<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
HYPERFEED TECHNOLOGIES, INC.
----------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
----------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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<PAGE>
[LOGO]
HYPERFEED TECHNOLOGIES, INC.
300 SOUTH WACKER DRIVE, SUITE 300
CHICAGO, ILLINOIS 60606
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD ON
MAY 17, 2000
- ---------------------
TO THE STOCKHOLDERS OF
HYPERFEED TECHNOLOGIES,INC.
Our annual meeting of stockholders will be held at 3:00 p.m. on Wednesday
May 17, 2000, at 225 West Wacker Drive, 30th Floor, Chicago, Illinois, for the
following purposes:
1. To elect seven members to our Board of Directors.
2. To approve an amendment to the 1999 Combined Incentive and Non-Statutory
Stock Option Plan to increase the number of shares under the plan from 4,000,000
shares to 5,000,000 shares.
3. To approve and ratify the appointment of KPMG LLP as our independent auditors
for 2000.
4. To transact such other business as may properly come before the meeting or
any adjournment or postponement.
Only holders of record of our common stock and our Series A and Series B
preferred stock at the close of business on March 29, 2000, will be entitled to
notice of, and to vote at, our annual meeting or any adjournment or postponement
thereof. A list of stockholders entitled to vote will be kept at HyperFeed
Technologies at 300 South Wacker Drive, Chicago, Illinois 60606, for ten days
before the meeting.
By order of the Board of Directors
JOHN E. JUSKA
[SIGNATURE]
CHIEF FINANCIAL OFFICER AND
CORPORATE SECRETARY
Chicago, Illinois
April 17, 2000
<PAGE>
[LOGO]
HYPERFEED TECHNOLOGIES, INC.
300 SOUTH WACKER DRIVE, SUITE 300
CHICAGO, ILLINOIS 60606
- ------------------------------------------------------
PROXY STATEMENT
The enclosed proxy is solicited on behalf of our Board of Directors (the
"Board") for use at the annual meeting of our stockholders, to be held at 3:00
p.m. on Wednesday, May 17, 2000, at 225 West Wacker Drive, 30th Floor, Chicago,
Illinois. In addition to solicitation of proxies by mail, proxies may be
solicited by our directors, officers and regular employees by personal
interview, telephone or telegram, and we will request brokers and other
fiduciaries to forward proxy soliciting material to the beneficial owners of
shares which are held of record by them. We will pay the expense of all such
solicitation, including printing and mailing. We have employed the services of
Regan & Associates to assist in the solicitation of proxies from our
stockholders for a fee of $8,000.00, plus reasonable out-of-pocket expenses. Any
proxy may be revoked at any time before its exercise, by written notice to our
Secretary or by attending the meeting and electing to vote in person. This Proxy
Statement and the accompanying proxy were initially mailed to stockholders on or
about April 17, 2000.
Only holders of record of our common stock, our Series A preferred stock or our
Series B preferred stock at the close of business on March 29, 2000, will be
entitled to vote at the meeting or any adjournment or postponement thereof. As
of March 29, 2000, 15,621,618 shares of our common stock, 19,075 shares of our
Series A preferred stock and 28,791 shares of our Series B preferred stock were
outstanding. All of our Series A preferred stock is held of record by Physicians
Insurance Company of Ohio, and all of our Series B preferred stock is held of
record by PICO Holdings, Inc.
Each share of our common stock that you own entitles you to one vote. Each share
of our Series A and our Series B preferred stock is entitled to the number of
votes equal to the number of shares of our common stock into which the shares of
Series A and Series B preferred stock could be converted on the record date.
Each share of our Series A and Series B preferred stock has one hundred votes as
of the record date. Holders of shares of our voting stock are not entitled to
cumulate their votes in the election of directors. A majority of the outstanding
shares of our voting stock, represented in person or by proxy, shall constitute
a quorum at the meeting.
The directors nominated shall be elected by a plurality of the votes represented
by the shares of our common stock and our Series A and Series B preferred stock
present at the meeting in person or by proxy, voting as a single class. This
means that the director nominees with the most affirmative votes are elected to
fill the available seats. Only the number of votes "FOR" affect the outcome.
Withheld
1
<PAGE>
votes and abstentions have no effect on the outcome. Approval of proposals 2 and
3 described on the proxy requires the affirmative vote of a majority of our
outstanding common stock and our outstanding Series A and Series B preferred
stock, voting as a single class.
In determining whether a quorum exists at the meeting for purposes of all
matters to be voted on, all votes "for" or "against," as well as all abstentions
(including votes to withhold authority to vote in certain cases), with respect
to the proposal receiving the most such votes, will be counted. Abstentions with
respect to a particular proposal will be counted as part of the base number of
votes to be used in determining if that particular proposal has received the
requisite percentage of base votes for approval, while broker non-votes will not
be counted in such base for such proposal. Thus, an abstention will have the
same effect as a vote "against" such proposal while a broker non-vote will have
no effect.
ELECTION OF DIRECTORS
On February 10, 2000, the Board elected John L. Borling as a director. On July
17, 1997, the Board voted to expand the Board to a range of between two (2) and
seven (7) members.
A board of seven (7) directors will be elected to serve until the next annual
meeting, or until their successors are elected and shall have qualified. All of
such directors shall be elected by the holders of shares of our common stock and
holders of our Series A and Series B preferred stock. The proxies returned
pursuant to this solicitation will be voted by the persons named therein for the
election as directors of the persons named below, which persons constitute the
Board's nominees for election of directors. If any nominee is unable to accept
the office of director (which is not presently anticipated), the persons named
in the proxies will vote for the election of such other persons as they shall
determine.
<TABLE>
<CAPTION>
Director
Name, Age, and Principal Occupation Since
- ----------------------------------- --------
<S> <C>
Jim R. Porter, 59 .......................................... 1997
Chairman of the Board of HyperFeed Technologies since
October 1997 and Chief Executive Officer since July 1997.
President and Chief Executive Officer of New Century
Investment Research & Management, Inc. since 1993.
Associate of Chicago Research & Trading, Inc., a commodity
trading firm, from 1990 to 1993. From 1979 to May 1990, a
Principal and Chief Executive Officer of First Options of
Chicago, Inc., a securities, futures and options clearing
firm, and a Partner of Spear Leeds & Kellogg, a specialist
firm on the New York Stock Exchange. Mr. Porter has been
in the securities and futures business since 1969 and has
been a member of principal exchanges such as the Chicago
Board of Trade, the Chicago Mercantile Exchange and the
Chicago Board Options Exchange.
Louis J. Morgan, 63 ........................................ 1980
Chairman of the Board of HyperFeed Technologies from May
1984 until October 1997. Mr. Morgan served as President of
HyperFeed Technologies from August 1980 to May 1984 and
served as Treasurer from August 1980 to December 1997.
From 1962-1972, Mr. Morgan was employed as a securities
broker and sales manager of a regional New York Stock
Exchange member brokerage firm. He was a member of the
Chicago Board Options Exchange, Inc. from 1973 to 1986 and
served on the Systems Committee of the Chicago Board of
Options Exchange, Inc. from 1980 through 1983.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Director
Name, Age, and Principal Occupation Since
- ----------------------------------- --------
<S> <C>
Ronald Langley, 55 ......................................... 1995
Director of Physicians Insurance Company of Ohio since
1993; Chairman of Physicians Insurance Company since 1995;
Chairman and Director of Global Equity Corporation since
1995; Chairman and Director of PICO Holdings, Inc. since
1996; Director of M C Shipping, Inc. since 1997.
John R. Hart, 40 ........................................... 1997
Director of Physicians Insurance Company of Ohio since
1993; President and CEO of Physicians Insurance Company of
Ohio since 1995; President and CEO and Director of Global
Equity Corporation since 1995; President and CEO and
Director of PICO Holdings, Inc. since 1996; Director and
Chairman of Conex Continental, Inc. since August, 1997;
Director of SISCOM, Inc. since November, 1996.
Timothy K. Krauskopf, 36 ................................... 1997
CEO-Business to Business Internet Investments, divine
interVentures, Chicago, IL since December,
1999--Mr. Krauskopf served as President and COO of
PCQuote.com, Inc. from April, 1999 to December, 1999 and
the head of Information Systems at the Field Museum in
Chicago from 1997 to 1999. He was the Co-founder, Chief
Technical Officer and Vice President of Research and
Development for Spyglass, Inc, a software firm, from 1990
to 1997. Mr. Krauskopf is a fellow in the Henry Crown
Fellowship program at the Aspen Institute, and serves on
many of its boards, including the Board of the Illinois
Coalition. Mr. Krauskopf has also served as a trustee for
Northwestern University. Mr. Krauskopf holds a BA degree
in Integrated Science from Northwestern University, an MS
degree in Computer Science from the University of Illinois
and an MBA (MM) from Northwestern's Kellogg Graduate
School of Management. Mr. Krauskopf has over ten years of
technology planning and management experience.
Kenneth J. Slepicka, 44 .................................... 1998
Vice President Financial Services, Paragon Solutions,
Inc., Chicago, IL. President and Treasurer, SBC Warburg
Futures Inc. from 1994 to 1998 and Executive Director
Fixed Income Trading for O'Connor & Associates from 1985
to 1994. Mr. Slepicka is a former principal officer and
member of the Chicago Board of Trade, Chicago Mercantile
Exchange, Chicago Board of Options Exchange, and Pacific
Options Exchange. Mr. Slepicka has held numerous committee
memberships at the each of the exchanges and has served as
a Governor of the Chicago Board of Trade Clearing
Corporation, member of the FIA Steering Committee and the
Federal Reserve FCM Working Group. Mr. Slepicka has been
involved in the securities and futures business since
1979.
John L. Borling, 60 ........................................ 2000
Director and Executive Vice President of BVM
Communications, a new media industry and technology
company which promotes community information systems and
cause-related marketing. Additionally, Mr. Borling serves
as Vice Chairman of ShureBerger, Inc. and SBI LLC, a full
service marketing, public relations and promotional
products firms. Mr. Borling served in the United States
Air Force from 1963 through 1996, attaining the rank of
Major General. His experience and commands include:
Director of Operations for Strategic Air Command, Director
of US Air Force Operational Requirements at the Pentagon,
as well as commanding the largest American military and
fighter base outside of the United States. Mr. Borling has
more than 20 years of high-level management and consulting
experience.
</TABLE>
The principal occupation of each of the above nominees for the past five years
has been set forth in the above table.
3
<PAGE>
The Board has established an Audit Committee and a Compensation Committee. The
Audit Committee is comprised of Messrs. Krauskopf, Langley and Slepicka. The
Compensation Committee is comprised of Messrs. Krauskopf, Langley, Slepicka and
Porter.
During the year ended December 31, 1999, the Board held 16 meetings. Except for
Louis J. Morgan, each of the directors attended, in person or by telephone, at
least 75% of the total number of meetings of the Board and committees thereof
held during the period for which each individual was a director.
COMPENSATION OF DIRECTORS
On May 13, 1994, we adopted a policy of paying our non-employee directors $4,000
per year and, in addition, $750 per meeting. Although non-employee directors
were entitled to compensation during 1999, no such compensation was paid.
On March 24, 1999, we adopted a policy of granting options to non-employee
directors.
On September 17, 1999 we granted 5,000 fully-vested options, expiring on
September 17, 2004, to Mr. Kenneth J. Slepicka at an exercise price of $8.875,
the closing market price on the date of the grant. No other non-employee
directors received an option grant in 1999.
APPROVAL OF AMENDMENT TO THE 1999 COMBINED INCENTIVE AND NON-STATUTORY STOCK
OPTION PLAN
The HyperFeed Technologies, Inc. 1999 Combined Incentive and Non-Statutory Stock
Option Plan (the "1999 Plan") was adopted by our Board on March 24, 1999 and by
our shareholders on June 16, 1999. The purposes of the 1999 Plan are to attract
and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to employees, directors and
consultants and to promote the success of our business. Under the 1999 plan, an
aggregate of 4,000,000 shares of common stock have been reserved for issuance.
We are presently seeking to increase the aggregate number of shares available
for grants of options under the 1999 plan from 4,000,000 to 5,000,000.
Management believes that additional shares of common stock are needed for
issuance under the 1999 Plan so that sufficient awards can continue to be made
to attract and retain personnel and to realize the other purposes of the 1999
Plan. As of March 29, 2000, not taking into account this proposal to increase
the number of shares available for grants, there were 34,226 remaining shares
available for future option grants under the 1999 plan.
ADMINISTRATION
The 1999 Plan is administered by our Incentive Stock Committee. Subject to the
express terms of the 1999 Plan, the administrator has full and final authority,
in its discretion, to:
-determine the value of our common stock;
-select the employees, directors or consultants to whom options and
stock purchase rights may from time to time be granted;
-determine the number of shares of our common stock to be covered by
each award granted under the 1999 Plan;
-approve forms of agreement for use under the 1999 Plan;
-determine the terms and conditions of any options or stock purchase
rights granted under the 1999 Plan;
4
<PAGE>
-determine whether and under what circumstances an option may be
settled in cash instead of in our shares of common stock,
-reduce the exercise price of any option to the then current fair
market value of our common stock, if such fair market value has
declined since the date the option was granted;
-initiate a program whereby outstanding options are exchanged for
options with a lower exercise price;
-prescribe, amend and rescind rules and regulations relating to the
1999 Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax
treatment under foreign tax laws;
-allow option holders to satisfy withholding tax obligations by
electing to have HyperFeed withhold from the shares to be issued
upon exercise of an option or stock purchase right that number of
shares having a fair market value equal to the amount required to
be withheld; and
-construe and interpret the terms of the 1999 Plan and awards
granted pursuant to the 1999 Plan.
The administrator can modify the 1999 Plan as it deems advisable, without
approval of our stockholders, except as such stockholder approval may be
required under Rule 16b-3 under the Securities Exchange Act of 1934 or under the
listing requirements of any stock exchange on which are listed any of our equity
securities.
ELIGIBILITY AND PARTICIPATION
Options may be granted under the 1999 Plan to our officers, employees, directors
and consultants at the discretion of the administrator. In selecting as well as
in determining the number of shares subject to each option, the administrator
shall take into consideration such factors as it deems relevant to accomplish
the purpose of the 1999 Plan. All of our officers, employees, directors and
consultants are eligible to receive options.
TERM
The 1999 Plan shall continue in effect for a term of ten years, unless sooner
terminated by our Board. Any termination of the 1999 Plan generally may not
affect or change options previously granted under the 1999 Plan.
OPTION EXERCISE PRICE
The per share exercise price for the shares of common stock to be issued under
the 1999 Plan shall, subject to certain restrictions, be the price as is
determined by the administrator. In no event shall the per share exercise price
be less than 85% of the fair market value of the shares of our common stock on
the date of grant.
NON-TRANSFERABILITY OF OPTIONS AND STOCK PURCHASE RIGHTS
The options and stock purchase rights to be issued under the 1999 Plan may not
be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of
5
<PAGE>
descent or distribution and may be exercised, during the lifetime of the holder
of the option or stock purchase right, only by such holder.
TRANSFERABILITY OF SHARES
Resale of shares acquired under the 1999 Plan by persons who are not
"affiliates" of HyperFeed, as that term is defined in Rule 405 under the
Securities Act, will not be restricted by requirements of the Securities Act.
Persons who may be deemed to be affiliates of HyperFeed may resell shares
acquired under the 1999 Plan pursuant to the provisions of Rule 144 promulgated
under the Securities Act.
Affiliates may also resell shares acquired under the 1999 Plan pursuant to any
other applicable exemption from registration under the Securities Act or
pursuant to a separate prospectus prepared in accordance with the requirements
of the applicable form under the Securities Act.
FEDERAL TAX CONSEQUENCES
Options granted under the 1999 Plan can be designated as "non-qualified stock
options" or "incentive stock options" for federal income tax purposes.
Generally, an employee receiving an incentive stock option does not realize any
taxable income for federal income tax purposes either at the time of grant or
upon the exercise of an incentive stock option. Upon the sale of the shares
obtained in the exercise of an incentive stock option, the excess of the fair
market value on the date of the sale over the exercise price of the option will
be taxable as a capital gain. The holding period for purposes of determining
whether the capital gain (or loss) is a long- or short-term gain (or loss) will
commence on the date the option is exercised.
WHERE YOU CAN GET COPIES OF THE PLAN
A copy of the 1999 Plan is available without charge to stockholders upon written
request to our Secretary at our principal executive office
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE AMENDMENT TO
INCREASE THE NUMBER OF SHARES UNDER THE PLAN. THE PERSONS NAMED ON THE ENCLOSED
PROXY CARD INTEND TO VOTE THE PROXIES SOLICITED HEREBY FOR THE AMENDMENT UNLESS
SPECIFICALLY DIRECTED OTHERWISE ON SUCH PROXY CARD.
6
<PAGE>
APPROVAL AND RATIFICATION OF INDEPENDENT AUDITORS FOR 2000
In August 1997, our Board appointed KPMG LLP, a certified public accounting
firm, as our independent auditors for the year ending December 31, 1997. The
appointment of KPMG LLP as independent auditors for the year ending
December 31, 1997 was ratified by our stockholders at our annual meeting held on
October 16, 1997.
KPMG LLP was appointed by our Board as our independent auditors for the year
ending December 31, 1998 on April 20, 1998 and ratified by our stockholders at
our annual meeting on June 22, 1998.
KPMG LLP was appointed by our Board as our independent auditors for the year
ending December 31, 1999 on March 24, 1999 and ratified by our stockholders at
our annual meeting on June 16, 1999.
On March 29, 2000, our Board appointed KPMG LLP as our independent auditors for
the year ending December 31, 2000. A representative of KPMG LLP is expected to
be present at the annual meeting and will have an opportunity to make an
independent statement if he or she desires to do so. The representative is
expected to be available to respond to appropriate questions.
If the stockholders do not ratify KPMG LLP as our independent auditors, the
Board will reconsider, but is not obligated to change its decision appointing
that firm as our independent auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL AND
RATIFICATION OF KPMG LLP AS OUR INDEPENDENT AUDITORS FOR 2000. THE PERSONS NAMED
ON THE ENCLOSED PROXY CARD INTEND TO VOTE THE PROXIES SOLICITED HEREBY FOR THE
APPROVAL AND RATIFICATION OF KPMG LLP UNLESS SPECIFICALLY DIRECTED OTHERWISE ON
SUCH PROXY CARD.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Name Position Age
- ---- -------- --------
<S> <C> <C>
Jim R. Porter................... Chairman and Chief Executive Officer 59
John E. Juska (1)............... Chief Financial Officer and Secretary 44
Kurt K. Klein (2)............... Senior Vice President and Chief Operating Officer 47
Michael J. Kreutzjans (3)....... Senior Vice President and Chief Technology Officer 46
</TABLE>
- ---------
(1) Chief Financial Officer of HyperFeed Technologies since July 1997,
Mr. Juska served as Vice President and Chief Financial Officer for the
Chicago Mercantile Exchange from 1994 to July 1997. Between 1986 and 1994,
Mr. Juska served in various other positions for the Chicago Mercantile
Exchange, including Controller and Vice President of Finance. Mr. Juska also
previously served as Treasurer of CME Depository Trust Company and GFX
Corporation, both wholly-owned subsidiaries of the Chicago Mercantile
Exchange, and as a trustee of the CME Pension Trust.
(2) Mr. Klein joined HyperFeed Technologies in November 1996 as the Vice
President of Client Services and in December of 1998 was named Senior Vice
President and Chief Operating Officer. Mr. Klein began his career in the
financial market data industry in 1986 as MIS Manager for FutureSource in
Chicago, IL and went on to serve FutureSource in numerous capacities as
Customer Service Manager, Director of Operations, Vice President Sales &
Marketing and in 1995 Mr. Klein accepted the position of Vice President
Product Management & Business Development.
(3) Senior Vice President and Chief Technology Officer, HyperFeed Technologies,
Inc. since 1998, Mr. Kreutzjans was one of the original employees of
HyperFeed Technologies and has over
7
<PAGE>
19 years experience in the financial industry. Mr. Kreutzjans began his
career in 1980 as a programmer for On-Line Response, Inc., a predecessor to
HyperFeed Technologies, Inc., and in 1982 was promoted to Senior Analyst. In
1984, Mr. Kreutzjans was asked to join HyperFeed Technologies as the firm's
Vice President Development & Operations and as the lead developer. In 1989,
Mr. Kreutzjans was named Vice President Systems Development. In 1994 he
assumed responsibility for overseeing and guiding all development functions
and managed the firm's separate development center as Senior Vice President
Development. Mr. Kreutzjans has a B.S. in Computer Science from Indiana
University.
EXECUTIVE COMPENSATION
The following table summarizes the compensation for our Chairman and Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer and Chief
Technology Officer for the term of the positions held.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Awards
---------------------- ----------
Shares
Underlying
Name and Principal Position Year Salary Bonus Options
- --------------------------- -------- -------- -------- ----------
<S> <C> <C> <C> <C>
Jim Porter.................................... 1999 $180,000 -- 300,683
Chairman of the Board and Chief Executive 1998 $148,000 -- 676,200
Officer 1997 (1) -- 299,603
John Juska.................................... 1999 $151,250 $180,000 311,411
Senior Vice President and Chief Financial 1998 $175,000 $ 25,000 175,000
Officer
1997 $ 38,820(2) -- 10,000
Kurt Klein.................................... 1999 $151,041 $ 25,000 102,748
Senior Vice President and Chief Operating 1998 $137,113 $ 15,000 100,000
Officer
Michael Kreutzjans............................ 1999 $198,000 -- 92,748
Senior Vice President and Chief Operating 1998 $175,258 -- 50,000
Officer
</TABLE>
- ---------
(1) Payment of Mr. Porter's minimum annual salary of $98,000 was deferred into
1999 pursuant to a deferred compensation agreement.
(2) We employed Mr. Juska in July of 1997. Represents amounts paid to Mr. Juska
from July 1997 through December 1997.
The following table shows the total number of Options granted to each of the
named persons during 1999 (both as the number of shares of common stock subject
to such Options and as a percentage of all Options granted to employees during
1999) and, for each of these grants, the exercise price per share of common
stock and option expiration date. No SARs were granted in 1999.
8
<PAGE>
OPTION/SAR GRANTS IN 1999 FISCAL YEAR
<TABLE>
<CAPTION>
% of Total Potential Realizable Value
Options at Assumed Annual Rates
Number of Securities Granted to of Price Appreciation for
Underlying Employees in Exercise or Base Expiration Options
Name Options (#) Fiscal Year Price ($/Sh) Date 5%(1) 10%(1)
---- -------------------- ------------ ---------------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jim Porter.............. 300,683 23.5% $5.9375 03/17/04 $493,240 $1,089,946
John Juska.............. 311,411 24.4% $5.9375 03/17/04 $510,839 $1,128,834
Kurt Klein.............. 102,748 8.0% $5.9375 03/17/04 $168,548 $ 372,451
Michael Kreutzjans...... 92,748 7.3% $5.9375 03/17/04 $152,144 $ 336,202
</TABLE>
- ---------
(1) The dollar amounts under these columns are the result of calculations at the
5% appreciation and 10% appreciation rates for the full term of the options
as required by the SEC. The dollar amounts presented are not intended to
forecast possible future appreciation, if any, of the price of our common
stock.
The following table sets forth, for each of the named persons, the number of
shares they acquired on exercise of Options in 1999, the aggregate dollar value
realized upon exercise, the total number of shares of common stock underlying
unexercised Options and the aggregate dollar value of unexercised, in-the-money
Options, separately identifying the exercisable and unexercisable Options. No
SARs were outstanding in 1999.
AGGREGATED OPTION/SAR EXERCISES IN 1999
FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Shares Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-End (#) FY-End ($)(1)
Shares Value
Acquired on Realized Exercisable/ Exercisable/
Name Exercise(#) ($) Unexercisable Unexercisable
- ---- ----------- -------- ---------------- ---------------
<S> <C> <C> <C> <C>
John Juska.................. 10,000 32,500 175,000/311,411 557,812/0
Mike Kreutzjans............. 20,000 73,750 49,999/142,749 166,663/170,837
</TABLE>
- ---------
(1) These values represent the excess, if any, of the fair market value of the
shares of common stock subject to Options on December 31, 1999 over the
respective option prices.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS.
In June 1997, HyperFeed Technologies and Mr. Porter entered into an Employment
Agreement (the "Porter Agreement") which provided for (i) the employment of
Mr. Porter as the Chief Executive Officer of HyperFeed Technologies, (ii) an
annual base salary for Mr. Porter of $98,000, subject to semi-annual review and
adjustment by the Board, and (iii) the granting to Mr. Porter of an option to
purchase shares of our common stock up to a maximum amount of 5% of the
outstanding shares of our common stock (the "Maximum Amount"). Pursuant to the
Porter Agreement, the Maximum Amount was to increase to 6.88% of our outstanding
shares upon the occurrence of certain events. Vesting of the shares up to the
Maximum Amount was to occur according to certain quarterly installments
scheduled in the Porter Agreement. The exercise price for the shares underlying
the option granted was to be equal to the market price of our common stock as of
June 14, 1997 or, in certain circumstances, be $2.00 per share. The Porter
Agreement also provided for accelerated vesting upon a change in control of
HyperFeed Technologies.
9
<PAGE>
In July 1997, HyperFeed Technologies and Mr. Juska entered into an Employment
Agreement (the "Juska Agreement") which provided for (i) the employment of
Mr. Juska as the Chief Financial Officer of HyperFeed Technologies, (ii) a
minimum annual base salary for Mr. Juska of $80,000, and (iii) the granting to
Mr. Juska of an option to purchase up to an aggregate of 10,000 shares of common
stock at an exercise price of $1.50 per share.
STOCK PLANS
EMPLOYEE STOCK PURCHASE PLAN.
As of April 19, 1999, our Board had approved and we had reserved an aggregate of
1,000,000 shares of common stock for issuance under our 1995 Employee Stock
Purchase Plan (the "Purchase Plan"). The Purchase Plan is intended to qualify
under Section 423 of the Internal Revenue Code of 1986 and permits our eligible
employees to purchase common stock through payroll deductions of up to 10% of
their annual salary in any calendar year to a maximum of $5,000 per offering.
The Purchase Plan has four three-month offering periods beginning on the first
day of each quarter. No employee may purchase more than 5% of our outstanding
voting capital stock or an amount more than $20,000 worth of stock in any
calendar year. The purchase price of common stock purchased under the Purchase
Plan equals 85% of the market value of the common stock, as calculated in the
Purchase Plan, on the first or last day of an offering period, whichever is
lower. During 1999, 79,874 shares were sold to employees in accordance with the
Plan.
INCENTIVE STOCK PLAN.
We have reserved an aggregate of 4,000,000 shares of common stock for issuance
under our 1999 Combined Incentive and Non-Statutory Stock Option Plan, which may
be granted to our employees, officers, directors and consultants. The 1999 Plan
is administered by our Incentive Stock Committee. Generally, Options may be
granted to our employees, officers, directors and consultants at a purchase
price equal to the fair market value (as defined in the Plan) of our common
stock at the date of grant, vest ratably over a three year period, and are
exercisable for a period of up to five years from the date of grant. During the
past fiscal year, options for 1,277,340 shares were granted under the 1999 Plan.
401(K) PLAN.
We maintain a 401(k) retirement savings plan for employees meeting certain
eligibility requirements. Under the 401(k) Plan in 1999, we matched
contributions made by employees to the 401(k) Plan up to 25% of the first 5%
contributed by an employee. During the last fiscal year, we made matching
contributions of approximately $58,356 under the 401(k) Plan. Beginning
January 1, 2000, we match 100% of the first 3% contributed by an employee to the
401(k) Plan.
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<PAGE>
STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth information as of March 29, 2000 regarding the
beneficial ownership of shares of our common stock by each director and by all
current directors and executive officers as a group.
<TABLE>
<CAPTION>
Beneficial Ownership
of Shares of Percent
Name Common Stock of Class
- ---- -------------------- --------
<S> <C> <C>
Jim R. Porter (1)......................................... 1,346,331 8.1%
Louis J. Morgan (2)....................................... 52,000 *
Timothy K. Krauskopf (3).................................. 105,000 *
Ronald Langley (4)........................................ 11,211,795 45.8%
John Hart (4)............................................. 11,211,795 45.8%
Kenneth J. Slepicka (5)................................... 13,000 *
John L. Borling (6)....................................... 5,000 *
John E. Juska (7)......................................... 335,419 2.1%
Kurt Klein (8)............................................ 118,027 *
Mike Kreutzjans (9)....................................... 109,090 *
All Directors and Officers as a Group
(10 persons) (10)........................................ 13,295,662 51.0%
</TABLE>
- ---------
* Represents holdings of less than 1%.
(1) Includes 1,076,031 shares of common stock, which may be acquired upon
exercise of options exercisable within 60 days.
(2) Includes 35,000 shares of common stock, which may be acquired upon exercise
of options exercisable within 60 days.
(3) Includes 5,000 shares of common stock, which may be acquired upon exercise
of options exercisable within 60 days.
(4) Mr. Langley, a Director of HyperFeed Technologies since 1995, is a Director
of PICO Holdings, Inc. ("Holdings"). Mr. Hart, a Director of HyperFeed
Technologies since July 1997, is President and Chief Executive Officer of
Holdings. As such, Mr. Langley and Mr. Hart each may be deemed to
beneficially own the 11,211,795 shares of our common stock beneficially
owned by Holdings. This number of shares deemed beneficially owned includes
i) 1,907,500 shares of common stock which are issuable to Physicians
Insurance Company of Ohio, a wholly-owned subsidiary of Holdings, upon
conversion of its 19,075 shares of Series A Convertible Preferred Stock,
ii) 2,879,100 shares of common stock which are issuable to Holdings upon
conversion of its 28,791 shares of Series B Preferred Stock, and
iii) 4,055,195 shares of common stock upon exercise of common stock Purchase
Warrants issued to Holdings in connection with various HyperFeed
Technologies financings. Such shares are deemed outstanding for computing
the percentage beneficially owned by Holdings, but are not deemed
outstanding for computing the percentage beneficially owned by any other
person. See "Principal Stockholders." Mr. Langley and Mr. Hart each disclaim
beneficial ownership of these shares within the meaning of 13d-3 of the
Securities and Exchange Act of 1934.
(5) Includes 10,000 shares of common stock, which may be acquired upon exercise
of options exercisable within 60 days.
(6) Includes 5,000 shares of common stock, which may be acquired upon exercise
of options exercisable within 60 days.
(7) Includes 278,804 shares of common stock, which may be acquired upon exercise
of options exercisable within 60 days.
11
<PAGE>
(8) Includes 107,582 shares of common stock, which may be acquired upon exercise
of options exercisable within 60 days.
(9) Includes 80,915 shares of common stock, which may be acquired upon exercise
of options exercisable within 60 days.
(10) Includes 1,598,332 shares of common stock, which may be acquired upon
exercise of options exercisable within 60 days.
PRINCIPAL STOCKHOLDERS
The following table sets forth information as of March 1999, regarding each
person other than our directors who were known by us to own beneficially more
than 5% of the outstanding shares of common stock. Each person named has sole
voting and investment power with respect to the shares beneficially owned by
such person.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Percent of
Owned as of Outstanding
Name and Address of Beneficial Owner March 29, 2000 Shares(1)
- ------------------------------------ ---------------- -----------
<S> <C> <C>
PICO Holdings, Inc..................................... 11,211,795(2)(3) 45.8%
875 Prospect Street, Suite 301
La Jolla, California 92037
Physicians Insurance Company of Ohio................... 3,957,500(3) 20.2%
875 Prospect Street, Suite 301
La Jolla, California 92037
</TABLE>
- ---------
(1) The percent of the outstanding shares is based upon the number of common
shares outstanding as of March 29, 2000 (15,621,618); plus the number of
common shares that the selling security holder may acquire upon exercise of
warrants; plus the minimum number of common shares that the selling security
holder may acquire upon conversion of outstanding Series A preferred stock
or Series B preferred stock.
(2) Includes 2,050,000 common shares beneficially owned directly by Physicians
Insurance Company of Ohio, which is a direct subsidiary of PICO Holdings,
Inc. As a result of the status of PICO Holdings, Inc. as the parent of
Physicians Insurance Company of Ohio, Physicians Insurance Company of Ohio
and PICO Holdings, Inc. may be deemed to share voting and investment power
with respect to these common shares. Also includes 4,055,195 common shares
which may be acquired upon exercise of common stock purchase warrants. Also
includes 2,879,100 common shares which may be acquired upon conversion of
the Series B preferred stock previously issued to PICO Holdings, Inc.
(3) Includes 1,907,500 common shares which may be acquired upon conversion of
the Series A preferred stock previously issued to Physicians Insurance
Company of Ohio.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires our directors and
executive officers, and persons who own more than ten percent of a registered
class of our equity securities, to file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in ownership of
common stock and our other equity securities. 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.
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<PAGE>
To our knowledge, based solely on review of the copies of such reports furnished
to us during the two fiscal years ended December 31, 1999, our officers,
directors and greater than ten-percent beneficial owners complied with all
applicable Section 16(a) filing requirements except Mr. Morgan who has filed one
late report, Mr. Juska who has filed one late report and Mr. Kreutzjans who has
filed two late reports.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
TO OUR STOCKHOLDERS:
In October 1997, the Board established a Compensation Committee for
administering our executive compensation programs. Prior to that time, the
entire Board was generally responsible for administering the programs. The
Compensation Committee also assumed responsibility for administering our Option
Plans from our Incentive Stock Committee.
COMPENSATION PHILOSOPHY
Our executive compensation program is intended to attract, develop, reward and
retain quality management talent. It is our philosophy that executive
compensation should recognize an individuals' contribution to us and be
competitive with compensation offered by other computer software and service
companies. To further align executive officers' interests with those of the
stockholders, our executive compensation program also relies on stock option
awards.
COMPENSATION COMPONENTS
The components of our executive compensation program are as follows: base
salary, bonus and stock option awards.
BASE SALARY. In 1997 the Board determined the base salaries of Messrs. Porter
and Juska upon their employment with us. The Board has established annual
increases to base salaries to be paid to our executive officers. In setting each
increase, the Committee takes into account several factors such as an
individual's experience, responsibilities, management and leadership abilities
and job performance in the prior year.
BONUS. We do not have a formal bonus program; however, the Board may, at its
discretion, award bonuses based on our performance and individual merit. Except
for Messrs. Juska and Klein, none of our executives, including our Chief
Executive Officer, received a bonus during 1999.
STOCK OPTIONS. The Board believes stock options are a key long-term incentive
vehicle because they provide executives with the opportunity to acquire or
increase an equity interest in us and to share in the appreciation of the value
of our common stock. Stock option grants, therefore, directly align the
executive's interest with those of the stockholders.
Stock options are granted to the executive officers and other key managers by
our Compensation Committee (formerly our Incentive Stock Committee) under our
Incentive Stock Option Plan generally every 12 months. Options are generally
granted with a three year vesting and a five year exercise period in order to
encourage executives and managers to take a long-term view of the impact of
their individual contributions to us. In determining the number of options to be
awarded to each individual, the Committee considers the executive's level of
management responsibility and potential impact on our profitability and growth.
During the 1999 fiscal year, options were granted to our Chief Executive
Officer, Chief Operating Officer, Chief Technology Officer, and Chief Financial
Officer at an option price equal to the fair market value of our stock on the
date of grant.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Board established 1997 compensation of Jim R. Porter, our Chief Executive
Officer, based upon his employment agreement which initially established his
annual base salary. Mr. Porter agreed to defer
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<PAGE>
receipt of payment of his 1997 salary initially until May 1998. On June 22,
1998, the Board and Mr. Porter agreed that he would accept shares of common
stock at market price in lieu of previously deferred and future cash
compensation. On June 16, 1999, the Board and Mr. Porter agreed that effective
October 1, 1999, he would be compensated in cash instead of shares of common
stock.
Ronald Langley Timothy K. Krauskopf Kenneth J. Slepicka
COMPARATIVE CUMULATIVE SHAREHOLDER RETURN
We commenced trading of our common stock on the Nasdaq National Market on
September 23, 1999 under the symbol HYPR. Concurrent with the listing on the
Nasdaq National Market, trading in our common stock on the American Stock
Exchange under the symbol PQT was suspended. Therefore, the graph presented
below, comparing the five year cumulative total return of HyperFeed
Technologies, Inc., the AMEX Market Value index, and the Standard & Poor's
Computer Software index from December 31, 1994 to December 31, 1999, also
compares the Nasdaq US index and the Nasdaq Computer & Data Processing Services
Stocks index for the same period of time. Total return is based on an assumed
investment of $100 on December 31, 1994.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FIVE YEAR TOTAL RETURN
<S> <C> <C> <C> <C> <C>
Nasdaq Computer & Data
HYPR AMEX Market Value Index S&P Computer Software Index Nasdaq US Index Processing Services Stocks
1994 $100.00 $100.00 $100.00 $100.00 $100.00
1995 $1,058.33 $128.68 $140.30 $141.33 $152.28
1996 $158.33 $130.73 $217.94 $173.89 $187.95
1997 $66.67 $163.50 $303.51 $213.07 $230.90
1998 $141.67 $175.49 $550.46 $300.25 $412.23
1999 $308.33 $224.19 $1,014.47 $542.43 $871.27
</TABLE>
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
HYPR................................... 100.00 1,058.33 158.33 66.67 141.67 308.33
AMEX Market Value Index................ 100.00 128.68 130.73 163.50 175.49 224.19
S&P Computer Software Index............ 100.00 140.30 217.94 303.51 550.46 1,014.47
Nasdaq US Index........................ 100.00 141.33 173.89 213.07 300.25 542.43
Nasdaq Computer & Data Processing
Services Stocks...................... 100.00 152.28 187.95 230.90 412.23 871.27
</TABLE>
ANNUAL REPORT
Our annual report to stockholders for the fiscal year ended December 31, 1999,
including financial statements, accompanies this Proxy Statement. However, no
action is proposed to be taken at the
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<PAGE>
meeting with respect to the annual report, and it is not to be considered as
constituting any part of the proxy soliciting material.
STOCKHOLDER PROPOSALS
From time to time stockholders may present proposals which may be proper
subjects for inclusion in the proxy statement and for consideration at the
annual meeting. To be considered, proposals must be submitted on a timely basis.
We must receive proposals for the 2001 stockholders' meeting no later than
December 15, 2000. Any such proposals, as well as any questions related thereto,
should be directed to our Secretary.
OTHER MATTERS
Management knows of no other business likely to be brought before the meeting.
If other matters do come before the meeting, the persons named in the form of
proxy or their substitute will vote said proxy according to their best judgment.
A copy of our annual report on Form 10-K for the fiscal year ended December 31,
1999 is available without charge to stockholders upon written request to our
Chief Financial Officer.
By order of the Board of Directors
[SIGNATURE]
JOHN E. JUSKA
CHIEF FINANCIAL OFFICER AND CORPORATE
SECRETARY
15
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
HYPERFEED TECHNOLOGIES, INC.
300 SOUTH WACKER DRIVE
CHICAGO, ILLINOIS 60606
THE UNDERSIGNED HEREBY APPOINTS JIM R. PORTER AND JOHN E. JUSKA AS PROXIES, EACH
WITH THE POWER TO APPOINT A SUBSTITUTE, AND HEREBY AUTHORIZES THEM TO REPRESENT
AND TO VOTE, AS DESIGNATED BELOW, ALL THE COMMON STOCK OF HYPERFEED
TECHNOLOGIES, INC. HELD OF RECORD BY THE UNDERSIGNED ON MARCH 29, 2000 AT THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 17, 2000 OR ANY ADJOURNMENT OR
POSTPONEMENT THEREOF.
<TABLE>
<S> <C> <C> <C> <C>
(1) ELECTION OF DIRECTORS
/ / FOR all nominees listed below (except as marked to the / / WITHHOLD AUTHORITY to vote for all nominees listed
contrary below) below.
</TABLE>
Jim R. Porter, Louis J. Morgan, Ronald Langley, John R. Hart, Timothy K.
Krauskopf, Kenneth J. Slepicka, John L. Borling
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW:
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
(2) Amendment of the 1999 Combined Incentive and Non-Statutory Stock Option
Plan.
/ / FOR / / AGAINST / / ABSTAIN
(3) The approval and ratification of KPMG LLP as our independent auditors for
2000.
/ / FOR / / AGAINST / / ABSTAIN
(4) In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
</TABLE>
(CONTINUED, AND TO BE SIGNED ON OTHER SIDE)
<PAGE>
THIS PROXY WHEN PROPERLY ENDORSED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE ELECTION OF ALL NOMINEES. AND FOR PROPOSALS NUMBER 2 AND 3.
PLEASE SIGN EXACTLY AS NAME APPEARS BELOW. FOR JOINT ACCOUNTS, ALL TENANTS
SHOULD SIGN. IF SIGNING FOR AN ESTATE, TRUST, CORPORATION, PARTNERSHIP OR OTHER
ENTITY, TITLE OR CAPACITY SHOULD BE STATED.
DATED: ____________________ , 2000
__________________________________
Signature
__________________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED RETURN ENVELOPE
