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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2001
Commission File No. 0-26728
TALK AMERICA HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 23-2827736
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
12020 SUNRISE VALLEY DRIVE, SUITE 250 20191
RESTON, VIRGINIA (zip code)
(Address of principal executive offices)
(703) 391-7500
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
None Not applicable
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, PAR VALUE $.01 PER SHARE
RIGHTS TO PURCHASE SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
(Title of class)
----------------
Indicate by check mark whether the registrant (1) has filed all documents
and 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 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 of this
Form 10-K. [ ]
As of March 29, 2002, the aggregate market value of voting stock held by
non-affiliates of the registrant, based on the average of the high and low
prices of the Common Stock on March 29, 2002 of $0.43 per share as reported on
the Nasdaq National Market, was approximately $34,740,238.36 (calculated by
excluding solely for purposes of this form outstanding shares owned by directors
and executive officers).
As of March 29, 2002, the registrant had issued and outstanding 81,652,721
shares of its Common Stock, par value $.01 per share.
DOCUMENTS INCORPORATED BY REFERENCE
None.
ITEMS OMITTED PURSUANT TO RULE 12B-25
Item 1, Item 6, Item 7, Item 8, Item 14-Financial Statements.
1
TALK AMERICA HOLDINGS, INC.
INDEX TO FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2001
ITEM PAGE
NO. NO.
- --- ---
PART I
2. Properties 3
3. Legal Proceedings 3
4. Submission of Matters to a Vote of Security Holders 3
PART II
5. Market for Registrant's Common Equity and Related Stockholders Matters 4
7A. Quantitative and Qualitative Disclosure About Market Risk 4
9. Changes in and Disagreements with Accountants and Financial Disclosure 4
PART III
10. Directors and Executive Officers of the Registrant 5
11. Executive Compensation 7
12. Security Ownership of Certain Beneficial Owners and Management 9
13. Certain Relationships and Related Transactions 10
PART IV
14. Exhibits and Reports on Form 8-K 10
2
PART I
ITEM 2. PROPERTIES
The Company leases an approximately 8,000 square foot facility in Reston,
Virginia, that serves as the Company's headquarters and is where a number of the
Company's executives and marketing personnel are located. The Company owns an
approximately 24,000 square foot facility in New Hope, Pennsylvania where the
Company's finance, legal and programming personnel are located. The Company also
leases properties in the cities in which switches for its network have been
installed.
With respect to the Company's sales, provisioning and customer service
operations, the Company owns a 32,000 square foot facility located in
Clearwater, Florida. The Company also leases the following facilities for sales,
provisioning and customer service operations: an approximately 29,000 square
foot facility in Orlando, Florida, an approximately 13,000 square foot facility
in Greenville, South Carolina, and an approximately 12,000 square foot facility
in Fort Myers, Florida.
ITEM 3. LEGAL PROCEEDINGS
The Company is party to a number of legal actions and proceedings,
including purported class actions, arising from the Company's provision and
marketing of telecommunications services, as well as certain arbitration and
legal actions and regulatory investigations and enforcement proceedings arising
in the ordinary course of business. The Company believes that the ultimate
outcome of the foregoing actions will not result in liability that would have a
material adverse effect on the Company's financial condition or results of
operations. However, it is possible that, because of fluctuations in the
Company's cash position, the timing of developments with respect to such matters
that require cash payments by the Company, while such payments are not expected
to be material to the Company's financial condition, could impair the Company's
ability in future interim or annual periods to continue to implement its
business plan, which could affect the Company's results of operations in future
interim or annual periods.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
3
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock, $.01 par value per share ("Common Stock"), is
traded on the Nasdaq National Market under the symbol "TALK". High and low
quotations listed below are actual closing sales prices as quoted on the Nasdaq
National Market:
COMMON STOCK PRICE RANGE OF COMMON STOCK
------------ ----------------------------
HIGH LOW
------- ------
2000
First Quarter $ 20.63 $ 13.44
Second Quarter 16.5 5.63
Third Quarter 8.06 4.25
Fourth Quarter 4.81 0.56
2001
First Quarter 2.53 1.28
Second Quarter 2.51 0.91
Third Quarter 1.06 0.33
Fourth Quarter 0.52 0.34
2002
First Quarter (through March 29, 2002) 0.64 0.37
As of March 29, 2002, there were approximately 1,063 record holders of
Common Stock.
The Company has never declared or paid any cash dividends on its capital
stock. The Company currently intends generally to retain future earnings to
finance the growth and development of its business and, therefore, does not
anticipate paying cash dividends in the foreseeable future. In addition, the
Company's debt instruments, including the credit facility agreement and related
guarantee to MCG Finance Corporation and the 2011 Convertible Note, prohibit the
Company from paying any dividends on its capital stock.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
In the normal course of business, the financial position of the Company is
subject to a variety of risks, such as the collectibility of its accounts
receivable and the receivability of the carrying values of its long-term assets.
The Company's long-term obligations consist primarily of its own convertible
notes and credit facility. The Company does not presently enter into any
transactions involving derivative financial instruments for risk management or
other purposes due to the stability in interest rates in recent times and
because management doe not consider the potential impact of changes in interest
rates to be material.
The Company's available cash balances are invested on a short-term basis
(generally overnight) and, accordingly, are not subject to significant risks
associated with changes in interest rates. Substantially all of the Company's
cash flows are derived from its operations within the United States and the
Company is not subject to market risk associated with changes in foreign
exchange rates.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL
DISCLOSURE
Not applicable.
4
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company as of March 29, 2002
were as follows:
NAME AGE POSITION
---- --- --------
Gabriel Battista (3) 57 Chairman of the Board of Directors, Chief Executive
Officer and Director
Warren Brasselle 44 Senior Vice President, Operations
Jeffrey Earhart 40 Senior Vice President, Customer Operations
Mark S. Fowler (1) 59 Director
Kevin D. Griffo 41 Executive Vice President - Sales and Marketing
Aloysius T. Lawn, IV 43 Executive Vice President - General Counsel and
Secretary
Arthur J. Marks (2) 57 Director
Edward B. Meyercord, III (2) 36 President, Treasurer and Director
Ronald R. Thoma (3) 67 Director
George Vinall 46 Executive Vice President - Business Development
Thomas Walsh 42 Senior Vice President - Finance
David G. Zahka 42 Chief Financial Officer
(1) Director whose term expires in 2002.
(2) Director whose term expires in 2003.
(3) Director whose term expires in 2004.
All officers are elected annually by the Board of Directors and hold office
until their successors are elected and qualified.
GABRIEL BATTISTA. Mr. Battista currently serves the Company as its Chairman of
the Board of Directors and Chief Executive Officer. Prior to joining the Company
in January of 1999 as a Director and Chief Executive Officer, Mr. Battista
served as Chief Executive Officer of Network Solutions Inc., an Internet domain
name registration company. Prior to joining Network Solutions, Mr. Battista
served both as CEO and as President and Chief Operating Officer of Cable &
Wireless, Inc., a telecommunication provider. His career also included
management positions at US Sprint, GTE Telenet and The General Electric Company.
Mr. Battista serves as a director of Capitol College, Systems & Computer
Technology Corporation (SCTC), Online Technologies Group, Inc. (OTG), and VIA
Net.works (VNWI).
WARREN BRASSELLE. Since April 2000, Mr. Brasselle has served as Senior Vice
President of Operations for the Company. Prior to joining the Company, Mr.
Brasselle was Vice President of Operations for Cable and Wireless North America
since 1996, where he was broadly responsible for the design, provisioning, and
maintenance of Cable & Wireless' voice, data, and IP network. Mr. Brasselle also
held a variety of operational positions at MCI, now MCI WorldCom Inc. and
Williams Telecommunications.
JEFFREY EARHART. Mr. Earhart currently serves as Senior Vice President, Customer
Operations of the Company. Between 1997 and 2000, he served the Company as Vice
President, Operations. Mr. Earhart originally joined the Company as its Director
of Retail Sales and Provisioning in 1990, a position he held until 1992. Prior
to rejoining the Company in 1997, Mr. Earhart served as President of Collective
Communications Services, an independent long distance reseller of long distance
services of the Company.
5
MARK S. FOWLER. Mr. Fowler has been a director of the Company since September
1999. From 1981 to 1987, he was the Chairman of the FCC. From 1987 to 1994,
Mr. Fowler was Senior Communications Counsel at Latham & Watkins, a law firm,
and of counsel from 1994 to 2000. From 1991 to 1994, he was the founder,
Chairman and Chief Executive Officer of PowerFone Holdings Inc., a
telecommunications company. From 1994 to 2000 he was a founder and chairman of
UniSite, Inc., a developer of antenna sites for use by multiple wireless
operators. From 1999 to date Mr. Fowler has served as a director of Pac-West
Telecomm, Inc., a competitive local exchange carrier. From 1999 to date, Mr.
Fowler has served as a director of Beasley Broadcast Group, a radio broadcasting
company. Mr. Fowler is also a founder and serves as Chairman of the Board of
Directors of AssureSat, Inc., a provider of telecommunications satellite backup
services.
KEVIN D. GRIFFO. Mr. Griffo has served as the Company's Executive Vice
President - Sales and Marketing since March 2000. Prior to joining the Company,
Mr. Griffo was the President and Chief Operating Officer of Access One. Mr.
Griffo was also employed by AMNEX from January 1995 to December 1997, holding
various positions, including Chief Operating Officer and President of AMNEX's
Telecommunications Division.
ALOYSIUS T. LAWN, IV. Mr. Lawn joined the Company in January 1996 and currently
serves as Executive Vice President - General Counsel and Secretary. Prior to
joining the Company, from 1985 through 1995, Mr. Lawn was an attorney in private
practice. Mr. Lawn is a director of Stonepath Group, Inc., a global, integrated
logistics services organization.
ARTHUR J. MARKS. Mr. Marks has been a director of the Company since August 1999.
He is currently a general partner of Valhalla Partners, a private equity fund.
From 1984 through 2001, Mr. Marks was a General Partner of New Enterprise
Associates, a private equity fund that invests in early stage companies in
information technology and medical and life sciences. Mr. Marks serves as a
director of two publicly traded software companies, Mobius Management Systems
and Progress Software Corp., as well as one publicly traded communications
equipment company, Advanced Switching Communications. He is also a director of a
number of privately held companies.
EDWARD B. MEYERCORD, III. Mr. Meyercord currently serves as the President,
Treasurer and Director of the Company. Mr. Meyercord was elected to the Board of
Directors and President of the Company in May 2001. He served as Chief Financial
Officer of the Company between August 1999 and December 2001 and Chief Operating
Officer of the Company between January 2000 and May 2001. He joined the Company
in September of 1996 as the Executive Vice President, Marketing and Corporate
Development. Prior to joining the Company, Mr. Meyercord served as Vice
President in the Global Telecommunications Corporate Finance Group at Salomon
Brothers, Inc., based in New York and prior to Salomon Brothers he worked in the
corporate finance department at Paine Webber Incorporated.
RONALD R. THOMA. Mr. Thoma is currently a business consultant, having retired
in early 2000 as an Executive Vice President of Crown Cork and Seal Company,
Inc., a manufacturer of packaging products, where he had been employed since
1955. Mr. Thoma has served as a director of the Company since 1995.
GEORGE VINALL. Mr. Vinall joined the Company in January of 1999 as Executive
Vice President - Business Development. Prior to joining the Company, he served
as President of International Protocol LLC, a telecommunication consulting
business, as General Manager of Cable & Wireless Internet Exchange, an
international Internet service provider, and as Vice President, Regulatory &
Government Affairs of Cable and Wireless North America, a telecommunication
provider.
THOMAS M. WALSH. Mr. Walsh joined the Company in September of 2000 as Senior
Vice President - Finance. Before joining the Company, he served as a director
at Comcast Cellular Communications, a telecommunications company, from 1996 to
1999, and Regional Controller of Southwestern Mobil Systems, a successor
corporation, from 1999 to 2000. Prior to Comcast Cellular Communications he
worked for Call Technology Corporation, a telecommunications company, where he
was responsible for all finance and accounting functions as Chief Financial
Officer. Prior to his tenure with Call Technology Corporation, Mr. Walsh served
as Audit Manager for Ernst & Young. Mr. Walsh is a Certified Public Accountant.
DAVID G. ZAHKA. Mr. Zahka joined the Company in December of 2001 as Chief
Financial Officer. Before joining the Company, he spent more than 15 years with
PaineWebber Incorporated, and its successor UBS Warburg, where he served most
recently as Executive Director of the Financial Sponsors Group. At PaineWebber,
Mr. Zahka also served as Senior Vice President of Debt Capital Markets and First
Vice President of the Utility Finance Group.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Under Section 16(a) of the Securities Exchange Act of 1934, as amended, the
Company's directors and certain officers and persons who are the beneficial
owners of more than 10 percent of the Common Stock of the Company are required
to report their ownership of the Common Stock, options and certain related
securities and any changes in that ownership to the SEC. Specific due dates for
these reports have been established, and the Company is required to report any
failure to file by such dates in 2001. The Company believes that all of the
required filings have been made in a timely manner, except that, due solely to
an administrative error by the Company, one transaction by Mr. Fowler was not
reported timely. In making this statement, the Company has relied on copies of
the reporting forms received by it.
6
ITEM 11. EXECUTIVE COMPENSATION.
The following table sets forth information for the fiscal years ended
December 31, 2001, 2000 and 1999 as to the compensation for services rendered
paid by the Company to the Chief Executive Officer and to the four other most
highly compensated executive officers of the Company whose annual salary and
bonus exceeded $100,000.
Summary Compensation Table
ANNUAL COMPENSATION LONG TERM
COMPENSATION
-------------------- ------------
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY (1) BONUS (1) OPTIONS/SARS
- ------------------------------------------ ---- ----------- ---------- ------------------
Gabriel Battista, Chairman of the Board 2001 --(2) -- --
of Directors, Chief Executive Officer 2000 --(2) $ 50,000 500,000(3)
and Director 1999 $1,500,000(2) $ 750,000 --
Edward B. Meyercord, III, President, 2001 $ 300,000 -- --
Director and Treasurer 2000 $ 298,000 $ 30,000 350,000(3)
1999 $ 225,385 $ 150,000 450,000(4)(9)
Aloysius T. Lawn, IV, Executive Vice 2001 $ 275,000 -- --
President - General Counsel and 2000 $ 260,500 $ 27,500 312,500(3)
Secretary 1999 $ 233,269 $ 150,000 210,000(4)(9)
Kevin Griffo, Executive Vice President - 2001 $ 250,000 $ 16,667(7) --
Sales and Marketing 2000 $ 247,345(5) $ 41,667(7) 1,563,114(3)
(8)(9)
1999 $ 131,885(6) -- 57,143 (6)
George Vinall, Executive Vice President - 2001 $ 250,000 -- --
Business Development 2000 $ 248,000 $ 25,000 245,000(3)
1999 $ 200,000 $ 150,000 --
(1) The costs of certain benefits not properly categorized as salary or
benefits are not included because they did not exceed, in the case of any
executive officer named in the table, the lesser of $50,000 or 10% of the total
annual salary and bonus reported in the above table.
(2) Under his employment agreement with the Company, Mr. Battista is
entitled to a minimum annual salary of $500,000. Mr. Battista's salary shown
for 1999 includes, in addition to the $500,000 annual base salary for 1999,
$1,000,000 representing a prepayment of $500,000 in salary for each of the years
2000 and 2001 as provided in Mr. Battista's employment agreement with the
Company. Therefore, no salary was paid to Mr. Battista in 2001.
(3) Options to purchase the Company's common stock. The options granted to
Messrs. Battista, Meyercord, Lawn, Griffo and Vinall were granted under the
Company's 2000 Long Term Incentive Plan. In 2000, Mr. Battista was granted (i)
options to purchase 250,000 shares of the Company's common stock at an exercise
price of $2.00 per share that vest in five years and (ii) options to purchase
250,000 shares of the Company's common stock at an exercise price of $4.75 per
share that vest over three years. In 2000, Mr. Meyercord was granted (i) options
to purchase 150,000 shares of the Company's common stock at an exercise price of
$2.00 per share that vest in five years and (ii) options to purchase 200,000
shares of the Company's common stock at an exercise price of $4.75 per share
that vest over three years. In 2000, Mr. Lawn was granted (i) options to
purchase 137,500 shares of the Company's common stock at an exercise price of
$2.00 per share that vest in five years, (ii) options to purchase 50,000 shares
of the Company's common stock at an exercise price of $2.31 half of which vested
upon grant and the remainder of which vested six months thereafter and (iii)
options to purchase 125,000 shares of the Company's common stock at an exercise
price of $4.75 per share that vest over three years. In 2000, Mr. Griffo was
granted (i) options to purchase 125,000 shares of the Company's common stock at
an exercise price of $2.00 per share that vest in five years and (ii) options to
purchase 105,000 shares of the Company's common stock at an exercise price of
$4.75 per share that vest over three years. In 2000, Mr. Vinall was granted (i)
options to purchase 125,000 shares of the Company's common stock at an exercise
price of $2.00 per share that vest in five years and (ii) options to purchase
120,00 shares of the Company's common stock at an exercise price of $4.75 per
share that vested upon grant. Each of the employment agreements for Messrs.
Battista, Meyercord, Lawn, Griffo and Vinall provide for immediate vesting of
options in event of a "change of control" (as defined in such agreements).
(4) Options to purchase the Company's common stock. The options granted to
Messrs. Meyercord and Lawn were granted under the Company's 1998 Long Term
Incentive Plan. In 1999, Mr. Meyercord was granted options that vest over three
years to purchase 450,000 shares of the Company's common stock at an exercise
price of $15.94 per share. In 1999, Mr. Lawn was granted options that vest over
three years to purchase 210,000 shares of the Company's common stock at an
exercise price of $9.88 per share.
(5) Mr. Griffo commenced his employment with the Company in March, 2000.
Prior to that time he was President and Chief Operating Officer of Access One.
On August 9, 2000 a wholly owned subsidiary of the Company merged with and into
Access One. The amount includes amounts paid to Mr. Griffo by Access One prior
to his commencement of employment with the Company.
(6) These amounts were paid to Mr. Griffo by Access One where he was
President and Chief Operating Officer.
(7) A portion of this bonus was paid in shares of Access One (which was
subsequently converted into shares of the Company common stock pursuant to the
merger of Access One and a wholly owned subsidiary of the Company), which vest
over three years and were valued at the then fair market value at the time of
grant.
(8) Options to purchase the Company's common stock. In connection with his
hiring by the Company in 2000, Mr. Griffo was granted options that vest over two
years to purchase 1,300,000 shares of the Company's common stock at an exercise
price of $13.69 per share. Mr. Griffo was also granted options to purchase
33,114 shares of the Company's common stock in 2000 that were granted under the
1997 and 1999 Access One Stock Option Plans, which plans were assumed by the
Company pursuant to the terms of Access One's acquisition by the Company.
(9) Messrs. Meyercord, Lawn, and Griffo offered the following options to
purchase the Company's common stock for exchange pursuant to the Company's
Options Exchange Offer (described in "STOCK OPTIONS GRANT" below, which options
are expected to be reissued on or after April 5, 2002: 450,000, 210,000, and
1,300,000, respectively.
7
STOCK OPTION GRANTS
On August 29, 2002, the Company commenced a voluntary stock option exchange
program (the "Options Exchange Offer") to certain eligible employees of the
Company, which included the executive officers named in the Summary Compensation
Table above. Under the program, eligible employees were given the option to
cancel each outstanding stock option previously granted to them at an exercise
price greater than or equal to $5.50 per share, in exchange for a new option to
buy shares of the Company's common stock to be granted on or after April 5,
2002, six months and one day from October 4, 2001, the date the old options were
cancelled. The exercise price of these new options will be equal to the fair
market value of the Company's common stock on the date of grant. In total, 5.8
million stock options were initially cancelled as a result of this program.
Other than as discussed above, the Company granted no options to purchase common
stock of the Company during the fiscal year ended December 31, 2001 to the
executive officers named in the Summary Compensation Table, above. Further, none
of the executive officers named in the Summary Compensation Table above acquired
any shares of the Company upon the exercise of options in 2001. On December 31,
2001, the exercise prices of all of the vested options to purchase shares of the
Company held by each of the executive officers named in the Summary Compensation
Table were above the then market price for the Company's shares.
EMPLOYMENT CONTRACTS
Gabriel Battista is party to an employment agreement with the Company,
dated as of November 13, 1998, that was amended as of March 28, 2001 and now
expires on December 31, 2004. Under the terms of the agreement, as amended, Mr.
Battista received a signing bonus of $3,000,000 at the time of the original
agreement and is entitled to a minimum annual base salary of $500,000, plus a
discretionary bonus. The initial three years of salary under the original
agreement were paid in advance. Mr. Battista is also entitled to other benefits
and perquisites. In addition, upon execution of the original agreement in 1998,
Mr. Battista was granted options that vested over three years to purchase
1,000,000 shares of the Company common stock at an exercise price of $10.44 per
share, and options that vested immediately upon execution of the agreement to
purchase an additional 650,000 shares at an exercise price of $7.00 per share.
In the event of certain transactions (including an acquisition of the
Company's assets, a merger into another entity or a transaction that results in
the Company common stock no longer being required to be registered under the
Securities Exchange Act of 1934), Mr. Battista will receive an additional bonus
of $1,000,000 if the price per share for the Company common stock in such
transaction was less than or equal to $20.00 per share, or $3,000,000 if the
consideration is greater than $20.00 per share.
Edward B. Meyercord, III entered into a three-year employment agreement
with the Company effective as of March 26, 2001. Commencing in 2002, under the
contract, Mr. Meyercord is entitled to a minimum annual base salary of $350,000
and certain other perquisites made generally available by the Company to its
senior executive officers.
Aloysius T. Lawn, IV entered into a three-year employment agreement with
the Company effective as of March 26, 2001. Under the contract, Mr. Lawn is
entitled to a minimum annual base salary of $275,000 and certain other
perquisites made generally available by the Company to its senior executive
officers.
George Vinall is party to an employment agreement with the Company that was
amended as of March 28, 2001 and now expires on December 28, 2004. Under the
contract, as amended, Mr. Vinall is entitled to a minimum annual base salary of
$250,000 and certain other perquisites made available by the Company to its
senior executive officers. In connection with the original agreement, Mr.
Vinall was granted an option to purchase 240,000 shares of the Company common
stock at an exercise price of $8.56 per share.
Kevin Griffo entered into a three-year employment agreement with the
Company effective as of March 24, 2000 that was amended as of March 28, 2001.
Under the contract, Mr. Griffo is entitled to a minimum annual base salary of
$250,000 and certain other perquisites made available by the Company to its
senior executive officers. In addition, upon execution of the agreement, Mr.
Griffo was granted options that vest over three years to purchase 1,300,000
shares of the Company common stock at an exercise price of $13.69 per share
Each of the employment agreements for Messrs. Battista, Meyercord, Lawn,
Vinall and Griffo provide for immediate vesting of options in event of a "change
of control" (as defined in the agreements) of the Company and provide for
severance benefits in the event employment is terminated by the Company without
cause prior to the end of the term and for a certain period beyond the end of
the term in the event of a "change of control." The severance benefits are
generally the payment of an amount equal to two years' base salary plus the
average annual incentive bonus earned by the executive in the preceding four
years, as well as the continuation of various employee benefits for two years.
Each of the above-described agreements requires the executive to maintain
the confidentiality of Company information and assign any inventions to the
Company. In addition, each of the executive officers has agreed that he will not
compete with the Company by engaging in any capacity in any business that is
competitive with the business of the Company during the term of his respective
agreement and thereafter for specified periods.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None.
8
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information known to the Company
with respect to beneficial ownership of the Company common stock as of March 29,
2002 (except as otherwise noted) by (i) each stockholder who is known by the
Company to own beneficially more than five percent of the outstanding common
stock, (ii) each of the Company's directors and nominees for director, (iii)
each of the executive officers named below and (iv) all current directors and
executive officers of the Company as a group. Except as otherwise indicated
below, the Company believes that the beneficial owners of the common stock
listed below have sole investment and voting power with respect to such shares.
NAME OF BENEFICIAL OWNER OR NUMBER OF SHARES PERCENT OF SHARES
IDENTITY OF GROUP BENEFICIALLY OWNED (1) BENEFICIALLY OWNED
- --------------------------- ---------------------- ------------
Legg Mason, Inc.
100 Light Street
P. O. Box 1476
Baltimore, MD 21203
5,631,545 (3) 6.9%
AOL Time Warner Inc.
75 Rockefeller Plaza
New York, NY 10019
7,200,000 (2) 8.8%
Paul Rosenberg
650 N. E. 5th Avenue
Boca Raton, Fl 33432
5,759,985 (4) 7.1%
Gabriel Battista 1,833,334 (5) 2.2%
Mark S. Fowler 216,023 (5) *
Arthur J. Marks 154,999 (5) *
Edward B. Meyercord, III 497,797 (5) *
Ronald R. Thoma 87,934 (5) *
Kevin Griffo 2,063,828 (5) 2.5%
Aloysius T. Lawn, IV 390,317 (5) *
George Vinall 360,000 (5) *
All directors and executive
officers as a group (12 persons) 6,020,538 (5) 6.9%
* Less than 1%
(1) The securities "beneficially owned" by a person are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the SEC and, accordingly, may include securities owned by or for,
among others, the spouse, children or certain other relatives of such person.
The same shares may be beneficially owned by more than one person. Beneficial
ownership may be disclaimed as to certain of the securities.
(2) The foregoing information is derived from the Schedule 13G filed by AOL
Time Warner Inc. on February 13, 2002.
(3) Includes 5,574,200 shares of the Company common stock beneficially owned
by LMM, LLC, and 57,345 shares beneficially owned by Legg Mason Wood Walker,
Inc., according to a Schedule 13G filed by Legg Mason Wood Walker, Inc. on
February 14, 2002.
(4) The foregoing information is derived from the Schedule 13D/A filed by
Paul Rosenberg, the Rosenberg Family Limited Partnership, PBR, Inc. and the New
Millennium Charitable Foundation on February 12, 1999.
(5) Includes shares of the Company common stock that could be acquired upon
exercise of options exercisable within 60 days after March 29, 2002 and that
have been tendered for exchange and cancelled pursuant to the Company's Option
Exchange Offer on the assumption that the new options will be exchanged
therefore. Includes shares of Company common stock that could be acquired upon
exercise of options exercisable within sixty (60) days after March 29, 2002 as
follows: Gabriel Battista-1,733,334; Edward B. Meyercord III-366,667; Aloysius
T. Lawn IV-301,667; Kevin Griffo-1,882,400; and George Vinall-360,000.
9
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
(3) EXHIBITS:
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
3.1 Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the
Company's registration statement on Form S-1 (File No. 33-94940)).
3.2 Certificate of Designation of Series A Junior Participating Preferred Stock
of Company dated August 27, 1999 (incorporated by reference to Exhibit A to
Exhibit 1 to the Company's registration statement on Form 8-A (File No.
000-26728)).
3.3 Composite form of Amended and Restated Certificate of Incorporation of the
Company, as amended through April 6, 2001 (incorporated by reference to
Exhibit 3.1 to the Company's quarterly report on Form 10-Q, dated May 14,
2001).
4.1 Specimen of Talk.com Inc. common stock certificate (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on Form
S-4 (File No. 333-40980)).
4.2 Form of Warrant Agreement for Elec Communications, Kenneth Baritz, Joel
Dupre, Keith Minella, Rafael Scolari, and William Rogers dated August 9,
2000 (incorporated by reference to Exhibit 4.2 to the Company's Annual
Report on Form 10-K for the year ended December 31, 2000).
4.3 Form of Warrant Agreement for MCG Credit Corporation dated August 9, 2000
(incorporated by reference to Exhibit 4.3 to the Company's Annual Report on
Form 10-K for the year ended December 31, 2000).
4.4 Form of Warrant Agreement for MCG Credit Corporation dated October 20, 2000
(incorporated by reference to Exhibit 4.4 to the Company's Annual Report on
Form 10-K for the year ended December 31, 2000).
4.5 Form of Warrant Agreement for MCG Finance Corporation dated October 20,
2000 (incorporated by reference to Exhibit 4.5 to the Company's Annual
Report on Form 10-K for the year ended December 31, 2000).
10.1 Employment Agreement between the Company and Aloysius T. Lawn, IV dated
March 28, 2001 (incorporated by reference to Exhibit 10.1 to the Company's
Annual Report on Form 10-K for the year ended December 31, 2000).*
10.2 Employment Agreement between the Company and Edward B. Meyercord, III dated
March 28, 2001 (incorporated by reference to Exhibit 10.2 to the Company's
Annual Report on Form 10-K for the year ended December 31, 2000).*
10.3 Indemnification Agreement between the Company and Aloysius T. Lawn, IV
dated March 28, 2001(incorporated by reference to Exhibit 10.3 to the
Company's Annual Report on Form 10-K for the year ended December 31, 2000).
*
10.4 Indemnification Agreement between the Company and Edward B. Meyercord, III
(incorporated by reference to Exhibit 10.14 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996). *
10.5 Tel-Save Holdings, Inc. 1995 Employee Stock Option Plan (incorporated by
reference to Exhibit 10.15 to the Company's registration statement on Form
S-1 (File No. 33-94940)).*
10
10.6 Telecommunications Marketing Agreement by and among the Company, Tel-Save,
Inc. and America Online, Inc., dated February 22, 1997 (incorporated by
reference to Exhibit 10.32 to the Company's Form 10-K for the year ended
December 31, 1996).+
10.7 Amendment No. 1, dated as of January 25, 1998, to the Telecommunications
Marketing Agreement dated as of February 22, 1997 by and among the Company,
Tel-Save, Inc. and America Online, Inc. (incorporated by reference to
Exhibit 10.31 to the Company's Form 10-K for the year ended December 31,
1997).+
10.8 Amendment No. 2, dated May 14, 1998, among the Company, Tel-Save, Inc. and
America Online, Inc., which amends that certain Telecommunications
Marketing Agreement, dated as of February 22, 1997, as corrected and
amended by letter, dated April 23, 1997, and amended by an Amendment No. 1,
dated January 25, 1998 (incorporated by reference to Exhibit 10.1 to the
Company's quarterly report on Form 10-Q, dated August 14, 1998).+
10.9 Amendment No. 3, effective as of October 1, 1998, among the Company,
Tel-Save, Inc. and America Online, Inc., which amends that certain
Telecommunications Marketing Agreement, dated as of February 22, 1997, as
corrected and amended by letter, dated April 23, 1997, and amended by an
Amendment No. 1, dated January 25, 1998, and an Amendment No. 2, dated May
14, 1998 (incorporated by reference to Exhibit 10.22 to the Company's
Annual Report on Form 10-K for the year ended December 31, 1998).+
10.10 Amendment No. 4, effective as of June 30, 2000, among the Company,
Talk.com Holding Corp. and America Online, Inc., which amends that certain
Telecommunications Marketing Agreement, dated as of February 22, 1997, as
corrected and amended by letter, dated April 23, 1997, and amended by an
Amendment No. 1, dated January 25, 1998, an Amendment No. 2, dated May 14,
1998, and an Amendment No. 3, effective October 1, 1998 (incorporated by
reference to Exhibit 10.1 to Talk.com's Quarterly Report on Form 10-Q dated
August 14, 2000).+
10.11 Amendment No. 5, effective as of August 1, 2000, among the Company,
Talk.com Holding Corp. and America Online, Inc., which amends that certain
Telecommunications Marketing Agreement, dated as of February 22, 1997, as
corrected and amended by letter, dated April 23, 1997, and amended by an
Amendment No. 1, dated January 25, 1998, an Amendment No. 2, dated May 14,
1998, an Amendment No. 3, effective October 1, 1998, and an Amendment No.
4, effective June 30, 2000 (incorporated by reference to Exhibit 10.3 to
Talk.com's Quarterly Report on Form 10-Q dated August 14, 2000).+
10.12 Amendment No. 6, effective as of September 19, 2001, among Talk America
Inc., the Company and America Online, Inc. which amends that certain
Telecommunications Marketing Agreement, dated as of February 22, 1997, as
corrected and amended by letter, dated April 23, 1997, and amended by an
Amendment No. 1, dated January 25, 1998, an Amendment No. 2, dated May 14,
1998, an Amendment No. 3, effective October 1, 1998, an Amendment No. 4,
effective June 30, 2000, and an Amendment No. 5, effective August 1, 2000
(incorporated by reference to Exhibit 10.6 to the Company's Current Report
on Form 8-K filed on September 24, 2001).
10.13 Letter dated August 25, 1999 from America Online, Inc. to the Company
(incorporated by reference to Exhibit 99.2 to the Company's Current Report
on Form 8-K dated August 27, 1999).
10.14 Indenture dated as of September 9, 1997 between the Company and First
Trust of New York, N.A. (incorporated by reference to Exhibit 4.3 to the
Company's registration statement on Form S-3 (File No. 333-39787)).
10.15 Indenture dated as of December 10, 1997 between the Company and First
Trust of New York, N.A. (incorporated by reference to Exhibit 10.34 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1997).
10.16 Employment Agreement, dated as of November 13, 1998, between the Company
and Gabriel Battista (incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K dated January 20, 1999).*
11
10.17 Amendment to Employment Agreement, dated March 28, 2001, between the
Company and Gabriel Battista (incorporated by reference to Exhibit 10.16 to
the Company's Annual Report on Form 10-K for the year ended December 31,
2000).*
10.18 Indemnification Agreement, dated as of December 28, 1998, between the
Company and Gabriel Battista (incorporated by reference to Exhibit 10.2 to
the Company's Current Report on Form 8-K dated January 20, 1999). *
10.19 Stock Option Agreement, dated as of November 13, 1998, between the Company
and Gabriel Battista (incorporated by reference to Exhibit 10.3 to the
Company's Current Report on Form 8-K dated January 20, 1999).*
10.20 Stock Option Agreement, dated as of November 13, 1998, between the Company
and Gabriel Battista (incorporated by reference to Exhibit 10.4 to the
Company's Current Report on Form 8-K dated January 20, 1999).*
10.21 1998 Long-Term Incentive Plan of the Company (incorporated by reference to
Exhibit 10.14 to the Company's Current Report on Form 8-K dated January 20,
1999).*
10.22 Investment Agreement, dated as of December 31, 1998, as amended on
February 22, 1999, among the Company, America Online, Inc., and, solely for
purposes of Sections 4.5, 4.6 and 7.3(g) thereof, Daniel Borislow, and
solely for purposes of Section 4.12 thereof, Tel-Save, Inc. and the D&K
Retained Annuity Trust dated June 15, 1998 by Mark Pavol, Trustee
(incorporated by reference to Exhibit 10.41 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1998).
10.23 Employment Agreement between the Company and Kevin Griffo dated March 24,
2000 (incorporated by reference to Exhibit 10.7 to the Company's
Registration Statement in Form S-4 (File No. 333-40980)).*
10.24 Form of Indemnification Agreement, dated as of January 5, 1999, for George
Vinall (incorporated by reference to Exhibit 10.50 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1998). *
10.25 Form of Non-Qualified Stock Option Agreement, dated as of December 16,
1998, for George Vinall, (incorporated by reference to Exhibit 10.51 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1998).*
10.26 2000 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.31
to the Company's Registration Statement on Form S-4 (No. 333-40980)). *
10.27 Form of Non-Qualified Stock Option Agreement, dated December 12, 2000, for
each of Gabriel Battista, Kevin Griffo, Aloysius T. Lawn IV, Edward B.
Meyercord, III, and George Vinall (incorporated by reference to Exhibit
10.40 to the Company's Annual Report on Form 10-K for the year ended
December 31, 2000).*
10.28 Employment Agreement, dated as of December 16, 1998, between the Company
and George Vinall (incorporated by reference to Exhibit 10.62 to the
Company's Annual Report on Form 10-K for the year ended December 31,
1998).*
10.29 Rights Agreement dated as of August 19, 1999 by and between the Company
and First City Transfer Company, as Rights Agent (incorporated by reference
to Exhibit 1 to the Company's registration statement on Form 8-A (File No.
000-26728)).
10.30 Interconnect Agreement between BellSouth and The Other Phone Company
(incorporated by reference to Exhibit 10.47 to the Company's Registration
Statement in Form S-4 (File No. 333-40980)).
10.31 Agreement between Talk.com Holding Corp. and BellSouth Telecommunications,
Inc., dated May 22, 2000 (incorporated by reference to Exhibit 10.46 to the
Company's Annual Report on Form 10-K for the year ended December 31, 2000).
12
10.32 Amendment to Interconnection Agreement between Talk.com Holding Corp. and
BellSouth Telecommunications, Inc., dated December 26, 2000 (incorporated
by reference to Exhibit 10.47 to the Company's Annual Report on Form 10-K
for the year ended December 31, 2000).
10.33 Credit Facility Agreement, among Talk.com Holding Corp., Access One
Communications Corp. and certain of their direct and indirect subsidiaries
and MCG Finance Corporation dated as of October 20, 2000 (incorporated by
reference to Exhibit 10.4 to Talk.com's Quarterly Report of Form 10-Q dated
November 14, 2000).
10.34 Guaranty between the Company and MCG Finance Corporation, dated as of
October 20, 2000 (incorporated by reference to Exhibit 10.5 to Talk.com's
Quarterly Report of Form 10-Q dated November 14, 2000).
10.35 Consulting Agreement dated as of July 5, 2000 between MCG Credit
Corporation and Access One Communications Corp. (incorporated by reference
to Exhibit 10.55 to the Company's Registration Statement in Form S-4 (File
No. 333-40980)).
10.36 Employment Agreement by and between Thomas M. Walsh and the Company dated
as of August 7, 2000 (incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q dated November 14, 2000).*
10.37 Indemnification Agreement by and between Thomas M. Walsh and the Company
dated as of August 7, 2000 (incorporated by reference to Exhibit 10.2 to
the Company's Quarterly Report on Form 10-Q dated November 14, 2000).*
10.38 Non-Qualified Stock Option Agreement by and Thomas M. Walsh and the
Company dated as of August 7, 2000 (incorporated by reference to Exhibit
10.3 to the Company's Quarterly Report on Form 10-Q dated November 14,
2000).*
10.39 Lease by and between Talk.com Holding Corp. and University Science Center,
Inc. dated April 10, 2000 (incorporated by reference to Exhibit 10.54 to
the Company's Annual Report on Form 10-K for the year ended December 31,
2000).
10.40 Lease by and between The Other Phone Company, dba Access One
Communications and University Science Center, Inc. dated December 8, 1999
(incorporated by reference to Exhibit 10.55 to the Company's Annual Report
on Form 10-K for the year ended December 31, 2000).
10.41 Letter dated August 2, 2000 from America Online, Inc. to the Company
(incorporated by reference to Exhibit 99.2 to the Company's Current Report
on Form 8-K dated August 3, 2000).
10.42 Restated Access One Communications Corp. 1997 Stock Option Plan
(incorporated by reference to Exhibit 4.2 to the Company's registration
statement on Form S-8 (File No. 333-52166).*
10.43 Restated Access One Communications Corp. 1999 Stock Option Plan
(incorporated by reference to Exhibit 4.3 to the Company's registration
statement on Form S-8 (File No. 333-52166).*
10.44 Amendment to Employment Agreement for Kevin Griffo dated March 28, 2001
(incorporated by reference to Exhibit 10.60 to the Company's Annual Report
on Form 10-K for the year ended December 31, 2000).*
10.45 Amendment to Employment Agreement for George Vinall dated March 28, 2001
(incorporated by reference to Exhibit 10.61 to the Company's Annual Report
on Form 10-K for the year ended December 31, 2000.*
10.46 Second Amendment to Investment Agreement dated as of August 2, 2000
between the Company and America Online, Inc. (incorporated by reference to
Exhibit 99.1 to the Company's Current Report on Form 8-K dated August 3,
2000).
10.47 Employment Agreement between the Company and Jeffrey Earhart dated October
2, 2001 (incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q dated November 14, 2001).*
13
10.48 Employment Agreement between the Company and Warren Brasselle dated March
8, 2000 (filed herewith).*
10.49 Form of Non-Qualified Stock Option Agreement, dated as of March 24, 2000,
for Kevin Griffo (filed herewith).*
10.50 Restructuring and Note Agreement, dated as of September 19, 2001, between
the Company and America Online, Inc. (incorporated by reference to Exhibit
10.1 to the Company's Current Report on Form 8-K filed on September 24,
2001).
10.51 Registration Rights Agreement, dated as of September 19, 2001, between the
Company and America Online, Inc. (incorporated by reference to Exhibit 10.2
to the Company's Current Report on Form 8-K filed on September 24, 2001).
10.52 Security and Pledge Agreement, dated as of September 19, 2001, among the
Company as Grantor, and State Street Bank and Trust Company, N.A., as
collateral agent on behalf of America Online, Inc. and America Online, Inc.
(incorporated by reference to Exhibit 10.3 to the Company's Current Report
on Form 8-K filed on September 24, 2001).
10.53 Master Subsidiary Guarantee, Security Agreement Collateral Assignment and
Equity Pledge, dated as of September 19, 2001, among certain subsidiaries
of the Company as Grantors, State Street Bank and Trust Company, N.A., as
Collateral Agent on behalf of America Online, Inc., and America Online,
Inc. (incorporated by reference to Exhibit 10.4 to the Company's Current
Report on Form 8-K filed on September 24, 2001).
10.54 Intercreditor Agreement, dated as of September 19, 2001, between MCG
Finance Corporation, as collateral agent for certain MCG Lenders (as
defined therein) and State Street Bank and Trust Company, N.A., as
collateral agent (incorporated by reference to Exhibit 10.5 to the
Company's Current Report on Form 8-K filed on September 24, 2001).
10.55 Consent and Amendment to Talk.com Loan Documents, dated as of August 10,
2001 by and among Talk America Inc., Access One Communications Corp., the
Company, MCG Finance Corporation and MCG Capital Corporation (incorporated
by reference to Exhibit 10.7 to the Company's Current Report on Form 8-K
filed on September 24, 2001).
10.56 Consent and Amendment to Talk.com Loan Documents, dated as of September
19, 2001 by and among Talk America Inc., Access One Communications Corp.,
the Company, MCG Finance Corporation and MCG Capital Corporation
(incorporated by reference to Exhibit 10.8 to the Company's Current Report
on Form 8-K filed on September 24, 2001).
10.57 First Amendment, dated as of September 19, 2001, to the Rights Agreement
dated as of August 19, 1999, by and between Talk America Holdings, Inc. and
First City Transfer Company, as Rights Agent (incorporated by reference to
Exhibit 10.9 to the Company's Current Report on Form 8-K filed on September
24, 2001).
10.58 Letter Agreement between America Online, Inc. and the Company dated
February 21, 2002 (incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K filed on February 21, 2002).
10.59 Amendment Number Three to Talk.com Loan Documents, dated as of February
12, 2002, among the Company, Talk America Inc., Access One Communications
Corporation, each other Borrower under and as defined in the Credit
Agreement (referenced therein), Lenders that are parties thereto, and MCG
Capital Corporation (incorporated by reference to Exhibit 10.2 to the
Company's Current Report on Form 8-K filed on February 21, 2002).
10.60 Amended and Restated Consulting Agreement, dated as of February 12, 2002,
among the Company and MCG Capital Corporation (incorporated by reference to
Exhibit 10.3 to the Company's Current Report on Form 8-K filed on February
21, 2002).
14
10.61 2001 Non-Officer Long Term Incentive Plan of the Company (incorporated by
reference to Exhibit 4.1 to the Company's registration statement on Form
S-8 (File No. 333-74820).*
10.62 Interconnection Agreement under Sections 251 and 252 of the
Telecommunications Act of 1996 dated as of July 13, 2000, between
Southwestern Bell Telephone Company, Nevada Bell Telephone Company, Pacific
Bell Telephone Company, Southern New England Telephone, Ameritech and
Talk.com Holding Corp. (filed herewith).
10.63 Mi2A Amendment to the Interconnection Agreement under Section 271 of the
Telecommunications Act of 1996 dated as of May 15, 2001, between Ameritech
Michigan and Talk.com Holding Corp. (filed herewith).
10.64 Indenture of Lease by and between Woodruff Properties and Omnicall, Inc.
dated August 1, 1998 (filed herewith).
10.65 Amendment dated February 9, 2001 to the Indenture of Lease by and between
Woodruff Properties and Omnicall, Inc. dated August 1, 1998 (filed
herewith).
10.66 Lease Agreement by and between Bridge Plaza Partnership and The Furst
Group, Inc. dates as of November 4, 1998 (filed herewith).
10.67 Option dated July __, 2001 to Renew the Lease Agreement by and between
Bridge Plaza Partnership and The Furst Group, Inc. dates as of November 4,
1998 (filed herewith).
10.68 Office Lease by and between Reston Plaza I and II, LLC and Talk.com, Inc.
dated as of April 28, 2000 (filed herewith).
21.1 Subsidiaries of the Company.
_________
* Management contract or compensatory plan or arrangement.
+ Confidential treatment previously has been granted for a portion of this
exhibit.
(b) Reports on Form 8-K.
No Current Reports on Form 8-K were filed by the Company during the three months
ended December 31, 2001.
15
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.
Date: March 29, 2002
TALK AMERICA HOLDINGS, INC.
By: Gabriel Battista /s/
---------------------------
Gabriel Battista
Chairman of the Board of Directors,
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant in
the capacities and on the dates indicated.
SIGNATURE TITLE DATE
Gabriel Battista /s/ Chairman of the Board March 29, 2002
- --------------------------- of Directors, Chief Executive
Gabriel Battista Officer and Director
(Principal Executive Officer)
David G. Zahka /s/ Chief Financial Officer March 29, 2002
- --------------------------- (Principal Financial Officer)
David G. Zahka
Thomas M. Walsh /s/ Vice President - Finance March 29, 2002
- --------------------------- (Principal Accounting Officer)
Thomas M. Walsh
Edward B. Meyercord III /s/ President, Director and March 29, 2002
- --------------------------- Treasurer
Edward B. Meyercord, III
Mark S. Fowler /s/ Director March 29, 2002
- ---------------------------
Mark S. Fowler
Arthur J. Marks /s/ Director March 29, 2002
- ---------------------------
Arthur J. Marks
Ronald R. Thoma /s/ Director March 29, 2002
- ---------------------------
Ronald R. Thoma
16