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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 ss.240.14a-11(c) or ss.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)
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:
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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
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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FIBERCORE, INC.
253 WORCESTER ROAD
P.O. BOX 180
CHARLTON, MASSACHUSETTS 01507
-----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 29, 1999
-----------------
The Annual Meeting of Shareholders of FiberCore, Inc. (the "Company") will
be held at the Ramada Inn, 624 Southbridge Street, Auburn, Massachusetts, 01501,
on Tuesday, June 29, 1999, at 10:00 A.M., Eastern Standard Time, for the
following purposes:
1. To elect four directors, to serve as follows: two Class I directors
for a two year term expiring at the annual meeting in 2001; two Class
II directors for a three year term expiring at the annual meeting in
2002;
2. To consider and take action on the ratification of the selection of
Deloitte & Touche LLP as the Company's independent certified public
accountants for 1999; 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 11, 1999 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 be 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 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
May 21, 1999
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 JUNE 29, 1999
-----------------
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 Tuesday, June 29, 1999, at
10:00 A.M., Eastern Standard Time, at the Ramada Inn, 624 Southbridge Street,
Auburn, Massachusetts, 01501, 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 May 21, 1999.
At the Meeting, shareholders will be asked to vote upon: (1) the
election of four directors (two Class I directors to serve for a two year term,
and two Class II directors to serve for a three year term; (2) the ratification
of the selection of independent certified public accountants for 1999; 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 11, 1999 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 36,373,007 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.
Directors are elected by a plurality of the votes cast. Shareholders
may not cumulate their votes. The four candidates receiving the highest number
of votes will be elected. In tabulating the votes, votes withheld in connection
with the election of one or more nominees and broker nonvoters will be
disregarded and will have no effect on the outcome of the vote.
The affirmative vote of the holders of a majority of the shares of the
Common Stock represented at the Meeting in person or by proxy and entitled to
vote thereat will be required to ratify the selection of the Company's
independent certified public accountants and to adopt any shareholder proposal
duly presented at the Meeting. In determining whether these proposals have
received the requisite number of affirmative votes, abstentions and broker
nonvoters will be disregarded and have no effect on the outcome of the 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 election of the nominees listed below under
"Election of Directors" and FOR the ratification of the selection of independent
certified public accountants.
1
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 telegraph if
necessary in order to assure sufficient representation at the Meeting.
Mr. Michael J. Beecher, Chief Financial Officer, will receive and
tabulate proxies and act as inspector of election for the Meeting.
1. ELECTION OF DIRECTORS
At the Meeting, four directors are to be elected to serve as follows:
two Class I directors for a two year term expiring at the annual meeting in
2001; two Class II directors for a three year term expiring at the annual
meeting in 2002; and in each case until their successors are elected and
qualified. The Board currently consists of five members.
The four persons designated by the Board of Directors as nominees for
election as directors at the Meeting are: Class I nominees, Mr. William T.
Hanley and Mr. Javad K. Hassan; and Class II nominees, Mr. Hedayat Amin-Arsala
and Mr. Steven Phillips.
Unless a contrary direction is indicated, it is intended that proxies
received will be voted for the election as directors of the four nominees. 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
2
Information about the nominees is set forth immediately below.
Name of Position with Company or Principal Year First Elected
Nominee Occupation a Director
- ------- ---------- ----------
Nominees for director for two year term ending in 2001
Mr. William T. Hanley Director 1999
Mr. Javad K. Hassan Nominee for Director 1999
Nominees for director for three year term ending in 2002
Mr. Hedayat Amin-Arsala Director 1999
Steven Phillips Director 1995
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 April 30, 1999.
Name Age Position
---- --- --------
Mohd A. Aslami 52 Chairman of the Board of Directors,
President, Chief Executive Officer, and
Chief Technology Officer of the Company and
Director and Managing Director of FiberCore
Jena GmbH ("FCJ"), the Company's wholly
owned subsidiary
Charles De Luca 61 Executive Vice President, Secretary and
Director of the Company and General Manager
of the Company's Automated Light
Technology, Inc. ("ALT") subsidiary
Michael J. Beecher 54 Chief Financial Officer and Treasurer of
the Company, and Vice President of FCJ
Hans F.W. Moeller 69 Managing Director of FCJ
Steven Phillips 54 Director
Hedayat Amin-Arsala 57 Director
William T. Hanley 52 Director
Javad K. Hassan 58 Nominee for Director
3
Dr. Aslami is a co-founder, Chairman of the Board of Directors,
President, Chief Executive Officer and Chief Technology Officer of the Company.
Dr. Aslami is also a Director and Managing Director of FiberCore Jena, the
Company's wholly-owned subsidiary in Germany. Dr. Aslami also holds the position
of Managing Director of the Company's joint venture, FiberCore Asia Sdn. Bhd. in
Malaysia since its formation in November, 1997. Dr. Aslami was a co-founder of
SpecTran Corporation and Executive Vice President of Manufacturing and
Engineering of SpecTran from 1981 to 1986. From 1980 to 1981 Dr. Aslami was
employed by Galileo Electro Optics Corporation as the Manager of Engineering and
Manufacturing of Communication Fiber. From 1974 to 1980, he served as Project
Manager of Manufacturing and Engineering at Corning Works, where he was
responsible for developing and improving the ODV process, including fiber
quality and cost reduction. In addition, he established a pilot plant for
communication-fiber production and assisted in the design of Corning's first
full-scale plant in the U.S. Dr. Aslami received a Ph.D. in chemical engineering
from the University of Cincinnati (1974) and his B.S in chemical engineering
from Purdue University in 1968. He is the author or co-author of several fiber
optic related patents in Corning, SpecTran, ALT and FiberCore, and author or
co-author of several publications and technical reports in the field of fiber
optics. Dr. Aslami is a member of the American Institute of Chemical Engineers,
and a Professional Engineer registered in the State of Ohio.
Mr. Charles DeLuca is a co-founder, Executive Vice President, Secretary
and Director of the Company. Mr. DeLuca is also a co-founder of FiberCore's ALT
subsidiary, where he serves as Director and General Manager. From 1981 to 1986,
Mr. DeLuca served as the co-founder, Director and Executive Vice President of
Sales and Marketing for both SpecTran and SoneTran, where he was responsible for
the development of sales of optical fiber in the telecommunications and data
communications markets. From 1980 to 1981, Mr. DeLuca was employed by Exxon
Optical Information Systems and from 1976 to 1980 by Galileo Electro Optics
Corporation in marketing management positions. Prior to his employment at
Galileo, he served as a senior marketing engineer with Bendix International. Mr.
DeLuca holds a B.S. in economics from Queens College, New York and an MBA in
management and marketing from St. John's University, New York. In addition, he
has co-published several articles in the fiber optics field.
Mr. Beecher became Chief Financial Officer of the Company in April
1996. In addition, as part of a reorganization of the management of the Company
in August, 1998, Mr. Beecher also holds the position of Vice President of the
Company's wholly owned subsidiary, FiberCore Jena GmbH in Germany. Mr. Beecher
was the Vice President of Administration and Finance, and Treasurer at the
University of Bridgeport from 1989 through 1995, and from 1978 to 1986 he was
Vice President of Perstorp, Inc., the U.S. subsidiary of a Swedish chemical,
plastics and building products company. Mr. Beecher is a Certified Public
Accountant and is a member of the American Institute of Certified Public
Accountants.
Mr. Moeller became Managing Director of FiberCore Jena in the fourth
quarter of 1995 on a part time basis. He served as a director of FiberCore
Incorporated from 1994 through March 1996. As part of a reorganization of the
Company, he resigned his position as a director and agreed to serve as a
director of the Company's wholly owned subsidiary FiberCore Jena GmbH. From 1993
to 1994, he served as Vice Chairman of Schott Corporation ("Schott"), a United
States subsidiary of Schott A.G., a corporation specializing in the production
of, among other things, optical glass. From 1989 to 1993, he served as President
of Schott. Mr. Moeller was a member of the Board of Directors of Schott from
1989 to 1994. During his career with Schott, Mr. Moeller was responsible for
establishing Schott in the United States and overseeing its growth from infancy
to nearly $1/2 billion in annual sales.
Mr. Phillips became a director of the Company in May 1995 and became a
director of ALT in 1989. Mr Phillips brings over 25 years of broad financial
experience that includes, capital raising, acquisitions, turnarounds, corporate
partnering, and start-ups. In addition to his consulting activities for the
Company, Mr. Phillips also serves as a director and financial adviser for
several entities through his company, One Financial Group Incorporated. Until
recently, Mr. Phillips served for five years as Chief Financial Officer of The
Winstar Government Securities Company L. P., a government securities dealer
which he co-founded that pioneered using the internet to trade odd-lot
government securities. 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 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 a number of governmental and
non-governmental humanitarian organizations.
Mr. Hanley has been affiliated with Galileo Corporation ("Galileo") of
Sturbridge, Massachusetts for over 16 years. He
4
joined Galileo in May 1982 as Vice President of Manufacturing. He became Vice
President of Manufacturing Operations in April 1983 and was named Executive Vice
President, Chief Operating Officer and a Director on January 1, 1984. He was
appointed President and Chief Executive officer on August 1, 1984 and served in
that position through November 17, 1998. Mr. Hanley is currently a consultant to
Galileo and a business consultant and a member of several Boards of Directors
and Advisory Boards for companies in Central Massachusetts. Mr. Hanley has a
B.S. degree in Glass Science from Alfred University, Alfred New York and
graduated with distinction from Corning Community College, Corning, New York.
Mr. Hassan began his professional career with IBM where he held various
positions including Corporate Director of Engineering and Technology. He joined
AMP, Incorporated in 1988 as Vice President Technology and in 1993 was appointed
Corporate Vice President, Strategic Businesses, later renamed Global
Interconnect Systems Business ("GISB") where he pioneered and deployed a new
strategy to take AMP from a connector company to a global interconnection
systems and solutions organization. He was named President of GISB in 1993.
During his career with AMP he built GISB from start up to $1.2 billion in sales
and led several strategic acquisitions. Since retiring from AMP in 1998, Mr.
Hassan pursued his entrepreneurial ambition of developing technology companies
focused in the convergence of voice, video and data communications. He 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 Eletronic
Development Commission for the Government of Kerala in India. 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 IEEE Fellow, Institute of Electrical and Electronics Engineers
in 1986.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held four (4) meetings during 1998. Each
director attended or participated in at least 75% of the aggregate of meetings
held and actions taken in 1998 by the Board of Directors.
COMMITTEES OF THE BOARD
The Board of Directors does not have an Audit Committee or a
Compensation Committee, although it intends to establish such committees in the
future. The functions of these committees currently are performed by the Board
of Directors as a whole.
AGREEMENT WITH AMP INCORPORATED
Under an agreement with AMP Incorporated, the Company has agreed to
restructure the Board of Directors wherein the number of Directors will be
increased to seven (7), three of whom shall be inside directors (Aslami, De Luca
and Moeller), one (1) of whom shall be an AMP designee, and three (3) shall be
outside directors. AMP has agreed to delay this restructuring and the Company
anticipates that this will occur prior to or concurrent with the Company's next
annual meeting.
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. No directors received
compensation as a director in 1998.
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT
Based solely on a review of the copies of Forms 3 and 4 and amendments
thereto, furnished to the Company pursuant to Section 16a-3(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") during the fiscal year
ended December 31, 1998, and Form 5 and amendments thereto, furnished to the
Company regarding such fiscal year, or written representations from the
Company's executive officers and directors, the Company is not aware of any
failure to file timely reports pursuant to Section 16(a) of the Exchange Act.
5
2. RATIFICATION OF THE SELECTION OF INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS
The Board of Directors has appointed Deloitte & Touche LLP, independent
certified public accountants, to audit the consolidated financial statements of
the Company and its subsidiaries for 1999. Deloitte & Touche LLP was initially
appointed to audit the Company's financial statements in January 1997 for the
fiscal year ended December 31, 1996.
The Company expects representatives of Deloitte & Touche LLP to attend
the Meeting, to be available to respond to appropriate questions from
shareholders, and to have the opportunity to make a statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO RATIFY THE
SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FOR 1999.
6
ADDITIONAL INFORMATION
PERFORMANCE GRAPH
Set forth below is a graph comparing the monthly 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, 1998 (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 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"1).
COMPARISONOF CUMULATIVE TOTAL RETURN(2)
FIBERCORE, INC. RUSSELL 2000, AND PEER GROUP
[GRAPHIC OMMITTED]
- -------------
1 The Peer Group consists of the following companies; Galileo Corporation,
Luxtec Corp., Optelecom, Inc., and SpecTran Corp.
2 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.
7
SECURITY OWNERSHIP
The following table sets forth certain information regarding the Common
Stock beneficially owned by (i) each person known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii)
each executive officer and director named in the summary compensation table
below and (iii) all the directors and executive officers of the Company as a
group, at the close of business on April 30, 1999. Unless otherwise indicated,
each of the persons named in the table below as beneficially owning the shares
set forth therein has sole voting power and sole investment power with respect
to such shares.
%
NAME AND ADDRESS(1) AMOUNT OWNED
- ------------------- ------ -----
Mohd Aslami.......................................... 7,945,489 (2), (10) 16.1
Charles De Luca...................................... 4,978,425 (3), (10) 10.1
Steven Phillips...................................... 1,736,202 (4) 3.5
Hans F. W. Moeller................................... 388,235 (5) 0.8
Michael J. Beecher................................... 253,991 (6) 0.5
Hedayat Amin-Arsala.................................. 2,358,424 (7) 4.8
William T. Hanley.................................... 10,000 (8) less than .1
Javad K. Hassan...................................... 0
AMP Incorporated..................................... 9,244,297 (9),(10) 18.7
All directors, director nominee and executive officers
as a group (8 persons)............................. 17,670,766 35.9%
- ------------------------------------
(1) The addresses of the persons and entities named in this table are as
follows: Messrs. Aslami, De Luca, Phillips, Moeller, Beecher, Amin-Arsala
Hanley and Hassan, c/o FiberCore, Inc., P. O. Box 180, 253 Worcester Road,
Charlton, MA 01507; AMP Incorporated, 470 Friendship Road, Harrisburg, PA
17105.
(2) Includes 117,482 shares and Warrants to purchase 115,220 shares held by
Dr. Aslami's wife, 1,009,188 shares held by Dr. Aslami's children,
1,587,569, 104,296 and 608,914 shares held respectively by the Ariana
Trust, Children's Trust, and the Kabul Foundation, trusts of which Dr.
Aslami's wife and/or Dr. Aslami are trustees and of which Dr. Aslami's
children are beneficiaries, and 284,860 shares held by the Raja
Foundation, a trust of which Dr . Aslami's wife and Mr. De Luca's wife are
trustees and of which various organizations and family members are
beneficiaries. Dr. Aslami disclaims beneficial ownership of all such
shares. Also includes 852,987 options and warrants to purchase shares of
the Company.
(3) Includes 1,395,096 shares and Warrants to purchase 115,220 shares held by
Elizabeth De Luca, Mr. De Luca's wife, 507,715 shares held by Mr. De
Luca's children, 458,914 shares held by the Dawn Foundation, a trust of
which Mrs. De Luca is trustee and of which Mr. De Luca's children are
beneficiaries, and 174,053 shares held by the Raja Foundation, a trust of
which Dr. Aslami's wife and Mr. De Luca's wife are trustees and of which
various organizations and family members are beneficiaries. Mr. De Luca
disclaims beneficial ownership of all shares. Also includes 448,200
options.
(4) Includes 908,799 options and Warrants issued to One Financial Group,
Incorporated, a Company controlled by Mr. Phillips and 13,750 Warrants and
10,000 options issued directly to Mr. Phillips.
(5) Includes 300,000 options.
(6) Includes 253,391 options.
(7) Includes 10,499 shares held by Mr. Amin-Arsala's wife, 1,328,393 shares
into which the note held by Mr. Amin-Arsala is convertible, Warrants to
purchase 249,074 shares and options to acquire 10,000 shares to be issued
to Mr. Amin-Arsala for his appointment as a director.
(8) Includes options to acquire 10,000 shares to be issued to Mr. Hanley for
his appointment as a director.
8
(9) Includes 3,419,977 shares into which the AMP Note is convertible at
$0.6641 per share and Warrants to purchase 2,765,487 shares.
(10) Under the AMP loan, the Company, Mohd A. Aslami, Charles De Luca, M.
Mahmud Awan (a former director) and AMP entered into a Voting Agreement
pursuant to which they agreed to vote together to elect a slate of
directors to the Board of Directors of the Company
EXECUTIVE COMPENSATION AND OTHER MATTERS
The following table sets forth, for the Company's last three fiscal
years, the cash salary, bonus and non-cash salary or bonuses earned or paid by
the Company, as well as certain other compensation paid or accrued for those
years, to the Company's President and Chief Executive Officer and to each of the
Company's executive officers whose compensation exceeded $100,000.
SUMMARY COMPENSATION TABLE
- ----------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION AWARDS
- ----------------------------------------------------------------------------------------------------------------------
RESTRICTED SECURITIES
NAME AND PRINCIPAL POSITION FISCAL SALARY BONUS OTHER ANNUAL STOCK UNDERLYING
YEAR $ $ COMPENSATION AWARD(S)$ OPTIONS/SARS(#)
- ----------------------------------------------------------------------------------------------------------------------
Dr. Mohd Aslami 1998 156,583 --- --- 184,911
Chairman, Chief Executive 1997 146,500 --- --- 359,752
Officer & President 1996 146,500 --- --- 60,913
- ----------------------------------------------------------------------------------------------------------------------
Charles De Luca 1998 97,116 --- --- 106,324
Executive Vice President 1997 98,398 --- --- 189,502
& Secretary 1996 98,398 --- --- 46,050
- ----------------------------------------------------------------------------------------------------------------------
Michael J. Beecher (1) 1998 100,000 --- --- ---
Chief Financial Officer 1997 85,000 --- --- 120,000
& Treasurer 1996 53,708 --- --- 64,248
- ----------------------------------------------------------------------------------------------------------------------
Hans Moeller 1998 120,000 --- --- ---
Managing Director, 1997 120,000 --- --- 300,000
FiberCore Jena GmbH 1996 98,596 --- --- 55,193
- ----------------------------------------------------------------------------------------------------------------------
(1) Started employment on April 15, 1996.
OTHER COMPENSATORY ARRANGEMENTS
The Company has a consulting agreement with Mr. Phillips, a director of
the Company, wherein Mr. Phillips provides services as a senior financial
advisor. Mr. Phillips receives a retainer of $60,000 per year payable in monthly
installments of $5,000, based on an hourly rate of $185 per hour. The retainer
is adjusted quarterly based on actual hours of service. The agreement is for one
year from January 1, 1998 and is automatically renewed for one year periods
unless terminated by written notice 90 days prior to the expiration of each
renewal period. For the year ended December 31, 1998, Mr. Phillips' fee was
$45,860.
9
STOCK OPTION GRANTS
The Board of Directors has, in the past, granted options to purchase
Common Stock to directors, officers and employees of the Company. Options may be
granted in lieu of cash salary, accrued salary, or as additional incentives. The
Company has no formal stock option plan. The Company may adopt a stock option or
similar plan in the future.
The following table sets forth selected option grant information for
the fiscal year ended December 31, 1998 awarded to the executive officers of the
Company. All of such options were deemed to be "non-qualified" options within
the meaning of the Internal Revenue Code of 1986, as amended (the "Code").
- ------------------------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- ------------------------------------------------------------------------------------------------------------------------------
NAME NUMBER OF % OF TOTAL EXERCISE EXPIRATION POTENTIAL POTENTIAL REALIZED
SECURITIES OPTIONS/ OR BASE DATE REALIZED VALUES VALUES AT ASSUMED
UNDERLYING SARS GRANTED PRICE AT ASSUMED ANNUAL RATES OF
OPTIONS/ TO EMPLOYEES ($/SHARE) ANNUAL RATES OF STOCK PRICE APPREC.
SARS IN FISCAL STOCK PRICE FOR OPTION TERM
GRANTED YEAR APPREC. FOR 10% ($)
(#) OPTION TERM
5%($)
- ------------------------------------------------------------------------------------------------------------------------------
Dr. Mohd Aslami (a) 184,911 27% $0.1875 Dec. 31, 2008 $ 1,473 $22,883
- ------------------------------------------------------------------------------------------------------------------------------
Charles De Luca (a) 106,324 15% $0.1875 Dec. 31, 2008 $ 847 $13,157
- ------------------------------------------------------------------------------------------------------------------------------
a. The market value per share at the date of grant was $0.12.
STOCK OPTION EXERCISES AND HOLDINGS
The following table sets forth information related to options exercised
during 1998 by the Company's President and Chief Executive Officer and by the
Company's other most highly compensated executive officers and the number and
value of options held at December 31, 1998 by such individuals.
- ---------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT
SHARES ACQUIRED VALUE OPTIONS/SARS AT FY-END (#) FY-END ($)
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------------------------------------------------------------------------------------------------------------
Dr. Mohd Aslami --- --- 420,665/184,911 (Note 1)
- ---------------------------------------------------------------------------------------------------------------------------
Charles De Luca --- --- 235,552/106,324 (Note 1)
- ---------------------------------------------------------------------------------------------------------------------------
Michael J. Beecher --- --- 134,248/40,000 (Note 1)
- ---------------------------------------------------------------------------------------------------------------------------
Hans Moeller --- --- 300,000/0 (Note 1)
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Note 1 - At December 31, 1998 the fair value was less than the exercise price.
10
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
DEALINGS WITH TECHMAN
Since 1995, the Company has maintained a working relationship with
Techman, a technology management company headquartered in Massachusetts since
1982. Dr. M. Mahmud Awan, the President and sole shareholder of Techman, is a
former director of the Company. Techman specializes in sales of fiber optic
products and telecommunication systems.
On November 1, 1995, the Company entered into an International
Distributor Agreement with Techman to market the Company's products worldwide.
Techman agreed to receive customary sales commissions in the form of Warrants
exercisable into 1,000,000 shares of Common Stock to be issued to Techman for
sales of the Company's products up to $200,000,000. Such shares will be issued
upon receipt of the proceeds of any such sales. The Agreement may be terminated
on 30 days notice and no commissions have been earned by Techman as of December
31, 1998.
Pursuant to the Techman Share Purchase Agreement dated January 11,
1996, Techman purchased 734,260 shares of Common Stock for $1,000,000
(approximately $1.36 per share) and was granted Warrants exercisable into
550,696 shares of Common Stock at $1.63 per share. Additionally, the Company
issued an additional 312,061 shares of Common Stock to Techman on (i) the
formation of FOI (a joint venture), in which the Company holds a 30% ownership
interest, and (ii) the completion of a supply agreement between FOI and the
Company. Under the agreement, $500,000 of the $1,000,000 share purchase price
was invested by Techman for the Company in FOI as an additional capital
contribution. FOI, a company incorporated in Islamabad under the laws of
Pakistan, was formed to manufacture optical fiber products in Pakistan. Due to a
delay in the construction of the manufacturing plant, in 1997 the supply
agreement was canceled and the 312,061 shares were canceled.
In April 1997, the Company borrowed $250,000 from Techman under a note
maturing in 2000. The annual interest rate on the note is the prime rate plus
1%, adjustable quarterly and payable quarterly. In conjunction with the note,
Techman was granted warrants to purchase 115,220 common shares of the Company at
an exercise price of $0.78 per share.
In September 1997, the Company borrowed $150,000 from Techman
International Corporation. The note bears interest at prime plus 1% per year and
matured on September 17, 1998. In conjunction with the note, Techman was granted
warrants to purchase 69,132 common shares of the Company at an exercise price of
$0.625 per share. The note was renewed in 1999 and matures on December 31, 1999.
The Company maintained a consulting agreement with Techman under which
Techman provided administration, marketing, technical and personnel advisory
services to the Company. The agreement has been terminated. For the years ended
December 31, 1997 and 1996, Techman was paid $54,000 and $36,000, respectively,
for such services.
DEALINGS WITH AMP
In April 1995, the Company issued a note to AMP, Incorporated ("AMP")
(the "AMP Note"). The AMP Note is a ten year $5,000,000 convertible note. AMP, a
company listed on the New York Stock Exchange, with worldwide sales in excess of
$5.7 billion in 1997, is a manufacturer of electrical and optical connection
devices, systems and other equipment including fiber optic cable. The AMP Note
is collateralized by the Company's patents, patent applications, licenses,
rights and royalties arising from such patents. The AMP Note is subject to
prepayment on demand in the event the Company is the issuer of securities to be
sold by the Company under an effective registration statement. On November 27,
1996 AMP converted $3,000,000 of principal plus $540,985 of accrued interest
into 3,058,833 shares of Common Stock of the Company. The remaining outstanding
principal plus accrued interest may be converted into Common Stock of the
Company at $0.66 per share, until maturity, April 17, 2005.
In July 1996, AMP entered into a five year supply contract (renewable
at AMP's option for an additional five year period) with the Company whereby AMP
has undertaken to purchase from the Company at least 50% of AMP's future glass
optical fiber needs. Under this contract, the Company sold fiber totaling
approximately $1,801,000 and $1,238,000 in 1998 and 1997, respectively, to an
AMP cabling contractor in Europe. The Company expects to begin supplying optical
fiber to AMP in the United States in 1999. On November 27, 1996, the Company
obtained an additional $3,000,000 loan at an interest rate of prime plus 1%,
from AMP to facilitate the funding of the expansion of the Jena Facility. In
exchange AMP received a 10 year note and
11
common stock purchase warrants exercisable until November 27, 2001. Under the
terms of the loan and warrant agreement, on November 27, 1998 the number of
warrants was increased to 2,765,487 and the warrant exercise price was adjusted
to $0.7232 per share. In connection with the new AMP loan and the expansion of
the Jena Facility, the Company was awarded a grant from the German Government of
approximately $2,700,000 and received a loan from Berliner Bank of approximately
$4,621,000. As part of the new $3,000,000 loan from AMP, Mohd A. Aslami, Charles
De Luca, M. Mahmud Awan (a former director of the Company) and AMP entered into
a Voting Agreement pursuant to which they agreed to vote together to elect a
slate of directors to the Board of Directors of the Company. AMP has waived the
implementation of this slate of directors. The Voting Agreement also requires a
classified and three year staggered Board of Directors. Such Voting Agreement
would remain in effect until the earlier of (i) termination of the new AMP loan
agreement, or (ii) an underwritten public offering by the Company which
generates at least $5,000,000.
LOANS
In March 1996, the Company borrowed $200,000 from Mr. Amin-Arsala under
a note maturing on April 1, 1997 with interest at 8.5%. The note was convertible
into common shares of the Company at $1.36 per share. In conjunction with the
note the lender received warrants to purchase 146,850 common shares of the
Company at $1.63 per share. The note was renewed in 1997. In 1998 the note was
again renewed with interest at the prime rate plus 1% and the conversion price
was reduced to $0.1875 per share. The number of warrants to purchase common
shares of the Company was increased to 249,074 and the purchase price was
reduced to $0.1875 per share.
On July 31, 1996, the Company borrowed $500,000 under two loan
agreements from the spouses of Dr. Aslami and Mr. De Luca. The loans are in the
amount of $250,000 each and bear interest at the prime rate plus one percent
(currently 9.25%), and are due on July 31, 1999. In conjunction with the loans
each lender received warrants to purchase 115,220 shares of Common Stock at the
rate of $1.81 per share. The warrants expire on July 31, 2001.
Also, in 1997, the Company borrowed $50,000 from Dr. Aslami. The
interest rate is prime plus 1% and the note matured on September 17, 1998. In
conjunction with the note the lender was issued warrants to purchase 62,500
common shares of the Company at an exercise price of $0.6875 per share. The note
was renewed in 1998.
In September and November 1997 the Company also borrowed $37,500 under
a note with interest at prime plus 1%. In conjunction with the notes the lender
was granted warrants to purchase 27,500 common shares of the Company at an
exercise price of $0.6875 per share. Mr. Steve Phillips, a director of the
Company, is a principal of the lender and received 13,750 of the 27,500 warrants
issued. The note was repaid in 1998.
CONSULTING
See "Other Compensatory Arrangements" above for a discussion of the
consulting arrangement between the Company and Mr. Phillips.
The following report of the Board of Directors in the next section
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.
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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.
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.
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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 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.
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 1998 COMPENSATION
In 1998, the Company's executive compensation was based on negotiations
with each individual, consistent with what the Board believes was reasonable
given the circumstances of the Company at that time. No bonuses were awarded for
the year 1998.
BASIS OF 1999 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.
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 2000 ANNUAL MEETING
Any shareholder proposals intended to be presented at the Company's
2000 annual meeting of shareholders must be received by the Secretary,
FiberCore, Inc., no later than January 14, 2000 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
14
to have such proposal included in the proxy statement but seeking to have such
proposal considered at the 2000 Annual Meeting, if such stockholder fails to
notify the Company in the manner set forth above of such proposal no later than
May 1, 2000, then the persons appointed as proxies may exercise their
discretionary voting authority if the proposal is considered at the 2000 Annual
Meeting notwithstanding that stockholders have not been advised of the proposal
in the proxy statement for the 2000 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.
ANNUAL REPORT
The Company's 1998 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
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Charles De Luca
Secretary
Dated: May 21, 1999
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.
15
PROXY
FIBERCORE, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints each of Mohd A. Aslami and Charles DeLuca (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 June 29, 1999, at 10:00 a.m. (local time) or at any
adjournments thereof as follows:
1. ELECTION OF DIRECTORS
Mr. William T. Hanley, Mr. Javad K. Hassan, Mr. Hedayat Amin-Arsala,
Mr. Steven Phillips
2. PROPOSAL TO RATIFY SELECTION OF DELOITTE & TOUCHE LLP AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR THE YEAR ENDING DECEMBER 31, 1999.
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 2. Appointment of Accountants
For All Withhold All For All Except As For Against Abstain
Listed Below
Exceptions:
[ ] [ ] ----------------- [ ] [ ] [ ]
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The shares of Common Stock represented by this Proxy 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.
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Date
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Signature
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Signature if held jointly