-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C+rkCRuzDjvemlTgEid1Vr9sPk9X4HmYeJvvy9OV/rAEGY+dSY0L3Qu45qJgGOlY U3XgpZ527nm5nlKiLPt3LQ== 0001035704-01-500047.txt : 20010501 0001035704-01-500047.hdr.sgml : 20010501 ACCESSION NUMBER: 0001035704-01-500047 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010430 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNET COMMERCE & COMMUNICATIONS INC CENTRAL INDEX KEY: 0001003282 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 841322326 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: SEC FILE NUMBER: 000-28738 FILM NUMBER: 1616490 BUSINESS ADDRESS: STREET 1: 999 18TH STREET STREET 2: STE 2201 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036720700 MAIL ADDRESS: STREET 1: 999 18TH STREET STREET 2: STE 2201 CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: RMI NET INC DATE OF NAME CHANGE: 19990702 FORMER COMPANY: FORMER CONFORMED NAME: ROCKY MOUNTAIN INTERNET INC DATE OF NAME CHANGE: 19960508 10-K/A 1 d86618a1e10-ka.txt AMENDMENT NO. 1 TO FORM 10-K - FISCAL END 12/31/00 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A (AMENDMENT NO. 1) (Mark One) X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT - --- OF 1934 For the fiscal year ended December 31, 2000 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE - --- ACT OF 1934 For the transition period from _____________ to ____________ COMMISSION FILE NUMBER: 001-12063 --------- INTERNET COMMERCE & COMMUNICATIONS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 84-1322326 - -------------------------------------------------------------- ------------------------------------ (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 999 18th Street, Suite 2201, Denver, Colorado 80202 --------------------------------------------- ---------- (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 303-672-0700 ------------ Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of exchange on which registered ------------------- ------------------------------------ None. None. Securities registered pursuant to section 12(g) of the Act: Common Stock, par value $.001 per share - -------------------------------------------------------------------------------- (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 219.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant on March 23, 2001, based upon the closing price of the Common Stock on the Nasdaq National Market, was approximately $8,312,402. The number of outstanding shares of the registrant's Common Stock as of March 23, 2001 was approximately 29,935,189 shares. Explanatory Note: This Amendment No. 1 to Form 10-K is being filed in order to include information required by Part III (Items 10, 11, 12, and 13) of the previously filed Annual Report on Form 10-K for the year ended December 31, 2000. 2 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT Information concerning the Company's Directors is as follows: DOUGLAS H. HANSON Director since 1997 Mr. Hanson, 57, has served as Chief Executive Officer and Chairman of the Board of Directors of the Company since October 1997 and the President of the Company since January 2000. Mr. Hanson also served as the Company's President from October 1997 until January 1999. From 1987 to 1997, Mr. Hanson was the President, Chief Executive Officer, and a director of Qwest Communications, Inc., a Colorado-based telecommunications company, as well as founder of Qwest's predecessor, SP Telecom. Before founding SP Telecom, Mr. Hanson was Vice President of FiberTrak, a telecommunications joint venture among Santa Fe, Norfolk, and SP railroads. He also held various positions at Southern Pacific Transportation Co. Mr. Hanson currently serves as Chairman of the Board of Directors of the Competitive Telecommunications Association (CompTel), and as a Director on The Metropolitan State College Foundation Board and the Board of Trustees of the Salvation Army, Intermountain Division, and is engaged in other civic activities. ROBERT W. GRABOWSKI Director since 1998 Mr. Grabowski, 60, has been a director of the Company since January 1998. He has been the Vice President of Finance and Administration to Sunny Side, Inc./Temp Side, a private employment service, since 1988. He has been a certified public accountant since 1968 and holds a Bachelor of Science degree from De Paul University. D.D. HOCK Director since 1997 Mr. Hock, 66, has been a director of the Company since October 1997. Prior to becoming a director, Mr. Hock was an executive with Public Service Company of Colorado, including the President, Chief Executive Officer, and Chairman of the Board of Directors from February 1989 to July 1994, Chairman and Chief Executive Officer from July 1994 to January 1996, and Chairman from January 1996 to February 1997, when he retired. Mr. Hock currently serves on the Board of Directors of Hathaway Corporation, J.D. Edwards & Co., American Century Mutual Funds, Wagner Equipment Company, and Colorado Natural Gas, Inc. M. DOAK JACOWAY New Nominee Mr. Jacoway, 51, is a financial planning consultant specializing in investment and estate planning for business owners and corporate executives. He is president of Jacoway Financial Corporation, a company he formed in 1987. Mr. Jacoway currently serves as Chair-Elect of the Denver Metro Chamber of Commerce. He also serves on the Board of Directors of The Metropolitan State College of Denver Foundation, Inc., the Board of Trustees of the Denver Area Council Boy Scouts of America, and the Board of Directors of Colorado UpLIFT. Mr. Jacoway is engaged in many other civic activities. LEWIS H. SILVERBERG Director since 1998 Mr. Silverberg, 66, has been a director of the Company since January 1998. Mr. Silverberg has been a private investor and a business consultant since 1994, advising businesses on matters of formation, finance, mergers, and sales. He practiced law in San Diego, CA from 1959 to 1989. From 1989 to 1994 he was employed in an executive capacity to a subsidiary of a public company. MICHAEL T. VICTOR Director since 1999 (not standing for reelection) Mr. Victor, 39, is a Professor of Business at Gannon University, Dahlkemper School, teaching at the graduate and undergraduate level. Mr. Victor served as President of Pyramid Industries from 1993 to 1998 and as Chairman and CEO, from 1993 and 1991 respectively, until his sale of the company to Lanson & Sessions in September 2000. From 1986 to 1988, he was an Attorney in the Corporate Law Department of MacDonald, Illig, Jones & Britton. Mr. Victor is currently Chairman of the Victor Family Foundation. He also serves on the Board of Directors of the Erie Conference on Community Development, the President's Advisory Board at Gannon University, the Board of 1 3 Corporators to Hamot Medical Center and St. Vincent Health Center, the Board of Visitors of Mercyhurst College's D'Angelo School of the Arts, and the Council of Fellows at Pennsylvania State University's Behrend College. Mr. Victor is engaged in many other civic activities. Information concerning the Company's executive officers (other than Douglas H. Hanson, whose biography appears above) is as follows: SHAUNA CALLAHAN, 31, joined the Company in October 2000 as Controller. Ms. Callahan worked as Controller for Corporate Express Australia Limited from December 1996 to January 2000 and as Finance Manager for Coram Healthcare Corporation from May 1995 to December 1996. Prior to her position at Coram Healthcare Corporation, she worked in the audit division of Arthur Andersen, LLP in Denver, Colorado. Ms. Callahan received her Bachelor of Science in Business Administration from the University of Colorado in 1992. CHARLES EAZOR, 54, joined the Company through its November 2000 merger with Internet Communications Corporation and currently serves as Senior Vice President, Operations. Prior to the merger, Mr. Eazor served as Vice President/General Manager of Internet Communications Corporation from October 1998 to November 2000. From January 1992 through December 1997, Mr. Eazor was the head of the telecommunications division of General Analytics Corporation, a government systems integrator, where he was responsible for implementing the United Stated General Services Administration's national frame relay network and the Treasury's national local telecommunications initiative. In 1983, Mr. Eazor and his partners purchased the interconnect subsidiaries of Sprint and operated them as Southern Phone Corporation until acquired by AIM Telephones, Inc. in 1988, at which time Mr. Eazor served as Senior Vice President until 1992. From 1978 to 1983, Mr. Eazor served as Manager of Business Development for Sprint. Mr. Eazor currently serves as Vice President and as a member of the Board of Directors of NESCI, the association of distributors of NEC America telecommunications products in the United States and Canada. Mr. Eazor received his Master of Business Administration from the University of Baltimore. PAULA M. EAZOR, 41, joined the Company through its November 2000 merger with Internet Communications Corporation and currently serves as Sales Manager-Voice System Division. Ms. Eazor served as Senior Account Manager for the Central Office Division and Wide Area Network Divisions to Internet Communications from November 1998 to November 2000. From January 1998 to November 1998, Ms. Eazor was responsible for State and Federal Government Sales business development at Vision Communications. From January 1997 to January 1998, Ms. Eazor was Major Account Executive with GTE Customer Networks. From 1994 to 1996, Ms. Eazor served as Project Manager-VA Programs to United Communications and from 1992 to 1994 as Project Manager-Federal Government with General Analytics Corporation. CHRISTOPHER J. MELCHER, 42, joined the Company in January 1999 as Vice President-Law and Policy, General Counsel and Corporate Secretary until August 2000 when he began serving as Executive Vice President - Strategic Development, General Counsel, and Corporate Secretary. Previously, Mr. Melcher served as Assistant General Counsel for KN Energy, Inc. from September 1997 to December 1998, providing legal services on regulated and unregulated market activities and directing corporate strategy in federal and state proceedings across the company's 15-state territory. Prior to KN Energy, he was Senior Regulatory Counsel with Southern California Edison, a subsidiary of Edison International, Inc., from July 1996 to August 1997. Mr. Melcher represented corporate clients with the firm of Brownstein Hyatt & Farber, P.C. from January 1995 to July 1996. From March 1990 to December 1994, he served as Associate Independent Counsel with the Office of Independent Counsel in Washington, D.C. Mr. Melcher practiced law with the firm of Wilmer Cutler & Pickering from September 1987 to March 1990. Mr. Melcher received his Bachelor of Arts degree from Carleton College and his Juris Doctor degree from Yale Law School. E. STEPHEN SHRIVER, 41, joined the Company through its November 2000 merger with Internet Communications Corporation and currently serves as Senior Account Manager-Voice Systems. Mr. Shriver served as Senior Account Manager of Internet Communications Corporation from the time of its September 1996 merger with Interwest Communications Inc. until November 2000. Mr. Shriver served as a Senior Account Executive for Interwest Communications, Inc. from March 1992 to 1996 and held sales positions at two different Denver-based interconnect companies, Omega Business Communications, Inc. and Another Telephone Company, Inc, from 1982 to 1992. W. JEFF SWENSON, 47, joined the Company in January 2001 and currently serves as Executive Vice President and Chief Operating Officer. Previously, Mr. Swenson served as Vice President, International and Strategic Accounts for Global Crossing from August 2000 to December 2000. In this capacity, Mr. Swenson was responsible for development and implementation of Global Crossings carrier sales strategy for all International and Strategic Accounts. 2 4 Prior to this assignment, Mr. Swenson served Global Crossing as Vice President of Western Region Carrier Sales, responsible for revenue growth and receivables and expense management from December 1998 to August 2000. From April 1986 through November 1998, Mr. Swenson served as President of National Network Corporation. National Network Corporation was started by Mr. Swenson to serve as an underlying carrier for the long distance reseller market and continues to operate as such today. Prior to starting National Network Corporation, Mr. Swenson held the position of Director of Communications for Manville Corporation responsible for all voice and data communications worldwide. From March 1981 through December 1983, Mr. Swenson held several marketing and sales positions with Mountain Bell and AT&T. MEETINGS OF THE BOARD OF DIRECTORS During the year ended December 31, 2000, the Board of Directors held seven meetings. All directors attended all meetings of the Board of Directors and any committee on which the director served. BOARD COMMITTEES Audit Committee. The Audit Committee, among other things, recommends the firm to be appointed as independent accountants to audit the Company's financial statements, discusses the scope and results of the audit with the independent accountants, reviews with management and the independent accountants the Company's interim and year-end operating results, considers the adequacy of the internal accounting controls and audit procedures of the Company, and reviews the non-audit services to be performed by the independent accountants. The Audit Committee is comprised of three non-employee directors. The current members of the Audit Committee are Messrs. Grabowski, Hock, and Silverberg. Mr. Grabowski serves as Chairman of the Audit Committee. The Audit Committee met three times in 2000. Compensation Committee. The Compensation Committee reviews the salaries, benefits, and other compensation of our officers and key employees. The Compensation Committee's responsibilities include employment contracts, pensions, performance and incentive-based compensation, and stock option plans, including reviewing management's recommendations regarding issuance of stock options to officers and directors who are subject to stock ownership reporting obligations under Section 16 of the Securities Exchange Act of 1934, as amended. The Compensation Committee then makes recommendations to the Board of Directors based on its review. The current members of the Compensation Committee are Messrs. Hock, Grabowski, and Victor. Mr. Hock serves as Chairman of the Compensation Committee. The members of the Compensation Committee review and establish the salaries, benefits, and other compensation of all other employees. The Compensation Committee met two times in 2000. SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Based upon a review of filings with the Securities and Exchange Commission and written representations that no other reports were required, the Company believes that all of the Company's directors and executive officers complied during fiscal 2000 with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, with the exception of Ms. Vitale, who resigned as President in January 2000 and as a director in June 2000, and Messrs. Hanson and Grabowski. ITEM 11. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE. The following table sets forth the compensation paid during the periods indicated to the Chief Executive Officer and President of the Company, to each of the four other most highly-compensated executive officers of the Company, and to two additional individuals who resigned in 2000, but whose salary and bonus still placed them among the Company's four most highly compensated officers for the fiscal year ended December 31, 2000. 3 5
LONG TERM COMPENSATION ANNUAL COMPENSATION AWARDS ---------------------------------------------------------- ------------ SECURITIES NAME AND PRINCIPAL OTHER ANNUAL UNDERLYING POSITIONS YEAR SALARY BONUS COMPENSATION OPTIONS(8) - ---------------------------- ---- ----------- ---------- ------------ ------------ Douglas H. Hanson(1) 2000 $ 250,000 $ -- $ 2,100 300,000 Chairman, President, 1999 $ 180,654 $ 600,000 $ 1,945 -- and CEO 1998 $ 120,000 $ -- $ 537,946 -- Paula M. Eazor(2) 2000 $ 320,003 $ 10,527 $ 6,164 12,000 Sales Manager 1999 $ 76,866 $ 10,642 $ 1,492 -- Voice Systems Division 1998 $ 7,190 $ 6,667 $ -- 27 E. Stephen Shriver(3) 2000 $ 207,930 $ 11,602 $ 5,457 12,000 Senior Account Manager 1999 $ 173,220 $ 60,308 $ 4,309 -- Voice Systems 1998 $ 133,710 $ 34,053 $ 2,253 128 William H. Heuston(4) 2000 $ 137,270 $ 59,721 $ 3,150 30,000 Regional Vice President- 1999 $ 124,879 $ 10,000 $ 3,137 30,000 Rocky Mountain Region 1998 $ 116,037 $ 2,500 $ 2,787 15,000 Charles R. Eazor(5) 2000 $ 123,159 $ 36,000 $ 4,500 45,000 Senior Vice President, 1999 $ 127,309 $ -- $ 1,710 733 Operations 1998 $ 57,625 $ 15,000 $ -- 632 Thomas A. Stein(6) 2000 $ 153,405 $ 3,852 $ 1,979 -- Vice President 1999 $ 37,990 $ 10,217 $ 1,364 -- Network Systems Sales 1998 $ 38,259 $ -- $ 784 -- Chris J. Melcher(7) 2000 $ 145,385 $ -- $ 3,750 100,000 Executive Vice President, 1999 $ 114,667 $ -- $ -- 105,400 Strategic Development, 1998 $ -- $ -- $ -- 54,000 General Counsel
- ---------- (1) Mr. Hanson was granted options to purchase 300,000 shares of the Company's common stock in 2000 for services performed in 2000. Mr. Hanson's bonus of $600,000 was paid in full during fiscal year 1999 for services performed in 1999. In 1998, Mr. Hanson's "Other Annual Compensation" is comprised of $1,946 of 401(k) Plan matching funds and the $536,000 dollar value difference between the price paid by Mr. Hanson for securities of the Company and the fair market value of such securities on the date of purchase. (2) Ms. Eazor was granted options to purchase 12,000 shares of the Company's common stock in 2000 for services performed in 2000 and options to purchase 27 shares of the Company's common stock in 1998 for services performed in 1998. (3) Mr. Shriver was granted options to purchase 12,000 shares of the Company's common stock in 2000 for services performed in 2000 and options to purchase 128 shares of the Company's common stock in 1998 for services performed in 1998. (4) Mr. Heuston was granted options to purchase 30,000 shares of the Company's common stock in 2000 for services performed in 2000, options to purchase 30,000 shares of the Company's common stock in 1999 for services performed in 1999, and options to purchase 15,000 shares of the Company's common stock in 1998 for services performed in 1998. Mr. Heuston resigned in the fourth quarter of 2000. (5) Mr. Eazor was granted options to purchase 45,000 shares of the Company's common stock in 2000 for services performed in 2000, options to purchase 733 shares of the Company's common stock in 1999 for services performed in 1999, and options to purchase 632 shares of the Company's common stock in 1998 for services performed in 1998. (6) Mr. Stein resigned during the third quarter of 2000. (7) Mr. Melcher was granted options to purchase 100,000 shares of the Company's common stock in 2000 for services performed in 2000, options to purchase 105,400 shares of the Company's common stock in 1999 for services performed in 1999, and options to purchase 54,000 shares of the Company's common stock in 1998 pursuant to his Employment Letter Agreement. (8) Securities underlying options for Ms. Eazor, Mr. Shriver, Mr. Eazor, and Mr. Stein represent either: a) the number of equivalent shares of the Company's common stock that the individuals had the right to receive pursuant to the terms and conditions of the Amended and Restated Agreement and Plan of Merger, dated October 18, 2000, between Internet Communications Corporation and the Company; or b) a post-merger option grant made by the Company. The disclosure of securities underlying options granted for Ms. Eazor, 4 6 Mr. Shriver, Mr. Eazor, and Mr. Stein excludes grants made to these individuals during 2000, 1999, and 1998 by Internet Communications Corporation which were extinguished in the November 2000 merger between Internet Communications Corporation and the Company. STOCK OPTION GRANTS IN FISCAL YEAR 2000. The following table sets forth information with respect to grants of stock options to each of the Named Executive Officers during the year ended December 31, 2000. All grants were made under the Company's 2000 Employees' Stock Option Plan.
INDIVIDUAL GRANTS IN 2000 ------------------------------------------------------------ PERCENT OF POTENTIAL REALIZABLE VALUE AT NUMBER OF TOTAL ASSUMED ANNUAL RATE OF STOCK SECURITIES OPTIONS PRICE APPRECIATION FOR THE UNDERLYING GRANTED TO OPTION TERM OPTIONS EMPLOYEES IN EXERCISE GRANT EXPIRATION ----------------------------- NAME GRANTED(1) FISCAL YEAR PRICE DATE DATE(1) 5% 10% - ------------------ ----------- ------------ -------- -------- ---------- ----------- ------------ Douglas H. Hanson 300,000 14.98 $ 2.4063 8/3/00 8/2/05 $181,309.78 $400,647.20 Paula M. Eazor 12,000 0.60 $ 1.00 11/29/00 11/28/10 $ 7,546.74 $ 19,124.90 E. Stephen Shriver 12,000 0.60 $ 1.00 11/29/00 11/28/10 $ 7,546.74 $ 19,124.90 William H. Heuston 30,000 1.50 $ 2.1875 8/3/00 8/2/10 $ 41,271.21 $104,589.36 Charles R. Eazor 45,000 2.25 $ 1.00 11/29/00 11/28/10 $ 28,300.28 $ 71,718.39 Thomas A. Stein -- -- $ -- -- -- $ -- $ -- Chris J. Melcher 100,000 5.00 $ 2.1875 8/3/00 8/2/10 $137,570.70 $348,631.20
- ---------- (1) All option grants represent shares of common stock. With the exception of options granted to Mr. Hanson, all options have a ten-year term and become exercisable in three equal annual installments beginning one year after the date of grant. The options granted to Mr. Hanson have a five-year term and become exercisable in three equal annual installments beginning one year after the date of grant. The disclosure of options granted to Ms. Eazor, Mr. Shriver, Mr. Eazor, and Mr. Stein excludes grants made to these individuals during 2000, if any, by Internet Communications Corporation, all of which were extinguished in the November 2000 merger between Internet Communications Corporation and the Company. OPTION EXERCISES AND FISCAL YEAR-END VALUES. The following table sets forth information with respect to the Named Executive Officers concerning the exercise of options during the fiscal year ended December 31, 2000, and the number of securities underlying unexercised options and the of all unexercised in-the-money options held at year-end.
NUMBER OF SECURITIES VALUE OF UNEXERCISED UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS SHARES OPTIONS AT DECEMBER 31, 2000 AT DECEMBER 31, 2000 (2) ACQUIRED ON VALUE ---------------------------- ---------------------------- NAME EXERCISE REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ------------------ ----------- ------------ ------------ ------------- ----------- ------------- Douglas H. Hanson -- $ -- 166,385 -- $ -- $ -- Paula M. Eazor 27 $ 27.00 -- 12,000 $ -- $ -- E. Stephen Shriver 128 $ 128.00 -- 12,000 $ -- $ -- William H. Heuston -- $ -- 16,666 55,000 $ -- $ -- Charles R. Eazor 1,365 $ 1,365.00 -- 45,000 $ -- $ -- Thomas A. Stein -- $ -- -- -- $ -- $ -- Chris J. Melcher -- $ -- 71,133 188,267 $ -- $ --
- ---------- (1) The value realized represents the excess, if any, of the closing price of the common stock on the Nasdaq National Market on the date of exercise over the option exercise price. 5 7 (2) Represents the excess, if any, of the closing price of the common stock on the Nasdaq National Market at year-end ($0.375) over the option exercise price. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION None of the members of the Compensation Committee is or has been an employee of the Company. In addition, none of the Company's executive officers have ever served as a member of the Board of Directors or Compensation Committee of any other entity that has or has had one or more executive officers serving as a member of the Company's Board or Compensation Committee. COMPENSATION OF DIRECTORS BASE COMPENSATION. Each non-employee director receives an annual retainer based on a prorated rate of $12,000 per year. 1996 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN. Under the 1996 Non-Employee Directors' Stock Option Plan, each non-employee director receives an option to purchase 1,500 shares of common stock upon appointment or election to the Board of Directors. Thereafter, on the first, second, and third anniversary of appointment or election, each non-employee director is eligible to receive a grant of options to purchase an additional 1,500 shares of common stock, up to a maximum of 6,000 shares. Each option grant, vesting six months after the date of grant and having a five-year term, permits the holder to purchase shares at their fair market value on the date of grant. Although a total of 18,000 shares of common stock have been reserved for issuance over the 10-year term of the 1996 Non-Employee Directors' Stock Option Plan, the Company has only issued options to purchase 6,000 shares under this plan and has not issued any options under this plan since 1996. To date, the following options have been issued:
NUMBER OF SHARES ISSUABLE UPON DIRECTOR EXERCISE - ------------------- ---------------- Robert Grabowski 1,500 D.D. Hock 1,500 Lewis H. Silverberg 1,500 Michael T. Victor* 0 Mary Beth Vitale ** 1,500 ----- Total 6,000 =====
- ---------- * Not standing for reelection at the Annual Meeting of Stockholders. ** Resigned as of June 15, 2000. 1998 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN. Under the 1998 Non-Employee Directors' Stock Option Plan, each non-employee director receives an option to purchase 8,500 shares of common stock upon appointment or election to the Board of Directors. During 2000, the Company did not grant any options under this plan. Under the 1998 Directors' Plan, the options expire five years from the date of grant, unless the Compensation Committee or the Board of Directors (in the absence of the Compensation Committee) terminates the options earlier. The options vest based on the non-employee director's continued service at the following rate: (1) 1,500 on December 31, 1998; (2) 3,500 on December 31, 1999; and (3) 3,500 on December 31, 2000. Notwithstanding the foregoing, in the event of a change in control (as defined in the 1998 Directors' Plan), each outstanding option vests immediately. Each option grant permits the holder to purchase shares at their fair market value on the date of grant. In the event of a change in control, as defined in the 1998 Non-Employee Directors' Stock Option Plan, the Compensation Committee (or the Board of Directors in the absence of such a committee) may: o grant a cash bonus award to any optionee in an amount equal to the exercise price of all or any portion of the options then held by the optionee; o pay cash to any or all optionees in exchange for the cancellation of their outstanding options in an amount equal to the difference between the exercise price and the greater of the tender offer price for 6 8 the common stock underlying such options (in the event of a tender offer for the securities of the Company) or the fair market value of the stock on the date of cancellation; and o make any other adjustments or amendments to the outstanding options. Although a total of 68,000 shares of common stock were reserved for issuance over the three-year term of the 1998 Non-Employee Directors' Stock Option Plan, the Company has only issued options to purchase 34,000 shares under this plan and has not issued any options under this plan since 1998. The plan expired on December 31, 2000 and no further options will be issued under this plan. The following options were issued:
NUMBER OF SHARES ISSUABLE UPON DIRECTOR EXERCISE - ------------------- ---------------- Robert Grabowski 8,500 D.D. Hock 8,500 Lewis H. Silverberg 8,500 Michael T. Victor* 0 Mary Beth Vitale ** 8,500 ----- Total 34,000 ======
- ---------- * Not standing for reelection at the Annual Meeting of Stockholders. ** Resigned as of June 15, 2000. STOCK PERFORMANCE GRAPH The following indexed line graph indicates the Company's total return to stockholders from September 6, 1996, the date on which the Company's common stock began trading on Nasdaq, to December 29, 2000, as compared to the total return for the Nasdaq Stock Market--US Index, an index of 518 Internet companies (including Amazon.com, America Online, Earthlink, and Yahoo), and an index of 527 telecommunications companies (including AT&T, WorldCom, and Sprint). The telecommunications and Internet indices were compiled by Media General Financial Services, Inc. The Company's common stock traded on the Nasdaq SmallCap Market from September 6, 1996 through March 4, 1999 and has traded on the Nasdaq National Market since March 5, 1999. The calculations in the graph assume that $100 was invested on September 5, 1996, in each of the Company's common stock and each index and also assume dividend reinvestment. Comparison of 51 Month Cumulative Total Return Among (a) Internet Commerce & Communications, Inc, (b) The Nasdaq Stock Market (U.S.) Index, (c) an 518 company Internet Index and (d) a 527 company telecommunications index (EDGAR Representation of Data Points Used in Printed Graphic)
Internet Commerce & Telecommunications NASDAQ Stock Market Communications, Inc. Index (U.S.) Internet Index - ------------------------ ------------------- -------------------- ---------------------- 9/5/96 100.00 9/5/96 100.00 9/5/96 100.00 9/5/96 100.00 12/31/96 44.90 12/31/96 110.45 12/31/96 112.02 12/31/96 113.41 12/31/97 97.96 12/31/97 141.70 12/31/97 137.02 12/31/97 157.17 12/31/98 412.24 12/31/98 207.75 12/31/98 193.26 12/31/98 644.60 12/31/99 271.43 12/31/99 360.94 12/31/99 340.85 12/31/99 1698.06 12/29/00 12.24 12/29/00 211.32 12/29/00 214.24 12/29/00 418.28
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table shows the amount of common stock of the Company beneficially owned (unless otherwise indicated) by: (1) the directors and executive officers of the Company named in the Summary Compensation Table 7 9 below; (2) a group comprised of Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz; and (3) the directors and executive officers of the Company as a group. The Company's Board of Directors has voting power over the shares owned by Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz as a result of a voting trust agreement that was executed in conjunction with the Company's November 2000 merger with Internet Communications Corporation. The officers and directors have indicated that they intend to vote for election of the nominated slate of directors and for each of the proposals in this proxy statement. Except as otherwise indicated, all information is as of February 1, 2001.
AGGREGATE NUMBER OF PERCENT OF SHARES BENEFICIALLY SHARES NAME OWNED (1) OUTSTANDING - --------------------------- ------------------- ----------- Douglas H. Hanson 5,752,500(2) 19.1% Robert W. Grabowski 17,800(3) * D. D. Hock 10,000(4) * Lewis H. Silverberg 65,000(5) * Michael T. Victor 2,000(6) * Charles R. Eazor 8,465(7) * Paula M. Eazor 527(8) * William H. Heuston 23,900(9) * M. Doak Jacoway 10,000(10) * Chris J. Melcher 71,133(11) * E. Stephen Shriver 2,347(12) * Thomas A. Stein -0-(13) * Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz 3,800,377(14) 12.7% All Directors and Executive Officers as a group (13 persons) 9,794,049(15) 32.5%
* Less than one percent. - ---------- (1) In accordance with Rule 13d-3 under the Securities Exchange Act of 1934, a person is deemed to be the beneficial owner, for purposes of this table, of any shares of common stock if such person has or shares voting power or investment power with respect to such security, or has the right to acquire beneficial ownership at any time within 60 days from March 31, 2001. For purposes of this table, "voting power" is the power to vote or direct the voting of shares and "investment power" is the power to dispose or direct the disposition of shares. (2) Includes 3,686,115 shares of common stock directly owned by Mr. Hanson, 1,600,000 shares owned by Mr. Hanson's spouse, 300,000 shares held in family trust, 166,385 shares of common stock that Mr. Hanson has the right to acquire within 60 days of March 31, 2001 pursuant to incentive stock options, and excludes 3,800,377 shares for which Mr. Hanson, as a member of the Company's Board of Directors, shares voting and dispositive power with Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz. (3) Includes 7,800 shares of common stock directly owned by Mr. Grabowski, 10,000 shares of common stock that Mr. Grabowski has the right to acquire within 60 days of March 31, 2001 pursuant to options, and excludes 3,800,377 shares for which Mr. Grabowski, as a member of the Company's Board of Directors, shares voting and dispositive power with Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz. 8 10 (4) Includes 10,000 shares of common stock that Mr. Hock has the right to acquire within 60 days of March 31, 2001 pursuant to options and excludes 3,800,377 shares for which Mr. Hock, as a member of the Company's Board of Directors, shares voting and dispositive power with Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz. (5) Includes 55,000 shares of common stock directly owned by Mr. Silverberg, 10,000 shares of common stock that Mr. Silverberg has the right to acquire within 60 days of March 31, 2001 pursuant to options, and excludes 3,800,377 shares for which Mr. Silverberg, as a member of the Company's Board of Directors, shares voting and dispositive power with Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz. (6) Includes 2,000 shares of common stock directly owned by Mr. Victor and excludes 3,800,377 shares for which Mr. Victor, as a member of the Company's Board of Directors, shares voting and dispositive power with Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz. Mr. Victor will not stand for reelection as a director at the 2001 Annual Meeting of Stockholders. (7) Includes 8,465 shares of common stock owned directly by Mr. Eazor. Excludes indirect ownership of shares held by Mr. Eazor's spouse, Paula M. Eazor, who is listed separately in this stock ownership table. (8) Includes 527 shares of common stock owned directly by Ms. Eazor. Excludes indirect ownership of shares held by Ms. Eazor's spouse, Charles R. Eazor, who is listed separately in this stock ownership table. (9) Includes 7,234 shares of common stock directly owned by Mr. Heuston and 16,666 shares of common stock that Mr. Heuston has the right to acquire within 60 days of March 31, 2001 pursuant to options. Mr. Heuston resigned in the fourth quarter of 2000. The share ownership data included in this table represents the best information available to the Company. (10) Includes 10,000 shares of common stock directly owned by Mr. Jacoway. (11) Includes 71,133 shares of common stock that Mr. Melcher has the right to acquire within 60 days of March 31, 2001 pursuant to options. (12) Includes 2,347 shares of common stock directly owned by Mr. Shriver. (13) Mr. Stein resigned during the third quarter of 2000. The share ownership data included in this table represents the best information available to the Company. (14) Based on a Schedule 13G filed on December 11, 2000, Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz have shared power to vote or direct the vote of 3,800,377 shares of common stock and shared power to vote or direct the disposition of 3,800,377 shares of common stock. These shares were issued pursuant to the Company's November 2000 merger with Internet Communications, Inc. The Company's Board of Directors shares voting and dispositive power with Interwest Group, Inc. Anschutz Company, and Philip F. Anschutz. (15) Includes 5,709,488 shares of common stock directly owned by the thirteen officers and directors as a group, 284,184 shares of common stock that thirteen officers and directors as a group have the right to acquire within 60 days of March 31, 2001 pursuant to options, and 3,800,377 shares of common stock for which the Company's Board of Directors shares voting and dispositive power with Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz. As of February 1, 2001, the Company is not aware of any persons or entities that beneficially own more than five percent of the Company's common stock other than Douglas H. Hanson and Interwest Group, Inc., Anschutz Company, and Philip F. Anschutz, as disclosed in the stockholder table above. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS For a summary of certain transactions and relationships among the Company and its associated entities, and among the directors, executive officers, and stockholders of the Company and its associated entities, see Item 11 - "Compensation Committee Interlocks and Insider Participation" and "Note 12. Related Party Transactions" of the Notes to Consolidated Financial Statements. 9 11 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Denver, state of Colorado, on April 30, 2001. INTERNET COMMERCE & COMMUNICATIONS, INC. a Delaware corporation By: /s/ Douglas H. Hanson ------------------------------------ Name: Douglas H. Hanson Title: Chief Executive Officer, President, and Chairman of the Board of Directors (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, report has been signed below by the following persons in the capacities and on the dates indicated:
NAME TITLE DATE - ---- ----- ---- /s/ Douglas H. Hanson Chief Executive Officer, President, April 30, 2001 - ----------------------------------------- and Chairman of the Board of Douglas H. Hanson Directors (Principal Executive, Financial, and Accounting Officer) /s/ Lewis H. Silverberg Director April 30, 2001 - ----------------------------------------- Lewis H. Silverberg Director April 30, 2001 - ----------------------------------------- D.D. Hock /s/ Robert W. Grabowski Director April 30, 2001 - ----------------------------------------- Robert W. Grabowski /s/ Michael T. Victor Director April 30, 2001 - ----------------------------------------- Michael T. Victor
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