<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 Rule 14a-11(c) or Rule 14a-12
theglobe.com, inc.
(Name of Registrant as Specified in Its Charter)
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: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(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): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_] 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: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
<PAGE>
[theglobe.com logo]
theglobe.com, inc.
31 West 21st Street
New York, New York 10010
May 14, 1999
Dear Stockholder:
We invite you to attend our Annual Meeting of Stockholders on Tuesday, June
8, 1999, 8:30 a.m., at the Loews New York Hotel, 569 Lexington Avenue, New
York, New York 10022.
This booklet includes the formal notice of the meeting and the proxy
statement. The proxy statement tells you about the agenda and procedures for
the meeting. In addition to specific agenda items, we will discuss generally
the operations of theglobe. We welcome your comments, and hope you will join
us.
Whether or not you plan to attend in person, it is important that your
shares be represented at the Annual Meeting. The Board of Directors recommends
that stockholders vote FOR each of the matters described in the proxy
statement to be presented at the Annual Meeting.
PLEASE DATE AND SIGN YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE
AS SOON AS POSSIBLE.
Thank you.
Sincerely,
[TODD V. KRIZELMAN SIGNATURE]
Todd V. Krizelman
Co-CEO and Co-President
[STEPHAN J. PATERNOT SIGNATURE]
Stephan J. Paternot
Co-CEO and Co-President
<PAGE>
[LOGO OF theglobe.com APPEARS HERE]
theglobe.com, inc.
31 West 21st Street
New York, New York 10010
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held June 8, 1999
theglobe.com, inc., a Delaware corporation, will hold its Annual Meeting of
Stockholders on Tuesday,June 8, 1999 at 8:30 a.m., at the Loews New York
Hotel, 569 Lexington Avenue, New York, New York 10022 for the following
purposes:
1. To elect the Board of Directors for the coming year;
2. To approve theglobe's 1998 Stock Option Plan, as amended and restated;
3. To approve theglobe's 1999 Employee Stock Purchase Plan; and
4. To transact any other business that may properly come before the
Annual Meeting.
If you own shares of theglobe as of the close of business on May 3, 1999
(the "Record Date"), you can vote those shares by proxy or at the Annual
Meeting.
New York, New York
May 14, 1999
By Order of the Board of Directors
/s/ Francis T. Joyce
Francis T. Joyce
Vice President, Chief Financial
Officer, Treasurer & Assistant
Secretary
----------------
IMPORTANT: Whether or not you expect to attend the meeting, please complete,
date and sign the enclosed proxy and mail it promptly in the enclosed envelope
in order to ensure representation of your shares. No postage is necessary if
you mail it in the United States.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Voting Rights and Solicitation of Proxies................................ 1
I.Election of Directors.................................................. 2
Nominees for Directors................................................... 2
Board Meetings and Committees of the Board............................... 5
Director Compensation.................................................... 5
Indemnification.......................................................... 5
Other Executive Officers................................................. 6
II.Approval of the 1998 Stock Option Plan, as amended and restated....... 6
Purpose of the Proposal.................................................. 6
General.................................................................. 7
Description of the Option Plan........................................... 7
Awards under the Option Plan............................................. 10
Certain Tax Information.................................................. 10
III.Approval of the 1999 Employee Stock Purchase Plan.................... 11
General.................................................................. 11
Description of the Purchase Plan......................................... 11
Security Ownership of Certain Beneficial Owners and Management........... 14
Executive Compensation................................................... 16
Summary Compensation Table............................................... 16
Aggregated Option Exercises in Last Fiscal Year and 1998 Year End Option
Values.................................................................. 17
Option Grants in 1998.................................................... 17
Employment Agreements.................................................... 18
Compensation Committee Interlocks and Insider Participation.............. 20
Certain Relationships and Related Transactions........................... 20
Compliance with Section 16(a) of the Exchange Act........................ 21
Report of the Compensation Committee of the Board of Directors........... 22
Compliance with Internal Revenue Code Section 162(m)..................... 22
Performance Graph........................................................ 23
Stockholder Proposals for the 2000 Annual Meeting........................ 23
Other Business........................................................... 24
Exhibit A: 1998 Stock Option Plan........................................ A-1
Exhibit B: 1999 Employee Stock Purchase Plan............................. B-1
</TABLE>
<PAGE>
PROXY STATEMENT
Unless otherwise indicated, share amounts contained in this proxy statement
do not reflect theglobe's2 for 1 common stock split in the form of a dividend
to stockholders of record as of May 3, 1999, payable on May 14, 1999.
The Board of Directors of theglobe.com, inc. ("theglobe", "we" or "us") is
soliciting proxies to be voted at the Annual Meeting of Stockholders to be
held on Tuesday, June 8, 1999, and at any adjournment or postponement.
This proxy statement and the accompanying proxy are first being sent to
stockholders entitled to vote at the Annual Meeting on or about May 14, 1999.
theglobe's principal executive offices are located at 31 West 21st Street, New
York, New York 10010, telephone number (212) 886-0800.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Purpose of the Annual Meeting
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Stockholders.
Each proposal is described in more detail in this proxy statement.
Record Date and Shares Outstanding
Stockholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the Annual Meeting. At the Record Date,
11,455,190 shares of common stock were issued and outstanding. The closing
price of our common stock on The Nasdaq National Market on the Record Date was
$61.50 per share.
Revocability and Voting of Proxies
Any person signing a proxy in the form accompanying this proxy statement has
the power to revoke it prior to the Annual Meeting or at the Annual Meeting
prior to the vote pursuant to the proxy. A proxy may be revoked by any of the
following methods:
. by writing a letter delivered to Francis T. Joyce, Assistant Secretary
of theglobe, stating that the proxy is revoked;
. by submitting another proxy with a later date;
. by attending the Annual Meeting and voting in person.
Please note, however, that if a stockholder's shares are held of record by a
broker, bank or other nominee and that stockholder wishes to vote at the
Annual Meeting, the stockholder must bring to the Annual Meeting a letter from
the broker, bank or other nominee confirming that stockholder's beneficial
ownership of the shares. Shares of common stock represented by properly
executed proxies will be voted at the Annual Meeting in accordance with the
instructions indicated on the proxies, unless the proxies have been revoked.
Unless we receive specific instructions to the contrary, properly executed
proxies will be voted: (i) FOR the election of each of theglobe's nominees as
a director; (ii) FOR approval of theglobe's 1998 Stock Option Plan, as amended
and restated; (iii) FOR approval of theglobe's 1999 Employee Stock Purchase
Plan; and (iv) with respect to any other matters that may come before the
Annual Meeting, at the discretion of the proxy holders. theglobe does not
presently anticipate any other business will be presented for vote at the
Annual Meeting.
List of Stockholders
A list of stockholders entitled to vote at the Annual Meeting will be
available at the Annual Meeting and for ten days prior to the Annual Meeting
during regular business hours at our offices at 31 West 21st Street, New York,
New York, by contacting the Assistant Secretary of theglobe.com.
<PAGE>
Voting at the Annual Meeting
Each share of common stock outstanding on the Record Date will be entitled
to one (1) vote on each matter submitted to a vote of the stockholders,
including the election of directors. Cumulative voting by stockholders is not
permitted.
The presence, in person or by proxy, of the holders of a majority of the
votes entitled to be cast by the stockholders entitled to vote at the Annual
Meeting is necessary to constitute a quorum. Abstentions and broker "non-
votes" are counted as present and entitled to vote for purposes of determining
a quorum. A broker "non-vote" occurs when a nominee holding shares for a
beneficial owner does not vote on a particular proposal because the nominee
does not have discretionary voting power for that particular item and has not
received instructions from the beneficial owner.
A plurality of the votes cast is required for the election of Directors.
Abstentions and broker "non-votes" are not counted for purpose of the election
of Directors.
The affirmative vote of a majority of the shares of common stock represented
and voted at the Annual Meeting is required for approval of Proposals Two
(approval of theglobe's 1998 Stock Option Plan, as amended and restated) and
Three (approval of theglobe's 1999 Employee Stock Purchase Plan). Abstentions
will have the same effect as a vote cast "against" such proposals, whereas
broker non-votes are not considered to have been voted on such proposals.
Solicitation
We will pay the costs relating to this proxy statement, the proxy and the
Annual Meeting. We may reimburse brokerage firms and other persons
representing beneficial owners of shares for their expenses in forwarding
solicitation material to beneficial owners. Directors, officers and regular
employees may also solicit proxies. They will not receive any additional pay
for the solicitation.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PROPOSAL NO. 1
ELECTION OF DIRECTORS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Nominees for Directors
The Board of Directors proposes the following nine nominees for election as
directors at the Annual Meeting. The directors will hold office from election
until the next Annual Meeting of Stockholders, or until their successors are
elected and qualified.
<TABLE>
<CAPTION>
Director
Nominee Age Position held with theglobe Since
- ------- --- --------------------------- --------
<S> <C> <C> <C>
Michael S. Egan......... 59 Chairman 1997
Todd V. Krizelman....... 25 Co-Chief Executive Officer, Co-President and Director 1995
Stephan J. Paternot..... 25 Co-Chief Executive Officer, Co-President, Secretary and Director 1995
Edward A. Cespedes...... 33 Vice President of Corporate Development and Director 1997
Rosalie V. Arthur....... 40 Director 1997
Henry C. Duques......... 56 Director 1998
Robert M. Halperin...... 70 Director 1995
David H. Horowitz....... 70 Director 1995
H. Wayne Huizenga....... 61 Director 1998
</TABLE>
2
<PAGE>
MICHAEL S. EGAN. Mr. Egan has served as our Chairman since
August 1997. Mr. Egan serves as the Chairman of our Board of
Picture Directors and as an executive officer with primary
Appears responsibility for day-to-day strategic planning and financing
Here arrangements. Mr. Egan has been the controlling investor of
Dancing Bear Investments, Inc., a privately held investment
company, since 1996. Dancing Bear Investments holds a
controlling interest in us. From 1986 to 1996, he was the
majority owner and Chairman of Alamo Rent-A-Car, Inc., now a
subsidiary of AutoNation. Mr. Egan began his career with Alamo
in 1976 and held various management and ownership positions
during this period until he bought a controlling interest in
1986. Mr. Egan is also Chairman and Chief Executive Officer of
Certified Vacations, a wholesale tour operator. Mr. Egan is a
director of Florida Panthers Holdings, Inc. and
Lowestfare.com, Inc. Mr. Egan began in the car rental business
with Olins Rent-A-Car, where he held various positions,
including President. Before acquiring Alamo, Mr. Egan held
various administrative positions at Yale University and
administrative and teaching positions at the University of
Massachusetts at Amherst. Mr. Egan is a graduate of Cornell
University, where he received a Bachelor's degree in Hotel
Administration.
TODD V. KRIZELMAN. Mr. Krizelman co-founded us in the fall of
Picture 1994. He is our Co-Chief Executive Officer and Co-President
Appears and has served in various capacities with us since our
Here founding. Mr. Krizelman graduated from Cornell University in
1996, where he received a Bachelor's degree in Biology.
STEPHAN J. PATERNOT. Mr. Paternot co-founded us in the fall of
1994. He is our Co-Chief Executive Officer, Co-President and
Picture Secretary and has served in various capacities with us since
Appears our founding. Mr. Paternot graduated from Cornell University
Here in 1996, where he received Bachelor's degrees in Business and
Computer Science.
EDWARD A. CESPEDES. Mr. Cespedes was appointed Vice President
of Corporate Development in July 1998 and has served as one of
Picture our directors since August 1997. As Vice President of
Appears Corporate Development, Mr. Cespedes has primary responsibility
Here for corporate development opportunities, including mergers and
acquisitions. Mr. Cespedes is also a Managing Director of
Dancing Bear Investments. Mr. Cespedes joined Dancing Bear
Investments at its inception in 1996, where his
responsibilities include venture capital investments, mergers
and acquisitions and finance. Before joining Dancing Bear
Investments, Mr. Cespedes served as Director of Corporate
Finance for Alamo in 1996, where he was responsible for
general corporate finance in the United States and in Europe.
From 1988 to 1996, Mr. Cespedes worked in the Investment
Banking Division of J.P. Morgan & Company, where he most
recently focused on mergers and acquisitions. Mr. Cespedes
received a Bachelor's degree in International Relations from
Columbia University.
3
<PAGE>
ROSALIE V. ARTHUR. Ms. Arthur has served as one of our
directors since August 1997. Ms. Arthur is a Senior Managing
Picture Director and Vice President of Mergers and Acquisitions of
Appears Dancing Bear Investments. She currently serves on the Board of
Here Directors of Dancing Bear Investments and several companies
affiliated with Michael Egan. She also served on the Board of
Directors of Alamo and affiliated entities and Nantucket
Nectars. Before joining Dancing Bear Investments, she served
as Chief of Staff and Financial Counselor to the Chairman of
Alamo from 1986 to 1996, when the company was sold. Ms. Arthur
was the Manager of Financial Reporting at Sensormatic
Electronics Corporation from 1984 to 1986 and worked in the
audit department of KPMG Peat Marwick from 1980 to 1984. Ms.
Arthur received her Bachelor of Science in Accounting from the
University of South Florida. She is a Certified Public
Accountant.
HENRY C. DUQUES. Mr. Duques has served as one of our directors
since September 1998. Mr. Duques is Chairman and Chief
Picture Executive Officer of First Data Corporation, a position he has
Appears held since April 1989. From September 1987 to 1989, he served
Here as President and Chief Executive Officer of the Data Based
Services Group of American Express Travel Related Services
Company, Inc., the predecessor to First Data Corporation. He
was Group President of Financial Services and a member of the
board of directors of Automatic Data Processing, Inc. from
1984 to 1987. Mr. Duques is currently a director of Unisys
Corporation. Mr. Duques holds a Bachelor of Business
Administration in Accounting and an MBA in Accounting and
Finance from George Washington University.
ROBERT M. HALPERIN. Mr. Halperin has served as one of our
directors since 1995. Mr. Halperin has acted as an advisor to
Picture Greylock Management, a venture capital firm, for the past five
Appears years. He is a member of the board of directors of Avid
Here Technology, Inc. In addition, Mr. Halperin serves on the Board
of Directors of the Associates of Harvard Business School, the
Harvard Business School Publishing Co. and Stanford Health
Services and also is a Life Trustee of the University of
Chicago. He is the former Vice Chairman of Raychem
Corporation's Board of Directors and also served as its
President and Chief Operating Officer. Mr. Halperin joined
Raychem Corporation in 1957. Mr. Halperin received a Master of
Business Administration degree from Harvard Business School,
and he earned a Bachelor's degree in liberal arts from the
University of Chicago and a Bachelor's degree in Mechanical
Engineering from Cornell University.
DAVID H. HOROWITZ. Mr. Horowitz has served as one of our
directors since December 1995. Mr. Horowitz has acted as an
Picture investor and consultant in the media and communications
Appears industries for at least the past five years, and as a
Here consultant to the American Society of Composers, Authors and
Publishers, and a Lecturer at the Columbia University School
of Law. From 1973 to 1984, Mr. Horowitz was an officer and
director of Warner Communications, Inc., and until 1985 he was
President and CEO of MTV Networks, Inc. Mr. Horowitz is a
graduate of Columbia University, where he received a
Bachelor's degree, and is a graduate of Columbia Law School.
H. WAYNE HUIZENGA. Mr. Huizenga has served as one of our
directors since July 1998. Mr. Huizenga has served as the
Picture Chairman of the Board of AutoNation since August 1995, as its
Appears Co-Chief Executive Officer since October 1996 and as its Chief
Here Executive Officer from August 1995 until October 1996. Mr.
Huizenga also serves as the Chairman of the Board and Chief
Executive Officer of Republic Services, Inc., as the Chairman
of the Board of Florida Panthers Holdings, Inc., as the
Chairman of the Board of Extended Stay America, Inc. and a
director of NationsRent, Inc. From September 1994 until
October 1995, Mr. Huizenga served as the Vice Chairman of
Viacom Inc., and as the Chairman of the Board of Blockbuster
Entertainment Group, a division of Viacom. From
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<PAGE>
April 1987 through September 1994, Mr. Huizenga served as the
Chairman of the Board and Chief Executive Officer of
Blockbuster. In September 1994, Blockbuster merged into
Viacom. In 1971, Mr. Huizenga co-founded Waste Management,
Inc. and served in various capacities, including President,
Chief Operating Officer and a director from its inception
until 1984. Mr. Huizenga also owns or controls the Miami
Dolphins professional sports franchise, and Pro Player
Stadium, located in South Florida.
- -------------------------------------------------------------------------------
Board Meetings and Committees of the Board
The Board of Directors met nine times in 1998. No incumbent director
attended less than 75% of the total number of all meetings of the Board and
any committees of the Board on which he or she served, if any, during 1998.
The functions and responsibilities of the standing Committees of the Board
of Directors are described below.
Audit Committee. This Committee, which was formed in July 1998, reviews,
acts on and reports to the Board of Directors with respect to various auditing
and accounting matters, including the selection of our independent auditors,
the scope of the annual audits, fees to be paid to the auditors, the
performance of our auditors and our accounting practices and internal
controls. The current members of this Committee are Messrs. Halperin and
Horowitz, who are non-employee directors, and Ms. Arthur. The Committee did
not meet in calendar year 1998, but held one meeting in 1999 with respect to
fiscal year 1998.
Compensation Committee. This Committee, which met once in 1999 with respect
to calendar year 1998, establishes salaries, incentives and other forms of
compensation for officers and other employees of theglobe. A subcommittee of
the Compensation Committee consisting of Messrs. Halperin and Horowitz has
been delegated authority to approve option grants under the 1998 Stock Option
Plan, as amended and restated. The current members of this Committee are
Messrs. Egan, Halperin and Horowitz and Ms. Arthur. Prior to July 15, 1998,
the members of this Committee were Messrs. Egan, Halperin, Krizelman and
Paternot.
Nominating Committee. This Committee, which was formed in July 1998, makes
recommendations to the Board for Director nominees. The current members of
this Committee are Messrs. Egan, Krizelman and Paternot. This Committee did
not meet in fiscal year 1998. Nominations for other directors in accordance
with our By-laws must be received by the Nominating Committee by the close of
business on May 24, 1999.
Director Compensation
Directors who are also our employees receive no compensation for serving on
our Board. We reimburse non-employee directors for all travel and other
expenses incurred in connection with attending Board and Committee meetings.
Non-employee directors are also eligible to receive automatic stock option
grants under our 1998 Stock Option Plan.
Under the 1998 Stock Option Plan each eligible non-employee director as of
July 15, 1998 received an initial grant of options to acquire 25,000 shares of
our common stock. Each director who became an eligible non-employee director
for the first time after July 15, 1998 received an initial grant of options to
acquire 12,500 shares of our common stock. In addition, each eligible non-
employee director will receive an annual grant of options to acquire 3,750
shares of our common stock on the first business day following each annual
meeting of stockholders that occurs while the 1998 Stock Option Plan is in
effect. These stock options will be granted with per share exercise prices
equal to the fair market value of our common stock as of the date of grant.
Indemnification
The Delaware General Corporation Law provides that a corporation may
indemnify its directors and officers for certain liabilities. We indemnify our
directors and officers to the fullest extent permitted by law so that they
will serve free from undue concern that they will not be indemnified. This is
required under our By-laws, and we have also signed agreements with each of
those individuals contractually obligating us to provide this indemnification
to them.
At the present time, there is no pending litigation or proceeding involving
a director, officer, employee or other agent of theglobe in which
indemnification would be required or permitted, and we are not aware of any
threatened litigation or proceeding which may result in a claim for
indemnification by us.
5
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE NINE
NOMINEES AS DIRECTORS OF THEGLOBE
We will vote your shares as you specify on the enclosed proxy card. If you do
not specify how you want your shares voted, we will vote them FOR the election
of all the nominees listed above. If unforeseen circumstances (such as death
or disability) make it necessary for the Board of Directors to substitute
another person for any of the nominees, we will vote your shares FOR that
other person. The Board of Directors does not presently anticipate that any
nominee will be unable to serve.
Other Executive Officers
The names of, and certain information regarding, our executive officers who
are not directors, are set forth below. The executive officers serve at the
pleasure of the Board and the Chief Executive Officers.
Dean S. Daniels. Mr. Daniels was appointed our Vice President and Chief
Operating Officer in August 1998. From February 1997 until joining us, Mr.
Daniels served as Vice President and General Manager of CBS New Media, a
subsidiary managing all of CBS Television Network's activity on the Internet.
From March 1996 to February 1997, Mr. Daniels was the Director of Interactive
Services at CBS News. From 1994 to 1996, Mr. Daniels served as Director of
Affiliate News Services at CBS NEWSPATH. From 1992 to 1994, Mr. Daniels was
Director of News of WCBS-TV, a CBS owned television station in New York.
Before that time, Mr. Daniels held various positions at WCBS-TV, including
executive producer, and was the recipient of four Emmy Awards.
Francis T. Joyce. Mr. Joyce was appointed our Vice President, Chief
Financial Officer and Treasurer in July 1998. From 1997 until joining us, Mr.
Joyce served as Chief Financial Officer of the Reed Travel Group, a division
of Reed Elsevier Plc, which is an international publisher of travel
information. From 1994 to 1997, Mr. Joyce was the Chief Financial Officer at
Alexander Consulting Group, a division of Alexander & Alexander Services,
Inc., an international professional services firm, which included a human
resources consulting firm, an insurance brokerage unit and an executive
planning life insurance unit. From 1988 to 1994, Mr. Joyce worked as a Senior
Vice President and controller at Bates Worldwide, a division of Saatchi &
Saatchi Co., an advertising firm. Mr. Joyce received a Bachelor of Science in
Accounting from the University of Scranton and a Master of Business
Administration from Fordham University. He is a Certified Public Accountant.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PROPOSAL NO. 2
APPROVAL OF THE 1998 STOCK OPTION PLAN,
AS AMENDED AND RESTATED
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Board of Directors proposes that theglobe's stockholders approve
theglobe's 1998 Stock Option Plan, as amended and restated (the "Option
Plan"). The proposed amendment will:
. increase the number of shares of common stock reserved for issuance
under the Option Plan by an additional 500,000 shares before taking into
account the stock split (or 1,000,000 shares after taking into account
the stock split), and
. increase the limit on the maximum number of options that may be awarded
to an individual in any three consecutive calendar year period from
250,000 to 500,000 prior to the stock split (from 500,000 to 1,000,000
after the stock split).
Purpose of the Proposal
As of March 12, 1999, only 4,952 shares remained available for future grants
under the Option Plan. In order to continue to provide key individuals with
awards and incentives commensurate with their contributions and competitive
with those offered by other employers, the Compensation Committee determined
that it was in our best interest to increase the number of shares with respect
to which options may be granted under the Option Plan. Consequently, in March
1999 our Board of Directors adopted, subject to approval by our stockholders,
the amendments to the Option Plan to increase the number of shares of common
stock available for grant under the
6
<PAGE>
Option Plan and increase the limit on the maximum number of options that may
be awarded to any eligible individual in any three consecutive calendar year
period. The Board of Directors believes that these amendments will increase
stockholder value by further aligning the interests of key individuals with
the interests of our stockholders by providing a greater opportunity to
benefit from stock price appreciation that generally accompanies improved
financial performance. In addition, a per person limit in the Option Plan is
required for the Option Plan to comply with Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code").
The Board is submitting the Option Plan for stockholder approval so that,
among other reasons, the compensation attributable to options granted under
the Option Plan may qualify as "performance-based compensation" for purposes
of Section 162(m) of the Code. See "Certain Tax Information--Section 162(m)."
General
The following summary of the Option Plan is subject in its entirety to the
specific language of the Option Plan, a copy of which is attached to the proxy
statement as Exhibit A.
Our Option Plan was adopted by the Board of Directors in July 1998 and has
been approved by our stockholders. 1,200,000 shares of common stock were
initially reserved for issuance under the Option Plan. As of the Record Date,
options to purchase approximately 1,225,808 shares were outstanding under the
Option Plan and no shares were available for future grant under the Option
Plan prior to its amendment and restatement.
Description of the Option Plan
Purpose. The Board of Directors believes that our long term success is
dependent upon our ability to attract and retain highly qualified individuals
who, by virtue of their ability and qualifications, make important
contributions to theglobe. The Option Plan is intended to strengthen us by
providing an incentive to our employees, officers, consultants and directors
and thereby encourage them to devote their abilities and industry to the
success of our business enterprise. We believe that grants of stock options
motivate high levels of performance and provide an effective means of
recognizing employee contributions to the success of theglobe. At present,
most newly hired full-time employees are granted options. We believe that this
policy is of great value in recruiting and retaining highly qualified
technical and other key personnel who are in demand. The Board believes that
the ability to grant options will be important to our future success by
allowing us to remain competitive in attracting and retaining key personnel.
Administration. The Option Plan is administered by a committee of the Board
of Directors that consists of at least two non-employee outside board members.
The Board of Directors has delegated authority to approve option grants under
the Option Plan to a subcommittee of the Compensation Committee consisting of
Messrs. Halperin and Horowitz. The full Board of Directors is also authorized
to make grants under the Option Plan. All questions of interpretation of the
Option Plan are determined by this subcommittee, and its determinations are
final and binding upon all participants. Generally, this subcommittee (1)
selects those persons to whom options will be granted, and (2) determines the
terms and conditions of options, including the purchase price per share and
the vesting provisions. Each of the subcommittee and the entire Board has the
authority to make amendments or modifications to outstanding options
consistent with the Option Plan's terms.
Eligibility. Any of our current or future employees, officers, consultants,
advisors or directors is eligible to participate in the Option Plan. Incentive
stock options, qualified under Section 422 of the Code, may be
granted only to employees, including officers. Nonqualified stock options, not
so qualified, may be granted to our employees, consultants or other
independent advisors. Formula options are granted to eligible directors who
are not employees and who do not receive from us any compensation or other
consideration other than in their capacity as directors. In addition, our web
site's community leaders may be granted fully vested shares under the Option
Plan as bonuses, as discussed more fully below under "Stock Bonus for
Community Leaders."
7
<PAGE>
Employee Options. The subcommittee for the entire Board may grant both
incentive stock options and nonqualified stock options to eligible
individuals. The terms of these stock options, including vesting, granted
under the Option Plan may be determined by the subcommittee or the entire
Board. Each stock option is evidenced by a stock option agreement between
theglobe and the person to whom such option is granted and is normally subject
to the following additional terms and conditions:
. Exercise or Purchase Price: The exercise prices of option grants under
the Option Plan are determined by the subcommittee or the entire Board.
In the case of an incentive stock option, the exercise price must not be
less than 100% of the fair market value of the common stock on the date
the option is granted, with the exception that in the case of an option
granted to a stockholder who, immediately prior to such grant, owns
stock representing more than 10% of the voting power or value of all
classes of stock of theglobe, the exercise price must not be less than
110% of such fair market value.
. Termination of Employment or Service: If the optionee's status as an
employee, non-employee director, consultant or other independent advisor
terminates for any reason other than death or disability, options may be
exercised within such period of time after such termination as the
subcommittee or the entire Board may determine, but only to the extent
the options were exercisable on the date of termination.
. Death or Permanent Disability: If an optionee should die or become
permanently disabled while employed by theglobe, options may be
exercised by the optionee or the personal representative of the
optionee's estate, as the case may be, within such period of time after
such death or permanent disability as the subcommittee or the entire
Board may determine, but only to the extent such options were
exercisable on such date and in no event later than the expiration of
the term of such options.
Formula Options. Each of our eligible non-employee directors was made an
initial grant of options and is entitled to a recurrent grant of options,
("Formula Options"). Each eligible director as of July 15, 1998 was granted an
initial option in respect of 25,000 shares. Each eligible director who became
a director for the first time after July 15, 1998 received an initial grant of
options to acquire 12,500 shares of our common stock. In addition, each
eligible director will be granted an option in respect of 3,750 shares of our
common stock on the first business day after our annual meeting of
stockholders in each year that the Option Plan is in effect.
The purchase price for shares under each Formula Option will be equal to
100% of fair market value on the date of grant. Each Formula Option granted on
July 15, 1998 became vested and exercisable with respect to 25% of the shares
on the date of grant and will become vested with respect to an additional 25%
of the shares on each of the first three anniversaries of the date of grant,
provided that the director continues to serve. All other Formula Options
become vested and exercisable with respect to 25% of the shares subject
thereto on each of the first four anniversaries of the date of grant, provided
that the director continues to serve.
If an optionee's service as a director terminates for any reason other than
for "cause," the Formula Option becomes fully vested and may be exercised at
any time within two years after termination. If a director's service
terminates for cause, the option immediately terminates. Each Formula Option
terminates on the tenth anniversary of grant unless terminated earlier, or if
later, the first anniversary of the date of the director's death, if such
death occurs prior to the tenth anniversary.
Stock Bonus for Community Leaders. The Board approved for grant an aggregate
of approximately 3,500 fully vested shares of common stock to community
leaders as of July 23, 1998. A "community leader" is an individual
participating in the formation and dissemination of content on our web site
and who manages communities on the web site, highlights member content,
communicates directly to members and organizes events.
Terms Applicable to All Options.
. Termination of Options: Options granted under the Option Plan expire ten
(10) years from the date of grant or such shorter term as may be
provided in the notice of grant. No option may be exercised by any
person after such expiration.
8
<PAGE>
. Nontransferability of Options: An option may not be transferred other
than by will or the laws of descent and distribution or, in the case of
an option other than an incentive stock option, pursuant to a domestic
relations order. An option shall be exercisable during the lifetime of
such optionee only by the optionee or his or her guardian or legal
representative. The subcommittee or the entire Board may, however, set
forth in an option agreement (other than for an incentive stock option)
that the option may be transferred to an immediate family member, trusts
solely for the benefit of such immediate family members, and
partnerships in which such family members and trusts are the only
partners. Such permitted transferee shall be deemed to be the optionee.
Adjustments Upon Changes in Capitalization. In the event of a change in
capitalization, the Compensation Committee will adjust the maximum number and
class of shares or other stock or securities with respect to which options may
be granted under the Option Plan or to any eligible individual in any three
calendar year period, the number and class of shares or other stock or
securities which are subject to outstanding options and the purchase price
therefor, if applicable, and the number and class of shares or other
securities in respect of which Formula Options are to be granted.
Change in Control. In the event of a change in control, all options
outstanding on the date of the change in control will become immediately and
fully exercisable. In addition, to the extent set forth in an option
agreement, an optionee will be permitted, within sixty days of a change in
control, to exchange unexercised options for a cash payment from theglobe.
theglobe will cancel the unexpired options that are exchanged for cash. In the
event an optionee's employment with, or service as a director of, theglobe
terminates following a change in control, each option held by the optionee
that was exercisable as of the date of termination will remain exercisable for
a period of at least one (1) year following the date of termination but not
beyond the expiration of the stated term of the option.
A Change in Control under the Option Plan means, generally:
(1) the acquisition by any person of beneficial ownership of our voting
securities resulting in such person beneficially owning 30% or more of the
combined voting power of our then outstanding voting securities;
(2) the individuals who, as of the adoption of the Option Plan, are
members of the Board (the "Incumbent Board") cease for any reason to
constitute at least two-thirds of the Board; or
(3) the consummation of any of:
(a) a merger, consolidation or reorganization involving us unless:
(i) our stockholders, immediately before such merger,
consolidation or reorganization own, following such merger,
consolidation or reorganization, at least 60% of the combined voting
power of the outstanding voting securities of the corporation
resulting from such merger, consolidation or reorganization in
substantially the same proportion as before the merger,
consolidation or reorganization; and
(ii) the members of the Incumbent Board immediately prior to the
merger, consolidation or reorganization constitute at least two-
thirds of the Board of the surviving corporation; and
(iii) no person has beneficial ownership of 30% or more of the
combined voting power of the surviving corporation's then
outstanding voting securities;
(b) our complete liquidation or dissolution; or
(c) the disposition of all or substantially all of our assets.
Amendment and Termination. The subcommittee or the Board may at any time or
from time to time amend, modify, suspend or terminate the Option Plan.
However, no amendment, modification, suspension or termination may adversely
effect any outstanding option without the optionee's consent. In addition,
amendments may require stockholder approval. The Option Plan will terminate by
its terms not later than July 14, 2008.
9
<PAGE>
Awards under the Option Plan
Grants under the Option Plan are made at the discretion of the subcommittee
of the Compensation Committee or the entire Board.
As of the date of this proxy statement, the subcommittee has approved the
following options for grant under the Option Plan, as proposed to be amended
and restated:
New Plan Benefits
<TABLE>
<CAPTION>
Shares Subject
to Options
Granted Under
the Option Plan
Name and Position (#)
- ----------------- ---------------
<S> <C>
Michael S. Egan................................................ --
Chairman
Todd V. Krizelman.............................................. --
Co-Chief Executive Officer and Co-President
Stephan J. Paternot............................................ --
Co-Chief Executive Officer, Co-President and Secretary
Edward A. Cespedes............................................. --
Vice President, Corporate Development
Francis T. Joyce............................................... --
Chief Financial Officer
Dean S. Daniels................................................ --
Chief Operating Officer
All current executive officers as a group (includes 6 persons,
including those named above).................................. --
All current directors (including nominees for director) who are
not executive officers as a group (5 persons)................. --
All employees (other than current executive officers and
directors who are not executive officers) as a group (12
persons)...................................................... 62,248(1)
</TABLE>
- --------
(1) These grants are conditioned upon stockholder approval of the Option Plan,
as amended and restated.
Approximately 220 individuals are eligible to participate in the Option
Plan. As of the Record Date the market price of a share of our common stock
was $61.50.
theglobe cannot currently determine the number of additional shares of
common stock that may be subject to options granted in the future, generally,
under the Option Plan.
Certain Tax Information
Options granted under the Option Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or "nonqualified stock
options."
Incentive Stock Option. An incentive stock option results in no taxable
income to the optionee or a deduction to us at the time it is granted or
exercised. If the optionee holds the stock received as a result of an exercise
of a stock option for more than two years from the date of the grant and one
year from the date of exercise, then the gain from the sale of the stock is
treated as long-term capital gain. If the shares are disposed of during this
period, the option will be treated as a non-qualified stock option. We receive
a tax deduction only if the shares are disposed of during such period. The
deduction is equal to the amount of taxable income to the optionee.
Nonqualified Stock Option. A non-qualified stock option results in no
taxable income to the optionee or deduction to us at the time it is granted.
An optionee exercising such an option will, at that time, realize taxable
compensation in the amount of the difference between the option price and the
then market value of the shares.
10
<PAGE>
Subject to the applicable provisions of the Code, a deduction for federal
income tax purposes will be allowable to us in the year of exercise in an
amount equal to the taxable compensation realized by the optionee.
The discussion above assumes that at the time of exercise, the sale of the
shares at a profit would not subject an optionee to liability under Section
16(b) of the Exchange Act. Special rules may apply with respect to persons who
may be subject to Section 16(b) of the Exchange Act. Participants who are or
may become subject to Section 16 of the Exchange Act should consult with their
own tax advisors in this regard.
Excise Taxes. Under certain circumstances, the accelerated vesting or
exercise of options in connection with a change in control involving us might
be considered an "excess parachute payment" for purposes of the golden
parachute tax provisions of Section 280G of the Code. To the extent those
provisions apply, an optionee may be subject to a 20% excise tax and our
subsidiaries or affiliates may be denied a tax deduction.
Section 162(m). Section 162(m) of the Code generally disallows a federal
income tax deduction to any publicly held corporation for compensation paid in
excess of $1 million in any taxable year to the chief executive officer or any
of the four other most highly paid executive officers who are employed by us
on the last day of the taxable year, but does not disallow a deduction for
qualified "performance-based compensation," the material terms of which are
disclosed to and approved by stockholders. We have structured the Option Plan
with the intention that compensation resulting from awards of options granted
can qualify as "performance-based compensation" and, if so qualified, would be
deductible. To qualify, we are, among other things, seeking stockholder
approval of the Option Plan, as amended and restated.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THEGLOBE'S 1998
STOCK OPTION PLAN, AS AMENDED AND RESTATED.
We will vote your shares as you specify on the enclosed proxy card. If you
do not specify how you want your shares voted, we will vote them FOR approval
of the Option Plan, as amended and restated.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PROPOSAL NO. 3
APPROVAL OF THE 1999
EMPLOYEE STOCK PURCHASE PLAN
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
General
The Board adopted our 1999 Employee Stock Purchase Plan (the "Purchase
Plan") in March 1999. There are currently a total of 200,000 shares before the
split (400,000 shares after the split) of common stock reserved for issuance
and sale under the Purchase Plan. We implemented the Purchase Plan on May 1,
1999. Adoption of the Purchase Plan is contingent on stockholder approval.
The following summary of the Purchase Plan is subject in its entirety to the
specific language in the Purchase Plan, a copy of which is attached as Exhibit
B to the Proxy Statement.
Description of the Purchase Plan
General. The purpose of the Purchase Plan is to provide employees with an
opportunity to purchase our common stock through payroll deductions.
Administration. The Purchase Plan will be administered by a committee of two
(2) or more non-employee members of the Board of Directors. The Plan is
currently being administered by the Compensation Committee. All questions of
interpretation or application of the Purchase Plan are determined by the
Committee and its decisions are final, conclusive and binding upon all
participants.
11
<PAGE>
Eligibility. Each employee working for us or an eligible subsidiary who has
completed six consecutive months of full-time employment is eligible to
participate in an Offering Period (as defined below); provided, however, that
no employee may receive options under the Purchase Plan that would result in
the employee (i) owning stock and/or outstanding options to purchase stock
representing 5% or more of the total combined voting power or value of all
classes of our stock, or (ii) having the right to purchase stock under all our
employee stock purchase plans at a rate which would exceed twenty-five
thousand dollars ($25,000) worth of stock (determined at the fair market value
of the shares at the time such option is granted) for each calendar year.
Eligible employees become participants in the Purchase Plan by filing an
enrollment form with us (including a stock purchase agreement and a payroll
deduction authorization) prior to the filing date set by the Committee, which
will be before the beginning of each Offering Period. Approximately 200
individuals, including our employee directors and executive officers are
eligible to participate in the Purchase Plan. As of the Record Date the market
price of a share of our common stock was $61.50.
Participation in an Offering. There will be four offering periods (each, an
"Offering Period") to purchase shares of common stock during each twelve-month
period. An Offering Period will begin on May 1 and end on July 31, begin on
August 1 and end on October 31, begin on November 1 and end on January 31, and
begin on February 1 and end on April 30. To participate in the Purchase Plan,
each eligible employee must authorize payroll deductions pursuant to the
Purchase Plan. Such payroll deductions may not exceed 10% of a participant's
compensation. Once an employee becomes a participant in the Purchase Plan, the
employee will automatically participate in each successive Offering Period
until the employee withdraws from the Plan or the employee's employment with
us terminates. At the beginning of each Offering Period, each participant is
deemed to be granted options to purchase shares of our common stock. The
option is automatically deemed exercised at the end of the Offering Period, to
the extent of the payroll deductions accumulated during such Offering Period.
The maximum number of shares of common stock that a participant may purchase
during an individual Offering Period is 2,000 shares before the split (4,000
shares after the split).
Purchase Price, Shares Purchased. Shares of common stock may be purchased
under the Purchase Plan at the closing price per share of the common stock as
reported on The Nasdaq National Market on (i) the first day of the Offering
Period or (ii) the last day of the Offering Period, whichever closing price is
lower. The number of shares of common stock a participant purchases in each
Offering Period is determined by dividing the total amount of payroll
deductions withheld from the participant's compensation during that Offering
Period by the purchase price.
Termination of Employment. Upon termination of a participant's employment
for any reason, including retirement or death, the participant's payroll
deduction accumulated prior to such termination, if any, will be applied
toward purchasing full shares of common stock in the then-current Offering
Period. Any cash balance remaining after the purchase of shares in such
Offering Period will be refunded to him or her, or, in the case of his or her
death, to the person or persons entitled to the cash balance, and his or her
participation in the plan will be terminated.
Adjustment Upon Change in Capitalization. If, during any Offering Period,
the outstanding shares of common stock have increased, decreased, changed
into, or been exchanged for a different number or kind of our shares of stock
or other securities through any reorganization, merger, recapitalization,
reclassification, stock split, reverse stock split or similar transaction,
appropriate and proportionate adjustments may be made by the Committee in the
number and/or kind of shares to be purchased and in their purchase price. In
addition, in any such event, the number and/or kind of shares which may be
purchased in the Offering Period shall also be proportionately adjusted. Upon
our dissolution or liquidation, or upon our reorganization, merger or
consolidation with one or more corporations as a result of which we are not
the surviving corporation, or upon a sale of substantially all of our property
or capital stock to another corporation, each participant during the Offering
Period will be entitled to receive on the last day of the Offering Period, for
each share to be purchased as nearly as reasonably may be determined, the
cash, securities and/or property which a holder of one share of the common
stock was entitled to receive upon and at the time of such transaction.
12
<PAGE>
Amendment and Termination of the Plan. The Board may terminate or amend the
Purchase Plan. No termination, modification, or amendment of the Purchase Plan
may, without the consent of a participant during the Offering Period,
adversely affect the rights of such participant with respect to the Offering
Period, except that we may terminate the Purchase Plan at anytime, including
during an Offering Period, and apply the amounts withheld from participants
during the Offering Period to the purchase of shares of common stock as if the
termination date of the Purchase Plan were the last day of the then-current
Offering Period.
Withdrawal. Generally, participants are not permitted to withdraw any
amounts from the accumulated payroll deduction in his or her account. A
participant may stop participating in the Purchase Plan at any time by giving
written notice to the plan representative. Payroll deductions accumulated
prior to processing of the notice will be used to purchase full shares of
common stock and any cash balance remaining will be refunded. A participant
may elect to resume participation by providing written notice, effective as of
the first Offering Period beginning after the processing of such election. A
participant's withdrawal from any Offering Period will not have any effect
upon such participant's eligibility to participate in any following Offering
Period.
Federal Tax Information for Purchase Plan. Under the Purchase Plan common
stock is acquired with after-tax dollars. However, the 15% purchase price
discount and any stock appreciation are tax-deferred. If a participant sells
the common stock acquired at least two years after the first day of the
Offering Period any profit up to the amount of the 15% discount will be
taxable as ordinary income, and any further profit will be taxable as a long-
term capital gain. Any loss will be treated as a long-term capital loss. If a
participant sells the common stock acquired sooner, the difference between the
fair market value of the shares at the date of purchase and the purchase price
will be taxable as ordinary income in the year of the sale, regardless of the
sale price. Any additional profit will be taxable as a capital gain. If a
participant sells the shares of common stock at a price which is less than the
fair market value of the shares at the date of purchase, he or she will have a
capital loss equal to the amount by which the purchase date fair market value
exceeds the sale price.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THEGLOBE'S 1999
EMPLOYEE STOCK PURCHASE PLAN.
We will vote your shares as you specify on the enclosed proxy card. If you
do not specify how you want your shares voted, we will vote them FOR approval
of the amendment to the Purchase Plan.
13
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of April 23, 1999 by (i) each person who owns
beneficially more than 5% of our common stock, (ii) each of our directors,
(iii) each of the officers named in the table under the heading "Executive
Compensation--Summary Compensation Table," and (iv) all directors and
executive officers as a group. A total of 11,449,373 shares of theglobe's
common stock were issued and outstanding on April 23, 1999.
The amounts and percentage of common stock beneficially owned are reported
on the basis of regulations of the Securities and Exchange Commission ("SEC")
governing the determination of beneficial ownership of securities. Under the
rules of the SEC, a person is deemed to be a "beneficial owner" of a security
if that person has or shares "voting power," which includes the power to vote
or to direct the voting of such security, or "investment power," which
includes the power to dispose of or to direct the disposition of such
security. A person is also deemed to be a beneficial owner of any securities
of which that person has a right to acquire beneficial ownership within 60
days. Under these rules, more than one person may be deemed a beneficial owner
of the same securities and a person may be deemed to be a beneficial owner of
securities as to which such person has no economic interest. Unless otherwise
indicated below, the address of each person named in the table below is in
care of theglobe.com, inc., 31 West 21st Street, New York, New York 10010.
<TABLE>
<CAPTION>
Shares Beneficially
Owned
-----------------------
Directors, Named Executive Officers and 5% Stockholders Number Percent
- ------------------------------------------------------- ------------ ----------
<S> <C> <C>
Dancing Bear Investments, Inc.(1)...................... 6,046,774 44.9%
Michael S. Egan(2)..................................... 6,123,024 45.3
Todd V. Krizelman(3)................................... 877,431 7.5
Stephan J. Paternot(4)................................. 929,976 7.9
Dean S. Daniels(5)..................................... 0 *
Edward A. Cespedes(6).................................. 56,250 *
Francis T. Joyce(7).................................... 0 *
Rosalie V. Arthur(8)................................... 51,250 *
Henry C. Duques(9)..................................... 6,250 *
Robert M. Halperin(10)................................. 101,588 *
David H. Horowitz(11).................................. 115,278 1.0
H. Wayne Huizenga(12).................................. 6,250 *
All directors and executive officers as a group (11
persons)(13).......................................... 8,267,297 58%
</TABLE>
- --------
* Represents less than 1%.
(1) Includes: (1) 1,773,009 shares of our common stock issuable upon exercise
of warrants at approximately $2.91 per share and (2) 250,000 shares of our
common stock issuable upon exercise of warrants held by persons other than
Dancing Bear Investments but as to which Dancing Bear Investments has
voting power upon exercise under a stockholders' agreement. Dancing Bear
Investments' mailing address is 333 East Las Olas Blvd., Ft. Lauderdale,
FL 33301.
(2) Includes the following shares that Mr. Egan is deemed to beneficially own
as the controlling investor of Dancing Bear Investments: (1) 1,773,009
shares of our common stock issuable upon exercise of warrants at
approximately $2.91 per share,and (2) 250,000 shares of our common stock
issuable upon exercise of warrants held by persons other than Mr. Egan but
as to which Mr. Egan has voting power upon exercise under a stockholders'
agreement. Also includes (1) 41,250 shares of our common stock issuable
upon exercise of options that are currently exercisable, (2) 28,000 shares
of our common stock held by certain trusts for the benefit of Mr. Egan's
children, as to which he disclaims beneficial ownership, and (3) 7,000
shares of our common stock held by Mr. Egan's wife, as to which he
disclaims beneficial ownership. Excludes 118,750 shares of our common
stock issuable upon exercise of options that will not be exercisable
within 60 days of April 23, 1999.
14
<PAGE>
(3) Includes (1) 229,976 shares of our common stock issuable upon exercise of
options that are currently exercisable and (2) 100,000 shares of our
common stock issuable upon exercise of warrants. Excludes 100,250 shares
of our common stock issuable upon exercise of options that will not be
exercisable within 60 days of April 23, 1999.
(4) Includes (1) 229,976 shares of our common stock issuable upon exercise of
options that are currently exercisable and (2) 100,000 shares of our
common stock issuable upon exercise of warrants. Excludes 100,250 shares
of our common stock issuable upon exercise of options that will not be
exercisable within 60 days of April 23, 1999.
(5) Excludes 112,500 shares of our common stock issuable upon exercise of
options that will not be exercisable within 60 days of April 23, 1999.
(6) Includes (1) 31,250 shares of our common stock issuable upon exercise of
options that are currently exercisable, and (2) 25,000 shares of our
common stock issuable upon exercise of warrants. Excludes 22,500 shares of
our common stock issuable upon exercise of options that will not be
exercisable within 60 days of April 23, 1999.
(7) Excludes 112,500 shares of our common stock issuable upon exercise of
options that will not be exercisable within 60 days of April 23, 1999.
(8) Includes (1) 21,250 shares of our common stock issuable upon exercise of
options that are currently exercisable, (2) 25,000 shares of our common
stock issuable upon exercise of warrants, and (3) 5,000 shares of our
common stock. Excludes (1) 22,500 shares of our common stock issuable upon
exercise of options that will not be exercisable within 60 days of April
23, 1999 and (2) shares held by Dancing Bear Investments for which Ms.
Arthur serves as an officer and a director, and as to which Ms. Arthur
disclaims beneficial ownership.
(9) Includes 6,250 shares of our common stock issuable upon exercise of
options that are currently exercisable. Excludes 18,750 shares of our
common stock issuable upon exercise of options that will not be
exercisable within 60 days of April 23, 1999.
(10) Includes 28,820 shares of our common stock issuable upon exercise of
options that are currently exercisable. Excludes 32,222 shares of our
common stock issuable upon exercise of options that are not currently
exercisable. Excludes 90,180 shares of our common stock owned by Mr.
Halperin's children for which he has a power of attorney but as to which
he disclaims beneficial ownership.
(11) Includes 36,806 shares of our common stock issuable upon exercise of
options that are currently exercisable. Excludes 25,972 shares of our
common stock issuable upon exercise of options that are not currently
exercisable.
(12) Includes 6,250 shares of our common stock issuable upon exercise of
options that are exercisable within 60 days of April 23, 1999. Excludes
22,500 shares of our common stock issuable upon exercise of options that
are not exercisable within 60 days of April 23, 1999.
(13) See footnotes 2 through 12 above.
15
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for
services in all capacities awarded to, earned by or paid by us to our
Chairman, Co-Chief Executive Officers and our three other most highly
compensated executive officers during the last two fiscal years (collectively,
the "Named Executive Officers"):
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------- ------------
Number of
Securities
Name and Principal Underlying All Other
Position(1) Year Salary ($) Bonus ($) Options (#) Compensation ($)(2)
- ------------------ ---- ---------- --------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
Michael S. Egan, (3).... 1998 -- -- (4) 160,000 --
Chairman 1997 -- -- -- --
Todd V. Krizelman,...... 1998 $140,554 -- (4) 150,250 --
Co-Chief Executive -- -- 100,000(8) --
Officer and Co-
President
1997 $ 76,000 $18,750 144,976 $500,000
Stephan J. Paternot,.... 1998 $140,554 -- (4) 150,250 --
Co-Chief Executive -- -- 100,000(8) --
Officer, Co-President
and Secretary 1997 $ 76,000 $18,750 144,976 $500,000
Edward A. Cespedes, 1998 $ 83,625 -- (4) 53,750 --
(5)....................
Vice President, -- -- 25,000(9) --
Corporate Development
Francis T. Joyce, 1998 $ 80,769 -- 112,500 --
CFO(6).................
Dean S. Daniels, 1998 $ 80,731 -- 112,500 --
COO(7).................
</TABLE>
- --------
(1)We do not have any executive officers other than those named in the table.
Other than Messrs. Krizelman and Paternot, we did not have any other executive
officers whose aggregate salary, bonus and other compensation exceeded
$100,000 during the fiscal year ended December 31, 1997.
(2)Reflects a one-time payment of $500,000 associated with our sale of
preferred stock and warrants to Dancing Bear Investments in August 1997.
(3)Mr. Egan became an executive officer in July 1998. We did not pay Mr. Egan
a base salary in 1998.
(4)Included in long-term compensation are 35,000, 50,000, 50,000 and 25,000
options granted in January 1999 at an exercise price of $31.50 related to
bonuses earned in 1998 for Messrs. Egan, Krizelman, Paternot and Cespedes,
respectively.
(5)Mr. Cespedes became an officer in July 1998.
(6)Mr. Joyce became an officer in July 1998.
(7)Mr. Daniels became an officer in August 1998.
(8)Represents the transfer of 100,000 Series E Warrants from Dancing Bear
Investments, Inc. at an exercise price of approximately $2.91 per share.
(9)Represents the transfer of 25,000 Series E Warrants from Dancing Bear
Investments, Inc. at an exercise price of approximately $2.91 per share.
The following table sets forth, as of December 31, 1998, for each of the
executives listed in the Summary Compensation table (a) the total number of
unexercised options for common stock (exercisable and unexercisable) held, and
(b) the value of those options that were in-the-money on December 31, 1998
based on the difference between the closing price of our common stock on
December 31, 1998 and the exercise price of the options on that date.
16
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
1998 YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Stock
Shares Stock Options at Fiscal Options at Fiscal
Acquired Value Year-End (#) Year-End ($)(2)
on Exercise Realized ------------------------- -------------------------
Name (#)(1) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael S. Egan......... -- -- 6,250 118,750 149,219 2,835,156
Todd V. Krizelman....... -- -- 107,488 172,738 3,474,226 4,725,770
Stephan J. Paternot..... -- -- 107,488 172,738 3,474,226 4,725,770
Edward A. Cespedes...... -- -- 6,250 22,500 149,219 537,188
Francis T. Joyce........ -- -- -- 112,500 -- 2,804,063
Dean S. Daniels......... -- -- -- 112,500 -- 2,685,938
</TABLE>
- --------
(1) The named executive officers did not exercise any options in 1998.
(2) Based on a per share fair market value of common stock equal to $32.875,
as of December 31, 1998.
OPTION GRANTS IN 1998
<TABLE>
<CAPTION>
Potential Realizable Value
Number of Percent of at Assumed Rates of Stock
Securities Total Options Exercise Price Appreciation for
Underlying Granted to or Base Option Term (2)
Options Employees in Price ---------------------------
Granted (#)(1) 1998 ($/sh) Expiration Date 5% 10%
-------------- ------------- -------- --------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Michael S. Egan......... 25,000(3) 2.72% 9.00 July 2008 $ 114,501 $ 358,592
100,000(4) 10.90% 9.00 July 2008 $ 566,005 $ 1,434,368
Todd V. Krizelman....... 250(5) 0.03% 9.00 July 2008 $ 1,415 $ 3,586
100,000(4) 10.90% 9.00 July 2008 $ 566,005 $ 1,434,368
Stephan J. Paternot..... 250(5) 0.03% 9.00 July 2008 $ 1,415 $ 3,586
100,000(4) 10.90% 9.00 July 2008 $ 566,005 $ 1,434,368
Edward A. Cespedes...... 25,000(3) 2.72% 9.00 July 2008 $ 141,501 $ 358,592
3,750(6) 0.41% 9.00 July 2008 $ 21,225 $ 53,789
Francis T. Joyce........ 87,500(7) 9.54% 7.65 July 2008 $ 420,966 $ 1,066,811
25,000(8) 2.72% 9.00 July 2008 $ 141,501 $ 358,592
Dean S. Daniels......... 87,500(9) 9.54% 9.00 September 2008 $ 495,255 $ 1,255,072
25,000(10) 2.72% 9.00 September 2008 $ 141,501 $ 358,592
</TABLE>
- --------
(1) In the event of a change in control of theglobe, all of these options
become immediately and fully exercisable.
(2) These amounts represent various assumed rates of appreciation only and
are displayed in connection with SEC disclosure rules. Actual gains, if
any, on stock option exercises are dependent on future performance of our
common stock.
(3) One-fourth of these options are exercisable. The remaining three-fourths
will become exercisable with respect to one-third of the shares covered
thereby on July 15 in each of 1999, 2000 and 2001.
(4) These options become exercisable on July 15, 1999.
(5) These options become exercisable on July 24, 1999.
(6) These options become exercisable with respect to one-fourth of the shares
indicated on July 31 in each of 1999, 2000, 2001 and 2002.
(7) These options become exercisable with respect to one-third of the shares
indicated on July 15 in each of 1999, 2000 and 2001.
17
<PAGE>
(8) These options become exercisable with respect to one-seventh of the
shares indicated on July 15 in each of 1999, 2000, 2001, 2002, 2003, 2004
and 2005. However, options covering 12,500 shares have accelerated
vesting if specified financial targets are met in 1999.
(9) These options become exercisable with respect to one-third of the shares
indicated in September in each of 1999, 2000 and 2001.
(10) These options become exercisable with respect to one-seventh of the
shares indicated in September each of 1999, 2000, 2001, 2002, 2003, 2004
and 2005. However, options covering 12,500 shares have accelerated
vesting if specified financial targets are met in 1999.
Employment Agreements
CEO Employment Agreements. On August 13, 1997, we entered into employment
agreements with our co-CEOs, Todd V. Krizelman and Stephan J. Paternot. Each
CEO agreement provides for the following:
. employment as one of our executives;
. an annual base salary of $125,000 with eligibility to receive annual
increases amounting to no less than 15% of the executive's then-base
salary;
. a discretionary annual cash bonus, which will be awarded at our Board's
discretion and upon the achievement of target performance objectives
presented in our budget; and
. a right to participate in our stock option plans and all health,
welfare, and other benefit plans provided by us to our most senior
executives.
Each of the CEO agreements is for a term expiring on August 13, 2002, with
possible earlier termination as provided in each CEO agreement. Each of the
CEO agreements provides that, in the event of termination by us without cause,
the executive will be entitled to receive from us:
. any earned and unpaid base salary;
. reimbursement for any reasonable and necessary monies advanced or
expenses incurred in connection with the executive's employment;
. a pro rata portion of the annual bonus for the year of termination; and
. continued salary payments and employee benefits for one year following
termination or the remainder of the term of the CEO agreement, whichever
is less.
In addition, termination without cause automatically triggers the vesting of
all stock options held by the executive.
In the event of a change in control or a dissolution, each executive may
elect to terminate his employment by delivering a notice within 60 days to us
and receive (1) any earned and unpaid base salary as of the termination date
and (2) an amount reimbursing the executive for expenses incurred on our
behalf before the termination date.
Each CEO agreement contains a provision that the CEO will not compete with
us for a period of five years from the date of each CEO Agreement or, in the
case of termination without cause or after a change in control, the earlier of
a period of one year immediately following termination of employment or five
years from the date of our initial public offering.
Chief Operating Officer Employment Agreement. We have entered into an
employment agreement with Dean S. Daniels. The following are key terms of the
Daniels employment agreement:
. employment as our Chief Operating Officer effective August 31, 1998;
. an annual base salary of not less than $250,000 per year;
. an annual cash bonus of $50,000; and
18
<PAGE>
. stock options to purchase 112,500 shares of our common stock. The
options were granted at an exercise price of $9.00 per share. Of these
options, 87,500 will vest with respect to one-third of the shares on
each of the first three anniversaries of the date of grant, and 25,000
will vest with respect to one-seventh of the shares on each of the first
seven anniversaries of the date of grant. The Daniels employment
agreement also provides for the accelerated vesting of an aggregate of
12,500 of these options upon our attainment of financial targets in our
1999 fiscal year.
The Daniels employment agreement is for a term expiring on August 31, 2001,
with possible earlier termination as provided in the agreement. In the event
of termination by us without cause, Mr. Daniels will be entitled to receive
from us:
. any earned and unpaid base salary as of the termination date and salary
continuation during a one-year non-competition period following
termination;
. reimbursement for any and all reasonable monies advanced or expenses
incurred in connection with his employment; and
. his full annual bonus for the year of termination.
In addition, termination without cause automatically triggers the vesting of
all options held by Mr. Daniels.
The Daniels employment agreement contains a provision that he will not
compete with us for a period of one year following the date of his termination
of employment.
Chief Financial Officer Employment Agreement. On July 13, 1998, we entered
into an employment agreement with Francis T. Joyce. The following are the key
terms of the Joyce employment agreement:
. employment as our Chief Financial Officer;
. an annual base salary of not less than $200,000 per year with
eligibility to receive annual increases in base salary as determined by
our Co-Chief Executive Officers and Co-Presidents;
. an annual cash bonus of $50,000; and
. Mr. Joyce received a stock option grant to purchase 112,500 shares of
our common stock, 87,500 of which have an exercise price per share equal
to 85% of the initial public offering price. As a result, we recorded a
charge for deferred compensation expense of $118,100 in the third
quarter of 1998, representing the difference between the deemed value of
our common stock, the initial public offering price for accounting
purposes, and the exercise price of these options at the date of grant.
This amount is presented as a reduction of stockholders' equity and
amortized over the vesting period of the applicable options. The
remaining options were granted at an exercise price of $9.00 per share.
Of these options, 87,500 will vest with respect to one-third of the
shares on each of the first three anniversaries of the date of grant,
and 25,000 will vest with respect to one-seventh of the shares on each
of the first seven anniversaries of the date of grant. The Joyce
employment agreement also provides for the accelerated vesting of an
aggregate of 12,500 of these options upon our attainment of financial
targets in our 1999 fiscal year.
The Joyce employment agreement is for a term expiring on July 13, 2001, with
possible earlier termination as provided in the Joyce employment agreement. In
the event of termination by us without cause, Mr. Joyce will be entitled to
receive from us:
. any earned and unpaid base salary as of the termination date and salary
continuation during a non-competition period following termination which
will be six months or one year, if we elect to pay Mr. Joyce his salary
during this period;
. reimbursement for any and all monies advanced or expenses incurred in
connection with his employment; and
. a pro rata portion of his annual bonus for the year of termination.
19
<PAGE>
In addition, termination without cause automatically triggers the vesting of
all stock options held by Mr. Joyce.
Other than the Option Plan and the Employment Agreements described above,
there are no compensation plans or arrangements in which the co-CEO's or three
other most highly paid executive officers participate that provide for
payments or other benefits in the event of their termination of employment or
a change in control of theglobe.
Compensation Committee Interlocks and Insider Participation
Our Compensation Committee is currently comprised of Messrs. Egan, Halperin
and Horowitz and Ms. Arthur. Before July 15, 1998, the compensation committee
was comprised of Messrs. Egan, Halperin, Krizelman and Paternot. Mr. Egan,
effective as of July 22, 1998, also serves as one of our executive officers in
his role as Chairman.
Either the entire Board or a subcommittee of the Compensation Committee
consisting of Messrs. Halperin and Horowitz approves stock option grants.
Neither Messrs. Halperin or Horowitz was at any time during 1998, or at any
other time, an officer or employee of theglobe. No member of our Compensation
Committee serves as a member of the board of directors or compensation
committee of any entity that has one or more executive officers serving as a
member of theglobe's Board of Directors or Compensation Committee.
Although Mr. Egan does not receive a salary from us, in 1998 we granted
stock options to Mr. Egan for 100,000 shares of our common stock under the
Option Plan, as consideration for his performance of services in his capacity
as an executive officer. Additionally, in January 1999, we granted stock
options to Mr. Egan and Ms. Arthur for 35,000 and 15,000 shares, respectively,
as bonus payments for 1998.
Certain Relationships and Related Transactions
Arrangements with Entities Controlled by Various Directors and Officers. We
entered into an electronic commerce contract with AutoNation, an entity
affiliated with H. Wayne Huizenga, under which we have granted a right of
first negotiation with respect to the exclusive right to engage in or conduct
an automotive "clubsite" on theglobe.com. Additionally, AutoNation has agreed
to purchase advertising from us for a three-year period at a price which will
be adjusted to match any more favorable advertising price quoted to a third
party by us, excluding various short-term advertising rates.
In addition, we have entered into an electronic commerce arrangement with
InteleTravel, an entity controlled by Michael S. Egan, under which we
developed a Web community for InteleTravel in order for its travel agents to
conduct business through our Web site in exchange for access to InteleTravel
customers for distribution of our products and services.
In April 1999, Mr. Egan was appointed to the board of directors of
Lowestfare.com, Inc., an entity with which we have a premier partner
relationship. This relationship was entered into prior to the time Mr. Egan
became a director of Lowestfare.com, Inc.
We believe that the terms of the foregoing arrangements are on comparable
terms as if they were entered into with unaffiliated third parties. During
1998, we received $83,300 from AutoNation and $265,000 from InteleTravel in
connection with these arrangements.
Stockholders' Agreement. Messrs. Egan, Krizelman, Paternot and Cespedes, Ms.
Arthur and Dancing Bear Investments, an entity controlled by Mr. Egan, entered
into a stockholders' agreement under which Mr. Egan (the "Egan group") and
Dancing Bear Investments agreed to vote for some nominees of Krizelman and
Paternot (the "Krizelman and Paternot groups") to our board of directors and
the Krizelman and Paternot groups agreed to vote for the Egan group's nominees
to our board, who will represent a majority of our board.
20
<PAGE>
Additionally, under the terms of the stockholders' agreement, Messrs.
Krizelman, Paternot and Cespedes and Ms. Arthur have granted an irrevocable
proxy to Dancing Bear Investments with respect to any shares that may be
acquired or beneficially owned by them upon the exercise of outstanding
warrants transferred to each of them by Dancing Bear Investments. These shares
will be voted by Dancing Bear Investments, which is controlled by Mr. Egan,
and Dancing Bear Investments will have a right of first refusal upon transfer
of these shares.
The stockholders' agreement also provides:
. Take-Along Rights. If the Egan group sells shares of our common stock
(including shares issued upon exercise of options) and warrants
(assuming the warrants have been exercised) representing 25% or more of
our outstanding common stock, in any private sale, the Krizelman and
Paternot groups, Mr. Cespedes and Ms. Arthur may be required to sell up
to the same percentage of their shares as the Egan group sells.
. Tag-Along Rights. If Dancing Bear Investments sells shares of our common
stock (including shares issued upon exercise of options) or warrants
(assuming the warrants have been exercised) representing 25% or more of
our outstanding common stock, or the Krizelman and Paternot groups
collectively sell shares or warrants representing 7% or more of our
shares and warrants in any private sale, each other party to the
stockholders' agreement, including entities controlled by them and their
permitted transferees, may, at their option, sell up to the same
percentage of their shares.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities and Exchange Act of 1934 requires our
officers and directors, and persons who own more than ten percent (10%) of a
registered class of our equity securities, to file certain reports regarding
ownership of, and transactions in, our securities with the Securities and
Exchange Commission and with The Nasdaq Stock Market, Inc. Such officers,
directors, and 10% stockholders are also required to furnish theglobe with
copies of all Section 16(a) forms that they file.
Based solely on our review of copies of Forms 3 and 4 and any amendments
furnished to us pursuant to Rule 16a-3(e) and Forms 5 and any amendments
furnished to us with respect to the 1998 fiscal year, and any written
representations referred to in Item 405(b)(2)(i) of Regulation S-K stating
that no Forms 5 were required, we believe that, during the 1998 fiscal year,
our officers and directors have complied with all Section 16(a) applicable
filing requirements.
21
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee of the Board of Directors establishes our general
compensation policies as well as the compensation plans and specific
compensation levels for executive officers. It also administers our employee
stock benefit plan for executive officers. The Compensation Committee includes
two independent, non-employee directors who have no interlocking relationships
as defined by the SEC.
The Compensation Committee believes that the compensation of our executive
officers, including the Chief Executive Officers, should be influenced by our
performance. Employment agreements with certain of our executive officers
establish base salary levels, and any salary increases are made in accordance
with those agreements. Additional compensation in the form of cash bonuses or
stock options is made in accordance with the employment agreements, where
applicable, or at the discretion of the Compensation Committee, a subcommittee
of the Compensation Committee, or the full Board, taking into account the
contributions made by the executive officers to theglobe, as well as
anticipated performance of theglobe in the coming year. The Committee believes
that our executive officer salaries in 1998 did not exceed levels in the
industry for similarly-sized businesses.
During 1998, each of the Chief Executive Officers received salary increases
of 15%, and no salary increases were given to other executive officers.
In addition to salary, the Board or a subcommittee of the Compensation
Committee, from time to time, grants options to executive officers. The
Committee views option grants as an important component of its long-term,
performance-based compensation philosophy. Since the value of an option bears
a direct relationship to our stock price, the Committee believes that options
motivate executive officers to manage us in a manner that will also benefit
stockholders. As such, options are granted at the current market price. One of
the principal factors considered in granting options to an executive officer
is the executive officer's ability to influence our long-term growth and
profitability.
During 1998, a total of 100,250 options were granted to each of the Chief
Executive Officers and a total of 378,750 options were granted to the other
executive officers.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Code was enacted in 1993 and generally disallows a
federal income tax deduction to any publicly held corporation for compensation
paid in excess of $1 million in any taxable year to the chief executive
officer or any of the four other most highly compensated executive officers
who are employed by a corporation on the last day of the taxable year. Section
162(m), however, does not disallow a federal income tax deduction for
qualified "performance-based compensation," the material terms of which are
disclosed to and approved by stockholders.
The Committee has considered the tax deductibility of compensation awarded
under the Option Plan in light of Section 162(m). We structured and intend to
administer the Option Plan with the intention that the resulting compensation
can qualify as "performance-based compensation" and would be deductible. It is
not expected that any executive officer's compensation will be non-deductible
in 1999 by reason of the application of Section 162(m).
Compensation Committee of the Board of Directors
Michael Egan
Robert Halperin
David Horowitz
Rosalie Arthur
22
<PAGE>
PERFORMANCE GRAPH
The following graph shows a comparison of our cumulative total stockholder
return, calculated on a dividend reinvested basis, from the end of the first
trading day (November 13, 1998) following the initial public offering of our
common stock, through December 31, 1998 for theglobe, the Nasdaq Stock Market
Composite Index (the "Nasdaq Index") and the Hambrecht & Quist Internet Index
(the "Internet Index"). The graph assumes that $100 was invested in our common
stock, the Nasdaq Index and the Internet Index on November 13, 1998. Note that
historic stock price performance is not necessarily indicative of future stock
price performance.
[GRAPH APPEARS HERE]
-------------------------------------------------
11/13/98 12/31/98
-------------------------------------------------
theglobe.com 100 51.77*
-------------------------------------------------
Nasdaq Index 100 118.65
-------------------------------------------------
Internet Index 100 141.65
-------------------------------------------------
* Note: Our stock price on November 12, 1998 was $9.00. The closing price on
the first trading day (November 13, 1998) was $63.50. The closing price on
December 31, 1998 was $32.875.
STOCKHOLDER PROPOSALS FOR THE
2000 ANNUAL MEETING
We welcome comments and suggestions from our stockholders. Here are the ways
a stockholder may present a proposal for consideration by the other
stockholders at our 2000 Annual Meeting:
In our Proxy Statement: If a stockholder wants to submit a proposal for
inclusion in our proxy statement and form of proxy under Rule 14a-8 under the
Securities Exchange Act of 1934 (the "Exchange Act") for the 2000 Annual
Meeting of Stockholders, we must receive the proposal in writing on or before
5 p.m., Eastern time, January 14, 2000.
At the Annual Meeting: Under our By-Laws, if a stockholder wishes to
nominate a director or bring other business before the stockholders at the
2000 Annual Meeting, we must receive the stockholder's written notice not less
than 60 days nor more than 90 days prior to the date of the annual meeting,
unless we give our stockholders less than 70 days' notice of the date of our
2000 Annual Meeting. If we provide less than 70 days' notice, then we must
receive the stockholder's written notice by the close of business on the 10th
day after we provide notice of the date of the 2000 Annual Meeting. The notice
must contain the specific information required in our By-laws. A copy of our
By-laws may be obtained by writing to the Assistant Secretary. If we receive a
23
<PAGE>
stockholder's proposal within the time periods required under our By-laws, we
may choose, but are not required, to include it in our proxy statement. If we
do, we may tell the other stockholders what we think of the proposal, and how
we intend to use our discretionary authority to vote on the proposal.
Delivering a Separate Proxy Statement: We will not use our discretionary
voting authority if a stockholder submits a proposal within the time period
required under our By-laws, and also provides us with a written statement that
the stockholder intends to deliver his/her own proxy statement and form of
proxy to our stockholders. Persons who wish to deliver their own proxy
statement and form of proxy should consult the rules and regulations of the
SEC.
All proposals should be made in writing and sent via registered, certified
or express mail, to our executive offices, 31 West 21st Street, New York, New
York 10010, Attention: Assistant Secretary.
OTHER BUSINESS
The Board of Directors is not aware of any other matters to come before the
Annual Meeting. If any matter not mentioned in this proxy statement is
properly brought before the meeting, the persons named in the enclosed proxy
will have discretionary authority to vote all proxies with respect to those
matters in accordance with their judgment.
By Order of the Board of Directors
/s/ Francis T. Joyce
Francis T. Joyce
Vice President, Chief Financial
Officer, Treasurer and
Assistant Secretary
New York, New York
May 14, 1999
24
<PAGE>
EXHIBIT A
theglobe.com, inc.
1998 STOCK OPTION PLAN
1. Purpose. The purpose of this Plan is to strengthen theglobe.com, inc., a
Delaware corporation (the "Company"), by providing an incentive to its
employees, officers, consultants and directors and thereby encouraging them to
devote their abilities and industry to the success of the Company's business
enterprise. It is intended that this purpose be achieved by extending to
employees (including future employees who have received a formal written offer
of employment), officers, consultants and directors of the Company and its
Subsidiaries an added long-term incentive for high levels of performance and
extraordinary efforts through the grant of Incentive Stock Options and
Nonqualified Stock Options (as each term is herein defined).
2. Definitions. For purposes of the Plan:
2.1 "Adjusted Fair Market Value" means, in the event of a Change in Control,
the greater of (a) the highest price per Share paid to holders of the Shares
in any transaction (or series of transactions) constituting or resulting in a
Change in Control or (b) the highest Fair Market Value of a Share during the
ninety (90) day period ending on the date of a Change in Control.
2.2 "Affiliate" means any entity, directly or indirectly, controlled by,
controlling or under common control with the Company or any corporation or
other entity acquiring, directly or indirectly, all or substantially all the
assets and business of the Company, whether by operation of law or otherwise.
2.3 "Agreement" means the written agreement between the Company and an
Optionee evidencing the grant of an Option and setting forth the terms and
conditions thereof.
2.4 "Board" means the Board of Directors of the Company.
2.5 "Cause" means:
(a) for purposes of Section 6.4, the commission of an act of fraud or
intentional misrepresentation or an act of embezzlement, misappropriation
or conversion of assets or opportunities of the Company or any of its
Subsidiaries; and
(b) in the case of an Optionee whose employment with the Company or a
Subsidiary is subject to the terms of an employment agreement between such
Optionee and the Company or Subsidiary, which employment agreement includes
a definition of "Cause", the term "Cause" as used in the Plan or any
Agreement shall have the meaning set forth in such employment agreement
during the period that such employment agreement remains in effect; and
(c) in all other cases, (i) intentional failure to perform reasonably
assigned duties, (ii) dishonesty or willful misconduct in the performance
of duties, (iii) involvement in a transaction in connection with the
performance of duties to the Company or any of its Subsidiaries which
transaction is adverse to the interests of the Company or any of its
Subsidiaries and which is engaged in for personal profit or (iv) willful
violation of any law, rule or regulation in connection with the performance
of duties (other than traffic violations or similar offenses).
2.6 "Change in Capitalization" means any increase or reduction in the number
of Shares, or any change (including, but not limited to, in the case of a
spin-off, dividend or other distribution in respect of Shares, a change in
value) in the Shares or exchange of Shares for a different number or kind of
shares or other securities of the Company or another corporation, by reason of
a reclassification, recapitalization, merger, consolidation, reorganization,
spin-off, split-up, issuance of warrants or rights or debentures, stock
dividend, stock split or reverse stock split, cash dividend, property
dividend, combination or exchange of shares, repurchase of shares, change in
corporate structure or otherwise.
A-1
<PAGE>
2.7 A "Change in Control" shall mean the occurrence of any of the following:
(a) An acquisition (other than directly from the Company) of any voting
securities of the Company (the "Voting Securities") by any "Person" (as the
term person is used for purposes of Section 13(d) or 14(d) of the Exchange
Act), immediately after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
thirty percent (30%) or more of the then outstanding Shares or the combined
voting power of the Company's then outstanding Voting Securities; provided,
however, in determining whether a Change in Control has occurred pursuant
to this Section 2.7(a), Shares or Voting Securities which are acquired in a
"Non-Control Acquisition" (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A "Non-Control
Acquisition" shall mean an acquisition by (i) an employee benefit plan (or
a trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a "Majority-
Owned Subsidiary"), (ii) the Company or its Majority-Owned Subsidiaries, or
(iii) any Person in connection with a "Non-Control Transaction" (as
hereinafter defined);
(b) The individuals who, as of date plan is adopted are members of the
Board (the "Incumbent Board"), cease for any reason to constitute at least
two-thirds of the members of the Board; provided, however, that if the
election, or nomination for election by the Company's common stockholders,
of any new director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of the Plan, be
considered as a member of the Incumbent Board; provided further, however,
that no individual shall be considered a member of the Incumbent Board if
such individual initially assumed office as a result of either an actual or
threatened "Election Contest" (as described in Rule 14a-11 promulgated
under the Exchange Act) or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board (a
"Proxy Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization with or into the
Company or in which securities of the Company are issued, unless such
merger, consolidation or reorganization is a "Non-Control Transaction."
A "Non-Control Transaction" shall mean a merger, consolidation or
reorganization with or into the Company or in which securities of the
Company are issued where:
(A) the stockholders of the Company, immediately before such
merger, consolidation or reorganization, own directly or indirectly
immediately following such merger, consolidation or reorganization,
at least sixty percent (60%) of the combined voting power of the
outstanding voting securities of the corporation resulting from such
merger or consolidation or reorganization (the "Surviving
Corporation") in substantially the same proportion as their
ownership of the Voting Securities immediately before such merger,
consolidation or reorganization,
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing for
such merger, consolidation or reorganization constitute at least
two-thirds of the members of the board of directors of the Surviving
Corporation, or a corporation beneficially directly or indirectly
owning a majority of the Voting Securities of the Surviving
Corporation, and
(C) no Person other than (1) the Company, (2) any Majority-Owned
Subsidiary, (3) any employee benefit plan (or any trust forming a
part thereof) that, immediately prior to such merger, consolidation
or reorganization, was maintained by the Company or any Majority-
Owned Subsidiary, or (4) any Person who, immediately prior to such
merger, consolidation or reorganization had Beneficial Ownership of
thirty percent (30%) or more of the then outstanding Voting
Securities or Shares, has Beneficial Ownership of thirty percent
(30%) or more of the combined voting power of the Surviving
Corporation's then outstanding voting securities or its common
stock;
(ii) A complete liquidation or dissolution of the Company; or
A-2
<PAGE>
(iii) The sale or other disposition of all or substantially all of
the assets of the Company to any Person (other than a transfer to a
Majority-Owned Subsidiary or the distribution to the Company's
stockholders of the stock of a Majority-Owned Subsidiary or any other
assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Shares or
Voting Securities as a result of the acquisition of Shares or Voting
Securities by the Company which, by reducing the number of Shares or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of
the acquisition of Shares or Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional Shares or Voting Securities which increases the
percentage of the then outstanding Shares or Voting Securities Beneficially
Owned by the Subject Person, then a Change in Control shall occur.
If an Eligible Individual's employment is terminated by the Company without
Cause prior to the date of a Change in Control but the Eligible Individual
reasonably demonstrates that the termination (A) was at the request of a third
party who has indicated an intention or taken steps reasonably calculated to
effect a change in control or (B) otherwise arose in connection with, or in
anticipation of, a Change in Control which has been threatened or proposed,
such termination shall be deemed to have occurred after a Change in Control
for purposes of the Plan provided a Change in Control shall actually have
occurred.
2.8 "Code" means the Internal Revenue Code of 1986, as amended.
2.9 "Committee" means a committee, as described in Section 3.1, appointed by
the Board from time to time to administer the Plan and to perform the
functions set forth herein.
2.10 "Community Leader" means an individual participating in the formation
and dissemination of content on the Company's web site and who manages
communities on the web site, highlights member content, communicates directly
to members and organizes events, as determined from time to time in the
Company's sole discretion.
2.11 "Company" means theglobe.com, inc., a Delaware corporation.
2.12 "Consultant" means any consultant or advisor that qualifies as an
"employee" within the meaning of rules applicable to Form S-8, as in effect
from time to time, of the Securities Act of 1933, as amended.
2.13 "Director" means a director of the Company.
2.14 "Disability" means:
(a) in the case of an Optionee whose employment with the Company or a
Subsidiary is subject to the terms of an employment agreement between such
Optionee and the Company or Subsidiary, which employment agreement includes
a definition of "Disability", the term "Disability" as used in the Plan or
any Agreement shall have the meaning set forth in such employment agreement
during the period that such employment agreement remains in effect; and
(b) in all other cases, the term "Disability" as used in the Plan or any
Agreement shall mean a physical or mental infirmity which impairs the
Optionee's ability to perform substantially his or her duties for a period
of one hundred eighty (180) consecutive days.
2.15 "Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.16 "Fair Market Value" on any date means the closing sales prices of the
Shares on such date on the principal national securities exchange on which
such Shares are listed or admitted to trading, or, if such Shares are not so
listed or admitted to trading, the average of the per Share closing bid price
and per Share closing
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asked price on such date as quoted on the National Association of Securities
Dealers Automated Quotation System or such other market in which such prices
are regularly quoted, or, if there have been no published bid or asked
quotations with respect to Shares on such date, the Fair Market Value shall be
the value established by the Board in good faith and, in the case of an
Incentive Stock Option, in accordance with Section 422 of the Code.
2.17 "Formula Option" means an Option granted pursuant to Section 6.
2.18 "Incentive Stock Option" means an Option satisfying the requirements of
Section 422 of the Code and designated by the Committee as an Incentive Stock
Option.
2.19 "Nonemployee Director" means a director of the Company who is a
"nonemployee director" within the meaning of Rule 16b-3 promulgated under the
Exchange Act.
2.20 "Nonqualified Stock Option" means an Option which is not an Incentive
Stock Option.
2.21 "Option" means a Nonqualified Stock Option, an Incentive Stock Option,
a Formula Option, or any or all of them.
2.22 "Optionee" means a person to whom an Option has been granted under the
Plan.
2.23 "Outside Director" means a director of the Company who is an "outside
director" within the meaning of Section 162(m) of the Code and the regulations
promulgated thereunder.
2.24 "Parent" means any corporation which is a parent corporation (within
the meaning of Section 424(e) of the Code) with respect to the Company.
2.25 "Performance-Based Compensation" means any Option that is intended to
constitute "performance-based compensation" within the meaning of Section
162(m)(4)(C) of the Code and the regulations promulgated thereunder.
2.26 "Permitted Transferee" means an Optionee's immediate family, trusts
solely for the benefit of such family members and partnerships in which such
family members and/or trusts are the only partners. For this purpose,
"immediate family" of an Optionee means the Optionee's spouse, parents,
children, stepchildren and grandchildren and the spouses of such parents,
children, stepchildren and grandchildren.
2.27 "Plan" means this theglobe.com, inc. 1998 Stock Option Plan, as amended
from time to time.
2.28 "Pooling Transaction" means an acquisition of the Company in a
transaction which is intended to be treated as a "pooling of interests" under
generally accepted accounting principles.
2.29 "Shares" means the Common Stock, par value $0.001 per share, of the
Company.
2.30 "Subsidiary" means any corporation which is a subsidiary corporation
(within the meaning of Section 424(f) of the Code) with respect to the
Company.
2.31 "Successor Corporation" means a corporation, or a parent or subsidiary
thereof within the meaning of Section 424(a) of the Code, which issues or
assumes a stock option in a transaction to which Section 424(a) of the Code
applies.
2.32 "Ten-Percent Stockholder" means an Eligible Individual, who, at the
time an Incentive Stock Option is to be granted to him or her, owns (within
the meaning of Section 422(b)(6) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company, or of a Parent or a Subsidiary.
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3. Administration.
3.1 The Plan shall be administered by the Committee, which shall hold
meetings at such times as may be necessary for the proper administration of
the Plan. The Committee shall keep minutes of its meetings. A quorum shall
consist of not fewer than two (2) members of the Committee and a majority of a
quorum may authorize any action. Any decision or determination reduced to
writing and signed by a majority of all of the members of the Committee shall
be as fully effective as if made by a majority vote at a meeting duly called
and held. The Committee shall consist of at least two (2) Directors and may
consist of the entire Board; provided, however, that (A) if the Committee
consists of less than the entire Board, each member shall be a Nonemployee
Director and (B) to the extent necessary for any Option intended to qualify as
Performance-Based Compensation to so qualify, each member of the Committee,
whether or not it consists of the entire Board, shall be an Outside Director.
For purposes of the preceding sentence, if one or more members of the
Committee is not a Nonemployee Director and an Outside Director but recuses
himself or herself or abstains from voting with respect to a particular action
taken by the Committee, then the Committee, with respect to that action, shall
be deemed to consist only of the members of the Committee who have not recused
themselves or abstained from voting.
3.2 No member of the Committee shall be liable for any action, failure to
act, determination or interpretation made in good faith with respect to the
Plan or any transaction hereunder. The Company hereby agrees to indemnify each
member of the Committee for all costs and expenses and, to the extent
permitted by applicable law, any liability incurred in connection with
defending against, responding to, negotiating for the settlement of or
otherwise dealing with any claim, cause of action or dispute of any kind
arising in connection with any actions in administering the Plan or in
authorizing or denying authorization to any transaction hereunder.
3.3 Subject to the express terms and conditions set forth herein, the
Committee shall have the power from time to time to:
(a) determine those Eligible Individuals to whom Options shall be granted
under the Plan and the number of such Options to be granted and to
prescribe the terms and conditions (which need not be identical) of each
such Option, including the exercise price per Share subject to each Option,
and make any amendment or modification to any Agreement consistent with the
terms of the Plan;
(b) to construe and interpret the Plan and any Agreements granted
hereunder and to establish, amend and revoke rules and regulations for the
administration of the Plan, including, but not limited to, correcting any
defect or supplying any omission, or reconciling any inconsistency in the
Plan or in any Agreement, in the manner and to the extent it shall deem
necessary or advisable, including so that the Plan complies with Rule 16b-3
under the Exchange Act, the Code to the extent applicable and other
applicable law, and otherwise to make the Plan fully effective. All
decisions and determinations by the Committee in the exercise of this power
shall be final, binding and conclusive upon the Company, its Subsidiaries,
the Optionees, and all other persons having any interest therein;
(c) to determine the duration and purposes for leaves of absence which
may be granted to an Optionee on an individual basis without constituting a
termination of employment or service for purposes of the Plan;
(d) to exercise its discretion with respect to the powers and rights
granted to it as set forth in the Plan; and
(e) generally, to exercise such powers and to perform such acts as are
deemed necessary or advisable to promote the best interests of the Company
with respect to the Plan.
4. Stock Subject to the Plan; Grant Limitations.
4.1 The maximum number of Shares that may be made the subject of Options
granted under the Plan is one million seven hundred thousand (1,700,000). The
maximum number of Shares that may be the subject of Options granted to any
Eligible Individual during any three (3) consecutive calendar year period may
not exceed
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500,000 Shares. Upon a Change in Capitalization, the maximum number of Shares
referred to in the first two sentences of this Section 4.1 shall be adjusted
in number and kind pursuant to Section 10. The Company shall reserve for the
purposes of the Plan, out of its authorized but unissued Shares or out of
Shares held in the Company's treasury, or partly out of each, such number of
Shares as shall be determined by the Board.
4.2 Upon the granting of an Option, the number of Shares available under
Section 4.1 for the granting of further Options shall be reduced by the number
of Shares in respect of which the Option is granted; provided, however, that
if any Option is exercised by tendering Shares, either actually or by
attestation, to the Company as full or partial payment of the exercise price,
the maximum number of Shares available under Section 4.1 shall be increased by
the number of Shares so tendered.
4.3 Whenever any outstanding Option or portion thereof expires, is canceled,
is settled in cash (including the settlement of tax withholding obligations
using Shares) or is otherwise terminated for any reason without having been
exercised or payment having been made in respect of the entire Option, the
Shares allocable to the expired, canceled, settled or otherwise terminated
portion of the Option may again be the subject of Options granted hereunder.
5. Option Grants for Eligible Individuals.
5.1 Authority of Committee. Subject to the provisions of the Plan, the
Committee shall have full and final authority to select those Eligible
Individuals who will receive Options, and the terms and conditions of the
grant to such Eligible Individuals shall be set forth in an Agreement.
5.2 Exercise Price. The purchase price or the manner in which the exercise
price is to be determined for Shares under each Option shall be determined by
the Committee and set forth in the Agreement; provided, however, that the
exercise price per Share under each Incentive Stock Option shall not be less
than 100% of the Fair Market Value of a Share on the date the Option is
granted (110% in the case of an Incentive Stock Option granted to a Ten-
Percent Stockholder).
5.3 Maximum Duration. Options granted hereunder shall be for such term as
the Committee shall determine, provided that an Incentive Stock Option shall
not be exercisable after the expiration of ten (10) years from the date it is
granted (five (5) years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder) and a Nonqualified Stock Option shall not be
exercisable after the expiration of ten (10) years from the date it is
granted; provided, however, that the Committee may provide that an Option
(other than an Incentive Stock Option) may, upon the death of the Optionee, be
exercised for up to one (1) year following the date of the Optionee's death
even if such period extends beyond ten (10) years from the date the Option is
granted. The Committee may, subsequent to the granting of any Option, extend
the term thereof, but in no event shall the term as so extended exceed the
maximum term provided for in the preceding sentence.
5.4 Vesting. Subject to Section 7.4, each Option shall become exercisable in
such installments (which need not be equal) and at such times as may be
designated by the Committee and set forth in the Agreement. To the extent not
exercised, installments shall accumulate and be exercisable, in whole or in
part, at any time after becoming exercisable, but not later than the date the
Option expires. The Committee may accelerate the exercisability of any Option
or portion thereof at any time.
5.5 Deferred Delivery of Option Shares. The Committee may, in its
discretion, permit Optionees to elect to defer the issuance of Shares upon the
exercise of one or more Nonqualified Stock Options granted pursuant to the
Plan. The terms and conditions of such deferral shall be determined at the
time of the grant of the Option or thereafter and shall be set forth in the
Agreement evidencing the grant.
5.6 Limitations on Incentive Stock Options. To the extent that the aggregate
Fair Market Value (determined as of the date of the grant) of Shares with
respect to which Incentive Stock Options granted under the Plan and "incentive
stock options" (within the meaning of Section 422 of the Code) granted under
all other
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plans of the Company or its Subsidiaries (in either case determined without
regard to this Section 5.6) are exercisable by an Optionee for the first time
during any calendar year exceeds $100,000, such Incentive Stock Options shall
be treated as Nonqualified Stock Options. In applying the limitation in the
preceding sentence in the case of multiple Option grants, Options which were
intended to be Incentive Stock Options shall be treated as Nonqualified Stock
Options according to the order in which they were granted such that the most
recently granted Options are first treated as Nonqualified Stock Options.
6. Option Grants for Nonemployee Directors.
6.1 Grant. Formula Options shall be granted to Eligible Directors as
follows:
(a) Initial Grant for Current Eligible Directors. Each person who is an
Eligible Director as of July 15, 1998, shall, as of such date, be granted a
Formula Option in respect of 25,000 Shares.
(b) Initial Grant for Subsequent Eligible Directors. Each Eligible
Director who becomes a Director for the first time after July 15, 1998 and
while this Plan is in effect, shall, upon becoming a Director, be granted a
Formula Option in respect of 12,500 Shares.
(c) Annual Grant. Each Eligible Director shall be granted a Formula
Option in respect of 3,750 Shares on the first business day after the
annual meeting of the stockholders of the Company in each year that the
Plan is in effect provided that the Eligible Director is a Director on such
date.
All Formula Options shall be evidenced by an Agreement containing such other
terms and conditions not inconsistent with the provisions of the Plan as
determined by the Board; provided, however, that such terms shall not vary the
price, amount or timing of Formula Options provided under this Section 6,
including provisions dealing with vesting, forfeiture and termination of such
Formula Options.
6.2 Purchase Price. The purchase price for Shares under each Formula Option
shall be equal to 100% of the Fair Market Value of such Shares on the date the
Formula Option is granted.
6.3 Vesting. Subject to Section 7.4, (i) each Formula Option granted
pursuant to Section 6.1(a) above to a person who was also a Director as of
August 13, 1997, shall be fully vested and exercisable with respect to 25% of
the Shares subject thereto as of the date of grant, and with respect to an
incremental 25% of the Shares subject thereto on each of the first three (3)
anniversaries of the date of grant, and (ii) each other Formula Option granted
pursuant to this Section 6 shall become fully vested and exercisable with
respect to an incremental 25% of the Shares subject thereto on each of the
first four anniversaries of the date of grant; provided, however, in each
case, that the Optionee continues to serve as a Director as of such date of
vesting. Notwithstanding the foregoing (i) if an Optionee's service as a
Director terminates for any reason, other than for Cause, then each Formula
Option held by such Optionee shall become fully and immediately vested and
exercisable as of such date of termination and (ii) if an Optionee's service
as a Director terminates for Cause, then each Formula Option held by such
Optionee, whether or not then vested and exercisable, shall immediately
terminate and the Optionee shall have no further rights in such Formula Option
as of such date of termination.
6.4 Duration. Subject to Section 7.4, each Formula Option shall terminate on
the date which is the tenth anniversary of the date of grant (or if later, the
first anniversary of the date of the Director's death if such death occurs
prior to such tenth anniversary), unless terminated earlier as follows:
(a) If an Optionee's service as a Director terminates for any reason
other than for Cause, the Optionee (or in the event of death, by the person
or persons to whom such rights shall pass by will or the laws of descent or
distribution) may for a period of two (2) years after such termination
exercise his or her Formula Option, after which time the Formula Option
shall automatically terminate in full.
(b) If an Optionee's service as a Director terminates for Cause, the
Formula Option granted to the Optionee hereunder shall immediately
terminate in full and no rights thereunder may be exercised.
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7. Terms and Conditions Applicable to All Options.
7.1 Non-Transferability. No Option shall be transferable by the Optionee
otherwise than by will or by the laws of descent and distribution or, in the
case of an Option other than an Incentive Stock Option, pursuant to a domestic
relations order (within the meaning of Rule 16a-12 promulgated under the
Exchange Act), and an Option shall be exercisable during the lifetime of such
Optionee only by the Optionee or his or her guardian or legal representative.
Notwithstanding the foregoing, the Committee may set forth in the Agreement
evidencing an Option (other than an Incentive Stock Option) at the time of
grant or thereafter, that the Option may be transferred to a Permitted
Transferee, and for purposes of the Plan, such Permitted Transferee shall be
deemed to be the Optionee. The terms of an Option shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
7.2 Method of Exercise. The exercise of an Option shall be made only by a
written notice delivered in person or by mail to the Secretary of the Company
at the Company's principal executive office, specifying the number of Shares
to be exercised and, to the extent applicable, accompanied by payment therefor
and otherwise in accordance with the Agreement pursuant to which the Option
was granted. The exercise price for any Shares purchased pursuant to the
exercise of an Option shall be paid, as determined by the Committee in its
discretion, in either of the following forms (or any combination thereof): (a)
cash or (b) the transfer, either actually or by attestation, to the Company of
Shares upon such terms and conditions as determined by the Committee. In
addition, Options may be exercised through a registered broker-dealer pursuant
to such cashless exercise procedures which are, from time to time, deemed
acceptable by the Committee. Any Shares transferred to the Company (or
withheld upon exercise) as payment of the exercise price under an Option shall
be valued at their Fair Market Value on the day preceding the date of exercise
of such Option. If requested by the Committee, the Optionee shall deliver the
Agreement evidencing the Option to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return such Agreement to the
Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon
exercise of an Option and the number of Shares that may be purchased upon
exercise shall be rounded to the nearest number of whole Shares.
7.3 Rights of Optionees. No Optionee shall be deemed for any purpose to be
the owner of any Shares subject to any Option unless and until (a) the Option
shall have been exercised pursuant to the terms thereof, (b) the Company shall
have issued and delivered Shares to the Optionee, and (c) the Optionee's name
shall have been entered as a stockholder of record on the books of the
Company. Thereupon, the Optionee shall have full voting, dividend and other
ownership rights with respect to such Shares, subject to such terms and
conditions as may be set forth in the applicable Agreement.
7.4 Effect of Change in Control. In the event of a Change in Control, all
Options outstanding on the date of such Change in Control shall become
immediately and fully exercisable. In addition, to the extent set forth in an
Agreement evidencing the grant of an Option, an Optionee will be permitted to
surrender to the Company for cancellation within sixty (60) days after such
Change in Control any Option or portion of an Option to the extent not yet
exercised and the Optionee will be entitled to receive a cash payment in an
amount equal to the excess, if any, of (a) (i) in the case of a Nonqualified
Stock Option, the greater of (A) the Fair Market Value, on the date preceding
the date of surrender, of the Shares subject to the Option or portion thereof
surrendered or (B) the Adjusted Fair Market Value of the Shares subject to the
Option or portion thereof surrendered or (ii) in the case of an Incentive
Stock Option, the Fair Market Value, on the date preceding the date of
surrender, of the Shares subject to the Option or portion thereof surrendered,
over (b) the aggregate exercise price for such Shares under the Option or
portion thereof surrendered. In the event an Optionee's employment with, or
service as a Director of, the Company and its Subsidiaries terminates
following a Change in Control, each Option held by the Optionee that was
exercisable as of the date of termination of the Optionee's employment or
service shall, notwithstanding any shorter period set forth in the Agreement
evidencing the Option, remain exercisable for a period ending not before the
earlier of (x) the first anniversary of the termination of the Optionee's
employment or service or (y) the expiration of the stated term of the Option.
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8. Stock Bonus for Community Leaders. The Committee may grant Shares to
Community Leaders from time to time. The Committee in its sole discretion
shall determine the Community Leaders to whom Shares shall be granted, and the
number of Shares so granted. Any Shares granted under this Section 8 shall be
without consideration to the Company and shall be fully and immediately vested
upon grant.
9. Effect of a Termination of Employment. The Agreement evidencing the grant
of each Option shall set forth the terms and conditions applicable to such
Option upon a termination or change in the status of the employment of the
Optionee by the Company or a Subsidiary or a Division (including a termination
or change by reason of the sale of a Subsidiary or a Division), which, except
for Director Options, shall be as the Committee may, in its discretion,
determine at the time the Option is granted or thereafter.
10. Adjustment Upon Changes in Capitalization.
(a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to (i) the maximum
number and class of Shares or other stock or securities with respect to which
Options may be granted under the Plan, (ii) the maximum number and class of
Shares or other stock or securities with respect to which Options may be
granted to any Eligible Individual during any three (3) consecutive calendar
year period, (iii) the number and class of Shares or other stock or securities
which are subject to outstanding Options granted under the Plan and the
exercise price therefor, if applicable and (iv) the number and class of Shares
or other securities in respect of which Director Options are to be granted
under Section 6.
(b) Any such adjustment in the Shares or other stock or securities subject
to outstanding Incentive Stock Options (including any adjustments in the
exercise price) shall be made in such manner as not to constitute a
modification as defined by Section 424(h)(3) of the Code and only to the
extent otherwise permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, an Optionee shall be
entitled to exercise an Option with respect to new, additional or different
shares of stock or securities, such new, additional or different shares shall
thereupon be subject to all of the conditions, restrictions and performance
criteria which were applicable to the Shares subject to the Option prior to
such Change in Capitalization.
11. Effect of Certain Transactions. Subject to Section 7.4 or as otherwise
provided in an Agreement, in the event of (a) the liquidation or dissolution
of the Company or (b) a merger or consolidation of the Company (a
"Transaction"), the Plan and the Options issued hereunder shall continue in
effect in accordance with their respective terms, except that following a
Transaction each Optionee shall be entitled to receive in respect of each
Share subject to any outstanding Options, upon exercise of any Option, the
same number and kind of stock, securities, cash, property or other
consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share; provided, however, that such stock,
securities, cash, property, or other consideration shall remain subject to all
of the conditions, restrictions and performance criteria which were applicable
to the Options prior to such Transaction.
12. Interpretation.
(a) The Plan is intended to comply with Rule 16b-3 promulgated under the
Exchange Act and the Committee shall interpret and administer the provisions
of the Plan or any Agreement in a manner consistent therewith. Any provisions
inconsistent with such rule shall be inoperative and shall not affect the
validity of the Plan.
(b) Unless otherwise expressly stated in the relevant Agreement, each Option
(other than Formula Options) granted under the Plan is intended to be
Performance-Based Compensation. The Committee shall not be entitled to
exercise any discretion otherwise authorized hereunder with respect to such
Options if the ability to exercise such discretion or the exercise of such
discretion itself would cause the compensation attributable to such Options to
fail to qualify as Performance-Based Compensation.
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13. Pooling Transactions. Notwithstanding anything contained in the Plan or
any Agreement to the contrary, in the event of a Change in Control which is
also intended to constitute a Pooling Transaction, the Committee shall take
such actions, if any, as are specifically recommended by an independent
accounting firm retained by the Company to the extent reasonably necessary in
order to assure that the Pooling Transaction will qualify as such, including
but not limited to (a) deferring the vesting, exercise, payment, settlement or
lapsing of restrictions with respect to any Option, (b) providing that the
payment or settlement in respect of any Option be made in the form of cash,
Shares or securities of a successor or acquirer of the Company, or a
combination of the foregoing, and (c) providing for the extension of the term
of any Option to the extent necessary to accommodate the foregoing, but not
beyond the maximum term permitted for any Option.
14. Termination and Amendment of the Plan or Modification of Options.
14.1 Plan Amendment or Termination. The Plan shall terminate on the day
preceding the tenth anniversary of the date of its adoption by the Board and
no Option may be granted thereafter. The Board may sooner terminate the Plan
and the Board may at any time and from time to time amend, modify or suspend
the Plan; provided, however, that:
(a) no such amendment, modification, suspension or termination shall
impair or adversely alter any Options theretofore granted under the Plan,
except with the consent of the Optionee, nor shall any amendment,
modification, suspension or termination deprive any Optionee of any Shares
which he or she may have acquired through or as a result of the Plan; and
(b) to the extent necessary under any applicable law, regulation or
exchange requirement, no amendment shall be effective unless approved by
the stockholders of the Company in accordance with applicable law,
regulation or exchange requirement.
14.2 Modification of Options. No modification of an Option shall adversely
alter or impair any rights or obligations under the Option without the consent
of the Optionee.
15. Non-Exclusivity of the Plan. The adoption of the Plan by the Board shall
not be construed as amending, modifying or rescinding any previously approved
incentive arrangement or as creating any limitations on the power of the Board
to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options otherwise than
under the Plan, and such arrangements may be either applicable generally or
only in specific cases.
16. Limitation of Liability. As illustrative of the limitations of liability
of the Company, but not intended to be exhaustive thereof, nothing in the Plan
shall be construed to:
(a) give any person any right to be granted an Option other than at the
sole discretion of the Committee;
(b) give any person any rights whatsoever with respect to Shares except
as specifically provided in the Plan;
(c) limit in any way the right of the Company or any Subsidiary to
terminate the employment or service of any person at any time; or
(d) be evidence of any agreement or understanding, expressed or implied,
that the Company will employ any person at any particular rate of
compensation or for any particular period of time.
17. Regulations and Other Approvals; Governing Law.
17.1 Except as to matters of federal law, the Plan and the rights of all
persons claiming hereunder shall be construed and determined in accordance
with the laws of the State of Delaware without giving effect to conflicts of
laws principles thereof.
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17.2 The obligation of the Company to sell or deliver Shares with respect to
Options granted under the Plan shall be subject to all applicable laws, rules
and regulations, including all applicable federal and state securities laws,
and the obtaining of all such approvals by governmental agencies as may be
deemed necessary or appropriate by the Committee.
17.3 The Board may make such changes as may be necessary or appropriate to
comply with the rules and regulations of any government authority, or to
obtain for Eligible Individuals granted Incentive Stock Options the tax
benefits under the applicable provisions of the Code and regulations
promulgated thereunder.
17.4 Each Option is subject to the requirement that, if at any time the
Committee determines, in its discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or the issuance of
Shares, no Options shall be granted or payment made or Shares issued, in whole
or in part, unless listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions as acceptable to the
Committee.
17.5 Notwithstanding anything contained in the Plan or any Agreement to the
contrary, in the event that the disposition of Shares acquired pursuant to the
Plan is not covered by a then current registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), and is not
otherwise exempt from such registration, such Shares shall be restricted
against transfer to the extent required by the Securities Act and Rule 144 or
other regulations thereunder. The Committee may require any individual
receiving Shares pursuant to an Option granted under the Plan, as a condition
precedent to receipt of such Shares, to represent and warrant to the Company
in writing that the Shares acquired by such individual are acquired without a
view to any distribution thereof and will not be sold or transferred other
than pursuant to an effective registration thereof under said Act or pursuant
to an exemption applicable under the Securities Act or the rules and
regulations promulgated thereunder. The certificates evidencing any of such
Shares shall be appropriately amended to reflect their status as restricted
securities as aforesaid.
18. Miscellaneous.
18.1 Multiple Agreements. The terms of each Option may differ from other
Options granted under the Plan at the same time, or at some other time. The
Committee may also grant more than one Option to a given Eligible Individual
during the term of the Plan, either in addition to, or in substitution for,
one or more Options previously granted to that Eligible Individual.
18.2 Withholding of Taxes.
(a) At such times as an Optionee recognizes taxable income in connection
with the receipt of Shares hereunder (a "Taxable Event"), the Optionee
shall pay to the Company an amount equal to the federal, state and local
income taxes and other amounts as may be required by law to be withheld by
the Company in connection with the Taxable Event (the "Withholding Taxes")
prior to the issuance of such Shares. The Company shall have the right to
deduct from any payment of cash to an Optionee an amount equal to the
Withholding Taxes in satisfaction of the obligation to pay Withholding
Taxes. The Committee may provide in the Agreement, at the time of grant or
at any time thereafter, that the Optionee, in satisfaction of the
obligation to pay Withholding Taxes, may elect to have withheld a portion
of the Shares then issuable to him or her having an aggregate Fair Market
Value equal to the Withholding Taxes.
(b) If an Optionee makes a disposition, within the meaning of Section
424(c) of the Code and regulations promulgated thereunder, of any Share or
Shares issued to such Optionee pursuant to the exercise of an Incentive
Stock Option within the two-year period commencing on the day after the
date of the grant or within the one-year period commencing on the day after
the date of transfer of such Share or Shares to
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the Optionee pursuant to such exercise, the Optionee shall, within ten (10)
days of such disposition, notify the Company thereof, by delivery of
written notice to the Company at its principal executive office.
18.3 Effective Date. The effective date of the Plan shall be as determined by
the Board, subject only to the approval by the affirmative vote of the holders
of a majority of the securities of the Company present, or represented, and
entitled to vote at a meeting of stockholders duly held in accordance with the
applicable laws of the State of Delaware within twelve (12) months of the
adoption of the Plan by the Board.
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EXHIBIT B
theglobe.com,inc.
1999 EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
Introduction
1. Purpose. theglobe.com, inc. 1999 Employee Stock Purchase Plan (the
"Plan") is intended to provide a method whereby employees of theglobe.com,
inc. (the "Company") and its Eligible Subsidiary Corporations (as defined
below) will have an opportunity to acquire a proprietary interest in the
Company through the purchase of shares of the Common Stock (as defined below).
2. Rules of Interpretation. It is the intention of the Company to have the
Plan qualify as an "employee stock purchase plan" under (S) 423 of the
Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the
Plan shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code.
ARTICLE II
Definitions
2.01 "Code" shall have the meaning set forth in Section 1.02.
2.02 "Company" shall have the meaning set forth in Section 1.01.
2.03 "Compensation" shall mean the gross cash compensation (including wage,
salary and overtime earnings) paid by the Company or any Eligible Subsidiary
Corporation to a participant in accordance with the terms of employment, but
excluding all bonus payments, expense allowances and compensation paid in a
form other than cash.
2.04 "Committee" shall have the meaning set forth in Section 11.01.
2.05 "Common Stock" shall mean the common stock, par value $.001, of the
Company.
2.06 "Eligible Subsidiary Corporation" shall mean each Subsidiary
Corporation the employees of which are entitled to participate in the Plan, as
listed or referred to on Schedule 2.04 hereto.
2.07 "Employee" shall have the meaning set forth in Section 3.01.
2.08 "Offering Commencement Date" shall have the meaning set forth in
Section 4.02.
2.09 "Offering Price" shall have the meaning set forth in Section 6.02.
2.10 "Offering Termination Date" shall have the meaning set forth in Section
4.02.
2.11 "Offerings" shall have the meaning set forth in Section 4.02.
2.12 "Plan" shall have the meaning set forth in Section 1.01.
2.13 "Plan Representative" shall mean the person designated from time to
time by the Committee to receive certain notices and take certain other
administrative actions relating to participation in the Plan.
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2.14 "Subsidiary Corporation" shall mean any present or future corporation
which (i) is or becomes a "subsidiary corporation" (as that term is defined in
(S) 424 of the Code) of the Company, and (ii) is designated as a participating
employer in the Plan by the Committee.
ARTICLE III
Eligibility and Participation
3.01 Initial Eligibility. Each employee who shall have completed six
consecutive months of full-time employment with the Company and/or any
Eligible Subsidiary Corporation shall be eligible to participate in Offerings
which commence after such six-month period has concluded, provided he or she
is employed on a full-time basis by the Company or an Eligible Subsidiary
Corporation as of the relevant Offering Commencement Date (any such eligible
employee, an "Employee"). Persons who are not Employees shall not be eligible
to participate in the Plan.
3.02 Restrictions on Participation. Notwithstanding any provision of the
Plan to the contrary, no Employee shall be granted an option to purchase
shares of Common Stock under the Plan:
(a) if, immediately after the grant, such Employee would own stock and/or
hold outstanding options to purchase stock possessing 5% or more of the
total combined voting power or value of all classes of stock of the Company
(for purposes of this paragraph, the rules of (S) 424(d) and (S) 423(b)(3)
of the Code shall apply in determining stock ownership of any Employee); or
(b) which permits such Employee's rights to purchase stock under all
employee stock purchase plans of the Company to accrue at a rate which
exceeds $25,000 of fair market value of the Common Stock (determined at the
time such option is granted) for each calendar year in which such option is
outstanding at any time.
3.03 Commencement of Participation. An eligible Employee may become a
participant by completing an authorization for payroll deductions on the form
provided by the Company and filing the completed form with the Plan
Representative on or before the filing date set therefor by the Committee,
which date shall be prior to the Offering Commencement Date for the next
following Offering. Payroll deductions for a participant shall commence on the
next following Offering Commencement Date after the Employee's authorization
for payroll deductions becomes effective and shall continue until termination
of the Plan or the participant's earlier termination of participation in the
Plan. Each participant in the Plan shall be deemed to continue participation
until termination of the Plan or such participant's earlier termination of
participation in the Plan pursuant to Article VIII below.
ARTICLE IV
Stock Subject to the Plan and Offerings
4.01 Stock Subject to the Plan. Subject to the provisions of Section 12.04,
the Company's Board of Directors shall reserve initially for issuance under
the Plan an aggregate of two hundred thousand (200,000) shares of Common
Stock, which shares shall be authorized but unissued. The Company's Board of
Directors may from time to time reserve additional shares of authorized and
unissued Common Stock for issuance pursuant to the Plan; provided, however,
that at no time shall the number of shares of Common Stock reserved be greater
than permitted by applicable law.
4.02 Offerings. The Plan will be implemented by four offerings of the Common
Stock during each twelve-month period (the "Offerings"). For so long as the
Plan is in effect, an Offering will begin on May 1 and end on July 31, begin
on August 1 and end on October 31, begin on November 1 and end on January 31,
and begin on February 1 and end on April 30. The first day of an Offering
shall be deemed the "Offering Commencement Date" and the last day the
"Offering Termination Date" for such Offering.
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ARTICLE V
Payroll Deductions
5.01 Amount of Deduction. The form described in Section 3.03 will permit a
participant to elect payroll deductions of any whole percentage from one
percent (1%) through ten percent (10%) of such participant's Compensation for
each pay period during an Offering.
5.02 Participant's Account. All payroll deductions made for a participant
shall be credited to an account established for such participant under the
Plan. A participant may not make any separate cash payment into such account.
5.03 Changes in Payroll Deductions. A participant may reduce or increase
future payroll deductions (within the limits described in Section 5.01) by
filing with the Plan Representative a form provided by the Company for such
purpose. The effective date of any increase or reduction in future payroll
deductions will be the first day of the next Offering following processing of
the change form. A participant may increase or reduce the amount of his or her
payroll deductions only once with respect to any Offering.
ARTICLE VI
Granting of Option
6.01 Number of Option Shares. On the Offering Commencement Date (for each
Offering), each participating Employee shall be deemed to have been granted an
option to purchase a maximum number of shares of Common Stock the fair market
value of which is equal to (i) that percentage of the Employee's Compensation
which the Employee has elected to have withheld (but not in any case in excess
of 10%) multiplied by (ii) the Employee's Compensation during the Offering
then divided by (iii) the applicable Offering Price determined as provided in
Section 6.02 below. Notwithstanding the foregoing, the maximum number of
shares of Common Stock that a participant may purchase pursuant to an Offering
is 2,000.
6.02 Option Price. The option price of stock purchased with payroll
deductions made during any Offering (the "Offering Price") for a participant
therein shall be the lower of:
(a) 85% of the closing price of the stock on the Offering Commencement
Date for such Offering or the nearest prior business day on which trading
occurred on the NASDAQ National Market System; or
(b) 85% of the closing price on the Offering Termination Date for such
Offering or the nearest prior business day on which trading occurred on the
NASDAQ National Market System. If the Common Stock of the Company is not
admitted to trading on any of the aforesaid dates for which closing prices
of the stock are to be determined, then reference shall be made to the fair
market value of the stock on each such date, as determined on such basis as
shall be established or specified by the Committee.
ARTICLE VII
Exercise of Option
7.01 Automatic Exercise. Subject to Section 6.01, each Plan participant's
option for the purchase of stock with payroll deductions made during any
Offering will be deemed to have been exercised automatically on the applicable
Offering Termination Date for the purchase of the number of full shares of
Common Stock which the accumulated payroll deductions in the participant's
account at the time will purchase at the applicable Offering Price.
7.02 Withdrawal of Account. No participant in the Plan shall be entitled to
withdraw any amount from the accumulated payroll deductions in his or her
account; provided, however, that a participant's accumulated
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payroll deductions shall be refunded to the participant as and to the extent
specified in Section 8.01 below upon termination of such participant's
participation in the Plan.
7.03 Fractional Shares. Fractional shares of Common Stock will not be issued
under the Plan. Any accumulated payroll deductions which would have been used
to purchase fractional shares, unless refunded pursuant to Section 7.02 above,
will be held for the purchase of Common Stock in the next following Offering,
without interest.
7.04 Exercise of Options. During a participant's lifetime, options held by
such participant shall be exercisable only by such participant.
7.05 Delivery of Stock. As promptly as practicable after the Offering
Termination Date of each Offering, the Company will deliver to each
participant in such Offering, as appropriate, the shares of Common Stock
purchased therein upon exercise of such participant's option. The Company may
deliver such shares in certificated or book entry form, at the Company's sole
election. The Company may require a participant to dispose of the shares of
Common Stock acquired pursuant to the Plan through one or more brokers
designated by the Company.
7.06 Stock Transfer Restrictions. The Plan is intended to satisfy the
requirements of (S) 423 of the Code. A participant will not obtain the
benefits of this provision if such participant disposes of shares of Common
Stock acquired pursuant to the Plan within two (2) years from the applicable
Offering Commencement Date.
ARTICLE VIII
Withdrawal
8.01 In General. A participant may stop participating in the Plan at any
time by giving written notice to the Plan Representative. Upon processing of
any such written notice, no further payroll deductions will be made from the
participant's Compensation during such Offering or thereafter, unless and
until such participant elects to resume participation. Such participant's
payroll deductions accumulated prior to processing of such notice to stop
participation shall be applied toward purchasing full shares of Common Stock
in the then-current Offering as provided in Section 7.01 above. Any cash
balance remaining after the purchase of shares in such Offering shall be
refunded promptly to such participant. A participant may elect to resume
participation in the Plan by providing written notice to the Plan
Representative pursuant to Section 3.03 above. Such election to resume
participation shall be effective as of the first Offering commencing following
the processing of such election.
8.02 Effect on Subsequent Participation. A participant's withdrawal from any
Offering will not have any effect upon such participant's eligibility to
participate in any succeeding Offering or in any similar plan which may
hereafter be adopted by the Company and for which such participant is
otherwise eligible.
8.03 Termination of Employment. Upon termination of a participant's
employment with the Company or any Eligible Subsidiary Corporation (as the
case may be) for any reason, including retirement or death, the participant's
payroll deductions accumulated prior to such termination, if any, shall be
applied toward purchasing full shares of Common Stock in the then-current
Offering, and any cash balance remaining after the purchase of shares in such
Offering shall be refunded to him or her, or, in the case of his or her death,
to the person or persons entitled thereto under Section 12.01, and his or her
participation in the Plan shall be deemed to be terminated.
ARTICLE IX
Interest
9.01 Payment of Interest. No interest will be paid or allowed on any money
paid into the Plan or credited to the account of or distributed to any
participant.
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ARTICLE X
Stock
10.01 Participant's Interest in Option Stock. No participant will have any
interest in shares of Common Stock covered by any option held by such
participant until such option has been exercised as provided in Section 7.01
above.
10.02 Registration of Stock. Shares of Common Stock purchased by a
participant under the Plan will be recorded in the books and records of the
Company in the name of the participant.
10.03 Restrictions on Exercise. The Board of Directors of the Company may,
in its discretion, require as conditions to the exercise of any option that
the shares of Common Stock reserved for issuance upon the exercise of such
option shall have been duly listed, upon official notice of issuance, upon a
stock exchange or market, and that either:
(a) a registration statement under the Securities Act of 1933, as
amended, with respect to said shares shall be effective, or
(b) the participant shall have represented at the time of purchase, in
form and substance satisfactory to the Company, that it is his or her
intention to purchase the shares for investment and not for resale or
distribution.
ARTICLE XI
Administration
11.01 Appointment of Committee. The Board of Directors of the Company shall
appoint a committee (the "Committee") to administer the Plan, which shall
consist solely of no fewer than two "non-employee directors" (as defined in
Rule 16b-3(a)(3) promulgated under the Securities Exchange Act of 1934, as
amended).
11.02 Authority of Committee. Subject to the express provisions of the Plan,
the Committee shall have plenary authority in its discretion to interpret and
construe any and all provisions of the Plan, to adopt rules and regulations
for administering the Plan, and to make all other determinations deemed
necessary or advisable for administering the Plan. The Committee's
determination of the foregoing matters shall be conclusive.
11.03 Rules Governing the Administration of the Committee. The Board of
Directors of the Company may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed
and may fill vacancies, however caused, in the Committee. The Committee may
select one of its members as its chairman, shall hold its meetings at such
times and places as it shall deem advisable, and may hold telephonic meetings.
All determinations of the Committee shall be made by a majority of its
members. A decision or determination reduced to writing and signed by a
majority of the members of the Committee shall be as fully effective as if it
had been made by a majority vote at a meeting duly called and held. The
Committee may appoint a secretary and shall make such rules and regulations
for the conduct of its business as it shall deem advisable.
ARTICLE XII
Miscellaneous
12.01 Designation of Beneficiary. A participant may file with the Plan
Representative a written designation of a beneficiary who is to receive any
shares of Common Stock and/or cash under the Plan upon the participant's
death. Such designation of beneficiary may be changed by the participant at
any time by written notice to the Plan Representative. Upon the death of a
participant and receipt by the Company of proof of identity
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and existence at the participant's death of a beneficiary validly designated
by the participant under the Plan, and subject to Article VIII above
concerning withdrawal from the Plan, the Company shall deliver such shares of
Common Stock and/or cash to such beneficiary. In the event of the death of a
participant lacking a beneficiary validly designated under the Plan who is
living at the time of such participant's death, the Company shall deliver such
shares of Common Stock and/or cash to the executor or administrator of the
estate of the participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion,
may deliver such shares of Common Stock and/or cash to the spouse or to any
one or more dependents of the participant, in each case without any further
liability of the Company whatsoever under or relating to the Plan. No
beneficiary shall, prior to the death of the participant by whom he or she has
been designated, acquire any interest in the shares of Common Stock and/or
cash credited to the participant under the Plan.
12.02 Transferability. Neither payroll deductions credited to any
participant's account nor any option or rights with regard to the exercise of
an option or the receipt of Common Stock under the Plan may be assigned,
transferred, pledged, or otherwise disposed of in any way by the participant
other than by will or the laws of descent and distribution. Any such attempted
assignment, transfer, pledge or other disposition shall be without effect,
except that the Company may, in its discretion, treat such act as an election
to withdraw from participation in the Plan in accordance with Section 8.01.
12.03 Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose. The
Company shall not be obligated to segregate such payroll deductions.
12.04 Adjustment Upon Changes in Capitalization.
(a) If, while any options are outstanding under the Plan, the outstanding
shares of Common Stock of the Company have increased, decreased, changed
into, or been exchanged for a different number or kind of shares or
securities of the Company through any reorganization, merger,
recapitalization, reclassification, stock split, reverse stock split or
similar transaction, appropriate and proportionate adjustments may be made
by the Committee in the number and/or kind of shares which are subject to
purchase under outstanding options and in the Option Price applicable to
such outstanding options. In addition, in any such event, the number and/or
kind of shares which may be offered in the Offerings described in Article
IV hereof shall also be proportionately adjusted.
(b) Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving
corporation, or upon a sale of substantially all of the property or capital
stock of the Company to another corporation, the holder of each option then
outstanding under the Plan will thereafter be entitled to receive at the
next Offering Termination Date, upon the exercise of such option, for each
share as to which such option shall be exercised, as nearly as reasonably
may be determined, the cash, securities and/or property which a holder of
one share of the Common Stock was entitled to receive upon and at the time
of such transaction. The Board of Directors of the Company shall take such
steps in connection with such transactions as it shall deem necessary to
assure that the provisions of this Section 12.04 shall thereafter be
applicable, as nearly as reasonably may be determined, in relation to the
said cash, securities and/or property as to which each such holder of any
such option might hereafter be entitled to receive.
12.05 Amendment and Termination. The Board of Directors of the Company shall
have complete power and authority to terminate or amend the Plan; provided,
however, that the Board of Directors of the Company shall not, without the
approval of the shareholders of the Company, alter (i) the aggregate number of
shares of Common Stock which may be issued under the Plan (except pursuant to
Section 12.04 above), or (ii) the class of employees eligible to receive
options under the Plan, other than to designate additional Subsidiary
Corporations as Eligible Subsidiary Corporations; and provided further,
however, that no termination, modification, or amendment of the Plan may,
without the consent of an Employee then having an option under the Plan to
purchase shares of Common Stock, adversely affect the rights of such Employee
under such option, except that the foregoing shall not prohibit the Company
from terminating the Plan at any time (including during an
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Offering) and applying the amounts theretofore withheld from participants to
the purchase of shares of Common Stock as if the termination date of the Plan
were an Offering Termination Date.
12.06 Effective Date. The Plan shall become effective as of May 1, 1999,
subject to approval by the holders of a majority of the shares of Common Stock
present and represented at any special or annual meeting of the shareholders
of the Company duly held within 12 months after adoption of the Plan. If the
Plan is not so approved, the Plan shall not become effective.
12.07 No Employment Rights. The Plan does not, directly or indirectly,
create in any person any right with respect to continuation of employment by
the Company or any Subsidiary Corporation, and it shall not be deemed to
interfere in any way with the Company's or any Subsidiary Corporation's right
to terminate, or otherwise modify, any Employee's employment at any time.
12.08 Effect of Plan. The provisions of the Plan shall, in accordance with
its terms, be binding upon, and inure to the benefit of, all successors of
each Employee participating in the Plan, including, without limitation, such
Employee's estate and the executors, administrators or trustees thereof, heirs
and legatees, and any receiver, trustee in bankruptcy or representative of
creditors of such Employee.
12.09 Governing Law. The law of the State of New York will govern all
matters relating to this Plan except to the extent superseded by the federal
laws of the United States.
----------------
Schedule 2.04 to
theglobe.com, inc. 1999 Employee Stock Purchase Plan
Eligible Subsidiary Corporations
1. Each Subsidiary Corporation organized under the laws of any of the states
of the United States of America.
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Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
theglobe.com, inc.
June 8, 1999
Please Detach and Mail in the Envelope Provided
- ------------------------------------------------------------------------------
A [X] Please mark your
votes as in this
example using
dark ink only.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR MATTERS (1), (2) AND (3) LISTED
BELOW, TO COME BEFORE THE ANNUAL MEETING.
1. Election of nine (9) directors, to serve until the 2000 Annual Meeting of
Stockholders.
FOR all nominees WITHHOLD Nominees: Michael S. Egan
listed at right AUTHORITY Todd V. Krizelman
(except as marked to to vote for all Stephan J. Paternot
the contrary below.) nominees listed at right Edward A. Cespedes
[ ] [ ] Rosalie V. Arthur
Henry C. Duques
Robert M. Halperin
FOR, except withheld from the following nominee(s): David H. Horowitz
H. Wayne Huizenga
2. To approve theglobe's 1998 Stock Option Plan, as amended and restated.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To approve theglobe's 1999 Employee Stock Purchase Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. Upon any and all other business that may properly come before the Annual
Meeting.
This Proxy, which is solicited on behalf of the Board of Directors, will be
voted FOR the matters described in paragraphs (1), (2) and (3), unless the
shareholder specifies otherwise, in which case it will be voted as specified.
SIGNATURE ________________________________________________DATED__________, 1999
SIGNATURE ________________________________________________DATED__________, 1999
NOTE: Please sign exactly as name or names appear hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If a corporation, please sign in full corporate name by president or
other authorized officer. If a partnership, please sign in partnership name by
authorized partner.
<PAGE>
PROXY PROXY
theglobe.com, inc.
(Solicited on behalf of the Board of Directors)
The undersigned holder of common stock of theglobe.com, inc., revoking all
proxies previously given, hereby constitutes and appoints Todd V. Krizelman and
Stephan J. Paternot, and each of them Proxies, with full power of substitution
and resubstitution, on behalf and in the name of the undersigned, to vote all of
the undersigned's shares of the said stock, according to the number of votes
and with all the powers the undersigned would possess if personally present, at
the Annual Meeting of Stockholders of theglobe.com, inc., to be held at the
Loews New York Hotel, 569 Lexington Avenue, New York, NY 10022, Tuesday, June 8,
1999, at 8:30 a.m., local time, and at any adjournments or postponements
thereof.
The undersigned hereby acknowledges receipt of the Notice of Meeting and Proxy
Statement relating to the meeting and hereby revokes any proxy or proxies
previously given.
Each properly executed Proxy will be voted in accordance with the specifications
made on the reverse side of this Proxy and in the discretion of the Proxies on
any other matter which may properly come before the meeting. Where no choice is
specified, this Proxy will be voted FOR all listed nominees to serve as
directors and FOR proposals 2 and 3.
PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE
