<PAGE>
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]
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
LIGHTBRIDGE, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NOT APPLICABLE
- --------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] 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:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
LIGHTBRIDGE, INC.
NOTICE OF SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS
MAY 28, 1998
Notice is hereby given that the Special Meeting in lieu of Annual Meeting of
Stockholders of Lightbridge, Inc., a Delaware corporation (the "Company"),
will be held on Thursday, May 28, 1998 at 10 A.M., Eastern daylight savings
time, at the offices of Foley, Hoag & Eliot LLP, One Post Office Square,
Boston, Massachusetts (the "Meeting"), for the purpose of considering and
voting upon the following matters:
1. to elect two persons to the Board of Directors, each to serve as a
Class II director for a three-year term; and
2. to transact such further business as may properly come before the
Meeting or any adjournment thereof.
As of the date of this Notice, the Board of Directors has no knowledge of
any other business to be transacted at the Meeting.
The Board of Directors has fixed the close of business on Wednesday, April
22, 1998 as the record date for the Meeting for the determination of
stockholders entitled to notice of and to vote at the Meeting and at any
adjournments thereof.
By order of the Board of Directors,
/s/ John D. Patterson, Jr.
John D. Patterson, Jr.
Secretary
April 27, 1998
Burlington, Massachusetts
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE PROMPTLY COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE.
IF MORE THAN ONE PROXY IS ENCLOSED, PLEASE COMPLETE AND RETURN ALL OF THEM.
<PAGE>
LIGHTBRIDGE, INC.
67 SOUTH BEDFORD STREET
BURLINGTON, MASSACHUSETTS 01803
PROXY STATEMENT FOR SPECIAL MEETING IN LIEU OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 28, 1998
This Proxy Statement and the enclosed Notice of Meeting and form of proxy
are being mailed to stockholders on or about April 27, 1998 in connection with
the solicitation of proxies by the Board of Directors of Lightbridge, Inc.
(the "Company") for use at the Special Meeting in lieu of Annual Meeting of
Stockholders of the Company, to be held at the offices of Foley, Hoag & Eliot
LLP, One Post Office Square, Boston, Massachusetts, at 10 A.M., Eastern
daylight savings time, on Thursday, May 28, 1998, and at any and all
adjournments thereof (the "Meeting"). Proxies that have been properly executed
and returned by a stockholder will be voted in accordance with the
stockholder's directions. If no choice is specified by the stockholder, then
the shares covered by the proxy will be voted as recommended by management.
Stockholders are encouraged to vote on the matter to be considered. Any
stockholder may revoke the proxy at any time before it has been exercised.
On April 22, 1998, the record date for the determination of stockholders
entitled to notice of and to vote at the Meeting, there were outstanding and
entitled to vote 15,754,782 shares of the Company's common stock, $.01 par
value ("Common Stock"). Each share of Common Stock entitles its record holder
to one vote on each matter considered at the Meeting.
QUORUM AND TABULATION OF VOTES
Under the Company's By-Laws, the holders of a majority of the shares of
Common Stock issued, outstanding and entitled to vote at the Meeting will
constitute a quorum for the transaction of business at the Meeting. Shares of
Common Stock present in person or represented by proxy (including shares that
abstain or do not vote with respect to the matter presented for stockholder
approval) will be counted for the purpose of determining whether a quorum
exists at the Meeting.
The election of directors of the Company (Proposal One) requires the
affirmative vote of the holders of a plurality of the shares of Common Stock
properly cast at the Meeting in favor of the nominees.
The following shares will not be counted as votes cast or votes made in
favor of a given matter: (i) shares that abstain from voting as to such
matter; and (ii) shares held in "street name" by brokers or nominees who
indicate on their proxies that they do not have discretionary authority to
vote such shares as to such matter. Each matter will be tabulated separately.
Votes will be tabulated by the Company's transfer agent and registrar,
American Stock Transfer & Trust Company.
<PAGE>
PROPOSAL ONE: ELECTION OF DIRECTORS
The Company has a classified Board of Directors consisting of Class I, Class
II and Class III directors who serve until the annual meetings of stockholders
in the years 2000, 1998 and 1999, respectively, and until their respective
successors are elected and qualified. Each director elected at an annual
meeting of stockholders serves a term of three years. Each Class II director
elected at the Meeting will hold office until the date of the Company's annual
meeting in the year 2001 and thereafter until a successor is elected and
qualified or until such director sooner dies, resigns or is removed from the
Board of Directors.
Douglas A. Kingsley, who had served as a director of the Company since April
1996, resigned from the Company's Board of Directors effective as of March 17,
1998. Mr. Kingsley was the sole Class I director, and as of the date of Mr.
Kingsley's resignation, no person serves as the Class I director. The Board
anticipates that it will identify a new Class I director to fill the vacancy
before the end of the current fiscal year.
For election at the Meeting of the two Class II Directors, the Board of
Directors has nominated Andrew I. Fillat and D. Quinn Mills, the current Class
II directors of the Company. Unless marked otherwise, returned proxies will be
voted to re-elect each of Messrs. Fillat and Mills as the Class II directors.
Messrs. Fillat and Mills both have agreed to serve if elected, and the Company
has no reason to believe that either of them will be unable to serve. If
either Mr. Fillat or Mr. Mills is unable or declines to serve as a director at
the time of the Meeting, then the Board will designate another nominee and
proxies will be voted in favor of such nominee.
The following tables set forth certain information as of April 27, 1998,
with respect to each of the members of the Board of Directors of the Company,
including the nominees for election as the Class II directors.
NOMINEES FOR DIRECTORS WITH TERMS EXPIRING IN 2001 (CLASS II DIRECTORS)
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND OTHER BUSINESS EXPERIENCE AND
NAME AGE DIRECTORSHIPS DURING PAST FIVE YEARS
- ---- --- ------------------------------------------------------
<S> <C> <C>
Andrew I. Fillat(1).......... 50 Director of the Company since April 1996;
Senior Vice President of Advent International
Corporation, a venture capital firm, since
July 1995; Vice President of Advent
International Corporation, a venture capital
firm, from September 1990 to December 1995;
director of Advanced Radio Telecom Corp., a
provider of point-to-point wireless broadband
digital telecommunications services; director
of Interlink Computer Sciences, Inc., a
supplier of high-performance solutions for
enterprise networked systems management;
director of Safety 1st, Inc., a developer,
marketer and distributor of child products;
director of Voxware, Inc., a developer of
digital speech and audio technologies,
solutions and applications.
D. Quinn Mills(2)............ 56 Director of the Company since June 1990;
Albert J. Weatherhead, Jr. Professor of
Business Administration at the Harvard
Business School since 1976.
</TABLE>
- --------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
2
<PAGE>
DIRECTORS WITH TERMS EXPIRING IN 1999 (CLASS III DIRECTORS)
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION AND OTHER BUSINESS EXPERIENCE AND
NAME AGE DIRECTORSHIPS DURING PAST FIVE YEARS
- ---- --- ------------------------------------------------------
<S> <C> <C>
Pamela D.A. Reeve....... 48 President and director of the Company since
November 1989; Chief Executive Officer of the
Company since September 1993; Chief Operating
Officer of the Company from November 1989 to
September 1993; director of PageMart
Wireless, Inc., a provider of wireless
messaging services; director of Natural
MicroSystems Corporation, a provider of
hardware and software technology for
developers of high-value telecommunications
solutions.
Torrence C. Harder(1)... 54 Director of the Company since June 1989;
President and director of Harder Management
Company, a registered investment advisory
firm, since 1971; President and director of
Entrepreneurial Ventures, Inc. and
Entrepreneurial, Inc., venture capital firms,
since 1987 and 1990, respectively; co-founder
of the Company.
</TABLE>
- --------
(1) Member of the Compensation Committee.
BOARD AND COMMITTEE MEETINGS
During the fiscal year ended December 31, 1997 ("fiscal 1997"), the Board of
Directors of the Company met nine times and acted by unanimous written consent
twice. Each director attended at least 75% of the meetings of the Board of
Directors.
The Board of Directors has an Audit Committee, which reviews the results and
scope of the annual audit of the Company's financial statements conducted by
the Company's independent accountants, the scope of other services provided by
the Company's independent accountants, proposed changes in the Company's
financial and accounting standards and principles, and the Company's policies
and procedures with respect to its internal accounting, auditing and financial
controls. The Audit Committee also makes recommendations to the Board of
Directors on the engagement of independent accountants, as well as other
matters that may come before the Committee at the direction of the Board of
Directors. The Audit Committee met twice in fiscal 1997 and did not take any
action by written consent. The only current Audit Committee member is Mr.
Mills, who attended at least 75% of the total number of meetings of the Board
of Directors and Audit Committee held in fiscal 1997.
The Board of Directors has a Compensation Committee, which provides
recommendations concerning salaries and incentive compensation for employees
of and consultants to the Company. The Compensation Committee also administers
the Company's 1990 Incentive and Nonqualified Stock Option Plan, 1996
Incentive and Non-Qualified Stock Option Plan (the "1996 Option Plan") and
1996 Employee Stock Purchase Plan. In fiscal 1997, the Compensation Committee
met twice and did not act by unanimous written consent. The current
Compensation Committee members are Mr. Fillat and Mr. Harder, each of whom who
attended at least 75% of the total number of meetings of the Board of
Directors and Compensation Committee held in fiscal 1997.
The Board of Directors has a Nominating Committee, which nominates
candidates for election as directors at the annual meeting of stockholders or
special meeting in lieu thereof. Any stockholder who wishes to recommend an
individual for consideration by the Nominating Committee should deliver
written notice to the Secretary of the Company. A stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Company not less than sixty days prior to the date of the scheduled annual
meeting or special meeting in lieu thereof. Such stockholder's notice must set
forth (a) the name of the person whom the
3
<PAGE>
stockholder proposes to nominate for election or re-election as a director,
(b) the name, age, business address and residential address of the proposing
stockholder or of the beneficial owner on whose behalf such proposal is being
made, and the name and address of any other stockholder or beneficial owner
known to the proposing stockholder as supporting the nomination, (c) as of the
date of the notice, the class and number of shares of Common Stock that are
owned beneficially and of record by the proposing stockholder or the
beneficial owner on whose behalf the proposal is made, and by any other
stockholder known to the proposing stockholder as supporting the nomination,
(d) any material interest of the proposing stockholder of record or of the
beneficial owner on whose behalf such proposal is made in such nomination, and
any material interest of any other stockholder or beneficial owner known to
such proposing stockholder as supporting the nomination and (e) any other
information that is required to be disclosed in solicitations of proxies with
respect to nominees for election as directors, pursuant to the rules of the
Securities and Exchange Commission promulgated under Section 14(a) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"). The
Nominating Committee may reject any nomination by a stockholder that is not
timely made in accordance with these procedures or does not satisfy these
requirements in any material respect. The Nominating Committee was created in
December 1997 and did not meet nor take any action by written consent in
fiscal 1997. The current Nominating Committee members are Mr. Fillat and Mr.
Mills.
DIRECTORS' COMPENSATION
Upon election to the Board of Directors, each non-employee director of the
Company automatically receives a grant of a non-qualified option under the
1996 Option Plan to purchase 20,000 shares of Common Stock, which option vests
in 3 equal annual installments. In addition, immediately following each annual
meeting of stockholders (or special meeting in lieu thereof), each non-
employee director re-elected to or remaining on the Board is automatically
granted a fully vested non-qualified option to purchase 4,000 shares of Common
Stock, provided that (i) any prior automatic grants held by the director have
fully vested or (ii) at least two annual meetings of stockholders of the
Company (or special meetings in lieu thereof) have elapsed between any prior
automatic grant made to the director and the meeting upon which the subsequent
automatic grant would occur. The exercise price per share of each automatic
option grant is equal to the closing price of the Common Stock on the date of
such grant, as reported by the Nasdaq National Market.
Directors who are employees of the Company are not paid any separate fees
for serving as directors.
4
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table provides certain summary
information concerning compensation paid to the Company's President and Chief
Executive Officer and its four other most highly compensated executive
officers (collectively, the "Named Executive Officers") for the fiscal years
ended December 31, 1996 and 1997 and September 30, 1995.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
-------------------------- ------------
SECURITIES ALL OTHER
UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION(S) YEAR SALARY($) BONUS($)(1) OPTIONS(#) ($)(2)
- ------------------------------ ---- --------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Pamela D.A. Reeve 1997 $200,000 $91,700 -- $4,377(3)
President and Chief 1996 165,000 60,000 -- --
Executive Officer 1995 165,000 55,700 -- 1,696
Richard H. Antell 1997 130,000 50,400 -- 1,163
Vice President of 1996 105,000 40,000 90,000 --
Software Development 1995 99,000 37,000 -- --
William G. Brown 1997 130,000 50,000 -- 1,621
Chief Financial Officer, Vice 1996 108,462 65,000 70,000 --
President of Finance and 1995 90,000 36,400 -- 891
Administration and Treasurer
Douglas E. Blackwell 1997 130,000 37,100 25,000 970
Vice President of 1996 105,000 40,000 90,000 --
Service Delivery 1995 102,000 15,000 40,000 --
Michael A. Perfit 1997 109,900 29,600 -- 1,202
Senior Vice President 1996 92,700 20,000 -- --
of Technology 1995 92,700 18,300 -- 695
</TABLE>
- --------
(1) Represents the aggregate amount of bonus installments paid in the
applicable year with respect to bonuses earned in prior years. See
"Compensation Committee Report on Executive Compensation."
(2) Unless otherwise indicated, represents a matching contribution made by the
Company pursuant to the Lightbridge, Inc. 401(k) Plan.
(3) Represents a $2,337 matching contribution made by the Company pursuant to
the Lightbridge, Inc. 401(k) Plan and an aggregate of $2,040 paid in
premiums with respect to a term life insurance policy for the benefit of
Ms. Reeve's spouse.
5
<PAGE>
Option Grants in Last Fiscal Year. The following table sets forth certain
information with respect to grants of stock options to the only Named
Executive Officer to whom a stock option was granted during fiscal 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATE OF STOCK
SECURITIES PERCENT OF TOTAL PRICE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED(#) FISCAL YEAR ($/SH)(1) DATE 5%($) 10%($)
---- ---------- ------------------ --------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Douglas E. Blackwell.... 25,000(3) 5.6%(4) $10.25 1-31-07 161,154 408,397
</TABLE>
- --------
(1) All options were granted at fair market value, which was determined by the
Compensation Committee to be the closing price of the Common Stock on the
date of grant, as reported by the Nasdaq National Market.
(2) Amounts reported in this column represent hypothetical values that may be
realized upon exercise of the options immediately prior to the expiration
of their term, assuming the specified compounded rates of appreciation of
the price of the Common Stock over the term of the options. These numbers
are calculated based on rules promulgated by the Securities and Exchange
Commission and do not represent the Company's estimate of future stock
price growth. Any actual gains on stock option exercises and Common Stock
holdings depend on the timing of such exercise and the future performance
of the Common Stock. There can be no assurance that the rates of
appreciation assumed in this table will be achieved or that the amounts
reflected will be received by the Named Executive Officer. This table does
not take into account any appreciation in the price of the Common Stock
from the date of grant to the current date. The values shown are net of
the option exercise price but do not include deductions for taxes or other
expenses associated with the exercise.
(3) The option was granted as an incentive stock option and is exercisable as
to 20% of the shares subject thereto upon the date of grant, with an
additional 5% of the shares vesting at the end of each three-month period
thereafter.
(4) In fiscal 1997 the Company granted to employees options to purchase an
aggregate of 447,000 shares of Common Stock pursuant to the 1996 Option
Plan. In addition, the Company assumed options to purchase an aggregate of
58,576 shares of Common Stock in connection with its acquisition of Coral
Systems, Inc. in November 1997. If these assumed options are deemed to
have been granted in fiscal 1997, then the Percent of Total Options
granted to Mr. Blackwell in fiscal 1997 is 4.9%.
Option Exercises and Fiscal Year-End Values. The following table sets forth
certain information concerning stock options exercised during fiscal 1997 and
stock options held as of April 15, 1998 by each of the Named Executive
Officers.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END($)(1)
ON REALIZED ------------------------------- -------------------------------
NAME EXERCISE(#) ($)(1) EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE($) UNEXERCISABLE($)
---- ----------- -------- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Pamela D.A. Reeve....... 15,000 213,150 405,000 50,000 $5,698,050 $ 693,500
Richard H. Antell....... 19,800 267,126 95,400 119,000 1,142,438 1,214,250
William G. Brown........ 30,000 424,800 61,000 109,000 660,750 1,091,750
Douglas E. Blackwell.... -- -- 63,750 99,250 697,250 1,037,250
Michael A. Perfit....... -- -- -- -- -- --
</TABLE>
- --------
(1) Value is based on the last sale price of the Common Stock ($14.25 per
share) on April 15, 1998, as reported by the Nasdaq National Market, less
the applicable option exercise price. These values have not been and may
never be realized. Actual gains upon exercise, if any, will depend on the
value of the Common Stock on the date of the sale of the shares.
6
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors is
responsible for establishing the Company's executive compensation policies and
practices, which includes making specific recommendations to the Board of
Directors concerning compensation for the executive officers.
The Compensation Committee seeks to achieve three broad goals in connection
with the Company's executive compensation programs and decisions regarding
individual compensation. First, the Compensation Committee structures
executive compensation programs in a manner that the Committee believes will
enable the Company to attract and retain key executives. Second, the
Compensation Committee establishes compensation programs that are designed to
reward executives for the achievement by the Company of net income goals. By
tying compensation in part to net revenues, the Compensation Committee
believes that a performance-oriented environment is created for the Company's
executives. Finally, the Company's executive compensation programs are
intended to provide executives with an equity interest in the Company so as to
link a portion of the compensation of the Company's executives with the
performance of the Company's Common Stock.
The Company's executive compensation program generally consists of three
elements: (1) base salary; (2) annual cash bonus; and (3) a stock-based equity
incentive in the form of participation in the Company's stock option plans.
The Company's executive officers are also eligible to participate in other
employee benefit plans, including health and life insurance plans, a 401(k)
retirement plan and a stock purchase plan, on substantially the same terms as
other employees who meet applicable eligibility criteria, subject to any legal
limitations on the amounts that may be contributed or on the benefits that may
be payable under these plans. In establishing base salaries for executives,
the Compensation Committee monitors salaries at other companies, particularly
those companies in the same industry and companies located in the same
geographic area as the Company. In addition, for each executive the
Compensation Committee considers historic salary levels, work responsibilities
and base salary relative to other executives at the Company. To the extent
determined to be appropriate, the Compensation Committee also considers
general economic conditions, the Company's financial performance and each
individual's performance.
The Company's approach to the Chief Executive Officer's compensation package
in fiscal 1997 was to be competitive with other high growth companies in the
software industry and to tie a large percentage of the Chief Executive
Officer's total compensation package to Company performance. Ms. Reeve is a
party to a multi-year employment agreement with the Company that establishes
her annual base salary during the term of the agreement, subject to increase
(but not decrease) at the discretion of the Board of Directors. Ms. Reeve's
base salary was designed to give her assurance of a base level of
compensation, commensurate with her position and duration of employment with
the Company. Ms. Reeve received a base salary of $200,000 in fiscal 1997 and
$165,000 in both fiscal 1996 and fiscal 1995. See "Certain Transactions--
Employment Agreement."
Bonuses generally are considered and granted on an annual basis, with each
bonus being paid in three equal annual installments. Payment of each bonus
installment is subject to the continued employment of the bonus recipient. The
Company typically adopts a target bonus plan for officers and other key
employees in the year immediately preceding the year for which bonuses are to
be granted. In the year immediately following the year for which bonuses are
to be granted, the Compensation Committee evaluates the performances of the
officers and other key employees and determines the extent to which bonuses
are to be paid from the target bonus plan. In accordance with these
procedures, in late 1996 the Company adopted its 1997 target bonus plan and in
early 1998 the Compensation Committee will consider the extent to which
bonuses, if any, will be paid out of the 1997 target bonus plan, as
compensation for the performance of the officers and other key employees.
Generally, the Company's policy with respect to option grants to executive
officers is to create a performance incentive for such officers by enabling
them the ability to acquire or increase a proprietary interest in the Company
and its success. In determining the size of each stock option grant, the
Compensation Committee emphasized the seniority, responsibilities and
performance of the executive. In fiscal 1997, a stock option was granted to
Douglas E. Blackwell, in order to provide a long-term incentive to act on
behalf of the Company. During fiscal 1998, the Compensation Committee intends
to evaluate the merits of option awards and will consider increasing the
proportion of overall compensation of certain executive officers consisting of
stock options and other equity-based incentives.
7
<PAGE>
Section 162(m) of the Internal Revenue Code of 1936, as amended, generally
disallows a tax deduction to public companies for compensation over $1,000,000
paid to its chief executive officer and its four other most highly compensated
executive officers. Qualifying performance-based compensation will not be
subject to the deduction limit if certain requirements are met. In this
regard, the Company has limited the number of shares subject to stock options
that may be granted to the Company employees in a manner that complies with
the performance-based requirements of Section 162(m). Based on the
compensation awarded to the Company's executive officers, it does not appear
that the Section 162(m) limitation will have a significant impact on the
Company in the near term. While the Committee does not currently intend to
qualify its incentive awards as a performance-based plan, it will continue to
monitor the impact of Section 162(m) on the Company.
Andrew I. Fillat
Torrence C. Harder
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Board of Directors has established a Compensation Committee,
which currently consists of Messrs. Fillat and Harder. Decisions as to
executive compensation are made by the Board of Directors, primarily upon the
recommendation of the Compensation Committee. During fiscal 1997, a company
affiliated with Mr. Harder was party to a transaction with the Company. See
"Certain Transactions--Others." There are no family relationships among the
executive officers or directors of the Company.
PERFORMANCE GRAPH
The following Performance Graph compares the performance of the Company's
cumulative stockholder return with that of a broad market index, the Nasdaq
Stock Market Index for U.S. Companies, and an industry index, the Nasdaq
Computer & Data Processing Services Stock Index. The cumulative stockholder
returns for shares of the Company's Common Stock and for the market and
industry indices are calculated assuming $100 was invested on September 27,
1996, the date on which the Company's Common Stock commenced trading on the
Nasdaq National Market. The Company paid no cash dividends during the periods
shown. The performance of the market and industry indices is shown on a total
return (dividends-reinvested) basis.
[GRAPH APPEARS HERE]
COMPARISON OF FIFTEEN MONTH CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
Nasdaq Nasdaq Computer
Stock & Data Processing
Market Services Stocks Lightbridge, Inc.
-------- ----------------- ------------------
<S> <C> <C> <C>
Sep-96 100.00 100.00 100.00
Oct-96 98.61 98.25 102.84
Nov-96 104.72 105.35 95.38
Dec-96 104.60 104.05 85.36
Jan-97 112.08 113.44 91.02
Feb-97 105.88 104.24 100.92
Mar-97 98.97 96.54 74.63
Apr-97 102.07 109.13 69.01
May-97 113.64 121.14 82.47
Jun-97 117.11 123.80 78.78
Jul-97 129.48 136.65 113.13
Aug-97 129.28 133.01 125.95
Sep-97 136.92 135.37 153.81
Oct-97 129.81 132.57 165.73
Nov-97 130.45 135.93 144.77
Dec-97 128.41 127.76 156.65
</TABLE>
8
<PAGE>
CERTAIN TRANSACTIONS
LOAN TO EXECUTIVE OFFICER
In April 1997 the Company made a loan to Douglas Blackwell, an executive
officer of the Company, in the form of a promissory note in the principal
amount of $75,000. The promissory note currently bears interest at an annual
rate of 7.0% and will accrue interest at such rate until the Company demands
payment or until Mr. Blackwell's employment with the Company terminates for
any reason. At such time, the promissory note will bear interest at an annual
rate of the prime rate plus one percent. As of March 31, 1998, the remaining
balance under the promissory note was $40,000.
EMPLOYMENT AGREEMENT
In August 1996 the Company executed an employment agreement with Pamela D.A.
Reeve. The Company agreed to employ Ms. Reeve as President and Chief Executive
Officer of the Company at an initial base salary of $165,000 per year. The
employment agreement is terminable at will by either party, but if Ms. Reeve's
employment is terminated by the Company for any reason, other than death or
disability, within one year after a change of control of the Company or if the
Company terminates Ms. Reeve's employment at any time without cause, the
Company is required to continue to pay Ms. Reeve's salary for a period of
twelve months after such termination, offset by any amounts received by Ms.
Reeve from subsequent employment during such period.
OTHER
On February 23, 1993, the Company entered into license and maintenance
agreements with RentGrow, Inc. ("RentGrow") pursuant to which the Company
granted to RentGrow a license to use and develop the Company's Credit Decision
System software in the real estate rental, real estate broker and real estate
mortgage brokers markets in exchange for certain payments by RentGrow. The
license was exclusive for the first four years and seven months of the
agreement and nonexclusive thereafter. Mr. Harder is a director of RentGrow
and beneficially owns, as of April 15, 1998, approximately 52% (on a fully
diluted basis) of the outstanding capital stock of RentGrow. Under the terms
of the license, the Company was to receive $250,000, comprised of five
installments in varying amounts through August 1996. The final payment was not
made in August 1996. The Company received from RentGrow a 3-year 11.25%
promissory note dated January 1, 1997 in the principal amount of $75,584,
representing the final payment and other amounts owed to the Company at
December 31, 1996.
9
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of April 15, 1998 by (i)
each person or group known to the Company to be the beneficial owner of more
than five percent of the outstanding Common Stock; (ii) each of the Company's
directors and director nominees; (iii) each of the Named Executive Officers
and (iv) all directors, director nominees and executive officers of the
Company as a group. The information as to each person has been furnished by
such person.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED(2)
-------------------------------
NAMES AND ADDRESSES OF BENEFICIAL HOLDERS(1) NUMBER PERCENT
- -------------------------------------------- ---------------- --------------
<S> <C> <C>
Advent International Investors II Limited
Partnership
Advent Partners Limited Partnership
Global Private Equity II Limited
Partnership(3)................................. 2,000,000 12.7%
101 Federal Street
Boston, Massachusetts 02110
Torrence C. Harder(4)........................... 1,473,383 9.3
Massachusetts Capital Resource Company(5)....... 1,309,958 8.1
420 Boylston Street
Boston, Massachusetts 02116
Pamela D.A. Reeve(6)............................ 787,214 4.9
D. Quinn Mills(7)............................... 388,117 2.5
Michael A. Perfit(8)............................ 299,194 1.9
Richard H. Antell(9)............................ 114,400 *
William G. Brown(10)............................ 112,700 *
Douglas E. Blackwell(11)........................ 90,250 *
Andrew I. Fillat(12)............................ 12,166 *
All directors, director nominees and executive
officers as a group (9 persons)(13)............ 3,277,424 19.4
</TABLE>
- --------
* Less than one percent.
(1) The address of all persons who are executive officers or directors of the
Company is in care of the Company, 67 South Bedford Street, Burlington,
Massachusetts 01803.
(2) Unless otherwise noted, each person or group identified possesses sole
voting and investment power with respect to such shares, subject to
community property laws where applicable. Shares not outstanding but
deemed beneficially owned by virtue of the right of a person or group to
acquire them within 60 days of April 15, 1998 are treated as outstanding
only for purposes of determining the amount and percent owned by such
person or group. As of April 15, 1998, there were 15,742,877 shares of
Common Stock outstanding.
(3) Consists of 1,668 shares held by Advent International Investors II
Limited Partnership, 93,332 shares held by Advent Partners Limited
Partnership and 1,905,000 shares held by Global Private Equity II Limited
Partnership. Advent International Corporation is the general partner of
Advent International Investors II Limited Partnership, Advent Partners
Limited Partnership and Advent International Limited Partnership. Advent
International Limited Partnership is the general partner of Global
Private Equity II Limited Partnership. Because Advent International
Corporation is controlled by a group of 4 persons, none of whom may act
independently and a majority of whom must act in concert to exercise
voting or investment power over the holdings of such entity,
individually, no individual in this group is deemed to share such voting
or investment power.
10
<PAGE>
(4) Consists of 861,176 shares owned by a trust of which Mr. Harder is the
trustee and beneficiary, 280,000 shares owned by a trust for the benefit
of Mr. Harder's children, 236,672 shares held by Entrepreneurial
Ventures, Inc., 50,000 shares held by Entrepreneurial Limited Partnership
IV, 19,500 shares held by the Torrence C. Harder Cultural Foundation,
5,400 shares beneficially owned by Mr. Harder's wife and children, 1,469
shares held by Entrepreneurial, Inc., 12,500 shares subject to a warrant
held by Entrepreneurial Limited Partnership III and 6,666 shares subject
to stock options exercisable within 60 days of April 15, 1998. Mr. Harder
is a general partner of both Entrepreneurial Limited Partnership III and
Entrepreneurial Limited Partnership IV and the President of both
Entrepreneurial, Inc. and Entrepreneurial Ventures, Inc. Mr. Harder is a
director of the Company.
(5) Includes 500,000 shares currently purchasable upon exercise of a warrant.
William J. Torpey, Jr. is the president and Joan C. McArdle is the vice
president of Massachusetts Capital Resource Company, so that Mr. Torpey
and Ms. McArdle may be deemed to be the beneficial owners of the shares
held by Massachusetts Capital Resource Company.
(6) Includes 4,400 shares held by trusts for the benefit of certain of Ms.
Reeve's children and 400,000 shares subject to stock options exercisable
within 60 days of April 15, 1998. Ms. Reeve is the President and Chief
Executive Officer and a director of the Company.
(7) Consists of 381,451 shares owned by a profit sharing plan for the benefit
of Dr. Mills and 6,666 shares subject to stock options exercisable within
60 days of April 15, 1998. Dr. Mills is a director of the Company.
(8) Consists of 295,194 shares held by a trust and a pension plan for the
benefit of Mr. Perfit and 4,000 shares purchasable upon exercise of
warrants held by such trust and pension plan. Mr. Perfit is the Senior
Vice President of Technology of the Company.
(9) Includes 108,400 shares subject to stock options exercisable within 60
days of April 15, 1998. Mr. Antell is the Vice President of Software
Development of the Company.
(10) Includes 3,900 shares held by trusts for the benefit of Mr. Brown's
children and 39,500 shares subject to stock options exercisable within 60
days of April 15, 1998. Mr. Brown is the Chief Financial Officer, Vice
President of Finance and Administration and Treasurer of the Company.
(11) Includes 82,250 shares subject to stock options exercisable within 60
days of April 15, 1998. Mr. Blackwell is the Vice President of Service
Delivery of the Company.
(12) Consists of shares held by Advent Partners Limited Partnership and 6,666
shares subject to stock options exercisable within 60 days of April 15,
1998. Mr. Fillat holds a limited partnership interest in Advent Partners
Limited Partnership representing beneficial ownership of 5,500 shares. He
disclaims beneficial ownership of the remaining 1,994,500 shares
described in Note 3. Mr. Fillat is a director of the Company.
(13) Represents shares described in Notes 4, 6, 7, 8, 9, 10, 11 and 12.
11
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than ten percent of the
outstanding Common Stock to file with the Securities and Exchange Commission
reports of ownership on Form 3 and reports of changes in ownership on Forms 4
and 5. Securities and Exchange Commission regulations require directors,
executive officers and greater-than-ten-percent stockholders to furnish the
Company with copies of all Forms 3, 4 and 5 filed with the Securities and
Exchange Commission.
Based solely upon a review of Forms 3 and 4 that were furnished to the
Company during fiscal 1997, Forms 5 that were furnished to the Company by
certain directors and executive officers of the Company with respect to fiscal
1997 and representation letters of certain other directors and executive
officers to the effect that Form 5 filings were not required, the Company
believes that all Section 16(a) filing requirements applicable to its
directors, executive officers and greater-than-ten-percent stockholders were
fulfilled in a timely manner, except that Richard H. Antell failed to file on
a timely basis two Section 16(a) forms and each of Torrence C. Harder and
Michael A. Perfit failed to file on a timely basis one Section 16(a) form.
INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Deloitte & Touche LLP as independent
accountants to audit the financial statements of the Company for the fiscal
year ending December 31, 1998. Representatives of Deloitte & Touche LLP are
expected to be present at the Meeting, will have an opportunity to make a
statement if they desire to do so, and are expected to be available to
appropriate questions from stockholders.
SOLICITATION
The Company will bear the cost of soliciting proxies. Brokers, banks and
other nominees will be reimbursed for their out-of-pocket expenses and other
reasonable clerical expenses incurred in obtaining instructions from
beneficial owners of the Common Stock. In addition to the solicitation by
mail, the directors, officers and certain employees of the Company may solicit
proxies, without additional remuneration, by telephone, facsimile, telegraph
and in person. It is expected that the expense of such special solicitation
will be nominal.
STOCKHOLDER PROPOSALS
Any stockholder intending to present a proposal at the 1999 Annual Meeting
of Stockholders must submit such proposal to the Company at its offices no
later than December 28, 1998 in order to be considered for inclusion in the
proxy statement relating to that meeting.
In addition, in accordance with the Company's By-Laws, any stockholder
wishing to bring an item of business before the 1999 Annual Meeting of
Stockholders must deliver notice of such item of business to the Company at
its offices no later than March 28, 1999, even if such item is not to be
included in the proxy statement relating to that meeting.
MISCELLANEOUS
The Board of Directors does not know of any business that will be presented
for consideration at the Meeting other than that described in this Proxy
Statement. However, if any other business should come before the Meeting, the
persons named in the enclosed form of proxy will vote, or otherwise act, in
accordance with their best judgment.
12
<PAGE>
AVAILABLE INFORMATION
Stockholders of record at the close of business on April 22, 1998 will
receive a Proxy Statement, the Company's Annual Report to Stockholders, which
contains detailed financial information concerning the Company, and the
Company's Annual Report on Form 10-K for fiscal 1997 (excluding exhibits). The
Company will mail, without charge, a copy of the Company's Annual Report on
Form 10-K (excluding exhibits) to any stockholder solicited hereby who
requests it in writing. Please submit any such written request to Mr. William
G. Brown, Chief Financial Officer, Vice President of Finance and
Administration and Treasurer, Lightbridge, Inc., 67 South Bedford Street,
Burlington, Massachusetts 01803.
13
<PAGE>
LIGHTBRIDGE, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING IN LIEU OF ANNUAL MEETING OF STOCKHOLDERS -- MAY 28, 1998
The undersigned stockholder of Lightbridge, Inc. (the "Company") hereby
appoints Pamela D.A. Reeve, William G. Brown and Kevin F. Collins and each or
any of them, proxies, with full power of substitution to each and to each
substitute appointed pursuant to such power, of the undersigned to vote all
shares of common stock of the Company that the undersigned may be entitled to
vote at the Special Meeting in Lieu of Annual Meeting of Stockholders of the
Company to be held on Thursday, May 28, 1998, and at any and all adjournments
thereof (the "Meeting"), with all powers the undersigned would possess if
personally present. The proxies are authorized to vote as indicated on the
reverse side upon the matter set forth on the reverse side and in their
discretion upon all other matters that may properly come before the Meeting. The
undersigned hereby acknowledges receipt of a copy of the accompanying Notice of
Special Meeting in Lieu of Annual Meeting of Stockholders and Proxy Statement
for the Meeting and hereby revokes all proxies, if any, heretofore given by the
undersigned to others for said Meeting.
(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)
<PAGE>
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
SPECIAL MEETING IN LIEU OF ANNUAL MEETING OF STOCKHOLDERS
LIGHTBRIDGE, INC.
MAY 28, 1998
\/ Please Detach and Mail in the Envelope Provided \/
- --------------------------------------------------------------------------------
A [X] Please mark your
votes as in this
example.
FOR all nominees WITHHOLD
(except as indicated AUTHORITY
to the contrary to vote for all
at right) nominees
PROPOSAL 1. NOMINEES: Andrew I. Fillat
ELECTION OF [_] [_] D. Quinn Mills
DIRECTORS:
INSTRUCTIONS: To withhold authority to vote for
any individual nominee, strike a line through
that nominee's name in the list at right.
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED,
THE SHARES REPRESENTED THEREBY WILL BE VOTED. IF A
CHOICE IS SPECIFIED WITH RESPECT TO THE MATTER TO
BE ACTED UPON, THE SHARES WILL BE VOTED UPON THE
MATTER IN ACCORDANCE WITH THE SPECIFICATIONS MADE.
IN THE ABSENCE OF ANY SPECIFICATION, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED FOR
---
PROPOSAL 1.
PLEASE MARK, SIGN, DATE AND RETURN CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
SIGNATURE DATE , 1998
------------------------------------------- ----------------
SIGNATURE DATE , 1998
------------------------------------------- ----------------
NOTE: Please date, sign exactly as name appears hereon and return promptly. If
the shares are registered in the name of two or more persons, each should
sign. Executors, trustees, guardians, custodians, administrators,
attorneys and corporate officers should add their titles.
