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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
Brightpoint, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
[BRIGHTPOINT LOGO]
APRIL 19, 2006
Dear Brightpoint, Inc. Shareholders:
You are cordially invited to attend the 2006 Annual Meeting of
Shareholders ("Annual Meeting") of Brightpoint, Inc. (the "Company") that will
be held on Thursday, May 11, 2006, at 9:00 a.m. local time, at the Company's
offices located at 501 Airtech Parkway, Plainfield, Indiana 46168.
Your Board of Directors unanimously believes that the election of the
nominees specified in the accompanying Proxy Statement as directors is in the
best interests of the Company and its shareholders and, accordingly, recommends
a vote "FOR" such nominees. Further, your Board of Directors unanimously
believes that ratifying the appointment of Ernst & Young LLP as the Company's
independent registered public accounting firm for the fiscal year ended December
31, 2006 is in the best interests of the Company and its shareholders and,
accordingly, recommends a vote "FOR" such proposal.
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU INTEND TO ATTEND THE
MEETING IN PERSON, PLEASE ENSURE YOU TAKE THE TIME TO CAST YOUR VOTE. YOU MAY
VOTE BY RETURNING YOUR SIGNED PROXY CARD, BY TELEPHONE OR VIA THE INTERNET. WE
APPRECIATE YOUR CONTINUED SUPPORT.
Sincerely yours,
Robert J. Laikin
Chairman of the Board and
Chief Executive Officer
[BRIGHTPOINT LOGO]
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF BRIGHTPOINT, INC.
TO BE HELD THURSDAY, MAY 11, 2006
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To the Shareholders of Brightpoint, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting ("Annual Meeting") of
Shareholders of Brightpoint, Inc. (the "Company") will be held on Thursday, May
11, 2006, at 9:00 a.m. local time, at the Company's offices located at 501
Airtech Parkway, Plainfield, Indiana 46168 for the following purposes:
1. To elect three (3) Class III directors to hold office until the
Annual Meeting of Shareholders to be held in 2009 and until their
successors have been duly elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent registered public accounting firm for the fiscal year
ending December 31, 2006; and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment or adjournments thereof.
Presentations will be made after the foregoing business has been
conducted at the Annual Meeting. A live webcast of the presentations, including
audio and slides, can be accessed through the Investors section of the Company's
website at www.brightpoint.com. A written report of the results of the Annual
Meeting will be posted on the Company's website following the Annual Meeting.
Only shareholders of record at the close of business on April 18, 2006
are entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof. You may submit your proxy vote with the enclosed paper card or you can
vote by telephone or via the Internet. Whether or not you attend the meeting it
is important that your shares be represented and voted. If the address on the
accompanying material is incorrect, please advise our Transfer Agent, American
Stock Transfer & Trust Company, in writing, at 59 Maiden Lane, New York, New
York 10038.
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING:
Please fill in, date, sign and return the enclosed paper proxy card in the
envelope provided for that purpose, which requires no postage if mailed in the
United States. If you choose you may also vote by telephone or via the internet.
Your proxy may be revoked at any time prior to exercise, and if you are present
at the meeting you may, if you wish, revoke your proxy at that time and exercise
the right to vote your shares personally.
Notice of the Annual Meeting is hereby given,
By Order of the Board of Directors,
Steven E. Fivel
Executive Vice President, General Counsel
and Secretary
BRIGHTPOINT, INC.
2005 PROXY STATEMENT
PAGE
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GENERAL information.....................................................................................................1
OUTSTANDING STOCK AND VOTING RIGHTS.....................................................................................3
VOTING PROCEDURES AND PROXY INFORMATION.................................................................................3
Voting by Telephone or via the Internet..............................................................................4
PROPOSAL I - TO ELECT THREE DIRECTORS TO SERVE UNTIL THE 2009 ANNUAL MEETING............................................4
CORPORATE GOVERNANCE....................................................................................................9
DIRECTOR INDEPENDENCE..................................................................................................10
MEETINGS OF DIRECTORS AND COMMITTEES...................................................................................10
BOARD COMMITTEES.......................................................................................................10
The Corporate Governance and Nominating Committee...................................................................11
The Compensation and Human Resources Committee......................................................................11
The Audit Committee.................................................................................................12
Report of Audit Committee...........................................................................................12
EXECUTIVE COMPENSATION.................................................................................................14
Summary Compensation Table..........................................................................................14
Option Grants in Last Fiscal Year...................................................................................17
Aggregated Option Exercises and Fiscal Year-End Option Values.......................................................18
Director Compensation...............................................................................................18
2006 Board Compensation.............................................................................................19
Executive Officer Employment and Severance Agreements...............................................................19
Executive Equity Program and Bonus Plans............................................................................23
Report of the Compensation and Human Resources Committee of the Board of Directors on Executive Compensation........24
Compensation Committee Interlocks and Insider Participation.........................................................26
STOCK PERFORMANCE GRAPH................................................................................................27
VOTING SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..................................................28
Equity Compensation Plans...........................................................................................30
CERTAIN TRANSACTIONS...................................................................................................31
PROPOSAL II - Ratification OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.........................31
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING..........................................................................34
Section 16(a) Beneficial Ownership Reporting Compliance.............................................................35
OTHER INFORMATION......................................................................................................35
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PROXY STATEMENT
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ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON THURSDAY, MAY 11, 2006
This proxy statement (the "Proxy Statement") is furnished in connection
with the solicitation of proxies by the Board of Directors of Brightpoint, Inc.
(the "Company") for use at the Annual Meeting of Shareholders (the "Annual
Meeting") to be held on Thursday, May 11, 2006, at 9:00 a.m. local time, at the
Company's offices located at 501 Airtech Parkway, Plainfield, Indiana 46168,
including any adjournment or adjournments thereof, for the purposes set forth in
the accompanying Notice of Meeting.
Management intends to mail this Proxy Statement and the accompanying
form of proxy to shareholders on or about April 20, 2006.
GENERAL INFORMATION
Proxies in the accompanying form, duly executed and returned to the
management of the Company and not revoked, will be voted at the Annual Meeting.
Any proxy given pursuant to such solicitation may be revoked by the shareholder
at any time prior to the voting of the proxy by a subsequently dated proxy, by
written notification to the Secretary of the Company, or by personally
withdrawing the proxy at the Annual Meeting and voting in person.
It is anticipated that all of the Company's Board of Directors and
Executive Officers will be present at the Annual Meeting and that a presentation
will be made after the conclusion of the business to be conducted at the Annual
Meeting.
The address and telephone number of the principal executive offices of
the Company are: 501 Airtech Parkway, Plainfield, Indiana 46168, telephone
number: (317) 707-2355.
The following questions and answers provide important information about
the Annual Meeting and this Proxy Statement:
Q. What am I voting on?
A. (i) The election of three Class III directors (Kari-Pekka Wilska,
Marisa E. Pratt and Jerre L. Stead), and (ii) ratifying the appointment of Ernst
& Young LLP as the Company's independent registered public accounting firm for
the fiscal year ending December 31, 2006.
Q. Who is entitled to vote?
A. Shareholders of record as of the close of business on April 18, 2006
(the "Record Date"), are entitled to vote at the Annual Meeting. Each
shareholder is entitled to one vote for each share of the Company's Common Stock
held on the Record Date.
-1-
Q. How do I vote?
A. You may sign and date each paper proxy card you receive and return it
in the prepaid envelope. If you return your signed proxy but do not indicate
your voting preferences, we will vote on your behalf FOR all nominees for
directors and all proposals as specified in the Proxy Statement.
You may also vote by telephone or via the Internet. See "Voting by Telephone or
via the Internet" below for further details. Please note that there are separate
telephone and Internet voting arrangements depending upon whether shares are
registered in your name or in the name of a bank or broker.
Q. How may I revoke or change my vote?
A. You have the right to revoke your proxy any time before the meeting by
(i) notifying the Company's Secretary or (ii) returning a later-dated proxy. You
may also revoke your proxy by voting in person at the Annual Meeting.
Q. What does it mean if I receive more than one proxy card?
A. It may mean that you are the registered holder of shares in more than
one account. Sign and return all proxy cards to ensure that all your shares are
voted. You may call American Stock Transfer & Trust Company at 1-800-937-5449 if
you have any questions regarding the share information or your address appearing
on the paper proxy card.
Q. Who will count the votes?
A. A Senior Vice President of the Company will tabulate the votes and act
as the independent inspector of election.
Q. What constitutes a quorum?
A. A majority of the outstanding shares, present or represented by proxy,
of the Company's Common Stock constitutes a quorum for the Annual Meeting. As of
the Record Date 41,783,803 shares of the Company's Common Stock $.01 par value
per share (the "Common Stock") were issued and outstanding.
Q. How many votes are needed for the election of the directors?
A. The directors will be elected by a plurality of the votes cast at the
Annual Meeting, meaning the three nominees receiving the highest number of votes
will be elected as directors. Only votes cast for a nominee will be counted,
except that a properly executed proxy that does not specify a vote with respect
to the nominees will be voted for the three nominees whose names are printed on
the proxy card (Kari-Pekka Wilska, Marisa E. Pratt and Jerre L. Stead).
Abstentions and broker non-votes (as described below) will have no effect on the
election of directors.
Q. How many votes are needed for the ratification of the appointment of
Ernst & Young LLP as the Company's independent registered public accounting firm
for the fiscal year ending December 31, 2006?
-2-
A. The affirmative vote of the holders of a majority of the shares of
Common Stock represented at the Annual Meeting in person or by proxy and
entitled to vote at the Annual Meeting is required for the ratification of the
appointment of Ernst & Young LLP as the Company's independent registered public
accounting firm for the fiscal year ending December 31, 2006. Broker non-votes
will not be treated as entitled to vote on this matter and will therefore have
no effect on the proposal to ratify the appointment of Ernst & Young LLP as the
Company's independent registered public accounting firm.
Q. What is a "broker non-vote"?
A. A "broker non-vote" occurs when a broker submits a proxy that does not
indicate a vote for some of the proposals because the broker has not received
instructions from the beneficial owners of how to vote on such proposals and
does not have discretionary authority to vote in the absence of instructions.
Q: How may I communicate with the Board of Directors?
A: The Board of Directors, through its Corporate Governance and Nominating
Committee, has established a process for shareholders to send communications to
the Board of Directors. You may communicate with the Board of Directors
individually or as a group by writing to: The Board of Directors of Brightpoint,
Inc. c/o Corporate Secretary, 501 Airtech Parkway, Plainfield, Indiana 46168 or
via e-mail: board.directors@brightpoint.com. You should identify your
communication as being from a Brightpoint shareholder. The Corporate Secretary
may require reasonable evidence that your communication or other submission is
made by a Brightpoint shareholder before transmitting your communication to the
Board of Directors.
OUTSTANDING STOCK AND VOTING RIGHTS
Only shareholders of record at the close of business on the Record Date
are entitled to notice of and to vote at the Annual Meeting. As of the Record
Date, there were issued and outstanding 41,783,803 shares of Common Stock, the
Company's only class of voting securities. Each share entitles the holder to one
vote on each matter submitted to a vote at the Annual Meeting.
VOTING PROCEDURES AND PROXY INFORMATION
The proxies will be voted in accordance with the instructions thereon.
Unless otherwise stated, all shares represented by such proxy will be voted as
instructed. Proxies may be revoked as noted above.
The entire cost of soliciting proxies, including the costs of
preparing, assembling, printing and mailing this Proxy Statement, the proxy and
any additional soliciting material furnished to shareholders, will be borne by
the Company. The Company has retained Innisfree M&A Incorporated, a proxy
solicitation firm, for assistance in connection with the solicitation of proxies
for the Annual Meeting at a cost of $8,500 plus reimbursement of reasonable out
of pocket expenses. In addition, arrangements will be made with brokerage houses
and other custodians, nominees and fiduciaries to send proxies and proxy
materials to the beneficial owners of stock, and the Company may reimburse such
persons for their expenses.
-3-
VOTING BY TELEPHONE OR VIA THE INTERNET
For Shares Registered in the Name of a Brokerage Firm or Bank. A number
of brokerage firms and banks are participating in a program provided through ADP
Investor Communication Services that offers telephone and Internet voting
options. This program is different from the program provided by American Stock
Transfer & Trust Company for shares registered in the name of the shareholder.
If your shares are held in an account at a brokerage firm or bank participating
in the ADP program, you may vote those shares telephonically by calling the
telephone number referenced on your voting form. If your shares are held in an
account at a brokerage firm or bank participating in the ADP program, you
already have been offered the opportunity to elect to vote via the Internet.
Votes submitted via the Internet through the ADP program must be received by
11:59 p.m. (EDT) on May 10, 2006. The giving of such proxy will not affect your
right to vote in person should you decide to attend the Annual Meeting.
For Shares Directly Registered in the Name of the Shareholder.
Shareholders with shares registered directly with American Stock Transfer &
Trust Company may vote telephonically by calling American Stock Transfer & Trust
Company at 1-800-PROXIES (1-800-776-9437) or you may vote via the Internet at
www.voteproxy.com.
The telephone and Internet voting procedures are designed to
authenticate shareholders identities, to allow shareholders to give their voting
instructions and to confirm that shareholders' instructions have been recorded
properly. Shareholders voting via the Internet through either American Stock
Transfer & Trust Company or ADP Investor Communication Services should
understand that there may be costs associated with electronic access, such as
usage charges from Internet access providers and telephone companies, that must
be borne by the shareholder.
PROPOSAL I -
TO ELECT THREE DIRECTORS TO SERVE UNTIL THE 2009 ANNUAL MEETING
The Company's By-Laws provide that the Board of Directors of the
Company is divided into three classes (Class I, Class II and Class III). At each
Annual Meeting of shareholders, directors constituting one class are elected for
a three-year term. At this year's Annual Meeting, three (3) Class III directors
will be elected to hold office for a term expiring at the Annual Meeting of
shareholders to be held in 2009. Based upon the review of and recommendation by
the Company's Corporate Governance and Nominating Committee, the Board of
Directors has nominated Kari-Pekka Wilska, Marisa E. Pratt and Jerre L. Stead to
serve as Class III directors.
Each of the directors will be elected to serve during his term until a
successor is elected and qualified or until the director's earlier resignation
or removal.
At this year's Annual Meeting, the proxies granted by shareholders will
be voted individually for the election, as directors of the Company, of the
persons listed below, unless a proxy specifies that it is not to be voted in
favor of a nominee for director. In the event the nominees listed below shall be
unable to serve, it is intended that the proxy will be voted for such other
nominees as are designated by the Board of Directors.
-4-
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE
ELECTION OF THE NOMINEES SPECIFIED BELOW.
The following table sets forth the name, age and principal occupation
of the nominees for election at this Annual Meeting and the length of continuous
service as a director of the Company:
CLASS III DIRECTORS
(NOMINEES TO BE ELECTED AS CLASS III DIRECTORS AT THE ANNUAL MEETING)
(Term Expires in 2009)
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NAME OF DIRECTOR AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
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Kari-Pekka Wilska 58 Kari-Pekka Wilska has been a director of the Company since November 2005. Since
November 2005, Mr. Wilska has been a venture partner in Austin Ventures, a venture
capital fund that focuses on investing in Texas. Mr. Wilska served in a variety of
leadership positions in Nokia's U.S. mobile phone operations from 1993 to 2004,
including as President of Nokia, Inc. (Nokia Americas) from 1999 to December 2004
and as President of Vertu Ltd., a subsidiary of Nokia, Inc. Since November 2004,
Mr. Wilska has served as a director of Zarlink Semiconductor Inc., and from June
2004, until its merger with American Tower Corporation in August 2005, Mr. Wilska
served as a director of SpectraSite, Inc.
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Marisa E. Pratt 41 Marisa E. Pratt has been a director of the Company since January 2003 and is
currently a member of the Company's Audit Committee. Since 1991, Ms. Pratt has
been employed by Eli Lilly in various finance and treasury related positions.
Since October 2002, Ms. Pratt has been Vice President - Finance of Eli Lilly Canada.
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Jerre L. Stead 63 Jerre L. Stead has been a director of the Company since June 2000 and currently
serves as the Company's Lead Independent Director. Mr. Stead is a member of the
Company's Compensation and Human Resources Committee and the Company's Corporate
Governance and Nominating Committee. Since December 2000, Mr. Stead has been the
Chairman of the Board of Directors and a director of IHS Inc. From August 1996 to
June 2000, Mr. Stead served as Chairman of the Board and Chief Executive Officer of
Ingram Micro Inc., a worldwide distributor of information technology products and
services. Mr. Stead served as Chairman, President and Chief Executive Officer of
Legent Corporation, a software development company from January 1995 until its sale
in September 1995. From
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1993 to 1994, Mr. Stead was Executive Vice President of American Telephone and
Telegraph Company, a telecommunications company, and Chairman and Chief Executive
Officer of AT&T Global Information Solutions, a computer and communications
company, formerly NCR Corp. Mr. Stead was President of AT&T Global Business
Communications Systems, a communications company, from 1991 to 1993. Mr. Stead was
Chairman, President and Chief Executive Officer from 1989 to 1991 and President
from 1987 to 1989 of Square D Company, an industrial control and electrical
distribution products company. In addition, he held numerous positions during a
21-year career at Honeywell. Mr. Stead is a director of Mindspeed Technologies,
Inc., Conexant Systems, Inc., Armstrong Holdings, Inc. and Mobility Electronics, Inc.
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The following tables set forth similar information with respect to
incumbent Class I and Class II directors who are not nominees for election at
the Annual Meeting:
CLASS I DIRECTORS
(Term Expires in 2007)
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NAME OF DIRECTOR AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
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Eliza Hermann 44 Eliza Hermann has been a director of the Company since January 2003 and is currently the
Chairperson of the Company's Compensation and Human Resources Committee and a member of the
Company's Corporate Governance and Nominating Committee. Since 1985, Ms. Hermann has been
employed by BP plc where she has held a succession of international human resources,
strategic planning and business development roles, and currently serves as the Vice President
Human Resources Strategy.
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V. William Hunt 61 V. William Hunt has been a director of the Company since February 2004 and is a member of
the Audit Committee. Mr. Hunt is Chairman of Hunt Capital Partners, LLC, a venture capital
and consulting firm based in Indianapolis. Mr. Hunt serves on the boards of Breeze
Industrial Products, Clarian Health Partners, RollCoater, Inc., My Health Care Manager and
InProteo. Until August 2001, he was the Vice Chairman and President of ArvinMeritor Inc., a
global supplier of a broad range of integrated systems, modules and components for light
vehicle, commercial truck, trailer and specialty original equipment manufacturers (OEMs) and
related after-markets. Prior to the July 2000 merger of Arvin Inc. and Meritor Automotive
Inc., Mr. Hunt was Chairman and Chief Executive Officer of Arvin, a global manufacturer of
automotive components, including exhaust systems, ride control products and air, oil and
fuel filters. Mr. Hunt joined Arvin as counsel in 1976, became Vice President,
Administration and Secretary in 1982; Executive Vice President in 1990; President in 1996;
and Chief Executive Officer in 1998. A member of Arvin's board of directors since 1983, he
was named Chairman in 1999. Before joining Arvin, Mr. Hunt practiced labor relations law in
Indianapolis and served as labor counsel to TRW Automotive Worldwide.
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Stephen H. Simon 40 Stephen H. Simon has been a director of the Company since April 1994 and is currently a
member of the Company's Compensation and Human Resources Committee. Mr. Simon has been
President and Chief Executive Officer of Melvin Simon & Associates, Inc., a privately-held
shopping center development company, since February 1997. From December 1993 until February
1997, Mr. Simon was Director of Development for an affiliate of Simon Property Group, a
publicly-held real estate investment trust. From November 1991 to December 1993, Mr. Simon
was Development Manager of Melvin Simon & Associates, Inc. Mr. Simon is a director of
Gracenote, Inc., Method Products, Inc. and Pacers Basketball Corporation.
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CLASS II DIRECTORS
(Term Expires in 2008)
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NAME OF NOMINEE AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
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Robert J. Laikin 42 Robert J. Laikin, founder of the Company, has been a director of the Company
since its inception in August 1989. Mr. Laikin has been Chairman of the Board and
Chief Executive Officer of the Company since January 1994. Mr. Laikin was President
of the Company from June 1992 until September 1996 and Vice President and Treasurer
of the Company from August 1989 until May 1992. From July 1986 to December 1987, Mr.
Laikin was Vice President and, from January 1988 to February 1993, President of
Century Cellular Network, Inc., a company engaged in the retail sale of cellular
telephones and accessories.
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Robert F. Wagner 71 Robert F. Wagner has been a director of the Company since April 1994 and is currently
a member of the Company's Compensation and Human Resources Committee. Mr. Wagner has
been engaged in the practice of law with the firm of Lewis Wagner, LLP since 1973.
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Richard W. Roedel 56 Richard W. Roedel has been a director and Chairman of the Company's Audit Committee
since October 2002 and currently is a member of the Company's Corporate Governance
and Nominating Committee. Mr. Roedel is a director and Chairman of the Audit
Committee of Dade Behring Holdings, Inc., a medical diagnostics equipment and related
product manufacturer and IHS Inc., a leading content provider servicing the technical
and business information needs of engineering and energy companies. Mr. Roedel served
in various capacities while with Take-Two Interactive Software, Inc. from October
2002 to June 2005 including Chairman and Chief Executive Officer. Mr. Roedel is also
a director of the Association of Audit Committee Members, Inc., a non-profit
association of audit committee members. From 1999 to 2000, Mr. Roedel was Chairman
and Chief Executive Officer of the accounting firm BDO Seidman LLP, the United States
member firm of BDO International. Before becoming Chairman and Chief Executive
Officer, he was the Managing Partner of BDO Seidman's New York Metropolitan Area from
1994 to 1999, the Managing Partner of its Chicago office from 1990 to 1994 and an
Audit Partner from 1985 to 1990. Mr. Roedel is a Certified Public Accountant.
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-8-
Set forth below is a description of each of our Executive Officers:
Robert J. Laikin, See Class II Directors.
J. Mark Howell, age 41, has been President of the Company since
September 1996 and Chief Operating Officer of the Company from August 1995 to
April 16, 1998 and from July 16, 1998 to March 2003. He was Executive Vice
President, Finance, Chief Financial Officer, Treasurer and Secretary of the
Company from July 1994 until September 1996. From July 1992 until joining the
Company, Mr. Howell was Corporate Controller for ADESA Corporation, a company
that owns and operates automobile auctions in the United States and Canada.
Prior thereto, Mr. Howell was an accountant with Ernst & Young LLP.
Anthony Boor, age 43, has been the Company's Executive Vice President,
Chief Financial Officer and Treasurer since October 2005. From June 2005 to
October 2005, Mr. Boor had served as the Company's Acting Chief Financial
Officer and Acting Principal Financial Officer. Since July 2001, Mr. Boor served
as the Senior Vice President and Chief Financial Officer of Brightpoint Americas
division. Mr. Boor was previously Vice President and Controller of Brightpoint
North America L.P. from July 1999 to July 2001 and Director of Business
Management of Brightpoint North America from August 1998 to July 1999. Prior to
joining Brightpoint, Mr. Boor was employed in various financial positions with
Macmillan Publishing, Day Dream, Inc., Ernst & Young, LLP, New Mexico State
Fairgrounds and The Downs at Albuquerque, KPMG, LLP and Ernst & Whinney. Mr.
Boor is a Certified Public Accountant.
Steven E. Fivel, age 45, has been Executive Vice President, General
Counsel and Secretary of the Company since January 1997. From December 1993
until January 1997, Mr. Fivel was an attorney with an affiliate of Simon
Property Group, a publicly-held real estate investment trust. From February 1988
to December 1993, Mr. Fivel was an attorney with Melvin Simon & Associates,
Inc., a privately-held shopping center development company.
Vincent Donargo, age 45, has been the Company's Vice President, Chief
Accounting Officer and Controller since September 2005. From 1998 to 2005, Mr.
Donargo was the Strategic Business Unit Controller, Director of Finance and
Corporate Controller of Aearo Company, a safety products manufacturing company.
At Aearo, Mr. Donargo was responsible for accounting policies and procedures,
monthly consolidations, quarterly and annual SEC filings internal and external
audit and tax compliance activities. Prior to that, from 1990 to 1998, Mr.
Donargo was employed in various financial positions with National Starch and
Chemical Company, a specialty chemical manufacturing subsidiary of ICI Americas,
Inc. Mr. Donargo is a Certified Public Accountant and a Certified Management
Accountant.
CORPORATE GOVERNANCE
The Board of Directors has adopted a set of Corporate Governance
Principles ("Governance Principles") which are consistent with the Board's
responsibility for management oversight. These Governance Principles are
designed to strengthen the Company and protect the interests of the shareholders
of the Company while helping to insure the continued vitality of the Board.
Copies of these Governance Principles may be accessed at the Company's website,
www.brightpoint.com.
-9-
Highlights of the Company's Governance Principles include:
o Requiring that the Board consist of a majority of
Independent Directors and adopting a definition of
Independent Director that is designed to help ensure that
persons who serve as Independent Directors are truly
independent;
o Appointing a Lead Independent Director to act as a liaison
between the Board and management;
o Limiting the payment by the Company of compensation of the
members of the Board to monies received for Board or Board
Committee service;
o Requiring the Chairperson of the Audit Committee to be a
"Financial Expert";
o Prohibiting Independent Directors or their family members
from conducting business with the Company;
o Establishing director compensation practices intended to
align more closely the interests of the Independent
Directors with the Company's shareholders; and
o Encouraging the Independent Directors to meet in executive
session.
DIRECTOR INDEPENDENCE
The Board has determined that all of the Company's current Directors,
with the exception of Mr. Laikin (the Company's Chairman of the Board and Chief
Executive Officer) have met the independence requirements of the NASD
Marketplace Rules applicable to companies whose securities are quoted on NASDAQ
and the Company's Corporate Governance Principles. In making determinations
regarding a Director's independence, the Board considers all relevant facts and
circumstances, including the Director's commercial, banking, consulting, legal,
accounting, charitable and familial relationships, and such other criteria as
the Board may determine from time to time.
MEETINGS OF DIRECTORS AND COMMITTEES
During the fiscal year ended December 31, 2005, the Board of Directors
held seven (7) meetings. In addition, the Board took other action by unanimous
written consent in lieu of a meeting. During 2005, each member of the Board
participated in at least 75% of all Board and applicable committee meetings held
during the period for which he or she was a director. The Board of Directors and
the Board Committees met regularly in executive sessions.
BOARD COMMITTEES
The Board of Directors maintains an Audit Committee, a Corporate
Governance and Nominating Committee and a Compensation and Human Resources
Committee. The Audit Committee, Corporate Governance and Nominating Committee
and Compensation and Human Resources Committee are comprised solely of persons
who meet the definition of an Independent Director under the Company's
Governance Principles and NASD Marketplace Rules applicable to companies whose
securities are quoted on NASDAQ. Each of these committees has adopted a
charter, and each of the charters were filed as appendicies to the Company's
Definitive Proxy Statement with respect to the annual meeting for the fiscal
year ended December 31, 2004 and are available on the Company's website,
www.brightpoint.com.
On June 3, 2005, the Board of Directors formed a Finance Committee
comprised of Richard W. Roedel, Chairperson of the Audit Committee; Jerre L.
Stead, the Company's Lead Independent Director; and V. William Hunt, a member of
the Audit Committee; to support the ongoing review and
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restructure of the Company's global finance organization. This Committee was
dissolved upon the filing of the Company's Form 10-K for the year ended December
31, 2005 on March 2, 2006. The functions of each of the continuing Board
Committees are described below:
THE CORPORATE GOVERNANCE AND NOMINATING COMMITTEE
The Corporate Governance and Nominating Committee is responsible for
developing and reviewing the effectiveness of the Company's corporate governance
guidelines, recommending appropriate Board and Board Committee structures and
membership, establishing procedures for the director nomination process and
recommending nominees for election to the Board. In 2005, the Corporate
Governance and Nominating Committee met nine (9) times. The Corporate Governance
and Nominating Committee will consider qualified nominees for the Company's
Board of Directors recommended by shareholders of the Company who follow the
procedures set forth under the caption "Shareholder Proposals for Next Annual
Meeting." The current members of the Corporate Governance and Nominating
Committee are:
Jerre L. Stead, Chairperson
Richard W. Roedel
Eliza Hermann
THE COMPENSATION AND HUMAN RESOURCES COMMITTEE
The Compensation and Human Resources Committee has responsibility for
approving the compensation policies of the Company, and for reviewing and
recommending for approval by the Company's Board of Directors, all elements of
compensation for the Company's officers and other highly compensated members of
management. The Committee provides oversight of the administration of the
Company's compensation program. The Committee also provides oversight of the
administration of the issuance of the Company's securities under the Company's
equity-based compensation plans and cash incentive and deferred compensation
plans for the Company's executives. The Committee also has responsibility for
reviewing the supplementary benefits paid to the Company's executive officers as
well as retirement and other benefit and any special compensation. The Committee
also reviews and recommends for approval by the Company's Board of Directors,
executive employment agreements, severance agreements and change in control
provisions for the Chief Executive Officer and other senior executives. The
Committee also directs the succession planning process for the Company's Chief
Executive Officer and other senior executives. The Committee provides oversight
of the Company's global diversity activities, and reviews its Charter and
evaluates its performance as a Committee on an annual basis.
The Compensation and Human Resources Committee met eight (8) times in
2005. In addition, the Committee took action by unanimous written consent in
lieu of a meeting. All Committee members participated in each meeting. The
Committee has direct access to independent legal counsel and independent
compensation consultants for survey data and other information as it deems
appropriate, and utilized these independent counsel and consultants from time to
time during the year.
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The current members of the Compensation and Human Resources Committee
are:
Eliza Hermann, Chairperson
Jerre L. Stead
Stephen H. Simon
Robert F. Wagner
THE AUDIT COMMITTEE
The Audit Committee has the power to select and oversee the performance
of the Company's independent registered public accountants and supervise the
audit and financial procedures of the Company. During 2005, the Audit Committee
held fourteen (14) meetings and also took action by unanimous consent in lieu of
a meeting. The current members of the Audit Committee are:
Richard W. Roedel, Chairperson
Marisa E. Pratt
V. William Hunt
none of the Audit Committee are employees of the Company and each of whom meets
the independence and financial literacy requirements under current NASD
Marketplace Rules applicable to companies whose securities are quoted on NASDAQ.
In addition, the Board of Directors of the Company has determined that Mr.
Roedel is an "audit committee financial expert" as defined under Item 401(h) of
Regulation S-K of the United States Securities and Exchange Commission.
REPORT OF AUDIT COMMITTEE
The responsibilities of the Audit Committee are to oversee the
Company's financial reporting process and internal audit function on behalf of
the Board and to report the results of their activities to the Board. The
Committee fulfills its responsibilities through periodic meetings with the
Company's independent registered public accounting firm, internal auditors and
members of management.
Throughout the year the Audit Committee monitors matters related to the
independence of Ernst & Young LLP, the Company's independent registered public
accounting firm. As part of its monitoring activities, the Committee obtained a
letter from Ernst & Young LLP, containing a description of all relationships
between the independent registered public accounting firm and the Company. After
reviewing the letter and discussing it with management, the Committee discussed
with Ernst & Young LLP its overall relationship with the Company and any of
those relationships described in the letter that could impact Ernst & Young
LLP's objectivity and independence. Based on its continued monitoring activities
and year-end review, the Committee has satisfied itself as to Ernst & Young
LLP's independence. Ernst & Young LLP also has confirmed in its letter that, in
its professional judgment, it is independent of the Company within the meaning
of the Federal securities laws and within the requirements of Independence
Standard Board (ISB) Standard No. 1, Independence Discussion with Audit
Committees.
The Committee also discussed with management, the Company's internal
auditors and its independent registered public accounting firm, the quality and
adequacy of the Company's internal controls and the internal audit function's
management, organization, responsibilities, budget and staffing. The Committee
reviewed with both the independent registered public accounting firm and the
internal auditors their audit plans, audit scope, and identification of audit
risks.
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The Committee discussed and reviewed with the independent registered
public accounting firm all matters required by auditing standards generally
accepted in the United States of America, including those described in SAS 61,
"Communication with Audit Committees." With and without management present, the
Committee discussed and reviewed the results of the independent registered
public accounting firm's examination of the financial statements. The Committee
also discussed the results of the internal audit examinations.
The Committee reviewed the audited financial statements of the Company
as of and for the fiscal year ended December 31, 2005 with management and the
independent registered public accounting firm. Management has the responsibility
for the preparation and integrity of the Company's financial statements and the
independent registered public accounting firm has the responsibility for the
examination of those statements. Based on the above-mentioned review and
discussions with management and the independent registered public accounting
firm, the Committee recommended to the Board that the Company's audited
financial statements be included in its Annual Report on Form 10-K for the
fiscal year ended December 31, 2005, for filing with the Securities and Exchange
Commission. The Committee also reappointed Ernst & Young LLP as the Company's
independent registered public accounting firm subject to shareholder
ratification of such appointment.
AUDIT COMMITTEE:
Richard W. Roedel, Chairperson
Marisa E. Pratt
V. William Hunt
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table discloses for the periods presented the
compensation for the person who served as our Chief Executive Officer and for
each of our other executive officers (not including the Chief Executive Officer)
whose total individual compensation exceeded $100,000 for our fiscal year ended
December 31, 2005 (the "Named Executives").
Long-Term Compensation
Annual Compensation Awards
---------------------------------------- ------------------------------
Restricted Stock Securities
Other Annual* and Restricted Underlying All Other
Name and Principal Position Year Salary Bonus Compensation(1) Stock Units Options(2) Compensation(3)
------------------------------------------------------------------------------------------------------------------------------------
Robert J. Laikin 2005 $705,000 $1,300,334 $ 8,938 $4,227,629(11) 75,027(18) $ 420
Chairman of the Board and 2004 $670,000 $ 201,000(8) $ 6,500 - 225,000 $ 5,872
Chief Executive Officer 2003 $600,000 $ 600,000 $ 6,000 - - $ 420
J. Mark Howell 2005 $420,000 $ 807,173 $ 7,000 $2,113,220(12) 37,587(18) $ 380
President 2004 $410,000 $ 61,500(8) $ 6,500 - 112,500 $ 2,760
2003 $400,000 $ 300,000 $ 3,000 - - $ 378
Anthony W. Boor 2005 $216,122(5) $ 255,000(9) $ 4,300 $ 189,375(13) 22,500(19) $ 324
Executive Vice President, 2004 - - - - 6,750
Chief Financial Officer and 2003 - - - -
Treasurer
Steven E. Fivel 2005 $350,000 $ 430,220 $ 6,003 $1,098,873(14) 31,445(18) $ 420
Executive Vice President, 2004 $335,000 $ 50,250(8) $ 5,942 - 112,500 $ 3,045
General Counsel and 2003 $325,000 $ 243,750 $ 5,188 - - $ 420
Secretary
Vincent Donargo 2005 $ 52,308(6) $ 30,000 - 11,250(20) $ 87
Vice President, Chief 2004 - - - -
Accounting Officer, 2003 - - - -
Controller
Frank Terence(4) 2005 $239,167 - $ 3,712 $ 109,524(15) 36,710(21) $275,701
Former Executive Vice 2004 $410,000 $ 61,500(8) $ 3,117 - 112,500 $ 3,850
President, Chief Financial 2003 $350,000 $ 262,500 $ 3,500 - - $ 420
Officer and Treasurer
Lisa M. Kelley(4) 2005 $113,438(7) - $ 4,892 $ 47,618(16) 15,525(22) $112,500
Former Senior Vice President, 2004 $204,500 $ 31,350(8) $34,428(10) $ 154,980(17) 45,000 $ 2,343
Chief Accounting Officer, 2003 $100,000(4) $ 75,000 $11,287(10) - 50,625 $ 378
Controller
-------------------
(1) Except as otherwise noted below, represents our matching contributions
to the respective employee's 401(k) accounts and includes immaterial
refunds of less than $5,000 per year from the 401(k) Plan paid in 2005,
2004 and 2003, relating to ERISA compliance testing for the years 2004,
2003 and 2002.
(2) All share amounts, values and exercise prices of options to purchase
shares, restricted shares and Restricted Stock Units ("RSUs") have been
adjusted to give effect to the 3 for 2 stock splits of our Common Stock
effected in September and December of 2005.
(3) Includes expenses associated with company provided Group Term Life
Insurance and physical examinations in 2004, separation payments of
$239,167 for Mr. Terence and $112,500 to Ms. Kelley in 2005.
(4) Mr. Terence resigned as the Company's Executive Vice President, Chief
Financial Officer and Treasurer in June 2005. Ms. Kelley joined the
Company in July 2003. In June 2005, Ms. Kelley resigned as the
Company's Senior Vice President, Corporate Controller and Chief
Accounting Officer. In connection with their resignations, the Company
entered into Separation and General Release Agreements with Mr.
Terence and Ms. Kelley, which are further described in this Proxy
Statement within "Executive Officer Employment and Severance
Agreements".
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(5) Mr. Boor was appointed as the Company's Executive Vice President,
Chief Financial Officer and Treasurer in October 2005, at which time
Mr. Boor's annual base salary was increased to $325,000. Prior to
October 2005, Mr. Boor's annual base salary was $200,000.
(6) Mr. Donargo joined the Company in September 2005. Mr. Donargo's annual
base salary for 2005 was $170,000.
(7) Ms. Kelley resigned from the Company in June 2005. At that time, her
annual base salary was $225,000.
(8) In connection with the restatement of the Company's financial
statements as of and for the year ended December 31, 2004, the Named
Executives, on their own initiative, returned a portion of the 2004
bonuses previously paid to them in the aggregate amount of $1,013,400
as a result of certain financial targets relating to the 2004 bonus
plan no longer having been met based upon the restated financial
results.
(9) This amount includes $205,000 issued under the 2005 Bonus Plan, and an
additional $50,000 cash bonus paid to Mr. Boor upon his appointment as
the Company's Executive Vice President, Chief Financial Officer and
Treasurer.
(10) Represents amounts paid for Ms. Kelley's moving and relocation costs
during 2004 and 2003.
(11) Represents a grant of 450,000 shares restricted stock awarded under the
2004 Long-Term Incentive Plan (the "Plan"). These restricted shares
vest in equal installments in each of the third, fifth and eighth
anniversary of the grant date (April 7, 2005). Additionally, 27,350
RSUs were awarded to Mr. Laikin based on the achievement of certain
pre-determined performance based goals for the Company as Other Stock
Based Awards under the Plan. Each RSU represents a contingent right to
receive one share of our Common Stock. These RSUs vest in three equal
annual installments beginning with February 18, 2006, the first
anniversary of the grant, subject to, and in accordance with the Plan
and the RSU agreements entered into between the Company and the
executive. The executive has no rights as a shareholder of the Company
with respect to the RSUs, including the rights to vote and receive
dividends and other distributions (except for adjustments if the number
of outstanding shares of Common Stock is changed as a result of a stock
dividend, stock split or the like without additional consideration to
the Company), until delivery of certificates representing shares of
Common Stock in satisfaction of the RSUs.
(12) Represents a grant of 225,000 shares of restricted stock under the 2004
Long-Term Incentive Plan. These restricted shares vest in equal
installments in each of the third, fifth and eighth anniversary of the
grant date (April 7, 2005). Additionally, 13,602 RSUs were awarded to
Mr. Howell based on the achievement of certain pre-determined
performance based goals for the Company as Other Stock Based Awards
under the Plan. Each RSU represents a contingent right to receive one
share of our Common Stock. These RSUs vest in three equal annual
installments beginning with February 18, 2006, the first anniversary of
the grant, subject to, and in accordance with the Plan and the RSU
agreements entered into between the Company and the executive. The
executive has no rights as a shareholder of the Company with respect to
the RSUs, including the rights to vote and receive dividends and other
distributions (except for adjustments if the number of outstanding
shares of Common Stock is changed as a result of a stock dividend,
stock split or the like without additional consideration to the
Company), until delivery of certificates representing shares of Common
Stock in satisfaction of the RSUs.
(13) Includes a grant of 7,500 RSUs awarded as Other Stock Based Awards
under the Plan. These RSUs vest on October 17, 2008, the third
anniversary of the date of grant, subject to, and in accordance with
the RSU agreement between the Company and Mr. Boor. Additionally,
11,250 RSUs were awarded to Mr. Boor as Other Stock Based Awards under
the Plan on June 2, 2005. These RSUs vest on June 2, 2009, the fourth
anniversary of the date of grant, subject to, and in accordance with
the RSU agreement between the Company and Mr. Boor. Each RSU represents
a contingent right to receive one share of our Common Stock. Mr. Boor
has no rights as a shareholder of the Company with respect to the RSUs,
including the rights to vote and receive dividends and other
distributions (except for adjustments if the number of outstanding
shares of Common Stock is changed as a result of a stock dividend,
stock split or the like without additional consideration to the
Company), until delivery of certificates representing shares of Common
Stock in satisfaction of the RSUs.
(14) Represents a grant of 112,500 shares of restricted stock under the
Plan. These restricted shares vest in three equal installments in each
of the third, fifth and eighth anniversary of the grant date (April 7,
2005). Additionally, 11,993 RSUs were awarded to Mr. Fivel based on the
achievement of certain pre-determined performance based goals for the
Company as Other Stock Based Awards under the 2004 Long-Term Stock
Incentive Plan. Each RSU represents a contingent right to receive one
share of our Common Stock. These RSUs vest in three equal annual
installments beginning with February 18, 2006, the first anniversary of
the grant, subject to, and in accordance with the Plan and the RSU
agreements entered into between the Company and the executive. The
executive has no rights as a shareholder of the Company with respect to
the RSUs, including the
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rights to vote and receive dividends and other distributions (except
for adjustments if the number of outstanding shares of Common Stock is
changed as a result of a stock dividend, stock split or the like
without additional consideration to the Company), until delivery of
certificates representing shares of Common Stock in satisfaction of
the RSUs.
(15) Represents a grant of 13,455 RSUs awarded as Other Stock Based Awards
under the Plan. Each RSU represents a contingent right to receive one
share of our Common Stock. These RSUs vest in three equal annual
installments beginning with February 18, 2006, the first anniversary of
the grant, subject to, and in accordance with the Plan and the RSU
agreements entered into between the Company and the executive. The
executive has no rights as a shareholder of the Company with respect to
the RSUs, including the rights to vote and receive dividends and other
distributions (except for adjustments if the number of outstanding
shares of Common Stock is changed as a result of a stock dividend,
stock split or the like without additional consideration to the
Company), until delivery of certificates representing shares of Common
Stock in satisfaction of the RSUs. Mr. Terence will forfeit 8,970 of
these RSUs upon his Separation Date on April 22, 2006.
(16) Represents a grant of 27,000 RSUs awarded as Other Stock Based Awards
under the Plan. Ms. Kelley forfeited these RSUs when she resigned in
June 2005.
(17) Represents a grant of 5,850 RSUs awarded as Other Stock Based Awards
under the Plan. Ms. Kelley forfeited these RSUs when she resigned in
June 2005.
(18) The options to purchase such shares were granted to the executive on
February 18, 2005 under the Plan. These grants were performance based
options as further discussed in "Executive Equity Program and Bonus
Plans". The options are exercisable as to one-third of the shares
covered thereby on the first, second and third anniversaries of the
date of grant. The exercise price is $8.14 per share.
(19) The options to purchase 22,500 shares were granted to Mr. Boor on
February 7, 2005 under the Plan. The options are exercisable as to
on-third of the shares covered thereby on the firs, second and third
anniversaries of the date of grant. The exercise price is $8.98 per
share
(20) The options to purchase 11,250 shares were granted to Mr. Donargo on
September 21, 2005 under the Plan. The options are exercisable as to
one-third of the shares covered thereby on the first, second and third
anniversaries of the date of grant. The exercise price is $12.31 per
share.
(21) The options to purchase such shares were granted on February 18, 2005
under the Plan. These grants were performance based options as further
discussed in "Executive Equity Program and Bonus Plans". Mr. Terence
will forfeit 24,473 of these options upon his Separation Date on April
22, 2006.
(22) The options to purchase such shares were granted on February 18, 2005
under the Plan. These grants were performance based options as further
discussed in "Executive Equity Program and Bonus Plans". Ms. Kelley
forfeited these options when she resigned in June 2005.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information with respect to individual
stock options granted to each of the Named Executives during fiscal 2005
(adjusted to give effect to the 3 for 2 stock splits of our Common Stock
effected in September and December of 2005):
% OF TOTAL POTENTIAL REALIZABLE VALUE
OPTIONS AT ASSUMED ANNUAL RATES OF
SHARES GRANTED TO STOCK PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM ($) (4)
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------------
NAME GRANTED YEAR ($/SH) DATE 5% 10%
------------------- ---------- ---------- -------- ----------- ---------------------------
Robert J. Laikin 75,027(1) 10.14% $ 8.14 2/18/10 $ 168,731 $ 372,851
J. Mark Howell 37,587(1) 5.08% $ 8.14 2/18/10 $ 84,561 $ 186,791
Steven E. Fivel 31,445(1) 4.25% $ 8.14 2/18/10 $ 70,718 $ 156,268
Anthony W. Boor 22,500(2) 3.04% $ 8.98 2/07/10 $ 55,823 $ 123,354
Vincent Donargo 11,250(3) 1.52% $ 12.31 9/19/10 $ 38,262 $ 84,548
Frank Terence (5) 36,710(1) 4.96% $ 8.14 2/18/10 $ 82,558 $ 182,432
Lisa M. Kelley (5) 15,525(1) 2.10% $ 8.14 2/18/10 $ 34,915 $ 77,152
---------------
(1) The options were granted on February 18, 2005 under our 2004 Long-Term
Stock Incentive Plan. The options are exercisable as to one-third of the
shares covered thereby on the first, second and third anniversaries of the
date of grant. These grants were performance based options as further
discussed in "Executive Equity Program and Bonus Plans". The number of
performance based options granted represents the net number of options
based on the satisfaction of 65% of the performance requirements.
(2) The options were granted on February 7, 2005 under our 2004 Long-Term Stock
Incentive Plan. The options are exercisable as to one-third of the shares
covered thereby on the first, second and third anniversaries of the date of
grant.
(3) The options were granted on September 19, 2005 under our 2004 Long-Term
Stock Incentive Plan. The options are exercisable as to one-third of the
shares covered thereby on the first, second and third anniversaries of the
date of grant.
(4) The potential realizable value columns of the table illustrate values that
might be realized upon exercise of the options immediately prior to their
expiration, assuming our Common Stock appreciates at the compounded rates
specified over the term of the options. These numbers do not take into
account provisions of options providing for termination of the option
following termination of employment or nontransferability of the options
and do not make any provision for taxes associated with exercise. Because
actual gains will depend upon, among other things, future performance of
the Common Stock, there can be no assurance that the amounts reflected in
this table will be achieved.
(5) Mr. Terence resigned as the Company's Executive Vice President, Chief
Financial Officer, Treasurer and principal financial officer in June 2005.
In June 2005, Ms. Kelley resigned as the Company's Senior Vice President,
Corporate Controller and Chief Accounting Officer.
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AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning each exercise of
stock options by each of the Named Executives during the fiscal year ended
December 31, 2005, and the value of unexercised stock options held by the Named
Executives as of December 31, 2005 (adjusted to give effect to the 3 for 2 stock
splits of our Common Stock effected in September and December of 2005):
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT DECEMBER 31, 2005 DECEMBER 31, 2005 (1)
ACQUIRED VALUE ----------------------------- -------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---------------------- ----------- ----------- ----------- ------------- ----------- -------------
Robert J. Laikin 202,485 $ 2,312,694 354,639 225,027 $ 5,515,680 $ 2,378,529
J. Mark Howell 229,279 $ 2,082,059 154,547 112,587 $ 2,378,407 $ 1,190,025
Steven E. Fivel 162,118 $ 1,580,405 100,779 106,445 $ 1,461,689 $ 1,126,456
Anthony W. Boor 16,875 $ 300,375 2,250 27,000 $ 19,913 $ 253,800
Vincent Donargo - - - 11,250 $ - $ 69,525
Frank Terence 326,782 $ 3,536,966 - 111,710 $ - $ 1,180,949
Lisa M. Kelley 39,750 $ 218,389 - - $ - $ -
--------------------
(1) Year-end values for unexercised in-the-money options represent the positive
spread between the exercise price of such options and the year-end market
value of the Common Stock.
DIRECTOR COMPENSATION
2005 BOARD OF DIRECTORS COMPENSATION
For the fiscal year ended December 31, 2005, our non-employee directors
("Independent Directors") other than the Lead Independent Director, received (1)
a $50,000 retainer that was received either (i) in the form of restricted shares
of the Company's Common Stock ("Elective Awards"), (ii) a combination of cash
and Elective Awards or (iii) all in cash, at the director's option, subject to
the "Required Share Condition" described below; (2) 4,500 (split adjusted)
restricted shares of the Company's Common Stock, which constitute "Annual
Awards" under the Amended and Restated Independent Director Stock Compensation
Plan (the "Director Stock Compensation Plan"); and (3) additional restricted
shares of Common Stock (equal to the difference resulting from subtracting the
grant-date value of the Annual Awards referred to in (2) above from $50,000) as
additional Elective Awards under the Director Stock Compensation Plan. The
Director Stock Compensation Plan, adopted in 2004 and approved by shareholders,
provides that 2,025,000 (split adjusted) shares of our Common Stock be reserved
for issuance to Independent Directors. In 2005, an aggregate of 72,422
restricted shares of Common Stock were granted to Independent Directors under
the Director Stock Compensation Plan.
For the fiscal year ended December 31, 2005, our Lead Independent
Director received (1) a $100,000 cash retainer; (2) 4,500 (split adjusted)
restricted shares of the Company's Common Stock which constitute Annual Awards
under the Director Stock Compensation Plan; and (3) additional restricted shares
of Common Stock (equal to the difference obtained by subtracting the grant-date
value of the Annual Awards referred to in (2) above from $100,000) as additional
Elective Awards under the Director Stock Compensation Plan.
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In 2005, the Corporate Governance and Nominating Committee chairperson,
the Compensation and Human Resources Committee chairperson and Audit Committee
chairperson received $20,000, $20,000 and $35,000 for services rendered in those
roles. Members of the Audit Committee received annual payments of $10,000 for
services rendered in their capacity as Audit Committee members.
In June 2005 the Company granted the following compensation to Richard
W. Roedel in connection with his service as the Chairperson of the Finance
Committee of the Board: (i) a cash payment of $7,500 per calendar month,
effective as of April 1, 2005 through February, 2006, and (ii) an award of 4,500
shares (split adjusted) of Restricted Stock under the Company's 2004 Long-Term
Stock Incentive Plan (the "Plan"). The Finance Committee was disbanded when the
Company filed its Form 10-K for the fiscal year ended December 31, 2005 on March
2, 2006.
In June 2005, the Company granted 4,500 shares of Restricted Stock
under the Plan to V. William Hunt, in recognition of Mr. Hunt's outstanding
service to the Company in the immediately preceding months.
In 2004, the Board of Directors of the Company, upon the recommendation
of the Corporate Governance and Nominating Committee, amended the "Required
Share Condition" under the Company's Corporate Governance Principles, and
thereby the Director Stock Compensation Plan, to increase the percentage of
annual board compensation an Independent Director must receive in restricted
stock, subject to the exceptions set forth below, from 30% to 50%. Under the
Director Stock Compensation Plan, cash retainers are subject to the Required
Share Condition and required to be received in the form of restricted shares of
the Company's Common Stock unless the director to receive the retainer has
holdings of Company Common Stock that meet the "Threshold Amount" as defined in
the Director Stock Compensation Plan, in which case the director can elect to
receive the additional compensation in cash or a combination of cash and
restricted shares of the Company's Common Stock.
2006 BOARD COMPENSATION
The Board compensation for 2006 will remain the same as the Board
compensation for 2005, with the exception that the fee paid to the Compensation
and Human Resources Committee chairperson will be increased from $20,000 to
$30,000 for services rendered in that role.
EXECUTIVE OFFICER EMPLOYMENT AND SEVERANCE AGREEMENTS
o AMENDMENTS TO EMPLOYMENT AND SEVERANCE AGREEMENTS
The employment agreements in effect as of December 31, 2005 for Messrs.
Laikin, Howell and Fivel are described below in the section entitled "Employment
and Severance Agreements." These agreements were amended on April 7, 2005 in
connection with changes to the employment and compensation arrangements for
these executives; these changes establish retention incentives and limit the
amount of severance pay the individuals may receive.
On April 7, 2005, we entered into amendments to the employment
agreements for Messrs. Laikin, Howell and Fivel. Pursuant to these amendments we
codified the previously agreed 2005 annual base compensation for Mr. Laikin
($705,000), Mr. Howell ($420,000) and Mr. Fivel ($350,000). In addition,
severance and change of control caps ("Severance Caps") were implemented with
respect to the total value of the severance payments due upon the occurrence of
a Change of Control (as defined below in "Employment and Severance Agreements"),
or if (i) in breach of the applicable employment agreement, we terminate the
employee's employment other than for disability or Cause, or (ii) the
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employee terminates his employment for Good Reason. Any accelerated vesting of
annual equity awards upon a Change of Control will also count toward, and be
subject to, the Severance Cap (the total of the severance payments and
accelerated vesting the "Severance Total"). The amendments specifically exclude
from the Severance Cap calculation any accelerated vesting of the 450,000,
225,000 and 112,500 shares of restricted stock granted to Messrs. Laikin, Howell
and Fivel, respectively on April 7, 2005. Pursuant to the Severance Caps, the
Severance Total may not exceed $9 million for Mr. Laikin, $4.5 million for Mr.
Howell and $2.25 million for Mr. Fivel. Any gross-up payment designed to cover
extra income or excise taxes owed by the employee if the severance payments or
benefits paid are deemed to constitute "parachute payments" as defined in
Section 280G(b)(2) of the Internal Revenue Code of 1986, and any acceleration of
the restricted stock granted to the employees on April 7, 2005, will not count
toward or be subject to the Severance Cap. Other than as set forth above, the
employment agreements for Messrs. Laikin, Howell and Fivel, remained the same as
they were as of December 31, 2004, and are described below in the section
entitled "Employment and Severance Agreements".
In addition, on April 7, 2005, we entered into Supplemental Retirement
Benefit Agreements ("Retirement Agreements") with each of Messrs. Laikin, Howell
and Fivel and on January 19, 2006, the Company Amended and Restated these
Retirement Agreements effective as of April 7, 2005. The Amended and Restated
Retirement Agreements provide that we will implement a supplemental retirement
benefit providing each executive with an additional payment. However, instead of
being paid in the form of a single life annuity for the Executive's lifetime,
the payments under the Amended and Restated Retirement Agreements will be made
on an annual basis beginning at the Payment Start Date for a period of ten years
or until the Executive's death, if earlier. If the executive's employment is
terminated other than for cause, the Company shall pay the benefit beginning on
the earlier of the Date of Termination as set forth in the Executive's
respective Employment Agreement or Mr. Laikin's reaching age 50, Mr. Howell
reaching age 53 or Mr. Fivel reaching age 55. The benefit is an annual payment
equal to a certain percentage of average base salary and bonus based on the
Executive's final five years of work, with such percentage not to be greater
than 50%, but the Amended and Restated Retirement Agreements include caps on the
amount of the annual benefits payable ("Cap Amount"). Such payments shall be
paid for a ten-year period or, if earlier, through the date of the Executive's
death. If the executive is terminated for cause, then the benefit would not
commence until age 62.
Assuming annual salary increases of 5% per year, the anticipated
payments pursuant to the Amended and Restated Retirement Agreements would reach
the Cap Amount and would be approximately $500,000 per year to Mr. Laikin
commencing at age 50, $344,000 per year to Mr. Howell commencing upon age 53 and
$229,000 per year to Mr. Fivel commencing upon age 55. Payment under the
Retirement Agreements is contingent upon termination of service.
o EMPLOYMENT AND SEVERANCE AGREEMENTS
We have entered into five-year "evergreen" employment agreements with
each of Messrs. Laikin and Howell, which are automatically renewable for
successive one-year periods and provide for an annual base compensation in 2006
of $750,000 and $455,000 respectively, and such bonuses as the Board of
Directors may from time to time determine. If we provide the employee with
notice that we desire to terminate the agreement or terminate the agreement
without cause, there is a final five-year term commencing on the date of such
notice. The employment agreements provide for employment on a full-time basis
and contain a provision that the employee will not compete or engage in a
business competitive with our business during the term of the employment
agreement and for a period of two years thereafter. The employment agreements
also provide that, subject to the Severance Caps described in "Amendments to
Employment and Severance Agreements", if the employee's employment
-20-
is terminated by the employee, without Good Reason, as defined, within 12 months
after a "change of control," or if prior to and not as a result of a change of
control, the employee's employment is terminated either by the employee for Good
Reason or by us other than for disability or Cause, as defined, the employee
will be entitled to receive severance pay equal to the highest of (a) $2,250,000
for Mr. Laikin and $1,625,000 for Mr. Howell or (b) five times the total
compensation (including salary, bonus and the value of all perquisites) received
from us during the twelve months prior to the date of termination. If after or
as a result of a change of control, the employee's employment is terminated
either by the employee for Good Reason or by us other than for disability or
Cause, the employee will be entitled to receive severance pay equal to ten times
the total compensation (including salary, bonus, the value of all perquisites
and the value of all stock options granted to the employee) received from us
during the twelve months prior to the date of termination. In addition, (a) upon
the occurrence of a change of control, (b) if in breach of the agreement, we
terminate the employee's employment other than for disability or Cause, or (c)
if the employee terminates his employment for Good Reason at any time, the
vesting of all options granted to the employee will be accelerated so that the
options become immediately exercisable. For purposes of such agreements, a
"change of control" shall be deemed to occur, unless previously consented to in
writing by the respective employee, upon (i) individuals who constituted our
then current Board of Directors ceasing to constitute a majority of the Board of
Directors, (ii) subject to certain specified exceptions, the acquisition of
beneficial ownership of 15% or more of our voting securities by any person or
entity not affiliated with the respective employee or us, (iii) the commencement
of a proxy contest against management for the election of a majority of our
Board of Directors if the group conducting the proxy contest owns, has or gains
the power to vote at least 15% of our voting securities, (iv) the consummation
under certain conditions by us of a reorganization, merger or consolidation or
sale of all or substantially all of our assets to any person or entity not
affiliated with the respective employee or us, or (v) our complete liquidation
or dissolution.
In addition, we have entered into a three-year "evergreen" employment
agreement with Mr. Fivel, which is automatically renewable for successive
one-year periods and provides for an annual base compensation in 2006 of
$360,000, and such bonuses as the Board of Directors may from time to time
determine. If we provide the employee with notice that we desire to terminate
the agreement without Cause, there is a final three-year term commencing on the
date of such notice. The employment agreement provides otherwise for
substantially the same terms as the employment agreements described above,
except that, subject to the Severance Cap described in "Amendments to Employment
and Severance Agreements", if the employee's employment is terminated by the
employee, without Good Reason, as defined, within 12 months after a "change of
control," or if prior to and not as a result of a change of control, the
employee's employment is terminated either by the employee for Good Reason or by
us other than for disability or Cause, as defined, the employee will be entitled
to receive the highest of (a) $825,000 or (b) three times the total compensation
(including salary, bonus and the value of all perquisites ) received from us
during the twelve months prior to the date of termination. If after or as a
result of a change of control, the employee's employment is terminated either by
the employee for Good Reason or by us other than for disability or Cause, the
employee will be entitled to receive severance pay equal to six times the
compensation (including, salary, bonus, and the value of all perquisites and the
value of all stock options granted to the employee) received or earned from us
during the twelve months prior to the date of termination. In addition, (a) upon
the occurrence of a change of control, (b) if in breach of the agreement, we
terminate the employee's employment other than for disability or Cause, or (c)
if the employee terminates his employment for Good Reason at any time, the
vesting of all options granted to the employee will be accelerated so that the
options become immediately exercisable.
We have also entered into a three-year "evergreen" employment agreement
with Mr. Boor which is automatically renewable for successive one-year periods
and provides for an annual base compensation in 2006 of $325,000 and such
bonuses as the Board of Directors or the Compensation
-21-
and Human Resources Committee of the Board of Directors may from time to time
determine. The employment agreement provides for employment on a full-time basis
and contains a provision that the employee will not compete or engage in a
business competitive with the Registrant's business during the term of the
employment agreement and for a period of two years thereafter. The employment
agreement also provides that if the employee's employment is terminated by the
employee, without Good Reason, as defined, within 12 months after a "change of
control," or if prior to and not as a result of a change of control, the
employee's employment is terminated either by the employee for Good Reason or by
the Registrant other than for disability or Cause, as defined, the employee will
be entitled to receive severance pay equal to 2.99 times his annual base
compensation (excluding any bonus and the value of all perquisites) received
from the Registrant during the twelve months prior to the date of termination.
For purposes of such agreement, a "change of control" shall be deemed to occur,
unless previously consented to in writing by the employee, upon (i) individuals
who constituted the Registrant's then current Board of Directors ceasing to
constitute a majority of the Board of Directors, (ii) subject to certain
specified exceptions, the acquisition of beneficial ownership of 15% or more of
the Registrant's voting securities by any person or entity not affiliated with
the employee or the Registrant, (iii) the commencement of a proxy contest
against management for the election of a majority of the Registrant's Board of
Directors if the group conducting the proxy contest owns, has or gains the power
to vote at least 15% of the Registrant's voting securities, (iv) the
consummation under certain conditions by the Registrant of a reorganization,
merger or consolidation or sale of all or substantially all of its assets to any
person or entity not affiliated with the employee or the Registrant, or (v) the
Registrant's complete liquidation or dissolution. In addition, (a) upon the
occurrence of a change of control, (b) if in breach of the agreement, the
Registrant terminates the employee's employment other than for disability or
Cause, or (c) if the employee terminates his employment for Good Reason at any
time, the vesting of all options granted to the employee will be accelerated so
that the options become immediately exercisable.
We entered into a Separation and General Release Agreement (the
"Separation Agreement") as of June 30, 2005 with Frank Terence, our former
Executive Vice President, Chief Financial Officer and Treasurer, after Mr.
Terence's resignation. This Separation Agreement, results in the termination of
Mr. Terence's Employment Agreement with us. Under the terms of the Separation
Agreement, we will retain Mr. Terence in our employ, with disability status,
through April 22, 2006 (the "Separation Date"). In addition, the Separation
Agreement provides that Mr. Terence will receive $1,000 per month through the
Separation Date and a one-time payment of $275,333. Mr. Terence's options and
restricted stock unit awards will continue to vest through the Separation Date
and be exercisable in accordance with the terms of the plans under which they
were granted and the terms of his respective option and restricted stock unit
agreements. The Separation Agreement contains the same confidentiality and
non-disclosure provisions as his Employment Agreement, but does not contain
non-competition or non-solicitation provisions.
We entered into a Separation and General Release Agreement (the
"Separation Agreement") as of June 3, 2005 with Lisa Kelley, our former Senior
Vice President, Chief Accounting Officer, Controller, after Ms. Kelley's
resignation. This Separation Agreement resulted in the termination of Ms.
Kelley's Employment Agreement with us. Under the terms of the Separation
Agreement, Ms. Kelley was relieved of all regular duties and responsibilities
after June 3, 2005. In addition, Ms. Kelley received a one-time separation
payment in the amount of $112,500.
We have entered into a letter agreement with Mr. Donargo pursuant to
which he will receive an annual base salary of $180,000. In addition to his base
salary, in 2006, Mr. Donargo will be eligible to
-22-
participate in the Company's Executive Bonus Plan, through which he will be
eligible to receive a bonus of up to 50% of his base salary. Mr. Donargo will be
eligible for coverage under the benefit plans provided to employees, such as
medical, dental and life insurance and will be permitted to participate in the
Company's 401(k) Plan. Mr. Donargo also received a grant of 7,500 options to
purchase Common stock on September 19, 2005.
EXECUTIVE EQUITY PROGRAM AND BONUS PLANS
2005:
In connection with its administration of the Company's 2004 Long-Term
Incentive Plan (the "Plan"), and in furtherance of the goals of the Plan, the
Compensation and Human Resources Committee adopted a program (the "2005
Executive Equity Program") pursuant to which, on February 18, 2005, the
Company's executive officers, including its Chief Executive Officer, were
granted performance based restricted stock units and stock options. The
Company's performance as measured against certain previously approved
performance goals resulted in the satisfaction of 65% of the performance
requirements and the corresponding percentage of grants made pursuant to the
Executive Equity Program were earned. Those RSUs and options no longer subject
to forfeiture for performance vest in three equal annual installments beginning
with February 18, 2006, the first anniversary of the grant, subject to, and in
accordance with the Plan and the option and RSU agreements entered into between
the Company and the grantee.
The Committee established a 2005 cash award bonus program for executive
officers, which was based upon certain pre-established performance targets for:
(i) income from continuing operations, (ii) return on investment capital, and
(iii) certain strategic objectives approved by the Committee. If all of these
targets were reached, Mr. Laikin, the Chief Executive Officer was entitled to
receive a cash bonus equal to 100% of his base salary and each of the executive
officers and certain key employees were entitled to receive a cash bonus equal
to 50% of their respective base salaries as a bonus. Based upon the Company's
performance against these previously approved performance goals, the Committee
determined that 65% of the performance objectives were earned and each Executive
was eligible to receive the corresponding percentage of his or her target bonus
potential. In addition, the Committee, exercised its discretion to approve
discretionary bonuses for the Chief Executive Officer, certain other executives
and key employees.
2006:
In connection with its administration of the Plan, pursuant to the
Plan, and in furtherance of the goals of the Plan, the Compensation and Human
Resources Committee adopted a program (the "2006 Executive Equity Program")
pursuant to which, on February 6, 2006, the Company's executive officers,
including is Chief Executive Officer, were granted performance based restricted
stock units. The Plan grants made pursuant to the 2006 Executive Equity Program
are subject to forfeiture, in whole or in part, prior to the first anniversary
of the grant if the Company does not achieve certain pre-established performance
goals for (i) income from continuing operations (up to 50%) (ii) certain
strategic objectives approved by the Committee (up to 50%). If any or all of the
performance goals are not achieved, then the corresponding percentage of the
RSUs granted will be forfeited. Those RSUs no longer subject to forfeiture vest
in three equal annual installments beginning with the first anniversary of the
grant, subject to, and in accordance with the Plan and the RSU agreements
entered into between the Company and the grantee.
-23-
The Compensation and Human Resources Committee has established a 2006
cash award bonus program for the Company's executive officers, including its
Chief Executive Officer, which is based upon certain pre-established performance
goals for: (i) income from continuing operations (up to 50%) and (ii) certain
strategic objectives approved by the Committee (up to 50%). If all of these
targets are reached, Mr. Laikin, the Company's Chief Executive Officer, will
receive a cash bonus up to 100% of his base salary and each of the other
executive officers will receive a cash bonus up to 50% of their respective base
salaries as a bonus. If only certain of the targets are reached then the
executive officers, including the Chief Executive Officer, would be entitled to
receive the corresponding percentage of their potential bonus under the program.
The Compensation and Human Resources Committee retains discretion to increase an
award based on individual and Company performance.
REPORT OF THE COMPENSATION AND HUMAN RESOURCES COMMITTEE OF THE BOARD OF
DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation and Human Resources Committee (the "Committee"),
subject to the approval of the Board of Directors, determines the compensation
of the Company's executive officers, including the Chief Executive Officer, and
oversees the administration of all executive compensation programs. As noted
above, the compensation policy of the Company is determined by the Compensation
and Human Resources Committee, which periodically reviews trends in compensation
practices. The executive compensation policy for the Company was reviewed and
approved during 2005 as follows:
Brightpoint offers executive compensation programs that align
individuals' financial incentives with our strategic direction and corporate
values. Our programs are designed to attract and retain key talent needed to
grow and manage our business and enhance shareholder value. Our executive
compensation program includes cash (base pay and short term incentive) and
non-cash (equity) components. These programs aim to provide our executives with:
o Base pay in the aggregate at the median of the relevant external
market comparator group,
o An opportunity for total cash to significantly exceed the market
median when exceptional individual and business performance is
achieved, and
o Equity to ensure alignment of individual performance with long term
shareholder value and business objectives.
To put this policy into practice, the Committee reviews total
compensation survey data provided by independent consultants. In 2005 the
Committee updated the external comparator data in order to focus on those
companies which either participate in the Company's industry, or operate in a
related industry and are of a comparable size and scope of operations. The
Committee has reviewed all components of compensation of the Company's
executives, including that of the Chief Executive Officer, and conducted all of
its deliberations and made its determinations directly in keeping with both our
stated compensation policy as above and with this external comparator data.
Base Salary. The base salaries of the Company's executives, including
the Chief Executive Officer, are determined taking into account the median of
the comparator data set which reflects the external labor market for comparable
positions, and by relative individual job performance. An executive's salary
will also vary within this framework based on responsibilities, experience, and
leadership behaviors. A relatively greater emphasis is placed on the variable
(short and long term
-24-
incentive) components of compensation so as to put a greater portion of total
pay "at risk" based on Company and individual performance. Fiscal 2005 and
previous base salary data for the Company's Named Executives is shown in the
"Summary Compensation Table" on page 14.
Short Term Incentives - Bonuses. Bonuses for the Company's executive
officers, including the Chief Executive Officer, in 2005 were awarded based on
predetermined targets and metrics related to the Company's income from
continuing operations, return on invested capital, and key strategic objectives.
In addition, the Committee awarded to the executive officers, including the
Chief Executive Officer, additional ("Discretionary") bonuses based on the
Company's performance. The 2005 Discretionary bonuses were paid based on
individual and Company performance. The total bonuses awarded to the Company's
executive officers with respect to fiscal 2005 are set forth in the "Summary
Compensation Table" on page 14.
In connection with the restatement of the Company's financial
statements as of and for the year ended December 31, 2004, the Named Executives,
on their own initiative, returned a portion of the 2004 bonuses previously paid
to them in the aggregate amount of $1,013,400 as a result of certain financial
targets relating to the 2004 bonus plan no longer having been met based upon the
restated financial results.
Long Term Incentives - Equity (Stock Options and Restricted Stock).
These equity awards under the Company's Long-Term Incentive Plan or other stock
option plans are intended to align the interests of the executives with those of
the Company's shareholders. The size and grant of actual awards during 2005 was
determined by the Compensation and Human Resources Committee, taking into
account Company performance and total compensation comparator data using the
data set referred to above. The current share ownership for all executive
officers is shown in "Voting Security Ownership of Certain Beneficial Owners and
Management" on page 28.
COMPENSATION AND HUMAN RESOURCES COMMITTEE:
Eliza Hermann, Chairperson
Jerre L. Stead
Stephen H. Simon
Robert F. Wagner
-25-
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 2005, our Board of Directors,
which currently includes Mr. Laikin, neither modified nor rejected any
recommendations of the Compensation and Human Resources Committee. Also during
the fiscal year ended December 31, 2005, none of our executive officers served
on the board of directors or the compensation committee of any other company any
of whose executive officers serve on our Board of Directors or our Compensation
and Human Resources Committee.
-26-
STOCK PERFORMANCE GRAPH
The following line graph compares, from December 31, 2000 through
December 31, 2005, the cumulative total shareholder return on the Company's
Common Stock with the cumulative total return on the stocks comprising the S&P
SmallCap 600 Index(1) NASDAQ Market Value Index and the Hemscott Group Index
(previously known as the Coredata Group Index) ("Hemscott Group Index"). The
comparison assumes $100 was invested on December 31, 2000 in the Company's
Common Stock and in each of the foregoing indices and assumes reinvestment of
all cash dividends, if any, paid on such securities. The Company has not paid
any cash dividends and, therefore, the cumulative total return calculation for
the Company is based solely upon share price appreciation and not upon
reinvestment of cash dividends. Historical share price is not necessarily
indicative of future stock price performance.
COMPARED 5-YEAR CUMULATIVE TOTAL RETURN
AMONG BRIGHTPOINT, INC.,
NASDAQ MARKET INDEX AND HEMSCOTT GROUP INDEX
[PERFORMANCE GRAPH]
12/31/2000 12/31/2001 12/31/2002 12/31/2003 12/31/2004 12/31/2005
---------- ---------- ---------- ---------- ---------- ----------
BRIGHTPOINT, INC. 100.00 89.71 32.25 158.26 179.27 381.42
HEMSCOTT GROUP INDEX 100.00 98.94 74.42 100.38 124.04 147.77
NASDAQ MARKET INDEX 100.00 79.71 55.60 83.60 90.63 92.62
S&P SMALLCAP 600 INDEX 100.00 106.54 90.95 126.23 154.82 166.71
(1) THE COMPANY WAS ADDED TO THE S&P SMALLCAP 600 INDEX ON DECEMBER 1, 2005.
-27-
VOTING SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the Common Stock as of the Record Date, based on
information obtained from the persons named below, (i) by each person known by
us to own beneficially more than five percent of our Common Stock, (ii) by each
of the Named Executives, (iii) by each of our directors, and (iv) by all of our
executive officers and directors as a group:
AMOUNT AND
NATURE OF PERCENTAGE OF
BENEFICIAL OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OWNERSHIP (2) SHARES OWNED
---------------------------------------- ---------- ------------
Barclays Global Investors, NA(3).................................... 2,703,959 6.5
LSV Asset Management (4)............................................. 2,294,651 5.5
Robert J. Laikin (5)................................................. 732,540 1.7
J. Mark Howell (6)................................................... 293,896 *
Steven E. Fivel (7).................................................. 150,362 *
Jerre L. Stead (8)................................................... 72,644 *
Richard W. Roedel (9)................................................ 77,199 *
Robert F. Wagner (10)................................................ 34,571 *
Stephen H. Simon (11)................................................ 23,761 *
V. William Hunt (12)................................................. 32,617 *
Marisa E. Pratt (13)................................................. 23,268 *
Eliza Hermann (14)................................................... 23,199 *
Anthony W. Boor (15)................................................. 12,000 *
Kari-Pekka Wilska (16)............................................... 9,255 *
Vincent Donargo (17)................................................. - *
Frank Terence (18) .................................................. - *
Lisa M. Kelley (18).................................................. - *
All executive officers and directors
as a group (fifteen persons) (19).................................... 1,485,402 3.5
----------------------
* Less than 1%.
(1) The address for each of such individuals, unless specified otherwise in a
subsequent footnote, is in care of Brightpoint, Inc., 501 Airtech Parkway,
Plainfield, Indiana 46168.
(2) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the Record Date. Each
beneficial owner's percentage ownership is determined by assuming that
options, warrants or other rights to acquire securities that are held by
such person (but not those held by any other person) and which are
exercisable within 60 days of the Record Date have been exercised. Unless
otherwise indicated, we believe that all persons named in the table have
sole voting and investment power with respect to all shares of Common Stock
beneficially owned by them. All share amounts reflected in this table have
been adjusted to give effect, as applicable, to
-28-
(i) a 3 for 2 stock split of the Company's Common Stock effected in the
form of a 50% stock dividend that was paid on 9/15/2005 to holders of
record on 8/31/2005; and (ii) a 3 for 2 stock split of the Company's Common
Stock effected in the form of a 50% stock dividend that was paid on
12/30/2005 to holders of record on 12/16/2005.
(3) Based solely on a Schedule 13F filed with the United States Securities and
Exchange Commission by Barclays Global Investors, NA. The address of
Barclays Global Investors, NA is 45 Freemont Street, San Francisco, CA
94105.
(4) Based solely on a Schedule 13G filed with the United States Securities
and Exchange Commission by LSV Asset Management. The address of LSV Asset
Management is 1 N. Wacker Drive, Suite 4000, Chicago, IL 60606.
(5) Includes 244,648 shares underlying options that are exercisable within 60
days of the Record Date. Includes 460,000 shares of restricted stock
awarded under the 2004 Long-Term Stock Incentive Plan. Includes 27,892
shares owned by Mr. Laikin. Does not include options to purchase 125,018
shares. Does not include 60,635 Restricted Stock Units.
(6) Includes 65,932 shares underlying options that are exercisable within 60
days of the Record Date. Includes 225,000 shares of restricted stock
awarded to J. Mark Howell under the 2004 Long-Term Stock Incentive Plan.
Includes 2,681 shares owned by Mr. Howell. Includes 373 shares allocated
from the 401(k). Does not include options to purchase 62,558 shares. Does
not include 29,647 Restricted Stock Units.
(7) Includes 29,232 shares underlying options that are exercisable within 60
days of the Record Date. Includes 112,500 shares of restricted stock
awarded under the 2004 Long-Term Incentive Plan. Includes 8,143 shares
owned by Mr. Fivel. Includes 487 shares allocated from the 401(k). Does not
include options to purchase 58,463 shares. Does not include 24,277
Restricted Stock Units.
(8) Includes (i) 45,812 shares beneficially owned by Mr. Stead, which shares
are owned of record by JMJS Group LLP, (ii) 5,298 shares underlying options
that are exercisable within 60 days of the Record Date, (iii) 18,645 shares
of restricted stock granted under the Company's Amended and Restated
Director Stock Compensation Plan, which are subject to forfeiture as set
forth in the Plan, and (iv) 2,889 shares owned by Mr. Stead.
(9) Includes 50,625 shares underlying options, which are exercisable within 60
days of the Record Date. Includes 3,375 shares owned by Mr. Roedel and
23,199 shares of restricted stock under the Company's Amended and Restated
Director Stock Compensation Plan, which are subject to forfeiture as set
forth in the Plan.
(10) Includes (i) 17,138 shares held by Robert F. Wagner and Patricia D. Wagner,
and (ii) 17,433 shares of restricted stock under the Company's Amended and
Restated Director Stock Compensation Plan, which are subject to forfeiture
as set forth in the Plan. Does not include 175 shares held in a joint
account by Mr. Wagner and his emancipated son, of which shares Mr. Wagner
disclaims beneficial ownership,
(11) Includes 3,616 shares owned by Mr. Simon and 20,145 shares of restricted
stock under the Company's Amended and Restated Director Stock Compensation
Plan, which are subject to forfeiture as set forth in the Plan.
(12) Represents 4,500 shares and 28,117 shares of restricted stock owned by Mr.
Hunt under the Company's Amended and Restated Director Stock Compensation
Plan, which are subject to forfeiture as set forth in the Plan.
(13) Represents 69 shares and 23,199 shares of restricted stock owned by Ms.
Pratt under the Company's Amended and Restated Director Stock Compensation
Plan, which are subject to forfeiture as set forth in the Plan.
(14) Represents 23,199 shares of restricted stock owned by Ms. Hermann under the
Company's Amended and Restated Director Stock Compensation Plan, which are
subject to forfeiture as set forth in the Plan.
(15) Represents 12,000 shares underlying options, which are exercisable within
60 days of the Record Date. Does not include options to purchase 17,250
shares. Does not include 34,580 Restricted Stock Units.
(16) Represents 9,255 shares of restricted stock owned by Mr. Wilska under the
Company's Amended and Restated Director Stock Compensation Plan, which are
subject to forfeiture as set forth in the Plan.
(17) Does not include options to purchase 11,250 shares. Does not include 4,071
Restricted Stock Units
(18) Mr. Terence resigned as the Company's Executive Vice President, Chief
Financial Officer and Treasurer in June 2005. In June 2005, Ms. Kelley
resigned as the Company's Senior Vice President, Corporate Controller and
Chief Accounting Officer. In connection with their resignations, the
Company entered into Separation and General Release Agreements with Mr.
Terence and Ms. Kelley, which are further described in "Executive Officer
Employment and Severance Agreements". Does not include 8,970 Restricted
Stock Units that will be forfeited by Mr. Terence upon his Separation Date
on April 22, 2006.
-29-
(19) Includes an aggregate of 407,735 shares underlying options, which are
exercisable within 60 days of the Record Date, including those listed in
notes (4) through (16), above. Does not include options to purchase an
aggregate of 274,539 shares. Does not include 153,210 Restricted Stock
Units.
-30-
EQUITY COMPENSATION PLANS
THE FOLLOWING TABLE PROVIDES CERTAIN INFORMATION WITH RESPECT TO ALL OF THE
COMPANY'S EQUITY COMPENSATION PLANS IN EFFECT AS OF DECEMBER 31, 2005.
Number of securities to Weighted-average Number of securities
be issued upon exercise exercise price of remaining available for
of outstanding options outstanding options issuance under equity
and rights and rights compensation plans,
excluding securities
reflected in column (a)
Plan Category (a) (b) (c)
-------------------------------------------------------------------------------------------------------------------------
Amended and Restated Independent Director
Stock Compensation Plan (approved by
shareholders) (2) - _ 1,896,044
Equity compensation plans approved by
shareholders: (2004 Long-Term Incentive
Plan, 1994 Stock Option Plan and
Non-Employee Director Stock Option Plan) (3) 1,841,303 $5.75 1,839,611
Equity compensation plans not approved
by shareholders:
(1996 Stock Option Plan) (4) 742,598 $7.55 119,322
--------- ----- ---------
Total 2,583,901 $6.35 3,854,977
========= ===== =========
(1) All share amounts and exercise prices are adjusted to give retroactive
effect to the 3 for 2 stock splits of our Common Stock effected in
September and December of 2005.
(2) 1,896,044 shares of restricted stock remain eligible for grant, as initial,
annual or elective awards pursuant to the terms of the Company's Amended
and Restated Independent Director Stock Compensation Plan.
(3) The 1994 Plan has 1,048,900 options outstanding at an average of $4.90 a
share. There are no remaining shares available for issue. The Non-Employee
Director Plan has 53,514 options outstanding at an average of $0.44 a
share. There are no remaining shares available for issue. The 2004
Long-Term Incentive Plan has 334,525 Restricted Stock Units issued, which
were granted as other stock based awards under the Plan. In addition, the
2004 Long-Term Incentive Plan has 404,364 options outstanding at an average
of $8.66 per share. There are 1,839,611 shares available for issuance.
Under the 2004 Plan the Company may issue stock options, performance units,
restricted shares, deferred stock, or other stock-based awards.
(4) Represents the aggregate number of shares of Common Stock issuable upon
exercise of arrangements with option holders granted under our 1996 Stock
Option Plan. These options are 5 to 10 years in duration, expire at various
dates between October 17, 2006 and January 23, 2014, contain anti-dilution
provisions providing for adjustments of the exercise price under certain
circumstances and have termination provisions similar to options granted
under shareholder approved plans. See Note 13 to the Consolidated Financial
Statements included in the Company's Form 10-K for the year ended December
31, 2005 for a description of the 1996 Stock Option Plan. This plan will
expire July 16, 2006 at which time there will be no remaining shares
available for issue.
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CERTAIN TRANSACTIONS
We utilize the services of a third party for the purchase of corporate
gifts, promotional items and standard personalized stationery. Mrs. Judy Laikin,
the mother of Robert J. Laikin, our Chief Executive Officer, was the owner of
this third party until June 1, 2000 and is currently an independent consultant
to this third party. We purchased approximately $108,298 and $86,052 of services
and products from this third party during 2005 and 2004, respectively. These
purchases were subject to review and authorization by the audit committee; and
we believe that these purchases were made on terms no less favorable to us than
we could have obtained from an unrelated party.
During the fiscal years ended December 31, 2005 and 2004, we paid to an
insurance brokerage firm, for which the father of Robert J. Laikin acts as an
independent insurance broker, $205,000 each year in service fees. In addition,
we pay certain insurance premiums to the insurance brokerage firms, which
premiums were forwarded to our respective insurance carriers. These purchases
were subject to review and authorization by the audit committee; and we believe
these services were purchased on terms no less favorable to us than we could
have obtained from an unrelated party.
We utilize the services of a third-party staffing agency for our
temporary labor needs. This third-party staffing agency is owned in part by the
brother-in-law of the Company's Chief Financial Officer, Anthony W. Boor. We
paid approximately $6,595,081 and $2,356,008 to this staffing agency during 2005
and 2004. We made no payments to this staffing agency during 2003. These
purchases were subject to review and authorization by the audit committee; and
we believe such payments were made on terms no less favorable to us than we
could have obtained from an unrelated party. During February 2006, this staffing
agency was sold by its former owners to an unrelated third-party.
Our Articles of Incorporation and By-Laws provide that we indemnify our
officers and directors to the extent permitted by law. In connection therewith,
we entered into indemnification agreements with our executive officers and
directors. In accordance with the terms of these agreements we have reimbursed
certain of our former executive officers and intend to reimburse our officers
and directors for their legal fees and expenses incurred in connection with
certain pending litigation and regulatory matters. We did not make any such
reimbursement payments during 2005.
PROPOSAL II -
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Company has engaged Ernst & Young LLP ("E&Y") as its independent
registered public accounting firm since October 1994. In connection with the
audit of the 2005 financial statements, the Company entered into an engagement
agreement with E&Y that set forth the terms by which E&Y will perform audit
services for the Company. That agreement is subject to alternative dispute
resolution procedures and an exclusion of punitive damages. E&Y reported on the
financial statements of the Company for the fiscal year ended December 31, 2005
and the Audit Committee of the Board of Directors has appointed E&Y to audit and
report on the financial statements of the Company for the year ending December
31, 2006. Although shareholder approval of the appointment of E&Y is not
required by law, the Board of Directors believes that it is advisable to give
shareholders an opportunity to ratify this appointment. Furthermore, although
the appointment of E&Y is being submitted for
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shareholder ratification, the Audit Committee reserves the right, even after
ratification by shareholders, to change the appointment of E&Y as auditors, at
any time during the 2006 fiscal year, if it deems such change to be in the best
interests of the Company. Representatives of E&Y will be present at the Annual
Meeting.
Audit Fees. The aggregate fees for professional services rendered by
E&Y for the audit of the Company's annual financial statements for the years
ended December 31, 2005 and 2004, the review of the financial statements
included in the Company's Forms 10-Q for 2005 and 2004, audit of internal
control over financial reporting and statutory audits of foreign subsidiaries
totaled $1,733,288 and $1,510,603, respectively.
Audit-Related Fees. The aggregate fees for assurance and related
services by E&Y that are related to the performance of the audit or review of
the Company's financial statements, for the years ended December 31, 2005 and
2004, and that are not disclosed in the paragraph captioned "Audit Fees" above,
were $15,000 and $155,499, respectively. The services performed by E&Y in
connection with these fees consisted of employee benefit plan audits and
internal controls consultation.
Tax Fees. The aggregate fees for professional services rendered by E&Y
for tax compliance, for the years ended December 31, 2005 and 2004, were
$262,307 and $287,223, respectively. The aggregate fees billed by E&Y for
professional services rendered for tax advice and tax planning, for the years
ended December 31, 2005 and 2004, were $70,604 and $127,343, respectively. The
services performed by E&Y in connection with these advisory and planning fees
consisted of the following: tax audits and consultation regarding various tax
issues.
All Other Fees. There were no fees for products and services by E&Y,
other than the services described in the paragraphs captioned "Audit Fees,"
"Audit-Related Fees," and "Tax Fees" above for the years ended December 31, 2005
and 2004.
The Audit Committee has established its pre-approval policies and
procedures, pursuant to which the Audit Committee approved the foregoing audit
and permissible non-audit services provided by E&Y in 2005. The Audit
Committee's pre-approval policy is as follows: Consistent with the Audit
Committee's responsibility for engaging our independent auditors, all audit and
permitted non-audit services require pre-approval by the Audit Committee. All
requests or applications for services to be provided by the independent
registered public accounting firm that do not require specific approval by the
Audit Committee will be submitted to the Chief Financial Officer and must
include a detailed description of the services to be rendered. The Chief
Financial Officer will determine whether such services are included within the
list of services that have received the general pre-approval of the Audit
Committee. The Audit Committee will be informed on a timely basis of any such
services rendered by the independent auditor. Request or applications to provide
services that require specific approval by the Audit Committee will be submitted
to the Audit Committee by both the independent auditor and the Chief Financial
Officer, and must include a joint statement as to whether, in their view, the
request or application is consistent with the Securities and Exchange
Commission's rules on auditor independence. The Audit Committee has designated
the Vice President of Internal Audit to monitor the performance of all services
provided by the independent auditor and to determine whether such services are
in compliance with this policy. The Vice President of Internal Audit will report
to the Audit Committee on a periodic basis on the results of its monitoring. The
Vice President of Internal Audit and management will immediately report to the
chairman of the Audit Committee any breach of this policy that comes to the
attention of the Vice President of Internal Audit or any member of management.
The
-33-
Audit Committee will also review the internal auditor's annual internal audit
plan to determine that the plan provides for the monitoring of the independent
auditor's services. Pursuant to these procedures the Audit Committee approved
the foregoing audit and permissible non-audit services provided by E&Y in 2005.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006.
-34-
SHAREHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Shareholders who wish to present proposals appropriate for
consideration at the Company's Annual Meeting of Shareholders for its fiscal
year ending December 31, 2006 to be held in the year 2007 must submit the
proposal in proper form to the Secretary of the Company at its address set forth
on the first page of this Proxy Statement (or such other address as then
constitutes its executive offices) not later than December 21, 2006 in order for
the proposition to be considered for inclusion in the Company's proxy statement
and form of proxy relating to such annual meeting. Such proposals must be
presented in a manner consistent with the Company's By-Laws and applicable laws.
Any such proposals, as well as any questions related thereto, should be directed
to the Secretary of the Company at 2601 Metropolis Parkway, Suite 210,
Plainfield, Indiana 46168. Under the Company's Corporate Governance Principles
Nominees for Directors should be sent to the Company's Lead Independent Director
at: board.directors@brightpoint.com.
If a shareholder submits a proposal after the December 21, 2006
deadline but still wishes to present the proposal at the Company's Annual
Meeting of Shareholders (but not in the Company's proxy statement) for the
fiscal year ending December 31, 2006, the proposal, which must be presented in a
manner consistent with the Company's By-Laws and applicable law, must be
submitted to the Secretary of the Company in proper form at the address set
forth above no later than March 6, 2007.
The Company did not receive notice of any proposed matter to be
submitted by shareholders for a vote at this Annual Meeting and, therefore, in
accordance with Exchange Act Rule 14a-4(c) any proxies held by persons
designated as proxies by the Company's Board of Directors and received in
respect of this Annual Meeting will be voted in the discretion of the Company's
management on such other matter which may properly come before the Annual
Meeting. Moreover, if the Company does not receive notice by March 6, 2007 of a
proposed matter to be submitted by a shareholder for shareholders vote at the
Annual Meeting of Shareholders for the fiscal year ending December 31, 2006,
then, in accordance with Exchange Act Rule 14a-4(c) any proxies held by persons
designated as proxies by the Company's Board of Directors in respect of such
Annual Meeting may be voted at the discretion of such persons on such matter if
it shall properly come before such Annual Meeting.
The qualities and skills sought in prospective members of the board are
determined by the Corporate Governance and Nominating Committee. The Corporate
Governance and Nominating Committee requires that director candidates be
qualified individuals who, if added to the Board, would provide the mix of
director characteristics and diverse experiences, perspectives and skills
appropriate for the Company. Criteria for selection of candidates will include,
but not be limited to: (i) business and financial acumen, as determined by the
Committee in its discretion, (ii) relevant education or training, (iii) a
commitment to business ethics and the "Brightpoint Values", (iv) tenure and
breadth of experience in a significant leadership capacity, as well as qualities
reflecting a proven record of accomplishment and ability to work with others,
(v) knowledgeable in the Company's industry, (vi) relevant experience and
knowledge of corporate governance practices, and (vii) expertise in an area
relevant to the Company. Any prospective director nominee must be "independent"
under NASDAQ Marketplace Rules and the Company's Corporate Governance
Principles. Such persons should not have commitments that would conflict with
the time commitments of a Director of the Company. Such persons shall be of high
repute and recognized integrity and not have been convicted in a criminal
proceeding or be named a subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses). Such person shall not have been
found in a civil proceeding to have violated any federal or state securities or
commodities law, and shall not be subject to any court or regulatory order or
decree limiting his or her business activity, including in connection with the
purchase or sale of any
-35-
security or commodity. Such persons shall have other characteristics considered
appropriate for membership on the Board of Directors, as determined by the
Corporate Governance and Nominating Committee.
The Corporate Governance and Nominating Committee has complete
discretion in considering nominations to the Board. A shareholder who wishes to
recommend a qualified candidate to the Company's Board of Directors may write to
the Company's Secretary at the address set forth above, stating in detail the
qualifications of the person they recommend. Pursuant to the Company's By-Laws,
all nominations for the 2007 Annual Meeting must be submitted not less than 50
days nor more than 75 days prior to the Annual Meeting.
With respect to the deadlines discussed above, if the date of the
Annual Meeting to be held in 2007 is advanced by more than thirty days or
delayed (other than as a result of adjournment) by more than thirty days from
the anniversary of the Annual Meeting held in 2006, a shareholder must submit
any such proposal to the Company no later than the close of business on the
sixtieth day prior to the date of the 2007 Annual Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of Forms 3, 4 and 5 and amendments thereto
furnished to us with respect to our most recent fiscal year, we believe that,
except for (i) the Forms 4 filed by each of our independent directors in
connection with their Annual Awards of restricted stock, which were
automatically awarded to such directors pursuant to our Amended and Restated
Independent Stock Compensation Plan on January 1, 2005 and (ii) a Form 4 filed
by Robert Wagner, one of our independent directors, with respect to his sale of
4,000 shares on November 18, 2005, all required reports were filed on a timely
basis.
OTHER INFORMATION
A copy of the Company's 2005 Annual Report to Shareholders is being
furnished herewith to each stockholder of record as of the close of business on
April 18, 2006. Copies of the Company's Annual Report on Form 10-K will be
provided upon written request to the Company at 501 Airtech Parkway, Plainfield,
Indiana 46168, Attention Investor Relations. The Form 10-K also is available on
the Company's website at www.brightpoint.com.
The Board of Directors is aware of no other matters, except for those
incident to the conduct of the Annual Meeting, that are to be presented to
shareholders for formal action at the Annual Meeting. If, however, any other
matters properly come before the Annual Meeting or any adjournments thereof, it
is the intention of the persons named in the proxy to vote the proxy in
accordance with their judgment.
By order of the Board of Directors,
Steven E. Fivel
Executive Vice President,
General Counsel and Secretary
April 19, 2006
-36-
ANNUAL MEETING OF SHAREHOLDERS OF
BRIGHTPOINT, INC.
MAY 11, 2006
----------------------------------------------------
PROXY VOTING INSTRUCTIONS
----------------------------------------------------
MAIL - Date, sign and mail your proxy card in the envelope provided as soon as
possible.
- OR -
TELEPHONE - Call toll-free 1-800-PROXIES from any touch-tone telephone and
follow the instructions. Have your control number and proxy card available when
you call.
- OR -
INTERNET - Access "WWW.VOTEPROXY.COM" and follow the on-screen instructions.
Have your control number available when you access the web page.
COMPANY NUMBER _____________
ACCOUNT NUMBER _____________
CONTROL NUMBER _____________
Please detach along perforated line and mail in the envelope provided IF you are
not voting via telephone or the Internet.
--------------------------------------------------------------------------------
BRIGHTPOINT, INC.
501 AIRTECH PARKWAY
PLAINFIELD, INDIANA 46168
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 11, 2006
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints STEVEN E. FIVEL and J. MARK HOWELL, and
each of them, Proxies, with full power of substitution in each of them, in the
name, place and stead of the undersigned, to vote at the Annual Meeting of
Shareholders of Brightpoint, Inc. (the "Company") on Thursday, May 11, 2006 at
9:00 a.m. local time, at the Company's offices located at 501 Airtech Parkway,
Plainfield, Indiana 46168 or at any adjournment or adjournments thereof,
according to the number of votes that the undersigned would be entitled to vote
if personally present, upon the following matters:
(Continued and to be signed on reverse side)
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
1. ELECTION OF CLASS III DIRECTORS:
[ ] FOR ALL NOMINEES NOMINEES:
( ) Marisa E. Pratt
( ) Jerre L. Stead
( ) Kari-Pekka Wilska
[ ] WITHHOLD AUTHORITY FOR ALL NOMINEES.
[ ] FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you wish to
withhold, as shown here: ( )
2. PROPOSAL TO RATIFY THE [ ] [ ] [ ]
APPOINTMENT OF ERNST & YOUNG FOR AGAINST ABSTAIN
LLP AS THE COMPANY'S
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2006
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR
ADJOURNMENTS THEREOF.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN ABOVE. IF NO
INSTRUCTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE NOMINEES AND PROPOSALS
LISTED ABOVE.
[ ]
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that changes
to the registered name(s) on the account may not be submitted via this method.
Signature of Shareholder Date
----------------------- -----------------------
Signature of Shareholder Date
----------------------- -----------------------
NOTE: Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such.
If signer is a partnership, please sign in partnership name by
authorized person.