SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
COMPANY NAME
(Name of Registrant as Specified in Its Charter)
COMPANY NAME
(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 the table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] 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>
INTERAMERICAS COMMUNICATIONS CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 22, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of InterAmericas Communications Corporation, a Texas corporation (the
"Company"), will be held at The Biltmore Hotel, 1200 Anastasia Avenue, Coral
Gables, Florida 33134 on Thursday, October 22, 1998, at 10:00 a.m. local time.
The purpose of the Annual Meeting is to consider and act upon the following
proposals and to transact such other business as may properly come before the
Annual Meeting or any adjournments thereof:
1. To elect five members to the Company's Board of Directors, to serve
until their respective successors have been duly elected and qualified; and
2. To consider and vote upon a proposal to approve an amendment to the
Company's Articles of Incorporation to change the Company's corporate name to
"FirstCom Corporation".
The Board of Directors has fixed the close of business on September 16,
1998 as the record date for the determination of the shareholders entitled to
notice of, and to vote at, the Annual Meeting or any adjournments thereof.
Whether or not you expect to be present, please sign, date and return
the enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By order of the Board of Directors,
Patricio E. Northland
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
Coral Gables, Florida
September 25, 1998
<PAGE>
YOUR VOTE IS IMPORTANT
PLEASE RETURN YOUR PROXY CARD PROMPTLY
SHAREHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. ANY SHAREHOLDER
WHO DOES NOT EXPECT TO ATTEND THE ANNUAL MEETING IS URGED TO INDICATE VOTING
INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN IT, AND RETURN IT IN THE
ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IN
ORDER TO AVOID UNNECESSARY EXPENSE, WE ASK YOUR COOPERATION IN MAILING YOUR
PROXY CARD PROMPTLY, NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
THE FOLLOWING GENERAL RULES FOR EXECUTING PROXY CARDS MAY BE OF
ASSISTANCE TO YOU AND HELP AVOID THE TIME AND EXPENSE INVOLVED IN VALIDATING
YOUR VOTE IF YOU FAIL TO EXECUTE YOUR PROXY CARD PROPERLY.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the
party signing should conform exactly to a name shown in the
registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing, which can be shown either in the form of the account
registration itself or by the individual executing the proxy
card. For example:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
------------ ---------------
<S> <C>
A. 1. ABC Corp. John Smith, Treasurer
2. ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1. ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2. ABC Trust Ann B. Collins, Trustee
3. Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
</TABLE>
<PAGE>
1998 ANNUAL MEETING OF SHAREHOLDERS
OF
INTERAMERICAS COMMUNICATIONS CORPORATION
----------------
PROXY STATEMENT
----------------
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of InterAmericas Communications Corporation, a Texas
corporation (the "Company" or "ICCA"), of proxies from the holders of the
Company's Common Stock, par value $.001 per share (the "Common Stock"), for use
at the 1998 Annual Meeting of Shareholders of the Company to be held on
Thursday, October 22, 1998, or at any adjournment(s) thereof pursuant to the
attached Notice of Annual Meeting of Shareholders. The approximate date that
this Proxy Statement and the enclosed form of proxy are first being sent to
holders of Common Stock is September 25, 1998. Shareholders should review the
information provided herein in conjunction with the Company's 1997 Annual Report
on Form 10-KSB, as amended, which accompanies this Proxy Statement. The
Company's principal executive offices are located at 2600 Douglas Road, Suite
501, Coral Gables, Florida 33134, and its telephone number is (305) 448-4422.
INFORMATION CONCERNING PROXY
The enclosed form of proxy is solicited on behalf of the Company's
Board of Directors. The giving of a proxy does not preclude the right to vote in
person should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person, at the Annual Meeting or by filing with the Company's
Secretary at the Company's principal executive offices a written revocation or
duly executed proxy bearing a later date; however, no such revocation will be
effective until written notice of the revocation is received by the Company at
or prior to the Annual Meeting. Presence at the Annual Meeting will not, of
itself, revoke the proxy.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is to be borne
by the Company. In addition to the use of mail, employees of the Company may
solicit proxies personally and by telephone. The Company will also use the
services of Corporate Investor Communications, Inc. to solicit proxies at a cost
of up to $10,000. The Company's employees will receive no compensation for
soliciting proxies other than their regular salaries. The Company may request
banks, brokers and other custodians, nominees and fiduciaries to forward copies
of the proxy material to their principals and to request authority for the
execution of proxies. The Company may reimburse such persons for their expenses
in so doing.
PURPOSES OF THE MEETING
The purpose of the Annual Meeting is to consider and act upon the
following proposals and to transact such other business as may properly come
before the Annual Meeting or any adjournments thereof:
1. To elect five members to the Company's Board of Directors, to serve
until their respective successors have been duly elected and qualified; and
2. To consider and vote upon a proposal to approve an amendment to the
Company's Articles of Incorporation to change the Company's corporate name to
"FirstCom Corporation".
<PAGE>
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted in favor of all the proposals described in the Notice of Annual
Meeting and in the discretion of the proxy holder as to any other matter which
may properly come before the Annual Meeting. In the event that a shareholder
specifies a different choice by means of the enclosed proxy, his or her shares
will be voted in accordance with the specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on September 16,
1998 as the record date (the "Record Date") for determining shareholders of the
Company entitled to notice of, and to vote at, the Annual Meeting. As of the
Record Date, there were 19,084,300 shares of Common Stock issued and
outstanding, all of which are entitled to be voted at the Annual Meeting. Each
share of Common Stock is entitled to one vote on all matters to be acted upon at
the Annual Meeting, and neither the Company's Articles of Incorporation nor
Bylaws provides for cumulative voting rights.
The attendance, in person or by proxy, of the holders of a majority of
the shares of Common Stock entitled to vote at the Annual Meeting is necessary
to constitute a quorum. The affirmative vote of a majority of the shares of
Common Stock present in person or by proxy at the Annual Meeting is required for
the approval of each matter that is submitted to shareholders for approval
except that the proposal to amend the Company's Articles of Incorporation to
change the Company's corporate name to " FirstCom Corporation" requires the
affirmative vote of at least a majority of the outstanding shares of Common
Stock entitled to vote. An independent inspector shall count the votes and
ballots. Abstentions are considered as shares present and entitled to vote but
are not counted as votes cast in the affirmative on a given matter. A broker or
nominee holding shares registered in its name, or in the name of its nominee,
which are beneficially owned by another person and for which it has not received
instructions as to voting from the beneficial owner, has the discretion to vote
the beneficial owner's shares with respect to the election of directors and to
change the Company's corporate name to "FirstCom Corporation". If less than a
majority of the outstanding shares of Common Stock are represented at the Annual
Meeting, a majority of the shares so represented may adjourn the Annual Meeting
from time to time without further notice.
2
<PAGE>
SECURITY OWNERSHIP
The following table sets forth, as of September 16, 1998, information
with respect to the beneficial ownership of the Company's Common Stock by (i)
each director of the Company (each of whom constitute nominees for election as
directors at the Annual Meeting), (ii) (A) the Company's Chief Executive
Officer, and (B) the only other executive officer of the Company at the end of
fiscal 1997 whose compensation exceeded $100,000 (the persons referred to in
(ii) (A) and (B) are hereinafter collectively referred to as the "Named
Executive Officers"), (iii) the beneficial owners of more than 5% of the
outstanding Common Stock and (iv) all directors and executive officers of the
Company, as a group.
<TABLE>
<CAPTION>
AMOUNT AND PERCENTAGE
NATURE OF OF
BENEFICIAL OUTSTANDING
NAME AND ADDRESS OWNERSHIP(1) SHARES(2)
- ---------------------------------------------------------------------- -------------------- ------------------
<S> <C> <C> <C>
Patricio E. Northland(3)(4)........................................... 2,676,000 8.0%
Douglas G. Geib II(3)(5).............................................. 940,667 2.8%
George Cargill(6)..................................................... 2,040,000 6.1%
David C. Kleinman(7).................................................. 100,000 *
Andrew Hulsh(8)....................................................... 50,000 *
UBS Securities LLC(9)................................................. 2,250,000 6.7%
Hernan Streeter (10).................................................. 2,750,000 8.2%
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (5 persons) 5,806,667 17.4%
</TABLE>
- ----------------------
* Less than 1%.
(1) Includes shares of Common Stock which may be acquired pursuant to
options and warrants exercisable within 60 days of September 16, 1998.
(2) Based on 33,422,698 shares of Common Stock issued and outstanding on
September 16, 1998, plus shares of Common Stock which may be acquired
pursuant to options and warrants exercisable within 60 days of
September 16, 1998.
(3) The address of this person is 2600 Douglas Road, Suite 501, Coral
Gables, Florida 33134.
(4) Includes 2,076,000 shares of Common Stock which may be acquired upon
the exercise of outstanding stock options.
(5) Includes 690,667 shares of Common Stock which may be acquired upon the
exercise of outstanding stock options.
(6) The address of this person is Eliodoro Yanez 2238, Santiago, Chile.
Includes 320,000 shares of Common Stock which may be acquired upon the
exercise of outstanding stock options and 20,000 shares of Common Stock
which may be acquired upon the exercise of outstanding warants.
(7) The address of this person is 1101 E. 58th Street, Chicago, Illinois
60637. Represents shares of Common Stock which may be acquired upon the
exercise of outstanding stock options.
(8) The address of this person is 1200 Brickell Avenue, 19th Floor, Miami,
Florida 33131. Represents shares of Common Stock which may be acquired
upon the exercise of outstanding stock options.
(9) The address of this company is 299 Park Avenue, New York, New York
10171. Represents shares of Common Stock which may be acquired upon the
exercise of outstanding warrants.
(10) The address of this person is El Algarrobo 1414, Los Dominicos, Las
Conde, Santiago, Chile. Includes 510,000 shares of Common Stock which
may be acquired upon the exercise of outstanding stock options.
3
<PAGE>
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
<TABLE>
<CAPTION>
POSITION WITH
NAME AGE THE COMPANY
- ---- --- -------------
<S> <C>
Patricio E. Northland.................. 43 Chairman of the Board of Directors, President and Chief Executive Officer
Douglas G. Geib II..................... 42 Chief Financial Officer
</TABLE>
PATRICIO E. NORTHLAND has over seventeen years of experience as an international
telecommunications executive and entrepreneur. Mr. Northland has been President,
Chairman of the Board of Directors and Chief Executive Officer of the Company
since November 1996. Born in Chile, Mr. Northland is a U.S. citizen who brings
to the Company many relationships with telecommunications carriers and potential
customers throughout Latin America. In 1991, Mr. Northland founded AmericaTel
Corporation ("AmericaTel"), a Miami-based international telecommunications
carrier focused on traffic originating and terminating in Latin America, and in
1993, Mr. Northland successfully completed a joint venture agreement between
AmericaTel and Entel, Chile's major long distance carrier. Under Mr. Northland's
leadership, AmericaTel grew to provide satellite-based voice, data and fax
telecommunications services to corporate customers in several Latin American
nations. Prior to his involvement with AmericaTel, Mr. Northland held key
management positions with PanamSat and IntelSat. In 1996, Mr. Northland sold his
interest in AmericaTel to Entel. Mr. Northland holds engineering degrees from
the University of Chile, a master's degree in communications from George
Washington University, and an M.B.A. from The University of Chicago.
DOUGLAS G. GEIB II has been the Chief Financial Officer and a Director of the
Company since May 1997. For almost 20 years prior thereto, Mr. Geib worked with
Ernst & Young LLP and had been a Partner since 1989. While at Ernst & Young, Mr.
Geib provided corporate finance and audit services, as well as coordinated and
managed various consulting services to clients involved in telecommunications,
healthcare, manufacturing, real estate and consumer products. Mr. Geib holds an
undergraduate business degree from The Ohio State University and an M.B.A. from
The University of Chicago. Mr. Geib is a Certified Public Accountant.
Executive officers serve at the pleasure of the Board of Directors,
except as otherwise provided below. See "Executive Compensation -- Employment
Agreements. "
PROPOSAL FOR THE ELECTION OF DIRECTORS
At the Annual Meeting, the shares represented by the proxies obtained
hereby, unless otherwise specified, will be voted for the election as directors
of the five nominees hereinafter named. It is intended that the proxies
solicited by the Board of Directors will be voted for the election of Messrs.
Northland, Geib, Cargill, Kleinman and Hulsh, each to serve until the next
Annual Meeting of Shareholders and until their respective successors have been
duly elected and qualified. The Board of Directors has no reason to believe that
any nominee will refuse or be unable to accept election. However, if any one or
more of the nominees herein named should not be available for election, the
proxies will be voted for such substitute nominee(s), if any, as the Board of
Directors may propose. Proxies cannot be voted at the Annual Meeting for a
greater number of persons than the five nominees named in this Proxy Statement,
although persons in addition to those nominees may be nominated by the
shareholders at the Annual Meeting.
4
<PAGE>
The following information is set forth with respect to each person
nominated for election as a director of the Company. Messrs. Northland and Geib,
executive officers and directors of the Company, are also nominees for director
at the Annual Meeting. Reference is made to the information set forth above
under "Executive Officers" for a description of the business experience of such
individuals.
The following table sets forth certain information regarding each
director and nominee for director:
<TABLE>
<CAPTION>
POSITION WITH
NAME AGE THE COMPANY DIRECTOR SINCE
- ---- --- ------------- --------------
<S> <C> <C> <C>
Patricio E. Northland 43 Chairman of the Board of Directors, President
and Chief Executive Officer November 1996
Douglas G. Geib II 42 Director and Chief Financial Officer May 1997
David C. Kleinman 62 Director May 1997
George A. Cargill 56 Director July 1994
Andrew Hulsh 37 Director December 1997
</TABLE>
DAVID C. KLEINMAN has been a Director of the Company since May 1997.
Mr. Kleinman is currently Adjunct Professor of Strategic Management at the
Graduate School of Business of The University of Chicago where he has taught
since 1971. Mr. Kleinman serves as a member of the Board of Directors of Irex
Corporation which trades its stock in the over-the-counter market. Mr. Kleinman
is also a member of the Board of Directors of the Acorn Fund, the Acorn
International Fund and the Acorn USA Fund which are registered under the
Investment Company Act of 1940 and he serves as a member of the Board of
Directors of Sonic Foundry, Inc., which trades its stock on the American Stock
Exchange.
GEORGE A. CARGILL has been a Director of the Company since July 1994.
Mr. Cargill has been the President and owner of Telectronic S.A., a major
Chilean systems integrator and the Northern Telecom equipment distributor in
Chile since 1976. Prior thereto, Mr. Cargill spent seven years with CTC as a
network engineer and manager of quality control.
ANDREW HULSH has been a Director of the Company since December 1997.
Mr. Hulsh has been a partner with the law firm of Baker & McKenzie since January
1997. For more than five years prior thereto, Mr. Hulsh was an attorney with the
law firm of Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, P.A., most
recently as a shareholder.
There are no family relationships among any of the Company's directors and
officers.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10 percent of the Company's Common Stock, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than 10 percent shareholders are
required by regulations promulgated by the SEC to furnish the Company with
copies of all Section 16(a) forms that such persons file with the SEC.
5
<PAGE>
With reference to transactions during fiscal 1997, to the Company's
knowledge, based solely on review of the copies of such reports furnished to the
Company, the Company believes that the following persons did not file on a
timely basis the following reports required by Section 16(a) of the Exchange
Act. Mr. Kleinman was elected a director in May 1997 and received options to
purchase 200,000 shares of Common Stock. Mr. Kleinman did not file the Form 3 to
report such matters within 10 days of his election. Mr. Kleinman reported such
matters on the Form 5 for fiscal 1997. Mr. Northland was issued 600,000 shares
of Common Stock and granted options to purchase 900,000 shares of Common Stock
in September 1997, and options to purchase 714,000 shares of Common Stock in
October 1997. Mr. Northland did not file the Form 4 to report such transactions.
Mr. Northland reported such transactions on the Form 5 for fiscal 1997. Mr. Geib
was issued 250,000 shares of Common Stock and granted options to purchase
250,000 shares of Common Stock in September 1997 and options to purchase 286,000
shares of Common Stock in October 1997. Mr. Geib did not file the Form 4 to
report such transactions. Mr. Geib reported such transactions on the Form 5 for
fiscal 1997. Mr. Cargill was granted options to purchase 50,000 shares of Common
Stock in December 1997. Mr. Cargill filed the Form 5 for fiscal 1997 to report
such transactions two days after the date such report was due to be filed.
The Board of Directors held seven meetings during 1997. All of the
Company's directors attended more than 75% of the aggregate of (i) the total
number of meetings of the Board of Directors and (ii) the total number of
meetings held by all committees of the Board of Directors on which such person
served.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Audit, Nominating and Compensation
Committee. The members of each committee have been appointed by the Board of
Directors to serve until their respective successors are elected and qualified.
AUDIT COMMITTEE. The Audit Committee's function is to review the scope
and results of the audit of the financial statements of the Company and reviews
the internal accounting, financial and operating control procedures of the
Company. The Audit Committee is composed of Messrs. Kleinman and Cargill, each
of whom is independent of management and free from any relationship that, in the
opinion of the Board of Directors, would interfere with the exercise of
independent judgment as a committee member. The Audit Committee met once in
1997.
NOMINATING COMMITTEE. The Nominating Committee's function is to
consider nominees for membership on the Board of Directors who are recommended
by the Company's shareholders. Any nomination by a shareholder of a person to
serve as a director of the Company is required to be made pursuant to notice in
writing to the Secretary of the Company delivered to or mailed and received at
the principal executive offices of the Company not less than 90 days prior to
the meeting at which directors are to be elected; provided, however, that in the
event that less than 90 days' notice or prior public disclosure of the date of
such meeting is given or made to shareholders, notice by the shareholder to be
timely must be so received not later than the close of business on the 7th day
following the day on which such notice of the date of such meeting was mailed or
such public disclosure was made. Such shareholder's notice to the Secretary must
set forth (a) as to each person whom the shareholder proposes to nominate for
election as a director (i) the name, age, business address and residence address
of such person, (ii) the principal occupation or employment of such person,
(iii) the class and number of any shares of the Company or any subsidiary of the
Company which are beneficially owned by such person, (iv) any lawsuits to which
such person is a party, (v) the involvement of such person in or with any
business which may be competitive with the Company and (vi) any other
information relating to such person that is required to be disclosed in
solicitations for proxies for election of directors or in a Schedule 13D
pursuant to any then existing rule or regulation promulgated under the Exchange
Act; and (b) as to the shareholder giving the notice (i) the name and record
address of such shareholder and (ii) the class and number of shares of the
Company which are beneficially owned by such shareholder. The Company may
require any proposed nominee to furnish such other information as may reasonably
be required by the Company to determine the eligibility of such proposed nominee
as a director. The Nominating Committee is composed of Messrs. Northland and
6
<PAGE>
Kleinman and met one time in 1997. The Board of Directors performed the
functions that were normally performed by the Nominating Committee in 1997.
COMPENSATION COMMITTEE. The Compensation Committee's function is to
determine the cash and other incentive compensation, if any, to be paid to the
Company's executive officers. The Compensation Committee is also responsible for
the administration and award of stock options and warrants issued pursuant to
individual stock option and warrant agreements. The Compensation Committee is
composed of Messrs. Kleinman, Cargill and Hulsh, each of whom is a
"disinterested person" within the meaning of Rule 16b-3 under the Exchange Act.
The Compensation Committee met two times in 1997.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee is composed entirely of independent outside
members of the Board of Directors. The Compensation Committee's function is to
review and approve each of the elements of the executive compensation program of
the Company and assess the effectiveness and competitiveness of the program. In
addition, the Compensation Committee's function is to administer the stock
option and restricted stock purchase program and other key provisions of the
executive compensation program and review with the Board of Directors all
aspects of compensation for the Company's executives.
COMPENSATION PHILOSOPHY
The Company's executive compensation program has been designed to (i)
align executive compensation with shareholder interests; (ii) attract, retain
and motivate a highly competent executive team, (iii) link compensation to
individual and Company performance and (iv) achieve a balance between incentives
for short-term and long-term results. The Company's executive compensation
package consists of the payment of a base salary, the opportunity to be paid a
cash bonus and the issuance of stock options. The Company positions base
salaries at competitive levels; however, an annual bonus has historically been
paid to reward exceptional performance. The Company also believes in providing
rewards for the creation of shareholder value through the use of stock options.
The Company and the Compensation Committee believe that this philosophy will
motivate the Company's executives and, thereby, reinforce the accomplishment of
the Company's strategic and financial goals.
ELEMENTS OF THE EXECUTIVE COMPENSATION PROGRAM
BASE SALARIES
The Company's salary levels for executive officers are determined in
accordance with employment agreements between the Company and such executives.
The amounts paid resulted from negotiations between the Company and such
executive officers, and are believed to be competitive with amounts paid by
other similarly-situated public companies in the telecommunications industry to
executives in similar positions. The Compensation Committee believes that the
emerging nature of the Company's business, coupled with the attendant risks,
required that the Company offer a very competitive compensation package in order
to attract executive officers of the caliber required to enable the Company to
achieve its business objectives. Salary increases are designed to reflect
competitive practices in the industry, financial performance of the Company and
individual performance of the executive.
BONUSES
Bonuses paid to the Company's executive officers are determined on the
same basis as base salaries.
7
<PAGE>
LONG-TERM INCENTIVES
The objectives of the Company's long-term incentive program are to
offer opportunities for stock ownership that are competitive with those at peer
companies and to encourage and create ownership and retention of the Company's
stock by key employees. Grant levels under the Company's employee stock option
plans consider such factors as awards to officers of companies within the
Company's peer group, the executive's tenure, responsibilities and current stock
and option holdings.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee is responsible for recommending the bonus to
be paid to the Chief Executive Officer and such compensation is determined in
the same manner as the compensation of the other officers of the Company.
SECTION 162(M) COMPLIANCE
The Company does not presently anticipate that the compensation of any
of the Named Executive Officers will exceed the $1,000,000 non-performance based
compensation threshold of Section 162(m) of the Internal Revenue Code. The
Company and the Committee will continue to monitor the compensation levels of
the Named Executive Officers and determine the appropriate response to Section
162(m) when and if necessary.
<TABLE>
COMPARATIVE STOCK PERFORMANCE CHART
30-Jan-95 31-Dec-95 31-Dec-96 31-Dec-97
<S> <C> <C> <C> <C>
ICCA 100 38.89 54.17 43.06
Latin American Telecom Composite 100 103.81 83.07 53.12
S&P 500 100 131.47 158.11 207.13
NASDAQ Composite 100 139.94 171.72 208.87
NASDAQ Telecom Composite 100 134.11 138.97 197.35
</TABLE>
The foregoing stock performance chart compares the cumulative total
shareholder return on the Company's Common Stock since January 30, 1995 with the
S&P 500, Latin American Telecom Composite Index, Nasdaq Telecom Composite Index
and Nasdaq Composite Index. In the Company's proxy statement for the 1997 Annual
Meeting of Shareholders, the Company included the Nasdaq Composite Index and
Nasdaq Telecom Composite Index in its stock performance chart. The Company has
selected the S&P 500 for use in this proxy statement because the Company
believes that such index provides a more meaningful representation of the broad
equity market than the Nasdaq Composite Index
8
<PAGE>
and has selected the Latin American Telecom Composite Index for use in this
proxy statement because the Company believes that such index provides a more
meaningful representation of the Company's peer group in Latin America than the
Nasdaq Telecom Composite Index. For subsequent years, the Company will use the
S&P 500 and Latin American Telecom Composite Index, as comparable indexes in its
stock performance chart. The Latin American Telecom Composite Index is a market
cap weighted index consisting of Compania de Telecommunicaciones de Chile S.A.,
Empresas Nacional de Telecommunicaciones S.A., Telefonica del Peru S.A., TELE
2000 S.A. and Empresas Telex Chile S.A.
The following table shows, for 1995, 1996 and 1997, the compensation
earned by the Named Executive Officers.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------------------- ----------------------- ----------
OTHER
ANNUAL RESTRICTED SECURITIES ALL OTHER
NAME AND PRINCIPAL COMPEN- STOCK UNDERLYING LTIP COMPENSATION
POSITION(S) YEAR SALARY ($) BONUS($) SATION($)(1) AWARDS($) OPTIONS(#) PAYOUTS($) ($)(1)
------------------ ---- ---------- -------- -------------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Patricio E. Northland 1997 300,000 630,000 -- -- 1,614,000(2) -- --
Chairman of the Board 1996 50,000 -- -- -- 1,000,000 -- --
President and CEO(2) 1995 -- -- -- -- -- -- --
Douglas G. Geib(3) 1997 166,667 170,000 -- -- 1,036,000 -- --
Chief Financial Officer 1996 -- -- -- -- -- -- --
1995 -- -- -- -- -- -- --
</TABLE>
(1) Perquisites to each officer did not exceed the lesser of $50,000 or 10%
of the total salary and bonus for such officer.
(2) Effective as of November 23, 1996.
(3) Mr. Geib commenced employment with the Company on May 1, 1997. See
"Employment and Consultants Agreements."
The following table sets forth information regarding the grant of stock
options during 1997 to the Named Executive Officers. The Company has no
outstanding stock appreciation rights. None of the Named Executive Officers
exercised stock options during 1997.
STOCK OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
POTENTIAL REALIZED
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE PRICE OPTION TERM ($)
OPTIONS EMPLOYEES IN PER EXPIRATION ---------------------------
NAME GRANTED(#) FISCAL YEAR SHARE($/SH) DATE 5% ($) 10% ($)
- --------------------- ---------- ------------- -------------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Patricio E. Northland. . . . . . . .1,614,000 57% 3.85 Oct. 2007 3,907,000 9,903,000
Douglas G. Geib II . . . . . . . . .1,036,000 36% 2.90 Oct. 2007 1,889,000 4,788,000
</TABLE>
9
<PAGE>
The following table sets forth information with respect to the Named
Executive Officers concerning the exercise of options during 1997 and
unexercised options held as of the end of 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FY-END (#) FY-END ($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- --------------------- ----------- ----------- ------------- -------------
<S> <C> <C>
Patricio E. Northland . . . . . . . -- -- 1,538,000/1,076,000 --/--
Douglas G. Geib II . . . . . . . . -- -- 345/000/691,000 --/--
</TABLE>
DIRECTOR COMPENSATION
Each non-employee director of the Company, or any of its subsidiaries,
is entitled to be paid such compensation for his services and reimbursed for
such expenses as fixed by the Board of Directors. Currently, non-employee
directors of the Company are entitled to receive annual compensation consisting
of a quarterly fee of $5,000, stock options to acquire 50,000 shares of Common
Stock for serving on the Board of Directors and stock options to acquire 15,000
shares of Common Stock for serving on each committee at a price calculated on
the average closing price of the Common Stock for the five trading days
immediately preceding the date of such grant.
EMPLOYMENT AGREEMENTS
In September 1997, the Company entered into an employment and severance
agreement (the "Northland Agreement") with Patricio E. Northland, President,
Chief Executive Officer and Chairman of the Board, which replaced his former
employment agreement with the Company. The Northland Agreement has a term of
three years unless terminated earlier for cause, death or disability, and
provides for an initial annual salary of $350,000, subject to an increase of
$50,000 in each of the second and third year of the agreement. The Northland
Agreement also provides for an annual bonus for Mr. Northland in an amount not
to exceed his prevailing annual base salary based upon the Company's incremental
revenues. In addition, Mr. Northland was granted non-qualified stock options to
purchase 300,000 shares of Common Stock in the following manner: 100,000 shares
which vest on the date of employment at an exercise price of $4.00 per share;
100,000 shares which vest one year thereafter at an exercise price of $6.00 per
share; and 100,000 shares which vest two years after the date of employment at
an exercise price of $8.00 per share. In consideration of Mr. Northland's
agreement to terminate his former employment agreement with the Company, which
would have provided for a substantial bonus to Mr. Northland in October 1997 in
connection with the Company's $150 million offering of notes and warrants to
purchase shares of Common Stock, the Company agreed to pay Mr. Northland a
performance bonus of $250,000 and vest all of his existing options to acquire
1,000,000 shares of Common Stock granted under his prior employment agreement.
In April 1997, the Company entered into an employment and severance
agreement (the "Geib Agreement") with Douglas G. Geib II, Chief Financial
Officer of the Company. The Geib Agreement has a term of three years unless
terminated earlier for cause, death or disability, and provides for an annual
salary of $250,000. The Geib Agreement also provides for an annual performance
bonus for Mr. Geib in an amount not to exceed $250,000. Mr. Geib was also
granted non-qualified stock options to purchase 500,000 shares of Common Stock
at an exercise price of $2.42 per share. One-third of such options became
exercisable on date of employment, and the remainder vest in equal annual
installments over the first two years of Mr. Geib's three-year employment
period.
10
<PAGE>
PROPOSAL TO APPROVE CHANGE OF
CORPORATE NAME
The Board of Directors has unanimously adopted a resolution to change
the name of the Company to "FirstCom Corporation". If approved by the
shareholders of the Company, the Company will amend Article I of the Company's
Articles of Incorporation to read as follows:
"THE NAME OF THE CORPORATION SHALL BE FIRSTCOM CORPORATION."
The name change will become effective upon the filing of an amendment
to the Company's Articles of Incorporation with the Department of State of the
State of Texas (the "Amendment").
Since the founding of the Company in 1989, the Company's name has
changed two times as its business has evolved. The proposed name change reflects
the next phase of growth in the Company's development.
Prior to November 1996, the Company operated as a development stage
company whose activities primarily consisted of the acquisition of licenses,
concessions and rights-of-way in certain key Latin American markets. Beginning
in November 1996, with the hiring of a new management team, the Company has
focused on the development and operation of high capacity fiber optic networks
in Lima, Peru and Santiago, Chile. In 1998, the Company changed the name of its
Chilean and Peruvian subsidiaries to " FirstCom Long Distance S.A." and
"FirstCom Networks S.A.", respectively. The Board of Directors believes that it
would be in the best interests of the Company to conduct all of its businesses
under a single brand name to develop name recognition for its services,
facilitate customer referrals and achieve economies of scale through a unified
marketing campaign. The Board of Directors believes that the Company will
facilitate these objectives by changing the Company's name to "FirstCom
Corporation".
Stock certificates representing the Common Stock issued prior to the
effective date of the change in the corporate name to "FirstCom Corporation"
will continue to represent the same number of shares, remain authentic and will
not be required to be returned to the Company or its transfer agent for
reissuance. New stock certificates issued upon transfers of shares of Common
Stock after the name change will bear the name "FirstCom Corporation." Delivery
of existing stock certificates will continue to be accepted in a stock sale
transaction made by a shareholder after the corporate name is changed.
The Company's cost of effecting the name change will not be material.
The public announcement of the change of the corporate name will consist
principally of announcements placed in the business and financial press. The
Company will use its best efforts to register the name "FirstCom" in the United
States, Chile and Peru. The Company does not plan to conduct a full-scale
corporate advertising campaign regarding the name change.
The full text of the Amendment is attached to this Proxy Statement as
EXHIBIT A. The foregoing description of the Amendment is qualified in its
entirety by reference to EXHIBIT A.
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting will be required
for approval of the change of the Company's corporate name to "FirstCom
Corporation".
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION TO CHANGE THE COMPANY'S
CORPORATE NAME TO "FIRSTCOM CORPORATION".
11
<PAGE>
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors knows of
no other business to be presented at the Company's 1998 Annual Meeting of
Shareholders. If any other business should properly come before the Company's
1998 Annual Meeting of Shareholders, the persons named in the accompanying proxy
will vote thereon as in their discretion they may deem appropriate, unless they
are directed by a proxy to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the SEC, proposals of
shareholders intended to be presented at the Company's 1999 Annual Meeting of
Shareholders must be received in writing by the Company's Secretary at the
Company's principal executive offices not later than May 29, 1999 in order to be
included in the Company's Proxy Statement and form of Proxy relating to that
Annual Meeting.
By Order of the Board of Directors
Patricio E. Northland
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
Coral Gables, Florida
September 25, 1998
12
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
INTERAMERICAS COMMUNICATIONS CORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, InterAmericas Communications Corporation, a Texas corporation
(the "Corporation"), hereby adopts the following Articles of Amendment to its
Articles of Incorporation:
ARTICLE ONE
The name of the Corporation is InterAmericas Communications
Corporation.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by
the shareholders of the Corporation on ______________, 1998. Article I of the
Articles of Incorporation of the Corporation is hereby amended so as to read in
its entirety as follows:
"ARTICLE I
The name of the Corporation is: FirstCom Corporation."
ARTICLE THREE
The number of shares of the Corporation outstanding at the time of the
adoption of the amendment set forth in Article Two above was 19,084,300; and the
number of shares entitled to vote thereon was 19,084,300.
ARTICLE FOUR
The number of shares voted for the amendment set forth in Article Two
above was ________________; and the number of shares voted against the amendment
set forth in Article Two above was ________________.
DATED: , 1998
INTERAMERICAS COMMUNICATIONS CORPORATION
By: _______________________________________
Patricio E. Northland
President and Chief Executive Officer
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF BOARD OF DIRECTORS OF
INTERAMERICAS COMMUNICATIONS CORPORATION.
The undersigned hereby appoints Patricio E. Northland and Douglas G.
Geib II and, each of them, as proxies each with full power of substitution to
vote, as directed below, all shares of Common Stock, par value $.001 per share,
of the Company held or owned by the undersigned at the Annual Meeting of
Shareholders (the "Annual Meeting") of InterAmericas Communications Corporation
(the "Company") to be held at the InterContinental Hotel, 201 S. Biscayne Blvd.,
Miami, Florida 33131 on Tuesday, October 20, 1998 at 10:00 a.m., local time, and
at any adjournments thereof, hereby revoking any proxies heretofore given.
1. ELECTION OF DIRECTORS: FOR all nominees listed below
(except as set forth to the contrary below) [ ]
WITHHOLD AUTHORITY to vote for all nominees listed below [ ]
Patricio E. Northland, Douglas G. Geib II, David Kleinman,
George Cargill and Andrew Hulsh
(INSTRUCTION: To withhold authority to vote for an individual
nominee, write that nominee's name on the space provide below.)
____________________________________________________________
2. AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION to change the
Company's corporate name to "FirstCom Corporation".
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON ANY OTHER
BUSINESS WHICH PROPERLY COMES BEFORE THE MEETING AND AT ANY
ADJOURNMENTS THEREOF.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREBY
BY THE UNDERSIGNED SHAREHOLDERS. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED IN FAVOR OF ALL NOMINEES AND FOR PROPOSAL NO. 2.
PLEASE REFER TO THE FOREPART OF THE PROXY STATEMENT FOR INSTRUCTIONS ON SIGNING
THE PROXY CARD.
DATED: _________________, 1998
______________________________
Signature
