<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
Cellular Communications International, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Lauren Hochman Blair, Esq.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
------------------------------------------------------------------------
(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
[LOGO OF CELLULAR COMMUNICATIONS INTERNATIONAL, INC.]
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
------------------------
PROXY STATEMENT AND
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 3, 1997
---------------------------
The Annual Meeting of Stockholders of Cellular Communications
International, Inc. (the "Company") will be held at 11:30 a.m. local time, on
Tuesday, June 3, 1997, at The Helmsley Park Lane Hotel, The Ballroom Suite,
located at 36 Central Park South, New York, New York 10019, for the following
purposes:
1. To elect two directors to the Board of Directors.
2. To ratify the appointment by the Board of Directors of Ernst &
Young LLP as independent auditors for the year ending December 31,
1997.
3. To approve an amendment to the Company's Employee Stock Option
Plan.
4. To transact any other business that may properly be brought before
the meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on April 14, 1997,
as the record date for the determination of the stockholders entitled to notice
of and to vote at the meeting. Accordingly, only stockholders of record at the
close of business on that date will be entitled to vote at the meeting. The
transfer books will not be closed. A list of the stockholders entitled to vote
at the meeting will be located at the Company's principal executive offices, 110
East 59th Street, New York, New York 10022, at least ten days prior to the
meeting and will also be available for inspection at the meeting.
A copy of the Annual Report for 1996 is being mailed together with this
proxy material.
It is important that your shares be represented at the meeting. Regardless
of whether you plan to attend the meeting, please execute the enclosed proxy and
return it promptly in the accompanying postage-paid envelope. Submitting this
executed proxy will not preclude your right to revoke it and to vote in person
at the meeting.
By order of the Board of Directors,
RICHARD J. LUBASCH
Secretary
New York, New York
April 28, 1997
<PAGE> 3
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
110 EAST 59TH STREET
NEW YORK, NEW YORK 10022
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 3, 1997
------------------------
PROXY STATEMENT
------------------------
This proxy statement sets forth certain information with respect to the
accompanying proxy proposed to be used at the Annual Meeting of Stockholders of
Cellular Communications International, Inc. (the "Company"), or at any
adjournment or postponement thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting. The Board of Directors of the Company
solicits this proxy and urges you to sign the proxy, fill in the date, and
return it immediately to the Secretary of the Company. The prompt cooperation of
the stockholders is necessary in order to ensure a quorum and to avoid expenses
and delay.
Holders of record of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), at the close of business on April 14, 1997, will be
entitled to vote at the meeting. At the close of business on April 14, 1997,
10,712,241 shares of Common Stock were outstanding and entitled to vote at the
meeting. Each share of Common Stock is entitled to one vote.
The proxy is revocable on written instructions, including a subsequently
received proxy, signed in the same manner as the proxy, and received by the
Secretary of the Company at any time at or before the balloting on the matter
with respect to which such proxy is to be exercised. If you attend the meeting
you may, if you wish, revoke your proxy by voting in person. This proxy
statement and the accompanying proxy materials are being mailed to stockholders
on or about April 28, 1997.
The meeting will be held at 11:30 a.m. local time, on Tuesday, June 3,
1997, at The Helmsley Park Lane Hotel, The Ballroom Suite, located at 36 Central
Park South, New York, New York 10019.
All expenses of soliciting proxies, including clerical work, printing and
postage, will be paid by the Company. Proxies may be solicited personally, or by
mail, telephone or facsimile, by current and former directors, officers and
other employees of the Company, but the Company will not pay any compensation
for such solicitations. In addition, the Company has agreed to pay D.F. King &
Co., Inc. a fee of $4,000, plus reasonable expenses, for proxy solicitation
services. The Company will also reimburse brokers and other persons holding
shares in their names or in the names of nominees for their expenses for sending
material to principals and obtaining their proxies.
<PAGE> 4
SECURITY OWNERSHIP OF PRINCIPAL
STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock, as of April 10, 1997, by (i) each executive
officer and director of the Company, (ii) all directors and executive officers
as a group and (iii) stockholders holding 5% or more of the Company's Common
Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
-------------------------------------------------
PRESENTLY
EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL COMMON EXERCISABLE
STOCKHOLDERS STOCK OPTIONS (1) TOTAL PERCENT (2)
- ----------------------------------------------- ------- --------- --------- ----------
<S> <C> <C> <C> <C>
William B. Ginsberg(3)......................... 239,831 366,282 606,113 5.47%
J. Barclay Knapp............................... 95,656 176,519 272,175 2.50
Thomas B. Tesluk............................... 1,550 156,000 157,550 1.45
Richard J. Lubasch(4).......................... 32,189 59,023 91,212 *
Leigh Costikyan Wood........................... 782 66,773 67,555 *
Gregg Gorelick................................. 29,355 34,585 63,940 *
Stanton N. Williams............................ 9,049 73,251 82,300 *
Ted H. McCourtney(5)........................... 12,426 28,888 41,314 *
Del Mintz(6)................................... 246,450 28,888 275,338 2.56
Sidney R. Knafel(7)............................ 172,101 28,888 200,989 1.87
Alan J. Patricof(8)............................ 14,132 28,888 43,020 *
Warren Potash.................................. 63 28,888 28,951 *
All directors and officers as a group (12 in
number)...................................... 853,584 1,076,873 1,930,457 16.37
West Highland Capital, Inc.(9)................. 725,000 -- -- 6.77
Estero Partners, LLC(9)........................ 601,635 -- -- 5.62
Lang H. Gerhard(9)............................. 601,635 -- -- 5.62
West Highland Partners, L.P.(9)................ 500,325 -- -- 4.67
Buttonwood Partners, L.P.(9)................... 101,310 -- -- 0.95
300 Drake's Landing Road
Greenbrae, CA 94904
Massachusetts Financial Services Company(10)... 910,800 -- -- 8.50
500 Boylston Street
Boston, MA 02116
HBK Investments L.P.(11)....................... 281,900 -- -- 2.63
HBK Main Street Investments L.P. (11).......... 282,000 -- -- 2.63
777 Main Street, Suite 2750
Fort Worth, TX 76102
</TABLE>
- ---------------
* Represents less than one percent.
(1) Includes shares of Common Stock purchasable upon the exercise of options
which are currently exercisable or become so in the next 60 days
("Presently Exercisable Options").
(2) Includes Common Stock and Presently Exercisable Options.
(3) Includes 14,500 shares of Common Stock owned by Mr. Ginsberg's wife, as to
which shares Mr. Ginsberg disclaims beneficial ownership.
(4) Includes 125 shares of Common Stock owned by Mr. Lubasch as custodian for
his child, as to which shares Mr. Lubasch disclaims beneficial ownership.
(5) Includes 624 shares of Common Stock held by trusts for the benefit of Mr.
McCourtney's children, as to which shares Mr. McCourtney disclaims
beneficial ownership.
(6) Includes 13,827 shares of Common Stock owned by Mr. Mintz's children or by
Mr. Mintz's children as trustees for their children, 29 shares owned by Mr.
Mintz's wife and 15,251 shares which were purchased by CBDM, Inc., a
subchapter "S" Corporation that is owned by the children and
2
<PAGE> 5
grandchildren of Mr. Mintz. Mr. Mintz acts in an advisory capacity to the
shareholders of CBDM, Inc. Mr. Mintz disclaims beneficial ownership of all
of the shares referenced in this note.
(7) Includes 53,541 shares of Common Stock owned by a trust account for the
benefit of a child of Mr. Knafel, as to which shares Mr. Knafel disclaims
beneficial ownership. An additional 53,541 shares are owned by an adult
child of Mr. Knafel, as to which shares Mr. Knafel disclaims beneficial
ownership.
(8) Includes 78 shares of Common Stock owned by Mr. Patricof's wife, 303 shares
owned by, or in trust for the benefit of, Mr. Patricof's children as to
which Mr. Patricof disclaims beneficial ownership.
(9) Based solely upon a Form 13-D, dated June 12, 1996 filed by West Highland
Capital, Inc., Estero Partners, LLC, Lang H. Gerhard, West Highland
Partners, L.P. and Buttonwood Partners, L.P. with the Securities and
Exchange Commission (the "SEC") with respect to shared voting and
dispositive power over an aggregate of 725,000 shares of Common Stock.
(10) Based solely upon a Form 13-G, dated February 12, 1997, filed with the SEC
by Massachusetts Financial Services Company.
(11) Based solely upon a Form 13-D, dated March 14, 1997, filed with the SEC by
HBK Investments L.P. with respect to an aggregate of 563,900 shares.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires that the Company's directors and executive officers,
and persons who own more than ten percent of a registered class of the Company's
equity securities file with the SEC, and with each exchange on which the Common
Stock trades, initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of the Company. Officers, directors
and greater than ten percent shareholders are required by the SEC's regulation
to furnish the Company with copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1996, all
Section 16(a) filing requirements applicable to its officers and directors were
complied with. The Company is not aware of any greater than ten percent
beneficial owners.
ELECTION OF DIRECTORS
(ITEM 1)
ELECTION OF DIRECTORS
Pursuant to the Company's Restated Certificate of Incorporation, which
provides for a classified Board of Directors, the Board of Directors consists of
three classes of directors with overlapping three year terms. One class of
directors is to be elected each year with terms expiring on the third succeeding
annual meeting after such election. The terms of two directors expire this year.
Accordingly, at the meeting, two directors will be elected to serve for a three
year term and until their successors shall have been elected and qualified.
Unless otherwise indicated on any proxy, the proxy holders intend to vote the
shares it represents for the nominees whose biographical sketches appear in the
section immediately following. The nominees are now serving as directors of the
Company and were previously elected by the Company's stockholders. A director,
whose term would have expired in 1996, resigned in April 1994. As a result,
there has been one vacancy on the Board of Directors. In addition, Mr. Ted H.
McCourtney, who has been a member of the Board of Directors from and prior to
the Distribution (as defined below), has informed the Board of Directors that he
intends to resign from the Board on June 3, 1997 so as to make his portfolio of
directorships more manageable. As a result of Mr. McCourtney's resignation there
will be a second vacancy on the Board of Directors. The proxies cannot be voted
for a greater number of persons than the number of nominees named.
3
<PAGE> 6
The election to the Board of Directors of each of the nominees identified
in this Proxy Statement will require the affirmative vote of the holders of a
plurality of the shares of Common Stock present in person or represented by
proxy at the annual meeting and entitled to vote. In tabulating the vote,
abstentions and broker non-votes will be disregarded and have no effect on the
outcome of the vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR THE ELECTION TO THE BOARD OF DIRECTORS
OF EACH OF THE NOMINEES IDENTIFIED FOR REELECTION
The votes applicable to the shares represented by proxies in the
accompanying form will be cast in favor of the two nominees below. While it is
not anticipated that any of the nominees will be unable to serve, if any should
be unable to serve, the proxy holders reserve the right to substitute any other
person.
The nominees and continuing directors of the Company were elected by the
Company's stockholders in 1994, 1995 and 1996, as applicable. The continuing
directors will serve for the terms indicated and until their successors are duly
elected and qualified.
PRESENT DIRECTORS WHO ARE NOMINEES FOR REELECTION
<TABLE>
<CAPTION>
POSITION
NAME AGE (PROPOSED TERM AS DIRECTOR)
---------------------------------- --- ---------------------------------
<S> <C> <C>
Alan J. Patricof.................. 62 Director (2000)
Warren Potash..................... 65 Director (2000)
</TABLE>
CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING
<TABLE>
<CAPTION>
POSITION
NAME AGE (TERM AS DIRECTOR)
---------------------------------- --- ---------------------------------
<S> <C> <C>
Sidney R. Knafel.................. 66 Director (1998)
Del Mintz......................... 69 Director (1998)
William B. Ginsberg............... 53 Director, President and Chief
Executive Officer (1999)
J. Barclay Knapp.................. 40 Director, Executive Vice
President,
Chief Operating Officer (1999)
</TABLE>
Additional information as of April 15, 1997 regarding the two nominees for
election as directors and the continuing directors and information regarding
executive officers of the Company is as follows:
NOMINEES
Alan J. Patricof, a director from and prior to the July 1991 distribution
by Cellular Communications, Inc. ("CCI") to its stockholders of the Common Stock
of the Company (the "Distribution"), is Chairman of Patricof & Co. Ventures,
Inc., a venture capital firm he founded in 1969. Mr. Patricof also serves as a
director of NTL Incorporated, formerly International CableTel Incorporated
("NTL"), CoreComm Incorporated, the newly formed parent company of Cellular
Communications of Puerto Rico, Inc. ("CoreComm") and other privately owned
companies.
Warren Potash, has been a director from and prior to the Distribution. Mr.
Potash retired in 1991 as President and Chief Executive Officer of the Radio
Advertising Bureau, a trade association, a position he held since February 1989.
Prior to that time and beginning in 1986, he was President of New Age
Communications, Inc., a communications consultancy firm. Until his retirement in
1986, Mr. Potash was a Vice President of Capital Cities/ABC Broadcasting, Inc.,
a position he held since 1970. Mr. Potash is also a director of NTL and
CoreComm.
4
<PAGE> 7
CONTINUING DIRECTORS
William B. Ginsberg, has been President, Chief Executive Officer and a
director of the Company from and prior to the Distribution. In April 1994, Mr.
Ginsberg was appointed as Chairman of the Company. Commencing in July 1978, Mr.
Ginsberg was employed at the Federal Communications Commission ("FCC"), first as
Special Assistant to the Chairman, and then as Deputy Chief, Policy, in the
FCC's Common Carrier Bureau. Mr. Ginsberg had also been President, Chief
Executive Officer and a director of CCI since its founding in 1981 until its
merger (the "CCI Merger") in 1996 into a subsidiary of AirTouch Communications
Inc. ("Air Touch").
J. Barclay Knapp, has been Executive Vice President, Chief Operating
Officer and a director of the Company from and prior to the Distribution. Mr.
Knapp was also Chief Financial Officer of the Company until March 1995. Mr.
Knapp was a director and Executive Vice President, Chief Operating Officer and
Chief Financial Officer of CCI, which he joined in June 1983, until the CCI
Merger. In addition, Mr. Knapp is a director, President, Chief Financial Officer
and Chief Executive Officer of NTL and a director, President, Chief Financial
Officer and Chief Operating Officer of CoreComm and prior to March 1994 was
Executive Vice President of CoreComm.
Sidney R. Knafel, a director from and prior to the Distribution, has been
Managing Partner of SRK Management Company, a private investment company, since
1981. In addition, Mr. Knafel is Chairman of Insight Communications, Inc. and
BioReliance Corporation. Mr. Knafel is also a director of General American
Investors Company, Inc., IGENE Biotechnology, Inc., NTL, CoreComm and some
privately owned companies.
Del Mintz, a director of the Company from and prior to the Distribution, is
President of Cleveland Mobile Tele Trak Company and President of Cleveland
Mobile Radio Sales, Inc. and Ohio Mobile Tele Trak, Inc., companies providing
telephone answering and radio communications services to Cleveland and Columbus,
respectively. Mr. Mintz has held similar positions with the predecessor of these
companies since June 1967. Mr. Mintz is President of several other companies,
and was President and a principal stockholder of Cleveland Mobile Cellular
Telephone, Inc. before such company was acquired by merger with CCI's
predecessor in May 1985. Mr. Mintz is also a director of NTL, CoreComm and
several privately owned companies.
EXECUTIVE OFFICERS OTHER THAN DIRECTORS
Thomas B. Tesluk, 40, has been the Company's Executive Vice President since
May 1995 and prior to this, the Company's Senior Vice President since April
1991. Mr. Tesluk began his career with the American Express Company in 1982.
Prior to joining the Company, he was with Shearson Lehman Brothers in Milan,
Italy from 1986 through 1991, holding the position of Vice President from 1988.
Mr. Tesluk has informed the Company that he intends to resign from the Company
on May 31, 1997 to pursue specific opportunities that are outside of the
Company's area of interest.
Richard J. Lubasch, 50, has been the Company's Vice President-General
Counsel and Secretary from and prior to the Distribution. In April 1994, Mr.
Lubasch was appointed Senior Vice President and Treasurer of the Company. Mr.
Lubasch was Vice President-General Counsel and Secretary of CCI from July 1987
until the CCI Merger. Mr. Lubasch is Senior Vice President-General Counsel and
Secretary of CoreComm and NTL.
Leigh Costikyan Wood, 39, has been the Company's Vice President-Operations
from and prior to the Distribution. Ms. Wood had been the Chief Executive
Officer of a joint venture between CCI and AirTouch from April 1993 until the
CCI Merger. In October 1996, Ms. Wood was appointed Senior Vice President of
NTL. From October 1982 until November 1984, she was Deputy Chief Financial
Officer of General Atlantic Corp., a private investment firm. Previously, she
was employed by Peat Marwick Mitchell & Co. Ms. Wood is a certified public
accountant and holds an M.B.A. from New York University. Ms Wood had been Vice
President-Operations of CCI from 1984 until the CCI Merger and continues to hold
that position at CoreComm.
5
<PAGE> 8
Gregg Gorelick, 38, has been the Company's Vice President-Controller from
and prior to the Distribution. From 1981 to 1986 he was employed by Ernst &
Whinney (now known as Ernst & Young LLP). Mr. Gorelick is a certified public
accountant and holds an M.B.A. from Rutgers University. Mr. Gorelick had been
Vice President-Controller of CCI from 1986 until the CCI Merger and continues to
hold that position at NTL and CoreComm.
Stanton N. Williams, 35, has been the Company's Vice President and Chief
Financial Officer since March 1995. He had been the Director of Corporate
Development for the Company from and prior to the Distribution, a title he
currently holds for CoreComm and NTL and held at CCI until the CCI Merger. Prior
to joining CCI in 1989, Mr. Williams was employed by Arthur Andersen & Co's
consulting division.
Executive officers of the Company are elected annually by the Board of
Directors and serve until their successors are duly elected and qualified.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
During calendar 1996, eight meetings (including regularly scheduled and
special meetings) of the Board of Directors were held. Messrs. Knafel,
McCourtney and Mintz serve as members of the Board of Director's compensation
and option committee and Messrs. Mintz, Patricof and Potash serve as members of
the Board of Director's audit committee. The compensation and option committee
reviews and makes recommendations regarding annual compensation for Company
officers and the audit committee oversees the Company's financial reporting
process on behalf of the Company's Board of Directors. During calendar 1996,
each of these committees held one meeting. No director during calendar 1996
attended fewer than 89% of the meetings of the Board of Directors and committee
meetings of which he was a member. There are no other committees of the Board of
Directors. Directors are reimbursed for out-of-pocket expenses incurred in
attending meetings of the Board of Directors and the committees. In addition, as
of December 31, 1996, Messrs. Knafel, McCourtney, Mintz, Patricof and Potash
have each been granted options to purchase an aggregate of 36,688 shares of
Common Stock at a weighted average price of $16.62 per share. Directors are paid
a fee of $250 for each Board Meeting and committee meeting, that they attend.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
POLICY
The Compensation and Option Committee of the Board of Directors (the
"Committee") has the responsibility for the design and implementation of the
Company's executive compensation program. The Committee is composed entirely of
independent non-employee directors.
The Company's executive compensation program is designed to be closely
linked to corporate performance and return to shareholders. To this end, the
Company has developed an overall compensation strategy and specific compensation
plans that tie a very significant portion of an executive's aggregate
compensation to the appreciation in the Company's stock price. In addition,
executive bonuses are linked to the achievement of operational goals and
therefore relate to shareholder return. The overall objective of this strategy
is to attract and retain the best possible executive talent, to motivate these
executives to achieve the goals inherent in the Company's business strategy and
to link executive and shareholder interests through equity-based compensation,
thereby seeking to enhance the Company's profitability and shareholder value.
The Committee also recognizes that for Messrs. Ginsberg, Knapp, Lubasch and
Williams, the cash portion of their compensation is small in light of their
compensation from CCI (prior to August 15, 1996) and NTL (from August 15, 1996)
(which is reimbursed to CCI or NTL, as appropriate, by the Company based on a
reasonable estimate of the time these executives spent on Company activity in
the relevant period). The Committee believes that for such executives
stock-based compensation becomes even more significant.
Each year the Committee conducts a review of the Company's executive
compensation program to determine the appropriate level and forms of
compensation. Such review permits an annual evaluation of the link between the
Company's performance and its executive compensation.
6
<PAGE> 9
In assessing compensation levels for the executives, especially those named
above, the Committee recognizes the fact that such executives have participated
in the development of the Company (and its predecessors) from its earliest
stages, and have produced long-term value for stockholders of the Company (and
its predecessors) over such period. In determining the annual compensation for
the Chief Executive Officer, the Committee uses the same criteria as it does for
the other named executives.
BASE SALARY AND BONUS
In furtherance of the Company's incentive-oriented compensation goals set
forth above, cash compensation (annual base salary and bonus) for executives is
generally set below levels paid by comparable sized telecommunications companies
and is supplemented by equity-based option grants. With respect to 1996, the
annual salary for each of the named executive officers remained the same as in
1995. In 1996, Messrs. Ginsberg, Tesluk, Lubasch and Williams received bonuses
of $130,000, $12,500, $50,000 and $50,000, respectively. This level of emphasis
on bonus reflects the Committee's view that a meaningful percentage of
compensation should be performance based and the Committee intends to continue
to determine bonuses in this light.
STOCK OPTIONS
Under the Company's stock option plan, stock options are granted from time
to time and certain of the Company's named executive officers received a grant
during 1996. Information with respect to such option grant is set forth in the
"Option Grants Table."
Stock options are designed to align the interest of executives with those
of the stockholders. The options generally are granted at an exercise price
equal to the market price of the Common Stock on the date of grant and vest over
a period of five years. Accordingly, the executives are provided additional
incentive to create shareholder value over the long term since the full benefit
of the options cannot be realized unless stock price appreciation occurs over a
number of years.
In determining individual option grants, the Committee takes into
consideration the number of options previously granted to that individual, the
amount of time and effort dedicated to the Company during the preceding year and
expected commitment to the Company on a forward-looking basis. The Committee
also strives to provide each option recipient with an appropriate incentive to
increase shareholder value, taking into consideration their cash compensation
levels.
In 1994, 1995 and 1996, Mr. Ginsberg received options to purchase 112,500
shares of Common Stock at an exercise price of $17.33, 75,000 shares of Common
Stock at an exercise price of $41.75 and 50,000 shares of Common Stock at an
exercise price of $33.25, respectively, (the fair market value of the Common
Stock on the dates of grant). In 1996, Mr. Ginsberg exercised options with
respect to an aggregate of 155,697 shares of Common Stock at a weighted average
exercise price of $3.38 per share. Mr. Ginsberg now owns 225,331 shares of the
Company's Common Stock and holds options to purchase an additional 448,782
shares. The Committee believes that the equity interest in the Company held by
the named executive officers, including Mr. Ginsberg, represents a significant
incentive to increase overall shareholder value.
COMPENSATION DEDUCTION CAP POLICY
In 1994, the Company's stockholders approved an amendment to the Company's
Stock Option Plan, among other things, bring the plan into compliance with the
rules regarding non-deductibility of compensation in excess of $1 million under
sec.162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). Any
compensation realized from the exercise of such stock options granted at fair
market value as of the date of grant thus would generally be exempt from the
deduction limitations under sec.162(m) of the Code. Other annual compensation,
such as salary and bonus, is not expected to exceed $1 million per executive.
THE COMPENSATION AND OPTION COMMITTEE
Sidney R. Knafel
Ted H. McCourtney
Del Mintz
7
<PAGE> 10
GENERAL
The following table discloses compensation received by the Company's Chief
Executive Officer and the four other most highly paid executive officers for the
three years ended December 31, 1996.
SUMMARY COMPENSATION TABLE*
<TABLE>
<CAPTION>
LONG-TERM
COMPEN-
SATION
AWARDS
ANNUAL COMPENSATION ---------
----------------------------- COMMON STOCK
SALARY BONUS UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS (#) COMPENSATION($)(4)
- ------------------------------------------ ----- -------- -------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
William B. Ginsberg(1).................... 1996 18,000 130,000 50,000 --
Chairman, President and Chief 1995 18,000 100,000 75,000 --
Executive Officer 1994 18,000 100,000 112,500 --
Thomas B. Tesluk.......................... 1996 160,000 12,500 -- 103,949
Executive Vice President 1995 160,000 50,000 30,000 12,809
1994 150,000 75,000 45,000 12,797
J. Barclay Knapp.......................... 1996 18,000 -- -- --
Executive Vice President and Chief 1995 18,000 -- 5,000 --
Operating Officer 1994 18,000 25,000 52,500 --
Richard J. Lubasch (2).................... 1996 12,000 50,000 15,000 --
Senior Vice President -- General 1995 12,000 55,000 15,000 --
Counsel, Treasurer and Secretary 1994 12,000 200,000 7,500 --
Stanton N. Williams(3).................... 1996 12,000 50,000 20,000 --
Vice President and Chief Financial 1995 12,000 55,000 30,000 --
Officer 1994 2,400 75,000 30,000 --
</TABLE>
- ---------------
* CCI provided management, financial, legal and technical services to the
Company until the CCI Merger. Amounts charged to the Company by CCI
consisted of salaries and indirect costs allocated to the Company. For the
years ended December 31, 1996, 1995 and 1994, CCI charged the Company
$232,000, $896,000 and $914,000, respectively. In August 1996, after the CCI
Merger, NTL commenced providing management, financial, legal and technical
services to the Company. Amounts charged to the Company consist of salaries
and indirect costs allocated to the Company. In 1996, NTL charged the
Company $351,000. It is not practicable to determine the amounts of these
expenses that would have been incurred had the Company operated as an
unaffiliated entity. However, in the opinion of management of the Company,
the allocation method is reasonable. The named executives had received
salaries from CCI and now receive salaries from NTL and spend portions of
their time providing executive management to the Company.
(1) Mr. Ginsberg was appointed Chairman in April 1994.
(2) Mr. Lubasch was appointed Treasurer in April 1994.
(3) Mr. Williams was appointed Vice President and Chief Financial Officer in
March 1995.
(4) All Other Compensation for Mr. Tesluk reflects the Company's match of
employee contributions to a 401(k) plan and in 1996, 1995 and 1994 includes
$132, $449 and $449, respectively of group term life benefits. In addition,
in 1996, All Other Compensation includes $94,000 for work on a special
project for the Company.
8
<PAGE> 11
OPTION GRANTS TABLE
The following table provides information on stock option grants during 1996
to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES
-------------------------------------------- OF
NUMBER OF % OF TOTAL STOCK PRICE APPRECIATION
SECURITIES OPTIONS FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES OR BASE ------------------------
GRANTED IN FISCAL PRICE EXPIRATION 5%($) 10%($)
NAME (#)(1) YEAR ($/SHARE) DATE $54.16 $86.25
- ------------------------------------- --------- ---------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
William B. Ginsberg.................. 50,000 49.02% 33.25 04/22/06 1,045,500 2,650,000
Thomas B. Tesluk..................... -- -- -- -- -- --
J. Barclay Knapp..................... -- -- -- -- -- --
Richard J. Lubasch................... 15,000 14.71 33.25 04/22/06 313,650 795,000
Stanton N. Williams.................. 20,000 19.61 33.25 04/22/06 418,200 1,060,000
</TABLE>
- ---------------
(1) All options were granted on March 26, 1996 at an exercise price equal to the
closing price of the Common Stock on The Nasdaq Stock Market's National
Market ("NNM") on such date; 20% were exercisable upon issuance, 20% became
exercisable on January 1, 1997 and an additional 20% will become exercisable
on each of January 1, 1998, 1999 and 2000. Upon a change of control of the
Company all unvested options become fully vested and exercisable.
(2) The amounts shown in these columns are the potential realizable value of
options granted at assumed rates of stock price appreciation (5% and 10%)
specified by the SEC, and have not been discounted to reflect the present
value of such amounts. The assumed rates of stock price appreciation are not
intended to forecast the future appreciation of the Common Stock.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information regarding option exercises
during 1996 by the named executive officers and the value at December 31, 1996
of unexercised in-the-money options held by each of the named executive
officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR-END AND
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED IN-THE-
SHARES UNEXERCISED OPTIONS MONEY OPTIONS AT
ACQUIRED ON VALUE AT FY-END (#) FY-END ($)*
EXERCISE REALIZED EXERCISABLE (E)/ EXERCISABLE (E)/
NAME (#) ($) UNEXERCISABLE (U) UNEXERCISABLE (U)
- -------------------------------- ----------- --------- -------------------- -------------------
<S> <C> <C> <C> <C>
William B. Ginsberg............. 155,697 4,689,053 256,282(E) 5,953,918(E)
67,500(U) 1,108,350(U)
Thomas B. Tesluk................ -- -- 120,000(E) 2,755,020(E)
27,000(U) 443,340(U)
J. Barclay Knapp................ 121,500 3,648,780 160,769(E) 3,963,412(E)
23,250(U) 303,390(U)
Richard J. Lubasch.............. 28,500 693,645 41,023(E) 1,045,078(E)
4,500(U) 73,890(U)
Stanton N. Williams............. 9,000 230,220 41,251(E) 833,252(E)
12,000(U) 140,040(U)
</TABLE>
- ---------------
* Based on the closing price on the NNM on December 31, 1996 of $29.00.
9
<PAGE> 12
PERFORMANCE GRAPH
The following graph sets forth the Company's cumulative shareholder return
from December 31, 1991 through December 31, 1996 as well as The Nasdaq Stock
Market (US) Index and the Center for Research in Security Prices ("CRSP") Index
of Nasdaq Telecommunications Stocks during such time period.
<TABLE>
<CAPTION>
CELLULAR
COMMUNICATIONS NASDAQ
Measurement Period INTERNATIONAL, TELECOMMUNICATIONS NASDAQ MARKET
(Fiscal Year Covered) INC. STOCKS INDEX
<S> <C> <C> <C>
12/31/91 100.00 100.00 100.00
12/31/92 132.88 122.82 116.38
12/31/93 457.85 189.38 133.60
12/31/94 1373.54 158.06 130.59
12/31/95 1349.86 206.96 184.67
12/31/96 915.69 211.57 227.16
</TABLE>
NOTE: Stock price performance shown above for the Common Stock is
historical and not necessarily indicative of future price
performance.
10
<PAGE> 13
RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
(ITEM 2)
Subject to ratification by the stockholders, the Board of Directors has
reappointed Ernst & Young LLP as independent auditors to audit the financial
statements of the Company for the year ending December 31, 1997.
Representatives of the firm of Ernst & Young LLP are expected to be present
at the meeting and will have an opportunity to make a statement if they so
desire and will be available to respond to appropriate questions.
The ratification of the selection of Ernst & Young LLP as the Company's
independent auditors for 1997 will require the affirmative vote of the holders
of a majority of the outstanding shares of Common Stock present in person or
represented by proxy at the annual meeting and entitled to vote. In determining
whether the proposal has received the requisite number of affirmative votes,
abstentions will be counted and will have the same effect as a vote against the
proposal; broker non-votes will be disregarded and have no effect on the outcome
of the vote.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS
VOTE FOR SUCH RATIFICATION
PROPOSAL TO AMEND EMPLOYEE STOCK OPTION PLAN
(ITEM 3)
GENERAL
In 1991, the then sole stockholder of the Company approved the
International Cellular, Inc. 1991 Stock Option Plan, which has since been
amended and restated and renamed the Cellular Communications International, Inc.
1991 Stock Option Plan (the "Option Plan"). In order to continue and to enhance
the effectiveness of the Option Plan, the Board of Directors has approved a
proposal (the "Proposal") to amend the Option Plan, subject to approval by
stockholders at the Annual Meeting. Summaries of the Proposal and the other
material Option Plan provisions are set forth below. The summaries are qualified
in their entirety by the full text of the Option Plan, as amended to reflect the
Proposal, attached to this Proxy Statement as Appendix A. The provision added to
the Option Plan by the Proposal is underlined and the provision deleted by the
Proposal is crossed out with a solid line on such appendix.
SUMMARY OF PROPOSAL
The Proposal seeks to amend the Option Plan by increasing the total number
of shares available for issuance under the Option Plan from 2,284,500 to
2,394,500 shares (an increase of 110,000 shares or approximately 1% of the total
shares of Common Stock outstanding as of the record date). Any options granted
with respect to the 110,000 shares referred to above will be granted at 100% of
the fair market value of such shares on the date of grant.
SUMMARY OF MATERIAL PLAN PROVISIONS NOT AFFECTED BY PROPOSAL
Under the terms of the Option Plan, incentive stock options within the
meaning of sec.422 of the Code ("ISOs") and nonqualified stock options ("NQSOs")
to purchase Common Stock may be granted to employees (herein referred to as an
"optionee") of the Company and any of its subsidiaries or parent corporations,
or affiliates. ISOs may be granted only to employees (including, without
limitation, officers and directors who are employees) of the Company, its
present or future divisions and subsidiary corporations and parent corporations
and NQSOs may also be granted to employees of affiliated entities of the Company
who are designated by the Board of Directors to participate in the Option Plan.
The closing price of the Common Stock on the Nasdaq Stock Market's National
Market on April 14, 1997 was $26.50.
11
<PAGE> 14
Each ISO and NQSO will be exercisable over a period, determined by the
Committee (as hereinafter defined) in its discretion, not to exceed 10 years
from the date of grant. Options may be exercisable during the option period at
such times, in such amount, in accordance with such terms and conditions, and
subject to such restrictions as are set forth in the option agreement evidencing
the grant of such options. Outstanding options will be exercisable in full if
(i) any corporation, person or other entity (other than the Company) makes a
tender or exchange offer for shares of Common Stock pursuant to which purchases
are made, (ii) the stockholders of the Company approve a definitive agreement to
merge or consolidate the Company with or into another corporation or to sell or
otherwise dispose of all or substantially all of its assets, or adopt a plan of
liquidation, (iii) the beneficial ownership of securities representing more than
15 percent of the voting power of the Company is acquired by any person or (iv)
during any period of two consecutive years, individuals who at the beginning of
such period were members of the Board of Directors cease for any reason to
constitute at least a majority thereof (unless the election, or the nomination
for election by the Company's stockholders, of each new director was approved by
a vote of at least two-thirds of directors then still in office who were the
directors at the beginning of the period).
The exercise price of an ISO may not be less than 100 percent of the fair
market value of the shares of the Common Stock on the date of grant of such
option and the exercise price of a NQSO may not be less than 85 percent of the
fair market value of the shares of Common Stock on the date of grant of such
option. (The exercise price of an ISO or a NQSO is referred to hereinafter as
the "Option Price.") The Option Price of, and the number of shares covered by,
each option will not change during the life of the option, except for
adjustments to reflect stock dividends, stock splits or other specified
corporate transactions. Options may be exercised in whole or in part at any time
during the option period by giving written notice of exercise to the Corporation
specifying the number of shares to be purchased, accompanied by payment of the
Option Price. Payment of the Option Price is to be made in such manner as the
Committee may provide in the applicable option agreement.
Except as specifically provided in the applicable option agreement, no
option may be transfered by the optionee during his lifetime. If the option
agreement so provides, an optionee may transfer NQSOs during his or her lifetime
to certain family members or family controlled trusts or partnerships. If the
employment of an optionee terminates for any reason (other than for cause or by
reason of death, disability or, in the case of NQSOs, retirement) the optionee
(or, as applicable, the permitted transferee) may, within a three month period
following such termination, exercise an option to the extent he or she was
entitled to do so at the date of termination. If an optionee dies while employed
(or within three months after termination of employment, other than termination
for cause), or terminates employment by reason of disability or, in the case of
NQSOs, retirement, all previously granted options (to the extent otherwise
exercisable), except those that have previously terminated, may be exercised by
the person or persons to whom the optionee's rights pass within one year after
the optionee's death or by the optionee (or, as applicable, by the permitted
transferee) within one year after the optionee's disability or retirement. In no
case, however, may options be exercised later than the expiration date specified
in the grant.
No options may be granted under the Option Plan after the expiration of 10
years following its effective date. The Option Plan shall be administered by the
Compensation and Option Committee of the Board of Directors. The Committee will
decide when and to whom to make grants, the number of shares to be covered by
the grants, the type of options to be granted, and the terms, conditions,
provisions and kind of consideration relating to the exercise of the options.
The Committee may interpret the Option Plan and may at any time adopt such rules
and regulations for the Option Plan as it deems advisable. The Board of
Directors may at any time amend or terminate the Option Plan and change its
terms and conditions, and any such amendment will become effective without
shareholder approval unless required by applicable law or the rules or
regulations of a securities exchange or regulatory agency.
As the Committee has discretion to make grants, the amounts that could be
granted to executive officers and other participants cannot be determined at
this time.
12
<PAGE> 15
CERTAIN UNITED STATES INCOME TAX CONSEQUENCES
The following discussion is a brief summary of the principal United States
income tax consequences under current United States income tax laws relating to
grants under the Option Plan. This summary is not intended to be exhaustive and,
among other things, does not describe state, local or foreign tax consequences.
NQSOS
Grant--An optionee will not recognize any income, and the Company will not
be entitled to a deduction, upon the grant of a NQSO.
Exercise--Except as noted below, upon the exercise of a NQSO the optionee
will recognize ordinary income in an amount equal to the excess of the fair
market value of the shares acquired on the date of exercise over the exercise
price. The Company will be generally entitled to a deduction of a corresponding
amount at that time. The Company's deduction upon exercise of NQSO by an
executive officer may be subject to the limitations of sec.162(m) of the Code if
the NQSO was granted at an exercise price less than fair market value of the
shares on the date of grant. If an optionee's sale of shares acquired by the
exercise of a NQSO could subject the optionee to suit under Section 16(b) of the
Exchange Act ("Section 16(b) liability"), then the recognition and determination
of the amount of income by the employee, and the corresponding deduction by the
Company, may be postponed to a later date. However, the optionee may elect under
sec.83(b) of the Code, within thirty days after exercise, to be taxed as of the
exercise date in the manner described above. As recently amended, Section 16(b)
of the Exchange Act generally does not impose Section 16(b) liability upon a
sale of shares received upon exercise of a NQSO if the grant of the NQSO
satisfies certain approval requirements under Rule 16b-3 as promulgated under
Section 16(b) of the Exchange Act (provided that no other purchases have been
made less than six months either before or after such sale).
An optionee's tax basis for shares acquired upon exercise of a NQSO will be
equal to the fair market value of such shares on the date that governs the
determination of optionee's ordinary income. The holding period for such shares
will commence on such date and, accordingly, will not include the period during
which the NQSO was held.
Sale--In the event of a sale of shares received upon exercise of a NQSO,
any gain or loss after the date on which ordinary income is recognized by the
optionee in respect of the option exercise will generally be a capital gain or
loss, assuming the shares are held as capital assets. The capital gain or loss
will be a longterm capital gain or loss if the shares were held for more than
one year after the date on which taxable compensation was realized by the
optionee in respect of the option exercise.
In the event an optionee transfers, without consideration, a NQSO to
certain family members or family-related entities, the transfer should generally
not result in the recognition of income by the optionee. The exercise of the
NQSO by the transferee will generally result in the recognition of ordinary
income by the optionee who transferred the option (or, in the event the optionee
dies prior to the exercise, by the optionee's estate) in an amount and at the
time described above. The Company should be entitled to a tax deduction in an
amount equal to the amount of ordinary income recognized by the optionee upon
the exercise of the transferred NQSO. If the shares of Common Stock acquired
upon the exercise of the NQSO are thereafter disposed of, the transferee will
generally recognize a capital gain (or loss) equal to the difference between the
amount realized on the disposition and the transferee's basis in the shares. The
transferee's basis in the shares of Common Stock acquired upon exercise of the
NQSO will be equal to the fair market value of the shares on the date of grant
that governs the determination of the optionee's ordinary income.
ISOS
Grant--An optionee will not recognize any income, and the Company will not
be entitled to a deduction, upon the grant of an ISO.
Exercise--An optionee will not recognize any income, and the Company will
not be entitled to a deduction, upon the timely exercise of an ISO. The timely
exercise of an ISO may, however, affect the computation of the optionee's
alternative minimum tax. Exercise by an optionee of an ISO will be timely if
13
<PAGE> 16
made while the optionee is employed by the Company or within three months after
the cessation of such employment (one year if the optionee is disabled within
the meaning of Section 22(e) (3) of the Code). If the exercise of an ISO is not
timely, the ISO will be taxed according to the rules described above for NQSOs.
An optionee's tax basis for shares acquired upon exercise of an ISO will be
equal to the exercise price paid for such shares. The holding period for the
shares will begin on the date of exercise and, accordingly, will not include the
period during which the ISO was held.
To the extent that the aggregate fair market value of shares (determined as
of the date of grant) with respect to which ISOs are exercisable for the first
time during any calendar year exceeds $100,000, such ISOs will be taxed
according to the rules described above for NQSOs.
Sale--If an optionee makes a disposition of shares pursuant to an ISO, and
such shares were held for more than two years from the date of grant of such ISO
and one year from the transfer of such shares to the optionee, then any gain or
loss realized upon such disposition will be treated as a long-term capital gain
or loss. Under such circumstances, the Company will not be entitled to any
deduction. If, however, the optionee makes a disposition of shares acquired
pursuant to an ISO within either two years from the date of the grant of such
ISO or one year from the transfer of such shares of the optionee (a
"Disqualifying Disposition"), then any gain realized will generally be taxable
as follows: (i) as ordinary income in an amount equal to any excess of (a) the
lesser of the fair market value of the shares on the date the ISO is exercised
(the value and timing of recognition on a later date may govern in the case of
an optionee whose sale of the shares could subject him or her to suit under
Section 16(b) of the Exchange Act as discussed above for NQSOs) or the amount
realized on the Disqualifying Disposition, over (b) the exercise price, and (ii)
as capital gain to the extent of any excess of the amount realized on the
Disqualifying Disposition over the fair market value of the shares on the date
that governs the determination of this ordinary income. In such case, the
Company will be entitled to a deduction at the time of the Disqualifying
Disposition for the amount taxable to the optionee as ordinary income. Any loss
realized upon a Disqualifying Disposition will generally be a capital loss, and
will be long-term capital loss if the holding period for the disposed shares is
more than one year.
VOTE REQUIRED FOR ADOPTION
The affirmative vote of the holders of shares representing a majority of
the shares present in person or represented by proxy at the meeting and entitled
to vote on the subject matter is required for approval of the Proposal. In
determining whether the Proposal has received the requisite number of
affirmative votes, abstentions will be counted and have the same effect as a
vote against the Proposal; broker non-votes will be disregarded and will have no
effect on the outcome of the vote. The Option Plan amendment will become
effective if and when the stockholders vote in favor of the Proposal. If the
Proposal should not be approved by the stockholders, the Option Plan will be
continued as in effect prior to the amendment described herein.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL
OF THE AMENDMENT TO THE EMPLOYEE STOCK OPTION PLAN
14
<PAGE> 17
STOCKHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 1998 Annual
Meeting must be received by the Company at the address set forth on the first
page of this Proxy Statement on or before December 29, 1998, to be considered
for inclusion in the Company's Proxy Statement and Form of Proxy relating to
that meeting.
OTHER BUSINESS
The management does not intend to bring any other matters before the
meeting. The management is not informed of any other business which others may
bring before the meeting. However, if any other matters should properly come
before the meeting, or at any adjournment or adjournments thereof, it is the
intention of the persons named in the accompanying proxy to vote on such matters
as they, in their discretion, may determine.
By order of the Board of Directors,
RICHARD J. LUBASCH
Secretary
New York, New York
April 28, 1997
15
<PAGE> 18
APPENDIX A
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
1991 STOCK OPTION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JUNE 3, 1997)
1. PURPOSE; CONSTRUCTION.
This Cellular Communications International, Inc. 1991 Stock Option Plan, as
amended and restated effective June 3, 1997 (the "Plan"), is intended to
encourage stock ownership by employees of Cellular Communications International,
Inc. (the "Corporation") and its divisions and subsidiary corporations, so that
they may acquire or increase their proprietary interest in the Corporation, and
to encourage such employees to remain in the employ of the Corporation and to
put forth maximum efforts for the success of the business. It is further
intended that options granted by the Committee pursuant to Section 6 of this
Plan shall constitute "incentive stock options" ("Incentive Stock Options")
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended, and the regulations issued thereunder (the "Code"), and options granted
by the Committee pursuant to Section 7 of this Plan shall constitute
"nonqualified stock options" ("Nonqualified Stock Options").
2. DEFINITIONS.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "DISABILITY" shall mean an Optionee's inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or
that has lasted or can be expected to last for a continuous period of not
less than twelve (12) months.
(b) "FAIR MARKET VALUE" per share as of a particular date shall mean
(i) if the shares of common stock, par value $.01 per share, of the
Corporation ("Common Stock") are then traded on an over-the-counter market,
the average of the closing bid and asked prices for the shares of Common
Stock in such over-the-counter market for the last preceding date on which
there was a sale of such Common Stock in such market, (ii) if the shares of
Common Stock are then listed on the Nasdaq Stock Market's National Market
or other national securities exchange, the closing sales price per share on
the date of grant or on the last preceding date on which there was a sale
of such Common Stock on such exchange, or (iii) if the shares of Common
Stock are not then traded in an over-the-counter market or listed on Nasdaq
or a national securities exchange, such value as the Committee in its
discretion may determine.
(c) "PARENT CORPORATION" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the employer
corporation if, at the time of granting an Option, each of the corporations
other than the employer corporation owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
(d) "SUBSIDIARY CORPORATION" shall mean any corporation (other than
the Corporation) in an unbroken chain of corporations beginning with the
employer corporation if, at the time of granting an Option, each of the
corporations other than the last corporation in the unbroken chain owns
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
(e) "TEN PERCENT STOCKHOLDER" shall mean an Optionee who, at the time
an Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Corporation or of its Parent or Subsidiary Corporations.
A-1
<PAGE> 19
3. ADMINISTRATION.
The Plan shall be administered by the Compensation and Option Committee of
the Corporation's Board of Directors or such other committee appointed either by
the Board of Directors of the Corporation (the "Board") or by such Compensation
and Option Committee (the "Committee"); provided, however, to the extent
determined necessary to satisfy the requirements for exemption from Section
16(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
with respect to the acquisition or disposition of securities hereunder, action
by the Committee may be by a subcommittee of a committee of the Board composed
solely of two or more "non-employee directors," within the meaning of Rule 16b-3
as promulgated under Section 16(b) of the Exchange Act, appointed by the Board
or by the Compensation and Option Committee of the Board, or by a committee
composed solely of two or more "non-employee directors," within the meaning of
Rule 16b-3, as a result of the recusal of those members who do not qualify as
non-employee directors; and, provided further, to the extent determined
necessary to satisfy the requirements for the exception for qualified
performance-based compensation under Section 162(m) of the Code and the treasury
regulations thereunder, action by the Committee may be by a committee comprised
solely of two or more "outside directors," within the meaning of Section 162(m)
of the Code and the treasury regulations thereunder, appointed by the Board or
by the Compensation and Option Committee. Notwithstanding anything in the Plan
to the contrary, and to the extent determined to be necessary to satisfy an
exemption under Rule 16b-3 with respect to a grant hereunder (and, as
applicable, with respect to the disposition to the Corporation of a security
hereunder), or as otherwise determined advisable by the Committee, the terms of
such grant and disposition under the Plan shall be subject to the prior approval
of the Board. Any prior approval of the Board, as provided in the preceding
sentence, shall not otherwise limit or restrict the authority of the Committee
to make grants under the Plan, including, but not limited to, the authority of
the Committee to make grants qualifying for the performance-based compensation
exception under Section 162(m) of the Code and the treasury regulations
thereunder.
The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of the Plan, to administer the Plan
and to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Options; to determine
which Options shall constitute Incentive Stock Options and which Options shall
constitute Nonqualified Stock Options; to determine the purchase price of the
shares of Common Stock covered by each Option (the "Option Price"); to determine
the persons to whom, and the time or times at which, Options shall be granted;
to determine the number of shares to be covered by each Option; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the Option Agreements (which need
not be identical) entered into in connection with Options granted under the
Plan; and to make all other determinations deemed necessary or advisable for the
administration of the Plan. The Committee may delegate to one or more of its
members or to one or more agents such administrative duties as it may deem
advisable, and the Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan.
The Board shall fill all vacancies, however caused, in the Committee. The
Board may from time to time appoint additional members to the Committee, and may
at any time remove one or more Committee members and substitute others. One
member of the Committee may be selected by the Board as chairman. The Committee
shall hold its meetings at such times and places as it shall deem advisable. All
determinations of the Committee shall be made by a majority of its members
either present in person or participating by conference telephone at any meeting
or by written consent. The Committee may appoint a secretary and make such rules
and regulations for the conduct of its business as it shall deem advisable, and
shall keep minutes of its meetings.
No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Option granted
hereunder.
A-2
<PAGE> 20
4. ELIGIBILITY.
Options may be granted (i) to employees (including, without limitation,
officers and directors who are employees) of the Corporation, its present or
future divisions and Subsidiary Corporations and Parent Corporations and (ii) in
the case of Nonqualified Stock Options, also to employees of an affiliated
entity of the Corporation (an "Affiliated Entity") which is designated by the
Board to participate in the Plan. In determining the persons to whom Options
shall be granted and the number of shares to be covered by each Option, the
Committee shall take into account the duties of the respective persons, their
present and potential contributions to the success of the Corporation and such
other factors as the Committee shall deem relevant in connection with
accomplishing the purpose of the Plan. A person to whom an option has been
granted hereunder is sometimes referred to herein as an "Optionee."
An Optionee shall be eligible to receive more than one grant of an Option
during the term of the Plan, but only on the terms and subject to the
restrictions hereinafter set forth.
Effective with respect to grants made on or after June 2, 1994, no
individual shall be eligible to receive, in any given calendar year (or in the
case of 1994, the period beginning June 2, 1994 and ending December 31, 1994),
an option or options to purchase an amount of shares of Common Stock in excess
of 100,000, which number shall be subject to adjustment for transactions
described in Section 8(i) in a manner consistent with Section 8(i).
5. STOCK.
The stock subject to Options hereunder shall be shares of the Corporation's
Common Stock. Such shares may, in whole or in part, be authorized but unissued
shares or shares that shall have been or that may be reacquired by the
Corporation. The aggregate number of shares of Common Stock as to which Options
may be granted from time to time under the Plan shall not exceed 2,284,500
2,394,000. The limitation established by the preceding sentence shall be subject
to adjustment as provided in Section 8(i) hereof.
In the event that any outstanding Option under the Plan for any reason
expires, or is cancelled, surrendered or otherwise terminated without having
been exercised in full, the shares of Common Stock allocable to such expired,
cancelled, surrendered or terminated portion of such Option shall (unless the
Plan shall have been terminated) become available for subsequent grants of
Options under the Plan. Notwithstanding the foregoing, the expiration,
cancellation, surrender or termination of an Option, to the extent consistent
with Section 162(m) of the Code and the treasury regulations thereunder, shall
not be disregarded for purposes of applying the individual limit on the maximum
number of shares, as provided in Section 4, that may be purchased in connection
with Options granted under the Plan with respect to any individual.
6. INCENTIVE STOCK OPTIONS.
Options granted pursuant to this Section 6 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in Section
8 hereof.
(a) VALUE OF SHARES. Any Options granted as Incentive Stock Options
shall be treated as Nonqualified Stock Options to the extent that the
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of the shares of Common Stock with respect to which such
Options granted under this Plan and all other option plans of the
Corporation and any Subsidiary Corporation become exercisable for the first
time by an Optionee during any calendar year exceeds $100,000.
(b) TEN PERCENT STOCKHOLDER. In the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, (i) the Option Price shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the
shares of Common Stock of the Corporation on the date of grant of such
Incentive Stock Option, and (ii) the exercise period shall not exceed five
(5) years from the date of grant of such Incentive Stock Option.
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<PAGE> 21
7. NONQUALIFIED STOCK OPTIONS.
Options granted pursuant to this Section 7 are intended to constitute
Nonqualified Stock Options and shall be subject only to the general terms and
conditions specified in Section 8 hereof.
8. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted pursuant to the Plan shall be evidenced by a written
Option Agreement (an "Option Agreement") between the Corporation and the
Optionee, which agreement shall comply with and be subject to the following
terms and conditions:
(a) Number of Shares. Each Option Agreement shall state the number of
shares of Common Stock to which the Option relates.
(b) Type of Option. Each Option Agreement shall specifically identify
the portion, if any, of the Option which constitutes an Incentive Stock
Option and the portion, if any, which constitutes a Nonqualified Stock
Option.
(c) Option Price. Each Option Agreement shall state the Option Price,
which, in the case of Incentive Stock Options, shall be not less than one
hundred percent (100%) of the Fair Market Value of the shares of Common
Stock of the Corporation on the date of grant of the Option, and which, in
the case of Nonqualified Stock Options, shall in no event be less than
eighty-five percent (85%) of the Fair Market Value of the shares of Common
Stock of the Corporation on the date of grant of the Option. The Option
Price shall be subject to adjustment as provided in Section 8(i) hereof.
The date on which the Committee adopts a resolution expressly granting an
Option shall be considered the day on which such Option is granted.
(d) Medium and Time of Payment. Options may be exercised in whole or
in part at any time during the option period by giving written notice of
exercise to the Corporation specifying the number of shares to be
purchased, accompanied by payment of the purchase price. Payment of the
purchase price shall be made in such manner as the Committee may provide in
the Option Agreement, which may include cash (including cash equivalents,
such as by certified or bank check payable to the Corporation), delivery of
unrestricted shares of Common Stock that have been owned by the Optionee
or, as applicable, a permissible transferee (as provided in Section 8(h))
for at least six months, any other manner permitted by law as determined by
the Committee, or any combination of the foregoing.
(e) Term and Exercise of Options. Options shall be exercisable over
the exercise period as and at the times and upon the conditions that the
Committee may determine, as reflected in the Option Agreement; provided,
however, that the Committee shall have the authority to accelerate the
exercisability of any outstanding Option at such time and under such
circumstances as it, in its sole discretion, deems appropriate; and further
provided, however, that such exercise period shall not exceed ten (10)
years from the date of grant of such Option. The exercise period shall be
subject to earlier termination as provided in Sections 8(f) and 8(g)
hereof. An Option may be exercised, as to any or all full shares of Common
Stock as to which the Option has become exercisable, by giving written
notice of such exercise to the Committee or to such individual(s) as the
Committee may from time to time designate.
(f) Termination. Except as provided in this Section 8(f) and in
Section 8(g) hereof, an Option may not be exercised by the Optionee to whom
it was granted or by a transferee to whom such Option was transferred (as
provided in Section 8(h)) unless the Optionee is then in the employ of the
Corporation or a division or any corporation which was, at the time of
grant of such Option, a Subsidiary Corporation or Parent Corporation
thereof (or a corporation or a Parent or Subsidiary Corporation of such
corporation issuing or assuming the Option in a transaction to which
Section 424(a) of the Code applies) or an Affiliated Entity, and unless the
Optionee has remained continuously so employed since the date of grant of
the Option. In the event that the employment of an Optionee shall terminate
(other than by reason of death, Disability or, in the case of Nonqualified
Stock Options, retirement), all Options
A-4
<PAGE> 22
granted to such Optionee or transferred by such Optionee (as provided in
Section 8(h)) that are exercisable at the time of such termination may,
unless earlier terminated in accordance with their terms, be exercised by
the Optionee or by a transferee within three (3) months after such
termination; provided, however, that if the employment of an Optionee shall
terminate for cause, all Options theretofore granted to such Optionee or
transferred by such Optionee (as provided in Section 8(h)) shall, to the
extent not theretofore exercised, terminate forthwith. Nothing in the Plan
or in any Option granted pursuant hereto shall confer upon an individual
any right to continue in the employ of the Corporation or any of its
divisions, Subsidiary Corporations or Affiliated Entities or interfere in
any way with the right of the Corporation or any such division, Subsidiary
Corporation or Affiliated Entity to terminate such employment.
(g) Death, Disability or Retirement of Optionee. If an Optionee shall
die while employed by the Corporation or a division or any corporation
which was, at the time of grant of such Option, a Subsidiary Corporation or
Parent Corporation thereof (or a corporation or a Parent or Subsidiary
Corporation of such corporation issuing or assuming the Option in a
transaction to which Section 424(a) of the Code applies) or an Affiliated
Entity, or within three (3) months after the termination of such Optionee's
employment, other than for cause, or if the Optionee's employment shall
terminate by reason of Disability or, in the case of Nonqualified Stock
Options, retirement, all Options theretofore granted to such Optionee or
transferred by such Optionee (as provided in Section 8(h)), to the extent
otherwise exercisable at the time of death or termination of employment,
may, unless earlier terminated in accordance with their terms, be exercised
by the Optionee or by the Optionee's estate or by a person who acquired the
right to exercise such Option by bequest or inheritance or otherwise by
reason of death or Disability of the Optionee, or by a transferee (as
provided under Section 8(h)), at any time within one year after the date of
death, Disability or retirement of the Optionee.
(h) Nontransferability of Options. Except as provided in this Section
8(h), no Option granted hereunder shall be transferable by the Optionee to
whom granted, other than by will or the laws of descent and distribution,
and the Option may be exercised during the lifetime of such Optionee only
by the Optionee or such Optionee's guardian or legal representative. To the
extent the Option Agreement so provides, and subject to such conditions as
the Committee may prescribe, an Optionee may, upon providing written notice
to the General Counsel of the Corporation, elect to transfer the
Nonqualified Stock Options granted to such Optionee pursuant to such
agreement, without consideration therefor, to members of his or her
"immediate family" (as defined below), to a trust or trusts maintained
solely for the benefit of the Optionee and/or the members of his or her
immediate family, or to a partnership or partnerships whose only partners
are the Optionee and/or the members of his or her immediate family. Any
purported assignment, alienation, pledge, attachment, sale, transfer, or
encumbrance that does not qualify as a permissible transfer under this
Section 8(h) shall be void and unenforceable against the Plan and the
Corporation. For purposes of this Section 8(h), the term "immediate family"
shall mean, with respect to a particular Optionee, the Optionee's spouse,
children or grandchildren, and such other persons as may be determined by
the Committee. The terms of any such Option and the Plan shall be binding
upon a permissible transferee, and the beneficiaries, executors,
administrators, heirs and successors of the Optionee and, as applicable, a
permissible transferee.
(i) Effect of Certain Changes.
(1) If there is any change in the number of shares of Common Stock
through the declaration of stock or cash dividends, or recapitalization
resulting in stock splits, or combinations or exchanges of such shares,
the aggregate number of shares of Common Stock available for Options,
the aggregate number of shares of Common Stock available for
distribution under the Plan to any single individual with respect to
Options granted hereunder, the number of such shares covered by
outstanding Options, and the exercise price per share of such Options
shall be proportionately adjusted by the Committee to reflect any
increase or decrease in the number of issued shares of Common Stock;
provided, however, that any fractional shares resulting from such
adjustment shall be eliminated. In the event of any other extraordinary
corporate transaction, including, but not
A-5
<PAGE> 23
limited to, distributions of cash or other property to the Corporation's
shareholders, the Committee may equitably adjust outstanding Options as
it deems appropriate.
(2) In the event of the proposed dissolution or liquidation of the
Corporation, in the event of any corporate separation or division,
including, but not limited to, split-up, split-off or spin-off, or in
the event of a merger or consolidation of the Corporation with another
corporation, the Committee may provide that the holder of each Option
then exercisable shall have the right to exercise such Option (at its
then Option Price) solely for the kind and amount of shares of stock and
other securities, property, cash or any combination thereof receivable
upon such dissolution, liquidation, or corporate separation or division,
or merger or consolidation by a holder of the number of shares of Common
Stock for which such Option might have been exercised immediately prior
to such dissolution, liquidation, or corporate separation or division,
or merger or consolidation; or the Committee may provide, in the
alternative, that each Option granted under the Plan shall terminate as
of a date to be fixed by the Committee; provided, however, that not less
than thirty (30) days' written notice of the date so fixed shall be
given to each Optionee, who shall have the right, during the period of
thirty (30) days preceding such termination, to exercise the Options
(unless earlier terminated in accordance with their terms) as to all or
any part of the shares of Common Stock covered thereby, including shares
as to which such Options would not otherwise be exercisable; provided,
further, that failure to provide such notice shall not invalidate or
affect the action with respect to which such notice was required.
(3) If while unexercised Options remain outstanding under the Plan:
(i) any corporation, person or other entity (other than the
Corporation) makes a tender or exchange offer for shares of the
Common Stock pursuant to which purchases are made ("Offer"), or
(ii) the stockholders of the Corporation approve a definitive
agreement to merge or consolidate the Corporation with or into
another corporation or to sell or otherwise dispose of all or
substantially all of its assets, or adopt a plan of liquidation, or
(iii) the "beneficial ownership" (as defined in Rule 13d-3 under
the Exchange Act) of securities representing more than 15% of the
combined voting power of the Corporation is acquired by any "person"
as defined in Sections 13(d) and 14(d) of the Exchange Act, or
(iv) during any period of two consecutive years, individuals who
at the beginning of such period were members of the Board cease for
any reason to constitute at least a majority thereof (unless the
election, or the nomination for election by the Corporation's
stockholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors
at the beginning of such period),
then from and after the date of the first purchase of Common Stock
pursuant to such Offer, or the date of any such stockholder approval or
adoption, or the date on which public announcement of the acquisition of
such percentage shall have been made, or the date on which the change in
the composition of the Board set forth above shall have occurred,
whichever is applicable (the applicable date being referred to
hereinafter as the "Acceleration Date"), all Options shall be
exercisable in full, whether or not otherwise exercisable. Following the
Acceleration Date, the Committee shall, in the case of a merger,
consolidation or sale or disposition of assets, promptly make an
appropriate adjustment to the number and class of shares of Common Stock
available for Options, and to the amount and kind of shares or other
securities or property receivable upon exercise of any outstanding
Options after the effective date of such transaction, and the price
thereof.
(4) Paragraphs (2) and (3) of this Section 8(i) shall not apply to
a merger or consolidation in which the Company is the surviving
corporation and shares of Common Stock are not converted into or
exchanged for stock, securities of any other corporation, cash or any
other thing of value. Notwithstanding the preceding sentence, in case of
any consolidation or merger of another corporation into the Corporation
in which the Corporation is the surviving corporation and in which
A-6
<PAGE> 24
there is a reclassification or change (including a change to the right
to receive cash or other property) of the shares of Common Stock (other
than a change in par value, or from par value to no par value, or as a
result of a subdivision or combination, but including any change in such
shares into two or more classes or series of shares), the Committee may
provide that the holder of each Option then exercisable shall have the
right to exercise such Option solely for the kind and amount of shares
of stock and other securities (including those of any new direct or
indirect parent of the Corporation), property, cash or any combination
thereof receivable upon such reclassification, change, consolidation or
merger by the holder of the number of shares of Common Stock for which
such Option might have been exercised.
(5) In the event of a change in the Common Stock of the Corporation
as presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any
such change shall be deemed to be the Common Stock within the meaning of
the Plan.
(6) To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding
and conclusive, provided that each Incentive Stock Option granted
pursuant to this Plan shall not be adjusted in a manner that causes such
Option to fail to continue to qualify as an Incentive Stock Option
within the meaning of Section 422 of the Code.
(7) Except as hereinbefore expressly provided in this Section 8(i),
the Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of shares
of stock of any class or by reason of any dissolution, liquidation,
merger, or consolidation or spin-off of assets or stock of another
corporation; and any issue by the Corporation of shares of stock of any
class, or securities convertible into shares of stock of any class,
shall not affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to the
Option. The grant of an Option pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structures or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or part of its business or assets.
(j) Rights as a Stockholder. An Optionee or a transferee of an Option
shall have no rights as a stockholder with respect to any shares covered by
the Option until the date of the issuance of a stock certificate to him for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distribution of other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 8(i)
hereof.
(k) Other Provisions. The Option Agreements authorized under the Plan
shall contain such other provisions, including, without limitation, (i) the
imposition of restrictions upon the exercise of an Option, and (ii) in the
case of an Incentive Stock Option, the inclusion of any condition not
inconsistent with such Option qualifying as an Incentive Stock Option, as
the Committee shall deem advisable.
9. AGREEMENT BY OPTIONEE REGARDING WITHHOLDING TAXES.
If the Committee shall so require, as a condition of exercise, each
Optionee shall agree that
(a) no later than the date of exercise of any Option granted
hereunder, the Optionee will pay to the Corporation or make arrangements
satisfactory to the Committee regarding payment of any federal, state or
local taxes of any kind required by law to be withheld upon the exercise of
such Option, and
(b) the Corporation shall, to the extent permitted or required by law,
have the right to deduct federal, state and local taxes of any kind
required by law to be withheld upon the exercise of such Option from any
payment of any kind otherwise due to the Optionee.
A-7
<PAGE> 25
10. TERM OF PLAN.
Options may be granted pursuant to the Plan from time to time within a
period of ten (10) years from the date the Plan is adopted by the Board, or the
date the Plan is approved by the stockholders of the Corporation, whichever is
earlier.
11. AMENDMENT AND TERMINATION OF THE PLAN.
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan; provided, however, that no amendment that requires
stockholder approval under Delaware law, under the rules or regulations of any
securities exchange or regulating agency, or in order for the Plan to continue
to comply with Rule 16b-3 (as promulgated under Section 16(b) of the Exchange
Act) or, if applicable, to comply with the exception for qualified
performance-based compensation under Code Section 162(m), or in order for
Options intended to constitute Incentive Stock Options to satisfy the
requirements of Section 422 of the Code shall be effective unless the same shall
be approved by the requisite vote of the stockholders of the Corporation. Except
as provided in Section 8 hereof, no suspension, termination, modification or
amendment of the Plan may adversely affect any Option previously granted, unless
the written consent of the Optionee or, as applicable, a permissible transferee
(as provided in Section 8(h)) is obtained.
12. INTERPRETATION.
The Plan is designed and intended to comply with Rule 16b-3 under the
Exchange Act and, to the extent applicable, Sections 162(m) and 422 of the Code,
and all provisions hereof shall be construed in a manner to so comply.
13. APPROVAL AND RATIFICATION BY STOCKHOLDERS.
The Plan shall take effect as set forth in Section 16 hereof upon its
adoption by the Board, but shall be subject to its approval and ratification by
the holders of a majority of the issued and outstanding shares of Common Stock
of the Corporation, which approval and ratification must occur within twelve
months after the date that the Plan is adopted by the Board.
14. EFFECT OF HEADINGS.
The section and subsection headings contained herein are for convenience
only and shall not affect the construction hereof.
15. GOVERNING LAW.
The Plan shall be governed by the laws of the State of Delaware.
16. EFFECTIVE DATE OF PLAN.
The effective date of the Plan is the date the Plan is adopted by the
Board.
A-8
<PAGE> 26
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
PROXY
110 EAST 59TH STREET, NEW YORK, N.Y. 10022
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING ON JUNE 3,
1997
The undersigned hereby appoints William S. Ginsberg, J. Barclay Knapp and
Richard J. Lubasch, and each of them, with full power of substitution, proxies
to represent the undersigned at the Annual Meeting of Stockholders of Cellular
Communications International, Inc. to be held at 11:30 a.m., local time, on
Tuesday, June 3, 1997, at The Helmsley Park Lane Hotel, The Ballroom Suite,
located at 36 Central Park South, New York, New York 10019 and at any
adjournment or postponement thereof, and thereat to vote all of the shares of
stock which the undersigned would be entitled to vote, with all the powers the
undersigned would possess if personally present. The Board of Directors
recommend that you vote FOR the following proposals.
1. Election of Directors: Nominees: Alan J. Patricof and Warren Potash
<TABLE>
<S> <C>
[ ] VOTE FOR both nominees listed, except as marked to the contrary above [ ] VOTE WITHHELD from both
(IF ANY). (To withhold your votes for either individual nominee strike nominees.
a line through the nominee's name in the list above.)
</TABLE>
2. Ratify the appointment of Ernst & Young LLP as the independent auditors of
the Company for the fiscal year ending December 31, 1997.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
3. To approve an amendment to the Company's Employee Stock Option Plan.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
(Please date and sign on reverse side and return promptly.)
<PAGE> 27
(Continued from other side)
4. In their discretion, to act upon such other business as may properly come
before the meeting or any adjournment or adjournments thereof.
THE PROXY HOLDERS WILL VOTE THE SHARES REPRESENTED BY THIS PROXY IN THE MANNER
INDICATED ON THE REVERSE SIDE HEREOF. UNLESS A CONTRARY DIRECTION IS INDICATED,
THE PROXY HOLDERS WILL VOTE SUCH SHARES "FOR" THE PROPOSALS SET FORTH ON THE
REVERSE SIDE HEREOF. IF ANY FURTHER MATTERS PROPERLY COME BEFORE THE ANNUAL
MEETING, IT IS THE INTENTION OF THE PERSONS NAMED ABOVE TO VOTE SUCH PROXIES IN
ACCORDANCE WITH THEIR BEST JUDGMENT.
-----------------------------------
Signature
-----------------------------------
Signature
DATED , 1997
In case of joint owners, each joint
owner must sign. If signing for a
corporation or partnership or as
agent, attorney or fiduciary,
indicate the capacity in which you
are signing.
PLEASE MARK, DATE AND SIGN YOUR NAME AS IT APPEARS ON THIS CARD
AND RETURN IN THE ENCLOSED ENVELOPE.
