<PAGE>
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
Commission
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
ACCESS WORLDWIDE COMMUNICATIONS, 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 identifying 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>
ACCESS WORLDWIDE COMMUNICATIONS, INC.
----------------
Notice of Annual Meeting of Stockholders
to be held May 25, 1999
----------------
Arlington, Virginia
April 30, 1999
To the Holders of Common Stock of
ACCESS WORLDWIDE COMMUNICATIONS, INC.:
The Annual Meeting of the Stockholders of ACCESS WORLDWIDE COMMUNICATIONS,
INC. (the "Company") will be held at the executive offices of the Company at
2200 Clarendon Boulevard, 12th Floor, Arlington, Virginia at 9:00 a.m., local
time, on Tuesday, May 25, 1999, to consider and act upon the following matters:
1. The election of seven directors for the ensuing year.
2. To approve an amendment to the Company's 1997 Stock Option Plan (the
"Stock Option Plan") to increase the number of shares of common stock
authorized for issuance over the term of the Stock Option Plan by an
additional 500,000 shares.
3. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants.
4. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The close of business on April 27, 1999 has been fixed by the Board of
Directors as the record date for the determination of stockholders entitled to
notice of, and to vote at, the meeting.
By Order of the Board of Directors,
Michael Dinkins
Senior Vice President, Secretary
and Chief Financial Officer
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. IF YOU DO NOT
EXPECT TO BE PRESENT, PLEASE MARK, SIGN AND DATE THE ENCLOSED FORM OF PROXY AND
MAIL IT IN THE ENCLOSED RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES, SO THAT YOUR VOTE CAN BE RECORDED.
<PAGE>
ACCESS WORLDWIDE COMMUNICATIONS, INC.
----------------
PROXY STATEMENT
----------------
This Proxy Statement, which will be mailed commencing on or about April 30,
1999 to the persons entitled to receive the accompanying Notice of Annual
Meeting of Stockholders, is provided in connection with the solicitation of
Proxies on behalf of the Board of Directors of Access Worldwide Communications,
Inc. (the "Company") for use at the 1999 Annual Meeting of Stockholders (the
"Meeting") to be held on May 25, 1999, and at any adjournment or adjournments
thereof, for the purposes set forth in such Notice. The Company's executive
offices are located at 2200 Clarendon Blvd., Suite 1201, Arlington, Virginia,
22201.
Holders of record of issued and outstanding shares of common stock, $.01 par
value ("Common Stock"), of the Company, as of April 27, 1999 (the "Record
Date") will be entitled to notice of and to vote at the Meeting as described
below. On the Record Date, there were issued and outstanding 9,528,477 shares
of Common Stock. The Company has no class or series of stock outstanding and
entitled to vote at the Meeting other than the Common Stock. Each share of
Common Stock is entitled to one vote with respect to each matter to be voted on
at the Meeting.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is necessary
to constitute a quorum at the Meeting or any adjournments thereof. Directors of
the Company are elected by a plurality vote. Adoption of Proposals II and III
will require the affirmative vote of the holders of a majority of the shares of
Common Stock entitled to vote on those proposals and present in person or
represented by proxy. Abstentions and broker non-votes (as hereinafter defined)
will be counted as present for the purpose of determining the presence of a
quorum. For the purpose of determining the vote required for approval of
matters to be voted on at the Meeting, shares held by stockholders who abstain
from voting will be treated as being "present" and "entitled to vote" on the
matter and, thus, an abstention has the same legal effect as a vote against the
matter. However, in the case of a broker non-vote or where a stockholder
withholds authority from his Proxy to vote the Proxy as to a particular matter,
such shares will not be treated as "present" and "entitled to vote" on the
matter and, thus, a broker non-vote or the withholding of a Proxy's authority
will have no effect on the outcome of the vote on the matter. A "broker non-
vote" refers to shares of Common Stock represented at the Meeting in person or
by proxy by a broker or nominee where such broker or nominee (i) has not
received voting instructions on a particular matter from the beneficial owners
or persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on such matter.
Any Proxy may be revoked at any time before it is exercised by written
notice to the Secretary of the Company. The casting of a ballot at the Meeting
by a stockholder who may theretofore have given a Proxy will not have the
effect of revoking that Proxy unless the stockholder so notifies the Secretary
of the Company in writing at any time prior to the voting of the shares
represented by the Proxy.
I. ELECTION OF DIRECTORS
Seven directors will be elected at the Meeting. It is the intention of each
of the persons named in the accompanying form of Proxy to vote the shares
represented thereby in favor of the seven nominees listed in the following
table, unless contrary instructions are given. All of such nominees are
presently serving as directors. In case any of the nominees is unable or
declines to serve, such persons reserve the right to vote the shares
represented by such Proxy for another person duly nominated by the Board of
Directors in his stead or, if no other person is so nominated, to vote such
shares only for the remaining nominees. The Board of Directors has no reason to
believe that any person named will be unable or will decline to serve. The
directors elected by the stockholders will serve until the 2000 Annual Meeting
of Stockholders and until their respective successors are duly elected and
shall have qualified. Certain information concerning the nominees for election
as directors is set forth below. Such information was furnished by them to the
Company.
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Stock Owned
Beneficially as
Name of Nominee and of April 27, Percent
Biographical Information 1999(1) of Class
- ------------------------ ---------------- --------
<S> <C> <C>
Peter D. Bewley, age 52, has been a director of the 13,000(2) *
Company since May 1997. Mr. Bewley has been Senior
Vice President-General Counsel and Secretary of The
Clorox Company since February 1998. From May 1994 to
February 1998, he was Senior Vice President, General
Counsel and Secretary of NovaCare, Inc.
("NovaCare"), a national clinical and technological
leader in providing comprehensive rehabilitation
services. Prior to joining NovaCare, Mr. Bewley was
employed as an attorney with Johnson & Johnson for
17 years, most recently as Associate General
Counsel. Before that, he served as an associate with
the law firm of Wilmer, Cutler & Pickering from 1972
to 1977.
Liam S. Donohue, age 32, has been a director of the 2,200 *
Company since December 1996. Mr. Donohue is a
founding partner of DHM Arcadia Partners, a private
equity fund investing in the for-profit education
and training industry. From 1995 through 1998, Mr.
Donohue was a principal of Foster Management
Company, an investment advisor. In 1994, he was an
Associate of Salomon Brothers Corporate Finance
Group in London. From 1989 to 1993, he was an
Associate with Booz, Allen and Hamilton, Inc.'s
International Environmental Management Practice
where he started Booz, Allen's office in Budapest,
Hungary.
Lee H. Edelstein, age 51, has been a director of the 196,315(3) 2.1%
Company since October 1997 and President of the TMS
Professional Markets Group of the Company since
January 1997. In 1992, he founded TMS, a
pharmaceutical/healthcare direct marketing and
teleservices company acquired by the Company in
January 1997. Prior to founding TMS, Mr. Edelstein
worked for Goldline Laboratories, a division of IVAX
Corp., for 11 years in various management positions
including Operations Manager, Director of Marketing
and Vice President of Marketing and Business
Development.
John W. Fitzgerald, age 52, has been President, 313,000(4) 3.3%
Chief Executive Officer and a director of the
Company since April 1997. He was President and Chief
Operating Officer of Saatchi & Saatchi Worldwide
(1996) and he served in various capacities at
McCann-Erickson Worldwide from 1990 to 1995, serving
as President and Chief Executive Officer for McCann-
Erickson Japan and Vice Chairman of North America
and Chief Operating Officer of New York for McCann-
Erickson.
John H. Foster, age 56, has been a director of the 3,510,000(5) 36.8%
Company since December 1996. He is the founder and
Chairman of Foster Management Company. He is the
founder and Chairman of the Board of NovaCare since
December 1984. Between December 1984 and May 1997 he
was also Chief Executive Officer of NovaCare. Mr.
Foster has been Chairman of the Board of Integra,
Inc., a national mental health services company
since March 1991. He is also a director of NovaCare
Employee Services, Inc., a professional employer
organization, and a director of Corning
Incorporated, an international corporation with
business interests in specialty materials and
communications.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Shares of Common
Stock Owned
Beneficially as
Name of Nominee and of March 24, Percent
Biographical Information 1999(1) of Class
- ------------------------ ---------------- --------
<S> <C> <C>
Stephen F. Nagy, age 54, has been Chairman of the 3,552,500(5)(6) 37.3%
Board and a director of the Company since
December 1996. Between January 1996 and September
1998 Mr. Nagy served as Chairman of the Board and
a director of Valley Forge Dental Associates,
Inc., a leading provider of dental services, as
well as Chief Executive Officer until October
1997. Mr. Nagy was Chairman of the Board of The
Pet Practice, Inc., a leading provider of
veterinary services, from March 1995 to July 1996
and a director from October 1993 to July 1996.
Mr. Nagy has been a Managing Partner of Foster
Management Company since 1989. He was President
of Foster Medical Corporation from 1982 to 1984
and Executive Vice President of Avon Products,
Inc. from 1984 to 1986. Mr. Nagy was a Vice
President of Foster Management Company from 1980
to 1982. From 1971 to 1980, Mr. Nagy was with
Booz, Allen and Hamilton, Inc., serving as Vice
President from 1976 to 1980.
Shawkat Raslan, age 47, has been a director of 2,000(7) *
the Company since May 1997. Since June 1983, Mr.
Raslan has served as President and Chief
Executive Officer of International Resources
Holdings, Inc., an asset management and
investment advisory service for international
clients. Prior thereto, he served as Vice
President of Trans Arabian Investment Bank in
Bahrain from 1980 to 1983. From 1976 to 1980, Mr.
Raslan was a liaison officer and engineer for
Turner International in New York. Mr. Raslan
serves on the Board of Advisors of investment
funds managed by Foster Management Company. He
currently serves as a director of Integra, Inc.,
Arbitrage Associates, Parisco Limited, Tiedemann
International Research and U.S. HomeCare Corp.
</TABLE>
- --------
* Less than one percent.
(1) As of April 27, 1999, each director had sole voting and investment power
with respect to all shares shown in the table as beneficially owned by him,
except as indicated below.
(2) Includes 2,000 shares of Common Stock presently issuable upon exercise of
options.
(3) Includes 1,000 shares of Common Stock presently issuable upon exercise of
options.
(4) Includes 60,000 shares of Common Stock presently issuable upon exercise of
options.
(5) Includes 3,500,000 shares of Common Stock owned by Abbingdon Venture
Partners Limited Partnership-II ("Abbingdon-II") and Abbingdon Venture
Partners Limited Partnership-III ("Abbingdon-III), limited partnerships of
which John H. Foster and Stephen F. Nagy are general partners of the
general partner.
(6) Includes 20,000 shares of Common Stock owned by a trust for the benefit of
Mr. Nagy's children, of which Mr. Nagy's spouse is trustee.
(7) Represents 2,000 shares of Common Stock presently issuable upon exercise of
options.
3
<PAGE>
During the fiscal year ended December 31, 1998, the Board of Directors of
the Company met four times. The Board of Directors also acted by means of
unanimous written consent on two occasions during 1998. All of the directors
attended at least 75% of the meetings of the Board of Directors and meetings of
any committees of the Board on which such person served which were held during
the time that such person served with the exception of John H. Foster who
attended 50% of such Board and committee meetings.
The Board has a Compensation Committee, an Audit Committee, an Acquisition
Committee and a Nominating Committee. The members of the Compensation Committee
are Peter D. Bewley, Liam S. Donohue, John H. Foster and Shawkat Raslan. The
Compensation Committee has a Stock Option Subcommittee. The members of the
Stock Option Subcommittee are Peter D. Bewley and Shawkat Raslan. The
Compensation Committee makes recommendations to the full Board as to the
compensation of senior management. The Stock Option Subcommittee administers
the Company's Stock Option Plan and determines the persons who are to receive
options, the number of shares subject to each option and the terms, including
the exercise price, of such options. The Compensation Committee met one time in
1998. The Stock Option Subcommittee acted by unanimous written consent twelve
times in 1998.
The members of the Audit Committee are Peter D. Bewley, John H. Foster and
Shawkat Raslan. The Audit Committee acts as a liaison between the Board and the
independent accountants and annually recommends to the Board the appointment of
the independent accountants. The Audit Committee reviews with the independent
accountants the planning and scope of the audits of the financial statements,
the results of those audits and the adequacy of internal accounting controls
and monitors other corporate and financial policies. The Audit Committee met
once during 1998 and met in early 1999 to review the results of the Company's
1998 audit.
The members of the Acquisition Committee are John W. Fitzgerald, Liam S.
Donohue, Lee H. Edelstein and Stephen F. Nagy. The Acquisition Committee is
authorized to approve acquisitions of businesses having an aggregate purchase
price of less than $5,000,000. The Acquisition Committee did not meet in 1998.
The members of the Nominating Committee are Peter D. Bewley, John W.
Fitzgerald, John H. Foster and Stephen F. Nagy. The Nominating Committee is
authorized to review, approve and recommend persons for election as directors.
The Nominating Committee did not meet during 1998. It will consider nominations
by stockholders which should be submitted in writing to the Chairman of the
Committee addressed in care of Secretary, Access Worldwide Communications,
Inc., 2200 Clarendon Blvd, Arlington, Virginia 22201.
Article Sixth of the Certificate of Incorporation of the Company provides
that the Company shall indemnify and hold harmless any director, officer,
employee or agent of the Company from and against any and all expenses and
liabilities that may be imposed upon or incurred by him in connection with, or
as a result of, any proceeding in which he may become involved, as a party or
otherwise, by reason of the fact that he is or was such a director, officer,
employee or agent of the Company, whether or not he continues to be such at the
time such expenses and liabilities shall have been imposed or incurred, to the
extent permitted by the laws of the State of Delaware, as they may be amended
from time to time.
Article Eleventh of the Certificate of Incorporation of the Company contains
a provision which eliminates the personal liability of a director of the
Company to the Company or to any of its stockholders for monetary damages for a
breach of his fiduciary duty as a director, except in the case in which the
director breached his duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a stock repurchase in violation of the Delaware General
Corporation Law, or obtained an improper personal benefit.
Compensation of Directors
Directors of the Company do not receive fees for service as directors but
are reimbursed for out-of-pocket expenses.
4
<PAGE>
During the past fiscal year, Mr. Nagy, Mr. Fitzgerald and Mr. Donohue were
granted options to purchase Common Stock of the Company. Such options were
granted with an exercise price equal to the market price of the Common Stock on
the date of grant and become exercisable in five equal installments on each
anniversary after the date of grant.
No family relationships exist between any of the directors and officers of
the Company.
Executive Compensation
The following table sets forth information for the fiscal years ended
December 31, 1998 and December 31, 1997 concerning the compensation of the
Company's Chief Executive Officer and the four other most highly compensated
executive officers of the Company whose total annual salary and bonus exceeded
$100,000 during the fiscal year ended December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Award
------------------------------------ ------------------
All Other
Name and Other Annual Stock Compensation
Prinicpal Position Year Salary($) Bonus($) Compensation Options (1)
------------------ ---- --------- -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John W. Fitzgerald...... 1998 $300,000 $150,000 -- 75,000 $1,494
President and Chief 1997 191,125 93,750 -- 100,000 -0-
Executive Officer
Michael Dinkins......... 1998 200,000 80,000 -- 75,000 39,367
Senior Vice President of 1997 62,563 25,000 -- 85,000 -0-
Finance and
Administration, Chief
Financial Officer and
Secretary
John Jordan............. 1998 235,000 82,500 -- -0- 11,910
President, TelAc 1997 221,451 62,970 -- 5,000 -0-
Teleservices Group
Lee H. Edelstein........ 1998 150,000 -0- -- -0- 18,063
President, TMS 1997 150,000 -0- -- 5,000 -0-
Professional Markets
Group
Douglas Rebak........... 1998 225,000 -0- -- -0- 20,018
President, Phoenix 1997 36,645 -0- -- 24,000 2,274
Marketing Group
</TABLE>
- --------
(1) Includes contributions made by the Company on behalf of the named executive
officers to the Company's 401(k) Plan and a term life/disability insurance
plan and other benefits such as reimbursement for moving costs, car
allowances, etc.
In 1998 the Company granted 150,000 options to the executive officers named
in the Summary Compensation Table.
5
<PAGE>
The following table sets forth the grants of stock options to the executive
officers named in the Summary Compensation Table during the fiscal year ended
December 31, 1998. The amounts shown for each of the named executive officers
as potential realizable values are based on arbitrarily assumed annualized
rates of stock price appreciation of five percent and ten percent over the
exercise price of the options during the full terms of the options. No gain to
the optionees is possible without an increase in stock price which will benefit
all stockholders proportionately. These potential realizable values are based
solely on arbitrarily assumed rates of appreciation required by applicable
Securities and Exchange Commission regulations. Actual gains, if any, on option
exercises and holdings of Common Stock are dependent on the future performance
of the Common Stock and overall stock market conditions. There can be no
assurance that the potential realizable values shown in this table will be
achieved.
Option Grants in the Fiscal Year Ended
December 31, 1998
<TABLE>
<CAPTION>
Potential
Realizable
Value at Assumed
Annual
Rates of Stock
Price
Appreciation for
Individual Grants Option Term
-------------------------------------------------- -----------------
% of Total
No. of Options Granted to Exercise
Options Employees Price Expiration
Name Granted in Fiscal Year ($Per Share) Date 5% 10%
---- ------- ------------------ ------------ ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
John Fitzgerald......... 75,000 20.9% $6.50 10/22/08 $307,125 $775,125
Michael Dinkins......... 75,000 20.9% $6.50 10/22/08 $307,125 $775,125
</TABLE>
The following table sets forth the number and value, net of exercise price,
of shares of Common Stock acquired upon exercise of options on the date of
exercise by the executive officers named in the Summary Compensation Table
during the past fiscal year, and the number and value of options held by such
executive officers at December 31, 1998.
Aggregate Option Exercises in the Fiscal Year
Ended December 31, 1998 and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised In-
Securities Underlying the Money Options
Options at December 31, 1998 at December 31, 1998(1)
---------------------------- -------------------------
Shares
Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John Fitzgerald......... 0 0 60,000 115,000 $ 0 $140,625
Michael Dinkins......... 0 0 25,000 135,000 33,750 275,625
John Jordan............. 0 0 1,000 4,000 0 0
Lee Edelstein........... 0 0 1,000 4,000 0 0
Douglas Rebak........... 0 0 0 24,000 0 0
</TABLE>
- --------
(1) In-the-money options are those where the fair market value of the
underlying Common Stock exceeds the exercise price thereof. The value of
in-the-money options is determined in accordance with regulations of the
Securities and Exchange Commission by subtracting the aggregate exercise
price of the options from the aggregate year-end market value of the
underlying Common Stock.
6
<PAGE>
Employment Arrangements
The Company has entered into employment agreements with each of its
executive officers. These agreements provide that the Company will employ each
such executive officer on an "at will" basis and generally include certain non-
competition agreements, confidentiality commitments, non-solicitation of
employee provisions and assignment of work product agreements. Set forth below
is a description of the terms of the employment arrangements for the five
highest compensated executive officers of the Company based on their 1998
annual salary.
John W. Fitzgerald entered into a four-year employment agreement with the
Company effective in April 1997 which provides for Mr. Fitzgerald to serve as
the President and Chief Executive Officer of the Company and to receive an
annual base salary of $250,000, which base salary increased to $300,000 after
the Company's initial public offering of its Common Stock on February 13, 1998
(the "Offering"). In addition, Mr. Fitzgerald is eligible for merit increases
as determined at the discretion of the Board of Directors of the Company and is
eligible to receive an annual bonus of up to 50% of his annual base salary
based on the achievement on a weighted average basis of certain quantitative
and qualitative goals to be mutually agreed upon by Mr. Fitzgerald and the
Board of Directors of the Company. Mr. Fitzgerald received an option to
purchase 50,000 shares of Common Stock at the price to the public in the
Offering. Mr. Fitzgerald's employment agreement is automatically renewable for
successive one year terms at the end of the initial term and each extended
term, unless either party provides notice of termination at least six months
prior to the expiration of such term. If Mr. Fitzgerald is terminated without
"cause" during the term of his employment agreement, he is entitled to
severance pay equal to one year's base salary due under the agreement, 100% of
his bonus opportunity for the year of termination prorated through the date of
such termination, health and medical insurance coverage for one year following
the date of such termination, and, in certain cases, a car allowance for no
more than three months following the date of such termination.
Michael Dinkins entered into an employment agreement with the Company
effective in August 1997 which provides for Mr. Dinkins to serve as the Senior
Vice President of Finance and Administration and Chief Financial Officer of the
Company and to receive an annual base salary of $175,000, which base salary
increased to $200,000 after the Offering. In addition, Mr. Dinkins is eligible
for merit increases as determined in the discretion of the Board of Directors
of the Company and received an annual bonus in 1998 of $25,000 for calendar
year 1997 and is eligible to receive a bonus of up to 40% of his base salary
for each year thereafter, based on the achievement of certain objectives as
agreed upon with the Chief Executive Officer of the Company. Mr. Dinkins
received an option to purchase 50,000 shares of Common Stock at an exercise
price of $5.00 per share, which options vest evenly over five years, except
that 10,000 of the options vested upon consummation of the Offering. Mr.
Dinkins received an option to purchase an additional 10,000 shares of Common
Stock at the price to the public in the Offering. If Mr. Dinkins' employment is
terminated by the Company for "cause," he is entitled to receive all salary
accrued to the effective date of termination and not theretofore paid to him.
If Mr. Dinkins is terminated without "cause" during the term of his employment
agreement, he is entitled to severance pay equal to six months' base salary due
under the agreement, plus an additional two months' base salary for each year
of service with the Company up to a maximum of 12 months' total severance.
John Jordan entered into a five-year employment agreement with the Company
effective in December 1996 which provides for Mr. Jordan to receive an annual
base salary of $220,000, subject to merit increases as determined at the
discretion of the President of the Company. In addition, Mr. Jordan is eligible
to receive an annual bonus of up to 35% of his base salary based on the
achievement of certain operational, financial and performance objectives and
certain corporate growth objectives established by the President of the
Company. If Mr. Jordan's employment is terminated by the Company for "cause"
or, in certain cases with notice from the Company, upon disability, he is
entitled to receive all salary (and bonus, if earned and determined in
accordance with the terms of the agreement) accrued to the effective date of
termination and not theretofore paid to him, and any expense reimbursement due
and not yet paid. If Mr. Jordan is terminated without "cause" during the term
of his employment agreement, he is entitled to severance pay equal to all
salary accrued to the
7
<PAGE>
effective date of such termination and not theretofore paid, a lump sum payment
in the amount of $300,000, the prorated portion of any bonus earned in
accordance with the terms of the agreement, and any expense reimbursement due
and not yet paid.
Lee H. Edelstein entered into a five-year employment agreement with the
Company effective in January 1997 which provides for Mr. Edelstein to receive
an annual base salary of $150,000, subject to merit increases at the discretion
of the President and the Board of Directors of the Company. In addition, Mr.
Edelstein is eligible to receive an annual bonus of up to 25% of his base
salary based on the achievement of certain performance objectives. If Mr.
Edelstein's employment is terminated by the Company for "cause" or, in certain
cases with notice from the Company, upon disability, he is entitled to receive
all salary (and bonus, if earned and determined in accordance with the terms of
the agreement) accrued to the effective date of termination and not theretofore
paid to him, and any expense reimbursement due and not yet paid. Mr.
Edelstein's employment with the Company may be terminated by the Company at any
time after January 15, 2000 without "cause". If Mr. Edelstein is terminated
without "cause" after January 15, 2000, he is entitled to severance pay equal
to the lesser of (i) his annual base salary paid through the scheduled
expiration of the term of the agreement or (ii) six months' annual base salary,
plus any expense reimbursement due and not yet paid.
Douglas Rebak entered into a five-year employment agreement with the Company
in October 1997 which provides for Mr. Rebak to receive an annual base salary
of $225,000, subject to merit increases as determined at the discretion of the
Chief Executive Officer of the Company. In addition, Mr. Rebak is eligible to
receive an annual bonus of up to 20% of his base salary based on the
achievement by the Company of certain financial goals. Mr. Rebak also received
stock options to purchase 24,000 shares of the Company's Common Stock at $11.00
per share, one-half of which vest on December 31, 2000 and one-half on December
31, 2001. If Mr. Rebak's employment is terminated by the Company for "cause"
or, in certain cases with notice from the Company, upon disability, he is
entitled to receive all salary accrued to the effective date of termination and
not theretofore paid to him. Mr. Rebak's employment with the Company may be
terminated by the Company at any time after November 1, 2000 without "cause".
If Mr. Rebak is terminated without "cause" after November 1, 2000, he is
entitled to severance pay equal to the lesser of (i) his annual base salary
paid through the scheduled expiration of the term of the agreement or (ii) six
months' annual base salary. In certain cases, prior to November 1, 2000, the
agreement may be terminated by Mr. Rebak upon 30 days' prior written notice to
the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee reviews and makes recommendations regarding the
compensation for executive officers and other key employees of the Company,
including salaries and bonuses. No member of the Compensation Committee is an
executive of the Company. The current members of the Compensation Committee of
the Board of Directors of the Company for fiscal 1998 are Peter D. Bewley, John
H. Foster, Liam S. Donohue and Shawkat Raslan.
As discussed in "Certain Transactions," the Company has engaged in a variety
of transactions with limited partnerships of which John H. Foster and Stephen
F. Nagy are general partners of the general partner and Foster Management
Company, an investment adviser, of which Mr. Foster is the Chairman of the
Board and sole stockholder, Mr. Nagy is Managing Partner and Mr. Donohue was a
Principal during 1998. For a more detailed description of such relationships
and transactions, see "Certain Transactions."
8
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the cumulative total shareholder
return on the Company's Common Stock to the Nasdaq Stock Market (U.S.) Index
and to its peer group of five publicly traded companies engaged in contract
research and outsourcing for the pharmaceutical industry (the "Peer Group
Index") for the period commencing February 13, 1998 (the first date that the
Company's Common Stock traded on the Nasdaq National Market) and ending
December 31, 1998. The graph assumes that $100 was invested in each of the
Company's Common Stock, the Nasdaq Stock Market (U.S.) Index and the companies
listed in the Peer Group Index (on a weighted market value basis) and that any
dividends were reinvested. The members of the Peer Group Index are Applied
Analytical Industries, Inc., Boron, LePore & Associates, Inc., Healthworld
Corporation, Parexel International Corporation and Snyder Communications, Inc.
COMPARISON OF 10 MONTH CUMULATIVE TOTAL RETURN*
AMONG ACCESS WORLDWIDE COMMUNICATIONS, INC.,
THE NASDAQ STOCK MARKET (U.S.) INDEX AND A PEER GROUP
[GRAPHIC]
* $100 INVESTED ON 2/13/98 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
<TABLE>
<CAPTION>
2/13/98 12/31/98
------- --------
<S> <C> <C>
NASDAQ National Market (US) Index.............................. $100 $129
Peer Group Index............................................... $100 $ 85
Access Worldwide Communications, Inc........................... $100 $ 70
</TABLE>
9
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The report of the Compensation Committee documents the Committee's policies
regarding executive officer compensation. The Company's philosophy and
objectives in setting compensation are (i) to offer levels of compensation
which are competitive with those offered by other companies in similar
businesses; (ii) to compensate executives based on each executive's level of
responsibility and contribution to the Company's business goals; (iii) to link
compensation with the Company's financial performance; and (iv) to align the
interests of the Company's executives with the interests of the Company's
stockholders.
Base Salary. Base salary is determined by level of responsibility,
individual performance and Company performance, as well as by the need to
provide a competitive package that allows the Company to retain key executives.
After reviewing individual and Company performance and market studies on
salaries at other companies of similar size, the Chief Executive Officer makes
recommendations to the Compensation Committee concerning officers' salaries,
other than his own. The Compensation Committee reviews and, with any changes it
deems appropriate, approves these recommendations. Using the same review
process, the Compensation Committee makes decisions pertaining to the Chief
Executive Officer's salary. On the basis of the foregoing factors, during the
1998 fiscal year, the Compensation Committee established an annual salary of
$300,000 for John Fitzgerald, the President and Chief Executive Officer of the
Company.
Executive Bonuses. Executive bonuses provide the opportunity for executive
officers to earn additional compensation by achieving specific performance
goals. The Company will pay a percentage of each participant's annual base
salary as an annual bonus, provided the Company achieves specific performance
objectives. These objectives are established by the Board of Directors of the
Company in consultation with such executive officers. Pursuant to his
employment agreement with the Company, Mr. Fitzgerald was eligible to receive a
bonus, payable in cash, of up to 50% of his base salary. Mr. Fitzgerald's bonus
was based on a weighted average of certain quantitative (60%) and qualitative
(40%) goals. The quantitative goal was the achievement by the Company of a
level of earnings per share which met analysts' expectations for fiscal year
1998. The qualitative goal was the achievement of certain managerial
objectives. Both the quantitative and qualitative goals were met and Mr.
Fitzgerald was awarded his full bonus of $150,000 for 1998 which was payable in
March 1999.
Stock Options. The Company periodically grants stock options to its
executive officers and other key employees. The primary purpose of stock option
grants is to align the interests of the Company's executive officers more
closely with the interests of the Company's stockholders by offering the
executives an opportunity to benefit from increases in the market price of the
Company's Common Stock. Stock options provide long-term incentives that have
enabled the Company to attract and retain key employees by encouraging their
ownership of Common Stock. The stock option plans are administered by the Stock
Option Subcommittee of the Compensation Committee, which determines the persons
who are to receive options and the number of shares to be subject to each
option. In selecting individuals for options and determining the terms thereof,
the Stock Option Subcommittee may take into consideration any factors it deems
relevant, including present and potential contributions to the success of the
Company.
Deductibility of Executive Compensation. Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), limits the deductibility of
compensation exceeding $1 million to each of the Company's Chief Executive
Officer and four other most highly compensated executive officers. Qualifying
performance-based compensation meeting the requirements promulgated by the
Internal Revenue Service under Section 162(m) will not be subject to the
deduction limit. The Company intends to qualify its executive compensation
arrangements to comply with such requirements.
COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS
Peter D. Bewley
Liam S. Donohue
John H. Foster
Shawkat Raslan
10
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and persons who own more than
ten percent of the Company's Common Stock, to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of Common Stock. Officers, directors and greater than ten percent
stockholders are required by Securities and Exchange Commission regulations to
furnish the Company with copies of all Section 16(a) reports they file.
To the Company's knowledge, based solely on a review of copies of such
reports furnished and confirmations that no other reports were required during
the fiscal year ended December 31, 1998, except as provided below, its
directors, executive officers and greater than ten percent stockholders
complied with all Section 16(a) filing requirements. Michael Connolly did not
timely file a statement on Form 3 regarding his appointment as an executive
officer in May 1998. Mr. Connolly subsequently filed a Form 3 in August 1998.
Stephen F. Nagy failed to timely file a statement on Form 4 regarding one
transaction in the month of May 1998. Mr. Nagy subsequently filed a Form 4 in
the month of July 1998. John W. Fitzgerald failed to timely file a statement on
Form 4 regarding two transactions in the month of September 1998. Mr.
Fitzgerald subsequently filed a Form 4 in October 1998. Douglas Rebak failed to
timely file statements on Form 4 regarding one transaction in June 1998 and one
transaction in August 1998. Mr. Rebak subsequently filed a Form 4 in August
1998 and in October 1998, respectively. John Jordan was not timely in reporting
twelve transactions in the month of November 1998 on a Form 4. Mr. Jordan
subsequently filed a Form 4 in December 1998.
CERTAIN TRANSACTIONS
Upon the consummation of the Offering, the Company repaid approximately
$32.6 million (the "Partnership Debt") of principal and interest due under
various promissory notes issued by the Company and/or its subsidiaries to
Abbingdon Venture Partners Limited Partnership-II ("Abbingdon-II") and
Abbingdon Venture Partners Limited Partnership-III ("Abbingdon-III" and
together with Abbingdon II, the "Partnerships"), investment partnerships
operated by Foster Management Company (an investment advisor of which Stephen
F. Nagy is Managing Partner, Liam S. Donohue was a Principal during 1998, and
John H. Foster is the Chairman and sole stockholder). The Partnership Debt had
been incurred (x) in connection with the Company's recapitalization in December
1996 (the "Recapitalization"), (y) for working capital purposes, and (z) in
connection with the capitalization of TLM Holdings Corp. in January 1997, a
company which merged with a subsidiary of the Company in October 1997 to become
a wholly owned subsidiary of the Company.
After the consummation of the Offering, John Jordan required the Company to
prepay a 6% convertible promissory note in the principal amount of $926,100
which Mr. Jordan received from the Company at the time of the Recapitalization.
The Company applied approximately $320,000 of the net proceeds from the
Offering to pay all accrued but unpaid dividends on the shares of preferred
stock outstanding prior to the Offering held by the Partnerships. The
Partnerships agreed with the Company that simultaneously with the consummation
of the Offering, the Partnerships would (x) exchange 36,000 shares of preferred
stock held by them and (y) convert $2.9 million of the principal amount of
promissory notes due December 1, 2006 for an aggregate of 65,000 shares of
redeemable Preferred Stock, Series 1998, in a recapitalization. After the
Offering, all of the Company's loan agreements with the Partnerships were
terminated.
The Company paid Foster Management Company a fee of $750,000 for its
assistance in effecting the Offering.
Lee H. Edelstein was a stockholder of TMS, substantially all of the assets
of which a subsidiary of the Company acquired in January 1997. In consideration
for such assets, such subsidiary paid to TMS $6.5 million in cash, issued
three-year 6% subordinated promissory note of such subsidiary in the principal
amount of
11
<PAGE>
$1,300,000 and agreed to pay to Mr. Edelstein certain additional contingent
payments of cash and Common Stock of such subsidiary payable over a three-year
period dependent upon the achievement of certain financial and operational
goals. In 1998, as part of the contingent payments due in connection with the
acquisition of TMS, the Company issued 70,851 shares of Common Stock and made
cash payments of $695,302.
Douglas Rebak was a stockholder of Phoenix Marketing Group ("Phoenix"),
substantially all the assets of which were acquired by a subsidiary of the
Company effective October 1997. In consideration for such assets, such
subsidiary paid to Phoenix $10,000,000 in cash, a 6% subordinated redeemable
promissory note of the Company and such subsidiary (the "Redeemable Note") in
the principal amount of $2,500,000 due the earlier of (i) ten days after the
Offering or (ii) December 31, 1998, the Convertible Note, and agreed to pay to
Phoenix certain additional contingent payments of the Company's Common Stock
payable over a three-year period dependent upon the achievement of certain
financial and operational goals. The principal amount of the Convertible Note
was convertible into 208,334 shares of Common Stock at the rate of $12.00 per
share of Common Stock. The Redeemable Note was repaid from the net proceeds of
the Offering.
In connection with the acquisition of the assets of Phoenix, the Company
entered into a lease agreement with Phoenix Realty Partners, a New Jersey
partnership ("Phoenix Realty"), of which Mr. Rebak is a partner, for two
locations in Lincoln Park, New Jersey. The lease is for a term of ten years. In
years one through five, the Company will pay Phoenix Realty fixed rent in the
aggregate amount of $618,560 per year, payable in equal monthly installments.
In years six through ten, the Company will pay Phoenix Realty fixed rent in the
aggregate amount of $733,600 per year, payable in equal monthly installments.
In December 1996, the Company sold to John Jordan, the President of the
TelAc Teleservices Group of the Company, 75,000 shares of Common Stock at $.057
per share and in April 1997, the Company sold to John Fitzgerald, the President
and Chief Executive Officer and a director of the Company, 230,000 shares of
Common Stock at $.057 per share. The shares of Common Stock issued to Mr.
Fitzgerald vest over a four-year period and the shares of Common Stock issued
to Mr. Jordan vest over a five-year period, each contingent upon continued
service with the Company. Messrs. Jordan and Fitzgerald purchased such shares
pursuant to stock purchase agreements with the Company (the "Stock Purchase
Agreements"). The Stock Purchase Agreements provide for restrictions on the
sale of such shares and further provide that the Company has the option to
repurchase such shares at $.057 per share upon the occurrence of certain
conditions contained therein. The Company and each of Messrs. Jordan and
Fitzgerald agreed, that, in the event of a proposed sale of control of the
Company, each of such individuals will be permitted, or may be required, to
sell a number of those shares of Common Stock covered by his respective Stock
Purchase Agreement as shall be proportionate to the number of shares of Common
Stock that the controlling stockholders shall sell of the shares owned by them,
for the same consideration per share and on the same terms and conditions
received by such controlling stockholders in such sale of control.
On January 14, 1997, the Company executed a demand promissory note payable
to PNC Bank under a credit facility (the "Prior Credit Facility") in the
principal amount of the lesser of the amount borrowed or $6,000,000, with an
interest rate, at the Company's option, equal to (a) the greater of (i) PNC
Bank's prime rate, or (ii) the federal funds rate plus 0.5% or (b) the
Eurodollar rate plus 2%, together with accrued interest. The Partnerships
unconditionally guaranteed the payment of the Company's obligations to PNC Bank
under such note. The Company applied a portion of the net proceeds from the
Offering to retire such debt to PNC Bank. Upon such repayment, the guarantees
by the Partnerships terminated.
In December 1996, the Company purchased Jordan Computer Specialists
Incorporated ("JCSI") from Jared Jordan, the brother of John Jordan. In
consideration for his shares of JCSI stock, the Company paid to Jared Jordan
$60,000 in cash and a three-year 6% subordinated convertible promissory note of
the Company in the principal amount of $180,000. Mr. Jordan has the right to
convert the principal amount of the note into shares of the Company's Common
Stock at the rate of $13.00 per share if certain financial and operational
goals are achieved by JCSI.
12
<PAGE>
In September 1997, the Company acquired all of the outstanding capital stock
of Hispanic Market Connections, Inc. In consideration for such stock, the
Company paid to Isabel Valdes, President of the Cultural Access Group of the
Company, $1.5 million in cash and issued a three year, 6.5% subordinated
promissory note in the principal amount of $240,000. In addition, the Company
agreed to pay Ms. Valdes certain additional contingent payments of cash and
Common Stock over a period of three years dependent upon the achievement of
certain financial and operational goals.
On October 24, 1998, the Company acquired all of the outstanding capital
stock of A M Medica Communications Ltd. ("A M Medica"). In consideration for
such stock, the Company paid to Ann Holmes, President of the A M Medica
Communications Group of the Company, $22.0 million in cash, 122,045 shares of
Common Stock, and a three year 6.5% subordinated promissory note in the
principal amount of $5.5 million. In addition, the Company agreed to pay Ms.
Holmes certain additional payments of cash and Common Stock over a five-year
period dependent upon the achievement of certain financial and operational
goals.
The purchase price with respect to each of the acquisitions described above
was determined by arms-length negotiations based upon the sale price of
comparable companies. The Company believes that the terms of the other
transactions with affiliated persons described above are no less favorable to
the Company than the Company could have obtained from non-affiliated parties.
On February 23, 1999, the Company agreed to redeem 25,000 of the 65,000
outstanding shares of the redeemable Preferred Stock, Series 1998 held by the
Partnerships for a redemption price of $2.5 million. The Company redeemed the
25,000 shares of Preferred Stock, Series 1998 on March 12, 1999, the date the
Company entered into a new three-year, $65 million revolving line of credit and
term loan (the "New Credit Facility") with a syndicate of banks (the "Lenders")
led by NationsBank, N.A., which replaced the Prior Credit Facility. As a
condition to the Company obtaining the New Credit Facility from the Lenders,
the Partnerships agreed with the Company that they would waive certain of their
rights under the Certificate of Designation in connection with the redemption
of their remaining 40,000 shares of Preferred Stock, Series 1998 and agreed
that any further redemptions would only be permitted in the future if certain
financial loan covenants are satisfied by the Company.
13
<PAGE>
PRINCIPAL AND MANAGEMENT STOCKHOLDERS
The stockholders (including any "group," as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934 (the "Exchange Act")) who, to
the knowledge of the Board of Directors of the Company beneficially owned more
than five percent of the Common Stock as of April 27, 1999 (other than Lee H.
Edelstein, John W. Fitzgerald, John H. Foster and Stephen F. Nagy who are
listed in the table under Election of Directors), each executive officer named
in the Summary Compensation Table of the Company and all directors and officers
as a group, and their respective shareholdings as of such date (according to
information furnished by them to the Company), are set forth in the following
table. Except as indicated in the footnotes to the table, all of such shares
are owned with sole voting and investment power.
<TABLE>
<CAPTION>
Shares of Common Stock
Name and Address Beneficially Owned Percent of Class
- ---------------- ---------------------- ----------------
<S> <C> <C>
Abbingdon Venture Partners
Limited Partnership-II ............... 1,575,000 16.5%
1018 West Ninth Avenue
King of Prussia, PA 19406
Abbingdon Venture Partners
Limited Partnership-III .............. 1,925,000 20.2%
1018 West Ninth Avenue
King of Prussia, PA 19406
Michael Dinkins........................ 26,500(1) *
Senior Vice President of Finance and
Administration,
Chief Financial Officer and Secretary
John Jordan............................ 199,210(2) 2.1%
President of TelAc Teleservices Group
Douglas Rebak.......................... 254,016(3) 2.7%
President of Phoenix Marketing Group
All directors and executive
officers as a group................... 4,956,441(4) 51.4%
(fifteen persons)
</TABLE>
- --------
* Less than one percent.
(1) Includes 25,000 shares of Common Stock presently issuable upon exercise of
options.
(2) Includes 1,000 shares of Common Stock presently issuable upon exercise of
options and includes 750 shares of Common Stock owned by Mr. Jordan's wife
and 1,500 shares of Common Stock held by a trust for the benefit of Mr.
Jordan's children, of which Mr. Jordan's wife is trustee.
(3) Includes 54,303 shares of Common Stock owned by trusts for the benefit of
Mr. Rebak's children.
(4) Includes 111,567 shares of Common Stock presently issuable upon exercise of
options including executive officers not specifically identified in the
table.
14
<PAGE>
PROPOSAL II: APPROVAL OF AMENDMENT TO THE ACCESS WORLDWIDE 1997 STOCK OPTION
PLAN
On February 23, 1999, the Board of Directors voted to increase the number of
shares of Common Stock to be issued under the Stock Option Plan by 500,000.
There will be presented to stockholders at the Meeting a proposal to amend the
Stock Option Plan to increase from 800,000 to 1,300,000 the number of shares of
the Company's Common Stock available for options under the Stock Option Plan.
The amendment would be effected by deleting the first sentence of Section 3 of
the Stock Option Plan and substituting in place thereof the following sentence:
"There shall be available for options under the Plan a total of
1,300,000 shares of Stock, subject to any adjustments which may be made
pursuant to Section 5(f) hereof."
Effective May 1, 1997, the Board of Directors and the stockholders of the
Company initially adopted the Stock Option Plan to attract and retain key
personnel. The following discussion of the material features of the Stock
Option Plan is qualified by reference to the text of the Stock Option Plan as
proposed to be amended and as filed as Exhibit A to this Proxy Statement. Under
the amended Stock Option Plan, options to purchase up to an aggregate of
1,300,000 shares of Common Stock may be granted to key employees of the Company
or its subsidiaries, and to officers and directors of the Company.
The Compensation Committee of the Board of Directors, through the Stock
Option Subcommittee, administers the Stock Option Plan and determines the
persons who are to receive options and the number of shares of Common Stock to
be subject to each option. In selecting individuals for options and determining
the terms thereof, the Compensation Committee may consider any factors it deems
relevant including present and potential contributions to the success of the
Company. Options granted under the Stock Option Plan must be exercised within a
period fixed by the Compensation Committee, which may not exceed ten years from
the date of the option or, in the case of incentive stock options granted to
any holder on the date of grant of more than ten percent of the total combined
voting power of all classes of stock of the Company, five years from the date
of grant of the option. Options may be made exercisable in whole or in
installments, as determined by the Compensation Committee.
Options may not be transferred other than by will or the laws of descent and
distribution and during the lifetime of an optionee may be exercised only by
the optionee or, if approved by the Compensation Committee, to immediate family
members or charitable organizations. The per share exercise price may not be
less than the per share market value of the Common Stock on the date of grant
of the option. In the case of incentive stock options granted to any holders on
the date of grant of more than ten percent of the total combined voting power
of all classes of stock of the Company and its subsidiaries, the exercise price
may not be less than 110% of the market value per share of the Common Stock on
the date of grant. Unless designated as "incentive stock options" intended to
qualify under Section 422 of the Code, options which are granted under the
Stock Option Plan are intended to be "nonstatutory stock options." The exercise
price may be paid in cash, shares of Common Stock owned by the optionee, or in
a combination of cash and shares.
The Stock Option Plan provides that the maximum number of shares of Common
Stock which may be subject to options granted to any person during any fiscal
year of the Company is 150,000 shares.
The Stock Option Plan provides that, in the event of changes in the
corporate structure of the Company or certain events affecting the Common
Stock, the Compensation Committee may, in its discretion, make adjustments with
respect to the number of shares which may be issued under the Stock Option Plan
or which are covered by outstanding options, in the exercise price per share,
or both. The Compensation Committee may in its discretion provide that, in
connection with any merger or consolidation in which the Company is not the
surviving corporation or any sale or transfer by the Company of all or
substantially all its assets or any tender offer or exchange offer for or the
acquisition, directly or indirectly, by any person or group of all or a
majority of the then outstanding voting securities of the Company, outstanding
options under the Stock Option Plan will become exercisable in full or in part,
notwithstanding any other provision of the Stock Option Plan or of any
outstanding options granted thereunder, on and after (i) 15 days prior to the
effective date of such merger,
15
<PAGE>
consolidation, sale, transfer or acquisition or (ii) the date of commencement
of such tender offer or exchange offer, as the case may be.
In 1998, the Company granted options to purchase a total of 769,550 shares
of Common Stock including options to purchase 265,000 shares of Common Stock
granted to executive officers and directors of the Company.
As of March 31, 1999, options to purchase an aggregate of 793,450 shares of
Common Stock were outstanding under the Stock Option Plan. As of such date,
6,550 shares remained available for option grants under the Stock Option Plan.
The Board believes that, without the proposed increase, the Stock Option
Plan has an insufficient number of shares available for option grants. The
Board believes that the future success of the Company depends upon attracting
and retaining the most qualified management and employees, and the amendment
increasing the number of shares available for option grants to management and
employees will assist the Company in attracting and retaining persons of
superior ability and inspiring their efforts on behalf of the Company. The
Board believes that the amendment is in the best interests of the Company.
The Board believes that the proposed increase in the number of shares
available for option grants will be advantageous to the Company and its
stockholders. The foregoing amendment has been adopted by the Board, subject to
stockholder approval. The amendment will not become effective unless approved
by the holders of a majority of the shares of Common Stock present and voting
thereon at the Meeting (at which a quorum is present). THE BOARD RECOMMENDS
THAT THE STOCKHOLDERS VOTE FOR THE ADOPTION OF THE AMENDMENT TO THE STOCK
OPTION PLAN. It is the intention of the persons named in the accompanying form
of proxy to vote the shares represented thereby in favor of adoption of the
amendment to the Stock Option Plan unless otherwise instructed therein.
III. RATIFICATION OF SELECTION INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has selected PricewaterhouseCoopers
LLP to serve as independent accountants for the Company for the fiscal year
ending December 31, 1999. Such firm has examined the financial statements of
the Company since the Company's inception. The Board of Directors considers
PricewaterhouseCoopers LLP to be eminently qualified.
Although it is not required to do so, the Board of Directors is submitting
its selection of the Company's accountants for ratification at the Meeting in
order to ascertain the views of stockholders regarding such selection. If the
selection is not ratified, the Board of Directors will reconsider its
selection.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS VOTE FOR
RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP TO EXAMINE THE
CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AND ITS SUBSIDIARIES FOR THE
FISCAL YEAR ENDING DECEMBER 31, 1999. It is the intention of the persons named
in the accompanying form of Proxy to vote the shares represented thereby in
favor of such ratification unless otherwise instructed in such Proxy.
A representative of PricewaterhouseCoopers LLP will be present at the
Meeting with the opportunity to make a statement if such representative desires
to do so, and will be available to respond to appropriate questions.
16
<PAGE>
IV. OTHER MATTERS
The Board of Directors of the Company does not know of any other matters
which may be brought before the Meeting. However, if any such other matters are
properly presented for action, it is the intention of the persons named in the
accompanying form of Proxy to vote the shares represented thereby in accordance
with their judgment on such matters.
MISCELLANEOUS
All costs relating to the solicitation of Proxies will be borne by the
Company. Proxies may be solicited by officers, directors and employees of the
Company and its subsidiaries personally, or by mail, telephone or telecopier,
and the Company may pay brokers and other persons holding shares of stock in
their names or those of their nominees for their reasonable expenses in sending
soliciting material to their principals.
It is important that Proxies be returned promptly. Stockholders who do not
expect to attend the Meeting in person are urged to mark, sign and date the
accompanying form of Proxy and mail it in the enclosed return envelope, which
requires no postage if mailed in the United States, so that their votes can be
recorded.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 2000 Annual Meeting of
Stockholders of the Company must be received by the Company by December 31,
1999 in order to be considered for inclusion in the Company's Proxy Statement
relating to such meeting. In the event that a stockholder fails to notify the
Company by March 15, 2000 of an intent to be present at the Company's 2000
Annual Meeting of Stockholders in order to present a proposal for a vote, the
Company will have the right to exercise its discretion and to vote against the
proposal, if presented, without including any information about the proposal in
its proxy materials.
ANNUAL REPORT ON FORM 10-K
A copy of the Company's Annual Report on Form 10-K, including the financial
statements for the fiscal year ended December 31, 1998, which has been filed
with the Securities and Exchange Commission, is included in the Annual Report
accompanying this Proxy Statement.
April 30, 1999
17
<PAGE>
Exhibit A
ACCESS WORLDWIDE COMMUNICATIONS, INC.
1997 STOCK OPTION PLAN
1. Purposes of Plan. The purposes of this Plan, which shall be known as the
Access Worldwide Communications, Inc. 1997 Stock Option Plan and is hereinafter
referred to as the "Plan", are (i) to provide incentives for key employees,
directors, consultants and other individuals providing services to Access
Worldwide Communications, Inc. (the "Company") and its subsidiary or parent
corporations (within the respective meanings of Sections 424(f) and 424(e) of
the Internal Revenue Code of 1986, as amended (the "Code"), and referred to
herein as "Subsidiary" and "Parent", respectively, and such Parent and each
Subsidiary are referred to herein individually as an "Affiliate" and
collectively as "Affiliates") by encouraging their ownership of the common
stock, $.01 par value, of the Company (the "Stock") and (ii) to aid the Company
in retaining such key employees, directors, consultants and other individuals
upon whose efforts the Company's success and future growth depends and in
attracting other such employees, directors, consultants and individuals.
2. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors or a subcommittee of the Compensation
Committee appointed by the Compensation Committee, as hereinafter provided (the
committee or subcommittee administering the Plan is hereinafter referred to as
the "Committee"). For purposes of administration, the Committee, subject to the
terms of the Plan, shall have plenary authority to establish such rules and
regulations, to make such determinations and interpretations, and to take such
other administrative actions as it deems necessary or advisable. All
determinations and interpretations made by the Committee shall be final,
conclusive and binding on all persons, including Optionees (as hereinafter
defined) and their legal representatives and beneficiaries.
The Committee shall consist of not fewer than two members of the Board of
Directors. Unless otherwise determined by the Board of Directors, all members
of the Board of Directors who serve on the Committee shall be "Non- Employee
Directors" (as defined in Rule 16b-3 under the Securities Exchange Act of 1934,
as amended) and "outside directors" as defined in Treasury Regulation (S)
1.162-27(e)(3). The Compensation Committee shall designate one of the members
of the Committee as its Chairman. The Committee shall hold its meetings at such
times and places as it may determine. A majority of its members shall
constitute a quorum. All determinations of the Committee shall be made by a
majority of its members. Any decision or determination reduced to writing and
signed by all members shall be as effective as if it had been made by a
majority vote at a meeting duly called and held. The Committee may appoint a
secretary (who need not be a member of the Committee). No member of the
Committee shall be liable for any act or omission with respect to his service
on the Committee if he acts in good faith and in a manner he reasonably
believes to be in or not opposed to the best interests of the Company.
3. Stock Available for Options. There shall be available for options under
the Plan a total of 1,300,000 shares of Stock, subject to any adjustments which
may be made pursuant to Section 5(f) hereof. Shares of Stock used for purposes
of the Plan may be either authorized and unissued shares, or previously issued
shares held in the treasury of the Company, or both. Shares of Stock covered by
options which have terminated or expired prior to exercise shall be available
for further options hereunder. The maximum number of options which may be
granted to any person under the Plan during any fiscal year of the Company
shall not exceed 150,000 shares.
4. Eligibility. Options under the Plan may be granted to key employees of
the Company or any Affiliate, including officers or directors of the Company or
any Affiliate, and to consultants and other individuals providing services to
the Company or any Affiliate (each such grantee, an "Optionee"). Options may be
granted to eligible individuals whether or not they hold or have held options
previously granted under the Plan or otherwise granted or assumed by the
Company. In selecting individuals for options, the Committee may take into
consideration any factors it may deem relevant, including its estimate of the
individual's present
<PAGE>
and potential contributions to the success of the Company and its Affiliates.
Service as an employee, director, officer or consultant of or to the Company or
any Affiliate shall be considered employment for purposes of the Plan (and the
period of such service shall be considered the period of employment for
purposes of Section 5(d) of this Plan); provided, however, that incentive stock
options may be granted under the Plan only to an individual who is an
"employee" (as such term is used in Section 422 of the Code) of the Company or
any Affiliate.
5. Terms and Conditions of Options. The Committee shall, in its discretion,
prescribe the terms and conditions of the options to be granted hereunder,
which terms and conditions need not be the same in each case, subject to the
following:
(a) Option Price. The price at which each share of Stock covered by an
option granted under the Plan may be purchased shall not be less than the
Market Value (as defined in Section 5(c) hereof) per share of Stock on the
date of grant of the option. The date of the grant of an option shall be
the date specified by the Committee in its grant of the option.
(b) Option Period. The period for exercise of an option shall in no
event be more than ten years from the date of grant, or in the case of any
option intended to be an incentive stock option granted to an individual
owning, on the date of grant, stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or any Parent
or Subsidiary, more than five years from the date of grant. Options may, in
the discretion of the Committee, be made exercisable in installments during
the option period. Any shares not purchased on any applicable installment
date may be purchased thereafter at any time before the expiration of the
option period.
(c) Exercise of Options. In order to exercise an option, the Optionee
shall deliver to the Company written notice specifying the number of shares
of Stock to be purchased, together with cash or a certified or bank
cashier's check payable to the order of the Company in the full amount of
the purchase price therefor; provided that, for the purpose of assisting an
Optionee to exercise an option, the Company may make loans to the Optionee
or guarantee loans made by third parties to the Optionee, on such terms and
conditions as the Board of Directors may authorize; and provided further
that such purchase price may be paid in shares of Stock owned by the
Optionee having an aggregate Market Value on the date of exercise equal to
the aggregate purchase price, or in a combination of cash and Stock. For
purposes of the Plan, the Market Value per share of Stock shall be the last
sale price regular way on the date of reference, or, in case no sale takes
place on such date, the average of the closing high bid and low asked
prices regular way, in either case on the principal national securities
exchange on which the Stock is listed or admitted to trading, or if the
Stock is not listed or admitted to trading on any national securities
exchange, the last sale price reported on the National Market System of the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") on such date, or the last sale price reported on the NASDAQ
SmallCap Market on such date, or the average of the closing high bid and
low asked prices in the over-the-counter market on such date, whichever is
applicable, or if there are no such prices reported on NASDAQ or in the
over- the-counter market on such date, as furnished to the Committee by any
New York Stock Exchange member selected from time to time by the Committee
for such purpose. If there is no bid or asked price reported on any such
date, the Market Value shall be determined by the Committee in accordance
with the regulations promulgated under Section 2031 of the Code, or by any
other appropriate method selected by the Committee. If the Optionee so
requests, shares of Stock purchased upon exercise of an option may be
issued in the name of the Optionee or another person. An Optionee shall
have none of the rights of a stockholder until the shares of Stock are
issued to him.
(d) Effect of Termination of Employment. An option may not be exercised
after the Optionee has ceased to be in the employ of the Company or any
Affiliate, except in the following circumstances:
(i)If the Optionee's employment is terminated by action of the
Company or an Affiliate, or by reason of disability or retirement under
any retirement plan maintained by the Company or any
2
<PAGE>
Affiliate, the option may be exercised by the Optionee within three
months after such termination, but only as to any shares exercisable on
the date the Optionee's employment so terminates;
(ii)In the event of the death of the Optionee during the three month
period after termination of employment covered by (i) above, the person
or persons to whom his rights are transferred by will or the laws of
descent and distribution shall have a period of one year from the date
of his death to exercise any options which were exercisable by the
Optionee at the time of his death; and
(iii) In the event of the death of the Optionee while employed, the
option shall thereupon become exercisable in full, and the person or
persons to whom the Optionee's rights are transferred by will or the
laws of descent and distribution shall have a period of one year from
the date of the Optionee's death to exercise such option. The
provisions of the foregoing sentence shall apply to any outstanding
options which are incentive stock options to the extent permitted by
Section 422(d) of the Code and such outstanding options in excess
thereof shall, immediately upon the occurrence of the event described
in the preceding sentence, be treated for all purposes of the Plan as
nonstatutory stock options and shall be immediately exercisable as such
as provided in the foregoing sentence.
In no event shall any option be exercisable more than ten years from the
date of grant thereof. Nothing in the Plan or in any option granted
pursuant to the Plan (in the absence of an express provision to the
contrary) shall confer on any individual any right to continue in the
employ of the Company or any Affiliate or interfere in any way with the
right of the Company or any Affiliate to terminate his employment at any
time.
(e) Limitation on Transferability of Options. Except as provided in this
Section 5(e), during the lifetime of an Optionee, options held by such
Optionee shall be exercisable only by him and no option shall be
transferable other than by will or the laws of descent and distribution.
The Committee may, in its discretion, provide that during the lifetime of
an Optionee, options held by such Optionee may be transferred to or for the
benefit of a member of his immediate family or to a charitable organization
exempt from income tax under Section 501(c)(3) of the Code. For purposes
hereof, the term "immediate family" of an Optionee shall mean such
Optionee's spouse and children (both natural and adoptive), and the direct
lineal descendants of his children.
(f) Adjustments for Change in Stock Subject to Plan. In the event of a
reorganization, recapitalization, stock split, stock dividend, combination
of shares, merger, consolidation, rights offering, or any other change in
the corporate structure or shares of the Company, the Committee shall make
such adjustments, if any, as it deems appropriate in the number and kind of
shares subject to the Plan, in the number and kind of shares covered by
outstanding options, or in the option price per share, or both, and, in the
case of a merger, consolidation or other transaction pursuant to which the
Company is not the surviving corporation or pursuant to which the holders
of outstanding Stock shall receive in exchange therefor shares of capital
stock of the surviving corporation or another corporation, the Committee
may require an Optionee to exchange options granted under the Plan for
options issued by the surviving corporation or such other corporation.
(g) Acceleration of Exercisability of Options Upon Occurrence of Certain
Events. The Committee may, in its discretion, provide in the case of any
option granted under the Plan that, in connection with any merger or
consolidation which results in the holders of the outstanding voting
securities of the Company (determined immediately prior to such merger or
consolidation) owning less than a majority of the outstanding voting
securities of the surviving corporation (determined immediately following
such merger or consolidation), or any sale or transfer by the Company of
all or substantially all its assets or any tender offer or exchange offer
for or the acquisition, directly or indirectly, by any person or group of
all or a majority of the then outstanding voting securities of the Company,
such option shall become exercisable in full or part, notwithstanding any
other provision of the Plan or of any outstanding options granted
thereunder, on and after (i) the fifteenth day prior to the effective date
of such merger, consolidation, sale,
3
<PAGE>
transfer or acquisition or (ii) the date of commencement of such tender
offer or exchange offer, as the case may be. The provisions of the
foregoing sentence shall apply to any outstanding options which are
incentive stock options to the extent permitted by Section 422(d) of the
Code and such outstanding options in excess thereof shall, immediately upon
the occurrence of the event described in clause (i) or (ii) of the
foregoing sentence, be treated for all purposes of the plan as nonstatutory
stock options and shall be immediately exercisable as such as provided in
the foregoing sentence. Notwithstanding the foregoing, in no event shall
any option be exercisable after the date of termination of the exercise
period of such option specified in Sections 5(b) and 5(d).
(h) Registration, Listing and Qualification of Shares of Stock. Each
option shall be subject to the requirement that if at any time the Board of
Directors shall determine that the registration, listing or qualification
of the shares of Stock covered thereby upon any securities exchange or
under any federal or state law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of,
or in connection with, the granting of such option or the purchase of
shares of Stock thereunder, no such option may be exercised unless and
until such registration, listing, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Board of Directors. The Company may require that any person exercising an
option shall make such representations and agreements and furnish such
information as it deems appropriate to assure compliance with the foregoing
or any other applicable legal requirement.
(i) Other Terms and Conditions. The Committee may impose such other
terms and conditions, not inconsistent with the terms hereof, on the grant
or exercise of options, as it deems advisable.
6. Additional Provisions Applicable to Incentive Stock Options. The
Committee may, in its discretion, grant options under the Plan to eligible
employees which constitute "incentive stock options" within the meaning of
Section 422 of the Code; provided, however, that (a) the aggregate Market Value
of the Stock with respect to which incentive stock options are exercisable for
the first time by the Optionee during any calendar year shall not exceed the
limitation set forth in Section 422(d) of the Code; (b) if the Optionee owns on
the date of grant securities possessing more than 10% of the total combined
voting power of all classes of securities of the Company or of any Affiliate,
the price per share shall not be less than 110% of the Market Value per share
on the date of grant and (c) Section 5(d)(ii) hereof shall not apply to any
incentive stock option.
7. Amendment and Termination. Unless the Plan shall theretofore have been
terminated as hereinafter provided, the Plan shall terminate on, and no option
shall be granted hereunder after May 1, 2007; provided, however, that the Board
of Directors may at any time prior to that date terminate the Plan. The Board
of Directors may at any time amend the Plan or any outstanding options. No
termination or amendment of the Plan may, without the consent of an Optionee,
adversely affect the rights of such Optionee under any option held by such
Optionee.
8. Stockholder Approval of Plan. The establishment of the Plan shall be
subject to approval by a majority of the votes cast thereon by the stockholders
of the Company at a meeting of stockholders duly called and held for such
purpose or by a method and in a degree that would be treated as adequate under
the applicable law of the Company's state of incorporation, and no option
granted hereunder shall be exercisable prior to such approval.
9. Withholding. It shall be a condition to the obligation of the Company to
issue shares of Stock upon exercise of an option, that the Optionee (or any
beneficiary, transferee or person entitled to act under Sections 5(d) or 5(e)
hereof) pay to the Company, upon its demand, such amount as may be requested by
the Company for the purpose of satisfying any liability to withhold federal,
state or local income or other taxes. If the amount requested is not paid, the
Company may refuse to issue such shares of Stock.
4
<PAGE>
10. Issuance of Certificates; Legends. The Company may endorse such legend
or legends upon the certificates for shares of Stock issued upon the exercise
of an option granted hereunder and may issue such "stop transfer" instructions
to its transfer agent in respect of such shares as, in its absolute discretion,
it determines to be necessary or appropriate.
12. Other Actions. Nothing contained in this Plan shall be construed to
limit the authority of the Company to exercise its corporate rights and powers,
including but not by way of limitation, the right of the Company to grant or
assume options for proper corporate purposes other than under the Plan with
respect to any employee or other person, firm, corporation or association.
Amended February 23, 1999
5
<PAGE>
ACCESS WORLDWIDE COMMUNICATIONS, INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS -- MAY 25, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, a stockholder of ACCESS WORLDWIDE COMMUNICATIONS, INC.,
does hereby appoint John Fitzgerald and Michael Dinkins, or either of them, with
full power of substitution, the undersigned's proxies, to appear and vote at the
Annual Meeting of Stockholders to be held May 25, 1999 at 9:00 a.m., local time,
or at any adjournments thereof, upon such matters as may properly come before
the Meeting.
(Continued and to be Completed on Reverse Side.)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
ACCESS WORLDWIDE COMMUNICATIONS, INC.
May 25, 1999
{X} PLEASE MARK WITHHOLD
YOUR VOTES AUTHORITY
AS THIS to vote for
EXAMPLE. FOR nominees listed
1. Election of Directors. { } Nominees: Peter D. Bewley
Liam S. Donohue
Lee H. Edelstein
John W. Fitzgerald
John H. Foster
Stephen F. Nagy
Shawkat Raslan
2. Approve the Amendment to the Company's 1997 Stock Option Plan.
FOR AGAINST ABSTAIN
{ } { } { }
3. Ratification of appointment of PricewaterhouseCoopers LLP as independent
accountants for the fiscal year ending December 31, 1999
FOR AGAINST ABSTAIN
{ } { } { }
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S NAME IN
THE SPACE PROVIDED BELOW)
The Board of Directors favors a vote "FOR" each item.
4. In their discretion on such other matters which may properly come before
the meeting.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS INDICATED. IF NO
DIRECTION IS INDICATED, SUCH SHARES WILL BE VOTED IN FAVOR OF THE ITEM(S) FOR
WHICH NO DIRECTION IS INDICATED.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Stockholder(s) Sign Here (L.S.) Dated
----------------- --------------- ----------
NOTE: Please sign exactly as your name appears on this proxy. If your stock is
jointly owned, both parties must sign. Fiduciaries and representatives
should so indicate when signing, and when more than one is named, a
majority should sign.
