SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X]
FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
THEGLOBE.COM
(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)(4) and 0-11.
1. Title of each class of securities to which transaction applies: N/A
2. Aggregate number of securities to which transaction applies: N/A
3. Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11: N/A
4. Proposed maximum aggregate value of transaction: N/A
5. Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1. Amount Previously Paid: N/A
2. Form, Schedule or Registration Statement No.: N/A
3. Filing Party: N/A
4. Date Filed: N/A
[GRAPHIC OMITTED]
THEGLOBE.COM, INC.
110 EAST BROWARD BOULEVARD
SUITE 1400
FORT LAUDERDALE, FLORIDA 33301
April 30, 2003
Dear Stockholder:
We invite you to attend our Annual Meeting of Stockholders on Friday, June 20,
2003, 10 a.m., at the Hyatt Regency Pier Sixty-Six, 2301 Southeast 17th Street,
Fort Lauderdale, Florida 33316.
This booklet includes the formal notice of the meeting and the proxy statement.
The proxy statement tells you about the agenda and procedures for the meeting.
In addition to specific agenda items, we will discuss generally the operations
of theglobe.com. We welcome your comments, and hope you will join us.
Whether or not you plan to attend in person, IT IS IMPORTANT THAT YOUR SHARES BE
-----------------------------------
REPRESENTED AT THE ANNUAL MEETING OF STOCKHOLDERS. The Board of Directors
-------------------------------------------------------
recommends that stockholders vote FOR each of the matters described in the proxy
statement to be presented at the Annual Meeting of Stockholders.
PLEASE DATE AND SIGN YOUR PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE AS
SOON AS POSSIBLE.
Thank you.
Sincerely,
/s/ Michael S. Egan
-----------------------
Michael S. Egan
Chief Executive Officer
2
[GRAPHIC OMITTED]
THEGLOBE.COM, INC.
110 EAST BROWARD BOULEVARD
SUITE 1400
FORT LAUDERDALE, FLORIDA 33301
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 20, 2003
theglobe.com, inc., a Delaware corporation, will hold its Annual Meeting of
Stockholders on Friday, June 20, 2003 at 10 a.m., at the Hyatt Regency Pier
Sixty-Six, 2301 Southeast 17th Street, Fort Lauderdale, Florida 33316, for the
following purposes:
1. To elect the Board of Directors for the coming year; and
2. To transact any other business that may properly come before the Annual
Meeting of Stockholders.
If you own shares of theglobe.com as of the close of business on April 21, 2003,
you can vote those shares by proxy or at the Annual Meeting of Stockholders.
Fort Lauderdale, Florida
April 30, 2003
By Order of the Board of Directors
/s/ Michael S. Egan
-----------------------
Michael S. Egan
Chief Executive Officer
____________________________________________________________
IMPORTANT: WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE,
DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
IN ORDER TO ENSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE IS NECESSARY IF
YOU MAIL IT IN THE UNITED STATES.
3
TABLE OF CONTENTS
PAGE
----
Voting Rights and Solicitation of Proxies. . . . . . . . . . . . . . . . . . . . . . . . 5
I. Election of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Nominees for Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Board Meetings and Committees of the Board . . . . . . . . . . . . . . . . . . . . . 8
Director Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . 10
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Summary Compensation Table . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Aggregated Option Exercises in the Last Fiscal Year and 2002 Year End Option Values. 13
Option Grants in 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Employment Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Involvement in Certain Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 15
Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . 15
Compliance with Section 16(a) of the Exchange Act. . . . . . . . . . . . . . . . . . 16
Report of the Audit Committee of the Board of Directors. . . . . . . . . . . . . . . . . 17
Appointment of Independent Auditors. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Stockholder Proposals for the 2004 Annual Meeting. . . . . . . . . . . . . . . . . . . . 20
Other Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4
THEGLOBE.COM, INC.
PROXY STATEMENT
IN CONNECTION WITH ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 20, 2003.
THE BOARD OF DIRECTORS OF THEGLOBE.COM, INC. ("THEGLOBE", "WE" OR "US") IS
SOLICITING PROXIES TO BE VOTED AT THE ANNUAL MEETING OF STOCKHOLDERS (THE
"ANNUAL MEETING") TO BE HELD ON FRIDAY, JUNE 20, 2003 AT 10:00 A.M. AND AT ANY
ADJOURNMENT OR POSTPONEMENT.
This proxy statement and the accompanying proxy are first being sent to
stockholders entitled to vote at the Annual Meeting on or about May 20, 2003.
theglobe.com's principal executive offices are located at 110 East Broward
Boulevard, Suite 1400, Fort Lauderdale, Florida 33301, telephone number (954)
769-5900.
VOTING RIGHTS AND SOLICITATION OF PROXIES
PURPOSE OF THE ANNUAL MEETING
The specific proposals to be considered and acted upon at the Annual Meeting are
summarized in the accompanying Notice of Annual Meeting. Each proposal is
described in more detail in this proxy statement.
RECORD DATE AND SHARES OUTSTANDING
Stockholders of record at the close of business on April 21, 2003 (the "Record
Date") are entitled to notice of and to vote at the Annual Meeting. At the
Record Date, 30,382,293 shares of common stock were issued and outstanding. The
closing price of our common stock on the OTC Bulletin Board on the Record Date
was $0.185 per share.
REVOCABILITY AND VOTING OF PROXIES
Any person signing a proxy in the form accompanying this proxy statement has the
power to revoke it prior to the Annual Meeting or at the Annual Meeting prior to
the vote pursuant to the proxy. A proxy may be revoked by any of the following
methods:
- by writing a letter delivered to Robin Segaul Lebowitz, Secretary of
theglobe.com, stating that the proxy is revoked;
- by submitting another proxy with a later date; or
- by attending the Annual Meeting and voting in person.
Please note, however, that if a stockholder's shares are held of record by a
broker, bank or other nominee and that stockholder wishes to vote at the Annual
Meeting, the stockholder must bring to the Annual Meeting a letter from the
broker, bank or other nominee confirming that stockholder's beneficial ownership
of the shares. Shares of common stock represented by properly executed proxies
will be voted at the Annual Meeting in accordance with the instructions
indicated on the proxies, unless the proxies have been revoked.
Unless we receive specific instructions to the contrary, properly executed
proxies will be voted: (i) FOR the election of each of theglobe.com's nominees
as a director and (ii) with respect to any other matters that may come before
the Annual Meeting, at the discretion of the proxy holders. theglobe.com does
not presently anticipate any other business will be presented for vote at the
Annual Meeting.
5
LIST OF STOCKHOLDERS
A list of stockholders entitled to vote at the Annual Meeting will be available
at the Annual Meeting and for ten days prior to the Annual Meeting during
regular business hours at our offices 110 East Broward Boulevard, Suite 1400,
Fort Lauderdale, Florida, by contacting Robin Segaul Lebowitz, Secretary of
theglobe.com.
VOTING AT THE ANNUAL MEETING
Each share of common stock outstanding on the Record Date will be entitled to
one (1) vote on each matter submitted to a vote of the stockholders, including
the election of directors. Cumulative voting by stockholders is not permitted.
The presence, in person or by proxy, of the holders of a majority of the votes
entitled to be cast by the stockholders entitled to vote at the Annual Meeting
is necessary to constitute a quorum. Abstentions and broker "non-votes" are
counted as present and entitled to vote for purposes of determining a quorum. A
broker "non-vote" occurs when a nominee holding shares for a beneficial owner
does not vote on a particular proposal because the nominee does not have
discretionary voting power for that particular item and has not received
instructions from the beneficial owner.
A plurality of the votes cast is required for the election of Directors.
Abstentions and broker "non-votes" are not counted for purpose of the election
of Directors.
SOLICITATION
We will pay the costs relating to this proxy statement, the proxy and the Annual
Meeting. We may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to beneficial owners. Directors, officers and regular employees may
also solicit proxies. They will not receive any additional compensation for the
solicitation.
6
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES FOR DIRECTORS
The Board of Directors proposes the following three nominees for election as
directors at the Annual Meeting. The directors will hold office from election
until the next Annual Meeting, or until their successors are elected and
qualified.
NOMINEE AGE POSITION HELD WITH THEGLOBE DIRECTOR SINCE
--------------------- --- -------------------------------- --------------
Michael S. Egan . . . 63 Chairman and Chief Executive
Officer 1997
Edward A. Cespedes. . 37 Director and President 1997
Robin Segaul Lebowitz 38 Director, Chief Financial
Officer, Treasurer and Secretary 2001
MICHAEL S. EGAN. Michael Egan has served as theglobe.com's Chairman since 1997
and Chief Executive Officer since June 1, 2002. He is also Chairman of ANC
Rental Corporation (Other OTC: ANCXQ.PK), which owns and operates car rental
businesses under the Alamo and National brand names. As well, Mr. Egan is
Chairman of Certified Vacations, a privately held company specializing in
designing, marketing and delivering vacation packages. Mr. Egan is a member of
the Board of Directors of Boca Resorts, Inc. (NYSE: RST) (formerly Florida
Panthers Holdings, Inc.) and a member of the Board of Directors of the Horatio
Alger Association. Mr. Egan has spent over 20 years in the car rental business.
He began with Alamo in 1973, became an owner in 1979, and became Chairman and
majority owner from January 1986 until November 1996 when he sold the company to
AutoNation. In 2000, AutoNation spun off the rental division and Mr. Egan was
named Chairman. Prior to acquiring Alamo, he held various administration
positions at Yale University and taught at the University of Massachusetts at
Amherst. Mr. Egan is a graduate of Cornell University where he received his
Bachelor's degree in Hotel Administration.
EDWARD A. CESPEDES. Edward Cespedes has served as a director of theglobe.com
since 1997 and President of theglobe.com since June 1, 2002. Mr. Cespedes is
also the chairman of EKC Ventures, LLC, a privately held investment company.
Mr. Cespedes served as the vice chairman of Prime Ventures, LLC, from May 2000
to February 2002. From August 2000 to August 2001, Mr. Cespedes served as the
President of the Dr. Koop Lifecare Corporation and was a member of the Company's
Board of Directors from January 2001 to December 2001. From 1996 to 2000, Mr.
Cespedes was a Managing Director of Dancing Bear Investments. Concurrent with
his position at Dancing Bear Investments, from 1998 to 2000, Mr. Cespedes also
served as Vice President for corporate development for theglobe.com where he had
primary responsibility for all mergers, acquisitions, and capital markets
activities. In 1996, prior to joining Dancing Bear Investments, Mr. Cespedes
was the director of corporate finance for Alamo Rent-A-Car. From 1988 to 1996,
Mr. Cespedes worked in the Investment Banking Division of J.P. Morgan and
Company, where he most recently focused on mergers and acquisitions. In his
capacity as a venture capitalist, Mr. Cespedes has served as a member of the
board of directors of various portfolio companies. Mr. Cespedes is the founder
of the Columbia University Hamilton Associates. Mr. Cespedes received a
Bachelor's degree in International Relations from Columbia University.
ROBIN SEGAUL LEBOWITZ. Robin Lebowitz has served as a director of theglobe.com
since December 2001, Treasurer and Secretary of theglobe.com since June 1, 2002
and Chief Financial Officer of theglobe.com since July 1, 2002. Ms. Lebowitz
has worked in various capacities for the Company's Chairman, Michael Egan, for
nine years. She is the Controller/Managing Director of Dancing Bear
7
Investments, Mr. Egan's investment management and holding company. Ms. Lebowitz
served on the Board of Directors of theglobe.com from August 1997 to October
1998. At Alamo Rent-A-Car, she served as Financial Assistant to the Chairman
(Mr. Egan). Prior to joining Alamo, Ms. Lebowitz was the Corporate Tax Manager
at Blockbuster Entertainment Group where she worked from 1991 to 1994. From
1986 to 1989, Ms. Lebowitz worked in the audit and tax departments of Arthur
Andersen & Co. Ms. Lebowitz received a Bachelor of Science in Economics from
the Wharton School of the University of Pennsylvania; a Masters in Business
Administration from the University of Miami and is a Certified Public
Accountant.
BOARD MEETINGS AND COMMITTEES OF THE BOARD
Including unanimous written actions of the Board, the Board of Directors met
nine times in 2002. No incumbent director who was on the Board for the entire
year attended less than 75% of the total number of all meetings of the Board and
any committees of the Board on which he or she served, if any, during 2002.
The functions and responsibilities of the standing committees of the Board of
Directors are described below.
Audit Committee. The Audit Committee, which was formed in July 1998, reviews,
acts on and reports to the Board of Directors with respect to various auditing
and accounting matters, including the selection of our independent auditors, the
scope of the annual audits, fees to be paid to the auditors, the performance of
our auditors and our accounting practices and internal controls. The Audit
Committee operates pursuant to a charter, as amended, adopted by the Board of
Directors on June 12, 2000. The current members of the Audit Committee are
Messrs. Egan and Cespedes and Ms. Lebowitz, all of whom are employee directors.
None of the current committee members are considered "independent" within the
meaning of applicable NASD rules. Messrs. Egan and Cespedes replaced Messrs.
Krizelman and Halperin effective June 20, 2002. Including unanimous written
actions of the Committee, the Audit Committee held three meetings in 2002.
Compensation Committee. The Compensation Committee, which met twice in 2002
(including unanimous written actions of the Committee), establishes salaries,
incentives and other forms of compensation for officers and other employees of
theglobe.com. The Compensation Committee also approves option grants under all
of our outstanding stock based incentive plans. The current members of the
Compensation Committee are Messrs. Egan and Cespedes, who replaced Mr. Halperin
and Ms. Lebowitz effective June 20, 2002.
DIRECTOR COMPENSATION
Directors who are also our employees receive no compensation for serving on our
Board or committees. We reimburse non-employee directors for all travel and
other expenses incurred in connection with attending Board and committee
meetings. Non-employee directors are also eligible to receive automatic stock
option grants under our 1998 Stock Option Plan, as amended and restated. As of
December 31, 2002 there were no directors who met this definition.
Each director who becomes an eligible non-employee director for the first time
receives an initial grant of options to acquire 25,000 shares of our common
stock. In addition, each eligible non-employee director will receive an annual
grant of options to acquire 7,500 shares of our common stock on the first
business day following each annual meeting of stockholders that occurs while the
1998 Stock Option Plan or 2000 Stock Option Plan is in effect. These stock
options will be granted with per share exercise prices equal to the fair market
value of our common stock as of the date of grant.
INDEMNIFICATION
The Delaware General Corporation Law provides that a corporation may indemnify
its directors and officers for certain liabilities. We indemnify our directors
and officers to the fullest extent permitted by law so that they will serve free
from undue concern that they will not be indemnified. This is required under our
By-Laws, and we have also signed agreements with each of those individuals
contractually obligating us to provide this indemnification to them.
8
On and after August 3, 2001 and as of the date of this filing, the Company is
aware that six putative shareholder class action lawsuits were filed against the
Company, certain of its current and former officers and directors, and several
investment banks that were the underwriters of the Company's initial public
offering. The lawsuits were filed in the United States District Court for the
Southern District of New York. The lawsuits purport to be class actions filed on
behalf of purchasers of the stock of the Company during the period from November
12, 1998 through December 6, 2000. Plaintiffs allege that the underwriter
defendants agreed to allocate stock in the Company's initial public offering to
certain investors in exchange for excessive and undisclosed commissions and
agreements by those investors to make additional purchases of stock in the
aftermarket at pre-determined prices. Plaintiffs allege that the Prospectus for
the Company's initial public offering was false and misleading and in violation
of the securities laws because it did not disclose these arrangements. On
December 5, 2001, an amended complaint was filed in one of the actions, alleging
the same conduct described above in connection with both the Company's November
23, 1998 initial public offering and its May 19, 1999 secondary offering. The
actions seek damages in an unspecified amount. The complaints have been
consolidated into a single action, entitled Kofsky v. theglobe.com, inc. et al.,
Case No. 01 Civ. 7247. On February 19, 2003, a motion to dismiss all claims
against the Company was denied by the Court. The Company and its current and
former officers and directors intend to vigorously defend the actions.
Pursuant to our By-Laws and agreements with the individuals, we have agreed to
indemnify our Officers and Directors against certain liabilities under specified
circumstances.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE THREE NOMINEES
AS DIRECTORS OF THEGLOBE.COM.
We will vote your shares as you specify on the enclosed proxy card. If you do
not specify how you want your shares voted, we will vote them FOR the election
of all the nominees listed above. If unforeseen circumstances (such as death or
disability) make it necessary for the Board of Directors to substitute another
person for any of the nominees, we will vote your shares FOR that other person.
The Board of Directors does not presently anticipate that any nominee will be
unable to serve.
9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding beneficial
ownership of our common stock as of the record date of April 21, 2003 by (i)
each person who owns beneficially more than 5% of our common stock, (ii) each of
our directors, (iii) each of the officers named in the table under the heading
"Executive Compensation-Summary Compensation Table," for 2002 and (iv) all
directors and executive officers as a group. A total of 30,382,293 shares of
theglobe.com's common stock were issued and outstanding on April 21, 2003.
The amounts and percentage of common stock beneficially owned are reported on
the basis of regulations of the Securities and Exchange Commission ("SEC")
governing the determination of beneficial ownership of securities. Under the
rules of the SEC, a person is deemed to be a "beneficial owner" of a security if
that person has or shares "voting power," which includes the power to vote or to
direct the voting of such security, or "investment power," which includes the
power to dispose of or to direct the disposition of such security. A person is
also deemed to be a beneficial owner of any securities of which that person has
a right to acquire beneficial ownership within 60 days. Under these rules, more
than one person may be deemed a beneficial owner of the same securities and a
person may be deemed to be a beneficial owner of securities as to which such
person has no economic interest. Unless otherwise indicated below, the address
of each person named in the table below is in care of theglobe.com, inc., P.O.
Box 029006, Fort Lauderdale, Florida 33302.
SHARES BENEFICIALLY
OWNED
----------------------
DIRECTORS, NAMED EXECUTIVE OFFICERS AND 5% STOCKHOLDERS NUMBER PERCENT
---------------------------------------------------------- ----------- ---------
Dancing Bear Investments, Inc. (1) . . . . . . . . . . . . 10,355,414 29.4%
Michael S. Egan (2). . . . . . . . . . . . . . . . . . . . 33,926,466 58.4%
Edward A. Cespedes (3) . . . . . . . . . . . . . . . . . . 1,900,680 5.9%
Charles M. Peck (4). . . . . . . . . . . . . . . . . . . . 425,000 1.4%
Robin Segaul Lebowitz(5) . . . . . . . . . . . . . . . . . 510,801 1.7%
E&C Capital Partners LLLP(6) . . . . . . . . . . . . . . . 20,000,000 39.7%
All directors and executive officers as a group (3 people) 36,337,947 60.1%
---------------
(1) Consists of: 4,831,826 shares of our common stock issueable upon exercise of
warrants, subject to certain anti-dilution adjustment mechanisms, at
approximately $0.96 per share. Dancing Bear Investments Inc.'s mailing address
is P.O. Box 029006, Ft. Lauderdale, FL 33302.
(2) Includes the following shares that Mr. Egan is deemed to beneficially own as
the controlling investor: (i) 4,831,826 shares of our common stock issueable
upon exercise of warrants, subject to certain anti-dilution adjustment
mechanisms, at approximately $0.96 per share owned by Dancing Bear Investments,
Inc.; (ii) 333,333 shares of Series F Convertible Preferred Stock, which is
convertible at any time into 16,666,666 shares of common stock, subject to
certain anti-dilution adjustment mechanisms, owned by E&C Capital Partners,
LLLP; and (iii) warrants to acquire 3,333,333 shares of common stock, subject to
certain anti-dilution adjustment mechanisms, owned by E&C Capital Partners,
LLLP. Also includes (i) 2,833,414 shares of our common stock issueable upon
exercise of options that are currently exercisable and 971 shares of our common
stock issueable upon exercise of options that are exercisable within 60 days of
April 21, 2003, (ii) 56,000 shares of our common stock held by certain trusts
for the benefit of Mr. Egan's children, as to which he disclaims beneficial
ownership, and (iii) 14,000 shares of our common stock held by Mr. Egan's wife,
as to which he disclaims beneficial ownership.
(3) Includes 1,896,002 shares of our common stock issueable upon exercise of
options that are currently exercisable and 4,678 shares of our common stock
issueable upon exercise of options that are exercisable within 60 days of April
21, 2003. Excludes 14,320 shares of our common stock issueable upon exercise of
options that will not be exercisable within 60 days of April 21, 2003.
10
(4) Includes 425,000 shares of our common stock issueable upon exercise of
options that are currently exercisable.
(5) Includes 508,769 shares of our common stock issueable upon exercise of
options that are currently exercisable, and 2,032 shares of our common stock
issueable upon exercise of options that are exercisable within 60 days of April
21, 2003. Excludes 23,279 shares of our common stock issueable upon exercise of
options that will not be exercisable within 60 days of April 21, 2003.
(6) Includes 333,333 shares of Series F Convertible Preferred Stock, which is
convertible at any time into 16,666,666 shares of common stock, subject to
certain anti-dilution adjustment mechanisms, and warrants to acquire 3,333,333
shares of common stock, subject to certain anti-dilution adjustment mechanisms.
E&C Capital Partners, LLLP is a privately held investment vehicle controlled by
our Chairman, Michael S. Egan. Our President, Edward A. Cespedes, has a
minority, non-controlling interest in E&C Capital Partners, LLLP. E&C Capital
Partners, LLLP's mailing address is P.O. Box 029006, Ft. Lauderdale, FL 33302.
11
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation for services
in all capacities awarded to, earned by or paid by us to our those persons
serving as the chief executive officer at any time during the last year and our
four other most highly compensated executive officers (collectively, the "Named
Executive Officers"):
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION (1)
----------------
ANNUAL COMPENSATION NUMBER OF
NAME AND ------------------------------ UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OPTIONS (#) COMPENSATION ($)
------------------------------------- ----- ----------- ---------- ---------------- -----------------
Michael S. Egan, 2002 - - 2,507,500 -
Chairman, Chief Executive Officer (2) 2001 - - 7,500 -
2000 - - 10,000 -
Charles M. Peck, 2002 $ 135,417 - 425,000 $ 625,000
Former Chief Executive Officer (3) 2001 $ 325,000 $ 50,000 - -
2000 $ 130,000 - 1,250,000 -
Edward A. Cespedes, 2002 $ 100,000 $ 25,000 1,757,500 $ 41,668
President (4)
Robin Segaul Lebowitz, 2002 $ 58,350 $ 10,000 507,500 -
Chief Financial Officer (5)
---------------
(1) Included in long-term compensation for 2002 are 5,197,000 options granted
during the year at varying exercise prices to the named executive officers.
Details of these grants may be found in the table of Options Grants in 2002 on
page 14. Included in long-term compensation for 2001 are 75,500 options granted
in January 2001 at an exercise price of $0.4062 granted to Stephanie Hague in
accordance with her employment contract and 22,500 options granted to Messrs.
Egan, Krizelman and Paternot in June 2001 at an exercise price of $0.23 in
accordance with the Company's Director Compensation Plan. Included in long-term
compensation for 2000 are 10,000, 20,000, 20,000, 32,500 and 22,500 options
granted in February 2000 at an exercise price of $6.69 per share related to
bonuses earned in 1999 for Messrs. Egan, Krizelman, Paternot, Daniels and Joyce,
respectively.
(2) Mr. Egan became an executive officer in July 1998. We did not pay Mr. Egan a
base salary in 2002, 2001, or 2000.
(3) Mr. Peck became Chief Executive Officer in August 2000. Effective May 31,
2002, Mr. Peck was no longer employed with the Company and no longer serves on
the Company's Board of Directors. Reflecting the terms of his severance
package, $625,000 in cash was paid in full to Mr. Peck on May 31, 2002.
Additionally, options to purchase 425,000 shares of the Company's common stock
at an exercise price of $0.035 per share were granted to Mr. Peck on May 6,
2002, valued at $13,500, also reflecting the terms of his severance package.
These options immediately vested upon grant for a period of ten years.
(4) Mr. Cespedes became President in June 2002. Prior to this, Mr. Cespedes
served as a consultant to the
Company and was paid $41,668 for these services.
(5) Ms. Lebowitz became an officer of the Company in June of 2002 and Chief
Financial Officer in July of 2002.
12
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND 2002 YEAR-END OPTION
VALUES
The following table sets forth for each of the Named Executive Officers (a) the
number of options exercised during 2002, (b) the total number of unexercised
options for common stock (exercisable and unexercisable) held at December 31,
2002, and (c) the value of those options that were in-the-money on December 31,
2002 based on the difference between the closing price of our common stock on
December 31, 2002 and the exercise price of the options on that date.
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-
UNEXERCISED STOCK OPTIONS AT FISCAL MONEY STOCK OPTIONS AT FISCAL
YEAR-END (#) YEAR-END (1)
----------------------------------------- ---------------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE(#) REALIZED EXERCISABLE UN-EXERCISABLE EXERCISABLE UN-EXERCISABLE
--------------------- ------------ ----------- ------------ -------------- ---------------- ---------------
Michael S. Egan - - 2,833,414 11,586 100,019 131
Edward A. Cespedes - - 1,896,002 18,998 70,019 131
Robin Segaul Lebowitz - - 508,769 25,311 20,081 319
Charles M. Peck - - 425,000 - $ 10,625 -
---------------
(1) Value represents closing price of our common stock on December 31, 2002 less
the exercise price of the stock option, multiplied by the number of shares
exercisable or unexercisable, as applicable.
13
OPTION GRANTS IN 2002
PERCENT OF POTENTIAL REALIZABLE VALUE AT
TOTAL ASSUMED RATES OF STOCK PRICE
OPTIONS EXERCISE APPRECIATION FOR OPTION TERM
NUMBER OF SECURITIES GRANTED TO OR BASE (2)
UNDERLYING EMPLOYEES PRICE -------------------------------------
NAME OPTIONS GRANTED (1) IN 2002 ($/SHARE) EXPIRATION DATE 5% 10%
--------------------- --------------------- ----------- ---------- --------------- ------------------ -----------------
Michael S. Egan 7,500 (3) 0.14% $ 0.04 6/21/2012 $ 1,655 $ 2,812
2,500,000 (4) 46.75% $ 0.02 6/13/2012 $ 601,558 $ 987,497
Edward A. Cespedes 7,500 (3) 0.14% $ 0.04 6/21/2012 $ 1,655 $ 2,812
1,750,000 (4) 32.73% $ 0.02 6/13/2012 $ 421,090 $ 691,248
Robin Segaul Lebowitz 7,500 (3) 0.14% $ 0.04 6/21/2012 $ 1,655 $ 2,812
500,000 (4) 9.35% $ 0.02 6/13/2012 $ 120,312 $ 197,499
Charles M. Peck 425,000 (5) 7.95% $ 0.035 6/01/2012 $ 95,890 $ 161,499
---------------
1. In the event of a change in control of theglobe.com, all of these options
become immediately and fully exercisable.
2. These amounts represent assumed rates of appreciation in conformity with SEC
disclosure rules. Actual gains, if any, on stock option exercises are dependent
on future performance of our common stock.
3. These options were granted in June 2002 on the first business day following
the annual meeting of stockholders in accordance with the Company's Director
Compensation Plan. These options become vested and exercisable quarterly over 4
years.
4. These options were granted pursuant to the Non-Qualified Stock Option
Agreement dated August 12, 2002. These stock options vested immediately and have
a life of ten years from date of grant.
5. These options were granted pursuant to the Non-Qualified Stock Option
Agreement dated June 1, 2002. These stock options vested immediately and have a
life of ten years from date of grant.
EMPLOYMENT AGREEMENTS
Former Chief Executive Officer Employment Agreement. On July 14, 2000, we
entered into an employment agreement with our then Chief Executive Officer
("CEO"), Charles M. Peck. The Employment Agreement provided for the following:
- employment as one of our executives;
- an annual base salary of $325,000 with eligibility to receive annual
increases as determined in the sole discretion of the Board of
Directors;
- a discretionary annual cash bonus, which will be awarded at our
Board's discretion and upon the achievement of target performance
objectives presented in our budget (not be less than $25,000 for
2001);
- stock options to purchase 1,250,000 shares of our common stock. The
options were granted at an exercise price of $1.937 per share. These
option terminated three months after Mr. Peck's termination of
employment on May 31, 2002.
- The CEO agreement was for a term expiring on July 14, 2004. The CEO
agreement provided that, in the event of termination by us without
cause, the executive will be entitled to receive from us:
- any earned and unpaid base salary;
14
- reimbursement for any reasonable and necessary monies
advanced or expenses incurred in connection with the
executive's employment; and
- a pro rata portion of the annual bonus for the year of
termination.
The CEO agreement contained a provision that the CEO will not compete with us or
solicit our employees for a period of one year from the date of his termination
of employment.
Effective May 31, 2002, we terminated the employment agreement with our former
Chief Executive Officer, Charles M. Peck. Reflecting the terms of his severance
package, $625,000 in cash was paid in full to Mr. Peck on May 31, 2002.
Additionally, options to purchase 425,000 shares of the Company's common stock
at an exercise price of $0.035 per share were granted to Mr. Peck on May 6,
2002, valued at $13,500, also reflecting the terms of his severance package.
These options immediately vested upon grant and are exercisable for a period of
ten years.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
Michael Egan, theglobe.com's Chairman, is also currently Chairman of ANC Rental
Corporation and was Chief Executive Officer of ANC Rental Corporation from late
2000 until April 4, 2002. In November 2001, ANC Rental Corporation filed
voluntary petitions for relief under chapter 11 or title 11 of the United States
Code in the United States Bankruptcy Court for the District of Delaware (Case
No. 01-11200).
Edward Cespedes, a Director of theglobe, was also a Director of Dr. Koop
Lifecare Corporation from January 2001 to December 2001. In December 2001, Dr.
Koop Lifecare Corporation filed petitions seeking relief under Chapter 7 of the
United States Bankruptcy Code.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Arrangements with Entities Controlled by Various Directors and Officers. On
November 14, 2002, E & C Capital Partners, a privately held investment holding
company controlled by Michael S. Egan, our Chairman and CEO and a major
shareholder, and Edward A. Cespedes, our President and a Director, entered into
a non-binding letter of intent with theglobe.com to provide $500,000 of new
financing via the purchase of shares of a new Series F Preferred Stock of
theglobe.com. On March 28, 2003, the parties signed a Preferred Stock Purchase
Agreement and other related documentation pertaining to the investment and
closed on the investment. Pursuant to the Preferred Stock Purchase Agreement, E
& C Capital Partners received 333,333 shares of Series F Preferred Stock
convertible into shares of the Company's Common Stock at a price of $0.03 per
share. The conversion price is subject to adjustment upon the occurrence of
certain events, including downward adjustment on a weighted-average basis in the
event the Company should issue securities at a purchase price below $0.03 per
share. If fully converted, and without regard to the anti-dilutive adjustment
mechanisms applicable to the Series F Preferred Stock, an aggregate of
approximately 16.7 million shares of Common Stock could be issued. The Series F
Preferred Stock has a liquidation preference of $1.50 per share, will pay a
dividend at the rate of 8% per annum and entitles the holder to vote on an "as
converted" basis with the holders of Common Stock. In addition, as part of the
$500,000 investment, E & C Capital Partners received warrants to purchase
approximately 3.3 million shares of theglobe.com Common Stock at an exercise
price of $0.125 per share. The warrant is exercisable at any time on or before
March 28, 2013. E & C Capital Partners is entitled to certain demand
registration rights in connection with its investment.
Concurrently with the closing of the preferred stock investment, certain
affiliates of Michael S. Egan and Edward A. Cespedes entered into a non-binding
letter of intent to loan up to $1 million to the Company pursuant to a
convertible secured loan facility. The loan facility would be convertible into
shares of the Company's common stock at the rate of $.09 per share, which if
fully funded and converted, would result in the issuance of approximately 11.1
million shares. In addition, assuming the loan is fully funded, it is
anticipated that the investor group would be issued a warrant to acquire
approximately 2.2 million shares of theglobe.com Common Stock at an exercise
price of $.15 per share. The convertible debt financing is subject to a number
of closing conditions, including execution of definitive documentation,
satisfactory resolution of certain Company liabilities and other tax and
15
business considerations. In addition, it is contemplated that the loan facility
will require that certain performance criteria be achieved by the company as a
condition to all or part of the funding. The financing is also subject to
completion of a loan facility and related documentation satisfactory to the
parties. If consummated, the convertible debt financing will result in
substantial dilution of the number of securities of theglobe.com either issued
and outstanding or obtainable upon conversion of the debt or exercise of the
warrant. There can be no assurance, if and when, the financing will be
consummated.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934 requires our officers
and directors, and persons who own more than ten percent (10%) of a registered
class of our equity securities, to file certain reports regarding ownership of,
and transactions in, our securities with the SEC and with The NASDAQ Stock
Market, Inc. Such officers, directors, and 10% stockholders are also required to
furnish theglobe with copies of all Section 16(a) forms that they file.
Based solely on our review of copies of Forms 3 and 4 and any amendments
furnished to us pursuant to Rule 16a-3(e) and Forms 5 and any amendments
furnished to us with respect to the 2002 fiscal year, and any written
representations referred to in Item 405(b)(2)(i) of Regulation S-K stating that
no Forms 5 were required, we believe that, during the 2002 fiscal year, our
officers and directors have complied with all Section 16(a) applicable filing
requirements, except the initial filing of Form 3 by Robin Segaul Lebowitz was
filed late.
16
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee of the board of directors operates under a written charter
adopted by the board of directors. The members of the committee are Michael S.
Egan, Edward A. Cespedes, and Robin Segaul Lebowitz. Messrs. Egan and Cespedes
replaced Messrs. Krizelman and Halperin effective June 20, 2002. In as much as
the Board does not currently have any non-employee directors, and all audit
committee members are also employees of the Company, none of the current
committee members is considered "independent" within the meaning of applicable
NASD rules.
Management is responsible for the company's internal controls and the financial
reporting process. The independent accountants are responsible for performing an
independent audit of the company's consolidated financial statements in
accordance with generally accepted auditing standards and to issue a report
thereon. The committee's responsibility is to monitor and oversee these
processes.
In this context, the audit committee has met and held discussions with
management and the independent accountants. Management represented to the
committee that the company's consolidated financial statements were prepared in
accordance with generally accepted accounting principles, and the audit
committee has reviewed and discussed the consolidated financial statements with
management and the independent accountants. The committee discussed with the
independent accountants matters required to be discussed by Statement of
Auditing Standards No. 61 (Communication with Audit Committees).
The company's independent accountants also provided to the audit committee the
written disclosures required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and the audit committee
discussed with the independent accountants that firm's independence.
Based upon the audit committee's discussion with management and the independent
accountants and the audit committee's review of the representation of management
and the report of the independent accountants to the committee, the audit
committee recommended that the board of directors include the audited
consolidated financial statements in the company's annual report on Form 10-K
for the year ended December 31, 2002 filed with the Securities and Exchange
Commission.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Michael S. Egan
Edward A. Cespedes
Robin Segaul Lebowitz
17
APPOINTMENT OF INDEPENDENT AUDITORS
On August 8, 2002, the Board of Directors, upon the recommendation of the audit
committee, dismissed our independent accountants KPMG LLP ("KPMG") and appointed
Rachlin Cohen & Holtz LLP ("Rachlin Cohen") Fort Lauderdale, Florida as the firm
of independent public accountants to audit our books and accounts for the fiscal
year ended December 31, 2002. There will be a representative from Rachlin Cohen
in attendance at the annual meeting.
The audit reports issued by KPMG on our consolidated financial statements as of
and for the years ended December 31, 2001 and December 31, 2000, did not contain
any adverse opinion or a disclaimer of opinion, and were not qualified or
modified, as to uncertainty, audit scope or accounting principles, except as
follows:
KPMG's report on the consolidated financial statements of theglobe.com, inc. and
subsidiaries as of and for the years ended December 31, 2001 and 2000, contained
a separate paragraph stating "the Company has suffered recurring losses from
operations since inception that raise substantial doubt about its ability to
continue as a going concern. Management's plans in regard to this matter are
also described in Note 1. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty."
During our two most recent fiscal years ended December 31, 2001 and December 31,
2000, and the subsequent interim period from January 1, 2002 through our
dismissal of KPMG on August 8, 2002, there were no disagreements with KPMG on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to KPMG's satisfaction, would have caused KPMG to make reference to the subject
matter of the disagreement in connection with its reports on our consolidated
financial statements for such years; and there were no reportable events as
defined in Item 304(a)(1)(v) of Regulation S-K.
The Company furnished KPMG with a copy of its Report on Form 8-K relating to the
foregoing change in accountants and requested KPMG to furnish it with a letter
addressed to the Securities and Exchange Commission ("Commission") stating
whether it agrees with the statements set forth above. A copy of KPMG's letter
to the Commission dated August 13, 2002 was filed as an exhibit on Form 8-K on
August 13, 2002.
During the fiscal years ended December 31, 2001 and December 31, 2000 and
through August 8, 2002, we did not consult with Rachlin Cohen with respect to
the application of accounting principles to a specified transaction, or the type
of audit opinion that might be rendered on our consolidated financial
statements, or any other matters or events described in Item 304(a)(2)(i) and
(ii) of Regulation S-K.
AUDIT FEES. The aggregate fees billed by Rachlin Cohen for professional services
rendered for the audit of our annual financial statements for fiscal 2002 and
the reviews of the financial statements included in our Forms 10-Q and 10K was
$133,000. The aggregate fees billed by KPMG for professional services rendered
for the reviews of the financial statements included in our Forms 10-Q for
fiscal 2002 was $30,850.
18
ALL OTHER FEES.
The Company paid the following fees for services by KPMG during fiscal 2002:
Tax return preparation and tax advisory services $39,000
Professional services rendered in connection with consents to use 1999-2001
audit reports in 10-K and S-8 $23,600
The Company paid the following fees for services by Rachlin Cohen during fiscal
2002:
Tax return preparation and tax advisory services $10,700
The audit committee reviewed these services and determined that the nature of
these engagements did not impair auditor independence.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES. We have paid no
fees to KPMG or Rachlin Cohen for the operation of our information system
network or for the design or implementation of a system that aggregates source
data for, or generates information significant to, our financial statements.
19
STOCKHOLDER PROPOSALS FOR THE
2004 ANNUAL MEETING
We welcome comments and suggestions from our stockholders. Here are the ways a
stockholder may present a proposal for consideration by the other stockholders
at our 2004 Annual Meeting:
In our Proxy Statement. If a stockholder wants to submit a proposal for
inclusion in our proxy statement and form of proxy under Rule 14a-8 under the
Securities Exchange Act of 1934 (the "Exchange Act") for the 2004 Annual Meeting
of Stockholders, we must receive the proposal in writing on or before 5 p.m.,
Eastern time, January 20, 2004.
At the Annual Meeting. Under our By-Laws, if a stockholder wishes to nominate a
director or bring other business before the stockholders at the 2004 Annual
Meeting, we must receive the stockholder's written notice not less than 60 days
nor more than 90 days prior to the date of the annual meeting, unless we give
our stockholders less than 70 days' notice of the date of our 2004 Annual
Meeting. If we provide less than 70 days' notice, then we must receive the
stockholder's written notice by the close of business on the 10th day after we
provide notice of the date of the 2004 Annual Meeting. The notice must contain
the specific information required in our By-Laws. A copy of our By-Laws may be
obtained by writing to the Secretary. If we receive a stockholder's proposal
within the time periods required under our By-Laws, we may choose, but are not
required, to include it in our proxy statement. If we do, we may tell the other
stockholders what we think of the proposal, and how we intend to use our
discretionary authority to vote on the proposal.
Delivering a Separate Proxy Statement. We will not use our discretionary voting
authority if a stockholder submits a proposal within the time period required
under our By-Laws, and also provides us with a written statement that the
stockholder intends to deliver his/her own proxy statement and form of proxy to
our stockholders. Persons who wish to deliver their own proxy statement and form
of proxy should consult the rules and regulations of the SEC.
All proposals should be made in writing and sent via registered, certified or
express mail, to our executive offices, 110 East Broward Boulevard, Suite 1400,
Fort Lauderdale, Florida 33301, Attention: Robin Segaul Lebowitz, Secretary.
20
OTHER BUSINESS
The Board of Directors is not aware of any other matters to come before the
Annual Meeting. If any matter not mentioned in this proxy statement is properly
brought before the meeting, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies with respect to those matters in
accordance with their judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Michael S. Egan
-----------------------
Michael S. Egan
Chief Executive Officer
Fort Lauderdale, Florida
April 30, 2003
21
ANNUAL MEETING OF STOCKHOLDERS OF
THEGLOBE.COM, INC.
JUNE 20, 2003
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible.
Please detach and mail in the envelope provided.
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR MATTER (1) LISTED BELOW, TO COME
BEFORE THE ANNUAL MEETING.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
--------------------------------------------------------------------------------
1. Election of three (3) directors, to serve until the 2004 Annual Meeting of
Stockholders.
NOMINEES
[ ] FOR ALL NOMINEES O Michael S. Egan
[ ] WITHOUT AUTHORITY FOR ALL NOMOINEES O Edward A. Cespedes
[ ] FOR ALL EXCEPT (See instructions below) O Robin Segaul Lebowitz
2. Upon any and all other business that may properly come before the Annual
Meeting.
THIS PROXY, WHICH IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS, WILL BE
VOTED FOR THE MATTERS DESCRIBED IN PARAGRAPHS (1) AND (2), UNLESS THE
SHAREHOLDER SPECIFIES OTHERWISE, IN WHICH CASE IT WILL BE VOTED AS SPECIFIED.
INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark
"FOR ALL EXCEPT" and fill in the circle next to each nominee you
wish to withhold, as shown here: [x]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method. [ ]
--------------------------------------------------------------------------------
Signature of Stockholder Date:
------------------------------- -----------------
Signature of Stockholder Date:
------------------------------- -----------------
NOTE: This proxy must be signed exactly as the name appears hereon. When shares
are held jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as
such. If the signer is a corporation, please sign full corporate name by
duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.
PROXY PROXY
----- -----
THEGLOBE.COM, INC.
(SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned holder of common stock of theglobe.com, inc., revoking all
proxies previously given, hereby constitutes and appoints Michael S. Egan, as
Proxy, with full power of substitution and resubstitution, on behalf and in the
name of the undersigned, to vote all of the undersigned's shares of the said
stock, according to the number of votes and with all the powers the undersigned
would possess if personally present, at the Annual Meeting of Stockholders of
theglobe.com, inc., to be held at the Hyatt Regency Pier Sixty-Six, 2301
Southeast 17th Street, Fort Lauderdale, Florida 33316, Friday, June 20, 2003 at
10:00 a.m., local time, and at any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of the Notice of Meeting and
Proxy Statement relating to the meeting and hereby revokes any proxy or proxies
previously given.
EACH PROPERLY EXECUTED PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS MADE ON THE REVERSE SIDE OF THIS PROXY AND IN THE DISCRETION OF
THE PROXIES ON ANY OTHER MATTER WHICH MAY PROPERLY COME BEFORE THE MEETING.
WHERE NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED FOR ALL LISTED NOMINEES
TO SERVE AS DIRECTORS AND FOR PROPOSAL 2.
PLEASE MARK, DATE AND SIGN THIS PROXY ON THE REVERSE SIDE