<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
NEWSEDGE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
The Board of Directors of NewsEDGE Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(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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(2) Form, Schedule or Registration Statement No.: Schedule 14A
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
NEWSEDGE CORPORATION
80 Blanchard Road
Burlington, Massachusetts 01803
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of NewsEDGE Corporation:
The Annual Meeting of Stockholders of NewsEDGE Corporation (the
"Corporation"), a Delaware corporation, will be held on Thursday, May 27, 1999
at 10:00 a.m., local time, at the Westin Hotel-Waltham, located at 70 Third
Avenue, Waltham, Massachusetts for the following purposes:
1. To elect two (2) Class III directors to serve for a three-year term or
until their successors are elected and qualified;
2. To ratify the selection of the firm of Arthur Andersen LLP as
independent auditors for the fiscal year ending December 31, 1999; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Only stockholders of record at the close of business on April 15, 1999 are
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if such stockholder has returned a proxy.
By Order of the Board of Directors
Lawrence S. Wittenberg
Secretary
Burlington, Massachusetts
April 22, 1999
<PAGE>
NEWSEDGE CORPORATION
80 Blanchard Road
Burlington, Massachusetts 01803
PROXY STATEMENT
April 22, 1999
Proxies in the form enclosed with this proxy statement are solicited by the
Board of Directors of NewsEDGE Corporation, a Delaware corporation (the
"Corporation"), for use at the Annual Meeting of Stockholders to be held on
Thursday, May 27, 1999, at 10:00 a.m., local time, at the Westin Hotel-
Waltham, 70 Third Avenue, Waltham, Massachusetts 02452.
Only stockholders of record at the close of business on April 15, 1999 (the
"Record Date") will be entitled to receive notice of and to vote at the
meeting and any adjournments thereof. As of that date, 17,322,595 shares of
common stock, $.01 par value per share (the "Common Stock"), of the
Corporation were issued and outstanding. The holders of Common Stock are
entitled to one vote per share on any proposal presented at the meeting.
Stockholders may vote in person or by proxy. Execution of a proxy will not in
any way affect a stockholder's right to attend the meeting and vote in person.
Any proxy may be revoked by a stockholder at any time before its exercise by:
(i) delivering written revocation or a later dated proxy to the Secretary of
the Corporation; or (ii) attending the Annual Meeting and voting in person.
The representation in person or by proxy of at least a majority of the
outstanding shares of Common Stock entitled to vote at the meeting is
necessary to constitute a quorum for the transaction of business. Votes
withheld from any nominee for director, abstentions and broker "non-votes" are
counted as present or represented for purposes of determining the presence or
absence of a quorum for the meeting. A "non-vote" occurs when a broker or
other nominee holding shares for a beneficial owner votes on one proposal, but
does not vote on another proposal because, in respect of such other proposal,
the broker does not have discretionary voting power and has not received
instructions from the beneficial owner.
Directors are elected by a plurality of the votes cast, in person or by
proxy, at the meeting. The nominees for director receiving the highest number
of affirmative votes of the shares present or represented and voting on the
election of directors at the meeting shall be elected to their respective
class of directors. On all other matters being submitted to stockholders, an
affirmative vote of a majority of the shares present or represented and voting
on each such matter is required for approval. An automated system administered
by the Corporation's transfer agent tabulates the votes. The vote on each
matter submitted to stockholders is tabulated separately. Abstentions are
included in the number of shares present or represented and voting on each
matter. Broker "non-votes" are not so included.
The persons named as attorneys-in-fact in the proxies are officers and/or
directors of the Corporation. All properly executed proxies returned in time
to be counted at the meeting will be voted. In addition to the election of
directors, the stockholders will consider and vote upon a proposal to ratify
the selection of auditors as further described in this proxy statement. Where
a choice has been specified on the proxy with respect to the foregoing
matters, the shares represented by the proxy will be voted as specified. Where
no choice is specified, the proxy will be voted FOR the applicable proposal.
The Board of Directors knows of no other matter to be presented at the
meeting. If any other matter should be presented at the meeting upon which a
vote properly may be taken, shares represented by all proxies received by the
Board of Directors will be voted with respect thereto in accordance with the
judgment of the persons named as attorneys in the proxies.
An Annual Report to Stockholders, containing financial statements for the
fiscal year ended December 31, 1998, is being mailed together with this proxy
statement to all stockholders entitled to vote. This proxy statement and the
form of proxy were first mailed to stockholders on or about April 22, 1999.
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MANAGEMENT AND PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth as of the Record Date: (i) the name of each
person who, to the knowledge of the Corporation, owned beneficially more than
5% of the Common Stock of the Corporation outstanding as of such date; (ii)
the name of each director or nominee; (iii) the name of each executive officer
identified in the Summary Compensation Table set forth below under
"Compensation and Other Information Concerning Directors and Officers;" and
(iv) the number of shares owned by each of such persons and all officers,
directors and nominees as a group and the percentage of the outstanding shares
represented thereby.
<TABLE>
<CAPTION>
Shares
Beneficially Percentage
Name Owned (1) Beneficially Owned (2)
- ---- ------------ ----------------------
<S> <C> <C>
Principal Stockholders(3):
Basil P. Regan(4)....................... 4,351,600 25.12%
6 East 43rd Street
New York, NY 10012
Donald L. McLagan(5).................... 2,194,680 12.65%
c/o NewsEDGE Corporation
80 Blanchard Road
Burlington, MA 01803
Directors:
Ellen Carnahan(6)....................... 24,716 *
June Rokoff(7).......................... 24,691 *
Rory J. Cowan(8)........................ 29,716 *
Michael E. Kolowich(9).................. 590,087 3.31%
William A. Devereaux(10)................ 192,670 1.11%
James D. Daniell, Ph.D.(11)............. 14,832 *
Named Officers:
Daniel F.X. O'Reilly, Ph.D.(12)......... 261,478 1.51%
Clifford M. Pollan(13).................. 177,556 1.02%
Edward R. Siegfried(14)................. 137,334 *
John L. Moss(15)........................ 48,270 *
All directors and executive officers as a
group:
(11 persons)(16)........................ 3,696,030 20.31%
</TABLE>
- --------
*Represents less than 1% of the outstanding shares.
(1) Except as otherwise noted, each person or entity named in the table has
sole voting and investment power with respect to the shares. The
inclusion herein of any shares of Common Stock deemed beneficially owned
does not constitute an admission of beneficial ownership of those shares.
(2) Applicable percentage of ownership as of the Record Date is based upon
17,322,595 shares of Common Stock outstanding on such date. Beneficial
ownership is determined in accordance with the rules of the Securities
and Exchange Commission (the "Commission"), and includes voting and
investment power with respect to shares. Shares of Common Stock subject
to options currently exercisable or exercisable within 60 days of the
Record Date are deemed outstanding for computing the percentage ownership
of the person holding such options, but are not deemed outstanding for
computing the percentage of any other person.
(3) This information was obtained from filings made with the SEC pursuant to
Sections 13(d) and 13(g) of the Securities and Exchange Act of 1934, as
amended.
(4) Includes 2,351,500 shares of Common Stock held by Regan Partners, L.P.;
1,411,400 shares of Common Stock held by the Regan International Fund,
L.P.; 134,000 shares of Common Stock held by the Wellcome Trust, Ltd.;
353,500 shares of Common Stock held by the Super Hedge Fund, L.P.; 37,000
shares of Common Stock held by Athena Partners, L.P.; and 2,000 shares of
Common Stock held by
2
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Lenore Robins, of which Mr. Regan is deemed the beneficial owner. Mr.
Regan is President and sole stockholder of Regan Fund Management, Ltd.,
general partner of Regan Partners L.P. and co-general partner with Lenore
Robins in Athena Partners, L.P. Regan Fund Management Ltd. is the
investment manager for Regan International Fund L.P., provides investment
management services to the Wellcome Trust, Ltd. and has a trading advisory
agreement with the Super Hedge Fund, L.P.
(5) Includes 444,442 shares held in trust for the benefit of Mr. McLagan's
two children, of which Mr. McLagan's wife is the sole trustee. Mr.
McLagan disclaims beneficial ownership of such shares. Also includes
30,681 shares of Common Stock issuable pursuant to outstanding stock
options exercisable within 60 days of April 15, 1999 by Mr. McLagan.
(6) Includes 19,716 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
(7) Includes 14,166 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
(8) Includes 19,716 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
(9) Includes 526,337 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
(10) Includes 39,114 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
(11) Includes 8,332 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
(12) Includes 30,000 shares owned by Mr. O'Reilly's spouse. Mr. O'Reilly
disclaims beneficial ownership of such shares. Includes 48,485 shares of
Common Stock issuable pursuant to outstanding stock options exercisable
within 60 days of April 15, 1999.
(13) Includes 59,224 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
(14) Includes 59,224 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
(15) Includes 47,670 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
(16) Includes 872,665 shares of Common Stock issuable pursuant to outstanding
stock options exercisable within 60 days of April 15, 1999.
3
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is set at seven members. The Board of Directors is
divided into three classes, two of which consist of two directors each and one
which consists of three directors. Each director serves for a three-year term.
All directors will hold office until their successors have been duly elected
and qualified or until their earlier resignation or removal.
The Board of Directors has nominated and recommended that Ms. Carnahan and
Mr. Daniell, who are currently members of the Board of Directors, be elected
Class III directors, to hold office until the 2002 Annual Meeting of
Stockholders or until their successors have been duly elected and qualified or
until their earlier resignation or removal. The Board of Directors knows of no
reason why the nominees should be unable or unwilling to serve, but if any
nominee should for any reason be unable or unwilling to serve, the proxies
will be voted for the election of such other person for the office of director
as the Board of Directors may recommend in the place of such nominee. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for nominees named below.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE "FOR" THE NOMINEES LISTED BELOW.
The following table sets forth for the nominees to be elected at the meeting
and, for each director whose term of office will extend beyond the meeting,
the year such nominee or director was first elected a director, the positions
currently held by the nominees and each director with the Corporation, the
year the nominee's or director's term will expire and class of director of
each nominee and each director:
<TABLE>
<CAPTION>
Director's Name and Year Term Expires at
Director First Became a Position(s) with the Annual Meeting Class of
Director Corporation Held in Director
------------------------ -------------------- --------------- --------
<S> <C> <C> <C>
Nominees:
Ellen Carnahan.......... Director 2002 III
1991
James D. Daniell........ Director 2002 III
1998
Continuing Directors:
Donald L. McLagan....... Chairman, Chief Executive 2001 I
1988 Officer and Director
Michael E. Kolowich..... Vice Chairman and Director 2001 I
1998
June Rokoff............. Director 2001 I
1996
William A. Devereaux.... Director 2000 II
1998
Rory J. Cowan........... Director 2000 II
1993
</TABLE>
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<PAGE>
OCCUPATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the director nominees to be elected at the
meeting, the directors and the executive officers of the Corporation, their
ages and the positions currently held by each such person with the
Corporation.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Donald L. McLagan................ 57 Chairman, Chief Executive Officer and
Director
Michael E. Kolowich.............. 46 Vice Chairman and Director
Clifford M. Pollan............... 42 President and Chief Operating Officer
Edward R. Siegfried(3)........... 54 Vice President--Finance, Chief
Financial Officer, Treasurer and
Assistant Secretary
Daniel F.X. O'Reilly, Ph.D....... 52 Vice President and Chief Technology
Officer
John L. Moss..................... 43 Vice President--Development
Michael H. Welles................ 44 Vice President--News Operations
June Rokoff(1)................... 49 Director
Ellen Carnahan(2)................ 43 Director
Rory J. Cowan(1)(2).............. 46 Director
William A. Devereaux(2).......... 52 Director
James D. Daniell(1).............. 35 Director
</TABLE>
- --------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
(3) Mr. Siegfried officially retired as Vice President--Finance, Chief
Financial Officer, Treasurer and Assistant Secretary effective on March
31, 1999, but is continuing in such position until the earlier of June 30,
1999, or the hiring of his successor.
Mr. McLagan is the founder of the Corporation, has been a director since its
inception in 1988 and was President of the Corporation until Mr. Pollan's
election as President in April 1999. Mr. McLagan was elected Chairman and
Chief Executive Officer in June 1995. From 1985 to 1988, Mr. McLagan was Vice
President and General Manager of the Information Services Division of Lotus
Development Corporation, a computer software company. From 1969 to 1984, Mr.
McLagan was employed by Data Resources, Inc., an economic information service
company, most recently as Executive Vice President.
Michael E. Kolowich joined the Corporation in February 1998 as Vice Chairman
and Director in connection with the Corporation's merger with Individual, Inc.
("Individual"). From September 1996 to February 1998, Mr. Kolowich served as
Individual's President, Chief Executive Officer and, Chairman of the Board of
Directors. Prior to joining Individual, Mr. Kolowich served from July 1996
until September 1996 as Vice President/Business Operations of Nets Inc., an
Internet content provider formed in June 1996 when AT&T New Media Services, a
provider of interactive online information services for business
professionals, merged with Industry.Net. Mr. Kolowich served as President of
AT&T New Media Services and AT&T Interchange Online Network from December 1994
until the merger with Industry.Net in June 1996. From April 1991 until
December 1994, Mr. Kolowich was President of Ziff-Davis Interactive, an
electronic publishing division of Ziff-Davis Publishing Company.
Mr. Pollan joined the Corporation in 1989 as a Vice President, served as
Vice President-Sales and Marketing from May 1995 and was elected President and
Chief Operating Officer in April 1999. From 1986 to 1989, Mr. Pollan was a
Director of Sales at Lotus Development Corporation, a computer software
company. From 1985 to 1986, Mr. Pollan was the Vice President of Sales of Isys
Corporation, a financial information
5
<PAGE>
company, and from 1978 to 1985 was employed by Data Resources, Inc., an
economic information service company, most recently as a Director of
Consulting.
Mr. Siegfried joined the Corporation in 1989 as Vice President, Treasurer
and Assistant Secretary and was elected Vice President--Finance and Operations
in May 1995 and Chief Financial Officer in May 1996. From 1985 to 1989, Mr.
Siegfried served as the Vice President responsible for finance, administration
and operations at Softbridge Microsystems, Inc., a computer software company.
From 1974 to 1985, Mr. Siegfried was the Senior Vice President--Finance and
Administration of Data Resources, Inc., an economic information service
company. Mr. Siegfried is a certified public accountant and from 1967 to 1974
was employed by the accounting firm of Arthur Andersen LLP, most recently as
Audit Manager.
Dr. O'Reilly joined the Corporation in 1989 as a Vice President and was
elected Vice President--Development in May 1995. In July 1996, Mr. O'Reilly
was promoted to Vice President and Chief Technology Officer. From 1979 to
1989, Dr. O'Reilly was the Vice President of the Information System
Development Group of Data Resources, Inc., an economic information service
company. From 1975 to 1979, Dr. O'Reilly held various teaching positions in
the Mathematics Departments of Marquette University, Simmons College and
Boston College.
Mr. Moss joined the Corporation in 1997 as Vice President--Development. From
1992 to 1996, Mr. Moss was President and Chief Executive Officer of Software
House, Inc., a company specializing in real-time security control
applications. Prior to that, he was a unit president for JWP, Inc., a public
company specializing in construction and building management products and
services. Mr. Moss is also an instructor of Computer Science at Tufts
University.
Mr. Welles joined the Corporation in February 1998 as Vice President--News
Operations, in connection with the Corporation's merger with Individual. From
1997 to 1998, Mr. Welles served as Vice President, Engineering at Individual.
Prior to joining Individual Mr. Welles was with Lotus Development Corp, a
computer software company, where he held the position of General Manager, Next
Generation Products from 1994-1997 and General Manager, Improv Product Line
from 1991-1994.
Ms. Rokoff has served on the Board of Directors of the Corporation since
July 1996. Until December 1995, Ms. Rokoff was a Senior Vice President,
Worldwide Services Group, at Lotus Development Corporation, a computer
software company, where she spent ten years in management. Previous management
positions at Lotus included Senior Vice President, Development, Vice President
Graphics and Information Management, and General Manager, Lotus 1-2-3 Release
3. Prior to Lotus, Ms. Rokoff was the Chief Operating Officer of Isys
Corporation, a financial information company, and spent thirteen years at Data
Resources, Inc., an economic information service company, where she managed
their software development. Since her departure from Lotus, Ms. Rokoff has
served as a director of Mathsoft, Inc., a public company that provides
software for technical professionals and students and various other
organizations.
Ms. Carnahan has served on the Board of Directors of the Corporation since
March 1991. Ms. Carnahan has been a general partner of William Blair Venture
Management L.P., a venture capital firm, and a Managing Director of William
Blair Capital Management L.L.C., an investment management company, since 1988.
Prior to 1988, Ms. Carnahan was Vice President of Marketing and Planning at
SPSS, Inc., an applications software company.
Mr. Cowan has served on the Board of Directors of the Corporation since May
1993. Since December 1996, Mr. Cowan has been Chairman and Chief Executive
Officer of LioNBRIDGE Technologies, an international software services
company. From 1991 to 1996, Mr. Cowan was an Executive Vice President of R.R.
Donnelley & Sons Company, a supplier of commercial print and print-related
services. During 1995 and 1996, Mr. Cowan was also the Chief Executive Officer
of Stream International, Inc., a software services company. Mr. Cowan also
serves as Chairman of Interleaf, Inc.
6
<PAGE>
William A. Devereaux became a director of the Corporation in February 1998,
in connection with the Corporation's merger with Individual. Mr. Devereaux
served on Individual's Board from 1989 until the merger. Mr. Devereaux has
been Managing Director of American Capital Company, a venture capital and
merchant banking company, since 1988. From 1993 to 1994, Mr. Devereaux was
Vice President, Strategic Planning and Marketing at the Communications
Division of General Instrument Corp., a creator of analog and digital systems
that provide broadband telecommunications services. Prior to that, from 1979
to 1987, Mr. Devereaux was Executive Vice President at American Cable Systems,
a national provider of cable television.
James D. Daniell, Ph.D. became a director of the Corporation in February
1998, in connection with the Corporation's merger with Individual. Dr. Daniell
served on Individual's Board from 1997 until the merger. Dr. Daniell has been
Chief Executive Officer of Order Trust LLC, an electronic commerce company,
since November 1997. From February 1997 to November 1997, he served as Chief
Operating Officer and Vice President of Strategy and New Business Development
at AT&T Networked Commerce Services, an internet service provider. From
November 1996 to February 1997, Dr. Daniell served as Vice President of
Electronic Messaging and New Business Development at AT&T Easy Commerce
Services. From December 1995 to November 1996, Dr. Daniell was Vice President
of Corporate and New Business Development at AT&T Corporation, an information
and communication services provider. Dr. Daniell served from April 1994 to
December 1995 as Vice President, Business Communications Services Strategy and
New Business Development, at AT&T Corporation. Prior to that, Dr. Daniell was
a founder and Vice President of Business Development and Strategic Relations
at Bridge Builder Technologies, a software vendor. Dr. Daniell served from
March 1991 to May 1993 as Strategic Planning Director and Vice President at
UNIX Systems Laboratories. Dr. Daniell serves as Vice Chairman of the
Massachusetts Software Council and is also the Board of Advisors of
espanol.com.
Executive officers of the Corporation are elected by the Board of Directors
on an annual basis and serve until their successors have been duly elected and
qualified.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors met seven times during the fiscal year ended December
31, 1998. Each of the directors attended at least 75% of the meetings of the
Board of Directors during fiscal 1998. The Corporation established an Audit
Committee and Compensation Committee during fiscal 1995. The Audit Committee
of the Board of Directors, of which Messrs. Devereaux and Cowan and Ms.
Carnahan are currently members, is responsible for reviewing the results and
scope of audits and other services provided by the Corporation's independent
auditors. The Audit Committee met once during fiscal 1998. The Compensation
Committee, whose members currently are Ms. Rokoff and Messrs. Cowan and
Daniell, makes recommendations concerning the salaries and incentive
compensation of executive officers, employees and consultants to the
Corporation and administers the Corporation's stock plans. The Compensation
Committee met seven times during fiscal 1998. The Board of Directors does not
have a standing nominating committee.
COMPENSATION AND OTHER INFORMATION CONCERNING DIRECTORS AND OFFICERS
Compensation of Directors
On January 23, 1996, the Compensation Committee of the Board of Directors
approved the Director Compensation Plan. Under the Director Compensation Plan,
each non-employee director receives both an annual retainer of $5,000 and a
fee of $1,000 for each Board meeting physically attended. A "non-employee
director," for purposes of the Director Compensation Plan, is a director who
is not an employee of the Corporation and not an officer, director, general
partner or employee of a securities firm, venture capital firm or other
institution or corporation which, together with its affiliates, holds more
than 5% of the Corporation's issued and outstanding Common Stock. Directors
who are employees, or who hold more than 5% of the Corporation's Common Stock,
receive no remuneration for serving as members of the Board or as members of
committees of the Board. Non-
7
<PAGE>
employee directors are also reimbursed for their reasonable out-of-pocket
travel expenses associated with their attendance at Board meetings. During the
fiscal year ended December 31, 1998, Messrs. Cowan, Daniell, Devereaux, Ms.
Carnahan and Ms. Rokoff each earned $9,000, respectively under the Director
Compensation Plan.
In addition, in order to provide an incentive to non-employee directors,
options are granted to non-employee directors pursuant to the 1995 Non-
employee Director Stock Option Plan, as amended, (the "Director Plan"). Under
the Director Plan, each non-employee director receives, on the date such
person is first elected to the Board, an option to purchase 20,000 shares (the
"Initial Option") of the Corporation's Common Stock, vesting over three years.
Subsequent to the grant of the Initial Option, each non-employee director who
has attended at least 75% of the board meetings during the previous fiscal
year will receive an option to purchase 2,500 shares of Common Stock, vesting
on the first anniversary of the date of such grant. All options granted under
the Director Plan will have an exercise price equal to the fair market value
of the Common Stock on the date of grant. Each option granted under the
Director Plan will expire ten years from the date of grant.
During the fiscal year ended December 31, 1998, Messr. Cowan, Ms. Carnahan
and Ms. Rokoff each received options to purchase 2,500 shares at an exercise
price of $10.438 per share pursuant to the Director Plan. Messrs. Daniell and
Devereaux each received options to purchase 20,000 shares at a price per share
of $10.875 pursuant to the Director Plan.
Executive Compensation Summary
The following table sets forth summary information concerning the
compensation paid or earned for services rendered to the Corporation in all
capacities during the fiscal years ended December 31, 1998, 1997, and 1996 to
(i) the Corporation's Chief Executive Officer and (ii) each of the other four
most highly compensated executive officers of the Corporation who received
total annual salary and bonus in excess of $100,000 in fiscal 1998 (the "Named
Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Securities
Name and Principal --------------------- Underlying All Other
Position Year Salary Bonus ($)(1) Options (#) Compensation(2)
------------------ ---- -------- ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
Donald L. McLagan....... 1998 $156,000 $19,991 100,500 $ 800
Chairman, Chief 1997 147,500 18,925 -- 760
Executive Officer and 1996 135,300 16,500 -- 760
Director
Clifford M. Pollan...... 1998 156,000 35,591 80,500 800
President and Chief 1997 147,500 41,650 45,000(3) 760
Operating 1996 135,300 40,571 -- 760
Officer
Edward R. Siegfried..... 1998 156,000 19,991 80,500 800
Vice President-- 1997 147,500 18,925 45,000(3) 760
Finance, 1996 135,300 16,500 -- 760
Chief Financial
Officer, Treasurer
and Assistant Secretary
Daniel F.X. O'Reilly.... 1998 156,000 19,991 45,500 --
Vice President and 1997 147,500 18,925 45,000(3) 1,770
Chief 1996 135,300 16,500 -- 1,624
Technology Officer
John M. Moss(4)......... 1998 156,000 19,991 60,500 --
Vice President -- 1997 150,000 18,925 50,000(3) --
Development 1996 -- -- -- --
</TABLE>
- --------
(1) Includes bonuses earned with respect to services rendered in the fiscal
year indicated, whether or not such bonus was actually paid during such
fiscal year.
8
<PAGE>
(2) Represents matching contributions made by the Corporation to the Named
Executive Officer under the Corporation's 401(k) plan.
(3) Includes options granted pursuant to the repricing of options in 1997.
(4) Mr. Moss joined the Corporation in 1997.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides certain information concerning grants of
options to purchase the Corporation's Common Stock made during the year ended
December 31, 1998 to each of the Named Executive Officers. No stock
appreciation rights ("SARs") were granted during the fiscal year ended
December 31, 1998.
Option/SAR Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
----------------------------------------------------
Number of Percent of Total Grant
Securities Options/SARs Date
Underlying Granted Exercise or Present
Options/SARs to Employees Base Price Expiration Value(1)
Name Granted in Fiscal Year ($/Share) Date ($)
---- ------------ ---------------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
Donald L. McLagan....... 29,244 5.14% 11.9625 2/24/08 $522,600
70,756 11.9625 2/24/08
250(2) 6.6250 7/30/08
250(3) 6.6250 7/30/08
Clifford M. Pollan...... 49,082 4.12% 10.8750 2/24/08 $418,600
30,918 10.8750 2/24/08
250(2) 6.6250 7/30/08
250(3) 6.6250 7/30/08
Edward R. Siegfried..... 49,082 4.12% 10.8750 2/24/08 $418,600
30,918 10.8750 2/24/08
250(2) 6.6250 7/30/08
250(3) 6.6250 7/30/08
Daniel F.X. O'Reilly.... 15,540 2.33% 10.8750 2/24/08 $236,600
29,460 10.8750 2/24/08
250(2) 6.6250 7/30/08
250(3) 6.6250 7/30/08
John M. Moss............ 29,915 3.09% 10.8750 2/24/08 $314,600
30,085 10.8750 2/24/08
250(2) 6.6250 7/30/08
250(3) 6.6250 7/30/08
</TABLE>
- --------
(1) In accordance with Securities and Exchange Commission rules, the Black-
Scholes option pricing model was chosen to estimate the grant date present
value of the options set forth in this table. The Corporation's use of
this model should not be construed as an endorsement of its accuracy at
valuing options. All stock option valuation models, including the Black-
Scholes model, require a prediction about the future movement of the stock
price. The following assumptions were made for purposes of calculating the
Grant Date Present Value: an option term of 2-5 years, volatility at .63,
interest rate at (4.19-5.95%). The real value of the options in this table
depends upon the actual performance of the Corporation's stock during the
applicable period.
(2) Options will vest 100% on the earlier of 6/30/08 or the last day of the
month following the close of the fiscal quarter in which the Corporation
achieves operating cash flow break even status.
(3) Options will vest 100% on the earlier of 6/30/08 or the last day of the
month following the close of the fiscal quarter in which the Corporation
achieves profitability.
9
<PAGE>
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
The following table provides information as to options exercised in 1998 by
the Named Executive Officers, the value realized upon such exercises and the
value of options held by such officers at year end based on the closing price
of the Corporation's Common Stock on December 31, 1998.
Aggregated Option/SAR Exercises in Last Fiscal Year and
Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options/SARs at In-the-Money Options at
Fiscal Year-End Fiscal Year-End
------------------------- ---------------------------------------
Shares Acquired Value
Name on Exercise Realized Exercisable Unexercisable Exercisable ($)(1) Unexercisable ($)(1)
- ---- --------------- -------- ----------- ------------- ------------------ --------------------
<S> <C> <C> <C> <C> <C> <C>
Donald L. McLagan....... -- -- -- 100,500 -- 2,500
Clifford M. Pollan...... -- -- 29,994 95,506 83,187 96,183
Edward R. Siegfried..... -- -- 29,994 95,506 83,187 96,183
Daniel F.X. O'Reilly.... -- -- 29,994 60,506 83,187 69,933
John M. Moss............ -- -- 24,056 86,444 67,072 116,831
</TABLE>
- --------
(1) Value is based on the difference between the option exercise price and the
fair market value at December 31, 1998 ($11.625 per share as quoted on the
Nasdaq National Market) multiplied by the number of shares underlying the
option.
10
<PAGE>
Compensation Committee's Report on Executive Compensation
This report is submitted by the Compensation Committee. The Compensation
Committee during fiscal year 1998 was initially comprised of Ms. Rokoff and
Mr. Cowan, both of whom are non-employee directors. Mr. Daniell, also a non-
employee director, joined the Compensation Committee on February 24, 1998.
Pursuant to authority delegated by the Board of Directors, the Compensation
Committee is responsible for reviewing and administering the Corporation's
stock plans and reviewing and approving compensation matters concerning the
executive officers, employees and consultants to the Corporation.
Cash Compensation. Mr. McLagan, Mr. Pollan, Mr. Siegfried, Dr. O'Reilly and
Mr. Moss each received identical base salaries of $156,000 in 1998. The
Compensation Committee attempts to keep the base salary for the Corporation's
executive officers competitive by comparing it with those of other companies
in the computer software industry and other companies with similar market
capitalizations. The Compensation Committee's goal is to align the interests
of the Corporation's executive officers with its stockholders by incenting
them through performance based bonuses and equity compensation.
During 1998, the Compensation Committee of the Board of Directors approved a
short-term cash incentive compensation plan (the "Accountability Group Bonus
Plan"), which provides that the executive officers, along with other
designated members of senior management, receive bonuses based upon the
Corporation's financial performance in the current fiscal year. Each executive
officer's bonus may range from zero to a maximum amount determined by
reference to the final audited financial statements of the Corporation. During
the fiscal year ended December 31, 1998, Mr. McLagan, Mr. Pollan, Mr.
Siegfried, Dr. O'Reilly and Mr. Moss each earned a bonus of $19,991 pursuant
to the Accountability Group Bonus Plan. Mr. Pollan received in 1998, in
addition to his base salary and bonus, a commission based upon a formula
relating to the Corporation's new and renewal sales in that year.
Equity Compensation. The Corporation's equity compensation program is
designed to provide long-term incentives to executive officers to encourage
executive officers to remain with the Corporation and to provide executives
with the opportunity to obtain significant, long-term stock ownership. The
Compensation Committee generally grants options that become exercisable over a
four-year period and that have exercise prices equal to the fair market value
of the Common Stock on the date of grant. However, in the case of executive
officers who beneficially own more than ten percent (10%) of the Corporation's
Common Stock, the Internal Revenue Code of 1986, as amended, requires that the
exercise price of incentive stock options granted to such executive officer be
110% of the fair market value of the Common Stock on the date of grant. In
1998, pursuant to the 1995 Stock Plan, the Compensation Committee granted
70,756 non-qualified stock options to Mr. McLagan, 29,915 non-qualified stock
options to Mr. Moss, 15,540 non-qualified stock options to Mr. O'Reilly and
49,082 non-qualified stock options to each of Mr. Pollan and Mr. Siegfried. In
addition, the Compensation Committee granted 29,744 incentive stock options to
Mr. McLagan, 29,960 incentive stock options to Dr. O'Reilly, 30,585 incentive
stock options to Mr. Moss and 31,418 incentive stock options to each of Mr.
Pollan and Mr. Siegfried.
Other Benefits. The Corporation also has various broad-based employee
benefit plans. Executive officers participate in these plans on the same terms
as eligible, non-executive employees, subject to any legal limits on the
amounts that may be contributed or paid to executive officers under these
plans. The Corporation offers a stock purchase plan under which employees may
purchase Common Stock at a discount. The Corporation also maintains insurance
and other benefit plans for its employees.
Tax Deductibility of Executive Compensation. Under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), the Corporation cannot
deduct compensation in excess of $1 million paid to any of the Named Executive
Officers, unless certain requirements are met. The Compensation Committee has
considered these requirements and the related regulations. The Compensation
Committee believes that compensation deductions attributable to options
granted under the Corporation's 1995 Stock Plan currently qualify for an
exception to the requirements of Section 162(m). It is the Compensation
Committee's present intention that, so long as it is consistent with its
overall compensation objectives, substantially all executive compensation be
deductible by the Corporation for United States federal income tax purposes.
11
<PAGE>
Respectfully submitted by the Compensation Committee of the Board of Directors
June Rokoff
Rory J. Cowan
James D. Daniell
Compensation Committee Interlocks and Insider Participation
Interlocks. The Corporation's Compensation Committee of the Board of
Directors currently consists of Ms. Rokoff and Messrs. Cowan and Daniell. No
executive officer of the Corporation served as a member of the compensation
committee of another entity (or other committee of the Board of Directors
performing equivalent functions or, in the absence of any such committee, the
entire Board of Directors) of which either Ms. Rokoff or Messrs. Cowan and
Daniell is an executive officer.
Employment Agreement with Mr. Kolowich. In connection with the Corporation's
merger with Individual, the Corporation entered into an employment agreement
with Michael E. Kolowich, the Corporation's Vice Chairman and a Director of
the Corporation and formerly the Chairman, President and Chief Executive
Officer of Individual. Under this employment agreement, Mr. Kolowich served as
a full-time senior executive to the Corporation from February 24, 1998 (the
effective date of the merger with Individual (the "Effective Date") until
April 30, 1998 (the "Transition Period"). From May 1, 1998 until the third
anniversary of the Effective Date, Mr. Kolowich has served and will continue
to serve as a senior executive consultant to the Corporation (the "Remaining
Term"). Furthermore, during the term of his employment agreement, the
Corporation shall take all action necessary and proper to cause Mr. Kolowich
to be elected to the Corporation's Board of Directors and to serve as the Vice
Chairman of the Corporation. Pursuant to the employment agreement, Mr.
Kolowich received a salary at the annual rate of $250,000 during the
Transition Period and receives a salary at an annual rate of $50,000 during
the Remaining Term, or until Mr. Kolowich accepts full time employment with a
third party. Mr. Kolowich is eligible to participate in the benefits plans
maintained by the Corporation during the term of the employment agreement.
Also, under the terms of the employment agreement, Mr. Kolowich will be bound
by non-competition and non-disclosure requirements. Upon the Effective Date,
the Corporation assumed all stock options then held by Mr. Kolowich all of
which became immediately exercisable, with the exception of 784 shares.
12
<PAGE>
Stock Performance Graph
The following graph compares the percentage change in the cumulative total
stockholder return on the Corporation's Common Stock during the period from the
Corporation's initial public offering on August 11, 1995 through December 31,
1998, with the cumulative total return for the Nasdaq Stock Market (U.S.
Companies) and the Nasdaq Computer and Data Processing Services Stock Index
(the "Nasdaq Computer Index"). The comparison assumes $100 were invested on
August 11, 1995 in the Corporation's Common Stock at the $15.00 initial
offering price and in each of the foregoing indices and assumes reinvestment of
dividends, if any.
Comparison of Cumulative Total Return Among
NewsEDGE Corporation, Nasdaq Stock Market Index
and Nasdaq Computer Index(1)(2)
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
8/11/95 9/29/95 12/29/95 3/29/96 6/28/96 9/30/96 12/31/96 3/31/97
------- ------- -------- ------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NewsEDGE Corporation $100 $232 $163 $245 $222 $193 $128 $ 85
- ------------------------------------------------------------------------------------------------------------------------
Nasdaq Composite Index $100 $104 $105 $110 $119 $124 $130 $122
Nasdaq Computer Index $100 $102 $106 $111 $124 $126 $131 $122
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
6/30/97 9/30/97 12/31/97 3/31/98 6/30/98 9/30/98 12/31/98
------- ------- -------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NewsEDGE Corporation $ 73 $ 68 $ 61 $ 94 $ 66 $ 58 $ 78
- -----------------------------------------------------------------------------------------------------------
Nasdaq Composite Index $145 $169 $159 $186 $191 $173 $223
Nasdaq Computer Index $156 $171 $161 $213 $236 $223 $288
- -----------------------------------------------------------------------------------------------------------
</TABLE>
- --------
(1) Prior to August 11, 1995 the Corporation's Common Stock was not publicly
traded. Comparative data is provided only for the period since that date.
This chart is not "solicited material," is not deemed filed with the
Securities and Exchange Commission and is not to be incorporated by
reference in any filings of the Corporation under the Securities Act of
1933, as amended or the Securities Exchange Act of 1934, as amended,
whether made before or after the date hereof and irrespective of any
general incorporation language in any such filing.
(2) The stock price performance shown on the graph is not necessarily
indicative of future price performance. Information used on this graph was
obtained from the Nasdaq Stock Market and the Nasdaq Stock Market and the
Nasdaq Computer indices were prepared for Nasdaq by the Center for Research
in Security Prices at the University of Chicago, a source believed to be
reliable, although the Corporation is not responsible for any errors or
omissions in such information.
13
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CERTAIN TRANSACTIONS
William Blair & Company, an affiliate of William Blair Venture Partners III
("Blair"), is a customer of the Corporation and was billed an aggregate of
approximately $95,000 in NewsEDGE subscriber fees in the year ended December
31, 1998. Ms. Carnahan, a general partner of Blair, serves on the Board of
Directors of the Corporation.
Employment Agreement with Mr. Kolowich. In connection with the Corporation's
merger with Individual, the Corporation has entered into an employment
agreement with Michael E. Kolowich, the Corporation's Vice Chairman and a
Director of the Corporation and formerly the Chairman, President and Chief
Executive Officer of Individual. Under this employment agreement, Mr. Kolowich
served as a full-time senior executive consultant to the Corporation from
February 24, 1998 (the effective date of the merger with Individual (the
"Effective Date") until April 30, 1998 (the "Transition Period"). From May 1,
1998 until the third anniversary of the Effective Date, Mr. Kolowich has
served and will continue to serve as a senior executive consultant to the
Corporation (the "Remaining Term"). Furthermore, during the term of his
employment agreement, the Corporation shall take all action necessary and
proper to cause Mr. Kolowich to be elected to the Corporation's Board of
Directors and to serve as the Vice Chairman of the Corporation. Pursuant to
the employment agreement, Mr. Kolowich received a salary at the annual rate of
$250,000 during the Transition Period and receives a salary at an annual rate
of $50,000 during the Remaining Term, or until Mr. Kolowich accepts full time
employment with a third party. Mr. Kolowich is eligible to participate in the
benefits plans maintained by the Corporation during the term of the employment
agreement. Also, under the terms of the employment agreement, Mr. Kolowich
will be bound by non-competition and non-disclosure requirements. Upon the
Effective Date, the Corporation assumed all stock options then held by Mr.
Kolowich all of which became immediately exercisable, with the exception of
784 shares.
PROPOSAL 2
APPOINTMENT OF AUDITORS
The Board of Directors proposes that the firm of Arthur Andersen LLP
("Arthur Andersen"), independent certified public accountants, be appointed to
serve as auditors for the fiscal year ending December 31, 1999. The
ratification of this selection is not required under the laws of the State of
Delaware, where the Corporation is incorporated, but the results of this vote
will be considered by the Board of Directors in selecting auditors for future
fiscal years. Arthur Andersen has served as the Corporation's accountants
since 1988. It is expected that a member of Arthur Andersen will be present at
the meeting with the opportunity to make a statement if so desired and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A
VOTE "FOR" THE RATIFICATION OF THIS SELECTION.
14
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act, as amended, requires the
Corporation's directors, executive officers and holders of more than 10% of
the Corporation's Common Stock (collectively, "Reporting Persons") to file
with the Securities and Exchange Commission initial reports of ownership and
reports of changes in ownership of Common Stock of the Corporation. Such
persons are required by regulations of the Securities and Exchange Commission
to furnish the Corporation with copies of all such filings. Based on its
review of the copies of such filings received by it with respect to the fiscal
year ended December 1998 and written representations from certain Reporting
Persons, the Corporation believes that all Reporting Persons complied with all
Section 16(a) filing requirements in the fiscal year ended December 31, 1998.
STOCKHOLDER PROPOSALS
Proposals of Stockholders intended for inclusion in the proxy statement to
be furnished to all Stockholders entitled to vote at the next Annual Meeting
of Stockholders of the Corporation must be received at the Corporation's
principal executive offices not later than December 25, 1999. In order to
curtail controversy as to the date on which a proposal was received by the
Corporation, it is suggested that proponents submit their proposals by
Certified Mail, Return Receipt Requested to NewsEDGE Corporation, 80 Blanchard
Road, Burlington, Massachusetts 01803, attention: Secretary. In general,
stockholder proposals intended to be presented at an annual meeting, including
proposals for the nomination of directors, must be received by the Corporation
45 days in advance of the mail date of the prior year's proxy statement, or by
March 8, 2000, to be considered for the 2000 Annual Meeting of the
stockholders.
INCORPORATION BY REFERENCE
To the extent that this proxy statement has been or will be specifically
incorporated by reference into any filing by the Corporation under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, the sections of the proxy statement entitled "Report of Compensation
Committee of Board of Directors on Executive Compensation" and "Stock
Performance Graph" shall not be deemed to be so incorporated, unless
specifically otherwise provided in any such filing.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Corporation, and in
addition to soliciting Stockholders by mail through its regular employees, the
Corporation may request banks, brokers and other custodians, nominees and
fiduciaries to solicit their customers who have stock of the Corporation
registered in the names of a nominee and, if so, will reimburse such banks,
brokers and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket costs. Solicitation by officers and employees of the Corporation
may also be made of some Stockholders in person or by mail, telephone or
telegraph following the original solicitation.
The contents and the sending of this proxy statement has been approved by
the Board of Directors of the Corporation.
15
<PAGE>
1418-PS-99
