<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
AUDIBLE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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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(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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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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AUDIBLE, INC.
65 Willowbrook Boulevard
Wayne, N.J. 07470
(973) 890-4070
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 31, 2000
The annual meeting of stockholders of Audible, Inc., a Delaware corporation
(the "Company"), will be held on Wednesday, May 31, 2000, at 10:00 a.m., local
time, at the offices of the Company, 65 Willowbrook Boulevard, Wayne, N.J.
07470 for the following purposes:
1. To elect three directors to serve until the 2003 annual meeting of
stockholders, and until their successors are elected and duly qualified;
2. To ratify the appointment of KPMG LLP as our independent auditors for
the year ending December 31, 2000; and
3. To transact such other business as may properly come before the
annual meeting and any adjournment or postponement thereof.
The foregoing matters are described in more detail in the enclosed proxy
statement. The board of directors has fixed the close of business on April 7,
2000, as the record date for the determination of the stockholders entitled to
notice of, and to vote at, the annual meeting and any postponement or
adjournment thereof. Only those stockholders of record of the Company as of the
close of business on that date will be entitled to vote at the annual meeting
or any postponement or adjournment thereof.
By Order of the Board of Directors,
/s/ Nancy A. Spangler
Nancy A. Spangler
Secretary
Wayne, New Jersey
April 28, 2000
<PAGE>
AUDIBLE, INC.
65 Willowbrook Boulevard
Wayne, N.J. 07470
(973) 890-4070
PROXY STATEMENT
Your vote at the annual meeting is important to us. Please vote your shares
of common stock by completing the enclosed proxy card and returning it to us in
the enclosed envelope. This proxy statement has information about the annual
meeting and was prepared by our management for the board of directors. This
proxy statement and the accompanying proxy card are first being mailed to you
on or about April 28, 2000.
GENERAL INFORMATION ABOUT VOTING
Who can vote?
You can vote your shares of common stock if our records show that you owned
the shares on April 7, 2000. A total of 27,476,009 shares of common stock can
vote at the annual meeting. You get one vote for each share of common stock.
The enclosed proxy card shows the number of shares you can vote.
How do I vote by proxy?
Follow the instructions on the enclosed proxy card to vote on each proposal
to be considered at the annual meeting. Sign and date the proxy card and mail
it back to us in the enclosed envelope. The proxyholders named on the proxy
card will vote your shares as you instruct. If you sign and return the proxy
card but do not vote on a proposal, the proxyholders will vote for you on that
proposal. Unless you instruct otherwise, the proxyholders will vote for each of
the three director nominees and for each of the other proposals to be
considered at the meeting.
What if other matters come up at the annual meeting?
The matters described in this proxy statement are the only matters we know
will be voted on at the annual meeting. If other matters are properly presented
at the meeting, the proxyholders will vote your shares as they see fit.
Can I change my vote after I return my proxy card?
Yes. At any time before the vote on a proposal, you can change your vote
either by giving our secretary a written notice revoking your proxy card or by
signing, dating, and returning to us a new proxy card. We will honor the proxy
card with the latest date.
Can I vote in person at the annual meeting rather than by completing the proxy
card?
Although we encourage you to complete and return the proxy card to ensure
that your vote is counted, you can attend the annual meeting and vote your
shares in person.
What do I do if my shares are held in "street name"?
If your shares are held in the name of your broker, a bank, or other
nominee, that party should give you instructions for voting your shares.
1
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How are votes counted?
We will hold the annual meeting if holders of a majority of the shares of
common stock entitled to vote either sign and return their proxy cards or
attend the meeting. If you sign and return your proxy card, your shares will be
counted to determine whether we have a quorum even if you abstain or fail to
vote on any of the proposals listed on the proxy card.
If your shares are held in the name of a nominee, and you do not tell the
nominee by May 21, 2000 how to vote your shares (so-called "broker nonvotes"),
the nominee can vote them as it sees fit only on matters that are determined to
be routine, and not on any other proposal. Broker nonvotes will be counted as
present to determine if a quorum exists but will not be counted as present and
entitled to vote on any nonroutine proposal.
Who pays for this proxy solicitation?
We do. In addition to sending you these materials, some of our employees may
contact you by telephone, by mail, or in person. None of these employees will
receive any extra compensation for doing this.
PROPOSAL NO 1: ELECTION OF DIRECTORS
Our board of directors is divided into three classes. The number of
directors is determined from time to time by the board of directors and is
currently fixed at eight members. A single class of directors is elected each
year at the annual meeting. Subject to transition provisions, each director
elected at each such meeting will serve for a term ending on the date of the
third annual meeting of stockholders after his election and until his successor
has been elected and duly qualified.
Three directors are to be elected at this annual meeting to serve until the
2003 annual meeting, and until their successors are elected and duly qualified.
In the event either nominee is unable or unwilling to serve as a nominee, the
proxies may be voted for any substitute nominee designated by the present board
of directors or the proxy holders to fill such vacancy, or the board of
directors may be reduced in accordance with our bylaws. The board of directors
has no reason to believe that the persons named will be unable or unwilling to
serve as nominees or as directors if elected.
Set forth below is certain information concerning the nominees and the other
incumbent directors:
Directors to be Elected at the 2000 Annual Meeting
R. Bradford Burnham, age 45, has been a director since March 1997. Since May
1996, Mr. Burnham has been a general partner at AT&T Ventures, a group of
venture capital funds. From May 1994 to May 1996, Mr. Burnham was a principal
of AT&T Ventures.
Thomas Hirschfeld, age 37, has been a director since July 1996. Since March
1998, Mr. Hirschfeld has been a managing director of Patricof & Co. Ventures,
Inc., where he was a principal from January 1995 to March 1998. From February
1994 to December 1995, Mr. Hirschfeld was Assistant to the Mayor of New York
City.
Timothy Mott, age 50, has been a director since co-founding Audible in
December 1995 and was the Chairman of the Board of Directors from December 1995
through April 1999. Mr. Mott has been a partner of Ironwood Capital L.L.C., an
investment company, since he co-founded it in January 1993. From October 1990
to July 1995, he was Chairman of Macromedia Inc., a multimedia software
company. Mr. Mott is a director of Electronic Arts, a company he co-founded in
1982.
Directors Whose Terms Expire in 2001
Richard Brass, age 48, has been a director since April 1999. Since November
1997, Mr. Brass has been Vice President, Technology Development at Microsoft
Corporation. From 1989 to July 1997, Mr. Brass was Senior Vice President of
Oracle Corporation.
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W. Bingham Gordon, age 50, has been a director since November 1996. Since
March 1998, Mr. Gordon has been Executive Vice President and Chief Creative
Officer of Electronic Arts Inc., an interactive entertainment company. From
October 1995 to March 1998, he was Executive Vice President, Marketing. From
August 1993 to October 1995, he served as Executive Vice President of EA
Studios.
Winthrop Knowlton, age 69, has been a director since November 1996. Since
1989 Mr. Knowlton has been the Chairman and Chief Executive Officer of
Knowlton Brothers, Inc., a management company for limited partnerships and
offshore funds investing in the United States.
Directors Whose Terms Expire in 2002
Thomas G. Baxter, age 53, has been our Chief Executive Officer and
President and a director since February 2000. From May 1998 to February 2000,
Mr Baxter served as Operating Partner at Evercore Partners, a private equity
and advisory firm. From November 1989 to February 1998, Mr Baxter served as
President of Comcast Cable Communications Inc.
Donald R. Katz, age 47, has been Chairman of the Board of Directors since
April 1999 and as a director since co-founding Audible in November 1995. From
October 1999 to February 2000 and from November 1995 to March 1998, Mr. Katz
served as our President and Chief Executive Officer. Prior to co-founding
Audible, Mr. Katz was an author, business journalist and media consultant for
over fifteen years.
Unless marked otherwise, proxies received will be voted for the election of
the nominees named above.
Recommendation of the Board of Directors
Our board of directors recommends a vote "FOR" the election of the nominees
named above.
THE BOARD OF DIRECTORS AND COMMITTEES
Our board of directors met five times during 1999. The board of directors
acted four times by written consents. Each director attended more than 75% of
the meetings of the board.
The Audit Committee currently consists of R. Bradford Burnham, Thomas P.
Hirschfeld and Winthrop Knowlton and did not meet separately from the board
during 1999. The Audit Committee recommends the firm to be appointed as
independent auditors to conduct the annual audit of our books and records,
reviews the proposed scope and results of the audit, approves the audit fees
to be paid, considers the adequacy or our accounting and financial controls
with the independent public accountants and our financial and accounting staff
and reviews and approves transactions between us and our directors, officers
and affiliates.
The Compensation Committee currently consists of R. Bradford Burnham, W.
Bingham Gordon and Winthrop Knowlton and met six times during 1999, with all
members present. The Compensation Committee reviews and recommends the
compensation arrangements for our management, establishes and reviews general
compensation policies and administers our stock incentive plan and our
restricted stock program.
The Board of Directors currently does not have a nominating committee or a
committee performing the functions of a nominating committee. Although there
are no formal procedures for you to nominate persons to serve as directors,
the board of directors will consider recommendations from you, which should be
addressed to our secretary, Nancy A. Spangler, c/o Piper Marbury Rudnick &
Wolfe LLP, 1850 Centennial Park Drive, Reston, Virginia 20191-1517.
Our directors have received no compensation for serving as directors.
Directors who are not currently employees of the Company are eligible to
receive grants of stock options under our 1999 Stock Incentive Plan.
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EXECUTIVE OFFICERS
In addition to Thomas G. Baxter and Donald R. Katz, Mr. Kaplan is an
executive officer of the Company.
Andrew P. Kaplan, age 46, has been our Vice President, Finance and
Administration and Chief Financial Officer since June 1, 1999. From June 1997
to May 1999, Mr. Kaplan was Chief Financial Officer of Thomson Corporation
Publishing International, a division of The Thomson Corporation. From
September 1995 to May 1997, Mr. Kaplan was Senior Vice President and Chief
Financial Officer for T.C. Advertising, an advertising services company. From
March 1989 to August 1995, Mr. Kaplan was Vice President and Chief Financial
Officer of Time Life, a division of Time Warner Inc.
Our officers are elected by the board of directors on an annual basis and
serve until their successors have been duly elected and qualified.
There are no family relationships among any of the directors or executive
officers of the Company.
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the compensation paid
by us during the last three completed years to our chief executive officer and
the other four most highly compensated officers whose total compensation for
services in all capacities exceeded $100,000 during such year, whom we refer
to as our Named Executive Officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
--------------------------- ---------------------
Restricted
Stock Underlying
Year Salary Bonus(1) Other Awards(2) Options
---- -------- -------- -------- - ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Donald R. Katz............... 1999 $140,000 $106,169 -- -- --
Chairman of the Board 1998 140,000 24,150 -- -- --
of Directors and 1997 140,000 22,375 -- -- --
Chief Executive Officer
Andrew J. Huffman (3)........ 1999 160,269 78,000 -- -- --
President and Chief 1998 152,077 11,250 $7,664(4) -- --
Executive Officer 1997 -- -- -- -- --
J. Travis Millman............ 1999 118,750 42,500 -- -- 75,000
Vice President, 1998 114,125 24,233 11,767(4) -- --
Business Development 1997 21,979 10,500 -- -- --
Brian Fielding............... 1999 117,581 27,500 -- -- --
Vice President, 1998 110,000 7,750 -- -- --
Business and Legal 1997 73,629 11,000 -- -- --
Affairs
Guy Story, Jr................ 1999 108,750 21,938 -- -- --
Vice President, 1998 103,542 14,250 -- -- --
Technology 1997 100,000 16,563 -- -- --
</TABLE>
- --------
(1) Reflects bonuses earned in the fiscal year indicated, paid during the
following fiscal year.
(2) Each Named Executive officer who purchased stock paid for the stock by
means of a promissory note. The price of the stock on the date of purchase
was equal to the fair market value on such date as determined by our board
of directors. The value of the restricted stock held by the Named
Executive Officers at December 31, 1999, calculated on the basis of $15.00
per share, the closing price of our common stock on the Nasdaq National
Market on that date, less the purchase price of such shares, was as
follows:
Mr. Katz, 1,500,000 shares, $22,430,000; Mr. Millman, 300,000 shares,
$4,420,000; Mr. Fielding, 272,500 shares, $4,017,500; and Mr. Story,
375,000 shares, $5,588,000.
(3) Mr. Huffman died in October 1999. Donald R. Katz served as Chief Executive
Officer and President until Thomas G. Baxter was appointed to the position
in February 2000.
(4) Consists of relocation payments.
4
<PAGE>
Options and Restricted Stocks Granted in 1999
On June 1, 1999, we issued Mr. Kaplan an option to purchase 325,000 shares
of common stock and to Mr. Millman an option to purchase 75,000 shares, each at
an exercise price of $8.00 per share, subject to vesting over a four year
period. In March 1999, we sold to Mr. Fielding 112,500 shares of common stock
at an exercise price of $0.27 per share, subject to vesting over a four year
period.
Option Exercises in 1999 and Year-End Value Table
The following table provides information concerning option exercises in 1999
and unexercised options held as of December 31, 1999, by our Named Executive
Officers.
<TABLE>
<CAPTION>
Shares Number of Securities Value of Unexercised
Acquired Underlying in-the-Money
on Value Unexercised Options at Options at
Exercise Received December 31, 1999 December 31, 1999(1)
-------- -------- ------------------------- -------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald R. Katz.......... -- -- -- -- -- --
Andrew J. Huffman....... -- -- -- -- -- --
J. Travis Millman....... -- -- 9,000 66,000 $63,000 $462,000
Brian Fielding.......... -- -- -- -- -- --
Guy Story, Jr........... -- -- -- -- -- --
</TABLE>
- --------
(1) Calculated on the basis of $15.00 per share, the closing price of our
common stock on the Nasdaq National Market on December 31, 1999, less the
exercise price payable for such shares, multiplied by the number of shares
underlying the option.
EMPLOYMENT ARRANGEMENTS
We have not entered into formal employment agreements with any of our Named
Executive Officers. Our employment arrangements with our Named Executive
Officers, which are embodied in enforceable offer letters, provide for a base
salary, which may be increased by our board of directors, and an annual bonus.
Effective January 1, 2000, Mr. Katz's employment arrangement provides him
with a $250,000 base salary, an annual target bonus of 50% paid quarterly
against certain objectives, options to purchase 100,000 shares at $15.00 per
share, 150,000 shares at $20 per share and 200,000 shares at $40 per share.
In February 2000, Mr. Baxter entered into an employment arrangement with us
that currently provides him with a $250,000 base salary, an annual target bonus
of 50% paid quarterly against certain objectives, 100,000 restricted shares at
$8.75 per share, options to purchase 1,500,000 shares at $13.75 per share, and
one year's severance if we terminate his employment.
Mr. Fielding's employment arrangement provides that we pay him one month
severance if we terminate his employment.
Mr. Kaplan's employment arrangement provides him with a $150,000 annual base
salary, a signing bonus of $15,000, payable within three months of his
employment date, and an annual target bonus of $30,000, payable quarterly. Mr.
Kaplan is entitled to six month severance if we terminate his employment. We
also provide him access to a corporate apartment.
We require all our employees to sign agreements which prohibit the
disclosure of our confidential or proprietary information. Each of these
employees also has agreed to non-competition and non-solicitation provisions
that will be in effect during his employment and for one year thereafter.
We have agreed to pay Messrs. Millman, Fielding and Story bonuses in the
following amounts if they are still employed by us on the following dates:
<TABLE>
<CAPTION>
Name Bonus Date
---- ------- ----
<S> <C> <C>
Travis Millman................................. $78,753 September 30, 2001
Brian Fielding................................. 39,488 May 31, 2001
Guy Story, Jr. ................................ 22,604 July 31, 2000
</TABLE>
5
<PAGE>
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee reviews and recommends the compensation
arrangements for our management, establishes and reviews general compensation
policies and administers our stock incentive plan and our restricted stock
program. The Compensation Committee, established in August, 1996, comprises
three members, all of whom are outside directors. None of the directors has any
interlocking or other relationship with us that would call into question his
independence as a Compensation Committee member.
The Compensation Committee seeks to achieve three broad goals in connection
with our executive compensation programs and decisions regarding individual
compensation. First, the Compensation Committee structures executive
compensation programs in a manner that the Committee believes will enable us to
attract and retain key executives. Second, the Compensation Committee
establishes compensation programs that are designed to reward executives for
the achievement of our specified business objectives. By tying compensation in
part to particular goals, the Compensation Committee believes that a
performance-oriented environment is created for our executives. Finally, our
executive compensation programs are intended to provide executives with an
equity interest in the Company so as to link a portion of the compensation of
our executives with the performance of our common stock.
The compensation programs for our executives established by the Compensation
Committee consist of three elements tied to the foregoing objectives: base
salary, annual cash bonus, and stock-based equity incentives achieved primarily
through participation in our 1999 Stock Incentive Plan. In establishing base
salaries for executives, the Compensation Committee monitors standards at
comparable companies, particularly those that are in the same industry or
related industries and/or are located in the same general geographical area as
us, considers historic salary levels of the individual and the nature of the
individual's responsibilities and compares the individual's base salary with
those of our other executives. To the extent determined appropriate, the
Compensation Committee also considers general conditions and our financial
performance in establishing base salaries of executives. In deciding to award
options, the Compensation Committee also considers the number of options
outstanding or previously granted and the aggregate size of current awards.
For the year ended December 31, 1999, increases in the base salaries and
bonuses of Messrs. Katz, Millman, Fielding and Story were tied to performance-
oriented goals set by the Compensation Committee earlier in the year. Each
individual met or exceeded performance goals established by the Compensation
Committee for 1999.
In determining compensation for Messrs. Huffman and Katz, the Compensation
Committee reviewed how chief executive officers of companies in the same
industry as our are compensated. For the 1999 bonus awarded to Mr. Katz, the
Compensation Committee considered our actual performance against the goals set
out in our business plan and other qualitative objectives that had been
previously discussed.
The Compensation Committee granted options in 1999 to Messrs. Kaplan and
Millman which are designed to be a meaningful portion of their overall
compensation and to reinforce our goal of retaining key executives.
Based on its evaluation of the performance of the executive officers, the
Compensation Committee believes that our executive officers are committed to
achieving positive long-term financial performance and enhanced stockholder
value, and that the compensation policies and programs discussed in this report
have motivated our executive officers to work toward these goals.
Section 162(a) of the Internal Revenue Code disallows a tax deduction to
public corporations for compensation over $1,000,000 paid for any year to the
corporation's chief executive officer or to any of the four other most highly
compensated executive officers. The statute exempts qualifying performance-
based
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compensation from the deduction limit if certain requirements are met. The
Compensation Committee currently intends to structure its executive-
compensation packages to meet these requirements.
R. Bradford Burnham
W. Bingham Gordon
Winthrop Knowlton
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
The Compensation Committee of the board of directors was formed in August
1996, and the current members of the Compensation Committee are Messrs.
Burnham, Gordon and Knowlton. None of the members was, during 1999, one of our
officers or employees at any time.
AUDIT COMMITTEE REPORT ON
DECEMBER 31, 1999 AUDITED FINANCIAL STATEMENTS
The Audit Committee recommends the firm to be appointed as independent
auditors to conduct the annual audit of our books and records, reviews the
proposed scope and results of the audit, approves the audit fees to be paid,
considers the adequacy or our accounting and financial controls with the
independent public accountants and our financial and accounting staff and
reviews and approves transactions between us and our directors, officers and
affiliates. The Audit Committee, established in April, 1999, comprises three
members, all of whom are outside directors. None of the members has any
interlocking or other relationships with us that would call into question his
independence, as that term is defined in Rule 4200(a)(15) of the National
Association of Securities Dealers' listing standards, as applicable and as may
be modified or supplemented.
The Audit Committee has reviewed and discussed the audited financial
statements dated as of December 31, 1999 with management. The Audit Committee
has discussed the matters required to be discussed by SAS 61 (Codification of
Statements on Auditing Standards) with the independent auditors. Based on our
review of the audited financial statements and our discussions with management
and the independent auditors, we recommended to the Board of Directors that the
audited financial statements be included in the Company's Annual Report on Form
10-K for the last fiscal year for filing with the Securities and Exchange
Commission.
R. Bradford Burnham
Thomas P. Hirschfeld
Winthrop Knowlton
7
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table shows the number of shares of our common stock
beneficially owned as of March 31, 2000 by:
. each person who we know beneficially owns more than 5% of the common
stock;
. each member of our board of directors;
. each of our Named Executive Officers; and
. the directors and executive officers as a group.
Unless 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 for the persons named in the table is c/o
Audible, Inc., 65 Willowbrook Boulevard, Wayne, New Jersey 07470.
<TABLE>
<CAPTION>
Number of Percent
Shares Beneficially of
Name of Beneficial Owner Owned Shares Outstanding (1)
------------------------ ------------------- ---------------------
<S> <C> <C>
Patricof Group (2)............... 1,132,584 4.1%
C/o Patricof & Co. Ventures,
Inc.
445 Park Avenue, 11th Floor
New York, NY 10022
Microsoft Corporation............ 1,875,000 6.8
One Microsoft Way
Redmond, WA 98052-6399
Richard Brass.................... -- *
R. Bradford Burnham.............. 3,454 *
W. Bingham Gordon................ 47,750 *
Thomas Hirschfeld (3)............ 1,132,584 4.1
Winthrop Knowlton................ 73,750 *
Timothy Mott (4)................. 1,529,876 5.6
Donald R. Katz................... 1,234,500 4.5
Thomas G. Baxter (5)............. 112,501 *
Andrew Kaplan (6)................ 71,500 *
Brian Fielding (7)............... 252,500 .9
J. Travis Millman (8)............ 295,500 1.1
Guy Story, Jr. (9)............... 375,000 1.4
All executive officers and
directors as a group
(9 persons) (10)................ 4,093,424 14.9
</TABLE>
- --------
(1) As of April 7, 2000, we had outstanding 27,476,009 shares of common
stock. The persons named in this table have sole voting power with
respect to all shares of common stock.
(2) Represents (i) 947,558 shares beneficially owned by APA Excelsior IV,
L.P. (ii) 166,802 shares beneficially owned by APA Excelsior/Offshore
L.P. and (iii) 18,224 shares beneficially owned by Patricof Private
Investment Club, L.P.
(3) Represents 1,132,584 shares beneficially owned by the Patricof group,
funds managed by Patricof & Co. Ventures, Inc., of which Mr. Hirschfeld
is a managing director. Mr. Hirschfeld disclaims beneficial ownership of
these shares, except to the extent of his pecuniary interest. Mr.
Hirschfeld's address is c/o Patricof & co. Ventures, Inc.
(4) Includes 36,876 shares issuable upon exercise of warrants beneficially
owned by Ironwood Capital L.L.C., of which Mr. Mott is a managing member.
Mr. Mott disclaims beneficial ownership of these securities, except to
the extent of his pecuniary interest.
8
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(5) Includes 100,000 shares that are subject to the Company's repurchase
option and 12,501 shares issuable upon exercise of an option.
(6) Includes 71,500 shares issuable upon exercise of an option.
(7) Includes 130,500 shares that are subject to the Company's repurchase
option.
(8) Includes 121,500 shares that are subject to the Company's repurchase
option and 16,500 shares issuable upon exercise of an option.
(9) Includes 49,500 shares that are subject to the Company's repurchase
option.
(10) Includes 100,000 shares that are subject to the Company's repurchase
option and 120,877 shares issuable upon exercise of options and warrants.
RELATED TRANSACTIONS
Restricted Stock. In March 1999, we sold to Mr. Fielding 112,500 shares of
restricted common stock at $0.27 per share. Mr. Fielding paid for his shares by
way of an unsecured promissory note that bears interest at 8% per year and is
payable upon the earlier of his termination of employment or when all his
shares are vested.
Options. On June 1, 1999, we issued Mr. Kaplan an option to purchase 325,000
shares of common stock and Mr. Millman an option to purchase 75,000 shares of
common stock, each at an exercise price of $8.00 per share and subject to
vesting over a four year period.
Warrants. In April 1999, in connection with an amendment to our license
agreement with Microsoft, which owns over 5% of our capital stock, we issued to
Microsoft a warrant to purchase 100,000 shares of common stock at $9.00 per
share. This warrant may be exercised until November 18, 2003.
We believe that all the transactions described above were made on terms no
less favorable to us than if such transactions were with non-affiliates.
9
<PAGE>
PERFORMANCE GRAPH
The following graph shows a five month comparison of cumulative total return
on our common stock, based on the market price of our stock assuming
reinvestment of dividends with a comparable return of the Chase H & Q Internet
100 Index and the Nasdaq Stock Market (U.S.) Index, for the period beginning
July 21, 1999, the day our common stock began trading, through December 31,
1999.
COMPARISION OF 5 MONTH CUMULATIVE TOTAL RETURN* AMOUNG AUDIBLE, INC., THE
NASDAQ STOCK MARKET (U.S.) INDEX AND THE CAHSE H & Q INTERNET 100 INDEX
CUMULATIVE TOTAL RETURN
-------------------------------------------------------
#### 7/99 8/99 9/99 10/99 11/99 12/99
AUDIBLE, INC. 100.00 118.06 123.61 116.67 95.83 168.76 166.67
NASDAQ STOCK MARKET 100.00 92.08 95.93 96.01 103.50 115.59 141.45
CHASE H & Q INTERNET 100.00 84.19 88.63 98.11 108.48 136.72 189.92
* $100 INVESTED ON 7/16/99 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
10
<PAGE>
PROPOSAL NO. 2: RATIFICATION OF APPOINTMENT OF AUDITORS
KPMG LLP has served as our independent auditors since September 1996 and has
been selected by our board of directors as our independent auditors for the
year ending December 31, 2000. In the event that ratification of this selection
of auditors is not approved by a majority of the shares of common stock voting
thereon, management will review its future selection of auditors.
Representatives of KPMG LLP are expected to be present at the annual meeting
and will have the opportunity to make a statement if they desire to do so. They
are also expected to be available to respond to appropriate questions.
Unless marked to the contrary, proxies received will be voted FOR
ratification of the appointment of KMPG LLP as the independent auditors for the
current year.
Required Vote
The ratification of the appointment of KPMG LLP as our independent auditors
for the year ending December 31, 2000 requires the affirmative vote of the
holders of a majority of the shares of our common stock present at the annual
meeting in person or by proxy and entitled to vote.
Recommendation of the Board of Directors
Our board of directors recommends a vote "FOR" ratification of the
appointment of KPMG LLP as our independent auditors.
STOCKHOLDER PROPOSALS
To be considered for presentation to the annual meeting to be held in 2000,
a stockholder proposal must be received by Andrew P. Kaplan, Chief Financial
Officer, Audible, Inc., 65 Willowbrook Boulevard, Wayne, N.J. 07470, or by our
corporate secretary, Nancy A. Spangler, c/o Piper Marbury Rudnick & Wolfe LLP,
1850 Centennial Park Drive, Reston, Virginia 20191-1517, no later than March
31, 2001.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Our directors and executive officers must file reports with the Securities
and Exchange Commission indicating the number of shares of our common stock
they beneficially own and any changes in their beneficial ownership. Copies of
these reports must be provided to us. Based on our review of these reports and
written representations from the persons required to file them, we believe each
of our directors and executive officers filed all the required reports during
1999.
OTHER MATTERS
Our board of directors knows of no other business which will be presented to
the annual meeting. If any other business is properly brought before the annual
meeting, proxies in the enclosed form will be voted in respect thereof in
accordance with the judgments of the persons voting the proxies.
11
<PAGE>
It is important that the proxies be returned promptly and that your shares
be represented. You are urged to sign, date and promptly return the enclosed
proxy card in the enclosed envelope.
We have filed an Annual Report on Form 10-K for the year ended December 31,
1999, with the Securities and Exchange Commission. You may obtain, free of
charge, a copy of the Form 10-K by writing to our Chief Financial Officer,
Andrew P. Kaplan, at Audible, Inc., 65 Willowbrook Boulevard, Wayne, N.J. 07470
Our Form 10-K is also available through our website at www.audible.com.
By Order of the Board of Directors,
Nancy A. Spangler
Secretary
Dated: April 28, 2000
Wayne, New Jersey
12
<PAGE>
AUDIBLE, INC.
65 Willowbrook Boulevard
Wayne, N.J. 07470
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby appoints Andrew Kaplan and Nancy A. Spangler,
each with the power to appoint his or her substitute, and hereby authorizes them
to represent and to vote, as designated on the reverse side, all shares of
common stock of Audible, Inc. (the "Company") held of record by the undersigned
on April 7, 2000 at the Annual Meeting of Stockholders to be held on May 31,
2000 at 10:00 a.m., local time, at the offices of the Company, 65 Willowbrook
Boulevard, Wayne, NJ 07470, and any adjournment thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO
DIRECTION IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE
VOTED FOR SUCH PROPOSAL.
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
<TABLE>
DETACH HERE
<S> <C>
[X] Please mark
votes as in
this example
1. Election of Directors to serve until 2002. 2. Ratify the appointment FOR AGAINST ABSTAIN
Nominees: R. Bradfors Burnham, Thomas Hirschfeld and of KPMG LLP as independent [_] [_] [_]
Timothy Mott public accountants.
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT
[_]
|_| Please sign exactly as name appears hereon.
Joint owners each should sign. Executors, administrators,
trustees, guardians or other fiduciaries should give
full title as such. If signing for a corporation please
sign in full corporate name by a duly authorized officer.
Signature: Date: Signature: Date:
------------------------ ------------ ------------------------------ ------------------
</TABLE>
