<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
WorldPort Communications, Inc.
------------------------------
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
WORLDPORT COMMUNICATIONS, INC.
1825 Barrett Lakes Blvd., Suite 100
Kennesaw, Georgia 30144
April 17, 2000
Notice of Annual Stockholders Meeting:
You are hereby notified that the 2000 Annual Meeting of Stockholders (the
"Meeting") of WorldPort Communications, Inc. (the "Company") will be held at the
Hyatt Hotel located at 1750 Lake Cook Rd, Northbrook, Illinois at 1:00 p.m.
central time, on Monday, May 15, 2000, for the following purposes:
1. To elect five directors to hold office until the 2001 Annual Meeting;
2. To approve the Company's 2000 Long-term Stock Incentive Plan;
3. To approve a change in the name of the Company to [new name] and to
amend the Certificate of Incorporation accordingly;
4. To approve an increase in the number of authorized shares of Common
Stock from 65,000,000 to 200,000,000 and to amend the Certificate of
Incorporation accordingly;
5. To ratify the selection of Arthur Andersen LLP as the Company's
independent accountants for the year ending December 31, 2000; and
6. To transact such other business as may properly come before the Meeting
or any adjournment thereof.
Each of these proposals is described in greater detail in the enclosed
Proxy Statement. The Board of Directors has fixed the close of business on
March 22, 2000 as the record date for the determination of stockholders entitled
to notice of and to vote at the Meeting.
You are invited to attend the Meeting in person. Whether or not you expect
to be present in person at the Meeting, please vote, sign and date the enclosed
proxy and return it in the envelope provided.
By Order of the Board of Directors
Carl J. Grivner
Chief Executive Officer
<PAGE>
WORLDPORT COMMUNICATIONS, INC.
1825 Barrett Lakes Blvd., Suite 100
Kennesaw, Georgia 30144
2000 ANNUAL MEETING OF STOCKHOLDERS
APRIL 17, 2000
----------------------------------------------
PROXY STATEMENT
-----------------------------------------------
This Proxy Statement and the accompanying proxy are furnished to
stockholders of WorldPort Communications, Inc. (the "Company") in connection
with the solicitation of proxies by the Company's Board of Directors for use at
the 2000 Annual Meeting of Stockholders (the "Meeting") to be held at the Hyatt
Hotel located at 1750 Lake Cook Rd, Northbrook, Illinois at 1:00 p.m. central
time, on Monday, May 15, 2000, for the purposes set forth in the accompanying
Notice of Meeting. This Proxy Statement, the form of proxy included herewith
and the Company's Annual Report to Stockholders for the fiscal ended December
31, 1999 are being mailed to stockholders on or about April 18, 2000.
Stockholders of record at the close of business on March 22, 2000 are
entitled to notice of and to vote at the Meeting. On such date there were
outstanding:
. 28,737,589 shares of the Company's Common Stock, par value $0.0001
per share (the "Common Stock");
. 965,642 shares of the Company's Series B Convertible Preferred Stock,
par value $0.0001 per share (the "Series B");
. 1,416,030 shares of the Company's Series C Convertible Preferred
Stock, par value $0.0001 per share (the "Series C");
. 316,921 shares of the Company's Series D Convertible Preferred Stock,
par value $0.0001 per share (the "Series D"); and
. 141,603 shares of the Company's Series E Convertible Preferred Stock,
par value $0.0001 per share (the "Series E").
The presence, in person or by proxy, of the holders of a majority of the
securities outstanding and entitled to vote at the Meeting is necessary to
constitute a quorum. In deciding all questions, each holder of Common Stock
shall be entitled to one vote, in person or by proxy, for each share held on the
record date. All holders of Series B vote as a single class with the Common
Stock with each share of Series B entitled to 40 votes per share. All holders
of Series C vote as a single class with the Common Stock with each share of
Series C entitled to 10.865 votes per share. All holders of Series D vote as a
single class with the Common Stock with each share of Series D entitled to one
vote per share. All holders of Series E vote as a single class with the Common
Stock with each share of Series E entitled to 10.865 votes per share.
<PAGE>
The information contained in this Proxy Statement relating to the
occupations and security holdings of directors and officers of the Company and
their transactions with the Company is based upon information received from each
individual as of March 22, 2000.
VOTING RIGHTS AND SOLICITATION OF PROXIES
The Company and its Chief Executive Officer have received
irrevocable proxies from certain of the Company's stockholders directing such
proxy holders to vote such stockholders' shares of Series B and Series D
Preferred Stock in favor of the following proposals:
. To approve the Company's 2000 Long-term Stock Incentive Plan; and
. To increase the number of authorized shares of Common Stock from
65,000,000 to 200,000,000 and to amend the Certificate of Incorporation
accordingly.
Such shares, together with the shares controlled by the Company's officers and
directors, represent approximately 94 million votes, or approximately 75% of the
total outstanding voting power of the Company, which is sufficient under the
Delaware General Corporation Law to approve both of the proposals described
above.
All expenses incurred in the solicitation of proxies will be borne by the
Company. In addition to the use of the mails, proxies may be solicited on
behalf of the Company by directors, officers and employees of the Company.
Following the original mailing of the proxies and other soliciting materials,
employees of the Company will request brokers, custodians, nominees and other
record holders to forward copies of the proxy and other soliciting materials to
persons for whom they hold shares of Common Stock and to request authority for
the exercise of proxies. In such cases, the Company, upon the request of the
record holders, will reimburse such holders for their reasonable expenses.
Votes cast by proxy or in person at the Meeting will be tabulated by the
election inspector appointed for the Meeting who will determine whether or not a
quorum is present. Neither the Company's Certificate of Incorporation, By Laws
nor Delaware corporate statutes address the treatment and effect of abstentions
and broker non-votes; the election inspector will treat abstentions as shares
that are present and entitled to vote for purposes of determining the presence
of a quorum but as not voted for purposes of determining the approval of any
matter submitted to the stockholders for a vote. If a broker indicates on the
proxy that it does not have discretionary authority as to certain shares to vote
on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
A properly executed proxy will be voted in the manner directed by the
stockholder submitting the proxy. If no direction is made, such proxy will be
voted FOR the election of all five nominees named under the caption "Election of
Directors" as set forth therein as directors of the Company, FOR the approval of
the 2000 Long-term Stock Incentive Plan, FOR the approval of the amendments to
the Certificate of Incorporation to increase the number of authorized shares of
Common Stock from 65,000,000 to 200,000,000 and to change the name of the
Company to [new name], and FOR the ratification of the selection of Arthur
Andersen LLP as independent accountants. Any proxy may be revoked by the
stockholder at any time prior to the voting thereof by notice in writing to the
Chief Executive Officer of the Company. A proxy will also be
2
<PAGE>
revoked if the stockholder attends the meeting in person and votes. A later
dated proxy will revoke a prior dated proxy.
As of the date of this Proxy Statement, the Board of Directors knows of no
other business that will be presented for consideration at the Meeting. If
other proper matters are presented to the Meeting, however, it is the intention
of the proxy holders named in the enclosed form of proxy to take such actions as
shall be in accordance with their best judgment.
HOLDINGS OF STOCKHOLDERS, DIRECTORS
AND EXECUTIVE OFFICERS
Common Stock
The following table sets forth certain information as of March 22, 2000
(except as otherwise indicated) regarding the beneficial ownership of Common
Stock by (i) all individuals known to beneficially own 5% or more of the
outstanding shares of Common Stock, (ii) each of WorldPort's Named Executive
Officers (as defined below under Executive Compensation) and directors and (iii)
all of WorldPort's executive officers and directors as a group, in each case to
the best of WorldPort's knowledge. Except as otherwise indicated, WorldPort
believes that the beneficial owners of Common Stock listed below have sole
investment and voting power with respect to such shares.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner
and Nature of Beneficial Ownership(1) Number of Shares Percent of Class(2)
- ------------------------------------- ----------------- -------------------
<S> <C> <C>
The Heico Companies, LLC(3)........................... 21,414,924 43.0%
Michael E. Heisley, Sr.(4)............................ 21,414,924 43.0%
+Paul A. Moore(5)..................................... 5,290,276 16.0%
Carl J. Grivner(6).................................... 3,951,351 12.1%
Anderlit, Ltd.(7)..................................... 2,985,076 9.7%
+Phillip S. Magiera(8)................................ 1,678,246 5.7%
+Daniel Lazarek(9).................................... 305,000 1.1%
David Hickey(10)...................................... 225,625 *
Peter A. Howley(11)................................... 164,628 *
Stephen Courter(12)................................... 80,000 *
Stanley H. Meadows.................................... 64,584 *
John T. Hanson(13).................................... 40,625 *
+Donald C. Hilbert, Jr.(14)........................... 13,333 *
Andrew G. C. Sage, II................................. ----- -----
Executive officers and directors as a group
(8 people)(15)(16)............................... 25,941,737 47.8%
</TABLE>
_________________
* Less than 1%.
+ No longer with the Company.
(1) Unless otherwise indicated, the address of the stockholders named is that
of WorldPort's principal offices.
(2) Based on 28,737,589 shares of Common Stock outstanding as of March 22, 2000
and, with respect to each individual or group, such number of shares of
Common Stock as are
3
<PAGE>
issuable upon conversion of convertible securities or exercise of options
owned by such individual or group, in each case if such are convertible or
exercisable within 60 days.
(3) Includes (i) 15,385,165 shares issuable upon conversion of 1,416,030 shares
of WorldPort's Series C Preferred Stock, (ii) 1,538,517 shares issuable
upon conversion of 141,603 shares of WorldPort's Series E Preferred Stock,
(iii) 3,750,001 shares issuable upon conversion of 424,809 shares of
WorldPort's Series F Preferred Stock which may be acquired pursuant to an
option exercisable within 60 days and (iv) 416,240 shares subject to
warrants. The address of this stockholder is 5600 Three First National
Plaza, Chicago, Illinois 60602.
(4) Represents all shares beneficially owned by The Heico Companies, LLC, an
entity which Mr. Heisley controls.
(5) Includes (i) 1,000,000 shares of Common Stock and 1,985,076 shares issuable
upon conversion of 496,269 shares of Series B Preferred Stock owned by
Anderlit, Ltd., (ii) 312,000 shares of Common Stock and all shares owned by
Maroon Bells Capital Partners, Inc. ("MBCP") over which Mr. Moore shares
voting and investment powers (which consists of 84,540 shares issuable upon
conversion of 21,135 shares of WorldPort's Series B Preferred Stock and
316,921 shares issuable upon conversion of 316,921 shares of WorldPort's
Series D Preferred Stock), (iii) 19,072 shares issuable upon conversion of
4,768 shares of WorldPort's Series B Preferred Stock which are owned by
Moore Investments, (iv) 500,000 shares issuable upon conversion of 125,000
shares of WorldPort's Series B Preferred Stock held by Mr. Moore and (v)
580,000 shares which may be acquired pursuant to options held by Mr. Moore.
Mr. Moore holds an irrevocable proxy to vote all shares owned by Anderlit.
Mr. Moore is a principal of MBCP and the controlling stockholder of Moore
Investments. Mr. Moore resigned as Chief Executive Officer and director of
WorldPort in July 1999.
(6) Includes (i) 3,848,229 shares beneficially owned by Paul Moore, Phillip
Magiera, Theodore Swindells, MBCP, Moore Investments and Anderlit, Ltd. who
have granted a proxy over such shares to the Company and Mr. Grivner, as
Chief Executive Officer of the Company, under certain circumstances and
(ii) 103,122 shares issuable upon the exercise of options.
(7) Includes 1,985,076 shares issuable upon conversion of 496,269 shares of
WorldPort's Series B Preferred Stock. The stockholder's address is Palm
Chambers No. 3, P.O. Box 3152, Road Town, Tortola, British Virgin Islands.
(8) Includes (i) 500,000 shares issuable upon conversion of 125,000 shares of
WorldPort's Series B Preferred Stock, (ii) 405,000 shares which may be
acquired pursuant to options and (iii) 425,000 shares owned by Mr.
Magiera's children.
(9) Includes 275,000 shares issuable upon the exercise of options.
(10) Includes 215,625 shares issuable upon the exercise of options.
(11) Represents 90,000 shares issuable upon the exercise of options and 74,628
shares issuable upon conversion of 18,657 shares of WorldPort's Series B
Preferred Stock.
(12) Includes 50,000 shares issuable upon the exercise of options.
(13) Represents shares issuable upon the exercise of options.
(14) Represents shares issuable upon the exercise of options.
(15) Includes (i) 25,596,541 shares acquirable upon the conversion of
convertible securities and (ii) 914,612 shares issuable upon the exercise
of options.
4
<PAGE>
(16) Does not include Messrs. Moore, Magiera, Lazarek or Hilbert who are no
longer with the Company.
Preferred Stock
Series B Preferred Stock
The Series B votes as a single class with the Common Stock with each share
entitled to 40 votes. The Series B is convertible on a 1:4 basis into Common
Stock and is subject to mandatory conversion upon the date on which 70% of the
Series B has been converted. The conversion price is $1.34, as adjusted from
time to time. The following table sets forth certain information as of March
22, 2000 regarding the beneficial ownership of Series B Preferred Stock by (i)
all individuals known to beneficially own 5% or more of the outstanding shares
of Series B Preferred Stock, and (ii) each of WorldPort's Named Executive
Officers and directors and (iii) all of WorldPort's executive officers and
directors as a group. Except as otherwise indicated, WorldPort believes that the
beneficial owners of Series B Preferred Stock listed below have sole investment
and voting power with respect to such shares.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner Percent of
And Nature of Beneficial Ownership(1) Number of Shares Class
- ------------------------------------- ---------------- ----------
<S> <C> <C>
Carl J. Grivner(3).................................. 882,827 91.4%
+Paul A. Moore(4)................................... 647,172 67.0%
Anderlit, Ltd.(5)................................... 496,269 51.4%
Theodore Swindells(6)............................... 131,790 13.7%
+Phillip S. Magiera................................. 125,000 12.9%
Peter A. Howley..................................... 18,657 1.9%
Michael E. Heisley, Sr.............................. ----- -----
Stanley H. Meadows.................................. ----- -----
Andrew G. C. Sage, II............................... ----- -----
John T. Hanson...................................... ----- -----
David Hickey........................................ ----- -----
Stephen Courter..................................... ----- -----
+Donald C. Hilbert, Jr.............................. ----- -----
+Daniel Lazarek..................................... ----- -----
Executive officers and directors as a group (8 901,484 93.4%
people)(7)(8)
</TABLE>
_________________
+ No longer with the Company.
(1) Unless otherwise indicated, the address of the stockholders named is that
of WorldPort's principal offices.
(2) Based on 965,642 shares of WorldPort's Series B outstanding as of March 22,
2000.
(3) Represents shares beneficially owned by Paul Moore, Phillip Magiera,
Theodore Swindells, MBCP, Moore Investments and Anderlit, Ltd. who have
granted a proxy over such shares to the Company and Mr. Grivner, as Chief
Executive Officer of the Company, under certain circumstances.
5
<PAGE>
(4) Includes (i) 496,269 shares owned by Anderlit, (ii) 21,135 shares owned by
MBCP and (iii) 4,768 shares held in the name of Moore Investments. Mr.
Moore holds an irrevocable proxy to vote all of the shares owned by
Anderlit. Mr. Moore has shared voting and investment powers over all of the
shares owned by MBCP. Mr. Moore is the controlling stockholder of Moore
Investments. Mr. Moore resigned as a director of WorldPort in July 1999.
(5) The stockholder's address is Palm Chambers No. 3, P. O. Box 3152, Road
Town, Tortola, British Virgin Islands.
(6) Includes 21,135 shares owned by MBCP; Mr. Swindells has shared voting and
investment powers over all shares owned by MBCP.
(7) Includes all shares beneficially owned by Mr. Grivner pursuant to the proxy
described above.
(8) Does not include Messrs. Moore, Magiera, Hilbert or Lazarek who are no
longer with the Company.
Series C Preferred Stock
The Series C votes as a single class with the Common Stock with each share
entitled to 40 votes. The Series C is convertible on a 1:10.865 basis into
Common Stock and is subject to mandatory conversion upon the date on which 70%
of the Series C has been converted. The conversion price is $3.25, as adjusted
from time to time. The following table sets forth certain information as of
March 22, 2000 regarding the beneficial ownership of Series C Preferred Stock by
(i) all individuals known to beneficially own 5% or more of the outstanding
shares of Series C Preferred Stock, (ii) each of WorldPort's Named Executive
Officers and directors and (iii) all of WorldPort's executive officers and
directors as a group. Except as otherwise indicated, WorldPort believes that the
beneficial owners of Series C Preferred Stock listed below have sole investment
and voting power with respect to such shares.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner
and Nature of Beneficial Ownership(1) Number of Shares Percent of Class(2)
- ------------------------------------- ---------------- -------------------
<S> <C> <C>
The Heico Companies, LLC(3).................. 1,416,030 100%
Michael E. Heisley, Sr.(4)................... 1,416,030 100%
Carl J. Grivner.............................. ----- -----
Peter A. Howley.............................. ----- -----
Stanley H. Meadows........................... ----- -----
Andrew G. C. Sage, II........................ ----- -----
John T. Hanson............................... ----- -----
David Hickey................................. ----- -----
Stephen Courter.............................. ----- -----
+Donald C. Hilbert, Jr....................... ----- -----
+Phillip S. Magiera.......................... ----- -----
+Daniel Lazarek.............................. ----- -----
+Paul A. Moore............................... ----- -----
Executive officers and directors as a group
(8 people)(5)(6).......................... 1,416,030 100%
</TABLE>
_________________
+ No longer with the Company.
6
<PAGE>
(1) Unless otherwise indicated, the address of the stockholders named is that
of WorldPort's principal offices.
(2) Based on 1,416,030 shares of WorldPort's Series C outstanding as of March
22, 2000.
(3) The address of this stockholder is 5600 Three First National Plaza,
Chicago, Illinois 60602.
(4) Represents all shares owned by Heico, an entity which Mr. Heisley controls.
(5) Represents all shares owned by Heico, an entity which Mr. Heisley controls.
(6) Does not include Messrs. Moore, Magiera, Hilbert or Lazarek who are no
longer with the Company.
Series D Preferred Stock
The Series D votes as a single class with the Common Stock with each share
entitled to one vote. The Series D is convertible on a 1:1 basis into Common
Stock and is subject to mandatory conversion upon the date on which 221,845
shares of the Series D have been converted. The conversion price is $3.25 per
share, as adjusted from time to time. The following table sets forth certain
information as of March 22, 2000 regarding the beneficial ownership of Series D
by (i) all individuals known to beneficially own 5% or more of the outstanding
shares of Series D, (ii) each of WorldPort's Named Executive Officers and
directors and (iii) all of WorldPort's executive officers and directors as a
group. Except as otherwise indicated, WorldPort believes that the beneficial
owners of Series D Preferred Stock listed below have sole investment and voting
power with respect to such shares.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner
and Nature of Beneficial Ownership(1) Number of Shares Percent of Class(2)
- ------------------------------------- ---------------- -------------------
<S> <C> <C>
Maroon Bells Capital Partners, Inc.(3)....... 316,921 100%
+Paul A. Moore(4)............................ 316,921 100%
Theodore H. Swindells(5)..................... 316,921 100%
Carl J. Grivner(6)........................... 316,921 100%
Peter A. Howley.............................. ----- -----
Michael E. Heisley, Sr....................... ----- -----
Stanley H. Meadows........................... ----- -----
Andrew G. C. Sage, II........................ ----- -----
John T. Hanson............................... ----- -----
David Hickey................................. ----- -----
Stephen Courter.............................. ----- -----
+Donald C. Hilbert, Jr....................... ----- -----
+Phillip S. Magiera.......................... ----- -----
+Daniel Lazarek.............................. ----- -----
Executive officers and directors as a group 316,921 100%
(8 people)(7)(8)
</TABLE>
_________________
+ No longer with the Company.
(1) Unless otherwise indicated, the address of the stockholders named is that
of WorldPort's principal offices.
(2) Based on 316,921 shares of WorldPort's Series D Preferred Stock outstanding
as of March 22, 2000.
7
<PAGE>
(3) The address of this stockholder is 100 California Street, Suite 1160, San
Francisco, California 94111.
(4) Represents all shares owned by MBCP; Mr. Moore has shared voting and
investment powers over all shares owned by MBCP.
(5) Represents all shares owned by MBCP; Mr. Swindells has shared voting and
investment powers over all shares owned by MBCP.
(6) Represents all shares owned by MBCP subject to a proxy over such shares
granted by MBCP to the Company and Mr. Grivner, as Chief Executive Officer
of the Company, under certain circumstances.
(7) Represents all shares beneficially owned by Mr. Grivner pursuant to the
proxy.
(8) Does not include Messrs. Moore, Magiera, Hilbert or Lazarek who are no
longer with the Company.
Series E Preferred Stock
The Series E votes as a single class with the Common Stock with each share
entitled to 10.865 votes. The Series E is convertible on a 1:10.865 basis into
Common Stock and is subject to mandatory conversion upon the date on which 70%
of the Series E has been converted. The conversion price is $3.25, as adjusted
from time to time. The following table sets forth certain information as of
March 22, 2000 regarding the beneficial ownership of Series E Preferred Stock by
(i) all individuals known to beneficially own 5% or more of the outstanding
shares of Series E Preferred Stock, (ii) each of WorldPort's Named Executive
Officers and directors and (iii) all of WorldPort's executive officers and
directors as a group. Except as otherwise indicated, WorldPort believes that the
beneficial owners of Series E Preferred Stock listed below have sole investment
and voting power with respect to such shares.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner
and Nature of Beneficial Ownership(1) Number of Shares Percent of Class(2)
- ------------------------------------- ---------------- -------------------
<S> <C> <C>
The Heico Companies, LLC(3).................. 141,603 100%
Michael E. Heisley, Sr.(4)................... 141,603 100%
Carl J. Grivner.............................. ----- -----
Peter A. Howley.............................. ----- -----
Stanley H. Meadows........................... ----- -----
Andrew G. C. Sage, II........................ ----- -----
John T. Hanson............................... ----- -----
David Hickey................................. ----- -----
Stephen Courter.............................. ----- -----
+Donald C. Hilbert, Jr....................... ----- -----
+Phillip S. Magiera.......................... ----- -----
+Daniel Lazarek.............................. ----- -----
+Paul A. Moore............................... ----- -----
Executive officers and directors as a group 141,603 100%
(8 people)(5)(6)
</TABLE>
_________________
+ No longer with the Company.
(1) Unless otherwise indicated, the address of the stockholders named is that
of WorldPort's principal offices.
8
<PAGE>
(2) Based on 141,603 shares of WorldPort's Series E Preferred Stock outstanding
as of March 22, 2000.
(3) The address of this stockholder is 5600 Three First National Plaza,
Chicago, Illinois 60602.
(4) Represents all shares owned by Heico, an entity which Mr. Heisley controls.
(5) Represents all shares owned by Heico, an entity which Mr. Heisley controls.
(6) Does not include Messrs. Moore, Magiera, Hilbert or Lazarek who are no
longer with the Company.
Series F Preferred Stock
The Heico Companies, LLC holds an option to acquire 424,809 shares for an
aggregate amount of $15,000,000. As of March 22, 2000, no shares of Series F
were outstanding. The Series F votes as a single class with the Common Stock
but are entitled to 8.8275 votes per share. The Series F is convertible on a
1:8.8275 basis into Common Stock and is subject to mandatory conversion upon the
date on which 70% of the Series F has been converted. The conversion price is
$4.00, as adjusted from time to time. The following table sets forth certain
information as of March 22, 2000 regarding the beneficial ownership of Series F
Preferred Stock by (i) all individuals known to beneficially own 5% or more of
the outstanding shares of Series F Preferred Stock, (ii) each of WorldPort's
Named Executive Officers and directors and (iii) all of WorldPort's executive
officers and directors as a group. Except as otherwise indicated, we believe
that the beneficial owners of Series F Preferred Stock listed below have sole
investment and voting power with respect to such shares.
<TABLE>
<CAPTION>
Name and Address of Beneficial Owner
and Nature of Beneficial Ownership(1) Number of Shares Percent of Class(2)
- ------------------------------------- ---------------- -------------------
<S> <C> <C>
The Heico Companies, LLC(3).................... 424,809 100%
Michael E. Heisley, Sr.(4)..................... 424,809 100%
Carl J. Grivner................................ ----- -----
Peter A. Howley................................ ----- -----
Stanley H. Meadows............................. ----- -----
Andrew G. C. Sage, II.......................... ----- -----
John T. Hanson................................. ----- -----
David Hickey................................... ----- -----
Stephen Courter................................ ----- -----
+Donald C. Hilbert, Jr......................... ----- -----
+Phillip S. Magiera............................ ----- -----
+Daniel Lazarek................................ ----- -----
+Paul A. Moore................................. ----- -----
Executive officers and directors as a group (8 424,809 100%
people)(5)(6)
</TABLE>
_________________
+ No longer with the Company.
(1) Unless otherwise indicated, the address of the stockholders named is that
of WorldPort's principal offices.
9
<PAGE>
(2) The Heico Companies, LLC holds an option to acquire 424,809 shares for an
aggregate amount of $15,000,000. No shares of WorldPort's Series F
Preferred Stock were outstanding as of March 22, 2000.
(3) Represents shares subject to an option which is exercisable at any time
until July 15, 2002. The address of this stockholder is 5600 Three First
National Plaza, Chicago, Illinois 60602.
(4) Represents all shares subject to the option held by Heico, an entity which
Mr. Heisley controls.
(5) Represents all shares subject to the option held by Heico, an entity which
Mr. Heisley controls.
(6) Does not include Messrs. Moore, Magiera, Hilbert or Lazarek who are no
longer with the Company.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The By Laws of the Company provide that all directors serve for a term of
one-year from the date of election and until such director's successor has been
duly elected and qualified. Five directors are to be elected by a majority of
the stockholder votes cast at the Meeting to serve until the 2001 Annual Meeting
and until their successors are elected and qualified. Carl J. Grivner,
[nominee], Michael E. Heisley, Sr., Stanley H. Meadows and Andrew Sage, II are
nominees for director. Mr. Howley has notified us of his intention to retire
from the Board of Directors at the 2000 Annual Meeting. The Company has formed a
search committee consisting of Messrs. Grivner and Meadows in order to actively
recruit up to two additional qualified, non-employee directors.
The enclosed proxy cannot be voted for a greater number of persons than
five, being the number of nominees named in this Proxy Statement.
Information about the nominees for director is set forth in the following
paragraphs.
NOMINEES
CARL J. GRIVNER Director since 1999
Carl J. Grivner, 46, has served as our Chief Executive Officer and President
since June of 1999 and Chairman of the Board of Directors since August 1999.
Mr. Grivner has over twenty years of experience in management, marketing, and
technical experience in the high-tech and telecommunications industries. Most
recently, Mr. Grivner served as chief executive officer of the Western
Hemisphere for Cable & Wireless, a global business voice and data communications
supplier based in the United Kingdom. Previously, Mr. Grivner served as
president and chief executive of Advanced Fibre Communications, a multi-service
access solutions. Prior to joining Advanced Fibre Communications, he served
nine years at Ameritech, where he held a series of management positions,
including president of Enhanced Business Services and president of its
advertising service unit. Previously, Mr. Grivner served nine years in
technical and marketing positions with IBM. Mr. Grivner holds a Bachelors of
Arts degree in biology from Lycoming College and an advanced degree in business
administration from the University of Pennsylvania, Wharton School of Business.
10
<PAGE>
MICHAEL E. HEISLEY, SR. Director since 1998
Michael E. Heisley, Sr., 63, has been a member of the Board of Directors since
December 31, 1998. Mr. Heisley has been the Manager, President and Chief
Executive Officer of The Heico Companies ("Heico"), a holding company in
Chicago, Illinois which acquires or invests in and operates a diverse group of
businesses, since its formation in 1988 and also serves as the Chief Executive
Officer of various of Heico's subsidiaries. Mr. Heisley is a director of
Robertson-Ceco Corporation, Tom's Foods Inc. and nutrisystem.com, Inc. Mr.
Heisley received a bachelor's degree in business administration from Georgetown
University.
STANLEY H. MEADOWS Director since 1998
Stanley H. Meadows, 55, has been a member of the Board of Directors since
December 31, 1998. Mr. Meadows has been General Counsel of Heico since February
1998 and is a partner at the law firm of McDermott, Will & Emery, where he has
practiced since 1970. Mr. Meadows is a director of Robertson-Ceco Corporation
and Tom's Foods, Inc. Mr. Meadows received a bachelor of science degree from the
University of Illinois and a law degree from the University of Chicago.
ANDREW G. C. SAGE II Director since 1999
Andrew G. C. Sage II, 74, has been a member of the Board of Directors since
April 30, 1999. Mr. Sage has served as President of Sage Capital Corporation, a
general business and financial management corporation specializing in business
restructuring and problem solving, since 1993 and was the President and Chief
Executive Officer of Robertson Ceco Corporation, a metal buildings manufacturing
company, from November 1992 to December 1993. Mr. Sage held various positions
with Shearson Lehman Brothers, Inc. and its predecessors, Lehman Brothers and
Lehman Brothers Kuhn Loeb, Inc., since joining the investment bank in 1948,
including General Partner from 1960-1970, President from 1970-1973, Vice
Chairman from 1973-1977, Managing Director from 1977-1987, and Senior Consultant
from 1987-1990. Since 1990, Mr. Sage has been a consultant in general business
and financial management. Mr. Sage is a director of American Superconductor
Corporation and Tom's Foods, Inc., and is currently the Chairman of the Board of
Robertson-Ceco Corporation.
[Nominee to be determined]
Election requires the affirmative vote of the holders of a majority of the
voting power present or represented at the Annual Meeting.
The Board of Directors recommends a vote FOR each of the directors.
11
<PAGE>
There are no family relationships among any of the directors or officers,
however, Messrs. Heisley and Meadows have an interest in, or are employed by,
Heico, one of the Company's principal stockholders.
BOARD AND COMMITTEE MEETINGS
The Board of Directors has established three standing committees: the Audit
Committee, the Compensation Committee and the Executive Committee. The Audit
Committee selects our auditors and oversees the review and auditing of our
financial performance. The Compensation Committee reviews the compensation we
pay to our key executives to ensure that such compensation is appropriate given
such executive's duties, responsibilities and contributions to the Company and
administers the Long-Term Incentive Plan and will administer the 2000 Long-term
Stock Incentive Plan. The Executive Committee has the authority to take all
actions which the Board of Directors as a whole would be able to take, except as
limited by applicable law. During part of 1999, the Company's former directors,
Messrs. Robert L. McCann, Larry Geis and Philip S. Magiera served as the Audit
Committee. Currently, Messrs. Heisley, Meadows and Sage comprise the Audit
Committee. Messrs. Sage and Howley currently comprise the Compensation
Committee. Messrs. Grivner, Heisley and Meadows currently comprise the Executive
Committee, for which Mr. Sage serves as an alternate.
The Company does not have a Nominating Committee.
The Board of Directors of the Company held 13 meetings, during the fiscal
year ended December 31, 1999. Each director attended more than 75% of all Board
and committee meetings that he was eligible to attend.
DIRECTORS' COMPENSATION
In 1999, each member of the Board of Directors served without compensation.
The Directors are entitled to reimbursement by the Company for their reasonable
expenses incurred in acting as Directors.
In 2000, pursuant to grants under the proposed 2000 Long-term Stock
Incentive Plan, each non-employee director would receive options to acquire
100,000 shares of Common Stock which would vest over a period of four years. See
Proposal No. 2 for a more detailed description of these options.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange Act")
requires the Company's directors and officers, and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission ("SEC") reports of ownership and changes in
ownership of Common Stock and other equity securities of the Company. Officers,
directors and greater-than-10% stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on review of the copies of such reports furnished to the
Company or written representations that no other reports were required, the
Company believes that during the 1999 fiscal year all filing requirements
applicable to its officers, directors and greater-than-10% beneficial owners
were complied with, except as follows: (1) A Form 3 and a Form 5 relating to a
grant of stock options were inadvertently filed late on Mr. Grivner's behalf.
(2) A Form 3 and a Form 5 relating to a grant of stock options were
inadvertently filed late on John T. Hanson's
12
<PAGE>
behalf. (3) A Form 3 and a Form 4 relating to three transactions were
inadvertently filed late on Heico's behalf. (4) A Form 4 relating two
transactions was not filed on Heico's behalf. (5) Such forms relating to such
transactions were also inadvertently filed late on behalf of Mr. Heisley who
must also report Heico's transactions due to his beneficial ownership of Heico's
shares. (6) A Form 3 was inadvertently filed late on Mr. Meadows' behalf. (7) A
Form 3 was inadvertently filed late on Mr. Sage's behalf. (8) A Form 3 and a
Form 4 reporting a single transaction were inadvertently filed late on behalf of
our former director, Emily Heisley Stoeckel. (9) A Form 3 and a Form 4 reporting
a single transaction were inadvertently filed late on Stephen Courter's behalf.
(10) A Form 3 was inadvertently filed late on behalf of our former director,
Larry Geis. (11) A Form 4 reporting a single transaction was inadvertently filed
late on Donald C. Hilbert, Jr.'s behalf.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth information
concerning cash and non-cash compensation for services rendered during the
fiscal years ended December 31, 1999, 1998 and 1997 to (a) the persons who
served as Chief Executive Officer during 1999, (b) the four highest paid
executive officers who were executive officers as of December 31, 1999 and (c)
certain other executive officers who would have been among the four highest paid
executive officers if they had been executive officers of the Company as of
December 31, 1999 (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
------------------------------
Annual Compensation Restricted Securities
Name and --------------------------------------------------- Stock Underlying
Principal Position Year Salary Bonus Other Award(s) Options/SARs
- ------------------- ---- ----------- ---------- --------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Carl J. Grivner(1) 1999 $259,690 $250,000 $100,000(2) --- 825,000
Chairman of the 1998 --- --- --- --- ---
Board, Chief 1997 --- --- --- --- ---
Executive Officer
and President
John T. Hanson(3) 1999 $108,537 $112,500 --- --- 150,000
Chief Financial 1998 --- --- --- --- ---
Officer 1997 --- --- --- --- ---
David Hickey(4) 1999 $128,677 $ 95,416 --- --- ---
General Manager - 1998 $ 33,632 $ 21,020 $ 6,279 --- 225,000
Europe 1997 --- --- --- --- ---
Stephen Courter(5) 1999 $157,103 --- $ 60,000(6) --- ---
Former Regional 1998 $ 69,231 $ 43,750 $ 20,068(7) --- 150,000(8)
Vice President - 1997 --- --- --- --- ---
Europe
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Paul A. Moore(9) 1999 $300,000(10) $150,000(10) $ 63,482(11) --- ---
Former Chief 1998 $300,000 $150,000 --- --- 580,000
Executive Officer 1997 --- --- --- --- ---
Daniel G. 1999 $238,553 $ 50,000 --- --- ---
Lazarek(12) 1998 $165,000 $ 83,625 $ 30,700(13) --- 500,000(14)
Former Vice 1997 --- --- --- --- ---
President Global
Sales and
Marketing
Phillip S. 1999 $167,871 --- --- --- ---
Magiera(15) 1998 $240,000 $120,000 --- --- 325,000
Former Chief 1997 --- --- --- --- 80,000
Financial Officer
Donald C. Hilbert, 1999 $132,592 --- --- --- ---
Jr.(16) 1998 $ 58,462 $ 21,433 --- --- 40,000(17)
Former Controller 1997 --- --- --- --- ---
</TABLE>
_________________
(1) Mr. Grivner joined the Company in June 1999.
(2) Represents $100,000 for moving expenses paid to Mr. Grivner.
(3) Mr. Hanson joined the Company in July 1999.
(4) Mr. Hickey joined the Company in September 1998.
(5) Mr. Courter joined the Company in July 1998 and resigned as Regional Vice
President - Europe effective January 2000.
(6) Represents $60,000 for a cost of living differential paid to Mr. Courter.
(7) Represents $20,000 for a cost of living differential and $68 for group term
life policy earnings paid to Mr. Courter.
(8) Options to acquire 100,000 shares of Common Stock were cancelled upon Mr.
Courter's resignation.
(9) Mr. Moore resigned as Chief Executive Officer and director effective July
15, 1999.
(10) Mr. Moore's salary includes $150,000 paid pursuant to, and his bonus was
paid under, a Settlement Agreement dated July 15, 1999.
(11) Includes medical and disability insurance benefits paid by the Company and
reimbursements of administrative expenses paid to Mr. Moore pursuant to his
Settlement Agreement
(12) Mr. Lazarek joined the Company in March 1998 and resigned as Vice President
Global Sales and Marketing effective September 1999.
(13) Includes moving expenses paid to Mr. Lazarek ($27,500) and a car allowance
($3,200).
(14) Options to acquire 150,000 shares of Common Stock were cancelled upon Mr.
Lazarek's resignation.
(15) Mr. Magiera joined the Company in January 1998 and resigned as Chief
Financial Officer effective September 1999.
(16) Mr. Hilbert joined the Company in June 1998 and resigned as Controller
effective March 2000.
(17) Options to acquire 26,667 shares of Common Stock were cancelled upon Mr.
Hilbert's resignation.
14
<PAGE>
EMPLOYMENT AGREEMENTS
Carl J. Grivner
In June 1999, we entered into a three-year employment agreement with Mr.
Grivner whereby Mr. Grivner agreed to serve as Chief Executive Officer of the
Company. Pursuant to the terms of his employment agreement, Mr. Grivner was
entitled to a base salary of $500,000 per year, and received a cash bonus of
$350,000 during 1999. In 1999, pursuant to his employment agreement Mr. Grivner
also received $100,000 in moving expenses in connection with his relocation.
Mr. Grivner's employment agreement also provides that, if within 90 days of
a change of control, but during the employment term, Mr. Grivner terminates his
employment because he determines in his sole discretion that he can no longer
effectively perform the duties of his position, the Company will pay Mr. Grivner
a cash payment equal to the aggregate of the following amounts (1) Mr. Grivner's
base salary, as of the date of termination, for the lesser of one-year or the
remaining period under the term of the agreement and (2) Mr. Grivner's
guaranteed bonus and (3) any accrued or earned and unpaid benefits. In
addition, in such an event, Mr. Grivner's options will become fully vested if
the stock price goals applicable to the options have been met. If, after a
change of control, Mr. Grivner is subjected to an excise tax under Section 4999
of the Internal Revenue Code of 1986, as amended (whether by virtue of the
benefits of the change of control agreement or otherwise, including by virtue of
the acceleration of the exercisability of stock options), we must pay Mr.
Grivner an additional amount, a gross-up payment, such that the net amount
retained by Mr. Grivner following payment of the excise tax and any federal and
state and local tax imposed on the gross-up payment, shall be equal to the
excise tax imposed on the payments and benefits received by him under his
employment agreement due to the change in control.
In 1999, pursuant to his employment agreement, Mr. Grivner was awarded
options to acquire 825,000 shares of Common Stock. These options have the
following terms:
. Options to acquire 300,000 shares vest as follows: 17,187 on the first day
of each month beginning on July 1, 1999 for six months, 103,128 on the
first anniversary of the grant date and 93,750 on the second anniversary of
the grant date.
. Options to acquire 180,000 shares vest as follows: 112,500 on the second
anniversary of the grant date and 67,500 on the third anniversary of the
grant date; provided, however, that no options will vest unless and until
the closing price for the Common Stock as reported on Nasdaq SmallCap
Market System has been equal to at least $15.00 for a period of at least 30
consecutive trading days.
. Options to acquire 180,000 shares vest as follows: 138,750 on the third
anniversary of the grant date and 41,250 on the fourth anniversary of the
grant date, provided that Mr. Grivner must be employed by Company on such
dates and provided that no options will vest unless and until the closing
price for the Common Stock as reported on Nasdaq
15
<PAGE>
SmallCap Market System has been equal to at least $20.00 for a period of at
least 30 consecutive trading days.
. Options to acquire 165,000 shares vest on the fourth anniversary of the
grant date, provided that Mr. Grivner must be employed by Company on such
date and provided that no options will vest unless and until the closing
price for the Common Stock as reported on Nasdaq SmallCap Market System has
been equal to at least $25.00 for a period of at least 30 consecutive
trading days.
In the first quarter of 2000, Mr. Grivner agreed with the Board of
Directors that, in keeping with the Company's new focus, Mr. Grivner's base
salary should be decreased to $300,00 per year and Mr. Grivner's bonus was
reduced to not less than $150,000 per year. In connection with this reduction in
cash compensation, Mr. Grivner was awarded options to acquire 2,175,000 shares
of Common Stock under the 2000 Long-term Stock Incentive Plan described under
Proposal 2 below.
John T. Hanson
In May 1999, we entered into a letter agreement with Mr. Hanson whereby he
agreed to serve as Chief Financial Officer of the Company. In accordance with
the terms of the letter agreement, Mr. Hanson earned a base salary of $235,000
per year and is eligible to receive an annual bonus of $90,000 (which amount was
guaranteed for 1999). In 1999, in accordance with the letter agreement, Mr.
Hanson received stock options to acquire 150,000 shares of Common Stock which
will vest in increments of one-third over a three year period beginning June 29,
2000, unless vesting is accelerated as a result of a change in control of the
Company. Mr. Hanson's employment agreement provides that, in the event Mr.
Hanson's employment is terminated as a result of a change of control of the
Company, he will be entitled to a severance payment equal to one-year of his
base salary.
David Hickey
In September 1998, we entered into an employment agreement with Mr. Hickey
whereby he agreed to serve as General Manager Europe - Corporate Development.
Pursuant to his employment agreement, Mr. Hickey receives annual base salary of
NLG 300,000 ($134,529). Mr. Hickey is eligible to receive a bonus which may be
more or less than his targeted amount of 50% of annual base salary. Mr. Hickey
receives a monthly expense allowance of NLG 500 ($224) and the Company
reimburses him for the cost of leasing a car not exceeding NLG 2,800 per month
($1,256).
Paul A. Moore
In January 1998, we entered into a two-year employment agreement with Mr.
Moore whereby Mr. Moore agreed to serve as an executive of the Company. Pursuant
to the terms of his employment agreement, as amended, Mr. Moored earned a base
salary of $300,000 during each year of his employment agreement. Mr. Moore was
also eligible to earn an annual bonus of up to 50% of his base salary based on
criteria to be established by the Board of Directors.
16
<PAGE>
In July 1999, the Board of Directors accepted Mr. Moore's resignation from
employment and all officer and director positions with the Company and its
subsidiaries. Mr. Moore entered into an agreement with the Company that
terminated the employment agreement described above. Pursuant to this
termination agreement, the Company agreed to pay Mr. Moore as follows:
. In 1999, $300,000, $150,000 of which represents salary and $150,000 of
which represents bonus over six monthly installments
. In 2000, $450,000 payable in eleven equal monthly installments of
$25,000 commencing on January 31, 2000 and a final installment of
$175,000 on January 2, 2001
. No more than $135,000 for office rent and secretarial services through
December 31, 2000
. Medical and disability insurance benefits through July 2000
. $15,000 in legal expenses incurred by Mr. Moore relating to the
negotiation of the agreement
Stephen R. Courter
In June 1998, Mr. Courter agreed to serve as the Company's Managing
Director - Finance pursuant to a letter agreement. On January 14, 2000, Mr.
Courter's employment was terminated and Mr. Courter became employed by a
subsidiary of Energis plc ("Energis") as part of the sale of the EnerTel assets
by the Company to Energis. Mr. Courter's base salary pursuant to the letter
agreement, as amended, was $172,500 and Mr. Courter was compensated for the cost
of living differential at a rate of $5,000 per month. Mr. Courter was also
eligible to receive a bonus equal to 50% of his base pay. Pursuant to his letter
agreement, Mr. Courter was granted an option to acquire 150,000 shares of Common
Stock, of which options to acquire 100,00 shares were cancelled when his
employment was terminated in January 2000.
Philip Magiera
In January 1998, we entered into a two-year employment agreement with Mr.
Phillip S. Magiera whereby Mr. Magiera agreed to serve as an executive of our
company. Pursuant to the terms of his employment agreement, Mr. Magiera earned a
base salary of $240,000 during each year of his employment agreement. Mr.
Magiera was also eligible to earn an annual bonus of up to 50% of his base
salary based on criteria to be established by the Board of Directors.
In September 1999, the Board of Directors accepted Mr. Magiera's
resignation from employment and all officer and director positions with the
Company and its subsidiaries.
Daniel G. Lazarek
In March 1998, we entered into an employment agreement with Mr. Lazarek
whereby
17
<PAGE>
Mr. Lazarek agreed to serve as our Vice President of Global Sales and Marketing.
Pursuant to the terms of his employment agreement, Mr. Lazarek earned a base
salary of $150,000 per year and was eligible to earn performance incentive
bonuses up to 50% of his base salary based on criteria to be established by our
President.
In September 1999, the Board of Directors accepted Mr. Lazarek's
resignation from employment and all officer and director positions with the
Company and its subsidiaries. The Company paid Mr. Lazarek severance in the
amount of $6,346.
LONG-TERM INCENTIVE PLANS
Our Amended and Restated Long-Term Incentive Plan (the "Long-Term Incentive
Plan") was initially adopted in 1996 as a means to promote our success and
enhance our value through (i) linking the personal interests of our directors,
key employees and consultants to those of the stockholders, (ii) providing
directors and employees with an incentive for outstanding performance and (iii)
providing us flexibility in our ability to attract and retain the services of
our directors, employees and contractors.
The Long-Term Incentive Stock Plan is administered by the Compensation
Committee of the Board of Directors (the "Committee"), whose members must
qualify as non-employee directors within the meaning of the Commission's
regulations. The Committee is authorized to determine, among other things, the
individuals to whom, and the times at which, options and other benefits are to
be granted, the number of shares subject to each option, the applicable vesting
schedule and the exercise price. The Long-Term Incentive Plan provides that,
upon a "Change of Control" (as defined in the Long-Term Incentive Plan), all
outstanding options and other awards in the nature of rights that may be
exercised which have been granted pursuant to the Long-Term Incentive Plan shall
become fully exercisable and all restrictions on all awards granted thereunder
shall lapse.
The Board of Directors has the power to amend the Long-Term Incentive Plan
from time to time. Stockholder approval of an amendment is only required to the
extent that it is required by law or regulatory authority.
As of December 31, 1999, we had outstanding options to acquire a total of
4,462,635 shares of Common Stock (of which 4,278,819 were vested) with exercise
prices ranging from $0.75 to $14.19 per share under the Incentive Plan.
The Board of Directors has adopted a 2000 Long-term Stock Incentive Plan
which is being submitted for stockholder approval at the Meeting. This new
incentive plan is described in more detail under Proposal No. 2 below.
18
<PAGE>
OPTIONS
The following table sets forth certain information concerning individual
grants of stock options made during the year ended December 31, 1999 to each
Named Executive Officer of the Company who received such a grant under the
Company's Amended and Restated Long-Term Incentive Plan.
Option Grants in Last Fiscal Year
Individual Grants
<TABLE>
% of Total
Number of Options Potential Realized
Shares Granted to Value at Assumed
Underlying Employees Exercise or Annual Rates of Stock
Options in Fiscal Base Price Expiration Price Appreciation
Name Granted Year(1) Per Share Date(2) for Option Term (3)
---- ------- ------- --------- ------- -------------------
<S> <C> <C> <C> <C> <C> <C>
5% 10%
--- ---
Carl J. Grivner 825,000(4) 55.4% $8.10 5/28/09 $4,525,109 $11,163,745
Chairman of the
Board, Chief
Executive Officer and
President
John T. Hanson 150,000(5) 10.1% $3.56 6/29/09 $ 489,760 $ 1,096,167
Chief Financial
Officer
</TABLE>
_________________
(1) Based on 1,489,000 total options granted to employees, including the Named
Executive Officers, in 1999.
(2) The term of all options is ten years.
(3) The potential realizable value is calculated based on the term of the
option at its time of grant (ten years). It is calculated by assuming the
stock price on the date of grant appreciates at the indicated annual rate
compounded for the entire term of the option and that the option is
exercised and sold on the last day of its term for the appreciated stock
price. The assumed annual rates of stock price appreciation of 5% and 10%
are set by rules promulgated by the Securities and Exchange Commission and
are not intended as a forecast of possible future appreciation in stock
prices.
(4) These options will become exercisable in separate blocks as follows:
. Options to acquire 300,000 shares, of which 17,187 will vest on the first
day of each month beginning on July 1, 1999 for six months; 103,128 will
vest on the first anniversary of the grant date; and 93,750 will vest on
the second anniversary of the grant date, provided that Executive is
employed by the Company on such dates.
19
<PAGE>
. date and 67,500 will vest on the third anniversary of the grant date,
provided that Executive is employed by Company on such dates and
provided that no options shall vest unless and until the closing price
for the Common Stock has been equal to at least $15.00 for a period of
at least 30 consecutive trading days.
. Options to acquire 180,000 shares, of which 138,750 will vest on the
third anniversary of the grant date and 41,250 will vest on the fourth
anniversary of the grant date, provided that Executive is employed by
Company on such dates and provided that no options shall vest unless and
until the closing price for the Common Stock has been equal to at least
$20.00 for a period of at least 30 consecutive trading days.
. Options to acquire 165,000 shares, which will vest on the fourth
anniversary of the grant date, provided that Executive is employed by
Company on such date and provided that no options shall vest unless and
until the closing price for the Common Stock has been equal to at least
$25.00 for a period of at least 30 consecutive trading days.
(5) One-third of these options vest on each of the first, second and third
anniversaries of the date of grant (June 29, 1999).
20
<PAGE>
Option Exercises and Fiscal Year-End Values
The following table sets forth certain information with respect to each
Named Executive Officer concerning the exercise of options during the fiscal
year ended December 31, 1999, as well as unexercised options held as of the end
of such fiscal year.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Securities
Shares Underlying Value of Unexercised
Acquired Unexercised Options at In-the-Money Options
on Value December 31, 1999 December 31, 1999
Name Exercise Realized Exercisable / Unexercisable Exercisable / Unexercisable(1)
---- -------- -------- ----------- ------------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Carl J. Grivner, --- --- 103,122 / 721,878 $ 0 / $ 0
Chairman of the
Board, Chief
Executive Officer
and President
John T. Hanson --- --- --- / 150,000(2) --- / $ 0
Chief Financial
Officer
David Hickey --- --- 175,000 / 50,000(3) $ 0 / $ 0
General Manager -
Europe
Stephen Courter --- --- 50,000 / 100,000(4) $ 0 / $ 0
Former Regional
Vice President -
Europe
Paul A. Moore 250,000(7) $2,000,000 520,000 / --- $ 0 / ---
Former Chief
Executive
Officer
Phillip S. Magiera --- --- 405,000 / --- $106,400 / ---
Former Chief
Financial Officer
Daniel G. Lazarek 75,000 $ 103,111 275,000 / ---(5) $ 0 / ---
Former Vice
President Global
Sales and
Marketing
Donald C. Hilbert, Jr. --- --- 13,000 / 26,667(6) $ 0 / $ 0
Former Controller
</TABLE>
21
<PAGE>
(1) Value is calculated in accordance with the rules of the Securities and
Exchange Commission by subtracting the exercise price per share for each
option from the fair market value of the underlying Common Stock at
December 31, 1999 and multiplying by the number of shares subject to the
option. The fair market value of one share of Common Stock as of December
31, 1999 was $2.08 per share.
(2) Options to acquire 100,000 shares of Common Stock were cancelled upon Mr.
Courter's resignation effective January 2000.
(3) Represents options held and exercised by MBCP, an entity over which Mr.
Moore shares voting and investment powers.
(4) Options to acquire 150,000 shares of Common Stock were cancelled upon Mr.
Lazarek's resignation effective September 1999.
(5) Options to acquire 20,000 shares of Common Stock were cancelled upon Mr.
Hilbert's resignation effective March 2000.
(6) An additional options to acquire 6,667 shares of Common Stock were also
cancelled upon Mr. Hilbert's resignation.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
This Report of the Compensation Committee shall not be deemed incorporated
by reference by any general statement incorporating this Proxy Statement into
any filing under the Securities Act of 1933 ("Securities Act") or under the
Exchange Act, except to the extent that the Company specifically incorporates
the information contained herein by reference, and shall not otherwise be deemed
filed under those Acts.
The Compensation Committee of the Board of Directors is responsible for
determining the compensation policies for the executive officers of the Company.
It also administers the Long-term Incentive Plan and will administer the 2000
Long-term Stock Incentive Plan described under Proposal No. 2 below, if approved
by the stockholders.
Compensation Philosophy
The Company intends to enter a highly competitive and dynamic industry. The
Company's success in such an environment will depend, in large part, on its
ability to attract and retain talented executives. The Company must provide
executives with long- and short-term incentives to maximize corporate
performance, and reward successful efforts to do so. As a result, the
Committee's compensation policies are designed to:
. Provide a competitive level of compensation to attract and retain
talented management;
. Reward achievements in corporate performance
. Recognize individual initiative and performance
. Align the interests of executives with the stockholders in
order to maximize stockholder value.
22
<PAGE>
The Committee's goal is to provide a competitive compensation package based
on a review of publicly available information about the compensation paid to
similarly situated executives. The Committee believes that a substantial
portion of compensation should be tied to the attainment of long- and short-term
objectives.
To achieve these compensation objectives, the Committee has developed a
compensation philosophy for executive officers consisting of base salary,
an annual bonus and awards of stock options.
Base Salary
The salary levels of our executive officers are set out in employment
agreements with the officers and were determined following consultation with
independent consultants and outside advisors after considering the executive
compensation policies described above. In 2000, it was determined in
consultation with Mr. Grivner, that Mr. Grivner's salary should be reduced from
$500,000 to $300,000 to align Mr. Grivner's compensation with compensation
levels in the Company's anticipated new line of business and that additional
stock options should be awarded to Messrs. Grivner, Hanson and Hickey to align
their compensation with the industry's focus on stock option-based compensation.
Bonus
The Committee believes that a significant portion of the compensation of
its executive officers, including Mr. Grivner, should be in the form of a bonus.
Mr. Grivner's minimum bonus is guaranteed. In keeping with the Company's goals
of rewarding achievements in corporate performance and recognizing individual
initiative and performance, in early 2000, the Board of Directors awarded
Messrs. Grivner and Hanson special bonuses in the amounts of $250,000 and
$112,500, respectively, in connection with their efforts relating to the sale of
substantially all of the assets of the Company to Energis.
Stock Options
The Committee believes that stock options provide a valuable tool for
aligning the interests of management with stockholders and focusing management's
attention on the long-term growth of the Company. The Committee expects to
continue granting options.
In 1999, the Committee granted options to purchase 825,000 shares of Common
Stock to Mr. Grivner and options to purchase 150,000 shares of Common Stock to
Mr. Hanson. In early 2000, the Board of Directors approved the 2000 Long-term
Stock Incentive Plan and its submission to the stockholders to enable the
Compensation Committee to continue to use stock options to provide incentives to
management.
Policy on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code of 1986, as amended, prohibits
the Company from deducting more than $1 million in compensation paid to certain
executive officers in a single year. An exception to the $1 million limit is
provided for "performance-based compensation" that meets certain requirements,
including approval by the stockholders. Certain options granted under the
Company's incentive compensation plans may qualify as "performance-based
compensation" and
23
<PAGE>
will be excluded in calculating the $1 million limit under Section 162(m).
Options and other awards that do not qualify as "performanced-based
compensation" will not be excluded in calculating the $1 million limit under
Section 162(m).
Submitted by the Compensation Committee
Peter A. Howley Andrew G. C. Sage, III
STOCK PRICE PERFORMANCE GRAPH
Comparison of Five Year Cumulative Total Return Among
WorldPort Communications, Inc.,
Nasdaq Composite Index and Russell 2000 Index
The following graph compares total stockholder return on the Company's
Common Stock to two indices: the NASDAQ composite index and the Russell 2000
Index. The graph assumes $100 was invested in the Company's Common Stock on June
17, 1997, the first day of trading of the Common Stock, and in each of the
foregoing indices, and assumes reinvestment of dividends.
[GRAPH APPEARS HERE]
<TABLE>
<S> <C> <C> <C> <C>
6/17/97 12/31/97 12/31/98 12/31/99
-------------------------------------------
WorldPort Communications, Inc. . $ 100.00 $ 362.50 $ 484.38 $ 103.91
- -------------------------------------------------------------------------------------------
Russell 2000 Index . $ 100.00 $ 111.02 $ 107.90 $ 129.04
- -------------------------------------------------------------------------------------------
Nasdaq Composite Index . $ 100.00 $ 109.01 $ 150.71 $ 277.75
- -------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
CERTAIN TRANSACTIONS
Heico Equity Investment
On January 25, 1999, the Heico Companies LLC ("Heico") completed a $40
million equity investment in WorldPort pursuant to the Series C Preferred Stock
Purchase Agreement (the "Series C Purchase Agreement"), dated December 31, 1998,
between WorldPort and Heico. Pursuant to the Series C Purchase Agreement, Heico
acquired an aggregate of 1,132,824 shares of Series C for an aggregate purchase
price of $40 million. Heico funded its investment through its existing credit
facilities. In this transaction, Heico also received an option (the "Series C
Option") to acquire up to 283,206 shares of Series C for an aggregate purchase
price of $10 million and certain additional rights including, with respect to
the Common Stock issued upon conversion of the Series C, certain demand and
piggyback registration rights.
Pursuant to the Series C Purchase Agreement, on December 31, 1998,
WorldPort increased the size of its Board of Directors to eight members and
appointed four individuals designated by Heico to serve as directors. WorldPort
also agreed to cause Heico's designees to comprise at least one-half of the
boards of directors of each of its subsidiaries. In addition, WorldPort amended
its Bylaws to provide that at least one of Heico's designees and (except in the
limited situation regarding certain proposed refinancings of WorldPort's
outstanding credit facility) one of the directors who was not designated by
Heico, must approve any action presented for approval by the Board in order for
such to be properly approved by the Board. As of November 10, 1999, as a result
of three previous resignations, the Board consisted of five directors, three of
whom were designated by Heico.
On July 15, 1999, Heico completed an additional $15 million equity
investment in WorldPort through (i) the exercise of the Series C Option to
purchase 283,206 additional shares of Series C for an aggregate purchase price
of $10 million and (ii) the purchase of 141,603 shares of the newly-created
Series E for an aggregate purchase price of $5 million. Heico funded its
investment through its existing credit facilities. In connection with this
investment, WorldPort granted Heico a three-year option (the "Series F Option")
to purchase 424,809 shares of the newly-created Series F for an aggregate
purchase price of $15 million.
As a result of Heico's exercise of the Series C Option, as of July 15,
1999, Heico owned 1,416,030 shares of Series C, representing all of the issued
and outstanding shares of Series C. Heico is entitled to 40 votes per share of
Series C and is entitled to vote on all matters submitted to a vote of the
stockholders of WorldPort, voting together with the holders of Common Stock as a
single class. At Heico's option, it may convert the Series C into Common Stock
at a conversion price of $3.25 per share of Common Stock (i.e., 10.865 shares of
Common Stock for each share of Series C).
The 141,603 shares of Series E were purchased by Heico pursuant to a Series
E Preferred Stock Purchase Agreement, dated as of July 15, 1999, between
WorldPort and Heico. Such shares represent all of the issued and outstanding
shares of Series E. With respect to the Series E, Heico is entitled to that
number of votes as is equal to the number of shares of Common Stock into which
the Series E could be converted and is entitled to vote on all matters submitted
to a vote of the stockholders of WorldPort, voting together with the holders of
Common Stock as a
25
<PAGE>
single class. At Heico's option, it may convert the Series E into Common Stock
at a conversion price of $3.25 per share of Common Stock (i.e., 10.865 shares of
Common Stock for each share of Series E).
Upon the purchase of Series F, Heico will be entitled to that number of
votes as is equal to the number of shares of Common Stock into which the Series
F could be converted and will be entitled to vote on all matters submitted to a
vote of the stockholders of WorldPort, voting together with the holders of
Common Stock as a single class. At Heico's option, following its purchase of
Series F, it may convert the Series F into Common Stock at a conversion price of
$4.00 per share of Common Stock (i.e., 8.8275 shares of Common Stock for each
share of Series F).
In June 1999, Heico agreed to provide a bond to support a bid by WorldPort
to acquire a telecommunications company in Europe. In consideration of the bond,
WorldPort agreed to issue to Heico 25,000 shares of WorldPort Common Stock at a
purchase price of $0.01 per share. The bond provided by Heico was returned when
WorldPort's bid was unsuccessful.
Heico purchased a participating interest in the Company's interim loan in
the amount of approximately $18.6 million in principal plus accrued interest
thereon.. In connection with Heico's participation in the interim loan, Heico
was granted warrants to purchase 416,240 shares of WorldPort Common Stock for
$.01 per share at any time expiring in June 2008.
In December 1999, WorldPort executed a convertible note in favor of
Heico in the aggregate principal amount of $2 million. The convertible note
accrued interest at a rate of approximately 14% and matured on January 14, 2000.
Heico has elected to convert the convertible note into a newly-created series of
convertible preferred stock of WorldPort. We are currently negotiating the
terms of the new preferred stock with Heico. It is anticipated that we will
issue two million shares of the new preferred stock to Heico in exchange for its
note. The preferred stock will be convertible on a 1:1 basis into Common Stock
and will have voting rights on an as converted basis. The proceeds of this loan
were primarily used by WorldPort as working capital and for general corporate
purposes pending the receipt of the proceeds from the Energis transactions.
Interests of Heico in Energis Transaction
Heico was the minority stockholder of WorldPort Communications Europe
Holding B.V. ("WCEH"), owning 15% of its outstanding capital stock, which was
sold to Energis as part of the Company's sale of substantially all of its assets
to Energis (the "Sale"). Simultaneously with the execution of the agreements
relating to the Sale by WorldPort and Energis (the "Sale Agreements"), on
November 11, 1999, Heico entered into an agreement with Energis to sell its 15%
interest in WCEH for $64.6 million in cash and Energis' agreement to repay to
Heico a loan and accrued interest thereon in the aggregate amount of $12.2
million as of September 30, 1999. This transaction was completed
contemporaneously with the Sale. Additionally, Heico holds approximately
$620,000 of accounts receivable of EnerTel.
26
<PAGE>
Heico was one of the lenders participating in the Company's interim loan.
Heico received approximately $18.6 million in principal plus accrued interest
thereon pursuant to the Sale Agreements upon consummation of the Sale when the
interim loan was paid in full. In connection with Heico's participation in the
interim loan, Heico was granted warrants to purchase 416,240 shares of WorldPort
Common Stock for $.01 per share. The warrants expire in June 2008.
In connection with the service of its designees on WorldPort's Board of
Directors, Heico has incurred various expenses which are reimbursable by
WorldPort. Heico will be reimbursed for these expenses from the proceeds
received by WorldPort from the Sale.
Other Transactions
Stanley H. Meadows, one of our directors, is a partner of McDermott, Will &
Emery, a law firm which provided us with legal services during 1999.
PROPOSAL NO. 2: APPROVAL OF THE COMPANY'S 2000 LONG-TERM STOCK INCENTIVE PLAN
General
The Company believes that its success in its new line of business
depends significantly upon being able to attract and retain officers and key
employees, and that these individuals are best motivated to put forth maximum
effort on behalf of the Company if they own an equity interest in the Company.
In accordance with this philosophy, the Board of Directors adopted the 2000
Long-term Stock Incentive Plan and has directed that it be submitted for
approval by the stockholders at the 2000 Annual Meeting. The primary features
of the 2000 Long-term Stock Incentive Plan are summarized below. A copy of the
2000 Long-term Stock Incentive Plan is attached as Exhibit A and should be
referred to for a complete statement of its terms.
The Company's directors, officers, other employees and any key consultant
or other person providing key services to the Company or one of its subsidiaries
will be eligible to receive awards under the plan when designated by the
Compensation Committee (or subcommittee) of the Board of Directors. Currently,
approximately 13 persons consisting of directors, officers and key employees of
the Company and its subsidiaries are expected to participate in the plan.
Incentives under the plan may be granted in any one or a combination of the
following forms:
. incentive and non-qualified stock options;
. restricted stock; and
. other stock-based awards.
27
<PAGE>
Purposes of the Proposal
The Company is committed to creating and maintaining a compensation system
based to a significant extent on grants of equity-based incentive awards. The
Company believes that providing personnel with a proprietary interest in the
growth and performance of the Company is crucial to stimulating individual
performance while at the same time enhancing stockholder value. As only
1,939,448 shares remain available for grant under the existing Long-Term
Incentive Plan, the Company believes that it is important that a new plan be
established to allow the Company to accomplish its goals.
Terms of the 2000 Long-term Stock Incentive Plan
Shares Issuable through the Plan
The total number of shares of Common Stock with respect to which
incentives may be granted under the 2000 Long-term Stock Incentive Plan is
limited to 15,000,000 shares, representing approximately 30.1% of the
outstanding Common Stock (including preferred stock on an as-converted basis).
In addition, commencing January 1, 2001, and on each January 1st thereafter
ending with January 1, 2007, the number of shares shall be increased by the
number of whole shares of Common Stock as is equal to one percent of the number
of shares of Common Stock issued and outstanding on January 1st. No more than
5,000,000 of such shares may be issued as incentive stock options.
If the proposed plan is approved by the stockholders, the Company would
have outstanding options to acquire 8,712,635 shares, or 17.5% of the
outstanding Common Stock (including preferred stock on an as-converted basis).
The Company would also have available for future grants 1,939,448 shares under
the existing plan and 10,350,000 shares under the 2000 Long-term Stock Incentive
Plan.
Limitations And Adjustments To Shares Issuable Through The Plan
Incentives relating to no more than 2,000,000 shares may be granted to a
single participant in one calendar year. No more than 100,000 shares may be
granted to any non-employee director in any calendar year. If permitted by the
Compensation Committee, any incentive may be settled in cash rather than Common
Stock.
28
<PAGE>
For purposes of determining the maximum number of shares of Common Stock
available for delivery under the plan, shares of Common Stock that are not
delivered because the incentive is forfeited or cancelled and shares of Common
Stock that are not delivered to a participant because the incentive is settled
in cash or used to satisfy the applicable tax withholding obligation, will not
be deemed to have been delivered under the plan.
Appropriate adjustments may be made to all of the share limitations
provided in the plan, including shares subject to outstanding incentives, in the
event of any recapitalization, stock dividend, stock split, combination of
shares or other change in the Common Stock, and the terms of any incentive will
be adjusted to the extent appropriate to provide participants with substantially
the same relative rights before and after the occurrence of such an event.
On March 22, 2000, the closing sale price of a share of Common Stock, as
reported on the Nasdaq OTC Bulletin Board was $3.2188.
Administration of the Plan
The plan provides for a committee of the Board of Directors to administer
the plan and the Board has designated the Compensation Committee to serve that
purpose. The Compensation Committee has authority to:
. award incentives under the plan;
. establish any rules or regulations relating to the plan that it
determines to be appropriate;
. delegate its authority as appropriate; and
. make any other determinations that it believes necessary or advisable
for the proper administration of the plan.
The Compensation Committee may delegate its authority under the plan for
grants to non-executive officers.
Amendments to the Plan
The board of directors may amend or discontinue the plan at any time.
However, stockholder approval of an amendment will be necessary if the amendment
would:
. increase the benefits accruing to participants under the
plan;
. increase the number of shares of Common Stock that may be
issued under the plan; or
. expand the classes of persons eligible to participate in the plan.
29
<PAGE>
No amendment or discontinuance of the plan may change or impair any
previously granted incentive without the consent of the recipient.
Types of Incentives
The Compensation Committee may grant non-qualified or incentive stock
options, restricted stock, and other stock-based awards, each of which is
described further below.
Stock Options. The Compensation Committee may grant non-qualified options
or incentive options to purchase shares of Common Stock. The Compensation
Committee will determine the number of shares covered by and the exercise price
of each option. The option exercise price may not be less than the fair market
value of the Common Stock on the date of grant, except in the case of an option
granted in substitution for an award of another company in an acquisition
transaction. The term of the options, and the time or times that the options
become exercisable, will also be determined by the Compensation Committee;
however, the term of an incentive stock option may not exceed 10 years. The
Compensation Committee may also approve the purchase by the Company of an
unexercised stock option from the optionee by mutual agreement for the
difference between the exercise price and the fair market value of the shares
covered by the option.
The option exercise price may be paid in cash, by check, in shares of
Common Stock that (unless otherwise permitted by the Compensation Committee)
have been held for at least six months or, if permitted by the Compensation
Committee, other property or through a broker-assisted "cashless" exercise
arrangement.
Incentive stock options will be subject to certain additional requirements
necessary in order to qualify for favorable tax treatment under Section 422 of
the Internal Revenue Code.
Restricted Stock. Shares of Common Stock may be granted by the Compensation
Committee to an eligible participant and made subject to restrictions regarding
their sale, pledge or other transfer by the participant for a specified period.
All shares of restricted stock will be subject to such restrictions as the
Compensation Committee may designate in an agreement with the participant. The
agreement may specify that the shares are required to be forfeited or resold to
the Company in the event of termination of employment or in the event specified
performance goals or targets are not met. Unless otherwise provided in the
restricted stock agreement, the Compensation Committee may at any time declare
the restricted period terminated and permit the sale or transfer of restricted
stock. Subject to the restrictions provided in the restricted stock agreement
and the plan, a participant receiving restricted stock will have all of the
rights of a stockholder.
Restricted stock intended to qualify as performance-based compensation must
meet additional requirements imposed by Section 162(m) of the Internal Revenue
Code.
Other Stock-Based Awards. The Compensation Committee is authorized to grant
other stock-based awards, including performance units, stock appreciation
rights, and bonus stock and awards in lieu of cash obligations, the value of
which would be based in whole or in part on the value of shares of Common Stock.
Other stock-based awards may be awards of shares of Common
30
<PAGE>
Stock or may be denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, shares of Common Stock. The
Compensation Committee determines the terms and conditions of any such stock-
based awards and may provide that these awards are payable in whole or in part
in cash. Other stock-based awards intended to qualify as performance-based
compensation must be meet additional requirement imposed by Section 162(m) of
the Internal Revenue Code.
Termination of Employment
If a participant ceases to be an employee of the Company for any reason,
including death, any incentive may be exercised, shall vest or shall expire at
such time or times as may be determined by the Compensation Committee in the
award agreement with the participant.
Change of Control
In the event of a change of control of the Company (as defined in the
plan), all outstanding incentives granted under the plan may automatically
become fully exercisable, all restrictions or limitations on any incentives may
lapse and all performance criteria and other conditions relating to the payment
of incentives may be deemed to be achieved or waived as provided in the award
agreements.
Transferability of Incentives
The incentives awarded under the plan may not be transferred except:
. by will;
. by the laws of descent and distribution; or
. in the case of awards, other than incentive stock options, without
consideration, to such persons as may be permitted by the Compensation
Committee.
Payment Of Withholding Taxes
The Company may withhold from any payments or stock issuances under the
plan or from payroll, or collect as a condition of payment, any taxes required
by law to be withheld.
Federal Income Tax Consequences of Stock Options
Under existing federal income tax provisions, a participant who receives
stock options under the plan will not recognize any income, nor will the Company
be entitled to any tax deduction, in the year the option is granted.
When a non-qualified stock option is exercised, the employee will recognize
ordinary income in an amount equal to the excess of (1) the aggregate fair
market value of the shares on the exercise date over (2) the exercise price paid
for the shares, and, subject to Section 162(m) of the Internal Revenue Code, the
Company will be entitled to a deduction in an amount equal to the amount
includable in the income of the participant in the taxable year in which the
employee is required to recognize the income.
31
<PAGE>
A participant generally will not recognize any income upon the exercise of
an incentive stock option. However, the excess of the fair market value of the
shares at the time of exercise over the option price will be an item of
adjustment that may, depending on particular factors relating to the employee,
subject the participant to the alternative minimum tax imposed by Section 55 of
the Internal Revenue Code. The alternative minimum tax is imposed to the extent
it exceeds the individual's regular federal income tax, and it is intended to
ensure that individual taxpayers who have economic income do not avoid income
tax by taking advantage of exclusions, deductions and credits. A participant
will recognize capital gain or loss in the amount of the difference between the
exercise price and the sale price on the sale or exchange of stock acquired upon
exercise of an incentive stock option, provided the participant does not dispose
of this stock within either two years from the date of grant or one year from
the date of exercise (the "required holding periods"). A participant disposing
of these shares before the expiration of the required holding period will
recognize ordinary income, generally equal to the difference between the option
price and the fair market value of the stock on the date of exercise. The
remaining gain, if any, will be capital gain. The Company will not be entitled
to a federal income tax deduction in connection with the exercise of an
incentive stock option, except where the employee disposes of the stock before
the expiration of the required holding period.
If the exercise price of a non-qualified option is paid by the surrender of
previously owned shares, the basis and the holding period of the previously
owned shares carries over to the same number of shares received in exchange for
the previously owned shares. The compensation income recognized on exercise of
these options is added to the basis of the shares received. If the exercised
option is an incentive stock option and the shares surrendered were acquired
through the exercise of an incentive stock option and have not been held for the
applicable holding period, the optionee will recognize income on such exchange,
and the basis of the shares received will be equal to the fair market value of
the shares surrendered. If the applicable holding period has been met on the
date of exercise, there will be no income recognition and the basis and the
holding period of the previously owned shares will carry over to the same number
of shares received in exchange, and the remaining shares will begin a new
holding period and have a zero basis.
When the exercisability of an option granted under the plan is accelerated
upon a change of control, not more than any excess on the date of the change in
control of the fair market value of the shares subject to the option over the
exercise price of such shares may be characterized as "parachute payments"
(within the meaning of Section 280G of the Internal Revenue Code) if the sum of
these amounts and any other contingent payments received by the employee exceeds
an amount equal to three times the "base amount" for the employee. The base
amount generally is the average of the annual compensation of the employee for
the five years preceding the change in ownership or control. An "excess
parachute payment" with respect to any employee is the excess of the present
value of the parachute payments to the person, in the aggregate, over and above
that person's base amount. If the amounts received by an employee upon a change
in control are characterized as parachute payments, the employee will be subject
to a 20% excise tax on the excess parachute payments, and we will be denied any
deduction with respect to the excess parachute payments.
32
<PAGE>
Awards To Be Granted
The Compensation Committee has approved the grant of non-qualified options
to purchase a total of 4,650,000 shares of Common Stock under the 2000 Long-term
Stock Incentive Plan, to the persons and groups described in the table below.
<TABLE>
<CAPTION>
New Plan Benefits under the 2000 Long-term Stock Incentive Plan
Name And Position Number Of Options Option Price
- ----------------- ------------------ ------------
<S> <C> <C>
Employees
Carl J. Grivner 2,750,000 $ 2.6934
Chief Executive Officer
John T. Hanson 650,000 $ 2.6934
Chief Financial Officer
David Hickey 650,000 $ 2.6934
General Manager Europe-
Corporate Development
All other employees as a group 200,000 $ 2.6934
Non-employees
[new director] 100,000 (1)
Director
Michael E. Heisley, Sr. 100,000 (1)
Director
Stanley H. Meadows 100.000 (1)
Director
Andrew G. C. Sage II 100,000 (1)
Director
</TABLE>
________________________
(1) The exercise price of these options will be the fair market value of the
Common Stock on the date of grant
Vote Required
The affirmative vote of the holders of a majority of the voting power
present or represented at the Meeting is required for approval of the
2000 Long-term Stock Incentive Plan. The Company and its Chief Executive
Officer have already received irrevocable proxies from certain of the Company's
stockholders directing such proxy holders to vote such stockholders' shares of
Series B and Series D Preferred Stock in favor of this proposal. Such shares,
together with the shares controlled by the Company's officers and directors,
represent approximately 94 million votes or approximately 75% of the total
outstanding voting power of the Company.
The Board Of Directors unanimously recommends that stockholders vote FOR
the proposal to approve the 2000 Long-term Stock Incentive Plan.
PROPOSAL NO. 3: APPROVAL OF AN AMENDMENT TO THE CERTIFICATE OF INCORPORATION
TO CHANGE THE NAME OF THE COMPANY TO [NEW NAME]
On April 6, 2000, the Board of Directors unanimously adopted a resolution
authorizing an amendment to the Company's Certificate of Incorporation changing
the name of the Company to "[new name]." The Board also recommended that the
proposed amendment be submitted to the Company's stockholders for consideration
and approval at the Meeting.
If the proposal to change the name of the Company is approved by the
stockholders, Article One of the Certificate of Incorporation will be amended to
read in its entirety as follows:
33
<PAGE>
"Article One: The name of the corporation is [new name]."
In all other respects, the terms and provisions of the Certificate of
Incorporation will remain unaltered.
When the Company began its operations in 1997, WorldPort Communications,
Inc. was a telecommunications company serving Europe and the United States of
America. In January 2000, the Company sold substantially all of its assets and
began to explore new lines of business to pursue. The Board of Directors
believes that the new name "[new name]" reflects the Company's new focus.
The change of name will not affect the validity or transferability of stock
certificates currently outstanding, and the Company's stockholders will not be
required to surrender or exchange any certificates now held by them. The change
will not affect the capital structure of the Company. If the proposal is
approved by the stockholders, the change in the Company's name will become
effective upon filing of a certificate of amendment to the Certificate of
Incorporation with the Secretary of State of the State of Delaware. It is
anticipated that the officers of the Company will promptly make appropriate
filings in the State of Delaware and take any other actions necessary to
implement the amendment; however, if in the judgment of the Board of Directors,
any circumstances exist that would make consummation of the name change
inadvisable, then, in accordance with Delaware law and notwithstanding the
approval of the stockholders of the proposed amendment, the Board may abandon
the name change, either before or after approval by the stockholders, at any
time prior to the effectiveness of the filing of the certificate of amendment.
The Company intends to change its stock ticker symbol from "WRDP" to "[new
ticker]" upon effectiveness of the name change.
The affirmative vote of the holders of a majority of the voting power
present or represented at the Annual Meeting is required for approval of this
proposal.
The Board of Directors recommends that the stockholders vote FOR the
proposal to amend the certificate of incorporation to change the Company's name
to "[new name]."
PROPOSAL NO. 4: APPROVAL OF AN AMENDMENT TO CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK OF THE
COMPANY
The Company's Certificate of Incorporation currently authorizes the
issuance of 65,000,000 shares of Common Stock. The Board of Directors has
approved an amendment to increase the number of authorized shares of Common
Stock to 200,000,000. The number of authorized shares of Preferred Stock will
remain unchanged.
Specifically, Article Four, Paragraph A of the Certificate of Incorporation
will be amended and restated in its entirety as follows:
34
<PAGE>
"A. Common Stock. Two Hundred Million (200,000,000) shares of Common
Stock, with par value of $.0001 per share, to be issued as and when the Board of
Directors shall determine."
In all other respects, the terms and provisions of the Certificate of
Incorporation will remain unaltered.
As of March 22, 2000, approximately 28,737,589 of the Company's 65 million
currently authorized shares of Common Stock were issued and outstanding. Of the
remaining authorized shares of Common Stock, approximately 6,402,083 were
reserved for issuance in connection with the Company's benefit plans, 21,103,171
were reserved for issuance upon conversion of the Company's issued and
outstanding Preferred Stock and 4,069,904 were reserved for issuance in
connection with the warrants issued to lenders under the Company's prior interim
loan facility.
Upon approval of the proposed amendment by the stockholders, the additional
shares of Common Stock would be authorized, but unissued and unreserved and
could be issued for various general corporate purposes including, among other
things, stock splits, stock dividends, benefit plans, including the 2000 Long-
term Stock Incentive Plan described under Proposal No. 2 above, financing
transactions or acquisitions. The Board of Directors believes that the
additional authorized Common Stock would give the Company greater flexibility by
allowing the Company to issue shares of Common Stock for these and other
purposes without the expense and delay of a stockholders meeting to authorize
additional shares if and when the need arises. However, the issuance of the
additional shares of Common Stock may have a dilutive effect on the Company's
earnings per share and the percentage voting power of a stockholder that does
not purchase additional shares of Common Stock.
The Board of Directors is not proposing the increase in the authorized
number of shares of Common Stock with the intention of using the shares for
anti-takeover purposes. However, it is possible that the issuance of additional
shares of Common Stock authorized by the proposed amendment may render more
difficult or discourage a merger, tender offer or proxy contest involving the
Company, the assumption of control of the Company by the holder of large block
of the Common Stock or the removal of incumbent management. For example, the
issuance of additional shares of Common Stock could discourage a potential
acquiror by:
. increasing the number of shares of Common Stock necessary to gain control
of the Company
. permitting the Company, through the public or private issuance of shares
of Common Stock, to dilute the stock ownership of a potential acquiror or
. permitting the Company to privately place shares of Common Stock with
purchasers who may side with the Company's Board of Directors in opposing
a takeover bid
Except for the proposed 2000 Long-term Stock Incentive Plan and the grants
contemplated thereunder described under Proposal No. 2 above, the option to
acquire Series F Preferred Stock held by Heico, and the convertible note issued
to Heico, the Company does not have any current plans,
35
<PAGE>
agreements or understandings under which any of the additional shares of Common
Stock to be authorized would be issued.
If the proposal is approved by the stockholders, the increase in the number
of authorized shares of Common Stock will become effective upon filing of a
certificate of amendment to the Certificate of Incorporation with the Secretary
of State of the State of Delaware. It is anticipated that the officers of the
Company will promptly make appropriate filings in the State of Delaware and take
any other actions necessary to implement the amendment. If in the
judgment of the Board of Directors, any circumstances exist that would make
consummation of the increase in the number of authorized shares of Common Stock
inadvisable, then, in accordance with Delaware law and notwithstanding the
approval of the stockholders of the proposed amendment, the Board may abandon
the increase, either before or after approval by the stockholders, at any time
prior to the effectiveness of the filing of the certificate of amendment.
The Company's stockholders will have no dissenters' rights with respect to
the proposed amendment and will have no preemptive rights in connection with the
issuance of any new shares of Common Stock.
The Company and its Chief Executive Officer have already received
irrevocable proxies from certain of the Company's stockholders directing such
proxy holders to vote such stockholders' shares of Series B and Series D
Preferred Stock in favor of this proposal. Such shares, together with the shares
controlled by the Company's officers and directors, represent approximately 94
million votes or approximately 75% of the total outstanding voting power of the
Company.
The affirmative vote of the holders of a majority of the voting power
present or represented at the Annual Meeting is required for approval of this
proposal.
The Board of Directors recommends that the stockholders FOR the proposal to
amend the Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 65,000,000 to 200,000,000.
PROPOSAL NO. 5 - RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP has audited the books and records of the
Company since its inception and the Board of Directors will recommend at the
Meeting that the stockholders ratify the selection of Arthur Andersen LLP to
audit the accounts of the Company for the current fiscal year. Representatives
of that firm are expected to be present at the Meeting with the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
The affirmative vote of the holders of a majority of the voting power
present or represented at the Annual Meeting is required for approval of this
proposal.
The Board of Directors recommends a vote FOR ratification of the selection
of Arthur Andersen LLP.
STOCKHOLDERS' PROPOSALS FOR THE 2000 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders under SEC Rule 14a-8 must be made in accordance with the
Company's By-Laws, and must be received by the Secretary of the Company at the
Company's principal executive
36
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offices for inclusion in the Company's Proxy Statement and form of proxy
relating to that meeting no later than December 19, 2000.
Notice of stockholder matters intended to be submitted at the next annual
meeting outside the processes of Rule 14a-8 will be considered untimely if not
received by the Company at the Company's principal executive offices by April
14, 2001 or if received prior to February 12, 2001.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors knows of no
other business that will be presented for consideration at the Meeting. If
other proper matters are presented at the Meeting, however, it is the intention
of the proxy holders named in the enclosed form of proxy to take such actions as
shall be in accordance with their best judgment.
By Order of the Board of Directors
Carl J. Grivner
Chief Executive Officer
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EXHIBIT A
WORLDPORT COMMUNICATIONS, INC.
2000 LONG-TERM STOCK INCENTIVE PLAN
SECTION 1. Purpose of the Plan
The purpose of the WorldPort Communications, Inc. 2000 Long-Term Stock
Incentive Plan (the "Plan") is to promote the success, and enhance the value, of
WorldPort Communications, Inc. (the "Company") by linking the personal interests
of its directors, officers, employees and key consultants to those of Company
shareholders and by providing such individuals with an incentive for outstanding
performance. The Plan is further intended to provide flexibility to the Company
in its ability to motivate, attract, and retain the services of individuals upon
whose judgment, interest, and special effort the successful conduct of the
Company's operation is largely dependent.
SECTION 2. Definitions
For purposes of the Plan, the following terms shall have the meanings as
set forth below:
(a) "Award" means any Option, SAR (including a Limited SAR),
Restricted Stock, Performance Units, Stock granted as a bonus or in lieu of
other awards, other Stock-Based Award or other cash payments granted to a
Participant under the Plan.
(b) "Award Agreement" shall mean the written agreement, instrument
or document evidencing an Award.
(c) "Change of Control" means and includes each of the following:
(i) the acquisition, in one or more transactions, of beneficial
ownership (within the meaning of Rule 13d-3 under the
Exchange Act) by any person or entity or any group of
persons or entities who constitute a group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
(collectively, a "Person"), other than a trustee or other
fiduciary holding securities under an employee benefit plan
of the Company or a Subsidiary, of any securities of the
Company such that, as a result of such acquisition, such
Person (other than a Person covered under paragraph (ii)
below) beneficially owns (within the meaning of Rule l3d-3
under the Exchange Act), directly or indirectly, more than
50% of the Company's outstanding voting securities entitled
to vote on a regular basis for a majority of the members of
the Board of Directors of the Company;
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(ii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in
(x) the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) at least 66 2/3% of the
total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately
after such merger or consolidation (including, without
limitation, an entity that as a result of that transaction
owns the Company or all or substantially all of the
Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions relative
to each other as their ownership, immediately prior to that
merger or consolidation, of the voting securities of the
Company, (y) no person (other than the Company, that entity
resulting from that merger or consolidation, or any employee
benefit plan (or related trust) sponsored or maintained by
the Company, any Subsidiary 80% or more of whose outstanding
voting stock is directly or indirectly beneficially owned by
the Company or that entity resulting from that merger or
consolidation) beneficially owning, directly or indirectly,
20% or more of the then outstanding shares of common stock
of the entity resulting from that merger or consolidation or
the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors of that entity, and (z) at least a majority of the
members of the Board of Directors of the entity resulting
from that merger or consolidation being Continuing
Directors;
(iii) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one or more transactions)
all or substantially all of the Company's assets; or
(iv) with respect to a Person who beneficially owns, as of the
date this Plan is adopted by the Company shareholders,
directly or indirectly, more than 25% of the Company's
outstanding voting securities entitled to vote on a regular
basis for a majority of the members of the Board of
Directors of the Company, the consummation by such Person of
a transaction which results in the Company no
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longer having any securities registered pursuant to Section
12 of the Exchange Act.
(d) "Exchange Act" means the Securities Exchange Act of 1934,
including amendments or successor statutes or similar intent.
(e) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(f) A "Continuing Director" means, as of any date of determination,
any member of the Board of Directors of the Company who (i) was a member of such
Board on January 1, 2000, or (ii) was nominated for election or elected to such
Board with the affirmative vote of at least two-thirds (2/3) of the Continuing
Directors who were members of such Board at the time of such nomination or
election (either by a specific vote or by approval of the proxy statement of the
Company in which that person is named as a nominee for director, without
objection to that nomination), but excluding, for that purpose, any individual
whose initial assumption of office occurs as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the Exchange Act) with
respect to the election or removal of directors or other actual or threatened
solicitation or proxies or consents by or on behalf of a person other than the
Board of Directors.
(g) "Fair Market Value" means, with respect to Stock, Awards, or other
property, the fair market value of such Stock, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee in good faith and in accordance with applicable law.
Unless otherwise determined by the Committee, the Fair Market Value of Stock
shall mean the closing sales price of Stock on the relevant date as reported on
the stock exchange or market on which the Stock is primarily traded, or if no
sale is made on such date, then the Fair Market Value is the weighted average of
the mean of the closing sales prices of the Stock on the next preceding day and
the next succeeding day on which such sales were made, as reported on the stock
exchange or market on which the Stock is primarily traded.
(h) "ISO" means any Option designated as an "incentive stock option"
within the meaning of Section 422 of the Code.
(i) "Limited SAR" means an SAR exercisable only for cash upon a Change
of Control or other event, as specified by the Committee.
(j) "Option" means a right granted to a Participant pursuant to
Section 6(b) to purchase Stock at a specified price during specified time
periods. An Option may be either an ISO or a nonstatutory Option (an Option not
designated as an ISO).
(k) "Performance Unit" means a right granted to a Participant pursuant
to Section 6(c) to receive a payment in cash equal to the increase in the book
value of the Company during specified time periods if specified performance
goals are met.
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(l) "Restricted Stock" means Stock awarded to a Participant pursuant
to Section 6(d) that may be subject to certain restrictions and to a risk of
forfeiture.
(m) "Stock" means the common stock, $.0001 par value per share, of the
Company.
(n) "Stock-Based Award" means a right that may be denominated or
payable in, or valued in whole or in part by reference to the market value of,
Stock, including, but not limited to, any Option, SAR (including a Limited SAR),
Restricted Stock, Stock granted as a bonus or Awards in lieu of cash
obligations.
(o) "SAR" or "Stock Appreciation Right" means the right granted to a
Participant pursuant to Section 6(e) to be paid an amount measured by the
appreciation in the Fair Market Value of Stock from the date of grant to the
date of exercise of the right, with payment to be made in cash, Stock or as
specified in the Award, as determined by the Committee.
(p) "Subsidiary" shall mean any corporation, during any period in
which it is a "subsidiary corporation" (as that term is defined in Section
424(f) of the Code) with respect to the Company.
SECTION 3. Administration of the Plan
The Plan shall be administered by a committee of the Board of Directors of
the Company consisting of two or more directors appointed, from time to time, by
the Board or, at the discretion of the Board from time to time, the Plan may be
administered by the Board (the "Committee"). Any action of the Committee in
administering the Plan shall be final, conclusive and binding on all persons,
including the Company, its Subsidiaries, employees, Participants, persons
claiming rights from or through Participants and shareholders of the Company.
Subject to the provisions of the Plan, the Committee shall have full and
final authority in its discretion (a) to select the persons from among those
eligible under Section 4 to participate in the Plan ("Participants") who will
receive Awards pursuant to the Plan; (b) to determine the type or types of
Awards to be granted to each Participant; (c) to determine the number of shares
of Stock to which an Award will relate, the terms and conditions of any Award
granted under the Plan (including, but not limited to, restrictions as to
transferability or forfeiture, exercisability or settlement of an Award and
waivers or accelerations thereof, and waivers of or modifications to performance
conditions relating to an Award, based in each case on such considerations as
the Committee shall determine) and all other matters to be determined in
connection with an Award; (d) to determine whether, to what extent, and under
what circumstances an Award may be settled, or the exercise price of an Award
may be paid, in cash, Stock, other Awards or other property, or an Award may be
canceled, forfeited, or surrendered; (e) to determine whether, and to certify
that, performance goals to which the settlement of
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an Award is subject are satisfied; (f) to correct any defect or supply any
omission or reconcile any inconsistency in the Plan, and to adopt, amend and
rescind such rules and regulations as, in its opinion, may be advisable in the
administration of the Plan; and (g) to make all other determinations as it may
deem necessary or advisable for the administration of the Plan. The Committee
may delegate to officers of the Company or any Subsidiary the authority, subject
to such terms as the Committee shall determine, to perform administrative
functions and to perform such other functions as the Committee may determine, to
the extent permitted under Rule 16b-3 under the Exchange Act, Section 162(m) of
the Code and applicable law.
SECTION 4. Participation in the Plan
Participants in the Plan shall be selected by the Committee from among the
employees of the Company and its Subsidiaries, any consultant or other person
providing key services to the Company or a Subsidiary, and any member of the
Board of Directors of the Company or a Subsidiary; provided, however, that only
-------- -------
persons who are key employees of the Company or any Subsidiary may be granted
Options which are intended to constitute ISOs.
SECTION 5. Plan Limitations; Shares Subject to the Plan
(a) Subject to the provisions of Section 8(a) hereof, the aggregate
number of shares of Stock available for issuance as Awards under the Plan shall
not exceed 15,000,000 shares of Stock plus, commencing on January 1, 2001, and
on each January 1 thereafter ending with January 1, 2007, the number of shares
of Stock shall be increased by the number of whole shares of Stock as is equal
to 1% of the number of shares of Stock issued and outstanding on each such
January 1.
(b) Notwithstanding anything in the Plan to the contrary (subject to
adjustment as provided in Section 8(a) of the Plan), the aggregate number of
shares (i) available for issuance as Awards constituting ISOs shall not exceed
5,000,000 shares of Stock; (ii) that may be covered by Awards granted to any one
individual during any calendar year as Options and SARs shall be 2,000,000; or
(iii) that may be covered by Awards granted to any non-employee director in any
calendar year as an Option, SAR, and Restricted Stock shall be 100,000 shares of
Stock.
(c) No Award may be granted if the number of shares to which such Award
relates, when added to the number of shares previously issued under the Plan and
the number of shares which may then be acquired pursuant to other outstanding,
unexercised Awards, exceeds the number of shares available for issuance pursuant
to the Plan. If any shares subject to an Award are forfeited or such Award is
settled in cash or otherwise terminates for any reason whatsoever without an
actual distribution of shares to the Participant, any shares counted against the
number of shares available for issuance pursuant to the Plan with respect to
such Award shall, to the extent of any such forfeiture, settlement, or
termination, again be available for Awards under the Plan; provided, however,
-------- -------
that the Committee may adopt procedures for the counting of shares relating to
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<PAGE>
any Award to ensure appropriate counting, avoid double counting, and provide for
adjustments in any case in which the number of shares actually distributed
differs from the number of shares previously counted in connection with such
Award.
SECTION 6. Awards
(a) General. Awards may be granted on the terms and conditions set
-------
forth in this Section 6. In addition, the Committee may impose on any Award or
the exercise thereof, at the date of grant or thereafter (subject to Section
8(a)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms
requiring forfeiture of Awards in the event of termination of employment by the
Participant; provided, however, that the Committee shall retain full power to
-------- -------
accelerate waive any such additional term or condition as it may have previously
imposed. All Awards shall be evidenced by an Award Agreement.
(b) Options. The Committee may grant Options to Participants on the
-------
following terms and conditions:
(i) Exercise Price. The exercise price of each Option shall be
--------------
determined by the Committee at the time the Option is granted,
but (except as provided in Section 7(a)) the exercise price of
any Option shall not be less than the Fair Market Value of the
shares covered thereby at the time the Option is granted.
(ii) Time and Method of Exercise. The Committee shall determine the
---------------------------
time or times at which an Option may be exercised in whole or
in part, whether the exercise price shall be paid in cash or
by the surrender at Fair Market Value of Stock, or by any
combination of cash and shares of Stock, including, without
limitation, cash, Stock, other Awards, or other property
(including notes or other contractual obligations of
Participants to make payment on a deferred basis, such as
through "cashless exercise" arrangements, to the extent
permitted by applicable law), and the methods by which Stock
will be delivered or deemed to be delivered to Participants.
(iii) Incentive Stock Options. The terms of any Option granted under
-----------------------
the Plan as an ISO shall comply in all respects with the
provisions of Section 422 of the Code, including, but not
limited to, the requirement that no ISO shall be granted more
than ten years after the effective date of the Plan.
(c) Performance Units. The Committee is authorized to grant Performance
-----------------
Units to Participants on the following terms and conditions:
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<PAGE>
(i) Performance Criteria and Period. At the time it makes an award
-------------------------------
of Performance Units, the Committee shall establish both the
performance goal or goals and the performance period or periods
applicable to the Performance Units so awarded. A performance
goal shall be a goal, expressed in terms of growth in book value,
earnings per share, return on equity or any other financial or
other measurement deemed appropriate by the Committee, or may
relate to the results of operations or other measurable progress
of either the Company as a whole or the Participant's Subsidiary,
division or department. The performance period will be the
period of time over which one or more of the performance goals
must be achieved, which may be of such length as the Committee,
in its discretion, shall select. Neither the performance goals
nor the performance periods need be identical for all Performance
Units awarded at any time or from time to time. The Committee
shall have the authority, in its discretion, to accelerate the
time at which any performance period will expire or waive or
modify the performance goals of any Participant or Participants.
The Committee may also make such adjustments, to the extent it
deems appropriate, to the performance goals for any Performance
Units awarded to compensate for, or to reflect, any material
changes which may have occurred in accounting practices, tax
laws, other laws or regulations, the financial structure of the
Company, acquisitions or dispositions of business or Subsidiaries
or any unusual circumstances outside of management's control
which, in the sole judgment of the Committee, alters or affects
the computation of such performance goals or the performance of
the Company or any relevant Subsidiary, division or department.
(ii) Value of Performance Units. The value of each Performance Unit
--------------------------
at any time shall equal the book value per share of the Stock, as
such value appears on the consolidated balance sheet of the
Company as of the end of the fiscal quarter immediately preceding
the date of valuation.
(d) Restricted Stock. The Committee is authorized to grant Restricted
----------------
Stock to Participants on the following terms and conditions:
(i) Restricted Period. Restricted Stock awarded to a Participant
-----------------
shall be subject to such restrictions on transferability and
other restrictions for such periods as shall be established by
the Committee, in its discretion, at the time of such Award,
which restrictions may lapse separately or in combination at such
times, under such circumstances, or otherwise, as the Committee
may determine.
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<PAGE>
(ii) Forfeiture. Restricted Stock shall be forfeitable to the
----------
Company upon termination of employment during the applicable
restricted periods. The Committee, in its discretion, whether in
an Award Agreement or anytime after an Award is made, may
accelerate the time at which restrictions or forfeiture
conditions will lapse or remove any such restrictions, including
upon death, disability or retirement, whenever the Committee
determines that such action is in the best interests of the
Company.
(iii) Certificates for Stock. Restricted Stock granted under the
----------------------
Plan may be evidenced in such manner as the Committee shall
determine. If certificates representing Restricted Stock are
registered in the name of the Participant, such certificates may
bear an appropriate legend referring to the terms, conditions
and restrictions applicable to such Restricted Stock.
(iv) Rights as a Shareholder. Subject to the terms and conditions of
-----------------------
the Award Agreement, the Participant shall have all the rights
of a shareholder with respect to shares of Restricted Stock
awarded to him or her, including, without limitation, the right
to vote such shares and the right to receive all dividends or
other distributions made with respect to such shares. If any
such dividends or distributions are paid in Stock, the Stock
shall be subject to restrictions and a risk of forfeiture to the
same extent as the Restricted Stock with respect to which the
Stock has been distributed.
(e) Stock Appreciation Rights. The Committee is authorized to grant SARs
-------------------------
to Participants on the following terms and conditions:
(i) Right to Payment. An SAR shall confer on the Participant to whom
----------------
it is granted a right to receive, upon exercise thereof, the
excess of (x) the Fair Market Value of one share of Stock on the
date of exercise over (y) the grant price of the SAR as
determined by the Committee as of the date of grant of the SAR,
which grant price (except as provided in Section 7(a)) shall not
be less than the Fair Market Value of one share of Stock on the
date of grant.
(ii) Other Terms. The Committee shall determine the time or times at
-----------
which an SAR may be exercised in whole or in part, the method of
exercise, method of settlement, form of consideration payable in
settlement, method by which Stock will be delivered or deemed to
be delivered to Participants, whether or not an SAR shall be in
tandem with any other Award, and any other terms and conditions
of any SAR. Limited SARs may be granted on such terms, not
inconsistent with this Section 6(e), as the Committee may
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determine. Limited SARs may be either freestanding or in tandem
with other Awards.
(f) Bonus Stock and Awards in Lieu of Cash Obligations. The Committee is
--------------------------------------------------
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of Company or Subsidiary obligations to pay cash or deliver other property under
other plans or compensatory arrangements; provided that, in the case of
--------
Participants subject to Section 16 of the Exchange Act, such cash amounts are
determined under such other plans in a manner that complies with applicable
requirements of Rule 16b-3 under the Exchange Act so that the acquisition of
Stock or Awards hereunder shall be exempt from Section 16(b) liability. Stock
or Awards granted hereunder shall be subject to such other terms as shall be
determined by the Committee.
(g) Other Stock-Based Awards. The Committee is authorized, subject to
------------------------
limitations under applicable law, to grant to Participants such other Stock-
Based Awards in addition to those provided in Sections 6(b), (d) and (e) hereof,
as deemed by the Committee to be consistent with the purposes of the Plan. The
Committee shall determine the terms and conditions of such Awards. Stock
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 6(g) shall be purchased for such consideration and paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
Stock, other Awards, or other property, as the Committee shall determine.
(h) Cash Payments. The Committee is authorized, subject to limitations
-------------
under applicable law, to grant to Participants cash payments, whether awarded
separately or as a supplement to any Stock-Based Award. The Committee shall
determine the terms and conditions of such Awards.
(i) Dividends and Dividend Equivalents. An Award (including without
----------------------------------
limitation an Option or SAR Award) may provide the Participant with the right to
receive dividend payments or dividend equivalent payments with respect to Stock
subject to the Award (both before and after the Stock subject to the Award is
earned, vested, or acquired), which payments may be either made currently or
credited to an account for the Participant, and may be settled in cash or Stock
as determined by the Committee. Any such settlements, and any such crediting of
dividends or dividend equivalents or reinvestment in shares of Stock, may be
subject to such conditions, restrictions and contingencies as the Committee
shall establish, including the reinvestment of such credited amounts in Stock
equivalents.
SECTION 7. Additional Provisions Applicable to Awards
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
------------------------------------------------------
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution for, any other Award
granted under the Plan or any award granted under any other plan of the Company
or any Subsidiary, or any business entity acquired by the Company or any
Subsidiary, or any other right of a
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Participant to receive payment from the Company or any Subsidiary. If an Award
is granted in substitution for another Award or award, the Committee shall
require the surrender of such other Award or award in consideration for the
grant of the new Award. Awards granted in addition to, or in tandem with other
Awards or awards may be granted either as of the same time as, or a different
time from, the grant of such other Awards or awards. The per share exercise
price of any Option, grant price of any SAR, or purchase price of any other
Award conferring a right to purchase Stock: (i)granted in substitution for an
outstanding Award or award, shall be not less than the lesser of (x) the Fair
Market Value of a share of Stock at the date such substitute Award is granted or
(y) such Fair Market Value at that date, reduced to reflect the Fair Market
Value at that date of the Award or award required to be surrendered by the
Participant as a condition to receipt of the substitute Award; or (ii)
retroactively granted in tandem with an outstanding Award or award, shall not be
less than the lesser of the Fair Market Value of a share of Stock at the date of
grant of the later Award or at the date of grant of the earlier Award or award.
(b) Exchange and Buy Out Provisions. The Committee may at any time offer
-------------------------------
to exchange or buy out any previously granted Award for a payment in cash,
Stock, other Awards (subject to Section 7(a)), or other property based on such
terms and conditions as the Committee shall determine and communicate to a
Participant at the time that such offer is made.
(c) Performance Conditions. The right of a Participant to exercise or
----------------------
receive a grant or settlement of any Award, and the timing thereof, may be
subject to such performance conditions as may be specified by the Committee.
(d) Term of Awards. The term of each Award shall, except as provided
--------------
herein, be for such period as may be determined by the Committee; provided,
--------
however, that in no event shall the term of any ISO, or any SAR granted in
- -------
tandem therewith, exceed a period of ten years from the date of its grant (or
such shorter period as may be applicable under Section 422 of the Code).
(e) Form of Payment. Subject to the terms of the Plan and any applicable
---------------
Award Agreement, payments or transfers to be made by the Company or a Subsidiary
upon the grant or exercise of an Award may be made in such forms as the
Committee shall determine, including, without limitation, cash, Stock, other
Awards, or other property (and may be made in a single payment or transfer, in
installments, or on a deferred basis), in each case determined in accordance
with rules adopted by, and at the discretion of, the Committee. (Such payments
may include, without limitation, provisions for the payment or crediting of
reasonable interest on installments or deferred payments.) The Committee, in
its discretion, may accelerate any payment or transfer upon a change in control
as defined by the Committee. The Committee may also authorize payment upon the
exercise of an Option by net issuance or other cashless exercise methods.
(f) Awards to Comply with Section 162(m). The Committee may (but is not
------------------------------------
required to) grant an Award pursuant to the Plan to any key employee which is
intended
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to qualify as "performance-based compensation" under Section 162(m) of
the Code (a "Performance-Based Award"). The right to receive a Performance-
Based Award, other than Options and SARs granted at not less than Fair Market
Value, shall be conditional upon the achievement of performance goals
established by the Committee in writing at the time such Performance-Based Award
is granted. Such performance goals, which may vary from Participant to
Participant and Performance-Based Award to Performance-Based Award, shall be
based upon the attainment by the Company or any Subsidiary, division or
department of specific amounts of, or increases in, one or more of the
following, any of which may be measured either in absolute terms or as compared
to another company or companies: revenues, earnings, cash flow, net worth, book
value, shareholders' equity, financial return ratios, market performance or
total shareholder return, and/or the completion of certain business or capital
transactions. Before any compensation pursuant to a Performance-Based Award is
paid, the Committee shall certify in writing that the performance goals
applicable to the Performance-Based Award were in fact satisfied.
The maximum amount which may be granted as Performance-Based Awards to
any Participant in any calendar year shall not exceed (i) Stock-Based Awards for
2,000,000 shares of Stock (whether payable in cash or Stock), subject to
adjustment as provided in Section 8(a) hereof, (ii) 1,000,000 Performance Units,
and (iii) cash payments of $1,000,000.
(g) Change of Control. In the event of a Change of Control of the
-----------------
Company, all Awards granted under the Plan (including Performance-Based Awards)
that are still outstanding and not yet vested or exercisable or which are
subject to restrictions, subject to such additional conditions (whether
occurring at the time of such Change in Control or thereafter) as the Committee
shall determine and as shall be set forth in the Award Agreement with the
Participant, may become immediately 100% vested in each Participant or may be
free of any restrictions, as of the first date that the definition of Change of
Control has been fulfilled, and shall be exercisable for such period (but not in
excess of the remaining duration of the Award) as is provided in such Award
Agreement.
SECTION 8.Adjustments upon Changes in Capitalization; Acceleration in Certain
Events
(a) In the event that the Committee shall determine that any stock
dividend, recapitalization, forward split or reverse split, reorganization,
merger, consolidation, spin-off, combination, repurchase or share exchange, or
other similar corporate transaction or event, affects the Stock or the book
value of the Company such that an adjustment is appropriate in order to prevent
dilution or enlargement of the rights of Participants under the Plan, then the
Committee shall, in such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Stock which may thereafter be issued in
connection with Awards; (ii) the number and kind of shares of Stock issuable in
respect of outstanding Awards; (iii) the aggregate number and kind of shares of
Stock available under the Plan; (iv) the number of Performance Units which may
thereafter be granted and the book value of the Company with respect to
outstanding
A-11
<PAGE>
Performance Units; and (v) the exercise price, grant price, or purchase price
relating to any Award or, if deemed appropriate, make provision for a cash
payment with respect to any outstanding Award; provided, however, in each case,
-------- -------
that no adjustment shall be made which would cause the Plan to violate Section
422(b)(1) of the Code with respect to ISOs or would adversely affect the status
of a Performance-Based Award as "performance-based compensation" under Section
162(m) of the Code.
(b) In addition, the Committee is authorized to make adjustments in the
terms and conditions of, and the criteria included in, Awards in recognition of
unusual or nonrecurring events (including, without limitation, events described
in the preceding paragraph) affecting the Company or any Subsidiary, or in
response to changes in applicable laws, regulations, or accounting principles.
Notwithstanding the foregoing, no adjustment shall be made in any outstanding
Performance-Based Awards to the extent that such adjustment would adversely
affect the status of that Performance-Based Award as "performance-based
compensation" under Section 162(m) of the Code.
SECTION 9. General Provisions
(a) Changes to the Plan and Awards. The Board of Directors of the Company
------------------------------
may amend, alter, suspend, discontinue, or terminate the Plan or the Committee's
authority to grant Awards under the Plan without the consent of the Company's
shareholders or Participants, except that any such amendment, alteration,
suspension, discontinuation, or termination shall be subject to the approval of
the Company's shareholders within one year after such Board action if such
shareholder approval is required by any federal or state law or regulation or
the rules of any stock exchange or automated quotation system on which the Stock
may then be listed or quoted, and the Board may otherwise, in its discretion,
determine to submit other such changes to the Plan to the shareholders for
approval; provided, however, that without the consent of an affected
-------- -------
Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially and adversely affect the rights of such
Participant under any Award theretofore granted and any Award Agreement relating
thereto. The Committee may waive any conditions or rights under, or amend,
alter, suspend, discontinue, or terminate, any Award theretofore granted and any
Award Agreement relating thereto; provided, however, that without the consent of
-------- -------
an affected Participant, no such amendment, alteration, suspension,
discontinuation, or termination of any Award may materially and adversely affect
the rights of such Participant under such Award.
The foregoing notwithstanding, any performance condition specified in
connection with an Award shall not be deemed a fixed contractual term, but shall
remain subject to adjustment by the Committee, in its discretion at any time in
view of the Committee's assessment of the Company's strategy, performance of
comparable companies, and other circumstances, except to the extent that any
such adjustment to a performance condition would adversely affect the status of
a Performance-Based Award as "performance-based compensation" under Section
162(m) of the Code.
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<PAGE>
(b) No Right to Award or Employment. No Participant or other person shall
-------------------------------
have any claim or right to receive an Award under the Plan. Neither the Plan
nor any action taken hereunder shall be construed as giving any employee any
right to be retained in the employ of the Company or any Subsidiary.
(c) Taxes. The Company or any Subsidiary is authorized to withhold from
-----
any Award granted, any payment relating to an Award under the Plan, including
from a distribution of Stock or any payroll or other payment to a Participant
amounts of withholding and other taxes due in connection with any transaction
involving an Award, and to take such other action as the Committee may deem
advisable to enable the Company and Participants to satisfy obligations for the
payment of withholding taxes and other tax obligations relating to any Award.
This authority shall include authority to withhold or receive Stock or other
property and to make cash payments in respect thereof in satisfaction of a
Participant's tax obligations.
(d) Limits on Transferability; Beneficiaries. No Award or other right or
----------------------------------------
interest of a Participant under the Plan shall be pledged, encumbered, or
hypothecated to, or in favor of, or subject to any lien, obligation, or
liability of such Participants to, any party, other than the Company or any
Subsidiary, or assigned or transferred by such Participant otherwise than by
will or the laws of descent and distribution, and such Awards and rights shall
be exercisable during the lifetime of the Participant only by the Participant or
his or her guardian or legal representative. Notwithstanding the foregoing, the
Committee may, in its discretion, provide that Awards or other rights or
interests of a Participant granted pursuant to the Plan (other than an ISO) be
transferable, without consideration, to such persons as may be permitted by the
Committee. The Committee may attach to such transferability feature such terms
and conditions as it deems advisable. In addition, a Participant may, in the
manner established by the Committee, designate a beneficiary (which may be a
person or a trust) to exercise the rights of the Participant, and to receive any
distribution, with respect to any Award upon the death of the Participant. A
beneficiary, guardian, legal representative or other person claiming any rights
under the Plan from or through any Participant shall be subject to all terms and
conditions of the Plan and any Award Agreement applicable to such Participant,
except as otherwise determined by the Committee, and to any additional
restrictions deemed necessary or appropriate by the Committee.
(e) No Rights to Awards; No Shareholder Rights. No Participant shall have
------------------------------------------
any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of treatment of Participants. No Award shall confer on any
Participant any of the rights of a shareholder of the Company unless and until
Stock is duly issued or transferred to the Participant in accordance with the
terms of the Award.
(f) Discretion. In exercising, or declining to exercise, any grant of
----------
authority or discretion hereunder, the Committee may consider or ignore such
factors or circumstances and may accord such weight to such factors and
circumstances as the Committee alone and in its sole judgment deems appropriate
and without regard to the affect such exercise, or declining to exercise such
grant of authority or discretion, would
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<PAGE>
have upon the affected Participant, any other Participant, any employee, the
Company, any Subsidiary, any shareholder or any other person.
(g) Effective Date; Shareholder Approval. Subject to the approval of the
------------------------------------
shareholders of the Company at the Company's 2000 annual meeting of its
shareholders, the Plan shall be effective as of March 15, 2000; provided,
--------
however, that to the extent that Awards are granted under the Plan prior to its
- -------
approval by shareholders, the Awards shall be contingent on approval of the Plan
by the shareholders of the Company at such annual meeting.
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<PAGE>
FORM OF PROXY CARD Please mark your
votes as in this
example [ ]
FOR all nominees WITHHOLD AUTHORITY
listed at right to vote for all
(except as marked) nominees listed at right
Nominees:
1. The election of five (5) [ ] [ ] Carl J. Grivner
Directors of the Company. Michael E. Heisley, Sr.
Stanley H. Meadows
Andrew G. C. Sage, II
[new director]
(INSTRUCTION: To withhold authority to vote
for any individual nominee, strike a line
through the nominee's name in the list to
the right)
FOR AGAINST ABSTAIN
2. Approve the Company's 2000 Long-term Stock
Incentive Plan.
[ ] [ ] [ ]
3. Approve a change in the name of the Company
to [new name].
[ ] [ ] [ ]
4. Approve the increase in the number of
authorized shares of the Company from [ ] [ ] [ ]
65,000,000 shares to 200,000,000 shares.
5. Ratify the appointment of Arthur Andersen LLP
as the Company's independent auditors.
[ ] [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting. This proxy, when properly executed,
will be voted in the manner directed herein by the undersigned stockholder.
If no direction is made, this proxy will be voted FOR Proposals 1, 2, 3, 4 and
5.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
Your signature on this proxy is your acknowledgment of receipt of the Notice of
Meeting and Proxy Statement, both dated April 17, 2000.
SIGNATURE(S): __________________________ Date: ___________
(Signature)
SIGNATURE(S): __________________________ Date: ___________
(Signature if held jointly)
NOTE: Please sign exactly as name appears above. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give title as such. If stockholder is a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.
<PAGE>
WORLDPORT COMMUNICATIONS, INC.
1825 Barrett Lakes Blvd., Suite 100, Kennesaw, Georgia 30144
This Proxy is solicited on behalf of the Board of Directors
The undersigned stockholder(s) of WorldPort Communications, Inc., a corporation
under the laws of the State of Delaware, hereby appoints Carl J. Grivner and
John T. Hanson, as my (our) proxies, each with the power to appoint a
substitute, and hereby authorizes them, and each of them individually, to
represent and to vote, as designated on the reverse, all of the shares of
WorldPort Communications, Inc., which the undersigned is or may be entitled to
vote at the Annual Meeting of Stockholders to be held at the Hyatt Hotel located
at 1750 Lake Cook Rd, Northbrook, Illinois at 1:00 p.m. central time, on
Monday, May 15, 2000, or any adjournment thereof. The Board of Directors
recommends a vote FOR the proposals on the reverse side.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
