def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under Rule 14a-12
Mobility Electronics, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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MOBILITY
ELECTRONICS, INC.
17800 North Perimeter Drive,
Suite 200
Scottsdale, Arizona 85255
(480) 596-0061
April 9,
2008
Dear Stockholder:
You are cordially invited to attend the annual meeting of
stockholders of Mobility Electronics, Inc., a Delaware
corporation, to be held at 10:00 a.m., local time, on
Wednesday, May 21, 2008 at the Scottsdale Marriott at
McDowell Mountains, 16770 North Perimeter Drive, Scottsdale,
Arizona 85260. The attached Notice of Annual Meeting and Proxy
Statement fully describe the formal business to be transacted at
the meeting, which includes the election of two directors to
serve until the annual meeting of stockholders in 2011, the
ratification of the selection of KPMG LLP as our independent
registered public accounting firm and such other matters that
shall properly come before the meeting or any adjournments
thereof. We have also enclosed a copy of our Annual Report on
Form 10-K
for the fiscal year ended December 31, 2007.
Our directors and officers will be present to help host the
meeting and to respond to any questions that our stockholders
may have. I hope that you will be able to attend.
Our Board of Directors believes that a favorable vote on the
matters to be considered at the meeting is in the best interest
of Mobility and our stockholders and unanimously recommends a
vote FOR such matters. Accordingly, we urge you to
review the attached material carefully and to return the
enclosed proxy card promptly. Whether or not you plan to attend
the meeting, please complete, sign, date and return your proxy
card in the enclosed envelope. If you attend the meeting, you
may vote in person if you wish, even though you have previously
returned your proxy card. If you hold your shares through an
account with a brokerage firm, bank or other nominee, please
follow the instructions you receive from them to vote your
shares.
On behalf of your Board of Directors, thank you for your support.
Sincerely,
Michael D. Heil
President and Chief Executive Officer
MOBILITY
ELECTRONICS, INC.
17800 North Perimeter Drive,
Suite 200
Scottsdale, Arizona 85255
(480) 596-0061
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 21, 2008
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
of Mobility Electronics, Inc. (the Company) will be
held at 10:00 a.m., local time, on Wednesday, May 21,
2008 at the Scottsdale Marriott at McDowell Mountains, 16770
North Perimeter Drive, Scottsdale, Arizona 85260, for the
following purposes:
1. to elect two members of the Board of Directors, for a
three-year term, to serve until the annual meeting of
stockholders in 2011;
2. to ratify the selection of KPMG LLP as our independent
registered public accounting firm for the fiscal year ending
December 31, 2008; and
3. to transact such other business as may properly come
before the meeting or any adjournments thereof.
The Board has fixed the close of business on April 1, 2008
as the record date for determining stockholders entitled to
notice of, and to vote at, the meeting or any adjournments
thereof.
A list of stockholders entitled to vote at the meeting will be
open to examination by any stockholder, for any purpose germane
to the meeting, at the location of the meeting on May 21,
2008 and during ordinary business hours for a period of at least
ten days prior to the meeting at the Companys offices
located at 17800 North Perimeter Drive, Suite 200,
Scottsdale, Arizona 85255.
Information concerning the matters to be acted upon at the
meeting is more fully described in the accompanying Proxy
Statement.
Your vote is important. Whether or not you expect to attend
the meeting, please complete, date and sign the enclosed proxy
card and mail it promptly to assure that your shares are
represented at the meeting. A return envelope (which is postage
prepaid if mailed in the United States) is provided. Even if you
have given your proxy, you may still vote in person if you
attend the meeting. If you hold shares through an account with a
brokerage firm, bank or other nominee, please follow the
instructions you receive from them to vote your shares.
By Order of the Board of Directors,
Brian M. Roberts
Secretary
Scottsdale, Arizona
April 9, 2008
TABLE OF
CONTENTS
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MOBILITY
ELECTRONICS, INC.
17800 North Perimeter Drive,
Suite 200
Scottsdale, Arizona 85255
(480) 596-0061
PROXY
STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 21, 2008
This proxy statement and the accompanying proxy are first being
mailed on or about April 9, 2008 to the holders of the
common stock of Mobility Electronics, Inc., a Delaware
corporation, by the Board of Directors to solicit proxies for
use at the annual meeting of stockholders to be held at
10:00 a.m., local time, on May 21, 2008 at the
Scottsdale Marriott at McDowell Mountains, 16770 North Perimeter
Drive, Scottsdale, Arizona 85260, or at such other time and
place to which the meeting may be adjourned.
At the meeting, our stockholders will consider and vote upon the
following matters:
1. the election of two members of the Board of Directors,
which will consist of a total of five directors, to serve until
the annual meeting of stockholders in 2011;
2. the ratification of the selection of KPMG LLP as our
independent registered public accounting firm for the fiscal
year ending December 31, 2008; and
3. such other business as may properly come before the
meeting or any adjournments thereof.
REVOCABILITY
OF PROXIES
A proxy may be revoked before it is exercised by delivering
written notice of such revocation to Computershare Investor
Services, 350 Indiana Street, Suite 800, Golden CO 80401,
Attention: Proxy Department, which revocation must be received
before May 21, 2008. If notice of revocation is not
received by such date, a stockholder may nevertheless revoke a
proxy by attending the meeting and voting in person. If your
shares are held of record by a broker, bank or other nominee and
you wish to vote at the meeting, please follow the instructions
you receive from them to vote your shares.
RECORD
DATE AND VOTING SECURITIES
The Board has set the record date for determining the
stockholders entitled to vote at the meeting as of the close of
business on April 1, 2008. Mobilitys common stock,
par value $0.01 per share, constitutes the only class of
securities entitled to notice of, or to vote at, the meeting. As
of the record date, we had 31,734,851 shares of common
stock issued and outstanding. A holder of common stock on the
record date shall be entitled to cast one vote for each share of
common stock registered in his or her name.
QUORUM
AND VOTING
Our bylaws require the presence at the meeting, in person or
represented by proxy, of the holders of a majority of the shares
of our common stock issued and outstanding and entitled to vote
to constitute a quorum to transact business. Abstentions and
broker non-votes (shares held by a broker or nominee
that does not have the authority, either express or
discretionary, to vote on a particular matter) will be treated
as shares that are present for purposes of determining the
presence of a quorum. In the election of directors, abstentions
will have no effect on the outcome of the vote; however, in the
votes on the other matters that properly come before the meeting
abstentions will have the effect of votes against
the proposals. Broker non-votes are not considered to be shares
entitled to vote and will not affect the outcome of any vote at
the meeting.
If a quorum is present, in order to be elected as a director, a
nominee must receive the affirmative vote of the holders of a
plurality of the shares of common stock present, either in
person or by proxy, and entitled to vote on the
election of directors. If a quorum is present, approval of all
other matters that properly come before the meeting requires the
affirmative vote of the holders of a majority of the shares of
common stock present, either in person or by proxy, and entitled
to vote on the matter presented at the meeting.
Unless contrary instructions are indicated on the enclosed
proxy, all shares represented by valid proxies received pursuant
to this solicitation (and which have not been revoked in
accordance with the procedures set forth above) will be voted
(i) FOR the election of the nominees for director named
under Proposal No. 1; (ii) FOR the ratification
of the selection of KPMG LLP as our independent registered
public accounting firm for the fiscal year ending
December 31, 2008; and (iii) in accordance with the
best judgment of the named proxies on any other matters properly
brought before the meeting. In the event you specify a different
choice by means of the enclosed proxy, your shares will be voted
in accordance with those instructions.
If sufficient votes for approval of the matters to be considered
at the annual meeting have not been received prior to the
meeting date, we may postpone or adjourn the annual meeting in
order to solicit additional votes. The form of proxy being
solicited by this proxy statement provides the authority for the
proxy holders, in their discretion, to vote the
stockholders shares with respect to a postponement or
adjournment of the annual meeting. At any postponed or adjourned
meeting, proxies received pursuant to this proxy statement will
be voted in the same manner described in this proxy statement
with respect to the original meeting.
Under the Delaware General Corporation Law, stockholders do not
have any rights of appraisal or similar rights of dissenters
with respect to the proposals set forth in this proxy statement.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
The Board has nominated Peter L. Ax and Michael J. Larson for
election to the Board as Class II directors at the meeting,
to serve until the 2011 annual meeting of stockholders and until
their respective successors have been elected and qualified.
Unless otherwise directed, the persons named in the proxy intend
to vote all proxies FOR the election of Messrs. Ax
and Larson to the Board. Each of the nominees has consented to
serve as a director of the Company if elected. If, at the time
of the meeting, the nominees are unable or decline to serve as a
director, the discretionary authority provided in the enclosed
proxy will be exercised to vote for a substitute candidate
designated by the Board. The Board has no reason to believe that
the nominees will be unable or will decline to serve as a
director.
Vote
Required
In order to be elected as a director, a nominee must receive the
affirmative vote of a plurality of the votes of the shares of
common stock present, either in person or by proxy, and entitled
to vote on the election of directors. Under Delaware law,
abstentions and broker non-votes will not be counted as voting
on the election of directors and will not affect the election of
the nominees receiving a plurality of the votes cast. The Board
recommends a vote FOR the election of Messrs. Ax and
Larson to the Board.
Board of
Directors
Our Board currently consists of six members; however, the Board
has authorized only five director positions effective as of our
annual meeting of stockholders on May 21, 2008. One of our
current directors, Mr. Harris, serves as a Class II
director whose term will expire at the meeting. Mr. Harris
has indicated that he will retire from the Board at the end of
his current term. As a result, assuming Messrs. Ax and
Larson are elected at the meeting, our Board will consist of
only five members following the meeting.
Each director holds office until the directors term
expires, the director resigns, is removed or dies, or until the
directors successor is duly elected and qualified. Our
bylaws provide for a classified Board. In accordance with the
terms of our bylaws, our Board is divided into three classes
whose terms expire at different times. The three classes are
currently comprised of the following directors:
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Class I currently consists of Larry M. Carr, Peter L. Ax
and Michael J. Larson, who will serve until the annual meeting
of stockholders to be held in 2010. The Companys bylaws,
however, require that, in the
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event of any change in the size of the Board, the number of
directors in each class shall be adjusted so that thereafter
each of the three classes shall be composed, as nearly as may be
possible, of one-third of the authorized number of directors. As
a result, Messrs. Ax and Larson have each agreed, effective
as of their election as Class II directors, to resign from
Class I. In the event either or both of Mr. Ax or
Mr. Larson are not elected as a Class II director, he
or they will remain as Class I directors.
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Class II currently consists of Jeffrey R. Harris, who will
serve until the annual meeting of stockholders to be held in
2008. The Class II nominees are Messrs. Ax and Larson.
If elected, subsequent to the meeting, Class II will
consist of Messrs. Ax and Larson, who will serve until the
annual meeting of stockholders to be held in 2011.
Messrs. Ax and Larson are nominees under this
Proposal No. 1.
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Class III consists of Robert W. Shaner and Michael D. Heil,
who will serve until the annual meeting of stockholders to be
held in 2009.
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At each annual meeting of stockholders, the successors to
directors whose terms will then expire will be elected to serve
from the time of election and qualification until the third
annual meeting following election and until their successors
have been duly elected and qualified. Any additional
directorships resulting from an increase in the number of
directors will be distributed among the three classes so that,
as nearly as possible, each class will consist of an equal
number of directors.
Nominees,
Continuing Directors and Executive Officers
Set forth below is information furnished to the Company by the
director nominees, each incumbent director whose terms will
continue following the meeting, and each executive officer who
is not a director. There are no family relationships among any
directors or executive officers of the Company. None of the
corporations or other organizations referenced in the
biographical information below is a parent, subsidiary or other
affiliate of the Company.
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Nominee or Continuing Director
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Age
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and Term / Executive Officer
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Michael D. Heil(1)
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President and Chief Executive Officer and Director with term
expiring in 2009
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Robert W. Shaner
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Director and Chairman of the Board with term expiring in 2009
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Peter L. Ax(2)(3)
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Nominee with term expiring in 2011
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Larry M. Carr(3)(4)
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Director with term expiring in 2010
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Michael J. Larson(2)(4)
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Nominee with term expiring in 2011
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Joan W. Brubacher(1)
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Executive Vice President, Chief Financial Officer and Treasurer
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Jonathan S. Downer(1)
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Senior Vice President, Worldwide Sales and Distribution
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Darryl S. Baker(1)
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Vice President, Chief Accounting Officer and Controller
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Brian M. Roberts(1)
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Vice President, General Counsel and Secretary
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Walter F. Thornton(1)
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Vice President, Product Management and Supply Chain
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Executive Officer |
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Member of Audit Committee |
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Member of Corporate Governance and Nominating Committee |
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Member of Compensation and Human Resources Committee |
3
Michael D. Heil has been our President, Chief Executive
Officer and a member of the Board of Directors since June 2007.
Prior to joining Mobility, from 2004 to 2007, Mr. Heil was
the President and Chief Executive Officer of Astute Networks,
Inc., a fabless semiconductor company focused on the computer
storage market. Prior to joining Astute Networks, from 2003 to
2004, Mr. Heil served as an outside director and consultant
to several early-stage technology companies, including Locus
Telecommunications and Maximize Wireless Solutions. From 2001 to
2002, Mr. Heil served as the Chief Executive Officer of
Archway Digital Systems, Inc., a next generation blade-server
start-up
focused on the datacenter market. From 1999 to 2000,
Mr. Heil served as the Chief Executive Officer of
Broadstream Communications, Inc., a provider of last mile
wireless telecommunication. From 1995 to 1999, Mr. Heil was
employed by Compaq Computer Corporation, serving from 1998 to
1999 as its Senior Vice President, Worldwide Sales and
Marketing, where he was responsible for sales, marketing,
service and support for all Compaq products and services
worldwide. From 1995 to 1998, Mr. Heil served as
Compaqs Senior Vice President and General Manager,
Consumer Products Group where he managed the development,
marketing and sales of all of Compaqs consumer products
and services worldwide and introduced the first portable
computer designed for the consumer market. Prior to joining
Compaq, from 1989 to 1995, Mr. Heil was President and
General Manager of Los Angeles Cellular Telephone Company, a
cellular phone operation company and, from 1985 to 1989,
Mr. Heil was employed by Sony Corporation of America, most
recently serving as its President, Display Products Company,
where he managed the direct view, projection television and
Watchman product lines. Mr. Heil holds a bachelors
degree in Philosophy from the University of Texas.
Robert W. Shaner has been a director since May 2004 and
was appointed as the Chairman of our board in June 2007. From
December 2002 to September 2005, Mr. Shaner served as a
director of REMEC, Inc., a wireless equipment and military
product manufacturer, and from February 2004 to September 2004,
served as its Interim Chief Executive Officer. From January 2001
to February 2003, Mr. Shaner served as the president of
Wireless Operations for Cingular Wireless, LLC, a joint venture
between the wireless divisions of SBC Communications Inc. and
BellSouth Corporation. From November 1999 to January 2001,
Mr. Shaner served as President and Chief Executive Officer
of Pacific Bell Wireless and Southwestern Bell Mobile Systems,
providers of wireless communication services to consumers and
businesses. Mr. Shaner served as the President and Chief
Executive Officer of Pacific Bell Wireless from August 1998 to
November 1999. From March 1997 to July 1998, Mr. Shaner
served as president of SBCI Europe and Middle East for SBC
International, Inc. Prior to 1997, Mr. Shaner held various
management positions at Southwestern Bell Telephone/Telecom and
Cellular One. Mr. Shaner also currently serves as the
Chairman of the Board of Trustees of Central Methodist
University and as a director of Interdigital Communications
Corporation, a designer, developer and provider of advanced
wireless technologies and products that drive voice and data
communications.
Peter L. Ax has been a director since December 2007 and
is a member of the Audit Committee and the Corporate Governance
and Nominating Committee. Mr. Ax is the Lead Director of
Meritage Homes Corporation and has been a member of that
Companys board since 2002. Mr. Ax is currently the
managing partner of Phoenix Capital Management, a merchant
banking firm. Mr. Ax is the former chairman and chief
executive officer of SpinCycle, Inc., a publicly-held
consolidator and developer of coin-operated laundromats.
Previously, Mr. Ax served as head of the Private Equity
Division and senior vice president of Lehman Brothers in New
York. Mr. Ax serves on the Advisory Board of Directors of
Cascadia Capital, a Seattle based investment banking and
merchant banking firm. Mr. Ax holds an M.B.A. from the
Wharton School at the University of Pennsylvania and a law
degree from the University of Arizona, and has been a certified
public accountant. He has also been an accounting instructor at
the Wharton School.
Larry M. Carr has been a director since September 2000
and is Chairman of the Corporate Governance and Nominating
Committee and a member of the Compensation and Human Resources
Committee. Mr. Carr has served as Chairman of the Board of
Simtrol, Inc., formerly Video Conferencing Systems, Inc., a
software company specializing in device control and monitoring,
since 1998, and has been a director since 1993. Mr. Carr is
also Chairman of the Board of NurseCore Management Services,
LLC, a temporary services company in the healthcare industry,
and a director of OHA Financial, Inc.
4
Michael J. Larson has been a director since October 2007
and is a member of the Audit Committee and the Compensation and
Human Resources Committee. Since 2002, Mr. Larson has
served as Senior Vice President and General Manager of the
Personal Systems Group, Americas for Hewlett-Packard Company.
The Personal Systems Group is responsible for
Hewlett-Packards business and consumer PCs, mobile
computing devices, workstations, and managed home products.
Mr. Larson joined Hewlett-Packard following its merger with
Compaq Computer Corporation. From 1996 through 2001,
Mr. Larson served in a variety of senior management
positions at Compaq including Senior Vice President and General
Manager of the Worldwide Access Business Group, which was
responsible for all consumer and commercial personal computers.
Mr. Larsons professional experience also includes
holding positions of increasing responsibility with companies
such as Toshiba, Sony, The
Coca-Cola
Company Food Division, Johnson & Johnson, and The
Carnation Company. Mr. Larson holds a Bachelor of Arts
degree in Economics from Wake Forest University.
Executive
Officers
Joan W. Brubacher joined us in 1998 as our Senior
Financial Analyst, was appointed Controller in 1999 and promoted
to Vice President in 2000. She was appointed to the position of
Vice President and Chief Financial Officer in 2001 and Executive
Vice President and Chief Financial Officer in 2002. Prior to
joining us, Ms. Brubacher served as Chief Financial Officer
for Phase Laser Systems, Inc., an electronics
development/manufacturing firm. Previously, she served as Chief
Financial Officer and subsequently as Chief Operating Officer
for Laserex, Inc., a laser pointer manufacturing company.
Ms. Brubacher began her career with the international
public accounting firm Ernst & Whinney (now
Ernst & Young) and holds a bachelors degree in
Business Administration with concentration in Accounting from
Kansas State University.
Jonathan S. Downer joined us in July 2006 as Senior Vice
President, Worldwide Sales and Distribution. Prior to joining
Mobility, Mr. Downer was employed by Motorola, Inc. for
approximately eleven years. During Mr. Downers tenure
at Motorola, he served as the General Manager, Americas for
Motorolas Companion Products division from June 2003 to
July 2006, the General Manager of the BellSouth/Cingular Account
for Motorola PCS from February 1999 to August 2000, and National
Sales Director for Motorola PCS (Canada) from October 1995 to
February 1999. Prior to joining Motorola, Mr. Downer served
as General Manager of the Mobile Communications division of
Robert Bosch Canada from June 1992 to October 1995.
Mr. Downer holds an MBA from Northwestern Universitys
Kellogg Graduate School of Management and a bachelors
degree in Business Administration from Ryerson University.
Darryl S. Baker joined us in October 2001 as Controller.
Mr. Baker was appointed Vice President in May 2002 and was
appointed Chief Accounting Officer in April 2006. Prior to
joining Mobility, from 1997 to 2001, Mr. Baker served as
corporate controller for various publicly traded and
entrepreneurial companies, including SkyMall, an integrated
specialty retailer, and Integrated Information Systems, a
provider of secure integrated information solutions. Prior to
1997, Mr. Baker was an audit manager for Ernst &
Young. Mr. Baker currently serves as a member of the AeA
National Committee on Sarbanes-Oxley. Mr. Baker holds a
bachelors degree in Accountancy from the Marriott School
of Management at Brigham Young University and is a Certified
Public Accountant.
Brian M. Roberts joined us in August 2003 as Corporate
Counsel. Mr. Roberts was appointed Secretary in December
2003, General Counsel in May 2005, and Vice President in April
2006. Prior to joining us, Mr. Roberts was an attorney with
the law firm of Snell & Wilmer LLP from September 1998
to August 2003. Mr. Roberts holds a bachelors degree
in Business Administration and a law degree, both of which were
received from the University of Kansas.
Walter F. Thornton joined us in October 2003 as Senior
Financial Analyst and was promoted to Senior Manager of
Corporate Development in November 2004, Director of Product
Marketing & Compatibility in July 2005, Vice President
of Power Product Management in April 2006, and Vice President,
Product Management and Supply Chain in October 2007.
Mr. Thornton is responsible for the Companys product
management, compatibility and engineering. Prior to joining us,
Mr. Thornton served as Director of Training and Development
for SpinCycle, Inc. and Cleanwave, Inc., a partnership between
SpinCycle and Shell Chemical. Previously, Mr. Thornton
managed and consulted for various entrepreneurial companies.
Mr. Thornton holds an MBA from Thunderbird School of Global
Management and a bachelors degree with concentration in
finance from Georgetown University.
5
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
ELECTION OF MESSRS. AX AND LARSON TO THE BOARD OF
DIRECTORS.
BOARD
COMMITTEES, INDEPENDENCE AND MEETING ATTENDANCE
Board and
Committee Independence
The Board of Directors has determined each of the following
directors to be an independent director as such term
is defined in Marketplace Rule 4200(a)(15) of the rules of
The NASDAQ Global Market:
Peter L. Ax
Larry M. Carr
Jeffrey R. Harris
Michael J. Larson
Robert W. Shaner
In this proxy statement, these five directors are sometimes
referred to individually as an Independent Director
and collectively as the Independent Directors.
The Board of Directors has also determined that each member of
the Audit, Compensation and Human Resources, and Corporate
Governance and Nominating committees meets the independence
requirements applicable to those committees prescribed by the
rules of The NASDAQ Global Market, the Securities and Exchange
Commission and the Internal Revenue Service.
Meetings
of Independent Directors
The Independent Directors meet in executive session at least
twice annually. These meetings are chaired by the Chairman of
our Board, or our Lead Independent Director in the event the
Chairman is not independent, who is appointed on an annual
basis. We only appoint a Lead Independent Director in the event
that our Chairman is not an independent member of our Board.
Only Independent Directors are eligible to serve as the Lead
Independent Director. Mr. Shaner currently serves as our
Chairman and, because Mr. Shaner is an Independent
Director, we do not currently have a Lead Independent Director.
Board and
Committee Meetings
Our Board meets on a regularly scheduled basis to review
significant developments affecting the Company and to act on
matters requiring approval of the Board. It also holds special
meetings when an important matter requires action by the Board
between scheduled meetings. During 2007, the Board held twenty
meetings, the Compensation and Human Resources Committee held
twelve meetings, the Audit Committee held ten meetings, and the
Corporate Governance and Nominating Committee held five
meetings. During 2007, each member of the Board participated in
at least 75% of all Board and applicable committee meetings held
during the period for which he was a director.
Board
Committees
During 2007, the Board had three standing committees: the
Compensation and Human Resources Committee, the Audit Committee,
and the Corporate Governance and Nominating Committee. Each of
these committees has a written charter which is available on our
website at
http://www.mobilityelectronics.com.
Audit Committee. The Companys Audit
Committee is a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the
Exchange Act. The Audit Committee of the Board currently
consists of Messrs. Harris (Chair), Ax and Larson. The
Audit Committee aids management in the establishment and
supervision of our financial controls, evaluates the scope of
the annual audit, reviews audit results, makes recommendations
to our Board regarding the selection of our independent
registered public accounting firm, consults with management and
our independent registered public accounting firm prior to the
presentation of financial statements to stockholders and, as
appropriate, initiates inquiries into aspects of our financial
affairs.
6
The Board has determined that each member of the Audit
Committee Messrs. Harris, Ax and
Larson is an audit committee financial
expert as such term is defined in Item 407(d) of
Regulation S-K
promulgated by the Securities and Exchange Commission. The Board
of Directors has also determined that each member of the Audit
Committee is independent under the rules stated above under
Board and Committee Independence.
Compensation and Human Resources
Committee. The Compensation and Human Resources
Committee of the Board, which we refer to as the Compensation
Committee, currently consists of Messrs. Carr and Larson.
William O. Hunt served as the Chairman of the Compensation
Committee prior to his resignation on March 6, 2008. The
Board has not yet determined whether to replace
Mr. Hunts position on the Compensation Committee with
another Independent Director following the meeting. The
Compensation Committee makes determinations concerning salaries
and incentive compensation for our executive officers, directors
and certain employees and consultants and administers our 2004
Omnibus Long-Term Incentive Plan, our 2004 Non-Employee Director
Long-Term Incentive Plan, our 1996 Long-Term Incentive Plan, and
our incentive compensation program. The Board of Directors has
also determined that each member of the Compensation Committee
is independent under the rules stated above under Board
and Committee Independence.
The Compensation Committees membership is determined by
the Board of Directors and during 2007 was composed of three
Independent Directors. The Compensation Committee has the
authority to delegate any of its responsibilities to
subcommittees as the Compensation Committee may deem appropriate
in its sole discretion. During 2007, the Compensation Committee
did not delegate any of its responsibilities. The Compensation
Committee engaged an outside consulting firm in 2004 and 2005,
Compensation Strategies, Inc., as a consultant to review our
compensation practices and to compare the compensation of our
executive officers and those of a comparative group. The
Compensation Committee did not engage any consultants in 2006
and 2007.
The Compensation Committee meets throughout the year in person,
and by phone, to perform its duties and periodically approves
and adopts, or makes recommendations to the Board for, the
Companys compensation decisions (including the approval of
grants of restricted stock units to our named executive
officers). The CEO and the General Counsel attend regular
Committee meetings (each meeting typically concludes with an
executive session during which only the Committee members are
present).
For more information on the processes and procedures for the
consideration and determination of executive compensation,
please refer to the discussion under Executive
Compensation Compensation Discussion and
Analysis Our Compensation Committee.
Corporate Governance and Nominating
Committee. The Corporate Governance and
Nominating Committee of the Board, which we refer to as the
Nominating Committee, consists of Messrs. Carr (Chair) and
Ax. Prior to his resignation on March 6, 2008, William O.
Hunt had served as a member of the Nominating Committee. The
Board has not yet determined whether to replace
Mr. Hunts position on the Nominating Committee with
another Independent Director following the meeting. The
Nominating Committees role is to assist the Board in
identifying qualified individuals to become members of the
Board, in determining the composition of the Board and its
committees, in monitoring a process to assess Board
effectiveness and in developing and implementing the
Companys corporate governance policies and practices. The
Board of Directors has also determined that each member of the
Nominating Committee is independent under the rules stated above
under Board and Committee Independence.
Director
Nominations Policy
The Companys Board of Directors has adopted a Director
Nominations Policy. The purpose of the Nominations Policy is to
describe the process by which candidates are selected for
possible inclusion in the Companys recommended slate of
director nominees (Candidates). The Nominations
Policy is administered by the Nominating Committee of the Board.
Minimum
Criteria for Board Members
Each Candidate must possess at least the following specific
minimum qualifications:
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Each Candidate shall be prepared to represent the best interests
of all of the Companys stockholders.
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7
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Each Candidate shall be an individual who has demonstrated
integrity and ethics in his or her personal and professional
life and shall have established a record of professional
accomplishment in his or her chosen field.
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Each Candidate shall be prepared to participate fully in Board
activities, including active membership on at least one Board
committee and attendance at, and active participation in,
meetings of the Board and the committee or committees of which
he or she is a member, and shall not have other personal or
professional commitments that would, in the Nominating
Committees sole judgment, interfere with or limit his or
her ability to do so.
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Each Candidate shall be willing to make, and shall be
financially capable of making, the required investment in the
Companys stock in the amount and within the timeframe
specified in the Companys Corporate Governance Guidelines.
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Desirable
Qualities and Skills
In addition, the Nominating Committee also considers it
desirable that Candidates possess the following qualities or
skills:
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Each Candidate should contribute positively to the existing
chemistry and collaborative culture among Board members.
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Each Candidate should possess professional and personal
experiences and expertise relevant to the Companys goal of
being the leading provider of innovative products and solutions
for the mobile electronics industry.
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Internal
Process for Identifying Candidates
The Nominating Committee has two primary methods for identifying
Candidates (other than those proposed by the Companys
stockholders, as discussed below). First, on a periodic basis,
the Nominating Committee solicits ideas for possible Candidates
from a number of sources members of the Board;
senior level Company executives; individuals personally
known to the members of the Board; and research, including
database and Internet searches.
Second, the Nominating Committee may from time to time use its
authority under its charter to retain at the Companys
expense one or more search firms to identify Candidates (and to
approve such firms fees and other retention terms). If the
Nominating Committee retains one or more search firms, they may
be asked to identify possible Candidates who meet the minimum
and desired qualifications expressed in the Nominations Policy,
to interview and screen such candidates (including conducting
appropriate background and reference checks), to act as a
liaison among the Board, the Nominating Committee and each
Candidate during the screening and evaluation process and
thereafter to be available for consultation as needed by the
Nominating Committee.
The Nominations Policy divides the process for Candidates
proposed by stockholders into the general nomination right of
all stockholders and proposals by Qualified
Stockholders (as defined below).
General
Nomination Right of All Stockholders
Any stockholder of the Company may nominate one or more persons
for election as a director of the Company at an annual meeting
of stockholders if the stockholder complies with the provisions
of
Rule 14a-8
of the Securities Exchange Act of 1934. In order for the
director nomination to be timely, a stockholders notice to
the Company must be delivered to the Companys principal
executive offices not less than 120 days prior to the
anniversary of the date of the Companys proxy statement
released to stockholders in connection with the previous
years annual meeting. In the event that the Company sets
an annual meeting date that is not within 30 days before or
after the date of the immediately preceding annual stockholders
meeting, notice by the stockholder must be received no later
than the close of business on the 10th day following the
day on which notice of the date of the annual meeting was mailed
or public disclosure of the date of the annual meeting was made,
whichever occurs first. The procedures described in the next
paragraph are meant to establish an additional means by which
certain stockholders can have access to the
8
Companys process for identifying and evaluating
Candidates, and is not meant to replace or limit
stockholders general nomination rights in any way.
Proposals
by Qualified Stockholders
In addition to those Candidates identified through its own
internal processes, in accordance with the Nominations Policy,
the Nominating Committee will evaluate a Candidate proposed by
any single stockholder or group of stockholders that has
beneficially owned more than 5% of the Common Stock for at least
one year (and will hold the required number of shares through
the annual stockholders meeting) and that satisfies the notice,
information and consent provisions in the Nominations Policy (a
Qualified Stockholder). All Candidates (whether
identified internally or by a Qualified Stockholder) who, after
evaluation, are then recommended by the Nominating Committee and
approved by the Board, will be included in the Companys
recommended slate of director nominees in its proxy statement.
In order to be considered by the Nominating Committee for an
upcoming annual meeting of stockholders, a notice from a
Qualified Stockholder regarding a potential Candidate must be
received by the Nominating Committee not less than 120 calendar
days before the anniversary of the date of the Companys
proxy statement released to stockholders in connection with the
previous years annual meeting. If the Company changes its
annual meeting date by more than 30 days from year to year,
the notice must be received by the Nominating Committee no later
than the close of business on the 10th day following the
day on which notice of the date of the upcoming annual meeting
is publicly disclosed.
Any Candidate proposed by a Qualified Stockholder must be
independent of the Qualified Stockholder in all respects as
determined by the Nominating Committee or by applicable law. Any
Candidate submitted by a Qualified Stockholder must also meet
the definition of an independent director under the
rules of the Nasdaq National Market.
Evaluation
of Candidates
The Nominating Committee will consider all Candidates identified
through the processes described above, and will evaluate each of
them, including incumbents, based on the same criteria.
If, based on the Nominating Committees initial evaluation,
a Candidate continues to be of interest to the Nominating
Committee, a member of the Nominating Committee, the Chairman of
the Board or the chief executive officer will interview the
Candidate and communicate his or her evaluation to the
Nominating Committee members. Later reviews will be conducted by
other members of the Nominating Committee and senior management.
Ultimately, background and reference checks will be conducted
and the Nominating Committee will meet to finalize its list of
recommended Candidates for the Boards consideration.
Future
Revisions to the Nominations Policy
The Nominations Policy is intended to provide a flexible set of
guidelines for the effective functioning of the Companys
director nominations process. The Nominating Committee intends
to review the Nominations Policy at least annually and
anticipates that modifications will be necessary from time to
time as the Companys needs and circumstances evolve, and
as applicable legal or listing standards change. The Nominating
Committee may amend the Nominations Policy at any time, in which
case the most current version will be available on the
Companys web site at
http://www.mobilityelectronics.com.
COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of Messrs. Carr, Harris, Hunt, Larson or Shaner, all
of whom served as a member of our Compensation Committee during
the past year, has at any time been one of our officers or
employees nor had any relationship that required disclosure
under Item 404 of
Regulation S-K.
None of our executive officers serves as a member of the board
or compensation committee of any entity which has one or more
executive officers serving as a member of our Board or
Compensation Committee.
9
CORPORATE
GOVERNANCE
Current copies of the following materials related to
Mobilitys corporate governance policies and practices are
available publicly on the Companys web site at
http://www.mobilityelectronics.com.
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Audit Committee Charter
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Compensation and Human Resources Committee Charter
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Corporate Governance and Nominating Committee Charter
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Corporate Governance Guidelines
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Director Nominations Policy
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Code of Business Conduct and Ethics
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Policy for Reporting Questionable Accounting or Auditing Matters
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Copies may also be obtained, free of charge, by writing to:
Secretary, Mobility Electronics, Inc.,
17800 N. Perimeter Dr., Suite 200, Scottsdale,
Arizona 85255.
Stockholders may communicate directly with any or all of our
Board members or any Board committee by writing to such
individuals or committees in care of our Secretary. The
Secretary will forward any such communications to the addressee
on a regular basis. The Chairman of the Board will receive all
communications directed to the Board, and the Chairman of each
committee will receive all communications directed to that
specific committee. Please address any written communications as
follows:
Mobility Electronics, Inc.
[Addressee*]
c/o Secretary
17800 N. Perimeter Dr., Suite 200
Scottsdale, Arizona 85255
*Board of Directors
*Audit Committee
*Compensation and Human Resources Committee
*Corporate Governance and Nominating Committee
*Name of individual director
The Corporate Governance Guidelines require each Board member to
attend the Companys annual meeting of stockholders except
for absences due to causes beyond the reasonable control of the
director. There were five directors at the time of the 2007
annual meeting of stockholders and all members were present.
Our Code of Business Conduct and Ethics applies to all of our
directors, officers and employees. A copy of the Code of
Business Conduct and Ethics is posted on our Internet website at
www.mobilityelectronics.com. If we make any amendment to,
or grant any waivers of, a provision of the Code of Business
Conduct and Ethics that applies to our principal executive
officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
where such amendment or waiver is required to be disclosed under
applicable SEC rules, we intend to disclose such amendment or
waiver and the reasons therefore on our Internet website at
www.mobilityelectronics.com.
10
DIRECTOR
COMPENSATION
Director
Compensation Table
The following table sets forth information regarding the
compensation of our non-employee directors for 2007.
Mr. Heil, who is our President and Chief Executive Officer,
does not receive any additional compensation for his service as
a director.
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Fees Earned
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or Paid
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Stock
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Option
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Name
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in Cash ($)(1)
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Awards ($)(1)(2)
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Awards ($)(3)(4)
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Total ($)
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Peter L. Ax
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5,600
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2,112
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-0-
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7,712
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Larry M. Carr
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49,700
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73,493
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-0-
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123,193
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Jeffrey R. Harris
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48,500
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98,956
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-0-
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147,456
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William O. Hunt
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61,600
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91,178
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-0-
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152,778
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Michael J. Larson
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11,800
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9,353
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-0-
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21,153
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Robert W. Shaner
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57,600
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116,858
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-0-
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174,458
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Jerre L. Stead
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12,800
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40,140
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-0-
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52,940
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(1) |
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Through March 31, 2007, directors had the right to elect to
receive quarterly fees earned in cash or stock under the
Companys 2004 Mobility Electronics, Inc. Non-Employee
Director Plan which we refer to as the 2004 Director Plan.
Amounts earned, but paid in stock, are reflected under the
Stock Awards column. The number of shares issued was
determined by dividing the designated portion of the retainer
fee by the average closing price of the last thirty days of each
applicable quarter. The shares to be issued were rounded up to
the next whole share. |
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The directors received the following stock awards in 2007 in
lieu of cash for quarterly fees: |
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Name
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Number of Shares
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$ Amount
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Larry M. Carr
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2,795 shares
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9,000
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Jeffrey R. Harris
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2,795 shares
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9,000
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Robert W. Shaner
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2,484 shares
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8,000
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Jerre L. Stead
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1,553 shares
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5,000
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The dollar amount shown equals the amount recognized for
financial statement reporting purposes for 2007 which was equal
to the grant date fair value calculated in accordance with
SFAS 123(R). A discussion of the assumptions used in
calculating the compensation cost is set forth in Note 15
to the Notes to our consolidated financial statements included
in our Annual Report on
Form 10-K. |
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(2) |
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The number of restricted stock units or RSUs held by the
non-employee directors under the 2004 Director Plan at
December 31, 2007 was as follows: Mr. Ax (27,000),
Mr. Carr (37,000), Mr. Harris (32,500), Mr. Hunt
(32,000), Mr. Larson (28,667), and Mr. Shaner
(37,500). The amount shown in this column reflects the
compensation expense recognized by Mobility in 2007 in
accordance with SFAS 123(R), disregarding for this purpose
the estimate of forfeitures related to service-based vesting
conditions, for the outstanding RSUs granted to the Directors
during 2007 and prior years. For RSUs granted in 2007, this
amount equals the grant date fair value computed in accordance
with SFAS 123(R). The directors received the following RSUs
during 2007: |
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Name
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Number of RSUs
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$ Amount
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Peter L. Ax
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27,000
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48,870
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Larry M. Carr
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37,000
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109,520
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Jeffrey R. Harris
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10,000
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29,600
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William O. Hunt
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9,500
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28,120
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Michael J. Larson
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28,667
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96,955
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Robert W. Shaner
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15,000
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44,400
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Jerre L. Stead
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-0-
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-0-
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11
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There were no forfeitures by the Directors in 2007. A discussion
of the assumptions used in calculating the compensation cost is
set forth in Note 15 to the Notes to our consolidated financial
statements included in our Annual Report on
Form 10-K. |
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RSUs granted to the non-employee directors in 2005, 2006 and
2007 for their re-election to the Board vest 100% on the third
anniversary of the grant date, and may vest earlier, on a pro
rata basis, upon the individuals death, disability or
retirement. RSUs granted to the non-employee directors in 2005,
2006 and 2007 for their service as a member or Chairman of a
Board committee vest 100% upon the one year anniversary of the
grant date, and may vest earlier, on a pro rata basis, upon the
individuals death, disability or retirement. |
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(3) |
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We did not incur any compensation costs in 2007 for financial
statement purposes in accordance with SFAS 123(R) for stock
options granted in previous years to non-employee directors
under the Companys 1996 Incentive Stock Option Plan (the
1996 Plan) and the 2004 Director Plan because
all of these options were fully vested prior to January 1,
2007. No stock options were granted to the non-employee
directors in 2007, and the director compensation program no
longer includes the granting of stock options. A discussion of
the assumptions used in calculating the compensation cost is set
forth in Note 17 of the Notes to Consolidated Financial
Statements of our Annual Report to Stockholders. |
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(4) |
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We did not grant options to any of our directors in 2007 and
none of our directors currently hold any stock options. |
Director
Compensation Program
The Compensation Committee is responsible for reviewing and
approving the compensation of our non-employee directors. All of
our non-employee directors are paid under the same compensation
program. Officers of Mobility Electronics who also serve as
directors do not receive any additional compensation for
services as a director.
We use a combination of cash and equity-based compensation to
attract and retain our non-employee directors. Compensation for
our non-employee directors consists of a monthly cash retainer,
meeting fees, and annual grants of restricted stock units. Stock
options are not currently a part of our non-employee director
compensation program, and we do not provide retirement benefits
to our non-employee directors. We grant equity awards under the
2004 Director Plan. Under this plan, we may grant stock
options, stock appreciation rights, restricted stock awards and
other stock awards as a means to attract and retain qualified
individuals to serve on our Board and to align their interests
with those of our stockholders. An aggregate of
400,000 shares of our common stock may be issued under the
2004 Director Plan. Our non-employee directors are eligible
to participate in the 2004 Director Plan. The
2004 Director Plan is administered and interpreted by our
Compensation Committee. The Compensation Committee has the
authority to determine the members of our Board to whom grants
will be made, the time when grants will be made, and the type,
size, and terms of each grant. The Compensation Committee also
has the authority to deal with any other matters arising under
the 2004 Director Plan. However, the Compensation Committee
does not have authority to re-price stock options or stock
appreciation rights awarded under the Director Plan without
stockholder approval.
Prior to April 1, 2007, the cash and equity compensation
payable to our non-employee directors consisted of the following:
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a cash retainer of $1,000 per month for all board members;
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a cash retainer of $500 per month for the Lead Independent
Director;
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a cash meeting fee of $1,000 for each board meeting attended in
person;
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a cash meeting fee of $500 for each committee meeting and
telephonic board meeting;
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a grant of 22,500 restricted stock units under the
2004 Director Plan upon election, or re-election, to the
board of directors that vested in full on the third anniversary
of the grant date, subject to earlier vesting, on a pro rata
basis, upon a directors death, disability, or retirement;
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an annual grant of 1,200 restricted stock units under the
2004 Director Plan upon appointment to any board committee
that vested in full on the first anniversary of the grant date,
subject to earlier vesting, on a pro rata basis, upon a
directors death, disability, or retirement; and
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an annual grant of 500 restricted stock units under the
2004 Director Plan to the Chairman of any board committee
that vested in full on the first anniversary of the grant date,
subject to earlier vesting, on a pro rata basis, upon the
directors death, disability, or retirement; and
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In addition, prior to April 1, 2007, at the beginning of
each quarter, each non-employee director was entitled to elect
to receive compensation earned during the quarter in shares of
the Companys common stock. The number of shares issued was
determined based on the average of the closing price of the
Companys common stock for each of the final 30 trading
days prior to, and including, the last trading day of each
quarter. Directors were also reimbursed for expenses in
connection with attendance at board and committee meetings.
Beginning April 1, 2007, the cash and equity compensation
paid to our non-employee directors was modified to eliminate the
ability to elect to receive compensation in shares of the
Companys common stock and currently consists of the
following:
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a cash retainer of $2,500 per month for all members other than
the Chairman of the Board;
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a cash retainer of $500 per month for the Lead Independent
Director, if elected;
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a cash meeting fee of $3,500 for each annual meeting of
stockholders;
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a cash meeting fee of $2,500 for each board meeting attended in
person;
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a cash meeting fee of $600 for each committee meeting and
telephonic board meeting;
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a grant of 30,000 restricted stock units under the
2004 Director Plan upon election, or re-election, to the
board of directors that vests in full on the third anniversary
of the grant date, subject to earlier vesting, on a pro rata
basis, upon a directors death, disability, or retirement;
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an annual grant of 2,000 restricted stock units under the
2004 Director Plan upon appointment to any board committee
that vests in full on the first anniversary of the grant date,
subject to earlier vesting, on a pro rata basis, upon a
directors death, disability, or retirement;
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an annual grant of 1,500 restricted stock units under the
2004 Director Plan to the Chairman of the Audit Committee
that vests in full on the first anniversary of the grant date,
subject to earlier vesting, on a pro rata basis, upon the
directors death, disability, or retirement;
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an annual grant of 1,000 restricted stock units under the
2004 Director Plan to the Chairman of the Compensation and
Human Resources Committee that vests in full on the first
anniversary of the grant date, subject to earlier vesting, on a
pro rata basis, upon the directors death, disability, or
retirement; and
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an annual grant of 1,000 restricted stock units under the
2004 Director Plan to the Chairman of the Corporate
Governance and Nominating Committee that vests in full on the
first anniversary of the grant date, subject to earlier vesting,
on a pro rata basis, upon the directors death, disability,
or retirement.
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Effective June 11, 2007, the following compensation
criteria were added to the non-employee director compensation
program:
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a cash retainer of $5,000 per month for the Chairman of the
Board;
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an annual grant of 10,000 restricted stock units under the
2004 Director Plan upon election, or re-election to the
Chairman of the board of directors that vests in full on the
first anniversary of the grant date, subject to earlier vesting,
on a pro rata basis, upon a directors death, disability,
or retirement;
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Directors also continue to be reimbursed for expenses in
connection with their attendance at board and committee meetings.
13
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
We compensate our management through a combination of base
salary, annual incentive bonuses and long-term equity based
awards which are designed to be competitive with those of a peer
group which we have selected for comparative purposes and to
align executive performance with the long-term interests of our
stockholders.
This section discusses the principles underlying our executive
compensation policies and decisions and the most important
factors relevant to an analysis of these policies and decisions.
It provides qualitative information regarding the manner and
context in which compensation is awarded to and earned by our
executive officers and places in perspective the data presented
in the tables and narrative that follow.
Our
Compensation Committee
Our Compensation Committee approves, implements and monitors all
compensation and awards to executive officers including the
chief executive officer, chief financial officer and the other
executive officers named in the Summary Compensation Table
below, all of whom we refer to as the named executive officers
or NEOs.
The Compensation Committees membership is determined by
the Board of Directors and is currently composed of two
non-management directors. The Compensation Committee has the
authority to delegate any of its responsibilities to
subcommittees as the Committee may deem appropriate in its sole
discretion. During 2007, the Compensation Committee did not
delegate any of its responsibilities. The Compensation Committee
engaged an outside consulting firm in 2004 and 2005,
Compensation Strategies, Inc., as a consultant to review our
compensation practices and to compare the compensation of our
executive officers and those of a comparative group. The
Compensation Committee did not engage any consultants in 2006
and 2007.
The Compensation Committee meets throughout the year in person,
and by phone, to perform its duties and periodically approves
and adopts, or makes recommendations to the Board for, the
Companys compensation decisions (including the approval of
grants of restricted stock units to our named executive
officers). The CEO and the General Counsel attend regular
Committee meetings (each meeting concludes with an executive
session during which only the Committee members are present).
The Compensation Committee meets outside the presence of all of
our executive officers, including the named executive officers,
to consider appropriate compensation for our chief executive
officer. For all other named executive officers, the
Compensation Committee meets outside the presence of all
executive officers except our CEO and our General Counsel who
recuses himself when the Compensation Committee discusses his
compensation. Mr. Heil, our CEO, annually reviews each
other named executive officers performance with the
Compensation Committee and makes recommendations to the
Compensation Committee with respect to the appropriate base
salary, payments to be made under our annual cash incentive
program, and the grants of long-term equity incentive awards for
all executive officers, excluding himself. Based in part on
these recommendations from our CEO and other considerations
discussed below, the Compensation Committee approves the annual
compensation package of our executive officers other than our
CEO. The Compensation Committee also annually analyzes our
CEOs performance and determines his base salary, annual
cash incentive plan payout and long-term equity awards based on
its assessment of his performance. The annual performance
reviews of our named executive officers are considered by the
Compensation Committee when making decisions on setting base
salary, targets for, and payments under our annual cash
incentive plan and grants of long-term equity incentive awards.
When making decisions on setting base salary, targets for and
payments under our annual cash incentive program and initial
grants of long-term equity incentive awards for new executive
officers, the Compensation Committee considers the importance of
the position to us, the past salary history of the executive
officer and the contributions to be made by the executive
officer to us.
The Compensation Committee reviewed all components of
compensation for our executive officers, including salary,
target bonus, the dollar value to the executive and cost to us
of all perquisites and all severance and change of control
arrangements. Based on this review, the Compensation Committee
determined that the compensation paid to our named executive
officers reflected our compensation philosophy.
14
Compensation
Philosophy
Our executive compensation plans have been designed to attract,
retain and reward high caliber executives who are expected to
formulate and execute our business plans in a manner that will
provide our stockholders with a higher than average return on
our common stock while ensuring that our compensation levels are
fair and appropriate to both our executives and stockholders. We
believe that the compensation of our named executive officers
should focus their behavior on the achievement of both
individual and corporate annual targets as well as long-term
business objectives and strategies. Specifically, the goals and
objectives of our compensation program are:
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to encourage growth and create increased stockholder value
through the efficient use of corporate assets;
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to recognize the contribution made by exceptional
management; and
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to provide the framework, as a component of the total
compensation program, to attract, retain and motivate highly
qualified management personnel.
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To achieve these goals, we integrate base compensation with
bonuses based upon a variety of factors that include our
operating performance, as well as each participants
individual initiative and performance. The three main elements
of our compensation plans and policies, base salary, annual
incentive bonuses and long-term incentives in the form of equity
grants, have been designed to significantly link total
compensation with our operating performance. We do not use a
mechanical formula for determining the mix of types of
compensation paid to each of our named executive officers;
rather, we look at each individuals performance and our
corporate performance and the CEOs (except with respect to
his own compensation) and the Committees judgment and
experience to determine an appropriate mix of compensation for
each individual.
Encouraging
Growth and Increasing Stockholder Value.
Because we are a relatively small company with limited capital
resources, we believe it is incumbent upon our NEOs to utilize
our available assets in an efficient manner. We have developed
performance criteria measuring revenue growth, profit and loss
performance and other qualitative factors based on achievement
of specific tactical goals that support our strategic
initiatives in order to motivate our NEOs to efficiently use our
corporate assets. We believe that these measures reflect the
efficient use of corporate assets because, if achieved, they
will result in improved performance and increased profitability.
We provide equity incentives, in the form of restricted stock
units, so that our named executive officers will be incentivized
to increase stockholder value over the long term. We utilize
RSUs rather than other forms of equity compensation because we
believe that RSUs effectively meet our equity incentive
objectives and the accounting treatment of RSUs is more
attractive than that of other forms of equity compensation in
light of SFAS 123(R). We provide for both performance-based
and time vesting because we believe that our NEOs should benefit
from meeting or exceeding the goals we establish for performance
vesting while also providing for time vesting in order to
encourage our NEOs to remain with Mobility.
Recognizing
Contributions.
We use a combination of company goals and individual performance
measures to motivate exceptional performance. We award annual
cash bonuses based upon a variety of factors that include our
operating performance, which we believe is best measured by
earnings before interest, taxes, depreciation and amortization,
or EBITDA, as well as each participants individual
initiative and performance as measured by individual goals
unique to the NEOs position and responsibilities. To
compute EBITDA, we begin with reported net income (loss) as
reported in accordance with generally accepted accounting
principles. We then subtract interest income and add income tax
expense, depreciation and amortization.
Attracting,
Retaining and Motivating Personnel.
In early 2004, and again in 2005, the Compensation Committee
retained Compensation Strategies, an independent consultant, to
review our compensation plans in total and the overall
compensation philosophy for our executive officers, particularly
in light of the new accounting rules that had been adopted
relating to the expensing of stock options. Compensation
Strategies recommended a compensation philosophy set at the
15
50th percentile of the market, to be determined by a review
of peer company data, with the ability to go above or below the
50th percentile depending on the experience and
capabilities of the individual and the critical nature of that
individuals role. The peer group consisted of 19
publicly-traded companies based on the following parameters:
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Companies from the computer communication and peripheral
equipment industry;
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Companies with revenues ranging from $54 million to
$212 million; and
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Companies with market capitalizations ranging from
$27 million to $563 million.
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The peer group companies included:
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Computer Network Technology Corporation
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Digi International Inc.
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Concurrent Computer Corporation
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Fargo Electronics, Inc.
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Cray Inc.
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Franklin Electronic Publishers, Inc.
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Dataram Corporation
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Key Tronic Corporation
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MTI Technology Corporation
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Paradyne Networks, Inc.
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Neoware Systems, Inc.
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RadiSys Corporation
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Netopia, Inc.
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SBS Technologies, Inc.
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Network Equipment Technologies, Inc.
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SCM Microsystems, Inc.
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Omnicell, Inc.
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Visual Networks, Inc.
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Overland Storage, Inc.
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We have chosen the 50th percentile because we believe it
allows us to attract and retain executives while also helping us
provide a flexible structure which links compensation to
performance. For each individual officer, we also consider our
needs for that officers skill set, experience, the
contribution that the officer has made or we believe will make,
whether the executive officers skill set is easily
transferable to other potential employers and the competitive
landscape for the executive officers skill set and
position.
Elements
of the Compensation Program
Our executive compensation program is designed to reflect the
philosophy and objectives we have described above. The elements
of executive pay are presented in the table below and discussed
in more detail in the following paragraphs:
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Component
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Type of Payment
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Goal and Objective
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Base Salary
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Fixed annual cash payments with each executive eligible for
annual increase.
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Attract and retain executive talent.
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Annual Incentive Bonus
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Company and Individual Performance-based annual cash payment.
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Encourage growth/Create increased stockholder value. Recognize
contribution of management.
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Long-term Incentives
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Company and Individual Performance-based equity awards.
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Align interests of executives with those of our stockholders.
Encourage executive retention.
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We view these components of compensation as related but
distinct. Although our Compensation Committee does review total
compensation, we do not believe that significant compensation
derived from one component of compensation should negate or
reduce compensation from other components. We determine the
appropriate level for each compensation component based in part,
but not exclusively, on competitive benchmarking consistent with
our recruiting and retention goals, our view of internal equity
and consistency, and other considerations we deem relevant, such
as rewarding extraordinary performance. We believe that, as is
common in the technology sector, long-term equity awards are the
primary compensation-related motivator in attracting and
retaining employees and that salary and bonus levels are
secondary considerations to most employees. Except as described
below, our Compensation Committee has not adopted any formal or
informal policies or guidelines for allocating compensation
between long-term and currently paid out compensation, between
cash and non-cash compensation, or among different forms of
non-cash compensation. However, our Compensation
Committees philosophy is to make
16
a greater percentage of an employees compensation
performance-based as he or she becomes more senior and to keep
cash compensation to the minimum competitive level (which we
believe is at the 50th percentile of our peer group) while
providing the opportunity to be well rewarded through equity if
Mobility performs well over time.
Base Salary. During 2006 and 2007, the
Compensation Committee determined base salaries for our named
executive officers based primarily upon the analysis prepared by
Compensation Strategies in 2005, which included a comparison of
competitive pay practices for the peer companies included in
their study. The Compensation Committee also considered other
factors including the executive officers role, past
performance, experience and capabilities. The Compensation
Committee does not assign relative weights to these factors but
instead makes a subjective determination based on all of the
factors. Base salaries are reviewed on an annual basis as well
as at the time of any promotions or other changes in
responsibilities. In determining whether base salaries should be
increased, the Compensation Committee evaluates individual
performance and the peer group pay levels for similar positions.
We believe that the salaries paid achieved our objectives and
were within our 50th percentile target.
On June 8, 2007, Charles R. Mollo stepped down as our
president and chief executive officer. Prior to that date, there
was no adjustment in Mr. Mollos base salary.
Effective January 1, 2007, Mr. Roberts and
Mr. Thorntons base salaries were each increased by
$15,000 to a total base salary, each, of $165,000 per year.
Effective July 1, 2007, Mr. Downers base salary
was increased by $16,500 to a total base salary of $230,000 per
year. Effective December 1, 2007, Mr. Thorntons
base salary was increased by $25,000 to a total base salary of
$190,000 per year. During 2007, there was no adjustment to
Ms. Brubachers base salary. Mr. Heil began his
employment with Mobility on June 11, 2007 and therefore had
no adjustment in his base salary during 2007.
The base salaries paid to our NEOs in 2006 and 2007 are set
forth below in the Summary Compensation Table. For 2006, base
salary cash compensation was $1,057,195 with our CEO receiving
approximately $340,080. For 2007, base salary cash compensation
was $1,189,036, excluding compensation paid to Mr. Mollo
pursuant to his separation agreement following his resignation
as our president and chief executive officer on June 8,
2007. Including the base salary cash compensation paid to
Mr. Mollo, as our CEO, from January 1, 2007 through
the date of his resignation on June 8, 2007 and the base
salary cash compensation paid to Mr. Heil, as our CEO, from
June 11, 2007 through December 31, 2007, our CEO
received base salary compensation totaling $380,037 during 2007.
On April 1, 2008, Ms. Brubachers base salary was
increased by $10,000 to a total base salary of $268,500 per
year, Mr. Downers base salary was increased by
$15,000 to a total base salary of $245,000 per year, and
Mr. Roberts base salary was increased by $30,000 to a
total base salary of $195,000 per year. To date, no other
adjustments have been made to the base salary compensation of
any other NEO.
Incentive Compensation. The Compensation
Committee is responsible for administering and interpreting our
incentive compensation program, including determining
eligibility, approving performance goals and plans, and
determining bonus awards. The Compensation Committee adopted a
discretionary bonus plan for 2006 based upon individual goals
and company-wide specified consolidated adjusted earnings before
interest, taxes, depreciation and amortization (EBITDA) targets.
For 2007, the Compensation Committee did not set specific
individual goals for each participant, but rather adopted a
discretionary bonus plan based primarily upon the Companys
achievement of EBITDA targets. Following the resignation of our
former CEO, the EBITDA targets and payouts for 2007 were
adjusted to account for the changes implemented by our new CEO
and to align the performance objectives of our executives with
the objectives of our new CEO. For 2008, the Compensation
Committee adopted a discretionary bonus plan based primarily on
EBITDA and revenue targets and, again, did not set specific
individual goals for each participant. We continue to rely
heavily on EBITDA as a performance target because we believe it
accurately reflects our compensation philosophy of encouraging
growth and creating increased stockholder value through the
efficient use of corporate assets. Because it eliminates
non-cash charges such as depreciation and amortization, we
believe that EBITDA provides a true measure not only of our
sales growth but also our ability to control costs. In addition
to EBITDA, we added a revenue target for 2008 because we believe
it encourages sales growth and accounts for our desire to invest
in the long-term growth of our business, potentially at the
expense of our near-term EBITDA, when growth opportunities
present themselves. For more information about the amounts
payable under our incentive compensation programs, please refer
to the Grants of Plan Based Awards Table on page 23.
17
The determination of whether to make incentive compensation
payments under the incentive compensation program takes into
account input from our NEOs and the Compensation
Committees consideration, among other things, of one or
more of the goals outlined below. The Compensation Committee has
the discretion to take individual performance into account and
to make adjustments, up or down, of the amount to be paid under
the formula described below. For example, while we achieved an
EBITDA target during 2005 that would have resulted in payouts in
2006 under the discretionary bonus plan at the 80% level, the
Compensation Committee determined, based on its review of our
operating performance, that bonus awards at this level were not
appropriate. The Compensation Committee did, however, grant
discretionary bonuses at a level ranging between 6% and 10% of
base compensation to reward the executive officers and select
personnel for their performance in connection with sale of a
portfolio of 46 patents and patents pending related to
Mobilitys Split Bridge and serialized PCI intellectual
property for $13 million.
The following is a summary of the individual incentive
compensation programs for our NEOs during 2006 and 2007:
Charles R. Mollo. Mr. Mollo did not
participate in the 2007 program as a result of his resignation
on June 8, 2007. During 2006, Mr. Mollos
individual goal accounted for 50% of his targeted bonus and the
EBITDA target accounted for the other 50%. Mr. Mollos
individual goal during 2006 was for each of the individuals who
directly reported to him to achieve their respective individual
goals. Mr. Mollo received a bonus of $35,500 as a result of
his 2006 individual goal.
Michael D. Heil. Under the 2007 program, the
EBITDA target accounted for 100% of Mr. Heils
targeted bonus. Mr. Heil received a bonus of $190,193 as a
result of the achievement of the 2007 EBITDA target.
Mr. Heil joined the Company on June 11, 2007 and,
therefore, did not participate in the 2006 program.
Joan W. Brubacher. Under the 2007 program, the
EBITDA target accounted for 100% of Ms. Brubachers
targeted bonus. Ms. Brubacher received a bonus of $105,353
as a result of the achievement of the 2007 EBITDA target. During
2006, Ms. Brubachers individual goal accounted for
50% of her targeted bonus and the EBITDA target accounted for
the other 50%. Ms. Brubachers individual goals for
2006 were for each of the individuals who directly reported to
her to achieve their respective individual goals and to
restructure one of Mobilitys commercial relationships by a
specified date. Ms. Brubacher received a bonus of $38,595
as a result of the achievement of her individual goals in 2006.
Jonathan S. Downer. Under the 2007 program,
the EBITDA target accounted for 100% of Mr. Downers
targeted bonus. Mr. Downer received a bonus of $90,634 as a
result of the achievement of the 2007 EBITDA target. During
2006, Mr. Downers individual goals accounted for 86%
of his targeted bonus and the EBITDA target accounted for the
other 14%. Mr. Downers 2006 individual goals included
the completion of agreements with respect to the sale of certain
products to various customers and the achievement of sales and
margin targets for our power business. Mr. Downer received
a bonus of $3,000 as a result of the achievement of his 2006
individual goals. In addition, during 2006, Mr. Downer
received guaranteed bonus payments equal to $114,000 as part of
his employment agreement.
Brian M. Roberts. Under the 2007 program, the
EBITDA target accounted for 100% of Mr. Roberts
targeted bonus. Mr. Roberts received a bonus of $33,623 as
a result of the achievement of the 2007 EBITDA target. During
2006, Mr. Roberts individual goals accounted for 60%
of his targeted bonus and the EBITDA target accounted for the
other 40%. Mr. Roberts 2006 individual goals included
the settlement or successful resolution of litigation and
insurance claims by a specified date and our continued
compliance with all SEC and corporate governance requirements.
Mr. Roberts received a bonus of $24,580 as a result of the
achievement of his 2006 individual goals.
Walter F. Thornton. Under the 2007 program,
the EBITDA target accounted for 100% of Mr. Thorntons
targeted bonus. Mr. Thornton received a bonus of $34,015 as
a result of the achievement of the 2007 EBITDA target. During
2006, Mr. Thorntons individual goals accounted for
60% of his targeted bonus and the EBITDA target accounted for
the other 40%. Mr. Thorntons 2006 individual goals
included the completed development of various products, the
completion of an agreement with a specific customer for a
specific product, and the timely delivery and cost targets of
new product introductions. Mr. Thornton received a bonus of
$11,821 as a result of the achievement of his 2006 individual
goals.
18
None of the NEOs received a bonus for the EBITDA component of
our bonus plan in 2006 as we did not achieve the EBITDA target
in 2006.
Equity Compensation. We believe that stock
ownership by our executive officers, through our equity-based
compensation plans, aligns the interests of the executive
officers with those of our stockholders. By using equity-based
compensation, over a period of time, our executive officers
should become larger holders of common stock. This is intended
to strengthen their identification with our stockholders and
make increasing stockholder value an even more important focus
for our management group. In addition, the Compensation
Committee believes that the use of equity-based compensation
combined with a focus on our operating performance will create a
balance of these two long-term objectives.
Long-term equity grants are made under our 2004 Omnibus
Long-Term Incentive Plan adopted by the Companys
stockholders at its 2004 annual meeting. The Compensation
Committee may make the following types of grants under the
Omnibus Plan, with terms to be established by the Compensation
Committee:
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Stock options;
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Stock appreciation rights;
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Restricted stock awards;
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Performance awards; and
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Other stock-based awards.
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The total aggregate number of shares of our common stock that
may be issued under the Omnibus Plan is 2,350,000 shares.
This share limit will be adjusted by the Compensation Committee
in the event of a stock dividend, spin-off, merger or other
event affecting our capitalization. The Omnibus Plan will
terminate on March 11, 2014.
Prior to 2005, we granted stock options as the main form of
equity-based incentives. We selected options because of the
widespread expectation of employees in our industry that they
would receive stock options and the favorable accounting and tax
treatment to us. However, beginning in 2005 with our adoption of
Financial Accounting Standards No. 123(R), the accounting
treatment of stock options became less attractive. As a result,
beginning in 2005, we began granting long-term, equity-based
compensation in the form of restricted stock units pursuant to a
Company-wide equity compensation program adopted by the
Committee in 2004. These restricted stock units were granted
under the Companys 2004 Omnibus Long-Term Incentive Plan
adopted by the Companys stockholders at its 2004 annual
meeting.
We award restricted stock units primarily on a biennial basis to
existing employees and quarterly to existing employees who have
been promoted and newly hired employees. We chose to grant RSUs
on a biennial basis because we believe it serves to recognize
the contribution of our employees, encourages employee
retention, and allows acceleration objectives to be set in a
manner that creates incentives for improved performance and
increased profitability. We do not time RSU or other equity
grants in coordination with the release of material non-public
information. All full-time employees, including the NEOs,
receive RSUs. We set the vesting of these RSUs based primarily
on long-term service with the Company. For RSUs granted since
January 2007, vesting primarily occurs 25% per year over
4 years. For RSUs granted between January 2005 and January
2007, vesting primarily occurs after 5 years, provided they
may vest earlier upon the achievement of specific performance
objectives tied to EBITDA and net income per share. We chose
these objectives because we believe that the EBITDA and net
income objectives are aligned with our goal of providing
superior stockholder returns. As a result of the achievement of
the 2007 EBITDA target, 50% of the RSUs granted between January
2005 and January 2007 have vested. In addition, all outstanding
RSUs, regardless of when granted, may vest earlier, on a
pro-rata basis, upon the death, disability, termination without
cause, or retirement of the plan participants. This accelerated
vesting is discussed under Termination Payments
below.
The size of the awards granted to the Companys named
executive officers in 2006 and 2007 were based upon a review of
awards granted to executive officers at the peer group described
above and targeted at the 50th percentile level, as well as
the performance of each executive officer compared to our
strategic plan and an analysis of the executive officers
role, past performance, experience and capabilities. During
2008, we made an additional grant of
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RSUs to various executives, including some of our NEOs and
amended the vesting terms of our CEOs performance-based
grant to instead tie the vesting of these RSUs to continued
service with the Company. We made this grant and amendment in
order to encourage continued service by our NEOs and to align
their interests with those of our stockholders.
Other
Executive Benefits and Perquisites
Our NEOs are eligible to participate in all of our employee
benefit plans, such as medical, dental, group life, long-term
disability insurance and our 401(k) plan. In addition,
Mr. Heil and Ms. Brubacher receive a supplemental
executive health insurance policy and are reimbursed for their
home internet costs.
Impact of
Regulatory Requirements on Compensation
Deductibility of Executive
Compensation. Section 162(m) of the Internal
Revenue Code limits the tax deductibility by a publicly-held
corporation of compensation in excess of $1 million paid to
the CEO or any other of its four most highly compensated
executive officers, unless that compensation is
performance-based compensation as defined by the
Internal Revenue Code. We believe that our stock option grants
qualify as performance-based compensation and are not subject to
any deductibility limitations under Section 162(m). The
Compensation Committee considers deductibility under
Section 162(m) with respect to other compensation
arrangements with executive officers. However, the Compensation
Committee and the Board believe that it is in the best interest
of Mobility that the Compensation Committee retain its
flexibility and discretion to make compensation awards, whether
or not deductible, in order to foster achievement of performance
goals established by the Compensation Committee as well as other
corporate goals that the Compensation Committee deems important
to our success, such as encouraging employee retention and
rewarding achievement.
Nonqualified Deferred Compensation. On
October 22, 2004, the American Jobs Creation Act of 2004
was signed into law, changing the tax rules applicable to
nonqualified deferred compensation arrangements. While the final
regulations have not yet become effective, we believe we are in
compliance with the statutory provisions which were effective
January 1, 2005.
Accounting for Stock-Based
Compensation. Beginning on January 1, 2006,
we began accounting for stock-based payments in accordance with
the requirements of SFAS 123(R).
Policy on Recovery of Compensation. Our CEO
and CFO are required to repay certain bonuses and equity-based
compensation they receive if we are required to restate our
financial statements as a result of misconduct as required by
Section 304 of the Sarbanes-Oxley Act of 2002.
COMPENSATION
COMMITTEE REPORT
The Compensation Committee of Mobility has reviewed and
discussed the Compensation Discussion and Analysis required by
Item 402(b) of
Regulation S-K
with management and, based on such review and discussions, the
Compensation Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this Proxy
Statement.
This report is submitted by the members of the Compensation
Committee.
Michael J.
Larson
Larry M. Carr
20
SUMMARY
COMPENSATION TABLE
The following table sets forth information regarding the
compensation of our CEO, our CFO, our three other highest paid
executive officers for 2007 and 2006, and one additional
individual, our former CEO, who would have been one of our
highest paid executive officers for 2007 but for the fact that
this individual was not serving as an executive officer at the
end of the year.
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Non-Equity
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Stock
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Option
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Incentive Plan
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All Other
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Name and Principal
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Salary
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Bonus(1)
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Awards(2)
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Awards(3)
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Compensation
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Compensation
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Total
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Position
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Year
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(4)($)
|
|
|
($)(5)
|
|
|
($)
|
|
|
|
|
|
Charles R. Mollo(6)
|
|
|
2007
|
|
|
|
156,960
|
|
|
|
-0-
|
|
|
|
444,316
|
|
|
|
65,430
|
|
|
|
-0-
|
|
|
|
322,561
|
|
|
|
989,267
|
|
|
|
|
|
Former Chairman of the
|
|
|
2006
|
|
|
|
340,080
|
|
|
|
-0-
|
|
|
|
146,400
|
|
|
|
-0-
|
|
|
|
35,500
|
|
|
|
23,829
|
|
|
|
545,809
|
|
|
|
|
|
Board of Directors,
President and Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael D. Heil
|
|
|
2007
|
|
|
|
223,077
|
|
|
|
-0-
|
|
|
|
215,833
|
|
|
|
-0-
|
|
|
|
190,193
|
|
|
|
11,852
|
|
|
|
640,955
|
|
|
|
|
|
President, Chief Executive
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer and Member of the
Board of Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joan W. Brubacher
|
|
|
2007
|
|
|
|
258,500
|
|
|
|
-0-
|
|
|
|
247,652
|
|
|
|
-0-
|
|
|
|
105,353
|
|
|
|
8,891
|
|
|
|
620,396
|
|
|
|
|
|
Executive Vice President
|
|
|
2006
|
|
|
|
256,808
|
|
|
|
-0-
|
|
|
|
163,370
|
|
|
|
12,402
|
|
|
|
38,595
|
|
|
|
18,107
|
|
|
|
489,283
|
|
|
|
|
|
and Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jonathan S. Downer
|
|
|
2007
|
|
|
|
218,576
|
|
|
|
7,274
|
|
|
|
178,161
|
|
|
|
-0-
|
|
|
|
90,634
|
|
|
|
2,319
|
|
|
|
496,964
|
|
|
|
|
|
Senior Vice President,
|
|
|
2006
|
|
|
|
98,538
|
|
|
|
114,000
|
|
|
|
44,954
|
|
|
|
-0-
|
|
|
|
3,000
|
|
|
|
-0-
|
|
|
|
260,493
|
|
|
|
|
|
Worldwide Sales and
Distribution
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Walter F. Thornton
|
|
|
2007
|
|
|
|
166,923
|
|
|
|
-0-
|
|
|
|
91,005
|
|
|
|
-0-
|
|
|
|
34,015
|
|
|
|
6,854
|
|
|
|
298,797
|
|
|
|
|
|
Vice President, Product
|
|
|
2006
|
|
|
|
131,346
|
|
|
|
-0-
|
|
|
|
55,816
|
|
|
|
-0-
|
|
|
|
11,821
|
|
|
|
5,254
|
|
|
|
204,237
|
|
|
|
|
|
Management and Supply
Chain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian M. Roberts
|
|
|
2007
|
|
|
|
165,000
|
|
|
|
-0-
|
|
|
|
99,805
|
|
|
|
-0-
|
|
|
|
33,623
|
|
|
|
6,362
|
|
|
|
304,790
|
|
|
|
|
|
Vice President, General
|
|
|
2006
|
|
|
|
152,885
|
|
|
|
-0-
|
|
|
|
54,984
|
|
|
|
-0-
|
|
|
|
24,580
|
|
|
|
6,046
|
|
|
|
238,495
|
|
|
|
|
|
Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The annual cash incentive award that is paid to the executive
officers is reflected under the Non-Equity Incentive Plan
Compensation column. The bonus amount for Mr. Downer
represents a $14,000 signing bonus and two minimum quarterly
payments of $50,000 each for the third and fourth quarters of
2006 which were guaranteed at his hiring date. |
|
(2) |
|
The amount shown in this column reflects the compensation
expense for outstanding restricted stock and RSU awards held by
the NEOs recognized by Mobility in 2007 and 2006 in accordance
with SFAS 123(R), disregarding for this purpose the
estimate of forfeitures related to service-based vesting
conditions. There were no forfeitures by the NEOs in 2007 and
2006. The restricted stock awards for which this expense is
shown in the Summary Compensation Table (SCT) also
includes awards granted in 2005 for which Mobility recognized
expense in 2007 and 2006. A discussion of the assumptions used
in calculating the compensation cost is set forth in Note 15 to
the Notes to our consolidated financial statements included in
our Annual Report on
Form 10-K. |
|
(3) |
|
The amount shown in this column reflects the compensation
expense for outstanding options held by the NEOs recognized by
Mobility in 2007 and 2006 in accordance with SFAS 123(R),
disregarding for this purpose the estimate of forfeitures
related to service-based vesting conditions. There were no
forfeitures by the NEOs in 2007 and 2006. The stock option
awards for which this expense is shown in the SCT also includes
awards granted in 2002 and 2003 for which Mobility continued to
recognize expense in 2007 and 2006. A discussion of the
assumptions used in calculating the compensation cost is set
forth in Note 15 to the Notes to our consolidated financial
statements included in our Annual Report on
Form 10-K.
No additional options were granted in 2007 or 2006. |
|
(4) |
|
The amount shown in this column represents the annual cash
incentive award earned under Mobilitys discretionary bonus
plan. |
21
|
|
|
(5) |
|
The amounts set forth under All Other Compensation
represent the aggregate dollar amount for each NEO for
perquisites and other personal benefits, 401(k) contributions by
Mobility, executive health insurance, travel expenses, home
internet reimbursement, and severance pay and paid time off
payout. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Pay
|
|
|
|
|
|
|
401(k)
|
|
|
Executive Health
|
|
|
Travel
|
|
|
Internet
|
|
|
and Paid Time Off
|
|
Name
|
|
Year
|
|
|
($)
|
|
|
Insurance($)
|
|
|
Reimbursements($)
|
|
|
Reimbursement($)
|
|
|
Payout($)
|
|
|
Charles R. Mollo
|
|
|
2007
|
|
|
|
6,200
|
|
|
|
250
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
311,304
|
|
|
|
|
2006
|
|
|
|
6,278
|
|
|
|
12,539
|
|
|
|
4,435
|
|
|
|
577
|
|
|
|
-0-
|
|
Michael D. Heil
|
|
|
2007
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
11,727
|
|
|
|
125
|
|
|
|
-0-
|
|
|
|
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joan W. Brubacher
|
|
|
2007
|
|
|
|
7,556
|
|
|
|
796
|
|
|
|
-0-
|
|
|
|
539
|
|
|
|
-0-
|
|
|
|
|
2006
|
|
|
|
8,464
|
|
|
|
9,149
|
|
|
|
-0-
|
|
|
|
494
|
|
|
|
-0-
|
|
Jonathan S. Downer
|
|
|
2007
|
|
|
|
2,319
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
2006
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Walter F. Thornton
|
|
|
2007
|
|
|
|
6,854
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
2006
|
|
|
|
5,254
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Brian M. Roberts
|
|
|
2007
|
|
|
|
6,362
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
2006
|
|
|
|
6,046
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
(6) |
|
Mr. Mollo resigned all of his positions with Mobility
effective June 8, 2007. Pursuant to the terms of
Mr. Mollos separation agreement, Mr. Mollo
received (a) a total cash severance payment of $578,136,
which represented his annual base salary plus maximum bonus for
2007, assuming 100% achievement of all bonus objectives,
(b) reimbursement of the cost associated with maintaining
his medical and dental benefits through June 8, 2008,
(c) immediate and full vesting of the 100,000 restricted
stock units granted to Mr. Mollo on January 13, 2005,
(d) an extension of the exercise period for the 150,000
stock options granted to Mr. Mollo on December 16,
2003, having an exercise price of $9.05 per share, until
December 16, 2009, and (e) through June 8, 2010,
Mr. Mollo agreed to make himself available for up to ten
hours per month to consult, from time to time, with
Mobilitys Chief Executive Officer. |
22
GRANTS OF
PLAN-BASED AWARDS TABLE
The following table sets forth information regarding the grants
of annual cash incentive compensation, stock options and
restricted stock to our NEOs during 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
|
|
|
All Other
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Future
|
|
|
Stock
|
|
|
Awards:
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payouts Under
|
|
|
Awards:
|
|
|
Number of
|
|
|
Fair Value
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Equity Incentive
|
|
|
Number of
|
|
|
Securities
|
|
|
of Stock
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards(1)
|
|
|
Plan Awards
|
|
|
Shares of
|
|
|
Underlying
|
|
|
and Option
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Target
|
|
|
Stock or
|
|
|
Options
|
|
|
Awards
|
|
Name
|
|
Date
|
|
|
($)(1)
|
|
|
($)(1)
|
|
|
($)(1)
|
|
|
(#)
|
|
|
Units (#)
|
|
|
(#)
|
|
|
($)(2)
|
|
|
Charles R. Mollo
|
|
|
06/08/07
|
|
|
|
N/A
|
(3)
|
|
|
N/A
|
(3)
|
|
|
N/A
|
(3)
|
|
|
|
|
|
|
100,000
|
(4)
|
|
|
|
|
|
|
732,000
|
|
|
|
|
06/08/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,000
|
(5)
|
|
|
65,430
|
|
Michael D. Heil
|
|
|
06/11/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
(6)
|
|
|
|
|
|
|
1,480,000
|
|
|
|
|
06/11/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
08/30/07
|
|
|
|
70,000
|
|
|
|
140,000
|
|
|
|
280,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joan W. Brubacher
|
|
|
01/02/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000
|
(8)
|
|
|
|
|
|
|
251,250
|
|
|
|
|
08/30/07
|
|
|
|
38,775
|
|
|
|
77,550
|
|
|
|
155,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jonathan S. Downer
|
|
|
01/02/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
85,000
|
(8)
|
|
|
|
|
|
|
284,750
|
|
|
|
|
08/30/07
|
|
|
|
33,358
|
|
|
|
66,716
|
|
|
|
133,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
09/13/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
(9)
|
|
|
|
|
|
|
92,250
|
|
Walter F. Thornton
|
|
|
01/02/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,875
|
(8)
|
|
|
|
|
|
|
73,281
|
|
|
|
|
08/30/07
|
|
|
|
12,519
|
|
|
|
25,039
|
|
|
|
50,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian M. Roberts
|
|
|
01/02/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,875
|
(8)
|
|
|
|
|
|
|
73,281
|
|
|
|
|
01/22/07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
(8)
|
|
|
|
|
|
|
69,200
|
|
|
|
|
08/30/07
|
|
|
|
12,375
|
|
|
|
24,750
|
|
|
|
49,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
These columns show the range of awards under our final 2007
incentive compensation program, which is described in the
section Incentive Compensation Program in the
Compensation Discussion and Analysis. The threshold
column represents the amount payable if the EBITDA target is
attained at the 50% level of performance. |
|
|
|
The target column represents the amount payable if
the EBITDA target is attained at the 100% level. |
|
|
|
The maximum column represents the maximum payout if
the EBITDA target is attained at the 200% level. |
|
|
|
The bonus amount for 2007 was paid in March 2008 as shown in the
Summary Compensation Table in the column entitled
Non-Equity Incentive Plan Compensation. |
|
(2) |
|
The amount shown in this column represents the total grant date
fair value of the awards computed in accordance with
SFAS 123(R). See Note 15 to the Notes to our
Consolidated Financial Statements included in our Annual Report
on
Form 10-K
for the valuation assumptions used in determining the grant date
fair value of stock and option grants. |
|
(3) |
|
Mr. Mollo was no longer employed by Mobility at the time
the final 2007 incentive compensation program was adopted in
August 2007. |
|
(4) |
|
Reflects the number of RSUs accelerated in connection with
Mr. Mollos resignation pursuant to his separation
agreement with Mobility. |
|
(5) |
|
The amounts reflected in this column represent the number of
options for which the exercise period was extended in connection
with Mr. Mollos resignation pursuant to his
separation agreement with Mobility. |
|
(6) |
|
Reflects RSUs granted to Mr. Heil as an inducement award
pursuant to Nasdaq Marketplace Rule 4350(i)(1)(A)(iv).
Subject to continued employment, twenty-five percent (25%) of
these RSUs automatically vest on each of June 11, 2008,
June 11, 2009, June 11, 2010 and June 11, 2011.
These RSUs will vest earlier, in full, upon a change of control,
or on a pro rata basis upon the individuals death,
disability, termination without cause or retirement. The dollar
amount recognized by us for these awards is shown in the Summary |
23
|
|
|
|
|
Compensation Table in the column entitled Stock
Awards and their valuation assumptions are referenced in
footnote 2 of that table. |
|
|
|
(7) |
|
Reflects RSUs granted to Mr. Heil as an inducement award
pursuant to Nasdaq Marketplace Rule 4350(i)(1)(A)(iv).
Under the original terms of this RSU award, subject to continued
employment, these RSUs would vest, in increments of 250,000 RSUs
each, only if Mobility achieved annual performance objectives
for the 2009 and 2011 fiscal years, respectively. On
March 19, 2008, the Compensation Committee amended the
vesting schedule for these RSUs such that, subject to continued
employment, twenty-five percent (25%) of these RSUs
automatically vest on each of March 19, 2009,
March 19, 2010, March 19, 2011 and March 19,
2012, with unvested RSUs vesting earlier, on a pro rata basis,
upon Mr. Heils death, disability, termination without
cause or retirement or, in full, upon a change in control of
Mobility. |
|
(8) |
|
Reflects RSUs granted under our 2004 Omnibus Long-Term Incentive
Plan as described in the section Equity Compensation
in Compensation Discussion and Analysis. Subject to continued
employment, twenty-five percent (25%) of these RSUs
automatically vest on each of January 2, 2008,
January 2, 2009, January 2, 2010, and January 2,
2011. These RSUs will vest earlier, in full, upon a change of
control, or on a pro rata basis upon the individuals
death, disability, termination without cause or retirement. The
dollar amount recognized by us for these awards is shown in the
Summary Compensation Table in the column entitled Stock
Awards and their valuation assumptions are referenced in
footnote 2 of that table. |
|
(9) |
|
Mr. Downer was granted 25,000 RSUs under our 2004 Omnibus
Long Term Incentive Plan as a result of the Compensation
Committees determination that we had achieved one of the
objectives set forth in Mr. Downers 2007 compensation
arrangement relating to the completion of a program with a
specific customer. Subject to continued employment, twenty-five
percent (25%) of these RSUs will automatically vest on each of
September 13, 2008, September 13, 2009,
September 13, 2010, and September 13, 2011. These RSUs
will vest earlier, in full, upon a change of control, or on a
pro rata basis upon Mr. Downers death, disability,
termination without cause or retirement. The dollar amount
recognized by us for these awards is shown in the Summary
Compensation Table in the column entitled Stock
Awards and their valuation assumptions are referenced in
footnote 2 of that table. |
Relationship
of Salary and Annual Incentive Compensation to Total
Compensation
The following table sets forth the relationship of salary and
annual incentive compensation to total compensation for each of
our former CEO, current CEO, CFO and remaining NEOs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Annual
|
|
|
|
% of Salary to
|
|
|
Cash Incentive Payment
|
|
Name
|
|
Total Compensation
|
|
|
to Total Compensation
|
|
|
Charles R. Mollo
|
|
|
16
|
|
|
|
|
|
Michael D. Heil
|
|
|
35
|
|
|
|
30
|
|
Joan W. Brubacher
|
|
|
42
|
|
|
|
17
|
|
Jonathan S. Downer
|
|
|
44
|
|
|
|
18
|
|
Walter F. Thornton
|
|
|
56
|
|
|
|
11
|
|
Brian M. Roberts
|
|
|
54
|
|
|
|
11
|
|
Employment
Agreements and Termination Payments
We have employment agreements with Mr. Heil,
Ms. Brubacher and Mr. Downer. Mr. Heils
employment agreement expires on June 11, 2011 and will
continue to automatically renew on a year-to-year basis at the
end of each annual term, unless either party to the agreement
gives the other party notice of termination at least
90 days prior to the end of the then current term.
Ms. Brubachers employment agreement expired on
June 1, 2005, but automatically renewed on June 1,
2005 and will continue to automatically renew on a year-to-year
basis at the end of each annual term, unless either party to the
agreement gives the other party notice of termination at least
90 days prior to the end of the then current term. Neither
the Company nor Ms. Brubacher provided notice 90 days
prior to June 1, 2008 and, therefore, her employment
agreement will extend until June 1, 2009.
Mr. Downers employment agreement expires on
December 31, 2008 and will continue to automatically renew
on a year-to-year basis at the end
24
of each annual term, unless either party to the agreement gives
the other party notice of termination at least 90 days
prior to the end of the then current term. The employment
agreements provide for increases in salary as determined by the
Board of Directors. We do not have employment agreements with
Messrs. Thornton and Roberts.
Pursuant to the terms of the restricted stock unit agreements
awarded during 2005, 2006 and 2007, all RSUs granted to all
employees, including NEOs, will vest on a pro rata basis, upon
the individuals death, disability, termination without
cause or retirement or, in full, upon a change in control of the
Company.
Mr. Mollo. We entered into a separation
agreement with Mr. Mollo, effective June 8, 2007,
pursuant to which Mr. Mollo resigned from his position as a
member, and Chairman, of our Board of Directors, as well as his
positions as our President and CEO. Pursuant to the terms of the
separation agreement, Mr. Mollo received, (a) a total
cash severance payment of $578,136, which represented his annual
salary plus maximum bonus for 2007, assuming 100% achievement of
all bonus objectives, (b) reimbursement for the cost
associated with maintaining Mr. Mollos medical and
dental benefits through June 8, 2008, (c) immediate
and full vesting of the 100,000 restricted stock units granted
to Mr. Mollo on January 13, 2005, (d) an
extension of the exercise period for the 150,000 stock options
granted to Mr. Mollo on December 16, 2003, having an
exercise price of $9.05 per share, until December 16, 2009,
and (e) through June 8, 2010, Mr. Mollo agreed to
make himself available for up to ten hours per month to consult,
from time to time, with our CEO.
Mr. Heil. As of December 31, 2007,
Mr. Heils annual base salary was $400,000.
Mr. Heil has a targeted annual calendar year cash bonus of
70% of his then current salary. Pursuant to his employment
agreement, Mr. Heil agreed to relocate to the
Phoenix/Scottsdale, Arizona metroplex by December 2007 and,
until he did so, we agreed to reimburse him for his reasonable
out-of-pocket costs in commuting from San Diego,
California, including coach air fare on a weekly basis,
temporary lodging, and rental car expenses. If
Mr. Heils employment agreement is terminated as a
result of non-renewal or his constructive termination, death or
disability, then Mr. Heil shall be entitled to receive
(a) an amount equal to one-year of his then applicable
salary, (b) an amount equal to his targeted bonus for the
applicable calendar year multiplied by a fraction, the numerator
of which shall be the actual days he was employed by Mobility
during such calendar year, and the denominator of which shall be
365, and (c) a vested percentage of his original 500,000
time-based RSUs in an amount equal to (1) a percentage
equal to: (A) the number of months Mr. Heil was
employed by Mobility, divided by (B) forty-eight, less
(2) the percentage of the original time-based RSUs which
were vested as of the date of such termination. In the event of
a change of control, as defined in the agreement, all of the
original time-based RSUs held by Mr. Heil will become
immediately and fully vested and not subject to restriction. On
March 19, 2008, the Compensation Committee amended the
terms of Mr. Heils original 500,000 performance-based
RSUs to provide that they will vest, on a pro rata basis from
the date of the amendment, upon his death, disability,
termination without cause or retirement and, in full, upon a
change in control of the Company.
Ms. Brubacher. As of December 31,
2007, Ms. Brubachers annual base salary was $258,500.
Ms. Brubacher has a targeted annual calendar year cash
bonus of 60% of her then current salary. If
Ms. Brubachers employment agreement is terminated for
constructive termination, or for any reason other than its
expiration, the death or disability of Ms. Brubacher or
just cause, as defined in the agreement, Ms. Brubacher is
entitled to continue to receive her salary and health benefits
for a period of six months following the date of termination. If
Ms. Brubachers employment agreement is terminated for
constructive termination, or for any reason other than its
expiration, the death or disability of Ms. Brubacher or
just cause, as defined in the agreement, and such termination
occurs within two years after a change of control in the
Company, as defined in the agreement, Ms. Brubacher is
entitled to receive a lump sum payment equal to her then current
salary for one year plus her cash bonus for one year at 100%
achievement and continued health benefits for a period of five
years. All equity compensation held by Ms. Brubacher will
vest, on a pro rata basis from the date of grant, in the event
of her death, disability, termination without cause, or
retirement and, in full, upon a change in control of the Company.
Mr. Downer. As of December 31, 2007,
Mr. Downers annual base salary was $230,000.
Mr. Downer has a targeted annual cash bonus, for each
fiscal year that the agreement is in effect, of 60% of his then
current base salary. If Mr. Downers employment
agreement is terminated for constructive termination, or for any
reason other than its expiration as a result of
Mr. Downers decision not to continue his employment
with Mobility, the death or disability of Mr. Downer, or
just cause, as defined in the employment agreement,
Mr. Downer is entitled to receive a severance
25
payment equal to the salary, cash incentives and bonus earned by
Mr. Downer during the twelve month period immediately
preceding the date of such termination as well as continued
health benefits for a period of six months. All equity
compensation held by Mr. Downer will vest, on a pro rata
basis from the date of grant, in the event of his death,
disability, termination without cause, or retirement and, in
full, upon a change in control of the Company.
Mr. Thornton. As of December 31,
2007, Mr. Thorntons annual base salary was $190,000.
Mr. Thornton does not have an employment agreement with
Mobility. Mr. Thornton is entitled, however, under a
Company-wide severance policy established by the Compensation
Committee, to receive a lump sum of six months base salary
and continued health benefits for a period of six months in the
event he is terminated without cause or as a result of his
constructive termination. In the event that
Mr. Thorntons employment is terminated as a result of
a change in control of the Company, Mr. Thornton is
entitled to receive a severance payment equal to six months
salary, six months bonus, assuming achievement at the 100% level
of performance and continued health benefits for a period of six
months. All equity compensation held by Mr. Thornton will
vest, on a pro rata basis from the date of grant, in the event
of his death, disability, termination without cause, or
retirement and, in full, upon a change in control of the Company.
Mr. Roberts. As of December 31,
2007, Mr. Roberts annual base salary was $165,000.
Mr. Roberts does not have an employment agreement with
Mobility. Mr. Roberts is entitled, however, under a
Company-wide severance policy established by the Compensation
Committee, to receive a lump sum of six months base salary
and continued health benefits for a period of six months in the
event he is terminated without cause or as a result of his
constructive termination. Mr. Roberts is also a party to a
change-in control agreement under which, for two (2) years
after a change in control, as defined in the agreement, if his
employment is involuntarily terminated, as defined in the
agreement, he will receive a lump sum of six months base
salary and six months of his maximum bonus for the year in
which he is terminated and, under the severance policy,
continued health benefits for a period of six months. All equity
compensation held by Mr. Roberts will vest, on a pro rata
basis from the date of grant, in the event of his death,
disability, termination without cause, or retirement and, in
full, upon a change in control of the Company.
26
The table below contains certain information concerning
termination and change in control payments as if the event
occurred on December 31, 2007 for our NEOs. Mr. Mollo
was not included in this table because he was not employed by
the Company on December 31, 2007.
TERMINATION
AND CHANGE IN CONTROL PAYMENTS TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Before Change
|
|
|
After Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in Control
|
|
|
in Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination w/o
|
|
|
Termination w/o
|
|
|
Voluntary
|
|
|
|
|
|
|
|
|
|
|
|
Just Cause or
|
|
|
Just Cause or
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
Constructive
|
|
|
Constructive
|
|
|
or with
|
|
|
Death /
|
|
|
Change in
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Just Cause
|
|
|
Disability
|
|
|
Control
|
|
Name
|
|
Type of Benefit
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Michael D. Heil
|
|
Severance Pay
|
|
|
680,000
|
(1)
|
|
|
680,000
|
(1)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
Option Acceleration
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
RSU Acceleration
|
|
|
97,500
|
|
|
|
780,000
|
|
|
|
-0-
|
|
|
|
97,500
|
|
|
|
780,000
|
|
|
|
Total
|
|
|
777,500
|
|
|
|
1,460,000
|
|
|
|
-0-
|
|
|
|
97,500
|
|
|
|
780,000
|
|
Joan W. Brubacher
|
|
Severance Pay
|
|
|
129,250
|
(2)
|
|
|
413,600
|
(3)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
Option Acceleration
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
RSU Acceleration
|
|
|
119,329
|
|
|
|
288,600
|
|
|
|
-0-
|
|
|
|
119,329
|
|
|
|
288,600
|
|
|
|
Total
|
|
|
248,579
|
|
|
|
702,200
|
|
|
|
-0-
|
|
|
|
119,329
|
|
|
|
288,600
|
|
Jonathan S. Downer
|
|
Severance Pay
|
|
|
316,484
|
(4)
|
|
|
316,484
|
(4)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
Option Acceleration
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
RSU Acceleration
|
|
|
64,397
|
|
|
|
249,600
|
|
|
|
-0-
|
|
|
|
64,397
|
|
|
|
249,600
|
|
|
|
Total
|
|
|
380,881
|
|
|
|
566,084
|
|
|
|
-0-
|
|
|
|
64,397
|
|
|
|
249,600
|
|
Walter F. Thornton
|
|
Severance Pay
|
|
|
95,000
|
(2)
|
|
|
123,500
|
(5)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
Option Acceleration
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
RSU Acceleration
|
|
|
35,418
|
|
|
|
91,650
|
|
|
|
-0-
|
|
|
|
35,418
|
|
|
|
91,650
|
|
|
|
Total
|
|
|
130,418
|
|
|
|
215,150
|
|
|
|
-0-
|
|
|
|
35,418
|
|
|
|
91,650
|
|
Brian M. Roberts
|
|
Severance Pay
|
|
|
82,500
|
(2)
|
|
|
107,250
|
(5)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
Option Acceleration
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
RSU Acceleration
|
|
|
45,276
|
|
|
|
122,850
|
|
|
|
-0-
|
|
|
|
45,276
|
|
|
|
122,850
|
|
|
|
Total
|
|
|
127,776
|
|
|
|
230,100
|
|
|
|
-0-
|
|
|
|
45,276
|
|
|
|
122,850
|
|
|
|
|
(1) |
|
These amounts reflect a lump sum payment equal to 100% of
Mr. Heils annual base salary plus a pro rated bonus
at the 100% performance level. |
|
(2) |
|
These amounts reflect a lump sum payment equal to 50% of the
officers annual base salary during 2007. |
|
(3) |
|
These amounts reflect a lump sum payment equal to the
officers annual base salary during 2007 plus annual
incentive compensation at the 100% performance level. |
|
(4) |
|
These amounts reflect a lump sum payment equal to the salary,
cash incentives and bonus earned by Mr. Downer during 2007. |
|
(5) |
|
These amounts reflect a lump sum payment equal to 50% of the
officers annual base salary as of December 31, 2007
plus 50% of his incentive compensation at the 100% performance
level. |
We believe that our severance and change in control provisions
are consistent with the programs and levels of severance and
post employment compensation of other companies in our peer
group and believe that these arrangements are reasonable.
27
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth information concerning
unexercised stock options outstanding and unvested RSUs for each
of the NEOs as of December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Payout Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
|
Unearned
|
|
|
of Unearned
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
of Shares of
|
|
|
Shares, Units
|
|
|
Shares, Units
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Units of
|
|
|
or Other
|
|
|
or Other
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
Option
|
|
|
|
|
|
Units That
|
|
|
Stock That
|
|
|
Rights That
|
|
|
Rights That
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
Options (#)
|
|
|
Options (#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Exercisable(1)
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
($)
|
|
|
Charles R. Mollo
|
|
|
150,000
|
|
|
|
-0-
|
|
|
|
9.05
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Michael D. Heil(2)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
500,000
|
|
|
|
780,000
|
|
|
|
500,000
|
|
|
|
780,000
|
|
Joan W. Brubacher(3)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
75,000
|
|
|
|
117,000
|
|
|
|
110,000
|
|
|
|
171,600
|
|
|
|
|
10,714
|
|
|
|
-0-
|
|
|
|
0.84
|
|
|
|
11/19/08
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
42,860
|
|
|
|
-0-
|
|
|
|
0.99
|
|
|
|
02/07/09
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
25,000
|
|
|
|
-0-
|
|
|
|
9.05
|
|
|
|
12/16/09
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Jonathan S. Downer(4)
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
110,000
|
|
|
|
171,600
|
|
|
|
50,000
|
|
|
|
78,000
|
|
Walter F. Thornton(5)
|
|
|
5,000
|
|
|
|
-0-
|
|
|
|
8.46
|
|
|
|
10/28/09
|
|
|
|
21,875
|
|
|
|
34,125
|
|
|
|
36,875
|
|
|
|
57,525
|
|
Brian M. Roberts(6)
|
|
|
15,000
|
|
|
|
-0-
|
|
|
|
7.44
|
|
|
|
09/11/09
|
|
|
|
41,875
|
|
|
|
65,325
|
|
|
|
36,875
|
|
|
|
57,525
|
|
|
|
|
15,000
|
|
|
|
-0-
|
|
|
|
8.48
|
|
|
|
05/26/10
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
(1) |
|
All of the Companys outstanding options were fully vested
as of December 31, 2007. |
|
(2) |
|
Subject to continued employment, twenty-five percent (25%) of
500,000 of Mr. Heils RSUs automatically vest on each
of June 11, 2008, June 11, 2009, June 11, 2010
and June 11, 2011, and earlier, in full, upon a change of
control, or on a pro rata basis upon Mr. Heils death,
disability, termination without cause or retirement. Under the
original terms of the other 500,000 RSUs, and as of
December 31, 2007, subject to continued employment, these
RSUs would vest, in increments of 250,000 RSUs each, only if we
achieved annual performance objectives for the 2009 and 2011
fiscal years, respectively. On March 19, 2008, the
Compensation Committee amended the vesting schedule for these
500,000 RSUs such that, subject to continued employment,
twenty-five percent (25%) of these RSUs automatically vest on
each of March 19, 2009, March 19, 2010, March 19,
2011 and March 19, 2012, and earlier, in full, upon a
change of control, or on a pro rata basis upon
Mr. Heils death, disability, termination without
cause or retirement. |
|
(3) |
|
Subject to continued employment, 110,000 of
Ms. Brubachers RSUs vest as follows: (a) fifty
percent (50%) upon the achievement of a financial performance
target, (b) fifty percent (50%) upon the achievement of a
separate financial performance target, (c) if not vested
earlier, one hundred percent (100%) on January 13, 2010,
(d) if not vested earlier, in full, upon a change of
control, and (e) if not vested earlier, on a pro rata
basis, upon Ms. Brubachers death, disability,
termination without cause or retirement. On March 6, 2008,
55,000 of the above-described RSUs vested as a result of the
achievement of one of the financial performance targets. Subject
to continued employment, twenty-five percent (25%) of 75,000 of
Ms. Brubachers RSUs vest on each of January 2,
2008, January 2, 2009, January 2, 2010 and
January 2, 2011, and earlier, in full, upon a change of
control, or on a pro rata basis upon Ms. Brubachers
death, disability, termination without cause or retirement. |
|
(4) |
|
Subject to continued employment, 50,000 of
Mr. Downers RSUs vest as follows: (a) fifty
percent (50%) upon the achievement of a financial performance
target, (b) fifty percent (50%) upon the achievement of a
separate financial performance target, (c) if not vested
earlier, one hundred percent (100%) on January 13, 2010,
(d) if not vested earlier, in full, upon a change of
control, and (e) if not vested earlier, on a pro rata
basis, upon Mr. Downers death, disability,
termination without cause or retirement. On March 6, 2008,
25,000 of the above-described RSUs vested as a result of the
achievement of one of the financial performance targets. Subject
to continued employment, twenty-five percent (25%) of 25,000 of
Mr. Downers RSUs vest on each of September 13,
2008, September 13, 2009, September 13, 2010, and
September 13, 2011, and earlier, in full, upon a change of
control, or on a pro rata basis upon Mr. Downers
death, disability, termination without cause or retirement.
Subject to continued employment, twenty-five percent (25%) of
85,000 of Mr. Downers RSUs |
28
|
|
|
|
|
vest on each of January 2, 2008, January 2, 2009,
January 2, 2010 and January 2, 2011, and earlier, in
full, upon a change of control, or on a pro rata basis upon
Mr. Downers death, disability, termination without
cause or retirement. |
|
|
|
(5) |
|
Subject to continued employment, 36,875 of
Mr. Thorntons RSUs vest as follows: (a) fifty
percent (50%) upon the achievement of a financial performance
target, (b) fifty percent (50%) upon the achievement of a
separate financial performance target, (c) if not vested
earlier, one hundred percent (100%) on January 13, 2010,
(d) if not vested earlier, in full, upon a change of
control, and (e) if not vested earlier, on a pro rata
basis, upon Mr. Thorntons death, disability,
termination without cause or retirement. On March 6, 2008,
18,438 of the above-described RSUs vested as a result of the
achievement of one of the financial performance targets. Subject
to continued employment, twenty-five percent (25%) of 21,875 of
Mr. Thorntons RSUs vest on each of January 2,
2008, January 2, 2009, January 2, 2010 and
January 2, 2011, and earlier, in full, upon a change of
control, or on a pro rata basis upon Mr. Thorntons
death, disability, termination without cause or retirement. |
|
(6) |
|
Subject to continued employment, 36,875 of
Mr. Roberts RSUs vest as follows: (a) fifty
percent (50%) upon the achievement of a financial performance
target, (b) fifty percent (50%) upon the achievement of a
separate financial performance target, (c) if not vested
earlier, one hundred percent (100%) on January 13, 2010,
(d) if not vested earlier, in full, upon a change of
control, and (e) if not vested earlier, on a pro rata
basis, upon Mr. Roberts death, disability,
termination without cause or retirement. On March 6, 2008,
18,438 of the above-described RSUs vested as a result of the
achievement of one of the financial performance targets. Subject
to continued employment, twenty-five percent (25%) of 41,875 of
Mr. Roberts RSUs vest on each of January 2,
2008, January 2, 2009, January 2, 2010 and
January 2, 2011, and earlier, in full, upon a change of
control, or on a pro rata basis upon Mr. Roberts
death, disability, termination without cause or retirement. |
OPTION
EXERCISES AND STOCK VESTED
The following table reflects the aggregate value realized by the
NEOs for option exercises and for restricted stock that vested
in 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Shares Acquired
|
|
|
Value Realized
|
|
|
Shares Acquired
|
|
|
Value Realized
|
|
|
|
on Exercise
|
|
|
on Exercise(1)
|
|
|
on Vesting
|
|
|
on Vesting(2)
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#)
|
|
|
($)
|
|
|
Charles R. Mollo
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
100,000
|
|
|
|
305,000
|
|
Michael D. Heil
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Joan W. Brubacher
|
|
|
2,858
|
|
|
|
5,230
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Jonathan S. Downer
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Walter F. Thornton
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
Brian M. Roberts
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
-0-
|
|
|
|
|
(1) |
|
The value realized on exercise is the aggregate excess over the
fair market value of the option at the time of the exercise and
the grant price of the option times the number of options
exercised. |
|
(2) |
|
The value realized is the fair market value on the date the
restricted stock vested. |
29
PRINCIPAL
STOCKHOLDERS
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of April 1,
2008 by:
|
|
|
|
|
each person or entity known by us to beneficially own 5% or more
of the outstanding shares of our common stock;
|
|
|
|
each of our Directors and Executive Officers; and
|
|
|
|
all of our Directors and Executive Officers as a group.
|
Unless otherwise noted, the persons named below have sole voting
and investment power with respect to the shares shown as
beneficially owned by them.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
Beneficially
|
|
|
|
|
Name and Address of Beneficial Owner(1)
|
|
Owned(2)
|
|
|
Percentage(3)
|
|
|
Directors and Executive Officers:
|
|
|
|
|
|
|
|
|
Peter L. Ax
|
|
|
0
|
|
|
|
*
|
|
Larry M. Carr(4)
|
|
|
350,101
|
|
|
|
1.1
|
%
|
Jeffrey R. Harris(5)
|
|
|
697,925
|
|
|
|
2.2
|
%
|
Michael D. Heil
|
|
|
205,000
|
|
|
|
*
|
|
Michael J. Larson
|
|
|
0
|
|
|
|
*
|
|
Robert W. Shaner
|
|
|
39,262
|
|
|
|
*
|
|
Joan W. Brubacher(6)
|
|
|
193,274
|
|
|
|
*
|
|
Jonathan S. Downer
|
|
|
31,938
|
|
|
|
*
|
|
Walter F. Thornton(7)
|
|
|
25,749
|
|
|
|
*
|
|
Brian M. Roberts(8)
|
|
|
48,974
|
|
|
|
*
|
|
Darryl S. Baker(9)
|
|
|
103,957
|
|
|
|
*
|
|
Executive officers and directors as a group (10 persons)
|
|
|
1,696,180
|
|
|
|
5.3
|
%
|
5% or more Stockholders:
|
|
|
|
|
|
|
|
|
Adage Capital Partners, L.P.(10)
|
|
|
7,349,500
|
|
|
|
23.1
|
%
|
Crossfields Fund I LP, Crossfields Capital Management LLC
and Philip Summe(11)
|
|
|
1,747,877
|
|
|
|
5.5
|
%
|
|
|
|
* |
|
Represents beneficial ownership of less than 1%. |
|
|
|
(1) |
|
The address of all directors and Named Executive Officers is
c/o Mobility
Electronics, Inc., 17800 N. Perimeter Dr.,
Suite 200, Scottsdale, Arizona 85255. |
|
(2) |
|
Beneficially owned shares, as defined by the
Securities and Exchange Commission, are those shares as to which
a person has voting or investment power, or both.
Beneficial ownership does not necessarily mean that
the named person is entitled to receive the dividends on, or the
proceeds from the sale of, the shares. |
|
(3) |
|
Percentage of beneficial ownership is based upon
31,734,851 shares of common stock outstanding as of
April 1, 2008. For each named person, this percentage
includes common stock that such person has the right to acquire
either currently or within 60 days of April 1, 2008,
including upon the exercise of an option or warrant. |
|
(4) |
|
Includes 140,149 shares of common stock held by OHA
Financial, Inc., of which Mr. Carr is a director and
majority stockholder; and 61,855 shares held with
Ms. Sharon Carr as tenants in common. |
|
(5) |
|
Includes 63,804 shares of common stock held by the Harris
Family LLC, of which Mr. Harris is the manager;
110,417 shares of common stock held by New Vistas
Investment Corporation, of which Mr. Harris owns
approximately 24% and is the president and director; and 22,500
restricted stock units scheduled to vest within 60 days of
April 1, 2008. |
30
|
|
|
(6) |
|
Includes 78,574 shares of common stock that may be
purchased upon the exercise of outstanding options. |
|
(7) |
|
Includes 5,000 shares of common stock that may be purchased
upon the exercise of outstanding options. |
|
(8) |
|
Includes 30,000 shares of common stock that may be
purchased upon the exercise of outstanding options. |
|
(9) |
|
Includes 40,000 shares of common stock that may be
purchased upon the exercise of outstanding options. |
|
(10) |
|
Based solely on a Form 4 filed with the Securities and
Exchange Commission on December 1, 2006. The Form 4
indicates that these shares are held directly by Adage Capital
Partners, L.P., a limited partnership of which Adage Capital
Partners GP, L.L.C. is the general partner. The Form 4
indicates that Adage Capital Partners GP, L.L.C. has discretion
over these shares, but disclaims beneficial ownership except to
the extent of its pecuniary interest therein. The address for
Adage Capital Partners GP, L.L.C. is 200 Clarendon Street, 52nd
Floor, Boston, MA 02116. |
|
(11) |
|
Based solely on a Schedule 13D filed with the Securities
and Exchange Commission on June 22, 2007. The
Schedule 13D indicates that these shares are held by
Crossfields Fund I LP, Crossfields Capital Management LLC
and Philip Summe, that each shares voting and disposition rights
with respect to these shares, and that each disclaims beneficial
ownership except to the extent of its pecuniary interest
therein. The address for each is
c/o Crossfields
Capital Management LLC, 800 Third Avenue, Suite 1701, New
York, New York 10022. |
EQUITY
COMPENSATION PLAN INFORMATION
The following table gives aggregate information regarding grants
under all of our equity compensation plans through
December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
Number of Securities
|
|
|
|
|
|
Remaining Available for
|
|
|
|
to be Issued upon
|
|
|
Weighted-average
|
|
|
Future Issuance under
|
|
|
|
Exercise of
|
|
|
Exercise Price of
|
|
|
Equity Compensation Plans
|
|
|
|
Outstanding Options,
|
|
|
Outstanding Options,
|
|
|
(Excluding Securities
|
|
|
|
Warrants and Rights
|
|
|
Warrants and Rights
|
|
|
Reflected in Column (a))
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by stockholders
|
|
|
423,822
|
|
|
|
5.92
|
|
|
|
2,765,892
|
(1)
|
Equity compensation plans not approved by stockholders
|
|
|
1,195,476
|
(2)
|
|
|
8.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total:
|
|
|
1,619,298
|
|
|
|
7.75
|
|
|
|
2,765,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes 324,723 shares available under the 1996 Long Term
Incentive Plan; 1,768,222 shares available under the 2001
Employee Stock Purchase Plan; 61,984 shares available under
the 2004 Non-Employee Director Long-Term Incentive Plan; and
935,686 shares available under the 2004 Omnibus Long-Term
Incentive Plan. |
|
(2) |
|
Includes 5,000 warrants issued to Silicon Valley Bank at an
exercise price of $7.59 per share in connection with an
amendment to our line of credit, which are fully vested and
expire September 3, 2013; and two separate warrants granted
to Motorola, Inc. in connection with the restructuring of the
Companys strategic relationship with Motorola in March
2005, with each warrant providing Motorola with the right to
acquire 595,238 shares of common stock at an exercise price
of $8.40 per share upon the achievement of certain performance
results by the Company, and having expiration dates of
February 15, 2008 and February 15, 2010, respectively,
that may, under certain circumstances, be extended to
August 15, 2008 and August 15, 2010, respectively. |
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Related
Party Transactions
On April 16, 2007, we completed the sale of substantially
all of the tangible assets related to our PCI expansion and
docking business pursuant to an agreement we entered into on
February 21, 2007 with Mission Technology Group, Inc. Randy
Jones, our former Senior Vice President and General Manager,
Connectivity, is the president and majority shareholder of
Mission.
31
As a result of this transaction and the closing on
April 13, 2007 of the sale of a portfolio of patents and
patents pending related to our PCI expansion and docking
technology to A.H. Cresant Group LLC, we received total net
proceeds of $4.855 million, which included $100,000 in cash
that we received upon the removal of legacy liens against the
intellectual property involved in the sale, $825,000 in cash,
two secured promissory notes from Mission totaling
$3.93 million, and a 15% fully diluted equity interest in
Mission.
The first secured promissory note totals $2.5 million,
bears interest at 6% per year, and is payable in twenty
consecutive quarterly installments of $125,000, plus interest,
beginning on May 1, 2008. In addition, beginning
May 1, 2008, and continuing until this first secured
promissory note has been paid in full, Mission must make a
prepayment under this note equal to 5% of its net profit for the
prior calendar quarter which will be applied to the last
quarterly installment due under the note at the time of such
payment. The second secured promissory note totals
$1.43 million, which is equal to the fair market value of
the inventory sold to Mission on the closing date, and bears
interest at 6% per year. Beginning in May 2007, Mission began
making monthly payments equal to the fair market value of any
closing inventory sold by Mission during such month, plus
interest, with the unpaid principal and interest payable under
this second secured promissory note due on November 1, 2008.
Given the related party nature of this transaction, we retained
Needham & Company, LLC to assist us in connection with
the disposition of our expansion and docking business. In
determining the sales price for the assets and liabilities that
we sold, we evaluated past performance and expected future
performance, and received an opinion from Needham that the
consideration to be received by us was fair from a financial
point of view. Our Board of Directors approved the transactions
following a separate review and recommended approval of the
Mission transaction by our Audit Committee.
Policy
Related to Related Party Transactions
Pursuant to our Audit Committee Charter, the Audit Committee, or
a comparable body of our board, must review and approve all
related party transactions. Our Audit Committee typically
analyzes the following factors, in addition to any other factors
the members of the Audit Committee deem appropriate, in
determining whether to approve a related party transaction:
|
|
|
|
|
whether the terms are fair to Mobility;
|
|
|
|
whether the transaction is material to Mobility;
|
|
|
|
the role the related party has played in arranging the related
party transaction;
|
|
|
|
the structure of the related party transaction; and
|
|
|
|
the interest of all related persons in the related party
transaction.
|
In addition, our Bylaws state that any contract or transaction
with Mobility in which one or more of our officers or directors
have a financial interest will not be void or voidable if:
|
|
|
|
|
the material facts as to the officer or directors
relationship or interest and as to the contract or transaction
are disclosed or are known to the board or committee, and the
board or committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of
disinterested directors; or
|
|
|
|
the material facts as to the officer or directors
relationship or interest and as to the contract or transaction
are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically
approved in good faith by a vote of the stockholders; or
|
|
|
|
the contract or transaction is fair as to Mobility as of the
time it is authorized, approved or ratified by the board, a
committee of the board, or the stockholders.
|
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our officers and
directors, and persons who own more than 10% of a registered
class of our equity securities, to file initial reports of
ownership and reports of changes in ownership with the
Securities and Exchange Commission. Such persons are required to
furnish us with copies of all
32
Section 16(a) reports they file. To the Companys
knowledge, based solely on a review of the copies of such
reports and written representations that no other reports were
required, all Section 16(a) filing requirements applicable
to its officers, directors and greater than 10% beneficial
owners were complied with for 2007, except that one Form 4
reporting one transaction was not timely filed by
Mr. Larson, and one Form 4 reporting one transaction
was not timely filed by Mr. Heil.
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Board of Directors has selected KPMG LLP to serve as the
Companys independent registered public accounting firm for
the fiscal year ending December 31, 2008. Although
stockholder ratification is not required, the Board of Directors
has directed that such appointment be submitted to our
stockholders for ratification at the annual meeting. KPMG LLP
provided audit services to us for the year ended
December 31, 2007. A representative of KPMG LLP will be
present at the annual meeting, and will have an opportunity to
make a statement if he or she desires to do so and will be
available to respond to appropriate questions.
No report of KPMG LLP on our financial statements for either of
our last two fiscal years contained any adverse opinion or
disclaimer of opinion, nor was any such report qualified or
modified as to uncertainty, audit scope or accounting principles.
In connection with the audits of our financial statements for
the last two fiscal years, there were no disagreements with KPMG
LLP on any matters of accounting principles, financial statement
disclosure or audit scope and procedures which, if not resolved
to the satisfaction of KPMG LLP, would have caused the firm to
make reference to the matter in its report. During our last two
fiscal years, there were no reportable events as described in
Item 304(a)(1)(v) of
Regulation S-K.
Assuming the presence of a quorum, the affirmative vote of the
holders of a majority of the votes cast is necessary to ratify
the appointment of our independent registered public accounting
firm. Under Delaware law, in determining whether this proposal
has received the requisite number of affirmative votes,
abstentions and Broker Non-Votes will each be counted for
purposes of determining the presence of a quorum but will not be
counted and will have no effect on the outcome of the proposal.
The enclosed form of proxy provides a means for stockholders to
vote for the ratification of selection of independent public
accountants, to vote against it or to abstain from voting with
respect to it. If a stockholder executes and returns a proxy,
but does not specify how the shares represented by such
stockholders proxy are to be voted, such shares will be
voted FOR the ratification of selection of KPMG LLP as our
independent registered public accounting firm for the fiscal
year ending December 31, 2008. Abstentions will have
the same legal effect as a vote against the proposal. Non-votes
are not considered present at the meeting for this proposal and
will have no effect on the ratification of the appointment of
our independent registered public accounting firm.
The Board of Directors recommends a vote FOR the
ratification of the selection of KPMG LLP, as our independent
registered public accounting firm for the fiscal year ending
December 31, 2008.
AUDIT
COMMITTEE REPORT
The Audit Committee has reviewed and discussed our audited
consolidated financial statements with management. The Audit
Committee has also discussed the matters required to be
discussed by SAS No. 61, Communications with Audit
Committees, as amended, (Codification of Statements on
Auditing Standards, AU § 380) and Securities and
Exchange Commission rules and regulations with KPMG LLP, our
independent registered public accounting firm. The Audit
Committee has received the written disclosures and the letter
from KPMG LLP required by Independence Standards Board Standard
No. 1 (Independence Discussions with Audit Committees) and
has reviewed, evaluated and discussed with KPMG LLP its
independence from the Company. The Audit Committee has also
discussed with management and KPMG LLP such other matters and
received such assurances from them as it deemed appropriate.
33
Based upon the review and discussion of the above, the Audit
Committee recommended to the Board that the audited consolidated
financial statements be included in the Companys Annual
Report on
Form 10-K
for the year ended December 31, 2007 filed with the
Securities and Exchange Commission.
Respectfully submitted:
Jeffrey R. Harris
Peter L. Ax
Michael J. Larson
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FEES
Our independent registered public accounting firm during the
year ended December 31, 2007 was KPMG LLP. KPMG LLP has
audited our financial statements since 1995. A representative of
KPMG LLP is expected to be present at the meeting for the
purpose of responding to appropriate questions and will be given
the opportunity to make a statement if he or she desires to do
so.
The following table sets forth the aggregate fees billed to the
Company for fiscal 2007 and fiscal 2006 by KPMG LLP:
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2007
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2006
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Audit Fees
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$
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500,000
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$
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667,470
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Audit-Related Fees
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21,500
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18,350
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Tax Fees
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All Other Fees
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Total
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$
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521,500
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$
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685,820
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|
Audit Fees for 2007 consist of fees relating to the audit
of our year-end consolidated financial statements, the audit of
our internal control over financial reporting, and reviews of
our quarterly financial statements. Audit fees for 2006 consist
of fees relating to the audit of our year-end consolidated
financial statements, the audit of our internal control over
financial reporting, reviews of our quarterly financial
statements, the review of the Think Outside acquisition, the
stock option grant date review, and the review of asset
impairments.
Audit-Related Fees for 2007 consist primarily of fees
relating to our response to a comment letter received from the
Securities and Exchange Commission and the review of
registration statements filed with the Securities and Exchange
Commission. Audit-Related Fees for 2006 consist primarily of
fees relating to the review of the Mission transaction.
The Audit Committee regularly determines whether specific
projects or expenditures could potentially affect KPMG
LLPs independence. The Audit Committee has considered
whether the provision of non-audit services is compatible with
maintaining the independence of KPMG LLP and has concluded that
it is compatible.
PRE-APPROVAL
OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES
The Audit Committee is directly responsible for the appointment,
compensation, retention, replacement, and oversight of the work
of the independent registered public accounting firm. The Audit
Committee must approve, in advance, the provision by the
independent registered public accounting firm of all audit
services and permissible non-audit services. These services may
include audit services, audit-related services, tax services and
other services. The Audit Committee also actively engages in a
dialogue with the independent registered public accounting firm
with respect to any relationships or services that may impact
their objectivity and independence. In 2007, all fees paid to
the independent registered public accounting firm for non-audit
services were approved in advance by the Audit Committee.
34
OTHER
BUSINESS
The Board knows of no matter other than those described herein
that will be presented for consideration at the meeting.
However, should any other matters properly come before the
meeting or any adjournment thereof, it is the intention of the
persons named in the accompanying proxy to vote on such matters
in accordance with their best judgment in the interests of the
Company.
STOCKHOLDER
PROPOSALS
Stockholder proposals intended for inclusion in the
Companys fiscal 2008 proxy statement and acted upon at the
Companys 2009 Annual Meeting of Stockholders (the
2009 Annual Meeting) must be received by the Company
at its executive offices at 17800 N. Perimeter Dr.,
Suite 200, Scottsdale, Arizona 85255, Attention: Corporate
Secretary, on or prior to December 10, 2008.
Stockholder proposals submitted for consideration at the 2009
Annual Meeting, but not submitted for inclusion in the
Companys fiscal 2008 proxy statement, including
stockholder nominations for candidates for election as
directors, generally must be received by the Company at its
executive offices on or prior to December 10, 2008 in order
to be considered timely under SEC rules. However, if the date of
the 2009 Annual Meeting is a date that is not within
30 days before or after May 21, 2009, the anniversary
date of the Annual Meeting, notice by the stockholder of a
proposal must be received no later than the close of business on
the 10th calendar day following the day on which notice of
the date of the upcoming annual meeting is publicly disclosed.
Under applicable rules of the SEC, the Companys management
may vote proxies in their discretion regarding these proposals
if (1) the Company does not receive notice of the proposal
on or prior to December 10, 2008, or (2) the Company
receives written notice of the proposal on or prior to
December 10, 2008, describes the proposal in the
Companys proxy statement relating to the 2009 Annual
Meeting and states how the management proxies intend to vote
with respect to such proposal.
STOCKHOLDERS
SHARING THE SAME ADDRESS
The Company has adopted a procedure called
householding, which has been approved by the SEC.
Under this procedure, the Company will deliver only one copy of
the Companys Annual Report to stockholders for fiscal 2007
(the 2007 Annual Report) and this proxy statement to
multiple stockholders who share the same address (if they appear
to be members of the same family) unless the Company has
received contrary instructions from an affected stockholder.
Stockholders who participate in householding will continue to
receive separate proxy cards. This procedure reduces the
Companys printing and mailing costs and fees.
The 2007 Annual Report and this proxy statement are available at
the Companys web site at
www.mobilityelectronics.com. The Company will deliver
promptly upon written or oral request a separate copy of the
2007 Annual Report and this proxy statement to any stockholder
at a shared address to which a single copy of either of those
documents was delivered. To receive a separate copy of the 2007
Annual Report or this proxy statement, stockholders should
contact the Company at:
Investor Relations
Mobility Electronics, Inc.
17800 N. Perimeter Drive, Suite 200
Scottsdale, AZ 85255
(480) 596-0061
ir@mobl.com
If you are a stockholder, share an address and last name with
one or more other stockholders and would like to revoke your
householding consent and receive a separate copy of the
Companys annual report or proxy statement in the future,
please contact Broadridge, either by calling toll free at
(800) 542-1061
or by writing to Broadridge, Householding Department, 51
Mercedes Way, Edgewood, New York 11717. You will be removed from
the householding programs within 30 days of receipt of the
revocation of your consent.
A number of brokerage firms have instituted householding. If you
hold your shares in street name, please contact your
bank, broker or other holder of record to request information
about householding.
35
EXPENSES
OF SOLICITATION
All costs incurred in the solicitation of proxies will be borne
by us. We estimate those costs to be approximately $15,000. In
addition to solicitation by mail, our officers and employees may
solicit proxies by telephone, telegraph or personally, without
additional compensation. We may also make arrangements with
brokerage houses and other custodians, nominees and fiduciaries
for the forwarding of solicitation materials to the beneficial
owners of shares of common stock held of record by such persons,
and we may reimburse such brokerage houses and other custodians,
nominees and fiduciaries for their out-of-pocket expenses
incurred in connection therewith.
You may request a copy of Mobilitys annual, quarterly and
special reports, proxy statements and other information at no
cost, including our annual report on
Form 10-K,
including financial statements and schedules thereto, for the
year ended December 31, 2007, by writing or telephoning
Mobility at the following address:
Corporate Secretary
Mobility Electronics, Inc.
17800 North Perimeter Drive, Suite 200
Scottsdale, Arizona 85255
(480) 596-0061
36
MOBILITY
ELECTRONICS, INC.
FORM 10-K
Accompanying this proxy statement is a copy of our Annual Report
for the fiscal year ended December 31, 2007 on
Form 10-K.
You should rely only on the information contained in or
incorporated by reference in this proxy statement to vote on the
matters proposed herein. We have not authorized anyone to
provide you with information that is different from what is
contained in this proxy statement. You should not assume that
the information contained in the proxy statement is accurate as
of any date other than the date hereof, and the mailing of this
proxy statement to our stockholders shall not create any
implication to the contrary.
By Order of the Board of Directors,
Brian M. Roberts
Secretary
Scottsdale, Arizona
April 9, 2008
37
Proxy Card for Common Stockholders
Mobility Electronics, Inc.
This Proxy is solicited on behalf of the Companys Board of Directors.
The undersigned hereby (1) acknowledges receipt of the Notice of Annual Meeting of
Stockholders of Mobility Electronics, Inc. (the Company) to be held at the Scottsdale Marriott at
McDowell Mountains, 16770 North Perimeter Drive, Scottsdale, Arizona 85260 at 10:00 a.m. local time
on May 21, 2008 (the Meeting), and the Proxy Statement and Annual Report mailed therewith and (2)
appoints Michael D. Heil, Brian M. Roberts and Joan W. Brubacher, or any one of them, the
undersigneds proxy with full power of substitution for and in the name, place and stead of the
undersigned to vote all shares of Common Stock of the Company owned by the undersigned standing in
the name of the undersigned, or with respect to which the undersigned is entitled to vote at the
Meeting and any adjournments thereof, on the following matters as indicated below and such other
business as may properly come before the Meeting.
This Proxy, when properly executed and timely returned, will be voted in the manner directed
herein by the stockholder. If no direction is made, this Proxy will be voted FOR the nominees as
director, FOR the ratification of KPMG LLP as independent registered public accounting form for
fiscal year ending December 31, 2008, and in the discretion of the proxies on any other matters
that may properly come before the Meeting and any adjournments thereof.
The undersigned hereby revokes any proxy heretofore given to vote or act with respect to the
Common Stock of the Company and hereby ratifies and confirms all that the proxies, their
substitutes, or any of them lawfully do by virtue hereof.
PLEASE mark, sign, date and return the proxy card promptly using the enclosed envelope. No
postage is required if mailed in the United States.
(Continued and to be signed on the other side)
MOBILITY ELECTRONICS, INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 21, 2008
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1.
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o
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FOR the election of Peter L. Ax as director |
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WITHHOLD AUTHORITY to elect Peter L. Ax as director |
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FOR the election of Michael J. Larson as director |
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WITHHOLD AUTHORITY to elect Michael J. Larson as director |
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2.
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FOR the ratification of KPMG LLP as independent registered public accounting firm for fiscal
year ending December 31, 2008 |
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o
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AGAINST the ratification of KPMG LLP as independent registered public accounting firm for
fiscal year ending December 31, 2008 |
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o
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ABSTAIN |
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3. |
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In the discretion of the proxies on any other matters that may properly come before the
Meeting or any adjournments thereof including, without limitation, a vote to adjourn or
postpone the meeting. |
Please date this proxy and sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other authorized officer. If a partnership,
please sign in partnership name by authorized person.
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DATED: , 2008 |
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Signature of Stockholder |
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Signature if held jointly |
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Please mark, date, sign and mail your proxy promptly in the envelope provided.