SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
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Filed by a Party other than the Registrant / /
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/ / Preliminary Proxy Statement
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14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EASYLINK SERVICES CORPORATION
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(Name of Registrant as Specified In Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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EASYLINK SERVICES CORPORATION
399 THORNALL STREET
EDISON, NJ 08837
April 27, 2001
Dear Stockholder:
On behalf of the Board of Directors, I cordially invite you to attend our
Annual Meeting of Stockholders to be held at 10:00 a.m. on Thursday, May 24,
2001 at the New York Information Technology Center, 55 Broad Street, New York,
New York.
We have enclosed with this letter a notice of meeting, a proxy statement, a
proxy card and a return envelope. We have also enclosed your 2000 Annual
Report.
Your vote is important. Whether or not you plan to attend, please date and
sign the enclosed proxy card and return it in the envelope provided. If you
plan to attend the meeting, you may vote in person.
I look forward to your participation.
Sincerely,
/s/ Gerald Gorman
GERALD GORMAN
Chairman
EASYLINK SERVICES CORPORATION
399 THORNALL STREET
EDISON, NJ 08837
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on May 24, 2001
The Annual Meeting of Stockholders (the "Annual Meeting") of EasyLink
Services Corporation, a Delaware corporation (the "Company" or "EasyLink
Services"), will be held at the New York Information Technology Center, 55
Broad Street, New York, New York on Thursday, May 24, 2001, at 10 a.m. local
time for the following purposes:
1. To elect eight directors of EasyLink Services to serve until the
2002 Annual Meeting of Stockholders or until their respective successors
are elected and qualified;
2. To approve the Company's 2001 Stock Option Plan;
3. To amend EasyLink Services' Amended and Restated Certificate of
Incorporation, as amended, to increase the number of authorized shares of
Class A Common Stock of the Company;
4. To ratify the appointment of KPMG LLP as the independent accountants
for the Company for the year ending December 31, 2001; and
5. To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponement thereof.
The foregoing items of business, including the nominees for directors, are
more fully described in the Proxy Statement which is attached and made a part
of this Notice. The Board of Directors has fixed the close of business on
April 20, 2001 as the record date for determining the stockholders entitled to
notice of and to vote at the Annual Meeting and any adjournment or
postponement thereof.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, whether or not you plan to attend the Annual Meeting in
person, you are urged to mark, date, sign and return the enclosed proxy card
as promptly as possible in the postage-prepaid envelope provided to ensure
your representation and the presence of a quorum at the Annual Meeting. If you
send in your proxy card and then decide to attend the Annual Meeting to vote
your shares in person, you may still do so. Your proxy is revocable in
accordance with the procedures set forth in the Proxy Statement.
By Order of the Board of Directors
/s/ David w. Ambrosia
DAVID W. AMBROSIA
Executive Vice President, General Counsel
and Secretary
Edison, New Jersey
April 27, 2001
EASYLINK SERVICES CORPORATION
399 THORNALL STREET
EDISON, NJ 08837
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PROXY STATEMENT
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General
The enclosed proxy is solicited by the Board of Directors of EasyLink
Services Corporation, a Delaware corporation (the "Company" or "EasyLink"),
for use at the Annual Meeting of Stockholders of the Company (the "Annual
Meeting") to be held at the New York Information Technology Center, 55 Broad
Street, New York, New York, on Thursday, May 24, 2001, at 10 a.m., local time,
and any adjournment or postponement thereof.
The Company's principal offices are located at 399 Thornall Street, Edison,
NJ 08837. This Proxy Statement and the accompanying proxy card are being
mailed to the stockholders of the Company on or about April 27, 2001.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention:
David W. Ambrosia, Executive Vice President, General Counsel and Secretary) a
written notice of revocation or a duly executed proxy bearing a later date, or
by attending the Annual Meeting and voting in person.
Record Date; Voting Securities
The close of business on April 20, 2001 has been fixed as the record date
(the "Record Date") for determining the holders of shares of common stock of
the Company entitled to notice of and to vote at the Annual Meeting. At the
close of business on the Record Date, the Company had approximately 75,125,133
shares of Class A Common Stock outstanding held of record by approximately 400
stockholders and 10,000,000 shares of Class B Common Stock held of record by
one stockholder.
Voting and Solicitation
Each outstanding share of Class A Common Stock on the Record Date is
entitled to one vote and each outstanding share of Class B Common Stock on the
Record Date is entitled to 10 votes on all matters, subject to the conditions
described below. The presence, in person or by proxy, of the holders of a
majority in voting power of the outstanding shares of Class A Common Stock and
Class B Common Stock, voting together as a single class, is necessary to
constitute a quorum. Abstentions and broker "non-votes" are counted as present
and entitled to vote for purposes of determining a quorum. A broker "non-vote"
occurs when a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting
power for that particular item and has not received instructions from the
beneficial owner.
The nominees for election as directors at the Annual Meeting will be elected
by a plurality of the votes of the shares of Class A Common Stock and Class B
Common Stock, voting together as a single class, present in person or
represented by proxy at the meeting. Abstentions and broker "non-votes" are
not counted for the purposes of the election of directors.
The amendment of the Amended and Restated Certificate of Incorporation, as
amended, must be approved by the affirmative vote of the holders of a majority
in voting power of the outstanding shares of Class A Common Stock and Class B
Common Stock, voting together as a single class. Abstentions and broker "non-
votes" will have the same effect as a vote "AGAINST" the amendment to the
Amended and Restated Certificate of Incorporation, as amended.
All other matters submitted to the stockholders will require the affirmative
vote of the holders of a majority of the votes of the shares of Class A Common
Stock and Class B Common Stock, voting together as a single class, present in
person or represented by proxy at the meeting. Abstentions will be counted
towards the
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tabulations of votes cast on proposals presented to the stockholders and will
have the same effect as a vote "AGAINST" such matters. Broker "non-votes" will
not be counted for purposes of determining whether such matters have been
approved.
If the enclosed proxy is properly executed and returned, it will be voted in
the manner directed by the stockholder. If no instructions are specified with
respect to the matter to be acted upon, proxies will be voted "FOR" such
matter.
The solicitation of proxies will be conducted by mail, and the Company will
bear all attendant costs. The Company may conduct further solicitation
personally, telephonically or by facsimile through its officers, directors and
employees, none of whom will receive additional compensation for assisting
with the solicitation.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees
At the Annual Meeting, the stockholders will elect eight (8) directors to
serve until the next Annual Meeting of Stockholders or until their respective
successors are elected and qualified. In the event any nominee is unable or
unwilling to serve as a director at the time of the Annual Meeting, the
proxies may be voted for the balance of those nominees named and for any
substitute nominee designated by the present Board or the proxy holders to
fill such vacancy, or for the balance of the nominees named without nomination
of a substitute, or the size of the Board may be reduced in accordance with
the Bylaws of the Company. The Board has no reason to believe that any of the
persons named below will be unable or unwilling to serve as a nominee or as a
director if elected.
The names of the nominees, their ages as of February 28, 2001 and certain
other information about them are set forth below:
Name Age Position
---- --- --------
Gerald Gorman .................................. 45 Chairman, Director
Thomas Murawski ................................ 55 Chief Executive Officer, Director
Gary Millin .................................... 31 Chief Executive Officer, WORLD.com, Inc., Director
George Abi Zeid ................................ 48 President - International Operations, Director
William Donaldson .............................. 69 Director
Stephen Duff ................................... 37 Director
Stephen Ketchum ................................ 39 Director
Jack Kuehler ................................... 68 Director
There are no family relationships among any of the directors or executive
officers of the Company.
Gerald Gorman -- Chairman
Mr. Gorman has served as Chairman of EasyLink Services since founding the
Company in December 1995 and as its Chief Executive Officer from February 1997
to October 2000. Prior to founding EasyLink Services, Mr. Gorman spent 12 years
in the Investment Banking Division of Donaldson, Lufkin & Jenrette Securities
Corporation where he founded and managed the Satellite Financing Group. Mr.
Gorman also held positions at General Electric Capital Corporation from 1983 to
1985 and at Utah International from 1982 to 1983. Mr. Gorman received his
Bachelor of Mechanical Engineering degree from Melbourne University and his
M.B.A. from Columbia University.
Thomas Murawski -- Chief Executive Officer, Director
Mr. Murawski has served as a member of the Board of Directors since February
2000. Mr. Murawski has served as Chief Executive Officer of EasyLink Services
since October, 2000. He served as Chief Executive Officer of Mail.com Business
Messaging Services, Inc., a wholly-owned subsidiary of the Company from February
2000 to October, 2000. Before joining EasyLink Services, Mr. Murawski was
employed by NetMoves Corporation from November 1991 in the capacity of Chairman,
President and Director. Prior to joining NetMoves Corporation, Mr. Murawski
served as Executive Vice President of Western Union Corporation, a global
telecommunications and financial services company and President of its Network
Services Group. Prior to joining Western Union Corporation, Mr. Murawski served
twenty-three years with ITT Corporation, a diversified manufacturing and
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services company. He has held operating responsibilities in the areas of
subsidiary and product line management, engineering, sales and marketing for
both voice and data-oriented businesses. Mr. Murawski's last position with ITT
Corporation was President and General Manager of ITT World Communications
Inc., an international telecommunications services company.
Gary Millin -- Chief Executive Officer of WORLD.com, Inc., Director
Mr. Millin has served as a member of the Board of Directors since founding
the Company in December 1995. Mr. Millin has served as Chief Executive Officer
of WORLD.com, Inc., a wholly-owned subsidiary of the Company since March 2000.
He served as President of the Company from December 1995 to March 2000. Prior to
founding EasyLink Services, Mr. Millin spent three years at the venture capital
firm Consumer Venture Partners (CVP) from 1991 to 1994. Mr. Millin received his
B.S. in Economics from the Wharton School and his M.B.A. from Harvard Business
School, where he was a Baker Scholar.
George Abi Zeid -- President - International Operations, Director
Mr. Abi Zeid has served as a member of the Board of Directors and as Vice
President - International Operations since February 2001. Prior to joining
EasyLink Services he served as President of Swift Telecommunications, Inc. which
he founded in 1999. Prior to founding Swift Telecommunications, Inc., Mr. Abi
Zeid served as Executive Vice President of Xpedite Systems, Inc. from 1994 until
1998. Mr. Abi Zeid served as President and Chief Executive Officer of Swift
Global, Inc. from the time he founded the company in 1980 until 1994. Prior to
founding Swift Global, Inc., Mr. Abi Zeid founded Swift Telex Inc. in 1978.
William Donaldson -- Director
Mr. Donaldson has been a member of the Board of Directors since April 1998.
He served as Chairman, President and Chief Executive Officer of Aetna, Inc.
from February 25, 2000 until December 13, 2000. He also served as Chairman,
President and Chief Executive Officer from May 30 until September 30, 2000 and
as Chairman of the new Aetna (formerly Aetna U.S. Healthcare) until his
retirement on April 1, 2001. From 1995 until 2000 he served as Senior Advisor
to Donaldson, Lufkin & Jenrette, Inc. He is Chairman of the Carnegie Endowment
for International Peace and is a director of Bright Horizons Family Solutions
and Aetna, Inc. From 1991 to 1995, he served as Chairman and Chief Executive
Officer of the New York Stock Exchange. In 1981, he founded the private
investment firm, Donaldson Enterprises, and served as its Chairman until 1990.
In 1975, Mr. Donaldson was named founding Dean and Professor of Management at
the Yale Management School. In 1973, he was appointed U.S. Undersecretary of
State and subsequently served as Counsel to Vice President Nelson Rockefeller.
In 1959, he co-founded Donaldson, Lufkin & Jenrette where he served as its
Chief Executive Officer until 1973. He received his B.A. from Yale University
and his M.B.A. with distinction from the Harvard Business School.
Stephen Duff -- Director
Mr. Duff has been a member of the Board of Directors since January, 2001.
Mr. Duff is the Senior Investment Manager of The Clark Estates, Inc. Prior to
joining The Clark Estates in 1995, Mr. Duff was a Vice President of The
Portfolio Group, Inc., a subsidiary of The Chemical Banking Corporation, Inc.
from 1990. Mr. Duff is a 1985 graduate of Stonehill College. Mr. Duff serves
on the Boards of Employease, Inc. (Private), The Clara Welch Thanksgiving
Home, Inc. (Non-Profit) and Vertex Interactive, Inc.
Stephen Ketchum --- Director
Mr. Ketchum has been a member of the Board of Directors since May 1997.
Since April 23, 2001, Mr. Ketchum has been a Managing Director of UBS Warburg, a
global provider of financial services. Mr. Ketchum is also a director of
Onview.com, Inc., a privately-held internet company based in New York. From 2000
until April 25, 2001, Mr. Ketchum was chief executive officer and a director of
Onview.com. From 1990 until 2000, Mr. Ketchum held various positions with
Donaldson, Lufkin & Jenrette Securities Corporation, including as a Managing
Director of the Satellite Financing Group. Prior to joining Donaldson, Lufkin &
Jenrette Securities Corporation in 1990, Mr. Ketchum was employed at Dean Witter
Reynolds. Mr. Ketchum serves on the board of ExperTelligence, Inc., a publicly
traded internet incubator based in Santa Barbara. Mr. Ketchum received his B.A.
in Finance and Marketing from New England College where he graduated summa cum
laude and his M.B.A. from the Harvard Business School.
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Jack Kuehler -- Director
Mr. Kuehler has been a member of the Board of Directors since April 1998.
Mr. Kuehler retired in August 1993 as Vice Chairman and a director of
International Business Machines Corporation, having held various positions
since joining IBM in 1958. Prior to his appointment as Vice Chairman of IBM in
January 1993, Mr. Kuehler served as President from 1989 to 1993 and as
Executive Vice President from 1987 to 1988. Mr. Kuehler is a director of
Aetna, Inc., Arch Chemicals Inc. and The Parsons Corporation. He is a member
of the National Academy of Engineering, a fellow of the Institute of
Electrical and Electronics Engineers, Inc. and a fellow of the American
Academy of Arts and Sciences.
Meetings and Committees of the Board of Directors
During 2000, the Board met nine (9) times and acted three times by unanimous
written consent. All of our directors attended 75 percent or more of the
regularly scheduled and special meetings of the Board and Board committees on
which they served in 2000. The Board has an Audit Committee and a Compensation
Committee. From time to time, the Board has created various ad hoc committees
for special purposes. No such ad hoc committee is currently functioning.
The Compensation Committee is currently composed of two outside directors,
William Donaldson and Stephen Ketchum, and held seven (7) meetings and acted
twice by unanimous written consent during 2000. Effective upon and subject to
his election to the Board at the Annual Meeting, Stephen Duff will be
appointed to the Compensation Committee. The Compensation Committee has the
authority to determine salaries and bonuses, and to make awards of options to
purchase capital stock of the Company to the officers and employees of the
Company.
The Audit Committee is currently composed of three directors, William
Donaldson, Stephen Ketchum and Gary Millin, and held four (4) meetings during
2000. Effective upon and subject to his election to the Board at the Annual
Meeting, Stephen Duff will be appointed to the Audit Committee and Mr. Millin
will no longer serve as a member of the Audit Committee. The Company has
adopted an Audit Committee charter, a copy of which is set forth as Appendix A
hereto. Each of the current Audit Committee members is an "independent
director" as defined in Rule 4200(a)(14) of the NASD listing standards except
for Mr. Millin. Upon the appointment of Mr. Duff to the Audit Committee
immediately following the Annual Meeting, each of the Audit Committee members
will be an "independent director" as defined in Rule 4200(a)(14) of the NASD
listing standards. The Audit Committee, among other things, provides
assistance to the corporate directors in fulfilling their responsibilities
relating to corporate accounting, reporting practices of the Company, and the
quality and integrity of the financial reports of the Company. In carrying out
these responsibilities, the Audit Committee, among other things, reviews and
recommends to the directors the independent auditors to be selected to audit
the financial statements of the Company and its divisions and subsidiaries;
confirms the independence of the independent auditors and the independent
auditors' accountability to the Board and the Audit Committee; meets with the
independent auditors and financial management of the Company to review the
scope of the proposed audit for the current year and the audit procedures to
be utilized, and at the conclusion thereof to review such audit, including any
comments or recommendations of the independent auditors; and reviews with the
independent auditors and financial and accounting personnel, the adequacy and
effectiveness of the accounting and financial controls of the Company.
Compensation Committee Interlocks and Insider Participation
EasyLink Services' Compensation Committee is comprised of two non-management
directors, William Donaldson and Stephen Ketchum. Effective upon and subject to
his election to the Board at the Annual Meeting, Stephen Duff will be appointed
as a third non-management director to the Compensation Committee. All decisions
relating to the compensation of EasyLink Services executive officers are made by
the Compensation Committee.
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Compensation of Directors
Other than reimbursing directors for customary and reasonable expenses of
attending Board of Directors or committee meetings, EasyLink Services does not
currently compensate directors who are part of the management team. During
2000, three outside, non-management directors were granted options as
compensation for their serving as board members. On May 18, 2000 Mr. Kuehler
and Mr. Donaldson were each granted options to purchase 20,000 shares of Class
A Common Stock at an exercise price of $7.00 per share, vesting on a monthly
basis for one year from May 2000 through May 2001 and Mr. Ketchum was granted
options to purchase 10,000 shares of Class A Common Stock at $7.00 per share,
vesting on a monthly basis for one year from May 2000 through May 2001. On
November 14, 2000, all directors, officers and employees (other than Gerald
Gorman) were given the ability to reduce the exercise price of their
outstanding options that had an exercise price above $3.00 to $1.6875, the
fair market value on the date of the repricing. Pursuant to this repricing,
45,000 options were repriced for each of Messrs. Donaldson and Kuehler and
20,000 options were repriced for Mr. Ketchum. On January 29, 2001, Stephen
Duff, an outside, non-management director was granted options to purchase
40,000 shares of Class A Common Stock at an exercise price of $1.25 per share,
vesting on a monthly basis for one year from January 2001 through January
2002.
Vote Required
A plurality of votes of the shares of Class A Common Stock and Class B
Common Stock, voting together as a single class, present in person or
represented by proxy at the meeting, is required for the election of
directors.
Recommendation of the Board
The Board of Directors recommends that the stockholders vote "FOR" election
of each of the nominees listed above.
PROPOSAL NO. 2
APPROVAL OF THE EASYLINK SERVICES CORPORATION
2001 STOCK OPTION PLAN
General
The Board of Directors is proposing for stockholder approval the EasyLink
Services Corporation 2001 Stock Option Plan (the "2001 Option Plan"). The
purpose of the 2001 Option Plan is to grant incentive stock options intended
to qualify under Section 422 of the Internal Revenue Code and nonqualified
stock options as a means to provide an incentive to our selected directors,
officers, employees and consultants to acquire a proprietary interest in
EasyLink Services, to continue in their positions with us and to increase
their efforts on our behalf.
The 2001 Option Plan was adopted by the Board on April 3, 2001, and, if
approved by the stockholders, will become effective on May 24, 2001. Appendix
B to this Proxy Statement contains the complete text of the 2001 Option Plan,
which is summarized below.
Description of the 2001 Option Plan
Administration. The 2001 Option Plan is administered by the Board of
Directors or a committee appointed by the Board. Under the 2001 Option Plan,
the plan administrator has the authority to, among other things: (i) select
the eligible persons to whom options will be granted, (ii) determine the size,
type and the terms of each option granted, (iii) adopt, amend and rescind
rules and regulations for the administration of the plan, and (iv) decide all
questions and settle all controversies and disputes of general applicability
that may arise in connection with the plan.
Available Shares. A maximum of 2,500,000 shares of Class A Common Stock
will be available for purchase under the 2001 Option Plan. The maximum number
of shares underlying options granted to any individual within a calendar year
under the 2001 Option Plan is 1,000,000. In the event of any changes in the
number or kind of outstanding shares of stock by reason of merger,
consolidation, recapitalization, reclassification, split, reverse split,
combination of shares or otherwise, the plan administrator may make
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equitable adjustments to the price and other terms of any option previously
granted or that may be granted under the 2001 Option Plan.
Eligibility. The plan administrator will select those persons who are to
receive option grants. During the first year in which options are granted
under the 2001 Option Plan, eligible persons are expected to include
approximately 600 officers and other employees of EasyLink Services and its
subsidiaries, all four of the non-employee directors of EasyLink Services, and
certain consultants to EasyLink Services and its subsidiaries.
Option Agreement. Each option granted under the 2001 Option Plan will be
evidenced by an agreement that states the terms and conditions of the grant.
The exercise price of an incentive stock option granted under the 2001 Option
Plan will not be less than 100% of the fair market value of the stock at the
time of grant (110% in the case of an incentive stock option granted to any
person who possesses more than 10% of the total combined voting power of all
classes of our capital stock). The fair market value of a share of Class A
Common Stock as of the Record Date was $0.69.
Each option granted under the 2001 Option Plan will be exercisable at the
times and in the amounts determined by the plan administrator at the time of
grant. In addition, the plan administrator, in its discretion, may accelerate
the exercisability of any option outstanding under the 2001 Option Plan. The
exercise price of an option is payable in cash unless otherwise approved by
the plan administrator.
Options granted under the 2001 Option Plan are not transferable except by
will or the laws of descent and distribution and are only exercisable by the
grantee during such grantee's lifetime. Each option shall terminate at the
time determined by the plan administrator provided that the term may not
exceed ten years from the date of grant (five years in the case of an
incentive stock option granted to a ten percent stockholder). However, the
plan administrator may, subject to the limitations of the 2001 Option Plan,
modify, extend or renew outstanding options granted under the 2001 Option
Plan, or accept the surrender of outstanding unexercised options and authorize
the grant of substitute options.
Amendment and Termination. The 2001 Option Plan will terminate on the
earliest of (a) May 24, 2011, (b) the date when all shares of stock reserved
for issuance under the 2001 Option Plan have been acquired through the
exercise of options granted under the plan or (c) any earlier date as may be
determined by the Board of Directors. Subject to certain limitations, the
Board of Directors may amend the 2001 Option Plan, and may correct any defect,
supply any omission or reconcile any inconsistency in the 2001 Option Plan.
None of these modifications may alter or adversely impair any rights or
obligations under any option previously granted under the 2001 Option Plan,
except with the consent of the grantee.
Federal Income Tax Consequences
The following discussion is generally a summary of the principal United
States federal income tax consequences under current federal income tax laws
relating to grants or awards to employees under the 2001 Option Plan. This
summary is not intended to be exhaustive and, among other things, does not
describe state, local or foreign income and other tax consequences.
A grantee will not recognize any taxable income upon the grant of a
nonqualified option and EasyLink Services will not be entitled to a tax
deduction with respect to such grant. Generally, upon exercise of a
nonqualified option, the excess of the fair market value of stock on the date
of exercise over the exercise price will be taxable as ordinary income to the
grantee. If EasyLink Services complies with applicable withholding
requirements, we will be entitled to a tax deduction in the same amount and at
the same time as the grantee recognizes ordinary income subject to any
deduction limitation under Section 162(m) of the Internal Revenue Code. The
subsequent disposition of shares acquired upon the exercise of a nonqualified
stock option will ordinarily result in capital gain or loss.
Subject to the discussion below, a grantee will not recognize taxable income
at the time of grant or exercise of an incentive stock option and we will not
be entitled to a tax deduction with respect to such grant or exercise.
However, the exercise of an incentive stock option may result in an
alternative minimum tax liability for the grantee.
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Generally, if a grantee has held shares acquired upon the exercise of an
incentive stock option for at least one year after the date of exercise and
for at least two years after the date of grant of the incentive stock option,
upon disposition of the shares by the grantee, the difference, if any, between
the sales price of the shares and the exercise price will be treated as long-
term capital gain or loss to the grantee.
Generally, upon a sale or other disposition of shares acquired upon the
exercise of an incentive stock option within one year after the date of
exercise or within two years after the date of grant of the incentive stock
option (a "disqualifying disposition"), any excess of the fair market value of
the shares at the time of exercise of the option over the exercise price of
such option will constitute ordinary income to the grantee. 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 will generally be capital
gain. Subject to any deduction limitation under Section 162(m) of the Internal
Revenue Code, EasyLink Services will be entitled to a deduction equal to the
amount of such ordinary income recognized by the holder.
If an option is exercised through the use of shares previously owned by the
holder, such exercise generally will not be considered a taxable disposition
of the previously owned shares and thus no gain or loss will be recognized
with respect to such shares upon such exercise. However, if the previously
owned shares were acquired on the exercise of an incentive stock option and
the holding period requirement for those shares is not satisfied at the time
they are used to exercise the option, such use will constitute a disqualifying
disposition of the previously owned shares resulting in the recognition of
ordinary income in the amount described above.
Approval Required
The affirmative vote of the holders of a majority of the votes of shares of
Class A Common Stock and Class B Common Stock, voting together as a single
class, present in person or represented by proxy at the meeting is required
for the approval of this proposal.
Recommendation of the Board
The Board of Directors recommends a vote "FOR" the approval of the EasyLink
Services Corporation 2001 Stock Option Plan.
PROPOSAL NO. 3
APPROVAL OF AMENDMENT TO THE COMPANY'S
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED
General
The Board of Directors has declared advisable an amendment to the Company's
Amended and Restated Certificate of Incorporation, as amended, to increase the
aggregate number of authorized shares of Class A Common Stock from 150,000,000
to 500,000,000 and the Board of Directors has directed that the amendment be
submitted to the stockholders at the Annual Meeting.
The Amended and Restated Certificate of Incorporation, as amended, presently
authorizes the issuance of 220,000,000 shares of which 150,000,000 are shares
of Class A Common Stock, par value $.01 per share, 10,000,000 are shares of
Class B Common Stock, par value $.01 per share, and 60,000,000 are shares of
Preferred Stock, par value $.01 per share. The amendment would increase the
authorized number of shares of Class A Common Stock to 500,000,000.
Proposed Amendment
If the amendment is approved, the text of the first sentence of Article V of
the Amended and Restated Certificate of Incorporation, as amended, would read
in its entirety as follows:
The total number of shares of all classes of capital stock that the
Corporation is authorized to issue is five hundred seventy million
(570,000,000) of which five hundred million (500,000,000) shall be
shares of Class A Common Stock, par value one cent ($.01) per share,
and ten million (10,000,000) shall be shares of Class B Common Stock,
par value one cent ($.01) per share, and sixty million (60,000,000)
shall be shares of Preferred Stock, par value one cent ($.01) per
share.
7
General Effect of the Proposed Amendment and Reasons for Approval
Of the Company's authorized shares, 70,851,123 shares of Class A Common
Stock, 10,000,000 shares of Class B Common Stock and no shares of Preferred
Stock were issued and outstanding as of February 28, 2001. At February 28,
2001, after taking into account Class A Common Stock underlying the
outstanding shares of Class B Common Stock and all outstanding stock options
and warrants and convertible securities, but excluding shares issuable at the
option of the Company in payment of interest on outstanding senior convertible
notes and an indeterminate amount of additional shares that may be issuable
pursuant to the exercise of outstanding exchange rights, approximately
19,500,000 shares of Class A Common Stock authorized in the Amended and
Restated Certificate of Incorporation, as amended, remain available for
issuance.
The Board of Directors believes the increase in the number of authorized
shares of Class A Common Stock is advisable in order to maintain the Company's
financing and capital-raising flexibility, for use as consideration in
acquisitions, to facilitate future stock-splits, to have shares available for
use in employee benefit plans and other corporate purposes, and to generally
maintain the Company's flexibility in today's competitive, fast-changing
environment. There are no present agreements, understandings or plans for the
issuance of any of the additional shares of Common Stock that would be
authorized by the amendment.
Adoption of the amendment would enable the Board from time to time to issue
additional shares of Class A Common Stock for such purposes and such
consideration as the Board may approve without further approval of the
Company's stockholders, except as may be required by the rules of any
securities exchange on which the shares of Class A Common Stock are at the
time listed. As is true for shares presently authorized, the issuance of the
Class A Common Stock authorized by the amendment may, among other things, have
a dilutive effect on earnings per share and on the equity and voting power of
existing holders of Class A Common Stock.
The overall effect of an issuance of additional shares of Class A Common
Stock may be to render more difficult the accomplishment of any attempted
merger, takeover or other change in control affecting the Company and/or the
removal of the Company's Board of Directors and management.
There are no preemptive rights with respect to the Class A Common Stock. The
additional authorized shares of Class A Common Stock would have the identical
powers, preferences and rights as the shares now authorized.
The Board of Directors of the Company believes that the proposed increase in
the number of authorized shares of Class A Common Stock will be advantageous
to the Company and its stockholders by making available such stock for
issuance for various corporate purposes.
Approval Required
The affirmative vote of the holders of a majority of the votes of all
outstanding shares of Class A Common Stock and Class B Common Stock, voting
together as a single class, is required for the approval of this proposal.
Under Delaware law, stockholders will not have any dissenters' or appraisal
rights in connection with the amendment. If the amendment is approved by the
stockholders, it will become effective upon executing and acknowledging, and
filing with the Delaware Secretary of State, a Certificate of Amendment
required by the General Corporation Law of the State of Delaware. However, the
Board of Directors is authorized to abandon the amendment at any time prior to
its effectiveness, whether before or after obtaining stockholder approval,
without further action by stockholders.
Recommendation of the Board
The Board of Directors recommends a vote "FOR" adoption of the proposed
amendment of the Amended and Restated Certificate of Incorporation, as
amended.
PROPOSAL NO. 4
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
KPMG LLP has served as the Company's independent auditors since 1998 and has
been appointed by the Board to continue as the Company's independent auditors
for the year 2001.
8
A representative of KPMG LLP is expected to be present at the Annual
Meeting. This representative will have an opportunity to make a statement and
will be available to respond to appropriate questions.
Fees Billed To Company By KPMG LLP During Fiscal 2000
Audit Fees
Audit fees billed to the Company by KPMG LLP for the audit of the Company's
annual financial statements included on Form 10-K for the year ended December
31, 2000 and the review of the financial statements included in the Company's
quarterly reports on Form 10-Q for 2000 totaled approximately $520,000.
Financial Information Systems Design And Implementation Fees
The Company did not engage KPMG LLP to provide advice to the Company
regarding financial information systems design and implementation during the
fiscal year ended December 31, 2000.
All Other Fees
Fees billed to the Company by KPMG LLP during the Company's 2000 fiscal year
for all other non-audit services rendered to the Company, including accounting
advice and tax services totaled approximately $700,000, including those fees
relating to the offering of our 7% convertible subordinated debentures in
January, 2000, various acquisitions and real estate consulting. The audit
committee of the Board of Directors has determined that the accounting advice
and tax services provided by KPMG LLP are compatible with maintaining KPMG
LLP's independence.
Approval Required
The affirmative vote of the holders of a majority of the votes of the shares
of Class A Common Stock and Class B Common Stock, voting together as a single
class, present in person or represented by proxy at the meeting is required
for the approval of this proposal.
Recommendation of the Board
The Board of Directors recommends a vote "FOR" the ratification of the
appointment of KPMG LLP as the Company's independent auditors for the year
2001.
9
COMMON STOCK OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information with respect to the beneficial
ownership of EasyLink Services' common stock as of February 28, 2001 for:
o each person who EasyLink Services knows beneficially owns more than 5% of
its Class A Common Stock;
o each of EasyLink Services' directors, including its Chairman and Chief
Executive Officer;
o EasyLink Services' four most highly compensated executive officers, other
than its Chief Executive Officer, who were serving as executive officers
at the end of 2000, and two additional executive officers; and
o all of EasyLink Services' executive officers and directors as a group.
For purposes of this table, a person, entity or group is deemed to have
"beneficial ownership" of any shares of Class A Common Stock, including shares
subject to options, warrants or conversion rights, which the person, entity or
group has the right to acquire within 60 days of February 28, 2001. Unless
otherwise noted below, the persons and entities named in the table have sole
voting and sole investment power with respect to all shares beneficially
owned, subject to community property laws where applicable.
For purposes of calculating the percentage of outstanding shares or voting
power held by each person named below, any shares which that person has the
right to acquire within 60 days after February 28, 2001 are deemed to be
outstanding, but shares which may similarly be acquired by other persons are
deemed not to be outstanding.
The total number of shares of Class A Common Stock for purposes of
calculating the percentages of Class A Common Stock beneficially owned
includes 10,000,000 shares of Class A Common Stock issuable upon conversion of
the 10,000,000 outstanding shares of Class B Common Stock.
The total number of votes for purposes of calculating the percentage of
total voting power includes the voting power of 10,000,000 shares of Class B
Common Stock owned by Gerald Gorman. Each share of Class B Common Stock
entitles Mr. Gorman to ten votes.
Number of Percentage Percentage of
Shares of Class A of Class A Total
Name of Beneficial Owner Beneficially Owned Beneficially Owned Voting Power
------------------------------------------------ ------------------ ------------------ -------------
Gerald Gorman.......................................................... 12,245,717(1) 15.0% 59.6%
Thomas Murawski........................................................ 300,917 * *
Gary Millin............................................................ 1,772,534 2.2 1.0
George Abi Zeid........................................................ 18,776,176 23.2 11.0
William Donaldson...................................................... 281,666 * *
Stephen Duff........................................................... 25,100 * *
Stephen Ketchum........................................................ 148,453 * *
Jack Kuehler........................................................... 282,366 * *
Debra McClister........................................................ 284,044 * *
David Ambrosia......................................................... 153,815 * *
Lon Otremba............................................................ 227,378 * *
Samuel Kline........................................................... 150,500 * *
All directors and executive officers as a group (13 persons)........... 34,648,666 41.7 72.0
The Clark Estates, Inc................................................. 6,973,800(2) 8.1 4.0
---------------
* Represents beneficial ownership or voting power of less than 1%.
(1) Includes 10,000,000 shares of Class A Common Stock issuable upon
conversion, on a one for one basis, of Class B Common Stock.
(footnotes continued on next page)
10
(2) Includes 5,000,000 shares of Class A Common Stock issuable upon conversion
of senior convertible notes held by Federal Partners, L.P. The Clark
Estates, Inc. provides management and administrative services to Federal
Partners. Also, includes 1,943,800 shares held by accounts for which The
Clark Estates, Inc. provides management and administrative services. The
Clark Estates, Inc. disclaims beneficial ownership of the 5,000,000 shares
and the 1,943,800 shares described in this footnote.
The following table sets forth the number of shares of Class A Common Stock
included in the table above that are issuable upon the exercise of options
exercisable within 60 days of February 28, 2001.
Number of Shares of
Name of Beneficial Owner Class A Common Stock
------------------------ --------------------
Gerald Gorman........................................... 544,897
Thomas Murawski......................................... 277,675
Gary Millin............................................. 564,434
George Abi Zeid......................................... 0
William Donaldson....................................... 151,666
Stephen Duff............................................ 10,000
Stephen Ketchum......................................... 13,333
Jack Kuehler............................................ 151,666
Debra McClister......................................... 216,039
David Ambrosia.......................................... 149,340
Lon Otremba............................................. 72,378
Samuel Kline............................................ 150,000
George Abi Zeid acquired the 18,776,176 shares included in the ownership
table above in connection with the acquisition of Swift Telecommunications,
Inc. ("STI") by EasyLink Services pursuant to an agreement and plan of merger
dated January 31, 2001. STI acquired AT&T Corp.'s EasyLink services business
on January 31, 2001. In connection with the acquisition of STI by EasyLink
Services pursuant to a Pledge Agreement dated January 31, 2001, Mr. Abi Zeid
pledged to AT&T Corp. all of the shares of EasyLink Services Class A Common
Stock that he was entitled to receive under the agreement and plan of merger
to secure a $35 million note issued to AT&T Corp. by STI and assumed by
EasyLink Services as part of the purchase price for the EasyLink Services
business. Upon the occurrence of an event of default under the terms of the
$35 million note or the pledge agreement, AT&T Corp. may exercise all of its
available rights and remedies under the agreement and applicable law. The
exercise of these rights and remedies after an event of default may result in
the transfer of the shares pledged.
11
MANAGEMENT
Executive Officers
The following table identifies the current executive officers of EasyLink
Services and their ages as of February 28, 2001:
Name Age Position
---- --- --------
Gerald Gorman .................................. 45 Chairman, Director
Thomas Murawski ................................ 55 Chief Executive Officer, Director
Bradley Schrader ............................... 49 President
Debra McClister ................................ 46 Executive Vice President and Chief Financial Officer
David Ambrosia ................................. 44 Executive Vice President and General Counsel
Gary Millin .................................... 31 Chief Executive Officer, World.com, Inc., Director
For biographical summaries of Gerald Gorman, Gary Millin and Thomas
Murawski, see "Election of Directors."
Bradley Schrader -- President
Mr. Schrader was named President of EasyLink Services in October, 2000. He
served as President of Mail.com Business Messaging Services, Inc., a wholly-
owned subsidiary of the Company from August 2000 to October, 2000. Prior to
joining EasyLink Services, Mr. Schrader consulted to Clayton, Dubilier and
Rice and served as President - eCommerce at US Office Products, Inc. from 1999
to 2000. Before joining US Office Products, Inc., Mr. Schrader was General
Manager - New Ventures and General Manager - Optical Devices Business at
AlliedSignal from 1996 to 1999. Mr. Schrader also held senior management
positions at TRW, Inc. from 1990 to 1996, Corning, Inc. from 1986 to 1990 and
The Boston Consulting Group from 1980 to 1985. Mr. Schrader holds an M.B.A.
from Harvard Business School and several undergraduate and graduate degrees in
engineering from MIT.
Debra McClister -- Executive Vice President and Chief Financial Officer
Ms. McClister has served as Executive Vice President and Chief Financial
Officer of EasyLink Services since July 1998. Prior to joining EasyLink
Services, Ms. McClister held a variety of executive positions at Philips
Media, and most recently served as Chief Operating Officer of Philips Media
Software from 1996 to 1997. She was the Senior Vice President and Chief
Financial Officer for Philips Media, North America from 1995 to 1996,
Corporate Vice President and Controller for Philips Electronics, North America
from 1988 to 1995 and she held various positions at Philips Electronics from
1984 to 1988. Ms. McClister also worked in financial management for Hitachi
America from 1981 to 1984. Ms. McClister received her B.S. in Commerce from
Rider University and is a Certified Public Accountant.
David Ambrosia -- Executive Vice President and General Counsel
Mr. Ambrosia joined EasyLink Services as Executive Vice President and
General Counsel in May 1999. Prior to joining EasyLink Services, Mr. Ambrosia
was engaged in the private practice of law in the field of corporate law with
an emphasis on securities offerings and mergers and acquisitions. From January
1990 through June 1999, he was a partner at Winthrop, Stimson, Putnam &
Roberts. From September 1982 until December 1989, he was an associate at
Winthrop, Stimson, Putnam & Roberts. Mr. Ambrosia received his B.S. from the
School of Industrial and Labor Relations at Cornell University, his M.B.A.
from the Johnson Graduate School of Management at Cornell University and his
J.D. from the Cornell Law School.
Executive Compensation
The following table presents certain summary information concerning the
compensation awarded to, earned by, or paid for services rendered to EasyLink
Services in all capacities during the fiscal year ended December 31, 2000, by
each person who served as Chief Executive Officer of EasyLink Services during
2000, each of the four other most highly compensated executive officers whose
salary and bonus exceeded $100,000 in 2000 and two
12
additional executive officers who would have been among such four most highly
compensated executives but for the fact that they were not executive officers
at the end of 2000 (collectively, the "Named Executive Officers"). No other
executive who would otherwise have been included in this table on the basis of
salary and bonus earned for 2000 has resigned or otherwise terminated
employment during 2000.
Summary Compensation Table
Long-Term Compensation Awards
----------------------------------------------------------
Securities Securities Securities
Underlying Underlying Underlying Options
Options to Options to to purchase
purchase EasyLink puchase Asia.com India.com, Inc.
Annual Compensation Services Class A Inc. Class A Class A
Name and Principal Position -------------------
--------------------------- Year Salary Bonus Common Stock(1) Common Stock Common Stock
---- -------- ------ ----------------- ---------------- ------------------
Gerald Gorman ........................... 2000 $200,000 -- -- 100,000 100,000
Chairman(2) 1999 200,000 -- 5,360 -- --
1998 200,000 -- 23,720 -- --
Thomas Murawski ......................... 2000 236,378(3) -- 826,930 100,000 100,000
Chief Executive Officer(4) 1999 -- -- -- -- --
1998 -- -- -- -- --
Debra McClister ......................... 2000 185,792 -- 427,673 100,000 100,000
Executive Vice President and 1999 180,000 -- 10,000 -- --
Chief Financial Officer 1998 37,461(5) -- 340,573 -- --
David Ambrosia .......................... 2000 185,192 -- 362,060 100,000 100,000
Executive Vice President and 1999 90,000(6) -- 254,000 -- --
General Counsel 1998 -- -- -- -- --
Gary Millin ............................. 2000 144,806 -- 35,732 350,000 350,000
Chief Executive Officer 1999 132,000 11,500 1,725 -- --
World.com, Inc.(7) 1998 130,000 -- 29,267 -- --
Lon Otremba ............................. 2000 184,614 -- 5,100 100,000 100,000
Former Vice Chairman(8) 1999 200,000 -- 5,400 -- --
1998 180,000 -- 420,107 -- --
Samuel Kline ............................ 2000 174,260 -- 1,500,000 50,000 50,000
Former Chief Operating 1999 -- -- -- -- --
Officer(9) 1998 -- -- -- -- --
---------------
(1) Includes (i) annual bonus compensation earned for the year ended December
31, 1999, and foregone at the election of the Named Executive officers and
instead paid in the form of stock options as follows: Mr. Gorman, 5,360
options; Ms. McClister, 8,000 options; Mr. Ambrosia, 4,000 options; Mr.
Millin, 1,725 options and Mr. Otremba, 5,400 options and (ii) annual bonus
compensation earned for the year ended December 31, 1998, and foregone at
the election of the Named Executive officers and instead paid in the form
of stock options as follows: Mr. Gorman, 19,920 options; Ms. McClister,
10,573 options; Mr. Millin, 20,267 options and Mr. Otremba, 15,932 options.
The shares underlying options granted in 2000 include options issued in one
or more repricing transactions. In each repricing transaction, an equal
amount of outstanding options was cancelled. See "Options Granted in Fiscal
Year" below and related footnotes. Also excludes options held by Mr.
Murawski to purchase 269,008 shares existing prior to the acquisition of
NetMoves and assumed by EasyLink Services in the acquisition.
(2) Also served as Chief Executive Officer until October 26, 2000.
(3) Salary did not commence until February 8, 2000.
(4) Served as Chief Executive Officer of Mail.com Business Messaging Services,
Inc. from February 8, 2000 until October 26, 2000.
(5) Salary did not commence until October 19, 1998.
(6) Salary did not commence until July 1, 1999.
(7) Served as President until March 28, 2000.
(8) Served as Chief Operating Officer until March 28, 2000, President from
March 28, 2000 until October 26, 2000 and Vice Chairman from October 26,
2000 until November 7, 2000. All of Mr. Otremba's options to purchase
shares of Class A Common Stock of Asia.com, Inc. and India.com, Inc. were
cancelled upon termination of his employment relationship with EasyLink
Services.
13
(9) Served as Chief Operating Officer from April 4, 2000 until October 26,
2000. All of Mr. Kline's options to purchase shares of Class A Common Stock
of Asia.com, Inc. and India.com, Inc. were cancelled upon termination of
his employment relationship with EasyLink Services.
Option Grants in Fiscal Year
The following table provides certain information regarding stock options
granted to the Named Executive Officers during the year ended December 31,
2000. Unless otherwise noted in the footnotes, all options vest 25% on the
first anniversary of the date of grant and quarterly over the three years
thereafter. The table below includes the number of options granted in
repricing transactions disclosed in the footnotes. All options granted in a
repricing transaction vest at the same rate that they would have vested under
the original terms except that they cannot be exercised prior to November 15,
2001. If an employee's services are terminated voluntarily or for cause prior
to November 15, 2001, the employee's repriced options will be governed by
their original terms and the employee will lose the benefit of the repricing.
Individual Grants
-------------------------------------------------------
Potential Realizable
Percent of Value at Assumed
Number of Total Options Annual Rates of Stock
Securities Granted to Price Appreciation for
Underlying Employees in Exercise Option Terms(2)
Options Fiscal Year Price per Expiration ---------------------------------
Name
---- Granted(#)(1) (%) Share Date 5% 10%
------------- ------------- --------- ---------- --------------- ---------------
Gerald Gorman ..................... 2,680(3) 0.02% $16.13 03/12/2010 $ 27,195.52 $ 68,924.22
2,680 0.02 16.13 03/12/2010 27,195.52 68.924.22
100,000(4) 4.05 1.30 05/30/2010 81,784.61 207,274.58
100,000(5) 3.87 .59 05/30/2010 37,117.63 94,070.77
Thomas Murawski(6) ................ 8,563(7) 0.06 1.6875 04/18/2006 4,382.20 9,792.37
9,633(8) 0.06 1.6875 05/19/2007 6,081.68 13,987.50
38,533(9) 0.26 1.6875 12/09/2007 26,797.96 62,571.55
38,533(10) 0.26 1.6875 11/09/2008 31,016.94 74,274.07
19,266(11) 0.13 1.6875 12/05/2009 18,085.10 44,623.76
231,201(12) 1.55 1.6875 02/07/2010 222,247.31 551,107.40
125,000(13) 0.84 1.6875 05/30/2010 125,154.30 313,063.77
231,201 1.55 17.50 Cancelled Not applicable Not applicable
125,000 0.84 5.53 Cancelled Not applicable Not applicable
100,000(4) 4.05 1.30 05/30/2010 81,784.61 207,274.58
100,000(5) 3.87 .59 05/30/2010 37,117.63 94,070.77
Debra McClister(14) ............... 270,000(15) 1.81 1.6875 06/28/2008 205,297.60 486,623.88
40,000(16) 0.27 1.6875 09/13/2008 31,440.90 74,965.16
6,369(3) 0.04 1.6875 02/28/2009 5,364.03 12,953.74
4,204(17) 0.03 1.6875 02/28/2009 3,540.65 8,550.40
2,000(18) 0.01 1.6875 03/17/2009 1,695.93 4,100.86
8,550(19) 0.06 1.6875 02/28/2010 8,282.56 20,571.82
4,000(3) 0.03 1.6875 03/12/2010 3,891.94 9,675.64
4,000(20) 0.03 1.6875 03/12/2010 3,891.94 9,675.64
40,000(13) 0.27 1.6875 05/30/2010 40,049.38 100,180.41
100,000(4) 4.05 1.30 05/30/2010 81,784.61 207,274.58
100,000(5) 3.87 .59 05/30/2010 37,117.63 94,070.77
40,000 0.27 5.53 Cancelled Not applicable Not applicable
8,550 0.06 14.63 Cancelled Not applicable Not applicable
4,000 0.03 16.13 Cancelled Not applicable Not applicable
4,000 0.03 16.13 Cancelled Not applicable Not applicable
14
Individual Grants
-------------------------------------------------------
Potential Realizable
Percent of Value at Assumed
Number of Total Options Annual Rates of Stock
Securities Granted to Price Appreciation for
Underlying Employees in Exercise Option Terms(2)
Options Fiscal Year Price per Expiration -------------------------------
Name
---- Granted(#)(1) (%) Share Date 5% 10%
------------- ------------- --------- ---------- -------------- --------------
David Ambrosia(21) .................. 250,000(22) 1.68 1.6875 05/18/2009 217,267.65 527,862.18
4,030(19) 0.03 1.6875 02/28/2010 3,903.94 9,696.43
2,000(3) 0.01 1.6875 03/12/2010 1,945.97 4,837.82
2,000(20) 0.01 1.6875 03/12/2010 1,945.97 4,837.82
50,000(13) 0.34 1.6875 05/30/2010 50,061.72 125,225.51
100,000(4) 4.05 1.30 05/30/2010 81,784.61 207,274.58
100,000(5) 3.87 .59 05/30/2010 37,117.63 94,070.77
50,000 0.34 5.53 Cancelled Not applicable Not applicable
4,030 0.03 14.63 Cancelled Not applicable Not applicable
2,000 0.01 16.13 Cancelled Not applicable Not applicable
2,000 0.01 16.13 Cancelled Not applicable Not applicable
Gary Millin(23) ..................... 9,000(24) 0.06 1.6875 01/31/2008 6,411.60 15,029.97
12,209(3) 0.08 1.6875 02/28/2009 10,282.54 24,831.56
8,058(17) 0.05 1.6875 02/28/2009 6,786.57 16,388.95
2,370(19) 0.02 1.6875 02/28/2010 2,295.87 5,702.36
1,150(3) 0.01 1.6875 03/12/2010 1,118.93 2,781.74
575(20) 0.01 1.6875 03/12/2010 559.46 1,390.87
350,000(4) 14.08 1.30 05/30/2010 286,246.13 725,461.03
350,000(5) 13.54 .59 05/30/2010 129,911.71 329,247.70
2,370 0.02 14.63 Cancelled Not applicable Not applicable
1,150 0.01 16.13 Cancelled Not applicable Not applicable
575 0.01 16.13 Cancelled Not applicable Not applicable
Lon Otremba(25) ..................... 5,110(19) 0.03 14.63 02/28/2010 1,896.71 4,807.02
2,700(3) 0.02 16.13 03/12/2010 1,002.17 2,539.91
2,700(20) 0.02 16.13 03/12/2010 1,002.17 2,539.91
100,000(4) 4.05 1.30 Cancelled Not applicable Not applicable
100,000(5) 3.87 .59 Cancelled Not applicable Not applicable
Samuel Kline(26) .................... 500,000(27) 3.36 1.6875 04/03/2010 497,027.25 1,241,335.99
500,000 3.36 12.4375 Cancelled Not applicable Not applicable
500,000 3.36 5.53 Cancelled Not applicable Not applicable
50,000(4) 2.03 1.30 Cancelled Not applicable Not applicable
50,000(5) 1.93 .59 Cancelled Not applicable Not applicable
---------------
(1) Unless otherwise indicated by footnote to the number of shares, all share
numbers in this column represent the number of shares issuable upon
exercise of options to purchase shares of EasyLink Services Class A Common
Stock.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock appreciation of 5% and 10% compounded
annually from the date the respective options were granted based upon the
fair market value on the date of grant. These assumptions are not intended
to forecast future appreciation of EasyLink Services' stock price. The
amounts reflected in the table may not necessarily be achieved.
(3) These options are immediately exercisable.
(4) Represents the number of shares issuable upon the exercise of options to
purchase shares of Asia.com, Inc. Class A Common Stock.
(5) Represents the number of shares issuable upon the exercise of options to
purchase shares of India.com, Inc. Class A Common Stock.
(6) Of the 826,930 options to purchase shares of EasyLink Services reflected
for Mr. Murawski in the aggregate, 470,729 were issued in a repricing
transaction and concurrently 470,729 options were cancelled. Of the
470,729 options repriced, 356,201 were originally granted in 2000.
Excludes options to purchase 269,008 shares existing prior to the
acquisition of NetMoves Corporation and assumed by EasyLink Services in
the acquisition.
15
(7) These options became exercisable for 20% of the total shares on April 19,
1997, with the remainder vesting at a rate of 1/48th per month thereafter.
(8) These options became exercisable for 20% of the total shares on May 20,
1998, with the remainder vesting at a rate of 1/48th per month thereafter.
(9) These options became exercisable for 20% of the total shares on December
10, 1998, with the remainder vesting at a rate of 1/48th per month
thereafter.
(10) These options became exercisable for 20% of the total shares on November
10, 1999, with the remainder vesting at a rate of 1/48th per month
thereafter.
(11) These options became exercisable for 20% of the total shares on December
6, 2000, with the remainder vesting at a rate of 1/48th per month
thereafter.
(12) These options vest quarterly over two years beginning on February 8, 2000.
(13) These options become exercisable for 25% of the total shares on May 31,
2001, with the remainder vesting quarterly over the three years
thereafter.
(14) Of the 435,673 options to purchase shares of EasyLink Services reflected
for Ms. McClister in the aggregate, 379,123 were issued in a repricing
transaction and concurrently 379,123 options were cancelled. Of the
379,123 options repriced, 56,550 were originally granted in 2000.
(15) These options vest quarterly over four years commencing on June 29, 1998.
(16) These options vest quarterly over four years commencing on September 10,
1998.
(17) These options vest quarterly over four years commencing on March 1, 1999.
(18) These options vest quarterly over four years commencing on March 18, 1999.
(19) These options became exercisable for 25% of the total shares on March 1,
2001, with the remainder vesting quarterly over the three years
thereafter.
(20) These options became exercisable for 25% of the total shares on March 13,
2001, with the remainder vesting quarterly over the three years
thereafter.
(21) Of the 366,060 options to purchase shares of EasyLink Services reflected
for Mr. Ambrosia in the aggregate, 308,030 were issued in a repricing
transaction and concurrently 308,030 options were cancelled. Of the
308,030 options repriced, 58,030 were originally granted in 2000.
(22) These options vest quarterly over three years commencing on May 17, 1999.
(23) Of the 37,457 options to purchase shares of EasyLink Services reflected
for Mr. Millin in the aggregate, 33,362 were issued in a repricing
transaction and concurrently 33,362 options were cancelled. Of the 33,362
options repriced, 4,095 were originally granted in 2000.
(24) These options vest quarterly over four years commencing on December 31,
1997.
(25) All of Mr. Otremba's options to purchase shares of Class A Common Stock of
Asia.com, Inc. and India.com, Inc. were cancelled upon termination of his
employment relationship with EasyLink Services.
(26) Mr. Kline's 500,000 options issued on May 30, 2000 and November 14, 2000
were issued in a repricing transaction and concurrently 500,000 options
were cancelled on each date. All of Mr. Kline's options to purchase shares
of Class A Common Stock of Asia.com, Inc. and India.com, Inc. were
cancelled upon termination of his employment relationship with EasyLink
Services.
(27) These options became exercisable for 25% of the total shares on April 4,
2001, with the remainder vesting quarterly over the three years
thereafter.
16
Stock Option Exercises and December 31, 2000 Stock Option Value Table
The following table sets forth certain information concerning stock options
exercised during 2000 by the Named Executive Officers and the number and value
of specified options held by those persons at December 31,2000.The values of
unexercised in-the-money stock options at December 31,2000 shown below are
presented pursuant to SEC rules. There is no assurance that the values of
unexercised in-the-money stock options reflected in this table will be
realized.
Number of
Shares Securities Underlying Value of Unexercised
Acquired Unexercised Options At In-the-Money Options at
on Value December 31, 2000(2) December 31, 2000(3)
Name
---- Exercise(#) Realized($)(1) Exerciseable Unexercisable Exercisable Unexercisable
----------- -------------- ------------ ------------- ----------- -------------
Gerald Gorman ...................... 0 $ 0 543,495 8,085 $263,950 $ 0
0 0 0 100,000(4) 0 0
0 0 0 100,000(5) 0 0
Thomas Murawski .................... 0 0 210,310 414,899 0 0
0 0 0 100,000(4) 0 0
0 0 0 100,000(5) 0 0
Debra McClister .................... 20,000 178,750 191,890 187,233 0 0
0 0 0 100,000(4) 0 0
0 0 0 100,000(5) 0 0
David Ambrosia ..................... 0 0 127,000 181,030 0 0
0 0 0 100,000(4) 0 0
0 0 0 100,000(5) 0 0
Gary Millin ........................ 0 0 562,634 9,728 176,340 0
0 0 0 350,000(4) 0 0
0 0 0 350,000(5) 0 0
Lon Otremba ........................ 0 0 816,704 0 0 0
Samuel Kline ....................... 0 0 0 500,000 0 0
---------------
(1) Amounts disclosed in this column were calculated based on the difference
between the fair market value of the Company's Class A Common Stock on the
date of exercise and the exercise price of the options in accordance with
regulations promulgated under the Securities Exchange Act of 1934, as
amended, and do not reflect amounts actually received by the Named
Executive Officers.
(2) Unless otherwise indicated by footnote to the number of shares, all share
numbers in this column represent the number of shares issuable upon
exercise of options to purchase shares of EasyLink Services Class A Common
Stock.
(3) Value is based on the difference between the option exercise price and the
fair market value at December 31, 2000, the fiscal year-end ($0.72 per
share in the case of options to purchase EasyLink Services Class A Common
Stock and otherwise below the exercise price in the case of options to
purchase shares of Asia.com, Inc. and India.com Class A Common Stock),
multiplied by the number of shares underlying the option.
(4) Represents the number of shares issuable upon the exercise of options to
purchase shares of Asia.com, Inc. Class A Common Stock.
(5) Represents the number of shares issuable upon the exercise of options to
purchase shares of India.com, Inc. Class A Common Stock.
17
Ten Year Option Repricings
The following table sets forth certain information concerning the repricings
of options held by the Named Executive Officers of the Company over the past
ten years:
Number of Length of
Securities Market Price Original Option
Underlying of Stock at Exercise Price Term Remaining
Options/SARs Time of at Time of at Date of
Name Repriced or Repricing or Repricing or New Exercise Repricing or
---- Date Amended(#) Amendment($) Amendment($) Price($) Amendment
------------------- ---------- ------------ ------------ -------------- ------------ ---------------
Thomas Murawski ................... 11/14/2000 8,563 $1.6875 $ 9.35 $1.6875 5.6 years
Chief Executive Officer 11/14/2000 9,633 1.6875 3.90 1.6875 6.5 years
11/14/2000 38,533 1.6875 6.49 1.6875 7.2 years
11/14/2000 38,533 1.6875 8.44 1.6875 8.0 years
11/14/2000 19,266 1.6875 11.19 1.6875 9.1 years
11/14/2000 231,201 1.6875 17.50 1.6875 9.8 years
11/14/2000 125,000 1.6875 5.53 1.6875 9.5 years
Debra McClister ................... 11/14/2000 40,000 1.6875 3.50 1.6875 7.2 years
Executive Vice President and 11/14/2000 270,000 1.6875 3.50 1.6875 7.4 years
Chief Financial Officer 11/14/2000 10,573 1.6875 5.00 1.6875 8.7 years
11/14/2000 2,000 1.6875 5.00 1.6875 8.6 years
11/14/2000 40,000 1.6875 5.53 1.6875 9.5 years
11/14/2000 8,550 1.6875 14.63 1.6875 9.7 years
11/14/2000 8,000 1.6875 16.13 1.6875 9.7 years
David Ambrosia .................... 11/14/2000 250,000 1.6875 7.00 1.6875 8.5 years
Executive Vice President and 11/14/2000 50,000 1.6875 5.53 1.6875 9.5 years
General Counsel 11/14/2000 4,030 1.6875 14.63 1.6875 9.7 years
11/14/2000 4,000 1.6875 16.13 1.6875 9.7 years
Gary Millin ....................... 11/14/2000 9,000 1.6875 3.50 1.6875 7.8 years
Chief Executive Officer, 11/14/2000 20,267 1.6875 5.00 1.6875 8.7 years
World.com, Inc. 11/14/2000 2,370 1.6875 14.63 1.6875 9.7 years
11/14/2000 1,725 1.6875 16.13 1.6875 9.7 years
Samuel Kline ...................... 05/31/2000 500,000(1) 5.53 12.4375 5.53 9.9 years
Former Chief Operating Officer 11/14/2000 500,000 1.6875 5.53 1.6875 9.5 years
---------------
(1) These options have been cancelled in connection with the repricing
transaction on November 14, 2001.
Employment, Severance and Other Arrangements
EasyLink Services' current employment agreement with Gerald Gorman is dated
April 1, 1999. The agreement provides that Mr. Gorman is to receive a base
salary of $200,000 per year. Mr. Gorman's base salary and bonus amount are
adjustable on an annual basis at the sole discretion of the Compensation
Committee. Additionally, the agreement provides that after Mr. Gorman leaves
the employ of EasyLink Services, he will not work for a competitor during the
two year period following his employment or disclose any of its confidential
information.
EasyLink Services' current employment agreement with Thomas Murawski became
effective upon the consummation of the acquisition of NetMoves Corporation on
February 8, 2000. Under the agreement, Mr. Murawski is entitled to receive an
annual base salary of $250,000. Under a management continuity agreement
assumed by EasyLink Services in the acquisition, Mr. Murawski is entitled to a
severance payment and continued health benefits if his employment is
terminated under specified circumstances within 18 months after February 8,
2000. The severance payment equals 18 months base salary from February 8, 2000
less the actual salary received for the period after February 8, 2000. Under a
severance agreement, if Mr. Murawski's employment is terminated under
specified circumstances within the 24 month period after February 8, 2000, he
is entitled to the acceleration of the vesting of all of his options in
existence before the consummation of the acquisition on February 8, 2000 that
vest within 2 years after the termination. The management and continuity
agreement and severance
18
agreement terminate 18 months and 24 months, respectively, after February 8,
2000. Mr. Murawski is also subject to confidentiality and non-competition
covenants applicable to the other EasyLink Services executives.
EasyLink Services' current employment agreement with Debra McClister is
dated April 1, 1999. Ms. McClister receives an annual base salary of $190,000
which will be reviewed each year, and an annual bonus between 15%-45% of base
annual salary. Ms. McClister's employment agreement with EasyLink Services,
dated June 29, 1998, provides that in the event that EasyLink Services is sold
to a third party, Ms. McClister's options will be converted into options to
acquire the third party's stock, with an equivalent value and the same
remaining vesting period as her EasyLink Services options. In the event that
Ms. McClister's position at EasyLink Services is eliminated, replaced or taken
over by the third party in connection with an acquisition, merger or transfer
of a majority interest, EasyLink Services will attempt to offer Ms. McClister
a comparable senior management position with the same compensation, commuting
and travel requirements. In the event that such a position is not offered to
Ms. McClister, she will be entitled to a severance package comprised of (a)
six months base salary, (b) annual bonus pro rated for the portion of the year
worked and (c) immediate vesting of 50% of her remaining unvested options.
Additionally, her current employment agreement provides that after Ms.
McClister leaves the employ of EasyLink Services, she will not work for a
competitor during the two year period following her employment or disclose any
confidential information.
EasyLink Services' employment agreement with David Ambrosia is dated May 19,
1999. Mr. Ambrosia receives an annual base salary of $190,000 which will be
reviewed each year, and an annual bonus between 15%-30% of base annual salary.
If an acquisition, merger, consolidation or transfer of control occurs, Mr.
Ambrosia is entitled to severance and other arrangements, including rights
similar to those contained in Ms. McClister's agreement. Additionally, Mr.
Ambrosia's employment agreement provides that after he leaves our employ, he
will not work for a competitor during the two year period following his
employment or disclose any confidential information.
EasyLink Services' employment agreement with Gary Millin is dated April 1,
1999. Mr. Millin receives an annual base salary of $150,000. Mr. Millin's base
salary and bonus amount are adjustable in the sole discretion of the Chief
Executive Officer of EasyLink Services and the Compensation Committee.
Additionally, the agreement provides that after Mr. Millin leaves the employ
of EasyLink Services, he will not work for a competitor during the two year
period following his employment or disclose any of its confidential
information.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
EasyLink Services' Compensation Committee is responsible for administering
the Company's executive compensation policies and administers the Company's
stock option plans.
Compensation Philosophy
Compensation to executive officers is designed to attract and retain
outstanding executive talent, to motivate and reward their performance in
support of our strategic, financial and operating objectives. The Company has
designed compensation programs to create a direct relationship between the
level of compensation paid to executives and the Company's current and long-
term level of performance. The components of these programs are base salary,
short-term compensation in annual bonuses and long-term incentive compensation
in the form of stock options.
Base Salaries
The base salaries for our executive officers are determined annually by
reviewing the competitive pay practices of companies engaged in businesses
similar to ours. The salaries were established to attract and retain the
leadership and skill necessary to build long-term shareholder value.
Short-Term Annual Bonuses
Annual bonuses for executive officers are intended to provide an incentive
for achieving short-term financial and performance objectives. Bonus targets
are established based on predetermined annual goals.
19
Long-Term Incentive Compensation
The EasyLink Services stock option plans provide long-term incentives for
executive officers and other key employees. The Compensation Committee
believes that a significant portion of executive compensation should create a
direct link between executive compensation and increases in stockholder value.
Stock options are granted at fair market value and vest in installments,
generally over four years. In selecting recipients for option grants, the
Committee considers the executive's current contribution to Company
performance, the anticipated contribution to meeting the Company's long-term
strategic performance goals, and industry practices and norms. Long term
incentives granted in prior years and existing levels of stock ownership are
also taken into consideration.
Chief Executive Officer Compensation
Mr. Murawski's base salary, annual incentive award and long-term incentive
compensation are determined by the Committee based upon the same factors as
those employed by the Committee for executive officers generally. Mr.
Murawski's current annual base salary is $250,000.
The Compensation Committee will evaluate the Company's compensation policies
on an ongoing basis to determine whether they enable the Company to attract,
retain and motivate key personnel. To meet these objectives, the Company may
from time to time increase salaries, award additional stock options or provide
other short-and long-term incentive compensation to executive officers,
including Mr. Murawski.
Under Section 162(m) of the Internal Revenue Code of 1986, compensation
payments in excess of $1 million to the Chief Executive Officer or the other
four most highly compensated executive officers are subject to a limitation on
deductibility for the Company. Certain performance-based compensation is not
subject to the limitation on deductibility. The Compensation Committee does
not expect cash compensation in 2001 to its Chief Executive Officer or any
other executive officer to be in excess of $1 million. The Company intends to
maintain qualification of its 1999, 2000 and 2001 Stock Option Plans for the
performance-based exception to the $1 million limitation on deductibility of
compensation payments.
Report on Repricing of Options
During the second quarter of 2000, there was a significant decrease in the
market price of the Company's Class A Common Stock. As a result of the
decline, a significant portion of the Company's stock options had exercise
prices substantially above the market price. To address this situation, the
Board of Directors decided to grant additional options to employees at the
then current market price. In lieu of granting additional options to Samuel
Kline, our Chief Operating Officer, the Board of Directors repriced his
options to current market price. On April 4, 2000, the date his initial
employment with EasyLink Services commenced, Mr. Kline received a grant of
500,000 options with an exercise price equal to $14.4375 per share, the fair
market value on the date of grant. On May 31, 2000, after the market price
declined, the exercise price of Mr. Kline's options was repriced to $5.53, the
fair market value on the date of the repricing.
During the first half of the fourth quarter of 2000, the Company experienced
another significant decrease in the market price of its Class A Common Stock,
which resulted in many of the Company's outstanding options having exercise
prices substantially in excess of the market price. At the same time, the
Company announced a strategy to focus exclusively on outsourced messaging
services for businesses and a restructuring plan that resulted in significant
headcount reductions. In order to motivate and retain continuing employees,
the Board of Directors decided to offer all employees (other than Gerald
Gorman) the ability to reprice all or a portion of their options that had an
exercise price above $3.00 to a price of $1.6875 per share, the fair market
value on the date of the repricing. Options to purchase an aggregate of
6,327,986 shares (including the 500,000 options repriced on May 31) were
repriced. The repriced options will vest at the same rate that they would have
vested under the original terms except that they cannot be exercised prior to
November 15, 2001. If an employee's services are terminated voluntarily or for
cause prior to November 15, 2001, the employee's repriced options will be
governed by their original terms and the employee will lose the benefit of the
repricing.
20
For additional information regarding repriced options held by executive
officers, see "Summary Compensation Table" and the footnotes thereto and "Ten
Year Option Repricings" above.
Submitted by the Compensation Committee
of the Board of Directors
William Donaldson
Stephen Ketchum
AUDIT COMMITTEE REPORT
The following is the report of the Audit Committee of the Board of
Directors. The Audit Committee has reviewed and discussed the audited
financial statements of the Company for the fiscal year ended December 31,
2000 with management. In addition, the Audit Committee has discussed with KPMG
LLP, the Company's independent auditors, the matters required to be discussed
by Statement on Auditing Standards No. 61 (Communications with Audit
Committee). The audit committee also has received the written disclosures and
the letter from KPMG LLP as required by the Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees) and the Audit
Committee has discussed the independence of KPMG LLP with that firm.
Based on the Audit Committee's review of the matters noted above and its
discussions with the Company's independent auditors and the Company's
management, the Audit Committee recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2000. This report has been provided
by William Donaldson, Stephen Ketchum and Gary Millin, the members of the
Audit Committee.
Submitted by the Audit Committee
of the Board of Directors
William Donaldson
Stephen Ketchum
Gary Millin
TRANSACTIONS WITH MANAGEMENT AND DIRECTORS
Loan to Mr. Murawski
In 1998, NetMoves Corporation, now named Mail.com Business Messaging
Services, Inc. and a wholly-owned subsidiary of EasyLink Services, granted a
loan to Thomas Murawski, its President and Chief Executive Officer, in the
amount of $199,999. The loan bears interest at the rate of 5% per annum and is
payable in November, 2003.
Federal Partners, L.P. Financing
On January 8, 2001, we issued $5,000,000 principal amount of 10% Senior
Convertible Notes due January 8, 2006 to Federal Partners, L.P. On March 20,
2001, we issued to Federal Partners, L.P. 3,000,000 shares of our Class A
Common Stock for a purchase price of $3,000,000, and we committed to issue to
Federal Partners an additional 1,000,000 shares of Class A Common Stock if the
closing price of our Class A Common Stock on the principal securities exchange
on which they are traded is not at or above $10 per share for 5 consecutive
days on or before December 31, 2001. In connection with the issuance of the
senior convertible notes on January 8, 2001, we granted to Federal Partners,
L.P. the right to designate one director to our Board of Directors so long as
Federal Partners, L.P. and other persons associated with it owns at least
3,000,000 shares of Class A Common Stock, including shares issuable upon
conversion of or in payment of interest on the senior convertible notes.
Federal Partners, L.P. designated Stephen Duff and he was appointed to our
Board on January 8, 2001. Mr. Duff is a Senior Investment Manager for The
Clark Estates, Inc. and is Treasurer and a limited partner of Federal
Partners, L.P. The Clark Estates, Inc. provides management and administrative
services for Federal Partners, L.P.
21
Through his limited partnership interest in Federal Partners, L.P., Mr. Duff
has an indirect interest in $10,000 principal amount of the senior convertible
notes issued on January 8, 2001 and in 6,000 of the shares of Class A Common
Stock issued to Federal Partners, L.P. on March 20, 2001.
Acquisition of Swift Telecommunications, Inc.
We acquired Swift Telecommunications, Inc. on February 23, 2001. George Abi
Zeid was the sole shareholder of Swift Telecommunications, Inc. In connection
with the acquisition, Mr. Abi Zeid was elected to the Board of Directors of
the Company and was appointed President - International Operations. EasyLink
Services paid $835,294 in cash, issued 18,766,176 shares of Class A Common
Stock and issued a promissory note in the original principal amount of
approximately $9.2 million to Mr. Abi Zeid in payment of the purchase price
for the acquisition payable at the closing. EasyLink Services will also pay
additional contingent consideration to Mr. Abi Zeid equal to the amount of the
net proceeds, after satisfaction of certain liabilities of STI and its
subsidiaries, from the sale or liquidation of the assets of one of STI's
subsidiaries. The $9.2 million note will be payable in four equal semi-annual
installments over two years and may be prepaid in whole or in part at any time
and from time to time without payment of premium or penalty. The note will be
non-interest bearing unless EasyLink Services fails to make a required payment
within 30 days after the due date therefore. Thereafter, the note will bear
interest at the rate of 10% per annum. The note also contains certain
customary events of default.
In connection with the acquisition by STI on January 31, 2001 of the
EasyLink services business from AT&T Corp., Mr. Abi Zeid pledged to AT&T Corp.
under a Pledge Agreement dated January 31, 2001 all of the shares of EasyLink
Services Class A Common Stock that he was entitled to receive pursuant to the
acquisition to secure a $35 million note issued to AT&T Corp. by STI and
assumed by EasyLink Services as part of the purchase price for the EasyLink
Services business.
In connection with the STI acquisition, EasyLink Services also agreed to
acquire Telecom International, Inc. (which is an affiliate of STI and conducts
business under the name "AlphaTel") and the 25% minority interests in two STI
subsidiaries for $164,705 in cash, promissory notes in the aggregate principal
amount of approximately $1.8 million and 3.7 million shares of EasyLink
Services Class A Common Stock. These additional transactions are subject to
receipt of regulatory approvals and other customary conditions.
Fax-2 Acquisition
Under an Exclusivity and Royalty Agreement among Daniel Kuehler, Kurt Winter
and EasyLink Services dated May 30, 2000, EasyLink Services acquired from
Messrs. Kuehler and Winter the rights to develop, market and deploy the Fax-2
business concept. Fax-2 allows users to send faxes to any email address. Mr.
Kuehler is the son of Jack Kuehler, a director of EasyLink Services. Each of
Messrs. Kuehler and Winter received 10,000 shares of EasyLink Services Class A
Common Stock upon execution of the agreement and are entitled to a 10% royalty
up to $100,000 on all revenue generated by Fax-2 and thereafter a 1% royalty
on such revenue so long as specified performance and operating conditions are
maintained. Mr. Kuehler also entered into an employment agreement which
entitled him to receive full compensation and benefits through June 15, 2001
if his employment is terminated before then for any reason other than cause.
Mr. Kuehler also received on June 15, 2000 a grant of options to purchase
30,000 shares of EasyLink Services' Class A common stock at an exercise price
equal to the fair market value at the time of grant. These options vest over
four years.
Transaction with Onview.com, Inc.
On June 30, 2000, EasyLink Services received 35,714 shares of common stock
of Onview.com, Inc. valued at $125,000 as payment for advertising services
provided to Onview.com. Stephen Ketchum, a director of EasyLink Services, is
the chief executive officer and a shareholder and director of Onview.com.
STOCK PERFORMANCE GRAPH
Set forth below is a graph comparing the percentage change in the cumulative
stockholder return on our Class A Common Stock from June 18, 1999 (the date of
the initial public offering) to the last day of our last completed fiscal
year. The cumulative stockholder return is measured by dividing:
22
o the sum of (A) the cumulative amount of dividends for the measurement
period, assuming dividend reinvestment, and (B) the excess of our share
price as of the end of the measurement period over the price at the
beginning of the measurement period, by
o the share price at the beginning of the measurement period.
The cumulative total return on our Class A Common Stock is compared with the
Nasdaq Stock Market (U.S.) Index and the Chase H&Q Internet Index.
Cumulative Total Return* from June 18, 1999
to December 31, 2000 of EasyLink Services
Class A Common Stock, the NASDAQ Stock Market
(U.S.) Index and the Chase H&Q Internet Stock
6/18/99 12/31/99 12/31/00
EasyLink Services Corporation 100 267.86 10.27
NASDAQ Market Index 100 159.18 95.78
Chase H&Q Internet Index 100 223.23 85.89
*Assumes $100 invested on June 18, 1999 in stock or index, including
reinvestment of dividends. Fiscal year ending December 31, 2000.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of EasyLink Services which are intended to be
presented by such stockholders at EasyLink Services' 2002 Annual Meeting of
Stockholders must be received by EasyLink Services no later than November 30,
2001 to be included in the proxy statement and form of proxy relating to that
meeting. The deadline for submitting a stockholder's proposal that will not be
included in the proxy statement and form of proxy for EasyLink Services' 2002
Annual Meeting of Stockholders but nonetheless will be eligible for
consideration is March 25, 2002.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires EasyLink Services' directors,
executive officers and persons who own more than 10% of EasyLink Services'
Class A Common Stock (collectively, "Reporting Persons") to file with the
Securities and Exchange Commission ("SEC") initial reports of ownership and
changes in ownership of EasyLink Services' Class A Common Stock. Reporting
Persons are required by SEC regulations to furnish EasyLink Services with
copies of all Section 16(a) reports they file. To EasyLink Services'
knowledge, based solely on its review of the copies of such reports received
or written representations from certain Reporting Persons that no other
reports were required, EasyLink Services believes that during 2000 all
Reporting Persons
23
complied with all applicable filing requirements except that one Form 4
relating to a single grant of options was inadvertently filed late on behalf
of Mr. Aaron Fessler, former President of our subsidiary The Allegro Group,
Inc., and one Form 4 relating to a single grant of options to Mr. Bradley
Schrader was inadvertently filed late on behalf of Mr. Schrader.
FORM 10-K
Shareholders entitled to vote at the Annual Meeting may obtain for no charge
a copy of the Company's Annual Report on Form 10-K, without exhibits, for the
year ended December 31, 2000, upon written request to Investor Relations,
EasyLink Services Corporation, 399 Thornall Street, Edison, NJ 08837.
OTHER MATTERS
The Board knows of no other business that will be presented to the Annual
Meeting. If any other business is properly brought before the Annual Meeting,
proxies in the enclosed form will be voted in respect thereof as the proxy
holders deem advisable.
It is important that the proxies be returned promptly and that your shares
be represented. Stockholders are urged to mark, date, execute and promptly
return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
/s/ David W. Ambrosia
DAVID W. AMBROSIA
Executive Vice President, General
Counsel and Secretary
24
APPENDIX A
AUDIT COMMITTEE CHARTER
Organization
There shall be a committee of the board of directors to be known as the
audit committee. The audit committee shall be composed of directors who are
independent of the management of the corporation and are free of any
relationship that, in the opinion of the board of directors, would interfere
with their exercise of independent judgment as a committee member.
Statement of Policy
The audit committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders
and investment community relating to corporate accounting, reporting practices
of the corporation, and the quality and integrity of the financial reports of
the corporation. In so doing, it is the responsibility of the audit committee
to maintain free and open means of communication between the directors, the
independent auditors, the internal auditors, and the financial management of
the corporation.
Responsibilities
In carrying out its responsibilities, the audit committee believes its
policies and procedures should remain flexible, in order to best react to
changing conditions and to ensure to the directors and shareholders that the
corporate accounting and reporting practices of the corporation are in
accordance with all requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
o Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the corporation and its
divisions and subsidiaries
o Confirm and assure the independence of the independent auditors,
including a review of management consulting services and related fees
provided by the independent auditors, and the independent auditors'
accountability to the board and the audit committee.
o Meet with the independent auditors and financial management of the
corporation to review the scope of the proposed audit for the current
year and the audit procedures to be utilized, and at the conclusion
thereof review such audit, including any comments or recommendations of
the independent auditors.
o Review with the independent auditors, the company's internal auditor
(when the function is established), and financial and accounting
personnel, the adequacy and effectiveness of the accounting and financial
controls of the corporation, and elicit any recommendations for the
improvement of such internal control procedures or particular areas where
new or more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal controls to
expose any payments, transactions, or procedures that might be deemed
illegal or otherwise improper. Further, the committee periodically should
review company policy statements to determine their adherence to the code
of conduct.
o Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to determine
that the independent auditors are satisfied with the disclosure and
content of the financial statements to be presented to the shareholders.
Any changes in accounting principles should be reviewed.
o Provide sufficient opportunity for the internal and independent auditors
to meet with the members of the audit committee without members of
management present. Among the items to be discussed in these meetings are
the independent auditors' evaluation of the corporation's financial,
accounting, and auditing personnel, and the cooperation that the
independent auditors received during the course of the audit.
o Submit the minutes of all meetings of the audit committee to, or discuss
the matters discussed at each committee meeting with, the board of
directors.
o Investigate any matter brought to its attention within the scope of its
duties, with the power to retain outside counsel for this purpose if, in
its judgment, that is appropriate.
A-1
APPENDIX B
EASYLINK SERVICES CORPORATION
2001 STOCK OPTION PLAN
1. Purpose
The purpose of the EasyLink Services Corporation 2001 Stock Option Plan (the
"Plan") is to provide for the grant of stock options as an incentive to
selected directors, officers, employees and consultants of EasyLink Services
Corporation (the "Company") and any Subsidiary of the Company, to acquire a
proprietary interest in the Company, to continue as directors, officers,
employees and consultants and to increase their efforts on behalf of the
Company.
2. Definitions
As used in the Plan, the following terms shall have the meanings set forth
below:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and any regulations promulgated thereunder.
(c) "Committee" shall mean the committee described in Section 3.
(d) "Company" shall mean EasyLink Services Corporation, a Delaware
corporation, and any successor corporation.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(f) "Fair Market Value" means, as of any date, the value of Stock or
other property determined as follows:
(i) If the Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock
Market, its Fair Market Value shall be the closing sales price for
such Stock (or the closing bid, if no sales were reported) as quoted
on such exchange or system for the last market trading day prior to
the time of determination, as reported in The Wall Street Journal or
such other source as the Committee deems reliable;
(ii) If the Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the
Stock for the last market trading day prior to the time of
determination; or
(iii) In the absence of an established market for the Stock, or
if Fair Market Value is in reference to property other than Stock,
the Fair Market Value thereof shall be determined in good faith by
the Committee.
(g) "Grantee" shall mean an officer, director, employee or consultant
of the Company to whom an Option has been granted under the terms of the
Plan.
(h) "Incentive Stock Option" shall mean an option granted under the
Plan that is intended to meet the requirements of Section 422 of the Code
or any successor provision.
(i) "Nonemployee Director" shall mean a director of the Company who is
a "nonemployee director" within the meaning of Rule 16b-3.
(j) "Non-Qualified Stock Option" shall mean an option granted under the
Plan that is not intended to be an Incentive Stock Option.
(k) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option.
B-1
(l) "Option Agreement" shall mean a written agreement between the
Company and a Grantee as described in Section 6.
(m) "Outside Director" shall mean a director of the Company who is an
"outside director" within the meaning of Section 162(m) of the Code.
(n) "Plan" shall mean this EasyLink Services Corporation 2001 Stock
Option Plan, as amended from time to time.
(o) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as
amended, or any successor rule or regulation.
(p) "Stock" shall mean shares of Class A Common Stock, $.01 par value,
of the Company or such other securities or property as may become subject
to Options pursuant to an adjustment made under Section 8.
(q) "Subsidiary" shall mean any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of
the corporations other than the last corporation in the unbroken chain
owns more than 50% of the total combined voting power of all classes of
stock in one of the other corporations in such chain.
3. Administration
(a) The Plan shall be administered by a committee (the "Committee")
designated by the Board. The Committee shall consist of at least two
directors and may consist of the entire Board; provided, however, that
(i) if the Committee consists of less than the entire Board, each member
shall be a Nonemployee Director and (ii) to the extent necessary for an
Option intended to qualify as performance-based compensation under
Section 162(m) of the Code to so qualify, each member of the Committee
shall be an Outside Director.
(b) The Committee shall have plenary authority in its discretion,
subject only to the express provisions of the Plan and, in reference to
the Incentive Stock Options, to Code Section 422:
(i) to select the Grantees, the number of shares of Stock subject
to each Option and terms of the Option granted to each Grantee
(including without limitation the exercise price, the period during
which such Option can be exercised and any restrictions on
exercise), provided that, in making its determination, the Committee
shall consider the position and responsibilities of the individual,
the nature and value to the Company of his or her services and
accomplishments, the individual's present and potential contribution
to the success of the Company and any other factors that the
Committee may deem relevant;
(ii) to determine the dates of the Option grants;
(iii) to prescribe the form of the Option Agreements;
(iv) to adopt, amend and rescind rules and regulations for the
administration of the Plan and for its own acts and proceedings;
(v) to decide all questions and settle all controversies and
disputes of general applicability that may arise in connection with
the Plan; and
(vi) to modify or amend any outstanding Option as provided in
Section 7(h).
All decisions, determinations and interpretations with respect to the
foregoing matters shall be made by the Committee and shall be final and
binding upon all persons.
(c) Delegation. The Committee may delegate authority to an officer of
the Company to grant Options to Grantees who are not subject to the
short-swing profit rules of Section 16 of the Exchange Act and are not
"covered employees" whose compensation is subject to the deduction limit of
Section 162(m) of the Code, at the discretion of such appointed officer,
provided, however, that the appointed officer shall have no authority to
grant Options in units greater than 80,000 without approval of the
Committee.
B-2
(d) Exculpation. No member of the Board or Committee shall be
personally liable for monetary damages for any action taken or any failure
to take any action in connection with the administration of the Plan or the
granting of Options under it unless such action or failure to take action
constitutes self-dealing, willful misconduct or recklessness; provided,
however, that the provisions of this subsection shall not apply to the
responsibility or liability of a director pursuant to any criminal statute
or to the liability of a director for the payment of taxes pursuant to
local, state or federal law.
(e) Indemnification. Each member of the Board or Committee shall be
entitled without further act on his part or her part to indemnity from the
Company to the fullest extent provided by applicable law and the Company's
Certificate of Incorporation or Bylaws in connection with or arising out of
any action, suit or proceeding with respect to the administration of the
Plan or the granting of Options under it in which he or she may be involved
by reason of being or having been a member of the Board or Committee at the
time of the action, suit or proceeding.
4. Effectiveness and Termination of the Plan
The Plan shall become effective as of May 24, 2001, provided that the Plan
is approved by the stockholders of the Company within one year of its
adoption. Any Option outstanding at the time of termination of the Plan shall
remain in effect in accordance with its terms and conditions and those of the
Plan. The Plan shall terminate on the earliest of:
(a) May 24, 2011; or
(b) the date when all shares of Stock reserved for issuance under
Section 5 of the Plan shall have been acquired through exercise of
Options granted under the Plan; or
(c) such earlier date as the Board may determine.
5. The Stock
The aggregate number of shares of Stock issuable under the Plan shall be two
million five hundred thousand shares (2,500,000) or the number and kinds of
shares of capital stock or other securities substituted for the Stock as
provided in Section 8. The aggregate number of shares of Stock issuable under
the Plan may be set aside out of the authorized but unissued shares of Stock
not reserved for any other purpose, or out of shares of Stock held in or
acquired for the treasury of the Company. All shares of Stock subject to an
Option that terminates unexercised for any reason may thereafter be subjected
to a new Option under the Plan.
6. Option Agreement
Each Grantee shall enter into an Option Agreement with the Company setting
forth the terms and conditions of the Option issued to the Grantee, consistent
with the Plan. The form of Option Agreement may be established at any time or
from time to time by the Committee. No Grantee shall have rights in any Option
unless and until an Option Agreement is entered into with the Company.
7. Terms and Conditions of Options
Options may be granted by the Committee at any time and from time to time
prior to the termination of the Plan. Except as hereinafter provided, Options
granted under the Plan shall be subject to the following terms and conditions:
(a) Grantees. The Grantees shall be those employees of the Company or
its Subsidiaries (including officers and directors), and those
consultants to the Company or its Subsidiaries, selected by the
Committee. No Incentive Stock Options shall be granted to (i) any person
owning Stock or other capital stock in the Company possessing more than
10% of the total combined voting power of all classes of capital stock of
the Company, unless such Incentive Stock Option meets the requirements of
7(b) and 7(e); or (ii) any director who is not an officer. The maximum
number of shares of Stock which may be issued pursuant to Options granted
to a Grantee within a calendar year is 1,000,000.
B-3
(b) Price. The exercise price of each Option shall be determined by
the Committee at the time of grant, and in the case of an Incentive Stock
Option shall be no less than the Fair Market Value of the Stock, without
regard to any restriction, at the time the Incentive Stock Option is
granted. If a Grantee owns more than 10% of the total combined voting
power of all classes of stock of the Company or any Subsidiary, the
exercise price of any Incentive Stock Option granted to such individual
shall be 110% of the Fair Market Value of the Stock.
(c) Payment for Stock. The exercise price of an Option shall be paid
in full at the time of the exercise (i) in cash, or (ii) by certified
check payable to the Company, or (iii) by other mode of payment (e.g.,
stock) as the Committee may approve.
(d) Limitation. Notwithstanding any provision of the Plan to the
contrary, an Option shall not be treated as an Incentive Stock Option to
the extent the aggregate fair market value (determined as of the time the
Incentive Stock Option is granted) of Stock for which Incentive Stock
Options are exercisable for the first time by a Grantee during any
calendar year exceeds $100,000.
(e) Duration and Exercise of Options. Options may be exercised for
terms of up to but not exceeding ten years from the date of grant.
Subject to the foregoing, Options shall be exercisable at the times and
in the amounts (up to the full amount thereof) determined by the
Committee at the time of grant. If an Option granted under the Plan is
exercisable in installments the Committee shall determine what events, if
any, will make it subject to acceleration. The term of an Incentive Stock
Option granted to an employee who owns more than 10% of the combined
voting power of all classes of stock of the Company shall not exceed 5
years.
(f) Termination of Services. Upon the termination of a Grantee's
services for the Company or its Subsidiaries for any reason, Options held
by the Grantee may only be exercised to the extent and during the period,
if any, set forth in the Option Agreement.
(g) Transferability of Option. No Option shall be transferable except
by will or the laws of descent and distribution. An Option shall be
exercisable during the Grantee's lifetime only by the Grantee.
(h) Modification, Extension and Renewal of Options. Subject to the
terms and conditions and within the limitations of the Plan, the
Committee may modify, extend or renew outstanding Options granted under
the Plan, or accept the surrender of outstanding options (to the extent
not theretofore exercised) and authorize the granting of new Options in
substitution thereof. Notwithstanding the foregoing, however, no
modification of an Option shall, without the consent of the Grantee,
alter or impair any rights or obligations under any Option theretofore
granted under the Plan or adversely affect the status of an Incentive
Stock Option.
(i) Other Terms and Conditions. Option Agreements may contain any
other provision not inconsistent with the Plan that the Committee deems
appropriate.
8. Adjustment for Changes in the Stock
(a) In the event the shares of Stock, as presently constituted, shall
be changed into or exchanged for a different number or kind of shares or
other securities of the Company (whether by reason of merger,
consolidation, recapitalization, reclassification, split, reverse split,
combination of shares or otherwise), then there shall be substituted for or
added to each share of Stock theretofore or thereafter subject to an Option
the number and kind of shares of capital stock or other securities into,
which each outstanding share of Stock shall be changed, or for which each
such share shall be exchanged, or to which each such share shall be
entitled, as the case may be. The price and other terms of outstanding
Options shall also be appropriately amended to reflect the foregoing
events. In the event there shall be any other change in the number or kind
of outstanding shares of the Stock, or of any capital stock or other
securities into which the Stock shall have been changed or for which it
shall have been exchanged, if the Committee shall, in its sole discretion,
determine that the change equitably requires an adjustment in any Option
theretofore granted or which may be granted under the Plan, then
adjustments shall be made in accordance with its determination.
B-4
(b) Fractional shares resulting from any adjustment in Options
pursuant to this Section 8 may be settled in cash or otherwise as the
Committee shall determine. Notice of any adjustment shall be given by the
Company to each holder of an Option that shall have been so adjusted, and
the adjustment (whether or not notice is given) shall be effective and
binding for all purposes of the Plan.
(c) Notwithstanding Section 8(a), the Committee shall have the power,
in the event of the disposition of all or substantially all of the assets
of the Company, or the dissolution of the Company, or the merger or
consolidation of the Company, or the making of a tender offer to purchase
all or a substantial portion of outstanding Stock of the Company, to amend
all outstanding Options (upon such conditions as it shall deem fit) to (i)
permit the exercise of Options prior to the effective date of the
transaction and to terminate all unexercised Options as of that date, or
(ii) require the forfeiture of all Options, provided the Company pays to
each Grantee the excess of the Fair Market Value of the Stock subject to
the Option over the exercise price of the Option, or (iii) make any other
provisions that the Committee deems equitable.
9. Amendment of the Plan
The Board may amend the Plan and may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Option in the
manner and to the extent deemed desirable to carry out the Plan without action
on the part of the stockholders of the Company; provided, however, that,
except as provided in Section 8 and this Section 9, unless the stockholders of
the Company shall have first approved thereof (i) the total number of shares
of Stock subject to the Plan shall not be increased, (ii) no Option shall be
exercisable more than ten years after the date it is granted, (iii) the
expiration date of the Plan shall not be extended and (iv) no amendment shall
(a) increase the number of shares of Stock to be received on exercise of an
Option, (b) materially increase the benefits accruing to a Grantee under an
Option or (c) modify the eligibility requirements for participation in the
Plan.
10. Interpretation and Construction
The interpretation and construction of any provision of the Plan by the
Committee shall be final, binding and conclusive for all purposes.
11. Application of Funds
The proceeds received by the Company from the sale of Stock pursuant to this
Plan will be used for general corporate purposes.
12. No Obligation to Exercise Option
The granting of an Option shall impose no obligation upon the Grantee to
exercise an Option.
13. Plan Not a Contract of Employment
Neither the Plan nor any Option Agreement is a contract of employment, and
the terms of employment of any Grantee shall not be affected in any way by the
Plan or related instruments except as specifically provided therein. The
establishment of the Plan shall not be construed as conferring any legal
rights upon any Grantee for a continuance of employment; nor shall it
interfere with the right of the Company (or its Subsidiary, if applicable) to
discharge the Grantee.
14. Expense of the Plan
All of the expenses of administering the Plan shall be paid by the Company.
15. Compliance with Applicable Law
Notwithstanding anything herein to the contrary, the Company shall not be
obligated to cause to be issued or delivered any certificates for shares of
Stock issuable upon exercise of an Option unless and until the Company is
advised by its counsel that the issuance and delivery of the certificates is
in compliance with all applicable laws, regulations of government authorities
and requirements of any exchange upon which shares of Stock are traded.
B-5
The Company shall in no event be obligated to register any securities pursuant
to the Securities Act of 1933 (as now in effect or as hereafter amended) or to
take any other action in order to cause the issuance and delivery of
certificates to comply with any of those laws, regulations or requirements.
The Committee may require, as a condition of the issuance and delivery of
certificates and in order to ensure compliance with those laws, regulations
and requirements, that the Grantee make such covenants, agreements and
representations as the Committee, in its sole discretion, deems necessary or
desirable. Each Option shall be subject to the further requirement that if at
any time the Committee shall determine in its discretion that the listing or
qualification of the shares of Stock subject to the Option, under any
securities exchange requirements or under any applicable law, or the consent
or approval of any regulatory body, is necessary in connection with the
granting of the Option or the issuance of Stock thereunder, the Option may not
be exercised in whole or in part unless the listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
16. Governing Law
Except to the extent preempted by federal law, this Plan shall be construed
and enforced in accordance with, and governed by, the laws of the State of
Delaware.
B-6
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF EASYLINK SERVICES CORPORATION FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 24, 2001
The undersigned stockholder of EasyLink Services Corporation, a Delaware
corporation, (the "Company") hereby acknowledges receipt of the Notice of Annual
Meeting of Stockholders and Proxy Statement, each dated April 27, 2001, and
hereby appoints Gerald Gorman and Debra McClister or either of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the Annual Meeting of
Stockholders of EasyLink Services Corporation to be held on Thursday, May 24,
2000 at 10:00 a.m., local time, at New York Information Technology Center, 55
Broad Street, New York, New York and at any adjournment or postponement thereof,
and to vote all shares of Class A Common Stock and Class B Common Stock which
the undersigned would be entitled to vote if then and there personally present,
on the matters set forth below:
1. ELECTION OF DIRECTORS:
__ FOR all nominees listed below (except as indicated).
__ WITHHOLD authority to vote for all nominees listed below.
If you wish to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below:
Gerald Gorman
Thomas Murawski
Gary Millin
George Abi Zeid
William Donaldson
Stephen Duff
Stephen Ketchum
Jack Kuehler
2. PROPOSAL TO APPROVE THE COMPANY'S 2001 STOCK PLAN
FOR AGAINST ABSTAIN
--- --- ---
3. PROPOSAL TO AMEND THE COMPANY'S AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION, AS AMENDED, TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF CLASS A COMMON STOCK OF THE COMPANY
FOR AGAINST ABSTAIN
--- --- ---
4. PROPPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS THE INDEPENDENT
ACCOUNTANTS FOR THE COMPANY FOR THE YEAR ENDING DECEMBER 31, 2001
FOR AGAINST ABSTAIN
--- --- ---
and, in their discretion, upon such other matter or matters that may properly
come before the meeting and any postponement(s) or adjournment(s) thereof.
PLEASE SIGN BELOW AND RETURN IMMEDIATELY
67
ANY STOCKHOLDER COMPLETING THIS PROXY THAT FAILS TO MARK ONE OF THE BOXES FOR
THE PROPOSAL WILL BE DEEMED TO HAVE GIVEN THE PROXY HOLDERS COMPLETE DISCRETION
IN VOTING HIS, HER, OR ITS SHARES FOR SUCH PROPOSAL AT THE MEETING, OR, IN THE
CASE OF ELECTION OF DIRECTORS, FOR EACH OF THE LISTED NOMINEES. IF A BOX IS
CHECKED, YOUR SHARES SHALL BE VOTED IN ACCORDANCE WITH YOUR INSTRUCTIONS.
Signature Date:
--------------------------------- ------------------------
Signature Date:
--------------------------------- ------------------------
(This Proxy should be marked, dated, signed by the stockholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.)