SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] Confidential, For Use of the Commission Only
(As Permitted by Rule 14a-6(e)(2))
[X ] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EUROWEB INTERNATIONAL CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
EUROWEB INTERNATIONAL CORP.
1122 Budapest, Varosmajor Utca 13, Hungary
(Tel) +36-1-22-44-000
TO THE STOCKHOLDERS OF EUROWEB INTERNATIONAL CORP.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Meeting")
of EuroWeb International Corp., a Delaware corporation (the "Company" or
"EWEB"), will be held at 2:00 P.M. (Budapest, Hungary time), on May 27, 2002 at
Hotel Mercure Buda, H-1013, Budapest, Krisztina krt. 41-43, Hungary, for the
following purposes:
1. To elect five (5) directors of the Company to serve until the 2004 Annual
Meeting of Stockholders or until their successors have been duly elected and
qualified;
2. To consider upon a proposal to amend and restate the Company's Certificate of
Incorporation to decrease the number of the Company's authorized shares of
common stock from 60,000,000 to 12,500,000 (the text of the Restated Certificate
of Incorporation of Euroweb International Corp., as amended by the proposed
amendment, is attached hereto as Appendix A to the accompanying Proxy
Statement);
3. To ratify the selection of KPMG Hungaria Kft. as our independent auditors for
the fiscal year ending December 31, 2003; and
4. To transact such other business as may properly come before the Meeting and
any adjournment or postponement thereof.
Only stockholders who own shares of our common stock at the close of business on
April 15, 2003 are entitled to notice of and to vote at the annual meeting. You
may vote your shares by:
o marking, signing and dating the enclosed proxy card as promptly as
possible and returning it in the enclosed postage-paid envelope;
o dialing the toll free number on the enclosed proxy card and
casting your vote in accordance with the instructions given to
you on the telephone; or
o casting your vote via the Internet at the website shown on the
enclosed proxy card.
You may also vote in person at the annual meeting, even if you use one of the
three options listed above.
We have enclosed with this Notice of Annual Meeting, a proxy statement, a form
of proxy and a copy of our annual report to stockholders. Our annual report is
not a part of this proxy statement.
By Order of the Board of Directors,
/s/Csaba Toro
-----------------------------------
Csaba Toro
Chairman of the Board
Budapest, Hungary
May 6, 2003
EUROWEB INTERNATIONAL CORP.
1122 Budapest, Varosmajor Utca 13, Hungary
(Tel) +36-1-22-44-000
(Fax) +36-1-22-44-100
PROXY STATEMENT FOR 2003 ANNUAL MEETING OF STOCKHOLDERS
The board of directors is soliciting proxies to be used at our May 27, 2003
annual meeting of stockholders. Please read and carefully consider the
information presented in this proxy statement and vote either by (i) completing,
dating, signing and returning the enclosed proxy in the enclosed postage-paid
envelope; (ii) by dialing the toll free number on the enclosed proxy card and
casting your vote; or (iii) visiting the website shown on the enclosed proxy
card and casting your vote.
This proxy statement, the form of proxy and our annual report will be mailed to
all stockholders on or about May 12, 2003. Our annual report is not a part of
this proxy statement.
INFORMATION ABOUT THE ANNUAL MEETING
WHEN IS THE ANNUAL MEETING?
May 27, 2002, 2:00 P.M. Budapest, Hungary time.
WHERE WILL THE ANNUAL MEETING BE HELD?
The meeting will be held at Hotel Mercure Buda, H-1013, Budapest, Krisztina krt.
41-43, Hungary.
WHAT ITEMS WILL BE VOTED UPON AT THE ANNUAL MEETING?
You will be voting on the following matters:
1. ELECTION OF DIRECTORS. To elect five directors to serve until the 2004 Annual
Meeting of stockholders or until their successors are duly elected and
qualified;
2. Amendment and Restatement of the Certificate of Incorporation TO DECREASE OF
THE AUTHORIZED SHARES OF COMMON STOCK OF THE COMPANY. To consider adopting the
Restated Certificate of Incorporation that would decrease the authorized number
of shares of common stock from 60,000,000 shares to 12,500,000 shares;
3. RATIFICATION OF AUDITORS. To ratify the selection of KPMG Hungaria Kft.
("KPMG") as independent auditors of the Company for the fiscal year ending
December 31, 2003; and
4. OTHER BUSINESS. To transact such other business as may properly come before
the annual meeting or any adjournment of the annual meeting. The Board of
Directors is not aware of any other business to come before the Meeting.
WHO CAN VOTE?
Only holders of record of our common stock at the close of business on April 15,
2003 will be entitled to notice of and to vote at the annual meeting and any
adjournments of the annual meeting. You are entitled to one vote for each share
of common stock held on that date. On April 15, 2003, there were 4,665,332
shares of our common stock outstanding and entitled to vote, which does not
include 175,490 treasury shares which are owned by the Company and are not
entitled to vote at the Stockholders Meeting.
KPN Telecom B.V., a Netherlands limited liability company ("KPN") is the
beneficial owner of 2,461,014 common stock shares, approximately 52% of the
outstanding voting power of the Company's shares. Accordingly, KPN has the power
to elect the Board's five nominees for director or to elect its own slate of
directors, to approve or disapprove the proposal to amend and restate the
Certificate of Incorporation, and to approve or disapprove the appointment of
KPMG Hungaria as auditors.
YOUR BOARD OF DIRECTORS HAS APPROVED EACH OF THE PROPOSALS SET FORTH HEREIN.
ACCORDINGLY, THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE NOMINEE
DIRECTORS, THE AMENDMENT AND RESTATEMENT OF THE CERTIFICATE OF INCORPORATION AND
THE RATIFICATION OF THE APPOINTMENT OF KPMG AS AUDITORS.
HOW DO I VOTE BY PROXY?
You may vote your shares by:
o VOTING BY MAIL. You may vote by mail by marking, signing and dating the
enclosed proxy card as promptly as possible and returning it in the enclosed
postage-paid envelope. Proxies should not be sent by the stockholder to the
Company, but to American Stock Transfer and Trust Company, the Company's
Registrar and Transfer Agent, at 59 Maiden Lane, New York, New York 10038. A
pre-addressed, postage-paid envelope is provided for this purpose.
o VOTING BY TELEPHONE. You may vote by telephone by dialing the toll free number
on the enclosed proxy card and casting your vote in accordance with the
instructions given to you on the telephone. Telephone voting is available 24
hours a day. If you vote by telephone you should not return your proxy card.
o VOTING VIA THE INTERNET. You may vote via the Internet by visiting the website
shown on the enclosed proxy card. Internet voting is also available 24 hours a
day. If you vote via the Internet you should not return your proxy card.
If you return your signed proxy card or vote by phone or the Internet before the
annual meeting, we will vote your shares as you direct. For the election of
directors, you may vote for (1) all of the nominees, (2) none of the nominees or
(3) all of the nominees except those you designate. For each other item of
business, you may vote FOR" or "AGAINST" or you may "ABSTAIN" from voting.
If you return your signed proxy card but do not specify how you want to vote
your shares, we will vote them:
o "FOR" the election of all of our nominees for directors;
o "FOR" the amendment and restatement of the Company's Certificate of
Incorporation to decrease the number of shares of common stock
authorized from 60,000,000 shares to 12,500,000 shares; and
o "FOR" the ratification of KPMG Hungaria Kft. as our independent
auditors.
If any matters other than those set forth above are properly brought before the
annual meeting, the individuals named in your proxy card may vote your shares in
accordance with their best judgment.
HOW DO I CHANGE OR REVOKE MY PROXY?
You can change or revoke your proxy at any time before it is voted at the annual
meeting by:
1. Submitting another proxy by mail, telephone or internet with a more recent
date than that of the proxy first given;
2. Sending written notice of revocation to American Stock Transfer and Trust
Company, the Company's Registrar and Transfer Agent, at 59 Maiden Lane, New
York, New York 10038; or
3. Attending the annual meeting and voting in person. If your shares are held in
the name of a bank, broker or other holder of record, you must obtain a proxy,
executed in your favor, from the holder of record to be able to vote at the
meeting.
WHAT CONSTITUTES A "QUORUM" FOR THE ANNUAL MEETING?
One-third of the outstanding shares of EWEB common stock entitled to vote at the
annual meeting, present or represented by proxy, constitutes a quorum. A quorum
is necessary to conduct business at the annual meeting. You will be considered
part of the quorum if you have voted by proxy. Abstentions, broker non-votes and
votes withheld from director nominees count as "shares present" at the annual
meeting for purposes of determining a quorum. However, abstentions and broker
non-votes do not count in the voting results. A broker non-vote occurs when a
broker or other nominee who holds shares for another does not vote on a
particular item because the broker or nominee does not have discretionary
authority for that item and has not received instructions from the owner of the
shares.
HOW MANY VOTES ARE REQUIRED?
o Directors nominees are elected by a plurality of the votes cast in person or
by proxy, provided that a quorum is present at the Meeting.
o The proposal to amend and restate the Company's Certificate of Incorporation
to decrease the number of authorized shares will require the affirmative vote of
at least a majority of the Company's outstanding shares of Common Stock. Thus,
any abstentions, "broker non-votes" (shares held by brokers or nominees as to
which they have no discretionary authority to vote on a particular matter and
have received no instructions from the beneficial owners or persons entitled to
vote thereon), or other limited proxies will have the effect of a vote against
amending the Company's Certificate of Incorporation.
o The ratification of the director's selection of KPMG Hungaria Kft. as the
Company's independent auditors will require an affirmative vote of the majority
of the votes cast in person or by proxy, provided that a quorum is present at
the annual meeting.
WHO PAYS FOR THE SOLICITATION OF PROXIES?
We will pay the cost of preparing, printing and mailing material in connection
with this solicitation of proxies. We will, upon request, reimburse brokerage
firms, banks and others for their reasonable out-of-pocket expenses in
forwarding proxy material to beneficial owners of stock or otherwise in
connection with this solicitation of proxies.
WHEN ARE STOCKHOLDER PROPOSALS FOR THE 2004 ANNUAL MEETING DUE?
Any stockholder proposals for the 2004 annual meeting must be received by us,
directed to the attention of the Company's secretary, Euroweb International
Corp., c/o Sichenzia Ross Friedman Ference LLP, 1065 Avenue of the Americas,
21st Floor, New York, New York 10018, no later than December 19, 2003. The use
of certified mail, return receipt requested, is advised. To be eligible for
inclusion, a proposal must comply with our bylaws, Rule 14a-8 and all other
applicable provisions of Regulation 14A under the Securities Exchange Act of
1934.
PROPOSAL 1: ELECTION OF DIRECTORS
(ITEM 1 ON THE PROXY CARD)
At the Meeting, five (5) directors are to be elected. Pursuant to the Company's
By-laws, all directors are elected to serve for the ensuing year and until their
respective successors are elected and qualified. Unless otherwise directed, the
persons named in the enclosed Proxy intend to cast all votes pursuant to proxies
received for the election of Messrs. Csaba Toro, Daniel Kwantes, Stewart Reich,
Gerald Yellin and Hans Lipman (collectively, the "Nominees"). Mr. Lipman and Mr.
Kwantes replace Mr. Roelant Lyppens and Mr. Rob van Vliet as the two KPN
representatives on the Board. If any of the Nominees becomes unavailable for any
reason, which event is not anticipated, the shares represented by the enclosed
proxy will be voted for such other person designated by the Board.
Vote required: Directors must be elected by a plurality of all votes cast at the
meeting. Votes withheld for any director will not be counted.
Voting by the Proxies: The Proxies will vote your shares in accordance with your
instructions. If you have not given specific instructions to the contrary, your
shares will be voted to approve the election of the nominees named in the Proxy
Statement. Although the Company knows of no reason why the nominees would not be
able to serve, if a nominee were not available for election, the Proxies would
vote your Common Stock to approve the election of any substitute nominee
proposed by the Board of Directors. The Board may also choose to reduce the
number of directors to be elected as permitted by our Bylaws.
General Information about the Nominees: The following information regarding the
Nominees, their occupations, employment history and directorships in certain
companies is as reported by the respective Nominees.
Csaba Toro, age 37, has been Chairman and CEO of the Company and has been with
the Company since September 1998 in various other positions. During 2001 and
2002 Mr. Toro held the positions of COO and CEO in PanTel Rt. He resigned as CEO
of PanTel as of March 2003. From 1997 to 1999, Mr. Toro was managing director of
the Company's Hungarian subsidiary. Prior thereto, since 1994, he was managing
director of ENET Kft., which was acquired by the Company in 1997.
Daniel Kwantes, age 42, has worked for 12 years within KPN in various financial
positions. Since the end of 1998, Mr. Kwantes has focused on KPN's international
operations. Mr. Kwantes graduated from the Free University of Amsterdam with a
business-economics degree. In 1999, he joined the Management Board of TelSource
NV, which is a KPN joint venture with Swisscom in Cesky Telecom, and he has
recently been appointed President of TelSource NV. Since 2002, he has also
served as Chairman of the Supervisory Board of Pantel Rt. in Hungary. In
addition, Mr. Kwantes is managing director of various other holding companies
owned by KPN.
Stewart Reich, age 58, was Chief Executive Officer and President of Golden
Telecom Inc., Russia's largest alternative voice and data service provider as
well as its largest ISP, since 1997. In September 1992, Mr Reich was employed as
Chief Financial Officer at UTEL (Ukraine Telecommunications), of which he was
appointed President in November 1992. Prior to that Mr Reich held various
positions at a number of subsidiaries of AT&T Corp. Mr. Reich has been a
director of the Company since 2002.
Gerald Yellin, age 68, has been the Vice-President of the Investment Banking
House of Bear Stearns & Company, Inc. since 1975. Mr. Yellin worked for Bear
Stearns for 28 years, and is a graduate from Temple University, PA. Mr. Yellin
has been a director of the Company since November 2001.
Hans Lipman, age 43, is a Dutch Registered Accountant and is financial manager
for Royal Dutch KPN's International Participations department since March 2001.
He is a member of the supervisory board of PanTel Rt, Hungary. From April 1994
Mr Lipman has been working as a financial manager and IT controller with KPN
Telecom. Prior to that he was auditor with PriceWaterhouseCoopers' predecessors,
since 1978.
Directors are elected annually and hold office until the next annual meeting of
the stockholders of the Company and until their successors are elected and
qualified. Officers are elected annually and serve at the discretion of the
Board of Directors.
ROLE OF THE BOARD
Pursuant to Delaware law, our business, property and affairs are managed under
the direction of our board of directors. The board has responsibility for
establishing broad corporate policies and for the overall performance and
direction of EWEB, but is not involved in day-to-day operations. Members of the
board keep informed of our business by participating in board and committee
meetings, by reviewing analyses and reports sent to them regularly, and through
discussions with our executive officers.
2002 BOARD MEETINGS
In 2002, the board met four (4) times. No director attended less than 75% of all
of the combined total meetings of the board and the committees on which they
served in 2002.
BOARD COMMITTEES
The Company's board of directors has two standing committees, an Audit Committee
and a Compensation Committee. The Company does not have a nominating or similar
committee. Please refer to Annexes 1 and 2 to this Proxy Statement for
additional information regarding the role, membership and activities of the
Company's Audit Committee and Compensation Committee during the year ended
December 31, 2002.
ELECTION OF DIRECTORS REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF A
PLURALITY OF THE SHARES OF COMMON STOCK REPRESENTED AT THE ANNUAL MEETING.
SHARES OF COMMON STOCK REPRESENTED BY PROXY CARDS RETURNED TO US WILL BE VOTED
FOR THE NOMINEES LISTED ABOVE UNLESS YOU SPECIFY OTHERWISE. A MAJORITY OF THE
BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE ELECTION OF
DIRECTORS. MR. VAN VLIET HAS WITHHELD HIS VOTE WITH RESPECT TO THE ELECTION OF
THE DIRECTORS.
PROPOSAL 2: To consider and vote upon a proposal to amend and restate the
Company's Certificate of Incorporation To decrease the number of authorized
shares of EuroWeb International Corp.'s Common Stock from 60,000,000 to
12,500,000
(ITEM 2 ON THE PROXY CARD)
On April 3, 2003, the Board of Directors unanimously adopted a
resolution approving, and recommending to the Company's Stockholders for their
approval, of the amendment and restatement of the Certificate of Incorporation
that would decrease the number of authorized shares of Common Stock from
60,000,000 to 12,500,000 shares. The text of the Restated Certificate of
Incorporation, as amended by this proposal is attached hereto as Appendix A
hereto and the description thereof set forth below is qualified in its entirety
by reference to such text. The proposed amended and restated Certificate of
Incorporation would replace the existing Certificate of Incorporation in its
entirety.
The purpose of the proposed resolution of the Board of Directors is to
reduce its Delaware Annual Franchise Tax, which is in part based upon the number
of authorized shares, and which amounted to approximately $60,000 in 2002. By
reducing the Company's number of authorized shares, the Company will reduce its
Delaware Franchise Tax to under $15,000 in the future.
As of April 15, 2003, the Company had a total of 4,840,822 shares of
Common Stock issued and outstanding. The Company has also reserved an aggregate
of 179,000 shares to cover outstanding Management Options, Stock Option Plan and
outstanding Warrants.
Since the Company does not contemplate to make new acquisitions
involving any issuance of additional shares of Common Stock in the foreseeable
future, the Board of Directors believes that the 12,500,000 authorized shares
would be more than adequate for any future needs of the Company, and that the
reduction is in the best interests of the Company and its Stockholders.
In the case the Company would need to increase its number of authorized
shares in the future, the Company can amend the Restated Certificate of
Incorporation by proposing an increase to the shareholders and the Company will
state the reasons for doing so. The shareholders will then have the opportunity
to consider and to vote on the proposal for an increase in the number of
authorized shares.
The Board of Directors recommends that stockholders vote "FOR" approval
of the proposal to amend AND RESTATE the Company's Certificate of Incorporation
to DEcrease the number of authorized shares of the Company's Common STOCK from
60,000,000 to 12,500,000.
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(ITEM 3 ON THE PROXY CARD)
Upon the recommendation of the Audit Committee, the Board of Directors has
appointed the firm of KPMG Hungaria Kft. as independent auditors of the Company
for the year ending December 31, 2003, subject to ratification of the
appointment by the Company's stockholders. A representative of KPMG Hungaria
Kft. is expected to attend the annual meeting to respond to appropriate
questions and will have an opportunity to make a statement if he or she so
desires.
Additional information regarding the independence of KPMG Hungaria Kft. and the
amount of audit and other fees paid by the Company to KPMG Hungaria Kft. are
disclosed in Annex 1.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF KPMG HUNGARIA KFT. AS AUDITORS OF THE COMPANY FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2003.
BENEFICIAL OWNERSHIP OF EWEB COMMON STOCK OF PRINCIPAL
STOCKHOLDERS, DIRECTORS AND MANAGEMENT
Shares
Name and Address Beneficially Owned (1) Percent Owned (1)
-------------------------------------------------- ---------------------------- ----------------------------
KPN Telecom B.V. (4) 2,461,014 52.75%
Maanplein 5
The Hague, The Netherlands
Csaba Toro (3)(5)(6) 87,000(2) 1.86%
1122 Budapest
Varosmajor utca 13
Hungary
Hans Lipman (3)(6) 0 0
KPN Telecom B.V.
Maanplein 5
The Hague, The Netherlands
0 0
Rob van Vliet (3)(5)(6)
KPN Telecom B.V.
Maanplein 5
The Hague, The Netherlands
Gerald Yellin (6) 0 0
500 E. 83rd Street
New York, NY 10028
Stewart Reich (6) 0 0
18 Dorset Lane,
Bedminister, NJ 07921
Daniel Kwantes(7) 0 0
KPN Telecom B.V.
Maanplein 5
The Hague, The Netherlands
All Officers, Directors and nominees as a 87,000 1.86%
Group (6 Persons)
(1) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares indicated. For purposes of this table,
a person or group of persons is deemed to have "beneficial ownership"
of any shares which such person has the right to acquire within 60 days
after April 1, 2003. For purposes of computing the percentage of
outstanding shares held by each person or group of persons named above
on April 1, 2003 any security which such person or group of persons has
the right to acquire within 60 days after such date is deemed to be
outstanding for the purpose of computing the percentage ownership for
such person or persons, but is not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person.
(2) Mr. Toro owns, directly or indirectly, 1.86% of the issued and
outstanding shares of the Company represented by options to purchase
87,000 shares.
(3) Does not include shares reported to be beneficially owned by KPN
Telecom B.V. Messrs. van Vliet, Lipman amd Kwantes are employees of KPN
Telecom B.V. Until March 1, 2003, Mr. Toro was an employee of Pantel
Rt, an indirect subsidiary of Royal KPN N.V.
(4) KPN Telecom B.V. is a subsidiary of Royal KPN N.V.
(5) An officer of the Company.
(6) A director of the Company.
(7) Mr. Kwantes has been nominated as a director of the Company.
The foregoing table is based upon 4,665,332 shares of common stock outstanding
as of April 1, 2003.
SECTION 16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than 10 percent of
the Company's Common Stock, to file with the SEC the initial reports of
ownership and reports of changes in ownership of common stock. Officers,
directors and greater than 10 percent stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.
Specific due dates for such reports have been established by the Commission and
the Company is required to disclose in this Proxy Statement any failure to file
reports by such dates during fiscal 2002. Based solely on its review of the
copies of such reports received by it, or written representations from certain
reporting persons that no Forms 5 were required for such persons, the Company
believes that during the fiscal year ended December 31, 2002, there was no
failure to comply with Section 16(a) filing requirements applicable to its
officers, directors and ten percent stockholders.
POLICY WITH RESPECT TO SECTION 162(m)
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
provides that, unless an appropriate exemption applies, a tax deduction for the
Company for compensation of certain executive officers named in the Summary
Compensation Table will not be allowed to the extent such compensation in any
taxable year exceeds $1 million. As no executive officer of the Company received
compensation during 2002 approaching $1 million, and the Company does not
believe that any executive officer's compensation is likely to exceed $1 million
in 2003, the Company has not developed an executive compensation policy with
respect to qualifying compensation paid to its executive officers for
deductibility under Section 162(m) of the Code.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and long term
compensation of the Company's Chief Executive Officer and Chief Financial
Officer, the latter being the only executive officers of the Company whose
annual salary and bonus exceeds $100,000, during the Company's 2000, 2001 and
2002 fiscal years:
ANNUAL COMPENSATION LONG-TERM COMPENSATION
Restricted Number of
Bonus and Stock Award(s) Securities
Name and Year Ended Other Annual Underlying
Principal Position December 31, Salary ($) Salary ($) ($) Options/SARs (#) All Other Compensation ($)
------------------ ------------ ---------- ------------- -------------- ---------------- --------------------------
Csaba Toro 2002 $96,000 -- -- -- --
CEO and Chairman 2001 $96,000 -- -- -- --
2000 $96,000 -- -- 4,000 --
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
There were no grants of Stock Options/SAR made to the named Executives during
the fiscal year ended December 31, 2002.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION/SAR VALUES
------------------------ ---------------------- ----------------------- ----------------------- ------------------------
Number of securities Value of the
underlying unexercised in the
unexercised money options/SARs at
options/SARs at FY-end ($)*
FY-end (#)
Name Shares acquired on Value realized ($) Exercisbale/Unexercisable
exercise (#) Exercisbale/Unexercisable
------------------------ ---------------------- ----------------------- ----------------------- ------------------------
Csaba Toro, Chairman None None 87,000 $0.00
and CEO
------------------------ ---------------------- ----------------------- ----------------------- ------------------------
* Fair market value of underlying securities (calculated by subtracting the
exercise price of the options from the closing price of the Company's Common
Stock quoted on the Nasdaq as of December 31, 2002), which was $1.73 per share.
None of Mr. Toro's options are presently in the money.
EMPLOYMENT AND MANAGEMENT AGREEMENTS
Employment agreements with Mr. Frank Cohen and Robert Genova, former executive
officer and directors of the Company, were terminated in the second quarter of
2002 and their total compensation for the period from June 2002 to December 31,
2005 was settled. At the same time, Mr. Robert Genova and Mr. Frank Cohen
forfeited all of their outstanding options in the Company. Mr. Toro was
appointed as the CEO and Chairman in May 2002. Prior to May 2002, Mr. Toro
served as the Chief Operating Officer of the Company. There is no other officer,
whose yearly compensation exceeded $100,000.
The Company has no pension or profit sharing plan or other contingent forms of
remuneration with any officer, director, employee or consultant.
DIRECTOR COMPENSATION
Directors who are also officers of the Company are not separately compensated
for their services as a director.
Directors who are not officers receive cash compensation for their services:
$2,000 at the time of agreeing to become a Director; $2,000 for each Board
Meeting attended either in person or by telephone; and $1,000 for each Audit
Committee Meeting attended either in person or by telephone. Non-employee
directors are reimbursed for their expenses incurred in connection with
attending meetings of the Board or any committee on which they serve and are
eligible to receive awards under the Company's 1993 Stock Option Plan (described
below). No stock option awards were made to non-employee directors as of April
11, 2003.
STOCK OPTION PLAN
The Company's 1993 Stock Option Plan (the "Plan") permits the grant of options
to employees of the Company, including officers and directors, who are serving
in such capacities. An aggregate of 134,000 shares of Common Stock are
authorized for issuance under the Plan. At December 31, 2002, 44,500 options
were available under the Plan. The Plan provides that qualified and
non-qualified options may be granted to officers, directors, employees and
consultants to the Company for the purpose of providing an incentive to those
persons to work for the Company. No options were granted to any officers,
directors or employees of the Company during the year ended December 31, 2002.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 1999, the Company loaned Mr. Toro $150,000 for the purpose of
purchasing an apartment condominium in Budapest. The loan bears interest at the
rate of 11 1/2% per annum and is secured both by Mr. Toro 's employment contract
and by a lien on the property. Mr. Toro repaid the loan in full in 2001.
Management believes that the transaction with Mr. Toro was made on terms no less
favorable to the Company than those available from unaffiliated parties. It is
intended that any future transactions with officers, directors and affiliates of
the Company will be made on terms no less favorable to the Company than those
available from unaffiliated parties.
ANNUAL REPORT ON FORM 10-KSB
The Company will provide upon request and without charge to each stockholder
receiving this Proxy Statement a copy of the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 2002, including the financial
statements and financial statement schedule information included therein, as
filed with the SEC.
OTHER BUSINESS
The Board of Directors is not aware of any matter other than the matters
described above to be presented for action at the Meeting. However, if any other
proper items of business should come before the Meeting, it is the intention of
the individuals named on your proxy card as the proxy holders to vote in
accordance with their best judgment on such matters.
By Order of the Board of Directors
/s/Csaba Toro
----------------------
Csaba Toro
Chairman of the Board
Dated: May 6, 2003
Budapest, Hungary
ANNEX 1
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Membership and role of the Audit Committee
The Audit Committee of the board of directors reviews the internal accounting
procedures of the company and consults with and reviews the services provided by
our independent accountants. During 2002, the audit committee consisted of
Messrs. Gerald Yellin, Stewart Reich and Rob van Vliet. The Audit Committee held
three (3) meetings in 2002. The Audit Committee will be reconstituted following
the Meeting and will include at least a majority of Directors who are
"independent" for purposes of the National Association of Securities Dealers'
listing standards.
As at December 31, 2002 a majority of the members of the Audit Committee
(Messrs. Yellin and Reich) were "independent" for purposes of the National
Association of Securities Dealers' listing standards. The Audit Committee
operates under a written charter adopted by the Board of Directors which is
included in the Company's Proxy Statement dated April 18, 2001.
The Audit Committee reviews the Company's financial reporting process on behalf
of the Board of Directors. Management has the primary responsibility for the
financial statements and the reporting process, including the system of internal
controls. The independent auditors are responsible for performing an independent
audit of the Company's consolidated financial statements in accordance with
generally accepted accounting principles and to issue a report thereon. The
Committee monitors these processes.
Review of the Company's audited financial statements for the fiscal year
ended December 31, 2002
In this context, the Committee met and held discussions with management and the
independent auditors. Management represented to the Committee that the Company's
consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States, and the Committee reviewed
and discussed the consolidated financial statements with management and the
independent auditors. The Committee also discussed with the independent auditors
the matters required to be discussed by Statement on Auditing Standards No. 61
(Codification of Statements on Auditing Standards, AU 380), as amended.
In addition, the Committee discussed with the independent auditors the auditors'
independence from the Company and its management, and the independent auditors
provided to the Committee the written disclosures and letter required by the
Independence Standards Board Standard No. 1 (Independence Discussions With Audit
Committees).
The Committee discussed with the Company's internal and independent auditors the
overall scope and plans for their respective audits. The Committee met with the
internal and independent auditors, with and without management present, to
discuss the results of their examinations, the evaluation of the Company's
internal controls, and the overall quality of the Company's financial reporting.
Based on the reviews and discussions referred to above, the Committee
recommended to the Board of Directors, and the Board has approved, that the
audited financial statements be included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 2002, for filing with the Securities and
Exchange Commission.
Audit Fees
For the fiscal year ended December 31, 2002, the aggregate fees billed by KPMG
Hungaria for the audit of the Company's financial statements for such fiscal
year and for the reviews of the Company's interim financial statements was
$90,500.
Financial Information Systems Design and Implementation Fees
For the fiscal year ended December 31, 2002 KPMG Hungaria rendered no
information technology services to the Company relating to financial systems
design and implementation, and no fees were billed by KPMG Hungaria to the
Company for any such services.
All other fees
The Company paid KPMG Hungaria, its principal accountant, $36,000 for all other
services for fiscal 2002, which was related primarily to non-audit and quarterly
review services for the year for taxation and other assurance-related issues.
Auditor Independence
The Audit Committee has considered whether, and has determined that, the
provision of services described under "All Other Fees" was compatible with
maintaining the independence of KPMG Hungaria as the Company's principal
accountants.
MEMBERS OF THE AUDIT COMMITTEE
/s/Rob van Vliet
-----------------
Rob van Vliet, Chairman
Independent Members:
/s/Gerald Yellin /s/Stewart Reich
----------------- ------------------
Gerald Yellin Stewart Reich
ANNEX 2
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Compensation Committee of the board of directors i) reviews and recommends
to the board the compensation and benefits of our executive officers; ii)
administers our stock option plans and employee stock purchase plan; and iii)
establishes and reviews general policies relating to compensation and employee
benefits.
In 2002, the compensation committee consisted of Messrs. Rob van Vliet, Csaba
Toro and Roelant Lyppens. In December 2002, Mr. Lyppens resigned as a member of
the compensation committee. No interlocking relationships exist between the
board of directors or compensation committee and the board of directors or
compensation committee of any other company. During the past fiscal year the
Compensation Committee had two (2) meetings and decided that the base salaries
of the Company's executive officers would remain the same for the year 2002. The
Compensation Committee further decided that there will be no incentive bonuses
or stock options for executive officers for the year ended December 31, 2002.
MEMBERS OF THE COMPENSATION COMMITTEE
/s/ Rob van Vliet /s/ Csaba Toro
----------------- ------------------
Rob van Vliet, Chairman Csaba Toro
EXHIBIT A
RESTATED
CERTIFICATE OF INCORPORATION
OF
EUROWEB INTERNATIONAL CORP.
Under Section 245 of the General Corporation Law
The undersigned, Chairman of the Board of Directors of the corporation,
does hereby certify as follows:
FIRST: The name of the corporation is:
EUROWEB INTERNATIONAL CORP.
SECOND: The date it filed its Certificate of Incorporation with the
Secretary of State is October 27, 1992.
The name under which the corporation was originally incorporated is:
HUNGARIAN INFRASTRUCTURE DEVELOPMENT CORP.
THIRD: The Certificate of Incorporation is hereby amended and restated.
FOURTH: The text of the Certificate of Incorporation, as amended
heretofore, is hereby restated and further amended to read as herein set forth
in full:
"Certificate of Incorporation
Of
EUROWEB INTERNATIONAL CORP.
FIRST: The name of the corporation is:
EUROWEB INTERNATIONAL CORP.
SECOND: The address of the initial registered and principal office of this
corporation in this state is c/o United Corporate Services, Inc., 15 East North
Street, in the City of Dover, County of Kent, State of Delaware 19901 and the
name of the registered agent at said address is United Corporate Services, Inc.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the corporation laws of
the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
corporation is authorized to issue is seventeen million five hundred thousand
(17,500,000), consisting of five million (5,000,000) shares of preferred stock,
par value one-tenth of one cent ($.001) per share (the"Preferred Stock"), and
twelve million five hundred thousand (12,500,000) shares of common stock, par
value one-tenth of one cent ($.001) per share (the"Common Stock").
Each issued and outstanding share of Common Stock shall entitle the holder
of record thereof to one vote.
The Preferred Stock may be issued in one or more series as may be
determined from time to time by the Board of Directors. All shares of any one
series of Preferred Stock will be identical except as to the date of issue and
the date from which dividends on shares of the series issued on different dates
will cumulate, if cumulative. Authority is hereby expressly granted to the Board
of Directors to authorize the issuance of one or more series of Preferred Stock,
and to fix by resolution or resolutions providing for the issue of each such
series the voting powers, the designations, preferences, and the relative,
participating, optional or mandatory rights to redemption, conversion or
exchange or other special qualifications, limitations or restrictions of such
series, and the number of shares in each series, to the full extent now or
hereafter permitted by law.
FIFTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the corporation, and for further
definition, limitation and regulation of the powers of the corporation and of
its directors and stockholders:
(1) The number of directors of the corporation shall be such as from time
to time shall be fixed by, or in the manner provided in the by-laws. Election of
directors need not be by ballot unless the By-laws so provide.
(2) The Board of Directors shall have power without the assent or vote of
the stockholders:
(a) To make, alter, amend, change, add to or repeal the
By-laws of the corporation; to fix and vary the amount of capital to be
reserved for any proper purpose; to authorize and cause to be executed
mortgages and liens upon all or any part of the property of the
corporation; to determine the use and disposition of any surplus or net
profits; and to fix the times for the declaration and payment of
dividends.
(b)To determine from time to time whether, and to what times
and places, and under what conditions the accounts and books of the
corporation (other than the stock ledger) or any of them, shall be open
to the inspection of the stockholders.
(3) The directors in their discretion may submit any contract or act for
approval or ratification at any annual meeting of the stockholders, at any
meeting of the stockholders called for the purpose of considering any such act
or contract, or through a written consent in lieu of a meeting in accordance
with the requirements of the General Corporation Law of Delaware as amended from
time to time, and any contract or act that shall be so approved or be so
ratified by the vote of the holders of a majority of the stock of the
corporation which is represented in person or by proxy at such meeting, (or by
written consent whether received directly or through a proxy) and entitled to
vote thereon (provided that a lawful quorum of stockholders be there represented
in person or by proxy) shall be as valid and as binding upon the corporation and
upon all the stockholders as though it had been approved, ratified, or consented
to by every stockholder of the corporation, whether or not the contract or act
would otherwise be open to legal attack because of directors' interest, or for
any other reason.
(4) In addition to the powers and authorities herein before or by statute
expressly conferred upon them, the directors are hereby empowered to exercise
all such powers and do all such acts and things as may be exercised or done by
the corporation; subject, nevertheless, to the provisions of the statutes of
Delaware, of this certificate, and to any by-laws from time to time made by the
stockholders; provided, however, that no by-laws so made shall invalidate any
prior act of the directors which would have been valid if such by-law had not
been made.
SIXTH: No director shall be liable to the corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except with respect to (1) a breach of the director's duty of loyalty to the
corporation or its stockholders, (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3)
liability under Section 174 of the Delaware General Corporation Law or (4) a
transaction from which the director derived an improper personal benefit, it
being the intention of the foregoing provision to eliminate the liability of the
corporation's directors to the corporation or its stockholders to the fullest
extent permitted by Section 102 (b)(7) of the Delaware General Corporation Law,
as amended from time to time. The corporation shall indemnify to the fullest
extent permitted by Sections 102 (b)(7) and 145 of the Delaware General
Corporation Law, as amended from time to time, each person that such Sections
grant the corporation the power to indemnify.
SEVENTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware, may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section 279 Title 8 of the Delaware
Code order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation , as the
case may be, agree to any compromise or arrangement and to any reorganization of
this corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and /or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
EIGHTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation in the
manner now or hereafter prescribed by law, and all rights and powers conferred
herein on stockholders, directors and officers are subject to this reserved
power."
NINTH: The restated certificate was adopted by the Board of Directors and
authorized by the affirmative vote of the holders of a majority of the
outstanding shares entitled to vote thereon at a meeting of shareholders
pursuant to Section 222 and 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, I hereunto have signed my name this ___ day of
________, 2003.
EUROWEB INTERNATIONAL CORP.
/s/ CSABA TORO
CSABA TORO
Chairman of the Board
PROXY
EUROWEB INTERNATIONAL CORP.
ANNUAL MEETING OF STOCKHOLDERS - TO BE HELD
MAY 27, 2003
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all prior proxies, hereby appoints CSABA Toro and ROB
VAN VLIET and each of them, with full power of substitution in each, as proxies
for the undersigned, to represent the undersigned and to vote all the shares of
Common Stock of the Company which the undersigned would be entitled to vote, as
fully as the undersigned could vote and act if personally present, at the Annual
Meeting of Stockholders (the "Meeting") to be held on May 27, 2003, at 2:00
P.M., local time, at Hotel Mercure Buda, H-1013, Budapest, Krisztina krt. 41-43,
Hungary, or at any adjournments or postponements thereof.
Should the undersigned be present and elect to vote at the Meeting or at any
adjournments or postponements thereof, and after notification to the Secretary
of the Company at the Meeting of the stockholder's decision to terminate this
proxy, then the power of such attorneys or proxies shall be deemed terminated
and of no further force and effect. This proxy may also be revoked by filing a
written notice of revocation with the Secretary of the Company or by duly
executing a proxy bearing a later date.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES FOR DIRECTOR
AND EACH OF THE LISTED PROPOSALS.
Proposal(1) The election as directors of all nominees listed below to serve
until the 2004 Annual Meeting of Stockholders or until their successors have
been duly elected and qualified (except as marked to the contrary).
Nominees:
01) Csaba Toro 02) Hans Lipman 03) Daniel Kwantes
04) Gerald Yellin 05) Stewart P. Reich
FOR ALL [___] WITHHOLD ALL [___] FOR ALL EXCEPT [___]
To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below.
Proposal (2) Amending and Restating the Company's Certificate of Incorporation
to decrease the Company's authorized shares of common stock from 60,000,000
shares to 12,500,000 shares.
FOR|_| AGAINST|_| ABSTAIN|_|
Proposal (3)Ratification of the appointment of KPMG HUNGARIA Kft. as auditors of
the Company for the fiscal year ending December 31, 2003.
FOR|_| AGAINST|_| ABSTAIN|_|
The shares represented by this proxy will be voted as directed by the
stockholder, but if no instructions are specified, this proxy will be voted for
the election of the Board nominees and for proposals (2) and (3). If any other
business is presented at the Meeting, this proxy will be voted by those named in
this proxy in their best judgment. At the present time, the Board of Directors
knows of no other business to be presented at the Meeting.
The undersigned acknowledges receipt from the Company, prior to the execution of
this proxy, of the Notice of Annual Meeting and accompanying Proxy Statement
relating to the Meeting and an Annual Report to Stockholders for fiscal year
ended December 31, 2002.
NOTE: PLEASE MARK, DATE AND SIGN AS YOUR NAME(S) APPEAR(S) HEREON AND
RETURN IN THE ENCLOSED ENVELOPE. IF ACTING AS AN EXECUTORS, ADMINISTRATORS,
TRUSTEES, GUARDIANS, ETC., YOU SHOULD SO INDICATE WHEN SIGNING. IF THE SIGNER IS
CORPORATION, PLEASE SIGN THE FULL CORPORATE NAME, BY DULY AUTHORIZED OFFICER. IF
SHARES ARE HELD JOINTLY, EACH SHAREHOLDER SHOULD SIGN.
Signature (Please sign within the box) [ ________ ] DATE: _______, 2003
Signature (Joint owners) [_________ ] DATE: _______, 2003