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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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 (S) 240.14a-11(c) or (S) 240.14a-12
Telemonde, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
<PAGE>
Telemonde, Inc.
230 Park Avenue
10th Floor
New York, New York 10169
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD
JUNE 6, 2000
Notice is hereby given that the annual meeting of stockholders of Telemonde,
Inc. ("Telemonde"), will be held on June 6, 2000, at 11:00 a.m., Eastern
Daylight Time, at its principal executive office located at 230 Park Avenue,
10th Floor, New York, New York 10169, for the following purposes:
1. To elect two persons to Class I of the Telemonde board of directors
for a term of three years, or until their successors have been duly
elected and qualified.
2. To ratify the appointment of Moore Stephens, Chartered Accountants, as
Telemonde's independent accountants and auditors for fiscal 2000.
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on May 1, 2000, are
entitled to notice of and to vote at the annual stockholders' meeting and any
adjournment thereof.
The Proxy Statement describing matters to be considered at the Annual Meeting is
attached to this notice.
By Order of the Board of Directors
/s/ Gottfried von Bismarck
---------------------------------------
Count Gottfried von Bismarck, Secretary
<PAGE>
- -------------------------------------------------------------------------------
IMPORTANT
WHETHER YOU EXPECT TO ATTEND THE MEETING OR NOT, PLEASE MARK, SIGN, DATE, AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE,
WHICH DOES NOT REQUIRE ANY POSTAGE. IN THE EVENT YOU ATTEND THE MEETING, YOU
MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON AT ANY TIME BEFORE YOUR
PROXY IS EXERCISED.
- --------------------------------------------------------------------------------
Telemonde, Inc.
230 Park Avenue
10th Floor
New York, New York 10169
PROXY STATEMENT
Annual Meeting of Stockholders
June 6, 2000
INTRODUCTION
This Proxy Statement and accompanying proxy are furnished to record holders
of shares of common stock, $.001 par value per share, of Telemonde, Inc., a
Delaware corporation ("Telemonde"), in connection with the solicitation of
proxies by the Board of Directors to be used at the annual meeting of
stockholders to be held on June 6, 2000, at 11:00 a.m., Eastern Daylight Time,
at the offices of Telemonde, 230 Park Avenue, 10th Floor, New York, New York
10169, and at any adjournment or adjournments thereof. A copy of Telemonde's
1999 Annual Report to Stockholders accompanies, but is not part of, this Proxy
Statement. This Proxy Statement, accompanying proxy and Annual Report will be
sent to stockholders of Telemonde on or about May 5, 2000.
At the annual meeting, the stockholders will vote to elect two members to
the board of directors to serve for a three year term and to ratify the
appointment of Moore Stephens as Telemonde's independent accountants and
auditors for fiscal 2000. The affirmative vote of a plurality of the votes cast
in the election, if a quorum exists, is required to elect the directors, and a
majority of the shares present or represented at the meeting, if a quorum is
present, is required to ratify the appointment of Moore Stephens as Telemonde's
independent accountants and auditors for fiscal 2000. The holder of each share
of common stock is entitled to one vote on all matters submitted before the
annual meeting or any adjournments of the annual meeting. The presence in
person or by proxy of the holders of a majority of the issued and outstanding
shares of the common stock entitled to vote at the annual meeting is necessary
to constitute a quorum.
Stockholders are urged to sign the enclosed form of proxy and return it
promptly in the envelope enclosed for that purpose. Proxies will be voted in
accordance with the stockholders' directions. If no directions are given,
proxies will be voted FOR the election of the nominees named herein to Class I
of the Board of Directors and FOR the ratification of the appointment of Moore
Stephens as Telemonde's independent accountants and auditors for fiscal 2000.
The Board of Directors knows of no other business to be presented at the
annual meeting. If any other business is properly presented, the person named
in the enclosed proxy will use his discretion in voting the shares. The proxy
may be revoked at any time prior to the voting thereof by written request to
Telemonde at 230 Park Avenue, 10th Floor, New York, New York 10169, Attention:
Secretary. The proxy may also be revoked by submission to Telemonde of a more
recently dated proxy. The giving of the proxy will not affect the right of a
stockholder to attend the annual meeting and vote in person.
<PAGE>
The solicitation of proxies in the enclosed form is made on behalf of the
Board of Directors of Telemonde. The entire cost of soliciting these proxies
will be borne by Telemonde. In addition to being solicited through the mails,
proxies may be solicited personally or by telephone, facsimile, electronic mail,
or telegraph by officers, directors, and employees of Telemonde who will receive
no additional compensation for such activities. Arrangements will also be made
with brokerage houses and other custodians, nominees, and fiduciaries to forward
solicitation materials to the beneficial owners of shares held of record by such
persons, who will be reimbursed for their reasonable expenses incurred in such
connection.
A representative of Telemonde's transfer agent, First Union, will count the
votes and act as the inspector of election at the meeting. The inspector of
election will separately tabulate affirmative and negative votes, abstentions
and broker non-votes. Under Delaware law, abstentions will be counted towards
the tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved by a majority of the shares represented in person or by proxy and
entitled to vote.
Proposal 1. ELECTION OF DIRECTORS
Telemonde's Certificate of Incorporation divides the board into three
classes, as nearly equal in number as possible. Directors within each class are
elected to serve three-year terms and approximately one-third of the directors
sit for election at each annual meeting of stockholders. Paul E. Donofrio and
Count Gottfried von Bismarck are nominated to serve as directors in Class I and
will be elected to serve until the 2003 annual meeting of stockholders. Mr.
Bishop and Dr. Tirado are in Class II and have been elected to serve as
directors until the 2001 stockholder meeting. Mr. Maxwell and Mr. Hollo are in
Class III and have been elected to serve as directors until the 2002 stockholder
meeting. Under the Bylaws, the affirmative vote of a plurality of all the votes
cast at the annual meeting, assuming a quorum is present, is sufficient to elect
a director.
Unless otherwise directed in the proxy, the person named in the enclosed
proxy, or his substitute, will vote such proxy for the election of the two
nominees listed below as directors for a three-year term and until their
respective successors are duly elected and qualify. If any nominee at the time
of election is unavailable to serve, a contingency not presently anticipated, it
is intended that the person named in the proxy, or his substitute, will vote for
an alternate nominee who will be designated by the Board. Proxies may be voted
only for the nominees named or such alternates.
The following table sets forth the nominees and the other present members
of the Board of Directors of Telemonde. With respect to each such person, the
table sets forth the age, principal occupation, position presently held with
Telemonde, and the year in which the person first became a director of
Telemonde.
<TABLE>
<CAPTION>
Principal Occupation and Expiration of Initial
Name Age Present Position with Telemonde Term as Director Election
---- --- ------------------------------- --------------- --------
Class I Nominees for Election to Serve as Directors Until the Annual Meeting in 2003
<S> <C> <C> <C> <C>
Paul E. Donofrio 41 Executive Vice President and Chief 2003 N/A
Financial Officer
Count Gottfried A. von 37 Vice President, Secretary and Director 2003 1999
Bismarck
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Principal Occupation and Expiration of Initial
Name Age Present Position with Telemonde Term as Director Election
---- --- ------------------------------- --------------- --------
Class II Present Directors Elected to Serve Until the Annual Meeting in 2001
<S> <C> <C> <C> <C>
Adam N. Bishop 40 President, Chief Executive Officer, 2001 1999
Treasurer and Director
Miguel D. Tirado (1) (2) 56 Director; Dean of Graduate Studies and 2001 1999
Research and Professor of Management
Systems at California State
University, Monterey Bay
Class III Present Directors Elected to Serve Until the Annual Meeting in 2002
Kevin F.H. Maxwell (1) 41 Chairman and Director 2002 1999
Mark G. Hollo (1) (2) 49 Director; Managing Director of Sands 2002 1999
Brothers & Co., Ltd.
</TABLE>
(1) Member of the audit committee.
(2) Member of the compensation committee.
Paul E. Donofrio, 41, Executive Vice President and Chief Financial Officer
Mr. Donofrio joined Telemonde in March of 2000 and has served as Executive Vice
President and Chief Financial Officer since then. Prior to joining Telemonde,
Mr. Donofrio was employed since 1991 with Microwave Power Devices, Inc. and most
recently served as Executive Vice President, Chief Operating and Financial
Officer. MPDI designs, manufactures and sells highly linear, radio frequency
and microwave, power amplifiers and related subsystems to the worldwide wireless
telecommunications market. Before his employment with MPDI, Mr. Donofrio worked
with AIL Systems, Inc., an Eaton Corporation subsidiary which focuses mainly on
aerospace electronics. Prior to working with AIL, Mr. Donofrio was employed
with Cost Free Internal Profit Systems, Inc. as a management consultant.
Count Gottfried A. von Bismarck, 37, Vice President, Secretary and Director
Count von Bismarck joined Telemonde and has served as Vice President, Secretary
and a director of Telemonde since May 1999, when Telemonde Investments Limited
acquired Pac-Rim Consulting, Inc. in a reverse acquisition (Pac-Rim later
changed its name to Telemonde, Inc.). From December 1998 until he joined
Telemonde, he was a Director of London International Development Corporation, an
international investment business with interests in the telecommunications
sector in central Asia and India, among other investments. From September 1997
until December 1998, he was Director of Fund Management for AURORA Kapital
Limited, a German investment business. From May 1995 to August 1997, Count von
Bismarck served as an advisor to the Minister of Privatization of Croatia, where
he developed and implemented the Croatian Mass Privatization Program, strategies
for the privatization of public utilities, including telecommunications, and
infrastructure projects. Prior to his work with the Croatian Minister, from
1993 to 1995 Count von Bismarck worked as a management consultant specializing
in business turn-around management in the former East Germany and in the Czech
Republic. From 1991 to 1993 he worked for the State Privatization Agency
(Treuhandanstalt) of the Federal Republic of Germany, managing a portfolio of 28
large and medium sized companies in the electronics communications sector.
Adam N. Bishop, 40, President, Chief Executive Officer, Treasurer and Director
Mr. Bishop, a co-founder of Telemonde and EquiTel, joined Telemonde Networks
Limited in March 1999, and has served as the President, Treasurer and a director
of Telemonde since May 1999, when Telemonde Investments Limited acquired Pac-Rim
Consulting, Inc. in a reverse acquisition (Pac-Rim later changed its name to
Telemonde, Inc.). From 1996 until 1999, Mr. Bishop served as a consultant to
various telecommunications companies, including EquiTel, to which he provided
advice in relation to the development of its route management business. During
this period, Mr.
3
<PAGE>
Bishop also served for a time as chief executive officer of North American
Gateway, Ltd., a wholesale voice telephony carrier and a division of North
American Gateway, Inc., where he established the parent company's operations in
Europe. From 1991 to 1996 Mr. Bishop was employed by British Telecommunications,
plc, a leading international telecommunications company ("British Telecom"),
where he was head of new business development in international carrier services.
Miguel D. Tirado, Ph.D., 56, Director
Dr. Tirado became a director of Telemonde in November 1999. Since 1986, Dr.
Tirado has been the Dean of Graduate Studies and Research and a Professor of
Management Systems at California State University, Monterey Bay. He has been a
Senior Fellow at the Institute for Defense Education and Analysis at the Naval
Post Graduate School in Monterey, California since 1996. Dr. Tirado also
currently is Managing Director of Tirado and Associates, a management consulting
firm advising clients in California's Silicon Valley. Prior to joining the
faculty of California State University, Monterey Bay, he was the European
Marketing Director for Pacific Telesis, a US-based telecommunications company
and now a subsidiary of SBC Communications, Inc.
Kevin F.H. Maxwell, 41, Chairman and Director
Mr. Maxwell, a co-founder of Telemonde, joined Telemonde and has served as
Chairman of the Board and a director of Telemonde since May 1999, when Telemonde
Investments Limited acquired Pac-Rim Consulting, Inc. in a reverse acquisition
(Pac-Rim later changed its name to Telemonde, Inc.). From 1993 to 1999, Mr.
Maxwell was a self-employed strategic business development consultant affiliated
with Westbourne Communications Limited ("Westbourne"), a UK consulting firm.
Through Westbourne, he provided advice and consultancy services to a range of
telecommunications-related clients. In particular, prior to joining Telemonde,
he provided through Westbourne advice to Telemonde on its early development and
on corporate finance issues. Until 1991, Mr. Maxwell was Deputy Chairman and
Deputy Chief Executive Officer of Maxwell Communication Corporation plc, and its
subsidiary Macmillan, Inc. and a director of Mirror Group Newspapers (together,
the "Maxwell Group"). The Maxwell Group, which was controlled by Mr. Maxwell's
late father, Robert Maxwell, collapsed in December 1991. In 1992, Mr. Maxwell
was declared bankrupt as a result of the civil litigation arising from the
collapse of the Maxwell Group. This bankruptcy was discharged in 1995. In 1996,
Mr. Maxwell was acquitted of all criminal charges related to the collapse of the
Maxwell Group.
Mark G. Hollo, 49, Director
Mr. Hollo became a director of Telemonde in November 1999. Mr. Hollo has served
as a Managing Director of Investment Banking for Sands Brothers & Company, Ltd.,
a securities and investment banking firm and member of the New York Stock
Exchange, since 1992. Pursuant to an engagement letter with Sands Brothers
dated October 27, 1999, as amended, Telemonde has agreed to use its best efforts
to elect a designee of Sands Brothers to the Telemonde Board for a period of
three years. Mr. Hollo has been appointed to the Board as such designee.
The Board currently consists of Messrs. Maxwell, Bishop, von Bismarck,
Hollo and Dr. Tirado. At the annual meeting, successors to each director whose
term expires at such meeting will be elected to serve for three-year terms or
until their successors are duly elected and qualified. The Board has the power
to appoint the officers of Telemonde. Each officer will hold office for such
term as may be prescribed by the Board and until such person's successor is
chosen and qualified or until such person's death, resignation, or removal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE
ELECTION OF DIRECTORS AS SET FORTH IN THIS PROXY STATEMENT.
Board Relationships. We are not aware of any family relationships between any
directors or executive officers of Telemonde. No director of Telemonde
currently serves as a director of any other United States public company.
Board Committees. The Board of Directors has appointed an Audit Committee and a
Compensation Committee.
Audit Committee. The Audit Committee was initially established in November of
- ---------------
1999 and consists of Mr. Maxwell, Mr. Hollo and Dr. Tirado. The Audit Committee
has the authority and responsibility to:
4
<PAGE>
. Hire one or more independent chartered accountants to audit
Telemonde's books, records and financial statements and to review
Telemonde's systems of accounting (including Telemonde's systems of
internal control);
. Discuss with such independent chartered accountants the results of
such audit and review;
. Conduct periodic independent reviews of the systems of accounting
(including systems of internal control); and
. Make reports periodically to the full Board of Directors with respect
to its findings.
Compensation Committee. The Compensation Committee initially was established in
- ----------------------
November 1999 and consists of Mr. Hollo and Dr. Tirado. The Compensation
Committee is responsible for fixing the compensation of the executive officers
of Telemonde and will decide other compensation matters including the operation
of any stock option plans, management bonus plans, and awards.
Meetings. The Board held three meetings during Telemonde's last fiscal year.
Mr. Bishop attended 67% (2 out of 3) of the meetings held. Mr. Hollo and Dr.
Tirado were directors for only two meetings during 1999 and each attended 50% (1
out of 2) of those meetings. The Audit Committee and Compensation Committee did
not meet during the last fiscal year.
Proposal 2. RATIFICATION OF THE APPOINTMENT OF MOORE STEPHENS AS INDEPENDENT
ACCOUNTANTS AND AUDITORS FOR FISCAL 2000
The Board of Directors has appointed Moore Stephens, Chartered Accountants,
as Telemonde's independent accountants and auditors for fiscal 2000. Moore
Stephens, Chartered Accountants, served as independent accountants and auditors
of Telemonde for the year ended December 31, 1999. Representatives of the firm
will be present at the annual meeting, have an opportunity to make a statement
if they so desire, and are expected to be available to respond to appropriate
questions.
The affirmative vote of the holders of a majority of the outstanding shares
of common stock represented at the annual meeting and entitled to vote is
required to ratify the appointment of Moore Stephens, Chartered Accountants, as
Telemonde's independent accountants and auditors for fiscal 2000.
The Board of Directors recommends voting FOR ratification of the
appointment of Moore Stephens, Chartered Accountants, as Telemonde's independent
accountants and auditors for fiscal 2000.
EXECUTIVE OFFICERS
------------------
Telemonde and its subsidiary EquiTel Communications Limited have the following
executive officers in addition to Messrs. Maxwell, Bishop and Donofrio (whose
descriptions are detailed above in Proposal 1. Election of Directors).
Name Age Present Position
---- --- ----------------
Andrew J. Hedges 32 Executive Vice President
and Chief Operating Officer
Harry D. Pomeroy 45 President of EquiTel
Nicholas J. Topham 42 Chief Executive Officer of EquiTel
Larry S. Trachtenberg 47 Executive Vice President and
Managing Director of EquiTel
5
<PAGE>
Andrew J. Hedges, 32, Executive Vice President and Chief Operating Officer
Mr. Hedges joined Telemonde in November 1999 and has served as Chief Operating
Officer since then. Prior to joining Telemonde, he gained substantial
experience in commercial operations, sales and marketing and international
services from his previous positions at leading telecommunications companies.
From 1997 to 1999, he was the Managing Director of First Telecom plc, the
largest independent telecommunications retailer in the United Kingdom. From
1994 to 1997, he was Commercial Operations Manager in the United Kingdom for MFS
WorldCom, now MCI WorldCom, a leading international telecommunications company
("MCI WorldCom"). Prior to joining MCI WorldCom, he worked at Gemini Submarine
Cable Systems Limited, a trans-Atlantic fiber-optic cable construction and sales
company, and British Telecom.
Harry D. Pomeroy, 45, President of EquiTel
Mr. Pomeroy, a co-founder of Telemonde and EquiTel, joined EquiTel in September
1998 upon its incorporation and has served as President and a Director of
EquiTel since then. He joined Telemonde in November 1999, upon the acquisition
of EquiTel by Telemonde. He is one of the small number of experts with
extensive experience and knowledge of the traditional carrier marketplace, new
telecom carriers, and the emerging wholesale telecommunications marketplace.
Prior to joining EquiTel, Mr. Pomeroy was the head of Commercial Carrier
Operations at MCI WorldCom from 1996 to 1998. From 1985 to 1996 he held various
sales and marketing positions at British Telecom, becoming Group Sales Manager
for Global Accounts in 1993 and later the head of International Carrier
Marketing Operations.
Nicholas J. Topham, 42, Chief Executive Officer of EquiTel
Mr. Topham joined EquiTel in May 1999 and has served as Chief Executive Officer
and a Director of EquiTel since then. He joined Telemonde in November 1999,
upon the acquisition of EquiTel by Telemonde. He specializes in international
wholesale communications and telecommunications strategic development. Prior to
joining EquiTel, Mr. Topham was a director of the Global Communications and
Entertainment Practice of Arthur Andersen, a leading international accounting
firm from 1997 to 1999. Prior to joining Arthur Andersen, he spent 13 years at
British Telecom from 1984 to 1997, becoming head of Business Development and
Strategy for International Wholesale Services.
Larry S. Trachtenberg, 47, Executive Vice-President and Managing Director of
EquiTel
Mr. Trachtenberg, a co-founder of EquiTel, joined EquiTel in September 1998 and
has served as Managing Director of EquiTel since November 1998. He joined
Telemonde in November 1999, upon the acquisition of EquiTel by Telemonde. Mr.
Trachtenberg has extensive management experience in the telecommunications,
Internet, news media and financial services industries. Prior to joining
EquiTel, from 1992 to 1998 he was a consultant to a number of companies,
including Telemonde, and prior to that held senior management positions in
communications and financial services businesses. In 1991, Mr. Trachtenberg was
Managing Director of Maxwell Central & East European Partners plc, a subsidiary
of Robert Maxwell Group plc., a private company. The Maxwell Group, controlled
by the late Mr. Robert Maxwell, collapsed in December 1991. In 1996, Mr.
Trachtenberg was acquitted of all criminal charges related to the collapse of
the Maxwell Group.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee did not meet in 1999.
6
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares Telemonde's share price
performance on the OTC Bulletin Board to the NASDAQ Composite and the Bloomberg
U.S. Telecom Services Index. Share price performance is from May 19, 1999 (the
date Telemonde's common stock began trading as "TLMD" following the acquisition
of Pac-Rim Consulting, Inc.) through December 31, 1999.
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Total Return Analysis
<S> <C> <C>
5/19/99 12/31/99
- ---------------------------------------------------------------------------------
Telemonde, Inc. $ 100.00 $ 50.52
- ---------------------------------------------------------------------------------
Bloomberg U.S. Telecom Services Index $ 100.00 $ 108.47
- ---------------------------------------------------------------------------------
Nasdaq Composite $ 100.00 $ 158.16
- ---------------------------------------------------------------------------------
</TABLE>
OUTSTANDING VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS
The common stock is the only class of outstanding voting securities. Only
holders of common stock of record on May 1, 2000 (the "Record Date"), are
entitled to notice of and to vote at the annual meeting. As of April 19, 2000
there were 80,775,784 shares of common stock issued and outstanding. The holder
of each share of common stock is entitled to one vote on all matters submitted
before the annual meeting or any adjournments of the annual meeting.
The following table provides you with certain information, as of April 19,
2000 regarding beneficial ownership of Telemonde's common stock by: (1) each of
our directors and executive officers; (2) each person whom we believe
beneficially owns more than 5% of our outstanding voting stock; and (3) all
executive officers and directors as a group. Except as otherwise indicated, each
stockholder listed below has sole voting and investment power as to the shares
owned by that person.
7
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of Percentage
Name and Address (1) Beneficial Ownership (2)(3) of Class (4)
- ------------------------------------------------- ------------------------------------- -------------------------
<S> <C> <C>
Kevin F.H. Maxwell (5) 3,183,492 3.8%
Adam N. Bishop 989,583 1.2
Paul E. Donofrio (6) 1,400,000 1.7
Andrew J. Hedges ---- ----
Count Gottfried A. von Bismark ---- ----
Harry D. Pomeroy (7) 834,583 1.0
Nicholas J. Topham 682,812 *
Larry S. Trachtenberg (8) 371,902 *
Mark G. Hollo (9) 946,429 1.1
Miguel D. Tirado (10) 71,429 *
Intelecom Limited (11) 19,955,000 24.7
Lake Building, 1st Floor
Wickhams, Cay One
Road Town, Tortola
British Virgin Islands
Fast Firm Limited 9,917,356 12.3
7 - 10 Chandos Street
London England W1
Communications Collateral Limited (12) 9,255,544 11.5
The Tropic Isle Building
Road Town, Tortola
British Virgin Islands
All Directors and Executive Officers as a group 8,480,230 10.5
(10 persons)
</TABLE>
* Less than one percent of Telemonde common stock.
(1) If no address is given, the named individual is an executive officer or
director of Telemonde, whose business address is: 40 Portman Square, 4th
Floor, London, W1M 9DE United Kingdom.
(2) Shares of common stock that a person has the right to acquire within 60
days of April 19, 2000 are deemed outstanding for computing the percentage
ownership of the person having the right to acquire such shares, but are
not deemed outstanding for computing the percentage ownership of any other
person.
(3) Beneficial ownership for certain named person includes the number of shares
initially issued to him upon the acquisition of EquiTel by Telemonde, but
does not include shares that may be issued to each person as additional
consideration paid to former EquiTel stockholders, as described below in
the section entitled, "Certain Relationships and Related Transactions."
(4) As of April 19, 2000, there were 80,775,784 shares of common stock issued
and outstanding.
(5) Mr. Maxwell's beneficial ownership includes 2,756,790 shares of Telemonde
common stock attributable to Mr. Maxwell because of his right to purchase
such shares from Intelecom Corporation Limited. Mr. Maxwell's beneficial
ownership also includes 426,702 shares of Telemonde common stock held by
Telcoworld Limited, in which Mr. Maxwell has a 33.4% ownership interest.
(6) Mr. Donofrio's beneficial ownership includes 1,400,000 shares of Telemonde
common stock, which Mr. Donofrio has the option to purchase under his
employment agreement for $.50 per share after June 1, 2000.
(7) All shares attributed to Mr. Pomeroy are held by his wife.
(8) All shares attributed to Mr. Trachtenberg are held by his wife.
8
<PAGE>
(9) Mr. Hollo's beneficial ownership includes 71,429 shares authorized for
issuance to Mr. Hollo as compensation for his membership on the Board of
Directors, which number represents $250,000 in shares of common stock,
valued at $3.50 per share. Mr. Hollo's ownership also includes 875,000
shares beneficially owned by Black Trust, beneficiaries of which are
descendants and other family members of Mr. Hollo. Mr. Hollo is agent for
Black Trust through a Power of Attorney.
(10) Dr. Tirado's beneficial ownership includes 71,429 shares authorized for
issuance to Dr. Tirado as compensation for his membership on the Board of
Directors, which number represents $250,000 in shares of common stock,
valued at $3.50 per share.
(11) The beneficial owner of Intelecom Limited is Rhone Financial Indemnity Re
Ltd., an Irish company, which formerly was the sole shareholder of
Telemonde Investments Limited and which created Intelecom as a vehicle for
its ownership of Telemonde shares. Intelecom has granted or will grant to
certain persons, including Mr. Maxwell, the right to purchase Telemonde
shares from Intelecom.
(12) The beneficial ownership of Communications Collateral Limited includes
6,160,958 shares of Telemonde common stock issuable upon the exercise of a
warrant for the purchase of such shares at an exercise price of $2.70, as
amended by a Forbearance Agreement between Communications Collateral and
Telemonde; this number is equal to seven percent of Telemonde's issued and
outstanding common stock (on a fully diluted basis) as of April 19, 2000.
The warrant presently is exercisable, and will remain exercisable until the
third anniversary of the closing date of the first transaction that raises
additional capital for Telemonde of at least $10 million through the sale
of equity securities. The beneficial ownership of Communications
Collateral also includes 3,094,585 shares of Telemonde common stock issued
and issuable under a penalty provision in a registration rights agreement
between Telemonde and Communications Collateral.
9
<PAGE>
EXECUTIVE COMPENSATION
The table and notes below show the annual, long-term and other compensation
for services in all capacities to Telemonde, EquiTel, a wholly owned subsidiary
of Telemonde, and their subsidiaries paid during the year ended December 31,
1999 to the Chief Executive Officer and the other four most highly compensated
executive officers of Telemonde (the "named executive officers"). No
compensation was paid by Telemonde or any of its subsidiaries from the
organization of Telemonde Investments Limited from March 10, 1998 through
December 31, 1998.
<TABLE>
<CAPTION>
Annual Compensation
- ---------------------- ------------------------------------- -------- ----------------------------------
Year Salary (1) Bonus (1)
Name Position ($) ($)
- ---------------------- ------------------------------------- ------- ---------- ---------
<S> <C> <C> <C> <C>
K.F.H. Maxwell (2) Chairman 1999 220,530 0
A.N. Bishop (2) President and Chief 1999 198,144 0
Executive Officer
H.D. Pomeroy (3) President of EquiTel 1999 265,302 0
N. J. Topham (3) Chief Executive Officer 1999 181,969 0
of EquiTel
L.S. Trachtenberg (3) Managing Director of 1999 218,799 0
EquiTel
</TABLE>
(1) Compensation figures shown reflect the conversion of compensation paid in
UK pounds sterling into U.S. dollars at $1.62 per (Pounds)1.00, the
exchange rate in effect on December 31, 1999.
(2) Disclosure for Mr. Maxwell and Mr. Bishop reflects compensation paid from
the date each became an executive officer (May 1999 for Mr. Maxwell, and
March 1999 for Mr. Bishop) until December 31, 1999.
(3) Disclosure for Mr. Pomeroy, Mr. Topham and Mr. Trachtenberg reflects
compensation paid to each by EquiTel during 1999.
The compensation amounts shown above represents the salary and other
compensation paid by Telemonde or EquiTel to the named individuals in the year
ended December 31, 1999. The table excludes any payments made for consulting
services provided by individuals prior to joining Telemonde or EquiTel. Any
such payments are described below under the section, "Certain Relationships and
Related Transactions."
EMPLOYMENT CONTRACTS
Telemonde has entered into an employment agreement with Mr. Maxwell,
retaining him as Telemonde's Chairman. The term of the agreement runs until
June 30, 2002, after which either Mr. Maxwell or Telemonde may terminate the
agreement with six months' notice. The agreement provides for a basic salary
for Mr. Maxwell of (Pounds)240,000 per year, equal to approximately $389,000 at
the exchange rate on December 31, 1999, and health insurance for Mr. Maxwell and
his family. No provision has been made in the agreement for bonus payments,
stock option grants, or pension contributions to Mr. Maxwell.
Telemonde Networks Limited has entered into an employment agreement with
Mr. Bishop, retaining him as President and Chief Executive Officer of Telemonde,
Inc. and Telemonde Networks Limited. The term of the agreement runs until June
30, 2002, after which either Mr. Bishop or Telemonde Networks Limited may
terminate the agreement with six months' notice. The agreement provides for a
basic salary for Mr. Bishop of (Pounds)240,000 per year, equal to approximately
$389,000 at the exchange rate on December 31, 1999, and health insurance for Mr.
Bishop and his
10
<PAGE>
family. No provision has been made in the agreement for bonus payments, stock
option grants, or pension contributions to Mr. Bishop.
Telemonde entered into an executive service agreement with Mr. Donofrio,
retaining him as Executive Vice President and Chief Financial Officer of
Telemonde. The term of his agreement runs until March 1, 2003, after which
either Mr. Donofrio or Telemonde may terminate the agreement with six months'
notice. The agreement provides for a basic salary for Mr. Donofrio of $250,000
per year. Mr. Donofrio also received a $40,000 signing bonus upon joining
Telemonde and Mr. Donofrio is guaranteed a bonus equal to $150,000 within 60
days of the start of each calendar year commencing January 1, 2001. An
additional bonus of $50,000 may be paid to Mr. Donofrio each year commencing in
2001 upon achievement of financial objectives of Telemonde, which objectives
must be mutually agreed upon by Mr. Donofrio and Telemonde. Mr. Donofrio also
receives life insurance, long-term disability insurance, an automobile and
gasoline allowance of $700 per month and medical and dental coverage for him and
his immediate family. Telemonde granted Mr. Donofrio nonqualified options to
purchase an aggregate 5,800,000 shares of common stock at $.50 per share. Mr.
Donofrio's options vest in increments, beginning with 1,400,000 shares of common
stock on June 1, 2000. On September 1, 2000, Mr. Donofrio's option to purchase
400,000 shares of common stock vests and thereafter his options to purchase
400,000 shares of common stock vest every three months until March 1, 2003.
Prior to March 1, 2003, if Mr. Donofrio is terminated for cause or resigns, any
remaining options that have not vested will expire, but if Mr. Donofrio is
terminated for any other reason, all remaining options vest immediately.
Additionally, in the event that Telemonde sells substantially all of its assets
or there is a "change in control" of Telemonde during Mr. Donofrio's employment,
all of Mr. Donofrio's options immediately vest and become exercisable. "Change-
in-control" is defined as (i) the acquisition of 50% or more of Telemonde's
voting power, (ii) the acquisition of 25% - 50% of Telemonde's voting power by
any person and the adoption by the Board of a resolution declaring a change-in-
control has occurred or (iii) a merger, consolidation, reorganization,
recapitalization or similar transaction upon which 50% of the voting power of
the surviving corporation is held by persons other than the former stockholders
of Telemonde.
At the time of Telemonde's acquisition of EquiTel, EquiTel entered into
employment agreements with Mr. Pomeroy, Mr. Topham and Mr. Trachtenberg,
retaining them as President, Chief Executive Officer, and Executive Vice
President and Managing Director, respectively, of EquiTel. The term of each
agreement runs until June 30, 2002. The agreement between EquiTel and Mr.
Pomeroy provides for a basic salary of (Pounds)240,000 per year, equal to
approximately $389,000 at the exchange rate on December 31, 1999. The agreement
with Mr. Topham provides for a basic salary of (Pounds)225,000 per year, equal
to approximately $364,500 at the exchange rate on December 31, 1999. The
agreement provides with Mr. Trachtenberg for a basic salary of (Pounds)185,000
per year, equal to approximately $300,000 at the exchange rate on December 31,
1999. No provision has been made in any of these agreements for bonus payments,
stock option grants, or pension contributions.
BOARD COMPENSATION AND OTHER MATTERS
Non-employee directors, including Mr. Hollo and Dr. Tirado, will receive
$100,000 per year for their services. In addition, they have the right to
receive common stock worth $250,000 upon appointment to the board, and
additional stock distributions equal to $250,000 for each additional year they
serve on the board of directors. Thus, because Telemonde has a classified board
and each director serves a three-year term, total compensation for each non-
employee director for his three-year term is $300,000 in cash and $750,000 of
shares of common stock. Other than reimbursements for reasonable expenses
incurred, directors do not receive any additional compensation for serving on
board committees. Employee directors do not receive any additional compensation
for acting as directors.
Telemonde has a consulting agreement with Count Gottfried von Bismarck
under which he is responsible for developing Telemonde's business relationships
in German-speaking areas. The term of the agreement is one year and provides
for a fee of $120,000 per year, payable in monthly installments. The agreement
automatically is renewed for additional three-month terms, unless notice of
termination is given by Telemonde or Count von Bismarck 60 days before the
expiration of the then-current term.
The directors of Telemonde Investments Limited, the predecessor to
Telemonde, Inc., from its inception were Mr. Michael Collins and Ms. Susan
Williams. Telemonde Investments Limited made payments totaling $225,000 in 1999
and $37,000 in 1998 for directors and consulting services to companies
controlled by Mr. Collins.
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<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board was initially established in
November of 1999 and consists of Mr. Hollo and Dr. Tirado. Neither Mr. Hollo
nor Dr. Tirado are or ever have been officers or employees of Telemonde. No
executive officer of Telemonde serves as a member of the board of directors or
Compensation Committee of another entity that has one or more executive officers
that serve as a member of the Telemonde board or the Telemonde Compensation
Committee.
Prior to the appointment of the Compensation Committee in November 1999,
executive compensation was set by Telemonde's full board of directors. Although
neither the full board of directors nor the Compensation Committee has a
specific compensation policy which is used to establish executive compensation,
when making compensation decisions, the Compensation Committee considers such
factors as:
. Telemonde's need to recruit, motivate and retain high quality
executives; and
. Market salary comparisons for experienced executives in the
telecommunications industry.
Mr. Hollo is a director and stockholder of Telemonde and a Managing
Director of Sands Brothers & Co., Ltd. Prior to Mr. Hollo's appointment to
Telemonde's Board, Telemonde engaged Sands Brothers to provide financial and
consulting services. Pursuant to that agreement, Sands Brothers will receive a
placement fee equal to 10% of the total consideration raised in any financing
facilitated by Sands Brothers. Sands Brothers or its designee(s) will also have
the right to subscribe, at par value, for 1,750,000 shares of Telemonde common
stock upon the completion of the first tranche of financing. Sands Brothers will
also have the right to subscribe, at par value, for an additional 200,000 shares
of common stock for each $1,000,000 of financing facilitated by Sands Brothers
and accepted by Telemonde. Telemonde has also agreed to pay Sands Brothers a
transaction fee equal to five percent of the consideration paid in any completed
acquisition or business transaction that was facilitated by Sands Brothers. In
addition to Mr. Hollo, trusts established for the benefit of the families of
certain affiliates of Sands Brothers received, in the aggregate, 875,000 shares
of Telemonde common stock.
CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND LEGAL PROCEEDINGS
EquiTel and its Acquisition
Telemonde and EquiTel have had a close relationship since their respective
inceptions, on March 10, 1998 and September 17, 1998. Even before Telemonde's
acquisition of EquiTel on November 8, 1999, their principals and management
overlapped, they shared premises and services and, in circumstances where it was
mutually beneficial, they made joint presentations to potential customers.
However, prior to the acquisition, the two businesses were legally separate.
Therefore, a significant part of the following discussion relates to
transactions between the two companies and their respective management teams.
Acquisition of EquiTel. Telemonde acquired EquiTel Communications Limited on
November 8, 1999. EquiTel's total assets at September 30, 1999 were $1,830,000.
The maximum aggregate value of the consideration payable by Telemonde to the
stockholders of EquiTel is $69 million. Telemonde's valuation of EquiTel was
based on the historic price/earnings ratios of similar telecommunication
companies, applied to the anticipated future after-tax earnings of EquiTel. The
maximum aggregate value of the consideration payable reflect the fact that the
consideration was payable wholly in Telemonde shares and that the majority of
the consideration was deferred and dependent on additional consideration payable
to stockholders of EquiTel upon EquiTel's achievement of anticipated future
earnings.
At the time of the acquisition, Mr. Maxwell and Mr. Bishop were executive
officers and directors of Telemonde and were beneficial owners of EquiTel
shares. In view of Mr. Maxwell's and Mr. Bishop's potential conflicts of
interest regarding the acquisition of EquiTel, Telemonde's negotiations with
EquiTel were conducted, and the terms of the acquisition were approved by, Count
von Bismarck. Count von Bismarck and the board of directors of Telemonde
appointed Gouldens, Solicitors, London, United Kingdom to advise Telemonde on
the legal and
12
<PAGE>
contractual aspects of the acquisition, and appointed Brown, Shipley & Co.,
Investment Bankers, London, United Kingdom to advise Telemonde on the valuation
of and consideration in respect of EquiTel.
The purchase price for the acquisition of EquiTel will be paid as follows:
. On November 8, 1999, the initial consideration of $19 million was
satisfied by the issuance to the EquiTel stockholders of 4,947,917
restricted shares of common stock of Telemonde.
. On approximately June 30, 2001, a sum not exceeding $30 million in the
aggregate will be paid to the former EquiTel stockholders, in
proportion to their respective interests in EquiTel, by the issue of
restricted shares of Telemonde common stock.
. On approximately June 30, 2002, a sum not exceeding $50 million, less
the amount paid on June 30, 2001, will be paid to the former EquiTel
stockholders in the aggregate, in proportion to their respective
interests in EquiTel, by the issue of restricted shares of Telemonde
common stock.
The deferred consideration to be paid in future years to the EquiTel
stockholders will be decreased if EquiTel does not achieve certain specified
performance goals during 2000 and 2001. The number of Telemonde shares to be
issued will be determined by a previously determined formula, based upon the
market price of Telemonde common stock over a fixed number of trading days prior
to issuance. Using this formula, the value of the shares issued as initial
consideration was set at $3.84 per share.
Interests of Certain Persons in EquiTel. As a result of EquiTel acquisition,
Mr. Maxwell and Mr. Bishop, who were beneficial owners of EquiTel, have received
shares of Telemonde common stock, and are entitled to receive additional shares
of Telemonde common stock when additional consideration is paid to the former
EquiTel stockholders. Mr. Pomeroy, Mr. Topham and Mr. Trachtenberg, who were
executive officers, directors and beneficial owners of EquiTel shares prior to
its acquisition, also have received shares of Telemonde common stock and are
entitled to receive additional shares of Telemonde common stock when additional
consideration is paid to the former EquiTel stockholders.
The table below sets out the beneficial ownership in EquiTel previously
owned by Telemonde's executive officers, and the maximum amount of value of
shares in Telemonde Inc. to which they might be entitled.
<TABLE>
<CAPTION>
Maximum Aggregate
Initial Consideration Consideration Resulting
Ownership in EquiTel (1) Received to be Received (2) Beneficial
Shares Percentage Shares Value Shares Value Ownership in
Name (#) (#) ($) (#) ($) Tele-monde (3)
<S> <C> <C> <C> <C> <C> <C> <C>
K.F.H. Maxwell (4) 860 8.6% 426,702 1,638,536 5,485,526 5,938,536 3.9%
A.N. Bishop 2,000 20.0 989,583 3,800,000 12,754,288 13,800,000 9.0
H.D. Pomeroy 2,000 20.0 989,583 3,800,000 12,754,288 13,800,000 9.0
N. J. Topham 1,380 13.8 682,812 2,622,000 8,800,459 9,522,000 6.0
L. S. Trachtenberg 980 9.8 484,402 1,860,104 6,249,108 6,760,104 4.1
</TABLE>
(1) EquiTel has an authorized share capital of 10,000 Ordinary Shares of
(Pounds)1 each, which were issued to EquiTel's beneficial owners at the
time of its inception and were purchased by Telemonde on November 8, 1999
at the time of the acquisition of EquiTel by Telemonde.
(2) These columns set out the aggregate number of shares of Telemonde common
stock that would be issued to the named former stockholders of EquiTel and
the value of the stockholdings of each, assuming that the former EquiTel
stockholders are entitled to the full $50,000,000 in additional
consideration and assuming that the shares of Telemonde common stock so
issued were valued at $.85, the closing price of a share of Telemonde
common stock on April 10, 2000.
13
<PAGE>
(3) Assuming the issuance of an aggregate of an additional 58,823,529 shares of
Telemonde common stock to the former stockholders of EquiTel (equal to
$50,000,000 divided by $.85), and assuming no other issuance of Telemonde
common stock following April 10, 2000. The resulting beneficial ownership
reflects only Telemonde shares received for each individual's interest in
EquiTel and does not reflect Telemonde shares held by such individuals in
transactions not relating to EquiTel.
(4) Mr. Maxwell holds a 33.4% interest in Telcoworld Limited, which held a
25.8% interest in EquiTel. Telcoworld Limited held 2,580 shares in EquiTel;
thus, Mr. Maxwell's equity interest in Telcoworld equaled 860 shares of
EquiTel. Telcoworld Limited currently holds 1,277,552 shares of Telemonde
common stock; thus, Mr. Maxwell's equity interest in Telcoworld equals
426,702 shares of common stock in Telemonde. The maximum aggregate number
of shares Telcoworld Limited will receive if the former EquiTel
stockholders are entitled to the full $50,000,000 in additional
compensation is 16,454,022 shares; thus, Mr. Maxwell would be entitled to
receive 5,485,526 shares of Telemonde common stock. Mr. Maxwell held no
individual beneficial ownership in EquiTel.
Other Relationships with EquiTel. EquiTel provided management and
administrative services for the offices it shared with Telemonde, for which it
was reimbursed an aggregate of $530,000 by Telemonde before the acquisition.
Telemonde also paid EquiTel a total of $898,000 for commissions on sales of
bandwidth earned by EquiTel during 1998; no commissions were paid to EquiTel
during 1999.
Mr. Maxwell was a director of EquiTel from November 18, 1998 to May 24,
1999. While Mr. Maxwell was a director and beneficial owner of EquiTel, EquiTel
engaged Westbourne Communications Limited to provide certain consulting
services. Mr. Maxwell, through Westbourne, served as a consultant to EquiTel,
providing advice on its early development and on corporate finance issues. The
agreement between EquiTel and Westbourne terminated when Mr. Maxwell was
appointed Chairman and a director of Telemonde. Through May 24, 1999, EquiTel
paid Westbourne a total of $138,600, of which $77,550 was attributable to Mr.
Maxwell's services.
During 1998 Adam Bishop and his wife were paid $122,513 for consulting
services provided to EquiTel in connection with the initiation and development
of EquiTel's route management business. In addition, Harry Pomeroy served as
Chairman and Director of EquiTel from its inception until the date of the
acquisition. In 1998, while serving in this capacity, Mr. Pomeroy received
$90,338 as compensation for management and consulting relating to the
introduction and development of EquiTel's route management business services.
Rhone Financial
EquiTel has a loan of $1,000,000 from Rhone, the founding shareholder of
Telemonde Investments Limited. These loans became obligations of Telemonde upon
the acquisition of EquiTel, which resulted in EquiTel becoming a wholly-owned
subsidiary of Telemonde. This loan bears no interest, is unsecured, and is due
and payable in full when EquiTel's resources permit. Telemonde believes that
the terms of this loan are at least as favorable to Telemonde as could be
obtained by arms-length bargaining with an unrelated party.
Westbourne Communications Limited
Mr. Maxwell has been Chairman and a director of Telemonde since May 1999.
Prior to his appointment to these posts, Telemonde engaged Westbourne
Communications Limited to provide certain consulting services, in particular
advising on the early development of Telemonde and on corporate finance matters.
Mr. Maxwell, through Westbourne, served as a consultant to Telemonde prior to
his appointment as Chairman and director. Prior to May 24, 1999, Telemonde had
paid Westbourne a total of $452,450 for its services, of which $158,400 was
attributable to services rendered by Mr. Maxwell. On May 24, 1999, when Mr.
Maxwell became Chairman and director of Telemonde, the agreement between
Telemonde and Westbourne in respect of the services of Mr. Maxwell terminated.
Westbourne continues to provide Telemonde with consulting services, which
are governed by a new agreement signed on June 20, 1999. The agreement provides
for Telemonde to pay Westbourne (Pounds)12,000 per month, equal to approximately
$230,000 per year. The term of the agreement is for one year; it may be, but is
not required to be, renewed by the parties. Telemonde has not determined whether
it will seek to renew the agreement. Mr. Kevin
14
<PAGE>
Maxwell does not benefit from this agreement, nor does he provide any services
under it. Amongst Westbourne's consultants is Mr. Ian R.C. Maxwell, the brother
of Mr. Kevin Maxwell.
Telemonde Relationships
Prior to joining Telemonde as President in March 1999, Mr. Bishop was a
consultant for North American Gateway. North American Gateway signed two sales
contracts with Telemonde in April and May 1998. Mr. Bishop declared his
interest at the time and took no part in the negotiation of or decision on the
Telemonde contracts.
Mr. Trachtenberg has been Executive Vice President and Managing Director of
EquiTel since November 1998. During 1998, through Hyperactive Productions, Mr.
Trachtenberg provided consulting services to Telemonde. Telemonde paid
Hyperactive Productions $141,526 for services rendered during 1998, of which
$70,763 was attributable to Mr. Trachtenberg's services.
Mr. Hollo is a director and shareholder of Telemonde and a Managing
Director of Sands Brothers & Co., Ltd. Prior to Mr. Hollo's appointment to
Telemonde's Board, Telemonde engaged Sands Brothers to provide financial and
consulting services. Pursuant to that agreement, Sands Brothers will receive a
placement fee equal to 10% of the total consideration raised in any financing
facilitated by Sands Brothers. Sands Brothers or its designee(s) will also have
the right to subscribe, at par value, for 1,750,000 shares of Telemonde common
stock upon the completion of the first tranche of financing. Sands Brothers will
also have the right to subscribe, at par value, for an additional 200,000 shares
of common stock for each $1,000,000 of financing facilitated by Sands Brothers
and accepted by Telemonde. Telemonde has also agreed to pay Sands Brothers a
transaction fee equal to five percent of the consideration paid in any completed
acquisition or business transaction that was facilitated by Sands Brothers. In
addition to Mr. Hollo, trusts established for the benefit of the families of
certain affiliates of Sands Brothers received, in the aggregate, 875,000 shares
of Telemonde common stock.
Communications Collateral Limited
Communications Collateral Limited is an investment company, owned by
fourteen third-party investors, with which Telemonde has no relationship, other
than pursuant to the agreements set forth below. In April 1999, Telemonde,
through its now wholly owned subsidiary, Telemonde Investments Limited, entered
into a series of agreements with Communications Collateral Limited, including,
among others, agreements for:
. the sale of an IRU for bandwidth to Communications Collateral Limited
for $6.5 million;
. the grant of an option to Communications Collateral Limited which, among
other things, required Telemonde to repurchase the bandwidth for $6.5
million upon Communications Collateral's Limited request;
. a $1 million loan by Communications Collateral Limited to Telemonde due
in August 1999;
. the issuance to Communications Collateral Limited of a warrant for an
additional 7% of the shares of Telemonde, Inc., as calculated
immediately prior to a Telemonde equity offering that raises at least
$10 million;
. the registration with the SEC of such shares issued and issuable to
Communications Collateral Limited within six months of the Pac-Rim
acquisition or the issuance of up to 6% of the issued share capital of
Telemonde on a continuing basis for one year or until all shares
granted pursuant to these agreements are registered.
On January 13, 2000 Telemonde signed a Forbearance Agreement with
Communications Collateral Limited. Under this Agreement, Communications
Collateral Limited agreed not to exercise its rights of default under the
foregoing agreements until February 15, 2000, in consideration of various
obligations of Telemonde. As of February 15, 2000, Telemonde had not fulfilled
its obligations under the Forbearance Agreement, and as a result, Communications
Collateral Limited has the right to foreclose on Telemonde's assets in order to
recover amounts due
15
<PAGE>
under the original agreements. As of April 19, 2000, Communications Collateral
Limited has not exercised its rights upon default as provided by agreement.
Pursuant to the warrant and the registration rights agreement, as of April
12, 2000, Communications Collateral Limited had the right to acquire up to 10.5%
of Telemonde's common stock, equal to approximately 9,255,544 shares if the
warrant were exercised in full on April 19, 2000, and all of the shares to which
Communications Collateral Limited is entitled under the Registration Rights
Agreement were to be issued.
One of the individual investors in Communications Collateral Limited, Mr.
Barry Nathanson, has provided executive recruitment services to Telemonde.
Telemonde issued Mr. Nathanson 33,333 shares of common stock and will issue
16,667 shares of common stock as compensation for his services.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Act") requires
Telemonde's executive officers and directors and persons who own more than 10%
of the Common Stock to file initial reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC"), as well as to
furnish Telemonde with a copy of such report. Additionally, SEC regulations
require Telemonde to identify in its Proxy Statement those individuals for whom
one of the referenced reports was not filed on a timely basis during the most
recent fiscal year. During 1999, the directors and/or executive officers of
Telemonde failed to make timely filings on Form 3 due to administrative error,
but such filings were subsequently made. During 1998, Telemonde was not a
reporting company and had no filing obligations.
STOCKHOLDER PROPOSALS
The Bylaws of Telemonde provide that in order for a stockholder to nominate
candidates to Telemonde's Board or to propose business at an annual meeting of
stockholders of Telemonde, a stockholder's notice must be delivered to the
Secretary of the principal executive offices of Telemonde not later than the
close of business on the 60th nor earlier than the close of business on the 90th
day prior to the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, or if Telemonde has not previously held an annual meeting,
notice by the stockholders to be timely must be delivered not earlier than the
close of business on the 90th day prior to such annual meeting and not later
than the close of business or the later of the 60th day prior to such meeting or
the 10th day following the day on which public announcement of the date of such
meeting is first made by Telemonde. Such stockholder's notice must set for (i)
as to each person whom a stockholder proposes to nominate for election or
reelection as a director, all information relating to such person that is
required to be disclosed and solicitations of proxies for election of directors
in an election contest or is otherwise required in each case pursuant to
Regulation 14A under the Act (including such person's consent to be named in the
proxy statement of the nominee and to serving as director if elected); (ii) as
to any other business that the stockholder proposes to bring before the meeting,
a brief description of the business desired to be brought before the meeting,
the reasons for conducting such business at the meeting and any material
interests in such business of such stockholder and of the beneficial owner, if
any, on whose behalf the proposal is made; and (iii) as to the stockholder
giving the notice and the beneficial owner, if any, on whose behalf the
nomination or proposal is made, (x) the name and address of such stockholder as
they appear on Telemonde's books, and of such beneficial owner and (y) the
number of shares of each class of capital stock of Telemonde which are owned
beneficially and of record by such stockholder and such beneficial owner.
Stockholder proposals for the 2001 Annual Meeting of Stockholders of Telemonde
must be received at the principal executive offices of Telemonde, 230 Park
Avenue, 10th Floor, New York, New York 10169, Attn: Secretary, no later than
April 7, 2001, for inclusion in the 2001 proxy statement and form of proxy.
16
<PAGE>
OTHER MATTERS
The Board of Directors, at the time of the preparation of this Proxy
Statement, knows of no business to come before the meeting other than that
referred to herein. If any other business should come before the meeting, the
persons named in the enclosed Proxy will have discretionary authority to vote
all proxies in accordance with their best judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Gottfried von Bismarck
________________________________________
Count Gottfried von Bismarck, Secretary
New York, New York
April 25, 2000
17
<PAGE>
PROXY
Telemonde, Inc.
230 Park Avenue
10th Floor
New York, New York 10169
ANNUAL MEETING OF STOCKHOLDERS
June 6, 2000
PLEASE SIGN AND RETURN PROMPTLY IN THE SELF-ADDRESSED ENVELOPE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Kevin Maxwell and Adam Bishop as proxies or
either of them, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all of the shares
of common stock of Telemonde, Inc., which the undersigned is entitled to vote at
the Annual Meeting of Stockholders to be held at 230 Park Avenue, 10th Floor,
New York, New York 10169, on Tuesday, June 6, 2000, at 11:00 a.m. Eastern
Daylight Time, or any adjournment thereof.
(1) As to the election of the Class I of board of directors listed in the Proxy
Statement delivered in connection with the Annual Meeting:
[_] FOR all nominees listed below [_] WITHHOLD AUTHORITY to vote for
all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below)
Gottfried von Bismarck
Paul E. Donofrio
(2) As to the ratification of the appointment of Moore Stephens as Telemonde's
independent accountants and auditors for fiscal 2000.
[_] FOR [_] AGAINST [_] ABSTAIN
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting. This proxy when properly
executed will be voted in the manner directed herein by the undersigned
shareholder(s).
PLEASE SIGN BELOW AND RETURN IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
THIS IS THE ONLY DOCUMENT YOU NEED TO RETURN AT THIS TIME.
Date: _________________________ __________________________________
Signature of Stockholder(s)
Date: _________________________ ___________________________________
Signature of Joint Stockholder(s)
