MAY 30, 2000May 16, 2001
SCHEDULE 14A
(RULE 14A-101)(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
THESTREET.COM, INC.
-----------------------------------------------------------------------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 Rule 14a-11(c) or Rule 14a-12
THESTREET.COM, INC.
-------------------
(Name of Registrant as Specified In Its Charter)
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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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THE STREET.COM
14 WALL STREET, 14TH FLOOR
NEW YORK, NY 10005
MAY 30, 2000/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
May 16, 2001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders (the "Meeting") of TheStreet.com, Inc. (the "Company") to be
held at the TriBeCa Grand Hotel, Two Avenue of the Americas, New York, New
York 10013, on Wednesday,
July 12, 2000,Tuesday, June 26, 2001, commencing at 10:009:30 a.m., New York
City time. All stockholders of record as of May 16, 200010, 2001 are entitled to
vote at the Meeting. I urge you to be present in person or represented by
proxy at the Meeting.
The enclosed Notice of Annual Meeting and Proxy Statement fully
describe the business to be transacted at the Meeting, which includes (i)
the election of threetwo directors of the Company (ii) the approval of an amendment to the
Company's Amended and Restated 1998 Stock Incentive Plan (the "Plan") to
increase the number of shares of common stock available for grant pursuant to
awards under the Plan from 4,400,000 to 6,900,000 shares, and (iii)(ii) the ratification of
the appointment of Arthur Andersen LLP as the Company's independent
certified public accountants for the fiscal year ending December 31, 2000.
The Company's Board of Directors believes that increasing the number of
shares available under the Plan is in the best interests of the Company and its
stockholders because it would permit the Company to continue to award
stock-based compensation to attract and retain qualified employees.2001.
The Company's Board of Directors believes that a favorable vote on
each of the matters to be considered at the Meeting is in the best
interests of the Company and its stockholders and unanimously recommends a
vote "FOR" each such matter. Accordingly, we urge you to review the
accompanying material carefully and to return the enclosed proxy promptly.
Directors and officers of the Company will be present to help host
the Meeting and to respond to any questions that our stockholders may have.
I hope you will be able to attend. Even if you expect to attend the
Meeting, please sign, date and return the enclosed proxy card without
delay. If you attend the Meeting, you may vote in person even if you have
previously mailed a proxy.
Sincerely,
/s/ Fred Wilson
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Fred Wilson
Chairman of the Board
i
THE STREET.COM
14 WALL STREET, 14TH FLOOR
NEW YORK, NY 10005
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 12, 2000To Be Held June 26, 2001
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
(the "Meeting") of TheStreet.com, Inc. (the "Company") will be held at the
TriBeCa Grand Hotel, Two Avenue of the Americas, New York, New York 10013,
on Wednesday,
July 12, 2000,Tuesday, June 26, 2001, commencing at 10:009:30 a.m., New York City time. A
proxy card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of threetwo Class III directors for three-year terms
expiring at the Company's Annual Meeting of Stockholders in 2003;2004;
2. A proposal to amend the Company's Amended and Restated 1998 Stock Incentive
Plan (the "Plan") to increase the number of shares of Common Stock available
for grant pursuant to awards under the Plan from 4,400,00 shares to
6,900,000 shares;
3. The ratification of the appointment of Arthur Andersen LLP as the
Company's independent certified public accountants for the fiscal
year ending December 31, 2000;2001; and
4.3. Such other matters as may properly come before the Meeting or any
adjournment or postponement thereof.
The close of business on May 16, 200010, 2001 has been fixed as the record
date for determining stockholders entitled to notice of and to vote at the
Meeting or any adjournment or postponement thereof. For a period of at
least 10 days prior to the Meeting, a complete list of stockholders
entitled to vote at the Meeting shall be open to examination by any
stockholder during ordinary business hours at the offices of the Company at
14 Wall Street, 14(th) Floor, New York, NY 10005.
Information concerning the matters to be acted upon at the Meeting
is set forth in the accompanying Proxy Statement.
YOUR VOTE IS IMPORTANT. STOCKHOLDERS WHO DO NOT EXPECT TO BE
PRESENT AT THE MEETING IN PERSON ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors
/s/ Jordan Goldstein
---------------------------------------------------------------------
Jordan Goldstein
Secretary
New York, New York
May 30, 2000
ii
16, 2001
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 12, 2000
------------------------To Be Held June 26, 2001
------------------------------
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is being first mailed on or about May 30, 200016,
2001 to stockholders of TheStreet.com, Inc. (the "Company"Company" or The"The
Street.com") at the direction of the Board of Directors of the Company (the
"Board of Directors") to solicit proxies in connection with the 20002001 Annual
Meeting of Stockholders (the "Meeting"). The Meeting will be held at the
TriBecaTriBeCa Grand Hotel, Two Avenue of the Americas, New York, New York 10013,
on Wednesday, July 12, 2000,Tuesday, June 26, 2001, commencing at 10:00 a.m.,9:30 a.m, New York City time, or
at such other time and place to which the Meeting may be adjourned or
postponed.
All shares represented by valid proxies at the Meeting, unless the
stockholder otherwise specifies, will be voted (i) FOR the election of the
threetwo persons named under "Proposal I--ElectionI Election of Directors" as nominees for
election as Class III directors of the Company for three-year terms expiring
at the Company's Annual Meeting of Stockholders in 2003,2004, (ii) FOR the proposal to amend
the Company's Amended and Restated 1998 Stock Incentive Plan (the "Plan") to
increase the number of shares of Common Stock available for grant pursuant to
awards under the Plan from 4,400,000 to 6,900,000 shares, (iii) FOR the
ratification of the appointment of Arthur Andersen LLP as independent
certified accountants of the Company for the year ending December 31, 2000,2001,
and (iv)(iii) at the discretion of the proxy holders, with regard to any matter
not known to the Board of Directors on the date of mailing this Proxy
Statement that may properly come before the Meeting or any adjournment or
postponement thereof. Where a stockholder has appropriately specified how a
proxy is to be voted, it will be voted accordingly.
Any person giving a proxy pursuant to this solicitation has the
power to revoke it at any time before it is voted. It may be revoked by
filing with the Secretary of the Company at the Company's principal
executive office, 14 Wall Street, 14(th) Floor, New York, New York 10005, a written
notice of revocation or a duly executed proxy bearing a later date, or it
may be revoked by attending the meeting and voting in person. Attendance at
the meeting will not, by itself, revoke a proxy.
RECORD DATE AND VOTING SECURITIES
The close of business on May 16, 200010, 2001 is the record date (the
"Record Date") for determining the stockholders entitled to notice of and
to vote at the Meeting. As of April 28, 2000,23, 2001, the Company had issued and
outstanding approximately 25,366,31327,790,399 shares of Common Stockcommon stock held by
approximately 292268 holders of record. The Common Stockcommon stock constitutes the only
outstanding class of voting securities of the Company entitled to be voted
at the Meeting.
QUORUM AND VOTING
The presence at the Meeting, in person or by proxy relating to any
matter, of the holders of a majority of the outstanding shares of Common Stockcommon
stock is necessary to constitute a quorum. For purposes of the quorum and
the discussion below regarding the vote necessary to take stockholder
action, stockholders of record who are present at the Meeting in person or
by proxy and who abstain, including brokers holding customers' shares of
record who cause abstentions to be recorded at the Meeting, are considered
stockholders who are present and entitled to vote at the Meeting, and thus,
shares of Common Stockcommon stock held by such stockholders will count toward the
attainment of a quorum. If a quorum should not be present, the Meeting may
be adjourned from time to time until a quorum is 1
obtained. Each share of
Common Stockcommon stock is entitled to one vote with respect to each proposal to be
voted on at the Meeting. Cumulative voting is not permitted with respect to
the election of directors.
The accompanying proxy card is designed to permit each holder of
Common
Stockcommon stock as of the close of business on the Record Date to vote on each
of the matters to be considered at the Meeting. A stockholder is permitted
to vote in favor of, or to withhold authority to vote for, any or all
nominees for election to the Board of Directors, to vote in favor of or against or to abstain from
voting with respect to the proposal to amend the Company's Amended and Restated
1998 Stock Incentive Plan and to vote in favor of or
against or to abstain from voting with respect to the proposal to ratify
the appointment of Arthur Andersen LLP as the Company's independent certified public accountants
of the Company for the fiscal year ending December 31, 2000.2001.
Brokers holding shares of record for customers generally are not
entitled to vote on certain matters unless they receive voting instructions
from their customers. As used herein, "uninstructed shares" means shares
held by a broker who has not received instructions from its customers on
such matters, if the broker has so notified the Company on a proxy form in
accordance with industry practice or has otherwise advised the Company that
it lacks voting authority. As used herein, "broker non-votes" means the
votes that could have been cast on the matter in question by brokers with
respect to uninstructed shares if the brokers had received their customers'
instructions. Although there are no controlling precedents under Delaware
law regarding the treatment of broker non-votes in certain circumstances,
the Company intends to treat broker non-votes in the manner described in
the next two paragraphs.paragraph.
Under Delaware law, directors are elected by a plurality of the
outstanding shares of Common Stock,common stock, and thus, the threetwo nominees for election
as Class III directors who receive the most votes cast will be elected.
Instructions withholding authority and broker non-votes will not be taken
into account in determining the outcome of the election of directors.
Approval of the proposal to amend the Plan requires the affirmative vote of
holders of a majority of shares present at the Meeting, provided a quorum is
present.
Stockholder ratification of the selection of Arthur Andersen LLP
as the Company's independent auditors is not required by the Company's
Bylaws or otherwise. However, the Board of Directors is submitting the
selection of Arthur Andersen LLP to the stockholders for ratification as a
matter of good corporate practice. If the stockholders fail to ratify the
selection, the Audit Committee and the Board of Directors will reconsider
whether or not to retain that firm. Even if the selection is ratified, the
Audit Committee and the Board of Directors in their discretion may direct
the appointment of different independent auditors at any time during the
year if they determine that such a change would be in the best interests of
the Company and its stockholders. Approval of the proposal to ratify the
selection of Arthur Andersen LLP as the Company's independent auditors
requires the affirmative vote of holders of a majority of shares present at
the Meeting, provided a quorum is present.
2
PROPOSAL I
ELECTION OF DIRECTORS
In accordance with our Certificate of Incorporation, our Board of
Directors has been divided into three classes, denominated Class I, Class
II and Class III, with members of each class holding office for staggered
three-year terms. At each annual meeting of our stockholders, the
successors to the directors whose terms expire are elected to serve from
the time of their election and qualification until the third annual meeting
of stockholders following their election until a successor has been duly
elected and qualified.
NOMINEES FOR DIRECTOR
Each of Michael Golden, James J. CramerNominees for Director
Jerry Colonna and Martin Peretz hasDave Kansas have been nominated for election at
the Meeting to serve as a director for a three-year term expiring at our
annual meeting of stockholders in 20032004 or until his respective successor
has been duly elected and qualified. Edward F. Glassmeyer, whose term is
also expiring at the Meeting, will not be standing for re-election. It is
intended that the persons named in the proxy will vote for the election of
each of the threetwo nominees. EachMr. Colonna has informed the Board of Directors
that he intends to step down from the Board before the end of the nomineesyear;
however, he has indicated his willingness to continue to serve as a member
of the Board of Directors if elected; however, inuntil a suitable replacement is found. In case
any nomineeeither of the two nominees should become unavailable for election to the
Board of Directors prior to the Meeting for any reason not presently known
or contemplated, the proxy holders will have discretionary authority in
that instance to vote for a substitute nominee.
The nominees for election at the Meeting as Class III directors are
as follows:
MICHAEL GOLDEN,Jerry Colonna, age 50.37. Mr. Golden has served as a director of
TheStreet.com. since March 1999. Mr. Golden has worked for The New York Times
Company since 1984. Since October 1997, he has served as its vice chairman and
senior vice president. From January 1996 to October 1997, he was the New York
Times' vice president for operations development. From October 1994 to
January 1996, Mr. Golden was the executive vice president and publisher of
Tennis Magazine, a New York Times publication. From September 1991 to
October 1994, he was the executive vice president and general manager of the New
York Times' women's publishing division.
JAMES J. CRAMER, age 45. Mr. Cramer is a co-founder of and outside
contributor to TheStreet.com. Mr. CramerColonna has served as a director of
TheStreet.com since May 1998, and served as co-chairman from June1998. In 1996, to
December 1998. Mr. Cramer foundedColonna co-founded Flatiron
Partners, an Internet-focused, early-stage venture capital firm, and has
served as president anda managing partner since its inception. In February 1995, Mr.
Colonna joined CMG@Ventures, an Internet-focused venture capital firm, as a
founding partner. Prior to joining CMG@Ventures, Mr. Colonna worked for
nearly 10 years at CMP Publications, a technology publishing firm. Mr.
Colonna also serves as a director of iXL, Inc.
Dave Kansas, age 34. Mr. Kansas has served as a director of
TheStreet.com since May 1998. In addition, Mr. Kansas has served as
editor-in-chief of TheStreet.com since April 1997 and as Executive Vice
President, Chief Strategic Officer, since March 2000. He served as our
executive editor from September 1996 to April 1997. From October 1992 to
September 1996, Mr. Kansas held a variety of positions at The Wall Street
Journal, most recently as a financial markets reporter.
Current Directors
The current Class I directors of the Company, who are not standing for
re-election at the Meeting and whose terms will expire at our annual
meeting of stockholders in 2003, are as follows:
James J. Cramer, age 46. Mr. Cramer is a co-founder of
TheStreet.com and has served as a director since May 1998. In addition, Mr.
Cramer has served as markets commentator and advisor to the Company's chief
executive officer since retiring from Cramer, Berkowitz & Co., a hedge fund
since its inceptionhe founded in 1987.
MARTIN PERETZ,1987, on the last day of 2000. Mr. Cramer also served as
co-chairman of the Company from June 1996 to December 1998 and was an
outside contributor from the Company's formation in 1996 until leaving his
hedge fund.
Martin Peretz, age 60.61. Dr. Peretz is a co-founder of
TheStreet.com. Dr. Peretz has served as a director of TheStreet.com since
May 1998. He served as co-chairman of TheStreet.com from June 1996 to
December 1998. Since 1974, Dr. Peretz has served as the editor-in-chief and
chairman of The New Republic. He has been a member of the faculty of
Harvard University since 1966. Dr. Peretz also serves as a director of 11
mutual funds managed by the Dreyfus-Mellon Bank Group, and as chairman of
the board of The Electronic Newstand, Inc., a web site specializing in the
sale of magazine subscriptions, and of the Digital Learning Group, a
web-based textbook publisher.
CURRENT DIRECTORS
The current Class II directors of the Company, who are not standing for re-
election at the Meeting and whose terms will expire at our annual meeting of
stockholders in 2001, are as follows:
JERRY COLONNA, age 36. Mr. Colonna has served as a director of TheStreet.com
since May 1998. In 1996, Mr. Colonna co-founded Flatiron Partners, an
Internet-focused, early-stage venture capital firm, and has served as a managing
partner since its inception. In February 1995, Mr. Colonna joined CMG@Ventures,
an Internet-focused venture capital firm, as a founding partner. Prior to
joining CMG@Ventures, Mr. Colonna worked for nearly 10 years at CMP
Publications, a technology publishing firm. Mr. Colonna also serves as a
director of iXL, Inc.
3
EDWARD F. GLASSMEYER, age 58. Mr. Glassmeyer has served as a director of
TheStreet.com since December 1998. Mr. Glassmeyer co-founded Oak Investment
Partners, a venture capital firm with $1.6 billion of committed capital, in
November 1978. Mr. Glassmeyer serves as a director of Mobius Management
Systems, Inc., a software infrastructure provider for Internet-based bill
presentment and payment and is a director of several privately held Oak
portfolio companies in the information technology sector.
DAVE KANSAS, age 33. Mr. Kansas has served as a director of TheStreet.com
since May 1998. In addition, Mr. Kansas has served as editor-in-chief of
TheStreet.com since April 1997 and as Executive Vice President, Chief Strategic
Officer, since March 2000. He served as our executive editor from
September 1996 to April 1997. From October 1992 to September 1996, Mr. Kansas
held a variety of positions at The Wall Street Journal, most recently as a
financial markets reporter.
The current Class III directors of the Company, who are not standing for
re-election at the Meeting and whose terms will expire at our annual
meeting of stockholders in 2002, are as follows:
THOMASThomas J. CLARKE, JR.Clarke, Jr., age 43.44. Mr. Clarke joined TheStreet.com in
October 1999 as president and chief operating officer and was appointed
chief executive officer and made a director of the Company in November
1999. From 1984 through 1998, Mr. Clarke served in several capacities at
Technimetrics Inc. (now known as Thomson Financial Investor Relations),
most recently as chief executive. During his tenure, he significantly
enhanced the value of the company, culminating in its sale to Thomson Corp.
in 1998. Mr. Clarke is a business information adviser for Plum Holdings
L.P., a venture capital fund based in Philadelphia that focuses on
early-stage media companies.
FRED WILSON,Fred Wilson, age 38.39. Mr. Wilson has served as a director of
TheStreet.com since May 1998 and as Chairman of our Board of Directors
since November 1999. In 1996, Mr. Wilson co-founded Flatiron Partners, an
Internet-focused, early-stage venture capital firm, and has served as a
managing partner since its inception. Prior to Flatiron Partners, Mr.
Wilson worked at Euclid Partners, an early stage venture capital firm, for
10 years where he served as general partner from 1991 to 1996.
LINDA SRERE,Douglas A. McIntyre, age 44. Ms. Srere46. Mr. McIntyre has served as a director
of the TheStreet.com since July 1999. Ms. Srere, whoJanuary 2001. Mr. McIntyre has been vice chairman and chief client officer
of Young & Rubicam Inc. ("Y&R"), a diversified global marketing and
communications company, since September 1998, has worked for Y&R since
September 1994, when she first joinedserved as the company as executive vice
president and director of business development. Ms. Srere became group managing director
in 1996, where she was responsible for directing Y&R's Advertising global new
business efforts, and in 1997, was named chief executive officer of Y&R'sOn2.com, Inc., since April 2000.
Prior to On2.com, he served as president and chief executive officer of
Future Source/Bridge LLC, president of Switchboard.com, and president and
publisher of FinancialWorld magazine. Mr. McIntyre is also the president of
the Harvard Advocate Trustees, Inc. and a member of the Subcommittee on
Foundations and Corporations of New York office, becomingHospital-Cornell Medical Center.
The Board of Directors recommends that stockholders vote FOR each
named nominee.
Executive Officers
The following sets forth certain information regarding executive
officers of the first female CEOCompany. Information pertaining to Mr. Clarke, who is both
a director and an executive officer of the Company, may be found in the
Company's 75-year history.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH NAMED
NOMINEE.
BOARD OF DIRECTORS AND COMMITTEES
GENERAL.section entitled "Current Directors", and information pertaining to Mr.
Kansas, who is both a director and an executive officer of the Company, may
be found in the section entitled "Nominees for Director".
Lisa Mogensen, age 37, Vice President and Chief Financial Officer.
Ms. Mogensen joined TheStreet.com in December 1999 as vice president of
corporate development. In April 2000 she was named interim chief financial
officer and in July 2000 was appointed chief financial officer of the
Company. From April 1997 through December 1999, Ms. Mogensen was with NBC,
serving most recently as senior finance director for business development
and strategic planning. From 1996 through 1997, Ms. Mogensen served as
director of financial planning and analysis for American Sky Broadcasting,
a subsidiary of News Corporation.
Jordan Goldstein, age 34, Vice President, General Counsel and
Secretary. Mr. Goldstein joined TheStreet.com in October 1999 as associate
counsel. In April 2000 he was named acting general counsel and appointed
corporate secretary of the Company and in July 2000 was made vice president
and general counsel. From June 1997 through October 1999, Mr. Goldstein was
an associate with the law firm of Proskauer Rose LLP. From November 1995
through May 1997, Mr. Goldstein was an associate with the law firm of
Rivkin Radler & Kremer LLP.
Board of Directors and Committees
General. The Company's business is managed under the direction of the Board
of Directors. The Board of Directors meets on a regularly scheduled basis
during the year to review significant developments affecting the Company
and to act on matters requiring Board of Directorsthat in accordance with good corporate governance
require the approval of the Board of Directors. It also holds special
meetings when an important matter requires action of the Board of Directors
between scheduled meetings. The Board of Directors met or acted by written
consent nine17 times during the year ended December 31, 1999.2000. During 1999,2000, each
member of the Board of Directors participated in at least 75% of all board
and applicable committee meetings held during the period for which he or
she was a director.director, except Linda Srere.
The Board of Directors has established an Audit Committee and a
Compensation Committee (the "Compensation Committee") to devote attention to specific subjects and to
assist the Board of Directors in the discharge of its responsibilities. The
functions of those committees, their current members and the number of
meetings held during 19992000 are set forth below.
4
AUDIT COMMITTEE.Audit Committee. The Audit Committee reviews the Company's
internal accounting procedures and considers and reports to the Board Ofof
Directors with respect to other auditing and accounting matters, including
the selection of the Company's independent auditors, the scope of annual
audits, fees to be paid to the Company's independent auditors and the
performance of the Company's independent auditors. TheConsistent with the new
Nasdaq audit committee structure and membership requirements, the Audit
Committee currently consistsis comprised of three members: Mr. Wilson, Mr. Glassmeyer and Mr.
Wilson.McIntyre. The Audit Committee met twicefour times during 1999.
COMPENSATION COMMITTEE.2000. The Audit
Committee operates under a written charter adopted by the Board, which is
included in this proxy statement as Appendix A. Mr. Glassmeyer, whose term
is expiring at the Meeting, will not be standing for re-election. The Board
of Directors has commenced the process of finding a new director who will
serve on the Audit Committee.
Compensation Committee. The Compensation Committee reviews and recommends
to the Board of Directors the salaries, benefits and stock option grants of
all employees, consultants, directors and other individuals compensated by
the Company. The Compensation Committee also administers the Company's
stock option and other employee benefits plans. The Compensation Committee
currently consists of Mr. Glassmeyer and Mr. Colonna. Mr. Glassmeyer, whose
term is expiring at the Meeting, will not be standing for re-election. Mr.
McIntyre has agreed to serve on the Compensation Committee. The
Compensation Committee met sixfive times during 1999.
OTHER.2000.
Other. The Company does not have a nominating committee. The functions
customarily attributable to such a committee are performed by the Board of
Directors as a whole.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONCompensation Committee Interlocks and Insider Participation
The Compensation Committee makes all compensation decisions. Prior
to the formation of the Compensation Committee in June 1998, the Company's
Board of Directors made decisions relating to compensation of the Company's
executive officers. None of the Company's executive officers serves as a
member of the Board Of Directors or compensation committee of any entity
that has one or more of its executive officers serving as a member of the
Company's Board of Directors or Compensation Committee. The Company's
Compensation Committee currently consists of Mr. Colonna and Mr.
Glassmeyer, neither of whom has ever been an officer or employee of the
Company, Mr. Cramer served as a member of theCompany.
Compensation Committee from June 1998 to February 1999, when Mr. Glassmeyer was
appointed to the Compensation Committee. During his tenure on the Compensation
Committee, Mr. Cramer, an outside contributor to the Company, participated in
all decisions relating to compensation of the Company's executive officers, but
was excluded from discussions by the Board of Directors
regarding his own
compensation.
COMPENSATION OF DIRECTORS
In 1999,2000, one of our directors, Linda Srere, received cash
compensation in the amount of $2,500 per fiscal quarter, for an aggregate of $5,000 for serving on the
Board of Directors. Ms. Srere received an aggregate of $7,500 in 2000, in
respect of her service as a director during the first three quarters of
2000. Ms. Srere resigned as a director of the Company, effective as of
October 16, 2000. All directors are reimbursed for reasonable travel
expenses incurred in connection with attending Board of Directors and
committee meetings. In addition,The Company does not provide any additional
compensation to directors for serving on committees of the Board of
Directors. Although none of our directors received any options to purchase
common stock in June of 1999,2000, in February, 2001, each of our non-employee directors, wereother than
Mr. Clarke and Mr. Kansas, was granted options to purchase 7,50015,000 shares of
the Company's Common Stock.common stock. The exercise price of these options is $25.81$3.125
per share, which was the fair market value of the Common Stockour common stock on the date
of grant. These options, which have a term of five years, will become
exercisable in their entirety on May 11, 2000,February 13, 2002, the first anniversary
of the Company's initial public offering. Ms. Srere, who becamedate of grant, provided that the individual is still serving as a
director of the Company on July 20, 1999, received options to purchase 15,000 of Common Stock
on that date, at an exercise price of $33.94 per share.such date.
See "Certain Relationships and Related Transactions" for a
discussion of certain agreements between the Company and certain directors
of the Company.
PROPOSAL II
PROPOSED AMENDMENT TO THE COMPANY'S
AMENDED AND RESTATED 1998 STOCK INCENTIVE PLAN
On May 6, 1998, the stockholders of the Company approved the adoption of the
Company's 1998 Stock Incentive Plan, which was amended and restated on
November 1, 1999. On November 5, 1999, the Company filed a registration
statement on Form S-8 to register the shares of Common Stock that
5
had then been issued pursuant to option awards made under the Plan as well as
the shares of Common Stock that were then available for grant pursuant to awards
under the Plan. Since then, of the 4,400,000 shares of Common Stock authorized
for issuance under the Plan, 4,006,373 shares have been issued upon the exercise
of options, or are reserved for issuance with respect to future awards. In order
to support the Company's long-term incentive compensation programs and to
attract and retain employees, consultants and directors, additional shares are
required. Accordingly, the Board of Directors has approved and recommends to
stockholders the reservation of an additional 2,500,000 shares of Common Stock
for issuance under the Plan.
The following is a description of the material terms of the Plan, and as
such is qualified by the actual terms of the Plan, the full text of which, as
proposed to be amended, is set forth in Exhibit A attached hereto. In
Exhibit A, the materials that would be deleted from the Plan pursuant to the
proposed amendment are stricken through, and the material that would be added by
such amendment are double underlined. If the amendment is not approved by the
stockholders, the Plan will continue in effect under the present terms. The Plan
is administered by the Compensation Committee. Employees, consultants and
directors of the Company and its related entities are eligible to participate in
the Plan, with the Compensation Committee having the discretion to make all
determinations with respect to the Plan's administration. The Plan may be
amended by the Board of Directors, with stockholder approval where necessary to
satisfy regulatory requirements.
OPTIONS
Options granted under the Plan will either be incentive stock options, as
defined under Section 422 of the Code, or nonstatutory stock options. The
purchase price of an option will be determined in the discretion of the
Compensation Committee. Options will be exercisable at such times and pursuant
to such conditions as are established by the Compensation Committee. Payment of
the purchase price will be made using such methods as the Compensation Committee
may determine. Following the termination of an optionee's employment with the
Company or a related company, the option will be exercisable to the extent
determined by the Compensation Committee.
RESTRICTED STOCK AWARDS
Each restricted stock award will specify the number of shares of restricted
stock to be awarded, the price, if any, to be paid by the recipient of the
restricted stock and the date or dates on which, or the conditions upon the
satisfaction of which, the restricted stock will vest. The grant and/or the
vesting of restricted stock may be conditioned upon the completion of a
specified period of service, upon the attainment of specified performance
objectives or upon such other criteria as the Compensation Committee may
determine. The Compensation Committee may provide that the employee will have
the right to vote or receive dividends on restricted stock. Unless the
Compensation Committee provides otherwise, stock received as a dividend on, or
in connection with a stock split of, restricted stock will be subject to the
same restrictions as the restricted stock.
TAX OFFSET PAYMENTS
The Compensation Committee may provide for a tax offset payment by the
Company to an employee with respect to one or more awards granted under the
Plan. The tax offset payment will be in an amount specified by the Compensation
Committee, which will not exceed the amount necessary to pay the federal, state,
local and other taxes payable with respect to the applicable award and the
receipt of the tax offset payment, assuming that the employee is taxed at the
maximum tax rate applicable to such income. The tax offset payment will be paid
solely in cash.
6
NEW PLAN BENEFITS
Since Awards under the Plan are made in the discretion of the Compensation
Committee, neither the awards that will be made in 2000 nor the awards that
would have been made in 1999 had the amendment been in effect are reasonably
ascertainable.
FEDERAL INCOME TAX TREATMENT
The following discussion of certain relevant income tax effects applicable
to options and restricted stock granted under the Plan is a brief summary only,
and reference is made to the Code and the regulations and interpretations issued
thereunder for a complete statement of all relevant federal tax consequences.
This summary is not intended to be exhaustive and does not describe state, local
or foreign tax consequences.
A participant generally will not be taxed upon the grant of a nonstatutory
stock option. Rather, at the time of exercise of such option, the optionee will
recognize ordinary income for federal income tax purposes in an amount equal to
the excess of the fair market value of the shares purchased over the option
price. The Company will generally be entitled to a tax deduction at such time
and in the same amount that the optionee recognizes ordinary income.
An optionee will not be in receipt of taxable income upon the grant or
timely exercise of an incentive stock option. Exercise of an incentive stock
option will be timely if made during its term and if the optionee remains an
employee of the Company or a subsidiary at all times during the period beginning
on the date of grant of the option and ending on the date three months before
the date of exercise (or one year before the date of exercise in the case of a
disabled optionee). The tax consequences of an untimely exercise of an incentive
stock option will be determined in accordance with the rules applicable to
nonstatutory stock options. The Company is not entitled to any tax deduction in
connection with the grant or exercise of an incentive stock option. However, if
the optionee disposes of stock within the holding periods described above, the
Company may be entitled to a tax deduction for the amount of ordinary income, if
any, realized by the optionee.
An awardee generally will not be taxed upon the grant of a restricted stock
award, but rather will recognize ordinary income in an amount equal to the fair
market value of the Company's common stock at the time the shares are no longer
subject to a substantial risk of forfeiture. The Company will be entitled to a
deduction at the time when, and in the amount that, the awardee recognizes
ordinary income.
On April 28, 2000, the closing price of the Company's stock as reported on
the Nasdaq National Market was $6.3125 per share.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSED
AMENDMENT TO THE PLAN.
PROPOSAL III
INDEPENDENT AUDITORS
The Board of Directors has selected Arthur Andersen LLP as independent
auditors to examine the Company's accounts for the fiscal year ending
December 31, 2000 and has further directed that management submit the selection
of independent auditors for ratification by the stockholders at the Meeting.
Representatives of Arthur Andersen LLP are expected to be present at the
Meeting, will have the opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSED
RATIFICATION OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT AUDITORS.
7
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLESummary Compensation Table
The following table sets forth the compensation earned for all
services rendered to the Company in all capacities during 2000 and 1999 by
(i) the two individuals
who served as our current chief executive officer, (ii) our three most highly
compensated executive officers, other than our chief executive officers,officer, who
earned more than $100,000 in 19992000 and who were serving as executive
officers at the end of 1999,2000, and (iii) one individual, Mr. Simon Clark, who ceased to be antwo former executive officer of the Company in February 1999officers
(collectively, the "Named Executive Officers").
As of March 2000, Mr. Michael Zuckert ceased to be an
executive officer of the Company and as of April 2000, Mr. Kothari ceased to be
an executive officer of the Company.
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
------------------- -------------------------
SECURITIES
FISCAL OTHER ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(#)
-Annual Compensation Long-Term
Compensation
Awards
Name and Principal Position Fiscal Salary Bonus Other Annual Securities
--------------------------- -------- -------- --------Year ------ ----- Compensation Underlying
---- ------------ Options(#)
----------
Kevin W. English............................... 1999 $372,808 $110,000 $56,632(2) 345,350
Chairman of the Board, 1998 $ 71,791 $ 25,000 521,316Thomas J. Clarke................................ 2000 $356,000 $150,000 475,000
Chief Executive Officer and President(1)
Thomas J. Clarke...............................Director 1999 $ 67,250 $ 25,000$68,833 $25,000 500,000
Dave Kansas..................................... 2000 $245,833 $101,488 (5) 20,000
Executive Vice President, Editor-in-Chief, 1999 $193,000 $40,500 50,000
Chief ExecutiveStrategic Officer and Director(3) 1998 -- -- --
Dave Kansas.................................... 1999 $193,000 $ 40,500 50,000
Editor-in-Chief and Director
1998 $130,000 $ 78,769 105,758
Paul Kothari................................... 1999 $222,423 $ 40,000 133,333Lisa Mogensen................................... 2000 $162,500 $40,000 43,500
Chief Financial Officer and Vice President(5) 1998 -- -- --
Michael Zuckert................................President (1) 1999 $204,875 $ 40,000 133,333$6,510 12,000
Jordan Goldstein................................ 2000 $148,750 $40,000 24,250
Vice President and General Counsel(6) 1998 -- -- --
Simon Clark....................................Counsel(2) 1999 $111,667 $ 10,000 16,666$22,869 $24,500 11,000
Paul Kothari.................................... 2000 $83,333
Chief Financial Officer and 1998 $150,000 $ 25,944 30,303
Vice President--Operations(7)President(3) 1999 $202,423 $40,000 133,333
Michael Zuckert................................. 2000 $62,500
Vice President and General Counsel(4) 1999 $204,875 $40,000 133,333
- -----------
(1) Ms. Mogensen joined TheStreet.com in December 1999 as vice president of corporate development. In April
2000 she was named interim chief financial officer and in July 2000 was appointed chief financial officer
of the Company.
(2) Mr. Goldstein joined TheStreet.com in October 1999 as associate counsel. In April 2000 he was named acting
general counsel and in July 2000 was made vice president and general counsel of the Company.
(3) Mr. Kothari joined TheStreet.com in February 1999 as Chief Financial Officer. His employment with the
Company ended on April 30, 2000.
(4) Mr. Zuckert joined TheStreet.com in February 1999 as Vice President and General Counsel. His employment
with the Company ended on March 29, 2000.
(5) Consists of the forgiveness of a loan from the Company to Mr. Kansas in September 2000 in the amount of
$60,000, and $41,488 in related taxes due on Mr. Kansas's behalf.
- ------------------------
(1) Mr. English's employment with TheStreet.com ended in November 1999.
(2) Mr. English received a total of $56,632 in compensation not properly
categorized as salary or bonus. This figure is primarily comprised of
$43,000 for the use of a Company apartment from January through
October 1999 at a fair market rental value of $4,300 per month.
(3) Mr. Clarke joined TheStreet.com in October 1999 as President and Chief
Operating Officer and was appointed Chief Executive Officer and made a
director of the Company in November 1999.
(4) Mr. Clark served as our chief financial officer and vice
president--operations until February 1999, when he became vice president and
general manager--international markets of TheStreet.com. Mr. Clark's
employment with TheStreet.com ended in August 1999.
(5) Mr. Kothari joined TheStreet.com in February 1999 as Chief Financial
Officer. His employment with TheStreet.com ended at the end of April 2000.
(6) Mr. Zuckert joined TheStreet.com in February 1999 as Vice President and
General Counsel. His employment with TheStreet.com ended as of March 2000.
(7) Mr. Clark's employment with TheStreet.com ended in February 1999.
8
OPTION GRANTS IN FISCAL YEAR 19992000
The following table sets forth information regarding stock options
granted to our Named Executive Officers in 1999.2000. We have never granted any
stock appreciation rights.
INDIVIDUAL GRANTS(1)
----------------------
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF
NUMBER OF GRANTED STOCK PRICE
SECURITIES TO EXERCISE APPRECIATION
UNDERLYING EMPLOYEES PRICE FOR OPTION TERM(3)
OPTIONS IN FISCAL PER EXPIRATION ---------------------
NAME GRANTED(#) YEAR(%Individual Grants(1)
Name Number of Percent of Exercise Expiration Potential Realizable
Securities Total Price ($) Per Date Value at Assumed
Underlying Options Share Annual Rates of
Options Granted to Stock Price
Granted(#) Employees Appreciation
in Fiscal for Option Term(3)
Year(%)(2)
SHARE DATE 5% ($) 10% - ---- ---------- ---------- --------- ---------- --------- ---------($)
------ -------
Kevin W. English(4)..................... 262,017 9.80 3.00 3/24/04 4,614,630 6,028,942
83,333 3.12 3.00 3/24/04 1,467,656 1,917,470
Thomas J. Clarke........................ 19,940 0.75 20.06 10/17/04 110,512 244,202
230,060 8.60 20.06 10/17/04 1,275,040 2,817,506
250,000 9.35 14.75Clarke..... 150,000 (4) 7.38 6.0000 4/18/05 248,653 549,459
325,000 (4) 15.98 2.5000 11/30/05 224,479 496,039
Dave Kansas.......... 20,000 0.98 1.6875 12/07/04 1,018,788 2,251,256
Dave Kansas............................. 50,000 1.87 3.00 12/31/03 41,442 91,57721/05 9,325 20,605
Lisa Mogensen........ 25,000 (4) 1.23 6.5000 4/6/05 44,896 99,208
18,500 (4) 0.91 2.5000 11/30/05 12,778 28,236
Jordan Goldstein..... 12,500 (4) 0.61 6.5000 4/6/05 22,448 49,604
11,750 (4) 0.58 2.5000 11/30/05 8,116 17,934
Paul Kothari............................ 133,333 4.99 3.00 2/16/04 1,642,046 2,176,811Kothari......... -- -- -- -- -- --
Michael Zuckert......................... 133,333 4.99 3.00 2/15/04 1,642,046 2,176,811
Simon Clark............................. 16,666 0.62 3.00 12/31/03 13,814 30,524
- ------------------------Zuckert...... -- -- -- -- -- --
- -----------
(1) All options were granted under the Company's Amended and Restated 1998 Stock Incentive Plan. The options
shown in this table, except as otherwise indicated below, become exercisable at a rate of 25% annually
over four years from the date of grant.
(2) In 2000, we granted options to employees to purchase an aggregate of 2,063,266 shares of common stock,
including options granted to outside contributors.
(3) Potential realizable value is based on the assumption that our common stock appreciates at the annual rate
shown, compounded annually, from the date of grant until the expiration of the five-year term. These
numbers are calculated based on Securities and Exchange Commission requirements and do not reflect our
projection or estimate of future stock price growth. Potential realizable values are computed by
multiplying the number of shares of common stock subject to a given option by the fair market value on the
date of grant, as determined by our Board of Directors, assuming that the aggregate stock value derived
from that calculation compounds at the annual 5% or 10% rate shown in the table for the entire five-year
term of the option and subtracting from that result the aggregate option exercise price.
(4) These options have a vesting schedule as follows: 25% on the date of grant; 25% six months following the
date of grant; 25% 18 months following the date of grant; and 25% 30 months following the date of grant.
(2) In 1999, we granted options to employees to purchase an aggregate of
2,673,875 shares of common stock.
(3) Potential realizable value is based on the assumption that our common stock
appreciates at the annual rate shown, compounded annually, from the date of
grant until the expiration of the five or ten-year term as applicable. These
numbers are calculated based on Securities and Exchange Commission
requirements and do not reflect our projection or estimate of future stock
price growth. Potential realizable values are computed by multiplying the
number of shares of common stock subject to a given option by the fair
market value on the date of grant, as determined by our Board of Directors,
assuming that the aggregate stock value derived from that calculation
compounds at the annual 5% or 10% rate shown in the table for the entire
five or ten-year term of the option and subtracting from that result the
aggregate option exercise price.
(4) Pursuant to agreements by and between Mr. English and the Company, 75% of
the shares underlying the remaining unvested options held by Mr. English
vested fully and were exercised by Mr. English. The remaining 216,665
options held by Mr. English were terminated.
9
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
The following table sets forth information concerning the exercise
of stock options during the fiscal year ended December 31, 19992000 by our
Named Executive Officers and the fiscal year-end value of unexercised
options.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN THE-MONEY OPTIONS AT
SHARES DECEMBERName Shares Value Exercisable Unexercisable Exercisable Unexercisable
Acquired on Realized
Exercise #
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at
Options at December 31, 1999 DECEMBER2000 (1)
December 31, 1999
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE # REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ---------- ----------- ------------- ----------- -------------2000
Kevin W. English(1).................... 650,000 11,615,541
Thomas Clarke....... -- -- 206,250 768,750 30,469 91,406
Dave Kansas......... -- -- 32,500 67,500 48,613 60,488
Lisa Mogensen....... -- -- 13,875 41,625 1,734 5,203
Jordan Goldstein.... -- -- 8,812 26,438 1,101 3,305
Paul Kothari......... 53,333 186,666 -- -- -- --
Thomas Clarke.......................... -- -- -- 500,000 -- $1,109,375
Dave Kansas............................ -- -- 7,500 72,500 $143,681 $1,240,419
Simon Clark............................Michael Zuckert...... 33,333 111,895 -- -- -- --
-- --
Paul Kothari........................... -- -- -- 133,333 -- $2,158,328
Michael Zuckert........................ -- -- -- 133,333 -- $2,158,328- -----------
(1) Based on TheStreet.com's share price as of December 31, 2000, which was equal to $2.875 per share.
- --------------------------
(1) PursuantStock Incentive Plan
The Company adopted the 1998 Stock Incentive Plan on May 6, 1998,
which plan was amended and restated on November 1, 1999 and on July 12,
2000(the "Plan). The Plan provides for the granting of incentive stock
options, non-qualified stock options, restricted stock and tax offset
payments. The Plan is administered by our Compensation Committee. The total
number of shares of our common stock that may be issued under the Plan to
agreementsour employees, directors and consultants (or of any entity in which we own
at least a 20% beneficial interest) is 6,900,000. The terms and conditions
of options and restricted stock will be set forth by the Compensation
Committee in each individual award agreement. The Compensation Committee
may designate an award as a "performance award" by making its grant or
vesting subject to the achievement of performance goals established by the
Compensation Committee. The Compensation Committee may also pay an awardee
a tax offset payment as compensation for some or all of the taxes that the
awardee owes with respect to an award. In the event of a change of control,
if so determined by the Compensation Committee at the time of grant or by
amendment (with the holder's consent) of the grant, all outstanding options
will vest and between Mr. Englishbecome fully exercisable and the Company, 75%restrictions applicable to
any outstanding restricted stock awards shall lapse and the shares shall be
deemed fully vested. Under the Plan, a change of control occurs when there
is:
o an acquisition in which a majority of our common stock is acquired by
an entity or person owning less than 5% of our total common stock
outstanding prior to the acquisition;
o an election of members of the board of directors in which a majority
of the board members after the election were not members of the board
on the date of option grant;
o a merger or consolidation with another corporation where our
stockholders immediately prior to the merger or consolidation no
longer comprise a majority of the voting shares underlyingof the remaining unvested options held by Mr. English
vested fully and were exercised by Mr. English. The remaining 216,665
options held by Mr. English were terminated.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATIONsurviving
corporation; or
o a sale of all or substantially all of our assets.
Report of the Compensation Committee on Executive Compensation
The Compensation Committee sets the salaries and other
compensation of the Company's executive officers and other key employees,
and is responsible for the administration of the Company's stock option plan.
OVERVIEW AND PHILOSOPHY.Plan.
Overview and Philosophy. The Company is engaged in an industry in which
executives and key employees are the principal productive assets. The
Company faces an intensely competitive market for such persons. In order to
succeed, the Company believes that it must be able to attract and retain
qualified executives. The Company's compensation philosophy for executive
officers is to provide them with competitive compensation opportunities
based upon their contribution to the Company's growth and financial success
as well as their own level of personal performance. A portion of each
executive officer's compensation, therefore, is contingent upon the
Company's performance. Accordingly, the compensation package for each
executive officer is comprised of the following two elements:
-(i) cash compensation, comprised principally of annual base salary
and bonuses tied to the achievement of performance goals, financial and
otherwise; and
-(ii) equity compensation, comprised principally of stock option
awards that provide rewards for increases in the value of the Company's
Common Stock.common stock.
The Board of Directors believes that as a long-term matter, the
Company's executive compensation policies should attempt to ensure that the
Company's executives and other key employees are compensated at levels
that, through a combination of generous cash and equity-based compensation
components, effectively preempt competitive outside offers. The
Compensation Committee is charged with the responsibility for carrying out
this executive compensation philosophy in individual compensation
decisions.
10
During 1999,2000, the Compensation Committee had primary responsibility
for determining executive cash compensation levels. The Compensation
Committee, as part of its review and consideration of executive cash
compensation, took into account, among other things, the following goals:
-(i) providing incentives and rewards to attract and retain highly
qualified and productive people;
-(ii) motivating employees to high levels of performance,
differentiating individual executives' pay based on performance;
-(iii) preempting external competitive offers; and
-(iv) ensuring internal equity.
To achieve these goals, the Company's executive compensation
policies integrate annual base compensation with cash bonuses based on
operating performance with a particular emphasis on attainment of planned
objectives, and on individual initiatives and performance.
The Compensation Committee has primary responsibility for
determining awards of stock options as part of executive compensation. The
Compensation Committee believes that the grant of stock options aligns
executive and stockholder long-term interests by creating a strong and
direct link between executive compensation and stockholder returns and
enables executives to develop and maintain a significant interest in the
long-term growth and profitability of the Company.
COMPENSATION OF EXECUTIVE OFFICERS.Compensation of Executive Officers. Compensation of the Company's executive
officers is comprised of base salary, annual cash incentive compensation,
long-term incentive compensation in the form of stock options and various
other benefits. Each element has a somewhat different purpose and all of
the determinations of the Compensation Committee regarding the appropriate
form and level of executive compensation are ultimately judgments based on
the Compensation Committee's ongoing assessment of the internet content
industry, the Company and the Company's executive officers.
Base salaries for executive officers in 19992000 were generally
determined on an individual basis by evaluating each executive's scope of
responsibility, performance, prior experience and salary history, as well
as the salaries for similar positions at comparable companies. Bonuses were
generally established based on a percentage of base salary as well as the
attainment of personal and company-wide financial and strategic objectives.
The Compensation Committee has not established formulas or assigned
specific weights to any of these factors when making their determinations.
In 1999,2000, stock options were granted to certain executive officers as hiring
incentives and to aid in
the retention of executive officers.their retention. The Compensation Committee may also grant additional stock
options to executive officers for other reasons. In 19992000, as part of its
annual review and consideration of awards of stock options, the
Compensation Committee considered, among other things, the same goals as
those used in awarding cash compensation and the additional goal of
aligning the interests of executives with the interests of the Company and
its stockholders by ensuring that executives have a direct and continuing
stake in the long-term success of the Company. Stock options generally become
exercisable over a four-year period and are granted at
a price that is equal to the fair market value of the Company's Common Stockcommon
stock on the date of grant. StockAlthough historically, the Company's grants of
stock options have generally become exercisable over a four-year period, in
2000, in order to aid in executive retention, the Compensation Committee
made certain grants with the following vesting schedule: 25% on the date of
grant; 25% six months following the date of grant; 25% 18 months following
the date of grant; and 25% 30 months following the date of grant. In all,
options to purchase 1,178,682562,750 shares of stock were granted to executive
officers in 1999.
COMPENSATION OF CHIEF EXECUTIVE OFFICER.2000.
Compensation of Chief Executive Officer. The 19992000 compensation of Kevin W.
English, who wasThomas
Clarke, the Company's chairman of the Board of Directors, chief executive officer, and president until November 1999, was determined by the
Compensation Committee in a manner consistent with the factors considered
in determining the compensation of executive officers, as described above.
Pursuant
to an employment agreement entered into by Mr. English with the Company in
October 1998, Mr. English received an annual base salary of $350,000 in 1999 and
a bonus of $110,000. Mr. English also received stock options pursuant to his
employment agreement with the Company.
11
In determining the compensation for Thomas Clarke, who replaced Mr. English
as the Company's chief executive officer in November 1999, the Compensation
Committee used the factors described above for the compensation of executive
officers. Mr. Clarke's compensation is described in detail in the section below
entitled "Certain Relationships" Employment Agreements with Named Executive Officers and
Related Transactions--Employment
Agreements.Change-in-Control Arrangements."
INTERNAL REVENUE CODE SECTION 162(M) LIMITATION.Internal Revenue Code Section 162(m) Limitation. As a result of Section
162(m) of the Internal Revenue Code, which was enacted into law in 1993,
the Company will not be allowed a federal income tax deduction for
compensation paid to certain executive officers to the extent that
compensation exceeds $1 million per officer in any one year. This
limitation will apply to all compensation paid to the covered executive
officers that is not considered to be performance-based. Compensation which
does qualify as performance-based compensation will not have to be taken
into account for purposes of this limitation. Historically, the combined
salary and bonus of each executive officer has been below the $1.0 million
limit.
This report is submitted by the members of the Compensation
Committee:
Ed Glassmeyer
Jerry Colonna
Employment Agreements with Named Executive Officers and Change-in-Control
Arrangements
In December 1999, the Company entered into a two-year employment
agreement with Thomas J. Clarke, Jr., as President and Chief Executive
Officer, superseding a October 1999 agreement employing him as President
and Chief Operating Officer. This agreement provides for an annual salary
of $350,000 and a guaranteed annual bonus of no less than $50,000. The
annual salary may be increased during the term of the agreement in the sole
discretion of the Compensation Committee. Under the agreement, the Company
agreed to grant Mr. Clarke an option to purchase 250,000 shares of common
stock at an exercise price of $14.75, in addition to the option to purchase
250,000 shares at $20.06 granted in connection with the October 1999
agreement.
In the event Mr. Clarke's employment is terminated by the Company
without "Cause" or by Mr. Clarke with "Good Reason" at any time during the
term, he will be entitled to receive his annual salary for an additional 12
month period, or, with the mutual agreement of Mr. Clarke and the Company,
in a lump sum payment appropriately discounted for the time value of money.
Mr. Clarke's employment agreement generally defines "Cause" to include
willful misconduct or gross negligence, unauthorized disclosure of
confidential information harmful to the Company, or conviction of a crime
involving fraud, dishonesty or moral turpitude. "Good Reason" is defined to
include a material adverse change in Mr. Clarke's functions, duties, or
responsibilities in his position with the Company and a reduction in his
compensation during the term of his employment with the Company. In
addition, Mr. Clarke is bound by a non-compete clause from the commencement
date of his employment agreement through the first twelve months after the
cessation of Mr. Clarke's employment. The employment agreement terminates
in December 2001. The options granted to Mr. Clarke provide that if,
following a change of control of the Company, his employment is terminated
by the Company without Cause or his duties or responsibilities are
significantly reduced (other than solely by virtue of the Company being
acquired and made part of a larger entity), one-half of the then unvested
portion of his options shall immediately vest and become exercisable.
In April 2000, the Company entered into a two-year employment
agreement with Dave Kansas, as Editor-in-Chief and Chief Strategic Officer.
This agreement, which replaced an earlier employment agreement that expired
in August 1999, provides for an annual salary of $250,000 and an annual
bonus in the sole discretion of the Compensation Committee. The annual
salary may be increased during the term of the agreement in the sole
discretion of the Compensation Committee. In the event Mr. Kansas's
employment is terminated by the Company without "Cause" or by Mr. Kansas
with "Good Reason" at any time during the term, he will be entitled to
receive his annual salary for an additional 12 month period, or, with the
mutual agreement of Mr. Kansas and the Company, in a lump sum payment
appropriately discounted for the time value of money. Mr. Kansas's
agreement generally defines "Cause" to include willful misconduct or gross
negligence, unauthorized disclosure of confidential information harmful to
the Company, or conviction of a crime involving fraud, dishonesty or moral
turpitude. "Good Reason" is defined to include a material adverse change in
Mr. Kansas's functions, duties, or responsibilities in his position with
the Company and a reduction in his compensation during the term of his
employment with the Company. In addition, Mr. Kansas is bound by a
non-compete clause from the commencement date of his employment agreement
through the first twelve months after the cessation of Mr. Kansas's
employment. The employment agreement terminates in April 2002. In
connection with the execution of Mr. Kansas's new employment agreement, the
Company agreed to amend option agreements with Mr. Kansas dated July 1,
1998 and January 1, 1999, to provide that if, following a change of control
of the Company, his employment is terminated by the Company without Cause
or his duties or responsibilities are significantly reduced (other than
solely by virtue of the Company being acquired and made part of a larger
entity), one-half of the then unvested portion of such options shall
immediately vest and become exercisable.
In February 1999, the Company entered into a two-year employment
agreement with Paul K. Kothari, as vice-president and chief financial
officer. This agreement provided for an annual salary of $225,000 and a
guaranteed annual bonus of $25,000. The annual salary could be increased
during the term of the agreement in the sole discretion of the Compensation
Committee. In addition, Mr. Kothari is bound by a non-compete clause from
the commencement date of the employment agreement through the first twelve
months after the cessation of Mr. Kothari's employment with the Company,
which occurred on April 30, 2000.
In February 1999, the Company entered into a two-year employment
agreement with Michael S. Zuckert, as vice-president, secretary and general
counsel. The agreement provided for an annual salary of $225,000 and a
guaranteed annual bonus of no less than $25,000. The annual salary could be
increased during the term of the agreement in the sole discretion of the
Compensation Committee. In addition, Mr. Zuckert is bound by a non-compete
clause from the commencement date of the employment agreement through the
first twelve months after the cessation of Mr. Zuckert's employment, which
occurred on March 29, 2000.
The Company has not entered into written employment agreements
with Lisa Mogensen or Jordan Goldstein.
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN STOCKHOLDERS
The following table sets forth, as of April 28, 2000,23, 2001 (except as
otherwise noted), the beneficial ownership of our common stock by (i) each
person known by us to own beneficially more than 5% of our common stock,
(ii) each of our directors and nominees for director, (iii) the Named
Executive Officers; and (iv) all of our executive officers and directors as
a group.
AMOUNT AND NATURE OF
BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNERSHIP(2) PERCENT OF CLASS(2)
-Name and Address of Beneficial Owner(1) Amount and Nature of Percent of Class(2)
--------------------------------------- --------------------------- -------------------
Beneficial
Ownership(2)
------------
Kevin English............................................. -- --
Thomas J. Clarke.......................................... -- --Clarke(3)................................... 487,500 1.8%
Dave Kansas(3)............................................ 171,515Kansas(4)........................................ 176,515 *
Simon Clark............................................... -- --Lisa Mogensen(5) ..................................... 24,750 *
Jordan Goldstein(6) .................................. 14,875 *
Paul Kothari..............................................Kothari (7) ..................................... 53,333 *
Michael Zuckert(4)........................................Zuckert (8) .................................. 33,333 *
James J. Cramer(5)........................................ 3,300,951 13.0%Cramer(9).................................... 3,359,284 12.1%
Cramer Partners, L.L.C. ................................................................ 1,306,205 5.1%4.7%
Martin Peretz(6).......................................... 2,988,482 11.8%Peretz(10)..................................... 3,153,266 11.3 %
Peretz Partners, L.L.C. ................................................................ 2,430,508 9.6%8.7%
Fred Wilson(7)............................................ 384,975Wilson(11)....................................... 418,704 1.5%
Jerry Colonna(8).......................................... 341,292Colonna(12)..................................... 375,021 1.3%
Edward F. Glassmeyer(9)...................................Glassmeyer(13).............................. 1,682,144 6.6%
Michael Golden(10)........................................ 7,500 *
Linda Srere(11)........................................... 15,000 *6.1%
Oak Investment Partners VIII, L.P. and
Oak VIII Affiliates Fund, L.P. (9)......................(13)................... 1,674,644 6.6%
Chase Venture Capital Associates, L.P..................... 1,474,780 5.8%
Softbank Technology Ventures IV L.P. and
Softbank Technology Advisors Fund L.P. (12)............. 1,451,499 5.7%
The New York Times Company(13)............................ 1,560,055 6.2%6.1%
Douglas A. McIntyre .................................. 0 0%
J.P. Morgan Partners (SBIC), LLC (14) ................ 1,919,633 6.9%
David A. Rocker(15) .................................. 1,863,638 6.7%
All executive officers and directors as a group (13(12
persons)................................................ 8,734,157 34.4%
- ------------------------(16)........................................ 9,778,725 35.2 %
- -----------
* Represents beneficial ownership of less than 1%.
(1) The address for each stockholder, other than Oak Investment
Partners VIII, L.P., Oak VIII Affiliates Fund, L.P., Chase Venture Capital Associates,
L.P.J.P. Morgan
Partners (SBIC), Softbank Technology Ventures IV L.P., Softbank Technology Advisors
Fund L.P.LLC and The New York Times Company,David A. Rocker is c/o TheStreet.com,
Inc., 14 Wall Street, 14(th) Floor, New York, NY 10005. The address for Oak
Investment Partners VIII, L.P. and Oak VIII Affiliates Fund, L.P.
is One Gorham Island, Wesport, CT 06880. The address for Chase Venture Capital
Associates, L.P.J.P.
Morgan Partners (SBIC), LLC is 380 Madison1221 Avenue 12(th) Floor,of the Americas, New
York, NY 10017.10020. The address for Softbank Technology Ventures IVDavid A. Rocker is c/o Rocker
Partners, L.P. and Softbank
13
Technology Advisors Fund L.P. is 200 West Evelyn Ave., Suite 200 Mountain
View, CA 94043. The address for The New York Times Company is 229 West
43(rd) Street,1759, 45 Rockefeller Plaza, New York, NY
10036.10111.
(2) Beneficial ownership is determined in accordance with the rules of
the Securities and Exchange Commission. Percentage ownership is
based on 25,366,31327,790,399 shares outstanding as of April 28, 2000.23, 2001.
Shares of common stock subject to options currently exercisable or
exercisable within 60 days of April 28, 200023, 2001 are deemed
outstanding for the purpose of computing the percentage ownership
of the person holding such options but are not deemed outstanding
for computing the percentage ownership of any other person. Except
as noted, the persons and entities named in the table have sole
voting and sole investment power with respect to all shares
beneficially owned, subject to community property laws where
applicable.
(3) Consists of 37,500 shares underlying stock options that became
exercisable in April 2000, 37,500 shares underlying stock options
that became exercisable in October 2000, 62,500 shares underlying
stock options that became exercisable in October 2000, 81,250
shares underlying stock options that became exercisable in
November 2000, 62,500 shares underlying stock options that became
exercisable in December 2000, 125,000 shares underlying stock
options that became exercisable in March 2001 and 81,250 shares
underlying stock options that will become exercisable in May 2001.
(4) Consists of 151,515 shares owned directly by Mr. Kansas, 7,500
shares underlying stock options that became exercisable in July
1999, 12,500 shares underlying stock options that became
exercisable in January 2000, 7,500 shares underlying stock options
that became exercisable in July 2000, 5,000 shares underlying
stock options that became exercisable in December 2000 and 12,500
shares underlying stock options that became exercisable in January
2001.
(5) Consists of 6,250 shares underlying stock options that became
exercisable in October 2000, 4,625 shares underlying stock options
that became exercisable in November 2000, 3,000 shares underlying
stock options that became exercisable in December 2000, 6,250
shares underlying stock options that became exercisable in April
2001 and 4,625 shares underlying stock options that will become
exercisable in May 2001.
(6) Consists of 5,875 shares underlying stock options that became
exercisable in October 2000, 2,937 shares underlying stock options
that became exercisable in November 2000, 3,125 shares underlying
stock options that became exercisable in April 2001 and 2,938
shares underlying stock options that will become exercisable in
May 2001.
(7) Mr. Kothari resigned as Chief Financial Officer and Vice President
of the Company, effective as of April 30, 2000. (4) ConsistsHis security
ownership is stated as of such date.
(8) Mr. Zuckert resigned as Vice President and General Counsel of the
Company, effective as of March 29, 2000. His security ownership,
which consists of 33,333 shares underlying stock options that
became exercisable in February 2000.
(5)2000, is stated as of such date.
(9) Consists of 1,306,205 shares owned by Cramer Partners, L.L.C.,
232,071 shares owned by a trust for the benefit of Mr. Cramer, of
which he acts as trustee, 1,213,415 shares owned by a second trust
for the benefit of Mr. Cramer, of which he also acts as trustee,
125,000433,427 shares owned by Cramer
Partners, L.P.,directly, 83,333 shares underlying stock
options that became exercisable in February 2000, and 7,500 shares
underlying stock options that will becomebecame exercisable in May 2000.
(6)June 2000, and
83,333 shares underlying stock options that became exercisable in
February 2001.
(10) Consists of 152,474 shares owned directly by Dr. Peretz, 7,500
shares underlying stock options held by Dr. Peretz that will becomebecame
exercisable in May 2000, 73,618 shares held by a trust for the
benefit of Dr. Peretz, 2,430,508 shares owned by Peretz Partners,
L.L.C., 224,129128,100 shares held by Peretz Family Investments, L.P. of
which Dr. Peretz is general partner, 247,129 shares owned by the
family of Dr. Peretz, including his spouse and children, 13,17418,174
shares held by each of two trusts, for each of which Dr. Peretz is
a co-trustee, 68,618 shares held by a trust for the benefit of Dr. Peretz,
74,08979,089 shares held by a trust for the benefit of Dr.
Peretz's spouse, 4,000 shares held by a family trust for which Dr.
Peretz is a co-trustee and 1,000 shares held by each of fourtwo other
family trusts, for each of which Dr. Peretz is a co-trustee. Dr.
Peretz disclaims beneficial ownership of shares owned by Peretz
Partners, L.L.C.
(7)(11) Consists of 92,866 shares owned directly by Mr. Wilson, 7,500
shares underlying stock options held by Mr. Wilson that will becomebecame
exercisable in MayJune 2000, 130,000 shares owned by The Flatiron
Fund, L.L.C., 114,368LLC, 134,221 shares owned by The Flatiron Fund 1998/99, L.L.C.,LLC,
and 13,876 shares owned by Flatiron Associates, LLC (each of eachwhich
is managed by Flatiron Partners, LLC, of which Mr. Wilson and Mr.
Colonna are general partnersmanaging members) and 40,241 shares owned by a family
trust.
(8)(12) Consists of 130,000 shares owned by The Flatiron Fund, L.L.C.LLC and
114,368134,221 shares owned by The Flatiron Fund 1998/99, L.L.C.,LLC, and 13,876
shares owned by Flatiron Associates, LLC (each of eachwhich is managed
by Flatiron Partners, LLC, of which Mr. Colonna and Mr. Wilson are
general partners, andmanaging members), 89,424 shares owned by a family investment
company and 7,500 shares underlying stock options held by Mr.
Colonna that will becomebecame exercisable in MayJune 2000.
(9)(13) Consists of 1,642,827 shares owned by Oak Investment Partners
VIII, L.P. and 31,817 shares owned by Oak VIII Affiliates Fund,
L.P., 7,358 shares underlying stock options held by Oak Investment
Partners VIII, L.P. and 142 shares underlying stock options held
by Oak VII Affiliates Fund, L.P., all of which will become
exercisable in MayJune 2000. Mr. Glassmeyer is a managing member of
Oak Associates VIII, L.L.C., which is the general partner of Oak
Investment Partners VIII, L.P. and of Oak VIII Affiliates, L.L.C.,
which is the general partner of Oak VIII Affiliates Fund, L.P. Mr.
Glassmeyer disclaims beneficial ownership of these shares.
(10)(14) Consists of 7,500 shares underlying options granted to Mr. Golden, which
will become exercisable in May 2000. Mr. Golden serves as vice chairman and
senior vice president of The New York Times Company and sits as a director
of TheStreet.com at the request of The New York Times Company in connection
with its investment in TheStreet.com. Pursuant to The New York Times
14
Company's policy, Mr. Golden has agreed that he will turn over to The New
York Times Company any net profits he realizes as a result of the exercise
of such options.
(11) Consists of 15,000 shares underlying options granted to Ms. Srere, which
will become exercisable in May 2000.
(12) Consists of 1,423,0251,474,853 shares owned by Softbank Technology Ventures IVJ.P. Morgan Partners (SBIC),
LLC (formerly known as Chase Venture Capital Associates, L.P.) and
28,474 owned by Softbank Technology Advisors Fund L.P. Mr. Charles R.
Lax is the managing member of STV IV LLC which is the general partner of
each of Softbank Technology Ventures IV L.P. and Softbank Technology
Advisors Fund L.P. Both Mr. Lax and STV IV LLC disclaim beneficial ownership
of these shares.
(13) Consists of 1,552,555444,853 shares owned by The New York TimesJ.P. Morgan Partners (BHCA), L.P.
(formerly known as Chase Equity Associates L.P.).
(15) Consists of 574,400 shares owned by Rocker Partners, L.P. and
808,638 shares owned by Compass Holdings, Ltd. Mr. Rocker is the
sole managing partner of Rocker Partners, L.P. and, through Rocker
Offshore Management Company, Inc., acts as the investment advisor
to Compass Holdings, Ltd.
(16) Includes 53,333 shares beneficially owned by Mr. Kothari on April
30, 2000, the date of his resignation as Chief Financial Officer
and Vice President of the Company, and 7,50033,333 shares underlying options granted to Michael Golden, which will become
exercisable in May 2000.beneficially
owned by Mr. Golden servesZuckert on March 29, 2000, the date of his
resignation as vice chairmanVice President and senior vice
president of The New York Times Company and sits as a director of
TheStreet.com at the request of The New York Times Company in connection
with its investment in TheStreet.com. Pursuant to The New York Times
Company's policy, Mr. Golden has agreed that he will turn over to The New
York Times Company any net profits he realizes as a resultGeneral Counsel of the exercise
of such options.Company.
SECTION 16(A)16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's directors and executive
officers, and persons who own more than 10% of the Company's outstanding
Common Stock,common stock , to file initial reports of ownership and reports of changes
in ownership of Common Stockcommon stock with the SEC and Nasdaq. Such persons are
required by SEC regulations to furnish the Company with copies of all
Section 16(a) reports they file.
Based solely on its review of such reports received by the Company
with respect to fiscal 19992000 and written representations from such reporting
persons, the Company believes that all reports required to be filed under
Section 16(a) have been filed by such persons.persons, other than a report of an
option grant to Thomas J. Clarke, the Company's chief executive officer,
which was made in April 2000 and not reported until the November filing,
made on December 10, 2000, when the oversight was discovered.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
THE NEW YORK TIMES INVESTMENTPurchase of U.K. Minority Interest
In February 1999,November 2000, TheStreet.com entered into a Share Purchase
Agreement with Chase Capital Partners (now known as JPMorgan Partners),
Flatiron Fund 1998/99, Barclay's Private Equity, ETF Group and the Company sold 37,728 sharesother
members of our Series B 9 1/2%
Cumulative Preferred Stock and 1,320,901 sharesthe group of our Common Stockminority investors in TheStreet.com (Europe)
Limited, the Company's U.K. operation ("TSC Europe"), to The New
York Times Companypurchase the
portion of the share capital of TSC Europe held by them, for an aggregate
consideration of $15$3 million in cash and services.1,250,000 shares of TheStreet.com's
common stock (the "Shares"). In connection with this sale,proposed transaction,
the Board of Directors created a special committee comprised of two
disinterested directors, James Cramer and Martin Peretz, to review and
negotiate the proposed transaction. As a result, we believe that the
purchase price and other terms of the transaction were determined as a
result of an arms-length negotiation. In connection with this transaction,
the Investment Agreement, dated September 11, 1999, among TheStreet.com and
the U.K. investor group, was terminated. Pursuant to the Share Purchase
Agreement, the Company entered into an advertising
credit agreement with The New York Times Company under which The New York Times
Company has agreedgranted to providethe U.K. investor group the right to
require the Company with an advertising creditto use reasonable best efforts to register the Shares
and keep such registration effective for advertising on The New York Timesa maximum of six months. Both
Flatiron Fund 1998/99, LLC, which received $47,047 and other media controlled by it.
Additionally, as part of this19,853 Shares, and
Flatiron Associates, LLC, which received $5,202 and 2,206 Shares in the
transaction, Mr. Michael Golden, the vice chairman
and senior vice president of The New York Times Company, became a director of
TheStreet.com. In March 1999, the Company entered into a memorandum of
understanding with The New York Times Electronic Media Company under which the
Company agreed to the following proposals, a majority of which were implemented
by December 31, 1999:
- Promotion of our web site by The New York Times to registered users of its
web site;
- Indexing of our headlines on the Business section of The New York Times
web site and indexing of headlines from the Business section of The New
York Times web site on our web site;
- Licensing our investment tools to The New York Times; and
- Creating a jointly owned newsroom to provide continuous coverage of
business news.
15
THE STREET.COM (EUROPE) LIMITED INVESTMENT
In September 1999, the Company and a syndicate of investors (the
"Syndicate") invested a total of $17 million in TheStreet.com (Europe) Limited.
Members of the Syndicate include, among others, Chase Capital Partners, Barclays
Private Equity, ETF Group, 3i, and Intel Corporation. Chase Capital Partners is
an affiliateare affiliates of The Flatiron Fund, L.L.C.LLC, of which two of our
directors, Fred Wilson and Jerry Colonna, are general partners. The principal termsmanagers. Additionally, Chase
Capital Partners, an affiliate of Chase Equity Associates, which received
$882,353 and 367,647 Shares and Chase Venture Capital Partners, which
received $185,986 and 77,206 Shares in the transaction, is a party to
certain co-investment arrangements with Flatiron pursuant to which the
parties thereto develop and manage a venture capital investment program.
Upon the occurrence of certain contingencies that are outside of the
investment are as follows:
- A preferred dividendcontrol of $5 million (plus interest) payable to the Syndicate, which will convert intoChase entities, certain Chase entities may acquire a
pecuniary interest in the investments made by the Flatiron entities. None
of the Chase entities presently has any beneficial or pecuniary interest in
the shares upon a public offering of shares
or a sale of TheStreet.com (Europe) Limited;
- The license of certain intellectual property of the Company (including,
without limitation, useheld by the Flatiron entities.
Agreement with Go2Net, Inc.
In August 2000, TheStreet.com entered into a Co-Branding and
Marketing Agreement with Go2Net, Inc. ("Go2Net") pursuant to which, among
other things, TheStreet.com licensed Go2Net's proprietary message board
technology platform for the three-year period beginning on the date of the
name "TheStreet.com")agreement. Pursuant to TheStreet.com
(Europe) Limited for $1 million;
- The transfer of certain software in fromthe agreement, the Company is obligated to TheStreet.com
(Europe) Limited for $9 million;pay a
total of $7.5 million over the three-year license period. Contemporaneously
with the transaction, Go2Net purchased 2.5% of TheStreet.com's common
stock, with an option to purchase up to an additional 7.45%, pursuant to a
Securities Purchase Agreement among Go2Net, Vulcan Ventures Inc. ("Vulcan")
and - The subscription by the Company for a $10 million loan note, the principal
of and interest upon which will accrue and convert into shares upon a
public offering of shares or sale of TheStreet.com (Europe) Limited.
DIRECTOR LOAN AGREEMENT
OnCompany. This option expired in February 2001.
Director Loan Agreements
In April 18, 2000, the Company entered into a loan agreement with
David Kansas, a Class II director of the Company, whereby the Company
agreed to loan to Mr. Kansas the sum of $100,000 at the prime rate on such
date plus one percentage point.point (the "April Loan"). The full amount of the
loan isApril Loan was initially payable upon its maturity date on April 17, 2001.
In December 2000, the Company agreed to extend the term of the April Loan
to mature a year later, on April 17, 2002. Mr. Kansas may prepay the loanApril
Loan in whole, or in part, at any time, without penalty. EMPLOYMENT AGREEMENTSIn addition, in
September 2000, the Company entered into a second loan agreement with Mr.
Kansas, whereby the Company agreed to loan to Mr. Kansas the sum of $60,000
at the prime rate on such date plus one percentage point (the "September
Loan"). The full amount of the September Loan was initially payable upon
its maturity date on September 25, 2001. In January 2001, in lieu of paying
Mr. Kansas a cash bonus for the year 2000, the Company agreed to forgive
the September Loan, and paid all related taxes due on Mr. Kansas's behalf.
Employment Agreement with James Cramer
In February 1999, the Company entered into an employment agreement
with James Cramer, then an outside contributor, which superseded an earlier
employment agreement. TheThis agreement provides for an annual salary of
$250,000, which increases annually by 10%. Pursuant to suchthis agreement, the
Company granted Mr. Cramer an option to purchase 333,333 shares of Common Stockcommon
stock at an exercise price of $3.00 per share. TheThis option becomes
exercisable at a rate of 25% annually commencing in February 2000. This
agreement terminates in February 2003. In December 1999 the Company entered
into an agreement with Mr. Cramer to amend Mr. Cramer's employment
agreement of February 1999. Pursuant to suchthis agreement, Mr. Cramer agreed
to forego his annual base salary of $275,000 for the calendar year 2000 in
exchange for the grant of an option to purchase 30,000 shares of the
Company's Common Stockcommon stock at an exercise price of $19.00 per share, the price
at which the Company's shares were offered to the public in the Company's
initial public offering in May 1999. The shares of Common Stock
underlying the options will fully vest on December 31, 2000 and theThis option will
expireexpired on March 31, 2001.2001
prior to its being exercised. In January 2001, the Company and Mr. Cramer
agreed that in exchange for a restricted stock award of 100,000 shares
under the Company's Amended and Restated 1998 Stock Incentive Plan, Mr.
Cramer would forego his annual base salary of $302,500. The fair market
value of the Company's common stock on the date of the award was $2.875 per
share. Under the terms of the award, the stock become vested (and the
restrictions on transfer lapsed) on the date of the grant. We maintain a
"key person" life insurance policy for Mr. Cramer.
In February 1999, the Company entered into a two-year employment agreement
with Paul K. Kothari, as vice-president and chief financial officer. The
agreement provides for an annual salary of $225,000 and a guaranteed annual
bonus of $25,000. The annual salary may be increased during the term of the
agreement in the sole discretion of the Compensation Committee. In addition,
Mr. Kothari is bound by a non-compete clause from the commencement date of the
employment agreement through the first twelve months after the cessation of
Mr. Kothari's employment. The employment agreement terminates in February 2001.
Mr. Kothari's employment with the Company ended at the end of April 2000.
In February 1999, the Company entered into a two-year employment agreement
with Michael S. Zuckert, as vice-president, secretary and general counsel. The
agreement provides for an annual salary of $225,000 and a guaranteed annual
bonus of no less than $25,000. The annual salary may be
16
increased during the term of the agreement in the sole discretion of the
Compensation Committee. In addition, Mr. Zuckert is bound by a non-compete
clause from the commencement date of the employment agreement through the first
twelve months after the cessation of Mr. Zuckert's employment. The employment
agreement terminates in February 2001. Mr. Zuckert's employment with the Company
ended in March 2000.
In December 1999, the Company entered into a two-year employment agreement
with Thomas J. Clarke, Jr., as President and Chief Executive Officer. The
agreement provides for an annual salary of $350,000 and a guaranteed annual
bonus of no less than $50,000. The annual salary may be increased during the
term of the agreement in the sole discretion of the Compensation Committee.
Under the agreement, the Company granted Mr. Clarke an option to purchase
250,000 shares of Common Stock at an exercise price of $20.06. In addition,
Mr. Clarke is bound by a non-compete clause from the commencement date of the
employment agreement through the first twelve months after the cessation of
Mr. Clarke's employment. The employment agreement terminates in December 2001.
COMMON STOCK PERFORMANCE GRAPH(1)
Set forth below is a graph comparing the seven-monthnineteen-month percentage
change in the cumulative total stockholder return on the Company's Common Stockcommon
stock from May 11, 1999 (the date of the Company's initial public offering)
through December 31, 19992000 with the cumulative total return on the S&P 500Nasdaq
Composite Index and a self-constructed peer group index. The comparison
assumes $100 was invested on May 11, 1999 in the Company's Common Stockcommon stock and
in each of the foregoing indices and assumes reinvestment of dividends. The
initial public offering price of The Street.com's common stock was $19.00
per share.
COMPARISON OF SEVEN-MONTHNINETEEN-MONTH CUMULATIVE
TOTAL RETURN AMONG THESTREET.COM, INC., THE
S&P 500 INDEX AND AN INDUSTRY SPECIFIC PEER GROUP(2)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
THE STREET.COM, INC. S & P 500 INDEX PEER GROUP
5/11/99 $100.00 $100.00 $100.00
12/31/99 $31.98 $109.26 $72.60
(FOOTNOTES ON FOLLOWING PAGE)
17
TSCM PEER GROUP NASDAQ COMP INDEX
5/11/99 100.00 100.00 100.00
12/31/99 35.70 61.79 156.12
12/29/00 5.35 13.44 94.78
- -----------------------------------
(1) This section entitled "Common Stock Performance Chart"Graph" shall not
be incorporated by reference into any future filings by the
TheStreet.com, Inc. under the Securities Act or Exchange Act, and
shall not be deemed to be soliciting material or to be filed under
the Securities Act or Exchange Act.
(2) The peer group consists of the following companies:
(i) Cnet, Inc.,
(ii) ilife.com, Inc.,
(iii) iVillage, Inc.,
(iv) Marketwatch.com, Inc. and
(V) Multex.com, Inc.
PROPOSAL II
INDEPENDENT AUDITORS
The Board of Directors has selected Arthur Andersen LLP as
independent auditors to examine the Company's accounts for the fiscal year
ending December 31, 2001 and has further directed that management submit
the selection of independent auditors for ratification by the stockholders
at the Meeting. Representatives of Arthur Andersen LLP are expected to be
present at the Meeting, will have the opportunity to make a statement if
they desire to do so and will be available to respond to appropriate
questions.
The Board of Directors recommends that stockholders vote FOR the
proposed ratification of Arthur Andersen LLP as the Company's independent
auditors.
Report of the Audit Committee
The primary function of the Audit Committee is to assist the Board
of Directors in its oversight of the Company's financial reporting process.
The Committee operates pursuant to a Charter that was adopted by the Board
of Directors on May 31, 2000, a copy of which is attached to this Proxy
Statement as Appendix A. Management is responsible for the Company's
financial statements and overall reporting process, including the system of
internal controls. The independent auditors are responsible for conducting
annual audits and quarterly reviews of the Company's financial statements
and expressing an opinion as to the conformity of the annual financial
statements with generally accepted accounting principles.
In the performance of its oversight function, the Committee has
reviewed and discussed with management the audited financial statements as
of and for the year ended December 31, 2000. The Committee has also
discussed with the Company's independent auditors the matters that the
auditors are required to discuss with the Committee by Statements on
Auditing Standard No. 61. Finally, the Committee has received the written
disclosures and the letter from the Company's independent auditors required
by Independence Standards Board Standard No. 1, and has discussed with the
independent auditors their independence.
It is not the duty or responsibility of the Committee to conduct
auditing or accounting reviews and procedures. In performing their
oversight responsibility, members of the Committee rely without independent
verification on the information provided to them and on the representations
made by management and the independent accountants. Accordingly, the Audit
Committee's oversight does not provide an independent basis to determine
that management has maintained appropriate accounting and financial
reporting principles or appropriate internal controls and procedures
designed to assure compliance with accounting standards and applicable laws
and regulations. Furthermore, the Audit Committee's considerations and
discussions do not assure that the audit of the Company's financial
statements has been carried out in accordance with generally accepted
auditing standards or that the financial statements are presented in
accordance with generally accepted accounting principles.
Based on the review and discussions described in this report, and
subject to the limitations on the role and responsibilities of the
Committee referred to above and in the Charter, the Committee recommended
to the Board of Directors that the audited financial statements be included
in the Company's Annual Report on Form 10-K for the year ended December 31,
2000, filed with the Securities and Exchange Commission.
Submitted by the Audit Committee of the Company's Board of Directors
Fred Wilson
Edward F. Glassmeyer
Douglas A. McIntyre
STOCKHOLDER PROPOSALS
Stockholders may submit proposals on matters appropriate for
stockholder action at subsequent annual meetings of the Company consistent
with Rule 14a-8 promulgated under the Exchange Act, which in certain
circumstances may require the inclusion of qualifying proposals in the
Company's Proxy Statement. For such proposals to be considered for
inclusion in the Proxy Statement and proxy relating to the Company's 20012002
Annual Meeting of Stockholders, all applicable requirements of Rule 14a-8
must be satisfied and such proposals must be received by the Company no
later than January 31, 2001.February 26, 2002. Such proposals should be directed to The
Street.com, Inc., Attention: Secretary, at 14 Wall Street, 14(th) Floor, New York, New
York 10005.
Except in the case of proposals made in accordance with Rule
14a-8, the Company's Bylaws require that stockholders desiring to bring any
business before the Company's 20012002 Annual Meeting of Stockholders deliver
written notice thereof to the Company not less than 60 days nor more than
90 days prior to the anniversary date of the immediately preceding annual
meeting of stockholders and comply with all other applicable requirements
of the Bylaws. However, in the event that the 20012002 annual meeting is called
for a date that is not within 30 days before or after the anniversary date
of the 20002001 Annual Meeting of Stockholders, notice by the stockholder in
order to be timely must be received not later than the close of business on
the 10(th)10th day following the date on which notice of the date of the annual
meeting was mailed to stockholders or made public, whichever first occurs.
In order for a proposal made outside of the requirements of Rule 14a-8 to
be "timely" within the meaning of Rule 14a-4(c), such proposal must be
received by the Company in accordance with the time limits set forth in the
foregoing advance notice Bylaw provision.
OTHER MATTERS
The Board of Directors knows of no matters other than those
described herein that will be presented for consideration at the Meeting.
However, should any other matters properly come before the Meeting or any
adjournment or postponement thereof, it is the intention of the persons
named in the accompanying proxy card to vote in accordance with their best
judgment in the interests of the Company.
MISCELLANEOUS
All costs incurred in the solicitation of proxies will be borne by
the Company. In addition to the solicitation by mail, officers and
employees of the Company may solicit proxies by mail, facsimile, telephone
or in person, without additional compensation. The Company may also make
arrangements with brokerage houses and other custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial
owners of Common Stockcommon stock held of record by such persons, and the Company
18
may
reimburse such brokerage houses and other custodians, nominees and
fiduciaries for their out-of-pocket expenses incurred in connection
therewith.
The Company's Annual Report on Form 10-K with respect to the
fiscal year ended December 31, 1999,2000, which includes the Company's audited
financial statements, accompanies this Proxy Statement.
ADDITIONAL COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K WILL
BE FURNISHED AT NO CHARGE TO EACH PERSON TO WHOM A PROXY STATEMENT IS
DELIVERED UPON RECEIPT OF A WRITTEN OR ORAL REQUEST OF SUCH PERSON
ADDRESSED TO THE STREET.COM, INC., ATTN: SECRETARY, 14 WALL STREET, 14(TH) FLOOR, NEW
YORK, NEW YORK 10005 (TELEPHONE: (212) 321-5000).
By Order of the Board of Directors
/s/ Jordan Goldstein
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Jordan Goldstein
SECRETARYSecretary
New York, New York
May 30, 2000
19
EXHIBIT16, 2001
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE
OF THE
BOARD OF DIRECTORS
OF
THESTREET.COM, INC.
1998 STOCK INCENTIVE PLAN
AS AMENDED AND RESTATED AS OF NOVEMBER 1, 1999
SECTION 1 PURPOSES
The purpose of TheStreet.com, Inc. 1998 Stock Incentive Plan, as amended and
restated as of November 1, 1999 (the "Plan") is to enable TheStreet.com, Inc.
(the "Company") and its Related Companies (as defined below) to attract, retain
and reward employees, directors and consultants and strengthen the existing
mutuality of interests between such persons and the Company's stockholders by
offering such persons an equity interest in the Company. For purposes of the
Plan, a "Related Company" means any corporation, partnership, joint venture or
other entity in which the Company owns, directly or indirectly, at least a 20%
beneficial ownership interest.
SECTION 2 TYPES OF AWARDS
Awards under the Plan may be in the form of (i) Stock Options;
(ii) Restricted Stock; and/or (iii) Tax Offset Payments.
SECTION 3 ADMINISTRATION
3.1 The Plan shall be administeredAs Adopted by the CompensationBoard on May 31, 2000
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1. AUTHORITY
The Audit Committee (the "Committee") of the
Company's Board of Directors
(the "Board") of TheStreet.com, Inc., a Delaware corporation (the
"Company") is established pursuant to Article III, Section 11 of the
Company's Amended and Restated Bylaws and Section 141(c) of the Delaware
General Corporation Law.
2. STRUCTURE OF THE COMMITTEE
The Committee shall be comprised of three or such other committee ofmore directors as
determined from time to time by resolution of the Board. Consistent with
the appointment of other Board shall designate (the "Committee"), which shall consist of not less
than two directors. Thecommittees, the members of the Committee
shall servebe elected by the Board at the pleasureannual organizational meeting of the
Board.
3.2 The Committee shall have the following authority with respect to awards
under the Plan: to grant awards; to adopt, alter and repeal such administrative
rules, guidelines and practices governing the Plan as it shall deem advisable;
to interpret the terms and provisions of the Plan and any award granted under
the Plan; and to otherwise supervise the administration of the Plan. In
particular, and without limiting its authority and powers, the Committee shall
have the authority:
(1) to determine whether and to what extent any awardBoard or combination of
awards will be granted hereunder;
(2) to select the employees, directors or consultants to whom awards
will be granted;
(3) to determine the number of shares of the common stock of the Company
(the "Stock") to be covered by each award granted hereunder subject to the
limitations contained herein;
(4) to determine the terms and conditions of any award granted
hereunder, including, but not limited to, any vesting or other restrictions
based on such performance objectives (the "Performance Objectives") andat such other factors as the Committee may establish, and to determine whether the
Performance Objectives and other terms and conditions of the award are
satisfied;
(5) to determine the treatment of awards upon an award holder's
retirement, disability, death, termination for cause or other termination of
employment or service;
(6) to determine that amounts equal to the amount of any dividends
declared with respect to the number of shares covered by an award (i) will
be paid to the employee currently or (ii) will be deferred and deemed to be
reinvested or (iii) will otherwise be credited to the employee, or that the
employee has no rights with respect to such dividends;
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(7) to amend the terms of any award, prospectively or retroactively;
provided, however, that no amendment shall impair the rights of the award
holder without his or her written consent; and
(8) to substitute new Stock Options for previously granted Stock
Options, or for options granted under other plans or agreements, in each
case including previously granted options having higher option prices.
3.3 The Committee shall have the right to designate awards as "Performance
Awards." The grant or vesting of a Performance Award shall be subject to the
achievement of Performance Objectives established by the Committee based on one
or more of the following criteria, in each case applied to the Company on a
consolidated basis and/or to a business unit and which the Committee may use as
an absolute measure, as a measure of improvement relative to prior performance,
or as a measure of comparable performance relative to a peer group of companies:
sales, operating profits, operating profits before interest expense and taxes,
net earnings, earnings per share, return on equity, return on assets, return on
invested capital, total shareholder return, cash flow, debt to equity ratio,
market share, stock price, economic value added, and market value added.
3.4 All determinations made by the Committee pursuant to the provisions of
the Plan shall be final and binding on all persons, including the Company and
Plan participants.
SECTION 4 STOCK SUBJECT TO PLAN
4.1 The total number of shares of Stock which may be issued under the Plan
shall be 6,900,000. Such shares may consist of authorized but unissued shares or
treasury shares.
4.2 To the extent a Stock Option terminates without having been exercised,
or shares awarded are forfeited, the shares subject to such award shall again be
available for distribution in connection with future awards under the Plan.
Shares of Stock equal in number to the shares surrendered in payment of the
option price, and shares of Stock which are withheld in order to satisfy
federal, state or local tax liability, shall not count against the above limit,
and shall again be available for grants under the Plan.
4.3 No employee shall be granted Stock Options, Restricted Stock, or any
combination thereof with respect to more than 1,000,000 shares of Stock in any
fiscal year (subject to adjustment as provided in Section 4.4). No employee
shall be granted a Tax Offset Payment in any fiscal year with respect to more
than the number of shares of Stock covered by awards granted to such employee in
such fiscal year.
4.4 In the event of any merger, reorganization, consolidation, sale of
substantially all assets, recapitalization, Stock dividend, Stock split,
spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Stock, a substitution or adjustment, as may be
determined to be appropriate by the Committee or the Board in its sole
discretion, shall be made in the aggregate number of shares reserved for
issuance under the Plan, the number of shares as to which awards may be granted
to any individual in any fiscal year, the number of shares subject to
outstanding awards and the amounts to be paid by award holders or the Company,
as the case may be, with respect to outstanding awards; provided, however, that
no such adjustment shall increase the aggregate value of any outstanding award.
SECTION 5 ELIGIBILITY
Employees, directors, and consultants of the Company or a Related Company
are eligible to be granted awards under the Plan. Only employees are eligible to
be granted Incentive Stock Options. The participants under the Plan shall be
selected from time to time by the Committee, in its sole discretion, from among
those eligible.
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SECTION 6 STOCK OPTIONS
6.1 The Stock Options awarded to employees under the Plan may be of two
types: (i) Incentive Stock Options within the meaning of Section 422 of the Code
or any successor provision thereto; and (ii) Non-Qualified Stock Options. To the
extent that any Stock Option does not qualify as an Incentive Stock Option, it
shall constitute a Non-Qualified Stock Option.
6.2 Subject to the following provisions, Stock Options awarded under the
Plan shall be in such form and shall have such terms and conditions as the
Committee may determine:
(1) OPTION PRICE. The option price per share of Stock purchasable under
a Stock Option shall be determined by the Committee, and may be less than
the fair market value of the Stock on the date of the award of the Stock
Option. For purposes of the Plan, "fair market value" shall mean the closing
price of a share of Stock on the NASDAQ National Market on the trading day
immediately preceding the date of grant.
(2) OPTION TERM. The term of each Stock Option shall be fixed by the
Committee.
(3) EXERCISABILITY. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee. The Committee may waive such exercise provisions or accelerate
the exercisability of the Stock Option at any time in whole or in part.
(4) METHOD OF EXERCISE. Stock Options may be exercised in whole or in
part at any time during the option period by giving written notice of
exercise, in such manner as may be determined by the Company, specifying the
number of shares to be purchased, accompanied by paymentBoard. The Chairman
of the purchase
price. PaymentCommittee shall be designated by the Board, provided that if the
Board does not so designate a Chairman, the members of the purchase priceCommittee, by
majority vote, may designate a Chairman.
The presence in person or by telephone of a majority of the
Committee's members shall constitute a quorum for any meeting of the
Committee. All actions of the Committee will require the vote of a majority
of its members present at a meeting of the Committee at which a quorum is
present.
3. PURPOSE OF THE COMMITTEE
The Committee's purpose is to provide assistance to the Board in
fulfilling its legal and fiduciary obligations with respect to matters
involving the accounting, auditing, financial reporting and internal
control functions of the Company and its subsidiaries.
The Committee shall oversee the audit efforts of the Company's
independent accountants and internal auditors and, in that regard, shall
take such actions as it may deem necessary to satisfy itself that the
Company's auditors are independent of management. It is the objective of
the Committee to maintain free and open means of communications among the
Board, the independent accountants, the internal auditors and the financial
and senior management of the Company.
4. COMPOSITION OF THE COMMITTEE
Each member of the Committee shall be made inan "independent" director
within the meaning of the Nasdaq Stock Market, Inc. ("Nasdaq") rules and,
as such, mannershall be free from any relationship that may interfere with the
exercise of his or her independent judgment as a member of the Committee.
Notwithstanding the foregoing, as permitted by the rules of the Nasdaq,
under exceptional and limited circumstances, one director who does not meet
certain of the criteria for "independence" may be appointed to the
Committee may provideif the Board determines in its business judgment that membership
on the Committee by such person is required by the best interests of the
Company and its stockholders and the Company discloses in the award, which may include cash (including cash
equivalents), deliveryannual proxy
statement the nature of sharessuch person's relationship and the reasons for the
Board's determination. All members of Stock already owned by the optioneeCommittee shall be financially
literate at the time of their election to the Committee or subjectshall become
financially literate within a reasonable period of time after their
appointment to awards hereunder, "cashless exercise", any other manner permitted
by lawthe Committee. "Financial literacy" shall be determined by
the Committee, or any combination of the foregoing. If
the Committee determines that a Stock Option may be exercised using shares
of Restricted Stock, then unless the Committee provides otherwise, the
shares received uponBoard in the exercise of its business judgment, and shall include a
Stock Option which are paid for using
Restricted Stock shall be restricted in accordanceworking familiarity with the original termsbasic finance and accounting practices and an
ability to read and understand fundamental financial statements. At least
one member of the Restricted Stock award.
(5) NO STOCKHOLDER RIGHTS. An optioneeCommittee shall have neither rights to
dividendsaccounting or other rights of a stockholder with respect to shares subject to
a Stock Option until the optionee has given written notice of exercise and
has paid forrelated financial
management expertise, as such shares.
(6) SURRENDER RIGHTS. The Committee may provide that optionsqualification may be surrendered for cash upon any terms and conditions set bydetermined in the
Committee.
(7) NON-TRANSFERABILITY. Unless otherwise provided by the Committee,
(i) Stock Options shall not be transferable by the optionee other than by
will or by the laws of descent and distribution, and (ii) during the
optionee's lifetime, all Stock Options shall be exercisable only by the
optionee or by his or her guardian or legal representative.
(8) TERMINATION OF EMPLOYMENT. Following the termination of an
optionee's employment with the Company or a Related Company, the Stock
Option shall be exercisable to the extent determined by the Committee. The
Committee may provide different post-termination exercise provisions with
respect to termination of employment for different reasons. The Committee
may provide that, notwithstanding the option term fixed pursuant to
Section 6.2(b), a Stock Option which is outstanding on the date of an
optionee's death shall remain outstanding for an additional period after the
date of such death.
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6.3 Notwithstanding the provisions of Section 6.2, no Incentive Stock
Option shall (i) have an option price which is less than 100%business judgment of the fair market
value of the Stock on the date of the award of the Incentive Stock Option,
(ii) be exercisable more than ten years after the date such Incentive Stock
Option is awarded, or (iii) be awarded more than ten years after May 6, 1998,
the original effective date of the Plan. No Incentive Stock Option granted to an
employee who owns more than 10% of the total combined voting power of all
classes of stock of the Company or any of its parent or subsidiary corporations,
as defined in Section 424 of the Code, shall (A) have an option price which is
less than 110% of the fair market value of the Stock on the date of award of the
Incentive Stock Option or (B) be exercisable more than five years after the date
such Incentive Stock Option is awarded.
SECTION 7 RESTRICTED STOCK
Subject to the following provisions, all awards of Restricted Stock to
employees shall be in such form and shall have such terms and conditions as theBoard. Committee may determine:
(1) The Restricted Stock award shall specify the number of shares of
Restricted Stock to be awarded, the price,members, if any, to be paid by the
recipient of the Restricted Stock and the date or dates on which,they or the conditions upon the satisfactionBoard
deem it appropriate, may enhance their understanding of which, the Restricted Stock will vest.
The grant and/or the vesting of Restricted Stock may be conditioned upon the
completion of a specified period of service with the Company or a Related
Company, upon the attainment of specified Performance Objectives or upon
such other criteria as the Committee may determine.
(2) Stock certificates representing the Restricted Stock awarded to an
employee shall be registeredfinance and
accounting by participating in the employee's name, but the Committee may
direct that such certificates be heldeducational programs conducted by the
Company or its designee on
behalfan outside consultant or firm.
(1) Upon any changes in the composition of the employee. ExceptCommittee and otherwise
approximately once each year, the Committee shall ensure that the Company
provides the Nasdaq with written confirmation regarding:
(a) Any determination that the Board has made regarding the
independence of the Committee members;
(b) The financial literacy of the Committee members;
(c) The determination that at least one of the Committee members
has accounting or related financial management expertise; and
(d) The annual review and reassessment of the adequacy of the
Committee's charter.
5. MEETINGS OF THE COMMITTEE
The Committee shall meet with such frequency and at such intervals
as it shall determine is necessary to carry out its duties and
responsibilities. As part of its purpose to foster open communications, the
Committee shall meet at least annually with management and the Company's
independent accountants in separate executive sessions to discuss any
matters that the Committee or each of these groups or persons believe
should be discussed privately. In addition, the Committee (or the Chairman)
should meet or confer with the independent accountants and management
quarterly to review the Company's periodic financial statements prior to
their filing with the Securities and Exchange Commission (the "SEC"). The
Chairman should work with the Company's Chief Financial Officer and
management to establish the agendas for Committee meetings. The Committee,
in its discretion, may ask members of management or others to attend its
meetings (or portions thereof) and to provide pertinent information as
necessary. The Committee shall maintain minutes of its meetings and records
relating to those meetings and the Committee's activities and provide
copies of such minutes to the Board.
6. DUTIES AND POWERS OF THE COMMITTEE
In carrying out its duties and responsibilities, the Committee's
policies and procedures should remain flexible, so that it may be permitted byin a
position to best react or respond to changing circumstances or conditions.
The Committee should review and reassess annually the adequacy of the
Committee's charter. The charter must specify: (1) the scope of the
Committee's responsibilities and how it carries out those responsibilities,
(2) the ultimate accountability of the Company's independent auditors to
the Board and the Committee, no
share(3) the responsibility of Restricted Stock may be sold, transferred, assigned, pledged or
otherwise encumbered by the employee until such share has vestedCommittee and
the Board for the selection, evaluation and replacement of the Company's
independent auditors, and (4) that the Committee is responsible for
ensuring that the Company's independent auditors submit on a periodic basis
to the Committee a formal written statement delineating all relationships
between the independent auditors and the Company and that the Committee is
responsible for actively engaging in accordancea dialogue with the termsindependent
auditors with respect to any disclosed relationships or services that may
impact the objectivity and independence of the Restricted Stock award. At the time
Restricted Stock vests, a certificateindependent auditors and for
such vested shares shall be
delivered to the employee (or his or her designated beneficiary in the event
of death), free of all restrictions.
(3) The Committee may providerecommending that the employee shall haveBoard take appropriate action to ensure the
rightindependence of the independent auditors.
While there is no "blueprint" to vote or receive dividends on Restricted Stock. Unless the Committee provides
otherwise, Stock received as a dividend on, or in connection with a stock
split of, Restricted Stock shall be subject to the same restrictions as the
Restricted Stock.
(4) Except as may be providedfollowed by the Committee in
carrying out its duties and responsibilities, the eventfollowing should be
considered within the authority of an
employee'sthe Committee:
Selection and Evaluation of Auditors
(1) Make recommendations to the Board as to the selection of the
firm of independent public accountants to audit the books and accounts of
the Company and its subsidiaries for each fiscal year;
(2) Review and approve the Company's independent auditors' annual
engagement letter, including the proposed fees contained therein;
(3) Review the performance of the Company's independent auditors
and make recommendations to the Board regarding the replacement or
termination of employment before allthe independent auditors when circumstances warrant;
(4) Oversee the independence of his or her Restricted
Stock has vested, or in the event any conditionsCompany's independent auditors
by, among other things:
(e) requiring the independent auditors to deliver to the
vesting of
Restricted Stock have not been satisfied prior to any deadline forCommittee on a periodic basis a formal written statement
delineating all relationships between the satisfaction of such conditions set forth in the award, the shares of
Restricted Stock which have not vested shall be forfeited,independent auditors and
the Committee
may provide that (i) any purchase price paid byCompany; and
(f) actively engaging in a dialogue with the employee shall be
returned to the employee or (ii) a cash payment equal to the Restricted
Stock's fair market value on the date of forfeiture, if lower, shall be paid
to the employee.
(5) The Committee may waive, in whole or in part, any or all of the
conditions to receipt of, or restrictionsindependent
auditors with respect to any disclosed relationships or allservices
that may impact the objectivity and independence of the
employee's Restricted Stock.
SECTION 8 TAX OFFSET PAYMENTS
Theindependent auditors and recommending that the Board take
appropriate action to satisfy itself of the auditors'
independence;
(5) Instruct the Company's independent auditors that they are
ultimately accountable to the Committee may provideand the Board, and that the
Committee and the Board are responsible for a Tax Offset Paymentthe selection (subject to
shareholder approval if determined by the Board), evaluation and
termination of the Company's independent auditors;
Oversight of Annual Audit and Quarterly Reviews
(6) Review and accept, if appropriate, the annual audit plan of
the Company's independent auditors, including the scope of audit
activities, and monitor such plan's progress and results during the year;
(7) Confirm through private discussions with the Company's
independent auditors and the Company's management that no management
restrictions are being placed on the scope of the independent auditors'
work;
(8) Review the results of the year-end audit of the Company,
including (as applicable):
(a) the audit report, the published financial statements,
the management representation letter, the "Memorandum
Regarding Accounting Procedures and Internal Control" or
similar memorandum prepared by the Company's independent
auditors, any other pertinent reports and management's
responses concerning such memorandum;
(b) the qualitative judgments of the independent auditors
about the appropriateness, not just the acceptability,
of accounting principle and financial disclosure
practices used or proposed to be adopted by the Company
and, particularly, about the degree of aggressiveness or
conservatism of its accounting principles and underlying
estimates;
(c) the methods used to an
employeeaccount for significant unusual
transactions;
(d) the effect of significant accounting policies in
controversial or emerging areas for which there is a
lack of authoritative guidance or consensus;
(e) management's process for formulating sensitive
accounting estimates and the reasonableness of these
estimates;
(f) significant recorded and unrecorded audit adjustments;
(g) any material accounting issues among management and the
independent auditors; and
(h) other matters required to be communicated to the
Committee under generally accepted auditing standards,
as amended, by the independent auditors;
(9) Review with respect to one or more awards granted undermanagement and the Plan. The Tax
Offset Payment shall be in an amount specifiedCompany's independent auditors
such accounting policies (and changes therein) of the Company, including
any financial reporting issues which could have a material impact on the
Company's financial statements, as are deemed appropriate for review by the
Committee which shall not
exceedprior to any interim or year-end filings with the amount necessarySEC or other
regulatory body;
(10) Confirm that the Company's interim financial statements
included in Quarterly Reports on Form 10-Q have been reviewed by the
Company's independent auditors;
Oversight of Financial Reporting Process and Internal Controls
(11) Review the adequacy and effectiveness of the Company's
accounting and internal control policies and procedures through inquiry and
discussions with the Company's independent auditors and management of the
Company;
(12) Review with management the Company's administrative,
operational and accounting internal controls insofar as the same relate to
payaccounting and financial reporting, including controls and security of the
federal, state, localcomputerized information systems, and other taxes
payableevaluate whether the Company is
operating in accordance with respect togenerally accepted accounting principles and
with the applicable awardCompany's policies and procedures.
(13) Review with management and the receiptindependent auditors any
reportable conditions and material weaknesses, as defined by the American
Institute of Certified Public Accountants, affecting internal control;
(14) Receive periodic reports from the Tax Offset
Payment,
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assuming that the employee is taxed at the maximum tax rate applicable to such
income. The Tax Offset Payment shall be paid solely in cash.
SECTION 9 TAX WITHHOLDING
Each award holder shall, no later than the date as of which the value of an
award first becomes includible in such person's gross income for applicable tax
purposes, pay, pursuant to such arrangements as the Company may establish from
time to time, any federal, state, local or other taxes of any kind required by
law to be withheld with respect to the award. The obligationsCompany's independent
auditors and management of the Company underto assess the Plan shallimpact on the Company
of significant accounting or financial reporting developments proposed by
the Financial Accounting Standards Board or the SEC or other regulatory
body, or any other significant accounting or financial reporting related
matters that may have a bearing on the Company;
(15) Establish and maintain free and open means of communication
between and among the Board, the Committee, the Company's independent
auditors and management;
Other Matters
(16) Meet annually with the general counsel, and outside counsel
when appropriate, to review legal and regulatory matters, including any
matters that may have a material impact on the financial statements of the
Company;
(17) Prepare a report to be conditionalincluded in each annual proxy
statement (or, if not previously provided during the fiscal year, any other
proxy statement or consent statement relating to the election of directors)
of the Company commencing after December 15, 2000 which states, among other
things, whether:
(a) the Committee has reviewed and discussed with management
the audited financial statements to be included in the
Company's Annual Report on such payment,Form 10-K;
(b) the Committee has discussed with the Company's
independent auditors the matters that the auditors are
required to discuss with the Committee by Statements on
Auditing Standard No. 61, (as it may be modified or
supplemented);
(c) the Committee has received the written disclosures and
the Company (and, where
applicable, any Related Company)letter from the Company's independent auditors
required by Independence Standards Board Standard No. 1,
as may be modified or supplemented, and has discussed
with the independent auditors their independence; and
(d) based on the review and discussions described in
subsections (i), shall,(ii) and (iii) above, the Committee has
recommended to the extent permitted by law, haveBoard that the rightaudited financial
statements be included in the Company's Annual Report on
Form 10-K for the last fiscal year for filing with the
SEC.
(18) Obtain from the independent auditors any information
pursuant to deduct any such taxes from any payment of any kind otherwise due to
the employee.
SECTION 10 AMENDMENTS AND TERMINATION
The Plan is of unlimited duration. The Board may discontinue the Plan at any
time and may amend it from time to time. No amendment or discontinuation of the
Plan shall adversely affect any award previously granted without the award
holder's written consent. Amendments may be made without stockholder approval
except as required to satisfy regulatory requirements.
SECTION 11 CHANGE OF CONTROL
11.1 In the event of a Change of Control, if so determined by the Committee
and specifically documented in either a special form of agreement at the time of
grant or an amendment to an existing agreement, in each case on an
individual-by-individual basis:
(1) all or a portion (as determined by the Committee) of outstanding
Stock Options awarded to such individual under the Plan shall become fully
exercisable and vested; and
(2) the restrictions applicable to all or a portion (as determined by
the Committee) of any outstanding Restricted Stock awards under the Plan
held by such individual shall lapse and such shares shall be deemed fully
vested.
11.2 A "Change of Control" means the happening of any of the following:
(1) the acquisition by any person or group deemed a person under
Sections 3(a)(9) and 13(d)(3)Section 10A of the Securities Exchange Act of 1934, (the
"Exchange Act") (other thanas
amended;
(19) Conduct or authorize investigations into any matters
within the Committee's scope of responsibilities, including
retaining outside counsel or other consultants or experts for this
purpose; and
(20) Perform such additional activities, and consider
such other matters, within the scope of its responsibilities, as
the Committee or the Board deems necessary or appropriate.
With respect to the duties and responsibilities listed above, the Committee
should:
(1) Report regularly to the Board on its activities, as
appropriate;
(2) Exercise reasonable diligence in gathering and
considering all material information;
(3) Understand and weigh alternative courses of conduct
that may be available;
(4) Focus on weighing the benefit versus harm to the
Company and its subsidiaries as determined
immediately prior to that date)shareholders when considering alternative
recommendations or courses of beneficial ownership, directly or
indirectly (with beneficial ownership determined as provided in Rule 13d-3,
or any successor rule, under the Exchange Act), of a majority of the total
combined voting power of all classes of stock of the Company having the
right under ordinary circumstances to vote at an election of the Board of
Directors of the Company, if such person or group deemed a person prior to
such acquisition was not a beneficial owner of at least five percent (5%) of
such total combined voting power of the Company;
(2) the election to the Board of Directors of the Company of members as
a result of which a majority of the Board of Directors shall consist of
persons who are not members of the Board of Directors as of the date of
grant;
(3) the date of approval by the stockholders of the Company of an
agreement providing for the merger or consolidation of the Company with
another corporation or other entity where (x) stockholders of the Company
immediately prior to such merger or consolidation would not beneficially own
following such merger or consolidation shares entitling such stockholders to
a majority of all votes (without consolidation of the rights of any class of
stock to elect directors by a separate class vote) to which all stockholders
of the surviving corporation would be entitled in the
A-5
election of directors, or (y) where the members of the Board of Directors,
immediately prior to such merger or consolidation, would not, immediately
after such merger or consolidation, constitute a majority of the board of
directors of the surviving corporation; or
(4) the sale of all or substantially all of the assets of the Company.
SECTION 12 GENERAL PROVISIONS
12.1action;
(5) If at any time the Committee determines thatdeems it appropriate, secure
independent expert advice and understand the delivery of Common
Stock underexpert's findings and
the Plan isbasis for such findings, including retaining independent
counsel, accountants or may be unlawful underothers to assist the laws of any applicable
jurisdiction,Committee in
fulfilling its duties and responsibilities; and
(6) Provide management and the rightCompany's independent
auditors with appropriate opportunities to exercise any Stock Option or receive any Restricted
Stockmeet privately with the
Committee.
7. COMPLIANCE WITH CHARTER
The Committee shall be suspended until the Committee determines that such delivery is
lawful. The Company shall have no obligationrequired to effect any registration of
qualification of the Common Stock under federal or state laws.
12.2 Any person exercising a Stock Option or receiving Restricted Stock
shall make such representations (including representations to the effect that
such person will not dispose of the Common Stock so acquired in violation of
federal and state securities laws) and furnish such information as may, in the
opinion of counsel for the Company, be appropriate to permit the Company to
issue the Common Stock in compliance with applicable federalthis
Charter within a reasonable period after its adoption; provided, however,
that with respect to Section 2 (Structure of the Committee) and state
securities laws. TheSection 4
(Composition of the Committee) of the Charter, the Committee may refuseshall use its
best efforts to permitbe in compliance by December 31, 2000 and in any event,
pursuant to the exerciserules of the Securities and Exchange Commission, shall be
in compliance with such Stock
Option or delivery of such Restricted Stock until such representationssections by no later than June 14, 2001.
* * *
While the Committee has the duties and information have been provided.
12.3 The Company may place an appropriate legend evidencing any transfer
restrictions on all shares of Common Stock issued under the Plan and may issue
stop transfer instructions in respect thereof.
12.4 Nothingresponsibilities set forth
in this Plan shall preventcharter, the Board from adopting
otherCommittee is not responsible for planning or
additional compensation arrangements. Neitherconducting the adoptionaudit or for determining whether the Company's financial
statements are complete and accurate and are in accordance with generally
accepted accounting principles. Similarly, it is not the responsibility of
the Plan
norCommittee to resolve disagreements, if any, award hereunder shall confer upon any employee ofbetween management and the
independent auditors or to ensure that the Company or of a
Related Company, any right to continued employment or service as a director or
consultant.
12.5 Determinations by the Committee under the Plan relating to the form,
amount,complies with all laws
and terms and conditions of awards need not be uniform, and may be made
selectively among persons who receive or are eligible to receive awards under
the Plan, whether or not such persons are similarly situated.
12.6 No member of the Board or the Committee, nor any officer or employee
of the Company acting on behalf of the Board or the Committee, shall be
personally liable for any action, determination or interpretation taken or made
with respect to the Plan, and all members of the Board or the Committee and all
officers or employees of the Company acting on their behalf shall, to the extent
permitted by law, be fully indemnified and protected by the Company in respect
of any such action, determination or interpretation.
A-6
regulations.
*************
v Please Detach and Mail in the Envelope Provided v
- --------------------------------------------------------------------------------
THE STREET.COM, INC.
Proxy Solicited on Behalf of the Board of Directors For Annual Meeting of
Stockholders, July 12, 2000June 26, 2001
The undersigned hereby appoints Thomas J. Clarke and Jordan Goldstein, each
with power to act without the other and with full power of substitution and
resubstitution, as Proxies to represent and to vote, as designated on the
reverse side, all shares of Common Stock, $.01 par value, of The
Street.com, Inc. (the "Company") owned by the undersigned, at the Annual
Meeting of Stockholders (the "Meeting") to be held at the TriBeCa Grand
Hotel, Two Avenue of the Americas, New York, New York 10013, on July 12, 2000,June 26,
2001, commencing at 10:009:30 a.m., New York City time, upon such business as
may properly come before the Meeting or any adjournment or postponement
thereof, including the matters set forth on the reverse side. You are
encouraged to specify your choice by marking the appropriate box (SEE
REVERSE SIDE) but you need not mark any box if you wish to vote in
accordance with the Board of Directors' recommendations. The Proxies cannot
vote your shares unless you sign and return this card. Unless a contrary
direction is indicated this Proxy will be voted for all nominees and for
Proposals 2 and 3, as more specifically described in the Proxy Statement.
If specific instructons are indicated, this Proxy will be voted in
accordance therewith.
(Continued and to be signed on reverse side)
- --------------------------------------------------------------------------------
v Please Detach and Mail in the Envelope Provided v
- --------------------------------------------------------------------------------
|X| Please mark your
votes as indicated
in this example
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE:
FOR EACH OF THE PERSONS LISTED BELOW AS A NOMINEE TO SERVE AS A CLASS III
DIRECTOR
OF THE COMPANY;
FOR THE APPROVAL OF THE AMENDMENT TO THE COMPANY'S AMENDED AND RESTATED 1998
STOCK INCENTIVE PLAN; AND
FOR THE APPROVAL OF THE RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN
LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
----------------------------------------------
FOR ALL AGAINST ALL EXCEPTIONS
1. Election of Class III Directors |_| |_| |_|
Nominees: James J. Cramer, Michael GoldenJerry Colonna and Martin PeretzDave Kansas
Exceptions:
----------------------------------
FOR AGAINST ABSTAIN
2. Approval of the amendment to the Company's |_| |_| |_|
Amended and Restated 1998 Stock Incentive
Plan to increase the number of shares of
Common Stock available fo grant pursuant
to awards under the Plan from 4,400,000
shares to 6,900,000 shares.
FOR AGAINST ABSTAIN
3. Approval of the ratification of the |_| |_| |_|
appointment of Arthur Andersen LLP as the
Company's independent certified public
accountants for the fiscal year ending
December 31, 2000.2001.
Date: ,2000,2001
- ------------------------------- -------------------------------- ----
Signature (title, if any) Signature, if held jointly
Please sign name(s) exactly as appearing hereon. When signing as attorney,
executor, administrator or other fiduciary, please give your full title as
such. Joint owners should each sign personally. If a corporation, sign in
full corporate name, by authorized officer. If a partnership, please sign
in partnership name, by authorized person.