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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:
/ / Preliminary Proxy Statement / / Confidential for Use of the Com-
mission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14A-11(c) or Rule 14a-12
GROUP LONG DISTANCE, INC.
-----------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
GROUP LONG DISTANCE, INC.
1451 WEST CYPRESS CREEK ROAD, SUITE 200
FORT LAUDERDALE, FL 33309
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 10, 1997
To the Holders of the Common Stock of GROUP LONG DISTANCE, INC:
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of Group Long
Distance, Inc. (the 'Company') will be held at 11:00 a.m. (local time), on
October 10, 1997, at the DoubleTree Guest Suites, 555 N.W. 62nd Street, Fort
Lauderdale, Florida, for the following purposes:
1. To elect two Class 1 Directors of the Company to serve until the
annual meeting of shareholders in 2000 and until their respective
successors are duly elected and qualified;
2. To ratify the appointment of Grant Thornton LLP as the independent
public accountants of the Company for the fiscal year ending April
30, 1998; and
3. To transact such other business as may properly come before the
meeting or any postponement or adjournment thereof.
Only holders of the Common Stock at the close of business on September 5,
1997 will be entitled to notice of and to vote at this meeting and any
adjournment or postponement thereof.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO
ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD PROMPTLY. THIS WILL INSURE THAT YOUR SHARES ARE VOTED IN ACCORDANCE WITH
YOUR WISHES. YOUR COOPERATION IS APPRECIATED SINCE A MAJORITY OF THE OUTSTANDING
SHARES ENTITLED TO VOTE MUST BE REPRESENTED, EITHER IN PERSON OR BY PROXY, TO
CONSTITUTE A QUORUM FOR THE PURPOSES OF CONDUCTING BUSINESS AT THE MEETING.
By Order of the Board of Directors,
/s/ Andrea A. Morey
ANDREA A. MOREY,
Secretary
September 8, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information........................................................................................ 1
Solicitation and Voting of Proxies; Revocation; Record Date.............................................. 1
Matters Submitted to Shareholders.......................................................................... 2
Election of Directors...................................................................................... 2
Nominees Standing for Election........................................................................... 2
Recommendation........................................................................................... 3
Ratification of Selection of Independent Public Accountants................................................ 3
Recommendation........................................................................................... 4
Security Ownership of Certain
Beneficial Owners and Management......................................................................... 4
Directors and Executive Officers of the Company............................................................ 6
Meetings of the Board of Directors and its Committees...................................................... 7
Director Compensation...................................................................................... 7
Executive Compensation..................................................................................... 8
Summary Compensation Table............................................................................... 8
Employment Agreement..................................................................................... 8
Option Grants for the Fiscal Year Ended April 30, 1997................................................... 9
Aggregated Option Exercises in the Year Ended
April 30, 1997 and Fiscal Year-End Option Values...................................................... 9
Certain Relationships and Related Transactions............................................................. 9
Compliance with Section 16(a)
of the Securities Exchange Act of 1934................................................................... 10
Shareholder Proposals...................................................................................... 10
Other Business............................................................................................. 10
</TABLE>
(i)
<PAGE>
GROUP LONG DISTANCE, INC.
1451 WEST CYPRESS CREEK ROAD, SUITE 200
FORT LAUDERDALE, FL 33309
(954) 771-9696
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 10, 1997
------------------------
This proxy statement and the accompanying form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of Group
Long Distance, Inc., a Florida corporation (the 'Company') to be voted at its
Annual Meeting of Shareholders which will be held at 11:00 a.m. (local time), on
October 10, 1997 at the DoubleTree Guest Suites, 555 N.W. 62nd Street, Fort
Lauderdale, Florida, and at any postponements or adjournments thereof (the
'Annual Meeting').
At the Annual Meeting, the Company's shareholders will be asked (i) to
elect Messrs. John L. Tomlinson and Peter J. Russo as Class 1 Directors of the
Company to serve until the annual meeting of shareholders in 2000 and until
their respective successors are duly elected and qualified, (ii) to ratify the
appointment of Grant Thornton LLP as the Company's independent public
accountants for the fiscal year ending April 30, 1998, and (iii) to take such
other action as may properly come before the Annual Meeting or any adjournments
thereof.
This proxy statement and the accompanying form of proxy, together with the
Company's 1997 Annual Report to Shareholders, are being mailed to shareholders
on or about September 8, 1997.
GENERAL INFORMATION
SOLICITATION AND VOTING OF PROXIES; REVOCATION; RECORD DATE
Shares represented by each properly executed and returned proxy card will
be voted (unless earlier revoked) in accordance with the instructions indicated.
If no instructions are indicated on the proxy card, all shares represented by
valid proxies received pursuant to this solicitation (and not revoked before
they are voted) will be voted 'FOR' the election of the nominees for director
named below, 'FOR' the ratification of the Company's independent public
accountants and by the proxies in their discretion on any other matters to come
before the Annual Meeting.
A shareholder may revoke a proxy at any time before it is exercised by
filing with the Secretary of the Company a written revocation or a duly executed
proxy bearing a later date or by voting in person at the meeting. Any written
notice revoking the proxy should be sent to the attention of Andrea A. Morey,
Secretary, Group Long Distance, Inc., 1451 West Cypress Creek Road, Suite 200,
Fort Lauderdale, Florida 33309, fax (954) 771-9910.
1
<PAGE>
Proxies may be solicited by mail, and may also be made by personal
interview, telephone and facsimile transmission, and by directors, officers and
employees of the Company (without special compensation). The expenses for the
preparation of proxy materials and the solicitation of proxies for the Annual
Meeting will be paid by the Company. The Company has retained Continental Stock
Transfer and Trust Company to assist in the solicitation. In accordance with the
regulations of the Securities and Exchange Commission, the Company will
reimburse, upon request, banks, brokers and other institutions, nominees and
fiduciaries for their expenses incurred in sending proxies and proxy materials
to the beneficial owners of the Company's Common Stock. Expenses for the
solicitation are estimated at approximately $2,500, plus other reasonable
expenses.
Only holders of record of the Company's Common Stock, no par value ('Common
Stock'), at the close of business on September 5, 1997 (the 'Record Date') are
entitled to notice of and to vote at the Annual Meeting. As of August 25, 1997,
there were outstanding 3,462,354 shares of Common Stock. Each share is entitled
to one vote. In order to conduct business at the Annual Meeting, a quorum must
be present, that is a majority of the total number of Common Stock shares
outstanding as of the Record Date must be represented, either in person or by
proxy.
MATTERS SUBMITTED TO SHAREHOLDERS
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
Pursuant to the Company's initial Bylaws and its Amended and Restated
Bylaws, the Board of Directors is divided into three classes, the terms of which
expire successively over a three-year period. At each annual meeting of
shareholders, successors to directors whose terms expire at that meeting shall
be elected for three-year terms. The term of office for each class of director
expires as follows: Class 1, at this Annual Meeting, Class 2, at the 1998 annual
meeting of shareholders; and Class 3, at the 1999 annual meeting of
shareholders.
NOMINEES STANDING FOR ELECTION
The following nominees are standing for election to serve as Class 1
Directors until the annual meeting of shareholders in 2000 and until their
respective successors are duly elected and qualified:
John L. Tomlinson, 48, has been a Class 1 Director of the Company
since November 1995. Mr. Tomlinson is a Certified Public Accountant and has
been in private practice since 1990. Mr. Tomlinson also serves as a
director of Gateway American Bank of Florida.
Peter J. Russo, 40, has been Chief Financial Officer of the Company
since December 1996. Mr. Russo was Executive Vice President of the State
Bank of South Australia from February 1992 to June 1996, and Senior Vice
President and Chief Financial Officer for its United States operations from
May 1988 to January 1992.
Proxies are solicited in favor of the two Class 1 Director nominees and it
is intended that the proxies will be voted for the nominees unless otherwise
specified. Should a nominee
2
<PAGE>
become unable to serve for any reason, unless the Board of Directors by
resolution provides for a lesser number of directors, the persons named in the
enclosed proxy will vote for the election of a substitute nominee. The Board of
Directors has no reason to believe that the nominees will be unable to serve.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE NOMINEES.
Assuming the presence of a quorum, the affirmative vote of a plurality of the
votes cast by the holders of the Common Stock shares present and entitled to
vote on this item at the Annual Meeting is required to elect the nominees. In
determining whether this item has received the requisite number of affirmative
votes, abstentions will not be counted and will have no effect on the result of
the vote, although abstentions will count toward the presence of a quorum.
Brokers who hold shares in street name have the authority to vote on certain
routine matters on which they have not received instruction from the beneficial
holders of such shares. Brokers holding shares in street name, who do not
receive instruction, are entitled to vote on the election of directors, and such
broker votes will count toward the presence of a quorum.
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
(ITEM 2 ON PROXY CARD)
The Audit Committee has recommended to the Board of Directors of the
Company the selection of Grant Thornton LLP ('Grant Thornton') as independent
public accountants of the Company for the fiscal year ending April 30, 1998.
A representative of Grant Thornton will be present at the meeting. The
representative will be given the opportunity to make a statement at the meeting
and will be available to respond to appropriate questions.
On June 5, 1996, the Company dismissed Timothy M. Hohl Company P.A.
('Hohl') as the Company's independent public accountant. The dismissal of Hohl
was approved by the Board of Directors. The Company believes, and has been
advised by Hohl that it concurs in such belief, that during the fiscal year
ended April 30, 1995, the Company and Hohl did not have any disagreement on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreement, if not resolved to the
satisfaction of Hohl, would have caused it to make reference in connection with
its reports on the Company's financial statements to the subject matter of the
disagreement. No report of Hohl on the Company's financial statements contained
an adverse opinion or a disclaimer of opinion, or was modified as to
uncertainty, audit scope or accounting principles. On June 5, 1996, the Company
engaged Grant Thornton as its independent public accountants. The consolidated
financial statements of the Company for the years ended April 30, 1997 and 1996
were audited by Grant Thornton.
3
<PAGE>
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS RATIFY THE
SELECTION OF GRANT THORNTON LLP TO BE THE INDEPENDENT PUBLIC ACCOUNTANTS OF THE
COMPANY FOR THE FISCAL YEAR ENDING APRIL 30, 1998. Assuming the presence of a
quorum, the affirmative vote of a majority of the votes cast by the holders of
the Common Stock shares present and entitled to vote on this item at the Annual
Meeting is required to ratify the selection. In determining whether this item
has received the requisite number of affirmative votes, abstentions will not be
counted and will have no effect on the result of the vote, although they will
count toward the presence of a quorum. Brokers who hold shares in street name
have the authority to vote on certain routine matters on which they have not
received instruction from the beneficial holders of such shares. Brokers holding
shares in street name, who do not receive instruction, are entitled to vote on
the ratification of the independent public accountants, and such broker votes
will count toward the presence of a quorum.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information, to the best of the Company's
knowledge, with respect to each person (including any 'group' as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
'Exchange Act')) known to the Company to be the beneficial owner (defined below)
of more than 5% of the Company's Common Stock. The percentage of shares
outstanding is based on the Company's Common Stock shares outstanding as of
August 25, 1997.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
BENEFICIALLY TOTAL VOTING
NAME AND ADDRESS OF SHAREHOLDER OWNED SHARES
- --------------------------------------------------------------------------------- ---------------- -------------
<S> <C> <C>
Gerald M. Dunne, Sr. 303,020(1) 8.8%
2502 S.W. Racquet Club Dr.
Palm City, Florida 34990
</TABLE>
- ------------------
(1) Gerald M. Dunne, Sr. is the father of the Gerald M. Dunne, Jr., the
Chairman, Chief Executive Officer and President of the Company. Shares held
by Mr. Dunne, Sr. were previously reported under the Gerald M. Dunne, Sr.
Trust, which, to the best of the Company's knowledge, was terminated in
March 1997.
The following table sets forth information, to the best of the Company's
knowledge, with respect to the Company's Common Stock, (i) the ownership of
Common Stock by each current director and nominee, (ii) the ownership of Common
Stock by the Chief Executive Officer, who is the only person named below in the
'Summary Compensation Table,' and (iii) the ownership of Common Stock by all
current directors and executive officers of the Company as a group. Except as
otherwise provided in the footnotes to the table, the beneficial owners (defined
below) have sole voting and investment power as to all securities. The
4
<PAGE>
percentage of shares outstanding is based on the Company's Common Stock shares
outstanding as of August 25, 1997.
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF
BENEFICIALLY TOTAL VOTING
NAME OWNED SHARES
- --------------------------------------------------------------------------------- ---------------- -------------
<S> <C> <C>
Mr. Gerald M. Dunne, Jr. 354,182(1) 9.9%
Chairman, Chief Executive Officer and President
Mr. Edward Harwood, Director 84,668(2) 2.4%
Mr. C. Shelton James, Director 111,178(2) 3.2%
Mr. Glenn S. Koach, Director 50,966(2) 1.5%
Mr. Peter J. Russo, Director Nominee 13,000(3) 0.4%
Mr. John L. Tomlinson, Director 63,351(4) 1.8%
All directors and executive officers as a group (9 persons) 748,723(5) 20.2%
</TABLE>
- ------------------
(1) Includes currently exercisable options to purchase 125,000 shares of Common
Stock at an exercise price of $5.0625 per share and expiring on January 23,
2002.
(2) Includes currently exercisable options to purchase 10,000 shares of Common
Stock at an exercise price of $5.0625 per share and expiring on January 23,
2002.
(3) Includes currently exercisable options to purchase 9,000 shares of Common
Stock at an exercise price of $5.0625 per share and expiring on January 23,
2002.
(4) Includes currently exercisable options to purchase 47,635 shares of Common
Stock granted to Mr. Tomlinson and an unaffiliated third party exercisable
at $3.15 per share and expiring on September 30, 1997.
(5) Includes an aggregate of currently exercisable options to purchase 240,385
shares of Common Stock, of which options to purchase 192,750 shares of
Common Stock are issuable at an exercise price of $5.0625 per share and
expire on January 23, 2002 and options to purchase 47,635 shares of Common
Stock are issuable at an exercise price of $3.15 per share and expire on
September 30, 1997.
As used in the tables above "beneficial ownership" means the sole or shared
power to vote or direct the voting or to dispose or direct the disposition of
any security. A person is deemed to have "beneficial ownership" of any security
that such person has a right to acquire within 60 days of the date of this proxy
statement. Any security that any person named above has the right to acquire
within 60 days is deemed to be outstanding for purposes of calculating the
ownership of such person but is not deemed to be outstanding for purposes of
calculating the ownership percentage of any other person. Unless otherwise
noted, each person listed has the sole power to vote, or direct the voting of,
and power to dispose, or direct the disposition of, all such shares.
5
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Gerald M. Dunne, Jr., 34, has been President, Chief Executive Officer
and Class 3 Director of the Company since February 1992 and Chairman since
August 1997. From May 1989 to February 1992, Mr. Dunne was Senior Vice President
and Vice President of Sales of the Company.
Edward Harwood, 71, has been a Class 2 Director of the Company since
September 1995. Mr. Harwood retired in 1989. For the 19 years prior to his
retirement, Mr. Harwood held various executive positions with Gould Electronics
Corporation, a computer manufacturing company.
C. Shelton James, 57, has been a Class 2 Director of the Company since
September 1995. Since May 1991, Mr. James has been Chairman and Chief Executive
Officer of Elcotel, a publicly traded corporation and manufacturer of
telecommunications equipment. Mr. James is also a director of several other
public corporations, including the following computer-related companies: NAI
Technologies, SK Technologies, Cyberguard Corporation and Concurrent Computer
Systems, as well as Fundamental Management, an investment management company.
Glenn S. Koach, 42, has been a Class 3 Director of the Company since
September 1995. Since 1984, Mr. Koach has been a Principal and Investment
Manager of Riverside Capital Advisors, an investment company based in South
Florida. Mr. Koach has served as Chairman of the Board of Metro Airlines since
1994.
John L. Tomlinson, 48, has been a Class 1 Director of the Company since
November 1995. Mr. Tomlinson is a Certified Public Accountant and has been in
private practice since 1990. Mr. Tomlinson also serves as a director of Gateway
American Bank of Florida.
Sam D. Hitner, 39, has been the Controller of the Company since August
1995. From November 1994 to August 1995, Mr. Hitner was employed with John L.
Tomlinson C.P.A., P.A., as a tax consultant. From September 1992 to July 1994,
Mr. Hitner was Controller of the sales and marketing division of South African
Druggists, a publicly held pharmaceutical manufacturer and distributor.
Peter J. Russo, 40, is a Class 1 Director nominee. He has been Chief
Financial Officer of the Company since December 1996. Mr. Russo was Executive
Vice President of the State Bank of South Australia from February 1992 to June
1996, and Senior Vice President and Chief Financial Officer for its United
States operations from May 1988 to January 1992.
Andrea A. Morey, 39, has been Vice President-Administration and Corporate
Secretary of the Company since November 1994 and Secretary since April 1991, and
has served as Director of Operations from April 1991 to November 1994 and as an
account representative from 1989 to 1990.
Michael A. Mueller, 40, has been Vice President of Marketing of the Company
since February 1992, and served as Director of National Sales from August
1991 to February 1992.
6
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the year ended April 30, 1997, the Board of Directors met 7 times
and acted by written consent in lieu of a meeting 5 times. All directors
attended 75% or more of the aggregate number of meetings of the board and its
committees on which they served.
The following are the current members and functions of the standing
committees of the Board of Directors:
Audit Committee. The Audit Committee is authorized to engage the
Corporation's independent public accountants and review with such public
accountants (i) the scope and timing of their audit services and any other
services they are asked to perform, (ii) their report on the Company's financial
statements following completion of their audit and (iii) the Company's policies
and procedures with respect to internal accounting and financial controls. The
Audit Committee is composed of Messrs. James, Koach and Tomlinson. Mr. Tomlinson
is the Chairman. During the fiscal year ending April 30, 1997, the Audit
Committee met once.
Compensation Committee. The Compensation Committee is authorized and
empowered to approve appointments and promotions of executive officers of the
Company and fix salaries for such officers; provided that all actions of the
Compensation Committee must be ratified by the full Board of Directors within
six months of the subject action. The Compensation Committee is composed of
Messrs. James and Harwood. Mr. James is the Chairman. During the fiscal year
ending April 30, 1997, the Compensation Committee met twice on an informal
basis and acted by written consent in lieu of a meeting once during that
period.
DIRECTOR COMPENSATION
Effective May 1997, non-employee directors of the Company receive a single
annual fee of $18,000 for all services rendered as a director. Such fee is
payable in equal monthly installments. Prior to May 1997, directors of the
Company were not compensated for their services as directors. All directors are
reimbursed for reasonable expenses incurred in connection with their services
rendered as directors.
7
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation awarded or paid to, or
earned by, the Company's Chief Executive Officer during the fiscal years ended
April 30, 1995, 1996 and 1997. No other executive officer of the Company serving
as an executive officer received a total salary and bonus of $100,000 for the
fiscal year ended April 30, 1997. Accordingly, no information is reported for
such persons.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
--------------------------
ANNUAL COMPENSATION AWARDS
---------------------------------------- ---------- PAYOUTS
OTHER SECURITIES ------------
ANNUAL UNDERLYING ALL OTHER
FISCAL COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) (#) ($)
- -------------------------------------- ------ --------- ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Gerald M. Dunne, Jr. 1997 $ 122,000 $88,000 $ 19,897 250,000 $225(2)
Chairman, Chief Executive 1997 $ 93,000 $41,807 $ 40,830 -- --
Officer and President 1995 $ 67,750 -- $ 23,313 -- --
</TABLE>
- ------------------
(1) For Mr. Dunne, Jr.--Fiscal 1997 amount includes: car allowance of $11,905,
medical expense coverage of $4,636 and commission income of $3,356. For
Fiscal 1996 amount includes: commission income of $30,926, car allowance of
$7,200 and medical expense of $2,704. For Fiscal 1995 amount includes:
commission income of $18,813 and car allowance of $4,500.
(2) In April 1997, the Company commenced its 401(k) plan. The amount reported
for Mr. Dunne, Jr. represents the Company's matching contribution for the
three week period ending April 30, 1997.
EMPLOYMENT AGREEMENT
In February 1997, the Company and Gerald M. Dunne, Jr. entered into a
two-year employment agreement providing for his employment as the Company's
President and Chief Executive Officer with an annual base salary of $130,000 for
the first year, increasing to $150,000 for the second year. The agreement
provides for a bonus based on certain earnings criteria. The agreement provides
that in the event of termination: (i) without cause or by Mr. Dunne for cause,
or by either party in connection with a change in control (as defined in the
agreement) of the Company, Mr. Dunne will receive a lump sum severance pay equal
to his then annual base salary and disability, accident and health insurance
benefits substantially similar to those insurance benefits Mr. Dunne is
receiving immediately before the termination for cause; (ii) as a result of the
incapacity of Mr. Dunne, Mr. Dunne shall be entitled to continue to receive 60%
of his salary for a two-year period from the date of termination; and (iii) as a
result of the death of Mr. Dunne, his estate shall be entitled to any benefits
accrued under the Company's death, disability or other benefit plan and shall be
entitled to receive a lump sum payment equal to his then annual base salary. The
agreement also includes a one-year noncompete covenant commencing on the date of
termination.
8
<PAGE>
The following table provides certain information regarding the stock
options granted during the year ended April 30, 1997 to the only executive
officer named in the Summary Compensation Table:
OPTION GRANTS FOR THE FISCAL YEAR ENDED APRIL 30, 1997
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE OF
UNDERLYING OPTIONS TO EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED(#)(1) IN FISCAL YEAR $/SHARE DATE
- ---------------------------------------------------- ------------------ --------------- ----------- ----------
<S> <C> <C> <C> <C>
Gerald M. Dunne, Jr. 250,000 57.4% $5.0625 1-23-02
</TABLE>
- ------------------
(1) All options granted are exercisable for Common Stock at an exercise price
equal to the fair market value on the date of grant. Options awarded to Mr.
Dunne, Jr. are exercisable 50 percent beginning on the date of grant and 50
percent beginning on the first anniversary date of grant.
The following table sets forth certain information for the only executive
officer named in the Summary Compensation Table with respect to the exercise of
options to purchase Common Stock during the fiscal year ended April 30, 1997 and
the number and value of securities underlying unexercised options held by the
executive officers as of April 30, 1997:
AGGREGATED OPTION EXERCISES IN THE YEAR ENDED
APRIL 30, 1997 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS HELD IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE AT APRIL 30, 1997 AT APRIL 30, 1997
NAME EXERCISE(#) REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- --------------------------------------- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gerald M. Dunne, Jr. -- -- 125,000/125,000 $0/$0
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1991, the Company entered into a royalty agreement with Gerald M. Dunne,
Sr., a principal shareholder who, as of August 25, 1997, held 8.8% of the
outstanding Common Stock shares of the Company and is the father of Gerald M.
Dunne, Jr., the Company's President and Chief Executive Officer. In
consideration for certain sales and marketing activities to be conducted by
Gerald M. Dunne, Sr. on behalf of the Company, the agreement provides for
monthly royalty payments to be paid by the Company to him based on a percentage
(.4% to 1%) of the Company's monthly net revenues. Royalties paid for the year
ended April 30 1997 were approximately $111,800. The agreement terminated on
March 24, 1997. In January 1992, in connection with such royalty agreement,
Gerald M. Dunne, Sr. entered into Assignment of Royalty Agreements with Edward
Harwood, C. Shelton James and Glenn Koach, who are directors of the Company, and
one unaffiliated third-party, pursuant to which Mr. Dunne, Sr. assigned to each
of those individuals all of his right, title and interest to 1.8% of the
royalties in excess of $10,000 per month payable to Mr. Dunne, Sr. by the
Company. No monies were paid to the assignees for the year ended April 30, 1997.
9
<PAGE>
In February 1996, Global Telecom Network ('GTN') agreed to pay the Company
50% of all profits derived from sales of prepaid long distance calling cards by
GTN to Target Stores. GTN is controlled by Mr. Dunne, Sr. In July 1996, GTN, a
company controlled by Mr. Dunne, Sr. converted accounts payable to the Company
for long distance services into a promissory note in the principal amount of
$182,050 bearing interest at a rate of 15% per annum. The outstanding principal
amount of and accrued interest on the note is payable monthly and matures on
November 15, 1997. Gerald M. Dunne, Sr. has pledged 50,000 shares of the
Company's Common Stock owned by him to secure repayment of such promissory note.
In September 1995, the Company issued a promissory note to John L.
Tomlinson, a director of the Company, and Phillip C. Cezeaux, an unaffiliated
third-party, in the aggregate principal amount of $ 100,000. The interest rate
on the promissory note adjusts semi-annually based on the prime rate plus 2% and
principal and interest is payable in equal monthly installments of $2,600 until
September 1999. At April 30, 1997, approximately $66,968 was outstanding under
such note. As an inducement for the loan, the Company issued options in
September 1995 to Messrs. Tomlinson and Cezeaux to purchase 47,635 shares of
Common Stock at a price of $3.15 per share. These options expire on September
30, 1997.
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10 percent of
any registered class of the Company's equity securities, to file with the
Securities and Exchange Commission (the 'SEC') and the Nasdaq Stock Market and
the Boston Stock Exchange reports of ownership of the Common Stock of the
Company. Reporting persons are required by SEC regulation to furnish the Company
with copies of all such reports that they file. To the best of the Company's
knowledge, during the fiscal year ended April 30, 1997, the initial Form 3
reports of each of the Company's executive officers and directors, Mr. Gerald M.
Dunne, Jr., Mr. Sam D. Hitner, Ms. Andrea A. Morey, Mr. Michael A. Mueller, Mr.
Peter J. Russo, Mr. Edward Harwood, Mr. C. Shelton James, Mr. Glenn S. Koach and
Mr. John L. Tomlinson, were not timely filed on March 23, 1997, but rather were
filed on or about April 15, 1997.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1998 Annual Meeting
of Shareholders must be received by the Company at the address appearing on the
first page of this proxy statement by May 9, 1998 in order to be considered for
inclusion in the Company's proxy statement and form of proxy relating to that
meeting.
OTHER BUSINESS
The Board of Directors of the Company is not aware of any other matters to
come before the Annual Meeting. If any other matter should come before the
meeting, the persons named in the enclosed proxy intend to vote the proxy
according to their best judgment.
10
<PAGE>
GROUP LONG DISTANCE, INC.
PROXY SOLICITED BY THE BOARD DIRECTORS
The undersigned, hereby appoints Peter J. Russo, Chief Financial Officer of
Group Long Distance, Inc., a Florida corporation (the 'Company'), and Sam D.
Hitner, Controller of the Company, and each of them, as proxies for the
undersigned, each with full power of substitution, for and in the name of the
undersigned to act for the undersigned and to vote, as designated below, all of
the shares of common stock, no par value, of the Company that the undersigned is
entitled to vote at the 1997 Annual Meeting of Shareholders of the Company, to
be held on October 10, 1997, at 11:00 a.m. (local time), at the DoubleTree Guest
Suites, 555 N.W. 62nd Street, Fort Lauderdale, Florida, and at any adjournments
or postponements thereof, in accordance with the directions as follows respect
to the following matters:
ITEM 1. Approve election of Class 1 Director Nominees:
John L. Tomlinson and Peter J. Russo
ITEM 2. Ratify appointment of Grant Thornton LLP as the independent
public accountants of the Company for the fiscal year ending
April 30, 1998
ITEM 3. Such other matters as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2: Please mark
your votes as in this example /x/.
1. ELECTION OF CLASS 1 DIRECTORS:
John L. Tomlinson / / FOR / / WITHHOLD AUTHORITY
Peter J. Russo / / FOR / / WITHHOLD AUTHORITY
- --------------------------------------------------------------------------------
<PAGE>
2. To ratify the appointment of Grant Thornton LLP as the independent public
accountants of the Company for the fiscal year ending April 30, 1998.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
matters as may properly come before the meeting.
This proxy will be voted as directed.
Unless otherwise directed, this Proxy
will be voted for Proposals 1 and 2.
Dated: _________________________, 1997
--------------------------------------
Shareholder sign here
--------------------------------------
Co-owner sign here
NOTE: Please sign exactly as the name
appears on this card. When shares are
held by joint tenants, both should
sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as
such. 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.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE SO THAT YOUR VOTE WILL BE
COUNTED.
