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
URSUS TELECOM CORPORATION
(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 transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
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July 27, 2000
Dear Shareholder:
It is my pleasure to invite you to the 2000 Annual Meeting of
Shareholders of Ursus Telecom Corporation will be held on Monday, August 28,
2000, at 10:00 a.m., Eastern Time at the Hilton Miami Airport Hotel located at
5101 Blue Lagoon Drive, Miami, Florida 33126. At the meeting, we will report
on important activities and accomplishments of the Company and review the
Company's financial performance and business operations. You will have an
opportunity to ask questions and gain an up-to-date perspective on your
Company and its activities. You will also have an opportunity to meet your
directors and other executives of the Company.
The meeting will also be devoted to the election of six directors, approval
of an amendment to the 1998 Stock Option Plan, approval of Ernst & Young LLP
as the independent accountants for fiscal year 2001, and consideration of
other business matters properly brought before the meeting.
Whether or not you plan to attend, and regardless of the number of shares
you own, it is important that your shares be represented at the Annual
Meeting. I therefore urge you to complete, sign, date and return your proxy
promptly in the enclosed envelope. Your return of a proxy in advance will not
affect your right to vote in person at the Annual Meeting. I hope that you
will attend the Annual Meeting. The officers and directors of the Company look
forward to seeing you at that time.
Sincerely,
Luca M. Giussani
Chief Executive Officer
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URSUS TELECOM CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MONDAY, AUGUST 28, 2000
To our stockholders: The Annual Meeting of Stockholders (the "Annual
Meeting") of Ursus Telecom Corporation, a Florida Corporation, will be held
Monday, August 28, 2000, at 10:00 a.m., Eastern Daylight Time at the Hilton
Miami Airport Hotel located at 5101 Blue Lagoon Drive, Miami, Florida 33126,
for the following purposes:
1. To elect 6 directors, of which, 2 directors will be Class I directors
to serve until the next Annual Meeting of Shareholders and until
their successors are duly elected and qualified, 2 directors will be
Class II directors to serve until the annual Meeting to be held in
2002 and until their successors are duly elected and qualified and 2
directors will be Class III directors to serve until the Annual
Meeting to be held in 2003 and until their successors are duly
elected and qualified.
2. To approve an amendment to the 1998 Stock Plan to reserve an
additional 2,000,000 shares of common stock thereunder for issuance;
4. To approve the appointment of Ernst & Young LLP as the independent
auditors of Ursus for fiscal year 2001; and
5. To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for Directors,
are more fully described in the Proxy Statement, which is attached and made a
part of this Notice.
The Board of Directors has fixed the close of business on June 30, 2000
as the record date for determining the stockholders entitled to notice of and
to vote at the Annual Meeting and any adjournment or postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. Please carefully read the attached Proxy Statement for additional
information regarding the matters to be considered and acted upon at the
Meeting. However, whether or not you expect to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card
as promptly as possible in the postage-prepaid envelope provided to ensure
your representation and the presence of a quorum at the Annual Meeting. If you
send in your proxy card and then decide to attend the Annual Meeting to vote
your shares in person, you may still do so. Your proxy is revocable in
accordance with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors,
/s/ Luca M. Giussani
LUCA M. GIUSSANI
Chief Executive Officer
Sunrise, Florida
July 27, 2000
IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND RETURN THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. IF A QUORUM IS NOT REACHED, THE COMPANY WILL HAVE THE ADDED EXPENSE
OF RE-ISSUING THESE PROXY MATERIALS. IF YOU ATTEND THE MEETING AND SO DESIRE,
YOU MAY WITHDRAW YOUR PROXY AND VOTE IN PERSON.
THANK YOU FOR ACTING PROMPTLY.
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URSUS TELECOM CORPORATION
440 SAWGRASS CORPORATE PARKWAY
SUNRISE, FLORIDA 33325
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of Ursus Telecom Corporation, a Florida
corporation (the "Company"), of proxies in the enclosed form for use in voting
at the Annual Meeting of Stockholders (the "Annual Meeting") to be held
Monday, August 28, 2000, at 10:00 a.m., Eastern Time at the Hilton Miami
Airport Hotel located at 5101 Blue Lagoon Drive, Miami, Florida 33126, and any
adjournment or postponement thereof.
This Proxy Statement, the enclosed proxy card and the Company's Annual
Report to Stockholders for the year ended March 31, 2000, including financial
statements, were first mailed to stockholders entitled to vote at the meeting
on or about July 14, 2000.
SHARES OUTSTANDING, VOTING RIGHTS AND REVOCABILITY OF PROXIES
At the close of business on June 30, 2000, the "Record Date" for
determination the shareholders entitled to notice of and to vote at the Annual
Meeting, the Company had approximately 7,989,815 shares of Common Stock
("Common Stock") outstanding, with a par value of $0.01 per share.
As of the Record Date, the Company also had 1000 shares of Series A
Preferred Stock ("Series A Preferred Stock") outstanding, with a par value of
$.01 per share.
The Board of Directors of the Company consists of six directors, two of
whom are Class I directors, two of whom are Class II directors and two of whom
are Class III directors. The Series A Preferred Stock is granted the right to
elect all of the Class III Directors of the Company and such number of
Directors in Class II as may be required for the Series A Preferred Stock to
elect one Director less than a majority of the Board of Directors. The Common
Stock shareholders are entitled to elect the remaining directors of the Board.
Because the Company presently has a six member Board of Directors, divided
equally into three classes, the Series A Preferred Stock is entitled to elect
all of the Class III Directors and one of the Class II Directors and the
Common Stock shareholders are entitled to elect one of the Class II Directors
and all of the Class I Directors.
Each outstanding share of Common Stock on the Record Date is entitled to
one vote on all matters, except the election of directors. Shareholders have
cumulative voting rights with respect to the election of three directors.
Cumulative voting rights entitle a shareholder to give one nominee as many
votes as is equal to the number of directors to be elected multiplied by the
number of shares owned by the shareholder, or to distribute his or her votes
on the same principle among two or more nominees as the shareholder sees fit.
Of those directors to be elected by the Common Stock shareholders, the
two nominees for Class I director receiving the highest number of votes at the
meeting will be elected and the one nominee for Class II director receiving
the highest number of votes at the meeting will be elected. All other matters
submitted to the stockholders will require the affirmative vote of a majority
of shares present in person or represented by proxy at a duly held meeting at
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which a quorum is present, as required under Florida law and our bylaws for
approval of proposals presented to stockholders. Our bylaws also provide that
a quorum consists of a majority of the shares entitled to vote and present in
person or represented by proxy. Abstentions will be treated as shares that are
present and entitled to vote for purposes of determining the presence of a
quorum and as negative votes for purposes of determining the approval of any
matter submitted to the stockholders for a vote.
A shareholder who signs and returns a proxy may revoke that proxy at any
time before the Annual Meeting or by ballot at the meeting.
Any proxy which is returned using the form of proxy enclosed and which
is not marked as to a particular item will be voted FOR the election of each
director, FOR the approval of the amendment to the 1998 Stock Plan, and FOR
the appointment of Ernst & Young LLP as the Company's independent auditors for
fiscal year 2001, and as the proxy holders deem advisable on other matters
that may come before the meeting. If a broker indicates on the enclosed proxy
or its substitute that it does not have discretionary authority as to certain
shares to vote on a particular matter ("broker non-votes"), those shares will
not be considered as present with respect to that matter. The Company believes
that the tabulation procedures to be followed are consistent with the general
requirements of Florida law concerning voting of shares and determination of a
quorum.
SOLICITATION
The solicitation of proxies will be conducted by mail and the Company
will bear all attendant costs. These costs will include the expense of
preparing and mailing proxy solicitation materials for the Annual Meeting and
reimbursements paid to brokerage firms and others for their expenses incurred
in forwarding solicitation materials regarding the Annual Meeting to
beneficial owners of the Company's Common Stock. The Company may conduct
further solicitation personally, telephonically or by facsimile through its
officers, directors and employees, none of whom will receive additional
compensation for assisting with the solicitation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
In April 1998 the Company amended its Articles of Incorporation to
provide for a classified Board of Directors with staggered three year terms
(the "Amendment"). Pursuant to the Amendment, the Board of Directors was
divided into three classes, Class I, Class II and Class III, to be elected for
staggered terms of three years each and until their successors are elected and
qualified. The initial term of all of such classes were to have expired on or
before the year 2000 annual shareholders meeting. However, since the date of
the Amendment, the Company has not had a meeting to elect any such classes.
Accordingly, all of the positions on the Board will be elected at this
annual meeting. Pursuant to the Articles of Incorporation, one Class II
director and the Class III directors shall be elected at the Annual Meeting by
the Series A Preferred Stock. The sole Series A Preferred Stock shareholder
has informed the management that he intends to elect Mr. Chaskin as a Class II
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director to serve out the remaining term of the Class II director which
expires at the 2002 Annual Meeting of Shareholders and until his successor is
duly elected and qualified. The sole Series A Preferred Stock shareholder has
informed the management that he intends to elect Messrs. Giussani and Seefried
as Class III directors at the Annual Meeting. The Class III directors shall
serve until the 2003 Annual Meeting of Shareholders and until their successors
are duly elected and qualified.
The Common Stock shareholders shall elect the Class I directors and one
Class II director. The two nominees for election as Class I directors who
receive the greatest number of votes cast for election of Class I directors at
the meeting, a quorum being present, shall be elected Class I directors of the
Company and shall serve out the remaining term of the Class I directors which
expires at the next Annual Meeting of Shareholders and until their successors
are duly elected and qualified. The nominee for election as a Class II
director who receives the greatest number of votes cast for election of the
Class II director at the meeting, a quorum being present, shall be elected a
Class II director of the Company and shall serve out the remaining term of the
Class II director which expires at the 2002 Annual Meeting of Shareholders and
until his successor is duly elected. The proxies named in the accompanying
proxy intend to vote for the election of Messrs. Garrett and Cannistraro as
Class I directors and Mr. Newport as a Class II director. In the event they
should become unavailable for election, which is not anticipated, the proxies
will be voted for such substitute nominees as may be nominated by the Board of
Directors. Abstentions, broker non-votes and instructions on the accompanying
proxy card to withhold authority to vote for one or more of the nominees will
result in the respective nominee receiving fewer votes.
The names of the nominees and other directors, their ages as of June 30,
2000 and certain other information about them are set forth below:
Name Age Position
---- --- ---------
Luca M. Giussani 46 Chief Executive Officer and Director
Jeffrey R. Chaskin 47 President, Chief Operating Officer and Director
Johannes S. Seefried 41 Chief Financial Officer and Director
William M. Newport 64 Director, Chairman of the Board of Directors
Kenneth L. Garrett 57 Director
Vincent Cannistraro 60 Director
Luca M. Giussani, a cofounder of Ursus, has served as Chief Executive
Officer and Director since our inception and as President from our inception
until October 1998. Mr. Giussani currently works full time for us in the
United States. Prior to cofounding Ursus with Mr. Chaskin, Mr. Giussani
served as an advisor to a number of developing countries for the restructuring
of their foreign debt, as well as a consultant to several public sector
Italian contractors specializing in the construction of power plants. Prior
to 1993, Mr. Giussani was an officer of Orient & China S.P.A., a trading
company specializing in transactions with China, and in the following concerns
that provided consulting services to Italian contractors: Intraco P.E.F.,
Balzar Trading Ltd. and Ursus Finance Ltd.
Jeffrey R. Chaskin is a cofounder of Ursus and has been our Chief
Operating Officer and a Director since our inception. Mr. Chaskin was named
President in October 1998. Mr. Chaskin has had a key role in the development
of various telecommunications companies, and has consulted to the industry
since 1981 including consulting regarding call center and switched network
operations for CIL, Federal Express, CBN, ASCI and others.
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Johannes S. Seefried has been Chief Financial Officer and a Director of
Ursus since February 1997 and was our Chief Accounting Officer from February
1998 through April 1999. Prior to 1994, Mr. Seefried held executive positions
in corporate finance and securities sales with commercial and investment
banking organizations, both in the United States and Europe. From 1990 to
1993, Mr. Seefried was employed by Banco Santander, a commercial and
investment-banking group. Mr. Seefried's primary responsibilities at the
Santander Group included serving as a Vice President of corporate business
development, including mergers and acquisitions. From 1994 to 1996, Mr.
Seefried served as Managing Partner of Seefried Forstverwaltung, a privately-
owned forestry and property management company. Mr. Seefried is a graduate of
the Stanford Graduate School of Business, 1994, and the School of Foreign
Service at Georgetown University, 1983.
William M. Newport became a Director and Chairman of the Board of
Directors of Ursus in February 1998. Mr. Newport was Chief Executive Officer
of AT&T's cellular business from 1981 to 1983. In 1983, Mr. Newport joined the
Bell Atlantic Corporation when it was formed as a result of the AT&T
divestiture and retired in December 1992 from the Bell Atlantic Group as a
Vice President for Strategic Planning, after a 36-year career in the
telecommunications industry. Mr. Newport served as a director of Integrated
Micro Products, a manufacturer of fault tolerant computers for
telecommunications equipment vendors, from 1994 to 1996, and currently serves
as a director of the Corporation for National Research Initiatives, a
nonprofit information technology research and development company, Authentix
Networks, Inc., a privately held wireless voice portal company and Condor
Technology Solutions, a publicly traded company that provides information
technology services to large and medium sized businesses. Mr. Newport holds
degrees in Electrical Engineering from Purdue University and in Management
from the Sloan School of Management at M.I.T.
Kenneth L. Garrett became a director of Ursus in April 1998. From 1994
to present, Mr. Garrett is President of KLG Associates, Inc., a
telecommunications consulting firm specializing in the design and operations
of networks, and is a member of the executive committee of Tri State
Investment Group, a group providing venture capital based in North Carolina.
From 1989 to 1994, Mr. Garrett was a Senior Vice President in charge of AT&T's
Network Services Division, and from 1964 to 1989, he worked in a number of
capacities in operations, sales and marketing within the AT&T organization.
Also, from 1971 to 1973, Mr. Garrett worked as district plant manager at
Pacific Bell Telephone Company in San Francisco. Mr. Garrett holds degrees in
Chemical Engineering from Iowa State University and in Management from the
Sloan School of Management at M.I.T.
Vincent Cannistraro became a director of Ursus in October of 1999.
Currently, Mr. Cannistraro serves as President of Walsingham International, a
company specializing in international due diligence and background
investigations. He also provides consulting services for several corporate
clients, including Novartis and Deutche Bank, and is an on-air consultant to
ABC World News with Peter Jennings regarding international and security
affairs. From October 1988 through September 1990, Mr. Cannistraro served as
Chief of Operations and Analysis at a operations center of the CIA. While at
the Department of Defense (January 1987 - October 1988), he was Special
Assistant for Intelligence in the office of the Secretary of Defense. Prior to
that, Mr. Cannistraro served as Director for Intelligence Programs at the
National Security Council, following his professional career as a CIA officer
on service in a variety of foreign posts in the Middle East, Africa and
Europe.
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BOARD OF DIRECTORS MEETINGS AND COMMITTEES
During the period from March 31, 1999 through March 31, 2000 (the "last
fiscal year"), the Board met 11 times, including telephonic conferences. No
Director attended fewer than 75% of the aggregate number of meetings of the
Board and meetings of the committees of the Board on which he or she serves.
The Board has an Audit Committee and a Compensation Committee.
The Audit Committee consists of Directors Kenneth Garrett (Chair), William
Newport and Vincent Cannistraro.
The Audit Committee held seven meeting during the last fiscal year. The
primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible
for auditing those financial statements. The Committee in carrying out its
responsibilities believes its policies and procedures should remain flexible,
in order to best react to changing conditions and circumstances. The Committee
should take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices, and ethical
behavior.
The Compensation Committee consists of Directors William Newport
(Chair), Luca Giussani, Kenneth Garrett and Vincent Cannistraro. The
Compensation Committee, which held six meetings during the last fiscal year,
establishes and administers the Company's policies regarding annual executive
salaries, cash incentives and long-term equity incentives. The Compensation
Committee also administers the Company's 1998 Stock Option Plan.
COMPENSATION OF DIRECTORS
Directors who are also officers or employees of the Company do not
receive additional compensation for serving as directors. Each director who is
not an officer or employee of the Company receives $2,000 for attendance at
meetings of the Board of Directors, $1,000 for attendance at any Committee
meeting of the Board, $500 for each telephonic meeting of the Board, and $250
for each telephonic meeting of any Committee of the Board. In addition, under
the Company's 1998 Stock Plan, each non-employee director will be granted,
subject to certain exceptions, an annual option to acquire 5,000 shares at the
first meeting of the Board of Directors immediately following the close of the
fiscal year. In addition, each person who becomes a non-employee director is
granted an option to acquire between 10,000 and 15,000 shares upon such
person's initial election as a director. Each such option will have an
exercise price equal to the fair market value per share of Common Stock on the
date of grant. Directors are also reimbursed for out-of-pocket expenses
incurred in attending meetings of the Board of Directors or committees
thereof, and visiting the Company's offices and other specified locations in
their capacity as directors.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE EACH OF THE NOMINEES.
PROPOSAL NO. 2
AMENDMENT TO THE 1998 STOCK PLAN RESERVING AN ADDITIONAL 2,000,000
SHARES OF URSUS'S COMMON STOCK FOR ISSUANCE THEREUNDER
The Board of Directors has approved a recommendation of the Compensation
Committee, and recommends to the stockholders, that the number of options
available for future issuance under the 1998 Stock Plan (the "1998 Stock
Plan") be increased to 3,000,000 from 1,000,000, or by 2,000,000 shares,
subject to a restriction that outstanding stock option grants may not exceed
in the aggregate twenty percent (20%) of the fully diluted shares outstanding.
Subsequent to the proposed increase, the options issued, outstanding and
available for future grant will represent a 24.5% dilution of the outstanding
common shares on a fully diluted basis. As of June 30, 2000, the Company had
775,300 options issued and outstanding and 10,000 options available for future
grant. Subsequent to approval, the amended 1998 Stock Plan is estimated to
meet the needs of the Company for up to 3 years.
The Board of Directors considers the availability of options to be a
critical component of the Company's compensation package that enhances its
ability to attract and retain executives and key employees. In support of the
Company's current aggressive growth strategy and the need to remain
competitive in order to attract and retain future talent, the Board of
Directors supports the need for the increase in the 1998 Stock Plan by
2,000,000 shares.
DESCRIPTION OF THE 1998 STOCK OPTION PLAN
The following is a brief description of the material features of the Plan.
Such description is qualified in its entirety by reference to the full text of
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the Plan, which is attached as Exhibit 10.10 to the Company's registration
statement on Form S-1 (File No. 333-46197) and can be accessed through the
SEC's website (www.sec.gov). The Plan also can be obtained upon written or
oral request to: Ursus Telecom Corporation, 440 Sawgrass Corporate Parkway,
Suite 112, Sunrise, Florida 33325, Attention: Corporate Secretary (Telephone:
(954) 846-7887).
PLAN PURPOSES AND ADMINISTRATION
PURPOSES. The purpose of the plan is to attract, motivate, and retain
our employees, employees of our subsidiaries and our consultants who provide
significant services to us and our subsidiaries; and to further our growth and
financial success by aligning the interests of the plan's participants,
through the ownership of our stock, with the interests of our other
stockholders. The plan is administered by a Committee of the Board of
Directors that, subject to the express provisions of the Plan, selects
eligible persons to receive grants of stock options and determines all of the
terms and conditions of each option. The Committee also establishes rules and
regulations for administering the Plan and decides questions of interpretation
or application of any such rules or any provision of the Plan.
ELIGIBILITY. All directors, officers, other employees of ours and our
subsidiaries and consultants who provide significant services to us or to our
subsidiaries may be granted awards under the Plan.
AWARDS. Under the Plan, the Committee may grant non-qualified stock
options, "incentive stock options" (within the meaning of Section 422 of the
Internal Revenue Code), stock appreciation rights ("SARs") and restricted
stock. All awards are evidenced by a written award agreement containing such
provisions as the Committee approves.
The Committee determines the specific conditions to the exercisability of
an option to purchase shares of common stock. In general, an employee may
exercise an option by giving us written notice specifying the number of whole
shares of common stock to be purchased and providing payment for those shares.
The exercise price of an option will not be less than 100% of the fair market
value of the relevant shares of common stock on the date the option was
granted, and an optionee may pay the exercise price in cash or check, by
delivery of previously owned shares of common stock, or such other methods as
the Committee may allow. No certificate representing common stock will be
delivered until the full purchase price and any tax withholding have been
paid.
The Committee determines the specific vesting schedule for each option.
Whether options granted under the Plan are subject to a vesting schedule and,
if so, the rate at which they vest is determined by the Committee in its sole
discretion and such terms do not have to be identical for all options granted
pursuant to the Plan.
Notwithstanding any other provision of the plan, the board of directors
or the committee may at its discretion change the post-termination exercise
period with respect to any options or rights granted to any individual but in
no event may they extend the post-termination exercise period beyond the
expiration of the original term options or rights.
EFFECTIVE DATE AND TERMINATION. The original Plan became effective as of
February 12, 1998, the date our Board of Directors and our stockholders
originally approved the Plan. On March 9, 2000, our Board of Directors
approved an amendment and
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restatement of the Plan in order to make certain modifications to the Plan
(see below) and increase the number of shares of stock that would be available
under the Plan for issuance pursuant to stock options.
The Plan will terminate when the Board of Directors acts to terminate the
Plan. Termination of the Plan will not affect the terms or conditions of any
option granted prior to termination. However, without stockholder approval
the committee may not grant incentive stock options after February 12, 2008.
AMENDMENT OF THE PLAN. The Board of Directors may amend the Plan at any
time, subject to any requirement of stockholder approval required by
applicable law, rule or regulation, including any Nasdaq or stock exchange
rules. No amendment may impair a stockholder's right as a holder of an
outstanding stock option without such stockholder's consent.
AVAILABLE SHARES AND ANTI-DILUTION. The Plan originally authorized the
issuance of up to 1,000,000 shares of our common stock, reduced by the
aggregate number of shares that become subject to outstanding awards issued
under the Plan. Effective March 9, 2000, the Board of Directors approved,
subject to shareholder approval, an additional 2,000,000 shares of our common
stock to become available for grants of options under the Plan. However, the
Board restricted the total number of shares which may be granted under the
Plan to twenty percent (20%) or less of the fully diluted shares of the
Company which are outstanding at any given time. Thus, for example, if the
Company had 10,000,000 fully diluted shares outstanding, 2,000,000 shares
would be available for issuance under the Plan.
In the event of a stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, liquidation, combination or other
similar change or event, the number of shares of common stock available under
the Plan and the number of shares of common stock subject to each outstanding
award may be appropriately adjusted by the Committee in its discretion to
prevent the dilution or diminution of such award.
Under the federal securities laws, directors, officers and other persons
who are deemed to be our "affiliates" within the meaning of Rule 405 under the
Securities Act of 1933, as amended (the "Securities Act") may only resell
shares of our common stock, including shares acquired under the Plan, pursuant
to an effective registration statement under the Securities Act, Rule 144
under the Securities Act or another appropriate exemption from registration.
For this purpose, an "affiliate" of ours is any person who controls, is
controlled by or is under common control with the Company.
In addition, the restrictions imposed by Section 16 of the Exchange Act,
as amended (the "Exchange Act") upon our executive officers or directors apply
to options granted under the Plan. In general, any grant under the Plan to an
executive officer or director will be exempt from the short-swing liability
(but not the reporting) provisions of Section 16. Sales of our common stock by
our executive officers and directors, however, will be subject to both the
short-swing liability and reporting provisions of Section 16.
CHANGE IN CONTROL. In the event we undergo a change in control, all
outstanding options under the Plan that are not then exercisable or are
subject to restrictions will become immediately exercisable and all
restrictions will be removed.
TERMINATION OF EMPLOYMENT. In the event an optionee terminates
employment or service by reason of retirement on or after age 65 or pursuant
to any early retirement program instituted by us or due to disability, then
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each stock option will be fully exercisable, to the extent exercisable on the
date of termination, for a period of three months after such termination, but
no later than the expiration of the incentive stock option.
In the event an optionee terminates employment or service by reason of
the optionee's death, then each stock option will be exercisable to the extent
exercisable on the date of termination, for a period of six months after such
termination, but no later than the expiration of such incentive stock option.
In the event an optionee terminates employment or service for any other
reason, then each stock option will be exercisable to the extent exercisable
on the date of termination, for a period of ten (10) business days after such
termination, but no later than the expiration of such option.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR PROPOSAL NO. 2
PROPOSAL NO. 3
APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS
The Board has approved the appointment of Ernst & Young LLP ("Ernst &
Young") as our independent auditors for fiscal year 2001, subject to
shareholder approval. Ernst & Young has served as our independent auditors
since our inception. A representative of Ernst & Young is expected to be
present at the Annual Meeting. This representative will have an opportunity to
make a statement and will be available to respond to appropriate questions.
Audit services provided by Ernst & Young during fiscal year 2000
included an audit of the Company's consolidated financial statements and a
review of the Company's Annual Report as well as performing various non-audit
services to the Company.
RECOMMENDATION OF THE BOARD:
THE BOARD RECOMMENDS A VOTE FOR PROPOSAL NO. 3
<PAGE>
<PAGE>
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of June 30, 2000 by each
stockholder known by us to be the beneficial owner of more than 5% of our
common stock; each director and nominee; each named executive officer set
forth in the Summary Compensation Table; and all directors and executive
officers as a group. Beneficial ownership is determined under the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Unless indicated below, to our knowledge,
the persons and entities named in the table have sole voting and sole
investment power with respect to all shares beneficially owned, subject to
community property laws where applicable. Percentage ownership is based on
7,989,815 shares outstanding as of June 30, 2000. Shares of common stock
subject to options exercisable on or before August 29, 2000 (within 60 days of
June 30, 2000), are deemed to be outstanding and to be beneficially owned by
the person holding the options for the purpose of computing the percentage
ownership of such person but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person. Unless indicated
otherwise, the address for each director and executive officer listed below is
c/o Ursus Telecom Corporation, 440 Sawgrass Corporate Parkway, Sunrise,
Florida 33325.
Name of Beneficial Owner (18) Number of Shares Percent of Ownership
----------------------------- ---------------- --------------------
Luca M. Giussani (1)(2) 4,250,000(4) 52.2%
The Tail Wind Fund, Ltd (17) 647,141(15) 8.1%
Juan Jose Pino Jr. 627,498(9)(10)(16) 7.7%
Jeffrey R. Chaskin 574,300(4) 7.1%
Johannes S. Seefried 140,000(5)(10)(12) 1.7%
Richard McEwan 55,000(3) (7)
Steven L. Relis 12,500(13)(14) (7)
William Newport 25,000(6) (7)
Kenneth L. Garrett 20,000(8) (7)
Vincent Cannistraro 5,000(11) (7)
All Executive Officers and
Directors as a Group (9 Persons) 5,709,298(3)(4)(5)(6) 65.3%
(8)(9)(13)(15)
(16)
-----------------------
(1) Held by Fincogest S.A., a Swiss nominee entity, whose holdings of common
stock are beneficially owned by Mr. Giussani (100%). Mr. Giussani has
sole voting and investment power with respect to his shares of common
stock.
(2) Fincogest, S.A. also owns 100% of the outstanding shares of Series A
Preferred Stock of Ursus, all of which are beneficially owned by Mr.
Giussani, who holds sole voting and investment power with respect to the
Series A Preferred Stock.
(3) Includes 10-year options to purchase 55,000 shares of common stock.
(4) Includes 10-year options to purchase 150,000 shares of common stock.
(5) Includes 10-year options to purchase 140,000 shares of common stock.
(6) Includes 10-year options to purchase 25,000 shares of common stock.
(7) Less than 1%.
(8) Includes 10-year options to purchase 20,000 shares of common stock.
(9) Includes 22,498 shares held by the Juan Jose Pino, Jr. Revocable Trust of
which Juan Jose Pino Jr. is the sole beneficiary and 405,000 shares held
by Sitwell International Inc. of which Juan Jose Pino Jr. owns
substantially all of the outstanding shares.
(10) Excludes 10-year options to purchase 10,000 shares of common stock.
(11) Excludes 10-year options to purchase 15,000 shares of common stock.
(12) Excludes 10-year options to purchase 175,000 shares of common stock.
(13) Includes 10-year options to purchase 12,500 shares of common stock.
(14) Excludes 10-year options to purchase 12,000 shares of common stock.
(15) Includes 5-year warrants to purchase 248,798 shares of common stock
(16) Included 3-year warrants to purchase 200,000 shares of common stock
(17) The address of Tail Wind Funds Ltd. is Windemere House, 404 East Bay
Street, P.O. Box SS 5539, Nassau, Bahamas
(18) As used in this table, "beneficial ownership" means the sole or shared
power to vote, or to direct the voting of a security, or the sole or
shared investment power with respect to a security (i.e., the power to
dispose, or direct the disposition, of a security). Accordingly, they
may include shares owned by or for, among others, the spouse, minor
children or certain other relatives of such individual, as well as other
shares as to which the individual has the right to acquire within 60 days
after such date.
<PAGE>
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The Summary Compensation Table below provides certain summary
information concerning compensation paid or accrued during the fiscal years
ended March 31, 2000, 1999 and 1998 by Ursus to or on behalf of the Chief
Executive Officer and certain other executive officers of Ursus.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
Long-Term
Compensation
Securities Other
Name and Underlying Annual
Principal Position Year Salary Bonus Options Granted Compensation
<S> <C> <C> <C> <C> <C>
Luca M. Giussani 2000 $261,461 $ 45,000 - $ 32,158 (1)
Chief Executive Officer 1999 $230,769 $240,222 150,000 $ 33,876 (1)
1998 $187,615 $281,909 - $ 38,100 (1)
Jeffrey R. Chaskin(3) 2000 $261,183 $ 70,000 - $ 23,960 (1)
President and Chief 1999 $230,769 $240,222 150,000 $ 25,606 (1)
Operating Officer 1998 $187,615 $281,909 - $ 32,516 (1)
Johannes S. Seefried 2000 $200,000 $ - - $ 9,113 (2)
Chief Financial Officer 1999 $176,923 $ 75,000 150,000 $ 7,443 (2)
1998 $137,942 $ 75,000 - $ 1,490 (2)
Richard McEwan (4)(5) 2000 $130,000 - - -
Vice President 1999 $130,000 - 100,000 -
1998 $ 76,000 $ 40,000 - $ 20,962 (5)
Paul Biava (6) 2000 $150,673 $ 3,900 40,000 -
Vice President of 1999 $ 92,121 20,000 -
Operations 1998 - - 20,000 -
-------------------
</TABLE>
(1) Consists of the use of a company provided automobile and vacation pay.
(2) Consists of the use of a company provided automobile.
(3) Does not include compensation paid to Mr. Chaskin's wife, Joanne M.
Canter, an employee of Ursus. Ms. Canter's salary for 1998, 1999 and 2000
was $18,069, $21,885 and $24,231, respectively.
(4) Mr. McEwan joined Ursus on September 1, 1997.
(5) Consulting fees paid from April_1, 1997 to August_30, 1997.
(6) Mr. Biava joined Ursus on September 16, 1998 and resigned effective March
17, 2000.
<PAGE>
<PAGE>
EMPLOYMENT AGREEMENTS
Ursus has entered into employment agreements, effective on January_1,
1998, with each of Luca Giussani, Jeffrey Chaskin, Johannes S. Seefried and
Richard McEwan for terms ranging from two to five years.
The employment agreements with Mr. Giussani the Company's Chief
Executive and Mr. Chaskin the Company's President and Chief Operating Officer,
provide for each to receive:
(i) base annual salary of $225,000 in 1998, $250,000 in 1999,
$275,000 in 2000, $300,000 in 2001 and $325,000 in 2002;
(ii) minimum bonuses payable at the beginning of each calendar year,
commencing in January_1998, of $45,000; in addition, each executive
will receive additional bonuses, depending upon the Ursus operating
results, of $45,000 for each $1 million of earnings before
interest, taxes, depreciation, amortization and such bonuses
("EBITDAB") up and including to an "EBITDAB" of $4 million, as
generated by the Ursus during any fiscal year beginning on April 1,
1998 (such bonuses to be prorated for EBITDAB of a fraction of $1
million and paid monthly, subject to continuing adjustment for each
quarterly and fiscal year's EBITDAB);
(iii) bonuses commencing with the Ursus fiscal year beginning on April 1,
1998, determined as a percentage of the executive's base annual pay
depending upon Ursus EBITDAB, these bonuses begin to be payable at
20% of base annual pay for EBITDAB of at least $4 million, and
increase in increments of 5% of base annual pay for each $1 million
of additional EBITDAB above an EBITDAB of $4 million (such bonuses
to be prorated for EBITDAB of a fraction of $1 million and paid
quarterly subject to continuing adjustment for each fiscal year's
EBITDAB) provided that aggregate bonuses as described in (ii),
above and this section (iii)_shall not exceed 200% of the annual
base pay;
(iv) in the event of a termination without cause, or termination by the
executive for good reason, compensation for the balance of the
remaining term of the agreement, but for not less than one year; or
in the event of termination of the executive following a change in
control, a payment of three years' base includible compensation,
equal to the maximum tax deduction that the Company can receive
under applicable "golden parachute" regulations;
(v) confidentiality provisions and a noncompete agreement within the
State of Florida for one year after any termination of employment;
and
(vi) 10-year options to purchase 150,000 shares of Common Stock at the
Offering Price, 75,000 of which vest upon consummation of this
Offering and the balance in January 1999 or upon a change in
control of the Company. Mr. Giussani's options will be
nonqualified. Options to purchase $200,000 worth of Common Stock
issued to Mr. Chaskin will be tax-qualified and remainder will be
nonqualified.
The agreements provide that the bonuses already paid to Messrs. Giussani
and Chaskin through December_1997 comprise the entire bonus to which each is
entitled in respect of the 1998 fiscal year. Both Mr. Giussani and Mr. Chaskin
<PAGE>
<PAGE>
have waived any other claims for compensation from Ursus accruing prior to
January 1, 1998.
Ursus had an employment agreement, which was subsequently superceded as
described below, with Johannes Seefried, its Chief Financial Officer,
providing for terms similar to those in the employment agreements with Messrs.
Giussani and Chaskin described above, except that:
(i) the term of the agreement is for two years from January 1, 1998;
(ii) the base annual salary is $170,000 in 1998 and $200,000 in 1999;
(iii) a guaranteed bonus of $50,000 is payable at the commencement of the
agreement and a bonus of $75,000 is payable upon consummation of this
Offering, in addition to bonuses payable as a percentage of base
annual pay depending on the EBITDAB of $4 million or more realized by
Ursus in any fiscal year beginning on or after April_1, 1998 and
during the term of the agreement; all in accordance with the formula
set forth in paragraph (iii), above with respect to Messrs._Giussani
and Chaskin; and
(iv) 10-year options to purchase 100,000 shares of Common Stock at the
Offering Price, 50,000 of which vest upon consummation of the
Offering and the balance in January 1999 or upon a change in control
of Ursus. Options to purchase $200,000 worth of Common Stock will be
tax-qualified, the remaining options will be nonqualified.
On June 19, 2000, Ursus and Mr. Seefried entered into a new employment
agreement, which supercedes the January 1, 1998, agreement and ends on
December 31, 2000. The new agreement provides the following terms:
(i) the base annual salary is $200,000.
(ii) A grant on May 24, 2000 of 25,000 stock options on Ursus common
stock of which up to $100,000 in value are eligible for an incentive
stock option award, subject to shareholder approval of an increase
in the number of shares in the Ursus Stock Option Plan, at a strike
price of $10.25, vesting and exercisable on the grant date.
(iii) A grant of an additional financing performance bonus of 100,000
non-qualified stock options on Ursus common stock at a strike price
equal to the closing price on the date the executed employment
agreement was signed or $6.75 per share, subject to shareholder
approval of an increase in the number of shares in the Ursus Stock
Option Plan. The performance bonus is based solely upon Ursus
obtaining any additional public or private financing or investment
by May 31, 2001. Of such grant, 50,000 stock options shall be vested
and exercisable on the closing of any financing or investment of up
to $5,000,000. An additional 25,000 stock options for a total of
75,000 stock options shall be vested and exercisable on the closing
of any financing or investment of over $5,000,000 up to and
including $7,500,000. An additional 25,000 options for a total of
100,000 shall be vested and exercisable on the closing of any
financing or investment of over $7,500,000.
(iv) A grant of an additional performance bonus of 75,000 non-qualified
stock options on Ursus common stock at a strike price equal to the
closing price on the date the executed and signed employment
agreement was signed or $6.75 per share, subject to shareholder
<PAGE>
<PAGE>
approval of an increase in the number of shares in the Ursus 1998
Stock Option Plan. This specific bonus option shall be
vested and exercisable on the Company's closing by May 31, 2001 of
certain pre-determined goals related to the closing of commercial
agreements.
LONG TERM COMPENSATION
In connection with our initial public offering we established the 1998
Stock Incentive Plan, whereby 1,000,000 shares of Common Stock were authorized
for issuance. As of March 31, 2000, we have granted 986,000 10-year options
to purchase Common Stock. No stock options were granted during the last
fiscal year to our executive officers, except for 40,000 options that were
granted to Paul Biava and were subsequently forfeited upon his leaving Ursus
on March 17, 2000.
OPTION EXERCISES AND HOLDINGS
The following table sets forth, as to the Executive Officers, certain
information concerning the number of shares subject to both exercisable and
unexercisable stock options as of March 31, 2000. Merrs. Seefried, McEwan and
Biava, respectively, have exercised 35,000, 45,000 and 20,000 stock options,
respectively, to date. Also reported are values for "in-the-money" options
that represent the positive spread between the respective exercise prices of
the outstanding stock options and the fair market value of Ursus' Common Stock
as of March 31, 2000.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options
Shares Options at Fiscal Year End(1) At Fiscal Year End (1)
Acquire on Value ------------------------------- ------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
----- ---------- ------- ------------ ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Luca M. Giussani 150,000 $1,021,875
Jeffrey R. Chaskin 150,000 $1,021,875
Johannes S. Seefried 35,000 $499,138 115,000 $1,401,563
Richard McEwan 45,000 $496,137 55,000 $ 374,688
Paul Biava 20,000 $302,680
</TABLE>
(1) These values, unlike the amounts set forth in the column entitled "Value
Realized," have not been, and may never be, realized and are based on the
positive spread between the respective exercises prices of outstanding
options and the closing price of our common stock on March 31, 2000.
(2) "Value Realized" represents the fair market value of the shares of common
stock underlying the option on the date of the exercise less the
aggregate exercise price of the option.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
This report of the compensation committee is required by the Securities
and Exchange Commission. This report shall be deemed to be filed under the
Securities Act or the Exchange Act, or incorporated by reference by any
general statement incorporating this proxy statement by reference into any
<PAGE>
<PAGE>
filing made under the Securities Act or Exchange Act, except to the extent
that we specifically incorporate this report by reference.
The Compensation Committee of the Board of Directors consists of Mr. Luca
Giussani, Chief Executive Officer, and Messrs. Cannistraro, Garrett, and
Newport, all of whom are non-employee directors. No member of the Compensation
Committee serves as a member of the board of directors or compensation
committee of any other entity that has one or more executive officers serving
as a member of the Company's Board of Directors or Compensation Committee.
The Committee reviews and approves the salary, bonus and other benefits
payable to our Executive Officers and other key personnel. It also administers
the Company's employee stock option plan.
COMPENSATION PHILOSOPHY
The Company's compensation policy is designed to attract and retain
qualified key executives critical to the Company's growth and long-term
success. The Compensation Committee believes that compensation of the
Company's executive officers should promote the following objectives:
1. To attract, motivate, and retain a highly qualified executive
management team on a long-term basis.
2. To encourage the creation of stockholder value and achievement of
strategic corporate objectives by providing executives with long-term
incentives through equity ownership.
3. To integrate compensation practices with the Company's annual and
long-term corporate objectives and strategies focusing executive
behavior on the fulfillment of those objectives.
4. To maintain an above market competitive position when compared to the
practices of similar technology companies taking into account
relative company size, performance and geographic factors.
5. To provide fair and equitable compensation that is consistent with
internal compensation programs and external compensation practices.
COMPENSATION COMPONENTS
The Company's existing compensation structure for executive officers
generally includes a combination of base salary, incentive cash bonus based
upon performance and stock options. The summary below describes in more
detail the factors that the Compensation Committee considers in establishing
each of the three primary components of the compensation package provided to
the executive officers.
BASE SALARY
The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals for
which he or she has responsibility, the compensation levels at companies which
compete for executive talent, and the incentives necessary to attract and
retain qualified management. Salary levels are largely determined through
comparisons with companies of similar headcount and market capitalization or
complexity in the telecommunications industry. The Committee believes that the
comparison companies are the best group for comparing the Company's
<PAGE>
<PAGE>
compensation levels because the Company competes with this group of companies
for employees.
Executive salaries at Ursus are based on individual performance
contributions within a competitive salary range developed for each position
through job evaluation or responsibilities and market comparisons. The Human
Resources Department reviews Ursus's competitive position in the marketplace
and recommends adjustments to the Compensation Committee.
Where the executive has an employment agreement base salary is adjusted
each year in accordance with the terms of that agreement. Where the executive
is not subject to an employment agreement base salary is adjusted each year to
take into account the executive officer's performance and to maintain a
competitive salary structure. The Compensation Committee conducts reviews of
executive performance and industry compensation practices on an annual basis
and may change each executive officer's salary based on the individual's
contributions and responsibilities over the prior twelve months and informal
reviews of comparable company base salaries. The Compensation Committee
believes that, on the basis of its knowledge of executive compensation in the
industry, that the Company's salary levels for the executive officers are at a
level that is considered reasonable and necessary given the Company's
financial resources and the stage of the Company's development.
CASH-BASED INCENTIVE COMPENSATION
Cash bonuses are awarded based upon employment agreements and are
designed to achieve designated individual goals of the executives and the
Company's success in achieving specific company-wide goals for increased
EBITDA. The Compensation committee has and will continue to award other cash
bonuses on a discretionary basis based upon performance and for achieving
certain designated goals.
LONG-TERM INCENTIVE COMPENSATION
The Company has utilized its stock option plans to provide executives
and other key employees with incentives to maximize long-term stockholder
value. Awards under this plan by the Compensation Committee take the form of
stock options, designed to give the recipient a significant equity stake in
the Company and thereby closely align his or her interests with those of the
Company's stockholders. Through Ursus's Stock Option Plan grants, executives
can participate in the ownership of the Company. Stock option grants also
provide incentives for executives to stay with Ursus and contribute to its
success.
Factors considered in making such awards include the individual's
position in the Company, his or her performance and responsibilities, and
internal and external market comparability considerations. The Compensation
Committee has established certain general guidelines in making option grants
to the executive officers in an attempt to target a fixed number of unvested
option shares based upon each individual's position with the Company and his
or her existing holdings of unvested options. However, the Board of Directors
is not required to adhere strictly to these guidelines and may vary the size
of the option grant made to each executive officer as it determines the
circumstances warrant.
Each option grant allows the executive officer to acquire shares of
Common Stock at a fixed option price (the fair market value of the stock on
the day the grant is approved by the Compensation Committee) over a specified
period of time (up to 10 years). The options typically vest in one year,
<PAGE>
<PAGE>
however the Compensation Committee has granted accelerated vesting for many
grants to key executive based on certain performance criteria. The stock
option will provide a return to the executive officer only if he or she
remains in the Company's service and then only if the market price of the
Common Stock appreciates over the option term.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Luca Giussani has served as the Company's Chief Executive Officer since
the inception of the Company in 1993. His base salary for fiscal year 2000 was
$250,000 and increased to $275,000 as of January 1, 2000 in conformance to his
aforementioned employment agreement. Mr. Giussani's compensation is
determined solely by the non-employee directors who are members of the
Compensation Committee. The Committee believes that Mr. Giussani's
compensation was comparable to that of other executives at similarly situated
companies. The committee believes that Mr. Giussani's equity position provides
sufficient incentive for increasing shareholder value.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code disallows a tax deduction to
publicly held companies for compensation paid to certain of their executive
officers, to the extent that compensation exceeds $1 million per covered
officer in any fiscal year. The limitation applies only to compensation that
is not considered to be performance-based. Non-performance based compensation
paid to the Company's executive officers for the 1999 fiscal year did not
exceed the $1 million limit for any officer, and the Compensation Committee
does not anticipate that the non-performance based compensation to be paid to
the Company's executive officers for fiscal 2000 will exceed that limit. The
Company's 1998 Stock Incentive Plan has been structured so that any
compensation deemed paid in connection with the exercise of option grants made
under the plan with an exercise price equal to the fair market value of the
option shares on the grant date will qualify as performance-based compensation
that will not be subject to the $1 million limitation. Because it is unlikely
that the cash compensation payable to any of the Company's executive officers
in the foreseeable future will approach the $1 million limit, the Compensation
Committee has decided at this time not to take action to limit or restructure
the elements of cash compensation payable to the Company's executive officers.
The Compensation Committee will reconsider this decision should the individual
cash compensation of any executive officer ever approach the $1 million level.
Members of the Compensation Committee:
William M. Newport (Chair)
Kenneth L. Garrett
Vincent Cannistraro
Luca M. Giussani
AUDIT COMMITTEE REPORT
The following information shall not be deemed to be "soliciting information"
or to be "filed" with the Securities and Exchange Commission. Such
information shall not be deemed to be incorporated by reference into any
subsequent filing under the Securities Act of 1933 or the Securities Exchange
Act of 1934. The Audit Committee receives draft audited financial statements
prepared by the independent auditors and discusses such draft financials with
management. The Audit Committee includes in its review and discussion the
scope of the audit performed by the independent auditors, the adequacy of the
internal audit procedures and controls, and the independent auditors' opinion
<PAGE>
<PAGE>
as to the adequacy of the financial disclosures contained therein. The Audit
Committee has received from the independent auditors the written disclosures
and letter required by the Independent Standards Board Standard No. 1 and has
discussed the independent auditors' independence.
Based on its review of the financial statements and the discussion with the
independent auditors, the Audit Committee recommends to the Board of Directors
that the financial statements be included in the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 2000 to be filed with the
Securities and Exchange Commission.
Members of the Audit Committee:
Kenneth L. Garrett (Chair)
William M. Newport
Vincent Cannistraro
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Loans and Advances to Executive Officers
Between December_26, 1995 and July_15, 1997, Ursus loaned an aggregate
of $127,000 to Luca Giussani, its Chief Executive Officer. The loans were
evidenced by unsecured notes bearing interest at 7.65% per annum. In addition,
Ursus made cash advances totaling $4,749 on behalf of Mr._Giussani during this
period. At March 31, 1999, Mr. Giussani owed Ursus $10,843. On April 30, 1999
the Board of Directors approved a loan to Mr. Giussani in the amount of
$30,000 evidenced by a promissory note that bears interest at 6%. On
September 20, 1999 Mr. Giussani repaid the note and accrued interest.
At March 31, 2000, our Chief Executive Officer owed Ursus $23,514 for
cash advances made on his behalf. On May 25, 2000 Ursus advanced an additional
$10,000 to its Chief Executive Officer.
On June 6, 2000 our Board of Directors approved an $80,000 loan to our
Chief Executive Officer. The $80,000 loan consists of $50,000 of additional
cash and the conversion of $30,000 of cash advances into a loan. The loan is
evidenced by a promissory note that is due and payable on September 3, 2000,
with interest at the rate of 6.43% per annum.
BONUSES PAID TO EXECUTIVE OFFICERS
Pursuant to the employment agreements effective January 1, 1998, Messrs.
Giussani and Chaskin each received $45,000, $240,222, and $281,909 in bonuses
under these agreements for fiscal years ended March _31, 2000, 1999 and 1998,
respectively.
On October 23, 1998 our Compensation Committee approved a special
one-time bonus of $120,000 to each of Messrs. Giussani and Chaskin to reward
them for their efforts in closing the acquisition of Access Authority.
On September 3, 1999 our Compensation Committee approved a special
one-time bonus of $25,000 to Mr. Chaskin for repositioning Ursus with the
investment community, in developing a new strategy for the Company and in
developing and launching of "theStream.com"TM.
From April 1, 1999 to October 31, 1999 the Company was paying its Chief
Executive Officer and its President bonuses in advance pursuant to the
<PAGE>
<PAGE>
employment agreements effective January 1, 1998. At March 31, 2000 the amount
due from the two officers for bonuses paid in advance totaled $133,961.
STOCK PERFORMANCE GRAPH
The stock price performance graph below is required by the Securities and
Exchange Commission. This graph shall not be deemed to be filed under the
Securities Act or Exchange Act, or incorporated by reference by any general
statement incorporating this proxy statement by reference into any filing made
under the Securities Act or Exchange Act, except to the extent that we
specifically incorporate this graph by reference. The graph below compares the
cumulative total stockholder return on our common stock, the Standard & Poors
Communications Services Sector, and the Russell 2000 Index from May 13, 1998
(the effective date of our registration statement with respect to our initial
public offering) to March 31, 2000 (assuming the investment of $100 in our
common stock and in each of the other indices on the date of our initial
public offering, and reinvestment of all dividends). The comparisons in the
graph below are based on historical data and are not intended to forecast the
possible future performance of our common stock.
[PERFORMANCE GRAPH HERE]
The above graph was plotted using the following data:
Ursus Telecom S&P Communication
Corporation Sector Russell 2000
----------------- ------------------ -------------
Market Investment Investment Investment
Price Value Value Value
--------------------------------------------------------------
05/13/98 9.50 $100 $100 $100
06/30/98 8.50 $ 89 $ 96 $ 96
09/30/98 5.34 $ 56 $ 79 $ 79
12/31/98 2.88 $ 30 $ 86 $ 86
03/31/99 4.56 $ 48 $ 78 $ 78
06/30/99 3.63 $ 38 $ 90 $ 90
09/30/99 18.75 $197 $ 83 $ 83
12/31/99 13.25 $139 $ 85 $ 85
03/30/00 16.31 $172 $ 88 $ 88
<PAGE>
<PAGE>
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR THE
NEXT ANNUAL MEETING
Proposals of stockholders intended to be included in the Company's next
proxy statement, including nominations for Directors, for the next Annual
Meeting of Stockholders must be received by the Company Secretary, at our
executive offices, 440 Sawgrass Corporate Parkway Suite 112, Sunrise, Florida,
33325, no later than April 30, 2001.
If you intend to present a proposal at our 2001 Annual Meeting of
Stockholders, but do not intend to have it included in our next proxy
statement, you must deliver a copy of your proposal to our Secretary at our
principal executive offices listed above no later than June 15, 2001. If we do
not receive your proposal within this timeframe, our management will use its
discretionary authority to vote the shares it represents by proxy as our board
of directors may recommend.
Our 2000 annual report on Form 10-k as filed with the Securities and
Exchange Commission is available without charge by writing to or calling our
executive offices. Requests should be directed to; Investor Relations, 440
Sawgrass Corporate Parkway Suite 112, Sunrise, Florida, 33325, (954) 846-7887.
Our annual report on Form 10-K may be obtained through our Website at
www.ursustele.com or at the Securities and Exchange Commission's website
www.sec.gov.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than 10% of the Company's Common
Stock (collectively, "Reporting Persons") to file with the Securities and
Exchange Commission ("SEC") initial reports of ownership and changes in
ownership of the Company's Common Stock. Reporting Persons are required by SEC
regulations to furnish the Company with copies of all Section 16(a) reports
they file.
To the Company's knowledge, based solely on its review of the copies of
such reports received or written representations from certain Reporting
Persons that no other reports were required, the Company believes that during
its fiscal year ended March 31, 2000, all Reporting Persons complied with all
applicable filing requirements.
OTHER MATTERS
The Board of Directors knows of no other business that will be presented
at the Annual Meeting. If any other business is properly brought before the
Annual Meeting, proxies in the enclosed form will be voted in respect thereof
as the proxy holders deem advisable.
It is important that the proxies be returned promptly and that your
shares be represented. Stockholders are urged to mark, date, execute and
promptly return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
/s/ Johannes S. Seefried
Johannes S. Seefried
Chief Financial Officer
July 27, 2000
Sunrise, Florida
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PROXY
Ursus Telecom Corporation
Common Stock Proxy
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Johannes Seefried and Luca Giussani
proxies (each with the power to appoint his substitute and with power to act
alone) of the undersigned to vote all the shares of Common Stock of Ursus
Telecom Corporation (the "Company") which the undersigned would be entitled to
vote as designated on the reverse side of the Annual Meeting of Stockholders
of the Company, to be held on August 28, 2000, and any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR THE ELECTION OF THE NOMINEES FOR DIRECTORS LISTED IN
PROPOSAL 1 AND FOR PROPOSALS 2 AND 3. IF YOU FAIL TO PROVIDE AUTHORIZATION
AND DIRECTION THIS PROXY WILL BE VOTED FOR EACH OF THE DIRECTOR NOMINEES AND
FOR PROPOSALS 2 AND 3.
PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE: [X] IN BLUE OR BLACK INK.
1. To elect 3 directors, of which 2 directors will be Class I directors
to serve until the next Annual Meeting of Shareholders and until
their successors are duly elected and qualified; and 1 director will
be a Class II director to serve until the Annual Meeting to be held
in 2002 and until their successors are duly elected and qualified.
[_] FOR all nominees [_] WITHHOLD AUTHORITY
listed below for all nominees listed
Nominees: Class I: Class II:
Kenneth Garrett William Newport
Vincent Cannistraro
(Instructions: To withhold authority to vote for any individual, write that
Nominee's name on the line below).
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2. To approve an amendment to the 1998 Stock Option Plan to reserve an
additional 2,000,000 shares of Ursus Telecom Corporation common
stock there under for issuance;
[_] FOR [_] AGAINST [_] ABSTAIN
3. To approve the appointment of Ernst & Young LLP as the independent
auditors of Ursus for fiscal year 2001
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion the proxies are authorized to vote upon such
other business as may properly come before the meeting.
Please sign exactly as name(s) appear on this proxy. If signing for estates,
trusts or corporations, your title and capacity should be stated. If shares
are held jointly, each holder should sign.
--------------------------------
(Signature)
--------------------------------
(Signature if held jointly)
--------------------------------
(Date)
PLEASE MAKE, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
