<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
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 Section240.14a-11(c) or
Section240.14a-12
FASTNET CORPORATION
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
FASTNET CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD JUNE 23, 2000.
<PAGE>
NOTICE OF 2000 ANNUAL MEETING AND PROXY STATEMENT
[LOGO]
May 12, 2000
Dear Shareholder,
On behalf of the Board of Directors and management of FASTNET Corporation, I
cordially invite you to attend the Company's 2000 Annual Meeting of Shareholders
(the "Annual Meeting"). The Annual Meeting will be held at 10:00 a.m. (EST) on
June 23, 2000 at the Holiday Inn located at Routes 22 and 512, Bethlehem, PA
18017, in the Lehigh Room.
Important information concerning the matters to be acted upon at the Annual
Meeting is contained in the accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement. After careful consideration, our Board of
Directors has unanimously approved the three proposals described in the Proxy
Statement and recommends that you vote FOR each proposal.
I encourage you to attend the Annual Meeting in person. Whether or not you
do so, however, I hope that you will read the enclosed Proxy Statement and then
complete, sign and date the enclosed proxy card and return it in the postage
prepaid envelope provided. This will save FASTNET additional expense in
soliciting proxies and will ensure that your shares are represented. Please note
that you may vote in person at the Annual Meeting even if you have previously
returned the proxy card.
Thank you for your attention to this important matter.
Sincerely,
/s/ David K. Van Allen
DAVID K. VAN ALLEN
CHIEF EXECUTIVE OFFICER
<PAGE>
FASTNET CORPORATION
Two Courtney Place, Suite 130
3864 Courtney Street
Bethlehem, PA 18017
NOTICE OF 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 23, 2000
Notice is hereby given that the 2000 Annual Meeting of Shareholders (the
"Annual Meeting") of FASTNET Corporation (the "Company"), a Pennsylvania
business corporation, will be held at the Holiday Inn located at Routes 22 and
512, Bethlehem, PA 18017, in the Lehigh Room, on June 23, 2000, at 10:00 a.m.,
(EST).
A proxy card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the following purposes:
1. To elect six directors each for a one-year term and until the election
and qualification of his successor;
2. To approve an increase in the number of shares authorized for issuance
under the Company's Equity Compensation Plan from 1,000,000 to 3,000,000
shares of common stock of the Company;
3. To ratify the selection of Arthur Andersen LLP as the Company's auditors
for 2000; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournments thereof.
The Board of Directors is not aware of any other business to come before the
Annual Meeting.
Any action may be taken on the foregoing matters at the Annual Meeting on
the date specified above, or on any date or date to which the Annual Meeting may
be adjourned or postponed. Only shareholders of record at the close of business
on May 5, 2000 will be entitled to notice of, and to vote at, the Annual Meeting
and at any adjournments or postponements thereof. A list of shareholders
entitled to vote at the Annual Meeting will be available for examination by any
shareholder for any purpose germane to the Annual Meeting at the main office of
the Company during the ten days prior to the Annual Meeting, as well as at the
Annual Meeting.
You are requested to complete, sign and date the enclosed proxy, which is
solicited on behalf of the Board of Directors, and to mail it promptly in the
postage prepaid envelope provided, or use the Company's Internet voting
procedures or cast your vote via telephone. The proxy will not be used if you
attend and vote at the Annual Meeting in person.
By Order of the Board of Directors,
/s/ Stanley F. Bielicki
STANLEY F. BIELICKI
SECRETARY
Bethlehem, Pennsylvania
May 12, 2000
YOUR VOTE IS IMPORTANT. THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL
MEETING. ACCORDINGLY, YOU ARE ASKED TO COMPLETE, SIGN, AND RETURN THE
ACCOMPANYING PROXY CARD IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES, OR USE THE COMPANY'S INTERNET VOTING PROCEDURES OR
CAST YOUR VOTE VIA TELEPHONE.
<PAGE>
FASTNET CORPORATION
Two Courtney Place, Suite 130
3864 Courtney Street
Bethlehem, PA 18017
PROXY STATEMENT
2000 ANNUAL MEETING OF SHAREHOLDERS
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of FASTNET Corporation (the "Company") of proxies for use at
the 2000 Annual Meeting of Shareholders of the Company to be held on June 23,
2000 (the "Annual Meeting") and at any adjournments thereof. Action will be
taken at the meeting upon the election of six directors, approval of an increase
to the number of shares authorized for issuance under the Company's Equity
Compensation Plan (the "Plan") from 1,000,000 to a total of 3,000,000 shares of
common stock of the Company, ratification of the selection of Arthur Andersen
LLP as the Company's auditors for 2000, and such other business as may properly
come before the meeting and any adjournments thereof. This Proxy Statement, the
accompanying proxy card, and the Company's Annual Report for 1999 will first be
sent to the Company's shareholders on or about May 12, 2000.
VOTING RIGHTS AND PROXY INFORMATION
Only the holders of the Company's Common Stock, no par value per share
("Shares"), of record at the close of business on May 5, 2000 are entitled to
vote at the Annual Meeting. On that date there were 14,988,947 Shares
outstanding and entitled to be voted at the meeting. The presence at the annual
meeting of a majority, or 7,644,363 Shares, either in person or by proxy, will
constitute a quorum for the transaction of business at the Annual Meeting. Each
holder of Shares entitled to vote will have the right to one vote for each Share
outstanding in his or her name on the books of the Company. Directors shall be
elected by a plurality of the votes cast.
The Shares represented by each properly executed proxy card will be voted in
the manner specified by the shareholder. If instructions to the contrary are not
given, such Shares will be voted FOR the election to the Board of Directors of
the nominees listed herein, FOR the approval of the increase in the number of
shares authorized for issuance under the Plan and FOR ratification of the
selection of Arthur Andersen LLP as the Company's auditors for 2000. If any
other matters are properly presented to the meeting for action, the proxy
holders will vote the proxies (which confer discretionary authority to vote on
such matters) in accordance with their best judgment.
Execution of the accompanying proxy card will not affect a shareholder's
right to attend the Annual Meeting and vote in person. Any shareholder giving a
proxy has the right to revoke it by giving written notice of revocation to the
Secretary of the Company at any time before the proxy is voted. Under the
Pennsylvania Business Corporation Law, if a shareholder (including a nominee,
broker, or other record owner) records the fact of abstention or fails to vote
(including broker non-votes) either in person or by proxy, such action is not
considered a vote cast and will have no effect on the election of directors, the
approval of the increase to the number of shares authorized for issuance under
the Plan or the ratification of the selection of Arthur Andersen LLP, but will
be considered present for purposes of determining a quorum.
An automated system administered by the Company's transfer agent will
tabulate affirmative and negative votes cast in person at the Annual Meeting.
Abstentions and broker non-votes are each included in the determination of the
number of shares present and voting for quorum purposes, and each is tabulated
separately. Approval of the increase in the number of Shares authorized for
issuance under the Company's Equity Compensation Plan and the ratification of
the independent auditors for the Company
<PAGE>
for the current year will require the affirmative vote of a majority of the
Shares present or represented and entitled to vote at the Annual Meeting.
PROPOSAL NO. 1--ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of six members, all
of which are elected each year to hold office for a one-year term and until
successors are duly elected and qualified, except in the event of death,
resignation, or removal. Subject to shareholder approval at this meeting, six
directors will be elected at the Annual Meeting. Each director will be elected
at the Annual Meeting by a plurality of votes cast at the meeting.
Mr. Van Allen, Mr. Hunt, Mr. Michels, Mr. Farber, Mr. Borden and
Mr. Kessman, each of whom are current members of the Board of Directors, have
been nominated by the Board of Directors for election as directors at the Annual
Meeting. Shares represented by properly executed proxy cards in the accompanying
form will be voted for such nominees in the absence of instructions to the
contrary. The nominees have consented to be named and to serve if elected. The
Company does not know of anything that would preclude the nominees from serving
if elected. If, for any reason, a nominee should become unable or unwilling to
stand for election as a director, either the Shares represented by all proxies
authorizing votes for such nominee will be voted for the election of such other
person as the Board of Directors may recommend or the number of directors to be
elected at the Annual Meeting will be reduced accordingly.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
THE ELECTION OF MR. VAN ALLEN, MR. HUNT, MR. MICHELS, MR. FARBER, MR. BORDEN AND
MR. KESSMAN AS DIRECTORS AT THE ANNUAL MEETING.
Set forth below is certain information concerning Mr. Van Allen, Mr. Hunt,
Mr. Michels, Mr. Farber, Mr.Borden and Mr. Kessman.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING:
DAVID K. VAN ALLEN, 41, has served as the chief executive officer and
chairman of the board of directors of FASTNET since May 1994, and was a member
of the Compensation Committee of the Board of Directors in 1999. Mr. Van Allen
co-founded FASTNET together with Mr. Hunt in May 1994. From March 1991 until
May 1994, Mr. Van Allen formed and managed his own company, Van Allen &
Associates, which provided computer network services to businesses. From
July 1988 until February 1991, Mr. Van Allen was a manager with Tandy
Corporation, a manufacturer and vendor of consumer electronics. From April 1986
until June 1988, Mr. Van Allen was a chief design engineer with Texar Inc., a
provider of hardware to the radio broadcast industry. From January 1984 until
March 1986, Mr. Van Allen was a consultant with Motorola Corporation, a
manufacturer of electronic equipment and developer of communications and
computer systems, where he focused on designing and marketing audio processing
systems.
SONNY C. HUNT, 39, has served as president and a member of the board of
directors of FASTNET since May 1994. Mr. Hunt co-founded FASTNET together with
Mr. Van Allen in May 1994. From June 1991 until May 1994, Mr. Hunt formed and
managed his own company, HS&T, a provider of hardware, software and training
services. From December 1987 until June 1991, Mr. Hunt, was a programmer for
Nexus Inc., a developer of word processors and other multi-user software tools
for business, and in June 1991, he acquired the company. From August 1985 until
December 1987, Mr. Hunt was a programmer for The Small Computer Company, a
database software developer. Mr. Hunt attended George Mason University and has
completed advanced courses in computer programming.
2
<PAGE>
DOUGLAS L. MICHELS, 45, has served as a member of the board of directors of
FASTNET since October 1998 and is a member of the Compensation Committee of the
Board of Directors. Mr. Michels currently serves as the President, Chief
Executive Officer and a director of The Santa Cruz Operation, Inc., which
provides UNIX-based, open system software, where he has held various positions
since 1979. Mr. Michels co-founded The Santa Cruz Operation, Inc. in 1979.
Mr. Michels holds a B.S. in computer and information science from the University
of California, Santa Cruz.
DAVID J. FARBER, 66, has served as a member of the board of directors of
FASTNET since January 2000. In January 2000, Mr. Farber was appointed to serve
as Chief Technologist for the Federal Communications Commission. Due to this
appointment, Mr. Farber has taken a leave of absence from his position as a
professor at the University of Pennsylvania, where he has held appointments in
both the Department of Computer Science and the Department of Engineering since
September 1988. Since September 1998, Mr. Farber has also served as director for
both the Center for Communications and Information Sciences and Policy, and the
Distributed Computer Laboratory, managing research in high-speed networking.
Mr. Farber holds a B.S.E.E., a Masters in Mathematics and an honorary doctorate
of Science from the Stevens Institute of Technology.
R. BARRY BORDEN, 60, has served as a member of the board of directors of
FASTNET since January 2000 and has been a member of the Compensation Committee
of the Board of Directors since March 2000. Mr. Borden has served as president
of Nettech Systems, Inc., a supplier of software for wireless data
communications, since August 1997. In addition, Mr. Borden has served as
president of LMA Group, Inc., a general management consulting firm, since
August 1984. Mr. Borden is also a member of the board of directors of Sedona
Corporation, a supplier of software to corporations for visualization of spatial
data, and AM Communications, Inc., a provider of status and network monitoring
systems for broadband networks. Mr. Borden holds a B.S.E.E. from the University
of Pennsylvania.
ALAN S. KESSMAN, 53, has served as a member of the board of directors of
FASTNET since January 2000 and has been a member of the Compensation Committee
of the Board of Directors since March 2000. Mr. Kessman has been a partner in PS
Capital, an investment management advisory partnership, since October 1998, and
has served as chief executive officer and a director of Vion
Pharmaceuticals, Inc., a company focused on cancer research, since
January 1999. From 1983 to June 1998, Mr. Kessman served as chief executive
officer and president of Executone Information Systems, Inc., a company that
designs, manufactures and supports voice processing and healthcare
communications systems and offers voice, data and video network services.
Mr. Kessman holds a B.S. in Business Administration from Lehigh University and
is a certified public accountant.
PROPOSAL NO. 2--APPROVAL OF INCREASE IN THE NUMBER OF SHARES AUTHORIZED FOR
ISSUANCE UNDER THE COMPANY'S EQUITY COMPENSATION PLAN
The Company's shareholders are being asked to act upon a proposal to approve
an increase in the number of Shares authorized for issuance under the Company's
Equity Compensation Plan from 1,000,000 to a total of 3,000,000. The Plan
provides for grants of incentive stock options, nonqualified stock options, and
restricted stock to the Company's employees, advisors and consultants, and to
non-employee directors. The Company is currently authorized to issue up to
1,000,000 shares of common stock under the Plan, of which 940,500 shares have
been issued as of April 20, 2000, subject to certain vesting restrictions. The
Company believes that the availability of the additional Shares will ensure that
the Company continues to have a sufficient reserve of Shares authorized under
the Plan to grant to the Company's current and future employees, advisors and
consultants, and to non-employee directors. By encouraging stock ownership in
the Company through the issuance of stock options, the Company seeks to motivate
such individuals to contribute materially to the Company's success. On
March 23, 2000, the Compensation Committee of the Board of Directors approved an
amendment to the Plan, subject to shareholder approval, to increase the number
of Shares authorized for issuance
3
<PAGE>
under the Plan to a total of 3,000,000. The Compensation Committee has directed
that the proposal to amend the Plan be submitted to the Company's shareholders
for their approval.
If the amendment to the Plan is approved by the shareholders, the amendment
would become effective on the date such shareholder approval is granted. If the
amendment is not approved by the shareholders, the amendment will not be
effected and the Compensation Committee will reconsider its proposal.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST AT THE ANNUAL MEETING
BY THE HOLDERS OF THE OUTSTANDING SHARES IS REQUIRED FOR THE APPROVAL OF THIS
INCREASE IN THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER THE PLAN. THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
APPROVAL OF THIS PROPOSAL.
PROPOSAL NO. 3--RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has appointed Arthur Andersen LLP, independent public
accountants, to be the Company's auditors for 2000. Although not required to do
so, the Board of Directors has determined that it would be desirable to request
ratification of this appointment by the holders of Shares of the Company. If
such ratification is not received, the Board of Directors will reconsider the
appointment.
A representative of Arthur Andersen LLP is expected to be present at the
Annual Meeting. The representative will have an opportunity to make a statement
and will be able to respond to appropriate questions submitted either orally or
in writing at the meeting.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTES CAST AT THE ANNUAL MEETING
BY THE HOLDERS OF THE OUTSTANDING SHARES IS REQUIRED FOR THE RATIFICATION OF
THIS SELECTION. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS VOTE FOR APPROVAL OF THIS PROPOSAL.
OTHER MATTERS
As of the date of this Proxy Statement, management knows of no other matters
to be presented for action at the Annual Meeting. However, if any further
business should properly come before the Annual Meeting, the persons named as
proxies in the accompanying proxy card will vote on such business in accordance
with their best judgment.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information as of April 20, 2000 relating to
the beneficial ownership of Shares by each of the members of the Board of
Directors, the Chief Executive Officer and each of the four other most highly
compensated executive officers of the Company, by members of the Board of
Directors and the Company's officers as a group, and by the holders of 5% or
more of the total Shares outstanding. As of April 20, 2000, there were
14,988,947 Shares outstanding. Information as to the number of Shares owned and
the nature of ownership has been provided by these persons and is not within the
direct knowledge of the Company.
Except as otherwise indicated, and subject to applicable community property
laws, the persons named in the table have sole voting and investment power with
respect to all shares of common stock held by them. Beneficial ownership is
determined in accordance with the rules of the Securities and Exchange
Commission. In presenting the number of shares beneficially owned by a person
and the percentage ownership of that person, shares of common stock subject to
options or warrants owned by such person that are currently exercisable or
exercisable within 60 days of April 20, 2000 are deemed outstanding; provided
that such shares are not deemed outstanding for the purpose of computing the
percentage of ownership of any other person. The options listed as beneficially
owned by Mr. Hunt
4
<PAGE>
reflect options to purchase 5,000 shares of common stock that were issued to
Mr. Hunt's wife, who is also an employee of the Company.
<TABLE>
<CAPTION>
OPTIONS AND
NAME SHARES WARRANTS TOTAL PERCENT
- ---- --------- ----------- --------- --------
<S> <C> <C> <C> <C>
5% SHAREHOLDERS
H&Q You Tools Investment Holding, L.P............... 3,175,765 1,030,000 4,205,765 28.1%
One Bush Street
San Francisco, CA 94104
EXECUTIVE OFFICERS AND DIRECTORS
David K. Van Allen.................................. 2,825,000 -- 2,825,000 18.8%
Sonny C. Hunt....................................... 2,725,000 5,000 2,730,000 18.2%
Stanley F. Bielicki................................. 100,000 75,000 175,000 1.2%
Rafe Scheinblum..................................... 175,000 75,000 250,000 1.7%
Phillip L. Weller................................... 175,000 75,000 250,000 1.7%
David J. Farber..................................... -- 7,500 7,500 0.1%
R. Barry Borden..................................... -- 7,500 7,500 0.1%
Alan S. Kessman..................................... -- 7,500 7,500 0.1%
Douglas L. Michels.................................. -- 107,500 107,500 0.7%
All directors and executive officers as a group
(11 persons)...................................... 6,000,000 360,000 6,360,000 42.5%
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The Board of Directors of the Company currently consists of six members, all
of which are elected each year to hold office for a one-year term and until
successors are duly elected and qualified, except in the event of death,
resignation, or removal. Each of Company's current members of the Board of
Directors has been nominated for election at the Annual Meeting. Certain
information about each of these directors is furnished in the section entitled
"Proposal No. 1--Election of Directors" set forth above.
The following table sets forth information with respect to the executive
officers, as well as certain other members of senior management, of the Company
as of April 20, 2000:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- --------
<S> <C> <C>
David K. Van Allen... 41 Chief Executive Officer and Director
Sonny C. Hunt........ 39 President and Director
Stanley F. Bielicki.. 54 Chief Financial Officer
Phillip L. Weller.... 39 Chief Technology Officer
Rafe Scheinblum...... 47 Executive Vice President--Operations
Mark A. Horinko...... 37 Vice President--Engineering
Thomas J. Roberts.... 40 Vice President--Sales
</TABLE>
DAVID K. VAN ALLEN has served as the chief executive officer and chairman of
the board of directors of FASTNET since May 1994. Mr. Van Allen co-founded
FASTNET together with Mr. Hunt in May 1994. From March 1991 until May 1994,
Mr. Van Allen formed and managed his own company, Van Allen & Associates, which
provided computer network services to businesses. From July 1988 until
February 1991, Mr. Van Allen was a manager with Tandy Corporation, a
manufacturer and vendor of consumer electronics. From April 1986 until
June 1988, Mr. Van Allen was a chief design engineer with Texar Inc., a provider
of hardware to the radio broadcast industry. From January 1984 until
March 1986, Mr. Van Allen was a consultant with Motorola Corporation, a
manufacturer of electronic
5
<PAGE>
equipment and developer of communications and computer systems, where he focused
on designing and marketing audio processing systems.
SONNY C. HUNT has served as president and a member of the board of directors
of FASTNET since May 1994. Mr. Hunt co-founded FASTNET together with Mr. Van
Allen in May 1994. From June 1991 until May 1994, Mr. Hunt formed and managed
his own company, HS&T, a provider of hardware, software and training services.
From December 1987 until June 1991, Mr. Hunt, was a programmer for Nexus Inc., a
developer of word processors and other multi-user software tools for business,
and in June 1991, he acquired the company. From August 1985 until
December 1987, Mr. Hunt was a programmer for The Small Computer Company, a
database software developer. Mr. Hunt attended George Mason University and has
completed advanced courses in computer programming.
STANLEY F. BIELICKI has served as chief financial officer of FASTNET since
February 1997. From March 1984 until February 1997, Mr. Bielicki maintained a
private practice as a financial advisor, specializing in small and medium sized
businesses. Mr. Bielicki is a certified public accountant and holds a B.S. in
microbiology from Ohio State University and a M.B.A. from Southern Illinois
University.
PHILLIP L. WELLER has served as chief technology officer of FASTNET since
November 1999. Mr. Weller previously served as executive vice president of
engineering of FASTNET from November 1996 until November 1999. From June 1991
until November 1996, Mr. Weller was a project manager and senior developer with
AT&T Microelectronics/Lucent Technologies, where he participated in the
development of new and modern message handling systems. From June 1980 until
June 1991, Mr. Weller was a circuit designer with AT&T Bell Laboratories, a
developer of voice, data and video telecommunications, in its Very Large Scale
Integration division. Mr. Weller holds an A.A.S. in electronics technology from
Lehigh County Community College, a B.S. in computer science from Moravian
College and a M.S. in engineering science from Pennsylvania State University.
RAFE SCHEINBLUM has served as executive vice president of operations of
FASTNET since July 1996. From September 1989 until June 1996, Mr. Scheinblum
formed and managed his own company, Double Click Computers. Mr. Scheinblum holds
a B.F.A. in theatrical design from Windham College.
MARK A. HORINKO has served as vice president of engineering of FASTNET since
May 1999. From May 1984 until May 1999, Mr. Horinko held several senior
management positions with Vanguard Cellular Systems, Inc., including director of
technical services. Mr. Horinko's responsibilities at Vanguard included working
in areas of network engineering and operations, network deployment and real
estate, information technology and network management and security. Mr. Horinko
holds an A.A.S. from Lincoln Technical Institute in microelectronics and has
studied Computer Science and Business Management at Mansfield State University
and Moravian College.
THOMAS J. ROBERTS joined FASTNET as vice president of sales in
January 2000. From April 1989 until January 2000, Mr. Roberts served as
director, field sales for Binney & Smith where he was responsible for managing
all of their food, drug and regional mass merchandiser customers. Mr. Roberts
holds a B.A. in communications from Bloomsburg University and an M.B.A. from
Columbia University Business School.
Our executive officers are elected by and serve at the discretion of our
Board of Directors. There are no family relationships among our directors and
officers.
BOARD AND COMMITTEE MEETINGS
The Board of Directors of the Company consisted of Mr. Van Allen, Mr. Hunt
and Mr. Michels and held 4 meetings in 1999. Each director attended at least 75%
of the aggregate of the fiscal year 1999 meetings of the Board of Directors and
of the Board committee or committees on which he served during the year.
Standing committees of the Board of Directors of the Company are the Audit
6
<PAGE>
Committee and the Compensation Committee. Members of the Audit Committee are
Mr. Kessman, Mr.Farber and Mr. Borden, each of whom is an non-employee director.
Members of the Compensation Committee for the fiscal year ended December 31,
1999 were Mr. Van Allen and Mr. Michels. New members of the Compensation
Committee were appointed by the Board of Directors on March 23, 2000, consisting
of Mr. Michels, Mr. Kessman and Mr. Borden, each of whom is a non-employee
director.
The Audit Committee was not formed until March 23, 2000 and, therefore, did
not meet in 1999. The principal functions of the Audit Committee are to
recommend the firm to be appointed as independent accountants to audit the
Company's financial statements, review with management and the Company's
independent public accountants the scope and results of the annual audit
conducted each year; to discuss with management and the Company's independent
public accountants the Company's annual financial statements; to review fees
paid to, and the scope of services provided by, the Company's independent public
accountants; and to perform such other related duties and functions as are
deemed appropriate by the Audit Committee and the Board of Directors.
During 1999, the Compensation Committee met one time. The principal function
of the Compensation Committee is to administer the Company's stock option plans,
including the review and approval of stock option grants. The Compensation
Committee also reviews and approves the compensation and benefits of executive
officers, and makes recommendations to the Board of Directors regarding such
matters.
The Board of Directors does not have a Nominating Committee. The Board will
consider nominees for election to the Board of Directors recommended by the
Company's shareholders. All such recommendations should be submitted in writing
to the Board of Directors at the Company's principal office.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is responsible for determining salaries,
incentives and other forms of compensation for directors, officers and other
employees of the Company and administering various incentive compensation and
benefit plans. The compensation committee consisted of Mr. Van Allen and Mr.
Michels through the fiscal year ended December 31, 1999, and presently consists
of Mr. Michels, Mr. Kessman and Mr. Borden. During Mr. Van Allen's appointment
to the Compensation Committee in 1999, he participated in all discussions and
decisions regarding salaries and incentive compensation for all employees and
consultants of the Company, other than himself. No interlocking relationship
existed between any member of Compensation Committee and any member of any other
Company's Board of Directors or Compensation Committee during the fiscal year
ended December 31, 1999, and none exists currently.
DIRECTOR COMPENSATION
We reimburse each member of the Board of Directors for out-of-pocket
expenses incurred in connection with attending Board meetings. No member of the
Board of Directors currently receives any additional cash compensation. The
Company granted options to purchase 50,000 shares of the Company's common stock
to Mr. Michels, Mr. Farber, Mr. Borden and Mr. Kessman on February 28, 2000,
which will vest quarterly over a five year period at an exercise price of $9.25
per share. These options will expire on February 28, 2010. Mr. Michels,
Mr. Farber, Mr. Borden and Mr. Kessman each were granted an additional option to
purchase 5,000 shares of the Company's common stock on February 28, 2000, which
vested immediately at an exercise price of $9.25 per share. These options also
will expire on February 28, 2010. Each outside director will receive an annual
grant of 6,000 options during their term which will vest over five years.
7
<PAGE>
On March 3, 1999, we granted Mr. Michels, a member of the Board of
Directors, an option to purchase 100,000 shares of our common stock at an
exercise price of $1.50 per share, which expires on March 3, 2009. The option
became immediately exercisable on the date of grant.
EXECUTIVE COMPENSATION
The table below summarizes information concerning the compensation awarded
to, earned by, or paid for services rendered to FASTNET in all capacities during
the fiscal years ended December 31, 1998 and 1999 by the Company's:
- Chief Executive Officer; and
- executive officers whose salary and bonus for that fiscal year exceeded
$100,000 and who served as an executive officer of FASTNET during that
fiscal year.
Other than the salary and bonus described in the table below, we did not pay
any executive officer named in the Summary Compensation Table any fringe
benefits, perquisites or other compensation in excess of either $50,000 or 10%
of the total of his salary and bonus during the fiscal years ended December 31,
1998 and 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL
COMPENSATION
-------------------- OTHER ANNUAL ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) COMPENSATION($)
- --------------------------- -------- --------- -------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
David K. Van Allen..................... 1998 33,800 70,000 -- 2,705
CHIEF EXECUTIVE OFFICER 1999 182,250 -- -- 2,705
Sonny C. Hunt.......................... 1998 76,154 54,699 -- --
PRESIDENT 1999 150,000 -- -- --
Stanley F. Bielicki.................... 1999 111,424 33,576 -- --
CHIEF FINANCIAL OFFICER
Phillip L. Weller...................... 1998 95,000 35,000 2,308 --
CHIEF TECHNOLOGY OFFICER 1999 125,000 -- -- --
Rafe Scheinblum........................ 1998 72,700 48,403 3,060 --
EXECUTIVE VICE PRESIDENT--OPERATIONS 1999 125,000 -- -- --
</TABLE>
The amount listed under All Other Compensation for Mr. Van Allen represents
a life insurance policy on Mr. Van Allen, for which Kathryn Van Allen, Mr. Van
Allen's wife, is a co-beneficiary with FASTNET.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding options granted in the
1999 fiscal year to the executive officers named in the Summary Compensation
Table above. Mr. Van Allen was not granted any options during the 1999 fiscal
year. Amounts represent the hypothetical gains that could be achieved from the
respective options if exercised at the end of the option term. These gains are
based on assumed rates of stock appreciation of 5% and 10% compounded annually
from the date the respective options were granted to their expiration date based
upon the grant price.
8
<PAGE>
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------ ANNUAL RATES OF
NUMBER OF STOCK PRICE
SHARES PERCENTAGE APPRECIATION FOR
UNDERLYING OF TOTAL OPTION TERM
OPTIONS OPTIONS EXERCISE EXPIRATION ---------------------
NAME GRANTED GRANTED PRICE ($/SHARE) DATE 5% ($) 10% ($)
- ---- ---------- ---------- --------------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Sonny C. Hunt......................... 5,000 1.0 2.50 5/24/09 7,861 19,922
Stanley F. Bielicki................... 100,000 21.5 1.50 3/3/09 94,334 239,061
Phillip L. Weller..................... 100,000 21.5 1.50 3/3/09 94,334 239,061
Rafe Scheinblum....................... 100,000 21.5 1.50 3/3/09 94,334 239,061
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information concerning year end option values
for the 1999 fiscal year for the executive officers named in the Summary
Compensation Table above. The value of unexercised in-the-money options is
calculated based on a value equal to the initial public offering price of the
Company's shares of common stock at $12.00 per share.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END
--------------------------- -----------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE ($) UNEXERCISABLE ($)
- ---- ----------- ------------- --------------- -----------------
<S> <C> <C> <C> <C>
Sonny C. Hunt............................. 5,000 -- 47,500 --
Stanley F. Bielicki....................... 50,000 50,000 525,000 525,000
Phillip L. Weller......................... 50,000 50,000 525,000 525,000
Rafe Scheinblum........................... 50,000 50,000 525,000 525,000
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors consisted of Mr. Van
Allen and Mr. Michels for the fiscal year ended December 31, 1999. Presently,
the Compensation Committee consists of Mr. Michels, Mr. Kessman and Mr. Borden,
each of whom is a non-employee director. The Compensation Committee reviews and
recommends the compensation arrangements for officers and other senior level
employees, reviews general compensation levels for other employees as a group,
determines the options or stock to be granted to eligible persons under the
Equity Compensation Plan and takes such other action as may be required in
connection with the Company's compensation and incentive plans.
COMPENSATION POLICIES FOR EXECUTIVE OFFICERS (INCLUDING THE NAMED EXECUTIVE
OFFICERS). The Compensation Committee's executive compensation philosophy is
to: (i) provide competitive levels of compensation that integrate pay with the
individual executive's performance and the Company's short-and long-term
performance goals; (ii) motivate key executives to achieve strategic business
opportunities and benefits that are comparable to those offered by other
companies in the regional Internet service provider industry, thereby allowing
the Company to compete for and retain talented executives who are critical to
the Company's short- and long-term success; (iii) align the interests of key
executives with the short- and long-term interests of shareholders and the
enhancement of shareholder value through the granting of stock options; and
(iv) recognize individual contributions as well as overall business results. The
Company's objectives include qualitative factors that strengthen the Company's
ability to enhance profitable growth over the long-term, such as demonstrated
leadership ability, management development, insuring compliance with laws,
regulations and Company policies, and anticipating and responding to changing
market and economic conditions.
The compensation of the Company's Chief Executive Officer and other
executive officers is currently comprised of annual base salary, annual
performance incentives in the form of cash bonuses
9
<PAGE>
and long-term performance incentives in the form of stock option grants under
the Equity Compensation Plan or any other plan related to the Company's stock.
The Compensation Committee has determined that base salaries of executive
officers should be set at levels that are competitive with those of executives
of comparably-sized companies in the regional Internet service provider
industry. In addition, the Compensation Committee believes that it is
appropriate to reward performance through a combination of cash bonuses and
stock option grants and to provide a competitive compensation package that will
enable the Company to attract and retain the executives needed to enhance the
Company's short-term financial performance and to enhance profitable growth over
the long-term.
BASE SALARY. Base salaries for each of the Company's executive officers are
targeted according to salaries of employees holding similar offices and having
similar responsibilities at comparably-sized companies within the regional
Internet service provider industry. Annual salary adjustments for executive
officers are determined by evaluating the competitive marketplace, the
performance of the Company, the performance of the executive officer and change
in responsibilities assumed by such executive officer. Salary adjustments are
normally determined on an annual basis.
BONUSES. At the beginning of each year the Compensation Committee adopts a
performance bonus program setting forth strategic goals for the year and a
percentage of base salary that will be awarded to the senior management team
based upon the achievement of these goals. All awards are paid in full, in cash,
following the year of performance. The Compensation Committee awarded bonuses to
Mr. Bielicki, Chief Financial Officer of the Company, in 1999 based on his
achievements as an employee of the Company and individual predetermined goals
for 1999.
STOCK OPTION GRANTS. Stock options are designed to attract and retain
executives who can make significant contributions to the Company's success;
reward executives for such significant contributions; give executives a
long-term incentive to increase shareholder value; and align the interests of
the Company's senior executives with those of its stockholders. In determining
whether to grant stock options to executive officers, the Compensation Committee
evaluates each officer's performance by examining criteria similar to that
involved in fixing cash bonuses. The Compensation Committee also may grant stock
options for executive retention purposes, taking into account, among other
things, general industry practices. Stock options generally have been granted
with a ten-year term, with a vesting schedule ranging from quarterly to annual
periods and usually not exceeding five years, at an exercise price equal to or
above the fair market value of the Company's common stock on the grant date.
COMPENSATION OF CHIEF EXECUTIVE OFFICER. David K. Van Allen, the Company's
Chief Executive Officer, receives competitive compensation and regular benefits
in effect for senior executives of the Company. Mr. Van Allen does not
participate in any discussions and decisions regarding his salary and incentive
compensation. In 1999, the Compensation Committee reviewed information regarding
the compensation paid to the Chief Executive Officers of comparable companies,
and evaluated achievement of corporate, individual and organizational objectives
for 1999. Mr. Van Allen's annual compensation for 1999 was $185,000, a 74%
increase from the year ended December 31, 1998. Mr. Van Allen did not receive
any options to acquire any shares of the Company's Common Stock in 1999.
COMPENSATION COMMITTEE
David K. VanAllen Douglas L. Michels
10
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
Prior to February 8, 2000, the Company was not publicly traded and there was
no market for its securities. Therefore, no quoted market prices for the
Company's common stock are available for the year ended December 31, 1999.
Because there were no quoted market prices for the Company's common stock for
the year ended December 31, 1999, information regarding cumulative total
shareholder return on the Company's common stock for that period, whether
presented on a stand-alone or in a comparison with Nasdaq Composite Index or
other indices, would not be meaningful.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EQUITY INVESTMENTS
In May 1998, the Company sold 1,000,000 shares of common stock for an
aggregate purchase price equal to $200,000 and issued a secured note for cash in
the principal amount of $3.1 million and a warrant to purchase 1,000,000 shares
of our common stock to H&Q You Tools Investment Holding, L.P. Under the terms of
the note, interest accumulated at a rate equal to 7% per annum and the note
matured on January 31, 2001. Immediately prior to the closing of the Company's
initial public offering, H&Q You Tools converted this note into 2,033,334 shares
at a conversion rate of $1.50 per share. The warrant is currently exercisable at
an exercise price of $1.50 per share and expires in May 2005.
In May 1999, the Company issued a second secured note for cash in the
principal amount of $1.0 million to H&Q You Tools Investment Holding, L.P. Under
the terms of the note, interest accumulated at a rate equal to 7% per annum and
the note matured on May 15, 2000. H&Q You Tools converted this note in August
1999 into 142,431 shares of series A convertible preferred stock at a conversion
price equal to $7.13 per share. These shares of series A convertible preferred
stock were converted into 142,431 shares of common stock immediately prior to
the closing of the Company's initial public offering.
In August 1999, Lucent Technologies, Inc. purchased 280,505 shares of
series A convertible preferred stock. These shares converted into 280,505 shares
of common stock immediately prior to the closing of the Company's initial public
offering.
The Company also entered into a rights agreement with the holders of
series A convertible preferred stock, granting them registration rights, other
than in connection with the Company's initial public offering, of the common
stock issuable upon conversion of their preferred stock. All of the shares of
series A convertible preferred stock were converted into 385,693 shares of
common stock immediately prior to the closing of the Company's initial public
offering.
In November 1999, the Company entered into an amendment to the Company's
agreement with Hambrecht & Quist LLC which provided for the payment to
Hambrecht & Quist LLC of $820,000 for services provided for the August 1999
private placement and general strategic and financial advisory services. The
Company paid Hambrecht & Quist LLC $500,000 of the $820,000 upon completion of
the Company's initial public offering and is obligated to pay the balance on
February 1, 2001. Hambrecht & Quist LLC is affiliated with H&Q You Tools
Investment Holding, L.P. through a mutual association with Hambrecht & Quist
Group.
On December 31, 1999, the Company purchased software for approximately
$245,000 in cash pursuant to a corporate software license agreement with The
Santa Cruz Operation, Inc. Douglas Michels, a director of FASTNET, is the chief
executive officer of The Santa Cruz Operation, Inc.
In January 2000, the Company entered into a purchase agreement with H&Q You
Tools Investment Holding, L.P., under which the Company issued a $1.0 million
note to H&Q You Tools Investment Holding, L.P. In addition, H&Q You Tools
Investment Holding, L.P. received warrants to purchase 30,000 shares of our
common stock. The warrant became immediately exercisable at the initial
11
<PAGE>
public offering price of $12.00 per share and expires seven years after the
closing of this loan. The loan bore interest at a rate equal to 7% per annum and
matured upon the closing of the Company's initial public offering.
INDEBTEDNESS OF MANAGEMENT
On October 10, 1998, the Company made an unsecured loan of $50,000 at 6%
interest per year to David K. Van Allen, the Company's chief executive officer
and a director. In addition, in 1997 and 1998, the Company made unsecured loans
totaling $19,400, each at 6% interest per year, to Kathryn Van Allen, spouse of
David K. Van Allen. All of these notes matured upon consummation of the
Company's initial public offering. The notes became due and payable pursuant to
an agreed upon payment schedule as of January 1, 2000. The notes were forgiven
by the Board of Directors on March 23, 2000. Forgiveness of these notes resulted
in compensation to Mr. and Mrs. Van Allen for the principal, interest and
associated payroll taxes.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires the Company's
executive officers and directors and persons who own more than ten percent of
the Company's Common Stock to file reports of ownership and changes in ownership
of the Company's Common Stock and any other equity securities with the
Securities and Exchange Commission and the NASD. Executive officers, directors
and greater than ten percent shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
The Company's directors and officers and 10% shareholders were not subject
to the requirements of Section 16 of the Securities Exchange Act of 1934 until
February 7, 2000, the effective date of the Company's initial public offering.
Therefore, no Section 16(a) forms were filed for the year ended December 31,
1999. To present date, based solely on its review of the copies of Forms 3, 4
and 5 furnished to the Company, or written representations from certain
reporting persons that no such Forms were required to be filed by such persons,
the Company believes that all its executive officers, directors and greater than
10% shareholders complied with all filing requirements applicable to them,
except that each of the Company's directors and executive officers, Mr. Van
Allen, Mr. Hunt, Mr. Bielicki. Mr. Weller, Mr. Scheinblum, Mr. Horinko,
Mr. Roberts, Mr. Michels, Mr. Farber and Mr. Borden, failed to timely report on
a Form 3 the number of shares of common stock and options beneficially owned by
them on February 7, 2000. Each of these persons filed a Form 3 with the
Securities and Exchange Commission on February 9, 2000.
SOLICITATION OF PROXIES
The accompanying proxy card is solicited on behalf of the Board of Directors
of the Company. Following the original mailing of the proxy materials, proxies
may be solicited personally by officers and employees of the Company, who will
not receive additional compensation for these services. The Company will
reimburse banks, brokerage firms, and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy material to beneficial
owners of Shares.
PROPOSALS OF SHAREHOLDERS FOR THE ANNUAL MEETING AND THE 2001 PROXY STATEMENT
Under the Company's Amended and Restated Bylaws, any shareholder who wishes
to bring any proposal before a meeting of shareholders must give written notice
thereof and certain related information to the Secretary of the Company in a
timely manner. Notice by a shareholder to be timely with respect to proposals to
be presented at an annual meeting must so be received (i) not less than
120 days prior to the date of the Company's proxy statement released to
shareholders for the previous year's annual meeting; or (ii) in the event that
the Company did not hold an annual meeting the
12
<PAGE>
previous year, or if the date of the current year's annual meeting has been
changed by more than 30 days from the date of the previous year's meeting, then
within a reasonable time before the Company begins to print and mail its proxy.
Shareholder proposals intended to be presented at the annual meeting to be
held in 2001 must be received by the Company no later than January 13, 2001 in
order to be included in the proxy statement and related proxy materials under
Rule 14a-8 of the Securities Exchange Act of 1934, as amended. Proposals should
be directed to the Secretary, FASTNET Corporation, Two Courtney Place, Suite
130, 3864 Courtney Street, Bethlehem, PA 18017.
A shareholder's notice to the Secretary shall set forth, as to each matter
the shareholder proposes to bring before the annual meeting, (1) the name and
record address of the shareholder proposing such business and the class or
series and number of shares of capital stock of the Company which are owned
beneficially or of record by such shareholder, (2) a representation that the
shareholder has been a holder of record of stock of the Company entitled to vote
at such meeting for at least one year and that the shareholder intends to hold
the securities through the date of the meeting, and intends to appear in person
or by proxy at the meeting to introduce the business specified in the notice
(3) a brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting, and
(4) any material interest of the shareholder in such business.
Management does not know of any matters which are likely to be brought
before the Annual Meeting other than those referred to in this Proxy Statement.
In the event that any other matters properly come before the Annual Meeting,
however, the persons named in the enclosed proxy will vote in accordance with
their judgment on such matters.
The presiding officer at the Annual Meeting may determine that any
shareholder proposal is not permissible under or was not made in accordance with
the foregoing procedures or is otherwise not in accordance with the law and, if
he so determines, he may refuse to allow the shareholder proposal to be
considered at the Annual Meeting.
A copy of the Company's Annual Report to Shareholders, which includes
financial statements and related data, accompanies this Proxy Statement.
ADDITIONAL INFORMATION
The Company will provide without charge to any person from whom a proxy is
solicited by the Board of Directors, upon the written request of such person, a
copy of the Company's 1999 Annual Report on Form 10-K, including the financial
statements and schedules thereto, required to be filed with the Securities and
Exchange Commission pursuant to Rule 13a-1 under the Securities Exchange Act of
1934, as amended. Such written requests should be directed to Stanley F.
Bielicki, Chief Financial Officer, at the Company's principal offices.
13
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other business which will be presented at
the Annual Meeting. If any other business is properly brought before the Annual
Meeting, it is intended that proxies in the enclosed form will be voted in
respect thereof in accordance with the judgment of the persons voting the
proxies.
It is important that your shares be represented at the Annual Meeting.
Shareholders are urged to mark, date, execute and promptly return the
accompanying proxy card in the enclosed envelope or to vote using the Company's
telephone or Internet voting procedures.
By Order of the Board of Directors,
/s/ David K. Van Allen
David K. Van Allen
Chief Executive Officer
May 12, 2000
Bethlehem, PA
14
<PAGE>
FASTNET
CORPORATION BETHLEHEM, PA 18017
<PAGE>
PROXY FASTNET CORPORATION PROXY
ANNUAL MEETING OF SHAREHOLDERS--FASTNET CORPORATION--JUNE 23, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE!
The undersigned shareholder of FASTNET Corporation (the "Company") hereby
appoints David K. Van Allen and Sonny C. Hunt, or either of them (with full
power to act alone in the absence of the other and with full power of
substitution in each), the proxy or proxies of the undersigned, and hereby
authorizes either of them to represent and to vote as designated on the reverse,
all Shares of Common Stock of the Company held of record by the undersigned at
the close of business on May 5, 2000, at the Annual Meeting of Shareholders to
be held on June 23, 2000, and at any adjournments thereof.
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE
1. Election of Directors
NOMINEES: David K. Van Allen, Sonny C. Hunt, Douglas L. Michels, David J.
Farber, R. Barry Borden and Alan S. Kessman
/ / FOR ALL / / WITHHOLD ALL
(Instructions: To withhold authority to vote for any individual nominee,
strike such nominee's name from the list of nominees.)
2. Approval of an increase in the number of shares authorized for issuance
under the Company's Equity Compensation Plan from 1,000,000 to a total of
3,000,000 shares of common stock of the Company.
/ / FOR / / AGAINST / / ABSTAIN
3. Ratification of the selection of Arthur Andersen LLP as the Company's
auditors for 2000.
/ / FOR / / AGAINST / / ABSTAIN
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
4. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3.
<TABLE>
<S> <C>
CHECK HERE FOR ADDRESS CHANGE / / CHECK HERE IF YOU PLAN TO ATTEND THE MEETING / /
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Date ___________________, 2000
______________________________
______________________________
Signature(s)
Note: Please sign exactly as
name appears hereon. When
Shares are held by joint
tenants, all joint tenants
should sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give the full
title as such. If a
corporation, please sign in
the full corporate name by the
President or other authorized
officer. If a partnership,
please sign in partnership
name by authorized person.
<PAGE>
<TABLE>
<S> <C>
FASTNET [LOGO] 2000 FASTNET CORPORATION
PROXY ELECTRONIC VOTING ALTERNATIVES
IT'S YOUR CHOICE: FAST, CONVENIENT--AND YOUR VOTE IS IMMEDIATELY CONFIRMED AND POSTED
/X/ VOTE BY TELEPHONE OR /X/ VOTE BY INTERNET
USING A TOUCH-TONE PHONE CALL THE TOLL-FREE WWW.PROXYVOTE.COM
NUMBER SHOWN ON THE VOTING INSTRUCTION
FORM.
JUST FOLLOW THESE 4 EASY STEPS: JUST FOLLOW THESE 4 EASY STEPS:
1. Read the accompanying Proxy Statement and 1. Read the accompanying Proxy Statement and
voting instruction form. Keep it handy as a voting instruction form. Keep it handy as a
reference while you vote. reference while you vote.
2. Call the toll-free number shown on your 2. Go to webside WWW.PROXYVOTE.COM
voting instruction form.
3. Enter your 12 digit Control Number located 3. Enter your 12 digit Control Number located
on your voting instruction form. on your voting instruction form.
4. Follow the recorded instructions. 4. Follow the instructions. (YOU WILL ALSO
HAVE THE OPTION TO REGISTER TO RECEIVE FUTURE
MATERIALS VIA THE INTERNET, WHEN AVAILABLE.)
YOUR VOTE IS IMPORTANT! - VOTE 24 HOURS A DAY
IT IS NOT NECESSARY TO RETURN THE PRINTED VOTING FORM IF YOU VOTE BY TELEPHONE OR INTERNET
</TABLE>
