Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment
No.__)
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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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission 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 Pursuant to § 240.14a-12
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ICO Global Communications (Holdings) Limited
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement if Other Than the Registrant)
Payment
of Filing Fee (Check the appropriate box)
¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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Title of
each class of securities to which transaction applies:
Aggregate
number of securities to which transaction applies:
Per unit
price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (Set forth the amount on which the filing fee is calculated and state
how it was determined):
Proposed
maximum aggregate value of transaction:
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Fee
paid previously with preliminary
materials.
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¨
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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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Form,
Schedule or Registration Statement No.:
ICO
GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED
11700
Plaza America Drive, Suite 1010
Reston,
Virginia 20190
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held On June 19, 2009
Dear
Stockholder:
You are cordially invited to attend the
2009 Annual Meeting of Stockholders (“Annual Meeting”) of ICO Global
Communications (Holdings) Limited, a Delaware corporation (“Company” or
“ICO”). The meeting will be held on Friday,
June 19, 2009 at 10:00
a.m. local time at the Hyatt Regency Hotel, 1800 Presidents Street,
Reston, Virginia 20190 for the following purposes:
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1.
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To
elect 6 directors to serve for the ensuing year and until their successors
are elected.
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2.
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To
ratify the selection by the Audit Committee of the Board of Directors of
the independent registered public accounting firm of Deloitte & Touche
LLP as independent auditor of the Company for its fiscal year ending
December 31, 2009.
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3.
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To
approve an amendment to the Company’s Restated Certificate of
Incorporation that, if filed with the Secretary of State of Delaware at
the discretion of the Board of Directors, would (a) effect a reverse
stock split of the Company’s common stock at a reverse split ratio of
between 1-for-5 and 1-for-20, as determined by the Board of Directors, and
(b) decrease the number of authorized shares of the Company’s common
stock on a basis proportional to the reverse split ratio approved by the
Board of Directors.
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4.
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To
conduct any other business properly brought before the
meeting.
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These items of business are more fully
described in the Proxy Statement accompanying this Notice. The
Company’s annual report for the year ended December 31, 2008 is also
enclosed.
The record date for the Annual Meeting
is April 20, 2009. Only stockholders of record at the close of business on that
date may vote at the meeting or any adjournment thereof.
Important Notice Regarding
Availability of Proxy Materials for the Stockholder Meeting to Be Held on
June 19,
2009. You may
access an electronic, searchable copy of the Proxy Statement and the Annual
Report to Stockholders for the year ended December 31, 2008 at:
http://bnymellon.mobular.net/bnymellon/icog.
By Order of the Board of
Directors
John L.
Flynn
Secretary
Reston,
Virginia
April
[ ], 2009
Table
of Contents
QUESTIONS
AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
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1
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Why
am I receiving these materials?
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1
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Who
can vote at the Annual Meeting?
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1
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What
am I voting on?
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2
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How
do I vote?
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2
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How
many votes do I have?
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3
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What
if I return a proxy card but do not make specific choices?
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3
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Who
is paying for this proxy solicitation?
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3
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What
does it mean if I receive more than one proxy card?
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3
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Can
I change my vote after submitting my proxy?
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3
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How
are votes counted?
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3
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What
are “broker non-votes”?
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4
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How
many votes are needed to approve each proposal?
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4
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What
is the quorum requirement?
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4
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How
can I find out the results of the voting at the Annual
Meeting?
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4
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HOUSEHOLDING
OF PROXY MATERIALS
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PROPOSAL
1
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5
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ELECTION
OF DIRECTORS
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5
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Nominees
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5
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INFORMATION
REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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7
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Independence
of the Board of Directors
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7
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Meetings
of the Board of Directors
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8
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Information
Regarding Committees of the Board of Directors
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Corporate
Governance
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PROPOSAL
2
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10
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RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
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10
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Principal
Accountant Fees And Services
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Pre-Approval
Policies and Procedures
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Report
of the Audit Committee
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11
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PROPOSAL
3
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12
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APPROVAL
OF AN AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION
THAT, IF FILED WITH THE SECRETARY OF STATE OF DELAWARE AT THE DISCRETION
OF THE BOARD OF DIRECTORS, WOULD (A) EFFECT A REVERSE STOCK SPLIT OF THE
COMPANY’S COMMON STOCK AT A REVERSE SPLIT RATIO OF BETWEEN 1-FOR-5 AND
1-FOR-20, AS DETERMINED BY THE BOARD OF DIRECTORS, AND (B) DECREASE THE
NUMBER OF AUTHORIZED SHARES OF THE COMPANY’S COMMON STOCK ON A BASIS
PROPORTIONAL TO THE REVERSE SPLIT RATIO APPROVED BY THE BOARD OF
DIRECTORS.
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12
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Reasons
For The Reverse Stock Split
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Possible
Disadvantages of the Reverse Stock Split
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Effects
of the Reverse Stock Split
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14 |
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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18
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EQUITY
COMPENSATION PLAN INFORMATION
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SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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EXECUTIVE
OFFICERS |
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EXECUTIVE
COMPENSATION
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Compensation
Discussion and Analysis
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Overview
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Compensation
Objectives
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Implementing
the Company’s Objectives
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Compensation
Elements
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Report
of the Compensation Committee
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Summary
Compensation Table
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Grants
of Plan-Based Awards
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30
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Outstanding
Equity Awards
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Option
Exercises and Stock Vested
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Pension
Benefits
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34
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Non-Qualified
Deferred Compensation
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34 |
Potential
Payments Upon Termination Or Change-In-Control
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34
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Director
Compensation
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Director
Equity Compensation
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
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Related-Person
Transactions Policy and Procedures
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Certain
Related-Person Transactions
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42
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44 |
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When
are stockholder proposals due for next year’s Annual
Meeting?
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44
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ICO
GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED
11700
Plaza America Drive, Suite 1010
Reston,
Virginia 20190
PROXY
STATEMENT
FOR
THE 2009 ANNUAL MEETING OF STOCKHOLDERS
June
19, 2009
QUESTIONS
AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why
am I receiving these materials?
We have
sent you this proxy statement and the enclosed proxy card because the Board of
Directors (“Board of Directors”) of ICO Global Communications (Holdings)
Limited (“Company”
or “ICO”) is soliciting your proxy to vote at the 2009 Annual Meeting of
Stockholders (“Annual Meeting”). You are invited to attend the Annual
Meeting to vote on the proposals described in this proxy
statement. However, you do not need to attend the meeting to vote
your shares. Instead, you may simply complete, sign and return the
enclosed proxy card, or follow the instructions below to submit your proxy over
the telephone or on the Internet.
The
Company intends to mail this proxy statement and accompanying proxy card on or
about April 30, 2009 to all stockholders of record entitled to vote at the
Annual Meeting.
Who
can vote at the Annual Meeting?
Only
stockholders of record at the close of business on April 20, 2009 (“Record
Date”) will be entitled to vote at the Annual Meeting. On this Record
Date, there were 154,407,549 shares of Class A common stock outstanding and
entitled to vote (one vote per share) and 53,660,000 shares of Class B common
stock outstanding and entitled to vote (ten votes per share).
Stockholders
of Record: Shares Registered in Your Name
If on the
Record Date your shares were registered directly in your name with ICO’s
transfer agent, BNY Mellon Shareowner Services (“BNY Mellon”), then you are a
stockholder of record. As a stockholder of record, you may vote in
person at the meeting or vote by proxy. Whether or not you plan to
attend the meeting, we urge you to fill out and return the enclosed proxy card
or vote by proxy over the telephone or on the Internet as instructed below to
ensure your vote is counted.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank
If on the
Record Date your
shares were held, not in your name, but rather in an account at a brokerage
firm, bank, dealer, or other similar organization, then you are the beneficial
owner of shares held in “street name” and these proxy materials are being
forwarded to you by that organization. The organization holding your
account is considered to be the stockholder of record for purposes of voting at
the Annual Meeting. As a beneficial owner, you have the right to
direct your broker or other agent regarding how to vote the shares in your
account. You are also invited to attend the Annual
Meeting. However, since you are not the stockholder of record, you may not
vote your shares in person at the meeting unless you request and obtain a valid
proxy from your broker or other agent.
What
am I voting on?
There are
three matters
scheduled for a vote:
· Election
of 6 directors;
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Ratification
of the selection of the independent registered public accounting firm of
Deloitte & Touche LLP as independent auditor of the Company for its
fiscal year ending December 31, 2009;
and
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Approval
of an amendment to the Company’s Restated Certificate of Incorporation
that, if filed with the Secretary of State of Delaware at the discretion
of the Board of Directors, would (a) effect a reverse stock split of
the Company’s common stock at a reverse split ratio of between 1-for-5 and
1-for-20, as determined by the Board of Directors, and (b) decrease
the number of authorized shares of the Company’s common stock on a basis
proportional to the reverse split ratio approved by the Board of
Directors.
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How
do I vote?
You may
either vote “For” all the nominees to the Board of Directors or you may
“Withhold” your vote for any nominee you specify. For each of the
other matters to be voted on, you may vote “For” or “Against” or abstain from
voting. The procedures for voting are fairly simple:
Stockholder
of Record: Shares Registered in Your Name
If you
are a stockholder of record, you may vote
in person at the Annual Meeting, vote by proxy using the enclosed proxy card,
vote by proxy over the telephone, or vote by proxy on the
Internet. Whether or not you plan to attend the meeting, we urge you
to vote by proxy to ensure your vote is counted. You may still attend
the meeting and vote in person even if you have already voted by
proxy.
· To
vote in person, come to the Annual Meeting and we will give you a ballot when
you arrive.
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To
vote using the proxy card, simply complete, sign and date the enclosed
proxy card and return it promptly in the envelope provided. If
you return your signed proxy card to us before the Annual Meeting, we will
vote your shares as you direct.
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To
vote over the telephone, dial toll-free 1-866-580-9477 using a touch-tone
phone and follow the recorded instructions. You will be asked
to provide the company number and control number from the enclosed proxy
card. Your
vote must be received by 11:59 PM Eastern Time on June 18, 2009, the day
prior to the Annual Meeting, to be
counted.
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To
vote on the Internet, go to http://www.eproxy.com/icog to complete an
electronic proxy card. You will be asked
to provide the company number and control number from the enclosed proxy
card. Your
vote must be received by 11:59 PM Eastern Time on June 18, 2009, the day
prior to the Annual Meeting, to be
counted.
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Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If you
are a beneficial owner of shares registered in the name of your broker, bank, or
other agent, you should have received a proxy card and voting instructions with
these proxy materials from that organization rather than from ICO. Simply complete and mail
the proxy card to ensure that your vote is counted. Alternatively, you may
vote by telephone or over the Internet as instructed by your broker or
bank. To vote in person at the Annual Meeting, you must obtain a valid
proxy from your broker, bank, or other agent. You may contact your
broker or bank to request a proxy form.
We
provide Internet proxy voting to allow you to vote your shares on-line, with
procedures designed to ensure the authenticity and correctness of your proxy
vote. However, please be aware that you must bear any costs
associated with your Internet access, such as usage charges from Internet access
providers and telephone companies.
How
many votes do I have?
On each
matter to be voted upon, you will have one vote for each share of Class A common
stock you own as of the Record Date and ten votes for each share of Class B
common stock you own as of the Record Date.
What
if I return a proxy card but do not make specific choices?
If you
return a signed and dated proxy card without marking any voting selections, your
shares will be voted “For”
the election of all 6 nominees for director, “For” the ratification of the
selection of the independent registered public accounting firm of Deloitte &
Touche LLP as independent auditor of the Company for its fiscal year ending
December 31, 2009, and “For” the approval of an
amendment to our Restated Certificate of Incorporation that, if filed with the
Secretary of State of Delaware at the discretion of Board of
Directors, would (a) effect a reverse stock split of the
Company’s common stock at a reverse split ratio of between 1-for-5 and 1-for-20,
as determined by the Board of Directors, and (b) decrease the number of
authorized shares of the Company’s common stock on a basis proportional to the
reverse split ratio approved by the Board of Directors. If any other
matter is properly presented at the meeting, your proxyholder (one of the
individuals named on your proxy card) will vote your shares using his best
judgment.
Who
is paying for this proxy solicitation?
We will
pay for the entire cost of soliciting proxies. In addition to these
mailed proxy materials, our directors and employees may also solicit proxies in
person, by telephone, or by other means of communication. Directors and employees
will not be paid any additional compensation for soliciting proxies. We also reimburse
brokerage firms, banks and other agents for the cost of forwarding proxy
materials to beneficial owners.
What
does it mean if I receive more than one proxy card?
If you
receive more than one proxy card, your shares are registered in more than one
name or are registered in different accounts. Please complete, sign
and return each proxy
card to ensure that all of your shares are voted.
Can
I change my vote after submitting my proxy?
Yes. You
can revoke your proxy at any time before the final vote at the meeting. If
you are the record holder of your shares, you may revoke your proxy in any one
of three ways:
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You
may submit another properly completed proxy card with a later
date.
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You
may send a timely written notice that you are revoking your proxy to
the Company’s Corporate Secretary at 11700 Plaza America Drive, Suite
1010, Reston, Virginia 20190.
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You
may attend the Annual Meeting and vote in person. Simply
attending the meeting will not, by itself, revoke your
proxy.
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If your
shares are held by your broker or bank as a nominee or agent, you should follow
the instructions provided by your broker or bank.
How
are votes counted?
Votes
will be counted by the inspector of election appointed for the meeting, who will
separately count “For” and “Withhold” and, with respect to proposals other than
the election of directors, “Against” votes, abstentions and broker
non-votes. Abstentions will be counted towards the vote total for
each proposal, and will have the same effect as “Against” votes. Broker
non-votes have no effect and will not be counted towards the vote total for any
proposal.
What
are “broker non-votes”?
If your
shares are held by your broker as your nominee (that is, in “street name”), you
will need to obtain a proxy form from the institution that holds your shares and
follow the instructions included on that form regarding how to instruct your
broker to vote your shares. If you do not give instructions to your
broker, your broker can vote your shares with respect to “discretionary” items,
but not with respect to “non-discretionary” items. Discretionary
items are proposals considered routine under the rules of the New York Stock
Exchange (“NYSE”) on which your broker may vote shares held in street name in
the absence of your voting instructions. On non-discretionary items
for which you do not give your broker instructions, the shares will be treated
as broker non-votes.
How
many votes are needed to approve each proposal?
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For
Proposal No. 1, Election of Directors, the 6 nominees receiving the most
“For” votes (from the holders of votes of shares present in person or
represented by proxy and entitled to vote on the election of directors)
will be elected. Only votes “For”
or “Withheld” will affect the
outcome.
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To
be approved, Proposal No. 2, Ratification of the Selection by the
Audit Committee of the Board of Directors of the Independent Registered
Public Accounting Firm of Deloitte & Touche LLP as Independent
Auditor, must receive “For” votes from the holders of a majority of shares
present in person or by proxy. If you “Abstain” from
voting, it will have the same effect as an “Against”
vote.
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To
be approved, Proposal No. 3, Approval of an Amendment to the Company’s
Restated Certificate of Incorporation that, if filed with the Secretary of
State of Delaware at the discretion of the Board of Directors, would (a) effect a
reverse stock split of the Company’s common stock at a reverse split ratio
of between 1-for-5 and 1-for-20, as determined by the Board of Directors,
and (b) decrease the number of authorized shares of the Company’s
common stock on a basis proportional to the reverse split ratio approved
by the Board of Directors, must receive “For” votes from the holders of a
majority of shares present in person or by proxy. If you “Abstain” from
voting, it will have the same effect as an “Against”
vote.
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What
is the quorum requirement?
A quorum
of stockholders is necessary to hold a valid meeting. A quorum will be present
if stockholders holding shares representing a
majority of the combined voting power of the outstanding Class A common stock
and Class B common stock are present at the meeting in person or represented by
proxy. On the
Record Date, there were 154,407,549 shares of
Class A common stock outstanding and
53,660,000 shares of Class B common stock outstanding. Thus holders
of shares representing 345,503,776 votes must be present in person or
represented by proxy to have a quorum.
Your
shares will be counted towards the quorum only if you submit a valid proxy (or
one is submitted on your behalf by your broker, bank or other nominee) or if you
vote in person at the meeting. Abstentions and broker
non-votes will be counted towards the quorum requirement. If there is no quorum,
the holders of a majority of shares present at the meeting in person or
represented by proxy may adjourn the meeting to another date.
How
can I find out the results of the voting at the Annual Meeting?
Preliminary
voting results will be announced at the Annual Meeting. Final voting results
will be published in the Company’s quarterly report on Form 10-Q for the second
quarter of 2009.
HOUSEHOLDING
OF PROXY MATERIALS
The U.S.
Securities and Exchange Commission (“SEC”) has adopted rules that permit
companies and intermediaries (e.g., brokers) to satisfy the
delivery requirements for annual report to stockholders, proxy statement, or
Notice of Internet Availability of Proxy Materials with respect to two or more
stockholders sharing the same address by delivering a single annual report to
stockholders, proxy statement, or Notice of Internet Availability of Proxy
Materials addressed to those stockholders. This process, which is
commonly referred to as “householding,” potentially means extra convenience for
stockholders and
cost savings for companies.
This
year, a number of brokers with account holders who are ICO’s stockholders will
be “householding” our proxy materials. A single annual report to
stockholders, proxy statement, or Notice of Internet Availability of Proxy
Materials will be delivered to multiple stockholders sharing an address unless
contrary instructions have been received from the affected
stockholders. Once you have received notice from your broker that
they will be “householding” communications to your address, “householding” will
continue until you are notified otherwise or until you revoke your
consent. If, at any time, you no longer wish to participate in
“householding” and would prefer to receive a separate annual report to
stockholders, proxy statement, or Notice of Internet Availability of Proxy
Materials, please notify your broker. Upon written or oral request,
we will promptly deliver a separate copy of the annual report to stockholders,
proxy statement, or Notice of Internet Availability of Proxy Materials, as
applicable, to a stockholder at a shared address to which a single copy of the
documents was delivered. Direct
your written request to ICO, 11700 Plaza America Drive, Suite 1010, Reston,
Virginia 20190, Attn: General Counsel or contact John Flynn at (703) 964-1400. Stockholders
who currently receive multiple copies of the proxy statement at their addresses
and would like to request “householding” of their communications should contact
their brokers.
PROPOSAL
1
ELECTION
OF DIRECTORS
The
Company’s Board of Directors consists of 6 directors. There are 6 nominees for
director this year. Each director to be
elected will hold office until the next Annual Meeting of stockholders and until his successor
is elected, or, if sooner, until the director’s death, resignation or
removal. Except for
Mr. Kauser, who joined the Board of
Directors since the last Annual Meeting, each of the nominees listed below is
currently a director of the Company who was previously elected by the
stockholders. The
Company encourages nominees for directors and directors to attend the Annual
Meeting. All of the then serving directors attended the 2008 Annual
Meeting of Stockholders. Pursuant to the terms of our Board
Compensation Policy, for their continuing service, each current and future board
member who is independent as determined by Nasdaq Marketplace Rule 4200(a)(15)
receives $30,000 per year cash compensation for Board service, and non-employee
directors receive an option to purchase 30,000 shares annually, as described in
more detail in the section entitled “Director
Compensation.” The Board Compensation Policy also provides
stock option grants for Board and committee service when a director first joins
the Board of Directors or committee.
Directors
are elected by a plurality of the votes of the holders of shares present in
person or represented by proxy and entitled to vote on the election of
directors. The 6
nominees receiving the highest number of affirmative votes will be elected. Shares
represented by executed proxies will be voted, if authority to do so is not
withheld, for the election of the 6 nominees
named below. If any
nominee becomes unavailable for election as a result of an unexpected
occurrence, your shares will be voted for the election of a substitute nominee
proposed by the Company’s management. Each person nominated
for election has agreed to serve if elected. Our management has no
reason to believe that any nominee will be unable to serve.
Nominees
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Principal Occupation/
Position Held With the Company
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Craig
O. McCaw
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59
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Chairman,
Board of Directors
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Samuel
L. Ginn
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72
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Director
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Nicolas
Kauser
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69
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Director
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Barry
L. Rowan
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52
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Director
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H.
Brian Thompson
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70
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Director
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David
Wasserman
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42
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Director
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The
following is a brief biography of each nominee for director.
Craig O. McCaw—Director since
May 2000. Mr. McCaw is currently Chairman of the
Company. Mr. McCaw served as a Director and Chairman of ICO North
America from September 2005 thru December 16, 2008. Since 1993, Mr.
McCaw has been Chairman, Chief Executive Officer, and a member of Eagle River
Investments, LLC, a private company formed to focus on strategic investments in
the telecommunications industry, and its affiliated companies. Mr.
McCaw founded Clearwire Corporation in October 2003 and currently serves as its
Chairman of the Board. Mr. McCaw was a director of Nextel
Communications, Inc., from July 1995 until December 2003, and a director of XO
Communications, Inc. (formerly known as NEXTLINK Communications, Inc.) (“XO”),
from January 1997 until January 2002. From September 1994 to July
1997, he was also XO’s Chief Executive Officer. From 1974 to
September 1994, Mr. McCaw served as Chairman and CEO of McCaw Cellular
Communications, Inc., which he built into the nation’s leading provider of
cellular services in more than 100 U.S. cities, until the company was sold to
AT&T Corp. in August 1994.
Samuel L. Ginn—Director since
May 2006 and from October 2001 to April 2004. Mr. Ginn has over 43
years of experience in the telecommunications industry. Mr. Ginn was
Chairman and Chief Executive Officer of AirTouch Communications, Inc. from
December 1993 until its merger with Vodafone Group Public Limited Company in
June 1999. Upon the Vodafone-AirTouch merger, he became Chairman of
Vodafone, a position he held until May 2000. Since leaving Vodafone,
he has continued to be a private investor and advisor to several startup
companies in the telecommunications industry. Mr. Ginn currently
serves on the Board of Directors of Chevron Corporation and Franklin Templeton
Funds Board. Mr. Ginn is a graduate of the School of Engineering of
Auburn University.
Nicolas Kauser—Director since
December 2008 and from May 2000 to May 2004. Mr. Kauser has spent
over 40 years in the communications industry, including presently, President of
Clearwire International LLC, CTO of Clearwire, from September 2004 to July 2007,
EVP and CTO for AT&T Wireless Services, Inc. (formerly McCaw Cellular
Communications, Inc.), from 1990 through 1998, Sr. VP of Operations and VP of
Engineering of Cantel, Inc., and 20 years in Venezuela where he first worked for
the National Telephone Co. (“CANTV”) and subsequently co-founded two companies
in the communications industry. a position he has held since May 2003, and
is a Director of RadioFrame Networks, Inc. and TriQuint Semiconductors,
Inc. He earned his bachelor’s degree in electrical engineering from
McGill University, Montreal, Quebec in 1963 and successfully completed graduate
courses in Logic Design and Random Signal and Noise in Telecommunications
Systems. In 1998, Mr. Kauser received the prestigious Gold Prize awarded by The
Carnegie Melon Institute and American Management Systems for excellence in the
application of information technology.
Barry L. Rowan—Director since
June 2006. Barry Rowan has over 25 years of financial and operational experience
building technology and communications companies. From August 2005 until June
2006, he was Executive Vice President, Chief Financial Officer of Nextel
Partners and its subsidiaries. Mr. Rowan joined Nextel Partners in August 2003
as Vice President and Chief Financial Officer, and from August 2003 to August
2004 he also served as the company's Treasurer. From January 2002 to August
2003, he was a principal at Rowan & Company, LLC, a consulting and private
investment firm, and from 1999 to 2001, Mr. Rowan was the Chief Financial
Officer at Velocom, Inc., an international communications company, during which
time he served as Chief Executive Officer of Vesper, the company's Brazilian
subsidiary, for six months. From 1992 until 1999, Mr. Rowan held a number of
executive management positions at Fluke Corporation, including Chief Financial
Officer, and Senior Vice President and Division General Manager. Mr. Rowan
earned his M.B.A. from the Harvard Business School, and his B.S., summa cum laude, in Business
Administration and Chemical Biology from The College of Idaho.
H. Brian Thompson—Director since May
2007. Mr. Thompson is Executive Chairman of Global Telecom &
Technology (“GTT”), a global telecommunications network integrator that provides
its clients with a broad portfolio of wide-area network and wireless mobility
services from its headquarters in Northern Virginia and offices in London and
Dusseldorf. Mr. Thompson continues to head his own private equity
investment and advisory firm, Universal Telecommunications, Inc. From
December 2002 to June 2007, Mr. Thompson was Chairman of Comsat International
(“CI”), one of the largest independent telecommunications operators serving all
of Latin America. He also served as Chairman and Chief Executive
Officer of Global TeleSystems Group, Inc. from March 1999 through September of
2000. Mr. Thompson was Chairman and CEO of LCI International from
1991 until its merger with Qwest Communications International Inc. in June
1998. Thompson became Vice Chairman of the board for Qwest until his
resignation in December 1998. Thompson previously served as Executive
Vice President of MCI Communications Corporation from 1981 to 1990, and prior to
MCI, was a management consultant with the Washington, DC offices of McKinsey
& Company for nine years, where he specialized in the management of
telecommunications. He currently serves as a member of the board of
directors of Axcelis Technologies, Inc., Penske Automotive Group, and Sonus
Networks, Inc. He serves as a member of the Irish Prime Minister's
Ireland-America Economic Advisory Board, and from January-March 1999, he served
as Non-Executive Chairman of Telecom Eireann, Ireland’s incumbent telephone
company. Thompson received his MBA from Harvard’s Graduate School of
Business, and holds an undergraduate degree in chemical engineering from the
University of Massachusetts.
David Wasserman—Director
since April 2002. Mr. Wasserman is a financial principal at Clayton,
Dubilier & Rice, Inc., which he joined in 1998. Prior to joining
CD&R, he was employed at Goldman, Sachs & Co. in the Principal
Investment Area. He has also been employed by Fidelity Capital and as
a management consultant. Mr. Wasserman serves on the Board of
Directors of Culligan Ltd., Hertz Global Holdings, and ServiceMaster and
formerly served as a director of Kinko’s Inc. and Covansys
Corporation.
THE
BOARD OF DIRECTORS RECOMMENDS
A
VOTE “FOR” EACH NAMED NOMINEE
Information
Regarding The Board Of Directors And Corporate Governance
Independence
of the Board of Directors
Controlled
Company
Under the
Nasdaq Marketplace Rules, a “controlled company” is a company of which more than
50% of the voting power is held by an individual, a group or another
company. The Board of Directors has determined that the Company is a
“controlled company” within the meaning of the Nasdaq Global Market (“Nasdaq”)
listing standards. The basis for the Board of Directors’
determination that the Company is a “controlled company” is the beneficial
ownership of approximately 67% of the voting power
of the Company’s outstanding capital stock, as of the Record Date, by Eagle
River Satellite Holdings, LLC (“ERSH”). Craig O. McCaw is the sole
manager and beneficial member of Eagle River Investments, LLC, which is the sole
member of ERSH. As a “controlled company” under Nasdaq corporate
governance requirements, ICO is exempted from complying with (1) Nasdaq’s
requirement that a majority of the Board of Directors consist of independent
directors, (2) Nasdaq’s requirement that the compensation of officers be
determined, or recommended to the Board of Directors for determination, by a
majority of the independent directors or a compensation committee comprised
solely of independent directors, and (3) Nasdaq’s requirement that director
nominees be selected, or recommended for the Board of Directors’ selection, by a
majority of the independent directors or a nominating committee comprised solely
of independent directors with a written charter or board resolution addressing
the nomination process. The Company has elected to use these
exemptions available to controlled companies. The members of the
Compensation Committee of the Board of Directors are independent directors
although this exemption permits the Board of Directors to appoint
non-independent directors to the Compensation Committee.
Nominations
Process
Because
the Company qualifies as a “controlled company,” and in part as a result of the
historically low turnover of its members, the Board of Directors has not
established a nominating committee comprised solely of independent directors and
has not adopted a nominating committee charter or a policy for the nomination of
directors, other than as set out in the Company’s Bylaws. In light of
the Company’s status as a “controlled company” and the fact that all of the
nominees for director named herein are incumbent directors, the Board of
Directors approved the nomination of such nominees without a prior
recommendation from a majority of the independent directors.
The Board
of Directors consults with the Company’s counsel to ensure that its
determinations are consistent with relevant securities and other laws and
regulations regarding the definition of “independent,” including those set forth
in pertinent listing standards of the Nasdaq, as in effect from time to
time. Consistent with these considerations, after review of all
relevant transactions or relationships between each director, or any of his or
her family members, and the Company, its senior management and its independent
auditor, the Board of Directors has determined that Messrs. Ginn, Rowan,
Thompson, and Wasserman are independent directors within the meaning of the
applicable Nasdaq listing
standards.
Meetings
of the Board of Directors
The Board
of Directors met twelve times during the last fiscal year. All directors attended
at least 75% of the aggregate of the meetings of the Board of Directors, and of
the committees on which they served, held during the period for which they were
directors or committee members, respectively.
Information
Regarding Committees of the Board of Directors
The Board
of Directors has three committees: an
Audit Committee, a Compensation Committee, and a Strategy Committee. The
following table provides membership and meeting information for fiscal 2008 for
each of the Board committees:
Name
|
|
Audit
|
|
|
Compensation
|
|
|
Strategy
|
|
Mr.
Craig O. McCaw
|
|
|
|
|
|
|
|
|
X*
|
|
Mr.
Samuel L. Ginn
|
|
|
X
|
|
|
|
|
|
|
X
|
|
Mr.
Nicolas Kauser
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Barry L. Rowan
|
|
|
X*
|
|
|
|
X
|
|
|
|
|
|
Mr.
H. Brian Thompson
|
|
|
X
|
|
|
|
X*
|
|
|
|
|
|
Mr.
David Wasserman
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
meetings in fiscal 2008
|
|
|
6
|
|
|
|
4
|
|
|
|
0
|
|
* Committee
Chairperson
Audit
Committee
The Audit
Committee of the Board of Directors was established by the Board of Directors in
accordance with Section 10A(m) of the Securities Exchange Act of 1934, as
amended (“Exchange Act”), and Nasdaq Marketplace Rule 4350(d) to assist the
Board of Directors in overseeing the Company’s accounting and financial
reporting processes and system of internal controls; evaluating the
qualifications and independence of the Company’s independent auditor; and
overseeing the Company’s independent auditor. For
this purpose, the Audit Committee performs several functions. The
Audit Committee: (i) evaluates the performance of and assesses the
qualifications of the independent auditor; (ii) determines and approves the
engagement of the independent auditor; (iii) determines whether to retain or
terminate the existing independent auditor or to appoint and engage a new
independent auditor; (iv) reviews and approves the retention of the independent
auditor to perform any proposed permissible non-audit services; (v) monitors the
rotation of partners of the independent auditor on the Company’s audit
engagement team as required by law; (vi) reviews and approves or rejects
transactions between the Company and any related persons; (vii) confers with
management and the independent auditor regarding the effectiveness of internal
controls over financial reporting; (viii) establishes procedures, as required
under applicable law, for the receipt, retention and treatment of complaints
received by the Company regarding accounting, internal accounting controls or
auditing matters and the confidential and anonymous submissions by employees of
concerns regarding questionable accounting or auditing matters; (ix) meets to
review the Company’s annual audited financial statements and quarterly financial
statements with management and the independent auditor, including reviewing the
Company’s disclosures under “Management’s Discussion and Analysis of Financial
Condition and Results of Operations”; (x) annually reviews the terms of the
directors and executive officers insurance coverage and approves the
terms prior to the renewal of the policy; (xi) reviews and assesses the adequacy
of the Company’s investment policy and recommends any proposed changes to the
Board of Directors; and (xii) has such other authority, duties and
responsibilities as the Board of Directors delegates to the Audit
Committee. The Audit Committee is composed of three directors: Messrs. Rowan
(chairman), Ginn and Thompson. The Audit Committee met six times
during the last fiscal year. The Board of Directors has adopted a
written charter for the Audit Committee that is available to stockholders on the
Company’s website at www.ico.com.
The Board
of Directors reviewed the Nasdaq listing standards definition of
independence for Audit Committee members and has determined that Messrs. Rowan,
Ginn and Thompson are independent (as independence is currently defined in
Nasdaq Marketplace Rule 4350(d)(2)(A)(i) and (ii)). The Board of
Directors has also determined that Mr. Rowan qualifies as an “audit committee
financial expert,” as defined in the applicable SEC rules. The Board of Directors
made a qualitative assessment of Mr. Rowan’s level of knowledge and experience
based on a number of factors, including his formal education and experience as a
chief financial officer for public reporting companies.
Compensation
Committee
The Compensation Committee of the Board
of Directors was established by the Board of Directors to: (i) act on behalf of
the Board of Directors in fulfilling the Board of Director’s responsibilities to
oversee the Company’s compensation policies, plans and programs; (ii) review and
determine the compensation to be paid to the Company’s executive officers and
directors; (iii) review the Compensation Discussion and Analysis (“CD&A”)
with management and make a recommendation as to whether the CD&A should be
included in the Company’s annual report and/or proxy statement; (iv) prepare and
review the Compensation Committee report included in the Company’s annual proxy
statement in accordance with applicable rules and regulations of the SEC in
effect from time to time; and (v) perform such other functions as may be deemed
necessary or convenient in the efficient and lawful discharge of the
foregoing. In 2008, the Compensation Committee engaged the consulting
services of Radford Surveys + Consulting, a business unit of AON (“Radford”), to
assist in evaluating executive compensation for future years.
The
Compensation Committee is composed of two directors:
Messrs. Thompson (chairman) and Rowan, each of whom is an independent
director. The Compensation Committee met four times during the last
fiscal year. The Compensation Committee has adopted a written charter that
is available to stockholders on the Company’s website at
www.ico.com.
Strategy
Committee
The Strategy Committee is available to
assist the Company’s Board of Directors in shaping its business strategy as the
Company develops its mobile satellite service/ancillary terrestrial component
system (“MSS/ATC”) System, including recommending and evaluating potential
strategic partners. The Strategy Committee is composed of two
directors: Messrs. McCaw (chairman) and Ginn. The Strategy Committee
did not meet during the last fiscal year.
Corporate
Governance
Compensation
Committee Processes and Procedures
In accordance with its charter, the
Compensation Committee meets at least one time annually and with greater
frequency if necessary. The Chairman of the Compensation Committee,
the Chairman of the Board of Directors or the Chief Executive Officer may call
meetings. From time
to time, various members of management and other employees as well as outside
advisors or consultants may be invited by the
Compensation Committee to make presentations, provide
financial or other background information
or advice, or otherwise participate in Compensation Committee
meetings. The Chief Executive Officer may not participate in or be
present during any deliberations or determinations of the Compensation Committee
regarding his compensation. The charter of the Compensation Committee
grants the Compensation Committee full access to all books, records, facilities
and personnel of the Company, as well as the authority to obtain, at the expense
of the Company, advice and assistance from internal and external legal,
accounting or other advisors and consultants and other external resources that
the Compensation Committee considers necessary or appropriate in the performance
of its duties. In
particular, the Compensation Committee has the authority to retain compensation
consultants to assist in its evaluation of executive and director compensation,
including the authority to approve the consultants’ reasonable fees and other
retention terms.
Compensation
Committee Interlocks and Insider Participation
No member
of the Compensation Committee is, or was during the Company’s last fiscal year,
an officer or employee of ICO, and none of the Company’s executive officers
serves, or during the Company’s last fiscal year served, as a member of a
compensation committee (or other board committee performing equivalent
functions) of any entity that has one or more executive officers serving as a
member of the Company’s Compensation Committee. No member of the
Compensation Committee during the last fiscal year was formerly an officer of
the Company. No executive officer of the Company serves, or during
the Company’s last fiscal year served, as a director of another entity, one of
whose directors sits on the Company’s Compensation Committee.
Stockholder
Communications with the Board of Directors
Historically,
the Company has not provided a formal process related to stockholder
communications with the Board of Directors. Nevertheless, the Company
believes it has provided for the views of its stockholders to be heard by the
Board of Directors or individual directors, as applicable, and that appropriate
responses are provided to stockholders in a timely manner. During the
upcoming year, the Board of Directors may consider the adoption of
a formal process for stockholder communications with the Board of Directors and,
if adopted, publish it promptly and post it to the Company’s
website. Stockholders may submit questions to the Investor Relations
department by going to the Investor Relations section of the Company’s website
at www.ico.com.
Code
of Conduct and Ethics
The
Company has adopted the ICO Global Communications (Holdings) Limited Code of
Conduct and Ethics that applies to all officers, directors and
employees. The Code of Conduct and Ethics is available on the
Company’s website at www.ico.com. If the Company makes any
substantive amendments to the Code of Conduct and Ethics or grants any waiver
from a provision of the Code of Conduct and Ethics to any executive officer or
director, the Company will promptly disclose the nature of the amendment or
waiver on its website.
PROPOSAL
2
RATIFICATION
OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit
Committee of the Board of Directors has
selected the independent registered public accounting firm of Deloitte &
Touche LLP as the Company’s independent auditor for the fiscal year ending
December 31, 2009, and has further directed that management submit the selection
of the independent auditor for ratification by the stockholders at the Annual
Meeting. Deloitte & Touche LLP has audited the Company’s
financial statements for the years ending December 31, 2003 through December 31,
2008. Representatives of Deloitte & Touche
LLP will be available telephonically at the Annual Meeting to make a statement
if they so desire and will be available to respond to appropriate
questions.
Neither
the Company’s Bylaws nor other governing documents or law require
stockholder ratification of the
selection of Deloitte & Touche LLP as the Company’s independent
auditor. However, the Audit Committee of the Board of Directors is
submitting the selection of Deloitte & Touche LLP to the stockholders for ratification as a
matter of good corporate practice. If the stockholders fail to ratify the
selection, the Audit Committee of the Board of Directors will reconsider whether
or not to retain that firm. Even if the selection is ratified, the
Audit Committee of the Board of Directors in its discretion may direct the
appointment of a different independent auditor at any time during the year if
they determine that such a change would be in the best interests of the Company
and its stockholders.
The
affirmative vote of the holders of a majority of the shares present in person or
represented by proxy and entitled to vote at the Annual Meeting will be required
to ratify the selection of Deloitte & Touche LLP. Abstentions
will be counted toward the tabulation of votes cast on proposals presented to
the stockholders and will have the same effect as negative
votes. Broker non-votes are counted towards a quorum, but are not
counted for any purpose in determining whether this matter has been
approved.
Principal
Accountant Fees and Services
The
following table represents aggregate fees billed to the Company for the fiscal
years ended December 31, 2008 and 2007 by Deloitte & Touche LLP, the
Company’s principal accountant.
|
|
Fiscal Year Ended
December 31,
|
|
|
|
|
|
|
|
|
Audit
Fees (1)
|
|
$ |
1,060,000 |
|
|
$ |
1,088,516 |
|
Audit-related
Fees (2)
|
|
|
7,500 |
|
|
|
— |
|
Tax
Fees
|
|
|
— |
|
|
|
— |
|
All
Other Fees
|
|
|
— |
|
|
|
— |
|
Total
Fees
|
|
$ |
1,067,500 |
|
|
$ |
1,088,516 |
|
|
(1)
|
Audit
fees consist of fees and expenses for professional services rendered by
Deloitte & Touche LLP in connection with: (i) the audit of the
Company’s annual financial statements included in the Annual Report on
Form 10-K, and review of the financial statements included in the
Quarterly Reports on Form 10-Q; (ii) the audit of the Company’s internal
control over financial reporting with the objective of obtaining
reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects; and (iii)
services that are normally provided in connection with statutory and
regulatory filings or engagements.
|
|
(2)
|
Audit-related Fees consist of fees for
assurance and related services rendered by Deloitte & Touche
LLP that
are reasonably
related to the performance of the audit or review of the
Company’s financial statements and are not
reported under Audit Fees. This category includes fees related to audit
and attest services not required by statute or regulations, due
diligence related to mergers, acquisitions
and investments and consultations concerning financial accounting and
reporting standards.
|
Pre-Approval
Policies and Procedures
The Audit
Committee pre-approves all audit and non-audit services rendered by our
independent registered public accounting firm, Deloitte & Touche
LLP. While the Audit Committee charter permits the Audit Committee to
delegate pre-approval authority to subcommittees consisting of one or more
individuals, as well as to pre-approve defined categories of services, the Audit
Committee has not yet done so. To date, all pre-approval has been
given as part of the Audit Committee’s approval of the scope of the engagement
of the independent auditor or on an individual explicit case-by-case basis
before the independent auditor is engaged to provide each
service. All of the services provided by Deloitte & Touche LLP in
2008, as described under Audit Fees above, were pre-approved by the Audit
Committee.
Report
of the Audit Committee
The Audit
Committee has reviewed and discussed the audited consolidated financial
statements for the fiscal year ended December 31, 2008 with management of
the Company. The Audit Committee has discussed with the independent auditor
the matters required to be discussed by the Statement on Auditing Standards No.
61, as amended (AICPA, Professional Standards, Vol.
1. AU section 380), as adopted by the Public Company Accounting Oversight Board
(“PCAOB”) in Rule 3200T. The Audit Committee has also received the written
disclosures and the letter from the independent accountants required by the
applicable requirements of the PCAOB regarding the independent accountant’s
communications with the Audit Committee concerning independence and has
discussed with the independent accountants the independent accountant’s
independence. Based on the foregoing, the Audit Committee has recommended
to the Board of Directors that the audited financial statements be included in
the Company’s Form 10-K for the fiscal year ended December 31,
2008. The material
in this report is not “soliciting material,” is not deemed “filed” with the SEC,
and is not to be incorporated by reference into any filing of the Company under
the Securities Act of 1933, as amended or the Securities Exchange Act of 1934,
as amended.
AUDIT
COMMITTEE
|
|
Mr.
Barry L. Rowan, Chairman
|
Mr.
Samuel L. Ginn
|
Mr.
H. Brian Thompson
|
The
Board Of Directors Recommends
A
Vote “For” The Ratification of the Selection of the Independent
Registered
Public
Accounting Firm
PROPOSAL
3
APPROVAL
OF AN AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION THAT, IF
FILED WITH THE SECRETARY OF STATE OF DELAWARE AT THE DISCRETION OF THE BOARD OF
DIRECTORS, WOULD (A) EFFECT A REVERSE STOCK SPLIT OF THE COMPANY’S COMMON STOCK
AT A REVERSE SPLIT RATIO OF BETWEEN 1-FOR-5 AND 1-FOR-20, AS DETERMINED BY THE
BOARD OF DIRECTORS, AND (B) DECREASE THE NUMBER OF AUTHORIZED SHARES OF THE
COMPANY’S COMMON STOCK ON A BASIS PROPORTIONAL TO THE REVERSE SPLIT RATIO
APPROVED BY THE BOARD OF DIRECTORS.
The
Company’s Board of Directors has unanimously adopted and is submitting for
stockholder approval an amendment to the Company’s Restated Certificate of
Incorporation that, if filed with the Secretary of State of Delaware at the
discretion of the Board of Directors, would (1) effect a reverse stock
split at a reverse split ratio of between 1-for-5 and 1-for-20, which ratio will
be selected by the Board of Directors following stockholder approval and prior
to the time of filing of a Certificate of Amendment to the Company’s Restated
Certificate of Incorporation with the Delaware Secretary of State, and
(2) decrease the total number of authorized shares of the Company’s common
stock on a basis proportional to the reverse split ratio approved by the Board
of Directors. Pursuant to the law of Delaware, the Company’s state of
incorporation, the Board of Directors must adopt any amendment to the Company’s
Restated Certificate of Incorporation and submit the amendment to stockholders
for their approval. The form of the proposed amendment to the Company’s Restated
Certificate of Incorporation to effect the reverse stock split and decrease the
total number of authorized shares is attached to this Proxy Statement as
Annex A.
If the
stockholders approve this proposal, the Board of Directors may elect, at any
time prior to next year’s Annual Meeting of stockholders in its discretion, to
effect any reverse split ratio within the range set forth above upon receipt of
stockholder approval, or none of them if the Board of Directors determines in
its discretion not to proceed with the reverse stock split. The Company believes
that the availability of a range of reverse split ratios will provide it with
the flexibility to implement the reverse stock split in a manner designed to
maximize the anticipated benefits for the Company and its stockholders. In
determining which reverse stock split ratio to implement, if any, following the
receipt of stockholder approval, the Board of Directors may consider, among
other things, factors such as:
|
·
|
the
historical trading price and trading volume of the Class A common
stock;
|
|
·
|
the
then - prevailing trading price and trading volume of the Class A common
stock and the anticipated impact of the reverse stock split on the trading
market for the Class A common
stock;
|
|
·
|
the
Company’s ability to continue its listing on
Nasdaq;
|
|
·
|
which
reverse split ratio would result in the greatest overall reduction in the
Company’s administrative costs; and
|
|
·
|
prevailing
general market and economic
conditions.
|
Reasons
for the Reverse Stock Split
The Board
of Directors believes that stockholders should authorize the Board of Directors
to be able to effect a reverse split for the following reasons:
|
·
|
Compliance with Nasdaq Listing
Standards. The Company’s Class A common stock is listed
on Nasdaq under the symbol “ICOG.” The Board of Directors believes that
the increase in the stock price that it expects would result from the
reverse stock split would reduce the risk that the Company’s Class A
common stock will be delisted by
Nasdaq.
|
|
·
|
Increase in Eligible
Investors. A reverse stock split would allow a broader
range of institutions and other investors in the Company’s Class A common
stock, such as funds that are prohibited from buying stocks whose price is
below a certain threshold, potentially increasing trading volume and
liquidity.
|
|
·
|
Increased Broker
Interest. A reverse stock split would help increase
broker interest in the Company’s Class A common stock as their policies
can discourage them from recommending companies with lower stock prices.
Because of the trading volatility often associated with lower-priced
stocks, many brokerage houses and institutional investors have adopted
internal policies and practices that either prohibit or discourage them
from investing in such stocks or recommending them to their customers.
Some of those policies and practices may also function to make the
processing of trades in lower-priced stocks economically unattractive to
brokers. Additionally, because brokers’ commissions on transactions in
lower-priced stocks generally represent a higher percentage of the stock
price than commissions on higher-priced stocks, the current average price
per share of the Company’s Class A common stock can result in individual
stockholders paying transaction costs representing a higher percentage of
their total share value than would be the case if the stock price were
substantially higher.
|
|
·
|
Decreased Stock Price
Volatility. The Board of Directors believes that the
increase in the stock price that it expects would result from the reverse
stock split could decrease price volatility, as small changes in the price
of the Company’s Class A common stock currently result in relatively large
percentage changes in the stock
price.
|
|
·
|
Decrease the
Company’s Costs. The
Board of Directors believes that the reverse stock split would also reduce
certain of the Company’s costs, such as Nasdaq listing
fees.
|
Possible
Disadvantages of the Reverse Stock Split
The Board
of Directors currently believes that, depending on future circumstances,
including whether Nasdaq continues to suspend its minimum $1 closing bid price
requirement, the potential advantages of a reverse stock split
significantly may outweigh any disadvantages that may result. The following are
possible disadvantages of a reverse stock split:
|
·
|
The reverse stock split may
not increase the price of the Company’s Class A common stock.
Although the Board of Directors expects that a reverse stock split would
result in an increase in the price of the Company’s Class A common stock,
the effect of a reverse stock split cannot be predicted with
certainty. Other factors, such as the Company’s financial
results, market conditions and the market perception of the Company’s
business may adversely affect the stock price. As a result, there can be
no assurance that the reverse stock split, if completed, would result in
the intended benefits described above, that the stock price will increase
following the reverse stock split or that the stock price will not
decrease in the future.
|
|
·
|
The reverse stock split may
decrease the trading market for the Company’s Class A common stock.
Because the reverse stock split would reduce the number of shares of
Class A common stock available in the public market, the trading market
for the Company’s Class A common stock may be harmed, particularly if the
stock price does not increase as a result of the reverse stock
split.
|
|
·
|
The reverse stock split may
leave certain stockholders with “odd lots.” The reverse stock
split may result in some stockholders owning “odd lots” of fewer than
100 shares of the common stock. Odd lot shares may be more difficult
to sell, and brokerage commissions and other costs of transactions in odd
lots are generally somewhat higher than the costs of transactions in
“round lots” of even multiples of
100 shares.
|
Effects
of the Reverse Stock Split
General
If the
reverse stock split is approved and implemented by the Board of Directors in its
discretion, the principal effects will be to decrease the number of outstanding
shares of the Company’s Class A common stock and Class B common stock based on
the reverse stock split ratio selected by the Board of Directors and to
proportionately decrease the number of authorized shares of the Class A common
stock and Class B common stock. As of December 31, 2008, approximately
154,006,103 shares of Class A common stock and 53,660,000 shares of Class B
common stock were issued and outstanding. Based on this number of
shares issued and outstanding and, for illustrative purposes only, assuming a
reverse split ratio of 1-for-10, the Company would have approximately 15,400,610
shares of Class A common stock outstanding immediately following the completion
of the reverse stock split and approximately 5,366,000 shares of Class B common
stock outstanding immediately following the completion of the reverse stock
split (without giving effect to the treatment of fractional shares discussed
below).
The
reverse stock split will not affect the registration of the Class A common stock
under the Exchange Act or the listing of the Class A common stock on Nasdaq.
Following the reverse stock split, the Class A common stock will continue to be
listed on Nasdaq under the symbol “ICOG,” although it will be considered a new
listing with a new CUSIP number.
Proportionate
voting rights and other rights of the holders of the Class A common stock and
Class B common stock will not be affected by the reverse stock split, other than
as a result of the treatment of fractional shares as described below. Except for
stockholders who are cashed out as a result of holding fractional shares and the
adjustments that may result from the treatment of fractional shares discussed
below, the number of stockholders of record will not be affected by the reverse
stock split and each stockholder will hold the same percentage of Class A common
stock and Class B common stock immediately following the reverse stock split as
such stockholder held immediately prior to the reverse stock split.
Effectiveness
of Reverse Stock Split
The
reverse stock split, if approved by stockholders and implemented by the Board of
Directors in its discretion, would become effective upon the filing and
effectiveness (“Effective Time”) of a Certificate of Amendment to the Company’s
Restated Certificate of Incorporation with the Secretary of State of the State
of Delaware. If the Board of Directors chooses not to implement the reverse
stock split by next year’s Annual Meeting, stockholder approval would be
required again prior to implementing any reverse stock split. In addition, the
Board of Directors reserves the right, notwithstanding stockholder approval and
without further action by the stockholders, to elect not to proceed with the
reverse stock split if, at any time prior to filing the Certificate of Amendment
to the Company’s Restated Certificate of Incorporation, the Board of Directors,
in its sole discretion, determines that it is no longer in the Company’s best
interests and the best interests of its stockholders to proceed with the reverse
stock split.
Effect
on the Company’s Stock Plans
As of
December 31, 2008, approximately 14,861,073 shares were issuable upon the
exercise of outstanding stock options, and approximately 4,334,438 additional
shares were reserved and available for issuance pursuant to future awards under
the Company’s incentive plans. Under these plans, the number of shares reserved
and available for issuance and the number, exercise price, grant price or
purchase price of shares subject to outstanding awards would be proportionately
adjusted based on the reverse split ratio, if any, selected by the Board of
Directors if the reverse stock split is effected. As a result, using the above
data as of December 31, 2008 and assuming for illustrative purposes only
that a 1-for-10 reverse stock split is effected, the number of shares issuable
upon exercise or vesting of outstanding awards would be adjusted from 14,861,073
to 1,486,107, and the 4,334,438 shares that were available for future issuance
under the stock plans would be adjusted to 433,443 (subject to increase as and
when awards made under the stock plans expire or are forfeited and are returned
in accordance with the terms of the plans). For individual holders, the number
of shares subject to outstanding awards would be reduced by a factor of 10 and,
in the case of outstanding stock options, the exercise price per share would be
increased by a multiple of 10, such that upon an exercise, the aggregate
exercise price payable by the optionee to the Company would remain the same. For
example, an outstanding stock option for 5,000 shares of Class A common
stock, exercisable at $1.00 per share, would be adjusted as a result of a
1-for-10 split ratio into an option exercisable for 500 shares of common
stock at an exercise price of $10.00 per share.
Effect
on Authorized but Unissued Shares of Common Stock
Currently,
the Company is authorized to issue up to a total of 1,125,000,000 shares,
comprising 900,000,000 shares of Class A common stock, 150,000,000 shares
of Class B common stock and 75,000,000 shares of preferred stock.
Concurrently with the reverse stock split, the Company intends to decrease its
authorized shares of common stock by the same ratio as the reverse stock split
(rounded to the nearest whole number). For example, assuming for illustrative
purposes only a 1-for-10 reverse stock split, the number of authorized shares of
common stock would be decreased to 105,000,000. The number of authorized shares
of preferred stock will not change.
Fractional
Shares
The
Company does not currently intend to issue fractional shares in connection with
the reverse stock split. Stockholders who would otherwise hold fractional shares
because the number of shares of common stock they hold before the reverse stock
split is not evenly divisible by the split ratio ultimately selected by the
Board of Directors will receive cash (without interest) in lieu of such
fractional shares in an amount equal to the proceeds attributable to the sale of
such fractional shares following the aggregation and sale by the Company’s
transfer agent of all fractional shares otherwise issuable. Stockholders who own
their shares in certificate form will receive such cash payment in lieu of
fractional shares following the surrender of their pre-split certificates for
post-split shares. The ownership of a fractional share interest will not give
the holder any voting, dividend or other rights, except to receive the
above-described cash payment. ICO will be responsible for any
brokerage fees or commissions related to the transfer agent’s selling in the
open market shares that would otherwise be fractional shares.
Stockholders should be aware that,
under the escheat laws of various jurisdictions, sums due for fractional
interests that are not timely claimed after the Effective Time may be required
to be paid to the designated agent for each such jurisdiction, unless
correspondence has been received by the Company or the transfer agent concerning
ownership of such funds within the time permitted in such jurisdiction.
Thereafter, if applicable, stockholders otherwise entitled to receive such
funds, but who do not receive them, will have to seek to obtain such funds
directly from the state to which they were paid.
Effect
on Par Value
The
proposed amendments to the Company’s Restated Certificate of Incorporation will
not affect the par value of the common stock, which will remain at $.01 per
share.
Reduction
In Stated Capital
As a
result of the reverse stock split, upon the Effective Time, the stated capital
on the Company’s balance sheet attributable to the common stock, which consists
of the par value per share of the common stock multiplied by the aggregate
number of shares of the common stock issued and outstanding, will be reduced in
proportion to the size of the reverse stock split. Correspondingly, the
Company’s additional paid-in capital account, which consists of the difference
between the Company’s stated capital and the aggregate amount paid to the
Company upon issuance of all currently outstanding shares of the common stock,
will be credited with the amount by which the stated capital is reduced. The
Company’s stockholders’ equity, in the aggregate, will remain
unchanged.
No
Going Private Transaction
Notwithstanding
the decrease in the number of outstanding shares following the proposed reverse
stock split, the Board of Directors does not intend for this transaction to be
the first step in a “going private transaction” within the meaning of
Rule 13e-3 of the Exchange Act.
Effect
on Registered and Beneficial Holders
If the
reverse stock split is effected, the Company intends to treat beneficial holders
(i.e., stockholders who
hold their shares in “street name” through a bank, broker or other nominee) in
the same manner as registered stockholders whose shares are registered in their
names. Banks, brokers or other nominees will be instructed to effect the reverse
stock split for their beneficial holders holding shares in “street name.”
However, these banks, brokers or other nominees may have their own procedures
for processing the reverse stock split. Stockholders who hold shares with a
bank, broker or other nominee and have questions in this regard are encouraged
to contact their bank, broker or other nominee.
Effect
on Registered Book-Entry Holders
The
Company’s registered stockholders may hold some or all of their shares
electronically in book-entry form under the direct registration system for
securities. These stockholders will not have stock certificates evidencing their
ownership of the Company’s common stock. They are, however, provided with a
statement reflecting the number of shares registered in their
accounts.
|
·
|
If
you hold shares in a book-entry form, you do not need to take any action
to receive your post-split shares or your cash payment in lieu of any
fractional share interest, if applicable. If you are entitled to
post-split shares, a transaction statement will automatically be sent to
your address of record indicating the number of shares you
hold.
|
|
·
|
If
you are entitled to a payment in lieu of any fractional share interest, a
check will be mailed to you at your registered address as soon as
practicable after the Company’s transfer agent completes the aggregation
and sale described above in “Fractional Shares.” By signing and cashing
this check, you will warrant that you owned the shares for which you
received a cash payment.
|
Effect
on holders of Registered Certificated Shares
Some
registered stockholders hold their shares of ICO common stock in certificate
form or a combination of certificate and book-entry form. If any of your shares
are held in certificate form, you will receive a transmittal letter from the
Company’s transfer agent as soon as practicable after the effective date of the
reverse stock split. The transmittal letter will contain instructions on how to
surrender your certificate(s) representing your pre-split shares to the transfer
agent. Upon receipt of your properly completed and executed letter of
transmittal and your stock certificate(s), you will be issued the appropriate
number of shares electronically in book-entry form under the direct registration
system. This means that, instead of receiving a new stock certificate, you will
receive a direct registration statement that indicates the number of post-split
shares you own in book-entry form. At any time after receipt of your direct
registration statement, you may request a stock certificate representing your
post-split ownership interest. If you are entitled to a payment in lieu of any
fractional share interest, payment will be made as described above under
“Fractional Shares.”
No new
shares in book-entry form will be issued and no payment in lieu of any
fractional share interest will be made to you until you surrender your
outstanding certificate(s), together with the properly completed and executed
letter of transmittal, to the transfer agent.
YOU
SHOULD NOT SEND YOUR CERTIFICATES NOW. YOU SHOULD SEND THEM ONLY AFTER YOU
RECEIVE THE LETTER OF TRANSMITTAL FROM THE TRANSFER AGENT.
No
Appraisal Rights
Under the
Delaware General Corporation Law, the Company’s stockholders are not entitled to
dissenter’s rights or appraisal rights with respect to the reverse stock split
described in this proposal.
Certain
Federal Income Tax Consequences of the Reverse Stock Split
The
following is a general summary of certain U.S. federal income tax
consequences of the reverse stock split that may be relevant to stockholders.
This summary is based upon the provisions of the Internal Revenue Code of 1986,
as amended (“Internal Revenue Code”), Treasury regulations promulgated
thereunder, published administrative rulings and judicial decisions as of the
date hereof, all of which may change, possibly with retroactive effect,
resulting in U.S. federal income tax consequences that may differ from
those discussed below. This summary does not purport to be complete and does not
address all aspects of federal income taxation that may be relevant to
stockholders in light of their particular circumstances or to stockholders that
may be subject to special tax rules, including, without limitation:
(i) stockholders subject to the alternative minimum tax; (ii) banks,
insurance companies, or other financial institutions; (iii) tax-exempt
organizations; (iv) dealers in securities or commodities;
(v) regulated investment companies or real estate investment trusts;
(vi) partnerships (or other flow-through entities for U.S. federal
income tax purposes and their partners or members); (vii) traders in
securities that elect to use a mark-to-market method of accounting for their
securities holdings; (viii) foreign stockholders or U.S. stockholders
whose “functional currency” is not the U.S. dollar; (ix) persons
holding the common stock as a position in a hedging transaction, “straddle,”
“conversion transaction” or other risk reduction transaction; (x) persons
who acquire shares of the common stock in connection with employment or other
performance of services; (xi) dealers and other stockholders that do not own
their shares of common stock as capital assets; or
(xii) U.S. expatriates. In addition, this summary does not address the
tax consequences arising under the laws of any foreign, state or local
jurisdiction and U.S. federal tax consequences other than federal income
taxation. If a partnership (including any entity or arrangement treated as a
partnership for U.S. federal income tax purposes) holds shares of the
common stock, the tax treatment of a partner in the partnership generally will
depend upon the status of the partner and the activities of the
partnership.
The
Company has not sought, and will not seek, an opinion of counsel or a ruling
from the Internal Revenue Service (“IRS”) regarding the United States federal
income tax consequences of the reverse stock split and there can be no assurance
the IRS will not challenge the statements and conclusions set forth below or
that a court would not sustain any such challenge. EACH STOCKHOLDER SHOULD
CONSULT SUCH HOLDER’S TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX
CONSEQUENCES OF THE REVERSE STOCK SPLIT TO SUCH STOCKHOLDER.
The
reverse stock split should constitute a “recapitalization” for U.S. federal
income tax purposes. As a result, a stockholder generally should not recognize
gain or loss upon the reverse stock split, except with respect to cash received
in lieu of a fractional share of the common stock, as discussed below. A
stockholder’s aggregate tax basis in the shares of the common stock received
pursuant to the reverse stock split should equal the aggregate tax basis of the
shares of the common stock surrendered (excluding any portion of such basis that
is allocated to any fractional share of the common stock), and such
stockholder’s holding period (i.e., acquired date) in the
shares of the common stock received should include the holding period in the
shares of the common stock surrendered. Treasury regulations promulgated under
the Internal Revenue Code provide detailed rules for allocating the tax basis
and holding period of the shares of the common stock surrendered to the shares
of the common stock received pursuant to the reverse stock split. Stockholders
who acquired their shares of common stock on different dates and at different
prices should consult their tax advisors regarding the allocation of the tax
basis and holding period of such shares.
A
stockholder who receives cash in lieu of a fractional share of the common stock
pursuant to the reverse stock split generally should recognize capital gain or
loss in an amount equal to the difference between the amount of cash received
and the holder’s tax basis in the shares of the common stock surrendered that is
allocated to such fractional share of the common stock. Such capital gain or
loss should be long term capital gain or loss if the holder’s holding period for
the common stock surrendered exceeded one year at the Effective
Time.
Information Reporting and Backup
Withholding. Information returns generally will be required to
be filed with the IRS with respect to the receipt of cash in lieu of a
fractional share of the common stock pursuant to the reverse stock split. In
addition, stockholders may be subject to a backup withholding tax (at the
current applicable rate of 28%) on the payment of such cash if they do not
provide their taxpayer identification numbers in the manner required or
otherwise fail to comply with applicable backup withholding tax rules. Backup
withholding is not an additional tax. Any amounts withheld under the backup
withholding rules may be refunded or allowed as a credit against the
stockholder’s federal income tax liability, if any, provided the required
information is timely furnished to the IRS.
THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE AMENDMENT TO RESTATED
CERTIFICATE OF INCORPORATION THAT,
IF FILED WITH THE SECRETARY OF STATE OF DELAWARE AT THE DISCRETION OF THE BOARD
OF DIRECTORS, WOULD (A) EFFECT A REVERSE STOCK SPLIT OF THE COMPANY’S COMMON
STOCK AT A REVERSE SPLIT RATIO OF BETWEEN 1-FOR-5 AND 1-FOR-20, AS DETERMINED BY
THE BOARD OF DIRECTORS, AND (B) DECREASE THE NUMBER OF AUTHORIZED SHARES OF THE
COMPANY’S COMMON STOCK ON A BASIS PROPORTIONAL TO THE REVERSE SPLIT RATIO
APPROVED BY THE BOARD OF DIRECTORS.
Security
Ownership Of Certain Beneficial Owners And Management
The
following table sets forth certain information regarding the ownership of the
Company’s common stock as of the Record Date by: (i) each director
and nominee for director; (ii) each of the named executive officers named in the
Summary Compensation Table; (iii) all named executive officers and directors of
the Company as a group; and (iv) all those known by the Company to be beneficial
owners of more than five percent of its Class A common stock and Class B common
stock.
|
|
Class A common stock
|
|
|
Class B common stock
|
|
Name and Address of Beneficial Owner
|
|
Amount and Nature
of Beneficial
Ownership(1)
|
|
|
Percent of
Class
|
|
|
Amount and Nature
of Beneficial
Ownership(1)
|
|
|
Percent of
Class
|
|
Eagle
River Satellite Holdings, LLC
2300
Carillon Point,
Kirkland,
Washington 98033
|
|
|
68,056,037 |
(3)(4)(5) |
|
|
43.4%
|
|
|
|
44,360,000
|
|
|
|
82.7%
|
|
James
D. Dondero, Highland Capital Management, L.P., and affiliates
Two
Galleria Tower
13455
Noel Road, Suite 800
Dallas,
Texas 75240
|
|
|
38,853,419 |
(7) |
|
|
25.2%
|
|
|
|
—
|
|
|
|
—
|
|
CDR-Satco
LLC
c/o
Clayton, Dubilier & Rice
Fund
VI Limited Partnership
1403
Foulk Road, Suite 106
Wilmington,
Delaware 19803
|
|
|
13,928,649 |
(6) |
|
|
9.0%
|
|
|
|
—
|
|
|
|
—
|
|
Mente,
LLC
2365
Carillon Point,
Kirkland,
Washington 98033
|
|
|
9,300,000 |
(5)(8)(9) |
|
|
6.0%
|
|
|
|
9,300,000
|
|
|
|
17.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named
Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
P. Corkery
|
|
|
152,050 |
(10) |
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
Craig
Jorgens
|
|
|
862,992 |
(10) |
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
John
L. Flynn
|
|
|
405,583 |
(10) |
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
David
Bagley
|
|
|
278,347 |
(10) |
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
Robert
S. Day, Jr.
|
|
|
487,295 |
(10) |
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Craig
O. McCaw
|
|
|
69,149,069 |
(2)(3)(4)(5)(10)(11) |
|
|
32.8%
|
|
|
|
44,360,000
|
|
|
|
82.7%
|
|
Samuel
L. Ginn
|
|
|
326,717 |
(10) |
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
Nicolas
Kauser
|
|
|
0 |
|
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
Barry
L. Rowan
|
|
|
135,000 |
(10) |
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
H.
Brian Thompson
|
|
|
107,500 |
(10) |
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
David
Wasserman
|
|
|
0 |
((12)( |
|
|
*
|
|
|
|
—
|
|
|
|
—
|
|
Directors
and Executive Officers as a Group (11 persons)
|
|
|
71,904,553 |
(2)(3)(4)(5)(10)(11) |
|
|
33.8%
|
|
|
|
44,360,000
|
|
|
|
82.7%
|
|
* Less
than one percent of the outstanding Class A common stock.
(1) Beneficial
ownership is determined in accordance with the rules of the SEC and generally
requires that a person have or share voting or investment power with respect to
the securities in question. Shares of common stock issuable upon the
conversion of shares or the exercise of options and warrants that are
exercisable or convertible within 60 days of the date of this table are deemed
to be beneficially owned by the holder of such securities but are not
outstanding for the purpose of computing the percentage ownership of any other
stockholder. As of the Record Date, the Company had 154,407,549
shares of Class A common stock and 53,660,000 shares of Class B common stock
issued and outstanding.
(2) Includes the shares
beneficially owned by Eagle River Satellite Holdings, LLC. Mr. McCaw
is the sole manager and beneficial member of Eagle River Investments, LLC, which
is the sole member of Eagle River Satellite Holdings, LLC.
(3) Includes Class A common
stock into which the Class B common stock held by Eagle River Satellite Holdings
is convertible on a share-for-share basis, at the discretion of Eagle River
Satellite Holdings, LLC.
(4) Includes 3,000,000 shares
of Class A common stock that Eagle River Investments, LLC may acquire, at an
exercise price of $0.01 per share, upon exercise of a warrant that expires on
December 12, 2012.
(5) Holders of Class B common
stock are entitled to ten votes per share on each matter submitted to a vote of
stockholders, as opposed to one vote per share of Class A common
stock. For Eagle River Satellite Holdings, LLC and Mente, LLC, the
common stock beneficially owned represents approximately 67.3% and 13.5%,
respectively, of the combined voting power of both classes of our common
stock.
(6) CDR-Satco LLC shares
voting and dispositive power over the Company’s shares owned by CDR-Satco LLC
with Clayton, Dubilier & Rice Fund VI Limited Partnership (“Fund VI”),
CD&R Associates VI Limited Partnership (“Associates VI LP”), and CD&R
Investment Associates VI, Inc. (“Associates VI, Inc.”). Fund VI is
the sole member of CDR-Satco LLC. Associates VI LP is the general
partner of Fund VI. Associates VI, Inc. is the general partner of
Associates VI LP. As a result, each of Fund VI, Associates VI LP and
Associates VI, Inc. may be deemed to be the beneficial owner of the shares owned
by CDR-Satco LLC. Each of Associates VI LP and Associates VI, Inc. disclaims
beneficial ownership of those shares. Associates VI, Inc. is managed
by a board of directors comprised of over fifteen individuals, and all board
action relating to the voting or disposition of these shares requires approval
of a majority of the board. As a result, no person controls the
voting and disposition of Associates VI, Inc. with respect to the shares shown
as beneficially owned by CDR-Satco LLC. Does not include 135,000
options to purchase shares of Class A common stock exercisable within 60 days
issued to Clayton, Dubilier & Rice, Inc., as assignee of compensation to Mr.
Wasserman. Each of CDR-Satco LLC, Fund VI, Associates VI LP and
Associates VI, Inc. disclaims beneficial ownership of those
options.
(7) Based
on information contained in Schedule 13/D/A filed with the SEC on November 3,
2008. Includes 38,853,419 shares of Class A common stock
beneficially owned and/or held by or for the account of James D. Dondero,
Highland Credit Strategies Fund (“Credit Strategies Fund”); Highland Equity
Opportunities Fund (“Equity Opportunities”); Highland Multi-Strategy Onshore
Master SubFund, L.L.C. (“Multi-Strategy SubFund”); Highland Multi-Strategy Fund
GP, L.P. (“Multi-Strategy Fund GP”); Highland Multi-Strategy Master Fund, L.P.
(“Multi-Strategy Fund”); Highland Multi-Strategy Fund GP, L.L.C.
(“Multi-Strategy Fund GP LLC”) and Highland Capital Management, L.P. (“Capital
Management”). Mr. Dondero may be deemed to be an indirect beneficial
owner of shares of Class A Common Stock beneficially owned and/or held by or for
the account or benefit of (i) Credit Strategies Fund; (ii) Equity Opportunities
(iii) Multi-Strategy SubFund; (iv) Multi-Strategy Fund; (v) Multi-Strategy Fund
GP; (vi) Multi-Strategy Fund GP LLC; and (vii) Capital
Management. Multi-Strategy Fund is the managing member of
Multi-Strategy SubFund. Multi-Strategy Fund may be deemed to
beneficially own shares owned and/or held by and/or for the account and/or
benefit of Multi-Strategy SubFund. Multi-Strategy Fund GP is the
general partner of Multi-Strategy Fund. Multi-Strategy Fund GP may be
deemed to beneficially own shares owned and/or held by and/or for the account
and/or benefit of Multi-Strategy Fund. Multi-Strategy Fund GP LLC is
the general partner of Multi-Strategy Fund GP. Multi-Strategy Fund GP
LLC may be deemed to beneficially own shares owned and/or held by and/or for the
account and/or benefit of Multi-Strategy Fund GP. Capital Management
serves as an investment adviser and/or manager to other persons, including
Credit Strategies Fund, Equity Opportunities and Multi-Strategy
SubFund. Capital Management may be deemed to beneficially own shares
owned and/or held by and/or for the account and/or benefit of other persons,
including Credit Strategies Fund, Equity Opportunities and Multi-Strategy
SubFund. Strand Advisors, Inc. (“Strand”) is the general partner of
Capital Management. Strand may be deemed to beneficially own shares
owned and/or held by and/or for the account and/or benefit of Capital
Management. Mr. Dondero is the President and a director of Strand.
Mr. Dondero may be deemed to beneficially own shares owned and/or held by and/or
for the account and/or benefit of Strand. Mr. Dondero expressly
disclaims beneficial ownership of shares of Class A Common Stock beneficially
owned and/or held by or for the account or benefit of Credit Strategies Fund,
Equity Opportunities, Multi-Strategy SubFund and Capital Management, except to
the extent of the pecuniary interest therein.
(8) William
H. Gates III is the sole member of Mente, LLC. The business address
for Mr. Gates is: Microsoft Corporation, One Microsoft Way, Redmond, Washington
98052.
(9) Includes Class A common
stock into which the Class B common stock held by Mente, LLC is convertible on a
share-for-share basis at the discretion of Mente, LLC.
(10) Includes beneficial
ownership of Class A common stock that may be acquired within 60 days of the
Record Date pursuant to the following options held by Mr. McCaw of 135,000, Mr.
Rowan of 135,000, Mr. Thompson of 107,500, Mr. Ginn of 185,000, Mr. Corkery of
81,250, Mr. Jorgens of 543,500, Mr. Flynn of 303,750, Mr. Bagley of 246,250 and
Mr. Day of 417,757.
(11) Includes
958,032 shares of Class A common stock held by Eagle River, Inc. Mr.
McCaw is the sole shareholder of Eagle River, Inc.
(12) Does
not include 13,928,649 shares of Class A common stock held by CDR-Satco LLC or
135,000 options to purchase shares of Class A common stock exercisable within 60
days issued to Clayton, Dubilier & Rice, Inc. as assignee of compensation to
Mr. Wasserman. Mr. Wasserman disclaims beneficial ownership of the
shares held by CDR-Satco LLC and the options to purchase shares held by Clayton,
Dubilier & Rice, Inc.
Equity
Compensation Plan Information
Set forth
below is information concerning our equity compensation plans, for which the
Company’s common stock has been authorized for issuance, as of December 31,
2008.
Plan Category
|
|
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
|
|
|
Weighted
average
exercise price
of outstanding
options,
warrants and
rights
|
|
|
Number of securities
remaining available
for future issuance
under equity
compensation plans (1)
|
|
Equity
compensation plans approved by security holders:
|
|
|
|
|
|
|
|
|
|
2000
Stock Incentive Plan as Amended and Restated effective June 15, 2007
(“Plan”)
|
|
|
|
|
|
|
|
|
|
Class A
common stock options
|
|
|
12,773,500 |
|
|
$ |
4.01 |
|
|
|
— |
|
Class B
common stock options
|
|
|
1,625,000 |
|
|
$ |
4.45 |
|
|
|
— |
|
Subtotal
|
|
|
14,398,500 |
|
|
$ |
4.06 |
|
|
|
4,334,438 |
(1) |
ICO-Teledesic
Global Limited 2000 Stock Incentive Plan (“ITGL
Plan”)(2)
|
|
|
222,573 |
|
|
$ |
10.91 |
|
|
|
— |
|
Equity
compensation plans not approved by security holders (3)
|
|
|
240,000 |
|
|
$ |
3.95 |
|
|
|
— |
|
Total
|
|
|
14,861,073 |
|
|
$ |
4.16 |
|
|
|
4,334,438 |
|
(1)
|
The
securities that remain available for future issuance under the Plan may be
issued as either Class A common stock or Class B common
stock.
|
(2)
|
Under
the terms of the merger with ICO Global Limited on November 28, 2001, the
ITGL Plan and all the outstanding options under the plan were assumed by
the Company. All the options outstanding under the ITGL Plan
are exercisable for the Company’s Class A common
stock. Effective December 31, 2005, the Company will not issue
any further awards under the ITGL
Plan.
|
(3)
|
Options
granted under other equity compensation plans not approved by security
holders consist of the following:
|
Name
|
|
Number of securities
underlying option
|
|
|
Exercise price
|
|
Expiration date
|
Clayton,
Dubilier & Rice, Inc. (a)
|
|
|
150,000 |
|
|
$ |
4.25 |
|
November 14, 2015
|
Clayton,
Dubilier & Rice, Inc. (a)
|
|
|
30,000 |
|
|
$ |
5.85 |
|
October
1, 2016
|
Clayton,
Dubilier & Rice, Inc. (a)
|
|
|
30,000 |
|
|
$ |
3.50 |
|
October
1, 2017
|
Clayton,
Dubilier & Rice, Inc. (a)
|
|
|
30,000 |
|
|
$ |
1.01 |
|
October
1,
2018
|
|
a.
|
Represents
options granted to Clayton, Dubilier & Rice, Inc. to acquire Class A
common stock as assignee of compensation to David
Wasserman. These options vest 25% after each full year of board
service, fully vesting after four years of service. The grant
date for each option is the date that is 10 years prior to the expiration
date. Mr. Wasserman disclaims beneficial ownership of the
options to purchase shares held by Clayton, Dubilier & Rice,
Inc.
|
Section
16(A) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires the Company’s directors and executive
officers, and persons who own more than ten percent of a registered class of the
Company’s equity securities, to file with the SEC initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors and greater than ten percent
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
To the
Company’s knowledge, based solely on a review of the copies of such reports
furnished to the Company and written representations that no other reports were
required, during the fiscal year ended December 31, 2008, all Section 16(a)
filing requirements applicable to its officers, directors and greater than ten
percent beneficial owners were complied with except Mr. James Dondero,
a 10% stockholder, filed one late report covering one
transaction. Affiliates of Mr. Dondero were also listed as reporting
persons on that report.
Executive
Officers
The
following table sets forth certain information about our executive officers,
including their ages as of the Record Date.
|
|
|
|
Position
held with the Company
|
Michael
P. Corkery
|
|
46
|
|
Acting
Chief Executive Officer, and Executive Vice President, Chief Financial
Officer
|
Craig
Jorgens
|
|
54
|
|
President
|
John
L. Flynn
|
|
44
|
|
Executive
Vice President, General Counsel and Corporate Secretary
|
David
Bagley
|
|
50
|
|
Senior
Vice President – Corporate Strategy
|
Robert
S. Day, Jr.
|
|
50
|
|
Senior
Vice President – Space Systems
|
Suzanne
Hutchings Malloy
|
|
47
|
|
Senior
Vice President – Regulatory Affairs
|
David
Zufall
|
|
48
|
|
Senior
Vice President – Network Systems
|
Michael P. Corkery—Acting
Chief Executive Officer, Executive Vice President and Chief Financial Officer of
ICO Global Communications (Holdings) Limited and ICO North America, Inc. He
joined ICO in November, 2007, and assumed the Acting Chief Executive Officer
role in February, 2009. Mr. Corkery served as Chief Financial Officer of CURRENT
Group, LLC from January 2006 until November 2007. From August 2002 until August
2005, Mr. Corkery was Vice President of Operations Finance for Nextel
Communications, Inc. where he led operations finance and was responsible for all
decision support, financial planning and analysis activities. He previously
worked for Berliner Communications, Inc., XO Communications, Inc. and AT&T
Wireless Services in similar capacities. Mr. Corkery holds a Bachelor's degree
in accounting from St. Bonaventure University and received an Executive
Leadership Development certification from the McDonough School of Business at
Georgetown University.
Craig
Jorgens—President. Mr. Jorgens has over 17 years of experience
in the telecommunications industry and has been the Company’s President since
2002. Mr. Jorgens also serves as the President of ICO North
America. From 2001 until joining the Company, he was a principal in
the telecommunications group at the private equity firm of Texas Pacific
Group. From 1992 to 2000 he was Executive Director of Corporate
Development at AirTouch Communications, one of the world’s largest wireless
operators, where he was responsible for mergers and acquisitions and new
business development both domestically and internationally. He also
has experience in management consulting and investment banking. Mr.
Jorgens is a graduate of Harvey Mudd College and graduated from Carnegie
Mellon’s Graduate School of Industrial Administration.
John L. Flynn—Executive Vice
President, General Counsel and Corporate Secretary. On May 8, 2006,
Mr. Flynn became the Executive Vice President, General Counsel and Corporate
Secretary of the Company and ICO North America. From July 2003 until
April 2006, Mr. Flynn was counsel to the law firm of Wilmer Cutler Pickering
Hale and Dorr LLP, where his practice focused primarily on communications and
intellectual property law. From November 2000 until January 2003, Mr.
Flynn was Vice President and Deputy General Counsel of Commerce One, Inc., a
software company, where he co-managed the legal department and advised the
company on corporate, regulatory and litigation matters. Mr. Flynn
also served as General Counsel and Vice President of Government Affairs of rStar
Broadband Networks, Inc. and, before that, was an associate at Munger, Tolles
& Olson. Mr. Flynn began his legal career by serving as a law
clerk to Judge Edward R. Becker on the U.S. Court of Appeals for the Third
Circuit and then to Justices Byron R. White and John Paul Stevens on the U.S.
Supreme Court. Mr. Flynn graduated from Stanford University with a
Bachelor’s degree in Political Science, with distinction, and a Master’s degree
in International Policy Studies, and he holds his law degree, magna cum laude,
from the Georgetown University Law Center.
David Bagley—Senior Vice
President, Corporate Development. Mr. Bagley has been Senior Vice
President, Corporate Development since July 2002. Mr. Bagley has over
20 years of experience in the telecommunications industry. Mr. Bagley
also serves as ICO North America’s Senior Vice President, Corporate
Development. From June 2000 to June 2001, he was Vice President of
Business Development for IPWireless, where he was in charge of spectrum
acquisition, strategic partnering and regulatory affairs. Mr. Bagley
spent four years at AirTouch and Vodafone, which acquired AirTouch in
1999. He held various Corporate Development positions working on
transactions throughout the world. His most recent position was head
of Corporate Development for the Americas for Vodafone. Prior to
AirTouch, Mr. Bagley spent eight years at SBC Communications in finance and
Corporate Development positions. Mr. Bagley holds a Bachelor’s degree
in Accounting and Economics from Pacific University and a Master’s degree in
International Management from Thunderbird Graduate School of International
Management.
Robert S. Day, Jr.—Senior
Vice President, Space Systems. Mr. Day has been has been Senior Vice
President, Space Systems since July 2002. Mr. Day has been with the
Company for over eight years and has over 27 years of telecommunications
industry experience. Mr. Day serves as Senior Vice President, Space
Systems for both the Company and ICO North America and is responsible for the
design, procurement, deployment, and operation of the ICO North America space
segment. The space segment includes the ICO North America satellite,
launch vehicle, gateway, satellite control center, and satellite
operations. His areas of expertise include satellite design,
integration, test, launch, operations, and system engineering. Prior
to joining the Company, he was the Vice President of Space Technology for
Teledesic LLC. Mr. Day also spent 19 years at Hughes Space and
Communications where he provided system engineering leadership or served as
program manager for several major geosynchronous satellite
programs. He led the integration, test, and launch team for the first
HS601 satellite, and served as the Deputy Business Unit Leader for Spacecraft
Design and Production at Hughes. Mr. Day holds a Bachelor’s degree in
General Engineering from the University of Illinois, a Master’s degree in
Mechanical Engineering from UCLA, and a certificate in Astronautical Engineering
from UCLA.
Suzanne Hutchings
Malloy—Senior Vice President, Regulatory Affairs. Ms.
Hutchings Malloy has been Senior Vice President, Regulatory Affairs since June
2005. Ms. Hutchings Malloy has over 17 years of experience in the
telecommunications industry. Prior to joining the Company in 2000 and
until 2002, Ms. Malloy served as Senior Regulatory Counsel for Teledesic LLC,
where she directed the company’s licensing and regulatory efforts among various
industry and regulatory constituencies, including the Federal Communications
Commission (FCC), the U.S. State Department, and the International
Telecommunication Union (ITU). At the Company and ICO North America
(serving in a similar capacity), in addition to general regulatory activities,
her work has included securing regulatory approval for new hybrid
satellite-terrestrial networks, helping maintain spectrum assets, and advocating
for the companies and their subsidiaries in major rulemaking and adjudicatory
proceedings before the FCC. She has also served on numerous U.S.
delegations to regional and international spectrum management treaty
conferences. She has also worked as an Attorney-Advisor at the FCC,
where she participated in country-to-country treaty negotiations, World Trade
Organization multilateral negotiations, and rulemaking proceedings before the
FCC as a satellite industry expert, focusing primarily on licensing
direct-to-home satellite operators. Ms. Malloy holds a Bachelor of
Arts degree in History from Davidson College and is a graduate of Harvard Law
School.
David Zufall—Senior Vice
President, Network Systems. Mr. Zufall has been Senior Vice
President, Network Systems since January 2, 2006. During the 12 years
prior to joining the Company, Mr. Zufall served in a number of technical and
operational capacities at Nextel Communications, Inc., including Vice President,
Infrastructure Technology Development and Vice President, Network
Architecture/Chief Architect. Nextel operated a nationwide digital
cellular network in the United States. Mr. Zufall had responsibility
for working with partners in Nextel’s strategy and marketing divisions to
establish Nextel’s long-term network and technology roadmap. Mr.
Zufall holds a Bachelor of Sciences degree in Electrical Engineering and an
M.B.A. in Finance and International Business, both from Columbia
University.
Executive
Compensation
Compensation
Discussion and Analysis
Overview
The primary goals of the Company’s
executive officer compensation program are to tie compensation to achievement of
specified performance objectives, to attract and retain talented and dedicated
executives, and to align the Company’s executive officers’ interests with those
of its stockholders. The elements of this executive compensation
program (some or all of which may be applicable to any particular executive)
include the following: base salary, annual bonus, equity incentive compensation
and other compensation. Each element is designed to achieve one or
more of the Company’s goals regarding performance, retention and
alignment.
While the Compensation Committee sets
and oversees compensation policy for all of the Company’s executive officers and
directors, this discussion and analysis is limited to compensation granted to
the Company’s named executive officers.
The Company has entered into employment
agreements with each of its named executive officers that, as modified by the
Board of Directors, set the salary and, where applicable (currently in the case
of Mr. Bagley and Mr. Day), targets for an annual discretionary bonus for the
applicable calendar year.
Compensation
Objectives
The Compensation Committee designs
compensation packages that seek to serve the goals of performance, alignment and
retention.
Performance
One goal
of the Company’s executive compensation program is to reward individual
performance and contributions toward Company performance over a long period of
time. At this stage of its development, the Company measures its
performance primarily based on achievement of key strategic goals such as the
development of its satellite system and achievement of other operational
milestones. The following elements of compensation are designed to
achieve this goal:
|
·
|
equity
incentive compensation in the form of stock options and restricted stock
awards, the value of which is contingent upon the performance of the
Company’s share price, and subject to vesting schedules that require
continued service with the Company;
and
|
|
·
|
in
the case of Mr. Bagley and Mr. Day, a discretionary cash bonus, provided
under each executive’s employment agreement, based upon individual and
Company performance.
|
Base salary amounts and, for certain
named executive officers, cash bonuses are designed to reward annual
achievements based upon responsibilities, demonstrated leadership, and
management experience and effectiveness. The Company does not
typically provide annual cash bonuses for its most senior executive
officers. Instead, the Company pays competitive salaries for these
officers and provides their remaining compensation in long-term equity incentive
awards.
Alignment
The
Company seeks to align the interests of its named executive officers with those
of its stockholders by evaluating executive performance on the basis of key
operational measurements which the Company believes closely correlate to
long-term stockholder value. These measurements include development
of the Company’s satellite and ground systems, development of strategic
relationships, furtherance of the Company’s business plan and other corporate
and operational objectives. The element of compensation that most
directly aligns the interests of named executive officers with stockholders is
equity incentive compensation, which links a significant portion of compensation
to stockholder value because the total value of those awards is tied to stock
price appreciation.
Retention
The
Company competes for executive talent in the telecommunications
industry. The Company intends to pay competitive salaries as well as
a competitive total compensation package. To encourage retention of
its named executive officers, the Company makes a substantial portion of their
compensation dependent upon continued service. The Company’s equity
incentive compensation awards require long-term continued service to receive
any, or the maximum, payout.
Implementing
the Company’s Objectives
Determining
Compensation
The
Compensation Committee determines compensation for named executive officers
after reviewing the overall performance of the Company and evaluating executive
performance during the year. The Compensation Committee evaluates
executive performance based upon leadership, operational performance,
responsibilities, and career with the Company. Specific factors
affecting compensation decisions for the Company’s named executive officers
include:
|
·
|
achievement
of specific operational goals for the Company, including sustained
progress in furtherance of its business plan;
and
|
|
·
|
achievement
of strategic objectives such as entering into key transactions, achieving
financial and other corporate goals, and pursuing technological
innovation.
|
The
Company considers competitive market compensation paid by other communications
companies, but does not attempt to maintain a certain target percentile within a
peer group or otherwise rely on data to determine executive
compensation. The Company maintains flexibility in its compensation
program and in the assessment process which enables the Company to respond to
and adjust for its evolving business environment.
The
Company designs the mix of compensation elements to reward recent results and to
motivate long-term performance through a combination of cash and equity
incentive awards. The Company also seeks to balance compensation
elements that are based on operational and strategic measures with others that
are based on the performance of its stock. The Company believes the
most important indicator of whether its compensation objectives are being met is
its ability to motivate and to retain its named executive officers on a
cost-effective basis.
Management’s
Role
Management coordinates the annual
review of the compensation programs for all of the Company’s named executive
officers. This includes an evaluation of individual and Company
performance, competitive practices and trends, and various compensation
issues. Based on the outcomes of this review, management makes
recommendations to the Compensation Committee regarding the compensation of each
of the named executive officers, other than the Chief Executive
Officer. The Compensation Committee believes that input from
management provides useful information and points of view to assist the
Compensation Committee in making compensation decisions. Although the
Compensation Committee receives information and recommendations regarding the
design and level of compensation of the Company’s named executive officers from
management, the Compensation Committee makes the final decisions as to the plan
design and compensation levels for these executives.
Compensation
Committee
The Compensation Committee has overall
responsibility for the review, evaluation and approval of programs to ensure
that they are reasonable, consistent with the Company’s stated compensation
objectives and consistent with its business goals and objectives. The
Board of Directors established the Compensation Committee in December
2006. The current members of the Compensation Committee are Mr.
Thompson, who serves as the chairman, and Mr. Rowan.
The Compensation Committee has
authority and responsibility for the review, evaluation and approval of the
compensation for all of the Company’s executive officers and
directors. This includes establishing compensation objectives, and
policies and plans covering the Company’s executive officers. The
Compensation Committee also conducts an annual review of the Chief Executive
Officer and approves his annual compensation.
Annual
Review of Executive Compensation
The pay of each executive officer is
not determined by a formula, but in comparison to market and within our Company
to positions with similar responsibilities and its impact on
operations. Each year, the Compensation Committee evaluates each
named executive officer’s total compensation, equity holdings and merit history,
including management’s recommendations regarding the appropriate compensation
for each named executive officer other than the Chief Executive
Officer. In making its decisions on each named executive officer’s
compensation, the Compensation Committee considers the nature and scope of all
elements of the executive officer’s total compensation package,
responsibilities, and his or her effectiveness in supporting the Company’s key
strategic, operational and financial goals. The Compensation
Committee also considers recommendations from the Chief Executive Officer
regarding total compensation for those officers reporting directly to
him.
For 2008, the Compensation Committee
reviewed the information prepared by management, considered each executive’s
contribution to the achievement of strategic goals and objectives, the
executive’s overall compensation and other factors to determine the appropriate
level and mix of incentive compensation.
Compensation
Consultant
In 2008, the Compensation Committee
retained the consulting services of Radford to assist in the evaluation of our
compensation program for our directors and named executive
officers. Radford reports directly to the Compensation Committee, and
the Compensation Committee has the authority to retain and dismiss the
compensation consultants. The Radford analysis will be used in 2009
as part of the Compensation Committee’s analysis of appropriate
compensation.
Equity
Grant Practices
The
Company’s equity grant process authorizes the Company’s Chief Executive Officer
to grant options to newly hired employees and consultants who do not directly
report to him and are not reporting persons for purposes of Section 16 of the
Exchange Act, subject to certain limitations. The option must have an
exercise price equal to the closing share price on the date of grant, the number
of shares covered by the option are limited based on the position (up to 250,000
shares for an employee who is a senior vice president), and the total number of
shares covered by options granted by the Chief Executive Officer cannot exceed
2,000,000 shares unless further approval is obtained from the Board of
Directors. In 2007, the Compensation Committee amended this grant
process to further enhance the predictability and administrative simplicity of
the grant process. Currently, option grants for new hires
eligible for an option grant under the grant process are made on the 15th of each
month that is on or after their service start date, with an exercise price equal
to the fair market value of the Company’s stock on the date of
grant. For new hires not subject to the process described above, the
Board of Directors (either by itself or through the Compensation Committee)
continues to approve the relevant grants, with an exercise price equal to the
closing share price on the grant approval date.
Section
162(m) of the Internal Revenue Code imposes a $1,000,000 limit on the amount
that a public company may deduct for compensation paid to the Company’s Chief
Executive Officer or any of the Company’s four most highly compensated executive
officers (other than the Chief Executive Officer and Chief Financial Officer)
who are employed as of the end of the year. This limitation does not
apply to compensation that meets the requirements under Section 162(m) for
“qualifying performance-based” compensation.
Employment
Letters and Agreements
The Company has an employment letter or
agreement with each of our named executive officers that, among other things,
provides for a target base salary, subject to adjustment by the Compensation
Committee from time to time. Each of our named executive officers
serves at the will of the Board of Directors, and the Company may terminate each
executive’s employment at any time. If the Company terminates the
employment of Mr. Bagley without cause, the Company must pay him 30 days’ salary
during that period (or may elect to give 30 days’ notice in the
alternative). If the Company terminates the employment of Mr. Day
without cause, the Company must pay him six month’s salary during that period
(or may elect to give six month’s notice in the alternative). If the
Company terminates Messrs. Bryan, Corkery, Jorgens, or Flynn without cause,
the Company must pay continued salary and vesting of options and restricted
stock (if applicable) for a period of six months. In December 2008,
the employment letters and agreements for the named executive officers were
amended to satisfy requirements under Section 409A of the Internal Revenue
Code. For additional information about the employment agreements, see
“Potential Payments Upon Termination or Change-in-Control” below.
Compensation
Elements
The Company’s executive compensation
program includes the following elements: base salary, annual bonus, and equity
incentive compensation (which collectively represent an executive officer’s
total direct compensation, as reported below) and other
compensation. For 2008, the mix of the total direct compensation
elements for each of the named executive officers is as follows:
Percent
Of Total Direct Compensation
Officer
|
|
Base Salary
|
|
|
Annual Bonus and
Non-Equity
Incentive
Compensation
|
|
|
Equity and
Long-Term
Incentive Awards
|
|
Mr.
Bryan*
|
|
|
28.5 |
% |
|
|
0.0 |
% |
|
|
71.5 |
% |
Mr.
Corkery*
|
|
|
62.5 |
% |
|
|
0.0 |
% |
|
|
37.5 |
% |
Mr.
Jorgens
|
|
|
55.6 |
% |
|
|
0.0 |
% |
|
|
44.4 |
% |
Mr.
Flynn
|
|
|
48.2 |
% |
|
|
0.0 |
% |
|
|
51.8 |
% |
Mr.
Bagley
|
|
|
44.6 |
% |
|
|
12.7 |
% |
|
|
42.6 |
% |
Mr.
Day
|
|
|
34.1 |
% |
|
|
12.8 |
% |
|
|
53.2 |
% |
* Effective February 5, 2009, Mr. Bryan
resigned his position as Chief Executive Officer and became a consultant to the
Company. Effective February 5, 2009, Mr. Corkery was named acting
Chief Executive Officer and Executive Vice President, Chief Financial Officer by
the Board of Directors. For additional information, see “Potential
Payments Upon Termination or Change-In-Control, Employment Letters and
Agreements” below.
Base
salaries for the Company’s named executive officers are established based on the
scope of their responsibilities, taking into account the Compensation
Committee’s telecommunications industry experience and judgment in its
determination of competitive salaries paid by other companies for similar
positions. During 2008, the Compensation Committee increased the 2008
base salary amounts for Messrs. Bryan, Corkery and Bagley by approximately 4.5%,
which in the case of Mr. Corkery was pro-rated based upon his employment
commencement date with the Company. The Company increased the 2008
base salary amount for Messrs. Flynn and Day by approximately
10%.
The
employment agreements for Messrs. Bagley and Day provide that they are eligible
for a discretionary annual bonus based on 30% of each executive’s
salaries. These awards are intended to compensate Messrs. Bagley and
Day for achieving financial and operational goals and for achieving individual
annual performance objectives. These objectives relate generally to
strategic factors such as progress towards the furtherance of the Company’s
business plan. The primary objectives for Mr. Bagley were the
effective negotiation and closing of important agreements, which included those
for the development of technology and infrastructure for the ICO mim offering as
well as satellite and in-orbit insurance. The primary objective for
Mr. Day was the successful launch of our satellite. In addition to
bonus awards provided for in executive employment agreements, the Compensation
Committee has the authority to award discretionary annual bonuses and to set the
terms and conditions of those bonuses. It is the Company’s current
policy not to award bonuses to its most senior executive officers, other than to
the extent provided under an applicable employment agreement.
In March
2008, Mr. Bagley received a bonus of $90,000, representing 33% of his 2007 base
salary. Mr. Day received a bonus of $112,167, representing 45% of his
2007 base salary, which was awarded and paid in two installments. In
March 2008, Mr. Day received $59,822, representing 24% of his 2007 base salary,
for progress toward launching the ICO G1 satellite. The
Compensation Committee decided not to award the remainder of Mr. Day’s targeted
bonus at that time because ICO’s satellite had not yet been launched, but
offered to award an additional bonus targeted at 45% of Mr. Day’s 2007 base
salary (when combined with the bonus awarded in March) if Mr. Day and his team
accomplished a successful launch of ICO G1 and satisfactory declaration that ICO
G1 was operational. In May 2008, after the successful launch of ICO
G1 and declaration that ICO G1 was operational, Mr. Day received the additional
bonus payment of $52,345, representing 21% his 2007 base salary. For additional
information about the employment agreements, see “Potential Payments Upon
Termination or Change-in-Control” below.
In April
2009, Mr. Bagley received a bonus of $86,613 and Mr. Day received a bonus of
$82,256, representing 30% of their respective 2008 base salaries.
Equity
Incentive Compensation
The
Company’s equity incentive compensation program consists of stock options and
restricted stock awards. The Company grants equity awards as
long-term incentive compensation for its named executive
officers. Equity awards allow the executive to acquire and maintain
stock ownership in the Company and encourage the executive to remain employed by
the Company to satisfy the vesting conditions. The equity awards are
granted under the Plan. The Plan permits the grant of options and
stock awards.
As of
January 1, 2006, the Company records stock-based compensation expense on stock
options and restricted stock awards issued to its named executive officers in
accordance with Statement of Financial Accounting Standards 123 (revised 2004),
Share-Based Payment
(“SFAS 123R”).
In 2008,
2007 and 2006, the Company granted stock options to each of its named executive
officers. The stock options require time-based vesting and vest in
equal installments over a 4-year period based upon continued employment or
service and expire 10 years after the date of grant. For further
detail regarding the amount of stock options granted to the Company’s named
executive officers in 2008, please refer to the “Grants of Plan-Based Awards”
table.
In 2007,
the Company awarded restricted stock awards to each of its named executive
officers as part of a program extended to the Company’s employees in
general. The restricted stock awards combine performance and
time-based conditions to encourage both the meeting of key Company goals and
retention. The restricted stock awards vest in accordance with
specific performance conditions. The performance conditions are: (i)
certify to the Federal Communications Commission (“FCC”) that ICO G1 is
operational (“ICO G1 Condition”); (ii) demonstrate DVB-SH/GMR through the
Company’s Alpha Trial (“Alpha Trial Condition”); (iii) obtain Ancillary
Terrestrial Component (“ATC”) authorization from the FCC (“ATC Condition”); and
(iv) retain provisional authority in Europe (“Provisional Authority
Condition”). Different named executive officers have different
amounts of restricted stock awards allocated to the various performance
conditions depending upon their responsibilities. The percentages
allocated to each performance condition for our named executive officers range
from 0-70%. The portion of restricted stock awards allocated to a
particular performance condition vest 50% when that condition is
achieved. After the performance condition is achieved, 25% of shares
allocated to that condition vest one year after the performance condition is
achieved and the remaining 25% of shares allocated to that condition vest two
years after the performance condition is achieved, in each case, provided the
individual performs continuous services for the Company through the vesting
date. The ICO G1, Alpha Trial and Provisional Authority Conditions
were met in 2008, and the Compensation Committee extended the date to meet the
ATC Condition until January 2009, when the Company met that
condition. In 2008, the Company awarded restricted stock grants
to Messrs. Flynn and Day for extraordinary efforts and results relating to the
Company’s litigation with The Boeing Company and its subsidiary, Boeing
Satellite Systems International, Inc. The restricted stock grants to
Messrs. Flynn and Day fully vested on January 31, 2009. For further
detail regarding the stock awards granted to the Company’s named executive
officers in 2008, please refer to the “Grants of Plan-Based Awards”
table.
Each
named executive officer is eligible to participate in the health, medical and
other benefits the Company makes available to all employees. The Company pays
the monthly premiums for health, dental, vision insurance, long term disability
and life insurance for all employees. Additionally, the Company in
2008 made a non-elective employer contribution to employee 401(k) accounts equal
to 12% of the employee’s base salary, subject to Internal Revenue Service
limitations. Effective April 1, 2009, the Company’s non-elective
employer contribution to an employee’s 401(k) account was reduced to
3%. In 2008, Mr. Jorgens received an amount for tax return
preparation and the Company pays the premiums related to his supplemental life
insurance and individual disability insurance. Additionally, in 2008,
Mr. Bryan received $19,590 related to a tax gross up on his relocation expenses
and $3,812 for travel stipends, Mr. Jorgens received $5,792 for travel stipends,
Messrs. Corkery and Flynn each received $812 for travel stipends and Messrs.
Bagley and Day each received $1,292 for travel stipends.
Report
of the Compensation Committee
The Compensation Committee has reviewed
and discussed the Compensation Discussion and Analysis included in this proxy
statement with management. Based on this review and discussion, the
Compensation Committee recommended to the Board of Directors that the
Compensation Discussion and Analysis be included in this proxy
statement. The
material in this report is not “soliciting material,” is not deemed “filed” with
the SEC, and is not to be incorporated by reference into any filing of the
Company the Securities Act of 1933, as amended or the Securities Exchange Act of
1934, as amended.
Summary
Compensation Table
The
following table shows for the fiscal years ended December 31, 2008, December 31,
2007 and December 31, 2006, compensation awarded to, earned by, or paid to the
Company’s Chief Executive Officer, Chief Financial Officer and its four other
most highly compensated executive officers (“named executive
officers”).
Summary
Compensation Table for Fiscal Year 2008
Name and Principal
Position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)(1)
|
|
|
Stock
Awards
($)(2)
|
|
|
Option
Awards
($)(3)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
Change in
Pension
Value and
NQ Deferred
Comp
Earnings
($)
|
|
|
All Other
Compensation
($)(4)
|
|
|
Total
($)
|
|
J.
Timothy Bryan,
|
|
2008
|
|
|
593,450 |
|
|
|
— |
|
|
|
191,569 |
|
|
|
1,424,986 |
|
|
|
— |
|
|
|
— |
|
|
|
51,002 |
(5) |
|
|
2,261,007 |
|
Chief
Executive |
|
2007
|
|
|
568,333 |
|
|
|
— |
|
|
|
181,776 |
|
|
|
1,321,000 |
|
|
|
— |
|
|
|
— |
|
|
|
27,000 |
|
|
|
2,098,109 |
|
Officer*
|
|
2006
|
|
|
550,000 |
|
|
|
— |
|
|
|
336,062 |
|
|
|
1,172,125 |
|
|
|
— |
|
|
|
— |
|
|
|
411,292 |
(6) |
|
|
2,469,479 |
|
Michael
P. Corkery,
|
|
2008
|
|
|
327,031 |
|
|
|
— |
|
|
|
47,295 |
|
|
|
165,971 |
|
|
|
— |
|
|
|
— |
|
|
|
28,412 |
|
|
|
568,709 |
|
Executive
Vice
|
|
2007
|
|
|
39,394 |
|
|
|
— |
|
|
|
8,683 |
|
|
|
20,719 |
|
|
|
— |
|
|
|
— |
|
|
|
3,250 |
|
|
|
72,046 |
|
President,
Chief
|
|
2006
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Craig
Jorgens,
|
|
2008
|
|
|
592,800 |
|
|
|
— |
|
|
|
105,058 |
|
|
|
403,111 |
|
|
|
— |
|
|
|
— |
|
|
|
43,224 |
(7) |
|
|
1,144,193 |
|
President
|
|
2007
|
|
|
589,000 |
|
|
|
— |
|
|
|
28,696 |
|
|
|
352,673 |
|
|
|
— |
|
|
|
— |
|
|
|
36,832 |
(7) |
|
|
1,007,201 |
|
|
|
2006
|
|
|
570,000 |
|
|
|
— |
|
|
|
338,571 |
|
|
|
452,606 |
|
|
|
— |
|
|
|
— |
|
|
|
36,232 |
(7) |
|
|
1,397,409 |
|
John
L. Flynn,
|
|
2008
|
|
|
387,291 |
|
|
|
— |
|
|
|
154,858 |
|
|
|
292,159 |
|
|
|
— |
|
|
|
— |
|
|
|
28,412 |
|
|
|
862,720 |
|
Executive
Vice-
|
|
2007
|
|
|
352,083 |
|
|
|
— |
|
|
|
38,137 |
|
|
|
260,106 |
|
|
|
— |
|
|
|
— |
|
|
|
27,000 |
|
|
|
677,326 |
|
President,
General
Counsel
and
Corporate
Secretary
|
|
2006
|
|
|
212,083 |
|
|
|
— |
|
|
|
— |
|
|
|
146,117 |
|
|
|
— |
|
|
|
— |
|
|
|
22,750 |
|
|
|
380,950 |
|
David
Bagley,
|
|
2008
|
|
|
286,636 |
|
|
|
86,613 |
|
|
|
90,569 |
|
|
|
210,778 |
|
|
|
— |
|
|
|
— |
|
|
|
28,892 |
|
|
|
703,488 |
|
Senior
|
|
2007
|
|
|
274,505 |
|
|
|
90,000 |
|
|
|
28,433 |
|
|
|
160,056 |
|
|
|
— |
|
|
|
— |
|
|
|
27,000 |
|
|
|
579,994 |
|
Vice
President,
Corporate
Strategy
|
|
2006
|
|
|
263,638 |
|
|
|
79,091 |
|
|
|
— |
|
|
|
220,827 |
|
|
|
— |
|
|
|
— |
|
|
|
26,400 |
|
|
|
589,956 |
|
Robert
S. Day, Jr.
|
|
2008
|
|
|
270,032 |
|
|
|
82,256 |
|
|
|
157,338 |
|
|
|
309,424 |
|
|
|
— |
|
|
|
— |
|
|
|
28,892 |
|
|
|
847,942 |
|
Senior |
|
2007
|
|
|
245,483 |
|
|
|
112,167 |
|
|
|
45,180 |
|
|
|
209,988 |
|
|
|
— |
|
|
|
— |
|
|
|
27,000 |
|
|
|
639,818
|
|
Vice
President,
Space
Systems
|
|
2006
|
|
|
224,883 |
|
|
|
80,000 |
|
|
|
— |
|
|
|
248,859 |
|
|
|
— |
|
|
|
— |
|
|
|
26,400 |
|
|
|
580,142
|
|
*
Effective February 5, 2009, Mr. Bryan resigned his position as Chief Executive
Officer. Effective February 5, 2009, Mr. Corkery was named acting
Chief Executive Officer and Executive Vice President, Chief Financial Officer by
the Board of Directors.
(1) Amounts
reported in the Bonus column reflect discretionary cash bonuses as described in
more detail in the section entitled “Compensation Discussion and Analysis,
Compensation Elements, Annual Bonus” above.
(2) Amounts
reported in the Stock Awards column reflect the dollar amounts recognized as
stock-based compensation expense in 2008, 2007 and 2006, for financial
accounting purposes, related to restricted stock awards granted to each named
executive officer in 2008 and in prior years, before reflecting estimated
forfeitures, determined in accordance with SFAS 123R. These amounts
do not reflect the actual value that may or will be realized by the named
executive officers. See Note 9 of Notes to Financial Statements set
forth in the Company’s Form 10-K for fiscal year 2008, filed with the SEC on
March 31, 2009, for the assumptions used in determining such
amounts.
(3) Amounts
reported in the Option Awards column reflect the dollar amounts recognized as
stock-based compensation expense, for financial accounting purposes, related to
stock options granted to each named executive officer in 2008 and in prior
years, before reflecting estimated forfeitures, determined in accordance SFAS
123R. These amounts do not reflect the actual value that may or will
be realized by the named executive officers. See Note 9 of Notes to
Financial Statements set forth in the Company’s Form 10-K for fiscal year 2008,
filed with the SEC on March 31, 2009, for the assumptions used in determining
such amounts.
(4) Amounts
reported in the All Other Compensation column include a Company contribution in
2008, 2007 and 2006 of $27,600, $27,000, and $26,400, respectively, to each of
the named executive officer’s 401(k) account, as described in more detail in the
section entitled “Compensation Discussion and Analysis” above. Messrs. Corkery
and Flynn contributions in 2007 and 2006 were pro-rated based on their hire
dates of November 19, 2007 and May 8, 2006, respectively. Additionally, in
2008, Mr. Bryan received $3,812 for travel stipends, Mr. Jorgens received $5,792
for travel stipends, Messrs. Corkery and Flynn each received $812 for travel
stipends and Messrs. Bagley and Day each received $1,292 for travel
stipends.
(5) Amount
includes a tax gross up related to Mr. Bryan’s relocation expenses in the amount
of $19,590.
(6) Amount
includes moving expenses of $51,751 and taxable relocation expenses of $333,141,
which includes taxes paid on behalf of Mr. Bryan in the amount of
$115,734.
(7) Amount
includes Company paid premiums related to Mr. Jorgen’s supplemental life
insurance and individual disability insurance of $1,510 and $6,322,
respectively. Also includes $2,000 paid towards Mr. Jorgen’s tax return
preparation fees.
Grants
of Plan-Based Awards
The
following table shows for the fiscal year ended December 31, 2008, certain
information regarding grants of plan-based awards to the named executive
officers:
Grants
Of Plan-Based Awards In Fiscal 2008
Name
|
|
Grant Date
|
|
All Other Stock
Awards: Number of
Shares of Stock or
Units
(#) (1)
|
|
|
All Other Option
Awards: Number of
Securities Underlying
Options
(#) (2)
|
|
|
Exercise or Base Price of
Option Awards
($/Sh) (3)
|
|
|
Grant Date Fair
Value of Stock and
Option Awards
($) (4)
|
|
Mr.
Bryan*
|
|
12/2/08
|
|
|
— |
|
|
|
200,000 |
|
|
|
1.08 |
|
|
|
166,000 |
|
Mr.
Corkery
|
|
12/2/08
|
|
|
— |
|
|
|
100,000 |
|
|
|
1.08 |
|
|
|
83,000 |
|
Mr.
Jorgens
|
|
12/2/08
|
|
|
— |
|
|
|
100,000 |
|
|
|
1.08 |
|
|
|
83,000 |
|
Mr.
Flynn
|
|
12/2/08
|
|
|
50,000 |
|
|
|
100,000 |
|
|
|
1.08 |
|
|
|
137,000 |
|
Mr.
Bagley
|
|
12/2/08
|
|
|
— |
|
|
|
100,000 |
|
|
|
1.08 |
|
|
|
83,000 |
|
Mr.
Day
|
|
12/2/08
|
|
|
50,000 |
|
|
|
100,000 |
|
|
|
1.08 |
|
|
|
137,000 |
|
(1) Amounts
represent restricted stock awards granted under the Plan issued to Mr. Flynn and
Mr. Day in 2008 which fully vested on January 31, 2009.
(2) Options
listed were granted under the Plan and, unless otherwise indicated, vest over
four years from the date of grant, with 25% vesting in equal increments at the
end of each annual period.
(3) The
exercise price of each option award granted on December 2, 2008 is based on the
closing price of a share of the Company’s Class A common stock on the grant
date.
(4) Amounts
reflect the full grant date fair value of stock and option awards that the
Company would expense in its financial statements over the award’s vesting
schedule. See Note 9 of Notes to Financial Statements set forth in the Company’s
Form 10-K for the fiscal year 2008, filed with the SEC on March 31, 2009, for
the assumptions used in determining such amounts. These amounts reflect the
Company’s accounting expense and do not reflect the actual value that may or
will be realized by the named executive officers.
Narrative
Disclosure to Summary Compensation Table and Grants of Plan-Based Awards
Table
The
material terms of our named executive officers’ employment letters and
agreements are described in the “Potential Payments Upon Termination or
Change-In-Control” section below.
Additional information regarding the
material terms of equity awards granted during 2008 and the amount of salary and
bonus in proportion to total compensation are included in the “Compensation
Discussion and Analysis” section above under “Compensation
Elements.”
Outstanding
Equity Awards
The
following table shows certain information regarding outstanding equity awards at
December 31, 2008 for the named executive officers.
Outstanding
Equity Awards at December 31, 2008
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares of
Stock That
Have Not
Vested
(#)
|
|
|
Market
Value of
Shares of
Stock That
Have Not
Vested
($)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares That
Have Not
Vested
(#)
|
|
|
Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares That
Have Not
Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Bryan
|
|
|
1,500,000 |
|
|
|
500,000 |
(1)(2) |
|
|
— |
|
|
|
4.25 |
|
11/14/2015
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
100,000 |
|
|
|
100,000 |
(2)(3) |
|
|
— |
|
|
|
5.90 |
|
10/3/2016
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
50,000 |
|
|
|
150,000 |
(2)(4) |
|
|
— |
|
|
|
4.46 |
|
10/22/2017
|
|
|
37,500 |
(2)(5) |
|
$ |
42,375 |
(20) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
200,000 |
(2)(6) |
|
|
— |
|
|
|
1.08 |
|
12/2/2018
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Corkery
|
|
|
81,250 |
|
|
|
243,750 |
(7) |
|
|
— |
|
|
|
3.79 |
|
11/19/2017
|
|
|
12,500 |
(5) |
|
$ |
14,125 |
(20) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
100,000 |
(8) |
|
|
— |
|
|
|
1.08 |
|
12/2/2018
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Jorgens
|
|
|
50,000 |
|
|
|
— |
|
|
|
— |
|
|
|
10.92 |
|
11/27/2011
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
400,000 |
|
|
|
100,000 |
(9) |
|
|
— |
|
|
|
4.25 |
|
11/14/2015
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
68,500 |
|
|
|
68,500 |
(10) |
|
|
— |
|
|
|
5.90 |
|
10/3/2016
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
25,000 |
|
|
|
75,000 |
(11) |
|
|
— |
|
|
|
4.46 |
|
10/22/2017
|
|
|
22,000 |
(5) |
|
$ |
24,860 |
(20) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
100,000 |
(8) |
|
|
— |
|
|
|
1.08 |
|
12/2/2018
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
Name
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
|
|
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
|
Number of
Shares of
Stock That
Have Not
Vested
(#)
|
|
|
Market
Value of
Shares of
Stock That
Have Not
Vested
($)
|
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares That
Have Not
Vested
(#)
|
|
|
|
Equity
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares That
Have Not
Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Flynn
|
|
|
175,000 |
|
|
|
175,000 |
(12) |
|
|
— |
|
|
|
5.88 |
|
5/8/2016
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
26,250 |
|
|
|
26,250 |
(13) |
|
|
— |
|
|
|
5.90 |
|
10/3/2016
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
15,000 |
|
|
|
45,000 |
(14) |
|
|
— |
|
|
|
4.46 |
|
10/22/2017
|
|
|
31,250 |
(5) |
|
$ |
35,313 |
(20) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
100,000 |
(8) |
|
|
— |
|
|
|
1.08 |
|
12/2/2018
|
|
|
50,000 |
(15) |
|
$ |
56,500 |
(20) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Bagley
|
|
|
200,000 |
|
|
|
50,000 |
(16) |
|
|
— |
|
|
|
4.25 |
|
11/14/2015
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
21,250 |
|
|
|
21,250 |
(17) |
|
|
— |
|
|
|
5.90 |
|
10/3/2016
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
25,000 |
|
|
|
75,000 |
(11) |
|
|
— |
|
|
|
4.46 |
|
10/22/2017
|
|
|
19,250 |
(5) |
|
$ |
21,753 |
(20) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
100,000 |
(8) |
|
|
— |
|
|
|
1.08 |
|
12/2/2018
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Day
|
|
|
80,465 |
|
|
|
— |
|
|
|
— |
|
|
|
10.91 |
|
12/5/2010
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
29,792 |
|
|
|
— |
|
|
|
— |
|
|
|
10.91 |
|
12/5/2010
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
220,000 |
|
|
|
55,000 |
(18) |
|
|
— |
|
|
|
4.25 |
|
11/14/2015
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
37,500 |
|
|
|
37,500 |
(19) |
|
|
— |
|
|
|
5.90 |
|
10/3/2016
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
50,000 |
|
|
|
150,000 |
(4) |
|
|
— |
|
|
|
4.46 |
|
10/22/2017
|
|
|
25,000 |
(4) |
|
|
28,250 |
(20) |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
100,000 |
(8) |
|
|
— |
|
|
|
1.08 |
|
12/2/2018
|
|
|
50,000 |
(15) |
|
|
56,500 |
(20) |
|
|
— |
|
|
|
— |
|
(1)
|
500,000
options are scheduled to vest on November 14,
2009.
|
(2)
|
Pursuant
to the terms of Mr. Bryan’s consulting agreement, Mr. Bryan continues to
vest in his stock options and restricted stock awards granted in
connection with his service as an employee as long as he remains a service
provider under the consulting agreement. The Compensation
Committee approved an extension of the exercise period to permit Mr. Bryan
to exercise any of his vested stock options during the 12-month period
following the expiration of his consulting
agreement.
|
(3)
|
50,000
options are scheduled to vest on each of October 3, 2009 and October 3,
2010.
|
(4)
|
50,000
options are scheduled to vest on each of October 22, 2009, October 22,
2010 and October 22, 2011.
|
(5)
|
Restricted
stock awards contain performance and service conditions to encourage the
attainment of key performance targets and retention of
employees. The portion of restricted stock awards allocated to
a particular performance condition vest 50% when that performance
condition is achieved. After the performance condition is
achieved, 25% of shares allocated to that performance condition vest one
year after the performance condition is achieved and the remaining 25% of
shares allocated to that condition vest two years after the performance
condition is achieved. The percentages allocated to each
performance condition for our named executive officers range from 0-70%.
|
The
remaining number of shares in each named executive officer’s restricted stock
award that are allocated to each performance condition will vest in the stated
amounts on each of the dates listed as follows:
named
executive
officer
|
|
ICO G1
Condition
(May 9, 2009)
(May 9, 2010)
|
|
|
Alpha Trial
Condition
(December 23, 2009)
(December 23, 2010)
|
|
|
Provisional Authority
Condition
(December 31, 2009)
(December 31, 2010)
|
|
Mr.
Bryan
|
|
|
3,750 |
|
|
|
3,750 |
|
|
|
3,750 |
|
Mr.
Corkery
|
|
|
1,250 |
|
|
|
1,250 |
|
|
|
1,250 |
|
Mr.
Jorgens
|
|
|
2,500 |
|
|
|
2,500 |
|
|
|
4,000 |
|
Mr.
Flynn
|
|
|
3,125 |
|
|
|
3,125 |
|
|
|
3,125 |
|
Mr.
Bagley
|
|
|
3,500 |
|
|
|
3,500 |
|
|
|
875 |
|
Mr.
Day
|
|
|
8,750 |
|
|
|
1,250 |
|
|
|
2,500 |
|
On
January 15, 2009, the ATC Condition was achieved. As a result, 50% of
the shares in each named executive officer’s restricted stock award that were
allocated to achievement of the ATC Condition performance condition
vested. The remaining number of shares subject to the ATC Condition
will vest in the stated amounts and on each the dates listed as
follows:
named
executive officer
|
|
ATC
Condition
(Shares vested upon
performance achievement
January 15, 2009)
|
|
|
ATC
Condition
(January 15, 2010)
(January 15, 2011)
|
|
Mr.
Bryan
|
|
|
7,500 |
|
|
|
3,750 |
|
Mr.
Corkery
|
|
|
2,500 |
|
|
|
1,250 |
|
Mr.
Jorgens
|
|
|
2,000 |
|
|
|
1,000 |
|
Mr.
Flynn
|
|
|
6,250 |
|
|
|
3,125 |
|
Mr.
Bagley
|
|
|
1,750 |
|
|
|
875 |
|
Mr.
Day
|
|
|
0 |
|
|
|
0 |
|
(6)
|
50,000
options are scheduled to vest on each of December 2, 2009, December 2,
2010, December 2, 2011 and December 2,
2012.
|
(7)
|
81,250
options are scheduled to vest on each of November 19, 2009, November
19, 2010 and November 19, 2011.
|
(8)
|
25,000
options are scheduled to vest on each of December 2, 2009, December 2,
2010, December 2, 2011 and December 2,
2012.
|
(9)
|
100,000
options are scheduled to vest on November 14,
2009.
|
(10)
|
34,250
options are scheduled to vest on each of October 3, 2009 and October 3,
2010.
|
(11)
|
25,000
options are scheduled to vest on each of October 22, 2009, October 22,
2010 and October 22, 2011.
|
(12)
|
87,500
options are scheduled to vest on each of May 8, 2009 and May 8,
2010.
|
(13)
|
13,125
options are scheduled to vest on each of October 3, 2009 and October 3,
2010.
|
(14)
|
15,000
options are scheduled to vest on each of October 22, 2009, October
22, 2010 and October 22, 2011.
|
(15)
|
50,000 shares vested on
January 31, 2009.
|
(16)
|
50,000
options are scheduled to vest on November 14,
2009.
|
(17)
|
10,625
options are scheduled to vest on each of October 3, 2009 and October 3,
2010.
|
(18)
|
55,000
options are scheduled to vest on November 14,
2009.
|
(19)
|
18,750
options are scheduled to vest on each of October 3, 2009 and October 3,
2010.
|
(20)
|
The
market value of stock was computed by multiplying the number of shares by
our closing stock price on December 31, 2008, $1.13 per
share.
|
Option
Exercises and Stock Vested
The
following table shows for the fiscal year ended December 31, 2008, certain
information regarding option exercises and stock vested during the last fiscal
year with respect to the named executive officers:
Option
Exercises And Stock Vested In Fiscal 2008
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of
Shares
Acquired
on Exercise
|
|
|
Value
Realized
on Exercise
|
|
|
Number of
Shares
Acquired
on Vesting (#)
|
|
|
Value Realized
on Vesting (1)
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Bryan
|
|
|
— |
|
|
|
— |
|
|
|
72,500 |
|
|
|
200,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Corkery
|
|
|
— |
|
|
|
— |
|
|
|
7,500 |
|
|
|
13,050 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Jorgens
|
|
|
— |
|
|
|
— |
|
|
|
18,000 |
|
|
|
29,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Flynn
|
|
|
— |
|
|
|
— |
|
|
|
18,750 |
|
|
|
32,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Bagley
|
|
|
— |
|
|
|
— |
|
|
|
15,750 |
|
|
|
30,608 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr.
Day
|
|
|
— |
|
|
|
— |
|
|
|
25,000 |
|
|
|
63,575 |
|
(1) Amounts
have been computed by multiplying the number of shares by the market value of
the underlying shares on the vesting date.
Pension
Benefits
During
the fiscal year ended December 31, 2008, the Company did not provide pension
benefits for any named executive officer.
Non-Qualified
Deferred Compensation
During
the fiscal year ended December 31, 2008, the Company did not provide
non-qualified deferred compensation benefits for any named executive
officer.
Potential
Payments Upon Termination or Change-In-Control
The
following summaries set forth potential payments payable to our named executive
officers upon termination of their employment or a change-in-control of the
Company under their employment letter agreements and our 2000 Stock Incentive
Plan, as Amended and Restated effective June 15, 2007. The following
discussion is based on the assumption that the event occurred on December 31,
2008. Actual payments may be more of less than the amounts described
below. In addition, the Company may enter into new arrangements or
modify these arrangements, from time to time. Each employment letter
or agreement provides definitions for the termination reasons.
Employment
Letters and Agreements
J. Timothy
Bryan. The Company entered into an employment letter agreement
with J. Timothy Bryan pursuant to which Mr. Bryan received an annual salary of
$593,450 in 2008. Mr. Bryan’s employment was at-will. On
February 5, 2009, the Company and Mr. Bryan entered into a Separation Agreement
(“Separation Agreement”). Pursuant to the Separation Agreement, Mr.
Bryan resigned as a Director and as the Company’s Chief Executive Officer
effective February 5, 2009, and was engaged to serve as a consultant to the
Company effective as of February 15, 2009. Mr. Bryan’s employment
letter agreement was terminated effective February 15, 2009. Pursuant
to the Separation Agreement, Mr. Bryan no longer participates in the Company’s
benefit plans, but his outstanding stock options and restricted stock awards
will continue vesting in accordance with the original vesting schedules for so
long as he continues to serve the Company as a consultant. The
Separation Agreement also contains covenants relating to non-competition,
non-disparagement and confidentiality. In conjunction with executing
the Separation Agreement, the Company and Mr. Bryan entered into a Consulting
Agreement, effective February 15, 2009. Pursuant to the terms of the
Consulting Agreement, Mr. Bryan will receive compensation equal to $50,000 per
month for the term of the Consulting Agreement, which generally terminates on
August 15, 2010, unless terminated earlier pursuant to its terms, and will
provide consulting services for the Company during this period. The
Company’s Compensation Committee also approved Mr. Bryan to have 12 months
following the expiration of his Consulting Agreement to exercise any vested
options. All of the compensation that Mr. Bryan received following
his separation from employment was $33,726, representing his accrued but unused
vacation time through the date of his separation.
Michael P.
Corkery. The Company has entered into an employment letter
agreement with Michael P. Corkery. In 2008, Mr. Corkery received an annual
salary of $327,031. Under the agreement, Mr. Corkery’s employment is
at-will, and he is subject to termination with or without cause and may leave
the Company for any reason. However, if the Company terminates him
without cause, he is entitled to a lump sum payment of accrued base salary
through the date of termination, accrued but unused vacation time, and
reimbursement of reasonable business expenses, and upon execution of a release
of claims, continued salary, benefits and vesting of options granted under the
Plan for six months. Additionally, the Company will accelerate and
immediately vest all options and restricted stock awards which would have vested
during the six months after termination. In case of termination for
cause or his resignation, Mr. Corkery would only be entitled to a lump sum
payment of accrued base salary through the date of termination, the value of
unused but accrued vacation time, and reimbursement of reasonable business
expenses. In the event of Mr. Corkery’s death, the amounts payable
under his life insurance policy would be $500,000. Mr. Corkery is
obligated not to compete following termination of employment for a period equal
to six months.
Craig Jorgens. The
Company has entered into an employment letter agreement with Craig
Jorgens. In 2008, Mr. Jorgens received an annual salary of
$592,800. Under the agreement, Mr. Jorgens’ employment is at-will,
and he is subject to termination with or without cause and may leave the Company
for any reason. However, if the Company terminates him without cause,
he is entitled to a lump sum payment of accrued base salary through the date of
termination, the value of accrued but unused vacation time, and reimbursement of
reasonable business expenses, and, upon execution of a release of claims,
continued salary, benefits (medical and dental) and vesting of options granted
under the Plan for six months, to the extent not superseded by any change of
control provisions under the Plan. In case of termination for cause
or his resignation, Mr. Jorgens would only be entitled to a lump sum payment of
accrued base salary and benefits through the date of termination, the value of
accrued but unused vacation time and unpaid reasonable business
expenses. In the event of Mr. Jorgens’ death, the amounts payable
under his life insurance policy would be $200,000. Mr. Jorgens is
obligated not to compete following termination of employment for a period equal
to six months.
John L. Flynn. The
Company has entered into an employment letter agreement with John
Flynn. In 2008, Mr. Flynn received an annual salary of $387,291.
Under the agreement, Mr. Flynn’s employment is at-will, and he is subject to
termination with or without cause and may leave the Company for any
reason. However, if the Company terminates him without cause, he is
entitled to a lump sum payment of accrued base salary through the date of
termination, the value of accrued but unused vacation time, and reimbursement of
reasonable business expenses, and upon execution of a release of claims,
continued salary, benefits and vesting of options granted under the Plan for six
months. Additionally, the Company will accelerate and immediately
vest all options and restricted stock awards which would have vested during the
six months after termination. In case of termination for cause or his
resignation, Mr. Flynn would only be entitled to a lump sum payment of accrued
base salary through the date of termination, the value of accrued but unused
vacation time, and reimbursement of reasonable business expenses. In
the event of Mr. Flynn’s death, the amounts payable under his life insurance
policy would be $200,000. Mr. Flynn is obligated not to compete
following termination of employment for a period equal to six
months.
David Bagley. The
Company has entered into an executive employment agreement with David
Bagley. In 2008, Mr. Bagley received a base salary of
$286,636. Mr. Bagley’s employment agreement entitles him to a
discretionary bonus in the target amount of 30% of base salary for the
applicable calendar year. Mr. Bagley’s actual bonus compensation may
be more or less than the target amount. Either the Company or Mr.
Bagley may terminate the agreement for any reason with 30 days’ written notice
or, in lieu of notice, the Company may pay Mr. Bagley one month’s base salary,
one month of medical and dental benefits, plus a pro-rated bonus. The
Company may also terminate for “cause” without notice, in which case Mr. Bagley
will not be entitled to any further compensation, including unpaid bonuses or
benefits, other than his accrued salary, accrued but unused vacation time and
reimbursement of expenses. In the event of Mr. Bagley’s death, the
amount payable under his life insurance policy would be $483,000.
Robert S. Day, Jr. Robert S.
Day, Jr. has entered into an employment agreement with one of the Company’s
subsidiaries, for an indefinite term. Mr. Day is entitled to an
annual base salary plus and a discretionary bonus in the target amount of 30% of
base salary. The actual bonus payable to Mr. Day may be more or less than
the target amount. While Mr. Day’s employment is at-will, he and the
Company are each required to provide at least six months’ notice prior to
termination, other than in the case of termination for “cause” by the
Company. The Company, however, has the right to pay him his salary in
lieu of notice, and Mr. Day may also elect to take a payment rather than
continuing his employment during the six-month notice period. In the event of
Mr. Day’s death, the amount payable under his life insurance policy would be
$392,000. The agreement obligates Mr. Day to refrain from disclosing
confidential information, both during and after termination of employment.
Further, for a period of eighteen months after termination of employment,
Mr. Day may not solicit ICO employees or otherwise take any action that
could adversely affect any relationship between ICO and its employees,
customers, or suppliers.
In
December 2008, all of the named executive officers’ employment agreements were
revised in order to comply with the provisions of Internal Revenue Code Section
409A addressing nonqualified deferred compensation. The amendments do
not increase the amount of severance payments or otherwise alter any material
provisions of the employment agreements. Rather, the amendments
provided additional clarity regarding the time and form of payments to ensure
that all of the employment agreements for the executive officers satisfy the
requirements of Section 409A. If any of the payments due to any named
executive officer are deemed to be deferred compensation under Section 409A
(after taking into account applicable exemptions from Section 409A), and to the
extent required by Section 409A, such payments will not commence until the first
day following the sixth month anniversary of his termination
date.
2000
Stock Incentive Plan, as Amended and Restated effective June 15,
2007
Under the terms of the 2000 Stock
Incentive Plan as Amended and Restated effective June 15, 2007, in the event of
a corporate transaction (as defined in the equity plan), the awards will either
automatically become vested and exercisable for a limited period of time, or,
depending on the type of corporate transaction, will do so if the awards are not
assumed or substituted by a corporate successor.
Potential
Termination and Change-In-Control Payments
The following tables summarize the
compensation and benefits each named executive officer would have been entitled
to receive under their employment letter, severance or change-in-control
agreements, the equity plan and the terms of perquisites if their employment
with ICO had terminated as of December 31, 2008. The tables do not
include amounts payable under the 401(k) plan or other employee benefit plans in
which they are eligible to participate on a non-discriminatory basis (e.g., stock purchase plan,
group health, group term life, accidental death and disability and long-term
disability).
Mr. Bryan:
Executive Benefit and Payments Upon Termination
|
|
Voluntary
Termination
|
|
|
Involuntary
(Not for
Cause or
Constructive)
Termination
|
|
|
For Cause
Termination
|
|
|
Change- in-
Control
|
|
|
Death
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
salary
|
|
$ |
— |
|
|
$ |
298,870 |
(1) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Stock
option vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,000 |
(2) |
|
|
— |
|
Restricted
stock vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
42,375 |
(3) |
|
|
— |
|
Benefits
and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
insurance proceeds
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200,000 |
|
Accrued
vacation pay
|
|
|
30,653 |
|
|
|
30,653 |
|
|
|
30,653 |
|
|
|
— |
|
|
|
30,653 |
|
Total:
|
|
$ |
30,653 |
|
|
$ |
329,523 |
|
|
$ |
30,653 |
|
|
$ |
52,375 |
|
|
$ |
230,653 |
|
(1) Effective
February 5, 2009, Mr. Bryan resigned his position as CEO. Pursuant to
his employment agreement that has now been terminated, if Mr. Bryan had been
terminated without cause, upon execution of a release of claims, he would have
been entitled to continuation of his base salary then in effect for a period of
six months.
(2) Amount
represents the difference between the fair market value of the underlying common
stock as of December 31, 2008, $1.13, and the exercise price of in-the-money
stock options, multiplied by the number of in-the-money stock options
outstanding at December 31, 2008 (assuming the stock options accelerate under
the terms of the Plan and become fully vested).
(3) Amount
represents the fair market value of the underlying common stock as of December
31, 2008, $1.13, multiplied by the number of accelerated shares (assuming the
shares accelerate under the terms of the Plan).
Mr. Corkery:
Executive Benefit and Payments Upon Termination
|
|
Voluntary
Termination
|
|
|
Involuntary
(Not for
Cause or
Constructive)
Termination
|
|
|
For Cause
Termination
|
|
|
Change-in-
Control
|
|
|
Death
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
salary
|
|
$ |
— |
|
|
$ |
163,719 |
(1) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Stock
option vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
(2) |
|
|
— |
|
Restricted
stock vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,125 |
(3) |
|
|
— |
|
Benefits
and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
insurance proceeds
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
500,000 |
|
Accrued
vacation pay
|
|
|
11,754 |
|
|
|
11,754 |
|
|
|
11,754 |
|
|
|
— |
|
|
|
11,754 |
|
Total:
|
|
$ |
11,754 |
|
|
$ |
175,473 |
|
|
$ |
11,754 |
|
|
$ |
19,125 |
|
|
$ |
511,754 |
|
(1) If
Mr. Corkery is terminated without cause, upon execution of a release of claims,
he is entitled to continuation of his base salary then in effect for a period of
six months.
(2) Amount
represents the difference between the fair market value of the underlying common
stock as of December 31, 2008, $1.13, and the exercise price of in-the-money
stock options, multiplied by the number of in-the-money stock options
outstanding at December 31, 2008 (assuming the stock options accelerate under
the terms of the Plan and become fully vested).
(3) Amount
represents the fair market value of the underlying common stock as of December
31, 2008, $1.13, multiplied by the number of accelerated shares
(assuming the shares accelerate under the terms of the Plan).
Mr. Jorgens:
Executive Benefit and Payments Upon
Termination
|
|
Voluntary
Termination
|
|
|
Involuntary
(Not for
Cause or
Constructive)
Termination
|
|
|
For Cause
Termination
|
|
|
Change-in-
Control
|
|
|
Death
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
salary
|
|
$ |
— |
|
|
$ |
296,400 |
(1) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Stock
option vesting
|
|
|
— |
|
|
|
TBD |
|
|
|
— |
|
|
|
5,000 |
(2) |
|
|
— |
|
Restricted
stock vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
24,860 |
(3) |
|
|
— |
|
Benefits
and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
insurance proceeds
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200,000 |
|
Accrued
vacation pay
|
|
|
44,460 |
|
|
|
44,460 |
|
|
|
44,460 |
|
|
|
— |
|
|
|
44,460 |
|
Medical
and dental
|
|
|
— |
|
|
|
13,018 |
(1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total:
|
|
$ |
44,460 |
|
|
$ |
353,878 |
|
|
$ |
44,460 |
|
|
$ |
29,860 |
|
|
$ |
244,460 |
|
(1) If
Mr. Jorgens is terminated without cause, upon execution of a release of claims,
he is entitled to continuation of his base salary then in effect and medical and
dental benefits for a period of six months.
(2) Amount
represents the difference between the fair market value of the underlying common
stock as of December 31, 2008, $1.13, and the exercise price of in-the-money
stock options, multiplied by the number of in-the-money stock options
outstanding at December 31, 2008 (assuming the stock options accelerate under
the terms of the Plan and become fully vested).
(3) Amount
represents the fair market value of the underlying common stock as of December
31, 2008, $1.13, multiplied by the number of accelerated shares (assuming the
shares accelerate under the terms of the Plan).
Mr. Flynn:
Executive Benefit and Payments Upon Termination
|
|
Voluntary
Termination
|
|
|
Involuntary
(Not for
Cause or
Constructive)
Termination
|
|
|
For Cause
Termination
|
|
|
Change-in-
Control
|
|
|
Death
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
salary
|
|
$ |
— |
|
|
$ |
196,625 |
(1) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Stock
option vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
(2) |
|
|
— |
|
Restricted
stock vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
91,813 |
(3) |
|
|
— |
|
Benefits
and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
insurance proceeds
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
200,000 |
|
Accrued
vacation pay
|
|
|
33,023 |
|
|
|
33,023 |
|
|
|
33,023 |
|
|
|
— |
|
|
|
33,023 |
|
Total:
|
|
$ |
33,023 |
|
|
$ |
229,648 |
|
|
$ |
33,023 |
|
|
$ |
96,813 |
|
|
$ |
233,023 |
|
(1) If
Mr. Flynn is terminated without cause, upon execution of a release of claims, he
is entitled to continuation of his base salary then in effect for a period of
six months.
(2) Amount
represents the difference between the fair market value of the underlying common
stock as of December 31, 2008, $1.13, and the exercise price of in-the-money
stock options, multiplied by the number of in-the-money stock options
outstanding at December 31, 2008 (assuming the stock options accelerate under
the terms of the Plan and become fully vested).
(3) Amount
represents the fair market value of the underlying common stock as of December
31, 2008, $1.13, multiplied by the number of accelerated shares (assuming the
shares accelerate under the terms of the Plan).
Mr. Bagley:
Executive Benefit and Payments Upon Termination
|
|
Voluntary
Termination
|
|
|
Involuntary
(Not for
Cause or
Constructive)
Termination
|
|
|
For Cause
Termination
|
|
|
Change-in-
Control
|
|
|
Death
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
salary
|
|
$ |
24,059 |
(1) |
|
$ |
24,059 |
(1) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Short-term
incentive (2)
|
|
|
86,612 |
|
|
|
86,612 |
(1) |
|
|
— |
|
|
|
— |
|
|
|
86,612 |
|
Stock
option vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
(3) |
|
|
— |
|
Restricted
stock vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
21,753 |
(4) |
|
|
— |
|
Benefits
and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
insurance proceeds
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
483,000 |
|
Accrued
vacation pay
|
|
|
6,848 |
|
|
|
6,848 |
|
|
|
6,848 |
|
|
|
— |
|
|
|
6,848 |
|
Medical
and dental
|
|
|
2,170 |
(1) |
|
|
2,170 |
(1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total:
|
|
$ |
119,689 |
|
|
$ |
119,689 |
|
|
$ |
6,848 |
|
|
$ |
26,753 |
|
|
$ |
576,460 |
|
(1) Pursuant
to his employment agreement, either the Company or Mr. Bagley may elect to
terminate his employment, upon thirty days written notice. In lieu of notice or
upon receipt of notice of resignation, the Company may elect to terminate
employment immediately, and pay Mr. Bagley one month’s base salary and medical
and dental benefits for one month.
(2) Pursuant
to his employment agreement, if Mr. Bagley voluntarily terminates his employment
with the Company, or is terminated by the Company for any reason other than “for
cause,” his discretionary 30% bonus shall be adjusted to reflect his aggregate
base salary paid for the portion of the year he was employed by the Company, and
such discretionary bonus, if any, shall be paid within thirty days following the
date of termination. If Mr. Bagley is terminated “for cause,” he
would be ineligible for a bonus.
(3) Amount
represents the difference between the fair market value of the underlying common
stock as of December 31, 2008, $1.13, and the exercise price of in-the-money
stock options, multiplied by the number of in-the-money stock options
outstanding at December 31, 2008 (assuming the stock options accelerate under
the terms of the Plan and become fully vested).
(4) Amount
represents the fair market value of the underlying common stock as of December
31, 2008, $1.13, multiplied by the number of accelerated shares
(assuming the shares accelerate under the terms of the Plan).
Mr. Day:
Executive Benefit and Payments Upon Termination
|
|
Voluntary
Termination
|
|
|
Involuntary
(Not for
Cause or
Constructive)
Termination
|
|
|
For Cause
Termination
|
|
|
Change-in-
Control
|
|
|
Death
|
|
Compensation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
salary
|
|
$ |
137,093 |
(1) |
|
$ |
137,093 |
(1) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Stock
option vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
5,000 |
(2) |
|
|
— |
|
Restricted
stock vesting
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
84,750 |
(3) |
|
|
— |
|
Benefits
and Perquisites:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
insurance proceeds
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
392,000 |
|
Accrued
vacation pay
|
|
|
22,673 |
|
|
|
22,673 |
|
|
|
22,673 |
|
|
|
— |
|
|
|
22,673 |
|
Total:
|
|
$ |
159,766 |
|
|
$ |
159,766 |
|
|
$ |
22,673 |
|
|
$ |
89,750 |
|
|
$ |
414,673 |
|
(1) Pursuant
to his employment agreement, either the Company or Mr. Day may elect to
terminate his employment, upon six months written notice. In lieu of
notice or upon receipt of notice of resignation, the Company may elect to
terminate employment immediately and pay Mr. Day six month’s base
salary. If Mr. Day is terminated without cause, upon execution of a release
of claims, he is entitled to continuation of his base salary then in effect for
a period of six months.
(2) Amount
represents the difference between the fair market value of the underlying common
stock as of December 31, 2008, $1.13, and the exercise price of in-the-money
stock options, multiplied by the number of in-the-money stock options
outstanding at December 31, 2008 (assuming the stock options accelerate under
the terms of the Plan and become fully vested).
(3) Amount
represents the fair market value of the underlying common stock as of December
31, 2008, $1.13, multiplied by the number of accelerated shares (assuming the
shares accelerate under the terms of the Plan).
DIRECTOR
COMPENSATION
The
following table shows for the fiscal year ended December 31, 2008 certain
information with respect to the compensation of all non-employee directors of
the Company:
Director
Compensation for Fiscal 2008
Name
|
|
Fees Earned
or
Paid in
Cash
(1)
|
|
|
Stock
Awards
|
|
|
Option
Awards
(2) (3)( 4)
|
|
|
Non-Equity
Incentive Plan
Compensation
|
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
|
|
All Other
Compensation
|
|
|
Total
|
|
Craig
O. McCaw
|
|
|
— |
|
|
|
— |
|
|
$ |
125,308 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
125,308 |
|
Donna
P. Alderman*
|
|
|
— |
|
|
|
— |
|
|
$ |
86,045 |
|
|
|
— |
|
|
|
— |
|
|
$ |
782,171 |
(5) |
|
$ |
868,216 |
|
Samuel
L. Ginn
|
|
$ |
30,000 |
|
|
|
— |
|
|
$ |
226,464 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
256,464 |
|
Nicolas
Kauser
|
|
|
— |
|
|
|
— |
|
|
$ |
1,261 |
(6) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
1,261 |
|
Barry
L. Rowan
|
|
$ |
30,000 |
|
|
|
— |
|
|
$ |
187,794 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
217,794 |
|
R.
Gerard Salemme*
|
|
|
— |
|
|
|
— |
|
|
$ |
108,293 |
(7) |
|
|
— |
|
|
|
— |
|
|
$ |
502,302 |
(7) |
|
$ |
610,595 |
|
H.
Brian Thompson
|
|
$ |
30,000 |
|
|
|
— |
|
|
$ |
111,466 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
141,466 |
|
David
Wasserman
|
|
$ |
30,000 |
(8) |
|
|
— |
|
|
$ |
125,308 |
(9) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
155,308 |
|
Benjamin
G. Wolff*
|
|
|
— |
|
|
|
— |
|
|
$ |
57,253 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
57,253 |
|
* Each of
Ms. Alderman and Messrs. Salemme and Wolff resigned as directors effective
December 16, 2008.
(1) Amounts
represent annual service cash payments in the amount of $30,000 for a full year
of service on the Board of Directors in accordance with the Company’s Board
Compensation Policy for directors who have been determined to be independent
under Nasdaq Marketplace Rule 4200(a)(15). All service cash payments
were paid in quarterly installments in arrears.
(2) Amounts
represent the dollar amounts recognized as stock-based compensation expense in
2008, for financial accounting purposes, related to stock options granted to
each director in 2008 and in prior years, before reflecting estimated
forfeitures, determined in accordance SFAS 123R. These amounts do not
reflect the actual value that will be realized by the
individuals. See Note 9 of Notes to Financial Statements set forth in
the Company’s Form 10-K for fiscal year 2008, filed with the SEC on March 31,
2009, for the assumptions used in determining such amounts.
(3) Except
for Mr. Kauser, who was not a director on that date, each of the directors named
above was granted a non-qualified stock option on October 1, 2008 to purchase
30,000 shares of Class A common stock with an exercise price of $1.01 per share
(which is equal to the closing market price of the Company’s common stock on the
date of grant) under the Plan. Each option has a term of 10 years and
vests over four years from the date of grant, with 25% vesting in equal
increments at the end of each annual period thereafter. The grant
date fair value of each October 1, 2008 option grant, determined in accordance
with SFAS 123R, was $20,608. Additional option grants made to certain
directors in 2008 are discussed in detail below.
(4) The
following table sets forth the aggregate number of option awards held by each
director as of December 31, 2008:
Name
|
|
Aggregate Number of
Option Awards
|
|
|
|
|
|
Craig
O. McCaw
|
|
|
240,000 |
|
|
|
|
|
|
Donna
P. Alderman
|
|
|
623,750 |
(10) |
|
|
|
|
|
Samuel
L. Ginn
|
|
|
340,000 |
|
|
|
|
|
|
Nicolas
Kauser
|
|
|
100,000 |
|
|
|
|
|
|
Barry
L. Rowan
|
|
|
315,000 |
|
|
|
|
|
|
R.
Gerard Salemme
|
|
|
730,000 |
(11) |
|
|
|
|
|
H.
Brian Thompson
|
|
|
260,000 |
|
|
|
|
|
|
David
Wasserman
|
|
|
240,000 |
(9) |
|
|
|
|
|
Benjamin
G. Wolff
|
|
|
120,000 |
|
(5) Effective
March 31, 2008, Ms. Alderman resigned her position as Executive Vice President,
Corporate Development and Strategy and became a consultant for the
Company. Ms. Alderman earned $130,000 in base salary while an
employee in 2008, $382,624 for consulting services provided to the Company in
2008, and $54,000 for accrued but unused vacation time through the date of her
separation, which was all the compensation Ms. Alderman received following her
separation. Amount also includes $173,458 recognized as stock-based
compensation expense in 2008, for financial accounting purposes, related to
stock options granted to Ms. Alderman in 2005, 2006 and 2007 for her services as
a consultant/employee, and $42,089 recognized as stock-based compensation
expense in 2008, for financial accounting purposes, related to restricted stock
awards granted to Ms. Alderman in 2007 for her service as an employee, before
reflecting estimated forfeitures, as determined in accordance SFAS
123R. See Note 9 of Notes to Financial Statements set forth in the
Company’s Form 10-K for fiscal year 2008, filed with the SEC on March 31, 2009,
for the assumptions used in determining such amounts.
(6) Mr.
Kauser joined the Board of Directors in December 2008. As a new director, Mr.
Kauser was granted a non-qualified stock option on December 16, 2008 to purchase
100,000 shares of Class A common stock with an exercise price of $1.50 per share
(which is equal to the closing market price of the Company’s Class A common
stock on the date of grant) under the Plan. This option has a term of
10 years and vests over four years from the date of grant, with 25% vesting in
equal increments at the end of each annual period thereafter. The
grant date aggregate fair value of this option grant, determined in accordance
with SFAS 123R, was $115,389.
(7) Mr.
Salemme earned $165,000 for consulting services provided to the Company in
2008. In addition, Mr. Salemme was paid $41,250 in 2008 for
consulting services provided to the Company in 2007. Amount also
includes $296,052 recognized as stock-based compensation expense in 2008, for
financial accounting purposes, related to stock options granted to Mr. Salemme
in 2005 and 2006 for his services as a consultant, before reflecting estimated
forfeitures, determined in accordance SFAS 123R. See Note 9 of Notes
to Financial Statements set forth in the Company’s Form 10-K for fiscal year
2008, filed with the SEC on March 31, 2009, for the assumptions used in
determining such amounts.
(8) Represents
fees paid to Clayton, Dubilier & Rice, Inc. as assignee of compensation to
Mr. Wasserman.
(9) Represents
240,000 options granted to Clayton, Dubilier & Rice, Inc. as assignee of
compensation to Mr. Wasserman. Mr. Wasserman disclaims beneficial
ownership of the options to purchase shares held by Clayton, Dubilier &
Rice, Inc.
(10) The
aggregate number of options awarded to Ms. Alderman includes 418,750 options
granted to Ms. Alderman for services provided to the Company as a consultant or
employee.
(11) The
aggregate number of options awarded to Mr. Salemme includes 520,000 options
granted for consulting services provided to the Company.
Director
Equity Compensation
Pursuant
to the Company’s Board Compensation Policy in effect at December 31, 2008,
members of the Board of Directors who are not employees receive an initial
service option grant to purchase 100,000 shares of Class A common stock at the
current fair market value price at the time they are elected to the Board of
Directors. The initial service options will become 25% vested
following each full year of service as a board member, beginning with the date
the options are granted, with the effect that the initial service options become
fully vested following four years of service. On October 1 of each
year, each non-employee director is automatically granted an annual service
option grant to purchase 30,000 shares of Class A common stock at the current
fair market value price on the date of grant. The annual service
option grants will become 25% vested following each year of service on the Board
of Directors, beginning as of the date of grant and continuing through the
following September 30, with the effect that the annual service options become
fully vested and exercisable after four years of service on the
board.
Additionally,
non-employee members of the Board of Directors who serve on the Audit Committee
and Strategy Committee of the Board of Directors receive options to purchase
50,000 shares of Class A common stock at the current fair market value price,
granted on the date of appointment to such committee. The member of
the Audit Committee who serves as chairman receives a grant to purchase an
additional 50,000 shares of Class A common stock on the date appointed as
chairman of the Audit Committee. All committee option grants become
25% vested following each year of service on the committee, following the date
of appointment, with the effect that the committee service option grants become
fully vested after four years of service on the committee, or as chairman of the
Audit Committee, as applicable.
Currently,
non-employee members of the Board of Directors who serve on the Compensation
Committee of the Board of Directors receive options to purchase 25,000 shares of
Class A common stock at the current fair market value price, granted on the date
of appointment to such committee. The member of the Compensation
Committee who serves as chairman receives a grant to purchase an additional
25,000 shares of Class A common stock on the date appointed as chairman of the
Compensation Committee. Compensation Committee option grants become
25% vested following each year of service on the committee, following the date
of appointment, with the effect that the committee service option grants become
fully vested after four years of service on the committee, or as chairman of the
Compensation Committee, as applicable.
Generally,
all stock options granted under our Plan have a term of
10 years. Pursuant to the terms of the Plan, stock options will
accelerate following a change-in-control, for some transactions, only if they
are not assumed or substituted by the successor company.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Related-Person
Transactions Policy and Procedures
The
Company has not adopted a written Related Person Transactions Policy that sets
forth the Company’s policies and procedures regarding the identification,
review, consideration and approval or ratification of “related persons
transactions.” The Audit Committee approves any transaction between
the Company and a related person. A related person is any executive
officer or director or nominee for executive officer or director or more than 5%
stockholder of the Company, including any of their immediate family members, and
any entity owned or controlled by such persons.
Certain
Related-Person Transactions
Eagle
River Investments, LLC, Eagle River, Inc. and ERSH
ERSH is
the Company’s controlling stockholder with an economic interest of approximately
31.7% and a voting interest of approximately 67.3%. This economic interest
includes one million shares of the Company’s restricted Class A common stock
granted to Eagle River Investments as a stock dividend in November 2005. Eagle
River Investments subsequently assigned its shares of the Company’s stock to its
affiliate, ERSH.
The
Company has an agreement with Eagle River, Inc. to provide advisory services to
the Company. This agreement has an annual fee of $500,000 and is payable in
quarterly installments in stock or cash, at the Company’s option. To date, the
Company has elected to make all payments in Class A common stock and has issued
958,032 shares as consideration. As of December 31, 2008 and 2007, the Company
owed Eagle River, Inc. approximately $42,000 pursuant to the advisory services
agreement, which is included in accrued expenses on the Company’s consolidated
balance sheet.
The
Company also had a month-to-month agreement with Eagle River, Inc. to provide
office space and administrative support to the Company in Kirkland, Washington,
which was terminated in November 2008. Total payments made to Eagle River, Inc.
under this agreement were $61,000, $62,000, and $57,000 for the years ended
December 31, 2008, 2007 and 2006, respectively.
The
Company entered into a loan agreement with Eagle River Investments in 2002,
which was subsequently transferred to ERSH. In connection with this loan
agreement, the Company issued warrants to ERSH to purchase an aggregate of three
million shares of its Class A common stock at a weighted average exercise price
of $0.01 per share. On December 11, 2007, the Company entered into an amendment
to extend by two years the Registration Rights Agreement between the Company and
ERSH dated as of December 12, 2002, which otherwise would have expired on
December 12, 2007. The Registration Rights Agreement applies to three million
shares of the Company’s Class A Common Stock that ERSH has the right to acquire
pursuant to a Warrant Agreement, dated December 12, 2002. All such warrants
remain outstanding at December 31, 2008 and are exercisable through December 12,
2012.
Davis
Wright Tremaine
An
officer of Eagle River, Inc and Eagle River Investments, LLC., who is also a
former board member of the Company and the current chairman of the board of
the Company’s subsidiary, ICO North America, is the spouse of a partner at
the law firm Davis Wright Tremaine which provides the Company with ongoing legal
services. Total payments made to Davis Wright Tremaine for the years ended
December 31, 2008, 2007 and 2006 were $57,000, $265,000 and $1.3 million,
respectively. Total payments made from April 2004, the date of appointment as a
principal of Eagle River, Inc., to December 31, 2008, were approximately $4
million.
Clearwire
Corporation
ERSH, the
Company’s controlling stockholder, is also a significant stockholder of
Clearwire Corporation (“Clearwire”). The Company has a month-to-month agreement
with Clearwire to provide office space for certain of its regulatory personnel
in Washington, DC. Total payments made to Clearwire under this agreement for the
years ended December 31, 2008, 2007 and 2006 were $60,000, $60,000 and $72,000,
respectively.
The
Company also has an agreement with Clearwire to explore ways to collaborate on
offering Clearwire’s broadband Internet offering in conjunction with the
Company’s ICO mim service, and building out and sharing a terrestrial network
(“Cooperation Agreement”). Pursuant to leases in connection with the
Cooperation Agreement, the Company will reimburse Clearwire for utility usage at
certain of Clearwire’s terrestrial towers and office space in Raleigh-Durham as
part of the Company’s Alpha Trial. Total payments made to Clearwire
under this agreement for the year ended December 31, 2008 were
$11,000.
Indemnification
Agreements
The
Company has entered into indemnity agreements with certain officers and
directors which provide, among other things, that the Company will indemnify
such officer or director, under the circumstances and to the extent provided for
therein, for expenses, damages, judgments, fines and settlements he or she may
be required to pay in actions or proceedings which he or she is or may be made a
party by reason of his or her position as a director, officer or other agent of
the Company, and otherwise to the fullest extent permitted under Delaware law
and the Company’s Bylaws.
Under an
indemnification agreement between the Company and Eagle River Investments, LLC,
we are required to indemnify, defend, and hold harmless Eagle River Investments,
its affiliates, and their respective members, directors, officers, agents,
employees and controlling persons against claims, liabilities, losses, damages
and fees and expenses incurred resulting from, or in connection with, the fact
that such entity or person is or was a shareholder, director, officer, or
employee of the Company or any of its subsidiaries, or based on an alleged
breach of his or her fiduciary duty as a director or officer of the Company or
any of its subsidiaries. The indemnification obligation is subject to
certain exceptions, including losses and damages incurred through certain
violations of the U.S. securities laws and damages caused by acts that a court
determines to be a breach of fiduciary duties, gross negligence, or willful
misconduct. We agreed to advance reasonable costs and expenses
incurred for defending any claim upon receipt of an undertaking to repay the
advanced amounts if it is ultimately determined the indemnitee was not entitled
to indemnification under the agreement.
Under an
indemnification agreement with Cascade Investment, we are similarly required to
indemnify Cascade Investment, its affiliates (including Mente), and their
respective members, directors, officers, agents, employees and controlling
persons.
We are
also a party to an indemnification agreement with CDR-Satco, Clayton, Dubilier
& Rice, Inc. (“CD&R”) and The Clayton, Dubilier & Rice Fund VI
Limited Partnership, which obligates us to indemnify, defend, and hold harmless
each of those entities and their respective directors, officers, partners,
members, employees, agents and controlling persons under the same general terms
as the indemnification agreement with Eagle River Investments, LLC, other than
the addition of an obligation to indemnify for any claims arising out of or
based upon the provision by CD&R of any consulting services (except to the
extent a court finds that any of the indemnitees acted with gross negligence or
intentional misconduct).
OTHER
MATTERS
When
are stockholder proposals due for next year’s Annual Meeting?
To be
included in next year’s proxy materials, your proposal must be submitted in
writing by December 31, 2009 to ICO’s Corporate Secretary at 11700 Plaza America
Drive, Suite 1010, Reston, Virginia 20190.
A
stockholder proposal or nomination for director that will not be included in
next year’s proxy materials, but that a stockholder intends to present in person
at next year’s Annual Meeting, must comply with the notice, information and
consent provisions contained in the Company’s Bylaws. In part, the
Bylaws provide that to timely submit a proposal or nominate a director you must
do so by submitting the proposal or nomination in writing, which must be
delivered to or mailed and received by the Company’s Corporate Secretary at the
Company’s principal executive offices no later than the close of business on
April 20, 2010 (60 days prior to the first anniversary of the 2009 Annual
Meeting Date) nor earlier than the close of business on March 21, 2010 (90 days
prior to the first anniversary of the 2009 Annual Meeting
date). However, if the date of the meeting is changed by more than 30
days from such anniversary date, to be timely, notice by the stockholder must be
received no later than the close of business on the earlier of the 7th day
following the date on which notice of the date of the meeting was mailed or a
public announcement of the meeting was made. The Company’s Bylaws
contain additional requirements to properly submit a proposal or nominate a
director. If you plan to submit a proposal or nominate a director,
please review the Company’s Bylaws carefully. You may obtain a copy
of the Company’s Bylaws by mailing a written request to the Corporate Secretary
of ICO at 11700 Plaza America Drive, Suite 1010, Reston, Virginia 20190 or by
visiting the Company’s website at www.ico.com.
The Board
of Directors knows of no other matters that will be presented for consideration
at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best
judgment.
By
Order of the Board of Directors
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John
L. Flynn
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April
[ ], 2009
A
copy of the Company’s Annual Report to the Securities and Exchange Commission on
Form 10-K for the fiscal year ended December 31, 2008 is available without
charge upon written request to: Corporate Secretary, ICO Global Communications
(Holdings) Limited, 11700 Plaza America Drive, Suite 1010, Reston, Virginia
20190.
ANNEX
A
By
approving Proposal 3, stockholders are approving and authorizing the
Corporation’s Board of Directors, at its sole discretion, to effect a “reverse
stock split” of the Company’s Common Stock by filing a Certificate of Amendment
in this form. If the Board of Directors determines to effect a
reverse stock split, it will choose a combination of any number of shares of
Common Stock, between and including five and twenty, into one
share. The combination ratio will be determined by the Board of
Directors of the Corporation to be in the best interests of the Corporation and
its stockholders following stockholder approval of Proposal 3, including
approval of this form of Certificate of Amendment, and prior to the time of
filing of the Certificate of Amendment.
FORM
OF CERTIFICATE OF AMENDMENT OF THE
RESTATED
CERTIFICATE OF INCORPORATION
OF
ICO
GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED
ICO
Global Communications (Holdings) Limited, a corporation duly organized and
existing under the Delaware General Corporation Law (“DGCL”), does hereby
certify:
FIRST:
The name of the corporation is ICO Global Communications (Holdings) Limited
(“Corporation”).
SECOND:
The date of filing of the Certificate of Incorporation of the Corporation was
March 17, 2000, under the name New ICO Global Communications (Holdings)
Limited. A Restated Certificate of Incorporation was filed on April
25, 2000. Thereafter, a Certificate of Amendment to the Restated
Certificate of Incorporation was filed on July 17, 2000 and a Restated
Certificate of Incorporation was filed on November 28, 2001, changing the name
of the Corporation to ICO Global Communications (Holdings) Limited.
THIRD:
Section A. of Article 5 of the Corporation’s Restated Certificate of
Incorporation is hereby amended to read in its entirety as set forth
below:
“ARTICLE 5
- SHARES
A. Classes of
Stock. The Corporation shall have authority to issue three classes
of stock to be designated, respectively, “Class A Common Stock,” “Class B Common
Stock” and “Preferred Stock.” The Class A Common Stock and the Class
B Common Stock are collectively referred to herein as the “Common
Stock.” The total number of shares that the Corporation is authorized
to issue is [ • ]1 shares, of which [ • ] shares shall
be Class A Common Stock, [ • ] shares shall be Class B Common Stock
and 75 million shares shall be Preferred Stock. Each share of Common
Stock and Preferred Stock shall have a par value of one cent per share
($0.01). Authority is hereby expressly granted to the Board of
Directors (“Board”) to fix by resolution or resolutions any of the designations
and the powers, preferences and rights, and the qualifications limitations or
restrictions that are permitted by the DGCL in respect of any class or classes
of Preferred Stock or any series of any class of Preferred Stock of the
Corporation.
1 The
Corporation currently has authorized 1.125 million shares of stock, consisting
of 900 million shares of Class A Common Stock, 150 million shares of Class B
Common Stock and 75 million shares of Preferred Stock. The number of
shares of Class A Common Stock and Class B Common Stock would be decrease on a
basis proportional to the reverse split ratio approved by the Board of Directors
of the Corporation. For example, if the Board of Directors selected a
reverse stock split ratio of five shares into one share (1-for-5), the number of
authorized shares of Common Stock would comprised of 180 million shares of Class
A Common Stock and 30 million shares of Class B Common
Stock.
Upon the
filing and effectiveness (“Effective Time”) of this amendment to the Restated
Certificate of Incorporation of the Corporation pursuant to the DGCL, each
[ • ]2 shares
of the Corporation’s Common Stock, par value $.01 per share, issued and
outstanding immediately prior to the Effective Time shall automatically be
combined into one (1) validly issued, fully paid and non-assessable share
of Common Stock without any further action by the Corporation or the holder
thereof, subject to the treatment of fractional share interests as described
below (such combination, the “Reverse Stock Split”). No fractional shares of
Common Stock shall be issued in connection with the Reverse Stock Split.
Stockholders who otherwise would be entitled to receive fractional shares of
Common Stock shall be entitled to receive cash (without interest) from the
Corporation’s transfer agent in lieu of such fractional shares in an amount
equal to the proceeds attributable to the sale of such fractional shares
following the aggregation and sale by the Corporation’s transfer agent of all
fractional shares otherwise issuable.
Stockholders
who hold certificates that immediately prior to the Effective Time represented
shares of Common Stock (“Old Certificates”) shall be entitled to receive such
cash payment in lieu of fractional shares upon receipt by the Corporation’s
transfer agent of the stockholder’s properly completed and duly executed
transmittal letter and the surrender of the stockholder’s Old Certificates.
After the Effective Time, each Old Certificate that has not been surrendered
shall represent that number of shares of Common Stock into which the shares of
Common Stock represented by the Old Certificate shall have been combined,
subject to the elimination of fractional share interests as described
above.”
FOURTH: The foregoing amendment was
duly adopted in accordance with Section 242 of the DGCL.
FIFTH: The foregoing amendment shall be
effective upon filing with the Secretary of State of the State of
Delaware.
IN
WITNESS WHEREOF, the ICO Global Communications (Holdings) Limited has caused
this Certificate of Amendment to Restated Certificate of Incorporation to be
duly executed as of the ____ day of _____, 200_.
ICO GLOBAL COMMUNICATIONS (HOLDINGS)
LIMITED
By:
Name:
Title:
2 The reverse stock split
ratio will be between and including five and twenty into one
share. The Certificate of Amendment that is filed with the Secretary
of State of the State of Delaware will include only one ratio determined by the
Board of Directors of the Corporation.
PROXY
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ICO
GLOBAL COMMUNICATIONS (HOLDINGS) LIMITED
The
undersigned hereby appoints Michael P. Corkery and John L. Flynn, and each of
them, with power to act without the other and with power of substitution, as
proxies and attorneys-in-fact and hereby authorizes them to represent and vote,
as provided on the other side, all the shares of ICO Global Communications
(Holdings) Limited Common Stock which the undersigned is entitled to vote, and,
in their discretion, to vote upon such other business as may properly come
before the 2009 Annual Meeting of Stockholders of the Company to be held June
19, 2009 or any adjournment or postponement thereof, with all powers which the
undersigned would possess if present at the Meeting.
(Continued,
and to be marked, dated and signed, on the other side)
Address
Change/Comments (Mark the corresponding box on the reverse
side)
^
FOLD AND DETACH HERE ^
You
can now access your ICO Global Communications (Holdings) Limited account
online.
Access
your ICO Global Communications
(Holdings) Limited stockholder account online via Investor
ServiceDirect®
(ISD).
The
transfer agent for ICO Global Communications (Holdings) Limited now makes it
easy and convenient to get current information on your shareholder
account.
•
View account status
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•
View payment history for dividends
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•
View certificate history
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•
Make address changes
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•
View book-entry information
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•
Obtain a duplicate 1099 tax form
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•
Establish/change your PIN
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Visit
us on the web at http://www.bnymellon.com/shareowner/isd
For
Technical Assistance Call 1-877-978-7778 between 9am-7pm Monday-Friday Eastern
Time
****TRY
IT OUT****
www.bnymellon.com/shareowner/isd
Investor
ServiceDirect®
Available
24 hours per day, 7 days per week
TOLL
FREE NUMBER: 1-800-370-1163
|
Choose
MLinkSM
for fast, easy and secure 24/7 online access to your future proxy
materials, investment plan statements, tax documents and more. Simply log
on to Investor
ServiceDirect® at www.bnymellon.com/shareowner/isd
where step-by-step instructions will prompt you through
enrollment.
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THIS
PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED
“FOR” THE ELECTION OF DIRECTORS AND “FOR” ITEMS 2 THROUGH 3
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
Mark Here
for Address Change or
Comments
o
SEE
REVERSE
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FOR
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WITHHELD
FOR
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*EXCEPTIONS
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ITEM
1 - ELECTION OF DIRECTORS
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Nominees:
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Craig O. McCaw
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Barry L. Rowan
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Samuel L. Ginn
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H. Brian Thompson
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Nicolas Kauser
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David Wasserman
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INSTRUCTIONS:
To withhold authority to vote for any individual nominee, mark the
“Exceptions” box above and write that nominee’s in the space provided
below.
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FOR
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ABSTAIN
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ITEM
2 – RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
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FOR
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ABSTAIN
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ITEM
3 – APPROVAL OF AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO
EFFECT REVERSE STOCK SPLIT
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WILL
ATTEND
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If
you plan to attend the annual meeting, please mark the WILL ATTEND
box
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NOTE:
Please sign as name appears hereon. Joint owners should each sign. When signing
as attorney, executor, administrator, trustee or guardian, please give full
title as such.
^
FOLD AND DETACH HERE ^
WE
ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING.
BOTH
ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet
and telephone voting is available through 11:59 PM Eastern Time
the
day prior to the June 19, 2009 stockholder meeting date.
Your
Internet or telephone vote authorizes the named proxies to vote your shares in
the same manner
as
if you marked, signed and returned your proxy card.
INTERNET
http://www.eproxy.com/icog
Use the
Internet to vote your proxy. Have your proxy card in hand when you
access the web site.
OR
TELEPHONE
1-866-580-9477
Use any
touch-tone telephone to vote your proxy. Have your proxy card in hand when you
call.
If you
vote your proxy by Internet or by telephone, you do NOT need to mail back your
proxy card.
To vote
by mail, mark, sign and date your proxy card and return it in the enclosed
postage-paid envelope.
Important
notice regarding the Internet availability of proxy materials for the Annual
Meeting of Stockholders
The Proxy
Statement and the 2008 Annual Report to Stockholders are available at:
http://bnymellon.mobular.net/bnymellon/icog