INTERMEDIA COMMUNICATIONS INC, DEF 14A, 1999-04-16

INTERMEDIA COMMUNICATIONS INC
DEF 14A, 1999-04-16
TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE)

Previous: SYNAPTIC PHARMACEUTICAL CORP, 8-K, 1999-04-16

Next: BROADWAY & SEYMOUR INC, 8-A12G, 1999-04-16

<PAGE>

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

Filed by the Registrant [_]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[_] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

Intermedia Communications
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Intermedia Communications
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[_] 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:

-------------------------------------------------------------------------

(4) Date Filed:

-------------------------------------------------------------------------

Notes:

<PAGE>

INTERMEDIA
COMMUNICATIONS

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 20, 1999

To the Stockholders of Intermedia Communications Inc.:

Notice is Hereby Given that the Annual Meeting of Stockholders of
Intermedia Communications Inc. (the "Company") will be held at the Radisson
Hotel, 10221 Princess Palm Avenue, Tampa, Florida 33610, on Thursday, May 20,
1999, at 10:30 a.m. Eastern Daylight Savings Time, for the purposes set forth
below:

(1) To elect two directors, each for a term expiring in 2002 or when his
successor has been duly elected and qualified;

(2) To increase the number of shares of Common Stock authorized for
issuance under the Company's 1996 Long-Term Incentive Plan from
9,000,000 to 10,000,000 shares;

(3) To ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year ending December 31, 1999;
and

(4) To transact such other business as may properly come before the
meeting or any adjournments thereof.

The Board of Directors has fixed the close of business on Tuesday, April 1,
1999, as the record date for the determination of stockholders entitled to
notice of, and to vote at, the annual meeting or any adjournments thereof.

MANAGEMENT REQUESTS ALL STOCKHOLDERS TO SIGN AND DATE THE ENCLOSED FORM OF
PROXY AND RETURN IT IN THE POSTAGE PAID, SELF-ADDRESSED ENVELOPE PROVIDED FOR
YOUR CONVENIENCE. PLEASE DO THIS WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
SHOULD YOU ATTEND IN PERSON, YOU MAY, IF YOU WISH, WITHDRAW YOUR PROXY AND VOTE
YOUR SHARES IN PERSON.

By Order of the Board of Directors

Robert M. Manning
Secretary

April 13, 1999
<PAGE>

INTERMEDIA COMMUNICATIONS INC.

PROXY STATEMENT

DATED APRIL 13, 1999

ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD THURSDAY, MAY 20, 1999

The enclosed form of Proxy is solicited by the Board of Directors (the
"Board") of Intermedia Communications Inc. (the "Company") in connection with
the Annual Meeting of Stockholders of the Company to be held at the Radisson
Hotel, 10221 Princess Palm Avenue, Tampa, Florida 33610, on Thursday, May 20,
1999, at 10:30 a.m. Eastern Daylight Savings Time, and at any and all
adjournments thereof (the "Annual Meeting"). The cost of solicitation, including
the cost of preparing and mailing the Notice of Annual Meeting of Stockholders
and this Proxy Statement, is being paid by the Company. In addition, the
Company may reimburse brokers and other persons holding stock in the name of
nominees for their expenses incurred in sending proxy materials to their
principals and obtaining their proxies.

Stockholders of record as of the close of business on April 1, 1999 (the
"Record Date"), are the only persons entitled to vote at the Annual Meeting. As
of that date, there were issued and outstanding 49,544,004 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), the only
securities outstanding of the Company entitled to vote at the Annual Meeting.
Each share of Common Stock outstanding entitles the holder thereof to one vote.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting will
constitute a quorum. Abstentions and broker non-votes (i.e. shares of Common
Stock represented at the Annual Meeting by proxies held by brokers or nominees
as to which (i) instructions have not been received from the beneficial owners
or persons entitled to vote and (ii) the broker or nominee does not have
discretionary voting power on a particular voting matter) with respect to any
proposal are counted as shares represented and voted at the Annual Meeting only
for the purpose of determining the number of shares required to approve a
proposal. However, shares of Common Stock represented by proxies that withhold
authority to vote for a nominee for election as a director (including broker
non-votes) will not be counted as a vote represented at the Annual Meeting for
the purpose of determining the number of votes required to elect such nominee.

Any stockholder giving a proxy will have the right to revoke it at any time
prior to its exercise by giving written notice of revocation to the Company,
Attention: Secretary, by filing a new written appointment of a proxy with an
officer of the Company or by voting in person at the Annual Meeting. Attendance
at the Annual Meeting will not automatically revoke the proxy. All shares
represented by effective proxies will be voted at the Annual Meeting. UNLESS
OTHERWISE SPECIFIED IN THE PROXY (AND EXCEPT FOR BROKER NON-VOTES AS DESCRIBED
ABOVE), SHARES REPRESENTED BY EFFECTIVE PROXIES WILL BE VOTED (I) FOR THE
ELECTION OF GEORGE F. KNAPP AND PIERCE J. ROBERTS AS CLASS I DIRECTORS, (II) FOR
THE PROPOSAL TO INCREASE THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE UNDER
PURSUANT TO AWARDS GRANTED UNDER THE COMPANY'S 1996 LONG-TERM INCENTIVE PLAN,
(III) FOR THE RATIFICATION OF ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999, AND (IV) IN THE
DISCRETION OF THE PROXY HOLDERS WITH RESPECT TO SUCH OTHER MATTERS AS MAY COME
BEFORE THE ANNUAL MEETING.

The Company's principal executive offices are located at 3625 Queen Palm
Drive, Tampa, Florida 33619. This Proxy Statement and accompanying form of Proxy
will be first mailed to stockholders on or about April 13, 1999. The Annual
Report of the Company for the fiscal year ended December 31, 1998, accompanies
this Proxy Statement but is not part of the proxy soliciting materials.
<PAGE>

PROPOSAL ONE:

ELECTION OF DIRECTORS

The number of directors is currently set at five. The directors are divided
into three classes: Class I, Class II and Class III. The members of each class
are elected to serve a three-year term with the terms of office of the Class I,
Class II, and Class III directors expiring at the Annual Meeting of Stockholders
to be held in1999, 2000, and 2001, respectively, or at such time as each
director's successor has been duly elected and qualified. The Board has
nominated George F. Knapp and Pierce J. Roberts as Class I directors for
election to the Board at the Annual Meeting for a term expiring at the Annual
Meeting of Stockholders in 2002, or at such time as his successor has been duly
elected and qualified.

THE BOARD RECOMMENDS A VOTE FOR MR. KNAPP. IT IS INTENDED THAT PROXIES THAT
DO NOT WITHHOLD THE AUTHORITY TO VOTE FOR THE NOMINEE WILL BE VOTED FOR THE
ELECTION OF MR. KNAPP AS A CLASS I DIRECTOR. The affirmative vote of a plurality
of the shares of Common Stock represented and entitled to vote at the Annual
Meeting is necessary to elect the nominee. If the nominee should become unable
or unwilling for any reason before the Annual Meeting to serve as a director,
the proxies will be voted for such substitute nominee as may be nominated by the
current Board. The Board has no reason to expect that Mr. Knapp will not be a
candidate for director at the Annual Meeting.

THE BOARD RECOMMENDS A VOTE FOR MR. ROBERTS. IT IS INTENDED THAT PROXIES
THAT DO NOT WITHHOLD THE AUTHORITY TO VOTE FOR THE NOMINEE WILL BE VOTED FOR THE
ELECTION OF MR. ROBERTS AS A CLASS I DIRECTOR. The affirmative vote of a
plurality of the shares of Common Stock represented and entitled to vote at the
Annual Meeting is necessary to elect the nominee. If the nominee should become
unable or unwilling for any reason before the Annual Meeting to serve as a
director, the proxies will be voted for such substitute nominee as may be
nominated by the current Board. The Board has no reason to expect that Mr.
Roberts will not be a candidate for director at the Annual Meeting.

The table below gives certain information concerning the nominees and the
other directors:

<TABLE>
<CAPTION>
YEAR FIRST
ELECTED/
NOMINATED CLASS, NOMINEE OR
NAME AGE DIRECTOR CONTINUING DIRECTOR AND TERM
- ---- ----------- ---------- ----------------------------
<S> <C> <C> <C>
David C. Ruberg 53 1993 Class II Director with term
expiring in 2000
John C. Baker 48 1988 Class III Director with
term expiring in 2001
George F. Knapp 66 1988 Class I Director nominee for
term expiring in 2002
Philip A. Campbell 61 1996 Class II Director with term
expiring in 2000
Pierce Jackson Roberts, Jr. 52 1998 Class I Director nominee for
term expiring in 2002
</TABLE>

DAVID C. RUBERG has served as President, Chief Executive Officer and a
director of the Company since May 1993, and as Chairman of the Board since March
1994. From September 1991 to May 1993, Mr. Ruberg was an independent consultant
to the computer and telecommunications industries. From 1989 to September 1991,
Mr. Ruberg served as Vice President and General Manager of the
Telecommunications Division and then of the Personal Computer/Systems
Integration Division of Data General Corporation, a computer manufacturer. From
1984 to 1989, Mr. Ruberg served as a Vice President of TIE Communications, Inc.,
a manufacturer of telecommunications equipment.

JOHN C. BAKER has been a director of the Company since February 1988. Mr.
Baker has been a principal of Baker Capital Corp., a multi-national venture
capital firm, since October 1995. He was a Senior Vice President of Patricof &
Co. Ventures, Inc., a multi-national venture capital firm from 1988 until
September 1995. Mr. Baker is currently a director of FORE Systems, Inc., FWT,
Inc. and Resources Bancshares Mortgage Group, Inc., all of which are publicly
traded corporations.

1
<PAGE>

PHILIP A. CAMPBELL has been a director of the Company since September 1996.
Mr. Campbell retired from Bell Atlantic as director, vice chairman and chief
financial officer in 1991. Previously, he was president of New Jersey Bell,
Indiana Bell and Bell Atlantic Network Services.

GEORGE F. KNAPP has been a director of the Company since February 1988. He
has been a principal of Communications Investment Group, an investment banking
firm, since June 1990. From January 1988 until June 1989, Mr. Knapp was an
associate at MBW Management, Inc., a venture capital firm. Prior to that time,
he held various executive positions at ITT Corporation and its subsidiaries,
most recently as Corporate Vice President of ITT Corporation. Mr. Knapp is
currently a member of the Manhattan College Board of Trustees and Chairman of
its Finance Committee.

PIERCE JACKSON ROBERTS, JR. has been a director of the Company since
December 1998. From April 1993 to August 1998, Mr. Roberts held various
positions at Bear, Stearns & Co. Inc. and most recently was a Senior Managing
Director and head of its global telecommunications practice. From December 1990
to April 1993, Mr. Roberts was a Managing Director at The Blackstone Group.
Prior to that, Mr. Roberts held various positions at BellSouth. Mr. Roberts is
also a certified public accountant.

MEETINGS AND COMMITTEES OF THE BOARD

During 1998, the Board held seven meetings and took several actions by
unanimous written consent. All of the directors were in attendance at more than
75% of the meetings of the Board as well as all meetings of each committee of
the Board on which they served. The Board has an Audit Committee and a
Compensation and Stock Option Committee (the "Compensation Committee"); the
Board does not have a nominating committee.

The Audit Committee reviews and reports to the Board with respect to
various auditing and accounting matters, including the recommendation to the
Board as to the selection of the Company's independent auditors, the scope of
the annual audit procedures, general accounting policy matters and the
performance of the Company's independent auditors. The Audit Committee is
currently comprised of Messrs. Knapp and Campbell. During 1998, the Audit
Committee held four meetings.

The Compensation Committee reviews and approves executive compensation
policies and practices, reviews salaries and bonuses for certain officers of the
Company, administers the Company's 1992 Stock Option Plan, the Long-Term
Incentive Plan, and considers other matters referred to it by the Board. The
Compensation Committee is comprised of Messrs. Baker and Knapp. During 1998, the
Compensation Committee held sixteen meetings.

COMPENSATION OF DIRECTORS

Each year, directors who are not employees of the Company receive options
to purchase Common Stock pursuant to the Company's 1996 Long-Term Incentive Plan
(the "Long-Term Incentive Plan"). Each member of the Board who is not, on the
date on which any option is to be granted to such member, an employee will be
granted options in accordance with the formula specified within the Long-Term
Incentive Plan. Options granted pursuant to the formula expire and cease to be
of any force or effect on the earlier of the fifth anniversary of the date any
such option was granted or the first anniversary of the date on which an
optionee ceases to be a member of the Board. The directors who are not employees
of the Company were granted the following options in 1998: in May 1998, Messrs.
Knapp and Baker were granted options to purchase 2,000 shares of Common Stock at
an exercise price of $37.875 per share, in September 1998, Mr. Campbell was
granted an option to purchase 2,000 shares of Common Stock at an exercise price
of $22.75 per share, and in December 1998, Mr. Roberts was granted options to
purchase 2,000 and 20,000 shares of Common Stock at an exercise price of 14.5625
per share, in each case the fair market value per share of the Common Stock on
the grant date.

Each director who is not also an employee of the Company receives a $12,000
annual retainer, $1,000 for each meeting (or $500 for each telephonic conference
meeting) of the Board attended and $1,000 for each committee meeting (or $500
for each telephonic conference meeting) attended. All directors are reimbursed
for actual out-of-pocket expenses incurred by them in connection with their
attending meetings of the Board.

2
<PAGE>

EXECUTIVE OFFICERS

The names of the current executive officers of the Company together with
certain biographical information for each of them is set forth below:

<TABLE>
<CAPTION>
NAME AGE POSITION
- --- --- --------
<S> <C> <C>
David C. Ruberg 53 Chairman of the Board, President and Chief Executive Officer
Alfred G. Binford 38 Senior Vice President, Customer Service Delivery & Operations
Richard J. Buyens 42 Senior Vice President, Sales
Trevor Dignall 51 Senior Vice President, Human Resources
James F. Geiger 40 Senior Vice President, Chief Marketing Officer
Patricia A. Kurlin 44 Senior Vice President, General Counsel
Robert M. Manning 39 Senior Vice President, Chief Financial Officer
Richard Marchant 42 Senior Vice President, Engineering
</TABLE>

ALFRED G. BINFORD has served as Senior Vice President, Customer Service
Delivery & Operations of the Company since March of 1999. From February 1995 to
March 1999, Mr. Binford was President and CEO of Bell Atlantic Communications, a
wholly owned subsidiary of Bell Atlantic. Mr. Binford held the position of Vice
President Corporate Marketing at Bell Atlantic from 1994 to February 1995.
Prior to joining Bell Atlantic, Mr. Binford held a variety of positions at AT&T
between 1983 and 1994. Mr. Binford holds a BS in Business Management and
Economics from State University of New York and an MBA in Marketing from
Fairleigh Dickerson University.

RICHARD J. BUYENS has served as Senior Vice President, Sales of the Company
since January 1999. Prior to joining the Company, Mr. Buyens worked for AT&T for
18 years where he held a variety of positions including head of AT&T's Eastern
Region Sales organization and Chief Financial Officer for AT&T's Commercial
Markets. Mr. Buyens holds a B.S. in Marketing and an MBA in Finance from
Northern Illinois University.

TREVOR DIGNALL has served as Senior Vice President, Human Resources of the
Company since April 1998. From December 1996 to January 1998, Mr. Dignall served
as Senior Vice President of Human Resources & Administration for Cablevision
Systems Corporation in New York. From February 1995 to December 1996, Mr.
Dignall served as Vice President of Human Resources and Business Logistics for
Wickes Lumber. Prior to that, Mr. Dignall worked for Federal Express for 14
years where he held various human resource positions including Head of Human
Resources for the worldwide logistic division. Educated in the United Kingdom at
the University of Staffordshire, Mr. Dignall graduated with a degree in ceramic
technology and business studies.

JAMES F. GEIGER has served as Senior Vice President of the Company since
August 1995 and in August 1998 added the title of Chief Marketing Officer of the
Company. Mr. Geiger served as the Vice President of Alternate Channel Sales from
March 1995 through August 1995 and as the President of FiberNet USA, Inc.
("FiberNet"), a company acquired by Intermedia in 1995, since its inception. Mr.
Geiger was one of the founding principals of FiberNet, initially serving as Vice
President of Sales and Marketing and subsequently serving as President. From
April 1989 to April 1990, Mr. Geiger served as Director of Marketing for
Associated Communications, a cellular telephone company. Mr. Geiger received his
B.S. degree from Clarkson University in accounting.

3
<PAGE>

PATRICIA A. KURLIN has served as Senior Vice President, General Counsel of
the Company since December 1998 and served as Vice President, General Counsel
from June 1996 through December 1998. From September 1995 until June 1996, Ms.
Kurlin served as Corporate Counsel. Ms. Kurlin served as Director of
Governmental and Legal Affairs at the Company from September 1993 to September
1995. Ms. Kurlin was a Senior Telecommunications Attorney at the Florida Public
Service Commission from May 1990 to September 1993. Ms. Kurlin received her J.D.
from Florida State University and a B.S. degree from the University of South
Florida.

ROBERT M. MANNING has served as Senior Vice President, Chief Financial
Officer of the Company since September 1996. Mr. Manning joined the Company from
DMX Inc., a Los Angeles-based cable programmer, where he was Executive Vice
President, Senior Financial Executive and a director of DMX-Europe from October
1991 to September 1996. Prior to his tenure at DMX, Inc., Mr. Manning spent ten
years in the investment banking field in corporate finance and mergers and
acquisitions, most recently with Oppenheimer and Co., Inc. as Vice President,
Corporate Finance, managing their Entertainment/Leisure Time Group from October
1988 to October 1991. Mr. Manning is a graduate of Williams College.

RICHARD W. MARCHANT has served as Senior Vice President, Engineering of the
Company since March of 1999 and has served as Vice President, Engineering from
October 1998 through March 1999. Prior to joining the Company, Mr. Marchant
worked for British Telecom for 25 years where he was responsible for strategic
network planning including the introduction of international ISDN services, GSM
and new carrier services. He was a key member that formed Concert with MCI in
1993, and led Concert's engineering efforts in the US until October 1998. From
1988 to 1996, Mr. Marchant was Chairman of ITU committee WPII/1 and was
responsible for international standards for numbering, routing, and
interworking. Mr. Marchant holds a BA in Applied Math and Physics from Open
University, Milton Keynes, UK

No family relationship exists between any of the directors and executive
officers of the Company.

4
<PAGE>

EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Overview and Philosophy

The Compensation Committee is composed entirely of outside directors and is
responsible for developing and making recommendations to the Board with respect
to the Company's executive compensation policies and practices. In addition, the
Compensation Committee, pursuant to authority delegated by the Board, determines
on an annual basis the compensation to be paid to the Chairman of the Board and
Chief Executive Officer and each of the other officers of the Company.

The Company's executive compensation programs are designed to enhance the
value of the Company to stockholders and bondholders. This is accomplished
through policies and practices which facilitate the achievement of the Company's
performance objectives, provide compensation that will attract and retain the
superior talent required by the Company's aggressive goals, and align the
officers' interests with the interests of stockholders.

The executive compensation program provides an overall level of
compensation opportunity that is competitive within the telecommunications
industry, as well as with a broader group of companies of comparable size and
complexity. The Compensation Committee uses its discretion to set individual
executive compensation at levels warranted in its judgment by industry practice,
company performance, individual performance, and internal equity. It is the
Company's philosophy to target annual cash compensation in the average range and
total compensation in the third quartile as compared to industry practice.

Executive Compensation Program

The Company's executive compensation program is comprised of base salary,
annual cash incentive compensation, stock options, restricted stock awards and
various benefits (including medical insurance and a 401K plan) generally
available to all employees of the Company.

Base Salary

Base salary ranges for the Company's officers are set relative to companies
in the telecommunications industry and other similar companies. In determining
actual salaries, the Compensation Committee takes into account individual
responsibilities, experience, performance and specific issues particular to the
Company.

Consistent with past practice, at the direction of the Compensation
Committee, the Company's Human Resources department, with the assistance of an
outside consultant firm (collectively, the "HR Group"), evaluated the salary
range for each officer's position. The HR Group surveyed the compensation
practices of telecommunications companies with business lines comparable to
those of the Company and a broader sample of high growth, technology companies
with comparable current and projected revenues. The Compensation Committee
determined that individual officers' salaries should be targeted within a range
of 20% above and below the average salary for officers in comparable positions
within the industry, based on the experience and performance of the officer.
After reviewing the results of these surveys and the individual performance of
officers, the Compensation Committee recommended, and the Board approved, base
salary increases for the Company's officers in line with the aforementioned
guidelines.

Annual Bonus

To provide the Company's officers and other key employees with direct
financial incentives to achieve the Company's annual and long-range goals, the
Board currently maintains a performance based incentive compensation program for
officers and other key employees. Early in each fiscal year, the Compensation
Committee sets a target bonus for each officer. The Compensation Committee
approves several shared corporate objectives, individual objectives, and targets
for each objective for each officer. The achievement of these objectives
determines the officer's eligibility to receive the target bonus.

5
<PAGE>

In 1998, three equally weighted objectives were defined for every officer.
They were (1) achieve or exceed planned revenue growth; (2) achieve or exceed
planned EBITDA and (3) achieve or exceed planned "access line equivalent"
installations.

Based on 1998 actual results, the Compensation Committee determined to what
degree the corporate and individual objectives had been met. Although many
individual officers objectives were achieved at varying performance levels, the
corporate objectives were not and therefore only two officers received bonuses
for 1998.

Stock Option Program

The Company's 1992 Stock Option Plan and the Long-Term Incentive Plan
(collectively, the "Plans") seek to align the long-term interests of officers,
employees, directors, and consultants with the interests of stockholders. The
Plans are designed to create a strong and direct link between compensation and
stockholder return and to enable officers, employees, and directors to develop
and maintain a significant, long-term ownership position in the Company. The
Plans contribute to the Company's ability to attract and retain the best
available personnel. They also provide additional incentive to officers,
employees, directors and consultants to exert their maximum efforts toward the
success of the Company.

During 1998, the Board granted options to officers, employees, consultants,
and directors to purchase an aggregate of 3,030,810 shares of Common Stock, of
which options to purchase 285,000 shares were granted to officers. In
recommending option grants for officers, the Compensation Committee was guided
by the number of options required to attract and retain officers with the
talent, experience and skill required to help the Company achieve its goals and
to insure that the interests of these officers are aligned with those of the
stockholders. In granting options to existing officers, the Committee considered
the industry practices for similar positions, each officer's individual
performance, level of responsibility, contribution to the Company's performance
and the number of options previously granted to each officer.

Chief Executive Officer Compensation

Consistent with past practice, at the direction of the Compensation
Committee, the HR Group performed a detailed evaluation of Mr. Ruberg's
compensation. This evaluation analyzed compensation of chief executive officers
of telecommunications companies with business lines comparable to those of the
Company and high growth technology companies with comparable current and
projected revenues. After reviewing the results of this evaluation, the
performance of the Company under Mr. Ruberg's leadership, and the Company's
aggressive plans for growth, the Compensation Committee recommended, and the
Board approved, an increase of Mr. Ruberg's base salary to $450,000 , effective
January 1, 1999. This increase places Mr. Ruberg's salary at well below the
median level for comparable positions within the surveyed companies. Mr.
Ruberg's base salary for 1998 was $400,000 per annum.

Based on 1998 performance, the Compensation Committee recommended, and the
Board approved, that Mr. Ruberg not receive any incentive compensation bonus
for 1998.

The Compensation Committee believes that Mr. Ruberg's compensation package
is in line with industry and market size standards and appropriate in light of
his past performance and the Company's aggressive plans for growth.

John C. Baker
George F. Knapp

6
<PAGE>

EXECUTIVE COMPENSATION

The following table sets forth the cash and noncash compensation for each
of the last three years awarded to or earned by the Chief Executive Officer and
certain other executive officers.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION AWARDS
------------------- -------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL SALARY BONUS(1) COMPENSATION AWARDS OPTIONS COMPENSATION
POSITION YEAR ($) ($) ($) ($) (#) ($)
- -------- ---- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
David C. Ruberg 1998 400,000 275,000 (2) -- -- 9,273(4)
Chairman of the Board, 1997 310,000 580,000 (2) -- 400,000 4,750(4)
Chief Executive Officer, 1996 275,000 67,500 (2) 2,975,000(3) -- 4,875(4)
& President

Trevor Dignall(11) 1998 136,009 (2) -- 150,000 126,533(12)
Senior Vice President,
Human Resources

James F. Geiger 1998 225,000 143000 (2) 30,000 3,322(4)
Senior Vice President, 1997 175,000 97,000 (2) 780,000(5) 80,000(6) 3,521(4)
Chief Marketing Officer 1996 150,000 29,750 (2) -- 30,000 2,850(4)

Patricia A. Kurlin 1998 174,913 47,360 (2) -- 55,000 2,066(4)
Senior Vice President, 1997 126,667 23,000 (2) -- 10,000 414(4)
General Counsel 1996 88,750 29,000 (2) -- 30,000 --

Robert M. Manning 1998 240,000 220,000 (2) 50,000 2,252(4)
Senior Vice President, 1997 200,000 35,000 (2) 780,000(8) 210,000(9) 1,500(4)
Chief Financial 1996 65,000 -- (2) 1,076,250(10) 170,000 --
Officer(7)

Robert A. Rouse (13) 1998 260,000 254,000 (2) -- -- 10,138(4)
1997 220,000 79,000 (2) 1,300,000(14) 240,000(15) --
1996 43,542 -- (2) 577,500(16) 200,000 --
</TABLE>

(1) Bonus figures represent amounts paid during listed fiscal year for prior
fiscal year performance.

(2) The amount of perquisites and other personal benefits did not exceed the
lesser of $50,000 or 10% of the total annual salary and bonus reported
during 1998, 1997 or 1996.

(3) The dollar amount listed represents the closing market price on the date of
grant ($7.4375) multiplied by the number of shares awarded. On January 26,
1996, Mr. Ruberg was granted a contingent restricted stock award (an
"Award") under the Company's Long-Term Incentive Plan covering 400,000
shares of Common Stock (the "Restricted Shares"). During 1996, each of the
three distinct thresholds specified in the award were achieved, and the
shares were subsequently issued. On May 22, 1996, 133,334 Restricted Shares
were issued, which vest in equal increments of 2,222 shares per month over
the five-year period subsequent to May 22, 1996. On July 3, 1996, 133,334
Restricted Shares were issued, which vest in equal increments of 2,222
shares per month over the five-year period subsequent to July 3, 1996. On
September 13, 1996, 133,332 Restricted Shares were issued, which vest in
equal increments of 2,222 shares per month over the five-year period
subsequent to September 13, 1996. All Restricted Shares vest only if Mr.
Ruberg is

7
<PAGE>

still an employee of the Company on each vesting date. Dividends will be
payable on the Restricted Shares only to the extent that dividends are
payable on the shares of Common Stock. In December 1998, the Compensation
Committee reevaluated the restricted share agreements of Mr. Ruberg.
Beginning on January 1, 1999, the restricted stock awards to Mr. Ruberg
will vest in quarterly installments 45 days after the end of each fiscal
quarter over a 20 year period. There will be an acceleration in the vesting
upon the attainment of certain goals. The Restricted Shares also become
fully vested upon the occurrence of a change of control. As of December 31,
1998, the aggregate value of the Restricted Shares (including unvested
Restricted Shares) was $5,934,000.

(4) Consists of contributions made by the Company to Messrs. Ruberg's,
Geiger's, Manning's, Rouse's, and Ms. Kurlin's 401(k) plans.

(5) Mr. Dignall joined the Company in April 1998.

(6) Consists of reimbursement in the amount of $123,157.39 by the Company to
Mr. Dignall of his relocation expenses and contributions made by the
Company to Mr. Dignall's 401(k) plan.

(7) The dollar amount listed represents the closing market price on the date of
the grant ($13.000) multiplied by the number of shares awarded. On May 21,
1997 Mr. Geiger was granted a contingent restricted stock award (the
"Geiger Award") under the Long-Term Incentive Plan covering 60,000 shares
of Common Stock (the "Geiger Restricted Shares"). During 1997, the
threshold specified in the Geiger Award was achieved, and the shares were
subsequently issued. On August 26, 1997 60,000 Geiger Restricted Shares
were issued, which vest in equal increments of 1,000 shares per month over
the five year period subsequent to August 26, 1997. All Geiger Restricted
Shares vest only if Mr. Geiger is still an employee of the Company on each
vesting date. Dividends will be payable on the Geiger Restricted Shares
only to the extent that dividends are payable on the shares of Common
Stock. In December 1998, the Compensation Committee reevaluated the
restricted share agreements of Mr. Geiger. Beginning on January 1, 1999,
the restricted stock awards to Mr. Geiger will vest in quarterly
installments 45 days after the end of each fiscal quarter over a 20 year
period. There will be an acceleration in the vesting upon the attainment of
certain goals. The Geiger Restricted Shares also become fully vested upon
the occurrence of a change of control. As of December 31, 1998, the
aggregate value of the Geiger Restricted Shares (including unvested Geiger
Restricted Shares) was $948,750.

(8) Includes options to purchase 30,000 shares of Common Stock which had been
granted to Mr. Geiger in a prior year and which originally were exercisable
at an exercise price of $15.3437 per share. On May 21, 1997 the Company
repriced the exercise price for options to purchase 1,187,900 shares,
including these options, at $12.9375 per share, which was the market price
of the Common Stock at the date of the re-pricing.

(9) Mr. Manning joined the Company in September 1996.

(10) The dollar amount listed represents the closing market price on the date of
the grant ($13.000) multiplied by the number of shares awarded. On May 21,
1997 Mr. Manning was granted a contingent restricted stock award (the
"Manning One Award") under the Long-Term Incentive Plan covering 60,000
shares of Common Stock (the "Manning One Restricted Shares"). During 1997,
the threshold specified in the Manning One Award was achieved, and the
shares were subsequently issued. On August 26, 1997 60,000 Manning One
Restricted Shares were issued, which vest in equal increments of 1,000
shares per month over the five year period subsequent to August 26, 1997.
All Manning One Restricted Shares vest only if Mr. Manning is still an
employee of the Company on each vesting date. Dividends will be payable on
the Manning One Restricted Shares only to the extent that dividends are
payable on the shares of Common Stock. In December 1998, the Compensation
Committee reevaluated the restricted share agreements of Mr. Manning.
Beginning on January 1, 1999, the restricted stock awards to Mr. Manning
will vest in quarterly installments 45 days after the end of each fiscal
quarter over a 20 year period. There will be an acceleration in the vesting
upon the attainment of certain goals. The Manning One Restricted Shares
also become fully vested upon the occurrence of a change of control. As of
December 31, 1998, the aggregate value of the Manning One Restricted Shares
(including unvested Manning One Restricted Shares) was $776,250.

(11) Includes options to purchase 170,000 shares of Common Stock which had been
granted to Mr. Manning in a prior year and which originally were
exercisable at an exercise price of $15.1875 per share. On May 21, 1997 the
Company

8
<PAGE>

repriced the exercise price for options to purchase 1,187,900 shares,
including these options, at $12.9375 per share, which was the market price
of the Common Stock at the date of the re-pricing.

(12) The dollar amount listed represents the closing market price on the date of
the grant ($15.375) multiplied by the number of shares awarded. On August
27, 1996 Mr. Manning was granted a contingent restricted stock award (the
"Manning Two Award") under the Long-Term Incentive Plan covering 70,000
shares of Common Stock (the Manning Two Restricted Shares"). During 1997,
the threshold specified in the Manning Two Award was achieved, and the
shares were subsequently issued. On July 8, 1997 70,000 Manning Two
Restricted Shares were issued, which vest in equal increments of 1,166
shares per month over the five year period subsequent to July 8, 1997. All
Manning Two Restricted Shares vest only if Mr. Manning is still an employee
of the Company on each vesting date. Dividends will be payable on the
Manning Two Restricted Shares only to the extent that dividends are payable
on the shares of Common Stock. In December 1998, the Compensation
Committee reevaluated the restricted share agreements of Mr. Manning.
Beginning on January 1, 1999, the restricted stock awards to Mr. Manning
will vest in quarterly installments 45 days after the end of each fiscal
quarter over a 20 year period. There will be an acceleration in the vesting
upon the attainment of certain goals. The Manning Two Restricted Shares
also become fully vested upon the occurrence of a change of control. As of
December 31, 1998, the aggregate value of the Manning Two Restricted Shares
(including unvested Manning Two Restricted Shares) was $918,218.

(13) Mr. Rouse served as Executive Vice President from October 1996 until
December 1998, at which time he resigned his position with the Company.

(14) The dollar amount listed represents the closing market price on the date of
the grant ($13.000) multiplied by the number of shares awarded. On May 21,
1997, Mr. Rouse was granted a contingent restricted stock award (the "Rouse
One Award") under the Long-Term Incentive Plan covering 100,000 shares of
Common Stock (the "Rouse One Restricted Shares"). During 1997, the
threshold specified in the Rouse One Award was achieved, and the shares
were subsequently issued. On August 26, 1997 100,000 Rouse One Restricted
Shares were issued, which vest in equal increments of 1,666 shares per
month over the five year period subsequent to August 26, 1997. All Rouse
One Restricted Shares vest only if Mr. Rouse is still an employee of the
Company on each vesting date. Dividends will be payable on the Rouse One
Restricted Shares only to the extent that dividends are payable on the
shares of Common Stock. The Rouse One Restricted Shares also become fully
vested upon the occurrence of a change of control. On December 31, 1998,
Mr. Rouse returned 73,333 of the Rouse One Restricted Shares, representing
the unvested portion at the time of his departure with the Company.

(15) Includes options to purchase 200,000 shares of Common Stock which had been
granted to Mr. Rouse in a prior year and which originally were exercisable
at an exercise price of $14.5625 per share. On May 21, 1997 the Company
repriced the exercise price for options to purchase 1,187,900 shares,
including these options, at $12.9375 per share, which was the market price
of the Common Stock at the date of the re-pricing.

(16) The dollar amount listed represents the closing market price on the date of
the grant ($14.4375) multiplied by the number of shares awarded. On
September 20, 1996, Mr. Rouse was granted a contingent restricted stock
award (the "Rouse Two Award") under the Long-Term Incentive Plan covering
40,000 shares of Common Stock (the "Rouse Two Restricted Shares"). During
1997, the threshold specified in the Rouse Two Award was achieved, and the
shares were subsequently issued. On July 8, 1997 40,000 Rouse Two
Restricted Shares were issued, which vest in equal increments of 666 shares
per month over the five year period subsequent to July 8, 1997. All Rouse
Two Restricted Shares vest only if Mr. Rouse is still an employee of the
Company on each vesting date. Dividends will be payable on the Rouse Two
Restricted Shares only to the extent that dividends are payable on the
shares of Common Stock. The Rouse Two Restricted Shares also become fully
vested upon the occurrence of a change of control. On December 31, 1998,
Mr. Rouse returned 28,667 of the Rouse Two Restricted Shares, representing
the unvested portion at the time of his departure with the Company.

9
<PAGE>

STOCK OPTION GRANTS

The following table summarizes the grants of options during 1998 to Mr.
Ruberg, Mr. Geiger, Mr. Manning, Ms. Kurlin, and Mr. Dignall and the value of
these options at the end of 1998.

OPTION GRANTS IN 1998

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-----------------
NUMBER OF PERCENT VALUE AT ASSUMED
SECURITIES OF TOTAL OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED EXERCISE PRICE APPRECIATION FOR
OPTIONS TO EMPLOYEES IN PRICE EXPIRATION OPTION TERM
------------
NAME GRANTED(#) 1998 ($/SH) DATE 5% 10%
- ---- ---------- ---- ------ ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
David C. Ruberg -- -- -- -- -- --

Trevor Dignall 150,000 4.95% 36.492 4/30/2008 3,442,443 8,723,827

James F. Geiger 30,000 0.99% $34.625 7/28/2008 653,264 1,655,500

Patricia Kurlin 15,000 0.49% $36.188 4/08/2008 341,372 865,103
40,000 1.32% $18.188 11/23/2008 457,521 1,159488

Robert M. Manning 50,000 1.65% $34.625 7/28/2008 1,088,774 2,759,167
</TABLE>

AGGREGATED OPTION EXERCISES IN 1998 AND FISCAL YEAR END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF
SHARES UNEXERCISED OPTIONS UNEXERCISED IN-
ACQUIRED AT FISCAL THE-MONEY OPTIONS AT
ON VALUE YEAR END(#) FISCAL YEAR END($)
EXERCISE REALIZED (EXERCISABLE/ (EXERCISABLE/
NAME (#) (1) UNEXERCISABLE) UNEXERCISABLE(2)
- ---- --- --- -------------- ----------------
<S> <C> <C> <C> <C>
David C. Ruberg -- -- 584,688/ 305,312 10,085,868 / 5,266,632

Trevor Dignall -- -- 17,500/ 132,500 -- / --

James F. Geiger 6,000 246,000 134,834/ 119,116 2,282,762 / 1,581,239

Patricia A. Kurlin -- -- 39,332/ 80,668 643,977 / 1,167,273

Robert M. Manning 17,170 661,045 81,662/ 161,168 1,336,806 / 1,989,512

Robert A. Rouse 22,000 951,500 83,332/ 83,332 1,437,477 / --
</TABLE>

(1) Based upon the market price on the date of each exercise.

(2) Based on a year end closing price of $17.25 per share.

10
<PAGE>

EMPLOYMENT AGREEMENTS

Mr. Ruberg is employed as President, Chief Executive Officer and Chairman
of the Board of the Company pursuant to an employment agreement dated as of May
1, 1993, as amended from time to time (the "Agreement"). The Agreement provides
for a base salary and an annual performance-based bonus to be determined by the
Compensation Committee. (See "Compensation Committee Report on Executive
Compensation--Chief Executive Officer Compensation.") Either party may terminate
the Agreement upon at least 15 days notice provided that, in the case of
termination by the Company without cause, Mr. Ruberg is entitled to receive his
base salary, together with health and insurance benefits, for either a 12 or 18
month period depending on certain factors set forth in the Agreement. Mr. Ruberg
is subject to confidentiality and non-competition restrictions during the
employment term and for a period of 18 months following the termination of his
employment. The non-competition restrictions apply to Florida and to any other
state into which the Company plans, within the year following termination, to
provide its services. On May 5, 1993, Mr. Ruberg was granted a ten-year Option
(the "Ruberg Option") to purchase 400,000 shares of Common Stock at an exercise
price of $4.625 per share, exercisable as to 1/60 of the underlying shares on
June 5, 1993 and 1/60 of the underlying shares on the fifth day of each
subsequent month through May 5, 1998. Upon the occurrence of a change in control
(as defined in the Ruberg Option), the unvested portion of the Ruberg Option
will become fully vested. In addition, on November 8, 1994, June 7, 1995 and May
21, 1997, respectively, Mr. Ruberg was granted ten-year options to purchase up
to 60,000, up to 70,000 and up to 400,000 shares of Common Stock at exercise
prices of $5.125, $4.75 and $12.9375 per share, respectively; upon the
occurrence of a change in control (as defined under the plans under which these
options were granted), the unvested portion of these options will become fully
vested.

On January 26, 1996, Mr. Ruberg was granted a contingent restricted stock
award (an "Award") covering 400,000 shares of Common Stock ("Restricted
Shares"). Under the terms of the Award, Restricted Shares would be issued only
if substantial specified increases in stockholder value were obtained by
specified dates. Over the course of 1996, each of the three distinct thresholds
specified in the Award were achieved, and the shares were subsequently issued.
On May 22, 1996, 133,334 Restricted Shares were issued, which vest in equal
increments of 2,222 shares per month over the five-year period subsequent to May
22, 1996. On July 3, 1996, 133,334 Restricted Shares were issued, which vest in
equal increments of 2,222 shares per month over the five-year period subsequent
to July 3, 1996. On September 13, 1996, 133,332 Restricted Shares were issued,
which vest in equal increments of 2,222 shares per month over the five-year
period subsequent to September 13, 1996. All Restricted Shares vest only if Mr.
Ruberg is still an employee of the Company on each vesting date. Upon the
occurrence of a change of control (as defined in the Award), the unvested
portion of the issued Restricted Shares will become fully vested.

Mr. Buyens is employed as Senior Vice President, Sales of the Company
pursuant to a letter agreement dated January 11, 1999 (the "Buyens Letter"). The
Buyens Letter provides for a base salary and an annual performance-based bonus
to be determined by the Compensation Committee. [In the case of the termination
of Mr. Buyens's employment by the Company without cause, Mr. Buyens is entitled
to receive his base salary for a 12 month period.] Mr. Buyens was granted a ten-
year Option (the "Buyens Option") to purchase 100,000 shares of Common Stock at
an exercise price of $15.00 per share, exercisable as to 1/60 of the underlying
shares on February 11, 1999 and 1/60 of the underlying shares on the eleventh
day of each subsequent month through January 11, 2009. Upon the occurrence of a
change in control, the unvested portion of the Buyens Option will become fully
vested. At the same time, Mr. Buyens was granted a contingent restricted stock
award covering 10,000 shares of Common Stock. Under the terms of the award,
5,000 of the restricted shares would be vested at the end of the first full year
of employment and the remaining 5,000 shares vested at the end of the second
full year of employment. Upon the occurrence of a change of control, the
unvested portion of the issued restricted shares will become fully vested. Mr.
Buyens can borrow an aggregate of $66,000 from the Company in connection with
certain relocation expenses incurred by Mr. Buyens as a result of his
commencement of employment with the Company. The aggregate amount borrowed by
Mr. Buyens is forgiven ratably by the Company over the 12-month period
commencing January 11, 1999. Pursuant to this arrangement, Mr. Buyens will be
reimbursed for the payment of taxes on such relocation allowance.

Mr. Dignall is employed as Senior Vice President, Human Resources of the
Company pursuant to a letter agreement dated April 21, 1998 (the "Dignall
Letter"). The Dignall Letter provides for a base salary and an annual
performance-based bonus to be determined by the Compensation Committee. In the
case of the termination of Mr. Dignall's employment by the Company without
cause, Mr. Dignall is entitled to receive his base salary for a 12 month period
and executive level outplacement services. Mr. Dignall was granted a ten-year
Option (the "Dignall Option") to purchase 150,000 shares of Common Stock at an
exercise price of $36.4920 per share, exercisable as to 1/60 of the underlying
shares on May 30, 1998 and 1/60 of the underlying shares on the eleventh day of
each subsequent month through April 30, 2008. Upon the occurrence of a change in
control, the unvested portion of the Dignall Option will become fully vested.
Mr. Dignall borrowed an aggregate of $116,556 from the Company in connection
with certain relocation expenses incurred by Mr. Dignall as a result of his
commencement of employment with the Company. The aggregate amount borrowed by
Mr. Dignall is forgiven ratably by the Company over a 12-month period. Pursuant
to this arrangement, Mr. Dignall will be reimbursed for the payment of taxes on
such relocation allowance.

11
<PAGE>

Ms. Kurlin is employed as Senior Vice President, General Counsel of the
Company pursuant to a letter agreement dated November 10, 1998 (the "Kurlin
Letter"). The Kurlin Letter provides for a base salary and an annual
performance-based bonus to be determined by the Compensation Committee. In the
case of the termination of Ms. Kurlin's employment by the Company without cause,
Ms. Kurlin is entitled to receive her base salary for a 12 month period and
executive level outplacement services. Ms. Kurlin was granted a ten-year Option
(the "Kurlin Option") to purchase 40,000 shares of Common Stock at an exercise
price of $18.1875 per share, exercisable as to 1/60 of the underlying shares on
December 23, 1998 and 1/60 of the underlying shares on the eleventh day of each
subsequent month through November 23, 2008. These options are in addition to
80,000 options previously granted to Ms. Kurlin during her tenure with the
Company.

Mr. Manning is employed as Senior Vice President and Chief Financial
Officer of the Company pursuant to a letter agreement dated August 27, 1996 (the
"Manning Letter"). The Manning Letter provides for a base salary and an annual
performance-based bonus to be determined by the Compensation Committee. (See
"Compensation Committee Report on Executive Compensation--Annual Bonus.") In the
case of the termination of Mr. Manning's employment by the Company without
cause, Mr. Manning is entitled to receive his base salary for a 12 month period.
At the same time, Mr. Manning was granted a ten-year Option (the "Manning
Option") to purchase 170,000 shares of Common Stock at an exercise price of
$15.375 per share, exercisable as to 1/60 of the underlying shares on September
27, 1996 and 1/60 of the underlying shares on the fifth day of each subsequent
month through August 27, 2001. Upon the occurrence of a change in control, the
unvested portion of the Manning Option will become fully vested. The exercise
price for the Manning Option was reduced in May 1997 to $12.9375 per share. At
the same time, Mr. Manning was granted a contingent restricted stock award
covering 70,000 shares of Common Stock. Under the terms of the award, restricted
shares would be issued only if a substantial specified increase in stockholder
value were obtained by a specified date. The threshold has been achieved, and on
July 8, 1997, 70,000 restricted shares were issued, which vest in equal
increments over the five-year period subsequent to July 8, 1997. All restricted
shares vest only if Mr. Manning is still an employee of the Company on each
vesting date. Upon the occurrence of a change of control, the unvested portion
of the issued restricted shares will become fully vested. On September 4, 1996,
Mr. Manning borrowed an aggregate of $122,000 from the Company in connection
with certain relocation expenses incurred by Mr. Manning as a result of his
commencement of employment with the Company. The aggregate amount borrowed by
Mr. Manning is forgiven ratably by the Company over the 12-month period
commencing September 4, 1996. As of September 4, 1997, the relocation balance
had been repaid in full. Pursuant to this arrangement, Mr. Manning will be
reimbursed for the payment of taxes on such relocation allowance.

In December 1998, the Compensation Committee reevaluated the restricted
share agreements of Mr. Ruberg, Mr. Geiger, and Mr. Manning. Beginning on
January 1, 1999, the restricted stock awards to Mr. Ruberg, Mr. Geiger and Mr.
Manning will vest quarterly installments 45 days after the end of each fiscal
quarter over a 20 year period. There will be acceleration in the vesting upon
the attainment of certain goals. Upon the occurrence of a change of control, the
unvested portion of the issued restricted shares will become fully vested.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 1998, the Compensation Committee was comprised of Messrs. Baker and
Knapp. No member of the Compensation Committee was at any time an officer or
employee of the Company or any of its subsidiaries.

12
<PAGE>

BENEFICIAL OWNERSHIP

The following table sets forth, as of April 1, 1999, certain information
with respect to (i) those persons or groups known to the Company to be the
beneficial owners of more than five percent of the Common Stock, (ii) each of
the directors of the Company, including the nominee for director, (iii) the
Company's executive officers named in the summary compensation table, and (iv)
all directors and executive officers of the Company as a group. Except as
otherwise indicated, the stockholders listed in the table have sole voting and
investment power with respect to the Common Stock owned by them.

<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL COMMON STOCK
NAME OF BENEFICIAL OWNER OWNERSHIP OUTSTANDING
------------------------ --------- -----------
<S> <C> <C>
Putnam Investments, Inc 5,457,330(1) 11.0%
One Post Office Square
Boston, MA 02109

Massachusetts Financial Services Corp. 5,038,416(2) 10.2%
500 Boylston Street
Boston, MA 02116

FMR Corp 3,614,382(3) 7.3%
82 Devonshire Street
Boston, MA 02109

Wellington Management Co LLP 3,539,023(4) 7.1%
75 State St.
Boston, MA 02109

Franklin Resources Inc. 2,694,280(5) 5.4%
777 Mariners Island Blvd.
San Mateo, CA 94404

American Express Co. 2,502,648(6) 5.1%
200 Vesey St.
New York, NY 10285

T. Rowe Price and Associates, Inc. 2,457,379(7) 5.0%
100 E. Pratt St.
Baltimore, MD 21202

David C. Ruberg 955,168(8) 1.9%
John C. Baker 79,086(9) *
George F. Knapp 54,365(10) *
Philip A. Campbell 26,000(11) *
Pierce J. Roberts 13,668(12) *
James F. Geiger 320,894(13) *
Trevor Dignall 25,000(14) *
Patricia Kurlin 44,832(15) *
Robert M. Manning 220,062(16) *

All executive officers and directors
as a group (11 persons) 1,745,741(17) 3.5%
</TABLE>

* Less than 1%

(1) Based upon information set forth in a Schedule 13G filed with the
Securities and Exchange Commission (the "SEC") on February 18, 1999.
(2) Based upon information set forth in a Schedule 13G filed with the SEC on
February 11, 1999.
(3) Based upon information set forth in a Schedule 13G filed with the SEC on
February 1, 1999.
(4) Based upon information set forth in a Schedule 13G filed with the SEC on
February 8, 1999.
(5) Based upon information set forth in a Schedule 13G filed with the SEC on
January 27, 1999.
(6) Based upon information set forth in a Schedule 13G filed with the SEC on
January 29, 1999.
(7) Based upon information set forth in a Schedule 13G filed with the SEC on
February 12, 1999.

13
<PAGE>

(8) Includes 206,664 shares subject to certain vesting requirements under the
Award and 611,168 shares subject to options exercisable as of April 1, 1999
or within 60 days thereafter. Excludes 278,832 shares subject to options
that are not exercisable within 60 days of April 1, 1999.

(9) Includes 50,558 shares of Common Stock and 28,528 shares subject to options
exercisable as of April 1, 1999 or within 60 days thereafter. Excludes
1,142 shares subject to options that are not exercisable within 60 days of
April 1, 1999.

(10) Includes 7,938 shares of Common Stock and 46,427 shares subject to options
exercisable as of April 1, 1999 or within 60 days thereafter. Excludes
1,143 shares subject to options that are not exercisable within 60 days of
April 1, 1999.

(11) Includes 26,000 shares subject to options exercisable as of April 1, 1999
or within 60 days thereafter.

(12) Includes 5,000 shares of Common Stock and 8,668 shares subject to options
exercisable as of April 1, 1999 or within 60 days thereafter. Excludes
213,332 shares subject to options that are not exercisable within 60 days
of April 1, 1999.

(13) Includes 129,060 shares of Common Stock, 44,000 shares subject to certain
vesting requirements under their awards and 147,834 shares subject to
options exercisable as of April 1, 1999 or within 60 days thereafter.
Excludes 106,166 shares subject to options that are not exercisable within
60 days of April 1, 1999.

(14) Includes 25,000 shares subject to options exercisable as of April 1, 1999
or within 60 days thereafter. Excludes 125,000 shares subject to options
that are not exercisable within 60 days of April 1, 1999.

(15) Includes 44,832 shares subject to options exercisable as of April 1, 1999
or within 60 days thereafter. Excludes 75,168 shares subject to options
that are not exercisable within 60 days of April 1, 1999.

(16) Includes 31,233 shares of Common Stock, 94,167 shares subject to certain
vesting requirements under their awards and 94,662 shares subject to
options exercisable as of April 1, 1999 or within 60 days thereafter.
Excludes 148,168 shares subject to options that are not exercisable within
60 days of April 1, 1999.

(17) Includes 198,726 shares of Common Stock subject to certain vesting
requirements under awards, 152,339 shares of Common Stock and 1,039,785
shares subject to options exercisable as of April 1, 1999 or within 60 days
thereafter. Excludes 1,082,285 shares subject to options that are not
exercisable within 60 days of April 1, 1999.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company made advances to Mr. Dignall in connection with certain
relocation expenses incurred by Mr. Dignall as a result of his commencement of
employment with the Company. Since April 30, 1998 the largest amount outstanding
was $116,278. The aggregate amount borrowed by Mr. Dignall is forgiven ratably
by the Company over a 12-month period. Pursuant to this arrangement, Mr. Dignall
will be reimbursed for the payment of taxes on such relocation allowance. As of
April 1, 1999, $58,278.72 of this loan was forgiven.

The Company made advances to Mr. Ruberg for the payment of taxes resulting
from the vesting of Restricted Stock Awards issued pursuant to the Long-Term
Incentive Plan. The largest amount outstanding at any time since January 1,
1998 was $566,511. All advances have been paid in full.

The Company made advances to Mr. Geiger for the payment of taxes resulting
from the vesting of Restricted Stock Awards issued pursuant to the Long-Term
Incentive Plan. The largest amount outstanding at any time since January 1,
1998 was $79,374. All advances have been paid in full.

The Company made advances to Mr. Manning for the payment of taxes resulting
from the vesting of Restricted Stock Awards issued pursuant to the Long-Term
Incentive Plan. The largest amount outstanding at any time since January 1,
1998 was $143,814. All advances have been paid in full.

The Company made advances to Mr. Rouse for the payment of taxes resulting
from the vesting of Restricted Stock Awards issued pursuant to the Long-Term
Incentive Plan. The largest amount outstanding at any time since January 1, 1998
was $109,013. All advances have been paid in full.

The Company is party to a consulting agreement with Mr. Roberts, a director
of the Company (the "Consulting Agreement"). Under the Consulting Agreement, Mr.
Roberts provides consulting services at the request of the chief executive
officer of the Company with respect to stockholder value enhancement, strategic
planning, corporate finance, and other matters regarding the Company and its
subsidiaries. As compensation, Mr. Roberts was issued two stock options pursuant
to the Long-Term Incentive Plan, each covering 100,000 shares of common stock,
at an exercise price of $23 3/16 per share.

14
<PAGE>

COMPARATIVE STOCK PERFORMANCE

The graph below compares the cumulative stockholder return on the Common
Stock since December 31, 1993 with the cumulative total return on the NASDAQ
Stock Market Index and NASDAQ Telecommunications Industry Index over the same
period (assuming an investment of $100 in the Common Stock, the NASDAQ Stock
Market and NASDAQ Telecommunications Stocks on December 31, 1993, and
reinvestment of all dividends).

[GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
12/93 12/94 12/95 12/96 12/97 12/98
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Intermedia Communications $ 100 $ 115 $ 171 $ 251 $ 593 $ 337
---------------------------------------------------------------------------------------------
NASDAQ Stock Market $ 100 $ 98 $ 137 $ 169 $ 207 $ 290
---------------------------------------------------------------------------------------------
NASDAQ Telecommunications Stock $ 100 $ 84 $ 113 $ 117 $ 166 $ 271
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

To the Company's knowledge, based solely on review of the copies of reports
furnished to the Company during 1998, all of it officers, directors and greater
than ten-percent beneficial holders have complied with all applicable Section
16(a) filing requirements.

15
<PAGE>

PROPOSAL TWO:

INCREASE THE NUMBER OF SHARES AUTHORIZED FOR
ISSUANCE UNDER THE COMPANY'S LONG TERM INCENTIVE
PLAN FROM 9,000,000 SHARES TO 10,000,000 SHARES

PROPOSED AMENDMENT

In April 1999, the Board adopted, subject to stockholder approval, an
amendment (the "Plan Amendment") to the Company's Long-Term Incentive Plan, as
amended (the "Plan"), increasing the aggregate number of shares of Common Stock
authorized for issuance under the Plan from 9,000,000 to 10,000,000. Based on
the recommendation of the Compensation Committee, the Board believes that
options and other stock awards have been, and will continue to be, an important
compensation element in attracting and retaining key employees. As of April 1,
1999, options to purchase an aggregate of 6,404,020 shares of Common Stock were
issued and outstanding under the Plan, and 1,383,818 shares of Common Stock
remained available for future grants of options. In addition, as of April 1,
1999, options to purchase an aggregate of 1,407,400 shares of Common Stock
having an aggregate market value of $36,064,625 were issued and outstanding
under the Company's 1992 Stock Option Plan.

If the Plan Amendment is approved, the Plan would cover an aggregate of
10,000,000 shares of Common Stock having an aggregate market value, as of April
1, 1999, of $256,250,000 and after taking into account awards made under the
Plan through April 1, 1999, an aggregate of 2,383,818 shares having an aggregate
market value as of April 1, 1999 of $61,085,336 would be available for future
issuance.

The Board believes that the increase in authorized shares is necessary to
enable it to continue to make awards under the Plan to attract and retain key
employees. The affirmative vote of a majority of shares of Common Stock present
or represented by Proxy and entitled to vote at the Annual Meeting is required
for approval of the Plan Amendment.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PLAN AMENDMENT

DESCRIPTION OF LONG-TERM INCENTIVE PLAN

GENERAL

The Plan was adopted in 1996, as amended in 1997 and 1998, provides for the
grant of options to acquire an aggregate of 9,000,000 shares of Common Stock
(10,000,000 after approval of the Plan Amendment to employees, officers or
directors of, or consultants to, the Company or its subsidiaries. The Plan
authorizes the Board to issue incentive stock options ("ISOs") as defined in
Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code"),
stock options that do not conform to the requirements of that Code section
("Non-ISOs"), stock appreciation rights ("SARs") and restricted stock. Officers,
directors and consultants who are not also employees of the Company or any
subsidiary thereof may only be granted Non-ISOs. As of April 1, 1999, the
Company had granted the following awards under the Plan: options to purchase
1,115,000 shares and contingent restricted stock awards of 600,000 shares to the
current executive officers, options to purchase 300,000 shares to the current
directors who are not executive officers (including options to purchase 248,000
shares to the nominees for director) and options to purchase 4,358,327 shares to
all employees and officers other than the current executive officers.

The Compensation Committee administers the Plan and has full power and
authority take any and all other actions deemed necessary or desirable for the
proper administration of the Plan and the effectuation of its purposes. The
Compensation Committee has authority to select those employees, officers, and
consultants whose performances it determines significantly promote the success
of the Company to receive discretionary awards under the Plan, grant the awards,
interpret and determine all questions of policy with respect thereto, and adopt
rules, regulations, agreements and instruments deemed necessary for its proper
administration.

AWARDS

Non-Qualified and Incentive Stock Options. Options may be granted under the
Plan. Awards may be ISOs or Non-ISOs. The exercise price of options will be set
by the Compensation Committee and stated in the option agreement and may not be
less than 100% of fair market value of the underlying shares on the date of
grant. The exercise price may be paid in cash or by delivery of the Company's
Common Stock or pursuant to a broker-assisted "cashless exercise" program if
established by the Company. Such a program would enable an optionee to finance
through an independent broker the exercise of his or her option and then either
sell the shares of Common Stock underlying the option or hold them in an account
with the broker who financed the exercise of such option. Options may also
contain a stock appreciation right permitting the recipient to receive the
difference between exercise price per share and the market value on the date of
surrender.

Restricted Stock. Awards of Common Stock granted under the Plan may be
subject to forfeiture until such restrictions, terms and conditions as the
Compensation Committee may determine lapse or are fulfilled, as the case may be.
Grants may

16
<PAGE>

consist of newly issued Common Stock, Common Stock held in treasury or a
combination thereof. The Compensation Committee will determine how the price for
the Common Stock, if any, may be paid. Generally a participant obtaining a
restricted stock award will have all the rights of a shareholder while the
Common Stock is subject to restrictions, including the right to vote the Common
Stock and to receive dividends. Restricted Common Stock will be issued in the
name of the participant and held in escrow until any applicable restrictions
lapse or terms and conditions are fulfilled, as the case may be. Until the
restrictions are eliminated, restricted Common Stock may not be transferred.

Dividend Equivalent Award. The Compensation Committee may grant an award
that represents the right to receive a dividend or its equivalent with respect
to any new or previously existing award, which will entitle the recipient to
receive at the time of settlement an amount equal to the actual dividends paid
on the Common Stock delivered to the recipient, calculated from the date of
award and accounted for as if reinvested in Common Stock on the dividend payment
dates. This type of award may be paid in the form of Common Stock, cash or a
combination of both.

Stock Appreciation Rights. The Compensation Committee may award SARs, which
may or may not be granted together with Options, under the Plan. Generally SARs
permit the holder thereof to receive an amount (in cash, Common Stock or a
combination thereof) equal to the number shares of Common Stock with respect to
which SARs are exercised multiplied by the excess of the fair market value of
the Common Stock on the exercise date over the exercise price. In general, the
exercise of any portion of the SARs or any related option will cause a
corresponding reduction in the number of shares of Common Stock remaining
subject to SARs and related option.

Other Stock Based Awards. The Compensation Committee may grant Common Stock
or other Common Stock based awards that are related to or similar to the awards
described above.

Formula Awards. The Plan provides automatic grants to Non-Employee
Directors of the Company pursuant to a formula. The Plan provides that each
member of the Board who is not, on the date on which any option is to be granted
to such member pursuant to the formula, an employee (a "Non-Employee Director")
will be granted options in accordance with the following formula: (i) an option
to acquire 20,000 shares of Common Stock will be granted on the Grant Date
(defined below) at the Exercise Price (defined below), which option will become
exercisable, so long as the Non-Employee Director continues to be a member of
the Board, as to one-third of the shares on the January 1 next following the
Grant Date and an additional one-third of the shares on each January 1
thereafter; and (ii) an option to acquire 2,000 shares of Common Stock will be
granted on the Grant Date and on each anniversary thereof at the Exercise Price,
which options will be exercisable immediately upon grant. In the event a Non-
Employee Director fails to attend at least 75% of the Board meetings in any
calendar year commencing with calendar year 1996, such person automatically
forfeits his right to exercise that portion of the option provided for in clause
(i) above that would have otherwise become exercisable on the next following
January 1 which portion shall cease to be of any force or effect. For purposes
of the formula, "Grant Date" means with respect to each Non-Employee Director
the earlier of the date the Plan is approved by both the Board and the
shareholders) or the date of his or her election to the Board and "Exercise
Price" means (x) the closing market price of the Common Stock on the Grant Date,
or, if there were no sales on such date, then the next preceding date on which
such closing market price was recorded, with respect to each option granted
pursuant to clause (i) above and (y) the closing market price of the Common
Stock on each date of grant (or if there were no sales on such date, then on the
next preceding date on which such closing market price was recorded) with
respect to options granted pursuant to clause (ii) above. Options granted
pursuant to the formula expire and cease to be of any force or effect on the
earlier of the fifth anniversary of the date any such option was granted or the
first anniversary of the date on which an optionee ceases to be a member of the
Board.

FEDERAL INCOME TAX CONSEQUENCES

The following summary generally describes the principal federal (and not
state and local) income tax consequences of awards granted under the Plan. It is
general in nature and is not intended to cover all tax consequences that may
apply to a particular employee or to the Company. The provisions of the Code,
and the regulations thereunder relating to these matters are complicated and
their impact in any one case may depend upon the particular circumstances. This
discussion is based on the Code as currently in effect.

The Plan is not subject to any of the requirements of the Employee
Retirement Income Security Act (ERISA), nor is it qualified under Section 401(a)
of the Code.

Non-Incentive Stock Options. If an option is granted in accordance with the
terms of the Plan, no income will be recognized by the recipient at the time the
option is granted. On exercise of a stock option, the amount by which the fair
market value of the Common Stock on the date of exercise exceeds the purchase
price of such shares will generally be taxable to the holder as ordinary income,
and will be deductible for tax purposes by the Company (or one of its
subsidiaries) in the year in which the holder recognizes the ordinary income.
The disposition of shares acquired upon exercise of a stock option will
ordinarily result in long-term or short-term capital gain or loss (depending on
the applicable holding period) in an amount equal to the difference between the
amount realized on such disposition and the sum of the purchase price and the
amount of ordinary income recognized in connection with the exercise of the
stock option.

17
<PAGE>

Incentive Stock Options. If an ISO is granted in accordance with the terms
of the Plan, no income will be recognized by the recipient at the time the ISO
is granted. On exercise of an ISO, the holder will generally not recognize any
income and the Company (or one of its subsidiaries) will generally not be
entitled to a deduction for tax purposes. However, the difference between the
purchase price and the fair market value of the shares received on the date of
exercise will be treated as a positive adjustment in determining alternative
minimum taxable income, which may subject the holder to the alternative minimum
tax. The disposition of shares acquired upon exercise of an ISO will ordinarily
result in long-term capital gain or loss. However, if the holder disposes of
shares acquired upon exercise of an ISO within two years after the date of grant
or within one year after the date of exercise (a "disqualifying disposition"),
the holder will generally recognize ordinary income, and the Company (or one of
its subsidiaries) will generally be entitled to a deduction for tax purposes, in
the amount of the excess of the fair market value of the Common Stock on the
date the ISO is so exercised over the purchase price (or the gain on sale, if
less). Any excess of the amount realized by the holder on the disqualifying
disposition over the fair market value of the shares on the date of exercise of
the ISO will ordinarily constitute long-term or short-term capital gain
(depending on the applicable holding period).

Stock Appreciation Rights. The amount of any cash (or the fair market value
of any Common Stock) received upon the exercise of SARs under the Plan will be
includible in the holder's ordinary income and the Company will be entitled to a
deduction for such amount.

Restricted Shares. If restricted shares are awarded in accordance with the
terms of the Plan, no income will be recognized by such holder at the time such
award is made. A Plan participant who is awarded restricted shares will be
required to include in his ordinary income, as compensation, the fair market
value of such restricted shares upon the lapse of the forfeiture provisions
applicable thereto, plus the amount of any dividend equivalents on such
restricted shares, less any amount paid therefor, except that the holder may
elect to include in his ordinary income, as compensation, at the time the
restricted shares are first issued the fair market value of such restricted
shares at the time of receipt, less any amount paid therefor. Absent the making
of the election referred to in the preceding sentence, any cash dividends or
other distributions paid with respect to restricted shares prior to lapse of the
applicable restriction will be includible in the holder's ordinary income as
compensation at the time of receipt. In each case, the Company (or one of its
subsidiaries) will be entitled to a deduction in the same amount as the holder
realizes compensation income.

PROPOSAL THREE:

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Board has reappointed Ernst & Young LLP as independent auditors to
audit the financial statements of the Company for the year ending December 31,
1999. A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting, at which time such representative will have an opportunity to
make a statement, if he so desires, and will be available to respond to
appropriate questions. Ratification of the appointment of Ernst & Young LLP as
the Company's independent auditors for the year ending December 31, 1999
requires the affirmative vote of a majority of the shares of Common Stock
present or represented and entitled to vote at the Annual Meeting. In the event
that the stockholders do not ratify the appointment of Ernst & Young LLP, such
appointment will be reconsidered by the Audit Committee of the Board.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF ERNST &
YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31,
1999.

18
<PAGE>

STOCKHOLDER PROPOSALS

Stockholders who wish to submit proposals for inclusion in the Proxy
Statement for the Company's Annual Meeting to be held in 2000 must comply with
and meet the requirements of Regulation 14A-8 of the Securities Exchange Act of
1934, as amended, which requires, among other things that any proposal be
received by the Company at the Company's principal executive office, 3625 Queen
Palm Drive, Tampa, Florida 33619, Attention: Secretary, on December 14, 1999.

OTHER MATTERS

The Company knows of no matters other than the matters described above
which will be presented at the Annual Meeting. However, if other matters are
properly brought before the Annual Meeting, the persons voting the proxies will
vote them as they deem in the best interest of the Company.

BY ORDER OF THE BOARD OF DIRECTORS

Robert M. Manning
Secretary

April 13, 1999