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
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED
BY RULE 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c)or Rule 14a-12
CELLPOINT INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction
applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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CELLPOINT INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
DECEMBER 5, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
CELLPOINT INC., a Nevada corporation, will be held at Piperska Muren,
Scheelegatan 14, 112 28 Stockholm, Sweden, on December 5, 2001, at 4:00 P.M.,
local time, for the following purposes:
1. To elect six directors to serve until their respective successors are
elected and qualified;
2. To consider and act upon a proposal to approve an amendment to the
Company's Articles of Incorporation to increase the authorized common
stock of the Company from 22,000,000 shares of common stock, par value
$.001 per share, to 50,000,000 shares of common stock, par value $.001
per share.
3. To consider and act upon a proposal to approve an amendment to the
Company's Articles of Incorporation to increase the authorized preferred
stock of the Company from 3,000,000 shares of non-voting preferred stock,
par value $.001 per share, to 10,000,000 shares of preferred stock, par
value $.001 per share, having such rights and preferences, including
voting rights, as the Board of Directors of the Company may determine.
4. To consider and vote upon a proposal to approve an amendment to the
Company's Stock Warrant Plan;
5. To ratify the retention of BDO Seidman, LLP as the Company's independent
auditors; and
6. To transact such other business as may be properly brought before the
meeting and all adjournments thereof.
Only stockholders of record at the close of business on October 19, 2001,
will be entitled to notice of, and to vote at, the meeting and any adjournment
thereof.
THE BOARD OF DIRECTORS OF CELLPOINT INC. HOPES THAT YOU WILL FIND IT
CONVENIENT TO ATTEND THE MEETING IN PERSON. IN ANY EVENT, PLEASE MARK, SIGN,
DATE AND RETURN THE ENCLOSED PROXY TO MAKE SURE THAT YOUR SHARES ARE REPRESENTED
AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE THE PROXY YOU HAVE
SENT IN AND VOTE YOUR STOCK PERSONALLY.
By Order of the Board of Directors,
LYNN DUPLESSIS,
Secretary
Surrey, England
November 8, 2001
CELLPOINT INC.
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PROXY STATEMENT
------------------------
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of CellPoint Inc., a Nevada corporation (the "Company"), of
proxies to be voted at the Annual Meeting of Stockholders of the Company to be
held at Piperska Muren, Scheelegatan 14, 112 28 Stockholm, Sweden, on
December 5, 2001, at 4:00 P.M., local time, or at any adjournment or
adjournments thereof. Only stockholders of record at the close of business on
October 19, 2001, shall be entitled to notice of, and to vote at, the meeting.
Shares represented by duly executed proxies received by the Company will be
voted in accordance with the instructions contained therein and, in the absence
of specific instructions, will be voted as follows:
- FOR the election as directors of persons who have been nominated by the
Board of Directors;
- FOR the approval of the amendment to the Company's Articles of
Incorporation to increase the authorized common stock of the Company from
22,000,000 shares of common stock, par value $.001 per share, to
50,000,000 shares of common stock, par value $.001 per share.
- FOR the approval of the amendment to the Company's Articles of
Incorporation to increase the authorized preferred stock of the Company
from 3,000,000 shares of non-voting preferred stock, par value $.001 per
share, to 10,000,000 shares of preferred stock, par value $.001 per share,
having such rights and preferences, including voting rights, as the Board
of Directors of the Company may determine.
- FOR the approval of the amendment to the Company's Stock Warrant Plan;
- FOR the ratification of BDO Seidman, LLP as the Company's independent
auditors; and
- Otherwise in accordance with the judgment of the person or persons voting
the proxies on any other matter that may properly be brought before the
meeting.
At this time, the Board of Directors knows of no other such matters that
will be presented for consideration at the Annual Meeting. The execution of a
proxy will in no way affect a stockholder's right to attend the Annual Meeting
and to vote in person. Any proxy executed and returned by a stockholder in
response to this Proxy Statement may be revoked at any time thereafter except as
to any matter or matters upon which, prior to such revocation, a vote shall have
been cast pursuant to the authority conferred by such proxy.
The election of directors requires a plurality of the votes cast thereon.
The proposal to approve the amendment to the Company's Articles of Incorporation
to increase the authorized capital of the Company requires the affirmative vote
of a majority of the outstanding shares of Common Stock. The proposal to approve
the amendment to the Company's Stock Warrant Plan requires the affirmative vote
of a majority of the votes cast thereon. The ratification of independent
auditors requires the affirmative vote of a majority of the votes cast thereon.
For purposes of determining the number of votes cast with respect to a
particular matter, only those cast "for" or "against" are included. Shares
represented by proxies marked to withhold authority to vote, and shares
represented by proxies that indicate that the broker or nominee stockholder
thereof does not have discretionary authority to vote them, will be counted only
to determine the existence of a quorum at the Annual Meeting.
This Proxy Statement and the accompanying proxy are being sent on or about
November 8, 2001, to stockholders entitled to vote at the Annual Meeting of
Stockholders. The cost of solicitation of the Company proxies will be borne by
the Company. In addition to the use of the mails, proxy solicitations may be
made by telephone, telecopier and personal interview by officers, directors and
employees of the Company. However, proxies granted in response to this Proxy
Statement may be made in writing by signing the enclosed proxy card or through
electronic means being made available by the Company.
The Company will, upon request, reimburse brokerage houses and persons
holding shares in their names or in the names of their nominees for their
reasonable expenses in sending soliciting material to their principals. The
Company's executive offices are located at 3000 Hillswood Drive, Hillswood
Business Park, Chertsey, Surrey KT16 0RS, England. The Company's telephone
number is +44 1932 895 310.
VOTING SECURITIES AND SECURITY OWNERSHIP
Only stockholders of record at the close of business on October 19, 2001,
will be entitled to vote at the Annual Meeting of Stockholders and any
adjournment thereof. At the close of business on October 19, 2001, there were
outstanding 17,069,622 shares of Common Stock, $.001 par value, of the Company.
Each of such shares is entitled to one vote. There was no other class of voting
securities outstanding at that date.
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of October 19, 2001, by (i) each
person who is known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock; (ii) each of the Company's officers and
directors; and (iii) all officers and directors as a group. Unless otherwise
noted below, each such person had sole voting and investment power over such
shares.
NAME AND ADDRESS OF BENEFICIAL SHARES OF COMMON STOCK PERCENT OF COMMON STOCK
OWNERS AND DIRECTORS AND OFFICERS BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------------------------------------------- ---------------------- -----------------------
5% BENEFICIAL OWNERS
Novel Electronics Systems & Technologies Ltd........... 2,315,400 13.6%
5 Duke of Edinburgh Ave
Port Louis, Mauritius
DIRECTORS AND EXECUTIVE OFFICERS
Stephen Childs......................................... 19,500(a) *
4800 Abbey Road
Placerville, California 95667
United States
Lynn Duplessis......................................... 2,150,000(b) 12.5%
Peter Henricsson.......................................
3000 Hillswood Drive
Hillswood Business Park
Chertsey, Surrey KT16 0RS
England
Mats Jonnerhag......................................... 26,023(c) *
Borsinsikt AB
Box 6044
S-192 06 Sollentuna
Sweden
Bengt Nordstrom........................................ 35,000(d) *
Northstream AB
Sjoangsvagen 7
S-19172 Sollentuna
Sweden
Lars Persson........................................... 30,000(e) *
126 A Old Working Road
Pyrford
Surrey GU 22 8PB
England
Lars Wadell............................................ 14,000(f) *
Artillergatan 50
5 Tr, SE-114 54 Stockholm
Sweden
Jan Rynning............................................ 15,000(g) *
Fyris torg 6
P.O. Box 1111,
751 41 Uppsala
Sweden
Officers and Directors as a Group (7 persons).......... 2,289,523 13.4%
(FOOTNOTES ON FOLLOWING PAGE.)
2
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* Less than 1%
(a) Mr. Childs holds options to acquire 40,000 shares, of which 19,500 are
currently exercisable.
(b) Ms. Duplessis and Mr. Henricsson are husband and wife, and each of them
is a director and an executive officer of the Company. Includes
(1) 1,500,000 shares beneficially owned by Peter Henricsson, (2) 500,000
shares beneficially owned by Ms. Duplessis; (3) options to acquire 75,000
shares issued to Ms. Duplessis, and (4) options to acquire 75,000 shares
issued to Mr. Henricsson.
(c) Includes (1) 1,550 shares held by Borsinsikt AB, of which Mr. Jonnerhag
is a 66% stockholder (owning 1,023 shares) and (2) options to acquire
25,000 shares, all of which are exercisable.
(d) Mr. Nordstrom holds options to acquire 35,000 shares, all of which are
currently exercisable.
(e) Mr. Persson holds options to acquire 90,000 shares, of which 30,000 are
currently exercisable.
(f) Mr. Wadell holds options to acquire 40,000 shares, of which 14,000 are
currently exercisable.
(g) Mr. Rynning holds warrants to purchase 15,000 shares, at an exercise
price of $2.48 per share, 7,500 of which are exercisable in the six-month
period commencing October 31, 2002, and 7,500 are exercisable in the
six-month period commencing October 31, 2003.
For the purpose of the foregoing table, each of the directors and executive
officers is deemed to be the beneficial owner of shares that may be acquired by
him or her within 60 days through the exercise of options, if any, and such
shares are deemed to be outstanding for the purpose of computing the percentage
of the Company's Common Stock beneficially owned by him or her and by the
directors and executive officers as a group. Such shares, however, are not
deemed to be outstanding for the purpose of computing the percentage of the
Company's Common Stock beneficially owned by any other person.
The foregoing table does not include shares issuable upon conversion of
notes and exercise of warrants currently held by Castle Creek Technology
Partners LLC ("Castle Creek"). On December 6, 2000, the Company and Castle Creek
entered into a Securities Purchase Agreement pursuant to which the Company
issued to Castle Creek 6% convertible notes in the aggregate original principal
amount of $10,000,000 and five-year warrants to purchase up to 210,526 shares of
Common Stock. The notes are not convertible and the warrants are not exercisable
to the extent that, after giving effect to such conversion and exercise, Castle
Creek would be the beneficial owner of more than 4.99% of the outstanding shares
of the Company's Common Stock. On July 25, 2001, the Company and Castle Creek
entered into a Note Purchase, Modification and Forebearance Agreement (the "July
Agreement"), pursuant to which the Company has agreed to purchase the remaining
$9.25 million principal amount in convertible notes currently held by Castle
Creek. The Company became obligated to pay $3.0 million to Castle Creek by
September 24, 2001 and $4.955 million by October 23, 2001 (of which
$1.0 million was paid as a non-refundable deposit on July 25, 2001), plus all
accrued and unpaid interest from the original issuance date through October 23,
2001 or, if earlier, the date of the purchase. As part of the transaction, the
Company has issued to Castle Creek five-year warrants to purchase 500,000 shares
of Common Stock, exercisable after one year, at an exercise price of $3.14 per
share (subject to specified anti-dilution adjustment). The shares issuable upon
exercise of such warrants are to be registered with the Securities and Exchange
Commission. In addition, the Company has granted to Castle Creek a security
interest in its assets (including the assets of its subsidiaries), including its
intellectual property. Castle Creek has agreed not to trade in the Company's
stock effective July 25, 2001 until the note repurchase is completed. The fixed
conversion price of the notes was changed to $4.00 with no floating conversion
price if the notes are purchased on a timely basis and the Company complied with
all its other obligations to Castle Creek in all material respects. The Company
also agreed to certain limitations on the terms of future debt and equity
financings, which limitations would not apply to a financing that provided the
proceeds for the final purchase of the notes. The Company granted Castle Creek a
full release of all claims and agreed not to disparage Castle Creek; Castle
Creek agreed not to disparage the Company.
3
On September 26, 2001, the Company and Castle Creek entered into an
amendment of the July Agreement to repurchase the convertible notes currently
held by Castle Creek and related matters. Pursuant to the amendment, the Company
paid $2.25 million to Castle Creek on September 26, 2001 for principal and
accrued interest. The remaining outstanding convertible notes will be subject to
a fixed conversion price of $4.00, and are scheduled to be repurchased on
October 1, 2002 for approximately $6.1 million plus accrued interest (subject to
specified adjustments in the event of a material breach by the Company). The
outstanding notes are prepayable in part or in whole at any time. The July
Agreement, except as modified by the amendment, remains in effect.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Six directors are to be elected at the Meeting for terms of one year each
and until their respective successors shall be elected and qualified. It is
intended that votes will be cast pursuant to such proxy for the election of the
six persons whose names are first set forth below unless authority to vote for
one or more of the nominees is withheld by the enclosed proxy, in which case it
is intended that votes will be cast for those nominees, if any, with respect to
whom authority has not been withheld. Each of the nominees is currently serving
as a director of the Company. In the event that any of the nominees should
become unable or unwilling to serve as a director, it is intended that the proxy
be voted, unless authority is withheld, for the election of such person, if any,
as shall be designated by the Board of Directors.
DIRECTORS WILL BE ELECTED BY A PLURALITY OF THE VOTES CAST AT THE MEETING.
The following sets forth information concerning each person nominated to
serve as a director of the Company:
STEPHEN CHILDS, 53, has been a director of the Company since May 2000. He
has more than 15 years international experience in the telecom industry and has
held senior management positions with Orange from 1997-2000 as Group
Director-New Business Ventures; Deutsche Telecom from 1995-1996 as Vice
President, International Business Development; US West International from
1993-1995, Assistant Vice President; Pakcom from 1990-1993 as CEO and McCaw
Cellular from 1986-1988 in the United States as General Manager. He has over
20 years of proven success in general management, sales and marketing and an
extensive network in the telecom industry.
LYNN DUPLESSIS, 41, has been Executive Vice President and Secretary, and
director of the Company since its formation. From the Company's formation until
October 2000, Ms. Duplessis served as the Company's Chief Financial Officer. She
has 20 years of experience in the information technology field. Ms. Duplessis
has been employed by Minerva Technology Inc, Vancouver, British Columbia,
(1996), director of industry solutions with The Capstan Group, Vancouver,
British Columbia, (1992-1993), and was employed in marketing, management and
systems engineering by IBM Canada Ltd., Vancouver, British Columbia and Toronto,
Ontario, Canada (1981-1992). Ms. Duplessis is married to Peter Henricsson, a
director and the President of the Company.
PETER HENRICSSON, 49, has been Chairman and President, Chief Executive
Officer, and director of the Company since its formation. He has over 20 years
of experience in executive management, international marketing, venture capital,
consulting and financing, with both multinational corporations and emerging
companies. Mr. Henricsson has been President of Iform Sverige AB of Sweden,
(1996-1997), owner of HIM Inc. (Henricsson International Marketing), Vancouver,
British Columbia, (1991-1996), senior vice president with Allied Environmental,
Vancouver, British Columbia, (1986-1991), and manager at Atlas Copco MCT AB,
Stockholm, Sweden, Hong Kong and Indonesia (1980-1986). Mr. Henricsson is
married to Lynn Duplessis, a director and Secretary and Treasurer of the
Company.
4
BENGT NORDSTROM, 44, has been a director of the Company since 1998. He was
the Chief Technology Officer and Executive Director of SmarTone
Telecommunications Ltd., a cellular network operator in Hong Kong, until
January 1999. He is now the President and Senior Partner of Northstream AB of
Sweden, a GSM consulting company specializing in data over GSM. Mr. Nordstrom
has been a member of the Executive Committee of the GSM MoU association which
represents the interests of more than 400 GSM and satellite network operators
around the world. He was with SmarTone from 1993 to 1998, and was previously
with Comviq GSM AB from 1989 to 1993 and with Ericsson Telecom AB from 1983 to
1989.
LARS PERSSON, 44, has been a director of the Company since June 2000. He was
President of CellPoint Europe from September 2000 to October 2001, and was
President of Telia Mobile International and Executive Vice President of Telia, a
leading mobile operator in the Nordic countries, from 1997 - 2000. He was the
Managing Director for France Telecom in the Nordic countries from 1992 - 1997.
From 1986 - 1992, he was the Managing Director of GPI Sweden, a wholly-owned
subsidiary of the Norwegian public company GPI A/S. Prior to that he held other
senior management positions in telecommunications and technology companies
dating back to 1980. He is currently the managing director of Telenordia AB, a
Swedish subsidiary of Telenor in Norway.
JAN RYNNING, 50, became a board member in October 2001. Mr. Rynning has been
a lawyer and associate partner at the Swedish law firm Ahlford Advokatbyra since
1995 and has focused on business law, company restructuring, international
contract law and international negotiations. Mr. Rynning has been a director of
several public and private companies and is currently on the boards of several
Swedish companies including Enea Data AB, AB C A Osterberg, Ahlford Advokatbyra,
Mala GeoScience AB and its American subsidiary Mala GeoScience USA, and B.
Jensen Rederi Aps, a Danish company.
Mr. Henricsson and Ms. Duplessis are husband and wife. Otherwise, none of
the directors has any family relationship with any other director or with any
executive officer of the Company.
The Board of Directors held five meetings during the Company's fiscal year
ended June 30, 2001. Otherwise, the Board of Directors acted by unanimous
written consent. All directors attended at least 75% of the meetings of the
Board of Directors or committees thereof.
The Board of Directors has a Nominating Committee, consisting of
Messrs. Childs and Persson and Ms. Duplessis. The Nominating Committee meets
once annually to nominate a slate of directors to be submitted to stockholders
at the Annual Meeting.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Company focuses primarily on: (a) the adequacy of
the Company's internal controls and financial reporting process and the
reliability of the Company's financial statements; (b) the independence and
performance of the Company's independent auditors; and (c) the Company's
compliance with financial regulatory requirements.
We meet with management of the Company no less than quarterly to consider
the adequacy of the Company's internal controls and the objectivity of its
financial reporting. We also discuss these matters with the Company's
independent auditors and the Company's financial and accounting personnel.
The Company's independent auditors and the Company's internal financial and
accounting personnel have unrestricted access to the members of the Audit
Committee.
The Audit Committee's functions are described in further detail in the Audit
Committee Charter adopted by the Board of Directors on July 7, 2000, and filed
as an exhibit to the Company's Proxy Statement for its Annual Meeting of
Stockholders held on December 6, 2000.
5
Messrs. Jonnerhag and Childs, directors of the Company who serve on the
Audit Committee, are "independent" for purposes of the NASDAQ National Market
Listing Standards. The Board of Directors of the Company has determined that
Messrs. Jonnerhag and Childs do not have a relationship with the Company which
may interfere with their independence from the Company and its management.
Ms. Duplessis, who serves as a member of the Audit Committee, is not an
independent member of the Audit Committee as she is also the Executive Vice
President and Secretary of the Company. The Board of Directors has appointed
Ms. Duplessis to the Audit Committee because it has determined that
Ms. Duplessis' participation in the Committee is required in the best interests
of the Company and its stockholders. The Board has reached these conclusions
based on the extensive involvement by Ms. Duplessis in and her knowledge of all
of the operations of the Company and its consolidated subsidiaries.
The Audit Committee had four meetings during Fiscal 2001. The Audit
committee has reviewed and discussed the audited financial statements of Fiscal
2001 with management. The Audit Committee has discussed with the independent
auditors the matters required to be discussed under Statement on Auditing
Standards 61 as modified. The Audit Committee has inquired as to the independent
accountant's independence and has received the written disclosures and the
letter required by Independence Standards Board Standard No. 1, Independence
Discussions with Committees. Based upon the foregoing, the Audit Committee
recommended to the Board of Directors that the audited financial statements for
Fiscal 2001 be included in the Company's Annual Report on Form 10-KSB.
Stephen Childs
Lynn Duplessis
Mats Jonnerhag
INDEPENDENCE OF ACCOUNTANTS
BDO Seidman, LLP, a member firm of BDO International ("BDO Seidman") acted
as the Company's independent auditors for the fiscal year ended June 30, 2001.
The Audit Committee of the Board of Directors has considered whether the
provision of services referred to below under "Financial Information Systems
Design and Implementation Fees" and "All Other Fees" by BDO Seidman is
compatible with maintaining BDO Seidman's independence.
AUDIT FEES. For the fiscal year ended June 30, 2001, the Company paid to
BDO Seidman and other member firms of BDO International approximately $378,000
in aggregate fees for professional services rendered for the audit of the
Company's annual financial statements for such fiscal year and for the reviews
of the financial statements of the Company included in the Company's quarterly
reports for such fiscal year.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION. During the fiscal
year ended June 30, 2001, the Company did not engage BDO Seidman to (a) operate
or supervise the Company's information systems or local area network,
(b) design or implement a hardware or software system that aggregates source
data underlying the Company's financial statements or that generates information
that would be significant to the Company's financial statements.
ALL OTHER FEES. For all other services, the Company paid an aggregate of
approximately $240,000 in fees to BDO Seidman and other member firms of BDO
International during the last fiscal year. These services included tax advice
and corporate structuring advice.
COMPENSATION OF DIRECTORS
The directors of the Company do not receive salaries for being directors but
do have options or warrants in the Company. Messrs. Henricsson and Persson and
Ms. Duplessis have been compensated for their services to the Company or its
subsidiaries in their respective capacities as officers of the Company or its
subsidiaries, and not as directors of the Company.
6
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table shows compensation for services rendered to the Company
during the fiscal years ended June 30, 2001, 2000 and 1999, respectively, by the
Chief Executive Officer, the Executive Vice President and the Chief Financial
Officer of the Company, and by the President of CellPoint Europe, Ltd., a
principal subsidiary of the Company. Each executive officer serves under the
authority of the Board of Directors. Directors who are also employees of the
Company receive no extra compensation for their service on the Board of
Directors of the Company.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
--------------------------------------- ----------------------------------------------------
AWARDS PAYOUTS
-------------------------- --------
RESTRICTED SECURITIES
OTHER STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY ANNUAL AWARD(S) OPTIONS/ SARS PAYOUTS COMPENSATION
POSITION YEAR ($) BONUS ($) COMPENSATION ($) ($) (#) ($) ($)
--------------------- -------- -------- --------- ---------------- ---------- ------------- -------- ------------
Peter Henricsson, ... 2001 $200,000 -- $ 20,000(1) -- -- -- --
President & CEO 2000 $140,000 -- $ 6,500(1) -- -- -- --
1999 $ 71,000 -- -- -- -- -- --
Lynn Duplessis, ..... 2001 $168,000 -- $ 20,000(2) -- -- -- --
Executive Vice 2000 $125,000 -- $ 6,500(2) -- -- -- --
President and 1999 $ 60,000 -- -- -- -- -- --
Secretary
Lars Persson, ....... 2001 $294,000 -- $ 98,000(3) -- -- -- --
President, 2000 -- -- -- -- 90,000/0 -- --
CellPoint Europe
Ltd.
Lars Wadell, ........ 2001 $140,000 -- -- -- 40,000/0 -- --
Chief Financial
Officer
--------------------------
1. Represents housing allowance paid on behalf of Mr. Henricsson.
Mr. Henricsson and Ms. Duplessis are husband and wife.
2. Represents housing allowance paid on behalf of Ms. Duplessis.
Mr. Henricsson and Ms. Duplessis are husband and wife.
3. Represents housing allowance of $50,000, car allowance of $18,000, and
tuition reimbursement of $31,000.
OPTION GRANTS IN LAST FISCAL YEAR
The Company granted the following options to executive officers during
Fiscal 2001:
INDIVIDUAL GRANTS
-----------------------------------------------------------------
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE
NAME GRANTED (#)(1) FISCAL YEAR ($/SH) EXPIRATION DATE
---- -------------- ---------------- ----------- ---------------
Lars Wadell............................ 40,000/0 16.3% $14.625 November 2010
------------------------
(1) The Company did not grant any SARs during Fiscal 2001.
(2) The options granted vest in installments over eighteen to twenty-eight
months. The options fully vest in the event of a change in control of the
Company.
7
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
The following table sets forth as to each person named in the Summary
Compensation Table the specified information with respect to option exercises
during fiscal 2001 and the status of their options at the end of fiscal 2001.
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY(4)
NUMBER OF OPTIONS/SARS AT FISCAL OPTIONS/SARS AT
SHARES VALUE YEAR-END FISCAL YEAR-END ($)(5)
ACQUIRED ON REALIZED ---------------------------- ----------------------------
NAME EXERCISE ($)(1) EXERCISABLE NONEXERCISABLE EXERCISABLE NONEXERCISABLE
---- ----------- -------- ----------- -------------- ----------- --------------
Peter Henricsson.......... -- -- 75,000(2) -- $3,750 --
Lynn Duplessis............ -- -- 75,000(3) -- $3,750 --
Lars Persson.............. -- -- 30,000 60,000 -- --
Lars Wadell............... -- -- -- 40,000 -- --
------------------------
(1) The "value realized" represents the difference between the exercise price of
the option shares and the market price of the option shares on the date the
option was exercised. The value realized was determined without considering
any taxes which may become payable in respect of the sale of any such
shares.
(2) Excludes options to acquire 75,000 shares owned by Lynn Duplessis,
Mr. Henricsson's wife.
(3) Excludes options to acquire 75,000 shares owned by Peter Henricsson,
Ms. Duplessis' husband.
(4) "In-the-money" options are options whose exercise price was less than the
market price of Common Stock at June 30, 2001.
(5) Based on a stock price of $2.80 per share, which was the closing price of a
share of Common Stock reported on the Nasdaq National Market on June 29,
2001.
EMPLOYMENT CONTRACTS
The Company has employment agreements with its executive officers: Peter
Henricsson, Lynn Duplessis and Lars Wadell.
The Company has an agreement with Mr. Henricsson pursuant to which
Mr. Henricsson now receives a base salary of 132,000 Pounds Sterling per year.
Such employment agreement is for a term of two years, subject to automatic
renewals and certain rights of termination as specified therein. Mr. Henricsson
is entitled to one year's severance if his employment is terminated in certain
circumstances. In addition, if Mr. Henricsson's employment is terminated within
12 months following a "change of control", Mr. Henricsson shall be entitled to
receive his base salary for one year following such termination, and all then
non-exercisable options shall become vested.
The Company has an agreement with Ms. Duplessis pursuant to which
Ms. Duplessis receives a base salary of 120,000 Pounds Sterling per year. Such
employment agreement is for a term of three years, subject to automatic renewals
and certain rights of termination as specified therein. Ms. Duplessis is
entitled to one year's severance if her employment is terminated in certain
circumstances. In addition, if Ms. Duplessis' employment is terminated within
12 months following a "change of control", Ms. Duplessis shall be entitled to
receive her base salary for one year following such termination, and all then
non-exercisable options shall become vested.
The Company has an employment agreement with Lars Wadell, the Company's
Chief Financial Officer, pursuant to which Mr. Wadell receives a base salary of
96,000 Pounds Sterling per year.
The Company has no set bonus policy. Bonuses may be awarded by the
independent directors of the Board. There is no bonus plan currently under
discussion or in place with the Company. The Board
8
has established a salary review committee consisting of Messrs. Persson,
Jonnerhag and Henricsson. This committee also reviews salaries for all staff.
This informal committee meets once annually for annual salary reviews, and
otherwise as the needs arise in connection with determining compensation for new
employees. The directors of the Company do not receive salaries for being
directors but do have options in the Company.
STOCK INCENTIVE PLAN
The Board of Directors of the Company has adopted a stock incentive plan
(the "Plan"). Pursuant to the provisions of the Plan, 2,000,000 shares of the
Company's Common Stock are reserved for issuance upon exercise of options. The
Plan is designed to retain qualified and competent officers, employees, and
directors of the Company.
The Company's Board of Directors, or a committee thereof, shall administer
the Plan and is authorized, in its sole and absolute discretion, to grant
options thereunder to all eligible employees of the Company, including officers
and directors (whether or not employees) of the Company. Options will be granted
pursuant to the provisions of the Plan on such terms and at such prices as
determined by the Company's Board of Directors. The exercise price will not be
lower than the closing price on the date the options are issued, or if such
prices are not available, at the fair market value as determined by the Board of
Directors. Options granted under the Plan will be exercisable after the period
specified in the option agreement. Options granted under the Plan will not be
exercisable after the expiration of ten years from the date of grant. The Plan
will also authorize the Company to make loans to optionees to enable them to
exercise their options. During Fiscal 2001, 192,600 options were exercised,
250,300 were cancelled, and 244,900 options were granted. There were 803,100
options outstanding as of October 15, 2001. To date, the Company has not issued
any SAR's.
STOCK WARRANT PLAN
The Company has adopted a stock warrant plan (the "Warrant Plan"). Pursuant
to the provisions of the Warrant Plan, eligible employees, consultants and
affiliates will be given the opportunity to purchase warrants, which warrants
can be exercised, upon vesting, to purchase shares of the Company's Common
Stock. An aggregate of 1,000,000 shares of the Company's Common Stock have been
reserved for issuance pursuant to the Warrant Plan. The Plan is designed
primarily to retain qualified and competent officers, employees, and directors.
The Board of Directors of the Company, or a committee thereof, shall
administer the Plan and is authorized, in its sole and absolute discretion, to
grant options thereunder to all eligible employees, consultants and affiliates
including the Company's officers and directors (whether or not employees).
Warrants will be sold to eligible persons at prices determined by independent
appraisers to be fair market prices at the time of such sale. Each warrant will
have an exercise price equal to no less than either 125% or 150% of the closing
price of the Company's Common Stock on the date immediately preceding the date
of sale. Each warrant sold pursuant to the Warrant Plan will be subject to a
vesting period as determined by the Board of Directors, and will expire no later
than five years from the date of issuance. To date, warrants with respect to an
aggregate of 518,800 shares have been sold.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since the formation of the Company, Peter Henricsson and Lynn Duplessis, the
Company's founders and directors and executive officers, have periodically made
loans to fund the Company's cash needs. Mr. Henricsson and Ms. Duplessis loaned
the Company an aggregate of $300,000 in June and July 1999. Interest of 5% was
charged on the outstanding balance of this loan, which was repaid in full in
December 1999.
9
The Company is currently offering for sale to "non-U.S. Persons" pursuant to
Regulation S under the Securities Act of 1933, as amended, an initial maximum of
80 units, plus if the offering is oversubscribed, an additional 60 units. Each
unit in the Regulation S Offering consists of shares of the Company's Common
Stock and warrants to purchase Common Stock. The shares of Common Stock and the
shares issuable upon exercise of the warrants may, at the request of the holder
thereof, be exchanged for Swedish Depositary Receipts ("SDRs") after those
shares have been registered with the Securities and Exchange Commission ("SEC")
in the United States. As of September 25, 2001, the Company has sold an
aggregate of 95 units, consisting of 1,568,114 shares and 784,071 warrants, for
aggregate gross proceeds of $2,071,130. The placement agent for the
Regulation S offering is Borsinsikt AB. Mats Jonnerhag, a director of the
Company, is a 66% stockholder of Borsinsikt AB. The placement agent will receive
a commission equal to 6% of the proceeds from the Regulation S offering plus
warrants equal to 6% of the number of shares issued. The disinterested members
of the Board of Directors of the Company have approved the terms of this
transaction as being fair to the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own beneficially more than ten
percent of the Company's outstanding Common Stock to file with the SEC initial
reports of beneficial ownership and reports of changes in beneficial ownership
of Common Stock and other securities of the Company on Forms 3, 4 and 5, and to
furnish the Company with copies of all such forms they file. One of the
Company's directors and officers (Mr. Jonnerhag) inadvertently filed his
Statement of Changes of Beneficial Ownership of Securities on Form 4 more than
ten days after the required filing date pursuant to the reporting requirements
of the Securities Exchange Act of 1934. One stockholder beneficially owning more
than ten percent of the Company's Common Stock (Novel Electronics Systems &
Technologies Ltd.) inadvertently filed its Statement of Changes of Beneficial
Ownership of Securities on Form 4 more than ten days after the required filing
date pursuant to the reporting requirements of the Securities Exchange Act of
1934.
MANAGEMENT RECOMMENDS THAT YOU VOTE IN FAVOR
OF THE NOMINEES NAMED TO THE BOARD OF DIRECTORS.
10
PROPOSALS NOS. 2 AND 3
ADOPTION OF AMENDMENTS TO ARTICLES OF INCORPORATION
GENERAL
The Company is currently authorized to issue 22,000,000 shares of common
stock, par value $.001 per share (the "Common Stock"), and 3,000,000 shares of
Preferred Stock, par value $.001 per share (the "Preferred Stock"). As of
October 19, 2001 17,069,622 shares of the Common Stock were issued and
outstanding and no shares of Preferred Stock were outstanding. The Company
wishes to amend certain provisions of the Articles of Incorporation to
(i) increase the authorized common stock of the Company, and (ii) to provide the
Board of Directors with the authority to issue shares of the Corporation's
Preferred Stock with such rights and preferences as the Board may determine from
time to time. The Board of Directors of the Company believes that the best
interests of the Company and its stockholders will be served by adopting the
amendment (the "Amendment") to the Articles of Incorporation that is attached
hereto as EXHIBIT A. On October 17, 2001, the Board of Directors adopted a
resolution approving the Amendment.
The holders of the Common Stock are entitled to one vote for each share held
of record on all matters to be voted on by those stockholders. There is no
cumulative voting with respect to the election of directors of the Company, with
the result that the holders of more than 50% of the Common Stock voted for the
election of directors can elect all of those directors. The holders of the
Common Stock are entitled to receive dividends when, as, and if declared by the
Company's Board of Directors from funds legally available therefor. In the event
of liquidation, dissolution, or winding up of the Company, the holders of the
Common Stock are entitled to share ratably in all assets remaining available for
distribution to them after payment of the Company's liabilities and after
provision has been made for each class of stock, if any, having preference over
the holders of the Common Stock. Holders of shares of the Common Stock, as such,
have no conversion, preemptive or other subscription rights, and there are no
redemption provisions applicable to the Common Stock. All of the outstanding
shares of the Common Stock are fully paid and non-assessable.
The Company is authorized to issue up to 3,000,000 shares of non-voting
Preferred Stock with such other designations, rights and preferences (other than
as to voting rights) as may be determined from time to time by the Board of
Directors. The Preferred Stock currently authorized is non-voting. The Board of
Directors is empowered, without stockholder approval, to issue Preferred Stock
with liquidation privileges, dividend, conversion, or other rights that could
adversely affect the rights of the holders of the Common Stock.
ADDITIONAL AUTHORIZED CAPITAL; CHANGES TO PREFERRED STOCK
The Amendment would increase the total authorized capital stock of the
Company to a of total 60,000,000 shares, consisting of 50,000,000 shares of
Common Stock, and 10,000,000 shares of Preferred Stock. The Board of Directors
would be given the authority to determine all rights associated with the
Preferred Stock, including, but not limited to, determining dividends,
conversion right, redemption prices, maturity dates, and other rights and
preferences. Unlike the current Articles of Incorporation, the Board of
Directors would be permitted to determine the voting rights, if any, associated
with such shares of Preferred Stock.
11
As of the Record Date, the Company has 17,069,622 shares of Common Stock
outstanding. In addition, the Company has reserved shares of Common Stock for
issuance upon derivative securities as set forth below:
NUMBER OF
ISSUANCE TYPE SHARES RESERVED
------------- --------------------
Stock Option Plan........................................... 803,100(1)
Stock Warrant Plan.......................................... 518,800(2)
Castle Creek Notes and Warrants............................. 1,735,526(3)
Private Placement Warrants.................................. 3,028,119(4)
Other Warrants.............................................. 94,959
---------
TOTAL..................................................... 6,180,504
=========
------------------------
(1) Represents only shares with respect to which options have been granted
pursuant to the Company's Option Plan; there are an additional 1,004,300
shares reserved under the Option Plan.
(2) Represents only shares with respect to which warrants have been sold
pursuant to the Warrant Plan; there are an additional 481,200 shares
reserved for issuance under the Warrant Plan.
(3) Does not include 500,000 shares which may be issuable pursuant to currently
non-exercisable warrants held by Castle Creek. Represents 210,526 warrants
exercisable at $11.40 per share, and a $6.1 million note, convertible at
$4.00 per share. Pursuant to its agreement with the Company, Castle Creek
may not convert its notes or exercise its warrants if, after giving effect
thereto, Castle Creek would own more than 4.99% of the outstanding Common
Stock.
(4) Represents warrants issued in September and October 2001 in offerings
described below.
If all of the derivative securities were to be exercised, the Company would
not have sufficient authorized shares of Common Stock to be issued. If the
Amendment is not approved, the Company will be in default under these
instruments.
On September 25, 2001, the Company closed a private placement for
$3.25 million, pursuant to which it issued 3,250,000 shares of Common Stock plus
1,625,000 warrants to purchase shares of Common Stock at an exercise price of
$2.25 per share, exercisable for two years. The units were sold to accredited
investors pursuant to Regulation 506 under the Securities Act of 1933, as
amended (the "Securities Act"). The proceeds from the sale of these units were
used to repurchase a portion of the convertible notes held by Castle Creek.
On September 25, 2001, the Company also completed an offering pursuant to
Regulation S under the Securities Act, in which non-U.S. persons (as that term
is defined in Regulation S) purchased 1,568,144 shares of Common Stock and
784,071 warrants to purchase shares of Common Stock, exercisable at $2.36 per
share for two years. The proceeds from the Regulation S offering aggregated
$2,071,130, and will be used for working capital.
The Company is also currently in the process of completing separate
offerings under Regulation D. The purpose of these offerings is to fund the
working capital needs of the Company. The Company is offering to qualified
accredited investors that are currently stockholders of the Company units
consisting of Common Stock and warrants to purchase Common Stock. The unit
prices are $100,000 in one placement, with a maximum of 70 units to be sold, and
$60,000 in a second placement, with a maximum of 40 units to be sold. If these
offerings are oversubscribed, the Company may issue an additional 50 units and
30 units, respectively. The exact number of shares and warrants comprising each
unit is to be determined by a 20% discount to the volume weighted average price
of the Company's Common Stock on Nasdaq for the five days preceding the closing
of the purchase. There is no minimum number of units to be sold, and there may
be multiple closings. Through the date of this Proxy Statement, the Company has
issued 1,238,096 shares of Common Stock and 619,048 warrants to purchase Common
Stock, half of which are exercisable at $3.50 per share for twelve months and
the
12
other half of which are exercisable at $5.00 per share for twenty-four months.
The Company received proceeds of $1,300,000 from the sale of such securities.
The Company currently anticipates that the offerings will terminate on or about
November 30, 2001.
Accordingly, the Company does not have sufficient authorized but unissued
shares of Common Stock to enable the Company to raise additional capital and to
allow the conversion of the derivative securities listed above. The failure to
approve the proposal to increase the capital stock of the Company will limit the
Company's ability to finance its working capital needs.
The Company is also proposing to increase the number of authorized shares of
Preferred Stock and to amend the terms of Preferred Stock authorized under the
Articles of Incorporation. There are currently 3,000,000 shares of Preferred
Stock authorized, but no shares of Preferred Stock are outstanding. The Articles
of Incorporation currently only permit the Company to issue non-voting shares of
Preferred Stock. The limited number of authorized shares of Preferred Stock and
the limitation on the voting rights of the Preferred Stock as contained in the
current Articles have greatly limited the Company's flexibility in seeking
additional working capital. The Board of Directors has recommended that the
Articles of Incorporation be amended to increase the number of authorized shares
of Preferred Stock and to allow the Board of Directors of the Company the widest
possible flexibility in setting the terms of Preferred Stock that may be issued
in the future. The Company will, therefore, be afforded the greatest flexibility
possible in seeking additional financing, as the Board of Directors deems
appropriate in the exercise of its reasonable business judgment. The Company
currently has no commitments or plans for the issuance of any shares of
Preferred Stock.
If the Amendment is approved, the Board of Directors will have the right,
without further stockholder approval or action, to issue up to 10,000,000 shares
of Preferred Stock, having such rights and preferences, including voting rights,
as the Board of Directors may determine. The ability of the Company to issue
such shares of Preferred Stock may, under certain circumstances, make it more
difficult for a third party to gain control of the Company (e.g., by means of a
tender offer), prevent or substantially delay such a change of control,
discourage bids for the Common Stock at a premium, or otherwise adversely affect
the market price of the Common Stock.
Upon the consent by the stockholders to the adoption of Amendment, the
Company will make the necessary filing of the Amendment with the Secretary of
State of Nevada, and such Amendment will become effective upon filing.
RECOMMENDATION
The Board of Directors has adopted, and recommends that the stockholders
approve the adoption of the Amendment. The Board of Directors of the Company
believes that it is in the best interests of the Company and its stockholders in
the current competitive business environment, that the Amendment be approved so
that the Company can continue to finance its working capital needs. Without
approval of the Amendment, the Company will not have sufficient authorized but
unissued shares of Common Stock to raise funds sufficient to fund the Company's
continuing operations.
APPROVAL OF THE AMENDMENT REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE
OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE PROPOSALS TO APPROVE THE ADOPTION
OF THE AMENDMENTS.
13
PROPOSAL NO. 4
PROPOSAL TO APPROVE THE AMENDMENT TO THE
COMPANY'S STOCK WARRANT PLAN
GENERAL
In April 2000, the Board of Directors of the Company adopted a stock warrant
plan (the "Warrant Plan"). The Warrant Plan was approved by the stockholders of
the Company at the annual meeting of stockholders held in December 2000.
Pursuant to the provisions of the Warrant Plan, 1,000,000 shares of the
Company's Common Stock are reserved for issuance upon exercise of warrants. In
October 2001, the Board of Directors approved an amendment to the Warrant Plan
to increase the number of shares of Common Stock that may be issued under the
Warrant Plan by 500,000 shares, increasing the total number of shares that may
be issued pursuant to the Warrant Plan to 1,500,000. This amendment is now being
submitted to the stockholders for approval.
The Board of Directors recommends approval of the amendment. The Board of
Directors of the Company believes that it is in the best interests of the
Company and its stockholders, in the current competitive business environment,
that the amendment to the Warrant Plan be approved, so that the Company can
continue to attract and retain eligible participants to make significant
contributions to the Company. The Warrant Plan permits certain compensation to
be tailored to support corporate and business objectives and allow the Company
to respond to competitive compensation practices. The amendment, if approved,
would increase the total number of shares authorized for issuance under the Plan
to 1,500,000. The Board of Directors believes that the additional share reserve
is necessary to permit the Company to make available competitive long-term
incentives for Warrant Plan participants to improve the Company's performance
and thereby create stockholder value.
Set forth below is a brief description of the principal features of the
Warrant Plan.
Pursuant to the provisions of the Warrant Plan, eligible employees,
consultants and affiliates are given the opportunity to purchase warrants, which
warrants can be exercised, upon vesting, to purchase shares of the Company's
Common Stock. Employees, consultants and affiliates, including the Company's
officers and directors (whether or not employees), who have been designated as
eligible may participate in the Warrant Plan. The number of persons who would
currently be eligible to participate in the Warrant Plan is approximately 140.
All such warrant awards may be granted singly, in combination or in tandem, or
in substitution for awards granted previously under the Warrant Plan or any
other plan of the Company. The Warrant Plan terminates on April 15, 2010.
As of October 15, 2001, there were 518,800 warrants in the aggregate
outstanding under the Warrant Plan. Shares related to awards (or portions
thereof) that are forfeited, canceled or terminated, expire unexercised, will be
restored to the total number of shares available for issuance pursuant to awards
granted under the Warrant Plan.
The Warrant Plan provides that, in the event of a stock split, stock
dividend, combination or reclassification of shares, recapitalization, merger or
similar event, the Board may determine whether or not proportional adjustments
will be made. In addition, the Board has discretion to determine whether or not
other equitable adjustments shall be made in the event of any other change
affecting the Company's Common Stock or any distribution (other than normal cash
dividends) to stockholders of the Company.
The Warrant Plan provides that it shall be administered by the Board of
Directors of the Company, or a committee consisting of at least two members of
the Board. Under the Warrant Plan, the Board of Directors has the sole
authority, among other things, to grant awards; determine the term, conditions
and limitations of awards; establish rules, procedures, regulations and
guidelines relating to
14
the Warrant Plan generally and to interpret the Warrant Plan and award
agreements entered into pursuant to the Warrant Plan.
Generally, a participant in the Warrant Plan may exercise an award in
accordance with the terms set by the Board, irrespective of whether or not such
person is employed by or associated with the Company or a subsidiary of the
Company at such time.
The exercise price of a warrant granted under the Warrant Plan will be not
less than either 125% or 150% of the fair market value of the Company's Common
Stock on the date of grant, as determined by the Board at the time of grant. The
exercise price of a warrant must be paid in full in cash at the time of
exercise, or, if permitted by the Board, may be paid in whole or in part by the
delivery of shares, the delivery of a promissory note or by any other means
acceptable to the board of directors.
Warrants granted under the Warrant Plan may be subject to acceleration of
exercisability or vesting in the event of a change in control of the Company, as
set forth in agreements between the Company and certain of its officers and
directors which provide for certain protections and benefits in the event of a
change in control (as defined in such agreements) or as may otherwise be
determined by the Board under and in accordance with the terms and conditions of
the Warrant Plan.
The Warrant Plan may not, without the approval of the stockholders as set
forth therein, be amended to materially increase the aggregate number of shares
of the Company's Common Stock that may be issued under the Warrant Plan as
described above. The Warrant Plan may not be changed in such a way as to alter,
impair, amend, modify, suspend or terminate any rights of a participant or any
obligations of the Company under any award theretofore granted in any manner
adverse to such participant without the consent of such participant.
RECOMMENDATION
The Board of Directors has adopted, and recommends that the stockholders
approve the adoption of the amendment to the Warrant Plan. The Board of
Directors of the Company believes that it is in the best interests of the
Company and its stockholders, in the current competitive business environment,
that the amendment to the Warrant Plan be approved, so that the Company can
continue to attract, retain and eligible participants to make significant
contributions to the Company. The Warrant Plan will permit certain compensation
to be tailored to support corporate and business objectives and allow the
Company to respond to competitive compensation practices.
APPROVAL REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST AT
THE MEETING, IN PERSON OR BY PROXY, ON SUCH PROPOSAL.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE PROPOSAL TO APPROVE THE ADOPTION
OF THE AMENDMENT TO THE WARRANT PLAN.
PROPOSAL NO. 5
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed the firm of BDO Seidman,
LLP, a member firm of BDO International ("BDO Seidman"), as its independent
auditors for the fiscal year ending June 30, 2002. At the 2000 Annual Meeting of
Stockholders, the stockholders ratified the appointment of BDO Seidman as the
Company's independent auditors for the fiscal year ended June 30, 2001. While it
is not required to do so, the Board of Directors of the Company is submitting
the retention of BDO Seidman as the Company's independent auditors to the
stockholders for ratification. A representative from BDO International will be
present at the Meeting and will be given the opportunity
15
to make a statement if the representative desires to do so. The representative
is expected to be available to respond to appropriate questions. If the
appointment of BDO Seidman is not ratified by the stockholders of the Company,
the Board of Directors will reconsider the retention of BDO Seidman.
THE BOARD OF DIRECTORS INTENDS THAT THE APPOINTMENT OF THE INDEPENDENT
AUDITORS BE RATIFIED BY A MAJORITY OF THE VOTES CAST.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
"FOR" THE RATIFICATION OF BDO SEIDMAN, LLP
AS THE COMPANY'S INDEPENDENT AUDITORS
SUBMISSION OF STOCKHOLDER PROPOSALS
In order for a stockholder proposal to be eligible for inclusion in the
Company's proxy material relating to its 2002 Annual Meeting it must be in
writing and received by the Secretary of the Company prior to June 30, 2002.
Stockholders wishing to bring any matter before a meeting should consult the
Company's Bylaws with respect to any applicable notice or other procedural
requirements.
ANNUAL REPORT
All stockholders of record on October 19, 2001, have been sent, or are
concurrently being sent, a copy of the Company's 2001 Annual Report, which
contains certified financial statements of the Company for the fiscal year ended
June 30, 2001.
ANY PERSON WHO WAS A STOCKHOLDER OF THE COMPANY AT THE CLOSE OF BUSINESS ON
OCTOBER 19, 2001, MAY OBTAIN ADDITIONAL COPIES OF THE COMPANY'S 2001 ANNUAL
REPORT, WITHOUT CHARGE, BY WRITTEN REQUEST TO THE COMPANY AT 3000 HILLSWOOD
BUSINESS PARK, CHERTSEY, SURREY KT16 0RS ENGLAND, ATTENTION: INVESTOR RELATIONS.
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of no matter other
than those set forth herein which will be presented for consideration at the
Annual Meeting of Stockholders. If any other matter or matters are properly
brought before the meeting or any adjournment thereof, it is the intention of
the person named in the accompanying proxy to vote, or otherwise act, on such
matters in accordance with his judgment.
LYNN DUPLESSIS,
Secretary
Surrey, England
November 8, 2001
16
EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
CELLPOINT INC.
CELLPOINT INC., a corporation organized under the laws of the State of
Nevada (the "Company"), by its president (or vice-president) and secretary (or
assistant secretary) does hereby certify:
1. That the Company is currently authorized to issue 22,000,000 shares
of common stock, par value $.001 per share (the "Common Stock"), and
3,000,000 shares of Preferred Stock, par value $.001 per share (the
"Preferred Stock").
2. That the board of directors of the Company, acting by unanimous
written consent, dated Ocotber 17, 2001, passed a resolution declaring that
the following change and amendment in the articles of incorporation is
advisable.
3. That ARTICLE FOUR of the Articles of Incorporation of the Company be
deleted in its entirety and the following be substituted therefor:
"ARTICLE FOUR. [CAPITAL STOCK].
(a) The Corporation shall have authority to issue a total of Sixty
Million (60,000,000) shares, of which Fifty Million (50,000,000) shares
shall be Common Stock, par value $.001 per share (the "Common Stock"), and
Ten Million (10,000,000) shares shall be Preferred Stock, par value $.001
per share (the "Preferred Stock").
(b) Shares of the Preferred Stock may be issued from time to time in
series, and the Board of Directors is authorized, subject to the limitations
provided by law, to establish and designate one or more series of the
Preferred Stock, to fix the number of shares constituting each series, and
to fix the designations and rights, preferences and limitations of each
series and the variations and relative rights, preferences and limitations
as between series, and to increase and to decrease the number of shares
constituting each series. The authority of the Board of Directors with
respect to each series shall include, but shall not be limited to, the
authority to determine the following:
(i) the designation of such series;
(ii) the number of shares initially constituting such series and any
increase or decrease (to a number not less than the number of outstanding
shares of such series) of the number of shares constituting such series
theretofore fixed;
(iii) the rate or rates at which dividends on the shares of such
series shall be paid, including, without limitation, any methods or
procedures for determining such rate or rates, and the conditions on, and
the times of, the payment of such dividends, the preference or relation
that such dividends shall bear to the dividends payable on any other
class or series of stock of the Corporation, and whether or not such
dividends shall be cumulative and, if so, the date or dates from and
after which they shall accumulate;
(iv) whether or not the shares of such series shall be redeemable,
and, if so, the terms and conditions of such redemption, including,
without limitation, the date or dates on or after which such shares shall
be redeemable and the amount per share that shall be payable on
A-1
such redemption, which amount may vary under different conditions and at
different redemption dates;
(v) the rights to which the holders of the shares of such series
shall be entitled on the voluntary or involuntary liquidation,
dissolution or winding up or on any distribution of the assets, of the
Corporation, which rights may be different in the case of a voluntary
liquidation, dissolution or winding up than in the case of such an
involuntary event;
(vi) whether or not the shares of such series shall have voting
rights in addition to the voting rights provided by law and, if so, the
terms and conditions thereof, including, without limitation, the right of
the holders of such shares to vote on a separate class, either alone or
with the holders of shares of one or more other series of the Preferred
Stock and the right to have more than one vote per share;
(vii) whether or not a sinking fund or a purchase fund shall be
provided for the redemption or purchase of the shares of such series and,
if so, the terms and conditions thereof;
(viii) whether or not the shares of such series shall be convertible
into, or changeable for, shares of any other class or series of the same
or any other class of stock of the Corporation and, if so, the terms and
conditions of conversion or exchange, including, without limitation, any
provision for the adjustment of the conversion or exchange rate or the
conversion or exchange price; and
(ix) any other relative rights, preferences and limitations.
(c) No stockholder of the Corporation shall by reason of holding shares
of any class have any preemptive or preferential right to purchase or
subscribe for any shares of any class of stock of the Corporation, now or
hereafter authorized, or any notes, debentures, bonds, or other securities
convertible into or carrying options or warrants to purchase shares of any
class, now or hereafter authorized (whether or not the issuance of any such
shares, or such notes, debentures, bonds, or other securities, would
adversely affect the dividend or voting rights of such stockholder), other
than such rights, if any, as the Board of Directors, in its discretion, from
time to time may grant, and at such price as the Board of Directors in its
discretion may fix; and the Board of Directors may issue shares of any class
of the Corporation, or any notes, debentures, bonds, or other securities
convertible into or carrying options or warrants to purchase shares of any
class without offering any such shares of any class, either in whole or in
part, to the existing stockholders of any class;
(d) Holders of the Corporation's Common Stock shall not possess
cumulative voting rights at any stockholders meetings called for the
purposes of electing a Board of Directors or on other matters brought before
stockholders meeting, whether they be annual or special."
4. That the number of shares of the Company outstanding and entitled to
vote on said amendment to the Articles of Incorporation is 17,069,622; that
the said amendment has been authorized by the affirmative vote of
stockholders holding at least a majority of each class of stock outstanding
and entitled to vote thereon at the Company's Annual Meeting of Stockholders
held on December 5, 2001.
A-2
IN WITNESS WHEREOF, the said CellPoint Inc. has caused this certificate to
be signed by its president and its secretary and its corporate seal to be hereto
affixed this day of , 2001.
CELLPOINT INC.
By:
---------------------------------
Peter Henricsson, President
By:
---------------------------------
Lynn Duplessis, Secretary
(SEAL)
STATE OF
---------------------------------)
) ss.
COUNTY OF
---------------------------------)
On , 2001, personally appeared before me, , a Notary Public,
Peter Henricsson and Lynn Duplessis, who acknowledged that they executed the
above instrument.
/s/
----------------------------
(Notary Public)
(SEAL)
A-3
CELLPOINT INC.
PROXY - ANNUAL MEETING OF STOCKHOLDERS - DECEMBER 5, 2001
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned, a stockholder of CELLPOINT INC., a Nevada corporation (the
"Company"), does hereby appoint PETER HENRICSSON and LYNN DUPLESSIS, and each of
them, the true and lawful attorneys and proxies, with full power of
substitution, for and in the name, place and stead of the undersigned, to vote,
as designated below, all of the shares of stock of the Company which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Stockholders of the Company to be held at Piperska Muren,
Scheelegatan 14, 112 28 Stockholm, Sweden, on December 5, 2001, at 4:00 p.m.,
local time, and at any adjournment or adjournments thereof.
UNLESS OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES AND "FOR"
PROPOSALS 2, 3, 4 AND 5.
1. ELECTION OF DIRECTORS FOR all nominees listed below WITHHELD FROM ALL NOMINEES / /
Nominees: Stephen Childs, Lynn Duplessis, FOR, EXCEPT VOTE WITHHELD FROM THE
Peter Henricsson, Bengt Nordstrom, FOLLOWING NOMINEE(S): / /
Lars Persson, Jan Rynning
--------------------------------------------------------------------------------
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
TO INCREASE THE AUTHORIZED COMMON STOCK OF THE COMPANY.
/ / FOR / / AGAINST / / ABSTAIN
3. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
TO APPROVE A NEW CLASS OF PREFERRED STOCK
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED ON REVERSE SIDE)
4. PROPOSAL TO APPROVE AN AMENDMENT TO THE COMPANY'S STOCK WARRANT PLAN.
/ / FOR / / AGAINST / / ABSTAIN
5. PROPOSAL TO RATIFY THE RETENTION OF BDO SEIDMAN, LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
/ / FOR / / AGAINST / / ABSTAIN
6. TO VOTE WITH DISCRETIONARY AUTHORITY WITH RESPECT TO ALL OTHER MATTERS WHICH
MAY COME BEFORE THE MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given and
ratifies and confirms that all the proxies appointed hereby, or any of them, or
their substitutes, may lawfully do or cause to be done by virtue hereof. All of
said proxies or their substitutes who shall be present and act at the meeting,
or if only one is present and acts, then that one, shall have and may exercise
all of the powers hereby granted to such proxies. The undersigned hereby
acknowledges receipt of a copy of the Notice of Annual Meeting and Proxy
Statement, both dated October 30, 2001, and a copy of the Annual Report for the
fiscal year ended June 30, 2001.
/ / MARK HERE FOR ADDRESS CHANGE AND
INDICATE CHANGE:
Dated ______________________________________
____________________________________________
Signature
Dated ______________________________________
____________________________________________
Signature
NOTE: Your signature should appear the same
as your name appears hereon. In signing as
attorney, executor, administrator, trustee
or guardian, please indicate the capacity in
which signing. When signing as joint
tenants, all parties in the joint tenancy
must sign. When a proxy is given by a
corporation, it should be signed by an
authorized officer and the corporate seal
affixed. No postage is required if returned
in the enclosed envelope and mailed in the
United States.