SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
CARRIER 1 INTERNATIONAL S.A.
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(Name of Registrant as Specified In Its Charter)
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Registrant)
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[LOGO]
CARRIER1 INTERNATIONAL S.A.
SOCIETE ANONYME
Stig Johansson
Director, President and Chief Executive Officer
May 15, 2000
To Our Shareholders:
We have set our 2000 annual meeting of shareholders for Tuesday, June 13,
2000, to commence at 11:00 a.m. (local time) at Le Royal Hotel, 12 Boulevard
Royal, L-2449, Luxembourg.
At the annual meeting, shareholders will consider and vote on matters we are
required to submit to you under the law of Luxembourg, the country of our
organization. These matters consist of approval of our statutory accounts and
the related reports of our Board of Directors and our statutory auditors, the
allocation of the financial result for the year ended December 31, 1999 and the
discharge under Luxembourg Law of our Board's and our statutory auditors'
execution of their mandates for the year ended December 31, 1999. The annual
meeting will be followed immediately by a special meeting to approve amendments
to our articles of incorporation, including an increase in our authorized
capital, the insertion of a new article to authorize the Board to fix record
dates for future shareholders' meetings, dividend entitlement and other
specified purposes, and the elimination of a shareholder's option to receive
bearer shares. These are important matters and we urge each of you to sign,
date, and return the enclosed proxy cards as promptly as possible, even if you
plan to attend the meetings.
We appreciate the continuing support of our shareholders.
On behalf of the Board of Directors,
/s/ Stig Johansson
Stig Johansson
Director, President and
Chief Executive Officer
[LOGO]
CARRIER1 INTERNATIONAL S.A.
SOCIETE ANONYME
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NOTICE OF ANNUAL MEETING AND SPECIAL MEETING OF SHAREHOLDERS
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DATE: Tuesday, June 13, 2000
TIME: 11:00 a.m.
PLACE: Le Royal Hotel
12 Boulevard Royal
L-2449, Luxembourg.
MATTERS TO BE VOTED UPON AT THE ANNUAL MEETING:
1. Approval of the Company's statutory accounts for the year ended
December 31, 1999, and the reports of the Company's statutory auditors,
dated February 11, 2000, and the Board of Directors on the statutory
accounts, dated May 2, 2000.
2. Determination to carry forward the loss reported by the Company for the year
ended December 31, 1999 to the year commencing January 1, 2000.
3. Discharge of the Board of Directors of the Company--pursuant to Article 74
of Luxembourg's Company Law--from the execution of their mandate as
directors for the year ended December 31, 1999.
4. Discharge of the statutory auditors of the Company--pursuant to Article 74
of Luxembourg's Company Law--from the execution of their mandate as
statutory auditors for the year ended December 31, 1999.
5. Any other matter properly brought before the shareholders at the annual
meeting or any adjournment thereof, including procedural matters relating to
the conduct of the meeting under the Luxembourg Company Law.
MATTERS TO BE VOTED UPON AT THE SPECIAL MEETING:
6. Amendment to the Company's Articles of Incorporation to increase the number
of shares that the Board of Directors is authorized to issue from 55,000,000
to 100,000,000.
7. Amendment to the Company's Articles of Incorporation to authorize the Board
of Directors to fix record dates for shareholders' meetings, dividend
entitlement and other specified purposes.
8. Amendment to the Company's Articles of Incorporation to eliminate the
shareholder's option for shares to be issued in bearer form.
9. Any other matter properly brought before the shareholders at the special
meeting or any adjournment thereof, including procedural matters relating to
the conduct of the meeting under the Luxembourg Company Law.
The address of the Company's registered office is Route d'Arlon 3, L-8009
Strassen, Luxembourg and its telephone number is 411 297 2600. The Company is
organized in Luxembourg as a Societe Anonyme with registrar number RC Luxembourg
B 65864.
On Behalf of the Board of Directors,
Stig Johansson
Director, President
and Chief Executive Officer
May 15, 2000
[LOGO]
CARRIER1 INTERNATIONAL S.A.
SOCIETE ANONYME
ROUTE D'ARLON 3
L-8009 STRASSEN, LUXEMBOURG
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PROXY STATEMENT
Your votes at the annual meeting and at the special meeting are important to
us. Please vote your common shares of the Company's capital by completing the
enclosed proxy cards and returning them to us in the enclosed envelopes. This
Proxy Statement has information about the annual meeting and the special meeting
and was prepared by the Company's management for the Board of Directors. This
Proxy Statement was first mailed to shareholders on May 15, 2000.
CONTENTS
GENERAL INFORMATION ABOUT VOTING............................ 2
PROPOSAL NOS. 1-4 PROPOSALS FOR SUBMISSION TO THE
SHAREHOLDERS UNDER LUXEMBOURG LAW......................... 4
PROPOSAL NO. 6 PROPOSED AMENDMENT TO ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED CAPITAL.......... 4
PROPOSAL NO. 7 PROPOSED AMENDMENT TO ARTICLES OF
INCORPORATION TO AUTHORIZE THE BOARD TO FIX RECORD DATES
FOR SHAREHOLDER MEETINGS, DIVIDEND ENTITLEMENT AND OTHER
SPECIFIED PURPOSES........................................ 5
PROPOSAL NO. 8 PROPOSED AMENDMENT TO ARTICLES OF
INCORPORATION TO ELIMINATE A SHAREHOLDER'S OPTION TO
RECEIVE BEARER SHARES..................................... 6
DIRECTORS AND EXECUTIVE OFFICERS............................ 7
BOARD OF DIRECTORS.......................................... 10
EXECUTIVE COMPENSATION...................................... 11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............. 13
BENEFICIAL OWNERSHIP........................................ 17
OTHER MATTERS............................................... 20
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING............... 20
MATERIAL INCORPORATED BY REFERENCE.......................... 21
GENERAL INFORMATION ABOUT VOTING
WHO IS SOLICITING YOUR VOTE?
These proxy materials are furnished in connection with the solicitation by
the Board of Directors of Carrier1 International S.A. ("Carrier1" or the
"Company") of proxies to be voted at the Company's 2000 annual meeting, at a
special meeting to be held immediately following the annual meeting and at any
meeting following an adjournment, postponement, or continuation of either
meeting.
WHO CAN VOTE?
You can vote your shares of the Company's capital if our records show that
you owned the shares on June 13, 2000. If your shares are held in the name of
your broker, a bank, or other nominee, that party may have other procedures for
determining your entitlement to vote. You should contact that party for more
information about this. A total of 41,719,178 common shares of the Company's
capital can vote at the meetings. You get one vote for each common share of the
Company's capital. The enclosed proxy cards show the number of shares you can
vote.
WHO ARE THE PROXYHOLDERS?
The persons named in the enclosed proxy are directors or officers of the
Company. A shareholder has the right to appoint a person (who need not be a
shareholder of the Company) as proxy to attend and act on such shareholder's
behalf at the annual meeting and the special meeting.
HOW DO I VOTE BY PROXY?
Follow the instructions on the enclosed proxy cards to vote on each proposal
to be considered at each of the annual meeting and the special meeting. Sign and
date the proxy cards and mail them back to us in the enclosed envelopes. The
common shares of the Company's capital represented by any valid proxy in favor
of management's nominees named in the accompanying proxy will be voted for,
against, or withheld from voting (abstain) on all matters specified in the form
of proxy, in accordance with any specification or instruction made by a
shareholder on the proxy. In the absence of any such specification or
instruction, such common shares of the Company's capital will be voted for,
against, or withheld from voting (abstain) on all of the matters specified in
the form of proxy as the proxyholder shall determine, in his discretion.
The accompanying proxies for the annual meeting and the special meeting
confer discretionary authority upon the persons named therein with respect to
amendments or variations to matters identified in this notice and proxy
statement and with respect to such other business or matters which may properly
come before the annual meeting, the special meeting or any adjournment.
WHAT IF OTHER MATTERS COME UP AT THE MEETINGS?
The matters described in this proxy statement are the only matters we know
of that will be voted on at the annual meeting and the special meeting. If other
matters are properly presented at the meeting, the proxyholders will vote your
shares as they see fit.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARDS?
Yes. At any time before the vote on a proposal, you can change your vote
either by giving us a written notice revoking your proxy card or by signing,
dating, and returning to us a new proxy card. We will honor the proxy card with
the latest date.
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CAN I VOTE IN PERSON AT THE ANNUAL MEETING OR SPECIAL MEETING RATHER THAN BY
COMPLETING THE PROXY CARDS?
Although we encourage you to complete and return the proxy cards to ensure
that your vote is counted, you can attend the annual meeting and the special
meeting and vote your shares in person.
WHAT DO I DO IF MY SHARES ARE HELD IN "STREET NAME"?
If your shares are held in the name of your broker, a bank, or other
nominee, that party should give you instructions for voting your shares. Please
contact the person responsible for your account and give instructions for a
proxy card to be signed representing your common shares of the Company's
capital. We urge you to confirm in writing your instructions to the person
responsible for your account and to provide a copy of those instructions to our
proxy solicitation firm, Innisfree M & A Incorporated so that we may be aware of
all instructions given and can attempt to ensure that such instructions are
followed. You can contact Innisfree from within the United States at
888-750-5834, or from outside the United States at (212) 750-5833. Their address
is 501 Madison Avenue, New York, New York 10022, U.S.A.
WHO PAYS FOR THIS PROXY SOLICITATION?
We do. In addition to sending you these materials, some of our employees may
contact you by telephone, by mail, or in person. None of these employees will
receive extra compensation for doing this. We have retained Innisfree M & A
Incorporated to assist us in soliciting your proxy for a fee of $8,500, plus
reasonable out-of-pocket expenses.
WE WILL REQUEST THAT BANKS, BROKERAGE HOUSES, AND OTHER CUSTODIANS,
NOMINEES, AND FIDUCIARIES FORWARD OUR PROXY SOLICITATION MATERIALS TO THE
BENEFICIAL OWNERS OF COMMON SHARES OF OUR CAPITAL THAT SUCH INSTITUTIONS HOLD OF
RECORD. WE WILL REIMBURSE SUCH INSTITUTIONS FOR THEIR REASONABLE OUT-OF-POCKET
EXPENSES.
HOW ARE VOTES COUNTED?
Under Luxembourg law, actions requiring the approval of shareholders can
generally be taken at an ordinary meeting, including the annual meeting, by
approval of the holders of a simple majority of shares present or represented,
and voting, without regard to any minimum quorum requirements. At a special
meeting, a quorum of 50% of the outstanding shares and the approval of the
holders of two thirds of the shares present or represented are required to amend
the articles of incorporation. Other actions specified by Luxembourg law or the
articles of incorporation may require a super-majority vote or a specified
quorum. If a quorum that is required is not achieved, a new meeting may be
called at which no quorum is required.
At special meetings, for which a quorum is required, abstentions and broker
non-votes are each included in the determination of the number of shares
present. 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 with respect to that item and has not
received instructions from the beneficial owner. Abstentions and broker
non-votes will have the effect of "AGAINST" votes on matters at the special
meeting because the vote of two thirds of the shares present is required to
approve a proposal. However, because abstentions and broker non-votes are not
votes cast, they will not be counted among the shares voted on matters at the
annual meeting which require the approval of the majority of shares voted.
Our register of shareholders indicates that one shareholder of record,
Carrier One LLC, holds enough shares by itself to approve each of the proposals
presented here. We believe Carrier One LLC will vote "FOR" approval of the
proposals. Information about the beneficial owners of Carrier1 and Carrier One
LLC appears in this proxy statement.
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PROPOSAL NOS. 1-4
PROPOSALS FOR SUBMISSION TO THE
SHAREHOLDERS UNDER LUXEMBOURG LAW
The Board will submit to the shareholders at the annual meeting for their
consideration and approval the following matters as required by Luxembourg's
Company Law:
1. A proposal to approve the Company's statutory accounts for the year ended
December 31, 1999, and the reports of the Company's statutory auditors,
dated February 11, 2000, and the Board of Directors on the statutory
accounts, dated May 2, 2000;
2. A proposal to carry forward the loss reported by the Company for the year
ended December 31, 1999 to the year commencing January 1, 2000.
3. A proposal to discharge the Board of Directors of the Company--pursuant to
Article 74 of Luxembourg's Company Law--from the execution of their mandate
as directors for the year ended December 31, 1999.
4. A proposal to discharge the statutory auditors of the Company--pursuant to
Article 74 of Luxembourg's Company Law--from the execution of their mandate
as statutory auditors for the year ended December 31, 1999.
WE RECOMMEND THAT YOU VOTE "FOR" APPROVAL OF THESE PROPOSALS.
Our statutory accounts and the related reports appear in our Annual Report
for 1999, which we are sending with these proxy materials. Because these
accounts and reports are presented to you only for purposes of Luxembourg law,
we urge you to read them together with the consolidated financial statements and
other information that are also included in our Annual Report.
Article 74 of Luxembourg's Company Act sets forth that the shareholders at
the annual meeting, after having heard the reports of the statutory auditors and
the board of directors and discussing the annual accounts, vote on the approval
of the annual accounts and the discharge to be given to the directors and the
statutory auditors. The approval of Proposals 3. and 4. will have the effect of
preventing the Company from making claims against a director or our statutory
auditors, respectively, for breach of his or their duties under Luxembourg law
from the period of our organization through December 31, 1999.
Our independent statutory auditors for the year ended December 31, 1999 were
Deloitte & Touche SA, Luxembourg. A representative of our statutory auditors is
not expected to be present at the annual meeting or the special meeting and will
therefore not be available to respond to questions.
PROPOSAL NO. 6
PROPOSED AMENDMENT TO ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED CAPITAL
We propose to amend our Articles of Incorporation to increase the number of
shares that the Board of Directors is authorized to issue (the "Authorized
Capital") from 55,000,000 to 100,000,000. If the proposal is approved, the
additional 45,000,000 shares will be a part of the existing class of common
shares. If issued, they will have the same rights and privileges as the shares
presently outstanding. The proposal will not change the par value of each common
share, which will remain at $2.00 per share.
We believe the availability of these additional shares will provide us with
the flexibility to issue common shares for a variety of proper corporate
purposes as our Board may deem advisable. These purposes could include, among
other things, the sale of shares to obtain additional capital funds, the
purchase of property, the acquisition of other companies, the use of additional
shares for various equity compensation and other employee benefit plans, the
future declaration of share dividends or other employee benefit plans, and the
future declaration of share dividends or distributions. The issuance of
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additional shares could have a dilutive effect: (i) on earnings and book value
per share, and (ii) for a shareholder who does not purchase additional shares to
maintain his/her pro rata interest, on a shareholder's percentage voting power
in the Company. We have no present intention to use the additional shares to
deter a change in control. In any event, the additional shares would be unlikely
to have such a deterring affect because more than a majority of our shares are
held by a single shareholder of record.
The additional shares would be available for issuance without further action
by our shareholders, except as may be required by law, regulation or stock
exchange rules. On some specified occasions, the rules of the Nasdaq National
Market, on which our American Depositary Receipts are quoted, require a
shareholder vote for the issuance of shares.
Under an existing provision of our Articles of Incorporation, our Board is
specifically permitted to issue shares up to the total Authorized Capital
without reserving for shareholders a preferential or pre-emptive right to
subscribe for the shares to be issued.
As of May 1, 2000, we had 41,719,178 shares outstanding. Of our authorized
but unissued shares, the Articles specifically reserve shares for exercises of
employee options and outstanding warrants. Reserving shares does not limit the
use of additional authorized shares for the same or similar purposes, but shares
reserved for a specific purpose are not permitted to be issued for any other
purpose.
WE RECOMMEND THAT YOU VOTE "FOR" APPROVAL OF THIS PROPOSAL.
TEXT OF THE AMENDMENT. If shareholders approve this proposal, the second
paragraph of Article 5 of our Articles of Incorporation will be amended as
follows (with deletions struck through and insertions double underlined):
"The authorized capital of the corporation is fixed at TWO HUNDRED
MILLION UNITED STATES DOLLARS (200,000,000.-USD) to be divided into ONE
HUNDRED MILLION SHARES (100,000,000) shares with a par value of TWO
UNITED STATES DOLLARS (2.- USD) each."
EFFECTIVE DATE OF AMENDMENT. If the shareholders adopt the proposed
amendment, it will become effective as of the date of the special meeting.
PROPOSAL NO. 7
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION
TO AUTHORIZE THE BOARD TO FIX RECORD DATES FOR
SHAREHOLDER MEETINGS, DIVIDEND ENTITLEMENT
AND OTHER SPECIFIED PURPOSES
We propose to amend our Articles of Incorporation to authorize the Board of
Directors to fix record dates for shareholders' meetings from time to time for
the purpose of determining the shareholders of the Company entitled to notice of
or to vote at any such meeting, or any adjournment of such meeting, and for
certain other specified purposes.
If the proposal is approved, the Board will be authorized to fix, in advance
of a shareholders' meeting, including both an annual meeting and a special
meeting, a record date which must be between sixty and ten days before the date
of such meeting.
The authority to select a record date is important because it will allow the
Company to determine in advance of a meeting the identity of shareholders
entitled to receive notice of or to vote at that meeting. We believe that this
will assist the Company to conduct future meetings more efficiently and to
provide proxy information to shareholders on a timely basis.
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In addition to having the authority to fix record dates for this purpose,
the Board will also be authorized to fix record dates for purposes including
determining the shareholders entitled to receive dividends or other
distributions or to exercise certain other rights.
WE RECOMMEND THAT YOU VOTE "FOR" APPROVAL OF THIS PROPOSAL.
TEXT OF THE AMENDMENT. If shareholders approve this proposal, a new
paragraph will be inserted in Article 5 of our Articles of Incorporation,
immediately preceding Article 6, reading in its entirety as follows:
"For the purpose of determining the shareholders entitled to notice of or
to vote at any meeting of shareholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of
any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record
date, which shall not be more than sixty days nor less than ten days
before the date of such meeting, nor more than fifty days prior to any
other action."
EFFECTIVE DATE OF AMENDMENT. If the shareholders adopt the proposed
amendment, it will become effective as of the date of the special meeting
PROPOSAL NO. 8
PROPOSED AMENDMENT TO ARTICLES OF
INCORPORATION TO ELIMINATE A SHAREHOLDER'S OPTION
TO RECEIVE BEARER SHARES
We propose to amend our Articles of Incorporation to eliminate the
shareholder's option for shares to be issued in bearer form. The Articles
provide that shares may be issued in registered or bearer form, at the
shareholder's option. The Company's current shareholders all hold their shares
in registered form. The proposed amendment would not affect the form in which
shares are held by current shareholders, but would preclude future shareholders
from electing to hold shares of the Company in bearer form, unless the Board
otherwise determines.
WE RECOMMEND THAT YOU VOTE "FOR" APPROVAL OF THIS PROPOSAL.
TEXT OF THE AMENDMENT. If shareholders approve this proposal, the eighth
paragraph of Article 5 of our Articles of Incorporation will be amended as
follows (with deletions struck through and insertions double underlined):
"Shares shall be issued in registered form, unless the board of directors
otherwise determines."
EFFECTIVE DATE OF AMENDMENT. If the shareholders adopt the proposed
amendment, it will become effective as of the date of the special meeting.
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DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
directors and executive officers of Carrier1 as of December 31, 1999.
NAME AGE POSITION WITH CARRIER1
- - - - - - ---- -------- ----------------------
Stig Johansson....................... 57 Chief Executive Officer, President and Director of
Carrier1 International
Eugene A. Rizzo...................... 48 Vice President, Sales and Marketing
Terje Nordahl........................ 52 Chief Operating Officer
Joachim W. Bauer..................... 55 Chief Financial Officer
Kees van Ophem....................... 37 Vice President, Purchase and General Counsel
Neil E. Craven....................... 31 Vice President, Business Development
Alex Schmid.......................... 31 Vice President, Strategic Development
Glenn M. Creamer..................... 37 Director of Carrier1 International
Jonathan E. Dick..................... 41 Director of Carrier1 International
Mark A. Pelson....................... 37 Director of Carrier1 International
Victor A. Pelson..................... 62 Director of Carrier1 International
Thomas J. Wynne...................... 59 Director of Carrier1 International
STIG JOHANSSON has served as a director of Carrier1 International since
August 1998 and as our Chief Executive Officer and President since March 1998
and has more than 30 years of experience in the telecommunications industry.
Prior to founding Carrier1, Mr. Johansson was President of Unisource Carrier
Services AG from September 1996 until February 1998, where he was responsible
for transforming Unisource Carrier Services from a network development and
planning company into a fully commercial, wholesale carrier of international
traffic. Mr. Johansson was a member of Unisource N.V.'s supervisory Board from
1992 until 1996. Prior to joining Unisource Carrier Services, Mr. Johansson
worked for Telia AB, the Swedish incumbent telephone operator, where he was most
recently Executive Vice President. During his 26 years at Telia, Mr. Johansson
held a variety of positions. He began in 1970 working in engineering operations
and rose to head of strategic network planning (1977), general manager of the
Norrkoping Telecom region (1978), head of CPE-business division (1980),
executive vice president and marketing director of Televerkit/Telia AB (1984)
and Executive Vice President responsible for Telia's start-up operations in the
Nordic countries and the United Kingdom (1995). He was a member of Telia's
corporate management Board from 1985 to 1996. Mr. Johansson holds a Master's
degree in Business Economics from Hermods Institut, Sweden and a degree of
Engineer of Telecommunications from Lulea College, and he completed a senior
executive business course at IMD in Lausanne, Switzerland. He is a citizen of
Sweden.
EUGENE A. RIZZO has served as our Vice President, Sales and Marketing since
March 1998 and has over 22 years of experience in international sales and
marketing and 11 years of experience in the telecommunications industry. From
1993 to 1998, Mr. Rizzo managed sales and marketing groups for several
affiliates of Unisource NV, including Unisource Carrier Services and
AT&T-Unisource Communications Services, an international joint venture between
AT&T Corp. and Unisource NV. Prior to joining Unisource, Mr. Rizzo held various
marketing and management positions with International Business Machines
Corporation, or "IBM", Wang Laboratories, Inc. and Tandem Computers Inc. While
at Tandem, Mr. Rizzo assisted in the start-up of Tandem's European Telco Group.
Mr. Rizzo holds a Master of Business Administration degree from the University
of Massachusetts. He is a citizen of the United States.
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TERJE NORDAHL has served as our Chief Operating Officer since March 1998 and
has 26 years of experience in telecommunications operations. Mr. Nordahl also
has extensive experience in the computer and Internet industry. As a Managing
Director at Unisource Business Networks BV from 1997 to 1998, he established and
built the Unisource Business Data Network in Norway. From 1995 to 1997,
Mr. Nordahl was President of Telia AS (Norway), Telia's subsidiary in Norway,
where he supervised the building of an ATM backbone network with integrated
voice and data services. From 1993 to 1995, Mr. Nordahl established and operated
Creative Technology Management AS, which provided business development services
for government and industrial organizations. Prior to establishing CTM,
Mr. Nordahl held engineering, development and marketing positions with various
companies, including IBM and telecommunications companies affiliated with
Ericsson (L.M.) Telephone Co. and ITT Corp. Mr. Nordahl holds a First Honors
Bachelor of Science degree from Heriot-Watt University, Edinburgh and has
completed the INSEAD Advanced Management Program. He is a citizen of Norway.
JOACHIM W. BAUER has served as our Chief Financial Officer since March 1998
and has six years of experience in the telecommunications industry. From 1994 to
1998, Mr. Bauer served as Chief Financial Officer of Unisource Carrier Services.
Before joining Unisource Carrier Services, Mr. Bauer held various management
positions with IBM and its affiliates, including Controller of IBM
(Switzerland). Mr. Bauer graduated from a commercial school in Zurich, was
educated at IMEDE business school, Lausanne, Switzerland, and completed the
senior executive program of the Swiss Executive School (SKU). Mr. Bauer holds a
Certified Diploma in Accounting and Finance (CPA). He is a citizen of Germany.
KEES VAN OPHEM has served as our Vice President, Purchase and General
Counsel since March 1998, with responsibility for interconnection, licensing,
legal affairs and carrier relations. Mr. van Ophem has eight years of experience
in the telecommunications industry. Prior to joining us, he was Vice President,
Purchase and General Counsel for Unisource Carrier Services from 1994 to 1998
and was on its management Board from its inception in early 1994. From 1992 to
1994 Mr. van Ophem served as legal counsel to Royal PTT Nederland NV (KPN), with
responsibility for the legal aspects of its start-up ventures in Hungary,
Bulgaria, Czech Republic and Ukraine and the formation of Unisource Carrier
Services. Prior to joining KPN, Mr. van Ophem worked at law firms in Europe and
the United States. Mr. van Ophem holds a Juris Doctorate degree from the
University of Amsterdam and, as a Fulbright scholar, a Master of Laws degree in
International Legal Studies from New York University. He is a citizen of The
Netherlands.
NEIL E. CRAVEN has served as our Vice President, Business Development since
March 1998 and has six years of experience in the telecommunications industry.
From 1995 to 1998, Mr. Craven was a member of the management team at Unisource
Carrier Services, initially responsible for Corporate Strategy and Planning and
later serving as Vice President of Business Development. Prior to joining
Unisource Carrier Services, Mr. Craven was employed by Siemens AG in Germany,
where he worked on various international infrastructure projects. Mr. Craven has
an Honors degree in Computer Engineering from Trinity College, Dublin and a
Master of Business Administration degree from the Rotterdam School of
Management. He is a citizen of Ireland.
ALEX SCHMID has served as our Vice President, Strategic Development since
December 1999 and has over seven years of experience in international
telecommunications, Internet technology and media industry investments.
Immediately prior to joining us, Mr. Schmid was the General Partner of personal
investment vehicles targeting the technology, Internet, telecommunications and
media industries. From February 1996 until September 1998, Mr. Schmid was a
Managing Director and Head of Private Equity for the Bank Austria Group, where
he was responsible for investing primarily in European telecommunications and
telecommunications-related companies and investment vehicles. Mr. Schmid also
served on the Board of directors of Central Europe Telecom Investment L.P., a
venture capital fund targeting investments in telecommunications and
telecommunications-related companies in Central Europe. From August 1995 until
February 1996, Mr. Schmid was a Vice President at AIG Capital Partners. From
March 1993 until
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August 1995, Mr. Schmid was an Associate of the Private Equity Group at
Creditanstalt. Mr. Schmid is a graduate of the Wharton School at the University
of Pennsylvania with a Bachelor of Science in Economics. He is a German citizen.
GLENN M. CREAMER has served as a director of Carrier1 International since
August 1998. Mr. Creamer has been a Managing Director of Providence Equity
Partners Inc. since its inception in 1996 and is also a General Partner of
Providence Ventures L.P., which was formed in 1991. Mr. Creamer is a director of
American Cellular Corporation, Celpage, Inc., Epoch Networks, Inc., Digiplex
S.A. (formerly Hubco S.A.), Wireless One Network L.P. and 360 Networks inc
(formerly Worldwide Fiber Inc.). Mr. Creamer received a Bachelor of Arts degree
from Brown University and a Master of Business Administration degree from the
Harvard Graduate School of Business Administration. He is a citizen of the
United States.
JONATHAN E. DICK has served as a director of Carrier1 International since
August 1998. Mr. Dick has been a Managing Director of Primus Venture Partners,
Inc. since December 1993. Prior to joining Primus in June 1991, Mr. Dick held
various positions in sales management at Lotus Development Corporation.
Mr. Dick is also a director of Ingredients.com, Paycor, Inc., PlanSoft
Corporation and Spirian Technologies, Inc. Mr. Dick received a Bachelor of
Science degree in Applied Mathematics and Economics from Brown University and a
Master of Business Administration degree from the Harvard Graduate School of
Business Administration. He is a citizen of the United States.
MARK A. PELSON has served as a director of Carrier1 International since
August 1998. Mr. Pelson is a Principal of Providence Equity Partners Inc., which
he joined in August 1996. Prior to 1996, Mr. Pelson was a co-founder and
director, from 1995 to 1996, of TeleCorp., Inc., a wireless telecommunications
company, and from 1989 to 1995 served in various management positions with AT&T,
including most recently as a general manager of strategic planning and mergers
and acquisitions. Mr. Pelson is a director of Madison River Telephone Company,
L.L.C., GlobeNet Communications Group Limited and Language Line Holdings, LLC.
Mr. Pelson received a Bachelor of Arts degree from Cornell University and a
Juris Doctorate from Boston University. Mr. Pelson is the son of Victor A.
Pelson. He is a citizen of the United States.
VICTOR A. PELSON has served as a director of Carrier1 International since
January 1999. Mr. Pelson is a Senior Advisor to Warburg Dillon Read LLC., an
investment banking firm. He was a Director and Senior Advisor of Dillon, Read &
Co. Inc. at the time of its merger in 1997 with SBC Warburg. Before joining
Dillon, Read in April 1996, Mr. Pelson was associated with AT&T from 1959 to
March 1996, where he held a number of executive positions, including Group
Executive and President responsible for the Communications Services Group,
Executive Vice President and member of the Management Executive Committee. At
his retirement from AT&T, Mr. Pelson was Chairman of Global Operations (for what
is now AT&T, Lucent Technologies and NCR) and a member of the Board of
directors. Mr. Pelson is also chairman of the Board of trustees of New Jersey
Institute of Technology and a director of Eaton Corporation, Dun & Bradstreet
Corporation and United Parcel Service, Inc. and Dynatech Corporation.
Mr. Pelson received a Bachelor of Science degree in Mechanical Engineering from
New Jersey Institute of Technology and a Master of Business Administration
degree from New York University. Mr. Pelson is the father of Mark A. Pelson. He
is a citizen of the United States.
THOMAS J. WYNNE has served as a director of Carrier1 International since
January 1999. Mr. Wynne is currently a partner with Sycamore Creek Development
Co. He was President and Chief Operating Officer of LCI International Inc. and
its subsidiaries from July 1991 to October 1997. From 1977 to 1991, Mr. Wynne
held several executive positions with MCI Communications Corp., including
President of the West Division, Vice President of Sales and Marketing for the
Mid-Atlantic Division, and Vice President in the Midwest Division. Mr. Wynne
holds a Bachelor of Science degree in Political Science from St. Joseph's
University. He is a citizen of the United States.
9
BOARD OF DIRECTORS
The general affairs and business of Carrier1 are managed by the Board of
directors. Carrier1's Articles of Incorporation provide for at least three
directors appointed by a general meeting of shareholders for terms no greater
than six years. Under the Articles, the number and terms of directors are to be
determined, and each director may be reelected or removed at any time, by a
general meeting of shareholders. Directors are not required to hold any shares
in Carrier1 by way of qualification. Carrier1 is bound by the joint signature of
two directors or the sole signature of a managing director for ordinary course
management decisions, if one has been appointed by the Board. Carrier1 currently
has six directors and has no persons appointed as corporate officers. Each
director was appointed to hold office for a term of 6 years.
COMMITTEES OF THE BOARD OF DIRECTORS
Our Board has recently established an audit committee. The audit committee,
consisting of Messrs. Dick, Wynne and M. Pelson, is responsible for reviewing
the services provided by our independent auditors, our annual financial
statements and our system of internal accounting controls. The audit committee
did not meet during 1999.
The Board has adopted a written charter for the audit committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Carrier1 does not have a compensation committee. The compensation of
executive officers and other of our key employees is determined by the Board.
Stig Johansson, our President and Chief Executive Officer, is currently a member
of the Board and has participated in such determinations. See "Certain
Relationships and Related Transactions" for a description of transactions
involving some members of the Board.
COMPENSATION OF DIRECTORS
Carrier1 will reimburse the members of the Board for their reasonable
out-of-pocket expenses incurred in connection with attending Board meetings.
Additionally Carrier1 maintains directors' and officers' liability insurance.
Carrier1 has granted 20,000 options to purchase shares to each of Messrs. Wynne
and V. Pelson. Members of the Board receive no other compensation for services
provided as a director.
10
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for
services in all capacities awarded to, earned by or paid to, our Chief Executive
Officer and our other four most highly compensated executive officers during the
periods from March 4, 1998 through December 31, 1998 and from January 1, 1999
through December 31, 1999. During 1998, these individuals held options in
Carrier One, LLC, which in turn held substantially all of the equity of
Carrier1. Pursuant to a restructuring of our management equity, these options
for Carrier One, LLC interests were cancelled and equivalent options for shares
of Carrier1 were issued in their place. The economic terms of these new options
are substantially the same as the terms of the Carrier One, LLC options.
SUMMARY COMPENSATION TABLE
SHORT TERM COMPENSATION LONG TERM COMPENSATION
----------------------------- ----------------------------
SECURITIES
OTHER UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION PERIOD(A) SALARY(B) BONUS(B) COMPENSATION(B)(C) OPTIONS COMPENSATION(E)
- - - - - - --------------------------- --------- --------- -------- ------------------ ---------- ---------------
Stig Johansson........... 1999 $279,603 $43,339 $27,938 355,555 $72,823
PRESIDENT AND CHIEF 1998 245,569 46,044 22,188 (d) 39,550
EXECUTIVE OFFICER
Eugene A. Rizzo.......... 1999 197,368 30,592 26,723 355,555 31,649
VICE PRESIDENT, SALES AND 1998 173,343 32,502 22,188 (d) 27,248
MARKETING
Terje Nordahl............ 1999 171,051 26,513 25,263 177,777 37,666
CHIEF OPERATING OFFICER 1998 135,207 25,352 19,969 (d) 24,248
Joachim W. Bauer......... 1999 171,051 26,513 26,245 355,555 40,380
CHIEF FINANCIAL OFFICER 1998 150,230 28,168 23,147 (d) 34,793
Kees Van Ophem........... 1999 171,051 26,513 25,111 355,555 16,788
VICE-PRESIDENT, PURCHASE 1998 150,230 28,168 22,188 (d) 14,756
AND GENERAL COUNSEL
- - - - - - ------------------------
(a) Short term compensation for the 1998 period relates to the period from
March 4, 1998 through December 31, 1998 except in the case of Terje Nordahl,
for whom the relevant 1998 period was March 26, 1998 through December 31,
1998.
(b) We record this compensation expense in Swiss Francs. The U.S. dollar amounts
shown for 1998 were calculated using an average exchange rate of $0.69337 to
SFr1, and for 1999 were calculated using an average exchange rate of
$0.65789 to SFr1.
(c) Consists of general business expenses and contributions under a health plan
for our executive officers. Business expenses consist of car and travel
expenses in the following approximate amounts, in thousands:
11
1998 1999
-------- --------
Stig Johansson.............................................. $22.2 $27.9
Eugene A. Rizzo............................................. 22.2 26.7
Terje Nordahl............................................... 20.0 25.3
Joachim W. Bauer............................................ 22.2 26.2
Kees van Ophem.............................................. 22.2 25.1
- - - - - - ------------------------
(d) Pursuant to the equity restructuring, options to purchase Carrier One, LLC
interests, which were granted to each executive in 1998, have been cancelled
and were replaced by the economically equivalent options shown above as
granted in 1999.
(e) Consists of contributions under a defined contribution pension plan.
STOCK OPTION GRANTS AND FISCAL YEAR-END VALUES
The following tables set forth information regarding grants of options to
purchase shares of Carrier1 and the fiscal year-end value of such options, which
were granted to the executive officers listed in the Summary Compensation Table
above pursuant to the 1999 share option plan to replace options to purchase
Carrier One, LLC interests pursuant to a restructuring of our management equity.
The economic terms of these new options are substantially the same as the terms
of the Carrier One, LLC options. Options vest in equal annual installments over
the five years ending on the fifth anniversary of the grant date of the
predecessor options, subject to the executive's continuing employment.
OPTION GRANTS IN 1999
INDIVIDUAL GRANTS
-----------------------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL OPTIONS
SECURITIES GRANTED TO EXERCISE PRESENT VALUE
UNDERLYING EMPLOYEES IN PRICE AT DATE OF
NAME OPTIONS GRANTED 1999 ($/SHARE) EXPIRATION DATE GRANT(A)
- - - - - - ---- --------------- ------------- --------- --------------- -------------
Stig Johansson.............. 355,555 14.4% $2.0 March 4, 2008 $106,666.65
Eugene A. Rizzo............. 355,555 14.4% 2.0 March 4, 2008 106,666.65
Terje Nordahl............... 177,777 7.2% 2.0 March 26, 2008 53,333.25
Joachim W. Bauer............ 355,555 14.4% 2.0 March 4, 2008 106,666.65
Kees van Ophem.............. 355,555 14.4% 2.0 March 4, 2008 106,666.65
- - - - - - ------------------------
(a) The fair value of options grants is estimated on the date of the grant of
the economically equivalent predecessor options to purchase Carrier One, LLC
interests, using the minimum value option-pricing model, as allowed under
SFAS 123 for nonpublic companies, for pro-forma footnote purposes with the
following assumptions used: dividend yield of 0%, risk-free interest rate of
5.53%, and expected option life of 5 years.
12
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS AT
ACQUIRED ON VALUE DECEMBER 31, 1999 DECEMBER 31, 1999
NAME EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - - - - - ---- ----------- -------- ------------------------------- ----------------------------
Stig Johansson......... 0 $0 71,111/284,444 $2,726,395/10,905,583
Eugene A. Rizzo........ 0 0 71,111/284,444 2,726,395/10,905,583
Terje Nordahl.......... 0 0 35,555/142,222 1,363,179/ 5,452,791
Joachim W. Bauer....... 0 0 71,111/284,444 2,726,395/10,905,583
Kees van Ophem......... 0 0 71,111/284,444 2,726,395/10,905,583
Carrier1 has authorized the issuance of options for up to 2,747,222 shares
of Carrier1 pursuant to its 1999 share option plan dated as of December 30,
1998. As of December 31, 1999, Carrier1 had outstanding options for a total of
2,478,468 shares under the 1999 share option plan and we are completing the
process of granting an additional 97,000 options to new employees. The Board has
approved and we are in the process of implementing our 2000 share option plan
and expect to grant additional options to employees in the future. Carrier1 has
also issued options to acquire 20,000 shares to each of Messrs. Wynne and V.
Pelson outside the scope of the 1999 share option plan.
EMPLOYMENT AGREEMENTS
Each of Stig Johansson, Eugene A. Rizzo, Terje Nordahl, Joachim W. Bauer and
Kees van Ophem has entered into an employment agreement with a wholly owned
subsidiary of Carrier1. The employment agreements provide that the executive
shall serve in his current capacity and that the executive shall be paid base
salary, bonus and pension plan contributions as set forth in the Summary
Compensation Table. Such agreements include, among others, the following terms:
TERM. The employment agreements continue for an unspecified period of time
and may be terminated by either party upon six months' notice.
NONDISCLOSURE, NONCOMPETITION AND NONSOLICITATION COVENANTS. Each of the
above executives has agreed that during his period of employment and the
eighteen months thereafter he will not participate in any business that is
engaged in the provision of international long distance telecommunications
services or that is otherwise in competition with any business conducted by
Carrier One, LLC or its subsidiaries. Additionally, each of the above executives
has agreed that during this non-compete period, he will not induce or attempt to
induce any of our employees to leave our employ, nor will he attempt to induce
any of our suppliers, distributors or customers to cease doing business with us.
Each of the above executives has also agreed that he will refrain from
disclosing confidential information. In addition, each of the above executives
is subject to nondisclosure, noncompetition and nonsolicitation covenants
pursuant to deeds of covenant entered into among Carrier One, LLC, Carrier One
Limited, Providence and the executives.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
EQUITY INVESTMENTS
As of December 31, 1999, shares of Carrier1 were held by Carrier1's
management and employees, Providence Equity Partners L.P. (which holds one
share) and Carrier One, LLC. Messrs. Johansson, Bauer, Rizzo, van Ophem, Craven
and Nordahl are among the management that have subscribed and paid for
outstanding shares.
Carrier One, LLC is the vehicle through which Providence and Primus
participate in the equity investment in Carrier1. In addition, Thomas J. Wynne
and Victor A. Pelson, who are directors of Carrier1, hold interests in Carrier
One, LLC through arrangements arrived at separately with Providence and
13
Primus. Mr. Wynne owns (directly or through trusts organized for the benefit of
family members) 400,000 Class A Units in Carrier One, LLC, acquired at a
purchase price of $1.00 per Class A Unit. Mr. Wynne disclaims beneficial
ownership of any Class A Units in any such trusts. Mr. Pelson owns 100,000
Class A Units in Carrier One, LLC, acquired at a purchase price of $1.00 per
Class A Unit. Messrs. Wynne and Pelson do not directly hold any outstanding
shares of Carrier1 International.
In 1999, we completed a restructuring of our management equity arrangements.
Pursuant to this restructuring, each of Messrs. Johansson, Bauer, Rizzo, van
Ophem, Craven and Nordahl in effect exchanged his equity interests and options
that he had held in Carrier One, LLC to acquire an equivalent dollar amount of
shares and options to purchase shares of Carrier1. Each effected this exchange
through a series of transactions with Carrier One, LLC, Providence and Primus
and Carrier1. These individuals' portions of the total equity investment in
Carrier1 did not change significantly as a result of this restructuring, but
each of these individuals holds shares and options to acquire shares of Carrier1
directly. In addition, Carrier1 has granted Thomas J. Wynne and Victor A. Pelson
options to purchase a total of 40,000 shares of Carrier1 (20,000 shares for
each), at $2.00 per share.
1999 SHARE OPTION PLAN
The Board of Carrier1 has adopted the 1999 share option plan, dated as of
December 30, 1998, under which we and related companies of the consolidated
Carrier1 group may grant to any employee or director options for shares of
Carrier1 or other equity securities issued by Carrier1 International. The option
plan is administered by the Board or a committee appointed by the Board, and
authorizes the Board or such committee to issue options in such forms and on
such terms as determined by the Board or such committee. The Board or such
committee may determine the number of options to grant. During 1999, the Board
raised the maximum number of shares issuable pursuant to the option plan from
2,222,222 to 2,747,222 shares. The per share exercise price for the options may
not be less than $2.00. If options are to be granted to an employee of a
subsidiary, such subsidiary will grant such options instead of Carrier1.
Carrier1 will grant the subsidiary options to acquire shares to meet its option
obligations at a per share exercise price based upon an agreed fair market value
(or, failing agreement, a fair market value determined by the Board). Options
granted under the option plan will vest in five equal annual installments
beginning on the first anniversary of the date of commencement of employment.
Options will expire if not exercised within 10 years of the grant, or on an
earlier date as specified by the Board or the committee. If the employment of a
participant is terminated for any reason, all unvested options will immediately
expire and vested options must be exercised within a particular number of days,
which number will vary depending on the reasons for termination. Subject to
certain exceptions, options will be nontransferable during the life of an
optionee except pursuant to a valid domestic relations order. Upon an optionee's
death, disability or termination of employment, the subsidiary which employs the
optionee, or its designee, will have the right to repurchase all shares held by
the optionee, whether or not such shares were acquired pursuant to the exercise
of options. Under Luxembourg law, Carrier1 and certain subsidiaries may be
precluded from exercising such right directly.
As of December 31, 1999, we have granted options pursuant to the option plan
to acquire 2,478,468 shares at exercise prices ranging from $2.00 to $40.34 per
share plus applicable capital duty (currently 1% of the subscription price
payable to Carrier1 International by the subsidiary granting the applicable
option).
The Board has approved and we are in the process of implementing the 2000
share option plan, which is substantially similar in terms to the 1999 share
option plan. We are completing the process of granting an additional 97,000
options to new employees and we intend to grant additional options to employees
in the future.
14
SECURITIES PURCHASE AGREEMENT
Carrier1, Carrier One, LLC and employee investors have entered into the
securities purchase agreement (effective as of March 1, 1999) under which
Carrier One, LLC and each employee investor has purchased, or committed to
purchase, a specified number of shares at prices ranging from $2.00 to $40.34
per share, for an aggregate purchase price of approximately $6.0 million. As
part of the restructuring of the management equity arrangements described above,
each of Messrs. Johansson, Bauer, Rizzo, van Ophem, Craven, Nordahl, Gross, and
Poulter, in effect, exchanged 68,260 Class A Units (at $1.00 per unit) of
Carrier One, LLC to acquire, pursuant to the securities purchase agreement,
34,130 shares (at $2.00 per share). Carrier1 intends in the future to issue
additional shares to employees that are or become party to the securities
purchase agreement. The securities purchase agreement also contains provisions
relating to the completion of the equity investment in Carrier1 by Carrier One,
LLC in which Providence, Primus and Messrs. Wynne and Pelson have membership
interests. The $60 million equity investment by Providence and Primus was
completed in February 1999. Carrier One, LLC has paid in an additional $800,000
to the capital of Carrier1 and received 400,000 shares. The securities purchase
agreement provides that Carrier1 will indemnify Carrier One, LLC and employee
investors for, among other things, losses related to any transaction financed or
to be financed with proceeds from the sale of securities purchased pursuant to
the securities purchase agreement or any related agreement and environmental
losses. The securities purchase agreement contains customary conditions,
representations and warranties.
REGISTRATION RIGHTS AGREEMENT
Carrier1, Carrier One, LLC, and Messrs. Johansson, Bauer, Rizzo, van Ophem,
Craven, Nordahl, Gross, Poulter, Wynne and Pelson, as the original investors,
have entered into a registration rights agreement, effective as of March 1,
1999. The registration rights agreement provides that Carrier One, LLC may at
any time request registration under the Securities Act of its shares and certain
other equity securities. In addition, the registration rights agreement gives
certain piggyback registration rights to Carrier One, LLC and the original
investors and, at the request of certain original investors, possibly additional
employees party to the securityholders' agreement described below. The
registration rights agreement contains provisions governing the registration
statement filing process. Among other things, it provides that Carrier1 will
bear all registration expenses and expenses for each piggyback registration in
which Carrier One, LLC or any of the original investors participate, other than
underwriting discounts and commissions, in connection with its obligations under
the registration rights agreement.
SECURITYHOLDERS' AGREEMENT
In connection with the securities purchase agreement, Carrier1 has entered
into a securityholders' agreement, effective as of March 1, 1999, with Messrs.
Wynne and Pelson, the employee investors and Carrier One, LLC. This agreement
places restrictions on employee investors' ability to transfer their securities
without the prior written consent of the Board except under special
circumstances. Transfers of securities are subject to the right of first refusal
by Carrier One, LLC or its transferee. Carrier One, LLC will also benefit from
preemptive rights in certain other circumstances. This agreement also provides
that the employee investors will (i) consent to and raise no objections to a
sale of Carrier1 approved by the Board and (ii) comply with a Board request to
pledge their securities to secure financing to be provided to Carrier1
International. Employee investors have tag-along rights in the event of sales by
Carrier One, LLC or its members of securities if a change of control is
involved. Finally, under this agreement, the employee investors agree not to
disclose confidential information of, compete with, or solicit employees or
customers from Carrier One, LLC or Carrier1.
15
EPOCH PEERING ARRANGEMENT
We have entered into a peering arrangement with Epoch Networks. The contract
with Epoch Networks provides for the free exchange of Internet traffic between
us and Epoch Networks. A fund managed by Providence that holds a majority of the
Class A Units of Carrier One, LLC and another fund managed by Providence that
also holds an interest in Class A Units of Carrier One, LLC own a combined 19%
of the outstanding equity of Epoch Networks. Glenn Creamer, one of our
directors, is also a director of Epoch.
DATA CENTER FACILITIES JOINT VENTURE
We are developing our network of data centers in major European markets
through our Digiplex joint venture, formerly named the Hubco joint venture.
Digiplex intends to build up to 20 to 25 facilities, generally ranging in size
from 100,000 to 350,000 square feet in major markets in Europe during 2000 and
2001. We expect to have a minimum of between 10,000 and 25,000 square feet for
our use and the use of our customers in each facility. We expect to connect each
facility to our fiber optic network. As a strategic anchor tenant in these
facilities, we will have favorable rents and rights to additional space. We can
opt not to be a strategic anchor tenant in some planned locations and, if we
wish to build data centers in additional locations, we have given Digiplex the
right of first refusal to construct them.
We expect to compete with Digiplex and another of our joint venture partners
in providing data center capabilities. The joint venture agreement permits us to
do so, with some exceptions. Moreover, we will be entitled to retain the
benefits of our strategic anchor tenant status unless we default or we cease to
be a Digiplex shareholder or we acquire or are acquired by a company that
competes with Digiplex.
Our partners in Digiplex include an investment vehicle for funds managed by
Providence and Primus. Glenn Creamer, one of our directors, is a director of
Digiplex.
16
360NETWORKS INC. BACKHAUL AGREEMENT
In December 1999, we entered into an agreement with a subsidiary of
369Networks inc. (formerly Worldwide Fiber Inc.), a wholesale managed bandwidth
services provider with substantial North American and transatlantic assets,
under which we will provide bandwidth from the point of termination of its
transatlantic capacity in London, to destinations across Europe. We expect to
commence transmission pursuant to this agreement in March 2001 and, as one of
their major providers of European backhaul capacity, expect to deliver a
substantial amount of bandwidth over the 15 year term of the agreement. Under
the agreement, 360Networks has the option to swap excess transatlantic capacity
for four strands of fiber on our German network or a combination of two strands
of fiber and a 10 Gbps wavelength once it has purchased a total of 100 STM-1s. A
fund managed by Providence owns approximately 4.5% of the outstanding common
stock of 360Networks inc. Glenn Creamer, one of our directors, is also a
director of 360Networks inc.
OTHER TRANSACTIONS
Carrier One, LLC advanced a loan of $68,260, bearing interest at 12%, to
Mr. van Ophem, evidenced by a promissory note dated June 30, 1998, to finance
his original equity investment in Carrier One, LLC. Mr. van Ophem is required to
repay principal and interest on the loan in five equal annual installments of
$18,936 commencing July 1, 2001. Effective as of March 1, 1999, Carrier1
International GmbH became the creditor with respect to the loan. As of December
31, 1999, Mr. van Ophem owed $68,260 to Carrier1.
During the year ended December 31, 1999 and during the period ended
December 31, 1998, we reimbursed Providence and Primus for expenses incurred in
connection with our formation and the negotiation of certain agreements we
entered into. Such reimbursements totaled $96,000 and $339,000, respectively,
and were expensed as selling, general and administrative expenses.
BENEFICIAL OWNERSHIP
BENEFICIAL OWNERSHIP OF CARRIER1
The following table sets forth information regarding the beneficial
ownership of the shares of Carrier1, as of March 22, 2000 by:
(1) each person known to Carrier1 to own beneficially more than 5% of
Carrier1's outstanding shares,
(2) each director of Carrier1,
(3) each executive officer of Carrier1 listed in the Summary
Compensation Table under "Executive Compensation" above, and
(4) all executive officers and directors of Carrier1 as a group.
17
All information with respect to beneficial ownership has been furnished to
us by the respective shareholders of Carrier1.
NUMBER OF PERCENTAGE
NAME AND ADDRESS OF BENEFICIAL OWNER(1) SHARES OF SHARES
- - - - - - --------------------------------------- ---------- ----------
Carrier One, LLC............................................ 28,272,087 69.8%
c/o Providence Equity Partners Inc.
901 Fleet Center
50 Kennedy Plaza
Providence, RI 02903
Providence Equity Partners L.P.(2).......................... 28,272,088 69.8
901 Fleet Center
50 Kennedy Plaza
Providence, RI 02903
Jonathan M. Nelson(2)....................................... 28,272,088 69.8
Paul J. Salem(2)............................................ 28,272,088 69.8
NAME OF EXECUTIVE OFFICER OR DIRECTOR
- - - - - - ------------------------------------------------------------
Stig Johansson(3)........................................... 176,352 *
Eugene A. Rizzo(3).......................................... 176,352 *
Terje Nordahl(3)............................................ 105,240 *
Joachim Bauer(3)............................................ 176,352 *
Kees van Ophem(3)........................................... 176,352 *
Glenn M. Creamer(2)......................................... 28,272,088 69.8
Jonathan E. Dick............................................ -- --
Mark A. Pelson.............................................. -- --
Victor A. Pelson(4)......................................... 8,000 *
Thomas J. Wynne(4).......................................... 8,000 *
All directors and executive officers as a group (12 29,275,088 70.2
persons)..................................................
- - - - - - ------------------------
* Less than one percent.
(1) "Beneficial owner" refers to a person who has or shares the power to vote or
direct the voting of a security or the power to dispose or direct the
disposition of the security or who has the right to acquire beneficial
ownership of a security within 60 days. More than one person may be deemed
to be a beneficial owner of the same securities. In computing the number of
shares beneficially owned by a person and the percentage ownership of that
person, shares subject to options and warrants held by that person that are
currently exercisable or exercisable within 60 days of March 22, 2000 are
deemed outstanding. Such shares, however, are not deemed outstanding for the
purpose of computing the percentage ownership of any other person.
(2) Carrier One, LLC is the direct beneficial owner of 30,399,999 shares and
Providence Equity Partners L.P. ("Providence L.P.") is the direct beneficial
owner of 1 share. Providence L.P. is the majority Class A Unit holder of
Carrier One, LLC, and by virtue of such status may be deemed to be the
beneficial owner of the shares in which Carrier One, LLC has direct
beneficial ownership. Providence Equity Partners L.L.C. ("PEP LLC") is the
general partner of Providence L.P., and by virtue of such status may be
deemed to be the beneficial owner of the shares in which Providence L.P. has
direct or indirect beneficial ownership. Jonathan M. Nelson, Glenn M.
Creamer and Paul J. Salem may be deemed to share voting and investment power
with respect to the shares in which PEP LLC has direct or indirect
beneficial ownership. Each of Jonathan M. Nelson, Glenn M. Creamer, Paul J.
Salem, PEP LLC and Providence L.P. disclaims such deemed beneficial
ownership. The address of Messrs. Nelson and Salem is c/o Providence Equity
Partners Inc., 901 Fleet Center, 50 Kennedy Plaza, Providence, RI 02903.
18
(3) Includes 34,130 shares and an additional 142,222 shares (71,110, in the case
of Mr. Nordahl) issuable to each such person upon exercise of options which
are exercisable within 60 days.
(4) Consists of options exercisable within 60 days that Carrier1 International
has issued to each of Thomas J. Wynne and Victor A. Pelson out of a total of
40,000 shares (20,000 shares each).
BENEFICIAL OWNERSHIP OF CARRIER ONE, LLC, THE MAJORITY SHAREHOLDER OF CARRIER1
The following table sets forth certain information regarding the beneficial
ownership of Class A Units (the "Class A Units") of Carrier One, LLC, the
majority shareholder of Carrier1, as of December 31, 1999 by:
(1) each director of Carrier1,
(2) each executive officer of Carrier1 International listed in the
Summary Compensation Table under "Executive Compensation" above,
(3) all directors and executive officers of Carrier1 as a group as of
December 31, 1999, and
(4) each person known to Carrier1 to own beneficially more than 5% of
Carrier One, LLC's Class A Units.
PERCENTAGE OF
NAME OF DIRECTOR/EXECUTIVE OFFICER NUMBER OF UNITS UNITS(1)
- - - - - - ---------------------------------- --------------- -------------
Stig Johansson.............................................. -- --
Eugene A. Rizzo............................................. -- --
Terje Nordahl............................................... -- --
Joachim Bauer............................................... -- --
Kees van Ophem.............................................. -- --
Glenn M. Creamer (2)........................................ 50,000,000 82.24%
Jonathan E. Dick............................................ -- --
Mark A. Pelson.............................................. -- --
Victor A. Pelson............................................ 100,000 *
Thomas J. Wynne (3)......................................... 400,000 *
All directors and executive officers as a group (12 50,500,000 83.55%
persons)..................................................
NAME AND ADDRESS OF BENEFICIAL OWNER
- - - - - - ------------------------------------------------------------
Providence Equity Partners, L.P. (2)........................ 49,312,400 81.11%
901 Fleet Center
50 Kennedy Plaza
Providence, RI 02903
Jonathan M. Nelson (2)...................................... 50,000,000 82.24%
Paul J. Salem (2)........................................... 50,000,000 82.24%
Primus Capital Fund IV Limited Partnership (4).............. 9,600,000 15.79%
5900 Landerbrook Drive,
Suite 200
Cleveland, OH 44124-4020
- - - - - - ------------------------
* Less than one percent.
(1) Based upon 60.8 million Class A Units outstanding.
(2) Providence L.P. holds 49,312,400 Class A Units, and another fund managed by
Providence holds 687,600 Class A Units. PEP LLC is the general partner of
Providence L.P. and the other fund, and by virtue of such status may be
deemed to be the beneficial owner of the Class A Units in which
19
Providence L.P. and the other fund have direct or indirect beneficial
ownership. Jonathan M. Nelson, Glenn M. Creamer and Paul J. Salem may be
deemed to share voting and investment power with respect to the Class A
Units in which PEP LLC has direct or indirect beneficial ownership. Each of
Jonathan M. Nelson, Glenn M. Creamer, Paul J. Salem and PEP LLC disclaims
such deemed beneficial ownership.
(3) Thomas J. Wynne holds (directly or through trusts organized for the benefit
of family members) 400,000 Class A Units. These Class A Units do not include
additional options that Carrier1 has issued to Mr. Wynne for a total of
40,000 shares. Mr. Wynne disclaims beneficial ownership in any Class A Units
held in any such trusts.
(4) Primus Capital Fund IV Limited Partnership ("Primus Capital LP") holds
9,600,000 Class A Units and another fund managed by Primus holds 400,000
Class A Units. Primus Venture Partners IV Limited Partnership ("Primus
Venture LP") is the general partner of Primus Capital LP and the other fund,
and Primus Venture Partners IV, Inc. ("Primus Venture Inc.") is the General
Partner of Primus Venture LP. By virtue of such status, either of Primus
Venture LP or Primus Venture Inc. may be deemed to be the beneficial owner
of the Class A Units in which Primus Capital LP and the other fund have
beneficial ownership. Each of Primus Venture LP and Primus Venture Inc.
disclaims such deemed beneficial ownership.
OTHER MATTERS
The proxy holders are authorized to vote, in their discretion, upon matters
incidental to matters listed on the agenda or emergency decisions as may come
before the annual meeting, the special meeting and any adjournment of the
meetings. Among the procedural matters presented to each meeting, shareholders
or their proxies will appoint a "bureau" under Luxembourg practice. The "bureau"
consists of a president to preside at the meeting, a secretary in charge of
drawing up the minutes, and a scrutineer to verify the capacity of the persons
present. Bureau members are chosen from the persons in attendance. The bureau
members will establish a presence list to be signed by the participants at the
meetings. The bureau members will also sign the minutes of the meetings, as will
those shareholders who so request. Other than the proposals described above and
procedural matters for the conduct of the meetings, the Board knows of no other
matters which will be presented for action by the shareholders.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Without prejudice to the statutory rights granted under Luxembourg law to
shareholders who alone or in aggregation with other shareholders control 20% of
the shares of the Company, proposals of shareholders intended to be presented at
the 2001 annual meeting of shareholders must, in addition to satisfying the
other requirements of the Securities and Exchange Commission's rules and
regulations, be received by the Company at its principal executive offices no
later than January 16, 2001 in order to be considered for inclusion in the
Company's 2001 Proxy Statement.
20
MATERIAL INCORPORATED BY REFERENCE
Our Annual Report to Shareholders for the fiscal year ended December 31,
1999, including audited financial statements, accompanies this Proxy Statement
in the form of copies of the Company's Form 10-K filed with the U.S. Securities
and Exchange Commission, together with supplementary material. The accompanying
Annual Report does not include exhibits to the Form 10-K, however. Upon request
by an eligible shareholder, we will provide copies of these exhibits for a
reasonable fee. Requests for a copy of the exhibits should be mailed to:
Carrier1 International S.A., Attn: Investor Relations, c/o Carrier1
International GmbH, Militarstrasse 36, CH-8004, Zurich, Switzerland.
Alternatively, a copy of our Form 10-K and the exhibits can be obtained by
searching the U.S. Securities and Exchange Commission's EDGAR database on the
U.S. Securities and Exchange Commission's website at "www.sec.gov."
By Order of the Board of Directors
Stig Johansson
Director, President and
Chief Executive Officer
Luxembourg
May 15, 2000
21
ANNEX A
CARRIER 1 INTERNATIONAL S.A.
(THE "COMPANY")
SOCIETE ANONYME
3, ROUTE D'ARLON
L-8009 STRASSEN
RC LUXEMBOURG N DEG. B 65864
ANNUAL ACCOUNTS
STATUTORY AUDITORS' REPORT
REPORT OF THE DIRECTORS
AUGUST 13, 1998 -- DECEMBER 31, 1999
TABLE OF CONTENTS
PAGE
--------
STATUTORY AUDITORS' REPORT.................................. 1
ANNUAL ACCOUNTS.............................................
--Balance sheet........................................... 2
--Profit and loss account................................. 3
--Notes to the annual accounts............................ 4
REPORT OF THE DIRECTORS..................................... 7
To the Shareholders of
Carrier 1 International S.A.
LUXEMBOURG
We have audited the attached annual accounts of Carrier 1 International S.A.
(the "Company") for the period from August 13, 1998 to December 31, 1999. These
annual accounts are the responsibility of the Board of Directors. Our
responsibility is to express an opinion on these annual accounts based on our
audit.
We conducted our audit in accordance with International Standards on
Auditing. Those Standards require that we plan and perform the audit to obtain
reasonable assurance about whether the annual accounts are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the accounts. An audit also includes assessing
the accounting principles used and significant estimates made by the Board of
Directors in preparing the accounts, as well as evaluating the overall accounts'
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the attached annual accounts give, in conformity with the
Luxembourg legal and regulatory requirements, a true and fair view of the
assets, liabilities and financial position of Carrier 1 International S.A. as at
December 31, 1999 and the results of its operations for the period then ended.
DELOITTE & TOUCHE
Statutory auditor
B. Schaus
Director
February 11, 2000
1
CARRIER 1 INTERNATIONAL S.A.
BALANCE SHEET
AS AT DECEMBER 31, 1999
(EXPRESSED IN UNITED STATES DOLLARS)
1999
ASSETS -----------
USD
FIXED ASSETS
Intangible assets (note 3)................................ 14,284,382
Financial assets (note 2)
Shares in affiliated undertakings....................... 40,249,665
Loans to affiliated undertakings........................ 286,896,016
Own shares (note 5) 8,166
-----------
327,153,847
CURRENT ASSETS
Other debtors............................................. 377,019
Cash at bank.............................................. 87,051
Restricted Cash........................................... 63,658,536
-----------
64,122,606
PREPAYMENTS & ACCRUED INCOME 2,064,646
LOSS FOR THE FINANCIAL PERIOD............................... 17,821,755
-----------
425,447,236
===========
LIABILITIES
CREDITORS: amounts becoming due and payable within one year
Trade creditors........................................... 41,450
Amounts owed to affiliated undertakings................... 6,152,321
Other creditors including tax and social security......... 12,371,474
CREDITORS: amounts becoming due and payable after more than
one year
Debenture loans and warrants payable...................... 338,336,506
CAPITAL & RESERVES (note 4)
Subscribed capital........................................ 66,021,400
Share premium............................................. 2,524,085
-----------
68,545,485
-----------
425,447,236
===========
The accompanying notes form an integral part of these annual accounts.
2
CARRIER 1 INTERNATIONAL S.A
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED DECEMBER 31, 1999
(EXPRESSED IN UNITED STATES DOLLARS)
FOR THE PERIOD
FROM AUGUST 13,
1998 TO
DECEMBER 31, 1999
-----------------
USD
CHARGES
Interest payable and similar charges........................ 30,460,694
Loss on foreign exchange.................................... 7,754,420
Other charges............................................... 647,456
----------
38,862,570
==========
INCOME
Other interest receivable and similar income derived from
affiliated undertakings................................... 17,602,821
Other interest receivable and similar income derived from
outside parties........................................... 3,437,994
LOSS FOR THE FINANCIAL PERIOD............................... 17,821,755
----------
38,862,570
==========
The accompanying notes form an integral part of these annual accounts.
3
CARRIER 1 INTERNATIONAL S.A.
NOTES TO THE ANNUAL ACCOUNTS
FOR THE PERIOD ENDED DECEMBER 31, 1999
NOTE 1--GENERAL
Carrier 1 International S.A. (the "Company") was incorporated as a SOCIETE
ANONYME on August 13, 1998 in Luxembourg for an unlimited period. The Company's
registered office is at 3, route d'Arlon, L-8009 Strassen, and it is registered
under RC Luxembourg N DEG.B65864.
The objective of the Company is to carry out all transactions pertaining to
acquiring participating interests in any enterprise, in whatever form, having
activities directly or indirectly related to the field of telecommunications,
and the administration, management, control, and development of those
participating interests. Additionally, the Company may take any action permitted
by the laws of Luxembourg for commercial companies.
The Company's accounting year coincides with the calendar year with the
exception of the first accounting year, which concerns the period from
August 13, 1998 to December 31, 1999.
The ultimate parent of the Company is Carrier One International LLC which
files consolidated accounts in the United States of America.
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The annual accounts are prepared in accordance with generally accepted
accounting principles and regulations in force in the Grand Duchy of Luxembourg
The significant accounting policies are as follows:
FOREIGN CURRENCIES
The Company maintains its accounting records in United States Dollar (USD)
and the annual accounts are expressed in this currency. Assets and liabilities
denominated in foreign currencies are translated into United States Dollar at
the period-end exchange rate. This may result in the recognition of unrealised
exchange losses. In accordance with Luxembourg requirements, unrealised gains
are not recognised. Transactions in foreign currencies are translated at the
exchange rate in effect at the time of the transaction.
INTANGIBLE FIXED ASSETS
Intangible assets include financing costs capitalised linked to the issuance
of debentures loans and warrants; they also include the cost of licences
acquired by the Company.
Financing costs are amortised over the life of the related liability.
Licences are amortised over a period of ten years.
FINANCIAL FIXED ASSETS
Financial fixed assets are stated at cost. Where there is a permanent
diminution in value of the financial fixed assets, a value adjustment is made.
DEBTORS
Debtors are valued at their nominal value less provision for any permanent
diminution in value.
4
CARRIER 1 INTERNATIONAL S.A.
NOTES TO THE ANNUAL ACCOUNTS (CONTINUED)
FOR THE PERIOD ENDED DECEMBER 31, 1999
NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROVISIONS FOR LIABILITIES AND CHARGES
At the close of business each year, the board of directors determines
whether provisions should be set up to cover foreseeable liabilities and
charges.
NOTE 3--INTANGIBLE ASSETS
FINANCING
COSTS LICENCES TOTAL
---------- -------- ----------
COST......................................... 15,191,085 82,561 15,273,646
Amortisation for the period ended
December 31, 1999.......................... (986,678) (2,586) (989,264)
---------- ------ ----------
NET BOOK VALUE............................... 14,204,407 79,975 14,284,382
NOTE 4--CAPITAL AND RESERVES
SHARE CAPITAL
The Company was incorporated with an issued capital amounting to USD 40,000
divided into 20,000 shares with a par value of USD 2 each.
The authorised capital of the corporation is fixed at USD 60,000,000 to be
divided into 30,000,000 shares with a par value of USD 2 each.
In 1998, the share capital was increased to USD 30,770,414 by the issue of
15,365,207 new shares with a par value of USD 2 each.
At January 11, 1999, the share capital was increased to USD 37,770,413 by
the issue of 3,500,000 new ordinary shares with a par value of USD 2 each.
At January 27, 1999, the share capital was increased to USD 37,971,852 by
the issue of 95,719 new ordinary shares with a par value of USD 2 each.
At February 3, 1999, the share capital was increased to USD 41,961,852 by
the issue of 2,000,000 new ordinary shares with a par value of USD 2 each.
At February 10, 1999, the authorised capital was fixed at USD 110,000,000 to
be divided into 55,000,000 shares with a par value of USD 2 each. A maximum of
USD 4,444,444 are reserved to the holders of options issued under the 1999 Share
Option Plan approved by the board of directors on January 15, 1999 and a maximum
of USD 8,000,000 are reserved for the holders of warrants issued as part of an
issuance by the corporation of 1 USD Units, each USD Unit consisting of one
dollar note due 2009 and one warrant to purchase shares of common stock of the
corporation and/or 2 Euro Units, each Euro Unit consisting of one Euro note due
2009 and one warrant to purchase shares of common stock of the corporation, in
each case as determined by the board of directors or its designee(s).
At February 17, 1999, the share capital was increased to USD 60,000,000 by
the issue of 9,019,074 new ordinary shares with a par value of USD 2 each.
5
CARRIER 1 INTERNATIONAL S.A.
NOTES TO THE ANNUAL ACCOUNTS (CONTINUED)
FOR THE PERIOD ENDED DECEMBER 31, 1999
NOTE 4--CAPITAL AND RESERVES (CONTINUED)
At May 18, 1999, the share capital was increased to USD 62,038,142 by the
issue of 1,019,071 new ordinary shares with a par value of USD 2 each.
At October 8, 1999, the share capital was increased to USD 66,021,400 by the
issue of 1,991,629 new ordinary shares with a par value of USD 2 each.
Consequently, at December 31, 1999, the subscribed capital of the
corporation is fixed at USD 66,021,400 represented by 33,010,700 shares with a
par value of USD 2 each, all paid in full.
LEGAL RESERVE
In accordance with Luxembourg Law, the Company must appropriate to the legal
reserve a minimum of 5% of the net profit, until such reserve equals 10% of the
share capital. This reserve is not available for distribution.
NOTE 5--OWN SHARES
The company has repurchased 4,083 shares (valued at USD 8,166) of its own
capital. The Company has repurchased these shares in order to satisfy the
requirements of a repurchase agreement with former employees. The amount
repurchased is equal to approximately 0.01% of the outstanding share capital.
Under Luxembourg law the company will be required to allocate future
earnings to a reserve in an amount equal to the own shares recorded on the
balance sheet.
NOTE 6--TAXATION
The company is subject to the fiscal Law applicable to all Capital Companies
in Luxembourg. For the period ended December 31, 1999, the Company has not
incurred any tax expense.
6
CARRIER 1 INTERNATIONAL S.A.
REPORT OF THE DIRECTORS
To the shareholders of CARRIER 1 INTERNATIONAL S.A.
We have pleasure in submitting the balance sheet, the profit and loss
account and accompanying notes for the year ended December 31, 1999.
The Carrier 1 International S.A. accounting year coincides with the calendar
year with the exception of the first accounting year, which concerns the period
from August 13, 1998, the date of incorporation, to December 31, 1999.
The results for the financial period starting August 13, 1998 and ending
December 31, 1999 show a loss of USD 17,821,755 which is in accordance with the
directors' prior expectations. The directors recommend that the loss is retained
and carried forward.
We also recommend that you approve the accounts as presented and that you
vote for the discharge of the directors and of the statutory auditors from all
liability resulting from the performance of their functions during the first
accounting year.
The Company has repurchased 4,083 shares (valued at USD 8,166) of its own
capital in order to satisfy the requirements of a repurchase agreement with
former employees. The amount repurchased is equal to approximately 0.01% of the
outstanding share capital. The Company holds no other shares of its own capital.
In the first quarter of 2000, the Company issued and sold to the public
8,625,000 shares at a price (including the underwriting commissions and
discounts) of Euro 87.00 per share and USD 17.4835 per American Depositary Share
(each ADS representing 0.2 shares).
For your information, a detailed explanation of the activity and
consolidated financial statements of the Company and its subsidiaries is found
in the Company's annual report on Form 10-K, filed with the US Securities and
Exchange Commission on March 30, 2000.
Stig Johansson Glenn E. Creamer
Director Director
May 2, 2000
This report is not a part of the annual accounts of the Company.
7