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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Women.com Networks, 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)(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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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
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paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
6. Amount Previously Paid:
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WOMEN.COM NETWORKS, INC.
1820 GATEWAY DRIVE, SUITE 100
SAN MATEO, CA 94404
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 25, 2000
TO THE STOCKHOLDERS OF WOMEN.COM NETWORKS, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Women.com
Networks, Inc., a Delaware corporation (the "Company"), will be held on
Thursday, May 25, 2000 at 10:00 a.m. local time at the Crowne Plaza Hotel, 1221
Chess Drive, Foster City, CA 94404 for the following purposes:
1. To elect three directors to hold office until the 2003 Annual Meeting of
Stockholders.
2. To approve the Company's 1998 Equity Incentive Plan, as amended, to
increase the aggregate number of shares of common stock authorized for
issuance under such plan by 5,850,000 shares.
3. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors of the Company for its fiscal year ending December 31, 2000.
4. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on March 28, 2000,
as the record date for the determination of stockholders entitled to notice of
and to vote at this Annual Meeting and at any adjournment or postponement
thereof.
By Order of the Board of Directors
/s/ MARLEEN R. MCDANIEL
Marleen R. McDaniel
Chairman and Chief Executive Officer
San Mateo, California
April 17, 2000
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD
HOLDER A PROXY ISSUED IN YOUR NAME.
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WOMEN.COM NETWORKS, INC.
1820 GATEWAY DRIVE, SUITE 100
SAN MATEO, CA 94404
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PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS
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MAY 25, 2000
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Women.com Networks, Inc., a Delaware corporation (Women.com or the "Company"),
for use at the Annual Meeting of Stockholders to be held on May 25, 2000, at
10:00 a.m. local time (the "Annual Meeting"), or at any adjournment or
postponement thereof, for the purposes set forth herein and in the accompanying
Notice of Annual Meeting. The Annual Meeting will be held at The Crowne Plaza
Hotel, 1221 Chess Drive, Foster City, CA 94404. The Company intends to mail this
proxy statement and accompanying proxy card on or about April 17, 2000, to all
stockholders entitled to vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
card and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries
and custodians holding in their names shares of common stock beneficially owned
by others to forward to such beneficial owners. The Company may reimburse
persons representing beneficial owners of common stock for their costs of
forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company. No additional compensation will be paid to directors, officers or other
regular employees for such services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of common stock at the close of business on March
28, 2000 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on March 28, 2000 the Company had outstanding and entitled to
vote 46,526,367 shares of common stock.
Each holder of record of common stock on such date will be entitled to one
vote for each share held on all matters to be voted upon at the Annual Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions will be counted towards the
tabulation of votes cast on proposals presented to the stockholders and will
have the same effect as negative votes. Broker non-votes are counted towards a
quorum, but are not counted for any purpose in determining whether a matter has
been approved.
VOTING VIA THE INTERNET OR BY TELEPHONE
For Shares Registered in the Name of a Broker or Bank
A number of brokers and banks are participating in a program provided
through ADP Investor Communication Services that offers telephone and Internet
voting options. If your shares are held in an account with a broker or bank
participating in the ADP Investor Communication Services program, you may vote
those shares telephonically by calling the telephone number shown on the voting
form received from your
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broker or bank, or via the Internet at ADP Investor Communication Services'
voting Web site at www.proxyvote.com.
General Information for All Shares Voted Via the Internet or By Telephone
Votes submitted via the Internet or by telephone must be received by 12:00
midnight, Eastern Daylight Time on May 24, 2000. Submitting your proxy via the
Internet or by telephone will not affect your right to vote in person should you
decide to attend the Annual Meeting.
THE TELEPHONE AND INTERNET VOTING PROCEDURES ARE DESIGNED TO AUTHENTICATE
STOCKHOLDERS' IDENTITIES, TO ALLOW STOCKHOLDERS TO GIVE THEIR VOTING
INSTRUCTIONS AND TO CONFIRM THAT STOCKHOLDERS' INSTRUCTIONS HAVE BEEN RECORDED
PROPERLY. STOCKHOLDERS VOTING VIA THE INTERNET SHOULD UNDERSTAND THAT THERE MAY
BE COSTS ASSOCIATED WITH ELECTRONIC ACCESS, SUCH AS USAGE CHARGES FROM INTERNET
ACCESS PROVIDERS AND TELEPHONE COMPANIES, THAT MUST BE BORNE BY THE STOCKHOLDER.
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 1820
Gateway Drive, Suite 100, San Mateo, CA 94404, a written notice of revocation or
a duly executed proxy bearing a later date, or it may be revoked by attending
the meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
STOCKHOLDER PROPOSALS
The deadline for submitting a stockholder proposal for inclusion in the
Company's proxy statement and form of proxy for the Company's 2001 annual
meeting of stockholders pursuant to Rule 14a-8 of the Securities and Exchange
Commission is December 17, 2000. Stockholders wishing to submit proposals or
director nominations that are not to be included in such proxy statement and
proxy must do so between February 21, 2001 and March 25, 2001. Stockholders are
also advised to review the Company's Bylaws, which contain additional
requirements with respect to advance notice of stockholder proposals and
director nominations.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Restated Certificate of Incorporation and Bylaws provide that
the Board of Directors shall be divided into three classes, each class
consisting, as nearly as possible, of one-third of the total number of
directors, with each class having a three-year term. Vacancies on the Board may
be filled only by persons elected by a majority of the remaining directors. A
director elected by the Board to fill a vacancy (including a vacancy created by
an increase in the number of directors) shall serve for the remainder of the
full term of the class of directors in which the vacancy occurred and until such
director's successor is elected and qualified.
The Board of Directors is presently composed of ten members. Ms. Egleston
and Ms. Lindemeyer have resigned from the Board effective as of the date of the
Annual Meeting, at which time the size of the Board will be reduced to eight.
There are three directors in the class whose term of office expires in 2000.
Each of the nominees for election to this class is currently a director of the
Company who was previously elected by the stockholders. If elected at the Annual
Meeting, each of the nominees would serve until the 2003 annual meeting and
until his or her successor is elected and has qualified, or until such
director's earlier death, resignation or removal.
Directors are elected by a plurality of the votes present in person or
represented by proxy and entitled to vote at the meeting. Shares represented by
executed proxies will be voted, if authority to do so is not withheld, for the
election of the three nominees named below. In the event that any nominee should
be unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as management may
propose. Each person nominated for election has agreed to serve if elected, and
management has no reason to believe that any nominee will be unable to serve.
Set forth below is biographical information for each person nominated and
each person (with the exception of Ms. Egleston and Ms. Lindemeyer) whose term
of office as a director will continue after the Annual Meeting.
NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2003 ANNUAL MEETING
Cathleen Black, age 55, has served as one of our directors since January
1999 and was nominated to the Board of Directors as a representative of The
Hearst Corporation. She has served as the President of Hearst Magazines, a
division of The Hearst Corporation, since November 1995. From 1983 to 1991, Ms.
Black was the President of USA Today. From 1991 to November 1995, Ms. Black
served as the President and Chief Executive Officer of the Newspaper Association
of America. Ms. Black also serves on the board of directors of the Coca-Cola
Company, International Business Machines and The Hearst Corporation. Ms. Black
holds a B.A. in English Literature from Trinity College in Washington, D.C.
Mark Miller, age 52, has served as one of our directors since January 1999
and was nominated to the Board of Directors as a representative of Hearst. Mr.
Miller has held several management roles within The Hearst Corporation since
1973, serving as Executive Vice President and General Manager of Hearst
Magazines, a division of Hearst Communications, Inc., since 1985. Mr. Miller is
a Vice President and serves on the board of directors of The Hearst Corporation
and is a Trustee of The Hearst Family Trust. Mr. Miller holds a B.S. in
Economics from the Wharton School of Commerce and Finance.
Alfred Sikes, age 60, has served as one of our directors since January 1999
and was nominated to the Board of Directors as a representative of Hearst. Mr.
Sikes has served as both Vice President of The Hearst New Media Corporation, and
President of Hearst New Media & Technology, a unit of The Hearst Corporation,
since March 1993. From August 1989 to January 1993, Mr. Sikes served as Chairman
of the Federal Communication Commission. Mr. Sikes holds a B.A. from Westminster
College and a J.D. from the University of Missouri Law School.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
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DIRECTORS CONTINUING IN OFFICE UNTIL THE 2001 ANNUAL MEETING
James Asher, age 50, was appointed to the Board of Directors as a
representative of Hearst in September 1999. Mr. Asher has served as Vice
President and Chief Legal and Development Officer of The Hearst Corporation
since October 1997. From 1990 to 1997, Mr. Asher served as Managing Partner and
Executive Committee Chair of the law firm Rogers & Wells. Mr. Asher holds a B.A.
in Government from Harvard University and an L.L.B. from New York University
School of Law.
David Galloway, age 56, was appointed as a director as a representative of
Torstar in September 1999. Mr. Galloway has served as the President and Chief
Executive Officer of Torstar Corporation, a Canadian media company, since
September 1988. Mr. Galloway joined Torstar in 1981 and served as President and
Chief Executive Officer for Harlequin Enterprises, Ltd., a subsidiary, of
Torstar from 1982 to 1988. Prior to joining Torstar, Mr. Galloway was a partner
in the Canada Consulting Group, a strategic management consulting group, for
approximately ten years. Mr. Galloway also serves on the board of directors of
Clearnet Communications, Inc., a wireless communications company, Westburne,
Inc., an integrated distributor of industrial and construction-related supplies
and equipment, and the Bank of Montreal. Mr. Galloway holds a B.A. from the
University of Toronto and an M.B.A. from the Harvard Graduate School of
Business.
William Miller, age 74, has served as one of our directors since October
1998. Mr. Miller currently serves as Chairman of the Board of Sentius
Corporation, a communications company. Mr. Miller recently retired from his
positions as Chief Executive Officer and Chairman of the Board of SRI
Development Company, a market research company, which he had held since 1979 and
1983, respectively. Mr. Miller has been a professor at the Stanford School of
Business since 1979. Mr. Miller also serves on the board of directors of
CommerceNet, Inprise Corporation, Sentius Corporation and Xpeed, Inc. Mr. Miller
holds a Ph.D. in Physics from Purdue University.
Nancy Lindemeyer, age 65, has served as one of our directors since January
1999 and was nominated to the Board of Directors as a representative of Hearst.
Ms. Lindemeyer is the Editor-in-Chief of Victoria, a magazine owned by Hearst
and focused on women's interests. From 1976 to 1985, Ms. Lindemeyer served as
Senior Editor of Better Homes and Gardens. Ms. Lindemeyer also served on the
board of directors on the National Museum of Women in the Arts. Ms. Lindemeyer
holds a B.A. in History from the University of Connecticut. Ms. Lindemeyer has
resigned from the Board effective as of the date of the Annual Meeting.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2002 ANNUAL MEETING
Marleen McDaniel, age 50, has served as our Chairman and Chief Executive
Officer since 1994. From 1992 to 1994, Ms. McDaniel served as Senior Vice
President and General Manager of Interop, a division of Ziff-Davis Publishing.
Prior to this, Ms. McDaniel served as Vice President of Marketing for Crescendo
Communications, Inc., a high speed internetworking company that later merged
with Cisco Systems, Inc. and was a Director of Sales and Marketing at Sun
Microsystems, Inc. Ms. McDaniel also serves on the board of directors for
eve.com, Inc., an online source for beauty products, Big Star Entertainment,
Inc., an online retailer of film entertainment products, Medical Self Care,
Inc., an online provider of health care information and products, and the
National Association of Television Producers Executives. She also is a trustee
for the Institute for Women in Technology. McDaniel holds a B.A. in Psychology
from the University of California, Berkeley.
Barry Weinman, age 60, has served as one of our directors since August
1995. Mr. Weinman is a general partner of Media Technology Ventures/AVI
Management and is Managing Director of Media Technology Equity Partners, a
family of venture capital firms. Mr. Weinman is also on the board of directors
of TalkCity, Inc., a provider of online interactive services, InfoGear, Inc.,
Quokka Sports, Inc., an online sports entertainment company, Be, Inc., a
computer software company, and Health Innovations, an Internet health advisory
site. Mr. Weinman holds a B.S. in Industrial Engineering from Clarkson College
of Technology and an M.A. in International Relations from the London School of
Economics/University of Southern California.
Natalie Egleston, age 35, has served as one of our directors since
September 1997. Ms. Egleston is currently the Vice President of Business
Development for MediaOne Interactive Ventures, an affiliate of the
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MediaOne Group. Prior to her current position, she served as the Director of
Corporate Finance in MediaOne's Treasury Group. From 1986 to 1996 Ms. Egleston
held various positions at the Bank of New York, Barclay's Bank and Chemical
Bank. Ms. Egleston also serves on the board of directors of TheTrip.com, an
Internet travel company. Ms. Egleston holds a B.S. in Business Management and
Marketing from Cornell University. Ms. Egleston has resigned from the Board
effective as of the date of the Annual Meeting.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1999 the Board of Directors held
14 meetings and acted by unanimous written consent three times. The Board has an
Audit Committee, a Compensation Committee and a Nominating Committee.
The Audit Committee meets with the Company's independent auditors at least
annually to review the results of the annual audit and discuss the financial
statements; recommends to the Board the independent auditors to be retained; and
receives and considers the accountants' comments as to controls, adequacy of
staff and management performance and procedures in connection with audit and
financial controls. The Audit Committee is composed of three non-employee
directors: Messrs. Mark Miller, William Miller and Ms. Egleston. Although the
Audit Committee did not meet during the 1999 fiscal year, it did meet in January
2000.
The Compensation Committee makes recommendations concerning salaries and
incentive compensation, awards stock options to employees and consultants under
the Company's stock option plans and otherwise determines compensation levels
and performs such other functions regarding compensation as the Board may
delegate. The Compensation Committee is composed of three directors: Ms.
McDaniel and Messrs. Sikes and Weinman. It met twice during the 1999 fiscal
year.
The Nominating Committee interviews, evaluates, nominates and recommends
individuals for membership on the Company's Board of Directors and committees
thereof and nominates specific individuals to be elected as officers of the
Company by the Board of Directors. No procedure has been established for the
consideration of nominees recommended by stockholders. The Nominating Committee
is composed of three directors: Ms. Black, Ms. McDaniel and Mr. Weinman. The
Nominating Committee was formed in November 1999 and did not meet or take action
during the 1999 fiscal year.
During the fiscal year ended December 31, 1999, each Board member attended
75% or more of the aggregate of the meetings of the Board and of the committees
on which he or she served, held during the period for which he or she was a
director or committee member, respectively.
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PROPOSAL 2
APPROVAL OF 1998 EQUITY INVENTIVE PLAN, AS AMENDED
In April 1998, the Board of Directors of the Company ("Board") adopted, and
the stockholders subsequently approved, the Company's 1998 Equity Incentive Plan
("Incentive Plan"). As a result of a series of amendments, as of December 31,
1999, there were 8,822,500 shares of common stock reserved for issuance under
the Incentive Plan.
In January 2000, the Board amended the Incentive Plan, subject to
stockholder approval, to increase the number of shares of common stock
authorized for issuance under the Incentive Plan by 5,850,000 shares from a
total of 8,822,500 shares to a total of 14,672,500 shares. The Board adopted
this amendment in order to ensure that the Company can continue to grant stock
options at levels determined appropriate by the Board.
As of February 29, 2000, awards (net of canceled or expired awards)
covering an aggregate of 7,102,016 shares of the Company's common stock had been
granted under the Incentive Plan. Only 1,720,484 shares of common stock (plus
any shares that might in the future be returned to the Incentive Plan as a
result of cancellations or expiration of awards) remained available for future
grant under the Incentive Plan.
Stockholders are requested in this Proposal 2 to approve the amendment to
the Incentive Plan, as amended. The affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and entitled to
vote at the meeting will be required to approve the amendment to the Incentive
Plan. Abstentions will be counted toward the tabulation of votes cast on
proposals presented to the stockholders and will have the same effect as
negative votes. Broker non-votes are counted towards a quorum, but are not
counted for any purpose in determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
The essential features of the Incentive Plan are outlined below:
GENERAL
The Incentive Plan provides for the grant of incentive stock options,
nonstatutory stock options, stock bonuses and restricted stock purchase awards
(collectively "awards"). Incentive stock options granted under the Incentive
Plan are intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
Nonstatutory stock options granted under the Incentive Plan are not intended to
qualify as incentive stock options under the Code. See "Federal Income Tax
Information" for a discussion of the tax treatment of awards. To date, the
Company has granted only stock options and restricted stock purchase awards
under the Plan.
PURPOSE
The Board adopted the Incentive Plan to provide a means by which employees,
directors and consultants of the Company and its affiliates may be given an
opportunity to purchase stock in the Company, to assist in retaining the
services of such persons, to secure and retain the services of persons capable
of filling such positions and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its affiliates. All of the
approximately 300 employees, directors (except directors affiliated with The
Hearst Corporation) and consultants of the Company and its affiliates are
eligible to participate in the Incentive Plan.
ADMINISTRATION
The Board administers the Incentive Plan. Subject to the provisions of the
Incentive Plan, the Board has the power to construe and interpret the Incentive
Plan and to determine the persons to whom and the dates on which awards will be
granted, the number of shares of common stock to be subject to each award, the
time or times during the term of each award within which all or a portion of
such award may be exercised, the exercise price, the type of consideration and
other terms of the award.
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The Board has the power, which it has not yet exercised, to delegate
administration of the Incentive Plan to a committee composed of not fewer than
two members of the Board. In the discretion of the Board, a committee may
consist solely of two or more outside directors in accordance with Section
162(m) of the Code or solely of two or more non-employee directors in accordance
with Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). As used herein with respect to the Incentive Plan, the "Board"
refers to any committee the Board appoints as well as to the Board itself.
The regulations under Section 162(m) of the Code require that the directors
who serve as members of the committee must be "outside directors." The Incentive
Plan provides that, in the Board's discretion, directors serving on the
committee may be "outside directors" within the meaning of Section 162(m). This
limitation would exclude from the committee directors who are (i) current
employees of the Company or an affiliate, (ii) former employees of the Company
or an affiliate receiving compensation for past services (other than benefits
under a tax-qualified pension Incentive Plan), (iii) current and former officers
of the Company or an affiliate, (iv) directors currently receiving direct or
indirect remuneration from the Company or an affiliate in any capacity (other
than as a director), and (v) any other person who is otherwise considered an
"outside director" for purposes of Section 162(m). The definition of an "outside
director" under Section 162(m) is generally narrower than the definition of a
"non-employee director" under Rule 16b-3 of the Exchange Act.
ELIGIBILITY
Incentive stock options may be granted under the Incentive Plan only to
employees (including officers) of the Company and its affiliates. Employees
(including officers), directors, and consultants of both the Company and its
affiliates are eligible to receive all other types of awards under the Incentive
Plan.
No incentive stock option may be granted under the Incentive Plan to any
person who, at the time of the grant, owns (or is deemed to own) stock
possessing more than 10% of the total combined voting power of the Company or
any affiliate of the Company, unless the exercise price is at least 110% of the
fair market value of the stock subject to the option on the date of grant and
the term of the option does not exceed five years from the date of grant. In
addition, the aggregate fair market value, determined at the time of grant, of
the shares of common stock with respect to which incentive stock options are
exercisable for the first time by a participant during any calendar year (under
the Incentive Plan and all other such plans of the Company and its affiliates)
may not exceed $100,000.
No employee may be granted options under the Incentive Plan exercisable for
more than 600,000 shares of Common Stock during any calendar year ("Section
162(m) Limitation"). However, this limitation applies only after the closing of
the Initial Public Offering and then only upon the earliest to occur of (i) the
first material modification to the Incentive Plan, (ii) the issuance of all the
shares of common stock reserved for issuance under the Incentive Plan, (iii) the
expiration of the Incentive Plan, or (iv) the first meeting of stockholders at
which directors are to be elected that occurs after the close of the third
calendar year following the Initial Public Offering, or such other date required
by Section 162(m) of the Code and the rules and regulations promulgated
thereunder.
STOCK SUBJECT TO THE INCENTIVE PLAN
Subject to this Proposal, an aggregate of 14,672,500 shares of Common Stock
is reserved for issuance under the Incentive Plan. If awards granted under the
Incentive Plan expire or otherwise terminate without being exercised, the shares
of common stock not acquired pursuant to such awards again becomes available for
issuance under the Incentive Plan. If the Company reacquires unvested stock
issued under the Incentive Plan, the reacquired stock will again become
available for reissuance under the Incentive Plan for awards other than
incentive stock options.
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TERMS OF OPTIONS
The following is a description of the permissible terms of options under
the Incentive Plan. Individual option grants may be more restrictive as to any
or all of the permissible terms described below.
Exercise Price; Payment. The exercise price of incentive stock options may
not be less than 100% of the fair market value of the stock subject to the
option on the date of the grant and, in some cases (see "Eligibility" above),
may not be less than 110% of such fair market value. The exercise price of
nonstatutory options may not be less than 85% of the fair market value of the
stock on the date of grant. If options were granted with exercise prices below
market value, deductions for compensation attributable to the exercise of such
options could be limited by Section 162(m) of the Code. See "Federal Income Tax
Information." As of April 4, 2000, the closing price of the Company's Common
Stock as reported on the Nasdaq National Market was $6.875 per share.
The exercise price of options granted under the Incentive Plan must be paid
either in cash at the time the option is exercised or at the discretion of the
Board, (i) by delivery of other common stock of the Company, (ii) pursuant to a
deferred payment arrangement or (iii) in any other form of legal consideration
acceptable to the Board.
Repricing. In the event of a decline in the value of the Company's common
stock, the Board has the authority to offer participants the opportunity to
replace outstanding higher priced options with new lower priced options. To the
extent required by Section 162(m) of the Code, a repriced option is deemed to be
canceled and a new option granted. Both the option deemed to be canceled and the
new option deemed to be granted will be counted against the Section 162(m)
Limitation.
Option Exercise. Options granted under the Incentive Plan may become
exercisable in cumulative increments ("vest") as determined by the Board. Shares
covered by currently outstanding options under the Incentive Plan typically vest
at the rate of 25% after one year and 1/48th per month thereafter over the
remaining three years during the participant's employment by, or service as a
director or consultant to, the Company or an affiliate (collectively,
"service"). Shares covered by options granted in the future under the Incentive
Plan may be subject to different vesting terms. The Board has the power to
accelerate the time during which an option may vest or be exercised. In
addition, options granted under the Incentive Plan may permit exercise prior to
vesting, but in such event the participant may be required to enter into an
early exercise stock purchase agreement that allows the Company to repurchase
unvested shares, generally at their exercise price, should the participant's
service terminate before vesting. To the extent provided by the terms of an
option, a participant may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such option by a cash payment upon
exercise, by authorizing the Company to withhold a portion of the stock
otherwise issuable to the participant, by delivering already-owned common stock
of the Company or by a combination of these means.
Term. The maximum term of options under the Incentive Plan is 10 years,
except that in certain cases (see "Eligibility") the maximum term is five years.
Options under the Incentive Plan generally terminate three months after
termination of the participant's service unless (i) such termination is due to
the participant's permanent and total disability, in which case the option may,
but need not, provide that it may be exercised (to the extent the option was
exercisable at the time of the termination of service) at any time within 12
months of such termination; (ii) the participant dies before the participant's
service has terminated, or within three months after termination of such
service, in which case the option may, but need not, provide that it may be
exercised (to the extent the option was exercisable at the time of the
participant's death) within 18 months of the participant's death by the person
or persons to whom the rights to such option pass by will or by the laws of
descent and distribution; or (iii) the option by its terms specifically provides
otherwise. A participant may designate a beneficiary who may exercise the option
following the participant's death. Individual option grants by their terms may
provide for exercise within a longer period of time following termination of
service.
The option term generally is extended in the event that exercise of the
option within these periods is prohibited. A participant's option agreement may
provide that if the exercise of the option following the
8
<PAGE> 11
termination of the participant's service would result in liability under Section
16(b) of the Exchange Act, then the option shall terminate on the earlier of (i)
the expiration of the term of the option or (ii) the 10th day after the last
date on which such exercise would result in such liability under Section 16(b).
A participant's option agreement also may provide that if the exercise of the
option following the termination of the participant's service would be
prohibited because the issuance of stock would violate the registration
requirements under the Securities Act of 1933, as amended (the "Securities
Act"), then the option will terminate on the earlier of (i) the expiration of
the term of the option or (ii) three months after the termination of the
participant's service during which the exercise of the option would not be in
violation of such registration requirements.
TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK
Payment. The Board determines the purchase price under a restricted stock
purchase agreement but the purchase price may not be less than 85% of the fair
market value of the Company's common stock on the date of grant. The Board may
award stock bonuses in consideration of past services without a purchase
payment.
The purchase price of stock acquired pursuant to a restricted stock
purchase agreement under the Incentive Plan must be paid either in cash at the
time the option is exercised or at the discretion of the Board, (i) by delivery
of other common stock of the Company, (ii) pursuant to a deferred payment
arrangement or (iii) in any other form of legal consideration acceptable to the
Board.
Vesting. Shares of stock sold or awarded under the Incentive Plan may, but
need not be, subject to a repurchase option in favor of the Company in
accordance with a vesting schedule as determined by the Board. The Board has the
power to accelerate the vesting of stock acquired pursuant to a restricted stock
purchase agreement under the Incentive Plan.
Restrictions on Transfer. Rights under a stock bonus or restricted stock
bonus agreement may not be transferred except where such assignment is required
by law or expressly authorized by the terms of the applicable stock bonus or
restricted stock purchase agreement.
RESTRICTIONS ON TRANSFER
The participant may not transfer an option otherwise than by will or by the
laws of descent and distribution. During the lifetime of the participant, only
the participant may exercise an option. The Board may grant nonstatutory stock
options that are transferable in certain limited instances. Shares subject to
repurchase by the Company under an early exercise stock purchase agreement may
be subject to restrictions on transfer that the Board deems appropriate.
ADJUSTMENT PROVISIONS
Transactions not involving receipt of consideration by the Company, such as
a merger, consolidation, reorganization, stock dividend, or stock split, may
change the class and number of shares of common stock subject to the Incentive
Plan and outstanding awards. In that event, the Incentive Plan will be
appropriately adjusted as to the class and the maximum number of shares of
common stock subject to the Incentive Plan and the Section 162(m) Limitation,
and outstanding awards will be adjusted as to the class, number of shares and
price per share of Common Stock subject to such awards.
EFFECT OF CERTAIN CORPORATE EVENTS
In the event of a merger, combination, sale of substantially all of the
assets of Women.com, or other change of control event, any surviving corporation
may either assume stock awards outstanding under the plan or substitute similar
stock awards for those outstanding under the plan. Whether or not the surviving
corporation does so, with respect to participants whose service has not
terminated prior to such event, the vesting and the time during which such stock
awards may be exercised will be accelerated and any reacquisition or repurchase
rights of Women.com will lapse.
9
<PAGE> 12
DURATION, AMENDMENT AND TERMINATION
The Board may suspend or terminate the Incentive Plan without stockholder
approval or ratification at any time or from time to time. Unless sooner
terminated, the Incentive Plan will terminate on April 2008.
The Board may also amend the Incentive Plan at any time or from time to
time. However, no amendment will be effective unless approved by the
stockholders of the Company within 12 months before or after its adoption by the
Board if the amendment would (i) modify the requirements as to eligibility for
participation (to the extent such modification requires stockholder approval in
order for the Incentive Plan to satisfy Section 422 of the Code, if applicable,
or Rule 16b-3 of the Exchange Act); (ii) increase the number of shares reserved
for issuance upon exercise of awards; or (iii) change any other provision of the
Incentive Plan in any other way if such modification requires stockholder
approval in order to comply with Rule 16b-3 of the Exchange Act or satisfy the
requirements of Section 422 of the Code or any securities exchange listing
requirements. The Board may submit any other amendment to the Incentive Plan for
stockholder approval, including, but not limited to, amendments intended to
satisfy the requirements of Section 162(m) of the Code regarding the exclusion
of performance-based compensation from the limitation on the deductibility of
compensation paid to certain employees.
FEDERAL INCOME TAX INFORMATION
Long-term capital gains currently are generally subject to lower tax rates
than ordinary income or short-term capital gains. The maximum long-term capital
gains rate for federal income tax purposes is currently 20% while the maximum
ordinary income rate and short-term capital gains rate is effectively 39.6%.
Slightly different rules may apply to participants who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.
Incentive Stock Options. Incentive stock options under the Incentive Plan
are intended to be eligible for the favorable federal income tax treatment
accorded "incentive stock options" under the Code.
There generally are no federal income tax consequences to the participant
or the Company by reason of the grant or exercise of an incentive stock option.
However, the exercise of an incentive stock option may increase the
participant's alternative minimum tax liability, if any.
If a participant holds stock acquired through exercise of an incentive
stock option for at least two years from the date on which the option is granted
and at least one year from the date on which the shares are transferred to the
participant upon exercise of the option, any gain or loss on a disposition of
such stock will be a long-term capital gain or loss if the participant held the
stock for more than one year.
Generally, if the participant disposes of the stock before the expiration
of either of these holding periods (a "disqualifying disposition"), then at the
time of disposition the participant will realize taxable ordinary income equal
to the lesser of (i) the excess of the stock's fair market value on the date of
exercise over the exercise price, or (ii) the participant's actual gain, if any,
on the purchase and sale. The participant's additional gain or any loss upon the
disqualifying disposition will be a capital gain or loss, which will be long-
term or short-term depending on whether the stock was held for more than one
year.
To the extent the participant recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, the provisions of Section 162(m) of the Code
and the satisfaction of a tax reporting obligation) to a corresponding business
expense deduction in the tax year in which the disqualifying disposition occurs.
Nonstatutory Stock Options, Restricted Stock Purchase Awards and Stock
Bonuses. Nonstatutory stock options, restricted stock purchase awards and stock
bonuses granted under the Incentive Plan generally have the following federal
income tax consequences:
There are no tax consequences to the participant or the Company by reason
of the grant. Upon acquisition of the stock, the participant normally will
recognize taxable ordinary income equal to the excess, if any, of the stock's
fair market value on the acquisition date over the purchase price. However, to
the extent the stock is subject to certain types of vesting restrictions, the
taxable event will be delayed until the vesting
10
<PAGE> 13
restrictions lapse unless the participant elects to be taxed on receipt of the
stock. With respect to employees, the Company is generally required to withhold
from regular wages or supplemental wage payments an amount based on the ordinary
income recognized. Subject to the requirement of reasonableness, the provisions
of Section 162(m) of the Code and the satisfaction of a tax reporting
obligation, the Company will generally be entitled to a business expense
deduction equal to the taxable ordinary income realized by the participant.
Upon disposition of the stock, the participant will recognize a capital
gain or loss equal to the difference between the selling price and the sum of
the amount paid for such stock plus any amount recognized as ordinary income
upon acquisition (or vesting) of the stock. Such gain or loss will be long-term
or short-term depending on whether the stock was held for more than one year.
Slightly different rules may apply to participants who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.
Potential Limitation on Company Deductions. Section 162(m) of the Code
denies a deduction to any publicly-held corporation for compensation paid to
certain "covered employees" in a taxable year to the extent that compensation to
such covered employee exceeds $1 million. It is possible that compensation
attributable to awards, when combined with all other types of compensation
received by a covered employee from the Company, may cause this limitation to be
exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with Treasury regulations issued under Section 162(m), compensation
attributable to stock options and stock appreciation rights will qualify as
performance-based compensation if the award is granted by a compensation
committee comprised solely of "outside directors" and either (i) the plan
contains a per-employee limitation on the number of shares for which such awards
may be granted during a specified period, the per-employee limitation is
approved by the stockholders, and the exercise price of the award is no less
than the fair market value of the stock on the date of grant, or (ii) the award
is granted (or exercisable) only upon the achievement (as certified in writing
by the compensation committee) of an objective performance goal established in
writing by the compensation committee while the outcome is substantially
uncertain, and the award is approved by stockholders.
Compensation attributable to restricted stock and stock bonuses will
qualify as performance-based compensation, provided that: (i) the award is
granted by a compensation committee comprised solely of "outside directors" and
(ii) the purchase price of the award is no less than the fair market value of
the stock on the date of grant. Stock bonuses qualify as performance-based
compensation under the Treasury regulations only if (i) the award is granted by
a compensation committee comprised solely of "outside directors," (ii) the award
is granted (or exercisable) only upon the achievement of an objective
performance goal established in writing by the compensation committee while the
outcome is substantially uncertain, (iii) the compensation committee certifies
in writing prior to the granting (or exercisability) of the award that the
performance goal has been satisfied and (iv) prior to the granting (or
exercisability) of the award, stockholders have approved the material terms of
the award (including the class of employees eligible for such award, the
business criteria on which the performance goal is based, and the maximum
amount -- or formula used to calculate the amount -- payable upon attainment of
the performance goal).
11
<PAGE> 14
PROPOSAL 3
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending December 31, 2000, and
has further directed that management submit the selection of independent
auditors for ratification by the stockholders at the Annual Meeting.
PricewaterhouseCoopers LLP has audited the Company's financial statements since
its inception in 1988. Representatives of PricewaterhouseCoopers LLP are
expected to be present at the Annual Meeting, will have an opportunity to make a
statement if they so desire and will be available to respond to appropriate
questions.
Stockholder ratification of the selection of PricewaterhouseCoopers LLP as
the Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of
PricewaterhouseCoopers LLP to the stockholders for ratification as a matter of
good corporate practice. If the stockholders fail to ratify the selection, the
Audit Committee and the Board will reconsider whether or not to retain that
firm. Even if the selection is ratified, the Audit Committee and the Board in
their discretion may direct the appointment of different independent auditors at
any time during the year if they determine that such a change would be in the
best interests of the Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and entitled to vote at the Annual Meeting will
be required to ratify the selection of PricewaterhouseCoopers LLP. Abstentions
will be counted toward the tabulation of votes cast on proposals presented to
the stockholders and will have the same effect as negative votes. Broker
non-votes are counted towards a quorum, but are not counted for any purpose in
determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 3.
12
<PAGE> 15
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS ND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's common stock as of February 29, 2000 by: (i) each director and
nominee for director; (ii) each of the executive officers named in the Summary
Compensation Table; (iii) all executive officers and directors of the Company as
a group; and (iv) all those known by the Company to be beneficial owners of more
than five percent of its common stock.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNERS BENEFICIALLY OWNED BENEFICIALLY OWNED
------------------------------------- ------------------ ------------------
<S> <C> <C>
Hearst Communications, Inc.(1).............................. 21,768,921 46.8%
The Hearst Corporation
959 Eighth Avenue
New York, NY 10019
MediaOne Interactive Services, Inc.(2)...................... 3,006,985 6.3
188 Inverness Drive West
Suite 600
Englewood, CO 80112
Natalie Egleston(3)......................................... 3,007,985 6.3
188 Inverness Drive West
Suite 600
Englewood, CO 80112
Marleen McDaniel(4)......................................... 739,998 1.6
Barry Weinman(5)............................................ 1,646,145 3.5
William Miller(6)........................................... 13,125 *
James Asher................................................. 12,300 *
Cathleen Black.............................................. 5,000 *
Nancy Lindemeyer............................................ -- --
Alfred Sikes(7)............................................. 3,000 *
Mark Miller................................................. -- --
David Galloway(8)........................................... 1,376,000 3.0
Ellen Pack(9)............................................... 780,738 1.7
Gina Garrubbo(10)........................................... 209,896 *
Anna Zornosa(11)............................................ 39,374 *
Michael Perry(12)........................................... 112,500 *
All executive officers and directors as a group (16
persons)(13).............................................. 8,010,540 16.9
</TABLE>
- ---------------
* Less than one percent.
This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the Securities
and Exchange Commission (the "SEC"). Unless otherwise indicated in the
footnotes to this table and subject to community property laws where
applicable, the Company believes that each of the stockholders named in
this table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Applicable percentages are based on
46,576,367 shares outstanding on February 29, 2000, adjusted as required by
rules promulgated by the SEC.
(1) The Hearst Family Trust is the sole stockholder of The Hearst Corporation.
Hearst Communications, Inc. is a wholly-owned indirect subsidiary of The
Hearst Corporation.
(2) Includes 887,665 shares issuable pursuant to warrants exercisable within 60
days of February 29, 2000.
(3) Natalie Egleston is the Vice President of Business Development for MediaOne
Interactive Ventures, an affiliate of MediaOne Interactive Services, Inc.
("MediaOne"). Includes 2,119,320 shares and 887,665 shares issuable
pursuant to warrants held by MediaOne. Ms. Egleston does not have voting or
13
<PAGE> 16
investment power with respect to the shares of common stock owned by
MediaOne. Ms. Egleston disclaims beneficial ownership of the shares of
common stock beneficially owned by MediaOne.
(4) Includes 404,998 shares issuable upon exercise of options exercisable
within 60 days of February 29, 2000. Also includes 75,000 shares held by
Ms. McDaniel's spouse in a trust for his benefit, 75,000 shares held in a
trust established for the benefit of Ms. McDaniel and 50,000 shares held in
a trust established for the benefit of Ms. McDaniel's family. Ms. McDaniel
disclaims beneficial ownership of shares held in trust for the benefit of
her spouse.
(5) Includes 231,933 shares held by Associated Venture Investors III, L.P.,
1,395,775 shares held by AVI Capital, L.P. and 15,937 shares held by AVI
Silicon Valley Partners, L.P. Mr. Weinman, a director of Women.com, is a
member of AVI Management Partners III, L.P., which the General Partner of
Associated Venture Investors III, L.P., AVI Capital, L.P. and AVI Silicon
Valley Partners, L.P. Mr. Weinman disclaims beneficial ownership of shares
held by such entities except for his proportional interest therein. Also
includes 2,500 shares held by Mr. Weinman's spouse.
(6) Includes 2,500 shares held in a trust for the benefit of Mr. Miller and
10,625 shares issuable upon exercise of options exercisable within 60 days
of February 29, 2000.
(7) Includes 500 shares held by Mr. Sikes' spouse.
(8) Includes 1,375,000 shares held by Torstar Corporation ("Torstar"). David
Galloway is the President and Chief Executive Officer of Torstar. Mr.
Galloway does not have voting or investment power over the shares held by
Torstar and disclaims beneficial ownership of such shares.
(9) Includes 160,420 shares issuable upon exercise of options exercisable
within 60 days of February 29, 2000.
(10) Includes 58,855 shares issuable upon exercise of options exercisable within
60 days of February 29, 2000.
(11) Represents shares issuable upon exercise of options exercisable within 60
days of February 29, 2000.
(12) Represents shares issuable upon exercise of options exercisable within 60
days of February 29, 2000.
(13) Includes the shares described in footnotes (3) through (13) and includes an
additional 64,479 shares held by other executive officers, of which 45,541
were outstanding as of February 29, 2000 and of which 18,938 are subject to
options that are exercisable within 60 days of February 29, 2000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's directors and
executive officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company. Officers, directors and greater than ten
percent Stockholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1999, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with; except that one
report, covering one transaction, was filed late by Ms. Egleston and Mr. Weinman
failed to file one report covering one transaction.
14
<PAGE> 17
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Our directors who are also our employees receive no compensation for
serving on the Board of Directors. We reimburse our non-employee directors for
all travel and other reasonable expenses incurred in attending Board of Director
and committee meetings to the extent they are not reimbursed by their employers.
Our non-employee directors, who are not officers, employees or directors of
Hearst or any of its subsidiaries, are also eligible to receive nonstatutory
stock option grants under the 1998 Equity Incentive Plan. Pursuant to such plan,
Mr. William Miller received a grant of an option to purchase 15,000 shares of
common stock in December 1998. This option vests monthly over a two-year period.
The exercise price of such option is $2.75 per share.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY OF COMPENSATION
The following table shows for the fiscal years ended December 31, 1998 and
1999, compensation awarded or paid to, or earned by, the Company's Chief
Executive Officer and its other four most highly compensated executive officers
at December 31, 1999 (the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
NUMBER OF OTHER
ANNUAL COMPENSATION SECURITIES ANNUAL
-------------------- UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) OPTIONS(#)(1) SATION($)(2)
--------------------------- ---- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Marleen McDaniel............................. 1999 226,741 600,000 --
Chairman and Chief Executive Officer 1998 190,833 650,000 --
Michael Perry(3)............................. 1999 200,000 -- --
Chief Financial Officer 1998 41,667 300,000 --
Gina Garrubbo................................ 1999 105,182 235,000 200,770
Executive Vice President, Sales 1998 156,250 25,000 73,452
Ellen Pack................................... 1999 167,500 200,000 --
Founder, General Manager and 1998 132,500 275,000 --
Senior Vice President
Anna Zornosa(4).............................. 1999 154,487 135,000 --
Senior Vice President, 1998 -- -- --
Marketing and Strategic Relationships
</TABLE>
- ---------------
(1) Except for the 1998 grant of options to purchase 150,000 shares of common
stock to Ms. McDaniel, 25,000 shares of common stock to Ms. Garrubbo and
75,000 shares of common stock to Ms. Pack, all of which vest in 24 equal
monthly installments from the vesting commencement date, all 1998 option
grants, options to purchase 85,000 shares granted in 1999 to Ms. Garrubbo
and Ms. Zornosa's 1999 option grant were made under our 1998 Equity
Incentive Plan and vest 1/4 of the total one year after the vesting
commencement date and 1/48 of the total monthly thereafter. All other 1999
option grants vest monthly over 48 months from the date of grant. All
options provide for acceleration of vesting upon certain change of control
events as described under Proposal 2.
(2) Represents sales commissions.
(3) Mr. Perry was hired in October 1998.
(4) Ms. Zornosa was hired in February 1999.
15
<PAGE> 18
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under its 1998 Equity
Incentive Plan (the "Incentive Plan"). As of February 29, 2000, options to
purchase a total of 6,061,308 shares were outstanding under the Incentive Plan
and options to purchase 1,720,484 shares remained available for grant
thereunder.
The following tables show for the fiscal year ended December 31, 1999,
certain information regarding options granted to, exercised by, and held at year
end by, the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE VALUE
OPTIONS AT ASSUMED ANNUAL RATES
SHARES GRANTED TO OF STOCK APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERM($)(3)
OPTIONS IN FISCAL PRICE PER EXPIRATION ---------------------------
GRANTED(#) YEAR(%) SHARE($) DATE 5% 10%
----------- ----------- --------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Marleen McDaniel.............. 600,000(1) 13.1 $17.62 11/15/09 6,660,000 16,812,000
Michael Perry................. -- -- -- -- -- --
Gina Garrubbo................. 35,000(2) 0.8 2.75 1/14/09 60,550 152,950
50,000(2) 1.1 5.55 3/18/09 175,000 441,000
150,000(1) 3.3 17.62 11/15/09 1,665,000 4,203,000
Ellen Pack.................... 200,000(1) 4.4 17.62 11/15/09 2,220,000 5,604,000
Anna Zornosa.................. 135,000(2) 3.0 5.30 2/18/09 450,900 1,138,050
</TABLE>
- ---------------
(1) Option vests monthly over four years from the date of grant.
(2) Options vest 1/4 of the total one year after the vesting commencement date
and 1/48 of the total monthly thereafter.
(3) The potential realizable value is calculated based on the term of the option
at its time of grant (10 years). It is calculated assuming that the fair
market value of common stock on the date of grant appreciates at the
indicated annual rate compounded annually for the entire term of the option
and the option is exercised and sold on the last day of its term for the
appreciated stock price. These numbers are calculated based on the
requirements of the Securities and Exchange Commission and do not reflect
our estimate of future stock price growth.
AGGREGATED OPTION EXERCISES IN 1999 AND DECEMBER 31, 1999 OPTION VALUES
The following table sets forth summary information concerning option
exercised in 1999, the number of shares underlying unexercised stock options as
of December 31, 1999 and the value of in-the-money options as of December 31,
1999 held by the Named Executive Officers. The value of unexercised in-the-money
options at fiscal year end is based on $14.25 per share, the assumed fair market
value of the common stock at December 31, 1999, less the exercise price per
share.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT DECEMBER 31, IN-THE-MONEY OPTIONS AT
1999(#) DECEMBER 31, 1999($)
SHARES ACQUIRED VALUE ------------------------ ------------------------
NAME ON EXERCISE(#) REALIZED($)(1) VESTED UNVESTED VESTED UNVESTED
---- --------------- -------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Marleen McDaniel..... 135,000 674,138 279,165 995,835 3,483,771 5,279,543
Michael Perry........ -- -- 87,500 212,500 1,006,251 2,443,751
Gina Garrubbo........ 151,041 1,113,548 3,126 280,833 27 1,516,753
Ellen Pack........... 67,707 366,638 109,377 372,916 1,373,047 2,300,942
Anna Zornosa......... -- -- -- 135,000 -- 1,208,250
</TABLE>
- ---------------
(1) Value realized is based on the fair market value of the Company's common
stock on the date of exercise minus the exercise price.
16
<PAGE> 19
EMPLOYMENT SEVERANCE AGREEMENT
Pursuant to an employment agreement, dated as of January 29, 1999, between
Women.com and Ms. McDaniel, Ms. McDaniel serves as our Chairman and Chief
Executive Officer through January 29, 2002. Under the terms of her employment
agreement, Ms. McDaniel was entitled to an initial annual base salary of
$200,000, subject to annual adjustment, and is eligible to participate in any
cash bonus program. Ms. McDaniel is entitled to severance benefits in the event
that, prior to January 27, 2002, her employment with Women.com is terminated
involuntarily without cause or voluntarily within sixty days of a material
reduction in her responsibilities or compensation or a relocation of her place
of employment by more than fifty miles. These severance benefits include
continuation of base salary and benefits until the longer of six months from
termination or January 27, 2002, and acceleration of vesting on all options that
would have vested as of January 27, 2002.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In May 1999, Women.com Networks, a California corporation, issued 924,000
shares of Series E Preferred Stock at a purchase price of $10.00 per share. In
connection with such financing, Women.com Networks issued (1) 105,747 shares of
Series E Preferred Stock to entities affiliated with AVI Management for cash and
(2) 195,627 shares of Series E Preferred Stock to MediaOne Interactive Services,
Inc. for cash. Each share of Series E Preferred Stock was converted into one
share of our common stock upon completion of the merger between Women.com
Networks and Hearst HomeArts, Inc. prior to our initial public offering. Mr.
Weinman, a director and a member of the Compensation Committee, is a general
partner of AVI Management. Ms. Egleston, a director of Women.com, is the Vice
President of Business Development for MediaOne Interactive Ventures, an
affiliate of MediaOne Interactive Services, Inc. MediaOne Interactive Services,
Inc. owns in excess of 5% of our outstanding common stock.
On January 27, 1999, Women.com Networks and Hearst Communications, Inc.
entered into a Magazine Content License and Hosting Agreement relating to the
production and hosting of Web sites for various Hearst magazines and the license
of Hearst intellectual property rights. Mr. Asher, Ms. Black, Ms. Lindemeyer,
Mr. Miller and Mr. Sikes, board members of Women.com, are the Vice President and
Chief Legal and Development Officer of Hearst, the President of Hearst
Magazines, the editor-in-chief of Victoria, the Executive Vice President and
General Manager of Hearst Magazines, and the President of Hearst New Media &
Technology, a unit of Hearst, respectively. In addition, Mr. Sikes is a member
of the Corporation Committee. Hearst owns in excess of 5% of our outstanding
common stock.
In May 1999, Women.com Networks LLC issued 1,076,000 units to Hearst
HomeArts, Inc. at a purchase price of $10.00 per unit. At the time of the merger
of Women.com Networks and Hearst HomeArts, Inc. and the dissolution of Women.com
Networks LLC, Hearst Communications, Inc. received additional shares of
Women.com as a result of this investment. Mr. Sikes, a director and member of
the Compensation Committee, is the President of Hearst New Media & Technology, a
unit of Hearst.
In September 1999, Hearst purchased 1,250,000 shares of Women.com common
stock at a price of $11.00 per share. Hearst also received 125,000 additional
shares of common stock pursuant to antidilution provisions with respect to this
private placement. Mr. Sikes, a director and member of the Compensation
Committee, is the President of Hearst New Media & Technology, a unit of Hearst.
In October 1999, concurrent with the Company's initial public offering,
Heart purchased 1,568,750 additional shares of our common stock in a private
placement.
17
<PAGE> 20
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION(1)
The Compensation Committee is currently composed of three directors: Ms.
McDaniel and Messrs. Sikes and Weinman. The Committee is responsible for
recommending to the Board of Directors the Company's compensation programs for
all employees, including executives. For executive officers, the Committee
evaluates performance and recommends compensation policies and levels to the
Board.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to closely align compensation
with business objectives and performance and to enable the Company to attract
and retain the highest quality executive officers and all other employees,
reward them for the Company's progress and motivate them to enhance long-term
stockholder value. Key elements of this philosophy are as follows:
- The Company pays competitively with comparable technology companies, both
inside and outside its industry, with which the Company competes for
talent. To ensure that compensation is competitive, the Company compares
its practices with other Internet companies and sets its parameters based
on this comparison.
- The Company maintains short- to long-term incentive opportunities for all
employees sufficient to provide motivation to achieve specific operating
goals and to generate rewards that bring total compensation to
competitive levels.
- The Company provides significant equity-based incentives for executives
and all other employees to ensure that they are motivated over the long
term to respond to the Company's business challenges and opportunities as
owners and not just as employees.
BASE SALARY. The Committee annually reviews each executive officer's base
salary. When reviewing base salaries, the Committee considers individual and
corporate performance, levels of responsibility, prior experience, breadth of
knowledge and competitive pay practices. Base salaries for executive officers
were increased by 12% to 25% for fiscal 1999 compared to fiscal 1998. The
increases were due to fiscal 1998 goals being met and the need to remain within
the range of competitive salaries for comparable companies.
NEAR-TERM INCENTIVES. In November 1999, the Company adopted the Women.com
FY 2000 Bonus Plan, an incentive award plan for all employees of the Company,
including all executive officers. The Bonus Plan is effective for the 2000
fiscal year. The actual incentive award earned depends on the achievement of
specified financial and other goals of the Company and individual performance
objectives. The Committee and the full Board of Directors review and approve the
annual performance objectives for the Company. The Company objectives consist of
operating, strategic and financial goals that are considered to be critical to
the Company's fundamental long-term goal of building stockholder value. Cash
bonuses will be paid on an annual basis based upon achievement of certain
specified corporate goals. The Board of Directors determines the percentage of
salary to be paid on an individual basis.
LONG-TERM INCENTIVES. The Company's long-term incentive program consists of
the 1998 Equity Incentive Plan ("Incentive Plan") and the Employee Stock
Purchase Plan ("ESPP"). The Incentive Plan is designed to enhance the long-term
goals of the Company. The options have a time-based vesting provision which
encourages employees to remain with the Company. Through option grants,
executives and employees receive significant equity incentives to build
long-term stockholder value. Grants are made at 100% of fair market value on the
date of grant. Executives receive value from these grants only if the Company's
common stock appreciates over the long-term. Because the amount of the existing
equity participation by the executives was below average for fiscal 1998,
additional option grants were made to the Named Executive Officers in fiscal
1999. The Board awarded grants in order to provide significant links between
executive compensation
- ---------------
(1) This Section is not "soliciting material," is not deemed "filed" with
the SEC and is not to be incorporated by reference in any filing of the Company
under the Securities Act or the Exchange Act whether made before or after the
date hereof and irrespective of any general incorporation language in any such
filing.
18
<PAGE> 21
and stockholder interests. Such grants were intended to provide incentive to
successfully achieve certain specified revenue targets and operating goals and
to maximize stockholder value over the next several years. All employees of the
Company, including executive officers, may participate in the ESPP, which allows
employees to purchase shares of the Company's common stock at a discount through
payroll deduction.
CORPORATE PERFORMANCE AND CHIEF EXECUTIVE OFFICER COMPENSATION
Ms. McDaniel's base salary during fiscal 1999 as Chief Executive Officer
was $240,000. Ms. McDaniel's fiscal 1999 base salary was based largely on fiscal
1998 performance. In November 1999 Ms. McDaniel received an increase in base
salary of $60,000 and an additional stock option grant for 600,000 shares of
common stock. This salary increase and additional stock option grant are based
largely on the achievement of several key objectives in 1999, including the
merger with Hearst HomeArts, several equity financings and the successful
completion of an initial public offering.
LIMITATION ON DEDUCTION OF COMPENSATION PAID TO CERTAIN EXECUTIVE OFFICERS
Section 162(m) of the Code limits the Company to a deduction for federal
income tax purposes of no more than $1 million of compensation paid to certain
Named Executive Officers in a taxable year. Compensation above $1 million may be
deducted if it is "performance-based compensation" within the meaning of the
Code.
The statute containing this law and the applicable proposed Treasury
regulations offer a number of transitional exceptions to this deduction limit
for pre-existing compensation plans, arrangements and binding contracts. As a
result, the Compensation Committee believes that at the present time it is quite
unlikely that the compensation paid to any Named Executive Officer in a taxable
year which is subject to the deduction limit will exceed $1 million. Therefore,
the Compensation Committee has not yet established a policy for determining
which forms of incentive compensation awarded to its Named Executive Officers
shall be designed to qualify as "performance-based compensation."
CONCLUSION
Through the plans described above, a significant portion of the Company's
executive compensation program, including Ms. McDaniel's compensation, is
contingent on Company performance, and realization of benefits is closely linked
to increases in long-term stockholder value. The Company remains committed to
this philosophy of pay for performance, recognizing that the competitive market
for talented executives and the volatility of the Company's business may result
in highly variable compensation for a particular time period.
COMPENSATION COMMITTEE
Marleen McDaniel
Alfred Sikes
Barry Weinman
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<PAGE> 22
PERFORMANCE MEASUREMENT COMPARISON(1)
The following graph shows the total stockholder return of an investment of
$100 in cash on October 15, 1999 for (i) the Company's common stock, (ii) the
Russell 2000 Index (the "Russell 2000") and (iii) the Bloomberg U.S. Internet
Index ("Bloomberg"). All values assume reinvestment of the full amount of all
dividends and are calculated as of December 31, 1999.
<TABLE>
<CAPTION>
WOMEN.COM RUSSELL 2000 BLOOMBERG
--------- ------------ ---------
<S> <C> <C> <C>
October 15, 1999 100 100 100
December 31, 1999 77 122 165
</TABLE>
(1) This Section is not "soliciting material," is not deemed "filed" with the
SEC and is not to be incorporated by reference in any filing of the Company
under the Securities Act or the Exchange Act whether made before or after
the date hereof and irrespective of any general incorporation language in
any such filing.
20
<PAGE> 23
CERTAIN TRANSACTIONS
In May 1999, Women.com Networks, a California corporation, issued 924,000
shares of Series E Preferred Stock at a purchase price of $10.00 per share. In
connection with such financing, Women.com Networks issued (1) 105,747 shares of
Series E Preferred Stock to entities affiliated with AVI Management for cash and
(2) 195,627 shares of Series E Preferred Stock to MediaOne Interactive Services,
Inc. for cash. Each share of Series E Preferred Stock was converted into one
share of our common stock upon completion of the merger between Women.com
Networks and Hearst HomeArts, Inc. Mr. Weinman, a director and a member of the
Compensation Committee, is a general partner of AVI Management. Ms. Egleston, a
director of Women.com, is the Vice President of Business Development for
MediaOne Interactive Ventures, an affiliate of MediaOne Interactive Services,
Inc. MediaOne Interactive Services, Inc. owns in excess of 5% of our outstanding
common stock.
On January 27, 1999, Women.com Networks and Hearst Communications, Inc.
entered into a Magazine Content License and Hosting Agreement relating to the
production and hosting of Web sites for various Hearst magazines and the license
of Hearst intellectual property rights. Mr. Asher, Ms. Black, Ms. Lindemeyer,
Mr. Miller and Mr. Sikes, board members of Women.com, are the Vice President and
Chief Legal and Development Officer of Hearst, the President of Hearst
Magazines, the editor-in-chief of Victoria, the Executive Vice President and
General Manager of Hearst Magazines, and the President of Hearst New Media &
Technology, a unit of Hearst, respectively. Hearst owns in excess of 5% of our
outstanding common stock.
In May 1999, Women.com Networks LLC issued 1,076,000 units to Hearst
HomeArts, Inc. at a purchase price of $10.00 per unit. At the time of the merger
of Women.com Networks and Hearst HomeArts, Inc. and the dissolution of Women.com
Networks LLC, Hearst Communications, Inc. received additional shares of
Women.com as a result of this investment.
In September 1999, Hearst purchased 1,250,000 shares of Women.com common
stock at a price of $11.00 per share. Hearst also received 125,000 additional
shares of common stock pursuant to antidilution provisions with respect to this
private placement.
In October 1999, concurrent with the Company's initial public offering,
Heart purchased 1,568,750 additional shares of our common stock in a private
placement.
In June 1999, Women.com Networks LLC entered into an agreement with Torstar
and its subsidiary, Harlequin Enterprises Limited, pursuant to which Women.com
produces and hosts a web site for which Harlequin will be the primary content
provider. Women.com and Harlequin will share revenues from advertising on the
site and Women.com will receive royalties on sales of Harlequin books and
related merchandise on the site. In addition, in September 1999, Torstar
purchased 1,250,000 shares of Women.com common stock in a private placement and,
upon the closing of the Torstar private placement, Mr. Galloway, the Chief
Executive Officer of Torstar, was appointed to our Board of Directors. Torstar
also received 125,000 additional shares of common stock pursuant to antidilution
provisions with respect to this private placement.
21
<PAGE> 24
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
/s/ MARLEEN R. MCDANIEL
Marleen R. McDaniel
Chairman and Chief Executive Officer
April 17, 2000
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 IS AVAILABLE
WITHOUT CHARGE UPON WRITTEN REQUEST TO: INVESTOR RELATIONS, WOMEN.COM NETWORKS,
INC., 1820 GATEWAY DRIVE, SAN MATEO, CALIFORNIA 94404.
22
<PAGE> 25
PROXY
WOMEN.COM NETWORKS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 25, 2000
The undersigned hereby appoints Marleen McDaniel and Mike Perry, and each of
them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of Women.com Networks, Inc.
which the undersigned may be entitled to vote at the Annual Meeting of
Stockholders of Women.com Networks Corporation to be held at The Crowne Plaza
Hotel, 1221 Chess Drive, Foster City, California 94404 on Thursday, May 25, 2000
at 10:00 a.m. (local time), and at any and all postponements, continuations and
adjournments thereof, with all powers that the undersigned would possess if
personally present, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as to
any and all other matters that may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2 AND 3, AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED, THIS
PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
(Continued and to be signed and dated on reverse side)
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
<PAGE> 26
Please mark
your votes as
indicated in
this example.
/X/
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW.
PROPOSAL 1. To elect three directors to hold office until the 2003 Annual
Meeting of Stockholders.
FOR WITHHOLD AUTHORITY
all nominees listed below (except to vote for all nominees
as marked to the contrary below). listed below.
/ / / /
NOMINEES: Cathleen Black
Mark Miller
Alfred Sikes
TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S) WRITE SUCH NOMINEE(S)' NAME(S)
BELOW:
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 2 AND 3.
PROPOSAL 2. To approve the Company's 1998 Equity Incentive Plan, as amended to
increase the aggregate number of shares of Common Stock authorized
for issuance under such plan by 5,850,000 shares.
FOR AGAINST ABSTAIN
/ / / / / /
PROPOSAL 3. To ratify selection of PricewaterhouseCoopers LLP as independent
auditors of the Company for its fiscal year ending December 31,
2000.
FOR AGAINST ABSTAIN
/ / / / / /
Please sign exactly as your name appears hereon. If the stock is registered in
the names of two or more persons, each should sign. Executors, administrators,
trustees, guardians and attorneys-in-fact should add their titles. If signer is
a corporation, please give full corporate name and have a duly authorized
officer sign, stating title. If signer is a partnership, please sign in
partnership name by authorized person.
Signature(s)__________________________________________ Dated ___________________
Please vote, date and promptly return this proxy in the enclosed return
envelope which is postage prepaid if mailed in the United States.
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
