United States
Securities and Exchange Commission
Washington, DC 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
FiberCore, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
---------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
5) Total fee paid:
---------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
---------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
3) Filing Party:
---------------------------------------------------------------------------
4) Date Filed:
---------------------------------------------------------------------------
<PAGE>
FIBERCORE, INC.
253 WORCESTER ROAD
P.O. BOX 180
CHARLTON, MASSACHUSETTS 01507
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 17, 1998
-----------------
The Annual Meeting of Shareholders of FiberCore, Inc. (the "Company") will
be held at the Ramada Inn, 624 Southbridge Street, Auburn, Massachusetts, 01501,
on November 17, 1998, at 10:00 A.M., Eastern Standard Time, for the following
purposes:
1. To consider and take action on the ratification of the selection of
Deloitte & Touche LLP as the Company's independent certified public accountants
for 1998; and
2. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on September 30, 1998
will be entitled to receive notice of and to vote at the meeting.
At this meeting there are no directors due for re-election, and no new
directors are being proposed by the Board of Directors.
Shareholders are cordially invited to attend the meeting in person.
However, whether or not you expect to attend, we urge you to read the
accompanying Proxy Statement and then complete, sign, date and return the
enclosed proxy card in the enclosed postage-prepaid envelope. It is important
that your shares be represented at the meeting, and your promptness will assist
us to prepare for the meeting and to avoid the cost of a follow-up mailing. If
you receive more than one proxy card because you own shares registered in
different names or at different addresses, each proxy card should be completed
and returned.
Sincerely,
/s/ Charles De Luca
Charles De Luca
Secretary
Charlton, Massachusetts
October 15, 1998
<PAGE>
FIBERCORE, INC.
253 WORCESTER ROAD
P.O. BOX 180
CHARLTON, MASSACHUSETTS 01507
-------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD NOVEMBER 17, 1998
-------
GENERAL INFORMATION
This Proxy Statement is furnished to shareholders of FiberCore, Inc. (the
"Company") in connection with the solicitation by the Board of Directors of the
Company of proxies for use at its Annual Meeting of Shareholders (the
"Meeting"). The Meeting is scheduled to be held on November 17, 1998, at 10:00
A.M., Eastern Standard Time, at the Ramada Inn, 624 Southbridge Street, Auburn,
Massachusetts, 01501, and at any and all adjournments thereof. It is anticipated
that the mailing to shareholders of this Proxy Statement and the enclosed form
of proxy will commence on or about October 15, 1998.
At the Meeting, shareholders will be asked to vote upon: (1) the
ratification of the selection of independent certified public accountants for
1998; and (2) such other business as may properly come before the Meeting and
any and all adjournments thereof.
VOTING RIGHTS AND VOTES REQUIRED
The close of business on September 30, 1998 has been fixed as the record
date (the "Record Date") for the determination of shareholders entitled to
receive notice of and to vote at the Meeting. As of the close of business on
such date, the Company had outstanding and entitled to vote 35,849,035 shares of
common stock, par value $.001 per share ("Common Stock").
A majority of the outstanding shares of the Common Stock must be
represented in person or by proxy at the Meeting in order to constitute a quorum
for the transaction of business. The record holder of each share of the Common
Stock entitled to vote at the Meeting will have one vote for each share so held.
The affirmative vote of the holders of a majority of the shares of the
Common Stock represented at the Meeting in person or by proxy and entitled to
vote thereat will be required to ratify the selection of the Company's
independent certified public accountants and to adopt any shareholder proposal
duly presented at the Meeting. In determining whether these proposals have
received the requisite number of affirmative votes, abstentions and broker
nonvoters will be disregarded and have no effect on the outcome of the vote to
ratify the selection of the independent certified public accountants.
VOTING OF PROXIES
If the accompanying proxy is properly executed and returned, the shares
represented by the proxy will be voted at the Meeting as specified in the proxy.
If no instructions are specified, the shares represented by any properly
executed proxy will be voted FOR the ratification of the selection of
independent certified public accountants.
<PAGE>
REVOCATION OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by a
shareholder at any time before it is exercised. A proxy may be revoked by a
writing, by a valid proxy bearing a later date delivered to the Company or by
attending the Meeting and voting in person.
SOLICITATION OF PROXIES
The Company will bear the cost of this solicitation, including amounts paid
to banks, brokers and other record owners to reimburse them for their expenses
in forwarding solicitation material regarding the Meeting to beneficial owners
of the Common Stock. The solicitation will be by mail, with the material being
forwarded to the shareholders of record and certain other beneficial owners of
the Common Stock by the Company's officers and other regular employees (at no
additional compensation). Such officers and employees may also solicit proxies
from shareholders by personal contact, by telephone or by telegraph if necessary
in order to assure sufficient representation at the Meeting.
Mr. Michael J. Beecher, Chief Financial Officer, will receive and tabulate
proxies and act as inspector of election for the Meeting.
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information with respect to each
person who was an executive officer or director of the Company as of September
30, 1998.
Name Age Position
Mohd A. Aslami 52 Chairman of the Board of Directors,
President, Chief Executive Officer, Chief
Technology Officer and Director
Charles De Luca 61 Executive Vice President, Secretary and
Director of the Company and General Manager
of the Company's Automated Light
Technology, Inc. ("ALT") subsidiary
Michael J. Beecher 53 Chief Financial Officer and Treasurer of
the Company, and General Manger of
FiberCore Jena GmbH ("FCJ"), the Company's
wholly owned subsidiary
Hans F.W. Moeller 69 Managing Director of FCJ
Steven Phillips 53 Director
Dr. Aslami is a co-founder, Chairman of the Board of Directors, President,
Chief Executive Officer and Chief Technology Officer of the Company. Dr. Aslami
has served as Chairman and Chief Executive Officer of FiberCore Jena, the
Company's wholly-owned subsidiary in Germany, since 1994. Dr. Aslami also holds
the position of Managing Director of the Company's joint venture, FiberCore Asia
Sdn. Bhd. in Malaysia since its formation in November, 1997. Dr. Aslami received
a Ph.D. in chemical engineering from the University of Cincinnati (1974).
2
<PAGE>
Mr. De Luca is a co-founder, Executive Vice President, Secretary and a
director of the Company. Mr. De Luca also co-founded ALT, Inc. in 1986 and
became its General Manager and a director. Mr. De Luca received his MBA in
marketing and business management from St. Johns University in 1974.
Mr. Beecher became Chief Financial Officer of the Company in April 1996. In
addition, as part of a reorganization of the management of the Company in
August, 1998, Mr. Beecher also holds the position of General Manager of the
Company's wholly owned subsidiary, FiberCore Jena GmbH in Germany. Mr. Beecher
was the Vice President of Administration and Finance, and Treasurer at the
University of Bridgeport from 1989 through 1995. Mr. Beecher is a Certified
Public Accountant and is a member of the American Institute of Certified Public
Accountants.
Mr. Moeller became Managing Director of FiberCore Jena in the fourth
quarter of 1995 on a part time basis. He served as a director of FiberCore
Incorporated from 1994 through March 1996. As part of a reorganization of the
Company, he resigned his position as a director and agreed to serve as a
director of the Company's wholly owned subsidiary FiberCore Jena GmbH. From 1993
to 1994, he served as Vice Chairman of Schott Corporation ("Schott"), a United
States subsidiary of Schott A.G., a corporation specializing in the production
of, among other things, optical glass. From 1989 to 1993, he served as President
of Schott. Mr. Moeller was a member of the Board of Directors of Schott from
1989 to 1994.
Mr. Phillips became a director of the Company in May 1995 and became a
director of ALT in 1989. Since co-founding the Winstar Government Securities
Company L. P., a registered government securities dealer which specializes in
odd-lot securities transactions, Mr. Phillips has served as Chief Financial
Officer, Secretary, and a director. Since August 1987, Mr. Phillips has served
as a director, Secretary and Chief Financial Officer of James Money Management,
Inc., a private investment company. Since June 1987, Mr. Phillips has served as
director and President of One Financial Group Incorporated, a financial
consulting company of which he is the majority stockholder.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held four (4) meetings during 1997. Each director
attended or participated in at least 75% of the aggregate of meetings held and
actions taken in 1997 by the Board of Directors.
COMMITTEES OF THE BOARD
The Board of Directors does not have an Audit Committee or a Compensation
Committee, although it intends to establish such committees in the future. The
functions of these committees currently are performed by the Board of Directors
as a whole.
AGREEMENT WITH AMP INCORPORATED
Under an agreement with AMP Incorporated the Company has agreed to
restructure the Board of Directors wherein the number of Directors will be
increased to seven (7), three of whom shall be inside directors (Aslami, De Luca
and Moeller), one (1) of whom shall be an AMP designee, and three (3) shall be
outside directors. AMP has agreed to delay this restructuring and the Company
anticipates that this will occur prior to or concurrent with the Company's next
annual meeting.
DIRECTORS' FEES
During 1997, directors did not receive any compensation for their services
as directors, but were reimbursed for expenses incurred in attending meetings.
3
<PAGE>
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Based solely on a review of the copies of Forms 3 and 4 and amendments
thereto, furnished to the Company pursuant to Section 16a-3(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") during the fiscal year
ended December 31, 1997, and Form 5 and amendments thereto, furnished to the
Company regarding such fiscal year, or written representations from the
Company's executive officers and directors, the Company is not aware of any
failure to file timely reports pursuant to Section 16(a) of the Exchange Act.
1. RATIFICATION OF THE SELECTION OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
The Board of Directors has appointed Deloitte & Touche LLP, independent
certified public accountants, to audit the consolidated financial statements of
the Company and its subsidiaries for 1998. Deloitte & Touche LLP was initially
appointed to audit the Company's financial statements in January 1997 for the
fiscal year ended December 31, 1996.
The Company expects representatives of Deloitte & Touche LLP to attend the
Meeting, to be available to respond to appropriate questions from shareholders,
and to have the opportunity to make a statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FOR 1998.
4
<PAGE>
ADDITIONAL INFORMATION
PERFORMANCE GRAPH
Set forth below is a graph comparing the monthly change in the Company's
cumulative total shareholder return on its Common Stock from January 14, 1997
(the effective date of the Company's initial registration under Section 12 of
the Exchange Act) to December 31, 1997 (as measured by dividing (i) the sum of
(A) the cumulative amount of dividends for the measurement period, assuming
dividend reinvestment, and (B) the excess of the Company's share price at the
end of the period over the price at the beginning of the measurement period, by
(ii) the share price at the beginning of the measurement period), with the
cumulative total shareholder return so calculated of the Russell 2000 Index, and
a group of peer issuers in a line of business similar to the Company during the
same period (the "Peer Group"1).
[GRAPHIC OMITTED]
1 The Peer Group consists of the following companies; Galileo Corporation,
Luxtec Corp., Optelecom, Inc., and SpecTran Corp.
2 Cumulative Total Return assumes $100.00 invested at the close of trading on
January 14, 1997, in FiberCore, Inc., Russell 2000 Index, and the Peer
Group and assumes reinvestment of dividends.
5
<PAGE>
SECURITY OWNERSHIP
The following table sets forth certain information regarding the Common
Stock beneficially owned by (i) each person known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii)
each executive officer and director named in the summary compensation table
below and (iii) all the directors and executive officers of the Company as a
group, at the close of business on September 30, 1998. Unless otherwise
indicated, each of the persons named in the table below as beneficially owning
the shares set forth therein has sole voting power and sole investment power
with respect to such shares.
<TABLE>
<CAPTION>
%
NAME AND ADDRESS(1) AMOUNT OWNED
- ------------------- ------ -----
<S> <C> <C>
Mohd Aslami.................................................... 7,789,948(2)(8) 17.8
Charles De Luca................................................ 4,765,778(3)(8) 10.9
Michael J. Beecher............................................. 174,248(4) 0.4
Hans F.W. Moeller.............................................. 388,235(5) 0.9
Steven Phillips................................................ 964,090(6) 2.2
AMP Incorporated............................................... 6,169,154(7)(8) 14.1
All directors and executive officers as a group (5 persons).... 14,082,299 32.2
</TABLE>
- ----------
(1) The addresses of the persons and entities named in this table are as
follows: Messrs. Aslami, De Luca, Beecher, Moeller, c/o FiberCore, Inc., P.
O. Box 180, 253 Worcester Road, Charlton, MA 01507; Mr. Phillips c/o
Winstar Incorporated, 3 Barker Avenue, White Plains, NY 10601; AMP
Incorporated, 470 Friendship Road, Harrisburg, PA 17105.
(2) Includes 117,482 shares and warrants to purchase 115,220 shares held by Dr.
Aslami's wife, 723,473 shares held by Dr. Aslami's children, 1,587,569,
104,296, and 608,914 shares held respectively by the Ariana Trust,
Children's Trust, and the Kabul Foundation, trusts of which Dr. Aslami's
wife is trustee and of which Dr. Aslami's children are beneficiaries, and
284,860 shares held by the Raja Foundation, a trust of which Dr. Aslami's
wife and Mr. De Luca's wife are trustees and of which various organizations
and family members are beneficiaries. Dr. Aslami disclaims beneficial
ownership of all such shares. Also includes 483,165 currently exercisable
options.
(3) Includes 1,395,097 shares and warrants to purchase 115,220 shares held by
Elizabeth De Luca, Mr. De Luca's wife, 357,715 shares held by Mr. De Luca's
children, 608,914 shares held by the Dawn Foundation, a trust of which Mrs.
De Luca is trustee and of which Mr. De Luca's children are beneficiaries,
and 174,053 shares held by the Raja Foundation, a trust of which Dr.
Aslami's wife and Mr. De Luca's wife are trustees and of which various
organizations and family members are beneficiaries. Mr. De Luca disclaims
beneficial ownership of all shares. Also includes 235,552 currently
exercisable options.
(4) Includes 174,248 options.
(5) Includes 300,000 options.
(6) Includes 132,937 currently exercisable options and warrants issued to One
Financial Group Incorporated, and 27,500 warrants issued to Income Partners
L.P. in which Mr. Phillips holds a fifty percent (50%) interest. Mr.
Phillips is a principal of these companies.
6
<PAGE>
(7) Includes shares into which the AMP Note is convertible at $1.16 per share
and warrants to purchase 1,382,648 shares. (See "Certain Relationships and
Related Transactions - Dealings with AMP").
(8) Under the AMP loan, the Company, Mohd A. Aslami, Charles De Luca, and AMP
entered into a Voting Agreement pursuant to which they agreed to vote
together to elect a slate of directors to the Board of Directors of the
Company. Such slate of directors initially consists of Mohd A. Aslami,
Charles De Luca, Hans Moeller, one nominee of AMP and three outside
directors.
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth, for the Company's last three fiscal years,
the cash salary, bonus and non-cash salary or bonuses earned or paid by the
Company, as well as certain other compensation paid or accrued for those years,
to the Company's President and Chief Executive Officer and to each of the
Company's executive officers whose compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION AWARDS
- ---------------------------------------------------------------------------------------------------------------------------
Name and Principal Position Fiscal Salary Bonus Other Restricted Securities
Year $ $ Annual Stock Underlying
Compensation Award(s) Options/
$ SARs(#)
<S> <C> <C> <C> <C> <C> <C>
Dr. Mohd Aslami 1997 146,500 --- --- 359,752
Chairman, Chief Executive 1996 146,500 --- --- 60,913
Officer & President 1995 146,500 --- --- ---
Charles De Luca (1) 1997 98,398 --- --- 189,502
Executive Vice President 1996 98,398 --- --- 46,050
& Secretary 1995 28,699 --- --- ---
Michael J. Beecher (2) 1997 85,000 --- --- 120,000
Chief Financial Officer 1996 53,708 --- --- 64,248
& Treasurer 1995 --- --- --- ---
Hans Moeller (3) 1997 120,000 --- --- 300,000
Managing Director, 1996 98,596 --- --- 55,193
FiberCore Jena GmbH 1995 7,227 --- --- 33,042
</TABLE>
(1) From September 18, 1995 with the acquisition of ALT.
(2) Started employment on April 15, 1996.
(3) Started employment on October 1, 1995.
7
<PAGE>
OTHER COMPENSATORY ARRANGEMENTS
The Company does not maintain any standard compensation arrangements or
plans for directors.
The Company has a consulting agreement with Mr. Phillips, a director of the
Company, wherein Mr. Phillips provides services as a senior financial advisor.
Mr. Phillips receives a retainer of $60,000 per year payable in monthly
installments of $5,000, based on an hourly rate of $185 per hour. The retainer
is adjusted quarterly based on actual hours of service. The agreement is for one
year from January 1, 1997 and is automatically renewed for one year periods
unless terminated by written notice 90 days prior to the expiration of each
renewal period. For the year ended December 31, 1997, Mr. Phillips' fee was
$45,665.
STOCK OPTION GRANTS
The Board of Directors has, in the past, granted options to purchase Common
Stock to directors, officers and employees of the Company. Options may be
granted in lieu of cash salary, accrued salary, or as additional incentives. The
Company has no formal stock option plan. The Company may adopt a stock option or
similar plan in the future.
The following table sets forth selected option grant information for the
fiscal year ended December 31, 1997 awarded to the executive officers of the
Company. All of such options were deemed to be "non-qualified" options within
the meaning of the Internal Revenue Code of 1986, as amended (the "Code").
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------------------------------------------
Potential Potential
Number of realized values realized values
Securities % of Total at assumed at assumed
Underlying Options/ annual rates of annual rates of
Options/ SARs Granted Exercise stock price stock price
SARs to Employees or base apprec. for apprec. for
Granted in Fiscal price Expiration option term option term
Name (#) Year ($/Share) Date 5%($) 10%($)
- ----------------------- --------------- -------------- ------------ -------------- ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Mohd Aslami 359,752 29% $ 0.82 2002 $ 6,191 $ 84,924
(1)(b)
- ----------------------- --------------- -------------- ------------ -------------- ------------------ ---------------
Charles De Luca 189,502 15% $ 0.82 2002 $ 3,262 $ 44,735
(1)(b)
- ----------------------- --------------- -------------- ------------ -------------- ------------------ ---------------
Michael Beecher 120,000 10% $ 1.58 -- $ 21,752 $ 77,100
(a, c)
- ----------------------- --------------- -------------- ------------ -------------- ------------------ ---------------
Hans Moeller 300,000 24% $ 1.58 -- $ 54,381 $192,751
(a, c)
- ----------------------- --------------- -------------- ------------ -------------- ------------------ ---------------
</TABLE>
(1) The options granted to Dr. Aslami and Mr. De Luca in 1997 were granted in
consideration for their deferral of payment of their salaries and
reimbursable expenses for the period July 1, 1996 through November 30,
1997.
Table
a. The term of options used in the potential realized value calculation is
five years.
b. The market value per share at the date of grant was $0.66.
c. The market value per share at the date of grant was $1.38.
8
<PAGE>
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth information related to options exercised
during 1997 by the Company's President and Chief Executive Officer and by the
Company's other most highly compensated executive officers and the number and
value of options held at December 31, 1997 by such individuals.
<TABLE>
<CAPTION>
- ------------------------- ------------------- -------------- -------------------------------- --------------------------------
Number of Securities Value of unexercised
underlying unexercised in-the-money options/SARs at
Shares acquired Value options/SARs at FY-end (#) FY-end ($)
Name on exercise (#) realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- ------------ ------------------------- --------------------------------
<S> <C> <C> <C> <C>
Dr. Mohd Aslami --- --- 420,665/0 (Note 1)
- ------------------------- ------------------- -------------- -------------------------------- --------------------------------
Charles De Luca --- --- 235,552/0 (Note 1)
- ------------------------- ------------------- -------------- -------------------------------- --------------------------------
Michael J. Beecher 10,000 $34,440 94,248/80,000 (Note 1)
- ------------------------- ------------------- -------------- -------------------------------- --------------------------------
Hans Moeller 88,235 $(6,299) 200,000/100,000 (Note 1)
- ------------------------- ------------------- -------------- -------------------------------- --------------------------------
</TABLE>
Note 1 - At December 31, 1997 the fair value was less than the exercise price.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
DEALINGS WITH TECHMAN
Since 1995, the Company has maintained a working relationship with Techman,
a technology management company headquartered in Massachusetts. Dr. M. Mahmud
Awan, the President and sole shareholder of Techman, is a former director of the
Company. Techman specializes in sales of fiber optic products and
telecommunication systems.
On November 1, 1995, the Company entered into an International Distributor
Agreement with Techman to market the Company's products worldwide. Techman
agreed to receive customary sales commissions in the form of warrants
exercisable into 1,000,000 shares of Common Stock to be issued to Techman for
sales of the Company's products up to $200,000,000. Such shares will be issued
upon receipt of the proceeds of any such sales.
Pursuant to the Techman Share Purchase Agreement dated January 11, 1996,
Techman purchased 734,260 shares of Common Stock for $1,000,000 (approximately
$1.36 per share) and was granted warrants exercisable into 550,696 shares of
Common Stock at $1.63 per share. The warrants expired without exercise in
January, 1998. Additionally, the Company issued an additional 312,061 shares of
Common Stock to Techman on (i) the formation of FOI (a joint venture), in which
the Company holds a 30% ownership interest, and (ii) the completion of a supply
agreement between FOI and the Company. Under the agreement, $500,000 of the
$1,000,000 share purchase price was invested by the Company in FOI as an
additional capital contribution. Due to a delay in the construction of the
manufacturing plant, in 1997 the supply agreement was canceled and the 312,061
shares were canceled.
In September 1997, the Company borrowed $150,000 from Techman International
Corporation. The note bears interest at prime plus 1% per year and matures on
September 17, 1998. In conjunction with the note, Techman was granted warrants
to purchase 69,132 common shares of the Company at an exercise price of $0.625
per share.
In April 1997, the Company borrowed $250,000 from Techman under a note
maturing in 2000. The annual interest rate on the note is the prime rate plus
1%, adjustable quarterly and payable quarterly. In conjunction with the note,
Techman was granted warrants to purchase 115,220 common shares of the Company at
an exercise price of $0.78 per share.
9
<PAGE>
Discussions are being held between the Company and Techman with respect to
offsetting the Techman notes described above against the Company's investment in
FOI.
The Company maintained a consulting agreement with Techman under which
Techman provided administration, marketing, technical and personnel advisory
services to the Company. The agreement was on a month to month basis at a
monthly fee of $4,500 and is terminable at any time by the Company. For the
years ended December 31, 1997, 1996 and 1995, Techman was paid $54,000, $36,000
and $21,000, respectively, for such services.
DEALINGS WITH AMP
In April 1995, the Company issued the AMP Note, which is a ten year
$5,000,000 convertible note, to AMP Incorporated, a company listed on the New
York Stock Exchange and a manufacturer of electrical and optical connection
devices, systems and other equipment including fiber optic cable. Principal of
the AMP Note plus accrued interest at a rate of LIBOR plus one percent may be
converted into Common Stock through April 17, 2005. Until April 17, 2000, the
conversion price is $1.16 per share; thereafter the conversion price is equal to
the price per share paid by a third party investor in the private sale of Common
Stock immediately prior to such conversion. The AMP Note is subject to
prepayment on demand in the event the Company is the issuer of securities to be
sold by the Company under an effective registration statement.
In July 1996, AMP entered into a five year supply contract (renewable at
AMP's option for an additional five year period) with the Company whereby the
Company will supply AMP with at least 50% of AMP's future glass optical fiber
needs. On November 27, 1996 the Company obtained an additional $3,000,000 loan
at an interest rate of prime plus 1%, adjustable on the first business day of
each calendar quarter, from AMP to fund the expansion of the Jena Facility, in
exchange for a ten year note and $2,000,000 of common stock purchase warrants
exercisable for up to 1,382,648 shares of Common Stock at $1.45 and expiring on
November 27, 2001. AMP also converted $3,000,000 of principal plus $540,985 of
accrued interest on the AMP Note into 3,058,833 shares of Common Stock. In
connection with the new loan from AMP, the Company agreed to issue AMP
additional shares of Common Stock in the event the Company's share price does
not exceed $2.17 for 30 consecutive trading days by November 27, 1998. The
issuance of additional shares under the new AMP loan would have a dilutive
effect on the Company's other shareholders and could adversely affect the market
price of the Common Stock.
LOANS
On July 31, 1996, the Company borrowed $500,000 under two loan agreements
from the spouses of Dr. Aslami and Mr. De Luca. The loans are in the amount of
$250,000 each and bear interest at the prime rate plus one percent (currently
9.25%), and are due on July 31, 1999. In conjunction with the loans each lender
received warrants to purchase 115,220 shares of Common Stock at the rate of
$1.81 per share. The warrants expire on July 31, 2001.
Also, during the year the Company borrowed $50,000 from Dr. Aslami. The
interest rate is prime plus 1% and the note matures on September 17, 1998. In
conjunction with the note the lender was issued warrants to purchase 62,500
common shares of the Company at an exercise price of $0.6875 per share.
In September and November, 1997 the Company also borrowed $37,500 under a
note with interest at prime plus 1%. The note matures on the earlier of the
receipt of proceeds from any new financing received by the Company or September
30, 1998. In conjunction with the notes the lender was granted warrants to
purchase 27,500 common shares of the Company at an exercise price of $0.6875 per
share. Mr. Steve Phillips, a director of the Company, is a principal of the
lender. In December, 1997 the Company repaid $12,500 of these notes.
CONSULTING
See "Other Compensatory Arrangements" above for a discussion of the
consulting arrangement between the Company and Mr. Phillips.
10
<PAGE>
The following report of the Board of Directors in the next section shall
not be deemed to be "soliciting material" or to be "filed" with the Securities
and Exchange Commission (the "Commission") or subject to Regulations 14A or 14C
of the Commission or to the liabilities of Section 18 of the Exchange Act and
shall not be deemed to be incorporated by reference into any filing under the
Securities Act of 1933 or the Exchange Act, notwithstanding any general
incorporation by reference of this Proxy Statement into any other document.
EXECUTIVE COMPENSATION
The Company has not, as yet, adopted a formal executive compensation
program, although it intends to adopt such program. It is expected that such
plan will reflect the following executive compensation philosophy and contain
the compensation components as described below. Such program may contain all or
some of the components and will be subject to change by the Board of Directors.
COMPENSATION PHILOSOPHY
The Company's mission is to be a significant provider of optical fiber and
optical fiber preforms in the markets it serves. To support this and other
strategic objectives as approved by the Board of Directors and to provide
adequate returns to shareholders, the Company must compete for, attract,
develop, motivate and retain top quality executive talent at the corporate
office and operating business units of the Company during periods of both
favorable and unfavorable world-wide business conditions.
The Company's executive compensation program is a critical management tool
in achieving this goal. "Pay for performance" is the underlying philosophy
for the Company's executive compensation program. The program is designed
to link executive pay to corporate performance, including share price,
recognizing that there is not always a direct and short-term correlation
between executive performance and share price. To align shareholder
interests and executive rewards, significant portions of each executive's
compensation will represent "at risk" pay opportunities related to
accomplishment of specific business goals.
The program will be designed and administered to:
o provide annual and longer term incentives that help focus each
executive's attention on approved corporate business goals the
attainment of which, in the judgment of the Board of Directors, should
increase long-term shareholder value;
o link "at risk" pay with appropriate measurable quantitative and
qualitative achievements against approved performance parameters;
o reward individual and team achievements that contribute to the
attainment of the Company's business goals; and
o provide a balance of total compensation opportunities, including
salary, bonus, and longer term cash and non-cash and equity
incentives, that are competitive with similarly situated companies and
reflective of the Company's performance.
11
<PAGE>
In seeking to link executive pay to corporate performance, the Board
believes that the most appropriate measure of corporate performance is the
increase in long-term shareholder value, which involves improving such
fundamental quantitative performance measures as revenue, net income, cash flow,
operating margins, earnings per share and return on shareholders' equity. The
Board may also consider qualitative corporate and individual factors which it
believes bear on increasing the long-term value of the Company to its
shareholders. These include (i) the development of competitive advantages, (ii)
the ability to deal effectively with the complexity and globalization of the
Company's businesses, (iii) success in developing business strategies, managing
costs and improving the quality of the Company's products and services as well
as customer satisfaction, (iv) the general performance of individual job
responsibilities, and (v) the introduction of new products, new patents and
other innovations.
COMPONENTS OF EXECUTIVE COMPENSATION PROGRAM
The Company's executive compensation program will consist of (i) an annual
salary, (ii) an annual bonus, (iii) issuance of restricted stock, and (iv) a
long-term incentive represented by stock options. As explained below, restricted
stock and stock options serve to link executive pay to corporate performance,
since the attainment of these awards depends upon meeting the quantitative and,
if applicable, qualitative performance goals which serve to increase long-term
shareholder value.
Salary and bonus. In December of each year, the Board will set the annual
salary for the following year of each executive officer, not subject to an
employment contract, and establish a potential bonus opportunity executives
(even those subject to employment contracts) may earn for each of the
quantitative and, if applicable, qualitative performance goals established by
the Committee. The Board intends to set these targets in the first half of each
year after a detailed review by the Board of the Company's annual operating
budget.
Stock Options and Restricted Stock. The longer-term component of the
Company's executive compensation program will consist of qualified and
non-qualified stock option and restricted stock grants. The options generally
permit the option holder to buy the number of shares of Common Stock covered by
the option (an "option exercise") at a price equal to or greater than
eighty-five percent (85%) of the market price of the stock at the time of grant.
Thus, the options generally gain value only to the extent the stock price
exceeds the option exercise price during the life of the option. Generally a
portion of the options vest over a period of time and expire no later than ten
years, and in many cases five years after grant. In addition, in appropriate
circumstances, the Company will award restricted stock to executives. Executives
will generally be subject to limitations in selling the restricted stock
immediately, and therefore will have the incentive to increase shareholder
value.
BASIS OF 1997 COMPENSATION
In 1997, the Company's executive compensation was based on negotiations
with each individual, consistent with what the Board believes was reasonable
given the circumstances of the Company at that time. No bonuses were awarded for
the year 1997.
BASIS OF 1998 COMPENSATION
As indicated in the Company's executive compensation philosophy, a major
factor in the Board's compensation decisions is the competitive marketplace for
senior executives. In setting competitive compensation levels, the Company will
compare itself to a self-selected group of companies of comparable size (a peer
group), market capitalization, technological and marketing capabilities,
performance and global presence with which the Company competes for executives.
12
<PAGE>
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors knows of no
business to be presented at the Meeting other than as set forth in this Proxy
Statement. If other matters properly come before the meeting, the persons named
as proxies will vote on such matters in their discretion.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's 1999
annual meeting of shareholders must be received by the Secretary, FiberCore,
Inc., no later than June 15, 1999 in order to be considered for inclusion in the
Company's proxy statement and form of proxy relating to such meeting. Moreover,
with regard to any proposal by a stockholder not seeking to have such proposal
included in the proxy statement but seeking to have such proposal considered at
the 1999 Annual Meeting, if such stockholder fails to notify the Company in the
manner set forth above of such proposal no later than September 1, 1999, then
the persons appointed as proxies may exercise their discretionary voting
authority if the proposal is considered at the 1999 Annual Meeting
notwithstanding that stockholders have not been advised of the proposal in the
proxy statement for the 1999 Annual Meeting. Any proposals submitted by
stockholders must comply in all respects with (i) the rules and regulations of
the Securities and Exchange Commission, (ii) the provisions of the Company's
Certificate of Incorporation and Bylaws, and (iii) Nevada law.
ANNUAL REPORT
The Company's 1997 Annual Report is concurrently being mailed to
shareholders. The Annual Report contains consolidated financial statements of
the Company and its subsidiaries and the report thereon of Deloitte & Touche
LLP, Independent Certified Public Accountants.
By Order of the Board of Directors
/s/ Charles De Luca
Charles De Luca
Secretary
Dated: October 15, 1998 ____________________________
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, SHAREHOLDERS ARE
URGED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE
ENCLOSED ENVELOPE.
13
<PAGE>
PROXY
FIBERCORE, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints each of Mohd A. Aslami and Charles De Luca (with full
power to act without the other and each with full power to appoint his
substitute) as the undersigned's Proxies to vote all shares of Common Stock of
the undersigned in FiberCore, Inc. (the "Company"), a Nevada corporation, which
the undersigned would be entitled to vote at the Annual Meeting of Stockholders
of the Company to be held at the Ramada Inn, 624 Southbridge Street, Auburn,
Massachusetts, 01501, on November 17, 1998, at 10:00 a.m., Eastern Standard Time
or at any adjournments thereof as follows:
1. PROPOSAL TO RATIFY SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 1998.
2. In their discretion, upon such other business as may properly come before
the meeting or any adjournments thereof.
Place "X" Only In One Box
1. Appointment of Accountants
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The shares of Common Stock represented by this Proxy will be voted in accordance
with the foregoing instructions. In the absence of any instructions, such shares
will be voted FOR the proposal in item 1.
The undersigned hereby revokes any Proxy or Proxies to vote shares of Common
Stock of the Company heretofore given by the undersigned.
Please date, sign exactly as name appears on this Proxy, and return in the
enclosed envelope. When signing as guardian, executor, administrator, attorney,
trustee, custodian, or in any similar capacity, please give full title. If a
corporation, sign in full corporate name by president or other authorized
officer, giving his/her title, and affix corporate seal. If a partnership, sign
in partnership name by authorized person. In the case of joint ownership, each
joint owner must sign.
- ----------------------------------
Date
- ----------------------------------
Signature
- ----------------------------------
Signature if held jointly
