def14a
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box: |
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o Preliminary Proxy Statement. |
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Confidential, For Use of the Commission |
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Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement. |
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Definitive Additional Materials. |
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Soliciting Material Under Rule 14a-12. |
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SunCom Wireless Holdings, Inc.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Payment of Filing Fee (Check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the date of its filing. |
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To our Stockholders:
You are cordially invited to attend the Annual Meeting of
Stockholders of SunCom Wireless Holdings, Inc. to be held at our
Corporate Headquarters, 1100 Cassatt Road, Berwyn, Pennsylvania
19312, on Wednesday, May 3, 2006, at 8:30 a.m., local
time.
The accompanying Notice of Annual Meeting of Stockholders and
Proxy Statement explain the matters to be voted on at the
meeting.
Please read the enclosed Notice of Annual Meeting and Proxy
Statement so that you will be informed about the business to
come before the meeting. Your vote is important, regardless of
the number of shares you own. On behalf of the Board of
Directors, I urge you to mark, sign and return the enclosed
proxy card, even if you plan to attend the Annual Meeting.
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Sincerely, |
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Michael E. Kalogris |
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Chairman and Chief Executive Officer |
Berwyn, Pennsylvania
April 3, 2006
TABLE OF CONTENTS
SUNCOM WIRELESS HOLDINGS, INC.
1100 Cassatt Road
Berwyn, Pennsylvania 19312
(610) 651-5900
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 3, 2006
To the Stockholders of SunCom Wireless Holdings, Inc.:
The Annual Meeting of the holders of Class A common stock
of SunCom Wireless Holdings, Inc. will be held at our Corporate
Headquarters, 1100 Cassatt Road, Berwyn, Pennsylvania 19312, on
Wednesday, May 3, 2006, at 8:30 a.m., local time, for
the following purposes:
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1. |
To elect three Class I directors; |
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2. |
To amend the SunCom Wireless Holdings, Inc. Amended and Restated
Stock and Incentive Plan to expand the class of eligible
participants to include non-employee independent contractors,
consultants and advisors; and |
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3. |
To ratify the appointment of PricewaterhouseCoopers LLP as our
independent registered public accounting firm. |
The Board of Directors has fixed March 8, 2006 as the
record date for the Annual Meeting with respect to this
solicitation. Only holders of record of Class A common
stock at the close of business on that date are entitled to
notice of and to vote at the Annual Meeting or any adjournments
thereof as set forth in the Proxy Statement.
This Proxy Statement, the proxy card and our Annual Report to
Stockholders are being mailed to stockholders on or about
April 3, 2006.
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By Order of the Board of Directors, |
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Charles H.N. Kallenbach |
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Corporate Secretary |
Berwyn, Pennsylvania
April 3, 2006
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING IN PERSON, PLEASE SIGN, DATE AND RETURN THE ENCLOSED
PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE AS PROMPTLY AS
POSSIBLE. AS SPECIFIED IN THE ENCLOSED PROXY STATEMENT, A
STOCKHOLDER MAY REVOKE A PROXY AT ANY TIME PRIOR TO
ITS USE.
SUNCOM WIRELESS HOLDINGS, INC.
1100 Cassatt Road
Berwyn, Pennsylvania 19312
(610) 651-5900
PROXY STATEMENT
2006 Annual Meeting of Stockholders
Solicitation of Proxies
The Board of Directors of SunCom Wireless Holdings, Inc. is
furnishing this Proxy Statement to solicit proxies for use at
our 2006 Annual Meeting of Stockholders to be held on Wednesday,
May 3, 2006, at 8:30 a.m., local time, at
SunComs Corporate Headquarters, 1100 Cassatt Road, Berwyn,
Pennsylvania 19312, and at any adjournment of the meeting. Each
valid proxy received in time will be voted at the meeting
according to the choices specified, if any. A proxy may be
revoked at any time before the proxy is voted as outlined below.
This Proxy Statement and the enclosed proxy card are being first
sent for delivery to stockholders of SunCom on or about
April 3, 2006.
The shares of Class A common stock represented by valid
proxies we receive in time for the Annual Meeting will be voted
as specified in such proxies. Valid proxies include all properly
executed written proxy cards not later revoked. Voting your
proxy by mail will not limit your right to vote at the Annual
Meeting if you later decide to attend in person. Executed but
unvoted proxies will be voted:
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(1) |
FOR the election of the nominees for Class I directors; |
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(2) |
FOR the amendment of the SunCom Wireless Holdings, Inc. Amended
and Restated Stock and Incentive Plan (the Stock and
Incentive Plan) to expand the class of eligible
participants to include non-employee independent contractors,
consultants and advisors (collectively, independent
contractors); and |
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(3) |
FOR the ratification of the appointment of
PricewaterhouseCoopers LLP as our independent registered public
accounting firm. |
If any other matters properly come before the Annual Meeting,
the persons named on the enclosed proxy card will, unless the
stockholder otherwise specifies in the proxy, vote upon such
matters in accordance with their best judgment.
Voting Securities
We have one outstanding class of voting securities, our
Class A common stock, par value $0.01 per share. As of
March 8, 2006, there were 62,690,171 shares of
Class A common stock outstanding. Only holders of record of
shares of Class A common stock at the close of business on
March 8, 2006, which the Board of Directors has fixed as
the record date, are entitled to vote at the Annual Meeting.
Each share of Class A common stock is entitled to one vote.
The presence in person or by proxy of holders of record of a
majority of the shares entitled to vote generally will
constitute a quorum for the transaction of business at the
Annual Meeting. The Class I directors are elected by a
plurality vote of all votes cast at the Annual Meeting. The
affirmative vote of a majority of the votes entitled to be cast
by the issued and outstanding Class A common stock present
at the Annual Meeting in person or by proxy, and entitled to
vote, is required for the ratification of the appointment of
independent auditors. For the approval of the amendment of the
Stock and Incentive Plan, the affirmative vote of a majority of
the votes present in person or by proxy is required, provided
that the total vote cast on the proposal represents over 50% of
all shares entitled to vote on the proposal.
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Stockholders may:
(i) cast their votes in favor of the election of the
Class I directors, the amendment of the Stock and Incentive
Plan or the ratification of the appointment of the independent
registered public accounting firm;
(ii) withhold authority to vote for one or more director
nominees; or
(iii) vote against the amendment of the Stock and Incentive
Plan or the ratification of the appointment of our independent
registered public accounting firm.
Stockholders withholding authority or voting against any or all
proposals will be deemed present at the Annual Meeting for the
purpose of determining whether a quorum has been constituted and
will count in the calculation of the number of votes entitled to
be cast by the issued and outstanding Class A common stock
present at the Annual Meeting and entitled to vote. A
broker non-vote occurs when a nominee of a
beneficial owner with the power to vote on at least one matter
does not vote on another matter because the nominee does not
have the discretionary voting power and has not received
instructions from the beneficial owner with respect to such
matter. Broker non-votes are deemed present for the purpose of
determining whether a quorum has been constituted, have the
effect of votes to withhold authority in connection with the
election of directors, and have the effect of a vote against the
ratification of the appointment of the independent registered
public accounting firm. Also, the New York Stock Exchange
precludes its member organizations from giving a proxy to vote
on equity compensation plans unless the beneficial owner of the
shares has given voting instructions. Accordingly, with respect
to approval of the amendment of the Stock and Incentive Plan,
brokers who are New York Stock Exchange members do not have
discretionary authority to vote shares for beneficial owners who
do not provide instructions. In addition, under the
New York Stock Exchange rules, approval of the amendment of
the Stock and Incentive Plan requires approval by a majority of
votes cast on each proposal, provided that the total vote cast
on each proposal represent over 50% in interest of all
securities entitled to vote on such proposal. The New York Stock
Exchange takes the position that a broker-non-vote is not a
vote cast with respect to approval of the amendment
of the Stock and Incentive Plan. Accordingly, broker-non-votes
have to be subtracted when determining whether the 50% in
interest test has been met with respect to such proposal.
Voting by Proxy
To vote by proxy, you must complete, sign and date the
accompanying proxy card. If a stockholder is a corporation or a
partnership, a duly authorized person must sign the accompanying
proxy card in the full corporate or partnership name. If the
proxy card is signed pursuant to a power of attorney or by an
executor, administrator, trustee or guardian, the signers
full title must be given and a certificate or other evidence of
appointment must be furnished. If shares are owned jointly, each
joint owner must sign the proxy card.
Any proxy duly given pursuant to this solicitation may be
revoked by the stockholder at any time prior to the voting of
the proxy (i) by written notice to the Corporate Secretary
at our Corporate Headquarters, 1100 Cassatt Road, Berwyn,
Pennsylvania 19312, (ii) by a later-dated proxy signed and
returned by mail before the Annual Meeting, or (iii) by
attending the Annual Meeting and voting in person. Attendance at
the Annual Meeting will not in and of itself constitute a
revocation of a proxy.
If the shares you own are held in street name by a
bank or brokerage firm, your bank or brokerage firm, as the
record holder of your shares, is required to vote your shares
according to your instructions. In order to vote your shares,
you will need to follow the directions your bank or brokerage
firm provides you. Many banks and brokerage firms offer the
option of voting over the Internet or by telephone, instructions
for which would be provided by your bank or brokerage firm on
your vote instruction form. Under the rules of the New York
Stock Exchange, if you do not give instructions to your bank or
brokerage firm, it will still be able to vote your shares with
respect to certain discretionary items, but it will
not be allowed to vote your shares with respect to certain
non-discretionary items. In the case of
non-discretionary items, for which no instructions are received,
such shares will be treated as broker non-votes and will have
the effect discussed above under Voting Securities.
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ELECTION OF CLASS I DIRECTORS
(Proposal No. 1)
The Board of Directors presently consists of seven members. Our
Second Restated Certificate of Incorporation provides that the
Board of Directors will be divided into three classes, as nearly
equal in number as possible. As a result of the recent
resignation of David N. Watson from the Board of Directors, the
Nominating/ Corporate Governance Committee has been actively
seeking a new director to replace Mr. Watson as a
Class II director. However, as of the date of this Proxy
Statement, the Nominating/ Corporate Governance Committee has
not found a suitable candidate to fill this vacancy. In the
event the Nominating/ Corporate Governance Committee does not
locate a suitable candidate, SunCom expects that the Board of
Directors would be reconstituted so that one of the
Class III directors would become a Class II director.
Each director serves a three-year term, and one class is elected
at each years annual meeting of stockholders. The term of
the Class I directors will expire at the 2009 Annual
Meeting, the term of the Class II directors will expire at
the 2007 Annual Meeting, and the term of the Class III
directors will expire at the 2008 Annual Meeting, with the
members of each class to hold office until their successors are
elected and qualified. At each annual meeting of stockholders,
the successors to the class of directors whose term expires at
that annual meeting will be elected to hold office for a term
expiring at the annual meeting of stockholders held in the third
year following the year of their election and until their
successors are elected and qualified.
Because the term of the Class I directors expires this
year, stockholders will vote upon the election of three
Class I directors at the Annual Meeting. The Nominating
Committee of the Board of Directors has nominated Scott I.
Anderson, Arnold L. Chavkin and Arnold Sheiffer to serve as
Class I directors.
Unless otherwise directed in the proxy, the persons named in the
enclosed proxy, or the persons substitute, will vote the
proxy for the election of the nominees identified below as
Class I directors for a three-year term and until their
respective successors are elected and qualified. The Board of
Directors knows of no reason why any nominee for director would
be unable to serve as director. If, at the time of the Annual
Meeting, any of the nominees is unable or unwilling to serve as
a director of SunCom, the persons named in the proxy intend to
vote for such substitutes as may be nominated by the Nominating/
Corporate Governance Committee.
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Age | |
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Position |
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Present Class I Directors and Nominees for Election to
Serve Until the 2009 Annual Meeting |
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Scott I. Anderson
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47 |
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Director |
Arnold L. Chavkin
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54 |
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Director |
Arnold Sheiffer
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74 |
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Director |
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Present Class II Director Elected to Serve Until the 2007
Annual Meeting |
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Mathias J. DeVito
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75 |
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Director |
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Present Class III Directors Elected to Serve Until the 2008
Annual Meeting |
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Michael E. Kalogris
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56 |
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Chairman of the Board of Directors and Chief Executive Officer |
Rohit M. Desai
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67 |
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Director |
Eric Haskell
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59 |
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Director and Interim Chief Financial Officer |
Michael E. Kalogris has served as Chairman of the Board
of Directors and as Chief Executive Officer of SunCom since its
inception. Mr. Kalogris was previously the Chairman of
Triton Cellular Partners, L.P., which specialized in acquiring
and operating rural cellular properties. The assets of Triton
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Cellular Partners, L.P. were sold in 2000 for approximately
$1.24 billion. Prior to Triton Cellular Partners, L.P.,
Mr. Kalogris was President and Chief Executive Officer of
Horizon Cellular Group, which he joined on October 1, 1991.
Under Mr. Kalogris leadership, Horizon Cellular Group
became the fifth-largest independent cellular company in the
United States, specializing in suburban markets and small cities
encompassing approximately 3.2 million potential customers
and was sold for approximately $575.0 million. Prior to
joining Horizon Cellular Group, Mr. Kalogris served as
President and Chief Executive Officer of Metrophone, a cellular
carrier in Philadelphia, the nations fifth-largest market.
Mr. Kalogris is a member of the board of directors of the
Cellular Telecommunications Industry Association and serves on
its Executive Committee. He is also a member of the advisory
board of Waller Capital Media Partners and the board of
directors of Paoli Hospital.
Rohit M. Desai has served as a Director of SunCom since
May 2002. Mr. Desai has been Chairman of the Board and President
of Desai Capital Management Incorporated, a registered
investment advisor, since 1984. He also serves as a director of
Finlay Enterprises, Inc., Sitel Corporation and Independence
Community Bank.
Scott I. Anderson has served as a Director of SunCom
since February 1998. He is currently a member of the board of
directors of Wireless Facilities, Inc., an observer to the board
of directors of Telephia, Inc. and a principal of Cedar Grove
Partners, LLC and Cedar Grove Investments. He was a director of
TeleCorp PCS until its merger into AT&T Wireless Services,
Inc. in February 2002, and an observer to the Board of
Callvision, Inc. until its merger with Verisign, Inc. in January
2006. Mr. Anderson was previously Senior Vice President for
Acquisitions and Development at AT&T Wireless Services,
Inc., formerly McCaw Cellular Communications, Inc., which he
joined in 1986, and a director of Horizon Cellular Group.
Arnold L. Chavkin has served as a Director of SunCom
since February 1998. Mr. Chavkin was previously a member of
the advisory board of Triton Cellular Partners, L.P. and is
currently a director of Brand Services, Inc., Crown Media
Holdings, Inc., Encore Acquisition Company, Latigo Petroleum,
Inc., Jetro JMDH Holdings, Inc., Noble Environmental Power, LLC
and Vexco International Limited. Mr. Chavkin is the Chief
Investment Officer in the New York office of J.P. Morgan
Partners, LLC (formerly Chase Capital Partners). He participates
in the general management of the firm, as well as having
specific responsibility for overseeing the International and
Industrial Growth activities and certain other investment focus
areas for J.P. Morgan Partners, LLC. Prior to joining Chase
Capital Partners, he was a member of Chemical Banks
merchant banking group and a generalist in its corporate finance
group specializing in mergers and acquisitions and private
placements for the energy industry.
Mathias J. DeVito has served as a Director of SunCom
since August 2003. Mr. DeVito was Chairman Emeritus of The
Rouse Company until its acquisition by General Growth Property
in November 2004. The Rouse Company owned and operated office
and industrial buildings and large scale community developments
across the United States. Mr. DeVito joined The Rouse
Company as Senior Vice President and General Counsel in 1970, in
that same year, he became Executive Vice President and Chief
Operations Officer. In 1973, he was elected President, and in
1979, he was elected Chief Executive Officer of The Rouse
Company. In 1984, he assumed the additional post of Chairman of
the Board. In 1995, Mr. DeVito retired as the Chief
Executive Officer, and in 1997, he stepped down as the Chairman
of the Board of The Rouse Company. Prior to joining the Rouse
Company, Mr. DeVito was the Assistant Attorney General of
Maryland from 1963 through 1964 and a partner in the law firm of
Piper & Marbury, now known as DLA Piper Rudnick Gray
Cary, from 1965 through 1970. Mr. DeVito also serves as a
director of Mars Super Markets and Sitel Corporation, and is
Chairman of the Advisory Boards of certain investment funds
affiliated with Desai Capital Management. He is also a member of
the Board of Trustees of the Maryland Institute, College of Art
and of the Adirondack Museum.
Eric Haskell has served as a Director of SunCom since
November 2003 and as Interim Chief Financial Officer since
December 2005. In 2004, Mr. Haskell retired as Executive
Vice President and Chief Financial Officer of Systems &
Computer Technology Corporation (SCT) where he served since
1989. SCT, now a wholly owned subsidiary of Sungard Data
Systems, is a global provider of technology
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solutions for colleges and universities. Prior to joining SCT in
1989 as Vice President and Chief Financial Officer, he was Chief
Financial Officer for Williams Holdings, Inc., which he joined
in 1986 and Transamerica Delaval which he joined in 1976.
Mr. Haskell previously was a manager with Ernst &
Ernst, now known as Ernst & Young. He also serves as a
director of Metropolitan Health Networks, Inc., eMoneyadvisor
and the Philadelphia Ronald McDonald House.
Arnold Sheiffer has served as a Director of SunCom since
May 2004. Mr. Sheiffer was the Chairman of Petry Media
Corporation from 2001 through 2004. Prior to joining Petry Media
Corporation, Mr. Sheiffer served as a Managing Director of
Sandler Capital Management in 2000, Chairman and Chief Executive
Officer of SmartRoute Systems, Inc. from 1999 through 2000 and
Chief Financial Officer and Chief Operating Officer of Katz
Media from 1990 through 1994. He also serves as a director of
GoldenTree Asset Management, James Cable and Interep National
Radio Sales.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
ELECTION OF EACH OF THE NOMINEES.
Security Ownership of Management and Certain Beneficial
Owners
The following table sets forth, as of March 8, 2006, the
number of shares of Class A common stock beneficially owned
by (i) each current director, (ii) each director
nominee, (iii) each executive officer named in the Summary
Compensation Table on page 16 of this proxy statement,
(iv) all current directors and executive officers as a
group, and (iv) each of SunComs stockholders who,
based on SunComs records, was known to SunCom to be the
beneficial owner, as defined in
Rule 13d-3 under
the Securities Exchange Act of 1934, of more than 5% of the
Class A common stock.
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Number of | |
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Percentage of | |
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Voting Shares | |
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Voting Shares | |
Name and Address of Beneficial Owner(1) |
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Beneficially Owned | |
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Beneficially Owned | |
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Michael E. Kalogris
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3,459,339 |
(6) |
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5.5 |
% |
William A. Robinson
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503,564 |
(7) |
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* |
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Daniel E. Hopkins
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228,985 |
(8) |
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* |
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Laura Shaw-Porter
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178,377 |
(9) |
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* |
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Charles H.N. Kallenbach
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121,789 |
(10) |
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* |
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Emilio Echave
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120,000 |
(11) |
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* |
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Raul Burgos
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120,000 |
(12) |
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* |
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David D. Clark
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576,249 |
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* |
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Scott I. Anderson
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100,143 |
(13) |
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* |
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Arnold L. Chavkin(2)
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39,500 |
(14) |
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* |
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Rohit M. Desai(3)
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98,750 |
(15) |
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* |
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Mathias J. DeVito
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62,000 |
(16) |
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Eric Haskell
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60,000 |
(17) |
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* |
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Arnold Sheiffer
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70,000 |
(18) |
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* |
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J.P. Morgan Partners (23A SBIC), L.P.(2)
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9,058,407 |
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14.4 |
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Desai Capital Management Incorporated(3)
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9,177,409 |
(19) |
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14.6 |
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Goldman Sachs Group, Inc.(4)
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5,911,676 |
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9.4 |
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Dimensional Fund Advisors Inc.(5)
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4,207,500 |
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6.7 |
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All directors and executive officers as a group (13 persons)
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5,162,447 |
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8.2 |
% |
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* |
Represents less than 1%. |
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(1) |
Unless otherwise indicated, the address of each person listed in
this table is c/o SunCom Wireless Management Company, 1100
Cassatt Road, Berwyn, Pennsylvania 19312. |
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(2) |
Mr. Chavkin is an Executive Vice President of the managing
member of J.P. Morgan Partners (23A SBIC), L.P. and
the Chief Investment Officer in the New York office of
J.P. Morgan Partners, LLC. Mr. Chavkin disclaims
beneficial ownership of any shares held by J.P. Morgan
Partners (23A SBIC), L.P., except to the extent of his
pecuniary interest therein. The address of J.P. Morgan
Partners (23A SBIC), L.P. is c/o J.P. Morgan Partners,
LLC, 1221 Avenue of the Americas, 39th Floor, New York, New
York 10020. In addition to the shares of Class A common
stock listed in the table, J.P. Morgan SBIC LLC and Sixty
Wall Street SBIC Fund, L.P. hold 7,549,104 shares and
376,995 shares, respectively, of Class B non-voting
common stock, which constitutes all of the outstanding shares of
Class B non-voting common stock. The Class B
non-voting common stock is convertible on a one-for-one basis
into shares of Class A common stock, provided that
J.P. Morgan SBIC LLC and Sixty Wall Street SBIC Fund, L.P.
can only convert their shares at a time when they are not an
affiliate of SunCom or upon sale to a person that is not an
affiliate of SunCom. If J.P. Morgan SBIC LLC and Sixty Wall
Street SBIC Fund, L.P. converted all of their shares of
Class B non-voting common stock into Class A common
stock, such shares would represent 11.2% of the outstanding
shares of Class A common stock. J.P. Morgan Partners
(23A SBIC) L.P., J.P. Morgan SBIC LLC and Sixty Wall Street
SBIC Fund, L.P. are subsidiaries of J.P. Morgan
Chase & Co. |
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(3) |
Mr. Desai is Chairman of the Board and President of Desai
Capital Management Incorporated. Mr. Desai disclaims
beneficial ownership of any shares held by such entity. The
address of Desai Capital Management Incorporated is 410 Park
Avenue, New York, New York 10022. |
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(4) |
The information contained in the table and these footnotes with
respect to Goldman Sachs Group, Inc. is based solely on a filing
on Schedule 13G filed with the Securities and Exchange
Commission on February 2, 2006 reporting beneficial
ownership as of December 31, 2005. The business address of
the reporting party is 85 Broad Street New York, New York 10004. |
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(5) |
The information contained in the table and these footnotes with
respect to Dimensional Fund Advisors Inc. is based solely
on a filing on Schedule 13G reporting beneficial ownership filed
with the Securities and Exchange Commission on February 6,
2006. The business address of the reporting entity is 1299 Ocean
Avenue, 11th Floor, Santa Monica, CA 90401. |
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(6) |
Includes 63,177 shares of Class A common held under an
amended and restated common stock trust agreement for management
employees and independent directors, of which Mr. Kalogris
is trustee. Of the remaining 3,396,162 shares of
Class A common stock reported in the table,
682,500 shares are subject to forfeiture in accordance with
Mr. Kalogris employment agreement. |
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(7) |
Of the 503,564 shares of Class A common stock reported
in the table, 370,001 shares are subject to forfeiture
according to the terms of Mr. Robinsons employment
agreement. |
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(8) |
Of the 228,985 shares of Class A common stock reported
in the table, 90,000 shares are subject to forfeiture
according to the terms of Mr. Hopkins employment
agreement. |
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(9) |
Of the 178,377 shares of Class A common stock reported
in the table, 120,000 shares are subject to forfeiture
according to the terms of award agreements between SunCom and
Ms. Shaw-Porter. |
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(10) |
Of the 121,789 shares of Class A common stock reported
in the table, 120,000 shares are subject to forfeiture
according to the terms of award agreements between SunCom and
Mr. Kallenbach. |
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(11) |
Of the 120,000 shares of Class A common stock reported
in the table, 120,000 shares are subject to forfeiture
according to the terms of award agreements between SunCom and
Mr. Echave. |
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(12) |
Of the 120,000 shares of Class A common stock reported
in the table, 120,000 shares are subject to forfeiture
according to the terms of award agreements between SunCom and
Mr. Burgos. |
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(13) |
Of the 100,143 shares of Class A common stock reported
in the table, 37,000 shares are subject to forfeiture
according to the terms of award agreements between SunCom and
Mr. Anderson. |
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(14) |
Of the 39,500 shares of Class A common stock reported
in the table, 39,500 shares are subject to forfeiture
according to the terms of award agreements between SunCom and
Mr. Chavkin. |
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(15) |
Of the 98,750 shares of Class A common stock reported
in the table, 39,500 shares are subject to forfeiture
according to the terms of award agreements between SunCom and
Mr. Desai. |
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(16) |
Of the 62,000 shares of Class A common stock reported
in the table, 30,000 shares are subject to forfeiture
according to the terms of an award agreement dated between
SunCom and Mr. DeVito. |
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(17) |
Of the 60,000 shares of Class A common stock reported
in the table, 30,000 shares are subject to forfeiture
according to the terms of an award agreement between SunCom and
Mr. Haskell. |
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(18) |
Of the 70,000 shares of Class A common stock reported
in the table, 30,000 shares are subject to forfeiture
according to the terms of an award agreement between SunCom and
Mr. Sheiffer. |
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(19) |
Consists of 4,936,832 shares of Class A common stock
held by Private Equity Investors III, L.P. and
4,240,577 shares of Class A common stock held by
Equity-Linked Investors-II, each an affiliate of Desai Capital
Management Incorporated. The address for Private Equity
Investors III, L.P. and Equity-Linked Investors-II is
c/o Desai Capital Management Incorporated, 410 Park Avenue,
New York, New York 10022. |
Board of Directors
The Board of Directors met ten times in 2005. All of the members
of the Board of Directors attended at least 75% of the aggregate
of the total number of meetings of the Board of Directors and
the total number of meetings held by all committees of the Board
of Directors on which they served.
The Board of Directors has affirmatively determined that each of
Messrs. Anderson, Chavkin, Desai, DeVito and Sheiffer have no
relationship with SunCom that would interfere with the exercise
of such directors independence from SunCom and its
management and meets all other criteria of independence under
the listing standards of the New York Stock Exchange. In
accordance with the listing standards of the New York Stock
Exchange, the Board examined relevant facts and circumstances of
transactions and relationships between SunCom or its management
and directors or their affiliates and among directors and their
affiliates, including the fact that Mr. Anderson is a
director of certain companies that transact business with SunCom
and those relationships reported under Certain
Relationships and Related Transactions. The Board also
considered shares beneficially owned by each of the directors,
as set forth under Security Ownership of Management and
Certain Beneficial Owners, although the Board generally
believes that stock ownership tends to further align a
directors interests with those of SunComs other
stockholders. The purpose of this review was to determine
whether any such transactions or relationships were inconsistent
with a determination that the director is independent.
Each director is expected to dedicate sufficient time, energy
and attention to ensure the diligent performance of his duties,
including by attending the annual meeting of stockholders, the
Board of Directors and the Committees of the Board of Directors
of which he is a member. All seven current members of the Board
of Directors attended the 2005 Annual Meeting.
SunComs independent directors regularly meet in executive
session as required by the rules of the New York Stock Exchange.
The presiding director at these executive session
meetings rotates among the independent directors in alphabetical
order.
Stockholder Communications
Any stockholder may communicate with the Board of Directors and
its committees. The Board of Directors has established the
following system to receive, track and respond to communications
from stockholders addressed to SunComs Board of Directors,
its committees and its members.
Any stockholder may address his or her communication to the
Board of Directors, the independent directors, a committee of
the Board or an individual Board member by sending a
communication addressed to the recipient group or individual,
care of SunCom Wireless Holdings, Inc. Corporate Secretary, 1100
Cassatt Road, Berwyn, Pennsylvania 19312. Depending on the
subject matter of the communication, it may be forwarded to the
director(s) to whom it is addressed, handled directly by
management, or not forwarded if it is primarily commercial in
nature, if it relates to an improper or
7
irrelevant topics or if it requires investigation to verify its
content. Communications regarding accounting, internal controls
over financial reporting or auditing matters will be delivered
to and reviewed by the Audit Committee.
In addition, stockholders who prefer to send communications to
the Board of Directors and its committees via
e-mail can send the
communication to bod@suncom.com. In addition to the Corporate
Secretary, each board member has access to this
e-mail address to
review communications sent by stockholders of SunCom.
Code of Conduct
SunCom has a Professional and Business Code of Conduct, which
covers all directors, officers and employees. A copy of this
code of conduct is available on SunComs website, at
www.suncomwireless.net, or a printed copy can be obtained by
writing to SunCom Wireless Holdings, Inc., Corporate Secretary,
1100 Cassatt Road, Berwyn, Pennsylvania 19312.
SunCom has also adopted a Code of Ethics for Senior Financial
Officers, which applies to our chief executive officer, our
chief financial officer and our principal accounting officer and
controller. A copy of this code of ethics is available on
SunComs website, at www.suncomwireless.net, or a printed
copy can be obtained by writing to SunCom Wireless Holdings,
Inc., Corporate Secretary, 1100 Cassatt Road, Berwyn,
Pennsylvania 19312. Any amendments to this code of ethics, as
well as any waivers that are required to be disclosed under the
rules of the Securities and Exchange Commission or the New York
Stock Exchange, will be posted on SunComs website.
Corporate Governance Guidelines
The Board of Directors has adopted Corporate Governance
Guidelines that cover areas such as director responsibilities
and qualifications, management succession and Board committees.
A copy of our Corporate Governance Guidelines is available on
SunComs website, at www.suncomwireless.net, or a printed
copy can be obtained by writing to SunCom Wireless Holdings,
Inc., Corporate Secretary, 1100 Cassatt Road, Berwyn,
Pennsylvania 19312.
Audit Committee of the Board of Directors
General
The Audit Committee met seven times in 2005. The current members
of the Audit Committee are Mr. Anderson, as chairman,
Mr. DeVito and Mr. Sheiffer. Each member of the Audit
Committee has been found by the Board of Directors to have no
relationship with SunCom that would interfere with the exercise
of their independence from SunCom and its management, and meets
all other criteria of independence under the listing standards
of the New York Stock Exchange and Rule 10A-3 promulgated
by the Securities and Exchange Commission. The Board of
Directors has determined that Arnold Sheiffer qualifies as an
audit committee financial expert, as defined by Securities and
Exchange Commission rules.
The functions of the Audit Committee include: appointment of
SunComs independent registered public accounting firm;
reviewing SunComs financial statements on a quarterly
basis; reviewing with the independent registered public
accounting firm and SunComs internal auditors their annual
audit plans; reviewing managements plans for engaging the
independent registered public accounting firm to perform
management advisory services; discussing with management, the
independent registered public accounting firm and the internal
auditors the adequacy of SunComs internal controls and
financial reporting process; monitoring significant accounting
and reporting issues; and monitoring compliance with
SunComs policies relating to ethics and conflicts of
interest. Both our independent registered public accounting firm
and our internal auditors have unrestricted access to the Audit
Committee, including the opportunity to meet with the Audit
Committee alone.
The Audit Committee utilizes a policy pursuant to which the
audit, audit-related and permissible non-audit services to be
performed by the independent registered public accounting firm
are pre-approved prior
8
to the engagement to perform such services. Prior to the Audit
Committees regular meeting in May of each year, the
independent registered public accounting firm will submit
engagement letters and proposed fees for annual audit services
to be performed that year. Pre-approval for other audit and
permitted non-audit services is generally provided on an
quarterly basis, and any pre-approval is detailed as to the
particular service or category of services and is generally
subject to a specific budget. In accordance with this
pre-approval policy, the independent registered public
accounting firm and management are required to periodically
report to the Audit Committee regarding the extent of services
provided by the independent registered public accounting firm
and the fees for the services performed to date. The Audit
Committee has delegated its pre-approval authority to the
Chairman of the Audit Committee, and any approvals made pursuant
to this delegated authority will be reported to the Audit
Committee at its next meeting.
Audit Committee Report
The Audit Committee operates under a written charter adopted by
the SunCom Board of Directors, a copy of which is available on
SunComs website, at www.suncomwireless.net.
Management is responsible for SunComs internal control
over financial reporting and the financial reporting process.
The independent registered public accounting firm is responsible
for performing an independent audit of SunComs
consolidated financial statements and internal control over
financial reporting in accordance with the standards of the
Public Company Accounting Oversight Board (United States) and
issuing a report thereon. The Audit Committees
responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has reviewed and discussed
the consolidated financial statements with management and the
independent registered public accounting firm. The Audit
Committee discussed with the independent registered public
accounting firm matters required to be discussed by Statement of
Auditing Standards No. 61, as amended (Communication with
Audit Committees).
SunComs independent registered public accounting firm also
provided to the Audit Committee the written disclosures and the
letter required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committee), and
the Audit Committee discussed with the independent registered
public accounting firm such firms independence.
Based upon the Audit Committees review and discussions
with management and the independent registered public accounting
firm, the Audit Committee recommended that the Board of
Directors include the audited consolidated financial statements
and managements assessment of internal controls over
financial reporting in SunComs Annual Report on
Form 10-K for the
year ended December 31, 2005 filed with the Securities and
Exchange Commission.
The Audit Committee has considered whether the provision by
PricewaterhouseCoopers LLP of non-audit services to SunCom is
compatible with maintaining the independence of
PricewaterhouseCoopers LLP and determined that the provision of
such services by PricewaterhouseCoopers LLP was compatible with
maintaining PricewaterhouseCoopers LLPs independence. The
Audit Committee has approved PricewaterhouseCoopers LLP as
SunComs independent registered public accounting firm for
the fiscal year ending December 31, 2006.
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Scott I. Anderson |
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Mathias J. DeVito |
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Arnold Sheiffer |
Audit Fees
The aggregate audit fees billed for professional services
rendered by PricewaterhouseCoopers LLP were $1,085,100 and
$859,400 in 2004 and 2005, respectively. The fees incurred in
2004 were comprised of $1,038,600 of billings for the audit of
SunComs annual financial statements and internal control
over
9
financial reporting and the reviews of SunComs quarterly
financial statements and $46,500 of billings for services
provided in connection with documents filed with the Securities
and Exchange Commission. The fees incurred in 2005 were
comprised of $847,500 of billings for the audit of SunComs
annual financial statements and internal control over financial
reporting, the reviews of SunComs quarterly financial
statements and the audit of required statutory financial
statements and $11,900 of billings for services provided in
connection with documents filed with the Securities and Exchange
Commission.
Audit-Related Fees
The aggregate fees billed for audit-related services rendered by
PricewaterhouseCoopers LLP were $413,335 and $96,000 in 2004 and
2005, respectively. The fees incurred in 2004 were for the audit
of a business acquired in 2004 and the audit of SunComs
401(k) plan. The fees incurred in 2005 related to an asset sale
and due diligence audit workpaper review.
Tax Fees
PricewaterhouseCoopers LLP did not provide tax services to
SunCom in either 2004 or 2005.
All Other Fees
The aggregate fees billed by PricewaterhouseCoopers LLP for
services other than those described above under Audit
Fees and Audit-Related Fees were $15,000 and
$3,000 in 2004 and 2005, respectively. The fees in 2004 were
incurred for a workforce benchmarking report. The fees in 2005
were incurred for the licensing of a proprietary on-line
accounting research library.
None of the non-audit services provided by
PricewaterhouseCoopers LLP in 2004 or 2005 were pre-approved
pursuant to the de minimis exception provided in
Section 10A(i)(1)(B) of the Securities Exchange Act of
1934, as amended.
Nominating/ Corporate Governance Committee of the Board of
Directors
The Nominating/ Corporate Governance Committee met five times in
2005. The members of the Nominating/ Corporate Governance
Committee are Mr. Desai, as chairman, Mr. Chavkin and
Mr. Anderson, each of whom is independent, as defined by
the current listing standards of the New York Stock Exchange.
The Nominating/ Corporate Governance Committee operates pursuant
to a written charter, a copy of which is available at on
SunComs website, at www.suncomwireless.net.
The functions of the Nominating/ Corporate Governance Committee
include considering candidates to serve as members of the Board
of Directors and nominating qualified persons for election at
the annual meeting of stockholders. The Nominating/ Corporate
Governance Committee will consider nominees recommended by
stockholders who follow the procedures set forth in
SunComs bylaws. For more information, see Submission
of Stockholder Proposals below. The Nominating/ Corporate
Governance Committee will identify individuals qualified to
become members of the Board of Directors and recommend
candidates to fill new or vacant positions. In recommending such
candidates, the Nominating/ Corporate Governance Committee will
consider such factors as it deems appropriate to assist in
developing a Board of Directors and committees that are diverse
in nature and comprised of experienced and seasoned advisors.
These factors may include judgment, skill, diversity (including
factors such as race, gender or experience), integrity,
experience with businesses and other organizations of comparable
size, the interplay of the candidates experience with the
experience of other Board members, and the extent to which the
candidate would be a desirable addition to the Board of
Directors and any committees of the Board of Directors. All
potential director candidates, regardless of source, are
reviewed under the same process.
To date, no stockholder or group of stockholders owning more
than 5% of SunComs Class A common stock for at least
one year has put forth any director nominees. The Nominating/
Corporate Governance Committee, however, is responsible for
considering and making recommendations to the Board concerning
director nominees by stockholders. Stockholders wishing to
nominate a director should follow SunComs nominating
process set forth above and more fully described in
SunComs bylaws. The
10
Nominating/ Corporate Governance Committee would evaluate
director nominees proposed by stockholders in the same manner
that all director nominees are evaluated.
Compensation Committee of the Board of Directors
General
The Compensation Committee met six times in 2005. The members of
the Compensation Committee are Mr. Chavkin, as chairman,
Mr. Desai, Mr. DeVito and Mr. Sheiffer, each of
whom is independent, as defined by the current listing standards
of the New York Stock Exchange. The Compensation Committee
operates pursuant to a written charter, a copy of which is
available on SunComs website, at www.suncomwireless.net.
The functions of the Compensation Committee include: overseeing
the administration of SunComs compensation policies and
practices; establishing and administering the compensation plans
of members of senior management and authorizing any adjustments
thereto; administering SunComs Stock and Incentive Plan
and authorizing all awards granted thereunder; and reporting
annually to the stockholders of SunCom on matters concerning the
compensation of executives of SunCom.
Compensation Committee Report on Executive Compensation
The Compensation Committee consists of four non-employee
directors. The Compensation Committee regularly reviews
SunComs executive compensation policies and practices and
establishes the salaries of executive officers.
Executive Compensation Policy. The Compensation
Committees executive compensation policy is founded on
principles that guide SunCom in establishing all of its
compensation programs. SunCom designs compensation programs to
attract, retain and motivate highly talented individuals at all
levels of the organization. In addition, the programs are
designed to be cost-effective and to treat all employees fairly.
To that end, all programs, including those for executive
officers, share these characteristics:
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Compensation is based on the level of job responsibility,
individual performance and SunComs performance. Members of
senior management have a greater portion of their pay based on
SunComs performance than other employees. |
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Compensation also reflects the value of the job in the
marketplace. To retain its highly skilled work force, SunCom
strives to remain competitive with the pay of other highly
respected employers who compete with SunCom for talent. |
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To align the interests of employees with those of stockholders,
SunCom provides employees at all levels of the organization the
opportunity for equity ownership through various SunCom
programs. In addition, executive officers and other key
employees have the opportunity to build more substantial equity
ownership through SunComs stock plans. |
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Compensation programs are developed and administered to foster
the long-term focus required for success in the wireless
communications industry. |
The Compensation Committee believes that SunComs executive
compensation program reflects the principles described above and
provides executives strong incentives to maximize SunComs
performance and, therefore, enhance stockholder value. The
program consists of both annual and long-term components. The
Compensation Committee believes that the executive compensation
program should be considered as a whole in order to properly
assess whether it is attaining its objectives.
In establishing total compensation, the Compensation Committee
considers various measures of SunComs historical and
projected performance, including revenues, operating results,
new market launches, meeting network build-out schedules and
cost budgets and implementation of information technology
services. This data forms the basis for the Compensation
Committees assessment of the overall performance and
prospects of SunCom that underpin the Compensation
Committees judgment in establishing total compensation
ranges.
11
SunCom also retains independent compensation and benefits
consultants to assist in evaluating executive compensation
programs. The use of independent consultants is intended to
provide additional assurance that SunComs programs are
reasonable and appropriate to SunComs objectives.
Components to Executive Compensation.
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Annual Cash Compensation. Annual cash compensation
for executives in 2005 consisted of two components: base salary
and a cash bonus. |
Base salaries and cash bonuses are determined with reference to
SunCom and individual performance for the previous year,
internal relativity and market conditions, including pay at
wireless communications companies of like size and stature to
SunCom and general inflationary trends. Assessment of individual
performance includes considerations of a persons impact on
financial performance as well as judgment, creativity,
effectiveness in developing subordinates and a diverse
organization and contributions to improvement in the quality of
SunComs products, services and operations.
Cash bonuses are generally paid based on predetermined annual
goals. For 2005, these goals included company performance
against predetermined company operating metrics (such as net
subscriber additions and Adjusted EBITDA (net loss plus net
interest expense, income taxes, depreciation and asset disposal,
amortization adjusted for other expense and non-cash
compensation)). Executive bonuses for 2005 were determined in
accordance with these standards and with consideration for the
operational difficulties associated with the integration of new
markets.
SunCom also maintains a retention program. Under that program,
executive officers other than the Chief Executive Officer, who
is a long-term employee of the Company, have entered into
Executive Retention Bonus Agreements. The Executive Retention
Bonus Agreements were designed to enhance SunComs ability
to retain valuable executive employees and to align those
employees long-term interests with the long-term interests
of SunCom. Under these agreements, the covered executives may be
entitled to receive specified bonus payments over a three or
four-year period ending in 2006 and 2007, provided, the
individual executive remains employed with the company, the
executives performance satisfies applicable standards and
the executive agrees to restrictions on the disposition of their
SunCom stock. The restrictions related to the disposition of
SunCom stock generally prohibit the sale of stock for less than
a specified price, except in certain limited circumstances.
As noted above, SunCom uses the data from companies of like
size and stature, as well as other market data to test for
reasonableness and competitiveness of its base salaries and
bonuses. The Compensation Committee also exercises subjective
judgment in view of SunComs compensation objectives.
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Long-Term Incentive Compensation. Long-term
incentive awards typically are granted to provide executive
officers with a competitive long-term incentive opportunity and
an identity of interest with SunCom shareholders. Long-term
incentive awards generally are provided under SunComs
Stock and Incentive Plan, which is administered by the
Compensation Committee. The intent of such awards is to provide
the recipient with an incentive to perform at levels that will
result in better performance by SunCom and enhanced stock value. |
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SunCom uses the data from companies of like size and stature, as
well as other market data to test for reasonableness and
competitiveness of its long-term incentive compensation. The
Compensation Committee also exercises subjective judgment in
view of SunComs long-term incentive objectives. SunCom has
proposed to amend the Stock and Incentive Plan. See
Proposal No. 2 below. |
Chief Executive Officer Compensation.
Mr. Kalogris employment agreement was renewed
effective as of December 30, 2005, and the executive
compensation policy described above was applied in establishing
the 2005 compensation for Mr. Kalogris, with the basic
compensation levels determined
12
pursuant to his employment agreement. Mr. Kalogris
participated in the same executive compensation plans available
to SunComs other executives.
In 2005, Mr. Kalogris had a base salary of $453,200.
Mr. Kalogris bonus was primarily based on established
goals. For 2005, these goals included company performance
against predetermined company operating metrics (such as net
subscriber additions and Adjusted EBITDA). Based upon
SunComs performance versus predetermined business
objectives and with consideration for the operational
difficulties associated with the integration of new markets, the
Compensation Committee determined that Mr. Kalogris earned
an annual cash bonus of $254,925 in 2005. In 2005,
Mr. Kalogris also received a restricted stock grant of
227,500 shares, which vest 100% in 2008. This stock grant
was based primarily upon an analysis of equity awards made at
companies of like size and industry. In addition, in 2006, the
employment agreement previously entered into with
Mr. Kalogris was scheduled to expire. In consideration of
his past performance and the performance of SunCom,
Mr. Kalogris and SunCom entered into an extension of
Mr. Kalogris employment agreement in 2005. In
connection with the execution of that extension,
Mr. Kalogris received a contractual payment subject to
forfeiture of $500,000. A portion of this payment may be
forfeited should Mr. Kalogris terminate his employment
prior to the expiration of his employment agreement in certain
circumstances.
Tax Deductibility Considerations. Section 162(m) of
the Internal Revenue Code limits the deductibility of
compensation in excess of $1 million paid to certain
executive officers named in this proxy statement, unless certain
requirements are met. It is the present intention of the
Compensation Committee to preserve the deductibility of
compensation under Section 162(m) to the extent the
Compensation Committee believes that doing so would be
consistent with the best interests of stockholders.
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Arnold L. Chavkin |
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Rohit M. Desai |
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Mathias J. DeVito |
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Arnold Sheiffer |
Compensation of Directors
Non-employee members of the Board of Directors receive
compensation of $15,000 per year, plus $2,500 for each
meeting they attend in person or telephonically if scheduled as
a conference call or $1,000 for each scheduled in-person meeting
they participate in via conference call. Non-employee directors
also receive compensation of $10,000 per year for each
committee on which they serve, plus $1,750 for each committee
meeting they attend in person or telephonically, and the
Chairman of each committee receives an additional $5,000 annual
retainer. All directors are reimbursed for expenses for every
Board and committee meeting attended.
In 2005, each non-employee director received a grant of
15,000 shares of restricted stock under the Directors
Stock and incentive Plan. These shares vest in August 2007 and
are subject to forfeiture if the director terminates service
prior to vesting of the award. In addition, directors have the
option of deferring receipt of shares until a future date beyond
the vesting date in certain circumstances.
Executive Officers
The executive officers of SunCom who are not directors are set
forth below.
William A. Robinson, 39, has served as Executive Vice
President of Operations of SunCom since April 2004, Senior Vice
President of Operations and Controller from September 2003
through March 2004, Senior Vice President of Operations from
January 2001 through August 2003 and as Vice President and
Controller from March 1998 through December 2000. Before joining
SunCom, Mr. Robinson served as Director, Financial
Reporting for Freedom Chemical Company from June 1997 through
March 1998 and Director, Financial Analysis, Planning and
Budgeting for Centeon L.L.C. from December 1995 through June
1997.
13
Daniel E. Hopkins, 41, has served as Senior Vice
President and Treasurer of SunCom since April 2001 and as Vice
President and Treasurer from July 1998 through March 2001.
Mr. Hopkins served as Vice President of Finance and
Treasurer for SunCom Cellular Partners, L.P. from July 1998
through April 2000. From May 1994 until joining SunCom, he was a
Vice President at PNC Bank, where he focused primarily on the
financing of telecommunications ventures. Mr. Hopkins has over
ten years of banking experience, primarily in the areas of
Communications Finance and Acquisitions/ Leveraged Finance.
Laura M. Shaw-Porter, 40, has served as Senior Vice
President of Human Resources since September 2003 and as Vice
President of Human Resources from February 1999 through August
2003. Ms. Shaw-Porter joined SunCom as the Director of
Human Resources in August 1998. Before joining SunCom, Ms.
Shaw-Porter served as Director of Human Resources for US
Physicians, Inc. from 1993 through 1998.
Emilio Echave, 51, has served as Senior Vice President of
Operations of SunCom since January 2005. Prior to joining
SunCom, Mr. Echave worked at AT&T Wireless as the
Regional Vice President of the South Region from July 2002
through December 2004, Senior Vice President of Sales and
Distribution from March 1999 through June 2002, President of the
East Region from February 1998 through March 1999 and President
of the Southeast Region from May 1997 through February 1998.
Including his tenure with AT&T Wireless, Mr. Echave has
over 18 years of experience in the wireless industry.
Charles H.N. Kallenbach, 42, has served as Senior Vice
President of Legal and Regulatory Affairs of SunCom since
November 2004 and Vice President of Legal and Regulatory Affairs
since January 2004. Prior to joining SunCom, Mr. Kallenbach was
General Counsel for Eureka Broadband Corporation, a
New York based telecommunications company and related
companies, from 2001 through January 2004. Mr. Kallenbach
also served as General Counsel to 2nd Century
Communications, Inc., a Virginia-based voice and data service
provider, from 2000 through 2001, and as Vice President of Legal
and Regulatory Affairs for
e-spire Communications,
Inc. from 1996 through 2000.
Raul Burgos, 42, has served as President of SunCom
Wireless Puerto Rico Operating Co., L.L.C. since December 2004.
Prior to joining SunCom, Mr. Burgos was the General Manager
and Vice President of Puerto Rico operations for AT&T
Wireless from May 1999 through December 2004. Mr. Burgos also
served as General Manager and Vice President of Operations of
Nextel International, Inc. from May 1998 through May 1999, and
as the Director or Marketing and New Business Development of
Nextel Communications, Inc. from October 1996 through April
1998. Mr. Burgos has over ten years of experience in the
wireless industry.
14
Equity Compensation Plan Information
The following table summarizes information about our equity
compensation plans as of December 31, 2005. All outstanding
awards relate to our Class A common stock.
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A | |
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B | |
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C | |
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| |
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| |
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| |
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Number of securities | |
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remaining available for future | |
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Number of securities to | |
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Weighted-average | |
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issuance under equity | |
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be issued upon exercise | |
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exercise price of | |
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compensation plans | |
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of outstanding options, | |
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outstanding options, | |
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(excluding securities reflected | |
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warrants and rights | |
|
warrants and rights | |
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in column A) | |
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| |
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| |
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| |
Equity Compensation plans approved by security holders
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Stock and Incentive Plan(1)
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2,317,245 |
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2004 Directors Stock and Incentive Plan(2)
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178,000 |
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Equity compensation plans not approved by security holders
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Director Stock Grants(3)
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Total
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2,495,245 |
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(1) |
The Stock and Incentive Plan provides for awards of restricted
stock and does not permit the award of stock options. SunCom has
made grants of restricted stock under its Stock and Incentive
Plan to provide an incentive to key employees to further align
the interests of such individuals with those of its
stockholders. Grants of restricted stock generally are made
annually and deferred compensation is recorded for these awards
based upon the stocks fair value at the date of issuance.
Generally, grants vest over a four to five year period. As of
December 31, 2005, 5,637,250 shares of restricted
stock had been issued and 2,317,245 restricted shares were
available to be issued under the Stock and Incentive Plan. |
|
(2) |
SunCom has made grants of restricted stock under its
2004 Directors Stock and Incentive Plan to provide an
incentive to directors to further align the interests of such
individuals with those of its stockholders. Grants of restricted
stock generally are made on a discretionary basis and deferred
compensation is recorded for these awards based upon the
stocks fair value at the date of issuance. Generally,
grants vest over a three-year period. As of December 31,
2005, 422,000 shares of restricted stock had been issued
and 178,000 restricted shares were available to be issued under
the 2004 Directors Stock and Incentive Plan. |
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(3) |
SunCom awarded an aggregate of 82,500 restricted shares of
Class A common stock at an average per share price of $4.11
to its independent directors in 2002. These awards vest in equal
installments over a five-year period, with the final installment
vesting on June 1, 2007. The restricted stock awards to
SunComs independent directors were not approved by
SunComs stockholders. |
15
Executive Compensation
Summary Compensation Table
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Annual Compensation | |
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| |
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Restricted Stock | |
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All Other | |
Name Principal Position |
|
Year | |
|
Salary | |
|
Bonus(2) | |
|
Other(3) | |
|
Awards(4) | |
|
Compensation(5) | |
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| |
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| |
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| |
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| |
Michael E. Kalogris
|
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|
2005 |
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|
$ |
453,200 |
|
|
$ |
754,925 |
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|
|
|
|
|
$ |
489,125 |
|
|
$ |
7,070 |
|
|
Chairman of the Board of Directors |
|
|
2004 |
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|
|
453,200 |
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|
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316,107 |
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|
|
|
|
|
|
871,325 |
|
|
|
6,572 |
|
|
and Chief Executive Officer |
|
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2003 |
|
|
|
448,288 |
|
|
|
906,400 |
|
|
|
|
|
|
|
680,225 |
|
|
|
2,870 |
|
|
David D. Clark(1)
|
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|
2005 |
|
|
$ |
258,500 |
|
|
$ |
258,500 |
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|
|
|
$ |
198,875 |
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|
$ |
319 |
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Former Executive Vice President,
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2004 |
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258,500 |
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180,304 |
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|
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506,858 |
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6,572 |
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Chief Financial Officer and Secretary
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2003 |
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257,868 |
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517,000 |
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276,575 |
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5,298 |
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William A. Robinson
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2005 |
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$ |
246,923 |
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$ |
513,880 |
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$ |
198,875 |
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$ |
7,070 |
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Executive Vice President
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2004 |
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210,463 |
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221,904 |
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1,072,400 |
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6,572 |
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of Operations
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2003 |
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183,260 |
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137,520 |
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123,095 |
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5,242 |
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Daniel E. Hopkins
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2005 |
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$ |
190,308 |
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$ |
653,891 |
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|
|
|
|
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$ |
64,500 |
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$ |
7,070 |
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Senior Vice President
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2004 |
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188,822 |
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|
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172,973 |
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114,900 |
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6,572 |
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and Treasurer
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2003 |
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181,968 |
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228,572 |
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123,089 |
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5,242 |
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Emilio Echave
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2005 |
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$ |
215,846 |
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$ |
194,745 |
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$ |
42,047 |
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$ |
252,000 |
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$ |
64 |
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Senior Vice President
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2004 |
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of Operations
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2003 |
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Raul Burgos
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2005 |
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$ |
210,000 |
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$ |
118,650 |
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$ |
113,268 |
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$ |
252,000 |
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$ |
6,975 |
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President of SunComWireless
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2004 |
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1,593 |
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Puerto Rico Operating Co., L.L.C.
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2003 |
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(1) |
On December 20, 2005, Mr. Clark, SunCom Wireless
Holdings, Inc. and SunCom Wireless Management Company, Inc.
mutually agreed not to renew Mr. Clarks employment
agreement after its expiration on February 3, 2006, and
Mr. Clark resigned his role as Executive Vice President,
Chief Financial Officer and Secretary, effective as of
December 20, 2005. In order to assist with transition,
Mr. Clark remained employed at SunCom until
February 3, 2006. |
|
(2) |
Amounts reflected as 2005 bonus with respect to
Mr. Kalogris and Mr. Robinsons 2005 bonus
include a contractual payment subject to forfeiture paid in
accordance with their amended employment agreements.
Mr. Clarks 2005 bonus was calculated in accordance
with his severance agreement dated December 20, 2005.
Mr. Robinson and Mr. Hopkins were each paid a bonus of
$99,380 in 2005 in accordance with their Executive Retention
Bonus Agreements. Mr. Hopkins also received a bonus of
$4,511 in connection with the vesting of certain shares of
restricted stock, and under his employment agreement,
Mr. Hopkins is entitled to receive two guaranteed bonuses
totaling $550,000 in lieu of bonuses he might have been eligible
to receive under bonus programs sponsored by SunCom in 2005,
which guaranteed bonus payments are included in the table as
earned in 2005 although subject to his continued to employment
through the date of payment. Mr. Echave was paid a bonus of
$51,570 in 2005 in accordance with his Executive Retention Bonus
Agreement. Mr. Burgos was paid a bonus of $31,500 in 2005
in accordance with his Executive Retention Bonus Agreement.
Mr. Robinson and Mr. Hopkins were each paid a bonus of
$84,480 in 2004 in accordance with their Executive Retention
Bonus Agreements. Mr. Kalogris and
Mr. Clarks 2003 bonus included a signing bonus paid
in accordance with their amended employment agreements.
Mr. Robinson and Mr. Hopkins were each paid a bonus of
$44,700 in 2003 in accordance with their Executive Retention
Bonus Agreements. |
|
(3) |
Reflects payment of relocation expenses incurred by
Mr. Echave and Mr. Burgos in 2005. |
|
(4) |
The executive officers named in the table held the following
restricted shares of SunComs Class A common stock as
of December 31, 2005, with the market value, based on the
December 31, 2005 closing price of $2.77 per share,
indicated: (a) Mr. Kalogris held 682,500 restricted
shares, which had |
16
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an aggregate value of $1,890,525, (b) Mr. Clark held
92,500 restricted shares, which had an aggregate value of
$256,225, (c) Mr. Robinson held 370,001 restricted
shares, which had an aggregate value of $1,024,490, (d) Mr.
Hopkins held 90,000 restricted shares, which had an aggregate
value of $249,300, (e) Mr. Echave held 120,000
restricted shares, which had an aggregate value of $332,400, and
(f) Mr. Burgos held 120,000 restricted shares, which
had an aggregate value of $332,400. All such shares of
Class A common stock vest over a four or five-year period
commencing on the date of grant, unless specifically noted
below. The value of the Class A common stock, at the date
of grant, ranged between $1.68 and $2.15 for all grants made in
2005, ranged between $2.42 and $4.22 for all grants made in
2004, ranged between $2.86 and $5.38 per share for all
grants made in 2003, was $8.40 per share for all grants
made in 2002, was $39.39 per share for all grants made in
2001 and ranged between $38.00 and $46.44 per share in 2000. |
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|
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The foregoing reflects the shares that remain subject to
forfeiture at December 31, 2005. See Principal
Stockholders. |
|
|
In 2003, Mr. Kalogris received an award of
227,500 shares, which vest 100% as of May 1, 2006. In
2003, Mr. Clark received an award of 92,500 shares,
which fully vested on February 3, 2006 in accordance with
his severance agreement dated December 20, 2005. In 2003,
Mr. Robinson received an award of 41,169 shares which
vest as follows: 20.6% for the year ending May 1, 2005,
30.8% for the year ending May 1, 2006 and 48.6% for the
year ending May 1, 2007. In 2003, Mr. Hopkins received
an award of 41,167 shares, which vest as follows: 20.6% for
the year ending May 1, 2005 and, in accordance with his
employment agreement dated December 14, 2005, 79.4% for the
period ending March 30, 2006. In 2004, Mr. Kalogris
received an award of 227,500 shares, which vest 100% as of
May 1, 2007. In 2004, Mr. Clark received an award of
132,339 shares, which vested 30.1% as of May 1, 2005
and the remainder were forfeited in accordance with his
severance agreement dated December 20, 2005. In 2004,
Mr. Robinson received an award of 280,000 shares,
which vest 22.3% for the years ending May 1, 2004, 2005 and
2006 and 33.1% for the year ending May 1, 2007. In 2004,
Mr. Hopkins received an award of 30,000 shares, which,
in accordance with his employment agreement dated
December 14, 2005, vest 100% as of June 30, 2006. In
2005, Mr. Kalogris received an award of
227,500 shares, which vest 100% as of May 1, 2008. In
2005, Mr. Clark received an award of 92,500 shares,
which he subsequently forfeited in accordance with his severance
agreement dated December 20, 2005. In 2005,
Mr. Robinson received an award of 92,500 shares, which
vest 100% as of May 1, 2009. In 2005, Mr. Hopkins
received an award of 30,000 shares, which he subsequently
forfeited in accordance with his December 14, 2005
employment agreement. Notwithstanding the vesting schedules set
forth above, all restricted shares vest in specified
circumstances constituting a change of control. |
|
|
(5) |
Reflects matching contributions to SunComs 401(k) plan
made by SunCom on behalf of the named executive officers during
2004 and insurance premiums paid by SunCom during the same
period for term life insurance secured for the benefit of the
executive officers, as follows: Mr. Kalogris $7,000 and
$70, respectively; Mr. Clark $249 and $70, respectively;
Mr. Robinson $7,000 and $70, respectively; Mr. Hopkins
$7,000 and $70, respectively; Mr. Echave $0 and $64,
respectively; and Mr. Burgos $6,786 and $189 respectively. |
Employment and Severance Agreements
On February 4, 1998, SunCom entered into an employment
agreement for a five-year term with Michael E. Kalogris,
SunComs Chief Executive officer and Chairman of
SunComs Board of Directors. On May 6, 2003, this
employment agreement was amended to extend the terms of
Mr. Kalogris employment through February 3, 2006
and was most recently amended on December 14, 2005 to
extend the terms of Mr. Kalogris employment through
February 3, 2010. On March 7, 2005, SunCom entered
into an employment agreement with William A. Robinson,
SunComs Executive Vice President of Operations. The
employment agreement initially extended through February 3,
2006. On December 14, 2005, this employment agreement was
amended to extend the terms of Mr. Robinsons
employment through February 3, 2009. The amended employment
agreements prohibits Mr. Kalogris and Mr. Robinson,
except in certain limited situations, from transferring their
shares of SunComs Class A
17
common stock during the period covered by the employment
agreement. Upon executing their most recent employment
agreements, Mr. Kalogris and Mr. Robinson received
contractual payments subject to forfeiture in the amount of
$500,000 and $275,000, respectively. A portion of these payments
may be forfeited should the executive terminate his employment
prior to the expiration of his employment agreement in certain
circumstances. Each of these employment agreements, however, may
be terminated by either executive officer or SunCom. Each of
these executive officers may terminate his employment agreement:
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at any time at his sole discretion upon 30 days prior
written notice, in the case of Mr. Kalogris, and
60 days prior written notice, in the case of
Mr. Robinson; and |
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|
immediately, upon written notice for good reason, which includes: |
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|
(a) |
if there is a change of control, as defined in the employment
agreement; |
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(b) |
in the case of Mr. Robinson, if he is demoted or removed
from any of his positions or offices other than in accordance
with his respective employment agreement, and in the case of
Mr. Kalogris, if he is demoted, removed or not re-elected
as Chairman of SunComs Board of Directors. However, so
long as Mr. Kalogris remains a member of SunComs
Board of Directors and SunComs Chief Executive Officer, it
is not considered good reason if Mr. Kalogris is no longer
Chairman of SunComs Board of Directors; |
|
|
(c) |
there is a material diminishment of the executive officers
responsibilities, duties or status and that diminishment is not
rescinded within 30 days after receiving written notice of
the diminishment; |
|
|
(d) |
SunCom fails to pay or provide benefits to the executive officer
when due and does not cure that failure within 10 days of
receiving written notice of that failure; |
|
|
(e) |
SunCom relocates its principal offices more than 30 miles
from its current headquarters without the consent of the
executive officer; |
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|
(f) |
SunCom purports to terminate the executive officer for cause for
any reason other than those permitted as for cause reasons under
the employment agreement; or |
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|
(g) |
with respect to Mr. Robinson, if Mr. Kalogris
employment with SunCom terminates during the term of
Mr. Robinsons employment. |
SunCom may terminate each employment agreement:
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|
at any time, upon written notice, without cause at SunComs
sole discretion; |
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|
|
for cause, as defined in the employment agreement; or |
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|
upon the death or disability of the executive officer. |
If Mr. Kalogris employment is terminated by reason of
Mr. Kalogris death or disability, his termination
without cause or for good reason (as defined in his employment
agreement) or upon SunComs election not to renew his
agreement, SunCom will pay him a severance benefit in the amount
of his base salary at the time and an amount determined as if he
had achieved 100% of his bonus based goals for the year and
SunCom will cause all unvested shares held by Mr. Kalogris at
the time of his termination to become vested.
Mr. Kalogris employment agreement provides for an
initial annual base salary of $500,000, subject to annual
increases at the discretion of the Compensation Committee of the
Board of Directors, and an annual bonus in an amount up to 100%
of his base salary based on SunComs performance.
If Mr. Robinsons employment with SunCom terminates,
he will be entitled to receive the following:
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unpaid salary earned for services rendered to SunCom on or prior
to the date of Mr. Robinsons termination of
employment; |
18
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the vested portion of any stock award; |
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a prorated bonus, provided Mr. Robinsons employment
is terminated for good reason, by SunCom without cause, or due
to death or disability; |
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a severance award equal to Mr. Robinsons base salary
at the time of termination and payable over a
12-month period,
provided that Mr. Robinsons employment is terminated
for good reason, by SunCom without cause, or due to
disability; and |
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a portion of any unvested shares of SunComs restricted
stock issued to Mr. Robinson, determined in accordance with
the terms of the employment agreement. |
Mr. Robinsons employment agreement provides for an
initial annual base salary of $275,000, subject to annual
increases at the discretion of the Compensation Committee of the
Board of Directors, and an annual bonus in an amount up to 100%
of his base salary based on SunComs performance.
Mr. Clark and SunCom mutually agreed not to renew
Mr. Clarks employment agreement after its expiration
on February 3, 2006, and effective as of December 20,
2005, Mr. Clark resigned his role as Executive Vice
President, Chief Financial Officer and Secretary. Mr. Clark
remained with SunCom until February 3, 2006 in order to
assist with the transition to a successor executive. In
connection with this decision, Mr. Clark and SunCom entered
into a separation agreement that became effective as of
December 20, 2005. Pursuant to the terms of the separation
agreement, Mr. Clark will receive a bonus earned in 2005 in
an amount equal to one years base salary as well as
payments equal to one years base salary commencing
August 3, 2006. In addition, the vested portion of
Mr. Clarks restricted stock will be determined as if
Mr. Clark had continued his employment through and
including May 1, 2006, and Mr. Clark will become
vested in 92,500 additional shares of restricted common stock of
SunCom Wireless Holdings as of May 1, 2006. In
consideration of his benefits under the separation agreement,
Mr. Clark has agreed to a comprehensive release of claims
against SunCom and agreed not to solicit SunCom employees or
customers for two years following February 3, 2006.
On December 14, 2005, Daniel E. Hopkins, SunComs
Senior Vice President, Finance and Treasurer, and SunCom entered
into a one-year employment agreement. Pursuant to his agreement,
Mr. Hopkins will receive a base salary of approximately
$190,300, a guaranteed bonus of $300,000 payable in April 2006
and a guaranteed bonus of $250,000 payable in July 2006 in lieu
of all other bonuses he might be eligible to receive under bonus
programs sponsored by SunCom in 2005. SunCom has also agreed to
accelerate the vesting of 90,000 shares of restricted
Class A common stock owned by Mr. Hopkins.
Restricted stock awards granted to each employee, including each
executive officer named in the Summary Compensation Table on
page 16 of this proxy statement, include certain provisions
relating to the vesting of such awards as the result of a change
in control. In general, in the event of a change of control, any
restricted stock award that is not at least 50% vested as of the
date of the change of control will become 50% vested. The
remaining shares may become 100% vested following the change in
control if the employees employment is terminated or
modified under certain circumstances or if he remains in
employment following the change in control for at least one
year. In addition, any restricted stock award that is at least
50% vested as of the date of any change in control will become
100% vested as of the date of any change of control.
SunCom also maintains a retention program. Under that program,
executive officers other than the Chief Executive Officer, who
is a long-term employee of SunCom, have entered into
Executive Retention Bonus Agreements. The Executive Retention
Bonus Agreements were designed to enhance SunComs ability
to retain valuable executive employees and to align those
employees long-term interests with the long-term interests
of SunCom. Under these agreements, the covered executives may be
entitled to receive specified bonus payments over a three or
four-year period ending in 2006 and 2007, provided, the
individual executive remains employed with the company, the
executives performance satisfies applicable standards and
the executive agrees to restrictions on the disposition of their
SunCom stock. The restrictions related to the disposition of
SunCom stock generally prohibit the sale of stock for less than
a specified price, except in certain limited circumstances.
19
Performance Graph
The following graph compares, for the five-year period beginning
December 31, 2000 and ending December 31, 2005, the
cumulative total return of our Class A common stock to the
cumulative total returns on:
|
|
|
|
|
the Nasdaq Telecommunications Index; and |
|
|
|
the Standard & Poors 500 Stock Index. |
The comparison assumes $100 was invested on December 31,
2000 in our Class A common stock and in each of the
foregoing indices and that all dividends were reinvested. SunCom
has not paid any dividends on its Class A common stock, and
no dividends are included in the representation of SunComs
performance. Stock price performance on the graph below is not
necessarily indicative of future price performance.
Compensation Committee Interlocks and Insider
Participation
The members of SunComs Compensation Committee include
Mr. Chavkin, who is the Chief Investment Officer in the New
York office of J.P. Morgan Partners, LLC (formerly Chase
Capital Partners). See Certain Relationships and Related
Transactions for a description of various agreements
between affiliates of this entity and SunCom.
Certain Relationships and Related Transactions
Arnold L. Chavkin is an Executive Vice President of the entity
that manages J.P. Morgan Partners (23A SBIC Manager), L.P.,
Sixty Wall Street SBIC Fund, L.P. and J.P. Morgan SBIC LLC,
and each of these entities is an affiliate of J.P. Morgan
Chase & Co. Affiliates of J.P. Morgan
Chase & Co. have performed various financial advisory,
investment banking and commercial banking services from time to
time for SunCom and its affiliates and may continue to do so in
the future.
20
Rohit M. Desai is Chairman of the Board and President of Desai
Capital Management, and Mathias J. DeVito serves as the
Chairman of the Advisory Boards of Private Equity Limited
Partnerships managed by Desai Capital Management.
Mr. DeVito receives compensation from these partnerships
for his service on their Advisory Boards. The Advisory Boards
assist Desai Capital Management by reviewing portfolio
investments and valuations and by providing general strategic
guidance to the limited partnerships that hold SunCom stock. Mr.
DeVito is one of four members of the Advisory Boards of these
limited partnerships.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires SunComs executive officers and directors and
persons who own more than 10% of SunComs Class A
common stock to file reports of ownership and changes in
ownership of SunComs Class A common stock with the
Securities and Exchange Commission. Based solely on a review of
copies of such reports and written representations from the
reporting persons, SunCom believes that from January 1,
2005 through December 31, 2005, its executive officers,
directors and greater than 10% stockholders filed on a timely
basis all reports due under Section 16(a) of the Exchange
Act, except that Dan Hopkins made a late filing of a single
Form 4 reflecting his forfeiture of certain shares upon
execution of his employment agreement.
AMENDMENT OF THE SUNCOM WIRELESS HOLDINGS, INC. AMENDED
AND
RESTATED STOCK AND INCENTIVE PLAN
(Proposal No. 2)
The Board of Directors has approved the amendment of the SunCom
Wireless Holdings, Inc. Amended and Restated Stock and Incentive
Plan (the Plan). While most of the changes are
ministerial or administrative in nature, the adoption of one
amendment to the Plan requires stockholder approval under
applicable rules of the New York Stock Exchange. Specifically,
the Plan, as amended, would allow shares of the Class A
common stock to be granted to independent contractors who
provide compensatory services to SunCom or any parent or
subsidiary corporation. If stockholders do not approve this
Proposal No. 2, the Plan will continue in its current
form, except for certain other amendments that may be made by
the Board and which do not require stockholder approval. In
addition to the amendment to permit the issuance of Class A
common stock to independent contractors, the amended Plan will
eliminate the 1,000,000 share limit that governs the
aggregate number of shares that may be issued to an individual
under the Plan in any given year, as discussed further below,
and will reflect other minor modifications designed to
facilitate Plan administration. The following summary describes
the material features of the amended Plan; however, this summary
does not purport to be complete and is qualified in its entirety
by reference to the terms of the amended Plan, which is filed as
an appendix to this proxy statement with the Securities and
Exchange Commission and is not included as part of the proxy
materials mailed to stockholders. You may access a copy of this
proxy statement and the amended Plan by visiting the Securities
and Exchange Commissions website, www.sec.gov. A printed
copy of the amended Plan also may be obtained by writing to
SunCom Wireless Holdings, Inc., Corporate Secretary, 1100
Cassatt Road, Berwyn, Pennsylvania 19312.
Plan Administration and Purpose
The purpose of the amended Plan is to align the interests of
employees and independent contractors with those of the
stockholders by providing incentives to certain employees and
independent contractors of SunCom in the form of equity-based
compensation. The amended Plan will be administered by the
Compensation Committee of the Board of Directors, or in the
absence of such a committee, by members of the Board as selected
by the Board. Under the amended Plan, awards may be made to
employees and certain independent contractors who provide
services to SunCom or any parent or subsidiary corporation. As
of December 31, 2005, SunCom had approximately 1,959
employees and 30 independent contractors. No awards have yet
been granted to independent contractors because the addition of
independent
21
contractors as eligible participants is subject to stockholder
approval. The Compensation Committee has sole discretion,
subject to the limitations under the Plan, to determine, among
other things, the individuals to whom awards will be made, the
amounts of awards to be made and the terms, conditions and
limitations applicable to each award.
Grants of Restricted Stock Awards Under the Plan
The Plan currently provides that the Compensation Committee may
grant restricted stock awards for up to an aggregate of
7,954,495 shares of the Class A common stock (subject
to adjustment for anti-dilution purposes), and, as of
February 28, 2006, an aggregate of 5,637,250 restricted
shares of Class A common stock have been awarded under the
Plan. The Board of Directors is not at this time recommending
that the aggregate share limitation be increased. However, the
Board of Directors has approved an amendment to eliminate the
limitation on the number of restricted shares that may be issued
to an individual under the Plan (the Individual
Limit). This amendment will afford the Compensation
Committee greater flexibility in the compensation of eligible
participants pursuant to the amended Plan. It also would
eliminate a provision the Board believes is unnecessary in
equity plans (such as the Plan) that are limited to awards of
restricted stock not intended to comply with Section 162(m)
of the Internal Revenue Code (governing the deductibility by the
employer of compensation paid to executive officers in excess of
$1 million per year). As described in the proxy statements
provided to stockholders in 2001 and 2004 in connection with
prior amendments to the Plan that were approved by the
stockholders, SunCom has applied the Individual Limit (an
aggregate of 1,000,000 shares) as a restriction on the
number of shares that may be awarded annually to any specific
individual.
The share total described above will be adjusted by the
Compensation Committee to reflect any changes in the number of
shares of Class A common stock available due to any stock
dividend, stock split, reverse split, combination,
recapitalization, reorganization, merger, spin-off or similar
corporate transaction or event.
Restricted Stock
The Compensation Committee may authorize awards of restricted
stock. Restricted stock awards are ordinarily made for no
consideration other than services rendered, unless determined
otherwise by the Compensation Committee. Restricted stock is
Class A common stock that is non-transferable and subject
to certain service, performance and/or other restrictions
determined by the Compensation Committee for a specified period
established by the Committee. Awards may provide for immediate
vesting, and certain employees may elect to defer the receipt of
all shares of Class A common stock that are subject to a
restricted stock award. Unless the Compensation Committee
determines otherwise, or specifies otherwise in an award
agreement, if the employee terminates employment during the
restricted period, the restricted stock will be forfeited.
Estimate of Benefits
The number of shares of restricted stock that would be granted
to SunComs officers and other employees under the Amended
Plan is not currently determinable. The number of shares of
restricted stock awarded to SunComs named executive
officers in 2005 is noted in the Summary Compensation Table on
page 16 of this proxy statement. The average of the high
and low sales price of SunComs Class A common stock
as reported on the New York Stock Exchange composite
transactions listing for February 28, 2006 was
$1.76 per share.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS
PROPOSAL.
22
SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal No. 3)
The Audit Committee has appointed PricewaterhouseCoopers LLP as
our independent registered public accounting firm for 2006.
Although stockholder ratification of the Audit Committees
action in this respect is not required, the Audit Committee
considers it desirable for stockholders to pass upon such
appointment. If the stockholders do not ratify the appointment
of PricewaterhouseCoopers LLP, the engagement of independent
registered public accounting firm will be reevaluated by the
Audit Committee.
Ratification of the appointment of PricewaterhouseCoopers LLP
shall be effective upon receiving the affirmative vote of the
holders of a majority of the voting power of SunComs
Class A common stock present or represented by proxy and
entitled to vote at the Annual Meeting.
A representative of PricewaterhouseCoopers LLP will be present
at the Annual Meeting, will be offered the opportunity to make a
statement if the representative so desires and will be available
to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM.
Other Matters
We do not know of any other matters to be considered at the
Annual Meeting. If any other matters properly come before the
meeting, persons named in the accompanying form of proxy intend
to vote thereon in accordance with their best judgment, and the
discretionary authority to do so is included in the proxy.
Annual Report on
Form 10-K
We will provide upon request and without charge to each
stockholder receiving this Proxy Statement a copy of
SunComs Annual Report on
Form 10-K for the
fiscal year ended December 31, 2005, including the
financial statements, assessment of internal controls over
financial reporting and financial statement schedule information
included therein. If you share an address with another
stockholder and would like to receive a separate proxy statement
now or in the future, please contact the Corporate Secretary,
SunCom Wireless Holdings, Inc., 1100 Cassatt Road, Berwyn,
Pennsylvania 19312 (610) 651-5900.
Submission of Stockholder Proposals
It is anticipated that SunComs 2007 Annual Meeting of
Stockholders will be held in May 2007. Any stockholders who
intend to present proposals at the 2007 Annual Meeting of
Stockholders and who wish to have such proposals included in
SunComs Proxy Statement for the 2007 Annual Meeting must
ensure that such proposals are received by the Corporate
Secretary of SunCom not later than December 1, 2006. Such
proposals must meet the requirements set forth in the rules and
regulations of the Securities and Exchange Commission in order
to be eligible for inclusion in SunComs 2007 proxy
materials.
Any stockholder that wishes to present a proposal, other than
through inclusion in the proxy materials, or a director nominee
at the 2007 Annual Meeting must comply with the procedural
requirements set forth in SunComs Second Amended and
Restated Bylaws. The Second Amended and Restated Bylaws of
SunCom generally require notice of (i) any proposal to be
presented by any stockholder or (ii) the name of any person
to be nominated by any stockholder for election as a director of
SunCom at a meeting of the stockholders to be delivered to or
mailed and received by the Corporate Secretary of SunCom at
SunComs Corporate Headquarters. Notice must be received by
the Corporate Secretary not less than 60 or more than
90 days prior to the date of the annual meeting. Any
stockholder wishing to submit a proposal at the 2007 Annual
Meeting should contact the Corporate Secretary of SunCom after
March 1,
23
2007 to obtain the actual meeting date and proposal deadlines.
The notice must include the following information as applicable
to the proposal or nominee:
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be a stockholder of record on the date the notice provided for
below is given and on the record date for the determination of
stockholders entitled to vote at the 2007 Annual Meeting; |
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provide timely written notice to the Corporate Secretary of
SunCom that is delivered to or mailed and received at
SunComs principal executive offices not less than 60 or
more than 90 days prior to the date of the annual meeting; |
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include in its written notice the following information
regarding each proposed director nominee: name; age; business
address; residence address; principal occupation or employment;
class or series and number of shares of SunCom capital stock
owned beneficially or of record; and any other information
relating to the nominee required to be disclosed in a proxy
statement or other required filings for election of directors
pursuant to Section 14 of the Securities Exchange Act of
1934 and the rules and regulations promulgated thereunder; |
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include in its written notice the following information
regarding the stockholder: name; record address; class or series
and number of shares of SunComs capital stock owned
beneficially or of record; description of all arrangements or
understandings between or among the stockholder and each
proposed director nominee; a representation that the stockholder
intends to appear in person or by proxy at the meeting to
nominate each proposed director nominee; and any other
information relating to the stockholder required to be disclosed
in a proxy statement or other required filings for election of
directors pursuant to Section 14 of the Securities Exchange
Act of 1934 and the rules and regulations promulgated
thereunder; and |
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accompany the written notice above with a written consent of the
proposed director nominee to be named as a nominee and to serve
as a director if elected. |
Accordingly, failure by a stockholder to act in compliance with
the notice provisions will mean that the stockholder will not be
able to nominate directors or propose new business.
Cost of Solicitation
All expenses incurred in connection with the solicitation of
this proxy, including the charges of brokerage houses and other
custodians, nominees or fiduciaries for forwarding documents to
stockholders, will be paid by SunCom.
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By Order of the Board of Directors, |
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Charles H.N. Kallenbach |
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Corporate Secretary |
Berwyn, Pennsylvania
April 3, 2006
24
Appendix A
SUNCOM WIRELESS HOLDINGS, INC.
C/O EQUISERVE TRUST COMPANY, N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL
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Please mark
votes as in
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this example |
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1.
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To elect three Class I directors
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Nominees: |
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(01) Scott I. Anderson, (02) Arnold L. Chavkin and (03) Arnold Sheiffer |
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FOR
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WITHHELD |
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ALL
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FROM ALL |
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NOMINEES
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NOMINEES |
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For all nominees except as noted above |
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FOR
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AGAINST
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ABSTAIN |
2.
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To approve the amendment of the SunCom Wireless Holdings, Inc. Amended and Restated
Stock and Incentive Plan to expand the class of eligible participants to include
non-employee independent contractors, consultants and advisors.
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3.
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To ratify of the appointment of PricewaterhouseCoopers LLP as the companys
independent registered public accounting firm for 2006.
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Any other matters which may properly come before the meeting or any adjournment or postponement
thereof in the discretion of the proxy holder.
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Mark here if you plan to attend the meeting
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Mark here for address change and note at left
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Note: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney,
executor, administrator, trustee, guardian or officer, please give full title under signature.
Signature:
Date:
Signature:
Date:
A-1
DETACH HERE
PROXY
SUNCOM WIRELESS HOLDINGS, INC.
1100 Cassatt Road
Berwyn, PA 19312
Proxy for Annual Meeting of Stockholders
Solicited on Behalf of the Board of Directors
The undersigned stockholder of SunCom Wireless Holdings, Inc., a Delaware corporation (the
Company), hereby appoints Michael E. Kalogris and Charles H.N. Kallenbach, or either of them,
with full power of substitution in each of them, to cast on behalf of the undersigned all votes
that the undersigned is entitled to cast at the Annual Meeting of Stockholders of the Company to be
held on Wednesday, May 3, 2006, at 8:30 a.m., local time, and any adjournment or postponement
thereof, and otherwise to represent the undersigned at the meeting with all powers possessed by the
undersigned if personally present at the meeting. The undersigned hereby acknowledges receipt of
the Notice of Annual Meeting of Stockholders and of the accompanying Proxy Statement and revokes
any proxy heretofore given with respect to such meeting.
The votes entitled to be cast by the undersigned will be cast as instructed on the reverse side. If
this proxy is executed but no instruction is given, the votes entitled to be cast by the
undersigned will be cast FOR each of the nominees for Class I Director, FOR the amendment of
the SunCom Wireless Holdings, Inc. Amended and Restated Stock and Incentive Plan and FOR
ratification of the PricewaterhouseCoopers LLP as the companys independent registered public accounting firm for 2006,
respectively, and in the discretion of the proxy holder on any other matter that may properly come
before the meeting or any adjournment or postponement thereof.
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SEE REVERSE
SIDE
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CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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SEE REVERSE
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A-2
Appendix B
Charter of the Audit Committee of the Board of Directors
The primary purposes of the Audit Committee (the Committee) are:
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to assist the Board of Directors (the Board) of SunCom
Wireless Holdings, Inc. (the Company) in fulfilling its oversight of |
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the integrity of the Companys financial statements, |
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the Companys compliance with legal and regulatory requirements, |
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the qualifications and independence of any
registered public accounting firm engaged for the purpose of preparing
or issuing an audit report or performing other audit, review or attest
services for the Company (the Independent Auditor), and |
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the performance of the Companys internal audit
function, internal controls over financial reporting and the
Independent Auditor; and |
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to prepare the Committee report that the Securities and
Exchange Commission (SEC) requires to be included in the Companys annual
proxy statement. |
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In carrying out its oversight responsibilities, the Committee itself does not prepare
financial statements or plan or perform internal or external audits, and it is not the duty
or responsibility of the Committee or its members to serve as auditors or to certify or
provide other special or professional assurances with respect to the Companys financial
statements. The Committee will fulfill its purposes by carrying out the activities
enumerated in Section IV of this Charter. |
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COMPOSITION AND STRUCTURE |
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The membership of the Committee shall consist of three or more directors, who, in the
business judgment of the Board, are financially literate, including at least one member
with, in the business judgment of the Board, accounting or related financial management
expertise. Each member of the Committee shall be able to read and understand fundamental
financial statements, including balance sheets, income statements and cash flow statements. |
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Each member of the Committee shall meet the independence requirements for serving on
audit committees set forth in the Corporate Governance Rules of the New York Stock Exchange
and any applicable rules of the SEC (including Rule 10A-3). No member shall be an
affiliated person of the Company or any subsidiary of the Company. In addition, no member
shall have any other material relationship with the Company, as affirmatively determined by
the Board in its business judgment, and each member shall be free of any relationship that,
in the business judgment of the Board, would interfere with his or her individual exercise
of independent judgment. If a member of this Committee serves simultaneously on the audit
committees of more than three public companies (inclusive of service on this Committee), the
Board must determine that such simultaneous service does not impair the ability of such
member to serve effectively on this Committee. |
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The members of the Committee shall be elected by the Board at any annual, regular or
special meeting of the Board and shall serve on the Committee until they resign or their
successors shall be duly elected and qualified. Unless a Chair is elected by the Board, the
members of the Committee may designate a Chair by majority vote of the full Committee
membership. The Committee may form and delegate authority to subcommittees when
appropriate. |
B-1
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No member of the Committee shall accept, directly or indirectly, any consulting,
advisory or other compensatory fee from the Company or its subsidiaries other than in his or
her capacity as a member of the Board, of the Committee or of any other committee of the
Board, or in the form of fixed amounts of compensation under a retirement plan (including
deferred compensation) for prior service with the Company if such amounts are not contingent
in any way on continued service. |
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III. |
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MEETINGS |
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The Committee shall meet at least four times per year on a quarterly basis, or more
frequently as circumstances dictate. As part of its job to foster open communication, the
Committee shall meet at least annually with management, the manager of the internal auditing
department and the Independent Auditor, in separate executive sessions, to discuss privately
the Companys performance and practices. At all meetings of the Committee the presence of
members constituting a majority of the total membership shall constitute a quorum, and the
act of a majority of the members present at any meeting at which a quorum is present shall
be the act of the Committee. |
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RESPONSIBILITIES AND DUTIES |
To fulfill its responsibilities and duties the Committee shall:
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Have the direct responsibility for the appointment, compensation, retention
and oversight of the work (including resolution of disagreements between management and
the Independent Auditor regarding financial reporting) of the Independent Auditor, and
be the governance body to which any Independent Auditor must report directly. |
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Comply with applicable pre-approval requirements for audit services and
permitted non-audit services provided by the Independent Auditor, as required by
Section 10A of the Securities Exchange Act of 1934, as amended (the Exchange Act). |
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Assure regular rotation of the lead audit partner and compliance with the
conflicts of interest requirements of Section 10A of the Exchange Act. |
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Set clear hiring policies for employees or former employees of the Independent
Auditor, taking into account the pressures that may exist for auditors consciously or
subconsciously seeking a job with the Company. |
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Review (a) major issues regarding accounting principles and financial
statement presentations, including any significant changes in the Companys selection
or application of accounting principles, and major issues as to the adequacy and
effectiveness of the Companys internal controls over financial reporting and any
special audit steps adopted in light of material control deficiencies, (b) analyses
prepared by management and/or the Independent Auditor setting forth significant
financial reporting issues and judgments made in connection with the preparation of the
financial statements, including analyses of the effects of alternative GAAP methods on
the financial statements, (c) the effect of regulatory and accounting initiatives, as
well as off-balance sheet structures, on the financial statements of the Company, and
(d) other material written communications between the Independent Auditor and
management. |
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Regularly review with the Independent Auditor (a) the Companys internal audit
function, (b) internal controls over financial reporting, (c) any audit problems or
difficulties encountered in the course of the audit work, including any restrictions on
the scope of the Independent Auditors activities or on access to requested information
and any significant disagreements with management, and the managements response to
each and (d) the responsibilities, budget and staffing of the Companys internal audit
function. |
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At least annually, obtain and review a report by the Independent Auditor
describing (a) the firms internal quality-control procedures, (b) any material issues
raised by the most recent internal |
B-2
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quality-control review, or peer review, of the firm, or by any inquiry or
investigation by governmental or professional authorities, within the preceding five
years, respecting one or more independent audits carried out by the firm, and any
steps taken to deal with any such issues and (c) (to assess the auditors
independence) all relationships between the Independent Auditor and the Company; and
after reviewing such report and the Independent Auditors work throughout the year,
evaluate the Independent Auditors qualifications, performance and independence. In
connection with its review of the Independent Auditors report, the Committee should
(w) review and evaluate the lead partner of the Independent Auditor, (x) consider
the opinions of management and the Companys internal auditors, (y) discuss
whether, in order to assure continued auditor independence, there should be regular
rotation of the audit firm itself, and (z) present the Committees conclusions with
respect to the Independent Auditor to the Board. |
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Review any reports required to be delivered to the Committee by any
Independent Auditor pursuant to Section 10A of the Exchange Act. |
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Discuss guidelines and policies with respect to risk assessment and risk
management that apply to the way the Companys Chief Executive Officer and senior
management assess and manage the Companys exposure to risk, and discuss the Companys
major financial risk exposures and the steps management has undertaken to monitor and
control such exposure. |
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Report regularly to the Board and review with the Board any issues that arise
with respect to the quality or integrity of the Companys financial statements, the
Companys compliance with legal or regulatory requirements, the performance and
independence of the Independent Auditor or the performance of the internal audit
function. |
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Obtain the written disclosures and letter from the Independent Auditor
required by Independence Standards Board Standard No. 1, as may be modified or
supplemented, and discuss with the Independent Auditor the Independent Auditors
independence. |
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Meet to review and discuss the Companys annual audited financial statements
and quarterly financial statements with management and the Independent Auditor
(including reviewing the Companys specific disclosures under Managements Discussion
and Analysis of Financial Condition and Results of Operations). |
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Recommend to the Board whether, based on the Committees review of the
audited financial statements and its discussions with the management and the
Independent Auditor, such audited financial statements should be included in the
Companys annual report on Form 10-K. |
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Discuss with the Independent Auditor the matters required to be discussed by
Statement of Auditing Standards No. 61, as may be modified or supplemented. |
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Discuss generally the types of information to be disclosed and the type of
presentation to be made regarding earnings releases (paying particular attention to any
use of pro forma, or adjusted non-GAAP, information), as well as financial
information and earnings guidance provided to analysts and rating agencies; provided
that the Committee need not discuss in advance each earnings release or each instance
in which the Company may provide earnings guidance. |
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Prepare the Committee report that the SEC requires to be included in the
Companys annual proxy statement. |
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Establish procedures for (a) the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting controls
or auditing matters and (b) the confidential, anonymous submission by Company employees
of concerns regarding questionable accounting or auditing matters. |
B-3
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Grant, in its sole discretion, waivers to the Companys Code of Ethics for
Senior Financial Officers for the Companys directors and officers. |
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Engage independent counsel and other advisers, as the Committee determines
necessary to carry out its duties. |
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Determine the level of appropriate funding for the Committee to pay (a)
compensation to any registered accounting firm engaged for the purpose of preparing or
issuing an audit report or performing other audit, review or attest services for the
Company, (b) compensation to any advisers employed by the Committee and (c) ordinary
administrative expenses of the Committee that are necessary or appropriate to carry out
its duties; and communicate such funding amount to the Board as necessary for funding
purposes. |
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Investigate, review and report to the Board the propriety and ethical
implications of any transactions, as reported or disclosed to the Committee by the
Independent Auditor, employees, officers, members of the Board or otherwise, between
(a) the Company and (b) any employee, officer or member of the Board of the Company, or
affiliates of the foregoing. |
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Annually review and reassess the adequacy of this Charter and make
recommendations to the Board, as conditions dictate, to update this Charter. |
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Perform any other activities consistent with this Charter, the Companys
Bylaws and governing law as the Board may delegate to the Committee. |
V. |
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PERFORMANCE EVALUATION |
The Committee shall complete an annual evaluation of the Committees performance.
VI. |
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DISCLOSURE OF CHARTER |
This Charter will be made available on the Companys website.
B-4
Appendix C
SUNCOM WIRELESS HOLDINGS, INC.
STOCK AND INCENTIVE PLAN
(AS AMENDED AND RESTATED)
(Formerly, the Triton PCS Holdings, Inc. Stock and Incentive Plan)
The purpose of this SunCom Wireless Holdings, Inc. Stock and Incentive Plan (as it may be
amended from time to time, the Plan) is to provide a means through which SunCom Wireless
Holdings, Inc., a Delaware corporation (SunCom)
(formerly, Triton PCS Holdings, Inc. (Triton)),
and SunComs subsidiaries (SunCom and its subsidiaries also being referred to herein collectively
as the Company unless the context otherwise requires) may attract high caliber Associates to
enter the employ or service of the Company and to provide a means whereby those individuals upon
whom the responsibilities of the successful administration and management of the Company rest, and
whose present and potential contributions to the welfare of the Company are of importance, may
acquire and maintain stock ownership, thereby strengthening their concern for the welfare of the
Company and their desire to remain in its employ or service. A further purpose of the Plan is to
provide such individuals with additional incentive and reward opportunities designed to enhance the
profitable growth of the Company.
This Plan is an amendment and restatement of the Triton PCS Holdings, Inc. Stock and Incentive
Plan (as previously amended and restated effective as of February 26, 2004) and the Triton PCS
Holdings, Inc. 1999 Stock and Incentive Plan (the 1999 Plan). Unless the Committee determines
otherwise, any awards issued under the Plan, the 1999 Plan or any predecessor plan or arrangement,
including the terms and conditions of any letter agreement previously issued to any participant
under any such plan or arrangement, shall continue in force and effect under the terms of the Plan
as amended and restated herein.
In addition to other terms defined herein, the following definitions shall be applicable
throughout the Plan and shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words include, includes and including shall be deemed to be followed
by the phrase without limitation.
C-1
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(a) |
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Associate means any individual who (i) is in an employment relationship with
SunCom or any parent or subsidiary corporation (as defined in Code Section 424) of
SunCom, or (ii) is an independent contractor, consultant or advisor providing
compensatory services to SunCom or any parent or subsidiary corporation. |
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(b) |
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Award means a Restricted Stock Award granted to Holders under the Plan. |
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(c) |
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Award Agreement means any written agreement, instrument or document
evidencing the terms and conditions of an Award. Each Award Agreement shall be subject
to the terms and conditions of the Plan. |
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(d) |
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Board means the Board of Directors of SunCom. |
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(e) |
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Change of Control means, except as may be otherwise required pursuant to Code
Section 409A or as otherwise provided under any Award, any transaction or event, or
series of transactions or events, whether voluntary or involuntary, that results in, or
as a consequence of which, any of the following events shall occur: (i) any person (as
defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) shall acquire,
directly or indirectly, beneficial ownership (as defined in Rule 13d-3 of the 1934 Act)
of more than 50% of the voting stock of SunCom, (ii) any sale of all or substantially
all of the assets of SunCom, or (iii) a proxy contest for the election of directors of
SunCom results in the individuals constituting the Board immediately prior to the
initiation of such proxy contest ceasing to constitute a majority of the Board upon
conclusion of such proxy contest. |
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(f) |
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Code means the Internal Revenue Code of 1986, as amended from time to time.
References in the Plan to any section of the Code shall be deemed to include any
amendments or successor provisions to such section and any rules, regulations or other
guidance issued under such section. |
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(g) |
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Committee means the Compensation Committee of the Board or, if no such
committee shall exist, any members of the Board who are selected by the Board to
administer the Plan in accordance with Section 4. |
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(h) |
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Common Stock means the Class A Common Stock of SunCom or, in the event of an
adjustment pursuant to Section 8(a), then such stock as shall have been awarded or
substituted pursuant to such adjustment. |
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(i) |
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Company has the meaning set forth in Section 1. |
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(j) |
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Deferred Shares means shares of Common Stock (and dividends, if any, thereon)
subject to a Restricted Stock Award, the receipt of which shares (and dividends) is
deferred in accordance with Section 7(e) herein. |
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(k) |
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Eligible Holder means a Holder eligible to defer receipt of shares of Common
Stock subject to a Restricted Stock Award in accordance with Section 7(e) herein. |
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(l) |
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Fair Market Value means the market price of the Common Stock, determined by
such methods or procedures as shall be established by the Committee from time to time;
provided that (i) in the event no such procedure has been established, the Fair Market
Value shall be the closing price on the national securities exchange or market on which
the Common Stock is traded on the date Fair Market Value is being determined, or if
there are no transactions on that date, then the closing price for the preceding date
upon which any such transactions occurred; and (ii) to the extent, if any, required by
Code Section 409A, Fair Market Value shall be determined in accordance with Section
409A. Whenever possible, the determination of Fair Market Value by the Committee shall
be based on prices reported in the Eastern Edition of the Wall Street Journal. Such
determination shall be conclusive and binding on all persons. |
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(m) |
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Holder means an Associate who has been granted an Award. |
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(n) |
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1934 Act means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereby. |
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(o) |
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Nonqualified Plan means the SunCom Wireless Holdings, Inc. Nonqualified
Deferred Compensation Plan, as it may be amended, and/or any other applicable
nonqualified deferred compensation plan of the Company designated by the Company as
being treated as a nonqualified deferred compensation plan for purposes of the Plan. |
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(p) |
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Plan has the meaning set forth in Section 1. |
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(q) |
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Restricted Stock Award means an Award granted under the Plan. |
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(r) |
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Restriction Period means the period of time during which a Restricted Stock
Award is subject to restrictions on transfer and forfeiture, as determined by the
Committee in its sole discretion. |
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(s) |
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Rule 16b-3 means Securities and Exchange Commission Rule 16b-3 promulgated
under the 1934 Act, as such may be amended from time to time, and any successor rule,
regulation, or statute fulfilling the same or similar function. |
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(t) |
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SunCom means, as defined in Section 1, SunCom Wireless Holdings, Inc., a
Delaware corporation, and includes references to Triton PCS Holdings, Inc. (as defined
in Section 1, Triton), the former corporate name of SunCom. |
III. |
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EFFECTIVE DATE AND DURATION |
This Plan as amended and restated became effective as of February 26, 2004, following adoption
by the Board and approval by the stockholders of SunCom. The Plan shall be further amended and
restated effective as of May 3, 2006, subject to approval of the amendment and restatement of the
Plan by the stockholders of SunCom. No Awards shall be issued under this Plan after February 26,
2014 or upon the earlier termination of the Plan by the Board. Except as otherwise provided in
Section 9 herein, the Plan shall remain in effect until all restrictions imposed upon Restricted
Stock Awards have been eliminated or such Awards have been forfeited.
C-3
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(a) |
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Composition of Committee. This Plan shall be administered by the Committee.
Unless otherwise determined by the Board, the Committee shall include two or more
members of the Board, each of whom is, to the extent provided herein, both an outside
director, within the meaning of Code Section 162(m), and a non-employee director
within the meaning of Rule 16b-3. To the extent that actions of the Committee are
intended to satisfy the requirements of Rule 16b-3, actions of the Committee shall be
considered effective provided such actions receive the prior approval of the Committee
when comprised solely by two or more members, each of whom is a non-employee director
within the meaning of such Rule 16b-3, or such action is otherwise taken in accordance
with Rule 16b-3. To the extent that actions of the Committee are intended to satisfy
the requirements of Code Section 162(m), actions of the Committee shall be considered
effective provided such actions are approved solely by two or more members of the
Committee, each of whom is an outside director within the meaning of such Code
Section 162(m), or such action is otherwise taken in accordance with Code Section
162(m). References to the Committee include the Board if it is acting in an
administrative capacity with respect to the Plan. |
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(b) |
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Powers. Except as may be otherwise provided by the Board, and subject to the
express provisions of the Plan, the Committee shall have authority, in its sole
discretion, to take the following actions: |
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1. |
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to select and designate Holders; |
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2. |
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to determine the number of Awards to be granted, the number
of shares of Common Stock to which an Award will relate, the terms and conditions
of any Award granted under the Plan (including any restriction or condition,
any schedule for lapse of restrictions or conditions relating to
transferability or forfeiture or vesting of an Award, and waivers or
accelerations (subject to any restrictions imposed under Code Section 409A)
thereof, based in each case or such considerations as the Committee shall
determine), and all other matters to be determined in connection with an Award; |
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3. |
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to determine whether, to what extent, and under what
circumstances an Award may be settled or cancelled, forfeited or surrendered; |
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4. |
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to prescribe the form of each Award Agreement, which need not
be identical for each Holder; |
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5. |
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to adopt, amend, suspend, waive and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan; |
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6. |
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to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any Award,
rules and regulations, Award Agreement or other instrument hereunder; |
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7. |
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to make all other decisions and determinations as may be
required under the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan; |
C-4
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8. |
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to determine in an Award Agreement that a Holders rights,
payments and/or benefits with respect to an Award (including any shares issued
or issuable and/or cash paid or payable with respect to an Award) shall be
subject to offset, reduction, cancellation, forfeiture or recoupment upon the
occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award (such events to include
termination of employment for cause, violation of policies of the Company,
breach of non-solicitation, noncompetition, confidentiality or other
restrictive covenants that may apply to the Holder, violations of laws, or
other conduct by the Holder that is determined by the Committee to be
detrimental to the business or reputation of the Company); and |
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9. |
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to establish terms and conditions of Awards (including the
establishment of subplans) as the Committee determines to be necessary or
appropriate to conform to the applicable requirements or practices of
jurisdictions outside of the United States. |
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(c) |
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Manner of Exercise of Committee Authority. In making such determinations, the
Committee shall take into account the nature of the services rendered by the respective
Associates, their present and potential contribution to the Companys success, and such
other factors as the Committee shall deem relevant. Subject to any requirements
imposed by applicable law, the Committee may delegate to officers of the Company the
authority to act on behalf of the Committee with respect to any matter, right,
obligation, or election that is the responsibility of or that is allocated to the
Committee herein, except for grants of Awards to (i) covered employees, under Code
Section 162(m) (to the extent, if any, that the Company intends to comply with the
provisions of Code Section 162(m)) and (ii) individuals subject to Section 16 of the
1934 Act. In addition to action by meeting in accordance with applicable laws, any
action of the Board or the Committee with respect to the Plan may be taken by a written
instrument signed by all of the members of the Board or Committee, as appropriate, and
any such action so taken by written consent shall be as fully effective as if it had
been taken by a majority of the members at a meeting duly held and called. The
determinations of the Committee on the matters referred to in this Section 4 shall be
conclusive. |
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(d) |
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Limitation of Liability. To the extent permitted by applicable law, each
member of the Board or Committee shall be entitled, in good faith, to rely or act upon
any report or other information furnished to him by any officer or other employee of
the Company, the Companys independent certified public accountants, legal counsel or
any executive compensation consultant or other professional retained by the Company to
assist in the administration of the Plan. No member of the Board or Committee, nor any
officer or employee of the Company acting on behalf of the Board or Committee, shall be
personally liable for any action, determination, or interpretation taken or made in
good faith with respect to the Plan, and all members of the Board or Committee and any
officer or employee of the Company acting on its or their behalf, shall, to the extent
permitted by law, be fully indemnified and protected by the Company with respect to any
such action, determination, or interpretation. |
V. |
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SHARES OF STOCK SUBJECT TO THE PLAN; AWARD LIMITATIONS |
The Committee may from time to time grant Awards to one or more Associates determined by it to
be eligible for participation in the Plan in accordance with the provisions of Section 6. Subject
to adjustments as provided in Section 8, the total number of shares of Common Stock available for
issuance under the Plan shall be 7,954,495 shares. Shares of Common Stock shall be deemed to have
been issued under the Plan only to the extent actually issued and delivered pursuant to an Award.
Notwithstanding the foregoing, to the extent that an Award lapses, the rights of its Holder
terminate, an Award is paid in cash or is settled in a manner such that all or some of the shares
of Common Stock covered by the Award are not issued, any shares of Common Stock subject to such
Award shall again be available for the grant of an Award.
C-5
Awards may be granted only to individuals who, at the time of grant, are Associates. Awards
may not be granted to any individual who immediately after such grant would become an owner,
directly or indirectly, of more than 10% of the total combined voting power of all classes of
capital stock of SunCom. An Award may be granted on more than one occasion to the same individual.
C-6
VII. |
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TERMS OF RESTRICTED STOCK AWARDS |
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(a) |
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Forfeiture Restrictions to be Established by the Committee. Shares of Common
Stock that are the subject of a Restricted Stock Award shall be subject to restrictions
on disposition by the Holder and an obligation of the Holder to forfeit and surrender
the shares to the Company under certain circumstances (the Forfeiture Restrictions").
An award may provide for immediate vesting. The Forfeiture Restrictions shall be
determined by the Committee in its sole discretion, and, without limiting the
generality of the foregoing, the Committee may provide that the Forfeiture Restrictions
shall lapse upon (i) the attainment of one or more performance measures established by
the Committee; (ii) the Holders continued employment with or service to the Company
for a certain period of time; (iii) the occurrence of any event or the satisfaction of
any other condition specified by the Committee in its sole discretion, or (iv) a
combination of any of the foregoing. The performance measures may be subject to
adjustment for specified significant extraordinary items or events, and may be
absolute, relative to one or more other companies, or relative to one or more indexes,
and may be contingent upon future performance of the Company during the performance
period. Each Restricted Stock Award may have different Forfeiture Restrictions, in the
discretion of the Committee. |
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(b) |
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Other Terms and Conditions. Shares of Common Stock awarded pursuant to a
Restricted Stock Award shall be represented by one or more stock certificates
registered in the name of the Holder of such Restricted Stock Award. The Holder shall
have the right to receive dividends during the Restriction Period, to vote the shares
of Common Stock subject thereto, and to enjoy all other stockholder rights, except that
(i) the Holder shall not be entitled to delivery of the stock certificate(s)
representing unvested shares of Common Stock (and, unless the Committee determines
otherwise or as otherwise required by applicable law, distribution of dividends, if
any, declared on unvested shares of Common Stock) unless and until the Restriction
Period with respect to such shares shall have expired and the Forfeiture Restrictions
shall have lapsed (in which case delivery of such shares and distribution of such
dividends shall be made as soon as practicable and otherwise in accordance with the
terms of the Plan and Award Agreement), (ii) the Company shall (or shall designate an
agent or representative to) retain custody of the stock certificate(s) during the
Restriction Period, (iii) the Holder may not sell, transfer, pledge, exchange,
hypothecate, or otherwise dispose of the shares during the Restriction Period, and (iv)
a breach of the terms and conditions established by the Committee pursuant to the
Restricted Stock Award shall cause a forfeiture of the Restricted Stock Award and the
underlying shares subject to the Award. At the time of grant of an Award, the
Committee may, in its sole discretion, prescribe additional terms, conditions, or
restrictions relating to Restricted Stock Awards, including rules pertaining to the
termination of employment or service (by retirement, disability, death, or otherwise)
or as a Holder prior to expiration of the Restriction Period. Such additional terms,
conditions, or restrictions shall be set forth in an Award Agreement made in
conjunction with the Restricted Stock Award. Such Award Agreement may in the
Committees discretion also include provisions relating to (among other things) (i)
subject to the provisions hereof permitting accelerated vesting on a Change of Control,
vesting of Awards, (ii) tax matters (including provisions (x) covering any applicable
Associate wage or other withholding requirement, or (y) requiring additional gross-up
payments to Holders to meet any excise taxes or other additional income tax liability
imposed as a result of a Change of Control payment resulting from the operation of the
Plan or of such Award Agreement, and (iii) any other matters not inconsistent with the
terms and provisions of the Plan that the Committee shall in its sole discretion
determine. |
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(c) |
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Payment for Restricted Stock. A Holder shall not be required to make any
payment for Common Stock received pursuant to a Restricted Stock Award, except to the
extent otherwise required by applicable law or the Committee. |
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(d) |
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Agreements. At the time any Award is made under this Section 7, the Company
and the Holder shall enter into an Award Agreement setting forth each of the matters
contemplated hereby and such other matters as the Committee may determine to be
appropriate. The terms and provisions of the respective Award Agreements need not be
identical. |
C-7
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(e) |
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Deferral of Receipt. Notwithstanding anything to the contrary in this Plan or
an Award Agreement, a Holder designated on the payroll of the Company as Senior Vice
President or above (an Eligible Holder) may elect to defer the receipt of all (or,
with respect to deferrals made before May 3, 2006, all or a portion) of the shares of
Common Stock (and dividends, if any, thereon) subject to a Restricted Stock Award
(such shares and dividends thereon as to which receipt is deferred being referred to
herein as Deferred Shares). The terms of deferral of any such Deferred Shares,
including the terms of any elections (or subsequent elections) relating to such
deferrals and the terms applicable to distribution of such Deferred Shares, shall be
subject to and in accordance with the terms of the Nonqualified Plan, the terms of
which are, to the extent necessary or appropriate, incorporated by reference herein.
Any election to defer the receipt of shares of Common Stock may be limited as necessary
to satisfy applicable employment taxes or withholding requirements under applicable
law. The eventual payment of the Deferred Shares of Common Stock shall not be secured
in any way and shall be a general obligation of the Company. The Committee may hold
the Deferred Shares in a grantor trust established by the Company for purposes of
meeting its obligations with respect to this Plan or the Nonqualified Plan. Any
Deferred Shares deferred pursuant to this Section 7(e) shall be credited for the
benefit of any Eligible Holder pursuant to the terms of the Nonqualified Plan. During
the deferral period, the Deferred Shares of Common Stock shall not be available for
issuance for purposes of Section 5 of the Plan. |
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(f) |
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Effect of Termination of Employment or Service; Forfeiture of Awards. Unless
the Committee determines otherwise (and subject to any requirements imposed by Code
Section 409A), if the employment or service of a Holder terminates for any reason and
all or any part of an Award has not vested or been earned pursuant to the terms of the
Plan and the Award Agreement, such Award, to the extent not then vested or earned,
shall be forfeited immediately upon such termination of employment or service and the
Holder shall have no further rights with respect to the Award or any shares of Common
Stock or other benefit related to the Award. |
C-8
VIII. |
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ANTI-DILUTION; CHANGE OF CONTROL |
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(a) |
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Anti-Dilution. Subject to any required action by SunComs stockholders, upon
the occurrence of any event that affects the Common Stock in such a way that an
adjustment of outstanding Awards is appropriate in order to prevent the dilution or
enlargement of rights under the Awards (including any extraordinary dividend or other
distribution (whether in cash or in kind), recapitalization, stock split, reverse
split, reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event), the Committee shall
make appropriate equitable adjustments, which may include adjustments to any or all of
the number and kind of shares of stock (or other securities) that may thereafter be
issued in connection with such outstanding Awards and shall also make appropriate
equitable adjustments to the number and kind of shares of stock (or other securities)
authorized by or to be granted under the Plan. Further, the Committee, in its sole
discretion, may make appropriate equitable adjustments, including those described in
the immediately preceding sentence, in any other circumstances under which the
Committee deems such adjustments to be desirable. |
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(b) |
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Change of Control. In the event of a Change of Control, the Committee, in its
discretion, may (subject to any requirements imposed by Code Section 409A) determine
that any, all or none of the outstanding Awards shall immediately vest. The Committee,
in its discretion may also determine (subject to any restrictions that may be imposed
by the Committee or any restrictions imposed under Code Section 409A) that upon the
occurrence of a Change of Control, any, all or none of the Awards outstanding hereunder
shall terminate within a specified number of days after notice to the Holder, and upon
any such termination such Holder shall receive, with respect to each share of Common
Stock subject to such Award, cash in an amount equal to the excess of (i) the higher of
(x) the Fair Market Value of such share of Common Stock immediately prior to the
occurrence of such Change of Control or (y) the value of the consideration to be
received in connection with such Change of Control for one share of Common Stock over
(ii) the purchase price per share, if applicable, of shares of Common Stock set forth
in such Award. The provisions contained in the preceding sentence shall be
inapplicable to an Award granted within six months before the occurrence of a Change of
Control if the Holder of such Award is subject to the reporting requirements of Section
16(a) of the 1934 Act, if applicable. If the consideration offered to stockholders of
SunCom in any transaction described in this Section 8 consists of anything other than
cash, the Committee shall determine the fair cash equivalent of the portion of the
consideration offered which is other than cash. The provisions contained in this
Section 8 shall not terminate any rights of the Holder to further payments pursuant to
any other agreement with the Company following a Change of Control. |
IX. |
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AMENDMENT AND TERMINATION |
Unless determined otherwise by the Board, the Committee may amend the Plan and any Award (and
its related Award Agreement) at any time, except as otherwise specifically provided in such Award
Agreement; provided that (a) no change in any Award theretofore granted may (except as may be
otherwise provided in Section 10(h)) be made that would impair the rights of the Holder of any
Award under the Plan without the consent of such Holder; and (b) the Committee may not, without
approval of the stockholders of SunCom, amend the Plan to (i) increase the maximum aggregate number
of shares of Common Stock that may be issued under the Plan, (ii) change the class of individuals
eligible to receive Awards under the Plan, or (iii) make any other amendment to the Plan if
stockholder approval is required under applicable law, rule or regulation. Subject to Section 3,
the Board, in its discretion (and except as may be otherwise required under Code Section 409A) may
suspend or terminate the Plan at any time.
C-9
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(a) |
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No Right to an Award. Neither the adoption of the Plan nor any action of the
Board or of the Committee shall be deemed to give an Associate any right to an Award
except as may be evidenced by a written instrument from the Company reflecting a grant
by the Company of an Award and setting forth the terms and conditions thereof. This
Plan shall be unfunded. The Company shall not be required to establish any special or
separate fund or to make any other segregation of funds or assets to assure the payment
of any Award. |
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(b) |
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No Employment or Service Rights Conferred. Nothing contained in the Plan shall
confer upon any Associate any right with respect to continuation of employment with or
service to the Company or interfere in any way with the right of the Company to
terminate his or her employment or service at any time (subject to the terms of any
written employment agreement, consulting agreement or similar agreement with such
Associate). |
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Other Laws; Withholding. The Company shall not be
obligated to issue any shares of Common Stock or provide any other benefit until there has been compliance
with such laws and regulations as the Company may deem applicable. Fractional shares
of Common Stock may be awarded. The Company shall have the right to deduct in
connection with all Awards any taxes required by law to be withheld and to require any
payments required to enable it to satisfy its withholding obligations and may establish
procedures (which may, in the Committees discretion, include share withholding
procedures) to satisfy such obligations. |
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Severability. Any provision of the Plan prohibited by the law of any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition without invalidating the remaining provisions hereof. |
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(e) |
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No Restriction on Corporate Action. Except as expressly set forth in Section
9, nothing contained in the Plan shall be construed to prevent the Company from taking
any corporate action that is deemed by the Company to be appropriate or in its best
interests, whether or not such action would have an adverse effect on the Plan or any
Award made under the Plan. No Associate, beneficiary, or other individual shall have
any claim against the Company as a result of any such action. |
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(f) |
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Restrictions on Transfer. An Award shall not be transferable or assignable
otherwise than (i) by will or the laws of descent and distribution, or (ii) with the
consent of the Committee. |
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(g) |
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Governing Law. This Plan shall be construed in accordance with the laws of the
State of Delaware, without regard to the principles of conflicts of laws, and in
accordance with applicable general laws of the United States. |
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(h) |
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Unilateral Authority of Committee to Modify Plan and Awards: Notwithstanding
the provisions of Section 9 herein, if an Award Agreement so provides, the Committee
shall have unilateral authority to amend the Plan, any Award and any Award Agreement
(without the consent of the Holder and without stockholder approval, unless such
stockholder approval is required by applicable law, rule or regulation) to the extent
necessary to comply with applicable laws, rules or regulations or changes to applicable
laws, rules or regulations (including Code Section 409A). |
C-10
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(i) |
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Compliance With Code Section 409A: Notwithstanding any other provision in the
Plan or an Award to the contrary, if and to the extent that Code Section 409A is deemed
to apply to the Plan or any Award granted under the Plan, it is the general intention
of the Company that the Plan and all such Awards shall, to the extent practicable,
comply with Code Section 409A, and the Plan and any such Award shall, to the extent
practicable, be construed in accordance therewith. Deferrals of shares other than
Deferred Shares issuable under the Plan in a manner that would cause Code Section 409A
to apply to such shares shall not be permitted unless such deferrals are in compliance
with Code Section 409A. Deferrals of Deferred Shares shall be made in accordance with
Section 7(e) of the Plan and the Nonqualified Plan. Without in any way limiting the
effect of the foregoing, in the event that Code Section 409A requires that any special
terms, provisions or conditions be included in the Plan or any Award, then such terms,
provisions and conditions shall, to the extent practicable, be deemed to be made a part
of the Plan or Award, as applicable. Further, in the event that the Plan or any Award
shall be deemed not to comply with Code Section 409A, then neither the Company, the
Board, the Committee, nor its or their officers, employees, designees or agents shall
be liable to any Holder or other person for actions, decisions or determinations made
in good faith. |
IN WITNESS WHEREOF, this SunCom Wireless Holdings, Inc. Stock and Incentive Plan, as amended
and restated effective as of May 3, 2006, is, by the authority of the Compensation Committee of the
Board of Directors of SunCom, pursuant to the delegation of authority by the Board of Directors of
SunCom, executed in behalf of the Company, effective as of the day of , 2006.
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SUNCOM WIRELESS HOLDINGS, INC. |
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By: |
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Name:
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Michael E. Kalogris |
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Title:
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Chief Executive Officer |
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ATTEST: |
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Charles H.N. Kallenbach |
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Secretary |
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C-11