<PAGE> 1
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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the registrant |X|
Filed by a party other than the registrant |_|
Check the appropriate box:
<TABLE>
<S> <C>
|_| Preliminary proxy statement. |_| Confidential, for use of the
|X| Definitive proxy statement. Commission only (as permitted
|_| Definitive additional materials. by Rule 14a-6(e)(2)).
|_| Soliciting material under Rule 14a-11(c) or Rule 14a-12.
</TABLE>
EDGAR Online, Inc.
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(Name of Registrant as Specified in Its Charter)
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(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) (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 is 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.
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|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
EDGAR ONLINE, INC.
50 WASHINGTON STREET
NORWALK, CONNECTICUT 06854
June 29, 2000
Dear EDGAR Online Stockholders:
On behalf of the Board of Directors of EDGAR Online, Inc., I cordially
invite you to attend our Annual Meeting of Stockholders, which will be held on
August 1, 2000 at 10:00 A.M. (local time) at our offices at 50 Washington
Street, Norwalk, Connecticut 06854.
At this year's meeting, you will vote on (i) the election of seven
directors; (ii) ratification of the appointment of KPMG LLP as independent
public accountants; (iii) approval and ratification of an amendment to the 1999
Stock Option Plan to increase the number of shares reserved for issuance by
800,000 shares to 1,400,000 and (iv) such other business as may properly come
before the Annual Meeting or any adjournments thereof. We have attached a notice
of meeting and a proxy statement that contains more information about these
proposals.
You will also find enclosed a proxy form appointing proxies to vote your
shares at the Annual Meeting. Please sign, date and return your proxy form as
soon as possible so that your shares can be represented and voted in accordance
with your instructions even if you cannot attend the Annual Meeting in person.
Sincerely,
/s/ MARC STRAUSBERG
Marc Strausberg
Chairman of the Board
<PAGE> 3
EDGAR ONLINE, INC.
50 WASHINGTON STREET
NORWALK, CONNECTICUT 06854
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 1, 2000
TO THE STOCKHOLDERS OF EDGAR ONLINE, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the
"Annual Meeting") of EDGAR Online, Inc., a Delaware corporation ("EDGAR Online"
or the "Company"), will be held at the Company's offices, 50 Washington Street,
Norwalk, Connecticut 06854 on August 1, 2000 at 10:00 A.M. (local time) for the
following purposes, as more fully described in the Proxy Statement accompanying
this notice:
(1) ELECTION OF DIRECTORS. To elect seven (7) members of the Board of
Directors to serve until the 2001 Annual Meeting of Stockholders
or until their successors shall have been duly elected and
qualified;
(2) RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS. To ratify the
appointment of KPMG LLP as independent public accountants of the
Company for the fiscal year ending December 31, 2000;
(3) APPROVAL AND RATIFICATION OF AMENDMENT TO THE 1999 STOCK OPTION
PLAN. To increase the number of shares reserved for issuance under
the 1999 Stock Option Plan by 800,000 to 1,400,000; and
(4) OTHER BUSINESS. To transact such other business as may properly
come before the Annual Meeting and any adjournment or postponement
thereof.
Only stockholders of record at the close of business on June 12, 2000
will be entitled to notice of, and to vote at, the Annual Meeting. The stock
transfer books of the Company will remain open between the record date and the
date of the Annual Meeting. A list of stockholders entitled to vote at the
meeting will be available for inspection at the Annual Meeting and for a period
of ten days prior to the meeting during regular business hours at the offices of
the Company listed above.
All stockholders are cordially invited to attend the Annual Meeting in
person. Whether or not you plan to attend the Annual Meeting, your vote is
important. To assure your representation at the Annual Meeting, please sign and
date the enclosed proxy form and return it promptly in the enclosed envelope,
which requires no additional postage if mailed in the United States or Canada.
Should you receive more than one proxy form because your shares are registered
in different names and addresses, each proxy form should be signed and returned
to assure that all your shares will be voted. You may revoke your proxy at any
time prior to the Annual Meeting. If you attend the Annual Meeting and vote by
ballot, your proxy will be revoked automatically and only your vote at the
Annual Meeting will be counted.
The Proxy Statement and the accompanying proxy form are being mailed
beginning on or about June 30, 2000 to stockholders entitled to vote.
By Order of the Board of Directors
/s/ SUSAN STRAUSBERG
Susan Strausberg
Chief Executive Officer and Secretary
Norwalk, Connecticut 06854
June 29, 2000
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
PLEASE READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY FORM AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
<PAGE> 4
EDGAR ONLINE, INC.
------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 1, 2000
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
EDGAR Online, Inc., a Delaware corporation, for use at the Annual Meeting of
Stockholders to be held on August 1, 2000, and any adjournment or postponement
thereof. The Annual Meeting will be held at 10:00 A.M. (local time) at the
Company's offices, 50 Washington Street, Norwalk, Connecticut 06854. This Proxy
Statement, the enclosed proxy card and the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999 are being mailed on or about June
30, 2000 to stockholders entitled to vote at the meeting.
VOTING
The specific proposals to be considered and acted upon at the Annual
Meeting are summarized in the accompanying Notice and are described in more
detail in this Proxy Statement. On June 12, 2000, the record date for
determination of stockholders entitled to notice of and to vote at the Annual
Meeting, 12,458,455 shares of the Company's Common Stock, par value $0.01, were
issued and outstanding. No shares of the Company's preferred stock, par value
$0.01, were outstanding. Each stockholder is entitled to one vote for each share
of Common Stock held by such stockholder on June 12, 2000. Cumulative voting is
not permitted.
Directors are elected by a plurality of the votes, which means the seven
nominees who receive the largest number of properly executed votes will be
elected as directors. Shares that are represented by proxies that are marked
"withhold authority" for the election of one or more director nominees will not
be counted in determining the number of votes cast for those persons. The
affirmative vote of a majority of the shares present (in person or by proxy and
entitled to vote at the Annual Meeting) is needed to ratify the appointment of
KPMG LLP as the Company's independent auditors, and to approve and ratify the
amendment to the 1999 Stock Option Plan. Any other matters properly considered
at the meeting will be determined by a majority of the votes cast.
PROXIES
If the enclosed form of Proxy is properly signed and returned, the
shares represented thereby will be voted at the Annual Meeting in accordance
with the instructions specified thereon. If the Proxy does not specify how the
shares represented thereby are to be voted, the Proxy will be voted FOR the
election of the directors proposed by the Board unless the authority to vote for
the election of such directors is withheld and, if no contrary instructions are
given, the Proxy will be voted FOR the approval of Proposal 2 described in this
Proxy Statement, the Proxy will be voted FOR the approval of Proposal 3
described in this Proxy Statement, and in accordance with the discretion of the
proxy holders as to all other matters that may properly come before the Annual
Meeting. You may revoke or change your Proxy at any time before the Annual
Meeting by filing with the Secretary of the Company, at the Company's principal
executive offices at 50 Washington Street, Norwalk, Connecticut 06854, a notice
of revocation or another signed Proxy with a later date. You may also revoke
your Proxy by attending the Annual Meeting and voting in person.
If any stockholder is unable to attend the Annual Meeting, such
stockholder may vote by proxy. If a proxy is properly executed and returned to
the Company in time to be voted at the Annual Meeting, it will be voted as
specified in the proxy, unless it is properly revoked prior thereto. Votes cast
in person or by proxy at the Annual Meeting will be tabulated by the inspectors
of election appointed for the meeting and will determine whether or not a quorum
is present. The holders of a majority of the shares of stock entitled to vote at
the meeting, present in person or represented by proxy, shall constitute a
quorum for the transaction of business.
<PAGE> 5
SOLICITATION
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the Proxy
and any additional solicitation materials furnished to the stockholders. Copies
of solicitation materials will be furnished to brokerage houses, fiduciaries and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs in
forwarding the solicitation materials to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by a solicitation by
telephone, telegram or other means by directors, officers or employees of the
Company. No additional compensation will be paid to these individuals for any
such services. Except as described above, the Company does not presently intend
to solicit proxies other than by mail.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be
presented by such stockholders at the Company's 2001 Annual Meeting must be
received no later than February 8, 2001 in order that they may be included in
the proxy statement and form of proxy relating to that meeting. Proposals should
be sent to EDGAR Online, Inc., 50 Washington Street, Norwalk, Connecticut 06854,
Attention: Corporate Secretary.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The number of directors on the Board currently consists of seven members
in compliance with the Company's By-laws.
At the Annual Meeting, the stockholders will elect seven directors, who
will serve a one-year term until the annual meeting of stockholders to be held
in 2001 or until a successor is elected or appointed and qualified or until such
directors' earlier resignation or removal. If any nominee is unable or unwilling
to serve as a director, proxies may be voted for a substitute nominee designated
by the present Board. The Board has no reason to believe that the persons named
below will be unable or unwilling to serve as nominees or as directors if
elected. Proxies received will be voted "FOR" the election of all nominees
unless otherwise directed. Pursuant to applicable Delaware corporation law,
assuming the presence of quorum, seven directors will be elected from among
those persons duly nominated for such positions by plurality of the votes
actually cast by stockholders entitled to vote at the meeting who are present in
person or by proxy.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ELECTION OF THE NOMINEES NAMED BELOW.
INFORMATION CONCERNING NOMINEES
Certain information about each of the nominees is set forth below. Each
director has served continuously with the Company since his first election as
indicated below.
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
---- --- -------- --------------
<S> <C> <C> <C>
Marc H. Bell (1) (2) 32 Director 1998
Bruce Bezpa (2) 43 Director 1999
Stefan Chopin (1) 41 Director and Chief Technology Consultant 1996
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C> <C> <C>
Mark Maged (1) 68 Director 1999
Marc Strausberg (3) 65 Chairman of the Board, Chief
Information Officer and Director 1995
Susan Strausberg (3) 61 Chief Executive Officer, Secretary and
Director 1995
Tom Vos (3) 53 President, Chief Operating Officer and 1996
Director
</TABLE>
---------------
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
(3) Member of the Outside Directors Compensation Committee.
MARC H. BELL joined EDGAR Online as a member of the Board of
Directors in August 1998. Mr. Bell has been the Chairman and Chief Executive
Officer of Globix Corporation since its inception in 1989. Mr. Bell has a B.S.
degree from Babson College and an M.S. degree from New York University.
BRUCE BEZPA joined EDGAR Online as a member of the Board of
Directors in March 1999. He currently provides strategic consulting for
companies engaging in document management and communications-related business
solutions. Prior to this, he held a number of positions at Bowne & Co., Inc.,
including Vice President-Strategic Development from July 1996 to September 1999;
Director-Mutual Fund Services from August 1994 to June 1996; and
Director-Marketing from April 1989 to July 1994. Mr. Bezpa holds B.A. and M.B.A.
degrees from Rutgers University.
STEFAN CHOPIN joined EDGAR Online as a member of the Board of
Directors in 1996. As the Chief Technology Consultant to EDGAR Online, Mr.
Chopin is responsible for software interface development and systems integration
and maintenance. Mr. Chopin is the founder and President of Pequot Systems, a
software development and consulting firm. In October 1998, Pequot was acquired
by iXL Enterprises, Inc. and began operating as iXL Financial Services. Prior to
founding Pequot Systems in November 1995, Mr. Chopin served as Vice President of
Engineering for Micrognosis, Inc., a leading provider of trading room systems.
MARK MAGED joined EDGAR Online as a member of the Board of Directors
in March 1999. He served as Chairman from September 1995 to May 2000 and Chief
Executive Officer from January 1997 to October 1999, of Internet Tradeline,
Inc., an operator of electronic shopping malls on the Internet. During the eight
years prior to becoming Chief Executive Officer of Internet Tradeline, Mr.
Maged, either individually or as Chairman of MJM Associates, LLC, engaged in
various private investment banking activities in the United States and
internationally. From 1975 through 1983, he served as President and Chief
Executive Officer of Schroder's Incorporated, which operated banking, investment
banking and investment management businesses as the United States arm of
Schroders PLC, an international merchant bank. He is currently a member of the
Board of Directors of Commodore Holdings Limited. He holds a bachelor's degree
form the City College of New York and both a master's degree and a law degree
from Harvard University.
MARC STRAUSBERG, a co-founder of EDGAR Online, has served as
Chairman of the Board of Directors and President since EDGAR Online was formed
in November 1995. Mr. Strausberg resigned as President upon the election of Tom
Vos to this position in March 1999. In December 1994, Mr. Strausberg co-founded
Internet Financial Network, a financial information vendor and served as IFN's
co-chairman until founding EDGAR Online. From 1992 to 1994, Mr. Strausberg was
the publisher of the Livermore Report, a newsletter that focused on the
valuation of initial public offerings. From August 1987 to December 1994, Mr.
Strausberg served as Chairman and President of Sindex Inc., which provided
computer-based trading operations to individuals, hedge funds and brokerage
firms. Mr. Strausberg oversees product development for EDGAR Online. Mr.
Strausberg, the husband of Ms. Strausberg, EDGAR Online's Chief Executive
Officer, has a B.A. degree from Muhlenberg College.
SUSAN STRAUSBERG, a co-founder of EDGAR Online, has served as Chief
Executive Officer and Secretary since EDGAR Online was formed in November 1995.
From December 1994 until the formation of EDGAR Online, Ms. Strausberg was a
consultant to Internet Financial Network. In her capacity as Chief Executive
Officer, Ms. Strausberg oversees strategic planning and development and is
responsible for the production of the EDGAR Online Web site. Ms.
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<PAGE> 7
Strausberg has served on the Board of Directors for RKO Pictures since December
1998. Ms. Strausberg, the wife of Marc Strausberg, EDGAR Online's Chairman, has
a B.A. degree from Sarah Lawrence College.
TOM VOS joined EDGAR Online as a Director in August 1996 and was elected
Chief Operating Officer in March 1998. Mr. Vos was elected President in March
1999. Mr. Vos is responsible for EDGAR Online's day-to-day operations. From
September 1986 until March 1998, Mr. Vos was Vice President of Marketing at
Bowne & Co., Inc. In that capacity, Mr. Vos was responsible for strategic
planning, acquisitions and new product development. While at Bowne, Mr. Vos was
also responsible for advertising and public relations and for the development of
both Bowne's Web site and its EDGAR services department. Mr. Vos has a B.S.
degree in Physics from Notre Dame University, an M.S. degree in Electrical
Engineering from Ohio State University and an M.B.A. degree from Pace
University.
BOARD COMMITTEES AND MEETINGS
The Board of Directors held 5 meetings and acted by unanimous written
consent on one occasion during the fiscal year ended December 31, 1999 (the
"1999 Fiscal Year"). The Board has an Audit Committee, a Compensation Committee
and an Outside Directors Compensation Committee. Each director attended or
participated in 75% or more of the aggregate of (i) the total number of meetings
of the Board of Directors and (ii) the total number of meetings held by all
committees of the Board on which such director served during the 1999 Fiscal
Year.
The Audit Committee of the Board of Directors reviews, acts on and
reports to the Board of Directors with respect to various auditing and
accounting matters, including the selection of our independent auditors, the
scope of the annual audits, fees to be paid to the auditors, the performance of
our independent auditors and our accounting practices. The members of the Audit
Committee are Messrs. Bell and Bezpa. The Audit Committee held one meeting
during the 1999 Fiscal Year. Messrs. Bell and Bezpa were appointed to the Audit
Committee in March 1999.
The Compensation Committee of the Board of Directors determines the
salaries and incentive compensation of our senior officers and provides
recommendations for the salaries and incentive compensation of our other
employees. The Compensation Committee also administers our various incentive
compensation, stock and benefit plans. The members of the Compensation Committee
are Messrs. Bell, Chopin and Maged. The Compensation Committee held one meeting
during the 1999 Fiscal Year. Messrs. Bell, Chopin and Maged were appointed to
the Compensation Committee in March 1999.
The Board has also established the Outside Directors Compensation
Committee and appointed Marc Strausberg, Susan Strausberg and Tom Vos to be its
members. The Outside Directors Compensation Committee has the responsibility to
administer our 1999 Outside Directors Stock Option Plan. The Outsider Directors
Compensation Committee held one meeting during the 1999 Fiscal Year. Marc
Strausberg, Susan Strausberg and Tom Vos were appointed to the Outside Directors
Compensation Committee in March 1999.
The Company does not have a nominating committee. The functions
customarily performed by a nominating committee are performed by the Board of
Directors as a whole. Any stockholder who wishes to make a nomination at an
annual or special meeting for the election of directors must do so in compliance
with the applicable procedures set forth in the Company's By-Laws. The Company
will furnish copies of the By-Laws provisions upon written request to the
Company's principal executive offices, 50 Washington Street, Norwalk,
Connecticut 06854, Attention: Corporate Secretary.
AUDIT COMMITTEE REPORT
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934, that might incorporate future filings, including this
Proxy Statement, in whole or in part, the following report, the Compensation
Committee Report and the Performance Graph set forth elsewhere in this Proxy
Statement shall not be deemed to be incorporated by reference into any such
filings.
In December 1999, the Securities and Exchange Commission approved the
amendments to the Nasdaq Stock Market, Inc.'s rules relating to the structure
and membership on the audit committee of companies whose stock is traded on
Nasdaq. In response to these new requirements, on June 12, 2000 the Board
adopted a charter for the Audit
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<PAGE> 8
Committee, a copy of which is attached to this Proxy Statement as Exhibit A.
Pursuant to the charter, the Audit Committee makes recommendations as to the
engagement and fees of the independent auditors, reviews the preparations for
and the scope of the audit of EDGAR Online's annual financial statements,
reviews drafts of the statements and monitors the functioning of EDGAR Online's
accounting and internal control systems by meeting with representatives of
management, the independent auditors and the internal auditors.
On February 8, 2000 the Audit Committee met to discuss the fourth
quarter earnings and met with members of KPMG's engagement team to review the
results of the 1999 audit. During this meeting, the Audit Committee discussed
the matters required to be disclosed by Statement on Auditing Standards No. 1
with KPMG. KPMG delivered the written disclosures and letter required by
Independence Standards Board Standard No. 1. This Standard requires auditors to
communicate, in writing, at least annually, all relationships between the
auditors and the Company that, in the auditor's professional judgement, may
reasonably be thought to affect the auditor's independence. The Audit Committee
has received this disclosure and discussed with KPMG its independence from the
Company. In addition, the Audit Committee discussed the audited financial
statements for 1999 and the results of the audit with the Company's management.
Based upon its meetings with KPMG and its review of the audited financial
statements, the Audit Committee recommended to the Board that the audited
financial statements be included in the Company's Annual Report on the Form
10-K.
The Audit Committee plans to meet with KPMG again in 2000 to review the
scope of the 2000 audit.
Submitted by the Audit Committee:
Marc H. Bell
Bruce Bezpa
DIRECTOR COMPENSATION
No cash compensation has ever been paid to any of the directors of EDGAR
Online for service in such capacity. In March 1999, each of our non-employee
directors was granted options to purchase 10,000 shares of common stock at an
exercise price of $4.50 per share. Non-employee directors of EDGAR Online will
be eligible to receive non-discretionary, automatic grants of options every
three years to purchase common stock as part of our 1999 Outside Directors Stock
Option Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No interlocking relationships exist between any members of EDGAR Online's
Board of Directors or Compensation Committee and the board of directors or
compensation committee of any other company, nor has any such interlocking
relationship existed in the past. The Company has business and financial
relationships with Globix Corporation and iXL Enterprises, Inc. Marc Bell is the
Chairman and Chief Executive Officer of Globix Corporation. Stefan Chopin is a
Vice President of iXL Enterprises, Inc. Our relationships with Globix and iXL
are described below.
Globix
In July 1998, we issued a 10% convertible debenture in the principal
amount of $1,000,000 to Globix Corporation along with warrants to purchase
666,667 shares of common stock at an exercise price of $1.50 per share. The
terms of the transaction were determined as the result of arm's length
bargaining between the parties. As part of this transaction, our agreement with
Bowne was amended to modify certain of Bowne's rights and to include Globix as a
party, thereby providing Globix with the same anti-dilution rights, tag-along
rights and Board participation rights as Bowne. In May 1999, Globix converted
its debenture and exercised its warrants, thereby acquiring 1,336,667 shares of
our common stock. In July 1998, we also entered into a five-year hosting
contract with Globix that requires us to co-locate our Internet servers at the
Globix facility in New York City. During 1999 and 1998, we paid Globix a total
of $546,111 and $6,513, respectively under this contract. We believe that the
terms of our agreements with Globix are beneficial to EDGAR Online and no less
favorable to EDGAR Online than terms, which might be available to us from
unaffiliated third parties.
5
<PAGE> 9
Pequot Systems (iXL)
Until June, 1999 when we entered into a separate lease for our facilities
in Norwalk, Connecticut, we and Pequot Systems ("Pequot") shared equally the
costs of a single lease on 6,600 square feet of space pursuant to which EDGAR
Online occupied half of this space and was jointly obligated with Pequot on said
lease. Since our inception, we have outsourced our technology development to
Pequot. During 1995, in partial payment for services rendered, Pequot received
warrants to purchase shares of common stock at an exercise price of $.05 per
share. The warrants were exercised in May 1997. In March 1998, Pequot agreed to
accept shares of our common stock valued at $1.25 per share in partial payment
for services rendered. As a result of these two transactions, Pequot received
359,384 shares of common stock. In 1999 and 1998, we paid Pequot a total of
$989,368 and $610,073, respectively, for services provided. As a result of the
acquisition of Pequot by iXL, an unrelated company, in 1998, the shares owned by
Pequot were transferred to Pequot's founders, including Stefan Chopin, the
founder and President of Pequot. Mr. Chopin has been a member of our Board of
Directors since 1996. We believe that the terms of our agreements with Pequot
are beneficial to EDGAR Online and no less favorable to EDGAR Online than terms,
which might be available to us from unaffiliated third parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The members of the Board of Directors, the executive officers of the
Company and persons who hold more than 10% of the Company's outstanding Common
Stock are subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934 which require them to file reports with respect
to their ownership of the Common Stock and their transactions in such Common
Stock. Based upon (i) the copies of Section 16(a) reports which the Company
received from such persons for their 1999 Fiscal Year transactions in the Common
Stock and their Common Stock holdings, and (ii) the written representations
received from one or more of such persons that no annual Form 5 reports were
required to be filed by them for the 1999 Fiscal Year, the Company believes that
all reporting requirements under Section 16(a) for such fiscal year were met in
a timely manner by its directors, executive officers and greater than ten
percent beneficial owners.
INFORMATION CONCERNING EXECUTIVE OFFICERS
The executive officers of the Company as of the date of this Proxy
Statement, other than Susan Strausberg, Marc Strausberg, Tom Vos, are identified
below. Each executive officer is elected annually by the Company's Board of
Directors and serves at the pleasure of the Board.
<TABLE>
<CAPTION>
NAME AGE POSITION
--------------------- ------- -------------------------------------------
<S> <C> <C>
Greg D. Adams 39 Chief Financial Officer
Jay Sears 33 Senior Vice President of Marketing and Business Development
Celine Duffy 34 Vice President of Internet Marketing
Brian Fitzpatrick 43 Vice President of Corporate Sales
David Trenck 26 Vice President of Operation
</TABLE>
GREG D. ADAMS joined EDGAR Online as Chief Financial Officer in March 1999.
Mr. Adams is a Certified Public Accountant with diversified business experience
in both the public and private sectors. From November 1997 to March 1999, Mr.
Adams served as the Senior Vice President -- Finance and Administration of PRT
Group Inc., a technology solutions and services company. Mr. Adams served as
Chief Financial Officer of PRT Group Inc. from May 1996 to October 1997. From
June 1994 to May 1996, Mr. Adams was the Chief Financial Officer of the Blenheim
Group Inc., a publicly held UK information technology exposition and conference
management company. From August 1983 to June 1994, Mr. Adams served as Senior
Manager in the areas of audit and business advisory services with KPMG Peat
Marwick. He is a member of the New York State Society of Certified Public
Accountants and the American Institute of Certified Public Accountants. Mr.
Adams has a B.B.A. degree in Accounting from the College of William & Mary.
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<PAGE> 10
JAY SEARS joined EDGAR Online as Vice President of Marketing and Business
Development in May 1997, and was promoted to Senior Vice President Business and
Strategy Development, in November 1999. He is responsible for strategic
alliances, content syndication, content sales, advertising sales and public
relations. From September 1995 to April 1997, Mr. Sears was Vice President of
Marketing for Wolff New Media, a publisher of Internet and printed guides to the
Internet. From July 1991 to August 1995, Mr. Sears was a Senior Account
Supervisor at Creamer Dickson Basford, an international marketing,
communications and public relations firm. Mr. Sears has a B.A. degree from
Kenyon College.
CELINE DUFFY joined EDGAR Online as the Director of Member Acquisition in
October 1998, and was promoted to Vice President of Internet Marketing in
November 1999. She is responsible for building and retaining the retail
subscriber base for EDGAR Online. Prior to joining EDGAR Online, Ms. Duffy was
the Manager of Special Projects for the flagship club of the Book of the Month
Club division of Time, Inc. From 1995 to 1996, she was the Director of Marketing
for Equinox Fitness, a health and fitness company with multiple locations in New
York City and Westchester County. From 1989 to 1995, Ms. Duffy held a variety of
positions at CUC International (now Cendant), a leading direct marketer of
membership services. Ms. Duffy has a B.A. from the University of Connecticut.
BRIAN FITZPATRICK joined EDGAR Online as Vice President of Corporate Sales
in March 1999. From August 1998 to March 1999, he was Regional Vice President,
Sales and Marketing for Iverson Financial Systems, Inc., a business information
provider, and from April 1993 to August 1998, he was Vice President, Sales and
Marketing of Newsware, Inc, a financial news service. From August 1991 to March
1993 he was the National Accounts Manager of Desktop Data, a real-time news and
information filtering business. From 1986 to 1991, he was Key Accounts Manager
of Walsh Greenwood Information Systems, a provider of PC-based intelligent
market data systems for the financial services industry. Mr. Fitzpatrick has a
B.A. degree from Boston University.
DAVID TRENCK joined EDGAR Online in December 1995 as its first employee and
was responsible for data entry and customer support. In May 1998, he became Vice
President of Operations. Mr. Trenck is in charge of product implementation and
liaison with iXL, EDGAR Online's primary service offering developer.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Compensation
The following table sets forth the total compensation paid or accrued for
the fiscal years ended December 31, 1999 and 1998 by our Chief Executive Officer
and our five most highly compensated executive officers (other than our Chief
Executive Officer) (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------------------------------------ --------------
SECURITIES
NAME AND PRINCIPAL POSITION UNDERLYING
--------------------------- YEAR SALARY BONUS OTHER OPTIONS (#)
------ -------- ------- ------- --------------
<S> <C> <C> <C> <C> <C>
Susan Strausberg.................. 1999 $150,000 $70,000 (4) ---
Chief Executive Officer 1998 $150,000(1) --- --- ---
Marc Strausberg................... 1999 $150,000 $70,000 (4) ---
Chairman and Chief Information 1998 $150,000(1) --- --- ---
Officer (2)
Tom Vos........................... 1999 $125,000 $70,000 (4) --- 100,000
President and Chief Operating 1998 $ 93,750(3) --- --- 200,000
Officer
Greg Adams........................ 1999 $ 93,269(5) $ 62,500 $ 3,254 125,000
Chief Financial Officer
</TABLE>
7
<PAGE> 11
<TABLE>
<S> <C> <C> <C> <C> <C>
Brian Fitzpatrick................. 1999 $ 91,346 $100,000 --- 60,000
Vice President of
Corporate Sales
Jay Sears......................... 1999 $115,096 $ 70,000 $ 11,760 25,000
Senior Vice President of Marketing 1998 $ 97,400 $ 10,000 --- 65,000
And Business Development
</TABLE>
(1) In 1998, $92,788 of this amount was deferred and not paid.
(2) Mr. Strausberg served as President during 1998.
(3) Mr. Vos joined EDGAR Online as Chief Operating Officer on March 31, 1998
and earns salary at the rate of $125,000 per annum. He was elected by the
Board of Directors to the additional position of President in March 1999.
(4) These bonuses have been awarded as deferred compensation.
(5) Mr. Adams joined EDGAR Online as Chief Financial Officer in May 1999 and
earns salary at the rate of $125,000 per annum.
Option Grants In 1999 Fiscal Year
The following table sets forth certain information regarding stock options
granted to the Named Executive Officers during 1999. We have never granted any
stock appreciation rights.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS (1)
---------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SECURITIES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (3)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION -------------------------------------
NAME GRANTED 1999 (2) SHARE ($) DATE 5% 10%
---- ------- -------- --------- ---- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Susan Strausberg - - - - - -
Marc Strausberg - - - - - -
Tom Vos 100,000 16.76% $4.50 March 25, 2009 $ 751,310 $ 1,462,885
Greg Adams 109,000 18.26% $4.50 March 25, 2009 $ 818,928 $ 1,594,545
16,000 2.68% $9.50 May 25, 2009 $ 40,210 $ 154,062
Brian Fitzpatrick 60,000 10.05% $4.00 March 25, 2009 $ 200,327 $ 378,221
Jay Sears 25,000 4.19% $4.50 March 25, 2009 $ 450,786 $ 877,731
</TABLE>
-------------------------
(1) Each option represents the right to purchase one share of common stock.
The options shown in this table were all granted under our 1996 Stock
Option Plan, except for the 16,000 options granted to Greg Adams, which
were granted under our 1999 Stock Option Plan.
(2) In the year ended December 31, 1999, we granted options to employees to
purchase an aggregate of 596,790 shares of common stock.
8
<PAGE> 12
(3) Amounts represent hypothetical gains that could be achieved for
the respective options if exercised at the end of the option term.
The 5% and 10% assumed annual rates of compounded stock price
appreciation are mandated by the rules of the SEC and do not
represent our estimate or projection of future common stock price
growth. These amounts represent certain assumed rates of
appreciation in the value of our common stock from the fair market
value on the date of grant. Actual gains, if any, on stock option
exercises are dependent on the future performance of the common
stock and overall stock market conditions. The amounts reflected
in the table may not necessarily be achieved.
Aggregated Option Exercises In Last Fiscal Year And Fiscal Year-End Option
Values
The following table sets forth information concerning the exercise of stock
options during the fiscal year ended December 31, 1999 by each of the Named
Executive Officers and the fiscal year-end value of unexercised options. No
options were exercised by any of the Named Executive Officers during this
period.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1999 DECEMBER 31, 1999 (1)
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
NAME
---------------------
<S> <C> <C> <C> <C>
Susan Strausberg..... -- -- -- --
Marc Strausberg...... -- -- -- --
Tom Vos.............. 200,000 100,000 $ 1,425,000 $ 287,500
Greg Adams........... -- 125,000 -- $ 313,375
Brian Fitzpatrick.... -- 60,000 -- $ 202,500
Jay Sears............ 65,000 25,000 $ 463,125 $ 71,875
</TABLE>
---------------------
(1) The fair market value of the common stock as of December 31, 1999 was
$7.375.
Employment Agreements
We entered into a five-year amended and restated employment agreement dated
as of May 6, 1999 with Susan Strausberg. The agreement extends automatically for
an additional year at the end of the initial term and each anniversary
thereafter unless 30-day prior notice of termination is provided by either Ms.
Strausberg or EDGAR Online. The agreement provides for an annual salary of
$150,000, and an annual bonus at the discretion of the Board. In the event there
is a change of control (as defined in the agreement) and Ms. Strausberg's
employment is terminated (either by her or the employer) within one year
thereafter, Ms. Strausberg will receive a severance benefit equal to the product
of 2.99 times the sum of (1) her then applicable annual base salary and (2) the
average of her last two annual cash bonuses. Additionally, the agreement
contains non-compete and non-solicitation provisions effective during the term
of her employment and for one year thereafter.
We entered into a five-year amended and restated employment agreement dated
as of May 6, 1999 with Marc Strausberg. The agreement extends automatically for
an additional year at the end of the initial term and each anniversary
thereafter unless 30-day prior notice of termination is provided by either Mr.
Strausberg or EDGAR Online. The agreement provides for an annual salary of
$150,000, and an annual bonus at the discretion of the Board. In the event there
is a change of control (as defined in the agreement) and Mr. Strausberg's
employment is terminated (either by him or the employer) within one year
thereafter, Mr. Strausberg will receive a severance benefit equal to the product
of 2.99 times the sum of (1) his then applicable annual base salary and (2) the
average of his last two annual cash bonuses. Additionally, the agreement
contains non-compete and non-solicitation provisions effective during the term
of his employment and for one year thereafter.
9
<PAGE> 13
We have entered into a two-year employment agreement dated April 23, 1999
with Tom Vos to serve as President and Chief Operating Officer. The agreement
extends automatically for an additional year at the end of the initial term and
each anniversary thereafter unless 30-day prior notice of termination is
provided by either Mr. Vos or EDGAR Online. The agreement provides Mr. Vos with
an annual salary of $125,000 and an annual bonus at the discretion of the Board.
In addition, if Mr. Vos remains employed by us at the end of the initial term,
he will be entitled to receive a retention bonus equal to two years of his then
applicable base salary, plus the average of his last two annual cash bonuses.
Mr. Vos will also receive a severance payment identical to the retention bonus
described above in the event there is a change of control (as defined in the
agreement) and Mr. Vos' employment is terminated (either by him or the employer)
within one year thereafter. Additionally, the agreement contains a non-compete
and non-solicitation provision effective during the term of his employment and
for one year thereafter.
We have entered into a three-year amended and restated employment agreement
dated May 3, 1999 with Greg Adams to serve as Chief Financial Officer. The
agreement extends automatically for an additional year at the end of the initial
term and each anniversary thereafter unless 30-day prior notice of termination
is provided by either Mr. Adams or EDGAR Online. The agreement provides Mr.
Adams with (1) an annual salary of $125,000, (2) an annual bonus at the
discretion of the Board, provided that Mr. Adams will be entitled to a minimum
bonus of $62,500 for the first year of his employment and (3) a $500 monthly car
allowance. Mr. Adams also received options to purchase (a) 109,000 shares of
common stock at an exercise price of $4.50 per share, which, based on certain
acceleration incentives currently vests 50% in year one and 50% in year two and
(b) 16,000 shares of common stock at the initial public offering price per
share, which will vest equally over a three-year period. In addition, the
agreement contains a severance arrangement whereby Mr. Adams is entitled to
receive a payment determined as follows in the event he is terminated without
cause: (a) six months salary if the termination occurs within the first six
months of his employment, (b) twelve months salary if the termination occurs
between the seventh and eighteenth month of his employment and (c) eighteen
months salary if the termination occurs at anytime following the eighteenth
month of his employment. Additionally, the agreement contains a non-compete and
non-solicitation provision effective during the term of his employment and for
one year thereafter.
We have entered into a three-year employment agreement dated March 11, 1999
with Brian Fitzpatrick to serve as Vice President of Corporate Sales. The
agreement provides Mr. Fitzpatrick with (1) an annual salary of $125,000 and (2)
an annual bonus at the discretion of the Board, provided that Mr. Fitzpatrick
will be entitled to minimum annual bonuses of (a) $100,000 for 1999, (b)
$125,000 for 2000 and (c) $150,000 for 2001. Mr. Fitzpatrick received a signing
bonus of $85,000 when he joined us. Mr. Fitzpatrick also received options to
purchase 60,000 shares of common stock at an exercise price of $4.00 per share,
which will vest equally over a three-year period. Additionally, the agreement
contains a non-compete and non-solicitation provision effective during the term
of his employment and for nine months thereafter in the case of the non-compete
provision and one year thereafter in the case of the non-solicitation provision.
We have entered into an employment agreement dated May 19, 1997 with Jay
Sears, which may be terminated by either party upon 30-days prior notice. The
agreement provides Mr. Sears with an annual salary of $80,000 and an annual
bonus at the discretion of the Board. Mr. Sears' annual salary was increased to
$100,000 effective August 1998. If Mr. Sears' employment is terminated without
cause, we will pay him six months of his total annual compensation.
Additionally, the agreement contains non-compete and non-solicitation provisions
effective during the term of his employment and for six months thereafter in the
case of the non-compete provision and one year thereafter in the case of the
non-solicitation provision.
Compensation Committee Report On Executive Compensation
Scope of the Committee's Work
The Compensation Committee of the Board of Directors is composed
entirely of independent outside directors, Messrs. Bell, Chopin and Maged. The
Compensation Committee believes that the compensation programs for the Company's
executive officers should reflect the Company's performance and the value
created for the Company's stockholders. In addition, the compensation programs
should support the short-term and long-term strategic goals and values of the
Company and should reward individual contribution to the Company's success. It
is the opinion of the Compensation Committee that the executive compensation
policies and plans provide the necessary total remuneration program to properly
align the Company's performance and the interests of the Company's stockholders
through the use of
10
<PAGE> 14
competitive and equitable executive compensation in a balanced and reasonable
manner, for both the short and long-term.
Executive Compensation Philosophy and Policies
EDGAR Online's overall compensation philosophy is to provide a total
compensation package that is competitive and enables EDGAR Online to attract,
motivate, reward and retain key executives and other employees who have the
skills and experience necessary to promote the short and long-term financial
performance and growth of the company.
The Compensation Committee recognizes the critical role of its executive
officers in the significant growth and success of the Company to date and its
future prospects. Accordingly, EDGAR Online's executive compensation policies
are designed to (1) align the interests of executive officers and stockholders
by encouraging stock ownership by executive officers and by making a significant
portion of executive compensation dependent upon the Company's financial
performance; (2) provide compensation that will attract and retain talented
professionals, (3) reward individual results through base salary, annual cash
bonuses, long-term incentive compensation in the form of stock options and
various other benefits; and (4) manage compensation based on skill, knowledge,
effort and responsibility needed to perform a particular job successfully.
In establishing salary, bonuses and long-term incentive compensation for
its executive officers, the Compensation Committee takes into account both the
position and expertise of a particular executive, as well as the Committee's
understanding of the competitive compensation for similarly situated executives
in the Company's industry.
Executive Compensation
Base Salary. Salaries for executive officers for 1999 were generally
determined by the Board of Directors on an individual basis at the time of the
hiring. The majority of EDGAR Online's executives were hired prior to the
formation of the Compensation Committee. For 2000, the Compensation Committee
will review the base salaries of the executive officers by evaluating each
executive's scope of responsibility, performance, prior experience and salary
history, as well as the salaries for similar positions at comparable companies.
Bonus. Until the formation of the Compensation Committee, EDGAR Online
had no formal bonus plan. The amount of cash bonuses paid to executives in 1999
was partially based upon the financial results of EDGAR Online and partially
based on the decision of the 1999 Employee Compensation Plan instituted by the
President in March 1999. A total of $317,500 was recommended by the Compensation
Committee, approved by the Board and paid to named executives of the Company. In
addition, deferred bonuses in the amount of $70,000 each were approved for the
Chairman, the Chief Executive Officer and the President. These deferred amounts
become payable when the Company achieves certain performance criteria or upon
certain change of control events.
Long-Term Incentive Awards. The Compensation Committee believes that
equity-based compensation in the form of stock options links the interests of
executives with the long-term interests of EDGAR Online's stockholders and
encourages executives to remain in EDGAR Online's employ. The Company grants
stock options in accordance with its various stock option plans. Grants are
awarded based on a number of factors, including the individual's level of
responsibility, the amount and term of options already held by the individual,
the individual's contributions to the achievement of EDGAR Online's financial
and strategic objectives and industry practices and norms.
Compensation of the Chief Executive Officer
Ms. Strausberg, who has served as EDGAR Online's Chief Executive Officer
and Secretary since its formation in November 1995, was paid a base salary of
$150,000 for the year ended December 31, 1999 and was paid $70,000 as a bonus in
the form of deferred compensation for such period.
In May 1999, the Company entered into an Employment Agreement with Ms.
Strausberg pursuant to which she serves as Chief Executive Officer of the
Company. Ms. Strausberg's salary and other compensation and the terms of her
employment agreement have been established by reference to the salaries and
equity participations of other chief executive officers of companies in EDGAR
Online's industry and in recognition of Ms. Strausberg's unique skills and
importance to EDGAR Online.
11
<PAGE> 15
Internal Revenue Code Section 162(M) Limitation
Section 162(m) of the Internal Revenue Code, enacted in 1993,
generally disallows a tax deduction to publicly held companies for compensation
exceeding $1 million paid to certain of the Company's executive officers. The
limitation applies only to compensation that is not considered to be
performance-based. The non-performance based compensation paid to EDGAR Online's
executive officers in 1999 did not exceed the $1 million limit per officer.
EDGAR Online's Stock Option Plans are structured so that any compensation deemed
paid to an executive officer in connection with the exercise of option grants
made under that plan will qualify as performance-based compensation which will
not be subject to the $1 million limitation. The Compensation Committee
currently intends to limit the dollar amount of all other compensation payable
to the Company's executive officers to no more than $1 million. The Compensation
Committee is aware of the limitations imposed by Section 162(m), and the
exemptions available therefrom, and will address the issue of deductibility when
and if circumstances warrant.
Submitted by the Compensation Committee:
Marc H. Bell
Stefan Chopin
Mark Maged
PROPOSAL NO. TWO
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of KPMG LLP, independent
public accountants for the Company during the 1999 Fiscal Year, to serve in the
same capacity for the year ending December 31, 2000, and is asking the
stockholders to ratify this appointment. The affirmative vote of a majority of
the shares represented and voting at the Annual Meeting is required to ratify
the selection of KPMG LLP.
In the event the stockholders fail to ratify the appointment, the Board
of Directors will reconsider its selection. Even if the selection is ratified,
the Board of Directors in its discretion may direct the appointment of a
different independent accounting firm at any time during the year if the Board
of Directors believes that such a change would be in the best interests of the
Company and its stockholders.
A representative of KPMG LLP is expected to be present at the Annual
Meeting, will have the opportunity to make a statement if he or she desires to
do so, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
FOR THE RATIFICATION OF THE SELECTION OF KPMG LLP TO SERVE AS THE COMPANY'S
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 2000.
PROPOSAL NO. THREE
APPROVAL AND RATIFICATION OF AMENDMENT TO THE 1999 STOCK OPTION PLAN
The Company's stockholders are being asked to approve an amendment to
the Company's 1999 Stock Option Plan. The proposed amendment to the 1999 Stock
Option Plan will increase the number of shares reserved for issuance under the
1999 Stock Option Plan by 800,000 to 1,400,000.
This amendment to the 1999 Stock Option Plan will enable the Company to
continue to grant awards as needed to attract and retain employees and other
service providers. The 1999 Stock Option Plan is intended to enhance the
12
<PAGE> 16
Company's ability to provide individuals with awards and incentives commensurate
with their contributions and competitive with those offered by other employers,
and to increase stockholder value by further aligning the interests of these
individuals with the interests of the Company's stockholders by providing an
opportunity to benefit from stock price appreciation that generally accompanies
improved financial performance. The Board of Directors believes that the
Company's long term success is dependent upon the ability of the Company to
attract and retain highly qualified individuals who, by virtue of their ability
and qualifications, make important contributions to the Company.
The affirmative vote of a majority of the shares present in person or by
proxy at the Annual Meeting and entitled to vote is required for adoption of
Proposal No. 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE AMENDMENT TO THE
1999 STOCK OPTION PLAN.
The following summary of the 1999 Stock Option Plan (the "1999 Plan"),
including the proposed amendment, is subject in its entirety to the specific
language of the 1999 Stock Option Plan, a copy of which is available to any
stockholder upon request.
The 1999 Plan, adopted in March 1999, provides for the granting of
options to purchase up to an aggregate of 600,000 shares of authorized but
unissued common stock (each, an "Option") (subject to adjustment in certain
cases, including stock splits, recapitalization and reorganization) to our
officers, directors, employees and consultants. The proposed amendment to the
1999 Plan provides that the number of shares reserved for issuance will be
increased by 800,000 shares to a total reserve of 1,400,000 shares.
ADMINISTRATION OF THE 1999 PLAN
The Board of Directors currently has full power and authority to
implement, interpret and administer the 1999 Plan, to establish rules and
regulations that it deems appropriate and to make such determinations under the
1999 Plan and any outstanding Option grants or share issuances as it deems
necessary or advisable. Decisions of the Board are final and binding on all
parties who have an interest in the 1999 Plan or any outstanding Option or share
issuance.
OPTION GRANTS
The Board, with the assistance of the Compensation Committee, grants
Options pursuant to the1999 Plan. Such Options are evidenced by agreements in
such form as the Board shall approve. All Options granted under the 1999 Plan
will be clearly identified in the agreement evidencing such Options as either
Incentive Options or as Non-Statutory Options or a combination of both.
AMENDMENT OF THE 1999 PLAN
In general, the Board has complete and exclusive power and authority to
amend or modify the 1999 Plan in any or all respects whatsoever. Notwithstanding
the foregoing, the Board shall not, without the approval of EDGAR Online's
shareholders, amend the 1999 Plan so as to (i) increase the maximum number of
shares issuable under the 1999 Plan, (ii) materially increase the benefits
accruing to individuals who participate in the 1999 Plan, or (iii) materially
modify the eligibility requirements for participation in the 1999 Plan. The
Board may amend the Plan, subject to the limitations cited above, in such manner
as it deems necessary to permit the granting of Options meeting the requirements
of future amendments or issued regulations, if any, to the Internal Revenue Code
or to the Exchange Act.
TERMINATION OF SERVICE
If an optionee ceases to remain in service for any reason other than
death or permanent disability then the period during which each outstanding
Option held by an optionee, to the extent otherwise exercisable, remains
exercisable will be limited to a three-month period following the date of
cessation of service. If an optionee dies or is permanently disabled, the
exercisable period for otherwise exercisable Options is limited to twelve months
following the later of the date of the optionee's cessation of service or death.
The Board has power and authority to extend such time either at the
13
<PAGE> 17
time the Option is granted or at any time while the Option remains outstanding
as it deems appropriate under the circumstances.
INCENTIVE OPTIONS
The exercise price of an Incentive Option shall be the Fair Market Value
of a share of Common Stock as defined in the 1999 Plan. Incentive Options will
not be granted to any individual if, at the time of the proposed grant, the
individual owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any of its "subsidiary
corporations" (within the meaning of section 424 of the Code), unless (I) the
exercise price of such Incentive Option is at least 110% of the fair market
value of a share of the Company's stock at the time such Incentive Option is
granted and (II) such Incentive Option is not exercisable after the expiration
of five years from the date such Incentive Option is granted. The individual
receiving an Incentive Option must be an employee of the Corporation. There will
be no grants after 10 years from the date the Plan is adopted or the date the
plan is approved by the shareholders, whichever is earlier. An Incentive Option
is not transferable other than by will or the laws of descent and distribution.
It is only exercisable during the optionee's lifetime by the optionee.
FEDERAL INCOME TAX CONSEQUENCES
Options granted under the 1999 Plan may either be incentive stock
options that satisfy the requirements of section 422 of the Code or
non-statutory options, which are not intended to meet such requirements. The
federal income tax treatment of the two types of options differs as follows:
Incentive Options. No taxable income is recognized by the optionee at
the time of the Option grant, and no taxable income is generally recognized at
the time the Option is exercised. The optionee will, however, recognize taxable
income in the year in which the purchased shares are sold or otherwise made
subject of a taxable disposition. For federal tax purposes dispositions are
divided into two categories: (i) qualifying and (ii) disqualifying. A qualifying
disposition occurs if the sale or other disposition is made after the optionee
has held the shares for more than two years after the Option grant date and more
than one year after the exercise date. If either of these two holding periods is
not satisfied, then a disqualifying disposition will result.
Upon a qualifying disposition, the optionee will recognize long-term
capital gain in an amount equal to the excess of (i) the amount realized upon
the sale or other disposition of the purchased shares or (ii) the exercise price
paid for the shares. If there is a disqualifying disposition of the shares, then
the excess of (i) the fair market value of those shares on the exercise date
over (ii) the exercise price paid for the shares will be taxable as ordinary
income to the optionee. Any additional gain or loss recognized upon the
disposition will be recognized as a capital gain or loss by the optionee.
If the optionee makes a disqualifying disposition of the purchased
shares, then the Company will be entitled to an income tax deduction, for the
taxable year in which such disposition occurs, equal to the excess of (i) the
fair market value of such shares on the option exercise date over (ii) the
exercise price paid for the shares. If the optionee makes a qualifying
disposition, the Company will not be entitled to any income tax deduction.
Non-Statutory Options. No taxable income is recognized by an optionee
upon the grant of a non-statutory option. The optionee will in general recognize
ordinary income, in the year in which the option is exercised, equal to the
excess of the fair market value of the purchased shares on the exercise date
over the exercise price paid for the shares and the optionee will be required to
satisfy the tax withholding requirements applicable to such income.
If the shares acquired upon exercise of the non-statutory option are
unvested and subject to repurchase by the Company in the event of the optionee's
termination of service prior to vesting in those shares, then the optionee will
not recognize any taxable income at the time of exercise but will have to report
as ordinary income, as and when the Company's repurchase right lapses, an amount
equal to the excess of (i) the fair market value of the shares on the date the
repurchase right lapses over (ii) the exercise price paid for the shares. The
optionee may, however, elect under Section 83(b) of the Code to include as
ordinary income in the year of exercise of the Option an amount equal to the
excess of (i) the fair market value of the purchases shares on the exercise date
over (ii) the exercise price paid for such shares. If the Section 83(b) election
is made, the optionee will not recognize any additional income as and when the
repurchase rights lapses.
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<PAGE> 18
The Company will be entitled to an income tax deduction equal to the
amount of ordinary income recognized by the optionee with respect to the
exercised non-statutory Option. The deduction will in general be allowed for the
taxable year of the Company in which such ordinary income is recognized by the
optionee.
OTHER TERMS
The Board has the authority to accelerate the vesting schedule of,
release from restrictions on transfer of and terminate repurchase or forfeiture
rights with respect to any outstanding award. The Board also may require each
person to whom any shares are issued under the Plan to enter into an agreement
which restricts or prohibits the sale of any stock of the Company by such person
for a reasonable period of time following a public offering of any shares of
stock by the Company.
OTHER MATTERS
The Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend. Discretionary authority with respect to such other matters is granted
by the execution of the enclosed Proxy.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
June 12, 2000 by (i) all persons who are beneficial owners of five percent (5%)
or more of the Company's Common Stock, (ii) each director and nominee for
director, (iii) the executive officers named in the Summary Compensation Table
of the Executive Compensation and Other Information section of this Proxy
Statement and (iv) all current directors and executive officers as a group.
Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares beneficially owned, subject to
community property laws, where applicable. Unless otherwise indicated, the
address for those listed below is c/o EDGAR Online, Inc., 50 Washington Street,
Norwalk, Connecticut 06854.
<TABLE>
<CAPTION>
NUMBER PERCENT
OF OF
NAME OF BENEFICIAL OWNER SHARES (1) CLASS
--------------------------------------------------- ---------------- ----------
<S> <C> <C>
Executive Officers and Directors:
Susan Strausberg (2)...................... 3,312,000 26.58%
Marc Strausberg (3)....................... 3,312,000 26.58%
Tom Vos (4)............................... 290,000 2.28%
Greg Adams (5)............................ 59,833 *
Brian Fitzpatrick (6)..................... 40,000 *
Jay Sears (7)............................. 80,000 *
Stefan Chopin (8)(9)...................... 342,717 2.75%
c/o iXL Enterprises, Inc.
50 Washington Street
Norwalk, CT 06854
Bruce Bezpa(9)............................ 3,333 *
405 Patton Avenue
Piscataway, NJ 08854
Marc Bell(9)(10).......................... 1,340,000 10.76%
c/o Globix Corporation
295 Lafayette Street
New York, NY 10012 (9)
</TABLE>
15
<PAGE> 19
<TABLE>
<S> <C> <C> <C>
Mark Maged (9)............................ 3,333 *
c/o Internet Tradeline, Inc.
111 West 40th Street
New York, NY 10018
All executive officers and directors 5,527,216 42.74%
as a group (12 persons)..................
Other 5% Stockholders:
Globix Corporation........................ 1,336,667 10.73%
295 Lafayette Street
New York, NY 10012
Bowne & Co., Inc.......................... 1,000,000 8.03%
345 Hudson Street
New York, NY 10014
Track Data Corporation.................... 762,210 6.12%
56 Pine Street
New York, NY 10005
</TABLE>
--------------
* Represents beneficial ownership of less than 1%.
(1) Shares of common stock subject to options currently exercisable or
exercisable within 60 days of June 12, 2000 are deemed outstanding for
the purpose of computing the percentage ownership of the person holding
such options but are not deemed outstanding for computing the percentage
ownership of any other person. Unless otherwise indicated below, the
persons and entities named in this table have sole voting and sole
investment power with respect to all shares beneficially owned, subject
to community property laws where applicable.
(2) Includes 156,000 shares owned by Ms. Strausberg's husband, Marc
Strausberg, EDGAR Online's Chairman of the Board and 3,000,000 shares
owned by TheBean LLC. Ms. Strausberg is a managing member of TheBean LLC
and as such she may be deemed to be the beneficial owner of all the
shares held by TheBean LLC. Ms. Strausberg disclaims beneficial ownership
of the shares owned by her husband.
(3) Includes 156,000 owned by Mr. Strausberg's wife, Susan Strausberg, EDGAR
Online's Chief Executive Officer and 3,000,000 shares owned by TheBean
LLC. Mr. Strausberg is a managing member of TheBean LLC and as such he
may be deemed to be the beneficial owner of all the shares held by
TheBean LLC. Mr. Strausberg disclaims beneficial ownership of the shares
owned by his wife.
(4) Includes 250,000 shares issuable upon exercise of options exercisable
within 60 days of June 12, 2000.
(5) Includes 59,833 shares issuable upon exercise of options exercisable
within 60 days of June 12, 2000.
(6) Includes 20,000 shares issuable upon exercise of options exercisable
within 60 days of June 12, 2000.
(7) Includes 80,000 shares issuable upon exercise of options exercisable
within 60 days of June 12, 2000.
(8) Includes shares owned jointly with Barbara Chopin, his wife.
(9) Includes 3,333 shares issuable upon exercise of options exercisable
within 60 days of June 12, 2000.
(10) Includes 1,336,667 shares owned by Globix Corporation. Mr. Bell is the
Chairman and Chief Executive Officer of Globix Corporation. In such
capacities, Mr. Bell may be deemed to be the beneficial owner of such
shares, although he disclaims beneficial ownership except to the extent
of his pecuniary interest, if any.
16
<PAGE> 20
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Bowne & Co., Inc.
In 1997, we borrowed $500,000 pursuant to a line-of-credit extended to us
by Bowne & Co., Inc. These loans were evidenced by promissory notes, which were
originally due on December 30, 1997, each at an interest rate of 12% prior to
the maturity date and 18% thereafter. EDGAR Online and Bowne have subsequently
agreed to two extensions on the repayment of these notes, which were due on
February 28, 2000. These loans were guaranteed by Marc Strausberg. The principal
and accrued interest on the loans was repaid to Bowne on May 31, 1999 with a
portion of the proceeds of our IPO.
EDGAR Online sells certain EDGAR content to Bowne and provides Bowne with
EDGAR Online services in its offices. Bowne also pays EDGAR Online for
advertising it places on the EDGAR Online Web site. In 1999, EDGAR Online
charged Bowne a total of $ 98,000 for these services. We believe that the terms
of our agreements with Bowne are beneficial to EDGAR Online and no less
favorable to EDGAR Online than terms, which might be available to us from
unaffiliated third parties.
Globix Corporation
For information regarding our relationship with Globix, see "Compensation
Committee Interlocks and Insider Participation."
Track Data Corporation
In conjunction with our formation, Track Data Corporation, a business
information company and one of our principal stockholders, extended a $100,000
loan to EDGAR Online at an interest rate of prime plus 2% and received and
subsequently exercised warrants to purchase 810,572 shares of common stock.
Track Data purchases EDGAR content, which it uses in conjunction with the
services that it offers. These services were paid for through reductions in the
principal amount of this loan. During 1999 and 1998, the loan was reduced by
$59,448 and $42,250 in this fashion. We believe that our agreements with Track
Data are beneficial to EDGAR Online and no less favorable to EDGAR Online than
terms, which may be available to us from unaffiliated third parties.
Pequot Systems (iXL)
For information regarding our relationship with iXL, see "Compensation
Committee Interlocks and Insider Participation."
Susan Strausberg And Marc Strausberg
From time to time, we have received cash loans from and have made cash
advances to Susan Strausberg and Marc Strausberg, our founders. These loans bear
interest at the prime rate applied to the net outstanding balance. The net
amounts owed to EDGAR Online at December 31, 1997 and 1998 were $51,114 and
$141,554, respectively. During this same period, Susan Strausberg and Marc
Strausberg agreed to defer all or most of their annual salaries of $150,000
each. The aggregate amount of deferred compensation for the two of them combined
at December 31, 1997 and 1998 was $600,000 and $785,577, respectively. These
deferred salaries, net of the loans outstanding to them, were repaid to Susan
and Marc Strausberg upon consummation of our IPO.
17
<PAGE> 21
STOCK PERFORMANCE GRAPH
The following graph compares, for the periods indicated below, a
comparison of cumulative total stockholder returns for the Company, the Russell
2000 Index and a composite of the following peer group companies: Hoovers, Inc.,
MarketWatch, Inc., Multex Inc., Primark Corp. and TheStreet.com, Inc.
Indexed Price Graph
[Index Price Graph]
<TABLE>
<CAPTION>
Cumulative Total Returns
---------------------------------------------------------
5/26/99 6/99 9/99 12/99
<S> <C> <C> <C> <C>
EDGAR ONLINE, INC. 100.00 84.21 78.29 77.63
PEER GROUP 100.00 107.98 74.33 91.69
RUSSELL 200 100.00 104.16 96.01 97.49
</TABLE>
Notes:
(1) The graph covers the period from May 26, 1999, the effective date of the
Company's initial public offering of shares of its Common Stock, to December 31,
1999.
(2) The graph assumes that $100 was invested in Common Stock of the Company on
May 26, 1999, and in each index or composite, and that all dividends were
reinvested. No cash dividends have been declared on the Company's Common Stock.
(3) Stockholder returns over the indicated period should not be considered
indicative of future stockholder returns.
18
<PAGE> 22
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings made under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate future
filings made by the Company under those statutes, the preceding Stock
Performance Graph is not to be incorporated by reference into any such prior
filings, nor shall such graph be incorporated by reference into any future
filings made by the Company under those statutes.
FORM 10-K
The Company filed an Annual Report on Form 10-K with the Securities and
Exchange Commission on March 30, 2000. A copy of this report is included with
these materials.
By Order of the Board of Directors
/s/ SUSAN STRAUSBERG
Susan Strausberg
Chief Executive Officer and Secretary
Dated: June 29, 2000
19
<PAGE> 23
EXHIBIT A
EDGAR ONLINE AUDIT COMMITTEE CHARTER
ORGANIZATION
This charter governs the operation of the audit committee. The committee shall
review and reassess the charter at least annually and obtain the approval of the
board of directors. The committee shall be appointed by the board of directors
and shall comprise at least three directors, each of whom are independent of
management and the Company. Members of the committee shall be considered
independent if they have no relationship that may interfere with the exercise of
their independence from management and the Company. All committee members shall
be financially literate and at least one member shall have accounting or related
financial management expertise.
STATEMENT OF POLICY
The audit committee shall provide assistance to the board of directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by management and the board. In so
doing, it is the responsibility of the committee to maintain free and open
communication between the committee, independent auditors, the internal auditors
and management of the Company. In discharging its oversight role, the committee
is empowered to investigate any matter brought to its attention with full access
to all books, records, facilities, and personnel of the Company and the power to
retain outside counsel, or other experts for this purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the audit committee is to oversee the Company's
financial reporting process on behalf of the board and report the results of
their activities to the board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The committee in carrying out its
responsibilities believes its policies and procedures should remain flexible, in
order to best react to changing conditions and circumstances. The committee
should take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices, and ethical
behavior.
The following shall be the principal processes of the audit committee in
carrying out its oversight responsibilities.
- The committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the board and the audit committee, as representatives of
the Company's shareholders. The committee shall have the ultimate
authority and responsibility to evaluate and, where appropriate, replace
the independent auditors. The committee shall discuss with the auditors
their independence from management and the Company and the matters
included in the written disclosures required by the Independence Standards
Board. Annually, the committee shall review and recommend to the board the
selection of the Company's independent auditors, subject to shareholders'
approval.
- The committee shall discuss with the independent auditors the overall
scope and plans for their respective audits including the adequacy of
staffing and compensation. Also, the committee shall discuss with
management and the independent auditors the adequacy and effectiveness of
the accounting and financial controls, including the Company's system to
monitor and manage business risk, and legal and ethical compliance
programs. Further, the committee shall meet separately with the
independent auditors, with and without management present, to discuss the
results of their examinations.
- The committee shall review the interim financial statements with
management and the independent auditors prior to
20
<PAGE> 24
the filing of the Company's Quarterly Report on Form 10-Q. Also, the
committee shall discuss the results of the quarterly review and any other
matters required to be communicated to the committee by the independent
auditors under generally accepted auditing standards. The chair of the
committee may represent the entire committee for the purposes of this
review.
- The committee shall review with management and the independent auditors
the financial statements to be included in the Company's Annual Report on
Form 10-K (or the annual report to shareholders if distributed prior to
the filing of Form 10-K), including their judgment about the quality, not
just acceptability, of accounting principles, the reasonableness of
significant judgments, and the clarity of the disclosures in the financial
statements. Also, the committee shall discuss the results of the annual
audit and any other matters required to be communicated to the committee
by the independent auditors under generally accepted auditing standards.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
A = Annually; Q = Quarterly; AN = As Necessary Frequency Planned Timing
------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL MANAGEMENT A Q AN Q1 Q2 Q3 Q4
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Annual Report on Form 10-K and proxy X
------------------------------------------------------------------------------------------------------------------------------------
Quarterly Reports on Form 10-Q * x
------------------------------------------------------------------------------------------------------------------------------------
Assessment of internal control environment and
systems of internal controls X
------------------------------------------------------------------------------------------------------------------------------------
New accounting and financial reporting requirements X
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Other matters (adequacy of staffing, succession
planning, etc.) x
------------------------------------------------------------------------------------------------------------------------------------
Executive session with management x
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT AUDITORS
------------------------------------------------------------------------------------------------------------------------------------
Results of annual audit (including required
communications) x
------------------------------------------------------------------------------------------------------------------------------------
Results of timely quarterly reviews (including required
communications) * x
------------------------------------------------------------------------------------------------------------------------------------
Report on internal control weaknesses and other
recommendations and management response x
------------------------------------------------------------------------------------------------------------------------------------
Scope of interim reviews and annual audit and fees x
------------------------------------------------------------------------------------------------------------------------------------
Required written communication and discussion of
independence x
------------------------------------------------------------------------------------------------------------------------------------
Other matters (adequacy of financial staff, succession
planning, etc.) x
------------------------------------------------------------------------------------------------------------------------------------
Executive session with independent auditors x
------------------------------------------------------------------------------------------------------------------------------------
OTHER MEMBERS OF MANAGEMENT
------------------------------------------------------------------------------------------------------------------------------------
Legal Matters (General Counsel)
------------------------------------------------------------------------------------------------------------------------------------
- Conflict of interest and ethics policies x
------------------------------------------------------------------------------------------------------------------------------------
- Litigation status/regulatory mattes x
------------------------------------------------------------------------------------------------------------------------------------
Information systems matters (MIS Director) x
------------------------------------------------------------------------------------------------------------------------------------
Risk management processes and assessment
(Risk Management Director) x
------------------------------------------------------------------------------------------------------------------------------------
Tax matters (Tax Director) x
------------------------------------------------------------------------------------------------------------------------------------
Others x
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 25
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
A = Annually; Q = Quarterly; AN = As Necessary Frequency Planned Timing
------------------------------------------------------------------------------------------------------------------------------------
AUDIT COMMITTEE A Q AN Q1 Q2 Q3 Q4
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Report results of annual independent audit to the board X
------------------------------------------------------------------------------------------------------------------------------------
Recommend to the board the appointment of
independent auditors X
------------------------------------------------------------------------------------------------------------------------------------
Review annual proxy statement audit committee report
and charter X
------------------------------------------------------------------------------------------------------------------------------------
Evaluate audit committee effectiveness (i.e., self-
assessment) X
------------------------------------------------------------------------------------------------------------------------------------
Reassess the adequacy of the audit committee charter
and obtain board approval X
------------------------------------------------------------------------------------------------------------------------------------
Approve audit committee meeting planner for the
upcoming year and confirm mutual expectations with
management and the auditors X
------------------------------------------------------------------------------------------------------------------------------------
Approve minutes of previous meeting X
------------------------------------------------------------------------------------------------------------------------------------
Report significant matters to the board X
------------------------------------------------------------------------------------------------------------------------------------
Executive session of committee members X
------------------------------------------------------------------------------------------------------------------------------------
Orientation of new members and continuing education
(e.g., accounting and financial topics) X
------------------------------------------------------------------------------------------------------------------------------------
Others matters X
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Note that the entire audit committee will conduct these reviews, however, the
chair of the audit committee may represent the entire committee in order to
facilitate conducting these reviews on a timely basis.
22
<PAGE> 26
EDGAR ONLINE, INC.
PROXY
Annual Meeting of Stockholders, August 1, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF EDGAR
ONLINE, INC.
The undersigned revokes all previous proxies, acknowledges receipt of
the Notice of the Annual Meeting of Stockholders to be held August 1, 2000 and
the Proxy Statement and appoints Susan Strausberg, Chief Executive Officer, and
Tom Vos, President, and each of them, the Proxy of the undersigned, with full
power of substitution, to vote all shares of Common Stock of EDGAR Online, Inc.
(the "Company") which the undersigned is entitled to vote, either on his or her
own behalf or on behalf of any entity or entities, at the Annual Meeting of
Stockholders of the Company to be held at the Company's offices, 50 Washington
Street, Norwalk, Connecticut 06854 on Tuesday August 1, 2000 at 10:00 a.m. local
time (the "Annual Meeting"), and at any adjournment or postponement thereof,
with the same force and effect as the undersigned might or could do if
personally present thereat. The shares represented by this Proxy shall be voted
in the manner set forth below.
1. To elect seven directors to serve for a one-year term ending in
the year 2001 or until each of their successors are duly elected and
qualified;
<TABLE>
<S> <C>
Marc H. Bell
Bruce Bezpa |_| FOR all nominees listed at left (except |_| WITHHOLD AUTHORITY TO VOTE for
as written below to the contrary) all nominees listed at left
Stefan Chopin
Mark Maged
Marc Strausberg
Susan Strausberg
Tom Vos
--------------------------------------------------------------
Instruction: To withhold authority to vote for an individual nominee, write
the nominee's name in the space provided above.
</TABLE>
2. |_| FOR |_|AGAINST |_|ABSTAIN To ratify the appointment of KPMG
LLP as independent public accountants of the Company for the fiscal year
ending December 31, 2000.
3. |_| FOR |_|AGAINST |_|ABSTAIN To approve and ratify an amendment
to the 1999 Stock Option Plan to increase the number or shares reserved
for issuance under the 1999 Stock Option Plan by 800,000 to 1,400,000.
4. |_| FOR |_|AGAINST |_|ABSTAIN In accordance with the discretion
of the proxy holders, to act upon all matters incident to the conduct of
the meeting and upon other matters as may properly come before the
meeting.
The Board of Directors recommends a vote IN FAVOR OF the directors listed
above, a vote IN FAVOR OF the proposal to ratify the appointment of KPMG
LLP as independent public accountants and a vote IN FAVOR OF the proposal
to approve and ratify an amendment to the 1999 Stock Option Plan. This
Proxy, when properly executed, will be voted as specified above. IF NO
SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED IN FAVOR OF THE ELECTION
OF THE DIRECTORS LISTED ABOVE, TO RATIFY THE APPOINTMENT OF KPMG LLP AS
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS, TO APPROVE AND RATIFY AN
AMENDMENT TO THE 1999 STOCK OPTION PLAN AS SET FORTH ABOVE AND IN
ACCORDANCE WITH THE DISCRETION OF THE PROXIES OR PROXY WITH RESPECT TO
ANY OTHER MATTERS THAT COME BEFORE THE ANNUAL MEETING.
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY IN THE ENVELOPE PROVIDED FOR THIS
PURPOSE.
Please print the name(s) appearing
on each share certificate(s) over
<PAGE> 27
which you have voting authority:
--------------------------------------
<TABLE>
<S> <C> <C>
Please sign your name:
------------------------------ ---------------------------------------- ------------------------
Signature(s) Signature if held jointly Date
</TABLE>
