1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<Table>
[ ] 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 Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
</Table>
TERREMARK WORLDWIDE, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
2
(TERREMARK WORLDWIDE INC.)
September 19, 2001
Dear Stockholder:
You are cordially invited to attend our 2001 annual meeting of stockholders,
which will be held at 10:00 a.m. on Friday, October 19, 2001, at the Lyric
Theater, 819 N.W. 2nd Avenue, Miami, Florida 33136.
We have chosen the historic Lyric Theater as the venue for our Shareholders
meeting because it is in the heart of the Park West/Overtown Technology
Corridor, where the NAP of the Americas is located. We are pleased that our NAP
will play a pivotal role in the economic development now underway in this most
deserved area of downtown Miami.
At the annual meeting, you will be asked to:
- elect nine persons to the Board of Directors; and
- ratify the appointment of PricewaterhouseCoopers LLP as our independent
public accountants for the fiscal year ending March 31, 2002.
The accompanying Notice of Annual Meeting of Stockholders and Proxy Statement
describe in more detail the matters to be presented at the annual meeting.
The Board of Directors recommends that you vote in favor of the election of the
nominated directors and the ratification of the appointment of
PricewaterhouseCoopers LLP as our independent public accountants.
Please take this opportunity to become involved in the affairs of your company.
Whether or not you expect to be present at the meeting, please complete, date,
sign and mail the enclosed proxy card in the envelope provided. Returning the
proxy card does NOT deprive you of your right to attend the meeting and vote
your shares in person. If you attend the meeting, you may withdraw your proxy
and vote your own shares.
Sincerely,
/s/ Manuel D. Medina
Manuel D. Medina
Chairman of the Board &
Chief Executive Officer
2601 SOUTH BAYSHORE DRIVE MIAMI, FLORIDA 33133
3
TERREMARK WORLDWIDE, INC.
2601 SOUTH BAYSHORE DRIVE
MIAMI, FLORIDA 33133
-------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 19, 2001
To our Stockholders:
The 2001 annual meeting of stockholders of Terremark Worldwide, Inc. will
be held at 10:00 a.m., local time, on Friday, October 19, 2001, at The Lyric
Theater, 819 N.W. 2nd Avenue, Miami, Florida 33136, for the purpose of
considering and acting upon the following:
1. Election of nine members to our Board of Directors to hold office
until our 2002 annual meeting or until their successors are duly
elected and qualified;
2. Ratification of the appointment of PricewaterhouseCoopers LLP as
our independent public accountants for the fiscal year ending March
31, 2002; and
3. Any other matters that properly come before the meeting.
The Board of Directors is not aware of any other business scheduled for
the annual meeting. Any action may be taken on the foregoing proposals at the
annual meeting on the date specified above, or on any date or dates to which the
annual meeting may be adjourned.
Stockholders of record at the close of business on September 17, 2001 are
entitled to notice of, and to vote at, the meeting or at any postponements or
adjournments of the meeting.
By Order of the Board of Directors,
/s/ Robert D. Sichta
Robert D. Sichta
Assistant Secretary
Miami, Florida
September 19, 2001
YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY OR PROXIES, AS THE CASE MAY BE, AS SOON AS POSSIBLE IN THE
ENCLOSED POSTAGE PRE-PAID ENVELOPE.
4
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
About the Meeting........................................... 1
What is the purpose of the annual meeting?........... 1
Who is entitled to vote at the meeting?.............. 1
Who can attend the meeting?.......................... 1
What constitutes a quorum?........................... 1
How do I vote?....................................... 2
Can I change my vote after I return my proxy card?... 2
What are the board's recommendations?................ 2
What vote is required to approve each proposal?...... 2
Who pays for the preparation of the proxy?........... 3
Security Ownership of Certain Beneficial Owners and
Management................................................ 4
Proposal 1 - Election of Directors.......................... 6
Directors Standing for Election...................... 6
Board of Directors Committees............................... 9
Compensation of Executive Officers and Directors............ 11
Certain Related Party Transactions.......................... 14
Compensation Committee Report on Executive Compensation..... 15
Fees Paid to the Independent Accountants.................... 16
Proposal 2 - Ratification of the Appointment of Independent
Public Accountants........................................ 16
Performance Graph........................................... 17
Section 16(a) Beneficial Ownership Reporting Compliance..... 17
Other Business.............................................. 18
Stockholder Proposals for the 2002 Annual Meeting........... 18
APPENDICE
Appendix A - Terremark Worldwide, Inc. Audit Committee
Charter
</Table>
i
5
TERREMARK WORLDWIDE, INC.
2001 ANNUAL MEETING OF STOCKHOLDERS
-------------------------------------------------------
PROXY STATEMENT
-------------------------------------------------------
This proxy statement contains information related to our annual meeting of
stockholders to be held on Friday, October 19, 2001, beginning at 10:00 a.m.
local time, at The Lyric Theater, 819 N.W. 2nd Avenue, Miami, Florida 33136, and
at any adjournments or postponements thereof. The approximate date that this
proxy statement, the accompanying notice of annual meeting and the enclosed form
of proxy are first being sent to stockholders is September 19, 2001. You should
review this information in conjunction with our 2001 Annual Report to
stockholders which accompanies this proxy statement.
ABOUT THE MEETING
WHAT IS THE PURPOSE OF THE ANNUAL MEETING?
At the annual meeting, stockholders will vote on the election of directors
and ratification of the appointment of our independent public accountants. In
addition, we will report on our performance and respond to questions from our
stockholders.
WHO IS ENTITLED TO VOTE AT THE MEETING?
Only stockholders of record at the close of business on the record date,
September 17, 2001, are entitled to receive notice of the annual meeting and to
vote shares of our common stock that they held on that date at the meeting, or
any postponements or adjournments of the meeting. Each outstanding share of
common stock entitles its holder to cast one vote on each matter to be voted
upon.
WHO CAN ATTEND THE MEETING?
All stockholders as of the record date, or their duly appointed proxies,
may attend. If your shares are held in the name of your broker or bank, you will
need to bring evidence of your stock ownership, such as your most recent
brokerage statement, and valid picture identification.
WHAT CONSTITUTES A QUORUM?
The presence at the meeting, in person or by proxy, of the holders of a
majority of all of the shares of common stock outstanding on the record date
will constitute a quorum, permitting the meeting to conduct its business. As of
the record date, September 17, 2001, 199,222,179 shares of our common stock were
outstanding. Proxies received but marked as abstentions and broker non-votes
will be included in the calculation of the number of shares considered to be
present at the meeting but will not be counted as votes cast "for" or "against"
any given matter.
If less than a majority of outstanding shares entitled to vote are
represented at the meeting, a majority of the shares present at the meeting may
adjourn the meeting to another date, time or place, and notice need not be given
of the new date, time or place if the new date, time or place is announced at
the meeting before an adjournment is taken.
6
HOW DO I VOTE?
If you complete and properly sign the accompanying proxy card and return
it to us, it will be voted as you direct. If you are a registered stockholder
and you attend the meeting, you may deliver your completed proxy card in person.
"Street name" stockholders who wish to vote at the meeting will need to obtain a
proxy from the institution that holds their shares.
CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?
Yes. Even after you have submitted your proxy, you may change your vote at
any time before the proxy is exercised by filing with our Secretary either a
notice of revocation or a duly executed proxy bearing a later date. The powers
of the proxy holders will be suspended if you attend the meeting in person and
so request, although attendance at the meeting will not by itself revoke a
previously granted proxy.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions on your proxy card, the persons named
as proxy holders on the proxy card will vote in accordance with the
recommendations of our Board of Directors. The recommendation of the Board of
Directors is set forth with the description of each proposal in this proxy
statement. In summary, the Board of Directors recommends a vote:
- FOR the election of the nominated slate of directors; and
- FOR the ratification of the appointment of PricewaterhouseCoopers LLP
as our independent public accountants for the fiscal year ending March
31, 2002.
The Board of Directors does not know of any other matters that may be
brought before the meeting nor does it foresee or have reason to believe that
the proxy holders will have to vote for substitute or alternate Board of
Directors nominees. In the event that any other matter should properly come
before the meeting or any Board of Directors nominee is not available for
election, the proxy holders will vote as recommended by the Board of Directors
or, if no recommendation is given, in accordance with their best judgment.
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
ELECTION OF DIRECTORS. The affirmative vote, either in person or by
proxy, of a plurality of the votes cast at the meeting is required for the
election of directors. This means that candidates who receive the highest number
of votes are elected. Abstentions and broker non-votes are not votes cast and
are not counted in determining whether a nominee is elected. A properly executed
proxy marked "WITHHOLD AUTHORITY" with respect to the election of one or more
directors will not be voted with respect to the director or directors indicated,
although it will be counted for purposes of determining whether there is a
quorum. Stockholders do not have the right to cumulate their votes for
directors.
OTHER PROPOSALS. For each other proposal, the affirmative vote of a
majority of the votes cast at the meeting (either in person or by proxy) will be
required for approval. Abstentions and broker non-votes are treated as shares
present or represented and entitled to vote on such matters and thus have the
same effect as negative votes. A properly marked "ABSTAIN" with respect to any
such matter will not be voted, although it will be counted for purposes of
determining whether there is a quorum.
2
7
If you hold your shares in "street name" through a broker or other
nominee, your broker or nominee may not be permitted to exercise voting
discretion with respect to some of the matters to be acted upon. Thus, if you do
not give your broker or nominee specific instructions, your shares may not be
voted on those matters and will not be counted in determining the number of
shares necessary for approval. Shares represented by such "broker non-votes"
will, however, be counted in determining whether there is a quorum.
WHO PAYS FOR THE PREPARATION OF THE PROXY?
We will pay the cost of preparing, assembling and mailing the proxy
statement, notice of meeting and enclosed proxy card. In addition to the use of
mail, our employees may solicit proxies personally and by telephone. Our
employees will receive no compensation for soliciting proxies other than their
regular salaries. We may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to the beneficial owners
of our common stock and to request authority for the execution of proxies and we
may reimburse such persons for their expenses incurred in connection with these
activities.
Our principal executive offices are located at 2601 South Bayshore Drive,
Miami, Florida 33133, and our telephone number is (305) 856-3200. A list of
stockholders entitled to vote at the annual meeting will be available at our
offices for a period of ten days prior to the meeting and at the meeting itself
for examination by any stockholder.
3
8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows the amount of common stock beneficially owned as
of September 17, 2001, by (i) each of our directors, (ii) each of our executive
officers named in the Executive Compensation Table, (iii) all of our directors
and executive officers as a group and (iv) each person known by us to
beneficially own more than 5% of our outstanding common stock. Unless otherwise
provided, the address of each holder is c/o Terremark Worldwide, Inc., 2601
South Bayshore Drive, Miami, Florida 33133. As of September 17, 2001, there were
199,222,179 shares of our common stock outstanding.
<Table>
<Caption>
AMOUNT AND NATURE OF PERCENTAGE OF OUTSTANDING
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) COMMON SHARES OWNED
------------------------------------ ----------------------- -------------------------
Manuel D. Medina................................... 33,427,730(2) 16.68%
TCO Company Limited................................ 34,094,139(3) 17.11%
Vistagreen Holdings (Bahamas) Limited.............. 29,909,128(4) 15.01%
Paradise Stream (Bahamas) Limited.................. 25,000,000(5) 12.55%
Joseph R. Wright, Jr............................... 4,075,017(6) 2.01%
Michael Katz....................................... 3,105,830(7) 1.56%
Brian K. Goodkind.................................. 2,482,644(8) 1.25%
Miguel J. Rosenfeld................................ 1,547,522(9) *
Marvin S. Rosen.................................... 1,184,150(10) *
Guillermo Amore.................................... 1,254,807(11) *
William Biondi..................................... 563,651(12) *
Jose Maria Figueres-Olsen.......................... 34,000(13) *
Kenneth J. Starr................................... 67,000(14) *
Joel A. Schleicher................................. 77,000(15) *
Timothy Elwes...................................... 67,000(16) *
All directors and executive officers as a group
(12 persons)..................................... 47,865,277 23.08%
</Table>
---------------
* Represents less than 1%.
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from September 17, 2001 upon the
exercise of options or warrants. Each beneficial owner's percentage
ownership is determined by assuming that options and warrants that are held
by such person, but not those held by any other person, and that are
exercisable within 60 days from the applicable date, have been exercised.
(2) These include shares to which Mr. Medina has sole voting and investment
power. Includes 1,087,817 shares of common stock underlying convertible
debentures and 67,000 shares of common stock underlying stock options.
(3) TCO Company Limited, Charlotte House, Charlotte Street, P.O. Box N-65,
Nassau Bahamas. As reported in this holder's Schedule 13D, and any
amendments thereto, filed with the Securities Exchange Commission on June
18, 2001.
(4) Vistagreen Holdings (Bahamas) Limited, Charlotte House, Charlotte Street,
P.O. Box N-65, Nassau Bahamas, is the beneficial owner of 29,909,128 shares
of our common stock.
(5) Paradise Stream Holdings (Bahamas) Limited, Charlotte House, Charlotte
Street, P.O. Box N-65, Nassau Bahamas, is the beneficial owner of
25,000,000 shares of our common stock.
(6) Includes 323,373 shares of common stock underlying convertible debentures
and 3,267,000 shares of common stock underlying stock options.
(7) Includes 50,000 shares of common stock underlying stock options.
4
9
(8) Includes 80,843 shares of common stock underlying convertible debentures
and 100,000 shares of common stock underlying stock options.
(9) Includes 67,000 shares of common stock underlying stock options and
1,480,522 shares of common stock underlying convertible debentures which
are owned indirectly by Mr. Rosenfeld.
(10) Includes 305,810 shares of common stock underlying convertible debentures
and 67,000 shares of common stock underlying stock options.
(11) Includes 4,000 shares of common stock which are owned indirectly by Mr.
Amore. Includes 1,131,807 shares of common stock underlying convertible
debentures and 34,000 shares of common stock underlying stock options.
(12) Includes 50,000 shares of common stock underlying stock options.
(13) Includes 34,000 shares of common stock underlying stock options.
(14) Includes 67,000 shares of common stock underlying stock options.
(15) Includes 67,000 shares of common stock underlying stock options.
(16) Includes 67,000 shares of common stock underlying stock options.
5
10
PROPOSAL 1 - ELECTION OF DIRECTORS
DIRECTORS STANDING FOR ELECTION
At the annual meeting, the stockholders will elect nine directors, each of
whom will serve for a term expiring at the 2002 annual meeting of stockholders,
or until his successor has been duly elected and qualified.
The Board of Directors has no reason to believe that any nominee will
refuse or be unable to serve if elected. However, if any of them should become
unavailable to serve as a director, the Board of Directors may designate a
substitute nominee or the number of directors may be reduced in accordance with
our By-laws. If the Board of Directors designates a substitute nominee, the
persons named as proxies will vote for the substitute nominee designated by the
Board of Directors.
The directors standing for re-election are:
- MANUEL D. MEDINA has served as our Chairman of the Board, President and
Chief Executive Officer since April 28, 2000, the date of our merger,
and as that of Terremark since its founding in 1982. In addition, Mr.
Medina is a managing partner of Communications Investors Group, the
holder of the Series G Preferred Stock. Mr. Medina has been a director
of Fusion Telecommunications International since December 14, 1998.
Before founding Terremark, Mr. Medina, a certified public accountant,
worked with PricewaterhouseCoopers LLP. Subsequently, he established
and operated an independent financial and real estate consulting
company. Mr. Medina earned a Bachelors of Science degree in Accounting
from Florida Atlantic University in 1974.
- GUILLERMO AMORE has served as a member of our Board of Directors since
February 2001. From August 2000 to February 2001, Mr. Amore served as
the President and Chief Operating Officer of our wholly-owned
subsidiary, Terremark Latin America, Inc., prior to which, he served as
Chairman and Chief Executive Officer of Spectrum Telecommunications
Corporation until its acquisition. Mr. Amore has nearly 35 years of
telecommunications experience, much of it focused on the developing
markets of Latin America and the Caribbean. During his tenure at GTE
Corporation he built an extensive network of contacts in the region.
These contacts served him well in business development and regulatory
affairs during his stewardship of Grupo Isacell S.A. of Mexico and of
Spectrum Telecommunications. Mr. Amore holds an MBA from Harvard
University and a Bachelors degree in Science in Electrical Engineering
from Pontificia Universidad Javeriana, Colombia.
- TIMOTHY ELWES has served as a member of our Board of Directors since
April 2000. Mr. Elwes has also served as member of the Board of
Directors of Timothy Elwes & Partners Ltd., a financial services
company, from May 1978 until October 1994, the business of which was
merged into Fidux Trust Co. Ltd. in December 1995. Mr. Elwes is a
director of Fidux Trust Co. Ltd. He is also a non-executive director of
Partridge Fine Arts plc, a public company since 1989. He has served as
a director of Makecater Ltd., a property-developing company, since
1995. Since 1989 he has served as a director of Tagring Ltd., a
financial services company.
- JOSE MARIA FIGUERES-OLSEN has served as a member of our Board of
Directors since October 2000. Mr. Figueres-Olsen is the former
President of Costa Rica, serving as the
6
11
head of state of his native country from 1994 to 1998, during which he
made sustainable development the cornerstone of his administration and
led his country into the digital economy through the implementation of
several IT programs and the attraction of foreign investment including
Intel. Since leaving office, President Figueres-Olsen has served as a
Director of the Digital Nations Consortium, launched by the MIT Media
Lab to develop a new generation of technologies and applications that
enable people to design, create, and learn new ways to become more
active participants in developing societies. President Figueres-Olsen
also serves on the Board of Directors of the World Resources Institute,
the World Wildlife Fund, the Stockholm Environment Institute, and
Leadership in Environment and Development. President Figueres-Olsen
holds a degree in Industrial Engineering from the United States
Military Academy at West Point and a Masters degree in Public
Administration (Mason Fellow) from the John F. Kennedy School of
Government at Harvard University.
- MARVIN S. ROSEN has served as a member of our Board of Directors since
April 2000. Mr. Rosen is a co-founder of Fusion Telecommunications
International and has served as its Vice Chairman since December 1998.
From September 1995 through January 1997, Mr. Rosen served as the
Finance Chairman of the Democratic National Committee. Mr. Rosen
currently serves on the Board of Directors of the Children's Health
Fund (New York City), since 1994, the Robert F. Kennedy Memorial, since
1995, Bio-Medical Disposal, Inc., since 1998 and Fusion
Telecommunications International, Inc., since 1997, where he has also
been Vice-Chairman since December 1998. Mr. Rosen received his Bachelor
of Science degree in Commerce from the University of Virginia, his
LL.B. from Dickinson School of Law and his LL.M. in Corporations from
New York University Law School.
- MIGUEL J. ROSENFELD has served as a member of our Board of Directors
since April 2000. Since November 1991, he has also served as a Senior
Vice President of Delia Feallo Productions, Inc., where he has been
responsible for the development of soap opera productions in Latin
America. From January 1995 until May 1998, he was the Director of
Affiliates and Cable for Latin America for Protele, a division of
Televisa International LLC. From December 1984 until September 1998, he
was a sales manager for Capitalvision International Corporation. Mr.
Rosenfeld holds a Bachelors degree in Administration from the
University of Buenos Aires.
- JOEL A. SCHLEICHER has served as a member of our Board of Directors
since April 2000. Mr. Schleicher has been President and Chief Executive
Officer for Exp@nets since June 1998. Exp@nets is a leading nationwide
provider of networked communication solutions to business. His previous
communications industry experience started as the Chief Operating
Officer, President and director of Nextel Communications, Inc. from
1989 to 1995 and subsequently with ProCommunications, Inc. from 1996 to
1997. He has been a member of the Board of Directors of NovAtel, Inc.,
a global GPS provider, since 1997, Fusion Telecommunications, an
international long distance service provider, since 1998, and
TechTronic Industries, a Hong Kong based manufacturer of consumer
appliances, since 1998. Before Nextel, Mr. Schleicher spent 10 years in
the consumer durables and energy sectors of industry and four years
with KPMG Peat Marwick in various capacities. He is a graduate of the
Carlson School of the University of Minnesota.
- KENNETH I. STARR has served as a member of our Board of Directors since
April 2000. Mr. Starr has also served as the Chairman and Chief
Executive Officer of Starr &
7
12
Company, a New York City-based accounting and business management firm,
since he founded this firm in 1986.
- JOSEPH R. WRIGHT, JR. served as our Vice Chairman of the Board of
Directors from April 28, 2000 to August 2001. Prior to that, Mr. Wright
served as Chairman of the Board from May 1995 to April 2000. Mr. Wright
is currently Chief Executive Officer of PanAm Sat Corporation. Mr.
Wright served as Chairman of the Board of GRC International, Inc. a
United States public company that provides technical information
technology support to government and private entities from 1996 to
2000. He is also Co-Chairman of Baker & Taylor Holdings, Inc., an
international book and video distribution company, and Vice Chairman of
Jefferson Consulting Group, a Washington D.C. consulting firm. From
1989 to 1994, Mr. Wright served as Executive Vice President, Vice
Chairman and Director of W.R. Grace & Co., an international chemicals
and health care company, President of Grace Energy Corporation and
Chairman of Grace Environmental Company. From 1982 to 1989, Mr. Wright
held the positions of Director and Deputy Director of the Office of
Management and Budget, The White House, and was a member of President
Reagan's cabinet. Before 1982, he served as Deputy Secretary, United
States Department of Commerce, President of Citicorp Retail Services
and Retail Consumer Services, held posts in the United States
Department of Agriculture and the United States Department of Commerce,
and was Vice President and Partner of Booz Allen & Hamilton, a
management consulting firm. Mr. Wright also serves on the Boards of
Directors of Fusion Telecommunications International, Inc., Cereus
Technology Partners, RealMed Corporation and serves on the AT&T
Government Markets Advisory Board. He is a former member of the
President's Export Council and a former member of the Board of
Directors of Travelers, Harcourt Brace Janovich, and Hampton
University.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL
NOMINEES NAMED ABOVE.
8
13
BOARD OF DIRECTORS COMMITTEES
Our Board of Directors has a standing audit committee and compensation
committee. We do not have a nominating or similar committee. Our Board of
Directors performs the functions of a nominating or similar committee.
AUDIT COMMITTEE
The primary function of the audit committee is to assist the Board of
Directors in fulfilling its oversight responsibilities with respect to the
Company's financial matters. The Board of Directors has adopted and approved a
charter for the audit committee. Under the charter, which is attached as
Appendix A, the duties and responsibilities of the audit committee include:
- recommending to the board the appointment of our auditors and any
termination of engagement;
- reviewing the scope and results of audits and other services provided
by our auditors;
- reviewing our significant accounting policies and internal controls;
and
- having general responsibility for all related auditing matters.
For the fiscal year ended March 31, 2001, Timothy Elwes, Miguel J.
Rosenfeld and Joel A. Schleicher were the members of our audit committee. The
audit committee met four times during the fiscal year ended March 31, 2001. The
Board of Directors has determined that all members of the audit committee are
"Independent," as that term is defined by the American Stock Exchange's listing
standards.
Following is the report of the audit committee:
Under the guidance of a written charter adopted by the Board of
Directors, the Audit Committee is responsible for overseeing the company's
financial reporting process on behalf of the Board of Directors. A copy of
the charter is included in Appendix A to this proxy statement.
Management has the primary responsibility for the system of
internal controls and the financial reporting process. The independent
accountants have the responsibility to express an opinion on the financial
statements based on an audit conducted in accordance with generally
accepted auditing standards. The Audit Committee has the responsibility to
monitor and oversee these processes.
In fulfilling its responsibilities, the Audit Committee recommended
to the board the selection of the company's independent accountants,
PricewaterhouseCoopers LLP. That firm has discussed with the Committee and
provided written disclosures to the Committee on (1) that firm's
independence as required by the Independence Standards Board and (2) the
matters required to be communicated under generally accepted auditing
standards.
The Committee reviewed with the independent accountants the overall
scope and specific plans for their respective audits.
Without management present, the Committee met separately with the
independent accountants to review the results of their examinations, their
evaluation of the company's internal controls, and the overall quality of
the company's accounting and financial reporting.
9
14
The Committee reviewed and discussed with management and the
independent accountants the company's audited financial statements.
Following these actions, the Committee recommended to the Board of
Directors that the audited financial statements be included in the
company's Annual Report on Form 10-K for the fiscal year ended March 31,
2001 for filing with the Securities and Exchange Commission.
This report is submitted by the Audit Committee:
TIMOTHY ELWES
MIGUEL J. ROSENFELD
JOEL A. SCHLEICHER
COMPENSATION COMMITTEE
The functions of the compensation committee include:
- reviewing and approving the compensation of the directors, officers and
employees, including salaries, bonuses, commission and benefit plans;
and
- administering the Amended and Restated 1996 Stock Option Plan, the 2000
Stock Option Plan and the 2000 Directors Stock Option Plan.
For the fiscal year ended March 31, 2001, Timothy Elwes, Miguel J.
Rosenfeld and Kenneth I. Starr were the members of our compensation committee.
The compensation committee met two times during the fiscal year ended March 31,
2001.
10
15
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
EXECUTIVE COMPENSATION
The following tables present information concerning compensation for the
chief executive officer and our four most highly compensated executive officers
for services in all capacities during the fiscal years indicated.
<Table>
<Caption>
LONG TERM
COMPENSATION AWARDS
---------------------
NAME AND OTHER ANNUAL STOCK OPTIONS/
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) COMPENSATION AWARDS ($) SARS (#)
------------------ ---- ---------- --------- ------------ ---------- --------
Manuel D. Medina
Chairman of the Board, 2001 $350,000 -- -- -- 100,000
President and Chief 2000 $350,000 -- -- -- --
Executive Officer 1999 $350,000 -- -- -- --
Joseph R. Wright, Jr.
Vice Chairman of the 2001 $250,000 -- -- -- 100,000
Board and President of 2000 $285,000 -- $35,000(1) 87,500 --
TerreNAP Data Centers, 1999 $483,333 -- $35,000(1) -- 200,000
Inc.
Brian K. Goodkind
Chief Operating Officer 2001 $250,000 -- -- -- 300,000
and Executive Vice 2000 $250,000 -- -- -- --
President 1999 $250,000 -- -- -- --
Michael Katz
President of TerreNAP 2001 $250,000 -- -- -- 150,000
Services, Inc. 2000 $250,000 -- -- -- --
1999 $250,000 -- -- -- --
William Biondi
President of Terremark 2001 $250,000 -- -- -- 150,000
Realty, Inc. 2000 $250,000 -- -- -- --
1999 $250,000 -- -- -- --
</Table>
---------------
(1) During fiscal 1999 and 2000, we paid approximately $30,000 per year on
behalf of Mr. Wright for certain personal tax and accounting services
rendered by third parties for Mr. Wright.
11
16
OPTION/SAR GRANT TABLE
The following table sets forth information concerning grants of stock
options made during the fiscal year ended March 31, 2001 to each of our
executive officers named in the Executive Compensation Table. No stock
appreciation rights were granted during the fiscal year ended March 31, 2001.
<Table>
<Caption>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
------------------------------------------------------------ AT ASSUMED ANNUAL RATES
NUMBER OF % OF TOTAL OF STOCK PRICE APPRECIATION
SECURITIES OPTIONS GRANTED EXERCISE FOR OPTION TERM(1)
UNDERLYING OPTIONS TO EMPLOYEES IN PRICE EXPIRATION -----------------------------
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- ------------------ --------------- -------- ---------- ------------- -------------
Manuel D. Medina 100,000(2) 2.27% 3.1875 9/21/2010 147,064 367,211
Joseph R. Wright, Jr. 100,000(2) 2.27% 3.1875 9/21/2010 147,064 367,211
Brian K. Goodkind 150,000 3.70% 3.1875 4/28/2010 209,086 516,184
150,000 3.70% 1.5000 1/15/2011 229,904 579,288
William Biondi 150,000 3.70% 3.1875 4/28/2010 209,086 516,184
Michael Katz 150,000 3.70% 3.1875 4/28/2010 209,086 516,184
</Table>
---------------------
(1) These amounts are based on assumed appreciation rates of 5% and 10% set by
the Securities and Exchange Commission rules and are not intended to
forecast possible future appreciation, if any, of our stock price.
(2) These options were granted under our 2000 Directors Stock Option Plan.
OPTIONS EXERCISED IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information regarding option exercises by
our executive officers during the fiscal year 2001 and options held by such
executive officers on March 31, 2001:
<Table>
<Caption>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
Manuel D. Medina -0- -0- 67,000 33,000 -0- -0-
Joseph R. Wright, Jr. -0- -0- 3,267,000 33,000 4,625,000 -0-
Brian K. Goodkind -0- -0- 100,000 200,000 -0- 150,000
William Biondi -0- -0- 50,000 100,000 -0- -0-
Michael Katz -0- -0- 50,000 100,000 -0- -0-
</Table>
---------------------
(1) Based on a per share price of $2.50, the closing price of the common stock
as reported on the American Stock Exchange on March 30, 2001, minus the
exercise price of the option, multiplied by the number of shares underlying
the option.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As indicated above, the following directors served as members of the
compensation committee during the 2001 fiscal year: Timothy Elwes, Miguel J.
Rosenfeld and Kenneth I. Starr. None of the members of the compensation
committee was, at any time either during or before such fiscal year, an employee
of ours or any of our subsidiaries.
EMPLOYMENT AGREEMENTS
Manuel D. Medina has entered into a one year employment agreement,
commencing March 10, 2000, whereby he will be employed as our President and
Chairman of the Board. The
12
17
agreement automatically renews for successive one year terms until either party
gives written notice of its intention not to renew. The agreement provides for
an annual base salary of $350,000.
Brian K. Goodkind has entered into a one year employment agreement,
commencing March 10, 2000, whereby he will be employed as our Executive Vice
President and General Counsel. The agreement automatically renews for successive
one year terms until either party gives written notice of its intention not to
renew. In January 2001, Mr. Goodkind's title was changed to Executive Vice
President and Chief Operating Officer. The agreement provides for an annual base
salary of $250,000.
Except as set forth in employment agreements and stock option agreements
of some of our employees and our subsidiaries, we have no compensatory plans or
arrangements which relate to the resignation, retirement or any other
termination of an executive officer or key employee or a change in control, or a
change in such executive officer's or key employee's responsibilities following
a change in control.
DIRECTOR COMPENSATION
We maintain a policy of compensating our directors using stock option
grants. For their services as our directors for our fiscal year ended March 31,
2001, each of our directors received 100,000 stock options, including Clifford
J. Preminger who served as a director from April 28, 2000 to January 31, 2001.
We reimburse our directors for all out-of-pocket expenses incurred in the
performance of their duties as directors. We currently do not pay fees to our
directors for attendance at meetings.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Our certificate of incorporation and bylaws designate the relative duties
and responsibilities of our officers, establish procedures for actions by
directors and stockholders and other items. Our certificate of incorporation and
bylaws also contain indemnification provisions that permit us to indemnify our
officers and directors to the maximum extent provided by Delaware law.
DIRECTORS AND OFFICERS LIABILITY INSURANCE
We have obtained directors' and officers' liability insurance with an
aggregate liability for the policy year, inclusive of costs of defense, in the
amount of $25,000,000. This policy expires April 3, 2002.
EMPLOYEE STOCK OPTION PLANS
Under our 1995 Stock Option Plan, we have reserved for issuance an
aggregate of 500,000 shares of our common stock. As of August 31, 2001, we had
granted options to purchase 385,000 shares of common stock pursuant to this
plan, of which 267,500 have been exercised and 115,000 are vested but have not
been exercised.
Under our 1996 Stock Option Plan, we have reserved for issuance an
aggregate of 12,000,000 shares of common stock, 2,279,375 of which have been
granted and exercised. As of August 31, 2001, 7,650,250 granted options have
vested and remain unexercised and 198,250 have been granted but remain subject
to vesting schedules.
Under our 2000 Stock Option Plan, we have reserved for issuance an
aggregate of 5,000,000 shares of common stock. As of August 31, 2001, we had
granted options to purchase
13
18
2,852,763 shares of common stock pursuant to this plan, none of which have yet
vested and, therefore, have not been exercised.
Unless sooner terminated by the Board of Directors, the 1995 Stock Option
Plan, the 1996 Stock Option Plan and the 2000 Stock Option Plan will terminate
on February 8, 2005, May 7, 2006 and September 21, 2010 respectively, the tenth
anniversary date of the effectiveness of each such stock option plan.
CERTAIN RELATED PARTY TRANSACTIONS
Mr. Medina, our Chairman, President and Chief Executive Officer is a
member of the Board of Directors of Fusion and, through his interest in a
general partnership, owns approximately 695,500 shares of Fusion common stock,
along with options and warrants. There are also interlocking directors between
us and Fusion. The interlocking directors consist of Messrs. Medina, Rosen,
Schleicher and Wright.
Mr. Wright, who was the Vice Chairman of our Board of Directors and
President of our subsidiary, TerreNAP Data Centers, Inc., until August 2001, has
entered into an agreement with us which provides that he will act as a
consultant to us for $100,000 per year. We have agreed to re-employ Mr. Wright
at a base salary of $250,000 per year upon the termination of his current
employment with PanAm Sat Corporation.
Prior to the merger, some of our officers and directors owned partnership
interests in One Merrick Way and Galloway Medical Associates, Ltd., which owns
Alhambra Center and Galloway Medical Park, respectively. We provided management
services to both partnerships for a fee. These management fees totaled $35,000,
for the year ended March 31, 2001. During fiscal 2000, we also provided
management services to the Fortune House Condominium Association and recorded as
income $54,000 relating to services performed.
14
19
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following is the compensation committee's report on executive
compensation:
The policy of the Board of Directors is to maintain executive compensation
at competitive levels that will permit us to attract, motivate and retain
individuals with superior managerial abilities. The levels of compensation are
intended to reward individual initiative and achievement, while motivating our
executives to increase stockholder value by improving our performance and
profitability.
The compensation committee reviews the base salaries of our employees (as
well as our executive officers) annually, considering factors such as corporate
progress toward achieving objectives (without reference to any specific
performance-related targets) and individual performance experience and
expertise. In determining our employee's overall compensation, the compensation
committee also reviews certain compensation levels at other companies. These
other companies are not necessarily the same companies included in the peer
group index in the performance graph section of this Proxy Statement. This is
because the compensation committee believes that we compete for executive talent
with companies in addition to those in our peer group. Additional factors
reviewed by the compensation committee in determining appropriate compensation
levels include subjective factors related to corporate and individual
performance.
The compensation committee adopted a policy during the fiscal year ended
March 31, 1998, which places executive compensation under an annual review,
pursuant to which bonuses and additional option grants, as well as increases to
salary, will be based on performance goals as established by the committee and
the individual executives at the commencement of each year of employment.
Further, the committee places the majority of executive compensation in
"at-risk" categories, including stock options and performance bonuses. The
committee has adopted a policy by which options granted pursuant to our 1995,
1996 and 2000 Stock Option Plans will be issued with exercise prices set at the
fair market value of our common stock at the time of issue.
Manuel D. Medina has entered into a one year employment agreement,
commencing March 10, 2000, whereby he will be employed as President and Chairman
of the Board of Terremark Worldwide. The agreement automatically renews for
successive one year terms until either party gives written notice of its
intention not to renew. The agreement provides for an annual base salary of
$350,000.
This report is submitted by the compensation committee:
TIMOTHY ELWES
MIGUEL J. ROSENFELD
KENNETH I. STARR
15
20
FEES PAID TO THE INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP serves as our independent public accountants.
AUDIT FEES
We were billed $472,002, in aggregate, by PricewaterhouseCoopers LLP for
professional services rendered for the audit of our annual financial statements
for the fiscal year ended March 31, 2001 and the reviews of the financial
statements included in our filings on Forms 10-Q for that fiscal year.
ALL OTHER FEES
We were billed $563,209, in aggregate, by PricewaterhouseCoopers LLP for
all professional services, other than the audit and review services described
above, for the fiscal year ended March 31, 2001. PricewaterhouseCoopers LLP did
not provide any services related to financial information systems design and
implementation during the fiscal year ended March 31, 2001.
PROPOSAL 2 - RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of its Audit Committee, the Board of Directors has
appointed PricewaterhouseCoopers LLP as independent public accountants to
examine our consolidated financial statements for fiscal year ending March 31,
2002. We are asking you to ratify our selection.
Our financial statements for the year ended March 31, 2001 were audited by
PricewaterhouseCoopers LLP. One or more representatives of
PricewaterhouseCoopers LLP are expected to be present at the annual meeting and
will be afforded the opportunity to make a statement if they so desire and to
respond to appropriate stockholder questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO RATIFY THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS, LLP AS OUR INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FISCAL YEAR ENDING MARCH 31, 2002.
16
21
PERFORMANCE GRAPH
The following graph presents our total return to our stockholders for the
period March 31, 1997 to March 31, 2001. Our common stock is compared to the
Russell 2000 Index and a peer group. Due to the changed nature of our business
that resulted from the merger of AmTec, Inc. with Terremark Holdings, Inc., we
have adopted a new Peer Group Index of companies comprised of Exodus
Communications Inc., Data Return Corp., Digex Inc. and Globix Corp. The
companies in the Peer Group Index have been chosen due to their similar line of
business during the fiscal year ended March 31, 2001. The information contained
in this graph is not necessarily indicative of our future performance.
<Table>
<Caption>
TERREMARK WORLDWIDE, INC. RUSSELL 2000 PEER GROUP INDEX
------------------------- ------------ ----------------
1997 $100 $100 $100
1998 $ 25 $142 $ 98
1999 $ 30 $119 $154
2000 $ 84 $163 $250
2001 $ 52 $128 $ 21
</Table>
---------------------
* Assumes $100 invested at the close of trading on the last day preceding the
first day of the fiscal year in our common stock, the Russell 2000 Index and
the Peer Group Index.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than ten percent of a registered class
of our equity securities, to file reports of ownership and changes in ownership
with the SEC. Officers, directors and greater than ten percent shareholders are
required by SEC regulations to furnish us with copies of all Section 16(a) forms
they file.
Based solely on our review of the copies of the forms furnished to us and
written representations of the reporting persons, we believe that during the
fiscal year ended March 31, 2001 all Section 16(a) filing requirements
applicable to our officers, directors and greater than ten percent beneficial
owners were complied with, except: (i) Clifford J. Preminger filed a Form 3 on
February 12, 2001 which Form 3 should have been filed no later than May 10,
2000;
17
22
(ii) Vistagreen Holdings (Bahamas) Limited filed a Form 3 on April 16, 2001
which Form 3 should have been filed no later than May 10, 2000; (iii) Paradise
Stream (Bahamas) Limited filed a Form 4 on June 11, 2001 reporting the transfer
of an aggregate of 200,000 shares which Form 4 should have been filed no later
than February 10, 2001; (iv) Marvin S. Rosen filed a Form 4 on June 11, 2001
reporting the purchase of an aggregate of $75,000 of convertible debentures
during March 2001 which Form 4 should have been filed no later than April 10,
2001; and (v) Jose Maria Figures-Olsen filed a Form 3 on July 26, 2001 which
Form 3 should have been filed no later than November 10, 2000.
OTHER BUSINESS
We know of no other business to be brought before the annual meeting. If,
however, any other business should properly come before the annual meeting, the
persons named in the accompanying proxy will vote proxies as in their discretion
they may deem appropriate, unless they are directed by a proxy to do otherwise.
STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING
Any stockholder who intends to present a proposal at our 2002 annual
meeting of stockholders and who wishes to have their proposal included in our
Proxy Statement for that meeting, must deliver the proposal to our Assistant
Secretary in writing not later than May 17, 2002.
After the May 17, 2002 deadline, a stockholder may present a proposal at
our 2002 Annual Meeting of Stockholders if it is submitted to our Assistant
Secretary at the address below no later than August 4, 2002. If timely
submitted, the stockholder may present the proposal at the 2002 Annual Meeting
of Stockholders, but we are not obligated to present the matter in our proxy
materials.
A stockholder wishing to recommend a candidate for election to the Board
of Directors should send the recommendation and a description of the person's
qualifications to our Assistant Secretary at the address below. A stockholder
wishing to nominate a candidate for election to the Board of Directors is
required to give written notice to the Assistant Secretary of his or her
intention to make such a nomination. The notice of nomination must be received
by our Assistant Secretary at the address below no later than May 17, 2002. The
notice of nomination is required to contain certain information about both the
nominee and the stockholder making the nomination as set forth in our bylaws. A
nomination which does not comply with the above requirements will not be
considered.
Send all proposals or nominations to Robert D. Sichta, Assistant
Secretary, Terremark Worldwide, Inc., 2601 South Bayshore Drive, Suite 900,
Miami, Florida 33133.
18
23
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF
TERREMARK WORLDWIDE, INC.
I. PURPOSE
The Audit Committee shall provide assistance to the board of directors
(the "Board") of Terremark Worldwide, Inc. (the "Corporation") in fulfilling
their responsibility to the stockholders, potential stockholders, and investment
community relating to corporate accounting, reporting practices of the
Corporation, and the quality and integrity of the financial reports of the
Corporation. The Audit Committee's primary duties and responsibilities are to:
- Oversee that management has maintained the reliability and integrity of the
accounting policies and financial reporting and disclosure practices of the
Corporation.
- Oversee that management has established and maintained processes to assure
that an adequate system of internal control is functioning within the
Corporation.
- Oversee that management has established and maintained processes to assure
compliance by the Corporation with all applicable laws, regulations and
corporate policy.
The Audit Committee will fulfill these responsibilities primarily by
carrying out the activities enumerated in Section IV of this Charter.
II. COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, each of whom shall be independent directors, and free
from any relationship that, in the opinion of the Board, would interfere with
the exercise of his or her independent judgment as a member of the Audit
Committee. All members of the Audit Committee shall have a working familiarity
with basic finance and accounting practices, and at least one member of the
Audit Committee shall have accounting or related financial management expertise.
Audit Committee members may enhance their familiarity with finance and
accounting by participating in educational programs conducted by the Corporation
or an outside consultant.
The members of the Audit Committee shall be elected by the Board at the
annual organizational meeting of the Board or until their successors shall be
duly elected and qualified. Unless a chairperson is elected by the full Board,
the members of the Audit Committee may designate a chairperson by majority vote
of the full Audit Committee membership.
24
III. MEETINGS
The Audit Committee shall meet at least one time annually, or more
frequently as circumstances dictate. As part of its job to foster open
communication, the Audit Committee should meet at least annually with management
and the independent accountants separately to discuss any matters that the Audit
Committee or each of these groups believes should be discussed privately. In
addition, the Audit Committee or at least its chairperson should meet with the
independent accountants and management quarterly to review the Corporation's
financials consistent with Section IV.4 below.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
DOCUMENTS/REPORTS REVIEW
1. Review and reassess, at least annually, the adequacy of this Charter.
Make recommendations to the Board, as conditions dictate, to update this
Charter.
2. Review with management and the independent accountants the Corporation's
annual financial statements, including a discussion with the independent
accountants of the matters required to be discussed by Statement of
Auditing Standards No. 61, as amended from time to time ("SAS No. 61").
3. Review with management and the independent accountants the 10-Q prior to
its filing or prior to the release of earnings, including a discussion
with the independent accountants of the matters to be discussed by SAS
No. 61. The chairperson of the Audit Committee may represent the entire
Audit Committee for purposes of this review.
INDEPENDENT ACCOUNTANTS
4. Review the performance of the independent accountants and make
recommendations to the Board regarding the appointment or termination of
the independent accountants. The Audit Committee and the Board have the
ultimate authority and responsibility to select, evaluate and, where
appropriate, replace the outside auditor. The independent accountants are
ultimately accountable to the Audit Committee and the entire Board for
such accountants' audit of the financial statements of the Corporation.
On an annual basis, the Audit Committee should review and discuss with
the accountants all significant relationships the accountants have with
the Corporation to determine the accountants' independence.
5. Oversee independence of the accountants by:
- receiving from the accountants, on a periodic basis, a formal written
statement delineating all relationships between the accountants and the
Corporation consistent with Independence Standards Board Standard 1
("ISB No. 1");
- reviewing, and actively discussing with the Board, if necessary, and
the accountants, on a periodic basis, any disclosed relationships or
services between the accountants and the Corporation or any other
disclosed relationships or services that may impact the objectivity and
independence of the accountants; and
- recommending, if necessary, that the Board take certain action to
satisfy itself of the auditor's independence.
6. Based on the review and discussions referred to in section IV.2 and IV.5,
the Audit Committee shall determine whether to recommend to the Board
that the Corporation's
25
audited financial statements be included in the Corporation's Annual
Report on Form 10-K for the last fiscal year for filing with the
Securities and Exchange Commission.
FINANCIAL REPORTING PROCESS
7. In conjunction with the independent accountants, review the integrity of
the Corporation's financial reporting processes, both internal and
external.
8. Consider and approve, if appropriate, major changes to the Corporation's
accounting principles and practices proposed by management. Discuss with
independent accountants any significant changes to the auditing standards
or their scope.
9. Establish regular systems of reporting to the Audit Committee by each of
management, the independent accountants regarding any significant
judgments made in management's preparation of the financial statements
and any significant difficulties encountered during the course of the
review or audit, including any restrictions on the scope of the work or
access to required information.
10. Review any significant disagreement among management and the independent
accountants in connection with the preparation of the financial
statements.
LEGAL COMPLIANCE/GENERAL
11. Review with the Corporation's counsel, any legal matter that could have a
significant impact on the Corporation's financial statements.
12. Report through its chairperson to the Board following meetings of the
Audit Committee.
13. Maintain minutes or other records of meetings and activities of the Audit
Committee.
26
<Table>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL THE DIRECTOR NOMINEES LISTED IN Please mark
THIS PROPOSAL NO. 1. your votes as [X]
indicated in
this example
</Table>
1. Election of Directors.
<Table>
<Caption>
FOR all nominees WITHHOLD FOR AGAINST ABSTAIN
listed below AUTHORITY 2. Ratification of the appointment of [ ] [ ] [ ]
(except as marked to vote for all nominees PricewaterhouseCoopers, LLP as our
to the contrary) listed below independent public accountants.
[ ] [ ]
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND
PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED, NO
POSTAGE NECESSARY IF MAILED WITHIN THE UNITED STATES.
NOMINEES: 01 Manuel D. Medina, 02 Guillermo Amore, 03 Timothy Elwes, 04 Jose
Maria Figueres-Olsen, 05 Marvin S. Rosen, 06 Miguel Rosenfeld, 07 Joel A.
Schleicher, 08 Kenneth J. Starr, 09 Joseph R. Wright, Jr.
(Instruction: To withhold authority for an individual nominee, write that nominee's
name on the line provided below.)
----------------------------------------------------------------------------------- The undersigned hereby acknowledges
receipt of (i) the Notice of Annual
Meeting, (ii) the Proxy Statement,
and (iii) the Company's 2001 Annual
Report to Stockholders.
DATE
-------------------------------
SIGNATURE
--------------------------
SIGNATURE (if held jointly)
-----------------------------------
Note: Please sign exactly as your
name appears hereon and mail it
promptly even though you may plan
to attend the meeting. When shares
are held by joint tenants, both
should sign. When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title as such. If a
corporation, please sign in full
corporate name by president or
other authorized officer. If
partnership, please sign in the
partnership name by authorized
person.
</Table>
--------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 4PM EASTERN TIME
THE BUSINESS DAY PRIOR TO ANNUAL MEETING DAY.
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
<Table>
----------------------------------- ------------------------------------- ----------------------
INTERNET TELEPHONE MAIL
http://www.proxyvoting.com/tww 1-800-840-1208
Use the Internet to vote your Use any touch-tone telephone to Mark, sign and date
proxy. Have your proxy card in vote your proxy. Have your proxy your proxy card
hand when you access the web OR card in hand when you call. You will OR and
site. You will be prompted to enter be prompted to enter your control return it in the
your control number, located in number, located in the box below, enclosed postage-paid
the box below, to create and and then follow the directions given. envelope.
submit an electronic ballot.
----------------------------------- ------------------------------------- ----------------------
</Table>
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
27
TERREMARK WORLDWIDE, INC.
2601 S. BAYSHORE DRIVE
MIAMI, FLORIDA 33133
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
The undersigned holder of common stock of Terremark Worldwide, Inc., a
Delaware corporation (the "Company"), hereby appoints Jose E. Gonzalez and
Robert D. Sichta, and each of them, as proxies for the undersigned, each with
full power of substitution, for and in the name of the undersigned to act for
the undersigned and to vote, as designated on the reverse side of this proxy
card, all of the shares of stock of the Company that the undersigned is
entitled to vote at the Company's 2001 Annual Meeting of Stockholders, to be
held on Friday, October 19, 2001, at 10:00 a.m. at The Lyric Theater, 819 N.W.
2nd Avenue, Miami, Florida 33136, and at any adjournments or postponements
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF ALL DIRECTOR NOMINEES LISTED HEREIN, AND FOR THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS, LLP AS OUR
INDEPENDENT PUBLIC ACCOUNTANTS.
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
--------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --