UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
(AMENDMENT NO.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
FiberCore, 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)
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[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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previously. Identify the previous filing by registration statement number, or
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FIBERCORE, INC.
253 WORCESTER ROAD
P.O. BOX 180
CHARLTON, MASSACHUSETTS 01507
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 16, 2002
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The Annual Meeting of Shareholders of FiberCore, Inc. (the "Company") will
be held at the Ramada Inn, 624 Southbridge Street, Auburn, MA on Friday, August
16, 2002, at 10:00 A.M., Eastern Daylight Time, for the following purposes:
1. To elect two Class II directors for a three-year term expiring at the
annual meeting in 2005;
2. To consider and take action on the ratification of selection of
Deloitte & Touche LLP as the Company's independent certified public
accountants for 2002; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business on May 31, 2002 will
be entitled to receive notice of and to vote at the meeting.
Shareholders are cordially invited to attend the meeting in person.
However, whether or not you expect to attend, we urge you to read the
accompanying Proxy Statement and then complete, sign, date and return the
enclosed proxy card in the enclosed postage-prepaid envelope. It is important
that your shares are represented at the meeting, and your promptness will assist
us to prepare for the meeting and to avoid the cost of a follow-up mailing. If
you attend the meeting, you can vote either in person or by your proxy. If you
receive more than one proxy card because you own shares registered in different
names or at different addresses, each proxy card should be completed and
returned.
Sincerely,
/s/ Charles De Luca
Charles De Luca
Secretary
Charlton, Massachusetts
June 28, 2002
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FIBERCORE, INC.
253 WORCESTER ROAD
P.O. BOX 180
CHARLTON, MASSACHUSETTS 01507
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PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AUGUST 16, 2002
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GENERAL INFORMATION
This Proxy Statement is furnished to shareholders of FiberCore, Inc. (the
"Company") in connection with the solicitation by the Board of Directors of the
Company of proxies for use at its Annual Meeting of Shareholders (the
"Meeting"). The Meeting is scheduled to be held on August 16, 2002, at 10:00
A.M., Eastern Daylight Time, at the Ramada Inn, 624 Southbridge Street, Auburn,
MA, and at any and all adjournments thereof. It is anticipated that the mailing
to shareholders of this Proxy Statement and the enclosed form of proxy will
commence on or about July 19, 2002.
At the Meeting, shareholders will be asked to vote upon: (1) the election
of two Class II directors for a three-year term; (2) the ratification of the
selection of independent certified public accountants for 2002; and (3) such
other business as may properly come before the Meeting and any and all
adjournments thereof.
VOTING RIGHTS AND VOTES REQUIRED
The close of business on May 31, 2002 has been fixed as the record date
(the "Record Date") for the determination of shareholders entitled to receive
notice of and to vote at the Meeting. As of the close of business on such date,
the Company had outstanding and entitled to vote 61,589,533 shares of common
stock, par value $.001 per share ("Common Stock").
A majority of the outstanding shares of the Common Stock must be
represented in person or by proxy at the Meeting in order to constitute a quorum
for the transaction of business. The record holder of each share of the Common
Stock entitled to vote at the Meeting will have one vote for each share so held.
Proxies submitted by brokers that do not indicate a vote for one or more of the
proposals because the holders do not have discretionary voting authority and
have not received instructions from the beneficial owners on how to vote on
those proposals are called "broker non-votes."
There are differing shareholder vote requirements for the various
proposals. Directors will be elected by a plurality of the votes cast at the
Meeting, meaning the two nominees receiving the most votes will be elected
directors. Only votes cast for a nominee will be counted, except that the
accompanying proxy will be voted for the two management nominees unless the
proxy contains instructions to the contrary. Abstentions, broker non-votes and
instructions on the accompanying proxy to withhold authority to vote for one or
more of the nominees will result in those nominees receiving fewer votes.
However, such action will not reduce the number of votes otherwise received by
the nominee. Ratification of the auditors requires that the number of votes cast
for ratification exceed those cast against ratification. Abstentions and broker
non-votes will have no effect on this vote.
VOTING OF PROXIES
If the accompanying proxy is properly executed and returned, the shares
represented by the proxy will be voted at the Meeting as specified in the proxy.
If no instructions are specified, the shares represented by any properly
executed proxy will be voted for the two proposals discussed in the preceding
paragraph.
3
REVOCATION OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by a
shareholder at any time before it is exercised. A proxy may be revoked by a
writing, by a valid proxy bearing a later date delivered to the Company, or by
attending the Meeting and voting in person.
SOLICITATION OF PROXIES
The Company will bear the cost of this solicitation, including amounts
paid to banks, brokers and other record owners to reimburse them for their
expenses in forwarding solicitation material regarding the Meeting to beneficial
owners of the Common Stock. The solicitation will be by mail, with the material
being forwarded to the shareholders of record and certain other beneficial
owners of the Common Stock by the Company's officers and other regular employees
(at no additional compensation). Such officers and employees may also solicit
proxies from shareholders by personal contact, by telephone or by fax if
necessary in order to assure sufficient representation at the Meeting.
Mr. Robert Lobban, Chief Financial Officer, will receive and tabulate
proxies and act as inspector of election for the Meeting.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Meeting, two directors are to be elected to serve as follows: two
Class II directors for a three-year term expiring at the annual meeting in 2005;
and in each case until their successors are elected and qualified. The Board of
Directors currently consists of six members.
The two persons designated by the Board of Directors as nominees for
election as directors at the Meeting are: Mr. Zaid Siddig and Mr. Steven
Phillips.
Unless a contrary direction is indicated, it is intended that proxies
received will be voted for the election of the two nominees as directors. In the
event any nominee for director declines or is unable to serve, the proxies may
be voted for a substitute nominee selected by the Board of Directors. The Board
expects that each nominee named in the following table will be available for
election.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES
Information about the nominees is set forth immediately below.
NOMINEES FOR CLASS II DIRECTORS FOR THREE-YEAR TERM ENDING IN 2005
POSITION WITH COMPANY YEAR FIRST ELECTED
NAME OF NOMINEE OR PRINCIPAL OCCUPATION A DIRECTOR
---------------------- ------------------------- --------------------
Zaid Siddig Director
Steven Phillips Director 1995
Mr. Siddig, 64, is a nominee for the position of director being vacated by
Mr. Amin-Arsala who has resigned to assume his new position as the
Vice-President of Afghanistan. Mr. Siddig was one of the founding partners and a
director of Spectran Corporation from its founding in 1981 until 1991. He has
been a private investor since that time. Mr. Siddig holds a masters degree in
Geology from the Geology Technological University of Berlin, Germany. Mr. Siddig
previously served as a director of the Company from February 1994 through
December 1997. He has also previously served as a director of ALT (now DCI),
which is now a subsidiary of the Company.
4
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information with respect to each
person who was an executive officer, director, or nominee for director of the
Company as of December 31, 2001.
NAME AGE POSITION
- ----------------- ----- --------------------------------------------------
Mohd A. Aslami 55 Chairman of the Board of Directors, President and
Chief Executive Officer
Charles De Luca 64 Director, Secretary and Member of the Management
Board of FCJ
Robert P. Lobban 47 Chief Financial Officer and Treasurer
Steven Phillips 56 Director and Consultant
Hedayat Amin-Arsala 60 Director
Javad K. Hassan 61 Director
Michael A. Robinson 36 Director
Dr. Aslami is a co-founder, Chairman of the Board of Directors and Chief
Executive Officer of the Company. Dr. Aslami has served as Chairman and Chief
Executive Officer of FiberCore Jena, the Company's wholly owned subsidiary in
Germany, since 1994. Dr. Aslami also co-founded ALT in 1986, and served as its
President, Chief Executive Officer and director from 1986 to 1994. Dr. Aslami
received a Ph.D. in chemical engineering from the University of Cincinnati in
1974.
Mr. De Luca is a member of the Management Board of FCJ and is a
co-founder and director of the Company. Mr. De Luca also co-founded and
became an Executive Vice President and director of ALT in 1986. Mr. De Luca
received his MBA in marketing and business management from St. Johns
University in 1974.
Mr. Lobban joined FiberCore in April of 2001 as the Vice President of
Finance and was named Chief Financial Officer and Treasurer July 27, 2001. Prior
to joining the Company, Mr. Lobban was the Chief Financial Officer of a publicly
held manufacturing company in Phoenix, Arizona. He has 25 years experience as a
senior financial executive and spent nine years as management consultant to
several Fortune 500 companies. Mr. Lobban holds a Bachelor of Science Degree in
Industrial Engineering from Northeastern University and a Masters in Business
Administration from the Harvard Graduate School of Business.
Mr. Phillips became interim Chief Financial Officer and Treasurer of the
Company in August 2000 and continued in that role until July 26, 2001. Mr.
Phillips served as a financial consultant to the Company for many years prior to
assuming the role of interim Chief Financial Officer and has resumed the role of
financial consultant as of July 27, 2001. He became a director of the Company in
May 1995 and became a director of ALT in May 1989. He also served as interim
Chief Financial Officer for a start-up internet company and as Chief Financial
Officer of the Winstar Government Securities Company L.P., a registered U.S.
Government securities dealer which he co-founded. Since August 1987, Mr.
Phillips has served as a director, Secretary and Chief Financial Officer of
James Money Management, Inc. a private investment company.
Mr. Amin-Arsala has held various senior positions with the World Bank for
18 years. He was in charge of World Bank operations in countries of East and
South Asia, retiring in 1987. He served as the Minister of Finance for the
Afghan Interim Government from 1989 to 1992, and Minister of Foreign Affairs for
Afghanistan from 1993 to 1996. Since 1996, Mr. Amin-Arsala has acted in an
advisory capacity to the United Nations and the United States Agency for
International Development and has served on a number of governmental and
non-governmental humanitarian organizations. Mr. Amin-Arsala was the Minister of
Finance and Deputy Chairman of the Afghan Interim Government. He has recently
assumed the position of Vice-President of Afghanistan and resigned his position
as a director of the Company.
5
Mr. Javad K. Hassan joined AMP Incorporated (now Tyco) in 1988 as Vice
President of Technology and in 1993 was appointed Corporate Vice President,
Strategic Businesses, later renamed Global Interconnect Systems Business
("GISB"), where he pioneered and deployed a strategy to take Tyco from a
connector company to a global interconnection systems and solutions
organization. He was named President of GISB in 1993. After retiring from Tyco
in 1998, Mr. Hassan founded and is Chairman and CEO of NeST (Network Systems and
Technologies), a provider of software systems and electronics design and
manufacturing with over 2000 employees. He is Chairman of AM Communications, a
public company providing broadband network monitoring and management systems to
cable TV operators, and General Partner to MESA (Middle East and Southeast Asia)
Venture Capital Fund for targeted investments in US-based technology companies.
He is a member of the board of several companies and currently serves as
Chairman of the Electronic Development Commission for the Government of Kerala
in India. Mr. Hassan's membership on the Board of Directors of FiberCore, Inc.
is not pursuant to any agreement with Tyco. Mr. Hassan received a B.S.M.E.
degree from Kerala University in 1962, a Masters of Materials Science degree
from the University of Bridgeport, Connecticut in 1968 and was elected an IEEE
Fellow, Institute of Electrical and Electronics Engineers in 1986.
Mr. Michael A. Robinson became a director of the Company in October 2000.
Mr. Robinson is Senior Vice President and Corporate Treasurer of Tyco
International Ltd., a global, diversified manufacturing and service company. Mr.
Robinson was appointed Treasurer of Tyco in March 1998. Prior to this
appointment, he was a Vice President in the Investment Banking Department at
Merrill Lynch, focusing on conglomerate and healthcare companies. Previously, he
held positions at Colgate-Palmolive and Bankers Trust Company. Mr. Robinson
holds a Bachelors Degree in Accounting, summa cum laude, from Florida A&M
University and a Masters of Business Administration Degree from the Graduate
School of Business at Harvard University.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held three (3) meetings during 2001. Mr.
Amin-Arsala attended one meeting, Mr. Hassan two meetings and all other
directors attended all three meetings.
COMMITTEES OF THE BOARD
In April 2000 the Board of Directors established both an Audit Committee
and Compensation Committee. The board members participating in each of the
committees are Michael A. Robinson, Hedayat Amin-Arsala and Javad K. Hassan. Mr.
Robinson is the Chairman of both committees. All members are considered outside
directors.
DIRECTORS' FEES
The Company maintains a compensation plan for outside directors (directors
who are not employees of the Company), wherein each outside director receives an
initial award of 10,000 non-qualified stock options and a fee of $10,000 per
year, payable quarterly, and $250 for each Board of Directors meeting or
Committee of the Board meeting attended. After the first year, outside directors
are awarded 5,000 stock options, which are exercisable one year from the grant
date.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Pursuant to Section 16(a) of the Securities Exchange Act of 1934 (the
"Exchange Act") and the rules thereunder, the Company's executive officers and
directors are required to file with the Securities and Exchange Commission and
the National Association of Securities Dealers, Inc. reports of ownership and
changes in ownership of Common Stock. Copies of such reports are required to be
furnished the Company. Based solely on review of the copies of such reports
furnished to the Company, or written representations that no other reports were
required, the Company believes that during the year ended December 31, 2001 all
of its executive officers and directors complied with the requirements of
Section 16(a), except that: Mr. Hedayat Amin-Arsala, a director of the Company,
did not timely file the report on Form 4 with respect to his acquisition of
5,000 options to purchase shares of the Company's common stock. Also, Mr. Javad
K. Hassan, a director of the Company, did not timely file the report on Form 4
with respect to his acquisition of 5,000 options to purchase shares of the
Company's common stock.
6
PROPOSAL 2: RATIFICATION OF THE SELECTION OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP to act as
independent accountants for the Company for the current fiscal year, and a
proposal to ratify this selection will be submitted to the Annual Meeting.
Deloitte & Touche LLP has acted as accountants for the Company since January
1997, and management believes it desirable and in the best interests of the
Company to continue the employment of that firm. Representatives of Deloitte &
Touche LLP will be present at the Annual Meeting. Such representatives will have
the opportunity to make a statement if they desire to do so, and are expected to
be available to respond to appropriate questions.
If the foregoing proposal is not approved by the holders of a majority of
the shares represented at the Annual Meeting and voting on the proposal, or if
prior to the 2002 Annual Meeting, Deloitte & Touche LLP shall decline to act or
otherwise become incapable of acting, or if its employment is otherwise
discontinued by the Board of Directors, then in any such case the Board of
Directors will appoint other independent accountants whose employment for any
period subsequent to the 2002 Annual Meeting will be subject to ratification by
the stockholders at the 2003 Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FOR 2002.
ADDITIONAL INFORMATION
SECURITY OWNERSHIP
The following table sets forth certain information regarding the ownership
of the Common Stock as of May 31, 2002, with respect to (i) each person known by
the Company to own beneficially more than 5% of the outstanding shares of Common
Stock, (ii) each executive officer named in the Executive Compensation Table,
(iii) each director of the Company and (iv) all the directors and executive
officers of the Company as a group. Unless otherwise indicated, each of the
shareholders has sole voting and investment power with respect to the shares
beneficially owned.
NAME AND ADDRESS(1) SHARES OWNED % OWNED
- --------------------------------------------------------------------- -------------- -----------
Mohd Aslami.......................................................... 9,560,594 (2), (10) 13.3
Charles De Luca...................................................... 6,269,914 (3), (10) 8.7
Steven Phillips...................................................... 3,127,853 (4), (10) 4.4
Hedayat Amin-Arsala.................................................. 2,317,607 (5) 3.2
Javad K. Hassan...................................................... 73,333 (6) .1
Michael A. Robinson.................................................. 0 (7) .0
Robert P. Lobban..................................................... 110,200 (8) .2
Tyco International Ltd............................................... 11,628,224 (9) 16.19
All directors and executive officers as a group (6 persons).......... 21,459,501 29.9%
- ------------------
(1) The addresses of the persons and entities named in this table are as
follows: Messrs. Aslami, De Luca, Phillips, Amin-Arsala, Lobban and
Hassan, c/o FiberCore, Inc., P.O. Box 180, 253 Worcester Road, Charlton,
MA 01507; Mr. Robinson and Tyco International Ltd., 9 West 57th Street,
New York, New York 10022.
(2) Includes 1,389,158 shares and warrants to purchase 323,082 shares held by
Dr. Aslami's wife and 1,587,569 shares held by the Ariana trust of which
Dr. Aslami's wife is the trustee and his children are beneficiaries. Also
includes 2,027,016 options and warrants to purchase shares of the Company
held directly by Dr. Aslami, which includes 100,000 stock options granted
on January 28, 2002.
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(3) Includes 2,646,772 shares and warrants to purchase 323,082 shares held by
Elizabeth De Luca, Mr. De Luca's wife. Also includes 756,242 options and
warrants to purchase shares of the Company held directly by Mr. De Luca,
which includes 25,000 stock options granted on January 28, 2002.
(4) Includes 1,691,826 options and warrants to purchase shares of the Company,
which includes 34,000 stock options granted on January 28, 2002 and
1,243,712 options held by One Financial Group, Incorporated, a Company
controlled by Mr. Phillips.
(5) Includes 110,499 shares held by Mr. Amin-Arsala's wife and options to
acquire 18,667 shares held by Mr. Amin-Arsala, as outside director
compensation.
(6) Includes options to acquire 20,000 shares held by Mr. Hassan as outside
director compensation.
(7) Mr. Robinson, Senior Vice President and Corporate Treasurer of Tyco
International Ltd, was elected to the Company's Board of Directors on
October 12, 2000.
(8) Includes options to acquire 100,000 shares, which include 15,000 stock
options granted on January 28, 2002.
(9) Of the total, 10,275,849 shares are held by Tyco Electronics Corporation
and 1,352,375 shares are held by Tyco Sigma Limited. Both entities are
wholly owned subsidiaries of Tyco International Ltd., a company traded on
the New York Stock Exchange.
(10) Under the Guarantor Indemnification Agreement, Mohd Aslami, Steven
Phillips and Charles De Luca are subject to various restrictions with
regard to the sale of their common stock.
Mr. Zaid Siddig, a nominee for the position of Director, owns 350,000
shares of the common stock of the Company as of May 31, 2002.
ARRANGEMENTS WHICH COULD RESULT IN A CHANGE OF CONTROL
In December of 2000, the Company executed a loan agreement with Fleet
National Bank. The Company's repayment obligations under the loan agreement are
guaranteed (the "Guaranty") by TIGSA, a wholly owned subsidiary of Tyco
International Ltd., which owns approximately 19.5% of the Common Stock, which is
outstanding. In connection with the Guaranty, the Company issued to TIGSA one
share of the Company's Series A Preferred Stock entitling TIGSA to certain
rights and privileges. In the event the Company breaches certain covenants,
TIGSA's ownership of the share entitles TIGSA to elect a number of individuals
to the Registrant's board of directors sufficient to give TIGSA control of the
board until the termination of the agreement pursuant to which the Company must
indemnify TIGSA.
8
EXECUTIVE COMPENSATION AND OTHER MATTERS
Following is a summary of the compensation earned and/or paid to the
Company's Chief Executive Officer and its most highly compensated executive
officers for the last three years.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
- ------------------------------------------------------------------------------------- ---------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING
FISCAL SALARY BONUS OTHER ANNUAL AWARD(S) OPTIONS/SARS
NAME AND PRINCIPAL POSITION YEAR $ $ COMPENSATION $ (#)
- -------------------------------- -------- --------- -------- -------------- ------------ ------------
Dr. Mohd Aslami 2001 360,000 72,000 -- -- 250,000
Chairman, Chief Executive 2000 200,000 70,000 -- -- --
Officer & President 1999 133,334 -- -- -- 1,114,644
Charles De Luca 2001 135,000 20,000 -- -- 60,000
Managing Director, 2000 115,000 25,000 -- -- --
FiberCore Jena GmbH 1999 76,761 -- -- -- 515,296
Steven Phillips (*) interim Chief 2001 116,666 23,350 -- -- 66,000
Financial Officer & Treasurer 2000 83,333 21,000 -- -- --
Robert P. Lobban (***), Chief 2001 111,903 16,500 -- -- 85,000
Financial Officer and Treasurer
Michael J. Beecher (**) Chief 2000 67,083 -- -- -- --
Financial Officer & Treasurer 1999 86,250 -- -- -- 408,972
- ------------------
(*) For the five months commencing August 1, 2000 and for seven months ended
July 26, 2001. Options to purchase up to 5,000 shares of the Company's
common stock were granted to Mr. Phillips as a Director of the Company in
2001.
(**) For the seven months ended July 31, 2000.
(***) For the eight months commencing April 26, 2001. Mr. Lobban became Chief
Financial Officer and Treasurer on July 27, 2001.
Under an agreement dated October 1, 1998, in 1999 Dr. Aslami, Mr. De Luca
and Mr. Beecher accepted salary reductions of 33.3%, 33.3%, and 25.0%,
respectively and were awarded stock options for these salary reductions to
purchase shares of 739,644, 425,296, and 318,972, respectively. The option
exercise price is $0.1875 per share, which was the closing price on the OTC
Bulletin Board on the grant date.
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STOCK OPTION GRANTS
The following table lists the options granted to the executive officers
during the year ended December 31, 2001.
- ------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------------------------------------------
Name Number of % of Total Exercise Expiration Potential realized Potential
Securities Options/ or base Date values at assumed realized values
Underlying SARs Granted price annual rates of stock at assumed annual
Options/ to Employees ($/Share) price appreciation rates of stock
SARs in Fiscal Year for option term price
Granted 5%($) appreciation.
(#) for option term
10% ($)
- ------------------------------------------------------------------------------------------------------------------------
Dr. Mohd 250,000 40.0% $4.125 Feb. 21, 2011 $648,548 $1,643,547
Aslami
- ------------------------------------------------------------------------------------------------------------------------
Charles De 60,000 7.7% $4.125 Feb. 21, 2011 $155,651 $394,451
Luca
- ------------------------------------------------------------------------------------------------------------------------
Steven 61,000 7.8% $4.125 Feb. 21, 2011 $158,246 $401,025
Phillips 5,000 0.6% $5.98 July 27, 2011 $18,804 $47,653
- ------------------------------------------------------------------------------------------------------------------------
Robert P. 60,000 7.7% $4.24 Apr. 26, 2011 $159,991 $405,448
Lobban 25,000 3.2% $5.28 July 24, 2011 $83,014 $210,374
- ------------------------------------------------------------------------------------------------------------------------
10
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTIONS/SAR VALUES
The following table lists the options/SARs exercised during the year and
the options/SARs held by the executive officers that were unexercised at
December 31, 2001.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
SHARES OPTIONS/SARS VALUE OF UNEXERCISED
ACQUIRED AT FISCAL YEAR-END IN-THE-MONEY OPTIONS/SARS
ON EXERCISE VALUE REALIZED (#) AT FISCAL YEAR-END
NAME (#) $ EXERCISABLE/UNEXERCISABLE ($) EXERCISABLE/UNEXERCISABLE
- -------------------- ------------- ---------------- --------------------------- -------------------------------
Dr. Mohd Aslami 0 0 1,133,891/291,666 $1,763,080/$34,375
Charles De Luca 106,324 $389,412 445,022/70,000 $765,973/$8,250
Steven Phillips(*) 0 0 1,369,541/45,666 $2,930,570/0
Robert P. Lobban(**) 0 0 0/85,000 $0/$0
- ------------------
(*) Includes options exercised and held by One Financial Group Incorporated, a
company controlled by Mr. Phillips. Mr. Phillips was Interim Chief
Financial Officer until July 26, 2001. 5,000 of his un-exercisable shares
were granted for his services as an outside director.
(**) Robert P. Lobban became Chief Financial Officer and Treasurer on July 27,
2001.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Consulting
On August 1, 2000, Mr. Steven Phillips assumed the role of interim Chief
Financial Officer. He continued in that role through July 26, 2001, at which
time he resumed his role as a consultant to the Company. Prior to July 31, 2000
and subsequent to July 26, 2001, the Company had a consulting agreement with One
Financial Group Incorporated, ("OFG") a company controlled by Mr. Phillips who
is also a director of the Company. OFG provided services as a financial advisor
and for the period July 27 to December 31, 2001, the Company incurred costs of
$119,000 in connection with services rendered by OFG. During the period from
January 1 to July 31, 2000, the Company incurred costs of $116,000.
MATTERS RELATING TO THE AUDIT COMMITTEE
REPORT OF AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee ("Committee") consists of three outside directors who
are independent. The Board of Directors has determined that all members of the
Committee are financially literate and that at least one member of the Committee
has accounting or financial experience. The Committee operates under a Charter
adopted by the Board of Directors.
Management is responsible for the Company's internal controls and the
preparation of financial statements. The independent auditors are responsible
for performing an independent audit of the Company's consolidated financial
statements in accordance with auditing standards generally accepted in the
United States of America and issuing a report to the Company's Board of
Directors and to the Stockholders of the Company on the results of this audit.
It is the Committee's responsibility to monitor and oversee these activities.
11
The Committee has met and held discussions with management and Deloitte &
Touche LLP ("Deloitte"), the Company's independent auditors throughout the year.
The Committee discussed with Deloitte the results of Deloitte's examination of
the Company's consolidated financial statements for the year ended December 31,
2001, its evaluation of the Company's internal controls, and its assessment of
the overall quality of the Company's financial controls. Management has
represented to the Committee that the Company's consolidated financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America. The Committee reviewed and discussed
the consolidated financial statements with management and Deloitte. The
Committee also discussed matters with Deloitte related to the financial
reporting process, which are required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees), as amended.
Audit Fees: The aggregate fees billed by Deloitte & Touche LLP, the member
firms of Deloitte Touche Tohmatsu, and their respective affiliates
(collectively, "Deloitte") for professional services rendered for the audit of
the Company's annual financial statements for the fiscal year ended December 31,
2001 and for the reviews of the financial statements included in the Company's
Quarterly Reports on Form 10-Q for that fiscal year were approximately $351,000.
Financial Information Systems Design and Implementation Fees: There were
no fees billed by Deloitte for professional services rendered for information
technology services relating to financial information systems design and
implementation for the fiscal year ended December 31, 2001.
All Other Fees: The aggregate fees billed by Deloitte for services
rendered to the Company, other than the services described above under "Audit
Fees" and "Financial Information Systems Design and Implementation Fees," for
the fiscal year ended December 31, 2001 were approximately $252,000. These fees
were primarily related to tax services and registration statements.
Deloitte provided the Committee with the written disclosures and the
letter required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the Committee has met with Deloitte and
reviewed and discussed Deloitte's independence. The Audit Committee also
considered whether the provision of non-audit services is compatible with
maintaining the principal accountant's independence.
Based on the Committee's discussions with management and Deloitte, the
Committee's review of the representations of management, and the report of
Deloitte to the Committee, the Committee recommended that the Board of Directors
include the audited consolidated financial statements in the Company's Annual
Report on Form 10-K for the year ended December 31, 2001. The Committee also
recommended the retention of Deloitte as independent auditors of the Company for
fiscal year 2002.
The members of the Committee are Michael A. Robinson, the Committee's
Chairman, Hedayat Amin- Arsala and Javad K. Hassan.
The following report of the Board of Directors in the next section and the
performance graph below shall not be deemed to be "soliciting material" or to be
"filed" with the Securities and Exchange Commission (the "Commission") or
subject to Regulations 14A or 14C of the Commission or to the liabilities of
Section 18 of the Exchange Act and shall not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
notwithstanding any general incorporation by reference of this Proxy Statement
into any other document.
EXECUTIVE COMPENSATION
The Company has not, as yet, adopted a formal executive compensation
program, although it intends to adopt such program. It is expected that such
plan will reflect the following executive compensation philosophy and contain
the compensation components as described below. Such program may contain all or
some of the components and will be subject to change by the Board of Directors.
12
COMPENSATION PHILOSOPHY
The Company's mission is to be a significant provider of optical fiber and
optical fiber preforms in the markets it serves. To support this and other
strategic objectives as approved by the Board of Directors and to provide
adequate returns to shareholders, the Company must compete for, attract,
develop, motivate and retain top quality executive talent at the corporate
office and operating business units of the Company during periods of both
favorable and unfavorable world-wide business conditions.
The Company's executive compensation program is a critical management tool
in achieving this goal. "Pay for performance" is the underlying philosophy for
the Company's executive compensation program. The program is designed to link
executive pay to corporate performance, including share price, recognizing that
there is not always a direct and short-term correlation between executive
performance and share price. To align shareholder interests and executive
rewards, significant portions of each executive's compensation will represent
"at risk" pay opportunities related to accomplishment of specific business
goals.
The program will be designed and administered to:
o provide annual and longer term incentives that help focus each executive's
attention on approved corporate business goals the attainment of which, in
the judgment of the Board of Directors, should increase long-term
shareholder value;
o link "at risk" pay with appropriate measurable quantitative and
qualitative achievements against approved performance parameters;
o reward individual and team achievements that contribute to the attainment
of the Company's business goals; and
o provide a balance of total compensation opportunities, including salary,
bonus, and longer term cash and non-cash and equity incentives, that are
competitive with similarly situated companies and reflective of the
Company's performance.
In seeking to link executive pay to corporate performance, the Board
believes that the most appropriate measure of corporate performance is the
increase in long-term shareholder value, which involves improving such
fundamental quantitative performance measures as revenue, net income, cash flow,
operating margins, earnings per share and return on shareholders' equity. The
Board may also consider qualitative corporate and individual factors which it
believes bear on increasing the long-term value of the Company to its
shareholders. These include (i) the development of competitive advantages, (ii)
the ability to deal effectively with the complexity and globalization of the
Company's businesses, (iii) success in developing business strategies, managing
costs and improving the quality of the Company's products and services as well
as customer satisfaction, (iv) the general performance of individual job
responsibilities, and (v) the introduction of new products, new patents and
other innovations.
COMPONENTS OF EXECUTIVE COMPENSATION PROGRAM
The Company's executive compensation program will consist of (i) an annual
salary, (ii) an annual bonus, (iii) issuance of restricted stock, and (iv) a
long-term incentive represented by stock options. As explained below, restricted
stock and stock options serve to link executive pay to corporate performance,
since the attainment of these awards depends upon meeting the quantitative and,
if applicable, qualitative performance goals which serve to increase long-term
shareholder value.
Salary and Bonus. In December of each year, the Board will set the annual
salary for the following year of each executive officer not subject to an
employment contract, and establish a potential bonus opportunity that executives
(even those subject to employment contracts) may earn for each of the
quantitative and, if applicable, qualitative performance goals established by
the Committee. The Board intends to set these targets in the first half of each
year after a detailed review by the Board of the Company's annual operating
budget.
13
Stock Options and Restricted Stock. The longer-term component of the
Company's executive compensation program will consist of qualified and/or
non-qualified stock option and restricted stock grants. The options generally
permit the option holder to buy the number of shares of Common Stock covered by
the option (an "option exercise") at a price equal to or greater than
eighty-five percent (85%) of the market price of the stock at the time of grant.
Thus, the options generally gain value only to the extent the stock price
exceeds the option exercise price during the life of the option. Generally a
portion of the options vest over a period of time and expire no later than ten
years, and in many cases five years after grant. In addition, in appropriate
circumstances, the Company will award restricted stock to executives. Executives
will generally be subject to limitations in selling the restricted stock
immediately, and therefore will have the incentive to increase shareholder
value.
BASIS OF 2001 COMPENSATION
As indicated in the Company's executive compensation philosophy, a major
factor in the Board's compensation decisions is the competitive marketplace for
senior executives. In setting competitive compensation levels, the Company will
compare itself to a self-selected group of companies of comparable size (a peer
group), market capitalization, technological and marketing capabilities,
performance and global presence with which the Company competes for executives.
14
PERFORMANCE GRAPH
Set forth below is a graph comparing the yearly change in the Company's
cumulative total shareholder return on its Common Stock from January 14, 1997
(the effective date of the Company's initial registration under Section 12 of
the Exchange Act) to December 31, 2001 (as measured by dividing (i) the sum of
(A) the cumulative amount of dividends for the measurement period, assuming
dividend reinvestment, and (B) the excess of the Company's share price at the
end of the period over the price at the beginning of the measurement period, by
(ii) the share price at the beginning of the measurement period), with the
cumulative total shareholder return(1) so calculated of the Russell 2000 Index,
and a group of peer issuers in a line of business similar to the Company during
the same period (the "Peer Group(2)").
[GRAPHIC OMITTED]
TOTAL SHAREHOLDER RETURNS
FiberCore, Inc., Russell 2000 and Peer Group
COMPANY NAME / INDEX JAN-14-97 DEC-97 DEC-98 DEC-99 DEC-00 DEC-01
- -------------------------------------------------------------------------------
FIBERCORE INC 100 7.06 2.09 36.96 63.04 41.74
RUSSELL 2000 100 120.66 117.59 142.58 138.28 141.74
NEW PEER GROUP 100 144.79 367.34 539.65 172.11 53.87
(1) Cumulative total return assumes $100.00 invested at the close of trading
on January 14, 1997, in FiberCore, Inc., Russell 2000 Index and the Peer
Group and assumes reinvestment of dividends.
(2) The Peer Group consists of the following companies; Corning, Inc., Lucent
Technologies, Inc. and Optical Cable Corp each of which does substantial
business in the fiber optic sector.
LITIGATION
The Company is currently in litigation with Techman International Corp.
("Techman") and M. Mahmud Awan ("Awan") who controls Techman, relating to
certain investments, contracts and other claims. Both parties are seeking
approximately $500,000 in cash. In addition, the Company is suing Techman and
Awan for the return of shares that have been canceled by the Company because of
the failure of Techman and Awan to satisfy certain conditions related to their
issuance. The litigation is in the discovery and motion phase. The Company
believes that its claims against Techman and Awan are good and that it will
ultimately prevail on its claims, but given the uncertainties inherent in
litigation, the outcome cannot be predicted with any reasonable certainty at
this time.
Xtal is party to a 3-year take-or-pay contract expiring in June 2003, with
Shin Etsu for the delivery of single-mode preforms to Xtal. In 2001, Xtal
purchased approximately $10,900,000 of product under the contact. The contract
calls for monthly purchases of preform with 50% of the volume at a fixed price
and 50% to be set
15
quarterly based on market prices. There are provisions in the contract that
provide for exceptions for both parties regarding the requirements to ship or
purchase preforms. In the fourth quarter of 2001, Xtal elected not to take most
of the contracted volume under one of these provisions. Shin Etsu is contesting
Xtal's interpretation of the contract and has submitted a claim to arbitration
relative to this volume and additional volumes under a non-related agreement
which is not a take-or-pay agreement. The total amount in dispute is
approximately $4,400,000, with approximately $1,750,000 related to the
take-or-pay contract. Xtal and the Company have submitted their position to the
arbitration panel. However, if Xtal were to ultimately lose, Xtal could be
required to purchase the preforms in question as well as pay the costs of
arbitration. In that case, the legal costs of arbitration would negatively
impact the Company's operating results, but the costs of the material would
become part of inventory/cost of sales. This could potentially have a negative
operating impact as well, depending on the price of the preforms determined in
the arbitration ruling versus the market price of the preforms at the time of
the ruling. The parties have had settlement discussions during this period but
have not reached an agreement at this time. Xtal has continued to purchase
preforms from Shin Etsu under the contract since the fourth quarter of 2001.
In addition to the above, the Company is subject to various claims that
arise in the ordinary course of business. The Company believes such claims,
individually or in the aggregate, will not have a material adverse affect on the
business of the Company.
OTHER BUSINESS
As of the date of this Proxy Statement, the Board of Directors knows of no
business to be presented at the Meeting other than as set forth in this Proxy
Statement. If other matters properly come before the meeting, the persons named
as proxies will vote on such matters in their discretion.
SHAREHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING AND OTHER MATTERS
Any shareholder proposals intended to be presented at the Company's 2003
annual meeting of shareholders must be received by the Secretary, FiberCore,
Inc., no later than February 15, 2003 in order to be considered for inclusion in
the Company's proxy statement and form of proxy relating to such meeting.
Moreover, with regard to any proposal by a stockholder not seeking to have such
proposal included in the proxy statement but seeking to have such proposal
considered at the 2003 Annual Meeting, if such stockholder fails to notify the
Company of such proposal in the manner set forth above no later than April 30,
2003, then the persons appointed as proxies may exercise their discretionary
voting authority if the proposal is considered at the 2003 Annual Meeting
notwithstanding that stockholders have not been advised of the proposal in the
proxy statement for the 2003 Annual Meeting. Any proposals submitted by
stockholders must comply in all respects with (i) the rules and regulations of
the Securities and Exchange Commission, (ii) the provisions of the Company's
Certificate of Incorporation and Bylaws, and (iii) Nevada law.
The management of the Company is not aware of any matters other than those
set forth in this Proxy Statement, which will be presented for action at the
meeting. If any other matters should properly come before the meeting, the
persons authorized under management's proxies shall vote and act with respect
thereto according to their best judgment.
ANNUAL REPORT
The Company's 2001 Annual Report is concurrently being mailed to
shareholders. The Annual Report contains consolidated financial statements of
the Company and its subsidiaries and the report thereon of Deloitte & Touche
LLP, Independent Certified Public Accountants.
By Order of the Board of Directors
/s/ Charles De Luca
Charles De Luca
Secretary
16
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE,
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING
FORM OF PROXY IN THE ENCLOSED ENVELOPE.
17
PROXY
FIBERCORE, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints each of Mohd A. Aslami and Charles De Luca (with full
power to act without the other and each with full power to appoint his
substitute) as the undersigned's Proxies to vote all shares of Common Stock of
the undersigned in FiberCore, Inc. (the "Company"), a Nevada corporation, which
the undersigned would be entitled to vote at the Annual Meeting of Stockholders
of the Company to be held at the Ramada Inn, 624 Southbridge Street, Auburn,
Massachusetts 01501, on Friday, August 16, 2002, at 10:00 a.m., Eastern Daylight
Time or at any adjournments thereof as follows:
1. ELECTION OF DIRECTORS - Zaid Siddig, Steven Phillips
2. The ratification of selection of Deloitte & Touche LLP as the Company's
independent certified public accountants for 2002.
3. In their discretion, upon such other business as may properly come before
the meeting or any adjournments thereof.
Place "X" Only In One Box
1. Election of Nominees
For All Withhold All For All Except As Listed Below Exceptions:
[ ] [ ] ____________________________________________
2. Appointment of Accountants
For Against Abstain
[ ] [ ] [ ]
The shares of Common Stock represented by this Proxy, when properly executed,
will be voted in accordance with the foregoing instructions. In the absence of
any instructions, such shares will be voted FOR the election of the nominees
listed in item 1 and FOR the proposal in item 2.
The undersigned hereby revokes any Proxy or Proxies to vote shares of Common
Stock of the Company heretofore given by the undersigned.
Please date, sign exactly as name appears on this Proxy, and return in the
enclosed envelope. When signing as guardian, executor, administrator, attorney,
trustee, custodian, or in any similar capacity, please give full title. If a
corporation, sign in full corporate name by president or other authorized
officer, giving his/her title, and affix corporate seal. If a partnership, sign
in partnership name by authorized person. In the case of joint ownership, each
joint owner must sign.
Date ___________________________________________________________________________
Signature ______________________________________________________________________
Signature if held jointly ______________________________________________________