<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
GETTY IMAGES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(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 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
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> 2
GETTY IMAGES, INC.
April 7, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of Getty Images, Inc. ("Getty Images" or the "Company") which will be held at
the headquarters of Getty Images, 701 North 34th Street, Suite 400, Seattle,
Washington 98103, on May 9, 2000, at 2:30 p.m. We hope that you will be able to
attend the Annual Meeting.
Details of the business to be conducted at the Annual Meeting are presented
in the attached Notice of Annual Meeting and Proxy Statement.
At the Annual Meeting, you will be asked to (i) elect two (2) Class III
Directors to serve three-year terms, (ii) ratify the appointment of
PricewaterhouseCoopers as independent auditors for the 2000 fiscal year, and
(iii) amend the Company's 1998 Stock Incentive Plan such that the maximum number
of shares of common stock that may be issued under the Plan is increased from
10,000,000 shares to 13,000,000 shares.
Whether or not you attend the Annual Meeting, it is important that your
shares be represented and voted at the meeting. After reading the enclosed Proxy
Statement, kindly complete, sign, date, and promptly return the enclosed proxy
in the enclosed postage-paid envelope. Returning the Proxy will not preclude you
from voting in person at the meeting should you later decide to attend.
Your management and the Board of Directors unanimously recommend that you
vote FOR all of the nominees for director and FOR the other proposals.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company.
Sincerely,
Mark H. Getty
Executive Chairman of the Board of
Directors
<PAGE> 3
GETTY IMAGES, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 9, 2000
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Getty Images, Inc., a Delaware corporation (the "Company"), will be
held at the headquarters of the Company, 701 North 34th Street, Suite 400,
Seattle, Washington, on Tuesday, May 9, 2000 at 2:30 p.m., local time, for the
following purposes:
1. To elect two (2) Class III directors to serve until the 2003 Annual
Meeting of Stockholders or until their respective successors are elected
and qualified;
2. To ratify the appointment of PricewaterhouseCoopers as independent
auditors of the Company for the fiscal year ending December 31, 2000;
3. To amend the Company's 1998 Stock Incentive Plan such that the maximum
number of shares that may be issued under the Plan is increased from
10,000,000 shares to 13,000,000 shares; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Only stockholders of record at the close of business on March 31, 2000 are
entitled to notice of, to attend and to vote at the Annual Meeting and any
adjournment or postponement thereof. Additional information regarding the
matters to be acted on at the Annual Meeting can be found in the accompanying
Proxy Statement.
By Order of the Board of Directors
Suzanne L. Page
Senior Vice President, General Counsel
and
Assistant Secretary
Seattle, WA
April 7, 2000
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON, WE URGE YOU TO COMPLETE, SIGN,
DATE, AND RETURN THE ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE. THIS WILL
ENSURE THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING. AN ADDRESSED ENVELOPE FOR
WHICH NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THAT
PURPOSE. SENDING IN YOUR PROXY WILL NOT PREVENT YOU FROM VOTING YOUR STOCK AT
THE ANNUAL MEETING IF YOU DESIRE TO DO SO, AS YOUR PROXY IS REVOCABLE AT YOUR
OPTION.
<PAGE> 4
GETTY IMAGES, INC.
701 N. 34th Street, Suite 400
Seattle, WA 98103
------------------------
PROXY STATEMENT
------------------------
GENERAL
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board of Directors") of Getty Images,
Inc., a Delaware corporation ("Getty Images" or the "Company"), from the holders
(the "Stockholders") of the issued and outstanding shares of common stock, par
value $0.01 per share (the "Common Stock"), of the Company, to be exercised at
the Annual Meeting of Stockholders (the "Annual Meeting") to be held at 2:30
p.m. on Tuesday, May 9, 2000, at the headquarters of Getty Images, located at
701 North 34th Street, Suite 400, Seattle, Washington.
The purpose of the Annual Meeting is to consider and act upon the following
proposals:
1. To elect two (2) Class III directors to serve until the 2003 Annual
Meeting of Stockholders or until their respective successors are elected
and qualified;
2. To ratify the appointment of PricewaterhouseCoopers as independent
auditors of the Company for the fiscal year ending December 31, 2000;
3. To amend the Company's 1998 Stock Incentive Plan such that the maximum
number of shares that may be issued under the Plan is increased from
10,000,000 shares to 13,000,000 shares; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
This Proxy Statement, the enclosed proxy card and the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999 are being mailed
to the stockholders entitled to vote at the meeting on or about April 7, 2000.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Secretary of the
Company a written notice of revocation or a duly executed proxy bearing a later
date, or by attending the Annual Meeting and voting in person.
RECORD DATE; VOTING SECURITIES
Stockholders of record as of the close of business on March 31, 2000 (the
"Record Date") will be entitled to notice of, to attend and to vote at the
Annual Meeting on the basis of one vote for each share held. At the close of
business on the Record Date, the Company had 48,653,886 shares of Common Stock
outstanding (the "Outstanding Common Stock") held of record by 256 stockholders.
VOTING AND SOLICITATION
The presence at the Annual Meeting, in person or by proxy, of Stockholders
entitled to cast a majority of the votes entitled to be cast by all the
Stockholders shall constitute a quorum for the transaction of business at the
Annual Meeting. Abstentions and broker non-votes (i.e., votes not cast by a
broker or other record holder in "street" or nominee name solely because such
record holder does not have discretionary authority to vote on the matter) will
be counted toward the presence of a quorum, but will not be counted for purposes
of determining the number of votes cast and therefore will not have any effect
on the results of the votes on the proposals. The election of directors
(Proposal No. 1) requires a plurality of the votes cast on the matter at the
Annual Meeting. The ratification of the appointment of PricewaterhouseCoopers as
independent auditors of the Company (Proposal No. 2) and the amendment of the
Company's 1998 Stock Incentive Plan (Proposal
<PAGE> 5
No. 3) requires the affirmative vote of Stockholders holding a majority of the
shares of outstanding Common Stock present or represented by proxy at the Annual
Meeting. Under the Delaware General Corporation Law ("DGCL"), holders of shares
of Outstanding Common Stock will not be entitled to appraisal rights with
respect to such shares with respect to any of the proposals.
The expense of preparing, printing and mailing this Proxy Statement will be
paid by the Company. In addition to solicitation by mail, directors, officers
and employees of the Company, without receiving any additional compensation, may
solicit proxies personally or by telephone or facsimile. To assist in the
solicitation process, the Company has engaged Corporate Investor Communications,
Inc. to request brokerage houses, banks and other custodians or nominees holding
stock in their names for others to forward proxy materials to their customers or
principals who are the beneficial owners of shares and will reimburse them for
their expenses in doing so. The Company does not anticipate that the costs and
expenses incurred in connection with this proxy solicitation will exceed those
normally expended for a proxy solicitation for those matters to be voted on in
the Annual Meeting.
This Proxy Statement is accompanied by a proxy card for use by the
Stockholders. The shares of Common Stock represented by a proxy card properly
executed, duly returned and not subsequently revoked will be voted at the Annual
Meeting as indicated or, if no instructions are given, in favor of all of the
nominees for director, Proposal No. 2, Proposal No. 3, and otherwise in
accordance with the judgment of the person or persons voting the proxy on any
other matter properly brought before the meeting. The Company does not presently
know of any other business which may come before the Annual Meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company has a classified Board of Directors, consisting of Class I
Directors, Class II Directors and Class III Directors, the members of which
serve staggered three-year terms. Effective at the time of the Annual Meeting
and until further action of the Board, the Board of Directors has set the number
of members of the Board of Directors at six, two of which are designated as
Class I directors, two as Class II directors and two as Class III directors. The
Company's Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") provides that the term of the Class III directors terminates on
the date of the Annual Meeting. Accordingly, the Stockholders, voting as a
class, have the right to elect two directors to serve until the date of the
annual meeting of Stockholders held in 2003 and until their respective
successors are duly elected and qualified. The terms of the Class I and Class II
directors will terminate on the date of the annual meeting of Stockholders in
the years 2001 and 2002, respectively.
The Board of Directors has nominated Jonathan D. Klein and Mark Torrance,
the Class III director nominees named below, to serve as Class III directors to
hold office until the annual meeting of Stockholders to be held in 2003 and
until their respective successors are duly elected and qualified. Mr. Klein and
Mr. Torrance are currently Class III directors of the Company. The remaining
four directors named below will continue in office. The Board of Directors does
not anticipate that either of these nominees will be unable or unwilling to
serve, but if either nominee should be unable or unwilling to serve, the proxies
will be voted for the election of such other person designated by the Board of
Directors. Set forth below is a brief description of the background of each
nominee for election as a director and each director continuing in office.
2
<PAGE> 6
NOMINEES FOR CLASS III DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS SINCE
---- --- ------------------------------------------ --------
<S> <C> <C> <C>
Jonathan D. Klein 39 Mr. Klein is a co-founder of Getty Images and has been 1998
(Class III) our Chief Executive Officer and a director since
February 1998. Mr. Klein served as Chief Executive
Officer and a director of Getty Communications plc from
April 1996 to February 1998. From March 1995 to April
1996, Mr. Klein served as the Joint Chairman of Getty
Communications plc. In 1993, Mr. Klein co-founded Getty
Investment Holdings L.L.C. and from 1993 to 1995,
together with Mr. Mark Getty, formulated and implemented
its strategy. From 1983 to 1993, Mr. Klein held various
positions at Hambros Bank Limited. Mr. Klein serves on
the board of Getty Investments L.L.C. ("Getty
Investments") and The Conservation Corporation.
Mark Torrance 53 Mr. Torrance has been our non-executive Vice Chairman 1998
(Class III) since September 1998 and a director since February 1998.
From February 1998 until September 1998, Mr. Torrance
served as our Co-Chairman. Mr. Torrance co-founded
PhotoDisc, Inc. in 1992 and served as its Chairman of
the Board and Chief Executive Officer from 1992 to
February 1998. Prior to founding PhotoDisc, Inc., Mr.
Torrance served as President of Muzak, Inc. from 1985 to
1987, and as President of Yesco from 1972 to 1985, both
of which are foreground music distribution companies.
Mr. Torrance also serves as a director of the Washington
Software Foundation, Atom Films Corporation and Vista
Corporation.
</TABLE>
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE ELECTION OF ALL OF THE NOMINEES TO THE BOARD OF DIRECTORS LISTED
ABOVE.
DIRECTORS CONTINUING IN OFFICE
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS SINCE
---- --- ------------------------------------------ --------
<S> <C> <C> <C>
James N. Bailey 53 Mr. Bailey has been a director since February 1998 and 1998
(Class I) served as a director of Getty Communications plc from
September 1996 to February 1998. Mr. Bailey is a founder
of Cambridge Associates, Inc., an investment consulting
firm, and has served as its President since its
inception in May 1973. He also serves on the board of
The Plymouth Rock Company, SRB Corporation, Inc., Direct
Response Corporation, Coolidge Investment Company Inc.,
Homeowners Direct Company and a number of not-for-profit
organizations, including the New England Aquarium.
Andrew S. Garb 57 Mr. Garb has been a director since February 1998, and 1998
(Class I) served as director of Getty Communications plc from May
1996 to February 1998. Mr. Garb also has served as a
director of Getty Investments and its predecessor, Getty
Investment Holdings L.L.C., since 1993. Mr. Garb is a
partner in Loeb & Loeb, L.L.P., a U.S. based law firm,
and was the firm's Managing Partner from 1986 to 1992.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS SINCE
---- --- ------------------------------------------ --------
<S> <C> <C> <C>
Christopher H. Sporborg 60 Mr. Sporborg has been a director since February 1998 and 1998
(Class II) served as a director of Getty Communications plc from
May 1996 to February 1998. From its inception in 1993
until April 1996, he served as a Chairman of Getty
Investment Holdings L.L.C. Mr. Sporborg held various
positions at Hambros Bank Limited from 1962 to 1998,
including deputy chairman of Hambros PLC and Chairman of
Hambros Insurance Services Group PLC. Among other
positions, Mr. Sporborg is founder and Chairman of
Hambros Countrywide Assured PLC. He is currently
chairman of Atlas Copco PLC and Racecourse Holdings
Trust Ltd. and is a director of Lindsey Morden Group
Inc.
Mark H. Getty 39 Mr. Getty is a co-founder of Getty Images and has been 1998
(Class II) our Executive Chairman since September 1998 and a
director since February 1998. Mr. Getty served as
co-chairman and director from February 1998 until
September 1998. He served as Executive Chairman and a
director of Getty Communications plc, our predecessor,
from April 1996 to February 1998. From March 1995 to
April 1996, Mr. Getty served as the Joint Chairman of
Getty Communications plc. In 1993, Mr. Getty co-founded
Getty Investment Holdings L.L.C. and from 1993 to 1995,
together with Mr. Klein, formulated and implemented its
strategy. From 1990 to 1993, Mr. Getty worked at Hambros
Bank Limited. Mr. Getty serves on the board of directors
of The Conservation Corporation and is Chairman of Getty
Investments.
</TABLE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held ten meetings during 1999. Each member of the
Board of Directors attended at least 75% of the aggregate number of meetings of
the Board of Directors and the committees of which he was a member during the
last year, except for Mr. Sporborg. The Company has no nominating committee of
the Board of Directors.
The Company has an Audit Committee which consists of Messrs. Bailey, Garb
and Sporborg. The Audit Committee reviews the internal controls of the Company
and reviews the services performed and to be performed by the independent
auditors of the Company during the year. The members of the Audit Committee also
meet regularly with the independent auditors to review the scope and results of
the annual audit. The Audit Committee held four meetings during 1999.
The Company also has a Compensation Committee which consists of Messrs.
Bailey, Garb and Sporborg. The Compensation Committee reviews the compensation
of the senior officers of the Company, including executive bonus plan
allocations, and is responsible for the administration of the Getty Images, Inc.
1998 Stock Incentive Plan. The Compensation Committee held five meetings during
1999.
DIRECTOR COMPENSATION
Members of the Board of Directors did not receive any cash compensation in
connection with their service on the Board of Directors or any committee thereof
during fiscal 1999. Directors are reimbursed for their reasonable out-of-pocket
expenses incurred in connection with attendance at meetings of the Board of
Directors or any committee thereof.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of Messrs. Bailey, Garb or Sporborg is an executive officer of an
entity for which an executive officer of the Company during the last fiscal year
served as a member of a compensation committee or director.
4
<PAGE> 8
BUSINESS EXPERIENCE OF OTHER EXECUTIVE OFFICERS
Set forth below is certain information with respect to other current
executive officers of Getty Images:
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
---- --- ------------------------------------------
<S> <C> <C>
A. D. "Bud" Albers 36 Mr. Albers has been our Chief Technology Officer since
October 1999. Prior to joining us, Mr. Albers was
responsible for global technology strategies and
architectures, as well as enterprise applications for
Monsanto Corporation from November 1997 to October 1999.
From April 1996 through November 1997, he was the subsidiary
Vice President responsible for the technology, product
management and professional services functions for
Ameritech's Electronic Commerce Products Group. Mr. Albers
held senior roles as Vice President of Advanced Research and
Development and Vice President of Operations for NxTrend
Technologies from May 1992 through April 1996.
Nicholas Evans-Lombe 33 Mr. Evans-Lombe has been Senior Vice President, Strategy and
Corporate Development since February 1998 and served as the
Director of Strategy and Corporate Development of Getty
Communications plc from 1996 to February 1998. Prior to
joining Getty Communications plc in 1996, Mr. Evans-Lombe
held various positions in the corporate finance division at
Hambros Bank Limited from 1989 to December 1995. At Getty
Communications plc and Getty Images, he has been involved
with strategy, business development and acquisitions.
John Gonzalez 39 Mr. Gonzalez has been our Vice President, Strategic
Relations since March 1999. Prior to joining us, he was
responsible for business development at Creativepro.com
(formerly Extensis Corporation) from October 1997 through
February 1999. From October 1995 to October 1997, Mr.
Gonzalez consulted at a senior management level for InFocus
Systems, Sonus Corporation and Extensis Corporation. Prior
to 1995, Mr. Gonzalez managed various strategic and business
planning functions at InFocus Systems, Sequent Computer
Systems and Now Software.
John Hallberg 43 Mr. Hallberg has been Senior Vice President and General
Manager, gettyone, Americas since July 1999 and President of
Tony Stone Images North America since October 1998. From
September 1996 to October 1998, Mr. Hallberg served as
Senior Vice President of Worldwide Marketing for
Encyclopedia Britannica. From January 1995 until September
1996, he served as Senior Vice President of Client Services
for Information Resources, Inc. Prior to that time, he held
various executive positions at General Mills.
Suzanne L. Page 33 Ms. Page joined Getty Images in December 1998 and is Senior
Vice President, General Counsel and Assistant Secretary.
Prior to joining us, Ms. Page was associated with the law
firm of Seyfarth, Shaw, Fairweather & Geraldson from October
1995 through July 1998 and before that the law firm of
Hinshaw & Culbertson.
Stephen M. Powell 47 Mr. Powell is the President of our Press and Editorial
Division. Prior to that Mr. Powell served as the Chief
Executive Officer of Allsport Photographic plc. Mr. Powell
helped establish Allsport Photographic plc in 1971, which we
acquired in February 1998.
Christopher J. Roling 39 Mr. Roling has been our Senior Vice President, Finance and
Chief Financial Officer since January 1999. Prior to joining
us, Mr. Roling served as Chief Financial Officer of The
Kellogg Company for its Europe, Africa and Middle East
regions from August 1996 to January 1999. From May 1995 to
August 1996, Mr. Roling served as the Vice President of
International Business Development for R.J. Reynolds
International and from 1993 to May 1995 served as the Chief
Financial Officer for Northern Europe of Pepsico
International.
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
NAME AGE BUSINESS EXPERIENCE DURING PAST FIVE YEARS
---- --- ------------------------------------------
<S> <C> <C>
Sally von Bargen 51 Ms. von Bargen is the President of our Creative Professional
Division. Ms. von Bargen served as President of PhotoDisc,
Inc. since February 1998 and served as its Senior Vice
President of Sales and Service from March 1997 to February
1998. Ms. von Bargen served as a director of PhotoDisc, Inc.
from 1992 to August 1996, and as an advisor and consultant
to the chief executive officer and president from September
1995 to March 1997. She was also a senior management
consultant with Satellite Market Resources from December
1993 to December 1995.
</TABLE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
PricewaterhouseCoopers, chartered accountants, served as independent
auditors of the Company for the fiscal year ended December 31, 1999. The Board
of Directors, acting upon the recommendation of the Audit Committee, has
appointed PricewaterhouseCoopers as independent auditors to audit the financial
statements of the Company for the fiscal year ending December 31, 2000 and to
perform other appropriate accounting services. A proposal will be presented at
the Annual Meeting to ratify the appointment of PricewaterhouseCoopers as the
Company's independent auditors. A representative of PricewaterhouseCoopers will
be present at the Annual Meeting and will have the opportunity to make a
statement if the representative so desires and to respond to appropriate
questions from the Stockholders. If the Stockholders do not ratify this
appointment, the Board of Directors will reconsider its appointment.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS AS
INDEPENDENT AUDITORS OF THE COMPANY.
PROPOSAL NO. 3
AMENDMENT OF THE COMPANY'S 1998 STOCK INCENTIVE PLAN TO INCREASE THE MAXIMUM
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UNDER THE PLAN
Our current 1998 Stock Incentive Plan (the "Plan") provides that the number
of shares of Common Stock that may be issued under the Plan pursuant to awards
in the form of stock options, stock appreciation rights, stock awards,
performance share awards, Section 162(m) awards or other awards determined by
the Committee ("Awards") shall not exceed, in the aggregate, 10,000,000 shares.
The Board of Directors has proposed an amendment of the Plan (the "Amendment"),
to increase the number of shares of Common Stock issuable under the Plan. The
Stockholders are being asked to approve the Amendment in accordance with
Delaware law.
The following is the text of the applicable portion of Section 5 of the
Plan, as proposed to be amended by the Amendment:
"Subject to adjustment as provided in Section 15(b) hereof, the number
of shares of Common Stock that may be issued under the Plan pursuant to
Awards shall not exceed, in the aggregate, 13,000,000 shares (the "Section
5 Limit"), of which the number of shares of Common Stock that may be issued
under the Plan pursuant to Incentive Stock Options may not exceed, in the
aggregate, 9,000,000 shares."
The purpose of the Amendment is to allow us to have a sufficient number of
issuable shares under the Plan which can be issued in connection with such
corporate purposes as may, from time to time, be considered advisable by the
Compensation Committee. Having such shares available for issuance under the Plan
in the future will give us greater flexibility and will allow such shares to be
issued as determined by the Compensation Committee without the expense and delay
of a special stockholders' meeting to approve such additional shares to be
issued.
6
<PAGE> 10
The increase in the maximum number of Common Stock issuable under Plan will
not have any immediate effect on the rights of existing stockholders. However,
to the extent that the additional authorized shares issuable under Plan are
issued in the future, they will decrease the existing stockholders' percentage
equity ownership and, depending upon the price at which they are issued as
compared to the price paid by existing stockholders for their shares, could be
dilutive to our existing stockholders. The holders of Common Stock have no
preemptive rights.
REQUIRED VOTE
APPROVAL OF PROPOSAL NO. 3 REQUIRES THE AFFIRMATIVE VOTE OF A MAJORITY OF
THE OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY ENTITLED TO VOTE AT THE
ANNUAL MEETING.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE
"FOR" THE AMENDMENT OF THE COMPANY'S 1998 STOCK INCENTIVE PLAN TO INCREASE THE
MAXIMUM NUMBER OF SHARES OF COMMON STOCK ISSUABLE UNDER THE PLAN.
OTHER MATTERS
The Company knows of no other matters to be presented at the Annual Meeting
other than those described in this Proxy Statement. In the event that other
business properly comes before the meeting, the persons named as proxies will
have discretionary authority to vote the shares represented by the accompanying
proxy in accordance with their own judgment.
7
<PAGE> 11
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF
PRINCIPAL STOCKHOLDERS, DIRECTORS AND MANAGEMENT
The following table sets forth certain information with respect to
beneficial ownership of shares of the Company's Common Stock as of March 1, 2000
for (i) each person who is known by the Company to own beneficially more than 5%
of the outstanding shares of Common Stock, (ii) each director of the Company,
(iii) each of the executive officers of the Company named in the Summary
Compensation Table of this Proxy Statement, and (iv) by all directors and
executive officers of the Company as a group.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
<TABLE>
<CAPTION>
PERCENT
NAMES NUMBER OF SHARES(1) OF CLASS
----- ------------------- --------
<S> <C> <C>
Getty Investments........................................ 10,755,247(2) 23.24
Pilgrim Baxter & Associates Ltd. ........................ 3,941,200 8.52
Waddell & Reed Investment Management Company............. 2,932,800 6.34
Mark Torrance............................................ 2,573,386(3) 5.56
Mark H. Getty............................................ 1,870,088(4) 4.04
Jonathan D. Klein........................................ 1,760,988(5) 3.80
Stephen M. Powell........................................ 587,727(6) 1.27
Sally von Bargen......................................... 117,440(7) *
Nick Evans-Lombe......................................... 64,450(8) *
Christopher Roling....................................... 21,875(9) *
John Gonzalez............................................ 13,542(10) *
Andrew S. Garb........................................... 10,000 *
John Hallberg............................................ 7,500(11) *
Christopher H. Sporborg.................................. 800 *
A.D. "Bud" Albers........................................ 0 *
James N. Bailey.......................................... 0 *
Suzanne L. Page.......................................... 0 *
All Executive Officers and Directors as a group (14
persons)............................................... 7,026,896(12) 15.18
</TABLE>
- ---------------
* Less than 1%
(1) Beneficial ownership represents sole or shared voting and investment power
and is defined by the Securities and Exchange Commission (the "Commission")
to mean generally the power to vote or dispose of securities, regardless of
economic interest. The numbers were calculated pursuant to Rule 13d-3(d) of
the Securities and Exchange Act of 1934, as amended. Under Rule 13d-3(d),
shares not outstanding which are subject to options, warrants, rights or
conversion privileges exercisable within 60 days are deemed outstanding for
the purpose of calculating the number and percentage owned by any other
person listed. Getty Images had 46,279,977 shares of Common Stock
outstanding as of March 1, 2000. To the Company's knowledge, the only
stockholders who beneficially owned more than 5% of the outstanding common
shares as of March 1, 2000, were Getty Investments, Pilgrim Baxter &
Associates Ltd., Waddell & Reed Investment Management Company and Mark
Torrance.
(2) Consists of shares beneficially owned or deemed to be owned beneficially by
Getty Investments as follows: 622,602 shares held by the October 1993 Trust
to which Getty Investments shares voting power with Mr. Getty pursuant to
the Getty Parties Shareholders' Agreement and 512,602 shares held by Abacus
Trust Company (Isle of Man) as Trustees of the J D Klein Family Settlement
(the "Klein Family Trust") as to which Getty Investments shares voting
power with Mr. Klein pursuant to the Getty Parties Shareholders' Agreement,
and 9,620,043 shares held directly by Getty Investments. The address of
Getty Investments is 1325 Airmotive Way, Suite 262, Reno, Nevada 89502.
8
<PAGE> 12
(3) Includes 430,000 shares of Common Stock issuable upon exercise of
outstanding options. Consists of shares beneficially owned or deemed to be
owned beneficially by Mr. Torrance as follows: 2,070,788 held by PDI,
L.L.C., a Washington limited liability company, 40,000 held by The Mark
Torrance Foundation, and 32,598 shares held directly by Mr. Torrance. Mr.
Torrance's business address is 80 S. Washington Street, Suite 303, Seattle,
WA 98104.
(4) Includes 1,247,486 shares of Common Stock issuable upon exercise of
outstanding options. Consists of shares beneficially owned or deemed to be
owned beneficially by Mr. Getty as follows: 622,602 shares held by October
1993 Trust, as to which Mr. Getty shares voting power with Getty
Investments pursuant to the Getty Parties Shareholders' Agreement. Mr.
Getty is one of six directors of Getty Investments.
(5) Includes 1,247,486 shares of Common Stock issuable upon exercise of
outstanding options. Consists of shares beneficially owned or deemed to be
owned beneficially by Mr. Klein as follows: 512,602 shares held by the
Klein Family Trust as to which Mr. Klein shares voting power with Getty
Investments pursuant to the Getty Parties Shareholders' Agreement, and 900
shares held directly by Mr. Klein. Mr. Klein disclaims beneficial ownership
of 900 shares in favor of his children. Mr. Klein is one of six directors
of Getty Investments.
(6) Includes 12,500 shares of Common Stock issuable upon exercise of
outstanding options. Consists of 575,227 shares held by the Stephen Michael
Powell Family Trust.
(7) Includes 60,875 shares of Common Stock issuable upon exercise of
outstanding options.
(8) Includes 59,240 shares of Common Stock issuable upon exercise of
outstanding options.
(9) Consists of 21,875 shares of Common Stock issuable upon exercise of
outstanding options.
(10) Consists of 13,542 shares of Common Stock issuable upon exercise of
outstanding options.
(11) Consists of 7,500 shares of Common Stock issuable upon exercise of
outstanding options.
(12) Includes 3,100,504 shares of Common Stock issuable upon exercise of
outstanding options.
9
<PAGE> 13
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
paid or earned for all services rendered to Getty Images, Inc. or Getty
Communications plc in all capacities during the fiscal years ended December 31,
1999, 1998 and 1997, respectively, by our chief executive officer, our four
other most highly compensated executive officers and additional officers for
whom disclosures would have been provided but for the fact that the individuals
were not serving as executive officers at the end of the last completed fiscal
year, whose total annual salary and bonus exceeded $100,000, based on salary and
bonuses earned during the fiscal years ended December 31, 1999, 1998 and 1997,
respectively (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE(1)
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
----------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(6) BONUS(6)(7) OPTIONS(#) COMPENSATION(6)(8)
--------------------------- ---- --------- ----------- ------------ ------------------
<S> <C> <C> <C> <C> <C>
Jonathan D. Klein.................... 1999 $355,976 $224,250(9) 1,613,985 $194,356(10)
Chief Executive Officer 1998 356,982 224,750 675,000 79,832
1997 228,831 156,875 -- 16,573
Mark H. Getty........................ 1999 343,904 224,250(9) 1,613,985 97,375(11)
Executive Chairman 1998 303,129 245,000 675,000 79,832
1997 228,831 155,018 -- 13,965
Christopher J. Roling(2)............. 1999 205,061 132,000 115,000 93,035(12)
Michel Bernard(3).................... 1999 250,000 50,000 30,997 90,494(13)
Former CEO, Liaison Agency Inc. 1998 225,000 40,000 25,000 43,296
1997 75,000 -- 23,998 26,340
Stephen M. Powell(4)................. 1999 239,080 78,625 90,000 29,464(14)
CEO, Allsport Photographic Limited 1998 213,628 14,429 -- 35,295
Sally von Bargen(5).................. 1999 235,365 75,000 183,167 11,692(15)
President, PhotoDisc, Inc. 1998 187,789 57,000 65,000 7,331
</TABLE>
- ---------------
(1) The cash compensation paid to certain of the Named Executive Officers was
paid in pounds sterling and has been converted into U.S. dollars on an
annual average basis. The exchange rates in U.S. dollars per pound sterling
based on the average of the noon buying rate in the City of New York for
cable transfers in pounds sterling as certified for customs purposes by the
Federal Reserve Bank of New York in effect on each day for the years ended
December 31, 1999, 1998 and 1997 were $1.62, $1.66 and $1.64, respectively.
(2) Mr. Roling became an executive officer in January 1999.
(3) Mr. Bernard became an executive officer on March 14, 1997 in connection
with our acquisition of Liaison Agency Inc. Mr. Bernard resigned from his
position with the Company on August 31, 1999.
(4) Mr. Powell became an executive officer on February 10, 1998 in connection
with our acquisition of Allsport Photographic plc.
(5) Ms. von Bargen became an executive officer on February 9, 1998 in
connection with our acquisition of PhotoDisc, Inc.
(6) The salary, bonus and other compensation information included herein for
1997 relates to salaries, bonuses and other compensation paid to Messrs.
Klein, Getty and Bernard as employees of Getty Communications plc.
(7) The amounts disclosed in the bonus column were awarded under the Getty
Communications plc Executive Bonus Plan for the year ended December 31,
1997, and under our Executive Bonus Plan for the years ended December 31,
1998 and December 31, 1999.
(8) The amounts disclosed in this column include contributions under our and
our subsidiaries' 401(k) and other defined contribution pension plans and
other miscellaneous benefits as described in the footnotes below.
10
<PAGE> 14
(9) The bonus amounts shown for 1999 in respect of Messrs. Klein and Getty were
not approved by the Compensation Committee until January 25, 2000 and were
not actually paid until February 2000. These executives were not entitled
to any minimum bonus amounts in 1999 under the terms of their respective
employment agreements.
(10) Represents $53,484 cash in lieu of monthly contributions to a pension plan
scheme, $48,414 in respect of a foreign service allowance, $43,125 as a
one-off relocation allowance, $21,412 for motor vehicle lease costs and
related expenses, $22,739 for closing costs and related expenses in
connection with the purchase of Mr. Klein's new home in Seattle (arising as
a result of his relocation from London), and $5,182 for health, life and
disability premiums.
(11) Represents $63,092 cash in lieu of monthly contributions to a pension plan
scheme, and $34,283 for motor vehicle lease costs and related expenses.
(12) Represents $13,082 for defined contribution pension plan payments and
401(k) contributions, $39,815 in respect of a foreign service allowance,
$25,390 as a one-off relocation allowance, $9,283 for motor vehicle lease
costs and related expenses, and $5,465 for health, life and disability
premiums.
(13) Represents $1,346 for 401(k) contributions, $46,154 in respect of accrued
vacation, $11,913 for motor vehicle lease costs and related expenses,
$25,615 for health, life and disability premiums, and $5,466 for mobile
phone expenses.
(14) Represents $26,565 for defined contribution pension plan payments, $2,576
for health, life and disability insurance premiums and $323 for mobile
phone expenses.
(15) Represents $3,483 for 401(k) payments, $7,429 for health, life and
disability insurance premiums, $540 for a bus allowance and $240 in respect
of a parking allowance.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning options
granted during 1999 to the Named Executive Officers during fiscal 1999 to
purchase shares of the Company's Common Stock. The Company has no outstanding
stock appreciation rights. In accordance with the rules of the Commission, the
table shows the hypothetical "gains" or "option spreads" that would exist for
the respective options based on assumed rates of annual stock price appreciation
of 5% and 10% from the date the options were granted over the full option term.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR
NUMBER OF PERCENT OF TOTAL OPTION TERM(1)
SECURITIES OPTIONS EXERCISE --------------------------
UNDERLYING GRANTED TO PRICE PER EXPIRATION FIVE PERCENT TEN PERCENT
NAME OPTIONS GRANTED(2) EMPLOYEES SHARE DATE 5% 10%
---- ------------------ ---------------- --------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Jonathan D. Klein..... 15,000 0.37% $19.07 10/22/09 $ 179,895 $ 455,890
Mark H. Getty......... 15,000 0.37 19.07 10/22/09 179,895 455,890
Christopher J.
Roling.............. 75,000 1.83 20.38 2/1/09 961,265 2,436,035
10,000 0.24 26.82 5/4/09 168,670 427,442
15,000 0.37 18.33 8/3/09 172,915 438,199
15,000 0.37 19.07 10/22/09 179,895 455,890
Michel Bernard........ -- -- -- -- -- --
Stephen M. Powell..... 50,000 1.22 23.32 4/9/09 733,291 1,858,304
25,000 0.61 18.32 7/6/09 288,034 729,934
15,000 0.37 19.07 10/22/09 179,895 455,890
Sally von Bargen...... 75,000 1.71 23.32 4/9/09 1,026,608 2,601,625
40,000 0.98 19.07 10/22/09 479,721 1,215,707
</TABLE>
- ---------------
(1) The value is based on the assumption that the price of the Company's Common
Stock appreciates at the rate shown (compounded annually) from the date of
grant to the expiration date. These numbers are
11
<PAGE> 15
presented in accordance with the requirements of the Commission and do not
reflect the Company's estimate of future stock price performance.
(2) These options granted under the Getty Images, Inc. 1998 Stock Incentive Plan
are scheduled to vest over a four-year period, 25% on the first anniversary
from the date of grant and monthly on a pro rata basis thereafter, and were
granted with an exercise price equal to the average of the high and low
prices of the Common Stock of the Company on the date of grant.
AGGREGATE OPTION EXERCISES IN 1999 AND VALUES AT YEAR-END 1999
The following table sets forth information regarding the number of shares
acquired and value realized for options exercised by the Named Executive
Officers during the year ended December 31, 1999, and the number and aggregate
dollar value of unexercised options held at the end of 1999:
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
EXERCISE REALIZED(2) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jonathan D. Klein......... -- $-- 1,120,487 493,498 $38,545,773 $15,577,825
Mark H. Getty............. -- -- 1,120,487 493,498 38,545,773 15,577,825
Christopher J. Roling..... -- -- -- 115,000 -- 3,262,925
Michel Bernard............ -- -- 29,123 -- 879,443 --
Stephen M. Powell......... -- -- -- 90,000 -- 2,488,700
Sally von Bargen.......... -- -- 37,959 145,208 1,230,825 3,965,642
</TABLE>
- ---------------
(1) Values are calculated for options that are "in-the-money" by subtracting the
exercise price per share of the option from the per share closing price of
Getty Images on December 31, 1999, which was $48.875.
(2) Value realized is calculated by subtracting the aggregate exercise price of
the options exercised from the aggregate market value of the shares of
Common Stock acquired on the date of exercise.
ARRANGEMENTS WITH NAMED EXECUTIVE OFFICERS
The Company has from time to time entered into employment and separation
agreements with certain of its executive officers. The Named Executive Officers
with whom the Company has such agreements, the date of the agreements and a
summary of such agreements are set forth in the following paragraphs.
Employment Agreement with Jonathan D. Klein. On February 9, 1998, the
Company entered into employment agreements with Jonathan D. Klein, pursuant to
which Mr. Klein has agreed to serve as the Chief Executive Officer of Getty
Images. One of Mr. Klein's agreements related to his services to be performed
for Getty Images outside of the United Kingdom and the other related to his
services to be performed for Getty Images in the United Kingdom. Upon Mr.
Klein's permanent relocation from the United Kingdom to Seattle, Washington on
June 1, 1999, the Company entered into a new employment agreement with Mr. Klein
which supersedes the prior employment agreements between the parties. The new
employment agreement with Mr. Klein is for a term commencing on June 1, 1999 and
continues until June 1, 2001. Thereafter, the term continues until either party
provides the other with at least twelve months' notice of its intent not to
renew the agreement.
During the term of the agreement, Mr. Klein will receive an annual base
salary of $373,750 (as may be increased from time to time) and will participate
in the Company's bonus plan pursuant to which he will have the opportunity to
earn up to 60% of his base salary as a bonus in each calendar year during the
term. On January 25, 2000, the Compensation Committee of Getty Images approved a
bonus for Mr. Klein for 1999 in the amount of $224,250. Mr. Klein's employment
agreement also provides him with certain other benefits, such as reimbursement
of relocation expenses, a supplemental pension program, and other welfare and
fringe benefits.
12
<PAGE> 16
In the event that Mr. Klein is terminated without "cause" or for
"disability" or resigns for "good reason" (as each such term is defined in his
employment agreement), he will receive (in addition to amounts accrued and
unpaid) a lump sum payment in an amount equal to his base salary, maximum bonus
and supplemental pension contributions for the remainder of the term of the
agreement. In the event of a change in control of Getty Images (as defined in
the Plan), Mr. Klein will have the right to resign his employment and receive a
lump sum payment in an amount equal to his base salary, maximum bonus and
supplemental pension contributions for the remainder of the term of the
agreement. In either of these circumstances, Mr. Klein and his eligible
dependents will continue to participate in the Company's medical benefit plans
for the longer of two years following the termination or resignation, as the
case may be, and the remainder of the term. In the event that any of the
payments to be made to Mr. Klein would constitute "excess parachute payments"
within the meaning of Section 280G of the U.S. Internal Revenue Code of 1986, as
amended (the "Code"), the aggregate amount of his parachute payments will be
reduced to $1.00 less than three times Mr. Klein's "base amount" (as defined
under Section 280G of the Code).
Employment Agreement with Mark H. Getty. Effective February 9, 1998, the
Company entered into an employment agreement with Mark H. Getty, pursuant to
which Mr. Getty has agreed to serve as the Co-Chairman (now serving as Chairman)
of the Board of Directors of Getty Images for a term commencing on February 9,
1998 and continuing until either party provides the other with at least twelve
months' notice of its intent not to renew the agreement, provided that neither
party may provide the other with a notice of termination prior to February 9,
2001.
During the term of the agreement, Mr. Getty will receive an annual base
salary of $275,000 (as may be increased from time to time) and will participate
in the Company's bonus plan pursuant to which he will have the opportunity to
earn up to 50% of his base salary as a bonus in each calendar year during the
term. Mr. Getty's employment agreement also provides him with certain other
benefits and perquisites, such as a supplemental pension program, a company car
and reimbursement of expenses associated therewith, and certain other welfare
and fringe benefits.
On February 8, 1999, the Compensation Committee approved an amendment to
Mr. Getty's employment agreement approving an increase in salary to $325,000 per
year and an increase in his bonus eligibility to 60% of annual salary, beginning
in fiscal year 1999. Further, the Compensation Committee approved a bonus for
Mr. Getty for 1998 in the amount of $245,000. At a Compensation Committee
meeting held on April 9, 1999, the Board of Directors approved an increase in
Mr. Getty's annual salary to $373,750. On January 25, 2000, the Compensation
Committee approved a bonus for Mr. Getty for 1999 in the amount of $224,250.
In the event that Mr. Getty is terminated without "cause" or for
"disability" or resigns for "good reason" (as each such term is defined in his
employment agreement), he will receive (in addition to amounts accrued and
unpaid) a lump sum payment in an amount equal to his base salary, maximum bonus
and supplemental pension contributions for the remainder of the term of the
agreement. In the event of a change in control of Getty Images (as defined in
the Stock Incentive Plan), Mr. Getty will have the right to resign his
employment and receive a lump sum payment in an amount equal to his base salary,
maximum bonus and supplemental pension contributions for the remainder of the
term of the agreement. In either of these circumstances, Mr. Getty and his
eligible dependents will continue to participate in the Company's medical
benefit plans for the longer of two years following the termination or
resignation, as the case may be, and the remainder of the term. In the event
that any of the payments to be made to Mr. Getty would constitute "excess
parachute payments" within the meaning of Section 280G of the Code, the
aggregate amount of his parachute payments will be reduced to $1.00 less than
three times Mr. Getty's "base amount" (as defined under Section 280G of the
Code).
Employment Agreement with Christopher Roling. Effective July 1, 1999, the
Company entered into an employment agreement with Christopher Roling, pursuant
to which Mr. Roling has agreed to serve as the Chief Financial Officer of Getty
Images for a term commencing on July 1, 1999 and continuing until it is
terminated by either party giving the other with at least six months' notice,
provided that neither party may provide the other with a notice of termination
prior to July 1, 2000.
13
<PAGE> 17
During the term of the agreement, Mr. Roling will receive a base salary of
$220,050 (as may be increased from time to time) and will participate in the
Company's bonus plan pursuant to which he will have the opportunity to earn
between 20% and 50% of his base salary as a bonus in each calendar year during
the term. On February 1, 2000, Mr. Roling's employment agreement was amended to
reflect an increase in Mr. Roling's annual salary to $275,000. Mr. Roling's
employment agreement also provides him with reimbursement of relocation
expenses, and certain other welfare and fringe benefits.
In the event that Mr. Roling is terminated without "cause" or for
"disability" or resigns for "good reason" (as each such term is defined in his
employment agreement) prior to July 1, 2000, he will continue to receive (in
addition to amounts accrued and unpaid) his base salary through July 1, 2000.
In the event that any of the payments to be made to Mr. Roling would
constitute "excess parachute payments" within the meaning of Section 280G of the
Code, the aggregate amount of his parachute payments will be reduced to $1.00
less than three times Mr. Roling's "base amount" (as defined under Section 280G
of the Code).
Employment Agreement with Stephen Powell. Effective February 9, 1998,
Allsport Photographic plc entered into an employment agreement with Stephen
Powell, pursuant to which Mr. Powell has agreed to serve as Chief Executive
Officer of the Allsport Group for a term commencing on the February 9, 1998 and
continuing for an initial period of 24 months and terminable thereafter by
either party by giving to the other at least twelve month's written notice of
its intent not to renew the agreement.
During the term of the agreement, Mr. Powell will receive a base salary of
L120,750 ($195,615 using an assumed exchange rate of $1.62) (as may be increased
from time to time by the Company) and will be entitled to participate in the
Company's bonus plan on such terms as the Company may in its absolute discretion
decide. At a Board Meeting held on April 9, 1999, the Board of Directors
approved an increase in Mr. Powell's annual salary to $227,330. Mr. Powell's
employment agreement also provides him with certain other benefits and
perquisites, such as a supplemental pension program, a company car and
reimbursement of expenses associated therewith, and certain other welfare and
fringe benefits.
Employment Agreement with Sally von Bargen. Effective February 9, 1998,
PhotoDisc, Inc. ("PhotoDisc") entered into an employment agreement with Sally
von Bargen, pursuant to which Ms. von Bargen agreed to serve as the Co-President
(presently serving as President) of PhotoDisc for a term commencing on February
9, 1998 and continuing until either party provides the other with at least six
months' written notice of its intent not to renew the agreement.
During the term of the agreement, Ms. von Bargen will receive a base salary
of $190,000 (as may be increased from time to time) and will participate in the
Company's bonus plan pursuant to which she will have the opportunity to earn up
to 30% of her base salary as a bonus in each calendar year during the term. At a
Board Meeting held on April 9, 1999, the Board of Directors approved an increase
in Ms. von Bargen's annual salary to $235,000. Ms. von Bargen's employment
agreement also provides her with certain other benefits and perquisites.
In the event that Ms. von Bargen is terminated without "cause" or resigns
for "good reason" (as each such term is defined in her employment agreement),
she will receive (in addition to amounts accrued and unpaid) a lump sum payment
in an amount equal to her base salary and accrued bonus up to and including the
date of termination, as well as any unreimbursed expenses. Ms. von Bargen and
her eligible dependents will also continue to participate in the Company's
health and medical benefit plans for the longer of one year following the
involuntary termination or the remainder of the term. In the event of
termination for disability, the Company must provide Ms. von Bargen with six
months' prior written notice, at which time Ms. von Bargen will be entitled to
receive, for the remainder of the term, her salary at the rate in effect prior
to such disability, plus her maximum bonus, less any amounts paid to her under
any disability plan of the Company. Ms. von Bargen and her eligible dependents
will continue to participate in the Company's medical benefit plans for the
remainder of the term. In the event that any of the payments to be made to Ms.
von Bargen would constitute "excess parachute payments" within the meaning of
Section 280G of the Code, the aggregate
14
<PAGE> 18
amount of her parachute payments will be reduced to $1.00 less than three times
Ms. von Bargen's "base amount" (as defined under Section 280G of the Code).
Separation Agreement with Michel Bernard. As of August 31, 1999, the
Company entered into a separation agreement with Michel Bernard, at which time
Mr. Bernard resigned from his position as Chief Executive Officer of Liaison
Agency, Inc. Pursuant to the separation agreement, Mr. Bernard received his base
salary through December 31, 1999 and his pro-rated bonus for 1999 in the amount
of $50,000. Mr. Bernard's then outstanding stock options continued to vest
through December 31, 1999. In addition, the vesting of select grants were
accelerated on December 31, 1999.
Until June 30, 2001, Mr. Bernard is eligible to continue to participate, at
the Company's expense, in the health and medical plans of the Company. In
addition, the Company is obligated to continue to pay for life insurance
coverage, the monthly costs for the lease of Mr. Bernard's car, monthly parking
and two mobile phones until June 30, 2001.
Mr. Bernard agreed to be available for consulting from January 1, 2000
through June 30, 2001. During the consulting period, Mr. Bernard will be paid a
reasonable consulting fee based on services performed.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Stockholders' Agreement. The Company and (i) the Getty Group (as
defined below) and (ii) the Torrance Group (as defined below) have entered into
a Stockholders' Agreement dated as of February 9, 1998 (the "Stockholders'
Agreement"), which, among other things, provides for representation on the
Company's Board of Directors and limits the rights of the parties thereto to
transfer their respective shares of Common Stock. Certain provisions of the
Stockholders' Agreement are described below. The "Getty Group" refers
collectively to Getty Investments, Mr. Mark H. Getty, Mr. Jonathan D. Klein,
Abacus Trust Company (Isle of Man) as Trustee of the J D Klein Family
Settlement, as successor by assignment from Crediton Limited (a trust
established by Mr. Klein) and the October 1993 Trust (a trust established by Mr.
Getty). The "Torrance Group" refers collectively to PDI, L.L.C., Mr. Mark
Torrance, Ms. Wade Ballinger (Torrance) and certain of their family members. The
Getty Group together with the Torrance Group are collectively the "Significant
Stockholders".
Pursuant to the Stockholders' Agreement, no Significant Stockholder may
sell, encumber or otherwise transfer such Significant Stockholder's shares of
Common Stock except (i) to a Permitted Transferee (as defined below); (ii)
pursuant to the terms of the Stockholders' Agreements; (iii) subject to the
arrangements within their respective "Group", pursuant to a registered public
offering of shares of Common Stock in which to the knowledge of such significant
stockholder no person or "Group" will purchase more than 5% of the then
outstanding shares of Common Stock; or (iv) subject to any arrangements within
their respective "Group", sales within the Rule 144 volume limitation, or in a
cashless exercise of options. A "Permitted Transferee" is defined generally as
(i) Getty Images or its subsidiaries; (ii) in the case of any Significant
Stockholder who is a natural person, a person to whom shares of Common Stock are
transferred from such Significant Stockholder by gift, will or the laws of
descent and distribution; (iii) any other member of the Getty Group or the
Torrance Group, as the case may be; (iv) any affiliate of any Significant
Stockholder; or (v) with respect to the taking of an encumbrance, any commercial
bank or other financial institution that lends funds to a Significant
Stockholder on condition of taking such encumbrance.
If any Significant Stockholder (a "Prospective Seller") receives from or
negotiates with a person, other than a Permitted Transferee or another
Significant Stockholder (a "Stockholders' Agreement Third Party"), a bona fide
offer to purchase any or all of such Prospective Seller's shares of Common Stock
(the "Offered Stock") and such Prospective Seller intends to sell the Offered
Stock to such Stockholder's Agreement Third Party, the Prospective Seller must
provide written notice (the "Offer Notice") of such offer to Getty Images and
the other Significant Stockholders constituting the Significant Stockholders'
"Group" in which the Prospective Seller does not belong. The Offer Notice will
constitute an offer by such Prospective Seller to sell to the recipients of such
Offer Notice all (but not less than all) of the Offered Stock at the price per
share of Common Stock at which the sale to the Stockholders' Agreement Third
Party is proposed to be made in cash
15
<PAGE> 19
and will be irrevocable for ten days after receipt of such Offer Notice. The
Prospective Seller has the right to reject any or all of the acceptances of the
offer to sell the Offered Stock and sell all, but not less than all, the Offered
Stock to the Stockholders' Agreement Third Party if (i) the Prospective Seller
has not received acceptances as to all the Offered Stock prior to the expiration
of the ten-day period following receipt of the Offer Notice or (ii) an accepting
party fails to consummate the purchase of the Offered Stock and neither Getty
Images nor the other Significant Stockholders who received the Offer Notice are
prepared to purchase such Offered Stock within five business days of receiving
notice of such failed purchase.
Each of the Torrance Group and Getty Group will have the right, subject to
termination conditions, to nominate one director. For so long as the Getty Group
has the right to nominate one director of Getty Images, it shall also have the
right to appoint the Chairman from among the directors of Getty Images, provided
however, that for so long as either Mark Torrance or Mark Getty is the Chairman
or Co-Chairman of the Board, such rights shall not be in effect.
The obligations and rights of the Significant Stockholders relating to the
rights of first refusal and right to nominate one director will terminate when
the Getty Group or the Torrance Group, as the case may be, and any of such
Group's Permitted Transferees, collectively beneficially own fewer than the
greater of (x) 3,000,000 shares of Common Stock and (y) such number of shares of
Common Stock as is equal to two percent or less of the then outstanding shares
of Common Stock.
The Registration Rights Agreements. In connection with the consummation of
the merger of the businesses of Getty Communications and PhotoDisc (the
"Transactions"), Getty Images entered into Registration Rights Agreements, one
with PDI, L.L.C. and Mr. Mark Torrance (the "PDI Shareholders") and a second
with Getty Investments. Pursuant to the terms of the Registration Rights
Agreement between Getty Images and the PDI Shareholders (the "PDI Registration
Rights Agreement"), the PDI Shareholders, subject to the terms and conditions
set forth in the PDI Registration Rights Agreement, may require Getty Images to
file a registration statement with respect to all or a portion of the PDI
Shareholders' shares of Common Stock (a "PDI Demand Right"), subject to certain
limitations that may be imposed by the managing underwriter. The PDI
Shareholders have a total of five Demand Rights, provided that the PDI
Shareholders may not require the Company to file a registration statement on a
"long form" on more than three occasions. In addition to their PDI Demand
Rights, the PDI Shareholders have the right to have any or all of their shares
of Common Stock included in any registration by Getty Images with respect to an
offering of Common Stock (a "PDI Piggy-Back Right"), subject to certain
limitations that may be imposed by the managing underwriter. Both the PDI Demand
Rights and PDI Piggy-Back Rights will terminate on the earlier of (i) the date
that all of the PDI Shareholders' shares of the Common Stock can be sold within
a three-month period under the volume limitation of Rule 144(e) of the
Securities Act or (ii) the 15th anniversary of the date of the PDI Registration
Rights Agreement.
Pursuant to the terms of the Registration Rights Agreement between Getty
Images and Getty Investments (the "Getty Investments Registration Rights
Agreement"), Getty Investments, subject to the terms and conditions set forth in
the Getty Investments Registration Rights Agreement, may require Getty Images to
file a registration statement with respect to all or a portion of Getty
Investments' shares of Common Stock (a "Getty Demand Right"), subject to certain
limitations that may be imposed by the managing underwriter. Getty Investments
has five Getty Demand Rights. In addition to their Getty Demand Rights, Getty
Investments has the right to have any or all of their shares of Common
Stockholder included in any registration by Getty Images with respect to an
offering of Common Stock (a "Getty Piggy-Back Right"), subject to certain
limitations that may be imposed by the managing underwriter. Both the Getty
Demand Rights and the Getty Piggy-Back Rights will terminate on the earlier of
(i) the date that all of the shares of Common Stock held by Getty investments
can be sold within a three-month period under the volume limitation of Rule
144(e) of the Securities Act or (ii) the 15th anniversary of the date of the
Getty Investments Registration Rights Agreement.
The Getty Investments Registration Rights Agreement was amended on November
22, 1999 to include the right to register an additional 1,579,353 shares of
Common Stock that were acquired by Getty Investments on November 22, 1999.
16
<PAGE> 20
In addition to the registration rights described above, upon the
consummation of the Transactions, Getty Images assumed the obligations of Getty
Communications and PhotoDisc with respect to certain demand and piggy-back
registration rights granted by the companies to certain of their respective
shareholders, including, in the case of PhotoDisc, certain registration rights
granted to holders of its Series A Preferred Stock, and, in the case of Getty
Communications, certain registration rights granted to the October 1993 Trust
and the Klein Family Trust, Messrs. Getty and Klein, RIT Capital Partners, Mr.
Stone, Mr. Lawrence Gould and The Schwartzberg Family L.P.
Getty Parties Shareholders' Agreement. Getty Images, Getty Investments,
Mark Getty, Jonathan Klein, the October 1993 Trust and the Klein Family Trust
(as assigned from Crediton Limited) have entered into a Shareholders' Agreement
with respect to their ownership of shares of Common Stock (the "Getty Parties
Shareholders' Agreement"). Certain provisions of the Getty Parties Shareholders'
Agreement are described below.
The Getty Parties Shareholders' Agreement provides that all the Common
Stock held by the parties thereto (other than the Company, Mark Getty and
Jonathan Klein) will be voted as directed by the board of directors of Getty
Investments. Before transferring shares (other than certain permitted transfers
to affiliates or family members who, as a condition of such permitted transfer,
must agree to be bound by the terms of the Getty Parties Shareholders'
Agreement), the parties other than the Company must first offer such shares to
the other parties. The price at which such shares must be offered is either the
price that another purchaser is willing to pay for such shares or, in the event
of a transfer pursuant to an exercise of registration rights, the average
closing market price of the shares of Common Stock over the preceding ten
business days. In the event that these rights of first refusal are not exercised
with respect to all shares of Common Stock offered for sale, then the rights of
first refusal in the Getty Parties Stockholders' Agreement will apply.
In the Getty Parties Shareholders' Agreement, the October 1993 Trust and
the Klein Family Trust have each agreed to retain at least 311,301 shares of
Common Stock until July 8, 2001 and thereafter to retain at least 155,651 for an
additional two years, provided, however, that the October 1993 Trust and the
Klein Family Trust may sell shares in the event that (i) Mr. Mark Getty (in the
case of the October 1993 Trust) or Mr. Jonathan Klein (in the case of the Klein
Family Trust) ceases to be employed by the Company or any of its subsidiaries,
or (ii) Getty Investments and its members cease at any time to hold at least 7%
of the then outstanding shares of Common Stock. In addition, if Getty
Investments or any of its members sells any shares of Common Stock, the October
1993 Trust and the Klein Family Trust will be permitted to sell the same
proportion of their shares of Common Stock that are subject to this sale
restriction as the number of shares of Common Stock sold by Getty Investments
bears to its total number of shares of Common Stock. The Getty Parties
Shareholders' Agreement provides that each of the October 1993 Trust and The
Klein Family Trust will, in consideration of its participation under such
agreement, receive an annual fee from Getty Investments in 1999 of L29,537 and
L102,324 ($47,850 and $165,765, respectively, using an assumed exchange rate of
$1.62), subject to certain inflation adjustments in the years subsequent to
1999.
The Getty Parties Shareholders' Agreement also provides that each of the
October 1993 Trust and the Klein Family Trust have the right to nominate a
director to the board of directors of Getty Investments (the "Getty Investments
Board"). Such parties have nominated Mr. Getty and Mr. Klein to the Getty
Investments Board. The October 1993 Trust also has the right to nominate the
chairman of the Getty Investments Board. The October 1993 Trust has appointed
Mr. Getty as Chairman of Getty Investments.
Getty Investments has agreed in the Getty Parties Shareholders' Agreement
that, subject to certain exceptions, it will not operate or own or control any
other business in the visual content industry.
The Getty Parties Shareholders' Agreement expires on July 7, 2003, but may
be terminated early with respect to a party (or its permitted transferees) who
ceases to be a stockholder of Getty Images. The Getty Parties Shareholders'
Agreement terminates for all parties if the parties to the agreement cease to
own beneficially fewer than the greater of (x) 3,000,000 shares of Common Stock
and (y) such number of shares as is equal to two percent or less of the then
outstanding shares of Common Stock.
17
<PAGE> 21
Getty Investments Company Agreement. Getty Investments is a limited
liability company organized in the State of Delaware and is governed by a
limited liability company agreement among four various Getty family trusts (the
"Getty Trusts") and Transon Limited (as assignee of 525 Investments Limited)
(the "Getty Investments Company Agreement"). As of March 1, 2000, the membership
interests of the Getty Trusts in Getty Investments were held as to 42.36% by The
Cheyne Walk Trust, as to 18.75% by the Ronald Family Trust A, as to 15.68% by
the Ronald Family Trust B and as to 12.5% by the Gordon P. Getty Family Trust.
The remaining 10.71% interest was held by Transon Limited. The four Getty Trusts
result from a partition in 1988 of the Sarah C. Getty Trust in accordance with a
1985 court order. Two of the four trustees of The Cheyne Walk Trust are also two
of the four trustees of the Ronald Family Trust B, two of the three trustees of
the Ronald Family Trust A are also two of the four trustees of the Ronald Family
Trust B. The life income beneficiaries of the four Getty Trusts referred to
above are children of J.P. Getty, and the remainder beneficiaries are his
grandchildren (including Mr. Mark Getty) and other descendants. Transon Limited
is a company owned by Sir Paul Getty, one of the children of J.P. Getty. Mr.
Mark Getty is the son of Sir Paul Getty.
The Getty Investments Company Agreement provides that the Getty Investments
Board consists of six directors. One director is appointed by each of the four
Getty Trusts. In addition, the members of Getty Investments have agreed to
appoint one person nominated by each of the October 1993 Trust and the Klein
Family Trust. The members also agree to appoint the director nominated by the
October 1993 Trust as the Chairman of the Board of Getty Investments. Mr. Getty
has been appointed a director and chairman by the October 1993 Trust and Mr.
Klein has been appointed a director by the Klein Family Trust. Decisions at
meetings of the Getty Investments Board require the approval (at a meeting or in
writing) of a majority of directors. Of the six members of the Getty Investments
Board, three (Mr. Getty, Mr. Klein and Mr. Garb) are also directors of Getty
Images. There are currently no voting arrangements whereby one member of Getty
Investments can control a majority of the members of the Getty Investments
Board.
Getty Trademarks. Getty Images, directly or through its subsidiaries, has
trademark registrations and applications for the trademarks and trademark
applications in respect of the names Getty Communications and Hulton Getty, and
derivatives thereof (including the name "Getty Images") and the related logos
(together, the "Getty Trademarks"). Getty Images and Getty Investments have
agreed that in the event that Getty Images becomes controlled by a third party
or parties not affiliated with the Getty family, Getty Investments will have the
right to call for an assignment to it, for a nominal sum, of all rights to the
Getty Trademarks. Upon such assignment, Getty Images will have 12 months in
which it will be permitted to continue to use the Getty Trademarks and
thereafter will have to cease such use.
1999 Private Placement. On October 26, 1999, Getty Images entered into an
agreement with Getty Investments providing for the purchase by Getty Investments
of 1,579,353 shares of Common Stock for $32.0 million in cash, or approximately
$20.261 per share. The purchase price was established by using the average of
the bid and ask price of the Common Stock on The Nasdaq National Market for the
ten trading day period ending on October 25, 1999. The purchase date occurred on
November 22, 1999.
Indemnification. Getty Images has agreed to indemnify Getty Investments and
its members for liabilities arising in connection with the merger of the
business of Getty Communications and PhotoDisc as well as various securities
offerings by the Company. In addition, Getty Images has entered into agreements
to indemnify its directors and certain executive officers, in addition to
indemnification provided for in the Company's Bylaws and Amended and Restated
Certificate of Incorporation. These agreements, among other things, indemnify
the Company's directors and certain executive officers for certain expenses
(including attorneys' fees), judgments, fines and settlement amounts incurred by
any such person in any action or proceeding, including any action by or in the
right of the Company, arising out of such person's services as a director or
executive officer of the Company, any subsidiary of the Company or any other
company or enterprise to which the person provides services at the request of
the Company. The Company believes that these provisions and agreements are
necessary to attract and retain qualified persons as directors and executive
officers.
18
<PAGE> 22
Bridge Loan to Roling. In connection with Christopher Roling's relocation
from London to Seattle, Getty Images agreed to provide a bridge loan to
Christopher Roling and Julie Roling (as husband and wife) to enable them to
purchase a home in Seattle while awaiting the sale of their home in London. The
loan was in the amount of $250,000, with an interest rate of eight percent (8%)
per annum. On May 19, 1999, the parties executed a promissory note which
required the principal amount and accrued interest to be payable on July 15,
1999. On July 1, 1999, Christopher Roling and Julie Roling repaid the entire
principal amount of the loan as well as accrued interest totaling $2,425.
Torrance Lease. PhotoDisc and the Marshall Building LLC, an entity of which
Mr. Torrance is the Manager, have entered into a lease under which PhotoDisc
leases the majority of the Marshall Building (46,957 total square feet). This
lease has a term of five years and four months (which may be extended for a
further five years at the option of PhotoDisc) beginning November 1, 1997,
provides for rent at the weighted average rate of $13.47 per square foot per
year, which the Company believes is a fair market rate, and under which Mr.
Torrance pays a monthly service and maintenance fee of $1,375. In addition,
PhotoDisc has made certain improvements to the Marshall Building in the amount
of approximately $360,000 for which it is being reimbursed by a reduction in
monthly lease payments ratably over the term of the lease. Interest on the
outstanding amount is charged at a rate of 5.77% per annum.
On June 1, 1999, PhotoDisc entered into a sublease agreement with Soma
Corporation (now known as CVS Washington, Inc.) to sublease 34,108 square feet
commencing on October 1, 1999, and an additional 3,281 square feet to commence
on June 1, 2000. The term of the sublease shall end on February 27, 2003. The
base rent for the sublease from October 1, 1999 through May 31, 2000 shall be
$41,963.
PhotoDisc paid an aggregate amount of $534,720 to Mr. Torrance for lease
payments in 1999.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION FOR 1999
Compensation Committee Governance. The Compensation Committee of Getty
Images was composed in 1998 of Messrs. Bailey, Garb and Sporborg. The
Compensation Committee is responsible for the general compensation policies of
the Company, and in particular is responsible for setting and administering the
policies that govern senior executive compensation and administering the
Company's equity-based employee compensation benefit plans. The Compensation
Committee evaluates the performance of the Chief Executive Officer and Executive
Chairman and reviews the compensation levels for all executive officers.
Compensation Policies. The primary objectives of the Company's compensation
policies and programs are (i) to attract and retain key executives, (ii) to
reward performance by the executives which benefits the Stockholders of Getty
Images and (iii) to align the financial interests of the Company's executive
officers directly with those of the Stockholders. The primary elements of
executive officer compensation are base salary, annual cash bonuses, and stock
option grants. The salary is based on factors such as related experience, level
of responsibility, and comparison to similar positions in comparable companies.
The annual cash bonuses are based on the Company's performance measured against
attainment of financial and other objectives, and on individual performance.
Stock option grants are intended to align the executive officer's interest with
those of the Stockholders, and are determined based on the executive officer's
level of responsibility, number of options or shares previously granted, and
contributions toward achieving the goals and objectives of the Company. The
compensation paid to Mr. Klein as Chief Executive Officer and to Mark Getty as
Executive Chairman were determined using the same criteria described above for
executive officers generally. Additional information on each of these
compensation elements follows.
- Salaries. Base salaries for the executive officers are based on
performance of the individual, increases in responsibility and salaries
for similar positions. Comparisons are made to the total compensation
packages of companies in the technology, internet, media and other
related industries that are comparable in size and structure. Base
salaries are generally in the range of median base salaries paid by such
comparable companies to employees having duties and responsibilities
similar to those of the executive officers.
19
<PAGE> 23
- Executive Bonus Plan. Annual bonuses are awarded on a discretionary basis
and reflect both Company and individual performance. The Compensation
Committee considers numerous qualitative and quantitative factors in
determining these bonus awards, including individual performance,
corporate and segment revenue and profit goals, performance and
compensation levels of comparable companies.
- Option Grants. Stock options are an integral part of executive officers
compensation and are utilized by the Company to provide an incentive to
the officer, and to align the interests of the executive with those of
the Stockholders by providing him with a financial interest in the
Company. In making grants, the Compensation Committee takes into account
the executive officer's contributions to the Company, scope of
responsibilities, salary and the number of options previously granted.
All options granted by Getty Images following the consummation of the
Transactions have been granted under, and governed by, the Plan, which was
adopted by the Company in connection with the Transactions. Options granted by
the Compensation Committee under the Plan have been made at fair market value
(based on the average of the high and low prices of the Company's Common Stock
on the date of grant), vest over a period of four years, 25% on the first
anniversary of the grant date and monthly on a pro rata basis thereafter, and
expire after ten years from the date of grant (with the exception of certain
options granted to executive officers upon the consummation of the Transactions
that became fully exercisable upon the first anniversary of the date of grant).
Section 162(m). The Company did not have the deductibility of any
compensation paid during 1999 disallowed under Section 162(m) of the Code.
COMPENSATION COMMITTEE,
Andrew S. Garb (Chairman)
Christopher H. Sporborg
James N. Bailey
20
<PAGE> 24
PERFORMANCE GRAPH
Set forth below is a graph comparing cumulative total stockholder returns
on the Common Stock, the Nasdaq Stock Market Index of U.S. Companies (the
"Nasdaq Market Index") and the S&P Photography/ Imaging Index (the "Image
Index"). The graph assumes that $100 was invested on July 2, 1996 (the date of
Getty Communications' initial public offering) in Getty Images (using Getty
Communications initial offering price of $10.00 per share), and no payment or
reinvestment of dividends, and is rounded to the nearest whole dollar. The stock
price performance on the following graph is not necessarily indicative of future
stock price performance.
<TABLE>
<CAPTION>
GETTY IMAGES NASDAQ MARKET INDEX IMAGE INDEX
------------ ------------------- -----------
<S> <C> <C> <C>
7/2/96 100 100 100
12/31/96 150 108 102
12/31/97 149 132 102
12/31/98 172 186 133
12/19/99 489 327 80
</TABLE>
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and persons who own more than 10% of
the Common Stock (collectively, "Reporting Persons") to file with the Commission
initial reports of ownership and changes in ownership of the Common Stock.
Reporting Persons are also required by Commission regulations to furnish the
Company with copies of all Section 16(a) reports they file.
To the Company's knowledge, based solely on its review of copies of such
reports received by the Company, or on written representations from certain
Reporting Persons that no other reports were required for such persons, the
Company believes that during fiscal year 1999, all Section 16(a) filing
requirements were satisfied on a timely basis, with the following exceptions:
(a) Bud Albers filed a late Form 3 in February 2000; (b) Suzanne Page filed a
late Form 3 in February 2000; (c) The Cheyne Walk Trust filed a late Form 4 in
February 2000 to report a distribution of Getty Images shares received from a
venture capital fund in December 1999; (d) PDI, L.L.C. filed a late Form 4 in
December 1999 to report sales of Getty Images securities in June 1999, and a
distribution of Getty Images securities in June 1999 to Wade Ballinger, a member
of PDI, L.L.C.; and (e) Mark Torrance filed a late Form 4 in December 1999 to
report sales of Getty Images securities in June 1999.
21
<PAGE> 25
PROPOSALS OF STOCKHOLDERS
Proposals of Stockholders intended to be presented at the 2001 Annual
Meeting of Stockholders must be received by the Secretary of the Company no
later than March 1, 2001 to be considered for inclusion in the Company's 2001
proxy materials. Such proposals must meet the requirements of the rules of the
Commission.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR ENDED
DECEMBER 31, 1999, CONTAINING INFORMATION ON OPERATIONS, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, IS AVAILABLE UPON REQUEST. PLEASE WRITE TO:
INVESTOR RELATIONS DEPARTMENT
GETTY IMAGES, INC.
701 N. 34TH STREET, SUITE 400
SEATTLE, WASHINGTON 98103
22
<PAGE> 26
[Proxy Card]
1. To elect two (2) Class III directors for three-year terms.
FOR all nominees listed below [ ]
WITHHOLD authority to vote for all nominees listed below [ ]
*EXCEPTIONS [ ]
Nominees: Jonathan D. Klein and Mark Torrance
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK
THE "EXCEPTIONS" BOX AND WRITE THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions ____________________________________________________________________
2. To ratify the appointment of PricewaterhouseCoopers as independent auditors
of the Company for the 2000 fiscal year.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To amend the Getty Images, Inc. 1998 Stock Incentive Plan, such that the
maximum number of shares of Common Stock that may be issued under the Plan is
increased from 10,000,000 shares to 13,000,000 shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Change of Address and or Comments Mark Here [ ]
This proxy card should be signed by the
stockholder(s) exactly as his or her name(s)
appear(s) hereon, dated and returned promptly in
the enclosed envelope. Persons signing in a
fiduciary capacity should so indicate. If shares
are held by joint tenants or as community
property, both persons should sign.
Dated:_______________________________, 2000
___________________________________________
Signature
___________________________________________
Signature
VOTES MUST BE INDICATED IN BLACK OR BLUE INK.
[X]
PLEASE VOTE, SIGN, DATE AND PROMPTLY RETURN THIS CARD.
================================================================================
GETTY IMAGES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 9, 2000
<PAGE> 27
The undersigned stockholder of Getty Images, Inc., a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement with respect to the Annual Meeting of Stockholders of Getty
Images, Inc. to be held at the headquarters of Getty Images, Inc. 701 North 34th
Street, Suite 400, Seattle, WA 98103, on May 9, 2000 at 2:30 p.m., and hereby
appoints Christopher J. Roling and Suzanne L. Page, and each of them, proxies
and attorneys-in-fact, each with power of substitution and revocation, and each
with all powers that the undersigned would possess if personally present, to
vote the Getty Images, Inc. Common Stock of the undersigned at such meeting and
any postponements or adjournments of such meeting, as set forth below, and in
their discretion upon any other business that may properly come before the
meeting (and any such postponements or adjournments).
THIS PROXY WILL BE VOTED AS SPECIFIED OR, IF NO CHOICE IS SPECIFIED, FOR THE
ELECTION OF THE NOMINEES, FOR PROPOSALS 1, 2 AND 3 AND AS SAID PROXIES DEEM
ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY
POSTPONEMENTS OR ADJOURNMENTS THEREOF.
IMPORTANT - TO BE SIGNED AND DATED ON REVERSE SIDE
GETTY IMAGES, INC.
P.O. BOX 11053
NEW YORK, N.Y. 10203-0053
2
