THEGLOBE COM INC - DEF 14A - 20010507 - PROPOSAL_1
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees for Directors
The Board of Directors proposes the following seven nominees for election
as directors at the Annual Meeting. The directors will hold office from election
until the next Annual Meeting, or until their successors are elected and
qualified.
Nominee Age Position held with theglobe Director Since
------- --- --------------------------- --------------
Michael S. Egan 61 Chairman 1997
Todd V. Krizelman 27 Director, Secretary 1995
Stephan J. Paternot 27 Director 1995
Edward A. Cespedes 35 Director 1997
Rosalie V. Arthur 42 Director 1997
Robert M. Halperin 72 Director 1995
MICHAEL S. EGAN. Michael Egan has served as theglobe.com's Chairman since 1997.
He is also Chairman and CEO of ANC Rental Corporation (Nasdaq: ANCX), which owns
and operates car rental businesses under the Alamo and National brand names. As
well, Mr. Egan is Chairman of Certified Vacations, a privately held company
specializing in designing, marketing and delivering vacation packages. Mr. Egan
is a member of the Board of Directors of Boca Resorts, Inc. (NYSE: RST)
(formerly Florida Panthers Holdings, Inc.) and a member of the Board of
Directors of the Horatio Alger Association. Mr. Egan has spent over 20 years in
the rent-a-car business. He began with Alamo in 1973, became an owner in 1979,
and became Chairman and majority owner from January 1986 until November 1996
when he sold the company to AutoNation. In 2000, AutoNation spun off the rental
division and Mr. Egan was named Chairman. Prior to acquiring Alamo, he held
various administration positions at Yale University and taught at the University
of Massachusetts at Amherst. Mr. Egan is a graduate of Cornell University where
he received his Bachelor's degree in Hotel Administration.
TODD V. KRIZELMAN. Todd Krizelman co-founded theglobe.com in fall 1994. From
1994-2000, Mr. Krizelman served as the Co-Chief Executive Officer of the
Company. He completed 6 rounds of both private and public financing for
theglobe.com totaling nearly $200 million and led the Company through its
initial and secondary public offerings. Today he remains actively involved in
the Company, serving as Vice Chairman of the Board of Directors. Mr. Krizelman
also serves as a director and advisor to several independent private companies.
Mr. Krizelman holds a Bachelor's degree from Cornell University.
STEPHAN J. PATERNOT. Stephan Paternot co-founded theglobe.com in fall 1994 and
is currently the Company's Vice Chairman. From 1994-2000, he served as the
co-Chief Executive Officer of the Company. Mr. Paternot completed 6 rounds of
both private and public financing for theglobe.com totaling nearly $200 million
and led the company through its initial and secondary public offerings. Mr.
Paternot holds a Bachelor's degree in Computer Science and Business from Cornell
University.
EDWARD A. CESPEDES. Edward Cespedes has served as a director of theglobe.com
since 1997. He currently serves as the President and member of the Board of
Directors of drkoop.com (Nasdaq: KOOP). Additionally, since May 2000, Mr.
Cespedes has served as Vice Chairman and Managing Director of Prime Ventures,
L.L.C., and as a member of Prime Ventures' Management Committee. From 1996 to
2000, Mr. Cespedes was a Managing Director of Dancing Bear Investments.
Concurrent with his position at Dancing Bear Investments, from 1998 to 2000, Mr.
Cespedes also served as Vice President for corporate
3
development for theglobe.com where he had primary responsibility for all
mergers, acquisitions, and capital markets activities. In 1996, prior to joining
Dancing Bear Investments, Mr. Cespedes was the director of corporate finance for
Alamo Rent-A-Car. From 1988 to 1996, Mr. Cespedes worked in the Investment
Banking Division of J.P. Morgan and Company, where he most recently focused on
mergers and acquisitions. In addition to his positions with Prime, Mr. Cespedes
currently serves as a member of the Board of Directors of Utopiad, Inc., and
other Prime Ventures portfolio companies. Mr. Cespedes is also the Chairman and
founder of the Columbia University Hamilton Associates. Mr. Cespedes received a
Bachelor's degree in International Relations from Columbia University.
ROSALIE V. ARTHUR. Rosalie Arthur has served as a director of theglobe.com since
August of 1997. Ms. Arthur is a Senior Managing Director and Vice President of
Mergers and Acquisitions of Dancing Bear Investments. She currently serves on
the Board of Directors of Dancing Bear Investments and several of its affiliated
companies. She also served on the Board of Directors of Alamo Rent-A-Car and
affiliated entities and Nantucket Nectars. Prior to joining Dancing Bear
Investments, she served as Chief of Staff and Financial Counselor to the
Chairman of Alamo from 1986 to 1996, when the Company was sold. Ms. Arthur was
the Manager of Financial Reporting at Sensormatic Electronics Corporation from
1984 to 1986 and worked in the audit department of KPMG Peat Marwick from 1980
to 1984. Ms. Arthur received her Bachelor of Science in Accounting from the
University of South Florida. She is a Certified Public Accountant.
ROBERT M. HALPERIN. Robert Halperin has served as a director of theglobe.com
since 1995. Mr. Halperin is also a past Vice Chairman of the Board of Directors
of Raychem Corporation. He joined Raychem a few months after it was founded in
1957 and retired from his position as President and Chief Operating Officer in
1990. Since 1990 he has been an independent investor and an adviser to Greylock
Management, a venture capital firm. He is Chairman of the Board of Avid
Technology, Inc., and a member of the Board of Directors of Vitria Technology,
Inc. In addition, he serves on the boards of several private companies. He is a
member of the Board of Directors of the Associates of The Harvard Business
School and the Harvard Business School Publishing Company. He is a Life Trustee
of The University of Chicago and on the Board of Directors of ARCH Development
Corp. He has been a member of the Stanford University Hospital Board of
Directors since 1986 and is currently Vice Chairman of the Board of Directors of
Stanford Hospital and Clinics. In 1949, Mr. Halperin received a Bachelor of
Philosophy degree from The University of Chicago and a Bachelor of Mechanical
Engineering degree from Cornell University. He also received a Master of
Business Administration degree from Harvard in 1952.
4
Board Meetings and Committees of the Board
The Board of Directors met eight times in 2000. No incumbent director
attended less than 75% of the total number of all meetings of the Board and any
committees of the Board on which he or she served, if any, during 2000.
The functions and responsibilities of the standing committees of the Board
of Directors are described below.
Audit Committee. The Audit Committee, which was formed in July 1998,
reviews, acts on and reports to the Board of Directors with respect to various
auditing and accounting matters, including the selection of our independent
auditors, the scope of the annual audits, fees to be paid to the auditors, the
performance of our auditors and our accounting practices and internal controls.
The current members of the Audit Committee are Mr. Halperin and Ms. Arthur, both
of whom are non-employee directors. The Audit Committee held four meetings in
2000.
Compensation Committee. The Compensation Committee, which met three times
in 2000, establishes salaries, incentives and other forms of compensation for
officers and other employees of theglobe. A subcommittee of the Compensation
Committee consisting of Messrs. Halperin and Duques has been delegated authority
to approve option grants under all of our outstanding stock based incentive
plans. The current members of the Compensation Committee are Messrs. Halperin
and Duques and Ms. Arthur.
Nominating Committee. The Nominating Committee, which was formed in July
1998, makes recommendations to the Board for director nominees. The current
members of the Nominating Committee are Messrs. Egan, Krizelman and Paternot.
The Nominating Committee meet one time in fiscal year 2000 and agreed upon the
appointment of Richard Sarnoff.
Director Compensation
Directors who are also our employees receive no compensation for serving on
our Board or committees. We reimburse non-employee directors for all travel and
other expenses incurred in connection with attending Board and committee
meetings. Non-employee directors are also eligible to receive automatic stock
option grants under our 1998 Stock Option Plan, as amended and restated.
Each director who becomes an eligible non-employee director for the first
time receives an initial grant of options to acquire 25,000 shares of our common
stock. In addition, each eligible non-employee director will receive an annual
grant of options to acquire 7,500 shares of our common stock on the first
business day following each annual meeting of stockholders that occurs while the
1998 Stock Option Plan or 2000 Stock Option Plan is in effect. These stock
options will be granted with per share exercise prices equal to the fair market
value of our common stock as of the date of grant.
Indemnification
The Delaware General Corporation Law provides that a corporation may
indemnify its directors and officers for certain liabilities. We indemnify our
directors and officers to the fullest extent permitted by law so that they will
serve free from undue concern that they will not be indemnified. This is
required under our By-Laws, and we have also signed agreements with each of
those individuals contractually obligating us to provide this indemnification to
them.
At the present time, there is no pending litigation or proceeding involving
a director, officer, employee or other agent of theglobe in which
indemnification would be required or permitted, and we are not aware of any
threatened litigation or proceeding which may result in a claim for
indemnification by us.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE SIX
NOMINEES AS DIRECTORS OF THEGLOBE
5
We will vote your shares as you specify on the enclosed proxy card. If you
do not specify how you want your shares voted, we will vote them FOR the
election of all the nominees listed above. If unforeseen circumstances (such as
death or disability) make it necessary for the Board of Directors to substitute
another person for any of the nominees, we will vote your shares FOR that other
person. The Board of Directors does not presently anticipate that any nominee
will be unable to serve.
Other Executive Officers
The names of, and certain information regarding, our executive officers who
are not directors, are set forth below. The executive officers serve at the
pleasure of the Board and the Chief Executive Officer.
CHARLES M. PECK. Mr. Peck was appointed Chief Executive Officer of theglobe.com
in August 2000. He has had a long career in senior executive positions, with
companies in transition, including start-ups, turnarounds, integration efforts
and explosive growth companies. Prior to joining theglobe.com, from 1995 - 2000
Peck was Senior Vice President of the American Institute of Certified Public
Accountants (AICPA), with P&L chief operating responsibilities for over $150
million in revenue and over 250 of its 650 employees. He brought the AICPA's
training unit to profitability, achieving improved operating margins,
spearheading strategic acquisitions and product-line sales, and initiating
wide-reaching process improvement and planning programs, while forming over 40
strategic distribution alliances. From 1991-1995, Peck headed up marketing and
sales for two major business units of Simon & Schuster, a division of Viacom,
and was responsible for integrating companies into a single-source provider of
Prentice Hall Legal & Financial Services until its spin-off. He then took on a
turnaround at a training unit of Simon & Schuster. From 1987 - 1990 Peck served
as Vice President of Sales at Telerate Systems Inc., a Dow Jones & Co. online
financial information provider, achieving year-over-year revenue growth of over
40%. He was a Senior Vice President of Marketing & Sales for Standard & Poors
from 1985 - 1987, and was Vice President of Market Development and Planning for
the New York Stock Exchange's New York Futures Exchange from 1982 - 1985. Early
in his career, Peck was a founding officer of New York Air, and held
senior-level marketing, sales and training positions for Blue Chip Marketers,
the Pepsi-Cola Co., Xerox and Levi-Strauss, and served as a consultant with Booz
Allen and Hamilton. Peck serves on the Advisory Board of the Make-a-Wish
Foundation of Metro New York, Inc. and has served on numerous other boards. He
holds a Bachelor's Degree in Economics and MBA in Finance from the State
University of New York at Albany, and has served in the U.S. Marine Corps.
DEAN S. DANIELS. Mr. Daniels joined theglobe.com as Chief Operating Officer
in 1998. Prior to joining theglobe.com, he served as Vice President and General
Manager of CBS New Media, responsible for all CBS Television Network activity on
the Internet--including CBS's pioneering Eye on the Web, the first network
website to go online and the development of CBS.com. Prior to that, Daniels was
the Director of Interactive Services at CBS News. From 1994 to 1996, Daniels
served as Director of Affiliate News Services at CBS NEWSPATH, and from 1992 to
1994, he was Director of News of WCBS-TV, a CBS-owned television station in New
York. Earlier in his career, Daniels held various positions at WCBS-TV,
including executive producer, and was the recipient of four Emmy Awards.
STEPHANIE HAUGE. Ms. Hauge joined theglobe.com in January 2001 as its Chief
Financial Officer. Prior to joining theglobe.com, Ms. Hauge spent the past 20
years in various senior financial positions at AT&T, most recently serving as
Financial Vice President, AT&T Corporate and Shared Services Functions,
Accounting and Finance, from 1995 to 2000. In this role, she directed financial
controllership and decision support for several key divisions of the company,
including AT&T Global Real Estate Division and Supplier Management Division,
human resources, strategy, executive, public relations and finance. She also led
key financial operations functions such as payroll operations and treasury
services. Hauge was also instrumental in the post-merger integration of several
of TCI and AT&T's financial and operational functions and, during her tenure
with AT&T she spearheaded various significant cost-cutting initiatives including
her involvement in a financial re-engineering initiative that ultimately
resulted in a $300 million cost reduction over a three year period. Prior to her
tenure at AT&T, Hauge was Assistant Controller for a division of National
Medical Care (now Fresenius Medical Care). Prior to that, she spent
6
six years at Warner Lambert Company (now Pfizer), her last position as Financial
Reporting Supervisor and Controller of General Ledger in the company's Health
Care Group. Hauge earned a bachelor of science degree in accounting, magna cum
laude, and an MBA in finance from Seton Hall University. She is a member of Beta
Gamma Signa, the FWA of NY, the Morris Essex Chapter of IMA, and serves on the
Board of Trustees for Caldwell College, Caldwell, NJ and chairs their finance
committee.
VANCE HUNTLEY. Mr. Huntley joined theglobe.com in 1995 as Director of
Technology and was promoted in 2000 to Vice President and Chief Technology
Officer, responsible for the Company's product development and distribution
initiatives, in addition to managing its hosting operation and other technology
infrastructure. During his tenure at theglobe.com, Huntley has presided over the
Company's hosting operations and has contributed to software development
efforts. In 1997, he successfully restructured the Company's software
development unit positioning it for future growth, while also focusing on
building the Company's technology operations group. Huntley led the development
of systems and network infrastructure to handle the Company's rapid growth in
web traffic. He also led migration of acquired properties including WebJump and
the Attitude Network. Most recently, Huntley consolidated the Company's product
development and technology operations groups. From 1991 to 1994, Huntley held
software development positions with Delta-Epsilon Software and the Cornell
Institute of Social Economic Research. In 1994, he developed a Transmission
Electron Microscopy simulation for the Cornell Materials Science Center while
participating in the Applied & Engineering Physics program at Cornell
University. In 1993, Huntley also served as a chip fabrication analyst National
Semiconductor, and in 1990 he wrote simulation software at the Lawrence
Livermore National Laboratory Supercomputing Center.
DAVID STONEHILL. Mr. Stonehill joined theglobe.com in January 2000 as
Director of Business Affairs and has served as our Vice President, Legal
&Business Affairs since December 2000. Prior to joining theglobe.com, Mr.
Stonehill gained experience in a broad range of corporate transactions including
mergers and acquisitions, venture capital, credit facilities, and securities,
while serving as a Corporate Associate at Richards & O'Neil, LLP, from 1996
through 1999. His responsibilities included general corporate law issues and
drafting and negotiating agreements. While working toward his Juris Doctor
degree, in 1994 Stonehill served as Law Clerk for the Honorable Helen E.
Freedman in the Supreme Court of the State of New York. In 1996, Stonehill
earned a Juris Doctor degree from the University of Virginia School of Law,
where he also served as a board member of the Virginia Environmental Law
Journal. He earned a Bachelor of Arts degree, with magna cum laude distinction,
from Brown University in 1991.
PROPOSAL NO. 2
AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION TO DECREASE
THE NUMBER OF REQUIRED DIRECTORS
Section 1 of Article V of the Company's Fourth Amended and Restated
Certificate of Incorporation (the "Charter") currently provides that the
authorized number of directors of the Company shall be nine. The Board of
Directors has adopted a resolution proposing that the Charter be amended to
decrease the authorized number of required directors to be not less than five
nor more than nine, subject to stockholder approval of the amendment. In
accordance with the proposed amendment, there are eight nominees for election to
our Board at this year's annual meeting. At the annual meeting, stockholders
will be asked to consider and vote on this proposed charter amendment.
The Board of Directors believes that this proposed amendment to the Charter
will provide the Board of Directors more flexibility in searching for
well-qualified candidates without having to fill an empty seat immediately in
order to be in compliance with the Charter. It further provides the Company with
greater flexibility to manage the size of the Board and to meet the evolving
needs of the Company in the context of ongoing industry and market changes.
Accordingly, it is proposed that Section 1 of Article V of the Charter of the
Company be amended in its entirety to read as follows:
7
1. The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board. The number of directors
which shall constitute the whole Board shall be not less than five (5)
nor more than nine (9).
The affirmative vote of the holders of a majority of all the outstanding
shares of Common Stock of the Company is required to approve the amendment to
the Charter.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
AMENDMENT TO THE CHARTER.
We will vote your shares as you specify on the enclosed proxy card. If you
do not specify how you want your shares voted, we will vote them FOR the
amendment to the Charter.
8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of April 18, 2001 by (i) each person who owns
beneficially more than 5% of our common stock, (ii) each of our directors, (iii)
each of the officers named in the table under the heading "Executive
Compensation--Summary Compensation Table," and (iv) all directors and executive
officers as a group. A total of 30,356,780 shares of theglobe's common stock
were issued and outstanding on April 18, 2001.
The amounts and percentage of common stock beneficially owned are reported
on the basis of regulations of the Securities and Exchange Commission ("SEC")
governing the determination of beneficial ownership of securities. Under the
rules of the SEC, a person is deemed to be a "beneficial owner" of a security if
that person has or shares "voting power," which includes the power to vote or to
direct the voting of such security, or "investment power," which includes the
power to dispose of or to direct the disposition of such security. A person is
also deemed to be a beneficial owner of any securities of which that person has
a right to acquire beneficial ownership within 60 days. Under these rules, more
than one person may be deemed a beneficial owner of the same securities and a
person may be deemed to be a beneficial owner of securities as to which such
person has no economic interest. Unless otherwise indicated below, the address
of each person named in the table below is in care of theglobe.com, inc., 120
Broadway, 22nd floor, New York, New York 10271.
Shares Beneficially
Owned
-------------------
Directors, Named Executive Officers and 5% Stockholders Number Percent
------------------------------------------------------- -------- ---------
Dancing Bear Investments, Inc.(1) ................... 9,469,606 27.6%
Michael S. Egan(2) .................................. 9,844,606 28.4%
Todd V. Krizelman(3) ................................ 1,715,363 5.5%
Stephan J. Paternot(4) .............................. 1,650,501 5.3%
Dean S. Daniels(5) .................................. 182,996 *
Edward A. Cespedes(6) ............................... 112,063 *
Francis T. Joyce(7) ................................. 142,956 *
Rosalie V. Arthur(8) ................................ 88,127 *
Henry C. Duques(9) .................................. 39,375 *
Robert M. Halperin(10) .............................. 245,238 *
H. Wayne Huizenga(11) ............................... 43,125 *
Charles M. Peck(12) ................................. 343,929 1.1%
Vance Huntley(13) ................................... 61,450 *
David Stonehill(14) ................................. 8,436 *
Stephanie Hauge(15) ................................. 14,063 *
All directors and executive officers as a group
(14 people)(16) .................................... 14,083,857 38.4%
----------------------
* Represents less than one percent (1%)
(1) Includes: (1) 3,546,018 shares of our common stock issuable upon exercise
of warrants at approximately $1.45 per share and (2) 400,000 shares of our
common stock issuable upon exercise of warrants held by persons other than
Dancing Bear Investments but as to which Dancing Bear Investments has
voting power upon exercise under a stockholders' agreement. Dancing Bear
Investments' mailing address is 333 East Las Olas Blvd., Ft. Lauderdale, FL
33301.
(2) Includes the following shares that Mr. Egan is deemed to beneficially own
as the controlling investor of Dancing Bear Investments: (1) 3,546,018
shares of our common stock issuable upon exercise of warrants at
approximately $1.45 per share, and (2) 400,000 shares of our common stock
issuable
9
upon exercise of warrants held by persons other than Mr. Egan but as to
which Mr. Egan has voting power upon exercise under a stockholders'
agreement. Also includes (1) 317,500 shares of our common stock issuable
upon exercise of options that are currently exercisable, (2) 56,000 shares
of our common stock held by certain trusts for the benefit of Mr. Egan's
children, as to which he disclaims beneficial ownership, and (3) 14,000
shares of our common stock held by Mr. Egan's wife, as to which he
disclaims beneficial ownership. Excludes 12,500 shares of our common stock
issuable upon exercise of options that will not be exercisable within 60
days of April 18, 2001.
(3) Includes (1) 680,451 shares of our common stock issuable upon exercise of
options that are currently exercisable and (2) 200,000 shares of our common
stock issuable upon exercise of warrants that are currently exercisable.
(4) Includes (1) 680,451 shares of our common stock issuable upon exercise of
options that are currently exercisable and (2) 200,000 shares of our common
stock issuable upon exercise of warrants that are currently exercisable.
(5) Includes 192,842 shares of common stock issuable upon exercise of options
that are currently exercisable. Excludes 224,658 shares of our common stock
issuable upon exercise of options that will not be exercisable within 60
days of April 18, 2001.
(6) Includes 113,155 shares of our common stock issuable upon exercise of
options that are currently exercisable. Excludes 36,845 shares of our
common stock issuable upon exercise of options that will not be exercisable
within 60 days of April 18, 2001.
(7) Includes 138,737 shares of common stock issuable upon exercise of options
that are currently exercisable.
(8) Includes 80,000 shares of our common stock issuable upon exercise of
options that are currently exercisable. Excludes (1) 20,000 shares of our
common stock issuable upon exercise of options that will not be exercisable
within 60 days of April 18, 2001 and (2) shares held by Dancing Bear
Investments, Inc. for which Ms. Arthur serves as an officer and director,
and as to which Ms. Arthur disclaims beneficial ownership.
(9) Includes 41,250 shares of our common stock issuable upon exercise of
options that are currently exercisable. Excludes 16,250 shares of our
common stock issuable upon exercise of options that will not be exercisable
within 60 days of April 18, 2001.
(10) Includes 111,458 shares of our common stock issuable upon exercise of
options that are currently exercisable. Excludes 25,626 shares of our
common stock issuable upon exercise of options that will not be exercisable
within 60 days of April 18, 2001. Excludes 180,360 shares of our common
stock owned by Mr. Halperin's children for which he has a power of attorney
but as to which he disclaims beneficial ownership.
(11) Includes 45,000 shares of our common stock issuable upon exercise of
options that are currently exercisable or will be excercisable within 60
days of April 18, 2001. Excludes 20,000 shares of our common stock issuable
upon exercise of options that are not exercisable within 60 days of April
18, 2001.
(12) Includes 343,929 shares of common stock issuable upon exercise of options
that are currently exercisable. Excludes 906,071 shares of our common stock
issuable upon exercise of options that will not be exercisable within 60
days of April 18, 2001.
(13) Includes 61,450 shares of common stock issuable upon exercise of options
that are currently exercisable. Excludes 67,635 shares of our common stock
issuable upon exercise of options that will not be exercisable within 60
days of April 18, 2001.
(14) Includes 8,436 shares of common stock issuable upon exercise of options
that are currently exercisable. Excludes 56,244 shares of our common stock
issuable upon exercise of options that will not be exercisable within 60
days of April 18, 2001.
(15) Includes 14,063 shares of common stock issuable upon exercise of options
that are currently exercisable. Excludes 60,937 shares of our common stock
issuable upon exercise of options that will not be exercisable within 60
days of April 18, 2001.
(16) See footnotes 2 through 11 and 13 through 15 above.
10
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for services
in all capacities awarded to, earned by or paid by us to our Chairman, Co-Vice
Chairmen, Chief Executive Officer and our four other most highly compensated
executive officers during the last three fiscal years (collectively, the "Named
Executive Officers"):
Summary Compensation Table
Long-Term
Compensation (1)
------------------
Annual Compensation Number of
--------------------------------------- Securities
Name and Underlying All Other
Principal Position Year Salary ($) Bonus ($) Options (#) Compensation ($)
------------------ ---- ---------- --------- ----------- ----------------
Michael S. Egan, .............. 2000 -- -- 10,000 --
Chairman (2)
1999 -- -- 10,000 --
1998 -- -- 320,000 --
Todd V. Krizelman, ............ 2000 $ 145,245 -- 20,000 --
Vice Chairman (3)
1999 $ 152,458 -- 20,000 --
1998 $ 140,554 -- 300,500 --
200,000 (4)
Stephan J. Paternot, .......... 2000 $ 145,245 -- 20,000 --
Vice Chairman (3)
1999 $ 152,458 -- 20,000 --
1998 $ 140,554 -- 300,500 --
200,000 (4)
Charles M. Peck, .............. 2000 $ 130,000 -- 1,250,000 --
Chief Executive Officer (5)
Dean S. Daniels, .............. 2000 $ 250,000 $ 50,000 162,500 --
President and Chief Operating
Officer (6)
1999 $ 250,000 $ 50,000 62,500
1998 $ 80,731 $ 16,667 225,000 --
Francis T. Joyce, ............. 2000 $ 200,000 $ 50,000 27,187 --
Chief Financial Officer (7)
1999 $ 200,000 $ 50,000 45,500
1998 $ 80,769 $ 20,833 225,000 --
Vance Huntley, ................ 2000 $ 163,236 $ 16,081 84,085 --
Chief Technology Officer (8)
David Stonehill, .............. 2000 $ 101,959 -- 70,680 --
Vice President, Legal Affairs (9)
(1) Included in long-term compensation for 2000 are 394,452 options granted
during the year at varying exercise prices to the named executive officers
as well as 1,250,000 options granted to Mr.
11
Peck at an exercise price of $1.94 per share. Details of these grants may
be found in the table of Options Grants in 2000 on page 13. Included in
long-term compensation for 1999 are 10,000, 20,000, 20,000, 32,500 and
22,500 options granted in February 2000 at an exercise price of $6.69 per
share related to bonuses earned in 1999 for Messrs. Egan, Krizelman,
Paternot, Daniels and Joyce, respectively. Included in long-term
compensation for 1998 are 70,000, 100,000 and 100,000 options granted in
January 1999 at an exercise price of $15.75 per share related to bonuses
earned in 1998 for Messrs. Egan, Krizelman and Paternot, respectively.
(2) Mr. Egan became an executive officer in July 1998. We did not pay Mr. Egan
a base salary in 2000, 1999, or 1998.
(3) In August 2000, Messrs. Krizelman and Paternot resigned from their
positions as Co-Chief Executive Officers of the globe, effective upon the
hiring of Charles M. Peck, the new Chief Executive Officer.
(4) Represents the transfer of 200,000 Series E Warrants from Dancing Bear
Investments, Inc. at an exercise price of approximately $1.45 per share.
(5) Mr. Peck became Chief Executive Officer in August, 2000.
(6) Mr. Daniels became an officer in August 1998. He was appointed President in
January 2000.
(7) Mr. Joyce became an officer in July 1998.
(8) Mr. Huntley became an officer in October 2000.
(9) Mr. Stonehill became an officer in December 2000.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND 2000 YEAR END
OPTION VALUES
The following table sets forth for each of the executives listed in the Summary
Compensation table (a) the number of options exercised during 2000, (b) the
total number of unexercised options for common stock (exercisable and
unexercisable) held at December 31, 2000, and (c) the value of those options
that were in-the-money on December 31, 2000 based on the difference between the
closing price of our common stock on December 31, 2000 and the exercise price of
the options on that date.
Number of Securities Underlying Value of Unexercised In-the-
Unexercised Stock Options at Fiscal Money Stock Options at Fiscal
Year-End (#) Year-End(1)
------------------------------------ -------------------------------
Shares
Acquired on Value
Name Exercise(#) Realized Exercisable Un-exercisable Exercisable Un-exercisable
---- ----------- -------- ----------- -------------- ----------- --------------
Michael S. Egan ...... -- -- 317,500 12,500 -- --
Todd V. Krizelman..... -- -- 660,451 -- 13,500
Stephan J. Paternot... -- -- 660,451 -- 13,500
Charles M. Peck ...... -- -- 149,643 1,100,357 -- --
Dean S. Daniels ...... -- -- 182,396 235,104 -- --
Francis T. Joyce ..... -- -- 138,737 -- -- --
Vance Huntley ........ -- -- 57,700 71,385 6,775 --
David Stonehill ...... -- -- 936 63,744 -- --
(1) Value represents closing price of our common stock on December 31, 2000
less the exercise price of the stock option, multiplied by the number of
shares exercisable or unexercisable, as applicable.
12
OPTION GRANTS IN 2000
Percent of Potential Realizable Value at
Total Assumed rates of Stock Price
Options Exercise Appreciation for Option Term
Number of Securities Granted to or Base (2)
Underlying Employees Price ----------------------------
Name Options Granted (1) in 1999 ($/share) Expiration Date 5% 10%
---- ------------------- ------- --------- --------------- -- ---
Michael S. Egan...... 10,000 (3) 0.33% $ 6.69 February 2011 $ 108,973 $ 173,521
Todd V. Krizelman.... 20,000 (3) 0.67% $ 6.69 February 2011 $ 217,946 $ 347,043
Stephan J. Paternot.. 20,000 (3) 0.67% $ 6.69 February 2011 $ 217,946 $ 347,043
Charles M. Peck...... 1,250,000(4) 41.86% $ 1.94 July 2011 $ 3,817,722 $ 6,079,084
Dean S. Daniels...... 30,000 (3) 1.00% $ 6.69 February 2011 $ 25,899 $ 41,241
32,500 (5) 1.09% $ 6.69 November 2011 $ 354,162 $ 563,944
Francis T. Joyce..... 22,500 (3) 0.75% $ 6.69 February 2011 $ 245,098 $ 390,277
Vance Huntley........ 30,000(5) 1.00% $ 0.53 November 2011 $ 25,899 $ 41,241
David Stonehill...... 60,000(5) 2.00% $ 0.53 November 2011 $ 51,799 $ 82,481
1. In the event of a change in control of the globe, all of these options
become immediately and fully exercisable.
2. These amounts represent assumed rates of appreciation in conformity with
SEC disclosure rules. Actual gains, if any, on stock option exercises are
dependent on future performance of our common stock.
3. These options were granted in February 2001 as bonuses in respect of
services performed in fiscal year 2000. These options become vested and
exercisable quarterly over 4 years.
4. These options were granted in accordance with the Chief Executive Officer
Employment Agreement. 224,643 of these options have vested. 250,000 of
these options will vest on the earlier to occur of (i) the ten year
anniversary of the date of grant, (ii) the date when our common stock has
traded at $20 or above for a continuous 30-day period, and (iii) the
occurrence of a change of control of the Company. The remaining 775,357
options will vest at the rate of 59,643 on July 14, 2001, and 59,643 every
three months thereafter
5. These options were granted in November 2001 as retention bonuses. These
options become vested and exercisable quarterly over 4 years.
Employment Agreements
Chief Executive Officer Employment Agreement. On July 14, 2000, we entered
into an employment agreement with our Chief Executive Officer ("CEO"), Charles
M. Peck. The Employment Agreement provides for the following:
. employment as one of our executives;
. an annual base salary of $325,000 with eligibility to receive annual
increases as determined in the sole discretion of the Board of
Directors;
. a discretionary annual cash bonus, which will be awarded at our
Board's discretion and upon the achievement of target performance
objectives presented in our budget but which shall not be less than
$25,000 for 2001;
13
. stock options to purchase 1,250,000 shares of our common stock. The
options were granted at an exercise price of $1.937 per share. 224,643
of these options have vested. 250,000 of these options will vest on
the earlier to occur of (i) the ten year anniversary of the date of
grant, (ii) the date when our common stock has traded at $20 or above
for a continuous 30-day period, and (iii) under certain circumstances
in the event of a change of control of the Company. The remaining
775,357 options will vest at the rate of 59,643 on July 14, 2001, and
59,643 every three months thereafter. In the event of a change of
control of the Company, all options outstanding are required to be
assumed by the surviving corporation; however, if they are not so
assumed, the options will become immediately and fully exercisable
immediately prior to the change in control and terminate as of the
change of control; and
. a right to participate in our stock option plans and all health,
welfare, and other benefit plans provided by us to our most senior
executives.
The CEO agreement is for a term expiring on July 14, 2004. The CEO
agreement provides that, in the event of termination by us without cause, the
executive will be entitled to receive from us:
. any earned and unpaid base salary;
. reimbursement for any reasonable and necessary monies advanced or
expenses incurred in connection with the executive's employment;
. a pro rata portion of the annual bonus for the year of termination;
and
. continued salary payments and employee benefits for one year following
termination or, if the CEO's employment is terminated prior to July
14, 2001, then $25,000.
The CEO agreement contains a provision that the CEO will not compete with
us or solicit our employees for a period of one year from the date of his
termination of employment.
Former Co-Chief Executive Officer Employment Agreements. On October
27, 2000, we terminated the employment agreements with our former Co-Chief
Executive Officers ("CEO's"), Todd V. Krizelman and Stephan J. Paternot pursuant
to the terms of the employment agreements, which included severance payments.
Following such date, Mssrs. Krizelman and Paternot have been performing services
for the Company as Co-Vice Chairmen not pursuant to any written contract.
President and Chief Operating Officer Employment Agreement. We have entered
into an employment agreement with Dean S. Daniels. The following are key terms
of the Daniels employment agreement:
. employment as our Chief Operating Officer effective August 31, 1998;
. an annual base salary of not less than $250,000 per year;
. an annual cash bonus of $50,000; and
. stock options to purchase 225,000 shares of our common stock. The
options were granted at an exercise price of $4.50 per share. Of these
options, 175,000 will vest with respect to one-third of the shares on
each of the first three anniversaries of the date of grant, and 50,000
will vest with respect to one-seventh of the shares on each of the
first seven anniversaries of the date of grant. These options were
granted under the 1998 Stock Option Plan. In the event of a change of
control of the Company, all options outstanding under the 1998 Stock
Option Plan will become immediately and fully exercisable.
The Daniels employment agreement is for a term expiring on August 31, 2001,
with possible earlier termination as provided in the agreement. In the event of
termination by us without cause, Mr. Daniels will be entitled to receive from
us:
. any earned and unpaid base salary as of the termination date and
salary continuation during a one-year non-competition period following
termination;
14
. reimbursement for any and all reasonable monies advanced or expenses
incurred in connection with his employment; and
. his full annual bonus for the year of termination.
In addition, termination without cause automatically triggers the vesting
of all options held by Mr. Daniels.
The Daniels employment agreement contains a provision that he will not
compete with us for a period of one year following the date of his termination
of employment.
Chief Financial Officer Employment Agreement. On July 13, 1998, we entered
into an employment agreement with Francis T. Joyce. The following are the key
terms of the Joyce employment agreement:
. employment as our Chief Financial Officer;
. an annual base salary of not less than $200,000 per year with
eligibility to receive annual increases in base salary as determined
by our CEO's;
. an annual cash bonus of at least $50,000; and
. Mr. Joyce received a stock option grant to purchase 225,000 shares of
our common stock, 175,000 of which have an exercise price per share
equal to 85% of the initial public offering price. All of the
unexercised options terminated on December 31, 2000 pursuant to their
terms.
The Joyce employment agreement was terminated on December 31, 2000 pursuant
to its terms, which included a severance payment, when Mr. Joyce ended his
employment at the Company.
15
Compensation Committee Interlocks and Insider Participation
Our Compensation Committee is currently comprised of Messrs. Duques and
Halperin and Ms. Arthur. Before July 15, 1998, the compensation committee was
comprised of Messrs. Egan, Halperin, Krizelman and Paternot. Mr. Egan, effective
as of July 22, 1998, also serves as one of our executive officers in his role as
Chairman.
Either the entire Board or the Subcommittee consisting of Messrs. Halperin
and Duques approves stock option grants. Neither Mr. Halperin nor Mr. Duques
was, at any time during 2000, or at any other time, an officer or employee of
theglobe. No member of our Compensation Committee serves as a member of the
board of directors or compensation committee of any entity that has one or more
executive officers serving as a member of theglobe's Board of Directors or
Compensation Committee.
Although Mr. Egan and Ms. Arthur do not receive a salary from us, in
February 2000 we granted stock options to Mr. Egan and Ms. Arthur for 10,000 and
5,000 shares, respectively, as bonus payments for 1999. In January 1999, we
granted stock options to Mr. Egan and Ms. Arthur for 70,000 and 30,000 shares,
respectively, as bonus payments for 1998.
Certain Relationships and Related Transactions
Arrangements with Entities Controlled by Various Directors and Officers. We
entered into an electronic commerce contract with AutoNation, Inc., an entity
affiliated with H. Wayne Huizenga, under which we have granted a right of first
negotiation with respect to the exclusive right to engage in or conduct an
automotive "clubsite" on theglobe. Additionally, AutoNation, Inc. has agreed to
purchase advertising from us for a three-year period at a price which will be
adjusted to match any more favorable advertising price quoted to a third party
by us, excluding various short-term advertising rates. We recognized revenue of
$0.3 million and $0.3 million for the years ended December 31, 2000 and 1999,
respectively, in connection with the AutoNation agreement.
We have entered into an electronic commerce arrangement with InteleTravel,
an entity controlled by Michael S. Egan, under which we developed a Web
community for InteleTravel in order for its travel agents to conduct business
through our web site in exchange for access to InteleTravel customers for
distribution of our products and services. We recognized revenue of $0.3 million
for the year ended December 31, 1999 in connection with the InteleTravel
agreement. There was no revenue recognized for the year ended December 31, 2000
or 1998.
In addition, we have entered into a community agreement with
ClikVacations.com, Inc., an entity controlled by Mr. Egan, whereby we agreed to
co-brand certain of our products and services for use on the ClikVacations.com
web site. Additionally, we agreed to sell advertising inventory related to these
co-branded products and services in exchange for a portion of net advertising
sales. We recognized revenue of $0.1 million in connection with the
ClikVacations.com agreement for the year ended December 31, 1999. There was no
revenue recognized for the year ended December 31, 2000 and 1998.
Stockholders' Agreement. Messrs. Egan, Krizelman, Paternot and Cespedes,
Ms. Arthur and Dancing Bear Investments, an entity controlled by Mr. Egan,
entered into a stockholders' agreement under which Mr. Egan (the "Egan group")
and Dancing Bear Investments agreed to vote for some nominees of Krizelman and
Paternot (the "Krizelman and Paternot groups") to our board of directors and the
Krizelman and Paternot groups agreed to vote for the Egan group's nominees to
our board, who will represent a majority of our board.
Additionally, under the terms of the stockholders' agreement, Messrs.
Krizelman, Paternot and Cespedes and Ms. Arthur have granted an irrevocable
proxy to Dancing Bear Investments with respect to any shares that may be
acquired or beneficially owned by them upon the exercise of outstanding warrants
transferred to each of them by Dancing Bear Investments. These shares will be
voted by Dancing Bear
16
Investments, which is controlled by Mr. Egan, and Dancing Bear Investments will
have a right of first refusal upon transfer of these shares.
The stockholders' agreement also provides:
. Take-Along Rights. If the Egan group sells shares of our common stock
(including shares issued upon exercise of options) and warrants
(assuming the warrants have been exercised) representing 25% or more
of our outstanding common stock, in any private sale, the Krizelman
and Paternot groups, Mr. Cespedes and Ms. Arthur may be required to
sell up to the same percentage of their shares as the Egan group
sells.
. Tag-Along Rights. If Dancing Bear Investments sells shares of our
common stock (including shares issued upon exercise of options) or
warrants (assuming the warrants have been exercised) representing 25%
or more of our outstanding common stock, or the Krizelman and Paternot
groups collectively sell shares or warrants representing 7% or more of
our shares and warrants in any private sale, each other party to the
stockholders' agreement, including entities controlled by them and
their permitted transferees, may, at their option, sell up to the same
percentage of their shares.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities and Exchange Act of 1934 requires our
officers and directors, and persons who own more than ten percent (10%) of a
registered class of our equity securities, to file certain reports regarding
ownership of, and transactions in, our securities with the SEC and with The
Nasdaq Stock Market, Inc. Such officers, directors, and 10% stockholders are
also required to furnish theglobe with copies of all Section 16(a) forms that
they file.
Based solely on our review of copies of Forms 3 and 4 and any amendments
furnished to us pursuant to Rule 16a-3(e) and Forms 5 and any amendments
furnished to us with respect to the 2000 fiscal year, and any written
representations referred to in Item 405(b)(2)(i) of Regulation S-K stating that
no Forms 5 were required, we believe that, during the 2000 fiscal year, our
officers and directors have complied with all Section 16(a) applicable filing
requirements except with respect to a Form 4 for Todd Krizelman that was filed
with the SEC on July 12, 2000, two days after it was required to be filed.
17
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors establishes our
general compensation policies as well as the compensation plans and specific
compensation levels for executive officers. A subcommittee of the Compensation
Committee comprised of two independent, non-employee directors who have no
interlocking relationships as defined by the SEC ("the Subcommittee"),
administers our stock based incentive plans for executive officers.
The Compensation Committee believes that the compensation of our executive
officers, including the CEO, should be influenced by our performance. Employment
agreements with certain of our executive officers establish base salary levels,
and any salary increases are made in accordance with those agreements.
Additional compensation in the form of cash bonuses or stock options is made in
accordance with the employment agreements, where applicable, or at the
discretion of the Compensation Committee, the Subcommittee, or the full Board,
taking into account the contributions made by the executive officers to
theglobe, as well as anticipated performance of theglobe in the coming year. The
Compensation Committee believes that our executive officer salaries in 2000 did
not exceed levels in the industry for similarly-sized businesses.
In addition to salary, the Board or the Subcommittee, from time to time,
grants options to executive officers. The Compensation Committee views option
grants as an important component of its long-term, performance-based
compensation philosophy. Since the value of an option bears a direct
relationship to our stock price, the Compensation Committee believes that
options motivate executive officers to manage us in a manner that will also
benefit stockholders. As such, options are granted at the current market price.
One of the principal factors considered in granting options to an executive
officer is the executive officer's ability to influence our long-term growth and
profitability.
On May 31, 2000, the Company offered to substantially all of its employees,
excluding executive officers and the Board of Directors, the right to cancel
certain outstanding stock options and receive new options with an exercise price
at the current fair market value of the stock. Options to purchase a total of
1,155,971 shares, approximately 20% of the options outstanding, were canceled
and 856,213 new options were granted in their place at an exercise price of
$1.594, which was based on the closing price of the Company's common stock on
May 31, 2000. The new options vest at the same rate that they would have vested
under previous option plans.
During 2000, a total of 1,250,000 options were granted to the CEO in
connection with his accepting employment at the Company and a total of 344,452
options were granted to the other executive officers.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Code was enacted in 1993 and generally disallows a
federal income tax deduction to any publicly held corporation for compensation
paid in excess of $1 million in any taxable year to the chief executive officer
or any of the four other most highly compensated executive officers who are
employed by a corporation on the last day of the taxable year. Section 162(m),
however, does not disallow a federal income tax deduction for qualified
"performance-based compensation," the material terms of which are disclosed to
and approved by stockholders.
18
The Committee has considered the tax deductibility of compensation under
Section 162(m). We generally have structured and intend to administer our stock
based incentive plans with the intention that the resulting compensation may
qualify as "performance-based compensation" and could be deductible. However,
there can be no assurances and the Board has retained flexibility in this
regard. It is not expected that any executive officer's compensation will be
non-deductible in 2001 by reason of the application of Section 162(m).
Compensation attributable to options granted under the 2000 Broad Based Employee
Stock Option Plan will be subject to the deduction limitation of section 162(m).
Compensation Committee of the Board of Directors
Robert M. Halperin
Rosalie V. Arthur
Henry C. Duques
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee of the Board of Directors operates under a written
charter adopted by the board of directors, which is attached as Exhibit A to
this proxy statement. The members of the committee are Robert M. Halperin, an
independent director of the company, and Rosalie V. Arthur, a non-independent
director of the company, as the term "independent director" is defined under the
National Association of Securities Dealers' listing standards. Given Ms.
Arthur's background and experience in auditing, and as a manager of financial
reporting for a prior employer, the Board of Directors determined that it was in
the company's best interests that she be a member of the audit committee.
Management is responsible for the company's internal controls and the
financial reporting process. The independent accountants are responsible for
performing an independent audit of the company's consolidated financial
statements in accordance with generally accepted auditing standards and to issue
a report thereon. The committee's responsibility is to monitor and oversee these
processes.
In this context, the audit committee has met and held discussions with
management and the independent accountants. Management represented to the
committee that the company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the audit
committee has reviewed and discussed the consolidated financial statements with
management and the independent accountants. The committee discussed with the
independent accountants matters required to be discussed by Statement of
Auditing Standards No. 61 (Communication with Audit Committees).
The company's independent accountants also provided to the audit committee
the written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the audit committee
discussed with the independent accountants that firm's independence.
Based upon the audit committee's discussion with management and the
independent accountants and the audit committee's review of the representation
of management and the report of the independent accountants to the committee,
the audit committee recommended that the board of directors include the audited
consolidated financial statements in the company's annual report on Form 10-K
for the year ended December 31, 2000 filed with the Securities and Exchange
Commission.
Audit Committee of the Board of Directors
Robert M. Halperin
Rosalie V. Arthur
19
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, upon the recommendation of the audit committee, has
appointed KPMG , New York, NY as the firm of independent public accountants to
audit our books and accounts for the fiscal year ending December 31, 2001.
There will be no representative from KPMG in attendance at the annual meeting.
Audit Fees. The aggregate fees billed by KPMG for professional services
rendered for the audit of our annual financial statements for fiscal 2000 and
the reviews of the financial statements included in our Forms 10-Q was $309,806.
All Other Fees. The Company paid the following fees for services by KPMG
during fiscal 2000:
The Audit Committee reviewed these services and determined that the nature
of these engagements did not impair auditor independence.
Financial Information Systems Design and Implementation Fees. We have paid
no fees to KPMG for the operation of our information system network or for the
design or implementation of a system that aggregates source data for, or
generates information significant to, our financial statements.
PERFORMANCE GRAPH
The following graph shows a comparison of our cumulative total stockholder
return, calculated on a dividend reinvested basis, from the end of the first
trading day (November 13, 1998) following the initial public offering of our
common stock, through December 31, 2000 for theglobe, the Nasdaq Stock Market
Composite Index (the "Nasdaq Index") and the Hambrecht & Quist Internet Index
(the "Internet Index"). The graph assumes that $100 was invested in our common
stock, the Nasdaq Index and the Internet Index on November 13, 1998. Note that
historic stock price performance is not necessarily indicative of future stock
price performance.
[GRAPH]
11/13/98 12/31/00
-------- --------
theglobe.com 100 0.89*
Nasdaq Index 100 133.69
Internet Index 100 188.98
The following table sets forth the range of high and low closing sales prices of
our common stock for the periods indicated as reported by the NASDAQ Stock
market:
Fiscal Quarter Ended High Low
--------------------- ---- ---
December 31, 2000 ................................ $ 0.94 $ 0.13
September 30, 2000 ............................... $ 2.66 $ 0.72
June 30, 2000 .................................... $ 6.44 $ 1.31
March 31, 2000 ................................... $ 9.62 $ 5.75
December 31, 1998 (commencing November 13,
1998) ............................................ $31.75 $13.72
* Note: Our stock price on November 12, 1998 was $4.50. The closing price on
the first trading day (November 13, 1998) was $31.75. The closing price on
December 31, 2000 was $0.28.
20
STOCKHOLDER PROPOSALS FOR THE
2002 ANNUAL MEETING
We welcome comments and suggestions from our stockholders. Here are the
ways a stockholder may present a proposal for consideration by the other
stockholders at our 2002 Annual Meeting:
In our Proxy Statement. If a stockholder wants to submit a proposal for
inclusion in our proxy statement and form of proxy under Rule 14a-8 under the
Securities Exchange Act of 1934 (the "Exchange Act") for the 2002 Annual Meeting
of Stockholders, we must receive the proposal in writing on or before 5 p.m.,
Eastern time, January 2, 2002.
At the Annual Meeting. Under our By-Laws, if a stockholder wishes to
nominate a director or bring other business before the stockholders at the 2002
Annual Meeting, we must receive the stockholder's written notice not less than
60 days nor more than 90 days prior to the date of the annual meeting, unless we
give our stockholders less than 70 days' notice of the date of our 2002 Annual
Meeting. If we provide less than 70 days' notice, then we must receive the
stockholder's written notice by the close of business on the 10th day after we
provide notice of the date of the 2002 Annual Meeting. The notice must contain
the specific information required in our By-Laws. A copy of our By-Laws may be
obtained by writing to the Assistant Secretary. If we receive a stockholder's
proposal within the time periods required under our By-Laws, we may choose, but
are not required, to include it in our proxy statement. If we do, we may tell
the other stockholders what we think of the proposal, and how we intend to use
our discretionary authority to vote on the proposal.
Delivering a Separate Proxy Statement. We will not use our discretionary
voting authority if a stockholder submits a proposal within the time period
required under our By-Laws, and also provides us with a written statement that
the stockholder intends to deliver his/her own proxy statement and form of proxy
to our stockholders. Persons who wish to deliver their own proxy statement and
form of proxy should consult the rules and regulations of the SEC.
All proposals should be made in writing and sent via registered, certified
or express mail, to our executive offices, 120 Broadway, 22nd floor, New York,
New York 10271, Attention: Assistant Secretary.
OTHER BUSINESS
The Board of Directors is not aware of any other matters to come before the
Annual Meeting. If any matter not mentioned in this proxy statement is properly
brought before the meeting, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies with respect to those matters in
accordance with their judgment.
The Audit Committee (the "Committee") of theglobe.com, inc. (the "Company")
assists the Board of Directors in fulfilling its responsibility to relevant
constituencies including shareholders, regarding internal controls, corporate
accounting, reporting practices and the quality and integrity of the financial
reports of the Company. The Committee also maintains free and open
communications among the Board, the independent public accountants, the
Company's Chief Financial Officer and the financial management of the Company.
II. Organization of the Committee
A. The Committee shall consist of three or more Directors who are not employees
of the Company and are free of any relationship that interferes with the
exercise of independent judgment. The Board shall designate one member of the
Committee to be Chair.
B. Committee members shall have experience in financial affairs or accounting
practices, together with such other qualifications as the Board may from time to
time deem appropriate in light of the mission of the Committee.
C. The Committee shall meet at least two times yearly in order to review with
the independent accountants the annual audit plan, the audit results and such
other matters as may be appropriate for Committee consideration, and shall hold
such additional meetings as the Chair of the Committee deems necessary.
Appropriate management representatives shall be asked to attend as necessary.
D. The Committee shall report to the Board following each meeting and at such
other times as circumstances warrant.
III. Duties and Responsibilities of the Committee
A. The Committee shall review annually the qualifications, independence and
fees of the independent public accountants recommended by management, and shall
recommend to the Board of Directors the firm to be selected to audit the
financial statements of the Company and its subsidiaries for the current fiscal
year. The independent public accountants shall be accountable to the Committee
and the Board of Directors.
B. The Committee shall meet with the independent public accountants and
financial management of the Company to review the nature and scope of the audit
of the books of account of the Company and other operations and controls and the
procedures to be utilized. At the conclusion of each annual audit, the committee
shall review the results of such audit, including any comments or
recommendations of the independent public accountants regarding internal
controls, as well as management's response and the status of prior year
recommendations. The Committee shall also consider and review with the
independent public accountants the nature and resolution of any significant or
unusual accounting matters and the adequacy of the Company's internal controls.
C. The committee shall, after the close of each fiscal year, review the
financial statements of the Company certified by the independent public
accountants. The Committee shall report to the Board
any matters or concerns raised by the independent public accountants which the
Committee views as requiring the attention of the Board.
D. The Committee shall oversee the Company's financial reporting process and
address internal accounting controls through discussions with independent public
accountants.
E. The Committee shall assess the overall quality of the Company's system of
internal accounting controls by reviewing the internal control evaluations
performed by the independent accountants.
F. The Committee shall provide the independent public accountants and the
Company's Chief Financial Officer full and free access to the Committee to meet
privately whenever appropriate.
G. The Committee shall receive reports from time to time by the Chief Financial
Officer and the General Counsel concerning litigation, contingencies or other
material matters which may result in either liability of the company or
significant risk or exposure of the Company. The Committee shall review the
matters so reported and advise the Board of Directors accordingly.
H. The Committee shall periodically review and reassess the adequacy of the
Audit Committee's Charter.
I. The Committee shall receive and review a written statement from the
independent public accountant identifying all relationships between the
accountant and the Company. The Committee will address with the independent
public accountant any relationship that may impact the accountant's objectivity
and independence.
PROXY PROXY
----- -----
theglobe.com, inc.
(Solicited on behalf of the Board of Directors)
The undersigned holder of common stock of theglobe.com, inc., revoking
all proxies previously given, hereby constitutes and appoints Todd V. Krizelman
and Stephan J. Paternot, and each of them Proxies, with full power of
substitution and resubstitution, on behalf and in the name of the undersigned,
to vote all of the undersigned's shares of the said stock, according to the
number of votes and with all the powers the undersigned would possess if
personally present, at the Annual Meeting of Stockholders of theglobe.com, inc.,
to be held at the New York Hotel Pennsylvania (Penntop North Room), 401 7th
Avenue, New York, NY 10001, Monday, June 25, 2001 at 10 a.m., local time, and at
any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice and Proxy
Statement relating to the meeting and hereby revokes any proxy or proxies
previously given.
Each properly executed Proxy will be voted in accordance with the
specifications made on the reverse side of this Proxy and in the discretion of
the Proxies on any other matter which may properly come before the meeting.
Where no choice is specified, this Proxy will be voted FOR all listed nominees
to serve as directors and FOR proposal 2.
PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
theglobe.com, inc.
June 25, 2001
\/ Please Detach and Mail in the Envelope Provided \/
A [X]Please mark your
votes as in this
example using
dark ink only.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR MATTERS (1) AND (2) LISTED BELOW,
TO COME BEFORE THE ANNUAL MEETING.
FOR all nominees WITHHOLD
listed at right AUTHORITY
(except as marked to to vote for all
the contrary below) nominees listed at right
1. Election of [_] [_] Nominees: Michael S. Egan
six (6) Todd V. Krizelman
directors, to Stephan J. Palernot
serve until Edward A. Cespedes
the 2002 Annual Rosalie V. Arthur
Meeting of Stockholders Robert M. Halperin
FOR AGAINST ABSTAIN
2. To approve the amendment of theglobe.com, inc.'s [_] [_] [_]
Certificate of Incorporation
3. Upon any and all other business that may properly come before the Annual
Meeting.
This Proxy, which is solicited on behalf of the Board of Directors, will be
voted FOR the matters described in paragraphs (1) and (2), unless the
shareholder specifies otherwise, in which case it will be voted as specified.
NOTE: Please sign exactly as name or names appear hereon. When signing as
attorney, executor, administrator, trustee or guardian please give your
full title. If a corporation, please sign in full corporate name by
president or other authorized officer. If a partnership, please sign in
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