SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
GlobeTel Communications 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)(4) 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:
GLOBETEL COMMUNICATIONS CORP.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 26, 2004
To the Stockholders of GlobeTel Communications Corp.:
NOTICE IS HEREBY GIVEN that an Annual Meeting of Stockholders (the
"Annual Meeting") of GlobeTel Communications Corp., a Delaware corporation (the
"Company"), will be held at Wyndham Hotel, 1870 Griffin Road, Dania Beach,
Florida 33004, on Thursday, August 26, 2004 at 6:00 p.m., E.S.T., for the
following purposes:
1. To elect 7 individuals to serve as members of the Company's
Board of Directors to hold office until the Company's annual
meeting of stockholders to be held in 2005 and until their
successors are duly elected and qualified;
2. To ratify the appointment of Dohan and Company, CPAs, PA as
independent auditors of the Company for the fiscal year ending
December 31, 2004; and
3. To transact such other business as may properly come before
the Annual Meeting and any adjournments or postponements
thereof.
All stockholders are cordially invited to attend; however, only
stockholders of record at the close of business on June 28, 2004, are entitled
to notice of and to vote at the Annual Meeting or any adjournments thereof.
The Board of Directors recommends that you vote FOR the Board's
nominees to serve as directors and FOR Proposal 2.
By Order of the Board of Directors
Timothy M. Huff
Chief Executive Officer and Director
July 22, 2004
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED RETURN
ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. STOCKHOLDERS
WHO EXECUTE A PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY
AND VOTE THEIR SHARES IN PERSON.
GLOBETEL COMMUNICATIONS CORP.
9050 Pines Blvd., Suite 110
Pembroke Pines, Florida 33024
------------------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
AUGUST 26, 2004
------------------------------------
INTRODUCTION
The accompanying proxy is solicited by the Board of Directors of
GlobeTel Communications Corp. (the "Company," "we", "us" and similar terms) to
be voted at the Annual Meeting of Stockholders to be held at the Wyndham Hotel,
1870 Griffin Road, Dania Beach, Florida 33004 on Thursday, August 26, 2004 at
6:00 p.m., E.S.T. (the "Annual Meeting"), and any adjournments thereof. When
such proxy is properly executed and returned, the shares it represents will be
voted at the meeting as directed. If no specifications are indicated, the shares
will be voted in accordance with the recommendation of the Board with respect to
each matter submitted to the Company's stockholders for approval. Abstentions
and broker non-votes will not be voted, but will be counted for determining the
presence of a quorum.
The cost of preparing and mailing the enclosed proxy materials, which
is estimated to be approximately $25,000, will be borne by the Company. The
Company may use the services of its officers and employees (who will receive no
additional compensation) to solicit proxies. In addition to the use of the
mails, proxies may be solicited by telephone, mailgram, facsimile, telegraph,
cable, email and personal interview. The Company intends to request banks and
brokers holding shares of the Company's common stock to forward copies of the
proxy materials to those persons for whom they hold shares and to request
authority for the execution of proxies. The Company will reimburse banks and
brokers for their out-of-pocket expenses. The Company may also retain the
services of a solicitation firm to aid in the solicitation of proxies. If it
does so, the Company will pay the fees and expenses of such firm.
A list of stockholders entitled to vote at the Annual Meeting will be
available for examination by any stockholder for a proper purpose during normal
business hours at the offices of the Company for a period of at least ten days
preceding the Annual Meeting.
VOTING AT THE ANNUAL MEETING
The shares entitled to vote at the Annual Meeting consist of shares of
the Company's common stock (the "Common Stock"), with each share entitling the
holder to one vote. At the close of business on June 28, 2004, the record date
for the Annual Meeting, there were issued and outstanding 773,261,419 shares of
the Company's common stock. This Proxy Statement and the accompanying form of
proxy are first being sent to the stockholders on or about July 22, 2004.
Each proxy that is properly signed and received prior to the Annual
Meeting will, unless revoked, be voted in accordance with the instructions on
such proxy. If no instruction is indicated, the shares will be voted FOR the
election of the nominees for director listed in this proxy statement; FOR
ratification of the appointment of Dohan and Company, CPAs, PA; and FOR the
approval of such other business that may properly come before the Annual Meeting
or any postponement or adjournment thereof. A stockholder who has given a proxy
may revoke such proxy at any time before it is voted at the Annual Meeting by
delivering a written notice of revocation or duly executed proxy bearing a later
date to the Secretary of the Company or by attending the meeting and voting in
person.
A quorum of stockholders is necessary to take action at the Annual
Meeting. A majority of the outstanding shares of the Company's common stock,
represented in person or by proxy, will constitute a quorum. Votes cast by proxy
or in person at the Annual Meeting will be tabulated by the inspector of
election appointed for the Annual Meeting. The inspector of election will
determine whether or not a quorum is present at the Annual Meeting. The
inspector of election will treat abstentions as shares of common stock that are
present and entitled to vote for purposes of determining the presence of a
quorum.
The seven (7) nominees for director shall be elected as directors of
the Company if they receive the affirmative vote of a majority of the
shareholders of common stock present in person or represented by proxy at the
Annual Meeting. The vote required for ratification of Dohan and Company, CPAs,
PA as our independent auditors for the fiscal year ending December 31, 2004, is
the affirmative vote of a majority of the shares of common stock present in
person or represented by proxy at the Annual Meeting. For purposes of
determining stockholder approval of such proposals, abstentions will be treated
as shares of common stock voted against adoption of such proposals.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding the beneficial ownership of shares of common stock as of June 28,
2004, by (i) each person known by the Company to be the owner of more than 5% of
the outstanding shares of Common Stock, (ii) each of the Company's directors,
(iii) each of the Company's executive officers, and (iv) all executive officers
and directors as a group. Unless otherwise indicated, each person has sole
investment and voting power with respect to all shares shown as beneficially
owned.
Unless otherwise indicated, the address of each beneficial owner is
9050 Pines Blvd, Suite 110, Pembroke Pines, Florida
33024.
Common Shares Beneficially Owned
Name of Beneficial Owner Number Percentage
Przemyslaw L. Kostro, Chairman 9,100,000 1.2%
Timothy M. Huff, CEO and Director 26,744,467 3.5%
Jerrold R. Hinton, PhD., Director 26,562,358(1) 3.4%
Mitchell A. Siegel, COO and Director 18,213,619 2.4%
Thomas Y. Jimenez, CFO 9,517,634 1.2%
Vivian Manevich, Controller 8,479,466 1.1%
Leigh Coleman, President and Director 500,000 0.0%
Michael Molen, Director Nominee 0
Kyle McMahan, Director Nominee 0
All executive officers and directors of the
Company as a group (seven persons,
excluding nominees) 99,117,544 12.7%
(1) The shares owned beneficially by Jerrold R. Hinton also include 50,000
shares owned of record by Higher Ground, a corporation controlled by Mr.
Hinton, which may be deemed beneficially owned by Mr. Hinton.
Proposal 1
ELECTION OF DIRECTORS
NOMINEES AND DIRECTORS
Seven directors will be elected at the Annual Meeting. The nominees for
director, if elected, will serve until the annual meeting of stockholders to be
held in 2005 and until his successor is duly elected and qualified. Our Bylaws
currently authorize a Board consisting of not less than one or more than
thirteen persons, and our Board currently provides for seven directors. These
provisions, together with provisions of our articles of incorporation and
by-laws, allow the Board to fill vacancies or increase its size, and may deter
or hinder a shareholder from removing incumbent directors and filling such
vacancies with its own nominees in order to gain control of the Board.
All nominees have consented to being named herein and have indicated
their intention to serve as directors of the Company, if elected. Unless
authority to do so is withheld, the persons named as proxies will vote the
shares represented by such proxies for the election of the named nominees. In
case any of the nominees become unavailable for election to the Board of
Directors, which is not anticipated, the persons named as proxies shall have
full discretion and authority to vote or refrain from voting for any other
nominees in accordance with their judgment. Vacancies on the Board may be filled
by the remaining director or directors, even though less than a quorum, for the
unexpired term of such vacant position.
The following persons have been nominated for election to the Board of
Directors:
Name Age Current Position
Przemyslaw L. Kostro 42 Chairman
Timothy M. Huff 38 Chief Executive
Officer & Director
Jerrold R. Hinton, PhD 62 Director
Leigh A. Coleman 55 President & Director
Mitchell A. Siegel 57 Chief Operating
Officer & Director
Michael Molen 47 Director Nominee
Kyle McMahan 46 Director Nominee
Business Experience
Przemyslaw L. Kostro was first elected to the Board of Directors in
November 2001. From November 2001 to April 2002, Mr. Kostro also served as the
chief executive officer of the Company before relinquishing the position to the
current chief executive officer. Over the past five years, Mr. Kostro has been
engaged in international business, and has been providing professional and
consulting services to several public and private entities. He also currently
serves as chairman of Wafao S.A., a Polish company and director of Caterham
Financial Management, a Malaysian company. Since November 2003, Mr. Kostro has
also been serving as a director of Consolidated Global Investments, Ltd.
(formerly known as Advantage Telecommunications, Ltd.), a publicly-held
Australian company and 71% owned subsidiary of the Company as of June 30, 2004.
Timothy M. Huff has served as chief executive officer and as a member of
the Board of Directors since 2002. From 1999 through 2001 Mr. Huff served as
president of Vista Net LLC, a VOIP carrier. Mr. Huff has over eighteen years
experience in international telecom business that included working with Sprint
and MCI International, where he was involved in the construction of MCI's first
international gateways. Since November 2003, Mr. Huff has also been serving as a
director of Consolidated Global Investments, Ltd. (formerly known as Advantage
Telecommunications, Ltd.), a publicly-held Australian company and 71% owned
subsidiary of the Company as of June 30, 2004.
Leigh Coleman has served as president of the Company since November
2003. Mr. Coleman also serves as Managing Director of Global Asia Pacific Pty
Ltd., an Australian company located in Melbourne Australia and has held that
position since July 2003. He was Managing Director of Tennyson Networks Limited,
a manufacturer of Smart Office Exchange, from 2001 to 2003 and served as Asian
Pacific director for Nobel Systems, an Atlanta-based call center and customer
contact company. From 1998 through 2000, Mr. Coleman was CEO of a private
company, Fusion International Software, a software consulting company. From 1989
to 1993, Mr. Coleman was CEO of Verisol USA, Inc., a subsidiary of the
international firm, Blydenstein Willink, NV, where he also served as Executive
Director. Since November 2003, Mr. Coleman has also been serving as CEO and a
director of Consolidated Global Investments, Ltd. (formerly known as Advantage
Telecommunications, Ltd.), a publicly-held Australian company, and is 71% owned
by GlobeTel as of June 30, 2004. Mr. Coleman holds a Masters in Business
Administration degree, and has lectured on Strategic Management at Curtin
University in Australia.
Jerrold R. Hinton, PhD., has served on the Board of Directors since
March 1995. He had previously served as the Company's chief executive officer
from 1995 to 2001. He also served as the Company's president from March 2002
through December 2003. Dr. Hinton, a graduate of Florida State University, holds
Bachelors, Masters and Doctorate degrees in management, engineering and real
estate. From 1992 to early 1995, prior to joining the Company, Dr. Hinton served
as an officer of United Biomedical, Inc., a private company.
Mitchell A. Siegel has served as chief operating officer and as a member
of the Board of Directors since May 2002. From 1996 through May 2002, he served
as a consultant to the Company and was instrumental in defining the Company's
role as a licensed telecommunications company. Mr. Siegel graduated from
American University, holding a Bachelors Degree in Business Administration and
has completed Masters Degree courses in finance at C.C.N.Y - Bernard Baruch
School of Finance.
Michael Molen has been nominated to serve on our Board of Directors.
Since 1995 he has served in various capacities for Sanswire Technologies, Inc.,
including chairman, chief executive officer and director. He currently serves as
chief executive officer of Sanswire Technologies, Inc. He has been nominated to
serve on the Company's Board of Directors in accordance with the terms of the
Company's asset purchase agreement with Sanswire Technologies, Inc.
Kyle McMahan has been nominated to serve on our Board of Directors. From
1989 to 2003, Mr. McMahan served as chief executive officer of Southern Mortgage
Reporting, Inc., a credit reporting agency. From April 2001 through September
2003 he served as chairman of INFO 1 Co., Inc., a company that organized,
planned and financed the startup of new businesses in the credit reporting
industry. Mr. McMahan has served as a board member of The Mortgage Bankers
Association of Georgia and The National Credit Reporting Association. He has
been nominated to serve on the Company's Board of Directors in accordance with
the terms of the Company's asset purchase agreement with Sanswire Technologies,
Inc.
Information Concerning the Board of Directors
During the year ended December 31, 2003, the Company's Board of
Directors held two (2) meetings. Each member of the Board participated in each
action of the Board. None of the members of the Company's Board of Directors
qualifies as being "independent."
COMMITTEES OF THE BOARD OF DIRECTORS
The Company did not have a formal audit committee during year ended
December 31, 2003. The Board of Directors, acting as an audit committee, met two
(2) times during year ended December 31, 2003 to review the professional
services provided by the Company's independent auditors, the independence of its
auditors from management, the Company's annual financial statements and its
system of internal accounting controls. The audit committee also reviews other
matters with respect to our accounting, auditing and financial reporting
practices and procedures as it may find appropriate or may be brought to its
attention. Messrs. Kostro, Huff, Siegel, Hinton and Coleman qualify as
"financial experts" as defined by the SEC. The Company has not adopted a formal
audit committee charter.
The Company did not have a formal compensation committee during fiscal year
ended December 31, 2003. The Board of Directors, acting as a compensation
committee, met two (2) times during the year ended December 31, 2003 to discuss
and deliberate on issues surrounding the terms and conditions of executive
officer compensation, including base salaries, bonuses, award of stock options
and reimbursement of certain business related costs and expenses. The Company
has not adopted a formal compensation committee charter.
The Company does not have a nominating committee. The Board of
Directors, acting as a nominating committee, met two (2) times during year ended
December 31, 2003, to recommend candidates who will be nominated as management's
slate of directors at the annual meeting of stockholders. The Company has not
adopted a formal nominating committee charter.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely upon a review of Forms 3, 4, and 5, and amendments
thereto, and reports, furnished to the Company for the fiscal year ended
December 31, 2003, by certain of the Company's directors, officers, or
stockholders beneficially owning more than 10% of any class of equity securities
of the Company, there were no failures to file any necessary forms under Section
16(a) of the Securities Exchange Act of 1934 during the most recent fiscal year.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to all
compensation paid or earned for services rendered to the Company during the last
fiscal year by our chief executive officer and each executive officer whose
aggregate annual compensation exceeded $100,000 and who were executive officers
of the Company at December 31, 2003 (all of the individuals named in the
following table are collectively defined as the "Named Executive Officers"). The
Company does not have a pension plan or a long-term incentive plan, has not
issued any restricted stock awards and has not granted any stock appreciation
rights as of this date. The Company has granted stock options. See "Option
Grants and Holdings" and "Employee Benefit Plan."
SUMMARY COMPENSATION TABLE
Securities All
Name and Other Annual Restricted Underlying LTIP Other
Principal Position Year Salary Bonus Compensation Stock Award Options/SAR Payouts Comp.
-----------------------------------------------------------------------------------------------------------------
($) ($) ($) ($) (#) ($) ($)
Timothy M. Huff 2003 175,000*(1) 0 0 0 0 0 0
CEO
Timothy M. Huff 2002 150,000* 0 0 0 0 0 0
CEO
Jerrold R. Hinton 2003 100,000* 0 0 0 0 0 0
President
Jerrold R. Hinton 2002 100,000* 0 0 0 0 0 0
President
Mitchell A. Siegel 2003 150,000* 0 0 0 0 0 0
COO
Mitchell A. Siegel 2002 25,000* 0 0 0 0 0 0
COO
Thomas Y. Jimenez 2003 150,000*(1) 0 0 0 0 0 0
CFO
Thomas Y. Jimenez 2002 125,000* 0 0 0 0 0 0
CFO
* In September 2003, the Board of Directors authorized the issuance of stock
options totaling 47,751,200 shares to the officers of the Company in return for
the forgiveness of $683,168 in accrued salaries and $33,100 in other accrued
expenses through December 31, 2002. The stock options were exercisable at the
lower of $.015 per share or 50% of the closing market price. In December 2003,
the board of directors authorized the issuance of stock options totaling
16,333,333 shares to the officers of the Company in return for the forgiveness
of $245,000 in accrued salaries through December 31, 2003. The stock options
were exercisable at the lower of $.015 per share or 50% of the closing market
price. On January 8, 2004, the officers exercised their rights to convert the
stock options into common stock at $.015 and as a result, the Company issued
64,084,533 shares of common stock in January 2004, in accordance with the stock
option agreements.
(1) The salary for Mr. Huff and Mr. Jimenez includes stock grants paid in lieu
of cash. Mr. Huff received 7,500,000 shares in return for the forgiveness of
$112,500 in accrued salaries and Mr. Jimenez received 1,166,667 shares in return
for the forgiveness of $17,500 in accrued salaries.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUE TABLE
The following table provides certain summary information concerning
stock options held as of December 31, 2003, by Named Executive Officers. The
value of unexercised in-the-money options at December 31, 2003, is based on the
value of our common shares on December 31, 2003 ($.03 per share). All options
have been exercised as of January 8, 2004.
Number of Securities Underlying Value of Unexercised in-the-money
Name Unexercised Options at December 31, 2003 Options at December 31, 2003
------- --------------------------------------------- ------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
Timothy M. Huff 8,944,467 0 $268,334 0
Jerrold R. Hinton 26,473,334 0 $794,200 0
Mitchell A. Siegel 12,777,800 0 $383,334 0
Thomas Y. Jimenez 8,611,134 0 $258,334 0
OPTION GRANTS IN LAST
FISCAL YEAR
The following table sets forth information regarding the grant of stock
options to the Named Executive Officers during the year ended December 31, 2003.
All options reflected below were subsequently exercised.
# of Securities % of Total Options
Underlying Granted to Employees
Name Options Last Fiscal Year Exercise Price Expiration Date
------------------ ---------- ------------------ --------------- ---------- ----
Timothy M. Huff 8,944,467 13.96% $.015 12/31/2006
Jerrold R. Hinton 26,473,334 41.31% $.015 12/31/2006
Mitchell A. Siegel 12,777,800 19.94% $.015 12/31/2006
Thomas Y. Jimenez 7,444,467 11.62% $.015 12/31/2006
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information as of December 31, 2003 about
the Company's common stock that may be issued upon the exercise of options
granted to employees or members of the Board of Directors under all of the
Company's existing equity compensation plans.
--------------------------------------------------------------------------------------------------------------------
Number of securities Weighted-average exercise Number of securities
to be issued upon price of outstanding remaining available
exercise of options for future issuance
Plan Category outstanding options under equity
---------------------------------------------------------------------------------------------------------------
Equity compensation plans approved by None - None
security holders
---------------------------------------------------------------------------------------------------------------
Equity compensation plans not
approved by security holders 64,084,533* $.015 None
---------------------------------------------------------------------------------------------------------------
Total None
---------------------------------------------------------------------------------------------------------------
* In September 2003, the Board of Directors authorized the issuance of stock
options totaling 47,751,200 shares to the officers of the Company in return for
the forgiveness of $683,168 in accrued salaries and $33,100 in other accrued
expenses through December 31, 2002. The stock options were exercisable at the
lower of $.015 per share or 50% of the closing market price. In December 2003,
the Board of Directors authorized the issuance of stock options totaling
16,333,333 shares to the officers of the Company in return for the forgiveness
of $245,000 in accrued salaries through December 31, 2003. The stock options
were exercisable at the lower of $.015 per share or 50% of the closing market
price. On January 8, 2004, the officers exercised their rights to convert the
stock options into common stock at $.015 and as a result, the Company issued
64,084,533 shares of common stock in January 2004, in accordance with the stock
option agreements.
EXECUTIVE EMPLOYMENT AGREEMENTS AND CONSULTING AGREEMENTS
Effective January 1, 2002, the Company entered into three-year
employment agreements with its key management. For the year 2002, the agreements
provide for annual compensation of $150,000 for its Chief Executive Officer
(CEO), $125,000 each for its Chief Financial Officer (CFO) and Chief Operating
Officer (COO) and $75,000 each for its Chief Administrative Officer (CAO) and
Vice President of Network Operations. In addition to the base compensation, the
employment agreements provide for payment of bonuses that at a minimum equal the
executives' base compensation. As of December 31, 2002, the executives all
agreed not to receive bonuses they were entitled to as per their respective
employment agreement. In 2003, the base compensation increased to $175,000 for
its CEO, $150,000 each for its CFO and COO, $90,000 each for its CAO and VP of
Network Operations. In 2004, the base compensation increases to $200,000 for its
CEO, $175,000 each for its CFO and COO, $120,000 for its CAO and $110,000 for
its Vice President of Network Operations. Bonuses for each year will also be
equal to the base salaries as a minimum, unless otherwise agreed to by the
executives.
From October 1, 1996 through December 31, 2003, the Company had an
employment agreement with its President, Jerrold Hinton, wherein the Company
agreed to pay compensation of $100,000 annually. In September 2003, Dr. Hinton
resigned effective December 31, 2003 but remained as a member of the board of
directors of the Company.
Pursuant to the above employment agreements, the Company recorded
accrued officers' salaries totaling $519,168 as of December 31, 2002.
In September 2003, the officers agreed to forego their accrued salaries
in exchange for stock options at $.015 per share or 50% of the market price as
of the exercise date. The officers subsequently exercised their stock options in
January 2004.
As of December 31, 2003, the Company recorded accrued officers' salaries
totaling $245,000, which the officers again agreed to forego their accrued
salaries in exchange for stock options at $.015 per share or 50% of the market
price as of the exercise date. The officers subsequently exercised their stock
options in January 2004.
DIRECTOR COMPENSATION
Directors are reimbursed for their reasonable expenses for attending
Board and Board committee meetings.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In January 2003, the Company received a $50,000 loan from Charterhouse
Consultancy Services, a Malaysian company and holder of shares of the Company'
stock. This loan payable, as well as the previous balance of $311,960, is
unsecured, non-interest bearing and provided for no formal repayment terms.
RELATED PARTY PAYABLES
As of December 31, 2003 and 2002, related party payables are as follows:
2003 2002
---- ----
GVoIP, a corporation owned by Timothy Huff,
then a consultant to the Company $ - $ 24,990
Jerrold R. Hinton, President & Director - 33,100
Mitchell A. Siegel, COO & Director 57,500 57,500
IPW, an Australian company, then in the
process of being acquired by the Company - 18,491
----------- ----------
Related party payables total $ 57,500 $ 134,081
=========== ==========
The December 31, 2003 balance represents a short-term loan by Mr.
Siegel, due on demand.
As of December 31, 2002, the Company was obligated under a convertible
promissory note payable to Gerard Harriman a stockholder and former director of
the Company for $55,000, principally representing advances to the Company. In
fiscal 2003, the Company issued 4,000,000 shares in complete settlement of the
balance due.
Approval of Proposal 1
The seven nominees for director that receive the affirmative vote of a
majority of the votes cast in person or by proxy at the Annual Meeting shall be
elected as directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION OF THE DIRECTOR NOMINEES.
11
COMPENSATION COMMITTEE REPORT
The report of the Compensation Committee of the Board with respect to
compensation in the six month transition period ended December 31, 2003 is as
follows:
COMPENSATION PHILOSOPHY
The overall policy of the Compensation Committee is to provide the
Company's executive officers and other key employees with competitive
compensation opportunities based upon their contribution to the financial
success of the Company and their personal performance. It is the Compensation
Committee's objective to have a substantial portion of each executive officer's
compensation contingent upon the Company's performance as well as upon the
officer's own level of performance.
COMPONENTS OF COMPENSATION
The principal components of executive officer compensation are
generally as follows:
o BASE SALARY. With respect to the Company's executive officers, their base
salary is fixed in accordance with the terms of their respective employment
agreements. See "Employment Agreements".
o STOCK OPTIONS AND GRANTS. Stock option grants and other stock-based
awards, which are designed to further align the interests of each executive
officer with those of the shareholders and to provide each officer with a
significant incentive to manage the Company from the perspective of an owner
with an equity stake in the Company's business.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162 (m) of the Internal Revenue Code of 1986, as amended,
generally provides that publicly held companies may not deduct compensation paid
to certain of their top executive officers to the extent such compensation
exceeds $1 million per officer in any year. However, pursuant to regulations
issued by the Treasury Department, certain limited exemptions to Section 162(m)
apply with respect to "qualified performance-based compensation." The Company is
currently monitoring the applicability of Section 162(m) to its ongoing
compensation arrangements. The Company does not expect that amounts of
compensation paid to its executive officers will fail to be deductible by reason
of Section 162 (m).
Board Of Directors
Sitting as Compensation Committee
AUDIT COMMITTEE REPORT
The Board of Directors, acting as the Audit Committee oversees the
Company's financial reporting process. Management has the primary responsibility
for the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Audit
Committee reviewed the financial statements in the Annual Report with management
including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments and the
clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee under generally accepted auditing standards. In
addition, the Audit Committee discussed with the independent accountants matters
required to be discussed by Statement of Auditing Standards No. 61
(Communication with Audit Committees).
The Audit Committee discussed with Company's independent auditors the
overall scope and plans for their respective audit. The Audit Committee meets
with the independent auditors to discuss the results of their examinations,
their evaluations of the Company's internal controls and the overall quality of
the Company's financial reporting.
The Company's independent accountants also provided to the Audit
Committee the written disclosure and the letter required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees),
and the Audit Committee discussed with the independent accountants the
accountants' independence.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board, and the Board has approved, that the audited
financial statements be included in the Annual Report on Form 10-KSB for the
year ended December 31, 2003, for filing with the Securities and Exchange
Commission. The Audit Committee and the Board have also recommended, subject to
shareholder approval, the selection of the Company's independent auditors.
Board of Directors
Sitting as an Audit Committee
Proposal 2
PROPOSAL TO RATIFY THE APPOINTMENT OF
DOHAN AND COMPANY, CPAS, PA AS INDEPENDENT AUDITORS OF THE COMPANY
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2004
At the Annual Meeting, stockholders will be requested to ratify the
Board of Directors' engagement of Dohan and Company, CPAs, PA for the fiscal
year ending December 31, 2004.
Fees to Auditors
Audit Fees: The aggregate fees, including expenses, billed by Dohan and
Company, CPAs, PA in connection with the audit of the Company's consolidated
financial statements for the most recent fiscal year and for the review of the
Company's financial information included in its Transition Report on Form 10-KSB
and its quarterly reports on Form 10-KSB during the year ended December 31, 2003
and year ended December 31, 2002 was $67,322 and $66,284, respectively.
Audit Related Fees: The aggregate fees, including expenses, billed by
Dohan and Company, CPAs, PA for services reasonably related to the audit for the
year ended December 31, 2003, and year ended December 31, 2002, were
approximately $60,000 and $58,000, respectively.
All Other Fees: The aggregate fees, including expenses, billed for all
other services rendered to the Company by Dohan and Company, CPAs, PA during
year ended December 31, 2003 and year ended December 31, 2002 were approximately
$7,322_ and $8,284, respectively. These non-audit fees relate to corporate
compliance and SEC compliance services performed for the Company.
General
It is not expected that representatives of Dohan and Company, CPAs, PA
will be present at the Annual Meeting. Although the Board of Directors of the
Company is submitting the appointment of Dohan and Company, CPAs, PA for
shareholder ratification it reserves the right to change the selection of Dohan
and Company, CPAs, PA as auditors, at any time during the fiscal year, if it
deems such change to be in the best interest of the Company, even after
shareholder ratification. If the appointment is not ratified, our Board will
consider whether it should select other independent auditors.
Approval of Proposal 2
The approval of Proposal 2 by the stockholders requires that the votes
cast favoring Proposal 2 exceed the votes cast opposing Proposal 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
DOHAN AND COMPANY, CPAS, PA AS INDEPENDENT AUDITORS OF THE COMPANY
FOR THE FISCAL YEAR ENDING DECEMBER 31, 2004
INTEREST OF CERTAIN PERSONS IN OPPOSITION
TO MATTERS TO BE ACTED UPON
Management is not aware of any substantial interest, direct or
indirect, by securities holdings or otherwise of any officer, director, nominee
for director, or associate of the foregoing persons in any matter to be acted
on, as described herein.
STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company which are intended to be
presented by such stockholders at the annual meeting of stockholders to be held
in 2005 must be received by the Company no later than November 30, 2004, in
order to have them included in the proxy statement and form of proxy relating to
that meeting.
OTHER MATTERS
Management is not aware of any other matters to be presented for action
at the Meeting. However, if any other matter is properly presented, it is the
intention of the persons named in the enclosed form of proxy to vote in
accordance with their best judgment on such matters.
ACCOMPANYING REPORTS
The Company's Annual Report on Form 10-KSB (without exhibits), for the
year ended December 31, 2003 and the Company's Quarterly Report on Form 10-QSB
(without exhibits), including unaudited consolidated financial statements as at
and for the three months ended March 31, 2004, accompany this proxy statement.
The exhibits are available without charge to stockholders upon request to Chief
Financial Officer, GlobeTel Communications Corp., 9050 Pines Road, Suite 110,
Pembroke Pines, Florida 33024.
Timothy M. Huff
Chief Executive Officer and Director
13
GLOBETEL COMMUNICATIONS CORP.
ANNUAL MEETING OF STOCKHOLDERS
AUGUST 26, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ASSOCIATED AUTOMOTIVE GROUP INCORPORATED
The undersigned hereby appoints Thomas Y. Jimenez as proxy with power
of substitution and hereby authorizes him to represent and to vote, as
designated below, all of the shares of common stock of the Company held of
record by the undersigned on June 28, 2004, at the Annual Meeting of
Stockholders to be held at the Wyndham Hotel, 1870 Griffin Road, Dania Beach,
Florida 33004, on Thursday, August 26, 2004 at 6:00 p.m., EST., and at all
adjournments thereof, with all powers the undersigned would possess if
personally present. In his or her discretion, the Proxy is authorized to vote
upon such other business as may properly come before the meeting.
1. Election of Directors
Nominees: Przemyslaw L. Kostro; Timothy M. Huff; Jerrold R. Hinton, PhD;
Leigh A. Coleman; Mitchell A. Siegel; Michael Molen; Kyle McMahan
[ ] FOR all nominees [ ] WITHHOLD AUTHORITY [ ] FOR all nominees,except as
noted below:
Nominee exception(s)
2. Proposal to ratify the Company's appointment of Dohan and Company,
CPAs, PA as independent auditors of the Company for the fiscal year
ending December 31, 2004.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL
MEETING AND PROXY STATEMENT FURNISHED IN CONNECTION THEREWITH.
DATED: _________________________________
(Signature)
---------------------------------
(Signature if jointly held)
---------------------------------
(Printed name(s))
Please sign exactly as name appears herein. When shares are held by Joint
Tenants, both should sign, and for signing as attorney, as executor, as
administrator, trustee or guardian, please give full title as such. If held by a
corporation, please sign in the full corporate name by the president or other
authorized officer. If held by a partnership, please sign in the partnership
name by an authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
IN THE ENCLOSED ENVELOPE. THANK YOU.