted under the Plan. If an Award is granted in substitution for another
Award, the Committee shall require the surrender of such other Award in
consideration for the grant of the new Award. Awards granted in addition to or
in tandem with other Awards may be granted either as of the same time as or a
different time from the grant of such other Awards.
7.9 Exchange Provisions. The Committee may at any time offer to exchange or
buy out any previously granted Award for a payment in cash, Shares, other Awards
or other property based on such terms and conditions as the Committee shall
determine and communicate to the Participant at the time that such offer is
made.
7.10 Term of Awards. The term of each Award shall be for such period as may
be determined by the Committee; provided, that in no event shall the term of any
Award granted under this Article 7 exceed a period of ten years from the date of
its grant.
7.11 Form of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award agreement, payments to be made by a Participating Company upon
the grant or exercise of an Award may be made in such forms as the Committee
shall determine, including without limitation, cash, Shares, other Awards, or
other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. Such payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments denominated in
Shares.
ARTICLE 8
CHANGE OF CONTROL
8.1 Effect of Change of Control on Prior Awards. Outstanding Awards issued
under the Plan prior to the Effective Date shall be governed by the provisions
of the Plan as in effect immediately before the Effective Date with respect to
any accelerated vesting upon a Change of Control.
8.2 Effect of Change of Control. Awards granted on or after the Effective
Date shall, following a Change of Control and subject to paragraph 8.3, become
vested and, with respect to any Award that is an Option, exercisable upon the
first to occur of the following events: (i) the employment of the Optionee or
Participant is terminated for reasons other than for Cause within six (6) months
following the effective date of the Change of Control or (ii) the Optionee or
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Participant voluntarily terminates his employment for Good Reason within six (6)
months following the effective date of the Change of Control or (iii) the
expiration of the six (6) month period following the effective date of a Change
of Control. If an Option becomes vested and exercisable under this paragraph,
then the Option shall remain exercisable for a period of not less than six (6)
months from the date the Option becomes vested hereunder, provided that the
exercise period for Incentive Stock Options such period shall not extend beyond
the period provided under Section 5.1(b) of the Plan.
8.3 Authority to Vary Terms of Awards. Notwithstanding the above, the
Committee shall have the power to provide in each Award Agreement the treatment
or disposition of any Award upon a Change of Control, including, without
limitation, providing for vesting upon the occurrence of a Change of Control,
providing that an Award shall not become vested upon a Change of Control,
providing for vesting upon termination of employment following a Change of
Control, providing for vesting upon termination in anticipation of a Change of
Control, providing for the surrender or substitution of any Award for
consideration in connection with a Change of Control, or providing for the
payment of any amounts in connection with any Awards as the result of a Change
of Control.
ARTICLE 9
ADDITIONAL PROVISIONS APPLICABLE TO AWARDS
9.1 Award Agreements. Each Award granted hereunder shall be evidenced by a
written Award Agreement that shall specify the number of Shares subject to the
Award, the installments, if any, in which the Award shall vest and become
exercisable, the date of the expiration of such Award, and such other terms and
conditions as the Committee shall determine.
9.2 Issuance of Shares.
(a) As soon as practicable after the exercise of an Option or
settlement of any other Award, including full payment for the Shares purchased
pursuant thereto and the satisfaction of any withholding-tax liability arising
with respect to the settlement of any Option or Award, the Company shall duly
issue such Shares to the Optionee/Participant and shall cause to be delivered to
the Optionee/Participant a stock certificate or certificates representing such
Shares and bearing such restrictive legends as the Committee may deem necessary
or appropriate to ensure compliance with all applicable laws, rules and
regulations.
(b) Notwithstanding anything to the contrary contained herein, the
Company may, in its discretion, defer for not more than six (6) months the
issuance and delivery of Shares otherwise deliverable hereunder until completion
of the process of listing the Shares on a national exchange or the filing,
registration or other qualification of the Shares under any state or federal
law, rule or regulation as the Company may deem appropriate, provided that the
Company diligently pursues such listing, registration or qualification. The
Company may require any Participant to make such representations and furnish
such information as the Company may deem appropriate in connection with the
issuance or delivery of Shares, in compliance with all applicable laws, rules
and regulations.
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(c) The Committee may impose such restrictions on any Shares
issued in settlement of any award as it may deem advisable, including without
limitation restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, under any blue-sky or state securities laws applicable to
such Shares and under any applicable stockholders' or other agreement.
9.3 Taxes and Withholding.
(a) As a precondition to the delivery of any Shares or other
payment in settlement of any Award, the Company shall have the right and
authority to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state and local taxes,
domestic or foreign, that are required by law or regulation to be withheld by
the Company or any parent or subsidiary of the Company upon delivery of Shares
or other payment under any Award. The Optionee/Participant may discharge such
obligation in whole or in part with respect to the minimum withholding-tax
liability arising upon the settlement of any Award (but no more than such
minimum) (a) by transferring and delivering to the Company previously owned
Shares, which shall be valued at their fair market value; (b) with the prior
approval of the Committee, by authorizing the Company in writing to deduct and
retain Shares, valued at their fair market value, as of the date of exercise,
from the Shares otherwise to be issued upon settlement; or (c) with the prior
approval of the Committee, by any combination of the foregoing methods of
payment.
(b) A Participant who files an election with the Internal Revenue
Service to include the fair market value of any Award in gross income at such
time as may be permitted under Code Section 83(b) shall promptly furnish the
Company with a copy of such election together with the amount of any federal,
state, local or other taxes, domestic or foreign, required to be withheld to
enable the Company to claim an income tax deduction with respect to such
election.
9.4 Competition. Notwithstanding anything to the contrary contained in this
Plan, the Committee may provide under the terms of any Option or Award agreement
that all rights of the Optionee/Participant in any Option or Award, to the
extent such rights have not already expired or been exercised, shall terminate
and be extinguished immediately if a Optionee/Participant engages in competition
(as defined in the applicable Award Agreement or Employment Agreement) with the
Participating Company Group, whether during and/or after his or her employment
with the Participating Company Group. In the event that a Optionee/Participant
receives or exercises an Option or other Award at a time when he or she has
already, without the Company's knowledge or consent, commenced engaging in
competition with the Participating Company Group, the Company may, by notice
given to the Optionee/Participant, rescind and void such purported transfer,
Award or exercise, and the Optionee/Participant shall return to the Company
immediately upon demand (i) any and all stock certificates representing Shares
issued to him or her upon the exercise at such time of such Option or Award and
still owned by the Optionee/Participant, in exchange for which the Company shall
return to the Optionee/Participant any consideration paid for such Shares, or
(ii) any other consideration received by the Optionee/Participant under the
Option or Award. The Option or Award agreements may include such other
restrictive covenants as the Committee in its discretion deems necessary or
appropriate for the reasonable protection of the Participating Company Group's
business interests.
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9.5 Changes in Capital Structure. In the event that the Company hereafter
declares a dividend payable in, or subdivides or combines Shares, or engages in
a recapitalization, reorganization, merger, consolidation, split-up, transfer of
assets, combination or exchange of Shares, Change of Control or any other event
affecting the Shares, the Committee shall make appropriate adjustment in the
number (including without limitation the aggregate numbers specified in Section
4.1 and Section 5.1(e)) and kind of Shares that are or may become subject to
Awards granted or to be granted hereunder, and in the exercise price of Options
or Awards granted hereunder, and shall take such other action as in its judgment
shall be necessary or appropriate to equitably preserve each
Optionee/Participant's rights with respect to such Options and/or Awards
substantially proportionate to his or her respective rights existing prior to
such event. The decision of the Committee with respect to any matter referred to
in this Section 9.5 shall be conclusive and binding upon each
Optionee/Participant. The Company shall give each Optionee/Participant written
notice of any adjustments to an Option or Award of the Optionee/Participant or
the terms and conditions thereof made pursuant to this Section 9.5. Nothing
herein is intended to preserve an Optionee/Participant's equity interest in the
Company against dilution resulting from the issuance of additional securities by
the Company subsequent to the grant of an Option or Award.
ARTICLE 10
BENEFICIARY DESIGNATION
Each Optionee/Participant may, from time to time, designate a
beneficiary or beneficiaries (who may be named contingently or successively) who
shall acquire the Optionee/Participant's rights under the Plan in case the
Optionee/Participant dies before exercising all of such rights. A
Optionee/Participant may designate such beneficiary or beneficiaries by giving
the Company written notice thereof in a form prescribed by or acceptable to the
Company. Each such designation shall revoke all prior designations by the
Optionee/Participant, and such notice shall be effective only when given to the
Company during the Optionee/Participant's lifetime. In the absence of an
effective designation or if all duly designated beneficiaries predecease the
Optionee/Participant, any rights remaining unexercised at the
Optionee/Participant's death shall be exercised by his or her estate. In the
event of a Optionee/Participant's death, all actions that he or she would
otherwise be entitled to take under the Plan may be taken by his or her
beneficiary or estate, as the case may be, and all references in this Plan to
"Optionee" or "Participant" shall, under such circumstances, be deemed to
include such beneficiary or estate.
ARTICLE 11
RIGHTS OF PARTICIPANTS
No Optionee or Participant shall acquire any rights as a stockholder of
the Company hereunder unless and until, and except to the extent that, a stock
certificate representing Shares duly purchased by such Optionee/Participant
pursuant to any Option or Award has been issued to such Optionee/Participant.
Nothing in this Plan or any Option or Award Agreement shall confer upon any
Optionee or Participant any right to continue in the employment of the
Participating Company Group, or to serve as a director or consultant thereof, or
interfere in any way with the right of a Participating Company to terminate his
or her employment, directorship, or consulting relationship at any time. Unless
specifically provided otherwise, no grant of an Option or Award
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shall be deemed salary or compensation for the purpose of computing benefits
under any employee benefit plan or other arrangement of a Participating Company
for the benefit of its employees unless the Participating Company shall
determine otherwise. No Optionee or Participant shall have any claim to an
Option or Award until it is actually granted under the Plan. To the extent that
any person acquires a right to receive payments from the Company under the Plan,
such right shall, except as otherwise provided by the Committee, be no greater
than the right of an unsecured general creditor of the Company. All payments to
be made hereunder shall be paid from the general funds of the Company, and no
special or separate fund shall be established and no segregation of assets shall
be made to assure payment of such amounts, except as otherwise provided by the
Committee.
ARTICLE 12
AMENDMENT, MODIFICATION AND TERMINATION
12.1 Amendment. The Committee may at any time and from time to time amend,
modify, suspend or terminate the Plan in whole or in part.
12.2 Awards Previously Granted. Notwithstanding the provisions of Section
12.1, no amendment, modification, suspension or termination of the Plan shall be
effective to the extent it adversely affects in any material way any Award
previously granted under the Plan, unless the Optionee or Participant holding
such Option or Award consents in writing thereto. Subject to the terms of the
Plan, the Committee may modify the form, terms and conditions of any outstanding
Option or Award in such manner, not unfavorable to the Optionee/Participant, as
the Committee in its discretion may determine and, with respect to any
Optionee/Participant subject to foreign tax laws or regulations, the Committee
may vary the form, terms and conditions of any Option or Award as the Committee
in its discretion may deem necessary or advisable to allow the
Optionee/Participant to qualify for favorable tax treatment under such foreign
tax laws or regulations. Notwithstanding the foregoing or any other provision of
the Plan or any Award Agreement, following a Change of Control, no changes in
the Plan and no adjustments, determinations or other exercises of discretion
that are made, pursuant to the Plan or any Award Agreement, by the Board or the
Committee shall be effective if and to the extent that they would have the
effect of diminishing the rights of any Optionee under the terms of the Plan or
any Award Agreement.
ARTICLE 13
INDEMNIFICATION
Any claim under the Plan shall be solely the obligation of the Company.
No member of the Board or the Committee shall be personally liable by reason of
any contract or other instrument executed by such member (or on behalf of such
member) in his or her capacity as a member of the Board or Committee or by
reason of any mistake of judgment made by him or her in good faith in such
capacity. The Company shall indemnify each employee, officer or director of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan may be allocated or delegated and shall hold such
person harmless against any loss, liability, claim, cost or expense (including
reasonable attorneys' fees and any sum paid in
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settlement of a claim with the approval of the Committee) incurred by or
asserted against such person as a result of or arising out of any act or
omission to act in connection with the Plan, unless arising out of such person's
fraud or bad faith. The right of indemnification provided for in this Article 13
shall be in addition to any rights of indemnification to which such person may
be entitled under the certificate of incorporation or bylaws of the Company, as
a matter of law or otherwise, or any power that the Company may have to
indemnify such person or hold him or her harmless.
ARTICLE 14
DURATION OF PLAN
This Plan shall be effective on the date of its adoption by the
Committee and shall remain in effect, subject to the right of the Committee to
amend, modify, suspend or terminate the Plan pursuant to Article 12, until all
Shares have been issued in accordance herewith. Any Awards granted prior to
approval of the Plan by the stockholders of the Company shall be made subject to
such approval.
ARTICLE 15
SUCCESSORS
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company and shall
survive any purchase, merger, consolidation or other disposition of all or
substantially all of the business and/or assets of the Company.
ARTICLE 16
MISCELLANEOUS
16.1 Applicable Law. The terms of the Plan shall be binding upon the
Company, and its successors and assigns. The Plan and the grant of Options
hereunder shall be subject to all applicable federal and state laws, rules, and
regulations and to such approvals by any United States government or regulatory
agency as may be required. To the extent not preempted by federal law, this Plan
and all actions taken hereunder shall be governed by the laws of the State of
North Carolina.
16.2 Severability. If any provision of this Plan or an Award Agreement is or
becomes or is deemed invalid, illegal, or unenforceable in any jurisdiction, or
would disqualify the Plan or any Award Agreement under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended to conform
to applicable laws or if it cannot be construed or deemed amended without, in
the determination of the Committee, materially altering the intent of the Plan
or the Award Agreement, it shall be stricken and the remainder of the Plan or
the Award Agreement shall remain in full force and effect.
16.3 Gender and Number. Except when otherwise indicated by the context,
references herein to one gender shall include the other gender, and references
herein to the singular or plural shall include the plural or singular.
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16.4 Headings. The headings of the Articles and Sections of the Plan are for
convenience of reference only and shall not be considered in interpreting or
construing the Plan.
IN WITNESS WHEREOF, the undersigned officer of the Company certifies
that the foregoing Plan was duly adopted by the Committee as of the 9th day of
April, 2001.
SPECTRASITE HOLDINGS, INC.
By: /s/ Melvin L. Asbury
---------------------------------------
Title: Senior Vice President - HR
------------------------------------
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Appendix B
2002 AMENDMENT TO
SPECTRASITE HOLDINGS, INC.
EMPLOYEE STOCK PURCHASE PLAN
SpectraSite Holdings, Inc., a Delaware corporation (the "Company") hereby adopts
this 2002 Amendment to the Company's Employee Stock Purchase Plan (the "Plan")
to be effective upon approval of such Amendment by the Company's stockholders.
1. In Section 3 of the Plan, the first sentence thereof is deleted in its
entirety and the following is substituted in lieu thereof:
"There shall be reserved and made available for purchase under the Plan
3,000,000 Shares."
2. Except as otherwise provided herein, the Plan shall remain in full
force and effect.
SPECTRASITE HOLDINGS, INC.
EMPLOYEE STOCK PURCHASE PLAN
The purpose of the SpectraSite Holdings, Inc. Employee Stock Purchase
Plan (the "Plan") is to provide employees of SpectraSite Holdings, Inc.
(hereinafter referred to as the "Company") and its Designated Subsidiaries with
the opportunity to purchase shares of the Common Stock of the Company through
accumulated payroll deductions. It is the intention of the Company to have the
Plan qualify as an "Employee Stock Purchase Plan" under Code Section 423. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
1. Definitions.
a. "Beneficiary" shall have the meaning set forth in
Section 22.
b. "Board" shall mean the Board of Directors of the
Company.
c. "Business Day" shall mean any day on which the
Company is scheduled to be open for business.
d. "Code" shall mean the Internal Revenue Code of 1986,
as amended.
e. "Common Stock" shall mean the common stock of the
Company.
f. "Compensation" shall mean all base straight-time
gross earnings and commissions, excluding payments
for overtime, shift premium, incentive compensation,
incentive payments, bonuses, and other compensation,
but including payroll deductions for cash or deferred
arrangements under Code Section 401(k), for cafeteria
contributions under Code Section 125 and other
similar deductions from gross earnings.
g. "Designated Subsidiary" shall mean any Subsidiary
that has been designated by the Board from time to
time in its sole discretion as eligible to
participate in the Plan.
h. "Eligible Employee" shall have the definition set
forth in Section 5.
i. "Exercise Date" shall mean with respect to any
offering to purchase stock under the Plan, the
Business Day immediately following the last day of
the Offering Period.
j. "Fair Market Value" shall mean, as of any date, the
value of Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national
market system, including without limitation
the Nasdaq National Market or The Nasdaq
SmallCap Market of the Nasdaq Stock Market,
its Fair Market Value shall be the closing
sales price for such stock (or the closing
bid, if no sales
were reported) as quoted on such exchange or
system for the last market trading day prior
to the date of determination, as reported in
The Wall Street Journal or such other source
as the Board deems reliable;
(ii) If the Common Stock is regularly quoted by a
recognized securities dealer but selling
prices are not reported, its Fair Market
Value shall be the mean of the average of
the closing bid and asked prices for the
Common Stock for the last market trading day
prior to the date of determination, as
reported in The Wall Street Journal or such
other source as the Board deems reliable; or
(iii) In the absence of an established market for
the Common Stock, the Fair Market Value
thereof shall be determined in good faith by
the Board, in its sole discretion.
k. "Grant Date" shall mean the first Business Day of each
Offering Period.
l. "Offering Period" shall mean any six (6) month period
beginning on a date determined by the Stock Plan Committee for
the grant of Stock Purchase Rights.
m. "Participant" shall mean an Eligible Employee who has elected
to participate in the Plan for an Offering Period pursuant to
Section 6.
n. "Participant's Family" shall mean the Participant's spouse,
spousal equivalent, ancestors, lineal descendants and
siblings.
o. "Participation Forms" shall mean such forms as the Stock Plan
Committee may require Eligible Employees to complete as a
pre-condition to their becoming Participants.
p. "Payroll Deduction Account" shall mean the account on the
Company's books and records to which the amount of a
Participant's payroll deductions under Section 6 are
allocated.
q. "Plan Year" shall mean the twelve (12) month period commencing
January 1 and ending December 31 of each year.
r. "Purchase Price" shall mean the purchase price for a Share as
set forth in Section 8(b).
s. "Shares" shall mean shares of the Class A Common Stock, $.01
par value per share, of the Company.
t. "Stock Plan Committee" shall mean the committee appointed by
the Board to administer the Plan.
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u. "Stock Purchase Right" shall mean a right granted to an
Eligible Employee by the Stock Plan Committee pursuant to the
Plan to purchase Shares at the end of an Offering Period.
v. "Subsidiary" shall mean any present or future corporation,
partnership, other entity or affiliate which (i) would be a
"subsidiary corporation" of the Company within the meaning of
Section 424(f) of the Code and the regulations promulgated
thereunder, and (ii) is designated as a participant in the
Plan by the Stock Plan Committee.
2. Administration. The Plan shall be administered by the Stock
Plan Committee. The Stock Plan Committee shall have the discretionary authority
to make rules and regulations for the administration of the Plan and to
interpret the Plan. The Stock Plan Committee's interpretations and decisions
with regard thereto shall be final, binding and conclusive on all interested
parties. No member of the Stock Plan Committee shall participate in any decision
respecting his or her interest as a Participant in the Plan (other than a
decision respecting the interest of a group of similarly situated Plan
Participants which includes the Stock Plan Committee member). All Shares
purchased pursuant to the exercise of a Stock Purchase Right issued under the
Plan may be held in individual employee accounts for a period equal to the
greater of two years from the Grant Date of the Stock Purchase Rights by which
such Shares were acquired or one year from the date of transfer of Shares to the
Participant upon exercise of a Stock Purchase Right, subject to the Plan
Participant's right to sell such Shares.
3. Stock Subject to the Plan. There shall be reserved and made
available for purchase under the Plan 1,000,000 Shares. In the event any Stock
Purchase Right granted under the Plan is canceled, the number of Shares no
longer subject to such Stock Purchase Right shall automatically become available
for new awards under the Plan.
4. Offerings. On each Grant Date, the Stock Plan Committee shall
grant each Eligible Employee a Stock Purchase Right to purchase Shares under the
Plan.
5. Eligible Employees. All employees of the Company and the
Designated Subsidiaries who are employed by the Company and/or
a Designated Subsidiary on the date their participation in the Plan is to become
effective shall be eligible to participate in the Plan for the Offering Period
commencing on the Grant Date, except an employee (i) whose customary employment
is less than twenty (20) hours per week or not more than five (5) months in any
calendar year, or (ii) who, if his or her Stock Purchase Right were exercised
immediately after the Grant Date, would own five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Company. For
purposes of the preceding sentence, the rules of Sections 423(b)(3) and 424(d)
of the Code shall apply in determining the employee's percentage of stock
ownership.
6. Participation.
a. An Eligible Employee may elect to become a
Participant as of any Grant Date by completing the
Participation Forms and delivering them to the
Company's payroll department on such date prior to
the Grant Date as the
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Stock Plan Committee may determine. The
Participation Forms will authorize a regular
payroll deduction from the Participant's
Compensation payments, commencing as of the Grant
Date, in such amount as the Participant may elect.
All amounts deducted hereunder from the
Participant's Compensation payments shall be
allocated by the Company to the Participant's
Payroll Deduction Account and shall not accrue
interest.
b. A Participant may not change the amount of his or her
payroll deduction during any Offering Period but may
cancel his or her payroll deduction in accordance
with Section 7.
c. Once an Eligible Employee completes the Participation
Forms and delivers them to the Company, the election
contained therein shall apply to each of the next
succeeding Offering Periods until the Participant
revokes such election.
7. Cancellation. A Participant may, at any time and for any
reason, cancel his or her payroll deduction authorization and there upon shall
permanently withdraw the entire balance accumulated in the Participant's Payroll
Deduction Account (without any interest thereon). Any cancellation must be in
writing and must be received by the Company's payroll department at least five
(5) Business Days prior to the Exercise Date. Upon cancellation, the Participant
shall cease to participate in the Plan for the remainder of the Offering Period
and shall not participate for any subsequent Offering Periods unless and until
he or she has again submitted Participation Forms and otherwise complied with
the provisions of Section 6(a). A Participant may not withdraw all or less than
all of his or her Payroll Deduction Account except upon cancellation of his or
her payroll deduction authorization, in which event the entire Payroll Deduction
Account shall be withdrawn.
8. Stock Purchase Rights.
a. Each Eligible Employee who has elected to become a
Participant for any Offering Period as of the Grant
Date shall be granted, on the Grant Date of such
Offering Period, a Stock Purchase Right to purchase
such number of Shares as shall equal the total dollar
amount allocated to the Participant's Payroll
Deduction Account on the Exercise Date divided by the
Purchase Price. No Participant may be granted a Stock
Purchase Right which permits him or her during any
one calendar year to purchase Shares under the Plan,
and any other stock purchase plan of the Company, the
Fair Market Value of which on the Grant Date exceeds
$25,000 for such Calendar Year (or such other limit,
if any, as may be imposed by the Code).
b. The Purchase Price for each Share subject to a Stock
Purchase Right issued under the Plan shall be the
lesser of: (i) eighty-five (85%) percent of the Fair
Market Value of a Share at the Grant Date or (ii)
eighty-five percent (85%) of the Fair Market Value of
a Share at the Exercise Date; provided however, that
the Purchase Price may be adjusted by the Board
Pursuant to Section 15.
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c. Unless a Participant previously has canceled his or
her participation in the Plan, the Participant shall
be deemed to have exercised his or her Stock Purchase
Right in full as of the Exercise Date. All amounts
allocated to the Participant's Payroll Deduction
Account shall be applied to the purchase of whole
Shares at the Purchase Price. Fractional Shares will
not be issued under the Plan and any balance
remaining in the Participant's Payroll Deduction
Account after the maximum number of whole Shares have
been purchased shall be rolled forward and applied to
the next succeeding Offering Period or, if the
Participant so elects, refunded to the Participant
without interest.
9. Registration of Certificates. Share certificates (or other
evidence of ownership) reflecting the Shares purchased during an Offering Period
by a Participant hereunder shall be issued as soon as practicable after each
Exercise Date and may be registered only in the name of the Participant, or, if
the Participant so indicates on his or her election form, in joint tenancy with
a member of the Participant's Family, with right of survivorship. A Participant
who is a resident of a jurisdiction which does not recognize such a joint
tenancy may have certificates registered in the Participant's name as tenants in
common or as community property with a member of the Participant's Family,
without right of survivorship.
10. Rights as a Stockholder. No Participant shall acquire any
rights or privileges as a stockholder of the Company unless and until, and
except to the extent that, Shares have been purchased on behalf of the
Participant and stock certificates (or other evidence of ownership) with respect
to such Shares have been issued.
11. Rights on Resignation or Termination of Employment. In the
event of a Participant's resignation or termination of employment with the
Company and the Designated Subsidiaries for any reason whatsoever including by
resignation, or by reason of disability, retirement or death (other than a
transfer of employment between the Company and the Designated Subsidiaries), any
outstanding Stock Purchase Rights previously granted to such Participant shall
be canceled and all amounts in his or her Payroll Deduction Account, if any,
shall be refunded without interest as soon as administratively practicable
following the cancellation of such Stock Purchase Rights.
12. Rights Not Transferable. A Participant shall not assign, sell,
encumber, transfer or otherwise dispose of any rights or interests under the
Plan. Any attempted disposition in violation of the preceding sentence shall be
null and void. Any Stock Purchase Rights hereunder must be exercised by the
employee Participant during his or her lifetime.
13. Application of Funds. All amounts allocated to a Participant's
Payroll Deduction Account under the Plan shall be available for use by the
Company for any corporate purpose prior to its application to the purchase of
Shares and a Participant shall not have any claim, right to or interest in his
or her Payroll Deduction Account other than as a general unsecured creditor of
the Company.
14. Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.
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a. Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number
of Shares subject to the Plan, as well as the
Purchase Price and the number of Shares covered by
each Stock Purchase Right under the Plan which has
not yet been exercised shall be proportionately
adjusted for any increase or decrease in the number
of issued Shares resulting from a stock split,
reverse stock split, stock dividend, combination or
reclassification of the Class A Common Stock, or any
other increase or decrease in the number of shares of
Class A Common Stock effected without receipt of
consideration by the Company; provided, however, that
conversion of any convertible securities of the
Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment
shall be made by the Board, whose determination in
that respect shall be final, binding and conclusive
on all parties. Except as expressly provided herein,
no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by
reason thereof shall be made with respect to, the
number or price of Shares subject to a Stock Purchase
Right.
b. Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company,
the Offering Period then in progress shall be
shortened by setting a new Exercise Date (the "New
Exercise Date") and shall terminate immediately prior
to the consummation of such proposed dissolution or
liquidation, unless provided otherwise by the Board.
The New Exercise Date shall be before the date of the
Company proposed dissolution or liquidation. The
Board shall notify each Participant in writing, at
least ten (10) Business Days prior to the New
Exercise Date, that the Exercise Date for the
Participant's Stock Purchase Right has been changed
to the New Exercise Date and that the Participant's
Stock Purchase Right shall be exercised automatically
on the New Exercise Date, unless prior to such date
the Participant has withdrawn from the Offering
Period as provided in Section 7 hereof.
c. Merger or Asset Sale. In the event of a proposed sale
of all or substantially all of the assets of the
Company, or the merger of the Company with or into
another corporation, each outstanding Stock Purchase
Right shall be assumed or an equivalent Stock
Purchase Right substituted by the successor
corporation or a Parent or Subsidiary of the
successor corporation. In the event that the
successor corporation refuses to assume or substitute
for the Stock Purchase Right, any Offering Period
then in progress shall be shortened by setting a new
Exercise Date (the "New Exercise Date") and the
Offering Period shall end on the New Exercise Date.
The New Exercise Date shall be before the date of the
Company's proposed sale or merger. The Board shall
notify each participant in writing, at least ten (10)
Business Days prior to the New Exercise Date, that
the Exercise Date for the Participant's Stock
Purchase Right has been changed to the
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New Exercise Date and that the Participant's Stock
Purchase Right shall be exercised automatically on
the New Exercise Date, unless prior to such date the
Participant has withdrawn from the Offering Period as
provided in Section 7 hereof.
15. Amendment or Termination of the Plan.
a. The Board may at any time, and for any reason,
terminate or amend the Plan. No such termination can
affect Stock Purchase Rights previously granted,
provided that an Offering Period may be terminated by
the Board of Directors on any Exercise Date if the
Board determines that the termination of the Offering
Period or the Plan is in the best interests of the
Company. Except as provided in Section 14 and this
Section 15 hereof, no amendment may make any change
in any Stock Purchase Right theretofore granted which
adversely affects the rights of any Participant. To
the extent necessary to comply with Section 423 of
the Code (or any successor rule or provision or any
other applicable law, regulation or stock exchange
rule), the Company shall obtain shareholder approval
in such a manner and to such a degree as required.
b. Without shareholder consent and without regard to
whether any Participant rights may be considered to
have been "adversely affected," the Board (or a
designated committee) shall be entitled to change the
Offering Period, limit the frequency and/or number of
changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to
amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the
amount designated by a Participant in order to adjust
for delays or mistakes in the Company's processing of
properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or
accounting and crediting procedures to ensure that
amounts applied toward the purchase of Shares for
each Participant properly correspond with amounts
withheld from the participant's Compensation, and
establish such other limitations or procedures as the
Board (or a designated committee) determines in its
sole discretion advisable which are consistent with
the Plan.
c. In the event the Board determines that the ongoing
operation of the Plan may result in unfavorable
financial accounting consequences for the Company,
the Board may, in its sole discretion and, to the
extent necessary or desirable, modify or amend the
Plan to reduce or eliminate such accounting
consequence including, but not limited to:
(i) altering the Purchase Price for any Offering
Period including an Offering Period underway
at the time of the change in Purchase Price;
(ii) shortening any Offering Period so that the
Offering Period ends on a new Exercise Date,
including an Offering Period underway at the
time of the Board action; and
(iii) allocating shares.
Such modifications or amendments shall not require
stockholder approval or the consent of any
Participants.
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d. If the Board determines that, on a given Exercise Date, the
number of Shares with respect to which Stock Purchase Rights
are to be exercised may exceed (i) the number of Shares that
were available for sale under the Plan on the Grant Date of
the applicable Offering Period or (ii) the number of Shares
available for sale under the Plan on such Grant Date, the
Board may in its sole discretion (x) provide that the
Company shall make a pro rata allocation of the Shares
available for purchase on such Grant Date or Exercise Date,
as applicable, in as uniform a manner as shall be
practicable and as it shall determine in its sole discretion
to be equitable among all Participants exercising Stock
Purchase Rights to purchase Shares on such Exercise Date.
The Company may make pro rata allocation of the Shares
available on the Grant Date of any applicable Offering
Period pursuant to the preceding sentence, notwithstanding
any authorization of additional Shares for issuance under
the Plan by the Company's shareholders subsequent to such
Grant Date.
16. Plan Share Purchases. The Stock Plan Committee may purchase
outstanding Shares on behalf of the Plan, upon such terms as the Stock Plan
Committee may approve, or may cause the Company to issue authorized but unissued
Shares, for delivery to Participants upon their exercise of Stock Purchase
Rights under the Plan.
17. Governing Law. The Plan shall be governed by and construed in
accordance with the laws of the State of North Carolina, without reference to
the principles of choice or conflicts of law thereof.
18. No Liability of Stock Plan Committee Members. No member of the
Stock Plan Committee shall be personally liable (i) by reason of any contract or
other instrument executed by such member or by his or her authorized agent in
his capacity as a member of the Stock Plan Committee, or (ii) for any mistake of
judgment made as a member of the Stock Plan Committee, in good faith and in the
belief that it was in the best interests of the Company, and the Company shall
indemnify and hold harmless each employee, officer and director of the Company
to whom any duty or power relating to the administration or interpretation of
the Plan may be allocated or delegated, against any cost or reasonable expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Board) arising out of any act or omission to act
in connection with the Plan unless arising out of such person's fraud or bad
faith. The indemnification provided for in this Section 18 shall be in addition
to any rights of indemnification such individual has as a director or officer
pursuant to law, or under his or her employer's certificate of incorporation or
by-laws.
19. Conditions Upon Issuance of Shares. Shares shall not be issued
with respect to a Stock Purchase Right unless the exercise of such Stock
Purchase Right and the issuance and delivery of such Shares pursuant thereto
shall comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance. As a condition to the
exercise of a Stock Purchase Right, the Company may require the person
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exercising such Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by law.
20. Successor Company. The obligations of the Company under the
Plan shall be binding upon the successor corporation or organization resulting
from the merger, consolidation or other reorganization of the Company.
21. Withholding. As a precondition to the delivery of any Shares
to a Participant, the Company or, if applicable, the Participant's employer
shall have the right and power to deduct or withhold or require a Participant to
remit an amount sufficient to satisfy federal, state and local taxes, domestic
or foreign, that are required by law or regulation to be withheld upon the
exercise of any Stock Purchase Right or upon the sale of any Shares that are
required by law or regulation to be withheld. In the alternative, the Stock Plan
Committee, in its discretion, may either permit the Participant to discharge in
whole or in part the minimum withholding tax liability arising upon the exercise
of a Stock Purchase Right (a) by transferring and delivering to the Company
Shares having a Fair Market Value at the date of delivery equal to the amount of
such withholding tax liability or (b) by authorizing the Company in writing to
deduct and retain from the Shares otherwise to be transferred to the Participant
upon such exercise Shares having such Fair Market Value at the date of
deduction.
22. Beneficiary. A Participant may file a written designation of a
Beneficiary who is to receive any Shares and/or payment under the Plan in the
event of the Participant's death following his or her exercise of a Stock
Purchase Right. Such designation may be changed by the Participant at any time
by written notice to the Director of Compensation and benefits department of the
Company, but to be effective such notice must be received prior to the
Participant's death. In the event a Participant dies without designating a
Beneficiary, or if the designated Beneficiary predeceases the Participant, the
Participant's spouse or spousal equivalent shall be his or her Beneficiary, or
in the absence of a spouse, the Participant's estate shall be his or her
Beneficiary.
23. Notice of Premature Disposition. A Participant or former
Participant who disposes of Shares acquired under the Plan within (i) two years
of the Grant Date of the Stock Purchase Rights by which such Shares were
acquired, or (ii) twelve months of the date of transfer of Shares to him, shall
notify in writing the Chief Financial Officer of the Company of such disposition
and shall make appropriate arrangements for satisfying income and payroll tax
withholding requirements.
24. Company Payment of Expenses Related to the Plan. The Company
will bear all expenses incurred in administering the Plan, including expenses of
issuing Shares provided hereunder.
25. Plan and Rights to Purchase Common Stock Not to Confer Rights
with Respect to Continuance of Employment. The Plan and any right to purchase
Shares under the Plan shall not confer upon any employee Participant any right
with respect to continuance of employment by the Company or any Designated
Subsidiary and shall not restrict or interfere in any way with the
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right of the Company or any Designated Subsidiary to terminate his or her
employment at any time and for any reason.
26. Gender and Number; Captions. Whenever used in the Plan,
references to one gender shall include the other gender, and references to the
singular shall include the plural, unless the context indicates otherwise. The
captions preceding the Sections of the Plan have been inserted solely as a
matter of convenience and in no way define or limit the scope or intent of any
provisions of the Plan.
27. Effective Date. The Plan shall become effective as of January
1, 2000, subject to the approval of the Board.
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AMENDMENT NUMBER ONE
TO THE
SPECTRASITE HOLDINGS, INC.
EMPLOYEE STOCK PURCHASE PLAN
WHEREAS, the Board of Directors (the "Board") of SpectraSite Holdings,
Inc. (the "Company") has adopted and the stockholders of the Company have
approved the SpectraSite Holdings, Inc. Employee Stock Purchase Plan (the
"Plan"); and
WHEREAS, the Board has determined that it would be in the best interest
of the Company and the employees to amend the definition of compensation used in
the Plan to be compatible with the definition of compensation used by the
Company for other employee benefits and payroll purposes; and
WHEREAS, the Board has also determined that it wishes to permit all of
the Company's U.S. subsidiaries to participate in the Plan; and
WHEREAS, pursuant to the powers of amendment reserved under Section 15
of the Plan, the Board directs the appropriate officers to amend the Plan to
reflect the above changes.
NOW, THEREFORE, the Plan is hereby amended by:
(1) deleting Section 1(f) in its entirety and by substituting the
following therefor:
"Compensation" shall mean gross earnings, commissions, bonuses,
overtime, shift premiums and other compensation, including any payroll
deductions for contributions to a 401(k) plan, cafeteria plan or other
similar payroll deductions, but excluding car allowances, stock
compensation (including income from stock options, stock purchase and
restricted stock awards), relocation and moving expense payments, group
term life insurance benefits, other non-cash "imputed" compensation and
any "gross-up" bonuses paid to assist employees with certain tax
liabilities.
(2) designating all U.S. Subsidiaries as "Designated Subsidiaries"
under Section 1(g).
IN WITNESS WHEREOF, the Plan is hereby amended in accordance with the
provisions above, effective as of July 1, 2000.
SPECTRASITE HOLDINGS, INC.
/s/ Stephen H. Clark
----------------------------
By: Stephen H. Clark
ATTEST:
/s/ John H. Lynch
------------------------
John H. Lynch, Secretary
Appendix C
SPECTRASITE HOLDINGS, INC.
100 REGENCY FOREST DRIVE, SUITE 400
CARY, NORTH CAROLINA 27511
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints Stephen H. Clark and David P. Tomick,
and each of them, as Proxies each with the power to appoint his substitute and
hereby authorizes them to represent and to vote, as designated below, all of the
shares of Common Stock of SpectraSite Holdings, Inc. held of record by the
undersigned on March 29, 2002 at the Annual Meeting of Stockholders to be held
on May 28, 2002 or any adjournments or postponements thereof.
1. ELECTION OF DIRECTORS
Nominees: STOCKHOLDERS MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE
BY DRAWING A LINE THROUGH OR OTHERWISE STRIKING OUT THE NAME
OF SUCH NOMINEE. ANY PROXY EXECUTED IN SUCH MANNER AS NOT TO
WITHHOLD AUTHORITY TO VOTE FOR THE ELECTION OF ANY NOMINEE
SHALL BE DEEMED TO GRANT SUCH AUTHORITY.
Stephen H. Clark
Timothy M. Donahue
James R. Matthews
Thomas E. McInerney
Calvin J. Payne
Michael J. Price
Steven M. Shindler
Lawrence B. Sorrel
Edgar L. Reynolds
[ ] FOR the nominees listed [ ] WITHHOLD AUTHORITY to vote for
above (except as marked to the nominees listed above
the contrary)
2. Approval of an amendment to the Amended and Restated Stock Incentive
Plan providing for automatic annual increases in the maximum number of shares of
our common stock available for issuance thereunder.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of an amendment to the Employee Stock Purchase Plan providing
for an increase in the maximum number of shares of our common stock available
for issuance thereunder from 1,000,000 to 3,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. Ratification of the Board of Directors' selection of Ernst & Young LLP
to serve as the Company's independent accountants for the fiscal year ending
December 31, 2002.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the proxies are authorized to vote on such other
business as may properly come before the meeting.
Please check here if you plan to attend the Annual Meeting. [ ]
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 EACH OF THE PROPOSALS NAMED ABOVE. PLEASE MARK, SIGN,
DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.
Dated:
----------------------------------
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(Signature)
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(Signature if held jointly)
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a
partnership, please sign in partnership name by authorized person.