<PAGE>
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
[X]Definitive Proxy Statement Rule 14a-6(e)(2))
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
Modem Media . Poppe Tyson, Inc.
---------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange ActRule 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:
Notes:
<PAGE>
[LOGO OF MODEM MEDIA . POPE TYSON]
May 5, 2000
Dear Shareholder:
It is our pleasure to invite you to join the directors and management of
Modem Media at our annual meeting of shareholders to be held at 9:30 a.m. on
Monday, June 5, 2000. The meeting will take place at the Merritt 7 Corporate
Park located at 301 Merritt 7 in Norwalk, Connecticut. We have enclosed with
this proxy statement, your proxy voting card, including directions to the
meeting, and for those shareholders who have not previously received it, the
company's 1999 annual report to shareholders for your review.
Business scheduled for the meeting includes the election of directors, the
ratification of our independent auditors for the fiscal year 2000 and the
amendment and restatement of our certificate of incorporation. Information
concerning these matters is included in the notice of annual meeting and proxy
statement. At the meeting, we also plan to review Modem Media's performance
during this first exciting year following the initial public offering of the
company's stock and intend to answer any questions you may have about the
company.
Please complete your proxy card and return it promptly in the pre-paid,
self-addressed envelope provided. Space at the annual meeting is limited.
Admission to the meeting will be on a first-come, first-served basis and
registration will begin at 9:00 a.m. If you are a "street name" holder, please
bring a copy of a brokerage statement showing your stock ownership as of the
record date.
Sincerely,
/s/ G.M. O'Connell
G. M. O'Connell
Chairman of the Board
and Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF MODEM MEDIA . POPPE TYSON, INC.
on
June 5, 2000
At Modem Media's annual meeting of shareholders to be held at 9:30 a.m. on
Monday, June 5, 2000 at the Merritt 7 Corporate Park located at 301 Merritt 7
in Norwalk, Connecticut, the following business will be brought before our
shareholders:
(1) The election of eight directors: Messrs. Allen, Beeby, Elliman,
O'Connell, Peigh, Peppers, Seeley and Zimmel each to serve for the
following year and until their successors are duly appointed;
(2) the ratification of the appointment of Arthur Andersen LLP as our
independent auditors for 2000;
(3)the amendment and restatement of the company's certificate of
incorporation; and
(4)any other business properly brought before the annual meeting.
The Board of Directors recommends a vote in favor of Items 1 through 3.
Shareholders who were record holders at the close of business on April 28,
2000 may vote at the annual meeting or any adjournments thereof. Regardless of
the number of shares you own, it is important that your shares be represented.
This proxy statement, proxy card and 1999 annual report to shareholders
(where not previously delivered) are being distributed on or about May 5,
2000.
By order of the board of directors,
/s/ Sloane Levy
Sloane Levy
Vice President,
General Counsel and Corporate
Secretary
230 East Avenue
Norwalk, Connecticut 06855
May 5, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Q's and A's about the Meeting.............................................. 1
Proposals to be Voted Upon................................................. 3
Board of Directors......................................................... 5
Board Composition........................................................ 5
Board Meetings Held...................................................... 6
Board Committees......................................................... 6
Outside Director Compensation............................................ 6
Compensation Committee Interlocks and Insider Participation.............. 7
Certain Relationships and Related Transactions........................... 7
Stock Ownership............................................................ 8
Principal Stockholders................................................... 8
Section 16(a) Beneficial Ownership....................................... 9
Stock Price Performance Graph.............................................. 10
Executive Compensation..................................................... 11
Report of the Compensation Committee..................................... 11
Summary Compensation Table............................................... 13
Option Grants Table...................................................... 14
Option Exercises and Year-End Value Table................................ 14
Certain Benefit Plans.................................................... 15
Stock Plans.............................................................. 15
Employment Agreements.................................................... 16
Indebtedness of Management............................................... 17
Additional Information..................................................... 17
Appendix A................................................................. A-1
Appendix B................................................................. B-1
</TABLE>
i
<PAGE>
Q & A's ABOUT THE MEETING
Q:What will take place at the annual meeting?
A: At our annual meeting, you will vote on the business matters listed in the
preceding notice of meeting, namely (1) the election of our eight directors
(Messrs. Allen, Beeby, Seeley, Elliman, O'Connell, Peigh, Peppers and
Zimmel), (2) the ratification of our independent auditors (Arthur Andersen
LLP), and (3) the amendment and restatement of our certificate of
incorporation. Management will review the company's performance during 1999
and will answer your questions.
Q:Who can vote?
A: Shareholders who were record holders at the close of business on April 28,
2000 are entitled to vote their shares of Modem Media common stock held on
that date. Each share of common stock outstanding on that date is entitled
to one vote. As of April 28, 2000, there were outstanding and entitled to
vote at the meeting 24,337,056 shares of common stock.
Q:How can I vote if I cannot come to the meeting?
A: Whether or not you are able to attend the meeting, you may vote your shares
by completing, signing and dating the accompanying proxy card and returning
it in the prepaid envelope. If you do not mark any selections but return
the signed card, your shares will be voted by your proxy (Steven C. Roberts
and/or Sloane Levy) in favor of the three proposals. If you are a street-
name stockholder, you will receive instructions from your bank, broker or
other nominee describing how to vote your stock. If you attend the meeting,
you may vote in person.
Q:Can I change my mind after voting?
A: Yes, you may revoke your proxy before the meeting by writing to our
Corporate Secretary stating that you wish to revoke your proxy or by
sending another executed proxy card, bearing a later date, to the Corporate
Secretary. You may also revoke your proxy by attending the annual meeting
and voting in person, although merely attending the meeting will not
automatically revoke a previously granted proxy.
Q:Who will count the vote?
A: Representatives at First Chicago Trust Company of New York, a division of
EquiServe, will tabulate the votes and act as inspectors of election.
Q:What constitutes a quorum for the meeting?
A: A quorum is the presence, in person or by proxy, of shareholders holding a
majority of the voting power of the shares entitled to vote at the meeting.
Abstentions and broker non-votes (which can occur if a "street name" holder
does not provide his or her broker with voting instructions) are counted
towards a quorum.
1
<PAGE>
Q:How many votes are needed to approve the proposals?
A: Directors are elected by a plurality of the votes of the shares present, in
person or by proxy, and entitled to vote on the election of directors. This
means, that assuming a quorum is present at the meeting, the eight director
nominees receiving the highest number of all votes cast for directors will
be elected. The affirmative vote of at least a majority of the voting power
of the shares present, in person or by proxy, and entitled to vote on the
subject matter is needed to approve the second proposal. Therefore,
abstentions effectively count as votes against the second proposal. The
affirmative vote of at least a majority of the voting power of all
outstanding shares is needed to approve the third proposal. Therefore, both
abstentions and broker non-votes effectively count as votes against the
third proposal.
Q:Who is soliciting my vote and who pays the cost?
A: The company will pay the cost of preparing, assembling and mailing the
proxy materials and will reimburse banks, brokerage firms, custodians,
nominees and fiduciaries for their reasonable expenses in sending proxy
materials to the beneficial owners of Modem Media stock. We have retained
Georgeson Shareholder Communications Inc. to assist in the distribution of
proxy materials and the solicitation of votes at a fee estimated to be
$6,500, excluding out-of-pocket expenses. Proxies may also be solicited
personally, by mail, by telephone, or otherwise by our directors, officers
or other employees, without additional compensation.
Q:When are the year 2001 shareholder proposals due?
A: If you wish to include a proposal (including the nomination of persons for
election to the Board of Directors) in the proxy statement for the 2001
annual meeting, your proposal, in writing, must be received by our
Corporate Secretary at our principal executive offices no later than
January 5, 2001, assuming the date of the 2001 annual meeting is within 30
days of the 2000 annual meeting date. A shareholder may bring other
business before an annual meeting by giving written notice of the proposed
business to our Corporate Secretary at our principal executive offices no
later than February 5, 2001, assuming the date of the 2001 annual meeting
is within 30 days of the 2000 annual meeting date. The proposal must comply
in all respects with applicable rules and regulations of the Securities and
Exchange Commission, the laws of the State of Delaware and the Company's
by-laws, otherwise the Chairman of the meeting may refuse to permit the
business at issue to be brought before the meeting.
Q:How can I get more information about Modem Media?
A: You can find more information about the company or request copies of SEC
filings by visiting our web site at www.modemmedia.com.
2
<PAGE>
PROPOSALS TO BE VOTED UPON
Proposal # 1: Re-election of Directors
Our board of directors consists of eight directors each elected to serve a
term of one year and until their successors are duly appointed. Robert C.
Allen, II, Robert H. Beeby, Donald M. Elliman, Jr., G. M. O'Connell, Terry D.
Peigh, Don Peppers, Donald L. Seeley and Joseph R. Zimmel, all of whom are
currently serving as directors, are nominated for election at the 2000 annual
meeting for a new term of one year and until their successors are duly
appointed. Biographical information for each of the nominees is provided on
page 5.
If any director is unable to serve his or her full term, the board of
directors may, by resolution, provide for a lesser number of directors or a
majority vote of the directors then in office may designate a substitute. The
director chosen by the board shall hold office for a term expiring at the next
annual meeting.
The affirmative vote of a plurality of the shares voting at the 2000 annual
meeting of shareholders having voting power present in person or represented
by proxy at the meeting is required for the election of each nominee for
director. Unless otherwise specified, the proxies received will be voted for
the election of the listed nominees.
Proposal # 2: Ratification of Arthur Andersen LLP as Independent Auditors
The board of directors has appointed Arthur Anderson LLP as the independent
auditors to examine our accounts for the 2000 fiscal year. Arthur Andersen LLP
has audited our financial statements since 1995. In the opinion of the board
of directors and management, Arthur Andersen LLP is well qualified to serve as
our independent auditors. A member of Arthur Andersen LLP will be present at
the annual meeting in order to have the opportunity to respond to questions
and make a statement if they desire to do so.
The board of directors recommends that shareholders vote for ratification of
the appointment of Arthur Andersen LLP as our independent auditors for the
2000 fiscal year. In the event that ratification of the board of director's
selection of auditors is not approved by the affirmative vote of a majority of
the voting power of the shares represented in person or represented by proxy
at the meeting, the selection of independent auditors will be reconsidered by
the board of directors.
Proposal # 3: Proposed Amendment and Restatement of our Certificate of
Incorporation.
The board of directors has adopted resolutions approving and declaring
advisable the proposed amendment and restatement of our certificate of
incorporation and directing that the amendment and restatement be submitted
for approval by our shareholders at the 2000 annual meeting. The proposed
amendment and restatement is attached as Appendix A.
The amendment and restatement will effect the following changes to our
certificate of incorporation:
(1) Name Change. The amendment and restatement will change our name to Modem
Media, Inc. The board of directors has determined that the simplification of
our legal name to Modem Media, Inc. is in our best interest. We are generally
known and referred to in the industry and by our clients as Modem Media. In
addition, we are currently doing business as "Modem Media" and the board of
directors believes that this action will eliminate any potential confusion or
inconsistencies.
(2) Increase of Shares Authorized for Issuance. The second primary change
will increase the number of authorized shares of common stock to 145,000,000.
The board of directors has concluded that the availability of additional
authorized but unissued shares will provide us with the flexibility to issue
shares of stock for certain proper corporate purposes which may arise in the
future. Examples of those purposes may include the use of stock to fund
acquisitions, to enable the company to effect future stock splits and to use
in connection with the adoption of stock based benefit plans.
3
<PAGE>
No additional action by our shareholders is necessary prior to the issuance
of additional shares, unless required by applicable law or the rules of any
stock exchange on which the stock is then listed. Our certificate of
incorporation does not give preemptive rights with respect to our stock,
therefore, existing stockholders would not, at the time of issuance of
additional shares, have preferential rights to purchase these shares. In
addition, if additional shares are authorized for issuance by the board of
directors at a future time, such issuance could have a dilutive effect on
earnings per share, voting power and ownership levels of current stockholders.
The proposed amendment to increase the authorized shares of stock could have
an anti-takeover effect by increasing the cost to acquire control of the
company should the board of directors authorize the issuance of shares in an
attempt to block a hostile takeover of the company. In so doing, the amendment
could limit the shareholders ability to sell shares of our stock at a higher
price than may be available in a takeover scenario. The board of directors is
not recommending the adoption of the proposal with the intent that it be used
as an anti-takeover device.
(3) Change in Number of Directors. The amendment and restatement will change
the number of directors constituting the whole board of directors from the
number as set in the bylaws (currently eight) to a range which may be not less
than five nor more than ten. The number of directors shall then be fixed from
time to time by the board of directors.
The board of directors believes that this change will allow the board
flexibility in board composition and in timing regarding filling vacancies
that may occur on the board from time to time.
(4) Elimination of References to Class B Common Stock and Reclassification
of Class A Common Stock. Reference to the Company's Class B common stock and
features unique to such class will be removed from the certificate of
incorporation and the Company's Class A common stock will be reclassified as
common stock. The holders of the Company's Class B common stock, True North
Communications Inc. ("True North") and its subsidiaries, have each converted
their shares of Class B common stock into shares of Class A common stock such
that there are currently no shares of Class B common stock outstanding and
none may be issued in the future. Currently, there remains only one class of
common stock outstanding.
The board of directors recommends that shareholders vote in favor of the
adoption of the proposed amendment and restatement of our certification of
incorporation. The affirmative vote of at least a majority of the voting power
of all outstanding shares is needed to approve this proposal.
4
<PAGE>
BOARD OF DIRECTORS
Robert C. Allen, II
Mr. Allen, 32, has served as our President and Chief Operating Officer since
November 1998. From October 1996 to November 1998, Mr. Allen was President of
one of our divisions. From 1993 to October 1996, Mr. Allen served as a
Managing Partner of Modem Media Advertising Limited Partnership. From 1989 to
1992, Mr. Allen was the Director of Business Development of the Modem
Partnership.
Director since 1996.
Robert H. Beeby
Mr. Beeby, 68, is the retired President and Chief Executive Officer of
Frito-Lay, Inc., a position he held from 1989 to 1991. Between 1984 and 1988,
Mr. Beeby was the President and Chief Executive Officer of Pepsi-Cola
International. Prior to 1984, Mr. Beeby held a number of senior management
positions with Wilson Sporting Goods Company, Pepsi-Cola International and
Frito-Lay, Inc. He is a member of the board of directors of A.C. Nielsen Co.,
Columbia Energy Group and Church & Dwight Co.
Director since May 1999.
Donald M. Elliman, Jr.
Mr. Elliman, 55, has served as President of Ascent Sports Holdings, a sports
and arena management firm, since January 2000. From 1995 to 1999, Mr. Elliman
served as a director and an Executive Vice President of Time Inc. Mr. Elliman
was the President of Sports Illustrated from September 1992 through January
1998 and held various senior sales/marketing and publishing positions with
Time Inc. since 1967. Mr. Elliman is a director of True North.
Director since November 1998.
G. M. O'Connell
Mr. O'Connell, 38, has served as Chief Executive Officer of Modem Media
since November 1998. From October 1996 to November 1998, Mr. O'Connell was
President and Chief Operating Officer of Modem Media. From 1987 to October
1996, Mr. O'Connell was a Managing Partner of Modem Media Advertising Limited
Partnership, which he co-founded in 1987. Mr. O'Connell is a director of the
Direct Marketing Association.
Director since 1996.
Terry D. Peigh
Mr. Peigh, 46, is currently Executive Vice President, TN Services of True
North, a position that he has held since April 1998. Prior to April 1998, Mr.
Peigh held various positions with Foote, Cone & Belding, including acting as
its Senior Vice President, Worldwide Account Director commencing in 1993.
Director since February 2000.
Don Peppers
Mr. Peppers, 49, is a founder and partner of the Peppers and Rogers Group, a
customer relationship management and consulting company. Prior to establishing
the Peppers and Rogers Group in 1993, he was the Chief Executive Officer of
Perkins/Butler Direct Marketing, a direct-market advertising agency. Mr.
Peppers is a member of the Board of Directors of DoubleClick Inc. and Electric
SchoolHouse and is a member of the Advisory Board of Internet Capital Group,
Netcentives Inc., E.piphany, Chordiant Software Inc. and BroadVision, Inc.
Director since May 1999.
Donald L. Seeley
Mr. Seeley, 56, retired as Executive Vice President, Chief Financial Officer
of True North in March 2000, a position he had held since June 1997.
Currently, Mr. Seeley is a part-time employee and director of True North. Mr.
Seeley was the Vice Chairman of True North from May 1999 to March 15, 2000.
From June 1997 to March 15, 2000, Mr Seeley was Executive Vice President,
Chief Financial Officer of True North. From 1993 through June 1997, Mr. Seeley
was Chief Executive Officer of The Alexander Consulting Group Inc. Mr. Seeley
is a director of True North.
Director since November 1998.
5
<PAGE>
Joseph R. Zimmel
Mr. Zimmel, 46, is a managing director and head of the Communications, Media
& Entertainment Group for the Americas in the Investment Banking Division at
Goldman, Sachs & Co., a position he has held since 1992. From 1988 to 1992,
Mr. Zimmel served as a managing director in the firm's Mergers and
Acquisitions Department. He is a member of the board of directors of the
Student/Sponsor Partnership in New York.
Director since May 1999.
Messrs. Beeby, Peppers and Zimmel were elected to our board of directors
under an agreement dated as of May 4, 1999, by and among us, True North, G. M.
O'Connell and Robert C. Allen, II. Under that same agreement, we, Messrs.
O'Connell and Allen and True North have agreed that (1) until True North no
longer owns at least 10% of our outstanding capital stock, such parties would
take all actions necessary in order to cause the election of at least one
director designated by True North to our board of directors and (2) as long as
Messrs. O'Connell and Allen each serves us as an executive officer, the
parties to the agreement agreed to take all actions necessary in order to
cause their election to our board of directors.
There are no family relationships among any of our directors or officers.
Board Meetings Held
The board of directors held 10 meetings during 1999 and took action by
written consent once. Each director attended 75% or more of the total meetings
of the board of directors and committees of which he was a member.
Board Committees
Audit Committee. The audit committee makes such examinations as are
necessary to monitor the corporate financial reporting and the internal and
external audits of the company and its subsidiaries. The audit committee
reviews the adequacy and results of the company's system of internal
accounting controls and internal audit procedures. The audit committee
nominates the independent auditors and reviews the independent auditors
proposed audit scope and approach as well as the results of the audit
engagement. The audit committee provides to the board of directors such
additional information and materials as it may deem necessary to make the
board of directors aware of significant financial matters that require board
attention. The audit committee was formed in May 1999 when the company's
independent directors were elected and a charter was adopted. A copy of the
charter is attached as Appendix B. The members of the audit committee are
Robert H. Beeby and Joseph R. Zimmel and Mr. Zimmel is its chairman. Each
member is an independent director within the meaning of the National
Association of Securities Dealers' listing standards. The audit committee met
2 times during 1999 since its inception.
Compensation Committee. The compensation committee reviews and makes
recommendations to the full board of directors regarding the compensation
policy for our executive officers and directors, the general compensation
goals and guidelines for our employees and the criteria by which bonuses to
our employees are determined. In addition, the compensation committee is
responsible for reviewing and making recommendations to the board of directors
regarding the adoption and/or amendment of compensation plans including our
stock option and stock incentive plans. The members of the compensation
committee are Robert H. Beeby and Don Peppers and Mr. Peppers is its chairman.
The compensation committee met 5 times during 1999 and took action by written
consent 5 times.
Outside Director Compensation
Modem Media directors who are not also employees of ours, or employees or
directors of True North, receive options to acquire 17,500 shares of common
stock when they join the board of directors. In addition, such outside
directors receive options to acquire 5,000 shares of common stock for each
year of service at the time of re-election. Each director who is not also an
employee of Modem Media or employee or director of True North is also paid
$1,000 for each board or committee meeting.
6
<PAGE>
Compensation Committee Interlocks and Insider Participation
Neither of the members of the compensation committee of the board of
directors is or has been an officer or employee of ours. Both members of the
compensation committee participate in decisions related to compensation of our
executive officers. Before the board of directors established the compensation
committee, the compensation of our executive officers was determined by our
directors who were not officers of the company. No interlocking relationship
exists between our board of directors and the board of directors or
compensation committee of any other company, nor has any such interlocking
relationship existed in the past.
Certain Relationships and Related Transactions
Mr. Zimmel is a managing director of Goldman, Sachs & Co. This firm provided
us with investment banking services during 1999 and is expected to provide us
with similar services during 2000.
Two of our eight directors had been during 1999 and currently are also
employees of True North, and are compensated by True North in connection with
their employment by True North. In addition, one of these directors and one of
our other directors had been during 1999 and currently are also directors of
True North. They were elected to our board of directors by True North. Prior
to April 26, 2000, True North's voting control of our stock amounted to
approximately 80%. On April 26, 2000, upon the conversion of True North's
Class B common stock to Class A common stock, True North's voting control fell
below 50% to approximately 46% of total voting power. These directors may have
conflicts of interest in addressing business opportunities and strategies in
circumstances where our and True North's interests differ.
In the normal course of business, we and True North have, from time to time,
entered into various business transactions and agreements. These transactions
include (1) an administrative services agreement whereby True North provides
us with administrative functions and other services including tax preparation,
insurance and treasury consulting; (2) intercompany credit agreements,
including a $3 million revolving credit facility (due to expire in February
2001 or upon 60 days' advance notice if True North's voting control falls
below 50% of total voting power) at an interest rate equal to True North's
cost of borrowing plus two percent, under which there are currently no
outstanding borrowings; (3) a sublease with Bozell, Jacobs, Kenyon & Eckhardt,
Inc., a subsidiary of True North, for office space in New York City; and (4) a
tax matters agreement whereby we and True North have entered into an agreement
to provide for certain unitary state tax-sharing arrangements. Except for the
administrative services agreement, which has terminated, the other agreements
will remain in effect until they terminate in accordance with their terms or
the parties agree to such termination.
We believe that each of these transactions was made on terms no less
favorable than those that we could have obtained from unaffiliated third
parties. All future transactions, including loans, between us and our
officers, directors, principal stockholders or our affiliates will be approved
by a majority of our board of directors, including a majority of our
independent and disinterested directors, and will be on terms equivalent to
those that we could obtain from unaffiliated third parties.
7
<PAGE>
STOCK OWNERSHIP
Principal Stockholders
The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of April 15, 2000 for:
. each person or entity who is known by us to beneficially own five
percent or more of the outstanding shares of either class of our common
stock;
. each director;
. each executive officer named in the Summary Compensation Table; and
. all directors and executive officers of Modem Media as a group.
The chart below assumes the conversion of the Company's Class B common stock
into Class A common stock occurred prior to April 15, 2000.
<TABLE>
<CAPTION>
Common Stock
----------------------
Shares Percent
Beneficially of
Name Owned (1) Ownership
- ---- ------------ ---------
<S> <C> <C>
True North Communications Inc............................ 11,109,217 45.7%
101 East Erie Street
Chicago, Illinois 60611 (2)
GEOCapital LLC........................................... 1,461,800 6.0%
767 Fifth Avenue, 45th Floor
New York, NY 10153-4590 (3)
Douglas C. Ahlers (4).................................... 2,110,748 8.7%
G. M. O'Connell (5)...................................... 2,249,946 9.2%
Robert C. Allen, II (6).................................. 626,978 2.6%
Robert H. Beeby (7)(8)................................... 32,000 0.1%
Donald M. Elliman, Jr. (9)............................... 11,109,217 45.7%
Sloane Levy (10)......................................... 4,000 0.0%
Terry D. Peigh (11)...................................... 11,109,217 45.7%
Don Peppers (12)......................................... 47,000 0.2%
Steven C. Roberts (13)................................... 8,824 0.0%
Donald L. Seeley (14).................................... 11,110,217 45.7%
William Zierolf.......................................... -- 0.0%
Joseph R. Zimmel (12).................................... 35,000 0.1%
All directors and executive officers as a
group (thirteen persons) (15)(16)....................... 14,276,807 57.5%
</TABLE>
- --------
(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 held by that person
that are currently exercisable or exercisable within 60 days of April
15, 2000 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 and
pursuant to applicable community property laws, each stockholder named
in the table has sole voting and investment power with respect to the
shares set forth opposite such stockholder's name.
(2) Includes shares of common stock held by various wholly-owned
subsidiaries of True North.
8
<PAGE>
(3) GEOCapital LLC filed a statement with the Securities and Exchange
Commission on Schedule 13G under the Securities Exchange Act of 1934, as
amended, disclosing beneficial ownership of greater than 5% of the Modem
Media common stock (1,461,800 shares). According to the statement,
GEOCapital has sole dispositive power for 1,461,800 shares.
(4) Includes 60,800 shares of common stock subject to options which are
exercisable within 60 days of April 15, 2000.
(5) Includes 174,800 shares of common stock subject to options which are
exercisable within 60 days of April 15, 2000.
(6) Includes 74,800 shares of common stock subject to options which are
exercisable within 60 days of April 15, 2000.
(7) Includes 2,000 shares of common stock beneficially owned by Mr. Beeby's
wife.
(8) Includes 30,000 shares of common stock subject to options which are
exercisable within 60 days of April 15, 2000.
(9) Includes 11,109,217 shares of common stock beneficially owned by True
North and its wholly-owned subsidiaries. Mr. Elliman, who is a director
of True North, disclaims beneficial ownership of such shares.
(10) Includes 4,000 shares of common stock subject to options which are
exercisable within 60 days of April 15, 2000.
(11) Includes 11,109,217 shares of common stock beneficially owned by True
North and its wholly-owned subsidiaries. Mr. Peigh, who is an Executive
Vice President of True North, disclaims beneficial ownership of such
shares.
(12) Includes 35,000 shares of common stock subject to options which are
exercisable within 60 days of April 15, 2000.
(13) Includes 5,700 shares of common stock subject to options which are
exercisable within 60 days of April 15, 2000.
(14) Includes 11,109,217 shares of common stock beneficially owned by True
North and its wholly-owned subsidiaries. Mr. Seeley, who is a part-time
employee and director of True North, disclaims beneficial ownership of
such shares.
(15) Includes an aggregate of 531,018 shares of common stock subject to
options held by directors and executive officers of Modem Media, which
are exercisable within 60 days of April 15, 2000.
(16) The address of each of the individuals listed, with the exception of Mr.
Ahlers, is c/o Modem Media . Poppe Tyson, Inc., 230 East Avenue,
Norwalk, Connecticut 06855. Mr. Ahlers' address is 1942 Pacific Avenue,
San Francisco, CA 94109.
Section 16(a) Beneficial Ownership
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
reporting by directors and officers and 10% holders of our stock concerning
their holdings and transactions in Modem Media securities. A review of our
records indicates that during 1999, all required filings pursuant to Section
16(a) relating to our directors and officers were made; however, Form 3's
required to be submitted by three directors, Messrs. Beeby, Peppers and
Zimmel, were delinquent, but none of these filings were submitted later than
11 days from the filing deadline. In addition, True North reported five
transactions in our common stock which occurred during the months of February,
May and June of 1999 on Form 4 on August 10, 1999.
9
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
We completed the initial public offering of our common stock in February
1999. Prior to such date, there was no established market for our common
stock. The following graph depicts a comparison of cumulative total
shareholder return for our common stock from the initial public offering price
of $16 (prior to our March 1, 2000 two-for-one stock split) on February 5,
1999 through December 31, 1999, the Nasdaq Market Index and the Hambrecht &
Quist Technology Index for that same time period. The graph assumes $100 was
invested on February 5, 1999 ending on December 31, 1999 in our common stock,
the Nasdaq Market Index and the Hambrecht & Quist Technology Index.
CUMULATIVE TOTAL RETURN
Based upon an initial investment of $100 at our initial public offering
on February 5, 1999
[LINE GRAPH]
February March June September December
5, 1999 31, 1999 30, 1999 30, 1999 31, 1999
-------- -------- -------- --------- --------
Modem Media Poppe
Tyson Inc. $100 $268 $143 $231 $440
Nasdaq US $100 $103 $113 $116 $167
H&Q Internet Index $100 $122 $125 $129 $250
10
<PAGE>
EXECUTIVE COMPENSATION
Report of the Compensation Committee
Compensation Committee Objectives and Philosophy
The compensation committee is comprised of two non-employee members of our
board of directors. The committee recommends, establishes and approves changes
to our compensation policies and programs in addition to administering our
stock option and stock incentive plans. The committee is charged with the
responsibility of ensuring that our compensation philosophy and executive
compensation arrangements reflect the interests of the company and our
shareholders.
Our executive compensation programs are designed to meet the following
objectives:
. To attract, motivate and retain the management expertise required to
achieve our business strategies;
. To link executive compensation with shareholder value, a shared sense of
commitment and the attainment of our strategic business objectives; and
. To recognize both corporate and individual performance with a
competitive total compensation plan using both cash and non-cash awards.
The compensation committee sets the company's compensation philosophy and
oversees compensation levels for executive officers. The compensation
philosophy is designed to be competitive within the industry in which we
compete and from which we recruit our senior executives. Our executive
compensation program is performance-based with a substantial portion of
compensation linked to long-term equity growth and company performance.
Principal Components of Executive Compensation
The three main components of our executive compensation program are base
salary, annual cash incentive awards and equity participation in the form of
stock option grants. In addition, each executive officer may elect to
participate in our Employee Stock Purchase Plan. At the end of 1999, the
compensation committee reviewed and will review in future years, the total
compensation package of executive officers to ensure that they are consistent
with our compensation philosophy. As part of the review, the compensation
committee considers corporate performance, competitive survey results, outside
consultants and the recommendations of management.
. Base Salary: Base salaries of executive officers are reviewed annually
and are managed in accordance with our compensation philosophy using
measures which include achievement of performance objectives, scope of
responsibility and experience, and external salary competitiveness
within the industry and/or area of the executive's functional expertise.
. Annual Cash Incentive: The compensation committee approves the payment
of a discretionary cash bonus to each executive officer following the
conclusion of each fiscal year. The payout under the bonus plan is based
on a predetermined target which is equal to a percentage of the
executive's base salary. Payouts are tied to the achievement of company
profit goals, achievement of objectives linked to business direction and
individual accomplishments. The compensation committee reserves the
right, based on the degree of success achieved under the plan, to reduce
or not to approve bonus payments which exceed the target percentage in
order to reflect corporate and/or individual performance. The target
bonus percentage will be reviewed along with base salary and long term
equity as a key component in our total compensation philosophy to
determine both industry and position competitiveness.
. Stock Options: The compensation committee administers our 1996 and 1997
Stock Option Plans as well as the newly adopted 1999 Stock Incentive
Plan. Prior to the establishment of the compensation committee in
February 1999, the full board of directors granted to key executive
officers and other
11
<PAGE>
employees options to purchase shares of the our common stock based upon
factors such as responsibilities of the officer, tenure, individual
contribution and performance. The compensation committee has applied
similar criteria in the determination of grants of stock options since
the establishment of the compensation committee. It is our practice to
set stock option exercise prices at 100% of the fair market value on the
date of grant. The primary objective of issuing stock options is to
provide long-term financial rewards directly linked to market
performance of our stock thereby aligning the interests of management
and shareholders.
Policy with Respect to the $1 Million Deduction Limit
Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended, limits
the tax deductibility by a corporation of compensation exceeding $1 million
paid to any of its five named executive officers. Compensation that qualifies
as "performance based" is excluded from the $1 million limit. We expect that
the design and administration of our stock option and stock incentive programs
will qualify under Section 162(m). The compensation committee does not expect
total cash compensation payable for salaries and bonuses to exceed the $1
million limit, however, the compensation committee reserves the right, under
appropriate circumstances, to authorize compensation payments which may not be
fully tax deductible by the company.
Compensation of the Chief Executive Officer
Mr. O'Connell's base salary was determined pursuant to a five-year
employment agreement entered into in December 1996. Mr. O'Connell's total
compensation for 1999 was based on the same factors as those described for all
executive officers described above, including the achievement of company
profit goals and objectives linked to individual accomplishment and
performance. The target bonus for Mr. O'Connell for 1999 was 40% of salary.
Mr. O'Connell's bonus payment for 1999 was a payment equaling 50% of
compensation for that year.
Submitted by the compensation committee of the board of directors:
Robert H. Beeby
Don Peppers
12
<PAGE>
Summary Compensation Table
The following table sets forth information concerning the compensation
received, for each of the last two years, for services rendered to us by our
current Chief Executive Officer and each of our other four most highly-
compensated executive officers during the year ended December 31, 1999 whose
total compensation in 1999 equaled or exceeded $100,000. All share amounts
presented in this chart give effect to the 2-for-1 split of our common stock
which occurred on March 1, 2000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
----------------- ------------
Securities
Underlying
Name and Principal Positions Year Salary Bonus Options
---------------------------- ---- -------- -------- ------------
<S> <C> <C> <C> <C>
G. M. O'Connell......................... 1999 $300,000 $150,000 --
Chief Executive Officer 1998 300,000 90,000 285,000
Robert C. Allen, II..................... 1999 300,000 150,000 --
President and Chief Operating Officer 1998 300,000 90,000 285,000
Steven C. Roberts....................... 1999 184,000 120,000 200,000
Chief Financial Officer 1998 175,000 85,000 120,908
Sloane Levy(1).......................... 1999 106,000 40,000 60,000
VP, General Counsel and Corporate
Secretary 1998 -- -- --
William Zierolf(2)...................... 1999 41,000 66,000(3) 500,000
Senior Vice President, Corporate
Development 1998 -- -- --
</TABLE>
- --------
(1) Ms. Levy commenced employment with us as Vice President and General
Counsel in May 1999.
(2) Mr. Zierolf commenced employment with us as Senior Vice President,
Corporate Development in October 1999.
(3) The amount shown includes a signing bonus of $50,000 paid to Mr. Zierolf
upon his employment with us.
13
<PAGE>
Option Grants Table
The following table sets forth information as to options granted to our
executive officers during 1999. All share amounts presented in this chart give
effect to the 2-for-1 split of our common stock which occurred on March 1,
2000.
Option/SAR Grants in Fiscal 1999
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rate of Stock
Appreciation for
Option Term(3)
----------------------
Percent of
Number of Total
Securities Options/SARs Exercise
Underlying Granted to Price
Options/SARs Employees in Per Expiration
Name Granted(1) (#)Fiscal Year Share(2) Date 5% 10%
- ---- ------------ ------------ -------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
G. M. O'Connell......... -- 0.00% $ -- -- $ -- $ --
Robert C. Allen, II..... -- 0.00% -- -- -- --
Steven C. Roberts....... 200,000 7.03% 9.78 7/28/09 1,230,275 3,117,759
Sloane Levy............. 20,000 0.70% 13.38 5/17/09 168,229 426,326
40,000 1.41% 29.81 12/6/09 749,957 1,900,538
William Zierolf......... 500,000 17.57% 21.41 10/18/09 6,730,745 17,057,029
</TABLE>
- --------
(1) Except as indicated below, the options vest as to one-third of the
underlying common stock on the first anniversary of the date of grant and
as to an additional one-third on each anniversary thereafter. With regard
to options to purchase 20,000 shares of common stock granted to Ms. Levy,
20% of the options vest on the date of grant and an additional 20% vest on
each anniversary of the grant date thereafter. With regard to options to
purchase 200,000 shares of common stock granted to Mr. Zierolf, the
options vest upon the sixth anniversary of the grant date, subject to
acceleration upon attainment of certain performance targets.
(2) Options were granted at an exercise price equal to 100% of the fair market
value of our common stock on the date of grant, as determined by our board
of directors.
(3) These columns show the hypothetical gains or option spreads of the options
granted based on assumed annual compound stock appreciation rates of 5%
and 10% over the full ten-year term of the options. The assumed rates of
appreciation are mandated by the rules of the Securities and Exchange
Commission and do not represent our estimate or projection of future
common stock prices.
Option Exercises and Year-End Value Table
The following table sets forth information with respect to option exercises
by each of our executive officers during 1999 as well as unexercised options
held by such officers as of December 31, 1999. All share amounts presented in
this chart give effect to the 2-for-1 split of our common stock which occurred
on March 1, 2000.
Aggregate Stock Option/SAR Exercises in Fiscal 1999
and Fiscal Year-End Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised In-
Shares Acquired Value Options/SARs as of the-Money Options/SARs as
on Exercise (#) Realized December 31, 1999 of December 31, 1999(1)
--------------- ---------- ------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
G. M. O'Connell......... -- $ -- 159,600 201,400 $4,722,051 $5,965,972
Robert C. Allen, II..... 100,000 2,912,472 59,600 201,400 1,767,885 5,965,972
Steven C. Roberts....... 58,898 1,701,053 19,000 292,238 563,588 7,807,922
Sloane Levy............. 4,000 85,500 -- 56,000 -- 564,000
William Zierolf......... -- -- -- 500,000 -- 6,891,250
</TABLE>
- --------
(1) Calculated by determining the difference between the exercise price and
the deemed fair market value of the securities underlying the options at
December 31, 1999.
14
<PAGE>
Certain Benefit Plans
We do not have a pension plan for any of our employees or executive
officers. We do offer a retirement savings plan established pursuant to
Section 401(k) of the Internal Revenue Code. Employees may authorize us to
make compensation deferral contributions between 1% and 15% of total pay. We
may make a discretionary pretax matching contribution determined annually by
the board of directors to the accounts of employees employed by us as of the
last day of the contribution period.
Stock Plans
The following is a description of our stock-based compensation plans in
which any of our executive officers may participate.
1999 Stock Incentive Plan
In December 1999, we adopted the Modem Media . Poppe Tyson, Inc. 1999 Stock
Incentive Plan, pursuant to which a total of 3,000,000 shares of common stock
have been reserved for issuance in order to attract, retain and provide
additional incentive to highly qualified employees, directors and consultants.
Under the 1999 Stock Incentive Plan, we may grant stock options (including
incentive stock options and nonqualified options), stock appreciation rights,
restricted stock, merit awards, performance awards and other stock-based
awards to our employees, directors and consultants. The 1999 Stock Incentive
Plan is administered by our board of directors or a Compensation Committee
consisting of two or more outside directors. Our board of directors or
Compensation Committee interprets and construes provisions of the 1999 Stock
Incentive Plan, adopts rules for administering the plan and determines grants
of equity awards under the plan. As of April 15, 2000, only awards in the form
of stock options have been granted under the 1999 Stock Incentive Plan,
relating to a total of approximately 2,197,700 shares. Under the terms of the
1999 Stock Incentive Plan, if within one year following our change of control,
a participant's employment is terminated involuntarily by us other than for
cause, then each outstanding option held by the participant will automatically
vest and become fully exercisable.
1997 Stock Option Plan
In 1997, we established the Modem Media . Poppe Tyson, Inc. 1997 Stock
Option Plan, pursuant to which a total of 6,080,000 shares of common stock
have been reserved for issuance to provide additional incentive to our
employees, officers, directors and consultants. Pursuant to the 1997 Stock
Option Plan, we may grant stock options (including incentive stock options and
nonqualified options) and stock purchase rights to our employees, officers,
directors and consultants. Our board of directors or Compensation Committee
interprets and construes provisions of the 1997 Stock Option Plan, adopts
rules for administering the plan and determines grants of equity awards under
the plan. As of April 15, 2000, options to purchase an aggregate of 6,771,258
shares of common stock had been granted under the 1997 Stock Option Plan. In
connection with our transfer to True North of the non-strategic digital
interactive marketing operations originally contributed by True North to us,
True North has agreed to satisfy options to purchase up to an aggregate of
579,032 shares of common stock held under the 1997 Stock Option Plan by
employees of True North and its affiliates, including Poppe Tyson, Inc.
Accordingly, upon exercise of such options, the exercise price will be paid to
True North and True North will surrender an equivalent number of shares of our
common stock to us. As of April 15, 2000, options to purchase 222,051 shares
of common stock remain outstanding to be satisfied by True North. Under the
terms of the options granted to date under the 1997 Stock Option Plan, if we
are acquired or merge with another entity or transfer all or substantially all
of our assets, then each outstanding option will automatically vest and become
fully exercisable unless the successor entity assumes such option or stock
purchase right or replaces it with a comparable option or right.
15
<PAGE>
Modem Media Advertising Limited Partnership 1996 Option Plan
In 1996, the Modem Partnership established the Modem Media Advertising
Limited Partnership 1996 Option Plan, pursuant to which units ("Units")
representing assignments of beneficial ownership of the Modem Partnership were
reserved for issuance to provide additional incentives to the Modem
Partnership's key employees, consultants, officers and directors. The Modem
Partnership ceased to have its own separate existence prior to our initial
public offering in February 1999, and the terms and the conditions of the 1996
Option Plan were assumed by us. Pursuant to the terms of the 1996 Option Plan,
Units acquired under the plan were converted into shares of common stock, and
options to acquire Units were converted into options to acquire our common
stock. The 1996 Option Plan is administered by our board of directors and the
compensation committee of the board of directors. As of April 15, 2000,
options to purchase an aggregate of 690,492 shares of our common stock had
been granted under the 1996 Option Plan. Upon the date of grant, each option
was fully vested. For the ninety-day period following an option holder's
termination of employment, we have the right to repurchase all options held by
the option holder under the 1996 Option Plan at a price equal to the fair
market value of the options as of the date of notice of repurchase. As of
April 15, 2000, all available options had been granted under the 1996 Option
Plan, and there will be no further grants under this plan.
Employee Stock Purchase Plan
Our 1999 Employee Stock Purchase Plan was adopted by our board of directors
in February 1999. A total of 1,900,000 shares of our common stock have been
reserved for sale. The Purchase Plan, which is intended to qualify as an
employee stock purchase plan within the meaning of Section 423 of the Internal
Revenue Code, provides for consecutive, overlapping 24-month offering periods.
Each offering period contains four six-month purchase periods. Offering
periods begin on the first trading day on or after February 15 and August 15
of every year and terminate 24 months later. Employees are eligible to
participate if they are employed by us or a subsidiary of ours designated by
the board of directors for at least 20 hours per week and for more than five
months in any calendar year. The Purchase Plan permits eligible employees to
purchase our common stock through payroll deductions, which may not exceed 15%
of an employee's compensation, subject to certain limitations.
Each participant is granted an option to purchase stock on the first day of
the six-month purchase period and such option will be automatically exercised
on the last date of each purchase period. The purchase price of each share of
our common stock under the Purchase Plan is equal to 85% of the lesser of the
fair market value per share of our common stock on the start date of that
offering period or on the date of the purchase. Employees may modify or end
their participation in the offering at any time during the offering period or
on the date of purchase, subject to certain limitations. Participation ends
automatically on termination of employment with us.
Employment Agreements
In December 1996, we entered into a five-year employment agreement with each
of Messrs. O'Connell and Allen providing for an initial annual base salary of
$300,000, subject to increases at the discretion of our board of directors.
Each of Messrs. O'Connell and Allen currently receive a base salary of
$300,000. Pursuant to the employment agreements, if we terminate such
executive's employment without cause, the executive is entitled to receive
severance benefits equal to salary plus profit sharing for a period equal to
the lesser of three years after such termination or the time remaining in the
initial term of employment. Pursuant to letter agreements between us and each
of Mr. O'Connell and Mr. Allen, the vesting of each of their stock options
granted prior to January 2000 will be accelerated by one year upon (1)
termination of each person's employment by him for good reason within 18
months after a change of control or (2) upon termination of his employment by
us without cause within 18 months after a change of control. In addition, if
the effective date of such termination is six months or less from the next
vesting date, an additional prorated number of options will vest. Each of
Messrs. O'Connell and Allen has also agreed to certain confidentiality,
noncompetition and nonsolicitation provisions.
16
<PAGE>
In December 1996, we entered into an employment agreement with Mr. Roberts
providing for an annual base salary of $150,000. Mr. Roberts currently
receives a base salary of $200,000. Pursuant to a letter agreement, if we, or
a successor, terminate Mr. Roberts' employment without cause or if Mr. Roberts
terminates his employment with good reason, he is entitled to receive
severance benefits equal to one year's salary plus any applicable bonuses.
Upon a change of control, the vesting of Mr. Roberts' stock options granted
prior to January 2000 will be accelerated by one year. If Mr. Roberts'
employment is terminated by us without cause or by him for good reason within
18 months following a change of control, the vesting of these options will be
accelerated by an additional one year period. If the effective date of such
termination is six months or less from the next vesting date, an additional
prorated number of options will vest. In addition, Mr. Roberts has agreed to
certain confidentiality, noncompetition and nonsolicitation provisions.
In April 1999, we entered into an employment agreement with Ms. Levy for an
initial base salary of $170,000. Pursuant to the employment agreement, if we
terminate Ms. Levy's employment without cause, she is entitled to receive
severance benefits equal to one year of base salary plus any other payments to
which she may be entitled to at that time. Pursuant to a letter agreement
between us and Ms. Levy, the vesting of Ms. Levy's stock options granted on
May 17, 1999 shall be accelerated by one year and the vesting of the options
granted to Ms. Levy on December 6, 1999 shall be fully accelerated upon (1)
termination of her employment by her for good reason within 18 months after a
change of control or (2) upon termination of her employment by us without
cause within 18 months after a change of control. In addition, if the
effective date of such termination is six months or less from the next vesting
date, an additional prorated number of options will vest. Ms. Levy has also
agreed to certain confidentiality, noncompetition and nonsolicitation
provisions.
In October 1999, we entered into an employment agreement with Mr. Zierolf
providing for an initial base salary of $200,000 and a one-time signing bonus
of $50,000. Pursuant to the employment agreement, if Mr. Zierolf is terminated
without cause within 18 months following a change of control, the vesting of
options granted to him will be accelerated by one year. Mr. Zierolf has also
agreed to certain confidentiality and nonsolicitation provisions.
Indebtedness of Management
None of our executive officers are or were indebted to the company or any
subsidiary at any time since January 1, 1999.
ADDITIONAL INFORMATION
As of the date of this proxy statement, we know of no matters to be
presented at the meeting other than the items referred to on the notice of
proxy. If any other business is properly brought before the meeting, the
holders of the proxies will vote and act with respect to the business in
accordance with their best judgement. Discretionary authority to do so is
conferred by the enclosed proxy.
17
<PAGE>
Appendix A
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
MODEM MEDIA . POPPE TYSON, INC.
a Delaware corporation
Modem Media . Poppe Tyson, Inc., a corporation organized and existing under
and by virtue of the General Corporation Law of Delaware (the "Corporation"),
does hereby certify as follows:
FIRST: That the Corporation was originally incorporated on October 10, 1996
under the name TN Technologies Holding, Inc., pursuant to the General
Corporation Law of Delaware.
SECOND: That the Corporation's Certificate of Incorporation is hereby
amended and restated to read in its entirety as follows:
FIRST: The name of this corporation is Modem Media, Inc. (the
"Corporation").
SECOND: The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
The name of its registered agent at such address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware ("Delaware Law").
FOURTH: This Corporation is authorized to issue two classes of stock to be
designated, respectively, "common stock" and "preferred stock." The total
number of shares which this Corporation is authorized to issue is 150,000,000
shares. 145,000,000 shares shall be common stock (the "Common Stock").
5,000,000 shares shall be preferred stock (the "Preferred Stock"). Each share
of Preferred Stock shall have a par value of $0.001, and each share of Common
Stock shall have a par value of $0.001.
The Preferred Stock may be issued from time to time in one or more series
pursuant to a resolution or resolutions duly adopted by the Board of Directors
(authority to do so being hereby expressly vested in the Board), and such
resolution or resolutions shall set forth the number of shares comprising each
such series, voting powers, full or limited or none, of each such series and
the designations, preferences and relative, participating, optional or other
special rights, and any qualifications, limitations or restrictions thereof,
of each such series. The Board of Directors is authorized to alter the
designation, rights, preferences, privileges and restrictions granted to or
imposed upon any wholly unissued series of Preferred Stock and, within the
limits and restrictions stated in any resolution or resolutions of the Board
of Directors originally fixing the number of shares constituting any series of
Preferred Stock, to increase or decrease (but not below the number of shares
of any such series then outstanding) the number of shares of any such series
subsequent to the issue of shares of that series.
FIFTH: The shares of Common Stock shall have those rights and privileges as
set forth in this Article FIFTH and as otherwise provided by law.
1. Dividends. Subject to any rights of any series of Preferred Stock as may
then be outstanding, dividends or distributions upon the Common Stock may be
declared by the Board of Directors and paid by the Board of Directors of the
Corporation from time to time in such amounts as the Board of Directors shall
determine, out of any source at the time lawfully available therefor.
A-1
<PAGE>
2. Rights Upon Liquidation or Dissolution. Subject to any rights of any
series of Preferred Stock as may then be outstanding, the holders of the
Common Stock shall be entitled to share ratably in the assets of the
Corporation available for distribution to the holders of Common Stock upon any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary, after payment or provision for the payment
of the debts and other liabilities of the Corporation.
3. Voting. Except as otherwise required by law, and subject to any rights of
any series of Preferred Stock as may then be outstanding, on all matters on
which the holders of Common Stock shall be entitled to vote each holder of
Common Stock shall be entitled to one (1) vote for each share of Common Stock
held of record by such holder.
SIXTH: Any action required or permitted to be taken at any annual or special
meeting of stockholders may be taken only upon the vote of stockholders at an
annual or special meeting duly noticed and called in accordance with Delaware
Law and may not be taken by written consent of stockholders without a meeting.
SEVENTH: The management of the business and the conduct of the affairs of
the Corporation shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be not
less than five (5) nor more than ten (10). Within the limits so specified, the
number of directors shall be fixed from time to time by the Board of Directors
pursuant to a resolution adopted by a majority of the entire Board of
Directors.
EIGHTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend
or repeal the Bylaws of the Corporation.
NINTH: The directors of the Corporation need not be elected by written
ballot unless a stockholder or stockholders holding a majority of the voting
power of the outstanding capital stock entitled to vote demands election by
written ballot at the meeting and before voting.
TENTH: Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in
the Bylaws of the Corporation.
ELEVENTH: Special meetings of the stockholders of the Corporation may be
called, for any purpose or purposes, by (i) the Chairman of the Board of
Directors, (ii) the Chief Executive Officer or (iii) the Board of Directors.
TWELFTH: 1. To the fullest extent permitted by the Delaware Law as the same
exists or as may hereafter be amended, a director of the Corporation shall not
be personally liable to the Corporation or its stockholders for monetary
damages for a breach of fiduciary duty as a director.
2. The Corporation may indemnify to the fullest extent permitted by law any
person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or investigative, by reason of the
fact that he, his testator or intestate is or was a director, officer or
employee of the Corporation or any predecessor of the Corporation or serves or
served at any other enterprise as a director, officer or employee at the
request of the Corporation or any predecessor to the Corporation.
3. Neither any amendment nor repeal of this Article TWELFTH, nor the
adoption of any provision of the Corporation's Certificate of Incorporation
inconsistent with this Article TWELFTH, shall eliminate or reduce the effect
of this Article TWELFTH, in respect of any matter occurring, or any action or
proceeding accruing or arising or that, but for this Article TWELFTH, would
accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
A-2
<PAGE>
THIRTEENTH: Meetings of stockholders may be held within or without the State
of Delaware, as the Bylaws may provide. The books of the Corporation may be
kept (subject to any provision contained under Delaware Law) outside of the
State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the Bylaws of the Corporation.
FOURTEENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner now or hereafter prescribed herein and under Delaware Law, except as
otherwise provided in article TWELFTH, and all rights conferred upon
stockholders herein are granted subject to this reservation."
Upon this Amended and Restated Certificate of Incorporation becoming
effective, each share of Class A common stock, par value $0.001 per share, of
the Corporation outstanding or held as treasury stock immediately prior
thereto shall be reclassified as and become one share of Common Stock, par
value $0.001 per share, of the Corporation, and each outstanding certificate
which theretofore represented shares of Class A common stock shall thereafter
represent a like number of shares of Common Stock.
THIRD: The foregoing amendment and restatement of the Amended and Restated
Certificate of Incorporation of the Corporation was duly adopted in accordance
with Section 242 and 245 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Modem Media . Poppe Tyson, Inc. has caused this
certificate to be executed by Sloane Levy, its General Counsel and Corporate
Secretary, this day of , 2000.
-------------------------------------
A-3
<PAGE>
Appendix B
CHARTER FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
OF MODEM MEDIA . POPPE TYSON, INC.
PURPOSE:
The Audit Committee will make such examinations as are necessary to monitor
the corporate financial reporting and the internal and external audits of
Modem Media . Poppe Tyson, Inc. and its subsidiaries (the "Company"), to
provide to the Board of Directors of the Company (the "Board") the results of
its examinations and recommendations derived therefrom, to outline to the
Board improvements made, or to be made, in internal accounting controls, to
nominate independent auditors, and to provide to the Board such additional
information and materials as it may deem necessary to make the Board aware of
significant financial matters that require Board attention.
In addition, the Audit Committee will undertake those specific duties and
responsibilities listed below and such other duties as the Board of Directors
from time to time may prescribe.
MEMBERSHIP:
The Audit Committee will consist of at least two (2) members of the Board, a
majority of whom shall be independent directors, in accordance with the rules
of the Nasdaq National Market. The members of the Audit Committee will be
appointed by and will serve at the discretion of the Board.
RESPONSIBILITIES:
The responsibilities of the Audit Committee shall include:
1. Reviewing on a continuing basis the adequacy of the Company's system of
internal controls;
2. Reviewing on a continuing basis the activities, organizational structure
and qualifications of the Company's internal audit function;
3. Reviewing the independent auditors' proposed audit scope and approach;
4. Conducting a post-audit review of the financial statements and audit
findings, including any significant suggestions for improvements
provided to management by the independent auditors;
5. Reviewing the performance of the independent auditors;
6. Recommending the appointment of independent auditors to the Board;
7. Reviewing fee arrangements with the independent auditors;
8. Reviewing before release the audited financial statements and
Management's Discussion and Analysis in the Company's annual report on
form 10-K;
9. Reviewing the unaudited quarterly operating results in the Company's
quarterly earnings release;
10. Overseeing compliance with SEC requirements for disclosure of auditors'
services and audit committee members and activities;
11. Reviewing management's monitoring of compliance with the Company's
standards of business conduct and with the Foreign Company Practices
Act;
12. Reviewing, in conjunction with counsel, any legal matters that could
have a significant impact on the Company's financial statements;
B-1
<PAGE>
13. Providing oversight and review of the Company's asset management
policies, including an annual review of the Company's investment
policies and performance for cash and short-term investments;
14. If necessary, instituting special investigations and, if appropriate,
hiring special counsel or experts to assist;
15. Reviewing related party transactions for potential conflicts of
interest; and
16. Performing other oversight functions as requested by the full Board.
In addition to the above responsibilities, the Audit Committee will
undertake such other duties as the Board delegates to it, and will report, at
least annually, to the Board regarding the Committee's examinations and
recommendations.
MEETINGS:
The Audit Committee will meet at least four (4) times each year. The Audit
Committee may establish its own schedule which it will provide to the Board in
advance.
The Audit Committee will meet separately with each of the Chief Executive
Officer and the Chief Financial Officer of the Company at least annually to
review the financial affairs of the Company. The Audit Committee will meet
with the independent auditors of the Company, at such times as it deems
appropriate, to review the independent auditors' examination and management
report.
REPORTS:
The Audit Committee will record its summaries of recommendations to the
Board in written form, which summaries will be incorporated as a part of the
minutes of the Board meeting at which those recommendations are presented.
MINUTES:
The Audit Committee will maintain written minutes of its meetings, which
minutes will be filed with the minutes of the meetings of the Board.
B-2
<PAGE>
[X] Please mark your votes as in this example.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE NOMINEES LISTED IN ITEM 1 AND FOR ITEMS 2 AND 3 .
1. Election of FOR WITHHELD
Directors [_] [_]
For, except vote withheld from the following nominee(s):
To elect the eight nominees for director of Modem Media. Poppe Tyson, Inc.
listed below:
Robert C. Allen, Robert H. Beeby, Donald M. Elliman, Jr., Gerald M. O'Connell,
Terry Peigh, Don Peppers, Donald Seeley, Joseph Zimmel
<TABLE>
<CAPTION>
<S> <C> <C> <C>
2. Proposal to ratify the appointment of Arthur Andersen LLP as the FOR AGAINST ABSTAIN
Company's independent auditors for 2000. [_] [_] [_]
3. Proposal to approve the proposed amendment to and restatement of the FOR AGAINST ABSTAIN
certificate of incorporation. [_] [_] [_]
4. In their discretion on such other business as may properly come before
the meeting or any adjournments thereof.
</TABLE>
Please sign exactly as your name appears on this card. When signing as attorney,
executor, administrator, trustee or guardian, please give full title. If shares
are held jointly, each holder must sign.
-----------------------------------
2000
-----------------------------------
SIGNATURE(S) DATE
Please complete, date, sign and mail this proxy promptly in the enclosed
postage-prepaid envelope.
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
<PAGE>
MODEM MEDIA . POPPE TYSON, INC.
230 East Avenue
Norwalk, Connecticut 06855
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Steven C. Roberts and Sloane Levy as proxies,
with power of substitution, to vote all shares of Modem Media . Poppe Tyson,
Inc. ("Modem Media") Class A common stock of the undersigned held as of April
28, 2000, at the Annual Meeting of Shareholders to be held at the Merritt 7
Corporate Park located at 301 Merritt 7 in Norwalk, Connecticut at 9:30 a.m. on
June 5, 2000, and at any adjournment thereof. If no direction is made as to the
manner of voting, the proxy will be voted for the nominees listed in Item 1 and
in favor of Items 2 and 3.
Should the undersigned be present and elect to vote at the Annual Meeting
or any adjournment thereof and after notification the Corporate Secretary of
Modem Media of the stockholder's decision to terminate this proxy, this proxy
shall be deemed terminated. This proxy may also be revoked by written notice to
the Corporate Secretary prior to the Annual Meeting.
Please sign and date this card on the reverse side and return promptly in
the envelope provided.
- -------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
DIRECTIONS TO THE ANNUAL MEETING OF SHAREHOLDERS
LOCATION: THE MERRITT 7 CORPORATE PARK
301 MERRITT 7
NORWALK, CT 06851
(203) 847-3311
FROM I-95
- ---------
EXIT 15 - TO ROUTE 7 CONNECTOR.
(ROUTE 7 TOWARDS DANBURY) AT END
OF CONNECTOR TAKE A RIGHT AT THE
LIGHT. GO DOWN THE HILL TO TRAFFIC
LIGHT. (DEPARTMENT OF MOTOR
VEHICLES WILL BE DIRECTLY IN FRONT
OF YOU). AT LIGHT TAKE A RIGHT ON
TO ROUTE 7 SOUTH. GO TO MERRITT
SEVEN BUILDINGS - #301
MERRITT PARKWAY (ROUTE 15):
- ---------------------------
EXIT 40B...MAKE RIGHT TURN ON TO
ROUTE 7 NORTH (TOWARDS DANBURY)
PROCEED 1/2 MILE...MERRITT 7 BUILDING #301
ON LEFT SIDE.
