<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Purchase Pro.com, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
PurchasePro.com, Inc.
3291 North Buffalo Drive
Las Vegas, NV 89129
(702) 316-7000
June 12, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
PurchasePro.com which will be held on Friday, July 21, 2000, at 10:00 a.m.
(Pacific Time), at the MGM Grand Hotel, 3799 Las Vegas Boulevard South, Las
Vegas, NV 89109.
After reading the enclosed proxy statement, please mark, date, sign and
return, at your earliest convenience, the enclosed form of proxy in the
prepaid envelope to ensure that your shares will be represented. YOUR SHARES
CANNOT BE VOTED UNLESS YOU SIGN, DATE AND RETURN THE ENCLOSED PROXY OR ATTEND
THE ANNUAL MEETING IN PERSON.
The Board of Directors and Management look forward to seeing you at the
Meeting.
Sincerely yours,
/s/ Charles E. Johnson, Jr.
Charles E. Johnson, Jr.
Chief Executive Officer
<PAGE>
PurchasePro.com, Inc.
[LOGO OF PURCHASEPRO.COM(SM)]
Annual Meeting of Stockholders
to be held July 21, 2000
To the Stockholders of PurchasePro.com, Inc.:
The Annual Meeting of Stockholders of PurchasePro.com, Inc., a Nevada
corporation (the "Company"), will be held at the MGM Grand Hotel, 3799 Las
Vegas Boulevard South, Las Vegas, NV 89109, on Friday, July 21, 2000, at 10:00
a.m. (Pacific Time), for the following purposes:
1. To elect two (2) Class I directors: Martha Layne Collins and David I.
Fuente;
2. To approve a proposal to authorize the Board of Directors to amend our
Amended and Restated Articles of Incorporation to increase the number of
shares of Common Stock authorized for issuance by 150,000,000 shares;
3. To approve a proposal to amend our 1999 Stock Plan to increase the
number of shares issuable under the Plan by 4,500,000 shares; and
4. To transact such other business as may properly come before the Annual
Meeting and any adjournment or postponement of the Annual Meeting.
Stockholders of record as of the close of business on June 2, 2000, are
entitled to notice of and to vote at the Annual Meeting and any adjournment or
postponement of the meeting. A complete list of record holders entitled to
vote will be available at the Secretary's office, 3291 North Buffalo Drive,
Las Vegas, NV 89129, for ten days before the meeting.
It Is Important That Your Shares Are Represented At This Meeting. Even If
You Plan To Attend The Meeting, We Hope That You Will Promptly Mark, Sign,
Date And Return The Enclosed Proxy. This Will Not Limit Your Rights To Attend
Or Vote At The Meeting.
By Order of the Board of Directors.
/s/ Christopher P. Carton
Christopher P. Carton,
Secretary
June 12, 2000
<PAGE>
PurchasePro.com, Inc.
-------------------------------
PROXY STATEMENT
-------------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
This proxy statement is furnished in connection with the solicitation by our
Board of Directors of proxies to be used at an Annual Meeting of Stockholders
to be held at the MGM Grand Hotel, 3799 Las Vegas Boulevard South, Las Vegas,
NV 89109, on Friday, July 21, 2000, and any adjournment or postponement
thereof. This Proxy Statement and the accompanying form of proxy are being
mailed to our stockholders on or about June 14, 2000.
The shares represented by the proxies received in response to this
solicitation and not revoked will be voted at the Annual Meeting. A proxy may
be revoked at any time before it is exercised by filing with our Secretary a
written revocation or a duly executed proxy bearing a later date or by voting
in person at the Annual Meeting. On the matters coming before the Annual
Meeting for which a choice has been specified by a stockholder on the proxy,
the shares will be voted accordingly. If no choice is specified, the shares
will be voted FOR the approval of Proposals 1, 2 and 3 described in the notice
of Annual Meeting and in this proxy statement.
The proxy also confers discretionary authority to vote the shares
represented by the proxy on any matter that was not known at the time this
proxy statement was mailed which may properly be presented for action at the
meeting and may include: action with respect to procedural matters pertaining
to the conduct of the meeting and election of any person to any office for
which a bona fide nominee is named herein if such nominee is unable to serve
or for good cause will not serve. Management of PurchasePro.com is not aware
of any other matters to come before the meeting. If, however, any other
matters of which the Board is not now aware are properly presented for action,
it is the intention of the proxy holders named in the enclosed proxy to vote
such proxy on such matters in accordance with their best business judgment.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE DIRECTORS NOMINATED BY THE BOARD AND FOR PROPOSAL 2 AND FOR
PROPOSAL 3.
Stockholders of record at the close of business on June 2, 2000, are
entitled to notice of and to vote at the Annual Meeting. As of the close of
business on that date, we had approximately 32,935,000 shares of common stock
outstanding and entitled to vote. Such shares are held by approximately 71,000
stockholders. Each holder of common stock is entitled to one vote for each
share held as of the record date.
Any disabled stockholder or stockholder's representative may request
reasonable assistance or accommodation from us in connection with the Annual
Meeting by contacting us at PurchasePro.com, Inc., Investor Relations, 3291
North Buffalo Drive, Las Vegas, NV 89129 (702) 316-7000. To provide us
sufficient time to arrange for reasonable assistance or accommodation, please
submit all requests by July 7, 2000.
A majority of the shares entitled to vote, represented either in person or
by a properly executed proxy, will constitute a quorum at the meeting. If, by
the time scheduled for the meeting, a quorum of stockholders of
PurchasePro.com is not present or if a quorum is present but sufficient votes
in favor of any of the proposals have not been received, the meeting may be
held for purposes of voting on those proposals for which sufficient votes have
been received, and the persons named as proxies may propose one or more
adjournments of the meeting to permit further solicitation of proxies with
respect to any of the proposals for which sufficient votes have not been
received.
<PAGE>
In the election of directors, the two (2) candidates receiving the highest
number of votes will be elected. Proposal 2 requires the affirmative vote of
sixty-six and two-thirds percent (66 2/3%) of our outstanding shares. Proposal
3 requires the affirmative vote of a majority of our shares present or
represented. Abstentions will be treated as shares present or represented and
entitled to vote in determining if a quorum is present. If shares are not
voted by the broker who is the record holder of such shares, or if shares are
not voted in other circumstances in which proxy authority is defective or has
been withheld with respect to any matter, these non-voted shares will not be
deemed to be present or represented for purposes of determining whether
stockholder approval has been obtained and will have the same effect as
negative votes in deciding whether Proposal 2 is approved and will be
disregarded in deciding whether Proposal 3 is approved.
The expense of printing and mailing proxy materials will be borne by us. In
addition to the solicitation of proxies by mail, solicitation may be made by
our directors, officers and other employees by personal interview, telephone
or facsimile. No additional compensation will be paid to these persons for
such solicitation. We will reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation materials to beneficial owners
of our common stock. We have retained Georgeson Shareholder Communications,
Inc. to assist in the solicitation of proxies at a cost of approximately
$10,000.
IMPORTANT
Please mark, sign and date the enclosed proxy and return it at your earliest
convenience in the enclosed postage-prepaid return envelope so that, whether
you intend to be present at the Annual Meeting or not, your shares can be
voted. This will not limit your rights to attend or vote at the Annual
Meeting.
2
<PAGE>
STOCK OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of June 2, 2000 as to shares
of common stock beneficially owned by (i) each person known by PurchasePro.com
to be the beneficial owner of more than 5% of the outstanding shares of the
common stock of PurchasePro.com, (ii) each of PurchasePro.com's directors and
nominees for director, (iii) the Chief Executive Officer and the four other
most highly compensated executive officers, and (iv) our directors and
executive officers as a group.
In computing the number of shares owned by a person and the percentage of
ownership of that person, shares of common stock subject to options held by
that person that are currently exercisable or exercisable within 60 days of
the record date are deemed outstanding, including the following options held
by the following individuals: Mr. Johnson--444,582 shares; Mr. Carton--257,082
shares; Mr. Layne--58,929 shares; Mr. Moskal--100,000 shares; Mr. Chiles--
15,000 shares; Ms. Collins--15,000 shares; Mr. Fuente--165,000 shares; and Mr.
O'Brien--30,000 shares. Options and warrants to purchase 2,597,691 shares are
deemed held by all directors and officers as a group. These shares, however,
are not deemed outstanding for purposes of computing the percentage ownership
of any other person. The table should be read with the understanding that more
than one person may be the beneficial owner or possess certain attributes of
beneficial ownership with respect to the same securities. Therefore, careful
attention should be given to the footnotes set forth below the table. Except
as otherwise indicated and subject to applicable community property laws, each
person has sole investment and voting power with respect to the shares shown.
Ownership information is based upon information furnished, or filed with the
Securities and Exchange Commission by the respective individuals or entities,
as the case may be.
<TABLE>
<CAPTION>
Beneficial Ownership
---------------------
Name of Beneficial Owner Number Percentage
------------------------ ---------- ----------
<S> <C> <C>
Executive Officers and Directors
Charles E. Johnson, Jr. ................................ 7,192,249 21.8%
Christopher P. Carton................................... 1,370,000 4.2%
Robert G. Layne......................................... 300,000 *
Scott H. Miller......................................... 37,500 *
Richard T. Moskal....................................... 112,500 *
John G. Chiles(1)....................................... 235,236 *
Martha L. Collins....................................... 15,000 *
David I. Fuente(2)...................................... 1,387,223 4.2%
Michael D. O'Brien(3)................................... 30,000 *
All directors and executive officers as a group (14)
persons................................................ 11,003,869 33.4%
</TABLE>
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* Less than 1%.
(1) Includes 13,451 shares held by Jefferies & Company, Inc., 168,211 shares
of common stock held by the John G. and Cynthia M. Chiles Revocable Trust,
38,574 shares held by Mr. Chiles' minor children, and options to purchase
15,000 shares of common stock. Does not include 310,150 shares of common
stock and options to purchase 3,750 shares of common stock held by persons
associated with Jefferies & Company, Inc. Mr. Chiles is a Managing
Director of Jefferies & Company, Inc. Mr. Chiles disclaims beneficial
ownership of the 13,451 shares held by Jefferies & Company, Inc. and the
313,900 shares and options held by persons associated with Jefferies &
Company, Inc.
(2) Includes options to purchase 165,000 shares of common stock issued to Mr.
Fuente, warrants to purchase 472,223 shares of common stock and 750,000
shares of common stock owned by Office Depot, Inc., of which Mr. Fuente is
the Chairman and Chief Executive Officer. Office Depot, Inc. disclaims
beneficial ownership of the options to purchase shares of common stock
held by Mr. Fuente. Office Depot, Inc. has a strategic e-business
relationship and marketing agreement with us. Mr. Fuente disclaims
beneficial ownership of the shares of common stock and warrants to
purchase shares of common stock held by Office Depot, Inc.
(3) Does not include 757,901 shares of common stock held by Cincinnati Bell,
Inc., the parent of ZoomTown.com. Mr. O'Brien disclaims beneficial
ownership of shares held by Cincinnati Bell, Inc.
3
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Compensation
The following table summarizes all compensation earned by or paid to
PurchasePro.com's Chief Executive Officer and to each of PurchasePro.com's
four other most highly compensated executive officers whose total annual
salary and bonus exceeded $100,000 for services rendered in all capacities to
PurchasePro.com during the fiscal year ended December 31, 1999.
Summary Compensation Table for the 1999 Fiscal Year (1)
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
----------------------------- ------------
Other Securities
Name and Principal Annual Underlying All Other
Position Salary Bonus Compensation Options (#) Compensation
------------------ -------- ------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Charles E. Johnson,
Jr.(2)................. $240,000 -- $24,000 487,500 --
Chairman and Chief
Executive Officer
Christopher P.
Carton(3).............. $179,000 -- $25,300 300,000 --
President, Chief
Operating Officer and
Secretary
Robert G. Layne(4)...... $105,875 -- -- 150,000 $ 9,000
Executive Vice
President
Scott H. Miller......... $118,125 $25,000 -- 67,500 --
Senior Vice President--
Finance and
Administration, Chief
Accounting Officer and
Treasurer
Richard T. Moskal(5).... $150,410 $25,000 -- 112,500 $16,000
Vice President--
Hospitality Purchasing
Systems
</TABLE>
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(1) Other than the salary, bonus and other compensation described herein,
PurchasePro.com did not pay any executive officer named in the Summary
Compensation Table other than Messrs. Johnson and Carton any fringe
benefits, perquisites or other compensation in excess of the lesser of
$50,000 or 10% of such executive officer's salary and bonus during fiscal
1999.
(2) In July 1999, we entered into a new employment agreement with Mr. Johnson
that provides for an annual salary of $240,000 as of May 1999. In May
1999, Mr. Johnson was granted options to acquire 487,500 shares of common
stock at $2.33 per share. The Compensation Committee accelerated the
vesting of these options to vest in full upon completion of the Company's
initial public offering in September 1999. We paid $16,000 and $8,000 for
Mr. Johnson's automobile and life insurance, respectively, in 1999.
(3) In July 1999, we entered into a new employment agreement with Mr. Carton
that provides for an annual salary of $200,000 as of May 1999. In May
1999, Mr. Carton was granted options to acquire 300,000 shares of common
stock at $2.33 per share. Our Compensation Committee accelerated the
vesting of these options to vest in full upon completion of the Company's
initial public offering in September 1999. We paid $17,300 and $8,000 for
Mr. Carton's automobile and life insurance, respectively, in 1999.
(4) In July 1999, we entered into an employment agreement with Mr. Layne that
provides for an annual salary of $120,000 and options to purchase 112,500
shares of common stock as of May 1999 at $2.33 per share. Mr. Layne's
salary was increased to $175,000 per year in September 1999. In October
1999, Mr. Layne was granted options to purchase 75,000 shares of common
stock at $21.48 per share. In January 1998, Mr. Johnson granted to Mr.
Layne options to purchase 187,500 shares of Mr. Johnson's common stock at
$0.33 per share. Mr. Layne exercised his option to acquire 187,500 shares
from Mr. Johnson in June 1999. Mr. Layne received $9,000 in automobile
allowance payments in 1999.
4
<PAGE>
(5) Mr. Moskal joined PurchasePro.com's subsidiary, Hospitality Purchasing
Systems, in January 1999, and entered into an employment agreement that
provides for an annual salary of $160,000. In August 1999 Mr. Moskal was
granted options to purchase 112,500 shares of common stock at $7.20 per
share. During the 1999 fiscal year, Mr. Moskal received $10,000 in housing
allowance payments and $6,000 in automobile allowance payments.
5
<PAGE>
Director Compensation
We reimburse each member of our Board of Directors for out-of-pocket
expenses incurred in connection with attending Board meetings. Each non-
employee member of our Board currently receives $10,000 cash compensation per
year for their service as a member of the Board of Directors. Under our 1999
Stock Plan, non-employee directors also receive options to purchase 15,000
shares of common stock annually.
Option Grants in Last Fiscal Year
The following table sets forth information regarding options granted to our
executive officers listed in the Summary Compensation Table during the fiscal
year ended December 31, 1999.
<TABLE>
<CAPTION>
Potential Realizable Value at
Number of Percent of Assumed Annual Rates of
Securities Total Options Stock Price Appreciation
Underlying Granted to for Option Term(3)
Options Employees in Exercise Expiration ------------------------------
Name Granted Fiscal Year(1) Price(2) Date 5% 10%
---- ---------- -------------- -------- ---------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Charles E. Johnson,
Jr..................... 487,500 11.3% $ 2.33 May 2009 $ 1,852,868 $ 2,950,382
Chairman and Chief
Executive Officer
Christopher P. Carton... 300,000 7.0% 2.33 May 2009 1,140,226 1,815,620
President, Chief
Operating
Officer and Secretary
Robert G. Layne......... 150,000 3.5% 11.91 Oct. 2009 2,910,000 4,633,721
Executive Vice
President
Scott H. Miller......... 67,500 1.6% 8.72 Oct. 2009 958,767 1,526,677
Senior Vice President--
Finance
and Administration,
Chief
Accounting Officer and
Treasurer
Richard T. Moskal....... 112,500 2.6% 7.20 Aug. 2009 1,466,005 2,334,368
Vice President--
Hospitality
Purchasing Systems
</TABLE>
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(1) Based on options to purchase an aggregate of 4,316,495 shares of common
stock granted during fiscal 1999. Under the terms of PurchasePro.com's
1998 Stock Option and Incentive Plan and 1999 Stock Plan, the committee
designated by the Board of Directors to administer each stock option plan
retains the discretion, subject to certain limitations within each plan,
to modify, extend or renew outstanding options and to reprice outstanding
options. Options may be repriced by canceling outstanding options and
reissuing new options with an exercise price equal to the fair market
value on the date of reissue, which may be lower than the original
exercise price of such cancelled options.
(2) The exercise price on the date of grant was equal to 100% of the fair
market value on the date of grant as determined by the Board of
Directors.
(3) The 5% and 10% assumed rates of appreciation are mandated by the rules of
the Securities and Exchange Commission and do not represent
PurchasePro.com's estimate or projection of the future common stock
price. There can be no assurance that any of the values reflected in the
table will be achieved.
6
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Value Options at Fiscal In-the-Money Options
Acquired Realized Year-End at Fiscal Year-End(1)
Name on Exercise ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Charles E. Johnson, Jr.. -- -- 487,500/-- $67,031,250/$0
Chairman and Chief
Executive Officer
Christopher P. Carton...
. -- -- 300,000/-- $41,250,000/$0
President, Chief
Operating Officer and
Secretary
Robert G. Layne....... . -- -- 187,500/-- $25,781,250/$0
Executive Vice
President
Scott H. Miller....... . -- -- 15,000/82,500 $2,062,500/$11,343,750
Senior Vice President--
Finance and
Administration, Chief
Accounting Officer and
Treasurer
Richard T. Moskal..... . -- -- --/112,500 $0/$15,468,750
Vice President--
Hospitality
Purchasing Systems
</TABLE>
--------
(1) Assumes a per share fair market value equal to $137.50, the last reported
sale price of our common stock in the Nasdaq National Market on December
31, 1999.
7
<PAGE>
Employment Agreements and Change in Control Agreements
We have entered into the following employment agreements with our executive
officers listed in the Summary Compensation Table:
<TABLE>
<CAPTION>
Officer Term Salary Position
------- ---- -------- --------
<S> <C> <C> <C>
Charles E. Johnson,
Jr. ................... May 1999-May 2001 $240,000 Chairman and Chief Executive Officer
Christopher P. Carton... May 1999-May 2001 $200,000 President, Chief Operating Officer
and Secretary
Robert G. Layne......... May 1999-May 2001 $175,000 Executive Vice President
Richard T. Moskal....... August 1999-August 2001 $160,000 Senior Vice President--
Purchasing Systems
</TABLE>
Mr. Johnson's and Mr. Carton's agreements provide that in addition to base
salary, each is eligible for a discretionary bonus in an amount determined by
the Board of Directors. The Company also agreed to pay the cost of whole life
insurance coverage and provide other benefits available to the Company's
executives or salaried employees generally. We may terminate either for cause
at any time. If we terminate them without cause or because of their disability
or death, or if they terminate their employment because we breach the
agreements, change their title or duties or relocate their employment outside
of Las Vegas, we must pay, in the case of Mr. Johnson, three times his annual
base salary plus the greater of his last paid bonus or one half of his annual
base salary, and; in the case of Mr. Carton, twice his annual base salary plus
the greater of his last paid bonus or one half of his annual base salary. The
agreements contain nonsolicitation and noncompetition provisions that are
intended to survive the termination of their employment for one year.
Under Mr. Layne's agreement, in addition to an initial base salary of
$120,000, he is entitled to a discretionary bonus as determined by
PurchasePro.com. He is entitled to participate in benefit programs available
to executives and salaried employees generally. He also receives a monthly
automobile allowance. Mr. Layne's employment can be terminated on the same
basis described above for Mr. Carton. The agreement contains noncompetition
and nonsolicitation provisions that are intended to survive the termination of
Mr. Layne's employment for one year.
Mr. Moskal's agreement provides that in addition to a base salary of
$160,000, he would receive a signing bonuse of $25,000. Under the agreement,
Mr. Moskal received stock options pursuant to our 1998 Stock Option and
Incentive Plan to purchase in the aggregate 112,500 shares of common stock at
an exercise price of $7.20 per share, of which 75,000 shares vested on
February 29, 2000. Options to purchase 18,750 shares vest on August 31, 2000
and the remaining shares vest on August 31, 2001. The Company also agreed to
pay him a monthly expense allowance of $450 and to cover up to $1,000 per
month in living expenses until Mr. Moskal's family moves to Las Vegas. We may
terminate him for cause at any time and if he is terminated other than for
cause he will be paid unpaid salary plus an amount equal to one year base
salary. The agreement contains noncompetition provisions that are intended to
survive the termination of Mr. Moskal's employment for one year.
8
<PAGE>
COMPENSATION COMMITTEE REPORT
Report Of The Compensation Committee On Executive Compensation
In 1999, the Compensation Committee (the "Committee") of PurchasePro.com's
Board of Directors consisted of Messrs. Chiles, Fuente and Mr. J. Terrance
Lanni, a member of the Board of Directors who resigned effective May 31, 2000,
none of whom was an employee or former employee of PurchasePro.com or its
subsidiary during the year; however, Mr. Chiles is a Managing Director at
Jefferies & Company, Inc., which acted as one of the Company's underwriters in
its public offerings in February, 2000 and September, 1999. The Committee has
overall responsibility for PurchasePro.com's executive compensation policies
and practices. The Committee's functions include:
. evaluating management's performance,
. determining the compensation of the Chief Executive Officer,
. reviewing and approving all executive officers' compensation, including
salary and bonuses, and
. establishing and administering compensation plans including granting
awards under the Company's stock option plans to its employees.
The Committee has provided the following report on the compensation policies
of PurchasePro.com as they apply to the executive officers including the Chief
Executive Officer and the relationship of PurchasePro.com performance to
executive compensation.
Overview Of Compensation Policies
The Company's compensation policies are designed to address a number of
objectives, including rewarding performance and motivating executive officers
to achieve significant returns for stockholders. To promote these policies,
the Committee implemented a compensation program that is comprised of the
following principal elements:
. base salary;
. cash incentives (such as discretionary bonuses);
. equity incentives (such as stock awards); and
. benefits.
When establishing salaries, bonus levels and stock-based awards for each of
the executive officers, the Committee considers the recommendations of the
Chief Executive Officer, the officer's role, responsibilities and performance
during the past year, and the amount of compensation paid to executive
officers in similar positions of comparable companies. To assist in this
process, the Committee reviews the compensation paid to officers at such
comparable companies. The Committee generally sets the compensation of the
officers at levels that are believed to be similar to amounts paid by the
Company's competitors. When setting the compensation of each of the executive
officers, the Committee considers all of the factors set forth above, but does
not assign any specific weighting or apply any formula to these factors. The
Committee does, however, give significant consideration to the recommendations
of the Chief Executive Officer.
The Importance Of Ownership
A fundamental tenet of PurchasePro.com's compensation policy is that
significant equity participation creates a vital long-term partnership between
management and other stockholders. Through its employee stock plans and
agreements, the benefits of equity ownership are extended to executive
officers and employees of PurchasePro.com and its subsidiary. As of June 2,
2000, the directors and executive officers of PurchasePro.com beneficially
owned an aggregate of 11,003,869 shares and had the right to acquire an
aggregate of 2,557,691 additional shares upon the exercise of employee stock
options. Of the options exercised through June 2, 2000, approximately 0% of
the shares are subject to repurchase by PurchasePro.com in the event of a
termination.
9
<PAGE>
Fiscal 1999 Executive Officer Compensation Program
The components of the executive compensation program are described below:
BASE SALARY--PurchasePro.com believes that base salary is frequently a
significant factor in attracting, motivating and retaining skilled executive
officers. Accordingly, the Committee reviews base salaries of executive
officers annually and generally sets the base salary of its executive officers
at or near the average of the levels paid by companies engaged in the e-
commerce industry. In addition, the Committee evaluates the specific job
functions and past performance of individual officers.
BONUS PROGRAM--PurchasePro.com does not maintain a formal cash incentive
bonus program to reward executive officers for attaining defined performance
goals. However, discretionary bonuses are based primarily on individual
performance and are paid annually.
STOCK OPTION GRANTS--In 1999, the Committee granted an aggregate of
1,135,468 stock options under the 1998 Incentive Stock Option and Incentive
Plan and the 1999 Stock Plan to PurchasePro.com's executive officers. The
Committee determined the number of options granted to executive officers
primarily by evaluating each officer's:
. respective job responsibilities;
. past performance;
. expected future contributions;
. existing stock and unvested option holdings;
. potential reward to the executive officer if the stock price appreciates
in the public market; and
. management tier classification.
Option grants may also be made to new executive officers upon commencement
of employment and, on occasion, to executive officers in connection with a
significant change in job responsibility. The Committee believes that these
stock option grants will more closely align the long-term interests of senior
management with those of stockholders and assist in the retention of key
executives.
BENEFITS--In 1999, the Company offered benefits to its executive officers
that were substantially the same as those offered to all of PurchasePro.com's
regular employees.
In October 1999, PurchasePro.com established a tax-qualified deferred
compensation plan, known as the PurchasePro.com, Inc. 401(k) Plan, covering
all of PurchasePro.com's eligible full-time employees. Under the 401(k) Plan,
participants may elect to contribute, through salary contributions, up to 15%
of their annual compensation, subject to a statutory maximum. PurchasePro.com
does not currently provide additional matching contributions under the 401(k)
Plan, but may do so in the future. The 401(k) Plan is designed to qualify
under Section 401 of the Internal Revenue Code of 1986, as amended, so that
contributions by employees or by PurchasePro.com to the 401(k) Plan, and
income earned on plan contributions, are not taxable to employees until
withdrawn from the plan, and so that contributions by PurchasePro.com, if any,
will be deductible by PurchasePro.com when made.
CHIEF EXECUTIVE OFFICER'S COMPENSATION--In 1999, Charles Johnson, Jr. served
as the Company's Chief Executive Officer and Chairman of the Board of
Directors.
In 1999, Mr. Johnson's salary was $240,000 and he was granted options to
purchase 487,500 shares of the Company's common stock. In determining Mr.
Johnson's salary and stock grants, the Committee considered the
10
<PAGE>
same criteria it considered with respect to the other executive officers. The
committee noted that in 1999, under Mr. Johnson's leadership, the Company:
. successfully completed the initial public offering of its common stock,
. established strategic relationships with a number of key companies,
including Office Depot, Inc. and Sprint Communications, LP, and
. increased revenues from $1.6 million in 1998 to $6.0 million in 1999.
Tax Law Limits On Executive Compensation And Policy On Deductibility Of
Compensation
Section 162(m) of the Internal Revenue Code of 1986, provides that a company
may not take a tax deduction for that portion of the annual compensation paid
to an executive officer in excess of $1 million, unless certain exemption
requirements are met. The 1999 Stock Plan was designed to meet the exemption
requirements of Section 162(m). The Committee has determined at this time not
to seek to qualify PurchasePro.com's remaining executive officer compensation
programs under Section 162(m). None of the compensation paid to the Company's
executive officers in 1999 was subject to Section 162(m).
Conclusion
All aspects of PurchasePro.com's executive compensation are subject to
change at the discretion of the Committee. The Committee will monitor
PurchasePro.com's executive compensation on an ongoing basis to ensure that it
continues to support a performance-oriented environment and remains properly
integrated with PurchasePro.com's annual and long-term strategic objectives.
Current Members of the Compensation Committee
John G. Chiles
David I. Fuente
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PROPOSAL 1
PROPOSAL TO ELECT TWO CLASS I DIRECTORS
We have three classes of directors serving staggered three-year terms. Class
I and Class II each consist of two directors and Class III consists of three
directors. Two Class I directors are to be elected at the Annual Meeting for a
term of three years expiring at the Annual Meeting in 2003 or until each such
director's successor shall have been elected and qualified. Under
PurchasePro.com's Articles of Incorporation, holders of Common Stock are
entitled to as many votes as equal the number of their shares of Common Stock
multiplied by the number of directors to be elected, and they may cast all of
their votes for a single nominee or may distribute the votes among the
nominees to be voted for, any two or more of them, as they see fit. However,
because the Class I directors are the only nominees before the stockholders,
at the Annual Meeting, holders of Common Stock will vote for the nominees
based on one vote per share per nominee. The other directors of the Company
will continue in office for their existing terms, which expire in 2001 and
2002 for Class II and Class III directors, respectively. Shares represented by
the enclosed proxy cannot be voted for a greater number of persons than the
number of nominees named.
As of May 31, 2000 one of PurchasePro.com's Class I directors resigned and
one of its Class III directors resigned. At a Board of Directors meeting held
on May 31, 2000 the Board appointed Martha Layne Collins to fill one (1)
vacancy on the Board and designated her as a Class I director. The Board also
nominated Mr. Fuente and Ms. Collins as its nominees to stand for election as
Class I directors at this year's Annual Meeting. Currently one Class III
director's seat remains vacant.
UNLESS AUTHORITY TO VOTE FOR DIRECTORS IS WITHHELD, IT IS INTENDED THAT THE
SHARES REPRESENTED BY THE ENCLOSED PROXY WILL BE VOTED FOR THE ELECTION OF
MS. COLLINS AND MR. FUENTE AS CLASS I DIRECTORS.
Set forth below is information regarding the nominees for Class I director
and the continuing directors of Class II and Class III, including information
furnished by them as to their age, principal occupations at present and for
the past five years, certain directorships held by each and the year in which
each became a director of the Company.
Class I--Nominees for Terms Expiring in 2003
Martha Layne Collins has been a member of the Board of Directors of
PurchasePro.com since her appointment on May 31, 2000. She is Executive
Scholar in Residence at Georgetown College, a position she assumed in August
1998, after having been Director, International Business and Management
Center, at the University of Kentucky since July 1996. From 1988 to 1997, she
was President of Martha Layne Collins and Associates, a consulting firm, and
from July 1990 to July 1996, she was President of St. Catharine College in
Springfield, Kentucky. She was elected to a four-year term as Governor of the
Commonwealth of Kentucky in 1983 after having served as Lieutenant Governor
from 1979 to 1983. Governor Collins, who has served as a Fellow at the
Institute of Politics, Harvard University, is a director of R.R. Donnelley &
Sons Company, Bank of Louisville, Eastman Kodak and Mid-America Bancorp.
Governor Collins received a B.S. degree from the University of Kentucky and is
63 years old.
David I. Fuente has served as a member of the Board of Directors of
PurchasePro.com since June 1999. Mr. Fuente has been the Chairman of the Board
and Chief Executive Officer of Office Depot, Inc. since December 1987. Mr.
Fuente is also a director of Vista Eye Care, Inc. and Ryder System, Inc. Mr.
Fuente is 54 years old.
Class II--Directors Whose Terms Expire in 2001
John G. Chiles has served as a member of the Board of Directors of
PurchasePro.com since June 1998. Mr. Chiles has served as a Managing Director
in the Corporate Finance Department at Jefferies & Company, Inc. since 1993.
For the fifteen years prior to joining Jefferies & Company, Mr. Chiles held
various positions at Dean Witter Reynolds, including Managing Director and Co-
Manager of its Consumer Businesses Group. Mr. Chiles is 48 years old.
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Michael D. O'Brien has served as a member of the Board of Directors of
PurchasePro.com since June 1999. Mr. O'Brien has served as the President of
ZoomTown.com, a subsidiary of Cincinnati Bell, Inc. since January 1998. From
January 1992 through December 1997, Mr. O'Brien served as President of Europe
Chiquita Brands, Inc. Mr. O'Brien is 43 years old.
Class III--Directors Whose Terms Expire in 2002
Christopher P. Carton joined PurchasePro.com as President, Chief Operating
Officer and Secretary in November 1996 and was elected to the Board of
Directors of PurchasePro.com in April 1999. Prior to joining PurchasePro.com,
Mr. Carton was Chief Operating Officer of Wilmington County Country Club in
Wilmington, Delaware, from August 1995 to January 1996. From 1987 to August
1995, Mr. Carton was Chief Operating Officer of the Idle Hour Country Club in
Lexington, Kentucky. In addition, Mr. Carton has held the position of Chief
Operating Officer at both West Lake Country Club and Augusta Country Club in
Augusta, Georgia. Mr. Carton is 41 years old.
Charles E. Johnson, Jr. has served as Chairman and Chief Executive Officer
of PurchasePro.com since its inception in 1996. In 1996, Mr. Johnson founded
and was the chief executive officer of Cart-it & Cabinetry LLC, a company that
manufactured casino carts and cabinetry. From 1984 to August 1996, Mr. Johnson
was the owner and President of Johnson Safety and Security, a family owned
security business located in Lexington, Kentucky. Mr. Johnson is 39 years old.
The Board of Directors held 9 meetings during 1999. All directors then in
office attended at least 75% of the aggregate number of meetings of the Board
and of the Committees on which such directors serve during the periods of
their respective Board and Committee memberships.
The Board of Directors has appointed a Compensation Committee and an Audit
Committee. The current members of the Compensation Committee are John G.
Chiles and David I. Fuente. The Compensation Committee held one meeting during
1999. The Compensation Committee's functions are to determine and supervise
compensation to be paid to officers and directors of PurchasePro.com, and
reviewing and approving employee benefit plans, including stock option and
insurance plans. See "Compensation Committee Report".
The current members of the Audit Committee are John G. Chiles and Michael D.
O'Brien. The Audit Committee held one meeting during 1999. The Audit
Committee's functions are to monitor the effectiveness of the audit effort, to
supervise our financial and accounting organization and financial reporting
and to select a firm of certified public accountants whose duty it is to audit
the books and accounts of PurchasePro.com for the fiscal year for which they
are appointed.
PurchasePro.com does not have a standing nominating committee. The Board of
Directors of PurchasePro.com performs the functions of such committee.
Nominations by stockholders can be made only by complying with the Company's
Bylaws and the notice provisions discussed below.
The Company's Bylaws provide that nominations for a director may be made by
stockholders provided that certain informational requirements concerning the
identities of the nominating stockholder and the nominee are complied with in
advance of the meeting. Specifically, the Bylaws provide that nominations for
directors, other than those made by or on behalf of existing management, must
be made in writing and mailed or delivered to the Secretary of the Company no
less than one hundred twenty (120) calendar days before the date of the
Company's proxy statement released to stockholders in connection with the
year's Annual Meeting. Such stockholder's notice to the Secretary of the
Company must include the following information: (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director, (i)
the name, age, business address, and residence address of the person, (ii) the
principal occupation or employment of the person, (iii) the class and number
of shares of capital stock of the Company which are beneficially owned by the
person, (iv) a statement as to the person's citizenship, and (v) any other
information relating to the person that is required
13
<PAGE>
to be disclosed in solicitations for proxies for election of directors
pursuant to section 14 of the Securities Exchange Act of 1934, as amended and
the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice, (i) the name and record address of the
stockholder and (ii) the class, series and number of shares of capital stock
of the Company which are beneficially owned by the stockholder. The Bylaws
provide that no person nominated by a stockholder shall be eligible for
election as a director of the Company unless nominated in accordance with the
foregoing procedure.
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PROPOSAL 2
PROPOSAL TO AMEND OUR AMENDED AND RESTATED ARTICLES OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK BY 150,000,000 SHARES
Our Board of Directors has approved the amendment of our Amended and
Restated Articles of Incorporation (the "Articles of Incorporation") to
increase the number of authorized shares of common stock from 40,000,000 to
190,000,000. Our Board of Directors recommends that our stockholders approve
this amendment.
As of June 2, 2000, we had 32,935,226 shares of common stock outstanding. We
originally reserved an additional 6,750,000 shares for future issuance under
our stock plans.
As of June 2, 2000, warrants to purchase a total of 5,555,781 shares of
common stock were outstanding, of which Office Depot holds a warrant to
purchase 472,223 shares of common stock, Advanstar holds a warrant to purchase
383,558 shares of common stock, Sprint holds a warrant to purchase 2,700,000
shares of common stock and America Online, Inc. holds a warrant to purchase
2,000,000 shares of common stock. Additionally, there were outstanding an
aggregate of 5,636,726 stock options as of the same date.
The number of authorized shares available is not sufficient for the future
issuance of the aggregate common stock issuable under the outstanding warrants
and stock options issued to date. We intend to reserve the shares of common
stock required for future issuance under such warrants and stock options as
soon as this proposal has been approved by the stockholders and the amendment
of the Restated Articles of Incorporation to increase the number of shares of
authorized common stock has been filed with the Secretary of State of Nevada.
In addition to the reasons discussed above, our Board of Directors believes
that the authorized common stock remaining available is not sufficient to
enable the Company to respond to potential business opportunities and to
pursue important objectives that may be anticipated. Accordingly, our Board of
Directors believes that it is in our best interests to increase the number of
authorized shares of common stock by 150,000,000 shares. Our Board of
Directors also believes that the availability of additional shares will
provide us with the flexibility to issue common stock for proper corporate
purposes that may be identified by our Board of Directors from time to time,
such as financings, acquisitions, strategic business relationships or stock
dividends, including stock splits in the form of stock dividends. Further, our
Board of Directors believes the availability of additional shares of common
stock will enable us to attract and retain talented employees through the
grant of stock options and other stock-based incentives. The issuance of
additional shares of common stock may have a dilutive effect on earnings per
share and, for a person who does not purchase additional shares to maintain
his or her pro rata interest, on a stockholder's percentage voting power.
The authorized shares of common stock in excess of those issued will be
available for issuance at such times and for such corporate purposes as our
Board of Directors may deem advisable without further action by our
stockholders, except as may be required by applicable laws or the rules of any
stock exchange or national securities association trading system on which the
securities may be listed or traded. Upon issuance, such shares will have the
same rights as the outstanding shares of common stock. Holders of common stock
do not have preemptive rights. Our Board of Directors does not intend to issue
any common stock except on terms which the Board deems to be in our best
interests and the best interests of our then-existing stockholders.
Our Board of Directors does not recommend this proposed amendment with the
intent to use the ability to issue additional common stock to discourage
tender offers or takeover attempts. However, the availability of authorized
common stock for issuance could render more difficult or discourage a merger,
tender offer, proxy contest or other attempt to obtain control of us. The
proposed amendment is not in response to any effort on the part of any party
to accumulate material amounts of common stock or to acquire control of us by
means of merger, tender offer, proxy contest or otherwise, or to change our
management. In addition, the proposal is not part of any plan by management to
recommend a series of similar amendments to our Board of Directors and our
stockholders.
15
<PAGE>
The text of Article Second of the Amended and Restated Articles of
Incorporation, as it is proposed to be amended pursuant to this proposal, is
as follows:
SECOND
The authorized capital stock of the Corporation shall consist of a total of
one hundred ninety-five million (195,000,000) shares of stock which are
divided into classes and which have such designations, preferences,
limitations and relative rights as follows:
A. One hundred ninety million (190,000,000) shares of common stock with a
par value of $.01 per share, designated as "Common Stock."
B. Five million (5,000,000) shares of preferred stock of $.001 par value,
designated as "Preferred Stock." The Board of Directors is vested with
the authority to authorize by resolution from time to time the issuance
of the Preferred Shares in one or more series, and to prescribe the
number of Preferred Shares within each such series and the voting
powers, designations, preferences, limitations, restrictions and
relative rights of each such series, including preferences and relative
rights that may be superior to the Common Shares.
The affirmative vote of the holders of sixty-six and two-thirds percent (66-
2/3%) of our outstanding common stock is required to approve this proposal. If
approved by the stockholders, the proposed amendment to our Amended and
Restated Articles of Incorporation will become effective upon the filing of a
Certificate of Amendment with the Secretary of State of Nevada, which will
occur as soon as reasonably practicable.
The Board of Directors recommends a vote FOR Proposal 2.
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<PAGE>
PROPOSAL 3
APPROVAL OF THE AMENDMENT OF THE
PURCHASEPRO.COM, INC. 1999 STOCK PLAN
1999 STOCK OPTION PLAN
Our 1999 Stock Plan was adopted by our Board of Directors on June 2, 1999.
The 1999 Stock Plan provides selected employees, directors, independent
contractors and advisers an opportunity to acquire a proprietary interest in
the success of PurchasePro.com or to increase their interest. The 1999 Stock
Plan is administered by the Compensation Committee of the Board of Directors.
However, the Chief Executive Officer may grant options up to 37,500 shares in
each instance under the 1999 Stock Plan to employees. Under the terms of the
original 1999 Stock Plan, 2,250,000 shares had been authorized for issuance.
On February 15, 2000, our Board of Directors amended the plan (as amended the
"1999 Stock Plan") to reserve an additional 1,500,000 shares for issuance,
subject to the approval of our stockholders. Subsequently, on May 31, 1999,
our Compensation Committee augmented this amount to reserve an additional
3,000,000 shares for issuance under the 1999 Stock Plan (for a total of
4,500,000), subject to the approval of our stockholders at the Annual Meeting.
The 1999 Stock Plan provides for the grant of incentive stock options and
nonqualified stock options. However, eligibility for the grant of incentive
stock options is limited to common law employees. Options need not have
identical terms with respect to each optionee. Options shall have such terms
and be exercisable in such manner and at such times as the Compensation
Committee may determine. Each option must expire within 10 years from the
grant date. In no event will the exercise price for incentive stock options be
less than 100% of the fair market value of the stock on the date of grant. The
exercise price of incentive stock options granted an employee who owns 10% or
more of the total combined voting power of all classes of outstanding stock of
PurchasePro.com or any subsidiary of PurchasePro.com must equal at least 110%
of the fair market value of the common stock on the date of grant and the term
of such an incentive stock option may not be greater than five years.
The 1999 Stock Plan defines "fair market value" as:
. the closing price of a share on the principal exchange on which the
shares are trading,
. if the shares are not traded on an exchange but are traded on the Nasdaq
National Market or a successor quotation system, the closing price, or
. if the shares are not traded on an exchange or the Nasdaq National
Market or a successor quotation system, the fair market value of a
share, as determined by the Compensation Committee in good faith.
Upon exercise of an option, payment of the exercise price shall be made in
lawful money of the United States. If an option agreement so provides, payment
may be made by delivery of shares owned by the optionee or his representative
for at least 12 months or via an irrevocable direction to a securities broker
to sell shares and to deliver all or part of the sale proceeds to
PurchasePro.com. Each option shall be transferable only by will or the law of
descent and distribution and shall only be exercisable by the optionee during
his or her lifetime.
No person shall be granted options to purchase more than 750,000 shares of
common stock in any calendar year.
The terms of each award or sale of shares are determined by the Compensation
Committee. Such awards or sales may be subject to forfeiture, rights of
repurchase, rights of first refusal or other transfer restrictions, and may
not be transferred. The purchase price of any share may be paid in lawful
money of the United States or services previously rendered.
17
<PAGE>
The 1999 Stock Plan shall remain in effect until June 1, 2009 or, if
earlier, until terminated by the Board of Directors. Any amendment of the 1999
Stock Plan shall be subject to the approval of the stockholders of
PurchasePro.com only to the extent required by applicable laws, regulations or
rules. Rights and obligations under any option may not be materially altered
or impaired without the optionee's consent.
Purpose
The purpose of our 1999 Stock Plan is to promote our interests and the
interests of our stockholders by encouraging key individuals to acquire stock
or to increase their proprietary interest in the Company. By providing the
opportunity to acquire stock or receive other incentives, the Company seeks to
attract and retain those key employees upon whose judgment, initiative and
leadership the success of the Company largely depends. Our Board of Directors
believes that the 1999 Stock Plan constitutes an important means of
compensating key employees.
Outstanding Grants
As of June 2, 2000, options to purchase an aggregate of 3,129,925 shares of
PurchasePro.com stock had been issued under the 1999 Stock Plan. Of all
options granted, 131,250 had been exercised, and 50,000 shares of
PurchasePro.com common stock had been issued for direct sale under the 1999
Stock Plan. Options to purchase an aggregate of 2,652,525 shares of
PurchasePro.com common stock at a weighted average exercise price of $65.935
per share remained outstanding as of June 2, 2000. The closing price of our
Common Stock on the Nasdaq National Market was $25.6875 per share on that
date.
As of June 2, 2000, there were no shares of PurchasePro.com common stock
available for future awards under the 1999 Stock Plan. Total awards under the
plan as of that date exceeded the amount reserved under the terms of the
original plan by 546,950. Of this amount, 396,950 shares have been allocated
to non-executive officers and 150,000 to executive officers of
PurchasePro.com. Absent our stockholder's approval of an increase to the
number of shares reserved for issuance under the 1999 Stock Plan, the grants
in excess of the number of shares originally reserved under the plan will be
nullified. If this proposal is adopted, the number of additional shares
available for future grants will be 3,953,050 of the 4,500,000 share increase
we are asking you to approve.
As of June 2, 2000, approximately 440 employees and 6 directors were
eligible to participate in the 1999 Stock Plan. No consultants or advisors
were eligible to participate as of that date.
Administration
The 1999 Stock Plan is administered by the Compensation Committee (the
"Compensation Committee"), composed of directors who are non-employee
directors under Rule 16b-3 of the Exchange Act ("Rule 16b-3"). In the case of
grants to persons who are not also insiders for purposes of Section 16 of the
Exchange Act, the 1999 Stock Plan may be administered by officers who are not
directors. Our Board may fill vacancies from time to time to remove or add
members.
The Compensation Committee selects those employees of PurchasePro.com or its
subsidiaries who will be eligible to receive awards under the 1999 Stock Plan.
The 1999 Stock Plan provides that the Compensation Committee may grant to
eligible individuals nonqualified stock options or incentive stock options.
Each grant will be memorialized in a separate agreement with the person
receiving the grant. This agreement will indicate the type and terms of the
award.
The affirmative vote of a majority of the shares present or represented at
the Annual Meeting will be required to approve the proposal.
The Board of Directors recommends a vote FOR Proposal 3.
18
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph illustrates a comparison of the cumulative total
stockholder return (change in stock price plus reinvested dividends) of
PurchasePro.com's common stock with the Nasdaq Composite Index (U.S. and
Foreign), and the Dow Jones Internet Index. The graph assumes that $100 was
invested in PurchasePro.com's common stock (at a split-adjusted initial public
offering price of $18.00 per share), securities comprising the Nasdaq
Composite Index and the securities comprising the Dow Jones Internet Index.
The comparisons in the graph are required by the Securities and Exchange
Commission and are not intended to forecast or be indicative of possible
future performance of our common stock.
<TABLE>
<CAPTION>
9/14/99 9/30/99 10/29/99 11/30/99 12/31/99 1/31/00 2/29/00 3/31/00 4/30/00 5/31/00
------- ------- -------- -------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PurchasePro.com, Inc.... 100.00 128.70 151.39 537.04 763.89 460.42 677.43 402.78 172.24 122.06
Nasdaq Composite........ 100.00 95.67 103.57 116.94 143.15 138.58 165.36 160.53 134.59 118.56
Dow Jones Internet
Index.................. 100.00 104.95 111.11 136.62 179.46 168.79 199.47 171.76 171.70 138.77
</TABLE>
STOCKHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
Under certain circumstances, if a stockholder wishes to have a stockholder
proposal included in our 2001 proxy statement for our Annual Meeting, the
stockholder must have given timely notice of the proposal in writing to the
Secretary of PurchasePro.com, Inc. To be timely, a stockholder's notice of the
proposal must be delivered to or mailed and received at the executive offices
of PurchasePro.com, Inc., 3291 North Buffalo Drive, Las Vegas, NV 89129, prior
to December 15, 2000. Any proposal received by the Company's executive office
after such date will be considered untimely and may be excluded from the proxy
statement and form of proxy.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, our directors, executive
officers and any persons holding more than 10% of our common stock are
required to report their initial ownership of our common stock and any
subsequent changes in that ownership to the Securities and Exchange
Commission. Specific due dates for these reports have been established and we
are required to identify in this proxy statement those persons who failed to
file timely these reports. Based solely upon copies of reports filed with the
Securities and Exchange Commission, PurchasePro.com believes that all such
filing requirements were timely satisfied for the year ended December 31,
1999.
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INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Arthur Andersen LLP, to serve as
independent public accountants for PurchasePro.com for the year ending
December 31, 2000. Arthur Andersen LLP, examined the financial statements of
the Company for the year ended December 31, 1999. It is anticipated that
representatives of Arthur Andersen LLP, will be present at the Meeting and
will have an opportunity to make a statement if they desire to do so, and will
be available to respond to appropriate questions.
ANNUAL REPORT ON FORM 10-K
A copy of the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1999 will be provided without charge to any stockholder upon
request. Requests should be directed to Scott H. Miller, Treasurer,
PurchasePro.com, Inc., 3291 North Buffalo Drive, Las Vegas, NV 89129.
OTHER MATTERS
We know of no other business that will be presented at the Annual Meeting.
If any other business is properly brought before the Annual Meeting, it is
intended that proxies in the enclosed form will be voted in accordance with
the judgment of the persons voting the proxies.
Whether you intend to be present at the Annual Meeting or not, we urge you
to return your signed proxy promptly.
By order of the Board of Directors.
/s/ Christopher P. Carton
Christopher P. Carton
President, Chief Operating Officer
and Secretary
June 12, 2000
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<PAGE>
PURCHASEPRO.COM, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - JULY 21, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PURCHASEPRO.COM, INC.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting
and Proxy Statement of PurchasePro.com, Inc., a Nevada corporation, each dated
June 12, 2000, and hereby authorizes Christopher P. Carton and Michael D.
O'Brien, each with full power of substitution, as attorney and proxy of the
undersigned to attend the Annual Meeting of Stockholders of PURCHASEPRO.COM,
INC. on July 21, 2000, at 10:00 a.m., or at any adjournments or postponements
and to vote the number of shares the undersigned would be entitled to vote if
personally present on the following items:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER SPECIFIED BY THE
UNDERSIGNED SHAREHOLDER. IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED
"FOR" ALL NOMINEES FOR ELECTION AS DIRECTORS, "FOR" PROPOSAL 2, "FOR" PROPOSAL
3, AND IN ACCORDANCE WITH THE DISCRETION OF THE PROXIES ON ANY OTHER MATTERS TO
COME BEFORE THE ANNUAL MEETING.
(CONTINUED, AND TO BE SIGNED, ON THE OTHER SIDE)
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<PAGE>
Please mark
your votes
as indicated in [X]
this example
FOR all nominees listed below to WITHHOLD AUTHORITY
serve as Class 1 directors for a to vote for all nominees
term of three years (except as marked listed below.
to the contrary below)
[ ] [ ]
Proposal 1: ELECTION OF DIRECTORS
Nominees: Martha Layne Collins and
David I. Fuente
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, write that nominee's name on the space
provided below.
________________________________________________
Proposal 2: APPROVAL OF AMENDMENT to Amended and Restated Articles of
Incorporation to increase the number of authorized shares of Common Stock by
150,000,000 shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
Proposal 3: APPROVAL OF AMENDMENT to the PurchasePro.Com, Inc. 1999 Stock Plan
to reserve an additional 4,500,000 shares for issuance under the Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
OTHER MATTERS. The proxies are authorized to vote in their discretion upon all
such other matters as may properly come before the annual meeting or any
adjournments or postponements thereof.
Signature(s) _________________________________________Dated: _____________, 2000
Please sign exactly as your name or name(s) appear on this proxy. When signing
as attorney, executor, administrator, trustee or guardian, please give full
title as such. If shares are held jointly, each holder should sign.
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FOLD AND DETACH HERE
