<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
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 Section240.14a-11(c) or
Section240.14a-12
ROWECOM
INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by
/ / Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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</TABLE>
<PAGE>
ROWECOM INC.
15 SOUTHWEST PARK
WESTWOOD, MA 02090
May 2, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders of
RoweCom Inc., which will be held at RoweCom's Corporate Headquarters at
15 Southwest Park, Westwood, Massachusetts, 02090 on Wednesday, May 31, 2000,
beginning at 10:00 A.M., local time.
The Notice of Annual Meeting of Shareholders and a Proxy Statement, which
describe the formal business to be conducted at the meeting, accompany this
letter. RoweCom's Annual Report to Shareholders is also enclosed for your
information.
All shareholders are invited to attend the Annual Meeting. However, to ensure
your representation at the Annual Meeting, you are urged to vote by Proxy by
following one of these steps as promptly as possible:
(A) Complete, date, sign and return the enclosed Proxy Card (a
postage-prepaid envelope is enclosed for that purpose); or
(B) Vote via the Internet (see instructions on the enclosed Proxy Card); or
(C) Vote via telephone (toll free) in the United States or Canada (see
instructions on the enclosed Proxy Card).
The Internet and telephone voting procedures are designed to authenticate
shareholders' identities, to allow shareholders to vote their shares and to
confirm that their instructions have been properly recorded. Specific
instructions to be followed by any registered shareholder interested in voting
via the Internet or telephone are set forth in the Proxy Card. YOUR SHARES
CANNOT BE VOTED UNLESS YOU DATE, SIGN, AND RETURN THE ENCLOSED PROXY CARD, VOTE
VIA THE INTERNET OR TELEPHONE OR ATTEND THE ANNUAL MEETING IN PERSON. Regardless
of the number of shares you own, your careful consideration of, and vote on, the
matters before the shareholders is important.
Very truly yours,
Dr. Richard R. Rowe
Chairman of the Board
President and
Chief Executive Officer
<PAGE>
ROWECOM INC.
15 SOUTHWEST PARK
WESTWOOD, MA 02090
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO OUR SHAREHOLDERS:
RoweCom Inc. hereby gives notice that its Annual Meeting of stockholders will be
held at RoweCom's Corporate Headquarters at 15 Southwest Park, Westwood,
Massachusetts, 02090 on Wednesday, May 31, 2000, beginning at 10:00 A.M., local
time, for the following purposes:
1. To elect two Class 1 Directors to hold office for a one year term, two
Class 2 Directors to hold office for a two year term and two Class 3
Directors to hold office for a three year term, each of whom shall hold
office until such Directors' successors have been duly elected and
qualified;
2. To ratify and approve the issuance of convertible notes and warrants, and
the Common Stock issuable upon their respective conversion or exercise,
under a Securities Purchase Agreement, dated as of October 13, 1999, by and
among RoweCom and two investors;
3. To approve an amendment of RoweCom's Amended and Restated 1998 Stock
Incentive Plan; and
4. To transact any further business that may properly come before the Annual
Meeting or any adjournment.
The Board of Directors has fixed the close of business on April 14, 2000, as the
record date for the determination of RoweCom stockholders entitled to notice of,
and to vote at, the Annual Meeting and any adjournment. Only stockholders of
record on such date are entitled to notice of, and to vote at, the Annual
Meeting or any adjournment.
By Order of the Board of Directors,
Dr. Richard R. Rowe
CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Westwood, Massachusetts
May 2, 2000
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING. WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO COMPLETE,
SIGN, AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED ENVELOPE WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES OR VOTE VIA THE INTERNET OR TELEPHONE.
IF YOU ATTEND THE ANNUAL MEETING, YOU MAY VOTE IN PERSON IF YOU WISH, EVEN IF
YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
ROWECOM INC.
15 SOUTHWEST PARK
WESTWOOD, MA 02090
-------------------
PROXY STATEMENT
-------------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 31, 2000
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of RoweCom Inc. for use at the Annual Meeting of
Stockholders of RoweCom to be held on May 31, 2000 at 10:00 A.M., local time, at
RoweCom's Corporate Headquarters at 15 Southwest Park, Westwood, MA 02090 and
any adjournments or postponements thereof (the "Annual Meeting").
At the Annual Meeting, the stockholders of RoweCom will be asked to consider and
vote upon the following matters:
1. To elect two Class 1 Directors to hold office for a one year term, two
Class 2 Directors to hold office for a two year term and two Class 3
Directors to hold office for a three year term, each of whom shall hold
office until such Directors' successors have been duly elected and
qualified;
2. To ratify and approve the issuance of convertible notes and warrants, and
the Common Stock issuable upon their respective conversion or exercise,
under a Securities Purchase Agreement, dated as of October 13, 1999, by and
among RoweCom and two investors;
3. To approve an amendment of RoweCom's Amended and Restated 1998 Stock
Incentive Plan; and
4. To transact any further business that may properly come before the Annual
Meeting or any adjournment.
The Notice of Annual Meeting, Proxy Statement and Proxy Card are first being
mailed to stockholders of RoweCom on or about May 2, 2000 in connection with the
solicitation of proxies for the Annual Meeting. The Board of Directors has fixed
the close of business on April 14, 2000 as the record date for the determination
of stockholders entitled to notice of, and to vote at, the Annual Meeting (the
"Record Date"). Only holders of Common Stock of record at the close of business
on the Record Date will be entitled to notice of, and to vote at, the Annual
Meeting.
As of the Record Date there were 10,399,208 shares (excluding treasury shares)
of RoweCom Common Stock, $0.01 par value (the "Common Stock"), issued and
outstanding. Such shares of Common Stock are the only voting securities of
RoweCom. Shareholders are entitled to cast one vote for each share of Common
Stock held of record on the Record Date.
The presence, in person or by proxy, of a majority of the total number of
outstanding shares of Common Stock is necessary to constitute a quorum for the
transaction of business at the Annual Meeting. A quorum being present, the
affirmative vote of a plurality of the vote case is necessary to elect a nominee
as a Director of RoweCom.
Shares that reflect abstentions or "broker non-votes" (i.e., shares represented
at the meeting held by brokers or nominees as to which instructions have not
been received from the beneficial owners or persons entitled to vote such shares
and with respect to which the broker or nominee does not have discretionary
voting power to vote such shares) will be counted for the purposes of
determining
<PAGE>
whether a quorum is present for the transaction of business at the meeting. With
respect to the election of Directors, votes may be cast in favor of or withheld
from a particular nominee. Broker non-votes will have no effect on the outcome
of the election of the Director.
Stockholders of RoweCom are requested to complete, date, sign and return the
accompanying Proxy Card in the enclosed envelope, or vote via the Internet or
telephone. Common Stock represented by properly executed proxies received by
RoweCom and not revoked will be voted at the Annual Meeting in accordance with
the instructions contained therein. If instructions are not given therein,
properly executed proxies will be voted "FOR" the election of the nominees for
Director listed in this Proxy Statement.
In addition to the election of the Directors, the stockholders will consider and
vote upon a proposal to ratify and approve the issuance of convertible notes and
warrants, and the Common Stock issuable upon their respective conversion or
exercise as further described in this Proxy Statement. All properly executed
Proxies returned in time to be counted at the meeting will be voted. Where a
choice has been specified on the Proxy with respect to the foregoing matter, the
shares represented by the Proxy will be voted in accordance with the
specifications and will be voted FOR if no specification is indicated.
Any properly completed Proxy may be revoked at any time before it is voted on
any matter (without, however, affecting any vote taken prior to such revocation)
by giving written notice of such revocation to the Secretary of RoweCom, or by
signing and duly delivering a Proxy bearing a later date, or by attending the
Annual Meeting and voting in person. Attendance at the Annual Meeting will not,
by itself, revoke a Proxy.
The Annual Report of RoweCom, including financial statements for the fiscal year
ended December 31, 1999 is being mailed to stockholders of RoweCom concurrently
with this Proxy Statement. The Annual Report, however, is not a part of the
Proxy solicitations material.
PROPOSAL I--
ELECTION OF DIRECTORS
The Board of Directors of RoweCom consists of seven members and is divided into
three classes of Directors. There are two Directors in the first class that will
be elected for a one-year term, two Directors in the second class who will be
elected for a two-year term, and three Directors in the third class who will
serve for a three-year term. The members of each class of Directors will be
determined at the Annual Meeting. At each subsequent Annual Meeting,
stockholders will elect replacements for the Directors whose term is expiring,
and the Directors so elected will serve for a three-year term.
Directors are elected by the stockholders at each Annual Meeting to serve until
the Annual Meeting at which the term of their class expires, or until their
successors are duly elected and qualified. The current Directors of RoweCom,
other than Dr. Lindberg, were nominated and elected prior to RoweCom's initial
public offering in accordance with a stockholders' agreement among RoweCom and
the majority of its stockholders. This stockholders agreement terminated in
March 1999, upon the closing of RoweCom's initial public offering.
The Board of Directors has nominated John Kennedy and Donald A.B. Lindberg, M.D.
to serve as Class 1 Directors, Thomas Lemberg and Philippe Villers to serve as
Class 2 Directors, and Jerome Rubin and Dr. Richard R. Rowe to serve as Class 3
Directors. Each nominee is currently a Director of
2
<PAGE>
RoweCom. Each of the nominees has agreed to serve if elected, and we have no
reason to believe that any nominee will be unable to serve. In the event that
one or more nominees is unable to or declines to serve as a Director at the time
of the Annual Meeting, proxies will be voted for such other nominee as is then
designated by the Board of Directors. The Board of Directors has decided not to
fill the vacancy created by the resignation of Stanley Fung at this time. The
Board has determined that the position will remain open until a suitable
candidate for Directorship has been found and nominated. As soon as the Board of
Directors has selected an acceptable replacement, the vacancy will be filled.
The following table sets forth for the nominee to be elected at the Annual
Meeting and for each Director whose term of office will extend beyond the
meeting, his age, the position(s) currently held by each nominee or Director
with RoweCom, the year such nominee or Director was first elected a Director,
the year each nominee's or Director's term will expire and the class of Director
of each nominee or Director.
<TABLE>
<CAPTION>
DIRECTOR YEAR TERM WILL CLASS OF
NOMINEE OR DIRECTOR'S NAME AGE POSITION(S) HELD SINCE EXPIRE DIRECTOR
- -------------------------- -------- ---------------------------- -------- -------------- --------
<S> <C> <C> <C> <C> <C>
Dr. Richard R. Rowe......... 66 Chairman of the Board, 1994 2003 3
President and Chief
Executive Officer
John Kennedy (1)............ 41 Director 1999 2001 1
Thomas Lemberg (1)(2)....... 53 Director 1996 2002 2
Donald A.B. Lindberg, M.D... 66 Director 1999 2002 1
Jerome Rubin (2)............ 74 Director 1995 2003 3
Philippe Villers (1)(2)..... 64 Director 1998 2003 2
</TABLE>
- ------------------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
DR. RICHARD R. ROWE, the founder of RoweCom, has served as Chairman of the
Board, President and Chief Executive Officer of RoweCom since 1994. Prior to
founding RoweCom, from 1979 to 1993, Dr. Rowe was the President and CEO of the
Faxon Company, one of the world's largest library subscription agencies. Prior
to joining Faxon, Dr. Rowe was the Associate Dean of the Harvard Graduate School
of Education, Director of Harvard's interfaculty Doctoral Program in Clinical
Psychology and Public Practice, and Director of the Cambridge office of the
American Institutes for Research. Dr. Rowe holds a Ph.D. in clinical psychology.
JOHN KENNEDY has served as a director of RoweCom since February 1999.
Mr. Kennedy is Director of Sales of M/Net, a division of PSDI Limited. Prior to
joining M/Net, from 1991 to 1997, Mr. Kennedy was the president of the Efficient
Systems Division of A.R.M. Group Inc.
THOMAS LEMBERG has served as a Director of RoweCom since May 1996. Mr. Lemberg
is Senior Vice President, Global Alliances of the Polaroid Corporation. Prior to
joining the Polaroid Corporation, from 1987 to 1995, Mr. Lemberg was the Vice
President and General Counsel of Lotus Development Corporation.
DONALD A.B. LINDBERG, M.D. has served as a Director of RoweCom since
December 1999. Dr. Lindberg has been the Director of the National Library of
Medicine, the world's largest biomedical library, since
3
<PAGE>
1984. From 1992-1995, Dr. Lindberg served in a concurrent position as founding
Director of the National Coordination Office for High Performance Computing and
Communications in the Office of Science and Technology Policy, Executive Office
of the President. In 1996, Dr. Lindberg was named by the Health and Human
Services Secretary to be the U.S. Coordinator for the G-7 Global Healthcare
Applications Project.
JEROME RUBIN has served as a Director of RoweCom since May 1995. Mr. Rubin has
been Managing Director of Veronis, Suhler & Associates, Inc., an investment
banking firm specializing in the media and communications industry since 1995.
In 1973, Mr. Rubin founded and was the first president of LEXIS/NEXIS, the first
online legal database service. From 1983 to 1991, Mr. Rubin was the Group Vice
President/Chairman for Professional Information and Book Publishing at the Times
Mirror Company.
PHILIPPE VILLERS has served as a Director of RoweCom since August 1998.
Mr. Villers has been President and Board member of GrainPro, Inc. since 1996.
Since 1981, he has also served as founder, President, and Board member of
Families USA Foundation. From 1985 to 1988, Mr. Villers previously founded and
led Cognition, Inc. where he served as President for three years. Prior to 1988,
he co-founded Computervision, Inc. and Automatix, Inc.
COMPENSATION PLAN
RoweCom Directors who are employees of RoweCom will not be paid any fees or
receive any additional compensation for service as members of the Board of
Directors or any Committee of the Board other than the issuance of options to
purchase shares of Common Stock under the Amended and Restated 1998 Stock Option
Plan, and RoweCom has entered into customary arrangements with respect to
expense reimbursement. Directors who are not employees of RoweCom or any of its
subsidiaries will not be paid any fees or receive any compensation for service
as members of the Board of Directors or any Committee of the Board other than
the issuance of options to purchase shares of Common Stock under the 1999
Non-Employee Director Stock Option Plan, and RoweCom has entered into customary
arrangements with respect to fees and expense reimbursement. RoweCom maintains
Directors' liability insurance and its certificate of incorporation provides for
mandatory indemnification of Directors to the fullest extent permitted by
Delaware law. In addition, RoweCom's certificate of incorporation limits the
liability of its Directors or its stockholders for breaches of the Directors'
fiduciary duties to the fullest extent permitted by Delaware law.
AUDIT AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
RoweCom's Board of Directors has established a Compensation Committee and an
Audit Committee. The Board of Directors met nine times during the fiscal year
ended December 31, 1999. The members of the Compensation Committee are Stanley
Fung, John Kennedy and Thomas Lemberg. The Compensation Committee met eight
times during the fiscal year ended December 31, 1999. The members of the Audit
Committee are Stanley Fung, Thomas Lemberg and Philippe Villers. The Audit
Committee met three times during the fiscal year ended December 31, 1999.
The Compensation Committee is responsible for reviewing and approving all
compensation arrangements for officers of RoweCom and for administering its
stock option and stock purchase plans. During the period from May 1997 to the
end of 1997, the Compensation Committee was composed of Thomas
4
<PAGE>
Lemberg, Daniel Nova, a former director of RoweCom who is affiliated with
Highland Capital Partners III Limited Partnership, a stockholder of RoweCom, and
James Whitaker, a former Director of RoweCom who is affiliated with Working
Ventures Canadian Fund Inc. All executive compensation determinations for
RoweCom's 1999 fiscal year were made by these members of the Compensation
Committee.
The Board of Directors recommends you vote FOR the six nominees described above.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
RoweCom's executive compensation program is administered by the Compensation
Committee of the Board (the "Committee"). The role of the Committee, which is
comprised of three outside non-employee directors, is to review and approve the
base salaries, bonuses, stock options and other compensation of the executive
officers and management-level employees of RoweCom. The Committee also
administers RoweCom's stock option plans.
RoweCom's executive compensation program utilizes RoweCom performance,
individual performance and an increase in stockholder value over time as
determinants of executive pay levels. These principles are intended to motivate
executive officers to improve the financial position of RoweCom, to hold
executives accountable for the performance of the organizations for which they
are responsible, to attract key executives into the service of RoweCom and to
create value for RoweCom's shareholders. The compensation for executive officers
is based on two elements: cash compensation and equity-based compensation.
CASH COMPENSATION
RoweCom reviews executive compensation surveys in both the Internet industry and
general industry to ensure that the total cash compensation provided to
executive officers and senior management remains at a competitive level to
enable RoweCom to attract and retain management personnel with the talents and
skills required to meet the challenges of a highly competitive industry. The
compensation of executive officers is reviewed annually by the Committee.
BONUSES
RoweCom's executive officers are eligible for an annual cash bonus. Annual
bonuses are determined on the basis of individual and corporate performance. One
of the most significant corporate performance measures for bonus payments is
contribution to operating results. Payments to named executive officers in 1999
were made in the following amounts: Walter Crosby $61,000; Ronald Grigg $34,000
and Stephen Vozella $39,000.
EQUITY-BASED COMPENSATION
In fiscal year 1999, the Compensation Committee emphasized equity-based
compensation, principally in the form of options, as the cornerstone of
RoweCom's executive compensation program. Equity awards are typically set by the
Compensation Committee based on industry surveys, each officer's individual
performance and achievements, market factors and the recommendations of
management. In fiscal year
5
<PAGE>
1999, executive officers were eligible to receive grants of stock options under
the 1998 Plan. In addition, executive officers were eligible to participate in
RoweCom's Employee Stock Purchase Plan.
During fiscal year 1999, all of the executive officers of RoweCom received new
option grants under the 1998 Plan. The options granted under the 1998 Plan were
at an exercise price equal to the fair market value of the Common Stock on the
date of grant and generally vest over a three-year period or four-year period
after grant, subject to the participant's continued employment with RoweCom. All
options granted under the 1998 Plan expire ten years from the date of grant,
unless a shorter term is provided in the option agreement or the participant's
employment with RoweCom terminates before the end of such ten-year period.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Dr. Richard R. Rowe, RoweCom's Chief Executive Officer, received a salary of
$253,000 and 150,000 stock options under the 1998 Plan, for the services he
performed for RoweCom in fiscal year 1999.
Members of the Compensation Committee
Stanley Fung, John Kennedy and Thomas Lemberg.
6
<PAGE>
STOCK OWNERSHIP BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS OF ROWECOM
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of April 14, 2000 by (i) each person who, to
the knowledge of RoweCom, owned beneficially more than 5% of the RoweCom Common
Stock outstanding as of such date, (ii) each Director of RoweCom, (iii) each
current executive officer named in the table captioned "Summary Compensation
Table" in this Proxy Statement and (iv) all Directors and executive officers as
a group.
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
ROWECOM PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER (1) COMMON STOCK OWNERSHIP (2)
- ---------------------------------------- ------------ -------------
<S> <C> <C>
Dr. Richard R. Rowe (3)..................................... 1,750,841 16.8%
Brant Investment Limited (4)................................ 793,780 7.6%
Walter Crosby (5)........................................... 32,258 *
Ronald Grigg (6)............................................ 30,038 *
Stephen Vozella (7)......................................... 20,976 *
Stanley Fung (8)............................................ 4,363 *
John Kennedy (9)............................................ 798,143 7.7%
Thomas Lemberg (10)......................................... 10,507 *
Jerome Rubin (11)........................................... 33,241 *
Philippe Villers (12)....................................... 34,476 *
All current Directors and executive officers as a group (15
persons) (13)............................................. 2,716,297 26.1%
</TABLE>
- ------------------------
* Represents less than 1% of the outstanding shares.
(1) Except as otherwise noted, each person or entity named in the table has
sole voting and investment power with respect to the shares. The inclusion
herein of any shares of Common Stock deemed beneficially owned does not
constitute an admission of beneficial ownership of those shares. Unless
otherwise indicated the address of each beneficial owner is c/o
RoweCom Inc., 15 Southwest Park, Westwood, MA 02090.
(2) Applicable percentage of ownership as of April 14, 1999 is based upon
10,399,208 shares of RoweCom Common Stock outstanding on such date.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, and includes voting and investment
power with respect to shares. Shares of Common Stock subject to options
currently exercisable or exercisable within 60 days of the record date are
deemed outstanding for computing the percentage ownership of the person
holding such options, but are not deemed outstanding for computing the
percentage ownership of any other person.
(3) Includes 1,700,841 shares of Common Stock held by Dr. Richard R. Rowe and
an aggregate of 50,000 shares held in trust for the benefit of members of
Dr. Rowe's family.
(4) Brant Investments Limited's address is c/o Working Ventures Canadian
Fund Inc., 250 Bloor Street East, Suite 1600, Toronto, Ontario M4W1E6.
(5) Includes 32,258 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 14, 2000.
7
<PAGE>
(6) Includes 30,038 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 14, 2000.
(7) Includes 20,976 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 14, 2000.
(8) Includes 4,363 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 14, 2000.
(9) Consists of shares beneficially owned by Working Ventures Canadian
Fund Inc. and 4,363 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 14, 2000. Mr. Kennedy is
the representative of Working Ventures Canadian Fund Inc. to RoweCom's
Board of Directors and may be deemed to control the voting and disposition
of the Common Stock held by Working Ventures Canadian Fund Inc.
Mr. Kennedy disclaims beneficial ownership of the Common Stock held by
Working Ventures Canadian Fund Inc. Mr. Kennedy's address is c/o Working
Ventures Canadian Fund Inc., 250 Bloor Street East, Suite 1600, Toronto,
Ontario M4W1E6.
(10) Includes 9,598 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 14, 2000.
(11) Includes 11,343 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 14, 2000.
(12) Includes 6,108 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 14, 2000; and an
aggregate of 10,916 shares of Common Stock held in trust for members of
Mr. Villers' family.
(13) Includes 103,843 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 14, 2000.
8
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the compensation
earned during the years ended December 31, 1998 and 1999 for (i) RoweCom's Chief
Executive Officer and (ii) each other executive officer of RoweCom whose total
salary and bonus exceeded $100,000 for services rendered to RoweCom and its
subsidiaries during 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARD
ANNUAL COMPENSATION (1) ------------
--------------------------------- SECURITIES
FISCAL UNDERLYING
NAME YEAR SALARY ($) BONUS ($) OPTIONS (#)
- ---- -------- ---------- --------- ------------
<S> <C> <C> <C> <C>
Dr. Richard R. Rowe................................... 1999 $253,000 -- 150,000
Chairman of the Board, President and Chief Executive 1998 $153,000 $40,000 --
Officer
Walter Crosby......................................... 1999 $145,000 $61,000 43,962
Vice President and Chief Technical Officer 1998 $ 58,000 $20,000 55,207
Ronald Grigg.......................................... 1999 $ 93,000 $34,000 13,962
Vice President, Design and Development 1998 $ 88,000 $16,000 8,726
Louis Hernandez, Jr. (2).............................. 1999 $149,000 -- 41,886
Executive Vice President and Chief Financial Officer 1998 $124,000 $40,000 140,687
Stephen Vozella....................................... 1999 $125,000 $39,000 13,962
Vice President, Fulfillment 1998 $ 62,000 $20,000 55,207
Steven Woit (3)....................................... 1999 $ 92,000 -- 13,962
Vice President, Content 1998 $119,000 $20,000 55,207
</TABLE>
- ------------------------
(1) Excludes certain perquisites and other benefits, the amount of which did not
exceed 10% of the employee's total salary and bonus.
(2) Mr. Hernandez was our Executive Vice President and Chief Financial Officer
until he resigned effective November 12, 1999. As of December 31, 1999,
97,581 of the shares underlying his options had vested and become
exercisable, 70,821 of which were acquired by exercise by December 31, 1999.
Mr. Hernandez' remaining options have expired.
(3) Mr. Woit was our Vice President of Content until he resigned effective
September 15, 1999. As of December 31, 1999, 29,251 of the shares underlying
his options had vested and become exercisable, 28,462 of which were acquired
by exercise by December 31, 1999. Mr. Woit's remaining options have expired.
EMPLOYMENT AND NON-COMPETITION AGREEMENTS
None of RoweCom's executive officers has an employment contract, and each of
such officers serves at the discretion of RoweCom's Board of Directors.
8
<PAGE>
Dr. Rowe, Ms. Bergquist and Messrs. Sands, Krzywicki, Crosby and Grigg are each
parties to Non-Competition Agreements with RoweCom under which they have agreed
not to compete with the business of RoweCom or solicit its customers or
employees for a period of 18 months after termination of employment, in the case
of Dr. Rowe, and 12 months after termination of employment, in the case of each
of the other officers. Under the terms of these non-competition agreements, if
the relevant officer is terminated other than for cause, as defined in the
non-competition agreements, or resigns for good reason, also as defined in the
non-competition agreements, RoweCom will pay to the officer for the duration of
the non-competition period a monthly non-competition payment equal to two-thirds
of the officer's monthly salary at the time of termination. RoweCom has the
option of ceasing these payments at any time during the non-competition period,
at which time the officer's non-competition and related obligations under the
non-competition agreement would cease.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning stock options
granted to each of the officers named in the Summary Compensation Table that
received such options during 1999. No stock appreciation rights were granted to
these individuals during 1999.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
---------------------------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTIONS TERM (2)
OPTIONS EMPLOYEES PRICE EXPIRATION ----------------------
NAME GRANTED (1) IN 1999 PER SHARE DATE 5% 10%
- ---- ----------- ------------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dr. Richard R. Rowe......... 150,000 18.00% $39.88 11/12/09 4,577,891 10,068,550
Walter Crosby............... 6,981 0.84% $10.40 1/8/09 418,855 674,390
6,981 0.84% $16.00 3/8/09 379,761 635,927
30,000 3.60% $18.88 9/1/09 1,545,578 2,643,710
Ronald Grigg................ 6,981 0.84% $10.40 1/8/09 418,855 674,390
6,981 0.84% $16.00 3/8/09 379,761 635,927
Louis Hernandez, Jr. (3).... 20,943 2.51% $10.40 1/8/09 1,256,565 2,023,171
20,943 2.51% $16.00 3/8/09 1,139,284 1,905,890
Stephen Vozella............. 6,981 0.84% $10.40 1/8/09 418,855 674,390
6,981 0.84% $16.00 3/8/09 379,761 635,927
Steven Woit (4)............. 6,981 0.84% $10.40 1/8/09 418,855 674,390
6,981 0.84% $16.00 3/8/09 379,761 635,927
</TABLE>
- ------------------------
(1) Shares underlying options generally vest over a four-year period, unless
accelerated in accordance with the stock option agreements governing such
stock options.
(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based upon assumed appreciation rates of five percent and ten percent in
the fair market value of shares of RoweCom Common Stock from the fair market
value on the date of grant, which rates are set by the Securities and
Exchange Commission and compounded annually from the date the respective
options were granted to their expiration date. The gains shown are net of
option exercise prices, but do not include deductions
9
<PAGE>
for taxes or other expenses associated with the exercises. Actual gains, if
any, are dependent on the performance of the RoweCom Common Stock and the
date on which the option is exercised. We cannot assure you that the amounts
reflected will be achieved or will otherwise be indicative of the actual
amounts received, if any.
(3) Mr. Hernandez was our Executive Vice President and Chief Financial Officer
until he resigned effective November 12, 1999. As of December 31, 1999,
97,581 of the shares underlying his options had vested and become
exercisable, 70,821 of which were acquired by exercise by December 31, 1999.
Mr. Hernandez' remaining options have expired.
(4) Mr. Woit was our Vice President of Content until he resigned effective
September 15, 1999. As of December 31, 1999, 29,257 of the shares underlying
his options had vested and become exercisable, 28,462 of which were acquired
by exercise by December 31, 1999. Mr. Woit's remaining options have expired.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning option exercises
during 1999 and option holdings at December 31, 1999 with respect to each of the
officers named in the Summary Compensation Table that held options.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
SHARES NUMBER OF SHARES UNDERLYING OPTIONS AT
ACQUIRED OPTIONS AT YEAR END YEAR END (2)
ON EXERCISE VALUE ------------------------------- ------------
NAME (#) REALIZED ($) EXERCISABLE (1) UNEXERCISABLE EXERCISABLE
- ---- ----------- ------------ --------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Dr. Richard R. Rowe.............. -- -- -- 150,000 --
Walter Crosby.................... -- -- 21,853 43,962 975,955
Ronald Grigg..................... 8,726 389,703 17,452 13,962 779,406
Louis Hernandez, Jr. (3)......... 70,821 3,162,866 26,760 41,886 1,164,780
Stephen Vozella.................. 7,250 323,785 12,302 13,962 873,192
Steven Woit (4).................. 28,462 1,271,113 -- 13,962 --
</TABLE>
- ------------------------
(1) "Exercisable" refers to those options that were both exercisable and vested,
while "Unexercisable" refers to those options that were unvested.
(2) Value is determined by subtracting the exercise price per share from $45.38
per share, the closing price of shares of RoweCom Common Stock reported on
Nasdaq's National Market on December 31, 1999, and multiplying the result by
the number of shares underlying the options.
(3) Mr. Hernandez was our Executive Vice President and Chief Financial Officer
until he resigned effective November 12, 1999. As of December 31, 1999,
97,581 of the shares underlying his options had vested and become
exercisable, 70,821 of which were acquired by exercise by December 31, 1999.
Mr. Hernandez' remaining options have expired.
(4) Mr. Woit was our Vice President of Content until he resigned effective
September 15, 1999. As of December 31, 1999, 29,251 of the shares underlying
his options had vested and become exercisable, 28,462 of which were acquired
by exercise by December 31, 1999. Mr. Woit's remaining options have expired.
10
<PAGE>
PROPOSAL TWO--
ISSUANCE OF CONVERTIBLE NOTES AND WARRANTS
Pursuant to the Securities Purchase Agreement, dated as of October 13, 1999, by
and among RoweCom and HFTP Investment, L.L.C. and Leonardo, L.P., RoweCom issued
convertible notes and warrants to those parties in the aggregate amount of
$20.0 million. The notes are convertible into and the warrants are exercisable
for shares of RoweCom Common Stock.
The Securities Purchase Agreement requires RoweCom to solicit the approval of
its stockholders for the issuance of such securities at the first meeting of the
RoweCom stockholders occurring after the issuance of the securities under that
agreement. Accordingly, the RoweCom Board of Directors is seeking the vote of
RoweCom stockholders to ratify and approve the issuance of the convertible notes
and warrants, and the Common Stock issuable upon their respective conversion or
exercise.
CONVERTIBLE NOTES
Pursuant to the terms of the Securities Purchase Agreement, dated as of
October 13, 1999, by and among RoweCom, Leonardo, L.P. and HFTP Investment
L.L.C., RoweCom issued convertible notes in the aggregate principal amount of
$20.0 million, which bear interest at the stated rate of 6% per year payable at
maturity or upon conversion or redemption of the principal. The notes are
convertible into shares of RoweCom's Common Stock at the holder's election,
provided that the holders are not entitled to voluntarily cause the conversion
on or prior to January 11, 2001 unless conditions exist permitting an
acceleration of the conversion rights, but will otherwise automatically convert
upon maturity pursuant to the terms of the notes. The number of shares of
RoweCom Common Stock into which the notes convert is based upon the outstanding
principal plus interest owing on each note and the dollar volume-weighted
average price of the Common Stock. In addition to a conversion feature, the
notes also provide by their terms for a redemption of the outstanding notes for
cash inuring to the benefit of either RoweCom or a holder depending on
conditions, which may exist.
The Securities Purchase Agreement provides that RoweCom may elect to cause the
holders of the convertible notes to purchase additional convertible notes in the
aggregate principal amount of $15.0 million upon the occurrence of specified
conditions. This option is not presently exercisable. Any additional issuance of
convertible notes would be on the terms discussed above.
WARRANTS TO PURCHASE COMMON STOCK
Under the terms of the Securities Purchase Agreement described above, RoweCom
also issued to Leonardo, L.P. and HFTP Investment L.L.C. warrants to purchase an
aggregate of 224,000 shares of RoweCom Common Stock at an exercise price of
approximately $27.50 per share, which may be exercised at the holder's election
on a net or "cashless" basis.
The Securities Purchase Agreement also provides that upon specified conditions,
RoweCom may elect to cause the holders of the warrants to purchase additional
warrants exercisable for a number of shares of Common Stock calculated based
upon the trading price of RoweCom's Common Stock. Any additional issuance of
warrants would be on the terms discussed above.
11
<PAGE>
REGISTRATION RIGHTS
In connection with the sale of the convertible notes and warrants described
above pursuant to the Securities Purchase Agreement, the parties also signed a
Registration Rights Agreement that provides the holders of the convertible notes
and warrants with certain rights to the registration of the shares of Common
Stock issuable upon conversion of the notes or exercise of the warrants.
According to the terms of the agreement, RoweCom filed a short-form registration
statement on Form S-3 on March 16, 2000, which should be effective no later than
June 20, 2000. The warrant and note holders have also been granted so-called
"piggyback rights" to participate in any registration by the company of its
stock during a specified period which ends on the earlier of all registrable
shares becoming eligible for resale under Rule 144 or having been sold by the
warrant holders.
The Board of Directors recommends a vote FOR approval of the proposal to ratify
and approve the issuance of the convertible notes and warrants, and the Common
Stock issuable upon their respective conversion or exercise.
PROPOSAL THREE--
AMENDMENT TO THE AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN
RoweCom's Amended and Restated 1998 Stock Incentive Plan currently provides for
the issuance of up to 1,391,503 shares of Common Stock through December 31,
2000. The Board of Directors voted to amend the plan, subject to shareholder
approval, to increase the number of shares of Common Stock authorized for
issuance thereunder by 500,000 shares to 1,891,503 shares through December 31,
2000 and to decrease the amount of shares available in subsequent years, through
May 4, 2008 the termination of the plan, by 500,000 shares. The aggregate amount
of shares of Common Stock in the plan will remain unchanged at
4,363,125 shares. The Board of Directors' primary reason for adopting the
amendment to the plan was to enhance RoweCom's ability to attract, retain and
motivate qualified employees. In addition, the recent acquisition of Dawson
Subscription's Business added approximately 300 persons eligible to receive
options and awards under the plan. The following summary of the plan is
qualified in all respects by reference to the full text of the plan, which is
available upon request to the Secretary of RoweCom.
SUMMARY OF THE 1998 PLAN
In February 1999, RoweCom's Board of Directors and stockholders approved
RoweCom's Amended and Restated 1998 Stock Incentive Plan, which provides for the
grant of incentive stock options, nonqualifed stock options and restricted stock
awards to employees (including officers and employee directors) and consultants.
A maximum of 1,391,503 shares of Common Stock are currently reserved for
issuance pursuant to this plan. This maximum number of shares of Common Stock
increased on January 1, 2000 by 519,878 shares from 872,625 shares due to a
provision in the plan stating that the maximum amount of shares will increase,
effective each January 1, and thereafter during the term of the plan, by an
additional number of shares of Common Stock equal to 5% of the total number of
shares of Common Stock issued and outstanding as of the close of business on the
preceding December 31. The maximum amount of shares of Common Stock that may be
issued pursuant to this plan is 4,363,125 shares. No participant in this plan
may in any year be granted stock options or awards with respect to more than
383,955 shares of Common Stock.
12
<PAGE>
The plan is administered by the Compensation Committee of RoweCom's Board of
Directors, which has the authority to determine which eligible individuals are
to receive options or restricted stock awards, the terms of such options or
awards, the status of such options as incentive or nonqualified stock options
under the federal income tax laws, including the number of shares, exercise or
purchase prices and times at which the options become and remain exercisable or
restricted stock vests and the time, manner and form of payment upon exercise of
an option. The exercise price of options granted under this plan may not be less
than 85% of the fair market value of a share of Common Stock on the date of
grant, or 100%, in the case of incentive stock options. The options become
exercisable at such time or times as are determined by the Compensation
Committee and expire after a specified period that may not exceed ten years.
Upon the acquisition of 50% or more of RoweCom's outstanding Common Stock
pursuant to a hostile tender offer, each option granted to an officer of
RoweCom, if it has been outstanding for at least six months, will automatically
be cancelled in exchange for a cash distribution to the officer based upon the
difference between the tender offer price and the exercise price of the option.
In the event RoweCom is acquired, vesting of options and restricted stock awards
granted under the plan will accelerate to the extent that the options or
RoweCom's repurchase rights with respect to restricted stock awards are not
assumed by or assigned to the acquiring entity. The Compensation Committee also
has discretion to provide for accelerated vesting of options and restricted
stock awards upon the occurrence of certain changes in control. Accelerated
vesting may be conditioned upon subsequent termination of the affected
optionee's service.
With the consent of an option holder, the Compensation Committee can cancel that
holder's options and replace them with new options for the same or a different
number of shares having an exercise price based upon the fair market value of
RoweCom's Common Stock on the new grant date.
As of April 14, 2000, approximately 500 persons were eligible to receive options
and awards under the plan, including RoweCom's executive officers and
non-employee Directors. The granting of options and awards under the plan is
discretionary and RoweCom cannot now determine the number or type of options to
be granted in the future to any particular person or group. As of April 14,
2000, 63,185 shares had been issued upon the exercise of stock options granted
under this plan, options for 840,234 shares were outstanding and options to
purchase 488,084 shares were available for future grant under this plan.
RoweCom's Board of Directors may amend or modify the plan at any time, subject
to the rights of holders of outstanding options. This plan will terminate on
May 4, 2008.
The Board of Directors believes that the approval of the amendment of the
Amended and Restated 1998 Stock Incentive Plan is in the best interests of
RoweCom and its stockholders and therefore recommends that the stockholders vote
FOR this proposal.
13
<PAGE>
PERFORMANCE GRAPH
RoweCom's Common Stock has been listed for trading on the Nasdaq National Market
under the symbol ROWE since March 9, 1999.
The following graph compares the cumulative stockholder return on the Common
Stock of RoweCom for the period from March 9, 1999, the date of RoweCom's
initial public offering, through December 31, 1999 with the cumulative total
return on (i) the Nasdaq Stock Market Index and (ii) the MG Group Index (the
Internet software and services). During fiscal year 1999, RoweCom paid no
dividends.
This graph assumes the investment of $100 on March 9, 1999, in RoweCom's Common
Stock (at the initial public offering price) and each of the indices listed
above, and assumes dividends are reinvested. Measurement points are on March 9,
1999 and the last trading day of the quarters of 1999.
COMPARE CUMULATIVE TOTAL RETURN AMONG
ROWECOM INC., NASDAQ MARKET INDEX AND MG GROUP
INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ROWECOM MG GROUP NASDAQ
<S> <C> <C> <C>
INC. IINDEX MARKET INDEX
3/9/99 $100.00 $100.00 $100.00
3/31/99 $178.06 $133.24 $107.55
6/30/99 $62.24 $134.17 $117.03
9/30/99 $113.27 $129.84 $118.94
12/31/99 $185.20 $236.17 $175.66
</TABLE>
<TABLE>
<CAPTION>
3/9/99 3/31/99 6/30/99 9/30/99 12/31/99
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
RoweCom........................................ $100.00 $178.06 $ 62.24 $113.27 $185.20
Nasdaq Stock Market............................ 100.00 107.55 117.03 118.94 175.66
MG Group Index................................. 100.00 133.24 134.17 129.84 236.17
</TABLE>
14
<PAGE>
TRANSACTIONS AMONG RELATED PARTIES
In February 1999, RoweCom and Working Ventures entered into the Exchange Option
Exercise Agreement under which Working Ventures agreed to exchange all of its
Rowe Communications Class A preferred stock and Class B preferred stock for
shares of RoweCom's Class A-1 preferred stock and Class B preferred stock,
respectively, effective immediately prior to the consummation of RoweCom's
initial public offering. Under the terms of the Exchange Option Exercise
Agreement and the Second Amended and Restated Stockholders Agreement to which
Working Ventures and RoweCom were then parties, each share of Rowe
Communications Class A preferred stock was exchanged for 1.963 share of
Class A-1 preferred stock of RoweCom and each share of Class B preferred stock
of Rowe Communications was exchanged for one share of Class B preferred stock of
RoweCom. After such exchanges, all of Working Ventures' outstanding shares of
Class A-1 and Class B preferred stock were converted into an aggregate of
1,518,208 shares of RoweCom Common Stock upon the completion of RoweCom's
initial public offering.
On September 7, 1999, Working Ventures was required to transfer, for no
additional consideration, an aggregate of 310,371 shares of RoweCom Common Stock
to RoweCom, which RoweCom subsequently issued to the other stockholders and
optionholders of RoweCom who held stock or options on the date that the RoweCom
Class A preferred stock was originally issued, including Dr. Richard R. Rowe,
the Chairman of the Board, President and Chief Executive Officer of RoweCom,
Thomas Lemberg and Jerome Rubin, each a Director of RoweCom, Louis Hernandez,
Jr., the former Executive Vice President and Chief Financial Officer of RoweCom,
Steven Woit, the former Vice President, Sources of RoweCom, Ronald Grigg, the
Vice President, Design and Development of RoweCom and PV Securities Corp., a
Massachusetts securities corporation of which Philippe Villers, a Director of
RoweCom, is the sole stockholder. Set forth below is a chart that describes the
number of shares of Common Stock that were received by the individuals and
entity named above as a result of the transfer of these shares of Common Stock
by Working Ventures.
<TABLE>
<CAPTION>
SHARE OF COMMON
SHAREHOLDER STOCK RECEIVED
- ----------- ---------------
<S> <C>
Dr. Richard R. Rowe......................................... 258,993
Ronald Grigg................................................ 7,437
Louis Hernandez, Jr......................................... 8,181
Thomas Lemberg.............................................. 909
PV Securities Corp.......................................... 9,774
Jerome Rubin................................................ 6,099
Steven Woit................................................. 3,030
</TABLE>
Working Ventures, Axiom Venture Partners II Limited Partnership, Zero Stage
Capital VI, L.P., Crystal Internet Venture Fund, L.P., Highland Capital
Partners III Limited Partnership and substantially all of the other stockholders
who were stockholders prior to RoweCom's initial public offering are entitled to
certain registration rights with respect to the Common Stock they will hold upon
the consummation of the merger.
We believe that all of the transactions set forth above that were consummated
with parties that may be deemed to be affiliated with RoweCom were made on terms
no less favorable to us than could have been obtained from unaffiliated third
parties. All future transactions with parties that may be deemed
15
<PAGE>
to be affiliated with RoweCom, including loans between RoweCom and its officers,
Directors, principal stockholders and their affiliates, will be approved by a
majority of the Board, including a majority of the independent and disinterested
outside Directors on RoweCom's Board of Directors, and will continue to be on
terms no less favorable to RoweCom than could be obtained from unaffiliated
third parties.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
RoweCom's Directors, executive officers and persons who own more than 10% of a
registered class of RoweCom's securities to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Directors, executive officers and greater-than-10%
stockholders are required by SEC regulation to furnish RoweCom with copies of
all Section 16(a) reports to file.
To RoweCom's knowledge, based solely on a review of copies of such reports
furnished to RoweCom and written representations that no other reports were
required, RoweCom believes that during the year ended December 31, 1999, its
Directors, executive officers and greater-than-10% stockholders complied with
all Section 16(a) filing requirements, with the exception of: Eileen Bergquist,
James Krzywicki, Adam Klein and Jeff Sands who filed late on Form 3 for
ownership of shares of RoweCom. Walter Crosby, Charles Germain and Stephen
Vozella filed late on Form 5.
PROPOSALS OF STOCKHOLDERS
Under regulations adopted by the Securities and Exchange Commission, any
proposal submitted for inclusion in the Company's Proxy Statement relating to
the Annual Meeting of Stockholders to be held in 2001 must be received at
RoweCom's principal executive offices in Westwood, Massachusetts on or before
November 25, 2000. Receipt by RoweCom of any such proposal from a qualified
stockholder in a timely manner will not ensure its inclusion in the Proxy
material because there are other requirements in the Proxy rules for such
inclusions. If RoweCom is not notified of a stockholder proposal by
December 31, 2000, then the proxies held by management of RoweCom provide
discretionary authority to vote on such stockholder proposal, even though the
proposal is not discussed in the Proxy Statement.
OTHER MATTERS
The Board of Directors, knows of no matters, which may properly be and are
likely to be brought before the meeting other than the matters discussed herein.
However, if any other matters properly come before the meeting, the persons
named in the enclosed Proxy will vote in accordance with their best judgment.
The Board of Directors encourages you to have your shares voted by signing and
returning the enclosed form of Proxy. The fact that you will have returned your
proxy in advance will in no way affect your right to vote in person should you
find it possible to attend. However, by signing and returning the proxy or
voting via the Internet or telephone, you have assured your representation at
the meeting. Thank you for your cooperation.
16
<PAGE>
ANNUAL REPORT ON FORM 10-K
A COPY OF THE COMPANY'S COMBINED ANNUAL REPORT TO STOCKHOLDERS AND ANNUAL REPORT
ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 ACCOMPANIES THIS PROXY
STATEMENT. AN ADDITIONAL COPY WILL BE FURNISHED WITHOUT CHARGE TO BENEFICIAL
STOCKHOLDERS OF RECORD UPON REQUEST TO INVESTOR RELATIONS, ROWECOM INC,
15 SOUTHWEST PARK, WESTWOOD, MASSACHUSETTS 02090 OR BY CALLING 1-800-769-3266
17
<PAGE>
DETACH HERE
RWC92B
PROXY
ROWECOM INC.
PROXY FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of ROWECOM INC., a Delaware corporation, hereby
acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated May 2, 2000, and hereby appoints Dr. Richard
R. Rowe and Paul Burmeister, and each of them, with full power of
substitution as proxies, on behalf and in name of the undersigned, to
represent the undersigned at the 2000 Annual Meeting of Stockholders of
ROWECOM INC. to be held on Wednesday, May 31, 2000 at 10:00 a.m., local time,
at its Corporate Headquarters at 15 Southwest Park, Westwood, Massachusetts
and at any adjournment or adjournments thereof, and to vote all shares of
Common Stock which the undersigned would be entitled to vote, if then and
there personally present, on the matters set forth on the reverse side.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER THEREIN BY
STOCKHOLDER DIRECTED. IF NO CONTRARY SPECIFICATION IS MADE, WILL BE VOTED FOR
THE ELECTION OF DIRECTORS, FOR THE ISSUANCE OF CONVERTIBLE NOTES AND
WARRANTS, FOR THE AMENDMENT TO THE AMENDED AND RESTATED 1998 STOCK INCENTIVE
PLAN AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY
COME BEFORE THE MEETING.
- --------------- --------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- --------------- --------------
<PAGE>
DETACH HERE
RWC92A
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
1. ELECTION OF DIRECTORS.
NOMINEES: (01) Dr. Richard R. Rowe, (02) John Kennedy,
(03) Thomas Lemberg, (04) Donald A.B. Lindberg, M.D.,
(05) Jerome Rubin, (06) Philippe Villers.
FOR WITHHELD
FOR WITHHELD
ALL / / / / FROM ALL
NOMINEES NOMINEES
/ /_______________________________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. PROPOSAL TO APPROVE
ISSUANCE OF CONVERTIBLE / / / / / /
NOTES AND WARRANTS
FOR AGAINST ABSTAIN
3. PROPOSAL TO APPROVE THE
AMENDMENT TO THE AMENDED / / / / / /
AND RESTATED 1998 STOCK
INCENTIVE PLAN
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Please sign exactly as your name(s) appear(s) hereon. All holders must sign.
When signing in a fiduciary capacity, please indicate full title as such. If
a corporation or partnership, please sign in corporate or partnership name by
authorized person.
- -----------------------------------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
- -----------------------------------------------------------------------------
Signature:______________________________ Date:______________________________
Signature:______________________________ Date:______________________________
<PAGE>
- --------------------------------------------
VOTE BY TELEPHONE
- --------------------------------------------
It's fast, convenient, and immediate!
Call Toll-Free on a Touch-Tone Phone
1-877-PRX-VOTE (1-877-779-8683).
- ------------------------------------------------------------------------------
FOLLOW THESE FOUR EASY STEPS:
1. READ THE ACCOMPANYING PROXY STATEMENT AND PROXY CARD.
2. CALL THE TOLL-FREE NUMBER 1-877-PRX-VOTE (1-877-779-8683).
3. ENTER YOUR 14-DIGIT VOTER CONTROL NUMBER LOCATED ON YOUR PROXY CARD ABOVE
YOUR NAME.
4. FOLLOW THE RECORDED INSTRUCTIONS.
- ------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT!
Call 1-877-PRX-VOTE anytime!
- ---------------------------------------------
VOTE BY INTERNET
- ---------------------------------------------
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- ------------------------------------------------------------------------------
FOLLOW THESE FOUR EASY STEPS:
1. READ THE ACCOMPANYING PROXY STATEMENT AND PROXY CARD.
2. GO TO THE WEBSITE http://www.eproxyvote.com/rowe
3. ENTER YOUR 14-DIGIT VOTER CONTROL NUMBER LOCATED ON YOUR PROXY CARD ABOVE
YOUR NAME.
4. FOLLOW THE INSTRUCTIONS PROVIDED.
- -------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT!
Go to http://www.eproxyvote.com/rowe anytime!
DO NOT RETURN YOUR PROXY CARD IF YOU ARE VOTING BY TELEPHONE OR INTERNET
