<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
The Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14A-6(a)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
COMMUNICATIONS WORLD INTERNATIONAL, 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-8(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined)
----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------
<PAGE> 2
COMMUNICATIONS WORLD INTERNATIONAL, INC.
7388 SOUTH REVERE PARKWAY
ENGLEWOOD, COLORADO 80112
----------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 8, 2000
----------
The Annual Meeting of Shareholders of Communications World
International, Inc., a Colorado corporation will be held at 2:30 P.M., local
time, on Wednesday, November 8, 2000, at our executive offices, 7388 South
Revere Parkway, Englewood, Colorado 80112, for the following purposes:
1. To elect four directors to serve one year terms ending at the next
annual meeting, or until their successors are elected and
qualified;
2. To consider and vote upon a proposal to approve an amendment to our
Articles of Incorporation to change our name from Communications
World International, Inc. to Active Link Communications, Inc.;
3. To consider and vote upon a proposal to approve an amendment to our
Articles of Incorporation to increase the number of authorized
shares of common stock from 25,000,000 to 75,000,000;
4. To consider and vote upon a proposal to amend our 1998 Stock
Incentive Plan to increase the number of shares of common stock
available for Plan purposes by 1,500,000 shares for a total of
2,500,000 shares; and
5. To transact such other business as may properly come before the
annual meeting or any adjournments or postponements thereof.
Only shareholders of record at the close of business on September 29,
2000, are entitled to notice of and to vote at the annual meeting and at any and
all adjournments or postponements thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Englewood, Colorado David E. Welch
October __, 2000 Vice President -- Chief Financial Officer
and Secretary
YOUR VOTE IS IMPORTANT
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. HOWEVER, TO
ASSURE THAT YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE COMPLETE, SIGN,
DATE AND PROMPTLY MAIL YOUR PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. RETURNING A SIGNED PROXY WILL NOT
PREVENT YOU FROM ATTENDING THE ANNUAL MEETING AND VOTING IN PERSON, IF YOU SO
DESIRE, BUT WILL HELP US SECURE A QUORUM AND REDUCE THE EXPENSE OF ADDITIONAL
PROXY SOLICITATION.
-1-
<PAGE> 3
COMMUNICATIONS WORLD INTERNATIONAL, INC.
7388 SOUTH REVERE PARKWAY
ENGLEWOOD, COLORADO 80112
(303) 721-8200
----------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 8, 2000
----------
PROXY STATEMENT
----------
This Proxy Statement is being furnished to the shareholders of
Communications World International, Inc., a Colorado corporation, in connection
with the solicitation of proxies by the Board of Directors of the Company for
use at the Annual Meeting of Shareholders to be held at our executive offices,
7388 South Revere Parkway, Englewood, Colorado 80112, on Wednesday, November 8,
2000, at 2:30 P.M. (local time), and at any and all adjournments or
postponements thereof. It is anticipated that this proxy statement and the
enclosed form of proxy will be mailed to our shareholders on or about October 6,
2000.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record holders of our Common Stock on September 29, 2000 may vote at
the annual meeting. On September 29, 2000, there were 8,860,543 shares of Common
Stock outstanding. The shares of Preferred Stock will not be voted at the annual
meeting. You are entitled to cast one vote for each share of Common Stock you
own on the record date. Shareholders do not have the right to vote cumulatively
in electing directors.
General Information on Voting
Your signed proxy will appoint James M. Ciccarelli and Lionel Brown as
proxy holders, or your representatives, to vote your shares. If you sign and
return your proxy without giving voting directions, the proxy holders will vote
your shares
o for all of the nominees for director
o for the amendment to the Articles of Incorporation changing the
name of the Company
o for the amendment to the Articles of Incorporation increasing the
authorized shares of Common Stock
o for the amendment to the 1998 Stock Incentive Plan increasing the
number of shares available for Plan purposes
-2-
<PAGE> 4
Shares represented by a proxy marked "abstain" on any matter will be
considered present at the annual meeting for purposes of determining a quorum
and for purposes of calculating the vote, but will not be considered to have
voted in favor of the proposal. Therefore, any proxy marked "abstain" will have
the effect of a vote against the matter. Shares represented by a proxy as to
which there is a "broker non-vote" (for example, where a broker does not have
discretionary authority to vote the shares), or a proxy in which authority to
vote for any matter considered is withheld, will be considered present at the
annual meeting for purposes of determining a quorum, but will have no effect on
the vote.
If any other matters are properly presented at the annual meeting for
consideration, the proxy holders will have the discretion to vote on those
matters for you. At the date this proxy statement went to press, we do not know
of any other matter to be raised at the annual meeting.
How You May Revoke or Change Your Vote
All shares that have been properly voted and not revoked will be voted
at the annual meeting in accordance with your instructions. You may revoke your
proxy at any time before it is voted at the annual meeting by:
o Sending written notice or revocation to the Secretary;
o Submitting another proper proxy; or
o Attending the annual meeting and voting in person. If your shares
are held in the name of a bank, broker or other holder of record,
you must obtain a proxy, executed in your favor, from the holder of
record to be able to vote at the meeting.
Costs of Solicitation
We will pay for preparing, printing and mailing this proxy statement.
Proxies may be solicited personally or by telephone by our regular employees or
other representatives without additional compensation by us. We intend to
reimburse banks, brokers and other custodians, nominees and fiduciaries for
their costs of sending the proxy materials to beneficial owners.
ELECTION OF DIRECTORS
The current members of the Board of Directors are Samuel D. Addoms,
Lionel Brown, James M. Ciccarelli and John Jenkins. Each of the current nominees
has been nominated for election to the Board of Directors to serve for a term of
one year until the next annual meeting of shareholders or until his successor is
elected and qualified. If any nominee is unable to serve as a director at the
time of the annual meeting, your proxy will be voted for the election of another
person the Board of Directors may nominate in his place, unless you indicate
otherwise.
Vote Required
The four candidates having the highest number of votes cast in
favor of their election will be elected to the Board of Directors.
-3-
<PAGE> 5
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
THESE NOMINEES FOR ELECTION AS DIRECTORS.
INFORMATION ABOUT NOMINEES TO THE BOARD OF DIRECTORS
Please review the following information about the nominees for election
to the Board of Directors.
SAMUEL D. ADDOMS, Director since October 1992, Age 61. Mr. Addoms is
President of Frontier Airlines, Inc. He has served in this position since
January 1995. From November 1993 to January 1995 he was the Executive Vice
President of Frontier Airlines, Inc. He has served as a director of Frontier
Airlines, Inc. from November 1993 to the present. Mr. Addoms received a B.A.
degree from Wesleyan University.
LIONEL BROWN, Director since 1998, Age 52. Mr. Brown became President
of the Company in December 1998. He served as Secretary and Chief Operations
Officer of Interconnect Acquisition Corporation ("IAC") from its founding in
1997 until its merger with us in October 1998. From 1996 to 1997, he served as
the Chief Information Officer of the Reseller Network Division and Exel Source,
two operating divisions of Intelligent Electronics, Inc. From 1993 to 1995, he
served as the Vice President of Operations and Information Systems for Wireless
Telcom, Inc. From 1989 to 1993, he held the position of Vice President of
Operations and Information Systems for the Reseller Network Division of
Intelligent Electronics, Inc.
JAMES M. CICCARELLI, Director since 1998, Age 48. Mr. Ciccarelli has
served as Chairman and Chief Executive Officer of the Company since July 1998.
He served as President and Chief Executive Officer of IAC from its founding in
1997 until its merger with us in October 1998. Mr. Ciccarelli has served as a
Director of Birner Dental Management Services, Inc., since 1996. He also serves
as a Director of Wireless Telcom, Inc., and has served in that capacity since
1993. From 1990 to 1993, Mr. Ciccarelli was the Vice President of Intelligent
Electronics and the President and CEO of its Reseller Network Division from 1987
to 1989. From 1988 to 1990, he was President of Connecting Point of America.
JOHN JENKINS, Director since August 2000, Age 50. Mr. Jenkins served as
Chairman and Chief Executive Officer of TAVA Technologies Inc. from 1995 to
2000. From 1990 to 1995, Mr. Jenkins served as President of Morgan Technical
Ceramics, Inc. He currently serves as a director of Colorado MEDtech and
Training Devices Inc. Mr. Jenkins received a B.S. degree from the University of
Washington and a JD degree from the University of Denver.
Director Meetings, Compensation and Committees
We do not pay directors for meetings attended. During our fiscal year
ended April 30, 2000, our Board of Directors held six meetings and took action
at other times by unanimous written consent. Each director attended 75 percent
or more of the meetings held during the period he served as director.
In 1993, we adopted a Non-Discretionary Stock Option Plan for
non-employee directors pursuant to which options to purchase up to 20,000 shares
of our Common Stock were available for grant to directors who were not employed
by us. Options to purchase 2,000 shares of the Common
-4-
<PAGE> 6
Stock are currently outstanding and exercisable at $2.00 per share. The Plan
expired in November 1997.
The exercise price for all outstanding options is the fair market value
of the Common Stock on the respective grant dates. Each director was entitled to
receive options to purchase 1,000 shares of Common Stock on November 1 of each
year. The options are exercisable for three years from the date of grant.
In fiscal 1999, we adopted the 1999 Non-Discretionary Stock Option Plan
(the "99 Plan"), pursuant to which options to purchase up to 300,000 shares of
common stock may be granted to our non-employee directors. Options to purchase
10,000 shares will be granted to any person becoming a director who is not
employed by us or any of our subsidiaries. In addition, each non-employee
director will receive options to purchase 10,000 shares annually. If any option
grant expires or terminates, all shares which were not issued under the option
grant will become available for additional awards under the 1999 Plan. The
options are exercisable for five years from the date of grant. In fiscal 1999
and fiscal 2000, options to purchase 20,000 shares were granted to each of the
two persons who were non-employee directors at the fair market values on the
dates of grant. An option to purchase 10,000 shares at the fair market value on
the date of grant was granted to John Jenkins when he became a director in
August 2000.
The Audit Committee is primarily concerned with our financial condition
and its responsibilities include: (i) monitoring the integrity of our financial
reporting process and systems of internal controls regarding finance,
accounting, and legal compliance; (ii) monitoring the independence and
performance of our independent auditors and our accounting department; and (iii)
providing an avenue of communication among the independent auditors, management,
our accounting department and the Board. The Audit Committee held two meetings
in fiscal 2000.
Certain Relationships and Related Transactions
Effective June 30, 1998, Richard Olson resigned as President and Chief
Executive Officer and director. We retained the services of Olson as a
consultant for six months thereafter at Olson's previous salary level of $8,500
per month. We also agreed to pay Olson $127,000 at the end of the consulting
period, and Olson agreed to repay a $25,000 loan from us, which amounts were
subsequently paid. All of Olson's stock options were canceled. We issued a
Warrant to Olson entitling Olson to purchase up to 100,000 shares of Common
Stock at an exercise price of $1.30 per share. The Warrant will expire on August
11, 2001. We agreed to indemnify Olson for personal guarantees he made of our
obligations to Toshiba America Information Systems ("TAIS"). In December 1995,
we agreed with TAIS to the transfer of $1,530,950 of current trade accounts
payable and a short-term note payable to a long-term note payable. The remaining
principal balance of the note on April 30, 2000 was $125,000.
Effective July 1, 1998, James M. Ciccarelli became Chief Executive
Officer. In November 1998, Lionel Brown became President. During fiscal 2000 Mr.
Ciccarelli received an average monthly salary of $10,000 and Mr. Brown received
an average monthly salary of $7,600. If our financial position improves, it is
likely that we will enter into employment agreements with each of these
executives at anticipated monthly salaries of $15,000 for Mr. Ciccarelli and
$10,000 for Mr. Brown. Options have been granted to Messrs. Ciccarelli and Brown
pursuant to the 1998 Stock Incentive Plan.
-5-
<PAGE> 7
In October 1998, we formed a subsidiary, IAC Acquisition Corporation,
and completed a merger with IAC. The shareholders of IAC received an aggregate
of 1,000 shares of our Series I Preferred Stock, which were converted into an
aggregate of 2,000,000 shares of Common Stock upon shareholder approval of an
amendment to our Articles of Incorporation. Of the 1,000 shares issued, Mr.
Ciccarelli received 500 shares and Mr. Brown received 312.5 shares.
In September 1997 we entered into an agreement with Century Capital
Group, Inc., for Century Capital to provide us with financial advisory and
investment banking services. James M. Corboy, who was then a member of the
Board, was then President of Century Capital. We agreed to pay Century Capital
$1,000 per month and additional compensation if certain acquisitions were
completed. In June, 1998, we entered into a new agreement with Century Capital,
which superseded the September, 1997 agreement. Century Capital agreed to
provide financial advisory services to us, including due diligence and a
fairness opinion in connection with our merger with IAC. We paid to Century
Capital $32,930 during the period from September, 1997 through April 1999,
including a $25,000 fee for a fairness opinion delivered to us in connection
with the IAC merger.
We have used the services of Bathgate McColley Capital Group, LLC
("BMCG"), as a placement agent for offerings in 1998 and 1999 of Common Stock,
Preferred Stock and debt. During this period, BMCG sold an aggregate of
$3,137,000 in equity and debt securities on our behalf. We paid BMCG an
aggregate of $253,667 in commissions, and issued warrants to purchase an
aggregate of 250,850 shares of Common Stock. Steven M. Bathgate and Eugene
McColley, principals of BMCG, participated as investors in these offerings and
are principal shareholders.
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO CHANGE OUR NAME
You are asked to consider and approve an amendment to our Articles of
Incorporation, as amended, to change our name from Communications World
International, Inc. to Active Link Communications, Inc. We believe that the name
change is desirable to better reflect the expansion of our business from sales
of telephone systems to serving a variety of our customers' communications
needs, including the linkage of voice and data communications. If the proposal
is adopted, we will file an amendment to the Articles with the Secretary of
State of the State of Colorado.
THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT TO CHANGE OUR NAME.
PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
You are asked to consider and approve an amendment to our Articles of
Incorporation to increase the authorized Common Stock. There are currently
authorized 25,000,000 shares of Common Stock, no par value, and 3,000,000 shares
of Preferred stock, $1 par value, in various classes or series, with such
designations, voting powers, preferences and relative, participating, optional
or other special rights, and qualifications, limitations and restrictions as the
Board of Directors may determine.
-6-
<PAGE> 8
The proposed amendment to the Articles would increase the number of
shares of Common Stock which we are authorized to issue from 25,000,000 to
75,000,000. The number of authorized shares of Preferred Stock will not be
changed by the proposed amendment. The full text of the proposed amendment is
attached as Annex A, and you are urged to read this carefully. If the proposal
is adopted, we will file an amendment to the Articles with the Secretary of
State of the State of Colorado.
We currently have 8,860,543 shares of common stock issued and
outstanding. A total of 4,786,708 shares are currently reserved for issuance
under outstanding options, warrants to purchase common stock and notes which may
be converted into common stock. In addition, future awards may be made under our
existing 1998 Stock Incentive Plan and 1999 Non-Discretionary Stock Option Plan.
Purpose and Effect of the Amendment
Our Board believes that it is desirable to have additional authorized
shares of common stock available for issuance for future acquisition and
financing transactions, stock dividends or splits, exercises of options and
warrants and other corporate purposes. Having such authorized shares available
for issuance in the future would give us greater flexibility and allow shares of
common stock to be issued without the expense and delay of a special
shareholders meeting. The shares of common stock would be available for issuance
without any further action by the shareholders unless such action is required by
applicable law or the rules of any stock exchange on which our securities may be
listed.
The additional shares of common stock for which authorization is sought
would be part of the existing class of common stock and, if and when issued,
would have the same rights and privileges as the shares of common stock
presently outstanding. Such additional shares would not (and the shares of
common stock presently outstanding do not) entitle the holders thereof to
preemptive rights.
The authorization of the increase in our authorized number of shares of
common stock is not being sought in response to any specific financing or
acquisition as of the date of this Proxy Statement. As part of our business
strategy, we are continuing to review various acquisition candidates; however,
any arrangement we would make prior to the annual meeting would not be dependent
upon an increase in the authorized number of shares of common stock. Although
authorization is not being sought in response to any indication or proposal that
we are a target for take-over activity, you should consider the fact that the
increase in the authorized common stock, coupled with the power of the Board to
authorize the issuance of the shares and ability of the Board to set the terms
of the preferred stock, means that the Board could in the future act to cause
the issuance of shares in a manner or on terms which might thwart or complicate
efforts of a third party to attempt to gain control of the Company.
THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT TO INCREASE OUR
AUTHORIZED COMMON STOCK.
-7-
<PAGE> 9
PROPOSAL TO AMEND THE 1998 STOCK INCENTIVE PLAN
You are asked to consider and approve an amendment to the 1998 Stock
Incentive Plan to increase the number of shares available for Plan purposes from
1,000,000 shares to a total of 2,500,000 shares. The following is a summary of
the Plan. Please refer to Annex B to this Proxy Statement for the full text of
the Plan, as amended.
Purpose
The purpose of the Plan is to promote the interests of CommWorld and
its shareholders by:
o Attracting and retaining key employees;
o Providing participants a significant stake in the performance of
CommWorld;
o Providing an opportunity for participants to increase their
holdings of the common stock.
The Plan would also permit the Board to grant stock options to
individual directors, if the Board decides to do so.
Administration
The Plan is administered by the option committee. The option committee
consists of the Board or a committee of the Board as the Board may from time to
time designate composed of not less than two members of the Board, each of whom
shall be a director who is not employed by CommWorld. The option committee
currently consists of the full Board. The option committee has the authority to
select employees and consultants to receive awards, to determine the type of
awards and the number of shares of common stock covered by awards, and to set
the terms and conditions of awards. The option committee has the authority to
establish rules for the administration of the Plan, and its determinations and
interpretations are binding.
Eligible Participants
o Any employee or officer (including executive officers) of CommWorld
or any of its subsidiaries will be eligible for a stock option
grant under the Plan if selected by the option committee. There are
currently approximately 144 employees of CommWorld and its
subsidiaries who would be eligible for option grants under the
Plan.
o Any consultant to CommWorld, including non-employee directors, will
also be eligible to receive option grants under the Plan if
authorized by the option committee.
-8-
<PAGE> 10
Shares Authorized
The number of shares of the common stock which may be issued upon
exercise of options under the Plan is currently 1,000,000, of which options to
purchase 716,547 shares are outstanding. Options granted to our officers during
the fiscal year ended April 30, 2000 are as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES PERCENT OF TOTAL
UNDERLYING OPTIONS OPTIONS GRANTED EXERCISE PRICE EXPIRATION
NAME GRANTED (#) TO EMPLOYEES PER SHARE ($/SH) DATE
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mark Bennett 5,000 1% $1.06 8/23/04
-----------------------------------------------------------------------------------------------------------------
Lionel Brown 39,000 6% $.97 - $2.75 8/23/04 - 2/16/05
-----------------------------------------------------------------------------------------------------------------
Jim Ciccarelli 74,000 11% $1.07 - $3.03 8/23/04 - 2/16/05
-----------------------------------------------------------------------------------------------------------------
David Welch 47,500 7% $.97 - $2.75 8/23/04 - 2/16/05
-----------------------------------------------------------------------------------------------------------------
</TABLE>
If the amendment is approved by the shareholders, the number of shares
available for Plan purposes will be increased by 1,500,000 shares for a total of
2,500,000 shares.
Types Of Options
The option committee may grant stock options that qualify as "incentive
stock options" under Section 422 of the Internal Revenue Code ("ISOs") or
options that do not so qualify ("Non-ISOs").
All options granted will be subject to the following:
o The exercise price must be paid at the time the option is exercised
in either cash or other shares of common stock.
o The exercise price for ISO's cannot be less than the fair market
value of the common stock on the grant date.
o The option committee will determine the vesting schedule of options
granted under the Plan and may also impose additional conditions on
exercise, including performance goals.
o Options will not be exercisable for at least one year after they
are granted, and they cannot be exercised more than ten years after
grant.
Federal Income Tax Consequences
The following is a summary of the principal U.S. federal income tax
consequences generally applicable to option grants under the Plan:
o The grant of an option is not expected to result in any taxable
income for the recipient.
-9-
<PAGE> 11
o The holder of an ISO generally will have no taxable income upon
exercising the ISO if certain requirements are met (except that a
liability may arise for alternative minimum tax) and we will not be
entitled to a tax deduction when an ISO is exercised.
o Upon exercise of a Non-ISO, the holder will recognize ordinary
income equal to the difference between the fair market value of
shares of common stock acquired and the exercise price. We will be
entitled to a tax deduction for the same amount.
o The tax consequences upon a sale of shares acquired in an exercise
of an option will depend on how long the shares were held prior to
sale, and upon whether such shares were acquired in the exercise of
an ISO or a Non-ISO.
o If shares acquired upon exercise of an ISO are held for at least
one year after exercise and two years from the date that the ISO
was granted, the holder will recognize long-term capital gain or
loss in an amount equal to the difference between the option
exercise price and the sale price of the shares. If the shares are
not held for that period, gain on the sale of the shares may be
treated as ordinary income.
o Any gain realized upon the sale of shares acquired in the exercise
of a Non-ISO for an amount greater than their fair market value on
the date of exercise, will be capital gain and any loss will be
capital loss. Generally, there will be no tax consequences to us in
connection with the disposition of shares acquired in the exercise
of an option, except that we may be entitled to a tax deduction in
the case of a sale of ISO shares before the holding periods
described above have been satisfied.
Adjustments
Certain corporate transactions or events such as stock splits,
recapitalizations, spin-offs, mergers, etc. may directly affect the number of
outstanding shares and/or the value of the outstanding common stock. If such
transactions occur, the option committee may adjust the number of shares which
may be granted under the Plan, as well as the limits on individual option
grants. The option committee may adjust the number of shares and the exercise
price under outstanding options, and may make other adjustments which are
thought appropriate to protect the value of the award to the recipient.
Transferability
Options granted under the Plan may not be transferred except:
o By will or the laws of descent and distribution; or
o Pursuant to a qualified domestic relations order or the Employee
Retirement Income Security Act.
-10-
<PAGE> 12
Amendments
The Board may amend or terminate the Plan at any time. No amendment,
however, may:
o Increase the number of shares reserved for option grants without
shareholder approval;
o Impair the right of a holder under an option previously granted
except to qualify under SEC rules, or
o Disqualify the plan from the exemption provided by SEC Rule 16b-3.
Term
The Plan will continue until November 11, 2008, unless abandoned or
terminated at an earlier time.
Vote Required
The affirmative vote of a majority of the outstanding shares of common
stock entitled to vote at the special meeting is required for approval of the
amendment to the Plan.
THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT OF THE PLAN
COMMON STOCK OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth the persons known to the Company to own
beneficially more than five percent of the outstanding Common Stock on September
29, 2000 and information as of September 29, 2000 with respect to the ownership
of equity by each director of the Company and by all officers and directors as a
group.
Certain Beneficial Owners
<TABLE>
<CAPTION>
Name & Address of Shares Beneficially
Beneficial Owner Title of Class Owned (1) Percent
---------------- -------------- --------- -------
<S> <C> <C> <C>
Samuel D. Addoms (2) Common Stock 51,625 .6%
1900 Fairfax Street
Denver, Colorado 80220
John Jenkins (2) Common Stock 106,567 1.20%
5235 E. Princeton Avenue
Englewood CO 80110
Lionel Brown (3) Common Stock 763,000 7.69%
7388 S. Revere Parkway, Suite 1000
Englewood, Colorado 80112
James M. Ciccarelli (3) Common Stock 1,214,000 12.23%
7388 S. Revere Parkway, Suite 1000
Englewood, Colorado 80112
Steven M. Bathgate (4) Common Stock 1,112,032 11.21%
5350 S. Roslyn, Suite 380
Englewood, Colorado 80111
Eugene C. McColley (4) Common Stock 637,448 6.42%
5350 S. Roslyn, Suite 380
Englewood, Colorado 80111
Officers and Directors as Common Stock 2,266,692 22.84%
a Group (5 persons)(2)(5)
</TABLE>
-11-
<PAGE> 13
(1) Beneficial ownership results in each case from the possession of sole or
shared voting and investment power with respect to the shares.
(2) The number of shares set forth opposite the name of Samuel D. Addoms
includes options to purchase 51,000 shares. The number of shares set forth
opposite the name of John Jenkins includes options to purchase 10,000
shares; a warrant to purchase 27,000 shares; and 17,567 shares which
underlie a convertible note in the principal amount of $25,000. The number
of shares set forth opposite the officers and directors as a group includes
the aforementioned options, warrant and convertible note to Messrs. Addoms
and Jenkins
(3) The number of shares set forth opposite the name of James M. Ciccarelli
includes options to purchase 184,000 shares. The number of shares set forth
opposite the name of Lionel Brown includes options to purchase 118,000
shares.
(4) The shares set forth opposite the names of Steven M. Bathgate and Eugene C.
McColley include warrants to purchase 239,865 and 193,865 shares,
respectively. Also included are 66,667 shares and 33,333 shares which
underlie convertible notes in the principal amounts of $100,000 and $50,000
payable to Mr. Bathgate and Mr. McColley, respectively. Messrs. Bathgate
and McColley are principals of Bathgate McColley Capital Group, LLC.
(5) The number of shares set forth opposite the officers and directors as a
group includes the aforementioned options to Messrs. Ciccarelli and Brown,
as well as, options to purchase 121,500 shares for Mr. Welch.
COMPLIANCE WITH SECTION 16(A) REPORTING
The rules of the Securities and Exchange Commission require that we
disclose late filings of reports of stock ownership and changes in stock
ownership by our directors and executive officers. To the best of our knowledge,
all of the filings for our executive officers and directors were made on a
timely basis during the fiscal 2000, except that Form 5's were filed four days
late by the officers and directors reflecting option grants.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Any shareholder proposal to be presented at our annual meeting of
shareholders to be held in the year 2001 must be received by us no later than
June 11, 2001 for inclusion in the proxy statement and form of proxy relating to
such meeting. Each proposal submitted should be accompanied by the name and
address of the shareholder submitting the proposal, the number of shares of
common stock owned of record or beneficially and the date on which such shares
were acquired. If the proponent is not a shareholder of record, proof of
beneficial ownership should also be submitted. All proposals must be a proper
subject for action and comply in all respects with the rules and regulations of
the Securities and Exchange Commission.
-12-
<PAGE> 14
INDEPENDENT AUDITOR
The Board of Directors appointed Hein + Associates LLP as independent
auditors of the Company and its subsidiaries for fiscal 2000. A representative
of Hein + Associates LLP is expected to attend the annual meeting and will have
the opportunity to make a statement if desired and to be available to respond to
appropriate questions.
OTHER MATTERS
The Board knows of no business which will be presented at the annual
meeting other than that described above. If any matters other than those
referred to above should properly come before the annual meeting, the proxy
holders intend to vote such proxies in accordance with their best judgment.
ANNUAL REPORT
The Company's Annual Report on Form 10-KSB for the year ended April 30,
2000 (without exhibits) as filed with the Securities and Exchange Commission
which includes audited financial statements is being mailed with this proxy
statement to shareholders of record as of the Record Date. The audited financial
statements are incorporated in this document by reference.
By Order of the Board of Directors
October __, 2000 David E. Welch
Vice President -- Chief Financial Officer
and Secretary
-13-
<PAGE> 15
ANNEX A
PROPOSED AMENDMENT
TO
COMMUNICATIONS WORLD INTERNATIONAL, INC.'S
ARTICLES OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
The first paragraph of Article Four of the Articles of Incorporation of
Communications World International, Inc. is proposed to be amended in its
entirety to read as follows:
Article Four. The aggregate number of shares which the Corporation
shall have authority to issue is 78,000,000 shares, of which 75,000,000 shall be
no par value common shares, and 3,000,000 shall be preferred shares, each having
a par value of $1.00. All shares shall be fully paid and non-assessable for any
purpose.
<PAGE> 16
ANNEX B
COMMUNICATIONS WORLD INTERNATIONAL, INC.
1998 STOCK INCENTIVE PLAN
ADOPTED ORIGINALLY IN NOVEMBER 1998
AND AS PROPOSED TO BE AMENDED
This 1998 Stock Incentive Plan (the "Plan") is adopted in consideration
for services rendered and to be rendered to Communications World International,
Inc. and related companies.
1. Definitions.
The terms used in this Plan shall, unless otherwise indicated
or required by the particular context, have the following meanings:
Board: The Board of Directors of Communications World
International, Inc.
Change in Control: (i) The acquisition, directly or
indirectly, by any person or group (within the meaning of Section 13(d)(3) of
the Exchange Act) of the beneficial ownership of more than fifty percent of the
outstanding securities of the Company, (ii) a merger or consolidation in which
the Company is not the surviving entity, except for a transaction the principal
purpose of which is to change the state in which the Company is incorporated,
(iii) the sale, transfer or other disposition of all or substantially all of the
assets of the Company, (iv) a complete liquidation or dissolution of the
Company, or (v) any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent of the total combined
voting power of the Company's outstanding securities are transferred to a person
or persons different from the persons holding those securities immediately prior
to such merger.
Code: The Internal Revenue Code of 1986, as amended.
Common Stock: The no par value Common Stock of Communications
World International, Inc.
Company: Communications World International, Inc., a
corporation incorporated under the laws of Colorado, and any successors in
interest by merger, operation of law, assignment or purchase of all or
substantially all of the property, assets or business of the Company.
Consultant: A Consultant is any person, including any advisor,
engaged by the Company or any Related Company to render consulting services and
may include members of the Board.
Continuous Status as an Employee or Consultant: The employment
by, or relationship as a Consultant with, the Company or any Related Company is
not interrupted or terminated. The
<PAGE> 17
Board, at its sole discretion, may determine whether Continuous Status as an
Employee or Consultant shall be considered interrupted due to personal or other
mitigating circumstances.
Date of Grant: The date on which an Option is granted under
the Plan.
Employee: An Employee is an employee of the Company or any
Related Company.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exercise Price: The price per share of Common Stock payable
upon exercise of an Option.
Fair Market Value: The Fair Market Value of the Option Shares.
Such Fair Market Value as of any date shall be reasonably determined by the
Option Committee; provided, however, that if there is a public market for the
Common Stock, the Fair Market Value of the Option Shares as of any date shall be
the officially quoted closing price, if available, through The Nasdaq Stock
Market, Inc., or a stock exchange, or if no officially quoted closing price is
available, the representative closing bid price, on the date in question. In the
event there is no officially quoted closing price or bid price or the Common
Stock is not traded publicly, the Fair Market Value of a share of Common Stock
on any date shall be determined, in good faith, by the Board or the Option
Committee after such consultation with outside legal, accounting and other
experts as the Board or the Option Committee may deem advisable, and the Board
or the Option Committee shall maintain a written record of its method of
determining such value.
Incentive Stock Options ("ISOs"): "Incentive Stock Options" as
that term is defined in Section 422 of the Code.
Non-Incentive Stock Options ("Non-ISOs"): Options which are
not intended to qualify as "Incentive Stock Options" under Section 422 of the
Code.
Offeree: An Employee or Consultant to whom a Right to Purchase
has been offered or who has acquired Restricted Stock under the Plan.
Option: The rights granted to an Employee or Consultant to
purchase Common Stock pursuant to the terms and conditions of an Option
Agreement.
Option Agreement: The written agreement (and any amendment or
supplement thereto) between the Company and an Employee or Consultant
designating the terms and conditions of an Option.
Option Committee: The Plan shall be administered by the Option
Committee which shall consist of the Board or a committee of the Board as the
Board may from time to time designate composed of not less than two members of
the Board who are not employees of the Company or a Related Company.
-2-
<PAGE> 18
Option Shares: The shares of Common Stock underlying an Option
granted to an Employee or Consultant.
Optionee: An Employee or Consultant who has been granted an
Option.
Participant: An Employee or Consultant who holds an Option, a
Right to Purchase or Restricted Stock under the Plan.
Purchase Price: The Purchase Price per share of Restricted
Stock payable upon acceptance of a Right to Purchase.
Related Company: Any subsidiary of the Company and any other
business venture in which the Company has a significant interest as determined
in the discretion of the Option Committee.
Restricted Stock: The shares of Common Stock issued pursuant
to Section 15, subject to any restrictions and conditions as are established
pursuant to such Section 15.
Right to Purchase: A right to purchase Restricted Stock
granted to an Offeree pursuant to Section 15 hereof.
Rule 16b-3: Rule 16b-3 as promulgated by the Securities and
Exchange Commission under Section 16(b) of the Exchange Act.
2. Purpose and Scope.
(a) The purpose of this Plan is to advance the interests of
the Company and its stockholders by affording Employees and Consultants an
opportunity for investment in the Company and the incentive advantages inherent
in stock ownership in this Company.
(b) This Plan authorizes the Option Committee to grant Options
to purchase shares of Common Stock to Employees and Consultants selected by the
Option Committee while considering criteria such as employment position or other
relationship with the Company, duties and responsibilities, ability,
productivity, length of service or association, morale, interest in the Company,
recommendations by supervisors, and other matters.
3. Administration of the Plan. The Plan shall be administered by
the Option Committee. The Option Committee shall have the authority granted to
it under this section and under each other section of the Plan.
In accordance with and subject to the provisions of the Plan,
the Option Committee shall select the Optionees and Offerees, shall determine
(i) the number of shares of Common Stock to be subject to each Option and Right
to Purchase, (ii) the time at which each Option or Right to Purchase is to be
granted, (iii) whether an Option or Right to Purchase shall be granted in
exchange for the cancellation and termination of a previously granted option or
options under the Plan or otherwise, (iv) the Exercise Price for the Option
Shares, (v) the Purchase Price of Restricted Stock, (vi) the option
-3-
<PAGE> 19
period, and (vii) the manner in which the Option becomes exercisable. In
addition, the Option Committee shall fix such other terms of each Option and
Right to Purchase as the Option Committee may deem necessary or desirable. The
Option Committee shall determine the form of Option Agreement to evidence each
Option and the form of Stock Purchase Agreement to evidence each Right to
Purchase.
The Option Committee from time to time may adopt such rules
and regulations for carrying out the purposes of the Plan as it may deem proper
and in the best interests of the Company. The Option Committee shall keep
minutes of its meetings and those minutes shall be distributed to every member
of the Board.
All actions taken and all interpretations and determinations
made by the Option Committee in good faith (including determinations of Fair
Market Value) shall be final and binding upon all Employees, Consultants, the
Company and all other interested persons. No member of the Option Committee
shall be personally liable for any action, determination or interpretation made
in good faith with respect to the Plan, and all members of the Option Committee
shall, in addition to rights they may have if Directors of the Company, be fully
protected by the Company with respect to any such action, determination or
interpretation.
4. The Common Stock. The Board is authorized to appropriate,
issue and sell for the purposes of the Plan, and the Option Committee is
authorized to grant Options and Rights to Purchase with respect to, a total
number, not in excess of 2,500,000 shares of Common Stock, either treasury or
authorized but unissued, or the number and kind of shares of stock or other
securities which in accordance with Section 16 shall be substituted for the
2,500,000 shares or into which such 2,500,000 shares shall be adjusted. All or
any unsold shares subject to an Option or Right to Purchase that for any reason
expires or otherwise terminates may again be made subject to Options or Rights
to Purchase under the Plan. No person may be granted Options or Rights to
Purchase under this Plan covering in excess of an aggregate of 500,000 Option
Shares and shares of Restricted Stock in any calendar year, subject to
adjustments in connection with Section 16.
5. Eligibility. Options which are intended to qualify as ISOs
will be granted only to Employees. Employees and Consultants may hold more than
one Option under the Plan and may hold Options under the Plan and options
granted pursuant to other plans or otherwise, and may hold Rights to Purchase
under the Plan.
6. Option Price. The Exercise Price for the Option Shares shall
be established by the Option Committee or shall be determined by a method
established by the Option Committee; provided that the Exercise Price to be paid
by Optionees for the Option Shares that are intended to qualify as ISOs, shall
not be less than 100 percent of the Fair Market Value of the Option Shares on
the Date of Grant, or the date on which the Optionee is hired or promoted (or
similar event), if the Date of Grant occurs not more than 90 days after the date
of such hiring, promotion or other event.
-4-
<PAGE> 20
7. Duration and Exercise of Options.
(a) The option period shall commence on the Date of Grant and
shall be as set by the Option Committee, but not to exceed 10 years in length.
Except as otherwise provided herein or as determined by the Option Committee, no
Option shall be exercised for the period of one year following the Date of
Grant; provided, however, that this limitation shall not apply to the exercise
of an Option pursuant to the terms of the relevant Option Agreement upon the
Optionee's death.
(b) During the lifetime of the Optionee, the Option shall be
exercisable only by the Optionee; provided, that in the event of the legal
disability of an Optionee, the guardian or personal representative of the
Optionee may exercise the Option. However, if the Option is an ISO it may be
exercised by the guardian or personal representative of the Optionee only if
such guardian or personal representative obtains a ruling from the Internal
Revenue Service or an opinion of counsel to the effect that neither the grant
nor the exercise of such power is violative of the Code. Any opinion of counsel
must be both from counsel and in a form acceptable to the Option Committee.
(c) The Option Committee may determine whether any Option
shall be exercisable in installments only; if the Option Committee determines
that an Option shall be exercisable in installments, it shall determine the
number of installments and the percentage of the Option exercisable at each
installment date. All such installments shall be cumulative.
(d) In the event an Optionee's Continuous Status as an
Employee or Consultant terminates for any reason, any Option held by the
Optionee on the date of termination may be exercised within 90 days after the
date of termination, but only to the extent that the Option was exercisable
according to its terms on the date of termination. After such 90-day period, any
unexercised portion of an Option shall expire.
(e) Each Option shall be exercised in whole or in part by
delivering to the office of the Treasurer of the Company written notice of the
number of shares with respect to which the Option is to be exercised and by
paying in full the Exercise Price for the Option Shares purchased as set forth
in Section 8; provided, that an Option may not be exercised in part unless the
Exercise Price for the Option Shares purchased is at least $2,000.
(f) No Option may be exercised until the Plan is approved by
the shareholders of the Company as provided in Section 17 below.
8. Payment for Option Shares. If the Exercise Price of the Option
Shares purchased by any Optionee at one time exceeds $2,000, the Option
Committee may permit all or part of the Exercise Price for the Option Shares to
be paid by delivery to the Company for cancellation shares of the Company's
Common Stock previously owned by the Optionee with a Fair Market Value as of the
date of payment equal to the portion of the Exercise Price for the Option Shares
that the Optionee does not pay in cash. In the case of all other Option
exercises, the Exercise Price shall be paid in cash or check upon exercise of
the Option, except that the Option Committee may permit an Optionee to elect to
pay the Exercise Price upon the exercise of an Option by authorizing a third
party to sell some or all of the Option Shares acquired upon exercise of an
Option and remit to the Company a sufficient
-5-
<PAGE> 21
portion of the sale proceeds to pay the entire Exercise Price and any tax
withholding resulting from such exercise.
9. Relationship to Employment or Position. Nothing contained in
the Plan, or in any Option or Right to Purchase granted pursuant to the Plan,
shall confer upon any Participant any right with respect to continuance of
employment by the Company, as an Employee or as a Consultant or interfere in any
way with the right of the Company to terminate the Participant's employment as
an Employee or position as a Consultant, at any time.
10. Nontransferability of Option. Except as otherwise provided by
the Option Committee, no Option granted under the Plan shall be transferable by
the Optionee, either voluntarily or involuntarily, except by will or the laws of
descent and distribution.
11. Rights as a Stockholder. No person shall have any rights as a
shareholder with respect to any share covered by an Option until that person
shall become the holder of record of such share and, except as provided in
Section 16, no adjustments shall be made for dividends or other distributions or
other rights as to which there is an earlier record date.
12. Securities Laws Requirements. No Option Shares shall be issued
unless and until, in the opinion of the Company, any applicable registration
requirements of the Securities Act of 1933, as amended, any applicable listing
requirements of any securities exchange on which stock of the same class is then
listed, and any other requirements of law or of any regulatory bodies having
jurisdiction over such issuance and delivery, have been fully complied with.
Each Option and each Option Share certificate may be imprinted with legends
reflecting federal and state securities laws, restrictions and conditions, and
the Company may comply therewith and issue "stop transfer" instructions to its
transfer agent and registrar in good faith without liability.
13. Disposition of Shares. Each Optionee, as a condition of
exercise, shall represent, warrant and agree, in a form of written certificate
approved by the Company, as follows: (a) that all Option Shares are being
acquired solely for his own account and not on behalf of any other person or
entity; (b) that no Option Shares will be sold or otherwise distributed in
violation of the Securities Act of 1933, as amended, or any other applicable
federal or state securities laws; (c) that if he is subject to reporting
requirements under Section 16(a) of the Exchange Act, he will (i) not violate
Section 16(b) of the Exchange Act, (ii) furnish the Company with a copy of each
Form 4 and Form 5 filed by him, and (iii) timely file all reports required under
the federal securities laws; and (d) that he will report all sales of Option
Shares to the Company in writing on a form prescribed by the Company.
14. Ten Percent Shareholder Rule. With respect to ISO's, no Option
may be granted to an Employee who, at the time the Option is granted, owns stock
possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company, unless at the time the Option is granted the
purchase price for the Option Shares is at least 110 percent of the Fair Market
Value of the Option Shares on the Date of Grant and such Option by its terms is
not exercisable after the expiration of five years from the Date of Grant.
-6-
<PAGE> 22
15. Rights to Purchase
15.1 Nature of Right to Purchase. A Right to Purchase granted
to an Offeree entitles the Offeree to purchase, for a Purchase Price determined
by the Option Committee, shares of Common Stock subject to such terms,
restrictions and conditions as the Option Committee may determine at the time of
grant ("Restricted Stock"). Such conditions may include, but are not limited to,
continued employment or the achievement of specified performance goals or
objectives.
15.2 Acceptance of Right to Purchase. An Offeree shall have no
rights with respect to the Restricted Stock subject to a Right to Purchase
unless the Offeree shall have accepted the Right to Purchase within ten days (or
such longer or shorter period as the Option Committee may specify) following the
grant of the Right to Purchase by making payment of the full Purchase Price to
the Company in the manner set forth in Section 15.3 hereof and by executing and
delivering to the Company a Stock Purchase Agreement. Each Stock Purchase
Agreement shall be in such form, and shall set forth the Purchase Price and such
other terms, conditions and restrictions of the Restricted Stock, not
inconsistent with the provisions of this Plan, as the Option Committee shall,
from time to time, deem desirable. Each Stock Purchase Agreement may be
different from each other Stock Purchase Agreement.
15.3 Payment of Purchase Price. Subject to any legal
restrictions, payment of the Purchase Price upon acceptance of a Right to
Purchase Restricted Stock may be made, in the discretion of the Option
Committee, by (a) cash; (b) check; (c) the surrender of shares of Common Stock
owned by the Offeree that have been held by the Offeree for at least six months,
which surrendered shares shall be valued at Fair Market Value as of the date of
such exercise; (d) any combination of the foregoing methods of payment or any
other consideration or method of payment as shall be permitted by applicable
corporate law.
15.4 Rights as a Shareholder. Upon complying with the
provisions of Section 15.2 hereof, an Offeree shall have the rights of a
shareholder with respect to the Restricted Stock purchased pursuant to the Right
to Purchase, including voting and dividend rights, subject to the terms,
restrictions and conditions as are set forth in the Stock Purchase Agreement.
Unless the Option Committee shall determine otherwise, certificates evidencing
shares of Restricted Stock shall remain in the possession of the Company in
accordance with the terms of the Stock Purchase Agreement.
15.5 Restrictions. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in the Stock Purchase Agreement or by the Option
Committee. In the event a Participant's Continuous Service as an Employee or
Consultant terminates for any reason, the Stock Purchase Agreement may provide,
in the discretion of the Option Committee, that the Company shall have the
right, exercisable at the discretion of the Option Committee , to repurchase (a)
at the original Purchase Price, any shares of Restricted Stock which have not
vested as of the date of termination, and (b) at Fair Market Value, any shares
of Restricted Stock which have vested as of such date, on such terms as may be
provided in the Stock Purchase Agreement.
-7-
<PAGE> 23
15.6 Vesting of Restricted Stock. The Stock Purchase Agreement
shall specify the date or dates, the performance goals or objectives which must
be achieved, and any other conditions on which the Restricted Stock may vest.
15.7 Dividends. If payment for shares of Restricted Stock is
made by promissory note, any cash dividends paid with respect to the Restricted
Stock may be applied, in the discretion of the Option Committee, to repayment of
such note.
15.8 Non-Assignability of Rights. No Right to Purchase shall
be assignable or transferable except by will or the laws of descent and
distribution or as otherwise provided by the Option Committee.
16. Change in Stock, Adjustments, Etc. In the event that each of
the outstanding shares of Common Stock (other than shares held by dissenting
shareholders which are not changed or exchanged) should be changed into, or
exchanged for, a different number or kind of shares of stock or other securities
of the Company, or, if further changes or exchanges of any stock or other
securities into which the Common Stock shall have been changed, or for which it
shall have been exchanged, shall be made (whether by reason of merger,
consolidation, reorganization, recapitalization, stock dividends,
reclassification, split-up, combination of shares or otherwise), then
appropriate adjustment shall be made by the Option Committee to the aggregate
number and kind of shares subject to this Plan, and the number and kind of
shares and the price per share subject to outstanding Options and Rights to
Purchase as provided in the respective Option Agreements and Stock Purchase
Agreements in order to preserve, as nearly as practical, but not to increase,
the benefits to Participants.
17. Effective Date of Plan; Termination Date of Plan. Subject to
the approval of the Plan by the affirmative vote of the holders of a majority of
the Company's securities entitled to vote and represented at a meeting duly held
in accordance with applicable law, the Plan shall be deemed effective November
12, 1998. The Plan shall terminate at midnight on November 11, 2008, except as
to Options previously granted and outstanding under the Plan at that time. No
Options or Rights to Purchase shall be granted after the date on which the Plan
terminates. The Plan may be abandoned or terminated at any earlier time by the
Board, except with respect to any Options or Rights to Purchase then outstanding
under the Plan.
18. Withholding Taxes. The Company, or any Related Company, may
take such steps as it may deem necessary or appropriate for the withholding of
any taxes which the Company, or any Related Company, is required by any law or
regulation or any governmental authority, whether federal, state or local,
domestic or foreign, to withhold in connection with any Option or Right to
Purchase including, but not limited to, the withholding of all or any portion of
any payment or the withholding of issuance of Option Shares or Restricted Stock
to be issued upon the exercise of any Option.
-8-
<PAGE> 24
19. Change in Control.
In the event of a Change in Control of the Company, (a) the
Option Committee, in its discretion, may, at any time an Option or Right to
Purchase is granted, or at any time thereafter, accelerate the time period
relating to the exercise or realization of any Options, Rights to Purchase and
Restricted Stock and (b) with respect to Options and Rights to Purchase, the
Option Committee in its discretion may, at any time an Option or Right to
Purchase is granted, or at any time thereafter, take one or more of the
following actions: (i) provide for the purchase of each Option or Right to
Purchase for an amount of cash or other property that could have been received
upon the exercise of the Option or Right to Purchase had the Option been
currently exercisable, (ii) adjust the terms of the Options and Rights to
Purchase in a manner determined by the Option Committee to reflect the Change in
Control, (iii) cause the Options and Rights to Purchase to be assumed, or new
rights substituted therefor, by another entity, through the continuance of the
Plan and the assumption of outstanding Options and Rights to Purchase, or the
substitution for such Options and Rights to Purchase of new options and new
rights to purchase of comparable value covering shares of a successor
corporation, with appropriate adjustments as to the number and kind of shares
and exercise prices, in which event the Plan and such Options and Rights to
Purchase, or the new options and rights to purchase substituted therefor, shall
continue in the manner and under the terms so provided or (iv) make such other
provision as the Committee may consider equitable. If the Option Committee does
not take any of the foregoing actions, all Options and Rights to Purchase shall
terminate upon the consummation of the Change in Control and the Option
Committee shall cause written notice of the proposed transaction to be given to
all Participants not less than fifteen days prior to the anticipated effective
date of the proposed transaction.
20. Amendment.
(a) The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which would (i) impair
the right of a Participant under an outstanding Option Agreement or Stock
Purchase Agreement, except such an amendment made to cause the Plan to qualify
for the exemption provided by Rule 16b-3, or (ii) disqualify the Plan from the
exemption provided by Rule 16b-3. In addition, no such amendment shall be made
without the approval of the Company's shareholders to the extent such approval
is required by law or agreement
(b) The Committee may amend the terms of any Option or Right
to Purchase theretofore granted, prospectively or retroactively, but no such
amendment shall impair the rights of any Participant without the Participant's
consent except such an amendment made to cause the Plan to qualify for the
exemption provided by Rule 16b-3.
(c) Subject to the above provisions, the Board shall have
authority to amend the Plan to take into account changes in law and tax and
accounting rules as well as other developments, and to grant Options and Rights
to Purchase which qualify for beneficial treatment under such rules without
shareholder approval.
-9-
<PAGE> 25
21. Other Provisions.
(a) The use of a masculine gender in the Plan shall also
include within its meaning the feminine, and the singular may include the
plural, and the plural may include the singular, unless the context clearly
indicates to the contrary.
(b) Any expenses of administering the Plan shall be borne by
the Company.
(c) This Plan shall be construed to be in addition to any and
all other compensation plans or programs. Neither the adoption of the Plan by
the Board nor the submission of the Plan to the shareholders of the Company for
approval shall be construed as creating any limitations on the power or
authority of the Board to adopt such other additional incentive or other
compensation arrangements as the Board may deem necessary or desirable.
(d) The validity, construction, interpretation, administration
and effect of the Plan and of its rules and regulations, and the rights of any
and all personnel having or claiming to have an interest therein or thereunder
shall be governed by and determined exclusively and solely in accordance with
the laws of the State of Colorado.
* * * * * * * *
-10-
<PAGE> 26
COMMUNICATIONS WORLD INTERNATIONAL, INC.
7388 SOUTH REVERE PARKWAY
ENGLEWOOD, COLORADO 80112
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby appoint James M. Ciccarelli and Lionel Brown, or
either of them, as Proxies or __________________________ (shareholder may strike
the Proxy Committee designated by management and insert the name and address of
another person(s)) with power of substitution to vote all the shares of the
undersigned with all of the powers which the undersigned would possess if
personally present at the Annual Meeting of the Shareholders of Communications
World International, Inc. to be held AT 2:30 P.M. ON NOVEMBER 8, 2000 AT 7388
SOUTH REVERE PARKWAY, ENGLEWOOD, COLORADO, or any adjournment thereof, on the
following matters:
1. ELECTION OF DIRECTORS
Nominees: Samuel D. Addoms, Lionel Brown, James M. Ciccarelli and
John Jenkins
FOR all nominees WITHHELD for all nominees
-------- --------
FOR, except for the following nominee(s):
------------------------------
2. APPROVAL OF AMENDMENT TO ARTICLES OF INCORPORATION TO CHANGE THE NAME
OF THE COMPANY FROM COMMUNICATIONS WORLD INTERNATIONAL, INC. TO ACTIVE
LINK COMMUNICATIONS, INC.
For Against Abstain
----- ----- -----
3. APPROVAL OF AMENDMENT TO THE ARTICLES OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK FROM 25,000,000 TO
75,000,000.
For Against Abstain
----- ----- -----
4. APPROVAL OF AMENDMENT TO THE 1998 STOCK INCENTIVE PLAN TO INCREASE THE
NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR PLAN PURPOSES BY
1,500,000 SHARES FOR A TOTAL OF 2,500,000 SHARES
For Against Abstain
----- ----- -----
In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Unless contrary instructions are given, the shares represented by this
Proxy will be voted for the election of all nominees for directors and for all
of the proposals.
<PAGE> 27
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE
COMPANY. EVEN IF YOU PLAN TO ATTEND THE MEETING, PLEASE VOTE, DATE, SIGN AND
RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE.
Please sign exactly as shown on your stock certificate and on the
envelope in which this Proxy was mailed. When signing as Partner, Officer,
Trustee, etc., give full title as such and sign your own name as well. If stock
is held jointly, each joint owner should sign.
Signature(s):
----------------------------
Signature(s):
----------------------------
Date:
------------------------------------
