SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
METRO ONE TELECOMMUNICATIONS, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
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applies:
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applies:
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[LOGO]
May 5, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of the Shareholders
of Record of Metro One Telecommunications, Inc., which will be held on Thursday
June 8, 2000, at 3:30 pm, local time, at the Portland Conference Center, 300 NE
Multnomah Street, Portland, Oregon. The other Directors of Metro One and I look
forward to greeting as many of our shareholders as possible.
Details of the business to be conducted at the Annual Meeting are given in
the attached Proxy Statement. Our Annual Report for the year ended December 31,
1999 is also enclosed.
Whether or not you plan to attend the meeting, it is important that your
shares be represented and voted at the meeting. Therefore, I urge you to sign,
date, and promptly return the enclosed proxy in the enclosed postage-paid
envelope. If you decide to attend the Annual Meeting and vote in person, you
will, of course, have that opportunity.
On behalf of the Board of Directors, I would like to express our continued
appreciation for your interest in the affairs of the company.
Sincerely,
[/S/ TIMOTHY A. TIMMINS]
Timothy A. Timmins
President
Chief Executive Officer
METRO ONE TELECOMMUNICATIONS, INC.
----------------
NOTICE OF ANNUAL MEETING
TO BE HELD ON JUNE 8, 2000
------------------------
To the Shareholders of
METRO ONE TELECOMMUNICATIONS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the shareholders of METRO
ONE TELECOMMUNICATIONS, INC. will be held on June 8, 2000 at 3:30 p.m. local
time, at the Portland Conference Center, 300 NE Multnomah Street, Portland,
Oregon for the following purposes:
1. To elect four Directors, each for a one-year term;
2. To approve the selection of Deloitte & Touche LLP as independent
auditors for the year ending December 31, 2000; and
3. To transact such other business as may properly come before the meeting.
The Board of Directors has fixed April 14, 2000 as the record date for the
determination of shareholders entitled to notice of and to vote at the Annual
Meeting. Only shareholders of record at the close of business on that date will
be entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
By Order of the Board of Directors
GARY E. HENRY
SECRETARY
Beaverton, Oregon
May 5, 2000
METRO ONE TELECOMMUNICATIONS, INC.
11200 MURRAY SCHOLLS PLACE
BEAVERTON, OREGON 97007
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PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 8, 2000
------------------------
GENERAL
This Proxy Statement is furnished to shareholders of METRO ONE
TELECOMMUNICATIONS, INC. ("Metro One") in connection with the solicitation by
the Board of Directors of proxies from the shareholders of record of our
outstanding shares of Common Stock, no par value (the "Common Stock"), for use
at the Annual Meeting of Shareholders to be held on June 8, 2000 at 3:30 p.m.
local time, and at any adjournments or postponements thereof (the "Annual
Meeting").
At the Annual Meeting, shareholders will be asked to (i) elect four members
of the Board of Directors, (ii) approve the selection of Deloitte & Touche LLP
as independent auditors for the year ending December 31, 2000; and
(iii) transact such other business as may properly come before the meeting. This
Proxy Statement, together with the enclosed proxy card, is first being mailed to
shareholders on or about May 5, 2000.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
The Board of Directors has fixed April 14, 2000 as the record date for the
determination of the shareholders entitled to notice of and to vote at the
Annual Meeting. Accordingly, only holders of record of shares of Common Stock at
the close of business on such date will be entitled to notice of and to vote at
the Annual Meeting, with each such share entitling its owner to one vote on all
matters properly presented at the Annual Meeting. On the record date, there were
approximately 4,270 beneficial holders of the 11,493,228 shares of Common Stock
then outstanding. The presence, in person or by proxy, of a majority of the
total number of outstanding shares of Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum at the Annual Meeting.
If the enclosed form of proxy is properly executed and returned in time to
be voted at the Annual Meeting, the shares represented thereby will be voted in
accordance with the instructions marked thereon. EXECUTED BUT UNMARKED PROXIES
WILL BE VOTED (I) FOR THE ELECTION OF THE DIRECTORS NOMINATED IN THE PROXY AND
(II) FOR APPROVAL OF THE SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT
AUDITORS FOR THE YEAR ENDING DECEMBER 31, 2000. The Board of Directors does not
know of any matters other than those described in the Notice of Annual Meeting
that are to come before the Annual Meeting. If any other matters are properly
brought before the Annual Meeting, the persons named in the proxy will vote the
shares represented by such proxy upon such matters as determined by a majority
of the Board of Directors.
The presence of a shareholder at the Annual Meeting will not automatically
revoke such shareholder's proxy. A shareholder may, however, revoke a proxy at
any time prior to its exercise by filing a written notice of revocation with, or
by delivering a duly executed proxy bearing a later date to, Secretary, Metro
One Telecommunications, Inc., 11200 Murray Scholls Place, Beaverton, Oregon
97007, or by attending the Annual Meeting and voting in person. All valid,
unrevoked proxies will be voted at the Annual Meeting.
1
ELECTION OF DIRECTORS
(PROPOSAL I)
BACKGROUND
At the Annual Meeting, four directors are to be elected to serve until the
date of our Annual Meeting to be held in 2001 and until their successors are
elected and qualified. Unless otherwise specified in the proxy, it is the
intention of the persons named in the proxy to vote the shares represented by
each properly executed proxy for the election as directors of the persons named
below as nominees. The Board of Directors believes that the nominees will stand
for election and will serve if elected as directors. However, if any of the
persons nominated by the Board of Directors fails to stand for election or is
unable to accept election, the proxies will be voted for the election of such
other persons as the Board of Directors may recommend.
INFORMATION AS TO THE BOARD'S NOMINEES
The following table sets forth the names of the Board of Directors' nominees
for election as directors. Also set forth is certain other information with
respect to each such person's age at April 14, 2000, the periods during which he
has served as a director, the expiration of his term as a director, positions
currently held with us and his principal occupation or employment during the
last five years.
DIRECTOR EXPIRATION
NAME AGE SINCE OF TERM POSITION WITH THE COMPANY
- ---- -------- -------- ---------- ---------------------------------------------
William D. 61 1995 2000 Chairman of the Board of Directors
Rutherford............
A. Jean de Grandpre... 78 1995 2000 Director
Timothy A. Timmins.... 43 1994 2000 President, Chief Executive Officer and
Director
James M. Usdan........ 50 1997 2000 Director
WILLIAM D. RUTHERFORD was elected Chairman of Metro One's Board of Directors
in 2000 and has served as a director since 1995. He is the Principal of
Rutherford Investment Management LLC, an investment advisory service. During
1997, Mr. Rutherford was Chief Executive Officer of Fiberboard Asbestos
Compensation Trust. From 1995 to 1996, Mr. Rutherford was a principal with
Macadam Partners, a Portland-based investment firm. He was formerly the
Treasurer of the State of Oregon, where he was responsible for the State's then
$14 billion investment program and the state's then $7.5 billion in indebtedness
and during which service he was elected Chairman of the Oregon Investment
Council. He also served for seven years as a Member of the Oregon House of
Representatives. From 1994 to 1995, Mr. Rutherford served as Director of Special
Projects for Metallgesellschaft Corp., a multi-billion dollar international
trading company. From 1990 through 1993, Mr. Rutherford was President and a
director of Societe Generale Touche Remnant Corporation (U.S.), an international
asset management company. From 1987 to 1990, Mr. Rutherford was President and
Chief Executive Officer of ABD International Management Corporation, an
international asset management company. Mr. Rutherford formerly practiced law
and served as the Chief Executive Officer of a regional investment firm. A U.S.
Army veteran, Mr. Rutherford received a Bachelor of Science in History from the
University of Oregon and an LL.B. from Harvard University Law School.
A. JEAN DE GRANDPRE has served as a director of Metro One since 1995 and
served as Chairman of the Board of Directors from 1995 to 2000. Mr. de Grandpre
is the founding Director and Chairman Emeritus of Bell Canada Enterprises, from
which he retired in 1989. He as served on the Board of Thera Technologies since
1993 and also serves on the board of CanVac. He is a former Director of Bell
Canada, Northern Telecom Limited, Chrysler Corporation, Chrysler Canada Ltd.,
and the International Advisory Board of The Chemical Bank, New York. Mr. de
Grandpre is a Life Member of the Canadian Bar Association, Emeritus Member of
the Canadian Association of Canadian General Counsel, Member of the Bar of the
Province of Quebec and former Chancellor of McGill University. Mr. de Grandpre
is a lawyer, appointed Queen's Counsel and a Companion of the Order of Canada,
the highest honour granted a
2
private citizen. Mr. de Grandpre is the recipient of the Honourary Associate
Award of the Conference Board of Canada and is an inductee into the Canadian
Business Hall of Fame.
TIMOTHY A. TIMMINS has served as President and Chief Executive Officer of
Metro One since 1995 and as a director since 1994. He served as Executive Vice
President and Chief Financial Officer from 1993 to 1995. From 1985 to 1993,
Mr. Timmins served in various capacities with the Investment Banking Division of
Kemper Securities, Inc. and predecessor firms, ultimately as Senior Vice
President. Mr. Timmins is a certified public accountant and holds a Bachelor of
Science degree in Business Administration from Portland State University and a
Masters degree in Business Administration from the University of Southern
California.
JAMES M. USDAN has served as a director of Metro One since 1997. He is the
Chief Executive Officer of NextCARE Hospitals, Inc., a provider of long-term
acute care hospital services. From 1990 to 1998, Mr. Usdan was the President,
Chief Executive Officer and a director of RehabCare Group Inc. (NYSE: RHB), a
provider of physical therapy, rehabilitation staffing and outsourcing services.
Prior to joining RehabCare, Mr. Usdan founded and was President and Chief
Executive Officer of American Transitional Care, Inc. from 1987 to 1990, and,
from 1986 to 1987, he was Executive Vice President and Chief Operating Officer
of Rehab Hospital Services Corporation, the rehabilitation subsidiary of
National Medical Enterprises. Mr. Usdan serves on the Board of D&K Healthcare
Services, Inc. (Nasdaq: DKWD) a pharmaceutical distribution company, and is an
Advisory Board member of Mercantile Bank, the MedStat Group and Maryville
College. Mr. Usdan holds a Bachelor of Arts degree from Harvard College.
Pursuant to our Third Restated Articles of Incorporation, at any time when
the Board of Directors consists of six or more members, the Board of Directors
is divided into three classes serving staggered three-year terms. Directors are
otherwise elected to serve until the next annual meeting of shareholders.
Executive officers are appointed by and serve at the discretion of the Board of
Directors.
BOARD MEETINGS AND COMMITTEES
During 1999 the Board of Directors held five meetings. Each incumbent
director attended more than 75% of the aggregate of the total number of meetings
held and the total number of meetings held by all committees of the Board on
which he served during the period that he served.
The Board of Directors maintains a standing Compensation Committee that
consists of Messrs. de Grandpre, Rutherford and Usdan. The Compensation
Committee, which met two times in 1999, reviews executive compensation and makes
recommendations to the full Board regarding changes in compensation, and also
administers the Company's stock option plans. The Board of Directors has a
standing Audit Committee consisting of Messrs. de Grandpre, Rutherford and
Usdan. The Audit Committee, which met three times in 1999, reviews the scope of
the independent annual audit, the independent public accountant's letter to the
Board of Directors concerning the effectiveness of the internal financial and
accounting controls and facilitates the preparation of the Board of Directors'
response to any such letter, if deemed necessary. The Board of Directors acts as
a nominating committee for selecting nominees for election as directors.
DIRECTORS' COMPENSATION AND OTHER ARRANGEMENTS
Generally, directors who are not employees receive $500 plus expenses for
each Board meeting attended locally or via telephone and $2,500 plus expenses
for each meeting attended in person for which substantial travel is required.
Each non-employee director is also compensated by an annual fee of $7,500.
Additionally, non-employee directors are compensated at the rate of $250 for
each committee meeting attended. Mr. de Grandpre, in 1995, and Mr. Rutherford,
in 1996, each were granted non-qualified options to purchase 57,140 shares of
Common Stock at a price of $8.05 per share. Such options vest over a four-year
period, which vesting has accelerated due to the occurrence of certain events as
outlined in the option agreements. Beginning in 1996, directors who are not
employees are granted non-qualified options
3
to purchase 10,000 shares of Common Stock at the time of recruitment
("Recruitment Grant") and 10,000 shares of Common Stock in October of each year
("Annual Grant"). The non-employee Chairman of the Board on July 31 of each year
will also be granted a non-qualified option to purchase 14,285 shares of Common
Stock (also, an "Annual Grant"). Annual Grants and Recruitment Grants are vested
and exercisable at the time of the grant and have exercise prices equal to the
market price on the date of grant. Mr. Rutherford also receives $2,000 per month
for his service as Chairman of the Board.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ITS NOMINEES AS
DIRECTORS. If a quorum is present, a plurality of the votes cast by the shares
entitled to vote is required for the election of a director. Abstentions and
broker non-votes are counted for purposes of determining whether a quorum exists
but are not counted and have no effect in determining whether the nominee has
received the required shareholder vote.
4
MANAGEMENT
EXECUTIVE OFFICERS
The following table sets forth certain information at April 14, 2000 with
respect to our executive officers:
NAME AGE POSITION
- ---- -------- ----------------------------------
Timothy A. Timmins................ 43 President, Chief Executive Officer
and Director
Gary E. Henry..................... 43 Senior Vice President--Operations,
Secretary
Karen L. Johnson.................. 50 Senior Vice President--Corporate
Development
Information concerning the principal occupation of Mr. Timmins is set forth
under "Information as to the Board's Nominees." Information concerning the
principal occupation during the last five years of the executive officers who
are not also directors is set forth below.
GARY E. HENRY joined Metro One in 1992 and serves as Senior Vice
President--Operations. From 1992 to 1999, he served Metro One in a variety of
operational positions. Prior to 1992, he was Senior Vice President, Corporate
Services Director for Imperial Corporation of America, Inc., a financial
institution, with whom he was employed since 1985. Mr. Henry holds a Bachelor of
Arts degree in Public Administration from San Diego State University.
KAREN L. JOHNSON joined Metro One in 1993 and since 1998 has served as
Senior Vice President--Corporate Development. From 1993 to 1998, she served as
its Vice President--Controller. From 1989 to 1993, she was Financial Operations
Manager for Care Medical Equipment, Inc. and Care Ambulance, Inc. Ms. Johnson is
a certified public accountant with a Bachelor of Arts degree from St. Olaf
College and she performed post-graduate work in accounting and business
administration at Portland State University.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, and persons who own more than 10% of a registered class
of our equity securities, to file with the Securities and Exchange Commission
reports of ownership and changes in ownership of Common Stock and other equity
securities of Metro One. Officers, directors and greater than 10% shareholders
are required by Securities and Exchange Commission regulations to furnish us
with copies of all Section 16(a) forms they file. To our knowledge, based solely
on review of the copies of such reports furnished to us, we believe that during
fiscal 1999 our officers, directors and greater than 10% shareholders complied
with all applicable Section 16(a) filing requirements.
5
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth, for the fiscal year ended December 31, 1999,
certain summary information concerning compensation of the person serving as our
Chief Executive Officer and our four other most highly paid executive officers
whose total annual salary and bonus exceeded $100,000 (the "Named Executive
Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS/SARS COMPENSATION
--------------------------- -------- -------- -------- ------------ ------------
Timothy A. Timmins....................... 1999 $150,026 $ -- -- --
President, Chief Executive Officer and 1998 150,026 150,000 -- --
Director 1997 150,026 3,000 -- --
Gary E. Henry............................ 1999 $164,176 -- 7,500 --
Senior Vice President, Operations 1998 138,220 -- 30,000 --
Secretary 1997 98,752 -- 28,570 --
Stebbins B. Chandor, Jr.(1).............. 1999 $158,714 -- -- --
Senior Vice President, Chief Financial 1998 119,954 -- 20,000 --
Officer and Secretary 1997 110,417 -- -- --
Karen L. Johnson......................... 1999 $124,968 -- -- --
Senior Vice President, Corporate 1998 100,154 -- 20,000 --
Development 1997 88,044 -- 45,712 --
Hugh Knox(2)............................. 1999 $126,814 -- -- --
Vice President, Sales and Marketing 1998 -- -- 65,000 --
1997 -- -- -- --
- ------------------------
(1) Mr. Chandor resigned from the Company effective March 10, 2000.
(2) Mr. Knox resigned from the Company effective January 17, 2000.
OPTION GRANTS
During the year ended December 31, 1999, the following Named Executive
Officers were granted options to purchase Common Stock pursuant to our 1994
Stock Incentive Plan (the "Plan").
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZED VALUE
-------------------------- AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE OR TERM
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ------------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
- ---- ------------ ------------ ----------- ---------- ---------- -----------
Gary E. Henry.................... 7,500 13.7% $12.63 6/29/09 $60,259 $158,165
6
YEAR-END OPTION TABLE
The following table provides information regarding exercises of options
during 1999 and unexercised options held, as of December 31, 1999, by the Named
Executive Officers.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS AT YEAR-END AT YEAR-END
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- -------- ------------------------- -------------------------
Timothy A. Timmins.............. -- -- 399,981/0 $ 1,979,906/$0
Gary E. Henry................... -- -- 62,721/49,061 $189,471/$101,806
Stebbins B. Chandor, Jr.(1)..... -- -- 76,426/15,000 $ 361,359/$23,400
Karen L. Johnson................ -- -- 50,406/43,876 $170,347/$137,268
Hugh Knox(2).................... -- -- 16,250/48,750 $ 73,125/$219,375
- ------------------------
(1) Mr. Chandor resigned from the Company effective March 10, 2000 cancelling
13,750 options on the same number of shares.
(2) Mr. Knox resigned from the Company effective January 17, 2000 cancelling
40,626 options on the same number of shares.
COMPENSATION COMMITTEE REPORT
Under rules established by the Securities and Exchange Commission (the
"SEC"), we are required to provide certain data and information in regard to the
compensation and benefits provided to the Chief Executive Officer and the four
other most highly compensated executive officers. In fulfillment of this
requirement, the Compensation Committee has prepared the following report for
inclusion in this Proxy Statement.
COMPENSATION PHILOSOPHY. The Compensation Committee of the Board of
Directors, which is responsible for reviewing and evaluating the compensation of
Metro One's executive officers, approves and recommends to the Board of
Directors compensation and award levels for executive officers. With regard to
compensation actions affecting Mr. Timmins, all of the members of the Board of
Directors except for Mr. Timmins act as the approving body.
Metro One's executive compensation program has been designed to:
- Support a pay-for-performance policy that is tied to corporate and
individual performance;
- Motivate executive officers to achieve strategic business initiatives and
reward them for their achievement;
- Provide compensation opportunities which are comparable to those offered
by similarly-sized telecommunications and technology-based companies; and
- Align the interests of executives with the long-term interests of
shareholders through award opportunities that can result in ownership of
Common Stock.
The executive compensation program is comprised of a base salary and
long-term incentive opportunities in the form of stock options, along with
benefits offered to all Metro One employees.
BASE SALARIES. The 1999 base salaries of Metro One's executive officers
were established effective December 1998, except for that of Mr. Timmins, which
was established by employment contract in 1995. In approving those salaries, the
Compensation Committee considered information about salaries paid by
7
companies of comparable size in the telecommunications outsourcing industry,
individual performance, position, and internal comparability considerations.
While all of these factors were considered, the Compensation Committee did not
assign specific weights to any of these factors.
STOCK PLANS. The long-term, performance-based compensation of executive
officers takes the form of option awards under Metro One's 1994 Stock Incentive
Plan (the "Plan"), which is designed to align a significant portion of the
executive compensation program with long-term shareholder interests. The Plan
permits the granting of several different types of stock-based awards. The
Compensation Committee believes that equity-based compensation ensures that
Metro One's executive officers have a continuing stake in the long-term success
of the company. All options granted by Metro One have been granted with an
exercise price equal to the market price of the Company's Common Stock on the
date of grant and, accordingly, will only have value if Metro One's stock price
increases. In granting options under the Plan, the Compensation Committee
generally takes into account each executive's responsibilities, relative
position and past grants.
CHIEF EXECUTIVE OFFICER COMPENSATION. In 1995, Metro One entered into an
employment contract with Mr. Timmins for employment for a five-year period
ending in 2000. The amendment allows for a base annual compensation and
increases based upon achievement of certain corporate goals and upon a formula
tied to Metro One's profitability. The agreement provides for an adjusted base
salary for Mr. Timmins of $150,000. The employment agreement provides for annual
bonuses up to 100 percent of adjusted base salary for annual earnings per share
growth from 8 percent to 30 percent. In developing its recommendations regarding
Mr. Timmins' compensation, the Committee considered a number of factors,
including analyses of compensation in similarly-sized companies in the
telecommunications outsourcing industry, analyses of compensation levels in
similar companies in Metro One's local geographic area and Metro One's improved
performance in revenue and net income as compared to the prior year.
On March 6, 2000, and effective as of January 1, 2000, Metro One amended the
employment agreement to extend Mr. Timmins' employment contract through December
2002. The amendment provides for an adjusted base salary for Mr. Timmins of
$200,000. The amendment also limits annual bonuses to 150 percent of adjusted
base salary in any year following a year in which the total net income is less
than that of the previous year.
The employment agreement also provides for payment to Mr. Timmins of one
additional year of adjusted base salary and a pro rata portion of annual bonuses
in the event of termination of employment upon death or for reasons other than
cause, six months additional adjusted base salary and a pro rata portion of
annual bonuses due to disability, or six months additional adjusted base salary
and no bonuses if for cause. Under the employment agreement, Mr. Timmins has
been granted certain indemnification rights. In addition, the employment
agreement prevents Mr. Timmins from competing with Metro One or soliciting the
employment of other individuals employed by Metro One during Mr. Timmins'
employment and for a period of one year thereafter. Under the employment
agreement, Mr. Timmins may not disclose Metro One's confidential information to
outsiders during employment and for a period of two years thereafter.
COMPENSATION COMMITTEE
James M. Usdan, Chairman
A. Jean de Grandpre
William D. Rutherford
8
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
During the fiscal year ended December 31, 1999, the members of the
Compensation Committee were Messrs. de Grandpre, Rutherford, and Usdan. There
were no employee directors on the Compensation Committee and no Interlocks.
PERFORMANCE GRAPH
The following graph compares the cumulative total shareowner return on our
Common Stock for the period beginning August 23, 1996, the date our Common Stock
began trading on the Nasdaq National Market, and ending December 31, 1999, as
compared with the cumulative total return of the Russell 2000 Index and a Peer
Group Index. The Peer Group consists of: Billing Concepts Corp., Boston
Communications Group, Lightbridge, Inc., Premiere Technologies, Inc., SCC
Communications Corp. and West Teleservices Corp. The total shareowner return for
each company in the Peer Group has been weighted according to the company's
stock market capitalization. This graph assumes an investment of $100 on August
23, 1996 in each of the company's common stock, the Russell 2000 Index and the
Peer Group Index, and assumes reinvestment of dividends, if any. The stock price
performance shown on the graph below is not necessarily indicative of future
stock price performance.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
MTON RUSSELL PEER GROUP
23-Aug-96 100 100 100
31-Dec-96 76.8 109.3 111.7
31-Dec-97 81.7 131.7 114.1
31-Dec-98 129.3 127.2 51.5
31-Dec-99 126.8 152.1 76.1
9
CERTAIN TRANSACTIONS
During 1994, A. Jean de Grandpre, a director and former Chairman of the
Board of Directors, purchased Metro One's 8% Convertible Secured Notes in the
principal amount of $150,000, using investment companies he controlled, as part
of Metro One's then convertible secured note financing. Metro One converted
these Notes into 64,932 shares of its Common Stock during the fourth quarter of
1995.
In 1996, Metro One and the lenders in the convertible secured note
financing, including Mr. de Grandpre, entered into a Shareholder Rights
Agreement. In the Shareholder Rights Agreement, Metro One granted the lenders
registration rights on their shares of Common Stock and a right of first refusal
on future sales of its Common Stock, preferred stock or other securities. The
right of first refusal terminates on the completion of an underwritten public
offering of Common Stock if Metro One receives cash proceeds of $10 million at a
per share price of at least $10.50.
We believe the foregoing transaction was fair to Metro One and in its best
interests. As a matter of policy, all future transactions between Metro One and
any of its officers, directors or principal stockholders or their affiliates
will continue to be approved by a majority of the Board of Directors and will
continue to be on terms no less favorable to Metro One than could be obtained
from unaffiliated third parties, and will continue to be for bona fide business
purposes.
10
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information regarding the ownership
of our Common Stock as of April 14, 2000 with respect to: (i) each person known
by us to beneficially own more than 5% of the outstanding shares of Common
Stock, (ii) each director, (iii) each Named Executive Officer and (iv) all
directors and executive officers as a group. Except as otherwise indicated, we
believe the persons listed below have sole investment and voting power with
respect to the shares of Common Stock owned by them.
SHARES BENEFICIALLY
OWNED
----------------------
NAMED EXECUTIVE OFFICERS, DIRECTORS AND 5% SHAREHOLDERS(1) NUMBER(2) PERCENT(2)
- ---------------------------------------------------------- --------- ----------
Fidelity Management......................................... 1,051,900 9.2
82 Devonshire Street
Boston, Massachusetts 01209
Timothy A. Timmins.......................................... 412,034 3.5
A. Jean de Grandpre......................................... 212,071 1.8
William D. Rutherford....................................... 135,902 1.2
Stebbins B. Chandor, Jr.(3)................................. 82,076 *
Gary E. Henry............................................... 72,492 *
Karen L. Johnson............................................ 58,943 *
James M. Usdan.............................................. 40,300 *
All directors and officers as a group (7 persons)........... 1,013,818 8.6
- ------------------------
* Less than one percent
(1) The address of each beneficial owner identified is 11200 Murray Scholls
Place, Beaverton, Oregon 97007.
(2) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission, and includes voting power and investment
power with respect to shares. Shares issuable upon the exercise of
outstanding stock options that are currently exercisable or become
exercisable within 60 days from April 14, 2000 are considered outstanding
for the purpose of calculating the percentage of Common Stock owned by such
person, but not for the purpose of calculating the percentage of Common
Stock owned by any other person. The number of shares that are issuable upon
the exercise of options that are currently exercisable or exercisable within
60 days of April 14, 2000 is as follows: A. Jean de Grandpre--147,139
shares; William D. Rutherford--104,283 shares; Timothy A. Timmins--403,105
shares; James M. Usdan--40,000 shares; Gary E. Henry--71,492 shares;
Stebbins B. Chandor, Jr.--77,676 shares; Karen L. Johnson--58,543 shares;
and all directors and officers as a group--902,238 shares.
(3) Mr. Chandor resigned from the Company effective March 10, 2000.
11
SELECTION OF INDEPENDENT AUDITORS
(PROPOSAL II)
The Board of Directors has selected Deloitte & Touche LLP as independent
auditors for the year ending December 31, 2000. For the years ended
December 31, 1999, 1998 and 1997, Deloitte & Touche served as our independent
auditors. It is expected that representatives of Deloitte & Touche LLP will be
present at the Annual Meeting, will have the opportunity to make a statement if
they so desire, and will be available to respond to appropriate questions.
BOARD RECOMMENDATION
Although the selection of auditors is not required to be submitted to a vote
of the shareholders, the Board has decided to ask the shareholders to approve
the selection and recommends that the shareholders vote FOR approval. If a
majority of the shares of Common Stock represented at the Annual Meeting does
not vote to approve the selection, the Board will reconsider the selection.
OTHER BUSINESS
As of the date of this Proxy Statement, we know of no other business that
will be presented for action at the meeting. If any other business requiring a
vote of the shareholders should properly come before the meeting, the persons
named in the enclosed proxy form will vote in their discretion upon such other
matters.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Any shareholder proposal intended for inclusion in the proxy statement and
form of proxy relating to our 2001 annual meeting of shareholders must be
received by us no later than January 9, 2001, pursuant to the proxy soliciting
regulations of the Securities and Exchange Commission (the "SEC"). Nothing in
this paragraph shall be deemed to require us to include in our proxy statement
or form of proxy for such meeting any shareholder proposal that does not meet
the requirements of the SEC in effect at the time.
COST OF SOLICITATION
We will bear the cost of soliciting proxies. In addition to use of the
mails, proxies may be solicited personally or by telephone by directors,
officers and employees of Metro One, who will not be additionally compensated
for such activities. Such solicitations may be made personally, or by mail,
facsimile, telephone, telegraph or messenger. We will also request persons,
firms and companies holding shares in their names or in the name of their
nominees, which are beneficially owned by others, to send proxy materials to and
obtain proxies from such beneficial owners. We will reimburse such persons for
their reasonable expenses incurred in that connection.
ADDITIONAL INFORMATION
A copy of our Annual Report to Shareholders for the fiscal year ended
December 31, 1999 accompanies this Proxy Statement. We are required to file an
Annual Report on Form 10-K for our fiscal year ended December 31, 1999 with the
Securities and Exchange Commission (the "SEC"). The SEC maintains a web site,
www.sec.gov, that contains reports, proxy statements, and certain other
information filed electronically by us with the SEC. Shareholders may obtain,
free of charge, a copy of the Form 10-K, without exhibits, by writing to
Investor Relations, Metro One Telecommunications, Inc., 11200 Murray
Scholls Place, Beaverton, Oregon 97007 or visiting our web site at
www.metro1.com.
12
METRO ONE TELECOMMUNICATIONS, INC.
PROXY FORM
ANNUAL MEETING OF SHAREHOLDERS
JUNE 8, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF METRO ONE TELECOMMUNICATIONS, INC.
The undersigned shareholder of record of Metro One Telecommunications, Inc.,
an Oregon corporation, hereby appoints Timothy A. Timmins and William D.
Rutherford, or either of them, with full power of substitution, as proxies to
cast all votes which the undersigned shareholder is entitled to cast at the
Annual Meeting of Shareholders to be held at 3:30 p.m. on June 8, 2000, at
the Portland Conference Center, 300 N.E. Multnomah Street, Portland, Oregon,
or any adjournments or postponements thereof upon the matters listed herein
AND IN THEIR DISCRETION UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
- FOLD AND DETACH HERE -
Please mark your votes as indicated in this example /X/
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. UNLESS DIRECTION IS GIVEN, THIS PROXY
WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1, "FOR"
PROPOSAL 2, AND IN ACCORDANCE WITH THE RECOMMENDATIONS OF A MAJORITY OF THE
BOARD OF DIRECTORS AS TO OTHER MATTERS. The undersigned hereby acknowledges
receipt of our Proxy Statement and hereby revokes any proxy or proxies
previously given.
1. To elect four members to the Board of Directors. Directors nominated are
A. Jean de Grandpre, William D. Rutherford, Timothy A. Timmins and James M.
Usdan.
FOR / / Withheld For All / / For All Except* / /
Except*: _______________________________
2. To approve the selection of Deloitte & Touche LLP as independent auditors.
FOR / / AGAINST / / ABSTAIN / /
I PLAN TO ATTEND THE ANNUAL MEETING. / /
I DO NOT PLAN TO ATTEND THE ANNUAL MEETING. / /
Please sign below exactly as your name appears on this Proxy Card. If shares
are registered in more than one name, all such persons should sign. A
corporation should sign in its full corporate name by a duly authorized
officer, stating his/her title. Trustees, guardians, executors and
administrators should sign in their official capacity, giving their full
title as such. If a partnership, please sign in the partnership name by
authorized person(s).
If you receive more than one Proxy Card, please sign and return all such
cards in the accompanying envelope.
PLEASE RETURN PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE U.S.A.
Typed or Printed Name(s)_________________________________
Title or authority, If applicable ______________________
Authorized Signature ____________________________________
Date ___________________________
PLEASE SIGN, DATE, AND RETURN THIS PROXY CARD TODAY IN THE ENCLOSED,
PRE-ADDRESSED ENVELOPE.
- FOLD AND DETACH HERE -