<PAGE> 1
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
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 Rule 14a-11(c) or Rule 14a-12
LCC INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[LCC LOGO]
LCC INTERNATIONAL, INC.
7925 JONES BRANCH DRIVE
MCLEAN, VA 22102
April 17, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
of LCC International, Inc., to be held on Tuesday, May 19, 1998 at 10:00 a.m.
(eastern daylight time) at the Sheraton Premiere at Tysons Corner, 8661 Leesburg
Pike, Vienna, Virginia 22182.
At this meeting, you will be asked to vote, in person or by proxy, on the
following matters: (i) the election of the Board of Directors, which consists of
five members; (ii) the ratification of the appointment of KPMG Peat Marwick LLP
as the Company's independent auditors; (iii) the approval and adoption of an
amendment to the Company's 1996 Employee Stock Option Plan that increases the
number of shares of Class A Common Stock, par value $.01 ("Class A Common
Stock"), authorized to be issued pursuant to options granted under such plan
from 3,224,000 to 4,725,000; (iv) the approval and adoption of amendments to the
Company's Directors Stock Option Plan (the "Directors Plan") that (a) increase
the number of shares of Class A Common Stock authorized to be issued pursuant to
options granted under such plan from 60,000 to 140,000 and (b) delete Section
19.4 of the Directors Plan to allow for greater flexibility in the
administration of such plan; and (v) any other business as may properly come
before the meeting or any adjournments thereof. The official Notice of Meeting,
proxy statement and form of proxy and the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997 are included with this letter. The
matters listed in the Notice of Meeting are described in detail in the proxy
statement.
Regardless of your plans for attending in person, it is important that your
shares be represented and voted at the 1998 Annual Meeting. Accordingly, you are
urged to complete, sign and mail the enclosed proxy card as soon as possible.
Sincerely,
/s/ Geoffrey S. Carroll
DR. GEOFFREY S. CARROLL
President and Chief Executive Officer
<PAGE> 3
[LCC LOGO]
LCC INTERNATIONAL, INC.
7925 JONES BRANCH DRIVE
MCLEAN, VIRGINIA 22102
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 19, 1998
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Stockholders (the
"Annual Meeting") of LCC International, Inc. (the "Company") will be held on
Tuesday, May 19, 1998 at 10:00 a.m. (eastern daylight time) at the Sheraton
Premiere at Tysons Corner, 8661 Leesburg Pike, Vienna, Virginia 22182, to
consider and act upon the following proposals:
1. To elect the Board of Directors, which consists of five members;
2. To ratify the appointment of KPMG Peat Marwick LLP as the Company's
independent auditors for the fiscal year ending December 31, 1998;
3. To approve and adopt an amendment to the Company's 1996 Employee
Stock Option Plan that increases the number of shares authorized to be
issued pursuant to options granted under such plan from 3,224,000 to
4,725,000;
4. To approve and adopt amendments to the Company's Directors Stock
Option Plan (the "Directors Plan") that (a) increase the number of shares
of Class A Common Stock authorized to be issued pursuant to options granted
under such plan from 60,000 to 140,000 and (b) delete Section 19.4 of the
Directors Plan to allow for greater flexibility in the administration of
such plan; and
5. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on March 30, 1998 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting. Only holders of Class A Common Stock and Class B
Common Stock of record at the close of business on that date will be entitled to
notice of and to vote at the Annual Meeting or any adjournments thereof. A list
of the Company's stockholders entitled to vote at the Annual Meeting will be
open to the examination of any stockholder for any purpose germane to the
meeting during ordinary business hours for a period of ten (10) days before the
Annual Meeting at the Company's offices.
By Order of the Board of Directors
/s/ Peter A. Deliso
PETER A. DELISO
Secretary
McLean, Virginia
April 17, 1998
<PAGE> 4
LCC INTERNATIONAL, INC.
7925 JONES BRANCH DRIVE
MCLEAN, VIRGINIA 22102
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1998
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
This Proxy Statement and the accompanying Notice of Annual Meeting and form
of Revocable Proxy are being furnished, on or about April 17, 1998, to the
stockholders of LCC International, Inc. (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company to be used at
the 1998 Annual Meeting of Stockholders of the Company (the "Annual Meeting") to
be held on Tuesday, May 19, 1998 at 10:00 a.m. (eastern daylight time) at the
Sheraton Premiere at Tysons Corner, 8661 Leesburg Pike, Vienna, Virginia 22182,
and any adjournment thereof.
The purpose of the Annual Meeting is (i) to elect the Board of Directors,
which consists of five members; (ii) to ratify the appointment of KPMG Peat
Marwick LLP as the Company's independent auditors for the fiscal year ending
December 31, 1998; (iii) to approve and adopt an amendment to the Company's 1996
Employee Stock Option Plan (the "Employee Plan") that increases the number of
shares authorized to be issued pursuant to options granted under such plan from
3,224,000 to 4,725,000; (iv) to approve and adopt amendments to the Company's
Directors Stock Option Plan (the "Directors Plan") that (a) increase the number
of shares of Class A Common Stock authorized to be issued pursuant to options
granted under such plan from 60,000 to 140,000 and (b) delete Section 19.4 of
the Directors Plan to allow for greater flexibility in the administration of
such plan; and (v) to transact such other business as may properly come before
the Annual Meeting or any adjournments thereof.
If the enclosed form of proxy is properly executed and returned to the
Company in time to be voted at the Annual Meeting, the shares represented
thereby will be voted in accordance with the instructions thereon. EXECUTED BUT
UNMARKED PROXIES WILL BE VOTED: (I) FOR THE ELECTION OF FIVE DIRECTORS TO THE
BOARD OF DIRECTORS; (II) FOR THE RATIFICATION OF THE APPOINTMENT OF KPMG PEAT
MARWICK LLP AS THE COMPANY'S INDEPENDENT AUDITORS; (III) FOR THE APPROVAL AND
ADOPTION OF THE AMENDMENT TO THE COMPANY'S 1996 EMPLOYEE STOCK OPTION PLAN THAT
INCREASES THE NUMBER OF SHARES AUTHORIZED TO BE ISSUED PURSUANT TO OPTIONS
GRANTED UNDER SUCH PLAN FROM 3,224,000 TO 4,725,000; AND (IV) FOR THE APPROVAL
AND ADOPTION OF AMENDMENTS TO THE DIRECTORS STOCK OPTION PLAN THAT (A) INCREASE
THE NUMBER OF SHARES OF CLASS A COMMON STOCK AUTHORIZED TO BE ISSUED PURSUANT TO
OPTIONS GRANTED UNDER SUCH PLAN FROM 60,000 TO 140,000 AND (B) DELETE SECTION
19.4 OF THE DIRECTORS PLAN TO ALLOW FOR GREATER FLEXIBILITY IN THE
ADMINISTRATION OF SUCH PLAN. If any other matters are properly brought before
the Annual Meeting, proxies will be voted in the discretion of the proxy
holders. The Company is not aware of any such matters that are proposed to be
presented at its Annual Meeting.
The cost of soliciting proxies in the form enclosed herewith will be borne
entirely by the Company. The Company has retained D.F. King & Co., Inc. to
solicit proxies on its behalf for a fee of approximately $3,500. In addition,
proxies may be solicited by directors, officers and regular employees of the
Company, without extra remuneration, by personal interviews, telephone,
telegraph or otherwise. The Company will request persons, firms and corporations
holding shares in their name or in the names of their nominees, which are
beneficially owned by others, to send proxy materials to and obtain proxies from
the beneficial owners and will reimburse the holders for their reasonable
expenses in doing so.
The securities which can be voted at the Annual Meeting consist of shares
of Class A Common Stock and Class B Common Stock, par value $.01 ("Class B
Common Stock" and together with the Class A Common Stock, the "Common Stock"),
of the Company. Each outstanding share of Class A Common Stock entitles its
owner to one vote on each matter as to which a vote is taken at the Annual
Meeting. Each outstanding share of Class B Common Stock entitles its owner to
ten votes on each matter as to which a vote
<PAGE> 5
is taken at the Annual Meeting. The close of business on March 30, 1998 has been
fixed by the Board of Directors as the record date (the "Record Date") for
determination of stockholders entitled to vote at the Annual Meeting. The number
of shares of Class A Common Stock and Class B Common Stock outstanding and
entitled to vote on the Record Date was 7,080,165 and 8,460,984, respectively.
The presence, in person or by proxy, of shares of Common Stock issued and
outstanding and constituting at least a majority of the votes entitled to vote
on the Record Date is necessary to constitute a quorum at the Annual Meeting.
Stockholders' votes will be tabulated by the Company's Secretary and Controller,
who have been appointed by the Board of Directors to act as inspectors of
election for the Annual Meeting. Under Delaware corporate law and the Company's
Amended and Restated Bylaws (the "Bylaws"), directors are elected by a plurality
of votes cast by the shares present (in person or by proxy) and entitled to
vote. Unless otherwise required by law or the Company's Restated Certificate of
Incorporation or Bylaws, any other matter put to a stockholder vote, including
the amendments to the Employee Plan and the Directors Plan, will be decided by
the affirmative vote of a majority of the votes cast on the matter. Abstentions
and broker non-votes are not included as votes cast and accordingly will be
excluded from the total number of votes upon which a majority is based. Thus,
votes to abstain and broker non-votes will have no effect on the vote tabulation
for such proposals.
The presence of a stockholder at the Annual Meeting will not automatically
revoke the stockholder's proxy. However, a stockholder may revoke a proxy at any
time prior to its exercise by filing with the Secretary of the Company a written
notice of revocation, by delivering to the Company a duly executed proxy bearing
a later date or by attending the Annual Meeting and voting in person.
------------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR
APPROVAL OF THE PROPOSALS SET FORTH IN THIS PROXY STATEMENT.
------------------------
CERTAIN BACKGROUND INFORMATION REGARDING THE COMPANY
The Company's business commenced in 1983 in a corporation named LCC
Incorporated (presently named Cherrywood Holdings, Inc. ("Cherrywood")), a
Kansas corporation organized in 1983 and wholly owned by Dr. Rajendra and Neera
Singh and certain Singh family trusts. In 1994 Cherrywood transferred the
business to Telcom Ventures, L.L.C. ("Telcom Ventures"), a Delaware limited
liability company, for a 75% interest in Telcom Ventures. At the same time,
certain entities formed by The Carlyle Group, a Washington, D.C.-based
investment group (the "Carlyle Investors"), acquired a 25% interest in Telcom
Ventures in consideration of a cash contribution. Telcom Ventures then formed
LCC, L.L.C. (the "Limited Liability Company"), a Delaware limited liability
company, and transferred the business to the Limited Liability Company in
exchange for a 99% interest in the Limited Liability Company. Cherrywood and TC
Group, L.L.C., an affiliate of the Carlyle Investors ("TC Group"), received
direct interests of 0.75% and 0.25%, respectively, in the Limited Liability
Company. LCC International, Inc. was formed in June 1996 for the purpose of
effecting an initial public offering of equity securities which was accomplished
by the merger of the Limited Liability Company with and into LCC International,
Inc. (the "Merger") in connection with the initial public offering of LCC
International, Inc.'s Class A Common Stock (the "Offering"). Prior to the
Merger, Telcom Ventures transferred its interest in the Limited Liability
Company to RF Investors, L.L.C. ("RF Investors"), a Delaware limited liability
company of which Telcom Ventures owns 99% and Cherrywood and TC Group own 0.75%
and 0.25%, respectively. Since the Offering, Cherrywood and TC Group have
transferred to RF Investors the shares of the Company which they received as a
result of the Merger.
Unless the context indicates or requires otherwise, references in this
Proxy Statement to the "Company" are to its predecessor entities and their
respective subsidiaries prior to the Merger and to LCC International, Inc. and
its subsidiaries after the Merger.
2
<PAGE> 6
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of March 16, 1998 by (i) each
director (and director nominee), (ii) the Chief Executive Officer and each of
the other four most highly compensated executive officers whose total annual
salary and bonus exceeded $100,000 during the year ended December 31, 1997 (the
"Named Executive Officers"), (iii) all persons known to the Company to be
beneficial owners of more than 5% of its outstanding Class A or Class B Common
Stock and (iv) all directors and executive officers as a group. This information
is based upon the most recent filing made by such persons with the Securities
and Exchange Commission (the "Commission") or information provided to the
Company by such persons. Under the rules of the Commission, a person is deemed a
"beneficial owner" of a security if such person has or shares the power to vote
or direct the voting of such security or the power to dispose or direct the
disposition of such security. A person is also deemed to be a beneficial owner
of any securities of which that person has the right to acquire beneficial
ownership within 60 days. More than one person may be deemed to be a beneficial
owner of the same securities.
<TABLE>
<CAPTION>
NUMBER OF SHARES
------------------------------- PERCENT OF
NUMBER OF NUMBER OF COMMON STOCK
NAME, ADDRESS AND TITLE(1) CLASS A SHARES CLASS B SHARES OUTSTANDING
-------------------------- -------------- -------------- ---------------
<S> <C> <C> <C>
RF Investors, L.L.C.(2)(3).......................... 28,411 8,460,984 54.6%
Telcom Ventures, L.L.C.(4)
Cherrywood Holdings, Inc.(4)
211 North Union Street
Alexandria, Virginia 22314
MCI Telecommunications Corporation(5)(6)............ 2,841,099 -- 15.5%
1801 Pennsylvania Ave., N.W.
Washington, DC 20006
Dresdner RCM Global Investors LLC 662,900 -- 4.3%
RCM Limited L.P.
RCM General Corporation
Dresdner Bank A.G.(7).............................
Four Embarcadero Center
San Francisco, California 94111
Pilgrim Baxter & Associates, Ltd.(8)................ 515,000 -- 3.3%
825 Duportain Road
Wayne, PA 19087
Advantus Capital Management 421,500 -- 2.7%
MIMLIC Asset Management Company
The Minnesota Mutual Life Insurance Company(9)....
400 Robert Street North
St. Paul, MN 55101
Dr. Rajendra Singh, Chairperson of the Board of 68,411 8,620,984 55.4%
Directors(2)(3)(4)(10)............................
c/o Telcom Ventures, L.L.C.
211 North Union Street
Alexandria, Virginia 22314
Neera Singh, Director(2)(3)(4)(10).................. 68,411 8,620,984 55.4%
c/o Telcom Ventures, L.L.C.
211 North Union Street
Alexandria, Virginia 22314
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
NUMBER OF SHARES
------------------------------- PERCENT OF
NUMBER OF NUMBER OF COMMON STOCK
NAME, ADDRESS AND TITLE(1) CLASS A SHARES CLASS B SHARES OUTSTANDING
-------------------------- -------------- -------------- ---------------
<S> <C> <C> <C>
Mark D. Ein, Director(11)........................... 61,000 -- 0.4%
c/o The Carlyle Group
1001 Pennsylvania Ave., N.W.
Washington, DC 20004
Dr. Arno A. Penzias, Director(12)................... 10,600 -- *
c/o Lucent Technologies/Bell Labs
700 Mountain Ave.
Murray Hill, NJ 07974-0636
Dr. Geoffrey S. Carroll, President and -- -- 0%
Chief Executive Officer(13).......................
c/o LCC International, Inc.
7925 Jones Branch Drive
McLean, Virginia 22102
Richard Hozik, Senior Vice President, Chief 37,200 0.2%
Financial Officer and Treasurer(14)...............
c/o LCC International, Inc.
7925 Jones Branch Drive
McLean, Virginia 22102
Louis R. Olsen, Vice President, 15,885 -- *
New Business Ventures(15).........................
c/o LCC International, Inc.
7925 Jones Branch Drive
McLean, Virginia 22102
Gerard L. Vincent, Group Vice President, 38,900 -- *
Services(16)......................................
c/o LCC International, Inc.
7925 Jones Branch Drive
McLean, Virginia 22102
Frank F. Navarrete, Senior Vice President, 31,600 -- *
Business Development(17)..........................
c/o LCC International, Inc.
7925 Jones Branch Drive
McLean, Virginia 22102
All Directors, and Named Executive Officers as a 263,596 8,620,984 55.9%
Group (9 persons)(18).............................
</TABLE>
- ---------------
* Less than 0.1%.
(1) Unless otherwise noted, the Company believes that each of the stockholders
has sole voting and dispositive power with respect to the shares of Common
Stock owned by it, him or her.
(2) Includes the 85,233 shares of Class B Common Stock received by Cherrywood
and the 28,411 shares of Class A Common Stock received by TC Group as a
result of the Merger. These shares were transferred to RF Investors in
April 1997. Cherrywood and TC Group hold 0.75% and 0.25%, respectively, of
the outstanding equity interests of RF Investors. The remaining 99% is held
by Telcom Ventures.
(3) Represents all outstanding shares of the Class B Common Stock.
(4) Telcom Ventures is owned 75% by Cherrywood and 25% by certain entities
formed by the Carlyle Investors. Cherrywood is owned by Dr. Rajendra Singh,
Neera Singh and certain Singh family trusts. Dr. Rajendra Singh and Neera
Singh are the executive officers of Cherrywood and its sole directors.
4
<PAGE> 8
(5) Consists entirely of shares which may be acquired within 60 days upon
exchange of the Company's outstanding indebtedness to MCI
Telecommunications ("MCI"). See "Certain Relationships and Related
Transactions -- The Exchangeable Notes."
(6) Represents 28.6% of the outstanding shares of the Class A Common Stock
(assumes conversion of 100% of convertible subordinated debt).
(7) Represents 9.4% of the outstanding shares of the Class A Common Stock.
Dresdner RCM Global Investors LLC ("Dresdner RCM") is an investment advisor
registered under the Investment Advisers Act of 1940; RCM Limited L.P. is
the Managing Agent of Dresdner RCM; RCM General Corporation is the General
Partner of RCM Limited L.P.; and Dresdner RCM is a wholly owned subsidiary
of Dresdner Bank A.G.
(8) Represents 7.3% of the outstanding shares of the Class A Common Stock.
(9) Represents 6.0% of the outstanding shares of the Class A Common Stock.
Advantus Capital Management, Inc., an investment advisor registered under
the Investment Advisers Act of 1940, is a wholly owned subsidiary of MIMLIC
Asset Management Company, which is a wholly owned subsidiary The Minnesota
Mutual Life Insurance Company. The Minnesota Mutual Life Insurance Company
and MIMLIC Asset Management Company, through their control of Advantus
Capital Management, Inc., each has the sole power to vote and to dispose of
the shares owned by persons advised by Advantus Capital Management, Inc.
(10) Includes 160,000 shares which may be acquired within 60 days pursuant to
options granted, or to be granted, to Dr. Rajendra Singh and Neera Singh
pursuant to the Directors Plan.
(11) Includes 40,000 and 20,000 shares which may be acquired within 60 days
pursuant to options granted under the Directors Plan and the Employee Plan,
respectively. Mr. Ein is a Principal of The Carlyle Group, an affiliate of
the Carlyle Investors. Mr. Ein disclaims beneficial ownership of the shares
of Common Stock owned indirectly by the Carlyle Investors through their 25%
ownership of Telcom Ventures and any shares of stock issuable upon the
exercise of stock options granted to TC Group in connection with the
Offering.
(12) Includes 6,600 shares which may be acquired within 60 days pursuant to
stock options granted under the Directors Plan, and 4,000 shares held by
this director's wife.
(13) Dr. Carroll has served as the Company's President and Chief Executive
Officer since January 15, 1998. His employment agreement provides for,
among other things, options to purchase up to 975,000 shares of Class A
Common Stock, none of which is exercisable within 60 days. See "Employment
Agreements" below.
(14) Consists entirely of shares which may be acquired within 60 days pursuant
to stock options granted under the Employee Plan.
(15) Includes 15,500 shares which may be acquired within 60 days pursuant to
stock options granted under the Employee Plan.
(16) Includes 38,500 shares which may be acquired within 60 days pursuant to
stock options granted under the Employee Plan.
(17) Includes 31,000 shares which may be acquired within 60 days pursuant to
stock options granted under the Employee Plan, and 200 shares held by this
executive's son.
(18) Includes the shares held by RF Investors and shares which may be acquired
within 60 days pursuant to options granted pursuant to the Employee Plan
and the Directors Plan.
5
<PAGE> 9
MATTERS TO BE ACTED ON
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Board of Directors consists of five members. At the Annual Meeting,
five directors will be elected, each to serve until the next Annual Meeting of
Stockholders and until his or her successor is elected and qualified or until
such director's earlier death, resignation or removal.
Unless otherwise instructed on the proxy, the persons named in the proxy to
vote the shares represented by each properly executed proxy shall vote for the
election as directors the persons named below as nominees. Directors will be
elected by a plurality vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ITS NOMINEES FOR
DIRECTORS.
INFORMATION AS TO NOMINEES
Set forth below is certain information with respect to the nominees of the
Board of Directors for election as directors at the Annual Meeting. One former
director, Piyush Sodha, served as a member of the Board from January 1994 until
his resignation in January 1998. He is not standing for election.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Dr. Geoffrey S. Carroll............. 44 President, Chief Executive Officer and Director
Mark D. Ein......................... 33 Director
Dr. Arno A. Penzias................. 65 Director
Dr. Rajendra Singh.................. 43 Chairperson of the Board of Directors
Neera Singh......................... 39 Director
</TABLE>
Dr. Geoffrey S. Carroll. Dr. Geoffrey S. Carroll has been President and
Chief Executive Officer and a Director of the Company since January 1998. From
1997 to January 1998, Dr. Carroll served as a consultant to the Chairman of the
Board of Daimler-Benz Interservices. Dr. Carroll was Chief Executive Officer of
Origin B.V., the information technology services subsidiary of Philips N.V.,
Europe's largest electronics manufacturer, from 1996 to 1997. From 1990 to 1996,
Dr. Carroll was employed by Electronic Data Systems ("EDS"), holding the
positions of Group Executive for Europe, member of the EDS Europe Board of
Directors and President of Northern Europe. Prior to EDS, Dr. Carroll held a
number of positions in the advanced technology field, including Managing
Director of the worldwide government and public sector business of Wang
Laboratories.
Mark D. Ein. Mark D. Ein has served as a Director of the Company since
January 1994. He is a member of the Audit and Compensation Committees and the
Chairperson of the Audit Committee. Mr. Ein is a Principal of The Carlyle Group,
a private investment firm and an affiliate of the Carlyle Investors. Mr. Ein is
currently a director of Telcom Ventures, L.L.C., RF Investors, L.L.C., and
various private companies. Mr. Ein worked for Brentwood Associates, a private
equity investment firm, from 1989 to 1990, and for Goldman, Sachs & Co. from
1986 to 1989.
Dr. Arno A. Penzias. Dr. Arno A. Penzias has been a Director of the
Company since July 1996. He is a member of the Audit and Compensation Committees
and the Chairperson of the Compensation Committee. Dr. Penzias currently is
Senior Technology Advisor of Lucent Technologies, Bell Labs Innovations. From
1995 until 1996, Dr. Penzias was Vice President and Chief Scientist of AT&T Bell
Laboratories. From 1981 through 1995, he was Vice President, Research of AT&T
Bell Laboratories. As a scientist, Dr. Penzias is best known for his
contributions to astrophysics, which earned him the Nobel Prize for Physics in
1978. Dr. Penzias also is currently a member of the Board of Directors of
WarpSpeed Communications, Inc., a communications service company, Arthur D.
Little, Inc., a consulting company, and several private companies.
Dr. Rajendra Singh. Dr. Rajendra Singh is the Chairperson of the Board of
the Directors and member of the Compensation Committee and co-founder of the
Company. Dr. Singh was President of the Company
6
<PAGE> 10
from its formation in 1983 until September 1994, was Chief Executive Officer
from January 1994 until January 1995, and was Treasurer from January 1994 until
January 1996. Dr. Singh is also Chairman of the Members Committee of Telcom
Ventures L.L.C. and of RF Investors, L.L.C. Dr. Singh is married to Neera Singh,
a Director and, until September 1996, an executive officer, of the Company. Dr.
Singh is also a principal owner of Cherrywood Holdings, Inc. Dr. Singh is also a
director of Teligent, Inc., a wireless local access provider.
Neera Singh. Neera Singh is a co-founder of the Company and has been a
Director of the Company since its inception. Ms. Singh served as Vice President
of the Company from its formation in 1983 to October 1991 and Executive Vice
President from January 1994 until September 1996. Ms. Singh also served as
Co-Chairperson of the Company from January 1995 until September 1996. Ms. Singh
is a member of the Audit Committee. Ms. Singh is a member of the Members
Committee of Telcom Ventures, L.L.C. and RF Investors, L.L.C. Ms. Singh is
married to Dr. Rajendra Singh, a Director and former executive officer of the
Company. Ms. Singh is also a principal owner of Cherrywood Holdings, Inc.
CORPORATE GOVERNANCE AND OTHER MATTERS
The Board of Directors acts as a nominating committee for selecting
nominees for election as directors. The Company's Bylaws also permit
stockholders eligible to vote at the Annual Meeting to make nominations for
directors if such nominations are made pursuant to timely notice in writing to
the Secretary of the Company and include certain information specified in
Section 3.4 of the Company's Bylaws concerning each person the stockholder
proposes to nominate for election and the nominating stockholder. The Bylaws
also permit stockholders to propose other business to be brought before an
annual meeting, provided that such proposals are made pursuant to timely notice
in writing to the Secretary of the Company. To be timely for the Annual Meeting,
notice must have been delivered to, or mailed to and received at, the principal
executive offices of the Company no later than December 19, 1997. No such
nominations or proposals have been received in connection with the Annual
Meeting.
The Board of Directors has established an Audit Committee and a
Compensation and Stock Option Committee (the "Compensation Committee"). The
Audit Committee is comprised of Mr. Ein, Dr. Penzias and Ms. Singh; Mr. Ein is
Chairperson of the Committee. The Audit Committee examines and considers matters
relating to the financial affairs of the Company, including reviewing the
Company's annual financial statements, the scope of the independent annual audit
and internal audits and the independent auditors' letter to management
concerning the effectiveness of the Company's internal financial and accounting
controls. The Audit Committee held three meetings during the year ended December
31, 1997.
The Compensation Committee is comprised of Mr. Ein, Dr. Penzias and Dr.
Singh; Dr. Penzias is Chairperson of the Committee. The Compensation Committee
considers and makes recommendations to the Board of Directors with respect to
programs for human resource development and management organization and
succession, approves changes in senior executive compensation, considers and
makes recommendations to the Board of Directors with respect to general
compensation matters and policies and employee benefit and incentive plans and
administers the Company's stock option plans, grants stock options under such
stock option plans and exercises all other authority granted to it to administer
such stock option plans. The Compensation Committee met four times during the
year ended December 31, 1997 and it took action by unanimous written consent on
four occasions to grant options pursuant to the Directors Plan and the Employee
Plan.
During the year ended December 31, 1997, the Board of Directors held seven
meetings. No incumbent director attended fewer than 75% of the total number of
meetings of the Board of Directors and committees of the Board of Directors on
which he or she served during the period on which he or she served.
COMPENSATION OF DIRECTORS
The Company has entered into an agreement with one of its directors, Dr.
Arno A. Penzias, pursuant to which the Company has agreed to compensate Dr.
Penzias for his services as a director as follows: (i) an annual fee of $20,000,
(ii) a fee of $1,000 for each meeting of the Board of Directors he attends,
(iii) an
7
<PAGE> 11
annual fee of $2,000 for each Committee on which he serves (he presently serves
on the Audit and Compensation Committees), and (iv) an annual fee of $3,000 for
any committee which he chairs. The Company paid Dr. Penzias a total of $44,000
pursuant to this agreement during the year ended December 31, 1997.
DIRECTORS PLAN
The Directors Plan provides for the "formula" grant of options to directors
who are not officers or employees of the Company and authorizes the issuance of
up to 60,000 shares of Class A Common Stock and 250,000 shares of Class B Common
Stock. An additional 80,000 shares of Class A Common Stock will be reserved for
issuance under the Directors Plan following approval of the proposed amendments
to such plan. See "Adoption of Amendments to Directors Plan" below. The option
exercise price for options granted under the Directors Plan is 100% of the fair
market value of the underlying shares on the date of the grant of the options.
Under the Directors Plan, each director of the Company who is not eligible to
hold shares of Class B Common Stock is granted (to the extent there are
authorized shares available therefor) an initial option to purchase 10,000
shares of Class A Common Stock in connection with the Offering or on later
commencement of service and may thereafter be granted additional options to
purchase shares of Class A Common Stock upon authorization thereof by the Board
of Directors. Each Eligible Director who is eligible to hold shares of Class B
Common Stock is granted (to the extent there are authorized shares available
therefor) an initial option to purchase 35,000 shares of Class B Common Stock in
connection with the Offering or on later commencement of service, and an
additional option to purchase 22,500 shares of Class B Common Stock as of each
of the next four annual meetings of the stockholders of the Company if the
Eligible Director continues to be an Eligible Director.
On May 20, 1997, each of Dr. and Mrs. Singh received options to purchase
22,500 shares of Class A Common Stock pursuant to the Directors Plan at an
exercise price of $12.125, the fair market value on the date of grant. The
options granted to the Singhs have a term of five years and vested immediately
upon their grant. Also on May 20, 1997, Dr. Penzias received an option to
purchase 10,000 shares of Class A Common Stock pursuant to the Directors Plan at
an exercise price of $12.125 per share, the fair market value on the date of
grant. The options granted to Dr. Penzias vest in equal installments on each of
the first three anniversaries of the date of grant and are for a term of five
years. On May 20, 1997, Mr. Ein received an option to purchase 30,000 shares of
Class A Common Stock pursuant to the Directors Plan at an exercise price of
$12.125 per share, the fair market value on the date of grant. This option
vested immediately and is for a term of five years.
EMPLOYEE PLAN
The Employee Plan provides for the grant of options that are intended to
qualify as "incentive stock options" under Section 422 of the Internal Revenue
Code, to employees of the Company or any of its subsidiaries, as well as the
grant of non-qualifying options to employees and any other individuals whose
participation in the Employee Plan is determined to be in the best interest of
the Company. The Employee Plan authorizes the issuance of up to 3,224,000 shares
of Class A Common Stock pursuant to options granted under the Employee Plan. An
additional 1,501,000 shares of Class A Common Stock will be reserved for
issuance under the Employee Plan following approval of the proposed amendment to
such plan. See "Adoption of an Amendment to Employee Plan" below. The option
exercise price for incentive stock options granted under the Employee Plan may
not be less than 100% of the fair market value of the Class A Common Stock on
the date of grant of the option (or 110% in the case of an incentive stock
option granted to an optionee beneficially owning more than 10% of the
outstanding Class A Common Stock). The option exercise price for non-incentive
stock options granted under the Employee Plan may not be less than the par value
of the Class A Common Stock on the date of grant of the option. The maximum
option term is 10 years (or five years in the case of an incentive stock option
granted to an optionee beneficially owning more than 10% of the outstanding
Class A Common Stock). Options may be exercised at any time after grant, except
as otherwise provided in the particular option agreement. There is also a
$100,000 limit on the value of Class A Common Stock (determined at the time of
grant) covered by incentive stock options that first become exercisable by an
8
<PAGE> 12
optionee in any year. The maximum number of shares of Class A Common Stock
subject to options that can be awarded under the Employee Plan to any person is
1,000,000 shares.
On May 20, 1997, Mr. Ein also received an option to purchase 20,000 shares
of Class A Common Stock pursuant to the Employee Plan at an exercise price of
$12.125 per share. This option vested immediately and is for a term of five
years.
MANAGEMENT
The executive officers of the Company, and their respective ages as of
April 17, 1998, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Dr. Geoffrey S. Carroll............... 44 President and Chief Executive Officer
Richard Hozik......................... 47 Senior Vice President, Chief Financial
Officer and Treasurer
John Morris........................... 52 Group Vice President, Products and
Systems
Gerard L. Vincent..................... 43 Group Vice President, Services
Donald R. Rose........................ 42 Senior Vice President
Peter A. Deliso....................... 37 Vice President, Corporate Affairs,
General Counsel and Secretary
Stuart P. Lawson...................... 42 Vice President, Controller and
Assistant Secretary
</TABLE>
DR. GEOFFREY S. CARROLL. See "Information as to Nominees" above.
RICHARD HOZIK. Richard Hozik has been Senior Vice President and Chief
Financial Officer of the Company since November 1995 and Treasurer since January
1996. From October 1992 to October 1995, Mr. Hozik was employed by the J.E.
Robert Companies, a privately held real estate investment and management
company, where he held the position of Senior Vice President and Chief Financial
Officer. From April 1992 to September 1992, Mr. Hozik was the Managing Partner
of Hozik & Associates, a management consulting firm. From March 1982 to March
1992, Mr. Hozik was with GRC International, Inc. (formerly Flow General Inc.)
("GRC"), a publicly traded international technology-based products and services
company, where he served as Vice President, Treasurer and Chief Financial
Officer of GRC and President and Chief Executive Officer of its Biomedical
Group. From 1973 to 1982, Mr. Hozik was with the international public accounting
firm of Arthur Andersen LLP.
JOHN MORRIS. John Morris has been Group Vice President, Products and
Systems of the Company since June 1997. From 1992 to June 1997, Mr. Morris was
employed by COMSAT Corporation in a variety of positions, including Group Vice
President of the Wireless Products Division of COMSAT RSI, Inc. where he was in
charge of satellite network systems, cellular systems and wireless antennas, and
Chairman and Chief Executive Officer of Plexsys Corporation, a company partly
owned by COMSAT Corporation. From 1990 to 1992, Mr. Morris was a managing
director at British Aerospace Communications where he was responsible for
creating an international value added satellite services communications company.
From 1981 to 1990, Mr. Morris held a number of positions with British Telecom.
GERARD L. VINCENT. Gerard L. Vincent has been Group Vice President,
Services of the Company since July 1997. From August 1996 to July 1997, Mr.
Vincent was Senior Vice President, Engineering of the Company. From January 1995
to August 1996, Mr. Vincent was Vice President, Engineering of the Company, and
from December 1993 to January 1995, he was Director of Engineering of the
Company. Prior to joining the Company, Mr. Vincent was Director, Department of
Cellular Engineering of France Telecom, from December 1989 to December 1993.
9
<PAGE> 13
DONALD R. ROSE. Donald R. Rose has been Senior Vice President of the
Company since March 1998 and is responsible for handling special projects on
behalf of the Company's President and Chief Executive Officer. From July 1997 to
March 1998, Mr. Rose reduced his activities and responsibilities within the
Company to pursue personal interests. From August 1996 to July 1997, Mr. Rose
was the Senior Vice President, Software of the Company. From October 1990 until
August 1996, Mr. Rose was Senior Vice President, Engineering of the Company, and
from 1987 until October 1990, he was Vice President, Engineering of the Company.
Before joining the Company, Mr. Rose was Senior Project Engineer of Los Angeles
Cellular Telephone Co. and a Senior Engineer of Moffet, Larson & Johnson, P.C.,
a telecommunications consulting firm.
PETER A. DELISO. Peter A. Deliso has been the Company's General Counsel
since June 1994 and Vice President, Corporate Affairs, and Secretary since
January 1996. From late 1989 until January 1994, Mr. Deliso served as Corporate
Counsel for Mobile Telecommunication Technologies Corp. ("Mtel") and its various
domestic and international subsidiaries. Prior to his employment with Mtel, Mr.
Deliso was with the law firm of Garvey, Schubert & Barer specializing in
international, corporate and securities law.
STUART P. LAWSON. Stuart P. Lawson has been Vice President, Controller and
Assistant Secretary of the Company since July 1997. From March 1996 until July
1997, Mr. Lawson was Corporate Controller of the Company. From 1992 until 1996,
Mr. Lawson served as Chief Financial Officer of the Kramer Junction Company, a
provider of operations and maintenance, management and consulting services to
the solar-thermal industry. From 1981 until 1992, with the exception of the
period from the middle of 1987 to the end of 1988, Mr. Lawson was with the
international public accounting firm of Arthur Andersen LLP. From the middle of
1987 to the end of 1988, Mr. Lawson served as the Assistant Corporate Controller
of the Clark Construction Group.
10
<PAGE> 14
EXECUTIVE COMPENSATION
The following table summarizes the compensation paid to the Named Executive
Officers for the fiscal years ended December 31, 1996 and 1997.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION AWARDS
ANNUAL ----------------------------------------------
COMPENSATION(1) RESTRICTED SECURITIES
-------------------- STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS OPTIONS/SARS(#) COMPENSATION(2)
--------------------------- ---- --------- -------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
NAMED EXECUTIVE OFFICERS AS OF
DECEMBER 31, 1997:
Dr. Geoffrey S. Carroll, President
and Chief Executive Officer(3).... 1997 $ -- $ -- -- $ -- $ --
1996 -- -- -- -- --
Richard Hozik, Senior Vice
President, Chief Financial Officer
and
Treasurer......................... 1997 184,000 50,000 -- -- 2,000
1996 174,000 121,000 -- 93,000 2,000
Louis R. Olsen, Vice President, New
Business Ventures................. 1997 141,000 20,000 -- -- 5,000
1996 93,000 5,000 -- 38,750 3,000
Gerard L. Vincent, Senior Vice
President, Engineering............ 1997 192,000 60,000 -- -- 5,000
1996 175,000 34,000 -- 100,000 4,000
Frank F. Navarrete, Vice President,
Sales and Marketing............... 1997 165,000 55,000 -- -- 4,000
1996 157,000 40,000 -- 77,500 3,000
FORMER NAMED EXECUTIVE OFFICERS:
Piyush Sodha, President and Chief
Executive Officer(4).............. 1997 275,000 100,000 -- -- --
1996 241,000 309,000 -- 535,362 --
Donald R. Rose, Senior Vice
President(5)...................... 1997 195,000 -- -- -- 5,000
1996 166,000 771,000 -- 757,155 5,000
</TABLE>
- ---------------
(1) All amounts are rounded to the nearest $1,000. The amount of perquisites and
other personal benefits, securities or other property has been omitted
because the applicable amount of such compensation is less than $50,000 or
10% of the total annual salary and bonus reported for each Named Executive
Officer.
(2) Includes payments by the Company for life insurance (in all cases less than
$500 per individual) and contributions to the Company's 401(k) Plan.
(3) Dr. Carroll has served as the Company's President and Chief Executive
Officer since January 15, 1998. Dr. Carroll's employment agreement provides
for a base salary of $400,000, performance bonuses and options to purchase
up to 975,000 shares of Class A Common Stock. See "Employment Agreements"
below.
(4) Mr. Sodha resigned as the Company's President and Chief Executive Officer on
January 19, 1998.
(5) In July 1997, Mr. Rose temporarily reduced his activities and
responsibilities within the Company to pursue personal interests and as of
December 31, 1997 was not considered a Named Executive Officer of the
Company. In March 1998, Mr. Rose was appointed Senior Vice President of the
Company.
Option Grants. No Named Executive Officers received stock options during
the year ended December 31, 1997. There are presently 3,224,000 shares of Class
A Common Stock reserved for issuance under the Employee Plan. An additional
1,501,000 shares of Class A Common Stock will be reserved for issuance under the
Employee Plan following approval of the proposed amendment to such plan. See
"Adoption of an Amendment to Employee Plan" below.
11
<PAGE> 15
Option Exercises and Year-end Values. The following table provides
information regarding the value of all unexercised options held at December 31,
1997 by the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF
SHARES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
NUMBER OF DECEMBER 31, 1997 DECEMBER 31, 1997(1)
SHARES ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------------ ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
NAMED EXECUTIVE OFFICERS AS
OF DECEMBER 31, 1997:
Dr. Geoffrey S. Carroll.... -- $ -- -- -- $ -- $ --
Richard Hozik.............. -- -- 18,600 74,400 195,300 781,200
Louis R. Olsen............. -- -- 7,750 31,000 37,200 148,800
Gerard L. Vincent.......... -- -- 23,000 77,000 74,400 297,600
Frank F. Navarrete......... -- -- 15,500 62,000 74,400 297,600
FORMER NAMED EXECUTIVE
OFFICERS:
Piyush Sodha............... 75,000 1,050,000(2) 305,362 155,000 2,806,401 477,400
Donald R. Rose............. 250,000 3,639,415(3) 507,155 -- 5,325,128 --
</TABLE>
- ---------------
(1) Based on a per share price of $14.50 on December 31, 1997.
(2) Sale of 75,000 shares at $18.00 on September 2, 1997.
(3) Consists of the sale of 27,000 shares at $18.25 on August 20, 1997, sale of
30,660 shares on August 21, 1997 at $18.25, sale of 42,340 shares at $18.00
on September 2, 1997, sale of 100,000 shares at $18.75 on September 11, 1997
and sale of 50,000 shares at $19.00 on September 15, 1997.
EMPLOYMENT AGREEMENTS
Effective January 15, 1998, the Company entered into a five year employment
agreement with Dr. Geoffrey S. Carroll, the President and Chief Executive
Officer of the Company. Dr. Carroll's employment agreement provides for a
minimum salary of $400,000 per annum, reimbursement of certain expenses, annual
bonuses based on annual individual and objective company performance criteria to
be adopted by the Board of Directors, participation in the Company's benefit
plans and the grant of options to purchase an aggregate of 975,000 shares of
Class A Common Stock. The options granted to Dr. Carroll pursuant to his
employment agreement are comprised of options to purchase 450,000 shares of
Class Common Stock at an exercise price of $12.65 (the "First Options") which
will vest in 20% increments at the first through fifth anniversaries of the date
of grant, and (ii) options to purchase 525,000 shares of Class A Common Stock
divided into five equal series of 105,000 shares per series (the "Second
Options") with increasing exercise prices, with the first series at $18.84, the
second series at $21.85, the third series at $25.35, the fourth series at $29.40
and the fifth series at $34.10. The first series of the Second Options will vest
on the first anniversary date of the grant, the second will vest on the second
anniversary, the third will vest on the third anniversary, the fourth will vest
on the fourth anniversary and the fifth will vest on the fifth anniversary of
the date of grant. Each of the options that comprise the First and Second
Options have a term of ten years.
Dr. Carroll's employment agreement provides that the First and Second
Options will be subject to acceleration upon: (a) the sale of substantially all
the assets of the Company, (b) certain mergers of the Company where the Company
is not the surviving entity, or (c) certain third party acquisitions of the
beneficial ownership of 51% or more of the combined voting power of all classes
of stock of the Company. Dr. Carroll's options will also be subject to
additional vesting in connection with a termination of employment due to death,
disability, termination by the Company other than for "Cause" or termination by
Dr. Carroll for "Good Reason."
If the Company terminates Dr. Carroll's employment other than pursuant to a
termination for "Cause" or in the event Dr. Carroll terminates his employment
with "Good Reason", Dr. Carroll shall continue to receive, for a period of
twelve months commencing on the date of such termination, his full base salary.
In addition, if such termination occurs after the end of the first contract
year, the Company shall pay to Dr. Carroll an amount equal to the higher of the
bonuses, if any, paid in the prior two years, to be paid in a lump sum
12
<PAGE> 16
immediately following the termination of Dr. Carroll's employment. "Cause" is
defined as termination by the Company because (a) Dr. Carroll commits an act of
fraud, material dishonesty or theft against, or a felony involving, the Company,
(b) Dr. Carroll commits a crime involving moral turpitude, (c) Dr. Carroll has
compromised trade secrets or other proprietary information of the Company in
violation of the provisions of his employment agreement, (d) Dr. Carroll shall
breach in any material respect the terms of his employment agreement, (e) Dr.
Carroll has materially breached any noncompetition agreement with the Company or
any subsidiary to which he is a party, (f) Dr. Carroll has willfully failed or
refused to perform material assigned duties consistent with his position, or (g)
Dr. Carroll engaged in gross or willful misconduct that causes substantial and
material harm to the business and operations of the Company or a subsidiary, the
continuation of which will continue to substantially and materially harm the
business and operations of the Company or a subsidiary in the future. Each of
the provisions specified in (d), (e) and (f) above shall be subject to Dr.
Carroll having been provided written notice and 30 days to cure the breach,
failure or refusal. "Good Reason" under Dr. Carroll's employment agreement means
(i) a reduction in his base salary, (ii) a material reduction in his duties or
authority, Dr. Carroll's failure to be elected or re-elected as a director or as
President or Chief Executive Officer of the Company or its successor, or Dr.
Carroll's removal as a director, as President or as Chief Executive Officer of
the Company or its successor, unless such reduction, failure, or removal is for
Cause (as defined above) or is on account of Dr. Carroll's inability to
substantially perform his duties for an aggregate of one hundred twenty (120)
days within any consecutive twelve-month period due to a mental or physical
injury or illness, (iii) failure of the Compensation Committee to grant, or
stockholders to approve, the option grants provided in his employment agreement
(which approval will be deemed granted upon approval of the amendment to the
Employee Plan, see "Adoption of an Amendment to Employee Plan" below), or (iv)
the requirement, without Dr. Carroll's consent, to relocate outside of the
McLean, Virginia, Washington, D.C., or New York area(s).
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
On May 20, 1997, the Board adopted the following compensation policy
prepared by the Compensation Committee:
EXECUTIVE COMPENSATION POLICY
Policy Purpose
To facilitate the recruitment, retention and motivation of the President
and Chief Executive Officer, the Senior Vice Presidents, the Vice Presidents and
such other persons the determination of whose compensation the Board of
Directors shall determine (each of the foregoing, an "Executive") will be
covered by this policy (the "Executive Compensation Policy") in ways consistent
with the enhancement of shareholder value, service quality and employee
satisfaction.
Compensation Elements
Executive compensation includes four principal elements: (i) base salary;
(ii) employee benefits; (iii) annual incentive compensation; and (iv) equity
participation (the "Principal Elements").
Criteria for Determination of Executive Compensation
In determining each of the Principal Elements of each Executive's
compensation, as well as the overall compensation package thereof; the following
criteria shall be considered by the persons responsible for recommending or
approving such compensation (each a "Reviewer"): (i) the compensation awarded to
executives with comparable titles and responsibilities to those of such
Executive by companies in the wireless telecommunications industry (or, to the
extent information is not available, in comparable industries) whose revenues
and earnings are comparable to those of the Company (the "Comparable
Companies"), as reported by reliable independent sources; (ii) the results of
operations of the Company during the past year, on an absolute basis and
compared with the Company's targeted results for such year as well as with the
results of
13
<PAGE> 17
the Comparable Companies, as reported by reliable independent sources; (iii) the
performance of such Executive during the past year, on an absolute basis and as
compared with the performance targets set by the Company for such Executive for
such year and the performance of the other Executives of the Company during such
year and (iv) any other factor which the Reviewers determine to be relevant. The
weight to be given to each of the foregoing criteria shall be determined by the
Reviewers in the exercise of reasonable judgment in accordance with the purposes
of this Executive Compensation Policy and may vary from time to time or from
Executive to Executive.
Also at its May 20, 1997 meeting, the Board of Directors adopted
implementation guidelines with respect to the Executive Compensation Policy. In
particular, on an annual basis, the Compensation Committee reviews the
compensation paid during the past year to the President and Chief Executive
Officer of the Company and, taking into account each factor set forth in the
Executive Compensation Policy set forth above, submits to the Board of Directors
its recommendation regarding the compensation to be paid to the President and
Chief Executive Officer during the next year and following a review of such
recommendation, the Board of Directors will take such action regarding such
compensation, consistent with the Executive Compensation Policy as it deems
appropriate. With regard to the compensation paid to each Executive other than
the President and Chief Executive Officer, the Board empowered the President and
Chief Executive Officer to review, on an annual basis, the compensation paid to
each Executive during the past year and, taking account each factor set forth in
the Executive Compensation Policy, and to submit to the Board of Directors his
recommendations regarding the compensation to be paid to such persons during the
next year and following a review of such recommendations, the Compensation
Committee will take such action regarding such compensation, consistent with the
Executive Compensation Policy, as it deems appropriate.
Compensation arrangements during the Company's 1997 fiscal year were
determined in accordance with the Executive Compensation Policy and the May 20,
1997 Board of Directors' implementation guidelines.
Respectfully submitted,
COMPENSATION AND STOCK OPTION COMMITTEE
Mark D. Ein
Dr. Arno A. Penzias
Dr. Rajendra Singh
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Dr. Rajendra Singh, Chairperson of the Board of Directors and a member of
the Compensation Committee, is Chairman of the Members Committees of Telcom
Ventures and RF Investors. As of March 31, 1998, RF Investors owned
approximately 54.6% of the outstanding Common Stock, Telcom Ventures owned 99%
of the outstanding interests in RF Investors and Dr. Singh and members of his
family and certain family trusts beneficially owned 75% of the outstanding
interests in Telcom Ventures.
Corporate Opportunity
Concurrently with the Offering, the Company and Telcom Ventures, RF
Investors, Cherrywood, Dr. Rajendra Singh, Neera Singh, certain Singh family
trusts (the five immediately foregoing persons and entities being collectively
referred to as the "Singh Family Group") and the Carlyle Investors (all of the
foregoing, together with their respective successors or members of their
immediate family, the "Telcom Ventures Group") entered into an Intercompany
Agreement. Under the Intercompany Agreement, Telcom Ventures, RF Investors,
Cherrywood and the Singh Family Group have agreed that, until the earlier of (i)
the date on which the Telcom Ventures Group no longer possesses voting control
of the Company or (ii) the occurrence of certain termination events specified in
the 1993 Formation Agreement among the members of the Telcom Ventures Group (the
"Formation Agreement"), none of them will, directly or indirectly,
14
<PAGE> 18
participate or engage, other than through the Company, in any of the Company's
traditional business activities, defined as (i) the provision of cellular radio
frequency engineering and network design services to the wireless
telecommunications industry, (ii) the provision of program management services
or deployment or construction related consulting services to the wireless
telecommunications industry and (iii) the manufacture, sale, license,
distribution or servicing of any radio network planning software tools or drive
test field measurement and analysis equipment which are used by the Company in
connection with the Company services described in the foregoing clauses (i) or
(ii). The foregoing prohibition does not apply to services provided to third
parties in which any member of the Telcom Ventures Group holds or is considering
the acquisition of an investment where the provision of services is incidental
to such member's investment or to the ownership by any member of the Telcom
Ventures Group of up to 5% of the outstanding securities of any entity as long
as no member of the Telcom Ventures Group participates in the management of such
entity. Under the Intercompany Agreement, each of the Carlyle Investors (but not
its affiliates) has also agreed not to invest in any entity whose primary
business is to compete with the Company in its traditional business activities
(excluding program management) until the earlier of (i) the date on which such
Carlyle Investor no longer owns directly or indirectly, an interest in the
Company or (ii) the occurrence of certain termination events specified in the
Formation Agreement.
In consideration of the foregoing agreements of the Telcom Ventures Group,
the Company has agreed that, if any opportunity to invest in or acquire a third
party the value of which could reasonably be deemed to exceed $1 million (an
"Investment Opportunity") is presented to the Company that it wishes to refer to
a third party, the Company must give written notice to Telcom Ventures of such
Investment Opportunity. Telcom Ventures has five business days following its
receipt of the notice to inform the Company of its desire to pursue the
Investment Opportunity. If Telcom Ventures does not wish to pursue the
Investment Opportunity, or fails to provide timely notice to the Company of its
interest, the Company may refer the Investment Opportunity to any third party.
Advances To and From Telcom Ventures and Related Parties
Immediately following the Offering, the Company made a loan of $3.5 million
to Telcom Ventures from proceeds of the Offering to assist Telcom Ventures in
paying certain taxes due in connection with the MCI Note Assumption (as defined
below). The loan is repayable over five years, with equal annual principal
payments over the term of the loan. Interest accrues at the rate of LIBOR plus
1.75% and is payable annually. The loan constitutes senior indebtedness of
Telcom Ventures. Upon the sale by Telcom Ventures or any of its affiliates
(defined as each entity controlling, controlled by or under common control with,
Telcom Ventures, each natural person that controls Telcom Ventures and each
member of Telcom Ventures as of the date of the loan) of shares of Common Stock
resulting in Telcom Ventures and such affiliates, in the aggregate, owning less
than 25% of the outstanding Common Stock, the Company may declare the loan to be
due and payable. In November 1997, the Company received approximately $1.0
million from Telcom Ventures representing payment of $0.7 million principal and
approximately $0.3 million interest under the terms of this note.
Registration Rights
Concurrently with the Offering, the Company, RF Investors and MCI entered
into a Registration Rights Agreement relating to the Class A Common Stock
issuable upon conversion of Class B Common Stock or upon conversion of the
outstanding indebtedness of the Company to MCI. Under the Registration Rights
Agreement, RF Investors and MCI have certain "demand" rights to require the
Company to register their Common Stock for sale and may register shares on a
"piggyback" basis in connection with most registered public offerings of
securities of the Company.
Provision of Services and Products to Telcom Ventures and Parties Related
Thereto
The Company provides engineering services and software products to Telcom
Ventures and various other companies owned, in part, by Telcom Ventures or its
members. Revenues earned during 1996 and 1997 for such services and products
were approximately $2.0 million and $1.5 million, respectively. Trade accounts
15
<PAGE> 19
receivable from these related parties were $819,000 at December 31, 1996 and
$811,000 at December 31, 1997.
Concurrently with the Offering, the Company and Telcom Ventures entered
into an Overhead and Administrative Services Agreement. Pursuant to the Overhead
and Administrative Services Agreement, certain management personnel and other
employees of the Company provide certain administrative services, principally
related to human resource management functions and, until the first quarter of
1997, to administration of accounts payable and accounts receivable systems and
provisions of general office support services, to Telcom Ventures and, until the
first quarter of 1997, Telcom Ventures subleased office space from the Company.
Telcom Ventures is obligated to pay the Company a monthly fee for such
administrative services and office space based on a reasonable estimate of the
Company's cost of providing same. While this agreement is not the result of
arm's length negotiations, it is designed to reimburse the Company for its costs
in providing such services (including costs of personnel), and the Company
believes that the terms of such agreements are reasonable. Telcom Ventures paid
the Company approximately $115,000 in January 1997 and approximately $85,000 in
March 1998 pursuant to the Overhead and Administrative Services Agreement.
COMPARATIVE STOCK PERFORMANCE
The following chart sets forth comparative information regarding the
Company's cumulative stockholder return on its Class A Common Stock since its
initial public offering completed in September 1996. Total stockholder return is
measured by dividing total dividends (assuming dividend reinvestment) plus share
price change for a period by the share price at the beginning of the measurement
period. The Company's cumulative stockholder return based on an investment of
$100 at September 25, 1996 when the Company's Class A Common Stock was first
traded on the Nasdaq National Market at its closing price of $20.25 is compared
to the cumulative total return of the Nasdaq Market Index and an index comprised
of publicly traded companies which are principally in the consulting and/or
telecommunications products and services business (the "Companies") during that
same period. As of December 31, 1997, the Companies that constituted the peer
group consisted of: Computer Sciences Corporation, Alternative Resources
Corporation, American Management Systems, Incorporated, Computer Horizons Corp.,
Technology Solutions Company, Ciber, Inc., Allen Telecom Inc. and Salient 3
Communications Inc.
16
<PAGE> 20
COMPARISON OF 15 MONTH CUMULATIVE TOTAL RETURN*
AMONG LCC INTERNATIONAL, INC., THE NASDAQ STOCK MARKET -- US INDEX AND A PEER
GROUP
<TABLE>
<CAPTION>
NASDAQ
LCC STOCK
MEASUREMENT PERIOD INTERNATIONAL, MARKET
(FISCAL YEAR COVERED) INC. PEER GROUP (U.S.)
<S> <C> <C> <C>
9/25/96 100.00 100.00 100.00
10/96 73.13 100.36 99.08
12/96 92.50 105.66 105.11
2/97 48.75 85.93 106.35
4/97 51.25 87.40 102.52
6/97 78.75 101.10 116.89
8/97 90.00 109.23 129.85
10/97 93.75 104.08 130.38
12/97 72.50 119.31 128.98
</TABLE>
* $100 invested on 9/25/96 in stock or index -- including reinvestment of
dividends. Fiscal year ending December 31.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following is a summary of certain transactions and relationships among
the Company and its associated entities, and among the directors, executive
officers and stockholders of the Company and its associated entities. For a
description of certain other transactions, see "Compensation Committee
Interlocks."
The Merger
Pursuant to the Merger, the Company is required to indemnify Telcom
Ventures, RF Investors, Cherrywood, the Carlyle Investors and TC Group against
any liability for obligations and liabilities associated with the Limited
Liability Company's operations.
Carlyle Option Designee Stock Options
The Company has reserved 85,000 shares of Class A Common Stock (subject to
anti-dilution adjustments in the event of a stock split, recapitalization or
similar transaction) for issuance pursuant to options to be granted to a
designee of the Carlyle Investors (the "Carlyle Option Designee Stock Options").
The option exercise price for the Carlyle Option Designee Stock Options will be
100% of the fair market value of the Class A Common Stock on the date of grant
of the option. TC Group was granted an initial option to purchase 25,000 shares
of Class A Common Stock in connection with the Offering. A TC Group designee was
granted a further option to purchase 15,000 shares of Class A Common Stock on
September 24, 1997 at an exercise price of $20.125. The September 24, 1997
options vested immediately and are for a term of five years. TC Group or one or
more other designees of the Carlyle Investors will be granted an additional
option to
17
<PAGE> 21
purchase 15,000 shares of Class A Common Stock on each of September 24, 1998,
1999 and 2000. Options granted will vest immediately. The options will expire no
later than the fifth anniversary of the date of grant.
The Exchangeable Notes, MCI Note Assumption, MCI Conversion
In June 1994 the Limited Liability Company and Telcom Ventures entered into
a Note Purchase Agreement with a then unrelated third party, MCI, which provided
for the issuance of a $20 million subordinated note by the Limited Liability
Company (the "LCC Note") and of a $30 million subordinated note by Telcom
Ventures (the "Telcom Ventures Note") to MCI in return for cash in such amounts.
The LCC Note and the Telcom Ventures Note (collectively, the "Exchangeable
Notes") are exchangeable, at certain times, consisting of 45 day periods
commencing in June (at the option of MCI) and August (at the option of the
Company) of 1997, 1998, and 1999, into 2,841,099 shares of Class A Common Stock.
The Exchangeable Notes are both due June 28, 2000. The Exchangeable Notes
each bear interest at a rate equal to 4.4% per annum, payable semiannually.
Immediately prior to the Merger, the Telcom Ventures Note was assumed by the
Limited Liability Company (the "MCI Note Assumption"), and the $30 million
principal repayment obligation and interest thereon became the sole obligation
of the Limited Liability Company and, following the Merger, the sole obligation
of the Company.
Since January 1, 1997, the Company has paid MCI approximately $4.9 million
in interest under the Exchangeable Notes. The Company presently intends to
exercise its option in August 1998 to cause the Exchangeable Notes to be
converted into 2,841,099 shares Class A Common Stock.
Certain Relationships Between Cherrywood and the Carlyle Investors Affecting
the Company
The RF Investors and Telcom Ventures limited liability company agreements
provide that, for as long as the Carlyle Investors collectively own at least 5%
of the total membership interests of Telcom Ventures, Telcom Ventures shall vote
any and all shares of the Company held by it, and shall cause RF Investors to
vote any and all shares held by it, from time to time: (i) to elect as directors
of the Company up to two persons recommended by the Carlyle Investors and (ii)
not take any of the following actions without the consent of the Carlyle
Investors: (a) approve any amendment to the Certificate of Incorporation or the
Bylaws of the Company; (b) approve the incurrence by the Company of any debt (or
the granting of security relating to the incurrence of debt) if as a result of
such incurrence, the debt to equity ratio of the Company exceeds 6:1, or, if as
a result of such debt incurrence, the total outstanding debt of the Company
exceeds $50 million plus or minus, as the case may be, the cumulative net income
or net losses of the Company after January 1994; (c) approve any new affiliated
party transactions in excess of $150,000 or of modifications to existing
transactions, subject to certain limited exceptions; (d) approve appointment of
independent accountants of the Company other than one of the "big six"
accounting firms; or (e) approve certain events relating to bankruptcy or
insolvency of the Company.
The RF Investors and Telcom Ventures limited liability company agreements
provide for various rights of the Carlyle Investors to cause the distribution to
the Carlyle Investors of Common Stock held by RF Investors. Following the third
anniversary of the closing of the Offering, the Carlyle Investors will have the
right to cause the distribution to the Carlyle Investors (by RF Investors and
then Telcom Ventures), of up to the Carlyle Investors' indirect proportionate
interest in the shares of Common Stock then held by RF Investors which is in
excess of 10% of the Common Stock then outstanding (treating Class A Common
Stock and Class B Common Stock as a single class of Common Stock for this
purpose). The Carlyle Investors' initial indirect proportionate interest in RF
Investors is 25%, which interest will be recalculated following any
non-proportional distribution to the Carlyle Investors. Following the fifth
anniversary of the closing of the Offering, the Carlyle Investors will have the
right to cause the distribution to the Carlyle Investors (by RF Investors and
then Telcom Ventures), of up to the full amount of the Carlyle Investors' then
indirect proportionate interest in the shares of Common Stock, so long as the
Common Stock remaining held by RF Investors would leave RF Investors with at
least 51% of the voting power of the Common Stock then outstanding. Upon the
first distribution to the Carlyle Investors, the Carlyle Investors will have the
right to exercise one of the three rights held by RF Investors to demand
registration of shares of Common Stock under
18
<PAGE> 22
the Securities Act of 1933. The ability of the Carlyle Investors to require
distributions of Class A Common Stock or demand a registration thereof would be
subject to a determination by an investment banker reasonably acceptable to RF
Investors and the Carlyle Investors that such action would not materially
adversely impact the market for the Common Stock.
COMPLIANCE WITH SECTION 16 OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers, directors and certain
beneficial holders of common stock to file reports about their ownership of the
Company's Class A Common Stock. Based solely on its review of the copies of such
reports furnished to the Company by its directors and officers during and with
respect to the year 1997, the Company is aware only of the following report
submitted on an untimely basis. A Form 4 for Dr. Arno A. Penzias, a Director of
the Company, was filed late with respect to one transaction initiated by a
family member.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(PROPOSAL 2)
The Board of Directors has appointed KPMG Peat Marwick LLP ("KPMG") as the
Company's independent auditors for the fiscal year ending December 31, 1998,
subject to ratification by stockholders at the Annual Meeting. Representatives
of KPMG will be present at the Annual Meeting and will have the opportunity to
make a statement if they so desire and to be available to respond to appropriate
questions. Unless otherwise indicated, properly executed proxies will be voted
in favor of ratifying the appointment of KPMG to audit the financial statements
of the Company for the fiscal year ending December 31, 1998.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
ADOPTION OF AN AMENDMENT TO EMPLOYEE PLAN
(PROPOSAL 3)
On January 15, and April 16, 1998, the Board of Directors approved and is
presently proposing for stockholder approval an amendment to the Employee Plan.
The Employee Plan was originally adopted by the Board of Directors on July 23,
1996 and approved by the Company's stockholders on August 26, 1996. Pursuant to
the Employee Plan, eligible persons receive grants of options. The Employee Plan
provides for the grant of both "incentive stock options," as defined in the
Internal Revenue Code, and nonqualified stock options. See "Election of
Directors -- Employee Plan" above for more detail on the Employee Plan.
The affirmative vote of a majority of the shares of Common Stock present or
represented by proxy at the Annual Meeting will be required to approve the
amendment to the Employee Plan. Unless otherwise indicated, properly executed
proxies will be voted in favor of Proposal 3 to approve the amendment to the
Employee Plan.
PURPOSE AND EFFECT OF THE PROPOSED AMENDMENT TO THE EMPLOYEE PLAN
The securities underlying the Employee Plan are shares of Class A Common
Stock. Pursuant to the Employee Plan, as amended, the maximum number of shares
of Class A Common Stock that may be issued upon exercise or payment will not
exceed 4,725,000 shares, an increase of 1,501,000 shares. The market value of
the 4,725,000 total shares of Class A Common Stock authorized under the Employee
Plan as of March 16, 1998 assuming approval of the amendment was $82,096,875
(based on a March 16, 1998 closing price on the Nasdaq National Market of
$17.375 per share of Class A Common Stock). The Company's Board of Directors and
its Compensation Committee believes that this increase is important to permit
the Company to continue to attract and retain key employees and other
individuals to the Company or any of its subsidiaries. A
19
<PAGE> 23
copy of the proposed amendment to the Employee Plan is attached hereto as
Attachment A and is incorporated herein by reference.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 3.
ADOPTION OF AMENDMENTS TO DIRECTORS PLAN
(PROPOSAL 4)
On April 16, 1998, the Board of Directors approved and is presently
proposing for stockholder approval amendments to the Directors Plan. The
Directors Plan was originally adopted by the Board of Directors on July 23, 1996
and approved by the Company's stockholders on August 26, 1996. Pursuant to the
Directors Plan, eligible persons receive grants of options. The Directors Plan
provides for the "formula" grant of options to directors who are not officers or
employees of the Company. See "Election of Directors -- Directors Plan" above
for more detail on the Directors Plan.
The affirmative vote of a majority of the shares of Common Stock present or
represented by proxy at the Annual Meeting will be required to approve the
amendments to the Directors Plan. Unless otherwise indicated, properly executed
proxies will be voted in favor of Proposal 4 to approve amendments to the
Directors Plan.
PURPOSE AND EFFECT OF THE PROPOSED AMENDMENTS TO THE DIRECTORS PLAN
Increase in Authorized Shares. The securities underlying the Directors
Plan are shares of Class A Common Stock and Class B Common Stock. Pursuant to
the Directors Plan, as amended, the maximum number of shares of Class A Common
Stock and Class B Common Stock that may be issued upon exercise or payment will
not exceed 140,000 shares and 250,000 shares, respectively, an increase of
80,000 shares in the case of the Class A Common Stock. The market value of the
140,000 total shares of Class A Common Stock authorized under the Directors Plan
as of March 16, 1998 assuming approval of the amendments was $2,432,500 (based
on a March 16, 1998 closing price on the Nasdaq National Market of $17.375 per
share of Class A Common Stock). The Company's Board of Directors and its
Compensation Committee believes that this increase is important to permit the
Company to continue to attract and retain the best possible members of the Board
of Directors and to provide additional incentives to those directors to promote
the success of the Company.
Removal of Section 19.4. Section 19.4 of the Directors Plan presently
provides that the plan may not be amended more than once in any six-month period
other than to comport with changes in the Internal Revenue Code, the Employment
Retirement Security Act of 1974, or the rules promulgated thereunder. When the
Directors Plan was originally adopted this provision was necessary in order for
the plan to comply with Section 16(a) of the Exchange Act. Recent changes in
Section 16(a) of the Exchange Act, however, provide that a provision prohibiting
two or more amendments to a stock option plan during any six-month period are no
longer required. The removal of Section 19.4 of the Directors Plan in this
regard would permit greater flexibility in administration of the Directors Plan
by providing the Board of Directors with the ability to amend the plan as it
deems advisable, subject in certain cases to the approval of the Company's
stockholders.
A copy of the proposed amendment to the Directors Plan is attached hereto
as Attachment B and is incorporated herein by reference.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 4.
20
<PAGE> 24
DATE OF SUBMISSION OF STOCKHOLDER PROPOSALS
TO BE INCLUDED IN PROXY MATERIALS
Any proposal or proposal intended to be presented by any stockholder at the
1999 Annual Meeting of Stockholders must be received by the Company by December
18, 1998 to be considered for inclusion in the Company's proxy statement and
form of proxy relating to that meeting. Nothing in this paragraph shall be
deemed to require the Company to include in the proxy statement and the proxy
relating to the 1999 Annual Meeting of Stockholders any stockholder proposal
that does not meet all of the requirements for such inclusion in effect at that
time.
OTHER BUSINESS TO BE TRANSACTED
As of the date of this proxy statement, the Board of Directors knows of no
other business which may come before the Annual Meeting. If any other business
is properly brought before the Annual Meeting, it is the intention of the proxy
holders to vote or act in accordance with their best judgment with respect to
such matters.
By Order of the Board of Directors
/s/ PETER A. DELISO
PETER A. DELISO
Secretary
McLean, Virginia
April 17, 1998
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1997 ACCOMPANIES THIS PROXY STATEMENT.
21
<PAGE> 25
ATTACHMENT A
AMENDMENT
TO
LCC INTERNATIONAL, INC. 1996 EMPLOYEE STOCK OPTION PLAN
Effective April 16, 1998, the LCC International, Inc. 1996 Employee Stock
Option Plan (the "Plan") is amended as follows:
1. The reference to "3,224,000" in the second sentence of Section 4 of the
Plan is replaced by "4,725,000".
This Amendment No. 1 to the LCC International, Inc. 1996 Employee Stock
Option Plan was duly approved by the Board of Directors of the Corporation on
April 16, 1998.
--------------------
Secretary
A-1
<PAGE> 26
ATTACHMENT B
AMENDMENT
TO
LCC INTERNATIONAL, INC. DIRECTORS STOCK OPTION PLAN
Effective April 16, 1998, the LCC International, Inc. Directors Stock
Option Plan (the "Plan") is amended as follows:
1. The reference to "60,000" in the first sentence of Section 4 of the Plan
is replaced by "140,000".
2. Section 19.4 of the Plan is deleted in its entirety.
This Amendment No. 1 to the LCC International, Inc. Directors Stock Option
Plan was duly approved by the Board of Directors of the Corporation on April 16,
1998.
--------------------
Secretary
B-1
<PAGE> 27
REVOCABLE PROXY
LCC INTERNATIONAL, INC.
ANNUAL MEETING OF STOCKHOLDERS MAY 19, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned stockholder hereby appoints Dr. Geoffrey S. Carroll and Mr.
Richard Hozik, or either of them, attorneys and proxies of the undersigned, with
full power of substitution and with authority in each of them to act in the
absence of the other, to vote and act for the undersigned at the Annual Meeting
of Stockholders of LCC International, Inc. to be held on Tuesday, May 19, 1998
at 10:00 a.m. (eastern daylight time) at the Sheraton Premiere at Tysons Corner,
8661 Leesburg Pike, Vienna, Virginia 22182, and at any adjournments thereof, in
respect of all shares of the Common Stock, par value $.01 per share, of the
Company which the undersigned may be entitled to vote, on the following matters:
The undersigned hereby acknowledges prior receipt of a copy of the Notice of
Annual Meeting of Stockholders and proxy statement dated April 17, 1998 and the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997, and hereby revokes any proxy or proxies heretofore given. This Proxy may
be revoked at any time before it is voted by delivering to the Secretary of the
Company either a written revocation of proxy or a duly executed proxy bearing a
later date, or by appearing at the Annual Meeting and voting in person.
(CONTINUED AND TO BE DATED AND SIGNED ON REVERSE SIDE.)
<PAGE> 28
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
LCC INTERNATIONAL, INC.
MAY 19, 1998
/ PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED /
<TABLE>
<CAPTION>
[X] PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE.
FOR all nominees
listed at right (except
as marked to the WITHHOLD AUTHORITY
contrary below) to vote for all nominees
listed at right
<S> <C> <C> <C> <C>
PROPOSAL ONE:
Election of the [ ] [ ] Nominees: Dr. Geoffrey S. Carroll
Board of Directors Mark D. Ein
(five persons): Dr. Arno A. Penzias
Dr. Rajendra Singh
Neera Singh
(INSTRUCTION: To withhold authority to vote for an
individual nominee, cross out that nominee's name at right.)
</TABLE>
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
PROPOSAL TWO: Proposal to ratify the appointment of [ ] [ ] [ ]
KPMG Peat Marwick LLP as the independent
auditors of the Company for the fiscal
year ending December 31, 1997;
PROPOSAL THREE: Approval of an amendment to the Company's [ ] [ ] [ ]
1996 Employment Stock Option Plan to increase the
number of shares authorized to be issued
pursuant to options granted under such plan
PROPOSAL FOUR: Approval of amendments to the Company's [ ] [ ] [ ]
1996 Directors Stock Option Plan to increase
the number of shares authorized to be issued
pursuant to options granted under such plan
and to delete a certain section thereof.
</TABLE>
In their discretion, on any other matters that may properly come before the
Annual Meeting, or any adjournments thereof, in accordance with the
recommendations of a majority of the Board of Directors.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. HOWEVER, IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE NOMINEES IN PROPOSAL 1, AND FOR PROPOSALS 2 THROUGH 4.
If you receive more than one proxy card, please sign and return all
cards in the accompanying envelope.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY TO ENSURE A QUORUM
AT THE MEETING. IT IS IMPORTANT WHETHER YOU OWN A FEW OR MANY SHARES. DELAY IN
RETURNING YOUR PROXY MAY SUBJECT THE COMPANY TO ADDITIONAL EXPENSE.
I PLAN TO ATTEND THE MAY 19, 1998 ANNUAL STOCKHOLDERS MEETING [ ]
<TABLE>
<S> <C>
Date: , 1998
- ----------------------------------------------------- -----------
SIGNATURE OF STOCKHOLDER OR AUTHORIZED REPRESENTATIVE
</TABLE>
NOTE: Please date and sign exactly as name appears hereon. Each executor,
administrator, trustee, guardian, attorney-in-fact and other fiduciary
should sign and indicate his or her full title. In the case of stock
ownership in the name of two or more persons, both persons should sign.
