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
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
TRESCOM INTERNATIONAL, INC.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction applies:
N/A
2) Aggregate number of securities to which transaction applies:
NA
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):
N/A
4) Proposed maximum aggregate value of transaction:
N/A
5) Total fee paid:
N/A
|_| Fee paid previously with preliminary materials.
<PAGE>
|_| 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: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
<PAGE>
[TRESCOM LOGO]
May 9, 1997
Dear Fellow Shareholder:
You are cordially invited to attend the 1997 Annual Meeting of
Shareholders of TresCom International, Inc., which will be held on Wednesday,
June 11, 1997, in Crystal Room No. Four of The Hyatt Regency Pier 66, 2301 S.E.
17th Street Causeway, Fort Lauderdale, Florida, at 10:00 a.m., local time.
The business to be considered and voted upon at the meeting is
explained in the accompanying Notice of Annual Meeting of Shareholders and Proxy
Statement.
Whether or not you plan to attend the Annual Meeting in person, it is
important that your shares of Common Stock be represented and voted at the
Annual Meeting. Accordingly, after reading the enclosed Notice of Annual Meeting
and Proxy Statement, please sign, date and return the enclosed proxy card in the
postage-paid envelope provided.
Thank you for your support of our Company.
Sincerely,
/s/ Wesley T. O'Brien
Wesley T. O'Brien
President and Chief Executive Officer
<PAGE>
TRESCOM INTERNATIONAL, INC.
200 EAST BROWARD BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
---------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 11, 1997
---------------------
To the Shareholders of TresCom International, Inc.:
NOTICE IS HEREBY GIVEN that the 1997 Annual Meeting of the shareholders of
TresCom International, Inc., a Florida corporation (the "Company"), will be held
on Wednesday, June 11, 1997, in Crystal Room No. Four of The Hyatt Regency Pier
66, 2301 S.E. 17th Street Causeway, Fort Lauderdale, Florida, at 10:00 a.m.,
local time, for the following purposes:
1. To elect two Class II directors to hold office until the 2000 Annual
Meeting of Shareholders;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
for the Company for fiscal year 1997; and
3. To transact such other business as may properly be presented at the 1997
Annual Meeting and at any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on May 7, 1997 as
the record date for the purpose of determining shareholders who are entitled to
notice of and to vote at the 1997 Annual Meeting and any adjournments or
postponements thereof. A list of such shareholders will be available during
regular business hours at the Company's office, 200 East Broward Boulevard, Fort
Lauderdale, Florida 33301 for the ten days before the meeting, for inspection by
any shareholder for any purpose germane to the meeting.
By Order of the Board of Directors,
/s/ William A. Paquin
William A. Paquin
SECRETARY
Fort Lauderdale, Florida
May 9, 1997
- -------------------------------------------------------------------------------
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENVELOPE PROVIDED, WHETHER OR NOT YOU PLAN TO ATTEND THE 1997 ANNUAL
MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE YOUR SHARES IN PERSON IF YOU
WISH, EVEN IF YOU PREVIOUSLY RETURNED YOUR PROXY.
- -------------------------------------------------------------------------------
<PAGE>
TRESCOM INTERNATIONAL, INC.
200 EAST BROWARD BOULEVARD
FORT LAUDERDALE, FLORIDA 33301
------------------------------
PROXY STATEMENT
------------------------------
This Proxy Statement is being furnished to shareholders of TresCom
International, Inc., a Florida corporation (the "Company"), in connection with
the solicitation of proxies by the Company's Board of Directors from holders of
the outstanding shares of the Company's common stock, $0.0419 par value per
share (the "Common Stock"), for use at the 1997 Annual Meeting of Shareholders
of the Company to be held on Wednesday, June 11, 1997, in Crystal Room No. Four
of The Hyatt Regency Pier 66, 2301 S.E. 17th Street Causeway, Fort Lauderdale,
Florida, at 10:00 a.m., local time, and at any adjournments or postponements
thereof (the "Annual Meeting"), for the purpose of considering and acting upon
the matters set forth in the accompanying Notice of Annual Meeting of
Shareholders.
Only holders of record of Common Stock as of the close of business on May
7, 1997 (the "Record Date") are entitled to notice of, and to vote at, the
Annual Meeting and any adjournments or postponements thereof. At the close of
business on such date, the Company had 11,820,914 shares of Common Stock issued
and outstanding. Holders of Common Stock are entitled to one vote on each matter
considered and voted upon at the Annual Meeting for each share of Common Stock
held of record as of the Record Date. Holders of Common Stock may not cumulate
their votes for the election of directors. Shares of Common Stock represented by
a properly executed proxy, if such proxy is received in time and not revoked,
will be voted at the Annual Meeting in accordance with the instructions
indicated in such proxy. IF NO INSTRUCTIONS ARE INDICATED, SHARES REPRESENTED BY
PROXY WILL BE VOTED "FOR" THE ELECTION, AS DIRECTORS OF THE COMPANY, OF THE
THREE NOMINEES NAMED IN THE PROXY TO SERVE UNTIL THE 2000 ANNUAL MEETING OF
SHAREHOLDERS, "FOR" THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS FOR THE COMPANY FOR FISCAL YEAR 1997 AND IN THE DISCRETION
OF THE PROXY HOLDERS AS TO ANY OTHER MATTER WHICH MAY PROPERLY BE PRESENTED AT
THE ANNUAL MEETING OR ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
The Proxy Statement and the accompanying proxy card are being mailed to
Company shareholders on or about May 9, 1997.
Any holder of Common Stock giving a proxy in the form accompanying the
Proxy Statement has the power to revoke the proxy prior to its use. A proxy can
be revoked (i) by an instrument of revocation delivered prior to the Annual
Meeting to the Secretary of the Company, (ii) by a duly executed proxy bearing a
later date or time than the date or time of the proxy being revoked, or (iii) at
the Annual Meeting if the shareholder is present and elects to vote in person.
Mere attendance at the Annual Meeting will not serve to revoke the proxy. All
written notices of revocation of proxies should be addressed as follows: TresCom
International, Inc., 200 East Broward Boulevard, Fort Lauderdale, Florida 33301,
Attention: William A. Paquin, Secretary.
In determining the presence of a quorum at the Annual Meeting, abstentions
are counted and broker non-votes (votes withheld by brokers in the absence of
instructions from street-name holders) are not counted. The current Florida
Business Corporation Act (the "FBCA") provides that directors are elected by a
plurality of the votes cast and all other matters are approved if the votes cast
in favor of the action exceed the votes cast against the action (unless the
matter is one for which the FBCA or the company's articles of incorporation
require a greater vote). Therefore, under the FBCA abstentions and broker
non-votes have no legal effect on whether a matter is approved. However, the
Company's By-laws provide that, unless otherwise expressly provided by law, any
matter, other than the election of directors, is to be approved by the
affirmative vote of a majority of the shares represented, in person or by proxy
and entitled to vote on a matter, at a meeting in which a quorum is present.
Therefore, with respect to all matters to be voted on by shareholders at the
Annual Meeting, other than the election of directors, abstentions will have the
same effect as a vote against the matter and broker non-votes will have no legal
effect.
<PAGE>
PROPOSAL 1 - ELECTION OF DIRECTORS
The number of directors of the Company, as determined by the Board of
Directors, is seven. The Board of Directors of the Company consists of three
classes: Class I, Class II and Class III, as nearly equal in number as possible.
One of the three classes, comprising approximately one-third of the directors,
is elected each year to succeed the directors whose terms are expiring.
Directors hold office until the annual meeting for the year in which their terms
expire and until their successors are elected and qualified unless, prior to
that date, they have resigned, retired or otherwise left office. In accordance
with the Company's Articles of Incorporation, Class II directors are to be
elected at the Annual Meeting, Class III directors are to be elected at the 1998
Annual Meeting of Shareholders and Class I directors are to be elected at the
1999 Annual Meeting of Shareholders.
At the Annual Meeting, three Class II directors are to be elected to the
Board, each to serve until the Annual Meeting of Shareholders to be held in
2000. The nominees for election at the Annual Meeting are Rudolph McGlashan, Dr.
Henry Kressel and Helen Seltzer. Each nominee is presently a director of the
Company. If any nominee is unable or unwilling to serve as a director, proxies
may be voted for a substitute nominee designated by the present Board. The Board
of Directors has no reason to believe that any of the nominees will be unable or
unwilling to serve as a director.
The following table sets forth the name and age (as of the date of the
Annual Meeting) of the directors, the class to which each director has been
nominated for election or elected, their principal occupations at present, the
positions and offices, if any, held by each director with the Company in
addition to the position as a director, and the period during which each has
served as a director of the Company.
<TABLE>
<CAPTION>
SERVED AS
NAME AGE PRINCIPAL OCCUPATION - POSITION HELD DIRECTOR SINCE
- ---- --- ------------------------------------ --------------
<S> <C> <C> <C>
CLASS I - 1999
Wesley T. O'Brien....................... 41 President and Chief Executive Officer 1996
Douglas M. Karp......................... 42 Managing Director and Member of E.M. 1994
Warburg, Pincus & Co., LLC
CLASS II - 1997
Rudolph McGlashan....................... 45 Chief Operating Officer 1995
Henry Kressel, Ph.D..................... 63 Managing Director and Member of E.M. 1993
Warburg, Pincus & Co., LLC
Helen Seltzer........................... 50 Senior Vice President, Product 1996
Marketing, BDM International, Inc.
CLASS III - 1998
Gary D. Nusbaum......................... 30 Managing Director and Member of E.M. 1995
Warburg, Pincus & Co., LLC
Read McNamara........................... 50 President, Latin American Division 1996
of Bausch & Lomb
</TABLE>
2
<PAGE>
CLASS I DIRECTORS
WESLEY T. O'BRIEN has served as Chief Executive Officer and director of the
Company since January 1996 and has served as President of the Company since
October 1995. Prior to joining the Company, Mr. O'Brien held several positions
with MCI, including Vice President of MCI's Small Business Division from July
1992 to September 1995 and Director of Product Marketing and Sales from November
1987 to July 1992.
DOUGLAS M. KARP has served as a director of the Company since December
1994. Mr. Karp has been a Managing Director of E.M. Warburg, Pincus & Co., LLC
(or its predecessor, E.M. Warburg, Pincus & Co., Inc.) since May 1991. Prior to
joining E.M. Warburg, Pincus & Co., LLC, Mr. Karp held several positions with
Salomon Inc, including Managing Director from January 1990 to May 1991, Director
from January 1989 to December 1989 and Vice President from October 1986 to
December 1988. Mr. Karp is a director of LCI International, Inc. ("LCI") and TV
Filme, Inc. and several privately held companies.
CLASS II DIRECTORS
RUDOLPH MCGLASHAN a co-founder of the Company, has served as Chief
Operating Officer of the Company since its formation in December 1993 and as a
director of the Company since August 1995. Prior to joining the Company, Mr.
McGlashan was Vice President - Network Engineering and Operations of LDDS
Communications, Inc. (now known as WorldCom, Inc.) from April 1992 to October
1993. From May 1989 to April 1992, Mr. McGlashan was Senior Vice President of
Advanced Telecommunications Corporation.
HENRY KRESSEL, PH.D. has served as a director of the Company since its
formation in December 1993. Dr. Kressel has been a Managing Director of E.M.
Warburg, Pincus & Co., LLC (or its predecessor, E.M. Warburg, Pincus & Co.,
Inc.) since 1985. Prior to joining E.M. Warburg, Pincus & Co., LLC, Dr. Kressel
spent 20 years at RCA Laboratories, where he became a Staff Vice President. Dr.
Kressel is a director of Zilog, Inc., Level One Communications Inc., Maxis,
Inc., Nova Information Systems, Inc., IA Corporation and several privately held
companies.
HELEN SELTZER has served as a director of the Company since April 1996. Ms.
Seltzer has been the Senior Vice President of Product Marketing of BDM
International, Inc. since March 1996. Prior to joining BDM International, Inc.,
Ms. Seltzer was the Vice President of Marketing/Sales Access Services of Bell
Atlantic from August 1993 to March 1996. Ms. Seltzer was Director, Product
Marketing of MCI from 1990 to July 1993.
CLASS III DIRECTORS
GARY D. NUSBAUM has served as a Director of the Company since October 1995.
Mr. Nusbaum has been a Managing Director of E.M. Warburg, Pincus & Co., LLC
since January 1997. From January 1995 to December 1996, Mr. Nusbaum was a Vice
President of Warburg, Pincus Ventures, Inc. and from September 1989 to December
1994, was an associate at Warburg, Pincus Ventures, Inc.
READ MCNAMARA has served as a director of the Company since April 1996. Mr.
McNamara has been the President, Latin American Division of Bausch & Lomb since
September 1996. From January 1996 to September 1996, Mr. McNamara was an
independent consultant. From December 1994 to January 1996, Mr. McNamara was the
President, International of Paging Network, Inc. Prior to joining Paging
Network, Inc., Mr. McNamara was Senior Vice President, International of Revlon,
Inc. from December 1992 to November 1994 and also Vice President, International
of Revlon, Inc. from December 1991 to December 1992. Mr. McNamara was Vice
President, International Business of ConAgra-Frozen Foods, a subsidiary of
ConAgra, Inc., from November 1990 to November 1991.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
ELECTION OF RUDOLPH MCGLASHAN, DR. HENRY KRESSEL AND HELEN SELTZER AS CLASS
II DIRECTORS.
3
<PAGE>
GENERAL INFORMATION RELATING TO THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS
The business and affairs of the Company are managed by the Board of
Directors. To assist it in carrying out its duties, the Board of Directors has
delegated certain authority to two committees. The Board of Directors held five
meetings in 1996. Each member of the Board of Directors attended at least 75% of
the aggregate meetings of the Board of Directors and the committees of the Board
of which he was a member during 1996.
COMMITTEES OF THE BOARD OF DIRECTORS
During 1996, the standing committees of the Board of Directors consisted of
an Audit Committee and a Compensation Committee (as hereinafter defined). The
Board of Directors does not have a nominating committee or any committee
performing similar functions and all matters which would be considered by such a
committee are acted upon by the full Board of Directors. The Company's By-laws
provide, in general, that if a shareholder intends to propose business or make a
nomination for the election of directors at the annual meeting, the Company must
receive notice of such intention at least 130 days prior to the meeting, in the
case of proposed business, or 130 days prior to the first anniversary of the
preceding year's annual meeting, in the case of nominations. With respect to
proposals, if less than 70 days' notice of the date of the meeting is given,
notice of the proposal must be delivered ten days following the date on which
the notice of the annual meeting is first mailed to shareholders. In the case of
nominations, if the date of the meeting is changed more than 30 days from the
prior anniversary date, notice of the nomination must be delivered ten days
following the day on which notice of the annual meeting is first mailed to
shareholders. The notice must include all information relating to the proposed
nominee required by the Securities and Exchange Commission (the "Commission") to
be disclosed in solicitations of proxies for election of directors or, in the
case of a proposal, a brief description of the proposal, and any material
interest of the shareholder in the proposal. The notice must also include (i)
the name and address of the shareholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination is made and (ii) the class and
number of shares of the Company that are owned beneficially and of record by
such shareholder and beneficial owner. The foregoing is only a summary of the
detailed provisions of the Company's By-laws and is qualified by reference to
the text thereof.
During 1996, the Audit Committee, consisting of Douglas M. Karp (from
January 1, 1996 until April 25, 1996), Gary D. Nusbaum, Helen Seltzer (from
April 25, 1996) and Read McNamara (from April 25, 1996), each a non-employee
director, held three meetings. The Audit Committee recommends to the Board of
Directors the firm to be appointed as independent auditors to audit the
Company's financial statements, discusses the scope and results of the audit
with the independent auditors, reviews with management and the independent
auditors the Company's interim and year-end operating results, considers the
adequacy of the internal controls and audit procedures of the Company and
reviews the non-audit services to be performed by the Company's independent
auditors
During 1996, the Compensation Committee, consisting of Douglas M. Karp,
Gary D. Nusbaum (from January 1, 1996 until February 7, 1996), Henry Kressel and
Read McNamara (from April 25, 1996), each a non-employee director, held two
meetings. The Compensation Committee reviews general policy matters relating to
compensation and benefits of employees and officers of the Company and
administers the Stock Option Plan (as hereinafter defined). In addition, the
Compensation Committee considers proposals with respect to the creation of and
changes to executive compensation plans and reviews appropriate criteria for
establishing performance targets.
COMPENSATION OF DIRECTORS
Independent non-employee directors receive an annual fee of $10,000, a
meeting fee of $1,000 for every board meeting attended and each committee
meeting held separately and a $500 fee for each board meeting or committee
meeting participated in by telephone. All directors are reimbursed for
out-of-pocket expenses. Under the Stock Option Plan, the Company may, from time
to time and in the discretion of the Board of Directors, grant options to
directors.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation awarded
to, earned by or paid to, any person serving as the Company's Chief Executive
Officer or acting in a similar capacity during fiscal 1996, and the Company's
other most highly compensated executive officers whose aggregate cash and cash
equivalent compensation exceeded $100,000 (the "Named Executives"), for services
rendered to the Company in all capacities during each of the last two fiscal
years. The table also identifies the principal capacity in which each of the
Named Executives served the Company at the end of fiscal 1996.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
-------------------------------------------------- ------------
Other Securities
Annual Underlying
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION (1) OPTIONS (#)
- --------------------------- ---- ---------- --------- ---------------- -----------
<S> <C> <C> <C> <C>
Wesley T. O'Brien, President and
Chief Executive Officer............. 1996 $220,000 $101,300(2) $125,819 90,119
1995 55,361 72,000(3) 3,088 43,422
Rudolph McGlashan, Chief
Operating Officer................... 1996 195,000 35,300 - 40,000
1995 185,577 25,000(3) - 75,827(4)
William A. Paquin, Chief
Financial Officer .................. 1996 104,000(5) 30,300 20,798 100,000
Norman Klugman, Chairman
of the Board........................ 1996 195,000(6) - - 40,000(7)
1995 185,577 10,000 - 75,827(4)
Scott Drake, Chief
Financial Officer................... 1996 150,000(8) - - 50,000(9)
1995 151,899 18,000 30,610 22,934
</TABLE>
- -----------
(1) The amounts reported in this column for 1996 for Messrs. O'Brien and
Paquin reflects tax gross ups in the amount of $40,832 and $4,387,
respectively, and selling and relocation expenses in the amount of
$84,987 and $16,411, respectively, and the amount reported for Mr.
O'Brien for 1995 reflects tax gross ups made by the Company. The amount
reflected in this column for 1995 for Mr. Drake includes $22,212 in
relocation expenses and $8,398 of tax gross ups made by the Company.
The aggregate value of the perquisites and other personal benefits
received by Messrs. McGlashan or Klugman during 1996 and 1995 and by
Mr. Drake during 1996 has not been reflected because the amount was
below the Commission's threshold for disclosure (i.e., the lesser of
$50,000 or 10% of the total of annual salary and bonus).
(2) Includes $40,000 paid to Mr. O'Brien pursuant to the terms of his 1995
employment agreement.
(3) Includes $22,000 paid to Mr. O'Brien and $15,000 paid to Mr. McGlashan
during 1996 which relates to the Company's performance in the fourth
quarter of 1995. Such amounts were not included in the Company's Proxy
Statement for its 1996 Annual Meeting of Shareholders because such
amounts had not been determined at the time of mailing of such Proxy
Statement.
(4) These options were granted to Messrs. McGlashan and Klugman in exchange
for options cancelled in August 1995.
(5) Mr. Paquin began his employment with the Company as Chief Financial
Officer in April 1996.
5
<PAGE>
(6) Includes salary continuation payments made by the Company from July
1996 to December 31, 1996 in connection with Mr. Klugman's
separation from the Company. See "-- Employment and Severance
Agreements."
(7) These options were forfeited by Mr. Klugman in connection with his
separation from the Company.
(8) Includes salary continuation payments made by the Company from April
28, 1996 to December 31, 1996 in connection with Mr. Drake's separation
from the Company. See "-- Employment and Severance Agreements."
(9) These options were forfeited by Mr. Drake in connection with his
separation from the Company.
STOCK OPTION GRANTS
The following table sets forth information regarding grants of options to
purchase Common Stock made by the Company during the fiscal year ended December
31, 1996 to each of the Named Executives. No stock appreciation rights were
granted during 1996.
<TABLE>
<CAPTION>
OPTION GRANTS IN 1996
INDIVIDUAL GRANTS
----------------------------------------------------------
Potential Realizable Value
Number of Percent of at Assumed Annual
Securities Total Options Rates of Stock Price
Underlying Granted to Exercise Appreciation For
Options Employees in Price Option Term (2)
Expiration --------------------------
Name Granted (#) 1996 (1) ($/Share) Date (5%) (10%)
- ---- ----------- ------------- --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Wesley T. O'Brien (3)............ 90,119 16.9% $12.00 02/07/06 $680,104 $1,723,518
Rudolph McGlashan (3)............ 40,000 7.5 12.00 02/07/06 301,869 764,996
William A. Paquin (3)............ 50,000 9.4 17.625 04/23/06 554,213 1,404,486
50,000 9.4 12.00 10/09/06 377,337 956,245
Norman Klugman (4)............... 40,000 7.5 12.00 02/07/06 301,869 764,996
Scott Drake (4) ................. 50,000 9.4 12.00 02/07/06 377,337 956,245
</TABLE>
- -----------
(1) The Company granted options to purchase a total of 534,119 shares of
Common Stock during 1996.
(2) Amounts reported in these columns represent amounts that may be
realized upon exercise of options immediately prior to the expiration
of their term assuming the specified compounded rates of appreciation
(5% and 10%) on the Common Stock over the term of the options. These
assumptions are based on rules promulgated by the Commission and do not
reflect the Company's estimate of future stock price appreciation.
Actual gains, if any, on the stock option exercises and Common Stock
holdings are dependent on the timing of such exercise and the future
performance of the Common Stock. There can be no assurance that the
rates of appreciation assumed in this table can be achieved or that the
amounts reflected will be received by the option holder.
(3) Options granted in 1996 vest as to 20% on the first anniversary of the
date of grant and as to an additional 20% on each anniversary
thereafter. All options expire on the tenth anniversary of the grant
date, unless sooner terminated under the terms of the Stock Option
Plan. In the event of a Change in Control (as hereinafter defined) of
the Company, all options become fully vested. See "-- Second Amended
and Restated 1994 Stock Option Plan."
6
<PAGE>
(4) The respective options were forfeited by the Named Executive in
connection with their separation from the Company.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information regarding option exercises and
the number and year end value of unexercised options held by each of the Named
Executives. No stock appreciation rights were exercised by the Named Executives
during fiscal 1996.
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN FISCAL 1996
AND FISCAL 1996 YEAR-END OPTION VALUES
Number of Securities VALUE OF UNEXERCISED
Underlying Unexercised "IN-THE-MONEY"
Shares Options at Fiscal OPTIONS AT FISCAL
Acquired on Year-End (#) YEAR-END ($)
Name Exercise (#) Value Realized(1) Exercisable/Unexercisable Exercisable/Unexercisable (2)
- ---- ------------ ----------------- ------------------------- -----------------------------
<S> <C> <C> <C> <C>
Wesley T. O'Brien.............. 8,354 $ 83,164 17,699/107,488 $134,158/$131,657
Rudolph McGlashan.............. 30,330 301,935 0/85,497 0/344,867
William A. Paquin.............. -- -- 0/100,000 0/0
Norman Klugman................. 45,497 458,610 0/0 0/0
Scott Drake.................... 16,750 294,465 0/0 0/0
</TABLE>
- -----------
(1) The figures presented in this column have been calculated based upon
the difference between the fair market value of each stock option on
the date of exercise and its exercise price.
(2) Options are "in-the-money" if the fair market value of the underlying
securities exceeds the exercise price of the options. The amounts set
forth represent the difference between $8.00 per share, the fair market
value of the Common Stock issuable upon exercise of options at December
31, 1996 and the exercise price of the option, multiplied by the
applicable number of options.
EMPLOYMENT AND SEVERANCE AGREEMENTS
On February 22, 1994, the Company entered into an employment agreement with
Rudolph McGlashan, pursuant to which Mr. McGlashan agreed to serve full time as
Chief Operating Officer of the Company until February 22, 1999, unless earlier
terminated in accordance with the terms of the agreement. The annual base salary
under such agreement is reviewed annually, but may not be less than $175,000 per
annum. In 1996, Mr. McGlashan's salary was set at $195,000. In addition, Mr.
McGlashan is eligible to receive quarterly bonus payments in amounts to be
determined by the Compensation Committee based on the financial performance of
the Company in relation to the then-current annual operating plan of the
Company. Such bonus, however, may not exceed 35% of base salary in any fiscal
year. Pursuant to his employment agreement, if Mr. McGlashan is terminated for
"cause" (as defined therein), the Company is required to pay Mr. McGlashan,
within ten days following such termination, any unpaid base salary and bonus,
accrued through the date of termination. If the Company terminates Mr.
McGlashan's employment without cause, and, at such time certain performance
standards were met, the Company is required to pay Mr. McGlashan any unpaid base
salary and bonus accrued through the date of termination, plus an additional
amount equal to unpaid base salary for the balance of the term. The Company is
required to pay Mr. McGlashan such amounts within ten days following a
termination without cause, but can, at its option, pay the additional amounts in
equal monthly installments over the 12-month period following the date of
termination. The Company also may terminate Mr. McGlashan's employment agreement
for non-performance (as defined therein) and upon his death or disability (as
defined therein) with specified payment obligations in each instance.
7
<PAGE>
On February 15, 1997, the Company entered into an amended and restated
employment agreement with Wesley T. O'Brien, which agreement amended and
restated Mr. O'Brien's original employment agreement dated October 1, 1995.
Pursuant to his amended and restated employment agreement, Mr. O'Brien agreed to
continue to serve full time as President and Chief Executive Officer of the
Company until June 15, 1999, unless earlier terminated in accordance with the
terms of such agreement. The annual base salary under such agreement is reviewed
annually, but may not be less than $231,000 per annum. In addition, Mr. O'Brien
is eligible to receive an annual bonus equal to 40% of his base salary to be
determined by the Compensation Committee based on the financial and operating
performance of the Company. The Compensation Committee may, in its sole
discretion, award additional bonuses to Mr. O'Brien on any other basis as it
deems appropriate from time to time. Pursuant to his employment agreement, if
Mr. O'Brien is terminated for "cause" (as defined therein), the Company is
required to pay Mr. O'Brien, within ten days following such termination, any
unpaid base salary through the date of termination. If the Company terminates
Mr. O'Brien's employment without cause, and, at such time certain performance
standards were met, the Company is required to pay Mr. O'Brien any unpaid base
salary and bonus accrued through the date of termination, plus an additional
amount equal to unpaid base salary for the balance of the term. The Company may
also terminate Mr. O'Brien's employment agreement for non-performance (as
defined therein) and upon his death or disability (as defined therein) with
specified payment obligations in each instance. In addition, Mr. O'Brien's
employment agreement provides that he may terminate the agreement for "Good
Reason", in which event the Company is required to pay Mr. O'Brien any unpaid
base salary and bonus accrued through the date of termination plus an additional
amount equal to unpaid base salary for the balance of the term. For purposes of
Mr. O'Brien's employment agreement, "Good Reason" means the occurrence, without
Mr. O'Brien's express written consent, of any of the following circumstances
following of a Change in Control (as hereinafter defined) (A) the failure of Mr.
O'Brien to be retained as an employee of the Company in a senior executive
position; (B) a reduction by the Company in Mr. O'Brien's salary; or (C) a
relocation of Mr. O'Brien's office to a location more than fifty (50) miles from
the current executive office of the Company and (i) a failure to make Mr.
O'Brien whole for all losses and costs reasonably incurred in connection with
the relocation including, but not limited to, moving expenses, forfeited bonds,
fees or escrows to clubs or other organizations and losses from the sale of Mr.
O'Brien's personal residence and (ii) the failure of Mr. O'Brien to obtain an
agreement in form and substance reasonably satisfactory to him from any
successor to provide employment to him in the capacity of a senior executive, at
his then current base salary, for a period of at least two years from the date
of the Change in Control.
Each of Messrs. McGlashan's and O'Brien's employment agreement provides
that the executive will not, for certain specified periods, without the prior
written consent of the Company, directly or indirectly conduct or engage in or
be associated with any person or entity which conducts or engages in the
telecommunications business in any geographic areas in which the Company or any
of its subsidiaries is then so engaged in business or proposes to engage in
business in accordance with its then-current strategic plan. Each of the
employment agreements also provides that the executives may not interfere with,
disrupt or attempt to disrupt the relationship, contractual or otherwise,
between the Company or any of its subsidiaries and their customers, suppliers,
lessors, lessees or employees.
Effective April 23, 1996, Mr. Drake resigned as Chief Financial Officer of
the Company. In connection with such resignation, the Company entered into an
agreement with Mr. Drake pursuant to which the Company agreed to continue Mr.
Drake's base salary and employee benefits for a specified period of time,
reimburse him for unpaid business expenses and certain other specified expenses
and vested a portion of options previously granted to Mr. Drake. In exchange for
the foregoing, Mr. Drake agreed to be available to the Company on a consulting
basis for a specified period, subject to certain weekly limitations, and agreed
to certain covenants, including a noncompete clause.
Effective June 30, 1996, Mr. Klugman resigned as an officer and employee of
the Company. In connection with his resignation, the Company entered into an
agreement with Mr. Klugman pursuant to which the Company agreed to continue Mr.
Klugman's base salary, at the annual rate then in effect for a specified period
of time, reimburse him for unpaid business expenses and certain other specified
expenses and vested certain unvested options, a portion of which are subject to
repurchase by the Company until June 30, 1997, at the original option exercise
price, if certain covenants contained in the agreement are violated. In exchange
for the foregoing, Mr. Klugman agreed to certain covenants, including a
noncompete clause.
8
<PAGE>
SECOND AMENDED AND RESTATED 1994 STOCK OPTION PLAN
In February 1997, the Board of Directors of the Company adopted the Second
Amended and Restated 1994 Stock Option Plan (the "Stock Option Plan"), which
provides for the grant to officers, key employees, consultants and directors of
the Company of both "incentive stock options" within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "Code"), and stock options
that are non-qualified for federal income tax purposes. The total number of
shares of Common Stock for which options may be granted pursuant to the Stock
Option Plan is 936,432, subject to certain adjustments reflecting changes in the
Company's capitalization. The Stock Option Plan is currently administered by the
Compensation Committee. The Compensation Committee determines, among other
things, which officers, employees, consultants and directors will receive
options under the plan, the time when options will be granted, the type of
option (incentive stock options or non-qualified stock options, or both) to be
granted, the number of shares subject to each option, the time or times when the
options will become exercisable (subject to early vesting in the event of a
Change in Control), and, subject to certain conditions discussed below, the
option price and duration of the options. Members of the Compensation Committee
are not eligible to receive options under the plan.
The exercise price of incentive stock options is determined by the
Compensation Committee, but may not be less than the greater of the fair market
value on the date of grant or the par value of the Common Stock and the term of
any such option may not exceed ten years from the date of grant. With respect to
any participant in the Stock Option Plan who owns stock representing more than
10% of the voting power of the outstanding capital stock of the Company, the
exercise price of any incentive stock option may not be less than 110% of the
fair market value of such shares on the date of grant and the term of such
option may not exceed five years from the date of grant.
The exercise price of non-qualified stock options is determined by the
Compensation Committee on the date of grant, but may not be less than the par
value of the Common Stock on the date of grant, and the term of such option may
not exceed 10 years from the date of grant.
Payment of the option price may be made by certified or bank cashier's
check, by tender of shares of Common Stock then owned by the optionee or by any
other means acceptable to the Company. Options granted pursuant to the Stock
Option Plan are not transferable, except by will or the laws of descent and
distribution in the event of death. During an optionee's lifetime, the option is
exercisable only by the optionee. With respect to options granted in 1995, the
Compensation Committee may, in its discretion, and on terms it considers
appropriate, require an optionee, or the executors or administrators of an
optionee's estate, to sell back to the Company such options or shares of Common
Stock issued upon exercise of such options in the event such optionee's
employment with the Company is terminated.
Pursuant to the terms of the Stock Option Plan, if a "Change in Control" of
the Company occurs, all outstanding stock options become vested and fully
exercisable. For purposes of the Stock Option Plan, a "Change in Control" is
deemed to occur if (a) any "person" as such term is defined in Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding securities under
any employee benefit plan of the Company or any Company owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of Common Stock, of the Company), becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of all classes of the Company's then outstanding voting
securities; (B) during any period of two consecutive calendar years individuals
who at the beginning of such period constitute the Board, cease for any reason
to constitute at least a majority thereof, unless the election or nomination for
the election by the Company's shareholders of each new director was approved by
a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the two-year period or whose election
or nomination for election was previously so approved; (C) the shareholders of
the Company approve a merger or consolidation of the Company with any other
corporation or legal entity, other than a merger or consolidation that would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation;
9
<PAGE>
PROVIDED, HOWEVER, that a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person
acquires more than 30% of the combined voting power of the Company's then
outstanding securities shall not constitute a Change in Control of the Company;
or (D) the shareholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
The Board of Directors has the right at any time and from time to time to
amend or modify the Stock Option Plan, without the consent of the Company's
shareholders or optionees; provided, that no such action may adversely affect
options previously granted without the optionee's consent, and provided further
that no such action, without the approval of the shareholders of the Company,
may increase the total number of shares of Common Stock which may be purchased
pursuant to options granted under the plan, expand the class of persons eligible
to receive grants of options under the plan, decrease the minimum option price,
extend the maximum term of options granted under the plan, or extend the term of
the plan. The expiration date of the Stock Option Plan, after which no option
may be granted thereunder, is February 22, 2004.
The Company has filed with the Commission a Registration Statement on Form
S-8 covering the shares of Common Stock underlying options granted under the
Stock Option Plan.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In October 1995, the Board of Directors established a Compensation
Committee (the "Compensation Committee") and delegated to such committee the
responsibility for administering and evaluating the Company's executive
compensation program.
EXECUTIVE COMPENSATION POLICY
The Company's compensation program is designed to attract, motivate, reward
and retain executive personnel capable of making significant contributions to
the long-term success of the Company. During 1996, the Company's compensation
program consisted of base salary, quarterly incentive bonuses and stock option
grants. Base salary provides the foundation for the Company's executive pay; its
purpose is to compensate the executive for performing his or her basic duties.
The purpose of quarterly incentive bonuses is to provide rewards for favorable
performance and achievement of intermediate-term objectives while the purpose of
stock option grants is to provide incentives and rewards for long-term
performance and to motivate long-term strategic planning.
BASE SALARY. Base salaries for the Company's executive officers are set
annually subject, in certain cases, to certain minimum requirements established
under the executives' employment agreement. See "Executive Compensation -
Employment and Severance Agreements." During 1996, the Company did not employ a
formula approach that links cash compensation to corporate performance nor did
it utilize any formal survey or other compilation of empirical data on executive
compensation paid by other companies. Instead, executive compensation was
determined based on a number of subjective factors, including individual
responsibilities, performance, contribution and experience; the Company's
financial performance as compared with the prior year; and general economic and
industry factors.
INCENTIVE BONUSES. The Company's executive officers and other management
employees are eligible to receive incentive bonuses which are linked to the
financial and operating performance of the Company. Each executive officer is
assigned an individual incentive target, which represents the amount that would
be payable to the executive if performance goals were met. The incentive target
for the President and Chief Executive Officer and the Chief Financial Officer
was set at 40% and the incentive target for the Chief Operating Officer was set
at 35% of base salary. The payout percentage can range from 0% to 100% depending
on the actual financial performance of the Company. Based on an incentive target
of 40% of base salary and the actual performance of the Company during 1996, the
President and Chief Executive Officer received quarterly incentive bonus
totalling $61,300 in 1996. The President and Chief Executive Officer also
received a one-time $40,000 bonus pursuant to the terms of his original
employment agreement.
10
<PAGE>
STOCK OPTIONS. The Company's compensation program also utilizes stock
option awards, which are intended to provide additional incentive to increase
shareholder value. All such awards were granted with an exercise price equal to
100% of fair market value of the Common Stock on the date of grant and generally
become exercisable over five years. Currently, no specific formula is used to
determine option awards to employees; instead, awards are based on subjective
evaluation of each individual's overall past and expected future contribution to
the Company. During 1996, 90,119 options were granted to the President and Chief
Executive Officer.
SECTION 162(M) OF THE INTERNAL REVENUE CODE
In connection with making decisions with respect to executive compensation,
the Board of Directors has taken into account, as one of the factors which it
considers, the provisions of Section 162(m) of the Code, which limits the
deductibility by the Company of certain categories of compensation in excess of
$1 million paid to certain executive officers.
Respectfully Submitted,
Douglas M. Karp
Henry Kressel, Ph.D.
Gary D. Nusbaum (from January 1, 1996 until February 7, 1996)
Read McNamara
CERTAIN TRANSACTIONS
In April 1994, the Company executed a carrier agreement with LCI pursuant
to which the Company buys network services from and provides network services to
LCI. During 1996, $7,140 of services were provided and $5,453 were used. As of
April 28, 1997, an affiliate of Warburg, Pincus Investors, L.P. ("Warburg,
Pincus") owned approximately 10% of the outstanding shares of LCI. Mr. Karp is a
director of LCI.
Pursuant to a Stockholders Agreement among Warburg, Pincus, the Company,
Norman Klugman and Rudolph McGlashan (the "Stockholders Agreement"), Warburg,
Pincus is entitled to certain registration rights with respect to its shares of
capital stock. In addition, pursuant to the terms of such agreement, the Company
has agreed to nominate and use its best efforts to elect to the Board of
Directors two Warburg, Pincus designees for so long as Warburg, Pincus owns at
least 15% of the outstanding shares of Common Stock, and one Warburg, Pincus
designee for so long as Warburg, Pincus owns between 5% and 15% of the shares of
Common Stock then outstanding.
On October 2, 1995 and November 16, 1995, the Company issued two notes to
Warburg, Pincus in the aggregate principal amount of $10.4 million (including
accrued interest) (the "Warburg Notes"). Interest on the Warburg Notes accrued
at the rate of 12% per annum. The Warburg Notes were paid in full by the Company
out of the net proceeds of the Company's initial public offering in February
1996. As additional consideration for the purchase of the Warburg Notes, the
Company issued to Warburg, Pincus a warrant to purchase 358,034 shares of Common
Stock at $0.42 per share (the "Warburg Warrant"). The Warburg Warrant expires on
October 2, 2007.
The Company believes that the above transactions were or are on terms no
less favorable to the Company than could have been obtained in transactions with
independent third parties.
See "Executive Compensation -- Employment and Severance Agreements" for a
description of certain payments made by the Company to Messrs. Klugman and Drake
in connection with their separation from the Company.
11
<PAGE>
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock, as of April 28, 1997, by (i) each
person known to the Company to own beneficially more than 5% of the Company's
outstanding shares of Common Stock, (ii) each director of the Company, (iii)
each of the Named Executives, and (iv) all executive officers and directors of
the Company, as a group. All information with respect to beneficial ownership
has been furnished to the Company by the respective shareholders of the Company.
<TABLE>
<CAPTION>
Amount and Nature Percentage
of Beneficial of
NAME OWNERSHIP (1) CLASS
- ---- ------------- -----
<S> <C> <C>
Warburg, Pincus Investors, L.P.
466 Lexington Avenue
New York, New York 10017 (2)(3)....................................... 6,319,468 53.5
Wellington Management Company, LLP
75 State Street
Boston, Massachusetts 02109........................................... 1,150,400 9.7
Eaton Vance Corp.
24 Federal Street
Boston, Massachusetts 02110........................................... 905,200 7.7
Wesley T. O'Brien (4)................................................. 44,277 *
Rudolph McGlashan (4)................................................. 212,867 1.8
William Paquin (4).................................................... 13,000 *
Norman Klugman........................................................ 233,020 2.0
Scott Drake........................................................... -- *
Douglas M. Karp (3)(5)................................................ 6,319,468 53.5
Henry Kressel, Ph.D. (3)(5)........................................... 6,319,468 53.5
Gary Nusbaum(3)(5).................................................... 6,319,468 53.5
Helen Seltzer......................................................... 200 *
Read McNamara......................................................... 200 *
All Executive officers and directors as a group (eight persons)....... 6,588,012 55.7
</TABLE>
- -----------
* Represents beneficial ownership of less than 1% of the outstanding
shares of Common Stock.
(1) Beneficial ownership is determined in accordance with the rules of the
Commission. In computing the number of shares beneficially owned by a
person and the percentage ownership of that person, shares of Common
Stock subject to options and warrants held by that person that are
currently exercisable or exercisable within 60 days of April 28, 1997
are deemed outstanding. Such shares, however, are not deemed
outstanding for the purpose of computing the percentage ownership of
any other person. Except as indicated in the footnotes to this table,
the shareholder named in the table has sole voting and investment power
with respect to the shares set forth opposite such shareholder's name.
(2) E.M. Warburg, Pincus & Co., LLC, a New York limited liability company
("E.M. Warburg"), manages Warburg, Pincus. Warburg, Pincus & Co., a
New York general partnership ("WP"), the sole general partner of
Warburg, Pincus, has a 20% interest in the profits of Warburg, Pincus.
Lionel I. Pincus is the managing partner of WP and the managing member
of E.M. Warburg and may be deemed to control both WP and E.M. Warburg.
The members of E.M. Warburg are substantially the same as the partners
of WP. Messrs. Karp, Kressel and Nusbaum, each a director of the
Company, are each a Managing Director and member of E.M. Warburg and
general partners of WP. As such, Messrs. Karp, Kressel and Nusbaum may
be deemed to have an indirect pecuniary interest, within the meaning
of Rule 16a-1 under the Exchange Act, in an indeterminate portion of
the shares of Common Stock beneficially owned by Warburg, Pincus and
WP.
12
<PAGE>
(3) Includes 358,034 shares of Common Stock which Warburg, Pincus has the
right to acquire through exercise of the Warburg Warrant.
(4) Includes shares of Common Stock which the executive officers have the
right to acquire through the exercise of options within 60 days of
April 28, 1997, as follows: Wesley T. O'Brien - 35,723 shares, Rudolph
McGlashan - 8,000 shares and William Paquin - 10,000 shares.
(5) All of the shares indicated as owned by Messrs. Karp, Kressel and
Nusbaum are owned directly by Warburg, Pincus and are included because
of Messrs. Karp's, Kressel's and Nusbaum's affiliation with Warburg,
Pincus. Messrs. Karp, Kressel and Nusbaum disclaim "beneficial
ownership" of these shares within the meaning of Rule 13d-3 under the
Exchange Act.
CUMULATIVE TOTAL SHAREHOLDER RETURN
The following graph shows a comparison of cumulative total returns on the
Common Stock against the cumulative total return for The Nasdaq Stock Market -
U.S. Index and The Nasdaq Telecommunications Index. The graph assumes an
investment of $100 on February 8, 1996 (the date the Common Stock began trading
on The Nasdaq National Market) in the Common Stock, The Nasdaq Stock Market -
U.S. Index and The Nasdaq Telecommunications Index. Cumulative total return
assumes reinvestment of dividends. The performance shown is not necessarily
indicative of future performance.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
MONTHLY CUMULATIVE TOTAL VALUES*($)
-----------------------------------------------------------------------------
1996 Nasdaq Nasdaq
MONTH-END THE COMPANY STOCK MARKET - U.S. INDEX TELECOMMUNICATIONS INDEX
- --------- ----------- ------------------------- ------------------------
<S> <C> <C> <C>
February 125 101 99
March 123 102 99
April 160 110 103
May 146 115 105
June 83 110 102
July 85 100 89
August 98 106 93
September 108 114 96
October 106 113 92
November 86 120 94
December 67 120 96
</TABLE>
*$100 invested on February 8, 1996 in Common Stock or index, including
reinvestment of dividends, fiscal year ending December 31.
13
<PAGE>
PROPOSAL 2 - RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors desires to obtain shareholder ratification of the
resolution appointing Ernst & Young LLP, Atlanta, Georgia, as independent
auditors for the Company for fiscal year 1997. Ernst & Young LLP served as the
Company's auditors for the fiscal year ended December 31, 1996.
If the appointment of Ernst & Young LLP is not ratified, the adverse vote
will be considered as an indication to the Board of Directors that it should
select other independent auditors for the following fiscal year. Given the
difficulty and expense of making any substitution of auditors after the
beginning of the current fiscal year, it is contemplated that the appointment
for fiscal year 1997 will be permitted to stand unless the Board of Directors
finds other good reason for making a change.
A representative of Ernst & Young LLP will attend the Annual Meeting, will
have an opportunity to make a statement if he or she desires to do so, and will
be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR
THE COMPANY FOR FISCAL YEAR 1997.
COSTS OF SOLICITATION
The cost of preparing, printing and mailing this Proxy Statement and the
accompanying proxy card, and the cost of solicitation of proxies on behalf of
the Company's Board of Directors will be borne by the Company. In addition to
the use of the mail, proxies may be solicited personally or by telephone or
regular employees of the Company without additional compensation. Banks,
brokerage houses and other institutions, nominees or fiduciaries will be
requested to forward the proxy materials to the beneficial owners of the Common
Stock held of record by such persons and entities and will be reimbursed for
their reasonable expenses incurred in connection with forwarding such material.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of no
other matters which will be brought before the Annual Meeting. In the event that
any other business is properly presented at the Annual Meeting, it is intended
that the persons named in the enclosed proxy will have authority to vote such
proxy in accordance with their judgment on such business.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors, certain
officers and persons holding more than 10% of a registered class of the
Company's equity securities to file reports of ownership and reports of changes
in ownership with the Commission and the Nasdaq National Market. Directors,
certain officers and greater than 10% shareholders are also required by
Commission regulations to furnish the Company with copies of all such reports
that they file. Based on the Company's review of copies of such forms provided
to it, the Company believes that all filing requirements were complied with
during the fiscal year ended December 31, 1996, except for one transaction on
Form 4 which was filed late by Helen Seltzer, a director of the Company.
SUBMISSION OF SHAREHOLDER PROPOSALS
Shareholder proposals submitted for inclusion in the Proxy Statement to be
issued in connection with the Company's 1998 Annual Meeting of Shareholders must
be mailed to the Corporate Secretary, TresCom International, Inc., 200 East
Broward Boulevard, Fort Lauderdale, Florida 33301, and must be received by the
14
<PAGE>
Corporate Secretary on or before December 30, 1997. See "General Information
Relating to the Board of Directors - Committees of the Board of Directors."
ANNUAL REPORT
A copy of the Company's 1996 Annual Report to Shareholders is being mailed
with this Proxy Statement to each shareholder entitled to vote at the Annual
Meeting. Shareholders not receiving a copy of such Annual Report may obtain one,
without charge, by writing or calling William Paquin, Secretary, TresCom
International, Inc., 200 East Broward Boulevard, Fort Lauderdale, Florida 33301,
telephone (954) 763-4000.
By Order of the Board of Directors
/s/ William A. Paquin
William A. Paquin
SECRETARY
Fort Lauderdale, Florida
May 9, 1997
15
<PAGE>
TRESCOM INTERNATIONAL, INC.
ANNUAL MEETING OF SHAREHOLDERS
JUNE 11, 1997
The undersigned hereby appoints Wesley T. O'Brien and William
A. Paquin, and each of them, with power of substitution, proxies for the
undersigned and authorizes them to represent and vote, as designated, all of the
shares of common stock of TresCom International, Inc. held of record by the
undersigned on May 7, 1997, at the Annual Meeting of Shareholders to be held in
Crystal Room No. Four of The Hyatt Regency Pier 66, 2301 S.E. 17th Street
Causeway, Fort Lauderdale, Florida on June 11, 1997, and at any adjournments or
postponements thereof for the purposes identified below and with discretionary
authority as to any other matters that may properly come before the Annual
Meeting, including substitute nominees, if any, of the named nominees for
Director should the named nominees be unavailable to stand for election, in
accordance with and as described in the Notice of Annual Meeting of Shareholders
and Proxy Statement. This Proxy, when properly executed, will be voted in the
manner directed herein by the undersigned shareholder. If the proxy is returned
without direction being given, this proxy will be voted FOR proposals 1 and 2.
The Board of Directors recommends a vote FOR proposals 1 and 2.
1. Election of Class II Directors. Nominees: Rudolph McGlashan,
Henry Kressel, Ph.D and Helen Seltzer
WITHHOLD
FOR AUTHORITY TO VOTE FOR ALL
ALL NOMINEES NOMINEES
LISTED ABOVE [ ] LISTED ABOVE [ ]
[ ]
- -------------------------------------------------------------------------------
For all nominees except as noted above.
2. Ratification of the appointment of Ernst & Young LLP as independent
auditors for the Company for fiscal year 1997.
For Against Abstain
[ ] [ ] [ ]
(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TRESCOM
INTERNATIONAL, INC.
Date: ________________
________________
Date: ________________
________________
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON YOUR STOCK CERTIFICATE(S). If acting
as attorney, executor, trustee or in other representative capacity, sign name
and title. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
authorized person. If held jointly, both parties must sign and date. PLEASE
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE PROVIDED.
<PAGE>
