0000950144-01-507247.txt : 20011009
0000950144-01-507247.hdr.sgml : 20011009
ACCESSION NUMBER: 0000950144-01-507247
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20011030
FILED AS OF DATE: 20010926
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: IBS INTERACTIVE INC
CENTRAL INDEX KEY: 0001057257
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370]
IRS NUMBER: 133817344
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-24073
FILM NUMBER: 1744905
BUSINESS ADDRESS:
STREET 1: 2 RIDGEDALE AVE
STREET 2: STE 350
CITY: CEDAR KNOLLS
STATE: NJ
ZIP: 07927
BUSINESS PHONE: 9732852600
MAIL ADDRESS:
STREET 1: 2 RIDGEDALE AVE
STREET 2: STE 350
CITY: CEDAR KNOLLS
STATE: NJ
ZIP: 07927
DEF 14A
1
g71719ddef14a.txt
IBS INTERACTIVE, INC.
1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. __)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
IBS INTERACTIVE, INC.
(Name of Registrant as Specified in Its Charter)
----------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number 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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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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September 14, 2001
Dear Stockholder:
It is my pleasure to invite you to the 2001 Annual Meeting of
Stockholders of IBS Interactive, Inc. The 2001 Annual Meeting will be held on
October 30, 2001 at 10:00 a.m., local time, at the law offices of Bush Ross
Gardner Warren & Rudy PA, 220 South Franklin Street, Tampa, Florida.
The notice of the meeting and proxy statement on the following pages
contains information on the formal business of the meeting. Whether or not you
expect to attend the meeting, please sign, date, and return your proxy promptly
in the enclosed envelope to assure your stock will be represented at the
meeting.
The continuing interest of the stockholders in the business of the
Company is gratefully acknowledged and appreciated.
Sincerely,
ROY E. CRIPPEN, III,
Chief Executive Officer and President
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IBS INTERACTIVE, INC.
400 NORTH ASHLEY DRIVE, SUITE 2600
TAMPA, FLORIDA 33602
NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 30, 2001
The Annual Meeting of Stockholders of IBS Interactive, Inc. ("IBS
Interactive" or the "Company") will be held on October 30, 2001 at the law
offices of Bush Ross Gardner Warren & Rudy PA, 220 South Franklin Street, Tampa,
Florida at 10:00 a.m., local time, to consider and act upon the following
matters:
1. To elect five directors to serve, subject to the provisions of
the By-laws, until the next Annual Meeting of Stockholders and
until their respective successors have been duly elected and
qualified;
2. To approve an amendment to the Restated Certificate of
Incorporation to increase the number of authorized shares of
common stock;
3. To approve an amendment to the Restated Certificate of
Incorporation to change the name of the Company to Digital
Fusion, Inc.; and
4. To transact such other business as may properly come before
the meeting or any adjournment or adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on September 21,
2001 are entitled to notice of and to vote at this Meeting and any adjournments
thereof. For ten days prior to the meeting, a complete list of the shareholders
entitled to vote at the Meeting will be available for examination by any
shareholder for any purpose relating to the Meeting during ordinary business
hours at the executive offices of the Company in Tampa, Florida.
By Order of the Board of Directors,
Elena I. Crosby,
Secretary
Tampa, Florida
September 14, 2001
IMPORTANT
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
PROMPTLY RETURN IT IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE, WHETHER OR NOT YOU
INTEND TO ATTEND THE MEETING. PROXIES ARE REVOCABLE, AND ANY SHAREHOLDER MAY
WITHDRAW THEIR PROXY AND VOTE IN PERSON AT THE MEETING.
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IBS INTERACTIVE, INC.
400 NORTH ASHLEY DRIVE, SUITE 2600
TAMPA, FLORIDA 33602
PROXY STATEMENT FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, OCTOBER 30, 2001
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of the Company for use at the Annual
Meeting of Stockholders to be held on October 30, 2001 at 10:00 a.m., local
time, at the law offices of Bush Ross Gardner Warren & Rudy PA, 220 South
Franklin Street, Tampa, Florida, and any adjournment or adjournments thereof,
for the purposes set forth in the accompanying Notice of Meeting. Unless
instructed to the contrary on the proxy, it is the intention of the persons
named in the proxy to vote the proxies in favor of (i) the election of the five
director nominees listed below to serve until the next Annual Meeting of
Stockholders, (ii) the approval of an amendment to the Restated Certificate of
Incorporation to increase the number of authorized shares of common stock, and
(iii) the approval of an amendment to the Restated Certificate of Incorporation
to change the name of the Company to Digital Fusion, Inc. The record date with
respect to this solicitation is the close of business on September 21, 2001, and
only stockholders of record at that time will be entitled to notice of and to
vote at the meeting.
Our principal executive office is located at 400 North Ashley Drive,
Suite 2600, Tampa, Florida 33602 and our telephone number is (813) 221-0024. The
shares represented by all validly executed proxies received in time to be taken
to the meeting, and not previously revoked, will be voted at the meeting. Each
proxy may be revoked by the stockholder at any time prior to its being voted by
filing with us a revoking instrument or a duly executed proxy bearing a later
date. The powers of the proxy holder will be suspended if the person executing
the proxy attends the Annual Meeting in person and so requests. Attendance at
the Annual Meeting will not, in itself, constitute a revocation of a previously
granted proxy. The approximate date on which this proxy statement and
accompanying proxy has first been mailed to stockholders is September 26, 2001.
As August 31, 2001, 7,137,131 shares of our common stock, par value
$.01 per share, were outstanding. Each stockholder will be entitled to one vote
for each share of common stock registered in his or her own name on the books of
the Company as of the close of business on September 21, 2001, on all matters
that come before the meeting. The presence in person or by proxy at the Annual
Meeting of the holders of a majority of such shares shall constitute a quorum.
There is no cumulative voting.
Directors will be elected by a plurality of votes cast at the Annual
Meeting. All other matters that properly come before the Annual Meeting must be
approved by a majority of the votes present at the Annual Meeting. Votes shall
be counted by one or more employees of Continental Stock Transfer and Trust
Company (our "Transfer Agent") who shall serve as the inspectors of election.
The inspectors of election will canvas the stockholders present in person at the
meeting, count their votes and count the votes represented by proxies presented.
With respect to approval of any particular proposal, abstentions are considered
present at the meeting, but since they are not affirmative votes for the
proposal they will have the same effect as votes against the proposal. Broker
non-votes, on the other hand, are only considered present at the meeting for the
particular proposals voted by brokers but not for particular proposals for which
the broker withheld authority to vote. Broker non-votes occur when a broker
nominee (that 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.
PROPOSAL 1- ELECTION OF DIRECTORS
The five persons named below, who are currently members of our Board of
Directors, have been nominated for reelection to serve until the next Annual
Meeting of Stockholders 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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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE SLATE OF NOMINEES
NAMED BELOW.
NICHOLAS R. LOGLISCI, JR., 39. Mr. Loglisci has served as our Chairman
of the Board since the Company's inception in February 1995. In July 2001, Mr.
Loglisci became the President and COO of Time Link International Corporation (a
privately-held company) a leading provider of workforce management and data
collection solutions. From February 1995 to July 2001, Mr. Loglisci served with
IBS Interactive as its Chief Executive Officer. Prior to founding the Company,
Mr. Loglisci gained corporate experience in a variety of sales, marketing and
management positions while working for Motorola Inc. and the Allen Telecom
Group. Prior to his corporate experience, Mr. Loglisci served as an officer in
the U.S. Army from May 1985 to July 1990. Mr. Loglisci is a graduate of both the
U.S. Army's Airborne and Ranger schools. Mr. Loglisci holds a BS degree in
Engineering from the United States Military Academy and an MBA degree from New
York University's Stern School of Business.
ROY E. CRIPPEN, III, 42. Mr. Crippen has served as a director of the
Company since March 2000. Mr. Crippen became our Chief Executive Officer in July
2001 and has served as President since October 2000 and as our Chief Operating
Officer since March 2000. Prior to joining the Company, he was Chief Executive
Officer of digital fusion, inc., a company that IBS Interactive acquired in
March 2000. Before digital fusion, Mr. Crippen was one of the original founders
of PowerCerv Technologies Corporation ("PowerCerv"), an Enterprise Resource
Planning ("ERP") software company he helped take public in 1996. During his time
with PowerCerv, Mr. Crippen held several key positions including Executive Vice
President, Chief Technology Officer, and Vice Chairman. In 1996, Mr. Crippen was
co-recipient of the Florida Entrepreneur of the Year award in the technology
division. Mr. Crippen was Florida Regional Manager for Spectrum Associates, an
application development and consulting company before joining PowerCerv. Mr.
Crippen holds a degree in computer engineering from the University of South
Florida.
BRUCE E. FIKE, 57. Mr. Fike has served as a director of the Company
since April 2000. Since 1991, Mr. Fike has served as Chairman of Aldenshire
Ltd., an investment corporation. Mr. Fike serves as an advisor to Moeo in Los
Angeles, CA and Link2Cell in Atlanta, GA, and a director of MyBenefitSource, in
Atlanta. Mr. Fike is a director of the Center for Puppetry Arts, a
not-for-profit organization. He holds a BS degree in Mathematics and Management
Science from the University of Akron and studied corporate law at the University
of Tennessee College of Law.
AHMAD AL-KHALED, 34. Mr. Al-Khaled has served as a director since April
2000. Mr. Al-Khaled has been the Chief Operating Officer of Tekbanc Limited
since March 2000. Mr. Al-Khaled is also the Assistant Deputy Director and head
of the Investment Funds Division at the Kuwait Fund for Arab Economic
Development's Investment Department, which he joined in September 1995. He also
serves on the board of directors of incuVest LLC, a U.K.-based creator and
operator of leading-edge technology companies, Brask Management, a U.K.-based
sports management firm, and Tech Pacific, a Hong Kong-based technology services
company. Mr. Al-Khaled holds a BA degree from California State University.
O. G. GREENE, 59. Mr. Greene became a director of the Company in
January 2001. Mr. Greene has served as the Chief Executive Officer of CareeRx, a
provider of automated solutions to the recruiting and career management industry
since October 1999. From January 1998 to April 1999, Mr. Greene served as the
Chief Executive Officer of Speer Communications (now DSM Networks), a Nashville,
Tennessee based provider of information and media services to the broadcast and
network industries. In 1995, Mr. Greene co-founded Atlanta, Georgia based
GridNet International, a provider of TCP-IP networks to large telecommunications
companies and corporations such as BellSouth, PACBell, BellAtlantic, and
Mindspring, and served as its President and Chief Executive Officer from June
1995 to January 1998. Prior to GridNet, Mr. Greene served as Executive Vice
President and Chief Operating Officer of First Financial Management, a provider
of payment system services to the credit card, health care and checking
industries. Mr. Greene also is a past Chief Executive Officer of National Data
Corporation (NDC), one of the largest providers of payment system services to
the credit card and healthcare industries. Prior to his leadership at NDC, Mr.
Greene enjoyed a twenty-five year career at Burroughs Corporation. Mr. Greene
also is on the board of directors of PowerCerv Corporation in Tampa, Florida;
The National Registry, Inc. in St. Petersburg, Florida and Auburn University.
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DIRECTOR ATTENDANCE
Our Board of Directors met seven times during the fiscal year that
ended on December 31, 2000. Each Director listed above who was then serving
attended all of the meetings of the Board of Directors and the meetings of the
Committees of the Board of Directors of which he was a member.
EXECUTIVE COMMITTEE. We have an Executive Committee consisting of Messrs.
Crippen and Al-Khaled. The Executive Committee was formed in April 2000. The
primary function of the Executive Committee is to review the Company's
operations on an ongoing basis, discuss ways to increase shareholder value, and
make recommendations to the Board of Directors concerning the management of the
Company. In fiscal year 2000, the Executive Committee held no meetings.
AUDIT COMMITTEE. We have an Audit Committee consisting of Messrs. Fike,
Al-Khaled and Crippen. Barrett Wissman and Susan Torricelli, who resigned as
Directors of the Company effective August 8, 2000 and May 21, 2001 respectively,
were members of the Audit Committee. Messrs. Fike and Al-Khaled are both
independent directors of the Company. The functions of the Audit Committee and
its activities during fiscal year 2000 are described below under the heading
Report of the Audit Committee.
COMPENSATION COMMITTEE. We also have a Compensation Committee consisting of
Messrs. Crippen, Fike and Greene. Frank Altieri, David Faeder and Patricia Duff,
who resigned as Directors of the Company effective April 3, 2000, January 23,
2001 and August 3, 2001 respectively, were members of the Compensation
Committee. Subject to existing contractual obligations, the Compensation
Committee is responsible for setting and administering the policies that govern
executive compensation and the granting of employee stock options. The
Compensation Committee met once in 2000.
We do not have a nominating committee or other committees.
OTHER EXECUTIVE OFFICERS OF IBS INTERACTIVE
KAREN L. SURPLUS, 42. Ms. Surplus has served as our Chief Financial
Officer and Treasurer since January 2001 and previously was our Vice President
of Administration since March 2000. Prior to joining us, she was the Vice
President of Finance of digital fusion, inc. Prior to her position with digital
fusion, Ms. Surplus was Chief Accounting Officer of PowerCerv Corporation, whom
she helped take public in 1996. Before her time at PowerCerv, she spent ten
years at Florida Progress Corporation and its subsidiaries, the last position
held being Controller and Assistant Treasurer with the Financial Services
subsidiary. Ms. Surplus spent four years with Arthur Andersen public accounting
firm where she received her Certified Public Accounting license. Ms. Surplus
holds a BA degree in Business from Kansas State University and an MBA degree
from the University of Tampa.
ELENA I. CROSBY, 36. Ms. Crosby has served as our Director of Legal
Affairs and Secretary since December 2000. Prior to joining us, she served as
Corporate Paralegal for PowerCerv Corporation, handling corporate, SEC, and
intellectual properties as that company was taken public in 1996. Before her
time at PowerCerv, she spent five years at a prominent litigation firm in Miami.
Ms. Crosby previously spent six years as Compliance Manager for two major
brokerage firms where she was responsible for NASD and SEC compliance as well as
trading for institutional accounts.
CERTAIN TRANSACTIONS
In September and October 1999, Mr. Stephen Loglisci, the brother of
Nicholas R. Loglisci, Jr., the Chairman of the Board of Directors of the
Company, purchased $300,000 in convertible debentures issued by the Company (the
"1999 Convertible Debentures"). The 1999 Convertible Debentures paid an interest
rate of 12% per year and were convertible into a subsequent equity offering by
the Company with proceeds of at least $3 million. The 1999 Convertible
Debentures were converted in December 1999 in connection with a $4.8 million
private placement of units consisting of common stock and warrants offered by
the Company (including $600,000 of proceeds from the conversion of the 1999
Convertible Debentures). In connection with the conversion, Mr. Stephen Loglisci
received three units consisting of an aggregate 30,000 shares of common stock
and warrants to purchase 7,500 shares of common stock at $12.50 per share. In
addition, Mr. Stephen Loglisci received warrants to purchase an additional 6,840
shares at $12.50 per share.
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During March 2000, the Company purchased digital fusion, inc. ("DFI"),
an information technology consulting services company. For his ownership
interests in DFI, Roy E. Crippen, III received 399,396 shares of the Company's
common stock and a promissory note in the original principal amount of $215,891
and bearing interest at the rate of 6% per annum. A balloon payment equal to the
remaining principal balance on the note and all accrued interest is due on March
1, 2003. Roy E. Crippen, III joined the Board of Directors of the Company in
March 2000 and is the Company's current Chief Executive Officer and President.
In April 2000, Tekbanc Limited purchased $5 million in equity
securities issued by the Company in 45.45 units consisting of 454,545 shares of
common stock at a price of $11.00 per share and three-year warrants to purchase
113,636 shares of common stock at $13.75 per share. Ahmad Al-Khaled, Chief
Operating Officer of Tekbanc, joined the Board of Directors of the Company in
April 2000 and received three-year warrants to purchase 60,000 shares of common
stock at $13.75 per share. Mr. Al-Khaled was named to the Executive Committee of
the Board of Directors of the Company in April 2000 and the Audit Committee of
the Board of Directors of the Company in July 2000. Tekbanc had a right to
purchase an additional 45.45 units consisting of 454,545 shares of common stock
at a price of $11.00 per share and three-year warrants to purchase 113,636
shares of common stock at an exercise price of $13.75 per share. Tekbanc's right
to purchase these shares and warrants expired on August 1, 2000.
In September 2000, the Company purchased the original equipment
manufacturing rights to a financial accounting software package developed by
PowerCerv Technologies Corporation ("PowerCerv"). The purchase price was
$350,000, which approximates fair market value, of which $140,000 was paid in
the third quarter of 2000, $105,000 was paid on December 31, 2000 and $105,000
will be paid during 2001. Roy Crippen, III, the Company's Chief Executive
Officer, President and Chief Operating Officer, is a member of the Board of
Directors of PowerCerv.
On October 13, 2000, the Company entered into a consulting services
agreement with PowerCerv. The Company provides consulting services to PowerCerv
at $130 per hour for a total of $350,000. PowerCerv paid IBS $200,000 and the
remaining $150,000 of services will be offset by reducing a long-term note that
the Company owes to PowerCerv related to the Company's acquisition of digital
fusion, inc. in March 2000. The total amount of this agreement is due and
payable in 2001 and all unused paid services must be used by December 31, 2001.
During April 2001, the Company sold its web hosting and non-dial-up
business to Veraciti, Inc. for $200,000 cash and $60,000 worth of services to
complete certain customer projects. In addition, Veraciti assumed certain leases
obligations of the Company related to the web hosting and non-dial-up business
and subleased 4,000 square feet of the Cedar Knolls office space. The Company
recorded a $211,000 loss related to this sale. Veraciti is owned by Frank
Altieri, a former member of the Board of Directors of IBS.
REPORT OF THE AUDIT COMMITTEE
The following Report of the Audit Committee does not constitute
soliciting material and should not be deemed filed or incorporated by reference
into any other Company filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent the Company specifically incorporates
this Report be reference therein.
During fiscal 2000, the Audit Committee of the Board of Directors
developed a charter for the Audit Committee, which was approved by the full
Board on August 2, 2000. The complete text of the new charter, which reflects
standards set forth in the new SEC regulations and Marketplace Rules of NASDAQ,
is reproduced in the appendix to this proxy statement.
The Audit Committee reviewed and discussed the Company's December 31,
2000 audited financial statements with the Company's management and with BDO
Seidman, LLP ("BDO"), our independent auditors.
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In accordance with Statement on Auditing Standards (SAS) 61,
Communication with Audit Committees and SAS 90, Audit Committee Communications,
the audit committee discussed certain matters required to be discussed with the
Company's independent auditors.
The audit committee has received written disclosures and a letter from
BDO as required by the Independence Standards Board 1, Independence Discussions
with Audit Committees, and the committee has discussed the issue of auditor
independence with BDO.
The non-auditing services provided by BDO is compatible with
maintaining BDO's independence in auditing the Company's annual financial
statements and reviewing the Company's quarterly financial statements.
Based on the foregoing, the Audit Committee recommended to the Board of
Directors of the Company that the audited financial statements of the Company be
included in its Annual Report on Form 10-KSB for the fiscal year ended December
31, 2000.
Members of the Audit Committee
Bruce E. Fike /s/ Bruce E. Fike
-------------------------------
Ahmad Al-Khaled /s/ Ahmad Al-Khaled
-------------------------------
Roy E Crippen, III /s/ Roy E. Crippen, III
-------------------------------
EXECUTIVE COMPENSATION
The following table sets forth compensation paid to IBS Interactive's
Chief Executive Officer and its other most highly compensated executive officers
for the three years ended December 31, 2000.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
----------------------------------------------- -------------------------
Other Securities
Name and Principal Annual Restricted Underlying
Position Year Salary Bonus Compensation(1) Stock Awards Options
------------------ ---- -------- ------- --------------- ------------ ----------
2000 $125,294 $ 0 $ 7,200 $0 50,000
Nicholas R. Loglisci, Jr. 1999 $115,000 $15,000 $ 7,200 $0 5,000
Former Chief Executive Officer(2)................ 1998 $ 75,133 $ 0 $ 5,200 $0 0
Roy E. Crippen, III
Chief Executive Officer, President and Chief
Operating Officer(3)............................ 2000 $ 83,333 $ 0 $ 0 $0 150,000
Frank R. Altieri, Jr. 2000 $114,932 $ 0 $ 5,500 $0 50,000
Former Chief Information Officer(4).............. 1999 $115,000 $15,000 $ 4,800 $0 5,000
1998 $ 75,133 $ 0 $ 4,800 $0 0
Howard B. Johnson 2000 $125,294 $ 0 $ 6,000 $0 150,000
Former Chief Financial Officer(5)............... 1999 $ 71,875 $ 0 $18,200 $0 150,000
Karen L. Surplus
Chief Financial Officer(6)....................... 2000 $ 91,667 $ 0 $ 0 $0 65,000
(1) Represents payment of automobile allowance and, in the case of Mr.
Johnson, reimbursement of $15,000 in relocation expenses during 1999.
(2) Mr. Loglisci, Jr. resigned as Chief Executive Officer during July 2001.
(3) Mr. Crippen's employment with IBS Interactive commenced on March 1,
2000 when DFI was acquired.
(4) Mr. Altieri terminated his employment on November 15, 2000.
(5) Mr. Johnson's employment with IBS Interactive commenced on May 7, 1999
and he terminated his employment with the Company on February 1, 2001.
(6) Ms. Surplus's employment with IBS Interactive commenced on March 1,
2000 when DFI was acquired.
The following table summarizes options granted during the year ended
December 31, 2000, to the executive officers named in the Summary Compensation
Table above.
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OPTION GRANTS IN LAST FISCAL YEAR
(Individual Grants)
Number of
Securities Percent of Total Operations Exercise
Underlying Options Granted to Employees in Price Per
Name Granted(1),(2)(3) Fiscal Year(4) Shares Expiration Date
---- ------------------ --------------------------- --------- ---------------
Nicholas R. Loglisci, 40,000 3.51% $ 6.0625 July 6, 2010
Jr.(3) ................................ 10,000 0.88% $10.1875 January 13, 2010
Roy E. Crippen III(1).................. 150,000 13.15% $ 10.49 March 1, 2010
Frank R. Altieri, Jr.(2)............... 40,000 3.51% $ 6.0625 February 15, 2004
10,000 0.88% $10.1875 February 15, 2004
Howard B. Johnson(2)................... 25,000 2.19% $ 0.938 February 15, 2004
50,000 4.38% $ 6.0625 Expired(2)
75,000 6.57% $10.1875 Expired(2)
Karen L. Surplus(1).................... 25,000 2.19% $ 0.938 November 29, 2010
40,000 3.51% $ 10.49 March 1, 2010
(1) The options granted to Mr. Crippen and Ms. Surplus of 150,000 and
40,000 respectively, vest 25% on March 1, 2000 and the remainder vest
ratably each month over a 36-month period. The option to purchase
25,000 shares of common stock granted to Mrs. Surplus vest 25% on
November 29, 2000 and the remainder vest over a four-year period at the
rate of 20% on each anniversary of the date of grant.
(2) Messrs. Altieri and Johnson terminated their employment with the
Company. As per their termination agreements with the Company, their
options terminated except for 50,000 options for Mr. Altieri, which
expire on February 15, 2004 and 25,000 options for Mr. Johnson, which
expire on February 15, 2004. These options are fully vested.
(3) Mr. Loglisci resigned from the Company during July 2001 and per his
termination agreement, these options became fully vested at that time.
(4) During the year ended December 31, 2000, IBS Interactive granted
employees options to purchase 1,140,825 shares of common stock under
our Stock Option Plans.
AGGREGATED OPTION EXERCISES IN FISCAL 2000 AND
FISCAL 2000 YEAR-END OPTION VALUES
The following table shows the number of shares underlying both
exercisable and unexercisable stock options held by the executive officers named
in the Summary Compensation Table as of the year ended December 31, 2000, and
the values for exercisable and unexercisable options. No options were exercised
during the year ended December 31, 2000 by these executive officers.
Number of Securities Underlying Value Unexercised Options
Unexercised Options In-The-Money Options
at December 31, 2000 at December 31, 2000(1)
---------------------------------- ---------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
Nicholas R. Loglisci, Jr................ 55,000 0 $0 $0
Roy E. Crippen, III..................... 65,625 84,375 $0 $0
Frank R. Altieri, Jr.................... 50,000 0 $0 $0
Howard B. Johnson....................... 25,000 0 $0 $0
Karen L. Surplus........................ 17,500 47,500 $0 $0
(1) Options are in-the-money if the market value per share of the shares
underlying the options is greater than the option exercise price. This
calculation is based on the fair market value at December 31, 2000 of
$0.75 per share, less the exercise price.
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COMPENSATION OF DIRECTORS
Directors who are officers or employees of the Company receive no
additional compensation for service as members of the Board of Directors or
committees thereof. Directors are reimbursed for their reasonable expenses in
connection with attendance at meetings of the Board of Directors. All directors
who are not employees (the "Eligible Directors") may participate (as directors)
in our Stock Option Plans. Upon the initial election of an Eligible Director,
such director is granted an option to purchase 10,000 shares of common stock
(the "Initial Options"). The Initial Options become exercisable in full on the
first anniversary of the date of grant if such person is then serving as a
director. In addition, immediately after each Annual Meeting of Stockholders,
each Eligible Director reelected will receive an option to purchase 3,000
additional shares of common stock (the "Annual Options"). The Initial Options
and Annual Options have a term of ten years and an exercise price payable in
cash or shares of common stock. The exercise price of Initial Options and Annual
Options will be equal to the fair market value of our common stock on the date
of grant. Eligible Directors will receive such additional compensation for their
service as the Board of Directors may determine from time to time. Two
directors, O.G. Greene and Bruce E. Fike receive $1,000 per Board of Director's
non-telephonic meeting. In addition, each non-employee director received an
option to purchase 60,000 shares of the Common Stock. These options vest ratably
over a twelve-month period and have an exercise price of $0.29 per share.
In May 2001, we purchased an aggregate of $3,000,000 of directors and
officers liability insurance for indemnification of all of our directors and
officers at a cost of approximately $70,000.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-OF-CONTROL
ARRANGEMENTS
Employment Agreements
In March 2000, we entered into a three-year employment agreement with
Mr. Crippen, pursuant to which Mr. Crippen is employed as our Chief Operating
Officer. Mr. Crippen is entitled to compensation consisting of an annual base
salary in the amount of $100,000. In addition, Mr. Crippen is entitled to a base
salary increase of 20% per year, a bonus based on the achievement of certain
performance criteria, including our profitability, and a monthly automobile
allowance. In the event that we terminate Mr. Crippen, without cause, we will be
required to pay to him his annual base salary for a period of two years after
termination and options and restricted stock then held by such executive will
automatically vest. Mr. Crippen is also subject to certain non-competition,
confidentiality and non-disclosure of invention obligations pursuant to his
employment agreement.
The employment agreement entered into between Mr. Crippen and the
Company contains a change of control provision. In his employment agreement, a
change of control (hereinafter, an "Employment Agreement Change of Control") is
defined as either (1) a transaction that results in a person other than Mr.
Crippen (or any person or entity related to or controlled by them) becoming the
owner of more than 50% of the total aggregate voting power of our outstanding
voting stock; or (2) a period of two consecutive years, during which individuals
who at the beginning of such period constituted our Board of Directors (together
with any new directors whose election by stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) ceasing for any reason to constitute a
majority of the directors then in office unless such majority of the directors
then in office has been elected or nominated for election by Mr. Crippen (or any
person or entity related to or controlled by them).
The employment agreement of Mr. Crippen provides that if, upon an
Employment Agreement Change of Control, or at any time within one year
thereafter, the executive is no longer employed by us for any reason other than
for cause or the executive's death, disability or legal incapacity, the
executive shall be entitled to receive a lump sum payment equal to two times the
amount of his annual base salary then in effect plus any other amounts to which
he is entitled under our employee compensation plans and policies as of the date
of termination.
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During 2000, Mr. Loglisci was employed as our Chief Executive Officer.
Mr. Loglisci tendered his resignation effective July 1, 2001 and his employment
agreement was terminated by an Employment Termination Agreement. In accordance
with his termination agreement, the Company paid Mr. Loglisci a payment of
$16,769. Mr. Loglisci's family medical and dental coverage will continue through
December 31, 2001, and his 55,000 options are completely vested and remain
exercisable until the option agreements expiration dates. Mr. Loglisci continues
to be the Chairman of the Company's Board of Directors.
During 2000, Mr. Johnson was employed as our Chief Financial Officer.
Mr. Johnson tendered his resignation effective February 1, 2001 and his
employment agreement was terminated by mutual agreement of Mr. Johnson and us.
The Company agreed to vest 25,000 of Mr. Johnson's options, which expire on
February 15, 2004.
During 2000, Mr. Altieri was employed as our Chief Information Officer.
Mr. Altieri resigned from the Company effective November 15, 2000 and his
employment agreement was terminated by an Employment Termination Agreement. The
Company agreed to vest 50,000 of Mr. Altieri's options, which expire on February
15, 2004.
Mr. Brenner was our Chief Operating Officer through May 2000. Mr.
Brenner's employment agreement was terminated by a termination agreement
effective May 31, 2000. Mr. Brenner received seven monthly payments of
$12,853.81 for certain consulting services. Mr. Brenner's family medical and
dental coverage continues through December 31, 2001. In accordance with his
termination agreement, he was granted an additional 25,000 options and all
options including the additional 25,000 which totals 122,500 are completely
vested and remain exercisable until May 31, 2005.
1998 and 1999 and 2000 Stock Option Plans
Effective as of March 10, 1998, we adopted the 1998 IBS Interactive,
Inc. Stock Option Plan (the "1998 Stock Option Plan") and effective as of May 7,
1999 we adopted the 1999 IBS Interactive, Inc. Stock Option Plan (the "1999
Stock Option Plan"). Effective as of June 9, 2000, we adopted the 2000 IBS
Interactive, Inc. Stock Option Plan (the "2000 Stock Option Plan"). Stock
options granted under the 1998 Stock Option Plan, the 1999 Stock Option Plan and
the 2000 Stock Option Plan become exercisable in certain situations, including
termination of employment without cause, after a change of control as defined in
each of the 1998 Stock Option Plan, 1999 Stock Option Plan and 2000 Stock Option
Plan (a "Stock Option Change of Control").
A Stock Option Change of Control is deemed to occur if any of the
following events occur:
(i) Any "person" or "group" within the meaning of Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), (a) becomes the "beneficial owner," as defined in
Rule 13d-3 under the Exchange Act, of 50% or more of the combined
voting power of IBS Interactive's then outstanding securities,
otherwise than through a transaction or series of related transactions
arranged by, or consummated with the prior approval of, the Board of
Directors of IBS Interactive; or (b) acquires by proxy or otherwise the
right to vote 50% or more of the then outstanding voting securities of
IBS Interactive, otherwise than through an arrangement or arrangements
consummated with the prior approval of the Board for the election of
directors, for any merger or consolidation of IBS Interactive or for
any other matter or question.
(ii) During any period of 24 consecutive months, Present
Directors and/or New Directors (each as defined in the 1998, 1999 or
2000 Stock Option Plan) cease for any reason to constitute a majority
of the Board.
(iii) Consummation of (a) any consolidation or merger of IBS
Interactive occurs in which IBS Interactive is not the continuing or
surviving corporation or pursuant to which shares of our stock would be
converted into cash, securities or other property, other than a merger
of IBS Interactive in which the holders of IBS Interactive's stock
immediately prior to the merger have the same proportion and ownership
of common stock of the surviving corporation immediately after the
merger; or (b) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, of the assets of IBS Interactive occurs.
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SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of our common stock as of August 31, 2001 by: (i) each
person or entity who is known by IBS Interactive to own beneficially 5% or more
of the outstanding shares of common stock, (ii) each of the executive officers
named in the Summary Compensation Table above, (iii) each director, and (iv) all
of our executive officers and directors as a group.
Amount and Nature
of Beneficial Percentage of
Name and Address of Beneficial Owner(14) Ownership(1) Class(2)
---------------------------------------- ----------------- -------------
Nicholas R. Loglisci, Jr.(3) .................................... 438,091 6.1%
Roy Crippen III(4)................................................ 671,671 9.3%
Karen L. Surplus(5)............................................... 35,556 *
Ahmad Al-Khaled(6)................................................ 75,000 1.0%
Bruce Fike(7)..................................................... 28,000 *
O. G. Greene(8)................................................... 15,000 *
Tekbanc Limited(9)................................................ 643,181 9.0%
Frank R. Altieri, Jr.(10)......................................... 423,435 5.9%
Clark and Carla Frederick(11),(12)................................ 380,735 5.3%
Sean Mann(13)..................................................... 356,200 4.9%
All executive officers and directors as a group(6 persons)........ 1,218,401 17.1%
-----------
* Indicates beneficial ownership of less than one percent of the total
outstanding common stock.
(1) Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that
person, shares of common stock subject to options and warrants held by
that person that are currently exercisable or are exercisable within 60
days of August 31, 2001 are deemed outstanding. Such shares, however,
are not deemed outstanding for the purpose of computing the percentage
ownership of any other person. Except as indicated in the footnotes to
this table, the stockholder named in the table has sole voting and
investment power with respect to the shares set forth opposite such
stockholder's name.
(2) 7,137,131 shares of common stock are outstanding as of August 31, 2001.
(3) Includes 55,000 shares of common stock Mr. Loglisci has the right to
acquire through the exercise of stock options.
(4) Includes 96,875 shares of common stock Mr. Crippen has the right to
acquire through the exercise of stock options.
(5) Includes 35,056 shares of common stock Ms. Surplus has the right to
acquire through the exercise of stock options.
(6) Includes 75,000 shares of common stock Mr. Al-Khaled has the right to
acquire through the exercise of warrants and options.
(7) Includes 28,000 shares of common stock Mr. Fike has the right to
acquire through the exercise of stock options.
(8) Includes 15,000 shares of common stock Mr. Greene has the right to
acquire through the exercise of stock options.
(9) Includes 188,636 shares of common stock that Tekbanc Limited has the
right to acquire through the exercise of warrants.
(10) Includes 50,000 shares of common stock Mr. Altieri has the right to
acquire through the exercise of stock options.
(11) Mr. Frederick and Carla Frederick own these shares as joint tenants.
(12) Includes 15,000 shares of common stock that Mr. Frederick has the right
to acquire through the exercise of stock options.
(13) Includes 73,125 shares of common stock that Mr. Mann has the right to
acquire through the exercise of stock options.
(14) Unless otherwise indicated, the address of each beneficial owner is 400
N. Ashley, Suite 2600, Tampa, FL 33602.
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PROPOSAL 2 - APPROVAL OF AN AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK
The Board of Directors has approved an amendment to the second sentence
of the article numbered "Fourth" of the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of common stock the
Company is authorized to issue from Eleven Million (11,000,000) shares to
Sixteen Million (16,000,000) shares. The Company's authorized Preferred Stock of
One Million (1,000,000) shares will remain unchanged.
Under the proposed amendment, the second and third sentences of the
article numbered "Fourth" would be amended as follows:
"The total number of shares of all classes of stock that the
Corporation shall have the authority to issue is Seventeen Million (17,000,000)
shares, of which Sixteen Million (16,000,000) shall be Common Stock, having a
par value of $0.01 per share (the "Common Stock"), and One Million (1,000,000)
shares shall be classified as Preferred Stock, par value $0.01 per share (the
"Preferred Stock")."
As of August 31, 2001 approximately 7,137,131 of the Company's eleven
million currently authorized shares of common stock were issued and outstanding.
Of the remaining authorized shares of common stock, approximately three million
were reserved for issuance in connection with the Company's benefit plans and
exercise of stock warrants.
Our Board of Directors believes that it is in the best interests of the
Company and our stockholders to increase the number of authorized shares of our
common stock to insure that we have a sufficient number of shares for future
issuance. The availability of such shares will provide us with flexibility to
issue common stock to meet our business and financial needs, such as an equity
offering to raise capital and adoption or renewal of Company benefit plans.
Further, our Board of Directors believes the availability of additional shares
of common stock will enable us to attract and retain talented employees through
the grant of stock options or other stock-based incentives.
If this proposal is approved all or a portion of the newly authorized
shares may be issued without any further stockholder actions, except as required
by applicable law, and without first offering these shares to the Company's then
existing stockholders for purchase. Any issuance of these shares, other than on
a pro-rata basis to all stockholders, would decrease the existing stockholders'
percentage equity ownership and, depending on the price at which they are
issued, could be dilutive to the existing stockholders. The holders of common
stock have no preemptive rights.
The Company does not have any current plans, agreements or
understandings under which any of the additional shares of the common stock to
be authorized would be issued.
The Board has unanimously adopted this proposed amendment to the
Restated Certificate of Incorporation and directed that the proposed amendment
be submitted to the stockholders of the Company for their approval at the annual
meeting. If approved by the stockholders, this amendment will become effective
upon its filing with the Secretary of State of Delaware.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND
THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK.
PROPOSAL 3 - APPROVAL OF AN AMENDMENT TO THE RESTATED CERTIFICATE OF
INCORPORATION TO CHANGE THE NAME OF THE COMPANY
TO DIGITAL FUSION, INC.
The Board of Directors has approved an amendment to the article
numbered "First" of the Company's Restated Certificate of Incorporation to
change the name of the Company from IBS Interactive, Inc. to Digital Fusion,
Inc.
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Under the proposed amendment, the article numbered "First" would be
amended and restated as follows:
"FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is Digital Fusion, Inc.
Since the acquisition of digital fusion, inc., the Company has
concentrated its focus on Information Technology (IT) consulting services. In
order to reflect the strategic focus of the Company, the Board of Directors
believes it is in the best interest of the Company and its stockholders to
change the name of the Company to Digital Fusion, Inc.
This change will enable the Company to capitalize on the proven and
measurable name and brand identity of Digital Fusion. Additionally, the Company
will be able to utilize the strength of the Digital Fusion name across all
levels and types of communication including advertising, marketing, and
corporate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO AMEND
THE RESTATED CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY TO
DIGITAL FUSION, INC.
INDEPENDENT ACCOUNTANTS
The consolidated financial statements of the Company for the year ended
December 31, 2000 have been audited by BDO Seidman, LLP, independent auditors
("BDO"). As of the date of this Proxy Statement, the Board has not selected the
Company's independent accountants for the year 2001. Due to the Company
relocating its corporate headquarters, including its accounting department, and
changing its Chief Financial Officer during 2001, the Company has not completed
its selection of its independent accountants. As such, no representatives from
our current independent audit firm are expected to be at the annual meeting;
however if they are they will have an opportunity to make a statement if they
desire to do so.
AUDIT FEES
The aggregate fees billed for professional services rendered by our
principal accountant for the audit of the Company's annual financial statements
and the quarterly reviews for the year ended December 31, 2000 was $140,865.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed by BDO for professional services rendered for
information technology services relating to financial information systems design
and implementation for the fiscal year ended December 30, 2000.
ALL OTHER FEES
The aggregate fees billed for services rendered by BDO other than
services covered above for the fiscal year ended 2000 was approximately
$380,000. These fees related to professional services provided in conjunction
with a potential merger with Infonautics and First Avenue Ventures which was not
completed, tax return filings, audits of subsidiaries prior to being acquired
and other items.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any matters other than those described above to be presented at the
meeting. If any other matters do come before the meeting, the persons named in
the proxy will exercise their discretion in voting thereon.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
executive officers, directors and persons owning more than 10% of our common
stock to file reports of ownership and reports of changes of ownership with the
Securities and Exchange Commission. These reporting persons are required to
furnish us with copies of all Section 16(a) forms that they file. Based solely
upon a review of copies of these filings received, we believe that all filing
requirements were complied with during the fiscal year ended December 31, 2000.
STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING
Any proposal of a stockholder intended to be presented at our 2002
Annual Meeting of Stockholders, and to be included in our proxy statement
relating to the 2002 Annual Meeting, must be received at our principal executive
offices by May 29, 2002. In accordance with the advance notice provisions
contained in our By-laws, our Secretary must receive notice of a stockholder's
intent to propose any business at the 2002 Annual Meeting by May 29, 2002.
EXPENSES
We will bear all expenses in connection with the solicitation of
proxies. Our officers and regular employees may, without compensation other than
their regular compensation, solicit proxies by personal interview, telephone or
facsimile. Brokerage houses, banks and other custodians, nominees and
fiduciaries will be reimbursed for their reasonable out-of-pocket expenses
incurred in forwarding proxies and proxy statements to the beneficial owners of
our common stock.
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ANNUAL REPORT
A COPY OF OUR ANNUAL REPORT TO STOCKHOLDERS (WHICH INCLUDES OUR ANNUAL
REPORT ON FORM 10-KSB) IS BEING MAILED WITH THIS PROXY STATEMENT TO EACH
STOCKHOLDER ENTITLED TO VOTE AT THE ANNUAL MEETING. STOCKHOLDERS NOT RECEIVING A
COPY OF THE ANNUAL REPORT MAY OBTAIN ONE, WITHOUT CHARGE, BY WRITING, CALLING OR
E-MAILING KAREN L. SURPLUS, CHIEF FINANCIAL OFFICER, IBS INTERACTIVE, INC., 400
NORTH ASHLEY DRIVE, SUITE 2600, TAMPA, FLORIDA 33602, TELEPHONE (813) 221-0024,
E-MAIL ADDRESS KSURPLUS@DIGITALFUSION.COM.
By Order of the Board of Directors,
Elena I. Crosby
Secretary
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APPENDIX A
IBS INTERACTIVE, INC.
AUDIT COMMITTEE CHARTER
This charter (this "Charter") of the audit committee (the "Audit
Committee") of the Board of Directors (the "Board") of IBS Interactive, Inc.
(the "Corporation") sets forth the rules of governance of the Audit Committee
and has been duly adopted by the Board in compliance with Nasdaq's Marketplace
Rules.
I. AUDIT COMMITTEE PURPOSE
The Audit Committee is appointed by the Board to assist the Board in
fulfilling its oversight responsibilities. To this end, the Audit Committee's
primary duties and responsibilities are to:
1. Support the independence of the independent auditors and their
objective review and audit of the Corporation's annual financial
statements.
2. Support the independence and funding of the internal auditors to help
to assure that they have sufficient independence and resources to
conduct internal audits as appropriate or necessary, free of
interference or pressure.
3. Perform other functions, within the scope of the foregoing, which the
Audit Committee deems necessary or appropriate to undertake from time
to time.
The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to the
independent auditors as well as anyone in the organization. The Audit Committee
has the ability to retain, at the Corporation's expense, special legal,
accounting or other consultants or experts it deems necessary in the performance
of its duties.
In addition, the Audit Committee and the Board have the ultimate
authority and responsibility to select, evaluate, and where appropriate, replace
the independent auditors. The independent auditors are ultimately accountable to
the Audit Committee and the entire Board for such auditors' review of the
financial statements and controls of the Corporation.
II. AUDIT COMMITTEE COMPOSITION AND MEETINGS
1. Audit Committee members shall meet the applicable requirements of the
National Association of Securities Dealers, Inc. The Audit Committee
shall be comprised of three or more directors as determined by the
Board, the majority of whom shall be independent, non-employee
directors, free from any relationship that would interfere with the
exercise of his or her independent judgment. All members of the Audit
Committee shall have a basic understanding of finance and accounting
and be able to read and understand fundamental financial statements,
and at least one member of the Audit Committee shall have past
employment experience in the finance or accounting field.
2. Audit Committee members shall be appointed by the Board on
recommendation of the Board's nominating committee or, if no such
committee exists, then the Audit Committee Members shall be appointed
by the Board. If an Audit Committee Chair is not designated or present,
the members of the Audit Committee may designate a Chair by majority
vote of the Audit Committee membership.
3. The Audit Committee shall meet at least four times annually, or more
frequently as circumstances dictate. The Audit Committee Chair shall
prepare and/or approve an agenda in advance of each meeting. The Audit
Committee should meet privately in executive session at least annually
with the Corporation's management, the director of the internal
auditing department, the independent auditors, and as an Audit
Committee to discuss any matters that the Audit Committee or each of
these groups believe should be discussed. In addition, the Audit
Committee, or at least its Chair, should communicate with management
and the independent auditors quarterly to review the Corporation's
financial statements and significant findings based upon the auditors'
limited review procedures.
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III. AUDIT COMMITTEE RESPONSIBILITIES AND DUTIES
The Audit Committee shall have the responsibility to perform the
following:
1. On an annual basis (or more frequently as necessary or appropriate),
review and reassess the adequacy of the Charter. Submit the Charter to
the Board for approval and have the document published at least every
three years in accordance with the regulations of the Securities and
Exchange Commission (the "SEC").
2. On a periodic basis, review the Corporation's principal policies for
accounting, internal control and financial reporting and, as
applicable, review with management and the independent auditors any
significant changes in the Corporation's accounting policies and review
the effect on the Corporation's accounting policies of important
pronouncements of the accounting profession and other regulatory
bodies.
3. Oversee independence of the independent auditors by:
(a) receiving from the independent auditors, on a periodic basis,
a formal written statement delineating all relationships
between the independent auditors and the Corporation
consistent with Independence Standards Board Standard No. 1;
(b) reviewing, and actively discussing with the Board, if
necessary, and the independent auditors, on a periodic basis,
any disclosed relationships or services between the
independent auditors and the or any other disclosed
relationships or services that may impact the objectivity and
independence of the auditors; and
(c) recommending, if necessary, that the Board take certain action
to satisfy itself of the auditor's independence.
4. On an annual basis, review management's recommendation for, and
evaluation of the independence of, the Corporation's independent
auditors and, based upon such review, recommend the appointment or
discharge of such auditors.
5. On an annual basis, review with the independent auditors their plan,
scope and timing of their audit and their audit fees and approve all
such fees and other significant compensation to be paid to the
independent auditors.
6. After completion of the audit by the independent auditors of the
Corporation's annual financial statements, review with management and
the independent auditors the audit report, the management letter
relating to the audit report, any significant questions (resolved or
unresolved) between management and the independent auditors that arose
during the audit or in connection with the preparation of the
Corporation's annual financial statements, and the cooperation afforded
or limitations, if any, imposed by management on the conduct of the
audit.
7. Review with management and the independent auditors, before
publication, the Corporation's annual financial statements (including
footnotes and any special disclosure questions) to be included in the
annual report to stockholders and the annual report on Form 10-K or
10-KSB to be filed with the SEC. Discuss any significant changes to the
Corporation's accounting principles and any items required to be
communicated to the independent auditors in accordance with SAS 61.
8. Review with management and the independent auditors the company's
quarterly financial statements prior to filing or distribution. Discuss
any significant changes to the Corporation's accounting principles and
any items required to be communicated to the independent auditors in
accordance with SAS 61. The Chair may represent the entire Audit
Committee for purposes of this review.
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9. Consider the independent auditors' judgment with respect to the quality
and propriety of the Corporation's accounting principles as applied in
its financial reporting.
10. On an annual basis (or more frequently as necessary or appropriate),
review management's plans to engage the independent auditors to perform
management advisory services.
11. On a periodic basis, review with management and the internal auditors
the adequacy of the Corporation's internal accounting control system,
the scope and results of the internal audit program, and the
cooperation afforded or limitations, if any, imposed by management on
the conduct of the internal audit program.
12. Review the budget, plan, changes in plan, activities and organizational
structure of the internal audit department, as needed.
13. Review the appointment, performance and replacement of the senior
internal audit executive.
14. Review significant reports prepared by the internal audit department
together with management's response and follow-up to these reports.
15. On an annual basis, review with management, the Corporation's counsel
and internal auditors, the procedures for monitoring compliance with
the Corporation's policies on business integrity, ethics and conflicts
of interest.
16. Review with management and the independent auditors the extent to which
significant changes or improvements in important accounting and
financial control practices, recommended by management or the
independent auditors, have been implemented.
17. On a period basis, review the adequacy of the Corporation's accounting
and financial control resources.
18. Review reports on officers' and directors' expenses.
19. On an annual basis (or more frequently as necessary or appropriate),
review with the Corporation's counsel any legal matters which may have
a significant impact on the Corporation's financial statements, the
Corporation's compliance with applicable laws and regulations, and
inquiries received.
20. On a periodic basis, review the Corporation's financial planning
policies and practices and financial objectives. Monitor the
Corporation's financial condition and requirements for funds. Review
periodically the Corporation's short-term and long-term capital
expenditure plans and working capital position.
21. Review management recommendations with respect to the amount, timing,
type and terms of public and private stock and debt issues and credit
facilities.
22. On an annual basis, prepare a report to stockholders as required by the
SEC. The report should be included in the Corporation's annual proxy
statement.
* * * * *
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IBS INTERACTIVE, INC.
400 NORTH ASHLEY DRIVE, SUITE 2700
TAMPA, FLORIDA 33602
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON OCTOBER 30, 2001
The undersigned hereby appoints Roy E. Crippen, III and Karen L.
Surplus, or either of them, as Proxies, each with the power to appoint his
substitute, and hereby authorizes them or their substitutes to represent and to
vote, as designated below, all the shares of stock of IBS Interactive, Inc. held
of record by the undersigned on September 21, 2001, at the annual meeting of
shareholders to be held on October 30, 2001 or any adjournment thereof.
1. ELECTION OF DIRECTORS [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below). to vote for all nominees listed below .
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
Nicholas R. Loglisci, Jr., Roy E. Crippen, III, O.G. Greene, Bruce E. Fike, Ahmad Al-Khaled
2. PROPOSAL TO APPROVE AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. PROPOSAL TO APPROVE AN AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO CHANGE THE NAME OF THE COMPANY TO DIGITAL
FUSION, INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion the Proxies are authorized to vote upon such other business as may properly come before the meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The shares represented by this proxy will be voted as directed. If no direction is given, they will be voted for the
election of directors and for proposals in items 2, 3 and 4.
Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATED: __________________________________, 2001
PLEASE MARK, SIGN, DATE AND RETURN Signature
THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE
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Signature if held jointly