-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D87e+bIrM5cWQZXVNAw9CK5FHJa8RA+t7gwPM3DJde0PtRmqoMda1xD26FTXNxLB rLHoNTgUOFOB3mNx8oh8OA== 0000950123-98-004198.txt : 19980428 0000950123-98-004198.hdr.sgml : 19980428 ACCESSION NUMBER: 0000950123-98-004198 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980603 FILED AS OF DATE: 19980427 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CELLULAR COMMUNICATIONS INTERNATIONAL INC CENTRAL INDEX KEY: 0000870762 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 133221852 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: SEC FILE NUMBER: 000-19363 FILM NUMBER: 98602070 BUSINESS ADDRESS: STREET 1: 110 E 59TH ST STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2129068480 MAIL ADDRESS: STREET 1: 110 EAST 59TH STREET STREET 2: 26TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: INTERNATIONAL CELLULAR INC DATE OF NAME CHANGE: 19600201 DEF 14A 1 CELLULAR COMMUNICATION INTERNATIONAL, INC. 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: [ ] 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))
Cellular Communications International, Inc. - -------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) - -------------------------------------------------------------------------------- (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: 2 CELLULAR COMMUNICATIONS INTERNATIONAL, INC. 110 EAST 59TH STREET NEW YORK, NEW YORK 10022 ------------------------ PROXY STATEMENT AND NOTICE OF 1998 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 3, 1998 ------------------------ The Annual Meeting of Stockholders of Cellular Communications International, Inc. (the "Company") will be held at 9:15 a.m. local time, on Wednesday, June 3, 1998, at The Waldorf Astoria Hotel, fourth floor, Park Avenue Center/North, located at 301 Park Avenue, New York, New York 10022, 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, 1998. 3. To approve an amendment of the Fourth Article of the Company's Restated Certificate of Incorporation to increase the number of authorized shares of Common Stock from 25,000,000 to 75,000,000. 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, 1998, 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 1997 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, 1998 3 CELLULAR COMMUNICATIONS INTERNATIONAL, INC. 110 EAST 59TH STREET NEW YORK, NEW YORK 10022 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 3, 1998 ------------------------ 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, 1998, will be entitled to vote at the meeting. At the close of business on April 14, 1998, 16,516,970 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, 1998. The meeting will be held at 9:15 a.m. local time, on Wednesday, June 3, 1998, at The Waldorf Astoria Hotel, Park Avenue Center/North, located at 301 Park Avenue, New York, New York 10022. 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. 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, 1998, after giving retroactive effect to the 3-for-2 stock split by way of stock dividend, paid on April 14, 1998, by (i) each executive officer and director of the Company, (ii) all directors and executive officers as a group (iii) stockholders holding 5% or more of the Company's Common Stock.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP --------------------------------------------------- PRESENTLY COMPANY EXERCISABLE EXECUTIVE OFFICERS, DIRECTORS AND PRINCIPAL STOCKHOLDERS STOCK OPTIONS(1) TOTAL PERCENT(2) - -------------------------------------------------------- --------- ----------- --------- ---------- William B. Ginsberg(3)............................. 359,746 656,673 1,016,419 5.92% J. Barclay Knapp................................... 139,734 282,028 421,762 2.51 Richard J. Lubasch(4).............................. 43,124 111,784 154,908 * Stanton N. Williams................................ 36,450 111,000 147,450 * Gregg Gorelick..................................... 2,406 58,252 60,658 * Del Mintz(5)....................................... 369,674 52,782 422,456 2.55 Sidney R. Knafel(6)................................ 258,151 52,782 310,933 1.88 Alan J. Patricof(7)................................ 19,395 52,782 72,177 * Warren Potash...................................... 94 52,782 52,876 * All directors and officers as a group (9 in number).. 1,228,774 1,430,865 2,659,639 14.82 Massachusetts Financial Services Company(8)........ 1,871,113 -- -- 11.33 500 Boylston Street Boston, MA 02116 HBK Investments L.P.(9)............................ 1,057,800 -- -- 6.41 HBK Finance L.P.(10) 777 Main Street, Suite 2750 Fort Worth, TX 76102 President and Fellows of Harvard College(10)....... 905,325 -- -- 5.48 600 Atlantic Avenue Boston, MA 02210 T. Rowe Price Associates, Inc.(11)................. 855,300 -- -- 5.18 100 E. Pratt Street Baltimore, MD 21202
- --------------- * Represents less than one percent. (1) Includes shares of Common Stock purchasable upon the exercise of options which are exercisable or become so in the next 60 days ("Presently Exercisable Options"). (2) Includes Common Stock and Presently Exercisable Options. (3) Includes 21,750 shares of Common Stock owned by Mr. Ginsberg's wife, as to which shares Mr. Ginsberg disclaims beneficial ownership. (4) Includes 187 shares of Common Stock owned by Mr. Lubasch as custodian for his child, as to which shares Mr. Lubasch disclaims beneficial ownership. (5) Includes 20,740 shares of Common Stock owned by Mr. Mintz's children or by Mr. Mintz's children as trustees for their children, 43 shares owned by Mr. Mintz's wife and 22,876 shares which were purchased by CBDM, Inc., a subchapter "S" Corporation that is owned by the children and 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. (6) Includes 80,311 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 80,311 shares are owned by an adult child of Mr. Knafel, as to which shares Mr. Knafel disclaims beneficial ownership. (footnotes continued on following page) 2 5 (7) Includes 117 shares of Common Stock owned by Mr. Patricof's wife, 454 shares owned by, or in trust for the benefit of, Mr. Patricof's children as to which Mr. Patricof disclaims beneficial ownership. (8) Based solely upon a Form 13-G, Amendment No. 2, dated February 13, 1998, filed by Massachusetts Financial Services Company. (9) Based solely upon a Form 13-D, dated March 2, 1998, filed by HBK Investments L.P. and HBK Finance L.P. (10) Based solely upon a Form 13-G, dated February 12, 1998, filed by President and Fellows of Harvard College. (11) Based solely upon a Form 13-G, dated February 12, 1998, filed by T. Rowe Price Associates, Inc. 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 regulations 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, 1997, all Section 16(a) filing requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with. 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. Both of the nominees are now serving as directors of the Company and were previously elected by the Company's stockholders. As the result of the resignations of one director in each of April 1994 and June 1997, there are two vacancies on the Board of Directors, and there is no intention to fill these vacancies at this time. 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. 3 6 THE BOARD OF DIRECTORS UNANIMOUSLY 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 1995, 1996 and 1997, 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
POSITION NAME AGE (PROPOSED TERM AS DIRECTOR) - ---- --- --------------------------- Sidney R. Knafel..................... 67 Director (2001) Del Mintz............................ 70 Director (2001)
CONTINUING DIRECTORS WHOSE TERMS ARE NOT EXPIRING
POSITION NAME AGE (TERM AS DIRECTOR) - ---- --- ------------------ William B. Ginsberg.................. 54 Director, President and Chief Executive Officer (1999) J. Barclay Knapp..................... 41 Director, Executive Vice President, and Chief Operating Officer (1999) Alan J. Patricof..................... 63 Director (2000) Warren Potash........................ 66 Director (2000)
Additional information as of April 14, 1998 regarding the two nominees for election as directors and the continuing directors and information regarding executive officers of the Company is as follows: NOMINEES Sidney R. Knafel, 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"), has been Managing Partner of SRK Management Company, a private investment concern, 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 Incorporated ("NTL"), CoreComm Incorporated ("CoreComm") and some privately owned companies. Del Mintz, a director of the Company from and prior to the Distribution, is President of Cleveland Mobile TeleTrak, Inc. and Cleveland Mobile Radio Sales, Inc. and Ohio Mobile TeleTrak, 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 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 1985. Mr. Mintz is also a director of NTL, CoreComm and several privately owned companies. 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. Mr. Ginsberg had also been President, Chief Executive Officer and a director of CCI since its founding in 1981 until its merger in 1996 into a subsidiary of AirTouch Communications Inc. (the "CCI Merger"). 4 7 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 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 and Chief Executive Officer of CoreComm. Alan J. Patricof, a director from and prior to 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, 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 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. EXECUTIVE OFFICERS OTHER THAN DIRECTORS Richard J. Lubasch, 51, 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 NTL and CoreComm. Gregg Gorelick, 39, 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 was Vice President-Controller of CCI from 1986 until the CCI Merger. Mr. Gorelick holds that position at NTL and CoreComm. Stanton N. Williams, 36, 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 at NTL and held at CCI, until the CCI Merger, and at CoreComm until he was appointed Vice-President-Chief Financial Officer in 1997. 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 1997, seven meetings (including regularly scheduled and special meetings) of the Board of Directors were held. Messrs. Knafel 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 1997, the compensation and option committee held two meetings and the audit committee held one meeting. No director during calendar 1997 attended fewer than 88% 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, 1997, Messrs. Knafel, Mintz, Patricof and Potash have each been granted options to purchase an aggregate of 66,282 shares of Common Stock at a weighted average price of $12.20 per share, after giving retroactive effect to the 3-for-2 stock split by way of stock dividend, paid on April 14, 1998. Directors are paid a fee of $250 for each Board Meeting and committee meeting that they attend. 5 8 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, Williams and Gorelick, the cash portion of their compensation is small in light of their compensation from NTL (which is reimbursed to NTL 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. In assessing compensation levels for the named executives, 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 consistent significant 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) is generally set below levels paid by comparable sized telecommunications companies and is supplemented by equity-based option grants. With respect to 1997, the annual salary for each of the named executive officers remained the same as in 1996. In 1997, Messrs. Ginsberg, Lubasch, Williams and Gorelick received bonuses of $120,000, $40,000, $40,000 and $10,000, 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 were granted to certain Company executive officers during 1997. Information with respect to such option grants to the named executives 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. 6 9 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 1995, 1996 and 1997, after giving retroactive effect to the 3-for-2 stock split by way of stock dividend, paid on April 14, 1998, Mr. Ginsberg received options to purchase 112,500 shares of Common Stock at an exercise price of $27.83, 75,000 shares of Common Stock at an exercise price of $22.17 and 90,000 shares of Common Stock at an exercise price of $18.67, respectively, (the fair market value of the Common Stock on the dates of grant). Mr. Ginsberg now owns 359,746 shares of the Company's Common Stock and holds options to purchase an additional 763,173 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 $1 million per executive. THE COMPENSATION AND OPTION COMMITTEE Sidney R. Knafel Del Mintz 7 10 GENERAL The following table discloses compensation received by the Company's Chief Executive Officer and the four other most highly paid executives officers for the three years ended December 31, 1997. SUMMARY COMPENSATION TABLE*
LONG-TERM COMPENSATION AWARDS ANNUAL COMPENSATION COMMON ALL ----------------------- STOCK OTHER SALARY BONUS UNDERLYING COMPENSATION NAME AND PRINCIPAL POSITION YEAR ($) ($) OPTIONS(#)(1) ($) --------------------------- ---- ------ ------- ------------- ------------ William B. Ginsberg...................... 1997 18,000 120,000 90,000 -- Chairman, President and 1996 18,000 130,000 75,000 -- Chief Executive Officer 1995 18,000 100,000 112,500 -- J. Barclay Knapp......................... 1997 18,000 -- -- -- Executive Vice President and 1996 18,000 -- -- -- Chief Operating Officer 1995 18,000 -- 7,500 -- Richard J. Lubasch....................... 1997 12,000 40,000 30,000 -- Senior Vice President -- General 1996 12,000 50,000 22,500 -- Counsel, Treasurer and Secretary 1995 12,000 55,000 22,500 -- Stanton N. Williams(2)................... 1997 12,000 40,000 30,000 -- Vice President - 1996 12,000 50,000 30,000 -- Chief Financial Officer 1995 12,000 55,000 45,000 -- Gregg Gorelick........................... 1997 9,000 10,000 7,500 -- Vice President -- Controller 1996 9,000 20,000 7,500 -- 1995 9,000 25,000 3,750 --
- --------------- * 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 and 1995, CCI charged the Company $232,000 and $896,000, respectively. In August 1996, upon 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 1997 and 1996, NTL charged the Company $871,000 and $351,000, respectively. It is not practicable to determine the amounts of these expenses that would have been incurred had the Company operated as an unaffiliated entity. However, in the opinion of management of the Company, the allocation method is reasonable. The named executives had received salaries from CCI and now receive salaries from NTL and spend portions of their time providing executive management to the Company. (1) After giving retroactive effect to the 3-for-2 stock split by way of stock dividend, paid on April 14, 1998. (2) Mr. Williams was appointed Vice President and Chief Financial Officer in March 1995. 8 11 OPTION GRANTS TABLE The following table provides information on stock option grants during 1997 to the named executive officers. OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE ------------------------------------------------ VALUE AT ASSUMED ANNUAL NUMBER OF % OF TOTAL RATE OF STOCK PRICE SECURITIES OPTIONS APPRECIATION FOR OPTION UNDERLYING GRANTED TO EXERCISE TERM(2) OPTIONS EMPLOYEES OR BASE ----------------------- GRANTED IN FISCAL PRICE EXPIRATION 5%($) 10%($) NAME (#)(1) YEAR ($/SHARE) DATE $30.41 $48.42 ---- ---------- ---------- --------- ---------- ---------- ---------- William B. Ginsberg............... 90,000 53.10% 18.67 03/10/07 1,056,600 2,677,800 J. Barclay Knapp.................. -- -- -- -- -- -- Richard J. Lubasch................ 30,000 17.70 18.67 03/10/07 352,200 892,600 Stanton N. Williams............... 30,000 17.70 18.67 03/10/07 352,200 892,600 Gregg Gorelick.................... 7,500 4.42 18.67 03/10/07 88,050 223,150
- --------------- (1) All options were granted on March 11, 1997 at an exercise price equal to the closing price of the Common Stock on The Nasdaq Stock Market's National Market ("NNM") on such date after giving retroactive effect to the 3-for-2 stock split by way of stock dividend, paid on April 14, 1998; 20% were exercisable upon issuance, 20% became exercisable on January 1, 1998 and an additional 20% will become exercisable on each of January 1, 1999, 2000 and 2001. Upon a change of control of the Company all unvested options become fully vested and exercisable. (2) The amounts shown in these columns are the potential realizable value of options granted at assumed rates of stock price appreciation (5% and 10%) specified by the SEC, and have not been discounted to reflect the present value of such amounts. The assumed rates of stock price appreciation are not intended to forecast the future appreciation of the Common Stock. OPTION EXERCISES AND YEAR-END VALUE TABLE The following table provides information on stock option exercises during 1997 by the named executive officers and the value at December 31, 1997 of unexercised in-the-money options held by each of the named executive officers after giving retroactive effect to the 3-for-2 stock split by way of stock dividend, paid on April 14, 1998. AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR-END AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNDERLYING UNEXERCISED IN-THE- SHARES UNEXERCISED OPTIONS MONEY OPTIONS AT ACQUIRED ON AT FY-END (#) FY-END ($)* EXERCISE VALUE EXERCISABLE(E)/ EXERCISABLE(E)/ NAME (#) REALIZED ($) UNEXERCISABLE(U) UNEXERCISABLE(U) ---- ----------- ------------ -------------------- ------------------- William B. Ginsberg................. -- -- 567,423(E) 12,867,447(E) 195,750(U) 2,116,950(U) J. Barclay Knapp.................... -- -- 264,779(E) 7,239,230(E) 18,750(U) 318,910(U) Richard J. Lubasch.................. -- -- 94,535(E) 2,083,872(E) 48,750(U) 495,630(U) Stanton N. Williams................. 34,877 569,958 81,000(E) 979,080(E) 69,000(U) 698,520(U) Gregg Gorelick...................... 2,250 33,818 53,378(E) 1,454,066(E) 13,125(U) 142,565(U)
- --------------- * Based on the closing price on the NNM on December 31, 1997 of $31.17, after giving retroactive effect to the 3-for-2 stock split by way of stock dividend, paid on April 14, 1998. 9 12 PERFORMANCE GRAPH The following graph sets forth the Company's cumulative shareholder return from December 31, 1992 through December 31, 1997 as well as The Nasdaq Stock Market (U.S.) Index and the Center for Research in Security Prices ("CRSP") Index of Nasdaq Telecommunications Stocks during such time period.
'Cellular NASDAQ NASDAQ Stock Measurement Period Communications Telecommunications Market (U.S.) (Fiscal Year Covered) International, Inc.' Stocks Index 12/31/92 100.00 100.00 100.00 12/31/93 344.58 154.19 114.80 12/30/94 1033.75 128.69 112.21 12/29/95 1015.92 168.51 158.70 12/31/96 689.16 172.29 195.19 12/31/97 1110.98 254.48 239.53
- --------------- Note: Stock price performance shown above for the Common Stock is historical and not necessarily indicative of future price performance. 10 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, 1998. 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 1998 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 THE FOURTH ARTICLE OF THE RESTATED CERTIFICATE OF INCORPORATION OF CCIL TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK (ITEM 3) Subject to approval by stockholders, the Board of Directors has unanimously approved a proposed amendment to the Restated Certificate of Incorporation to increase the number of authorized shares of the Company's Common Stock from 25,000,000 to 75,000,000 shares. As of April 14, 1998, after giving effect to the 3-for-2 stock split by way of stock dividend paid on that date, there was 16,516,970 shares of Common Stock issued and outstanding. Approximately 2,159,000 additional shares of Common Stock were reserved for issuance upon the conversion of the Company's 6% Convertible Subordinated Notes Due 2005 into Common Stock, approximately 2,230,000 additional shares of Common Stock were reserved for issuance upon exercise of options and approximately 673,000 additional shares of Common Stock were reserved for issuance upon exercise of warrants. Accordingly, only a total of approximately 3,421,000 authorized but unissued and unreserved shares of Common Stock are now available for future issuance. The Board of Directors believes the Company's ability to meet business requirements and to take advantage of financial opportunities would be enhanced substantially if the proposed increase in authorized shares is approved. The Board believes that the adoption of the proposed amendment will enable the Company to respond promptly and appropriately to business opportunities, such as to finance acquisitions of other companies or businesses or other transactions with Common Stock and to meet any proper corporate purpose, including, without limitation, opportunities to raise additional funds through equity based financings, or stock splits or dividends, issuance pursuant to stock option or other employee benefit or incentive compensation plans or agreements, and availability upon conversion of debt or equity securities. If the proposed amendment is approved, the Board of Directors could authorize the issuance of additional shares (up to new maximum number of authorized shares) for any proper purpose, at such time and for such consideration as the Board may determine to be appropriate, without further stockholder approval, unless otherwise required by applicable law or by the rules of the Nasdaq or any other stock exchange on which the Company's securities are listed. The Board of Directors believes that if authorization of any increase in the Common Stock were postponed until a specific need arose, the delay and expense incident to obtaining the approval of stockholders at that time might deprive the Company of the flexibility the Board views as important in facilitating the effectiveness of the Company's shares, eliminate the opportunity to effect corporate actions or reduce the anticipated benefits and impair the Company's ability to meet its financing or other objectives. 11 14 The additional shares of Common Stock for which authorization is sought would become part of the existing class of Common Stock and, when issued, would be identical to the shares of Common Stock now authorized and issued. The authorization of additional shares of Common Stock would not have any effect on the rights of existing security holders. No stockholder of the Company has, or as a result of the proposed amendment would have, any pre-emptive right to subscribe for, purchase or otherwise acquire any stock of the Company. Accordingly, if the proposed amendment is approved, a substantial amount of Common Stock would be available for issuance to any entity which might wish to make an investment in the Company on terms deemed by the Board of Directors to be in the best interests of the Company and its stockholders. There are no present active discussions concerning such an investment. However, issuance of additional shares of Common Stock, other than on a pro rata basis to all current stockholders, would dilute the voting rights of present holders of any additional shares of Common Stock and other relevant facts and circumstances, it is possible that issuance of such Common Stock could have a dilutive effect on the stockholders' equity and earnings per share attributable to such present holders. While not the intent of the Board of Directors, approval of the proposed amendment could have the effect of discouraging a takeover attempt in that the Company's Board could consider issuing the additional shares of Common Stock to impede any unsolicited bid for control of the Company which the Board believed was not in the best interests of the Company and its stockholders. Availability as a defensive response to a takeover attempt was not a motivating factor in the Board's approval of the proposed amendment. No takeover bid has been proposed to or discussed with the Company and, to the Company's best knowledge, no such bid is under consideration. The affirmative vote of the holders of a majority of the outstanding shares of Common Stock as a class is required for approval of this amendment. Abstentions and broker non-votes will have the same effect as votes against approval of the proposed amendment. The first paragraph of the Fourth Article of the Restated Certificate of Incorporation, including the changes effected by the proposed amendment to increase the number of authorized shares of Common Stock, will be substantially in the form set forth in Appendix A attached to this Proxy Statement. STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING Proposals of stockholders intended to be presented at the 1999 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 Board of Directors is not aware of any matters other than those set forth in this Proxy Statement that will be presented for action at the Annual Meeting and does not intend to bring any other matters before the Annual Meeting. However, if any other matters should properly come before the Annual Meeting, or at any adjournment or postponement 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, 1998 12 15 APPENDIX A FOURTH: A. AUTHORIZED CAPITAL. The total number of shares of stock which the Corporation shall have the authority to issue is 77,500,000 consisting of 75,000,000 shares of common stock, par value $0.01 per share (the "Common Stock"), and 2,500,000 shares of preferred stock, par value $0.01 per share (the "Preferred Stock"). 13 16 PROXY CELLULAR COMMUNICATIONS INTERNATIONAL, INC. 110 EAST 59TH STREET, NEW YORK, N.Y. 10022 SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING ON JUNE 3, 1998 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 9:15 a.m., local time, on Wednesday, June 3, 1998, at The Waldorf Astoria Hotel, fourth floor, Park Avenue Center/North, located at 301 Park Avenue, New York, New York 10022 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: Sidney R. Knafel and Del Mintz [ ] VOTE FOR both nominees listed, except as [ ] VOTE WITHHELD from both nominees. marked to the contrary above. (TO WITHHOLD YOUR VOTES FOR EITHER INDIVIDUAL NOMINEE STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
2. Ratify the appointment of Ernst & Young LLP as the independent auditors of the Company for the fiscal year ending December 31, 1998. [ ] FOR [ ] AGAINST [ ] ABSTAIN 3. To approve an amendment of the Fourth Article of the Company's Restated Certificate of Incorporation to increase the number of authorized shares of Common Stock from 25,000,000 to 75,000,000. [ ] FOR [ ] AGAINST [ ] ABSTAIN (Please date and sign on reverse side and return promptly.) 17 (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, 1998 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. -----END PRIVACY-ENHANCED MESSAGE-----