<PAGE>
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:
[_] 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 sec.240.14a-11(c) or sec.240.14a-12
C-BRIDGE INTERNET SOLUTIONS INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3)Filing Party:
4) Date Filed:
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 23, 2000
AT 10:00 A.M., EASTERN DAYLIGHT TIME
April 18, 2000
To our Stockholders:
I am pleased to invite you to attend the annual meeting of stockholders of
C-bridge Internet Solutions, Inc., to be held on Tuesday, May 23, 2000 at 10
a.m. at our headquarters located at 219 Vassar Street, Cambridge,
Massachusetts, 02139.
Details regarding admission to the meeting and the business to be conducted
are more fully described in the accompanying Notice of Annual Meeting and Proxy
Statement.
Your vote is important. Whether or not you plan to attend the annual
meeting, I hope you will vote as soon as possible. You may vote in person, over
the Internet, by telephone or by mailing a proxy card. Voting over the
Internet, by phone or by written proxy will ensure your representation at the
annual meeting if you do not attend in person. Please review the instructions
on the proxy card regarding each of these voting options.
Thank you for your ongoing support of and continued interest in C-bridge
Internet Solutions, Inc.
Sincerely,
Joseph M. Bellini
President and Chief Executive
Officer
<PAGE>
2000 ANNUAL MEETING OF STOCKHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<S> <C>
Notice of Annual Meeting................................................... 1
Information Concerning Voting and Proxy Solicitation....................... 2
General Information...................................................... 2
Matters to be Considered at the Annual Meeting........................... 2
Voting and Attendance.................................................... 3
Inspector of Election.................................................... 4
Costs of Solicitation.................................................... 4
PROPOSAL NO. 1 Election of Directors....................................... 5
Nominees for Director.................................................... 5
Board Meetings and Committees............................................ 6
Director Compensation.................................................... 7
Certain Relationships and Related Transactions........................... 7
Security Ownership of Certain Beneficial Owners and Management............. 8
Executive Officers......................................................... 10
Executive Compensation..................................................... 12
Option Grants in Last Fiscal Year.......................................... 13
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values................................................................... 13
Report of the Compensation Committee of the Board of Directors on Executive
Compensation............................................................. 14
Stock Performance Graph.................................................. 15
Pension Plans.............................................................. 16
Employment Agreements...................................................... 16
PROPOSAL NO. 2 Ratification of Independent Accountants..................... 17
PROPOSAL NO. 3 Approval of C-bridge 2000 Stock Incentive Plan.............. 18
Other Matters.............................................................. 20
Stockholder Proposals and Director Nominations........................... 20
APPENDIX A C-bridge Internet Solutions, Inc. 2000 Stock Incentive Plan..... 21
</TABLE>
<PAGE>
C-BRIDGE INTERNET SOLUTIONS, INC.
219 Vassar Street
Cambridge, Massachusetts 02139
(617) 497-1707
Notice of Annual Meeting of Stockholders
TIME 10:00 a.m. on Tuesday, May 23, 2000
PLACE C-bridge Internet Solutions, Inc.
219 Vassar Street
Cambridge, Massachusetts 02139
ITEMS OF BUSINESS (1) To elect directors
(2) To ratify the appointment of independent
accountants
(3) To approve the C-bridge 2000 Stock Incentive Plan
RECORD DATE You are entitled to vote if you were a shareowner at
the close of business on Monday, March 27, 2000.
MEETING ADMISSION TWO ADMISSION TICKETS ARE INCLUDED ON THE BACK COVER
OF THIS PROXY STATEMENT. Please contact the C-bridge
Corporate Secretary at our headquarters if you need
additional tickets. The meeting will begin promptly
at 10 o'clock.
VOTING BY PROXY Please submit a proxy as soon as possible so that
your shares can be voted at the meeting in accordance
with your instructions. You may submit your proxy
over the Internet, by mail, or by phone. For specific
instructions, refer to the information beginning on
page 2 of this proxy statement and the instructions
on the proxy card.
By Order of the Board of Directors
CLIFFORD B. THOMPSON
Vice President, General Counsel and
Secretary
THIS NOTICE OF MEETING AND PROXY STATEMENT AND ACCOMPANYING PROXY
CARD ARE BEING DISTRIBUTED ON OR ABOUT APRIL 18, 2000.
1
<PAGE>
INFORMATION CONCERNING VOTING AND PROXY SOLICITATION
General Information
The Board of Directors (the "Board") of C-bridge Internet Solutions, Inc.,
a Delaware corporation (sometimes referred to as the "Company" or "C-bridge"),
is providing this Proxy Statement in connection with C-bridge's Annual Meeting
of Stockholders, which will take place on May 23, 2000 and at any postponement
or adjournment thereof (the "Annual Meeting"). Whether or not you plan to
attend the meeting in person, please return your executed proxy card in the
enclosed postage-paid envelope, vote over the Internet, or vote over the phone,
and the shares thereby will be voted in accordance with your wishes.
If you have Internet access, you may submit your proxy from any location in
the world by following the "Vote by Internet" instructions on the proxy card.
If you live in the United States or Canada, you may submit your proxy by
following the "Vote by Phone" instructions on the proxy card. You may also vote
by signing your proxy card, or for shares held in street name, the voting
instruction card included by your broker or nominee, and mailing it in the
enclosed, postage prepaid and addressed envelope. If you provide specific
voting instructions, your shares will be voted as you instruct. If you sign but
do not provide instructions, your shares will be voted as described below in
the Voting and Attendance section of this proxy statement.
The information included in this proxy statement relates to the proposals
to be voted on at the meeting, the voting process, the compensation of
directors and our most highly paid officers, and certain other required
information. Our 1999 Annual Report is also enclosed, which contains our full
1999 Consolidated Financial Statements.
Matters to be Considered at the Annual Meeting
At the Annual Meeting, you will be asked to consider and vote on the
proposals described in this Proxy Statement and on any other business which
properly comes before the Annual Meeting. With respect to any matter to come
before the meeting, you or your authorized proxy holder will be entitled to one
vote for each share of common stock that you owned as of March 27, 2000, the
record date for the Annual Meeting. As of March 27, 2000, there were 19,368,958
shares of C-bridge common stock outstanding.
The following is a brief summary of the proposals to be introduced at the
Annual Meeting by the Company. This summary is not intended to be a complete
statement of all material features of the proposals and is qualified in its
entirety by the more detailed information contained elsewhere in this Proxy
Statement.
Proposal No. 1
Proposal No. 1 concerns the election of six directors, all of whom are
currently serving on the Board of Directors.
Proposal No. 2
Proposal No. 2 concerns the ratification of the appointment of Arthur
Andersen, LLP, as the Company's independent auditor.
Proposal No. 3
Proposal No. 3 concerns the approval of the C-bridge 2000 Stock Incentive
Plan.
2
<PAGE>
Voting and Attendance
General Information
In order to obtain a quorum (the minimum number of stockholders required to
take action) at the Annual Meeting, holders of a majority of the issued and
outstanding shares of common stock of C-bridge entitled to vote must attend,
either in person or by proxy.
If your shares are registered directly in your name with C-bridge's
transfer agent, Equiserve, you are considered, with respect to those shares,
the stockholder of record, and these proxy materials are being sent directly to
you by C-bridge. As the stockholder of record, you have the right to grant your
voting proxy directly to C-bridge or to vote in person at the meeting. C-bridge
has enclosed a proxy card for you to use.
If your shares are held in a brokerage account or by a bank or other
nominee, you are considered the beneficial owner of shares held in street name,
and these proxy materials are being forwarded to you by your broker or nominee,
which is considered, with respect to those shares, the stockholder of record.
As the beneficial owner, you have the right to direct your broker or nominee
how to vote. You are also invited to attend the meeting. However, since you are
not the stockholder of record, you must obtain a signed proxy from the record
holder giving you the right to vote the shares. Your broker or nominee has
enclosed a voting instruction card for you to use in directing the broker or
nominee how to vote your shares.
Voting
All valid proxies received by the Company pursuant to this solicitation
will be voted in accordance with the instructions specified in the proxy. If no
such instructions have been specified, the shares will be voted "FOR" each of
the Company's nominees for election to the Board of Directors and "FOR" each of
the other matters discussed in this Proxy Statement. Our Board of Directors
recommends that you vote your shares "FOR" each of the nominees to the Board
and "FOR" each of the other proposals.
We do not know of any matters to be acted upon at the meeting other than
those discussed in this Proxy Statement. If other matters properly come before
the Annual Meeting, it is the intention of the persons named in the proxy to
vote on such matters in accordance with their judgment as to the best interests
of the Company.
Any stockholder who has executed and returned a proxy and who for any
reason desires to revoke such proxy may do so at any time before the proxy is
exercised: (1) by delivering written notice prior to the Annual Meeting to the
Secretary of the Company at the above address; (2) by voting the shares
represented by such proxy in person at the Annual Meeting; or (3) by giving a
later dated proxy at any time before the voting. Attendance at the Annual
Meeting will not, by itself, revoke a proxy.
In the election of directors, you may vote "FOR" all of the nominees or
your vote may be "WITHHELD" with respect to one or more of the nominees. For
the other proposals, you may vote "FOR," "AGAINST" or "ABSTAIN." If you
"ABSTAIN," it has the same effect as a vote "AGAINST." If you sign your proxy
card or broker voting instruction card with no further instructions, your
shares will be voted in accordance with the recommendations of the Board ("FOR"
all of the Company's nominees to the Board and "FOR" all other items described
in this proxy statement and in the discretion of the proxy holders on any other
matters that properly come before the meeting).
In accordance with Delaware law, if a stockholder abstains from voting on
an action, that stockholder's shares will still be counted for determining
whether the requisite number of stockholders attended the meeting. If a broker
does not vote on any particular action because it does not have the authority
to do so (a "broker non-vote"), but does vote on other actions, the shares will
still be counted for determining whether the requisite number of stockholders
attended the meeting. Broker non-votes, however, are not counted as shares
present and entitled to be voted with respect to the matter on which the broker
has expressly not voted. Thus, broker non-votes will not affect the outcome of
any matters being voted on at the meeting.
3
<PAGE>
Voting in Person
If you wish to attend the Annual Meeting in person, two admission tickets
are included on the back cover of this Proxy Statement. Requests for additional
or replacement tickets should be submitted to the C-bridge Corporate Secretary,
by mail, at 219 Vassar Street, Cambridge, MA 02139.
Even if you currently plan to attend the annual meeting, we recommend that
you also submit your proxy so that your vote will be counted even if you later
decide not to attend the meeting. Shares held in street name may be voted in
person by you at the meeting only if you obtain a signed proxy from the record
holder giving you the right to vote the shares.
Inspector of Election
A representative of Equiserve, C-bridge's transfer agent, will tabulate the
votes and act as the inspector of election.
Costs of Solicitation
C-bridge will pay the cost of preparing, assembling, printing, mailing and
distributing these proxy materials. In addition to the mailing of these proxy
materials, the solicitation of proxies or votes may be made in person, by
telephone or by electronic communication by our directors, officers and
employees, who will not receive any additional compensation for such
solicitation activities. We will also reimburse brokerage houses and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket
expenses for forwarding proxy and solicitation materials to shareowners.
4
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Nominees for Director
There are six nominees for election to our Board this year. All of the
nominees currently serve as directors of C-bridge. Information regarding the
business experience of each nominee is provided below. All directors are
elected annually to serve until the next annual meeting and until their
respective successors are elected. There are no family relationships among our
executive officers and directors.
Our Board of Directors recommends a vote FOR the election to the Board of
each of the following nominees.
The six persons receiving the highest number of votes represented by the
outstanding shares of common stock present or represented by proxy and entitled
to vote will be elected. There are only six individuals nominated.
Joseph L. Badaracco, Jr.
Director of C-bridge since 1999.
Age: 51
Professor Badaracco is currently the John Shad Professor of Business Ethics
at Harvard Business School, where he has taught since February 1981. He is a
graduate of St. Louis University, Oxford University, where he was a Rhodes
Scholar, and Harvard Business School.
Joseph M. Bellini
Director of C-bridge since 1998.
Age: 40
Mr. Bellini was named President of C-bridge in February 1999 and served as
Chief Operating Officer of C-bridge from February to May 1999. He was named
Chief Executive Officer in May 1999. Prior to joining C-bridge, Mr. Bellini
served in various capacities at i2 Technologies, Inc. from June 1995 to
February 1999; immediately prior to joining C-bridge, he was Executive Vice
President, Worldwide Automotive and Industrial Business Unit. From April 1993
to June 1995, Mr. Bellini served as Senior Practice Director at Oracle
Corporation. Mr. Bellini received a B.S. in both Mechanical Engineering and
Applied Mathematics and Statistics from the University of Massachusetts at
Amherst and is an alumnus of the Harvard Business School.
Paul R. Charron
Director of C-bridge since 1999.
Age: 57
Mr. Charron joined Liz Claiborne Inc. in May 1994 and is currently Chairman
of the Board and Chief Executive Officer. Mr. Charron received a B.A. from
Notre Dame University and has a MBA from the Harvard Business School.
Gerard F. King, II
Director of C-bridge since 1998.
Age: 43
5
<PAGE>
Mr. King joined C-bridge in July 1997 as Vice President, Consulting
Services. He was named Vice President, iSolutions in January 2000. Prior to
joining C-bridge, Mr. King was a Director of Professional Services at Sybase,
Inc. from April 1994 to June 1997. Mr. King received a B.A. in History and
German from Tufts University and a M.S. in Computer Information Systems from
Bentley College.
Raymond J. Lane
Director of C-bridge since 1999.
Age: 52
Mr. Lane has been President and Chief Operating Officer of Oracle
Corporation since January 1997. Since June 1992, Mr. Lane has served in various
capacities at Oracle Corporation, including Executive Vice President and
President of Worldwide Operations. Before joining Oracle, Mr. Lane was a Senior
Vice President of Booz-Allen & Hamilton, where he led their worldwide
consulting practice targeted to information technology investments from July
1986 to May 1992. Mr. Lane also serves on the board of directors of Oracle
Corporation and Marimba Inc. and is a member of the board of trustees of
Carnegie Mellon University. Mr. Lane received a B.S. in Mathematics from West
Virginia University.
Ramanan Raghavendran
Director of C-bridge since 1999.
Age: 31
Mr. Raghavendran has been Chairman and Chief Executive Officer of
ConnectCapital, a pan-Asian investment company, and Special Partner, Asia, for
InSight Capital Partners, a private equity investment firm, since February
2000. From December 1996 to January 2000, Mr. Raghavendran was a General
Partner of InSight Capital Partners and several related entities. From August
1992 to December 1996, Mr. Raghavendran was a senior member of the investment
team at General Atlantic Partners, a private equity investment firm. He is a
member of the boards of directors of Exchange Applications and several private
companies. Mr. Raghavendran received a B.S. from the University of
Pennsylvania.
Board Meetings and Committees
During fiscal year 1999, the Board held 6 meetings and took numerous
actions by unanimous written consent. The Board has the following two
committees: (1) Audit and (2) Compensation. The Board does not have a
Nominating Committee. The membership and function of each committee are
described below.
<TABLE>
<CAPTION>
Name of Director Audit Compensation
- ---------------- ----- ------------
<S> <C> <C>
Joseph L. Badaracco, Jr. (1)................................. X
Joseph M. Bellini (2)
Paul R. Charron (1).......................................... X X
Gerald F. King II
Raymond J. Lane (1).......................................... X
Ramanan Raghavendran (1)..................................... X X
</TABLE>
- --------
X=Committee member
(1)Was elected to the Board of Directors, effective October 1, 1999.
(2)Joseph M. Bellini was elected President and Chief Operating Officer in
February 1999, and was named Chief Executive Officer in May 1999.
The Audit Committee
The Audit Committee was formed in November 1999 and did not meet in fiscal
year 1999. The Audit Committee reviews our auditing, accounting, financial
reporting and internal control functions and recommends
6
<PAGE>
our independent accountants to the Board. In addition, the committee monitors
the non-audit services of our independent accountants.
The Compensation Committee
The Compensation Committee was formed in November 1999 and did not meet in
fiscal year 1999. The Compensation Committee makes recommendations concerning
salaries and incentive compensation for our employees and administers and
grants stock options under our stock option plans.
Director Compensation
All of the directors are reimbursed for expenses incurred to attend board
of directors and committee meetings.
As part of an effort to attract, retain and motivate qualified individuals
to serve on our Board of Directors, our Board adopted the C-bridge 1999
Director Stock Option Plan in November 1999, which was approved by our
shareholders. Pursuant to this Plan, each non-employee director will be granted
an option to purchase 15,000 shares of common stock of the Company on the date
of each annual meeting of the Company, beginning with the 2000 Annual Meeting,
provided that the non-employee director is still serving as a director
following such annual meeting. In addition, the Plan provides that new non-
employee directors receive an option to purchase 30,000 shares of common stock
of the Company when they first become members of the Board.
Certain Relationships and Related Transactions
In October 1999, we sold 1,645,555 shares of series A convertible preferred
stock to five accredited investors for $6.00 per share, for an aggregate
purchase price of approximately $9.9 million. InSight Capital Partners III,
L.P. purchased 954,129 shares, InSight Capital Partners (Cayman) III, L.P.
purchased 236,355 shares, InSight Capital Partners III-Co-Investors, L.P.
purchased 142,849 shares, Oracle Corporation purchased 305,555 shares and H&D
Investments 97 purchased 6,667 shares. Mr. Ramanan Raghavendran, a member of
our board of directors, was a General Partner of InSight Capital Partners III
LP and its affiliated entities until January 2000, and is currently Special
Partner, Asia, for InSight Capital Partners.
Concurrent with our offering of series A convertible preferred stock, the
Willingdon Trust, one of our significant stockholders, sold 719,445 shares of
our common stock to four of the series A investors for $6.00 per share, for an
aggregate purchase price of approximately $4.3 million. InSight Capital
Partners III, L.P. purchased 477,065 shares, InSight Capital Partners (Cayman)
III, L.P. purchased 118,177 shares, InSight Capital Partners III-Co-Investors,
L.P. purchased 71,425 shares and Oracle Corporation purchased 52,778 shares. As
stated above, Mr. Ramanan Raghavendran, a member of our board of directors, is
a Special Partner of InSight Capital Partners and its affiliated entities. Also
concurrent with our offering of series A convertible preferred stock, one of
our stockholders sold 100,000 shares of our common stock to Oracle Corporation
for $6.00 per share, for an aggregate purchase price of $600,000. Mr. Raymond
J. Lane, a member of our board of directors, is President and Chief Operating
Officer of Oracle Corporation.
In June 1999, we sold 333,333 shares of our common stock to Mr. Raymond J.
Lane, the President and Chief Operating Officer of Oracle Corporation, for
$6.00 per share, for an aggregate purchase price of $2.0 million. On October 1,
1999, Mr. Lane became a member of our board of directors.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership,
as of March 27, 2000, concerning:
. each beneficial owner of more than 5% of C-bridge's common stock
. beneficial ownership by all other current C-bridge directors and the
named executive officers set forth in the Summary Compensation Table;
and
. beneficial ownership by all current C-bridge directors and C-bridge
executive officers as a group.
Unless otherwise indicated, the address of each beneficial owner listed
below is c/o C-bridge Internet Solutions, Inc., 219 Vassar Street, Cambridge,
Massachusetts 02139.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
-----------------------------
Number of Percent of
Name of Beneficial Owner Shares Nature of Ownership Class (1)
------------------------ --------- ------------------- ----------
<S> <C> <C> <C>
Internet Business Capital 2,290,750 Direct 11.8%
Limited(2).........................
Ramanan Raghavendran(3).............. 2,100,000 Indirect(4)
5,000 Vested Options(5)
---------
2,105,000 10.9%
Entities of InSight Capital 2,100,000 Direct 10.8%
Partners(6)........................
Sundar Subramaniam(7)................ 4,049,055 Indirect(8) 20.9%
Hamilton Nominees Limited(9)......... 4,049,055 Indirect(10) 20.9%
Field Nominees Limited(11)........... 2,290,750 Direct 11.8%
Putnam Investments, Inc.(12)......... 1,030,792 Indirect 5.3%
Joseph L. Badaracco(13).............. 500 Direct
5,250 Vested Options(5)
---------
5,750 *
Joseph M. Bellini.................... 201,249 Direct
585,002 Vested Options(5)
---------
786,251 3.9%
Paul R. Charron(14).................. 5,000 Direct
5,000 Vested Options(5)
---------
10,000 *
Mark A. Cosway....................... 156,600 Direct
125,000 Vested Options(5)
---------
281,600 1.4%
Marco M. Farsheed.................... 300,000 Direct 1.5%
Gerard F. King, II................... 240,973 Direct
74,112 Vested Options(5)
---------
315,085 1.6%
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
-----------------------------
Number of Percent of
Name of Beneficial Owner Shares Nature of Ownership Class (1)
------------------------ --------- ------------------- ----------
<S> <C> <C> <C>
Raymond J. Lane(15).................. 333,833 Direct
458,333 Indirect(15)
5,000 Vested Options(5)
---------
797,166 4.1%
R. Jeffrey Spurrier.................. 209,863 Direct
34,977 Vested Options(5)
---------
244,840 1.3%
Clifford B. Thompson................. 5,000 Direct
5,000 Vested Options(5)
---------
10,000 *
Richard O. Wester.................... 75,000 Direct
37,500 Vested Options(5)
---------
112,500 *
All Current Directors and Officers as
a Group (12 persons).................4,753,190. (16)(17) 23.4%
</TABLE>
- --------
* Represents holdings of less than 1%
(1) Percentage of beneficial ownership is based on 19,368,958 shares of common
stock outstanding as of March 27, 2000. In computing the number of shares
of common stock beneficially owned by a person and the percentage
ownership of that person, shares of common stock subject to options held
by that person that are currently exercisable or exercisable within 60
days of March 27, 2000 are deemed outstanding. These shares, however, are
not deemed outstanding for the purpose of computing the percentage
ownership of any other person.
(2) Consists of 2,290,750 shares held by Internet Business Capital Corporation
Limited, the stockholders of which include trusts for the benefit of the
children of Professor John J. Donovan, the key lecturer for CEE
educational seminars, and their respective issue. The address of Internet
Business Capital Corporation Limited is c/o ASK Services Ltd., Cedar
House, 41 Cedar Avenue, Hamilton HM EX, Bermuda.
(3) The address for Mr. Raghavendran is c/o Insight Capital Partners III LP,
527 Madison Avenue, 10th Floor, New York, NY 10022.
(4) These shares include 1,502,754 shares held by InSight Capital Partners
III, LP, 224,988 shares held by InSight Capital Partners III Co-Investors
LP, 372,258 shares held by InSight Capital Partners (Cayman) III LP. Until
January 2000 Mr. Raghavendran was a General Partner of InSight Capital
Partners III LP and a Limited Partner of InSight Capital Partners III Co
Investors LP, and InSight Capital Partners (Cayman) III LP. He currently
is Special Partner, Asia, for InSight Capital Partners. Mr. Raghavendran
disclaims all but his pecuniary interest in these shares.
(5) "Vested Options" are options that may be exercised within 60 days of March
27, 2000.
(6) The shares include 1,502,754 shares held by Insight Capital Partners III,
LP, 224,988 shares held by InSight Capital Partners III Co-Investors LP,
and 372,258 shares held by InSight Capital Partners (Cayman) III LP. The
address of InSight Capital Partners III LP and InSight Capital Partners
III Co-Investors LP is 527 Madison Avenue, 10th Floor, New York, NY 10022.
The address of InSight Capital Partners (Cayman) III, L.P. is c/o W.S.
Walker & Company, Walker House, P.O. Box 265GT, Mary Street, George Town,
Grand Cayman, Cayman Islands.
(7) The address of Mr. Subramaniam is c/o the Hamilton Trust Company Limited,
as Trustee of the Willingdon Trust, Vallis Building, P.O. Box HM247,
Hamilton HM AX, Bermuda.
(8) Consists of 4,049,055 shares held by the Willingdon Trust, of which Mr.
Subramaniam, his sister, Subitha Subramaniam, and their respective issue
are the sole beneficiaries. Mr. Subramaniam disclaims beneficial ownership
of the shares held by the Willingdon Trust except as to the extent of his
pecuniary interest.
9
<PAGE>
(9) The address of Hamilton Nominees limited is c/o The Hamilton Trust Company
Limited, The Vallis Building, P.O. Box HM247, Hamilton HM AX, Bermuda.
(10) Consists of 4,049,055 shares held by the Willingdon Trust, the
beneficiaries of which are Sundar Subramaniam, his sister, Subitha
Subramaniam, and their respective issue.
(11) The address for Field Nominees Limited is P.O. Box HM 195, Hamilton HM
AX, Bermuda.
(12) The address for Putnam Investments, Inc. is One Post Office Square,
Boston, Massachusetts 02109. The information reported is based on a
schedule 13G, for the year ended December 31, 1999, in which Putnam
Investments, Inc. reported shared dispositive power over 1,030,792
shares, including 85,600 shares over which it reported shared voting
power.
(13) The address of Professor Badaracco is c/o Harvard Business School,
Soldier's Field Road, Morgan 475, Boston, Massachusetts 02163.
(14) The address of Mr. Charron is c/o Liz Claiborne, Inc., 1441 Broadway, New
York, New York 10018.
(15) The address of Mr. Lane is c/o Oracle Corporation, 500 Oracle Parkway,
Redwood Shores, California, 94065. Includes 458,333 shares held by Oracle
Corporation. Mr. Lane is President and Chief Operating Officer of Oracle
Corporation. Mr. Lane disclaims beneficial ownership of the shares held
by Oracle Corporation except to the extent of his pecuniary interest, if
any.
(16) Includes 966,839 shares that the directors and executive officers have
the right to acquire as of May 27, 2000 through the exercise of options.
(17) Includes 2,100,000 shares held by Insight Capital Partners III LP and
entities of Insight Capital Partners, to which Mr. Raghavendran disclaims
beneficial ownership except to the extent of his pecuniary interest and
includes 458,333 shares held by Oracle Corporation, to which Mr. Lane
disclaims beneficial ownership except to the extent of his pecuniary
interest, if any.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors, executive officers and persons who own more than ten
percent of the Common Stock to file reports of beneficial ownership with the
Securities Exchange Commission, the Nasdaq National Market and the Company.
Based solely upon its review of the copies of such forms received by it, the
Company believes that, during fiscal year 1999, all required reports were
filed on time except for one report filed less than one month late by Mr. Paul
R. Charron to report a purchase of common stock.
EXECUTIVE OFFICERS
The following table sets forth the name, age as of the annual meeting and
position of each of our executive officers. Below the table appears a brief
account of each executive officer's business experience.
<TABLE>
<CAPTION>
Name Age Position
---- --- -----------------------------------------------------------------
<S> <C> <C>
Joseph M. Bellini....... 40 President and Chief Executive Officer
Richard C. Putz......... 50 Executive Vice-President and Chief Strategy Officer
R. Jeffrey Spurrier..... 44 Executive Vice President, Worldwide Operations
Mark A. Cosway.......... 42 Executive Vice President, Sales and Marketing
Donald W. Amaya......... 53 Executive Vice President, Human Resources
Richard O. Wester....... 41 Vice President for Finance, Chief Financial Officer and Treasurer
Gerard F. King, II...... 43 Vice President, iSolutions
Clifford B. Thompson.... 39 Vice President, General Counsel and Secretary
</TABLE>
Joseph M. Bellini's business experience is listed above in the section for
nominees for the Board of Directors.
Richard C. Putz joined C-bridge in July 1999 as Executive Vice President
and Chief Strategy Officer. Prior to joining C-bridge, Mr. Putz served as
Senior Director, and then Regional Vice President, of the Industrial Practice
at Oracle Corporation from August 1998 to July 1999. From October 1995 to July
1998, Mr. Putz was the President and Chief Executive Officer of Security
Federal Bank. From July 1994 to October 1995, Mr. Putz was a Senior Practice
Director for Oracle Corporation. Mr. Putz received a B.A. from St. Meinrad
College and is a Masters candidate at the St. Meinrad School of Theology at
the University of Notre Dame.
10
<PAGE>
R. Jeffrey Spurrier joined C-bridge in October 1998 as Executive Vice
President, Worldwide Operations. Prior to joining C-bridge, Mr. Spurrier served
as Senior Director, Oracle Services at Oracle Corporation where he was employed
since July 1993. Mr. Spurrier received a B.S. in Mathematics and Physics from
University of Florida, a M.S. in Electrical Engineering from Rice University
and a M.B.A. from Stanford University.
Mark A. Cosway joined C-bridge in April 1999 as Executive Vice President,
Sales and Marketing. Prior to joining C-bridge, Mr. Cosway was Director, Global
Accounts for i2 Technologies, Inc. from July 1994 to April 1999. From January
1989 to April 1994, Mr. Cosway served as Regional Sales Manager at Enterprise
Planning Systems. Mr. Cosway received an Honors Bachelor of Commerce in
Marketing and Information Systems from Carleton University, Ottawa, Canada.
Donald W. Amaya joined C-bridge in November 1999 as Executive Vice
President, Human Resources. Prior to joining C-bridge, Mr. Amaya was Vice
President, Staffing and Education, for EMC Corporation from September 1997
through October 1999. From January 1996 to September 1997, Mr. Amaya was a
consultant providing human resources services to a number of mid-size IT
professional services and software companies. From May 1984 through December
1995, Mr. Amaya was the Vice President, Human Resources at Keane, Inc. Mr.
Amaya received a B.A. from Wheaton College, Wheaton, Illinois.
Richard O. Wester joined C-bridge in July 1998 as Vice President, Finance
and Administration, Chief Financial Officer and Treasurer. Prior to joining C-
bridge, Mr. Wester consulted as a chief financial officer to several start-up
entities from October 1997 to August 1998. From September 1995 to October 1997,
Mr. Wester served in various capacities at Integrated Computer Engines, Inc.,
most recently as Vice President, Finance and Administration, Chief Financial
Officer and Treasurer. Mr. Wester also was a co-founder of ICE and served as a
director of ICE from September 1994 until June 1998. From September 1994 to
September 1995, Mr. Wester served as the Director of Finance and
Administration, Chief Financial Officer and Treasurer at International
Integration Incorporated Inc., known as i-Cube. Mr. Wester received a BSBA in
Accounting from Salem State College. Mr. Wester is also a Certified Public
Accountant.
Gerard F. King, II's business experience is listed above in the section for
nominees for the Board of Directors.
Clifford B. Thompson joined C-bridge in May 1999 as Managing Director,
Compliance. He was named Vice-President and General Counsel in February 2000.
Prior to joining C-bridge, Mr. Thompson served as a Senior Technology
Negotiator at BankBoston from October 1998 to May 1999. From May 1996 to July
1998, Mr. Thompson served as Director of Licensing at Avicenna Systems, Corp.
From August 1993 to May 1996, Mr. Thompson served as Manager of Information
Content Supplies at Individual, Inc. Mr. Thompson received a B.A. in Psychology
from the University of Massachusetts at Amherst and a J.D. from the University
of Houston Law School.
11
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth compensation received by each person who
served as C-bridge's Chief Executive Officer during fiscal year 1999 and C-
bridge's four other most highly paid executive officers ("named executive
officers") during fiscal year 1999, as well as their compensation for each of
the fiscal years ending December 31, 1998 and December 31, 1997.
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
----------------------- ------------------
Securities All Other
Name & Position Year Salary($) Bonus($) Underlying Options Compensation($)
--------------- ---- --------- -------- ------------------ ---------------
<S> <C> <C> <C> <C> <C>
Joseph M. Bellini(1).... 1999 237,447 82,500 1,550,000 68,265(8)
Chief Executive 1998 -- -- 30,000 --
Officer
Sundar Subramaniam(2)... 1999 -- -- -- --
President and Chief 1998 -- -- -- --
Executive Officer
R. Jeffrey Spurrier(3).. 1999 150,000 103,125 -- 1,265(9)
Executive Vice 1998 31,250 28,125 419,727
President, Worldwide
Operations
Marco M. Farsheed(4).... 1999 103,600 174,367 -- 1,030(9)
Executive Vice 1998 58,333 25,726 300,000 --
President, Sales and
Marketing
Mark A. Cosway(5)....... 1999 106,348 37,497 500,000 29,916(10)
Executive Vice
President, Sales and
Marketing
Gerard F. King, II(6)... 1999 150,000 60,897 -- 1,125(9)
Vice President, 1998 150,000 25,000 327,850 2,531(9)
iSolutions 1997 68,750 -- 250,000
Richard O. Wester(7).... 1999 110,000 35,000 -- 1,306(9)
Chief Financial 1998 44,410 -- 300,000 --
Officer and Treasurer
</TABLE>
- --------
(1) Mr. Bellini joined C-bridge in February 1999 as President and Chief
Operating Officer, and was named Chief Executive Officer in May 1999. He
has a current salary of 250,000. Prior to that, he was a director of the
Company beginning in 1998.
(2) Mr. Subramaniam served without compensation in 1998. He resigned as
President in February 1999 and Chief Executive Officer in May 1999.
(3) Mr. Spurrier joined C-bridge in October 1998.
(4) Mr. Farsheed joined C-bridge in June 1998.
(5) Mr. Cosway joined C-bridge in April 1999.
(6) Mr. King joined C-bridge in July 1997.
(7) Mr. Wester joined C-bridge in July 1998.
(8) This amount consists of $563 to match employee contributions under C-
bridge's 401(k) Plan and $67,702 for relocation expenses.
(9) This amount reflects payments made by C-bridge to match employee
contributions under C-bridge's 401(k) Plan.
(10) This amount consists of $25,116 for relocation expenses and $4,800 for a
car allowance.
12
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizeable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants(1) Option Term
------------------------------------------------------ -------------------------
Number of % of Total
Shares options
Underlying Granted to Exercise
Options Employees in Price Expiration
Name Granted Fiscal Year ($/Share) Date 5%($) 10%($)
---- ---------- ------------ ------------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph M. Bellini....... 1,550,000 24.78% .30 2/8/09 5,834,098 14,080,715
R. Jeffrey Spurrier..... -- -- -- -- -- --
Marco M. Farsheed....... -- -- -- -- -- --
Mark A. Cosway.......... 500,000 7.99% 1.00 4/30/09 1,572,237 3,984,356
Gerard F. King, II...... -- -- -- -- -- --
Richard O. Wester....... -- -- -- -- -- --
- --------
(1) The options shown in this table were granted pursuant to our 1997 and 1999
Stock Incentive Plans at an exercise rate of 12.5% semi-annually over four
years, subject to a provision for accelerated vesting of up to 50% upon the
Company's initial public offering at which time the remainder would vest at
a rate of 12.5% semi-annually over two years.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Shares Underlying Value of Unexercised
Shares Unexercised Options at In-the-Money Options at
Acquired December 31, 1999 December 31, 1999 ($) (1)
On Value ------------------------------ -------------------------
Name Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ---------- ------------ ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph M. Bellini....... 201,249 1,147,119 581,252 797,499 28,089,003 38,539,139
R. Jeffrey Spurrier..... 209,863 1,371,104 -- 209,684 -- 10,132,979
Marco M. Farsheed....... 100,000 195,000 200,000 -- 9,665,000 --
Mark Cosway............. 156,250 1,171,875 93,750 250,000 4,464,844 11,906,250
Gerard F. King, II...... 240,973 1,178,079 34,752 168,792 1,680,410 8,161,822
Richard O. Wester....... 75,000 615,000 -- 225,000 -- 10,873,125
</TABLE>
- --------
(1) The value of unexercised options is based on the difference between the
exercise price of the options and the 12/31/99 Market Closing Price of
$48.625 per share.
13
<PAGE>
REPORT OF THE
BOARD OF DIRECTORS ON COMPENSATION
In November 1999, the Board of Directors established a Compensation
Committee to make recommendations concerning salaries and incentive
compensation for our employees and to administer the 1997 Stock Incentive Plan,
the 1999 Stock Incentive Plan, the 1999 Director Stock Option Plan, the 1999
Employee Stock Purchase Plan, and any future incentive plans. For the year
1999, however, the full Board of Directors performed these functions, except
that Messrs. Bellini and King did not take part in deliberations relating to
their compensation.
Compensation for Messrs. Bellini, Spurrier, Farsheed, Cosway and King
("Senior Executive Officers") consists primarily of base salary, bonus and
stock option grants. Agreements between the Company and the Senior Executive
Officers establish minimum base salaries and provide for targeted bonuses in
cash and/or stock options and the issuance of stock options. Bonuses generally
are based upon goals mutually agreed upon by the Senior Executive Officers and
the Company, which relate primarily to Company performance and revenues. The
stock options generally were granted to the Senior Executive Officers upon
their employment by the Company.
Mr. Bellini became President and Chief Operating Officer of the Company in
February 1999 and was promoted to Chief Executive Officer in May 1999. Upon his
initial employment, he was issued stock options to purchase 1.55 million
shares. His 1999 bonus was based upon his achieving and surpassing goals
relating to the Company's performance and the Company's successful initial
public offering in December 1999.
Section 162(m) of the Internal Revenue Code, as amended, makes compensation
paid to each of the five highest paid officers of the Company in amounts in
excess of $1 million not deductible unless the compensation is paid under a
predetermined objective performance plan meeting certain requirements or
satisfies one of various other exemptions. The 1997 and 1999 Stock Incentive
Plans are designed so that compensation thereunder can qualify as "performance
based compensation" which is not subject to Section 162(m). The Company does
not believe that, apart from stock options, its arrangements will result in
excess of $1 million being paid to any of its executive officers.
Board of Directors
Joseph M. Bellini
Joseph L. Badaracco, Jr.
Paul R. Charron
Gerard F. King II
Raymond J. Lane
Ramanan Raghavendran
The above report of the Board of Directors shall not be deemed incorporated
by reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not be
deemed filed under such Acts.
14
<PAGE>
Stock Performance Graph
The graph below provides an indicator of cumulative total shareowner
returns for C-bridge as compared with the S&P 500 Stock Index and the NASDAQ
100 Stock Index at each measurement point.
This graph covers the period of time beginning December 17, 1999, when C-
bridge's common shares were first traded on NASDAQ, through December 31, 1999.
[GRAPH OF C-BRIDGE INTERNET SOLUTIONS, INC.]
Market value of initial investment as of close(1)
<TABLE>
<CAPTION>
CBIS NASDAQ 100 S&P 500
------- ---------- ---------
<S> <C> <C> <C>
Dec. 17, 1999................................. $100.00 $100.00 $ 100.00
Dec. 23, 1999................................. $119.19 $107.68 $ 102.63
Dec. 31, 1999................................. $121.37 $109.06 $ 103.39
Price as of close
Dec. 17, 1999................................. $ 40.06 $167.56 $1,421.03
Dec. 23, 1999................................. $ 47.75 $180.44 $1,458.34
Dec. 31, 1999................................. $ 48.63 $182.75 $1,469.25
</TABLE>
- --------
(1) Assumes $100 invested on December 17, 1999 in C-bridge Internet Solutions,
Inc., the NASDAQ 100 Index and S&P 500 Index and reinvestment of dividends.
15
<PAGE>
PENSION PLANS
401(k) Plan
We have a 401(k) plan covering all of our employees who meet certain
defined requirements. Under the terms of the 401(k) plan, the employees may
elect to make tax-deferred contributions, and we may match 25% of the first 6%
of employee contributions as determined by the board of directors and may make
other discretionary contributions to the 401(k) plan. During 1998 and 1999, we
contributed approximately $46,400 and $88,600, respectively, to the 401(k)
plan. We made no contributions during 1996 or 1997.
EMPLOYMENT AGREEMENT
Under an agreement between the Company and Joseph M. Bellini which was
effective on February 4, 1999 (the "Bellini Agreement"), the Company has agreed
to employ Mr. Bellini as President and Chief Operating Officer. The Bellini
Agreement does not contain a stated termination date, but provides that either
Mr. Bellini or the Company may terminate the employment relationship at any
time and for any reason without notice. The Bellini Agreement provides for an
annual base salary of $250,000 and up to $100,000 in bonuses based on the
achievement of certain incentives to be determined by Mr. Bellini and the
Company. The Agreement further provides that Mr. Bellini will be eligible to
participate in all employee benefit plans and programs made available generally
to employees of C-bridge or to executive employees of C-bridge. In addition,
the Bellini Agreement provides that Mr. Bellini will be granted 1,550,000 stock
options effective upon his employment.
Under the Bellini Agreement, if Mr. Bellini's employment is terminated by
the Company "without cause," the portion of his stock options which would have
vested at the end of the semi-annual vesting period in which he was terminated
will vest immediately. The Options which have vested as of the date of
termination shall remain exercisable until 90 days after termination, after
which date such Options shall be deemed to have expired. If Mr. Bellini is
terminated by the Company "for cause" or voluntarily leaves the Company, the
Options will terminate immediately.
16
<PAGE>
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Arthur Andersen LLP as the Company's
independent accountants to audit C-bridge's consolidated financial statements
for the fiscal year ending December 31, 2000. During fiscal year 1999, Arthur
Andersen LLP served as C-bridge's independent accountants. A representative of
Arthur Andersen LLP is expected to attend the meeting and will be available to
respond to questions and, if he or she desires, to make a statement.
Our Board of Directors recommends a vote FOR the ratification of the
appointment of Arthur Andersen LLP as C-bridge's independent accountants for
the 2000 fiscal year. If the appointment is not ratified, our Board will review
its further selection of auditors.
Ratification of the appointment of Arthur Andersen LLP as C-bridge's
independent accountants for fiscal year 2000 requires the affirmative vote of a
majority of the shares of common stock present or represented by proxy and
entitled to vote at the meeting.
17
<PAGE>
PROPOSAL NO. 3
APPROVAL OF THE C-BRIDGE
2000 STOCK INCENTIVE PLAN
On April 12, 2000, the Board of Directors adopted the C-bridge 2000 Stock
Incentive Plan (the "Stock Incentive Plan") and reserved 6,000,000 shares of
common stock for issuance thereunder, subject to shareholder approval. As of
the present date, no awards have been granted under the Stock Incentive Plan.
At the annual meeting, the shareowners are being asked to approve the Stock
Incentive Plan and the reservation of shares for issuance thereunder.
Our Board of Directors recommends a vote FOR the approval of the C-bridge
2000 Stock Incentive Plan and the reservation of shares for issuance
thereunder.
Approval of the Stock Incentive Plan requires the affirmative vote of a
majority of the shares of common stock present or represented by proxy and
entitled to vote at the meeting.
Summary of Stock Incentive Plan
The following is only a summary of the Stock Incentive Plan and is
qualified in its entirety by reference to its full text, a copy of which is
attached hereto as Appendix A.
Purpose
The purpose of the Stock Incentive Plan is to advance the interests of the
Company's stockholders by enhancing the Company's ability to attract, retain
and motivate persons who make (or are expected to make) important contributions
to the Company by providing such persons with equity ownership opportunities
and performance-based incentives and thereby better align the interests of such
persons with those of the Company's stockholders.
Eligibility
All of the Company's employees, officers, directors, consultants and
advisors are eligible to be granted options or other stock-based awards in lieu
of cash for salaries or bonuses (each, an "Award") under the Stock Incentive
Plan. Any person who has been granted an Award under the Stock Incentive Plan
shall be deemed a "Participant".
Terms
Awards may be made under the Stock Incentive Plan for up to 6,000,000
shares of common stock, .01 par value per share of the Company (the "Common
Stock"). If any Award expires or is terminated, surrendered or canceled without
having been fully exercised or is forfeited in whole or in part or results in
any Common Stock not being issued, the unused Common Stock covered by such
Award shall again be available for the grant of Awards under the Plan, subject,
however, in the case of Incentive Stock Options (as hereinafter defined), to
any limitation required under the Internal Revenue Code of 1986, as amended,
and any regulations promulgated thereunder. Shares issued under the Stock
Incentive Plan may consist in whole or in part of authorized but unissued
shares or treasury shares.
The Board may grant options to purchase Common Stock (each, an "Option")
and determine the number of shares of Common Stock to be covered by each
Option, the exercise price of each Option and the conditions and limitations
applicable to the exercise of each Option, including conditions relating to
applicable federal or state securities laws, as it considers necessary or
advisable. The Board shall establish the exercise price at the time each Option
is granted and specify it in the applicable option agreement, subject to
certain limitations,
18
<PAGE>
including that no option may be issued below fair market value and that options
may not be repriced. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Board may specify in the applicable option
agreement. No option will be granted for a term in excess of 10 years.
In the event of any stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, combination, exchange of shares,
liquidation, spin-off or other similar change in capitalization or event, or
any distribution to holders of Common Stock other than a normal cash dividend,
(i) the number and class of securities available under the Stock Incentive
Plan, (ii) the number and class of security and exercise price per share
subject to each outstanding Option, and (iii) the terms of each other
outstanding stock-based award shall be appropriately adjusted by the Company
(or substituted Awards may be made, if applicable) to the extent the Board
shall determine, in good faith, that such an adjustment (or substitution) is
necessary and appropriate.
The Board shall have the right to grant other Awards based upon the Common
Stock in lieu of cash for salaries and bonuses subject to such terms and
conditions as the Board may determine. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant.
Administration
The Stock Incentive Plan will be administered by the Board of Directors of
the Company. The Board shall have authority to grant Awards and to adopt, amend
and repeal such administrative rules, guidelines and practices relating to the
Stock Incentive Plan as it shall deem advisable. The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Stock
Incentive Plan or any Award in the manner and to the extent it shall deem
expedient to carry the Stock Incentive Plan into effect and it shall be the
sole and final judge of such expediency. All decisions by the Board shall be
made in the Board's sole discretion and shall be final and binding on all
persons having or claiming any interest in the Stock Incentive Plan or in any
Award. No director or person acting pursuant to the authority delegated by the
Board shall be liable for any action or determination relating to or under the
Stock Incentive Plan made in good faith. To the extent permitted by applicable
law, the Board may at any time delegate any or all of its powers under the
Stock Incentive Plan to one or more committees or subcommittees of the Board (a
"Committee"). All references in this summary to the "Board" shall mean the
Board or a Committee of the Board to the extent that the Board's powers or
authority under the Stock Incentive Plan have been delegated to such Committee.
Federal Income Tax Consequences
An employee that receives a stock option qualifying as an Incentive Stock
Option (ISO) pursuant to the Stock Incentive Plan will recognize no taxable
income upon the grant of such option. Further, provided certain requirements
are complied with, such employee will not recognize taxable income upon the
exercise of such option and the receipt of the common stock subject to such
option. Provided the requirements for an ISO are complied with, the Company
will not be entitled to a compensation deduction with respect to the issuance
of an ISO to, or the exercise of an ISO by, a participating employee.
An employee who is granted a Non-Statutory Stock Option pursuant to the
Stock Incentive Plan will recognize no taxable income at the time of the grant,
but generally will recognize taxable income upon the exercise of the option.
The amount of income recognized upon the exercise of such option will be
measured by the excess, if any, of the fair market value of the shares of
common stock subject to the option at the time of exercise over the exercise
price paid therefor. The Company will generally be entitled to a compensation
deduction corresponding to the amount of income recognized by the employee.
The foregoing does not purport to be a complete summary of the Federal
income tax considerations relevant to stock awards granted under the Stock
Incentive Plan. In addition, the tax consequences under state, local or foreign
law may differ from the consequences under Federal income tax law.
19
<PAGE>
New Plan Benefits
The benefits that will be paid under the Stock Incentive Plan are currently
not determinable. No awards have been granted under the Stock Incentive Plan.
OTHER MATTERS
Stockholder Proposals and Director Nominations
Our Amended and Restated Bylaws ("Bylaws") and Securities and Exchange
Commission regulations permit shareowners to submit proposals for consideration
at annual meetings or nominate persons for election to the Board of Directors.
Assuming that next year's annual meeting is held on the same date, the
Company's Bylaws provide that any such proposals or nominations must be
submitted to the Company between February 22, 2001 and March 24, 2001 in order
to be considered for inclusion in C-bridge's proxy statement for C-bridge's
2001 Annual Meeting. Such proposals or nominations also will need to comply
with Securities and Exchange Commission regulations regarding the inclusion of
shareowner proposals in company-sponsored proxy materials. In addition, in
order to make a director nomination at a shareowner meeting, it is necessary
that you meet all requirements contained in our Bylaws. You may contact the C-
bridge Secretary at our headquarters for a copy of the relevant Bylaw
provisions regarding the requirements for making shareowner proposals and
nominating director candidates.
---------------------
Please complete, date and sign the accompanying proxy card by mail in the
postage-paid envelope provided. The signing of the Proxy card will not prevent
your attending the meeting and voting in person.
Cambridge, Massachusetts
April 18, 2000
20
<PAGE>
APPENDIX A
C-BRIDGE INTERNET SOLUTIONS, INC.
2000 STOCK INCENTIVE PLAN
1. Purpose
The purpose of this 2000 Stock Incentive Plan (the "Plan") of C-Bridge
Internet Solutions, Inc., a Delaware corporation (the "Company"), is to advance
the interests of the Company's stockholders by enhancing the Company's ability
to attract, retain and motivate persons who make (or are expected to make)
important contributions to the Company by providing such persons with equity
ownership opportunities and performance-based incentives and thereby better
aligning the interests of such persons with those of the Company's
stockholders. Except where the context otherwise requires, the term "Company"
shall include any present or future subsidiary corporations of C-Bridge
Internet Solutions, Inc. as defined in Section 424(f) of the Internal Revenue
Code of 1986, as amended, and any regulations promulgated thereunder (the
"Code").
2. Eligibility
All of the Company's employees, officers, directors, consultants and
advisors are eligible to be granted options or other stock-based awards in lieu
of cash for salaries or bonuses (each, an "Award") under the Plan. Any person
who has been granted an Award under the Plan shall be deemed a "Participant".
3. Administration, Delegation
(a) Administration by Board of Directors. The Plan will be administered by
the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem
advisable. The Board may correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Award in the manner and to the extent it
shall deem expedient to carry the Plan into effect and it shall be the sole and
final judge of such expediency. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.
(b) Appointment of Committees. To the extent permitted by applicable law,
the Board may at any time delegate any or all of its powers under the Plan to
one or more committees or subcommittees of the Board (a "Committee"). All
references in the Plan to the "Board" shall mean the Board or a Committee of
the Board to the extent that the Board's powers or authority under the Plan
have been delegated to such Committee.
4. Stock Available for Awards
(a) Number of Shares. Subject to adjustment under Section 4(b), Awards may
be made under the Plan for up to 6,000,000 shares of the common stock, $.01 par
value per share, of the Company (the "Common Stock"). If any Award expires or
is terminated, surrendered or canceled without having been fully exercised or
is forfeited in whole or in part or results in any Common Stock not being
issued, the unused Common Stock covered by such Award shall again be available
for the grant of Awards under the Plan, subject, however, in the case of
Incentive Stock Options (as hereinafter defined), to any limitation required
under the Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
21
<PAGE>
(b) Adjustment to Common Stock. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger, consolidation, combination,
exchange of shares, liquidation, spin-off or other similar change in
capitalization or event, or any distribution to holders of Common Stock other
than a normal cash dividend, (i) the number and class of securities available
under this Plan, (ii) the number and class of security and exercise price per
share subject to each outstanding Option, and (iii) the terms of each other
outstanding stock-based award shall be appropriately adjusted by the Company
(or substituted Awards may be made, if applicable) to the extent the Board
shall determine, in good faith, that such an adjustment (or substitution) is
necessary and appropriate.
(c) Tax Code Limits. The aggregate number of shares of the common stock
issuable under all options and other stock awards granted under this Plan
during any calendar year to any one Participant shall not exceed 500,000.
Notwithstanding anything to the contrary in this Plan, the foregoing limitation
shall be subject to adjustment under Section 4(b), but only to the extent that
such adjustment will not affect the status of any Award intended to qualify as
"performance-based compensation" under Section 162(m) of the Internal Revenue
Code. The foregoing limitations shall not apply to the extent that they are no
longer required in order for compensation in connection with grants under this
Plan to be treated as "performance-based compensation" under Section 162(m).
5. Stock Options
(a) General. The Board may grant options to purchase Common Stock (each, an
"Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive
Stock Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option."
(b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
(c) Exercise Price. The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option agreement,
subject to the following:
(i) The per share exercise price shall not be less than 100% of the
fair market value per share on the date of grant.
(ii) Notwithstanding the foregoing, Options may be granted with a per
share exercise price of less than 100% of fair market value per share on
the date of grant pursuant to an Acquisition Event as defined in Section
7(e)(2).
(iii) Unless approved by shareholders, the exercise price of any
Option previously awarded under the Plan may not be adjusted downward,
whether through amendment, cancellation or replacement grants, or by other
means, except that this provision shall not be deemed to require
shareholder approval of any adjustments pursuant to Section 4(b) of the
Plan.
(d) Duration of Options. Each Option shall be exercisable at such times and
subject to such terms and conditions as the Board may specify in the applicable
option agreement. No option will be granted for a term in excess of 10 years.
(e) Exercise of Option. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 5(f) for the number of shares for
which the Option is exercised. Shares issued upon exercise shall be issued in
the name of the Participant or, if requested by the Participant, in the name of
the Participant and his or her spouse. Until the
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shares are issued (as evidenced by the appropriate entry on the books of the
Company or a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the optioned stock, notwithstanding the exercise of the Option. The
Company shall issue (or cause to be issued) such shares promptly after the
Option is exercised. No adjustment shall be made for a dividend or other right
for which the date is prior to the date the Shares are issued, except as
provided in Section 4(b) of the Plan.
(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may otherwise provide in an Option Agreement,
delivery of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the
exercise price, or delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to
deliver promptly to the Company cash or a check sufficient to pay the
exercise price;
(3) to the extent permitted by the Board and explicitly provided in an
Option Agreement (i) by delivery of shares of Common Stock owned by the
Participant valued at their fair market value as determined by the Board
in good faith ("Fair Market Value"), which Common Stock was owned by the
Participant at least six months prior to such delivery, (ii) by delivery
of a promissory note of the Participant to the Company on terms determined
by the Board, or (iii) by payment of such other lawful consideration as
the Board may determine; or
(4) any combination of the above permitted forms of payment.
6. Other Stock-Based Awards
The Board shall have the right to grant other Awards based upon the Common
Stock in lieu of cash for salaries and bonuses subject to such terms and
conditions as the Board may determine.
7. General Provisions Applicable to Awards
(a) Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards of Incentive Stock Options shall not be sold,
assigned, transferred, pledged or otherwise encumbered by the person to whom
they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution, and, during the life of the Participant,
shall be exercisable only by the Participant.
(b) Documentation. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine. Each Award may
contain terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each type
of Award may be made alone or in addition or in relation to any other type of
Award. The terms of each type of Award need not be identical, and the Board
need not treat Participants uniformly.
(d) Termination of Status. The Board shall determine the effect on an Award
of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.
(e) Acquisition Events
(1) Consequences of Acquisition Events. At the time of the grant of
any Options, the Board may provide that any one or more of the following
actions shall take place with respect to any portion of such Options
outstanding at the time of an Acquisition Event (as defined below): (i)
provide that outstanding
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Options shall be assumed, or equivalent Options shall be substituted, by
the acquiring or succeeding corporation (or an affiliate thereof),
provided that any such Options substituted for Incentive Stock Options
shall satisfy, in the determination of the Board, the requirements of
Section 424(a) of the Code; (ii) upon written notice to the Participants,
provide that all then unexercised Options will become exercisable in full
as of a specified time (the "Acceleration Time") prior to the Acquisition
Event and will terminate immediately prior to the consummation of such
Acquisition Event, except to the extent exercised by the Participants
between the Acceleration Time and the consummation of such Acquisition
Event; (iii) in the event of an Acquisition Event under the terms of which
holders of Common Stock will receive upon consummation thereof a cash
payment for each share of Common Stock surrendered pursuant to such
Acquisition Event (the "Acquisition Price"), provide that all outstanding
Options shall terminate upon consummation of such Acquisition Event and
each Participant shall receive, in exchange therefor, a cash payment equal
to the amount (if any) by which (A) the Acquisition Price multiplied by
the number of shares of Common Stock subject to such outstanding Options
(whether or not then exercisable), exceeds (B) the aggregate exercise
price of such Options; and (iv) provide that any other stock-based Awards
outstanding (A) shall be free of all conditions or restrictions, as
applicable to each such Award, prior to the consummation of the
Acquisition Event, or (B), if applicable, shall be assumed, or equivalent
Awards shall be substituted, by the acquiring or succeeding corporation
(or an affiliate thereof).
(2) Definition. An "Acquisition Event" shall mean: (a) any merger or
consolidation which results in the voting securities of the Company
outstanding immediately prior thereto representing immediately thereafter
(either by remaining outstanding or by being converted into voting
securities of the surviving or acquiring entity) less than 50% of the
combined voting power of the voting securities of the Company or such
surviving or acquiring entity outstanding immediately after such merger or
consolidation; (b) any sale of all or substantially all of the assets of
the Company; or (c) the complete liquidation of the Company.
(3) Assumption of Options Upon Certain Events. The Board may grant
Awards under the Plan in substitution for stock and stock-based awards
held by employees of another corporation who become employees of the
Company as a result of a merger or consolidation of the employing
corporation with the Company or the acquisition by the Company of property
or stock of the employing corporation. The substitute Awards shall be
granted on such terms and conditions as the Board considers appropriate in
the circumstances.
(f) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law
to be withheld in connection with Awards to such Participant no later than the
date of the event creating the tax liability. The Board may allow Participants
to satisfy such tax obligations in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to a
Participant.
(g) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, subject to the limitations of Section 5(c) of the Plan, and provided
that the Participant's consent to such action shall be required unless the
Board determines that the action, taking into account any related action, would
not materially and adversely affect the Participant.
(h) Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such
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<PAGE>
shares have been satisfied, including any applicable securities laws and any
applicable stock exchange or stock market rules and regulations, and (iii) the
Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements
of any applicable laws, rules or regulations.
(i) Acceleration. The Board may at any time provide that any Options shall
become immediately exercisable in full or in part or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
8. Miscellaneous
(a) No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any
other relationship with the Company. The Company expressly reserves the right
at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as
expressly provided in the applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.
(c) Effective Date and Term of Plan. The Plan shall become effective on the
date on which it is adopted by the Board, but no Award granted to a Participant
designated as subject to Section 162(m) by the Board shall become exercisable,
vested or realizable, as applicable to such Award, unless and until the Plan
has been approved by the Company's stockholders. No Awards shall be granted
under the Plan after the completion of ten years from the earlier of (i) the
date on which the Plan was adopted by the Board or (ii) the date the Plan was
approved by the Company's stockholders, but Awards previously granted may
extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, but cannot adopt any provision which
materially increases the number of shares authorized or alters the provisions
of Section 5(c) of the Plan.
(e) Stockholder Approval. For purposes of this Plan, stockholder approval
shall mean approval by a vote of the stockholders in accordance with the
requirements of the Articles of Incorporation and Bylaws of the Company and
applicable law.
(f) Governing Law. The provisions of the Plan and all Awards made hereunder
shall be governed by and interpreted in accordance with the laws of the
Commonwealth of Massachusetts, without regard to any applicable conflicts of
law.
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CBIS-PS-2000
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<PAGE>
PROXY
C-BRIDGE INTERNET SOLUTIONS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS, MAY 23, 2000
(see Proxy Statement for discussion of Items)
The undersigned hereby appoints Joseph M. Bellini and Clifford B. Thompson
jointly and severally, as proxies, with power of substitution, to vote all
shares of C-bridge Internet Solutions, Inc. Class A Common Stock which the
undersigned is entitled to vote on all matters which may properly come before
the 2000 Annual Meeting of Stockholders of C-bridge Internet Solutions, Inc., or
any adjournment thereof.
[SEE REVERSE SIDE] [SEE REVERSE SIDE]
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
[X] Please mark votes as in this example.
[THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.]
1. Election of six directors for a one-year term.
Nominee: (01) Joseph L. Badaracco, Jr., (02) Joseph M. Bellini,
(03) Paul R. Charron, (04) Gerard F. King, II,
(05) Raymond J. Lane, (06) Ramanan Raghavendran
FOR ALL NOMINEES [_] WITHHELD FROM NOMINEES [_]
[_]________________________________________________
For all nominees except as noted above
2. The Appointment of Arthur Andersen LLP as Independent Auditors.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Approval of the C-bridge 2000 Stock Incentive Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
The shares represented by this Proxy Card will be voted as specified above, but
if no specification is made they will be voted FOR Items 1, 2 and 3 and at the
discretion of the proxies on any other matter that may properly come before the
meeting.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, give
full name and title as such.
Please sign, date and return promptly in the accompanying envelope.
Signature:____________________________________________ Date:____________________
Signature:____________________________________________ Date:____________________
