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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 Under Rule 14a-12
NETCREATIONS, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
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[LOGO]
May 30, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
NetCreations, Inc. We will be holding the Annual Meeting on June 22, 2000 at the
TriBeCa Grand Hotel, 2 Avenue of the Americas, New York, New York 10013 at 9:30
a.m., local time.
At the 2000 Annual Meeting, we will ask you to:
- Elect five members to the Board of Directors;
- Approve amendments to the NetCreations, Inc 1999 Stock Option Plan,
including an increase in the number of options authorized from
1,170,000 to 3,000,000;
- Approve NetCreations, Inc. 2000 Employee Stock Purchase Plan;
- Ratify the selection of Grant Thornton, LLP as independent
accountants for the fiscal year ending December 31, 2000; and
- Transact such other business as properly comes before the meeting.
Enclosed with this letter is a Notice of the Annual Meeting of
Shareholders, a Proxy Statement, a proxy card and a return envelope. Also
enclosed with this letter is NetCreations, Inc.'s Annual Report for the fiscal
year ended December 31, 1999.
The Board of Directors of NetCreations recommends that shareholders vote
for election of the board's nominees for director and for approval of each of
the other proposals.
Your vote on these matters is very important. We urge you to review
carefully the enclosed materials and to return your proxy promptly.
Whether or not you plan to attend the Annual Meeting, please sign and
promptly return your proxy card in the enclosed postage paid envelope. If you
attend the meeting, you may vote in person if you wish, even though you have
previously returned your proxy.
Sincerely,
/s/ Rosalind B. Resnick
Rosalind B. Resnick
Chief Executive Officer, and Chairman of the
Board of the Directors
YOUR VOTE IS IMPORTANT -- PLEASE EXECUTE AND RETURN THE ENCLOSED PROXY
PROMPTLY, WHETHER OR NOT YOU PLAN TO ATTEND THE NETCREATIONS, INC. ANNUAL
MEETING.
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NETCREATIONS, INC
379 WEST BROADWAY, SUIT 202
NEW YORK, NEW YORK 10012
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
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DATE: Thursday, June 22, 2000
TIME: 9:30 a.m. local time
PLACE: TriBeCa Grand Hotel
2 Avenue of the Americas
New York, New York 10013
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YOUR VOTE AT THE ANNUAL MEETING IS VERY IMPORTANT TO US.
Dear Shareholder:
At the 2000 Annual Meeting, we will ask you to:
1. Elect five directors, each for a one-year term.
2. Approve amendments to the NetCreations, Inc 1999 Stock Option Plan,
including an increase in the number of options authorized from
1,170,000 to 3,000,000.
3. Approve the NetCreations, Inc. 2000 Employee Stock Purchase Plan.
4. Ratify the appointment by the Board of Directors of the firm of Grant
Thornton, LLP as independent public accountants of NetCreations for
the fiscal year ending December 31, 2000.
5. Transact such other business as may properly come before the Annual
Meeting.
Accompanying this notice is a Proxy Statement and a Proxy Card. Whether
or not you expect to be present at the Annual Meeting, please sign and date the
Proxy Card and return it in the enclosed envelope before the date of the Annual
Meeting. You may revoke your proxy any time before it is voted at the Annual
Meeting. You will be able to vote your shares at the Annual Meeting if you were
a shareholder of record at the close of business on May 15, 2000.
You are cordially invited to attend the Annual Meeting, and you may vote
in person even though you have returned your card.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ryan Scott Druckenmiller
Ryan Scott Druckenmiller, Secretary
New York, New York
May 30, 2000
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TABLE OF CONTENTS
PAGE
Information About the 2000 Annual Meeting and Voting....................... 2
Proposals to be presented at the Annual Meeting
Proposal 1: Election of Directors.................................... 5
Proposal 2: Approve amendments to the NetCreations, Inc 1999
Stock Option Plan, including an increase in
the number of options authorized for issuance
from 1,170,000 to 3,000,000.............................. 6
Proposal 3: Approve Employee Stock Purchase Plan..................... 9
Proposal 4: Ratification of Independent Auditors..................... 12
Security Ownership of Certain Beneficial Owners and Management............. 13
Directors and Executive Officers........................................... 14
Compensation Committee Report on Executive Compensation.................... 22
Stock Performance Chart.................................................... 24
Shareholder Proposals...................................................... 25
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NETCREATIONS, INC.
379 WEST BROADWAY
NEW YORK, NEW YORK 10012
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PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 22, 2000
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This Proxy Statement provides information that you should read before you
vote on the proposals that will be presented to you at the 2000 Annual Meeting
of NetCreations, Inc. ("NetCreations" or the "Company"). The 2000 Annual Meeting
will be held on June 22, 2000 at the TriBeCa Grand Hotel, 2 Avenue of the
Americas, New York, New York, 10013.
This Proxy Statement provides detailed information about the Annual
Meeting, the proposals you will be asked to vote on at the Annual Meeting, and
other relevant information. The Board of Directors of NetCreations is soliciting
these proxies.
At the Annual Meeting, you will be asked to vote on the following
proposals:
1. Elect five directors, each for a one-year term.
2. Approve amendments to the NetCreations, Inc 1999 Stock Option Plan,
including an increase in the number of options authorized from
1,170,000 to 3,000,000.
3. Approve the NetCreations, Inc. 2000 Employee Stock Purchase Plan.
4. Ratify the appointment by the Board of Directors of the firm of Grant
Thornton, LLP as independent public accountants of NetCreations for
the fiscal year ending December 31, 2000.
5. Such other matters as may properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR EACH OF
THESE PROPOSALS.
On May 30, 2000, we began mailing this Proxy Statement to people who,
according to our records, owned common stock of beneficial interests in
NetCreations as of the close of business on May 15, 2000. A copy of
NetCreations' Annual Report for the fiscal year ended December 31, 1999
accompanies this Proxy Statement.
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INFORMATION ABOUT THE 2000 ANNUAL MEETING AND VOTING
THE ANNUAL MEETING
The Annual Meeting will be held on June 22, 2000 at the TriBeCa Grand
Hotel, 2 Avenue of the Americas, New York, New York 10013 at 9:30 a.m. local
time.
THIS PROXY SOLICITATION
We are sending you this proxy statement because NetCreations' Board of
Directors is seeking a proxy to vote your shares at the Annual Meeting. This
proxy statement is intended to assist you in deciding how to vote your shares.
On May 30, 2000, we began mailing this proxy statement to all people who,
according to our shareholder records, owned shares at the close of business on
May 15, 2000.
NetCreations is paying the cost of requesting these proxies.
NetCreations' directors, officers and employees may request proxies in person or
by telephone, mail, telecopy or letter. NetCreations will reimburse brokers and
other nominees their reasonable out-of-pocket expenses for forwarding proxy
materials to beneficial owners of our shares.
VOTING YOUR SHARES
You may vote your shares at the Annual Meeting either in person or by
proxy. To vote in person, you must attend the Annual Meeting and obtain and
submit a ballot. Ballots for voting in person will be available at the Annual
Meeting. To vote by proxy, you must complete and return the enclosed proxy card
in time to be received by us by the Annual Meeting. By completing and returning
the proxy card, you will be directing the persons designated on the proxy card
to vote your shares at the Annual Meeting in accordance with the instructions
you give on the proxy card.
If you hold your shares with a broker and you do not tell your broker how
to vote, your broker has the authority to vote on all proposals.
IF YOU DECIDE TO VOTE BY PROXY, YOUR PROXY CARD WILL BE VALID ONLY IF YOU
SIGN, DATE AND RETURN IT BEFORE THE ANNUAL MEETING SCHEDULED TO BE HELD ON JUNE
22, 2000.
In the election of directors, the five nominees for director who receive
the most votes will be elected. So, if you do not vote for a particular nominee,
or you indicate "WITHHELD" on your proxy card, your vote will not count either
for or against the nominee. For the other proposals, you may vote "FOR,"
"AGAINST" or "ABSTAIN." If you "ABSTAIN" as to any proposal, it has the same
effect as a vote "AGAINST" that proposal.
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).
We have described in this proxy statement all the proposals that we
expect will be made at the Annual Meeting. If we or a shareholder properly
present any other proposal to the meeting, we will use your proxy to vote your
shares on the proposal in our best judgment.
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REVOKING YOUR PROXY
If you decide to change your vote, you may revoke your proxy at any time
before it is voted. You may revoke your proxy in one of three ways:
- You may notify the Secretary of NetCreations in writing that you wish
to revoke your proxy at the following address: NetCreations, Inc., 379
West Broadway, Suite 202, New York, New York 10012, Attention: Ryan
Scott Druckenmiller, Secretary. We must receive your notice before the
time of the Annual Meeting.
- You may submit a proxy dated later than your original proxy.
- You may attend the Annual Meeting and vote. Merely attending the Annual
Meeting will not by itself revoke a proxy; you must obtain a ballot and
vote your shares to revoke the proxy.
VOTE REQUIRED BY APPROVAL
SHARES ENTITLED TO VOTE. On May 15, 2000 (also referred to as the "Record
Date"), 15,495,000 shares of Common Stock were issued and outstanding, each of
which is entitled to one vote on each of the proposals.
QUORUM. The quorum requirement for holding the meeting and transacting business
is a majority of the outstanding shares present in person or represented by
proxy and entitled to be voted. A quorum will be present if 7,747,500 votes are
represented at the Annual Meeting, either in person (by the shareholders) or by
proxy. If a quorum is not present, a vote cannot occur. Both abstentions and
broker non-votes are counted as present for the purposes of determining the
presence of a quorum.
VOTES REQUIRED. In the election of directors, the five persons receiving the
highest number of "FOR" votes will be elected. All other proposals require the
affirmative "FOR" vote of a majority of those shares present and entitled to
vote. If you are a beneficial owner and do not provide the shareowner of record
with voting instructions, your shares may constitute broker non-votes. In
tabulating the voting result for any particular proposal, shares that constitute
broker non-votes are not considered entitled to vote on that proposal and will
not be considered votes cast for the foregoing purposes. Generally, broker
non-votes occur when shares held by a broker for a beneficial owner are not
voted with respect to a particular proposal because (1) the broker has not
received voting instructions from the beneficial owner, and (2) the broker lacks
discretionary voting power to vote such shares.
ADDITIONAL INFORMATION
We are mailing our Annual Report for the fiscal year ended December 31,
1999, including consolidated financial statements, to all shareholders entitled
to vote at the Annual Meeting together with this proxy statement. The Annual
Report does not constitute a part of the proxy solicitation material. The Annual
Report tells you how to get additional information about NetCreations.
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PROPOSAL 1:
ELECTION OF DIRECTORS
Nominees for election to the Board of Directors are:
Rosalind B. Resnick
Ryan Scott Druckenmiller
Mitchell York
Michael Levy
Gregory W. Slayton
Each director will be elected to serve for a one-year term, unless he or
she resigns or is removed before his or her term expires, or until his or her
replacement is elected and qualified. Each of the five nominees is currently a
member of the Board of Directors and has consented to serve as a director if
re-elected. More detailed information about each of the nominees is available in
the section of this proxy statement titled "Directors and Executive Officers,"
which begins on page 14.
If any of the nominees cannot serve for any reason (which is not
anticipated), the Board of Directors may designate a substitute nominee or
nominees; however, if the nominee is a designee of a party to the shareholders
agreement, then the substitute nominee will be designated by the respective
entity who designated the vacating representative. If a substitute is nominated,
we will vote all valid proxies for the election of the substitute nominee or
nominees. Alternatively, the Board of Directors may also decide to leave the
board seat or seats open until a suitable candidate or candidates are located,
or it may decide to reduce the size of the Board.
The Board of Directors of the Company has established the size of the
board at five members. Proxies for the Annual Meeting may not be voted for more
than the five nominees named.
RECOMMENDATION
The Board of Directors recommends a vote "FOR" each of the nominees to
the Board of Directors.
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PROPOSAL 2:
APPROVE THE AMENDMENTS TO THE NETCREATIONS, INC.STOCK OPTION
PLAN, INCLUDING AN INCREASE IN THE NUMBER OF OPTIONS AUTHORIZED
FOR ISSUANCE FROM 1,170,000 to 3,000,000
Our Stock Option Plan became effective July 22 1999 (our "Stock Option
Plan"). On January 24, 2000 and May 15, 2000, our Board of Directors approved an
amendment to our Stock Option Plan for the purpose of increasing the number of
shares of common stock authorized for issuance under our Stock Option Plan from
1,170,000 to 3,000,000 shares. In addition on May 15, 2000, the Board of
Directors approved an amendment to our Stock Option Plan to increase the number
of options that may be granted to an individual under the Stock Option Plan from
468,000 options to purchase our common stock over the term of the plan to
500,000 options to purchase our common stock in any one of our fiscal years.
Each of these proposed amendments to the 1999 Stock Option Plan will become
effective retroactively to January 1, 2000 upon shareholder approval.
The Board of Directors has granted 1,098,000 of the 1,170,000 options
to purchase our common stock that are authorized for issuance under our Stock
Option Plan. Subject to shareholder approval, the Board of Directors has granted
an additional 685,000 options to purchase our common stock to new employees,
including 500,000 to Mitchell York, 100,000 to Brian Burlant, and 85,000 to
Nicole Comeforo, all of whom are officers of our company. Upon approval by our
shareholders of the increase in the number of options authorized for issuance
under our Stock Option Plan, options to purchase 1,217,000 shares of our common
stock will remain available for future grants.
The amendment to increase the number of authorized options available
under our Stock Option Plan will permit a sufficient reserve of options to be
available in order to attract and retain qualified and competent directors,
managers, key employees and consultants through the encouragement of stock
ownership in our company. The amendment to increase the number of options that
may be granted to an individual in each of our fiscal years will permit us to
offer a sufficient number of options to attract and retain key employees.
RECOMMENDATION
The Board of Directors unanimously recommends a vote "FOR" the approval
of the proposed amendments to our Stock Option Plan.
SUMMARY OF THE AMENDED STOCK OPTION PLAN
The following description is a summary of our Stock Option Plan. For
more detailed information, you should read the full text of our Stock Option
Plan, which is included as Appendix A at the end of this booklet.
General: Our Stock Option Plan provides for the grant of options
intended to qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended, and non-qualified stock options. The
maximum term of any stock option granted under our Stock Option Plan is ten
years, except that with respect to incentive stock options granted to a person
possessing more than 10% of our combined voting power, the term of their options
shall be for no more than five years. The aggregate fair market value on the
date of grant of the common stock for which incentive stock options are
exercisable for the first time by an employee during any calendar year may not
exceed $100,000. Also, upon shareholder approval, the aggregate number of
options granted to any one individual may not exceed 500,000 options to purchase
our common stock in any one of our fiscal years. This limit is subject to
adjustments to reflect any stock dividends, split-ups, recapitalizations,
mergers, consolidations, business combinations or exchanges of shares and the
like.
Purpose. The purpose of our Stock Option Plan is to advance the
interests of our company by providing incentives to attract and retain qualified
and competent persons who provide management services through the encouragement
of stock ownership in our company by such persons.
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Shares Available under the Plan: Upon approval by the shareholders, an
aggregate of 3,000,000 options to purchase our common stock will be authorized
and 1,217,000 options to purchase our common stock will be available for
issuance. This limitation is subject to adjustment to reflect any stock
dividends, split-ups, recapitalizations, mergers, consolidations, business
combinations or exchanges of shares and the like. If any options to purchase our
common stock under the Stock Option Plan expire or terminate unexercised, become
unexercisable or are forfeited or otherwise terminated, the options shall
thereafter be available for further awards under the Stock Option Plan. As of
May 12, 2000, the fair market value of a share of our common stock, determined
by the last reported sale price per share of our common stock on such date, as
quoted on the Nasdaq National Market, was $30.50.
Administration: Our Stock Option Plan is administered by our Board of
Directors or by such committee or committees, consisting of independent members
of our Board of Directors, as may be appointed by our Board of Directors from
time to time (our Board of Directors, or such committee or committees are
referred to as the "Administrator"). The Administrator has full power and
authority to take all actions necessary to carry out the purpose and intent of
our Stock Option Plan, including, but not limited to, the authority to: (i)
determine the eligible persons to whom, and the time or times at which options
are granted; (ii) determine the types of options to be granted; (iii) determine
the number of shares to be covered by or used for reference purposes for each
option grant; (iv) determine the exercise price of each option granted and (v)
adopt rules and regulations for carrying out the provisions of our Stock Option
Plan.
In the event of changes in our common stock by reason of any stock
dividend, split-up, recapitalization, merger, consolidation, business
combination or exchange of shares and the like, the Administrator shall, in its
discretion, make appropriate adjustments to the number of options covering
shares of our common stock reserved for issuance, exercise price covering
options issued, and shall, in its discretion, and without the consent of holders
of options, make any other adjustments in options which have been granted as the
Administrator, in its sole discretion, determines to be necessary or
appropriate.
Participation: Participation in our Stock Option Plan will be open to
all of our employees, officers, and directors and consultants, as may be
determined by the Administrator from time to time. As of May 15, 2000, all of
our directors, both of our two non-employee directors, and approximately 62
employees and consultants were eligible to participate in our Stock Option Plan.
Exercise Price. The exercise price of incentive stock options granted
under our Stock Option Plan must be at least equal to the fair market value of
our common stock on the date of grant. However, for any employee holding more
than 10% of our combined voting power, the exercise price must be at least 110%
of the fair market value of our common stock. The exercise price of
non-qualified stock options is set by the Administrator. The exercise price may
be paid in cash, through a tendering a sufficient number of shares our common
stock received by the option holder upon exercise equal to the aggregate
exercise price or by any other means the Administrator approves.
Vesting of Options. The options granted under the plan shall vest as
determined by the Administrator. Options shall fully vest upon the occurrence of
a change of control of our company.
Amendment and Termination. Our Administrator may amend, modify or
terminate the Stock Option Plan at any time as long as such amendment,
modification or termination does not impair vesting rights of plan participants.
The Stock Option Plan will terminate on July 22, 2009, unless terminated earlier
by the Board of Directors.
Federal Income Tax Consequences
The following is a general summary of the current federal income tax
treatment of stock options, which are authorized to be granted under our Stock
Option Plan, based upon the current provisions of the Internal Revenue Code and
regulations promulgated thereunder.
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Incentive Stock Options: Incentive stock options under our Stock Option
Plan are intended to meet the requirements of the Internal Revenue Code Section
422. No tax consequences result from the grant of the option. If an option
holder acquires stock upon the exercise, no income will be recognized by the
option holder for ordinary income tax purposes (although the difference between
the option exercise price and the fair market value of the stock subject to the
option may result in alternative minimum tax liability to the option holder) and
we will be allowed no deduction as a result of such exercise, provided that the
following conditions are met: (a) at all times during the period beginning with
the date of the granting of the option and ending on the day three months before
the date of such exercise, the option holder was our employee or of a subsidiary
and (b) the option holder makes no disposition of the stock within two years
from the date the option is granted nor within one year after the stock is
transferred to the option holder. The three-month period is extended to one year
in the event of disability and is waived in the event of death of the employee.
In the event of a sale of such stock by the option holder after compliance with
these conditions, any gain realized over the price paid for the stock ordinarily
will be treated as capital gain, and any loss will be treated as capital loss,
in the year of the sale.
If the option holder fails to comply with the employment requirement
discussed above, the tax consequences will be the same as for a nonqualified
option, discussed below. If the option holder fails to comply with the holding
period requirements discussed above, the option holder will recognize ordinary
income in an amount equal to the lesser of (i) the excess of the fair market
value of the stock on the date the option was exercised over the exercise price
or (ii) the excess of the amount realized upon such disposition over the
adjusted tax basis of the stock. Any additional gain ordinarily will be
recognized by the option holder as capital gain, either long-term or short-term,
depending on the holding period of the shares. If the option holder is treated
as having received ordinary income because of his or her failure to comply with
either condition above, an equivalent deduction will be allowed to us in the
same year.
Nonqualified Stock Options: No tax consequences result from the grant
of the option. An option holder who exercises a nonqualified stock option with
cash generally will realize compensation taxable as ordinary income in an amount
equal to the difference between the exercise price and the fair market value of
the shares on the date of exercise, and we will be entitled to a deduction from
income in the same amount in the fiscal year in which the exercise occurred. The
option holder's basis in such shares will be the fair market value on the date
income is realized, and when the holder disposes of the shares he or she will
recognize capital gain or loss, either long-term or short-term, depending on the
holding period of the shares.
Disallowance of Deductions: The Internal Revenue Code disallows
deductions for publicly held corporations with respect to compensation in excess
of $1,000,000 paid to the corporation's chief executive officer and its four
other most highly compensated officers. However, compensation payable solely on
account of attainment of one or more performance goals is not subject to this
deduction limitation if the performance goals are objective, pre-established and
determined by a compensation committee comprised solely of two or more outside
directors, the material terms under which the compensation is to be paid are
disclosed to the stockholders and approved by a majority vote, and the
compensation committee certifies that the performance goals and other material
terms were in fact satisfied before the compensation is paid. Under this
exception, the deduction limitation does not apply with respect to compensation
otherwise deductible on account of stock options and stock appreciation rights
granted at fair market value under a plan which limits the number of shares that
may be issued to any individual and which is approved by the corporation's
stockholders.
INCORPORATION BY REFERENCE
The foregoing is only a summary of the Stock Option Plan and is qualified
in its entirety by reference to its full text, a copy of which is attached as
Appendix A.
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PROPOSAL NO. 3:
APPROVE THE NETCREATIONS, INC. 2000 EMPLOYEE STOCK PURCHASE PLAN
On May 15, 2000, the Board of Directors adopted the NetCreations, Inc.
2000 Employee Stock Purchase Plan (which we refer to as the ESPP), and reserved
one million 1,000,000 shares increasing annually by 200,000 shares for issuance
under the ESPP, subject to stockholder approval within 12 months of Board
approval.
At the annual meeting, you are being asked to approve the ESPP and the
Board's reservation of shares under the ESPP for the purpose of qualifying such
shares for special tax treatment under Internal Revenue Code Section 423.
RECOMMENDATION
Our Board of Directors recommends a vote "FOR" the approval of the
NetCreations, Inc. 2000 Employee Stock Purchase Plan and the reservation of
shares for issuance under that plan.
SUMMARY OF THE ESPP
The ESPP will provide our employees with an opportunity to become owners
in us through a convenient arrangement for purchasing shares of common stock. If
approved by our shareholders, the ESPP will become effective July 1, 2000. The
following is a summary of the ESPP. For more detailed information, you should
read the full text of the ESPP, which is included as Appendix B at the end of
this booklet.
GENERAL
Purpose. The ESPP offers eligible employees the opportunity to purchase
shares of our common stock through after-tax payroll withholding. The ESPP is
intended to permit employees to acquire an equity interest in us thereby
providing them with an incentive to work for our growth and success. We will use
the funds we receive under the ESPP for any general corporate purpose.
Eligibility. All full time employees are eligible to participate in the
ESPP, except (1) employees who have not satisfied whatever waiting period the
Compensation Committee sets at the beginning of the payroll deduction period and
(2) employees who hold 5% or more of our common stock. No non-employee directors
are eligible to participate in the ESPP. As of May 15, 2000, there were
approximately 62 employees who would be eligible to participate in the ESPP if
it had then been in effect, and if the Compensation Committee did not require
any waiting period.
Shares Available Under the ESPP. If approved, the ESPP would authorize us
to issue up to one million (1,000,000) shares of common stock from authorized
but unissued shares or from stock owned by us, including stock purchased on the
market. The number of shares initially authorized will automatically increase by
200,000 shares each year on December 31 beginning December 31, 2001. The number
of shares we are authorized to issue under the ESPP automatically adjusts for
stock dividends, stock splits, reclassifications and other changes affecting the
common stock.
Administration. The Compensation Committee of our Board of Directors
administers the ESPP. The Compensation Committee may delegate this authority.
The Compensation Committee has the authority and discretion to specify the terms
and conditions of stock purchases by employees under the ESPP (within the
limitations of the ESPP) and to otherwise interpret and construe the terms of
the ESPP and any related agreements. Under the ESPP, the Compensation Committee
(or the Board of Directors) can lengthen or shorten the payroll deduction
periods, increase the purchase price for shares, or make other administrative
adjustments. The ESPP also specifically provides for indemnification of the
Compensation Committee, other directors, and agents for actions taken with
respect to the ESPP.
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OPTIONS GRANTED UNDER THE ESPP
How Options Are Granted. On the first day of each payroll deduction
period, a participating employee will automatically receive options to purchase
a number of shares of our common stock with money that is withheld from his or
her paycheck. The number of shares available to the participating employee will
be determined at the end of the payroll deduction period by dividing (1) the
total amount of money withheld during the payroll deduction period by (2) the
exercise price of the options (as described below). Options granted under the
ESPP to employees will be automatically exercised to purchase shares on the last
day of the payroll deduction period, unless the participating employee has, at
least thirty days earlier or by such other deadline as the Compensation
Committee sets, requested that his or her payroll contributions stop. The
Compensation Committee will determine the treatment of fractional shares. Any
cash accumulated in an employee's account for a period in which an employee
elects not to participate will be distributed to the employee.
Exercise Price. The initial exercise price for options under the ESPP
will be 85% of the lesser of the fair market value of the common stock as of the
first day of the payroll deduction period and as of the last day of that period.
The Compensation Committee may increase the exercise price before a payroll
deduction period begins. No participant can purchase more than $25,000 worth of
NetCreations common stock in all payroll deduction periods ending during the
same calendar year. The closing price of a share of our common stock, as
reported on May 12, 2000 was $30.50.
Election to Participate. Participating employees must elect before the
beginning of a given payroll deduction period to participate, although a prior
election will carry over until revoked.
Termination of Service. If an employee's employment ends for any reason,
including death, any cash accumulated in the employee's account will be
distributed, and the employee will immediately cease to participate in the ESPP,
unless the Compensation Committee specifies some other treatment.
Other Information. All options granted under the ESPP will be evidenced
by participation agreements or other approved documentation. The Compensation
Committee has broad discretion to determine the timing, amount, exercisability,
and other terms and conditions of options granted to employees. No options
granted or funds accumulated under the ESPP are assignable or transferable other
than by will or in accordance with the laws of descent and distribution. The
Compensation Committee may impose restrictions on sale of the stock or require
the stock to be held at a particular broker.
AMENDMENT OR TERMINATION OF THE ESPP
The Board of Directors may amend or terminate the ESPP at any time and
from time to time. Shareholder approval is required for any changes if such
approval is required to preserve the ESPP's status as a plan under section 423
of the Internal Revenue Code. Absent extension by the Board with shareholder
approval, no payroll deduction period will end after June 30, 2010.
TAX CONSEQUENCES
The following summarizes the material federal income tax consequences of
participation in the ESPP. It does not cover employment taxes except as
specified, nor does it cover other federal, state, local, or foreign tax
consequences, if any.
The ESPP is intended to qualify for the favorable federal income tax
treatment provided under Section 423 of the Internal Revenue Code.
A participant's withheld compensation will be post-tax. In other words,
the participant will be taxed on amounts withheld for the purchase of shares of
our common stock as if he or she had instead received his or her full salary or
wages. Other than this, no income will be taxable to a participant until
disposition of the shares acquired, and the method of taxation will depend upon
how long the shares were held before disposition. However, liability for Social
Security (and Medicare) tax may also be incurred with respect to the excess of
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<PAGE>
the value of the stock over the exercise price when the shares are purchased at
the end of the payroll deduction period.
If the purchased shares of common stock are disposed of more than two
years after the beginning of the applicable payroll deduction period and more
than one year after the exercise date, or if the participant dies at any time
while holding the stock, then the lesser of (a) the excess of the fair market
value of the stock at the time of such disposition or death over the purchase
price or (b) the discount element (up to 15% of fair market value of the stock
as-of the beginning of the applicable offering period) will be treated as
ordinary income. Any further gain or any loss will be taxed as a long-term
capital gain or loss. Net long-term capital gains for individuals are currently
subject to a maximum marginal federal income tax rate that is less than the
maximum marginal rate for ordinary income.
If the participant sells or disposes of the stock before the expiration
of either of the holding periods described above (a "disqualifying
disposition"), then the excess of the fair market value of the stock on the
exercise date over the exercise price will be treated as ordinary income at the
time of such disposition. We may, in the future, be required to withhold income
taxes relating to such ordinary income from other payments made to the
participant. The balance of any gain on a sale will be treated as capital gain.
Even if the stock is sold for less than its fair market value on the exercise
date, the same amount of ordinary income is attributed to the participant, and a
capital loss is recognized equal to the difference between the sales price and
the fair market value of the stock on the exercise date. Any capital gain or
loss will be long- or short-term depending on whether the stock has been held
for more than one year.
There are no federal income tax consequences to us by reason of the grant
or exercise of rights under the ESPP. We will, in general, be entitled to a
deduction to the extent amounts are taxed as ordinary income to a participant by
reason of a disqualifying disposition of the purchased shares of stock, but will
not be entitled to a deduction in respect of the ordinary income realized by a
participant upon later disposition, or realized upon death. The Company's
deduction may be limited under Internal Revenue Code Section 162(m) and may be
subject to disallowance for failure to report the optionee's income (which could
arise if an optionee does not notify the Company of the sale of stock in a
disqualifying disposition).
INCORPORATION BY REFERENCE
The foregoing is only a summary of the ESPP and is qualified in its
entirety by reference to its full text, a copy of which is attached as Appendix
B.
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PROPOSAL 4:
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed Grant Thornton, LLP, an
international accounting firm of independent certified public accountants, to
act as independent accountants for the Company for 2000. The Board believes that
Grant Thornton's experience with and knowledge of NetCreations are important and
we would like to continue this relationship. Grant Thornton, LLP has advised us
that the firm does not have any direct or indirect financial interest in us, nor
has such firm had any such interest in us since its inception in 1995 other than
its capacity as our independent certified public accountants.
A representative of Grant Thornton, LLP is expected to attend our Annual
Meeting. The Grant Thornton, LLP representative will have the opportunity to
make a statement if he or she desires to do so and will be able to respond to
appropriate questions from shareholders.
RECOMMENDATION
The Board of Directors recommends a vote "FOR" ratification of the
appointment of Grant Thornton, LLP.
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<PAGE>
BENEFICIAL OWNERSHIP OF COMPANY COMMON STOCK
BY DIRECTORS, OFFICERS AND PRINCIPAL SHAREHOLDERS
For the purposes of calculating percentage ownership as of May 15,
2000, 15,495,000 shares were issued and outstanding and, for any individual who
beneficially owns shares represented by options exercisable on or before July
15, 2000, these shares are treated as if outstanding for that person, but not
for any other person. Unless otherwise indicated, the address of each of the
individuals and entities named below is: c/o NetCreations, Inc., 379 West
Broadway, Suite 202, New York, New York 10012.
The following table sets forth certain information with respect to
beneficial ownership of our common stock as of May 15, 2000, as to:
- each person known by us to own beneficially more than 5% of our
outstanding common stock;
- each of our directors and executive officers; and
- all our directors and executive officers as a group.
Beneficial Ownership
of Shares
Name Number Percent
---- ------ -------
Rosalind B. Resnick 5,740,500 36.3%
Ryan Scott Druckenmiller 5,530,035 35.0%
Mitchell York (1) 133,332 *
Gary Sindler (1) 39,000 *
Scott Wolf (1) 33,333 *
Allison Fillmore - *
Tej Anand - *
Brian Burlant - *
Michael Levy (1) 49,999 *
Gregory W. Slayton (1) 49,999 *
All directors and executive
officers as a group (10 persons) 11,576,198 73.3%
* Less than 1% of the outstanding common stock
(1) Consists of options to purchase shares of common stock which are
exercisable within 60 days following the issuance of this proxy
statement
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires our officers (as defined in regulations issued by the
SEC) and directors, and persons who own more than ten percent of a registered
class of our equity securities, to file reports of ownership and changes in
ownership with the SEC. Officers, directors and greater than ten percent
shareholders are required by SEC regulation to furnish us with copies of all
Section 16(a) forms they file.
Based solely on a review of copies of such reports of ownership furnished
to us, we believe that during the past fiscal year all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
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<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information relating to our executive officers and
directors.
Name Age Position
---- --- --------
Rosalind B. Resnick 40 Chief Executive Officer,
Chairman of the Board of
Directors, and Treasurer
Ryan Scott Druckenmiller 30 Chief Technology
Officer, Vice President,
Secretary and Director
Mitchell York 43 President, Chief
Operating Officer and
Director
Gary Sindler 53 Chief Financial Officer
Scott Wolf 45 Senior Vice President,
Sales and Business
Development
Allison Fillmore 42 Senior Vice President,
Marketing
Tej Anand 37 Chief Information
Officer
Brian Burlant 40 Senior Vice President,
General Counsel
Michael Levy (1)(2) 53 Director
Gregory W. Slayton (1)(2) 40 Director
(1) Member of Audit Committee
(2) Member of Compensation Committee
Rosalind B. Resnick has served as our Chief Executive Officer, President
and Chairman of our board of directors since our inception. In September 1995,
Ms. Resnick developed America Online's NetGirl Forum, a dating and relationships
area of the America Online service that she hosted until September 1996. Ms.
Resnick began her career in the newspaper industry in 1980 as an intern at the
Baltimore Sun. From 1984 to 1989, Ms. Resnick worked as a business writer at The
Miami Herald. Her articles have appeared in Internet World, NetGuide, Computer
Life, PC Today, Home Office Computing, and other leading computer magazines. In
1995, she co-authored The Internet Business Guide, and from 1994 to 1997, she
served as the editor and publisher of Interactive Publishing Alert, a
semi-monthly newsletter tracking trends and developments in online publishing
and advertising. She is also a contributing editor to Phillips' Interactive P.R.
and Marketing News Newsletter. Ms. Resnick received B.A. and M.A. degrees from
Johns Hopkins University.
Ryan Scott Druckenmiller has served as our Chief Technology Officer and a
member of our board of directors since our inception. Mr. Druckenmiller is an
award-winning Web programmer who created the software that powers
www.postmasterdirect.com's online list store, list member sign-up process, and
list owner accounting system. Mr. Druckenmiller's prolific software output also
includes the PostMaster URL Announcement Service, which submits Web sites to
over 400 leading search engines and directories; PostMaster BannerNet, a free
banner network; TrackBot, an advertising tracking tool, and PinPoint, a
personalized search engine interface. Prior to joining NetCreations, from 1990
to 1995, Mr. Druckenmiller developed video games for the Amiga platform and
published an Amiga newsletter, providing software and information for Amiga
computer users.
Mitchell York has been a member of our board of directors since October
1999 and our President and Chief Operating Officer since January 2000. He
previously served as President of LendingTree, Inc., a leading online loan
marketplace, from September 1998 to September 1999. During that time he oversaw
LendingTree's marketing, technology and other key business areas. Prior to this,
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Mr. York was, for 17 years, an executive of CMP Media Inc., a worldwide
technology information and marketing services company. As vice president of
CMP's Internet division, he lead the company's entry into online media by
launching TechWeb, an information service for information technology
professionals. Prior to launching TechWeb, Mr. York was a publisher of several
of CMP's major technology titles, including VARBusiness magazine. He also was
the founding editor of the company's Travel division, which was later sold to
Miller Freeman. Mr. York received a bachelor's degree with honors from
Northwestern University and an M.B.A. from the Columbia Graduate School of
Business.
Gary Sindler has been our Chief Financial Officer since June 1999. From
February 1999 to June 1999, Mr. Sindler was a consultant to FTI Consulting,
Inc., a provider of litigation, applied sciences and expert financial consulting
services based in Annapolis, Maryland. From July 1996 to February 1999, Mr.
Sindler was Executive Vice President, Secretary and Chief Financial Officer of
FTI. From August 1993 to July 1996, Mr. Sindler was Chief Financial Officer of
Aon Risk Services, Inc. of New York. Prior to 1993, he held various senior-level
positions in finance and administration with Willis Corroon, PLC and Alexander &
Alexander Services Inc., two international insurance brokerage firms. Mr.
Sindler holds a B.S. degree in accounting from the University of Baltimore and
is a certified public accountant.
Scott Wolf joined us as our Senior Vice President, Sales and Business
Development in January 2000. Previously Mr. Wolf was chief operating officer at
EarthCam, a leading portal of live images on the Internet, where under his
day-to-day operations and new business leadership, the company's sales tripled.
Mr. Wolf spent 18 years at CMP Media Inc. where he held various senior level
positions including VP Group Publisher and Publishing Director of CMP's first
paid magazine, Windows Magazine. He holds a B.A. from University of
Pennsylvania, MBA from NYU's Stern School of Business.
Allison Fillmore joined us as Senior Vice President of Marketing in
February 2000. Since November 1998, she was the Vice President of Marketing at
MarketXT, Inc. a start up, after-hours online trading company. From October 1994
to November 1998 Ms. Fillmore founded Smartgirls....because it's fun to be
smart, an entrepreneurial venture. During this time she also worked as a
consultant and further pursued her education. From 1989 to September 1994, she
was the Corporate Vice President for PaineWebber's Resource Management Account.
While at PaineWebber she strategically positioned and launched several products.
Ms. Fillmore earned a BA in Comparative Literature from Columbia University
where she graduated Cum Laude.
Tej Anand joined us in February 2000 as the Chief Information Officer.
Since 1998, he held a similar position at Golden Books Family Entertainment
where he was responsible for overseeing systems development and computer
operations for the company. From 1993 to 1998, Mr. Anand was Director of
Knowledge Discovery Solutions at NCR's Human Interface Technology Center. Mr.
Anand worked for A. C. Nielsen, where he developed two novel data mining tools,
"Spotlight" and "Opportunity Explorer," that extract business insights from
retail point-of-sale data. He is a member of the IEEE, the American Association
of Artificial Intelligence and the American Statistical Association. He has
authored several technical papers and is often invited to speak to technical and
business audiences. Mr. Anand received a Bachelor of Technology degree from
Indian Institute of Technology, Bombay, India and a Master of Science degree
from the University of South Carolina.
Brian Burlant joined us in April 2000 as our Senior Vice President,
General Counsel. Previously, Mr. Burlant was Assistant General
Counsel-International with Avon Products, Inc., the international beauty/direct
selling company, where he counseled on establishing various strategic ventures
and new businesses, among other matters, in the U.S., Europe, Asia, Latin
America and Africa. Before that, he was counsel to Times Mirror Magazines and
practiced law with a major New York law firm. Mr. Burlant holds a B.S. with
honors from the Wharton School, a B.A. with honors from the University of
Pennsylvania and a J.D. from The George Washington University.
Michael Levy has been a member of our board of directors since October
1999. He has served as the President, Chief Executive Officer and Chairman of
the Board of SportslineUSA, Inc. since its inception in February 1994. From 1979
through March 1993, Mr. Levy served as President, Chief Executive Officer and as
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<PAGE>
a Director of Lexicon Corporation, a high technology company specializing in
data communications and signal processing technology. From January 1988 to June
1993, Mr. Levy also served as Chairman of the Board and Chief Executive Officer
of Sports-Tech International, Inc., a company engaged in the development,
acquisition, integration, and sale of computer software, equipment, and
computer-aided video systems used by professional, collegiate and high school
sports programs. Between June 1993 and February 1994 Mr. Levy was a private
investor. Mr. Levy also serves as a member of the board of directors of iVillage
Inc. Mr. Levy received a B.S. in Electrical Engineering from the Georgia
Institute of Technology.
Gregory W. Slayton has been a member of our board of directors since
October 1999. He has served as President, Chief Executive Officer and a member
of the board of directors of ClickAction Inc. since December 1997. From March
1996 to July 1997, Mr. Slayton was the President, Chief Operating Officer, and
Director of ParaGraph International. In August 1994, Mr. Slayton co-founded
Worlds, Inc. and served as Senior Vice President and Chief Financial Officer
until November 1995. Prior to founding Worlds, Inc., Mr. Slayton served as Vice
President and Chief Financial Officer of Paramount Technology Group of Paramount
Communications Inc. Mr. Slayton was also a management consultant with McKinsey &
Company for four years. Mr Slayton serves on the board of directors of inTest
Corporation, and he is on the board of directors of Opportunity International, a
non-profit organization. Mr. Slayton holds a B.A. in Economics from Dartmouth
College and an M.B.A. from Harvard Business School.
MEETINGS OF THE BOARD OF DIRECTORS AND STANDING COMMITTEES
Board Composition
We currently have five directors. Each director is elected at the annual
general meeting of our shareholders, by a vote of the holders of a plurality of
the voting power represented at such meeting. Each director holds office until
the annual general meeting of our shareholders or until his or her successor has
been elected.
Our non-management directors serve on the audit committee and the
compensation committee of the board. The executive officers serve at the
discretion of the board.
The Board of Directors held a total of 7 meetings during 1999. All of the
directors attended both meetings of the Board of Directors and all committees of
the Board of Directors on which he or she served.
Board Committees
The Board of Directors currently consists of five members. The standing
committees of the Board of Directors consist solely of a Compensation Committee
and an Audit Committee.
The Compensation Committee consists of Messrs. Levy and Slayton, each of
whom are independent directors. Although the Compensation Committee did not meet
during 1999, it met in March 2000. This committee recommends, reviews and
oversees the salaries, benefits and stock option plans for our employees,
consultants, directors and other individuals compensated by us. The compensation
committee also administers our compensation plan.
The Audit Committee consists of Messrs. Levy and Slayton, each of whom
are independent directors. Although the Audit Committee did not meet during
1999, it met once in March, 2000 to discuss the year end audit process with
Grant Thornton LLP. The Audit Committee makes recommendations to the Board of
Directors with respect to various auditing and accounting matters, including the
recommendation of our auditors, the scope of the annual audit, fees to be paid
to the auditors, the performance of our independent auditors and our accounting
practices. The audit committee has responsibility for, among other things, the
planning and review of our annual audit and periodic reports and accounts and
the involvement of our auditors in that process, focusing particularly on
compliance with legal requirements and accounting standards and the related
rules of the Nasdaq Stock Market, the Securities and Exchange Commission of the
United States, and the establishment of an effective system of internal
accounting controls. The Board of Directors adopted a written charter for the
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<PAGE>
Audit Committee on May 15, 2000 which is attached to the Proxy Statements as
Appendix C.
Audit Committee Report
In March 2000, the Audit Committee met with management to review and
discuss the audited financial statements. In addition, the Audit Committee had
discussions with Grant Thornton LLP, regarding the matters required by the
Codification of Statements on Auditing Standards No. 61. The audit committee has
received the written disclosures and a letter from Grant Thornton LLP as
required by Independence Standards Board Standard No. 1. "Independence
Discussions with Audit Committees", and has discussed with Grant Thornton their
independence. Based upon the review and discussions referred to above, the audit
committee recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report for the year ended
December 31, 1999.
This Report shall not be deemed incorporated by reference in any document
previously or subsequently filed with the Securities and Exchange Commission
that incorporates by reference all or any portion of this proxy statement,
unless the report is specifically incorporated by reference.
Michael Levy
Gregory W. Slayton
Director Compensation
None of our directors receive cash compensation for their service on
our board of directors, although our management directors receive cash
compensation for their services as our officers. All directors, however, are
reimbursed for reasonable expenses incurred in connection with serving as a
director. We have granted options, effective as of October 8, 1999, to purchase
100,000 shares of our common stock to each of our non-management directors at
the time, Messrs. Levy, Slayton and York, at an exercise price of $10.00 per
share. On January 6, 2000, Mr. York also became the Company's President and
Chief Operating Officer. One-third of the options granted to these three
directors vested upon the consummation of our initial public offering. The
remaining two-thirds vest in equal installments on each of the next eight
quarterly anniversaries following the consummation of our initial public
offering. We anticipate that our board of directors will hold regularly
scheduled meetings quarterly.
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<PAGE>
Executive Compensation
The following table sets forth all compensation received during the
indicated years by our Executive Officers in their indicated capacities as
officers. In these fiscal years we had no other executive officers and no other
employee earned in excess of $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Securities
Name and Underlying All Other
Principal Position Salary Bonus Other Options Compensation(1)
------------------ ------ ----- ----- ------- ---------------
Annual Compensation
-------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Rosalind Resnick, 1999 $157,292 $60,000 - - 1999 $1,999,633
Chief Executive Officer and 1998 $185,000 - - - 1998 $155,000
Chairman of the Board of 1997 $120,000 - - - 1997 $96,800
Directors........................ 1999 $157,292 $60,000 - - 1999 $1,922,000
Ryan Scott Druckenmiller, 1998 $185,000 - - - 1998 155,000
Chief Technology Officer and 1997 $120,000 - - - 1997 $96,880
member of the Board of Directors. 1999 $ 85,865 $37,500 - 117,000 1999 -
Gary Sindler, 1998 - - - - 1998 -
Chief Financial Officer 1997 - - - - 1997 -
</TABLE>
(1) Includes contributions to our pension plan of $20,000, $30,000 and $30,000
for the benefit of each of Ms. Resnick and Mr. Druckenmiller in 1999, 1998
and 1997, respectively. Also includes distributions to the shareholders that
were made in accordance with our election to be taxed as an S corporation.
Such distributions are common for S corporations.
Option Grants in Last Fiscal Year
The following table shows information regarding stock options granted
to the named executive officers during the year ended December 31, 1999. No
stock appreciation rights were granted to these individuals during the year.
<TABLE>
<CAPTION>
Number of % of Total Potential Realizable Value at Assumed
Shares Options Exercise Annual Rates of Stock Price
Underlying Granted to Price Appreciation for Option
Options Employees in per Expiration Term ($)
Name Granted Fiscal Year Share Date 0% 5% 10%
---- ------- ----------- ----- ---- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Rosalind B. Resnick - - - - - - -
Ryan Scott Druckenmiller - - - - - - -
Gary Sindler 117,000 47% $5.00 June 2004 $936,000 $1,356,000 $1,865,000
</TABLE>
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<PAGE>
Aggregate Option Exercises and Holdings
The following table sets forth information concerning the options held
by each of our named executive officers at December 31, 1999. The values set
forth below have been calculated based on the last reported sale price of our
common stock on December 31, 1999 of $44.00, less the applicable exercise price
per share, multiplied by the number of shares underlying the options.
<TABLE>
<CAPTION>
Number of Shares Value of Unexpired
Underlying Unexercised In-the-Money options
Options At Fiscal Year End at Fiscal Year End ($)
-------------------------- ----------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Rosalind B Resnick - - - -
Ryan Scott Druckenmiller - - - -
Gary Sindler - 117,000 - $4,563,000
</TABLE>
New Plan Benefits
The following table sets forth the number of options that will be
received by or allocated to each of the following individuals or groups if the
proposal to increase the number of options authorized under the Stock Option
Plan, is approved by the shareholders.
<TABLE>
<CAPTION>
Number of
Name Position Options
---- -------- -------
<S> <C> <C>
Rosalind B. Resnick Chief Executive Officer,
Chairman of the Board of -
Directors, and Treasurer
Ryan Scott Druckenmiller Chief Technology Officer, Vice
President, Secretary and -
Director
Gary Sindler Chief Financial Officer -
Mitchell York (1) President, Chief Operating 500,000
Officer and Director
Brian Burlant Senior Vice President, General 100,000
Counsel
Nicolle Comeforo Vice President, Human Resources 85,000
Total Executive Group 685,000
Non-Executive Director Group -
Non-Executive Officer Employee Group -
</TABLE>
(1) Mr. York has been granted a total of 600,000 options to purchase our common
stock in connection to his services as our director (100,000 options) and,
subsequently, as our President and Chief Operations Officer (500,000
options). As a result of the current limitation under the Stock Option Plan,
132,000 of these options will not become eligible under the Stock Option
Plan until our shareholders approve the amended Plan.
Stock Option Information
Prior to our initial public offering, we granted options, effective as
of September 14, 1999 and as of November 11, 1999, to purchase 241,000 shares of
our common stock at an exercise price of $5.00 per share under our 1999 Stock
Option Plan. Additionally, we granted an additional 5,500 shares at prices less
than the fair market value on the date of grant. Those options were granted to
our employees other than Ms. Resnick and Mr. Druckenmiller. Those options are
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exercisable for a period of five years, but not until they have vested. Those
options vest in equal one-third installments on each of the three anniversaries
of the date of grant, subject to the optionees' continued employment with us.
Ms. Resnick and Mr. Druckenmiller received S corporation distributions until
November 15, 1999, when the S corporation status was terminated. Ms. Resnick and
Mr. Druckenmiller have received no options or other stock-based compensation. In
addition, we have granted options to purchase 100,000 shares of common stock to
each of our three directors, Messrs. Levy, Slayton and York, at an exercise
price of $10.00 per share. The options granted to these three directors are also
exercisable for a period of five years, but not until they have vested. One
third of these options vested upon the consummation of our initial public
offering on November 12, 1999. The remaining two-thirds of the options vest in
equal installments on each of the next eight quarterly anniversaries following
our initial public offering. Vesting also depends on their continued service as
our directors, subject to acceleration under certain circumstances. All the
outstanding options granted to our directors would be accelerated, and all of
our other outstanding options may be accelerated, as to vesting and
exercisability, in the event of certain transactions, including certain changes
in our control, certain mergers and reorganizations, and certain dispositions of
substantially all of our assets. The vesting and exercisability of the options
issued to the three directors would also be accelerated if those directors are
not re-elected to office, except if they are unable to serve or choose not to
serve, or if they are removed from office, except for cause or material
non-performance of their duties
Subsequent to our initial public offering, we granted options, effective
as of January 6, 2000, to purchase an aggregate of 700,000 shares of our common
stock, at an exercise price of $33.25 per share. These options were granted to
two of our new executive employees, Mitchell York and Scott Wolf. These options
are exercisable for a period of five years, but not until they have vested.
Sixteen and two-thirds percent (16.667%) of the options granted to Messrs. York
and Wolf, vest on July 6, 2000. The remaining options vest in equal installments
on each of the next ten quarterly anniversaries after July 6, 2000, subject to
their continued employment with us. In addition, we have granted options,
effective as of February 2, 2000, to purchase an aggregate of 350,000 shares of
our common stock at an exercise price of $33.50 per share under our 1999 Stock
Option Plan to Tej Anand and Allison Fillmore. The options are exercisable for a
period of five years, but not until they have vested. Sixteen and two-thirds
percent (16.667%) of the options granted to Mr. Anand and Ms. Fillmore, vest on
August 2, 2000. The remaining options vest in equal installments on each of the
next ten quarterly anniversaries following August 2, 2000, subject to the
optionees' continued employment with us. In 2000, we also granted options to
purchase 33,000 shares of our common stock to other employees at exercise prices
equal to the fair market value on the dates of grant. We have also granted
options in April 2000 to purchase an aggregate of 185,000 shares of our common
stock at an exercise price of $22.00 per share under our 1999 Stock Option Plan
to Brian Burlant and Nicolle Comeforo. These options are exercisable for a
period of five years, but not until they have vested. Sixteen and two-thirds
percent (16.667%) of the options granted to Mr. Burlant and Ms. Comforo, vest on
October 14, 2000. The remaining options vest in equal installments on each of
the next ten quarterly anniversaries after October 14, 2000, subject to the
optionees' continued employment with us. The options granted to Mitchell York,
Brian Burlant, and Nicolle Comeforo are subject to shareholder approval of the
increase in the number of options authorized under our Stock Option Plan.
Employment Agreements
We have entered into one-year employment agreements with six of our
technology employees. These agreements are automatically renewable and are
terminable by either the employee or us upon 90 days' notice. The remaining
non-management employees are employed on an at-will basis. All of our
non-management employment arrangements provide, among other things, that each of
the employees shall provide services to us on a full-time basis. All of our
non-management employees have also entered into agreements with us, which
contain restrictive covenants relating to non-competition with us,
non-solicitation of our customers, non-dealing with our customers and
non-solicitation of our suppliers and employees. In addition, each of these
agreements contains an express obligation of confidentiality in respect of our
trade secrets and confidential information and provide for us to own any
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intellectual property rights created by our employees in the course of their
employment.
We have entered into employment agreements with Rosalind Resnick, as our
Chief Executive Officer and Chairman of our board of directors, Ryan Scott
Druckenmiller, as our Chief Technology Officer, Mitchell York, as our President,
Chief Operating Officer and director, Gary Sindler, as our Chief Financial
Officer, Scott Wolf, as our Senior Vice President, Sales and Business
Development, Allison Fillmore, as our Senior Vice President, Marketing, Tej
Anand, as our Chief Information Officer Brian Burlant as our General Counsel and
Nicolle Comeforo as our Vice President, Human Resources. Ms. Resnick's, Mr.
Druckenmiller's and Mr. Sindler's agreements expire on December 31, 2002.
Messrs. York's and Wolf's agreements expire on January 5, 2003. Ms. Fillmore's
and Mr. Anand's agreements expire on February 1, 2003. Mr. Burlant's agreement
expires on April 14, 2003 and Ms. Comeforo's agreement expires on April 17,
2003. The executives are entitled to base salaries per annum, initially as
follows: Rosalind Resnick, $175,000; Ryan Scott Druckenmiller, $175,000;
Mitchell York, $250,000; Gary Sindler, $150,000; Scott Wolf, $200,000; Allison
Fillmore, $140,000; Tej Anand, $200,000; Brian Burlant, $165,000; and Nicolle
Comeforo, $135,000. The executives are entitled to annual bonuses as the
compensation committee of our board of directors may determine based upon their
performance and achievement of specified goals to be established and mutually
agreed upon by each of them and the compensation committee prior to the
beginning of their bonus period as follows: Rosalind Resnick, up to $175,000 per
year; Ryan Scott Druckenmiller, up to $175,000 per year; Mitchell York, up to
$150,000 per year; Gary Sindler, up to $75,000 per year; Scott Wolf, up to
$100,000 per year; Allison Fillmore, up to $60,000 year; Tej Anand, up to
$150,000 per year, Brian Burlant up to $70,000 per year, and Nicolle Comeforo,
up to $65,000. Ms. Resnick and Mr. Druckenmiller are also entitled to additional
performance bonuses, if any, as may be determined from time to time by the
compensation committee upon the achievement of performance goals to be mutually
agreed upon by each of Ms. Resnick and Mr. Druckenmiller, as the case may be,
and the compensation committee. Each of Ms. Resnick and Mr. Druckenmiller have
agreed not to compete with us in providing direct email marketing services to
third parties for compensation during the term of employment and for at least
three years after their employment is terminated other than a termination
without cause or a termination during the first year following a change in
control. Each of the remaining executives has agreed not to compete with us in
providing direct email marketing services to third parties for compensation
during the term of employment and for at least two years after their employment
is terminated other than a termination without cause or a termination during the
first year following a change in control. The executives are entitled to
customary medical, life insurance, vacation, and other benefits under each of
the agreements. Each of the executives will be eligible to be granted options
under our 1999 Stock Option Plan, at the discretion of the committee
administering that plan. Pursuant to each of their employment agreements, the
executives have been granted stock options as follows: Mitchell York, 500,000;
Gary Sindler 117,000; Scott Wolf, 200,000; Tej Anand, 200,000; Brian Burlant,
100,000; Allison Fillmore, 150,000; and Nicolle Comeforo, 85,000 stock options
respectively, under our 1999 Stock Option Plan. Mr. York and Mr. Wolf are both
also eligible for a contingent grant of another 75,000 stock options, to be
granted 25,000 on each of the first, second and third anniversary dates of their
employment, and shall be vested immediately upon grant. The strike price will be
the average of the closing price of the 5 business days preceding the date of
issuance of such grants. Mr. Burlant is also eligible for a contingent grant of
another 30,000 stock options, to be granted 10,000 on each of the first, second
and third anniversary dates of his employment and shall be vested immediately
upon grant. The strike price will be the average of the closing price of the 5
business days preceeding the date of issuance of such grants. Ms. Resnick and
Mr. Druckenmiller have not been granted any options. Each of the contracts
include customary provisions entitling us to terminate the executive's
employment for cause, upon extended disability of the executive, upon the
executive's death, and otherwise without cause. Each executive is entitled to
terminate the executive's employment upon material breach of the contract by us
and without cause upon prior notice to us. The contracts contain customary
provisions to protect our confidential information and to ensure that we will
own inventions and improvements developed by the executive during the
executive's employment activities. Under certain circumstances, the following
executives will receive the indicated cash payments in connection with a change
in control of our company: Mitchell York, $125,000; Gary Sindler, $150,000;
Scott Wolf, $100,000, and Tej Anand, $100,000. Additionally, under certain
circumstances, unvested stock options granted to the following executives will
become exercisable immediately prior to a change in control: Mitchell York, Gary
Sindler, Scott Wolf, Tej Anand, Allison Fillmore, Brian Burlant, and Nicolle
Comeforo.
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COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of our Board of Directors consists solely of
two non-employee directors. The Compensation Committee determines all
compensation paid or awarded to our key executive officers, except that our
Board has delegated to the Chief Executive Officer, as a Board Committee of one,
the ability to grant options to new hires for up to 100,000 shares of our common
stock, subject to a duty to report periodically to the Compensation Committee.
PHILOSOPHY. The Compensation Committee's goal is to recruit and retain an
executive team of superior talent. To do so, the Committee attempts to offer
competitive and fair compensation that rewards executives for exceptional
performance and holds them accountable for our performance. Particular objective
factors that the Committee believes are important in assessing performance
include growth in our database of email addresses, an increase in our customer
base, and growth in net revenue, pre-tax earnings, and earnings per share.
Subjective factors the Committee believes are also important in evaluating
performance include success in undertaking joint ventures and acquisitions and
retention of key employees.
In establishing appropriate levels for base salary, the Compensation
Committee considers the market for senior executives of public companies in
businesses comparable to us, based on their own business experience. The
Committee also considers the particular officer's overall contributions to us
over the past year and previously. Quarterly performance bonuses are based on
the Compensation Committee's evaluation of the executive's performance in
achieving several specified annual goals. Option grants are designed to reward
an executive officer for his overall contribution to and to serve as an
incentive to achieve our goal of increasing shareholder value.
Executive officers' compensation consists primarily of three components:
(i) base salary, (ii) cash bonus, and (iii) stock options.
BASE SALARY. The Committee establishes base salaries after considering a
variety of factors that determine an executive's value to NetCreations,
including the individual's knowledge, experience, and accomplishments and the
level of responsibility assumed. The Committee also sets base salaries at levels
it considers necessary to retain key employees.
CASH BONUS. The Committee determined each individual's cash bonus for the
fiscal year ended December 31, 1999. Cash bonuses are based on the Committee's
overall qualitative evaluation of the performance and accomplishments of each
executive officer in achieving various specified goals for the year.
STOCK OPTIONS. The Committee believes achievement of our goals may be
fostered by a stock option program that is tailored to employees who
significantly enhance NetCreations' value. Accordingly, during the fiscal year
ended December 31, 1999, the Committee granted employees options to purchase
546,500 shares of our common stock. Named Executive Officers received options
with respect to 117,000 shares of our Common Stock.
CHIEF EXECUTIVE OFFICER'S COMPENSATION. For Rosalind B. Resick's services
as our Chief Executive Officer and Chairman of the Board of Directors, she
received an amount of compensation for 1999 determined in accordance with the
compensation policies established by the Compensation Committee. The Committee
awarded Ms. Resnick a bonus of $60,000 for the fiscal year ended December 31,
1999. In doing so, it reviewed her employment agreement from before the public
offering, considered the successful completion of our initial public offering,
the progress in developing new opportunities for NetCreations over the last
fiscal year, the success in the recruitment of personnel, and the increase in
market development.
COMPENSATION DEDUCTION LIMIT. The Securities and Exchange Commission
requires that this report comment on our policy with respect to a special rule
under the tax laws, section 162(m) of the Internal Revenue Code. That section
limits, with exceptions described below, the compensation that a corporation can
deduct for payments to a chief executive officer and the four other most highly
compensated executive officers to $1 million per officer per year. A company can
deduct compensation (including from exercising options) in excess of $1 million
if it pays the compensation under a plan that its shareholders approve and that
is performance-related. Option exercises are typically deductible under such a
plan if granted by a committee of outside directors with exercise prices at or
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above the market price when granted or if grandfathered because granted before
the public offering. The Committee's policy with respect to the compensation
deduction limit is to make every reasonable effort to ensure that compensation
likely to be received by a senior executive is deductible under section 162(m),
while at the same time giving our executives incentives to stay with and enhance
NetCreations' value. The Committee believes, however, that compensation
exceeding the $1 million deduction limit should not be ruled out where such
compensation is justified based on the executive's value to NetCreations and its
shareholders. The Committee believes that no executive compensation expenses
paid in 1999 will be non-deductible under section 162(m).
Michael Levy
Gregory W. Slayton
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of our Compensation Committee is an officer or
employee of ours. None of our executive officers serves as a member of the board
of directors or compensation committee of any entity that has one or more
executive officers serving on our Board of Directors or Compensation Committee.
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<PAGE>
STOCK PERFORMANCE CHART
As part of proxy statement disclosure requirements mandated by the
Securities and Exchange Commission, we are required to provide a five-year
comparison of the cumulative total shareholder return on our common stock with
that of a broad equity market index and either a published industry index or a
peer group index constructed by us. This graph is not deemed to be "soliciting
material" or to be "filed" with the SEC or subject to the SEC's proxy rules or
to the liabilities of Section 18 of the 1934 Act, and the graph shall not be
deemed to be incorporated by reference into any prior or subsequent filing by
the corporation under the Securities Act of 1933 or the 1934 Act.
The following chart compares the yearly percentage change in the
cumulative total shareholder return of our common stock since our initial public
offering in November 1999 with the cumulative total return on the Nasdaq Stock
Market-U.S. Index and the Chase H&Q Internet Index (the peer index). The
comparison assumes $100 was invested on November 12, 1999 of our common stock
and in each of the above indices with reinvestment of dividends.
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG NETCREATIONS, INC., THE NASDAQ STOCK MARKET-U.S. INDEX,
AND THE CHASE H&Q INTERNET INDEX
[OBJECT OMITTED]
[GRAPHIC OMITTED]
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11/12/99 12/31/99
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NetCreations, Inc. $100.00 $338.46
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The Chase H&Q Internet Index $100.00 $159.83
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Nasdaq Stock Market-U.S. Index $100.00 $127.27
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ANNUAL REPORT ON FORM 10-K
OUR 1999 ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS FOR
THE YEAR ENDED DECEMBER 31, 1999, IS BEING DISTRIBUTED TO ALL SHAREHOLDERS OF
THE COMPANY TOGETHER WITH THIS PROXY STATEMENT, IN SATISFACTION OF THE
REQUIREMENTS OF THE SECURITIES AND EXCHANGE COMMISSION. ADDITIONAL COPIES OF THE
REPORT, EXCEPT FOR EXHIBITS, ARE AVAILABLE AT NO CHARGE UPON REQUEST. TO OBTAIN
ADDITIONAL COPIES OF THE ANNUAL REPORT ON FORM 10-K, PLEASE CONTACT GARY
SINDLER, CHIEF FINANCIAL OFFICER, AT 379 WEST BROADWAY, SUITE 202, NEW YORK, NEW
YORK, 10012, OR AT TELEPHONE NUMBER (212) 625-1370.
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<PAGE>
SHAREHOLDER PROPOSALS
If you intend to propose any matter for action at our 2001 Annual Meeting
of Shareholders and wish to have the proposal included in our proxy statement,
you must submit your proposal to the Secretary of NetCreations at 379 West
Broadway, Suite 202, New York, New York, 10012, not later than November 15, 2000
at 5:00 p.m. Eastern Standard Time. Please note that proposals must comply with
all of the requirements of Rule 14a-8 under the Securities Exchange Act of 1934
as well as the requirements of our Certificate of Incorporation and Bylaws. Only
then can we consider your proposal for inclusion in our proxy statement and
proxy relating to the 2001 Annual Meeting. We will be able to use proxies you
give us for the next year's meeting to vote for or against any shareholder
proposal that is not included in the proxy statement at our discretion unless
the proposal is submitted to us not less than 60 days or more than 90 days prior
to the date of such meetings, unless we do not provide notice of the meeting
within 70 days of more of such date, in which case notice must be provided
within 10 days from the date we mailed our notice.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Ryan Scott Druckenmiller
Ryan Scott Druckenmiller, Secretary
New York, New York
May 30, 2000
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APPENDIX A
NETCREATIONS, INC.
1999 EMPLOYEE STOCK OPTION PLAN
(AS AMENDED, EFFECTIVE JANUARY 1, 2000)
1. Purpose. The purpose of this Plan is to advance the interests of
NETCREATIONS, INC., a New York corporation (the "Company"), and its Subsidiaries
by providing an additional incentive to attract and retain qualified and
competent persons who provide management services and upon whose efforts and
judgment the success of the Company and its Subsidiaries is largely dependent,
through the encouragement of stock ownership in the Company by such persons.
2. Definitions. As used herein, the following terms shall have the
meaning indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(c) "Committee" shall mean the committee appointed by the Board
pursuant to Section 13(a) hereof, or, if such committee is not appointed, the
Board.
(d) "Common Stock" shall mean the Company's Common Stock, par value
$0.01 per share.
(e) "Company" shall mean NETCREATIONS, INC., a New York corporation.
(f) "Director" shall mean a member of the Board.
(g) "Effective Date" shall mean July 22, 1999.
(h) "Fair Market Value" of a Share on any date of reference shall mean
the "Closing Price" (as defined below) of the Common Stock on the business day
immediately preceding the date of reference, unless the Board or the Committee
in its sole discretion shall determine otherwise in a fair and uniform manner.
For the purpose of determining Fair Market Value, the "Closing Price" of the
Common Stock on any business day shall be (i) if the Common Stock is listed or
admitted for trading on any United States national securities exchange, or if
actual transactions are otherwise reported on a consolidated transaction
reporting system, the last reported sale price of Common Stock on such exchange
or reporting system, as reported in any newspaper of general circulation, (ii)
if the Common Stock is quoted on the National Association of Securities Dealers
Automated Quotations System ("NASDAQ"), or any similar system of automated
dissemination of quotations of securities prices in common use, the last
reported sale price of Common Stock on such system or, if sales prices are not
reported, the mean between the closing high bid and low asked quotations for
such day of Common Stock on such system, as reported in any newspaper of general
circulation or (iii) if neither clause (i) or (ii) is applicable, the mean
between the high bid and low asked quotations for the Common Stock as reported
by the National Quotation Bureau, Incorporated if at least two securities
dealers have inserted both bid and asked quotations for Common Stock on at least
five of the ten preceding days.
(i) "Incentive Stock Option" shall mean an incentive stock option as
defined in Section 422 of the Internal Revenue Code.
(j) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(k) "Non-Qualified Stock Option" shall mean an Option that is not an
Incentive Stock Option.
(l) "Officer" shall mean the Company's Chairman of the Board,
President, Chief Executive Officer, principal financial officer, principal
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accounting officer, any vice-president of the Company in charge of a principal
business unit, division or function (such as sales, administration or finance),
any other officer who performs a policy-making function, or any other person who
performs similar policy-making functions for the Company. Officers of
Subsidiaries shall be deemed Officers of the Company if they perform such
policy-making functions for the Company. As used in this paragraph, the phrase
"policy-making function" does not include policy-making functions that are not
significant. If pursuant to Item 401(b) of Regulation S-K (17 C.F.R. ss.
229.401(b)) the Company identifies a person as an "executive officer," the
person so identified shall be deemed an "Officer" even though such person may
not otherwise be an "Officer" pursuant to the foregoing provisions of this
paragraph.
(m) "Option" (when capitalized) shall mean any option granted under
this Plan.
(n) "Option Agreement" means the agreement between the Company and the
Optionee for the grant of an option.
(o) "Optionee" shall mean a person to whom a stock option is granted
under this Plan or any person who succeeds to the rights of such person under
this Plan by reason of the death of such person.
(p) "Outside Director" shall mean a member of the Board who qualifies
as an "outside director" under Section 162(m) of the Internal Revenue Code and
the regulations thereunder and as a "Non-Employee Director" under Rule 16b-3
promulgated under the Securities Exchange Act.
(q) "Plan" shall mean this Stock Option Plan for the Company.
(r) "Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(s) "Share" shall mean a share of Common Stock.
(t) "Subsidiary" shall mean any corporation (other than the Company)
in any unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
3. Shares Available for Option Grants. The Committee or the Board may
grant to Optionees from time to time Options to purchase an aggregate of up to
3,000,000 Shares from the Company's authorized and unissued Shares. If any
Option granted under the Plan shall terminate, expire, or be canceled or
surrendered as to any Shares, new Options may thereafter be granted covering
such Shares.
4. Incentive and Non-Qualified Options.
(a) An Option granted hereunder shall be either an Incentive Stock
Option or a Non-Qualified Stock Option as determined by the Committee or the
Board at the time of grant of such Option and shall clearly state whether it is
an Incentive Stock Option or Non-Qualified Stock Option. All Incentive Stock
Options shall be granted within 10 years from the effective date of this Plan.
Incentive Stock Options may not be granted to any person who is not an employee
of the Company or any Subsidiary.
(b) Options otherwise qualifying as Incentive Stock Options hereunder
will not be treated as Incentive Stock Options to the extent that the aggregate
fair market value (determined at the time the Option is granted) of the Shares,
with respect to which Options meeting the requirements of Section 422(b) of the
Code are exercisable for the first time by any individual during any calendar
year (under all plans of the Company and its parent and subsidiary corporations
as defined in Section 424 of the Code), exceeds $100,000.
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5. Conditions for Grant of Options.
(a) Each Option shall be evidenced by an Option Agreement that may
contain any term deemed necessary or desirable by the Committee or the Board,
provided such terms are not inconsistent with this Plan or any applicable law.
Optionees shall be (i) those persons selected by the Committee or the Board from
the class of all regular employees of, or persons who provide consulting or
other services as independent contractors to, the Company or its Subsidiaries,
including Directors and Officers who are regular employees, and (ii) Directors
who are not employees of the Company or of any Subsidiaries. Any person who
files with the Board or the Committee, in a form satisfactory to the Board or
the Committee, a written waiver of eligibility to receive any Option under this
Plan shall not be eligible to receive any Option under this Plan for the
duration of such waiver.
(b) In granting Options, the Committee or the Board shall take into
consideration the contribution the person has made to the success of the Company
or its Subsidiaries and such other factors as the Committee shall determine. The
Committee or the Board shall also have the authority to consult with and receive
recommendations from officers and other personnel of the Company and its
Subsidiaries with regard to these matters. The Committee or the Board may from
time to time in granting Options under the Plan prescribe such other terms and
conditions concerning such Options as it deems appropriate, including, without
limitation, (i) prescribing the date or dates on which the Option becomes
exercisable, (ii) providing that the Option rights accrue or become exercisable
in installments over a period of years, or upon the attainment of stated goals
or both, or (iii) relating an Option to the continued employment of the Optionee
for a specified period of time, provided that such terms and conditions are not
more favorable to an Optionee than those expressly permitted herein.
(c) The Options granted to employees under this Plan shall be in
addition to regular salaries, pension, life insurance or other benefits related
to their employment with the Company or its Subsidiaries. Neither the Plan nor
any Option granted under the Plan shall confer upon any person any right to
employment or continuance of employment by the Company or its Subsidiaries.
(d) Notwithstanding any other provision of this Plan, an Incentive
Stock Option shall not be granted to any person owning directly or indirectly
(through attribution under Section 424(d) of the Code) at the date of grant,
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company (or of its parent or subsidiary [as defined in Section
424 of the Code] at the date of grant) unless the option price of such Option is
at least 110% of the Fair Market Value of the Shares subject to such Option on
the date the Option is granted, and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is granted.
(e) Notwithstanding any other provision of this Plan, and in addition
to any other requirements of this Plan, the aggregate number of Options granted
to any one Optionee may not exceed 500,000 Shares in any one fiscal year,
subject to adjustment as provided in Section 10 hereof.
6. Option Price. The option price per Share of any Option shall be any
price determined by the Board or the Committee but shall not be less than the
par value per Share; provided, however, that in no event shall the option price
per Share of any Incentive Stock Option be less than the Fair Market Value of
the Shares underlying such Option on the date such Option is granted.
7. Exercise of Options. An Option shall be deemed exercised when (i) the
Company has received written notice of such exercise in accordance with the
terms of the Option, (ii) full payment of the aggregate option price of the
Shares as to which the Option is exercised has been made, and (iii) arrangements
that are satisfactory to the Board or the Committee in its sole discretion have
been made for the Optionee's payment to the Company of the amount, if any, that
is necessary for the Company or Subsidiary employing the Optionee to withhold in
accordance with applicable Federal or state tax withholding requirements. The
consideration to be paid for the Shares to be issued upon exercise of an Option,
as well as the method of payment of the exercise price and of any withholding
and employment taxes applicable thereto, shall be determined by the Committee or
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the Board and may, in the discretion of the Committee or the Board, consist of:
(1) cash, (2) certified or official bank check, (3) money order, (4) Shares that
have been held by the Optionee for at least six (6) months (or such other Shares
as the Company determines will not cause the Company to recognize for a
financial accounting purposes a charge for compensation expense), (5) the
withholding of Shares issuable upon exercise of the Option, (6) pursuant to a
"cashless exercise" procedure, by delivery of a properly executed exercise
notice together with such other documentation, and subject to such guidelines,
as the Board or the Committee shall require to effect an exercise of the Option
and delivery to the Company by a licensed broker acceptable to the Company of
proceeds from the sale of Shares or a margin loan sufficient to pay the exercise
price and any applicable income or employment taxes, or (7) in such other
consideration as the Committee or the Board deems appropriate, or by a
combination of the above. In the case of an Incentive Stock Option, the
permissible methods of payment shall be specified at the time the Option is
granted. The Committee or the Board in its sole discretion may accept a personal
check in full or partial payment of any Shares. If the exercise price is paid in
whole or in part with Shares, or through the withholding of Shares issuable upon
exercise of the Option, the value of the Shares surrendered or withheld shall be
their Fair Market Value on the date the Option is exercised. The Company in its
sole discretion may, on an individual basis or pursuant to a general program
established in connection with this Plan, lend money to an Optionee, guarantee a
loan to an Optionee, or otherwise assist an Optionee to obtain the cash
necessary to exercise all or a portion of an Option granted hereunder or to pay
any tax liability of the Optionee attributable to such exercise. If the exercise
price is paid in whole or part with Optionee's promissory note, such note shall
(i) provide for full recourse to the maker, (ii) be collateralized by the pledge
of the Shares that the Optionee purchases upon exercise of such Option, (iii)
bear interest at the prime rate of the Company's principal lender, and (iv)
contain such other terms as the Board in its sole discretion shall reasonably
require. No Optionee shall be deemed to be a holder of any Shares subject to an
Option unless and until a stock certificate or certificates for such Shares are
issued to such person(s) under the terms of this Plan. No adjustment shall be
made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date such stock certificate is issued, except as expressly provided
in Section 10 hereof.
8. Exercisability of Options. Any Option shall become exercisable in such
amounts, at such intervals and upon such terms as the Committee or the Board
shall provide in such Option, except as otherwise provided in this Section 8.
(a) The expiration date of an Option shall be determined by the Board
or the Committee at the time of grant, but in no event shall an Option be
exercisable after the expiration of 10 years from the date of grant of the
Option.
(b) To the extent provided in any Option, each outstanding Option
shall become immediately fully exercisable in the event of a "Change in Control"
or in the event that the Committee or the Board exercises its discretion to
provide a cancellation notice with respect to the Option pursuant to Section
9(b) hereof. For this purpose, the term "Change in Control" shall mean:
(i) Approval by the shareholders of the Company of a
reorganization, merger, consolidation or other form of corporate
transaction or series of transactions, in each case, with respect to
which persons who were the shareholders of the Company immediately
prior to such reorganization, merger or consolidation or other
transaction do not, immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then
outstanding voting securities, in substantially the same proportions
as their ownership immediately prior to such reorganization, merger,
consolidation or other transaction, or a liquidation or dissolution of
the Company or the sale of all or substantially all of the assets of
the Company (unless such reorganization, merger, consolidation or
other corporate transaction, liquidation, dissolution or sale is
subsequently abandoned); or
(ii) Individuals who, as of the date on which the Option is
granted hereof, constitute the Board (the "Incumbent Board") cease for
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any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to the date on which
the Option was granted whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the
Company, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Securities Exchange Act) shall be, for purposes
of this Agreement, considered as though such person were a member of
the Incumbent Board; or
(iii) The acquisition (other than from the Company) by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act, of more than 30% of either the then
outstanding shares of the Company's Common Stock or the combined
voting power of the Company's then outstanding voting securities
entitled to vote generally in the election of directors (hereinafter
referred to as the ownership of a "Controlling Interest") excluding,
for this purpose, any acquisitions by (1) the Company or its
Subsidiaries, (2) any person, entity or "group" that as of the date on
which the Option is granted owns beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act)
of a Controlling Interest, (3) Rosalind Resnick and/or Ryan Scott
Druckenmiller or their respective affiliates, or (4) any employee
benefit plan of the Company or its Subsidiaries.
(c) The Committee or the Board may in its sole discretion accelerate
the date on which any Option may be exercised and may accelerate the vesting of
any Shares subject to any Option or previously acquired by the exercise of any
Option.
9. Termination of Option Period.
(a) Unless otherwise provided in any Option Agreement, the unexercised
portion of any Option shall automatically and without notice terminate and
become null and void at the time of the earliest to occur of the following:
(i) three months after the date on which the Optionee's employment
with the Company and its Subsidiaries is terminated other than by
reason of (A) Cause, which, solely for purposes of this Plan, shall
mean the termination of the Optionee's employment by reason of the
Optionee's willful misconduct or gross negligence, (B) a mental or
physical disability (within the meaning of Internal Revenue Code
Section 22(e)) of the Optionee as determined by a medical doctor
satisfactory to the Committee, or (C) death of the Optionee;
(ii) immediately upon the termination of the Optionee's employment
with the Company and its Subsidiaries for Cause;
(iii) twelve months after the date on which the Optionee's
employment with the Company and its Subsidiaries is terminated by
reason of a mental or physical disability (within the meaning of
Section 22(e) of the Code) of the Optionee as determined by a medical
doctor satisfactory to the Committee;
(iv) (A) twelve months after the date of termination of the
Optionee's employment with the Company and its Subsidiaries by reason
of death of the Optionee, or, if later, (B) three months after the
date on which the Optionee shall die if such death shall occur during
the one year period specified in Subsection 9(a)(iii) hereof ; or
(v) immediately in the event that the Optionee shall file any
lawsuit or arbitration claim against the Company or any Subsidiary, or
any of their respective officers, directors or shareholders.
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All references herein to the termination of the Optionee's employment shall, in
the case of an Optionee who is not an employee of the Company or a Subsidiary,
refer to the termination of the Optionee's service with the Company or a
Subsidiary.
(b) To the extent not previously exercised, (i) each Option shall
terminate immediately in the event of (1) the liquidation or dissolution of the
Company, or (2) any reorganization, merger, consolidation or other form of
corporate transaction in which the Company does not survive, unless the
successor corporation, or a parent or subsidiary of such successor corporation,
assumes the Option or substitutes an equivalent option or right pursuant to
Section 10(c) hereof, and (ii) the Committee or the Board in its sole discretion
may by written notice ("cancellation notice") cancel, effective upon the
consummation of any corporate transaction described in Subsection 8(b)(i) hereof
in which the Company does survive, any Option that remains unexercised on such
date. The Committee or the Board shall give written notice of any proposed
transaction referred to in this Section 9(b) a reasonable period of time prior
to the closing date for such transaction (which notice may be given either
before or after approval of such transaction), in order that Optionees may have
a reasonable period of time prior to the closing date of such transaction within
which to exercise any Options that then are exercisable (including any Options
that may become exercisable upon the closing date of such transaction). An
Optionee may condition his exercise of any Option upon the consummation of a
transaction referred to in this Section 9(b).
10. Adjustment of Shares.
(a) If at any time while the Plan is in effect or unexercised Options
are outstanding, there shall be any increase or decrease in the number of issued
and outstanding Shares through the declaration of a stock dividend or through
any recapitalization resulting in a stock split-up, combination or exchange of
Shares, then and in such event:
(i) appropriate adjustment shall be made in the maximum number of
Shares available for grant under the Plan, so that the same
percentage of the Company's issued and outstanding Shares shall
continue to be subject to being so optioned; and
(ii) the Board or the Committee may, in its discretion, make any
adjustments it deems appropriate in the number of Shares and the
exercise price per Share thereof then subject to any outstanding
Option, so that the same percentage of the Company's issued and
outstanding Shares shall remain subject to purchase at the same
aggregate exercise price.
(b) Unless otherwise provided in any Option, the Board or the
Committee may change the terms of Options outstanding under this Plan, with
respect to the option price or the number of Shares subject to the Options, or
both, when, in the Board's or the Committee's sole discretion, such adjustments
become appropriate by reason of a corporate transaction described in Subsections
8(b)(i) hereof so as to preserve but not increase benefits under the Plan.
(c) In the event of a proposed sale of all or substantially all of
the Company's assets or any reorganization, merger, consolidation or other form
of corporate transaction in which the Company does not survive, where the
securities of the successor corporation, or its parent company, are issued to
the Company's shareholders, then the successor corporation or a parent of the
successor corporation may, with the consent of the Committee or the Board,
assume each outstanding Option or substitute an equivalent option or right. If
the successor corporation, or its parent, does not cause such an assumption or
substitution to occur, or the Committee or the Board does not consent to such an
assumption or substitution, then each Option shall terminate pursuant to Section
9(b) hereof upon the consummation of sale, merger, consolidation or other
corporate transaction.
(d) Except as otherwise expressly provided herein, the issuance by
the Company of shares of its capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection with
direct sale or upon the exercise of rights or warrants to subscribe therefor, or
upon conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
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thereof shall be made to, the number of or exercise price for Shares then
subject to outstanding Options granted under the Plan.
(e) Without limiting the generality of the foregoing, the existence
of outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
11. Transferability of Options and Shares. No Incentive Stock Option, and
unless the prior written consent of the Committee or the Board is obtained
(which consent may be withheld for any reason) and the transaction does not
violate the requirements of Rule 16b-3 promulgated under the Securities Exchange
Act no Non-Qualified Stock Option, shall be subject to alienation, assignment,
pledge, charge or other transfer other than by the Optionee by will or the laws
of descent and distribution, and any attempt to make any such prohibited
transfer shall be void. Each Option shall be exercisable during the Optionee's
lifetime only by the Optionee, or in the case of a Non-Qualified Stock Option
that has been assigned or transferred with the prior written consent of the
Committee or the Board, only by the permitted assignee.
12. Issuance of Shares.
(a) Notwithstanding any other provision of this Plan, the Company
shall not be obligated to issue any Shares unless it is advised by counsel of
its selection that it may do so without violation of the applicable Federal and
State laws pertaining to the issuance of securities, and may require any stock
so issued to bear a legend, may give its transfer agent instructions, and may
take such other steps, as in its judgment are reasonably required to prevent any
such violation.
(b) As a condition to any sale or issuance of Shares upon exercise of
any Option, the Board or the Committee may require such agreements or
undertakings as the Board or the Committee may deem necessary or advisable to
facilitate compliance with any applicable law or regulation including, but not
limited to, the following:
(i) a representation and warranty by the Optionee to the Company,
at the time any Option is exercised, that he is acquiring the Shares
to be issued to him for investment and not with a view to, or for
sale in connection with, the distribution of any such Shares; and
(ii) a representation, warranty and/or agreement to be bound by
any legends endorsed upon the certificate(s) for such Shares that
are, in the opinion of the Board or the Committee, necessary or
appropriate to facilitate compliance with the provisions of any
securities laws deemed by the Board or the Committee to be applicable
to the issuance and transfer of such Shares.
13. Administration of the Plan.
(a) The Plan shall be administered by the Board or, at the discretion
of the Board, by a committee appointed by the Board (the "Committee") which
shall be composed of two or more Directors. At all times, the membership of the
Committee shall be constituted so as to comply at all times with the then
applicable requirements for Outside Directors of Rule 16b-3 promulgated under
the Securities Exchange Act and Section 162(m) of the Internal Revenue Code. The
Committee shall serve at the pleasure of the Board and shall have the powers
designated herein and such other powers as the Board may from time to time
confer upon it.
(b) The Board may grant Options pursuant to this Plan to any
persons to whom Options may be granted under Section 5(a) hereof.
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(c) The Committee or the Board, from time to time, may adopt rules
and regulations for carrying out the purposes of the Plan. The determinations by
the Board or the Committee and its interpretation and construction of any
provision of the Plan or any Option shall be final and conclusive.
(d) Any and all decisions or determinations of the Board or the
Committee shall be made either (i) by a majority vote of the members of the
Board or the Committee at a meeting or (ii) without a meeting by the unanimous
written approval of the members of the Board or the Committee.
14. Withholding or Deduction for Taxes. If at any time specified herein
for the making of any issuance or delivery of any Option or Common Stock to any
Optionee, any law or regulation of any governmental authority having
jurisdiction in the premises shall require the Company to withhold, or to make
any deduction for, any taxes or take any other action in connection with the
issuance or delivery then to be made, such issuance or delivery shall be
deferred until such withholding or deduction shall have been provided for by the
Optionee or beneficiary, or other appropriate action shall have been taken.
15. Interpretation.
(a) As it is the intent of the Company that the Plan comply in all
respects with Rule 16b-3 promulgated under the Securities Exchange Act ("Rule
16b-3"), any ambiguities or inconsistencies in construction of the Plan shall be
interpreted to give effect to such intention, and if any provision of the Plan
is found not to be in compliance with Rule 16b-3, such provision shall be deemed
null and void to the extent required to permit the Plan to comply with Rule
16b-3. The Committee or the Board may from time to time adopt rules and
regulations under, and amend, the Plan in furtherance of the intent of the
foregoing.
(b) The Plan and any Option agreements entered into pursuant to the
Plan shall be administered and interpreted so that all Incentive Stock Options
granted under the Plan will qualify as Incentive Stock Options under Section 422
of the Code. If any provision of the Plan or any such Option agreement should be
held invalid for the granting of Incentive Stock Options or illegal for any
reason, such determination shall not affect the remaining provisions hereof, but
instead the Plan and the Option agreement shall be construed and enforced as if
such provision had never been included in the Plan or the Option agreement.
(c) This Plan shall be governed by the laws of the State of New York.
(d) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan.
(e) Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.
16. Amendment and Discontinuation of the Plan. The Committee or the Board
may from time to time amend, suspend or terminate the Plan or any Option;
provided, however, that, any amendment to the Plan shall be subject to the
approval of the Company's shareholders if such shareholder approval is required
by any federal or state law or regulation (including, without limitation, Rule
16b-3 or to comply with Section 162(m) of the Internal Revenue Code) or the
rules of any Stock exchange or automated quotation system on which the Common
Stock may then be listed or quoted. Except to the extent provided in Sections 9
and 10 hereof, no amendment, suspension or termination of the Plan or any Option
issued hereunder shall substantially impair the rights or benefits of any
Optionee pursuant to any Option previously granted without the consent of the
Optionee.
17. Effective Date and Termination Date. The effective date of the Plan
is the date on which the Board adopts this Plan, and the Plan shall terminate on
the 10th anniversary of the Effective Date.
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APPENDIX B
NETCREATIONS, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
PURPOSE The NetCreations, Inc. 2000 Employee Stock Purchase
Plan (the "2000 ESPP" or the "Plan") provides
employees of NetCreations, Inc. (the "Company") with
an opportunity to become owners of the Company
through purchasing shares of the Company's common
stock (the "Common Stock"). The Company intends this
Plan to qualify as an employee stock purchase plan
under Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"), and its terms should
be construed accordingly. The Plan is effective as of
July 1, 2000.
ELIGIBILITY An Employee whom the Company employs as of the first
day of a Payroll Deduction Period (and has employed
for such prior waiting period, initially set at 90
days, as the Committee determines) is eligible to
participate in the 2000 ESPP for that Payroll
Deduction Period. However, an Employee may not make a
purchase under the 2000 ESPP if such purchase would
result in the Employee's owning Common Stock
possessing 5% or more of the total combined voting
power or value of the Company's outstanding stock. In
determining an individual's amount of stock
ownership, any options to acquire shares of Company
Common Stock are counted as shares of stock, and the
attribution rules of Section 424(d) of the Code
apply.
Employee means any person employed as a common law
employee of the Company. Employee excludes anyone
who, with respect to any particular period of time,
was not treated initially on the payroll records as a
common law employee, unless the Committee determines
that including the person is necessary to preserve
tax treatment.
ADMINISTRATOR The Compensation Committee of the Board of Directors
(the "Board") of the Company, or such other committee
as the Board designates (the "Committee"), will
administer the 2000 ESPP. The Committee is vested
with full authority and discretion to make,
administer, and interpret such rules and regulations
as it deems necessary to administer the 2000 ESPP
(including rules and regulations deemed necessary in
order to comply with the requirements of Section 423
of the Code). Any determination or action of the
Committee in connection with administering or
interpreting the 2000 ESPP will be final and binding
upon each Employee, Participant, and all persons
claiming under or through any Employee or
Participant.
Without shareholder consent and without regard to
whether the actions might adversely affect
Participants, the Committee (or the Board) may
establish and change the Payroll Deduction
Periods,
limit or increase the frequency and/or number of
changes in the amounts withheld during a Payroll
Deduction Period, establish the exchange ratio
applicable to amounts withheld in a currency other
than U.S. dollars,
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lengthen or shorten the waiting period before an
Employee becomes eligible to participate, so long
as the change applies uniformly,
permit payroll withholding in excess of the amount
the Participant designated to adjust for delays or
mistakes in the Company's processing of properly
completed withholding elections,
establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures
to ensure that amounts applied toward the purchase
of Common Stock for each Participant properly
correspond with amounts withheld from the
Participant's Compensation,
delegate its functions (other than those with
respect to setting Payroll Deduction Periods or
determining the price of stock and the number of
shares to be offered under the Plan) to officers
or employees of the Company; and
establish such other limitations or procedures as
it determines in its sole discretion advisable and
consistent with the Plan.
The Committee may also increase the price provided in
Step 2 under GRANTING OF OPTIONS (by decreasing the
discount and/or by designating that the price is
determined as of either the beginning or the ending
date of a Payroll Deduction Period or the higher of
both rather than as of the lower) for Payroll
Deduction Periods beginning after Committee action.
PAYROLL DEDUCTION PERIOD Payroll Deduction Periods are the
periods during which the Company collects payroll
deductions for a particular purchase. Unless the
Committee specifies otherwise, the Payroll Deduction
Periods will be successive calendar quarters
beginning January 1, April 1, July 1, and October 1,
beginning when the Committee determines they should
begin.
PARTICIPATION An eligible Employee may become a "Participant" for a
Payroll Deduction Period by completing an
authorization notice and delivering it to the
Committee through the Company's Human Resources
professionals within a reasonable period of time
before the first day of such Payroll Deduction
Period. All Participants receiving options under the
2000 ESPP will have the same rights and privileges.
METHOD OF PAYMENT A Participant may contribute to the 2000 ESPP solely
through payroll deductions as follows:
The Participant must elect on an authorization notice
or other required documentation to have deductions
made from his Compensation for each payroll period
during the Payroll Deduction Period at or above a
minimum rate and under terms the Committee
determines. Compensation under the Plan means an
Employee's regular compensation, including overtime,
bonuses, and commissions (but expressly excluding
income from stock options or other noncash
compensation), from the Companypaid during a Payroll
Deduction Period.
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All payroll deductions will be credited to the
Participant's account under the 2000 ESPP. No
interest will accrue on the account.
Payroll deductions will begin on the first payday
coinciding with or following the first day of each
Payroll Deduction Period and will end with the last
payday preceding or coinciding with the end of that
Payroll Deduction Period, unless the Participant
sooner withdraws as authorized under WITHDRAWALS
below.
A Participant may not alter the rate of payroll
deductions during the Payroll Deduction Period.
The Company may use the consideration it receives for
general corporate purposes.
GRANTING OF OPTIONS On the first day of each Payroll Deduction
Period, a Participant will receive options to
purchase a number of shares of Common Stock with
funds withheld from his or her Compensation. Such
number of shares will be determined at the end of the
Payroll Deduction Period according to the following
procedure:
STEP 1 -- Determine the amount the Company
withheld from Compensation since the beginning of
the Payroll Deduction Period;
STEP 2 -- Determine the "Purchase Price" to be the
amount that represents 85% of the lower of the
Fair Market Value of a share of Common Stock on
the first day of the Payroll Deduction Period and
the last day of the Payroll Deduction Period
(provided that the Committee can increase the
price before a Payroll Deduction Period begins);
and
STEP 3 -- Divide the amount determined in Step 1
by the amount determined in Step 2.
The Committee will determine the treatment of any
fractional shares from among the following:
The results of Step 3 will be used to purchase
whole and fractional shares,
Any amounts in Step 3 not used to purchase whole
shares will be refunded to the Participant,
Any amounts in Step 3 not used to purchase whole
shares will be carried forward to the next Payment
Deduction Period, or Such other treatment as the
Committee approves.
FAIR MARKET VALUE The Fair Market Value of a share of Common Stock for
purposes of the Plan as of each date described in
Step 2 will be determined as follows:
if the Company has no publicly-traded stock, the
Committee will determine the Fair Market Value for
purposes of the Plan using any measure of value it
determines in good faith to be appropriate;
if the Common Stock trades on a national
securities exchange, the closing sale price on
that date;
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if the Common Stock does not trade on any such
exchange, the closing sale price as reported by
the National Association of Securities Dealers,
Inc. Automated Quotation System ("Nasdaq") for
such date;
if no such closing sale price information is
available, the average of the closing bid and
asked prices that Nasdaq reports for such date; or
if there are no such closing bid and asked prices,
the average of the closing bid and asked prices as
reported by any other commercial service for such
date.
For January 1 and any other date described in Step 2
that is not a trading day, the Fair Market Value of a
share of Common Stock for such date shall be
determined by using the closing sale price or the
average of the closing bid and asked prices, as
appropriate, for the immediately following trading
day when determining the price for the first day of
the Payroll Deduction Period and the immediately
preceding trading day when determining the price on
the last day. The Committee can substitute a
particular time of day or other measure of "closing
sale price" if appropriate because of changes in
exchange or market procedures.
The Committee has sole discretion to determine the
Fair Market Value for purposes of this Plan, and all
participation is conditioned on the participant's
agreement that the Committee's determination is
conclusive and binding even though others might make
a different and also reasonable determination.
No Participant shall receive options:
if, immediately after the grant, that Participant
would own shares, or hold outstanding options to
purchase shares, or both, possessing 5% or more of
the total combined voting power or value of all
classes of shares of the Company or any
Subsidiaries (as defined below); or
that permit the Participant to purchase shares
under all employee stock purchase plans of the
Company and any Subsidiary with a Fair Market
Value (determined at the time the options are
granted) that exceeds $25,000 in any calendar
year.
EXERCISE OF OPTION Unless a Participant effects a timely withdrawal
under the WITHDRAWAL paragraph below, his option for
the purchase of shares of Common Stock during a
Payroll Deduction Period will be automatically
exercised as of the last day of the Payroll Deduction
Period for the purchase of the maximum number of
shares (including, if the Committee so provides,
fractional shares) that the sum of the payroll
deductions credited to the Participant's account
during such Payroll
Deduction Period can purchase under the formula
specified in GRANTING OF OPTIONS.
DELIVERY OF COMMON STOCK As soon as administratively feasible after the
options are used to purchase Common Stock, the
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Company will credit to each Participant or, in the
alternative, to an agent or custodian that the
Committee designates, the shares of Common Stock the
Participant purchased upon the exercise of the
option. If delivered to an agent or custodian, the
agent or custodian may hold the shares in nominee
name and may commingle shares held in its custody in
a single account or stock certificate without
identification as to individual Participants. Unless
the Committee determines otherwise, Participants who
are holding shares and any persons to whom they
transfer part or all of their shares other than by
sale must retain those shares with a Company
specified broker or agent until the second
anniversary of the first day of the Payroll Deduction
Period in which they bought the shares. Unless the
Committee determines otherwise, a Participant may
sell the shares despite the foregoing restriction but
may not transfer them to another broker until the
foregoing two year period (the "Account Restriction
Period") ends. The Committee may require that the
specified agent or custodian hold the shares of
Common Stock for a minimum period of time after
receipt (including through and beyond the
Participant's active employment) and reinvest any
dividends received in additional shares of Common
Stock. The Committee may, in its discretion,
establish a program for cashless sales of Common
Stock received under the 2000 ESPP.
SUBSEQUENT OFFERINGS A Participant will be deemed to have elected to
participate in each subsequent Payroll Deduction
Period following his initial election to participate
in the 2000 ESPP, unless the Participant files a
written withdrawal notice with the Human Resources
Department at corporate headquarters (or such other
recipient as the Department designates) at least 10
days before the beginning of the Payroll Deduction
Period as of which the Participant desires to
withdraw from the 2000 ESPP.
WITHDRAWAL FROM THE PLAN A Participant may withdraw all, but not less than
all, payroll deductions credited to his account for a
Payroll Deduction Period before the end of such
Payroll Deduction Period by delivering a written
notice to the Human Resources Department or its
designee on behalf of the Committee at least 30 days
before the end of such Payroll Deduction Period (or
by such other deadline as the Committee determines).
A Participant who for any reason, including
retirement, termination of employment, or death,
ceases to be an Employee before the last day of any
Payroll Deduction Period will be deemed to have
withdrawn from the 2000 ESPP as of the date of such
cessation, unless the Committee establishes other
procedures.
When a Participant withdraws from the 2000 ESPP, his
or her outstanding options under the 2000 ESPP will
immediately terminate.
Unless the Committee determines otherwise, if a
Participant withdraws from the 2000 ESPP for any
reason, the Company will pay to the Participant all
payroll deductions credited to his account or, in the
event of death, to the persons designated as provided
in Designation of Beneficiary, as soon as
administratively feasible after the date of such
withdrawal and no further deductions will be made
from the Participant's Compensation.
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A Participant who has elected to withdraw from the
2000 ESPP may resume participation in the same manner
and under the same rules as any Employee making an
initial election to participate in the 2000 ESPP
(i.e., he may elect to participate in the next
following Payroll Deduction Period so long as he or
she files the authorization form by the deadline for
that Payroll Deduction Period). Any Participant who
is subject to Section 16 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and who
withdraws from the 2000 ESPP for any reason will only
be permitted toresume participation in a manner that
will permit transactions under the 2000 ESPP to
continue to be exempt within the meaning of Rule
16b-3, as issued under the Exchange Act.
STOCK SUBJECT TO PLAN The shares of Common Stock that the Company will sell
to Participants under the 2000 ESPP will be shares of
authorized but unissued Common Stock, shares held as
treasury stock, and shares purchased on the market.
The maximum number of shares made available for sale
under the 2000 ESPP will be 1,000,000, increased
beginning December 31, 2001 and each succeeding
December 31 by 200,000 shares (with both numbers
subject to the provisions in ADJUSTMENTS UPON CHANGES
IN CAPITAL STOCK below). If the total number of
shares for which options are to be exercised in a
Payroll Deduction Period exceeds the number of shares
then available under the 2000 ESPP, the Company will
make, so far as is practicable, a pro rata allocation
of the shares available.
A Participant will have no interest in shares covered
by his participation until the last day of the
applicable Payroll Deduction Period.
After the end of the Account Restriction Period,
shares that a Participant purchases under the ESPP
will be registered in the name of the Participant or,
at the Participant's election, in street name.
ADJUSTMENTS UPON CHANGES STOCK Subject to any required action by the Company
IN CAPITAL (which it will promptly take) or its shareholders,
and subject to the provisions of applicable corporate
law, if, during a Payroll Deduction Period,
the outstanding shares of Common Stock increase or
decrease or change into or are exchanged for a
different number or kind of security because of
any recapitalization, reclassification, stock
split, reverse stock split, combination of shares,
exchange of shares, stock dividend, or other
distribution payable in capital stock, or
some other increase or decrease in such Common
Stock occurs without the Company's receiving
consideration (excluding, unless the Committee
determines otherwise, stock repurchases),
the Committee must make a proportionate and
appropriate adjustment in the number of shares of
Common Stock underlying the options, so that the
proportionate interest of the Participant immediately
following such event will, to the extent practicable,
be the same as immediately
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before such event. Any such adjustment to the options
will not change the total price with respect to
shares of Common Stock underlying the Participant's
election but will include a corresponding
proportionate adjustment in the price of the Common
Stock, to the extent consistent with Section 424 of
the Code.
The Board or the Committee may take any actions
described in the ADJUSTMENTS UPON CHANGES IN CAPITAL
STOCK section without any requirement to seek
optionee consent.
The Committee will make a commensurate change to the
maximum number and kind of shares provided in the
STOCK SUBJECT TO PLAN section.
Any issue by the Company of any class of preferred
stock, or securities convertible into shares of
common or preferred stock of any class, will not
affect, and no adjustment by reason thereof will be
made with respect to, the number of shares of Common
Stock subject to any options or the price to be paid
for stock except as this ADJUSTMENTS section
specifically provides. The grant of an option under
the Plan will not affect in any way the right or
power of the Company to make adjustments,
reclassifications, reorganizations or changes of its
capital or business structure, or to merge or to
consolidate, or to dissolve, liquidate, sell, or
transfer all or any part of its business or assets.
SUBSTANTIAL CORPORATE Upon a Substantial Corporate Change, the Plan and the
CHANGE offering will TERMINATE and all accumulated funds
will be distributed as though the Participants had
elected to withdraw unless either (i) such
termination would prevent use of "pooling of
interest" accounting for a reorganization, merger, or
consolidation of the Company that the Board approves
or (ii) unless provision is made in writing in
connection with such transaction for
the assumption or continuation of outstanding
elections, or
the substitution for such options or grants of any
options covering the stock or securities of a
successor employer corporation, or a parent or
subsidiary of such successor, with appropriate
adjustments as to the number and kind of shares of
stock and prices, in which event the options will
continue in the manner and under the terms so
provided.
A Substantial Corporate Change means the
sale of all or substantially all of the assets of
the Company to one or more individuals, entities,
or groups (other than an "Excluded Owner" as
defined below),
complete or substantially complete dissolution or
liquidation of the Company;
a person, entity, or group (other than an Excluded
Owner) acquires or attains ownership of 100% of
the undiluted total voting power of the Company's
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then-outstanding securities eligible to vote to
elect members of the Board ("Company Voting
Securities");
completion of a merger or consolidation of the
Company with or into any other entity (other than
an Excluded Owner) unless the holders of the
Company Voting Securities outstanding immediately
before such completion, together with any trustee
or other fiduciary holding securities under a
Company benefit plan, retain control because they
hold securities that represent immediately after
such merger or consolidation more than 20% of the
combined voting power of the then outstanding
voting securities of either the Company or the
other surviving entity or its ultimate parent, or
any other transaction (including a merger or
reorganization in which the Company survives)
approved by the Board that results in any person
or entity (other than an Excluded Owner) owning
100% of Company Voting Securities.
An "Excluded Owner" consists of the Company, any
Company Subsidiary, any Company benefit plan, or any
underwriter temporarily holding securities for an
offering of such securities.
DESIGNATION OF A Participant may file with the Committee a written
BENEFICIARY designation of a beneficiary who is to receive any
payroll deductions credited to the Participant's
account under the 2000 ESPP or any shares of Common
Stock owed to the Participant under the 2000 ESPP if
the Participant dies. A Participant may change a
beneficiary at any time by filing a notice in writing
with the Human Resources professionals on behalf of
the Committee.
Upon the death of a Participant and upon receipt by
the Committee of proof of the identity and existence
of the Participant's designated beneficiary, the
Company will deliver such cash or shares, or both, to
the beneficiary. If a Participant dies and is not
survived by a beneficiary that the Participant
designated in accordance with the immediate preceding
paragraph, the Company will deliver such cash or
shares, or both, to the personal representative of
the estate of the deceased Participant. If, to the
knowledge of the Committee, no personal
representative has been appointed within 90 days
following the date of the Participant's death, the
Committee, in its discretion, may direct the Company
to deliver such cash or shares, or both, to the
surviving spouse of the deceased Participant, or to
any one or more dependents or relatives of the
deceased Participant, or if no spouse, dependent, or
relative is known to the Committee, then to such
other person as the Committee may designate.
No designated beneficiary may acquire any interest in
such cash or shares before the death of the
Participant.
TRANSFERS, ASSIGNMENTS, A Participant may not assign, pledge, or otherwise
AND PLEDGES dispose of payroll deductions credited to the
Participant's account or any rights to exercise an
option or to receive shares of Common Stock under the
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2000 ESPP other than by will or the laws of descent
and distribution or under a qualified domestic
relations order, as defined in the Employee
Retirement Income Security Act. Any other attempted
assignment, pledge or other disposition will be
without effect, except that the Company may treat
such act as an election to withdraw under the
WITHDRAWAL section.
AMENDMENT OR TERMINATION The Board of Directors of the Company or the
OF PLAN Committee may at any time terminate or amend the 2000
ESPP. Any amendment of the 2000 ESPP that (i)
materially increases the benefits to Participants,
(ii) materially increases the number of securities
that may be issued under the 2000 ESPP, or (iii)
materially modifies the eligibility requirements for
participation in the 2000 ESPP must be approved by
the shareholders of the Company to take effect. The
Company will refund to each Participant the amount of
payroll deductions credited to his account as of the
date of termination as soon as administratively
feasible following the effective date of the
termination.
EFFECT ON OTHER PLANS Whether exercising or receiving an option causes the
participant to accrue or receive additional benefits
under any pension or other plan is governed solely by
the terms of such other plan.
NOTICES All notices or other communications by a Participant
to the Committee or the Company shall be deemed to
have been duly given when the Human Resources
Department or local Human Resources professionals of
the Company receive them or when any other person or
entity the Company designates receives the notice or
other communication in the form the Company
specifies.
GENERAL ASSETS Any amounts the Company invests or otherwise sets
aside or segregates to satisfy its obligations under
this 2000 ESPP will be solely the Company's property
(except as otherwise required by Federal or state
wage laws), and the optionee's claim against the
Company under the 2000 ESPP, if any, will be only as
a general creditor. The optionee will have no right,
title, or interest whatever in or to any investments
that the Company may make to aid it in meeting its
obligations under the 2000 ESPP. Nothing contained in
the 2000 ESPP, and no action taken under its
provisions, will create or be construed to create an
implied or constructive trust of any kind or a
fiduciary relationship between the Company and any
Employee, Participant, former Employee, former
Participant, or any beneficiary.
PRIVILEGES OF STOCK No Participant and no beneficiary or other person
OWNERSHIP claiming under or through such Participant will have
any right, title, or interest in or to any shares of
Common Stock allocated or reserved under the Plan
except as to such shares of Common Stock, if any,
that have been issued to such Participant.
TAX WITHHOLDING To the extent that a Participant realizes ordinary
income or wages for employment tax purposes in
connection with a sale or other transfer of any
shares of Common Stock purchased under the Plan or
the crediting of interest to an account, the Company
may withhold amounts needed to cover such taxes from
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<PAGE>
any payments otherwise due to the Participant. Any
Participant who sells or otherwise transfers shares
purchased under the Plan within two years after the
beginning of the Payroll Deduction Period in which he
purchased the shares must, within 30 days of such
transfer, notify the Company's Payroll Department in
writing of such transfer. Each Participant, as a
condition of participation, agrees that the Company
may treat the purchase of shares and/or their
disposition as taxable events requiring the
withholding or other collection of income and
employment taxes and further agrees to pay any such
taxes for which the Company cannot reasonably
withhold.
LIMITATIONS ON LIABILITY Notwithstanding any other provisions of the 2000
ESPP, no individual acting as a director, employee,
or agent of the Company shall be liable to any
Employee, Participant, former Employee, former
Participant, or any spouse or beneficiary for any
claim, loss, liability, or expense incurred in
connection with the 2000 ESPP, nor shall such
individual be personally liable because of any
contract or other instrument he executes in such
other capacity. The Company will indemnify and hold
harmless each director, employee, or agent of the
Company to whom any duty or power relating to the
administration or interpretation of the 2000 ESPP has
been or will be delegated, against any cost or
expense (including attorneys' fees) or liability
(including any sum paid in settlement of a claim with
the Board's approval) arising out of any act or
omission to act concerning this 2000 ESPP unless
arising out of such person's own fraud or bad faith.
NO EMPLOYMENT CONTRACT Nothing contained in this Plan constitutes an
employment contract between the Company and any
Employee. The 2000 ESPP does not give an Employee any
right to be retained in the Company's employ, nor
does it enlarge or diminish the Company's right to
terminate the Employee's employment.
DURATION OF ESPP Unless the Company's Board extends the Plan's term,
no Payroll Deduction Period will end after March 16,
2010.
APPLICABLE LAW The laws of the State of Delaware (other than its
choice of law provisions) govern the 2000 ESPP and
its interpretation.
LEGAL COMPLIANCE The Company will not issue any shares of Common Stock
under the Plan until the issuance satisfies all
applicable requirements imposed by Federal and state
securities and other laws, rules, and regulations,
and by any applicable regulatory agencies or stock
exchanges. To that end, the Company may require the
optionee to take any reasonable action to comply with
such requirements before issuing such shares. No
provision in the Plan or action taken under it
authorizes any action that Federal or state laws
otherwise prohibit.
The Plan is intended to conform to the extent
necessary with all provisions of the Securities Act
of 1933, as amended, ("Securities Act") and the
Securities Exchange Act of 1934, as amended, and all
regulations and rules the Securities and Exchange
Commission issues under those laws, including
specifically Rule 16b-3. Notwithstanding anything in
the Plan to the contrary, the Committee and the Board
must administer the Plan, and Participants may
purchase Common Stock, only in a way that conforms to
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10
<PAGE>
such laws, rules, and regulations. To the extent
applicable law permits, the Plan and any offers will
be deemed amended to the extent necessary to conform
to such laws, rules, and regulations.
APPROVAL OF SHAREHOLDERS The ESPP must be submitted to the shareholders of the
Company for their approval within 12 months after the
Board adopts the ESPP. The adoption of the ESPP is
conditioned upon the approval of the shareholders of
the Company, and failure to receive their approval
will render the ESPP and any outstanding options
thereunder void and of no effect.
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<PAGE>
EXHIBIT C
AUDIT COMMITTEE CHARTER
Organization
There shall be a committee of the Board of Directors to be known as the
Audit Committee. The Audit Committee shall be comprised of at least three
directors who are independent of management and NetCreations, Inc. (the
"Company"). Members of the Audit Committee shall be considered independent if
they have no relationship to the Company that may interfere with the exercise of
their independence from the management and the Company. All Audit Committee
members will be financially literate, and at least one member will have
accounting or related management expertise.
Statement of Policy
The Audit Committee shall provide assistance to the directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the Company, and the quality and integrity of financial reports of the Company.
In so doing, it is the responsibility of the Audit Committee to maintain free
and open communication between the directors, the independent auditors and the
financial management of the Company.
Responsibilities
In carrying out its responsibilities, the Audit Committee believes its policies
and procedures should remain flexible, in order to best react to changing
conditions and to ensure to the directors and shareholders that the corporate
accounting and reporting practices of the Company are in accordance with all
requirements and are of the highest quality.
In carrying out these responsibilities, the Audit Committee will:
o Obtain the full Board of Directors' approval of this Charter and review and
reassess this Charter as conditions dictate (at least annually).
o Review and recommend to the directors the independent auditors to be
selected to audit the financial statements of the Company and its divisions
and subsidiaries.
o Have a clear understanding with the independent auditors that they are
ultimately accountable to the Audit Committee and the Board of Directors, as
the shareholders' representatives, who have the ultimate authority in deciding
to engage, evaluate, and if appropriate, terminate their services.
o Meet with the independent auditors and financial management of the Company
to review the scope of the proposed audit and timely quarterly reviews for the
current year and the procedures to be utilized, the adequacy of the
independent auditor's compensation, and at the conclusion thereof review such
audit or review, including any comments or recommendations of the independent
auditors.
o Review with the independent auditors and financial and accounting
personnel, the adequacy and effectiveness of the accounting and financial
controls of the Company, and elicit any recommendations for the improvement of
such internal controls or particular areas where new or more detailed controls
or procedures are desirable. Review reports received from regulators and other
legal and regulatory matters that may have a material effect on the financial
statements or related company compliance policies.
o Inquire of management and the independent auditors about significant risks
or exposures and assess the steps management has taken to minimize such risks
to the Company.
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<PAGE>
o Review the quarterly financial statements with financial management and the
independent auditors prior to the filing of the Form 10-Q (or prior to the
press release of results, if possible) to determine that the independent
auditors do not take exception to the disclosure and content of the financial
statements, and discuss any other matters required to be communicated to the
committee by the auditors. The chair of the Committee may represent the entire
Committee for purposes of this review.
o Review the financial statements to be contained in the annual report to
shareholders with management and the independent auditors to determine that
the independent auditors are satisfied with the disclosure and content of the
financial statements to be presented to the shareholders. Review with
financial management and the independent auditors the results of their timely
analysis of significant financial reporting issues and practices, including
changes in, or adoptions of, accounting principles and the auditors. Also
review with financial management and the independent auditors their judgments
about the quality, not just acceptability, of accounting principles and the
clarity of the financial disclosure practices used or proposed to be used, and
particularly, the degree of aggressiveness or conservatism of the
organization's accounting principles and underlying estimates, and other
significant decisions made in preparing the financial statements.
o Provide sufficient opportunity for the independent auditors and the
internal auditor, if any, to meet with the members of the Audit Committee
without members of management present. Among the items to be discussed in
these meetings are the independent auditors' evaluation of the company's
financial, accounting, and internal auditing personnel, if any, and the
cooperation that the independent auditors received during the course of audit.
o Review accounting and financial human resources and succession planning
within the Company.
o Report the results of the annual audit to the Board of Directors. If
requested by the Board, invite the independent auditors to attend the full
Board of Directors meeting to assist in reporting the results of the annual
audit or to answer other directors' questions (alternatively, the other
directors, particularly the other independent directors, may be invited to
attend the Audit Committee meeting during which the results of the annual
audit are reviewed.
o On an annual basis, obtain from the independent auditors a written
communication delineating all their relationships and professionals services
as required by Independence Standards Board Standard No. 1, Independent
Discussions with Audit Committees. In addition, review with the independent
auditors the nature and scope of any disclosed relationships or professional
services and take, or recommend that the Board of Directors take, appropriate
action to ensure the continuing independence of the auditors.
o Prepare a report of the Audit Committee to be included in the Company's
proxy statement for its annual meeting of shareholders, disclosing whether (1)
the Committee had reviewed and discussed with management and the independent
auditors, as well as discussed within the Committee (without management or the
independent auditors present), the financial statements and the quality of
accounting principles and significant judgments affecting the financial
statements; (2) the Committee discussed with the auditors the independence of
the auditors; and (3) based upon the Committee's review and discussions with
management and the independent auditors, the Committee had recommended to the
Board of Directors that the audited financials be included in the Company's
annual report on Form 10-K.
o Include a copy of this Charter in the annual report to shareholders or the
proxy statement (effective for year ending December 31, 2000) at least
triennially or the year after any significant amendment to the Charter.
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o Submit the minutes of all meetings of the Audit Committee to, or discuss
the matters discussed at each Committee meeting with, the Board of Directors.
o Investigate any matter brought to its attention within its duties, with the
power to retain outside counsel for this purpose if, in its judgment, that is
appropriate.
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NETCREATIONS, INC
379 WEST BROADWAY, SUIT 202
NEW YORK, NEW YORK 10012
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Rosalind B. Resnick and Ryan Scott
Drunkenmiller, or any of them, with full power of substitution and revocation,
proxies to vote all shares of the common stock of NETCREATIONS, INC. which the
undersigned would be entitled to vote if personally present at the at the Annual
Meeting of Shareholders of our company to be held on June 22, 2000, and at any
adjournment thereof, upon all subjects that may properly come before the
meeting. IF SPECIFIC DIRECTIONS ARE NOT GIVEN WITH RESPECT TO THE PROPOSALS OR
ANY OTHER MATTERS TO BE ACTED UPON AT THE ANNUAL MEETING AND THIS PROXY CARD IS
SIGNED AND RETURNED, THE PROXIES WILL VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS (I.E., FOR THE PROPOSALS) AND ON ANY OTHER MATTER
THAT MAY PROPERLY COME BEFORE THE MEETING.
(Continued and to be signed on reverse side)
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Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Shareholders
NETCREATIONS, INC.
June 22, 2000
<TABLE>
<CAPTION>
Please Detach and Mail in the Envelope Provided
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A [X] Please mark your
vote as in this
example.
WITHHOLD
FOR AUTHORITY
all nominees to vote for all nominees Nominees:
1. Election of listed at right listed at right. Rosalind B. Resnick
Directors: [ ] [ ] Ryan Scott Drunkenmiller
Mitchell York
INSTRUCTION: To withhold authority to vote for any nominee(s), Michael Levy
write that nominee's name in the space provided: Gregory W. Slayton
FOR AGAINST ABSTAIN
2. The approval of the amendments to our [ ] [ ] [ ]
1999 Stock Option Plan:
3. The approval of our 2000 Employee [ ] [ ] [ ]
Stock Purchase Plan:
4. Ratification of selection of Grant [ ] [ ] [ ]
Thornton, LLP as our independent
auditors for the fiscal year ending
December 31, 2000:
Votes MUST be indicated by placing an "X" in one of the above boxes using
black or blue ink.
This proxy is solicited on behalf of the Board of Directors of NETCREATIONS,
INC., for the Annual Meeting of Shareholders to be held on June 22, 2000. The
Board of Directors recommends a vote "FOR" the proposals above.
Check this box if you have either a change of address or comments, and please
note the same on this proxy card. [ ]
Signature(s)_________________________________________________________________________________________ Date____________
Note: Please date and sign exactly as your name or names appear on this proxy card. If the shares are held jointly, each Shareholder
should trustee, administrator, custodian, guardian, corporate officer, or pursuant to a power of attorney, please so indicate
above.
</TABLE>
