SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
INFORMATION HOLDINGS INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
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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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/ / Fee paid previously with preliminary materials.
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Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
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INFORMATION HOLDINGS INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 25, 2000
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The Annual Meeting of Stockholders (the "Annual Meeting") of Information
Holdings Inc., a Delaware corporation (the "Company"), will be held at the New
York Marriott East Side Hotel, 525 Lexington Avenue (at 49(th)Street), New York,
New York 10017 on Tuesday, April 25, 2000, at 2:30 p.m., Eastern Standard Time,
for the purpose of considering and acting upon the following matters, which are
described more fully in the accompanying Proxy Statement:
(a) To elect five directors to serve until the 2001 annual meeting of
stockholders or until their respective successors are duly elected and
qualified;
(b) To approve a 500,000 share increase in the number of shares reserved for
issuance under the Company's 1998 Stock Option Plan;
(c) To ratify the appointment by the Board of Directors of Ernst & Young LLP
as the Company's independent accountants for the fiscal year ending
December 31, 2000; and
(d) To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
Holders of Common Stock of record at the close of business on March 24, 2000
(the "Record Date") are entitled to vote at the Annual Meeting and any
adjournment thereof. A list of stockholders of the Company as of the Record Date
will be available for inspection during business hours through April 24, 2000,
at the Company's offices, 2777 Summer Street, Suite 209, Stamford, Connecticut,
06905, and will also be available for inspection at the Annual Meeting.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. HOWEVER, WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN
PERSON, YOU ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND
RETURN IT AS SOON AS POSSIBLE IN THE ENCLOSED ENVELOPE WHICH HAS BEEN PROVIDED
FOR YOUR CONVENIENCE AND WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. THE PROMPT RETURN OF PROXY CARDS WILL ENSURE A QUORUM. IF YOU SEND IN
YOUR PROXY CARD AND THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR SHARES
IN PERSON, YOU MAY STILL DO SO. YOUR PROXY IS REVOCABLE IN ACCORDANCE WITH THE
PROCEDURES SET FORTH IN THE PROXY STATEMENT.
By Order of the Board of Directors,
/s/ Vincent A. Chippari
VINCENT A. CHIPPARI
SECRETARY
March 30, 2000
INFORMATION HOLDINGS INC.
2777 SUMMER STREET, SUITE 209
STAMFORD, CT 06905
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PROXY STATEMENT
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ANNUAL MEETING OF STOCKHOLDERS
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Information Holdings Inc., a
Delaware corporation (the "Company"), for use at the Annual Meeting of
Stockholders of the Company (the "Annual Meeting") to be held on Tuesday,
April 25, 2000, at 2:30 p.m., Eastern Standard Time, at the New York Marriott
East Side Hotel, 525 Lexington Avenue (at 49(th) Street), New York, New York,
10017, or at any adjournment or postponement thereof, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders. It is expected
that the Notice of Annual Meeting of Stockholders, this Proxy Statement and the
enclosed proxy card, together with the Company's Annual Report to stockholders
for the fiscal year ended December 31, 1999, will be mailed to stockholders
entitled to vote at the Annual Meeting commencing on or about March 31, 2000.
Any stockholder or stockholder's representative who, because of a
disability, may need special assistance or accommodation to allow him or her to
participate at the Annual Meeting may request reasonable assistance or
accommodation from the Company by contacting Information Holdings Inc., 2777
Summer Street, Suite 209, Stamford, Connecticut, 06905. To provide the Company
sufficient time to arrange for reasonable assistance, please submit all requests
by April 14, 2000.
RECORD DATE AND VOTING SECURITIES
Stockholders can ensure that their shares are voted at the Annual Meeting by
signing and returning the enclosed proxy card in the envelope provided. The
submission of a signed proxy will not affect a stockholder's right to attend the
Annual Meeting and vote in person. Stockholders who execute proxies retain the
right to revoke them at any time before they are voted by filing with the
Company's Secretary a written revocation or a proxy bearing a later date. The
presence at the Annual Meeting of a stockholder who has signed a proxy does not
itself revoke that proxy unless the stockholder attending the Annual Meeting
files written notice of revocation of the proxy with the Company's Secretary at
any time prior to the voting of the proxy.
Proxies will be voted as specified by the stockholders. Where specific
choices are not indicated, proxies will be voted FOR the proposals submitted for
approval, and in accordance with the proxyholder's best judgment as to any other
business as may properly come before the Annual Meeting. The proxy card provides
space for a stockholder to withhold voting for any or all nominees to the Board
or to abstain from voting for any proposal if the stockholder chooses to do so.
Under Delaware law and the Company's Bylaws, the presence of a quorum is
required to transact business at the Annual Meeting. A quorum is defined as the
presence, either in person or by proxy, of a majority of the shares entitled to
vote. Proxies marked "abstain" will be included in determining a quorum. On
routine matters, brokers who hold customer shares in "street name" but have not
timely received voting instructions from such customers have discretion to vote
such shares. Since all of the matters to be voted upon at the Annual Meeting are
routine, the presence of such shares will be included in determining a quorum.
Under Delaware law and the Company's Bylaws, proposals must be approved by
the affirmative vote of a majority, or, in the case of the election of
directors, a plurality, of the shares present, either in person or by proxy, at
the Annual Meeting and entitled to vote. Accordingly, abstentions have the same
effect as votes "against" a proposal, whereas instructions to withhold voting on
the election of any nominee for director have no effect on the outcome of the
vote.
The Board has fixed the close of business on March 24, 2000 as the record
date (the "Record Date") for the determination of the Company's stockholders who
are entitled to receive notice of and to vote at the Annual Meeting. At the
close of business on the Record Date, the Company had outstanding 21,540,036
shares of common stock, par value $0.01 per share (the "Common Stock"),
excluding treasury shares. The holders of Common Stock are entitled to one vote
for each share held on the Record Date.
PROXIES IN THE FORM ENCLOSED ARE BEING SOLICITED BY, OR ON BEHALF OF, THE
BOARD. THE PERSONS NAMED IN THE ACCOMPANYING FORM OF PROXY HAVE BEEN DESIGNATED
AS PROXIES BY THE BOARD. Such persons designated as proxies are the Company's
officers. Any stockholder desiring to appoint another person to represent him or
her at the Annual Meeting may do so either by inserting such person's name in
the blank space provided on the accompanying form of proxy, or by completing
another form of proxy and, in either case, delivering an executed proxy to the
Company's Secretary at the address indicated above, before the time of the
Annual Meeting. It is the responsibility of the stockholder appointing such
other person to represent him or her to inform such person of this appointment.
The Company will bear the cost of solicitation of proxies. Further
solicitation may be made by the Company's directors, officers and employees
personally, by telephone or otherwise, but such persons will not be specifically
compensated for such services. The Company also intends to make, through
bankers, brokers or other persons, a solicitation of proxies of beneficial
holders of the Common Stock. Upon request, the Company will reimburse brokers,
dealers, banks or similar entities acting as nominees for reasonable expenses
incurred in forwarding copies of the proxy materials relating to the Annual
Meeting to the beneficial owners of Common Stock which such persons hold of
record.
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PROPOSAL NUMBER ONE
ELECTION OF DIRECTORS
All of the Company's directors serve annual terms which expire on the date
of the Annual Meeting. At the Annual Meeting, the stockholders will elect five
directors to hold office, subject to the provisions of the Company's Bylaws,
until the Annual Meeting of Stockholders in 2001 and until their respective
successors shall have been duly elected and qualified.
The Company has agreed to nominate and use its best efforts to elect and
cause to remain as directors (i) Mason P. Slaine, for so long as he beneficially
owns, within the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), at least 5% of the outstanding shares of
Common Stock, unless the Company terminates his employment for "Just Cause" (as
defined in his employment agreement) and (ii) at least one or two nominees of
Warburg, Pincus Ventures, L.P. ("Warburg Pincus"), for so long as Warburg Pincus
owns at least 10% or 20%, respectively, of the outstanding shares of Common
Stock.
Unless contrary instructions are given, the persons named in the enclosed
proxy or their substitutes will vote FOR the election of the five director
nominees named below. The Board believes that all of the nominees are willing to
serve as directors. However, if any nominee at the time of election is unable to
serve or is otherwise unavailable for election, and as a result other nominees
are designated by the Board, the persons named in the enclosed proxy or their
substitutes intend to vote for the election of such designated nominees.
The nominees for election as directors to serve until the Annual Meeting of
Stockholders in 2001, together with certain information about them, are set
forth below:
Michael E. Danziger...................... Michael E. Danziger, 41, has served as
one of the Company's directors since July
1998. Mr. Danziger is currently a
consultant in the information and
publishing field. From 1991 to 1999, Mr.
Danziger was Chairman of Thomson
Financial's Database Group, a division of
Thomson Financial which provides
financial information, products and
services. Since 1993, he has also been an
executive officer of Rand Publishing
Company Inc.
David R. Haas............................ David R. Haas, 58, has served as one of
the Company's directors since July 1998.
Mr. Haas has been a financial consultant
in the entertainment and communications
industries since 1995. From 1990 until
1994, he was Senior Vice President and
Controller of Time Warner, a leading
media and entertainment company. He is
currently a director of TODD-AO
Corporation.
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Sidney Lapidus........................... Sidney Lapidus, 61, has served as one of
the Company's directors since December
1996. Mr. Lapidus is a General Partner of
Warburg, Pincus & Co. ("WP") and a Member
and Managing Director of E.M. Warburg,
Pincus & Co., LLC ("EMW LLC") or its
predecessors since January 1982, where he
has been employed since 1967. He is
currently a director of Caribiner
International, Inc., Grubb and Ellis
Company, Radio Unica Communications
Corp., Lennar Corporation, Four Media
Company and several privately held
companies.
David E. Libowitz........................ David E. Libowitz, 37, has served as one
of the Company's directors since December
1996. Mr. Libowitz is a General Partner
at WP and a Member and Managing Director
of EMW LLC, where he has been employed
since July 1991. He is currently a
director of Caribiner International, Inc.
and Four Media Company.
Mason P. Slaine.......................... Mason P. Slaine, 46, has served as one of
the Company's directors since December
1996. Mr. Slaine has been President and
Chief Executive Officer of the Company
since December 1996. Since 1993, Mr.
Slaine has also been President of Rand
Publishing Company Inc., a small holding
company that has made investments in the
publishing industry. From 1994 to 1996,
Mr. Slaine served as President of Thomson
Financial, a division of the Thomson
Corporation that provides financial
information, research, analysis and
software products worldwide. From 1993 to
1994, he served as President of Thomson
Financial Publishing, a division of
Thomson Financial.
RECOMMENDATIONS AND VOTE
The affirmative vote of a plurality of the shares of Common Stock present,
either in person or by proxy, at the Annual Meeting and entitled to vote is
required for the election of the directors.
THE BOARD RECOMMENDS A VOTE "FOR" ELECTION OF THE NOMINEES LISTED ABOVE.
PROPOSAL NUMBER TWO
THE STOCK OPTION PLAN PROPOSAL
On July 15, 1998, the Board adopted the Company's 1998 Stock Option Plan
(the "Option Plan"), and reserved 866,886 shares of Common Stock for issuance
under the Option Plan. The Board has
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amended and restated the Option Plan, subject to stockholder approval, to
increase the number of shares of Common Stock reserved for issuance thereunder
by 500,000 to a total of 1,366,886 shares.
The Company is seeking stockholder approval of the Option Plan in order to
comply with the requirements of Sections 162(m) and 422 of the Internal Revenue
Code of 1986 (the "Code") and the requirements of the New York Stock Exchange
("NYSE"). The following summary of the Option Plan is qualified in its entirety
by express reference to the text of the Option Plan, a copy of which was filed
with the Securities and Exchange Commission (the "Commission"). Under the Option
Plan, options to purchase the Common Stock may be granted which are qualified as
"incentive stock options" within the meaning of Section 422 of the Code ("ISOs")
and which are not so qualified ("NQSOs") (collectively or individually, ISOs and
NQSOs may be referred to as "Options").
PURPOSE AND ELIGIBILITY
The purpose of the Option Plan is to promote the Company's long-term
financial success by enhancing the Company's ability to attract, retain and
reward individuals who can and do contribute to its success and to further align
the interests of the Company's key personnel with its stockholders. The
full-time employees of the Company and its subsidiaries, and its directors, are
eligible to receive Options under, and participate in, the Option Plan. The
approximate number of individuals eligible to participate in the Option Plan is
375.
ADMINISTRATION
The Option Plan is administered by the Board or a Committee (the entity
administering the Option Plan hereafter called the "Committee") appointed by the
Board from among its members. The Committee, in its sole discretion, determines
which individuals may participate in the Option Plan and the type, extent and
terms of the Option awards to be granted. In addition, the Committee interprets
the Option Plan and makes all other determinations with respect to the
administration of the Option Plan.
OPTIONS
The Option Plan allows for the discretionary grant of Options by the
Committee to eligible individuals. The terms and conditions of Options granted
under the Option Plan are set out from time to time in agreements between the
Company and the individuals receiving such Options.
The Committee may grant Options to any eligible person; provided, however,
that only employees of the Company and its subsidiaries may receive ISOs. The
exercise price of the Options will be determined by the Committee at the time of
grant and will be set forth in a Stock Option Agreement between the Company and
the participant; provided, however, that the exercise price of an ISO will not
be less than the fair market value of the Common Stock on the date of grant.
Options will vest and become exercisable within such period or periods (not to
exceed 10 years) as determined by the Committee and set forth in the Stock
Option Agreement. Options will have a 10-year term from the date of grant,
subject to earlier termination upon termination of a participant's employment or
service as a director, as applicable, as determined by the Committee and set
forth in the Stock Option Agreement. Options that have become exercisable may be
exercised by delivery of written notice of exercise to the Company accompanied
by full payment of the Option exercise price and any applicable withholdings.
The Option exercise price may be paid in cash, by certified check, wire
transfer, bank draft or money order payable to the order of the Company or in
accordance with any cashless exercise procedures adopted by the Committee.
ADJUSTMENTS FOR RECAPITALIZATION, MERGER, ETC. OF THE COMPANY
The Option Plan and any outstanding Options shall be subject to adjustment,
as determined by the Committee, as to the maximum number of shares that may be
granted under the Option Plan, the maximum number of shares with respect to
which options may be granted to any single individual
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during any calendar year under the Option Plan, the number of shares covered by
each outstanding Option, and/or the exercise price thereof in the event of
certain changes in the outstanding Common Stock by reason of stock splits or
other subdivision or consolidation of shares of Common Stock, or by reason of
other capital adjustments occurring after the date of grant of any such Option.
In the event of a sale, reorganization, consolidation or merger of the Company
(a "Corporate Event"), (i) an individual holding outstanding Options shall be
entitled to receive upon the exercise of an Option, the same number and kind of
shares of Common Stock or the same amount of property, cash or other securities
as he would have been entitled to receive upon the occurrence of such Corporate
Event as if he had been, immediately prior to such event or on the record date
relating to such event, the holder of the number of shares of Common Stock
covered by his Options, and (ii) if the Company is not the surviving corporation
in such Corporate Event, the Company shall require the successor corporation or
its parent to assume such outstanding Options; provided, however, that the
Committee may, in its discretion and in lieu of requiring such assumption,
provide that all outstanding Options shall terminate as of the consummation of
such Corporate Event and accelerate the exercisabilitiy of all outstanding
Options to any date prior to the date of such Corporate Event.
EFFECT OF CHANGE IN CONTROL
In the event of a Change in Control (as defined in the Option Plan),
notwithstanding any vesting schedule provided for by the Committee, all Options
shall become immediately exercisable with respect to 100 percent of the shares
subject to such Option.
SHARES SUBJECT TO THE OPTION PLAN
As noted above, the Option Plan has been amended to increase the maximum
number of shares of Common Stock available for issuance thereunder by 500,000 to
a total of 1,366,886 shares; provided, however, that no more than 350,000 shares
of Common Stock may be issued to any one person pursuant to awards of Options
during any one year.
MARKET VALUE
The closing price of the Company's Common Stock on the NYSE on March 23,
2000 was $36.5625 per share.
AMENDMENT AND TERMINATION
The Board may from time to time, to the extent permitted by applicable law,
amend, suspend, or discontinue the Option Plan; provided, however, that the
Board may not take any action which would have a material adverse effect on
outstanding Options or any unexercised rights under outstanding Options without
the consent of participants whose Options would be adversely affected thereby.
FEDERAL TAX CONSEQUENCES
The following is a brief discussion of the Federal income tax consequences
of transactions with respect to Options under the Option Plan based on the Code,
as in effect as of the date of this summary. This discussion is not intended to
be exhaustive and does not describe any state or local tax consequences.
ISOS. No taxable income is realized by the optionee upon the grant or
exercise of an ISO. If Common Stock is issued to an optionee pursuant to the
exercise of an ISO, and if no disqualifying disposition of such shares is made
by such optionee within two years after the date of grant or within one year
after the transfer of such shares to such optionee, then (1) upon the sale of
such shares, any amount realized in excess of the Option price will be taxed to
such optionee as a long-term capital gain and any loss sustained will be a
long-term capital loss, and (2) no deduction will be allowed to the Company for
Federal income tax purposes.
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If the Common Stock acquired upon the exercise of an ISO is disposed of
prior to the expiration of either holding period described above, generally,
(1) the optionee will realize ordinary income in the year of disposition in an
amount equal to the excess (if any) of the fair market value of such shares at
exercise (or, if less, the amount realized on the disposition of such shares)
over the Option price paid for such shares and (2) the Company will be entitled
to deduct such amount for Federal income tax purposes if the amount represents
an ordinary and necessary business expense. Any further gain (or loss) realized
by the optionee upon the sale of the Common Stock will be taxed as short-term or
long-term capital gain (or loss), depending on how long the shares have been
held, and will not result in any deduction by the Company.
If an ISO is exercised more than three months following termination of
employment (subject to certain exceptions for disability or death), the exercise
of the Option will generally be taxed as the exercise of a NQSO, as described
below.
For purposes of determining whether an optionee is subject to an alternative
minimum tax liability, an optionee who exercises an ISO generally would be
required to increase his or her alternative minimum taxable income, and compute
the tax basis in the stock so acquired, in the same manner as if the optionee
had exercised a NQSO. Each optionee is potentially subject to the alternative
minimum tax. In substance, a taxpayer is required to pay the higher of his/her
alternative minimum tax liability or his/her "regular" income tax liability. As
a result, a taxpayer has to determine his/her potential liability under the
alternative minimum tax.
NQSOS. With respect to NQSOs: (1) no income is realized by the optionee at
the time the Option is granted; (2) generally, at exercise, ordinary income is
realized by the optionee in an amount equal to the excess, if any, of the Fair
Market Value of the shares on such date over the exercise price, and the Company
is generally entitled to a tax deduction in the same amount, subject to
applicable tax withholding requirements; and (3) at sale, appreciation (or
depreciation) after the date of exercise is treated as either short-term or
long-term capital gain (or loss) depending on how long the shares have been
held.
SPECIAL RULES APPLICABLE TO CORPORATE INSIDERS
As a result of the rules under Section 16(b) of the Exchange Act
("Section 16(b)"), and depending upon the particular exemption from the
provisions of Section 16(b) utilized, the officers and directors and persons
owning more than 10 percent of the outstanding shares of stock ("Insiders") may
not receive the same tax treatment as set forth above with respect to the grant
and/or exercise of Options. Generally, Insiders will not be subject to taxation
until the expiration of any period during which they are subject to the
liability provisions of Section 16(b) with respect to any particular Option.
Insiders should check with their own tax advisers to ascertain the appropriate
tax treatment for any particular Option.
NEW PLAN BENEFITS
Because the grant of awards under the Option Plan is entirely within the
discretion of the Committee, the Company cannot forecast the extent or nature of
awards that will be granted in the future. Therefore, the Company has omitted
the tabular disclosure of the benefits or amounts allocated under the Option
Plan. Information with respect to compensation paid and other benefits,
including Options granted in respect of the 1999 fiscal year to the Named
Executive Officers is set forth in the Summary Compensation Table.
RECOMMENDATION AND VOTE
Approval of the Option Plan proposal requires the affirmative vote of a
majority of the shares of Common Stock present, in person or by proxy, at the
Annual Meeting, and entitled to vote thereon.
THE BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE OPTION PLAN PROPOSAL.
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PROPOSAL NUMBER THREE
RATIFICATION OF INDEPENDENT ACCOUNTANTS
Subject to stockholder ratification, the Board, upon recommendation of the
Audit Committee, has appointed the firm of Ernst & Young LLP as the Company's
independent accountants for the fiscal year ending December 31, 2000. This firm
has examined the accounts of the Company since inception. If the stockholders do
not ratify this appointment, the Board will consider other independent
accountants. One or more members of Ernst & Young LLP is expected to be present
at the Annual Meeting and will have the opportunity to make a statement if they
so desire and will be available to respond to questions.
RECOMMENDATION AND VOTE
The affirmative vote of a majority of the shares of Common Stock present,
either in person or by proxy, at the Annual Meeting and entitled to vote is
required for the ratification of the independent accountants.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT ACCOUNTANTS.
THE BOARD AND ITS COMMITTEES
The Board is responsible for the Company's management and direction and for
establishing broad corporate policies. The Board held five meetings during the
year ended December 31, 1999. All directors were present in person at all
meetings.
COMMITTEES OF THE BOARD
The Board has two standing committees: the Audit Committee and the
Compensation Committee. The Company does not have a standing committee on
nominations. The principal responsibilities of each committee are described
below.
AUDIT COMMITTEE. In 1999, the Audit Committee was comprised of Michael
Danziger and David Haas. The Audit Committee is responsible for meeting with the
Company's independent accountants regarding, among other issues, audits and
adequacy of the Company's accounting and control systems. The Audit Committee
also recommends a firm of certified independent accountants to serve as the
Company's independent accountants, authorizes all audit fees and other
professional services rendered by the accountants and periodically reviews the
independence of the accountants. It held two meetings in 1999.
COMPENSATION COMMITTEE. In 1999, the Compensation Committee was comprised
of Sidney Lapidus and David Libowitz. The Compensation Committee has the
authority to determine all matters relating to the compensation of the Company's
employees. It held no meetings during 1999.
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company or its affiliates (each,
an "Independent Director"), receives a fee of $1,000 for each meeting of the
Board attended in person and $500 for each telephonic meeting of the Board
attended. The Chairman of each committee of the Board also receives an annual
fee of $1,000. On October 29, 1999, each Independent Director received a grant
of options to purchase 828 shares of Common Stock at the then current market
price of $18.125 per share. Subsequent to 1999, each Independent Director will
receive an annual grant of a number of options equal to $15,000 divided by the
fair market value of one share of Common Stock on the date of grant, which
options will be exercisable at a price per share equal to the fair market value
of the Common Stock on such date. All options granted to Independent Directors
will vest immediately.
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Directors who are not Independent Directors will not receive fees for serving on
the Board or any committee thereof. In 1999, the Company had two Independent
Directors (Messrs. Danziger and Haas) and three directors employed by the
Company or its affiliates. All directors are reimbursed for reasonable
out-of-pocket expenses incurred in attending meetings of the Board and any
committee thereof.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Commission requires issuers to disclose the existence of any other
company in which both (i) the company's executive officer serves on the board of
directors and/or compensation committee and (ii) the company's director serves
as an executive officer. There are no relationships that are required to be
disclosed hereunder.
LITIGATION
Mason P. Slaine, the Company's President and Chief Executive Officer, and
Michael E. Danziger, a director of the Company, are shareholders, officers and
directors of Rand Publishing Company Inc. ("Rand"), a private holding company
that has made investments in the publishing industry, and were defendants in a
lawsuit alleging that Mr. Slaine breached his fiduciary duty to certain other
investors and usurped corporate opportunities available to Rand by investing in
the Company and by participating in the acquisition by the Company of various
businesses. On December 2, 1998, Rand and Mr. Slaine filed a motion to dismiss
the Rand investors' complaint against them. The court granted the motion on
November 3, 1999 on the grounds that the plaintiffs had not alleged with
particularity the efforts, if any, they had made to compel the board of
directors of Rand to initiate these derivative claims in the first instance. The
motion was granted with leave to plaintiffs to serve an amended complaint
setting forth in detail the reasons why such demand on the Rand board would have
been futile.
EXECUTIVE OFFICERS
Executive officers are elected by the Board of Directors and hold office
until their successors have been duly elected and qualified or until their
earlier resignation or removal from office. A brief biography of each executive
officer of the Company as of February 15, 2000 is provided below (other than
Mr. Slaine, whose biography is set forth above).
Vincent A. Chippari, 39, has served as Executive Vice President and Chief
Financial Officer of the Company since January 1998. From 1990 to 1996,
Mr. Chippari was Chief Financial Officer of Thomson Business Information, which
serves the global scientific, medical, intellectual property, technical and
general reference markets. From 1996 to 1997, he was Executive Vice President,
Operations, of Thomson Intellectual Property/Automotive Group, as well as
General Manager of its Derwent Information North America unit, a patent and
scientific information business.
Mark J. Clinton, 40, has served as President of the Company's Master Data
Center unit since December 1995. The Company acquired Master Data Center in
August 1999. Mr. Clinton has held senior management positions at Master Data
Center since February 1991. Prior to joining Master Data Center, Mr. Clinton was
a consultant with Andersen Consulting for eight years.
Norman R. Snesil, 56, has served as President of the Company's CRC Press
unit since May 1999. From 1998 to 1999, he was President of Q.E.P. Co., Inc.
From 1996 to 1998, Mr. Snesil was President of Continental Graphics Company.
From 1990 to 1996, he was President and Chief Executive Officer of Thomson
Healthcare, a medical information unit of the Thomson Corporation.
Steven Wolfson, 55, has served as President of the Company's MicroPatent
unit since July 1997. From 1996 to 1997, Mr. Wolfson was Vice President and
Chief Financial Officer of MicroPatent's
9
predecessor. From 1994 to 1996, he was Vice President and Chief Financial
Officer of American Banker, a financial information publishing company. From
1993 to 1994, Mr. Wolfson was an independent consultant in the financial and
administrative fields.
EMPLOYMENT AGREEMENTS
MASON P. SLAINE
The Company has an employment agreement, dated as of March 15, 2000, with
Mason P. Slaine which provides that Mr. Slaine will serve as President and Chief
Executive Officer of the Company until June 30, 2001, subject to automatic
one-year renewals unless either party provides notice of non-renewal.
Mr. Slaine's employment agreement provides for a base salary of $325,000 through
June 30, 2000, increasing to $700,000 through June 30, 2001 and $750,000 through
June 30, 2002 if the employment term is extended. Thereafter Mr. Slaine's base
salary will be subject to increases at the discretion of the Board of Directors.
In addition, Mr. Slaine is eligible to receive an annual cash bonus, as
determined by the Board of Directors. He is also entitled to participate in
health, insurance, pension, automobile and other benefits provided to other
senior executives of the Company.
In connection with the execution of the employment agreement, the Company
granted to Mr. Slaine options to purchase 200,000 shares of Common Stock at a
purchase price per share equal to the fair market value of one share of Common
Stock on the date of grant. These options will vest and become exercisable at
the rate of 100,000 shares each on the first and second anniversaries of the
date of grant.
In the event of (i) Mr. Slaine's death during his term of employment with
the Company or (ii) the termination of his employment by the Company without
Just Cause (as defined in the employment agreement) or (iii) his resignation
from employment for Good Reason (as defined in the employment agreement), the
Company is obligated to continue paying Mr. Slaine's base salary for a 12 month
period following the date of termination. In addition, the Company is required
to continue to provide health insurance benefits during such 12 month period. In
the event that Mr. Slaine resigns within 90 days following a Change of Control
or the Company terminates Mr. Slaine's employment without Just Cause following a
Change of Control, the Company is obligated to pay to Mr. Slaine a lump sum
amount equal to three times (i) his then current base salary plus (ii) the bonus
he received in the prior fiscal year. In addition, the Company is required to
continue to provide health insurance benefits during the 12 month period
immediately following such termination. To the extent that any payment under the
employment agreement would be subject to an excise tax imposed by Section 4999
of the Code, the Company is required to make gross-up payment (the "Gross-up
Payment") to Mr. Slaine to cover the excise tax and any taxes incurred by
Mr. Slaine upon the payment of the Gross-up Payment.
Mr. Slaine's employment agreement also contains a non-complete clause, which
applies until the second anniversary of the termination of Mr. Slaine's
employment, unless he is terminated by the Company without Just Cause or resigns
for Good Reason. The employment agreement also contains confidentiality and
non-solicitation provisions. In consideration for these non-compete,
non-solicitation and confidentiality covenants the Company has agreed to pay to
Mr. Slaine 50% of his then current base salary over the course of the two-year
period.
VINCENT A. CHIPPARI
The Company has an employment agreement, dated as of January 19, 1998, with
Vincent A. Chippari which provides that Mr. Chippari will serve as executive
Vice President and Chief Financial Officer fo the Company until January 19,
2001, subject to automatic one-year renewals unless either party provides notice
of non-renewal. Mr. Chippari's employment agreement provides for a base salary
of $200,000 per year, increased annually to the extent of any net increase in
the Consumer Price Index. In addition, Mr. Chippari is eligible to receive an
annual cash bonus in an amount up to 50% of his
10
base salary based upon the meeting of certain objectives approved by the Board
of Directors. Mr. Chippari is also entitled to participate in health, insurance,
pension and other benefits provided to other senior executives of the Company.
In the event that Mr. Chippari resigns or his employment terminates for
"Cause" (as defined in his employment agreement), Mr. Chippari will be entitled
to receive any accrued but unpaid base salary, unused vacation or unreimbursed
expenses. In the event the Company terminates his employment without Cause, in
addition to the amounts specified in the foregoing sentence, Mr. Chippari will
continue to receive his base salary and health and insurance benefits for a
period of 12 months following the date of such termination. Mr. Chippari's
employment agreement also contains a non-compete clause, which applies until the
first anniversary of the termination of Mr. Chippari's employment, and
confidentiality and non-solicitation provisions.
NORMAN R. SNESIL
The Company has an employment agreement, dated as of May 17, 1999, with
Norman Snesil which provides that Mr. Snesil will serve as President of CRC
Press until May 17, 2001. Mr. Snesil's employment agreement provides for a base
salary of $225,000 per annum. In addition, Mr. Snesil is entitled to receive a
bonus equal to 50% of his base salary based upon meeting objectives determined
by the Chairman of CRC Press and the Company's Board of Directors. Mr. Snesil is
also entitled to participate in health, insurance, pension and other benefits
provided to other senior executives of the Company.
Mr. Snesil's employment agreement provided for the grant of options, dated
May 25, 1999, to purchase 50,000 shares of Common Stock at the then current
market price of $19.125 per share. Pursuant to a stock option agreement,
Mr. Snesil's options are exercisable for a period of ten years from the date of
grant. The options vest and become exercisable in three equal annual
installments from the date of grant.
In the event that Mr. Snesil's employment is terminated for "Cause" (as
defined in his employment agreement), Mr. Snesil will be entitled to receive any
accrued but unpaid base salary, unused vacation or unreimbursed expenses. In the
event the Company terminates his employment without Cause, in addition to the
amounts specified in the foregoing sentence, Mr. Snesil will continue to receive
his base salary and health and insurance benefits for a period equal to the
shorter of 18 months from the date of termination or the remaining employment
term. Mr. Snesil's employment agreement also contains a non-compete clause,
which applies until the first anniversary of the termination of Mr. Snesil's
employment, and confidentiality and non-solicitation provisions.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"), THAT MIGHT
INCORPORATE FILINGS BY REFERENCE, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN
PART, THE FOLLOWING REPORT OF THE BOARD OF DIRECTORS AND COMPENSATION COMMITTEE
(THE "COMPENSATION COMMITTEE") ON EXECUTIVE COMPENSATION AND THE PERFORMANCE
GRAPHS SHALL NOT BE INCORPORATED BY REFERENCE INTO ANY SUCH FILINGS.
REPORT OF THE BOARD OF DIRECTORS AND THE BOARD COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee's responsibilities include establishing the
Company's policies governing the compensation of its officers and other key
executives. The Compensation Committee approves all elements of compensation for
executive officers. The Board is responsible for the administration of the
Company's 1998 Stock Option Plan.
11
EXECUTIVE COMPENSATION. The Company's compensation program consists of base
salary, annual incentive payments, stock options and employee benefits. The goal
of the Company's compensation program is to motivate and reward its executive
officers and other key employees to improve long-term stockholder value and to
attract and retain the highest quality executive and key employee talent
available. The Company's executive compensation program is designed to align
executive compensation practices with increasing the value of the Common Stock
and to foster adherence to, and promotion of, the Company's business mission,
values, strategic goals and annual objectives.
The Compensation Committee has the authority to determine all matters
relating to compensation of the Company's employees. The Compensation Committee
will consider an executive's scope of responsibilities, level of experience,
individual performance and attainment of pre-established goals as well as the
Company's business plan and general economic factors. In making its decisions,
and to maintain the desired levels of competitiveness and congruity with the
Company's long-term performance goals, the Compensation Committee will receive
input from the Company's Chief Executive Officer and Chief Financial Officer.
BASE SALARY AND BONUS. The salary levels for executive officers are
determined by such officer's level of job responsibility and experience, job
performance and attainment of pre-established goals. Additional consideration is
given to salaries for a comparable position within the industry and the
Company's ability to pay. Bonus payouts to the Company's executive officers and
other key employees are based on the attainment of corporate earnings goals and
certain individual performance goals.
OPTIONS. The Board believes that stock options are important to provide an
inducement to obtain and retain the services of the Company's employees and the
employees of its subsidiaries and to increase their proprietary interest in the
Company's success. Long-term incentives in the form of stock options provide a
vehicle to reward executive officers only if there is an increase in stockholder
value. Stock options are granted on a discretionary basis within a guideline
range that takes into account the position responsibilities of the Company's
executive officers and key employees whose contributions and skills are
important to the Company's long-term success.
In February 1999, May 1999, September 1999, October 1999 and November 1999,
the Board granted 5,477, 51,595, 34,345, 13,187 and 10,959 options,
respectively, to purchase Common Stock to officers or key employees of the
Company or its subsidiaries. Such options were granted at exercise prices equal
to the respective market prices of the Common Stock on the dates of grant.
POLICY REGARDING QUALIFYING COMPENSATION. Section 162(m) of the Internal
Revenue Code imposes a $1,000,000 limitation on tax-deductible remuneration paid
to any one of the five most highly compensated executive officers of a
publicly-held corporation, unless the compensation is treated as performance
related or is otherwise exempt from the provisions of Section 162(m). The
compensation paid to executive officers complies with these performance
requirements for the fiscal year ending December 31, 1999.
BOARD OF DIRECTORS COMPENSATION COMMITTEE
MICHAEL E. DANZIGER SIDNEY LAPIDUS
DAVID R. HAAS DAVID E. LIBOWITZ
SIDNEY LAPIDUS
DAVID E. LIBOWITZ
MASON P. SLAINE
12
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
---------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) OTHER OPTIONS(#)
- --------------------------- -------- ---------- --------- ---------- ------------
Mason Slaine .............................. 1999 325,000 -- -- --
President and Chief Execuitve Officer 1999 325,000 -- -- --
1997 300,000 -- $1,000,000(1) --
Vincent A. Chippari (2) ................... 1999 203,000 94,000 -- --
President and Chief Executive, CRC Press 1998 192,000 100,000 -- 104,167
LLC and Chief Financial Officer 1997 -- -- -- --
Norman R. Snesil (3) ...................... 1999 173,000 -- -- 50,000
President and Chief Executive, CRC Press
LLC
Steven Wolfson (4) ........................ 1999 140,000 65,000 -- --
President, MicroPatent LLC 1998 129,000 50,000 -- 10,417
1997 62,500 25,000 -- --
Mark J. Clinton (5) ....................... 1999 63,000 10,000 -- 10,997
President, Master Data Center
- ------------------------
(1) Represents a one-time payment related to the formation of the Company and
its initial acquisitions.
(2) Mr. Chippari's employment commenced on January 19, 1998.
(3) Mr. Snesil's employment commenced on May 17, 1999.
(4) Mr. Wolfson's compensation includes compensation from July 2, 1997, the date
of the Company's acquisition of MicroPatent LLC.
(5) Mr. Clinton's compensation includes compensation from August 13, 1999, the
date of the Company's acquisition of Master Data Center, Inc.
13
STOCK OPTION GRANTS IN 1999
The following table sets forth information concerning individual grants of
options to purchase Common Stock made to the Named Executive Officers during the
fiscal year ended December 31, 1999. No options were exercised by the Named
Executive Officers during the fiscal year ended December 31, 1999.
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
RATES OF
NUMBER OF STOCK PRICE
SECURITIES PERCENT OF APPRECIATION
UNDERLYING TOTAL OPTIONS EXERCISE OR FOR OPTION TERM (1)
OPTIONS GRANTED TO BASE PRICE EXPIRATION --------------------
NAME GRANTED (#) EMPLOYEES ($/SHARE) DATE 5% ($) 10% ($)
- ---- ----------- ------------- ----------- ---------- -------- ---------
Norman R. Snesil.................... 50,000(2) 43.3 19.125 5/25/09 601,380 1,524,016
Mark J. Clinton..................... 10,997(3) 9.5 18.1875 9/17/09 125,784 318,761
- ------------------------
(1) Amounts reflect certain assumed rates of appreciation set forth in the
executive compensation disclosure rules of the Securities and Exchange
Commission. Actual gains, if any, on stock option exercises will depend on
future performance of the Common Stock. No assurance can be made that the
amounts reflected in these columns will be achieved. The values in these
columns assume that the fair market value on the date of grant of each
option was equal to the exercise price thereof.
(2) Options were granted on May 25, 1999 and vest and become exercisable in
three equal annual installments from the date of grant.
(3) Options were granted on September 17, 1999 and vest and become exercisable
in four equal annual installments from the date of grant.
14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information, as of March 23, 2000,
regarding the beneficial ownership of Common Stock by (i) each stockholder who
the Company knows owns more than 5% of the outstanding shares of Common Stock,
(ii) each director, (iii) each executive officer named in the Summary
Compensation Table and (iv) all directors and executive officers as a group.
SHARES BENEFICIALLY OWNED
-------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENT(1)
- ------------------------------------ ----------- -----------
Warburg, Pincus Ventures, L.P. (2) ......................... 9,802,074 45.5
466 Lexington Avenue
New York, New York 10017
Mason P. Slaine ............................................ 2,224,063 10.3
2777 Summer Street, Suite 209
Stamford, Connecticut 06905
Vincent A. Chippari (3)..................................... 34,722 *
Mark J. Clinton............................................. 0 *
Norman R. Snesil............................................ 0 *
Steven Wolfson (4).......................................... 3,604 *
Michael E. Danziger (5)..................................... 91,934 *
David R. Haas (5)........................................... 6,808 *
Sidney Lapidus (6).......................................... 9,802,074 45.5
David E. Libowitz (6)....................................... 9,802,074 45.5
All directors and executive officers, as a group (nine 12,163,205 56.5
persons)..................................................
- ------------------------
* Less than 1%.
(1) Pursuant to the regulations of the Commission, shares are deemed to be
"beneficially owned" by a person if such person directly or indirectly has
or shares the power to vote or dispose of such shares, whether or not such
person has any pecuniary interest in such shares, or the right to acquire
the power to vote or dispose of such shares within 60 days, including any
right to acquire through the exercise of any option, warrant or right.
(2) The sole general partner of Warburg, Pincus Ventures, L.P. ("Warburg
Pincus") is Warburg, Pincus & Co., a New York general partnership ("WP").
E.M. Warburg, Pincus & Co., LLC, a New York limited liability company ("EMW
LLC"), manages Warburg Pincus. Lionel I. Pincus is the Managing Partner of
WP and the Managing Member of EMW LLC and may be deemed to control both
entities.
(3) Includes 34,722 shares issuable upon exercise of options that are vested and
exercisable.
(4) Includes 2,604 shares issuable upon exercise of options that are vested and
exercisable.
(5) Includes 2,328 shares issuable upon exercise of options that are vested and
exercisable.
(6) All shares indicated as beneficially owned by Mr. Lapidus and Mr. Libowitz
are owned by Warburg Pincus and are included because of their affiliation
with Warburg Pincus. Both of them are Members and Managing Directors of EMW
LLC and General Partners of WP. Messrs. Lapidus and Libowitz disclaim
beneficial ownership of the shares owned by Warburg Pincus. The mailing
address for Messrs. Lapidus and Libowitz is c/o Warburg, Pincus & Co., 466
Lexington Avenue, New York, New York 10017.
15
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Warburg Pincus and Mr. Slaine (the "Initial Stockholders") are entitled to
certain registration rights with respect to their respective shares of Common
Stock. Pursuant to a registration rights agreement, the Initial Stockholders
have the right to request two registrations of their shares of Common Stock,
provided that the anticipated public offering price equals $15 million or more,
and unlimited registrations on Form S-3, provided that the anticipated aggregate
offering price exceeds $5 million. In addition, the Initial Stockholders are
entitled to have their shares included in an unlimited number of registrations
initiated by the Company, subject to certain customary restrictions. The rights
of the Initial Stockholders pursuant to the registration rights agreement had
been subject to a 180 day lock-up agreement which expired on February 12, 1999.
In connection with the Company's recent public offering, the Initial
Stockholders, as well as the directors and Mr. Chippari, agreed to a lockup
which will expire on June 18, 2000. In general, all fees, costs and expenses of
such registration (other than underwriting discounts and selling commissions)
will be borne by the Company. The Company has agreed to indemnify the Initial
Stockholders from any liability arising out of or relating to any untrue
statement of a material fact or any omission of a material fact in any
registration statement or prospectus filed by the Company pursuant to the
registration rights agreement, subject to certain exceptions.
SHARE INVESTMENT PERFORMANCE
The following graph compares the cumulative total stockholder returns on the
Common Stock based on an investment of $100 after the close of the market on
(i) August 7, 1998, the effective date of the Company's initial public offering
and (ii) the close of the market on December 31, 1999 against the Russell 2000
Index ("Russell 2000") and an industry peer group consisting of McGraw-Hill
Companies, FactSet Research Systems, Thomson Corporation and Reuters Group:
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
VALUE OF $100
8/7/98 12/31/99
Information Holdings 100.00 240.93
Russell 2000 100.00 121.39
Peer Group 100.00 180.50
8/7/98 12/31/99
-------- --------
Information Holdings........................................ $100 $240.93
Russell 2000................................................ 100 121.39
Peer Group.................................................. 100 180.50
16
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act ("Section 16(a)") requires the Company's
executive officers, directors and persons who beneficially own more than 10% of
the Common Stock to file initial reports of ownership and reports of changes in
ownership with the Commission and the NYSE. Executive officers, directors and
greater than 10% beneficial owners are required by Commission regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on the Company's review of the copies of such forms furnished
to the Company and written representations from the executive officers,
directors and greater than 10% beneficial owners, the Company believes that all
Section 16(a) filing requirements applicable to the Company's executive
officers, directors and greater than 10% owners were complied with during Fiscal
1999.
17
STOCKHOLDER NOMINATIONS AND PROPOSALS FOR 2001
Any proposals intended to be presented by stockholders at the Company's 2001
Annual Meeting of Stockholders must be received by the Company for inclusion in
the proxy statement for such annual meeting by December 1, 2000. Such proposals
must also meet the requirements of Rule 14a-8 of the Commission relating to
stockholders' proposals. A stockholder proposal outside of the processes of
Rule 14a-8 will be considered untimely if received by the Company after
February 15, 2001.
OTHER BUSINESS
It is not anticipated that there will be presented to the Annual Meeting any
business other than the election of directors, the approval of the Option Plan
and the ratification of accountants, and the Board was not aware, a reasonable
time before this proxy solicitation, of any other matters which might properly
be presented for action at the meeting. If any other business should come before
the Annual Meeting, the persons named on the enclosed proxy card will have
discretionary authority to vote all proxies in accordance with their best
judgment.
Proxies in the form enclosed are solicited by or on behalf of the Board. The
cost of this solicitation will be borne by the Company. In addition to the
solicitation of the proxies by use of the mails, some of the Company's officers
and regular employees, without extra remuneration, may solicit proxies
personally, or by telephone or otherwise. In addition, arrangements will be made
with brokerage houses and other custodian, nominees and fiduciaries to forward
proxies and proxy material to their principals, and the Company will reimburse
them for their expenses in forwarding soliciting materials, which are not
expected to exceed $5,000.
It is important the proxies be returned promptly. Therefore, stockholders
are urged to sign, date and return the enclosed proxy card in the accompanying
stamped and addressed envelope.
By Order of the Board
/s/ Vincent A. Chippari
Vincent A. Chippari
Secretary
March 30, 2000
18
DETACH HERE
PROXY
INFORMATION HOLDINGS INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 25, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
AND SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE PRE-PAID ENVELOPE PROVIDED
FOR YOU MAILING CONVENIENCE.
The undersigned, having received notice of the meeting and proxy
statement therefor, and revoking all prior proxies, hereby appoint(s) Mason P.
Slaine and Vincent A. Chippari, and each of them, attorneys or attorney of the
undersigned (with full power of substitution in them and each of them) for and
in the name(s) of the undersigned to attend the Annual Meeting of Stockholders
of INFORMATION HOLDINGS INC. (the "Company") to be held at the New York Marriott
East Side Hotel, 525 Lexington Avenue, New York, New York on Tuesday, April 25,
2000 at 2:30 p.m., Eastern Standard Time, and any adjourned sessions thereof,
and there to vote and act upon the following matters in respect of all shares of
stock of the Company which the undersigned will be entitled to vote or act
upon, with all the powers the undersigned would possess if personally present.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DESCRIBED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. THE SHARES REPRESENTED BY THIS PROXY WILL
BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS GIVEN WITH RESPECT
TO ANY PROPOSAL, THIS PROXY WILL BE VOTED FOR SUCH PROPOSAL. Attendance of the
undersigned at the meeting or at any adjournment thereof will not be deemed to
revoke this proxy unless the undersigned shall revoke this proxy in writing.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE URGED TO
COMPLETE, DATE, SIGN AND RETURN THIS PROXY IN THE ACCOMPANYING ENVELOPE.
- ----------- ------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- ------------
DETACH HERE
/X/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
1. Election of Directors.
NOMINEES: (01) Michael E. Danzinger, (02) David R. Haas,
(03) Sidney Lapidus, (04) David E. Libowitz,
(05) Mason P. Slaine
FOR / / / / WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
/ / ______________________________________
For all nominees except as noted above
FOR AGAINST ABSTAIN
2. To ratify and approve the amendment / / / / / /
to the 1998 Stock Option Plan.
3. To ratify and approve the selection by / / / / / /
the Board of Directors of Ernst &
Young LLP as independent public
accountants for the Company for the
current fiscal year ending December
31, 2000.
4. To transact such other business as may properly come before
the meeting or any adjournment thereof.
MARK HERE / / MARK HERE / /
FOR ADDRESS IF YOU PLAN
CHANGE AND TO ATTEND
NOTE AT LEFT THE MEETING
Please sign exactly as your name appears hereon. When shares are held by
joint owners both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Signature:________________ Date: ______ Signature________________ Date: ______
Annex A
INFORMATION HOLDINGS INC.
1998 STOCK OPTION PLAN
(AMENDED AND RESTATED AS OF MARCH 28, 2000)
* * *
ARTICLE I
PURPOSE
This 1998 Stock Option Plan (the "Plan") is intended to encourage stock
ownership in Information Holdings Inc. (the "Company") by employees and
directors of the Company and its subsidiaries in order to increase their
proprietary interest in the Company's success and to encourage such employees
and directors to remain in the service of the Company and its subsidiaries.
ARTICLE II
CERTAIN DEFINITIONS
"AFFILIATE" of an entity shall mean any person or entity controlling,
controlled by or under common control with, such entity, where "control" means
the power to exercise a controlling influence over the management or policies of
such person or entity.
"BOARD" shall mean the Board of Directors of the Company.
"CHANGE OF CONTROL" shall have the meaning set forth in Article XI.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"COMMITTEE" shall mean (i) the Stock Option Committee of the Board
which, if and to the extent practicable, shall be comprised of at least two
persons who qualify as "non-employee directors" under Rule 16b-3 promulgated by
the Securities and Exchange Commission under the Securities Exchange Act of
1934, and as "outside directors" under Section 162(m) of the Code or (ii) if a
Stock Option Committee has not been designated by the Board, the Board.
"COMMON STOCK" shall mean the voting common stock of the Company, par
value $0.01 per share.
"ELIGIBLE EMPLOYEE" shall mean any person employed on a full-time basis
by the Company or any of its subsidiaries, or any director of the Company.
"EXERCISE PRICE" shall have the meaning assigned to such term in
Article VI hereof.
"ISO" shall mean an "incentive stock option" within the meaning of
Section 422 of the Code.
"NON-QUALIFIED OPTION" shall mean an Option which is not an ISO.
"OPTION" shall mean any option granted under the Plan.
"OPTIONEE" shall mean any holder of an Option.
"OPTION AGREEMENT" shall mean the agreement between an Optionee and the
Company governing Options granted under the Plan, the forms of which shall be
consistent with the terms of the Plan but need not be identical.
"WP VENTURES" shall mean Warburg, Pincus Ventures, L.P., any Affiliate
thereof, or any successor thereto.
ARTICLE III
STOCK
The stock to be issued upon the exercise of Options shall be shares of
authorized but unissued Common Stock or previously issued shares of Common Stock
reacquired by the Company. The aggregate number of shares of Common Stock as to
which Options may be granted under the Plan at any time shall not exceed
1,366,866, subject to adjustment from time to time in accordance with the
provisions of Article X hereof. No more than 350,000 shares of Common Stock may
be issued to any one individual pursuant to awards of Options hereunder during
any calendar year.
-2-
The number of shares of Common Stock available for grant of Options at
any time under the Plan shall be decreased by the sum of (i) the number of
shares with respect to which Options have been issued and have not lapsed or
been canceled, in each case, prior to such time and (ii) the number of shares
issued prior to such time upon exercise of Options. In the event that any
outstanding Option under the Plan lapses in accordance with Articles VII or VIII
hereof, prior to the end of the period during which Options may be granted, the
shares of Common Stock subject to the unexercised portion of such Option shall
again be available for the granting of Options under the Plan.
ARTICLE IV
PARTICIPATION
Optionees shall be limited to Eligible Employees who have received
written notice of their selection to participate in the Plan and who have
entered into an Option Agreement. Each Option Agreement shall state the total
number of shares of Common Stock which are subject to the Option granted. No
Eligible Employee shall at any time have a right to be selected as a
participant.
ARTICLE V
ADMINISTRATION
The Plan shall be administered by the Committee which shall have sole
authority, in its absolute discretion: (a) to select which Eligible Employees
shall be granted Options; (b) to determine the number of Options to be granted
to such Eligible Employees and whether such Options shall be ISOs or
Non-Qualified Options; (c) to prescribe the form or forms of the Option
Agreements under the Plan; (d) to adopt, amend or rescind such rules and
regulations as, in its opinion, may be advisable for the administration of the
Plan; and (e) to construe and interpret the Plan, and all such rules and
regulations, and to make all other determinations deemed necessary or advisable
for the administration of the Plan. All decisions, determinations and
interpretations of the Committee made in good faith shall be final and binding
on all participants. Neither the Committee nor any member of the Committee shall
be liable for any act, omission, interpretation, construction or determination
made in
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connection with the Plan in good faith, and the members of the Committee
shall be entitled to indemnification and reimbursement by the Company in
respect of any claim, loss, damage or expense (including, without limitation,
counsel fees) arising therefrom to the full extent permitted by Delaware law
and under any directors' and officers' liability insurance coverage which may
be in effect from time to time.
ARTICLE VI
EXERCISE PRICE
The Exercise Price per share of Common Stock covered by Options granted
under the Plan shall be established on or prior to the date of grant by the
Committee and shall be set forth in the Optionee's Option Agreement. Payment
shall be made in full upon exercise of the Option by delivering to the Company
at its principal executive offices cash or a certified check, bank draft or
money order payable to the order of the Company in the aggregate amount of the
Exercise Price, or in accordance with any cashless exercise procedures adopted
by the Committee from time to time.
ARTICLE VII
VESTING OF OPTIONS
All Options granted under the Plan shall vest and become exercisable in
accordance with Article XI hereof and vesting schedules established by the
Committee at the time of grant.
ARTICLE VIII
TERMINATION OF EMPLOYMENT
Each Option will have a ten-year term from the date of grant, subject
to earlier termination upon termination of the Optionee's employment, as
determined by the Committee.
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ARTICLE IX
TRANSFERABILITY
Options and any Optionee's rights and interest under the Plan,
including amounts payable, may not be sold, assigned, donated, or transferred or
otherwise disposed of, mortgaged, pledged or encumbered except, in the event of
an Optionee's death, by will or the laws of descent and distribution; PROVIDED,
HOWEVER, the Committee may, in its sole discretion, allow for transfer of
Options other than ISOs to other persons or entities, subject to such conditions
or limitations as it may establish.
ARTICLE X
ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC.
The aggregate number of shares of Common Stock which may be purchased
pursuant to Options granted hereunder, the maximum number of shares of Stock
with respect to which Options may be granted to any single Optionee during any
calendar year, the number of shares of Common Stock covered by each outstanding
Option and the price per share thereof shall be appropriately adjusted for any
increase or decrease in the number of outstanding shares of Common Stock
resulting from a stock split or other subdivision or consolidation of shares of
Common Stock, or for other capital adjustments or payments of stock dividends or
distributions or other increases or decreases in the outstanding shares of
Common Stock effected without receipt of consideration by the Company.
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If the Company shall be sold, reorganized, consolidated, or merged with
another corporation, or if all or substantially all of the assets of the Company
shall be sold or exchanged (a "Corporate Event"), (i) each Optionee shall, at
the time of such Corporate Event, be entitled to receive upon the exercise of
his Option the same number and kind of shares of common stock or the same amount
of property, cash or other securities as he would have been entitled to receive
upon the occurrence of such Corporate Event as if he had been, immediately prior
to such event or on the record date relating to such event, the holder of the
number of shares of Common Stock covered by his Option, and (ii) if the Company
is not the surviving corporation in such Corporate Event, the Company shall
require the successor corporation or parent thereof to assume such outstanding
Options; provided, HOWEVER, that the Committee may, in its discretion and in
lieu of requiring such assumption, provide that all outstanding Options shall
terminate as of the consummation of such Corporate Event and accelerate the
exercisability of all outstanding Options to any date prior to the date of such
Corporate Event.
The foregoing adjustments and the manner of application of the
foregoing provisions shall be determined by the Committee in its sole
discretion. Any such adjustment may provide for the elimination of any
fractional share which might otherwise become subject to an Option.
ARTICLE XI
CHANGE OF CONTROL
In the event of a Change of Control, each outstanding Option under the
Plan shall vest and become immediately exercisable in full as of the date
immediately preceding the date of such Change of Control, or such other date,
not later than the date of such Change of Control, as shall be established by
the Committee in its discretion.
For purposes of the Plan, a "Change of Control" shall mean:
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(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either (i) the then outstanding shares of Common Stock (the "Outstanding Company
Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company, (iv) any
acquisition by WP Ventures, or (v) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i), (ii), and (iii) of subsection
(c) of this ARTICLE XI;
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the effective date of the Plan whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
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(c) Consummation of a Corporate Event, unless, following such Corporate
Event, (i) all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Stock and
Outstanding Company Voting Securities immediately prior to such Corporate Event
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election of
directors of the corporation resulting from such Corporate Event (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) upon consummation of such Corporate Event in
substantially the same proportions as their ownership, immediately prior to such
Corporate Event, of the Outstanding Company Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person other than (1) WP Ventures, (2)
any corporation resulting from such Corporate Event, or (3) any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Corporate Event, beneficially owns, directly or indirectly, 50% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Corporate Event or the combined voting power of the then
outstanding voting securities of such corporation except to the extent that such
ownership existed prior to the Corporate Event, and (iii) at least a majority of
the members of the board of directors of the corporation resulting from such
Corporate Event were members of the Incumbent Board at the time of the execution
of the initial agreement, or of the action of the Board, providing for such
Corporate Event; or
(d) Approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
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ARTICLE XII
RIGHTS AS A STOCKHOLDER
An Optionee or a transferee of an Option shall have no rights as a
stockholder with respect to any shares covered by his Option until he shall have
become the holder of record of such shares, and he shall not be entitled to any
dividends or distributions or other rights in respect of such shares for which
the record date is prior to the date on which he shall have become the holder of
record thereof.
ARTICLE XIII
EMPLOYMENT RIGHTS
Nothing in the Plan or in any Option Agreement entered into hereunder
shall confer on any Optionee who is an employee of the Company or any of its
subsidiaries any right to continue in the employ of the Company or any of its
subsidiaries or to interfere in any way with the right of the Company or any of
its subsidiaries to terminate the Optionee's employment at any time.
ARTICLE XIV
TRANSFER RESTRICTIONS
Appropriate legends shall be placed on the stock certificates
evidencing shares issued upon exercise of Options to reflect any relevant
transfer restrictions.
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ARTICLE XV
AMENDMENT OR DISCONTINUANCE OF PLAN
The Board may from time to time, to the extent permitted by applicable
law, amend, suspend, or discontinue the Plan; provided, however, that the Board
may not take any action which would have a material adverse effect on
outstanding Options or any unexercised rights under outstanding Options without
the consent of the Optionee whose options would be adversely affected thereby.
ARTICLE XVI
CANCELLATION OF OPTIONS
The Committee, in its discretion, may, with the express written consent
of the Optionee to be affected, cancel any Option held by such consenting
Optionee hereunder.
ARTICLE XVII
MISCELLANEOUS
(a) Notwithstanding any other provision of the Plan, the Company or a
subsidiary, as appropriate, shall have the right to deduct from all Option
exercises Common Stock, valued at fair market value on the date of payment, in
an amount necessary to satisfy all Federal, state or local taxes as required by
law to be withheld with respect to such Options. In the alternative, in the sole
discretion of the Company, the Optionee or other person receiving such Common
Stock may be required to pay to the Company or a subsidiary, as appropriate,
prior to delivery of such Common Stock, the amount of any such taxes which the
Company or subsidiary is required to withhold, if any, with respect to such
Common Stock. Subject in particular cases to the disapproval of the Committee,
the Company may accept shares of Stock of equivalent fair market value in
payment of such withholding tax obligations if the Optionee elects to make
payment in such manner.
(b) The obligation of the Company to make payment of Option exercises
in shares of Common Stock or otherwise shall be
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subject to all applicable laws, rules, and regulations, and to such approvals
by governmental agencies as may be required. Notwithstanding any terms or
conditions of any Option to the contrary, the Company shall be under no
obligation to offer to sell or to sell and shall be prohibited from offering
to sell or selling any shares of Common Stock pursuant to an Option unless
such shares have been properly registered for sale pursuant to the Securities
Act of 1933 with the Securities and Exchange Commission or unless the Company
has received advice of counsel, satisfactory to the Company, that such shares
may be offered or sold without such registration pursuant to an available
exemption therefrom and the terms and conditions of such exemption have been
fully complied with. The Company shall be under no obligation to register for
sale under the Securities Act of 1933 any of the shares of Common Stock to be
offered or sold under the Plan. If the shares of Stock offered for sale or
sold under the Plan are offered or sold pursuant to an exemption from
registration under the Securities Act of 1933, the Company may restrict the
transfer of such shares and may legend the Stock certificates representing
such shares in such manner as it deems advisable to ensure the availability
of any such exemption.
(c) The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware without reference to the principles of conflicts
of law thereof.
(d) No provision of the Plan shall require the Company, for the purpose
of satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes.
(e) Except as otherwise specifically provided in the relevant plan
document, no payment under the Plan or other amount required to be reported as
income for Federal income tax purposes shall be taken into account in
determining any benefits under any pension, retirement, profit sharing, group
insurance or other benefit plan of the Company.
(f) The expenses of administering the Plan shall be borne by the
Company. The proceeds received by the Company from
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the exercise of any Options pursuant to the Plan will be used for general
corporate purposes.
(g) Masculine pronouns and other words of masculine gender shall refer
to both men and women.
(h) The titles and headings of the sections in the Plan are for
convenience of reference only, and in the event of any conflict, the text of the
Plan, rather than such titles or headings, shall control.
(i) Except as otherwise specifically provided in the Plan, no person
shall be entitled to the privileges of ownership in respect of shares of Common
Stock which are subject to Options hereunder until such shares have been issued
to that person.
ARTICLE XVIII
SPECIAL PROVISIONS FOR ISOS
(a) ISOs must be granted within ten years from the date the Plan is
adopted, or the date the Plan is approved by the stockholders of the Company,
whichever is earlier.
(b) ISOs may not be exercised after the expiration of ten years from
the date such ISOs are granted.
(c) The Exercise Price of ISOs may not be less than the fair market
value of a share of Common Stock at the time such ISOs are granted, as
determined by the Committee. In such case, fair market value shall be determined
in a manner consistent with the rules and regulations under Section 422 of the
Code.
(d) ISOs may not be granted to a person who owns stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company or any "subsidiary corporation" of the Company within the meaning of
Section 424(f) of the Code.
(e) To the extent the aggregate fair market value of the Common Stock
with respect to which ISOs are exercisable for the first time by any Optionee
during a calendar year (under all plans of the Company and all "subsidiary
corporations" of the Company within the meaning of Section 424(f) of the Code)
exceeds
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$100,000, such ISOs shall be treated as Non-Qualified Options. For purposes
of the preceding sentence, the fair market value of the Common Stock shall be
determined by the Committee at the time the ISO covering such stock is
granted.
(f) No ISOs may be granted under the Plan unless the Plan has been
approved by the stockholders of the Company within 12 months before or after the
date of the Plan's adoption by the Board.
* * * *
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