SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] 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)(1) and 0-11.
________________________________________________________________________________
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
[_] Fee paid previously with preliminary materials:
________________________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
GROUP LONG DISTANCE, INC.
6600 N. Andrews Avenue, Suite 140
Fort Lauderdale, FL 33309
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 14, 2000
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 10:30 a.m. (local time), on March
14, 2000, at the Marriott Hotel, 6650 N. Andrews Avenue, Fort Lauderdale,
Florida, for the following purposes:
1. To elect two Class 3 Directors of the Company to serve until the
annual meeting of shareholders in 2002 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, 2000; 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 February 4,
2000 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,
SAM D. HITNER,
Secretary
February 15, 2000
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
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 ........................................................... 5
Meetings of the Board of Directors and its Committees ..................................................... 6
Director Compensation ..................................................................................... 7
Executive Compensation .................................................................................... 7
Summary Compensation Table .......................................................................... 7
Option Grants for the Fiscal Year Ended April 30, 1999 .............................................. 9
Aggregated Option Exercises in the Year Ended
April 30, 1999 and Fiscal Year-End Option Values ................................................. 9
Employment Agreement ................................................................................ 10
Certain Relationships and Related Transactions ............................................................ 10
Compliance with Section 16(a) of the Securities Exchange Act of 1934 ...................................... 11
Shareholder Proposals ..................................................................................... 12
Other Business ............................................................................................ 12
</TABLE>
(i)
<PAGE>
GROUP LONG DISTANCE, INC.
6600 N. Andrews Avenue, Suite 140
Fort Lauderdale, FL 33309
(954) 771-9696
-----------
PROXY STATEMENT
for
Annual Meeting of Shareholders
March 14, 2000
-----------
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 10:30 a.m. (local time), on
March 14, 2000 at the Marriott Hotel, 6650 N. Andrews Avenue, 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. Stanley A. Gottlieb and Jack Kanfer as Class 3 Directors of the
Company to serve until the annual meeting of shareholders in 2002 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, 2000, 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 1999 Annual Report to Shareholders, are being mailed to shareholders
on or about February 15, 2000.
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 Sam D. Hitner,
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Secretary, Group Long Distance, Inc., 6600 North Andrews Avenue, Suite 140, Fort
Lauderdale, Florida 33309 or by Facsimile at (954) 771-9910.
Proxies may be solicited by mail, and may also be solicited by telephone
and facsimile, 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 to be 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 February 4, 2000 (the "Record
Date") are entitled to notice of and to vote at the Annual Meeting. As of
February 4, 2000, there were outstanding 3,500,402 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 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 the 2001 annual
meeting of Shareholders, Class 2, at the 2000 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 3
Directors until the annual meeting of shareholders in 2002 and until their
respective successors are duly elected and qualified:
Stanley A. Gottlieb, 69, has been a Class 3 Director of the
Company since December 1997. Mr. Gottlieb has been an Attorney since 1996,
and prior to his retirement in December 1997, he held various positions at
The Hearst Corporation, most recently as Vice President-Taxes. He
continues to act
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as Senior Tax consultant to The Hearst Corporation.
Jack Kanfer, 63, has been a Class 1 Director of the Company since
December 21, 1999. Mr. Kanfer succeeded Mr. Dunne as a Director, upon his
resignation. Since 1987, Mr. Kanfer has been CEO and Director of Telecom
Consulting Group and B&D Telecom Corp., both privately held
telecommunication companies located in Pompano Beach, Florida. From 1976
to 1987 Mr. Kanfer was a consultant specializing in turnarounds, mergers
and acquisitions. Prior to 1976, Mr. Kanfer was a Senior Vice President of
SCA Services, a New York Stock Exchange listed company that was acquired
by Waste Management.
Proxies are solicited in favor of the two Class 3 Director nominees and it
is intended that the proxies will be voted for the nominees unless otherwise
specified. Should a nominee 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, 2000.
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.
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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, 2000. 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, known to the Company with
respect to the beneficial ownership of its Common Stock as of February 11, 2000
for (i) each person who is known to the Company to own beneficially more than 5%
of the Company's Common Stock, (ii) each of the Company's directors, (iii) each
of the Company's executive officers and (iv) all directors and executive
officers as a group.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------- --------------------- ------------------
Name Number of Shares Percentage of
Beneficially Total Voting
Owned Shares(1)
- --------------------------------------------------------------------------- --------------------- ------------------
<S> <C> <C>
Mr. H. T. Ardinger, Jr. 400,000(2) 10.5%
9040 Governors Row
Dallas, Texas 75247-3774
Mr. Glenn S. Koach, President and Chief Executive Officer and Director (3) 540,966(4) 13.1%
Mr. Sam D. Hitner, Chief Financial Officer and Secretary(5) 29,000(6) 0.7%
Mr. John L. Tomlinson, Chairman of the Board, Vice President and Director (7) 39,066(8) 0.9%
Mr. Edward Harwood, Director 99,668(8) 2.4%
Mr. Stanley A. Gottlieb, Director 32,000(8) 0.8%
Mr. Jack Kanfer, Director 39,000(8) 0.9%
Mr. Gerald M. Dunne, Jr., Former Chairman, President and Chief Executive 229,182(9) 6.5%
Officer
Mr. Peter J. Russo, Former Chief Financial Officer 4,000(10) 0.1%
All directors and current executive officers as a group (8 persons) 1,012,882(11) 24.6%
- --------------------------------------------------------------------------- --------------------- ------------------
</TABLE>
- ----------
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Except as indicated by
footnote, the persons named in the table above have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by them. The number of shares of common stock
outstanding used in calculating the percentage for each listed person
includes the shares of common stock underlying the options or warrants
held by such person that are exercisable within 60 days of the date
hereof, but excludes shares of common stock underlying options or warrants
held by any other person.
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(2) Includes 100,000 shares of common stock and 300,000 shares of common stock
issuable upon the exercise of redeemable warrants.
(3) Became President and Chief Executive Officer on October 13, 1999.
(4) Includes currently exercisable options to purchase 100,000 shares of
common stock at an exercise price of $.20 per share, 100,000 shares of
common stock at an exercise price of $.40 per share, 100,000 shares of
common stock at an exercise price of $.60 per share, 100,000 shares of
common stock at an exercise price of $.80 per share and 100,000 shares of
common stock at an exercise price of $1.00 per share. All options expire
on November 18, 2004.
(5) Became Chief Financial Officer on September 11, 1999.
(6) Includes currently exercisable options to purchase 10,000 shares of common
stock at an exercise price of $.20 per share that were repriced from 1.375
per share, 8,750 shares of common stock at an exercise price of $.40 per
share that were repriced from 1.375 per share and 6,250 shares of common
stock at an exercise price of $0.50 per share. All options expire on
December 22, 2004.
(7) On October 13, 1999, Mr. Tomlinson, Vice-President and a Director of the
Company, was appointed as Chairman of the Board upon the resignation of
Mr. Dunne.
(8) Includes options exercisable one year after grant date of November 18,
1999 to purchase 20,000 shares of common stock at an exercise price of
$.20 per share and 5,000 shares of common stock at an exercise price of
$.40 per share, all expiring on November 18, 2004.
(9) Served as President and Chief Executive Officer, Director and Chairman of
the Board until October 13, 1999.
(10) Served as Chief Financial Officer and Director of the Company, until
September 11, 1999.
(11) Includes an aggregate of currently exercisable options to purchase
625,000 shares of common stock.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Glenn S. Koach, 44, was appointed President and Chief Executive Officer on
October 13, 1999, following the resignation of Mr. Gerald M. Dunne, Jr. as
Chairman, President and Chief Executive Officer of the Company and its
subsidiaries. Mr. Koach was appointed Executive Vice President on August 1, 1999
and a Director on September 11, 1999. Mr. Koach succeeded Mr. Peter Russo as a
Class 1 Director upon Mr. Russo's resignation. Mr. Koach is a Certified Public
Accountant and had been a Principal of Riverside Capital Advisors, an investment
company based in South Florida, from 1988 to 1997. Mr. Koach has served as
Chairman of the Board of Metro Airlines from 1994 to 1997, and is also President
of Harvard Corporation, a private real estate investment company.
Sam D. Hitner, 42. Since September 11, 1999, Mr. Hitner has been the Chief
Financial Officer, following the resignation of Mr. Peter Russo as Chief
Financial Officer of the Company and its subsidiaries. Mr. Hitner had been the
Controller of the Company since August 1995 and Secretary since October 1997.
From November 1994 to August 1995, Mr. Hitner was employed with John L.
Tomlinson C.P.A., P.A., as a tax consultant.
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John L. Tomlinson, 50, was appointed Chairman of the Board on October 13,
1999 upon Mr. Dunne's resignation and has been a Class 1 Director of the Company
since November 1995. In May 1999, Mr. Tomlinson was appointed as a Vice
President of the Company. 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.
Stanley A. Gottlieb, 69, has been a Class 3 Director of the Company since
December 1997. Mr. Gottlieb has been an Attorney since 1966, and prior to his
retirement in December 1997, he held various positions at The Hearst
Corporation, most recently as Vice President-Taxes. He continues to act as
Senior Tax consultant to The Hearst Corporation.
Edward Harwood, 73, has been a Class 2 Director of the Company since
September 1995. For the 19 years prior to his retirement in 1989, Mr. Harwood
held various executive positions with Gould Electronics Corporation, a computer
manufacturing company.
Jack Kanfer, 63, has been a Class 1 Director of the Company since December
21, 1999. Mr. Kanfer succeeded Mr. Dunne as a Director, upon his resignation.
Since 1987, Mr. Kanfer has been CEO and Director of Telecom Consulting Group and
B&D Telecom Corp., both privately held telecommunication companies located in
Pompano Beach, Florida. From 1976 to 1987 Mr. Kanfer was a consultant
specializing in turnarounds, mergers and acquisitions. Prior to 1976, Mr. Kanfer
was a Senior Vice President of SCA Services, a New York Stock Exchange listed
company that was acquired by Waste Management.
There are no family relationships between any of the Officers and
Directors of the Company.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
During the year ended April 30, 1999, the Board of Directors held 7 formal
meetings, and additionally met informally on numerous occasions. 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
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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. Gottlieb, Tomlinson and Kanfer. Mr.
Gottlieb is the Chairman. During the fiscal year ending April 30, 1999, the
Audit Committee met twice.
Option and Compensation Committee. The Option and 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 Option and Compensation
Committee is composed of Messrs. Tomlinson, Harwood and Koach. Mr. Tomlinson is
the Chairman. During the fiscal year ending April 30, 1999, the Option and
Compensation Committee met once.
DIRECTOR COMPENSATION
Effective May 1997, non-employee directors of the Company receive a fee of
$1,500 per month for all services rendered as a director. 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.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to the
annual compensation of the Company's Former Chief Executive Officer and Former
Chief Financial Officer during the fiscal years ended April 30, 1999, 1998 and
1997. No other executive officer of the Company serving as an executive officer
received a total salary and bonus of $100,000 for the fiscal year ended April
30, 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
- ----------------------------------------- ------ ---------------------------------------- --------------------------
Name and Principal Position Fiscal Annual Compensation Long Term Compensation
Year
----------- ------------ --------------- ----------- --------------
Salary ($) Bonus ($) Other Awards Payouts
Annual
Compensation
($)
----------- --------------
Securities All Other
Underlying Compensation
Options ($)
(#)
- ----------------------------------------- ------ ----------- ------------ --------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Gerald M. Dunne, Jr. 1999 $165,000 $36,000 $17,801(1) 200,000(4) $4,500(2)
Former Chairman, Chief Executive 1998 $150,000 $255,000 $21,296(1) -- $4,500(2)
Officer and President 1997 $122,000 $88,000 $19,897(1) 250,000 $225(2)
- ----------------------------------------- ------ ----------- ------------ --------------- ----------- --------------
Peter J. Russo 1999 $100,000 $18,000 $10,043(3) 80,000(4) $3,000(2)
Former Chief Financial Officer 1998 $85,000 $70,000 $9,132(3) 14,000 $2,550(2)
1997 $27,692 $25,000 $1,805(3) 36,000 --
- ----------------------------------------- ------ ----------- ------------ --------------- ----------- --------------
</TABLE>
- ----------
(1) For Mr. Dunne, Jr. - Fiscal 1999 amount includes auto expenses of $11,982
and medical expense coverage of $5,819; Fiscal 1998 amount includes auto
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expenses of $17,123 and medical expense coverage of $4,173; Fiscal 1997
amount includes: car allowance of $11,905, medical expense coverage of
$4,636 and commission income of $3,356.
(2) In April 1997, the Company commenced its 401(k) plan. The amount reported
represents the Company's matching contribution for the fiscal year ended
April 30, 1999. The plan was terminated in March 1999.
(3) For Mr. Russo - Fiscal 1999 amount includes auto expenses of $4,800 and
medical expense coverage of $5,243; Fiscal 1998 amount includes auto
expenses of $4,800 and medical expense coverage of $4,032; Fiscal 1997
amount includes: medical expense coverage of $1,805.
(4) On July 2, 1998 the Company's Board of Directors granted 75,000 options
and 30,000 options to purchase shares of common stock at $1.375 a share to
Mr. Dunne and Mr. Russo, respectively. These options have both
subsequently terminated.
On October 9, 1998 the Company's Board of Directors granted 125,000
options and 50,000 options to purchase shares of common stock at $0.50 a
share to Mr. Dunne and Mr. Russo, respectively. These options have both
subsequently terminated.
On October 13, 1999, Mr. Dunne resigned as Chairman, Chief Executive
Officer and President. Mr. Glenn Koach, formerly Executive Vice President, was
appointed as President on October 13, 1999. Effective November 1999 pursuant to
the terms of an employment agreement, Mr. Koach receives a monthly salary of
$12,500 and a monthly car allowance of $500. For the year ended April 30, 1999,
Mr. Koach did not receive any compensation from the Company.
On September 11, 1999, Mr. Russo resigned as Chief Financial Officer of
the Company. Mr. Russo entered into a Consulting Agreement to remain as a
consultant to the Company for the four-month term of the Agreement, with a
two-month option to extend by the Company. The Consulting Agreement was not
renewed after the initial four-month term. Mr. Russo was succeeded by Mr. Hitner
as Chief Financial Officer, formerly the Controller of the Company.
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- ----------
The following table provides certain information regarding the stock
options granted during the year ended April 30, 1999 to the former executive
officers named in the Summary Compensation Table.
<TABLE>
<CAPTION>
Option Grants For the Fiscal Year Ended April 30, 1999
- ---------------------------------- --------------------- ------------------ ------------------- --------------------
Name Number of % of Total Exercise of Expiration Date
Securities Options Granted Base Price
Underlying Options to Employees $/Share
Granted (#)(1) in Fiscal Year
- ---------------------------------- --------------------- ------------------ ------------------- --------------------
<S> <C> <C>
Gerald M. Dunne, Jr. 200,000(1)(2) -- -- --
Peter J. Russo 80,000(1)(2) -- -- --
- ---------------------------------- --------------------- ------------------ ------------------- --------------------
</TABLE>
(1) On July 2, 1998 the Company's Board of Directors granted 75,000 options and
30,000 options to purchase shares of common stock at $1.375 a share to Mr.
Dunne, former President and Chief Executive Officer, and Peter J. Russo,
former Chief Financial Officer, respectively. These options have both
subsequently terminated.
(2) On October 9, 1998 the Company's Board of Directors granted 125,000 options
and 50,000 options to purchase shares of common stock at $0.50 a share to
Mr. Dunne, former President and Chief Executive Officer, and Mr. Russo,
former Chief Financial Officer, respectively. These options have both
subsequently terminated.
The following table sets forth certain information for the former
executive officers named in the Summary Compensation Table with respect to the
exercise of options to purchase Common Stock during the fiscal year ended April
30, 1999 and the number and value of securities underlying unexercised options
held by these former executive officers as of April 30, 1999.
<TABLE>
<CAPTION>
Aggregated Option Exercises In the Year Ended
April 30, 1999 and Fiscal Year-End Option Values
- -------------------------------- ----------------- --------------- ------------------------ ------------------------
Name Shares Value Realized Number of Value of Unexercised
Acquired on Securities Underlying In-the-Money Options
Exercise (#) Unexercised Options at April 30, 1999
Held at April 30, 1999 Exercisable/Unexercisable
Exercisable/Unexercisable
- -------------------------------- ----------------- --------------- ------------------------ ------------------------
<S> <C> <C> <C> <C>
Gerald M. Dunne, Jr. -- -- 250,000/0 (1) $0/$0
Peter J. Russo -- -- 45,333/4,667 (1) $0/$0
- -------------------------------- ----------------- --------------- ------------------------ ------------------------
</TABLE>
(1) These two executive officers named in the above table, have terminated
their employment with the Company, and the options described above have
expired.
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Employment Agreement
In November 1999, the Company and Mr. Koach entered into a one-year
employment agreement providing for his employment as the Company's President and
Chief Executive Officer with an annual base salary of $150,000 per year. The
agreement shall be automatically renewed for one-year periods, unless either
party to the agreement gives written notice to the other party not less than
ninety (90) days prior to the expiration of such period. The agreement provides
for a bonus based on the Company's performance, profitability, positive cash
flow and other factors as may be determined by the Option and Compensation
Committee of the Board of Directors. Mr. Koach shall also be entitled to stock
options in accordance with the Company's 1996 Stock Option Plan. The agreement
provides that in the event of termination for cause, Mr. Koach shall not be
entitled to receive any further installments of base salary or other
compensation, including severance payments. In the event of termination without
cause, Mr. Koach will receive a severance payment equal to three months of his
then annual base salary. The agreement also includes a three-month agreement not
to compete commencing on the date of termination.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In September 1995, John L. Tomlinson, Vice President and Chairman of the
Board of the Company, and Philip C. Cezeaux, an unaffiliated third-party, loaned
the Company an aggregate principal amount of $100,000, for which the Company
issued its unsecured promissory note. The interest rate on the promissory note
adjusted semi-annually based on the prime rate plus 2% and principal and
interest was payable in equal monthly installments of $2,600 until September
1999. The promissory note was repaid in full in February 1999. 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 expired on September 30, 1997, and 16,700 shares were
exercised in September 1997.
For the year ended April 30, 1999 and 1998, John L. Tomlinson Chairman of
the Board and a director of the Company performed taxation services for the
Company. John L. Tomlinson CPA, PA was paid for these services approximately
$19,000 and $10,000 for the year ending April 30, 1999 and 1998, respectively.
In May 1999, Mr. Tomlinson was appointed a Vice President of the Company.
On September 11, 1999, Mr. Peter Russo resigned as Chief Financial Officer
and a Director of the Company and it subsidiaries. On September 11, 1999 the
Company entered into a Consulting Agreement with Torbay Management Services,
Inc., a corporation controlled by Mr. Russo ("Torbay"), pursuant to which Torbay
provided consulting services to the Company. Torbay received a monthly
consulting fee of $6,000 for the four-month term of the
10
<PAGE>
agreement. As at February 11, 2000, the Company had paid Torbay $24,000 in
consulting fees. The Consulting Agreement was not renewed after the initial
four-month term.
On October 13, 1999, Mr. Gerald M. Dunne, Jr. ("Dunne") resigned as
President, Chief Executive Officer and a Director of the Company and each of its
subsidiaries. In connection with Dunne's resignation, on October 13, 1999, the
Company and Dunne entered into a Separation Agreement (the "Separation
Agreement") pursuant to which the Company agreed to pay Dunne severance pay of
$190,000, less all applicable employment withholding taxes. Pursuant to the
Separation Agreement, Dunne is also subject to confidentiality and non-compete
provisions. Pursuant to the Separation Agreement, Dunne is also to receive (1)
health insurance benefits for two years, (2) coverage under the Company's
Directors and Officers insurance policy for two years and (3) a car allowance
for one year effective September 1, 1999. Pursuant to the Separation Agreement,
Dunne and the Company have also released each other against any and all claims
that either may have against each other in connection with Dunne's employment by
the Company. As at February 11, 2000 the Company has paid out $188,968 pursuant
to the Separation Agreement. Pursuant to the Separation Agreement, the Company
may engage Dunne as a consultant from time to time and Dunne will be compensated
at the rate of $250 per hour for such services. As at February 11, 2000 the
Company had paid out $500 to Mr. Dunne as consultant.
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
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") 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, all such reports were filed for the fiscal year
ended April 30, 1999.
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SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2000 Annual Meeting
of Shareholders must be received by the Company at the address appearing on the
first page of this proxy statement by July 31, 2000 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.
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GROUP LONG DISTANCE, INC.
PROXY SOLICITED BY THE BOARD DIRECTORS
The undersigned, hereby appoints Sam D. Hitner, Chief Financial Officer
and Secretary of Group Long Distance, Inc., a Florida corporation (the
"Company"), as proxy for the undersigned, 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 1999 Annual Meeting of
Shareholders of the Company, to be held on March 14, 2000, at 10:30 a.m. (local
time), at the Marriott Hotel, 6650 N. Andrews Avenue, Fort Lauderdale, Florida,
with respect to the following matters:
Item 1. Election of Class 3 Director Nominees: Messrs. Stanley A.
Gottlieb and Jack Kanfer
Item 2. Appointment of Grant Thornton LLP as the independent
public accountants of Company for the fiscal year ending
April 30, 2000.
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. Stanley A. Gottlieb [ ] FOR [ ] WITHHOLD AUTHORITY
Jack Kanfer [ ] FOR [ ] WITHHOLD AUTHORITY
2. To ratify the appointment of Grant Thornton LLP as the independent public
accountants of the Company for the fiscal year ending April 30, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxy is authorized to vote upon such other matters
as may properly come before the meeting.
<PAGE>
This proxy will be voted as directed. Unless
otherwise directed, this Proxy will be voted
for Proposals 1 and 2.
Dated: __________________________________, 2000
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Shareholder sign here
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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.
