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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
PCTEL, INC.
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(Name of Registrant as Specified In Its Charter)
PCTEL, INC.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
(PCTEL LOGO)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
---------------------
THURSDAY, JUNE 3, 2004
10:00 A.M.
---------------------
To Our Stockholders:
The 2004 Annual Meeting of Stockholders of PCTEL, Inc., a Delaware
corporation, will be held on Thursday, June 3, 2004 at 10:00 a.m. local time at
our headquarters, located at 8725 West Higgins Road, Suite 400, Chicago,
Illinois 60631 for the following purposes:
1. To elect two Class II directors whose terms will expire at the
2007 annual stockholders' meeting;
2. To ratify the appointment of PricewaterhouseCoopers LLP as our
independent public accountants for the fiscal year ending December 31,
2004; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice. Only stockholders of record at the close of
business on April 19, 2004 are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if he or she has previously returned a
proxy.
Sincerely,
/s/ Martin H. Singer
MARTIN H. SINGER
Chief Executive Officer and
Chairman of the Board of Directors
Chicago, Illinois
April 29, 2004
YOUR VOTE IS IMPORTANT.
PLEASE SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE
BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
PCTEL, INC.
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PROXY STATEMENT FOR THE
2004 ANNUAL MEETING OF STOCKHOLDERS
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GENERAL INFORMATION
The board of directors of PCTEL, Inc. is soliciting proxies for the 2004
Annual Meeting of Stockholders. This proxy statement contains important
information for you to consider when deciding how to vote on the matters brought
before the meeting. Please read it carefully.
Our board of directors has set April 19, 2004 as the record date for the
meeting. Stockholders who owned our common stock at the close of business on
April 19, 2004 are entitled to vote at and attend the meeting, with each share
entitled to one vote. There were 20,890,862 shares of our common stock
outstanding on the record date. On the record date, the closing price of our
common stock on The Nasdaq National Stock Market was $12.69 per share.
This proxy statement is being mailed on or about April 29, 2004 to
stockholders entitled to vote at the meeting.
In this proxy statement:
- "We" and "PCTEL" mean PCTEL, Inc.
- If you hold shares in "street name," it means that your shares are held
in an account at a brokerage firm and the stock certificates and record
ownership are not in your name.
- "NASD" means the National Association of Securities Dealers.
- "SEC" means the Securities and Exchange Commission.
- "Beneficial ownership" of stock is defined under various SEC rules in
different ways for different purposes, but it generally means that,
although you (or the person or entity in question) do not hold the shares
of record in your name, you do have investment or voting control (and/or
an economic or "pecuniary" interest) in the shares through an agreement,
relationship or the like.
QUESTIONS AND ANSWERS
Q: WHEN AND WHERE IS THE STOCKHOLDER MEETING?
A: Our annual meeting of stockholders is being held on Thursday, June 3, 2004 at
10:00 a.m. at our headquarters, located at 8725 West Higgins Road, Suite 400,
Chicago, Illinois 60631.
Q: WHY AM I RECEIVING THIS PROXY STATEMENT AND PROXY CARD?
A: You are receiving this proxy statement and the accompanying proxy card
because you owned shares of our common stock on the record date. This proxy
statement describes issues on which we would like you, as a stockholder, to
vote. It also gives you information on these issues so that you can make an
informed decision. The proxy card is used for voting.
Q: WHAT IS THE EFFECT OF SIGNING AND RETURNING MY PROXY CARD?
A: When you sign and return the proxy card, you appoint Martin H. Singer and
John Schoen as your representatives at the meeting. Mr. Singer is our Chief
Executive Officer and Chairman of the Board and Mr. Schoen is our Chief
Operating Officer and Chief Financial Officer. Messrs. Singer and Schoen will
vote your shares at the meeting as you have instructed them on the proxy
card. This way, your shares will be voted whether or not you attend the
annual meeting. Even if you plan to attend the meeting, it is a good idea to
complete, sign and return your proxy card or vote via the Internet or
telephone in advance of the meeting just in case your plans change. You can
vote in person at the meeting even if you have already sent in your proxy
card.
If an issue comes up for a vote at the meeting that is not described in this
proxy statement, Messrs. Singer and Schoen will vote your shares, under your
proxy, in their discretion.
If you do not indicate on the proxy card how you want your votes cast, the
proxies (as your representatives) will vote your shares FOR each of the
proposals.
Q: WHAT AM I VOTING ON?
A: You are being asked to vote on the following two proposals:
- the election of two directors whose terms will expire at the 2007 annual
stockholders' meeting; and
- the ratification of the appointment of PricewaterhouseCoopers LLP as our
independent public accountants for the fiscal year ending December 31,
2004.
Q: HOW DO I VOTE?
A: There are four methods by which you may vote. Please see the detailed
instructions provided on your proxy card for more information on each method.
- Place your vote by telephone;
- Place your vote via the Internet;
- Mail in your completed, signed and dated proxy card; or
- Vote in person by attending our annual meeting.
Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?
A: It means that you have multiple accounts with the transfer agent and/or with
stockbrokers. Please sign and return all proxy cards to ensure that all of
your shares are voted.
Q: WHAT IF I CHANGE MY MIND AFTER I RETURN MY PROXY CARD?
A: You may revoke your proxy (that is, cancel it) and change your vote at any
time prior to the voting at the annual meeting by providing written notice to
our Corporate Secretary at the following address: 8725 West Higgins Road,
Suite 400, Chicago, Illinois 60631, Attn: John Schoen.
You may also do this by:
- Signing another proxy card with a later date;
- Voting in person at the meeting; or
- Voting via the Internet or by telephone on a date after the date on your
proxy card (your latest proxy is counted).
Q: WILL MY SHARES BE VOTED IF I DO NOT SIGN AND RETURN MY PROXY CARD?
A: If your shares are held in street name, your brokerage firm may either vote
your shares on "routine matters" (such as the election of directors) or leave
your shares unvoted. Your brokerage firm may not vote on "non-routine
matters."
Q: HOW MANY VOTES MAY BE CAST AT THE MEETING?
A: As of the record date, 20,890,862 shares of common stock were outstanding.
Each outstanding share of common stock entitles the holder of such share to
one vote on all matters covered in this proxy statement. Therefore, there are
a maximum of 20,890,862 votes that may be cast at the meeting.
Q: WHAT IS A "QUORUM"?
A: A "quorum" is the number of shares that must be present, in person or by
proxy, in order for business to be transacted at the meeting. The required
quorum for the annual meeting is a majority of the shares outstanding on the
record date. There must be a quorum present for the meeting to be held. All
completed and signed proxy cards, Internet votes, telephone votes and votes
cast by those stockholders who attend the annual meeting in person, whether
representing a vote FOR, AGAINST, WITHHELD, ABSTAIN, or a broker non-vote,
will be counted toward the quorum.
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Q: HOW ARE ABSTENTIONS COUNTED?
A: If you return a proxy card that indicates an abstention from voting in all
matters, the shares represented will be counted as present for the purpose of
determining a quorum, but they will not be voted on any matter at the annual
meeting.
Q: WHAT IS A "BROKER NON-VOTE?"
A: Under the rules that govern brokers who have record ownership of shares that
are held in "street name" for their clients (who are the beneficial owners of
the shares), brokers have the discretion to vote such shares on routine
matters, but not on non-routine matters. Thus, if the proposals to be acted
upon at the meeting include both routine and non-routine matters, the broker
may turn in a proxy card for uninstructed shares that votes "FOR" routine
matters, but expressly states that the broker is NOT voting on the
non-routine matters. The vote with respect to the non-routine matter in this
case is referred to as a "broker non-vote."
Q: HOW ARE BROKER NON-VOTES COUNTED?
A: Broker non-votes are counted for the purpose of determining the presence or
absence of a quorum, but are not counted for determining the number of votes
cast for or against a proposal.
Q: WHAT IS THE REQUIRED VOTE FOR EACH OF THE PROPOSALS TO PASS?
A: - The two director nominees receiving the highest number of votes, in person
or by proxy, will be elected as directors.
- For the proposal to approve the appointment of our independent auditors,
the required vote is the affirmative (i.e. "FOR") vote of a majority of the
votes cast.
The votes cast on a particular proposal include votes FOR, AGAINST and
ABSTAIN, but do not include broker non-votes.
Q: WHO IS SOLICITING MY VOTE?
A: We are making and will bear the entire cost of this proxy solicitation,
including the preparation, assembly, printing and mailing of proxy materials.
We may reimburse brokerage firms and other custodians for their reasonable
out-of-pocket expenses for forwarding these proxy materials to you. We expect
our transfer agent, Wells Fargo Bank, MN N.A., to tabulate the proxies and to
act as the inspector of the election. In addition to this solicitation by
mail, proxies may be solicited by our directors, officers and other employees
by telephone, the Internet or fax, in person or otherwise. None of these
persons will receive any additional compensation for assisting in the
solicitation.
We shall provide without charge to each stockholder solicited by these
proxy solicitation materials a copy of our Annual Report on Form 10-K, together
with the financial statements and financial statement schedules required to be
filed with the Annual Report, upon written request sent to PCTEL, Inc., 8725
West Higgins Road, Suite 400, Chicago, Illinois 60631, Attn: John Schoen, Chief
Financial Officer.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS AND NOMINATIONS FOR 2005 ANNUAL
MEETING
Stockholders are entitled to present proposals for action and director
nominations at the 2005 annual meeting of stockholders only if they comply with
the applicable requirements of the proxy rules established by the Securities
Exchange Commission and the applicable provisions of our bylaws. Stockholders
must ensure that such proposals and nominations are received by our Corporate
Secretary at the following address: 8725 West Higgins Road, Suite 400, Chicago,
Illinois 60631, Attn: John Schoen, on or prior to the deadline for receiving
such proposals and nominations.
Proposals for the 2005 annual meeting of stockholders that are intended to
be considered for inclusion in the proxy statement and form of proxy relating to
such meeting must be received no later than December 30, 2004, as required by
Rule 14a-8 under the Securities Exchange Act of 1934 (the "Exchange Act") and
the provisions of our bylaws.
If a stockholder intends to submit a proposal or director nomination for
consideration at our 2005 annual meeting of stockholders but that may not be
included in the proxy statement and form of proxy relating to
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such meeting, the stockholder must comply with the requirements of our bylaws.
Our bylaws contain an advance notice provision that requires stockholders to
submit a written notice containing certain information not less than 120 days
prior to the date of our proxy statement for the previous year's annual meeting
of stockholders. For purposes of the 2005 annual meeting of stockholders, this
means that such proposals or nominations must also be received by December 30,
2004. A copy of the relevant bylaw provision is available upon written request
to our Corporate Secretary at the address provided above.
The attached proxy card grants the proxy holders discretionary authority to
vote on any business raised at the annual meeting. If you fail to comply with
the advance notice provisions set forth above in submitting a proposal or
nomination for the 2005 annual meeting of stockholders, the proxy holders will
be allowed to use their discretionary voting authority if such proposal or
nomination is raised at that meeting.
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SUMMARY OF PROPOSALS
The board of directors has included two proposals on the agenda for our
annual meeting. The following is a brief summary of the matters to be considered
and voted upon by our stockholders.
ELECTION OF DIRECTORS
We have a classified board of directors that currently consists of seven
directors. Each director serves a three year term. The first proposal on the
agenda for our annual meeting is the election of two Class II directors to serve
until our 2007 annual meeting. Our board of directors has nominated Richard C.
Alberding and Carl A. Thomsen to serve as our Class II directors. Additional
information about the election of directors and a brief biography of each
nominee begins on page 6.
OUR BOARD RECOMMENDS A VOTE FOR EACH OF THE TWO NOMINEES.
RATIFY APPOINTMENT OF OUR INDEPENDENT AUDITORS
The second proposal is the ratification of the appointment of
PricewaterhouseCoopers LLP as our independent auditors. More information about
this proposal begins on page 12.
OUR BOARD RECOMMENDS A VOTE TO RATIFY THE APPOINTMENT OF
PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT AUDITORS.
OTHER MATTERS
Other than the proposals listed above, our board of directors does not
intend to present any other matters to be voted on at the meeting. Our board is
not currently aware of any other matters that will be presented by others for
action at the meeting. However, if other matters are properly presented at the
meeting and you have signed and returned your proxy card or voted on the
Internet or by telephone, the proxies will have discretion to vote your shares
on these matters to the extent authorized under the Exchange Act.
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PROPOSAL #1
ELECTION OF DIRECTORS
CLASSIFICATION OF BOARD OF DIRECTORS
We have a classified board of directors currently consisting of two Class I
directors, Brian J. Jackman and John Sheehan, whose terms will expire at our
2006 annual stockholders' meeting; two Class II directors, Richard C. Alberding
and Carl A. Thomsen, whose terms are expiring at this 2004 annual stockholders'
meeting; and three Class III directors, Richard D. Gitlin, Giacomo Marini and
Martin H. Singer, whose terms will expire at our 2005 annual stockholders'
meeting. At each annual meeting of stockholders, directors are elected for a
term of three years to succeed those directors whose terms expire on the annual
meeting dates.
NOMINEES
The nominees for election at the annual stockholders' meeting as Class II
directors are Richard C. Alberding and Carl A. Thomsen. If elected, Messrs.
Alberding and Thomsen will serve as directors, and their terms shall expire at
the annual stockholders' meeting in 2007.
The proxy holders may not vote the proxies for a greater number of persons
than the number of nominees named. Unless otherwise instructed, the proxy
holders will vote the proxies received by them for our two Class II director
nominees. In the event that either of our nominees is unable or declines to
serve as a director at the time of the annual meeting, the proxies will be voted
for any nominee who shall be designated by the present board of directors to
fill the vacancy. We are not aware that either of our nominees will be unable or
will decline to serve as a director.
VOTE REQUIRED AND BOARD OF DIRECTORS' RECOMMENDATION
IF A QUORUM IS PRESENT AND VOTING, THE TWO NOMINEES RECEIVING THE HIGHEST NUMBER
OF VOTES WILL BE ELECTED TO THE BOARD OF DIRECTORS. ABSTENTIONS AND "BROKER
NON-VOTES" ARE NOT COUNTED IN THE ELECTION OF DIRECTORS. The board of directors
has unanimously approved the director nominees and recommends that stockholders
vote "FOR" the election of the director nominees listed above.
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DIRECTORS AND NOMINEES
The following table sets forth certain information regarding our current
directors and nominees for directors to be elected at our 2004 annual
stockholders' meeting:
DIRECTOR
NAME AGE POSITION WITH PCTEL SINCE
---- --- ------------------- --------
CLASS I DIRECTORS WHOSE TERMS EXPIRE AT THE
2006 ANNUAL STOCKHOLDERS' MEETING:
Brian J. Jackman............................ 63 Director 2002
John Sheehan................................ 67 Director 2002
CLASS II DIRECTORS NOMINEES TO BE ELECTED AT
THE 2004 ANNUAL STOCKHOLDERS' MEETING WHOSE
TERMS SHALL EXPIRE AT THE 2007 ANNUAL
STOCKHOLDERS' MEETING:
Richard C. Alberding........................ 73 Director 1999
Carl A. Thomsen............................. 59 Director 2001
CLASS III DIRECTORS WHOSE TERMS EXPIRE AT THE
2005 ANNUAL STOCKHOLDERS' MEETING:
Richard D. Gitlin........................... 61 Director 2002
Giacomo Marini.............................. 52 Director 1996
Martin H. Singer............................ 52 Chief Executive Officer and 1999
Chairman of the Board of
Directors
Mr. Brian J. Jackman has been a director since February 2002. In September
2001, Mr. Jackman retired from Tellabs, a communications company that he had
been with since 1982. Mr. Jackman served as president, Global Systems and
Technology, and executive vice president of Tellabs since 1998, and he was
president of Tellabs Operations from 1993 to 1998. Mr. Jackman held various
senior management positions in sales and marketing for IBM from 1965 to 1982. He
is currently on the boards of directors of Open Text and Stratos International.
Mr. Jackman holds a bachelor of arts in English literature from Gannon
University in Erie, Pennsylvania and a masters degree in business administration
from Penn State University.
Mr. John Sheehan has been a director since October 2002. Mr. Sheehan has
served as a senior consultant in the London Perret Roche Group in Red Bank, New
Jersey since October 2001. He began his career at Bell Laboratories in 1962. In
his 33 years at Bell Laboratories, Western Electric and AT&T, he worked in
senior positions in development, manufacturing, strategic planning and general
management of business units. Since leaving AT&T in 1996, Mr. Sheehan has held
senior management positions in three startup companies. Mr. Sheehan received a
bachelors of science degree in electrical engineering from Drexel University and
a masters of science degree in electrical engineering from New York University.
Mr. Richard C. Alberding has been a director since August 1999. Mr.
Alberding retired from Hewlett-Packard, then a computer, peripherals and
measurement products company, in June 1991, serving at that time as an executive
vice president with responsibility for worldwide company sales, support and
administration activities for measurement and computation products, as well as
all corporate level marketing activities. Mr. Alberding is a director of Stratex
Networks and Sybase, Inc. Mr. Alberding holds a bachelor of arts in business
administration and marketing from Augustana College in Rock Island, Illinois,
and an associate of science degree in electrical engineering from DeVry
Technical Institute in Chicago.
Mr. Carl A. Thomsen has been a director since March 2001. Since February
1995, Mr. Thomsen has served as chief financial officer of Stratex Networks, a
manufacturer of wireless communication equipment. Currently, he serves as its
senior vice president, chief financial officer and corporate secretary. Mr.
Thomsen
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holds a bachelor of science in business administration from Valparaiso
University and a masters degree in business administration from the University
of Michigan. He is also a certified public accountant.
Dr. Richard D. Gitlin has been a director since May 2002. Dr. Gitlin
retired from NEC Laboratories America, Inc. in April 2004. Prior to his
retirement, Dr. Gitlin had served as vice president, technology of NEC
Laboratories America, Inc. since November 2001. Prior to November 2001, Dr.
Gitlin was with Lucent Technologies, a global communications networking company,
for 32 years. At Lucent, Dr. Gitlin held several senior executive positions,
including chief technical officer and vice president of research and development
for the data networking systems business unit. Dr. Gitlin also served as senior
vice president for communication sciences research at Bell Labs, with
responsibility for managing and leading research in wireless systems, broadband
and optical networking, multimedia communications and access technologies. Dr.
Gitlin holds a doctorate in engineering science from Columbia University, where
he has also been a visiting professor of electrical engineering.
Mr. Giacomo Marini has been a director since October 1996. Mr. Marini has
been the managing partner of CIR Ventures, an early-stage technology venture
capital firm, since March 2002, and he has served as managing member of Marini
Group LLC, a private investment and management consulting business that invests
in and advises high technology companies, since January 1998. From February 1998
to February 1999, Mr. Marini also served as interim chief executive officer of
FutureTel, a digital video capture company. From August 1993 to February 1995,
Mr. Marini served as president and chief executive officer of Common Ground
Software (formerly No Hands Software), an electronic publishing software
company. Prior to this, Mr. Marini was the co-founder, executive vice-president
and chief operating officer of Logitech, a computer peripherals company, and had
previously held technical and management positions with Olivetti and IBM. He is
currently on the boards of several private companies. Mr. Marini holds a
computer science laureate degree from the University of Pisa, Italy.
Dr. Martin H. Singer has been our chief executive officer and chairman of
the board since October 2001. Prior to that, Dr. Singer served as our
non-executive chairman of the board from February 2001 until October 2001, and
he has been a director since August 1999. From October 2000 to May 2001, Dr.
Singer served as president and chief executive officer of Ultra Fast Optical
Systems, an optical transmission systems company. From December 1997 to August
2000, Dr. Singer served as president and chief executive officer of SAFCO
Technologies, a wireless communications company. He left SAFCO in August 2000
after its sale to Agilent Technologies. From September 1994 to December 1997,
Dr. Singer served as vice president and general manager of the wireless access
business development division for Motorola, a communications equipment company.
Prior to this period, Dr. Singer held senior management and technical positions
in Motorola, Tellabs, AT&T and Bell Labs. Dr. Singer holds a bachelor of arts in
psychology from the University of Michigan, and a master of arts degree and a
Ph.D. in experimental psychology from Vanderbilt University.
BOARD AND COMMITTEE MEETINGS
Our board of directors held a total of eight meetings during fiscal 2003.
The board of directors has an audit committee, a compensation committee and a
nominating and governance committee. Each member of the audit committee,
compensation committee and nominating and governance committee meets the Nasdaq
independence and experience requirements. The board has determined that Carl
Thomsen qualifies as an "audit committee financial expert" as defined under the
rules and regulations of the Securities and Exchange
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Commission. During our last fiscal year, each of our directors attended at least
75% of the total number of meetings of the board of directors and any committee
on which such director served.
MEETINGS
HELD IN
MEMBERS DURING DATE CURRENT WRITTEN FISCAL
COMMITTEE FISCAL 2003 COMMITTEE FUNCTIONS CHARTER ADOPTED 2003
--------- -------------- ------------------- ---------------------- ---------
Audit.............. Carl Thomsen (Chair) - Selects our independent Originally adopted 8
Richard Alberding auditors August 3, 1999; last
Giacomo Marini - Oversees our internal amended November 12,
financial reporting and 2003
accounting controls
- Consults with and reviews the
services provided by our
independent auditors
Compensation....... Richard Alberding - Reviews and recommends to the Originally adopted 10
(Chair) board of directors the August 3, 1999; last
John Sheehan compensation and benefits of amended February 12,
Brian J. Jackman our chief executive officer 2004
- Determines the compensation
and benefits of all of our
other executive officers and
directors
- Establishes and reviews
general policies relating to
the compensation and benefits
of our employees
Nominating and
Governance....... John Sheehan (Chair) - Assists the board of Originally adopted 1
Brian J. Jackman directors in identifying and February 12, 2004
selecting prospective
director nominees for the
annual meeting of
stockholders
- Reviews and makes
recommendations on matters
regarding corporate
governance, board
composition, evaluation and
nominations, board committees
and conflicts of interest
- Establishes, maintains and
improves corporate governance
guidelines
A copy of the charter for each of our board committees is available on our
website located at www.pctel.com. It may be found on the website as follows:
1. From our main web page, click on "Investor Relations,"
2. Next, click on "Corporate Governance,"
3. Finally, click on the name of the desired committee charter.
COMPENSATION OF DIRECTORS
Directors currently receive a yearly cash retainer of $12,500 and shares of
restricted common stock equivalent to $4,000. They receive $2,500 per board
meeting attended (unless the board meeting is conducted by teleconference, in
which case directors receive $1,000 for each such telephonic meeting in which
they participate) and $1,000 per committee meeting attended. In addition,
effective as of February 11, 2004, our directors receive additional shares of
restricted stock as set forth below:
- the chairs of our compensation committee and nominating and governance
committee each receive shares of restricted common stock equivalent to
$7,000 (previously this amount was $3,000 for the compensation committee
chair; no shares were previously awarded to the nominating and governance
committee chair);
- our lead director and audit committee chair receive shares of restricted
common stock equivalent to $10,000 (previously this amount was $3,000 for
the audit committee chair; no shares were previously awarded to the lead
director); and
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- the chairs of our intellectual property committee and business
development committee (two additional advisory committees of our board of
directors) each receive the shares of restricted common stock equivalent
to $3,000 (previously no shares were awarded to the chair of either our
intellectual property committee or business development committee).
Effective as of February 11, 2004, all of the shares of restricted common stock
received by our directors vest 6 months after the date of grant. Shares of
restricted common stock received by our directors prior to this date vest 12
months from the date of grant.
Our 1998 Director Option Plan provides for the non-discretionary, automatic
grant of options to each of our non-employee directors. Each new non-employee
director is automatically granted an option to purchase 15,000 shares on the
date on which such person first becomes a director. These initial grants vest
over a period of three years, with one-third of the number of shares granted
vesting on each anniversary of the date of grant, provided that the optionee
continues to serve as a director on these dates. Furthermore, each non-employee
director is automatically granted an additional option to purchase 10,000 shares
of common stock on January 1 of each year, provided that he or she has served on
the board of directors for at least six months. These subsequent grants vest
fully on the first anniversary of the date of grant, provided that the optionee
continues to serve as a director on such date. Under the terms of our 1998
Director Option Plan, the exercise price of options granted to non-employee
directors must be 100% of the fair market value of our common stock on the last
trading day preceding the date of grant.
DIRECTOR NOMINATION PROCESS
STOCKHOLDER RECOMMENDATIONS AND NOMINATIONS
It is the policy of the nominating and governance committee to consider
director candidates recommended by our stockholders holding on the date of
submission of such recommendation, at least 1% of the then outstanding shares of
our common stock continuously for at least 12 months prior to such date.
Stockholders desiring to recommend a candidate for election to the board of
directors should send their recommendation in writing to the attention of our
Corporate Secretary, at our offices located at 8725 West Higgins Road, Suite
400, Chicago, Illinois 60631. This written recommendation must include the
information and materials required by our bylaws as well as the candidate's
name, home and business contact information, detailed biographical data,
relevant qualifications, a signed letter from the candidate confirming
willingness to serve, information regarding any relationships between the
candidate and PCTEL within the last three years and evidence of the required
ownership of our common stock by the recommending stockholder. A copy of the
relevant bylaw provision is available upon written request to our Corporate
Secretary at the address provided above.
In accordance with the advance notice provision in our bylaws, director
nominations to be considered at the next annual meeting of stockholders must be
received not less than 120 days prior to the date of our proxy statement for the
previous year's annual meeting of stockholders. For purposes of our 2005 annual
meeting of stockholders, director nominations must be received by December 30,
2004.
IDENTIFYING AND EVALUATING NOMINEES FOR DIRECTOR
The nominating and governance committee uses the following procedures for
identifying and evaluating any individual recommended or offered for nomination
to the board of directors:
- The committee considers candidates recommended by stockholders in the
same manner as candidates recommended by other sources.
- The committee considers the following factors in its evaluation of
candidates:
- The current size and composition of the board of directors and the
needs of the board of directors and the respective committees of the
board of directors.
10
- The candidate's judgment, independence, character and integrity, age,
area of expertise, diversity of experience, length of service and
potential conflicts of interest.
- Other factors that the committee considers appropriate.
The nominating and governance committee requires the following minimum
qualifications to be satisfied by any candidate recommended or offered for
nomination to the board of directors:
- The highest personal and professional ethics and integrity.
- Proven achievement and competence in the candidate's field and the
ability to exercise sound business judgment.
- Skills that are complementary to those of the existing board of
directors.
- The ability to assist and support management and make significant
contributions to our success.
- An understanding of the fiduciary responsibilities that are required of a
member of the board of directors and the commitment of time and energy
necessary to diligently carry out those responsibilities.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Stockholders who wish to communicate directly with our independent
directors may do so by sending an e-mail message to Varda Goldman, our vice
president and general counsel, at general_counsel@pctel.com. Ms. Goldman
monitors these communications, consults with Brian Jackman, our current lead
independent director, and provides a summary of all received messages to the
board of directors at its regularly scheduled meetings. Where the nature of the
communication warrants, Ms. Goldman may determine to obtain more immediate
attention of the appropriate committee or independent director of the board of
directors, of independent advisors or of our management. Ms. Goldman may decide
in her judgment whether a response to any stockholder communication is
necessary.
ATTENDANCE AT THE ANNUAL MEETING OF THE STOCKHOLDERS
All directors are welcome to attend the annual meeting of stockholders and
it is expected that our lead independent director will be in attendance at every
annual meeting of stockholders. At the 2003 annual meeting of stockholders,
Martin H. Singer was the only director in attendance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 2003, none of the members of the compensation committee were
officers or employees of PCTEL while they served as members of the compensation
committee. In addition, no executive officer of PCTEL served as a member of the
board of directors or compensation committee of any entity that has one or more
executive officers serving as a member of our board of directors or compensation
committee.
11
PROPOSAL #2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Our audit committee has appointed PricewaterhouseCoopers LLP, independent
auditors, to audit our financial statements for the fiscal year ending December
31, 2004. This appointment is being presented to our stockholders for
ratification at the meeting.
TRANSITION FROM ARTHUR ANDERSEN LLP TO PRICEWATERHOUSECOOPERS LLP
The audit committee of our board of directors annually considers and
determines the selection of our independent public accountants. On May 9, 2002,
our audit committee, in consultation with our board of directors, decided to
terminate the engagement of Arthur Andersen LLP as our independent auditors.
The report of Arthur Andersen LLP on our financial statements for our
fiscal year ended December 31, 2001 contained no adverse opinion or disclaimer
of opinion, nor were the reports qualified or modified as to uncertainty, audit
scope, or accounting principles.
In connection with the audits performed by Arthur Andersen LLP for fiscal
2001 and during the period from January 1, 2002 through May 9, 2002, there were
no disagreements with Arthur Andersen LLP on any matter of accounting principles
or practices, financial statement disclosure or auditing scope of procedure,
which disagreements, if not resolved to the satisfaction of Arthur Andersen LLP,
would have caused it to make reference to the subject matter of the disagreement
in its reports, and there have been no reportable events as listed in Item
304(a)(1)(v) of Regulation S-K.
Effective May 17, 2002, we retained PricewaterhouseCoopers LLP to perform
the annual audit of our financial statements for the fiscal year ended December
31, 2002. During the period from January 1, 2002 through May 17, 2002, neither
we nor anyone acting on our behalf consulted with PricewaterhouseCoopers LLP
regarding the application of accounting principles to a specified transaction,
either completed or proposed, or the type of the audit opinion that might be
rendered on our financial statements, nor did we (or anyone acting on our
behalf) consult with PricewaterhouseCoopers LLP regarding any other matter that
was the subject of a disagreement (as defined in paragraph 304(a)(1)(iv) and the
related instructions to Item 304 of Regulation S-K) or a reportable event (as
described in paragraph 304(a)(1)(v) of Item 304 of Regulation S-K).
Before selecting PricewaterhouseCoopers LLP as our independent auditors for
fiscal year 2004, our audit committee carefully considered the firm's
qualifications as independent auditors. This included a review of the
qualifications of the engagement team, the quality control procedures the firm
has established and its reputation for integrity and competence in the fields of
accounting and auditing. The audit committee's review also included matters
required to be considered under the SEC's rules on auditor independence,
including the nature and extent of non-audit services, to ensure that
PricewaterhouseCoopers LLP's independence will not be impaired. The audit
committee expressed its satisfaction with PricewaterhouseCoopers LLP in all of
these respects.
PricewaterhouseCoopers LLP has been conducting independent audits of our
financial statements since May 2002. Representatives of PricewaterhouseCoopers
LLP are expected to be present at the 2004 annual meeting of stockholders. They
will have the opportunity to address the audience at the meeting, and will be
available to answer appropriate questions from stockholders.
12
SUMMARY OF FEES
The following table summarizes the approximate aggregate fees billed to us
or expected to be billed to us by our independent auditors for our 2003 and 2002
fiscal years:
FISCAL YEAR FISCAL YEAR
TYPE OF FEES 2003 2002(1)
------------ ----------- -----------
Audit Fees.................................................. $357,965 $204,207(4)
Audit-Related Fees(2)....................................... 56,750 --
Tax Fees(3)................................................. 203,775 217,671(5)
All Other Fees.............................................. -- 10,000(6)
-------- --------
Total Fees.................................................. $618,490 $431,878
======== ========
---------------
(1) This column reflects amounts billed to us by Arthur Andersen LLP and
PricewaterhouseCoopers LLP. We terminated the engagement of Arthur Andersen
LLP in May 2002.
(2) Includes fees for due diligence related to our asset acquisition of Dynamic
Telecommunications, Inc.
(3) Includes fees for various advisory services related principally to tax
preparation services and tax consultation services.
(4) Includes $40,800 billed to us by Arthur Andersen LLP and $163,407 billed to
us by PricewaterhouseCoopers LLP.
(5) Includes $31,400 billed to us by Arthur Andersen LLP and $186,271 billed to
us by PricewaterhouseCoopers LLP.
(6) Includes fees billed by Arthur Andersen LLP relating to the transition to
PricewaterhouseCoopers LLP.
PRE-APPROVAL OF INDEPENDENT AUDITOR SERVICES AND FEES
Our audit committee reviewed and pre-approved all audit and non-audit fees
for services provided by PricewaterhouseCoopers LLP and has determined that the
firm's provision of such services to us during fiscal 2003 is compatible with
and did not impair PricewaterhouseCoopers LLP's independence. It is the practice
of the audit committee to consider and approve in advance all auditing and
non-auditing services provided to us by our independent auditors in accordance
with the applicable requirements of the Securities and Exchange Commission.
VOTE REQUIRED AND RECOMMENDATION
Stockholder ratification of the selection of PricewaterhouseCoopers LLP as
our independent auditors is not required by our bylaws or other applicable legal
requirement. However, our board of directors is submitting the selection of
PricewaterhouseCoopers LLP to our stockholders for ratification as a matter of
good corporate practice. If the stockholders fail to ratify the selection, our
audit committee will reconsider whether or not to retain PricewaterhouseCoopers
LLP as our independent auditors. Even if the selection is ratified, our audit
committee, at its discretion, may direct the appointment of a different firm to
act as our independent auditors at any time during the year if it determines
that such a change would be in our best interests and in the best interests of
our stockholders.
The affirmative vote of the holders of a majority of the shares of our
common stock present or represented by proxy and entitled to vote at the annual
meeting will be required to approve this proposal. OUR BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF PRICEWATERHOUSECOOPERS
LLP AS OUR INDEPENDENT AUDITORS.
13
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 31, 2004 by:
- each stockholder known by us to beneficially own more than 5% of our
common stock;
- each of our directors, including director nominees;
- each of our executive officers named in the summary compensation table on
page 16; and
- all of our directors and executive officers as a group, including
director nominees.
Beneficial ownership is determined based on the rules of the Securities and
Exchange Commission. Percent of beneficial ownership is based upon 20,816,095
shares of our common stock outstanding as of March 31, 2004. In addition, shares
of common stock subject to options that are exercisable as of March 31, 2004 or
will become exercisable on or before May 30, 2004 (60 days subsequent to March
31), are treated as outstanding and to be beneficially owned by the person
holding the options for the purpose of computing the percentage ownership of
person and are listed below under the "Number of Shares Underlying Options"
column below, but those option shares are not treated as outstanding for the
purpose of computing the percentage ownership of any other person. Unless
otherwise indicated, we believe the stockholders listed below have sole voting
or investment power with respect to all shares listed beside each stockholder's
name, subject to applicable community property laws.
NUMBER OF NUMBER OF TOTAL PERCENT OF
SHARES SHARES SHARES SHARES
BENEFICIALLY UNDERLYING BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNERS OWNED OPTIONS OWNED OWNED (%)
----------------- ------------ ---------- ------------ -------------
5% STOCKHOLDERS
Entities affiliated with Barclays Global
Investors, NA................................... 1,056,768 -- 1,056,768 5.1%
45 Fremont Street
San Francisco, CA 94105(1)
Royce & Associates LLC.......................... 1,050,000 -- 1,050,000 5.0%
1414 Avenue of the Americas
New York, NY 10019(2)
Entities affiliated with Cannell Capital LLC.... 1,621,200 -- 1,621,200 7.8%
150 California Street, Fifth Floor
San Francisco, CA 94111(3)
Dimensional Fund Advisors Inc................... 1,165,014 -- 1,165,014 5.6%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401(4)
DIRECTORS AND NAMED EXECUTIVE OFFICERS
Martin Singer(5)................................ 168,417 273,490 441,907 2.1%
John Schoen..................................... 105,000 23,334 128,334 *
Jeffrey A. Miller............................... 100,000 73,334 173,334 *
Biju Nair....................................... 100,000 16,668 116,668 *
Brian J. Jackman................................ 314 17,500 17,814 *
Richard C. Alberding............................ 550 37,500 38,050 *
Carl A. Thomsen................................. 550 30,000 30,550 *
Richard D. Gitlin............................... 314 17,500 17,814 *
Giacomo Marini.................................. 31,635 30,000 61,635 *
John Sheehan.................................... 504 -- 504 *
All directors, director nominees and current
executive officers as a group (10 persons)... 507,284 519,326 1,026,610 4.8%
14
---------------
* Less than 1% of the outstanding shares of common stock.
(1) Information with respect to the number of shares beneficially owned is based solely on the
Schedule 13G filed with the SEC by Barclays Global Investors, NA, Barclays Global Fund
Advisors, Barclays Global Investors, LTD, Barclays Global Investors Japan Trust and Banking
Company Limited, Barclays Life Assurance Company Limited, Barclays Bank PLC, Barclays
Capital Securities Limited, Barclays Capital Inc., Barclays Private Bank & Trust (Isle of
Man) Limited, Barclays Private Bank and Trust (Jersey) Limited, Barclays Bank Trust Company
Limited, Barclays Bank (Suisse) SA and Barclays Private Bank Limited on February 17, 2004.
(2) Information with respect to the number of shares beneficially owned is based solely on the
Schedule 13G/A filed with the SEC by Royce & Associates LLC on February 5, 2004. Royce &
Associates LLC, in its capacity as an investment advisor, possesses sole dispositive
control and voting power over such shares, which are held of record by its clients.
(3) Information with respect to the number of shares beneficially owned is based solely on the
Schedule 13G/A filed with the SEC by Cannell Capital, LLC, J. Carlo Cannell, The Anegada
Fund Limited, The Cuttyhunk Fund Limited, Tonga Partners, L.P., GS Cannell Portfolio, LLC
and Pleiades Investment Partners, L.P. on February 17, 2004. Cannell Capital, LLC, in its
capacity as an investment advisor, possesses shared dispositive control and shared voting
power over such shares, which are held of record by its clients. J. Carlo Cannell is the
managing member and majority owner of Cannell Capital and, as a consequence, is deemed to
control Cannell Capital and is thereby deemed to beneficially own such shares.
(4) Information with respect to the number of shares beneficially owned is based solely on the
Schedule 13G/A filed with the SEC by Dimensional Fund Advisors Inc. on February 6, 2004.
Dimensional Fund Advisors Inc., in its capacity as an investment advisor, possesses sole
dispositive control and voting power over such shares which are held of record by its
clients. Dimensional disclaims beneficial ownership of such securities.
(5) Includes 1,000 shares of common stock held by the Andrea Singer Trust and 41,500 shares of
common stock held by the Martin H. Singer Trust.
15
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table presents the compensation earned, awarded or paid for
services rendered to us in all capacities for the fiscal years ended December
31, 2003, 2002 and 2001, respectively, by our chief executive officer and our
other executive officers whose salary and bonus for fiscal 2003 exceeded
$100,000. We refer to these individuals elsewhere in this proxy as "named
executive officers." Bonuses for a given fiscal year include bonuses earned and
paid in that fiscal year as well as bonuses earned in that fiscal year but paid
in subsequent years. No dividends will be paid on any of the shares of
restricted stock granted to the named executive officers as described below.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION AWARDS
------------------------------
ANNUAL COMPENSATION RESTRICTED SECURITIES
-------------------- STOCK UNDERLYING ALL OTHER
FISCAL SALARY BONUS AWARDS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)
--------------------------- ------ -------- -------- ---------- ---------- ------------
Martin H. Singer........... 2003 $367,500 $302,281 $580,000(1) 160,000 $41,906(2)
Chief Executive Officer 2002 354,132 225,000 497,250(3) 100,000 18,348
and Chairman of the Board 2001 72,660(4) 125,000 499,500(5) 300,000(6) 25,015
John Schoen................ 2003 222,083 131,161 -- 50,000 31,501(7)
Chief Operating Officer, 2002 193,866 50,000 497,250(3) 80,000 16,877
Chief Financial Officer 2001 26,810(8) 55,000(9) 120,000(10) 150,000 1,140
Jeffrey A. Miller.......... 2003 203,750 120,117 -- 40,000 31,501(7)
Vice President, Business 2002 193,008 50,000 497,250(3) 80,000 16,877
Development and Licensing 2001 29,104 55,000(9) 120,000(10) 150,000 1,140
Biju Nair.................. 2003 203,750 120,117 -- 40,000 31,515(11)
Vice President and 2002 177,089 49,000(12) 497,250(3) 200,000 14,268
General Manager of 2001 -- -- -- -- --
Wireless Products
---------------
(1) The executive was awarded 50,000 shares of restricted common stock on
September 2, 2003. The closing sales price of our common stock on September
2, 2003 as reported by The Nasdaq National Market was $11.60. Our
repurchase right with respect to 100% of such shares shall lapse on
September 2, 2008. Based on the $10.75 closing sales price of our common
stock as reported by The Nasdaq National Market on December 31, 2003, the
value of the executive's shares on such date was $537,500.
(2) Other compensation for fiscal 2003 consisted of (i) $625.44 in premiums
paid for term life insurance, (ii) $13,476.26 in premiums paid for health
insurance, (iii) a $15,000 car allowance, (iv) $8,000 in matching
contributions under our 401(k) plan and (v) $4,805 in matching
contributions under our executive deferred compensation plan.
(3) The executive was awarded 75,000 shares of restricted common stock on
December 30, 2002. The closing sales price of our common stock on December
30, 2002 as reported by The Nasdaq National Market was $6.63. Our
repurchase right with respect to 20% of such shares shall lapse on November
1 of each year beginning on November 1, 2004, such that our repurchase
right shall lapse with respect to all such shares on November 1, 2008.
Based on the $10.75 closing sales price of our common stock as reported by
The Nasdaq National Market on December 31, 2003, the value of the
executive's shares on such date was $806,250.
(4) Mr. Singer's salary compensation for fiscal 2001 does not include $201,083
in consulting fees earned by Mr. Singer prior to the time he became our
chief executive officer in October 2001 or any fees earned as a
non-employee director prior to such time.
16
(5) Mr. Singer was awarded 75,000 shares of restricted common stock on October
23, 2001. The closing sales price of our common stock on October 23, 2001
as reported by The Nasdaq National Market was $6.60. Our repurchase right
with respect to 50% of such shares lapsed on November 10, 2002 and with
respect to the remaining shares lapsed on November 10, 2003. Mr. Singer
continued to hold all such shares as of December 31, 2003. Based on the
$10.75 closing sales price of our common stock as reported by The Nasdaq
National Market on December 31, 2003, the value of Mr. Singer's shares on
such date was $806,250.
(6) Excludes (i) 7,500 shares subject to options granted to Mr. Singer in
January 2001 in connection with his service as a non-employee director and
(ii) 15,000 shares subject to an option granted to Mr. Singer in January
2001 in connection with his services as a consultant.
(7) Other compensation for fiscal 2003 consisted of (i) $625.44 in premiums
paid for term life insurance, (ii) $13,476.26 in premiums paid for health
insurance, (iii) a $9,000 car allowance, (iv) $8,000 in matching
contributions under our 401(k) plan and (v) $400 in matching contributions
under our executive deferred compensation plan.
(8) Mr. Schoen's salary compensation for fiscal 2001 does not include $10,297
in consulting fees earned by Mr. Schoen prior to the time he became our
chief operating officer and chief financial officer in November 2001.
(9) Each of Messrs. Schoen and Miller received a signing bonus of $55,000 when
he joined us in November 2001.
(10) Each of Messrs. Schoen and Miller was awarded 15,000 shares of restricted
common stock on November 15, 2001. The closing sales price of our common
stock on November 15, 2001, as reported by The Nasdaq National Market, was
$8.00. Our repurchase right with respect to 100% of such shares lapsed on
November 10, 2003. Each of Messrs. Schoen and Miller continued to hold
12,500 of such shares as of December 31, 2003. Based on the $10.75 closing
sales price of our common stock as reported by The Nasdaq National Market
on December 31, 2003, the value of each of Messrs. Schoen and Miller's
shares on such date was $134,375. Messrs. Schoen and Miller each sold all
of such shares in February 2004.
(11) Other compensation for fiscal 2003 consisted of (i) $625.44 in premiums
paid for term life insurance, (ii) $13,476.26 in premiums paid or health
insurance, (iii) a $9,000 car allowance, (iv) $8,000 in matching
contributions under our 401(k) plan and (v) $414 in matching contributions
under our executive deferred compensation plan.
(12) Mr. Nair received a signing bonus of $9,000 when he joined us in February
2002, and a year-end bonus of $40,000.
OPTION GRANTS DURING LAST FISCAL YEAR
The following table shows information regarding stock options granted to
the named executive officers during fiscal year 2003. Potential realizable
values with respect to such options are computed by:
- Multiplying the number of shares of common stock underlying each option
by the exercise price,
- Assuming that the total stock value derived from that calculation
compounds at the annual 5% or 10% rate shown in the table for the entire
ten-year term of the option, and
- Subtracting from that result the total option exercise price.
The 5% and 10% annual return rate is based on the rules of the SEC and do
not reflect projections or estimates of future stock price growth. Actual gains,
if any, on stock option exercises will be dependent on the future performance of
our common stock.
17
The percentage of total options is based on an aggregate of 1,844,300
options granted by us to our employees, directors and consultants, including the
named executive officers, during fiscal 2003. We did not grant any options under
our 2001 Nonstatutory Stock Option Plan in fiscal 2003. The 1,844,300 shares of
common stock subject to options granted in fiscal 2003 does not include 67,356
shares of common stock awarded to our employees and directors, including the
named executive officers, pursuant to restricted stock grants made in fiscal
2003. See the summary compensation table on page 16 for a discussion of the
restricted stock awards that were made to our named executive officers.
The per share exercise price of stock option grants is equal to the closing
sales price of our common stock as reported by The Nasdaq National Market on the
date of grant.
NUMBER OF POTENTIAL REALIZABLE VALUE AT
SECURITIES PERCENT OF TOTAL ASSUMED ANNUAL RATES OF STOCK
UNDERLYING OPTIONS GRANTED EXERCISE APPRECIATION FOR OPTION TERM ($)
OPTIONS TO EMPLOYEES PRICE PER EXPIRATION ---------------------------------
NAME GRANTED (#) DURING PERIOD (%) SHARE ($) DATE 5% 10%
---- ----------- ----------------- ---------- ---------- -------------- ----------------
Martin Singer......... 60,000 3.25% $6.60 2/6/13 $249,042.27 $ 631,122.02
100,000 5.42 11.60 9/2/13 729,517.77 1,848,741.26
John Schoen........... 50,000 2.71 6.60 2/6/13 207,535.23 525,935.01
Jeffrey A. Miller..... 40,000 2.17 6.60 2/6/13 166,028.19 420,748.01
Biju Nair............. 40,000 2.17 6.60 2/6/13 166,028.19 420,748.01
AGGREGATE OPTION EXERCISES DURING LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table presents information regarding the named executive
officers concerning option exercises for fiscal 2003 and exercisable and
unexercisable options held by such individuals as of December 31, 2003. The
"Value Realized" on option exercises is equal to the difference between the
closing sales price of our common stock as reported by The Nasdaq National
Market on the date of exercise less the option exercise price. The "Value of
Unexercised In-the-Money Options at December 31, 2003" is based on a price of
$10.75 closing sales price of our common stock on December 31, 2003 as reported
by The Nasdaq National Market, minus the weighted average per share exercise
price of options held by such named executive officer, multiplied by the
aggregate number of shares underlying the unexercised options held by such
officer. The option exercise information in the table does not include the
50,000 shares of common stock awarded to one of our named executive officers in
fiscal 2003. Please see the summary compensation table on page 16 for more
information regarding the restricted stock awards made to named executive
officers in fiscal 2003.
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 2003 DECEMBER 31, 2003
ACQUIRED ON VALUE ----------------------------------- -----------------------------------
EXERCISE (#) REALIZED ($) EXERCISABLE (#) UNEXERCISABLE (#) EXERCISABLE ($) UNEXERCISABLE ($)
------------ ------------ --------------- ----------------- --------------- -----------------
Martin H. Singer..... -- -- 208,315 273,785 $686,902 $698,447
John Schoen.......... -- -- 94,167 140,833 260,709 298,566
Jeffrey A. Miller.... -- -- 114,167 130,833 98,000 170,799
Biju Nair............ -- -- 94,167 145,833 183,167 374,833
18
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 2003 about our
common stock that may be issued upon the exercise of options and rights under
all of our existing equity compensation plans, including our 1997 Stock Plan,
1998 Director Stock Option Plan, 1998 Employee Stock Purchase Plan and 2001
Nonstatutory Stock Option Plan.
NUMBER OF SECURITIES
NUMBER OF SECURITIES REMAINING AVAILABLE FOR
TO BE ISSUED WEIGHTED-AVERAGE FUTURE ISSUANCE UNDER EQUITY
UPON EXERCISE OF EXERCISE PRICE OF COMPENSATION PLANS
OUTSTANDING OPTIONS OUTSTANDING OPTIONS, (EXCLUDING SECURITIES REFLECTED
PLAN CATEGORY AND RIGHTS (#) WARRANTS AND RIGHTS ($) IN THE FIRST COLUMN) (#)
------------- -------------------- ------------------------ -------------------------------
Equity compensation plans
approved by security
holders(1)..................... 3,341,423(3) $9.646(3) 3,932,569(4)
Equity compensation plans not
approved by security
holders(2)..................... 254,577 $7.999 584,244(5)
--------- ------ ---------
TOTAL............................ 3,596,000 $9.530 4,516,813
========= ====== =========
---------------
(1) Information is provided with respect to our 1997 Stock Plan, 1998 Director
Stock Option Plan and 1998 Employee Stock Purchase Plan.
(2) Information is provided with respect to our 2001 Nonstatutory Stock Option
Plan and with respect to our grant of options to purchase 150,000 shares of
our common stock outside of a formalized plan to each of John Schoen and
Jeffrey A. Miller on November 15, 2001 in connection with their initial
employment with us. Under the terms of our 2001 Nonstatutory Stock Option
Plan, no options may be granted under such plan to our officers or
directors.
(3) We are unable to ascertain with specificity the number of securities to be
issued upon exercise of outstanding rights under our 1998 Employee Stock
Purchase Plan or the weighted average exercise price of outstanding rights
under our 1998 Employee Stock Purchase Plan. The 1998 Employee Stock
Purchase Plan provides that shares of our common stock may be purchased at a
per share price equal to 85% of the fair market value of the common stock at
the beginning of the offering period or a purchase date applicable to such
offering period, whichever is lower.
(4) This number includes 1,782,495 shares available for future issuance under
our 1997 Stock Plan, 250,000 shares available for future issuance under our
1998 Director Stock Option Plan and 1,900,074 shares available for future
issuance under our 1998 Employee Stock Purchase Plan as of December 31,
2003.
(5) All such shares are available for future issuance under our 2001
Nonstatutory Stock Option Plan.
19
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following is a description of the transactions or series of similar
transactions that we have entered into since January 1, 2003 in which the amount
exceeds $60,000, and in which any director, executive officer, nominee for
election as a director, holder of more than 5% of our common stock, or any
member of the immediate family of any of the foregoing persons had or will have
a direct or indirect material interest, other than the change in control
arrangements and employment agreements with the named executive officers that
are described under "Employment Agreements and Change in Control Arrangements"
on page 21.
DEFERRED COMPENSATION PLAN
Effective as of January 20, 2003, the board of directors approved the terms
of two deferred compensation plans for our management. The plans will be
administered by the compensation committee or as otherwise determined by our
board of directors. The principal purpose of the plans is to permit our officers
and director-level employees to defer current income and create a long-term
compensation benefit that supports our management retention objectives.
The first plan permits the deferral of cash compensation, including salary,
bonus and commission payments, and it provides that up to 50% of a participant's
salary and all of a participant's bonus or commission payments may be deferred.
The minimum annual contribution under the cash deferred compensation plan has
been set at $1,500. Under this plan, we have committed to a matching
contribution equal to 4% of the cash compensation deferred pursuant to the plan,
with such contribution vesting as to one-third of the total amount each year so
that the matching contribution vests fully after three years (subject to the
participant's continued employment with us).
The second plan permits the deferral of compensation earned as a result of
gains realized pursuant to equity awards, including stock options and restricted
stock. All contributions to this plan will be made in shares of our common
stock, and participants must specify the amounts to be contributed at least six
months before the date on which the stock is to be contributed. This plan does
not provide for matching contributions.
EMPLOYMENT AGREEMENT WITH MARTIN SINGER
In July 2003, we entered into an amended and restated employment agreement
with Martin Singer, our chief executive officer and chairman of the board. See
the section below titled "Employment Agreements and Change in Control
Arrangements" for a detailed description of the benefits of such agreement.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our executive officers and
directors and persons who own more than ten percent of a registered class of our
equity securities to file reports of ownership and changes in ownership with the
SEC and the National Association of Securities Dealers, Inc. Executive officers,
directors and greater than ten percent stockholders are required by SEC
regulation to furnish us with copies of all Section 16(a) forms they file. Based
solely on our review of the copies of such forms received by us, or written
representations from certain reporting persons, we believe that during fiscal
2003 all executive officers and directors complied with all applicable filing
requirements.
20
EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTS
MANAGEMENT RETENTION AGREEMENTS
In March 2000, our board of directors authorized the implementation of a
management retention program with members of our management and certain other
key employees. Upon the involuntary termination of such individual's employment
within 12 months following a change of control transaction, such executive
officers and key employees will receive the following benefits:
- Chief Executive Officer: cash severance equal to (i) 200% of annual
compensation plus (ii) 100% of targeted bonus compensation and 12 months
of continued health benefits;
- Vice-Presidents: cash severance equal to (i) 150% of annual compensation
plus (ii) 100% of targeted bonus compensation and 12 months of continued
health benefits;
- Director-level and other key employees: cash severance equal to (i) 75%
of annual compensation plus (ii) 100% of targeted bonus compensation and
12 months of continued health benefits.
In addition, the vesting with respect to all equity awards held by the
participants in our management retention program will accelerate so such equity
awards shall become fully vested. To date, the participants in the program at
the director level or below have not been designated. Each of our named
executive officers has entered into a management retention agreement.
EMPLOYMENT AGREEMENTS
In addition to our standard form of confidentiality agreement prohibiting
the disclosure of any of our confidential or proprietary information and
providing that, upon termination, the former employee will not solicit our
employees, we have executed employment agreements with the following named
executive officers:
Martin H. Singer. In October 2001, Martin H. Singer became our chief
executive officer and chairman of the board and we entered into an employment
agreement with Dr. Singer. In July 2003, we entered into an amended five-year
term employment agreement with Dr. Singer, pursuant to which we have agreed to
pay Dr. Singer an initial annual base compensation of $385,000. Under the terms
of the amended agreement, Dr. Singer is entitled to receive two annual bonuses.
The first annual bonus, first paid in 2004, is equal to an amount up to 100% of
Dr. Singer's then-current base salary, based on Dr. Singer's individual
performance and the attainment of specified corporate objectives. The second
annual bonus, first payable in 2005, is equal to an amount to be determined
based on the attainment of individual and corporate objectives measured over a
rolling two-year period; the maximum bonus payable to Dr. Singer in any two-year
period is $200,000. In addition, we granted to Dr. Singer (i) stock options to
purchase 100,000 shares of our common stock at a purchase price of $11.60, with
all of the shares subject to such stock option vesting ratably on a monthly
basis over four years, and (ii) 50,000 shares of restricted common stock with
our repurchase right lapsing with respect to all of such restricted shares on
August 1, 2008, subject to Dr. Singer's continued employment with PCTEL on that
date.
The agreement further provides that in the event Dr. Singer's employment is
involuntarily terminated by PCTEL (other than for cause, death or disability) or
voluntarily by Dr. Singer for good reason (other than following a change of
control where the benefits to be received under such scenario are governed by
the management retention agreements described above), Dr. Singer will receive 24
months continued salary, 100% of targeted bonus compensation (excluding the
second annual bonus described above) for the fiscal year in which such
termination occurs, up to 18 months continued health benefits and accelerated
vesting with respect to his equity awards for the number of shares that would
have vested, or been released from our repurchase right, had Dr. Singer
continued his employment with us for an additional 12 months following his
termination date.
In September 2003, we entered into an addendum to Dr. Singer's amended
employment agreement, which provides that at any time prior to July 1, 2008, Dr.
Singer may require us to obtain, at our expense, an individual health care
policy for the benefit of Dr. Singer and his immediate family. As long as Dr.
Singer
21
remains employed by us, we will pay for his health care coverage. If Dr. Singer
elects to have us obtain an individual health care policy and satisfies the
five-year term of his employment agreement (which five-year term shall be deemed
fulfilled if Dr. Singer's employment with PCTEL is terminated without cause or
due to death or disability), Dr. Singer will be responsible following his
employment termination for payment of premiums under the policy until he reaches
age 62. Thereafter, we will be responsible for payment of such premiums until
Dr. Singer and his wife reach age 65. Upon Dr. Singer and his wife reaching age
65, our obligation to pay the premiums necessary to maintain the policy will
terminate and we will instead be obligated to pay the premiums necessary to
maintain a Medicare supplemental policy for the remainder of the lives of Dr.
Singer and his wife.
John Schoen. In November 2001, John Schoen joined us as our chief
financial officer, chief operating officer and secretary. Mr. Schoen's "at-will"
employment agreement sets forth his annual salary and targeted bonus
compensation, which is subject to certain milestones. Such employment agreement
also provides that in the event Mr. Schoen's employment is involuntarily
terminated other than for cause (other than following a change of control where
the benefits to be received under such scenario are governed by the management
retention agreements referenced above), Mr. Schoen will receive 12 months
continued salary, up to 12 months continued health benefits and continued
vesting with respect to his equity awards for the 12 months following his
termination date.
Jeffrey A. Miller. In November 2001, Jeffrey A. Miller joined us as our
vice president, engineering and development. Mr. Miller's "at-will" employment
agreement sets forth his annual salary and targeted bonus compensation, which is
subject to certain milestones. Such employment agreement also provides that in
the event Mr. Miller's employment is involuntarily terminated other than for
cause (other than following a change of control where the benefits to be
received under such scenario are governed by the management retention agreements
referenced above), Mr. Miller will receive 12 months continued salary, up to 12
months continued health benefits and continued vesting with respect to his
equity awards for the 12 months following his termination date.
22
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Notwithstanding any statement to the contrary in any of our previous or
future filings with the SEC, this report of the audit committee of the board of
directors shall not be deemed "filed" with the SEC or "soliciting material'
under the Exchange Act, and shall not be incorporated by reference into any such
filings.
The audit committee of our board of directors was formed in March 2000 and
consists of Carl Thomsen, Richard Alberding and Giacomo Marini, each of whom
meets the Nasdaq independence and experience requirements. The audit committee
operates under a written charter. During the 2003 fiscal year, the audit
committee reviewed its charter and determined that certain amendments would be
appropriate in consideration of the provisions of the Sarbanes-Oxley Act and
related rules of the SEC and the National Association of Securities Dealers.
Upon the recommendation of the audit committee, the board of directors adopted
the original charter for the audit committee in August 1999, and approved the
latest amended and restated charter for the audit committee in November 2003, a
copy of which is attached to this proxy statement as Appendix A.
The purpose of the audit committee is to review the procedures of
management for the design, implementation and maintenance of a comprehensive
system of internal and disclosure controls and procedures focused on the
accuracy of our financial statements and the integrity of our financial
reporting systems. The audit committee provides our board of directors with the
results of the committee's examinations and recommendations and reports to the
board of directors as the committee may deem necessary to make the board aware
of significant financial matters that require the board's attention.
The audit committee does not conduct auditing reviews or procedures. The
audit committee relies on management's representation that our financial
statements have been prepared accurately and in conformity with United States
generally accepted accounting principles and on the representations of the
independent auditors included in such auditors' report on our financial
statements. The audit committee has also adopted a written policy that is
intended to encourage our employees to bring to the attention of management and
the audit committee any complaints regarding the integrity of our internal
financial controls or the accuracy or completeness of financial or other
information related to our financial statements.
The audit committee reviews reports and provides guidance to our
independent auditors with respect to their annual audit and approves in advance
all audit and non-audit services provided by our independent auditors in
accordance with applicable regulatory requirements. In connection with the
standards for independence of external auditors promulgated by the SEC, during
the 2004 fiscal year, the audit committee will consider, in advance of the
provision of any non-audit services by our independent auditors, whether the
provision of such services is compatible with maintaining the independence of
the external auditors.
In accordance with its responsibilities, the audit committee has reviewed
and discussed with management the audited financial statements for the year
ended December 31, 2003. PricewaterhouseCoopers LLP issued their unqualified
report dated February 2, 2004 on our financial statements. The audit committee
has also discussed with PricewaterhouseCoopers LLP the matters required to be
discussed by SAS No. 61, Communication with Audit Committees. The audit
committee has received the written disclosures and the letter from
PricewaterhouseCoopers LLP required by Independence Standards Board Standard No.
1, Independence Discussions with Audit Committees, and has discussed with
PricewaterhouseCoopers LLP its independence, including whether
PricewaterhouseCoopers LLP's provision of non-audit services is compatible with
its independence.
23
Based on these reviews and discussions, the audit committee recommended to
our board of directors that our audited financial statements for the year ended
December 31, 2003 be included in our Annual Report on Form 10-K for the fiscal
year then ended.
Respectfully submitted by:
THE AUDIT COMMITTEE
Carl Thomsen (Chair)
Richard Alberding
Giacomo Marini
24
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Notwithstanding any statement to the contrary in any of our previous or
future filings with the SEC, this report of the compensation committee of the
board of directors shall not be deemed "filed" with the SEC or "soliciting
material" under the Exchange Act, and shall not be incorporated by reference
into any such filings.
The compensation committee of our board of directors was formed in March
2000 and currently consists of Richard Alberding, John Sheehan and Brian
Jackman. Recommendations concerning the compensation of our chief executive
officer are made to the board of directors by the compensation committee.
Decisions concerning the compensation of all of our other executive officers are
made by the compensation committee and may be reviewed periodically by the full
board of directors (excluding any interested director).
The original charter of the compensation committee was adopted by the board
of directors in August 1999 and was subsequently amended in October 2002. During
the 2003 fiscal year, the compensation committee reviewed its charter and
determined that certain additional amendments would be appropriate in
consideration of the provisions of the Sarbanes-Oxley Act and related rules of
the SEC and the National Association of Securities Dealers. Upon the
recommendation of the compensation committee, in February 2004, the board of
directors approved an amended and restated charter for the compensation
committee.
RESPONSIBILITIES OF THE COMMITTEE
Acting on behalf of the board of directors, the compensation committee's
responsibilities include the following:
- Reviewing the performance of the chief executive officer and our other
executive officers;
- Recommending to the board of directors the total compensation package for
the chief executive officer and determining the compensation for the
other executive officers;
- Reviewing the compensation philosophy for our employees, including the
chief executive officer and other executive officers; and
- Administering our employee stock option and employee stock purchase
plans, including determining eligibility and the number and type of
options to be granted and the terms of such grants.
COMPENSATION PHILOSOPHY
Our philosophy in setting compensation policies for executive officers is
to maximize stockholder value over time. The primary goal of our executive
compensation program is, therefore, to closely align the interests of the
executive officers with those of our stockholders. To achieve this goal, we
attempt to offer compensation opportunities that give us the ability to attract
and retain executives whose skills are critical to our long-term success,
motivate individuals to perform at their highest level, and reward outstanding
achievement. In addition, we attempt to maintain a significant portion of each
executive's total compensation at risk and tied to our achievement of financial,
organizational and management performance goals, thus encouraging executives to
manage from the perspective of owners with an equity stake in us. To achieve
these goals, the compensation committee has established an executive
compensation program primarily consisting of cash compensation, stock options,
restricted stock grants and other compensation and benefit programs generally
available to other employees. In January 2003, the compensation committee
recommended and the board of directors approved the implementation of a deferred
compensation plan for the benefit of our officers and key managers.
EXECUTIVE OFFICER COMPENSATION
The cash component of total compensation, which consists of base salary and
bonus, is designed to compensate executives competitively within the industry
and marketplace. The compensation committee, on an annual basis, reviews and
recommends to the board of directors the base salary and bonus (with associated
milestones) for the chief executive officer and reviews and approves the base
salaries and target bonuses (with associated milestones) for our other
executives. Our executives' compensation in fiscal 2003 was established by the
compensation committee based upon each executive's scope of job
responsibilities, level of experience,
25
past performance, contribution to our business, and data on prevailing
compensation levels in relevant markets for executive talent. Regarding the
latter measure, certain companies included in the peer group index of the stock
performance graph are also included in surveys reviewed by the compensation
committee in reviewing salary levels for our chief executive officer and other
executive officers.
In addition to base salary, we pay annual bonuses to our executive
officers. These annual bonuses are intended to provide a direct link between
management compensation and the achievement of corporate and individual
objectives. The amount of bonus is determined based upon an executive's
achievement of certain milestones, which are approved by the board of directors
for our chief executive officer and reviewed by the board of directors for our
other executive officers.
We provide long-term incentives through the grant of restricted stock and
stock options under our stock option plans, particularly our 1997 Stock Plan and
our 1998 Employee Stock Purchase Plan. The purpose of our 1997 Stock Plan is to
attract and retain the best employee talent available and to create a direct
link between compensation and our long-term performance. The compensation
committee believes that stock and options directly motivate an executive to
maximize long-term stockholder value. The stock and options also utilize vesting
periods to encourage key executives to continue in our employment. All stock
options granted to executive officers to date have been granted at the fair
market value of our common stock on the date of grant. The board considers each
stock and option grant subjectively, considering factors such as the individual
performance of the executive officer and the anticipated contribution of the
executive officer to the attainment of our long-term strategic performance
goals. Because the receipt of value by an executive officer under a stock option
is dependent upon an increase in the price of our common stock, this portion of
the executive's compensation is directly aligned with an increase in stockholder
value. Generally, restricted stock and/or stock options are granted to an
executive officer in conjunction with the executive officer's acceptance of
employment. When determining the number of shares of stock or the number of
stock options to be awarded to an executive officer, the compensation committee
considers the individual's current contribution to our performance, the
executive officer's anticipated contribution in meeting our long-term strategic
performance goals, and comparisons to formal and informal surveys of executive
stock and option grants made by other peer companies. The compensation committee
also reviews stock and option levels for executive officers at the beginning of
each fiscal year in light of long-term strategic and performance objectives and
each executive's current and anticipated contributions to our future
performance.
2003 CHIEF EXECUTIVE OFFICER COMPENSATION
The compensation committee reviews the chief executive officer's
compensation using the same criteria and policies as are employed for the other
executive officers. The compensation committee based its compensation
recommendations for fiscal 2003 on a variety of factors, including the scope and
responsibility of the chief executive officer and comparisons of chief executive
officer compensation levels for companies of similar size and maturity. The
compensation committee also focused on our performance during fiscal 2002 in
setting the compensation for fiscal 2003. In 2003, we entered into a five-year
amended employment agreement with our chief executive officer which included,
among other things, an increase in his base salary, additional stock option
grants and restricted stock awards, a new, additional annual bonus first payable
in 2005, the amount of which will be determined based on the achievement of
corporate and individual objectives measured over a two-year period, and
additional health care benefits to be provided to our chief executive officer
and his family during and following the course of his employment with PCTEL.
The compensation of Dr. Singer for fiscal year 2003, as our current chief
executive officer and chairman of the board, included $367,500 in base salary, a
$302,281 bonus, the grant of options to purchase up to 160,000 shares of our
common stock and a restricted stock grant of 50,000 shares of common stock. Dr.
Singer also received additional compensation in the aggregate amount of $46,906,
which included a car allowance, health insurance and life insurance benefits,
matching contributions from us in connection with his participation in our
executive deferred compensation plan and our 401(k) plan, and various
perquisites.
26
QUALIFYING COMPENSATION
In general, it is our policy to qualify, to the maximum extent possible,
our executives' compensation for deductibility under applicable tax laws. The
compensation committee has considered the potential impact of Section 162(m) of
the Internal Revenue Code on the compensation paid to our executive officers.
None of the executive officers named in the proxy statement were compensated
over $1.0 million in 2003.
Respectfully submitted by:
THE COMPENSATION COMMITTEE
Richard C. Alberding (Chair)
John Sheehan
Brian J. Jackman
27
COMPANY PERFORMANCE
Notwithstanding any statement to the contrary in any of our previous or
future filings with the SEC, this company performance graph shall not be deemed
"filed" with the SEC or "soliciting material" under the Exchange Act and shall
not be incorporated by reference into any such filings.
The graph below compares the annual percentage change in the cumulative
return to our stockholders with the cumulative return of the Nasdaq Stock Market
Index and of the S&P Technology Sector Index from the date of our initial public
offering (October 19, 1999) and ending on December 31, 2003. Returns for the
indices are weighted based on market capitalization at the beginning of each
measurement point. Note that historic stock price performance is not necessarily
indicative of future stock price performance.
COMPARISON OF 50 MONTH CUMULATIVE TOTAL RETURN*
AMONG PCTEL, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE S&P INFORMATION TECHNOLOGY INDEX
(PERFORMANCE GRAPH)
-------------------------------------------------------------------------------------------------------------------------------
10/19/99 12/31/99 06/30/00 12/31/00 06/30/01 12/31/01 06/30/02 12/31/02
-------------------------------------------------------------------------------------------------------------------------------
PCTEL, INC. 100.00 308.82 223.53 63.24 54.18 57.12 39.82 39.88
NASDAQ STOCK MARKET (U.S.) 100.00 147.72 144.30 89.09 78.40 70.71 53.41 48.89
S&P INFORMATION TECHNOLOGY 100.00 135.87 140.06 80.30 66.89 59.53 40.78 37.26
--------------------------------------- --------------------
06/30/03 12/31/03
--------------------------------------- --------------------
PCTEL, INC. 69.76 63.24
NASDAQ STOCK MARKET (U.S.) 59.30 73.09
S&P INFORMATION TECHNOLOGY 43.84 54.85
* $100 invested on 10/19/99 in stock or on 9/30/99 in index-including
reinvestment of dividends. Fiscal year ending December 31.
Copyright(C) 2002, Standard & Poor's, a division of The McGraw-Hill Companies,
Inc. All rights reserved. www.researchdatagroup.com/S&P.htm
OTHER MATTERS
We know of no other matters to be submitted at the meeting. If any other
matters properly come before the meeting, it is the intention of the persons
named in the enclosed form of proxy to vote the shares they represent as the
board of directors may recommend.
THE BOARD OF DIRECTORS
Dated: April 29, 2004
28
APPENDIX A
CHARTER
FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF
PCTEL, INC.
(AS AMENDED NOVEMBER 12, 2003)
PURPOSE:
The purpose of the Audit Committee of the Board of Directors (the "BOARD")
of PCTEL, Inc. (the "COMPANY") shall be to:
- Assist the Board in monitoring of (i) the integrity of the Company's
financial statements, (ii) the Company's accounting policies and
procedures, (iii) the Company's compliance with legal and regulatory
requirements, (iv) the independent auditor's qualifications, independence
and performance, (v) the Company's disclosure controls and procedures and
(vi) the Company's internal controls; and
- Provide to the Board such additional information and materials as it may
deem necessary to make the Board aware of significant financial matters
that require the attention of the Board.
In addition, the Audit Committee will undertake those specific duties and
responsibilities listed below and such other duties as the Board may from time
to time prescribe.
MEMBERSHIP:
The Audit Committee members will be appointed by, and will serve at the
discretion of, the Board. The Audit Committee will consist of at least three
members of the Board. Members of the Audit Committee must meet the following
criteria:
- Each member will be an independent director, as defined in (i) Nasdaq
Rule 4200 and (ii) the rules of the Securities and Exchange Commission
(the "SEC"), as in effect from time to time;
- Each member will be able to read and understand fundamental financial
statements, in accordance with the Nasdaq National Market Audit Committee
requirements; and
- At least one member will have past employment experience in finance or
accounting, requisite professional certification in accounting, or other
comparable experience or background, including a current or past position
as a principal financial officer or other senior officer with financial
oversight responsibilities.
RESPONSIBILITIES:
The responsibilities of the Audit Committee shall include:
- Reviewing the reports by management and the independent auditors
concerning the design, implementation and maintenance for the Company's
system of internal controls and meeting periodically with the Company's
management and the independent auditors to review their assessment of the
adequacy of such internal controls;
- Exercising direct responsibility for appointing, compensating (including
all audit engagement fees and terms), overseeing the work of, and
terminating the services of, the independent auditors for the purpose of
preparing or issuing an audit report or other audit, review or attest
services;
- Approving the audit and permitted non-audit services provided to the
Company by the independent auditors in accordance with the applicable
requirements of the SEC;
A-1
- Reviewing the independence of the outside auditors, including (i)
obtaining on a periodic basis a formal written statement from the
independent auditors regarding relationships and services with the
Company that may impact independence, as defined by applicable standards
and SEC requirements, (ii) presenting this statement to the Board, and
(iii) to the extent there are relationships, monitoring and investigating
them;
- Reviewing and providing guidance with respect to the external audit by
(i) reviewing the independent auditors' proposed audit scope and
approach; (ii) discussing with the Company's independent auditors the
financial statements and audit findings, including any significant
adjustments, management judgments and accounting estimates, significant
new accounting policies and disagreements with management and any other
matters described in SAS No. 61,; and (iii) reviewing reports submitted
to the audit committee by the independent auditors in accordance with the
applicable SEC requirements;
- Reviewing and discussing with management and the independent auditors the
annual audited financial statements and quarterly unaudited financial
statements, including the Company's disclosures under "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," prior to filing the Company's Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q, respectively, with the SEC (which for
purposes of the annual report shall include a recommendation to the Board
as to whether the audited financial statements should be included in the
Company's Annual Report on Form 10-K);
- Reviewing the audit findings, including any suggestions for improvements,
provided to management by the independent auditors and management's
response to such findings;
- Reviewing with the Company's management and the independent auditors
before release the unaudited quarterly operating results in the Company's
quarterly earnings release;
- Reviewing the procedures of management for the design, implementation and
maintenance for the Company's system of disclosure controls (including
any reports by management relating to such controls and procedures) and
meeting periodically with the Company's management, independent auditors
and legal counsel to review their assessment of such disclosure controls
and procedures;
- If necessary, instituting special investigations with full access to all
books, records, facilities and personnel of the Company;
- Retaining, as appropriate, outside legal, accounting or other advisors to
advise or assist the Audit Committee;
- Reviewing and approving in advance any proposed related-party
transactions;
- Reviewing the Audit Committee charter annually;
- Providing a report in the Company's proxy statement in accordance with
the rules and regulations of the SEC; and
- Establishing the procedures for receiving, retaining and treating
complaints received from the Company's employees regarding accounting,
internal accounting controls or auditing matters and the confidential,
anonymous submission by employees of the Company of concerns regarding
questionable accounting or auditing matters.
MEETINGS:
The Audit Committee will meet at least four times each year. The Audit
Committee will meet separately with the Chief Financial Officer of the Company
at such times as are appropriate to review the financial affairs of the Company.
The Audit Committee will meet separately with the independent auditors of the
Company, at such times as it deems appropriate, to fulfill the responsibilities
of the Audit Committee under this charter.
A-2
MINUTES:
The Audit Committee will maintain written minutes of its meetings, which
minutes will be filed with the minutes of the meetings of the Board.
REPORTS:
In addition to preparing the report in the Company's proxy statement in
accordance with the rules and regulations of the SEC, the Audit Committee will
summarize its discussions, reviews and recommendations to the Board as may be
appropriate, consistent with the Committee's charter.
DELEGATION OF AUTHORITY:
The Audit Committee may delegate to one or more designated members of the
Audit Committee the authority to pre-approve audit and permitted non-audit
services, provided such pre-approval decision is presented to the full Audit
Committee at its scheduled meetings.
RESOURCES:
The Audit Committee shall have the resources as determined by the Committee
and authority appropriate to discharge its duties and responsibilities,
including the authority to select, retain, terminate, and approve the fees and
other retention terms of special counsel, accountants or other experts or
consultants, as it deems appropriate, without seeking approval of the Board or
management.
A-3
PCTEL, INC.
ANNUAL MEETING OF STOCKHOLDERS
----------
THURSDAY, JUNE 3, 2004
10:00 A.M. LOCAL TIME
----------
PCTEL, INC.
8725 WEST HIGGINS ROAD
SUITE 400
CHICAGO, ILLINOIS 60631
--------------------------------------------------------------------------------
This proxy is solicited on behalf of the board of directors for use at
the annual meeting of stockholders on June 3, 2004.
The undersigned stockholder of PCTEL, Inc., a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated April 29, 2004, and hereby appoints Martin H. Singer
and John Schoen, and each of them, proxies and attorneys-in-fact, with full
power to each of substitution, on behalf and in the name of the undersigned, to
represent the undersigned at the 2004 Annual Meeting of Stockholders of PCTEL,
Inc. to be held on June 3, 2004 at 10:00 a.m. local time at our headquarters,
located at 8725 West Higgins Road, Suite 400, Chicago, Illinois 60631, and at
any adjournment or adjournments thereof, and to vote all shares of common stock
which the undersigned would be entitled to vote if then and there personally
present on the matters set forth on the reverse side.
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 ALL NOMINEES TO THE BOARD OF DIRECTORS; AND AS THE
PROXY HOLDER MAY DETERMINE IN HIS DISCRETION WITH REGARD TO ANY OTHER MATTER
PROPERLY BROUGHT BEFORE THE MEETING.
PLEASE VOTE BY TELEPHONE OR THE INTERNET OR MARK, SIGN, DATE
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
See reverse for voting instructions.
COMPANY #
--------------------
THERE ARE THREE WAYS TO VOTE YOUR PROXY.
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card.
VOTE BY PHONE -- TOLL FREE -- 1-800-560-1965 -- QUICK***EASY***IMMEDIATE
o Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week, until 12:00 p.m. (CT) on June 2, 2004.
o Please have your proxy card and the last four digits or your Social
Security Number available. Follow the simple instructions the voice
provides you.
VOTE BY INTERNET -- HTTP://WWW.EPROXY.COM/PCTI/ -- QUICK***EASY***IMMEDIATE
o Use the Internet to vote your proxy 24 hours a day, 7 days a week, until
12:00 p.m. (CT) on June 2, 2004.
o Please have your proxy card and the last four digits or your Social
Security Number available. Follow the simple instructions to obtain your
records and create an electronic ballot.
VOTE BY MAIL
o Mark, sign and date your proxy card and return it in the postage-paid
envelope we've provided or return it to PCTEL, Inc., c/o Shareowner
Services, P.O. Box 64873, St. Paul, MN 55164-9397.
IF YOU VOTE BY PHONE OR THE INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE FOLLOWING PROPOSALS:
1. Election of Class II 01 Richard C. Alberding 02 Carl A. Thomsen [ ] Vote FOR all [ ] Vote WITHHELD
directors to serve nominees (except as from all nominees
until 2007 marked)
------------------------------------------------
(Instructions: To withhold authority to vote for any indicated | |
nominees write the number(s) of the nominee(s) in the box provided to | |
the right.) | |
------------------------------------------------
2. Ratification of the appointment of PricewaterhouseCoopers LLP as [ ] FOR [ ] AGAINST [ ] ABSTAIN
independent auditors of PCTEL, Inc. for the fiscal year ending
December 31, 2004
IN THEIR DISCRETION, the proxy holders are authorized to vote upon such
other business as may properly come before the meeting or any adjournments
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR ALL PROPOSALS.
I plan to attend the annual meeting [ ]
Address Change?
Mark Box [ ] Indicate changes below:
Date
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Signature(s) in Box
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 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.