<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GSV, INC.
Payment of Filing Fee (Check the appropriate box):
/x/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
GSV, INC.
116 Newark Avenue
Jersey City, NJ 07302
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on June 6, 2000
NOTICE IS HEREBY GIVEN to the stockholders of GSV, INC., a
Delaware corporation (the "Company"), that the Annual Meeting of Stockholders
(the "Meeting") will be held at the Club Hotel and Suites by Doubletree, 455
Washington Boulevard, Jersey City, NJ 07310 at 1:00 p.m., New York time, on
June 6, 2000 for the following purposes:
1. To elect a board of four (4) directors to serve until the next
Annual Meeting of Stockholders and until their respective successors are duly
elected and qualified;
2. To ratify the selection of Arthur Andersen LLP as the Company's
independent public accountants for the fiscal year ended December 31, 2000; and
3. To transact such other business as may properly be bought before the
Meeting or any postponement or adjournment thereof.
Only stockholders of the Company of record at the close of business
on April 6, 2000 are entitled to notice of and to vote at the Meeting or any
postponement or adjournment thereof.
A copy of the 1999 Annual Report accompanies this notice.
By Order of the Board of Directors,
Jeffrey S. Tauber
Chairman
Jersey City, New Jersey
May 6, 2000
RETURN OF PROXIES
A PROXY AND SELF-ADDRESSED ENVELOPE ARE ENCLOSED FOR YOUR USE IF YOU DO
NOT PLAN TO ATTEND THE MEETING IN PERSON. WE URGE EACH STOCKHOLDER WHO IS UNABLE
TO ATTEND THE MEETING TO VOTE BY PROMPTLY SIGNING AND RETURNING HIS OR HER
PROXY, REGARDLESS OF THE NUMBER OF SHARES OF STOCK HELD BY SUCH STOCKHOLDER. ANY
PROXY GIVEN BY A STOCKHOLDER MAY BE REVOKED BY THE STOCKHOLDER AT ANY TIME PRIOR
TO THE VOTING OF THE PROXY.
<PAGE>
GSV, INC.
PROXY STATEMENT
GENERAL
The enclosed proxy ("Proxy") is solicited by the Board of Directors
(the "Board") of GSV, INC., a Delaware corporation (the "Company"), for use at
the Annual Meeting of Stockholders to be held at the Club Hotel and Suites by
Doubletree, 455 Washington Boulevard, Jersey City, New Jersey 07310, on June 6,
2000 at 1:00 p.m., New York time, or at any postponement or adjournment thereof
(the "Meeting.") The matters to be considered and acted upon at the Meeting are
described in the foregoing Notice of Annual Meeting of Stockholders and this
Proxy Statement. This Proxy Statement and the related form of Proxy are being
mailed on or about May 5, 2000 to all of the stockholders of the Company of
record on April 6, 2000. Any Proxy given by a stockholder may be revoked by the
stockholder at any time prior to the voting of the Proxy by delivering a written
notice to the Secretary of the Company, by executing and delivering a later
dated Proxy or by attending the Meeting and voting in person.
The management of the Company knows of no business other than the items
specified in the Notice of Annual Meeting of Stockholders which will be
presented for consideration at the Meeting. If any other matter is properly
presented, it is the intention of the persons named in the enclosed Proxy to
vote in accordance with their best judgment.
SOLICITATION OF PROXIES
The persons named as proxies are Jeffrey S. Tauber, Chairman of the
Board and Chief Executive Officer, and Kevin Miller, President. Shares
represented at the Meeting by the enclosed Proxy will be voted in the manner
specified by the stockholder. In the absence of such specification, the shares
will be voted FOR (i) the election of each of the four persons nominated by the
Board to serve as directors; FOR (ii) the ratification of the selection of
Arthur Andersen LLP as the Company's independent public accountants for the
fiscal year ending December 31, 2000; and (iii) in the discretion of the
proxies, on such other business as may properly be brought before the Meeting.
The cost of preparing, assembling and mailing the Proxy, this Proxy Statement
and the other material enclosed will be borne by the Company. In addition to the
solicitation of proxies by use of the mails, officers and employees of the
Company, without extra remuneration, may solicit proxies personally or by
telephone or other means of communication. The Company may also request
brokerage houses, banking institutions, and other custodians, nominees and
fiduciaries, with respect to shares held of record in their names or in the
names of their nominees, to forward the proxy material to the beneficial owners
of such shares and may reimburse them for their reasonable expenses in
forwarding the proxy material.
VOTING RIGHTS
Only stockholders of record at the close of business on April 6, 2000
(the "Record Date") will be entitled to notice of and to vote at the Meeting or
any postponement or adjournment thereof. On the Record Date, the issued and
outstanding securities of the Company entitled to vote at the Meeting consisted
of 10,689,228 shares of Common Stock par value $.001 per share ("Common Stock").
There was no other class of voting securities outstanding on the Record Date.
Each outstanding share of Common Stock is entitled to one vote which may be cast
in person or by Proxy duly authorized in writing. No shares have cumulative
voting rights.
The presence in person or by Proxy at the Meeting of the holders of a
majority of the issued and outstanding shares of Common Stock shall constitute a
quorum for the transaction of business. Abstentions and broker non-votes (i.e.
shares held by brokers or nominees as to which (i) instructions have not been
received from the beneficial owners and (ii) the broker or nominee does not have
discretionary authority to vote on a particular matter) are counted as present
in determining whether the quorum requirement is satisfied. If a quorum is
present, the affirmative vote of the holders of a plurality of the shares of
Common Stock cast at the Meeting and entitled to vote will be required to act on
the election of directors. Thus, abstentions and broker non-votes will not be
included in the vote total in the election of directors and will have no effect
on the outcome of the vote. The affirmative vote of the holders of a majority of
the shares of Common Stock present at the Meeting and entitled to vote will be
required to approve the ratification of the selection of Arthur Andersen LLP as
auditors for the current fiscal year and to act on all other matters properly
brought before the Meeting. If a stockholder abstains on any such matter, the
stockholder's shares are considered present at the Meeting for such matter, but
since they are not affirmative votes for the matter, they will have the same
effect as votes against the matter. With respect to broker non-votes on such
2
<PAGE>
matter the shares are not considered entitled to vote at the Meeting for such
matter and they are, therefore, not counted in respect of such matter. Such
broker non-votes have the practical effect of reducing the number of affirmative
votes required to achieve a majority for such matter by reducing the total
number of shares from which the majority is calculated.
The stockholders vote at the Meeting by casting ballots (in person or
by Proxy) which are tabulated by a person who is appointed by the Board of
Directors before the Meeting to serve as the inspector of election at the
Meeting and who has executed and verified an oath of office.
With regard to the proposals to be acted upon at the Meeting,
dissenting stockholders do not have appraisal rights.
Stockholders who do not expect to attend the Meeting, but wish to have
their shares of stock voted at the Meeting, are urged to complete, sign, date
and return the enclosed Proxy as promptly as possible.
To the best knowledge of the Company, none of the persons who were
executive officers or directors of the Company at any time since January 1,
1999, none of the nominees for election as directors and none of the associates
of any of the foregoing, have any interest in the matters to be acted upon at
the Meeting, other than with reference to their election as directors.
3
<PAGE>
SECURITY OWNERSHIP
The following table sets forth certain information as of the Record
Date regarding the share ownership of the Company by (i) each person who is
known to the Company to be the record or beneficial owner of more than five
percent (5%) of the Common Stock; (ii) each director, each person nominated to
serve as a director, and each executive officer who is named in the executive
compensation table described in this Proxy Statement ("Named Executive
Officer"); and (iii) all directors and executive officers as a group.
<TABLE>
<CAPTION>
Amount and Nature Percentage of
of Beneficial Outstanding Shares
Name and Address of Beneficial Owner (1) Ownership (2) Owned (3)
---------------------------------------- ------------- ---------
Named Executive Officers and Directors
<S> <C> <C>
Jeffrey S. Tauber (4) 1,976,378 18.3%
Jeffrey Leist (5) 75,000 *
Howard J Kuntz III 445,775 4.2%
Richard Gilbert (6) 20,000 *
Michael Kempner (7) 8,917 *
Ian S. Phillips 470,000 4.4%
Warren Struhl (7) 8,917 *
All executive officers and directors as a group (7 persons) 3,004,987 27.6%
Beneficial Owners of in Excess of 5% (other than directors and
Named Executive Officers)
Jane S. Tauber (8) 1,976,378 18.3%
The Jeffrey S. Tauber Grantor
Retained Annuity Trust 372,424 3.5%
The Jane S. Tauber Grantor
Retained Annuity Trust 372,424 3.5%
</TABLE>
- -----------------------------
* Denotes less than 1%
(1) The address of each beneficial owner identified is c/o GSV, Inc., 116
Newark Avenue, Jersey City, NJ 07302 except for (i) Michael Kempner
which is The MWW Group, Inc., One Meadowlands Plaza, East Rutherford,
NJ 07073-2137, (ii) Warren Struhl which is c/o Awards.com, 1100 Valley
Brook Avenue, Lyndhurst, New Jersey 07071, (iii) Ian S. Phillips which
is c/o The Magellan Group, 137 Rowayton Avenue, Rowayton, CT 06853, and
(iv) Howard J. Kuntz III c/o The Magellan Group 137 Rowayton Avenue,
Rowayton, CT 06853.
(2) Unless otherwise indicated, the Company believes that all persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock beneficially owned by them. A person is deemed
to be the beneficial owner on the Record Date of securities that can be
acquired by such person within 60 days from the Record Date upon the
exercise of options or warrants.
(3) Each beneficial owner's percentage ownership is determined by assuming
(i) that options or warrants that are held by such person (but not
those held by any other person) and which are exercisable within 60
days of the Record Date hereof have been exercised, and (ii) 10,689,228
shares of Common Stock were outstanding, before any consideration is
given to such options or warrants.
(4) Consists of 572,015 shares held directly, 372,424 shares of Common
Stock in name of The Jeffrey S. Tauber Grantor Retained Annuity Trust,
with Kevin S. Miller and Jane S. Tauber as trustees and 944,439
4
<PAGE>
shares of Common Stock held in the name of Mr. Tauber's wife, Jane,
including 372,424 shares held in the name of The Jane S. Tauber Grantor
Retained Annuity Trust, with Kevin S. Miller and Jeffrey S. Tauber as
trustees. Mr. Tauber disclaims beneficial ownership of all of the
shares held in the name of the Jane S. Tauber Grantor Retained Annuity
Trust. Also includes options which are vested or which will vest within
60 days following the record date.
(5) Mr. Leist's employment with the Company ceased effective April 11,
2000.
(6) Includes current exercisable stock options and stock options which will
vest within 60 days following the record date.
(7) Includes 4,667 shares of Common Stock issuable upon exercise of current
options and additional options which will become exercisable within 60
days after the Record Date.
(8) Includes 372,424 shares of Common Stock held in the name of The Jane S.
Tauber Grantor Retained Annuity Trust, with Kevin S. Miller and Jeffrey
S. Tauber as trustees, and 1,031,939 shares of Common Stock and options
held in the name of Jeffrey S. Tauber, Mrs. Tauber's husband, including
372,424 shares held in the name of The Jeffrey S. Tauber Grantor
Retained Annuity Trust with Kevin S. Miller and Jane S. Tauber as
trustees. Jane S. Tauber disclaims beneficial ownership of all of the
shares held in the name of The Jeffrey S. Tauber Grantor Retained
Annuity Trust.
Information contained in this Proxy Statement with regard to stock
ownership was obtained from the Company's stockholders' list, filings with
governmental authorities, or from the named individual nominees, directors and
officers. The persons identified in the foregoing table disclaim beneficial
ownership of shares owned or held in trust for the benefit of members of their
families or entities with which they may be associated.
5
<PAGE>
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
The Board has nominated and proposes as nominees Michael Kempner, Ian
S. Phillips, Warren Struhl and Jeffrey S. Tauber (all of whom are members of the
present Board of the Company and all of whom have been elected for a term ending
at the Meeting) to serve as directors of the Company until the Company's next
Annual Meeting of Stockholders and until their respective successors have been
elected and qualified or until their earlier resignation or removal. No family
relationship exists among any of the executive officers and directors of the
Company. Messrs. Kempner and Struhl are independent directors of the Company.
Unless otherwise specified, shares represented by proxies will be voted
in favor of the election of all of the nominees, except that, in the event any
nominee should not continue to be available for election, such proxies will be
voted for the election of such persons as the Board may recommend unless the
Board reduces the number of directors. Management does not presently contemplate
that any of the nominees will become unavailable for any reason.
The Board of Directors Recommends a Vote "For" the Election of Each of
the Nominees.
Information Covering Nominees
The following table sets forth the names of the nominees and certain
information with regard to each nominee as of the Record Date.
<TABLE>
<CAPTION>
Principal Occupation or
Name Age Director Since Position with Company Employment, if Different
- ----- ---- --------------- --------------------- ------------------------
<S> <C> <C> <C>
Michael Kempner (1)(2)(3) 42 October 1997 Director President and Chief Executive
Officer, The MWW Group, Inc.
Ian S. Phillips 60 June 1999 Director, Chief Executive
Officer of MG Acquisition Corp.
Warren Struhl (2)(3) 38 October 1997 Director President, Awards.com, Inc.
Jeffrey S. Tauber (1) 38 October 1997 Chairman, Chief Executive
Officer and Director
</TABLE>
(1) Member of Executive Committee
(2) Member of Compensation Committee
(3) Member of Audit Committee
JEFFREY S. TAUBER has been the Chief Executive Officer, President and
Chairman of the Board of the Company since October 1997, President of the
Company from October 1997 through January 2000 and has been Managing Director of
Cybershop LLC since December 1994. Mr. Tauber was President of Avanti Linens, a
leading U.S. manufacturer of decorative bath towels, from May 1988 to May 1994.
In August 1993, Mr. Tauber founded a multi-head embroidery business that he sold
in 1994. Prior to working at Avanti he was a buyer and divisional Merchandise
Manager for Bloomingdale's from February 1984 to May 1988. His areas of
responsibility included bed pillows, blankets, sheets, women's swimwear, and
ready-to-wear. In 1987, Mr. Tauber was named Federated Buyer of the Year. Mr.
Tauber received his B.A. in Economics from Washington University in St. Louis in
1983.
6
<PAGE>
MICHAEL KEMPNER has served as a director of the Company since October
1997. Mr. Kempner, the founder of MWW Group, a public relations, investor
relations and marketing firm ("MWW"), has been its President and Chief Executive
Officer since 1986. Prior to founding MWW, Mr. Kempner was president of the
nation's first liquor-filled chocolate company, Winters Chocolates from 1984 to
1986. Mr. Kempner earned a Bachelor of Science degree from American University
in 1981.
IAN S. PHILLIPS has been the Chief Executive Officer of MG Acquisition
Corp., a wholly owned subsidiary of the Company, and a director of the Company,
since June 1999. MG Acquisition Corp. began operations through the acquisition
of The Magellan Group, Inc. in June 1999. Mr. Phillips co-founded The Magellan
Group in January 1992 as a direct marketer of high quality, branded and unique
products through traditional direct marketing channels and through its website
www.toolsforliving.com. Mr. Phillips has over 35 years in the publishing and
direct marking industry, with various positions including Circulation Director
for Rolling Stone Magazine and Circulation Manager for The New Yorker Magazine.
Mr. Phillips attended Santa Monica City College and UCLA.
WARREN STRUHL has served as a director of the Company since October
1997. Mr. Struhl is a co-founder and President of Awards.com, a company
specializing in incentive based products for sale over the Internet. Mr. Struhl
is also currently the Chairman of Genesis Direct, Inc. ("Genesis Direct") a
catalog and direct marketing company he founded in 1995 which has done business
under the name Proteam.com, and for which he has previously held the positions
of President and Chief Executive Officer. In August 1999, Genesis Direct
announced that it had filed a voluntary petition to reorganize under Chapter 11
of the United States Bankruptcy Code. Mr. Struhl founded Paper Direct Inc., a
mail catalog, in 1988 and was its President from 1989 until 1995. Mr. Struhl
received a B.A. in Sociology from Tulane University in 1984.
Information Concerning the Board of Directors and Committees
The business and affairs of the Company are managed by the Board of
Directors, which met thirteen times during the fiscal year ended December 31,
1999. During the fiscal year ended December 31, 1999, all current directors
attended 75% or more of the total number of meetings of the Board and the
Committees on which they served.
The Board maintains three standing committees ("Committees"): the
Executive Committee, the Compensation Committee and the Audit Committee.
The Executive Committee, consisting of Jeffrey S. Tauber and Michael
Kempner has all the powers of the Board of Directors in the management of the
business and affairs of the Company except as such powers are limited by the
Delaware General Corporation Law. The Executive Committee did not meet during
1999.
The Compensation Committee, consisting of Michael Kempner and Warren
Struhl, makes recommendations to the Board concerning compensation, including
incentive arrangements, of the Company's officers and other key employees,
including those executive officers who also serve on the Board, and under the
Company's stock option plans, makes determinations of the persons to whom
options should be granted and the number of options to be granted to such
persons. The Compensation Committee met once during 1999.
The Audit Committee, consisting of Michael Kempner and Warren Struhl,
makes recommendations to the Board regarding the engagement of the Company's
independent public accountants, evaluates the results and scope of the audit,
reviews the financial statements and evaluates the adequacy of the Company's
internal control procedures. The Audit Committee did not meet during 1999.
7
<PAGE>
EXECUTIVE OFFICERS
Set forth below is certain information as of the Record Date regarding the
executive officers of the Company:
<TABLE>
<CAPTION>
Executive
Name Age Position with Company Officer Since
- ---- --- --------------------- -------------
<S> <C> <C> <C>
Jeffrey S. Tauber 38 Chairman, Chief Executive Officer and October 1997
Director
Kevin Miller 39 President February 2000
Jeffrey Leist 53 Senior Vice President, Chief Operating and February 1999
Chief Financial Officer
Ian S. Phillips 60 Chief Executive Officer of MG Acquisition June 1999
Corp.
Howard J. Kuntz III 48 Chief Operating Officer of MG Acquisition June 1999
Corp.
Richard Gilbert 35 Vice President, Planning and Development May 1998
</TABLE>
Additional information with respect to Jeffrey S. Tauber and Ian S.
Phillips is set forth under "Information Covering Nominees."
KEVIN S. MILLER has served as President since February 2000. Prior to
joining the Company, Mr. Miller was a principal of Credit Research & Trading,
LLC, an investment, research and trading firm focused primarily on special
situations and distressed debt and equity securities. During his tenure at
Credit Research, the firm also built an investment banking practice focused
primarily on issuance of private placement debt and equity securities for small
to mid-cap companies. At Credit Research, Mr. Miller was responsible for
analyzing financial, operating, legal, and restructuring issues and advising
companies and their creditors regarding resolution of these issues. Mr. Miller
worked closely with major U.S. hedge funds in the analysis and formulation of
investment strategies for the trading of debt and equity securities. Mr. Miller
served as Managing Member of the firm's Principals' Committee from 1997 until
leaving the firm to join the Company. Before joining Credit Research in 1995,
Mr. Miller was an attorney at Berlack, Israels & Liberman, a law firm
specializing in corporate restructurings and creditors' rights. In that capacity
he worked closely with financial advisors to analyze operational, financial and
legal issues in the formulation and implementation of restructuring strategies.
While at Berlack, Israels, Mr. Miller was responsible for restructuring
companies with more than five billion dollars of debt. Mr. Miller received his
JD from Boston University School of Law in 1986 and his BA from Washington
University in St. Louis.
JEFFREY LEIST served as Senior Vice President and Chief Operating
Officer commencing February 1999 and as Chief Financial Officer commencing April
1999 ending with his resignation in April 2000. From February 1996 to August
1998 Mr. Leist served as Chief Operating Officer and Chief Financial Officer of
News America Digital Publishing, a division of News Corporation, a media company
controlled by Rupert Murdoch. The News America operations included TV Guide
Online, the Fox Sports and Fox News web sites, Kesmai and News Internet
services. From January 1994 to February 1996, Mr. Leist served as Executive Vice
President of Operations for the Technology Group. Mr. Leist is a certified
public accountant and received a B.S. in Accounting from Indiana University.
HOWARD J. KUNTZ III has been Chief Operating Officer of MG Acquisition
Corp., a wholly owned subsidiary of the Company, since June 1999. MG Acquisition
Corp. began operations through the acquisition of The Magellan Group, Inc. in
June 1999. Mr. Kuntz co-founded The Magellan Group in January 1992 as a direct
marketer of high-quality, branded and unique products through traditional direct
marketing channels and through its website www.toolsforliving.com. Mr. Kuntz has
over 25 years experience in the publishing, direct marketing and advertising
industries including various management positions with Time Inc., Benton &
Bowles, and NW Ayer. Mr. Kuntz is a graduate of the University of Connecticut.
8
<PAGE>
RICHARD GILBERT served as Vice President, Planning and Development from
July 1999 until his resignation in February 2000. Mr. Gilbert joined the Company
as Director, Strategic Planning in May 1998. Prior to joining the Company, Mr.
Gilbert had been a management consultant for over eight years, with Price
Waterhouse and Booz Allen & Hamilton specializing in new media and
telecommunications strategy development and acquisition analysis.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the aggregate compensation paid to or
accrued by the Company or its subsidiaries during each of the last three fiscal
years reflecting all compensation awarded to, earned by or paid by the Company
to Jeffrey S. Tauber, its Chief Executive Officer, and each of the four most
highly compensated executive officers, other than the Chief Executive Officer,
whose annual base salary and bonus compensation exceeded $100,000 during the
fiscal year ended December 31, 1999 (the "Named Executive Officers").
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
Name and Principal --------------------------------------- ------------
Securities
- ------------------ Other Annual Underlying All Other
Position Year Salary ($) Bonus($) Compensation Options Compensation(1)
- -------- ---- ---------- -------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey S. Tauber 1999 $ 250,000 --- --- --- $3,540
Chairman and Chief 1998 190,000 --- --- --- ---
Executive Officer 1997 162,500 --- --- --- ---
Jeffrey Leist 1999 208,300 --- --- --- ---
Chief Operating and Chief 1998 --- --- --- --- ---
Financial Officer 1997 --- --- --- --- ---
Ian S. Phillips 1999 131,250 --- --- --- ---
Chief Executive Officer of 1998 --- --- --- --- ---
MG Acquisition Corp. 1997 --- --- --- --- ---
Howard J. Kuntz III 1999 131,250 --- --- --- ---
Chief Operating Officer of 1998 --- --- --- --- ---
MG Acquisition Corp. 1997 --- --- --- --- ---
Richard Gilbert 1999 116,500 --- --- --- 1,725
Vice President, Planning 1998 71,500 --- --- --- ---
and Development 1997 --- --- --- --- ---
</TABLE>
(1) "All Other Compensation" for fiscal 1999 is comprised of the Company's
contributions to the Cybershop LLC 401(k) Savings Plan.
9
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth, for each of the Named Executive
Officers, information regarding individual grants of options made in the last
fiscal year, and their potential realizable values.
<TABLE>
<CAPTION>
Individual Grants
- -----------------------------------------------------------------------------------------
Present Value
% of Total of Grant at
Options Date of Grant
Granted Using the
Options to Employees in Exercise or Expiration Black-Scholes
Name Granted Fiscal Year Base Price Date Model(1)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jeffrey S. Tauber 175,000 24.6% $ 7.500 6/3/04 $1,009,750
Jeffrey Leist 150,000 21.0% 6.750 3/3/04 778,500
50,000 7.0% 6.500 10/17/04 250,000
Ian S. Phillips --- --- --- --- ---
Howard J. Kuntz III --- --- --- --- ---
Richard Gilbert 15,000 2.1% 7.500 6/3/04 86,550
25,000 3.5% 6.500 10/17/04 125,000
</TABLE>
- --------------------
(1) Calculated using the Black-Scholes option-pricing model with the
following assumptions: volatility of 131.0%, risk-free interest rate of
6.5% and an expected life of three years. The Black-Scholes option
valuation model was developed for use in estimating the fair value of
traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price
volatility. Because the Company's stock options have characteristics
significantly different from those of traded options, and because
changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the Black-Scholes model
does not necessarily provide a reliable measure of the fair value of
the Company's stock options.
10
<PAGE>
Aggregated Option/SAR Exercises during Fiscal 1999 and Year End
Option/SAR Values
The following table provides information related to options exercised
by the Named Executive Officers during fiscal 1999 and the number and value of
options held at December 31, 1999 which are currently exercisable. There are no
outstanding stock appreciation rights.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In the Money Options/
Acquired Options/SARs at FY-End SARs at FY-End
on Value ----------------------- --------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- --------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey S. Tauber --- $--- --- 175,000 $--- $---
Jeffrey Leist --- --- --- 200,000 --- ---
Ian S. Phillips --- --- --- --- --- ---
Howard J. Kuntz III --- --- --- --- --- ---
Richard Gilbert --- --- 20,000 80,000 $16,247 $32,493
</TABLE>
Directors' Compensation
Non-employee directors currently receive a fee of $500 per meeting for
service on the Board of Directors on any committee thereof. Directors are
eligible to receive options under the Company's 1998 Stock Option Plan and 1998
Director's Stock Option Plan (the "1998 Directors Plan").
Pursuant to the 1998 Directors Plan each member of the Board of
Directors who is not an employee of the Company who is elected or continues as a
member of the Board of Directors is entitled to receive annually options to
purchase 3,000 shares of Common Stock at an exercise price equal to the fair
market value on the date of grant, which options vest on the first anniversary
of the date of grant.
Employment Agreements, Termination of Employment and Change in Control
Arrangements
In February 1999 the Company entered into an employment agreement with
Jeffrey Leist, the Company's Senior Vice President, Chief Operating Officer and
Chief Financial Officer, which provides for a base salary of $250,000 per annum.
In connection with his agreement, the Company also agreed to grant Mr. Leist
non-qualified stock options to purchase 150,000 shares of Common Stock, which
options vest over a two-year period. Mr. Leist terminated his services with the
Company effective April 11, 2000.
In June 1999, the Company entered into an employment agreement with Ian
S. Phillips, the Company's Chief Executive Officer of MG Acquisition Corp.,
which provides for a base salary of $225,000 per annum. Mr. Phillips' agreement
is for an initial term of two years.
In June 1999, the Company entered into an employment agreement with
Howard J. Kuntz III, the Company's Chief Operating Officer of MG Acquisition
Corp., which provides for a base salary of $225,000 per annum. Mr. Kuntz's
agreement is for an initial term of two years.
In February 2000 the Company entered into an employment agreement with
Kevin Miller, the Company's President, which provides for a base salary of
$75,000 per annum. In connection with his agreement, the Company also agreed to
grant Mr. Miller non-qualified stock options to purchase 500,000 shares of
Common Stock, which options vest over a two-year period. Mr. Miller's agreement
is for an initial term of two years.
11
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Michael Kempner and Warren
Stuhl. None of these individuals is an officer or employee of the Company or any
of its subsidiaries.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation of the Company's executives is subject to review and
approval of the two-member Compensation Committee of the Company's Board of
Directors. Each member of the Compensation Committee is a non-employee director.
Pursuant to rules recently adopted by the Securities and Exchange
Commission ("SEC") designed to enhance disclosure of companies' policies
regarding executive compensation, set forth below is a report submitted by the
members of the Compensation Committee addressing the Company's compensation
policies for 1999 as they affected the Company's executive officers generally
and, in particular, as they affected Jeffrey S. Tauber, Chairman and Chief
Executive Officer of the Company.
Compensation Policies Regarding Executive Officers
The Compensation Committee's executive compensation policies are
intended to provide competitive levels of compensation to attract and retain
qualified executives, to recognize individual contributions to the successful
achievement of the Company's business objectives, and to align managements' and
shareholders' interests in the enhancement of shareholder value over the long
term.
Elements of Executive Compensation
The Company's executive compensation program has three components: (1)
annual cash compensation in the form of base salary and discretionary bonus
payments, (2) long-term incentive compensation in the form of stock options
granted under the Company's 1998 Stock Option Plan and (3) other compensation
and employee benefits generally available to all employees of the Company, such
as health insurance. Annual cash compensation is primarily designed to reward
current performance. Long-term incentives and other compensation and employee
benefits are primarily designed to create performance incentives over the long
term for executive officers and employees.
Base Salary. The base salary for each executive officer is set at a
level deemed sufficient to attract and retain qualified officers. The
Compensation Committee has generally determined target base salaries according
to the average base salaries paid by benchmark Internet commerce and retail
companies. Aggregate base salary increases are intended to maintain compensation
levels that are in line with leading companies in related fields, while
individual base salary increases are set to reflect individual performance
levels.
Long-Term Incentives. The grant of stock options is the Company's
current method for providing long-term incentive compensation to its employees.
The Compensation Committee believes that the use of stock options attracts and
retains qualified personnel for positions of substantial responsibility and also
serves to motivate its executive officers to promote the success of the
Company's business and maximize stockholder value.
The Company's 401(k) Plan is a broad-based employee benefit plan in
which the executive officers are permitted to participate on the same terms as
non-executive employees who meet applicable eligibility criteria, subject to any
legal limitations on the amounts that may be contributed or the benefits that
may be payable under the plan. The Company matches the contributions of
participating employees, including executive officers, up to a certain level
determined by the Board of Directors. Benefits under the 401(k) Plan are not
tied to Company performance.
12
<PAGE>
1999 Compensation of Chief Executive Officer
The SEC regulations require the Compensation Committee to disclose the
Committee's bases for compensation reported for Mr. Tauber in 1999 and to
discuss the relationship between such compensation and the Company's performance
during the last fiscal year.
The Compensation Committee's decisions with respect to 1999
compensation paid to Mr. Tauber was based on the factors discussed above
applicable to all of the Company's executive officers.
SUBMITTED BY THE COMPENSATION COMMITTEE OF THE COMPANY'S BOARD OF DIRECTORS
Michael Kempner Warren Struhl
13
<PAGE>
Performance Graph
Set forth below is a line graph comparing the Company's cumulative
total stockholder return on its Common Stock since March 23, 1998, the date the
Common Stock began trading on the NASDAQ Small Cap Market through December 31,
1999 (as measured by dividing the difference between the Company's share price
at the beginning and the end of the measurement period by the share price at the
beginning of the measurement period) with (i) the cumulative total return of the
NASDAQ Stock Market Index of U.S. Companies and (ii) the cumulative total return
of the Media General Internet Software and Services Index. The Common Stock
currently trades on the NASDAQ National Market System.
Comparison Of Cumulative Total Return*
GSV, Inc. Common Stock, NASDAQ Market Index and Media General Group Index
[CHART - LINE GRAPH]
<TABLE>
<CAPTION>
MEDIA GENERAL INTERNET
MEASUREMENT PERIOD GSV, INC. NASDAQ MARKET INDEX SOFTWARE AND SERVICES INDEX
------------------ --------- ------------------- ---------------------------
<S> <C> <C> <C>
3/23/98 100.00 100.00 100.00
12/31/98 130.00 120.19 262.94
12/31/99 62.86 211.98 765.26
</TABLE>
*Assumes that the value of an investment in the Common Stock and in each index
was $100 on March 23, 1998 and that any dividends were reinvested.
14
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF SELECTION
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board has approved the engagement of Arthur Andersen LLP as the
independent public accountants of the Company for the fiscal year ending
December 31, 2000. Arthur Andersen LLP has audited the Company's financial
statements since its inception. The Board believes it is appropriate to submit
for ratification by the stockholders its selection of Arthur Andersen LLP as the
independent public accountants of the Company.
The Company is advised that neither that firm nor any of its partners
has any material direct or indirect relationship with the Company. The Board
considers Arthur Andersen LLP to be well qualified for the function of serving
as the Company's independent public accountants.
Representatives of Arthur Andersen LLP are expected to be present at
the Meeting, will have the opportunity to make a statement if they desire to do
so and are expected to be available to respond to appropriate questions.
Unless otherwise specified, shares represented by proxies will be voted
for the ratification of Arthur Andersen LLP as the independent public
accountants for the Company. If the stockholders do not so approve, the
selection of independent public accountants will be reconsidered by the Board.
Recommendation of the Board of Directors
The Board of Directors recommends a vote FOR Proposal No. 2.
OTHER BUSINESS
Management of the Company knows of no other business which will be
presented for consideration at the Meeting, but should any other matters be
brought before the Meeting, it is intended that the persons named in the
accompanying proxy will vote such proxy in their discretion.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For options granted to executive officers see "Management."
The Board of Directors has adopted a policy to provide that
transactions between the Company and its officers, directors and other
affiliates must (i) be approved by a majority of the members of the Board of
Directors and by a majority of the disinterested members of the Board of
Directors, (ii) be on terms no less favorable to the Company than could be
obtained from unaffiliated third parties and (iii) be for bona fide business
purposes only.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires officers and directors of the Company and holders of more than 10% of
the Common Stock (collectively "Reporting Persons") to file reports of initial
ownership, ownership and changes in ownership of the Common Stock with the
Securities and Exchange Commission within certain time periods and to furnish
the Company with copies of all such reports. Based solely on its review of
copies of such reports furnished to the Company by such Reporting Persons or on
the written representations of such Reporting Persons that no reports on Form 5
were required, the Company believes that, during the fiscal year ended December
31, 1999, all of the Reporting Persons complied with their Section 16(a) filing
requirements.
15
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS
The Company has engaged Arthur Andersen LLP as independent public
accountants for the Company's fiscal year ending December 31, 2000.
Representatives of Arthur Andersen LLP are expected to be present at the
Meeting, will have the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended December 31,
1999 is being furnished herewith to stockholders of record of the Company on the
Record Date.
SHAREHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Any stockholder desiring to present proposals to stockholders at the
next Annual Meeting of the Company must transmit such proposal to the Company in
writing and such proposal must be received by the Secretary of the Company at
its offices no later than January 5, 2001. All such proposals should be in
compliance with applicable SEC regulations.
By Order of the Board of Directors
Jeffrey S. Tauber
Chairman
16
<PAGE>
GSV, INC.
FORM OF PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
June 6, 2000
The undersigned hereby appoints JEFFREY S. TAUBER and KEVIN MILLER, as
Proxies, with the power to appoint his substitute, and hereby authorizes each of
them to represent and to vote, as designated below, all of the shares of Common
Stock, $.001 par value, of GSV, INC., held of record by the undersigned at the
close of business on April 6, 2000 at the Annual Meeting of Stockholders (the
"Meeting") of GSV, INC. on June 6, 2000, at 1:00 pm, or at any adjournments
thereof.
1. Election of Directors
|_| FOR all nominees listed below |_| WITHHOLD AUTHORITY
(except for any nominee listed below) to vote for all nominees
listed below
INSTRUCTION: to withhold authority to vote for an individual nominee, mark
FOR and write that nominee's name below.
NOMINEES: Michael Kempner, Ian S. Phillips, Warren Struhl and Jeffrey S.
Tauber
2. To ratify the selection of Arthur Andersen LLP as independent public
accountants for the fiscal year ending December 31, 2000.
|_| FOR |_| AGAINST |_| ABSTAIN
3. In their discretion, the Proxy is authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
(To be signed below)
<PAGE>
Please sign exactly as your name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please indicate the capacity in which
signing. When signing as a corporation, please give your full corporate name and
sign by the president or other authorized officer. If a partnership, please sign
in partnership name by authorized person.
DATED: , 2000
----------------
-----------------------------
Shareholder Name
-----------------------------
Shareholder Signature
-----------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
