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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
Filed by the Registrant [X]
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[X] Preliminary Proxy Statement
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[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Globix Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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GLOBIX CORPORATION
139 CENTRE STREET
NEW YORK, NEW YORK 10013
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 4, 2000
To: The Shareholders of Globix Corporation
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Shareholders of
GLOBIX CORPORATION (the "Company"), a Delaware corporation, will be held at the
offices of the Company at 139 Centre Street, New York, New York 10013 on
Tuesday, April 4, 2000, at 11:00 a.m., local time, for the following purposes:
1. To elect ten directors to serve, subject to the provisions of the
By-laws, until the next Annual Meeting of Shareholders and until their
respective successors have been duly elected and qualified;
2. To consider and act upon a proposal to approve the Company's 2000 Stock
Option Plan;
3. To consider and act upon a proposal to amend the Company's Certificate
of Incorporation to change the Company's authorized common stock to
500,000,000 shares having a par value of $.01 per share;
4. To consider and act upon a proposal to amend the Company's Certificate
of Incorporation to change the Company's authorized preferred stock to
5,000,000 shares having a par value of $.01 per share;
5. To consider and act upon a proposal to amend the Company's 1995 Stock
Option Plan;
6. To consider and act upon a proposal to amend the Company's 1998 Stock
Option Plan;
7. To consider and act upon a proposal to amend the Company's 1999 Stock
Option Plan;
8. To consider and act upon a proposal to confirm the selection of Arthur
Andersen LLP as the Company's independent auditors for the fiscal year
ending September 30, 2000; and
9. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on February 21, 2000
as the record date for the meeting. Only holders of shares of record at that
time will be entitled to notice of and to vote at the 2000 Annual Meeting of
Shareholders or any adjournments thereof.
By order of the Board of Directors.
Marc H. Bell
Chairman of the Board
New York, New York
March 8, 2000
IMPORTANT
If you cannot personally attend the meeting, it is requested that you
indicate your vote on the issues included on the enclosed proxy and date, sign
and mail it in the enclosed return envelope.
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GLOBIX CORPORATION
139 CENTRE STREET, NEW YORK, NEW YORK 10013
------------------------
PROXY STATEMENT
FOR
2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 4, 2000
------------------------
March 8, 2000
The enclosed proxy is solicited by the Board of Directors of Globix
Corporation, a Delaware corporation (the "Company"), in connection with the 2000
Annual Meeting of Shareholders to be held at the offices of the Company at 139
Centre Street, New York, New York 10013 on Tuesday, April 4, 2000 at 11:00 a.m.,
local time, and any adjournments thereof, for the purposes set forth in the
accompanying Notice of Meeting. Unless instructed to the contrary on the proxy,
the persons named in the proxy will vote the proxy:
- FOR the election as directors of the ten nominees listed below to serve
until the next annual meeting of shareholders and until their successors
have been duly elected and qualified;
- FOR the approval of the Company's 2000 Stock Option Plan;
- FOR the approval of the proposal to amend the Company's Certificate of
Incorporation to change the authorized common stock of the Company to
500,000,000 shares having a par value of $.01 per share;
- FOR the approval of the proposal to amend the Company's Certificate of
Incorporation to change the authorized preferred stock of the Company to
5,000,000 shares having a par value of $.01 per share;
- FOR the approval of the proposal to amend the Company's 1995 Stock Option
Plan;
- FOR the approval of the proposal to amend the Company's 1998 Stock Option
Plan;
- FOR the approval of the proposal to amend the Company's 1999 Stock Option
Plan;
- FOR the confirmation of the selection of Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending September 30,
2000; and
- In accordance with the judgment of the proxy holders as to any other
matter that may be properly brought before the meeting or any
adjournments thereof.
The record date with respect to this solicitation is the close of business on
February 21, 2000 and only shareholders of record at that time will be entitled
to vote at the meeting.
The principal executive office of the Company is 139 Centre Street, New
York, New York 10013, and its telephone number is (212) 334-8500. The shares
represented by all validly executed proxies received in time to be taken to the
Annual Meeting, and not previously revoked, will be voted at the Annual Meeting.
A proxy may be revoked by the shareholder at any time prior to its being voted.
This proxy statement and the accompanying proxy were mailed to you on or about
March 8, 2000.
RECORD DATE AND QUORUM
The close of business on February 21, 2000, has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting and at any adjournment or postponement thereof. The number of
outstanding common shares, par value $.01 per share, entitled to vote at the
Annual Meeting is 34,522,404. Each common share is entitled to one vote. The
number of outstanding preferred shares, par value $.01 per share, entitled to
vote at the Annual Meeting is 80,000. Each preferred share is entitled to 100
votes, an amount equal to the number of common shares issuable upon conversion
of a preferred share. Holders of record of preferred shares may vote on all
matters that the holders of common stock are entitled to vote upon, except that
with respect to the election of Directors of the Company, the shares
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of preferred stock shall automatically be voted in the same proportion as the
votes of the common stock. All common share numbers and share prices reflect the
two-for-one stock split which was paid on December 30, 1999 and the two-for-one
stock split which was paid on January 31, 2000. The presence in person or by
proxy at the Annual Meeting of the holders of one-third of the votes entitled to
be cast at the Annual Meeting shall constitute a quorum. There is no cumulative
voting.
REQUIRED VOTE
Assuming the presence of a quorum at the Annual Meeting:
- the affirmative vote of a plurality of the votes cast at the meeting is
required for the election as directors of the ten nominees listed below;
- the affirmative vote of a majority of the votes cast at the meeting is
required:
- to approve the Company's 2000 Stock Option Plan;
- to approve the amendments to the Company's 1995 Stock Option Plan;
- to approve the amendments to the Company's 1998 Stock Option Plan;
- to approve the amendments to the Company's 1999 Stock Option Plan; and
- to confirm the selection of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending September 30, 2000;
and
- the affirmative vote of the holders of a majority of the total
outstanding common shares is required:
- to approve the amendment to the Company's Certificate of Incorporation
to change the authorized common stock of the Company to 500,000,000
shares having a par value of $.01 per share; and
- to approve the amendment to the Company's Certificate of Incorporation
to change the authorized preferred stock of the Company to 5,000,000
shares having a par value of $.01 per share.
Votes shall be counted by one or more employees of the Company's Transfer Agent
who shall serve as the inspectors of election. The inspectors of election will
canvas the shareholders present in person at the meeting, count their votes and
count the votes represented by proxies presented. Abstentions and broker
non-votes are counted for purposes of determining the number of shares
represented at the meeting to determine a quorum, but are deemed not to have
voted on the proposal. Broker non-votes occur when a broker nominee (which has
voted on one or more matters at the meeting) does not vote on one or more other
matters at the meeting because it has not received instructions to so vote from
the beneficial owner and does not have discretionary authority to so vote. Of
the matters to be voted on at the meeting, broker nominees do not have
discretionary authority to vote on the proposal to amend the Company's
Certificate of Incorporation to change the authorized preferred shares of the
Company to 5,000,000 shares having a par value of $.01 per share.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The ten persons named below, all of whom, except for Mr. Harshad Shah, are
currently members of the Board of Directors, have been nominated for election or
re-election, as the case may be, to serve until the next Annual Meeting of
Shareholders and until their respective successors have been elected and
qualified.
Unless stated to be voted otherwise, each proxy will be voted for the
election of the nominees named below. All of the nominees have consented to
serve as directors if elected. If, at the time of the Annual Meeting, any
nominee is unable or declines to serve, the proxies may be voted for any other
person who shall be nominated by the present Board of Directors to fill the
vacancy.
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NUMBER OF SHARES
BENEFICIALLY
POSITIONS WITH DIRECTOR OWNED AT
NAME AND AGE THE COMPANY SINCE FEBRUARY 21, 2000 PERCENT
- ------------ ------------------------ -------- ----------------- -------
Marc H. Bell, 32................. Chairman, President, 1989 7,231,216 18.1%
Chief Executive
Officer & Director
Robert B. Bell, 60............... Executive Vice-President 1994 204 *
& Director
Lord Anthony St. John, 42........ Vice President & 1997 56,000 *
Director
Martin Fox, 64................... Director 1995 70,000 *
Jack D. Furst, 40................ Director 1999 -- --
Michael J. Levitt, 41............ Director 1999 -- --
Sid Paterson, 59................. Director 1998 87,000 *
Tsuyoshi Shiraishi, 55........... Director 1994 850,000 2.5
Dr. Richard Videbeck, 76......... Director 1995 90,200 *
Harshad Shah, 58................. -- -- -- --
- ---------------
* less than 1%
Mr. Marc H. Bell has been President and Chief Executive Officer since he
founded the Company in 1989. Mr. Bell was elected Chairman of the Company in
November 1999. Mr. Bell has appeared on numerous television broadcasts and has
been frequently quoted in numerous national publications regarding Internet-
related topics. Mr. Bell is a member of the Board of Directors of EDGAR Online,
Inc., the publisher of the web sites "edgar-online.com" and "freeedgar.com". Mr.
Bell has a B.S. degree in accounting from Babson College and an M.S. Degree in
Real Estate Finance from New York University. Mr. Bell is the son of Robert B.
Bell.
Mr. Robert B. Bell has served as Executive Vice President of the Company
since 1994. He also served as Chief Financial Officer from 1994 through
September 1999. Mr. Bell is also the Managing Director of the Company's U.K.
subsidiary, Globix Limited. Mr. Bell spent three years at Coopers & Lybrand.
Thereafter, he was a practicing attorney in New York City at the firm of Bell,
Kalnick, Beckman, Klee and Green, which Mr. Bell founded in the early 1970s, and
specialized in taxation, investments and international real estate joint
ventures. He is the author of Joint Ventures in Real Estate published by John
Wiley & Sons. Prior to 1994, Mr. Bell was for many years an Adjunct Professor at
New York University. Mr. Bell has a B.S. degree from New York University and a
J.D. degree from the University of California at Berkeley. Mr. Bell is the
father of Marc H. Bell.
Anthony St. John, Lord St. John of Bletso, Vice President, Business
Development, has been a director of the Company since October 1997. Since 1978,
Lord St. John has served as a sitting member of the House of Lords of the
Parliament of the United Kingdom and an Extra Lord-in-Waiting to Her Majesty the
Queen. He is also a member of The House of Lords' European Union Sub-Committee
on Economic and Financial Affairs, Trade and External Relations. Since 1993, he
has served as a consultant to Merrill Lynch and is a Registered Representative
of the London Stock Exchange. Lord St. John is a director of Skinvisible, Inc.,
a developer and marketer of skin protector products. He is also a director of
the Company's U.K. subsidiary, Globix Limited and serves as its Director of
Business Development. He received his Bachelor of Art and Bachelor of Science
degrees from Capetown University and Bachelor of Laws from the University of
South Africa and a Masters of Law from the London School of Economics.
Mr. Martin Fox has been a director of the Company since October, 1995. Mr.
Fox has been for more than five years the President, Chief Executive Officer and
a director of Initio, Inc., a publicly owned company, which has been an
electronic commerce and catalogue specialty retailer of consumer products.
Mr. Jack D. Furst has been a director of the Company since December 1999.
Mr. Furst has been a partner of Hicks, Muse, Tate & Furst Incorporated since
1989. Mr. Furst serves as a director of American
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Tower Corporation, Cooperative Computing, Inc., Hedstrom Holdings, Inc., Home
Interiors & Gifts, Inc., International Wire Group, Inc., LLS Corp., Triton
Energy Limited and Viasystems, Inc. Mr. Furst received his B.S. degree from the
College of Business Administration at Arizona State University and his M.B.A.
from the Graduate School of Business at the University of Texas.
Mr. Michael J. Levitt has been a director of the Company since December
1999, Mr. Levitt has been a partner of Hicks, Muse, Tate & Furst Incorporated
since 1996. From 1993 through 1995, Mr. Levitt was a Managing Director and
Deputy Head of Investment Banking with Smith Barney Inc. Mr. Levitt serves as a
director of AMFM Inc., Awards.com, El Sitio, Inc., G.H. Mumm/Perrier/Jouet,
Grupo MVS, S.A. de C.V., Ibero-American Media Partners II Ltd., International
Home Foods, Inc., Regal Cinemas, Inc., RCN Corporation and STC Broadcasting,
Inc. Mr. Levitt attended the University of Michigan, from which he received his
B.B.A. and J.D.
Mr. Sid Paterson has been a director of the Company since February 1998. He
has been President and Chief Executive Officer of Sid Paterson Advertising for
more than five years.
Mr. Tsuyoshi Shiraishi has been a director of the Company since July 1994.
Mr. Shiraishi has been the Chairman of Century World PTE Ltd., an investment
consulting firm, and the Managing Director of Harpoon Holdings Ltd., a British
Virgin Islands holding company, since 1992. From 1990 to 1994, Mr. Shiraishi was
the Director of Marketing & Investment for Kajima Overseas Asia PTE Ltd., a
subsidiary of Kajima Corporation, an international construction company. In
addition, since 1990, Mr. Shiraishi has been Vice Chairman of Century
International Hotels, which operates and manages 21 hotels in the Pacific Rim.
Dr. Richard Videbeck has been a director of the Company since October,
1995. Since 1983, Dr. Videbeck has been an independent consultant in consumer
risk analysis, particularly for retailers and banks. From 1974 until 1986, Dr.
Videbeck was a Professor of Sociology at the University of Illinois at Chicago.
From 1974 to 1977, Dr. Videbeck was the Dean of the Doctor of Arts Program of
the Graduate College of the University of Illinois at Chicago.
Mr. Harshad Shah has been the President of Leyland Group LLC, a real estate
investment and development company, since . From
to he was a Vice President of Manufacturers Hanover Trust Company
(now Chase Manhattan Bank). Mr. Shah attended Elphinstone College in Bombay,
India where he received a B.A. in Economics and the Indian Institute of
Management where he received a Masters Degree in Business Administration.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company met eight times during the fiscal
year which ended on September 30, 1999. None of the directors have attended
fewer than 75% of the total number of meetings of the Board of Directors and
committees on which he serves, except Mr. Shiraishi and Lord St. John.
The Company has an Audit Committee consisting of Messrs. Robert Bell and
Sid Paterson and Dr. Videbeck. The Audit Committee reviews the financial
reporting and internal controls of the Company and meets with appropriate
financial personnel of the Company, as well as its independent auditors, in
connection with these reviews. The Audit Committee also recommends to the Board
the accounting firm that is to be presented to the shareholders for designation
as independent auditors to examine the corporate accounts of the Company for the
current fiscal year. The Audit Committee met in December 1999 and discussed
financial events occurring during the course of the fiscal year and voted to
recommend the continuation of Arthur Andersen LLP as the Company's auditors.
The Company also has a Stock Option Committee, consisting of Messrs. Marc
Bell, Martin Fox and Sid Paterson. Subject to existing contractual obligations,
the Stock Option Committee is responsible for setting and administering the
policies that govern the granting of employee stock options. The Stock Option
Committee met periodically during fiscal 1999 to grant employee stock options.
The Company does not have a nominating committee, employee compensation
committee or other committees.
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OTHER EXECUTIVE OFFICERS
Marc Jaffe, Senior Vice President, Chief Operating Officer, joined the
Company in January 1995. Mr. Jaffe has extensive experience in the use of
computers and telecommunications in the advertising and marketing industry.
Prior to joining the Company, Mr. Jaffe was a department manager at Sid Paterson
Advertising Inc. in New York City which he joined in 1989. He developed an
Internet-focused marketing strategy that won the prestigious CreaTech Award in
1996. Mr. Jaffe graduated from Colgate University, where he received a Bachelor
of Arts Degree.
Anthony L. Previte, Senior Vice President, Chief Technology Officer, joined
the Company in October 1998. From July 1991 to October 1998, Mr. Previte was the
Vice President, Special Projects for Emcor Group, Inc., a publicly traded
electrical and mechanical engineering and construction firm. While at Emcor
Group, Mr. Previte was involved in the design and construction of over one
million square feet of secure data center facilities for companies such as
Prudential Securities, Morgan Stanley and Nomura Securities. Mr. Previte has a
degree in aerospace engineering from Polytechnic Institute of New York.
Brian L. Reach, Senior Vice President, Chief Financial Officer, joined the
Company in September 1999. From May 1997 to August 1999, Mr. Reach was the Chief
Financial Officer of IPC Communications, a provider of integrated
telecommunications equipment and services to the financial industry. During his
tenure at IPC, Mr. Reach successfully helped guide IPC through its leveraged
recapitalization and financially restructured IPC enabling it to invest in
strategic acquisitions and next generation technologies. From November 1993 to
April 1997, Mr. Reach was the Chief Financial Officer of Celadon Group, Inc. Mr.
Reach is a certified public accountant and received his Bachelor of Science
degree in accounting from the University of Scranton.
OTHER KEY EMPLOYEES
Paul L. Bonington, Vice President, Marketing, joined the Company in May
1999. From August 1994 to February 1999, Mr. Bonington was an executive with
Mecklermedia Corporation, a producer of Internet publications, trade shows and
web sites. In 1998, he was named Mecklermedia's Senior Vice President of
Strategic Planning and Marketing. From 1994 to 1997, Mr. Bonington headed
Mecklermedia's print division as Publisher of Internet World magazine, and later
as Senior Vice President/Group Publisher following the launch of Web Week, Web
Developer and Internet Shipper magazines. Mr. Bonington has a Bachelor of
Science degree in business economics from the State University of New York,
Oneonta.
Shawn P. Brosnan, Vice President and Corporate Controller, joined the
Company in November 1999. Prior to joining the Company, Mr. Brosnan spent over
15 years with Ernst & Young, one of the leading professional services
organizations worldwide. During his tenure at Ernst & Young, he was a business
advisor with extensive experience in the areas of accounting, finance, financial
reporting, mergers and acquisitions and process improvement. Mr. Brosnan is a
certified public accountant and received his Bachelor of Science degree in
accounting from Providence College.
Alayne C. Gyetvai, Vice President and General Manager, joined the Company
in January 1999. From September 1994 to August 1998, Ms. Gyetvai held
senior-level positions at Silicon Graphics, Inc., most recently as the Director
of Global Professional Services and Global Web Implementation Services. From
January 1989 to September 1994, Ms. Gyetvai served as Site Manager, Senior
Systems Engineer and Senior Consultant for Sun Microsystems. Ms. Gyetvai earned
a Bachelor's degree in computer science and a Masters in probability mechanics
from the University of Colorado and a Bachelor's degree in electrical
engineering and computer engineering from the University of New Mexico.
John C. Moore, Vice President and General Manager, joined the Company in
October 1999. From 1988 to 1999, Mr. Moore held senior-level positions at Sherpa
Corporation, a provider of enterprise web-based application software, most
recently as its President and Chief Executive Officer. From 1988 to 1993, he was
Vice President and Managing Director of Sherpa's European operations based in
London. Mr. Moore has a Bachelor of Science Honours degree in mechanical
engineering from London University.
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Christopher D. Peckham, Vice President, Network Engineering, rejoined the
Company in February 1999. From August 1997 to February 1999, Mr. Peckham was
Manager of Network Engineering for ICON, a national Internet service provider.
From August 1995 through August 1997, Mr. Peckham served as Senior Systems and
Networking Administrator for the Company. From May 1995 through August 1995, Mr.
Peckham held the position of Director of Technology for the Interactive Media
Division of Database America. Mr. Peckham has Doctoral, Master and Bachelor of
Science degrees in electrical engineering from the New Jersey Institute of
Technology.
Daniel Utevsky, General Counsel, joined the Company in December 1999. From
July 1993 to November 1999, Mr. Utevsky was Vice President, General Counsel and
Corporate Secretary of IPC Communications, a provider of integrated
telecommunications equipment and services to the financial industry. He also
held similar positions within the IPC group, including Ixnet, Inc., IPC's global
telecommunications network subsidiary. During his tenure with IPC, Mr. Utevsky
assisted it in its development from a privately held company through its public
offerings and leveraged recapitalization. Mr. Utevsky was admitted to the New
York bar in 1984. He received his Bachelor of Business Administration degree in
economics from the University of Memphis and a J.D. degree from Benjamin N.
Cardozo School of Law.
COMPENSATION OF DIRECTORS AND OFFICERS
The following table sets forth compensation paid to the Company's Chief
Executive Officer and its other four most highly compensated executive officers
(the "Named Executive Officers") for the three fiscal years ended September 30,
1999:
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING
NAME AND POSITION YEAR SALARY ($) BONUS ($) COMPENSATION ($) OPTIONS (#)
- ----------------- ---- ---------- --------- ---------------- ------------
Marc H. Bell..................... 1999 350,000 331,875 -- 4,788,244
Chairman, President and 1998 250,000 -- -- 846,000
Chief Executive Officer 1997 200,000 -- -- --
Robert B. Bell................... 1999 240,625 -- -- --
Executive Vice President 1998 151,042 -- -- 120,000
1997 125,000 -- -- 360,000
Marc Jaffe....................... 1999 215,685 -- -- 480,000
Senior Vice President, 1998 133,250 -- -- 200,000
Chief Operating Officer 1997 89,000 -- -- 100,000
Anthony L. Previte............... 1999 141,685 -- -- 400,000
Senior Vice President 1998 -- -- -- --
Chief Technology Officer 1997 -- -- -- --
Alan Levy........................ 1999 105,625 -- -- --
Treasurer and Chief 1998 84,580 -- -- 40,000
Accounting Officer 1997 -- -- -- 30,000
Mr. Levy left our employ in November 1999.
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OPTION GRANTS IN LAST FISCAL YEAR
The following table summarizes options granted during the year ended
September 30, 1999 to the Named Executive Officers:
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
-------------------------- ANNUAL RATES OF STOCK
NUMBER OF % OF TOTAL PRICE APPRECIATION
SECURITIES OPTIONS GRANTED EXERCISE FOR OPTION TERM ($)
UNDERLYING TO EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME OPTIONS GRANTED FISCAL YEAR ($) DATE 5% 10%
- ---- --------------- --------------- -------- ---------- ---------- ----------
Marc H. Bell............. 691,664 8.8 1.57 10/01/08 1,760,387 2,803,122
4,096,580 52.3 9.25 3/26/09 61,724,299 98,285,630
Robert B. Bell........... -- -- -- -- -- --
Marc Jaffe............... 480,000 6.1 11.94 7/20/09 9,333,566 14,862,144
Anthony L. Previte....... 24,000 0.3 2.25 11/19/08 87,960 140,062
16,000 0.2 3.85 1/08/09 100,184 159,526
360,000 4.6 11.94 7/20/09 7,000,175 11,146,609
Alan Levy................ -- -- -- -- -- --
These options were granted pursuant to the Company's 1999 Stock Option Plan
except for the option to purchase 4,096,580 shares, which was granted pursuant
to Marc H. Bell's employment agreement with the Company. The options granted to
Marc H. Bell are fully vested. All other options listed on this table vest over
five years at a rate of 20% on each anniversary of the date of the grant.
During the year ended September 30, 1999, the Company granted employees
options to purchase 7,842,576 shares of common stock under the Company's Stock
Option Plans.
Amounts shown as potential realizable value represent hypothetical gains
that could be achieved for the respective options if exercised at the end of the
option term. The 5% and 10% assumed annual rates of compounded stock price
appreciation are mandated by rules of the Securities and Exchange Commission and
do not represent the Company's estimate or projection of the Company's future
common stock prices. These amounts represent certain assumed rates of
appreciation in the value of the Company's common stock from the fair market
value on the date of grant. Actual gains, if any, on stock option exercises are
dependent on the future performance of the common stock.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table shows the number of shares covered by both exercisable
and unexercisable stock options held by the Named Executive Officers as of the
year ended September 30, 1999, and the values for exercisable and unexercisable
options. Options are in-the-money if the market value of the shares covered
thereby is greater than the option exercise price. This calculation is based on
the fair market value at September 30, 1999 of $11.69 per share, less the
exercise price. The only Named Executive Officer who exercised options during
the fiscal year ended September 30, 1999 was Mr. Levy, who exercised his option
to purchase 4,000 shares at a purchase price of $1.53 per share and a realized
value of $33,000.
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OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SEPTEMBER 30, 1999 SEPTEMBER 30, 1999 ($)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
Marc H. Bell.............................. 5,411,844 222,400 23,254,452 2,201,760
Robert B. Bell............................ 480,000 -- 4,863,660 --
Marc Jaffe................................ 126,666 673,334 1,249,978 1,986,872
Anthony L. Previte........................ -- 400,000 -- 351,996
Alan Levy................................. 24,000 42,000 245,996 435,560
COMPENSATION OF DIRECTORS
Each non-employee director of the Company, who does not beneficially own
more than 5% of the Company's outstanding common stock, may receive annually
options to purchase shares of common stock. These options are fully vested as of
the date of grant, have a ten-year term, subject to early termination following
the end of the optionee's board service, and are exercisable at fair market
value on the date of the grant.
Pursuant to this program, and as adjusted for the Company's stock splits,
Mr. Fox, Dr. Videbeck, Lord St. John and Mr. Paterson each received option
grants for 40,000 shares of common stock at a price of $1.57 per share on
October 1, 1998. In addition, in March 1998, Mr. Fox, Dr. Videbeck and Mr.
Paterson each received options to purchase a total of 40,000 shares of common
stock at a price of $1.63 per share, the fair market value on the date of the
grant, which became exercisable in September 1998. Mr. Fox, Mr. Shiraishi, Dr.
Videbeck and Mr. Paterson each received option grants for 40,000 shares of
common stock at a price of $11.69 per share on October 1, 1999. On December 3,
1999, Messrs. Furst and Levitt each received options to purchase a total of
40,000 shares of common stock at a price of $10.53 per share, the fair market
value on that date.
In addition, at the discretion of the Board of Directors, directors may be
reimbursed for reasonable travel expenses in attending Board and committee
meetings.
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE-OF-CONTROL ARRANGEMENTS
Marc H. Bell. The Company and Marc H. Bell are parties to an employment
agreement, dated as of April 10, 1998, which expires on June 30, 2005. The
employment agreement provides for a base salary of $350,000 per year, increasing
annually at the rate of 5% per year starting October 1, 1999. In addition,
beginning on June 30, 1999, Mr. Bell is entitled to receive an annual bonus
equal to 10,000 times the increase, if any, of the per share market price of the
Company's common stock on June 30 of the current year over the highest per share
market price of the Company's common stock on each July 1 during the term of the
agreement.
Pursuant to the terms of the employment agreement, Mr. Bell was entitled to
receive stock options from the Company. In March 1998, Mr. Bell received stock
options to purchase 278,000 shares of common stock at an exercise price of $1.79
per share which vest ratably over five years. Mr. Bell also received options to
purchase 568,000 shares of common stock at an exercise price of $1.63 per share
which fully vested six months after the date of grant.
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Pursuant to the employment agreement, Mr. Bell was entitled to receive on
September 30 of each fiscal year, an option to purchase shares of common stock
equal to 25% of any increase in the total shares of Company common stock
outstanding during the prior twelve months as a result of equity offerings or
acquisitions. The exercise price of the option would be equal to the market
price of the Company's common stock on the date of grant and would be
exercisable immediately at an exercise price at least equal to the fair market
price of the Company's common stock. At October 1, 1998, Mr. Bell was granted an
option to purchase 691,664 shares at an exercise price of $1.57 under this
provision of the employment agreement. On March 2, 1999 Mr. Bell agreed to
surrender this right pursuant to an amendment to the employment agreement, which
was conditioned upon the consummation of the Company's public offering of
16,000,000 shares of common stock. Under the terms of the amendment, in lieu of
this right, Mr. Bell received a one-time option to purchase an amount of shares
of Company common stock equal to 25% of the difference between the number of
shares outstanding immediately after the closing of the offering and the number
outstanding as of October 1, 1998. The public offering closed on March 26, 1999
and accordingly Mr. Bell received an option to purchase 4,096,580 shares at an
exercise price of $9.25 per share, the same price as the price to the public in
the public offering. The term of the option is ten years from the date of grant.
The amendment to the employment agreement was approved at the 1999 Annual
Meeting of Stockholder held on April 23, 1999.
In September 1998, Mr. Bell borrowed $155,000 from the Company. The loan
was due 2003 and accrued interest at the rate of 8.0% per annum. Pursuant to the
terms of Mr. Bell's previous employment agreement, he borrowed a total of
$145,408 from the Company during 1997. The loan was due in 2002 and accrued
interest at the rate of 8.75% per annum. Mr. Bell repaid both loans in July
1999.
Robert B. Bell. The Company and Robert B. Bell are parties to an
employment agreement, dated as of July 21, 1999, which expires on March 31,
2002. The employment agreement provides for a base salary of $275,000 per year,
increasing annually at the rate of 5.0% per year starting October 1, 2000.
Pursuant to the terms of the employment agreement, the Company has
established a deferred compensation plan in the form of an irrevocable trust
which the Company funds to the extent of $250,000 for each fiscal quarter
commencing with the quarter ended March 31, 1999, until the total amount held in
the trust reaches $3,000,000. The employment agreement provides that if the
agreement terminates for any reason or there is a change of control, the Company
shall, within five business days thereafter, contribute to the trust the
difference between the amount held by the trust on the date of the termination
or change of control and $3,000,000, if any. Upon termination of the employment
agreement, Mr. Bell will be entitled to receive payments of $20,000 per month
for life from the trust subject to annual increases for cost of living
adjustments. Upon Mr. Bell's death, the payments from the trust shall be reduced
by fifty percent and this reduced amount shall be paid to Mr. Bell's designee
for a period of two years.
Pursuant to the employment agreement, in the event of a change of control
during the term of the employment agreement, Mr. Bell shall have the right to
terminate the employment agreement at any time after a change of control. Upon
any termination of the employment agreement prior to May 31, 2002, but after a
change of control, Mr. Bell shall be entitled to receive a payment equal to 2.99
times his annual compensation, including bonuses, if any, during the one year
preceding the date of termination. In addition, upon a change of control, Mr.
Bell shall have the right, exercisable within six months after the change of
control, to require the Company to purchase all or a portion of his options to
acquire shares in the Company at a price equal to the greater of the then fair
market value of the Company's common stock or $12.50 per share less the exercise
price under such options.
Brian L. Reach. The Company and Brian L. Reach are parties to an
employment agreement, dated as of July 20, 1999, which expires August 31, 2000.
The employment agreement provides for a base salary of $250,000 per year and a
guaranteed first year bonus of $50,000. Pursuant to the terms of his employment
agreement, Mr. Reach received options to purchase 400,000 shares of common stock
at an exercise price of $11.42 per share, which vest ratably over five years.
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PERFORMANCE GRAPH
The stock price performance graph below is required by the SEC and shall
not be deemed to be incorporated by reference by any general statement
incorporating by reference this Proxy Statement into any filing under the
Securities Act or the Exchange Act, except to the extent the Company
specifically incorporates this information by reference and shall not otherwise
be deemed soliciting material or filed under such acts.
The following graph shows a comparison of cumulative total stockholder
return, calculated on a dividend reinvested basis, for the Company, the NASDAQ
Composite Stock Market Index (U.S.) and the Media General Internet Software and
Services Index from the date of the Company's initial public offering on January
25, 1996 through September 30, 1999. Management cautions that the stock price
performance shown in the graph below should not be considered indicative of
potential future stock performance.
NASDAQ MARKET
GLOBIX CORPORATION MG GROUP INDEX INDEX
------------------ -------------- -------------
1/25/96 100.00 100.00 100.00
9/30/96 110.16 55.38 114.76
9/30/97 76.57 42.76 155.98
9/30/98 78.13 59.79 162.10
9/30/99 584.38 214.82 262.24
CUMULATIVE TOTAL RETURN
-----------------------------------------------
1/25/96 9/30/96 9/30/97 9/30/98 9/30/99
------- ------- ------- ------- -------
Globix Corporation............................... $100.00 $110.16 $ 76.57 $ 78.13 $584.38
Nasdaq Stock Market Index (U.S.)................. 100.00 55.38 42.76 59.79 214.82
Media General Internet Software and Services
Index.......................................... 100.00 114.76 155.98 162.10 262.24
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PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Company's common stock as of February 21, 2000:
- each person or entity who is known by the Company to own beneficially 5%
or more of the outstanding shares of common stock;
- each executive officer in office as of February 21, 2000;
- each director; and
- all executive officers and directors of the Company as a group.
The applicable percentage of ownership is based on 34,522,404 shares outstanding
on February 21, 2000. Unless otherwise indicated, the address for those listed
below is c/o Globix Corporation, 139 Centre St., New York, NY 10013.
NUMBER OF SHARES PERCENT
EXECUTIVE OFFICERS, DIRECTORS AND 5% STOCKHOLDERS: BENEFICIALLY OWNED OF CLASS (%)
- -------------------------------------------------- ------------------ ------------
Marc H. Bell................................................ 7,231,216 18.1
Robert B. Bell.............................................. 204 *
Marc Jaffe.................................................. 92,404 *
Anthony L. Previte.......................................... 8,000 *
Brian L. Reach.............................................. -- --
Lord Anthony St. John....................................... 56,000 *
80-110 New Oxford St.
London WC1A 1HB
Martin Fox.................................................. 70,000 *
10 Henry Street
Teterboro, NJ 07608
Jack D. Furst............................................... -- --
200 Crescent Court
Dallas, Texas 75201
Michael J. Levitt........................................... -- --
200 Crescent Court
Dallas, Texas 75201
Sid Paterson................................................ 87,000 *
99 Madison Avenue
New York, New York 10016
Tsuyoshi Shiraishi.......................................... 850,000 2.5
Harpoon Holdings, Ltd.
2 Handy Road,
#11-09 Cathay Building,
Singapore 229233
Dr. Richard Videbeck........................................ 90,200 *
3249 East Angler's Stream
Avon Park, Florida 33825
Thomas O. Hicks............................................. 8,000,000 18.9
200 Crescent Court
Dallas, Texas 75201
HM4 Globix Qualified Fund, LLC.............................. 5,448,300 13.6
200 Crescent Court
Dallas, Texas 75201
HMF Equity Fund IV (1999), L.P.............................. 5,448,300 13.6
200 Crescent Court
Dallas, Texas 75201
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NUMBER OF SHARES PERCENT
EXECUTIVE OFFICERS, DIRECTORS AND 5% STOCKHOLDERS: BENEFICIALLY OWNED OF CLASS (%)
- -------------------------------------------------- ------------------ ------------
HM4/GP (1999) Partners, L.P................................. 5,486,900 13.7
200 Crescent Court
Dallas, Texas 75201
Hicks, Muse GP (1999) Partners IV, L.P...................... 5,709,900 14.2
200 Crescent Court
Dallas, Texas 75201
Hicks, Muse (1999) Fund IV, LLC............................. 5,709,900 14.2
200 Crescent Court
Dallas, Texas 75201
HMF Bridge Globix, LLC...................................... 2,000,000 5.5
200 Crescent Court
Dallas, Texas 75201
HMF Bridge Partners, L.P.................................... 2,000,000 5.5
200 Crescent Court
Dallas, Texas 75201
HMF Bridge Partners LLC..................................... 2,000,000 5.5
200 Crescent Court
Dallas, Texas 75201
Janus Capital Corporation,
Janus Venture Fund and
Thomas H. Bailey.......................................... 4,395,040 12.7
100 Fillmore Street
Denver, CO 80206-4923
Nicholas-Applegate Capital Management....................... 2,171,600 6.3
600 West Broadway
San Diego, CA 92101
Putnam Investments, Inc..................................... 2,871,200 8.3
One Post Office Square
Boston, MA 02109
The Putnam Advisory Company, Inc............................ 1,776,000 5.1
One Post Office Square
Boston, MA 02109
All executive officers and directors as a Group
(12 persons)................................................ 8,865,224 21.8
- ---------------
* Less than 1%
Under the rules of the Securities and Exchange Commission, a person is
deemed to be the beneficial owner of a security if that person has or shares the
power to vote or direct the voting os such security or the power to dispose or
direct the disposition of the security. A person is also deemed to be a
beneficial owner of any securities if that person has the right to acquire
beneficial ownership within 60 days.
The amount shown for Marc H. Bell includes 913,772 shares owned directly
and 5,467,444 stock options to purchase shares exercisable within 60 days. The
amount shown also includes 850,000 shares owned by Harpoon Holdings, Ltd., an
entity controlled by Mr. Shiraishi, a director of the Company. Harpoon's shares
are subject to an Irrevocable Proxy entered into between Harpoon and Marc H.
Bell, dated as of October 1, 1995, pursuant to which Mr. Bell has the sole right
to vote such shares with respect to the election of the Company's directors.
The amount shown for Mr. Jaffe includes 53,336 stock options to purchase
shares exercisable within 60 days.
The amount shown for Mr. Previte include 8,000 stock options to purchase
shares exercisable within 60 days.
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The amount shown for Lord St. John includes 56,000 stock options to
purchase shares exercisable within 60 days. Does not include 12,000 shares held
in trust for the benefit of Lord St. John's wife and children, as to which Lord
St. John disclaims beneficial ownership.
The amount shown for Mr. Fox includes 40,000 stock options to purchase
shares exercisable within 60 days.
The amount shown for Mr. Paterson includes 80,000 options to purchase
shares exercisable within 60 days.
Mr. Shiraishi's shares are held through Harpoon.
The amount shown for Dr. Videbeck includes 90,200 stock options to purchase
shares exercisable within 60 days.
The amounts shown for Thomas O. Hicks, HM4 Globix Qualified Fund, LLC, HMF
Equity Fund IV (1999), L.P., HM4/GP (1999) Partners, L.P., Hicks, Muse GP (1999)
Partners IV, L.P., Hicks, Muse (1999) Fund IV, LLC, HMF Bridge Globix, LLC, HMF
Bridge Partners, L.P. and HMF Bridge Partners, LLC are based upon a Schedule 13D
filed on December 13, 1999 by Thomas O. Hicks, HM4 Globix Qualified Fund, LLC,
HMF Equity Fund IV (1999), L.P., HM4 Globix Private Fund, LLC, HMF Private
Equity Fund IV (1999) Coinvestors, L.P., HM4-SBS Globix Coinvestors, LLC,
HM4-SBS (1999) Coinvestors, L.P., Hicks, Muse GP (1999), C.V., HM Equity Fund
IV/GP Partners (1999), C.V., HM GP Partners IV Cayman, L.P., HM Fund IV Cayman
LLC, HMF Bridge Globix, LLC, HMF Bridge Partners, L.P., and HMF Bridge Partners,
LLC. The amounts shown assume conversion of all Series A 7.5% Convertible
Preferred Stock beneficially owned by such entities. The shares shown are
subject to shared voting and investment power.
Messrs. Furst and Levitt, each a director of the Company, were appointed to
the Board of Directors on behalf of the holders of the Series A 7.5% Convertible
Preferred Stock.
The amount shown for Janus Capital Corporation, Janus Venture Fund and
Thomas H. Bailey is based upon a Schedule 13G/A filed on February 14, 2000. The
shares shown are subject to shared voting and investment power.
The amount shown for Nicholas-Applegate Capital Management is based upon a
Schedule 13G filed on February 11, 2000.
The amounts shown for Putnam Investments, Inc. and The Putnam Advisory
Company, Inc. are based upon a Schedule 13G/A filed on February 17, 2000. The
shares shown are subject to shared voting and investment power. The amount shown
for Putnam Investments, Inc. include shares owned by The Putnam Advisory
Company. Inc. and Putnam Investment Management, Inc., each a wholly-owned
subsidiary of Putnam Investments, Inc., and Putnam Investments, Inc. disclaims
beneficial ownership of these shares.
The amount shown for all executive officers and directors as a group,
include 6,057,180 stock options to purchase shares exercisable within 60 days.
PROPOSAL NO. 2
APPROVAL OF 2000 STOCK OPTION PLAN
There is being submitted to the shareholders for approval at the 2000
Annual Meeting, the Globix Corporation 2000 Stock Option Plan (the "2000 Plan")
an incentive and non-qualified stock option plan which authorizes the issuance
of up to 1,675,000 shares of the Company's voting common shares. The number of
shares to be authorized for issuance under the proposed 2000 Plan is less than
5% of the total outstanding common shares as of the date hereof. The 2000 Plan
was approved by the Board of Directors at a meeting held on February 25, 2000,
subject to shareholder approval. If the 2000 Plan is approved, the 1,675,000
common shares being authorized will be used to grant options to employees,
officers, directors and consultants of the Company.
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The Board of Directors believes that the Company and its shareholders have
benefitted from the grant of stock options in the past and that similar benefits
will result from the adoption of the 2000 Plan. It is believed that stock
options play an important role in providing eligible employees with an incentive
and inducement to contribute fully to the further growth and development of the
Company and its subsidiaries because of the opportunity to acquire a proprietary
interest in the Company on an attractive basis. The Company's current policy is
to grant every full time employee an option to purchase shares of Common Stock.
Except as expressly provided in the Plan, all stock options granted under
the 2000 Plan will be exercisable at such time or times and in such
installments, if any, as the Company's Stock Option Committee or the Board of
Directors may determine and expire no more than ten years from the date of
grant. The term for options granted to 10% or greater shareholders will be no
longer than five years to qualify as an incentive stock option. The exercise
price of the stock option will be the fair market value of the Company's common
shares on the date of grant and upon exercise must be paid for in cash, or in
stock of the Company valued at its then fair market value. The exercise price of
stock options granted to a holder of greater than 10% of the Company's common
stock will be greater than or equal to 110% of the fair market value on the date
of grant. If stock of the Company is used to exercise an option, such stock must
have either (i) been owned by the optionee for more than six months prior to the
date of exercise or (ii) have not been acquired, directly or indirectly, from
the Company. The fair market value of the Company's shares at February 29, 2000
was $ . Options are non-transferable except by will or by the laws of
descent and distribution, or as expressly authorized by the Stock Option
Committee or the Board of Directors. Notwithstanding the preceding sentence, any
Non-Employee Director may transfer Stock Options, provided that (i) any such
transfer shall be limited to such Non-Employee Director's spouse, siblings, or
direct lineal ancestors or descendants or to limited partnerships, trusts,
closely held corporations for the benefit of such family members (the "Permitted
Transferees"), (ii) that the Company shall have been provided written notice of
any such transfer, and (iii) any such Permitted Transferee shall agree to be
bound by the terms of the grant of the Option. Each option to be granted under
the 2000 Plan will be evidenced by an agreement subject to the terms and
conditions set forth above.
Options granted under the 2000 Plan terminate on the date the optionee's
relationship with the Company is terminated, unless extended for up to three
months from the date of termination of the optionee's employment with the
Company at the Stock Option Committee's discretion, except if termination is by
reason of death or disability. In such event the option terminates six months
after the optionee's death or termination of employment by reason of disability.
The Board of Directors has a limited right to modify or amend the 2000
Plan, which does not include the right to increase the number of shares which is
available for the grant of options, except to adjust for stock splits and
similar types of changes to the Company's capital structure.
During the term of the 2000 Plan, the eligible employees of the Company
will receive, for no consideration prior to exercise, the opportunity to profit
from any rise in the market value of the common stock. This will dilute the
equity interest of the other shareholders of the Company. The grant and exercise
of the options also may affect the Company's ability to obtain additional
capital during the term of any options.
The 2000 Plan will be administered by the Stock Option Committee appointed
by the Board of Directors. The Stock Option Committee is comprised of Marc Bell,
Martin Fox and Sid Paterson. The Board of Directors is recommending the adoption
of the 2000 Plan. The description of the proposed 2000 Plan set forth above is
qualified in its entirety by reference to the text of the 2000 Plan as set forth
in Exhibit A.
FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the Federal income tax treatment of the stock
options which may be granted under the 2000 Plan based upon the current
provisions of the Internal Revenue Code.
An option holder who exercises a non-qualified stock option will recognize
taxable compensation at the date of exercise with respect to the difference
between the fair market value of the option shares at exercise and the exercise
price paid to purchase such shares. The Company is entitled to a corresponding
deduction for
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such compensation. At such time as the option stock is sold, the option holder
will recognize either short-term or long-term capital gain income (depending
upon the length of time such stock has been held) with respect to the excess of
the option stock sale price over the exercise price paid to purchase such
shares.
An option holder who exercises an incentive stock option will not realize
any regular taxable income. At the date of exercise, the option holder may,
depending on his or her personal tax situation, be subject to Alternative
Minimum tax ("AMT") because the difference between the fair market value of the
shares at exercise and the exercise price represents an AMT preference item.
The tax consequences of a disposition of incentive stock option stock
depends upon the length of time the stock has been held by the employee. If the
employee holds the option stock for at least two years after the option is
granted and one year after the exercise of the option, any gain realized on the
sale is long-term capital gain. In order to receive long-term capital gain
treatment, the employee must remain in the employ of the Company from the time
the option is granted until three months before its exercise (twelve months in
the event of termination due to the death or disability of the employee). The
Company will not be entitled to a deduction in this instance.
If the option stock is not held for the requisite holding period described
above, a "disqualifying disposition" will occur. A disqualifying disposition
results in the employee recognizing ordinary compensation income to the extent
of the lesser of: (1) the fair market value of the option stock on the date of
exercise less the option price ("the spread"), or (2) the amount realized on
disposition of the option stock less the option price. The Company will be
entitled to a deduction at this time for such ordinary compensation income. The
option holder's basis in such shares will be the fair market value on the date
of exercise.
The exercise of an option through the exchange of common shares already
owned by the option holder generally will not result in any taxable gain or loss
on the unrealized appreciation of the shares so used and so long as the shares
were held by the optionee for at least six months prior to exercise of the
option and the Company will not realize any tax consequences.
If an option holder transfers previously owned stock that was acquired
other than by exercising incentive stock options to exercise a non-qualified
option or an incentive stock option, this may be done in a manner that will not
result in taxation up to the fair market value of the surrendered stock. This
transaction is viewed as a tax-free exchange of stock in the same corporation up
to an equal value of option stock. In this situation, there is no taxation to
the option holder or to the Company on any appreciation in value of the
previously held stock. However, if additional shares of option stock are
received by the option holder, they are treated as taxable compensation for
services includible in his or her gross income. The Company is entitled to a
corresponding tax deduction for such compensation.
If an employee transfers previously owned incentive stock option stock to
exercise an incentive stock option, this may be done in a tax-free manner unless
a disqualifying disposition of the previously owned incentive stock option
shares transferred occurs. In the case of a disqualifying disposition of such
previously owned incentive stock option shares, incentive stock option
"pyramiding rules" apply whereby the post-acquisition gain in value of such
shares is taxed to the employee as compensation. In addition, compensation is
attributed to the employee to the extent of the spread at the acquisition date
of such previous owned incentive stock option shares. The Company is entitled to
a corresponding tax deduction for such compensation.
For purposes of determining whether shares have been held for the long-term
capital gain holding period, the holding period of shares received will
generally include the holding period of shares surrendered only if the shares
received have the same basis, in whole or in part, in the employee's hands as
the shares surrendered.
Whenever under the 2000 Plan shares are to be delivered upon exercise of a
stock option, the Company shall be entitled to require as a condition of
delivery that the option holder remit to the Company an amount sufficient to
satisfy all Federal, state, and other governmental withholding tax requirements
related thereto.
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PROPOSAL NO. 3
APPROVAL OF INCREASE
IN AUTHORIZED COMMON STOCK
There is being submitted to the shareholders for approval at the 2000
Annual Meeting a proposal to amend the Certificate of Incorporation to increase
the authorized common stock of the Company, par value $.01, from 75,000,000
shares to 500,000,000 shares. On February 21, 2000, there were 34,522,404 shares
of common stock outstanding. The Company has reserved 8,000,000 shares of common
stock for the conversion of preferred stock issued in connection with its
private placement of preferred stock in December 1999. The Company has also
reserved 1,995,840 shares of common stock for the exercise of warrants which
were issued in connection with the Company's debt financing in April 1998 and
405,942 shares of common stock for the exercise of the warrants which were
issued in connection with its initial public offering in January 1996.
In addition, in connection with its 1995, 1998 and 1999 Stock Option Plans,
the Company has reserved 490,020 shares, 4,317,564 shares and 6,000,000 shares,
respectively of common stock for issuance. The Company has also reserved
1,675,000 shares of common stock to be issued under the 2000 Stock Option Plan
and 4,096,580 shares pursuant to the option grant to Marc H. Bell in March 1999
under the amendment to his employment agreement. The increase in authorized
shares of common stock is not necessary to provide shares for the 2000 Stock
Option Plan.
On February 21, 2000, the Company had 13,497,100 authorized but unreserved
shares of common stock. If the proposal to change the Company's authorized
common stock is approved by the shareholders, the Company will have 438,497,100
shares of common stock authorized but unreserved.
Although the Company has no current definitive plans to issue any shares to
be authorized under this proposal, the increase in capital stock will provide
the Company's Board of Directors with the ability to use the Company's stock to
respond to developments in the Company's business, including possible financing
and acquisition transactions and general corporate purposes. While the increase
in authorized common stock will not change substantially the rights of holders
of the Corporation's common stock, issuance of shares in future transactions may
have a dilutive effect.
The Board of Directors could use the additional shares of common stock to
discourage an attempt to change control of the Company. However, the Board has
no present intention of issuing any shares of common stock for such purposes and
this proposal is not being recommended in response to any specific effort to
obtain control of the Company of which the Company is aware.
The Board of Directors is recommending such increase.
PROPOSAL NO. 4
APPROVAL OF INCREASE
IN AUTHORIZED PREFERRED STOCK
There is being submitted to the shareholders for approval at the 2000
Annual Meeting a proposal to amend the Certificate of Incorporation to increase
the authorized preferred stock of the Company, par value $.01, from 500,000
shares to 5,000,000 shares. On February 21, 2000, the Company had 80,000 shares
of preferred stock outstanding. The Company has reserved 170,000 shares of
preferred stock for the payment of dividends on the outstanding shares of
preferred stock in the event the Company opts to pay these dividends in kind.
On February 21, 2000, the Company had 250,000 authorized but unreserved
shares of preferred stock. If the proposal to change the Company's authorized
preferred stock is approved by the shareholders, the Company will have 4,750,000
shares of preferred stock authorized but unreserved.
Although no current definitive plans to issue any shares to be authorized
under this proposal, the increase in the capital stock of the Company will
provide the Company's Board of Directors with the ability to use the
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Company's capital stock to respond to developments in the Company's business,
including possible financing and acquisition transactions and general corporate
purposes.
The Board of Directors is recommending such increase.
PROPOSAL NO. 5
AMENDMENTS TO 1995 STOCK OPTION PLAN
There is being submitted to the shareholders for approval at the 2000
Annual Meeting a proposal to amend the Company's 1995 Stock Option Plan (the
"1995 Plan") to effect the following changes:
- Definition of "Fair market value". The amendments provide that the
definition of "Fair market value" with respect to options granted in the
future under the 1995 Plan shall be changed to mean the closing price on
the over-the-counter market on the last day on which the Company's shares
of common stock were traded immediately preceding the date an option is
granted pursuant to the Plan, as reported by Nasdaq, or Nasdaq's
successor, or if not reported on Nasdaq, the fair market value of such
Common Stock as determined by the Committee or the Board in good faith
and based on all relevant factors.
- Transferability of Options. The amendments provide that all options
outstanding under the 1995 Plan shall be transferable at the discretion
of the Stock Option Committee or the Board of Directors.
- Acceleration of Vesting upon a Change of Control. The amendments provide
that all options outstanding under the 1995 Plan may become immediately
exercisable in full upon a Change of Control at the sole discretion of
the Board of Directors.
SUMMARY OF THE 1995 PLAN
The Company has adopted the 1995 Plan, pursuant to which 1,440,000 shares
of common stock were reserved for issuance (subject to adjustment in the event
of stock splits and similar events). As of February 21, 2000, options to
purchase an aggregate of 287,910 shares of common stock were outstanding under
the 1995 Plan at exercise prices ranging from $1.31 to $3.16 and 202,110 options
to purchase shares of common stock were in reserve for issuance thereunder.
Under the 1995 Plan, the Stock Option Committee has discretionary authority to
determine the types of stock options to be granted, the persons to whom options
may be granted, the number of shares to be subject to such options, the exercise
price of such options and the terms of the stock option agreements. The exercise
price will be determined by the Stock Option Committee and may be paid in cash,
certified or bank check, or in stock of the Company valued at its then fair
market value or by having the Company withhold, from the shares of common stock
otherwise issuable upon exercise of the option, that number of shares having an
aggregate fair market value equal to the aggregate exercise price. Options
generally become exercisable in three equal successive annual installments over
the three-year period measured from the grant date.
Under the 1995 Plan, each Non-Employee Director is eligible to receive an
option grant on the date of election to the Board. The option will become fully
vested as of the date of the grant. The exercise price per share of each such
option will be the fair market value per share of common stock on the option
grant date. Each option will have a maximum term of ten years, subject to
earlier termination following the optionee's cessation of Board service.
Non-Employee Directors are eligible to receive additional option grants at the
discretion of the Stock Option Committee.
The federal income tax consequences arising under the 1995 Plan are
substantially similar to those described in "Proposal No. 2: Approval of 2000
Stock Option Plan."
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PROPOSAL NO. 6
AMENDMENTS TO 1998 STOCK OPTION PLAN
There is being submitted to the shareholders for approval at the 2000
Annual Meeting a proposal to amend the Company's 1998 Stock Option Plan (the
"1998 Plan") to effect the following changes:
- Definition of "Fair market value". The amendments provide that the
definition of "Fair market value" with respect to options granted in the
future under the 1998 Plan shall be changed to mean the closing price on
the over-the-counter market on the last day on which the Company's shares
of common stock were traded immediately preceding the date an option is
granted pursuant to the Plan, as reported by Nasdaq, or Nasdaq's
successor, or if not reported on Nasdaq, the fair market value of such
Common Stock as determined by the Committee or the Board in good faith
and based on all relevant factors.
- Transferability of Options. The amendments provide that all options
outstanding under the 1998 Plan shall be transferable at the discretion
of the Stock Option Committee or the Board of Directors.
- Acceleration of Vesting upon a Change of Control. The amendments provide
that all options outstanding under the 1998 Plan may become immediately
exercisable in full upon a Change of Control at the sole discretion of
the Board of Directors.
SUMMARY OF THE 1998 PLAN
The Company's stockholders originally approved the 1998 Plan on April 16,
1998, pursuant to which 4,800,000 shares of common stock were reserved for
issuance (subject to adjustment in the event of stock splits and similar
events). As of February 21, 2000, options to purchase an aggregate of 3,364,728
shares of common stock were outstanding under the 1998 Plan at exercise prices
ranging from $1.25 to $11.69 and 952,836 options to purchase shares of common
stock were in reserve for issuance thereunder. Under the 1998 Plan, the Stock
Option Committee has discretionary authority to determine the types of stock
options to be granted, the persons to whom options may be granted, the number of
shares to be subject to such options, the exercise price of such options and the
terms of the stock option agreements. The exercise price will be determined by
the Stock Option Committee and may be paid in cash, certified or bank check, or
in stock of the Company valued at its then fair market value or by having the
Company withhold, from the shares of common stock otherwise issuable upon
exercise of the option, that number of shares having an aggregate fair market
value equal to the aggregate exercise price. Options generally become
exercisable in five equal successive annual installments over the five-year
period measured from the grant date.
Under the 1998 Plan, each Non-Employee Director is eligible to receive an
option grant on the date of election to the Board. The option will become fully
vested as of the date of the grant. The exercise price per share of each such
option will be the fair market value per share of common stock on the option
grant date. Each option will have a maximum term of ten years, subject to
earlier termination following the optionee's cessation of Board service.
Non-Employee Directors are eligible to receive additional option grants at the
discretion of the Stock Option Committee.
The federal income tax consequences arising under the 1998 Plan are
substantially similar to those described in "Proposal No. 2: Approval of 2000
Stock Option Plan."
PROPOSAL NO. 7
AMENDMENTS TO 1999 STOCK OPTION PLAN
There is being submitted to the shareholders for approval at the 2000
Annual Meeting a proposal to amend the Company's 1999 Stock Option Plan (the
"1999 Plan") to effect the following changes:
- Transferability of Options. The amendments provide that all options
outstanding under the 1999 Plan shall be transferable at the discretion
of the Stock Option Committee or the Board of Directors.
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- Acceleration of Vesting upon a Change of Control. The amendments provide
that all options outstanding under the 1999 Plan may become immediately
exercisable in full upon a Change of Control at the sole discretion of
the Board of Directors.
SUMMARY OF THE 1999 PLAN
The Company's stockholders originally approved the 1999 Plan on April 23,
1998, pursuant to which 6,000,000 shares of common stock were reserved for
issuance (subject to adjustment in the event of stock splits and similar
events). As of February 21, 2000, options to purchase an aggregate of 2,378,000
shares of common stock were outstanding under the 1999 Plan at exercise prices
ranging from $7.69 to $42.69 and 3,622,000 options to purchase shares of common
stock were in reserve for issuance thereunder. Under the 1999 Plan, the Stock
Option Committee has discretionary authority to determine the types of stock
options to be granted, the persons to whom options may be granted, the number of
shares to be subject to such options, the exercise price of such options and the
terms of the stock option agreements. The exercise price will be determined by
the Stock Option Committee and may be paid in cash, certified or bank check, or
in stock of the Company valued at its then fair market value or by having the
Company withhold, from the shares of common stock otherwise issuable upon
exercise of the option, that number of shares having an aggregate fair market
value equal to the aggregate exercise price. Options generally become
exercisable in five equal successive annual installments over the five-year
period measured from the grant date.
Under the 1999 Plan, each Non-Employee Director is eligible to receive an
option grant on the date of election to the Board. The option will become fully
vested as of the date of the grant. The exercise price per share of each such
option will be the fair market value per share of common stock on the option
grant date. Each option will have a maximum term of ten years, subject to
earlier termination following the optionee's cessation of Board service.
Non-Employee Directors are eligible to receive additional option grants at the
discretion of the Stock Option Committee.
The federal income tax consequences arising under the 1999 Plan are
substantially similar to those described in "Proposal No. 2: Approval of 2000
Stock Option Plan."
PROPOSAL NO. 8
RATIFICATION OF SELECTION OF AUDITORS
The Company's financial statements for the past several fiscal years were
examined by Arthur Andersen LLP, independent public accountants. On February 25,
2000, the Board of Directors voted to propose and recommend the selection of
Arthur Andersen LLP as independent auditors to examine its financial statements
for the fiscal year ending September 30, 2000.
Representatives of Arthur Andersen LLP are expected to be present at the
annual meeting of shareholders with the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Until July 1999, Mr. Marc H. Bell had two loans outstanding from the
Company. In September 1998, Mr. Bell borrowed $155,000 from the Company pursuant
to an employment agreement, dated April 10, 1998. This loan was to mature in
2003 and accrued interest at the rate of 8.0% per annum. Under Mr. Bell's
previous employment agreement, Mr. Bell borrowed $145,408 from the Company. This
loan was to mature in 2002 and accrued interest at the rate of 8.75% per annum.
Mr. Bell repaid both loans in July 1999.
The Company retains Sid Paterson Advertising, Inc., an entity controlled by
Mr. Sid Paterson, a director of the Company, as its agent to place Company
advertisements in various print publications. Amounts paid to Sid Paterson
Advertising, Inc. for the year ended September 30, 1999 were approximately $1.5
million, and for the year ended September 30, 1998 were approximately $0.5
million. A substantial portion of these amounts constitute the pass-through of
amounts payable by the Company to the publications for printing the
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advertisements. All transactions between the Company and Sid Paterson
Advertising Inc. are on terms that are no less favorable to the Company than
those available in comparable transactions in arm's length dealings with
unrelated third parties.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than 10% of our common stock ("10%
Stockholders"), to file with the SEC initial reports of ownership on Form 3 and
reports of changes in ownership of our common stock and other equity securities
on a Form 4 or Form 5. Such executive officers and 10% Stockholders are required
by SEC regulations to furnish us with copies of all Section 16(a) forms they
file. Based solely on our review of the copies of such forms furnished to us, we
believe that all of our executive officers, directors and 10% Stockholders made
all necessary filings under Section 16(a) during the year ended September 30,
1999 , except that the following individuals had late filings during the year
ended September 30, 1999: Marc H. Bell (Form 4 for grant of options), Martin Fox
(Form 4 for grant of options), Sid Paterson (Form 4 for grant of options),
Anthony St. John (Form 3 for initial ownership and grant of options) and Richard
Videbeck (Form 4 for grant of options).
OTHER MATTERS
The Board of Directors does not know of any matters other than those
described above to be presented to the meeting. If any other matters do come
before the meeting, the persons named in the proxy will exercise their
discretion in voting thereon.
SHAREHOLDER PROPOSALS
Proposals by any shareholders intended to be presented at the year 2001
Annual Meeting of Shareholders must be received by the Company for inclusion in
proxy material relating to such meeting not later than September 5, 2000.
EXPENSES
All expenses in connection with solicitation of proxies will be borne by
the Company. Officers and regular employees of the Company may solicit proxies
by personal interview and telephone and telegraph. Brokerage houses, banks and
other custodians, nominees and fiduciaries will be reimbursed for out-of-pocket
and reasonable expenses incurred in forwarding proxies and proxy statements.
UNDERTAKING
The Company undertakes to provide without charge to each person solicited
by this proxy statement a copy of the Company's annual report on Form 10-K
including the financial statements and financial statement schedules required to
be filed with the Securities and Exchange Commission for the Company's most
recent fiscal year. The request made in writing shall be addressed to Marc H.
Bell, Globix Corporation, 139 Centre Street, New York, New York 10013.
By Order of the Board of Directors,
Marc H. Bell
Chairman of the Board
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EXHIBIT A
GLOBIX CORPORATION
2000 STOCK OPTION PLAN
1. Purpose of Plan. This 2000 Stock Option Plan (the "Plan") is designed
to assist Globix Corporation (the "Company") in attracting and retaining the
services of employees, Non-Employee Directors (as hereinafter defined) and such
consultants as may be designated and to provide them with an incentive and
inducement to contribute fully to the further growth and development of the
business of the Company and its subsidiaries.
2. Legal Compliance. It is the intent of the Plan that all options granted
under it shall be either "Incentive Stock Options" ("ISOs"), as such term is
defined in Section 422 of the Internal Revenue Code of 1986, as amended
("Code"), or non-qualified stock options ("NQOs"); provided, however, ISOs shall
be granted only to employees of the Company. An option shall be identified as an
ISO or an NQO in writing in the document or documents evidencing the grant of
the option. All options that are not so identified as ISOs are intended to be
NQOs. It is the further intent of the Plan that it conform in all respects with
the requirements of Rule 16b-3 of the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended ("Rule 16b-3"). To the extent
that any aspect of the Plan or its administration shall at any time be viewed as
inconsistent with the requirements of Rule 16b-3 or, in connection with ISOs,
the Code, such aspect shall be deemed to be modified, deleted or otherwise
changed as necessary to ensure continued compliance with such provisions.
3. Definitions. In addition to other definitions contained elsewhere in
the Plan, as used in the Plan the following terms have the following meanings
unless the context requires a different meaning:
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as the same may from
time to time be amended.
"Committee" means the committee referred to in Section 5 hereof.
"Common Stock" means the Common Stock of the Company, par value $.0l
per share.
"Designated Beneficiary" means the person designated by an optionee to
be entitled on his death to any remaining rights arising out of an option,
such designation to be made in accordance with such regulations as the
Committee or Board may establish.
"Fair Market Value" means the closing price on the over-the-counter
market on the last day on which the Company's shares of Common Stock were
traded immediately preceding the date an option is granted pursuant to the
Plan, as reported by Nasdaq, or Nasdaq's successor, or if not reported on
Nasdaq, the fair market value of such Common Stock as determined by the
Committee or the Board in good faith and based on all relevant factors.
"Non-Employee Directors" means a director who is not currently an
officer of or employed by the Company or any of its majority-owned
subsidiaries.
"Stock Options" means any stock options granted to an optionee under
the Plan.
"Stock Option Agreement" means a stock option agreement entered into
pursuant to the Plan.
4. Stock Options: Stock Subject to Plan.
The stock to be issued upon exercise of Stock Options granted under the
Plan shall consist of authorized but unissued shares, or of treasury shares, of
Common Stock, as determined from time to time by the Board. The maximum number
of shares for which Stock Options may be granted under the Plan is 1,675,000
shares, subject to adjustment as provided in Section 9 of the Plan. If any Stock
Option granted under the Plan should expire or terminate for any reason
whatsoever without having been exercised in full, the unpurchased shares shall
become available for new option grants.
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5. Administration.
(a) The Plan shall be administered by a Stock Option Committee or, if such
Committee is not appointed, then it shall be administered by the Board. Options
may be granted by the Board or the Committee. For purposes of the Plan, the
Board or its appointed Committee shall be referred to as the "Committee." The
Committee, if any, shall be appointed by the Board and shall consist of not less
than two members. The Board shall establish the number of members to serve on
the Committee, shall fill all vacancies or create new openings on the Committee,
and may remove any member of the Committee at any time with or without cause.
The Committee shall select its own chairman and shall adopt, alter or repeal
such rules and procedures as it may deem proper and shall hold its meetings at
such times and places as it may determine. The Committee shall keep minutes of
its meetings and of actions taken by it without a meeting. A majority of the
Committee present at any meeting at which a quorum is present, or acts approved
in writing by all members of the Committee without a meeting, shall be the acts
of the Committee.
(b) Unless otherwise determined by the Board, the Committee shall have full
and final authority in its discretion, but subject to the express provisions of
the Plan, to:
(i) prescribe, amend and rescind rules and regulations relating to the
Plan;
(ii) interpret the Plan and the respective Stock Options; and
(iii) make all other determinations necessary or advisable for
administering the Plan. All determinations and interpretations by the
Committee or the Board shall be binding and conclusive upon all parties. No
member of the Committee or the Board shall be liable for any action or
determination made in good faith in respect of the Plan or any Stock Option
granted under it.
(c) The provisions of this Section 5 shall survive any termination of the
Plan.
6. Grants of Options.
(a) Officers, employee directors, other key employees and Non-Employee
Directors of the Company or any subsidiary and consultants shall be eligible to
be selected by the Committee to receive stock option grants.
(b) Subject to the provisions of the Plan, the Committee shall determine
and designate the persons to whom grants will be made, the number of Stock
Options to be granted and the terms and conditions of each grant.
(c) Unless otherwise determined by the Committee, Stock Options granted
hereunder to Non-Employee Directors shall be in lieu of grants under any
predecessor stock option plan of the Company.
7. Terms and Exercise of Stock Option.
(a) Unless otherwise determined by the Committee each Stock Option shall
terminate no later than ten years (or such shorter term as may be fixed by the
Committee) after the date on which it shall have been granted. The date of
termination pursuant to this paragraph is referred to hereinafter as the
"termination date" of the option.
(b) Stock Options shall be exercisable at such time or times and in such
installments, if any, as the Committee or Board may determine. In the event any
option is exercisable in installments, any shares which may be purchased during
any year or other period which are not purchased during such year or other
period may be purchased at any time or from time to time during any subsequent
year or period during the term of the option unless otherwise provided in the
Stock Option Agreement.
(c) A Stock Option shall be exercised by written notice to the Secretary or
Treasurer of the Company at its then principal office. The notice shall specify
the number of shares as to which the Stock Option is being exercised and shall
be accompanied by payment in full of the purchase price for such shares;
provided, however, that an optionee at his or her discretion may, in lieu of
cash payment, to the Company, (i) deliver Common Stock already owed by him or
her, valued at fair market value on the date of delivery, as payment for the
exercise of any Stock Option provided such shares have been owned by optionee
for at least six months prior to exercise or were not acquired, directly or
indirectly, from the Company, or (ii) instruct a broker to
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notify the Company of optionee's exercise and sell stock to cover the exercise
price and tax withholding. In the event a Stock Option is being exercised, in
whole or in part pursuant to Section 8(c) hereof by any person other than the
optionee, a notice of election shall be accompanied by proof satisfactory to the
Company of the rights of such person to exercise said Stock Option. An optionee
shall not, by virtue of the granting of a Stock Option, be entitled to any
rights of a shareholder in the Company and such optionee shall not be considered
a record holder of shares purchased by him or her until the date on which he or
she shall actually be recorded as the holder of such shares upon the stock
records of the Company. The Company shall not be required to issue any
fractional shares upon exercise of any Stock Option and shall not be required to
pay to the person exercising the Stock Option the cash equivalent of any
fractional share interest unless so determined by the Committee.
(d) In the event an optionee elects to deliver Common Stock already owned
by such optionee or to request that Common Stock be withheld in accordance with
subsection (c) above, upon exercise of a Stock Option granted hereunder, the
Company shall be entitled to require as a condition thereto that the optionee
remit an amount which the Company deems sufficient to satisfy all Federal, state
and other governmental withholding tax requirements related thereto. The Company
shall have the right, in lieu of or in addition to the foregoing to withhold
such sums from compensation otherwise due to the optionee.
8. Other Stock Option Conditions.
(a) Except as expressly permitted by the Board, no Stock Option shall be
transferred by the optionee otherwise than by will or by the laws of descent and
distribution. During the lifetime of the optionee the Stock Option shall be
exercisable only by such optionee, by his or her legal representative or by a
transferee permitted under the terms of the grant of the Stock Option.
Notwithstanding the foregoing, any Non-Employee Director may transfer Stock
Options, provided that (i) any such transfer shall be limited to such
non-employee Director's spouse, siblings, or direct lineal ancestors or
descendants or to limited partnerships, trusts, closely held corporations for
the benefit of such family members (the "Permitted Transferees"), (ii) that the
Company shall have been provided written notice of any such transfer, and (iii)
any such Permitted Transferee shall agree to be bound by the terms of the grant
of the Stock Option.
(b) Unless otherwise determined by the Committee, in the event of the
termination of an optionee's employment by the Company at any time for any
reason (excluding disability or death), the portion of his or her Stock Option
which is exercisable at the date of termination of employment and all rights
thereunder shall terminate on the date of termination of the optionee's
relationship with the Company, except that the optionee shall have the right to
exercise his or her Stock Option (to the extent that the optionee was entitled
to exercise it as of the date of termination), within 15 days of the date of
termination, but in no event later than the termination date of his or her Stock
Option; provided, however, if the optionee is terminated for cause, the Stock
Option shall terminate on the date of termination of employment. The Option
Committee or the Board, may determine, in their sole discretion, whether the
date of termination will be based on the last day the optionee performed
services for the Company rather than the date of termination. Notwithstanding
the foregoing, unless otherwise determined by the Committee, in the event an
optionee is permanently and totally disabled (within the meaning of section
105(d)(4), or any successor section, of the Code), the portion of his or her
Stock Option which is exercisable at the date of disability and all rights
thereunder shall be exercisable by the optionee (or his or her legal
representative) at any time within six (6) months of termination of
employment -- but in no event later than the termination date of his Stock
Option.
(c) Unless otherwise determined by the Committee, if an optionee shall die
while in the employ of the Company, the portion of his or her Stock Option which
is exercisable at the date of death may be exercised by his or her designated
beneficiary or beneficiaries (or if none have been effectively designated, by
his or her executor, administrator or the person to whom his or her rights under
his or her Stock Option shall pass by will or by the laws of descent and
distribution) at any time within six (6) months after the date of death, but not
later than the termination date of his or her Stock Option.
(d) Nothing in the Plan or in any option granted pursuant hereto shall
confer on an employee any right to continue in the employ of the Company or
prevent or interfere in any way with the right of the Company to terminate his
employment at any time, with or without cause.
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(e) Each Stock Option granted pursuant to the Plan shall be evidenced by a
written Stock Option Agreement duly executed by the Company and the optionee, in
such form and containing such provisions as the Committee may from time to time
authorize or approve.
9. Adjustments. The Stock Option Agreements shall contain such provisions
as the Committee shall determine to be appropriate for the adjustment of the
kind and number of shares subject to each outstanding Stock Option, or the Stock
Option prices, or both, in the event of any changes in the outstanding Common
Stock of the Company by reason of stock dividends, stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations or
exchanges of shares, or the like. In the event of any such change or changes in
the outstanding Common Stock, and as often as the same shall occur, the kind and
aggregate number of shares available under the Plan may be appropriately
adjusted by the Committee or the Board, whose determination shall be binding and
conclusive.
10. Amendment and Termination.
(a) Unless the Plan shall have been otherwise terminated as provided
herein, it shall terminate on, and no option shall be granted thereunder, after
December 31, 2010. The Board may at any time prior to that date alter, suspend
or terminate the Plan as it may deem advisable, except that it may not without
further shareholder approval (i) increase the maximum number of shares subject
to the Plan (except for changes pursuant to Section 9); (ii) permit the grant of
options to anyone other than the officers, employee directors, Non-Employee
Directors and consultants; (iii) change the manner of determining the minimum
stock exercise prices (except for changes pursuant to Section 9); or (iv) extend
the period during which Stock Options may be granted or exercised. Except as
otherwise hereinafter provided, no alteration, suspension or termination of the
Plan may, without the consent of the optionee to whom any Stock Option shall
have theretofore been granted (or the person or persons entitled to exercise
such Stock Option under Section 8(c) of the Plan), terminate such optionee's
Stock Option or adversely affect such optionee's rights thereunder.
(b) Anything herein to the contrary notwithstanding, in the event that the
Board shall at any time declare it advisable to do so in connection with any
proposed sale or conveyance of all or substantially all of the property and
assets of the Company or of any proposed consolidation or merger of the Company
(each of the foregoing a "Change of Control Event"), the Company may (i)
accelerate the vesting schedule in such manner as the Company may decide in its
sole discretion, or (ii) give written notice to the holder of any Stock Option
that the portion of his or her Stock Option which is exercisable on the date of
the notice may be exercised only within thirty (30) days after the date of such
notice but not thereafter, and all rights under said Stock Option which shall
not have been so exercised shall terminate at the expiration of such thirty (30)
days, provided that the proposed sale, conveyance, consolidation or merger to
which such notice shall relate shall be consummated within six (6) months after
the date of such notice. If such Change of Control Event shall not be
consummated within said time period, no unexercised rights under any Stock
Option shall be affected by such notice except that such Stock Option may not be
exercised between the date of expiration of such thirty (30) days and the date
of the expiration of such six month period. Alternatively, outstanding Stock
Options under the Plan may be assumed or converted to similar options in any
surviving or acquiring entity, but, if the surviving or acquiring entity shall
refuse to assume, or convert, said Stock Options, they shall be terminated if
not exercised according to the requirements set forth above.
11. Option Exercise Price. The price per share to be paid by the optionee
at the time an ISO is exercised shall not be less than one hundred percent
(100%) of the Fair Market Value of one share of the optioned Common Stock on the
date immediately preceding the date on which the Stock Option is granted. No ISO
may be granted under the Plan to any person who, at the time of such grant, owns
(within the meaning of Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company unless the exercise price of such ISO is at least equal to one
hundred and ten percent (110%) of Fair Market Value. The price per share to be
paid by the optionee at the time an NQO is exercised shall not be less than
eighty-five percent (85%) of the Fair Market Value on the date immediately
preceding the date on which the NQO is granted, as determined by the Committee.
12. Ceiling of ISO Grants. The aggregate Fair Market Value (determined at
the time any ISO is granted) of the Common Stock with respect to which an
optionee's ISOs, together with incentive stock
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options granted under any other plan of the Company are exercisable for the
first time by such optionee during any calendar year shall not exceed $100,000.
If an optionee holds such incentive stock options that become first exercisable
(including as a result of acceleration of exercisability under the Plan) in any
one year for shares having a fair market value at the date of grant in excess of
$100,000, then the most recently granted of such ISOs, to the extent that they
are exercisable for shares having an aggregate Fair Market Value in excess of
such limit, shall be deemed to be NQOs.
13. Indemnification. Any member of the Committee or the Board who is made,
or threatened to be made, a party to any action or proceeding, whether civil or
criminal, by reason of the fact that such person is or was a member of the
Committee or the Board insofar as it relates to the Plan shall be indemnified by
the Company, and the Company may advance such person's related expenses, to the
full extent permitted by law and/or the Certificate of Incorporation or By-laws
of the Company.
14. Effective Date of the Plan; Termination of the Plan and Stock
Options. The Plan shall become effective on the date of adoption by the Board,
provided, however, that the Plan shall be subject to approval by the affirmative
vote of the holders of the majority of Common Stock of the Company on or before
December 31, 2000.
15. Expenses. Except as otherwise provided herein for the payment of
Federal, State and other governmental taxes, the Company shall pay all fees and
expenses incurred in connection with the Plan and the issuance of the stock
hereunder.
16. Government Regulations, Registrations and Listing of Stock.
(a) The Plan, and the grant and exercise of Stock Options thereunder, and
the Company's obligation to sell and deliver stock under such Stock Options
shall be subject to all applicable Federal and State laws, rules and regulations
and to such approvals by any regulatory or governmental agency as may, in the
opinion of the Company, be necessary or appropriate.
(b) The Company may in its discretion require whether or not a registration
statement under the Securities Act of 1933 and the applicable rules and
regulations thereunder (collectively the "Act") is then in effect with respect
to shares issuable upon exercise of any stock option or the offer and sale of
such shares is exempt from the registration provisions of such Act, that as a
condition precedent to the exercise of any Stock Option the person exercising
the Stock Option give to the Company a written representation and undertaking
satisfactory in form and substance to the Company that such person is acquiring
the shares for his or her own account for investment and not with a view to the
distribution or resale thereof and otherwise establish to the company's
satisfaction that the offer or sale of the shares issuable upon exercise of the
Stock Option will not constitute or result in any breach or violation of the Act
or any similar act or statute or law or regulation in the event that a
Registration statement under the Act is not then effective with respect to the
Common Shares issued upon the exercise of such stock option; the company may
place upon any stock certificate appropriate legends referring to the
restrictions on disposition under the Act.
(c) In the event the class of shares issuable upon the exercise of any
Stock Option is listed on any national securities exchange or NASDAQ, the
Company shall not be required to issue or achieve any certificate for shares
upon the exercise of any Stock Option, or to the listing of the shares so
issuable on such national securities exchange or NASDAQ and prior to the
registration of the same under the Securities Exchange Act of 1934 or any
similar act or statute.
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EXHIBIT B
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
GLOBIX CORPORATION
UNDER SECTION 242 OF THE DELAWARE GENERAL CORPORATION LAW
Globix Corporation, a corporation organized and existing under the laws of
the State of Delaware under the laws of the State of Delaware (the
"Corporation") hereby certifies as follows:
1. The name of the Corporation is Globix Corporation.
2. The Certificate of Incorporation of the Corporation was filed with the
Secretary of State of Delaware, Division of Corporations on September
29, 1995 under the name Bell Technology Group Ltd.
3. The amendment of the Certificate of Incorporation of the Corporation
effected by this Certificate of Amendment is to increase the number of
shares authorized common stock of the corporation.
4. To accomplish the foregoing amendment, Article FOURTH of the Certificate
of Incorporation of the Corporation, is hereby amended to read as
follows:
"FOURTH: The Corporation shall have the authority to issue five hundred
million (500,000,000) shares of Common Stock having a par value of $.01
per share. The Corporation shall also have the authority to issue five
million (5,000,000) shares of Preferred Stock having a par value of $.01
per share (the "Preferred Shares"). The Board of Directors of the
Corporation (the "Board") shall have the right to authorize, by
resolution of the Board adopted in accordance with the By-laws of the
Corporation, the issuance of the Preferred Shares and, in connection
therewith, to (a) cause such shares to be issued in series; (b) fix the
annual rate of dividends payable with respect to the Preferred shares or
series thereof; (c) fix the amount payable upon redemption of the
Preferred shares; (d) fix the amount payable upon liquidation or
dissolution of the Company; (e) fix provisions as to voting rights, if
any; and (e) fix such other rights, powers and preferences as the Board
shall determine."
5. The foregoing amendment of the Certificate of Incorporation of the
Corporation was authorized by a vote of Board of Directors of the
Corporation, followed by a vote of the holders of a majority of all
outstanding shares of the Corporation entitled to vote on said amendment
of the Certificate of Incorporation.
IN WITNESS WHEREOF, we have subscribed this document on the date set forth
below and do hereby affirm, under the penalties of perjury, that the statements
contained herein have been examined by us and are true and correct.
, 2000
By:
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Marc H. Bell, President
Attest:
By:
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Paul Asher, Secretary
29
GLOBIX CORPORATION
PROXY
Annual Meeting of Shareholders - Tuesday, April 4, 2000.
The undersigned shareholder of Globix Corporation (the "Company") hereby
appoints Marc H. Bell the attorney and proxy of the undersigned, with full power
of substitution, to vote, as indicated herein, all the common shares of the
Company standing in the name of the undersigned at the close of business on
February 21, 2000 at the Annual Meeting of Shareholders of the Company to be
held at the offices of the Company at 139 Centre Street, New York, New York
10013 at 11:00 a.m., local time, on Tuesday, April 4, 2000, and at any and all
adjournments thereof, with all the powers the undersigned would possess if then
and there personally present and especially (but without limiting the general
authorization and power hereby given) to vote as indicated on the proposals, as
more fully described in the Proxy Statement for the meeting.
(Please fill in the reverse side and return promptly in the enclosed envelope.)
30
PLEASE MARK BOXES /-/ OR /X/ IN BLUE OR BLACK INK.
1. Election of Directors.
FOR all nominees / /
WITHHOLD authority only for those nominees whose name(s) I have written
below / /
WITHHOLD authority for ALL nominees / /
Nominees for Director are: Marc H. Bell, Robert B. Bell, Martin Fox, Jack D.
Furst, Michael J. Levitt, Sid Paterson, Lord Anthony St. John of Bletso, Harshad
Shah, Tsuyoshi Shiraishi and Dr. Richard Videbeck.
2. Proposal to approve the Company's 2000 Stock Option Plan.
For / / Against / / Abstain / /
3. Proposal to approve the amendment to the Company's Certificate of
Incorporation to increase the Company's authorized common stock to
500,000,000 shares, par value $.01.
For / / Against / / Abstain / /
4. Proposal to approve the amendment to the Company's Certificate of
Incorporation to increase the Company's authorized preferred stock to
5,000,000 shares, par value $.01.
For / / Against / / Abstain / /
5. Proposal to approve the amendments to the Company's 1995 Stock Option
Plan.
For / / Against / / Abstain / /
6. Proposal to approve the amendments to the Company's 1998 Stock Option
Plan.
For / / Against / / Abstain / /
31
7. Proposal to approve the amendments to the Company's 1999 Stock Option
Plan.
For / / Against / / Abstain / /
8. Proposal to confirm the selection of Arthur Andersen LLP as the
Company's independent auditors for the fiscal year ending September 30,
2000.
For / / Against / / Abstain / /
9. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment or
adjournments thereof.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED FOR THE
ELECTION OF THE PROPOSED DIRECTORS AND FOR THE ABOVE PROPOSALS UNLESS OTHERWISE
INDICATED.
SIGNATURE(S) should be exactly as name or names appear on this [Sign,
Date and Return proxy. If stock is held jointly, the Proxy Card Promptly each
holder should sign. If Using the Enclosed signing is by attorney, executor,
Envelope.] administrator, trustee or guardian, please give full title.
Dated , 2000
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Signature
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Print Name
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Signature
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Print Name