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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
UNDER SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
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NEWSEDGE CORPORATION
(Name of Subject Company)
NEWSEDGE CORPORATION
(Name of Persons Filing Statement)
COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
652 49 Q106
(CUSIP Number of Class of Securities)
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CLIFFORD M. POLLAN
CHIEF EXECUTIVE OFFICER
AND PRESIDENT
NEWSEDGE CORPORATION
80 BLANCHARD ROAD
BURLINGTON, MASSACHUSETTS 01803
(781) 229-3000
(Name, address and telephone number of person authorized
to receive notices and communications on behalf of the persons filing statement)
WITH COPIES TO:
LAWRENCE S. WITTENBERG, ESQ.
LAWRENCE A. GOLD, ESQ.
TESTA, HURWITZ & THIBEAULT, LLP
125 HIGH STREET
BOSTON, MA 02110
(617) 248-7000
/ / Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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ITEM 1. SUBJECT COMPANY INFORMATION
The name of the subject company is NewsEdge Corporation, a Delaware
corporation ("NewsEdge"). The address of the principal executive office of
NewsEdge is 80 Blanchard Road, Burlington, Massachusetts 01803. NewsEdge's
telephone number at its principal executive office is (781) 229-3000.
The title of the class of equity securities to which this
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
Exhibits or Annexes hereto, this "Schedule 14D-9") relates is the common stock,
$0.01 per share par value, of NewsEdge (the "Common Stock" or the "Shares"). As
of August 6, 2001, there were 18,621,403 shares of Common Stock outstanding. As
of August 6, 2001 an additional 3,841,026 Shares have been reserved for future
issuance pursuant to outstanding employee stock options, 801,497 Shares have
been reserved for future issuance pursuant to outstanding warrants and rights to
acquire 19,579 Shares were outstanding in connection with rights to purchase
Shares granted pursuant to NewsEdge's 1995 Employee Stock Purchase Plan. On a
fully-diluted basis, there were 23,283,505 Shares outstanding as of August 6,
2001.
ITEM 2. IDENTITY AND BACKGROUND OF FILING PERSON
The filing person is the subject company. NewsEdge's name, business address
and business telephone number are in Item 1 above.
This Schedule 14D-9 relates to the tender offer by InfoBlade Acquisition
Corporation ("Merger Sub"), a Delaware corporation and an indirect wholly owned
subsidiary of The Thomson Corporation, a corporation incorporated under the laws
of the province of Ontario ("Thomson"), to purchase all of the outstanding
Shares held by NewsEdge's stockholders at $2.30 per Share (the "Offer Price"),
net to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in Merger Sub's Offer to Purchase, dated August 21, 2001
and in the related Letter of Transmittal (which, as amended or supplemented,
collectively constitute the "Offer"). The Offer is described in a Tender Offer
Statement on Schedule TO (as amended or supplemented from time to time, the
"Schedule TO"), filed by Merger Sub and Thomson with the Securities and Exchange
Commission on August 21, 2001.
The Offer is being made in accordance with the Agreement and Plan of Merger,
dated as of August 6, 2001 among Thomson, Merger Sub and NewsEdge (the "Merger
Agreement"). The Merger Agreement provides that, subject to the satisfaction or
waiver of certain conditions, following completion of the Offer, and in
accordance with the Delaware General Corporation Law (the "DGCL"), Merger Sub
will be merged with and into NewsEdge (the "Merger"). On completion of the
Merger, NewsEdge will continue as the surviving corporation and become an
indirect wholly owned subsidiary of Thomson. At the effective time of the Merger
(the "Effective Time"), each issued and outstanding Share (other than Shares
held in the treasury of NewsEdge and Shares held by stockholders who perfect
appraisal rights under the DGCL) will be cancelled and automatically converted
into the right to receive the same amount in cash per Share, without interest,
that is paid pursuant to the Offer.
The Schedule TO states that the principal executive offices of Thomson are
located at Suite 2706, Toronto Dominion Bank Tower, 66 Wellington Street West,
Toronto Dominion Centre, Toronto, Ontario M5K 1A1, Canada and the principal
executive offices of Merger Sub are located at Metro Center, One Station Place,
Stamford, Connecticut 06902.
All information in this Schedule 14D-9 or incorporated in this
Schedule 14D-9 by reference concerning Merger Sub or Thomson, or actions or
events with respect to either of them, was provided by Merger Sub or Thomson,
respectively. Information contained in this Schedule 14D-9 with respect to
NewsEdge and its advisors has been provided by NewsEdge.
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Certain information provided by NewsEdge and relating to the Offer, the full
text of which has previously been filed with the Securities and Exchange
Commission as preliminary communications made before the commencement of the
Offer, is available on the internet at WWW.NEWSEDGE.COM.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
Certain contracts, agreements, arrangements or understandings between
NewsEdge or its affiliates and certain of its directors and executive officers
are described in the Information Statement that is attached as Annex A to this
Schedule 14D-9 and is incorporated in this Schedule 14D-9 by reference. The
Information Statement is being furnished to NewsEdge's stockholders pursuant to
Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Rule 14f-1 under the Exchange Act in connection with Merger Sub's
right (promptly upon the purchase by Merger Sub of Shares pursuant to the Offer)
to designate persons to be appointed to NewsEdge's Board of Directors (the
"Board") other than at a meeting of the stockholders of NewsEdge. In considering
the recommendations of the Board, NewsEdge's stockholders should be aware that
certain members of the Board and certain of NewsEdge's executive officers have
interests in the Merger and the Offer that are described in this Schedule 14D-9
and in the Information Statement and incorporated by reference in this
Schedule 14D-9. These interests may present them with conflicts of interest. For
example, upon the earlier to occur of the date Merger Sub pays for the Shares
pursuant to the Offer or the Effective Time, NewsEdge is obligated to pay a cash
bonus to each executive officer of NewsEdge. Other such contracts, agreements,
arrangements and understandings known to NewsEdge are described below or are
summarized in the Offer to Purchase, which is incorporated herein by reference.
Except as described in this Schedule 14D-9 or incorporated in this
Schedule 14D-9 by reference, to the knowledge of NewsEdge, as of the date of
this Schedule 14D-9, there exists no material agreement, arrangement or
understanding or any actual or potential conflict of interest between NewsEdge
or its affiliates and (a) NewsEdge's executive officers, directors or
affiliates; or (b) Thomson and Merger Sub or Thomson and Merger Sub's executive
officers, directors or affiliates.
THE CONFIDENTIALITY AGREEMENT
The summary of the Confidentiality Agreement, dated as of May 16, 2001 by
and between Broadview International LLC, on behalf of NewsEdge, and West Group,
an affiliate of Thomson, (the "Confidentiality Agreement") in Section 10 of the
Offer to Purchase is incorporated in this Schedule 14D-9 by reference. The
summary and description of the Confidentiality Agreement is qualified in its
entirety by reference to the Confidentiality Agreement, which has been filed as
Exhibit (e)(3) to this Schedule 14D-9 and is incorporated in this
Schedule 14D-9 by reference.
THE MERGER AGREEMENT
The summary of the Merger Agreement and the statement of the conditions to
the Offer in Sections 10 and 14, respectively of the Offer to Purchase are
incorporated in this Schedule 14D-9 by reference. The summary and description of
the Merger Agreement is qualified in its entirety by reference to the Merger
Agreement, which has been filed as Exhibit (e)(1) to this Schedule 14D-9 and is
incorporated in this Schedule 14D-9 by reference.
THE STOCKHOLDERS AGREEMENT
The summary of the Stockholders Agreement (to which all of the directors,
certain executive officers and a principal stockholder of NewsEdge are a party)
in Section 10 of the Offer to Purchase is incorporated in this Schedule 14D-9 by
reference. The summary and description of the Stockholders Agreement is
qualified in its entirety by reference to the Stockholders Agreement, which has
been filed as Exhibit (e)(2) to this Schedule 14D-9 and is incorporated in this
Schedule 14D-9 by reference.
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EMPLOYMENT ARRANGEMENTS WITH NEWSEDGE. In connection with the Merger
Agreement, each of Clifford M. Pollan, Ronald Benanto, Charles White, Thomas
Karanian, John Crozier, David M. Scott, Alton Zink and Lee Phillips (each, an
"Officer" and collectively the "Officers") entered into amended and restated
executive employment agreements with NewsEdge (each, an "Amended Employment
Agreement" and collectively, the "Amended Employment Agreements"). Employment
under the Amended Employment Agreements commences on the earlier to occur of
(x) the date that Merger Sub pays for the Shares pursuant to the Offer and
(y) the Effective Time, and continues for one year thereafter. Upon expiration
of this one year employment term, the employment of each Officer will be on an
"at-will" basis.
As of August 6, 2001, the Amended Employment Agreements replaced the
employment agreements then in effect between NewsEdge and each of the Officers
(the "Original Employment Agreements") provided that if the Merger Agreement is
terminated prior to the Effective Time, the Amended Employment Agreement will
automatically terminate and the Original Employment Agreement of each Officer
will be automatically reinstated. The Original Employment Agreements and the
Amended Employment Agreements are described in detail in the Information
Statement attached as Annex A to this Schedule 14D-9.
The Amended Employment Agreements provide for annual base salaries of
$275,000 for Mr. Pollan, $210,000 for Mr. Benanto, $185,000 for each of
Messrs. White and Karanian, $180,000 for Mr. Crozier, $160,000 for Mr. Scott and
$150,000 for each of Messrs. Zink and Phillips, each amount being equal to the
salary payable to the Officers under their Original Employment Agreements. Each
Officer is also eligible to participate in NewsEdge's standard benefit plans,
accrue paid vacation time and receive an annual cash bonus based upon
performance targets established by NewsEdge and Thomson. If an Officer is an
active employee of NewsEdge on the one-year anniversary of the date the
Officer's employment commenced under the Amended Employment Agreement, the
Officer will be paid, in the case of all Officers other than Mr. Pollan, a bonus
equal to his annual base salary and in the case of Mr. Pollan, a bonus equal to
$365,000.
Under the terms of the Amended Employment Agreements, NewsEdge may terminate
any of the Officers with or without cause. If terminated without cause or if an
Officer terminates employment with NewsEdge upon the occurrence of certain
events described as "good reason" in the Amended Employment Agreements during
the one year employment term, the terminated Officer will be entitled to, in the
case of all officers other than Mr. Pollan, a continuation in the payment of his
base salary for a twelve month period immediately following the date of such
termination and a continuation of the benefits which he was receiving at the
time of termination, (or if NewsEdge is unable to so provide, the cash value
thereof) for an equivalent period and in the case of Mr. Pollan, a continuation
in the payment of his base salary for a twelve month period immediately
following the date of such termination plus an amount equal to the maximum
amount of Mr. Pollan's target bonus and a continuation of the benefits which he
was receiving at the time of termination, (or if NewsEdge is unable to so
provide, the cash value thereof) for an equivalent period. NewsEdge will only be
obligated to make these severance payments to a terminated Officer if the
Officer executes a general release of claims in favor of NewsEdge.
As a party to the Amended Employment Agreement, each Officer has also agreed
to certain non-solicitation, non-competition, confidentiality and non-disclosure
provisions.
The summary of the Amended Employment Agreements in Section 10 of the Offer
to Purchase is incorporated in this Schedule 14D-9 by reference. The summary and
description of the Amended Employment Agreements is qualified in its entirety by
reference to the Amended Employment Agreements, each of which has been filed as
Exhibits (e)(4)-(e)(11) to this Schedule 14D-9 and each of which is incorporated
in this Schedule 14D-9 by reference.
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EFFECTS OF THE OFFER AND THE MERGER UNDER NEWSEDGE STOCK OPTION AND PURCHASE
PLANS AND AGREEMENTS BETWEEN NEWSEDGE AND ITS EXECUTIVE OFFICERS
The executive officers of NewsEdge, including the Chief Executive Officer
who is a member of the Board, have interests in the transactions contemplated by
the Merger Agreement that are in addition to their interests as NewsEdge
stockholders generally. The Board was aware of these interests and considered
them, among other matters, in approving the Merger Agreement and the
transactions contemplated by the Merger Agreement.
TREATMENT OF STOCK OPTIONS. As of the Effective Time, NewsEdge shall
terminate NewsEdge's Amended and Restated 1989 Stock Option Plan, 1995 Stock
Plan, 1995 Non-Employee Director Stock Option Plan, 2000 Non-Officer and
Non-Director Stock Plan and Individual, Inc.'s 1996 Non-Employee Director Stock
Option Plan, each as amended through August 6, 2001, and cancel, at the
Effective Time, each outstanding option to purchase Shares granted under these
plans that is outstanding as of such date. Each holder of an outstanding option
at the Effective Time will be entitled, to the extent any such option is
exercisable, to receive from NewsEdge, as the surviving corporation of the
Merger, immediately after the Effective Time, in exchange for the cancellation
of such option, an amount in cash equal to the excess, if any, of (x) the Offer
Price over (y) the per share exercise price of the option, multiplied by the
number of Shares subject to the option as of the Effective Time. Any such
payment shall be subject to all applicable federal, state and local tax
withholding requirements. On August 6, 2001 the Board adopted resolutions
pursuant to which, immediately prior to the Effective Time, 50% of all
outstanding and unvested options (including those held by directors and
executive officers of NewsEdge) granted under any of NewsEdge's stock option
plans will become fully vested and exercisable.
As of the last day of the payroll period immediately preceding the Effective
Time (the "ESPP Date"), all offering and purchase periods under way under
NewsEdge's 1995 Employee Stock Purchase Plan, shall be terminated and, as of
August 6, 2001, no new offering or purchase periods shall be commenced. At the
ESPP Date, NewsEdge will terminate its 1995 Employee Stock Purchase Plan and
each participant's rights thereunder will terminate in exchange for a cash
payment equal to the excess of (i) the Offer Price multiplied by the number of
Shares that the participant's accumulated payroll deductions could purchase at
the ESPP Date at the $2.07 option price under the 1995 Employee Stock Purchase
Plan as of March 1, 2001, over (ii) the result of multiplying the number of
Shares in clause (i) by $2.07, subject to any applicable federal, state and
local tax withholding requirements.
EFFECTS OF THE OFFER AND THE MERGER WITH RESPECT TO NEWSEDGE'S BOARD OF
DIRECTORS
DIRECTOR AND OFFICER INDEMNIFICATION; INSURANCE. To the extent provided in
NewsEdge's By-laws in effect on August 6, 2001, after the Effective Time,
NewsEdge, as the surviving corporation of the Merger, shall continue to
indemnify NewsEdge's current and former directors and officers. Any such
indemnification obligation will extend for three years after the Effective Time
and will be subject to limitations imposed under applicable law. In addition,
NewsEdge, as the surviving corporation of the Merger, will use its reasonable
best efforts to maintain NewsEdge's current directors' and officers' insurance
and indemnification policy to the extent that it provides coverage for events
occurring before the Effective Time for all persons who were directors and
officers of NewsEdge on the date of the Merger Agreement. NewsEdge's directors'
and officers' insurance policy may be replaced provided that any substitute
policy contains at least the same coverage containing terms and conditions that
are not materially less favorable with respect to matters occurring prior to the
Effective Time than NewsEdge's existing policy.
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ITEM 4. THE SOLICITATION OR RECOMMENDATION
(A) RECOMMENDATION OF THE BOARD
At a meeting held on August 6, 2001, the Board reviewed the status of the
merger discussions with Thomson and the status of competing offers. At that
meeting, Broadview International LLC ("Broadview") delivered its oral opinion to
the Board that, as of the date of such opinion and based upon and subject to
certain matters stated in such opinion, the Offer Price was fair to NewsEdge's
stockholders from a financial point of view. Broadview's oral opinion was
confirmed in a written opinion letter dated August 6, 2001 (the "Fairness
Opinion"), a copy of which is attached as Annex B to this Schedule 14D-9 and is
incorporated into this Schedule 14D-9 by reference. At the conclusion of the
meeting, the Board unanimously (a) determined that the Merger Agreement and the
transactions contemplated thereby, including the Offer and Merger, and the
Amended Employment Agreements (collectively, the "Transactions"), are fair to,
and in the best interests of, the stockholders of NewsEdge, (b) approved, and
declared advisable the Merger Agreement and the Transactions, (c) approved the
execution, delivery and performance of the Merger Agreement, the Amended
Employment Agreements and the completion of the Transactions contemplated
thereby, including the Offer and the Merger, and (d) resolved to recommend that
holders of Shares accept the Offer and tender their Shares pursuant to the Offer
and approve and adopt the Merger Agreement.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES IN THE OFFER.
(B)(I) BACKGROUND OF THE OFFER
During the March 29, 2001 meeting of the Board, the directors and certain
members of senior management analyzed a number of industry trends and
conditions, as well as issues specific to NewsEdge. Following this discussion
and after weighing NewsEdge's strategic alternatives, the Board discussed the
advisability of hiring an investment banking firm to assist in assessing
NewsEdge's strategic options. Clifford M. Pollan, Chief Executive Officer,
President and a member of the Board, and Ronald Benanto, Vice
President--Finance, Chief Financial Officer and Treasurer, reported on
conversations with certain investment bankers that they had conducted to date.
The directors discussed the advisability of establishing a committee to
interview and engage an investment banking firm. The Board unanimously resolved
to appoint Mr. Cowan, Mr. Devereaux and Mr. Kolowich, all members of the Board,
to a committee to assist management in identifying, interviewing, and engaging
an investment banking firm to assist NewsEdge in evaluating strategic
alternatives, and to monitor and supervise this process (the "Special
Committee").
On April 3, 2001 the Special Committee conducted interviews with two
potential investment banking firms each of which made extensive presentations to
the Special Committee. At the conclusion of the meeting the Special Committee
advised Mr. Pollan to proceed with an engagement of Broadview.
On April 6, 2001 NewsEdge engaged Broadview to act as its financial advisor
in connection with NewsEdge's intent to consider acquisition offers and, if
requested by NewsEdge, to render the Board an opinion with respect to the
fairness to the holders of Shares, from a financial point of view, of the
consideration to be received in any acquisition of NewsEdge. Thereafter,
Broadview produced an Offering Memorandum for NewsEdge to be distributed to
potential acquirers.
On April 20, 2001 Broadview and NewsEdge held an initial meeting with a
potential acquirer ("Party A") regarding a possible acquisition of NewsEdge.
Discussion centered around the strategic fit that NewsEdge offered the potential
acquirer and the synergies to be realized upon combining the companies. The
parties resolved to further consider a possible acquisition and to meet again in
the near future.
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During the April 26, 2001 meeting of the Board, Mr. Pollan reported that the
Special Committee had authorized NewsEdge management to retain Broadview as
NewsEdge's financial advisor and that thereafter NewsEdge entered into an
engagement agreement with Broadview. At the meeting, Steve O'Leary and
Rodd Langenhagen, both representatives of Broadview, outlined their plan for
investigating several strategic alternatives for NewsEdge and the directors
discussed each of these alternatives in turn. Mr. O'Leary and Mr. Langenhagen
discussed the status of discussions to date, including those with Party A, and
sought input from the Board regarding potential acquirers and necessary follow
up.
On May 11, 2001 Broadview submitted a status report to the Board detailing
their discussions to date with potential acquirers. Broadview reported that it
had presented overviews of NewsEdge's business to nine potential acquirers,
including three separate entities affiliated with Thomson.
On May 16, 2001 NewsEdge entered into a Confidentiality Agreement with the
West Group, an affiliate of Thomson, relating to the exchange of information
between the two parties in light of a potential acquisition of NewsEdge by West
Group or another affiliate of Thomson. Thereafter due diligence materials
regarding NewsEdge were provided to Thomson.
On May 25, 2001 Broadview submitted a second status report to the Board
detailing their continuing discussions with potential acquirers. During the
May 25, 2001 meeting of the Board, Mr. Langenhagen reported that a second
meeting with Party A was held on May 22, 2001 and that a third meeting with
Party A was scheduled for May 30, 2001. Mr. Langenhagen also reported on
discussions between Broadview and David Hanssens of Thomson Legal and
Regulatory, an affiliate of Thomson, and noted that Mr. Hanssens believed there
was a strong potential strategic fit between the two companies and that Thomson
was analyzing the financial impact of a potential transaction. Mr. Langenhagen
also reported on several preliminary conversations with other potential
acquirers as well as several preliminary conversations with parties which did
not result in an expression of interest in consummating a transaction.
On June 4, 2001 Broadview, Mr. Pollan and Mr. Benanto held meetings with
Thomson regarding a potential transaction. Thomson expressed an interest in a
potential transaction and noted Thomson's belief that NewsEdge could provide
Thomson with a complimentary suite of goods and services that could further
Thomson's long-term strategy.
On June 11, 2001 Broadview reported receiving an offer from Party A.
Party A's initial offer was a stock-for-stock transaction which valued NewsEdge
at approximately $25 million. On June 14, 2001 Broadview received a revised
offer from Party A which increased the valuation of NewsEdge to $33 million in a
stock-for-stock transaction.
During a meeting of the Board on June 18, 2001 Mr. Langenhagen submitted a
third status report to the Board and reported on discussions with several
potential acquirers. Mr. Langenhagen reported that Broadview received a
non-binding letter of interest from Thomson on June 18, 2001 relating to a cash
transaction which valued NewsEdge at no less than $1.60 per share.
Mr. Langenhagen also reported that Broadview and representatives of NewsEdge
held meetings with two other potential acquirers on June 15, 2001 and scheduled
a second meeting with one of the parties for the week of June 18, 2001 to
further discuss a potential transaction. Additionally, Mr. Langenhagen reported
on preliminary discussions held with several other potential acquirers since
Broadview's last status report on May 25, 2001.
On June 21, 2001 Broadview held a follow-up due diligence meeting with one
of the potential acquirers who had met with NewsEdge on June 15, 2001
("Party B"). On June 26, 2001 Broadview received a preliminary letter of intent
from Party B relating to a part cash, part stock transaction which valued
NewsEdge at between $2.25 and $3.00 per share. The letter also indicated that
Party B would require significant additional management time to further
understand NewsEdge's business and that it would require a 45-day exclusivity
period.
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On June 27 and June 28, 2001 Mr. Pollan, other executive officers of
NewsEdge, and representatives of Broadview met with Mr. Hanssens and other
individuals from Thomson to conduct additional due diligence and discuss
possible terms of an acquisition of NewsEdge by Thomson or one of its affiliated
entities.
During the June 28, 2001 meeting of the Board, Mr. Pollan and
Mr. Langenhagen reported on the status of NewsEdge's conversations with
potential acquisition partners. The directors reviewed the status of these
discussions and potential offers. In particular, Mr. Pollan reported that
Party B communicated an interest in continuing negotiations with NewsEdge and
had submitted an incomplete preliminary indication of interest which remained
subject to substantial additional due diligence and other conditions.
Mr. Pollan also reported on the status of discussions with other potential
acquirers. After discussion, the directors instructed management to continue
discussions with each of the various interested parties. In particular, the
directors instructed management to respond to indications of interest previously
received with counterproposals seeking to elicit a higher valuation for NewsEdge
and to respond to any preliminary indications of interest by communicating again
the need to accelerate the timeframe during which to consider a potential
transaction with NewsEdge and to submit firm indications of interest.
During the last week of June, Party A sent representatives to meet with the
Board and NewsEdge's executive management team to delineate their plans for an
acquisition of NewsEdge and post-acquisition operations of NewsEdge. Party A's
representatives indicated at this time that their acquisition strategy
necessitated that any potential transaction be a stock-for-stock deal.
On July 1, 2001 Mr. Pollan communicated with the Board via e-mail that
negotiations with Party A centered around the valuation of NewsEdge. Mr. Pollan
also informed the Board that he and other members of NewsEdge's executive team
met with Mr. Hanssens and eight other Thomson representatives on June 27 and
June 28, 2001. He reported that conversations with Thomson were progressing in a
positive manner and that NewsEdge expected firm offers from Thomson and Party A
by July 6, 2001.
During the July 3, 2001 meeting of the Board, Mr. Pollan and
Mr. Langenhagen reported on the status of NewsEdge's conversations with
potential acquirers and the status of the letters of intent received to date.
The directors then reviewed the status of these discussions and potential offers
and directed management to continue discussions with a particular focus on
Thomson and Party A.
On July 5, 2001 Mr. Pollan communicated with the Board via e-mail that his
recent conversations with Thomson were progressing positively and that NewsEdge
would be evaluating offers over the course of the next week. Mr. Pollan also
discussed issues surrounding the proposed timing of the initiation and closing
of Thomson's proposed acquisition. Mr. Pollan reported that NewsEdge had
received a revised letter of intent from Party B which valued NewsEdge between
$2.25 and $2.50 per share to be paid half in cash and half in stock. Party B
indicated that its offer was subject to a further due diligence review of
NewsEdge's business operations which it expected to be able to complete by mid-
to late-August.
During the July 6, 2001 meeting of the Board, Mr. Pollan and
Mr. Langenhagen reported on the status of NewsEdge's conversations with
potential acquisition partners. The directors reviewed the status of these
discussions and potential offers. In particular, Mr. Pollan reported that
Party B had conveyed to NewsEdge, through Broadview, that its strategic
imperative in any acquisition would be to combine the two companies and thereby
eliminate duplicative positions. As a result of these requirements, the party
would need to hold discussions with certain members of the management team not
yet privy to NewsEdge's acquisition proceedings as part of its due diligence
review. The party also indicated that any offer would be a combination of cash
and stock and that it would require at least a month to complete its due
diligence review of NewsEdge. At this time, Mr. Pollan also reported that
Party A recently indicated that it might raise its potential valuation for
NewsEdge provided that no
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other major issues were outstanding. Mr. Pollan also reported that discussions
with Thomson were ongoing. The directors discussed other terms and conditions of
a potential business combination transaction. The directors directed Mr. Pollan
and Mr. Langenhagen to continue discussions with each of the various interested
parties.
On July 9, 2001 NewsEdge received a verbal offer from Thomson, proposing to
acquire NewsEdge pursuant to a cash tender offer which valued NewsEdge at
$31 million plus cash on the balance sheet of NewsEdge at the time of the
consummation of the transaction, which as of July 9, 2001 was estimated to be
$14 million. Also on July 9, 2001 Party A increased its offer to a final offer
of $38 million which was to be paid exclusively in the common stock of Party A.
During the July 10, 2001 meeting of the Board, Mr. Pollan and
Mr. Langenhagen reported on the status of NewsEdge's conversations with
potential acquisition partners, including the verbal offer received on July 9,
2001 from Thomson. The directors reviewed the status of these discussions and
each potential offer. In particular, Mr. Pollan reported that Thomson had
indicated that, subject to the completion of final due diligence and certain
other conditions, it would be interested in acquiring NewsEdge at a valuation of
$31 million plus the amount of cash on NewsEdge's balance sheet, which as of
July 9, 2001 was estimated to be $14 million. The directors compared this
proposal, its terms and conditions, and its potential benefits and associated
risks with the potential offers from Party A and Party B. Management reported
that Party B had requested additional time for due diligence and would be
unlikely to come back with a firm offer prior to the time that NewsEdge would
likely need to make a firm commitment to either Thomson or Party A. Management
also reported concerns about Party B's post-acquisition cash balance and less
favorable strategic positioning relative to other combinations post-merger.
After discussion, based on the amount and quality of consideration offered, the
directors instructed management to continue to negotiate with Thomson with a
view towards entering into a definitive agreement at the valuation discussed.
During the week of July 16, 2001 Thomson representatives and Thomson's legal
counsel performed an extensive due diligence review of NewsEdge in Burlington,
Massachusetts. Representatives of Thomson's legal, financial and human resource
teams met throughout the week with the executive officers and certain other
senior employees of NewsEdge to discuss various issues relating to Thomson's
proposed acquisition of NewsEdge.
On July 23, 2001 Mr. Pollan communicated with the Board via e-mail on the
status of Thomson's due diligence review and that Thomson was meeting internally
on July 23, 2001 to discuss the results of the due diligence review.
Additionally, he reported that he and Mr. Langenhagen had discussions with
Mr. Hanssens on Friday, July 20, 2001 regarding valuation and closing costs
issues. Mr. Pollan indicated that he expected to receive a draft Merger
Agreement from Thomson later that same day or the next day.
On July 25, 2001 Mr. Pollan led a conference call discussion with
Mr. Benanto, Mr. Hanssens and other representatives of Thomson on open issues
related to the merger negotiations. On July 26, 2001 NewsEdge received an
initial draft of the Merger Agreement from Thomson's legal counsel.
Thereafter, representatives of NewsEdge and Thomson negotiated the terms of
a definitive merger agreement and Thomson's proposed tender offer and discussed
any unresolved issues between the parties. These discussions focused primarily
on the conditions to Thomson's obligation to initiate and consummate its tender
offer and second-step merger and the timing of the initiation and closing of
Thomson's tender offer. The discussions also focused on the circumstances under
which the Board would be able to consider and respond to competing acquisition
proposals and the size of the fee NewsEdge would have to pay Thomson if the
Board decided to terminate the transaction in order to modify or withdraw its
recommendation on the basis of a superior offer. During this time Mr. Pollan
continued to discuss the terms and conditions of the proposed transaction with
individual Board members via telephone calls and e-mails.
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On July 31, 2001 Mr. Pollan, Mr. Benanto, Mr. Langenhagen, Mr. Hanssens and
other representatives of Thomson agreed on final pricing of the transaction at
approximately $43 million, after adjustments for transaction costs and working
capital.
On August 3, 2001 Mr. Pollan communicated with the Board via e-mail that
negotiations with Thomson had progressed positively and that the two parties
were very close to agreeing on all terms and conditions of Thomson's proposed
tender offer and merger. Additionally, he reported that he expected that the
Board would be asked to approve a definitive agreement and review Broadview's
Fairness Opinion at a Board meeting on Monday, August 6. Thereafter, Thomson and
NewsEdge discussed and negotiated the open provisions of the Merger Agreement.
The parties also discussed and negotiated the Amended Employment Agreements and
the Stockholders Agreement.
On the evening of August 3, 2001 Thomson's legal counsel delivered a
substantially final draft of the Merger Agreement which was distributed to the
Board for their consideration.
At a meeting held on August 6, 2001 the Board reviewed the status of the
negotiations with Thomson and the terms of the definitive merger agreement. The
Board also discussed competing offers and NewsEdge's prospects should it choose
to remain independent. After reviewing the terms of the definitive merger
agreement with Thomson and considering Broadview's Fairness Opinion and
underlying data, the Board unanimously determined that the terms of the Offer
and Merger with Thomson were fair to, and in the best interests of, the
stockholders of NewsEdge, and unanimously resolved to recommend that the
stockholders accept the Offer and tender their Shares pursuant to the Offer and
approve and adopt the Merger Agreement.
On August 6, 2001 the parties executed the Merger Agreement, the
Stockholders Agreement and the Amended Employment Agreements. Thereafter,
Thomson and NewsEdge issued a joint press release announcing the execution of
the Merger Agreement.
(B)(II) REASONS FOR THE RECOMMENDATION OF THE BOARD
In approving the merger with Thomson and the transactions contemplated by
the Merger Agreement, and recommending that all stockholders tender their Shares
pursuant to the Offer, the Board considered a number of factors, including the
following:
- the Offer Price being offered by Thomson;
- NewsEdge's prospects if it were to remain independent, including:
- the resources necessary for the development of new products and
services required over the near term for NewsEdge's future growth;
- NewsEdge's ability to efficiently market and sell to and support its
existing and new customers;
- NewsEdge's ability to expand its distribution channels and electronic
publishing technologies;
- the challenge facing NewsEdge of dedicating significant resources to
growth while at the same time trying to achieve profitability; and
- the uncertainty surrounding the continued listing of NewsEdge's shares
on the Nasdaq National Market.
- the possible alternatives to the Thomson transaction, including the
possibility of continuing to operate NewsEdge as an independent entity,
the possibility of continuing to seek another strategic partner or
continuing negotiations with other parties who had indicated interest, the
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range of possible benefits to NewsEdge's stockholders of these
alternatives and the timing and likelihood of accomplishing the goal of
any of these alternatives;
- the contacts that had been made with potential acquirers since the
beginning of 2001 and the fact that although several companies with a
potential strategic interest in acquiring NewsEdge had been contacted,
Thomson's Offer had a very high likelihood of being consummated in a
timely manner, represented the highest price per share to NewsEdge's
stockholders and was the only offer which involved exclusively cash
consideration;
- the strategic value of NewsEdge in the hands of a company with
significantly greater financial resources, such as Thomson, which is in a
better position to optimize NewsEdge's products in the corporate
enterprise market and which, as a large corporation, has access to greater
resources not presently available to NewsEdge;
- the historical and recent market prices of the Shares and the fact that
Thomson's Offer will enable the holders of the Shares to realize a premium
of greater than 90% over the prices at which the Shares traded before the
execution of the Merger Agreement;
- the financial analysis and presentation of Broadview, and the oral opinion
of Broadview delivered on August 6, 2001 and subsequently confirmed in
writing as the Fairness Opinion, to the effect that, as of such date and
based upon and subject to certain matters stated in such opinion, the
$2.30 per Share Offer Price to be received by holders of Shares (other
than Shares held in the treasury of NewsEdge and Shares held by
stockholders who perfect their appraisal rights under the DGCL) pursuant
to the Offer and the Merger are fair to, and in the best interests of,
such holders from a financial point of view (Such opinion was directed to
the Board in its consideration of the transactions contemplated by the
Merger Agreement and is directed only to the fairness from a financial
point of view as of its date of the consideration to be received by the
holders of Shares pursuant to the Offer and the Merger. The full text of
the Fairness Opinion, which sets forth the assumptions made, matters
considered and limitations on the review undertaken by Broadview, is
attached as Annex B and is incorporated in this Schedule 14D-9 by
reference. HOLDERS OF SHARES ARE URGED TO READ THE FAIRNESS OPINION
CAREFULLY IN ITS ENTIRETY.);
- the likelihood that Thomson's Offer will be completed, in light of the
experience, reputation and financial capabilities of Thomson and the terms
of the Merger Agreement;
- the fact that directors, certain executives officers, and a principal
stockholder of NewsEdge beneficially owning an aggregate of approximately
47.1% of the outstanding Shares were willing, as individual stockholders,
to support the transaction by committing to Thomson under the Stockholders
Agreement, to tender their Shares in the Offer;
- the fact that the other conditions to Thomson's obligations to consummate
the Offer and Merger are customary and, in the assessment of the Board,
not unduly onerous;
- the fact that the Offer and the Merger are not subject to any financing
condition and that the Offer consists of exclusively cash consideration
payable to the holders of Shares;
- the consents and approvals required to complete the Offer and consummate
the Merger (including regulatory clearance under anti-trust laws) and the
favorable prospects for receiving such consents and approvals;
- the fact that NewsEdge and Thomson have many complimentary lines of
business and that NewsEdge could benefit from Thomson's various
distribution channels and position in the marketplace; and
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- the terms of the Merger Agreement including the conditions to the parties'
respective obligations under the Merger Agreement.
The Board also identified and considered a variety of potentially negative
factors in its deliberations concerning the Merger, including, but not limited
to:
- the risk that the potential benefits sought in the Merger might not be
fully realized;
- the possibility that the Merger might not be completed and the resulting
effect on the stock price of NewsEdge; and
- the effect of the public announcement of the Merger on NewsEdge's
immediate prospects.
The Board unanimously believed that these risks were outweighed by the
potential benefits of the Merger.
In view of the wide variety of factors, both positive and negative,
considered by the Board, the Board did not find it practical to, and did not,
quantify or otherwise assign relative weights to the specific factors
considered, and did not find that any factor was of special importance. Rather,
the Board viewed its position and recommendations as being based on the totality
of the information presented to and considered by it. In addition, it is
possible that different members of the Board assigned different weights to the
various factors described above.
The foregoing discussion of the information and factors considered by the
Board is not intended to be exhaustive but is believed to include the material
factors considered by the Board.
(C) INTENT TO TENDER
After reasonable inquiry and to NewsEdge's knowledge, each executive officer
and director of NewsEdge currently intends to tender all Shares held of record
or beneficially owned by such person to Merger Sub in the Offer. In connection
with the execution of the Merger Agreement, certain stockholders of NewsEdge
entered into a Stockholders Agreement with Thomson and Merger Sub, pursuant to
which such stockholders contractually committed to tender Shares beneficially
owned by each of them, totaling 8,087,455 Shares. The following stockholders of
NewsEdge (who, except for Mr. McLagan, are also executive officers and/or
directors of NewsEdge) are party to the Stockholders Agreement: Clifford M.
Pollan, Ronald Benanto, Rory J. Cowan, Basil P. Regan, Peter Woodward, Murat H.
Davidson, Jr., Michael E. Kolowich, William A. Devereaux, James D. Daniell and
Donald L. McLagan.
ITEM 5. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED
Pursuant to a letter agreement dated April 6, 2001, NewsEdge engaged
Broadview to act as its financial advisor in connection with NewsEdge's intent
to consider acquisition offers and, if requested by NewsEdge, to render the
Board an opinion with respect to the fairness to the holders of Shares, from a
financial point of view, of the consideration to be received in any acquisition
of NewsEdge.
Broadview focuses on providing merger and acquisition advisory services to
information technology, communications and media companies. In this capacity
Broadview is engaged in valuing such businesses, and maintains an extensive
database of information technology, communications and media mergers and
acquisitions for comparative purposes. As financial advisor to the Board,
Broadview received a fee from NewsEdge upon the delivery of its Fairness
Opinion. The Board selected Broadview because of its expertise, reputation and
familiarity with NewsEdge.
Pursuant to its agreement with Broadview, NewsEdge agreed to pay Broadview a
fee for its financial advisory services in an amount equal to (i) a one time
commitment fee of $50,000, (ii) a "success fee" upon closing of a business
combination or other transaction of 2.00% of the first one
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hundred million dollars of consideration and 1.25% of consideration above the
first one hundred million dollars with a minimum fee of $1,000,000 that will be
reduced to $750,000 for certain types of transactions, (iii) a $250,000 payment
for delivery of the Fairness Opinion, and (iv) all reasonable out of pocket
costs and expenses.
NewsEdge has entered into information provider license agreements in the
ordinary course of its business with certain affiliates of Thomson (the "Thomson
Affiliates"). In NewsEdge's most recent fiscal year, these agreements resulted
in aggregate revenues to NewsEdge from its customers of approximately $2,817,600
and royalty payments from NewsEdge to the Thomson Affiliates in an aggregate
amount of approximately $1,693,700.
Except as described above, neither NewsEdge nor any person acting on its
behalf has or currently intends to employ, retain or compensate any person to
make solicitations or recommendations with respect to the Offer or the Merger.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
Donald L. McLagan, who together with his affiliates beneficially owns
2,149,999 Shares or approximately 10.6% of the outstanding Shares, sold 14,000
Shares during the period from July 24, 2001 to July 26, 2001. Except for the
sale by Mr. McLagan and purchases in the ordinary course under NewsEdge's 1995
Employee Stock Purchase Plan, no transactions in the Shares have been effected
during the past 60 days by NewsEdge or, to the knowledge of NewsEdge, any
executive officer, director, affiliate or subsidiary of NewsEdge.
ITEM 7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
Except as described in this Schedule 14D-9, NewsEdge is not currently
undertaking or engaged in any negotiations in response to the Offer that relate
to (1) a tender offer or other acquisition of NewsEdge's securities by NewsEdge,
any subsidiary of NewsEdge, or any other person; (2) an extraordinary
transaction, such as a merger, reorganization or liquidation, involving NewsEdge
or any subsidiary of NewsEdge; (3) a purchase, sale or transfer of a material
amount of assets of NewsEdge or any subsidiary of NewsEdge; or (4) any material
change in the present dividend rate or policy, or indebtedness or capitalization
of NewsEdge.
Except as described in this Schedule 14D-9, there are no transactions,
resolutions of the Board, agreements in principle, or signed contracts in
response to the Offer that relate to one or more of the events referred to in
the preceding paragraph.
ITEM 8. ADDITIONAL INFORMATION
MERGER SUB'S DESIGNATION OF PERSONS TO BE ELECTED TO THE BOARD
The Information Statement attached as Annex A to this Schedule 14D-9 is
being furnished in connection with the possible designation by Merger Sub,
pursuant to the terms of the Merger Agreement, of certain persons to be
appointed to the Board other than at a meeting of NewsEdge's stockholders.
STATE TAKEOVER LAWS. NewsEdge is incorporated under the laws of the State
of Delaware. In general, Section 203 of the DGCL prevents an "interested
stockholder" (generally a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
thereof) from engaging in a "business combination" (defined to include mergers
and certain other transactions) with a Delaware corporation for a period of
three years following the date such person became an interested stockholder
unless, among other things, prior to such date, the board of directors of the
corporation approved either the business combination or the transaction in which
the interested stockholder became an interested stockholder. On August 6, 2001,
prior to the execution of
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the Merger Agreement, the Board by unanimous vote of all directors approved the
Merger Agreement and determined that the terms of the Offer and the Merger are
fair to, and in the best interest of, the stockholders of NewsEdge. Accordingly,
Section 203 is inapplicable to the Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In EDGAR v. MITE CORP., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987 in
CTS CORP. v. DYNAMICS CORP. OF AMERICA, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquirer from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
NewsEdge, directly or through its subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. NewsEdge does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, NewsEdge will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, NewsEdge might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Merger Sub might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer, and the Merger. In such case, Merger Sub may not be
obligated to accept for payment any Shares tendered.
ANTITRUST. The parties intend to notify the German Federal Cartel Office
(the "FCO") of the proposed Merger as soon as possible. After an initial review
of the proposed Merger by the FCO, which may last for one month, the FCO will
decide whether to clear the proposed Merger or open a second stage
investigation, which may last for a further period of three months. If following
the investigation, the FCO has found that the proposed Merger would create or
strengthen a dominant position in Germany, the FCO may take such actions as it
deems necessary or desirable in the public interest to prevent the proposed
Merger from being implemented in respect of the German market.
The parties intend to submit the proposed Merger for approval by the
Brazilian antitrust authorities. The Secretariat for Economic Monitoring and
Secretariat of Economic Law will consider the proposed Merger and each will
issue an opinion to the Administrative Council for Economic Defense (the
"Council"), Brazil's antitrust tribunal. This Council will make a decision with
respect to the proposed Merger. The review of the proposed Merger by the
Brazilian antitrust authorities may take longer than six months, but will not
prevent the proposed Merger from taking effect; provided, however, if the
Council decides that the Merger is anti-competitive, it may impose restrictions
on the parties or order an unwinding of the Merger.
Thomson and NewsEdge conduct operations in a number of jurisdictions where
other regulatory filings or approvals may be required or advisable in connection
with the completion of the Merger. Thomson and NewsEdge are currently in the
process of reviewing whether filings or approvals may be required or desirable
in these jurisdictions which may be material to Thomson and NewsEdge and its
subsidiaries. It is possible that one or more of these filings may not be made,
or one or more of these
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approvals, which are not as a matter of practice required to be obtained prior
to effectiveness of a merger transaction, may not be obtained, prior to the
Merger.
REQUIRED VOTE OF STOCKHOLDERS
Under the DGCL, if Merger Sub becomes the owner of 90% of the outstanding
Shares as a result of the Offer, Merger Sub will be able to effect the Merger
without the approval of NewsEdge's stockholders. However, if Merger Sub does not
become the owner of 90% of the outstanding Shares, a meeting of stockholders
will be required to approve the Merger. The affirmative vote of at least a
majority of the outstanding Shares is required to approve the Merger. If Merger
Sub consummates the Offer by acquiring at least a majority of the outstanding
Shares, Merger Sub will be able to approve the Merger without the vote of any
other stockholder.
APPRAISAL RIGHTS
Holders of the Shares do not have appraisal rights as a result of the Offer.
However, if Merger Sub becomes the owner of 90% of the outstanding Shares and
effects the Merger without approval of NewsEdge's stockholders, they can
exercise appraisal rights in connection with the Merger. In addition, if Merger
Sub does not acquire 90% of the outstanding Shares and calls a stockholders
meeting to approve the Merger and if NewsEdge's Shares remain listed on a
national securities exchange or are then quoted on the Nasdaq National Market or
are held of record by more than 2,000 holders, NewsEdge stockholders will not
have appraisal rights in connection with the Merger. However, if Merger Sub does
not acquire 90% of the outstanding Shares and calls a stockholder meeting to
approve the Merger and if NewsEdge's Shares are not listed on a national
securities exchange or are not then quoted on the Nasdaq National Market or are
not held of record by more than 2,000 holders, NewsEdge stockholders will have
appraisal rights in connection with the Merger. Appraisal rights, including the
procedures stockholders must follow in order effectively to demand and perfect
such rights, are summarized under the caption "Appraisal Rights" in the
Information Statement. The Delaware statute governing appraisal is attached to
the Information Statement as Annex C.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS
<Table>
Exhibit (a)(1)(i) Offer to Purchase, dated August 21, 2001 (incorporated by
reference to Exhibit (a)(1) to the Schedule TO of Merger Sub
filed on August 21, 2001).
Exhibit (a)(1)(ii) Form of Letter of Transmittal (incorporated by reference to
Exhibit (a)(2) to the Schedule TO of Merger Sub filed on
August 21, 2001).
Exhibit (a)(2)(i) Letter to Stockholders of NewsEdge, dated August 21, 2001.*
Exhibit (a)(2)(ii) Fairness Opinion of Broadview International LLC, dated
August 6, 2001 (included as Annex B to this Schedule
14D-9).*
Exhibit (e)(1) Agreement and Plan of Merger, dated as of August 6, 2001,
among NewsEdge, Thomson and Merger Sub.
Exhibit (e)(2) Stockholders Agreement, dated as of August 6, 2001, among
Thomson, Merger Sub and certain stockholders of NewsEdge.
Exhibit (e)(3) Confidentiality Agreement, dated as of May 16, 2001 by and
between Broadview International LLC, on behalf of NewsEdge,
and West Group.
Exhibit (e)(4) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Clifford M. Pollan.
Exhibit (e)(5) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Ronald Benanto.
</Table>
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<Table>
Exhibit (e)(6) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Charles White.
Exhibit (e)(7) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Thomas Karanian.
Exhibit (e)(8) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and John Crozier.
Exhibit (e)(9) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and David Scott.
Exhibit (e)(10) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Alton Zink.
Exhibit (e)(11) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Lee Phillips.
Exhibit (e)(12) Information Statement of NewsEdge, dated August 21, 2001
(included as Annex A to this Schedule 14D-9).*
ANNEX A Information Statement
ANNEX B Fairness Opinion of Broadview
ANNEX C Delaware Statute Governing Appraisal
</Table>
- ------------------------
* Included with the Schedule 14D-9 mailed to stockholders.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
<Table>
NEWSEDGE CORPORATION
[LOGO]
By: Clifford M. Pollan
CHIEF EXECUTIVE OFFICER AND PRESIDENT
Dated: August 21, 2001
</Table>
17
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ANNEX A
NEWSEDGE CORPORATION
80 BLANCHARD ROAD
BURLINGTON, MASSACHUSETTS 01803
INFORMATION STATEMENT PURSUANT TO SECTION 14(F)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AND RULE 14F-1 THEREUNDER
This Information Statement is being mailed on or about August 21, 2001 as
part of the Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9") of NewsEdge Corporation, a Delaware corporation ("NewsEdge").
On August 6, 2001, NewsEdge, The Thomson Corporation, a corporation
incorporated under the laws of the Province of Ontario ("Thomson") and InfoBlade
Acquisition Corporation, a Delaware corporation and an indirect wholly owned
subsidiary of Thomson ("Merger Sub"), entered into an Agreement and Plan of
Merger (the "Merger Agreement") pursuant to which Merger Sub will commence a
tender offer (the "Offer") to purchase all the issued and outstanding shares of
common stock, par value $0.01 per share, of NewsEdge (the "Common Stock" or the
"Shares") at a price per share of $2.30, net to the seller in cash without
interest. Following completion of the Offer and subject to the satisfaction or
waiver of certain conditions contained in the Merger Agreement, Merger Sub will
be merged with and into NewsEdge (the "Merger") and NewsEdge will become an
indirect wholly owned subsidiary of Thomson. Pursuant to the Merger Agreement,
Merger Sub commenced the Offer on August 21, 2001. The Offer is scheduled to
expire at 12:00 midnight, New York City time, on Tuesday, September 18, 2001,
unless the Offer is extended in accordance with the terms of the Merger
Agreement. The Merger Agreement provides that upon the consummation of the
Offer, and from time to time thereafter, NewsEdge will cause certain designees
of Merger Sub (the "Thomson Designees") to be elected to the Board of Directors
of NewsEdge (the "Board"). If, however, the Merger Agreement is terminated or if
Merger Sub does not accept Shares tendered for payment, then Merger Sub will not
have any right to designate directors for election to the Board.
This Information Statement is being mailed to you in accordance with
Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and Rule 14f-1 under the Exchange Act. This Information Statement
supplements information in the Schedule 14D-9. Information herein relating to
Thomson, Merger Sub or the Thomson Designees (as defined below) has been
provided by Thomson and Merger Sub. You are urged to read this Information
Statement carefully. You are not, however, required to take any action with
respect to the information contained in this Information Statement at this time.
Capitalized terms used herein but not otherwise defined shall have the
meanings set forth in the Schedule 14D-9.
The Common Stock is the only class of voting securities of NewsEdge
outstanding. Each share of Common Stock entitles the holder thereof to one vote.
As of August 6, 2001, there were 18,621,403 shares of Common Stock outstanding
and 432,000 shares of Common Stock held by NewsEdge in treasury.
A-1
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DESIGNEES TO THE BOARD OF DIRECTORS OF NEWSEDGE
Pursuant to the Merger Agreement, promptly upon the purchase by Merger Sub
of Shares pursuant to the Offer, and from time to time thereafter, Merger Sub
will be entitled to designate a number of directors to the Board, rounded up to
the next whole number (but rounded down if rounding up would cause the Thomson
Designees to constitute the entire Board), equal to the product of (i) the total
number of directors on the Board (giving effect to the directors elected
pursuant to Merger Sub's rights described herein) and (ii) the percentage that
such aggregate number of Shares beneficially owned by Merger Sub or any
affiliate of Merger Sub following such purchase bears to the aggregate number of
Shares then outstanding. The Board is presently comprised of eight directors
divided into three classes of directors (one class of two directors and two
classes of three directors each) serving overlapping three-year terms. In order
to appoint the Thomson Designees to the Board, NewsEdge will promptly take all
actions necessary to cause the Thomson Designees to be elected as directors of
NewsEdge, including increasing the size of the Board and/or securing the
resignations of such numbers of incumbent directors. NewsEdge will use its
reasonable best efforts to cause the Thomson Designees to constitute the same
percentage as the Thomson Designees shall constitute of the entire Board of
(i) each committee of the Board, (ii) each board of directors of each subsidiary
of NewsEdge, and (iii) each committee of each such board, in each case only to
the extent permitted by applicable law. Until the Effective Time, NewsEdge will
use its reasonable best efforts to ensure that at least two members of the Board
and each committee of the Board and such boards and committees of each
subsidiary of NewsEdge, as of August 6, 2001, who are not employees of NewsEdge,
shall remain members of the Board and of such boards and committees.
After the Thomson Designees have been elected or appointed to the Board and
before the Effective Time, any amendment of the Merger Agreement, any amendment
of NewsEdge's Certificate of Incorporation or By Laws, any termination of the
Merger Agreement by NewsEdge, any extension by NewsEdge of the time for
performance of any of the obligations of Thomson or Merger Sub under the Merger
Agreement or the waiver of NewsEdge's rights thereunder will require the
approval of a majority of the directors then in office who neither were Thomson
Designees nor are employees of NewsEdge or any subsidiary of NewsEdge.
It is currently anticipated that Thomson will designate one or more of the
individuals listed on Appendix 1 to this Information Statement as directors of
NewsEdge following consummation of the Offer. Thomson expects that such
representation would permit Thomson to exert substantial influence over
NewsEdge's conduct of its business and operations.
Thomson has informed NewsEdge that each of the individuals listed on
Appendix 1 has consented to serve as a director, if so designated. If necessary,
Thomson may select additional or other Thomson Designees, subject to the
requirements of Rule 14f-1. None of the potential Thomson Designees listed on
Appendix 1 (i) is currently a director of, or holds any position with, NewsEdge,
(ii) has a familial relationship with any directors or executive officers of
NewsEdge, or (iii) to NewsEdge's knowledge, beneficially owns any securities (or
other rights to acquire any securities) of NewsEdge. Thomson has advised
NewsEdge that, to Thomson's knowledge, none of the potential Thomson Designees
listed on Appendix 1 has been involved in any transaction with NewsEdge or any
of its directors, executive officers or affiliates that is required to be
disclosed pursuant to the rules and regulations of the Securities and Exchange
Commission (the "Commission"), except as may be disclosed in this Information
Statement or in the Schedule 14D-9.
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CURRENT DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES OF NEWSEDGE
The following table sets forth the directors, executive officers and key
employees of NewsEdge, their ages and the positions currently held by each such
person with NewsEdge. Ages are as of August 6, 2001. None of the directors,
executive officers or key employees has any family relationship to any other
director, executive officer or key employee of NewsEdge.
<Table>
<Caption>
NAME AGE POSITION
- ---- -------- --------------------------------------------------------
Clifford M. Pollan.......... 44 Chief Executive Officer, President and Director
Ronald Benanto.............. 52 Vice President--Finance, Chief Financial Officer,
Treasurer and Assistant Secretary
Charles White............... 33 Vice President--E-Content Business
Thomas Karanian............. 38 Vice President--Development, Operations and Customer
Service
John Crozier................ 42 Vice President--North American Sales
David M. Scott.............. 40 Vice President--Corporate Marketing
Alton Zink.................. 46 Vice President--Human Resources
Lee Phillips................ 48 Vice President--Product Marketing
Rory J. Cowan(2)............ 48 Chairman of the Board of Directors
Michael E. Kolowich......... 47 Vice Chairman and Director
James D. Daniell, 37 Director
Ph.D.(1)(2)...............
Murat H. Davidson, Jr....... 57 Director
William A. Devereaux(1)..... 54 Director
Basil P. Regan(1)........... 60 Director
Peter Woodward(2)........... 28 Director
</Table>
- ------------------------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
CLIFFORD M. POLLAN joined NewsEdge in 1989 as a Vice President, served as
Vice President--Sales and Marketing from May 1995 to March 1999 and as President
and Chief Operating Officer from April 1999. In March 2000, Mr. Pollan was
elected Chief Executive Officer and joined the Board of Directors. From 1986 to
1989, Mr. Pollan was a Director of Sales at Lotus Development Corporation, a
computer software company.
RONALD BENANTO joined NewsEdge in July 1999 as Vice President--Finance and
Operations, Treasurer and Assistant Secretary. From February 1998 to July 1999,
Mr. Benanto served as Vice President, Finance at Genesis Direct, Inc., a direct
marketing and e-commerce company. From October 1991 to December 1997,
Mr. Benanto was the Senior Vice President, Finance and Chief Financial Officer
at Viewlogic Systems, Inc., an electronic design automation company.
CHARLES WHITE joined NewsEdge in May 1993 as a Marketing Representative. In
February 1996, Mr. White was promoted to Manager of New Business Development, a
position he held until 1997. In August 1997, Mr. White was promoted to Director
of Workgroup Sales. In May 1999, Mr. White
A-3
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became the Director of Middle Markets, a position he held until June 2000, when
he was promoted to Vice President--E-Content Business.
THOMAS KARANIAN joined NewsEdge in September 1994 as Director--Quality
Engineering and served as Director--Client Services from December 1996 through
August 1999, at which time he became Vice President--Client Services and
Operations. Prior to joining NewsEdge, Mr. Karanian was Quality Engineer Manager
at Lotus Development Corporation, a computer software company.
JOHN CROZIER joined NewsEdge in June 1994 as an Account Manager. In
June 1997, Mr. Crozier was promoted to District Manager, a position he held
until May 1998, when he was promoted to Area Director. In May 2000, Mr. Crozier
was promoted to Vice President--North American Sales.
DAVID M. SCOTT joined NewsEdge in November 1995 as Marketing Manager,
Financial Markets. Mr. Scott became International Marketing Director in
December 1997 and Corporate Marketing Director in December 1998. He has been in
his current role of Vice President--Corporate Marketing since July 2000. Prior
to joining NewsEdge, Mr. Scott was a Marketing Director in the e-Content
division of Knight-Ridder, a news and information company.
ALTON ZINK joined NewsEdge in March 1998 as Director--Human Resources.
Mr. Zink became Vice President--Human Resources in April 1999. Prior to joining
NewsEdge, Mr. Zink was Director of Corporate Human Resources at PictureTel
Corporation, a telecommunications company, from 1989 to 1998.
LEE PHILLIPS joined NewsEdge in July 2000 as Vice President--Product and
Content. Mr. Phillips became Vice President--Product Marketing in June 2001.
Prior to joining NewsEdge, Mr. Phillips was Vice President of Marketing and
Business Development at eCopyit.com, Inc., a document solutions internet portal,
from 1999 to 2000. From 1996 to 1999, Mr. Phillips was the Senior Vice President
of Marketing and Business at GammaGraphX, Inc., a document solutions company.
RORY J. COWAN has served on the Board of NewsEdge since May 1993 and was
elected Chairman in March 2000. Since December 1996, Mr. Cowan has been Chairman
and Chief Executive Officer of Lionbridge Technologies, an international
software services company. From 1991 to 1995, Mr. Cowan was an Executive Vice
President of R.R. Donnelley & Sons Company, a supplier of commercial print and
print-related services. During 1995 and 1996, Mr. Cowan was also the Chief
Executive Officer of Stream International, Inc., a software services company.
Mr. Cowan also served as Chairman of Interleaf, Inc. from October 1996 to
January 1997. Mr. Cowan currently serves as a director of Fairmarket, Inc.
MICHAEL E. KOLOWICH joined NewsEdge in February 1998 as Vice Chairman and
Director in connection with NewsEdge's merger with Individual, Inc. From
September 1996 to February 1998, Mr. Kolowich served as Individual's President,
Chief Executive Officer and Chairman of the Board of Directors. Prior to joining
Individual, Mr. Kolowich served from July 1996 until September 1996 as Vice
President/Business Operations of Nets Inc., an Internet content provider formed
in June 1996 when AT&T New Media Services, a provider of interactive online
information services for business professionals, merged with Industry.Net.
Mr. Kolowich is a director of Learning Star Corp., a developer, manufacturer,
and retailer of educational products.
JAMES D. DANIELL, PH.D. became a director of NewsEdge in February 1998, in
connection with NewsEdge's merger with Individual. Dr. Daniell served on
Individual's board from 1997 until Individual's merger with NewsEdge.
Dr. Daniell has been Chief Executive Officer of Celarix, Inc., a collaborative
logistics software company since March 2001. Prior to joining Celarix,
Dr. Daniell was Chief Executive Officer of Order Trust LLC, an electronic
commerce company, from November 1997 until March 2001. From February 1997 to
November 1997, Dr. Daniell served as Chief Operating Officer and Vice President
of Strategy and New Business Development at AT&T Networked
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Commerce Services, an internet service provider. Dr. Daniell serves as Vice
Chairman of the Massachusetts Software Council and is also on the Board of
Advisors of espanol.com.
MURAT H. DAVIDSON, JR. became a director of NewsEdge in June 2000.
Mr. Davidson has been Managing Director of K2 Advisors, an investment firm,
since March 2001. Prior to joining K2 Advisors, Mr. Davidson was a Managing
Director of Regan Partners L.P., a limited partnership specializing in
investments in turnaround companies and special situations, from 1996 to March
2001.
WILLIAM A. DEVEREAUX became a director of NewsEdge in February 1998, in
connection with NewsEdge's merger with Individual. Mr. Devereaux served on
Individual's board from 1989 until the merger. Mr. Devereaux has been Managing
Director of American Capital Company, a venture capital and merchant banking
company, since 1988.
BASIL P. REGAN became a director of NewsEdge in March 2000. In 1989,
Mr. Regan founded and is presently a General Partner of Regan Partners, L.P.
Mr. Regan is also President of Regan International Fund Ltd. and Regan Fund
Management Ltd.
PETER WOODWARD became a director of NewsEdge in March 2000. Since 1996,
Mr. Woodward has been a research analyst with Regan Partners L.P. Prior to
joining Regan Partners, Mr. Woodward was a research analyst for Munn,
Bernhard & Associates, a New York investment management company, focusing on
technology and related companies.
The Board of Directors is divided into three classes, one of which consists
of two directors and two of which consist of three directors each. Each director
serves for a three-year term. All directors will hold office until their
successors have been duly elected and qualified or until their earlier
resignation or removal.
Executive officers of the Corporation are elected by the Board of Directors
on an annual basis and serve until their successors have been duly elected and
qualified.
BOARD MEETINGS AND COMMITTEES
The Board met 14 times during the fiscal year ended December 31, 2000. Each
of the directors attended at least 75% of the meetings of the Board during
fiscal 2000. NewsEdge established an Audit Committee and Compensation Committee
during fiscal 1995. The Audit Committee of the Board, of which Messrs. Cowan,
Daniell and Woodward are currently members, is responsible for reviewing the
results and scope of audits and other services provided by NewsEdge's
independent auditors. The Audit Committee did not meet during fiscal 2000. The
Compensation Committee, whose members currently are Messrs. Daniell, Devereaux
and Regan, makes recommendations concerning the salaries and incentive
compensation of executive officers, employees and consultants to NewsEdge and
administers NewsEdge's stock plans. The Compensation Committee met twice during
fiscal 2000. The Board does not have a standing nominating committee.
DIRECTOR COMPENSATION
On January 23, 1996, the Compensation Committee of the Board approved the
Director Compensation Plan. Under the Director Compensation Plan, each
non-employee director receives both an annual retainer of $5,000 and a fee of
$1,000 for each Board meeting physically attended. A "non-employee director,"
for purposes of the Director Compensation Plan, is a director who is not an
employee of NewsEdge. Non-employee directors are also reimbursed for their
reasonable out-of-pocket travel expenses associated with their attendance at
Board meetings. During the fiscal year ended December 31, 2000, Mr. Daniell
earned $9,000, Mr. Devereaux earned $11,000, Mr. Davidson earned $8,000 and
Messrs. Cowan, Regan and Woodward each earned $12,000 under the Director
Compensation Plan.
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In addition, in order to provide an incentive to non-employee directors,
options have been granted to non-employee directors pursuant to the 1995
Non-employee Director Stock Option Plan, as amended. Under this plan, each
non-employee director received, on the date such person was first elected to the
Board, an initial grant of an option to purchase 20,000 Shares, vesting over
three years. A "non-employee director" for purposes of this plan, is a director,
who is not an employee or officer of NewsEdge. Subsequent to the initial grant
under this plan, each non-employee director who has attended at least 75% of the
board meetings during the previous fiscal year received an option to purchase
2,500 shares of Common Stock, vesting on the first anniversary of the date of
such grant. All options granted under this plan have an exercise price equal to
the fair market value of the Common Stock on the date of grant. Each option
granted under this plan will expire ten years from the date of grant. As of
June 5, 2000, all options available under this plan had been granted, however
NewsEdge continues to grant non-employee directors options under its 1995 Stock
Plan, as amended.
During the fiscal year ended December 31, 2000, Messrs. Cowan, Daniell and
Devereaux each received options to purchase 2,500 shares at an exercise price of
$2.75 per share. Messrs. Regan and Woodward each received options to purchase
20,000 shares at an exercise price of $2.00 per share and Mr. Davidson received
options to purchase 20,000 shares at an exercise price of $2.75 per share.
REPORT OF THE AUDIT COMMITTEE
The following is the report of the Audit Committee with respect to
NewsEdge's audited financial statements for 2000. This report shall not be
deemed to be incorporated by reference into any filing under the Securities Act
of 1933, as amended (the "Securities Act") or under the Exchange Act by any
general statement of incorporation by reference, but shall only be deemed to be
incorporated by reference if NewsEdge specifically incorporates the information
by reference. In addition, this report shall not otherwise be deemed soliciting
material or filed under these Acts.
The primary purpose of the Audit Committee of the Board of Directors is to
assist the Board in fulfilling its oversight responsibilities by reviewing
(i) the financial information which is provided to the stockholders,
governmental and regulatory bodies and others, (ii) the system of financial
internal controls which management and the Board have adopted and (iii) the
audit process. NewEdge's Audit Committee consists of three members of the Board
of Directors, Rory J. Cowan, James D. Daniell and Peter Woodward, all of whom
are "independent directors" for purposes of the National Association of
Securities Dealers' listing standards. All members of the Audit Committee are
financially literate and Rory J. Cowan, chairman of the Audit Committee, has
extensive financial management experience. The Board adopted a written charter
for the Audit Committee on May 4, 2000, a copy of which is attached hereto as
Appendix 2.
Management is responsible for the preparation, presentation and integrity of
NewsEdge's financial statements, accounting and financial reporting principles
and internal controls and procedures designed to assure compliance with
accounting standards and applicable laws and regulations. The independent
auditors, Arthur Andersen LLP, are responsible for performing an independent
audit of the consolidated financial statements in accordance with generally
accepted auditing standards. The Audit Committee discussed with NewsEdge's
independent auditors the overall scope and plans for the audit. The Audit
Committee meets with NewsEdge's internal finance and accounting staff and its
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of NewsEdge's internal controls
and the overall quality of NewsEdge's financial reporting.
The Audit Committee has reviewed and discussed the audited financial
statements for the fiscal year ended December 31, 2000, with NewsEdge's
management and the independent auditors. The Audit Committee discussed with the
independent auditors the matters required to be discussed by Statement on
Auditing Standards No. 61, Communication with Audit Committees, as amended. In
addition, the Committee has discussed with the independent auditors the
auditor's independence from
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NewsEdge and its management, including the matters in the written disclosures
required by Independence Standards Boards Standard No. 1, Independence
Discussions with Audit Committee. Based upon these reviews and discussion, the
Audit Committee recommended to the Board of Directors, and the Board of
Directors approved, that the audited financial statements be included in
NewsEdge's Annual Report on SEC Form 10-K for the fiscal year ended
December 31, 2000.
The members of the Audit Committee are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of auditing
or accounting, including in respect of auditor independence. Members of the
committee rely without independent verification on the information provided to
them and on the representations made by management and the independent auditors.
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
referred to above do not assure that the audit of NewsEdge's financial
statements has been carried out in accordance with generally accepted auditing
standards, that the financial statements are presented in accordance with
generally accepted accounting principles or that Arthur Andersen LLP is in fact
"independent" as required by the Nasdaq National Market.
AUDIT COMMITTEE:
Rory J. Cowan
James D. Daniell
Peter Woodward
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MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table presents information as to the beneficial ownership of
Shares as of August 6, 2001 by:
- each stockholder known by NewsEdge to be the beneficial owner of more than
5% of the Shares;
- each director of NewsEdge;
- each named executive officer of NewsEdge; and
- all of NewsEdge's directors and executive officers as a group.
Beneficial ownership is determined under the rules of the Commission and
generally includes voting or investment power with respect to securities. Unless
indicated below, to NewsEdge's knowledge, 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. Shares
subject to options that are currently exercisable or exercisable within 60 days
of August 6, 2001 are deemed to be outstanding and to be beneficially owned by
the person holding the options for the purpose of computing the percentage
ownership of any other person. Unless indicated below, the address for each
listed stockholder is c/o NewsEdge Corporation, 80 Blanchard Road, Burlington,
Massachusetts 01803.
The percentage of Shares outstanding as of August 6, 2001 is based on
18,621,403 Shares outstanding on that date and 1,722,728 Shares issuable
pursuant to outstanding options and warrants exercisable within 60 days of
August 6, 2001.
<Table>
<Caption>
SHARES
BENEFICIALLY PERCENTAGE
NAME OWNED BENEFICIALLY OWNED
- ---- -------------- ------------------
PRINCIPAL STOCKHOLDERS(1):
Donald L. McLagan(2)........................................ 2,149,999 10.6%
DIRECTORS:
Rory J. Cowan(3)............................................ 122,794 *
Michael E. Kolowich(4)...................................... 113,861 *
William A. Devereaux(5)..................................... 286,557 1.41%
James D. Daniell, Ph.D.(6).................................. 31,500 *
Basil P. Regan(7)........................................... 5,707,197 28.05%
Murat H. Davidson, Jr.(8)................................... 120,556 *
Peter Woodward(9)........................................... 12,666 *
NAMED OFFICERS:
Clifford M. Pollan(10)...................................... 650,243 3.20%
Ronald Benanto(11).......................................... 198,077 *
Thomas Karanian(12)......................................... 123,538 *
Jon McNerney(13)............................................ -- --
Charles White(14)........................................... 101,849 *
ALL DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP:
(16 persons)(15)............................................ 7,701,410 37.86%
</Table>
- ------------------------
* Represents less than 1% of the outstanding shares.
(1) This information was obtained from filings made with the SEC pursuant to
Sections 13(d) and 13(g) of the Securities and Exchange Act of 1934, as
amended, and from information provided to NewsEdge by Mr. McLagan.
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(2) Includes 444,442 Shares held in trust for the benefit of Mr. McLagan's two
children, of which Mr. McLagan's wife is the sole trustee. Mr. McLagan
disclaims beneficial ownership of such Shares.
(3) Includes 525,000 Shares issuable pursuant to outstanding stock options and
warrants exercisable within 60 days of August 6, 2001.
(4) Includes 8,000 Shares issuable pursuant to outstanding warrants exercisable
within 60 days of August 6, 2001.
(5) Includes 56,001 Shares issuable pursuant to outstanding stock options
exercisable within 60 days of August 6, 2001.
(6) Includes 25,000 Shares issuable pursuant to outstanding stock options
exercisable within 60 days of August 6, 2001.
(7) Includes 3,172,382 Shares held by Regan Partners, L.P.; 1,225,000 Shares
held by the Regan International Fund, L.P.; 445,588 Shares held by The
Wellcome Trust JD-84; 353,500 Shares held by Deutsche Daiwa Super Hedge
Fund, L.P.; Mr. Regan is President and sole stockholder of Regan Fund
Management, Ltd., general partner of Regan Partners L.P., Regan Fund
Management Ltd. is the investment manager for Regan International Fund
L.P., provides investment management services to The Wellcome Trust JD-84
and has a trading advisory agreement with Deutsche Daiwa Super Hedge Fund,
L.P. Also includes 19,999 Shares issuable to Mr. Regan pursuant to
outstanding stock options and warrants exercisable within 60 days of
August 6, 2001; 173,333 Shares issuable to Regan Partners, L.P. pursuant to
outstanding warrants exercisable within 60 days of August 6, 2001; 73,333
Shares issuable to Regan International Fund, L.P. pursuant to outstanding
warrants exercisable within 60 days of August 6, 2001; and 153,333 Shares
issuable to The Wellcome Trust JD-84 pursuant to outstanding warrants
exercisable within 60 days of August 6, 2001.
(8) Includes 5,000 Shares held by the 1992 Davidson Family Trust. Also includes
8,500 Shares held by Mr. Davidson's daughter and 23,529 Shares held by H.G.
Wellington, Custodian for the benefit of the Murat H. Davidson Rollover
IRA. Also includes 13,333 Shares issuable to H.G. Wellington, Custodian for
the benefit of the Murat H. Davidson Rollover IRA pursuant to outstanding
warrants exercisable within 60 days of August 6, 2001. Mr. Davidson
disclaims beneficial ownership of such Shares. Also includes 13,333 Shares
issuable to Mr. Davidson pursuant to outstanding warrants exercisable
within 60 days of August 6, 2001
(9) Includes 6,666 Shares issuable pursuant to outstanding stock options
exercisable within 60 days of August 6, 2001.
(10) Includes 522,499 Shares issuable pursuant to outstanding stock options and
warrants exercisable within 60 days of August 6, 2001.
(11) Includes 188,665 Shares issuable pursuant to outstanding stock options and
warrants exercisable within 60 days of August 6, 2001.
(12) Includes 123,538 Shares issuable pursuant to outstanding stock options and
warrants exercisable within 60 days of August 6, 2001.
(13) Mr. McNerney resigned from NewsEdge effective January 15, 2001.
(14) Includes 61,849 Shares issuable pursuant to outstanding stock options and
warrants exercisable within 60 days of August 6, 2001.
(15) Includes 1,722,728 Shares issuable pursuant to outstanding stock options
and warrants exercisable within 60 days of August 6, 2001.
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EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION SUMMARY
The following table sets forth summary information concerning the
compensation paid or earned for services rendered to NewsEdge in all capacities
during the fiscal years ended December 31, 2000, 1999, and 1998 to (i) each
individual who served as NewsEdge's Chief Executive Officer for the fiscal year
ended December 31, 2000 and (ii) each of the other four most highly compensated
executive officers of NewsEdge who received total annual salary and bonus in
excess of $100,000 in the fiscal year ended December 31, 2000 (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
COMPENSATION
SECURITIES
COMPENSATION UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR ANNUAL SALARY($) BONUS ($)(1) OPTIONS(#) COMPENSATION($)(2)
- --------------------------- -------- ---------------- ------------ ------------ ------------------
Donald L. McLagan(3) ......... 2000 38,542 16,713 -- 147,298(4)
Chairman, Chief Executive 1999 176,827 13,779 -- 800
Officer and Director 1998 156,000 19,991 100,500 800
Clifford M. Pollan(3) ........ 2000 232,496 89,780 300,000 840
President and Chief Executive 1999 172,497 44,690 120,000 800
Officer and Director 1998 156,000 35,591 80,500 800
Ronald Benanto ............... 2000 182,313 65,000 75,000 --
Vice President-Finance, Chief 1999 85,479 21,981 150,000 --
Financial Officer, Treasurer & 1998 -- -- -- --
Assistant Secretary
Thomas Karanian .............. 2000 158,000 111,779 75,000 2,304
Vice President--Development, 1999 135,250 18,922 20,845 11,300
Operations and Customer 1998 91,500 13,313 16,750 2,289
Service
Jon McNerney(5) .............. 2000 241,500 148,978 130,000 1,260
Senior Vice President-- 1999 238,500 19,991 40,000 26,707
Worldwide Sales 1998 174,000 -- 50,500 1,200
Charles White ................ 2000 160,000 101,256 77,000 17,910
Vice President--E-Content 1999 86,333 -- 10,845 106,910
Business 1998 58,083 6,487 13,966 59,656
</Table>
- ------------------------
(1) Includes bonuses earned with respect to services rendered in the fiscal year
indicated, whether or not such bonus was actually paid during such fiscal
year.
(2) Represents matching contributions made by NewsEdge to the Named Executive
Officer under NewsEdge's 401(k) plan, commissions paid and gains on stock
option exercises.
(3) Mr. McLagan retired as NewsEdge's Chairman and Chief Executive Officer and
as a Director of NewsEdge in March 2000. Effective March 14, 2000,
Mr. Pollan was named Chief Executive Officer and was appointed to the Board
of Directors.
(4) Also includes severance payments made to Mr. McLagan subsequent to his
retirement in March 2000.
(5) Mr. McNerney resigned from NewsEdge effective January 15, 2001.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table provides certain information concerning grants of
options to purchase NewsEdge's Common Stock made during the year ended
December 31, 2000 to each of the Named Executive Officers. No stock appreciation
rights ("SARs") were granted during the fiscal year ended December 31, 2000.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
<Table>
<Caption>
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT $/VALUE
NAME GRANTED FISCAL YEAR ($/SHARE) DATE (1)
- ---- ------------ ---------------- ----------- ---------- ---------------
Donald L. McLagan................ -- -- -- -- --
Clifford M. Pollan............... 300,000(2) 13.3% $2.25 4/13/10 $570,000
Ronald Benanto................... 75,000(2) 3.3% $2.25 4/13/10 $142,500
Thomas Karanian.................. 75,000(2) 3.3% $2.25 4/13/10 $142,500
Jon McNerney..................... 130,000(2) 5.8% $2.25 4/13/10 $247,000
Charles White.................... 42,500(2) $2.25 4/13/10 $ 80,750
34,500(2) 3.4%(3) $2.00 6/5/10 $ 65,550
</Table>
- ------------------------
(1) In accordance with Securities and Exchange Commission rules, the
Black-Scholes option pricing model was chosen to estimate the grant date
present value of the options set forth in this table. NewsEdge's use of this
model should not be construed as an endorsement of its accuracy at valuing
options. All stock option valuation models, including the Black-Scholes
model, require a prediction about the future movement of the stock price.
The following assumptions were made for purposes of calculating the Grant
Date Present Value: an option term of 5 years, volatility at 1.41, interest
rate at (5.17-6.69)%. The real value of the options in this table depends
upon the actual performance of NewsEdge's stock during the applicable
period.
(2) One-half of all options granted will vest six months from the grant date
with the remainder vesting on the one year anniversary of the grant date.
(3) Represents percentage of the total options granted of 77,000 shares.
<Table>
<Caption>
VALUE OF UNEXERCISED
NUMBER OF UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT FISCAL
OPTIONS/SARS AT FISCAL YEAR-END
YEAR-END ---------------------------
SHARES ACQUIRED --------------------------- EXERCISABLE UNEXERCISABLE
NAME ON EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE ($)(1) ($)(1)
- ---- --------------- -------------- ----------- ------------- ----------- -------------
Donald L. McLagan.......... -- -- 71,333 29,167 -- --
Clifford M. Pollan......... -- -- 320,907 224,593 -- --
Ronald Benanto............. -- -- 108,333 116,667 -- --
Thomas Karanian............ 74 $264 79,076 54,302 -- --
Jon McNerney............... -- -- 92,915 162,984 -- --
Charles White.............. -- -- 65,342 43,799 -- $232
</Table>
- ------------------------
(1) Value is based on the difference between the option exercise price and the
fair market value at December 29, 2000 ($0.906 per share as quoted on the
Nasdaq National Market) multiplied by the number of shares underlying the
option.
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EMPLOYMENT AGREEMENTS
On January 18, 2001, Mr. Pollan, Mr. Benanto, Mr. White, Mr. Karanian,
Mr. Crozier, Mr. Scott, Mr. Zink and Mr. Phillips (each an "Officer") each
entered into employment agreements with NewsEdge. On April 1, 2001 Mr. Pollan,
Mr. Benanto, Mr. White, Mr. Karanian, Mr. Crozier and Mr. Phillips entered into
an amended employment agreement that amended and replaced their January 18, 2001
agreements (each of these amended agreements and the January 18, 2001 agreements
of Messrs. Scott and Zink, the "Original Employment Agreements"). Unless
employment is terminated earlier, each Original Employment Agreement provides
for an undefined term of employment until either party gives notice of
termination with at least 30 days written notice.
The Original Employment Agreements provide for annual base salaries of
$275,000 for Mr. Pollan, $210,000 for Mr. Benanto, $185,000 for each of
Messrs. White and Karanian, $180,000 for Mr. Crozier, $160,000 for Mr. Scott and
$150,000 for each of Messrs. Zink and Phillips. Each Officer is also eligible to
participate in NewsEdge's standard benefit plans, accrue paid vacation time and
receive an annual performance-based bonus of up to 50% of each Executive's
annual salary. The Original Employment Agreements would entitle each Officer to
a "change of control" bonus. This "change of control" bonus would be equal to
six months' compensation, including base salary and target bonus, for each of
the Officers (other than Mr. Pollan) and 12 months' compensation, including base
salary and target bonus for Mr. Pollan.
In connection with the Offer and the Merger, on August 6, 2001, each of the
Officers entered into an Amended and Restated Employment Agreement with NewsEdge
for one year terms (the "Amended Employment Agreements"), which supersede each
Officer's Original Employment Agreement (provided that the Merger Agreement is
not terminated prior to the Effective Time in which case the Amended Employment
Agreements shall automatically terminate and have no further force or effect and
the Original Employment Agreements shall be automatically reinstated upon the
termination of the Merger Agreement prior to the Effective Time). Accordingly,
no "change of control" bonus will be payable pursuant to the Original Employment
Agreements. The Amended Employment Agreements provide annual base salaries for
each Officer which are equal to those provided under the Original Employment
Agreements.
Under the Amended Employment Agreements upon the earlier of to occur of the
date of the purchase of the Shares pursuant to the Offer and the date of the
Effective Time of the Merger, each Officer will be paid the one-time "change of
control" bonus equal to the amount that would be payable to the Officer under
such Officer's Original Employment Agreement, as described above. The Amended
Employment Agreements further provide that if the Officer is an active employee
of NewsEdge on the one-year anniversary of the date of the Amended Employment
Agreement, the Officer will be paid, in the case of all Officers other than
Mr. Pollan, a bonus equal to 12 months' base salary and in the case of
Mr. Pollan a bonus equal to $365,000.
The Amended Employment Agreements also provide that during the term of the
Amended Employment Agreement and, with respect to clauses (i), (iii) and
(iv) below, for a period equal to 12 months after the termination of the
Officer's employment by NewsEdge (or any affiliate thereof) or, with respect to
clause (ii) below, 18 months after the termination of the Officer's employment
by NewsEdge (or any affiliate thereof) (the "Restricted Period"), the Officer
shall not (i) engage in certain restricted activities, including engaging in the
businesses of developing, operating, offering for sale and selling news or other
current information or software-based solutions pertaining thereto to
corporations and other businesses, government agencies, universities and other
academic institutions and professional services providers; (ii) be an employee
or consultant of, or provide services to, certain competitors of NewsEdge or any
of their respective direct or indirect subsidiaries; (iii) subject to certain
exceptions, have an interest in any person engaged in the restricted activities
set forth in clause (i) above in any capacity, including, without limitation, as
a partner, shareholder, officer,
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director, principal, agent, employee, trustee or consultant or any other
relationship or capacity; or (iv) interfere with business relationships between
NewsEdge or any of its affiliates and customers or suppliers of NewsEdge or any
of its affiliates.
Each of the Officers agreed that, during the term of the Amended Employment
Agreement and at all times thereafter, they shall treat as confidential and,
except as required in the performance of their duties and responsibilities under
their Amended Employment Agreement, not disclose, publish or otherwise make
available to the public or to any individual, firm or corporation any
confidential information of NewsEdge or Thomson (and its affiliates) except if
the confidential information (i) becomes generally available to the public other
than as a result of a disclosure by the Officer, (ii) was available to the
Officer on a non-confidential basis prior to his employment with NewsEdge or
(iii) becomes available to the Officer on a non-confidential basis from a source
other than NewsEdge or Thomson (and it affiliates) or any of their business
partners, provided that such source is not bound by a confidentiality agreement
with NewsEdge or Thomson or any such business partners.
The Amended Employment Agreements also provide that during the Restricted
Period, the Officer shall not (i) hire or attempt to hire, or (ii) solicit or
entice or attempt to solicit or entice away, any person who is (at the
applicable time or was within the six month period prior to any such hire,
solicitation or enticement) an officer, employee or consultant of NewsEdge or
Thomson Legal & Regulatory (including without limitation The Dialog Corporation
plc ("Dialog")) (in the case of clause (i) above) or NewsEdge or Thomson (in the
case of clause (ii) above), as applicable, either for his own account or for any
individual, firm or corporation, whether or not such person would commit any
breach of his contract of employment by reason of leaving the service of
NewsEdge, Thomson or Thomson Legal & Regulatory (including without limitation
Dialog), as applicable.
Each Officer further agreed that all discoveries, inventions, processes,
methods and improvements, conceived, developed or otherwise made by the Officer
at any time, alone or with others in any way relating to NewsEdge's present or
future business or products, whether patentable or subject to copyright
protection and whether or not reduced to practice, during the period of the
Officer's employment with NewsEdge (the "Developments"), shall be the sole
property of NewsEdge and assigned to NewsEdge all of the Officer's right, title
and interest throughout the world in and to all such Developments.
COMPENSATION COMMITTEE'S REPORT ON EXECUTIVE COMPENSATION
This report is submitted by the Compensation Committee. The Compensation
Committee during fiscal year 2000 initially comprised Ms. June Rokoff and
Messrs. Cowan and Daniell, each of whom are non-employee directors. In
March 2000, subsequent to Ms. Rokoff's resignation from the Board of Directors,
the Compensation Committee was re-constituted to comprise Messrs. Daniell,
Devereaux and Regan, who are also non-employee directors. Pursuant to authority
delegated by the Board of Directors, the Compensation Committee is responsible
for reviewing and administering NewsEdge's stock plans and reviewing and
approving compensation matters concerning the executive officers, employees and
consultants to NewsEdge.
CASH COMPENSATION. Messrs. McLagan, Pollan, Benanto, Karanian, McNerney and
White each received annual base salaries of $38,542, $232,496, $182,313,
$158,000, $241,500 and $160,000, respectively through December 31, 2000. The
Compensation Committee attempts to keep the base salary for NewsEdge's executive
officers competitive by comparing it with those of other companies in the
syndicated content and electronic publishing technologies industries and other
companies with similar market capitalizations. The Compensation Committee's goal
is to align the interests of NewsEdge's executive officers with its stockholders
by incenting them through performance based bonuses and equity compensation.
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On February 13, 1997, the Compensation Committee of the Board of Directors
approved a short-term cash incentive compensation plan (the "Accountability
Group Bonus Plan"), which provides that the executive officers, along with other
designated members of senior management, receive bonuses based upon NewsEdge's
financial performance in the current fiscal year. Each executive officer's bonus
may range from zero to a maximum amount determined by reference to the final
audited financial statements of NewsEdge. During the fiscal year ended
December 31, 2000, Messrs. McLagan, Pollan, Benanto, Karanian, McNerney and
White each earned a bonus of $16,713, $89,780, $65,000, $111,779, $148,978 and
$101,256, respectively pursuant to the Accountability Group Bonus Plan.
EQUITY COMPENSATION. NewsEdge's equity compensation program is designed to
provide long-term incentives to executive officers to encourage executive
officers to remain with NewsEdge and to provide executives with the opportunity
to obtain significant, long-term stock ownership. The Compensation Committee
generally grants options that become exercisable over a three-year period and
that have exercise prices equal to the fair market value of the Common Stock on
the date of grant. However, in the case of executive officers who beneficially
own more than ten percent (10%) of NewsEdge's Common Stock, the Internal Revenue
Code of 1986, as amended, requires that the exercise price of incentive stock
options granted to such executive officers be 110% of the fair market value of
the Common Stock on the date of grant. In 2000, pursuant to the 1995 Stock Plan,
the compensation Committee granted 299,998 non-qualified stock options to
Mr. Pollan, 74,996 non-qualified stock options to Mr. Benanto, 75,000
non-qualified stock options to Mr. Karanian, 130,000 non-qualified stock options
to Mr. McNerney, and 51,751 non-qualified stock options to Mr. White. In
addition, the Compensation Committee granted two incentive stock options to
Mr. Pollan, four incentive stock options to Mr. Benanto, 25,249 incentive stock
options to Mr. White and 2,688 incentive stock options to Mr. Karanian.
OTHER BENEFITS. NewsEdge also has various broad-based employee benefit
plans. Executive officers participate in these plans on the same terms as
eligible, non-executive employees, subject to any legal limits on the amounts
that may be contributed or paid to executive officers under these plans.
NewsEdge offers a stock purchase plan under which employees may purchase Common
Stock at a discount. NewsEdge also maintains insurance and other benefit plans
for its employees.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. In general, under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
NewsEdge cannot deduct for federal income tax purposes, compensation in excess
of $1 million paid to certain executive officers. This deduction limitation does
not apply, however, to compensation that constitutes "qualified
performance-based compensation" within the meaning of Section 162(m) of the Code
and the Treasury Regulations promulgated thereunder. The Compensation Committee
has considered the limitations on deductions imposed by Section 162(m) of the
Code, and it is the Compensation Committee's present intention that, for so long
as it is consistent with its overall compensation objective, substantially all
tax deductions attributable to executive compensation will not be subject to the
deduction limitations of Section 162(m) of the Code.
Respectfully submitted by the members of the Compensation Committee of the
Board of Directors:
William A. Devereaux
James D. Daniell
Basil P. Regan
June Rokoff (1)
- ------------------------
(1) Ms. Rokoff resigned from the Compensation Committee and the Board of
Directors on March 13, 2000.
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Interlocks. The Compensation Committee during fiscal year 2000 was initially
comprised of Ms. June Rokoff and Messrs. Cowan and Daniell. In March 2000,
subsequent to Ms. Rokoff's resignation, NewsEdge's Compensation Committee was
reconstituted and currently consists of Messrs. Daniell, Devereaux and Regan. No
executive officer of NewsEdge served as a member of the compensation committee
of another entity (or other committee of the board of directors performing
equivalent functions or, in the absence of any such committee, the entire board
of directors) of which either Messrs. Daniell, Devereaux or Regan is an
executive officer.
STOCK PRICE PERFORMANCE
The following graph compares the percentage change in the cumulative total
stockholder return on NewsEdge's Common Stock during the period from NewsEdge's
initial public offering on August 11, 1995 through December 31, 2000, with the
cumulative total return for the Nasdaq Stock Market (U.S. Companies) and the
Nasdaq Computer and Data Processing Services Stock Index (the "Nasdaq Computer
Index"). The comparison assumes $100 were invested on August 11, 1995 in
NewsEdge Common Stock at the $15.00 initial offering price and in each of the
foregoing indices and assumes reinvestment of dividends, if any.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<Table>
<Caption>
NEWSEDGE CORPORATION NASDAQ COMPOSITE NASDAQ COMPUTER
8/11/95 $100.00 $100.00 $100.00
9/29/95 $232.00 $104.00 $102.00
12/29/95 $163.00 $105.00 $106.00
3/29/96 $245.00 $110.00 $111.00
6/28/96 $222.00 $119.00 $124.00
9/30/96 $193.00 $124.00 $126.00
12/31/96 $128.00 $130.00 $131.00
3/31/97 $85.00 $122.00 $122.00
6/30/97 $73.00 $145.00 $156.00
9/30/97 $68.00 $169.00 $171.00
12/31/97 $61.00 $159.00 $161.00
3/31/98 $94.00 $186.00 $213.00
6/30/98 $66.00 $191.00 $236.00
9/30/98 $58.00 $173.00 $223.00
12/31/98 $78.00 $223.00 $288.00
3/31/99 $57.00 $251.00 $347.00
6/30/99 $52.00 $275.00 $361.00
9/30/99 $62.00 $281.00 $374.00
12/31/99 $78.00 $415.00 $634.00
3/31/00 $28.00 $467.00 $624.00
6/30/00 $17.00 $406.00 $510.00
9/30/00 $13.00 $374.00 $471.00
12/31/00 $6.00 $250.00 $291.00
</Table>
- ------------------------
(1) Prior to August 11, 1995 NewsEdge's Common Stock was not publicly traded.
Comparative data is provided only for the period since that date. This chart
is not "solicited material", is not deemed filed with the Securities and
Exchange Commission and is not to be incorporated by reference in any
filings of NewsEdge under the Securities Act or the Exchange Act whether
made before or after the date hereof and irrespective of any general
incorporation language in any such filing.
(2) The stock price performance shown on the graph is not necessarily indicative
of future price performance. Information used on this graph was obtained
from the Nasdaq National Market System and the Nasdaq Computer indices were
prepared for Nasdaq by the Center for Research in Security Prices at the
University of Chicago, a source believed to be reliable, although NewsEdge
is not responsible for any errors or omissions in such information.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
William Blair & Company, an affiliate of William Blair Venture Partners III
("Blair"), is a customer of NewsEdge and was billed an aggregate of
approximately $115,000 in NewsEdge subscriber fees in the year ended
December 31, 2000. Ms. Carnahan, a general partner of Blair, served on the Board
of Directors of NewsEdge through March 2000.
In connection with NewsEdge's merger with Individual, Inc., NewsEdge entered
into an employment agreement with Michael E. Kolowich, NewsEdge's Vice Chairman
and Director and formerly the Chairman, President and Chief Executive Officer of
Individual. Under this employment agreement, Mr. Kolowich served as a full-time
senior executive consultant to NewsEdge from February 24, 1998 (the effective
date of the merger with Individual (the "Individual Effective Date") until
April 30, 1998 (the "Transition Period"). From May 1, 1998 until the third
anniversary of the Individual Effective Date, Mr. Kolowich served as a senior
executive consultant to NewsEdge (the "Remaining Term"). Furthermore, during the
term of his employment agreement, NewsEdge agreed to take all action necessary
and proper to cause Mr. Kolowich to be elected to NewsEdge's Board of Directors
and to serve as the Vice Chairman of NewsEdge. Pursuant to the employment
agreement, Mr. Kolowich received a salary at the annual rate of $350,000 during
the Transition Period and $50,000 during the Remaining Term. Mr. Kolowich was
eligible to participate in the benefits plans maintained by NewsEdge during the
term of the employment agreement. Also, under the terms of the employment
agreement, Mr. Kolowich will be bound by non-competition and non-disclosure
requirements. Upon the Individual Effective Date, NewsEdge assumed all stock
options then held by Mr. Kolowich all of which became immediately exercisable,
with the exception of 784 shares.
In March 2000, NewsEdge entered into a severance agreement and release with
Donald L. McLagan in connection with his retirement as Chief Executive Officer
and Chairman. Under the terms of the severance agreement and release,
Mr. McLagan received severance at an annual rate of $185,000 commencing
March 14, 2000 up to and through March 14, 2001. NewsEdge further agreed that
Mr. McLagan's options would be exercisable until March 14, 2001. Also under the
terms of the severance agreement and release, Mr. McLagan was bound by
non-competition, non-solicitation and non-disclosure requirements through
March 14, 2001.
On January 18, 2001 each Officer entered into employment agreements with
NewsEdge. On April 1, 2001, Mr. Pollan, Mr. Benanto, Mr. White, Mr. Karanian,
Mr. Crozier and Mr. Phillips entered into an amended employment agreement that
amended and replaced their January 18, 2001 agreements (each of these amended
agreements and the January 18, 2001 agreements of Messrs. Scott and Zink, the
"Original Employment Agreements"). Unless employment is terminated earlier, each
Original Employment Agreement provides for an undefined term of employment until
either party gives notice of termination with at least 30 days written notice.
The Original Employment Agreements provide for annual base salaries of
$275,000 for Mr. Pollan, $210,000 for Mr. Benanto, $185,000 for each of
Messrs. White and Karanian, $180,000 for Mr. Crozier, $160,000 for Mr. Scott and
$150,000 for each of Messrs. Zink and Phillips. Each Officer is also eligible to
participate in NewsEdge's standard benefit plans, accrue paid vacation time and
receive an annual performance-based bonus of up to 50% of each Executive's
annual salary. The Original Employment Agreements would entitle each Officer to
a "change of control" bonus. This "change of control" bonus would be equal to
six months' compensation, including base salary and targeted bonus, for each of
the Officers (other than Mr. Pollan) and 12 months' compensation, including base
salary and target bonus for Mr. Pollan.
In connection with the Offer and the Merger, each of the Officers have
entered into an Amended Employment Agreement with NewsEdge for one year terms,
which supersedes each Officer's Original Employment Agreement (provided that the
Merger Agreement is not terminated prior to the Effective Time in which case the
Amended Employment Agreement shall automatically terminate and have no
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further force or effect and the Original Employment Agreement shall be
automatically reinstated upon such termination of the Merger Agreement).
Accordingly, no "change of control" bonus will be payable pursuant to the
Original Employment Agreements.
The Amended Employment Agreements provide annual base salaries for each
Officer which are equal to those provided under the Original Employment
Agreements.
Under the Amended Employment Agreements upon the earlier to occur of the
date of the purchase of the Shares pursuant to the Offer and the date of the
Effective Time of the Merger, each Officer will be paid the one-time "change of
control" bonus equal to the amount that would be payable to the Officer under
such Officer's Original Employment Agreement, as described above. The Amended
Employment Agreements further provide that if the Officer is an active employee
of NewsEdge on the one-year anniversary of the date of the Amended Employment
Agreement, the Officer will be paid, in the case of all Officers other than
Mr. Pollan, a bonus equal to 12 months' base salary and in the case of
Mr. Pollan a bonus equal to $365,000. See "Employment Agreements" above.
COMPLIANCE UNDER SECTION 16(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires NewsEdge's directors and
executive officers, and persons who own more than 10% of a registered class of
NewsEdge's equity securities (collectively, "Insiders"), to file initial reports
of ownership and reports of changes in ownership with the Commission. The
Commission regulations also require Insiders to furnish NewsEdge with copies of
all Section 16(a) forms they file. Based solely on its review of the copies of
the forms furnished to NewsEdge and written representations from directors and
executive officers, NewsEdge believes that its Insiders complied with all
applicable Section 16(a) filing requirements for 2000.
APPRAISAL RIGHTS
No appraisal rights are available in connection with the Offer.
Notwithstanding the foregoing, if the Merger is consummated, holders of Shares
who have not tendered their Shares or, if applicable, voted in favor of the
Merger will have certain rights under the Delaware General Corporation Law (the
"DGCL") to dissent from the Merger and demand appraisal of, and to receive
payment in cash of the fair value of, their Shares. Holders of Shares who
perfect such rights by complying with the procedures set forth in Section 262 of
the DGCL ("Section 262") will have the "fair value" of their Shares (exclusive
of any element of value arising from the accomplishment or expectation of the
Merger) determined by the Delaware Court of Chancery and will be entitled to
receive a cash payment equal to such fair value for NewsEdge, as the surviving
corporation of the Merger. In addition, such dissenting holders of Shares would
be entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares.
To NewsEdge's knowledge, Thomson and Merger Sub do not intend to object,
assuming the proper procedures are followed, to the exercise of appraisal rights
by any stockholder and the demand for appraisal of, and payment in cash for the
fair value of, the Shares. To NewsEdge's knowledge, Thomson and Merger Sub
intend, however, to cause NewsEdge, as the surviving corporation of the Merger,
to argue in an appraisal proceeding that, for purposes of such proceeding, the
fair value of each Share is less than or equal to the Merger Consideration.
The foregoing summary of the rights of dissenting stockholders under the
DGCL does not purport to be a complete statement of the procedures to be
followed by holders of Shares desiring to exercise any dissenters' rights under
the DGCL. The preservation and exercise of dissenters' rights require strict
adherence to the applicable provisions of the DGCL. The complete text of
Section 262 is attached to this Information Statement as Annex C.
A-17
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APPENDIX 1
THOMSON DESIGNEES
The following table sets forth the name, age, current business address,
citizenship and present principal occupation or employment, and material
occupations, positions, offices or employment and business addresses thereof for
the past five years of each person who may be designated to the Board of
NewsEdge by Merger Sub. Except for David J. Hulland, who is a citizen of Great
Britain, each such person is a citizen of the United States. Unless otherwise
indicated, the current business address of each person is InfoBlade Acquisition
Corporation, Metro Center, One Station Place, Stamford, Connecticut 06902.
<Table>
<Caption>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD DURING THE
NAME, AGE AND CURRENT BUSINESS ADDRESS PAST FIVE YEARS AND BUSINESS ADDRESSES THEREOF
- -------------------------------------- ------------------------------------------------------------------------------
Michael S. Harris, 51 ............ Director of Merger Sub since July 2001. Senior Vice President, General Counsel
The Thomson Corporation and Secretary of Thomson since May 1998. Vice President and General Counsel of
Metro Center Thomson Holdings, Inc. ("THI"), Metro Center, One Station Place, Stamford, CT
One Station Place, 06902, since June 1993. Assistant Secretary and Assistant General Counsel of
Stamford, CT 06902, THI from May 1989 to June 1993.
USA
David J. Hulland, 51 ............. Director of Merger Sub since July 2001. Vice President Finance of Thomson
The Thomson Corporation since September 1999. Vice President and Group Controller of Thomson from May
Metro Center 1993 to September 1999. Group Controller of Thomson from 1977 to May 1993.
One Station Place
Stamford, CT 06902
USA
Edward A. Friedland, 45 .......... Director, Vice President and Secretary of Merger Sub since July 2001.
Thomson Financial Assistant Secretary of Thomson since May 2000. Deputy General Counsel of
Metro Center Thomson since 1998. Assistant General Counsel of Thomson from 1994 to 1998.
One Station Place Associate General Counsel of the Information/ Publishing Group from 1990 to
Stamford, CT 06902 1993. Currently serving a second term on the Board of Directors for the
USA Software & Information Industry Association.
Dennis J. Beckingham, 53 ......... President of Merger Sub since July 2001. Executive Vice President and Chief
Thomson Legal and Regulatory Financial Officer of Thomson Legal and Regulatory since 1996.
610 Opperman Drive
St. Paul, MN 55123
USA
David Hanssens, 44 ............... Vice President of Merger Sub since July 2001. Executive Vice President and
Thomson Legal and Regulatory Chief Strategy Officer of Thomson Legal and Regulatory from May 2001. Managing
610 Opperman Drive Director of The Parthenon Group in Boston, Massachusetts from 1992 to 2001.
St. Paul, MN 55123
USA
</Table>
1
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APPENDIX 2
NEWSEDGE CORPORATION
AUDIT COMMITTEE CHARTER
A. Purpose and Scope
The primary function of the Audit Committee (the "Committee") is to assist
the Board of Directors in fulfilling its responsibilities by reviewing: (i) the
financial reports provided by NewsEdge to the Securities and Exchange Commission
("SEC"), NewsEdge's shareholders or to the general public, and (ii) NewsEdge's
internal financial and accounting controls.
B. Composition.
The Committee shall be comprised of a minimum of three directors as
appointed by the Board of Directors, who shall meet the independence and audit
committee composition requirements under any rules or regulations of The NASDAQ
National Market, as in effect from time to time, and shall be free from any
relationship that, in the opinion of the Board of Directors, would interfere
with the exercise of his or her independent judgment as a member of the
Committee.
All members of the Committee shall either (i) be able to read and understand
fundamental financial statements, including a balance sheet, cash flow statement
and income statement, or (ii) be able to do so within a reasonable period of
time after appointment to the Committee. At least one member of the Committee
shall have employment experience in finance or accounting, requisite
professional certification in accounting, or other comparable experience or
background which results in the individual's financial sophistication, including
being or having been a chief executive officer, chief financial officer or other
senior officer with financial oversight responsibilities.
The Board may appoint one member who does not meet the independence
requirements set forth above and who is not a current employee of NewsEdge or an
immediate family member of such employee if the Board, under exceptional and
limited circumstances, determines that membership on the Committee by the
individual is required in the best interests of NewsEdge and its stockholders.
The Board shall disclose in the next proxy statement after such determination
the nature of the relationship and the reasons for the determination.
The members of the Committee shall be elected by the Board of Directors at
the meeting of the Board of Directors following each annual meeting of
stockholders and shall serve until their successors shall be duly elected and
qualified or until their earlier resignation or removal. Unless a Chair is
elected by the full Board of Directors, the members of the Committee may
designate a Chair by majority vote of the full Committee membership.
C. Responsibilities and Duties
To fulfill its responsibilities and duties the Committee shall:
Document Review
1. Review and assess the adequacy of this Charter periodically as
conditions dictate, but at least annually (and update this Charter if and
when appropriate).
2. Review with representatives of management and representatives of the
independent accounting firm NewsEdge's audited annual financial
statements prior to their filing as part of the Annual Report on
Form 10-K. After such review and discussion, the Committee shall
recommend to the Board of Directors whether such audited financial
statements should be published in NewsEdge's annual report on Form 10-K.
The Committee shall also review
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NewsEdge's quarterly financial statements prior to their inclusion in
NewsEdge's quarterly SEC filings on Form 10-Q.
3. Take steps designed to insure that the independent accounting firm
reviews NewsEdge's interim financial statements prior to their inclusion
in NewsEdge's quarterly reports on Form 10-Q.
Independent Accounting Firm
4. Recommend to the Board of Directors the selection of the independent
accounting firm, and approve the fees and other compensation to be paid
to the independent accounting firm. The Committee shall have the ultimate
authority and responsibility to select, evaluate and, when warranted,
replace such independent accounting firm (or to recommend such
replacement for shareholder approval in any proxy statement).
5. On an annual basis, receive from the independent accounting firm a
formal written statement identifying all relationships between the
independent accounting firm and NewsEdge consistent with Independence
Standards Board Standard 1. The Committee shall actively engage in a
dialogue with the independent accounting firm as to any disclosed
relationships or services that may impact its independence. The Committee
shall take, or recommend that the Board of Directors take, appropriate
action to oversee the independence of the independent accounting firm.
6. On an annual basis, discuss with representatives of the independent
accounting firm the matters required to be discussed by Statement on
Auditing Standards 61, as it may be modified or supplemented.
7. Meet with the independent accounting firm prior to the audit to review
the planning and staffing of the audit.
8. Evaluate the performance of the independent accounting firm and
recommend to the Board of Directors any proposed discharge of the
independent accounting firm when circumstances warrant. The independent
accounting firm shall be ultimately accountable to the Board of Directors
and the Committee.
Financial Reporting Process
9. In consultation with the independent accounting firm and management,
review annually the adequacy of NewsEdge's internal financial and
accounting controls.
Compliance
10. To the extent deemed necessary by the Committee, it shall have the
authority to engage outside counsel and/or independent accounting
consultants to review any matter under its responsibility.
Reporting
11. Prepare, in accordance with the rules of the SEC as modified or
supplemented from time to time, a written report of the audit committee
to be included in NewsEdge's annual proxy statement for each annual
meeting of stockholders occurring after December 14, 2000.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that NewsEdge's financial statement are complete and
accurate and are in accordance with generally accepted accounting principles.
2
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ANNEX B
BROADVIEW
<Table>
August 6,
2001
CONFIDENTIAL
</Table>
Board of Directors
NewsEdge Corporation
80 Blanchard Road
Burlington, Massachusetts 01803
Members of the Board:
We understand that NewsEdge Corporation ("NewsEdge" or the "Company"), The
Thomson Corporation ("Buyer or the "Parent") and NewsEdge Acquisition
Corporation, a wholly-owned subsidiary of Parent ("Merger Sub"), propose to
enter into an Agreement and Plan of Merger (the "Agreement") pursuant to which
Parent will cause Merger Sub to make a tender offer (the "Offer") to purchase
all of the issued and outstanding shares of common stock of News Edge ("NewsEdge
Common Stock") at a price per share of $2.30 (the "Offer Price") in cash and
subsequently merge with and into the Company (the "Merger"). Pursuant to the
Merger, each issued and outstanding share of NewsEdge Common Stock not acquired
in the Offer will be converted into the right to receive the highest per share
cash consideration paid pursuant to the Offer. The terms and conditions of the
above described Offer and Merger (together, the "Transaction") are more fully
detailed in the Agreement.
You have requested our opinion as to whether the Offer Price is fair, from a
financial point of view, to holders of NewsEdge Common Stock.
Broadview International LLC ("Broadview") focuses on providing merger and
acquisition advisory services to information technology ("IT"), communications
and media companies. In this capacity, we are continually engaged in valuing
such businesses, and we maintain an extensive database of IT, communications and
media mergers and acquisitions for comparative purpose. We are currently acting
as financial advisor to NewsEdge's Board of Directors and will receive a fee
from NewsEdge upon the delivery of this opinion.
In rendering our opinion, we have, among other things:
1) reviewed the terms of the Agreement in the form of the draft dated
August 3, 2001, furnished to us by Buyer's legal counsel on August 3,
2001 (which, for the purposes of this opinion, we have assumed, with
your permission, to be identical in all material respects to the
agreement to be executed);
2) reviewed NewsEdge's annual report on Form 10-K for the fiscal year ended
December 31, 2000, including the audited financial statements included
therein and NewsEdge's quarterly report on Form 10-Q for the period
ended March 31, 2001, including the unaudited financial statements
included therein;
3) reviewed certain internal financial and operating information concerning
NewsEdge, including unaudited historical quarterly financial statements
for the period ended June 30, 2001 and quarterly projections through
December 31, 2002, in each case prepared and furnished to us by NewsEdge
management;
4) participated in discussions with NewsEdge management concerning the
operations, business strategy, current financial performance and
prospects for NewsEdge;
5) discussed with NewsEdge management its view of the strategic rationale
for the Transaction;
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6) reviewed the recently reported closing prices and trading activity for
NewsEdge Common Stock;
7) compared certain aspects of the financial performance of NewsEdge with
public companies we deemed comparable;
8) analyzed available information, both public and private, concerning
other mergers and acquisitions we believed to be comparable in whole or
in part to the Transaction;
9) reviewed recent equity analyst reports covering NewsEdge;
10) participated in discussions related to the Transaction among NewsEdge,
Buyer and their respective advisors; and
11) conducted other financial studies, analyses and investigations as we
deemed appropriate for purposes of this opinion.
In rendering our opinion, we have relied without independent verification,
on the accuracy and completeness of all the financial and other information
(including without limitation the representations and warranties contained in
the Agreement) that was publicly available or furnished to us by NewsEdge, Buyer
or their respective advisors. With respect to the financial projections examined
by us, we have assumed that they were reasonably prepared and reflected the best
available estimates and good faith judgments of the management of NewsEdge as to
the future performance of NewsEdge. We have neither made nor obtained an
independent appraisal or valuation of any of NewsEdge's assets.
Based upon and subject to the foregoing and subject to the limitations and
assumptions below, we are of the opinion that the Offer Price is fair, from a
financial point of view, to holders of NewsEdge Common Stock.
For purposes of this opinion, we have assumed that NewsEdge is not currently
involved in any material transaction other than the Transaction, other publicly
announced transactions and those activities undertaken in the ordinary course of
conducting businesses. Our opinion is necessarily based upon market, economic,
financial and other conditions as they exist and can be evaluated as of the date
of this opinion, and any change in such conditions would require a reevaluation
of this opinion.
This opinion speaks only as of the date hereof. It is understood that this
opinion is for the information of the Board of Directors of NewsEdge in
connection with its consideration of the Transaction and does not constitute a
recommendation to any NewsEdge stockholder as to whether such stockholder should
tender its shares in the Offer or as to how such stockholder should vote with
respect to the Merger. This opinion may not be published or referred to, in
whole or part, without our prior written permission, which shall not be
unreasonably withheld. Broadview hereby consents to references to and the
inclusion of its opinion in its entirety in the Solicitation/Recommendation
Statement on Schedule 14D-9 and, if required, the Proxy Statement, in each case
to be distributed to NewsEdge stockholders in connection with the Transaction.
Sincerely,
/s/ Broadview International LLC
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ANNEX C
DELAWARE GENERAL CORPORATION LAW
SEC. 262 APPRAISAL RIGHTS.
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this section
with respect to such shares, who continuously holds such shares through the
effective date of the merger or consolidation, who has otherwise complied with
subsection (d) of this section and who has neither voted in favor of the merger
or consolidation nor consented thereto in writing pursuant to Section 228 of
this title shall be entitled to an appraisal by the Court of Chancery of the
fair value of the stockholder's shares of stock under the circumstances
described in subsections (b) and (c) of this section. As used in this section,
the work "stockholder" means a holder of record of stock in a stock corporation
and also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation; and the
words "depository receipt" mean a receipt or other instrument issued by a
depository representing an interest in one or more shares, or fractions thereof,
solely of stock of a corporation, which stock is deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to Section 251 (other than a merger effected pursuant to
Section 251(g) of this title), Section 252, Section 254, Section 257,
Section 258, Section 263 or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock, or
depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no appraisal
rights shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for its
approval the vote of the stockholders of the surviving corporation as
provided in subsection (f) of Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required by
the terms of an agreement of merger or consolidation pursuant to
Sections 251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
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d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under Section 253 of this title is not owned by
the parent corporation immediately prior to the merger, appraisal rights
shall be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections
(d) and (e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are available
pursuant to subsection (b) or (c) hereof that appraisal rights are available
for any or all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder electing to
demand the appraisal of such stockholder's shares shall deliver to the
corporation, before the taking of the vote on the merger or consolidation, a
written demand for appraisal of such stockholder's shares. Such demand will
be sufficient if it reasonably informs the corporation of the identity of
the stockholder and that the stockholder intends thereby to demand the
appraisal of such stockholder's shares. A proxy or vote against the merger
or consolidation shall not constitute such a demand. A stockholder electing
to take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to Section 228
or Section 253 of this title, each constituent corporation, either before
the effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of stock
of such constituent corporation who are entitled to appraisal rights of the
approval of the merger or consolidation and that appraisal rights are
available for any or all shares of such class or series of stock of such
constituent corporation, and shall include in such notice a copy of this
section; provided that, if the notice is given on or after the effective
date of the merger or consolidation, such notice shall be given by the
surviving or resulting corporation to all such holders of any class or
series of stock of a constituent corporation that are entitled to appraisal
rights. Such notice may, and, if given on or after the effective date of the
merger or consolidation, shall, also notify such stockholders of the
effective date of the merger or consolidation. Any stockholder entitled to
appraisal rights may, within 20 days after the date of mailing of such
notice, demand in writing from the surviving or resulting corporation the
appraisal of such holder's shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the stockholder and
that the stockholder intends thereby to demand the appraisal of such
holder's shares. If such notice did not notify stockholders of the effective
date of the merger or consolidation, either (i) each such constituent
corporation shall send a second notice before the
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effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send such
a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either notice
that such notice has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein. For purposes of determining the
stockholders entitled to receive either notice, each constituent corporation
may fix, in advance, a record date that shall be not more than 10 days prior
to the date the notice is given, provided, that if the notice is given on or
after the effective date of the merger or consolidation, the record date
shall be such effective date. If no record date is fixed and the notice is
given prior to the effective date, the record date shall be the close of
business on the day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied with
subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
such stockholder's written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in Chancery
in which the petition was filed a duly verified list containing the names and
addresses of all stockholders who have demanded payment for their shares and
with whom agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be filed by the
surviving or resulting corporation, the petition shall be accompanied by such a
duly verified list. The Register in Chancery, if so ordered by the Court, shall
give notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and to
the stockholders shown on the list at the addresses therein stated. Such notice
shall also be given by 1 or more publications at least 1 week before the day of
the hearing, in a newspaper of general circulation published in the City of
Wilmington, Delaware or such publication as the Court deems advisable. The forms
of the notices by mail and by publication shall be approved by the Court, and
the costs thereof shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
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(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted
such stockholder's certificates of stock to the Register in Chancery, if such is
required, may participate fully in all proceedings until it is finally
determined that such stockholder not entitled to appraisal rights under this
section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to receive
payment of dividends or other distributions on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the effective date of the merger or consolidation); provided, however, that
if no petition for an appraisal shall be filed within the time provided in
subsection (e) of this section, or if such stockholder shall deliver to the
surviving or resulting corporation a written withdrawal of such stockholder's
demand for an appraisal and an acceptance of the merger or consolidation, either
within 60 days after the effective date of the merger or consolidation as
provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the Court
of Chancery shall be dismissed as to any stockholder without the approval of the
Court, and such approval may be conditioned upon such terms as the Court deems
just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation.
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INDEX TO EXHIBITS
<Table>
Exhibit (a)(1)(i) Offer to Purchase, dated August 21, 2001 (incorporated by
reference to Exhibit (a)(1) to the Schedule TO of Merger Sub
filed on August 21, 2001).
Exhibit (a)(1)(ii) Form of Letter of Transmittal (incorporated by reference to
Exhibit (a)(2) to the Schedule TO of Merger Sub filed on
August 21, 2001).
Exhibit (a)(2)(i) Letter to Stockholders of NewsEdge, dated August 21, 2001.*
Exhibit (a)(2)(ii) Fairness Opinion of Broadview International LLC, dated
August 6, 2001 (included as Annex B to this Schedule
14D-9).*
Exhibit (e)(1) Agreement and Plan of Merger, dated as of August 6, 2001,
among NewsEdge, Thomson and Merger Sub.
Exhibit (e)(2) Stockholders Agreement among Thomson, Merger Sub and certain
stockholders of NewsEdge.
Exhibit (e)(3) Confidentiality Agreement, dated May 16, 2001, between
Broadview International LLC, on behalf of NewsEdge, and West
Group.
Exhibit (e)(4) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Clifford M. Pollan.
Exhibit (e)(5) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Ronald Benanto.
Exhibit (e)(6) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Charles White.
Exhibit (e)(7) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Thomas Karanian.
Exhibit (e)(8) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and John Crozier.
Exhibit (e)(9) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and David M. Scott.
Exhibit (e)(10) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Alton Zink.
Exhibit (e)(11) Amended and Restated Executive Employment Agreement dated
August 6, 2001 between NewsEdge and Lee Phillips.
Exhibit (e)(12) Information Statement of NewsEdge, dated August 21, 2001
(included as Annex A to this Schedule 14D-9).*
ANNEX A Information Statement
ANNEX B Fairness Opinion of Broadview
ANNEX C Delaware Statute Governing Appraisal
</Table>
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* Included with the Schedule 14D-9 mailed to stockholders.