<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934 (Amendment No. )
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[X] Preliminary Proxy Statement
[ ] Confidential, for use by the Commission only
(as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
autobytel.com inc.
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than Registrant)
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[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:
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2) Aggregate number of securities to which transaction applies:
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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
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<PAGE> 2
AUTOBYTEL.COM INC.
------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
JULY 22, 1999
------------------------------------------------
TO OUR STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders of
autobytel.com inc., a Delaware corporation ("Autobytel.com"), will be held at
18872 MacArthur Boulevard, Fourth Floor, Irvine, California 92612-1400, on
Thursday, July 22, 1999, at 10:30 a.m., Pacific Daylight Time, for the following
purposes:
1. To elect three Class I Directors;
2. To ratify and approve Autobytel.com's independent public
accountants for fiscal 1999;
3. To ratify and approve an increase in the number of authorized
shares of common stock of Autobytel.com from 50,000,000 shares
to 200,000,000 shares; and
4. To transact such other business as may properly come before
the Annual Meeting and any adjournment or postponement
thereof.
The board of directors has fixed the close of business on June 1, 1999
as the record date for the determination of the holders of common stock entitled
to notice of and to vote at the Annual Meeting.
In lieu of an annual report for 1998, we are enclosing a copy of our
final prospectus, dated March 26, 1999, relating to our initial public offering.
A list of stockholders entitled to vote at the Annual Meeting will be
open for examination by any stockholder for any purpose germane to the meeting
during ordinary business hours for a period of ten days prior to the Annual
Meeting at the offices of Autobytel.com, 18872 MacArthur Boulevard, Irvine,
California 92612-1400, and will also be available for examination at the Annual
Meeting until its adjournment.
YOUR ATTENTION IS DIRECTED TO THE ACCOMPANYING PROXY STATEMENT. WE
INVITE ALL STOCKHOLDERS TO ATTEND THE ANNUAL MEETING. TO ENSURE THAT YOUR SHARES
WILL BE VOTED AT THE ANNUAL MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY VOTE YOUR SHARES IN PERSON EVEN IF YOU HAVE PREVIOUSLY
SUBMITTED A PROXY.
By Order of the Board of Directors
Mark W. Lorimer
President and Chief Executive Officer
Irvine, California
June 11, 1999
IMPORTANT
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE
MEETING, PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND PROMPTLY RETURN
IT IN THE ENVELOPE PROVIDED TO AUTOBYTEL.COM'S TRANSFER AGENT AT U.S. STOCK
TRANSFER, ATTENTION: MAIL CENTER, 1815 SOUTH BRAND BOULEVARD, UNIT B, GLENDALE,
CALIFORNIA 91204, TO BE RECEIVED NO LATER THAN JULY 21, 1999. IN ORDER TO AVOID
THE ADDITIONAL EXPENSE TO AUTOBYTEL.COM OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN MAILING IN YOUR PROXY PROMPTLY.
<PAGE> 3
PROXY STATEMENT
AUTOBYTEL.COM INC.
18872 MACARTHUR BOULEVARD
IRVINE, CALIFORNIA 92612-1400
------------------------------------------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
JULY 22, 1999
------------------------------------------------
SOLICITATION AND REVOCATION OF PROXIES
THE ENCLOSED PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF
DIRECTORS OF AUTOBYTEL.COM INC., A DELAWARE CORPORATION, FOR USE AT
AUTOBYTEL.COM'S 1999 ANNUAL MEETING OF STOCKHOLDERS (THE "ANNUAL MEETING") TO BE
HELD ON THURSDAY, JULY 22, 1999 AT 10:30 A.M., PACIFIC DAYLIGHT TIME, AT
AUTOBYTEL.COM'S CORPORATE HEADQUARTERS AT 18872 MACARTHUR BOULEVARD, FOURTH
FLOOR, IRVINE, CALIFORNIA 92612-1400, AND AT ANY AND ALL ADJOURNMENTS OR
POSTPONEMENTS THEREOF, FOR THE PURPOSES SET FORTH IN THE ACCOMPANYING NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS.
In addition to solicitation by mail, officers, directors and regular
employees of Autobytel.com, who will receive no additional compensation for
their services, may solicit proxies by mail, telegraph, facsimile transmission
or personal calls. All costs of solicitation will be borne by Autobytel.com. We
have requested brokers and nominees who hold stock in their name to furnish this
proxy material to their customers and Autobytel.com will reimburse such brokers
and nominees for their related out-of-pocket expenses. This Proxy Statement of
Autobytel.com is being mailed on or about June 11, 1999 to each stockholder of
record as of the close of business on June 1, 1999.
VOTING AT THE MEETING
Autobytel.com had shares of common stock, par value $0.001 per
share, outstanding as of June 1, 1999. Holders of record of shares of common
stock at the close of business on June 1, 1999 will be entitled to notice of and
to vote at the Annual Meeting and will be entitled to one vote for each such
share so held of record.
Any stockholder has the power to revoke his or her proxy at any time
before it is voted. A proxy may be revoked by delivering written notice of
revocation to Autobytel.com at our principal office, 18872 MacArthur Boulevard,
Irvine, California 92612-1400, Attention: Secretary, by a subsequent proxy
executed by the person executing the prior proxy and presented at the meeting,
or by attendance at the Annual Meeting and voting in person by the person
executing the proxy. If not revoked, the proxy will be voted at the Annual
Meeting in accordance with the instructions indicated on the proxy card by the
stockholder or, if no instructions are indicated, will be voted FOR the slate of
directors nominated herein, FOR the ratification and approval of Arthur Andersen
LLP as Autobytel.com's independent public accountants and FOR the increase in
Autobytel.com's capitalization as described herein, and as to any other matter
that may properly be brought before the Annual Meeting, in accordance with the
judgment of the proxy holder. Abstentions and broker non-votes are each included
in the determination of the number of shares present and voting for the purpose
of determining whether a quorum is present, and each is tabulated separately. In
determining whether a proposal has been approved, abstentions are counted as
votes against a proposal and broker non-votes are not counted as votes for or
against a proposal or as votes present and voting on a proposal.
<PAGE> 4
NOMINATION AND ELECTION OF CLASS 1 DIRECTORS
(PROPOSAL 1)
The persons named in the enclosed proxy will vote to elect the three
nominees named below under "Nominees for Class I Director" unless instructed
otherwise in the proxy. The persons receiving the greatest number of votes, up
to the number of directors to be elected, shall be the persons elected as the
Class I Directors. Shares represented by proxies which are marked "withhold
authority" will have the same effect as a vote against the nominees. The Class I
Directors are to hold office until the 2002 Annual Meeting of Stockholders and
until their respective successors are duly qualified and elected.
The names and certain information concerning the persons nominated to
be elected as Class I Directors by the board of directors at the Annual Meeting
are set forth below. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE ELECTION OF THE NOMINEES NAMED BELOW UNDER "NOMINEES FOR CLASS I
DIRECTOR". It is intended that shares represented by the proxies will be voted
FOR the election to the board of directors of the persons named below unless
authority to vote for the nominees has been withheld in the proxy. Although the
persons nominated have consented to serve as directors if elected, and the board
of directors has no reason to believe that the nominees will be unable to serve
as directors, if any nominee withdraws or otherwise becomes unavailable to
serve, the persons named as proxies will vote for any substitute nominee
designated by the board of directors. The following information regarding
Autobytel.com's directors and executive officers, including nominees, is
relevant to your consideration of the slate proposed by your board of directors:
DIRECTORS AND EXECUTIVE OFFICERS
The current directors and executive officers of Autobytel.com are as
follows:
<TABLE>
<CAPTION>
OFFICERS AGE POSITION
-------- --- --------
<S> <C> <C>
Michael J. Fuchs.... 53 Chairman of the Board and Director
Mark W. Lorimer..... 40 Chief Executive Officer, President and Director
Robert S. Grimes.... 55 Executive Vice President and Director
Hoshi Printer....... 57 Senior Vice President and Chief Financial Officer
Ann M. Delligatta... 52 Executive Vice President and Chief Operating Officer
Ariel Amir.......... 39 Vice President, General Counsel and Secretary
Jeffrey H. Coats.... 41 Director
Mark N. Kaplan...... 69 Director
Kenneth J. Orton.... 47 Director
Peter Titz.......... 46 Director
Richard A. Post..... 40 Director
</TABLE>
The board of directors is divided into three classes, with each class
holding office for staggered three-year terms. The terms of Class I Directors
Mark W. Lorimer, Richard A. Post and Peter Titz expire in 1999, the terms of
Class II Directors Mark N. Kaplan and Kenneth J. Orton expire in 2000 and the
terms of Class III Directors Jeffrey H. Coats, Michael J. Fuchs and Robert S.
Grimes expire in 2001. All executive officers of Autobytel.com are chosen by the
board of directors and serve at its discretion except that Mark W. Lorimer and
Ann M. Delligatta each have employment agreements that have terms of employment
of three years. There are no family relationships among Autobytel.com's officers
and directors.
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<PAGE> 5
ATTENDANCE AT MEETINGS AND BOARD COMMITTEES
During the fiscal year ended December 31, 1998, the board of directors
held a total of 12 meetings. Each member of the board of directors attended more
than 75% of the meetings of the Board and of the committees of which he was a
member.
The standing committees of the board of directors are the Compensation
Committee and the Audit Committee. The board of directors has no nominating
committee or committee performing a similar function.
The Compensation Committee, which met on two occasions in 1998, is
responsible for determining the compensation of executive officers and
Autobytel.com's non-executive officer employee compensation structure. The
Compensation Committee currently consists of Jeffrey H. Coats, Michael J. Fuchs
and Kenneth J. Orton.
The Audit Committee, which met on one occasion in 1998, is responsible
for (i) reviewing Autobytel.com's financial results and the scope and results of
audits; (ii) evaluating Autobytel.com's sys tem of internal controls and meeting
with independent auditors and appropriate Company financial per sonnel
concerning Autobytel.com's system of internal controls; (iii) recommending to
the board of directors the appointment of the independent auditors; and (iv)
evaluating Autobytel.com's financial reporting activities and the accounting
standards and principles followed. The Audit Committee currently consists of
Jeffrey H. Coats, Michael J. Fuchs and Mark N. Kaplan.
NOMINEES FOR CLASS I DIRECTOR
The following persons' names will be placed in nomination for election
to the board of directors. The shares represented by the proxy cards returned
will be voted FOR the election of these nominees unless you specify otherwise.
Mark W. Lorimer has served as a director of Autobytel.com since June
1998. Mark W. Lorimer joined Autobytel.com in December 1996 as Vice President,
General Counsel and Secretary, and was promoted to Executive Vice President and
Chief Operating Officer in May 1997. In May 1998, Mr. Lorimer was promoted to
President. He was elected a director and appointed Chief Executive Officer of
Autobytel.com in June 1998. From January 1996 to November 1996, Mr. Lorimer was
a partner and, from March 1989 to January 1996, was an associate with the law
firm of Dewey Ballantine LLP. Mr. Lorimer is a member of the board of directors
of IMC Mortgage Company. Mr. Lorimer holds a B.S. in Speech from Northwestern
University and a J.D. from the Fordham University School of Law.
Richard A. Post has served as a director of Autobytel.com since
February 1999. Mr. Post is Executive Vice President and Chief Financial Officer
of MediaOne Group, Inc. and President of MediaOne Capital Corp., a subsidiary of
MediaOne Group, Inc. Mr. Post joined US WEST Financial Services in April 1988 as
manager of Corporate Development and was promoted in 1990, first to Executive
Director, and then to Vice President, responsible for all Capital Asset Group
businesses. From June 1996 to January 1997, he was President of Corporate
Development at US WEST, Inc. where he had responsibility for corporate
development efforts at US WEST Communications, as well as US WEST, Inc. US WEST,
Inc. has since split into two separate corporations, MediaOne Group, Inc. and US
WEST. From December 1995 to June 1996, he served as Vice President of Corporate
Development for US WEST Media Group, a division of the former US WEST, Inc. Mr.
Post holds both a business administration degree and an M.B.A. from Delta State
University. Mr. Post is a member of the board of directors of Financial Security
Assurance Holdings, Inc., a financial guaranty company based in New York.
3
<PAGE> 6
Peter Titz has served as a director of Autobytel.com since January
1999. Mr. Titz is a manager of Metro International Dienstleistung Beteiligungs
AG and Invision AG. Before joining Metro and Invision AG in 1989, Mr. Titz was
managing director of various institutions in the financial service sector
including American Express in Frankfurt where he was responsible for the
introduction of automatic teller machines and the installation of POS systems in
Europe. Mr. Titz received a degree in engineering from the University of Aachen
and a degree in economics from the University of Bonn. Mr. Titz is President of
the board of directors of Aureus Private Equity AG and Deutsche Media AG and is
a member of the board of directors of Teleclip AG.
OTHER DIRECTORS AND EXECUTIVE OFFICERS
Michael J. Fuchs was elected as a director of Autobytel.com in
September 1996 and became Chairman in June 1998. Mr. Fuchs was Chairman and
Chief Executive Officer of Home Box Office, a Division of TimeWarner
Entertainment Company, L.P., a leading pay-television company, from October 1984
until November 1995, and Chairman and Chief Executive Officer of Warner Music
Group, a Division of Time Warner Inc., from May 1995 to November 1995. Mr. Fuchs
holds a B.A. from Union College and a J.D. from the New York University School
of Law. Mr. Fuchs is a member of the board of directors of IMAX Corp., Wink
Communications, Inc. and Consolidated Cigar Holdings Inc.
Robert S. Grimes has been a director of Autobytel.com since inception
and has served as Executive Vice President since July 1996. Since September
1987, Mr. Grimes has been President of R.S. Grimes & Co., Inc., a private
investment company. From April 1981 to March 1987, Mr. Grimes was a partner with
the investment firm of Cowen & Company. Mr. Grimes holds a B.S. from the Wharton
School of Commerce and Finance at the University of Pennsylvania and an L.L.B.
from the University of Pennsylvania Law School. Mr. Grimes has served on the
board of directors of Philips International Realty Corp., a New York Stock
Exchange listed company, since April 1998.
Hoshi Printer joined Autobytel.com in January 1999 as Senior Vice
President and Chief Financial Officer. From June 1996 to December 1998, Mr.
Printer served as Vice President, Finance and Administration, Chief Financial
Officer and Secretary of Peerless Systems Corporation, a software technology
company. From July 1995 to May 1996, Mr. Printer was Chief Financial Officer of
Neuron Data Inc., a software technology company. From July 1994 to June 1995 Mr.
Printer served as Chief Financial Officer of Soane Technologies Inc., a polymer
technology company. From January 1990 to June 1994, Mr. Printer was Chief
Financial Officer of Catalytica Inc., an environmental technology company. Mr.
Printer also worked at Xerox Corporation for over 17 years as Vice President of
Finance and in 1976 served as a consultant to the White House for the
President's Reorganization project on cash management. Mr. Printer holds a B.E.
in mechanical engineering and a B.E. in electrical engineering from Poona
University in India, an M.S. in industrial engineering from Oklahoma State
University and an M.B.A. from Stanford University.
Ann M. Delligatta joined Autobytel.com in June 1997 as Senior Vice
President and Chief Technology Officer and was promoted to Executive Vice
President and Chief Operating Officer in July 1998. From September 1996 to June
1997, Ms. Delligatta was President and Chief Executive Officer of the Pharos
Group, an information technology consulting organization. From January 1987 to
September 1996, Ms. Delligatta held a number of managerial positions at TRW
Inc.'s TRW Information Systems and Services Group, most recently as Vice
President and General Manager/Information Technology Services. Ms. Delligatta
attended Mount St. Mary's College and was named by McGraw-Hill Companies as one
of the "Top 100 Women in Computing in 1996" in recognition of her success in the
alignment of business and technology strategies.
Ariel Amir joined Autobytel.com as Vice President and General Counsel
in March 1999 and was elected Secretary in April 1999. Mr. Amir was Vice
President of Security Capital U.S. Realty from February 1998 until March 1999,
where he was responsible for mergers and acquisitions and relations with
strategic
4
<PAGE> 7
investees. Mr. Amir was Vice President of Security Capital Group Incorporated,
where he provided securities offering and corporate acquisitions services from
June 1994 until January 1998. Prior to joining Security Capital Group, Mr. Amir
was an attorney with the law firm of Weil, Gotshal & Manges in New York where he
practiced securities and corporate law from September 1985 until April 1994. Mr.
Amir received his law degree from Georgetown University Law Center, an M.S. in
industrial administration from Carnegie-Mellon University Graduate School of
Industrial Administration and an A.B. in Economics, with honors, from Washington
University in St. Louis.
Jeffrey H. Coats was elected a director of Autobytel.com in August
1996. Mr. Coats has served as Managing Director of GE Equity Capital Group,
Inc., a wholly-owned subsidiary of General Electric Capital Corporation, a
significant stockholder in us, since April 1996. He has also held various
positions, most recently as Managing Director, of GE Capital Corporate Finance
Group, Inc., a wholly-owned subsidiary of General Electric Capital Corporation,
from June 1987 to April 1993. From March 1994 to April 1996, Mr. Coats served as
President of Maverick Capital Equity Partners, LLC, and from April 1993 to
January 1994, Mr. Coats was a partner with Veritas Capital, Inc., both of which
are investment firms. Mr. Coats holds a B.B.A. in Finance from the University of
Georgia and a Masters in International Management in Finance from the American
Graduate School of International Management. Mr. Coats is a director and
Chairman of the Board of The Hastings Group, Inc., a privately-held clothing
retailer, which on October 23, 1995, filed a voluntary petition under Chapter 11
of the Bankruptcy Code and confirmed a plan of liquidation in late 1997. Mr.
Coats became a director of The Hastings Group in connection with Maverick
Capital Equity Partners' purchase of the assets of the predecessor of The
Hastings Group in a previous bankruptcy proceeding. Maverick Capital Equity
Partners was not able to make the business of The Hastings Group, Inc.
profitable after it purchased the business in a previous bankruptcy proceeding
and accordingly, The Hastings Group, Inc. filed for bankruptcy after Maverick
Capital Equity Partners determined not to continue to fund its operating losses.
Mr. Coats is a member of the board of directors of Wink Communications, Inc. and
of Krause's Furniture, Inc., a publicly-held company.
Mark N. Kaplan was elected as a director of Autobytel.com in June 1998.
Mr. Kaplan has been a member of the law firm of Skadden, Arps, Slate, Meagher &
Flom LLP since 1979. Mr. Kaplan serves on the board of directors of the
following companies whose shares are publicly traded: American Biltrite, Inc.,
Congoleum Corporation, Inc., DRS Technologies, Inc., Grey Advertising, Inc.,
MovieFone, Inc., REFAC Technology Development Corporation, and Volt Information
Services, Inc. Mr. Kaplan holds an A.B. from Columbia College and a J.D. from
Columbia Law School.
Kenneth J. Orton was elected a director of Autobytel.com in June 1998.
Mr. Orton is currently a director, and through February 1999 Mr. Orton was the
President and Chief Executive Officer, of Preview Travel, Inc., which he joined
in April 1994 as President and Chief Operating Officer. From September 1989 to
March 1994, Mr. Orton was Vice President and General Manager of the San
Francisco division of Epsilon, a database marketing firm and a wholly owned
subsidiary of American Express Company. Prior to his employment with Epsilon,
Mr. Orton was Vice President of MARC Inc., a market research and database
marketing company, and Vice President of Sales and Marketing for Future
Computing. Mr. Orton also serves as a director of ONSALE, Inc., a publicly-held
company. Mr. Orton received a B.A. from California State University, Fullerton.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the common stock as of May 15, 1999, by all persons
known by Autobytel.com to own beneficially more than five percent (5%) of the
common stock of Autobytel.com, each director, each of the persons named in the
Summary Compensation Table in this Proxy Statement, the executive officers who
joined Autobytel.com in 1999, and all directors and such executive officers of
Autobytel.com as a group.
5
<PAGE> 8
<TABLE>
<CAPTION>
Shares Beneficially Owned
-------------------------
Name of Beneficial Owner Number Percent
------------------------ --------- -------
<S> <C> <C>
Peter R. Ellis (1) ............................................... 3,058,282 17.1%
c/o Autobytel.com
18872 MacArthur Boulevard
Irvine, California 92612-1400
John C. Bedrosian (2) ............................................ 2,750,695 15.4%
c/o Autobytel.com
18872 MacArthur Boulevard
Irvine, California 92612-1400
General Electric Capital Corporation (3) ......................... 1,832,093 10.2%
260 Long Ridge Road
Stamford, Connecticut 06927
Peter Titz (4) ................................................... 1,550,406 8.5%
c/o Aureus Private Equity AG
Zugerstrasse 76b
CH-6340 Baar
Switzerland
MediaOne Interactive Services, Inc. (5) .......................... 1,059,576 5.8%
9000 E. Nichols Avenue
Englewood, Colorado 80112
Aureus Private Equity AG (4) ..................................... 1,021,618 5.6%
Zugerstrasse 76b
CH-6340 Baar
Switzerland
National Union Fire Insurance Company of Pittsburgh, PA .......... 837,157 4.7%
200 Liberty Street
New York, New York 10281
Robert S. Grimes (6) ............................................. 811,693 4.5%
c/o R.S. Grimes & Co., Inc.
152 West 57th Street
New York, New York 10019
Mark W. Lorimer (7) .............................................. 493,603 2.7%
Michael J. Fuchs (8) ............................................. 146,320 *
Michael J. Lowell (9) ............................................ 117,707 *
Ann M. Delligatta (10) ........................................... 129,838 *
Anne Benvenuto (11) .............................................. 18,203 *
Mark N. Kaplan ................................................... 10,125 *
Kenneth J. Orton ................................................. 10,125 *
Hoshi Printer..................................................... 1,000 *
Ariel Amir........................................................ 1,000 *
All officers and directors as a group (14 persons) (12) .......... 9,239,971 47.0%
</TABLE>
- --------------
* Less than 1%.
(1) Includes 46,110 shares held by trusts established for family members of
Mr. Ellis as to which Mr. Ellis' spouse maintains sole voting power.
Also includes 593,175 shares as to which Mr. Ellis granted voting power
to Autobytel.com under a voting proxy dated January 11, 1999. See
"Certain Relationships and Related Transactions."
(2) 2,569,445 shares are held in the John C. Bedrosian and Judith D.
Bedrosian Revocable Trust in which Mr. Bedrosian maintains shared
voting powers. 1,000,000 shares are held by the Bedrosian Investment
Group, Ltd., of which Mr. Bedrosian and his spouse are general
partners.
(3) Mr. Jeffrey Coats is a managing director of GE Equity Capital Group,
Inc., an affiliate of General Electric Capital Corporation, and is a
director of Autobytel.com. Includes 1,825,828 shares held by General
Electric Capital Corporation (GE). Also includes 6,265 shares issuable
upon exercise of options exercisable within 60 days of May 15, 1999
which were granted to Mr. Coats, and subsequently assigned to GE. Mr.
Coats disclaims beneficial ownership of such 6,265 shares.
6
<PAGE> 9
(4) Mr. Peter Titz is a director of Aureus Private Equity AG, a manager of
Invision AG, and a director of Autobytel.com. Includes 731,818 shares,
and 289,800 shares issuable upon exercise of warrants, held by Aureus
Private Equity AG. Also includes 378,788 shares, and 150,000 shares
issuable upon exercise of warrants, held by Invision AG.
(5) Mr. Richard Post is a director of MediaOne Interactive Services, Inc.
and a director of Autobytel.com. Includes 757,576 shares held by
MediaOne Interactive Services, Inc. and 300,000 shares issuable upon
exercise of warrants. MediaOne Interactive Services, Inc. is an
indirect wholly owned subsidiary of MediaOne Group, Inc. As a result,
MediaOne Group, Inc., may be deemed to indirectly, beneficially own the
shares reported as being directly beneficially owned by MediaOne
Interactive Services, Inc. MediaOne Group, Inc., disclaims such
beneficial ownership.
(6) Includes an aggregate of 5,554 shares held in irrevocable trusts as to
which Mr. Grimes' spouse maintains sole voting power. Includes 256,138
shares issuable upon exercise of options exercisable within 60 days of
May 15 1999.
(7) Represents 493,603 shares issuable upon exercise of options exercisable
within 60 days of May 15, 1999. 80,000 of the 493,603 shares are
contingent upon the achievement of stock price goals during the ten
days prior to July 1, 1999.
(8) Includes 6,266 shares issuable upon exercise of options exercisable
within 60 days of May 15, 1999 and 140,054 shares held by Mr. Fuchs.
(9) Includes 116,707 shares issuable upon exercise of options exercisable
within 60 days of May 15, 1999.
(10) Includes 128,698 shares issuable upon exercise of options exercisable
within 60 days of May 15, 1999. 30,000 of the 128,698 shares are
contingent upon the achievement of stock price goals during the ten
days prior to July 1, 1999.
(11) Represents 18,203 shares issuable upon exercise of options exercisable
within 60 days of May 15, 1999.
(12) Includes 1,044,130 shares issuable upon exercise of options and 739,800
shares issuable upon exercise of warrants exercisable within 60 days of
May 15, 1999. Mr. Ellis resigned as Chief Executive Officer of
Autobytel.com in June 1998. If Mr. Ellis' shares are not included in
the number of shares beneficially owned by all directors and executive
officers as a group, the number of shares owned by the directors and
executive officers would be 6,181,689 shares or 31.4% of the shares of
common stock outstanding.
7
<PAGE> 10
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation. The following table
provides certain summary information concerning compensation paid or accrued by
Autobytel.com to or on behalf of Autobytel.com's Chief Executive Officer, the
four most highly compensated executive officers of Autobytel.com and a former
executive officer of Autobytel.com who received an annual salary and bonus in
excess of $100,000 for the year ended December 31, 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term
Compensation
Awards
Annual ------------
Fiscal Year Compensation Other Securities
Name and Principal Ended ------------------ Annual Underlying
Position December 31 Salary Bonus Compensation Options (#)
------------------ ----------- ------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Peter R. Ellis.................. 1998 $219,000 $ -- $522,000(1) --
Former Chief Executive 1997 275,000 100,000 15,000 --
Officer and President 1996 123,000 321,000 11,000 --
Mark W. Lorimer................. 1998 316,000 150,000 9,000 750,000(2)
Chief Executive Officer 1997 200,000 100,000 70,000 100,000
President 1996 8,000 -- -- 333,333
Robert S. Grimes................ 1998 220,000 75,000 -- 125,000
Executive Vice President 1997 180,000 -- -- 116,667
1996 90,000 -- -- 116,667
Ann M. Delligatta............... 1998 177,000 100,000 -- 316,667(4)
Executive Vice President 1997 88,000 -- -- 83,334
and Chief Operating Officer
Michael J. Lowell............... 1998 190,000 -- -- 16,667
Senior Vice President, 1997 139,000 50,000 -- 50,000
Development 1996 15,000 -- -- 111,111
Anne Benvenuto.................. 1998 150,000 -- -- 16,667
Senior Vice President, 1997 13,000 5,000 15,000(3) 33,333
Marketing
</TABLE>
(1) Represents a one-time payment of $500,000, $14,000 for car allowance
and $8,000 for legal expenses. See "Certain Transactions."
(2) 500,000 shares of such securities underlying options are contingent on
the performance of our market trading price after the closing of our
initial public offering.
(3) Relocation expense reimbursement.
(4) 200,000 shares of such securities underlying options are contingent on
the performance of our market trading price after the closing of our
initial public offering.
8
<PAGE> 11
Stock Options. The following table sets forth the five most highly
compensated officers and certain information concerning stock options granted to
them during 1998. Autobytel.com has never issued stock appreciation rights.
Options were granted at an exercise price equal to the fair market value of a
share of common stock at the date of grant. In determining the fair market value
of a share of the common stock, the board of directors considered various
factors, including recent arms' length transactions, Autobytel.com's financial
condition and business prospects, operating results, the absence of a market for
the common stock and the risks normally associated with investments in companies
engaged in similar businesses. The term of each option granted is generally ten
years from the date of grant. Options may terminate before their expiration
dates if the optionee's status as an employee or a consultant is terminated or
upon the optionee's death or disability. Autobytel.com has not included
disclosure on Mr. Ellis as he resigned as Autobytel.com's Chief Executive
Officer in June 1998 and did not receive any option grants in 1998.
<TABLE>
<CAPTION>
Individual Grants
---------------------------------------------------------- Potential Realizable Value
Number of Percent of of Assumed Annual Rates
Securities Total Options of Stock Price Appreciation
Underlying Granted to Exercise for Option Term (3)
Options Employees Price Expiration -----------------------------
Name Granted (#)(1) in 1998 (2) ($/Share) Date 5% ($) 10% ($)
- ---- -------------- ----------- ------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Mark W. Lorimer.......... 200,000 12.3% $ 13.20 12/17/08 $ 1,660,282 $ 4,207,480
500,000 30.7% 13.20 12/17/08 4,150,705 10,518,700
50,000 3.1% 13.20 06/21/08 415,070 1,051,870
Robert S. Grimes......... 125,000 7.7% 13.20 12/17/08 1,037,676 2,629,675
Ann M. Delligatta........ 100,000 6.1% 13.20 12/17/08 830,141 2,103,740
200,000 12.3% 13.20 12/17/08 1,660,282 4,207,480
16,667 1.0% 13.20 06/21/08 138,360 350,630
Anne Benvenuto........... 16,667 1.0% 13.20 06/21/08 138,360 350,630
Michael J. Lowell........ 16,667 1.0% 13.20 06/21/08 138,360 350,630
</TABLE>
- -----------
(1) Represents options granted under the Amended and Restated 1996 Stock
Incentive Plan and the 1998 Stock Option Plan.
(2) Based on an aggregate 1,630,340 shares of common stock subject to
options granted to employees during fiscal 1998.
(3) The 5% and 10% assumed annual rates of compounded stock price
appreciation are mandated by rules of the Securities and Exchange
Commission and do not represent Autobytel.com's estimate or projection
of its future common stock prices.
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<PAGE> 12
AGGREGATED OPTION EXERCISES IN 1998 AND YEAR-END OPTION VALUES
The following table sets forth for each of the five most highly
compensated officers certain information concerning options exercised during
fiscal 1998 and the number of shares subject to both exercisable and
unexercisable stock options as of December 31, 1998. The values for
"in-the-money" options are calculated by determining the difference between the
fair market value of the securities underlying the options as of December 31,
1998 ($13.20 per share as determined by the board of directors) and the exercise
price of the officer's options. In determining the fair market value of a share
of the common stock, the board of directors considered various factors,
including recent arms' length transactions, Autobytel.com's financial condition
and business prospects, its operating results, the absence of a market for the
common stock and the risks normally associated with investments in companies
engaged in similar businesses. Autobytel.com has never issued stock appreciation
rights. We have not included disclosure on Mr. Ellis as he resigned as
Autobytel.com's Chief Executive Officer in June 1998 and holds no options.
<TABLE>
<CAPTION>
Number of Securities
Number of Underlying Value of Unexercised
Shares Unexercised Options at In-The-Money Options at
Acquired December 31, 1998 December 31, 1998 ($)
on Value ----------------------------- -----------------------------
Name Exercise(#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Mark W. Lorimer....... -- $ -- 209,999 973,334 $1,609,491 $1,290,506
Michael J. Lowell..... -- -- 104,861 72,917 725,006 241,660
Robert S. Grimes...... -- -- 245,834 162,500 2,060,004 --
Ann M. Delligatta..... -- -- 29,165 370,836 -- --
Anne Benvenuto........ -- -- 8,333 41,667 -- --
</TABLE>
EMPLOYMENT AGREEMENTS
On July 1, 1998, Autobytel.com entered into a three year employment
agreement with Mr. Mark W. Lorimer, Autobytel.com's President and Chief
Executive Officer. Under this agreement, Mr. Lorimer is entitled to a base
salary of $325,000 and a bonus as determined by the board of directors from time
to time. Mr. Lorimer is also entitled to 200,000 options which vest over two
years, 500,000 performance options which vest over seven years, unless
accelerated upon the earlier accomplishment of stock price goals. In addition,
Mr. Lorimer may participate in any medical, dental, welfare plans, insurance
coverages and any death benefit and disability benefit plans afforded to
executive employees of Autobytel.com.
If Mr. Lorimer's employment is terminated without cause or if Mr.
Lorimer terminates his employment with good reason, Mr. Lorimer is entitled to a
lump sum payment equal to the highest annual base salary in effect for the term
of the agreement multiplied by the greater of (1) the remaining balance of the
three year term or longer if there is a change of control or (2) two years. In
the event of a change of control of Autobytel.com prior to January 1, 2000, and
while Mr. Lorimer remains employed by Autobytel.com, the term of the agreement
shall automatically extend for a period of three years from the date of the
change of control.
In addition to the above, in the event Lorimer's employment is
terminated during the six month period prior to (or the first thirty-six months
following) a change of control by Mr. Lorimer for good reason or by
Autobytel.com other than for cause, disability or death, Mr. Lorimer is entitled
to a lump sum payment equal to twice the highest bonus paid to Mr. Lorimer in
the last three fiscal years plus the amount of the cost of all benefits for the
greater of the remaining balance of the term or two years.
In the event of a change of control while Mr. Lorimer is employed by
Autobytel.com or if Mr. Lorimer's employment is terminated by Autobytel.com
without cause or by Mr. Lorimer for good reason
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<PAGE> 13
during the six month period prior to a change of control, unvested time based
options shall become vested and exercisable and unvested performance-based
options shall become vested and exercisable to the extent performance targets
are met. In the event of the death or disability of Mr. Lorimer during the term
of his employment agreement, Autobytel.com shall provide Mr. Lorimer or his
successors, heirs or designees, with continued payment of Mr. Lorimer's then
current base salary and all benefits for a period of two years. If Mr. Lorimer's
severance benefits are parachute payments under the Internal Revenue Code,
Autobytel.com has agreed to make additional payments to him to compensate for
his additional tax obligations.
On December 17, 1998, Autobytel.com entered into a three year
employment agreement with Ms. Ann Marie Delligatta, Autobytel.com's Executive
Vice President and Chief Operating Officer. Under this agreement, Ms. Delligatta
is entitled to a base salary of $225,000, and a bonus in such amounts and based
on such criteria as may be established by the board of directors from time to
time. Ms. Delligatta is also entitled to 100,000 options which vest fully by
December 17, 2000 and 200,000 performance options which vest over seven years
unless accelerated upon the earlier accomplishment of stock price goals. In
addition, Ms. Delligatta may participate in any medical, dental, welfare plans,
insurance coverages and any death benefit and disability benefit plans afforded
to executive employees of Autobytel.com. If Ms. Delligatta's employment is
terminated without cause or if Ms. Delligatta terminates her employment for good
reason, Ms. Delligatta is entitled to a lump sum payment equal to the base
salary that would have been received by Ms. Delligatta if she had remained
employed by Autobytel.com for the remaining balance of the three year term. Ms.
Delligatta's employment with Autobytel.com shall terminate automatically in the
event of death or upon 30 days' written notice of termination by Autobytel.com
in the event of a disability.
On March 4, 1999, Autobytel.com entered into an employment and
severance agreement with Mr. Michael J. Lowell, Autobytel.com's Senior Vice
President, Development. Under this agreement, Mr. Lowell is entitled to a base
salary of $140,000 per year and to all ordinary and customary perquisites such
as any medical, dental, welfare plans, insurance coverages and any death benefit
and disability benefit plans afforded to executive employees of Autobytel.com.
If Mr. Lowell's employment is terminated without cause, he is entitled to a lump
sum severance payment in varying amounts depending on the date of termination.
The maximum severance payment is $232,501, payable if the effective date of
termination occurs during March 1999, and the minimum severance payment is
$90,000, payable if the effective date of termination occurs after January 2000.
Under a letter agreement dated December 18, 1998, Hoshi Printer,
Autobytel.com's Senior Vice President and Chief Financial Officer, is entitled
to a base salary of $150,000, a $50,000 bonus that was paid in connection with
the consummation of Autobytel.com's initial public offering, 150,000 options
which vest fully by January 2003 and employee benefits such as health and
insurance.
Under a letter agreement dated March 7, 1999, Ariel Amir,
Autobytel.com's Vice President, General Counsel and Secretary, is entitled to a
base salary of $175,000, 125,000 options which vest fully by March 2003 and
employee benefits, including health insurance. If Mr. Amir's employment is
terminated without cause during the first year of employment, Mr. Amir is
entitled to one year's base salary payable monthly. If Mr. Amir's employment is
terminated without cause thereafter, he is entitled to six month's base salary
payable monthly.
NON-EMPLOYEE DIRECTOR COMPENSATION
Our non-employee directors do not currently receive any cash
compensation for service on Autobytel.com's board of directors or any committee
thereof, but directors may be reimbursed for expenses incurred in connection
with attendance at board and committee meetings.
Autobytel.com's 1999 Stock Option Plan provides for an automatic grant
of a first option to purchase 20,000 shares of common stock to each non-employee
director on the date on which the person first becomes
11
<PAGE> 14
a non-employee director; provided, that if any person serving as a non-employee
director before January 14, 1999 received options for less than 20,000 shares on
the date such person became a member of the board of directors, such person will
be granted an option to purchase a number of shares equal to the difference
between 20,000 shares and the shares actually granted. After the first option is
granted to the nonemployee director, he or she will automatically be granted a
subsequent option to purchase 5,000 shares on November 1 of each subsequent year
provided he or she is then a non-employee director and, provided further, that
on such date he or she has served on the board of directors for at least six
months. First options and each subsequent option will have a term of ten years.
The shares related to the first option and each subsequent option vest in their
entirety and becomes exercisable on the first anniversary of the grant date,
provided that the option holder continues to serve as a director on such dates.
The exercise price of shares subject to the first option and each subsequent
option shall be 100% of the fair market value per share of common stock on the
date of the grant of the option.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No interlocking relationship exists between the board of directors or
compensation committee and the board of directors or compensation committee of
any other company, nor has any such interlocking relationship existed in the
past. The compensation committee of the board of directors currently consists of
Mr. Fuchs, Mr. Coats and Mr. Orton.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the board of directors administers
Autobytel.com's executive compensation program. The current members of the
compensation committee are Mr. Fuchs, Mr. Coats and Mr. Orton. Each of these
persons is a non-employee director within the meaning of Section 16 of the
Securities Act, and an "outside director" within the meaning of Section 162(m)
of the Internal Revenue Code.
General Compensation Philosophy
The role of the compensation committee is to set the salaries and
other compensation of the executive officers and certain other key employees of
Autobytel.com, and to make grants under, and to administer, the stock option and
other employee purchase and bonus plans. Autobytel.com's compensation philosophy
for executive officers is to relate compensation to corporate performance and
increases in stockholder value, while providing a total compensation package
that is competitive and enables Autobytel.com to attract, motivate, reward and
retain key executives and employees. Accordingly, each executive officer's
compensation package may, in one or more years, be comprised of the following
three elements:
o base salary that is designed primarily to be competitive
with base salary levels in effect at high technology
companies in California that are of comparable size to
Autobytel.com and with which Autobytel.com competes for
executive personnel;
o annual variable performance awards, such as bonuses,
payable in cash and tied to the achievement of
performance goals, financial or otherwise, established
by the compensation committee; and
o long-term stock-based incentive awards which strengthen
the mutuality of interests between the executive
officers and Autobytel.com's stockholders.
Executive Compensation
Base Salary. Salaries for executive officers for 1998 were generally
determined on an individual basis by evaluating each executive's scope of
responsibility, performance, prior experience and salary history, as well as the
salaries for similar positions at comparable companies.
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<PAGE> 15
Annual Incentive Awards. Autobytel.com had no formal management
incentive plan in 1998. To the extent that bonuses were paid to officers in
1998, the Compensation Committee considered several factors including:
o the position held by the executive to whom the bonus was paid;
o total compensation paid by comparable companies to similarly
situated executives;
o the performance of the executive;
o the development of Autobytel.com as measured by our growth in
revenues, purchase requests and accredited dealers; and
o the perceived increase in the value of our business.
Long-Term Incentive Awards. The compensation committee believes that
equity-based compensation in the form of stock options links the interests of
executive officers with the long-term interests of Autobytel.com's stockholders
and encourages executive officers to remain in Autobytel.com's employ. Stock
options generally have value for executive officers only if the price of
Autobytel.com's shares of common stock increases above the fair market value of
a share of common stock on the grant date and the officer remains in
Autobytel.com's employ for the period required for the shares granted to such
person to vest.
In 1998, Autobytel.com granted stock options in accordance with the
1998 Stock Option Plan. During 1998, stock options were granted to certain
executive officers as incentives for them to become employees or to aid in the
retention of executive officers and to align their interests with those of the
stockholders. Stock options typically have been granted to executive officers
when the executive first joins Autobytel.com. At the discretion of the
compensation committee, executive officers may also be granted stock options to
provide greater incentives to continue their employment with Autobytel.com and
to strive to increase the value of Autobytel.com's common stock. The number of
shares subject to each stock option granted is within the discretion of the
compensation committee and is based on anticipated future contribution and
ability to impact Autobytel.com's results, past performance or consistency
within the officer's peer group. In 1998, the compensation committee considered
these factors. The stock options generally become exercisable over a four-year
period and are granted at a price that is equal to the fair market value of
Autobytel.com's common stock on the date of grant.
Chief Executive Officer Compensation
Mr. Lorimer's base salary, target bonus, bonus paid and long-term
incentive awards for 1998 were determined by the compensation committee in a
manner consistent with the factors described above for all executive officers.
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<PAGE> 16
Internal Revenue Code Section 162(m) Limitation
The compensation committee has considered the potential impact of
Section 162(m) of the Internal Revenue Code on the compensation paid to
Autobytel.com's executive officers. Section 162(m) disallows a tax deduction for
any publicly-held corporation for individual compensation exceeding $1.0 million
in any taxable year for any of the executive officers, unless compensation is
performance-based. In general, it is the compensation committee's policy to
qualify, to the maximum extent possible, its executives' compensation for
deductibility under applicable tax laws.
Compensation Committee
Jeffrey H. Coats
Michael J. Fuchs
Kenneth J. Orton
STOCK PRICE PERFORMANCE GRAPH
We have not included a stock price performance graph in this document
since there was no public market for Autobytel.com's common stock during 1998.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires Autobytel.com's executive officers, directors and 10%
stockholders to file reports regarding initial ownership and changes in
ownership with the Securities and Exchange Commission and the Nasdaq Stock
Market. Executive officers, directors and 10% stockholders are required by
Securities and Exchange Commission regulations to furnish Autobytel.com with
copies of all Section 16(a) forms they file. Since we were not a reporting
company under the Exchange Act in 1998, no forms were required to be filed
pursuant to Section 16 or the rules promulgated thereunder by any of the
foregoing persons.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Loans
From time to time, Autobytel.com has advanced funds to Peter R. Ellis,
the former Chairman of the board of directors and Chief Executive Officer of
Autobytel.com. As of December 31, 1998, Mr. Ellis was indebted to Autobytel.com
in the amount of $250,000 plus accrued interest at the rate of 8% per year
compounded quarterly. The principal amount of the loan is due and payable on or
before March 1, 2003. Autobytel.com received a pledge of 100,657 of Mr. Ellis'
shares of common stock to secure this loan.
Advisory Agreement
Autobytel.com and Mr. Ellis, our former Chief Executive Officer and
Chairman of the board of directors, are parties to a two year advisory agreement
dated as of August 20, 1998. Under the advisory agreement, Mr. Ellis received
$500,000 on the date of execution of the agreement. Commencing on the thirteenth
month anniversary of this agreement, Mr. Ellis is entitled to receive $5,000 per
month. Mr. Ellis is entitled to participate in all employee health plans and
received a car allowance of $1,000 per month until April 30, 1999. The advisory
agreement may be terminated by Autobytel.com for cause or upon 30 days prior
written notice without cause. In the event the advisory agreement is terminated
without cause by Autobytel.com or due to his death or disability, Mr. Ellis will
still be entitled to receive his base salary and
14
<PAGE> 17
health benefits through the remainder of the term of this agreement. Mr. Ellis
has the right to terminate the advisory agreement on 90 days prior written
notice to Autobytel.com. A majority of disinterested directors approved the
advisory agreement and the loans made to Mr. Ellis from time to time.
Voting Proxy
On January 11, 1999, in consideration of Autobytel.com waiving its
right of first refusal permitting the sale of $1.4 million of common stock (at
$11.88 per share) by Mr. Ellis to "accredited investors" as such term is defined
under Rule 501 of the Securities Act, Mr. Ellis transferred to Autobytel.com the
voting power of 593,175 shares of common stock owned by Mr. Ellis for a period
that is the earlier of five years from such date or until such time as Mr. Ellis
sells the shares to a person not affiliated with Mr. Ellis.
Marketing Agreement
Auto-By-Tel Acceptance Corporation, member companies of the American
International Group, and Autobytel.com entered into a marketing agreement dated
July 22, 1996. Under this agreement, Autobytel.com, through Auto-By-Tel
Acceptance Corporation, authorizes and provides the American International Group
access to its Internet server, for the publication, display, and exhibition of
the American International Group's member companies' direct response automobile
insurance sales materials. In return, Auto-By-Tel Acceptance Corporation is paid
compensation based on a flat fee on the basis of the premiums collected from
Autobytel.com's consumers.
Under a marketing and application processing agreement dated February
1, 1997, among GE Capital, Auto-By-Tel Acceptance Corporation and Autobytel.com,
Auto-By-Tel Acceptance Corporation and Autobytel.com agreed to refer customers
seeking vehicle financing with favorable credit ratings to GE Capital. In
return, GE Capital agreed to pay Auto-By-Tel Acceptance Corporation a marketing
fee of $100.00 for each financing consummated by GE Capital under this
agreement. GE Capital is an affiliate of General Electric Capital Corporation,
which beneficially owns 1,831,903 shares of common stock. As of December 31,
1998, Auto-By-Tel Acceptance Corporation had referred customers to GE Capital to
whom GE Capital extended financing in an aggregate amount of approximately
$307,000 and received approximately $1,200 in marketing fees since the inception
of this relationship.
Issuance of Warrants
On November 10, 1998, Autobytel.com issued to Invision AG a warrant to
purchase an aggregate of 150,000 shares of common stock at an exercise price of
$13.20 per share. This warrant is currently exercisable and expires on November
10, 2001.
On December 16, 1998 and December 23, 1998, Autobytel.com issued to
Aureus Private Equity AG warrants to purchase 169,800 and 120,000 shares,
respectively, of common stock at an exercise price of $13.20 per share. These
warrants are currently exercisable and expire on December 16, 2001 and December
23, 2001, respectively. In January 1999, Peter Titz, a manager of Invision AG
and a director of Aureus Private Equity AG, was appointed to Autobytel.com's
board of directors.
On December 21, 1998, Autobytel.com issued to MediaOne Interactive
Services, Inc. a warrant to purchase an aggregate of 300,000 shares of common
stock at an exercise price of $13.20 per share. This warrant is currently
exercisable and expires on December 21, 2001. In February 1999, Richard Post, a
director of MediaOne Interactive Services, Inc., was appointed to
Autobytel.com's board of directors.
15
<PAGE> 18
RATIFICATION AND APPROVAL OF
AUTOBYTEL.COM'S INDEPENDENT PUBLIC ACCOUNTANTS
(PROPOSAL 2)
The board of directors has selected Arthur Andersen LLP to audit the
financial statements of Autobytel.com for the year ended December 31,1999.
Arthur Andersen LLP has audited Autobytel.com's financial statements since 1995.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY AND APPROVE THE SELECTION OF ARTHUR ANDERSEN LLP AS
AUTOBYTEL.COM'S INDEPENDENT PUBLIC ACCOUNTANTS FOR FISCAL 1999.
It is expected that a representative of Arthur Andersen LLP will be
present at the Annual Meeting to respond to any questions and to make a
statement on behalf of his or her firm, if such representative so desires.
RATIFICATION AND APPROVAL OF
AN INCREASE IN AUTOBYTEL.COM'S CAPITALIZATION
(PROPOSAL 3)
General
Autobytel.com's Certificate of Incorporation currently authorizes the
issuance of 50,000,000 shares of common stock and 11,445,187 shares of Preferred
Stock. On April 27, 1999, the board of directors adopted a resolution proposing
that the Certificate of Incorporation be amended to increase the authorized
number of shares of common stock to 200,000,000 shares, subject to stockholder
approval of the amendment. No change is being proposed to the authorized number
of shares of Preferred Stock.
Current Use of Shares
As of June 1, 1999, Autobytel.com had approximately shares of
common stock outstanding. As of such date, after taking into account the shares
reserved for issuance upon the exercise of Autobytel.com's stock options and
warrants, approximately shares of common stock remain available for
future issuance for other purposes.
Proposed Amendment to Amended and Restated Certificate of Incorporation
The board of directors has adopted resolutions setting forth the
proposed amendment to the second and last sentences of Article 4, Section A of
Autobytel.com's Amended and Restated Certificate of Incorporation (the
"Amendment"), the advisability of the Amendment, and a call for submission of
the Amendment for approval by Autobytel.com's stockholders at the Annual
Meeting. The following is the text of Article 4, Section A of the Amended and
Restated Certificate of Incorporation of Autobytel.com as proposed to be
amended:
"A. Classes of Stock. This Corporation is authorized to issue two
classes of stock, to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares that this Corporation is
authorized to issue is two hundred eleven million four hundred
forty-five thousand one hundred eighty-seven (211,445,187). The number
of shares of Preferred Stock authorized to be issued is eleven million
four hundred forty-five thousand one hundred eighty-seven (11,445,187),
par value $0.001 per share. The number of shares of Common Stock
authorized to be issued is two hundred million (200,000,000), par value
$0.001 per share."
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<PAGE> 19
Purpose and Effect of the Proposed Amendment
The board of directors believes that it is in Autobytel.com's best
interest to increase the number of shares of common stock that Autobytel.com is
authorized to issue in order to give Autobytel.com additional flexibility to
issue shares of common stock for proper corporate purposes which may be
identified in the future, such as to raise equity capital, to make acquisitions
through the use of stock, to establish strategic relationships with other
companies, to effect future stock splits and stock dividends and to adopt
additional employee benefit plans or reserve additional shares for issuance
under such plans. The board of directors has no immediate plans, understandings,
agreements or commitments to issue additional shares of common stock for any
purpose.
The board of directors believes that the proposed increase in the
authorized number of shares of common stock will make available sufficient
shares for use should Autobytel.com decide to use its shares for one or more of
the previously mentioned purposes or otherwise. No additional action or
authorization by Autobytel.com's stockholders would be necessary prior to the
issuance of such additional shares, unless required by applicable law or the
rules of any stock exchange or national securities association trading system on
which the common stock is then listed or quoted. Autobytel.com reserves the
right to seek a further increase in authorized shares from time to time in the
future as considered appropriate by the board of directors.
Under Autobytel.com's Amended and Restated Certificate of
Incorporation, Autobytel.com's stockholders do not have preemptive rights with
respect to common stock. Thus, if the board of directors elects to issue
additional shares of common stock, existing stockholders would not have any
preferential rights to purchase such shares. In addition, if the board of
directors elects to issue additional shares of common stock, such issuance could
have a dilutive effect on earnings per share, voting power, and share holdings
of current stockholders.
The proposed amendment to increase the authorized number of shares of
common stock could, under certain circumstances, have an anti-takeover effect,
although this is not the intention of this proposal. For example, in the event
of a hostile attempt to take over control of Autobytel.com, it may be possible
for Autobytel.com to endeavor to impede the attempt by issuing shares of the
common stock, thereby diluting the voting power of the other outstanding shares
and increasing the potential cost to acquire control of Autobytel.com. The
Amendment therefore may have the effect of discouraging unsolicited takeover
attempts. By potentially discouraging initiation of any such unsolicited
takeover attempt, the proposed Amendment may limit the opportunity for
Autobytel.com's stockholders to dispose of their shares at the higher price
generally available in takeover attempts or that may be available under a merger
proposal. The proposed amendment may have the effect of permitting
Autobytel.com's current management, including the current board of directors, to
retain its position, and place it in a better position to resist changes that
stockholders may wish to make if they are dissatisfied with the conduct of
Autobytel.com's business. However, the board of directors is not aware of any
attempt to take control of Autobytel.com and the board of directors has not
presented this proposal with the intent that it be utilized as a type of
anti-takeover device.
Vote Required
The affirmative vote of the holders of a majority of the outstanding
shares of common stock entitled to vote at the Annual Meeting, assuming a quorum
is present, is necessary for approval of the Amendment. Therefore, abstentions
and broker non-votes (which may occur if a beneficial owner of stock where
shares are held in a brokerage or bank account fails to provide the broker or
the bank voting instructions as to such shares) effectively count as votes
against the Amendment.
17
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THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS
VOTE FOR THE PROPOSAL TO RATIFY AND APPROVE THE AMENDMENT
TRANSACTION OF OTHER BUSINESS
As of the date of this Proxy Statement, the board of directors is not
aware of any matters other than those set forth herein and in the Notice of
Annual Meeting of Stockholders that will come before the meeting. Should any
other matters arise requiring the vote of stockholders, it is intended that
proxies will be voted in respect thereto in accordance with the best judgment of
the person or persons voting the proxies.
FUTURE STOCKHOLDER PROPOSALS
Autobytel.com must receive at its principal office before January 7,
2000, any proposal which a stockholder wishes to submit to the 2000 Annual
Meeting of Stockholders, if the proposal is to be considered by the board of
directors for inclusion in the proxy materials for that annual meeting.
------------------------------------------------
Please return your proxy as soon as possible. Unless a quorum
consisting of a majority of the outstanding shares entitled to vote is
represented at the meeting, no business can be transacted. Therefore, please be
sure to date and sign your proxy exactly as your name appears on your stock
certificate and return it in the enclosed prepaid return envelope. Please act
promptly to ensure that you will be represented at this important meeting.
If requested, we will furnish you the exhibit index to our registration
statement on Form S-1, relating to our initial public offering, and will furnish
any exhibit upon payment of a reasonable copy fee.
By Order of the Board of Directors
Mark W. Lorimer
President and Chief Executive Officer
June 11, 1999
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APPENDIX A
Proxy card states the following:
AUTOBYTEL.COM INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
JULY 22, 1999
Mark W. Lorimer, Hoshi Printer and Ariel Amir and each of them, with
full power of substitution, are hereby authorized to represent and to vote as
directed on this proxy the shares of common stock of autobytel.com inc. held of
record by the undersigned on June 1, 1999 at the Annual Meeting of Stockholders
to be held on July 22, 1999, and at any adjournments or postponements, as if the
undersigned were present and voting at the meeting.
The shares represented by this proxy will be voted as directed by the
stockholder. Where no direction is given when the duly executed proxy is
returned, such shares will be voted FOR each of the proposals set forth on this
proxy.
Whether or not you expect to attend the meeting, you are urged to
execute and return this proxy, which may be revoked at any time prior to its
use.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
1. ELECTION OF NOMINEES MARK W. LORIMER, RICHARD A. POST AND PETER TITZ AS
CLASS I DIRECTORS OF AUTOBYTEL.COM
FOR all nominees [ ]
WITHHOLD AUTHORITY to vote for all nominees [ ]
(Instruction: To withhold authority to vote for any nominee, write his
name in the space provided.)
.......................................................................
<PAGE> 22
2. RATIFICATION AND APPROVAL OF ARTHUR ANDERSEN LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS FOR FISCAL 1999
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. RATIFICATION AND APPROVAL OF INCREASE IN AUTHORIZED SHARES OF COMMON
STOCK FROM 50,000,000 SHARES TO 200,000,000 SHARES
FOR [ ] AGAINST [ ] ABSTAIN [ ]
NOTE: Signatures should agree with the names stenciled hereon. When signing as
executor, administrator, trustee, guardian or attorney, please give the title as
such. For joint accounts or co-fiduciaries, all joint owners or co-managers
should sign.
Dated: ________________, 1999
____________________________________________________
____________________________________________________
