SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. )
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(as permitted by Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
First Virtual Communications, 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):
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|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
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FIRST VIRTUAL COMMUNICATIONS, INC.
3393 Octavius Drive
Santa Clara, California 95054
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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held On March 10, 2003
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Dear Stockholder,
You are cordially invited to attend a Special Meeting of Stockholders of
First Virtual Communications, Inc., a Delaware corporation (the "Company"). The
meeting will be held on Monday, March 10, 2003 at 9:00 a.m. local time at the
Company's headquarters at 3393 Octavius Drive, Santa Clara, California 95054 for
the following purposes:
1. To approve a series of amendments to the Company's Amended and Restated
Certificate of Incorporation, as amended, to effect a reverse stock
split of the Company's common stock whereby each outstanding three,
four, five, six, seven, eight, nine or ten shares would be combined,
converted and changed into one share of common stock, with the
effectiveness of one of such amendments and the abandonment of the
other amendments, or the abandonment of all of the amendments, as
permitted under Section 242(c) of the Delaware General Corporation Law,
to be determined by the Board of Directors.
2. To conduct any other business properly brought before the meeting.
These items of business are more fully described in the Proxy Statement
accompanying this Notice.
The record date for the Special Meeting is February 6, 2003. Only
stockholders of record at the close of business on that date may vote at the
meeting or any adjournment or postponement thereof.
By Order of the Board of Directors
Jonathan G. Morgan
Chief Executive Officer and President
Santa Clara, California
February 10, 2003
You are cordially invited to attend the meeting in person. Whether or not
you expect to attend the meeting, please complete, date, sign and return the
enclosed proxy as promptly as possible in order to ensure your representation at
the meeting. A return envelope (which is postage prepaid if mailed in the United
States) is enclosed for your convenience. Even if you have voted by proxy, you
may still vote in person if you attend the meeting. Please note, however, that
if your shares are held of record by a broker, bank or other nominee and you
wish to vote at the meeting, you must obtain a proxy issued in your name from
that record holder.
1.
FIRST VIRTUAL COMMUNICATIONS, INC.
3393 Octavius Drive
Santa Clara, California 95054
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PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
March 10, 2003
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QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND VOTING
Why am I receiving these materials?
First Virtual Communications, Inc. (sometimes referred to as the "Company"
or "First Virtual Communications") sent you this proxy statement and the
enclosed proxy card because the board of directors of the Company is soliciting
your proxy to vote at a special meeting of stockholders. You are invited to
attend the special meeting and the Company requests that you vote on the
proposals described in this proxy statement. However, you do not need to attend
the meeting to vote your shares. Instead, you may simply complete, sign and
return the enclosed proxy card.
First Virtual Communications intends to mail this proxy statement and
accompanying proxy card on or about February 10, 2003 to all stockholders of
record entitled to vote at the special meeting.
Who can vote at the special meeting?
Only stockholders of record at the close of business on February 6, 2003
will be entitled to notice of, and to vote at, the special meeting. At the close
of business on this record date, there were shares of common stock and 27,437
shares of Series A Preferred Stock, convertible into 4,247,214 shares of common
stock, outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If at the close of business on February 6, 2003 your shares were registered
directly in your name with the Company's transfer agent, Computershare Trust
Company, then you are a stockholder of record. As a stockholder of record, you
may vote in person at the meeting or vote by proxy. Whether or not you expect to
attend the meeting, please complete, date, sign and return the enclosed proxy
card as promptly as possible in order to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If at the close of business on February 6, 2003 your shares were held in
an account at a brokerage firm, bank, dealer, or other similar organization,
then you are the beneficial owner of shares held in "street name" and these
proxy materials are being forwarded to you by that organization. The
organization holding your account is considered the stockholder of record for
purposes of voting at the special meeting. As a beneficial owner, you have the
right to direct your broker or other agent on how to vote the shares in your
account. You are also invited to attend the special meeting. However, since you
are not the stockholder of record, you may not vote your shares in person at the
meeting unless you request and obtain a valid proxy from your broker or other
agent.
2.
What am I voting on?
There is one matter scheduled for a vote:
o To approve a series of amendments to the Company's Amended and
Restated Certificate of Incorporation, as amended, to effect a
reverse stock split of the Company's common stock whereby each
outstanding three, four, five, six, seven, eight, nine or ten
shares would be combined, converted and changed into one share
of common stock, with the effectiveness of one of such
amendments and the abandonment of the other amendments, or the
abandonment of all of the amendments, as permitted under
Section 242(c) of the Delaware General Corporation Law, to be
determined by the Board of Directors.
How do I vote?
You may vote "For" or "Against" or abstain from voting. The procedures for
voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote in person at the special
meeting or vote by proxy using the enclosed proxy card. Whether or not you plan
to attend the meeting, the Company urges you to vote by proxy to ensure your
vote is counted. You may still attend the meeting and vote in person if you have
already voted by proxy.
o To vote in person, come to the special meeting and the Company
will give you a ballot when you arrive.
o To vote using the proxy card, simply complete, sign and date
the enclosed proxy card and return it to the Company promptly
in the envelope provided. If you return your signed proxy card
to the Company before the special meeting, the Company will
vote your shares as you direct.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your
broker, bank, or other agent, you should have received a proxy card and voting
instructions with these proxy materials from that organization rather than from
First Virtual Communications. Simply complete and mail the proxy card to ensure
that your vote is counted. To vote in person at the special meeting, you must
obtain a valid proxy from your broker, bank, or other agent. Follow the
instructions from your broker or bank included with these proxy materials, or
contact your broker or bank to request a proxy form.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common
stock you own as of February 6, 2002 and one vote for each share of common stock
into which your shares of Series A Preferred Stock were convertible on February
6, 2002.
What if I return a proxy card but do not make specific choices?
If you return a signed and dated proxy card without marking any voting
selections, your shares will be voted "For" the amendment of the Company's
Amended and Restated Certificate of Incorporation, as amended. If any other
matter is properly presented at the meeting, your proxy (one of the individuals
named on your proxy card) will vote your shares using his best judgment.
Who is paying for this proxy solicitation?
First Virtual Communications will pay for the entire cost of soliciting
proxies, including preparation, assembly, printing and mailing of these proxy
materials and any additional information furnished to stockholders.
3.
Copies of solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of common stock
beneficially owned by others to forward to such beneficial owners. The Company
may also reimburse brokerage firms, banks and other agents for the cost of
forwarding proxy materials to beneficial owners. In addition to these mailed
proxy materials, the Company's directors and employees may also solicit proxies
in person, by telephone, or by other means of communication. The solicitation of
proxies by mail also may be supplemented through the use of a proxy solicitation
firm. Directors and employees will not be paid any additional compensation for
soliciting proxies, but a proxy solicitor, if used, will receive a customary fee
which we estimate to be approximately $10,000.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card, your shares are registered in more
than one name or are registered in different accounts. Please complete, sign and
return each proxy card to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Yes. You can revoke your proxy at any time before the final vote at the
meeting. You may revoke your proxy in any one of three ways:
o You may submit another properly completed proxy card with a
later date.
o You may send a written notice that you are revoking your proxy
to the Secretary of First Virtual Communications at its
principal executive office located at 3393 Octavius Drive,
Santa Clara, California 95054.
o You may attend the special meeting and vote in person. Simply
attending the meeting will not, by itself, revoke your proxy.
Can I vote via telephone or the internet?
Yes. Stockholders may grant a proxy to vote their shares by means of the
telephone or on the Internet. The law of Delaware, under which the Company is
incorporated, specifically permits electronically transmitted proxies, provided
that each proxy contains or is submitted with information from which the
inspector of election can determine that such proxy was authorized by the
stockholder. Votes submitted via the Internet or by telephone must be received
by 9:00 a.m., Pacific Daylight Time on March 9, 2003. Submitting your proxy via
the Internet or by telephone will not affect your right to vote in person should
you decide to attend the special meeting.
The telephone and Internet voting procedures below are designed to
authenticate stockholders' identities, to allow stockholders to grant a proxy to
vote their shares and to confirm that stockholders' instructions have been
recorded properly. Stockholders granting a proxy to vote via the Internet should
understand that there may be costs associated with electronic access, such as
usage charges from Internet access providers and telephone companies that must
be borne by the stockholder.
For Shares Registered in Your Name
Stockholders of record may go to http://www.computershare.com/us/proxy to
grant a proxy to vote their shares by means of the Internet. They will be
required to provide the control number and pin number located at the bottom of
their proxy cards. The voter will then be asked to complete an electronic proxy
card. The votes represented by the proxy will be generated on the computer
screen and the voter will be prompted to submit or revise them as desired. Any
stockholder using a touch-tone telephone may also grant a proxy to vote shares
by calling 1-800-816-8908 and following the recorded instructions.
For Shares Registered in the Name of a Broker or Bank
Most beneficial owners whose stock is held in street name receive
instruction for granting proxies from their banks, brokers or other agents,
rather than the Company's proxy card. A number of brokers and banks are
participating in a program provided through ADP Investor Communication Services
that offers the means to grant
4.
proxies to vote shares by means of the telephone and Internet. If your shares
are held in an account with a broker or bank participating in the ADP Investor
Communications Services program, you may grant a proxy to vote those shares
telephonically by calling the telephone number shown on the instruction form
received from your broker or bank, or via the Internet at ADP Investor
Communication Services' web site at http://www.proxyvote.com.
How are votes counted?
Votes will be counted by the inspector of election appointed for the
meeting, who will separately count "For" and "Against" votes, abstentions and
broker non-votes. Abstentions will be counted towards the vote total for each
proposal, and will have the same effect as "Against" votes. Broker non-votes are
counted towards a quorum, but are not counted for any purpose in determining
whether a matter has been approved.
How many votes are needed to approve the proposal?
The affirmative vote of the holders of a majority of the outstanding shares
of the Company's common stock and the Company's Series A Preferred Stock, voting
on an as converted to common stock basis, will be required to approve Proposal
No. 1. As a result, abstentions will have the same effect as "Against" votes.
Broker non-votes will have no effect.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum
will be present if at least a majority of the outstanding stock entitled to vote
is represented by votes at the meeting or by proxy. On the record date, there
were _______ shares of common stock and Series A Preferred Stock, on an as
converted to common stock basis, outstanding and entitled to vote. As a result,
_____ of these shares must be represented by votes at the meeting or by proxy to
have a quorum.
Your shares will be counted towards the quorum only if you submit a valid
proxy vote or vote at the meeting. Abstentions and broker non-votes will be
counted towards the quorum requirement. If there is no quorum, a majority of the
votes present at the meeting may adjourn the meeting to another date.
How can I find out the results of the voting at the special meeting?
Preliminary voting results will be announced at the special meeting. Final
voting results will be published in the Company's annual report on Form 10-K for
the fiscal year ended December 31, 2002.
5.
PROPOSAL 1
AMENDMENTS TO AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED, TO EFFECT A REVERSE STOCK SPLIT
BACKGROUND
The Company's common stock has been quoted on The Nasdaq SmallCap Market
under the symbol "FVCX" since the open of business on September 9, 2002. Prior
to that time, the Company's common stock was listed on The Nasdaq National
Market. The Company was transferred from The Nasdaq National Market to The
Nasdaq SmallCap Market because it failed to maintain a closing bid price of at
least $1.00 per share for a 30 consecutive trading day period after having
received notification from Nasdaq with respect to compliance with The Nasdaq
National Market's listing maintenance standards.
In order for the Company's common stock to continue to be quoted on the
Nasdaq SmallCap Market, the Company must satisfy various listing maintenance
standards established by Nasdaq. Among other things, the Company is required to
have stockholders' equity of at least $2.5 million and the Company's common
stock held by persons other than officers, directors and beneficial owners of
greater than 10% of the Company's total outstanding shares, often referred to as
the public float, must have an aggregate market value of at least $1 million.
Additionally, at least 300 persons must each own at least 100 shares of the
Company's common stock and the Company's common stock must have a minimum bid
price of at least $1.00 per share.
Under Nasdaq's listing maintenance standards, if the closing bid price of
shares of the Company's common stock is under $1.00 per share for 30 consecutive
trading days and does not thereafter reach $1.00 per share or higher for a
minimum of ten consecutive trading days during the 180 calendar days following
notification by Nasdaq, Nasdaq may delist the Company's common stock from
trading on The Nasdaq SmallCap Market. In that event, the Company's common stock
would trade on the OTC Bulletin Board or in the "pink sheets" maintained by the
National Quotation Bureau, Inc. These alternative markets are generally
considered to be markets that are less efficient and less broad than The Nasdaq
National Market or The Nasdaq SmallCap Market.
On October 2, 2002, the Company received a letter from Nasdaq advising it
that its common stock had not met The Nasdaq SmallCap Market's minimum bid price
requirement for 30 consecutive trading days and that, if the Company were unable
to demonstrate compliance with this requirement for ten consecutive trading days
during the 180 calendar day period ending on March 26, 2003, the Company's
common stock would be delisted from The Nasdaq SmallCap Market at that time.
In response to this notice, the board considered and has authorized a
series of proposed amendments to the Company's Amended and Restated Certificate
of Incorporation, as amended, to effect a reverse stock split, at the discretion
of the board pursuant to Section 242(c) of the Delaware General Corporation Law,
to be implemented for the purpose of increasing the market price of the
Company's common stock above The Nasdaq SmallCap Market's minimum bid
requirement. Under these proposed amendments, each three, four, five, six,
seven, eight, nine or ten outstanding shares of common stock would be combined,
converted and changed into one share of common stock with the effectiveness of
one of such amendments and the abandonment of the other amendments, or the
abandonment of all such amendments, to be determined by the board.
The board has recommended that this proposal be presented to the Company's
stockholders for approval. You are now being asked to vote upon these amendments
to the Amended and Restated Certificate of Incorporation, as amended, to effect
a reverse stock split of the Company's common stock whereby each outstanding
three, four, five, six, seven, eight, nine or ten shares would be combined,
converted and changed into one share of common stock. Subject to stockholder
approval, the board will have the sole discretion pursuant to Section 242(c) of
the Delaware General Corporation Law to elect, as it determines to be in the
best interests of First Virtual Communications and its stockholders, whether or
not to effect a reverse stock split, and if so, the number of whole shares of
common stock between and including three and ten which will be combined,
converted and exchanged into one share of common stock, at any time before the
first anniversary of this special meeting of stockholders.
The board believes that stockholder approval of a series of proposed
amendments granting the board this discretion, rather than approval of a
specified exchange ratio, provides the board with maximum flexibility to react
6.
to then-current market conditions and, therefore, is in the best interests of
First Virtual Communications and its stockholders.
The text of the forms of proposed amendments to the Company's Amended and
Restated Certificate of Incorporation, as amended, are attached to this proxy
statement as Appendices A-1 through A-8, provided however, that the text of
these amendments is subject to modification to include changes as may be
required by the office of the Secretary of State of the State of Delaware and as
the board may deem necessary or advisable to effect a reverse stock split. If
the board determines to effect one of the reverse stock splits by filing one of
these certificates of amendment with the Secretary of State of the State of
Delaware, all other proposed amendments will be abandoned. The board may also
elect not to do any reverse stock split.
If approved by the stockholders, and following that approval, the board
determines that effecting a reverse stock split is in the best interests of
First Virtual Communications and its stockholders, the reverse stock split will
become effective upon filing the applicable certificate of amendment with the
Secretary of State of the State of Delaware. The certificate of amendment filed
with the Secretary of State of the State of Delaware will contain the number of
shares selected by the board within the limits set forth in this proposal to be
combined into one share of common stock.
If the board elects to effect a reverse stock split following stockholder
approval, the number of issued and outstanding shares of common stock would be
reduced in accordance with an exchange ratio determined by the board within the
limits set forth in this proposal. Except for adjustments that may result from
the treatment of fractional shares as described below, each stockholder will
hold the same percentage of the Company's outstanding common stock immediately
following the reverse stock split as the stockholder held immediately prior to
the reverse stock split. The par value of the Company's common stock would
remain unchanged at $0.001 per share. The filing of the certificate of amendment
would not change the number of authorized shares of the Company's common stock.
Stockholders should note that the effect of the reverse stock split upon
the market prices for the Company's common stock cannot be accurately predicted.
In particular, there is no assurance that prices for shares of the Company's
common stock after the reverse stock split is implemented will be three to ten
times, as applicable, the prices for shares of the common stock immediately
prior to the reverse stock split. Furthermore, the proposed reverse stock splits
may not achieve the desired results which have been outlined above. Any reverse
stock split may adversely impact the market price of the Company's common stock
and any increased price per share of the common stock immediately after the
reverse stock split may not be sustained for any prolonged period of time.
In addition to the stock price criteria, the Company must maintain
compliance with all requirements for continued listing on The Nasdaq SmallCap
Market. The Company may not at some point in the future meet the continued
listing requirements following a reverse stock split.
REASONS FOR THE REVERSE STOCK SPLIT
The board believes that a reverse stock split may be desirable for a number
of reasons. First, as previously described, the board believes that a reverse
stock split may allow the Company to avoid having its common stock delisted from
The Nasdaq SmallCap Market. Second, the board believes a reverse stock split
could improve the marketability and liquidity of the Company's common Stock.
Third, the board believes that a reverse stock split could improve the Company's
ability to raise new capital.
As mentioned above, it is possible that, even if the Company implements a
reverse stock split, it may not be able to prevent Nasdaq from delisting its
common stock from The Nasdaq SmallCap Market. The board believes however, that a
reverse stock split would enhance the Company's ability to prevent its stock
from being delisted. During the period from October 2, 2002 through February 6,
2003, the closing sales price per share of the Company's common stock ranged
from a high of $ to a low of $ . The closing sales price on February 6, 2003 was
$ . There are several requirements that the Company must meet in order to
maintain its listing on The Nasdaq SmallCap Market, one of which is that the
Company's common stock have a minimum market price of $1.00. As mentioned,
above, the Company has been notified by Nasdaq that it has failed to maintain
the $1.00 minimum bid price. Although the Company may not be able to satisfy The
Nasdaq SmallCap Market minimum bid continued listing requirement in order to
prevent the Company's common stock from being delisted from The
7.
Nasdaq SmallCap Market, the board believes that a reverse stock split will
result in the market price of the Company's common stock rising to the level
necessary to satisfy the $1.00 minimum market price continued listing
requirement. However, the Company's common stock may not remain equal to or in
excess of $1.00 for a substantial period of time. The market price of the
Company's common stock is based also on other factors in addition to the number
of shares outstanding, including the Company's future performance.
The board also believes that the increased market price of the Company's
common stock expected as a result of a reverse stock split could improve the
marketability and liquidity of the Company's common stock and encourage interest
and trading in the common stock. Many brokerage houses and institutional
investors have internal policies and practices that either prohibit them from
investing in low-priced stocks or tend to discourage individual brokers from
recommending low-priced stocks to their customers. Some of those policies and
practices may function to make the processing of trades in low-priced stocks
economically unattractive to brokers. Additionally, because brokers' commissions
on low-priced stocks generally represent a higher percentage of the stock price
than commissions on higher-priced stocks, the current average price per share of
the Company's common stock can result in individual stockholders paying
transaction costs representing a higher percentage of their total share value
than would be the case if the share price were substantially higher. However, it
should be noted that a reverse stock split will decrease the total number of
shares outstanding, which may impact the Company's liquidity. If a reverse stock
split is implemented, however, holders of fewer than 100 shares of common stock
after the reverse stock split is effected may be charged brokerage fees that are
proportionately higher than holders of more than 100 shares of common stock. The
board is hopeful that the anticipated higher market price will reduce, to some
extent, the negative effects on the liquidity and marketability of the Company's
common stock inherent in some of the policies and practices of institutional
investors and brokerage houses described above.
The Company may require additional sources of capital to fund its existing
and future research and product development efforts and to fund continuing
operations. The Company believes that an increase in per share value of the
common stock, which the Company expects as a consequence of a reverse stock
split, may enhance the attractiveness of the common stock for certain segments
of the investing public and broaden the investor pool from which the Company
might be able to obtain additional financing. For example, because of the
trading volatility often associated with low-priced stocks, as a matter of
policy many institutional investors are prohibited from purchasing these stocks.
For the same reason, brokers often discourage their customers from purchasing
these stocks. The reduction in the number of outstanding shares of common stock
caused by a reverse stock split is anticipated initially to increase
proportionally the per share market price of the common stock. However, because
some investors may view a reverse stock split negatively in that it reduces the
number of shares available in the public market, the market price of the
Company's common stock may not reflect proportionately a reverse stock split.
BOARD DISCRETION TO IMPLEMENT REVERSE STOCK SPLIT
The board has considered the potential harm to the Company of a delisting
from The Nasdaq SmallCap Market, and currently believes that a reverse stock
split is the best way of achieving compliance with Nasdaq's minimum bid price
continued listing standard. If the reverse stock splits are approved by the
stockholders of the Company, a reverse stock split will be effected, if at all,
only upon a determination by the board, that one of the reverse stock splits,
with the exchange ratio determined by the board as described above, is in the
best interests of the Company and its stockholders at that time. This
determination will be based upon certain factors, including but not limited to
the then-current price of the Company's common stock, existing and expected
marketability and liquidity of the common stock, prevailing market conditions
and the likely effect on the market price of the common stock. Notwithstanding
approval of the reverse stock splits by the stockholders, the board may, in its
sole discretion, abandon all of the certificates of amendment and determine not
to effect any of the reverse stock splits, as permitted under Section 242(c) of
the Delaware General Corporation Law.
EFFECTS OF THE REVERSE STOCK SPLIT ON REGISTRATION AND VOTING RIGHTS
The Company's common stock is currently registered under Section 12(g) of
the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the
Company is subject to the periodic reporting and other requirements of the
Exchange Act. A reverse stock split would not affect the registration of the
Company's common stock under the Exchange Act. After a reverse stock split is
implemented, provided the Company maintains the $1.00 minimum bid price for at
least 10 consecutive trading days and satisfies the other requirements
8.
to maintain its listing, the Company's common stock would continue to be
reported on The Nasdaq SmallCap Market under the symbol "FVCX," although Nasdaq
would likely add the letter "D" to the end of the trading symbol for a period of
20 trading days to indicate that the reverse stock split has occurred.
Proportionate voting rights and other rights of the holders of the
Company's common stock would not be affected by the reverse stock split, other
than as a result of the payment of cash in lieu of fractional shares as
described below. For example, a holder of 2% of the voting power of the
outstanding shares of the Company's common stock immediately prior to the
effective time of the reverse stock split would continue to hold 2% of the
voting power of the outstanding shares of the Company's common stock after the
reverse stock split. Although the reverse stock split would not affect the
rights of stockholders or any stockholder's proportionate equity interest in the
Company, subject to the treatment of fractional shares, the number of authorized
shares of the Company's common stock would not be reduced and would increase
significantly the ability of the board to issue authorized and unissued shares
without further stockholder action. The number of stockholders of record would
not be affected by the reverse stock split, except to the extent that any
stockholder holds only a fractional share interest and receives cash for that
interest after the reverse stock split.
EFFECT OF THE REVERSE STOCK SPLIT ON THE AUTHORIZED BUT UNISSUED SHARES OF
COMMON STOCK
In addition, the number of authorized shares of the Company's common stock
will not change if the Company effects a reverse stock split. This will
effectively increase significantly the number of authorized but unissued shares
of the Company's common stock, which will increase significantly the ability of
the board to issue authorized and unissued shares without further stockholder
action. The issuance in the future of additional authorized shares may have the
effect of diluting the earnings per share and book value per share, as well as
the stock ownership and voting rights, of the currently outstanding shares of
the Company's common stock. The effective increase in the number of authorized
but unissued shares of common stock may be construed as having an anti-takeover
effect by permitting the issuance of shares to purchasers who might oppose a
hostile takeover bid or oppose any efforts to amend or repeal certain provisions
of the Amended and Restated Certificate of Incorporation, as amended, or bylaws
of the Company.
EFFECT OF THE REVERSE STOCK SPLIT ON STOCK OPTIONS, WARRANTS AND PAR VALUE
The reverse stock split would reduce the number of shares of the Company's
common stock available for issuance under the Company's 1999 Equity Incentive
Plan, or 1999 Plan, 1997 Equity Incentive Plan, or 1997 Plan, 1997 Employee
Stock Purchase Plan, or the 1997 ESPP, and 1997 Non-Employee Directors' Stock
Option Plan, or Directors' Option Plan, in proportion to the exchange ratio of
the reverse stock split. The number of shares of common stock currently
authorized for issuance under the 1999 Plan is 6,000,000, prior to giving effect
to a reverse stock split, the number of shares of common stock currently
authorized for issuance under the 1997 Plan is 5,875,000, prior to giving effect
to a reverse stock split, the number of shares of common stock currently
authorized for issuance under the 1997 ESPP is 1,350,000, prior to giving effect
to a reverse stock split, and the number of shares of common stock currently
authorized for issuance under the Directors' Option Plan is 1,500,000, prior to
giving effect to a reverse stock split. In addition, the number of shares of
common stock reserved for issuance pursuant to equity incentive plans adopted by
CUseeMe Networks, Inc. and its predecessor will similarly be reduced in
proportion to the exchange ratio of the reverse stock split. The par value of
the Company's common stock and Preferred Stock would remain at $0.001 per share
following the effective time of the reverse stock split, while the number of
shares of common stock issued and outstanding would be reduced.
The Company also has outstanding stock options and warrants to purchase
shares of common stock. Under the terms of the outstanding stock options and
warrants, the reverse stock split will effect a reduction in the number of
shares of common stock issuable upon exercise of the stock options and warrants
in proportion to the exchange ratio of the reverse stock split and will effect a
proportionate increase in the exercise price of the outstanding stock options
and warrants. In connection with the reverse stock split, the number of shares
of common stock issuable upon exercise or conversion of outstanding stock
options and warrants will be rounded to the nearest whole share and no cash
payment will be made in respect of such rounding.
9.
EFFECTIVE DATE
The reverse stock split would become effective as of 5:00 p.m. Eastern time
on the date of filing of the applicable certificate of amendment with the office
of the Secretary of State of the State of Delaware. Except as explained below
with respect to fractional shares, on the effective date of the reverse stock
split, each three, four, five, six, seven, eight, nine or ten shares, as
applicable, of common stock issued and outstanding immediately prior that
effective date will be, automatically and without any action on the part of the
stockholders, combined, converted and changed into one share of common stock in
accordance with the ratio of the reverse stock split determined by the board
within the limits set forth in this proposal.
PAYMENT FOR FRACTIONAL SHARES
No fractional shares of common stock would be issued as a result of the
reverse stock split. In lieu of any fractional share interest, each holder of
common stock who as a result of the reverse stock split would otherwise receive
a fractional share of common stock will be entitled to receive cash in an amount
equal to the product obtained by multiplying (i) the closing sales price of the
Company's common stock on the effective date of the reverse stock split as
reported on The Nasdaq SmallCap Market by (ii) the number of shares of the
Company's common stock held by a holder that would otherwise have been exchanged
for a fractional share interest. This amount would be issued to the holder in
the form of a check in accordance with the exchange procedures outlined under
"Exchange of Stock Certificates" below.
EXCHANGE OF STOCK CERTIFICATES
Shortly after the effective date of the reverse stock split, each holder of
an outstanding certificate theretofore representing shares of the Company's
common stock will receive from Computershare Trust Company, as the Company's
exchange agent for the reverse stock split, instructions for the surrender of
the certificate to the exchange agent. The instructions will include a form of
transmittal letter to be completed and returned to the exchange agent. As soon
as practicable after the surrender to the exchange agent of any certificate
which prior to the reverse stock split represented shares of the Company's
common stock, together with a duly executed transmittal letter and any other
documents the exchange agent may specify, the exchange agent shall deliver to
the person in whose name the certificate had been issued certificates registered
in the name of that person representing the number of full shares of common
stock into which the shares of common stock previously represented by the
surrendered certificate shall have been reclassified and a check for any amounts
to be paid in cash in lieu of any fractional share interest. Each certificate
representing shares of common stock issued in connection with the reverse stock
split will continue to bear any legends restricting the transfer of the shares
that were borne by the surrendered certificates representing the shares of
common stock. Until surrendered as contemplated herein, each certificate which
immediately prior to the reverse stock split represented any shares of common
stock shall be deemed at and after the reverse stock split to represent the
number of full shares of common stock contemplated by the preceding sentence.
No service charges, brokerage commissions or transfer taxes shall be
payable by any holder of any certificate which prior to approval of the reverse
stock split represented any shares of common stock, except that if any
certificates of common stock are to be issued in a name other than that in which
the certificates for shares of common stock surrendered are registered, it shall
be a condition of the issuance that (i) the person requesting the issuance shall
pay to the Company any transfer taxes payable by reason thereof (or prior to
transfer of the certificate, if any) or establish to the satisfaction of the
Company that the taxes have been paid or are not payable, (ii) the transfer
shall comply with all applicable federal and state securities laws, and (iii)
the surrendered certificate shall be properly endorsed and otherwise be in
proper form for transfer.
NO APPRAISAL RIGHTS
Under Delaware law, stockholders of the Company are not entitled to
appraisal rights with respect to the reverse stock split.
ACCOUNTING CONSEQUENCES
The par value per share of the Company's common stock would remain
unchanged at $0.001 per share after the reverse stock split. On the effective
date of the reverse stock split, the stated capital on the Company's balance
sheet attributable to common stock will be reduced proportionally, based on the
exchange ratio of the
10.
reverse stock split, from its present amount, and the additional paid-in-capital
account shall be credited with the amount by which the stated capital is
reduced. The per share common stock net income or loss and net book value will
be increased because there will be fewer shares of the Company's common stock
outstanding. The Company does not anticipate that any other accounting
consequences would arise as result of the reverse stock split.
MATERIAL FEDERAL U.S. INCOME TAX CONSEQUENCES OF THE EFFECTIVE REVERSE STOCK
SPLIT
The following is a summary of the material income tax considerations of the
reverse stock split. It addresses only stockholders who hold the pre-reverse
stock split shares and post-reverse stock split shares as capital assets. It
does not purport to be complete and does not address stockholders subject to
special rules, such as financial institutions, tax-exempt organizations,
insurance companies, dealers in securities, mutual funds, foreign stockholders,
stockholders who hold the pre-reverse stock split shares as part of a straddle,
hedge, or conversion transaction, stockholders who hold the pre-reverse stock
split shares as qualified small business stock within the meaning of Section
1202 of the Internal Revenue Code of 1986, as amended, referred to below as the
Code, stockholders who are subject to the alternative minimum tax provisions of
the Code, and stockholders who acquired their pre-reverse stock split shares
pursuant to the exercise of employee stock options or otherwise as compensation.
This summary is based upon current law, which may change, possibly even
retroactively. It does not address tax considerations under state, local,
foreign, and other laws. Furthermore, the Company has not obtained a ruling from
the Internal Revenue Service or an opinion of legal or tax counsel with respect
to the consequences of the reverse stock split. Each stockholder is advised to
consult his or her tax advisor as to his or her own situation.
The reverse stock split is intended to constitute a reorganization within
the meaning of Section 368 of the Code. Assuming the reverse stock split
qualifies as a reorganization, a stockholder generally will not recognize gain
or loss on the reverse stock split, except to the extent of cash, if any,
received in lieu of a fractional share interest in the post-reverse stock split
shares. The aggregate tax basis of the post-reverse stock split shares received
will be equal to the aggregate tax basis of the pre-reverse split shares
exchanged therefore, excluding any portion of the holder's basis allocated to
fractional shares, and the holding period of the post-reverse stock split shares
received will include the holding period of the pre-reverse stock split shares
exchanged.
A holder of the pre-reverse stock split shares who receives cash will
generally recognize gain or loss equal to the difference between the portion of
the tax basis of the pre-reverse stock split shares allocated to the fractional
share interest and the cash received. This gain or loss will be a capital gain
or loss and will be short term if the pre-reverse stock split shares were held
for one year or less and long term if held more than one year.
No gain or loss will be recognized by the Company as a result of the
reverse stock split.
REQUIRED VOTE
The affirmative vote of the holders of a majority of the outstanding shares
of the common stock and the Series A Preferred Stock, voting on an as converted
to common stock basis, will be required to approve the reverse stock splits and
the certificates of amendment to the Company's Amended and Restated Certificate
of Incorporation, as amended. As a result, abstentions will have the same effect
as negative votes. Broker non-votes will have no effect.
The board unanimously recommends a vote IN FAVOR of Proposal 1.
11.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of February 1, 2003 by
o all those known by the Company to be the beneficial owner of
more than 5% of the Company's common stock;
o each director;
o the Company's chief executive officer and four other most
highly compensated executive officers at December 31, 2002;
and
o all directors and executive officers as a group.
BENEFICIAL OWNERSHIP(2)
-----------------------
BENEFICIAL OWNER(1) NUMBER OF SHARES PERCENT OF TOTAL
- ------------------- ---------------- ----------------
Entities Affiliated with Special Situations Fund (3).... 8,928,714 21%
153 E. 53rd Street
55th Floor
New York, NY 10022
Vulcan Inc. (4)......................................... 5,139,805 11%
505 Fifth Avenue South
Seattle, WA 98104
Ralph Ungermann (5)..................................... 2,573,570 6%
Edward Harris (6)....................................... 129,732 *
Adam Stettner (7)....................................... 1,540,118 4%
Norman Gaut (8)......................................... 382,733 *
Truman Cole (9)......................................... 3,173 *
Frank Kaplan (10)....................................... - -
Julia Schloss (11)...................................... 26,608 *
Frederik Strecker (12).................................. 151,086 *
Jonathan Morgan (13).................................... 196,010 *
Jeffery Krampf (14)..................................... 33,231 *
Robert Romano (15)...................................... 108,333 *
David Bundy (16)........................................ 205,264 *
Timothy Rogers (17)..................................... 79,166 *
Killko Caballero (18)................................... - -
All directors and executive officers as a group
(14 persons) (19).................................. 5,429,024 12%
12.
- ---------------
* Less than one percent.
(1) Unless otherwise noted in the table, the address for the Company's
executive officers and directors is: c/o First Virtual Communications,
Inc., 3393 Octavius Drive, Santa Clara, CA 95054.
(2) This table is based upon information supplied by officers, directors,
principal stockholders and Schedules 13D and 13G filed with the SEC.
Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to
securities. Beneficial ownership also includes shares of stock subject
to options, warrants and other rights to acquire shares of our common
stock that were exercisable within 60 days of February 1, 2003.
Percentage of beneficial ownership is based on 40,483,594 shares of
common stock outstanding as of February 1, 2003. In computing the
number and percentage of shares beneficially owned by each stockholder
identified in the table, shares of common stock subject to options,
warrants and other rights to acquire shares of our common stock that
were exercisable on February 1, 2003 or exercisable within 60 days of
February 1, 2003 by such stockholder are counted as outstanding, while
these shares are not counted as outstanding for computing the
percentage ownership of any other stockholder.
Unless otherwise indicated in the footnotes to this table and subject
to community property laws where applicable, the Company believes that
each of the stockholders named in this table has sole voting and
investment power with respect to the shares indicated as beneficially
owned.
(3) Includes 4,411,164 shares of common stock held by Special Situations
Fund III, L.P. ("SSF III") and 1,250,000 shares of common stock
issuable upon exercise of a warrant held by SSF III, 1,445,028 shares
held by Special Situations Cayman Fund, L.P. ("SSCF") and 416,700
shares of common stock issuable upon exercise of a warrant held by
SSCF, and 989,172 shares held by Special Situations Technology Fund,
L.P. ("SSTF"), a fund for which Adam Stettner, a member of the
Company's Board, serves as the managing director, and 416,650 shares of
common stock issuable upon exercise of a warrant held by SSTF. Austin
W. Marxe and David Greenhouse, who serve as officers, directors and
members or principal shareholders of the investment advisors to the
funds, claim sole voting and dispositive powers for all 8,928,714
shares.
(4) Includes 892,591 shares of common stock issuable upon exercise of a
warrant held by Vulcan, Inc. and 4,247,214 shares of common stock
issuable upon conversion of shares of Series A Preferred Stock held by
Vulcan, Inc.
(5) Includes 79,094 shares of common stock issuable upon exercise of a
warrant held by Mr. Ungermann and 2,174,577 shares of common stock held
in the name of Ralph Ungermann, Trustee or Successor Trustee of the
Ralph K. Ungermann Living Trust U/A/D May 18, 1988, as amended, and
319,899 shares Mr. Ungermann has the right to acquire pursuant to
outstanding options exercisable within 60 days of February 1, 2003.
(6) Includes 128,732 shares of common stock that Mr. Harris has the right
to acquire pursuant to outstanding options exercisable within 60 days
of February 1, 2003.
(7) Includes 989,172 shares held by SSTF, 416,650 shares of common stock
issuable upon exercise of a warrant held by SSTF and 134,296 shares of
common stock that Mr. Stettner has the right to acquire pursuant to
outstanding options exercisable within 60 days of February 1, 2003. The
shares deemed to be beneficially owned by Mr. Stettner exclude the
shares described in note three above for SSF III and SSCF, for which
Mr. Stettner disclaims beneficial ownership except to the extent of his
pecuniary interest therein, if any.
(8) Includes 104,167 shares of common stock issuable upon exercise of a
warrant held by Mr. Gaut and 11,532 shares of common stock that Mr.
Gaut has the right to acquire pursuant to outstanding options
exercisable within 60 days of February 1, 2003.
(9) Mr. Cole rejoined the Company as Chief Financial Officer in December
2002.
(10) Mr. Kaplan joined the Company as Vice President of Worldwide Sales in
December 2002.
(11) Includes 26,608 shares of common stock that Ms. Schloss has the right
to acquire pursuant to outstanding options exercisable within 60 days
of February 1, 2003.
13.
(12) Includes 151,086 shares of common stock that Mr. Strecker has the right
to acquire pursuant to outstanding options exercisable within 60 days
of February 1, 2003.
(13) Includes 196,010 shares of common stock that Mr. Morgan has the right
to acquire pursuant to outstanding options exercisable within 60 days
of February 1, 2003.
(14) Mr. Krampf's services as an employee of the Company ended in January
2003.
(15) Includes 108,333 shares of common stock that Mr. Romano has the right
to acquire pursuant to outstanding options exercisable within 60 days
of February 1, 2003.
(16) Includes 205,264 shares of common stock that Mr. Bundy has the right to
acquire pursuant to outstanding options exercisable within 60 days of
February 1, 2003.
(17) Includes 79,166 shares of common stock that Mr. Rogers has the right to
acquire pursuant to outstanding options exercisable within 60 days of
February 1, 2003. Mr. Rogers' services as an employee of the Company
ended in December 2002.
(18) Mr. Caballero's services as an employee of the Company ended in October
2002.
(19) Includes shares described in the notes above, as applicable, which the
executive officers and directors of the Company have the right to
acquire within 60 days of February 1, 2003.
14.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Special Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
Jonathan G. Morgan
Chief Executive Officer and President
February 10, 2003
DELIVERY OF THIS PROXY STATEMENT
The Securities and Exchange Commission has adopted rules that permit
companies and intermediaries such as brokers to satisfy the delivery
requirements for proxy statements with respect to two or more security holders
sharing the same address by delivering a single proxy statement addressed to
those security holders. This process, which is commonly referred to as
'householding,' potentially means extra convenience for security holders and
cost savings for companies.
This year, a number of brokers with account holders who are First Virtual
Communications stockholders will be `householding' the Company's proxy
materials. A single proxy statement will be delivered to multiple stockholders
sharing an address unless contrary instructions have been received from the
affected stockholders. Once you have received notice from your broker or the
Company that they will be `householding' communications to your address,
'householding' will continue until you are notified otherwise or until you
revoke your consent. If, at any time, you no longer wish to participate in
'householding' and would prefer to receive a separate proxy statement, please
notify your broker, direct your written request to Julia Schloss, Vice President
and General Counsel, First Virtual Communications, 3393 Octavius Drive, Santa
Clara, California 95054, or contact Julia Schloss at 408-330-7312. Upon your
written or oral request to the Company, the Company will promptly deliver to you
a separate copy of the proxy statement.
Stockholders who currently receive multiple copies of the proxy statement at
their address and would like to request `householding' of their communications
should contact their broker.
15.
APPENDIX A-1
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
FIRST VIRTUAL COMMUNICATIONS, INC.
FIRST VIRTUAL COMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "DGCL"), DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is First Virtual Communications,
Inc., and the original name of the Corporation is First Virtual Merger
Corporation.
SECOND: The date on which the Corporation's original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware is
October 29, 1997. The date on which the Corporation's Certificate of Ownership
and Merger merging First Virtual Corporation and First Virtual Merger
Corporation was filed with the Secretary of State of the State of Delaware is
December 2, 1997. The date of the filing of the Corporation's Amended and
Restated Certificate with the Secretary of State of the State of Delaware is May
4, 1998 (the "Restated Certificate"). The date of the filing of the
Corporation's Certificate of Ownership and Merger merging FVC.COM, Inc. and
First Virtual Corporation with the Secretary of State of the State of Delaware
is August 3, 1998. The date on which the Corporation's Certificate of
Designation of Series A Convertible Preferred Stock was filed with the Secretary
of State of the State of Delaware is June 8, 2000. The date of the filing of the
Corporation's Certificate of Ownership and Merger merging First Virtual
Communications, Inc. and FVC.COM, Inc. with the Secretary of State of the State
of Delaware is February 2, 2001. The date on which the Corporation's first
Certificate of Amendment to the Restated Certificate was filed with the
Secretary of State of the State of Delaware is June 19, 2001.
THIRD: This Certificate of Amendment amends certain provisions of the
Restated Certificate and has been duly adopted by the Board of Directors of the
Corporation acting in accordance with the provisions of Sections 141(f) and 242
of the DGCL, and further adopted in accordance with the provisions of Sections
211 and 242 of the DGCL by the stockholders of the Corporation.
FOURTH: Paragraph A of Article IV of the Amended and Restated
Certificate of Incorporation shall be amended to read in its entirety as
follows:
"A. This corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the
corporation is authorized to issue is One Hundred Five Million
(105,000,000) shares. One Hundred Million (100,000,000) shares
shall be Common Stock, each having a par value of one-tenth of
one cent ($0.001). Five Million (5,000,000) shares shall be
Preferred Stock,
1.
each having a par value of one-tenth of one cent ($0.001).
Upon the filing of this Certificate of Amendment, every three
(3) shares of Common Stock outstanding shall be combined into
one (1) share of Common Stock; provided however, that the
Corporation shall issue no fractional shares of Common Stock,
but shall instead pay to any stockholder who would be entitled
to receive a fractional share as a result of the actions set
forth herein a sum in cash equal to the fair market value of
the shares constituting such fractional share based upon the
closing sales price of the Corporation's Common Stock as
reported on the Nasdaq SmallCap Market as of the date this
Certificate of Amendment is filed with the Secretary of the
State of Delaware."
IN WITNESS WHEREOF, First Virtual Communications, Inc. has caused this
Certificate of Amendment to be signed by its Chief Executive Officer and
President as of _________________, 2003.
FIRST VIRTUAL COMMUNICATIONS, INC.
By:
---------------------------------------
Jonathan G. Morgan
Chief Executive Officer and President
2.
APPENDIX A-2
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
FIRST VIRTUAL COMMUNICATIONS, INC.
FIRST VIRTUAL COMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "DGCL"), DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is First Virtual Communications,
Inc., and the original name of the Corporation is First Virtual Merger
Corporation.
SECOND: The date on which the Corporation's original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware is
October 29, 1997. The date on which the Corporation's Certificate of Ownership
and Merger merging First Virtual Corporation and First Virtual Merger
Corporation was filed with the Secretary of State of the State of Delaware is
December 2, 1997. The date of the filing of the Corporation's Amended and
Restated Certificate with the Secretary of State of the State of Delaware is May
4, 1998 (the "Restated Certificate"). The date of the filing of the
Corporation's Certificate of Ownership and Merger merging FVC.COM, Inc. and
First Virtual Corporation with the Secretary of State of the State of Delaware
is August 3, 1998. The date on which the Corporation's Certificate of
Designation of Series A Convertible Preferred Stock was filed with the Secretary
of State of the State of Delaware is June 8, 2000. The date of the filing of the
Corporation's Certificate of Ownership and Merger merging First Virtual
Communications, Inc. and FVC.COM, Inc. with the Secretary of State of the State
of Delaware is February 2, 2001. The date on which the Corporation's first
Certificate of Amendment to the Restated Certificate was filed with the
Secretary of State of the State of Delaware is June 19, 2001.
THIRD: This Certificate of Amendment amends certain provisions of the
Restated Certificate and has been duly adopted by the Board of Directors of the
Corporation acting in accordance with the provisions of Sections 141(f) and 242
of the DGCL, and further adopted in accordance with the provisions of Sections
211 and 242 of the DGCL by the stockholders of the Corporation.
FOURTH: Paragraph A of Article IV of the Amended and Restated
Certificate of Incorporation shall be amended to read in its entirety as
follows:
"A. This corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the
corporation is authorized to issue is One Hundred Five Million
(105,000,000) shares. One Hundred Million (100,000,000) shares
shall be Common Stock, each having a par value of one-tenth of
one cent ($0.001). Five Million (5,000,000) shares shall be
Preferred Stock,
1.
each having a par value of one-tenth of one cent ($0.001).
Upon the filing of this Certificate of Amendment, every four
(4) shares of Common Stock outstanding shall be combined into
one (1) share of Common Stock; provided however, that the
Corporation shall issue no fractional shares of Common Stock,
but shall instead pay to any stockholder who would be entitled
to receive a fractional share as a result of the actions set
forth herein a sum in cash equal to the fair market value of
the shares constituting such fractional share based upon the
closing sales price of the Corporation's Common Stock as
reported on the Nasdaq SmallCap Market as of the date this
Certificate of Amendment is filed with the Secretary of the
State of Delaware."
IN WITNESS WHEREOF, First Virtual Communications, Inc. has caused this
Certificate of Amendment to be signed by its Chief Executive Officer and
President as of _________________, 2003.
FIRST VIRTUAL COMMUNICATIONS, INC.
By:
---------------------------------------
Jonathan G. Morgan
Chief Executive Officer and President
2.
APPENDIX A-3
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
FIRST VIRTUAL COMMUNICATIONS, INC.
FIRST VIRTUAL COMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "DGCL"), DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is First Virtual Communications,
Inc., and the original name of the Corporation is First Virtual Merger
Corporation.
SECOND: The date on which the Corporation's original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware is
October 29, 1997. The date on which the Corporation's Certificate of Ownership
and Merger merging First Virtual Corporation and First Virtual Merger
Corporation was filed with the Secretary of State of the State of Delaware is
December 2, 1997. The date of the filing of the Corporation's Amended and
Restated Certificate with the Secretary of State of the State of Delaware is May
4, 1998 (the "Restated Certificate"). The date of the filing of the
Corporation's Certificate of Ownership and Merger merging FVC.COM, Inc. and
First Virtual Corporation with the Secretary of State of the State of Delaware
is August 3, 1998. The date on which the Corporation's Certificate of
Designation of Series A Convertible Preferred Stock was filed with the Secretary
of State of the State of Delaware is June 8, 2000. The date of the filing of the
Corporation's Certificate of Ownership and Merger merging First Virtual
Communications, Inc. and FVC.COM, Inc. with the Secretary of State of the State
of Delaware is February 2, 2001. The date on which the Corporation's first
Certificate of Amendment to the Restated Certificate was filed with the
Secretary of State of the State of Delaware is June 19, 2001.
THIRD: This Certificate of Amendment amends certain provisions of the
Restated Certificate and has been duly adopted by the Board of Directors of the
Corporation acting in accordance with the provisions of Sections 141(f) and 242
of the DGCL, and further adopted in accordance with the provisions of Sections
211 and 242 of the DGCL by the stockholders of the Corporation.
FOURTH: Paragraph A of Article IV of the Amended and Restated
Certificate of Incorporation shall be amended to read in its entirety as
follows:
"A. This corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the
corporation is authorized to issue is One Hundred Five Million
(105,000,000) shares. One Hundred Million (100,000,000) shares
shall be Common Stock, each having a par value of one-tenth of
one cent ($0.001). Five Million (5,000,000) shares shall be
Preferred Stock,
1.
each having a par value of one-tenth of one cent ($0.001).
Upon the filing of this Certificate of Amendment, every five
(5) shares of Common Stock outstanding shall be combined into
one (1) share of Common Stock; provided however, that the
Corporation shall issue no fractional shares of Common Stock,
but shall instead pay to any stockholder who would be entitled
to receive a fractional share as a result of the actions set
forth herein a sum in cash equal to the fair market value of
the shares constituting such fractional share based upon the
closing sales price of the Corporation's Common Stock as
reported on the Nasdaq SmallCap Market as of the date this
Certificate of Amendment is filed with the Secretary of the
State of Delaware."
IN WITNESS WHEREOF, First Virtual Communications, Inc. has caused this
Certificate of Amendment to be signed by its Chief Executive Officer and
President as of _________________, 2003.
FIRST VIRTUAL COMMUNICATIONS, INC.
By:
---------------------------------------
Jonathan G. Morgan
Chief Executive Officer and President
2.
APPENDIX A-4
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
FIRST VIRTUAL COMMUNICATIONS, INC.
FIRST VIRTUAL COMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "DGCL"), DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is First Virtual Communications,
Inc., and the original name of the Corporation is First Virtual Merger
Corporation.
SECOND: The date on which the Corporation's original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware is
October 29, 1997. The date on which the Corporation's Certificate of Ownership
and Merger merging First Virtual Corporation and First Virtual Merger
Corporation was filed with the Secretary of State of the State of Delaware is
December 2, 1997. The date of the filing of the Corporation's Amended and
Restated Certificate with the Secretary of State of the State of Delaware is May
4, 1998 (the "Restated Certificate"). The date of the filing of the
Corporation's Certificate of Ownership and Merger merging FVC.COM, Inc. and
First Virtual Corporation with the Secretary of State of the State of Delaware
is August 3, 1998. The date on which the Corporation's Certificate of
Designation of Series A Convertible Preferred Stock was filed with the Secretary
of State of the State of Delaware is June 8, 2000. The date of the filing of the
Corporation's Certificate of Ownership and Merger merging First Virtual
Communications, Inc. and FVC.COM, Inc. with the Secretary of State of the State
of Delaware is February 2, 2001. The date on which the Corporation's first
Certificate of Amendment to the Restated Certificate was filed with the
Secretary of State of the State of Delaware is June 19, 2001.
THIRD: This Certificate of Amendment amends certain provisions of the
Restated Certificate and has been duly adopted by the Board of Directors of the
Corporation acting in accordance with the provisions of Sections 141(f) and 242
of the DGCL, and further adopted in accordance with the provisions of Sections
211 and 242 of the DGCL by the stockholders of the Corporation.
FOURTH: Paragraph A of Article IV of the Amended and Restated
Certificate of Incorporation shall be amended to read in its entirety as
follows:
"A. This corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the
corporation is authorized to issue is One Hundred Five Million
(105,000,000) shares. One Hundred Million (100,000,000) shares
shall be Common Stock, each having a par value of one-tenth of
one cent ($0.001). Five Million (5,000,000) shares shall be
Preferred Stock,
1.
each having a par value of one-tenth of one cent ($0.001).
Upon the filing of this Certificate of Amendment, every six
(6) shares of Common Stock outstanding shall be combined into
one (1) share of Common Stock; provided however, that the
Corporation shall issue no fractional shares of Common Stock,
but shall instead pay to any stockholder who would be entitled
to receive a fractional share as a result of the actions set
forth herein a sum in cash equal to the fair market value of
the shares constituting such fractional share based upon the
closing sales price of the Corporation's Common Stock as
reported on the Nasdaq SmallCap Market as of the date this
Certificate of Amendment is filed with the Secretary of the
State of Delaware."
IN WITNESS WHEREOF, First Virtual Communications, Inc. has caused this
Certificate of Amendment to be signed by its Chief Executive Officer and
President as of _________________, 2003.
FIRST VIRTUAL COMMUNICATIONS, INC.
By:
---------------------------------------
Jonathan G. Morgan
Chief Executive Officer and President
2.
APPENDIX A-5
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
FIRST VIRTUAL COMMUNICATIONS, INC.
FIRST VIRTUAL COMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "DGCL"), DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is First Virtual Communications,
Inc., and the original name of the Corporation is First Virtual Merger
Corporation.
SECOND: The date on which the Corporation's original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware is
October 29, 1997. The date on which the Corporation's Certificate of Ownership
and Merger merging First Virtual Corporation and First Virtual Merger
Corporation was filed with the Secretary of State of the State of Delaware is
December 2, 1997. The date of the filing of the Corporation's Amended and
Restated Certificate with the Secretary of State of the State of Delaware is May
4, 1998 (the "Restated Certificate"). The date of the filing of the
Corporation's Certificate of Ownership and Merger merging FVC.COM, Inc. and
First Virtual Corporation with the Secretary of State of the State of Delaware
is August 3, 1998. The date on which the Corporation's Certificate of
Designation of Series A Convertible Preferred Stock was filed with the Secretary
of State of the State of Delaware is June 8, 2000. The date of the filing of the
Corporation's Certificate of Ownership and Merger merging First Virtual
Communications, Inc. and FVC.COM, Inc. with the Secretary of State of the State
of Delaware is February 2, 2001. The date on which the Corporation's first
Certificate of Amendment to the Restated Certificate was filed with the
Secretary of State of the State of Delaware is June 19, 2001.
THIRD: This Certificate of Amendment amends certain provisions of the
Restated Certificate and has been duly adopted by the Board of Directors of the
Corporation acting in accordance with the provisions of Sections 141(f) and 242
of the DGCL, and further adopted in accordance with the provisions of Sections
211 and 242 of the DGCL by the stockholders of the Corporation.
FOURTH: Paragraph A of Article IV of the Amended and Restated
Certificate of Incorporation shall be amended to read in its entirety as
follows:
"A. This corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the
corporation is authorized to issue is One Hundred Five Million
(105,000,000) shares. One Hundred Million (100,000,000) shares
shall be Common Stock, each having a par value of one-tenth of
one cent ($0.001). Five Million (5,000,000) shares shall be
Preferred Stock,
1.
each having a par value of one-tenth of one cent ($0.001).
Upon the filing of this Certificate of Amendment, every seven
(7) shares of Common Stock outstanding shall be combined into
one (1) share of Common Stock; provided however, that the
Corporation shall issue no fractional shares of Common Stock,
but shall instead pay to any stockholder who would be entitled
to receive a fractional share as a result of the actions set
forth herein a sum in cash equal to the fair market value of
the shares constituting such fractional share based upon the
closing sales price of the Corporation's Common Stock as
reported on the Nasdaq SmallCap Market as of the date this
Certificate of Amendment is filed with the Secretary of the
State of Delaware."
IN WITNESS WHEREOF, First Virtual Communications, Inc. has caused this
Certificate of Amendment to be signed by its Chief Executive Officer and
President as of _________________, 2003.
FIRST VIRTUAL COMMUNICATIONS, INC.
By:
---------------------------------------
Jonathan G. Morgan
Chief Executive Officer and President
2.
APPENDIX A-6
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
FIRST VIRTUAL COMMUNICATIONS, INC.
FIRST VIRTUAL COMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "DGCL"), DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is First Virtual Communications,
Inc., and the original name of the Corporation is First Virtual Merger
Corporation.
SECOND: The date on which the Corporation's original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware is
October 29, 1997. The date on which the Corporation's Certificate of Ownership
and Merger merging First Virtual Corporation and First Virtual Merger
Corporation was filed with the Secretary of State of the State of Delaware is
December 2, 1997. The date of the filing of the Corporation's Amended and
Restated Certificate with the Secretary of State of the State of Delaware is May
4, 1998 (the "Restated Certificate"). The date of the filing of the
Corporation's Certificate of Ownership and Merger merging FVC.COM, Inc. and
First Virtual Corporation with the Secretary of State of the State of Delaware
is August 3, 1998. The date on which the Corporation's Certificate of
Designation of Series A Convertible Preferred Stock was filed with the Secretary
of State of the State of Delaware is June 8, 2000. The date of the filing of the
Corporation's Certificate of Ownership and Merger merging First Virtual
Communications, Inc. and FVC.COM, Inc. with the Secretary of State of the State
of Delaware is February 2, 2001. The date on which the Corporation's first
Certificate of Amendment to the Restated Certificate was filed with the
Secretary of State of the State of Delaware is June 19, 2001.
THIRD: This Certificate of Amendment amends certain provisions of the
Restated Certificate and has been duly adopted by the Board of Directors of the
Corporation acting in accordance with the provisions of Sections 141(f) and 242
of the DGCL, and further adopted in accordance with the provisions of Sections
211 and 242 of the DGCL by the stockholders of the Corporation.
FOURTH: Paragraph A of Article IV of the Amended and Restated
Certificate of Incorporation shall be amended to read in its entirety as
follows:
"A. This corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the
corporation is authorized to issue is One Hundred Five Million
(105,000,000) shares. One Hundred Million (100,000,000) shares
shall be Common Stock, each having a par value of one-tenth of
one cent ($0.001). Five Million (5,000,000) shares shall be
Preferred Stock,
1.
each having a par value of one-tenth of one cent ($0.001).
Upon the filing of this Certificate of Amendment, every eight
(8) shares of Common Stock outstanding shall be combined into
one (1) share of Common Stock; provided however, that the
Corporation shall issue no fractional shares of Common Stock,
but shall instead pay to any stockholder who would be entitled
to receive a fractional share as a result of the actions set
forth herein a sum in cash equal to the fair market value of
the shares constituting such fractional share based upon the
closing sales price of the Corporation's Common Stock as
reported on the Nasdaq SmallCap Market as of the date this
Certificate of Amendment is filed with the Secretary of the
State of Delaware."
IN WITNESS WHEREOF, First Virtual Communications, Inc. has caused this
Certificate of Amendment to be signed by its Chief Executive Officer and
President as of _________________, 2003.
FIRST VIRTUAL COMMUNICATIONS, INC.
By:
---------------------------------------
Jonathan G. Morgan
Chief Executive Officer and President
2.
APPENDIX A-7
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
FIRST VIRTUAL COMMUNICATIONS, INC.
FIRST VIRTUAL COMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "DGCL"), DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is First Virtual Communications,
Inc., and the original name of the Corporation is First Virtual Merger
Corporation.
SECOND: The date on which the Corporation's original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware is
October 29, 1997. The date on which the Corporation's Certificate of Ownership
and Merger merging First Virtual Corporation and First Virtual Merger
Corporation was filed with the Secretary of State of the State of Delaware is
December 2, 1997. The date of the filing of the Corporation's Amended and
Restated Certificate with the Secretary of State of the State of Delaware is May
4, 1998 (the "Restated Certificate"). The date of the filing of the
Corporation's Certificate of Ownership and Merger merging FVC.COM, Inc. and
First Virtual Corporation with the Secretary of State of the State of Delaware
is August 3, 1998. The date on which the Corporation's Certificate of
Designation of Series A Convertible Preferred Stock was filed with the Secretary
of State of the State of Delaware is June 8, 2000. The date of the filing of the
Corporation's Certificate of Ownership and Merger merging First Virtual
Communications, Inc. and FVC.COM, Inc. with the Secretary of State of the State
of Delaware is February 2, 2001. The date on which the Corporation's first
Certificate of Amendment to the Restated Certificate was filed with the
Secretary of State of the State of Delaware is June 19, 2001.
THIRD: This Certificate of Amendment amends certain provisions of the
Restated Certificate and has been duly adopted by the Board of Directors of the
Corporation acting in accordance with the provisions of Sections 141(f) and 242
of the DGCL, and further adopted in accordance with the provisions of Sections
211 and 242 of the DGCL by the stockholders of the Corporation.
FOURTH: Paragraph A of Article IV of the Amended and Restated
Certificate of Incorporation shall be amended to read in its entirety as
follows:
"A. This corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the
corporation is authorized to issue is One Hundred Five Million
(105,000,000) shares. One Hundred Million (100,000,000) shares
shall be Common Stock, each having a par value of one-tenth of
one cent ($0.001). Five Million (5,000,000) shares shall be
Preferred Stock,
1.
each having a par value of one-tenth of one cent ($0.001).
Upon the filing of this Certificate of Amendment, every nine
(9) shares of Common Stock outstanding shall be combined into
one (1) share of Common Stock; provided however, that the
Corporation shall issue no fractional shares of Common Stock,
but shall instead pay to any stockholder who would be entitled
to receive a fractional share as a result of the actions set
forth herein a sum in cash equal to the fair market value of
the shares constituting such fractional share based upon the
closing sales price of the Corporation's Common Stock as
reported on the Nasdaq SmallCap Market as of the date this
Certificate of Amendment is filed with the Secretary of the
State of Delaware."
IN WITNESS WHEREOF, First Virtual Communications, Inc. has caused this
Certificate of Amendment to be signed by its Chief Executive Officer and
President as of _________________, 2003.
FIRST VIRTUAL COMMUNICATIONS, INC.
By:
---------------------------------------
Jonathan G. Morgan
Chief Executive Officer and President
2.
APPENDIX A-8
CERTIFICATE OF AMENDMENT OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
FIRST VIRTUAL COMMUNICATIONS, INC.
FIRST VIRTUAL COMMUNICATIONS, INC. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of the
State of Delaware (the "DGCL"), DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is First Virtual Communications,
Inc., and the original name of the Corporation is First Virtual Merger
Corporation.
SECOND: The date on which the Corporation's original Certificate of
Incorporation was filed with the Secretary of State of the State of Delaware is
October 29, 1997. The date on which the Corporation's Certificate of Ownership
and Merger merging First Virtual Corporation and First Virtual Merger
Corporation was filed with the Secretary of State of the State of Delaware is
December 2, 1997. The date of the filing of the Corporation's Amended and
Restated Certificate with the Secretary of State of the State of Delaware is May
4, 1998 (the "Restated Certificate"). The date of the filing of the
Corporation's Certificate of Ownership and Merger merging FVC.COM, Inc. and
First Virtual Corporation with the Secretary of State of the State of Delaware
is August 3, 1998. The date on which the Corporation's Certificate of
Designation of Series A Convertible Preferred Stock was filed with the Secretary
of State of the State of Delaware is June 8, 2000. The date of the filing of the
Corporation's Certificate of Ownership and Merger merging First Virtual
Communications, Inc. and FVC.COM, Inc. with the Secretary of State of the State
of Delaware is February 2, 2001. The date on which the Corporation's first
Certificate of Amendment to the Restated Certificate was filed with the
Secretary of State of the State of Delaware is June 19, 2001.
THIRD: This Certificate of Amendment amends certain provisions of the
Restated Certificate and has been duly adopted by the Board of Directors of the
Corporation acting in accordance with the provisions of Sections 141(f) and 242
of the DGCL, and further adopted in accordance with the provisions of Sections
211 and 242 of the DGCL by the stockholders of the Corporation.
FOURTH: Paragraph A of Article IV of the Amended and Restated
Certificate of Incorporation shall be amended to read in its entirety as
follows:
"A. This corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the
corporation is authorized to issue is One Hundred Five Million
(105,000,000) shares. One Hundred Million (100,000,000) shares
shall be Common Stock, each having a par value of one-tenth of
one cent ($0.001). Five Million (5,000,000) shares shall be
Preferred Stock,
1.
each having a par value of one-tenth of one cent ($0.001).
Upon the filing of this Certificate of Amendment, every ten
(10) shares of Common Stock outstanding shall be combined into
one (1) share of Common Stock; provided however, that the
Corporation shall issue no fractional shares of Common Stock,
but shall instead pay to any stockholder who would be entitled
to receive a fractional share as a result of the actions set
forth herein a sum in cash equal to the fair market value of
the shares constituting such fractional share based upon the
closing sales price of the Corporation's Common Stock as
reported on the Nasdaq SmallCap Market as of the date this
Certificate of Amendment is filed with the Secretary of the
State of Delaware."
IN WITNESS WHEREOF, First Virtual Communications, Inc. has caused this
Certificate of Amendment to be signed by its Chief Executive Officer and
President as of _________________, 2003.
FIRST VIRTUAL COMMUNICATIONS, INC.
By:
---------------------------------------
Jonathan G. Morgan
Chief Executive Officer and President
2.
PROXY FIRST VIRTUAL COMMUNICATIONS, INC. PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR A
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON MONDAY, MARCH 10, 2003
The undersigned hereby appoints JONATHAN G. MORGAN and TRUMAN COLE and each of
them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of First Virtual
Communications, Inc. (the "Company"), which the undersigned may be entitled to
vote at the Special Meeting of Stockholders of the Company to be held at the
Company's offices at 3393 Octavius Drive, Santa Clara, California on Monday,
March 10, 2003, at 9:00 a.m., and at any and all continuations and adjournments
thereof, with all powers that the undersigned would possess if personally
present, upon and in respect of the following matters and in accordance with the
following instructions, with discretionary authority as to any and all other
matters that may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR PROPOSAL
1 AS MORE SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC
INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
Management recommends a vote for Proposal 1.
Proposal 1: To approve a series of amendments to the Company's Amended
and Restated Certificate of Incorporation, as amended, to
effect a reverse stock split of the Company's common stock
whereby each outstanding three, four, five, six, seven, eight,
nine or ten shares would be combined, converted and changed
into one share of common stock, with the effectiveness of one
of such amendments and the abandonment of the other
amendments, or the abandonment of all of the amendments, as
permitted under Section 242(c) of the Delaware General
Corporation Law, to be determined by the Board of Directors.
[ ] For [ ] Against [ ] Abstain
Dated: __________________, 2003
_______________________________________
_______________________________________
SIGNATURE(S)
Please sign exactly as your name
appears hereon. If the stock is
registered in the names of two or more
persons, each should sign. Executors,
administrators, trustees, guardians and
attorneys-in-fact should add their
titles. If signer is a corporation,
please give full corporate name and
have a duly authorized officer sign,
stating title. If signer is a
partnership, please sign in partnership
name by authorized person.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.