<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
THE KNOT, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
THE KNOT, INC.
462 BROADWAY, 6TH FLOOR
NEW YORK, NEW YORK 10013
April 18, 2000
To the Stockholders of
THE KNOT, INC.:
You are cordially invited to attend the Annual Meeting of Stockholders of
The Knot, Inc., to be held at the offices of Brobeck, Phleger & Harrison LLP,
1633 Broadway, 46th Floor, New York, New York 10019 on Tuesday, May 16, 2000 at
9:00 a.m.
Details of the business to be conducted at the Annual Meeting are given in
the attached Notice of Annual Meeting and Proxy Statement which you are urged to
read carefully.
If you do not plan to attend the Annual Meeting, please sign, date, and
return the enclosed proxy promptly in the accompanying reply envelope. If you
decide to attend the Annual Meeting and wish to change your proxy vote, you may
do so automatically by voting in person at the Annual Meeting.
We look forward to seeing you at the Annual Meeting.
[David Liu sig]
DAVID LIU
President, Chief Executive Officer and
Chairman of the Board
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, YOU ARE
REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
AND RETURN IT IN THE ENCLOSED ENVELOPE (TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES).
<PAGE> 3
THE KNOT, INC.
462 BROADWAY, 6TH FLOOR
NEW YORK, NEW YORK 10013
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 2000
------------------------
To the Stockholders of
THE KNOT, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of The Knot,
Inc. ("The Knot" or the "Company") will be held at the offices of Brobeck,
Phleger & Harrison LLP, 1633 Broadway, 46th Floor, New York, New York 10019 on
Tuesday, May 16, 2000 at 9:00 a.m. (the "Annual Meeting") to consider and vote
upon the following matters, which are more fully described in the accompanying
Proxy Statement:
1. To elect two (2) directors to the class of directors whose term
expires in 2003. The Board has nominated the following persons for
re-election at the Annual Meeting: John Link and Ann Winblad;
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the fiscal year ending December 31, 2000;
and
3. To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. All stockholders of record at the close of
business on April 4, 2000 will be entitled to vote at the Annual Meeting and at
any adjournment thereof. The stock transfer books of the Company will remain
open between the record date and the date of the meeting. A list of stockholders
entitled to vote at the Annual Meeting will be available for inspection at the
offices of the Company.
By Order of the Board of Directors
[Richard Szefc sig.]
RICHARD SZEFC, Secretary
April 18, 2000
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
<PAGE> 4
THE KNOT, INC.
462 BROADWAY, 6TH FLOOR
NEW YORK, NEW YORK 10013
------------------------
PROXY STATEMENT
------------------------
GENERAL
This Proxy Statement is furnished to the holders of common stock, par value
$0.01 per share (the "Common Stock") of The Knot, Inc., a Delaware corporation
("The Knot" or the "Company") in connection with the solicitation by the Board
of Directors (the "Board") of The Knot, for use at the annual meeting of
stockholders to be held on May 16, 2000, and at any adjournment or postponement
of the annual meeting (the "Annual Meeting"). The Annual Meeting will be held at
the offices of Brobeck, Phleger & Harrison LLP, 1633 Broadway, 46th Floor, New
York, New York 10019 on Tuesday, May 16, 2000 at 9:00 a.m. All stockholders of
record on April 4, 2000 will be entitled to notice of and to vote at the Annual
Meeting. The Company intends to mail this Proxy Statement and the accompanying
proxy (the "Proxy") to stockholders on or about April 19, 2000.
The mailing address of the principal executive office of the Company is 462
Broadway, 6th Floor, New York, New York 10013.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice of Annual Meeting of
Stockholders (collectively, the "Proposals"). Each Proposal is described in more
detail in this Proxy Statement.
VOTING
On April 4, 2000, the record date for determination of stockholders
entitled to vote at the Annual Meeting, there were 14,522,612 shares of Common
Stock outstanding held by 49 stockholders of record. A list of stockholders
eligible to vote at the Annual Meeting will be available for inspection at the
Annual Meeting and, prior thereto, during regular business hours at the
principal executive office of the Company at the address specified above. You
are entitled to one vote for each share of common stock you hold.
The holders of a majority of the stock issued and outstanding and entitled
to vote, present in person or by proxy, shall constitute a quorum at the Annual
Meeting. Abstentions and broker non-votes will be counted for purposes of
determining whether a quorum is present at the Annual Meeting and abstentions
will have the effect of negative votes. "Broker non-votes" are shares held by
brokers or nominees which are present in person or represented by proxy, but
which are not voted on a particular matter because instructions have not been
received from the beneficial owner.
PROXIES
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted FOR the election of
the directors proposed by the Board and FOR the approval of Ernst & Young LLP as
the Company's independent auditors.
Any person giving a Proxy has the power to revoke it at any time before its
exercise. It may be revoked by:
- notifying the Secretary of The Knot in writing before the Annual Meeting;
- delivering to the Secretary of The Knot before the Annual Meeting a
signed proxy with a later date; or
- attending the Annual Meeting and voting in person.
<PAGE> 5
SOLICITATION
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the Proxy
and any additional soliciting materials furnished to stockholders. Copies of
solicitation materials will be furnished to brokerage houses, fiduciaries and
custodians holding shares in their names that are beneficially owned by others
so that they may forward the solicitation materials to such beneficial owners.
In addition, the Company may reimburse such persons for their costs of
forwarding the solicitation materials to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by solicitation by
telephone, telegram or other means by directors, officers, employees or agents
of the Company. No additional compensation will be paid to these individuals for
any such services. Except as described above, the Company does not presently
intend to solicit proxies other than by mail.
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Amended and Restated Certificate of Incorporation, as amended
(the "Certificate of Incorporation"), provides for a classified Board consisting
of three classes of directors serving staggered three year terms. These classes
are required to be as nearly equal in number as possible. The Amended and
Restated Bylaws of the Company provide for a Board consisting of such number of
directors as may be fixed from time to time by resolution of the members of the
Board or by the stockholders at an annual meeting of stockholders of the
Company. Two directors are to be elected at the Annual Meeting for a term
expiring at the 2003 annual meeting of stockholders or until their successors
have been duly elected and qualified.
The Board has nominated John Link and Ann Winblad to stand for re-election
to the class of directors whose term expires at the 2003 annual meeting of
stockholders or until their successors are elected and have qualified. Each
person nominated for re-election has agreed to serve if elected, and management
has no reason to believe that any nominee will be unavailable to serve. In the
event any of the nominees is unable or declines to serve as a director at the
time of the Annual Meeting, the proxies will be voted for any nominee who may be
designated by the present Board to fill the vacancy. Unless otherwise
instructed, the proxy holders will vote the proxies received by them "FOR" the
nominees named below.
BUSINESS EXPERIENCE OF NOMINEES FOR ELECTION TO TERMS EXPIRING IN 2003
John Link (58) has served as one of the Company's directors since June
1999. Mr. Link has been the Executive Vice President of Information Technology
of QVC since January 1991 and Chief Information Officer of QVC since March 1994.
He also served as Senior Vice President of Information Technology of QVC from
June 1989 to March 1994. Prior to June 1989, Mr. Link held various senior
technical management positions at Sun Company. Mr. Link received a B.A. in
physics from the University of Delaware, a Master of Science in computer science
from the University of Pennsylvania and completed the Program for Management
Development at Harvard Business School. He is a member of the Society for
Information Management.
Ann Winblad (49) has served as one of the Company's directors since April
1998. Ms. Winblad has been a general partner of Hummer Winblad Venture Partners,
a venture capital investment firm, since 1989. She is a member of the board of
trustees of the University of St. Thomas and is an advisor to numerous
entrepreneurial groups such as the Software Development Forum, the Stanford/MIT
Venture Forum and the Massachusetts Computer Software Council, Software Industry
Business Practices. Ms. Winblad also serves on the boards of directors of Net
Perceptions Inc., a provider of real time personalization and precision
marketing software solutions for the Internet and multi-channel retailers,
Liquid Audio Inc., a provider of an open platform that enables the digital
delivery of music over the Internet, and several private companies. Ms. Winblad
received a B.S. in Mathematics and Business Administration from the University
of St. Thomas and an M.A. in education with an economics focus from the
University of St. Thomas.
BUSINESS EXPERIENCE OF CONTINUING DIRECTORS WITH TERMS EXPIRING IN 2001
Sandra Stiles (50) has been the Company's Chief Operating Officer since
November 1998 and Assistant Secretary since September 1999. From November 1998
to May 1999, she served as the Company's Chief Financial Officer. Ms. Stiles has
served as one of the Company's directors since May 1998. From September
2
<PAGE> 6
1994 to October 1998, she was the Senior Vice President and Director of
Operations for the Children's Book and Value Publishing division of Random
House. She also served as a Vice President and the Corporate Controller of
Random House from October 1990 to August 1994. Prior to October 1990, Ms. Stiles
held various positions at OmniCorp Holdings, Inc., Bertelsmann Inc. and Arthur
Andersen & Co. She received a B.S. in Accounting from New York University.
Roberto Stern (40) has served as one of the Company's directors since March
2000. Since 1993, Mr. Stern has served as President of H. Stern, a leading
jeweler and specialty retailer. From 1991 to 1993, Mr. Stern served as Vice
President of H. Stern's activities in Sao Paulo. From 1985 until 1991, Mr. Stern
served in various other positions within H. Stern. Mr. Stern has also held
positions at Salles Interamerica, one of Brazil's largest advertising agencies,
Zales Jewelers, Modulados Favo, the furniture manufacturer and Banco Brascan.
Mr. Stern is a certified Gemologist with a diploma from the GIA, Gemological
Institute of America. Mr. Stern received a B.S. in Economics from The Federal
University of Rio de Janeiro in 1981.
BUSINESS EXPERIENCE OF CONTINUING DIRECTOR WITH TERM EXPIRING IN 2002
David Liu (34) is a co-founder of The Knot and has been the Company's Chief
Executive Officer and a director since its inception in May 1996. From January
1993 to May 1996, Mr. Liu served as Director of Production of RunTime Inc., a
CD-ROM development firm that he co-founded with Carley Roney. Prior to January
1993, Mr. Liu was the Director of Production at VideOvation, a subsidiary of
Reader's Digest. Mr. Liu received a B.F.A. in Film and Television from New York
University. Mr. Liu is married to Ms. Roney, the Company's Editor-in-Chief.
BOARD MEETINGS AND COMMITTEES
The Company's Board met a total of ten times and acted by written consent 8
times during the year ended December 31, 1999. Each director attended at least
75% of the aggregate of (i) the total meetings of the Board and (ii) the total
number of meetings held by all committees of the Board on which he or she
served, with respect to the Board meetings and Committee meetings, respectively,
held in that portion of 1999 during which the director was serving as a member
of the Board.
The Company has a Compensation Committee currently composed of Mr. Link and
Ms. Winblad. The Compensation Committee met twice in 1999. The Compensation
Committee recommends, reviews and oversees the salaries, benefits and stock
option plans for the Company's employees, consultants, directors and other
individuals whom the Company compensate. The Compensation Committee also
administers the Company's compensation plans.
The Company also has an Audit Committee currently composed of Mr. Link, Mr.
Stern, Ms. Stiles and Ms. Winblad. The Audit Committee met once in 1999. The
Audit Committee reviews, acts on and reports to the Board on various auditing
and accounting matters, including the recommendation of the Company's auditors,
the scope of the annual audits, fees to be paid to the auditors, the performance
of the Company's independent auditors and the accounting practices of The Knot.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1999, the Compensation Committee consisted of Mr. Link, Mr. Liu and Ms.
Winblad. The Company's Compensation Committee currently consists of Mr. Link and
Ms. Winblad. None of the members of the Compensation Committee is or has been an
officer or employee of the Company. Mr. Liu has participated in all discussions
and decisions concerning the compensation of the Company's executive officers,
except that he was excluded from discussions by the Board regarding his own
compensation.
Mr. Link is the Chief Information Officer of QVC, and Ms. Winblad is a
general partner of Hummer Winblad Equity Partners II, L.P., the general partner
of each of the Hummer Winblad funds. See "Certain Relationships and Related
Transactions."
DIRECTOR COMPENSATION
The Company reimburses its directors for travel and other out-of-pocket
costs incurred in connection with the attendance at meetings of the Board. In
addition, the Company's 1999 Stock Incentive Plan (the "1999 Plan") provides
that each eligible non-employee director will automatically receive an option to
3
<PAGE> 7
purchase 15,000 shares of Common Stock upon such director's initial election or
appointment to the Board. Each 15,000-share option will vest in a series of
three (3) successive annual installments upon the optionee's completion of each
year of Board service over the three-year period measured from the option grant
date. The 1999 Plan also provides that, on the date of each annual meeting of
stockholders, each non-employee Board member who is to continue to serve as a
non-employee Board member will automatically be granted an option to purchase
5,000 shares of Common Stock. Each annual 5,000-share option will vest upon the
optionee's completion of one (1) year of Board service measured from the option
grant date. The exercise price per share in effect for options granted under the
1999 Plan is the closing sale price of the Common Stock on the grant date as
reported by the Nasdaq National Market.
Under the Automatic Option Grant Program of the 1999 Plan, on March 20,
2000 (the date the Board appointed Roberto Stern to the Board), Mr. Stern
received an automatic option grant to purchase 15,000 shares of Common Stock.
The exercise price per share in effect under the option is $7.19, the fair
market value per share of the Common Stock on the grant date. The option grant
will vest in a series of three (3) successive annual installments upon Mr.
Stern's completion of each year of Board service over the three-year period
measured from the grant date.
VOTE REQUIRED
The affirmative vote of a plurality of the shares of Common Stock present
in person or represented by proxy and entitled to vote at the Annual Meeting is
required for the election of directors. The two candidates for the class of
directors whose terms expire at the 2003 annual meeting of stockholders
receiving the highest number of affirmative votes of the stockholders entitled
to vote at the Annual Meeting will be re-elected directors of The Knot. Unless
otherwise instructed, the proxyholders will vote each returned Proxy "FOR" the
nominees named above, or for as many nominees of the Board as possible, such
votes to be distributed among such nominees in the manner as the proxyholders
see fit.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED ABOVE.
PROPOSAL 2
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Ernst & Young LLP,
independent auditors for the Company during the fiscal year ended December 31,
1999, to serve in the same capacity for the year ending December 31, 2000, and
is asking the stockholders to ratify this appointment.
VOTE REQUIRED
The affirmative vote of a majority of the stockholders represented and
voting at the Annual Meeting will be required to ratify the selection of Ernst &
Young LLP. In the event the stockholders fail to ratify the appointment, the
Board will reconsider its selection. Even if the selection is ratified, the
Board, in its discretion, may direct the appointment of a different independent
accounting firm at any time during the year if the Board believes that such a
change would be in The Knot's and its stockholders' best interests.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting, will have the opportunity to make a statement if they desire to
do so and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION AND
APPROVAL OF THE SELECTION OF ERNST & YOUNG LLP TO SERVE AS THE KNOT'S
INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 2000.
4
<PAGE> 8
OWNERSHIP OF SECURITIES
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 4, 2000 by (i) each person
or group of affiliated persons known by the Company to beneficially own more
than five percent of the Company's Common Stock, (ii) each of the Company's
directors and nominees for director, (iii) the Company's named executive
officers and (iv) all directors and executive officers of the Company as a
group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP
OF COMMON STOCK(2)
------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER(1) NUMBER PERCENT
- --------------------------------------- ----------- ---------
<S> <C> <C>
David Liu(3)(4)............................................. 673,383 4.6%
Carley Roney(3)(4).......................................... 673,383 4.6
Michael Wolfson(3).......................................... 673,383 4.6
Rob Fassino(3).............................................. 673,383 4.6
Sandra Stiles(5)............................................ 197,917 1.4
Richard Szefc(6)............................................ 62,500 *
Carlos Manel Abreu(7)....................................... 33,333 *
John Link(8)................................................ 5,728,590 35.3
Roberto Stern(9)............................................ -- --
Ann Winblad(10)............................................. 2,560,000 17.6
Interactive Technology Holdings, LLC(11).................... 5,725,590 35.3
Hummer Winblad Funds(10).................................... 2,560,000 17.6
America Online, Inc.(12).................................... 1,166,667 7.8
All directors and executive officers as a group (7
persons)(13).............................................. 3,530,133 23.9
</TABLE>
- ---------------
* Less than 1%.
(1) Except as otherwise indicated, (i) the persons named in the table have sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them, subject to community property laws,
where applicable and (ii) the address of all employee stockholders listed
in the table is 462 Broadway, 6th Floor, New York, NY 10013. Beneficial
ownership is calculated pursuant to Rule 13d-3(d)(1) under the Securities
Exchange Act of 1934, as amended. The addresses of individual directors and
nominees for election to the Board are indicated in their corresponding
footnotes.
(2) On April 4, 2000, 14,522,612 shares of Common Stock were issued and
outstanding.
(3) Consists of 673,383 shares of common stock owned by this stockholder, of
which 505,037 shares are subject to repurchase under a vesting agreement
over the 36-month period beginning April 28, 1998, as long as this
stockholder remains an employee of The Knot. As of April 4, 2000, 322,663
of the 505,037 shares held by this stockholder subject to vesting had
vested. The Knot has the right to repurchase all or any portion of the
unvested shares for $0.01 per share for a period of 60 days from the date
of early termination.
(4) Excludes 673,383 shares of common stock owned by this stockholder's spouse.
(5) Includes 112,083 shares of common stock issuable upon the exercise of
presently exercisable options and 15,834 shares of common stock issuable
upon the exercise of options exercisable within 60 days. Excludes 182,083
shares of common stock issuable upon the exercise of options that do not
vest within 60 days of April 4, 2000.
(6) Consists of 62,500 shares of common stock issuable upon the exercise of
options exercisable within 60 days of April 4, 2000. Excludes 187,500
shares of common stock issuable upon the exercise of options that do not
vest within 60 days of April 4, 2000.
(7) Consists of 33,333 shares of common stock issuable upon the exercise of
options exercisable within 60 days of April 4, 2000. Excludes 66,667 shares
of common stock issuable upon the exercise of options that do not vest
within 60 days of April 4, 2000.
5
<PAGE> 9
(8) Consists of 3,000 shares of common stock owned by this stockholder and
4,025,590 shares of common stock owned by Interactive Technology Holdings,
LLC, an affiliate of QVC, and 1,700,000 shares issuable upon the exercise
of a currently exercisable warrant. Mr. Link disclaims beneficial ownership
of the shares of common stock owned by Interactive Technology Holdings,
LLC, except to the extent of his pecuniary interest therein. Mr. Link's
address is c/o QVC, Studio Park, West Chester, PA 19380.
(9) Excludes 15,000 shares of common stock issuable upon the exercise of
options that do not vest within 60 days of April 4, 2000.
(10) Consists of 2,432,000 shares of common stock owned by Hummer Winblad
Venture Partners III, L.P. and 128,000 shares of common stock owned by
Hummer Winblad Technology Fund III, L.P. (collectively, the "Hummer Winblad
Funds"). John Hummer, Ann Winblad (one of our directors) and Mark Gorenberg
are general partners of Hummer Winblad Equity Partners II, L.P. ("HWII"),
the general partner of each of the Hummer Winblad Funds. Consequently, HWII
and Mr. Hummer, Ms. Winblad and Mr. Gorenberg may each be deemed to
beneficially own all of the shares held by the Hummer Winblad Funds. HWII,
Mr. Hummer, Ms. Winblad and Mr. Gorenberg each disclaim beneficial
ownership of such shares, except to the extent of their respective
pecuniary interest therein. The address of the Hummer Winblad Funds is 2
South Park, 2nd Floor, San Francisco, CA 94107.
(11) Consists of 4,025,590 shares of common stock owned by Interactive
Technology Holdings, LLC and 1,700,000 shares issuable upon the exercise of
a currently exercisable warrant. The address of Interactive Technology
Holdings, LLC is 222 Delaware Avenue, Suite 1448, 14th Floor, Wilmington,
DE 19801-1621.
(12) Consists of 800,000 shares of common stock owned by America Online, Inc.
("AOL") and 366,667 shares issuable upon the exercise of a warrant. The
address of AOL is 22000 AOL Way, Dulles, VA 20166.
(13) Includes 223,750 shares of common stock issuable upon the exercise of
options which are currently vested or which vest within 60 days of April 4,
2000.
6
<PAGE> 10
MANAGEMENT
The following table sets forth, as of April 4, 2000, the name, age and
position of each of our executive officers and other key employees.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
David Liu............................ 34 President, Chief Executive Officer and Chairman of the
Board
Sandra Stiles........................ 50 Chief Operating Officer, Assistant Secretary and
Director
Richard Szefc........................ 50 Chief Financial Officer, Treasurer and Secretary
Carlos Manuel Abreu.................. 40 Chief Technology Officer
Carley Roney......................... 31 Editor-in-Chief
Michael Wolfson...................... 34 Vice President, Distribution
Rob Fassino.......................... 32 Vice President, Business Integration
Russell Casenhiser................... 34 Vice President of Retail Sales
Adam Sandow.......................... 31 Vice President of Sales
</TABLE>
David Liu is the Company's President, Chief Executive Officer and Chairman
of the Board. See "Business Experience of Continuing Director with Term Expiring
in 2002" for a discussion of Mr. Liu's business experience. Mr. Liu is married
to Ms. Roney.
Sandra Stiles is the Company's Chief Operating Officer and a director. See
"Business Experience of Continuing Directors with Terms Expiring in 2001" for a
discussion of Ms. Stiles' business experience.
Richard Szefc has served as the Company's Chief Financial Officer since May
1999 and the Company's Treasurer and Secretary since September 1999. From July
1998 to May 1999, Mr. Szefc was an independent consultant. From April 1990 to
June 1998, Mr. Szefc served as Executive Vice President and Chief Financial
Officer of Random House. Prior to April 1990, Mr. Szefc served as a partner in
the audit practice of Arthur Andersen & Co. Mr. Szefc received a B.S. in
economics from the University of Pennsylvania.
Carlos Manuel Abreu has served as the Company's Chief Technology Officer
since February 1999. From March 1992 to January 1999, Mr. Abreu was the Chief
Executive Officer and Chief Technology Officer of Cyberphilia, Inc., a developer
of intranets, extranets and e-commerce solutions for advertising,
pharmaceutical, public relations, publishing, architectural, e-commerce and
other companies. Mr. Abreu received a B.S. in Computer Science from Rutgers
University.
Carley Roney is a co-founder of The Knot. She has served as the Company's
Editor-In-Chief since its inception in May 1996. From May 1996 to September
1999, she also served as Vice President of Creative Development. From January
1994 to May 1996, she served as President at RunTime Inc., a CD-ROM development
firm that she co-founded with David Liu. Ms. Roney received a M.A. in Cultural
Studies and a B.F.A. in Film and Television from New York University. Ms. Roney
is married to Mr. Liu.
Michael Wolfson is a co-founder of The Knot and has served as the Company's
Vice President, Distribution since its inception. From May 1996 to September
1999, he served as the Company's Secretary. From April 1998 to April 1999, he
also served as the Vice President of Membership Acquisition. From October 1994
to February 1996, Mr. Wolfson served as Director of Development of the Digital
Media Division of Margeotes Fertitta and Partners, an advertising agency. In
1992, Mr. Wolfson founded and served as President of Luna Pictures, a company
providing Avid-based editing facilities for television and movie production
companies. Mr. Wolfson received a B.F.A. in Film and Television from New York
University.
Rob Fassino is a co-founder of The Knot. He has served as the Company's
Vice President, Business Integration since August 1999. He also served as the
Company's Vice President of Production from April 1999 to August 1999, and Vice
President of Sales from June 1996 to April 1999. From October 1994 to June 1996,
Mr. Fassino served as the Director of the Digital Media Division of Margeotes
Fertitta and Partners, an advertising agency. Mr. Fassino received a B.F.A. in
Film and Television from New York University.
7
<PAGE> 11
Russell Casenhiser has served as the Company's Vice President of Retail
Sales since May 1999. He has also served as Director of Registry Operations from
April 1998 to May 1999. From January 1996 to April 1998, Mr. Casenhiser was the
President and co-founder of Bridal Search, an online directory of bridal gowns.
From September 1992 to December 1995, Mr. Casenhiser served as the President of
La Galleria, a high-end retail clothing store. Mr. Casenhiser received a B.S. in
Economics from Pepperdine University and a M.B.A. from Pepperdine University.
Adam Sandow has served as the Company's Vice President of Sales since
February 1999. From June 1994 to January 1999, Mr. Sandow was President of
Travel Publishing Group, Inc., a consumer magazine publisher.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information concerning the aggregate
compensation paid by the Company to the Company's Chief Executive Officer and
other executive officers (the "Named Executive Officers") for services rendered
in all capacities to the Company for the years ended December 31, 1999, 1998 and
1997:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION(1) AWARDS
------------------ ------------
SECURITIES
UNDERLYING ALL OTHER
SALARY BONUS OPTION/SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) (#) ($)
- --------------------------- ---- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
David Liu............................ 1999 139,167 100,000 -- --
President, Chief Executive Officer 1998 94,833(5) 30,000 -- --
and Chairman of the Board 1997 63,500 -- -- --
Sandra Stiles(2)..................... 1999 137,292 75,000 -- --
Chief Operating Officer, Assistant 1998 18,333 -- 380,000 --
Secretary and Director
Carlos Manuel Abreu(3)............... 1999 119,167 50,000 100,000 --
Chief Technology Officer
Richard Szefc(4)..................... 1999 85,625 75,000 250,000 --
Chief Financial Officer, Treasurer
and Secretary
</TABLE>
- ---------------
(1) The aggregate amount of perquisites and other personal benefits, if any, did
not exceed the lesser of $50,000 or 10% of the total annual salary and bonus
reported for each Named Executive Officer and has therefore been omitted.
(2) Ms. Stiles joined the Company as Chief Operating Officer in November 1998.
(3) Mr. Abreu joined the Company as Chief Technology Officer in February 1999.
(4) Mr. Szefc joined the Company as Chief Financial Officer in May 1999.
(5) During the first quarter of 1998, Mr. Liu received $21,500 of the $94,833 in
compensation from Element Studios, a corporation formed in connection with
the Company's inception.
8
<PAGE> 12
STOCK OPTIONS
The following table sets forth information concerning stock option grants
made to each of the Named Executive Officers during the year ended December 31,
1999. The Company did not grant any stock appreciation rights to the Named
Executive Officers during the year ended December 31, 1999.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------
PERCENT OF POTENTIAL REALIZABLE VALUE AT
NUMBER OF TOTAL OPTIONS/ ASSUMED ANNUAL RATES OF
SECURITIES SARS GRANTED STOCK PRICE APPRECIATION FOR
UNDERLYING TO EMPLOYEES EXERCISE OR OPTION TERM(4)
OPTIONS/SARS IN FISCAL BASE PRICE EXPIRATION -------------------------------
NAME GRANTED(1) YEAR(%)(2) ($/SH)(3) DATE 0%($) 5%($) 10%($)
- ---- ------------ -------------- ----------- ---------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
David Liu............ -- -- -- -- -- -- --
Sandra Stiles........ -- -- -- -- -- -- --
Carlos Manuel
Abreu(5)........... 100,000 8.6 0.50 1/31/09 200,000 337,224 598,436
Richard Szefc(6)..... 250,000 21.4 1.50 5/30/09 687,500 1,355,701 2,380,851
</TABLE>
- ---------------
(1) All options were granted under the Company's 1997 Stock Incentive Plan, the
predecessor to the Company's 1999 Stock Incentive Plan (the "1997 Plan").
Unless otherwise indicated, each option vests and becomes exercisable as
follows: 25% after 12 months of service measured from the date of the option
grant, and the remaining 75% thereafter in a series of 36 equal monthly
installments.
(2) The Company granted options to acquire an aggregate of 1,166,650 shares of
Common Stock to the Company's officers and employees in 1999.
(3) The exercise price may be paid in cash or in shares of Common Stock valued
at fair market value on the exercise date or a combination of cash or shares
or any other form of consideration approved by the Board.
(4) There is no assurance provided to any Named Executive Officer or any other
holder of the Company's securities that the actual stock price appreciation
over the 10-year option term will be at the assumed 5% or 10% levels or at
any other defined level. Unless the market price of the Common Stock does in
fact appreciate over the option term, no value will be realized from the
option grants made to the Named Executive Officers.
(5) The fair market value of the underlying shares of Common Stock on February
1, 1999, the date the options were granted, was $2.50 per share, as
determined by the Board.
(6) The fair market value of the underlying shares of Common Stock on May 31,
1999, the date the options were granted, was $4.25 per share, as determined
by the Board.
9
<PAGE> 13
The following table provides information concerning option exercises during
the year ended December 31, 1999 by the Named Executive Officers and the value
of unexercised options held by each of the Named Executive Officers as of
December 31, 1999. No stock appreciation rights were exercised during the year
ended December 31, 1999.
OPTION EXERCISES AND HOLDINGS
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
SHARES AT FISCAL YEAR END(#) FISCAL YEAR END($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
David Liu............. -- -- -- -- -- --
Sandra Stiles......... 70,000 665,000(2) 80,417 229,583 638,511 1,822,889
Carlos Manual Abreu... -- -- -- 100,000 -- 794,000
Richard Szefc......... -- -- -- 250,000 -- 1,735,000
</TABLE>
- ---------------
(1) Value is defined as the fair market price of the Company's Common Stock at
December 31, 1999 less the exercise price. On December 31, 1999, the closing
selling price of a share of the Company's Common Stock on the Nasdaq
National Market was $8.44.
(2) The fair market price of the Company's Common Stock at December 1, 1999, the
exercise date, is assumed to be $10.00, the initial public offering price of
the Company's Common Stock.
EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL ARRANGEMENTS
On April 12, 1999, the Company entered into an employment contract with Mr.
Liu, the Company's Chief Executive Officer, for three years. The contract
provides for salary and the payment of one or more annual bonuses at the sole
discretion of the Board. In the event of his termination without cause before
the end of the contract term, Mr. Liu is entitled to one year's salary plus
certain benefits. The contract also contains a covenant by Mr. Liu not to
compete for the term of the contract and for one year after the term expires. As
of April 4, 2000, Mr. Liu's annual salary was $185,000.
On November 2, 1998, the Company entered into an employment contract with
Ms. Stiles, the Company's Chief Operating Officer, which is terminable at any
time. In the event of her termination without cause, Ms. Stiles is entitled to
one year's salary plus certain benefits. As of April 4, 2000, Ms. Stiles' annual
salary was $180,000.
On May 31, 1999, the Company entered into an employment contract with Mr.
Szefc, the Company's Chief Financial Officer, which is terminable at any time.
In the event of his termination without cause, Mr. Szefc is entitled to one
year's salary plus certain benefits. In addition, in the event an individual or
related group of persons acquires 50% or more of the Company's voting stock, at
least 50% of Mr. Szefc's options will vest immediately. As of April 4, 2000, Mr.
Szefc's salary was $175,000.
All of the options awarded by the Company to the Named Executive Officers
during the year ended December 31, 1999 provide that, in the event that we are
acquired by merger, asset sale or sale of more than 50% of the Company's voting
securities by the stockholders, each outstanding option which is not to be
assumed by the successor corporation will immediately become exercisable for all
the option shares, and all outstanding unvested shares will immediately vest,
except to the extent the Company's repurchase rights with respect to those
shares are to be assigned to the successor corporation.
10
<PAGE> 14
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee offers this report regarding compensation for
the Company's executive officers and Chief Executive Officer.
General Compensation Policy
The fundamental policy of the Compensation Committee is to provide the
Company's executive officers with competitive compensation opportunities based
upon their contribution to the Company's development and financial success and
their personal performance. The Compensation Committee, with this objective in
mind, recommends to the Board compensation packages for the Company's executive
officers designed to retain and attract top quality management and to encourage
them to contribute to the achievement of the Company's business objectives. In
addition, the Compensation Committee attempts to establish compensation packages
that are comparable to the packages received by executives of similar companies
and reasonable in light of the Company's internal base salary comparability
considerations.
The Company compensates its executive officers with a combination of salary
and incentives designed to encourage efforts to achieve both the short-term and
long-term goals of the Company. The compensation structure attempts to reward
both individual contributions as well as the Company's overall performance. The
principal factors which the Compensation Committee considered with respect to
each executive officer's compensation package for fiscal year 1999 are
summarized below. The Compensation Committee may, however, in its discretion
apply entirely different factors in advising the Chief Executive Office and the
Board with respect to executive compensation for future years.
The basic components of the Company's compensation packages for its
executive officers include the following:
- Base Salary
- Annual Incentives
- Long-Term Incentives
- Benefits
Base Salary. The base salary for each executive officer is determined on
the basis of the following factors: experience, personal performance, the salary
levels in effect for comparable positions within and without the industry, and
internal base salary comparability considerations. The weight given to each of
these factors differs from individual to individual, as the Compensation
Committee deems appropriate. Base salaries are generally reviewed on an annual
basis, with adjustments made in accordance with the factors indicated above. In
addition, in reviewing annual adjustments, the Compensation Committee takes into
account the Company's performance in the fiscal year then ended.
Annual Incentives. The incentive compensation of executive officers is
closely related to Company performance. A portion of the cash compensation of
executive officers consists of contingent compensation. Bonus awards are based
on, among other things, performance objectives and goals that are tailored to
the responsibilities and functions of key executives. The Compensation Committee
felt that the Company's executives and key employees reached personalized
performance objectives, and contributed to the Company's successful completion
of its initial public offering in December 1999 and to the Company's revenue
growth during 1999. During 1999, the Company approved bonuses to its executive
officers in an aggregate amount of $300,000.
Long-Term Incentive Compensation. Long-term incentives are provided
through grants of stock options. The grants are designed to align the interests
of each executive officer with those of the stockholders and provide each
individual with a significant incentive to manage the Company from the
perspective of an owner with an equity stake in the Company. Each option grant
allows the individual to acquire shares of the Company's Common Stock at a fixed
price per share (generally, the market price on the grant date) over a specified
period of time (up to ten years). Each option generally becomes exercisable in
installments over a 4-
11
<PAGE> 15
year period, contingent upon the executive officer's continued employment with
the Company. Accordingly, the option grant will provide a return to the
executive officer only if the executive officer remains employed by the Company
during the vesting period, and then only if the market price of the underlying
shares appreciates. During 1999, the Company granted to its executive officers
options to purchase an aggregate of 350,000 shares of Common Stock.
Benefits. Benefits offered to the Company's executive officers serve as a
safety net of protection against the financial catastrophes that can result from
illness, disability or death. Benefits offered to the Company's executive
officers are substantially the same as those offered to all the Company's
regular employees.
CEO Compensation
The plans and policies discussed above were the basis for the 1999
compensation of the Company's Chief Executive Officer, Mr. David Liu. Mr. Liu
was excluded from all discussions by the Board and the Compensation Committee
regarding his own compensation. In advising the Board with respect to this
compensation, the Compensation Committee seeks to achieve two objectives: (i)
establish a level of base salary competitive with that paid by companies within
the industry which are of comparable size to the Company and by companies
outside of the industry with which the Company competes for executive talent and
(ii) make a significant percentage of the total compensation package contingent
upon the Company's performance and stock price appreciation. In accordance with
these objectives, Mr. Liu received a base salary of $139,167 and a bonus of
$100,000 for fiscal year 1999. Mr. Liu's 1999 compensation was based on the
actual financial performance of the Company in achieving designated corporate
objectives and attaining a strategic revenue objective measured against
competitors' performance.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly held companies for compensation exceeding
$1 million paid to certain of the corporation's executive officers. The
limitation applies only to compensation which is not considered to be
performance-based. The non-performance based compensation paid to the Company's
executive officers for the 1999 fiscal year did not exceed the $1 million limit
per officer, nor is it expected that the non-performance based compensation to
be paid to the Company's executive officers for fiscal year 2000 will exceed
that limit. Because it is very unlikely that the cash compensation payable to
any of the Company's executive officers in the foreseeable future will approach
the $1 million limit, the Compensation Committee has decided at this time not to
take any other action to limit or restructure the elements of cash compensation
payable to the Company's executive officers. The Compensation Committee will
reconsider this decision should the individual compensation of any executive
officer ever approach the $1 million level.
Compensation Committee
John Link
Ann Winblad
12
<PAGE> 16
STOCK PERFORMANCE GRAPH
The Securities and Exchange Commission requires the Company to present a
graph comparing the cumulative total stockholder return on its Common Stock with
the cumulative total stockholder return of (i) a broad equity market index and
(ii) a published industry index or peer group. Although the graph would normally
be for a five-year period, the Common Stock of the Company began trading
publicly on December 2, 1999 and, as a result, the following chart commences as
of such date. This chart compares the Common Stock with (i) the Nasdaq Stock
Market-United States Index and (ii) the Russell 2000 Index.
COMPARISON OF CUMULATIVE TOTAL RETURN*
AMONG THE KNOT, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE RUSSELL 2000 INDEX
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
NASDAQ STOCK
THE KNOT, INC. MARKET (U.S.) RUSSELL 2000
-------------- ------------- ------------
<S> <C> <C> <C>
12/2/99 100.00 100.00 100.00
12/31/99 84.38 121.66 103.17
</TABLE>
- ---------------
* $100 invested on 12/2/99 in stock or index -- including reinvestment of
dividends.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SERIES B PREFERRED STOCK
On April 13, 1999, the Company sold 4,000,000 shares of its Series B
Preferred Stock at a price of $3.75 per share to QVC. QVC paid an aggregate of
$15.0 million for the shares of Series B Preferred Stock and received a warrant
to purchase 1,700,000 shares of the Company's common stock at an exercise price
of $5.00 per share. The warrant became exercisable upon the Company's initial
public offering of common stock. In addition, QVC received registration rights
in connection with their shares of stock and the shares issuable upon the
exercise of its warrant, and became a party to the investor rights agreement.
The Series B Preferred Stock and the warrant have been assigned to QVC
Interactive Holdings, LLC (now known as Interactive Technology Holdings, LLC).
The Company also entered into a services agreement with QVC, which the
13
<PAGE> 17
Company believes is on terms and conditions no less favorable to it than it
could have obtained from unaffiliated third parties. The Company also has an
agreement with QVC to sell merchandise through a co-branded site accessible from
within QVC's online site. For the year ended December 31, 1999, the Company
purchased merchandise and incurred warehousing, fulfillment and distribution and
billing costs under the agreements in the aggregate amount of $172,000.
AOL ANCHOR TENANT AGREEMENT
On July 23, 1999, the Company entered into an amended anchor tenant
agreement with AOL, which extended the term of the Company's existing agreement
with AOL through January 6, 2003. Under the terms of the agreement, The Knot
continues to be the primary wedding content provider on AOL and on several other
of AOL's leading properties, including AOL.com, Netscape Netcenter and
CompuServe. Under the terms of the agreement, the Company pays carriage fees to
AOL. For the year ended December 31, 1999, the Company paid $1,000,000 in
carriage fees to AOL. For the year ended December 31, 1998, the Company did not
pay AOL carriage fees. Under the terms of the agreement, AOL may terminate the
agreement without cause only with respect to the Company's carriage on AOL
Hometown, Netscape and CompuServe upon 30 days' prior notice. Advertisements and
promotions are subject to AOL's approval, and the advertisements may not promote
AOL competitors such as other Internet service providers or search engines. The
Company believes the terms and conditions of its anchor tenant agreement with
AOL, taken as a whole, are no less favorable to it than it could have obtained
from unaffiliated third parties.
In consideration for AOL's agreement to extend the term of the agreement,
the Company granted to AOL a warrant, exercisable for eight years from the date
of grant, to purchase 366,667 shares of Common Stock at a price equal to $7.20
per share. The warrant is immediately exercisable and expires in July 2007. In
addition, AOL received registration rights with respect to the shares issuable
under the warrant.
MISCELLANEOUS
The Certificate of Incorporation eliminates, subject to certain exceptions,
directors' personal liability to the Company or its stockholders for monetary
damages for breaches of fiduciary duties. The Certificate of Incorporation does
not, however, eliminate or limit the personal liability of a director for (i)
any breach of the director's duty of loyalty to the Company or its stockholders,
(ii) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) unlawful payments of dividends or unlawful
stock repurchases or redemptions as provided in Section 174 of the Delaware
General Corporation Law or (iv) for any transaction from which the director
derived an improper personal benefit.
The Company's Amended and Restated Bylaws provide that the Company shall
indemnify its directors and executive officers to the fullest extent permitted
under the Delaware General Corporation Law, and may indemnify its other
officers, employees and other agents as set forth in the Delaware General
Corporation Law. In addition, the Company has entered into indemnification
agreements with its directors and officers. The indemnification agreements
contain provisions that require the Company, among other things, to indemnify
its directors and executive officers against certain liabilities (other than
liabilities arising from intentional or knowing and culpable violations of law)
that may arise by reason of their status or service as directors or executive
officers of the Company or other entities to which they provide service at the
request of the Company and to advance expenses they may incur as a result of any
proceeding against them as to which they could be indemnified. The Company
believes that these provisions and agreements are necessary to attract and
retain qualified directors and officers. The Company has obtained an insurance
policy covering directors and officers for claims that such directors and
officers may otherwise be required to pay or for which the Company is required
to indemnify them, subject to certain exclusions.
As of the date of this proxy statement, there is no pending litigation or
proceeding involving a director, officer, employee or other agent of the Company
as to which indemnification is being sought, nor is the Company aware of any
pending or threatened litigation that may result in claims for indemnification
by any director, officer, employee or other agent.
14
<PAGE> 18
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires The Knot's officers and
directors, and persons who own more than 10% of a registered class of The Knot's
equity securities, to file reports of ownership and changes in ownership with
the SEC and the Nasdaq Stock Market. Officers, directors and greater than 10%
stockholders are required by SEC regulations to furnish The Knot with copies of
all reports they file pursuant to Section 16(a).
Based solely on a review of the copies of such reports furnished to The
Knot, or written representations that no Form 5s were required, The Knot
believes that, during 1999, all Section 16(a) filing requirements applicable to
its officers, directors and greater than 10% stockholders were satisfied.
DEADLINE FOR STOCKHOLDER PROPOSALS
Stockholder proposals that are intended to be presented at the Company's
annual meeting of stockholders to be held in 2001 must be received by the
Company no later than January 16, 2001, if such proposals are to be included in
the proxy statement and related proxy materials relating to that meeting. In
addition, the proxy solicited by the Board of Directors for the annual meeting
of stockholders to be held in 2001 will confer discretionary authority to vote
on any stockholder proposal presented at that meeting unless the Company
receives notice of such proposal on or before March 5, 2001.
FORM 10-K
The Company filed an Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 with the Securities and Exchange Commission on March 29, 2000.
Stockholders may obtain a copy of this report, without charge, upon written
request, by writing to Investor Relations, at the Company's executive offices,
which are located at 462 Broadway, 6th Floor, New York, New York 10013.
OTHER BUSINESS
The Board knows of no other business that will be presented for
consideration at the Annual Meeting. If other matters are properly brought
before the Annual Meeting, however, it is the intention of the persons named in
the accompanying proxy to vote the shares represented thereby on such matters in
accordance with their best judgment.
Order of the Board of Directors
[Richard Szefc sig]
RICHARD SZEFC, Secretary
Dated: April 18, 2000
15
<PAGE> 19
PROXY CARD
THE KNOT, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David Liu and Richard Szefc jointly and
severally, as proxies, with full power of substitution and resubstitution, to
vote all shares of stock which the undersigned is entitled to vote at the Annual
Meeting of Stockholders of THE KNOT, INC. to be held on Tuesday, May 16, 2000,
or at any postponements or adjournments thereof, as specified on the reverse,
and to vote in his discretion on such other business as may properly come before
the Annual Meeting and any adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
UNLESS OTHERWISE SPECIFIED BY THE UNDERSIGNED, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1 AND 2 AND WILL BE VOTED BY THE PROXYHOLDERS AT THEIR DISCRETION AS
TO ANY OTHER MATTERS PROPERLY TRANSACTED AT THE MEETING OR ANY ADJOURNMENTS
THEREOF. TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS JUST
SIGN BELOW, NO BOXES NEED BE CHECKED.
(PLEASE SIGN AND DATE ON REVERSE SIDE)
<PAGE> 20
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
THE KNOT, INC.
MAY 16, 2000
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. ELECTION OF DIRECTORS:
[ ] Vote FOR all nominees listed below (except as withheld in the space
below) [ ] Vote WITHHELD from all nominees
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE
BOX "VOTE FOR" AND WRITE THE NOMINEE'S NAME ON THE LINE BELOW.
- --------------------------------------------------------------------------------
NOMINEES: JOHN LINK AND ANN WINBLAD WILL STAND FOR RE-ELECTION TO THE BOARD FOR
TERMS TO EXPIRE IN 2003.
2. RATIFICATION OF AUDITORS:
To ratify and approve the selection of Ernst & Young LLP as independent
auditors for the fiscal year ending December 31, 2000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
CHECK HERE IF YOU PLAN TO ATTEND THE ANNUAL MEETING [ ]
<TABLE>
<S> <C>
-----------------------------------------------------
SIGNATURE OF STOCKHOLDER
-----------------------------------------------------
PRINTED NAME OF STOCKHOLDER
-----------------------------------------------------
TITLE (IF APPROPRIATE)
Note: Please sign exactly as your name appears
hereon. If signing as attorney, executor,
administrator, trustee or guardian, please give
full title as such, and, if signing for a
corporation, give your title. When shares are
in the names of more than one person, each
should sign.
Dated: --------------------- , 2000
</TABLE>
