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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:
[ ] 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
INTERNET CAPITAL GROUP, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number,
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(1) Amount previously paid:
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(4) Date filed:
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[INTERNET CAPITAL GROUP LOGO]
INTERNET CAPITAL GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
BUILDING 600
435 DEVON PARK DRIVE
WAYNE, PA 19087
PHONE: (610) 230-4300
FAX: (610) 989-0112
Dear Internet Capital Group Stockholders:
You are invited to attend the Internet Capital Group, Inc. 2001 Annual Meeting
of Stockholders.
Date: May 30, 2001
Time: 10:00 a.m.
Place: The Desmond Great Valley
One Liberty Boulevard
Malvern, Pennsylvania 19355
Only stockholders who owned stock at the close of business on April 10, 2001 can
vote at this meeting or any adjournments that may take place.
The purposes of the Annual Meeting are:
(1) to elect two Class II directors, both for a term of three years and
until their respective successors have been elected and qualified;
(2) to ratify the appointment of KPMG LLP as the Company's independent
auditors for the fiscal year ending December 31, 2001; and
(3) to transact any other business that may properly come before the
meeting.
For those of you who are unable to attend the meeting in person, we invite you
to listen over the Internet through our website at
http://www.internetcapital.com/investors/.
We consider your vote important and encourage you to vote as soon as possible.
By Order of the Board of Directors
/s/ Henry N. Nassau
Henry N. Nassau April 27, 2001
Secretary
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PROXY STATEMENT
This Proxy Statement and the accompanying proxy card are being mailed on or
about April 27, 2001 to owners of shares of Internet Capital Group, Inc. (the
"Company") Common Stock in connection with the solicitation of proxies by the
Board of Directors for the 2001 Annual Meeting of Stockholders. This proxy
procedure is necessary to permit all Common Stock stockholders, many of whom
live throughout the United States of America and in foreign countries and are
unable to attend the Annual Meeting, to vote. The Board of Directors encourages
you to read this document thoroughly and to take this opportunity to vote on the
matters to be decided at the Annual Meeting.
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CONTENTS
PAGE
----
Voting Procedures........................................... 1
Corporate Governance........................................ 2
Election of Directors (Item 1 on Proxy Card)................ 3
Ratification of Appointment of Independent Auditors (Item 2
on Proxy Card)............................................ 4
Submission of Stockholder Proposals and Director
Nominations............................................... 5
Audit Committee............................................. 6
Executive Compensation...................................... 7
Compensation Tables......................................... 9
Other Forms of Compensation................................. 11
Stock Performance Graph..................................... 13
Security Ownership of Certain Beneficial Owners and
Directors and Officers.................................... 14
Certain Relationships and Related Transactions.............. 15
Executive Officers.......................................... 17
Section 16(a) Beneficial Ownership Reporting Compliance..... 18
Separation of Employment Agreement.......................... 18
Compensation Committee Interlocks and Insider
Participation............................................. 19
Other Business.............................................. 19
Exhibit A -- Audit Committee Charter
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INTERNET CAPITAL GROUP, INC.
435 DEVON PARK DRIVE
BUILDING 600
WAYNE, PENNSYLVANIA 19087
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VOTING PROCEDURES
YOUR VOTE IS VERY IMPORTANT. Your shares can only be voted at the Annual
Meeting if you are present or represented by proxy. Whether or not you plan to
attend the Annual Meeting, you are encouraged to vote by proxy to assure that
your shares will be represented. You may revoke this proxy at any time before it
is voted by written notice to the Secretary of the Company, by submission of a
proxy bearing a later date or by casting a ballot at the Annual Meeting.
Properly executed proxies that are received before the Annual Meeting's
adjournment will be voted in accordance with the directions provided. If no
directions are given, your shares will be voted by one of the individuals named
on your proxy card as recommended by the Board of Directors. If you wish to give
a proxy to someone other than those named on the proxy card, you should cross
out those names and insert the name(s) of the person(s), not more than four, to
whom you wish to give your proxy.
WHO CAN VOTE? Stockholders as of the close of business on April 10, 2001 are
entitled to vote. On that day, about 278,492,130 shares of Common Stock were
outstanding and eligible to vote. Each share is entitled to one vote on each
matter presented at the Annual Meeting. A list of stockholders eligible to vote
will be available at the offices of Dechert, 4000 Bell Atlantic Tower, 1717 Arch
Street, Philadelphia, Pennsylvania beginning May 17, 2001. Stockholders may
examine this list during normal business hours for any purpose relating to the
Annual Meeting.
HOW DOES THE BOARD RECOMMEND I VOTE? The board recommends a vote FOR each board
nominee and FOR ratification of the appointment of KPMG LLP as the Company's
independent auditors.
WHAT SHARES ARE INCLUDED IN THE PROXY CARD? Each proxy card you receive
represents all the shares of Common Stock registered to you in that particular
account. You may receive more than one proxy card if you hold shares which are
either registered differently or in more than one account. Each share of Common
Stock that you own entitles you to one vote.
HOW DO I VOTE? There are three ways to vote: by telephone; via the Internet; or
by returning the proxy card. To vote by telephone or via the Internet, follow
the instructions set forth on each proxy card you receive. To vote by mail, sign
and date each proxy card you receive, mark the boxes indicating how you wish to
vote, and return the proxy card in the pre-paid envelope provided. Do not return
the proxy card if you vote via the Internet or by telephone.
HOW ARE VOTES COUNTED? The Annual Meeting will be held if a quorum, consisting
of a majority of the outstanding shares of Common Stock entitled to vote, is
represented. Broker non-votes, votes withheld and abstentions will be counted
for purposes of determining whether a quorum has been reached. When nominees,
such as banks and brokers, holding shares on behalf of beneficial owners do not
receive voting instructions from the beneficial owners by the tenth day before
the Annual Meeting, the nominees may vote those shares only on matters deemed
routine by Nasdaq, such as Items 1 and 2 in the Notice of Annual Meeting of
Stockholders. On non-routine matters, nominees cannot vote and there is a
so-called "broker non-vote" on that matter. Because Item 2 must be approved by a
majority of the votes cast, abstentions will have no effect on this proposal.
Because directors are elected by a plurality of the votes cast, abstentions will
have no effect on the election of directors.
WHO WILL COUNT THE VOTE? The Company's Transfer Agent and Registrar, Mellon
Investor Services LLC, will tally the vote.
WHO IS SOLICITING THIS PROXY? Solicitation of proxies is made on behalf of the
Board of Directors of the Company. The Company will pay the cost of preparing,
assembling and mailing the notice of Annual Meeting, proxy statement and proxy
card. The Company has also hired D.F. King & Co., Inc., a proxy solicitation
firm, for a fee of $9,000 plus expenses. In addition to the use of mail, proxies
may be solicited by directors, officers and regular employees of the Company,
without additional compensation, in person or by telephone or other electronic
means. The Company will reimburse brokerage houses and other nominees for their
expenses in forwarding proxy material to beneficial owners of the Company's
stock.
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WHAT IF I CAN'T ATTEND THE MEETING? If you are unable to attend the meeting in
person, we invite you to listen to the meeting over the Internet through our
website at http://www.internetcapital.com/investors/. Please go to our website
approximately fifteen minutes early to register and download any necessary audio
software. If you do not attend the meeting in person you must vote your shares
by proxy, via the Internet or by telephone if you intend to vote.
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CORPORATE GOVERNANCE
In accordance with the Delaware General Corporation Law and the Company's
Restated Certificate of Incorporation and Amended and Restated By-Laws (the
"By-Laws"), the Company's business, property and affairs are managed under the
direction of the Board of Directors. Although directors are not involved in the
day-to-day operating details, they are kept informed of the Company's business
through written reports and documents provided to them regularly, as well as by
operating, financial and other reports presented by the officers of the Company
at meetings of the Board of Directors and committees of the Board of Directors.
MEETINGS OF THE BOARD OF DIRECTORS. The Board of Directors held 13 meetings in
2000. Each of the incumbent directors, other than Warren V. Musser, attended at
least 75% of the Board of Directors and committee meetings to which the director
was assigned.
COMMITTEES OF THE BOARD OF DIRECTORS. The Board of Directors has established
three standing committees.
Acquisition Committee -- reviews and approves any acquisition where (a) the
consideration for that transaction exceeds $5 million but is equal to or less
than $15 million, or (b) the aggregate consideration for transactions funding in
the calendar quarter with consideration equal to or less than $15 million has
exceeded $25 million but is equal to or less than $60 million. The Acquisition
Committee, formed in December 2000, did not hold any meetings during 2000. The
current members of the Acquisition Committee are Messrs. Buckley, Gerrity and
Keith.
Audit Committee -- monitors the Company's compliance with appropriate legal and
regulatory standards and requirements. The Audit Committee annually recommends
independent auditors for appointment by the Board and ratification by
stockholders, reviews the performance of the independent auditors and the terms
of their engagement, and exercises oversight of their activities. It serves as
an independent and objective party to monitor the Company's financial reporting
process and internal control systems, along with reviewing and appraising the
audit efforts of the Company's independent auditors and internal auditors. It
also provides an open avenue of communication among the independent auditors,
financial and senior management, the internal auditors and the Board. The Audit
Committee Charter is attached to this proxy statement as Exhibit A. The Audit
Committee held four (4) meetings during 2000. The current members of the Audit
Committee are Messrs. Berkman, Gerrity and Musser. Messrs. Berkman and Gerrity
are "independent" as defined by applicable Nasdaq rules; however, Mr. Musser is
not independent. The Audit Committee will be composed solely of independent
directors prior to June 14, 2001.
Compensation Committee -- reviews the total compensation package for all
executive officers, including, when appropriate, the grant of stock options
under the Company's stock option plan and other long-term incentives under any
other Company program. The Compensation Committee also administers the Company's
Membership Profit Interest Plan, 1999 Equity Compensation Plan and Long-Term
Incentive Plan. The Compensation Committee annually reviews the total
compensation package of each executive officer and approves the general
compensation policy and practice for all other employees. The Committee also
evaluates the performance of the Chief Executive Officer against pre-established
criteria and it reviews with the Chief Executive Officer the performance of the
executive officers who report to the Chief Executive Officer. The Compensation
Committee held 12 meetings during 2000. The current members of the Compensation
Committee are Messrs. Gerrity, Keith and Solvik.
DIRECTOR COMPENSATION. Directors do not receive cash compensation for their
services as directors;
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however, they are reimbursed for the expenses they incur in attending meetings
of the Board of Directors or board committees. Non-employee directors of the
Company also are awarded options to purchase Common Stock under the 1999 Equity
Compensation Plan.
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ELECTION OF DIRECTORS
ITEM 1 ON PROXY CARD
The Company's By-Laws provide that the Company's business shall be managed by a
Board of Directors of not less than five and not more than nine directors, with
the number of directors to be fixed by the Board of Directors from time to time.
The By-Laws also divide the Company's Board of Directors into three classes:
Class I, Class II and Class III, each class being as nearly equal in number as
possible. The directors in each class serve terms of three years and until their
respective successors have been elected and have qualified. There are currently
two Class I directors, two Class II directors and three Class III directors.
The term of office of one class of directors expires each year in rotation so
that one class is elected at each annual meeting of stockholders for a three
year term. The term of the two Class II directors, Robert E. Keith, Jr. and
Peter A. Solvik, will expire at the Annual Meeting. Mr. Solvik, who has been a
director since May 1999, has decided to retire from the Board of Directors at
the time of the meeting and therefore will not stand for re-election. In order
that each class of directors be comprised of an equal number of directors, Dr.
Thomas P. Gerrity, an incumbent Class III Director, has resigned as a Class III
Director effective the time of the Annual Meeting and is being nominated as a
Class II Director. The other four (4) directors will remain in office for the
remainder of their respective terms, as indicated below.
Director candidates are nominated by the Board of Directors. Stockholders are
also entitled to nominate director candidates for the Board of Directors in
accordance with the procedures set forth in the By-Laws.
At the Annual Meeting, two Class II directors are to be elected. Both of the
director nominees are currently directors of the Company. Both nominees have
consented to being named as nominees for directors of the Company and have
agreed to serve if elected. The directors will be elected to serve for three
year terms and until their successors have been elected and have qualified. If
either or both of the nominees should become unavailable to serve at the time of
the Annual Meeting, the shares represented by proxy will be voted for any
remaining nominee and any substitute nominee(s) designated by the Board of
Directors. Director elections are determined by a plurality of the votes cast.
Set forth below is information regarding each nominee for Class II director and
each Class I and Class III director, each of whose term will continue after the
Annual Meeting.
NOMINEES FOR CLASS II DIRECTORS
Dr. Thomas P. Gerrity. Dr. Gerrity has served as a director since December
1998. Dr. Gerrity also served as the Dean of The Wharton School of the
University of Pennsylvania from July 1990 to June 1999. He is currently
Professor and Director of the Wharton School e-Business Initiative. Dr. Gerrity
also serves as a director of CVS Corporation, Fannie Mae, ICG Commerce Holdings,
Inc., Investor Force Holdings, Inc., Knight-Ridder, Inc., Reliance Group
Holdings, Inc., and Sunoco, Inc. and as a trustee of MAS Funds. Age: 59.
Robert E. Keith, Jr. Mr. Keith has served as the Chairman of the Board of
Directors since the Company's inception in March 1996. Mr. Keith was appointed
Vice Chairman of the Board of Safeguard Scientifics, Inc. in February 1999 and
became a member of the Office of the Chief Executive of Safeguard Scientifics,
Inc. in April 2001. Mr. Keith has been a Managing Director of TL Ventures and
its predecessor funds since 1988. He has served as President since 1991, and as
Chief Executive Officer since 1996, of Technology Leaders Management, Inc., a
private equity capital management company, a subsidiary of Safeguard
Scientifics, Inc., and following its formation in 1996, Mr. Keith has served as
President and Chief Executive Officer of TL Ventures LLC, also a private equity
capital management
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company. Mr. Keith serves as a director of Aberdeen Group, Inc., American
Education Centers, Inc., Cambridge Technology Partners (Massachusetts), Inc.,
Circles Company Associates, Inc., European Webgroup, Naviant, Inc., SunSource,
Inc., Surgency, Inc., and Transportation.com LLC. Age: 59
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR BOTH OF THE LISTED NOMINEES.
INCUMBENT CLASS I DIRECTORS -- TO CONTINUE IN OFFICE FOR TERMS EXPIRING IN 2003
David J. Berkman. Mr. Berkman joined the Board of Directors on January 1, 2001.
He is the Managing Partner of Liberty Associated Partners, LP, a venture capital
firm primarily engaged in the telecommunications, technology, and internet
market segments. Formerly, Mr. Berkman was the Executive Vice President and
Director of the Associated Group, Inc., a publicly traded firm recently sold to
AT&T Corp. and Liberty Media Corp. Currently, he is a member of the Board of
Directors of Clearwire, Inc., a wireless data carrier, Entercom, Inc., the
fourth largest US Radio Broadcaster, and V-Span, Inc., a video conferencing
service provider. Mr. Berkman also serves on the Board of Trustees of the
Philadelphia Regional Performing Arts Center and The Franklin Institute. Age 39.
Warren V. Musser. Mr. Musser has served as a director of the Company since
March 2000. Mr. Musser served as Chairman and Chief Executive Officer of
Safeguard Scientifics, Inc. from 1953 until April 2001. He is currently the
non-executive Chairman of the Board of Safeguard Scientifics, Inc. Mr. Musser is
Chairman of the Board of Cambridge Technology Partners (Massachusetts), Inc. He
is also a director of CompuCom Systems, Inc. and TyCom, Ltd. and a trustee of
Brandywine Realty Trust. Mr. Musser serves on a variety of civic, educational
and charitable boards of directors, and serves as Vice President/ Development,
Cradle of Liberty Council, Boy Scouts of America, Vice Chairman of The Eastern
Technology Council, and Chairman of the Pennsylvania Partnership on Economic
Education. Age 74.
INCUMBENT CLASS III DIRECTORS -- TO CONTINUE IN OFFICE FOR TERMS EXPIRING IN
2002
Walter W. Buckley, III. Mr. Buckley is a co-founder and has served as President
and Chief Executive Officer and as a director of the Company since March 1996.
Prior to co-founding the Company, Mr. Buckley worked for Safeguard Scientifics,
Inc. as Vice President of Acquisitions from 1991 to February 1996. Mr. Buckley
directed many of Safeguard Scientifics' investments and was responsible for
developing and executing Safeguard Scientifics' multimedia and Internet
investment strategies. Mr. Buckley serves as a director of ICG Commerce
Holdings, Inc., Safeguard Scientifics, Inc., VerticalNet, Inc. and XL Vision,
Inc. Age: 41.
Kenneth A. Fox. Mr. Fox is a co-founder and has served as a Managing Director
since the Company's inception in March 1996. Mr. Fox has also served as a
director since February 1999. Prior to co-founding the Company, Mr. Fox served
as Director of West Coast Operations for Safeguard Scientifics, Inc. and
Technology Leaders II, L.P., a venture capital partnership, from 1994 to 1996.
In this capacity, Mr. Fox led the development of and managed the West coast
operations for these companies. Mr. Fox serves as a director of eCredit.com,
Inc., Onvia.com, Inc. and RightWorks Corporation. Age: 30.
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RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
ITEM 2 ON PROXY CARD
Subject to stockholder ratification, the Board of Directors, acting upon the
recommendation of the Audit Committee, has reappointed the firm of KPMG LLP,
certified public accountants, as independent auditors to examine the financial
statements of the Company for 2001. Ratification requires the affirmative vote
of a majority of eligible shares present at the Annual Meeting, in person or by
proxy, and voting thereon. Unless otherwise specified by the stockholders, the
shares of stock represented by the proxy will be voted for ratification of the
appointment of KPMG LLP as independent auditors to audit and report upon the
financial statements of the Company for fiscal year 2001. If this appointment is
not ratified by the stockholders, the Audit Committee may reconsider its
recommendation.
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One or more representatives of KPMG LLP are expected to be at the Annual
Meeting. They will have an opportunity to make a statement and will be available
to respond to appropriate questions.
AUDIT FEES
The aggregate fees billed by KPMG LLP for professional services rendered for the
audit of the Company's annual financial statements for the fiscal year ended
December 31, 2000 and the reviews of the financial statements included in the
Company's Forms 10-Q for that fiscal year were $542,100. In addition, aggregate
fees billed by KPMG LLP for similar services to the Company's majority-owned
subsidiaries for the fiscal year ended December 31, 2000 were $371,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The aggregate fees billed by KPMG LLP for financial information systems design
and implementation for the fiscal year ended December 31, 2000 were $78,600. In
addition, aggregate fees billed by KPMG LLP for similar services to the
Company's majority-owned subsidiaries for the fiscal year ended December 31,
2000 were $151,000.
ALL OTHER FEES
For the fiscal year ended December 31, 2000, KPMG LLP billed $1,219,500 in
aggregate fees for professional services rendered to the Company other than the
audit and financial information systems design and implementation fees noted
above. These fees were generally for services related to business acquisitions,
accounting consultations and tax planning. In addition, aggregate fees billed by
KPMG LLP for professional services rendered to the Company's majority-owned
subsidiaries other than the audit and financial information systems design and
implementation fees noted above for the fiscal year ended December 31, 2000 were
$1,499,400. These fees were generally for services related to business
acquisitions, accounting consultations, registration statements and tax planning
and compliance.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION.
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SUBMISSION OF STOCKHOLDER PROPOSALS AND
DIRECTOR NOMINATIONS
Under the rules of the Securities and Exchange Commission, stockholders wishing
to have a proposal included in the Company's Proxy Statement for the 2002 Annual
Meeting of Stockholders must submit the proposal so that the Secretary of the
Company receives it no later than December 27, 2001. The Securities and Exchange
Commission rules set forth standards as to what stockholder proposals are
required to be included in a proxy statement. Under the Company's By-Laws,
certain procedures must be followed for a stockholder to nominate persons as
directors or to introduce a proposal at an annual meeting. A stockholder wishing
to make a nomination for election to the Board of Directors must submit written
notice of the stockholder's intention to make such nomination so that the
Chairman of the Board receives it not less than 90 days nor more than 120 days
prior to the annual meeting at which such nomination is to occur. A stockholder
wishing to have a proposal presented at an annual meeting must submit the
proposal so that the Secretary of the Company receives it not less than 90 days
nor more than 120 days prior to the first anniversary of the preceding year's
annual meeting; provided; however, that in the event that the date of the
meeting is advanced by more than 20 days from such anniversary date, notice by
the stockholder must be received no later than the close of business on the 10th
day following the earlier of the date on which notice of the date of the meeting
was mailed or public disclosure was made. The Company's By-Laws set forth
certain informational requirements for stockholders' nominations of directors
and proposals.
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AUDIT COMMITTEE
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
ON THE FINANCIAL STATEMENTS OF THE COMPANY
AND THE INDEPENDENCE OF THE COMPANY'S AUDITORS
REPORT OF THE AUDIT COMMITTEE TO THE FULL BOARD OF DIRECTORS OF INTERNET CAPITAL
GROUP, INC.
The Audit Committee oversees the Company's financial reporting process on behalf
of the Company's Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process including the systems of
internal controls.
In fulfilling its oversight responsibilities, the Audit Committee reviewed the
audited financial statements in the 2000 Annual Report with management,
including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments and the
clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent auditors, who are responsible
for expressing an opinion on the conformity of those financial statements with
accounting principles generally accepted in the United States of America, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles. The Audit Committee discussed with the Company's
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61. The Audit Committee received the written disclosures
and the letter from the Company's independent auditors required by Independence
Standards Board Standard No. 1. In addition, the Audit Committee discussed with
the independent auditors their independence, including the compatibility of
nonaudit services with the auditor's independence.
The Audit Committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The Audit Committee met with the
independent auditors, with and without management present, to discuss the
results of their examination, their evaluation of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
Audit Committee held four (4) meetings during the fiscal year 2000.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended that the audited financial statements be included in the
Annual Report on Form 10-K for fiscal year ended December 31, 2000 for filing
with the Securities and Exchange Commission. The Audit Committee has also
recommended, subject to stockholder approval, the selection of the Company's
independent auditors.
AUDIT COMMITTEE
Dr. Thomas P. Gerrity, Chairman
David J. Berkman
Warren V. Musser
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EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
Role of Committee. The Compensation Committee establishes, oversees and directs
the Company's executive compensation programs and policies and administers the
Company's stock option and long-term incentive plans. The Compensation Committee
seeks to align executive compensation with Company objectives and strategies,
business financial performance and enhanced stockholder value. The Compensation
Committee consists of three non-employee directors.
The Compensation Committee regularly reviews and approves generally all
compensation and fringe benefit programs of the Company and also reviews and
determines the actual compensation of the Company's executive officers, as well
as all stock option grants and cash incentive awards to all key employees. The
Compensation Committee also reviews and makes recommendations to the Board of
Directors on policies and programs for the development of management personnel
and management structure and organization. The Compensation Committee reviews
and administers the Company's Membership Profit Interest Plan, 1999 Equity
Compensation Plan and 1999 Long-Term Incentive Plan.
The Compensation Committee's objectives include (i) attracting and retaining
exceptional individuals as executive officers and (ii) providing key executives
with motivation to perform to the full extent of their abilities, to maximize
Company performance and deliver enhanced value to the Company's stockholders.
The Compensation Committee believes it is important to place a greater
percentage of executive officers' total compensation, principally in the form of
equity, at risk than that of non-executives by tying executive officers'
compensation directly to the performance of the business and value of the Common
Stock. Executive compensation consists primarily of an annual salary, annual
bonuses linked to the performance of the Company and long-term equity-based
compensation.
Compensation. Annual compensation consists of base salaries and incentive
bonuses. Base salaries are established initially on the basis of subjective
factors, including experience, individual achievements and the level of
responsibility assumed at the Company. The Compensation Committee reviews
executive officers' annual compensation annually to adjust such annual
compensation based on each executive officer's past performance, expected future
contributions, the scope and nature of responsibilities of the executive
officer, including changes in such responsibilities, and market compensation
practices.
The Compensation Committee believes that a portion of the executives' annual
compensation in the form of incentive bonuses and long-term incentive plan
awards should be tied to the achievement of the Company's annual goals in order
to reward individual performance and overall Company success. Such goals relate
to achievement of the Company's strategic targets, operating budget and business
milestones. Additionally, a portion of each officer's bonus is based on
subjective criteria particular to each officer's individual performance.
In addition to base salaries and incentive bonuses, the Compensation Committee
also grants stock options to executive officers and other key employees of the
Company and its subsidiaries in order to focus the efforts of these employees on
the long-term enhancement of profitability and stockholder value. Awards under
these employee stock option plans may be in the form of options, restricted
stock or stock appreciation rights. Options, which have a fixed exercise price,
vest over a four-year or five-year period and have an exercise price equal to
the market value of the Common Stock on the date of grant, were granted to
executive officers and other key employees in 2000.
2000 Chief Executive Officer. The Compensation Committee determined the 2000
compensation of Mr. Buckley, Chief Executive Officer, in accordance with the
above discussion. Specifically, the
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Compensation Committee granted Mr. Buckley a base salary and eligibility under
the 2000 annual incentive bonus plan, with the bonus eligibility being based on
his individual performance, overall leadership and management of the Company,
and most importantly, the performance of the Company.
At the end of 2000, the Compensation Committee evaluated the performance of Mr.
Buckley in delivering against specific business goals established at the
beginning of the year. Most goals established were achieved and in some cases
exceeded by Mr. Buckley; however, certain financial milestones were not
achieved. Moreover, Mr. Buckley and the Compensation Committee were sensitive to
the decline in the Company's stock price during 2000 and the attendant impact to
stockholders. Accordingly, after conversations with Mr. Buckley, the
Compensation Committee decided not to declare any 2000 incentive bonus for Mr.
Buckley.
2000 Compensation for Executive Officers. At the end of 2000, the Compensation
Committee reviewed the performance of executive officers other than the Chief
Executive Officer and declared bonuses for those executives in their first year
of service based on certain agreed upon arrangements and declared bonuses for
other executives based on the Company's achievement of certain agreed upon
milestones. In early 2001, the Compensation Committee determined that no
distributions would be made pursuant to the Company's long-term incentive plan
related to fiscal year 2000 because a threshold requirement for distribution
under the plan was not met.
Deductibility of Compensation. Section 162(m) of the Internal Revenue Code
provides that publicly held companies may not deduct in any taxable year
compensation paid to any of the individuals named in the Summary Compensation
Table in excess of one million dollars that is not "performance-based." To
qualify as "performance-based" compensation, the Compensation Committee's
discretion to grant incentive awards must be strictly limited. Grants of stock
options and SARs under the Company's plans generally will meet the requirements
of "performance-based compensation." Restricted stock grants generally will not
qualify as, and performance units may not qualify as, "performance-based
compensation." The Compensation Committee believes that the benefit of retaining
the ability to exercise discretion under the Company's incentive compensation
plans outweighs the limited risk of loss of tax deductions under Section 162(m).
Therefore, because the 1999 Equity Compensation Plan and the Membership Profit
Interest Plan have been approved by the Company's stockholders, the Compensation
Committee does not currently plan to take any action to qualify any of the
incentive compensation plans under Section 162(m).
COMPENSATION COMMITTEE
Peter A. Solvik, Chairman
Dr. Thomas P. Gerrity
Robert E. Keith, Jr.
- --------------------------------------------------------------------------------
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COMPENSATION TABLES
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years ending December 31, 2000,
1999 and 1998, certain information regarding the cash compensation paid by the
Company, as well as certain other compensation paid or accrued for such year, to
each of the executive officers of the Company named below, in all capacities in
which they served.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Annual Awards
Compensation ------------
--------------------------------------- Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary Bonus Compensation(1) Options Compensation(2)
- ------------------------------- ---- -------- -------- --------------- ------------ ---------------
Walter W. Buckley, III......... 2000 $352,564 -- -- -- $3,867
President and Chief 1999 $250,000 $187,500(3) -- 2,000,000 --
Executive Officer 1998 $159,769 $ 96,000 -- 2,600,000 --
Douglas A. Alexander(4)........ 2000 $391,453 $138,800 $226,611 -- $ 850
Managing Director, Operations 1999 $225,000 $135,000(5) -- 1,000,000 --
1998 $225,000 $100,000 -- 2,500,000 --
Nigel D. Andrews(6)............ 2000 $181,604 $ 87,000 $122,069 1,700,000 --
Managing Director 1999 -- -- -- -- --
1998 -- -- -- -- --
Kenneth A. Fox................. 2000 $302,404 -- -- -- $ 850
Managing Director, West Coast 1999 $225,000 $135,000(5) -- 1,800,000 --
Operations 1998 $119,538 $ 75,000 -- 2,500,000 --
David D. Gathman(7)............ 2000 $251,923 $ 75,000 -- -- $ 756
Chief Financial Officer 1999 $192,308 $100,000 -- 1,500,000 --
and Treasurer 1998 -- -- -- -- --
Ronald W. Hovsepian(8)......... 2000 $235,769 $230,000(9) -- 1,600,000 $1,134
Managing Director, Operations 1999 -- -- -- 40,000 --
1998 -- -- -- -- --
Henry N. Nassau................ 2000 $318,750 $129,000 -- 250,000 $3,886
Managing Director, 1999 $171,924 $200,000 -- 1,500,000 --
General Counsel and Secretary 1998 -- -- -- -- --
- ---------------
(1) The value of certain perquisites and other personal benefits is not included
in the amounts disclosed because, with the exception of Messrs. Alexander
and Andrews, see notes 4 and 6, respectively, it did not exceed for any
officer in the table above the lesser of either $50,000 or 10% of the total
annual salary and bonus reported for such officer.
(2) Includes term life insurance premiums paid by the Company in the following
amounts: Mr. Buckley, $945; Mr. Alexander, $850; Mr. Fox, $850; Mr. Nassau,
$1,134; Mr. Gathman, $756, and; Mr. Hovsepian, $1,134. Amounts listed for
Mr. Buckley and Mr. Nassau also include $2,922 and $2,752, respectively, for
whole life insurance premiums paid by the Company.
(3) Includes $62,500 paid in January 2000 in respect of individual performance
and company success during 1999.
(4) Reported pursuant to Item 402(a)(3)(iii) of Regulation S-K. The $226,611
reported as "Other Annual Compensation" includes $121,800 in housing
payments and $104,011 in tax reimbursements, both related to expenses
incurred in the United Kingdom.
(5) Includes $22,500 paid in January 2000 in respect of individual performance
and company success during 1999.
(6) The $112,069 reported as "Other Annual Compensation" includes timesharing
and usage fees related to airplane transportation provided in lieu of
relocation and related reimbursements.
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(7) Reported pursuant to Item 402(a)(3)(iii) of Regulation S-K. Mr. Gathman
served as Chief Financial Officer until August 10, 2000. He continued his
employment with the Company through January 31, 2001.
(8) Mr. Hovsepian joined the Company on March 15, 2000. He received stock
options in 1999 in conjunction with advisory services rendered to the
Company.
(9) Includes $80,000 paid as a sign-on bonus.
STOCK OPTIONS
The following table sets forth information regarding stock options granted under
the 1999 Equity Compensation Plan during the fiscal year 2000 to the executive
officers of the Company named in the Summary Compensation Table:
OPTION GRANTS DURING THE YEAR ENDED DECEMBER 31, 2000
Percentage Potential Realizable Value at
Number of of Total Assumed Annual Rates of
Securities Options Stock Price Appreciation for
Underlying Granted to Exercise Option Term(3)
Options Employees Price per Expiration ------------------------------
Name Granted(1) in 2000 Share(2) Date 5% 10%
- ----------------------- ---------- ---------- --------- --------------- ------------ ------------
Walter W. Buckley, III.. -- -- -- -- -- --
Douglas A. Alexander.... -- -- -- -- -- --
Nigel D. Andrews........ 700,000 2.3% $34.25 June 26, 2010 $15,077,749 $38,209,975
300,000 1.0% $12.06 Oct. 26, 2010 $ 2,275,812 $ 5,767,356
300,000 1.0% $ 5.66 Dec. 8, 2010 $ 1,067,146 $ 2,704,358
400,000 1.3% $ 3.03 Dec. 21, 2010 $ 762,522 $ 1,932,381
Kenneth A. Fox.......... -- -- -- -- -- --
David D. Gathman........ -- -- -- -- -- --
Ronald W. Hovsepian..... 600,000 2.0% $64.00 April 10, 2010 $24,149,554 $61,199,710
100,000 0.3% $39.56 May 5, 2010 $ 2,488,064 $ 6,305,244
250,000 0.8% $12.06 Oct. 26, 2010 $ 1,896,510 $ 4,806,130
250,000 0.8% $ 5.66 Dec. 8, 2010 $ 889,288 $ 2,253,632
400,000 1.3% $ 3.03 Dec. 21, 2010 $ 762,522 $ 1,932,381
Henry N. Nassau......... 75,000 0.2% $12.06 Oct. 26, 2010 $ 568,953 $ 1,441,839
75,000 0.2% $ 5.66 Dec. 8, 2010 $ 266,787 $ 676,089
100,000 0.3% $ 3.03 Dec. 21, 2010 $ 190,631 $ 483,095
- ---------------
(1) Options granted to employees prior to June 29, 2000 generally vest over five
years at the rate of 20% of the shares subject to the option per year.
Options granted to employees on or after June 29, 2000 generally vest over
four years at the rate of 25% of the shares subject to the option per year.
Unvested shares are subject to a right of repurchase upon termination of
employment. Options expire eight or ten years from the date of grant.
(2) The Company granted options at an exercise price equal to the fair market
value of its Common Stock on the date of grant, as determined by the most
recent closing share price of the Company's Common Stock prior to the
Compensation Committee or Board of Directors meeting at which the grant is
made, as reported on the Nasdaq.
(3) These amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration dates, based upon the per-share market price on the date of
the grant. These assumptions are not intended to forecast future
appreciation of the Company's stock price. The potential realizable value
computation does not take into account federal or state income tax
consequences of option exercises or sales of appreciated stock.
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The following table sets forth information regarding 2000 fiscal year-end option
values for each of the executive officers named below:
YEAR-END DECEMBER 31, 2000 OPTION VALUES
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Shares Options at Fiscal Year-End Fiscal Year-End(1)($)
Acquired on Value ---------------------------- ----------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- --------------------------- ------------ ------------ ----------- ------------- ----------- -------------
Walter W. Buckley, III..... -- -- -- -- -- --
Douglas A. Alexander....... -- -- -- -- -- --
Nigel D. Andrews........... -- -- 1,685,399 14,601 $ 100,000 --
Kenneth A. Fox............. -- -- -- -- -- --
David D. Gathman........... -- -- -- -- -- --
Ronald W. Hovsepian........ -- -- 1,629,286 10,714 $ 100,000 --
Henry N. Nassau............ -- -- 216,840 33,160 $ 25,000 --
- ---------------
(1) These year-end values represent the difference between the fair market value
of the Common Stock subject to options (based on the stock's closing price
on the Nasdaq Stock Market on December 29, 2000) and the exercise price of
the options.
LONG-TERM INCENTIVE PLAN
The Company established a limited partnership to hold all interests of partner
companies that were acquired by the Company between August 6, 1999 and December
31, 2000. Under the Company's long-term incentive plan, participants purchased
interests in this limited partnership. The Company allocated an approximate 12%
interest for purchase by the participants. The Company, through a wholly-owned
subsidiary acting as a general partner of the partnership, retains an
approximate 88% interest in the partnership. The partnership can generally
distribute securities that it holds to its partners after a liquidity event
occurs with respect to one of its assets that results in the partnership
receiving three times the cost of the interest in such asset, provided that the
aggregate return on securities held by the partnership is at least 15%. If these
thresholds are met, the limited partners will receive distributions of
approximately 12% of the equity securities of the partner company that
experienced a liquidity event. No distributions were made to plan participants
in respect of fiscal year 2000 because the Compensation Committee determined
that a key threshold requirement for distribution under the plan was not met.
The percentages allocated during 2000 to each named executive officer in the
limited partnership are included in the following table.
Name Percentage Interest
- ----------------------------------------------------- -------------------
Walter W. Buckley, III............................... 0.85%
Douglas A. Alexander................................. 0.60%
Nigel D. Andrews..................................... 0.40%
Kenneth A. Fox....................................... 0.75%
David D. Gathman..................................... 0.40%
Ronald W. Hovsepian.................................. 0.25%
Henry N. Nassau...................................... 0.45%
- --------------------------------------------------------------------------------
OTHER FORMS OF COMPENSATION
MEMBERSHIP PROFIT INTEREST PLAN
In 1996, the board of managers of Internet Capital Group, L.L.C. approved the
Membership Profit Interest Plan, pursuant to which certain employees,
consultants and advisors designated by the Company received grants of units of
membership interest in Internet Capital Group, L.L.C. These units of membership
interest could not be transferred prior to vesting of the rights of the holder.
Twenty percent of each of these holder's
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units of membership interest vest each year over a five year period beginning on
the vesting date established by the Board of Directors. Unvested units are
forfeited to the Company if any holder's relationship with the Company is
terminated.
Following the February 1999 reorganization of the Company from a limited
liability company to a corporation, all outstanding grants became grants under
the Company's new Membership Profit Interest Plan (the "MPI Plan"). The Board of
Directors has the power, subject to the limitations contained in the MPI Plan,
to prescribe the terms and conditions of any award granted under the MPI Plan,
including the total number of shares awarded to each grantee and any applicable
vesting schedule. As of December 31, 2000, a total of 13,089,051 shares of
Common Stock were issued and outstanding under the MPI Plan, with an additional
478,199 shares reserved for possible future issuances.
1999 EQUITY COMPENSATION PLAN
The Company's 1999 Equity Compensation Plan (the "1999 Plan") authorizes
60,000,000 shares of Common Stock for issuance to designated employees of the
Company and its subsidiaries, key advisors and non-employee members of the Board
of Directors. The 1999 Plan encourages participants to contribute materially to
achievement of the Company's objectives by using selective grants of incentive
stock options, non-qualified options, stock appreciation rights, restricted
shares, performance shares, dividend equivalent rights and cash awards to align
the economic interests of participants and stockholders.
The Compensation Committee administers and interprets the 1999 Plan, and has the
sole authority to designate participants, grant awards and determine grant
terms, subject to the terms of the 1999 Plan.
The Compensation Committee may amend or terminate the 1999 Plan at any time. The
1999 Plan will terminate on May 1, 2009, unless the Compensation Committee
terminates it earlier or extends it with the approval of the Company's
stockholders.
EQUITY COMPENSATION LOAN PROGRAM
In accordance with the 1999 Plan and the applicable employee option agreements,
and in consideration of certain restrictive covenants regarding the use of
confidential information and non-competition, in 1999 the Company loaned some
employees who had been awarded non-qualified stock options under the 1999 Plan
amounts necessary to pay the exercise price of their outstanding options and to
pay some portion of the income tax that these employees owed upon the exercise
of such options. The loans are full recourse, bear interest at the Applicable
Federal Rate, and have five-year terms. In addition, each eligible employee
pledged the number of shares acquired pursuant to the exercise of the applicable
option as collateral for the loan. If an eligible employee sells any shares
acquired pursuant to the option exercise, such eligible employee is obligated
under the terms of the loan to use the proceeds of such sale to repay that
percentage of the original balance of the loan which is equal to the percentage
determined by dividing the number of shares sold by the number of shares
acquired pursuant to the exercise of the applicable option. If the eligible
employee's employment by the Company is terminated for any reason, such eligible
employee must repay the full outstanding loan balance to the Company within 90
days of such termination. Also, if the Company determines that a grantee
breaches any of the terms of the restrictive covenants, such eligible employee
must immediately repay any outstanding loan balance to the Company.
LONG-TERM INCENTIVE PLAN
The Company's long-term incentive plan supports its growth strategy since the
plan permits participants to share directly in the growth of its partner
companies. Each year the Company will allocate for the benefit of the
participants in the long-term incentive plan up to 12% of the interests acquired
during the year of companies that became partner companies after August 5, 1999.
The plan permits the Compensation Committee to award grants to any employee of
the Company in the form of interests in limited partnerships established by the
Company to hold the interests acquired by the Company in a given year. The
primary purpose of grants under the plan is to more closely align the interests
of plan participants with those of the Company. All distributions are subject to
the attainment of specified threshold levels, but the Compensation Committee can
accelerate payout. No distributions were made from the plan for
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fiscal year 2000 because the Compensation Committee determined that a key
threshold level required under the plan was not met.
401(K) PLAN
The Company sponsors the Internet Capital Group, Inc. 401(k) Plan, a defined
contribution plan that is intended to qualify under Section 401(k) of the Code.
All employees who are at least 21 years old are eligible to participate in the
401(k) Plan as of the first day of employment. A participating employee may make
pre-tax contributions of a percentage (not less than 1% and not more than 15%)
of his or her eligible compensation, subject to the limitations under the
federal tax laws. The Company may make discretionary contributions to the 401(k)
Plan, but it has never done so.
- --------------------------------------------------------------------------------
STOCK PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN* SINCE AUGUST 5, 1999
AMONG INTERNET CAPITAL GROUP, INC.,
THE NASDAQ COMPOSITE INDEX AND
THE GSTI INTERNET INDEX
The following graph presents a comparison of the Company's stock performance
with that of the Nasdaq Composite Index and the Goldman Sachs Technology
Internet Index from the date of the Company's initial public offering, August 5,
1999, through March 30, 2001.
[STOCK PERFORMANCE LINE GRAPH]
ICGE NASDAQ COMPOSITE INDEX GSTI INTERNET INDEX
---- ---------------------- -------------------
8/5/99 100.000 100.000 100.000
8/31/99 306.905 106.763 107.616
9/30/99 359.591 107.028 119.124
10/29/99 476.215 115.613 121.594
11/30/99 687.468 130.023 150.046
12/31/99 1391.304 158.596 185.988
1/31/00 973.913 153.570 162.376
2/29/00 865.473 183.048 180.378
3/31/00 739.130 178.220 169.626
4/28/00 346.803 150.464 131.334
5/31/00 220.460 132.546 108.174
6/30/00 302.941 154.574 115.158
7/31/00 276.726 146.814 106.691
8/31/00 285.422 163.937 125.335
9/29/00 142.711 143.144 110.028
10/31/00 108.440 131.327 86.351
11/30/00 47.059 101.251 54.189
12/29/00 26.854 96.285 47.422
1/31/01 52.685 108.064 58.559
2/28/01 31.457 83.865 39.825
3/30/01 17.903 71.722 28.969
* $100 invested at closing prices on 8/5/99 in ICGE shares or in a stock index -
including reinvestment of dividends.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND DIRECTORS AND OFFICERS
The following table sets forth information as of March 30, 2001, with respect to
shares of Common Stock beneficially owned by (i) each person or group that is
known to the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock, (ii) each director and named executive officer of the
Company and (iii) all directors and executive officers of the Company as a
group. Unless otherwise specified, all shares are directly held.
Number of Shares
Options and Beneficially Owned
Warrants Including Options and
Exercisable Warrants Exercisable Percent of Shares
5% Beneficial Owners, Directors, Named Officers Within 60 Days Within 60 Days Outstanding
- ----------------------------------------------- -------------- --------------------- -----------------
Comcast ICG, Inc(1)................................. 633,998 22,008,996 7.9%
c/o Comcast Corporation
1500 Market Street
Philadelphia, PA 19102
Safeguard Scientifics, Inc(2)....................... -- 36,835,242 13.2%
435 Devon Park Drive
Wayne, PA 19087
Douglas A. Alexander(3)............................. -- 5,782,748 2.1%
Nigel D. Andrews(4)................................. 1,685,399 1,685,399 *
David Berkman(5).................................... 225,000 225,000 *
Walter W. Buckley, III(6)........................... 21,833 12,165,999 4.4%
Kenneth A. Fox(7)................................... 37,146 11,848,974 4.3%
David D. Gathman.................................... -- 331,664 *
Dr. Thomas P. Gerrity(8)............................ 40,000 925,945 *
Ronald W. Hovsepian(9).............................. 1,629,286 1,629,286 *
Robert E. Keith, Jr.(10)............................ 95,533 603,946 *
Warren V. Musser(11)................................ -- 400,831 *
Henry N. Nassau(12)................................. 218,040 1,642,090 *
Peter A. Solvik(13)................................. 35,600 1,056,950 *
All Directors and executive officers as a group
(11 persons)(14).................................. 5,675,573 33,872,156 11.9%
- ---------------
* Represents less than 1%
(1) As reported by Comcast ICG, Inc. in its Schedule 13G/A filing of February
14, 2001. Includes 416,666 shares of Common Stock and warrants to purchase
83,333 shares of Common Stock held by Comcast Interactive Capital, L.P. as
to which Comcast ICG, Inc. disclaimed beneficial ownership.
(2) Includes 14,868,130 shares held by Safeguard Delaware, Inc., 21,678,003
shares held by Safeguard Scientifics (Delaware), Inc. and 289,109 shares
held by Technology Leaders Management, Inc. Excludes a total of 215,711
shares held by TL Ventures IV, L.P. and TL Ventures IV Interfund, L.P.,
which are private equity funds affiliated with Safeguard Scientifics, Inc.
(3) Includes shares of restricted Common Stock which have not vested pursuant
to the Membership Profit Investment Plan and the 1999 Equity Compensation
Plan. Also includes 8,825 shares of Common Stock held by the Douglas A.
Alexander Qualified Grantor Annuity Trust and 8,000 shares of Common Stock
held by two trusts for the benefit of certain of Mr. Alexander's relatives,
each trust holding 4,000 shares of Common Stock.
(4) Includes shares of Common Stock which have not vested pursuant to the 1999
Equity Compensation Plan.
(5) Includes shares of Common Stock which have not vested pursuant to the 1999
Equity Compensation Plan.
(6) Includes shares of restricted Common Stock that have not vested pursuant to
the Membership Profit Interest Plan and the 1999 Equity Compensation Plan.
Also includes 294,166 shares of Common Stock and warrants to purchase 1,833
shares of Common Stock held by Susan R. Buckley, wife of Walter W. Buckley,
III, and 500,000 shares of Common Stock held by two trusts for the benefit
of
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certain of Mr. Buckley's relatives, each trust holding 250,000 shares of
Common Stock, as to which Mr. Buckley disclaims beneficial ownership.
(7) Includes shares of restricted Common Stock that have not vested pursuant to
the Membership Profit Interest Plan and the 1999 Equity Compensation Plan.
(8) Includes shares of restricted Common Stock that have not vested pursuant to
the 1999 Equity Compensation Plan. Also includes 36,054 shares of Common
Stock held by Technology Leaders Advisers IV, Inc., for which Dr. Gerrity
has sole voting and investment power. Additionally, includes 78,000 shares
of Common Stock held by the Thomas P. Gerrity Generation Skipping Trust U/A
3/17/92 for the benefit of certain of Dr. Gerrity's relatives, as to which
Dr. Gerrity disclaims beneficial ownership.
(9) Includes shares of Common Stock which have not vested pursuant to the 1999
Equity Compensation Plan.
(10) Includes shares of Common Stock which have not vested pursuant to the 1999
Equity Compensation Plan. Also includes 202 shares held by Margot Keith and
7,500 shares held by the Keith 1999 Irrevocable Trust.
(11) Includes 3,100 shares of Common Stock held by the C.V. Sams Trust, of which
Mr. Musser is a co-trustee with shared voting and investment powers. Also
includes 10,000 shares of Common Stock held by Hilary Musser, wife of
Warren V. Musser, as to which Mr. Musser disclaims beneficial ownership.
(12) Includes shares of Common Stock which have not vested pursuant to the 1999
Equity Compensation Plan. Also includes 300,000 shares of Common Stock held
by a trust for the benefit of certain of Mr. Nassau's relatives. Mr. Nassau
disclaims beneficial ownership of the shares held by the trust. Also
includes 20,000 shares of Common Stock held by Catharine Nassau, wife of
Henry N. Nassau, as to which Mr. Nassau disclaims beneficial ownership.
(13) Includes shares of restricted Common Stock that have not vested pursuant to
the Membership Profit Interest Plan and the 1999 Equity Compensation Plan.
Also includes 174,044 shares of Common Stock held by the Peter A. Solvik
Annuity Trust u/i dtd. July 30, 1999, 174,044 shares of Common Stock held
by the Patricia A. Solvik Annuity Trust u/i dtd. July 30, 1999 and 3,000
shares of Common Stock held by two trusts for the benefit of certain of Mr.
Solvik's relatives, each trust holding 1,500 shares of Common Stock.
(14) Totals for "All Directors and executive officers as a group" include
holdings of Edward H. West, a Managing Director and the Chief Financial
Officer of the Company, and exclude holdings of Messrs. Alexander and
Gathman, who were not executive officers at December 31, 2000.
SHARES OF SUBSIDIARY CORPORATIONS OWNED BY DIRECTORS AND OFFICERS OF INTERNET
CAPITAL GROUP, INC.
ICG Commerce Holdings, Inc. is a majority owned subsidiary of the Company. As of
April 10, 2001, executive officers and directors of the Company beneficially
owned the following interests in ICG Commerce Holdings, Inc.:
David J. Berkman indirectly owns about 33,819 shares of Series B Preferred
Stock, or less than 1% of the shares outstanding. These shares are held by ICGC
Holdings, L.P., a limited partnership in which Mr. Berkman indirectly holds a
limited partnership interest.
Dr. Thomas P. Gerrity directly owns 333,334 common shares, or less than 1% of
the shares outstanding.
All other executive officers and directors of the Company as a group indirectly
owned less than 1% of the shares outstanding.
- --------------------------------------------------------------------------------
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since 1999, the Company has leased its corporate offices in Wayne, Pennsylvania
from Safeguard Scientifics, Inc. ("Safeguard"). In addition, the Company paid
Safeguard for telephone services, health
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and general insurance coverage, and other services. From January 1, 2000 to
December 31, 2000, the Company's payments to Safeguard under the lease and for
these services totaled about $1.1 million. As of December 31, 2000, Safeguard
beneficially owned about 13.2% of the Company's Common Stock. The Company
believes that its lease in Wayne with Safeguard and the services provided to it
are on terms no less favorable to the Company than those that would be available
to it in an arm's-length transaction with a third party.
In November 2000, the Company entered into an agreement with the Trustees of the
University of Pennsylvania pursuant to which the Company would provide an
initial gift of $1,500,000 for the purpose of supporting faculty research and
the development of new educational material focusing on e-business and could
elect to commit additional fundings in support of an e-business initiative. By
letter agreement dated November 10, 2000, Mr. Buckley agreed to assume the
Company's obligation to provide the initial $1,500,000 gift.
EnerTech Capital Partners II ("EnerTech") is a private equity fund of which
Safeguard is a general partner. Robert E. Keith, Jr., the Company's Chairman of
the Board, is the Vice Chairman of Safeguard and the President and Chief
Executive Officer of EnerTech's management company. Mr. Keith is also a general
partner of EnerTech. In 2000, the Company committed to invest a total of
$10,000,000 for approximately a 4% ownership interest in EnerTech, of which
$1,500,000 was advanced in 2000. As an investor, the Company pays EnerTech
annual management fees of about 2% of its commitment. In 2000, the Company also
paid $42,164 in interest to EnerTech.
In June 2000, the Company purchased from EnerTech 2,666,667 shares of the Series
A Preferred Stock of ICG Commerce Holdings, Inc. for $14,000,000. The Company
received a $735,055 distribution from EnerTech as its portion of such proceeds.
The purchase agreement provides for an additional, contingent payment of as much
as $70,000,000 from the Company to EnerTech in the event that the future
valuation of ICG Commerce Holdings, Inc. exceeds specified thresholds. In the
event that any such contingent payment is made, the Company would be entitled to
a portion of such payment as a result of its interest in EnerTech.
In May and July 1999, some of the Company's executive officers and directors
exercised options to purchase the Company's Common Stock. Instead of paying the
Company in cash, the executive officers and directors delivered promissory notes
to the Company in the aggregate amount of $29,256,000 (comprised of $12,960,000
and $16,296,000 in May and July 1999, respectively). The promissory notes,
maturing in 2004, bear interest at rates of 5.22% and 5.82%, are secured by
15,600,000 shares of the Company's Common Stock and are full recourse.
Likewise, in June 1999, some of the Company's executive officers and directors
borrowed money from the Company to pay tax liabilities incurred as a result of
exercising options to purchase the Company's Common Stock. These loans are
evidenced by promissory notes delivered by these executive officers and
directors to the Company in the aggregate principal amount of $4,367,160 bearing
interest at 5.22% and maturing in 2004. These loans are secured by shares of the
Company's Common Stock held by the borrowing executives and are full recourse.
In April 2000, an officer of the Company borrowed $417,600 from the Company to
pay tax liabilities incurred as a result of exercising options to purchase the
Company's Common Stock. This loan was evidenced by a promissory note in the
principal amount of $417,600 bearing interest at 6.71% and maturing in 2005.
This note was paid in full in September 2000.
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The following table sets forth information for the fiscal year ending December
31, 2000, as well as outstanding balances at March 31, 2001, relating to
indebtedness to the Company incurred in fiscal years 1999 and 2000 by the
foregoing makers of promissory notes to the Company:
Largest
amount Total amount
Name of Maker; outstanding outstanding on
Relationship to Company Description of Indebtedness; Key Terms during 2000(1) 3/31/01(1)
- ----------------------- ------------------------------------------------------------ -------------- --------------
Douglas A. Alexander To fund 5/99 option exercise; 5.22% interest; due 5/04 $2,669,219 $ 2,579,512
(officer) To fund 7/99 option exercise; 5.82% interest; due 7/04 $3,614,533 $ 2,792,299
To fund payment of tax liabilities; 5.22%; due 6/04 $1,233,495 $ 0
To fund payment of tax liabilities; 6.71%; due 4/05 $ 426,121 $ 0
Aggregate amount at March 31, 2001: $ 5,371,811
Walter W. Buckley, III To fund 5/99 option exercise; 5.22% interest; due 5/04 $2,818,855 $ 2,853,929
(executive officer and director) To fund 7/99 option exercise; 5.82% interest; due 7/04 $7,354,541 $ 7,457,203
To fund payment of tax liabilities; 5.22%; due 6/04 $1,302,742 $ 1,319,030
Aggregate amount at March 31, 2001: $11,630,162
Kenneth A. Fox To fund 5/99 option exercise; 5.22% interest; due 5/04 $2,710,438 $ 2,744,162
(executive officer and director) To fund 7/99 option exercise; 5.82% interest; due 7/04 $6,565,857 $ 6,648,293
To fund payment of tax liabilities; 5.22%; due 6/04 $1,505,106 $ 1,523,924
Aggregate amount at March 31, 2001: $10,916,379
David D. Gathman To fund 5/99 option exercise; 5.22% interest; due 5/04 $1,373,380 $ 0
(former executive officer) To fund payment of tax liabilities; 5.22%; due 6/04 $ 634,631 $ 0
Aggregate amount at March 31, 2001: $ 0
Dr. Thomas P. Gerrity To fund 5/99 option exercise; 5.22% interest; due 5/04 $ 411,956 $ 243,673
(director)
Henry N. Nassau To fund 5/99 option exercise; 5.22% interest; due 6/04 $3,888,536 $ 3,562,330
(executive officer)
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(1) Includes all amounts owed as principal and capitalized or accrued interest.
In connection with Mr. Gathman's separation from employment with the Company, in
December 2000, the Company repurchased from Mr. Gathman 780,000 unvested shares
of Common Stock in exchange for the Company's cancellation of $842,434
(comprised of $780,000 in note principal and $62,434 in capitalized and accrued
interest) of outstanding obligations of Mr. Gathman to the Company.
As of March 31, 2001, aggregate outstanding obligations of the Company's
executive officers and directors listed in the foregoing table total
$31,654,144, and are secured by 13,624,000 shares of the Company's Common Stock.
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EXECUTIVE OFFICERS
The current executive officers of the Company are as follows:
Walter W. Buckley, III, President, Chief Executive Officer and Director. Mr.
Buckley is described above as an incumbent Class III director.
Kenneth A. Fox, Managing Director, West Coast Operations and Director. Mr. Fox
is described above as an incumbent Class III director.
Ronald W. Hovsepian, Managing Director, Operations. Prior to joining Internet
Capital Group, Inc. as Managing Director on March 15, 2000, Mr. Hovsepian spent
16 years at IBM Corporation in a variety of executive and general management
roles. Most recently, he was IBM's Vice President of Business Development for
the retail and consumer packaged goods industry, where he led IBM's entry into
the business-to-business exchange marketplace. Mr. Hovsepian also served on the
advisory board of Internet Capital Group, Inc. and guided IBM's investment in
the Company. Formerly, he was IBM's worldwide General Manager for retail and
consumer packaged goods solutions, where he led all aspects of strategy,
marketing, sales, product management, and business development. Mr. Hovsepian
serves as a director of Ann Taylor Corporation, eCredit.com, Inc.,
Logistics.com, Inc. and Syncra Systems, Inc. Age: 40.
Henry N. Nassau, Managing Director, General Counsel and Secretary. Mr. Nassau
has served as one of Internet Capital Group, Inc.'s Managing Directors and as
General Counsel and Secretary since May 1999.
17
21
Mr. Nassau was a partner in the law firm of Dechert from September 1987 to May
1999 and was Chair of the Business Department from January 1998 to May 1999. At
Dechert, Mr. Nassau engaged in the practice of corporate law, concentrating on
mergers and acquisitions. Mr. Nassau serves as a director of Bliley Electric
Company, Breakaway Solutions, Inc., CourtLink Corporation, Erie Indemnity
Company, Erie Family Life Insurance Company, HigherMarkets, Inc., ICG Asia Ltd.
and PaperExchange.com, Inc. Age: 46.
Edward H. West, Managing Director and Chief Financial Officer. Mr. West joined
the Company as Chief Financial Officer in August 2000. He reports directly to
the CEO and manages all corporate finance and accounting, treasury, corporate
development, investor relations and information technology activities. Mr.
West's responsibilities also include development and implementation of financial
strategy. Before joining the Company, Mr. West held various management positions
at Delta Air Lines, Inc. from June 1994 until August 2000 and was Executive Vice
President and Chief Financial Officer from September 1999 to August 2000. As
Chief Financial Officer at Delta, Mr. West was a member of Delta Air Lines'
Executive Council and had broad responsibility for all corporate and operational
financial functions, including accounting, treasury, capital markets, investor
relations, procurement, financial planning and analysis and benefit trust
management. He served as Chairman of the Board of Delta Technology, the
airline's technology subsidiary. Age: 34.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require the Company to
disclose late filings of stock transaction reports by its executive officers and
directors. Based solely on a review of reports filed by the Company on these
individuals' behalf and written representations from them that no other reports
were required, all Section 16(a) filing requirements have been met during fiscal
year 2000 except that Walter W. Buckley, III filed an amended Form 3 and amended
Forms 4 with respect to May and June 2000 in August 2000, Nigel D. Andrews and
Edward H. West each filed amended Forms 4 with respect to October 2000 in
January 2001, and Robert E. Keith, Jr. filed a Form 5 in February 2001 for
transactions which occurred in March and June 2000 and should have been reported
previously on Form 4.
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SEPARATION OF EMPLOYMENT AGREEMENT
Effective February 28, 2001, the Company and Nigel D. Andrews entered into a
Separation of Employment Agreement and General Release (the "Separation
Agreement") in connection with Mr. Andrews' separation from employment with the
Company. Terms of the Separation Agreement include Mr. Andrews' agreement to be
available for advisory services to the Company for a six month period for the
equivalent of two (2) days per week. Mr. Andrews agreed to one-year
non-solicitation provisions with respect to employees, consultants, independent
contractors and customers of the Company and its direct or indirect affiliates.
The Separation Agreement also includes Mr. Andrews' general release of any and
all actual or future causes of action against the Company. In consideration of
Mr. Andrews' execution of the Separation Agreement, the Company agreed to
accelerate vesting of 400,000 stock options granted to Mr. Andrews on December
21, 2000 and to extend the expiration date for option exercises until two (2)
years from his termination of employment with the Company. The Company shall pay
Mr. Andrews for any distributions declared prior to March 31, 2002 under the
Company's Long-Term Incentive Plan for events occurring in calendar years 2000
and 2001, and will pay COBRA premiums for insurance benefits for Mr. Andrews for
up to two (2) years. Certain non-compete covenants signed by Mr. Andrews will be
released after cessation of his advisory role with the Company, except with
respect to enumerated competitors of the Company.
18
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COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Compensation Committee makes all executive compensation decisions. Messrs.
Gerrity, Keith and Solvik serve as the members of the Compensation Committee. No
member of the Compensation Committee is a former or current executive officer or
employee of the Company. To the Company's knowledge, none of its executive
officers, directors or Compensation Committee members currently serve on the
compensation committee of any other company whose directors and executive
officers served on the Company's Compensation Committee during the fiscal year
ended December 31, 2000.
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OTHER BUSINESS
The Company is not aware of any other matters that will be presented for
stockholder action at the Annual Meeting. If other matters are properly
introduced, the person named in the accompanying proxy will vote the shares they
represent in accordance with their judgment.
By Order of the Board of Directors
/s/ Henry N. Nassau
Henry N. Nassau
Secretary
April 27, 2001
19
23
EXHIBIT A
INTERNET CAPITAL GROUP, INC.
AUDIT COMMITTEE CHARTER
PURPOSE
The primary function of the Audit Committee is to assist the Board of Directors
in fulfilling its oversight responsibilities by reviewing the following: the
financial reports and other financial information provided by the Corporation to
its shareholders, the SEC and others; the Corporation's systems of internal
controls regarding finance, accounting, legal compliance and business conduct
that Management and the Board have established; and the Corporation's auditing,
accounting and financial processes generally. Consistent with this function, the
Audit Committee should encourage continuous improvement of and adherence to
these processes and systems. The Audit Committee's primary duties and
responsibilities are to:
- serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control systems;
- review(1) and appraise the audit efforts of the Corporation's
independent accountants; and
- provide an open avenue of communication among the independent
accountants, financial and senior Management and the Board of Directors.
In the exercise of its oversight responsibilities, it is not the duty of the
Committee to plan or conduct audits or to determine that the Corporation's
financial statements fairly present the Corporation's financial position and
results of operation and are in accordance with generally accepted accounting
principles. Instead, such duties remain the responsibility of Management and the
outside auditor. Nothing contained in this charter is intended to alter or
impair the operation of the "business judgment rule" as interpreted by the
courts under the Delaware General Corporation Law. Further, nothing contained in
this charter is intended to alter or impair the right of the members of the
Committee under the Delaware General Corporation Law to rely, in discharging
their responsibilities, on the records of the Corporation and on other
information presented to the Committee, Board or the Corporation by its officers
or employees or by outside experts.
COMPOSITION OF THE AUDIT COMMITTEE
The Committee shall consist of three members of the Board. The members shall be
appointed by action of the Board and shall serve at the discretion of the Board.
Each Committee member shall satisfy the "independence" requirements of the
NASDAQ Stock Market or other appropriate governing body, unless the Board
otherwise determines. Each Committee member must be able to read and understand
fundamental financial statements, including a company's balance sheet, income
statement, and cash flow statement or must be able to do so within a reasonable
period of time after his or her appointment to the Committee.
Determination of the true, actual and effective independence of any Audit
Committee member that has or had some relationship with the Corporation, will be
made by the Board of Directors with weight given to both prudent principles and
"appearances".
- ---------------
(1) Auditing literature, particularly, Statement of Accounting Standards No. 71,
defines the term "review" to include a particular set of required procedures
to be undertaken by independent accountants. The members of the Audit
Committee are not independent accountants, and the term "review" as used in
this Audit Committee Charter is not intended to have this meaning.
Consistent with footnote 47 of SEC Release No. 34-42266, any use in this
Audit Committee Charter of the term "review" should not be interpreted to
suggest that the Committee members can or should follow the procedures
required of auditors performing reviews of interim financial statements.
A-1
24
The members of the Audit Committee shall be elected by the Board at its
organizational meeting to hold such position until the next annual meeting or
until their successors shall be duly elected and qualified. The Chairman of the
Audit Committee shall be selected by the Board at this organizational meeting.
MEETINGS
The Committee shall meet at least four times annually, or more frequently as
circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least twice annually with Management and the
independent accountants in separate executive sessions to discuss any matters
that the Committee believes should be discussed privately. In addition, the
Committee, or at least its Chair, should meet with the independent accountants
and Management quarterly in advance of any release to review the Corporation's
financials consistent with its responsibilities and duties.
The Committee shall report to the Board of Directors at each regularly scheduled
Board meeting on significant results of its activities.
The Committee shall have the authority to establish its own rules and procedures
consistent with the bylaws of the Corporation for notice and conduct of its
meetings, should the Committee, in its discretion, deem it desirable to do so.
The Committee may, in its discretion, utilize the services of the Corporation's
regular corporate legal counsel with respect to legal matters or, at its
discretion, retain other legal counsel if it determines that such counsel is
necessary or appropriate under the circumstances.
RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties, the Audit Committee shall:
Documents/Reports Review
- Review the Corporation's annual and interim financial statements and any
reports or other financial information submitted to the shareholders,
the SEC, and others, including any certification, report, opinion or
review rendered by the independent accountants.
- Review the regular internal reports to Management prepared by the
internal auditors and Management's response.
- Review with Management and the independent accountants the 10-Q, 10-K,
and any related public disclosure prior to its filing or prior to the
release of earnings. The Chair of the Committee may represent the entire
Committee for purposes of this review.
Independent Accountants
- After consultation with Management, recommend to the Board of Directors
the selection of the independent accountants, considering independence
and effectiveness, and approve the fees and other compensation to be
paid to the independent accountants.
- Periodically, the Committee should review and discuss with the
independent accountants all significant relationships such accountants
have with the Corporation which might affect their independence. In
connection with this review, the independent auditors shall provide the
Committee with a written statement delineating all relationships between
the auditors and the Corporation.
- Review the performance of the independent accountants with both
Management and the independent accountants.
- Subject to the overall direction of the Audit Committee, the internal
audit function will be managed on a day-to-day operational basis by the
Chief Financial Officer.
- Periodically meet with the independent accountants separately and
privately to hear their views on the Corporation's internal controls and
the qualitative aspects of the Corporation's financial
A-2
25
reporting, including the quality and consistency of both accounting
policies and the underlying judgments.
Financial Reporting Processes
- Review with financial Management and the independent accountants the
quality and consistency, not just the acceptability, of the judgments
and appropriateness of the accounting principles and financial
disclosure practices used by the Corporation. This discussion shall
cover the degree of aggressiveness or conservatism of both the
accounting principles employed and the underlying judgments.
- Approve any significant changes to the Corporation's auditing and
accounting principles and practices after considering the advice of the
independent accountants and Management.
- Focus on the reasonableness of control processes for identifying and
managing key business, financial and regulatory reporting risks.
Process Improvement
- Following the completion of the annual audit, review separately with
Management and the independent accountants any significant difficulties
encountered during the course of the audit, including any restrictions
on the scope of work or access to required information.
- Periodically review processes and policies for communicating with
investors and analysts.
- Review any significant disagreement among Management and the independent
accountants in connection with the preparation of the financial
statements.
- Review with the independent accountants and Management the extent to
which changes or improvements in financial or accounting practices, as
approved by the Audit Committee, have been implemented. (This review
should be conducted at an appropriate time subsequent to implementation
of changes or improvements, as decided by the Committee.)
Business Conduct and Legal Compliance
- Approve the Corporation's Code of Business Conduct and review
Management's processes for communicating and enforcing this Code.
- Review Management's monitoring of the Corporation's compliance with the
organization's Code of Business Conduct, and ensure that Management has
the proper review system in place to ensure that Corporation's financial
statements, reports, and other financial information disseminated to
governmental organizations and the public to satisfy legal requirements.
- Review, with the Corporation's counsel, any legal matter that could have
a significant impact on the Corporation's financial statements.
Other Responsibilities
- Review and reassess the Committee's charter at least annually and submit
any recommended changes to the Board for its consideration.
- Provide the report for inclusion in the Corporation's Annual Proxy
Statement that is required by Item 306 of Regulation S-K of the
Securities and Exchange Commission.
- Through its Chair, report periodically, as deemed necessary or desirable
by the Committee, but at least annually, to the full Board regarding the
Committee's actions and recommendations, if any.
- Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law, as the Committee or the Board
deems necessary or appropriate.
EFFECTIVE DATE
THIS AUDIT COMMITTEE CHARTER WAS ADOPTED BY THE BOARD OF DIRECTORS EFFECTIVE AS
OF JUNE 9, 2000.
A-3
26
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
Please mark your
votes as indicated [X]
in this example
ITEM 1. ELECTION OF DIRECTORS
FOR all nominees WITHHOLD
listed to the right AUTHORITY
(except as marked to vote for all nominees
to the contrary) listed to the right
[ ] [ ]
Nominees: (1) Dr. Thomas P. Gerrity, (2) Robert E. Keith, Jr.
To withhold authority to vote for one or more nominee(s), write that name(s) of
the nominee(s) below.
________________________________________________________________________________
ITEM 2. RATIFICATION OF INDEPENDENT AUDITORS
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
ITEM 3. OTHER MATTERS
In their discretion, the proxies are authorized to vote upon such other matters
as may properly come before the meeting or at any adjournments thereof.
Dated __________________________________, 2001
______________________________________________
______________________________________________
Signature(s)
NOTE: PLEASE DATE THIS PROXY, SIGN YOUR NAME
EXACTLY AS IT APPEARS HEREON, AND RETURN
PROMPTLY USING THE ENCLOSED POSTAGE PAID
ENVELOPE. JOINT OWNERS SHOULD EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS
SUCH.
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- FOLD AND DETACH HERE -
VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK
YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
INTERNET
HTTP://WWW.PROXYVOTING.COM/ICGE
Use the Internet to vote your proxy. Have your proxy card in hand when you
access the web site. You will be prompted to enter your control number, located
in the box below, to create and submit an electronic ballot.
OR
TELEPHONE
1-800-840-1208
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter your control number, located in the
box below, and then follow the directions given.
OR
MAIL
Mark, sign and date your proxy card and return it in the enclosed postage-paid
envelope.
IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.
27
INTERNET CAPITAL GROUP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 30, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOW ALL MEN BY THESE PRESENTS, that the undersigned stockholder of
INTERNET CAPITAL GROUP, INC., a Delaware corporation, does hereby constitute and
appoint Walter W. Buckley, III, Henry N. Nassau and Edward H. West, or any one
of them, with full power to act alone and to designate substitutes, the true and
lawful attorneys and proxies of the undersigned for and in the name and stead of
the undersigned, to vote all shares of Common Stock of Internet Capital Group,
Inc. which the undersigned would be entitled to vote if personally present at
the Annual Meeting of Stockholders to be held at The Desmond Great Valley, One
Liberty Boulevard, Malvern, Pennsylvania 19355, on May 30, 2001 at 10:00 a.m.,
and at any and all adjournments and postponements thereof, as follows:
THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ITEMS 1
AND 2 AND WILL GRANT DISCRETIONARY AUTHORITY PURSUANT TO ITEM 3.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
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- FOLD AND DETACH HERE -