SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sections 240.14a-11(c)
or Section 240.14a-12
WESTELL TECHNOLOGIES, INC.
--------------------------
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth
the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
WESTELL TECHNOLOGIES, INC.
750 NORTH COMMONS DRIVE
AURORA, ILLINOIS 60504
(630) 898-2500
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 25, 2003
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Westell Technologies, Inc., a
Delaware corporation (the "Company"), will be held at the Company's Corporate
Headquarters, 750 North Commons Drive, Aurora, Illinois on Thursday, September
25, 2003 at 10:00 a.m. Central Daylight Time for the following purposes:
1. To elect seven directors;
2. To approve an amendment to the amended and restated certificate
of incorporation of the Company to permit stockholders holding
25% or more of the voting power of the Company to call a special
meeting of stockholders.
3. To approve an amendment to the Bylaws of the Company to eliminate
the provisions set forth in Article IX of the Bylaws that prevent
Westell from selling securities having forward pricing provisions
without first obtaining majority stockholder approval.
4. Any other matters that properly come before the meeting.
The Board of Directors has fixed the close of business on August 4,
2003 as the record date for determining the stockholders entitled to notice of
and to vote at the Annual Meeting.
By Order of the Board of Directors
Nicholas C. Hindman, Sr.
Senior Vice President and
Chief Financial Officer
August 21, 2003
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE, SIGN AND MAIL THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED WHICH REQUIRES NO POSTAGE FOR MAILING IN
THE UNITED STATES. A PROMPT RESPONSE IS HELPFUL, AND YOUR COOPERATION WILL BE
APPRECIATED.
WESTELL TECHNOLOGIES, INC.
750 NORTH COMMONS DRIVE
AURORA, ILLINOIS 60504
-----------
Proxy Statement
Annual Meeting of Stockholders to be held September 25, 2003
-----------
To the Stockholders of
WESTELL TECHNOLOGIES, INC.:
This Proxy Statement is being mailed to stockholders on or about August
21, 2003 and is furnished in connection with the solicitation by the Board of
Directors of Westell Technologies, Inc (the "Company") of proxies for the Annual
Meeting of Stockholders to be held on September 25, 2003 for the purpose of
considering and acting upon the matters specified in the Notice of Annual
Meeting of Stockholders accompanying this Proxy Statement. If the form of Proxy
which accompanies this Proxy Statement is executed and returned, it will be
voted. A Proxy may be revoked at any time prior to the voting thereof by written
notice to the Secretary of the Company or by attending the meeting and voting in
person.
A majority of the outstanding shares entitled to vote at this meeting
and represented in person or by proxy will constitute a quorum. A quorum is
needed for any proposal to be adopted.
The affirmative vote of the holders of a plurality of the voting power
of the Company entitled to vote and represented in person or by proxy at the
meeting is required for the election of directors. Neither the nonvoting of
shares nor withholding of authority will affect the election of directors.
The affirmative vote of holders of a majority of the voting power of
Class A Common Stock and Class B Common Stock, voting as a single class, is
required to adopt the above described amendments to the Bylaws of the Company
and the Amended and Restated Certificate of Incorporation of the Company. Shares
represented by proxies which are marked "abstain" or to deny discretionary
authority on any matter will be treated as shares present and entitled to vote
and will have the same affect as votes against any such matters. Broker
"non-votes" will also have the same affect as votes against the proposals to
approve the amendment to the Company's Amended and Restated Certificate of
Incorporation and the amendment to the Company's Bylaws. Broker "non-votes" and
the shares as to which stockholders abstain are included for purposes of
determining whether a quorum of shares is present at a meeting. A broker
"non-vote" occurs when a nominee holding shares for a beneficial owner does not
vote a particular proposal because the nominee does not have discretionary
voting power with respect to that item and has not received instructions from
the beneficial owner.
With regard to approving any other proposal submitted to a vote at the
meeting, votes cast in favor of a proposal must exceed the votes cast in
opposition.
Expenses incurred in the solicitation of proxies will be borne by the
Company. Officers of the Company may make additional solicitations in person or
by telephone.
The Annual Report to Stockholders on Form 10-K for fiscal year ended
March 31, 2003 ("fiscal 2003") accompanies this Proxy Statement. If you did not
receive a copy of the report, you may obtain one by writing to the Secretary of
the Company.
Only holders of record of Class A Common Stock or Class B Common Stock
at the close of business on August 4, 2003 are entitled to vote at the meeting.
As of August 4, 2003, the Company had outstanding 49,243,451 shares of Class A
Common Stock and 17,550,860 shares of Class B Common Stock (collectively, the
"Common Stock"), and such shares are the only shares entitled to vote at the
Annual Meeting. Each share of Class A Common Stock is entitled to one vote and
each share of Class B Common Stock is entitled to four votes on each matter to
be voted upon at the Annual Meeting.
SECURITIES BENEFICIALLY OWNED BY
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial holdings (and the
percentages of outstanding shares represented by such beneficial holdings) as of
July 21, 2003, of (i) each person (including any "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934) known by the Company to own
beneficially more than 5% of either class of its outstanding Common Stock, (ii)
each director, (iii) each Named Executive Officer identified in the summary
compensation table below, and (iv) all directors and executive officers as a
group. Except as otherwise indicated, the Company believes that the beneficial
owners of the Common Stock listed below, based on information provided by such
owners, have sole investment and voting power with respect to such shares,
subject to community property laws where applicable. Persons who have the power
to vote or dispose of Common Stock of the Company, either alone or jointly with
others, are deemed to be beneficial owners of such Common Stock.
STOCKHOLDERS, NUMBER OF NUMBER OF PERCENT OF PERCENT OF PERCENT OF
NAMED EXECUTIVE CLASS A CLASS B CLASS A CLASS B TOTAL VOTING
OFFICERS AND DIRECTORS SHARES(1)(2) SHARES(2) COMMON STOCK COMMON STOCK POWER(3)
------------------------------- ---------- ------------ -------------- ------------- ---------------
Robert C. Penny III........ -- 14,826,886(4) -- 84.5% 49.7%
Melvin J. Simon............ 145,250(5) 16,201,848(4)(6) * 92.3% 54.4%
Becker Capital Management (7) 2,467,440 -- 5.0% -- 3.6%
E. Van Cullens............. 948,799 -- 1.9% -- *
John W. Seazholtz.......... 135,250 -- * -- *
Nicholas C. Hindman, Sr.... 189,061 -- * -- *
William J. Noll............ 288,226 -- * -- *
John C. Clark............. 28,763 -- * -- *
Paul A. Dwyer.............. 192,650 -- * -- *
Richard Riviere............ 21,600 -- * -- *
Bernard F. Sergesketter.... 43,650 -- * -- *
Roger L. Plummer........... 18,000 -- * -- *
All Directors and Executive
Officers as a group (13
Persons)................... 2,011,249 4.1% 1.7%
------------------
* Less than 1%
(1) Includes options to purchase shares that are exercisable within 60 days of
July 21, 2003 as follows: Mr. Cullens: 901,799 shares; Mr. Simon: 133,750
shares; Mr. Noll: 270,750 shares; Mr. Dwyer: 176,650 shares; Mr. Seazholtz:
118,250 shares; Mr. Sergesketter: 33,650 shares; Mr. Hindman: 179,061
shares; Mr. Clark: 28,763 shares; Mr. Riviere: 21,600 shares; Mr. Plummer:
13,000 shares; and all directors and officers as a group: 1,855,673 shares.
(2) Holders of Class B Common Stock have four votes per share and holders of
Class A Common Stock have one vote per share. Class A Common Stock is
freely transferable and Class B Common Stock is transferable only to
certain transferees but is convertible into Class A Common Stock on a
share-for-share basis.
(3) Percentage of beneficial ownership is based on 49,206,255 shares of Class A
Common Stock and 17,550,860 shares of Class B Common Stock outstanding as
of July 21, 2003.
(4) Includes 14,826,886 shares of Class B Common Stock held by Messrs. Penny
and Simon, as Trustees pursuant to a Voting Trust Agreement dated February
23, 1994, as amended (the "Voting Trust"), among Robert C. Penny III and
Melvin J. Simon, as trustees (the "Trustees"), and certain members of the
Penny family and the Simon family. The Trustees have joint voting and
dispositive power over all shares in the Voting Trust. Messrs. Penny and
Simon each disclaim beneficial ownership with respect to all shares held in
the Voting Trust in which they do not have a pecuniary interest. The Voting
Trust contains 3,158,631 shares held for the benefit of Mr. Penny and
237,804 shares held for the benefit of Mr. Simon. The address for Messrs.
Penny and Simon is Melvin J. Simon & Associates, Ltd., 4343 Commerce Court,
Suite 616, Lisle, Illinois 60532.
(5) Includes 9,500 shares owned by Stacy L. Simon, Melvin J. Simon's daughter,
and 2,000 shares held in trust for the benefit of Makayla G. Penny, Mr.
Penny's daughter, for which Mr. Simon is trustee and has sole voting and
dispositive power; Mr. Simon disclaims beneficial ownership of these
shares.
(6) Includes 45,980 shares held in trust for the benefit of Sheri A. Simon and
45,980 shares held in trust for Stacy L. Simon, Melvin J. Simon's
daughters, for which Natalie Simon, Mr. Simon's wife, is custodian and has
sole voting and dispositive power; includes 1,283,002 shares held in trust
for the benefit of Mr. Penny's children for which Mr. Simon is trustee and
has sole voting and dispositive power. Mr. Simon disclaims beneficial
ownership of these shares.
(7) The Class A Common stock listed in the table is owned of record by clients
of Becker Capital Management, Inc. In its capacity as an investment
advisor, Becker Capital Management, Inc. may be deemed to beneficially own
the shares listed in the table. The address for this stockholder is 1211 SW
5th Avenue, Portland, Oregon 97204.
-2-
PROPOSAL NO. 1: ELECTION OF DIRECTORS
At the Annual Meeting, seven directors, are to be elected to hold
office until the next annual meeting of stockholders or until their successors
are elected and qualified. Thomas Reynolds, a current board member, is planning
to resign from the board effective September 1, 2003. The Company is currently
conducting a search for his replacement but expects that this position will
remain vacant until after the Annual Meeting. The Bylaws of Westell
Technologies, Inc. provide that not less than six nor more than ten directors
shall constitute the board of directors.
The Board of Directors has no reason to believe that any such nominee
will be unable to serve. It is intended that the proxies will be voted for the
nominees listed below. It is expected that the nominees will serve, but if any
nominee declines or is unable to serve for any unforeseen cause, the proxies
will be voted to fill any vacancy so arising in accordance with the
discretionary authority of the persons named in the proxies.
NOMINEES
The following table sets forth certain information with respect to the
nominees, all of whom are current members of the present Board of Directors.
DIRECTOR PRINCIPAL OCCUPATION
NAME AND AGE SINCE AND OTHER INFORMATION
------------ ----- ---------------------
John W. Seazholtz (66) 1997 John W. Seazholtz has served as
Director of the Company since
December 1997 and was elected
Chairman in April 2000. Mr.
Seazholtz was President and Chief
Executive Officer of Telesoft
America, Inc. from May 1998 to May
2000. In April 1998, Mr. Seazholtz
retired as Chief Technology
Officer - Bell Atlantic where he
served since June 1995. Mr.
Seazholtz previously served as
Vice President Technology and
Information Services - Bell
Atlantic and in other executive
capacities with Bell Atlantic
beginning in 1962. Mr. Seazholtz
currently serves as a Director for
Odetics, Inc., a supplier of
digital data management products
for the security, broadcast and
computer storage markets, and for
ASC-Advanced Switching
Communications, an ATM network
equipment developer. He is
Chairman of eWay Group, a private
consulting firm. He is on the
Board of Overseers of N.J.
Institute of Technology.
Melvin J. Simon (58) 1992 Melvin J. Simon has served as
Assistant Secretary of the Company
since July 1995 and as a Director
of the Company since August 1992.
From July 1995 to April 2003, Mr.
Simon served as Assistant
Treasurer of the Company. From
August 1992 to July 1995, Mr.
Simon served as Secretary and
Treasurer of the Company. A
Certified Public Accountant, Mr.
Simon founded and has served as
President of Melvin J. Simon &
Associates, Ltd., a public
accounting firm, since May 1980.
Mr. Simon serves as a Director of
the Company's 91.5% owned
subsidiary Conference Plus, Inc.
-3-
Paul A. Dwyer (69) 1996 Paul A. Dwyer has served as a
Director of the Company since
January 1996 and as a Director of
Westell, Inc., a wholly owned
subsidiary of the Company, since
November 1995. Mr. Dwyer, now
retired, served as Chief Financial
Officer of Henry Crown and
Company, a private investment firm
from February 1981 to December
1999, and as Vice President --
Administration of Longview
Management Group, LLC, a
registered investment advisor,
from October 1998 to December
1999. Mr. Dwyer serves as a
Director for McHenry Bancorp Inc.,
Rush Computer Rental and
Valuemetrics Advisors.
Robert C. Penny III (50) 1998 Robert C. Penny III has served as
a Director of the Company since
September 1998. He has been the
managing partner of P.F.
Management Co., a private
investment company, since May
1980.
Bernard F. Sergesketter (67) 2000 Bernard F. Sergesketter has served
as a Director of the Company since
March 2000. Mr. Sergesketter is
Chairman and Chief Executive
Officer of Sergesketter &
Associates, a marketing consulting
firm, since 1994. He served as a
Vice President of AT&T from
January 1983 to August 1994. Mr.
Sergesketter was a Director of
Teltrend, Inc, a wholly owned
subsidiary of the Company, from
January 1996 to March 2000 and
currently serves as a Director of
Solar Communications Inc., the
Illinois Institute of Technology
and The Sigma Chi Foundation.
E. Van Cullens (57) 2001 E. Van Cullens has served as
President, Chief Executive Officer
and Director of the Company since
July 2001. Prior to joining the
Company, Mr. Cullens operated
Cullens Enterprises, LLC, a
management consulting firm focused
in telecommunications, from June
2000 through June 2001. From June
1999 to May 2000, Mr. Cullens
served as President and Chief
Operating Officer of Harris
Corporation and served as
President, Communications Sector
from May 1997 to June 1999. Mr.
Cullens served in various
executive capacities with Siemens
A. G. and affiliated companies
from January 1991 to April 1997.
Mr. Cullens was with
Stromberg-Carlson from May 1984
until January 1991 when the
Stromberg-Carlson was acquired by
Siemens. From May 1972 to April
1984, Mr. Cullens held various
management positions with GTE
Corporation.
Roger L. Plummer (61) 2001 Roger L. Plummer has served as a
Director of the Company since
September, 2001. Mr. Plummer
currently serves as the Managing
Director of the International
Engineering Consortium. Mr.
Plummer also serves as a
consultant in communication
technology and corporate
organization and culture. Mr.
Plummer previously served in
various executive capacities at
Ameritech and its predecessor,
Illinois Bell, including President
of the Ameritech Custom Business
Services unit. Mr. Plummer serves
as a Board member of: DePaul
University, University of Illinois
Foundation, Chicago public
television Channel 11, Association
of Public Television Stations,
Accreditation Council of Graduate
Medical Education, Rush Hospital
Neurobehavioral Center, Chicago
Symphony Orchestra Governing
Members Organization and the
University of Illinois Medical
Center.
-4-
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES:
The Board of Directors held twelve meetings during fiscal 2003. All
directors attended at least 75% of the aggregate number of such meetings and of
meetings of Board committees on which they served in fiscal 2003.
The Board of Directors has five standing committees: the Audit
Committee, the Compensation Committee, the Executive Committee, the Finance
Committee and the Technology Committee.
The Audit Committee (comprised of Messrs. Dwyer (Chair), Simon and
Sergesketter) met three times in fiscal 2003. The functions of the Audit
Committee consist of providing oversight to the Company's financial reporting
process through periodic meetings with the Company's independent auditors and
management to review accounting, auditing, internal controls and financial
reporting matters. Each of the audit committee members is deemed independent as
such term is defined in the NASD listing standards. Mr. Dwyer serves as the
financial expert of the audit committee and is an independent director as such
term is defined under NASD rules.
The Compensation Committee (comprised of Messrs. Dwyer (Chair), Penny,
Seazholtz and Simon) met three times in fiscal 2003. The functions of the
Compensation Committee consist of determining executive officers' salaries and
bonuses as well as administering and determining awards to be granted under the
Company's 1995 Stock Incentive Plan and Employee Stock Purchase Plan.
The Finance Committee (comprised of Messrs. Simon (Chair), Cullens and
Dwyer) met two times in fiscal 2003. The functions of the Finance Committee
consist of making recommendations to the Board of Directors as to financial
matters and as to such matters as shall be referred to it by the Board of
Directors. The Finance Committee also periodically reviews the investment
policies and performance of the Company.
The Technology Committee (comprised of Messrs. Seazholtz (Chair),
Sergesketter, Plummer and Cullens) met once in fiscal 2003. The Technology
Committee was established to insure alignment between the Company's technology
initiatives and its overall business strategy.
Directors who are not employees of the Company each receive $20,000 per
year for services rendered as directors, except Robert C. Penny III, who
receives no compensation. In the fiscal 2003, outside directors, except for
Robert C. Penny III were granted stock options to purchase shares that vest
annually over five years and have a ten year term. John Seazholtz was granted
stock options to purchase 50,000 shares on April 1, 2002. Paul Dwyer, Thomas
Reynolds, Melvin Simon and Bernard Sergesketter were granted options to purchase
25,000 shares on April 1, 2002. Roger Plummer was granted options to purchase
15,000 shares on April 1, 2002. The exercise price for such options was based on
the fair market value of the options on the day of grant. In addition, all
directors may be reimbursed for certain expenses incurred in connection with
attendance at Board and committee meetings. Mr. Simon also receives $1,250 each
quarter for his services as a director of Conference Plus, Inc., a subsidiary of
the Company. Other than as described in this paragraph, directors who are
employees of the Company do not receive additional compensation for service as
directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES.
-5-
EXECUTIVE OFFICERS
The following sets forth certain information with respect to the
current executive officers of the Company. Please refer to the information
contained above under the heading "Election of Directors" for biographical
information of executive officers who are also directors of the Company.
Name Age Position
---- --- --------
John W. Seazholtz.......... 66 Chairman of the Board of Directors
E. Van Cullens............. 57 President and Chief Executive Officer
Nicholas C. Hindman, Sr.... 52 Treasurer, Secretary, Senior Vice President
and Chief Financial Officer
William J. Noll............ 61 Senior Vice President of Product Development
and Chief Technology Officer
John C. Clark.............. 55 Senior Vice President of Operations
Nicholas C. Hindman, Sr. has served as Treasurer, Secretary, Vice
President and Chief Financial Officer since March, 2000 and as acting Treasurer,
Secretary, Vice President and Chief Financial Officer of the Company from May
1999 to February 2000. From October 1997 to April 1999, Mr. Hindman served as
General Manager of MFI Holdings, LLC, a manufacturer of consumer products. From
1992 through September 1997, Mr. Hindman operated an auditing and consulting
firm specializing in initial public offerings, private placement of securities
and business turnarounds.
John C. Clark has served as Senior Vice President of Operations since
April 2001. Prior to joining the Company, Mr. Clark was Vice President of
Manufacturing from September 1998 to October 2000 with 3COM. Mr. Clark was
Director of Material Management at US Robotics/3COM from January 1996 to
September 1998. From 1994 to 1996, Mr. Clark served as Area Vice President of
Operations for Caremark. He also served as Director of Materials Management for
Caremark from 1991 to 1996.
William J. Noll has served as Senior Vice President of Research and
Development and Chief Technology Officer of Westell, Inc. since May 1997. Prior
to joining the Company, Mr. Noll was Vice President and General Manager of
Residential Broadband at Northern Telecom from October 1995 to May 1997. Mr.
Noll held other various Vice President and Assistant Vice President positions at
Northern Telecom from June 1988 to October 1996, and was Vice President Network
Systems at Bell Northern Research from November 1986 to June 1988.
-6-
EXECUTIVE COMPENSATION
The following table sets forth information for the fiscal years ended
March 31, 2001, 2002 and 2003, with respect to all compensation paid or earned
for services rendered to the Company by individuals who served as the Company's
Chief Executive Officer in fiscal 2003 and the Company's other most highly
compensated executive officers who were executive officers at March 31, 2003
(together, the "Named Executive Officers") and one individual who served as an
executive officer in fiscal 2003 but who is no longer serving as such on March
31, 2003.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------------------------------------------------------- ----------------------------
SECURITIES ALL OTHER
OTHER ANNUAL UNDERLYING COMPEN-
FISCAL COMPENSATION OPTIONS(1) SATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (SHARES) ($)
------------------------------- ------ ----------- ----------- --------------- ----------- -------------
E.Van Cullens 2003 433,187 - - 195,541 -
President and Chief 2002 344,898 200,000 217,182(2) 1,876,923 -
Executive Officer 2001 - - - - -
John C. Clark 2003 239,239 - 31,714(2) 114,572 -
Senior Vice President of 2002 234,519 2,500 - 122,632 -
Operations 2001 - - - - -
Nicholas C. Hindman, Sr. 2003 196,854 - - 100,498 -
Treasurer, Secretary, 2002 200,000 18,000 - 117,833 -
Senior Vice President and 2001 200,000 39,200 - - -
Chief Financial Officer
William J. Noll 2003 183,938 38,333 - 94,581 -
Senior Vice President of 2002 222,000 143,600 - 135,402 -
Research & Development and 2001 184,711 186,500 - 85,750 2,302(3)
Chief Technology Officer
Richard P. Riviere(5) 2003 120,000 - - - 69,200(4)
Vice President of 2002 208,000 127,772 - - -
Transaction Services Chief 2001 196,712 120,442 - - -
Executive Officer of
Conference Plus, Inc.
-------------------------------
(1) Stock options granted were non-qualified stock options of Class A Common
Stock and were issued under the 1995 Stock Incentive Plan of the Company
(the "Plan") except for all options issued to Mr. Cullens in fiscal year
2002 which were issued outside of the Plan.
(2) Represents reimbursed relocation expense and tax gross up.
(3) Represents matching contributions under the Company's 401(k) Profit Sharing
Plan for fiscal 2002. (4) Represents $56,000 paid in severance costs and
$13,200 paid for accrued vacation.
(5) Mr. Riviere resigned in October 2002.
-7-
The following tables set forth the number of stock options granted to
each of the Named Executive Officers during fiscal 2003, the stock option
exercises by each Named Executive Officer and exercisable and unexercisable
stock options held by the Named Executive Officers as of March 31, 2003. For
purposes of table computations the fair market value at March 31, 2003 was equal
to $4.05 per share.
OPTION GRANTS IN THE LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (2)
--------------------------------------------------------------------------- ------------------------
PERCENT OF
TOTAL
OPTIONS
NUMBER OF GRANTED TO EXERCISE
SECURITIES EMPLOYEES OR
UNDERLYING IN BASE
OPTIONS FISCAL PRICE EXPIRATION
NAME GRANTED(#) YEAR(1) ($/SH) DATE 5% 10%
------------- ----------- ------------ ---------- ------------ -------- -----------
E. Van
Cullens 95,541(3) 3.00% 1.570 04/01/12 94,334 239,060
100,000(5) 3.14% 1.305 12/24/12 82,071 207,893
Nicholas C.
Hindman 10,000(4) 0.31% 1.570 04/01/12 9,874 25,022
10,000(4) 0.31% 3.000 04/01/12 - 10,722
73,248(3) 2.30% 1.570 04/01/12 72,322 183,279
7,250(4) 0.23% 1.570 04/01/12 7,158 18,141
John C.
Clark 10,000(4) 0.31% 1.570 04/01/12 9,874 25,022
10,000(4) 0.31% 3.000 04/01/12 - 10,722
73,248(3) 2.30% 1.570 04/01/12 72,322 183,279
15,000(4) 0.47% 1.570 04/01/12 14,810 37,533
6,234(4) 0.20% 4.050 03/31/13 16,107 40,819
William J.
Noll 10,000(4) 0.31% 1.570 04/01/12 9,874 25,022
10,000(4) 0.31% 3.000 04/01/12 - 10,722
73,248(3) 2.30% 1.570 04/01/12 72,322 183,279
1,333(3) 0.04% 1.315 08/02/12 1,102 2,794
Richard P.
Riviere -- -- -- -- -- --
-------------
(1) Based on 3,182,681 total options granted to employees, including the Named
Executive Officers, in fiscal 2003.
(2) The potential realizable value is calculated based on the term of the
option at its time of grant (ten years). It is calculated by assuming the
stock price on the date of grant appreciates at the indicated annual rate
compounded annually for the entire term of the option and that the option
is exercised and sold on the last day of its term for the appreciated stock
price.
(3) These options are performance-based and vest in full at the earlier of
achievement of certain performance goals or eight years after the grant
date.
(4) These options vest over a five-year period with 20% vesting per year and
have a 10-year life subject to earlier termination upon the occurrence of
certain events related to termination of employment.
(5) 95,834 of the shares covered by this option vest monthly over a two year
period and 4,166 of the shares covered by this option vested on issuance.
-8-
FISCAL YEAR-END VALUES
----------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED ON REALIZED OPTIONS AT FISCAL YEAR END(#) FISCAL YEAR END ($)
NAME EXERCISE (#) ($)(1) (EXERCISABLE/UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE)
----------------------- -------------- --------------- ---------------------------- -------------------------------
E. Van Cullens - - 317,344/1,755,120 674,260/2,918,720
Nicholas C. Hindman - - 112,669/171,712 92,944/387,718
John C. Clark - - 51,763/185,441 101,488/406,126
William J. Noll - - 303,162/182,571 115,628/385,245
Richard P. Riviere - - 21,600/0 0/0
-----------------------
(1) Value is calculated by subtracting the exercise price per share from the
fair market value at the time of exercise and multiplying this amount by
the number of shares exercised pursuant to the stock option.
(2) Value is calculated by subtracting the exercise price per share from $4.05,
the closing price of the Company's Class A Common Stock on March 31, 2003,
and multiplying such amount by the number of shares subject to the option.
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Company has a severance agreement with Mr. Cullens, the Chief
Executive Officer of the Company. The severance agreement provides that in the
event that Mr. Cullens is terminated without Cause (as defined therein) or he
resigns for Good Reason (as defined therein), the Company shall pay to Mr.
Cullens severance payments equal to his salary and bonus for the fiscal year in
which the termination occurs, and the severance agreement also provides for the
payment of certain amounts upon the occurrence of certain events. Mr. Cullens
agreed not to compete with the Company and not to solicit any Company employees
for a period of one year after termination in the event that his termination
entitles him to severance payments. The Company's severance payment obligations
and Mr. Cullens' right to this additional bonus shall terminate upon Mr.
Cullens' death, resignation without Good Reason, retirement or termination for
Cause.
The Company also has entered into a deferred compensation program with
Mr. Cullens. The amount of deferred incentive compensation to be awarded to Mr.
Cullens in each year of his service as Chief Executive Officer of the Company is
to be based on the Company's consolidated net income before income taxes as set
forth in the Company's audited financial statements for March 31, 2004 and
subsequent fiscal years plus any gain on the sale of the Company's interest in
Conference Plus, Inc., if any. The amount of the award shall be determined as
follows:
CONSOLIDATED DEFERRED
COMPENSATION INCOME
BEFORE CUMULATIVE MAXIMUM CUMULATIVE MAXIMUM
INCOME TAXES RATE AWARD AWARD
----------------------------- ------ ------------- -------------------
Up to $2,500,000 5% $125,000 $ 125,000
Next $3,750,000 4% $150,000 $ 275,000
Next $6,250,000 3% $187,500 $ 462,500
Next $6,250,000 2% $125,000 $ 587,500
Next $6,250,000 1% $ 62,500 $ 650,000
All amounts awarded under the deferred compensation program shall vest on March
31, 2006 as long as Mr. Cullens is employed by the Company on that date. Any
amounts earned by Mr. Cullens in the fiscal years ending after March 31, 2006
will be fully vested at the time the amounts are determined as set forth above.
The amounts earned under the program will also be fully vested in the event of
Mr. Cullens' death or termination of employment by permanent and total
disability prior to March 31, 2006 or upon a change in control of the Company.
-9-
Unless otherwise elected, the deferred incentive compensation earned by Mr.
Cullens and vested thereunder will be paid to Mr. Cullens upon his retirement
from the Company or other termination of employment. Mr. Cullens shall also have
the right to withdraw all vested amounts earned under the program at any time,
provided that 5% of the amount withdrawn shall be forfeited to the Company. The
Company shall establish a rabbi trust and pay to the trust from time to time an
amount equal to any amount earned under the deferred incentive compensation
program. The balance in the deferred compensation account will be paid to Mr.
Cullens in a lump sum within 30 days after a change in control of the Company or
within 90 days after his death or termination of employment by permanent and
total disability.
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
the Company's executive compensation and employee stock option programs. It
periodically determines the compensation to be paid to the executive officers of
the Company and administers and determines the awards to be granted under the
Company's 1995 Stock Incentive Plan. The Compensation Committee has four
independent directors.
OVERVIEW AND PHILOSOPHY
The executive compensation program is intended to provide overall
levels of compensation for the executive officers which are competitive for the
industries and the geographic areas within which they operate, the individual's
experience, and contribution to the long-term success of the Company. A leading
consulting firm provides for the Compensation Committee's consideration
information regarding executive compensation of companies that operate in
similar industries. The Compensation Committee believes that its task of
determining fair and competitive compensation is ultimately judgmental.
The executive compensation program is composed of base salary, annual
incentive compensation, equity based incentives, and other benefits generally
available to all employees.
BASE SALARY
The base salary for each executive is intended primarily to be
competitive with companies in the industries and geographic areas in which the
Company competes. Surveys from outside firms and consultants are used to help
determine what is competitive. In making annual adjustments to base salary, the
Compensation Committee also considers the individual's performance over a period
of time as well as any other information which may be available as to the value
of the particular individual's past and prospective future services to the
Company. This information includes comments and performance evaluations by the
Company's Chief Executive Officer. The Committee considers all such data; it
does not prescribe the relative weight to be given to any particular component.
ANNUAL INCENTIVE COMPENSATION
Annual incentive compensation is ordinarily determined by a formula
which considers the financial goals and objectives of the Company.
LONG-TERM INCENTIVES
In general, the Compensation Committee believes that equity based
compensation should form a part of an executive's total compensation package.
Stock options may be granted to executives in order to directly relate a portion
of the executive's earnings to the stock price appreciation realized by the
Company's stockholders over the option period. Stock options also provide
executives with the opportunity to acquire an ownership interest in the Company.
The number of shares covered by each executive's option will be determined by
factors similar to those considered in establishing base salaries. In fiscal
2003, 505,192 stock options were granted to executive officers.
-10-
DEFERRED COMPENSATION
The Company's Chief Executive Officer has a deferred compensation
arrangement in the form of a Rabbi Trust Agreement.
OTHER
Other benefits are generally those available to all other employees in
the Company, or a subsidiary, as appropriate.
COMPENSATION FOR CHIEF EXECUTIVE OFFICER
The Compensation Committee applies the same standards in establishing
the compensation of the Company's Chief Executive Officer as are used for other
executives. However, there are procedural differences. The Chief Executive
Officer does not participate in setting the amount and nature of his
compensation.
Internal Revenue Code section 162(m), in general, precludes a public
corporation from claiming a tax deduction for compensation in excess of $1
million in any taxable year for any executive officer named in the summary
compensation table in such corporation's proxy statement. Certain
performance-based compensation is exempt from this tax deduction limitation. The
Compensation Committee's policy is to structure executive compensation in order
to maximize the amount of the Company's tax deduction. However, the Compensation
Committee reserves the right to deviate from that policy to the extent it is
deemed necessary to serve the best interests of the Company.
This report is submitted by the Compensation Committee of the Board of
Directors.
Respectfully Submitted By:
The Compensation Committee
Paul A. Dwyer (Chair)
Robert Penny III
John W. Seazholtz
Melvin J. Simon
-11-
AUDIT COMMITTEE REPORT
The responsibilities of the Audit Committee, which are set forth in the
Audit Committee Charter adopted by the Board of Directors, include providing
oversight to the Company's financial reporting process through periodic meetings
with the Company's independent auditors, and management to review accounting,
auditing, internal controls and financial reporting matters. The management of
the Company is responsible for the preparation and integrity of the financial
reporting information and related systems of internal controls. The Audit
Committee, in carrying out its role, relies on the Company's senior management,
including senior financial management, and its independent auditors.
We have reviewed and discussed with senior management the Company's
audited financial statements included in the 2003 Annual Report to Stockholders.
Management has confirmed to us that such financial statements (i) have been
prepared with integrity and objectivity and are the responsibility of management
and (ii) have been prepared in conformity with generally accepted accounting
principles.
We have discussed with Ernst & Young LLP, our independent auditors, the
matters required to be discussed by SAS 61 (Communications with Audit
Committee). SAS 61 requires our independent auditors to provide us with
additional information regarding the scope and results of their audit of the
Company's financial statements, including with respect to (i) their
responsibility under generally accepted auditing standards, (ii) significant
accounting policies, (iii) quality of accounting principles, (iv) management
judgments and estimates, (v) any significant audit adjustments, (vi) other
information in documents containing audited financial statements, (vii) any
disagreements with management, (viii) any consultations with other accounts,
(ix) any major issues discussed with management prior to retention, (x) any
difficulties encountered in performing the audit and (xi) any fees from
management advisory services.
We have received from Ernst & Young LLP a letter providing the
disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees) with respect to any
relationships between Ernst & Young LLP and the Company that in their
professional judgment may reasonably be thought to bear on independence. Ernst &
Young LLP has discussed its independence with us, and has confirmed in such
letter that, in its professional judgment, it is independent of the Company
within the meaning of the federal securities laws.
Based on the review and discussions described above with respect to the
Company's audited financial statements included in the Company's 2003 Annual
Report to Stockholders, we have recommended to the Board of Directors that such
financial statements be included in the Company's Annual Report on Form 10-K.
In giving our recommendation to the Board of Directors, we have relied
on (i) management's representation that such financial statements have been
prepared with integrity and objectivity and in conformity with generally
accepted accounting principals, and (ii) the report of the Company's independent
auditors with respect to such financial statements.
Respectfully Submitted By:
The Audit Committee
Paul A. Dwyer (Chair)
Melvin J. Simon
Bernard F. Sergesketter
-12-
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee is currently composed of Messrs. Dwyer
(Chair), Penny, Seazholtz and Simon, the Assistant Secretary and Assistant
Treasurer of the Company. No interlocking relationship exists between the
Company's Board of Directors or Compensation Committee and the board of
directors or compensation committee of any other company, nor has any such
interlocking relationship existed in the past.
Since 1984, Melvin J. Simon & Associates, Ltd. has provided accounting
and other financial services to the Company. Mr. Simon, a director and the
Assistant Secretary of the Company and Co-Trustee of the Voting Trust, is the
sole owner of Melvin J. Simon & Associates, Ltd. The Company paid Melvin J.
Simon & Associates, Ltd. approximately $18,236, $36,845 and $3,448 in fiscal
2001, 2002 and 2003, respectively, for its services. The Company believes that
these services are provided on terms no less favorable to the Company than could
be obtained from unaffiliated parties.
The Company has granted Robert C. Penny III and Melvin J. Simon, as
Trustees of the Voting Trust, certain registration rights with respect to the
shares of Common Stock held in the Voting Trust.
In June 2001, trusts for the benefit of Robert C. Penny III, a director
of the Company, and other Penny family members, entered into a guaranty of $10
million of the Company's obligations under its revolving credit facility. In
consideration of the guarantee, the Company has granted those trusts warrants to
purchase 512,820 shares of Class A Common Stock for a period of five years at an
exercise price of $1.95 per share (the fair market value on the date of grant)
and agreed to grant registration rights with respect to shares acquired upon
exercise. This guarantee is no longer in place.
The Company has certain severance agreements with Mr. Cullens, the
Chief Executive Officer of the Company. See "Employment and Severance
Agreements" above.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors and persons who own more than 10
percent of a registered class of the Company's equity securities to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. During fiscal 2003, all such persons filed on a timely basis all
reports required by Section 16(a) of the Securities Exchange Act of 1934 with
the exception of Mr. Clark, who filed a Form 3 on May 2003 when it was due on
September 29, 2001 and reported five option grants on a Form 4 on May 30, 2003
when the option grants should have been reported on Form 4s in May 2002 and
March 2003.
-13-
PERFORMANCE GRAPH
The following performance graph compares the change in the Company's
cumulative total stockholder return on its Class A Common Stock with the
cumulative total return of the Nasdaq Stock Market--U.S. Index and the Nasdaq
Telecommunications Index for the period commencing April 1, 1998 and ending
March 31, 2003. The stock price performance shown in the performance graph is
not indicative of future stock price performance.
[GRAPH OMITTED]
TOTAL RETURN - DATA SUMMARY
CUMULATIVE TOTAL RETURN
-------------------------------------------------------------
4/1/98 3/99 3/00 3/01 3/02 3/03
WESTELL TECHNOLOGIES, INC. $100.00 $ 34.56 $250.00 $ 26.47 $ 12.16 $ 31.69
NASDAQ STOCK MARKET (U.S.) 100.00 135.08 250.99 100.60 101.32 74.37
NASDAQ TELECOMMUNICATIONS 100.00 163.11 246.25 87.04 47.08 34.85
-14-
PROPOSAL NO. 2: APPROVAL OF AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
The Company Board of Directors has proposed amendments to its Amended
and Restated Certificate of Incorporation to permit stockholders holding 25% or
more of the voting power of Westell to call a special meeting of stockholders.
Under Westell's Amended and Restated Certificate of Incorporation, the
affirmative vote of holders of a majority of the voting power of Class A Common
Stock and Class B Common Stock, voting as a single class, is required to adopt
the above described amendment (the "Special Meeting Amendment"). Messrs. Penny
and Simon, the trustees of the Voting Trust and members of the Board, who
collectively control over 50% of the voting power of the Company, have indicated
that they will vote for this Proposal No. 2.
Under Article Ninth of the Amended and Restated Certificate of
Incorporation, special meetings of stockholders may be called by the Chairman of
the Board, the President, a majority of the Board of Directors then in office or
stockholders owning at least a majority of the voting power represented by all
of the issued and outstanding capital stock of the Company. The proposed Special
Meeting Amendment would allow stockholders with less than a majority of the
voting power of Westell to call special meetings. The proposed Special Meeting
Amendment would permit stockholders owning at least 25% of the voting power
represented by all of the issued and outstanding capital stock of the Company to
call a special meeting of stockholders (in addition to the Chairman of the
Board, the President and a majority of the Board of Directors). Westell believes
that this Special Meeting Amendment would provide stockholders with more of a
voice in the affairs of the Company.
If the Special Meeting Amendment is approved, paragraph B of Article
Ninth would be amended to read as follows:
Special Meetings of Stockholders. Special meetings of the
stockholders, for any purpose or purposes (except to the extent
otherwise provided by law or this Amended and Restated Certificate of
Incorporation), may only be called by the Chairman of the Board, the
President, a majority of the Board of Directors then in office or
stockholders owning at least 25% of the voting power represented by
all of the issued and outstanding capital stock of the corporation.
The Special Meeting Amendment is not intended to have any anti-takeover
effect and is not part of any series of anti-takeover measures contained in the
charter or the bylaws as in effect on the date hereof. The Amended and Restated
Certificate of Incorporation and Bylaws currently provide several mechanisms
whereby the Company's Board could resist a takeover attempt not considered to be
in the best interests of stockholders. The Board has the authority to issue up
to 1,000,000 shares of preferred stock and to determine the relative
preferences, limitations and relative rights of those shares with respect to
dividends, redemption, payments on liquidation, sinking fund provisions,
conversion privileges and voting rights without any further vote or action by
the stockholders. The rights of the holders of Class A Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
preferred stock that may be issued in the future. While the Company has no
present intention to issue shares of preferred stock, any such issuance could
have the effect of making it more difficult for a third party to acquire control
of the Company.
In addition, the Company is subject to the anti-takeover provisions of
Section 203 of the Delaware General Corporation Law, which could have the effect
of delaying or preventing a change of control of the Company. Furthermore,
certain provisions of the Amended and Restated Certificate of Incorporation and
the Bylaws of the Company may individually or collectively have the effect of
delaying or preventing changes in control of the Company or its management and
could have a depressive effect on the market price of the Class A Common Stock.
For example, the Amended and Restated Certificate of Incorporation and the
Bylaws require stockholders to follow an advance notification procedure for
certain stockholder nominations of candidates to the Board and for new business
to be conducted at stockholders meetings.
RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board of Directors
considers the Special Meeting Amendment to be in the best interests of the
Company and all of its stockholders and unanimously recommends that the
stockholders vote "FOR" this Proposal No. 2.
-15-
PROPOSAL NO. 3: APPROVAL OF AMENDMENT TO THE COMPANY'S BYLAWS
Our Board of Directors has proposed an amendment to its Bylaws to
eliminate certain provisions set forth in Article IX of the Company's Bylaws
that prevent the Company from selling securities having forward pricing
provisions without first obtaining majority stockholder approval.
Clauses (ii) and (iii) of Article Ninth of Westell's Bylaws currently
read that without first obtaining the approval of holders of a majority of the
voting power of the Company at a duly convened meeting of shareholders:
(ii) sell or issue any security of the Company convertible,
exercisable or exchangeable into shares of Common Stock,
having a conversion, exercise or exchange price per share
which is subject to downward adjustment based on the market
price of the Common Stock at the time of conversion, exercise
or exchange of such security into Common Stock (except for
appropriate adjustments made to give effect to any stock
splits or stock dividends); or
(iii) enter into (a) any equity line or similar agreement or
arrangement; or (b) any agreement to sell Common Stock (or any
security convertible, exercisable or exchangeable into shares
of Common Stock ("Common Stock Equivalent")) at a per share
price (or, with respect to a Common Stock Equivalent, at a
conversion, exercise or exchange price, as the case may be
("Equivalent Price")) that is fixed after the execution date
of the agreement, whether or not based on any predetermined
price-setting formula or calculation method. Notwithstanding
the foregoing, however, a price protection clause shall be
permitted in an agreement for sale of Common Stock or Common
Stock Equivalent, if such clause provides for an adjustment to
the price per share of Common Stock or, with respect to a
Common Stock Equivalent, to the Equivalent Price (provided
that such price or Equivalent Price is fixed on or before the
execution date of the agreement) (the "Fixed Price") in the
event that the Company, during the period beginning on the
date of the agreement and ending no later than 90 days after
the closing date of the transaction, sells shares of Common
Stock or Common Stock Equivalent to another investor at a
price or Equivalent Price, as the case may be, below the Fixed
Price.
The Bylaw Amendment would eliminate the above clauses (ii) and (iii) of Article
IX in their entirety. These provisions were adopted in connection with the State
of Wisconsin Investment Board's ("SWIB's) purchase of 1,657,459 shares of Class
A Common Stock in April 2001. The provisions prevent Westell from selling
convertible securities whose conversion price is not set at the time of the
issuance of the convertible securities or whose conversion price contains
downward adjustment pricing provisions without first obtaining majority
stockholder approval. If the conversion formula was not set at the time of
issuance of the securities, then the number of shares of Class A Common Stock
that could be ultimately be issued upon conversion would be indeterminable,
could fluctuate significantly and cause significant dilution.
Westell has no current intention of issuing securities with forward
pricing provisions. However, this provision could restrict the Company from
obtaining advantageous financing on a timely basis as new types of securities
become favored by investors. For example, a number of companies have recently
issued convertible preferred securities to investors attracted by a dividend
yield and willing to accept "collared" conversion provisions that enable a
company to benefit from a rise on the company's stock price by a reduction in
the number of common shares issuable upon conversion. Westell has issued
securities with forward pricing provision in the past. On April 16, 1999,
Westell issued $20,000,000 aggregate principal amount of convertible debentures
containing a forward-pricing provision when it had an immediate need for a cash
infusement to remain in business. The number of shares of Class A Common Stock
issuable upon conversion of the convertible debentures could have been, in
certain circumstances, inversely proportional to the market price of the Class A
Common Stock at the time of conversion. If the trading prices of the Class A
Common Stock fell, the convertible debentures could have been convertible, under
certain circumstances, into an increasing number of shares of Class A Common
Stock. None of the convertible debentures are currently outstanding. The Company
has no current intention to issue any securities with forward pricing
provisions, but believes that it should have the flexibility to do so in the
event that it requires funding on an timely basis on those terms. Because of the
SEC proxy disclosure rules and procedures, it can take over sixty days to obtain
stockholder approval of the issuance of securities with forward-pricing
provisions. This prolonged time period could prevent the Company from obtaining
favorable financing on a timely basis.
-16-
The Company believes that the provisions that are proposed to be
deleted pursuant to the Bylaw Amendment restrict the Company's flexibility in
obtaining financing and could in the future impair the Company's ability to
obtain the most advantageous financing in the future on a timely basis. The
Company's Board of Directors believes that adoption of the Bylaw Amendment is
advisable because it will provide the Company with greater flexibility in
connection with possible future financing transactions.
The affirmative vote of holders of a majority of the voting power of
Class A Common Stock and Class B Common Stock, voting as a single class, is
required to adopt the above described amendment (the "Bylaw Amendment"). Messrs.
Penny and Simon, the trustees of the Voting Trust and members of the Board, who
collectively control over 50% of the voting power of the Company, have indicated
that they will vote for this Proposal No. 3.
RECOMMENDATION OF THE BOARD OF DIRECTORS. The Board of Directors
considers the Bylaw Amendment to be in the best interests of the Company and all
of its stockholders and unanimously recommends that the stockholders vote "FOR"
Proposal No. 3.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent auditors for fiscal 2003 were Ernst & Young
LLP. Selection of independent auditors is made by the Board of Directors upon
consultation with the Audit Committee. The Board of Directors will vote upon the
selection of auditors for the current fiscal year at a future Board meeting.
Representatives of Ernst & Young LLP will be present at the Annual Meeting with
the opportunity to respond to appropriate questions and to make a statement if
they desire to do so.
AUDIT FEES
The aggregate fees billed by Westell's independent auditors rendered in
connection with (i) the audit of Westell's annual financial statements set forth
in the Westell Annual Report on Form 10-K for the year ended March 31 2003, and
(ii) the review of Westell's quarterly financial statements set forth in
Westell's Quarterly Report on Form 10-Q for the quarters ended June 30, 2002,
September 30, 2002, and December 31, 2002 were approximately $392,000.
AUDIT RELATED FEES
The aggregate fees for audit related services rendered by the
independent auditors for Westell's most recent fiscal year were approximately
$52,000. These fees include work performed by the independent auditors with
respect to accounting assistance.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no information technology services rendered by Ernst & Young
LLP during the year ended March 31, 2003.
ALL OTHER FEES
The aggregate fees for all other services rendered by its independent
auditors for Westell's most recent fiscal year were approximately $40,000. These
fees include work performed by the independent auditors with respect to tax
compliance and other tax consulting. The total of audit related fees and all
other fees were approximately $92,000.
-17-
CONSIDERATION OF NON-AUDIT SERVICES PROVIDED BY INDEPENDENT ACCOUNTANT
The audit committee has considered whether the services provided under
other non-audit services are compatible with maintaining the auditor's
independence and has determined that such services are compatible.
PROPOSALS OF SECURITY HOLDERS
A stockholder proposal to be included in the Company's proxy statement
and presented at the 2003 Annual Meeting must be received at the Company's
executive offices, 750 North Commons Drive Aurora, Illinois 60504 by no later
than April 23, 2004 for evaluation as to inclusion in the Proxy Statement in
connection with such meeting.
Stockholders wishing to nominate a director or bring a proposal before
the 2004 Annual Meeting (but not include the proposal in the Company's proxy
statement) must cause written notice of the proposal to be received by the
Secretary of the Company at the principal executive offices of the Company in
Aurora, Illinois, by no later than 60 days prior to the Annual Meeting date, as
well as comply with certain provisions of the Company's bylaws. In order for a
stockholder to nominate a candidate for director, such notice must describe
various matters regarding the nominee and the stockholder giving the notice,
including such information as name, address, occupation and shares held. In
order for a stockholder to bring other business before a stockholders meeting,
the notice for such meeting must include various matters regarding the
stockholder giving the notice and a description of the proposed business. These
requirements are separate from and in addition to the requirements a stockholder
must meet to have a proposal included in the Company's proxy statement.
FINANCIAL INFORMATION
The Company has furnished its financial statements to stockholders in
its 2003 Annual Report, which accompanies this Proxy Statement. In addition, the
Company will promptly provide, without charge to any stockholder, on the request
of such stockholder, an additional copy of the 2003 Annual Report and the
Company's most recent Form 10-K. Written requests for such copies should be
directed to Westell Technologies, Inc., Attention: Nicholas C. Hindman, Sr.,
Senior Vice President and Chief Financial Officer, 750 North Commons Drive,
Aurora, Illinois 60504; telephone number (630) 898-2500.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Directors of the Company knows of no other business that
may come before the Annual Meeting. However, if any other matters are properly
presented to the meeting, the persons named in the proxies will vote upon them
in accordance with their best judgment.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN THE PROXY
AND RETURN IT IN THE ENCLOSED STAMPED ENVELOPE.
By Order of the Board of Directors
Nicholas C. Hindman, Sr.
Senior Vice President and
Chief Financial Officer
Date: August 21, 2003
-18-
PROXY WESTELL TECHNOLOGIES, INC. PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF WESTELL
TECHNOLOGIES, INC. FOR THE ANNUAL MEETING OF STOCKHOLDERS, ON SEPTEMBER 25,
2003, 10:00 A.M., LOCAL TIME, AT THE WESTELL CORPORATE HEADQUARTERS, 750 NORTH
COMMONS DRIVE, AURORA, ILLINOIS 60504.
The undersigned hereby appoints John W. Seazholtz and Melvin J. Simon,
and each of them proxies with the powers the undersigned would possess if
personally present, and with full power of substitution, to vote all Class A
Common Stock and/or Class B Common Stock held of record by the undersigned in
Westell Technologies, Inc., upon all subjects that may properly come before the
special meeting, and at any adjournments thereof, including the matters
described in the proxy statements furnished herewith, subject to any directions
indicated on the reverse side of this card.
THE UNDERSIGNED HEREBY REVOKES ANY PROXY HERETOFORE GIVEN AND
ACKNOWLEDGES RECEIPT OF THE PROXY STATEMENT FOR THE ANNUAL MEETING.
This proxy when properly executed will be voted in the manner directed
by the undersigned direction is made, this proxy will be voted for all of the
proposals.
(THIS PROXY IS CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
(Comments/Change of Address)
----------------------------
----------------------------
----------------------------
----------------------------
(If you have written in the
above space, please mark the
corresponding box on the
reverse side)
(THIS PROXY IS CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE.)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- FOLD AND DETACH HERE -
THE FOLLOWING MATTERS ARE PROPOSED BY THE BOARD OF DIRECTORS
1. ELECTION OF DIRECTORS: For Withhold List nominee
Director Nominees: [] [] exceptions:
John W. Seazholtz, Paul A. Dwyer, Jr., E.
Van Cullens, Robert C. Penny III, Roger
L. Plummer, Bernard F. Sergesketter, For All
Melvin J. Simon All Except
[]
- - - - - - - - - - - - - - - - - - - - -
INSTRUCTION: To withhold authority to vote
for any individual nominee, write that
nominee's name in the space provided
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 deemed to
constitute direction to
vote "for" the above
proposal.
Please mark, sign, date and
return the proxy card using
the enclosed envelope.
2. APPROVAL OF AN
AMENDMENT TO THE For Against Abstain
AMENDED AND RESTATED
CERTIFICATE OF [] [] []
INCORPORATION OF WESTELL
TECHNOLOGIES, INC. TO PERMIT
STOCKHOLDERS HOLDING 25%
OR MORE OF THE VOTING POWER
OF WESTELL TO CALL A
SPECIAL MEETING OF
STOCKHOLDERS.
2. APPROVAL OF AN
AMENDMENT TO THE For Against Abstain
AMENDED AND RESTATED
BYLAWS OF WESTELL [] [] []
TECHNOLOGIES, INC.
TO ELIMINATE CLAUSES
(ii) and (iii) OF
ARTICLE IX OF THE BYLAWS
WHICH PREVENT WESTELL
TECHNOLOGIES, INC. FROM
SELLING SECURITIES HAVING
FORWARD PRICING PROVISIONS
WITHOUT FIRST OBTAINING
MAJORITY STOCKHOLDER APPROVAL.
Comments/Change of Address Date ________________________, 2003
Signature(s) _________________________
Signature(s) _________________________
(NOTE: Please sign exactly as name appears on this Proxy. When shares are held
jointly, both should sign. When signing as attorney, executor, administrator,
trustee, guardian, corporate officer or partner, give full title as such. If a
corporation, please sign in corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.)