<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>
First Wave 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 4, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of Firstwave Technologies, Inc. (the "Company"), which will be held
at 2:00 p.m. on Thursday, May 9, 2000, 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 2000.
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,
/s/ Richard T. Brock
-----------------------------
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 2000 Annual Meeting of Shareholders of Firstwave Technologies, Inc.
(the "Company") will be held at 2:00 p.m. on Tuesday, May 9, 2000, 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; and
(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,
2000, 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 4, 2000
Atlanta, Georgia
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, WE REQUEST YOU COMPLETE,
SIGN, DATE AND RETURN THE ENCLOSED PROXY SO THAT YOUR SHARES WILL BE
REPRESENTED.
<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 Tuesday, May 9, 2000, 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 4,
2000 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, 2000 (the "Record Date") will be entitled to vote at the Annual
Meeting. As of the close of business on the Record Date, there were 5,799,811
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.
<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 Roger A. Babb, Richard T. Brock, John F. Keane,
Michael T. McNeight, and James R. Porter for re-election to the Board of
Directors at the Annual Meeting, each to serve until the 2001 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: 52
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 a MBA from
Louisiana State University and a BS from Spring Hill College. He is also a
Certified Public Accountant.
JOHN F. KEANE
Age: 68
Mr. Keane has been a director of the Company since December 1997. He is
Chairman 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.
2
<PAGE> 6
MICHAEL T. MCNEIGHT
Age: 55
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: 64
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. From February
1997 through June 1999, Mr. Porter served as Chairman of the Board of CCI/Triad
and continues to serve on the CCI/Triad Board of Directors. Previously, he
served as Executive Vice President of 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 Technical Services. Mr. Porter earned his BS from Texas A&M and
attended Harvard Graduate School of Business.
ROGER A. BABB
Age: 53
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 Vice President of
Babb Lumber Company, Inc., related building material manufacturing companies. 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 six meetings during 1999. 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,
except for Mr. McNeight who attended 67% of all meetings of the Board and the
committees of the Board.
The Audit Committee in 1999 consisted of Messrs. John F. Keane, Michael
T. McNeight, James Porter, and Roger Babb. Mr. Keane served as Chairman of the
Audit Committee during 1999. 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 engagement of
independent accountants, the annual audit of the Company's financial statements
and the Company's internal accounting practices and policies. The Audit
Committee met twice during 1999.
3
<PAGE> 7
The Compensation Committee in 1999 consisted of Messrs. Keane, McNeight,
Porter, and Babb. Mr. Porter served as Chairman of the Compensation Committee
during 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 four
times during 1999.
During 1999, 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 1999, Messrs. Porter and McNeight were each
granted options to purchase a total of 5,000 shares of Common Stock. Mr. Babb,
at his first Board meeting on May 6, 1999, was also 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 1999, the executive officers of the Company
consisted of Richard T. Brock and Judith A. Vitale. Debora L. Schum became an
executive officer of the Company when she was promoted to Vice President of
North American Sales in January of 2000. Set forth below is certain information
furnished by each of the current officers of the Company.
DEBORA L. SCHUM
Age: 38
Ms. Schum has been the Vice President of North American Sales since
January 2000. Prior to this, she held the positions of Business Development
Manager and then Director of North American Sales since she joined the Company
in February 1998. She held various positions with Scopus Technology, Inc. from
July 1986 through October 1997, including systems engineer, account executive,
and account manager. Ms. Schum received a BS degree in Information Systems and
Management from Appalachian State University.
JUDITH A. VITALE
Age: 45
Ms. Vitale has served the Company as Vice President of Finance and
Administration since May 1999. Prior to that time, she held various positions
with the Company since its formation in October 1984, including Director of
Finance and Administration, 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 executive officers
complied during 1999 with all applicable Section 16(a) filing requirements.
4
<PAGE> 8
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, 2000. 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
of Beneficial Percent of
Name of Beneficial Owner Ownership Class
- ------------------------ ----------------- -----------
<S> <C> <C>
Richard T. Brock .............................. 2,264,911(1) 36.0
Roger A. Babb ................................. 64,360(2) *
James R. Porter ............................... 31,550(3) *
John F. Keane ................................. 11,250(4) *
Michael T. McNeight ........................... 11,250(5) *
Debora L. Schum ............................... 7,500(6) *
Judith A. Vitale .............................. 7,520(7) *
All directors and executive officers as a
group (7 persons) .......................... 2,398,341(8) 38.2
</TABLE>
- -------------------------
(1) Includes 11,250 shares subject to options exercisable and
485,437 shares that may be acquired upon conversion of
preferred stock on or before May 23, 2000.
(2) Includes 5,000 shares subject to options exercisable on or
before May 23, 2000.
(3) Includes 12,250 shares subject to options exercisable on or
before May 23, 2000.
(4) Includes 11,250 shares subject to options exercisable on or
before May 23, 2000.
(5) Includes 11,250 shares subject to options exercisable on or
before May 23, 2000.
(6) Includes 7,500 shares subject to options exercisable on or
before May 23, 2000.
(7) Includes 7,510 shares subject to options exercisable on or
before May 23, 2000.
(8) Includes 66,010 shares subject to options exercisable on or
before May 23, 2000.
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 1999.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In early 1999, the Compensation Committee set the levels and types of
compensation for its executive officers for 1999 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
officer's 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.
5
<PAGE> 9
In determining appropriate compensation packages for employees, the
Compensation Committee has worked toward establishing an increasingly objective
policy which is designed to:
- 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 2000 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.
6
<PAGE> 10
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 1999 the
Compensation Committee first determined that the principal measures for
determining the incentive element of short-term compensation for executive
officers should be meeting budgeted pre-tax and pre-investment income or loss
projections and meeting budgeted revenues. The Company experienced 57%
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 57% of the short-term incentive bonuses in 1999.
Generally, the Compensation Committee seeks to set short-term incentive
compensation levels at 20% to 60% of salary. The criteria for earning bonuses
differ slightly for each officer depending upon his or her functional duties,
but generally includes a Company-level financial performance target (usually
growth in revenues and/or 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 1999 to the Company's
named executive officers, see "Executive Compensation Tables - Table II - Option
Grants in 1999."
Compensation of the Chief Executive Officer. The Compensation of Mr.
Brock was established for 1999 by the Compensation Committee. His base salary
for 1999 was $200,000. The salary was based on the Compensation Committee's
assessment of Mr. Brock's contributions to the Company and his experience and
capabilities in the Company's industry. Mr. Brock's short-term incentive was
$120,000 of which he received $51,075, determined by the Company performance
incentive bonus described above as short-term incentive compensation.
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
Roger A. Babb
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.
7
<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1999, the Compensation Committee of the Board of Directors
consisted of Messrs. Keane, McNeight and Porter, until March 1999, when Mr. Babb
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. 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 1999.
CERTAIN TRANSACTIONS
On April 26, 1999, the Company sold 10,000 shares of its Series A
Convertible Preferred Stock for an aggregate purchase price of $1,000,000 to Mr.
Brock, the Company's Chief Executive Officer. The Series A Convertible Preferred
Stock accumulates dividends at a rate of 9% that are payable annually when
declared by the Board of Directors. The Board of Directors declared, and the
Company paid $61,644 of such dividends in cash to Mr. Brock in January 2000,
pursuant to the terms of such preferred stock. The Preferred Stock is
convertible after a period of one year from issuance into Common Stock of the
Company at the option of the holder at a conversion price of $2.06.
Other than compensation arrangements described elsewhere in this Proxy
Statement, and the above referenced transactions, 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 1999.
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 1999 and the other executive
officers whose total salary and bonus for 1999 equaled or exceeded $100,000.
Such executive officers are hereinafter referred to as the Company's "named
executive officers."
TABLE I - SUMMARY COMPENSATION TABLE
Table I presents the total compensation paid to or accrued by the
Company's named executive officers during 1997, 1998 and 1999.
<TABLE>
<CAPTION>
Annual Compensation Long-Term
------------------------------------------- Compensation (1)
($) ----------------- All Other
($) ($) ($) Other Annual Options Compensation(2)
Name and Position Year Salary Bonus Compensation(3) (#) ($)
- ----------------- ---- ------ ----- --------------- ---------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard T. Brock 1999 160,000 51,075 0 0 0
President and CEO(4)
R. Douglas MacIntyre, 1999 125,000 0 74,619 0 875
President and CEO (5) 1998 200,000 41,400 0 30,000 3,000
1997 200,000 81,000 62,500 0 2,375
Debora L. Schum 1999 83,333 86,231 0 20,000 1,137
Vice President, 1998 63,654 54,000 0 5,000 364
North American Sales(6)
Judith A. Vitale, 1999 110,000 21,282 0 25,000 1,857
Vice President, 1998 100,000 18,625 0 5,000 1,962
Finance & Administration 1997 100,000 27,150 0 6,000 2,269
</TABLE>
8
<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
$50,000 or 10% of the executive's annual salary and bonus for the years
reported above.
(4) Mr. Brock joined the Company as an executive officer on March 26, 1999.
(5) Mr. MacIntyre resigned as Chairman, President and Chief Executive
Officer effective March 26, 1999, and was employed as a consultant on a
part-time basis for the remainder of 1999.
(6) Ms. Schum joined the Company on February 24, 1998.
TABLE II - OPTION GRANTS IN 1999
Table II presents information regarding options granted to the Company's
named executive officers during 1999 to purchase shares of the Company's Common
Stock. In accordance with SEC rules, the table shows the hypothetical "gains" or
"option spreads" that would exist for the respective options based on assumed
rates of annual compound stock price appreciation of 5% and 10% from the date
the options were granted over the full option term.
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Individual Grants Annual Rates of
------------------------------------------------------------ Stock Price
No. of % of Total Appreciation for
Securities Options Exercise Option Term
Underlying Granted to or Base -------------------------
Options Employees Price Date of 5% 10%
Name Granted during Year ($/Share) Expiration ($) ($)
- ---------- ---------- ------------- ---------- ---------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Mr. Brock -0- n/a n/a n/a n/a n/a
Ms. Schum 20,000(1) 3.31 1.5938 4/26/09 $20,043 $ 50,797
Ms. Vitale 25,000(1) 4.14 3.7500 8/05/09 $58,959 $149,413
- -------------------
(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 1999 AND 1999 YEAR-END OPTION VALUES
Mr. MacIntyre exercised 62,500 options while he was employed as a consultant.
Number of Value of Unexercised
Unexercised In-the-Money
Options Shares Options at at Year-End
Acquired Year-End (#) $
On Exercise Value Received Exercisable/ Exercisable/
Name # $ Unexercisable Unexercisable
- ------------------ -------------- -------------------- ------------- ---------------------
<S> <C> <C> <C> <C>
Mr. MacIntyre 62,500 $74,618.50 none n/a
</TABLE>
9
<PAGE> 13
PERFORMANCE GRAPH
The following indexed line graph indicates the Company's total return to
shareholders from December 31, 1994 to December 31, 1999, 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
1994 1995 1996 1997 1998 199
<S> <C> <C> <C> <C> <C> <C>
Firstwave Technologies, Inc. 100 153 61 52 48 50
Russell 2000-Technology Index 100 149 165 167 188 379
Russell 2000 Index 100 127 155 204 191 188
</TABLE>
10
<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 ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP served as the Company's
independent accountants for 1999 and the Board of Directors has reappointed this
firm as the Company's independent accountants for 2000. 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 2001 ANNUAL MEETING
Any proposal that a shareholder may desire to have included in the
Company's proxy material for presentation at the 2001 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, 2000.
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 2001 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, 2001, and certain other conditions of the applicable rules of the
SEC are satisfied.
ANNUAL REPORT
The Company's 1999 Annual Report to Shareholders is being mailed to the
Company's shareholders with this Proxy Statement.
April 4, 2000
Atlanta, Georgia
11
<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 4, 2000, and
hereby appoints Richard T. Brock or Judith A. Vitale 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 2000 Annual Meeting
of Shareholders of the Company to be held at 2:00 p.m. on Tuesday, May 9, 2000
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>
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote for all nominees
(except as indicated otherwise below) listed below
</TABLE>
NOMINEES: Roger A. Babb, Richard T. Brock, John F. Keane, Michael T. McNeight,
and James R. Porter
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.
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
- --------------------------------------------------------------------------, 2000
------------------------------
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 is 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.
