<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] 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
</TABLE>
Firstwave Technologies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
FIRSTWAVE TECHNOLOGIES, INC.
SUITE 1000
2859 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
April 2, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Annual Meeting of
Shareholders of Firstwave Technologies, Inc. (the "Company"), which will be
held at 2:00 p.m. on Thursday, May 6, 1999, at the Company's Corporate Offices,
2859 Paces Ferry Road, Suite 1000, Atlanta, GA 30339.
The principal business of the meeting will be to elect directors for
the ensuing year. During the meeting, we will review the results of the past
year and report on significant aspects of our operations for 1999.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the Annual
Meeting, please take the time to complete, sign, date and return the enclosed
proxy card in the postage prepaid envelope provided so that your shares will be
voted at the meeting. If you decide to attend the meeting, you may, of course,
revoke your proxy and personally cast your vote.
Sincerely yours,
Richard T. Brock
President and Chief Executive
Officer
<PAGE> 3
FIRSTWAVE TECHNOLOGIES, INC.
SUITE 1000
2859 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 1999 Annual Meeting of Shareholders of Firstwave Technologies,
Inc. (the "Company") will be held at 2:00 p.m. on Thursday, May 6, 1999, at the
Company's Corporate Offices, 2859 Paces Ferry Road, Suite 1000, Atlanta, GA
30339. The meeting is called for the following purposes:
(1) To elect directors for the ensuing year;
(2) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 23,
1999 as the record date for the purpose of determining the shareholders who are
entitled to notice of and to vote at the meeting and any adjournment or
postponement thereof.
By order of the Board of Directors,
Richard T. Brock
President and Chief Executive Officer
April 2, 1999
Atlanta, Georgia
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES WILL BE
REPRESENTED.
2
<PAGE> 4
FIRSTWAVE TECHNOLOGIES, INC.
SUITE 1000
2859 PACES FERRY ROAD
ATLANTA, GEORGIA 30339
PROXY STATEMENT
This Proxy Statement is furnished by and on behalf of the Board of
Directors of Firstwave Technologies, Inc. (the "Company") in connection with
the solicitation of proxies for use at the Annual Meeting of Shareholders of
the Company to be held at 2:00 p.m. on Thursday, May 6, 1999, at the Company's
Corporate Offices, 2859 Paces Ferry Road, Suite 1000, Atlanta, GA 30339, and at
any adjournments or postponements thereof (the "Annual Meeting"). This Proxy
Statement and the enclosed proxy card will be first mailed on or about April 2,
1999 to the Company's shareholders of record on the Record Date, as defined
below.
THE BOARD OF DIRECTORS URGES YOU TO COMPLETE, SIGN, DATE AND RETURN
THE ENCLOSED PROXY CARD IN THE POSTAGE PREPAID ENVELOPE PROVIDED.
SHARES ENTITLED TO VOTE
Proxies will be voted as specified by the shareholders granting the
proxy. Unless contrary instructions are specified, if the enclosed proxy card
is executed and returned (and not revoked) prior to the Annual Meeting, the
shares of common stock, no par value per share ("Common Stock"), of the Company
represented thereby will be voted FOR the election as directors of the nominees
listed in this Proxy Statement. The submission of a signed proxy will not
affect a shareholder's right to attend and to vote in person at the Annual
Meeting. A shareholder who executes a proxy may revoke it at any time before it
is voted by filing with the Secretary of the Company either a written
revocation or an executed proxy bearing a later date or by attending and voting
in person at the Annual Meeting.
Only holders of record of Common Stock as of the close of business on
March 23, 1999 (the "Record Date") will be entitled to vote at the Annual
Meeting. As of the close of business on the Record Date, there were 5,152,588
shares of Common Stock (the "Shares") outstanding. Holders of Shares authorized
to vote are entitled to cast one vote per Share on all matters. The holders of
a majority of the Shares entitled to be voted must be present or represented by
proxy to constitute a quorum. Shares as to which authority to vote is withheld,
abstentions and broker non-votes are counted in determining whether a quorum
exists.
Under Georgia Law, directors are elected by the affirmative vote, in
person or by proxy, of a plurality of the shares entitled to vote in the
election at a meeting at which a quorum is present. Only votes actually cast
will be counted for the purpose of determining whether a particular nominee
received more votes than the persons, if any, nominated for the same seat on
the Board of Directors. Accordingly, shares with respect to which authority to
vote is withheld will not be included in vote totals and will not be considered
in determining the outcome of the vote.
Any other matters that may properly come before the Annual Meeting
requires the affirmative vote of a majority of the Shares present in person or
by proxy and entitled to vote on such matter. Abstentions will be counted in
determining the minimum number of votes required for approval and will,
therefore, have the effect of negative votes. Broker non-votes will not be
counted as votes for or against approval of either of such proposals or any
other matter properly brought before the Annual Meeting and therefore will not
affect the outcome of any such vote.
3
<PAGE> 5
PROPOSAL 1 - ELECTION OF DIRECTORS
The Board of Directors of the Company presently consists of five
members. The current terms of all existing directors expire upon the election
and qualification of the directors to be selected at this Annual Meeting. The
Board of Directors has nominated Richard T. Brock, John F. Keane, Michael T.
McNeight, James R. Porter, and Roger A. Babb for re-election to the Board of
Directors at the Annual Meeting, each to serve until the 2000 Annual Meeting of
Shareholders and until their successors are duly elected and qualified.
All Shares represented by properly executed proxies received in
response to this solicitation and not revoked before they are exercised will be
voted in the manner specified therein by the shareholders. If no specification
is made, the proxy will be voted FOR the election of the nominees listed in
this Proxy Statement to the Board of Directors. Each nominee has consented to
serve as a director of the Company if elected. If at the time of the Annual
Meeting any nominee is unable or declines to serve as a director, the
discretionary authority provided in the enclosed proxy card will be exercised
to vote for a substitute candidate designated by the Board of Directors. The
Board of Directors has no reason to believe that any of its nominees will be
unable or will decline to serve as a director.
Shareholders may withhold their votes from the entire slate of
nominees by so indicating in the space provided on the enclosed proxy card.
Shareholders may withhold their votes from any particular nominee by writing
that nominee's name in the space provided for that purpose on the enclosed
proxy card.
Set forth below is certain information furnished to the Company by
each nominee.
DIRECTOR NOMINEE BIOGRAPHICAL INFORMATION
RICHARD T. BROCK
Age: 51
Mr. Brock has served on the Board of Directors since the Company's
inception in October 1984, and currently serves as the Company's President and
Chief Executive Officer. He also served as the Company's Chief Executive
Officer from October 1984 until November 1992, and from November 1994 until
December 1996. Mr. Brock is the founder of Brock Capital Partners, a capital
investment firm. He is also a director of Datastream Systems, Inc., a leading
provider of maintenance software. Prior to founding the Company, Mr. Brock
founded and served as Chief Executive Officer of Management Control Systems,
Inc., now a division of Research Institute of America. Mr. Brock received an
MBA from Louisiana State University and a BS from Spring Hill College. He is
also a Certified Public Accountant.
JOHN F. KEANE
Age: 67
Mr. Keane has been a director of the Company since December 1997. He
is Chairman and Chief Executive Officer of Keane, Inc., an application
development, outsourcing and integration services firm, which he founded in
1965. Previous to this, Mr. Keane held various positions in marketing for IBM
and was a consultant for Arthur D. Little. He serves as a director of EG&G, a
global technology company that supplies products and technical services to
industrial and governmental markets. He is a graduate of Harvard College and
Harvard School of Business.
4
<PAGE> 6
MICHAEL T. MCNEIGHT
Age: 54
Mr. McNeight has been a director of the Company since May 1998. He has
served as Vice President of Sales Operations of Internet Security Systems,
Inc., a software company providing network security analysis and intrusion
detection systems, since 1996. From 1995 to 1996, Mr. McNeight was Senior Vice
President at TSW International, Inc., a leading supplier of plant performance
and maintenance management software. From 1993 through 1994, he served as Vice
President and then President and Chief Executive Officer of Aurum Software,
Inc., a leading software company specializing in sales, marketing and customer
support automation. He received his BA from Oklahoma State University and his
MS from Texas Christian University.
JAMES R. PORTER
Age: 63
Mr. Porter has been a director of the Company since the Company's
initial public offering in March 1993. He served from September 1985 until
February 1997 as President, Chief Executive Officer and a director of Triad
Systems Corporation, a provider of business and information management
solutions for the retail hard lines industry and the automotive aftermarket,
and now serves as Chairman of the Board. Previously, he served in executive
capacities at Informatics General Corporation and United Systems International.
Mr. Porter serves on the Board of Regents of Pepperdine University and on the
Board of Trustees of Abilene Christian University. Mr. Porter is also a
director of Silicon Valley Bank, Cardone Industries, Inc., and Cellular
Technology Services. Mr. Porter earned his BS from Texas A&M and attended
Harvard Graduate School of Business.
ROGER A. BABB
Age: 52
Mr. Babb has been a Director of the Company since March 26, 1999. He
is President of Operation Simulation Associates, Inc., a software company
developing power system simulation software and providing consulting services
to the electric power industry, which he founded in 1983. He is also Chief
Executive Officer of Babb Cellular Concrete International and Chief Financial
Officer of Babb Lumber Company, Inc., related building material manufacturing
companies. Mr. Babb brings experience in the management of software
development, technical competence and financial expertise to the Board. He
earned his BS in Electrical Engineering from the Georgia Institute of
Technology.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION AS DIRECTORS OF THE NOMINEES LISTED ABOVE.
ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Company's Board of Directors held four meetings and two telephonic
meetings during 1998. The Board has an Audit Committee and a Compensation
Committee, but does not have a Nominating Committee. No director attended less
than 75% of the aggregate number of meetings of the Board and the committees of
the Board on which he served.
The Audit Committee was formed in May 1993; and for 1998 consisted of
Messrs. John F. Keane, Said Mohammadioun and James Porter, until May 7, 1998,
when Mr. Mohammadioun resigned. Mr. Michael T. McNeight was elected to the
Board of Directors and appointed to the Audit Committee on May 7, 1998, with
Mr. Keane serving as Chairman during 1998. The responsibilities of the Audit
Committee include, in addition to such other duties as the Board may specify,
reviewing and making recommendations to the Board regarding the Company's
employment of independent auditors, the annual audit of the Company's financial
statements and the Company's internal accounting practices and policies. The
Audit Committee met twice during 1998.
5
<PAGE> 7
The Compensation Committee also was formed in May 1993; and for 1998
consisted of Messrs. Brock, Keane, Mohammadioun and Porter until May 7, 1998,
when Mr. Mohammadioun resigned. Mr. McNeight was elected to the Board and
appointed to the Compensation Committee on May 7, 1998, with Mr. Porter serving
as Chairman during 1998. Mr. Brock resigned from the Compensation Committee
effective March 26, 1999. The responsibilities of the Compensation Committee
include, in addition to such other duties as the Board may specify, making
recommendations to the Board regarding compensation arrangements for senior
management of the Company (including annual bonus compensation), the adoption
of any compensation plans in which management is eligible to participate and
the grants of stock options or other benefits under such plans. The
Compensation Committee met once during 1998.
During 1998, each non-management director of the Company received an
annual retainer of $5,000 and a fee of $2,500 for each day on which he attended
a Board or committee meeting. During 1998, Messrs. Keane, Porter and Brock were
each granted options to purchase a total of 5,000 shares of Common Stock. Mr.
Keane, at his first Board meeting on February 3, 1998, was also granted options
to purchase a total of 20,000 shares of Common Stock. Mr. McNeight, at his
first Board meeting on May 7, 1998, was granted options to purchase a total of
20,000 shares of Common Stock. All such options were granted at fair market
value on the date of grant. All directors are reimbursed for expenses incurred
in connection with attendance at Board and committee meetings.
EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of the
Board of Directors. At the end of 1998, the executive officers of the Company
consisted of R. Douglas MacIntyre, Lisa M. Campbell, Kenneth Schultz, and
Judith A. Vitale. Ms. Campbell and Mr. Schultz left the Company in early 1999.
Set forth below is certain information furnished by each of the current
officers of the Company.
KATE C. DEVER
AGE: 39
Ms. Dever joined the Company in April 1999 as the Vice President of
Development and Support. In 1993, she founded MultiSoft Incorporated, a new
technology business offering leading edge solutions and providing technical
support. Prior to 1993, Ms. Dever was employed by Price Waterhouse in their
network technology branch, by Texas Tech Computer Center in systems
programming, by AT&T as a manager administering large systems database
technology, and by IBM as a Communications Specialist. Ms. Dever received a BS
in Management Science from the Georgia Institute of Technology.
JUDITH A. VITALE
Age: 44
Ms. Vitale has served the Company as Director of Finance and
Administration since March 1996. Prior to that time, she held various positions
with the Company since its formation in October 1984, including Manager of
Administration, Manager of Finance, and Corporate Controller. From 1979 until
the formation of the Company, Ms. Vitale was the Manager of Administration at
Management Control Systems, Inc., also founded by Mr. Brock, and now a division
of Research Institute of America.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors, executive officers and persons who own
beneficially more than 10% of the Company's Common Stock to file reports of
ownership and changes in ownership of such stock with the Securities and
Exchange Commission (the "SEC") and the National Association of Securities
Dealers, Inc. Directors, executive officers and greater than 10% shareholders
are required by SEC regulations to furnish the Company with copies of all such
forms they file. To the Company's knowledge, based solely on a review of the
copies of such reports furnished to the Company and written representations
that no other reports were required, all of its directors and
6
<PAGE> 8
executive officers complied during 1998 with all applicable Section 16(a)
filing requirements. Messrs. Keane, Porter and Brock filed Forms 5 in February,
1999, showing the grants of options from November 1998.
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth information concerning (i) those
persons known by management of the Company to own beneficially more than 5% of
the Company's outstanding Common Stock, (ii) the directors and director
nominees of the Company, (iii) the executive officers named in the Summary
Compensation Table included elsewhere herein and (iv) all directors and current
executive officers of the Company as a group. Except as otherwise indicated in
the footnotes below, such information is provided as of March 23, 1999.
According to rules adopted by the SEC, a person is the "beneficial owner" of
securities if he or she has or shares the power to vote them or to direct their
investment or has the right to acquire beneficial ownership of such securities
within 60 days through the exercise of an option, warrant or right, conversion
of a security or otherwise. Except as otherwise noted, the indicated owners
have sole voting and investment power with respect to shares beneficially
owned. An asterisk in the percent of class column indicates beneficial
ownership of less than 1% of the outstanding Common Stock.
<TABLE>
<CAPTION>
Amount and Nature Percent
of Beneficial of
Name of Beneficial Owner Ownership Class
- ------------------------ ----------------- --------
<S> <C> <C>
Richard T. Brock(1) ................................... 1,773,224 (2) 34.4
R. Douglas MacIntyre .................................. 180,000 (2) 3.5
James R. Porter ....................................... 19,800 (2) *
John F. Keane ......................................... 5,000 (2) *
Michael T. McNeight ................................... 5,000 (2) *
Lisa M. Campbell ...................................... 22,500 (2) *
Judith A. Vitale ...................................... 14,770 (2) *
All directors and executive officers as a group
(7 persons) ........................................ 2,020,294 (2) 39.2
</TABLE>
- -----------------------
1) The address for Richard T. Brock is 2859 Paces Ferry Road, Suite 1000,
Atlanta, GA 30339.
2) Includes shares subject to options exercisable on or before May 23,
1999.
EXECUTIVE COMPENSATION
Under the SEC rules for proxy statement disclosure of executive
compensation, the Compensation Committee of the Board of Directors of the
Company has prepared the following report on executive compensation. Set forth
below is a discussion of the Company's executive compensation philosophy and
policies as established and implemented by the Compensation Committee for 1998.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In early 1998, the Compensation Committee set the levels and types of
compensation for its executive officers for 1998 based generally upon (i)
perceived levels and types of compensation paid by the Company's competitors to
their executive officers, (ii) the desire to have some portion of each
executive officers' compensation be incentive in nature and (iii) an evaluation
of each executive officer's ability to contribute to the continued success of
the Company. In addition, certain components of several compensation packages
resulted from negotiations conducted in connection with the hiring of new
executive officers.
In determining appropriate compensation packages for employees, the
Compensation Committee has worked toward establishing an increasingly objective
policy which is designed to:
7
<PAGE> 9
- Provide for an annual evaluation of the base
salaries and incentive compensation paid to key
employees in an effort to maintain the Company's
competitive position;
- Emphasize the incentive aspect of compensation for
sales personnel by making the incentive element
(primarily commissions) comprise as much as 60% of
the total compensation package for such personnel;
- Motivate and reward officers and align their
interests with the interests of shareholders through
the grant of stock options; and
- Establish compensation packages such that the
Company's key employees are paid in the top one-half
of the "market" for comparable positions.
As noted above, the Compensation Committee annually evaluates and
adjusts, if necessary, the proportions of the base, short-term incentive and
long-term incentive compensation components of each officer's compensation
package to accommodate for changes in the market for such officers' services
and to encourage desired individual performance modifications. Changes in total
compensation levels are made annually based on an assessment of each officer's
performance and the composition of the officer's current compensation package.
Such changes in annual compensation are effective on January 1 of each year.
Performance is judged according to the following criteria:
(1) The officer's ability to meet financial performance
goals of the Company for which he or she has
significant responsibility;
(2) The officer's ability to orchestrate projects and
implement strategies in a timely manner within his
or her department or functional unit in the context
of company plans;
(3) The officer's ability to use problem-solving,
communication and technical skills effectively, and
(4) The officer's ability to handle administrative
matters and relationships with other employees
professionally.
In light of the Company's compensation policy, the components of its
executive compensation program in 1999 will be base salaries, short-term
incentive awards in the form of cash bonuses or commissions and long-term
incentive awards in the form of stock options. The procedure used to determine
the level of each of these components of compensation is discussed in more
detail below.
Base Salaries. The Compensation Committee typically reviews various
studies and reports regarding base salary levels for officers of other public
companies in the software industry holding the same or similar positions as the
executive officers of the Company. Although the data used by such compensation
consultants may be available publicly, the Compensation Committee uses such
industry information in the form provided by its compensation consultants in
order to take advantage of the analytical input provided by such consultants
that makes such industry information more directly applicable to the Company
and the functions performed by its executive officers. The Compensation
Committee then sets each officer's salary level based on the officer's
experience level, the scope and complexity of the position held (taking into
account any changes to be made) and the officer's performance during the past
year. Generally, base salaries are targeted to be in the 50 to 65 percentile
range of compensation paid by such other companies, although in certain
instances base salaries may be set higher in order to attract and retain
exceptional employees.
Short-Term Incentive Compensation -- Bonuses and Commissions. The goal
of the short-term incentive component of the Company's compensation packages is
to place a significant portion of each officer's compensation at risk to
encourage and reward a high level of performance each year. For 1998 the
Compensation Committee first determined that the principal measure for
determining the incentive element of short-term compensation for executive
officers should be meeting budgeted pre-tax and pre-investment income
8
<PAGE> 10
or loss projections. The Company experienced 35% achievement of the goals, and,
as a result, the company performance incentive element of the short-term bonus
package for the Company's executive officers resulted in payout of 35% of the
short-term incentive bonuses in 1998.
Generally, the Compensation Committee seeks to set short-term
incentive compensation levels at 20% to 60% of salary. The criteria for earning
bonuses differs slightly for each officer depending upon his or her functional
duties, but generally includes a Company-level financial performance target
(usually growth in operating income, as indicated above) and individual
performance objectives (not necessarily financial in nature).
Long-Term Incentive Compensation -- Stock Options. The goal of the
long-term incentive component of the Company's compensation packages is to
secure, motivate and reward officers and align their interests with the
interests of shareholders through the grant of stock options. Under the Option
Plan, the Compensation Committee is authorized to grant incentive and
non-qualified stock options to key employees. The number of options granted is
based on the position held by the individual, his or her performance, the prior
level of equity holdings by the officer and the Compensation Committee's
assessment of the officer's ability to contribute to the long-term success of
the Company. The Compensation Committee receives and takes into account data
provided by its compensation consultants regarding executives in comparable
positions and management's recommendations concerning proposed option grants.
No particular weight is given to any single factor. Options granted generally
vest in equal annual increments over a period of two to four years and
terminate at the end of 10 years. For a summary of option grants in 1998 to the
Company's named executive officers, see "Executive Compensation Tables - Table
II - Option Grants in 1998."
Compensation of the Chief Executive Officer. The Compensation of Mr.
MacIntyre was established for 1998 by the Compensation Committee. His base
salary for 1998 was $200,000. The salary was based on the Compensation
Committee's assessment of Mr. MacIntyre's contributions to the Company and his
experience and capabilities in the Company's industry. Mr. MacIntyre's
short-term incentive was $120,000 of which he received $41,400, determined by
the Company performance incentive bonus described above as short-term incentive
compensation. Mr. MacIntyre resigned his position as Chief Executive Officer on
March 26, 1999, but remains with the Company in a non-executive consulting
position. Mr. Brock assumed the position of Chief Executive Officer as of March
26, 1999. Mr. Brock's salary has been set at $200,000 with a short term
incentive of $120,000 annually.
Limitations on Deductibility of Compensation. Under the Omnibus Budget
Reconciliation Act, a portion of annual compensation payable after 1993 to any
of the Company's five highest paid executive officers would not be deductible
by the Company for federal income tax purposes to the extent such officer's
overall compensation exceeds $1,000,000. Qualifying performance-based incentive
compensation, however, would be both deductible and excluded for purposes of
calculating the $1,000,000 base. Although the Compensation Committee has not
and does not presently intend to award compensation in excess of the $1,000,000
cap, it will continue to address this issue when formulating compensation
arrangements for executive officers.
THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
John F. Keane
Michael T. McNeight
James R. Porter
The report on executive compensation of the Board of Directors shall
not be deemed to be incorporated by reference as a result of any general
incorporation by reference of this Proxy Statement or any part hereof in the
Company's Annual Report to Shareholders or Form 10-K.
9
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1998, the Compensation Committee of the Board of Directors
consisted of Messrs. Brock, Mohammadioun, Keane and Porter, until May 1998,
when Mr. Mohammadioun resigned and Mr. McNeight was appointed to the
Compensation Committee, with Mr. Porter serving as Chairman. None of such
members serves or has served as an officer or employee of the Company, except
Mr. Brock who was an officer of the Company until January 1, 1997. Mr. Brock
resigned from the Compensation Committee effective March 26, 1999, upon his
re-election as President and Chief Executive Officer at the time of Mr.
MacIntyre's resignation. No executive officer of any entity with an executive
officer of the Company serving as one of its directors served on the Company's
Board of Directors during 1998.
CERTAIN TRANSACTIONS
During 1998, the Company paid $110,250 to a third party software
provider whose Chief Executive Officer is Said Mohammadioun, who was a member
of the Board of Directors until May 6, 1998. The payments were made in
accordance with an agreement dated January 1, 1998. The Company continues to
use the third party software provider under the terms and conditions of the
contract.
Other than compensation arrangements described elsewhere in this Proxy
Statement, and the above referenced transaction, the Company was not a party to
any transaction (or series of transactions), nor did it have any relationship
with any related party requiring disclosure of such transaction or relationship
under applicable SEC disclosure rules during 1998.
EXECUTIVE COMPENSATION TABLES
The following tables set forth certain information required by the SEC
relating to various forms of compensation earned by the persons serving as
Chief Executive Officer ("CEO") of the Company during 1998 and the four other
executive officers whose total salary and bonus for 1998 equaled or exceeded
$100,000. Such executive officers are hereinafter referred to as the Company's
"named executive officers."
TABLE I - SUMMARY COMPENSATION TABLE
Table I presents the total compensation paid to or accrued by the
Company's named executive officers during 1996, 1997 and 1998.
<TABLE>
<CAPTION>
Annual Compensation Long-Term All Other
---------------------------------------------- Compensation (1) Compensation (2)
($) ----------------- ----------------
($) ($) Other Annual Options
Name and Position Year Salary Bonus Compensation(3) (#) (4) ($)
- ----------------- ---- ------- ------ --------------- ------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
R. Douglas MacIntyre, 1998 200,000 41,400 0 30,000 3,000
President and CEO (5) 1997 200,000 81,000 62,500 0 2,375
1996 13,718 0 0 500,000 0
Stephen B. Spence, 1998 91,668 31,050 0 0 2,304
Vice President, 1997 100,000 122,160 0 11,000 1,209
Client Services (6) 1996 90,125 43,606 0 13,000 651
Kenneth D. Barwick, 1998 112,500 48,553 0 0 0
Sr. Vice President, 1997 101,731 45,483 0 100,000 0
Worldwide Sales (7) 1996 N/A N/A N/A N/A N/A
Kenneth Schultz, 1998 130,000 13,975 0 15,000 2,153
Vice President, 1997 47,336 18,100 0 50,000 0
Development (8) 1996 N/A N/A N/A N/A N/A
Lisa M. Campbell, 1998 116,667 13,800 0 10,000 1,675
Vice President, 1997 76,718 16,200 0 40,000 894
Marketing (9) 1996 N/A N/A N/A N/A N/A
Judith A. Vitale, 1998 100,000 18,625 0 5,000 1,962
Director of Finance 1997 100,000 27,150 0 6,000 2,269
and Administration 1996 84,792 18,125 0 3,500 1,506
</TABLE>
10
<PAGE> 12
- --------------
(1) The Company did not award any restricted stock or other long-term
incentives other than stock options during 1996, 1997 or 1998 to its
officers. Accordingly, columns relating to such awards have been
omitted.
(2) Consists of Company matching contributions to the indicated person's
401 (k) plan account.
(3) Information with respect to certain perquisites and other personal
benefits awarded to the named executive officers has been omitted
because in each case, the aggregate value of these items is less than
$50,000 or 10% of the executive's annual salary and bonus for the
years reported above.
(4) See "Table II - Option Grants in 1998" for a description of the
material terms of the 1998 grants.
(5) Mr. MacIntyre was employed by the Company for only a portion of 1996.
Mr. MacIntyre resigned as Chairman, President and Chief Executive
Officer effective March 26, 1999.
(6) Mr. Spence was employed by the Company for only a portion of 1998.
(7) Mr. Barwick was employed by the Company for only a portion of 1997 and
1998. Mr. Barwick was not employed by the Company in 1996.
(8) Mr. Schultz was employed by the Company for only a portion of 1997.
Mr. Schultz was not employed by the Company in 1996.
(9) Ms. Campbell was employed by the Company for only a portion of 1997.
Ms. Campbell was not employed by the Company in 1996.
TABLE II - OPTION GRANTS IN 1998
Table II presents information regarding options granted to the
Company's named executive officers during 1998 to purchase shares of the
Company's Common Stock. The Company has no outstanding stock appreciation
rights ("SARs") and granted no SARs during 1998. In accordance with SEC rules,
the table shows the hypothetical "gains" or "option spreads" that would exist
for the respective options based on assumed rates of annual compound stock
price appreciation of 5% and 10% from the date the options were granted over
the full option term.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Individual Grants Annual Rates of
----------------------------------------------------------------- Stock Price
No. of % of Total Appreciation for
Securities Options Exercise Option Term
Underlying Granted to or Base ----------------------
Options Employees Price Date of 5% 10%
Name Granted during Year ($/Share) Expiration ($) ($)
- ------------- --------- ----------- -------- ---------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Mr. MacIntyre 30,000(1) 7.29 4.69 5/07/08 $88,485 $224,240
Ms. Campbell 10,000(1) 2.43 4.69 5/07/08 $29,495 $ 74,747
Mr. Schultz 15,000(1) 3.65 2.5625 9/15/08 $24,172 $ 61,259
Ms. Vitale 5,000(1) 1.22 2.5625 9/15/08 $ 8,058 $ 20,420
</TABLE>
- -------------------
(1) These options become exercisable in 25% increments on the first,
second, third and fourth anniversaries of the date of grant. Shares
may be withheld upon exercise to pay applicable withholding taxes.
Under certain circumstances, the options are subject to immediate
vesting in the event of a change of control of the Company.
TABLE III - AGGREGATED OPTION EXERCISES IN 1998 AND 1998 YEAR-END OPTION VALUES
No options were exercised by the named executive officers during 1998.
11
<PAGE> 13
PERFORMANCE GRAPH
The following indexed line graph indicates the Company's total return
to shareholders from December 31, 1993 to December 31, 1998, as compared to
total return for the Russell 2000 and Russell 2000-Technology indices for the
same period. The Russell 2000 index is comprised of the 2,000 publicly traded
companies with market capitalizations (in terms of number of shares
outstanding) ranked immediately below the 1,000 companies with the highest
market capitalizations. The Russell 2000-Technology index is comprised of the
2,000 publicly traded companies in the high-technology industry with market
capitalizations (in terms of number of shares outstanding) ranked immediately
below the 1,000 companies in the high-technology industry with the highest
market capitalizations.
[GRAPH]
<TABLE>
<CAPTION>
December 31, December 31, December 31, December 31, December 31, December 31,
1993 1994 1995 1996 1997 1998
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Firstwave Technologies, Inc. 100 33 50 20 17 16
Russell 2000-Technology Index 100 114 170 188 191 215
Russell 2000 Index 100 98 126 147 180 179
</TABLE>
12
<PAGE> 14
OTHER MATTERS
The Board of Directors knows of no other matters to be brought before
the Annual Meeting. However, if any other matters are properly brought before
the Annual Meeting, the persons appointed in the accompanying proxy intend to
vote the shares represented thereby in accordance with their best judgment.
SOLICITATION OF PROXIES
The cost of the solicitation of proxies on behalf of the Company will
be borne by the Company. Certain directors, officers and other employees of the
Company may, without additional compensation except reimbursement for actual
expenses, solicit proxies by mail, in person or by telecommunication. The
Company will reimburse brokers, fiduciaries, custodians and other nominees for
out-of-pocket expenses incurred in sending the Company's proxy materials to,
and obtaining instructions relating to such materials from, beneficial owners.
INDEPENDENT AUDITORS
The firm of PricewaterhouseCoopers LLP served as the Company's
independent auditors for 1998 and the Board of Directors has reappointed this
firm as the Company's independent auditors for 1999. A representative of this
firm is expected to attend the Annual Meeting to respond to questions from
shareholders and to make a statement if he so desires.
SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Any proposal that a shareholder may desire to have included in the
Company's proxy material for presentation at the 2000 Annual Meeting must be
received by the Company at its executive offices at 2859 Paces Ferry Road,
Suite 1000, Atlanta, Georgia 30339, Attention: Mr. Richard T. Brock, on or
prior to December 2, 1999.
The proxy or proxies designated by the Company will have discretionary
authority to vote on any matter properly presented by a shareholder for
consideration at the 2000 Annual Meeting of Shareholders but not submitted for
inclusion in the proxy materials for such meeting unless notice of the matter
is received by the Company at its principal executive office not later than
February 18, 2000, and certain other conditions of the applicable rules of the
SEC are satisfied.
ANNUAL REPORT
The Company's 1998 Annual Report to Shareholders (which is not part of
the Company's proxy soliciting material) is being mailed to the Company's
shareholders with this Proxy Statement.
April 2, 1999
Atlanta, Georgia
13
<PAGE> 15
FIRSTWAVE TECHNOLOGIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRSTWAVE
TECHNOLOGIES, INC.
The undersigned shareholder(s) of Firstwave Technologies, Inc., a Georgia
Corporation (the "Company"), hereby acknowledges receipt of the Notice of Annual
Meeting of Shareholders and Proxy Statement, each dated April 2, 1999, and
hereby appoints Richard T. Brock and Judith A. Vitale, or either of them,
proxies and attorneys-in-fact, with full power of substitution, on behalf and in
the same name of the undersigned, to represent the undersigned at the 1999
Annual Meeting of Shareholders of the Company to be held at 2:00 p.m. on
Thursday, May 6, 1999 at the Corporate Offices of Firstwave Technologies,
Atlanta, Georgia, and at any adjournment(s) thereof, and to vote all shares of
Common Stock which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth below:
(1) Election of Directors
<TABLE>
<S> <C> <C> <C>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees
(except as indicated otherwise below) listed below
</TABLE>
NOMINEES: Richard T. Brock, Michael T. McNeight, John F. Keane, James R. Porter,
and Roger A. Babb
INSTRUCTIONS: To withhold authority for any individual nominee, mark "FOR" above
and write the name of the nominee for whom you wish to withhold authority in the
space provided below:
- --------------------------------------------------------------------------------
(2) In their discretion, to transact such matter or matters which may properly
come before the meeting or any adjournment(s) thereof.
<PAGE> 16
PLEASE COMPLETE, DATE SIGN AND RETURN THIS PROXY PROMPTLY. This Proxy, when
properly executed will be voted in accordance with the directions given by the
undersigned shareholder(s). If no direction is made, it will be voted FOR the
items listed (1) through (2) and as the proxies deem advisable on such other
matters as may come before the meeting.
Dated: ---------------- , 1999
------------------------------
Signature
------------------------------
Signature (if held jointly)
Title of authority (if
applicable)
NOTE: Please sign exactly as
name appears hereon. If shares
are registered in more than
one name, the signature of all
persons are required. A
corporation should sign its
full corporate name by a duly
authorized officer, stating
his or her title. Trustees,
guardians, executors and
administrators should sign in
their official capacity,
giving their full title as
such. If a partnership, please
sign in the partnership name
by an authorized person.
