<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / 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 Section 240.14a-11-C- or Section 240.14a-12
AMERILINK CORPORATION
(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: .
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2) Aggregate number of securities to which transaction applies: .
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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: .
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/ / 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: .
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2) Form Schedule or Registration Statement No.: .
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3) Filing Party: .
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4) Date Filed: .
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<PAGE>
AMERILINK CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 19, 1997
Notice is hereby given that the Annual Meeting of Shareholders of AmeriLink
Corporation will be held at The Worthington Inn, located at 649 High Street,
Worthington, Ohio, on Tuesday, August 19, 1997, at 11:00 a.m. (local time), for
the following purposes:
1. to elect three directors, each to serve until the 1999 Annual Meeting
and until their successors are duly elected and qualified; and
2. to transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only shareholders of record at the close of business on June 20, 1997 will
be entitled to notice of and to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors.
LARRY R. LINHART
Chairman of the Board
of Directors, President and
Chief Executive Officer
July 15, 1997
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
AMERILINK CORPORATION
1900 E. Dublin-Granville Road
Columbus, Ohio 43229
PROXY STATEMENT
GENERAL INFORMATION
AMERILINK CORPORATION (the "Corporation") is furnishing this Proxy
Statement to its shareholders in connection with the solicitation of proxies for
use in voting at the annual meeting of shareholders to be held on Tuesday,
August 19, 1997 (the "Annual Meeting"). The enclosed proxy is solicited by the
Board of Directors of the Corporation. This Proxy Statement, together with the
Corporation's Annual Report to Shareholders for the fiscal year ended March 30,
1997 ("fiscal 1997"), is being mailed on or about July 15, 1997.
The close of business on June 20, 1997 has been fixed as the date of record
for those shareholders entitled to vote at the Annual Meeting. The stock
transfer books of the Corporation will not be closed. As of June 20, 1997, the
Corporation had outstanding and entitled to vote 3,481,580 common shares without
par value ("Common Shares"), each of which is entitled to one vote. The
Corporation has no other class of capital stock outstanding.
The presence of holders of a majority of the outstanding Common Shares in
person or by proxy is necessary to constitute a quorum of shareholders for all
matters to be considered at the Annual Meeting.
Votes, whether in person or by proxy, will be counted and tabulated by
inspectors of election appointed by the Board of Directors of the Corporation.
With respect to all matters to be considered, abstentions and broker non-votes
will not be counted as votes either "for" or "against" any matters coming before
the Annual Meeting. Under Ohio law, the nominees for election as Directors at
the Annual Meeting receiving the greatest number of votes shall be elected.
Any shareholder giving the enclosed proxy has the power to revoke it at any
time before it is voted if notice of revocation is given to the Secretary of the
Corporation in writing or at the Annual Meeting. The shares represented by
<PAGE>
the enclosed proxy will be voted as specified by the shareholders. If no choice
is specified, the proxy will be voted for the election as Directors of the
nominees named herein.
The cost of soliciting proxies and preparing the proxy materials will be
borne by the Corporation. In addition, the Corporation will request securities
brokers, custodians, nominees, and fiduciaries to forward solicitation material
to the beneficial owners of Common Shares held of record and will reimburse them
for their reasonable out-of-pocket expenses in forwarding such solicitation
material. Proxies may be solicited personally or by telephone or telegram by
directors, officers and employees of the Corporation without additional
compensation to them.
NOMINATION AND ELECTION OF DIRECTORS
The number of Directors has been fixed by the Board of Directors of the
Corporation at six. The Board of Directors currently is divided into two
classes of three members each. The members of the two classes are elected to
serve for staggered terms of two years. As a result of the voluntary
resignation in fiscal 1997 of Gerard B. Moersdorf, Jr. as a Director, a vacancy
occurred on the Board of Directors during part of fiscal 1997. Such vacancy
will be filled at the Annual Meeting.
At the Annual Meeting, three Directors will be elected, each to hold office
for a term of two years and until his successor is elected and qualified. Larry
R. Linhart, Robert L. Powelson and Richard W. Rubenstein are nominees
(collectively, the "Nominees") for election as Directors at the Annual Meeting,
each to hold office for a term of two years until the Annual Meeting of
Shareholders to be held in 1999. The terms of E. Len Gibson, William H. Largent
and George R. Manser (collectively, the "Continuing Directors") expire in 1998.
All the Nominees have indicated a willingness to stand for election and to
serve if elected. It is intended that the shares represented by the enclosed
proxy will be voted for the election of the Nominees. Although it is
anticipated that each Nominee will be available to serve as a Director, should
any nominee be unavailable to serve, the proxies may be voted by the proxy
holders in their discretion for another person designated by the Board of
Directors.
Listed below are the names of each Nominee and Continuing Director, their
ages, the year in which each first became a Director, their principal
occupations during the past five years and other directorships in companies with
a class of equity securities registered pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or otherwise subject to its periodic
reporting requirements. See "Security Ownership of Certain Beneficial Owners
and Management" for information regarding such persons' holdings of equity
securities of the Corporation.
<TABLE>
<CAPTION>
Director
Name Age Since Principal Occupation for the Past Five Years
---- --- -------- --------------------------------------------
<S> <C> <C> <C>
Larry R. Linhart(1) 51 1984(2) Chairman of the Board of Directors, President and Chief Executive
Officer of the Corporation since 1994; President, Treasurer and
Chief Executive Officer of the Operating Company since 1986.
E. Len Gibson(1) 47 1981(2) Co-Founder of the Operating Company; Consultant to the Operating
Company from 1987 through 1994.
Robert L. Powelson(1) 55 1981(2) Secretary of the Corporation since 1994; Consultant to the
Operating Company from 1987 through 1994; Co-Founder of the
Operating Company.
William H. Largent 40 1994 Senior Vice President of Operations and Chief Financial Officer of
Applied Innovation Inc. since May, 1997; Chief Financial Officer
and Director of Metatec Corporation, 1993 to May, 1997; President
of Liebert Capital Management Corporation from 1990 to 1993.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Richard W. Rubenstein, Esq. (3) 53 N/A Director of United Retail Group, Inc.; Partner of Squire, Sanders &
Dempsey L.L.P. since 1994; Partner of Schwartz, Kelm, Warren &
Rubenstein from before 1992 until 1994.
George R. Manser 65 1994 Chairman, Uniglobe Travel (Capital Cities), Inc. and Director of
Cardinal Health, Inc., State Auto Financial Corp., Checkfree Corp.,
Hallmark Financial Services, Inc., and Advisory Director to
J.C. Bradford & Company.
</TABLE>
- -----------------------
(1) Messrs. Linhart, Powelson and Gibson are parties to a certain Shareholders'
Agreement pursuant to which they have agreed to cause each other to be
elected as Directors until August 19, 2004. See "Nomination and Election
of Directors -- Shareholders' Agreement."
(2) Year shown represents the year in which the named Director first became a
Director of AmeriLink Corp., the primary operating subsidiary of the
Corporation (the "Operating Company"). The named Director, along with all
of the other incumbent Directors of the Corporation, became a Director of
the Corporation in 1994 in connection with the formation of the
Corporation, the reorganization of the Operating Company as a wholly-owned
subsidiary of the Corporation and the initial public offering of the
Corporation's Common Shares.
(3) Mr. Rubenstein is a partner of a law firm which the Corporation has
retained from time to time during the last fiscal year and proposes to
retain during the current year.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
A total of four meetings of the Directors of the Corporation were held
during fiscal 1997. Each of the directors attended at least 75% of the total
number of meetings of the Directors, except for Mr. Gibson.
The Board of Directors has an Audit Committee, a Compensation Committee and
a Nominating Committee.
AUDIT COMMITTEE. The Audit Committee, which consists of Messrs. Largent
(committee chair), Manser and Powelson, is charged with the responsibility of
reviewing such financial information (both external and internal) about the
Corporation and its subsidiaries, so as to assure (i) that the overall audit
coverage of the Corporation and its subsidiaries is satisfactory and appropriate
to protect the shareholders from undue risks and (ii) that an adequate system of
internal financial control has been implemented throughout the Corporation and
is being effectively followed. Mr. Moersdorf was a member of the Audit
Committee prior to his resignation as a Director. The Audit Committee held two
meetings during fiscal 1997. All members were in attendance at each meeting.
COMPENSATION COMMITTEE. The Compensation Committee, which consists of
Messrs. Linhart (committee chair), Powelson and Manser, considers and formulates
recommendations to the Board with respect to all aspects of compensation to be
paid to the executive officers of the Company (subject to the provisions of the
applicable employment agreements), undertakes such evaluations and makes such
reports as are required by then applicable rules of the Securities and Exchange
Commission, and performs and exercises such other duties and powers as shall
from time to time be designated by action of the Board of Directors. The
Compensation Committee held three meetings during fiscal 1997. All members were
in attendance at each meeting. See "Report of Compensation Committee."
NOMINATING COMMITTEE. The Nominating Committee, which currently consists
of Messrs. Linhart (committee chair) and Powelson (a vacancy on such committee
having been created as a result of Mr. Moersdorf's voluntary resignation as a
Director), recommends to the Board of Directors nominees for election or
reelection as directors. The Nominating Committee held one meeting during
fiscal 1997 at which all members were in attendance. The Nominating Committee
will consider nominees recommended by shareholders as set forth hereinafter
under "Shareholder Proposals."
-3-
<PAGE>
SHAREHOLDERS' AGREEMENT
Messrs. Gibson, Powelson and Linhart (collectively, the "Principal
Shareholders") and the Corporation have entered into a Shareholders' Agreement
dated as of August 19, 1994 (the "Shareholders' Agreement"). The Shareholders'
Agreement provides that the Principal Shareholders each (for so long as he owns
at least 100,000 Common Shares) shall vote all Common Shares owned by him in
favor of the election or removal of directors such that, among other things:
(i) the Board of Directors of the Corporation shall initially consist of the
Principal Shareholders and three persons, who are not affiliates (as defined in
the Shareholders' Agreement) of any of the Principal Shareholders, named by the
Nominating Committee and approved by the Board of Directors ("Public
Directors"); (ii) until the tenth anniversary of the date of the Shareholders'
Agreement, the Principal Shareholders shall nominate or cause the Board of
Directors to nominate and recommend to the shareholders as proposed members of
the Board of Directors, each of the Principal Shareholders and such number of
Public Directors as are necessary to fill any vacancies on the Board of
Directors; and (iii) the number of directors constituting the board of directors
of each subsidiary of the Corporation shall be fixed at three and such directors
shall include Messrs. Linhart and Powelson and a third individual selected by
them.
COMPENSATION OF DIRECTORS
In connection with the consummation of the Corporation's initial public
offering of its Common Shares in fiscal 1995, the Corporation, pursuant to its
1994 Stock Incentive Plan, granted to each non-employee Director an option to
purchase 1,875 Common Shares at $8.00 per share. The Corporation's 1994 Stock
Incentive Plan provides that beginning in fiscal 1996, the Corporation shall
grant to each non-employee Director on the date of each year's annual meeting of
shareholders an option to purchase that number of Common Shares equal to the
lesser of (i) 2,500, and (ii) the quotient derived from dividing $15,000 by the
fair market value of one Common Share on the date the option is granted. Each
such option vests or will vest over a four-year period and has or will have an
exercise price equal to the market price at the time of grant. In accordance
with such provisions of the 1994 Stock Incentive Plan, the Corporation granted
to each non-employee Director on August 20, 1996 options to purchase 1,936
Common Shares at $7.75 per share. In addition, on February 4, 1997, the
Corporation granted 1,500 Common Shares each to William H. Largent and George R.
Manser (or a total of 3,000 Common Shares), as awards of restricted stock,
subject to the condition that such restricted stock awards shall each become
exercisable as to 500 Common Shares on each of the next three anniversaries of
the grant date, except that if the grantee shall cease to be a Director at any
time, any unvested portion of such restricted stock awards shall be subject to
forfeiture, and subject to certain other terms and conditions contained in
certain Restricted Stock Award Agreements between the Corporation and each such
grantee. Non-employee directors also receive reimbursement for travel expenses
incurred in connection with attending meetings. Directors who are employees do
not receive any separate compensation for their services as directors. The
Corporation has agreed to provide health insurance benefits to Messrs. Powelson
and Gibson on the same terms as provided to all other participants in the
Corporation's health care plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of Common Shares as of June 1, 1997, by each person known by the
Corporation to own beneficially more than five percent of the Corporation's
outstanding Common Shares, by each Nominee and Continuing Director, by each
executive officer named in the Summary Compensation table contained in
"Executive Compensation," and by all Directors and executive officers as a
group. As of June 1, 1997, there were 3,481,580 Common Shares issued and
outstanding and an aggregate of 449,628 Common Shares subject to options
exercisable within 60 days thereafter. Except as otherwise noted, each person
named in the table has sole voting and investment power with respect to all
shares shown as beneficially owned by him.
-4-
<PAGE>
Percent of
Shares
Name and Address of Shares Beneficially Beneficially
Beneficial Owner Owned at June 1, 1997 Owned
------------------- --------------------- ------------
Larry R. Linhart 800,728 (1) 20.7%
Robert L. Powelson 987,433 (2) 28.4%
E. Len Gibson 892,433 (2) 25.6%
Joseph L. Govern 40,500 (3) 1.1%
William H. Largent 3,907 (2)(4) *
Richard W. Rubenstein, Esq. 200 *
George R. Manser 9,907 (2)(4) *
All Directors and Executive 2,741,658 (1)(2) 70.1%
Officers as a group (9 Persons) (3)(4)
- -----------------------
* Represents less than 1%.
(1) Share amount shown includes the following exercisable options to purchase
380,000 Common Shares: (i) exercisable options to purchase 360,000 Common
Shares pursuant to the 1987 Options and the 1991 Options and (ii)
exercisable options to purchase 20,000 Common Shares, representing 40% of
the 50,000 Common Shares subject to the options granted in fiscal 1995 to
Mr. Linhart pursuant to his employment agreement. See "Executive
Compensation -- Stock Option Exercises and Holdings" and "Executive
Compensation -- Employment Agreements."
(2) Share amount shown includes exercisable options to purchase 1,407 Common
Shares, representing the exercisable portion of the 5,686 Common Shares
subject to options granted to each non-employee director of the
Corporation. See "Compensation of Directors."
(3) Share amount shown includes exercisable options to purchase 40,500 Common
Shares, representing 50% of the 81,000 Common Shares subject to the options
granted in fiscal 1995 to Mr. Govern. See "Executive Compensation -- Stock
Option Exercises and Holdings."
(4) Share amount shown includes 1,500 Common Shares granted to each of William
H. Largent and George R. Manser in fiscal 1997 as awards of restricted
stock. See "Compensation of Directors."
SHAREHOLDERS' AGREEMENT
Pursuant to the Shareholders' Agreement (see "Nomination and Election of
Directors -- Shareholders' Agreement"), the Principal Shareholders each have the
right ("Demand Registration Right") on one occasion to require the Corporation
to prepare and file a registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to an underwritten public
offering of Common Shares that he holds ("Demand Registration"). The
Corporation is required to bear the expenses (except for underwriting discounts
and underwriting commissions and fees and expenses of counsel to the selling
shareholders) of Demand Registrations. Further, under the terms of the
Shareholders' Agreement, in the event that the Corporation proposes to register
any of its securities under the Securities Act for its own account (subject to
certain exceptions), or pursuant to the exercise of a Demand Registration Right,
the other Principal Shareholders are entitled to include shares in such
registration, subject to the right of the underwriters of any such offering to
limit the number of shares included in such registration.
Pursuant to the Shareholders' Agreement, the Principal Shareholders have
agreed that they will not sell or transfer any of their Common Shares except (i)
pursuant to a Demand Registration Right, (ii) to the Corporation, (iii) pursuant
to Rule 144 promulgated under the Securities Act, (iv) to heirs or family
members who agree to be bound by
-5-
<PAGE>
the Shareholders' Agreement, (v) by bona fide gift to a charity or (vi) by
pledge to secure indebtedness to a financial institution. The Shareholders'
Agreement contains certain non-competition and non-solicitation provisions which
prohibit each of the Principal Shareholders from engaging in certain conduct
during certain restricted periods and for three years thereafter. The
restricted period applicable to Mr. Linhart is the term of his employment with
the Corporation and the restricted period applicable to Messrs. Gibson and
Powelson is the period during which he is a director or the owner of not less
than Common Shares possessing not less than 10% of the combined voting power of
all voting securities of the Corporation.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's Directors and executive officers, and persons who own more than
ten percent of a registered class of the Company's equity securities, to file
initial statements of beneficial ownership (Form 3), and statements of changes
in beneficial ownership (Forms 4 and 5), of Common Shares of the Corporation
with the Securities and Exchange Commission. Executive officers, Directors and
greater than ten-percent shareholders are required to furnish the Corporation
with copies of all such forms they file.
To the Corporation's knowledge, based solely on its review of the copies of
such forms received by it, or written representations from certain reporting
persons that no additional forms were required, all filing requirements
applicable to its executive officers, Directors and greater than ten-percent
shareholders were complied with in fiscal 1997, except with respect to E. Len
Gibson who inadvertently failed to file timely a Form 4 relating to his sale on
January 30, 1997 of 5,000 Common Shares at a price of $7.25 per share.
EXECUTIVE OFFICERS
The following table and biographies set forth information concerning the
executive officers of the Corporation, who are elected by the Board of
Directors:
Name Age Position
---- --- --------
Larry R. Linhart 51 Chairman of the Board of
Directors, President and Chief
Executive Officer
Joseph L. Govern 39 Vice President - Operations
Robert B. Horn 48 Vice President - Human Resources
James W. Brittan 38 Treasurer and Vice President -
Finance
Robert L. Powelson 55 Secretary
- -----------------------
LARRY R. LINHART is the Chairman of the Board of Directors, President and
Chief Executive Officer of the Corporation. Mr. Linhart has been the President,
Treasurer and Chief Executive Officer of the Operating Company since 1986 and a
Director of the Operating Company since 1984. From 1984 to 1986, Mr. Linhart
served as Executive Vice President and General Counsel of the Operating Company.
Mr. Linhart was previously a partner in the Columbus law firm of Murphey, Young
and Smith (currently, Squire, Sanders & Dempsey), which he joined in 1971.
JOSEPH L. GOVERN is the Vice President - Operations of the Corporation.
Mr. Govern has been Vice President - Operations of the Operating Company since
1992. From 1991 to 1992, Mr. Govern served as the Operating Company's Vice
President of Finance and Director of Operations. From 1986 to 1991, Mr. Govern
was the Vice President of Finance and Administration for the Operating Company.
He is a Certified Public Accountant and from 1980 through 1985 was employed by
Coopers & Lybrand.
ROBERT B. HORN is the Vice President - Human Resources of the Corporation.
Mr. Horn was hired as Vice President - Human Resources in February, 1997. From
1993 to 1997, Mr. Horn was the Vice President of Human Resources of Damon's
International, Inc., a 110 unit casual dining restaurant chain. From 1985 to
1993, Mr. Horn owned and operated five restaurants, co-owned and operated an
international meeting planning firm and served as a management development
consultant to various small companies and trade associations. From 1974 to
1985, Mr. Horn was employed by RAX Restaurants, Inc. and served as Executive
Vice President - Operations.
-6-
<PAGE>
JAMES W. BRITTAN is the Treasurer and Vice President - Finance of the
Corporation. Mr. Brittan has been Treasurer and Vice President - Finance of the
Operating Company since May, 1994. Mr. Brittan served as the Operating
Company's Controller from 1986 to May, 1994. From 1984 to 1986, Mr. Brittan was
employed by The Limited, Inc., a national fashion retailer, as Senior
Accountant. Mr. Brittan is a Certified Public Accountant and from 1981 through
1984 was employed by Coopers & Lybrand.
ROBERT L. POWELSON is a director of the Company. Mr. Powelson has been a
director of the Operating Company since 1981 and was a co-founder of the
Operating Company with E. Len Gibson. From 1987 to 1994, Mr. Powelson has
served as a consultant for the Operating Company.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information concerning the annual
and long-term compensation of the chief executive officer of the Corporation and
the one other executive officer (together, the "Named Executives"), whose total
salary and bonus for the last completed fiscal year exceeded $100,000.
<TABLE>
<CAPTION>
Annual All Other Stock All
Name and Fiscal Compensation Compensation Options Other
Principal Position Year Salary Bonus #Granted Comp.(1)
------------------ ------ ------------ ------------ -------- --------
<S> <C> <C> <C> <C> <C>
Larry R. Linhart, 1997 $361,818 $ 105,089 -0- $1,365
President and Chief 1996 352,306 -0- -0- 2,250
Executive Officer 1995 339,570 53,724 50,000 1,577
Joseph L. Govern, Vice 1997 $105,000 $ 37,991 -0- $1,718
President- Operations 1996 100,000 -0- -0- 1,680
1995 87,892 31,000 81,000 2,785
</TABLE>
-----------------------
(1) Includes the Named Executive's share of the Operating Company's
contribution under the Operating Company's 401(k) plan and, in the
case of Mr. Govern's fiscal 1997 and 1996 compensation, $705 earned
in each such year under the Operating Company's Phantom Stock Plan.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
During fiscal 1997, the Corporation did not grant any options to the Named
Executives.
-7-
<PAGE>
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information concerning the value of
unexercised stock options held as of March 30, 1997 by the Named Executives. No
options were exercised by such executive officers during fiscal 1997.
<TABLE>
<CAPTION>
Value of Unexercised
Unexercised In-The-Money Options
Name and Principal Position Options at Fiscal Year End at Fiscal Year End (1)
--------------------------- -------------------------- ----------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Larry R. Linhart,
President and Chief 380,000 30,000 $303,750 - 0 -
Executive Officer
Joseph L. Govern,
Vice President - - 0 - 81,000 - 0 - $126,360
Operations
</TABLE>
- -----------------------
(1) Amount shown represents the difference between the fair market value of the
Common Shares underlying the options based on the closing price of the
Common Shares of $6.25 on March 27, 1997, the last trading day prior to the
end of fiscal 1997, and the exercise price of the options.
LARRY R. LINHART. Prior to the reorganization and recapitalization of the
Corporation in August, 1994 (the "Recapitalization"), Messrs. Powelson and
Gibson each granted to Mr. Linhart options to purchase Common Shares of the
Operating Company owned by them (the "1987 and 1991 Stock Options"). The terms
of the 1987 and 1991 Stock Options were originally set forth in a certain Stock
Purchase and Close Corporation Agreement dated January 15, 1987, as amended,
among the Operating Company and the Principal Shareholders (the "Stock Purchase
Agreement"). In connection with the Recapitalization, the Stock Purchase
Agreement was canceled and Messrs. Powelson and Gibson each transferred to a
newly-formed Ohio corporation specifically formed to implement the
Recapitalization ("Interim Holding Company") all of their Common Shares of the
Operating Company, including the shares subject to the 1987 and 1991 Stock
Options. Interim Holding Company, in turn, assumed the obligations of Messrs.
Powelson and Gibson under the 1987 and 1991 Stock Options and, pursuant to the
merger of Interim Holding Company with and into the Corporation, the Corporation
assumed and agreed to perform such obligations. In connection therewith, the
Corporation and Mr. Linhart entered into a restated option agreement pursuant to
which the Corporation granted Mr. Linhart the option to purchase from the
Corporation 135,000 Common Shares for a purchase price of $4.00 per share (the
"1987 Options") and 225,000 Common Shares for a purchase price of $6.35 per
share (the "1991 Options"). The terms and conditions of the restated option
agreement are substantially the same as those contained in the Stock Purchase
Agreement. The 1987 Options are effective throughout the term of Mr. Linhart's
employment and the 1991 Options shall remain effective until the later of the
termination of Mr. Linhart's employment or, in the event Mr. Linhart's
employment is terminated by his death, one year after Mr. Linhart's death. See
"Executive Compensation -- Employment Agreements."
JOSEPH L. GOVERN. The Operating Company granted, effective as of May 1,
1994, Mr. Govern the option to purchase from the Operating Company an amount of
its Common Shares, at a price per share, which, upon consummation of the
Recapitalization, was converted to an option to purchase 81,000 Common Shares at
a price of $4.69 per Common Share. Options to purchase fifty percent of the
shares became exercisable on April 1, 1997 and the remaining options will become
exercisable, on a cumulative basis, at the rate of 10% per year commencing on
April 1, 1998.
EMPLOYMENT AGREEMENTS
LARRY R. LINHART. Larry R. Linhart has entered into an employment
agreement with the Corporation pursuant to which he has agreed to serve as
Chairman of the Board of Directors, President and Chief Executive Officer of the
Corporation for five years with automatic three-year extensions thereafter
unless terminated by either party. Mr. Linhart receives a base annual salary
which is subject to annual cost of living adjustments. Mr. Linhart's base
annual salary for fiscal 1997 was $361,818. Mr. Linhart also receives incentive
compensation equal to 5% of annual operating income (excluding Mr. Linhart's
compensation and any expense related to the exercise by or grant to Directors or
employees of
-8-
<PAGE>
stock options) in excess of an established amount (the "Target Amount") (in
fiscal 1997, the Target Amount was $1,678,096), which is subject to annual
adjustments for inflation; provided, however, that Mr. Linhart's incentive
compensation for any fiscal year can not exceed an established amount which is
subject to adjustment based upon inflation (for fiscal 1997, such amount was
$111,873). Mr. Linhart received incentive compensation for fiscal 1997 in the
amount of $105,089 because the Corporation's operating income exceeded the
Target Amount by $2,101,785.
In the event Mr. Linhart's employment is terminated for cause, the
Corporation will pay Mr. Linhart the compensation (including a pro rata share of
any incentive compensation) and benefits due under his employment agreement
through the date of such termination. In the event the Corporation terminates
Mr. Linhart's employment because of his disability, the Corporation shall
continue to pay him his compensation (including a pro rata share of any
incentive compensation) and benefits for a period of six months. In the event
Mr. Linhart's employment is terminated by the Corporation other than for cause,
disability or death, or if Mr. Linhart voluntarily terminates his employment
with the Corporation for good reason, the Corporation will be obligated to pay
severance equal to three times Mr. Linhart's then current base salary and
incentive compensation, plus all accrued incentive compensation previously
deferred. Mr. Linhart's employment agreement contains certain non-competition
and non-solicitation provisions which prohibit him from competing with the
Corporation during his employment by the Corporation and for a period of three
years after termination of his employment.
Pursuant to Mr. Linhart's employment agreement, the Corporation has granted
to Mr. Linhart the right to purchase 50,000 Common Shares at $10.00 per share,
subject to vesting 20% per year over five years. These options expire August
19, 2004 and are subject to the terms and conditions of the Company's 1994 Stock
Incentive Plan, which among other things provide that the options will lapse
upon the earlier of one year after the termination of the employee's employment
due to death or disability or 90 days after the termination of the employee's
employment for any other reason. Mr. Linhart's employment agreement also grants
to Mr. Linhart the 1987 Stock Options and the 1991 Stock Options. See
"Executive Compensation -- Stock Option Exercises and Holdings."
JOSEPH L. GOVERN. The Operating Company and Joseph L. Govern are parties
to an employment agreement pursuant to which Mr. Govern is serving as Vice
President - Operations of the Operating Company. Upon the completion of the
Recapitalization, the Corporation assumed the Operating Company's interest in
the employment agreement, the current term of which will end on September 30,
1997. The employment agreement, however, renews automatically for successive
two-year periods, subject to termination by either party by notice given prior
to the end of the two-year term in effect at the time of termination. The
employment agreement may also be terminated by the Operating Company for cause
and in the event of Mr. Govern's disability. Mr. Govern receives an annual base
salary which is subject to increases effective as of April 1 of each year in an
amount equal to Mr. Govern's salary at the adjustment date multiplied by 5% or,
if the cost of living has increased 6% or more in the prior year, the percentage
increase in the cost of living during such prior period. Mr.Govern's salary for
fiscal 1997 was $105,000. In the event the Corporation terminates Mr. Govern's
employment other than for cause (as defined in the agreement), the Corporation
will be obligated to pay Mr. Govern his base salary over the remaining term of
his employment. Mr. Govern's employment agreement contains certain
non-competition and non-solicitation provisions which prohibit him from
competing with the Operating Company during his employment and for a period of
three years after termination of his employment. With respect to fiscal 1997,
Mr. Govern was eligible to receive a bonus based upon the operating
profitability of the Company. Mr. Linhart determined the formula to be used to
compute such bonus, which formula was approved by the Compensation Committee.
Pursuant to such formula, Mr. Govern was paid a bonus for fiscal 1997 in the
amount of $37,991.
RETIREMENT PLAN
Effective as of August 19, 1994, the Corporation adopted, subject to
certain amendments, the Retirement Plan and Trust of the Operating Company (the
"Retirement Plan"). The Retirement Plan is a profit sharing plan, containing a
qualified cash and deferred arrangement under Section 401(k) of the Code, which
permits participants to accumulate retirement benefits on a tax deferred basis.
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<PAGE>
REPORT OF COMPENSATION COMMITTEE
COMPENSATION POLICIES
The Corporation's compensation program adopted by the Compensation
Committee in August, 1994 is designed to attract and retain highly qualified
executive officers and managers and to motivate them to maximize the
Corporation's earnings and shareholder returns. The Corporation's executive
compensation consists of two principal components: (i) cash compensation,
consisting of a base salary and a bonus which is based upon Corporation
operating performance, and (ii) stock options. The Corporation's policy is to
make cash bonus awards to executive officers and key management personnel based
upon a percentage of annual operating income in excess of established targets.
During fiscal 1997, 77 officers and managers participated in the program. The
Corporation also makes annual stock option grants or awards to executive
officers and other eligible employees. See "Executive Compensation -- Stock
Option Grants in Last Fiscal Year." Stock options are intended to encourage key
employees to remain employed by the Corporation providing them with a long-term
interest in the Corporation's overall performance as reflected by the
performance of the market for the Corporation's Common Shares.
CEO COMPENSATION
The cash compensation of Larry R. Linhart, President and Chief Executive
Officer, was based solely on the provisions of his employment agreement which
provides for a base salary plus annual cost of living adjustments and certain
incentive compensation based upon the Corporation's operating income. See
"Executive Compensation -- Employment Agreements."
Larry R. Linhart (Chair)
Robert L. Powelson
George R. Manser
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Linhart is Chairman of the Board of Directors, President and Chief
Executive Officer of the Corporation and Mr. Powelson is Secretary of the
Corporation. Mr. Manser is not an officer or employee of the Corporation. Mr.
Linhart has and intends to continue to abstain from participating in any actions
of the Compensation Committee affecting his compensation. Mr. Powelson is not
compensated for his services as Secretary of the Corporation.
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<PAGE>
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Corporation's Common Shares from August 12, 1994 (the date the Corporation
became a public company), until March 30, 1997, with the cumulative total return
of (a) the NASDAQ Stock Market-US Index and (b) the NASDAQ Telecommunications
Index. The graph assumes the investment of $100 in the Corporation's Common
Shares, the NASDAQ Stock Market-US Index and the NASDAQ Telecommunications
Index. The initial public offering price of the Corporation's Common Shares was
$8.00 per share.
Cumulative Total Return
--------------------------------------------
8/12/94 4/02/95 3/31/96 3/30/97
AMERILINK CORP ALNK 100 112 103 76
NASDAQ STOCK MARKET (U.S.) INAS 100 113 153 170
NASDAQ TELECOMMUNICATIONS INAT 100 100 132 119
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<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
Ernst & Young has acted as independent certified public accountants of the
Corporation during fiscal 1997. Ernst & Young is expected to have a
representative present at the annual meeting of shareholders who may make a
statement, if desired, and will be available to answer appropriate questions.
SHAREHOLDER PROPOSALS
In order for shareholder proposals to be considered for presentation at the
1997 Annual Meeting of Shareholders, such proposals must be received by the
Corporation at its principal executive offices not later than March 18, 1998.
The Corporation's Regulations provide that shareholder nominations for
election as directors may be made in compliance with certain advance notice,
informational and other applicable requirements. In order to be considered, a
shareholder's notice of director nomination must be delivered to or mailed and
received by the Secretary of the Corporation at 1900 E. Dublin-Granville Road,
Columbus, Ohio 43229 not less than 60 or more than 90 days prior to the
Corporation's Annual Meeting; provided, however, that in the event that less
than 75 days notice or prior public disclosure of the date of the meeting is
given or made to shareholders, notice by the shareholder to be timely must be so
received not later than the close of business on the 15th day following the
earlier of the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. The Corporation's Annual Meeting is generally
held on the third Tuesday of August of each year. A shareholder's notice of
director nominations must contain certain information required by the
Regulations and must be accompanied by the written consent of each proposed
nominee to serve as a director of the Corporation, if elected. Copies of the
Regulations are available upon request made to the Secretary of the Corporation
at the above address. The requirements described above do not supersede the
requirements or conditions established by the Securities and Exchange Commission
for shareholder proposals to be included in the Corporation's proxy materials
for a meeting of shareholders.
OTHER MATTERS
As of the date of this statement, the Board of Directors knows of no other
business that will come before the Annual Meeting. Should any other matter
requiring the vote of the shareholders arise, the enclosed proxy confers upon
the proxy holders discretionary authority to vote the same in respect to the
resolution of such other matters as they, in their best judgment, believe to be
in the best interest of the Corporation.
SHAREHOLDERS ARE URGED TO FORWARD THEIR PROXIES WITHOUT DELAY. A PROMPT
RESPONSE WILL BE GREATLY APPRECIATED.
By Order of the Board of Directors
LARRY R. LINHART
Chairman of the Board of Directors,
President and Chief Executive Officer
July 15, 1997
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<PAGE>
AMERILINK CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF SHAREHOLDERS
AUGUST 19, 1997
The undersigned hereby acknowledges receipt of the notice of Annual Meeting
of Shareholders and the Proxy Statement and, revoking any proxy heretofore
given, hereby appoints Larry R. Linhart and Robert L. Powelson, and each of
them, as Proxies, each with the power to appoint his substitute, and hereby
authorizes each of them to represent and to vote, as designated on the reverse,
all the shares of common stock of AmeriLink Corporation held of record by the
undersigned on June 20, 1997, at the Annual Meeting of Shareholders of AmeriLink
Corporation to be held on August 19, 1997, and at all adjournments thereof.
/X/ A. Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSALS.
1. ELECTION OF DIRECTORS
<TABLE>
<S> <C> <C>
FOR all nominees listed at right / / WITHHOLD AUTHORITY / / NOMINEES:
to vote for all LARRY R. LINHART
nominees listed at right ROBERT L. POWELSON
RICHARD W. RUBENSTEIN
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, strike nominee's name from the list at right.)
</TABLE>
2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the Annual Meeting or any
adjournment thereof.
<PAGE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1. IF ANY OTHER
BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THE
BOARD OF DIRECTORS IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE ANNUAL MEETING.
Please mark, sign, date and return promptly in the enclosed envelope.
Date:_________________, 1997
---------------------------------------
(Signature)
---------------------------------------
(Signature - If held jointly.)
Important: Please sign exactly as name
appears above. When shares are held by
Joint Tenants, each should sign. When
signing as Attorney, Executor,
Administrator, Trustee or Guardian,
please give full title as such. When
executed by a Corporation, the Proxy
should be signed by a duly authorized
Officer, indicating title as such. If a
Partnership, please sign in Partnership
name by authorized person.
