SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
GSV, 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 the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No Fee Required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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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 filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value transaction:
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5. Total fee paid:
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|_| 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 number, or
the Form or Schedule and the date of its filing.
1. Amount previously paid:
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2. Form, Schedule or Registration Statement No.:
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GSV, INC.
116 Newark Avenue
Jersey City, NJ 07302
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on August 30, 2000
NOTICE IS HEREBY GIVEN to the stockholders of GSV, INC., a Delaware
corporation (the "Company"), that a Special Meeting of Stockholders (the
"Meeting") will be held at the offices of the Company at 116 Newark Avenue,
Jersey City, NJ 07302 at 10:00 a.m., New Jersey time, on August 30, 2000 for the
following purposes:
1. To approve a one for five reverse stock split of the Company's issued
and outstanding Common Stock; and
2. To transact such other business as may properly be brought before the
Meeting or any postponement or adjournment thereof.
Only stockholders of the Company of record at the close of business on
July 10, 2000 are entitled to notice of and to vote at the Meeting or any
postponement or adjournment thereof.
By Order of the Board of Directors,
/s/ Jeffrey S. Tauber
Jeffrey S. Tauber
Chairman
Jersey City, New Jersey
July 31, 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.
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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 a
Special Meeting of Stockholders to be held at the offices of the Company at 116
Newark Avenue, Jersey City, NJ 07302 on August 30, 2000 at 10:00 a.m., New
Jersey 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 Special Meeting of Stockholders and this Proxy Statement.
This Proxy Statement and the related form of Proxy are being mailed on or about
July 31, 2000 to all of the stockholders of the Company of record on July 10,
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 Special 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 one for five reverse stock split of the Company's issued and outstanding
Common Stock; and (ii) 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 July 10, 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
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("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 majority of the shares of
Common Stock present in person or represented by proxy at the Meeting and
entitled to vote will be required to approve a one for five reverse stock split
of the Company's issued and outstanding Common Stock 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 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.
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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, 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
("Named Executive Officers"); and (iii) all directors and executive officers as
a group.
Amount and
Nature Percentage of
of Beneficial Outstanding
Name and Address of Beneficial Owner (1) Ownership (2) Shares Owned (3)
---------------------------------------- ------------- ----------------
Named Executive Officers and Directors
Jeffrey S. Tauber (4) 1,976,378 18.3%
Jeffrey Leist (5) 75,000 *
Howard Kuntz III 445,775 4.2%
Richard Gilbert (6) 0 *
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
(9 persons) 3,180,172 28.7%
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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%
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* 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 which is c/o The Magellan Group, 137 Rowayton Avenue,
Rowayton, CT 06583.
(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 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
87,500 options which are vested as of the Record Date.
(5) Includes Common Stock options that were exercisable as of the Record Date.
Mr. Leist's employment with the Company ceased effective April 11, 2000.
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(6) No Common Stock options were exercisable as of the Record Date. Mr.
Gilbert's employment with the Company ceased effective February 9, 2000.
(7) Includes Common Stock options that were exercisable as of 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.
PROPOSAL NO. 1:
APPROVAL OF THE REVERSE STOCK SPLIT
The Board of Directors believes it would be in the best interest of the
Company and its stockholders to effect a reverse stock split of five shares of
the Company's issued and outstanding Common Stock into one new share of Common
Stock (the "Reverse Stock Split"). In this regard, the Board has unanimously
approved, and recommends to stockholders that they approve, the Reverse Stock
Split, as described herein. The Reverse Stock Split will be effected by the
filing of an amendment to the Company's Certificate of Incorporation, which
contains the changes relating to the Reverse Stock Split, substantially as set
forth in Exhibit A to this Proxy Statement.
If the Reverse Stock Split is approved, each of five shares of the
Company's Common Stock would be changed into one share of Common Stock. The par
value of the Common Stock would not be changed from $.001 per share. Cash in
lieu of fractional shares would be paid to the stockholders upon the sale of
such fractional interest in an amount equal to the product obtained by
multiplying (a) the closing sale price per share of the Common Stock as reported
by Nasdaq Small Cap on the last trading day preceding the Effective Date by (b)
the number of shares of Old Common Stock held by such holder that would
otherwise have been exchanged for such fractional share interest. Conversion
rates for the number of shares issuable upon exercise of outstanding warrants
and options and the exercise price per share will be adjusted accordingly.
There are presently 75,000,000 shares of Common Stock authorized by the
Company's Certificate of Incorporation, as amended. The number of authorized
shares of Common Stock will not be reduced by the Reverse Stock Split. As of the
Record Date, there were 10,689,228 shares of
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Common Stock issued and outstanding and 3,593,688 shares of Common Stock
reserved for issuance upon the conversion or exercise of outstanding warrants
and options. Upon adoption of the Reverse Stock Split, the number of shares of
Common Stock issued and outstanding will be approximately 2,137,846 and the
number of shares of Common Stock reserved for issuance in connection with
outstanding warrants and options will be approximately 718,738.
PURPOSES OF THE REVERSE STOCK SPLIT
The Common Stock is currently listed on the Nasdaq National Market
("Nasdaq"). The Company has failed to maintain a minimum bid price of $1.00 for
the Common Stock over 30 consecutive trading days as required for continued
listing on Nasdaq. The Company has been informed by Nasdaq that it will be
provided 90 calendar days, or until September 18, 2000, to regain compliance
with this requirement. However, if the Company is unable to demonstrate
compliance on or before September 18, 2000, then the Common Stock will be
delisted from Nasdaq at the opening of business on September 20, 2000.
If the Company's Common Stock were delisted from Nasdaq, it could become
subject to Rule 15g-9 under the Securities Exchange Act of 1934, as amended,
which imposes additional sales practice requirements on broker-dealers that sell
penny stocks to persons other than established customers and institutional
accredited investors. For transactions covered by this Rule, a broker-dealer
must make a special suitability determination for the purchaser and have
received the purchaser's written consent to the transaction before the sale.
Consequently, the Rule may affect the ability of the broker-dealers to sell the
Company's Common Stock and may affect the ability of stockholders to sell their
Common Stock.
The Securities and Exchange Commission has adopted regulations that
generally define a penny stock to be any non-Nasdaq Stock Market equity security
that has a market price (as therein defined) or less than $5.00 per share,
subject to certain exceptions. For any transaction by broker-dealers involving a
penny stock, unless exempt, the rules require delivery, before a transaction in
a penny stock, of a risk disclosure document relating to the penny stock market.
Disclosure is also required to be made about compensation payable to both the
broker-dealer and the registered representative, and current quotations for the
securities. Finally, monthly statements are required to be sent disclosing
recent price information for the penny stock held in the account and information
on the limited market in penny stocks. If the Company's securities were subject
to the rules on penny stocks, the market liquidity for the Company's securities
could be severely adversely affected.
The Board of Directors believes that a Reverse Stock Split will enable the
Company to maintain its listing of the Company's Common Stock on Nasdaq. In
order for a security to maintain its eligibility for listing on Nasdaq, such
security must have a minimum bid price of $1.00 for a sustained period. As of
the Record Date, the minimum bid price of the Common Stock was $0.281 per share,
as reported by Nasdaq. If effected, the Reverse Stock Split will reduce the
number of shares of Common Stock issued and outstanding. The Board expects that
such reduction will result in an increase in the bid price of the Common Stock
to a level above the current bid price and to at least $1.00 per share. However,
since there are numerous factors and contingencies that could affect the bid
price of the Common Stock, there can be no assurance that such increase in the
bid price will occur, or if it occurs, that the bid price will be at least $1.00
per share for a sustained period.
In addition, the Board of Directors believes that the Reverse Stock Split
should enhance the acceptability of the Common Stock by the financial community
and investing public. The reduction in the number of issued and outstanding
shares of Common Stock caused by the Reverse Stock Split is anticipated
initially to increase proportionately the per share market value of the Common
Stock. The Board also believes that the Reverse Stock Split may result in a
broader market for the Common Stock than that which currently exists. The
expected increase price level may encourage interest and trading in the Common
Stock and possibly promote greater liquidity for the Company's stockholders,
although such liquidity could be adversely affected by the reduced number of
shares of Common Stock outstanding after the Effective Date (as defined herein)
of the Reverse Stock Split.
The Board of Directors believes that some of the practices and policies of
brokerage firms tend to discourage individual brokers within those firms from
dealing with lower priced stocks. Some of those practices and policies pertain
to the payment of broker's commissions and to time consuming procedures that
function to make the handling of lower priced stocks economically unattractive
to brokers. In addition, the structure of trading commissions also tends to have
an adverse impact upon holders of lower priced stock because the brokerage
commissions on the
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sale of lower priced stocks generally represent a higher percentage of the sales
price than the commissions on relatively higher priced stocks. The Reverse Stock
Split could result in a price level for the Common Stock that will reduce, to
some extent, the effect of the above-referenced policies and practices of
brokerage firms and diminish the adverse impact of trading commissions on the
market for the Common Stock.
The Board makes no assurance that the market value of the Common Stock
will rise in proportion to the reduction in the number of outstanding shares
resulting from the Reverse Stock Split. Accordingly, there can be no assurance
that the foregoing objectives will be achieved or that the market price of the
Common Stock resulting upon implementation of the Reverse Stock Split will be
maintained for any period of time.
POTENTIAL EFFECTS OF THE REVERSE STOCK SPLIT
Pursuant to the Reverse Stock Split, each holder of five shares of Common
Stock, par value $.001 per share ("Old Common Stock"), immediately prior to the
effectiveness of the Reverse Stock Split, would become the holder of one share
of Common Stock, par value $.001 per share ("New Common Stock"), after
consummation of the Reverse Stock Split.
On the Effective Date, the interest of each stockholder of record who owns
fewer than five shares of Common Stock will thereby be terminated, and he, she
or it will have no right to vote as a stockholder or share in the assets or any
future earnings of the Company. Shares of Common Stock no longer outstanding as
a result of the fractional share settlement procedure will be returned to
authorized but unissued shares of the Company.
The purpose of the Reverse Stock Split is not to reduce the number of
record holders who before the Reverse Stock Split numbered 93. The Company
currently has approximately 8,040 beneficial stockholders and after the Reverse
Stock Split will have approximately 85 record holders and approximately 8,010
beneficial stockholders.
Consummation of a Reverse Stock Split will not alter the number of
authorized shares of Common Stock, which will remain at 75,000,000 shares.
Proportionate voting rights and other rights and privileges of the holders of
Common Stock will not be altered by the Reverse Stock Split (other than as a
result of the payment of cash in lieu of fractional shares, as described above).
All issued and outstanding warrants and options would be appropriately adjusted
for the Reverse Stock Split automatically on the Effective Date.
If approved, the Reverse Stock Split will result in some stockholders
owning odd lots of less than 100 shares of Common Stock. Brokerage commissions
and other costs of transactions in odd lots are generally somewhat higher,
particularly on a per share basis, than the costs of transactions in round lots
of even multiples of 100 shares.
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INCREASE OF SHARES OF COMMON STOCK AVAILABLE FOR FUTURE ISSUANCES
As a result of the Reverse Stock Split, there will be a reduction in the
number of shares of Common Stock issued and outstanding and an associated
increase in the number of authorized shares which would be unissued and
available for future issuances after the Reverse Stock Split (the "Increased
Available Shares"). The Increased Available Shares could be used for any proper
corporate purpose approved by the Board of Directors of the Company, including,
among others, future financing transactions. However, at present the Company
does not have any plans, nor are there any proposals to use the additional
shares for future financing transactions or for any other purpose. In addition,
the Company does not have any plans, nor are there any proposals for any
business combination that would use the additional shares.
Because the Reverse Stock Split will create the Increased Available
Shares, the Reverse Stock Split may be construed as having an anti-takeover
effect. Although neither the Board of Directors nor the management of the
Company views the Reverse Stock Split as an anti-takeover measure, the Company
could use the Increased Available Shares to frustrate persons seeking to effect
a takeover or otherwise gain control of the Company by, for example, making such
shares available to a friendly purchaser in a private placement or reserving
such shares for use in connection with a stock option plan or stockholders'
rights agreement. The Company's Articles of Incorporation and By-Laws do not
presently contain other provisions having an anti-takeover effect. The Reverse
Stock Split is not part of a plan by management to adopt a series of such
amendments, nor does management plan to propose other anti-takeover measures in
future proxy solicitations. The Company does not have any agreements that
contain anti-takeover provisions. Although management does not have any present
plans to do so, management might use the additional shares to resist or
frustrate a third-party transaction providing an above-market premium that is
favored by a majority of the independent stockholders.
Additionally, stockholders should note that certain disadvantages may
result from the creation of the Increased Available Shares. In the event the
Reverse Stock Split is approved by the stockholders and effected by the Board,
the number of outstanding shares of Common Stock would be decreased as a result
of the Reverse Stock Split, but the number of authorized shares of Common Stock
would not be so decreased. The Company would therefore have the authority to
issue a greater number of shares of Common Stock following the Reverse Stock
Split without the need to obtain stockholder approval to authorize additional
shares. Any such additional shares may have the effect of significantly reducing
the interest of the existing stockholders of the Company with respect to
earnings per share, voting, liquidation value and book and market value per
share.
EFFECTIVENESS OF THE REVERSE STOCK SPLIT
The Reverse Stock Split, if approved by the Company's stockholders, would
become effective (the "Effective Date") upon the filing with the Secretary of
State of the State of Delaware of a Certificate of Amendment of the Company's
Certificate of Incorporation in substantially the form of the Reverse Stock
Split Amendment attached to this Proxy Statement as Exhibit A. It is expected
that such filing will take place on or shortly after the date of the Meeting,
assuming stockholders approve the Reverse Stock Split. However, the exact timing
of the filing of the Amendment to the Certificate of Incorporation will be
determined by the Board of Directors based upon its evaluation as to when such
action will be most advantageous to the Company and its stockholders, and the
Board of Directors reserves the right to forego or delay the Reverse Stock Split
Amendment for up to twelve months following the stockholder approval thereof.
Shortly after the Effective Date, stockholders will be asked to surrender
certificates representing shares of Old Common Stock in accordance with the
procedures set forth in a letter of transmittal to be sent by the Company. Upon
such surrender, a certificate representing shares of Common Stock resulting from
the Reverse Stock Split will be issued and forwarded to the stockholders (and
cash in lieu of any fractional share interest); however, each certificate
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representing shares of Old Common Stock will continue to be valid and represent
the number of shares of New Common Stock equal to the number of shares of Old
Common Stock (and cash in lieu of fractional shares, as described above) that
such stockholder is entitled to receive as a consequence of the Reverse Stock
Split. STOCKHOLDERS SHOULD NOT SEND THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE
A TRANSMITTAL LETTER.
After giving effect to the settlement of fractional shares of Common
Stock, there will be no material differences between the rights of the shares of
Old Common Stock outstanding prior to the Reverse Stock Split and the New Common
Stock outstanding after the Reverse Stock Split is effected.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material anticipated federal income tax
consequences of the Reverse Stock Split to stockholders of the Company. It
should be noted that this summary is based upon the federal income tax laws
currently in effect and as currently interpreted. This summary does not take
into account possible changes in such laws or interpretations, including any
amendments to applicable statutes, regulations and proposed regulations, or
changes in judicial or administrative rulings, some of which may have
retroactive effect. The summary is provided for general information only, and
does not purport to address all aspects of the range of possible federal income
tax consequences of the Reverse Stock Split and is not intended as tax advice to
any person. In particular, and without limiting the foregoing, this summary does
not account for or consider the federal income tax consequences to stockholders
of the Company in light of their individual investment circumstances or to
holders subject to special treatment under the federal income tax laws (for
example, life insurance companies, regulated investment companies, and foreign
taxpayers). This summary does not discuss any consequences of the Reverse Stock
Split under any state, local or foreign tax laws.
No ruling from the Internal Revenue Service or opinion of counsel will be
obtained regarding the federal income tax consequences to the stockholders of
the Company in connection with the Reverse Stock Split. ACCORDINGLY, EACH
STOCKHOLDER IS ENCOURAGED TO CONSULT ITS TAX ADVISER REGARDING THE SPECIFIC TAX
CONSEQUENCES OF THE PROPOSED REVERSE STOCK SPLIT TO SUCH STOCKHOLDER, INCLUDING
THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAXES, AND ANY
OTHER TAX LAWS.
The Board of Directors believes that the Reverse Stock Split would be a
tax-free recapitalization to the Company and its stockholders. If the Reverse
Stock Split qualifies as a recapitalization described in Section 368(a)(1)(E) of
the Internal Revenue Code of 1986, as amended (the "Code"), (i) no gain or loss
will be recognized by a stockholder of Common Stock who exchanges its Old Common
Stock for New Common Stock, except that a holder of Common Stock who receives
cash proceeds from the sale of fractional shares of Common Stock will recognize
a gain or loss equal to the difference, if any, between such proceeds and the
basis of its Common Stock allocated to its fractional share interests, and such
gain or loss, if any, will constitute capital gain or loss if its fractional
share interests are held as capital assets at the time of
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their sale, (ii) the tax basis for the New Common Stock received by holders of
Common Stock will be the same as the tax basis of the Common Stock exchanged
therefore, less the tax basis allocated to fractional share interests and (iii)
the holding period for shares of New Common Stock will include the holding
period of Old Common Stock exchanged therefore, provided that such Common Stock
was held as a capital asset immediately prior to the Effective Date.
Recommendation of the Board of Directors
The Board of Directors has considered this Proposal and believes that the
Reverse Stock Split of the Company's issued and outstanding shares of Common
Stock is in the best interests of its stockholders and the Company.
The Board of Directors unanimously recommends a vote FOR Proposal No. 1.
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.
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By Order of the Board of Directors
/s/ Jeffrey S. Tauber
Jeffrey S. Tauber
Chairman
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Exhibit A
CERTIFICATE OF AMENDMENT
OF
GSV, INC.
---------------------------------------------
Pursuant to Section 242 of the General
Corporation Law of the State of Delaware
---------------------------------------------
GSV, INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify as follows:
FIRST: Resolutions setting forth a proposed amendment to the Certificate
of Incorporation of the Corporation, declaring said amendment to be advisable
and directing that said amendment be considered by the stockholders of the
Corporation entitled to vote thereon were duly adopted at a meeting of the Board
of Directors held on July 12, 2000.
SECOND: Thereafter, said amendment was approved by the stockholders of the
Corporation entitled to vote thereon at a Special Meeting of Stockholders held
on August 30, 2000.
THIRD: Said amendment would amend the Certificate of Incorporation of the
Corporation by deleting the first paragraph of Article FOURTH thereof and
substituting in lieu thereof the following:
"FOURTH: The total number of shares of capital stock which may be issued
by the Corporation is Eighty Million (80,000,000), seventy-five million
(75,000,000) of which shall be Common Stock, having a par value
13
<PAGE>
of $.001 and five million (5,000,000) of which shall be preferred stock,
having a par value of $.001.
Simultaneously with the effective date of the filing of this amendment to
the Corporation's Certificate of Incorporation (the "Effective Date"),
each share of common stock, par value $.001, of the Corporation issued and
outstanding or held as treasury shares immediately prior to the Effective
Date (the "Old Common Stock") shall automatically be reclassified and
continued (the "Reverse Stock Split"), without any action on the part of
the holder thereof, as one-fifth of one share of Common Stock. The
Corporation shall not issue fractional shares on account of the Reverse
Stock Split. Holders of Old Common Stock who would otherwise be entitled
to a fraction of a share on account of the Reverse Stock Split shall
receive, upon surrender of the stock certificates formerly representing
shares of the Old Common Stock, in lieu of such fractional share, an
amount in cash (the "Cash-in-Lieu Amount") equal to the product of (i) the
average of the high-bid and low-asked per share prices of the Common Stock
as reported on the Nasdaq National Market on the Effective Date (adjusted
if necessary to reflect the per share price of the Old Common Stock
without giving effect to the Reverse Stock Split), multiplied by (ii) the
number of shares of Old Common Stock held by such holder that would
otherwise have been exchanged for such fractional share interests."
14
<PAGE>
FOURTH: Said amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by its Chairman and Chief Executive Officer this 30th day of August,
2000.
GSV, INC.
By:
---------------------------------
Jeffrey S. Tauber
Chairman, Chief Executive Officer
and President
<PAGE>
GSV, INC.
FORM OF PROXY FOR SPECIAL MEETING OF STOCKHOLDERS
August 30, 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 on the reverse side, all of the
shares of Common Stock, $0.001 par value, of GSV, Inc. held of record by the
undersigned at the close of business on July 10, 2000 at the Special Meeting of
Stockholders, (the "Meeting") of GSV, INC. on August 30, 2000 at 10:00 a.m.
local time or at any adjournments thereof.
1. To approve a five for one reverse stock split of the Company's Common
Stock.
FOR:|_| AGAINST: |_| ABSTAIN: |_|
2. In their discretion the Proxy is authorized to vote upon such other
business as may properly come before the meeting or any adjournments
thereof.
Stockholder Signature:________________________ Date:___________, 2000
Signature if held jointly:____________________ Date:___________, 2000
NOTE: Please sign exactly as your name appears above. 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.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
